TIDMHLCL
RNS Number : 1342U
Helical PLC
21 November 2019
HELICAL PLC
("Helical" or the "Group" or the "Company")
Half Year Results for the Six Months to 30 September 2019
HELICAL'S PREMIUM PORTFOLIO CONTINUES TO ATTRACT NEW TENANTS
WITH 244,000 SQ FT OF LETTINGS IN LONDON & MANCHESTER SINCE
APRIL 2019
Gerald Kaye, Chief Executive, commented:
"We have made good progress in the first half of the financial
year by attracting new tenants to 172,860 sq ft of space,
generating GBP3.9m (our share) of contracted rental income, and
since 30 September 2019 have let a further 71,525 sq ft, generating
an additional GBP2.1m of rental income for the Group. As we let the
remaining 121,000 sq ft of available space and the 99,000 sq ft of
developments due to achieve practical completion by January 2020,
we will make significant headway towards capturing the portfolio's
see-through ERV of GBP59.6m. The success we have had since 1 April
this year underpins our belief that the enduring quality and
location of our buildings will continue to attract tenants,
boosting our earnings and dividend cover.
"We remain a Company focused on the creation of capital profits
through the development and letting of the high quality office
space that today's occupiers are seeking. Our current portfolio
will continue to generate such profits as it reaches its fully let
and stabilised potential. Further growth is dependent on the Group
unearthing new opportunities and management's efforts are focused
on achieving this. With our experience and track record, we are
confident in our ability to add to our pipeline and to continue the
growth of Helical."
Operational Performance
-- Acquisition of a major development opportunity with the
purchase of 33 Charterhouse Street, London EC1, a c.200,000 sq ft
office development site next to Farringdon station, in a 50:50
joint venture with AshbyCapital.
-- Secured 133,218 sq ft of new London office lettings
delivering contracted rent of GBP9.8m (Helical's share GBP3.0m at
5.9% above 31 March 2019 ERV).
-- Post half year end, let a further 69,581 sq ft of London
office space delivering GBP5.6m of contracted rents (Helical's
share GBP2.1m at 3.2% above 31 March 2019 ERV).
-- In Manchester, five office lettings achieved on 39,642 sq ft,
generating rental income of GBP0.9m at 1.6% above 31 March 2019
ERV, with a further 1,944 sq ft let post period end in line with 31
March 2019 ERV.
-- Completed the sale of two units in the first phase of
residential at Barts Square, EC1 with a further unit completed
since the period end, leaving just seven units available for sale.
In the final phase, exchanged contracts for the sale of a further
seven units and exchanged on one further unit since the period end,
taking the total number of units exchanged to 45. These sales are
due to complete by February 2020.
-- Sale of Helical's 10% shareholding in One Creechurch Place to
our joint venture partner, completing our involvement in the
development.
-- We increased and extended our Revolving Credit Facility to
GBP400m, providing an additional GBP50m of firepower for
acquisitions.
Financial Highlights
Earnings
-- IFRS basic earnings per share of 11.7p (2018: 21.8p).
-- IFRS Profit before tax of GBP13.1m (2018: GBP29.1m).
-- Total Accounting Return(1) of 2.7% (2018: 5.1%).
-- See-through Total Property Return(1) of GBP28.6m (2018: GBP43.2m):
- Group's share(1) of net rental income of GBP13.0m (2018: GBP11.7m).
- Development profits of GBP5.7m (2018: losses of GBP2.1m),
after provisions of GBP1.2m (2018: GBP6.2m).
- Net gain on sale and revaluation of investment properties of GBP9.9m (2018: GBP33.6m).
-- EPRA earnings per share(1) of 5.4p (2018: loss of 4.6p).
-- Interim dividend declared of 2.70p per share (2018: 2.60p), up 3.8%.
Balance Sheet
-- Net asset value up 1.1% to GBP573.7m (31 March 2019: GBP567.4m).
-- EPRA net asset value per share(1) up 0.8% to 486p (31 March 2019: 482p).
-- EPRA triple net asset value per share(1) up 0.2% to 466p (31 March 2019: 465p).
Property Valuations
-- IFRS property portfolio value of GBP836.1m (31 March 2019: GBP793.6m).
-- See-through property portfolio(1) of GBP955.8m (31 March 2019: GBP876.4m).
-- See-through investment property valuation gain, on a
like-for-like basis, of 1.5% (1.4% including purchases and gains on
sales).
Financing
-- See-through loan to value(1) of 35.3% (31 March 2019: 30.6%).
-- See-through net borrowings(1) of GBP337.4m (31 March 2019: GBP268.6m).
-- Average maturity of the Group's share(1) of secured debt of
4.5 years (31 March 2019: 3.4 years), increasing to 5.6 years, on
exercise of options to extend current facilities.
-- See-through average cost of borrowings(1) of 3.5% (31 March 2019: 4.0%).
-- Group's share(1) of cash and undrawn bank facilities at 30
September 2019 of GBP261m (31 March 2019: GBP382m).
Portfolio Update
London Portfolio
-- 1.8% valuation increase, on a like-for-like basis, valued at
GBP773.9m at 30 September 2019 (85.9% of investment portfolio)
compared to GBP693.8m at 31 March 2019 (85.0% of investment
portfolio).
-- Contracted rents of GBP30.2m (31 March 2019: GBP27.5m)
growing to an ERV of GBP50.4m (31 March 2019: GBP42.4m).
-- WAULT of 7.4 years (31 March 2019: 8.0 years).
Manchester Portfolio
-- Valuation of investment portfolio remained unchanged, on a
like-for-like basis, at GBP127.0m at 30 September 2019 (14.1% of
investment portfolio) compared to GBP122.7m at 31 March 2019 (15%
of investment portfolio) after taking into account capital
expenditure.
-- Contracted rents increased to GBP6.1m (31 March 2019:
GBP5.7m) growing to an ERV of GBP9.1m (31 March 2019: GBP9.0m).
-- WAULT of 4.3 years (31 March 2019: 3.9 years).
Interim Dividend
An Interim Dividend of 2.70 pence per share (2018: 2.60 pence
per share) will be paid to Shareholders as follows:
Ex-dividend Date 28 November 2019
Record Date 29 November 2019
Payable Date 31 December 2019
For further information, please contact:
Helical plc 020 7629 0113
Gerald Kaye (Chief Executive)
Tim Murphy (Finance Director)
Address: 5 Hanover Square, London,
W1S 1HQ
Website: www.helical.co.uk
Twitter: @helicalplc
FTI Consulting 020 3727 1000
Dido Laurimore/Richard Gotla
schelical@fticonsulting.com
Half Year Results Presentation
Helical will be holding a presentation for analysts and
investors starting at 9am on Thursday 21 November 2019 at the
offices of FTI Consulting, 200 Aldersgate, Aldersgate Street,
London, EC1A 4HD. If you would like to attend, please contact FTI
Consulting on 020 3727 1000, or email
schelical@fticonsulting.com
The presentation will be on the Company's website
www.helical.co.uk and a conference call facility will be available.
The dial-in details are as follows:
Participants, Local - London, United Kingdom: +44 (0)330 336 9411
Passcode: 8746796
Webcast Link:
https://webcasting.brrmedia.co.uk/broadcast/5d91c523cbe3ca44a572e3b2
1. See Glossary for definition of terms. The half year condensed
unaudited consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS).
In common with usual and best practice in our sector, alternative
performance measures have also been provided to supplement IFRS,
some of which are based on the recommendations of the European
Public Real Estate Association ("EPRA"), with others designed to
give more relevant information about the Group's share of assets
and liabilities, income and expenses in subsidiaries and joint
ventures.
Chief Executive's Statement
Overview
The results for the half year to 30 September 2019 reflect
continued progress on all fronts.
We are rapidly approaching the completion of the current
development programme, which started in March 2011 with the
acquisition, in joint venture, of land and buildings at Barts
Square, London EC1. On completion of the third and final phase of
Barts Square and Kaleidoscope, London EC1, both anticipated by
early 2020, we will have built or refurbished 2.3m sq ft of office
space and delivered 236 residential units in the last nine years.
Of this, we have retained 1.1m sq ft of these offices and added
200,000 sq ft at 33 Charterhouse Street, London EC1 to our
investment portfolio, valued at GBP901.0m and generating GBP36.4m
of contracted rent.
We have made good progress in the first half of the financial
year by attracting new tenants to 172,860 sq ft of space,
generating GBP3.9m (our share) of contracted rental income, and
since 30 September 2019 have let a further 71,525 sq ft, generating
an additional GBP2.1m of rental income for the Group. As we let the
remaining 121,000 sq ft of available space and the 99,000 sq ft of
developments due to achieve practical completion by January 2020,
we will make significant headway towards capturing the portfolio's
see-through ERV of GBP59.6m. The success we have had since 1 April
this year underpins our belief that the enduring quality and
location of our buildings will continue to attract tenants,
boosting our earnings and dividend cover.
Results for the Half Year
The profit before tax for the half year to 30 September 2019 was
GBP13.1m (2018: GBP29.1m) with a Total Property Return of GBP28.6m
(2018: GBP43.2m). The increase in net rents to GBP13.0m (2018:
GBP11.7m) reflects the impact of our letting success over the
period. Developments contributed profits of GBP6.9m (2018: GBP4.1m)
before provisions of GBP1.2m (2018: GBP6.2m). The gain on sale and
revaluation of the investment portfolio contributed GBP9.9m (2018:
GBP33.6m).
Total see-through finance costs were GBP8.9m (2018: GBP8.4m),
offset by interest receivable of GBP1.3m (2018: GBP1.0m) to give
net finance costs of GBP7.6m (2018: GBP7.4m). A reduction in
expected future interest rates led to a charge from the valuation
of the Group's derivative financial instruments of GBP5.0m (2018:
credit of GBP0.3m). Recurring administration costs were GBP5.3m
(2018: GBP5.6m) with GBP0.3m (2018: GBP0.2m) in our joint ventures.
The provision for performance related remuneration, including
associated NIC, was GBP1.7m (2018: GBP2.3m).
A corporation tax charge of GBP1.2m (2018: GBP11.2m) has been
recognised in the Half Year Results. With a reduction in the
Group's deferred tax provision of GBP2.1m, a net tax credit of
GBP0.9m (2018: charge GBP3.2m) has been recognised.
The profit for the period, after recognition of this tax credit,
was GBP14.0m (2018: GBP25.9m) and this result allows the Board to
declare an Interim Dividend of 2.70p (2018: 2.60p), an increase of
3.8%.
Finance
The see-through loan to value ratio ("LTV") increased to 35.3%
at the half year end (31 March 2019: 30.6%) reflecting the
acquisition, in joint venture, of our new scheme at 33 Charterhouse
Street, London EC1 and capital expenditure on our portfolio,
particularly at Kaleidoscope, London EC1. Our see-through net
gearing, the ratio of net borrowings to the net asset value of the
Group, increased from 47.3% as at 31 March 2019 to 58.8%.
During the period under review, the average debt maturity on
secured loans, on a see-through basis, increased to 4.5 years (31
March 2019: 3.4 years) as we increased and extended our Revolving
Credit Facility from GBP150m to GBP400m, repaying the GBP200m
development facility on The Bower. The weighted average cost of
debt fell from 4.0%, at 31 March 2019, to 3.5% at the period end.
Our GBP100m Convertible Bond was repaid in June 2019. The Group has
GBP261m of cash and unutilised bank facilities available to fund
capital works on the portfolio and future acquisitions.
Board Matters
At the 2019 AGM held in July, we said goodbye to Mike Slade, the
founder and former Chief Executive of Helical, who stepped down
from the Board after 35 years to be replaced as Chairman by Richard
Grant. The whole Board congratulates Mike on his remarkable career
and wishes him every success with his continued endeavours for
charity as well as a happy and relaxing retirement.
During the period we appointed Sue Farr as an independent
Non-Executive Director of the Board and a member of the Audit and
Risk, Nominations and Remuneration Committees. Sue brings
considerable expertise in marketing, branding and consumer issues
to the team and I welcome her to the Company.
Sustainability
We have long recognised that our business impacts on the
environment and the wider communities in which we operate and we
seek to create sustainable buildings through our development and
refurbishment activities. During the period we formalised many of
our ESG policies, establishing a Sustainability Committee headed by
our Property Director, Matthew Bonning-Snook, and incorporating
representatives from each of our internal departments. In addition
to seeking individual ratings for our portfolio under BREEAM, where
we have achieved "Excellent" for all of the redeveloped properties
within our London portfolio, we also look to measure and improve
our corporate ESG ratings under the assessments made by EPRA, MSCI
and the Carbon Disclosure Project ("CDP"). During the period, we
added GRESB to the list of measures and benchmarks against which we
assess our sustainability achievements.
Outlook
We operate in a climate of political uncertainty and we hope
that the forthcoming General Election will provide clarity in a
manner which is positive for the UK economy.
We remain a Company focused on the creation of capital profits
through the development and letting of the high quality office
space that today's occupiers are seeking. Our current portfolio
will continue to generate such profits as it reaches its fully let
and stabilised potential. Further growth is dependent on the Group
unearthing new opportunities and management's efforts are focused
on achieving this. With our experience and track record, we are
confident in our ability to add to our pipeline and to continue the
growth of Helical.
Gerald Kaye
Chief Executive
21 November 2019
Our Market
Overview
Helical's core business is developing and owning dynamic, well
located office space in London and Manchester. With intelligent
stock selection, we aim to maximise returns by development and
refurbishment as well as through significant asset management
initiatives.
London
In our judgement, the London commercial property market
continues to provide the best source of capital profits in the UK.
As evidenced by the continued strong tenant demand for Grade A
office space, we expect this to remain the case for the foreseeable
future, assuming a government supportive of business.
In order for Helical to generate capital profits, the Group
needs to identify those areas where it believes tenant demand is,
or will become, strong and to source opportunities in those areas
at an appropriate entry price. Equally important, we need to
provide inspiring working environments suited to the needs of our
customers, the tenants. Using the skills, knowledge and expertise
gained over many years, the Helical team aims to deliver attractive
and exciting office space in our identified locations. In a low
growth environment, stock selection needs to reflect the granular
characteristics that will attract our target market of
occupiers.
Helical has based its investment decisions in London on four
continuing major developments in the office market. First, the
growth of the London population; second, the continuing and rapid
expansion of the creative industries (predominantly in technology
and media); third, the migration of occupiers across Central London
to the City and East London; and fourth, a fast-growing market in
flexible leasing.
London's population is forecast to grow to 9.5m by 2026, a 9%
increase since mid-2016. This will present challenges, particularly
in terms of infrastructure, but will also provide opportunities,
such as the demand for new and refurbished offices. Whilst the
Elizabeth Line has again been delayed, its eventual opening will be
a boost to travelling in London.
The UK is a global leader in the creative industries, an area we
have targeted with our portfolio. Companies involved in media,
advertising and marketing, technology and other creative industries
now comprise 52% of our tenant base.
The third factor influencing our choice of location for our
portfolio is the migration of occupiers from West to East across
Central London to the City and East London. The desire to be part
of creative hubs, surrounded by like-minded individuals, located a
short travelling distance from home are common themes in discussing
requirements with tenants. Most obviously, those hubs are in the
Tech Belt from King's Cross to Whitechapel.
