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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| British Land Company Plc | LSE:BLND | London | Ordinary Share | GB0001367019 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 4.40 | 1.13% | 392.80 | 392.20 | 393.00 | 395.80 | 388.80 | 391.00 | 1,952,690 | 16:29:57 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Real Estate Investment Trust | 418M | -1.04B | -1.1194 | -3.51 | 3.64B |
From Apr 2019 to Apr 2024
TIDMBLND
RNS Number : 2775Y
British Land Co PLC
16 May 2016
consolidated income statement
for the year ended 31 march 2016
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2016 20152
===================== ==== =============================== ===============================
Underlying1 Capital Capital
and other Total Underlying1 and other Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
--------------------- ---- ----------- ---------- ------ ----------- ========== ======
Revenue 3 569 21 590 505 51 556
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
Costs 3 (128) (11) (139) (115) (45) (160)
--------------------- ---- ----------- ---------- ------ ----------- ========== ======
3 441 10 451 390 6 396
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
Joint ventures
and funds
(see also below) 8 135 262 397 129 597 726
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
Administrative
expenses (93) - (93) (85) - (85)
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
Valuation movement 4 - 616 616 - 884 884
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
Profit on disposal
of investment
properties and
investments - 35 35 - 20 20
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
Net financing
costs
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
- financing income 5 5 65 70 7 - 7
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
- financing charges 5 (111) (34) (145) (112) (47) (159)
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
(106) 31 (75) (105) (47) (152)
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
Profit on ordinary
activities before
taxation 377 954 1,331 329 1,460 1,789
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
Taxation 6 33 33 (24) (24)
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
Profit for the
year after taxation 1,364 1,765
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
Attributable
to non-controlling
interests 14 5 19 16 39 55
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
Attributable
to shareholders
of the Company 363 982 1,345 313 1,397 1,710
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
Earnings per
share:
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
- basic 2 131.2p 168.3p
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
- diluted 2 124.1p 167.3p
--------------------- ---- ----------- ---------- ------ ----------- ---------- ------
All results derive from continuing operations.
2016 20152
===================== ==== ============================== ==============================
Capital Capital
Underlying1 and other Total Underlying1 and other Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
--------------------- ---- ----------- ---------- ----- =========== ========== =====
Results of joint
ventures and
funds accounted
for using the
equity method
--------------------- ---- ----------- ---------- ----- ----------- ========== =====
Underlying Profit 135 - 135 129 - 129
--------------------- ---- ----------- ---------- ----- ----------- ---------- -----
Valuation movement 4 - 245 245 - 589 589
--------------------- ---- ----------- ---------- ----- ----------- ---------- -----
Profit on disposal
of investment
properties, trading
properties and
investments - 18 18 - 6 6
--------------------- ---- ----------- ---------- ----- ----------- ---------- -----
Taxation - (1) (1) - 2 2
--------------------- ---- ----------- ---------- ----- ----------- ========== =====
8 135 262 397 129 597 726
--------------------- ---- ----------- ---------- ----- =========== ========== =====
