TIDMMCKS
RNS Number : 2286W
McKay Securities PLC
13 November 2017
McKAY UNLOCKS FURTHER PORTFOLIO REVERSION
McKay Securities PLC, the only Real Estate Trust (REIT)
specialising exclusively in the London and South East office and
industrial markets, today announces its half year results for the
six months ended 30(th) September 2017.
Financial Highlights
-- Net rental income up 8.2% to GBP9.92million (30(th) September 2016: GBP9.17 million)
-- Adjusted profit before tax up 6.2% to GBP4.70 million (30(th)
September 2016: GBP4.42 million)
-- IFRS profit before tax up to GBP16.54 million (30(th) September 2016: loss GBP3.78 million)
-- NAV (EPRA) up 3.0% to 312 pence per share (31(st) March 2017: 303 pence)
-- NNNAV (EPRA) up 3.9% to 296 pence per share (31(st) March 2017: 285 pence)
-- Interim dividend up 3.7% to 2.8 pence per share (2016: 2.7
pence), payable on 4(th) January 2018
Portfolio Highlights
-- Property valuation up 5.3% (GBP22.73 million), to GBP452.65
million, generating a 2.7% (GBP11.94 million) surplus over cost
-- 5.3% (GBP1.24 million pa) increase in contracted rental
income to GBP24.66 million pa, supported by recent lettings
-- 4.3% (GBP1.41 million pa) increase in rental value (ERV) of
the portfolio to GBP34.08 million pa
-- 1.8% increase of portfolio reversion to GBP9.43 million -
representing a potential 38.2% increase in rental income once
secured
-- Reversionary yield of 7.1%
-- Good progress achieved in unlocking income and valuation gains though actions;
o Redevelopment schemes generating gains, aided by the full
letting of 9 Greyfriars Road, Reading
o Redevelopment of 30 Lombard Street, EC3 on track for delivery
in mid-2018, with a marketing campaign now underway
-- Planning consent achieved in October 2017 for the
redevelopment of up to 134,430 sq ft of warehouse and distribution
floorspace at Brunel Road, Theale
-- Continued focus on realising value, evidenced by disposal of
Albion House, Newbury in October 2017 for GBP1.43 million, 43%
ahead of March 2017 valuation
Simon Perkins, Chief Executive of McKay Securities, said:
"Our results are up on all key metrics. This continued growth is
the direct result of building up a carefully selected portfolio
over the last few years, and our ability to enhance and release its
potential. We are putting our assets to work and delivering value
for our shareholders through active asset management, securing
major lettings and delivering planning and development gains.
"Our clear focus on London and the South East, backed by our
on-the-ground presence in these markets, remains at the core of our
success. A particular highlight during the period was securing the
letting of 9 Greyfriars Road in Reading which we transformed from
an unloved office block into a modern, award-winning work space,
which is now fully let to a major co-working operator. As a result
of this and other initiatives, our contracted rents have risen a
further 5% during the period - and over 40% since our Capital
Raising in 2014.
"Looking ahead, there remains significant levels of income
potential within our portfolio to realise on behalf of our
shareholders. While the pace of gains remains in part dependent on
the health of the occupier market, we have a high quality portfolio
of diverse assets in sought after locations which puts us in a
strong position for the future."
-S -
Date: 13(th) November 2017
For further information please
contact:
McKay Securities PLC FTI Consulting
Simon Perkins, CEO Dido Laurimore, Tom Gough, Ellie
Sweeney
Giles Salmon, CFO 020 3727 1000
01189 502333
About McKay Securities
McKay Securities PLC is a commercial property investment company
with Real Estate Investment Trust (REIT) status, listed on the main
market of the London Stock Exchange. It specialises in the
development and refurbishment of good quality office and industrial
buildings within established and proven markets of central London
and South East England. The portfolio, which was valued at 30(th)
September 2017 at GBP452.65 million, comprised 36 properties in
strong and established areas, which deliver diversity in terms of
both sector and location.
Highlights page
Forward looking statements
This announcement is for information purposes only and contains
certain forward-looking statements which, by their nature, involve
risk and uncertainty because they relate to or depend upon future
events and circumstances.
There are a number of factors which could cause actual results
and developments to differ materially from those expressed or
implied by these forward looking statements, including a number of
factors outside McKay Securities PLC's control. All forward-looking
statements are based upon information known to McKay Securities PLC
on the date of this announcement and no representation or warranty
is given in relation to them, including as to their completeness or
accuracy or the basis on which they were prepared. McKay Securities
PLC gives no undertaking to update forward-looking statements
whether as a result of new information, future events or otherwise.
Information contained in this announcement relating to the Company
should not be relied upon as an indicator of future
performance.
Details of the programme for the payment of the interim dividend
of the Ordinary Shares is as follows:
Ex-dividend date 23(rd) November 2017
Record Date for the interim dividend 24(th) November 2017
Interim dividend paid 4(th) January 2018
An interim dividend per share of 2.8 pence, (2016: 2.7 pence per
share), which will be paid as an ordinary dividend.
CHAIRMAN'S STATEMENT
Profit before tax, adjusted to exclude unrealised movements in
the value of the Group's property portfolio and other non-cash
items, increased by 6.2% to GBP4.70 million for the six month
period to 30(th) September 2017 (30(th) September 2016: GBP4.42
million).
The independent valuation of the Group's property portfolio at
30(th) September 2017 totalled GBP452.65 million, resulting in a
2.7% (GBP11.94 million) valuation surplus for the period (30(th)
September 2016: 0.7% deficit).
Inclusion of the valuation movement and other unrealised items
resulted in a profit before tax (IFRS) of GBP16.54 million (30(th)
September 2016: GBP3.78 million loss).
Net asset value per share (EPRA) increased over the six month
period by 3.0% to 312 pence (31(st) March 2017: 303 pence). Net
asset value per share (EPRA NNNAV) increased by 3.9% to 296 pence
(31(st) March 2017: 285 pence).
Debt facilities increased by GBP5.00 million to GBP180.00
million following loan refinancing.