Finally, the growth of flexible leasing is having a continuing
effect on the commercial office letting market in London and has
spread to regional cities. At Helical we seek early and continued
engagement with customers and look to develop long-standing
relationships with them. By offering flexible leases on our
multi-let assets, which allow them to occupy space commensurate
with their requirements, we target long-term retention of our
customers. We continue to evolve our tenant offering to reflect
trends in demand, specifically with the recent introduction of
fitted "plug and play" solutions on some of the buildings where we
have smaller floor plates.
In London, Helical has been building up a portfolio of
multi-tenanted office buildings in the Tech Belt locations of
Farringdon, the Old Street roundabout and Whitechapel. We also own
two assets in Chiswick, West London. By owning these "clusters" or
"villages" of office buildings, the Company now has a portfolio of
assets with multiple lease events leading to ongoing asset
management opportunities with the potential to lock in future
rental growth.
The Company is also seeking to expand its portfolio by taking on
additional schemes in Central London either on its own balance
sheet, or in the case of larger projects, by co-investment or by
forward selling/funding them, to create the opportunity for
significant profit shares but with reduced balance sheet
exposure.
Manchester
Manchester continues to present attractive opportunities for us
outside London and its city centre has seen the highest take-up
figures on record for the first half of 2019. With 824,021 sq ft
let across 124 transactions, it is well on track to exceed the five
year rolling average of 1.2m sq ft. Meanwhile, Grade A office
supply continues to fall and is currently at its lowest reported
level.
Prime rents have risen to GBP36.50 psf and, with a lack of Grade
A supply, it is likely rental growth will continue and it is
expected to reach GBP40.00 psf by the end of 2020. Whilst
investment volumes are significantly down in 2019, prime yields
have remained steady.
Over the past decade Manchester's population has seen the
greatest percentage growth outside London. Urbanisation continues,
with city centre living having risen by 185% over the past 15
years. This increase has helped drive significant employment growth
and this is expected to continue, predicted to increase by 11.8%
over the next five years.
Manchester is well known for having the highest graduate
retention rate outside London. The city's young and highly skilled
workforce has seen it attract tech businesses which now occupy 35%
of commercial property within the city.
As with London, we believe in clustering assets together. Our
four offices are all within a ten minute walk of one another,
enabling us to offer tenants a choice in design, size and rental
tone and aiding in the long term retention of our tenants.
Looking Forward
Our ambition is to have a balanced portfolio that generates
sufficient net rental income to firstly, exceed all of our
recurring costs and second, provide a surplus significantly greater
than our annual dividend to Shareholders. We have a see-through ERV
on the portfolio of GBP59.6m and expect to generate this surplus
once all of our current development and asset management activities
are complete. We are also seeking a pipeline of opportunities to
grow the balance sheet through the creation of development profits
and capital surpluses.
Financial Review
IFRS Performance EPRA Performance
IFRS Profit Before Tax EPRA Earnings
GBP13.1m (2018: GBP29.1m) GBP6.5m (2018: loss of GBP5.5m)
IFRS EPS EPRA EPS
11.7p (2018: 21.8p) 5.4p (2018: loss of 4.6p)
IFRS Diluted NAV Per Share EPRA NAV Per Share
472p (31 March 2019: 469p) 486p (31 March 2019: 482p)
---------------------------------
Overview
The half year has seen continued letting success, particularly
at The Tower, London EC1 and One Bartholomew, London EC1. Combined
with the development progress made at Kaleidoscope, London EC1 and
the recognition of the final profit on exit from One Creechurch
Place, London EC3, the resultant valuation gains and development
profits recognised have driven the Group's net asset growth.
With the repayment of the GBP100m Convertible Bond in June 2019
and the completion of the expanded GBP400m Revolving Credit
Facility, the Group has reduced its average cost of debt whilst
extending the maturity of its borrowings.
Results for the Half Year
The see-through results for the half year to 30 September 2019
include net rental income of GBP13.0m, a net gain on sale and
revaluation of the investment portfolio of GBP9.9m and development
profits of GBP5.7m, leading to a Total Property Return of GBP28.6m
(2018: GBP43.2m). Total administration costs of GBP7.4m (2018:
GBP8.0m) and net finance costs of GBP7.6m (2018: GBP7.4m)
contributed to a pre-tax profit of GBP13.1m (2018: GBP29.1m). EPRA
net asset value per share increased by 0.8% to 486p (31 March 2019:
482p).
The interim dividend, payable on 31 December 2019, will be 2.70p
per share, a 3.8% increase on the previous interim period.
The Group's real estate portfolio, including its share of assets
held in joint ventures, increased to GBP955.8m (31 March 2019:
GBP876.4m) as a result of the acquisition, in joint venture, of 33
Charterhouse Street, London EC1, capital expenditure and net
revaluation gains on the investment portfolio.
The expenditure on the investment portfolio during the period
increased the Group's see-through loan to value to 35.3% (31 March
2019: 30.6%). Repayment of the Convertible Bond and refinancing The
Bower into an expanded GBP400m Revolving Credit Facility reduced
the Group's weighted average cost of debt to 3.5% (31 March 2019:
4.0%) and increased the weighted average debt maturity to 4.5 years
(31 March 2019: 2.7 years). The average maturity of the facilities
would increase to 5.8 years on exercise of the two one-year
extension options on the Revolving Credit Facility and on a fully
utilised basis.
At 30 September 2019, the Group had unutilised bank facilities
of GBP210m and GBP51m of cash on a see-through basis. The bank
facilities are primarily available to fund the development of
Kaleidoscope, London EC1, the construction of the last phase of
residential at Barts Square, London EC1 and future property
acquisitions.
Total Accounting Return
The Total Accounting Return is the growth in the net asset value
of the company plus dividends paid in the period, expressed as a
percentage of the net asset value at the beginning of the period.
The metric measures the growth in Shareholders' Funds each period
and is expressed as an absolute measure.
Half Year Year Year Year Year Year
to to to to to to
2020 2019 2018 2017 2016 2015
% % % % % %
------------------------ --------- ----- ----- ----- ----- -----
Total Accounting Return 2.7 8.4 5.3 8.3 22.5 21.1
------------------------ --------- ----- ----- ----- ----- -----
Total Property Return
We calculate our Total Property Return to enable us to assess
the aggregate of income and capital profits made each year from our
property activities. Our business is primarily aimed at producing
surpluses in the value of our assets through asset management and
development, with the income side of the business seeking to cover
our annual administration and finance costs.
Half Year Year Year Year Year Year
to to to to to to
2020 2019 2018 2017 2016 2015
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- --------- ----- ----- ----- ----- -----
Total Property Return 28.6 81.4 68.8 79.9 164.6 155.3
---------------------- --------- ----- ----- ----- ----- -----
Earnings Per Share
The IFRS earnings per share decreased from 21.8p to 11.7p and
are based on the after tax earnings attributable to ordinary
Shareholders divided by the weighted average number of shares in
issue during the period.
On an EPRA basis, the loss per share of 4.6p in 2018 improved to
a positive earnings per share of 5.4p, reflecting the Group's share
of net rental income of GBP13.0m (2018: GBP11.7m) and development
profits of GBP5.7m (2018: losses of GBP2.1m), but excluding gains
on sale and revaluation of Investment properties of GBP9.9m (2018:
GBP33.6m).
Net Asset Value
IFRS diluted net asset value per share increased from 469p to
472p and is a measure of shareholders' funds divided by the number
of shares in issue at the period end, adjusted to allow for the
effect of all dilutive share awards.
EPRA net asset value per share increased by 0.8% to 486p per
share (31 March 2019: 482p). This movement arose principally from a
total comprehensive income (retained profits) of GBP14.1m (2018:
GBP25.9m), less GBP9.0m of dividends (2018: GBP8.3m).
EPRA triple net asset value per share marginally increased to
466p (31 March 2019: 465p).
Income Statement
Rental Income and Property Overheads
Gross rental income receivable by the Group in respect of wholly
owned properties increased to GBP14.5m (2018: GBP13.5m), reflecting
letting success and partial capture of the investment portfolio's
reversionary potential, offset by sales of assets during the prior
periods. In the joint ventures, gross rents remained steady at
GBP0.4m (2018: GBP0.4m). Property overheads in respect of wholly
owned assets and in respect of those assets in joint ventures fell
by 20.8% to GBP1.9m (2018: GBP2.4m). After taking account of net
rents receivable from our profit share partners of GBPnil (2018:
GBP0.1m), see-through net rents increased to GBP13.0m (2018:
GBP11.7m).
Development Profits
In the period under review, from our role as development manager
at One Creechurch Place, London EC3, we recognised GBP0.8m of
profit. A further profit of GBP0.9m was recognised for carrying out
a similar role at Barts Square, London EC1.
Project expenditure of GBP0.4m on potential new opportunities
and to satisfy cost indemnities given on the sale of our Retirement
Villages in 2017, and provisions of GBP0.1m against our legacy
retail development programme, combined with other net income of
GBP0.2m, contributed to a net development profit of GBP1.4m (2018:
GBP1.7m).
Share of Results of Joint Ventures
The revaluation of our investment assets held in joint ventures
generated a surplus of GBP0.5m (2018: GBP1.1m). Under our
development management agreement for One Bartholomew, London EC1,
we recognised a net development fee of GBP5.4m as a result of
letting progress, but a reassessment of the expected sales proceeds
from the remaining units in the first phase of residential at Barts
Square resulted in a provision of GBP1.1m. The sale of the Group's
10% investment in One Creechurch Place, London EC3 resulted in a
profit of GBP1.3m.
Finance, administration, taxation and other sundry items added a
further GBP0.7m of costs. An adjustment to reflect our economic
interest in the Barts Square, London EC1 development and to ensure
our investment in One Creechurch Place, London EC3 is shown at its
recoverable amount, generated surpluses of GBP2.6m, leaving a net
profit from our joint ventures of GBP8.0m (2018: loss of
GBP3.9m).
Gain on Sale and Revaluation of Investment Properties
The valuation of our investment portfolio, on a see-through
basis, continued to reflect the benefit of our refurbishment
activities in London where we generated a valuation surplus of 1.7%
(including purchases and gains on sales) and 1.8% on a
like-for-like basis. In Manchester, the portfolio remained
unchanged on a like-for-like basis. In total, the see-through
investment portfolio showed a valuation surplus of 1.4% (including
purchases and gains on sales), or 1.5% on a like-for-like
basis.
The total impact on our results of the gain on sale and
revaluation of our investment portfolio, including in joint
ventures, was a net gain of GBP9.9m (2018: GBP33.6m).
Administrative Expenses
Administration costs in the Group, before performance-related
awards, reduced from GBP5.6m to GBP5.3m.
Performance related share awards and bonus payments, including
National Insurance costs, were GBP1.7m (2018: GBP2.3m). Of this
amount, GBP0.9m (2018: GBP0.9m), being the charge for share awards
under the Performance Share Plan, is expensed through the Income
Statement but added back to Shareholders' Funds through the
Statement of Changes in Equity.
2019 2018
GBP000 GBP000
---------------------------------------------------------------- ------- -------
Administrative expenses (excluding performance related rewards) 5,324 5,552
Performance related awards, including NIC 1,730 2,309
Group 7,054 7,861
In joint ventures 335 161
---------------------------------------------------------------- ------- -------
Total 7,389 8,022
---------------------------------------------------------------- ------- -------
Finance Costs, Finance Income and Derivative Financial
Instruments
Interest payable on secured bank loans, including our share of
loans on assets held in joint ventures, but before capitalised
interest, reduced to GBP6.1m (2018: GBP6.3m). Interest payable in
respect of the unsecured bonds was GBP0.9m (2018: GBP2.0m). Bank
charges, commitment fees, sundry interest and the amortisation of
refinancing costs increased to GBP3.0m (2018: GBP2.4m) due to the
early repayment of The Bower facility upon the transfer of the
property into the expanded Revolving Credit Facility. Capitalised
interest reduced from GBP2.3m to GBP1.1m as development schemes
progressed and as a result of the completion of The Tower, London
EC1 in August 2018. Total finance costs, including in joint
ventures, increased to GBP8.9m (2018: GBP8.4m).
Finance income earned, including in joint ventures, was GBP1.4m
(2018: GBP1.1m). The movement in medium and long-term interest rate
projections during the period contributed to a charge of GBP5.0m
(2018: credit of GBP0.3m) on their mark-to-market valuation. The
repayment of the GBP100m Convertible Bond resulted in a credit of
GBP0.5m (2018: GBP1.0m) on the reversal of the 31 March 2019
mark-to-market valuation.
Taxation
Helical pays corporation tax on its UK sourced net rental
income, trading and development profits and realised chargeable
gains, after offsetting administration and finance costs.
The decrease in current tax charge for the period to GBP1.2m
from GBP11.2m is primarily a result of the tax charge on the
capital gain on the sale of The Shepherds Building, London W14 in
the prior period.
Dividends
Helical follows a progressive dividend policy of increasing its
dividends whilst retaining the majority of funds generated for
investment to grow the business. As the Group completes and lets
its current development programme, it expects to be able to reflect
the growth in earnings in increased dividends paid to Shareholders.
The Company has proposed an interim dividend of 2.70p, an increase
of 3.8% on the previous period (2018: 2.60p).
Balance Sheet
Shareholders' Funds
Shareholders' Funds at 1 April 2019 were GBP567.4m. The Group's
results for the period added GBP14.1m (2018: GBP25.9m), net of tax,
representing the total comprehensive income for the period.
Movements in reserves arising from the Group's share schemes
increased funds by GBP1.2m. The Company paid dividends to
Shareholders amounting to GBP9.0m leaving a net increase in
Shareholders' Funds from Group activities during the period of
GBP6.3m to GBP573.7m.
Investment Portfolio
Head
Wholly In joint leases Lease Book
owned venture See-through capitalised incentives value
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------- ----------------- ------- -------- ----------- ------------ ----------- -------
Valuation at 31 March 2019 791,250 25,382 816,632 2,189 (14,781) 804,040
Acquisitions - wholly owned - - - - - -
- joint ventures - 37,114 37,114 - - 37,114
Capital expenditure - wholly owned 31,965 - 31,965 (21) - 31,944
- joint ventures - 2,698 2,698 - - 2,698
Revaluation
surplus - wholly owned 11,885 - 11,885 - (2,443) 9,442
- joint ventures - 676 676 - (204) 472
Valuation at 30 September
2019 835,100 65,870 900,970 2,168 (17,428) 885,710
--------------------------------------- ------- -------- ----------- ------------ ----------- -------
In the period to 30 September 2019, the Group acquired 33
Charterhouse Street, London EC1 in joint venture for GBP37.1m (our
share). The Group spent GBP34.7m on capital works on the investment
portfolio, mainly at Kaleidoscope, London EC1 (GBP20.6m), The
Tower, London EC1 (GBP6.6m), Barts Square, London EC1 (GBP1.7m),
The Tootal Buildings (formally called Churchgate and Lee),
Manchester (GBP3.2m) and Fourways House, Manchester (GBP0.9m).
Revaluation gains added GBP12.6m to increase the see-through value
of the portfolio, before lease incentives, to GBP901.0m (31 March
2019: GBP816.6m). The accounting for head leases and lease
incentives resulted in a book value of the see-through investment
portfolio of GBP885.7m (31 March 2019: GBP804.0m).