1 See definition in glossary.
2 The prior year comparatives have been restated. See note 1.
consolidated statement OF COMPREHENSIVE INCOME
for the year ended 31 march 2016
2016 2015
GBPm GBPm
------------------------------------------------- ----- -----
Profit for the year after taxation 1,364 1,765
------------------------------------------------- ----- -----
Other comprehensive income:
------------------------------------------------- ----- -----
Items that will not be reclassified subsequently
to profit or loss:
------------------------------------------------- ----- -----
Net actuarial loss on pension scheme (1) (5)
------------------------------------------------- ----- -----
Valuation movements on owner-occupied property 19 10
------------------------------------------------- ----- -----
18 5
------------------------------------------------- ----- -----
Items that may be reclassified subsequently
to profit or loss:
------------------------------------------------- ----- -----
(Losses) gains on cash flow hedges
------------------------------------------------- ----- -----
- Group (24) (71)
------------------------------------------------- ----- -----
- Joint ventures and funds (3) 3
------------------------------------------------- ----- -----
- Reclassification of items from the statement
of comprehensive income - 30
------------------------------------------------- ----- -----
(27) (38)
------------------------------------------------- ----- -----
Transferred to the income statement (cash
flow hedges)
------------------------------------------------- ----- -----
- Foreign currency derivatives 2 (11)
------------------------------------------------- ----- -----
- Interest rate derivatives 10 8
------------------------------------------------- ----- -----
12 (3)
------------------------------------------------- ----- -----
Exchange differences on translation of foreign
operations
------------------------------------------------- ----- -----
- Hedging and translation (3) 6
------------------------------------------------- ----- -----
- Other 3 (6)
------------------------------------------------- ----- -----
- -
------------------------------------------------- ----- -----
Deferred tax on items of other comprehensive
income (15) 10
------------------------------------------------- ----- -----
Other comprehensive loss for the year (12) (26)
------------------------------------------------- ----- -----
Total comprehensive income for the year 1,352 1,739
------------------------------------------------- ----- -----
Attributable to non-controlling interests 19 53
------------------------------------------------- ----- -----
Attributable to shareholders of the Company 1,333 1,686
------------------------------------------------- ----- -----
consolidated BALANCE SHEET
AS AT 31 march 2016
2016 2015
Note GBPm GBPm
================================================== ==== ======= =======
ASSETS
-------------------------------------------------- ---- ------- -------
Non-current assets
-------------------------------------------------- ---- ------- -------
Investment and development properties 7 9,643 9,120
-------------------------------------------------- ---- ------- -------
Owner-occupied property 7 95 60
-------------------------------------------------- ---- ------- -------
9,738 9,180
-------------------------------------------------- ---- ------- -------
Other non-current assets
-------------------------------------------------- ---- ------- -------
Investments in joint ventures and funds 8 3,353 2,901
-------------------------------------------------- ---- ------- -------
Other investments 9 142 379
-------------------------------------------------- ---- ------- -------
Deferred tax assets 13 3 -
-------------------------------------------------- ---- ------- -------
Interest rate and currency derivative assets 14 167 139
-------------------------------------------------- ---- ------- -------
13,403 12,599
-------------------------------------------------- ---- ------- -------
Current assets
-------------------------------------------------- ---- ------- -------
Trading properties 7 325 274
-------------------------------------------------- ---- ------- -------
Debtors 10 33 20
-------------------------------------------------- ---- ------- -------
Cash and short-term deposits 14 114 108
-------------------------------------------------- ---- ------- -------
472 402
-------------------------------------------------- ---- ------- -------
Total assets 13,875 13,001
-------------------------------------------------- ---- ------- -------
LIABILITIES
-------------------------------------------------- ---- ------- -------
Current liabilities
-------------------------------------------------- ---- ------- -------
Short-term borrowings and overdrafts 14 (74) (102)
-------------------------------------------------- ---- ------- -------
Creditors 11 (218) (261)
-------------------------------------------------- ---- ------- -------
Corporation tax (18) (9)
-------------------------------------------------- ---- ------- -------
(310) (372)
-------------------------------------------------- ---- ------- -------
Non-current liabilities
-------------------------------------------------- ---- ------- -------
Debentures and loans 14 (3,687) (3,847)
-------------------------------------------------- ---- ------- -------
Other non-current liabilities 12 (122) (79)
-------------------------------------------------- ---- ------- -------
Deferred tax liabilities 13 - (12)
-------------------------------------------------- ---- ------- -------
Interest rate and currency derivative liabilities 14 (137) (126)
-------------------------------------------------- ---- ------- -------
(3,946) (4,064)
-------------------------------------------------- ---- ------- -------
Total liabilities (4,256) (4,436)
-------------------------------------------------- ---- ------- -------
Net assets 9,619 8,565
-------------------------------------------------- ---- ------- -------
EQUITY
-------------------------------------------------- ---- ------- -------
Share capital 260 258
-------------------------------------------------- ---- ------- -------
Share premium 1,295 1,280
-------------------------------------------------- ---- ------- -------
Merger reserve 213 213
-------------------------------------------------- ---- ------- -------
Other reserves (93) (82)
-------------------------------------------------- ---- ------- -------
Retained earnings 7,667 6,563
================================================== ==== ======= =======
Equity attributable to shareholders of
the Company 9,342 8,232
================================================== ==== ======= =======
Non-controlling interests 277 333
-------------------------------------------------- ---- ------- -------
Total equity 9,619 8,565
================================================== ==== ======= =======
EPRA NAV per share* 2 919p 829p
================================================== ==== ======= =======
* As defined in glossary.