The Board has declared an interim dividend up 3.7% to 2.8 pence
per share (2016: 2.7 pence).
Overview
Our strategic objective of unlocking the substantial income
potential from our portfolio has made significant progress over the
period, delivering increased profits and generating shareholder
value.
Implementation of asset management and development initiatives,
particularly in respect of acquisitions made with the proceeds of
our capital raising in 2014, continued to enhance the scale and
quality of the portfolio, generating an 8.2% increase in net
property income over the period and a 2.7% valuation surplus. As a
result, adjusted profit, our measure of recurring profits,
increased by 6.2% and net asset value per share (EPRA NAV) by
3.0%.
The letting of the whole of our recently completed development
at 9 Greyfriars Road, Reading (39,620 sq ft) at a premium to the
March 2017 ERV was an excellent result, and we will benefit from a
full contribution to portfolio income in future periods. The
letting is covered in more detail below, but the contracted rent
achieved of GBP1.21 million pa was the most significant
contribution to the 5.3% increase in portfolio contracted rental
income, which totalled GBP24.66 million pa at the period end.
This activity also contributed to a further uplift in the
potential rental value of the portfolio (ERV), which increased by
4.3% to GBP34.08 million pa.
We are therefore delivering on what we set out to achieve in
2014, with a further increase in contracted rents and plenty more
to deliver from the substantial 38.2% (GBP9.43 million pa)
portfolio reversion.
Market Review
Market conditions over the period have remained stable, despite
the outcome of the General Election and the continuing uncertainty
regarding the UK's exit from the European Union. The attraction of
income yield and favourable exchange rate benefits have produced
competition from a wide range of UK and overseas investors at a
time of limited income opportunities, helping underpin capital
values.
As the UK property market matures following its rapid recovery
post-recession, we anticipate an increasing differential in value
between assets with secure income and those with active management
opportunities. The latter provide greater scope for us to add value
through our proven active management, refurbishment and development
skills and we continue to monitor the market for such opportunities
and appraise prospects that meet our criteria.
Across our occupier markets, rental values levelled out over the
period as demand remained generally steady against a backdrop of
low supply levels. However, there has been a reduction in the
number of larger office lettings across London and South East
markets, attributed to the uncertainty surrounding Brexit. This has
resulted in lower total letting volumes, although building
obsolescence, combined with lease expiries, has maintained the
volume of small and mid-size leasing activity.
Supply constraints remain particularly relevant within the South
East office market, which accounts for 58.4% of our portfolio. The
supply of new buildings at the end of the period totalled 2.44
million sq ft, representing a low vacancy rate of 2.9%. This
increases to 7.14 million sq ft (8.4%) with the inclusion of Grade
A product, albeit with variations between centres.
For the year to date, leasing activity within this market
totalled 1.39 million sq ft. Although this is 17.0% lower than at
the same point last year, activity below 80,000 sq ft is 3.4%
higher at 1.32 million sq ft. The concentration of leasing activity
in this smaller size band is typically around 80%, and is a market
trend that we have tracked for many years. As a result, our
portfolio is positioned to meet this market demand with the average
size of our nineteen assets being 40,500 sq ft.
The level of named occupier demand for South East offices ended
the period at 3.76 million sq ft, 4.8% higher than at the same
point last year. This indicates that, despite political and
economic challenges, there remains continued demand for modern
business space. In addition, the opening of the Elizabeth Line
(Crossrail) in 2018 will improve travel times and ease of access
between the M4 corridor and central London, which is expected to
add to the sector's attraction. With our South East focus, this is
likely to improve the reach and appeal of many of our assets.
Within the City of London, where our redevelopment of 30 Lombard
Street, EC3 (58,000 sq ft) is set to complete in mid 2018, supply
levels reduced slightly over the period and demand remained ahead
of the five year average. The supply of available floorspace in the
City, totalling 6.80 million sq ft, is 14.5% below the five year
average. For new and refurbished floorspace in the City core, this
reduces to 1.90 million sq ft, representing a low vacancy rate of
3.3%. The development pipeline in the core is set to deliver 3.31
million sq ft by the end of 2018, of which 41.7% is already
pre-let, leaving 1.93 million sq ft available. When set against
average annual take up of 1.66 million sq ft in the core and named
active demand of 4.10 million sq ft (30(th) September 2016: 3.65
million sq ft) across the City, rental values have been supported
by the current levels of supply and demand in the market.
The South East industrial sector remains active, enhanced by the
increasing shift to multi-channel retailing. Occupier requirements
are focused on new units, with over 75.0% of take-up in the year to
date classified as new and Grade A. Supply constraints have driven
rental growth and investor demand, which has made this the best
performing sector of the period. This is reflected in the valuation
performance of our industrial portfolio and is also encouraging for
our proposed redevelopment at Brunel Road, Theale, which is
referred to below.
Portfolio Income and Asset Management
Over the period we completed eight new lettings with a combined
contracted rental value of GBP1.46 million pa, 2.9% ahead of ERV,
with the largest being the letting of 9 Greyfriars Road, Reading
(39,620 sq ft). The building was let as a whole to a serviced
office operator on a 15 year institutional lease, with a tenant
break clause at the end of year ten. This generated an 18.2% profit
on cost for the scheme and provides us with a high quality
investment property in an area which is set to improve following
completion of the Elizabeth Line, at a yield on cost of 7.9%.
Elsewhere we bettered rental assumptions at Crown Square, Woking
and 329 Bracknell where the refurbishment of smaller suites has
been well received by the market. Refurbishment work to office
floor space and the common areas at Portsoken House, EC3 and The
Mille, Brentford has also made good progress. Marketing of the
32,350 sq ft vacant space within these two buildings, which
accounts for 53.4% of our total portfolio void by rental value
(excluding developments), is progressing well and generating
enquiries at both locations.
With the letting progress achieved over the period, portfolio
occupancy increased from 94.5% to 94.6%, and from 77.3% to 81.3%
with the inclusion of the development properties referred to
below.