Debt and Financial Risk
In total, Helical's outstanding debt at 30 September 2019 of
GBP395.2m (31 March 2019: GBP479.2m) had a weighted interest cost
of 3.5% (31 March 2019: 4.0%) and a weighted average debt maturity
of 4.5 years (31 March 2019: 2.7 years). The average maturity of
the facilities would increase to 5.8 years following exercise of
the two one-year extensions of the Group's GBP400m Revolving Credit
Facility on a fully utilised basis.
Debt Profile at 30 September 2019 - Including Commitment Fees
but Excluding the Amortisation of Arrangement Fees
Total Total Weighted average Average
facility utilised Available facility interest rate maturity Extended* average
GBP000 GBP000 GBP000 % Years maturity Years
----------------------- --------- --------- ------------------ ---------------- --------- ----------------------
Investment facilities 493,000 314,000 179,000 3.2 4.9 6.5
Development facilities 50,400 32,770 17,630 4.9 3.9 3.9
----------------------- --------- --------- ------------------ ---------------- --------- ----------------------
Total wholly owned 543,400 346,770 196,630 3.4 4.8 6.2
In joint ventures 51,684 48,446 3,238 3.9 2.3 2.3
----------------------- --------- --------- ------------------ ---------------- --------- ----------------------
Total secured debt 595,084 395,216 199,868 3.5 4.5 5.9
Working capital 10,000 - 10,000 - - 1.0
Total unsecured debt 10,000 - 10,000 - - 1.0
----------------------- --------- --------- ------------------ ---------------- --------- ----------------------
Total debt 605,084 395,216 209,868 3.5 4.5 5.8
----------------------- --------- --------- ------------------ ---------------- --------- ----------------------
* Calculated on a fully utilised basis with the two one-year
extensions of the Revolving Credit Facility included.
Secured Debt
The Group arranges its secured investment and development
facilities to suit its business needs as follows:
- Investment Facilities
We have a GBP400m Revolving Credit Facility that enables the
Group to acquire, refurbish, reposition and hold significant parts
of our investment portfolio with the remaining London investment
assets held in a GBP93m term loan secured facility. The value of
the Group's properties secured in these facilities at 30 September
2019 was GBP717m (31 March 2019: GBP698m) with a corresponding loan
to value of 43.8% (31 March 2019: 44.4%). The average maturity of
the Group's investment facilities at 30 September 2019 was 4.9
years (31 March 2019: 3.5 years), increasing to 6.5 years on a
fully utilised basis and following the two one-year extensions of
the Revolving Credit Facility. The weighted average interest rate
was 3.2% (31 March 2019: 3.9%). The marginal cost of fully
utilising the undrawn Revolving Credit Facility was 2.2% (31 March
2019: 2.1%).
- Development Facilities
This facility finances the over-station development at
Kaleidoscope, London EC1. The maturity of the Group's development
facility at 30 September 2019 was 3.9 years (31 March 2019: 4.4
years) with a weighted average interest rate of 4.9% (31 March
2019: 6.3%). Excluding the impact of commitment fees, the weighted
average interest rate of this facility is 4.2% (31 March 2019:
4.2%).
- Joint Venture Facilities
We hold a number of investment and development properties in
joint venture with third parties and include in our reported
figures our share, in proportion to our economic interest, of the
debt associated with each asset. The average maturity of the
Group's share of bank facilities in joint ventures at 30 September
2019 was 2.3 years (31 March 2019: 2.8 years) with a weighted
average interest rate of 3.9% (31 March 2019: 4.0%).
Unsecured Debt
The Group's unsecured debt, following the repayment of the
GBP100m Convertible Bond in June 2019, is GBPnil (31 March 2019:
GBP100.5m), as follows:
- Short-term Working Capital Facilities
These undrawn facilities provide access to additional working
capital for the Group.
Cash and Cash Flow
At 30 September 2019, the Group had GBP261m (31 March 2019:
GBP382m) of cash and agreed, undrawn, committed bank facilities
including its share in joint ventures, as well as GBP62m (31 March
2019: GBP25m) of uncharged property on which it could borrow
funds.
Net Borrowings and Gearing
Total gross borrowings of the Group, including in joint
ventures, have decreased from GBP479.2m to GBP395.2m during the six
month period to 30 September 2019. After deducting cash balances of
GBP51.3m (31 March 2019: GBP205.2m) and unamortised refinancing
costs of GBP6.6m (31 March 2019: GBP5.4m), net borrowings increased
from GBP268.6m to GBP337.4m. The see-through gearing of the Group,
including in joint ventures, increased from 47.3% to 58.8%.
30 September 31 March
2019 2019
------------------------------------------- ------------ ---------
See-through gross borrowings GBP395.2m GBP479.2m
See-through cash balances GBP51.3m GBP205.2m
Unamortised refinancing costs GBP6.6m GBP5.4m
See-through net borrowings GBP337.4m GBP268.6m
Shareholders' Funds GBP573.7m GBP567.4m
See-through gearing - IFRS net asset value 58.8% 47.3%
------------------------------------------- ------------ ---------
Hedging
At 30 September 2019, the Group had GBP243.0m (31 March 2019:
GBP363.0m) of fixed rate debt with an average effective interest
rate of 3.0% (31 March 2019: 3.7%) and GBP103.8m (31 March 2019:
GBP67.2m) of floating rate debt with an average effective interest
rate of 4.4% (31 March 2019: 5.7%). In addition, the Group had
GBP200m of interest rate caps at an average of 1.75% (31 March
2019: GBP240m at 1.69%). In our joint ventures, the Group's share
of fixed rate debt was GBPnil (31 March 2019: GBPnil) and GBP48.4m
(31 March 2019: GBP49.0m) of floating rate debt with an effective
rate of 3.9% (31 March 2019: 4.0%), with interest rate caps set at
1.5% plus margin on GBP32.9m (31 March 2019: GBP11.0m at 0.5%).
30 September 31 March
2019 Effective interest rate 2019 Effective interest rate
GBPm % GBPm %
--------------------------------- ------------ ----------------------- -------- -----------------------
Fixed rate debt
- Secured borrowings 243.0 3.0 262.5 3.6
- Convertible Bond - - 100.0 4.0
- Fair value of Convertible Bond - - 0.5 -
--------------------------------- ------------ ----------------------- -------- -----------------------
Total 243.0 3.0 363.0 3.7
Floating rate debt
- Secured 103.8 4.4(1) 67.2 5.7(1)
--------------------------------- ------------ ----------------------- -------- -----------------------
Total 346.8 3.4 430.2 4.0
In joint ventures
- Floating rate 48.4 3.9 49.0 4.0
--------------------------------- ------------ ----------------------- -------- -----------------------
Total borrowings 395.2 3.5 479.2 4.0
--------------------------------- ------------ ----------------------- -------- -----------------------
(1) This includes commitment fees on undrawn facilities.
Excluding these would reduce the effective rate to 3.1% (31 March
2019: 3.7%).
Tim Murphy
Finance Director
21 November 2019
Helical's Property Portfolio - 30 September 2019
Property Overview
Helical divides its property activities into two core markets:
London and Manchester offices. London represents 87% and Manchester
13% of the total see-through property portfolio. Whilst there are
structural differences in these markets, Helical has found that its
business model can be applied successfully to each, driving capital
growth, development profits and rental income.
The London Portfolio
Our strategy is to continue to increase our London holdings,
focusing on areas where we see strong tenant demand and growth
potential, such as the "Tech Belt" that runs from King's Cross
through Old Street and Shoreditch to Whitechapel. Our London
portfolio comprises income-producing multi-let offices, office
refurbishments and developments and a mixed use
commercial/residential scheme.
33 Charterhouse Street, EC1
In May 2019 we acquired the rights to a long leasehold interest
in 33 Charterhouse Street, a major development site located in
Farringdon, in a 50:50 joint venture with AshbyCapital. The site is
situated on the corner of Charterhouse Street and Farringdon Road,
adjacent to Farringdon Station and immediately opposite the future
Museum of London site at Smithfield General Market.
Since acquisition, extensive work has been undertaken to refine
the existing planning consent such that the building is now
expected to provide for c.190,000 sq ft of offices across ten
floors and c.10,000 sq ft of ground floor retail. Work on site will
commence shortly and completion is anticipated in Spring 2022.
The Bower, EC1
The Bower is a landmark estate immediately adjacent to the Old
Street roundabout and features 312,575 sq ft of innovative, high
quality office space along with 21,280 sq ft of restaurant and
retail space.
The Warehouse and The Studio
The Warehouse comprises 122,858 sq ft of offices and The Studio
18,283 sq ft of offices with 10,298 sq ft of retail space at the
two buildings. The repositioning of The Warehouse entailed a
complete refurbishment of the building whilst retaining its
original 1960s characteristics. The Studio was a ground up
development on the former car park site. The buildings were fully
pre-let when they completed in November 2015.
The Tower
The Tower offers 171,434 sq ft of office space with a
contemporary façade and innovatively designed interconnecting
floors, along with 10,982 sq ft of restaurant space let to Albion
& East (trading as Serata Hall) and Wagamama.
In the period we have let the 14th floor on a fitted basis to
Snowflake Computing, the cloud-built data warehouse solutions
provider, and the 16th floor to Incubeta, a global digital
marketing performance group. Since the period end the 12th floor
has also been let, on a fitted basis, to an existing tenant,
Brilliant Basics, an Infosys company and the 13th floor to
OpenPayd, a banking and payments platform for businesses. Following
these lettings, The Tower is now 93% let with only the 15th floor
available.
Barts Square, EC1
In a joint venture with The Baupost Group LLC, Helical owns the
freehold interest of Barts Square, a 3.2 acre site between St
Paul's and Smithfield Market, situated a short walk from the
Farringdon East Elizabeth Line station.
Barts Square provides a new quarter in the City, consisting of
236 residential apartments, three office buildings of 214,434 sq
ft, 24,013 sq ft and 10,187 sq ft together with 21,122 sq ft of
retail/A3 at ground floor as well as major public realm
improvements.
Phase One
Residential/Retail
Phase One of Barts Square comprises 144 residential units, 3,101
sq ft of retail space and extensive public realm improvements. In
the period we completed the sales of two residential units taking
the total sales to 136 residential units, with a total value of
GBP173.9m at an average price of GBP1,555 psf. Following the
completion of one further sale after the period end, seven
apartments remain available. The landscaping of the new public
square has been completed with the restaurant space let to Stem +
Glory and Halfcup.
90 Bartholomew Close - Office/Restaurant
The 24,013 sq ft office building, with 6,414 sq ft of restaurant
space, completed in March 2018. In the period we let the fourth and
fifth floors to Sia Partners, taking the building to 61% let. Since
the end of the period, we have let all of the remaining floors with
the second floor let as expansion space to an existing Helical
tenant on a fitted basis, the third floor to Constantine Cannon and
the sixth floor to Eric Salmon.
Phase Two
One Bartholomew - Offices
One Bartholomew was sold to clients of AshbyCapital for
GBP102.4m in August 2015. The demolition of the existing building
and the construction of a new 12 storey Grade A office block of
214,434 sq ft commenced in January 2016 and completed in December
2018. AshbyCapital's clients financed the development costs and now
that the building is completed and successfully let, the joint
venture is entitled to receive a profit share payment.
During the period, we have let the ground, first and second
floors to The University of Chicago Booth School of Business, the
sixth floor to Sopra Steria and the seventh floor to InfraRed
Capital Partners, taking the building to 73% let. Since the period
end the third and fourth floors have been let to BDB Pitmans taking
the building to 91% let, with only the fifth floor available.
Phase Three
Residential/Retail
Construction works on Phase Three of Barts Square are nearing
completion with the first block having reached practical completion
in November 2019 and the remaining two due to complete in January
and February 2020. This phase comprises 92 apartments and 11,607 sq
ft of retail space. During the period, contracts were exchanged on
seven units, taking the total number of units exchanged to 44, at a
value of GBP69.7m and an average price of GBP1,793 psf. Following
exchange on one further unit since the period end, 46 units are
available for sale and one additional unit that will be released at
a later date.
55 Bartholomew
With completion of this refurbishment project due in December
2019 we have commenced marketing of the newly created 10,187 sq ft
of office space spread over five floors. The works comprised the
substantial refurbishment and extension of the original building
and the addition of a new fifth floor.
Kaleidoscope, EC1
The over-station development at the Farringdon East Elizabeth
Line station, which will comprise a six storey 86,183 sq ft office
building, with a 2,497 sq ft restaurant unit on the ground floor,
is due to complete in January 2020. The building sits immediately
east of Smithfield Market with views over Charterhouse Square and
towards St Paul's Cathedral. The building is being marketed with
good interest being expressed by potential tenants.
The Loom, E1
This 108,610 sq ft building is one of London's few remaining
former Victorian wool warehouses and was acquired in 2013. Works to
transform this asset completed in September 2016 and included a new
entrance and reception onto Gowers Walk, a café, showers and a bike
store. The Loom has won both a RIBA London and National Award as
well as an Architects Journal Retrofit Award.
Since 1 April 2019, we have let three units at a premium to 31
March 2019 ERVs taking the building to 97% let.
25 Charterhouse Square, EC1
In January 2016, Helical was granted a new 155 year leasehold
interest in 25 Charterhouse Square from the Governors of Sutton's
Hospital in Charterhouse for GBP16m. The building is a Grade A
office adjacent to the new Farringdon East station on the Elizabeth
Line and overlooks the historic Charterhouse Square. Helical
carried out a major refurbishment of the existing building, which
increased the previous 34,000 sq ft to 38,355 sq ft of offices with
the addition of a new sixth floor, and 5,138 sq ft of retail space.
The building achieved practical completion on 28 March 2017 and was
fully let to Anomaly, Peakon, Hudson Sandler and Senator
International by December 2017, less than two years after it was
acquired.
Power Road Studios, W4
The site comprises 57,164 sq ft of offices across four studio
buildings and is multi-let to a wide range of predominantly media
tenants. In October 2017 we completed the refurbishment of Studio
1, a project comprising c.16,000 sq ft of Grade A space,
refurbished common parts and added two new lift shafts to
accommodate a consented future roof extension of 13,000 sq ft. We
have also secured planning consent for a new 30,000 sq ft
building.
In the period we have completed five lettings representing
16,160 sq ft, at a 10.8% average premium to 31 March 2019 ERVs
taking the building to 88% let.
The Powerhouse, W4
Helical acquired this 24,288 sq ft office and recording studios
by way of sale and leaseback in 2013. The Powerhouse is a listed
building on Chiswick High Road and is fully let on a long lease to
Metropolis Music Group.
One Creechurch Place, EC3
The sale of our 10% shareholding in One Creechurch Place to our
joint venture partner, HOOPP, took place in September 2019,
completing our involvement in the development.
The Manchester Portfolio
Manchester is a city with a diverse, thriving and growing
economy that is widely regarded as England's second city and the
centre of the "Northern Powerhouse". Helical has found that the
approach it applies to development and asset management in London
is equally well received by the tenants in Manchester.
The Tootal Buildings, Manchester
The buildings, formally referred to as Churchgate and Lee,
comprise 243,666 sq ft of multi-let offices. The assets were 64%
let when acquired in March 2014. Since their purchase, we have
refurbished the Churchgate House reception and 94,493 sq ft of
office space, with a further 46,739 sq ft currently being
refurbished as expansion space for an existing tenant. In the
period we have completed the lettings of the recently refurbished
third floor in Churchgate House and the sixth and seventh floors in
Lee House to Capita Business Services. Following the completion of
these lettings the building is now fully let. We continue to
actively manage the buildings, with a recently completed full
refurbishment of the reception at Lee House.