consolidated statement OF CASH FLOWS
for the year ended 31 march 2016
2016 20151
Note GBPm GBPm
============================================ ==== ===== =====
Rental income received from tenants 435 397
-------------------------------------------- ---- ----- -----
Fees and other income received 58 49
-------------------------------------------- ---- ----- -----
Operating expenses paid to suppliers and
employees (152) (128)
-------------------------------------------- ---- ===== =====
Cash generated from operations 341 318
-------------------------------------------- ---- ===== =====
Interest paid (124) (124)
-------------------------------------------- ---- ----- -----
Interest received 11 18
-------------------------------------------- ---- ----- -----
Corporation taxation repayments received 8 -
-------------------------------------------- ---- ----- -----
Distributions and other receivables from
joint ventures and funds 8 58 73
-------------------------------------------- ---- ===== =====
Net cash inflow from operating activities 294 285
-------------------------------------------- ---- ===== =====
Cash flows from investing activities
-------------------------------------------- ---- ----- -----
Development and other capital expenditure (256) (157)
-------------------------------------------- ---- ----- -----
Purchase of investment properties (243) (172)
-------------------------------------------- ---- ----- -----
Sale of investment and trading properties 564 415
-------------------------------------------- ---- ----- -----
Payments received in respect of future
trading property sales 40 32
-------------------------------------------- ---- ----- -----
Purchase of investments - (7)
-------------------------------------------- ---- ----- -----
Acquisition of Speke Unit Trust - (90)
-------------------------------------------- ---- ----- -----
Tesco property swap - (93)
-------------------------------------------- ---- ----- -----
Investment in and loans to joint ventures
and funds (241) (173)
-------------------------------------------- ---- ----- -----
Capital distributions and loan repayments
from joint ventures and funds 366 134
-------------------------------------------- ---- ===== =====
Net cash inflow (outflow) from investing
activities 230 (111)
-------------------------------------------- ---- ===== =====
Cash flows from financing activities
-------------------------------------------- ---- ----- -----
Issue of ordinary shares 5 12
-------------------------------------------- ---- ----- -----
Dividends paid 15 (235) (228)
-------------------------------------------- ---- ----- -----
Dividends paid to non-controlling interests (16) (19)
-------------------------------------------- ---- ----- -----
Acquisition of units in Hercules Unit Trust (61) (93)
-------------------------------------------- ---- ----- -----
Closeout of interest rate derivatives 15 (12)
-------------------------------------------- ---- ----- -----
Cash collateral transactions (24) 10
-------------------------------------------- ---- ----- -----
Decrease in bank and other borrowings (919) (581)
-------------------------------------------- ---- ----- ----- Drawdowns on bank and other borrowings 373 703 -------------------------------------------- ---- ----- ----- Issue of zero coupon 2015 convertible bond 344 - -------------------------------------------- ---- ===== ===== Net cash outflow from financing activities (518) (208) -------------------------------------------- ---- ===== ===== Net increase (decrease) in cash and cash equivalents 6 (34) -------------------------------------------- ---- ----- ----- Cash and cash equivalents at 1 April 108 142 ============================================ ==== ===== ===== Cash and cash equivalents at 31 March 114 108 ============================================ ==== ===== ===== Cash and cash equivalents consists of: -------------------------------------------- ---- ----- ----- Cash and short-term deposits 14 114 108 ============================================ ==== ===== =====