Since the end of the period, we have completed the freehold
disposal of Albion House, Newbury (6,720 sq ft), having exchanged
contracts at the end of September 2017. The price of GBP1.43
million was 43.0% ahead of the 31(st) March 2017 book value, with
the substantial uplift achieved following a lease renewal with the
existing office occupier. We continue to review the sale of
smaller, management intensive assets alongside those which we
regard as more mature and non-core.
Development Programme
With the completion and letting of 9 Greyfriars Road, our two
remaining development properties with the opportunity to unlock
value through lettings are Prospero, Redhill (50,370 sq ft) and 30
Lombard Street.
Having secured the letting of the top floor (10,643 sq ft) at
Prospero shortly after completion, our marketing campaign generated
further interest over the period, resulting in the letting of the
ground floor (11,537 sq ft) in October 2017. This recent letting
has taken occupancy to 46.0% and we remain encouraged by leads on
the remaining two floors. As with the top floor, the ground floor
tenant has committed to a 15 year lease with a tenant break option
at year 10. The rent achieved was GBP0.35 million pa, equivalent to
ERV of GBP30 psf.
At 30 Lombard Street, the building remains on programme for
completion in mid-2018. Completion of the steel frame was marked by
a topping out ceremony in October and installation of the external
cladding is underway. It will provide regular floorplates over
lower ground and nine upper floors in a prime City location, with
spectacular views from a generous terrace at top floor level. The
marketing campaign, which was launched in the summer, has generated
a range of varied enquiries at this early stage.
The next scheme in the pipeline is the refurbishment or
redevelopment of Brunel Road, Theale - a 96,850 sq ft warehouse
next to Junction 12 of the M4 at Theale, on the western outskirts
of Reading. Planning consent was granted in October to increase the
floorspace on site by up to 38.8% through the redevelopment of the
existing building into either a single modern high bay warehouse of
134,430 sq ft or four detached units totalling 117,700 sq ft. We
are now carrying out design and preparatory works to be able to
commence demolition on lease expiry in spring 2018. Given the high
demand this sector is experiencing, and the leads that our early
marketing has generated, this will be on a speculative basis unless
we have secured a pre-let in advance.
Valuation
Knight Frank LLP was appointed as Group Valuer after the March
2017 year end valuation, replacing Mellersh & Harding who had
provided many years of exceptional service. Knight Frank's
extensive strength and depth across our markets leaves them well
placed to assist with the increasing size of the portfolio and to
reaffirm the value of the Group's assets. They are also an accepted
valuer by our lending banks, which will reduce the additional cost
of valuations for loan purposes.
Knight Frank's valuation of the thirty six assets within the
Group's portfolio at 30(th) September 2017 totalled GBP452.65
million (31(st) March 2017: GBP429.92 million). This resulted in a
2.7% (GBP11.94 million) surplus, ahead of the 2.2% increase in the
IPD Monthly (All Property) Index.
On a sector basis, our South East office assets (58.4% of the
portfolio by value) achieved capital growth of 2.4% compared to IPD
of 1.8% and ERV growth of 4.4% compared to IPD of 1.3%. Our South
East industrial assets (18.1% of the portfolio) also out performed
IPD with capital growth of 10.0% compared with IPD of 7.6% and
rental growth of 7.6% compared with IPD of 4.7%. In both sectors,
our active management delivered rental growth ahead of the market,
which contributed to the out-performance.
With our London office assets (18.9% of the portfolio), rental
growth of 5.2% was also well ahead of IPD of 0.2% but capital
values were 1.1% lower compared with an IPD surplus of 1.5%. This
mainly reflected refurbishment costs at Portsoken House, EC3, where
valuation gains should follow once improved rental values are
achieved on the letting of the refurbished floorspace.
The value of the two remaining development properties was down
by GBP0.78 million (-1.6%), as letting gains at Prospero were
offset by a slight outward yield shift at 30 Lombard Street. Future
lettings at both properties provide the potential for substantial
valuation gains.
These segments combined to give a portfolio initial yield of
4.5% (31(st) March 2017: 4.6%) increasing to 5.1% on the expiry of
letting incentives (31(st) March 2017: 5.1%) and a net equivalent
yield 6.1% (31(st) March 2017: 6.1%). At ERV (net) the reversionary
yield would be 7.1% (31(st) March 2017: 7.1%).
With the exception of our industrial properties where the
valuation also benefited from lower market yields, gains were
generally achieved as a result of improving the quality and rental
value of our assets through refurbishment and other management
initiatives. These rental and capital gains generated a total
portfolio return (excluding developments) of 5.8%, ahead of the
4.5% IPD return.
The most substantial increase was at 9 Greyfriars Road, where
the letting generated a 34.7% (GBP4.95 million) surplus for the
period. This result supports our strategic rationale to progress
with a speculative refurbishment and highlights the gains that can
be achieved with the delivery of a high quality asset in a well
chosen location.
Finance
Adjusted profit before tax increased by 6.2% to GBP4.70 million
(30(th) September 2016: GBP4.42 million) primarily due to gains in
gross rental income which increased by 4.7% to GBP10.90 million
(30(th) September 2016: GBP10.42 million). Non-recoverable property
costs of GBP0.98 million were lower than the corresponding period
last year (30(th) September 2016: GBP1.24 million), reflecting
asset management initiatives to reduce these costs. As a result,
net rental income increased by 8.2% (GBP0.75 million) to GBP9.92
million (30(th) September 2016: GBP9.17 million).
Administration costs of GBP3.13 million for the period were
marginally higher than the corresponding period last year (30(th)
September 2016: GBP2.98 million).
Net finance costs increased by GBP0.38 million to GBP2.49
million (30(th) September 2016: GBP2.11 million) as a result of
higher levels of debt and a lower level of capitalised interest
with only one development project under construction. Both these
increases were partially offset by the beneficial impact of
reducing the notional value of the remaining interest rate swap by
GBP12.00 million to GBP33.00 million in December 2016.
IFRS profit before tax for the period, prior to any adjustments
for unrealised items, shows a GBP16.54 million profit (30(th)
September 2016: GBP3.78 million loss). This includes the
revaluation surplus and the positive movement in the mark to market
valuation of the interest rate swap.