35 Dale Street, Manchester
35 Dale Street is a 56,124 sq ft office building situated in the
Northern Quarter of Manchester, acquired in March 2015. The
building underwent a comprehensive refurbishment which completed in
June 2018. During the period Couchbase have taken occupation of the
newly reconfigured former loading bay for office use.
Trinity, Manchester
Trinity, purchased in May 2017 for GBP12.9m, underwent a full
redevelopment which completed in January 2019. The repositioned
building comprises 54,651 sq ft of office space and 4,300 sq ft of
retail/restaurant space, both of which are available to let.
Fourways House, Manchester
This 58,369 sq ft brick built Grade 2 listed former packing
warehouse was acquired in July 2018 for GBP16.5m, representing a
net initial yield of 5.3%. We have begun our management programme
and have let two units in the period at a 12.7% premium to 31 March
2019 ERVs and have let a further unit since the period end. We have
recently obtained planning permission to undertake a significant
refurbishment of the atrium and common parts and works will
commence shortly, with completion expected in July 2020.
Portfolio Analytics
See-through Valuation Movements
Investment
portfolio Investment portfolio
Val change Val change weighting weighting
inc purchases & gains on sales excl purchases & gains on sales 30 September 2019 31 March 2019
% % % %
------------ ------------------------------- -------------------------------- ------------------ --------------------
London
Offices
- Completed,
let and
available
to let 1.4 1.4 70.2 75.3
- Being
redeveloped 2.6 3.9 15.7 9.7
------------ ------------------------------- -------------------------------- ------------------ --------------------
Total London 1.7 1.8 85.9 85.0
Manchester
Offices
- Completed,
let and
available
to let 0.0 0.0 14.1 15.0
Total
Manchester 0.0 0.0 14.1 15.0
------------ ------------------------------- -------------------------------- ------------------ --------------------
Total 1.4 1.5 100.0 100.0
------------ ------------------------------- -------------------------------- ------------------ --------------------
See-through Total Portfolio by Fair Value
Investment Development Total
GBPm % GBPm % GBPm %
-------------------------- ---------- ----- ----------- ----- ----- -----
London Offices
- Completed, let
and available to let 632.7 70.2 - - 632.7 66.2
- Being redeveloped 141.2 15.7 - - 141.2 14.8
- Held for redevelopment - - 0.3 0.5 0.3 0.0
London Residential - - 53.2 97.1 53.2 5.6
-------------------------- ---------- ----- ----------- ----- ----- -----
Total London 773.9 85.9 53.5 97.6 827.4 86.6
Manchester Offices
- Completed, let
and available to let 127.0 14.1 - - 127.0 13.3
--------------------------
Total Manchester 127.0 14.1 - - 127.0 13.3
Total Core Portfolio 900.9 100.0 53.5 97.6 954.4 99.9
Other 0.1 0.0 - - 0.1 0.0
Regional Retail - - 0.7 1.3 0.7 0.1
Land - - 0.6 1.1 0.6 0.0
-------------------------- ---------- ----- ----------- ----- ----- -----
Total Non-Core Portfolio 0.1 0.0 1.3 2.4 1.4 0.1
Total 901.0 100.0 54.8 100.0 955.8 100.0
-------------------------- ---------- ----- ----------- ----- ----- -----
See-through Trading and Development Portfolio
Book value Fair value Surplus Fair value
GBPm GBPm GBPm %
------------------------- ---------- ---------- ------- ----------
London Offices 0.3 0.3 - 0.5
London Residential 53.2 53.2 - 97.1
------------------------- ---------- ---------- ------- ----------
Total Core Portfolio 53.5 53.5 - 97.6
Regional Retail 0.7 0.7 - 1.3
Land - 0.6 0.6 1.1
------------------------- ---------- ---------- ------- ----------
Total Non-Core Portfolio 0.7 1.3 0.6 2.4
Total 54.2 54.8 0.6 100.0
------------------------- ---------- ---------- ------- ----------
Capital Expenditure
We have a committed and planned development and refurbishment
programme.
Capex Total
budget Remaining spend Pre-redeveloped completed
(Helical share) (Helical share) space New space space Completion
Property GBPm GBPm sq ft sq ft sq ft date
--------------- ---------------------- --------------- --------------- --------- -------------- --------------
Investment -
committed
The Tower,
London EC1 109.8 5.7 114,000 68,416 182,416 Completed
Kaleidoscope,
London EC1(1) 59.0 16.3 - 88,680 88,680 January 2020
55 Bartholomew,
London EC1 2.4 0.4 9,000 1,187 10,187 December 2019
Investment -
planned
33 Charterhouse Street,
London EC1 62.8 62.0 - 200,000 200,000 H1 2022
Development -
committed
Barts Square, London EC1 -
Phase One 64.7 0.3 - 127,364 127,364 Completed
November 2019
to February
2020
Barts Square, London EC1 - in three
Phase Three 39.8 4.5 - 89,383 89,383 phases
----------------------------- -------- --------------- --------------- --------- -------------- --------------
1. Includes deferred consideration payment due in April
2020.
Asset Management
Asset management is a critical component in driving Helical's
performance. Through having well considered business plans and
maximising the combined skills of our management team, we are able
to create value in our assets.
Fair
value Passing ERV change
weighting rent Contracted rent ERV like-for-like
See-through Investment portfolio % GBPm % GBPm % GBPm % %
------------------------------------ ---------- ------- ----- --------------- ----- ----- ----- --------------
London Offices
- Completed, let and available to
let 70.2 22.6 82.7 30.2 83.2 35.1 58.9 0.7
- Being redeveloped 15.7 - - - - 15.3 25.7 0.1
Total London 85.9 22.6 82.7 30.2 83.2 50.4 84.6 0.6
Manchester Offices
- Completed, let and available to
let 14.1 4.7 17.2 6.1 16.7 9.1 15.3 1.4
Total Manchester 14.1 4.7 17.2 6.1 16.7 9.1 15.3 1.4
Other - 0.1 0.1 0.1 0.1 0.1 0.1 -
------------------------------------ ---------- ------- ----- --------------- ----- ----- ----- --------------
Total 100.0 27.4 100.0 36.4 100.0 59.6 100.0 0.7
------------------------------------ ---------- ------- ----- --------------- ----- ----- ----- --------------
During the period, total contracted income increased by GBP3.2m
as a result of new lettings and rent reviews.
See-through
total portfolio contracted rent
GBPm
-------------------------------------------------------------- --------------------------------
Rent lost at break/expiry (0.8)
Rent reviews and uplifts on lease renewals 0.1
New lettings
- London 3.0
- Manchester 0.9
-------------------------------------------------------------- --------------------------------
Total increase in the period from asset management activities 3.2
-------------------------------------------------------------- --------------------------------
Total contracted rental change from sales and purchases -
-------------------------------------------------------------- --------------------------------
Net increase in contracted rents in the period 3.2
-------------------------------------------------------------- --------------------------------
Investment Portfolio
Portfolio Yields
EPRA topped EPRA topped Reversionary Reversionary
up NIY up NIY yield yield True equivalent yield True equivalent yield
30 September 31 March 30 September 31 March 30 September 31 March
2019 2019 2019 2019 2019 2019
% % % % % %
--------------- --------------- ----------- ------------- ------------ --------------------- ---------------------
London Offices
- Completed, let and
available to let 4.5 4.2 5.2 5.2 5.1 5.1
- Being
redeveloped n/a n/a 5.3 5.7 4.9 4.9
--------------- --------------- ----------- ------------- ------------ --------------------- ---------------------
Total London 4.5 4.2 5.2 5.3 5.0 5.1
Manchester
Offices
- Completed, let and
available to let 4.6 4.2 6.3 6.3 6.1 6.1
Total
Manchester 4.6 4.2 6.3 6.3 6.1 6.1
Total 4.5 4.2 5.4 5.4 5.2 5.2
--------------- --------------- ----------- ------------- ------------ --------------------- ---------------------
See-through Capital Values, Vacancy Rates and Unexpired Lease
Terms
30 September 2019 30 September 2019 30 September 2019 31 March 2019
Capital value psf Vacancy rate WAULT WAULT
GBP % Years Years
-------------------------------------- ------------------ ----------------- ----------------- -------------
London Offices
- Completed, let and available to let 1,090 8.9 7.4 8.0
- Being redeveloped 610 n/a n/a n/a
-------------------------------------- ------------------ ----------------- ----------------- -------------
Total London 927 8.9 7.4 8.0
Manchester Offices
- Completed, let and available to let 304 17.7 4.3 3.9
Total Manchester 304 17.7 4.3 3.9
Total 731 12.5 6.9 7.3
-------------------------------------- ------------------ ----------------- ----------------- -------------
See-through Lease Expiries or Tenant Break Options
Period to Year to Year to Year to Year to
2020 2021 2022 2023 2024
----------------------------- --------- ------- ------- ------- -------
% of rent roll 3.1 6.0 11.5 10.4 12.8
Number of leases 17 20 31 19 24
Average rent per lease (GBP) 66,689 109,858 134,432 200,005 193,356
----------------------------- --------- ------- ------- ------- -------
Top 10 Tenants
We have a strong rental income stream and a diverse tenant base.
The top 10 tenants account for 47.6% of the total rent roll and the
tenants come from a variety of industries.
Contracted rent Rent roll
Rank Tenant Tenant Industry GBPm %
------ -------- ------------------ --------------- ---------
1 Farfetch Online retail 3.9 10.8
2 WeWork Flexible offices 3.8 10.5
3 Pivotal Technology 2.0 5.5
4 Infosys Technology 1.4 3.9
5 Anomaly Marketing 1.4 3.9
6 CBS Media 1.0 2.9
7 Allegis Recruitment 1.0 2.7
8 Finablr Financial services 0.9 2.6
9 Incubeta Marketing 0.9 2.5
10 Stripe Technology 0.8 2.3
------ -------- ------------------
Total 17.1 47.6
---------------- ------------------ --------------- ---------
Principal Lettings During the Period
Lease term
Area to expiry
Property Tenant sq ft years
--------------------------------- ---------------------------------------- ------- ----------
The Tower, London EC1 Incubeta 11,306 10
The Tower, London EC1 Snowflake Computing 9,568 5
The Tootal Buildings, Manchester Capita Business Services 35,118 11
Power Road Studios, London W4 So Energy 7,135 5
90 Bartholomew Close, London EC1 Sia Partners 7,564 10
Power Road Studios, London W4 HOPP 5,495 3
The Loom, London E1 UI Centric 3,048 5
The Loom, London E1 Qbic Hotels 1,407 3
The Loom, London E1 Oyster Information Management Solutions 1,706 10
Power Road Studios, London W4 Kobayashi Healthcare 1,971 5
--------------------------------- ---------------------------------------- ------- ----------
Letting Activity
Contracted Rent Rent % Above
Area (Helical's Share) per sq ft 31 March 2019 ERV
sq ft GBP GBP %
------------------------------------- ------- ------------------ ---------- ------------------
Investment Properties
London Offices
The Tower, The Bower, EC1 20,874 1,726,000 82.69 2.4(1)
The Loom, E1 6,161 359,000 58.22 10.4
Power Road Studios, W4 16,160 682,000 41.53 10.8
90 Bartholomew Close, EC1 7,564 245,000 74.05 0.9
------------------------------------- ------- ------------------ ---------- ------------------
Total London 50,759 3,012,000 59.34 5.9
Manchester Offices
The Tootal Buildings 35,118 755,000 21.50 0.1
Fourways House 4,524 120,000 26.51 12.7
------------------------------------- ------- ------------------ ---------- ------------------
Total Manchester 39,642 875,000 22.07 1.6
------------------------------------- ------- ------------------ ---------- ------------------
Total 90,401 3,887,000 43.00 4.7
------------------------------------- ------- ------------------ ---------- ------------------
Development Properties
London Offices
One Bartholomew, EC1 82,459 - 78.96 n/a
------------------------------------- ------- ------------------ ---------- ------------------
1. Excludes leases on a fitted basis.
Statement of Directors' Responsibilities
We confirm that to the best of our knowledge:
a) The condensed unaudited consolidated financial statements
have been prepared in accordance with IAS 34 'Interim Financial
Reporting';
b) The interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
and their impact during the first six months and description of
principal risks and uncertainties for the remaining six months of
the year); and
c) The interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
Balances with related parties at 30 September 2019, 30 September
2018 and 31 March 2019 are disclosed in Note 25.
A list of current Directors is maintained at 5 Hanover Square,
London, W1S 1HQ and at www.helical.co.uk.
The half year statement was approved by the Board on 21 November
2019 and is available from the Company's registered office at 5
Hanover Square, London, W1S 1HQ and on the Company's website at
www.helical.co.uk.
On behalf of the Board
Tim Murphy
Finance Director
21 November 2019
Independent Review Report to the Members of Helical plc
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2019 which comprises the Unaudited
Consolidated Income Statement, Unaudited Consolidated Statement of
Comprehensive Income, Unaudited Consolidated Balance Sheet,
Unaudited Consolidated Cash Flow Statement and Unaudited
Consolidated Statement of Changes in Equity, the cash flow
statement and related notes 1 to 29. We have read the other
information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" 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 it
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.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in Note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34 "Interim
Financial Reporting" as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, 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.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2019 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure Guidance and Transparency
Rules of the United Kingdom's Financial Conduct Authority.
Deloitte LLP
Statutory Auditor
London, United Kingdom
21 November 2019
Unaudited Consolidated Income Statement
For the Half Year to 30 September 2019
Year to
Half Year to Half Year to 31 March
30 September 2019 30 September 2018 2019
Notes GBP000 GBP000 GBP000
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Revenue 3 22,055 23,395 44,175
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Net rental income 4 12,811 11,747 24,599
Development property profit/(loss) 5 1,441 1,686 (1,781)
Share of results of joint ventures 13 7,982 (3,874) (3,217)
Other operating income 44 4 -
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Gross profit before net gain on sale and revaluation of
Investment properties 22,278 9,563 19,601
(Loss)/gain on sale of Investment properties 6 (28) 1,102 15,008
Revaluation of Investment properties 12 9,442 31,435 44,284
Change in fair value of available-for-sale investments 16 - 144 144
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Gross profit 31,692 42,244 79,037
Administrative expenses 7 (7,054) (7,861) (16,753)
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Operating profit 24,638 34,383 62,284
Finance costs 8 (8,315) (7,616) (17,407)
Finance income 1,311 1,033 983
Change in fair value of derivative financial instruments 22 (4,980) 325 (3,322)
Change in fair value of Convertible Bond 468 958 865
Foreign exchange gain 9 65 53
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Profit before tax 13,131 29,148 43,456
Tax on profit on ordinary activities 9 898 (3,224) (836)
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Profit for the period 14,029 25,924 42,620
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Earnings per share 11
Basic 11.7p 21.8p 35.8p
Diluted 11.6p 21.6p 35.3p
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Unaudited Consolidated Statement of Comprehensive Income
For the Half Year to 30 September 2019
Year to
Half Year to Half Year to 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
------------------------------------------------------------------- ------------------ ------------------ ---------
Profit for the period 14,029 25,924 42,620
Exchange difference on retranslation of net investments in foreign
operations 55 (47) (51)
------------------------------------------------------------------- ------------------ ------------------ ---------
Total comprehensive income for the period 14,084 25,877 42,569
------------------------------------------------------------------- ------------------ ------------------ ---------
The exchange differences on retranslation of net investments in
foreign operations will be reclassified to the Income Statement on
disposal.