1 The prior year comparatives have been restated. See note 1.
consolidated statement OF CHANGES IN EQUITY
for the year ended 31 march 2016
Hedging
and Re-
Share Share translation valuation Merger Retained Non-controlling Total
capital premium reserve1 reserve reserve earnings Total interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
================= ======== ======== ============ ========== ======== ========= ====== =============== =======
Balance at 1
April
2015 258 1,280 (76) (6) 213 6,563 8,232 333 8,565
================= ======== ======== ============ ========== ======== ========= ====== =============== =======
Profit for the
year
after taxation - - - - - 1,345 1,345 19 1,364
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Losses on cash
flow
hedges - - (24) - - - (24) - (24)
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Revaluation of
owner-occupied
property - - - 19 - - 19 - 19
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Exchange and
hedging
movements in
joint
ventures and
funds - - - (3) - - (3) - (3)
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Reclassification
of
gains on cash
flow
hedges
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
- Foreign
currency
derivatives - - 2 - - - 2 - 2
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
- Interest rate
derivatives - - 10 - - - 10 - 10
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Exchange
differences
on translation
of foreign
operations - - (3) 3 - - - - -
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Net actuarial
loss
on pension
schemes - - - - - (1) (1) - (1)
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Deferred tax on
items
of
other
comprehensive
income - - (16) 1 - - (15) - (15)
----------------- ======== ======== ============ ========== ======== ========= ====== =============== =======
Other
comprehensive
(loss) income - - (31) 20 - (1) (12) - (12)
================= ======== ======== ============ ========== ======== ========= ====== =============== =======
Total
comprehensive
income for the
year - - (31) 20 - 1,344 1,333 19 1,352
================= ======== ======== ============ ========== ======== ========= ====== =============== =======
Share issues 2 15 - - - (12) 5 - 5
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Fair value of
share
and share option
awards - - - - - 8 8 - 8
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Purchase of units
from
non-controlling
interests - - - - - - - (59) (59)
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Loss on purchase
of
units from
non-controlling
interests - - - - - (1) (1) - (1)
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Dividends payable
in year (28.0p
per
share) - - - - - (287) (287) - (287)
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Dividends payable
by subsidiaries - - - - - - - (16) (16)
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Adjustment for
scrip
dividend element - - - - - 52 52 - 52
================= ======== ======== ============ ========== ======== ========= ====== =============== =======
Balance at 31
March
2016 260 1,295 (107) 14 213 7,667 9,342 277 9,619
================= ======== ======== ============ ========== ======== ========= ====== =============== =======
Balance at 1
April
2014 255 1,257 (32) (38) 213 5,091 6,746 371 7,117
================= ======== ======== ============ ========== ======== ========= ====== =============== =======
Profit for the
year
after taxation - - - - - 1,710 1,710 55 1,765
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Losses on cash
flow
hedges - - (69) - - - (69) (2) (71)
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Revaluation of
owner-occupied
property - - - 10 - - 10 - 10
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Exchange and
hedging
movements in
joint
ventures and
funds - - - 3 - - 3 - 3
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Reclassification
of
items from the
statement
of comprehensive
income - - - 30 - - 30 - 30
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Reclassification
of
(losses) gains on
cash flow hedges
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
- Foreign
currency
derivatives - - (11) - - - (11) - (11)
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
- Interest rate
derivatives - - 8 - - - 8 - 8
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Exchange
differences
on
translation of
foreign
operations - - 6 (6) - - - - -
----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- -------
Net actuarial loss on pension schemes - - - - - (5) (5) - (5) ----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- ------- Deferred tax on items of other comprehensive income - - 22 (5) - (7) 10 - 10 ----------------- ======== ======== ============ ========== ======== ========= ====== =============== ======= Other comprehensive (loss) income - - (44) 32 - (12) (24) (2) (26) ----------------- -------- -------- ------------ ---------- -------- --------- ====== --------------- ------- Total comprehensive income for the year - - (44) 32 - 1,698 1,686 53 1,739 ----------------- -------- -------- ------------ ---------- -------- --------- ====== --------------- ------- Share issues 3 23 - - - (10) 16 - 16 ----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- ------- Non-controlling interest on acquisition of subsidiary - - - - - - - 31 31 ----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- ------- Fair value of share and share option awards - - - - - 10 10 - 10 ----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- ------- Purchase of units from non-controlling interests - - - - - 2 2 (103) (101) ----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- ------- Dividends payable in year (27.3p per share) - - - - - (277) (277) - (277) ----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- ------- Dividends payable by subsidiaries - - - - - - - (19) (19) ----------------- -------- -------- ------------ ---------- -------- --------- ------ --------------- ------- Adjustment for scrip dividend element - - - - - 49 49 - 49 ================= ======== ======== ============ ========== ======== ========= ====== =============== ======= Balance at 31 March 2015 258 1,280 (76) (6) 213 6,563 8,232 333 8,565 ================= ======== ======== ============ ========== ======== ========= ====== =============== =======
1 The balance at the beginning of the year includes GBP10m in relation to translation and (GBP86m) in relation to hedging.