IFRS net asset value increased by GBP11.03 million to GBP281.82
million over the period, mainly due to the GBP11.94 million
valuation surplus. EPRA net asset value per share, which excludes
the negative value of the interest rate swap, increased by 3.0% to
312 pence (31(st) March 2017: 303 pence).
Drawn debt increased to GBP149.00 million (31(st) March 2017:
GBP136.00 million), primarily due to development and refurbishment
expenditure. The ratio of drawn debt to portfolio value (LTV) was
32.9% (31(st) March 2017: 31.6%). As anticipated, the average cost
of debt reduced during the period to 3.9% (31(st) March 2017: 4.4%)
as the proportion of floating rate debt increased in relation to
the more expensive fixed rate debt.
Having renewed three of our debt facilities in 2015, we were
pleased to complete the refinancing of the fourth in August 2017.
This was achieved with the existing lender, providing a five year
GBP40.00 million revolving facility which has increased the Group's
total available facilities from GBP175.00 million to GBP180.00
million.
The Board
As reported at the end of the last financial year, Nigel Aslin
and Viscount Lifford both retired during the period. They were an
integral part of the Group's successful management through the
recession and the subsequent period of growth, and I would like to
thank them for their invaluable counsel and support over the
years.
Dividend
The Board is pleased to declare an interim dividend of 2.8 pence
per share, an increase of 3.7% over the level of dividend paid for
the same period last year. This will be paid as an ordinary
dividend on 4(th) January 2018.
Outlook
After a successful start to the year, further crystallisation of
the substantial income potential within our portfolio provides
encouraging scope for additional income and capital gains. The pace
of the release of this reversionary potential remains dependent on
the continued strength of occupier demand for our assets, and in
particular our development and refurbishment projects.
It remains to be seen how strong the forecast economic headwinds
prove to be, but with our high quality portfolio of diverse assets
and our focus on the resilient markets of London and the South
East, we remain well placed to deliver further shareholder value
from the portfolio with the ongoing implementation of our clear
strategy for growth.
Richard Grainger
Chairman
CONSOLIDATED PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Six months to 30(th) September 2017
Notes 6 months 6 months 12months
to 30(th) to 30(th) to 31(st)
September September March
2017 (Unaudited) 2016 (Unaudited) 2017 (Audited)
GBP'000 GBP'000 GBP'000
================================================== ====== ================== ================== ================
Gross rents and service charges receivable 12,574 12,113 24,112
================================================== ====== ================== ================== ================
Other property income - - 1,648
================================================== ====== ================== ================== ================
Direct property outgoings (2,650) (2,939) (5,888)
================================================== ====== ================== ================== ================
Net rental income from investment properties 3 9,924 9,174 19,872
================================================== ====== ================== ================== ================
Administration costs (3,133) (2,984) (5,795)
================================================== ====== ================== ================== ================
Operating profit before gains on investment
properties 6,791 6,190 14,077
================================================== ====== ================== ================== ================
Revaluation of investment properties 6 10,619 (3,268) 7,617
================================================== ====== ================== ================== ================
Operating profit 17,410 2,922 21,694
================================================== ====== ================== ================== ================
Finance costs 5 (2,491) (6,706) (4,523)
================================================== ====== ================== ================== ================
Finance income 5 1,618 6 423
================================================== ====== ================== ================== ================
Profit/(loss) before taxation 16,537 (3,778) 17,594
================================================== ====== ================== ================== ================
Taxation - - -
================================================== ====== ================== ================== ================
Profit/(loss) for the period 16,537 (3,778) 17,594
================================================== ====== ================== ================== ================
Other comprehensive income:
================================================== ====== ================== ================== ================
Items that will not be reclassified subsequently
to profit or loss
================================================== ====== ================== ================== ================
Actuarial movement on defined benefit pension
scheme - - (628)
================================================== ====== ================== ================== ================
Total comprehensive income for the year 16,537 (3,778) 16,966
================================================== ====== ================== ================== ================
Earnings per share 4
================================================== ====== ================== ================== ================
Basic 17.61p (4.04)p 18.78p
================================================== ====== ================== ================== ================
Diluted 17.49p (4.04)p 18.63p
================================================== ====== ================== ================== ================
Adjusted earnings per share figures are
shown in note 4.