Unaudited Consolidated Balance Sheet
At 30 September 2019
At
At At 31 March
30 September 2019 30 September 2018 2019
Notes GBP000 GBP000 GBP000
--------------------------------------------- ----- ------------------ ------------------ ---------
Non-current assets
Investment properties 12 820,138 744,850 778,752
Owner occupied property, plant and equipment 6,394 1,783 1,747
Investment in joint ventures 13 78,073 31,519 24,676
Derivative financial instruments 22 319 1,703 915
--------------------------------------------- ----- ------------------ ------------------ ---------
904,924 779,855 806,090
--------------------------------------------- ----- ------------------ ------------------ ---------
Current assets
Land, developments and trading properties 14 1,035 4,048 2,311
Investment property held for sale 15 - 125,200 -
Trade and other receivables 17 36,539 98,700 58,726
Cash and cash equivalents 18 47,726 63,093 197,570
--------------------------------------------- ----- ------------------ ------------------ ---------
85,300 291,041 258,607
--------------------------------------------- ----- ------------------ ------------------ ---------
Total assets 990,224 1,070,896 1,064,697
--------------------------------------------- ----- ------------------ ------------------ ---------
Current liabilities
Trade and other payables 19 (52,539) (55,652) (43,159)
Lease liability 20 (599) - -
Corporation tax payable (280) (6,874) (2,561)
Borrowings 21 - (100,375) (100,468)
--------------------------------------------- ----- ------------------ ------------------ ---------
(53,418) (162,901) (146,188)
--------------------------------------------- ----- ------------------ ------------------ ---------
Non-current liabilities
Borrowings 21 (340,603) (332,290) (324,814)
Derivative financial instruments 22 (8,017) (1,529) (4,158)
Lease liability 20 (7,872) (2,189) (2,189)
Trade and other payables 19 (590) (10,815) (11,405)
Deferred tax liability 9 (6,066) (8,576) (8,518)
--------------------------------------------- ----- ------------------ ------------------ ---------
(363,148) (355,399) (351,084)
--------------------------------------------- ----- ------------------ ------------------ ---------
Total liabilities (416,566) (518,300) (497,272)
--------------------------------------------- ----- ------------------ ------------------ ---------
Net assets 573,658 552,596 567,425
--------------------------------------------- ----- ------------------ ------------------ ---------
Equity
Called-up share capital 23 1,465 1,459 1,459
Share premium account 103,462 101,304 101,304
Revaluation reserve 140,492 194,852 131,050
Capital redemption reserve 7,478 7,478 7,478
Other reserves 291 291 291
Retained earnings 320,470 247,212 325,843
--------------------------------------------- ----- ------------------ ------------------ ---------
Total equity 573,658 552,596 567,425
--------------------------------------------- ----- ------------------ ------------------ ---------
Unaudited Consolidated Cash Flow Statement
For the Half Year to 30 September 2019
Year to
Half Year to Half Year to 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
--------------------------------------------------------------- ------------------ ------------------ ---------
Cash flows from operating activities
Profit before tax 13,131 29,148 43,456
Adjustment for:
Depreciation 409 151 296
Revaluation surplus on Investment properties (9,442) (31,435) (44,284)
Loss/(gain) on sale of Investment properties 28 (1,102) (15,008)
Profit on sale of plant and equipment (11) (35) (52)
Net financing costs 7,004 6,583 16,424
Change in value of derivative financial instruments 4,980 (325) 3,322
Change in fair value of Convertible Bond (468) (958) (865)
Share based payment charge 920 898 2,274
Share of results of joint ventures (7,982) 3,874 3,217
Change in fair value of available-for-sale investment - (144) (144)
Foreign exchange movement 55 (47) (52)
--------------------------------------------------------------- ------------------ ------------------ ---------
Cash inflows from operations before changes in working capital 8,624 6,608 8,584
Change in trade and other receivables 16,394 (6,463) 40,561
Change in land, developments and trading properties 1,276 1,994 3,731
Change in trade and other payables 3,231 2,660 (3,176)
--------------------------------------------------------------- ------------------ ------------------ ---------
Cash inflows generated from operations 29,525 4,799 49,700
--------------------------------------------------------------- ------------------ ------------------ ---------
Finance costs (12,525) (13,525) (25,358)
Finance income 6,680 87 461
Tax paid (3,482) - (2,200)
--------------------------------------------------------------- ------------------ ------------------ ---------
(9,327) (13,438) (27,097)
--------------------------------------------------------------- ------------------ ------------------ ---------
Net cash generated from/(used by) operating activities 20,198 (8,639) 22,603
--------------------------------------------------------------- ------------------ ------------------ ---------
Cash flows from investing activities
Additions to Investment property (32,423) (58,959) (79,742)
Net (costs)/proceeds from sale of Investment property (28) 29,036 164,058
Investments in joint ventures and subsidiaries (46,748) - -
Proceeds from disposal of joint ventures 1,334 - -
Dividends from joint ventures - 416 416
Receipts from available-for-sale investments - 144 144
Sale of plant and equipment 26 41 155
Purchase of leasehold improvements, plant and equipment (7) (114) (320)
--------------------------------------------------------------- ------------------ ------------------ ---------
Net cash (used by)/generated from investing activities (77,846) (29,436) 84,711
--------------------------------------------------------------- ------------------ ------------------ ---------
Cash flows from financing activities
Borrowings drawn down 213,747 25,132 64,089
Borrowings repaid (296,679) (7,540) (54,306)
Finance lease repayments (290) - -
Shares issued 6 8 8
Equity dividends paid (8,980) (8,303) (11,406)
--------------------------------------------------------------- ------------------ ------------------ ---------
Net cash (used by)/generated from financing activities (92,196) 9,297 (1,615)
--------------------------------------------------------------- ------------------ ------------------ ---------
Net (decrease)/increase in cash and cash equivalents (149,844) (28,778) 105,699
Cash and cash equivalents at start of period 197,570 91,871 91,871
--------------------------------------------------------------- ------------------ ------------------ ---------
Cash and cash equivalents at end of period 47,726 63,093 197,570
--------------------------------------------------------------- ------------------ ------------------ ---------
Unaudited Consolidated Statement of Changes in Equity
At 30 September 2019
Capital
Share Share Revaluation redemption Other
capital premium reserve reserve reserves Retained earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------- -------- -------- ----------- ----------- --------- ----------------- --------
At 31 March 2018 1,451 98,798 162,753 7,478 291 263,123 533,894
Total comprehensive income - - - - - 42,569 42,569
Revaluation surplus - - 44,284 - - (44,284) -
Realised on disposals - - (75,987) - - 75,987 -
Issued share capital 8 2,506 - - - - 2,514
Performance Share Plan - - - - - 2,274 2,274
Performance Share Plan -
deferred tax - - - - - 94 94
Share settled Performance Share
Plan - - - - - (1,837) (1,837)
Share settled bonus - - - - - (677) (677)
Dividends paid - - - - - (11,406) (11,406)
At 31 March 2019 1,459 101,304 131,050 7,478 291 325,843 567,425
Balances at 1 April 2019, as
previously reported 1,459 101,304 131,050 7,478 291 325,843 567,425
Impact of transition to IFRS 16 - - - - - (548) (548)
Adjusted balances at 1 April
2019 1,459 101,304 131,050 7,478 291 325,295 566,877
Total comprehensive income - - - - 14,084 14,084
Revaluation surplus - - 9,442 - - (9,442) -
Issued share capital 6 2,158 - - - - 2,164
Performance Share Plan - - - - - 920 920
Performance Share Plan -
deferred tax - - - - - 355 355
Share settled Performance Share
Plan - - - - - (1,349) (1,349)
Share settled bonus - - - - - (413) (413)
Dividends paid - - - - - (8,980) (8,980)
At 30 September 2019 1,465 103,462 140,492 7,478 291 320,470 573,658
-------------------------------- -------- -------- ----------- ----------- --------- ----------------- --------
For a breakdown of total comprehensive income see the Unaudited
Consolidated Statement of Comprehensive Income.
The credit adjustment to retained earnings of GBP920,000 (31
March 2019: GBP2,274,000) is the contra to the share based payments
charge recognised in the Unaudited Consolidated Income Statement,
in accordance with IFRS 2 'Share Based Payments'.
There were net transactions with owners of GBP7,303,000 (31
March 2019: GBP9,038,000) made up of the Performance Share Plan
credit of GBP920,000 (31 March 2019: GBP2,274,000) and related
deferred tax credit of GBP355,000 (31 March 2019: GBP94,000),
dividends paid of GBP8,980,000 (31 March 2019: GBP11,406,000), the
issue of share capital of GBP6,000 (31 March 2019: GBP8,000) and
corresponding share premium of GBP2,158,000 (31 March 2019:
GBP2,506,000), share settled Performance Share Plan awards charge
of GBP1,349,000 (31 March 2019: GBP1,837,000) and the share settled
bonus awards charge of GBP413,000 (31 March 2019: GBP677,000).
Capital
Share Share Revaluation redemption Other Retained
capital premium reserve reserve reserves earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------- -------- -------- ----------- ----------- --------- --------- -------
At 31 March 2018 1,451 98,798 162,753 7,478 291 263,123 533,894
Total comprehensive income - - - - - 25,877 25,877
Revaluation surplus - - 31,435 - - (31,435) -
Realised on disposals - - 664 - - (664) -
Issued share capital 8 2,506 - - - - 2,514
Performance Share Plan - - - - - 898 898
Performance Share Plan
- deferred tax - - - - - 230 230
Share settled Performance
Share Plan - - - - - (1,837) (1,837)
Share settled bonus - - - - - (677) (677)
Dividends paid - - - - - (8,303) (8,303)
--------------------------- -------- -------- ----------- ----------- --------- --------- -------
At 30 September 2018 1,459 101,304 194,852 7,478 291 247,212 552,596
--------------------------- -------- -------- ----------- ----------- --------- --------- -------
The credit adjustment to retained earnings of GBP898,000 is the
contra to the share based payments charge recognised in the
Unaudited Consolidated Income Statement, in accordance with IFRS 2
'Share Based Payments'.
There were net transactions with owners of GBP7,175,000 made up
of the Performance Share Plan credit of GBP898,000 and related
deferred tax credit of GBP230,000, share settled Performance Share
Plan charge of GBP1,837,000, share settled bonus charge of
GBP677,000, dividends paid of GBP8,303,000, the issue of share
capital of GBP8,000 and corresponding share premium of
GBP2,506,000.
Unaudited Notes to the Half Year Results
1. Financial Information
The financial information contained in this statement does not
constitute statutory accounts within the meaning of section 434 of
the Companies Act 2006. The full accounts for the year ended 31
March 2019, which were prepared under International Financial
Reporting Standards as adopted by the European Union and which
received an unqualified report from the Auditors, and did not
contain a statement under Section 498(2) or Section 498(3) of the
Companies Act 2006, have been filed with the Registrar of
Companies.
These interim condensed unaudited consolidated financial
statements do not include all of the information required for full
annual financial statements and should be read in conjunction with
the consolidated financial statements of the Group for the year
ended 31 March 2019.
These interim condensed unaudited consolidated financial
statements have been prepared in accordance with IAS 34 'Interim
Financial Reporting' as adopted by the European Union. The same
accounting policies and methods of computation are followed in the
30 September 2019 interim condensed unaudited consolidated
financial statements as in the most recent annual financial
statements.
New Standards Adopted During the Period
During the six months to 30 September 2019, the following
accounting standards and interpretations have been adopted by the
Group:
Adoption of IFRS 16 'Leases'
The Group has adopted IFRS 16 'Leases', effective from 1 April
2019. This standard introduces significant changes for lessees by
removing the distinction between operating and finance leases,
requiring the recognition of a 'Right of Use Asset' and a 'Lease
Liability' on the Balance Sheet. This applies to the Group and
Company's lease of its head office premises, which was previously
an operating lease under IAS 17 'Leases', and the headlease
payments due under the long leasehold Investment properties. The
accounting for rental income earned by the Group as a lessor
remains unchanged.
Revised accounting policy
The Group assesses whether a contract contains a lease on
entering into the contract. IFRS 16 expressly excludes short leases
(under 12 months) and leases of low value. Where the Group has
these leases, lease payments are recognised as operating expenses
on a straight-line basis over the lease term.
IFRS 16 requires that a Lease Liability and corresponding Right
of Use Asset are recognised on the Balance Sheet.
The Lease Liability is initially measured at the present value
of future lease payments discounted at the rate implicit in the
lease or, if this is not readily available, the Group's incremental
borrowing rate. The Lease Liability is subsequently increased by
the interest charge and decreased by lease payments made. The Lease
Liability is adjusted for changes in the lease term or payments and
contract modifications as they arise.
The Right of Use Asset initially comprises the corresponding
Lease Liability, lease payments made at or before the commencement
date and any direct costs. Where the Group has an obligation to
restore the premises at the end of the lease term, a provision is
made under IAS 37 'Provisions, Contingent Liabilities and
Contingent Assets'. The costs are added to the Right of Use Asset.
It is subsequently measured at cost less accumulated depreciation
and impairment losses.
Approach to transition
The Group has applied IFRS 16 using the modified retrospective
approach and therefore the results for the year to 31 March 2019
have not been restated. The Lease Liability is calculated at
transition using the incremental borrowing rate at that date of
3.79%, being the weighted average cost of general debt at 31 March
2019. The Right of Use Asset is measured applying IFRS 16.C8(b)(i)
where the Standard is assumed to apply from the commencement of the
lease but discounted at the incremental borrowing rate at 31 March
2019. The resulting cumulative charge to 31 March 2019 is
recognised as an adjustment to retained earnings on transition of
GBP548,000. No practical expedients have been applied on
transition.
Additional changes from previous lessee accounting
In addition to the new requirement for leases previously
considered operating leases to be reflected as a Right of Use Asset
and a Lease Liability on the Balance Sheet, the following changes
apply:
- lease incentives are to be recognised as part of the initial
measurement on the Balance Sheet where they were previously a lease
incentive liability, amortised on a straight-line basis;
- Right of Use Assets are to be tested for impairment under IAS
36 'Impairment of Assets', replacing the onerous lease provisions
under IAS 17;
- the rental expense in Administrative Expenses is replaced by
depreciation of the Right of Use Asset and interest on the Lease
Liability; and
- the cash payments are to be recognised within financing
activities (principal payment) and interest paid (interest payment)
in the Consolidated and Company Cash Flow Statements, where all
lease payments were previously shown as operating cash
outflows.