Notes to the accounts
1 Basis of preparation, significant accounting
policies and accounting judgements
The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2016 or 2015, but is derived from those accounts. Statutory accounts for 2015 have been delivered to the Registrar of Companies and those for 2016 will be delivered following the Company's Annual General Meeting. The auditor has reported on those accounts; their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) of Companies Act 2006 or equivalent preceding legislation.
The financial statements for the year ended 31 March 2016 have been prepared on a historical cost basis, except for the revaluation of properties, investments held for trading and derivatives. The financial statements have also been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and therefore comply with Article 4 of the EU IAS Regulation.
While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements that comply with IFRSs in June 2016.
In the current financial year the Group has adopted Annual Improvements to IFRSs 2010-2012 cycle and 2011-2013 cycle and Defined Benefit Plans: Employee Contributions - Amendments to IAS 19.
The adoption of these standards has not had a material impact on the Group and otherwise the accounting policies used are consistent with those contained in the Group's previous Annual Report and Accounts for the year ended 31 March 2015.
A number of new standards and amendments to standards and interpretations have been issued but are not yet effective for the current accounting period. None of these are expected to have a material impact on the consolidated financial statements of the Group, except the following set out below:
IFRS 9 - Financial Instruments, will impact both the measurement and disclosures of financial instruments and is effective for the Group's year ending 31 March 2019. The Group has not yet completed its evaluation of the effect of the adoption.
IFRS 15 - Revenue from contracts with customers, does not apply
to gross rental income, but does apply to service charge income, management and performance fees and trading property disposals and is effective for the Group's year ending 31 March 2019. The Group does not expect adoption of IFRS 15 to have a material impact on the measurement of revenue recognition, but additional disclosures will be required with regards to the above sources of income.
IFRS 16 - Leases, will impact both the measurement and disclosures of the Group's head leases and is effective for the Group's year ending 31 March 2020. The Group has not yet completed its evaluation of the effect of the adoption.
Restatement
During the year, the accounting for Broadgate Estates, a wholly owned subsidiary of the Group which acts as a property manager, has been reviewed resulting in a reclassification of items presented in the Consolidated Income Statement and the Consolidated Statement
of Cash Flows.
This reclassification had no impact on either IFRS profit before tax or Underlying Profit. It resulted in a GBP29m increase in other fees and commissions received offset by a GBP26m increase in other fees and commissions expenses and a GBP3m increase in administrative expenses.
This reclassification had no impact on the net cash inflow from operating activities presented in the Consolidated Statement of Cash Flows. It resulted in GBP35m increase in fees and other income received and a GBP35m increase in operating expenses paid to suppliers and employees. In addition, the format of the Consolidated Income Statement has been changed to aid the clarity and usability of the financial statements and the prior-year comparatives have been re presented to reflect this change.
Accounting judgements and estimates
In applying the Group's accounting policies, the Directors are required to make judgements and estimates that affect the financial statements.
Significant areas of estimation are:
Valuation of properties and investments held for trading: The Group uses external professional valuers to determine the relevant amounts. The primary source of evidence for property valuations should be recent, comparable market transactions on an arms-length basis. However, the valuation of the Group's property portfolio and investments held for trading are inherently subjective, as they are made on the basis of assumptions made by the valuers which may not prove to be accurate.
Other less significant areas of estimation include the valuation of fixed rate debt and interest rate derivatives, the determination of share-based payment expense, and the actuarial assumptions used in calculating the Group's retirement benefit obligations.
The key areas of accounting judgement are:
REIT status: British Land is a Real Estate Investment Trust (REIT) and does not pay tax on its property income or gains on property sales, provided that at least 90% of the Group's property income is distributed as a dividend to shareholders, which becomes taxable in their hands. In addition, the Group has to meet certain conditions such as ensuring the property rental business represents more than 75% of total profits and assets. Any potential or proposed changes to the REIT legislation are monitored and discussed with HMRC. It is Management's intention that the Group will continue as a REIT for the foreseeable future.
Accounting for joint ventures and funds: In accordance with IFRS 10 'Consolidated financial statements', IFRS 11 'Joint arrangements', and IFRS 12 'Disclosures of interests in other entities' an assessment is required to determine the degree of control or influence the Group exercises and the form of any control to ensure that the financial statement treatment is appropriate.