================================================== ====== ================== ================== ================
GROUP STATEMENT OF FINANCIAL POSITION
As at 30(th) September 2017
Notes 6 months 6 months 12months
to 30(th) to 30(th) to 31(st)
September September March 2017
Non-current assets 2017 (Unaudited) 2016 (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
=========================================== ====== ================== ================== ============
Valuation as reported by the valuers 452,650 413,875 429,915
=========================================== ====== ================== ================== ============
Adjustment for rents recognised in advance
under SIC 15 (7,305) (6,072) (5,987)
=========================================== ====== ================== ================== ============
Assets held for sale (18,100) - (5,500)
=========================================== ====== ================== ================== ============
Adjustment for grossing up of headleases 4,405 3,725 4,405
=========================================== ====== ================== ================== ============
6 431,650 411,528 422,833
=========================================== ====== ================== ================== ============
Plant and equipment 57 76 62
=========================================== ====== ================== ================== ============
Total non-current assets 431,707 411,604 422,895
=========================================== ====== ================== ================== ============
Current assets
Trade and other receivables 8,378 7,972 6,916
============================= ======== ======== ========
Assets held for sale 6 18,100 - 5,500
============================= ======== ======== ========
Cash and cash equivalents 1,838 2,938 4,485
============================= ======== ======== ========
Total current assets 28,316 10,910 16,901
============================= ======== ======== ========
Total assets 460,023 422,514 439,796
============================= ======== ======== ========
Current liabilities
Loans and other borrowings - - (34,973)
============================ ======== ========= =========
Trade and other payables (9,868) (9,380) (11,298)
============================ ======== ========= =========
Finance lease liabilities (285) (286) (285)
============================ ======== ========= =========
Interest rate derivatives 7 (1,400) (2,944) (2,159)
============================ ======== ========= =========
Total current liabilities (11,553) (12,610) (48,715)
============================ ======== ========= =========
Non-current liabilities
Loans and other borrowings (146,468) (127,903) (99,127)
=============================== ========== ========== ==========
Pension fund deficit (2,164) (1,719) (2,284)
=============================== ========== ========== ==========
Finance lease liabilities (4,120) (4,120) (4,120)
=============================== ========== ========== ==========
Interest rate derivatives 7 (13,901) (24,054) (14,758)
=============================== ========== ========== ==========
Total non-current liabilities (166,653) (157,796) (120,289)
=============================== ========== ========== ==========
Total liabilities (178,206) (170,406) (169,004)
=============================== ========== ========== ==========
Net assets 281,817 252,108 270,792
=============================== ========== ========== ==========
Equity
Called up share capital 18,791 18,762 18,762
================================ ======== ======== ========
Share premium account 79,235 78,929 78,929
================================ ======== ======== ========
Retained earnings 55,243 47,374 55,172
================================ ======== ======== ========
Revaluation reserve 128,548 107,043 117,929
================================ ======== ======== ========
Total equity 281,817 252,108 270,792
================================ ======== ======== ========
Net asset value per share 9 300p 269p 289p
================================ ======== ======== ========
EPRA net asset value per share 9 312p 295p 303p
================================ ======== ======== ========
GROUP CASH FLOW STATEMENT
Six months to 30(th) September 2017
6 months 6 months 12months
to 30(th) to 30(th) to 31(st)
September September March 2017
Operating activities 2017 (Unaudited) 2016 (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
===================================================== ================== ================== ============
Profit/(loss) before taxation 16,537 (3,778) 17,594
===================================================== ================== ================== ============
Adjustments for:
===================================================== ================== ================== ============
Depreciation 17 15 32
===================================================== ================== ================== ============
Other non-cash movements 669 603 1,308
===================================================== ================== ================== ============
Movement in revaluation of investment properties (10,619) 3,269 (7,617)
===================================================== ================== ================== ============
Net finance costs 873 6,700 4,100
===================================================== ================== ================== ============
Cash flow from operations before changes in working
capital 7,477 6,809 15,417
===================================================== ================== ================== ============
Increase/(decrease) in debtors (1,511) 8,568 8,339
===================================================== ================== ================== ============
Decrease in creditors (1,489) (2,756) (1,178)
===================================================== ================== ================== ============
Cash generated from operations 4,477 12,621 22,578
===================================================== ================== ================== ============
Interest paid (2,895) (3,287) (6,055)
===================================================== ================== ================== ============
Interest received 1 6 7
===================================================== ================== ================== ============
Cash flows from operating activities 1,583 9,340 16,530
===================================================== ================== ================== ============
Investing activities
Purchase and development of investment properties (10,368) (14,453) (18,478)
=================================================== ========= ========= =========
Purchase of other fixed assets (12) - (3)
=================================================== ========= ========= =========
Cash flows from investing activities (10,380) (14,453) (18,481)
=================================================== ========= ========= =========
Financing activities
Increase in borrowings 12,060 13,995 19,989
====================================== ======== ======== ========
Equity dividends paid (5,910) (5,683) (8,216)
====================================== ======== ======== ========
Swap cancellation fee - - (5,076)
====================================== ======== ======== ========
Cash flows from financing activities 6,150 8,312 6,697
====================================== ======== ======== ========
Net (decrease)/increase in cash and cash equivalents (2,647) 3,199 4,746
====================================================== ======== ====== ======
Cash and cash equivalents at the beginning of the
period 4,485 (261) (261)
====================================================== ======== ====== ======
Cash and cash equivalents at end of the period 1,838 2,938 4,485
====================================================== ======== ====== ======
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months to 30(th) September 2017
Attributable to equity holders of the parent company
Share Share Revaluation Retained Total
capital premium reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- --------- --------- ------------ ---------- ---------
At 1(st) April 2016 18,632 77,708 110,312 54,571 261,223
----------------------------------- --------- --------- ------------ ---------- ---------
(Loss) for the period - - - (3,778) (3,778)
----------------------------------- --------- --------- ------------ ---------- ---------
Other comprehensive income:
----------------------------------- --------- --------- ------------ ---------- ---------
Transfer surplus on revaluation
of properties - - (3,269) 3,269 -
----------------------------------- --------- --------- ------------ ---------- ---------
Total comprehensive income in
the period - - (3,269) (509) (3,778)
----------------------------------- --------- --------- ------------ ---------- ---------
Issue of new shares net of costs 130 1,221 - (1,351) -
----------------------------------- --------- --------- ------------ ---------- ---------
Dividends paid in period - - - (5,683) (5,683)
----------------------------------- --------- --------- ------------ ---------- ---------
Cost of share based payments - - - 346 346
----------------------------------- --------- --------- ------------ ---------- ---------
At 30(th) September 2016 18,762 78,929 107,043 47,374 252,108
----------------------------------- --------- --------- ------------ ---------- ---------
Profit for the period - - - 21,372 21,372
----------------------------------- --------- --------- ------------ ---------- ---------
Other comprehensive income:
----------------------------------- --------- --------- ------------ ---------- ---------
Transfer surplus on revaluation
of properties - - 10,886 (10,886) -
----------------------------------- --------- --------- ------------ ---------- ---------
Actuarial loss on defined benefit
pension scheme - - - (628) (628)
----------------------------------- --------- --------- ------------ ---------- ---------
Total comprehensive income in
the period - - 10,886 9,858 20,744
----------------------------------- --------- --------- ------------ ---------- ---------
Dividends paid in period - - - (2,533) (2,533)
----------------------------------- --------- --------- ------------ ---------- ---------
Deferred bonus - - - 128 128
----------------------------------- --------- --------- ------------ ---------- ---------
Cost of share based payments - - - 345 345
----------------------------------- --------- --------- ------------ ---------- ---------
At 31st March 2017 18,762 78,929 117,929 55,172 270,792
----------------------------------- --------- --------- ------------ ---------- ---------
Profit for the period - - - 16,537 16,537
---------------------------------- ------- ------- -------- --------- --------
Other comprehensive income:
---------------------------------- ------- ------- -------- --------- --------
Transfer surplus on revaluation
of properties - - 10,619 (10,619) -
---------------------------------- ------- ------- -------- --------- --------
Total comprehensive income in
the period - - 10,619 5,918 16,537
---------------------------------- ------- ------- -------- --------- --------
Issue of new shares net of costs 29 306 - (335) -
---------------------------------- ------- ------- -------- --------- --------
Dividends paid in period - - - (5,910) (5,910)
---------------------------------- ------- ------- -------- --------- --------
Cost of share based payments - - - 397 397
---------------------------------- ------- ------- -------- --------- --------
Other - - - 1 1
---------------------------------- ------- ------- -------- --------- --------
At 30(th) September 2017 18,791 79,235 128,548 55,243 281,817
---------------------------------- ------- ------- -------- --------- --------
NOTES TO THE FINANCIAL STATEMENTS
Six months to 30(th) September 2017
1 Accounting policies
Basis of preparation
This condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by
the European Union.