The following table sets out the adjustments made on transition
to IFRS 16:
Under IAS 17 Under IFRS 16
31 March Impact of 1 April
2019 IFRS 16 2019
GBP000 GBP000 GBP000
--------------------------------------------- ------------ --------- -------------
Non-current assets
Owner occupied property, plant and equipment - 5,064 5,064
Current assets
Trade and other receivables 189 (189) -
--------------------------------------------- ------------ --------- -------------
Total assets 189 4,875 5,064
Current liabilities
Trade and other payables (1,150) 1,150 -
Non-current liabilities
Lease liability - (6,573) (6,573)
--------------------------------------------- ------------ --------- -------------
Total liabilities (1,150) (5,423) (6,573)
Retained earnings 325,843 (548) 325,295
--------------------------------------------- ------------ --------- -------------
Net assets 567,425 (548) 566,877
--------------------------------------------- ------------ --------- -------------
The difference between the operating lease commitments of
GBP7,773,000 disclosed at 31 March 2019 and the Lease Liability of
GBP6,573,000 at 1 April 2019 is due to discounting.
Going Concern
The Directors have assessed the going concern of the Group for a
period of five years to March 2024, being the period for which the
Board regularly reviews forecasts and which encompasses the
lifetime of the Group's major development projects.
In making its assessment, the Board considers the principal
risks and then assesses the potential impacts in severe, but
plausible, downside scenarios together with the likely
effectiveness of mitigating actions that the Group would have at
its disposal.
Based on their assessment the Directors have a reasonable
expectation that the Group will continue in operational existence
for the foreseeable future and have, therefore, used the going
concern basis in preparing the condensed unaudited financial
statements.
Principal Risks and Uncertainties
The responsibility for the governance of the Group's risk
profile lies with the Board of Directors of Helical. The Board is
responsible for setting the Group's risk strategy by assessing
risks, determining its willingness to accept those risks and
ensuring that the risks are monitored and that the Group is aware
of and, if appropriate, reacts to changes in those risks. The Board
is also responsible for allocating responsibility for risk within
the Group's management structure.
The Group considers its principal risks to be:
Strategic Risks - external risks that could prevent the Group
delivering its strategy. These risks principally impact our
decision to purchase or exit from a property asset.
Financial Risks - risks that could prevent the Group from
funding its chosen strategy, both in the long and short term.
Operational Risks - internal risks that could prevent the Group
from delivering its strategy.
Reputational Risk - risks that could affect the Group in all
aspects of its strategy.
There have been no significant changes to these risk areas in
the period nor are there expected to be for the half year to 31
March 2020. A further analysis of these risks is included within
the consolidated financial statements of the Group for the year
ended 31 March 2019.
Critical Accounting Judgements
In addition to those noted in the 31 March 2019 Annual Report
the Group made the following judgement:
Accounting treatment for 33 Charterhouse Street, London EC1.
During the period the Group acquired, in joint venture, a
Development Agreement which contains the right to develop the 33
Charterhouse Street, London EC1 office building. In return, and
once practical completion has been achieved, it will receive the
long leasehold interest in the site. The Group has determined that
the Development Agreement represents an agreement for lease and it
should be accounted for as an Investment property at fair value,
under IAS 40 'Investment Property', as the intention is to complete
the development of the office and hold it for rental income and
capital appreciation.
Key Sources of Estimation
There were no new estimates in addition to those noted in the 31
March 2019 Annual Report.
2. Revenue from Contracts with Customers
Year to
Half Year to Half Year to 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
-------------------------------------------- ------------------ ------------------ ---------
Development property income 3,080 5,545 7,963
Service charge income 4,422 4,319 8,058
Other revenue 47 4 -
-------------------------------------------- ------------------ ------------------ ---------
Total revenue from contracts with customers 7,549 9,868 16,021
-------------------------------------------- ------------------ ------------------ ---------
The total revenue from contracts with customers is the revenue
recognised in accordance with IFRS 15 'Revenue from Contracts with
Customers'. This reflects the Development property income and Other
revenue in Note 3.
No impairment of contract assets was recognised in the half year
to 30 September 2019 (half year to 30 September 2018: GBPnil: year
to 31 March 2019: GBPnil).
3. Segmental Information
The Group identifies two discrete operating segments whose
results are regularly reviewed by the Chief Operating Decision
Maker (the Chief Executive) to allocate resources to these segments
and to assess their performance. The segments are:
-- Investment properties, which are owned or leased by the Group
for long-term income and for capital appreciation; and
-- Development properties, which include sites, developments in
the course of construction, completed developments available for
sale, and pre-sold developments.
Investments Developments Total Investments Developments Total
Half Year to Half Year to Half Year to Half Year to Half Year to Half Year to
30.09.19 30.09.19 30.09.19 30.09.18 30.09.18 30.09.18
Revenue GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------ ------------------ ------------- ------------- ------------------ ------------- -------------
Rental income 14,506 - 14,506 13,527 - 13,527
Service charge
income 4,422 - 4,422 4,319 - 4,319
Development
property income - 3,080 3,080 - 5,545 5,545
Other revenue 47 - 47 4 - 4
------------------ ------------------ ------------- ------------- ------------------ ------------- -------------
Revenue 18,975 3,080 22,055 17,850 5,545 23,395
------------------ ------------------ ------------- ------------- ------------------ ------------- -------------
Developments Total
Investments Year to Year to Year to
31.03.19 31.03.19 31.03.19
Revenue GBP000 GBP000 GBP000
---------------------------- ------------------- ------------ ---------
Rental income 28,154 - 28,154
Development property income - 7,963 7,963
Service charge income 8,058 - 8,058
---------------------------- ------------------- ------------ ---------
Revenue 36,212 7,963 44,175
---------------------------- ------------------- ------------ ---------
Developments Total Investments Developments Total
Investments Half Year to Half Year to Half Year to Half Year to Half Year to
Half Year to 30.09.19 30.09.19 30.09.19 30.09.18 30.09.18 30.09.18
Profit before tax GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------- --------------------- ------------- ------------- -------------- ------------- -------------
Net rental income 12,811 - 12,811 11,769 (22) 11,747
Development
property gain - 1,441 1,441 - 1,686 1,686
Share of results of
joint ventures 6,514 1,468 7,982 1,252 (5,126) (3,874)
Gain on sale and
revaluation of
Investment
properties 9,414 - 9,414 32,537 - 32,537
------------------- --------------------- ------------- ------------- -------------- ------------- -------------
28,739 2,909 31,648 45,558 (3,462) 42,096
Fair value movement of
available-for-sale
investments - 144
Other operating
income 44 4
------------------- --------------------- ------------- ------------- -------------- ------------- -------------
Gross profit 31,692 42,244
Administrative
expenses (7,054) (7,861)
Net finance costs (7,004) (6,583)
Change in fair value of
derivative financial
instruments (4,980) 325
Change in fair value of
Convertible Bond 468 958
Foreign exchange
gain 9 65
------------------- --------------------- ------------- ------------- -------------- ------------- -------------
Profit before tax 13,131 29,148
------------------- --------------------- ------------- ------------- -------------- ------------- -------------
Investments Developments Total
Year to Year to Year to
31.03.19 31.03.19 31.03.19
Profit before tax GBP000 GBP000 GBP000
--------------------------------------------------------- ----------- ------------ ---------
Net rental income 24,599 - 24,599
Development property loss - (1,781) (1,781)
Share of results of joint ventures 5,203 (8,420) (3,217)
Gain on sale and revaluation of Investment properties 59,292 - 59,292
--------------------------------------------------------- ----------- ------------ ---------
89,094 (10,201) 78,893
Fair value movement of available-for-sale investments 144
--------------------------------------------------------- ----------- ------------ ---------
Gross profit 79,037
Administrative expenses (16,753)
Net finance costs (16,424)
Change in fair value of derivative financial instruments (3,322)
Change in fair value of Convertible Bond 865
Foreign exchange gain 53
--------------------------------------------------------- ----------- ------------ ---------
Profit before tax 43,456
--------------------------------------------------------- ----------- ------------ ---------
Investments Developments Total Investments Developments Total
At 30.09.19 At 30.09.19 At 30.09.19 At 30.09.18 At 30.09.18 At 30.09.18
Net assets GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------- -------------- ------------ ------------ ------------ ------------ ------------
Investment properties 820,138 - 820,138 744,850 - 744,850
Land, development and trading
properties - 1,035 1,035 - 4,048 4,048
Investment in joint ventures 31,739 46,334 78,073 13,604 17,915 31,519
------------------------------------ ---------- ------------ ------------ ------------ ------------ ------------
851,877 47,369 899,246 758,454 21,963 780,417
Other assets 90,978 290,479
-------------------------------- -------------- ------------ ------------ ------------ ------------ ------------
Total assets 990,224 1,070,896
Liabilities (416,566) (518,300)
-------------------------------- -------------- ------------ ------------ ------------ ------------ ------------
Net assets 573,658 552,596
-------------------------------- -------------- ------------ ------------ ------------ ------------ ------------
Investments Developments Total
At 31.03.19 At 31.03.19 At 31.03.19
Net assets GBP000 GBP000 GBP000
----------------------------------------- ------------- ------------ ------------
Investment properties 778,752 - 778,752
Land, development and trading properties - 2,311 2,311
Investment in joint ventures 17,556 7,120 24,676
----------------------------------------- ------------- ------------ ------------
796,308 9,431 805,739
Other assets 258,958
----------------------------------------- ------------- ------------ ------------
Total assets 1,064,697
Liabilities (497,272)
----------------------------------------- ------------- ------------ ------------
Net assets 567,425
----------------------------------------- ------------- ------------ ------------
4. Net Rental Income
Year to
Half Year to Half Year to 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
-------------------------------------------------------- ------------------ ------------------ ---------
Gross rental income 14,506 13,527 28,154
Property overheads (1,695) (1,919) (3,695)
-------------------------------------------------------- ------------------ ------------------ ---------
12,811 11,608 24,459
Net rental expense attributable to profit share partner - 139 140
-------------------------------------------------------- ------------------ ------------------ ---------
Net rental income 12,811 11,747 24,599
-------------------------------------------------------- ------------------ ------------------ ---------
5. Development Property Profit/(Loss)
Year to
Half Year to Half Year to 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
----------------------------------- ------------------ ------------------ ---------
Development property income 3,080 5,545 7,963
Cost of sales (1,493) (1,980) (5,399)
Sales expenses (20) - -
Provision against book values (126) (1,879) (4,345)
----------------------------------- ------------------ ------------------ ---------
Development property profit/(loss) 1,441 1,686 (1,781)
----------------------------------- ------------------ ------------------ ---------
6. (Loss)/Gain on Sale of Investment Properties
Year to
Half Year to Half Year to 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
------------------------------------------------------------ ------------------ ------------------ ---------
Net (costs)/proceeds from the sale of Investment properties (28) 29,046 164,058
Book value (Note 12) - (26,469) (147,550)
Tenants' incentives on sold Investment properties - (1,475) (1,500)
------------------------------------------------------------ ------------------ ------------------ ---------
(Loss)/gain on sale of Investment properties (28) 1,102 15,008
------------------------------------------------------------ ------------------ ------------------ ---------
7. Administrative Expenses
Year to
Half Year to Half Year to 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
------------------------------------------------- ------------------ ------------------ ---------
Administration costs (5,324) (5,552) (10,858)
Performance related awards (1,366) (2,033) (5,202)
National Insurance on performance related awards (364) (276) (693)
------------------------------------------------- ------------------ ------------------ ---------
Administrative expenses (7,054) (7,861) (16,753)
------------------------------------------------- ------------------ ------------------ ---------
8. Finance Costs
Year to
Half Year to Half Year to 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
----------------------------------------------------- ------------------ ------------------ ---------
Interest payable on bank loans, bonds and overdrafts (6,756) (8,263) (16,414)
Other interest payable and similar charges (2,686) (1,618) (4,208)
Interest capitalised 1,127 2,265 3,215
----------------------------------------------------- ------------------ ------------------ ---------
Finance costs (8,315) (7,616) (17,407)
----------------------------------------------------- ------------------ ------------------ ---------
9. Tax on Profit on Ordinary Activities
Year to
Half Year to Half Year to 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
----------------------------------------- ------------------ ------------------ ---------
The tax charge is based on the profit for the period and represents:
United Kingdom corporation tax at 19%
- Group corporation tax (1,201) (11,201) (8,813)
- Adjustment in respect of prior periods - - 315
- Use of tax losses - - (509)
----------------------------------------- ------------------ ------------------ ---------
Current tax charge (1,201) (11,201) (9,007)
Deferred tax
- Capital allowances (576) 252 (1,003)
- Tax losses 147 (1,498) (677)
- Unrealised chargeable gains 2,029 10,250 10,647
- Other temporary differences 499 (1,027) (796)
----------------------------------------- ------------------ ------------------ ---------
Deferred tax credit 2,099 7,977 8,171
----------------------------------------- ------------------ ------------------ ---------
Total tax credit/(charge) for period 898 (3,224) (836)
----------------------------------------- ------------------ ------------------ ---------
At
At At 31 March
30 September 2019 30 September 2018 2019
Deferred tax GBP000 GBP000 GBP000
---------------------------- ------------------- ------------------ ---------
Capital allowances (3,839) (2,008) (3,263)
Tax losses 2,167 1,198 2,019
Unrealised chargeable gains (7,131) (9,556) (9,159)
Other temporary differences 2,737 1,790 1,885
---------------------------- ------------------- ------------------ ---------
Deferred tax liability (6,066) (8,576) (8,518)
---------------------------- ------------------- ------------------ ---------
Under IAS 12 'Income Taxes', deferred tax provisions are made
for the tax that would potentially be payable on the realisation of
Investment properties and other assets at book value.
If upon sale of the Investment properties the Group retained all
the capital allowances, the deferred tax provision in respect of
capital allowances of GBP3,839,000 (net) would be released and
further capital allowances of GBP62,519,000 (gross) would be
available to reduce future tax liabilities.
The net deferred tax asset in respect of other temporary
differences arises from tax relief available to the Group on the
mark-to-market valuation of financial instruments, the future
vesting of share awards and other timing differences.
10. Dividends
Year to
Half Year to Half Year to 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
-------------------------------------------------------- ------------------ ------------------ ---------
Attributable to equity share capital
Ordinary
- Interim paid 2.60p per share - - 3,103
- Prior period final paid 7.50p per share (2018: 7.00p) 8,980 8,303 8,303
-------------------------------------------------------- ------------------ ------------------ ---------
8,980 8,303 11,406
-------------------------------------------------------- ------------------ ------------------ ---------
The interim dividend of 2.70p (30 September 2018: 2.60p per
share) was approved by the Board on 21 November 2019 and will be
paid on 31 December 2019 to Shareholders on the register on 29
November 2019. This interim dividend, amounting to GBP3,239,000,
has not been included as a liability as at 30 September 2019.
11. Earnings Per Share
The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the period. This
is a different basis to the net asset per share calculations which
are based on the number of shares at the period end.
The calculation of diluted earnings per share is based on the
basic earnings per share, adjusted to allow for the issue of shares
and the post tax effect of dividends on the assumed exercise of all
dilutive options.
The earnings per share is calculated in accordance with IAS 33
'Earnings per Share' and the best practice recommendations of the
European Public Real Estate Association ("EPRA").