As required by the Disclosure and Transparency Rules of the
Financial Conduct Authority, the financial statements have been
prepared applying the accounting policies and presentation that
were applied in the preparation of the Company's published
consolidated financial statements for the year ended 31(st) March
2017.
The comparative figures for the financial year ended 31(st)
March 2017 are not the Company's statutory accounts for that
financial year. Those accounts have been reported on by the
Company's auditor and delivered to the Registrar of Companies. The
report of the auditor was (i) unqualified, (ii) did not include a
reference to any matter to which the auditor drew attention by way
of emphasis without qualifying their report, and (iii) did not
contain a statement under Section 498 (2) or (3) of the Companies
Act 2006.
The Board approved the unaudited interim financial statements on
10(th) November 2017.
Identification of business risks
The Group's principal risks and uncertainties are consistent
with those noted in the Annual Report for the year ended 31(st)
March 2017 which include compliance with financial covenants on
bank borrowing, tenant default, liquidity, interest rate hedging
instruments and interest rate movements on bank borrowing. The
Directors consider that the significant areas of judgement made by
management that have significant effect on the Group's performance
and estimates with a significant risk of material adjustment are
valuation of investment properties and financial instruments. These
are unchanged from those identified in the Annual Report for the
year ended 31(st) March 2017.
Going concern
The Interim Report has been prepared on a going concern basis,
which assumes the Group will be able to meet its liabilities as
they fall due, for the foreseeable future. The Directors have
prepared cash flow forecasts which show that the cash generated
from operating activities will provide sufficient cash headroom for
the foreseeable future.
Following a refinancing of one of the four banking facilities in
the period, the Group does not have any borrowing facilities
expiring in the next 12 months. The Group is in full compliance
with its borrowing covenants at 30(th) September 2017 and is
expected to be in compliance for the next 12 months.
2 Adjusted profit before taxation
Adjusted profit before taxation is the Group's preferred measure
to provide a clearer picture of recurring profits from core rental
activities before taxation, adjusted as set out below.
6 months 6 months 12months
to 30(th) to 30(th) to 31(st)
September September March 2017
2017 (Unaudited) 2016 (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
================================================ ================== ================== ============
Profit/(loss) before taxation 16,537 (3,778) 17,594
================================================ ================== ================== ============
Change in fair value of derivatives (1,617) 4,588 (415)
================================================ ================== ================== ============
Movement in valuation of investment properties (10,619) 3,269 (7,617)
================================================ ================== ================== ============
Other property income - - (1,648)
================================================ ================== ================== ============
IFRS 2 adjustment to share based payments 397 346 691
================================================ ================== ================== ============
Adjusted profit before taxation 4,698 4,425 8,605
================================================ ================== ================== ============
3 Net rental income from investment properties
6 months 6 months 12months
to 30(th) to 30(th) to 31(st)
September September March 2017
2017 (Unaudited) 2016 (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
==================================================== ================== ================== ============
Gross rents receivable 10,642 10,212 20,672
==================================================== ================== ================== ============
SIC 15 adjustment (spreading of rental incentives) 259 204 118
==================================================== ================== ================== ============
Gross rental income 10,901 10,416 20,790
==================================================== ================== ================== ============
Service charges receivable 1,673 1,697 3,322
==================================================== ================== ================== ============
12,574 12,113 24,112
==================================================== ================== ================== ============
Other property income - - 1,648
==================================================== ================== ================== ============
Direct property outgoings (2,650) (2,939) (5,888)
==================================================== ================== ================== ============
Net rental income 9,924 9,174 19,872
==================================================== ================== ================== ============
Rent receivable under the terms of the leases is adjusted, in
accordance with SIC 15, for the effect of any incentives given.
4 Earnings per share
6 months 6 months 12months
to 30(th) to 30(th) to 31(st)
September September March 2017
2017 (Unaudited) 2016 (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
================================================== ================== ================== ============
Basic earnings/(loss) per share 17.61 (4.04) 18.78
================================================== ================== ================== ============
Change in fair value of derivatives (1.72) 4.91 (0.44)
================================================== ================== ================== ============
Movement in revaluation of investment properties (11.31) 3.49 (8.13)
================================================== ================== ================== ============
Other property income - - (1.76)
================================================== ================== ================== ============
Adjusted profit for share based payments 0.42 0.37 0.74
================================================== ================== ================== ============
Adjusted earnings per share 5.00 4.73 9.19
================================================== ================== ================== ============
Basic earnings per share on ordinary shares is calculated on the
profit in the half year of GBP16,537,144 (30(th) September 2016:
loss GBP3,778,471) and 31(st) March 2017: profit GBP17,594,000) and
93,895,804 (30(th) September 2016 93,511,768 and 31(st) March 2017:
93,659,703) shares, being the weighted average number of ordinary
shares in issue during the period.