Reconciliations of the earnings and weighted average number of
shares used in the calculations are set out below:
Year to
Half Year to Half Year to 31 March
30 September 2019 30 September 2018 2019
000s 000s 000s
----------------------------------------------------------------- ------------------- ------------------- ---------
Ordinary shares in issue 119,957 119,363 119,363
Weighting adjustment (237) (613) (307)
----------------------------------------------------------------- ------------------- ------------------- ---------
Weighted average ordinary shares in issue for calculation of
basic and EPRA earnings per share 119,720 118,750 119,056
Weighted average ordinary shares issued on share settled bonuses 636 735 862
Weighted average ordinary shares to be issued under Performance
Share Plan 868 326 778
----------------------------------------------------------------- ------------------- ------------------- ---------
Weighted average ordinary shares in issue for calculation of
diluted earnings per share 121,224 119,811 120,696
----------------------------------------------------------------- ------------------- ------------------- ---------
GBP000 GBP000 GBP000
----------------------------------------------------------------- ------------------- ------------------- ---------
Earnings used for calculation of basic and diluted earnings per
share 14,029 25,924 42,620
----------------------------------------------------------------- ------------------- ------------------- ---------
Basic earnings per share 11.7p 21.8p 35.8p
Diluted earnings per share 11.6p 21.6p 35.3p
----------------------------------------------------------------- ------------------- ------------------- ---------
GBP000 GBP000 GBP000
------------------------------------------------------------------------------------------------------------ ------- -------- --------
Earnings used for calculation of basic and diluted earnings per share 14,029 25,924 42,620
Net gain on sale and revaluation of Investment properties
-
subsidiaries (9,414) (32,537) (59,292)
- joint
ventures (472) (1,081) (1,288)
Tax on profit on disposal of Investment property held for sale - 13,641 -
Tax on profit on disposal of Investment properties - 270 14,130
Tax on gain on settlement of derivative component of Convertible Bond 1,556 - -
Gain on movement in share of joint ventures (2,404) - -
Fair value movement on derivative financial instruments - subsidiaries 4,980 (325) 3,322
- joint
ventures 34 22 35
Fair value movement on Convertible Bond (468) (958) (865)
Profit on cancellation of derivative financial instruments (218) (72) (72)
Expense on cancellation of loans 1,131 - 1,458
Fair value movement of available-for-sale investments - (144) (144)
Deferred tax on adjusting items (2,270) (10,202) (9,935)
------------------------------------------------------------------------------------------------------------ ------- -------- --------
Earnings/(loss) used for calculations of EPRA earnings per share 6,484 (5,462) (10,031)
------------------------------------------------------------------------------------------------------------ ------- -------- --------
EPRA earnings/(loss) per share 5.4p (4.6)p (8.4)p
------------------------------------------------------------------------------------------------------------ ------- -------- --------
The earnings used for the calculation of EPRA earnings per share
includes net rental income and development property profits but
excludes investment and trading property gains.
12. Investment Properties
Year to
Half Year to Half Year to 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
---------------------------------------------------------- ------------------ ------------------ ---------
Book value at 1 April 778,752 791,948 791,948
Additions at cost 31,944 72,040 90,320
Disposals - (26,469) (147,550)
Transfer of Investment property held for sale - (125,200) -
Revaluation surplus 9,442 32,781* 44,284
Revaluation deficit attributable to profit share partners - (250) (250)
---------------------------------------------------------- ------------------ ------------------ ---------
As at period end 820,138 744,850 778,752
---------------------------------------------------------- ------------------ ------------------ ---------
* Revaluation surplus is presented net of the transaction
expenditure on The Shepherds Building, London, W14 of GBP1,346,000
which had been accrued for the period to 30 September 2018.
All properties are stated at market value as at 30 September
2019, and are valued by professionally qualified external valuers
(Cushman & Wakefield LLP) in accordance with the Valuation -
Professional Standards published by the Royal Institution of
Chartered Surveyors. The fair value of the Investment properties at
30 September 2019 is as follows:
Year to
Half Year to Half Year to 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
------------------------------------------------------------------- ------------------ ------------------ ---------
Book value 820,138 744,850 778,752
Lease incentives and costs included in trade and other receivables 17,130 11,589 14,687
Head leases capitalised (2,168) (2,189) (2,189)
------------------------------------------------------------------- ------------------ ------------------ ---------
Fair value 835,100 754,250 791,250
------------------------------------------------------------------- ------------------ ------------------ ---------
Interest capitalised in respect of the refurbishment of
Investment properties at 30 September 2019 amounted to
GBP12,484,000 (30 September 2018: GBP11,322,000; 31 March 2019:
GBP11,357,000). Interest capitalised during the period in respect
of the refurbishment of Investment properties amounted to
GBP1,127,000 (30 September 2019: GBP2,265,000, 31 March 2019:
GBP3,215,000).
The historical cost of Investment property is GBP676,356,000 (30
September 2018: GBP635,488,000; 31 March 2019: GBP645,521,000).
13. Joint Ventures
Year to
Half Year to Half Year to 31 March
30 September 2019 30 September 2018 2019
Share of results of joint ventures GBP000 GBP000 GBP000
----------------------------------------------------------- ------------------- ------------------ ---------
Revenue 6,746 37,848 52,402
----------------------------------------------------------- ------------------- ------------------ ---------
Gross rental income 392 426 971
Property overheads (162) (466) (411)
----------------------------------------------------------- ------------------- ------------------ ---------
Net rental income/(expense) 230 (40) 560
Gain on revaluation of Investment properties 472 1,081 1,288
Development profit 5,355 500 4,570
Provision against book values (1,083) (4,288) (7,198)
Other operating income - 31 9
----------------------------------------------------------- ------------------- ------------------ ---------
Gross profit/(loss) 4,974 (2,716) (771)
Administrative expenses (335) (161) (406)
----------------------------------------------------------- ------------------- ------------------ ---------
Operating profit/(loss) 4,639 (2,877) (1,177)
Finance costs (595) (807) (2,087)
Finance income 41 32 92
Change in fair value of derivative financial instruments (34) (22) (35)
----------------------------------------------------------- ------------------- ------------------ ---------
Profit/(loss) before tax 4,051 (3,674) (3,207)
Tax (31) (967) (1,399)
----------------------------------------------------------- ------------------- ------------------ ---------
Profit/(loss) after tax 4,020 (4,641) (4,606)
Reversal of One Creechurch Place loss(1) 224 767 1,389
Profit on sale of interest in One Creechurch Place 1,334 - -
Uplift for Barts Square economic interest(2) 2,404 - -
----------------------------------------------------------- ------------------- ------------------ ---------
Share of results of joint ventures 7,982 (3,874) (3,217)
----------------------------------------------------------- ------------------- ------------------ ---------
At
At At 31 March
30 September 2019 30 September 2018 2019
Investment in joint ventures GBP000 GBP000 GBP000
----------------------------------------------------------- ------------------- ------------------ ---------
Summarised balance sheets
Non-current assets
Investment properties 65,572 24,427 25,289
Owner occupied property, plant and equipment 111 26 106
Deferred tax 1,687 2,110 23
Derivative financial instruments 6 37 1,774
----------------------------------------------------------- ------------------- ------------------ ---------
67,376 26,600 27,192
----------------------------------------------------------- ------------------- ------------------ ---------
Current assets
Land, development and trading properties 53,188 53,466 56,935
Trade and other receivables 14,605 12,626 10,554
Cash and cash equivalents 3,551 17,629 7,612
----------------------------------------------------------- ------------------- ------------------ ---------
71,344 83,721 75,101
----------------------------------------------------------- ------------------- ------------------ ---------
Current liabilities
Trade and other payables (12,376) (18,559) (13,599)
----------------------------------------------------------- ------------------- ------------------ ---------
(12,376) (18,559) (13,599)
----------------------------------------------------------- ------------------- ------------------ ---------
Non-current liabilities
Trade and other payables (323) (17,814) (20,419)
Borrowings (48,026) (46,680) (48,473)
(48,349) (64,494) (68,892)
----------------------------------------------------------- ------------------- ------------------ ---------
Net assets pre-adjustment 77,995 27,268 19,802
Reversal of One Creechurch Place net liability position(1) - 4,251 4,874
Acquisition costs 78 - -
----------------------------------------------------------- ------------------- ------------------ ---------
Investment in joint ventures 78,073 31,519 24,676
----------------------------------------------------------- ------------------- ------------------ ---------
(1) This is an adjustment that has been made to add back the
Group's share of the loss incurred in one of its joint ventures
arising from finance and other costs in the period to ensure that
the Group's interest is shown at its recoverable amount.
(2) This is an adjustment to reflect the impact of the
consolidation of a joint venture at its economic interest of 43.8%
rather than its actual ownership interest of 33.3%, following
additional equity invested during the period.
The Directors' valuation of trading and development stock shows
a surplus of GBPnil (30 September 2018: GBP800,000; 31 March 2019:
GBPnil) above book value. This surplus has been included in the
EPRA net asset value (Note 24).
14. Land, Developments and Trading Properties
At
At At 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
--------------------------------- ------------------ ------------------ ---------
Development properties 1,007 4,020 2,283
Properties held as trading stock 28 28 28
--------------------------------- ------------------ ------------------ ---------
1,035 4,048 2,311
--------------------------------- ------------------ ------------------ ---------
The Directors' valuation of trading and development stock shows
a surplus of GBP578,000 (30 September 2018: GBP628,000; 31 March
2019: GBP578,000) above book value. This surplus has been included
in the EPRA net asset value (Note 24).
No interest has been capitalised or included in land,
developments and trading properties.
15. Investment Property Held for Sale
At
At At 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
------------------------------------- ------------------ ------------------ ---------
Transferred from Investment property - 123,734 -
Outstanding lease incentives - 1,466 -
------------------------------------- ------------------ ------------------ ---------
- 125,200 -
------------------------------------- ------------------ ------------------ ---------
In the prior period, the Group unconditionally exchanged
contracts on the sale of The Shepherds Building, London W14, for
GBP125.2m. Completion took place after the prior period end on 5
October 2018 and the property was classified as a held for sale
asset under IFRS 5 'Non-current Assets Held for Sale and
Discontinued Operations'.
16. Available-For-Sale Investments
The gain of GBP144,000 recognised in the prior period is the
result of cash received in relation to a previously fully impaired
asset.
17. Trade and Other Receivables
At
At At 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
------------------ ------------------ ------------------ ---------
Trade receivables 10,588 38,059 9,680
Other receivables 1,656 20,899 22,856
Prepayments 4,210 4,502 4,173
Accrued income 20,085 35,240 22,017
------------------ ------------------ ------------------ ---------
36,539 98,700 58,726
------------------ ------------------ ------------------ ---------
18. Cash and Cash Equivalents
At
At At 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
----------------------------- ------------------ ------------------ ---------
Cash held at managing agents 4,900 4,118 2,599
Restricted cash 8,330 1,572 2,678
Cash deposits 34,496 57,403 192,293
----------------------------- ------------------ ------------------ ---------
47,726 63,093 197,570
----------------------------- ------------------ ------------------ ---------
Restricted cash is made up of cash held by solicitors and cash
in restricted accounts.
19. Trade and Other Payables
At
At At 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
------------------------------------- ------------------ ------------------ ---------
Trade payables 20,200 15,000 13,009
Other payables 1,559 8,731 1,869
Accruals 24,355 25,044 23,368
Deferred income 6,425 6,877 4,913
------------------------------------- ------------------ ------------------ ---------
Current trade and other payables 52,539 55,652 43,159
Accruals 590 10,815 11,405
------------------------------------- ------------------ ------------------ ---------
Non-current trade and other payables 590 10,815 11,405
------------------------------------- ------------------ ------------------ ---------
Total trade and other payables 53,129 66,467 54,564
------------------------------------- ------------------ ------------------ ---------
20. Lease Liability
At
At At 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
---------------------------- ------------------ ------------------ ---------
Current lease liability 599 - -
---------------------------- ------------------ ------------------ ---------
Non-current lease liability 7,872 2,189 2,189
---------------------------- ------------------ ------------------ ---------
Included within the lease liability are GBP599,000 (30 September
2019: GBPnil, 31 March 2019: GBPnil) of current and GBP5,683,000
(30 September 2019: GBPnil, 31 March 2019: GBPnil) of non-current
lease liabilities which relate to the adoption of IFRS 16
'Leases'.
21. Borrowings
At
At At 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
----------------------------- ------------------ ------------------ ---------
Current borrowings - 100,375 100,468
----------------------------- ------------------ ------------------ ---------
Borrowings repayable within:
- one to two years - 184,686 -
- two to three years - - 195,410
- three to four years 31,930 - -
- four to five years 216,591 24,887 37,399
- five to six years 92,082 - 92,005
- six to ten years - 122,717 -
----------------------------- ------------------ ------------------ ---------
Non-current borrowings 340,603 332,290 324,814
----------------------------- ------------------ ------------------ ---------
Total borrowings 340,603 432,665 425,282
----------------------------- ------------------ ------------------ ---------
The GBP100,000,000 Convertible Bond was repaid in June 2019.
At
At At 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
----------------- ------------------ ------------------ ---------
Total borrowings 340,603 432,665 425,282
Cash (47,726) (63,093) (197,570)
----------------- ------------------ ------------------ ---------
Net borrowings 292,877 369,572 227,712
----------------- ------------------ ------------------ ---------
Net borrowings excludes the Group's share of borrowings in joint
ventures of GBP48,026,000 (30 September 2018: GBP46,680,000; 31
March 2019: GBP48,473,000) and cash of GBP3,551,000 (30 September
2018: GBP17,629,000; 31 March 2019: GBP7,612,000). All borrowings
in joint ventures are secured.
At
At At 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
----------- ------------------ ------------------ ---------
Net assets 573,658 552,596 567,425
----------- ------------------ ------------------ ---------
Gearing 51% 67% 40%
----------- ------------------ ------------------ ---------
22. Derivative Financial Instruments
At
At At 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
------------------------------------------- ------------------ ------------------ ---------
Derivative financial instruments asset 319 1,703 915
------------------------------------------- ------------------ ------------------ ---------
Derivative financial instruments liability (8,017) (1,529) (4,158)
------------------------------------------- ------------------ ------------------ ---------
A loss on the change in fair value of GBP4,980,000 has been
recognised in the Unaudited Consolidated Income Statement (30
September 2018: gain of GBP325,000, 31 March 2019: loss of
GBP3,322,000).
The fair values of the Group's outstanding interest rate swaps
and caps have been estimated by calculating the present values of
future cash flows, using appropriate market discount rates,
representing Level 2 fair value measurements as defined in IFRS 13
'Fair Value Measurement'.
23. Share Capital
At
At At 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
----------- ------------------ ------------------ ---------
Authorised 39,577 39,577 39,577
----------- ------------------ ------------------ ---------
The authorised share capital of the Company is GBP39,576,626.60
divided into ordinary shares of 1p each and deferred shares of 1/8p
each.
Allotted, called up and fully paid:
- 119,956,767 (30 September 2018: 119,363,349; 31 March 2019: 119,363,349) ordinary shares
of 1p each 1,200 1,194 1,194
- 212,145,300 deferred shares of 1/8p each 265 265 265
------------------------------------------------------------------------------------------- ----- ----- -----
1,465 1,459 1,459
------------------------------------------------------------------------------------------- ----- ----- -----
24. Net Assets Per Share
Number
At of At
30 September 2019 shares 30 September 2019
GBP000 000s Pence per share
------------------------------------------------------------------ ------------------ ------- ------------------
Net asset value 573,658
Less - deferred shares (265)
------------------------------------------------------------------ ------------------ ------- ------------------
Basic net asset value 573,393 119,957 478
Add - share settled bonus 636
Add - dilutive effect of the Performance Share Plan 926
------------------------------------------------------------------ ------------------ ------- ------------------
Diluted net asset value 573,393 121,519 472
Adjustment for:
- fair value of financial instruments 7,689
- deferred tax 9,309
------------------------------------------------------------------ ------------------ ------- ------------------
Adjusted diluted net asset value 590,391 121,519 486
Adjustment for:
- fair value of trading and development properties 578
------------------------------------------------------------------ ------------------ ------- ------------------
EPRA net asset value 590,969 121,519 486
Adjustment for:
- fair value of fixed rate loans (7,282)
- fair value of financial instruments (7,689)
- deferred tax (9,309)
------------------------------------------------------------------ ------------------ ------- ------------------
EPRA triple net asset value 566,689 121,519 466
------------------------------------------------------------------ ------------------ ------- ------------------
The adjustment for the fair value of trading and development
properties represents the surplus as at 30 September 2019.
At Number At
31 March of 31 March
2019 shares 2019
GBP000 000s Pence per share
------------------------------------------------------------------ --------- ------- ----------------
Net asset value 567,425 119,363
Less - deferred shares (265)
------------------------------------------------------------------ --------- ------- ----------------
Basic net asset value 567,160 119,363 475
Add - share settled bonus 862
Add - dilutive effect of the Performance Share Plan 734
------------------------------------------------------------------ --------- ------- ----------------
Diluted net asset value 567,160 120,959 469
Adjustment for:
- fair value of financial instruments 3,218
- fair value surplus on Convertible Bond 468
- deferred tax 11,687
------------------------------------------------------------------ --------- ------- ----------------
Adjusted diluted net asset value 582,533 120,959 482
Adjustment for:
- fair value of trading and development properties 578
------------------------------------------------------------------ --------- ------- ----------------
EPRA net asset value 583,111 120,959 482
Adjustment for:
- fair value of fixed rate loans (5,449)
- fair value of financial instruments (3,218)
- deferred tax (11,687)
------------------------------------------------------------------ --------- ------- ----------------
EPRA triple net asset value 562,757 120,959 465
------------------------------------------------------------------ --------- ------- ----------------
The net asset values per share have been calculated in
accordance with guidance issued by the European Public Real Estate
Association ("EPRA").
The adjustments to the net asset value comprise the amounts
relating to the Group and its share of joint ventures.
25. Related Party Transactions
The following amounts were due from/(to) the Group's joint
ventures:
At
At At 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
------------------------------------------- ------------------ ------------------ ---------
ARE 1 Farringdon SARL 370 - -
Charterhouse Place Ltd 9 - -
Barts Square companies 31 2,543 34
Creechurch Place Ltd - 37,890 22,073
King Street Developments (Hammersmith) Ltd 71 309 71
Old Street Holdings LP 3 3 3
Shirley Advance LLP 14 249 330
------------------------------------------- ------------------ ------------------ ---------
During the period, interest on bonds of GBP745,000 (30 September
2018: GBP875,000; 31 March 2019: GBP451,000) and a promote fee for
development management services of GBP305,000 (30 September 2018:
GBP4,874,000; 31 March 2019: GBP7,142,000) were charged by the
Group to Creechurch Place Limited. A development management,
accounting and corporate services fee of GBP945,000 (30 September
2018: GBP670,000; 31 March 2019: GBP821,000) was charged by the
Group to the Barts Square companies. In addition, an accounting and
corporate services fee of GBP9,000 (30 September 2018: GBPnil, 31
March 2019: GBPnil) was charged by the Group to each of ARE 1
Farringdon SARL and Charterhouse Place Ltd.
26. See-through Analysis
Helical holds a significant proportion of its property assets in
joint ventures with partners that provide a significant equity
contribution, whilst relying on the Group to provide asset
management or development expertise. Accounting convention requires
Helical to account under IFRS for its share of the net results and
net assets of joint ventures in limited detail in the Income
Statement and Balance Sheet. Net asset value per share, a key
performance measure used in the real estate industry, as reported
in the financial statements under IFRS, does not provide
shareholders with the most relevant information on the fair value
of assets and liabilities within an ongoing real estate company
with a long term investment strategy.
This analysis incorporates the separate components of the
results of the consolidated subsidiaries and Helical's share of its
joint ventures' results into a 'see-through' analysis of its
property portfolio, debt profile and the associated income streams
and financing costs, to assist in providing a comprehensive
overview of the Group's activities.
See-through Net Rental Income
Helical's share of the gross rental income, head rents payable
and property overheads from property assets held in subsidiaries
and in joint ventures is shown in the table below.
Half Year to Half Year to Year to
30 September 30 September 31 March
2019 2018 2019
GBP000 GBP000 GBP000
------------------------------------- --------------------- ------------- ------------- ---------
Gross rental income - subsidiaries 14,506 13,527 28,154
- joint ventures 392 426 971
--------------------- ------------- ------------- ---------
Total gross rental income 14,898 13,953 29,125
Property overheads - subsidiaries (1,695) (1,919) (3,695)
- joint ventures (162) (466) (411)
Net rental expense attributable to profit share partner - 139 140
------------------------------------------------------------ ------------- ------------- ---------
See-through net rental income 13,041 11,707 25,159
-------------------------------------- -------------------- ------------- ------------- ---------
See-through Net Development Profits/(Losses)
Helical's share of development profits/(losses) from property
assets held in subsidiaries and in joint ventures is shown in the
table below.
Half Year to Half Year to Year to
30 September 30 September 31 March
2019 2018 2019
GBP000 GBP000 GBP000
-------------------------------------------- ------------- ------------- ---------
In parent and subsidiaries 1,567 3,565 2,564
In joint ventures 5,355 500 4,570
-------------------------------------------- ------------- ------------- ---------
Total gross development profit 6,922 4,065 7,134
Provision against stock - subsidiaries (126) (1,879) (4,345)
- joint ventures (1,083) (4,288) (7,198)
------------------------------------------- ------------- ------------- ---------
See-through development profits/(losses) 5,713 (2,102) (4,409)
-------------------------------------------- ------------- ------------- ---------
See-through Net Gain on Sale and Revaluation of Investment
Properties
Helical's share of the net gain on the sale and revaluation of
Investment properties held in subsidiaries and joint ventures is
shown in the table below.
Half Year to Half Year to Year to
30 September 30 September 31 March
2019 2018 2019
GBP000 GBP000 GBP000
--------------------------------------------------- ----------------- --------------- ------------- ---------
Revaluation surplus on Investment properties - subsidiaries 9,442 31,435 44,284
- joint ventures 472 1,081 1,288
--------------------------------------------------------------------- --------------- ------------- ---------
Total revaluation surplus 9,914 32,516 45,572
Net (loss)/gain on sale of Investment properties - subsidiaries (28) 1,102 15,008
Total net (loss)/gain on sale of Investment properties (28) 1,102 15,008
---------------------------------------------------------------------- --------------- ------------- ---------
See-through net gain on sale and revaluation of Investment properties 9,886 33,618 60,580
----------------------------------------------------------------------------- -------- ------------- ---------
See-through Net Finance Costs
Helical's share of the interest payable, finance charges,
capitalised interest and interest receivable on bank borrowings and
cash deposits in subsidiaries and in joint ventures is shown in the
table below.
Half Year to Half Year to Year to
30 September 30 September 31 March
2019 2018 2019
GBP000 GBP000 GBP000
---------------------------------------------- ----------------- ------------- ------------- ---------
Interest payable on bank loans and overdrafts - subsidiaries 6,756 8,263 16,414
- joint ventures 267 7 511
---------------------------------------------------------------- ------------- ------------- ---------
Total interest payable on bank loans and overdrafts 7,023 8,270 16,925
Other interest payable and similar charges - subsidiaries 2,686 1,618 4,208
- joint ventures 328 800 1,576
Interest capitalised - subsidiaries (1,127) (2,265) (3,215)
---------------------------------------------- ----------------- ------------- ------------- ---------
Total finance costs 8,910 8,423 19,494
Interest receivable and similar income - subsidiaries (1,311) (1,033) (983)
- joint ventures (41) (32) (92)
---------------------------------------------------------------- ------------- ------------- ---------
See-through net finance costs 7,558 7,358 18,419
----------------------------------------------------------------- ------------- ------------- ---------
See-through Property Portfolio
Helical's share of the Investment, trading and development
property portfolio in subsidiaries and joint ventures is shown in
the table below.
At
At At 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
--------------------------------------------- -------------------- ------------------ ------------------ ---------
Investment property fair value - subsidiaries 835,100 754,250 791,250
- joint ventures 65,870 24,427 25,382
Investment property held for sale - subsidiaries - 125,200 -
--------------------------------------------- -------------------- ------------------ ------------------ ---------
Total Investment property fair value 900,970 903,877 816,632
Trading and development stock - subsidiaries 1,035 4,048 2,311
- joint ventures 53,188 53,466 56,935
-------------------- ------------------ ------------------ ---------
Total trading and development stock 54,223 57,514 59,246
Trading and development stock surplus - subsidiaries 578 628 578
- joint ventures - 800 -
-------------------- ------------------ ------------------ ---------
Total trading and development stock surpluses 578 1,428 578
------------------------------------------------------------------- ------------------ ------------------ ---------
Total trading and development stock at fair value 54,801 58,942 59,824
-------------------------------------------------- --------------- ------------------ ------------------ ---------
See-through property portfolio 955,771 962,819 876,456
------------------------------------------------------------------- ------------------ ------------------ ---------
See-through Net Borrowings
Helical's share of borrowings and cash deposits in subsidiaries
and joint ventures is shown in the table below.
At At
30 September At 31 March
2019 30 September 2018 2019
GBP000 GBP000 GBP000
------------------------------------------------------- ------------- ------------------ ---------
Gross borrowings less than one year - subsidiaries - 100,375 100,468
Gross borrowings more than one year - subsidiaries 340,603 332,290 324,814
------------------------------------ ----------------- ------------- ------------------ ---------
Total 340,603 432,665 425,282
------------------------------------------------------ ------------- ------------------ ---------
Gross borrowings more than one year - joint ventures 48,026 46,680 48,473
------------------------------------ ----------------- ------------- ------------------ ---------
Total 48,026 46,680 48,473
------------------------------------------------------ ------------- ------------------ ---------
Cash and cash equivalents - subsidiaries (47,726) (63,093) (197,570)
- joint ventures (3,551) (17,629) (7,612)
------------------------------------------------------ ------------- ------------------ ---------
See-through net borrowings 337,352 398,623 268,573
------------------------------------------------------- ------------- ------------------ ---------
27. See-through Gearing and Loan to Value
At
At At 31 March
30 September 2019 30 September 2018 2019
GBP000 GBP000 GBP000
-------------------------- ------------------ ------------------ ---------
Property portfolio 955,771 962,819 876,456
Net borrowings 337,352 398,623 268,573
Net assets 573,658 552,596 567,425
See-through net gearing 58.8% 72.1% 47.3%
See-through loan to value 35.3% 41.4% 30.6%
-------------------------- ------------------ ------------------ ---------
28. Capital Commitments
The Group has a commitment of GBP27,188,000 (30 September 2018:
GBP78,746,000; 31 March 2019: GBP64,900,000) in relation to
construction contracts which are due to be completed in the period
to March 2021. Of the total, GBP22,406,000 relates to the Group's
Investment property portfolio and GBP4,782,000 is in relation to
the Group's residential scheme at Barts Square.
29. Post Balance Sheet Events
There are no material post balance sheet events.
Appendix 1 - Glossary of Terms
Capital value (psf)
The open market value of the property divided by the area of the
property in square feet.
Company or Helical or Group
Helical plc and its subsidiary undertakings.
Diluted figures
Reported amounts adjusted to include the effects of potential
shares issuable under the Director and employee remuneration
schemes.
Earnings per share (EPS)
Profit after tax divided by the weighted average number of
ordinary shares in issue.
EPRA
European Public Real Estate Association.
EPRA earnings per share
Earnings per share adjusted to exclude gains/losses on sale and
revaluation of Investment properties and their deferred tax
adjustments, the tax on profit/loss on disposal of Investment
properties, trading property profits/losses, movement in fair value
of available-for-sale assets and fair value movements on derivative
financial instruments, on an undiluted basis. Details of the method
of calculation of the EPRA earnings per share are available from
EPRA (see Note 11).
EPRA net assets per share
Diluted net asset value per share adjusted to exclude fair value
surplus of financial instruments and the Convertible Bond, and
deferred tax on capital allowances and on Investment properties
revaluation, but including the fair value of trading and
development properties in accordance with the best practice
recommendations of EPRA (see Note 24).
EPRA topped-up NIY
The current annualised rent, net of costs, topped-up for
contracted uplifts, expressed as a percentage of the fair value of
the relevant property.
EPRA triple net asset value per share
EPRA net asset value per share adjusted to include fair value of
financial instruments and deferred tax on capital allowances and on
Investment properties revaluation (see Note 24).
Estimated rental value (ERV)
The market rental value of lettable space as estimated by the
Group's valuers at each Balance Sheet date.
Gearing
Group borrowings expressed as a percentage of net assets.
Initial yield
Annualised net passing rents on Investment properties as a
percentage of their open market value.
Like-for-like valuation change
The valuation gain/loss, net of capital expenditure, on those
properties held at both the previous and current reporting period
end, as a proportion of the fair value of those properties at the
beginning of the reporting period plus net capital expenditure.
MSCI Inc. (MSCI IPD)
MSCI Inc. is a company that produces independent benchmarks of
property returns.
Net asset value per share (NAV)
Net assets divided by the number of ordinary shares at the
Balance Sheet date (see Note 24).
Net gearing
Total borrowings less short-term deposits and cash as a
percentage of net assets.
Passing rent
The annual gross rental income being paid by the tenant.
Reversionary yield
The income/yield from the full estimated rental value of the
property on the market value of the property grossed up to include
purchaser's costs, capital expenditure and capitalised revenue
expenditure.
See-through/Group share
The consolidated Group and the Group's share in its joint
ventures (see Note 26).
See-through net gearing
The see-through net borrowings expressed as a percentage of net
assets (see Note 27).
Total Accounting Return
The growth in the net asset value of the Company plus dividends
paid in the period, expressed as a percentage of net asset value at
the start of the period.
Total Property Return
The total of net rental income, trading and development profits
and net gain on sale and revaluation of Investment properties on a
see-through basis.
Total Shareholder Return (TSR)
The growth in the ordinary share price as quoted on the London
Stock Exchange plus dividends per share received for the period
expressed as a percentage of the share price at the beginning of
the period.
True equivalent yield
The constant capitalisation rate which, if applied to all cash
flows from an Investment property, including current rent,
reversions to current market rent and such items as voids and
expenditures, equates to the market value. Assumes rent is received
quarterly in advance.
Unleveraged returns
Total property gains and losses (both realised and unrealised)
plus net rental income expressed as a percentage of the total value
of the properties.
WAULT
The total contracted rent up to the first break, or lease expiry
date, divided by the contracted annual rent.
HELICAL PLC
Registered in England and Wales No.156663
Registered Office:
5 Hanover Square
London
W1S 1HQ
T: 020 7629 0113
F: 020 7408 1666
E: reception@helical.co.uk
www.helical.co.uk
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR KMMZMMGLGLZZ
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