6 months 6 months to 12months to
to 30(th) 30(th) September 31(st)
September 2016 March 2017
2017 Number of shares Number of
Number of shares
Shares
============================================= =========== ================== ============
Weighted average number of ordinary shares
in issue 93,895,804 93,511,768 93,659,703
============================================= =========== ================== ============
Number of shares under option 1,524,499 1,346,921 1,453,249
============================================= =========== ================== ============
Number of shares that would have been
issued at fair value (872,452) (481,332) (656,745)
============================================= =========== ================== ============
Diluted weighted average number of ordinary
shares in issue 94,547,851 94,377,357 94,456,207
============================================= =========== ================== ============
6 months 6 months 12months
to 30(th) to 30(th) to
September September 31(st)
2017 2016 March 2017
P P P
================================================== =========== =========== ============
Basic earnings/(loss) per share 17.61 (4.04) 18.78
================================================== =========== =========== ============
Effect of dilutive potential ordinary shares
under option (0.12) - (0.15)
================================================== =========== =========== ============
Diluted (loss)/earnings per share 17.49 (4.04) 18.63
================================================== =========== =========== ============
Change in fair value of derivatives (1.71) 4.86 (0.44)
================================================== =========== =========== ============
Movement in revaluation of investment properties (11.23) 3.46 (8.07)
================================================== =========== =========== ============
Other property income - - (1.74)
================================================== =========== =========== ============
EPRA diluted earnings per share 4.55 4.28 8.38
================================================== =========== =========== ============
Diluted earnings per share is calculated on the same profit
after tax and on the weighted average diluted number of shares in
issue during the year of 94,547,851 (30(th) September 2016:
94,377,357 and 31(st) March 2017: 94,456,207) shares, which takes
into account the number of potential ordinary shares under option.
No account has been taken in diluted earnings per share of
potential ordinary shares in the period to 30(th) September 2017
where their conversion to ordinary shares would decrease the profit
per share but is included to arrive at adjusted diluted earnings
per share.
Adjusted earnings per share excludes the after tax effect of
profit from the disposal of investment properties, surrender
premiums received (if any), the change in the fair value of
derivatives and the movement in revaluation of investment
properties. The EPRA measure includes all of these adjustments,
except for surrender premiums which are added back.
5 Net finance costs
6 months 6 months 12months
to 30(th) to 30(th) to 31(st)
September September March 2017
2017 (Unaudited) 2016 (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
============================================== ================== ================== ============
Interest on bank overdraft and loans 2,648 2,736 5,269
============================================== ================== ================== ============
Commitment fee 93 186 381
============================================== ================== ================== ============
Finance lease interest on leasehold property
obligations 142 142 285
============================================== ================== ================== ============
Finance arrangement costs 308 208 410
============================================== ================== ================== ============
Fair value loss on derivatives - 4,588 -
============================================== ================== ================== ============
Capitalised interest (700) (1,154) (1,822)
============================================== ================== ================== ============
Finance expense 2,491 6,706 4,523
============================================== ================== ================== ============
Fair value gain on derivatives (1,617) - (415)
============================================== ================== ================== ============
Interest receivable (1) (6) (8)
============================================== ================== ================== ============
Finance income (1,618) (6) (423)
============================================== ================== ================== ============
Net finance costs 873 6,700 4,100
============================================== ================== ================== ============
6 Investment properties
Valuation 6 months 6 months 12months
to 30(th) to 30(th) to 31(st)
September September March 2017
2017 (Unaudited) 2016 (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
===================================================== ================== ================== ============
At 1(st) April 428,333 399,046 399,046
===================================================== ================== ================== ============
Additions - development 10,798 15,770 21,671
===================================================== ================== ================== ============
Revaluation on surplus/(defecit) 10,878 (3,065) 7,074
===================================================== ================== ================== ============
Adjustment for rents recognised in advance under
SIC15 (259) (203) (118)
===================================================== ================== ================== ============
Head lease adjustment - - 661
===================================================== ================== ================== ============
Amortisation of grossed up headlease liabilities - (20) (1)
===================================================== ================== ================== ============
Book value 449,750 411,528 428,333
===================================================== ================== ================== ============
Adjustment for grossing up of headlease liabilities (4,405) (3,725) (4,405)
----------------------------------------------------- ------------------ ------------------ ------------
Adjustment for rents recognised in advance under
SIC15 7,305 6,072 5,987
===================================================== ================== ================== ============
Valuation 452,650 413,875 429,915
===================================================== ================== ================== ============
In accordance with the Group's accounting policy on properties
there was an external valuation at 30(th) September 2017. These
valuations, were carried out by Knight Frank LLP (30(th) September
2016 and 31(st) March 2017: Mellersh and Harding LLP). All
valuations were carried out in accordance with the Appraisal and
Valuation Standards of RICS, on an open market basis.
7 Liabilities
During the period the Group refinanced its GBP35 million
revolving facility due to expire in November 2017 with a GBP40
million secured revolving facility repayable in 2022. This has
increased the Group's total debt facilities to GBP180 million.
The Group adopts a policy of ensuring that its exposure to
interest rate fluctuations is mitigated by the use of financial
instruments. Interest rate swaps have been entered into to achieve
this purpose.
The Group does not hold or issue derivative financial
instruments for trading purposes.
As at (1) Next Fair value Fair value
30(th) September Credit Amount before (2) BCVA GBP'000
2017 (Unaudited) Maturity break GBP'000 Rate BCVA
------------------- ------------ ---------- ----------- ------- ------------- ----------- -------------
Interest Sept
rate swaps Sept 2032 2022 GBP33,000 5.17% (16,487) 1,186 (15,301)
As at (1) Next
30(th) September Credit Fair value Fair value
2016 (Unaudited) break Amount before (2) BCVA GBP'000
Maturity GBP'000 Rate BCVA
------------------- ------------ ---------- ----------- ------- ------------- ----------- -------------
Interest Sept
rate swaps Sept 2032 2022 GBP45,000 5.17% (29,569) 2,571 (26,998)
As at (1) Next
Credit
break
31(st) March Fair value Fair value
2017 before GBP'000
(Audited) Amount BCVA (2) BCVA
Maturity GBP'000 Rate
------------------- ------------ ---------- ----------- ------- ------------- ----------- -------------
Interest Sept
rate swaps Sept 2032 2022 GBP33,000 5.17% (18,311) 1,393 (16,917)
(1) Credit breaks are triggered by the bank and require the
prevailing mark to market value to be paid or received.
(2) BCVA - Bilateral Credit Valuation Adjustment is required by
IFRS 13 to be incorporated in the mark to market valuations.
The fair value of interest rate derivatives has been split
between current and non-current liabilities according to the
expected timing of cashflows as follows:
Group and Company
6 months 6 months 12months
to 30(th) to 30(th) to 31(st)
September September March 2017
2017 (Unaudited) 2016 (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
============= ================== ================== ============
Current (1,400) (2,944) (2,159)
============= ================== ================== ============
Non-current (13,901) (24,054) (14,758)
============= ================== ================== ============
(15,301) (26,998) (16,917)
============= ================== ================== ============
The Group does not hedge account its interest rate derivatives
and states them at fair value in the statement of financial
position based on quotations from the Group's banks, any movement
passing through the Consolidated Profit or Loss and other
Comprehensive Income. All financial liabilities are classed as
level 2 in accordance with the fair value hierarchy stated in IFRS
13. The fair value of these level 2 contracts are estimated by
discounting expected future cash flows using current market
interest rates and yield curve over the remaining term of the
instrument.
There are no liabilities at maturity and no material
unrecognised gains or losses.
8 Dividends
6 months 6 months 12months
to 30(th) to 30(th) to 31(st)
September September March 2017
Final dividend 2017 (Unaudited) 2016 (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
============================== ================== ================== ============
Year ended 31(st) March 2017 5,910 - -
============================== ================== ================== ============
Year ended 31(st) March 2016 - 5,683 5,683
============================== ================== ================== ============
Interim dividend
============================== ================== ================== ============
Year ended 31(st) March 2016 - - 2,533
============================== ================== ================== ============
5,910 5,683 8,216
============================== ================== ================== ============
The final dividend of 6.3 pence per share (GBP5,910,000) for the
year ended 31(st) March 2017 was paid on 27(th) July 2017.
The directors have declared an interim dividend of 2.8 pence per
share (2016: 2.7 pence per share).
Since becoming a REIT, the Group is required to distribute at
least 90% of qualifying income profits each year as a Property
Income Distribution (PID), and the interim dividend of 2.8 pence
per share will be paid as an ordinary dividend. Further REIT
information is available on the Company's website.
9 Net asset value per share
30(th) September 2017
======================================== =================================
Net Shares Net
assets '000 asset value
GBP'000 per share
P
======================================== ========= ======= =============
Basic 281,817 93,955 300
======================================== ========= ======= =============
Number of shares under option 1,259 1,612 (4)
======================================== ========= ======= =============
Diluted/EPRA NNNAV 283,076 95,567 296
======================================== ========= ======= =============
Adjusted for fair value of derivatives 15,301 - 16
======================================== ========= ======= =============
EPRA NAV 298,377 95,567 312
======================================== ========= ======= =============
30(th) September 2016
======================================== =================================
Net Shares Net
assets '000 asset value
GBP'000 per share
P
======================================== ========= ======= =============
Basic 252,108 93,808 269
======================================== ========= ======= =============
Number of shares under option 1,035 1,221 (3)
======================================== ========= ======= =============
Diluted/EPRA NNNAV 253,143 95,029 266
======================================== ========= ======= =============
Adjusted for fair value of derivatives 26,998 - 29
======================================== ========= ======= =============
EPRA NAV 280,141 95,029 295
======================================== ========= ======= =============
31(st) March 2017
======================================== =================================
Net Shares Net
assets '000 asset value
GBP'000 per share
P
======================================== ========= ======= =============
Basic 270,792 93,808 289
======================================== ========= ======= =============
Number of shares under option 1,036 1,431 (4)
======================================== ========= ======= =============
Diluted/EPRA NNNAV 271,828 95,239 285
======================================== ========= ======= =============
Adjusted for fair value of derivatives 16,918 - 18
======================================== ========= ======= =============
EPRA NAV 288,746 95,239 303
======================================== ========= ======= =============
10. Disclaimer
The Interim Report of McKay Securities PLC for the six months to
30(th) September has been drawn up and presented for the purposes
of complying with English law. If any issue were to arise in
relation to any liability under or in connection with the Interim
Report for the six months to 30(th) September 2017, it would also
be determined in accordance with English law.
11. Interim Report
The Interim Report is being posted to Shareholders on 24(th)
November 2017. Copies are available to members of the public from
the Group's registered office at 20 Greyfriars Road, Reading, RG1
1NL, and on the Company's website www.mckaysecurities.plc.uk.
Statement of the Directors' Responsibilities
Six months to 30(th) September 2017
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by
the EU;
-- the interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being
an indication of important events that have occurred during the
first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
S C Perkins
Chief Executive Officer
G P Salmon
Chief Financial Officer
Independent Review Report to McKay Securities Plc
Conclusion
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 30th September 2017 which comprises consolidated
profit or loss and other comprehensive income, group statement of
financial position, consolidated statement of changes in equity,
and group cash flow statement and the related explanatory
notes.
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 30th
September 2017 is not prepared, in all material respects, in
accordance with IAS 34 Interim Financial Reporting as adopted by
the EU and the Disclosure Guidance and Transparency Rules ("the
DTR") of the UK's Financial Conduct Authority ("the UK FCA").
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 Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. We read the other information contained in the
half-yearly financial report and consider whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
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.
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 DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with International Financial
Reporting Standards as adopted by the EU. The Directors are
responsible for preparing the condensed set of financial statements
included in the half-yearly financial report in accordance with IAS
34 as adopted by the EU.
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.
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the Company in accordance with the
terms of our engagement to assist the Company in meeting the
requirements of the DTR of the UK FCA. Our review has been
undertaken so that we might state to the Company those matters we
are required to state to it in this 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
reached.
Richard Kelly
for and on behalf of
KPMG LLP
Chartered Accountants
15 Canada Square
London E14 5GL
10th November 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
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