Interest in the Group's joint ventures is commonly driven by the terms of the partnership agreements which ensure that control is shared between the partners. These are accounted for under the equity method, whereby the consolidated balance sheet incorporates the Group's share of the net assets of its joint ventures and associates. The consolidated income statement incorporates the Group's share of joint venture and associate profits after tax.
Accounting for transactions: Property transactions are complex in nature and can be material to the financial statements. Assessment is required to determine the most appropriate accounting treatment of assets acquired and of potential contractual arrangements in the legal documents for both acquisitions and disposals. Management consider each transaction separately and, when considered appropriate, seek independent accounting advice.
2 Performance measures
Earnings per share
The Group measures financial performance with reference to underlying earnings per share, the European Public Real Estate Association (EPRA) earnings per share and IFRS earnings per share. The relevant earnings and weighted average number of shares (including dilution adjustments) for each performance measure are shown below, and a reconciliation between these is shown within the supplementary disclosures (Table B).
EPRA earnings per share is calculated using EPRA earnings, which is the IFRS profit after taxation attributable to shareholders of the Company excluding investment and development property revaluations, gains/losses on investing and trading property disposals, changes in the fair value of financial instruments and associated close-out costs and their related taxation. EPRA earnings (diluted) also takes into account dilution due to the 2012 convertible bond.
Underlying earnings per share is calculated using Underlying Profit adjusted for underlying taxation (see note 6). Underlying Profit is the pre-tax EPRA earnings measure, with additional Company adjustments. No Company adjustments were made in either the current or prior year. For the year ended 31 March 2015 the 2012 convertible bond was not dilutive for underlying earnings, as the contingent conditions associated to the bond had not been met. The convertible conditions period ended on 25 September 2015 and therefore the bond was treated as dilutive in the current year.
2016 2015
------------------- --------------------------------- ---------------------------------
Relevant Relevant
Relevant number Earnings Relevant number Earnings
earnings of shares per share earnings of shares per share
Earnings per share GBPm million pence GBPm million pence
------------------- --------- ---------- ---------- --------- ---------- ----------
Underlying
------------------- --------- ---------- ---------- --------- ---------- ----------
Underlying basic 365 1,025 35.6 313 1,016 30.8
------------------- --------- ---------- ---------- --------- ---------- ----------
Underlying diluted 371 1,089 34.1 313 1,022 30.6
------------------- --------- ---------- ---------- --------- ---------- ----------
EPRA
------------------- --------- ---------- ---------- --------- ---------- ----------
EPRA basic 365 1,025 35.6 313 1,016 30.8
------------------- --------- ---------- ---------- --------- ---------- ----------
EPRA diluted 371 1,089 34.1 319 1,080 29.5
------------------- --------- ---------- ---------- --------- ---------- ----------
IFRS
------------------- --------- ---------- ---------- --------- ---------- ----------
Basic 1,345 1,025 131.2 1,710 1,016 168.3
------------------- --------- ---------- ---------- --------- ---------- ----------
Diluted 1,351 1,089 124.1 1,710 1,022 167.3
------------------- --------- ---------- ---------- --------- ---------- ----------
Net asset value
The Group measures financial position with reference to EPRA net asset value (NAV) per share and EPRA triple net asset value (NNNAV) per share. The net asset value and number of shares for each performance measure is shown below. A reconciliation between IFRS net assets and EPRA net assets, and the relevant number of shares for each performance measure, is shown within the supplementary disclosures (Table B). EPRA net assets is a proportionally consolidated measure that is based on IFRS net assets excluding the mark-to-market on effective cash flow hedges and related debt adjustments, the mark-to-market on the convertible bonds as well as deferred taxation on property and derivative valuations. They include the valuation surplus on trading properties and are adjusted for the dilutive impact of share options and the GBP400 million convertible bond maturing in 2017.
2016 2015
---------------- ----------------------------------- -----------------------------------
Relevant Net asset Relevant Net asset
Relevant number value per Relevant number value per
Net asset value net assets of shares share net assets of shares share
per share GBPm million pence GBPm million pence
---------------- ----------- ---------- ---------- ----------- ---------- ----------
EPRA
---------------- ----------- ---------- ---------- ----------- ---------- ----------
EPRA NAV 10,074 1,096 919 9,035 1,090 829
---------------- ----------- ---------- ---------- ----------- ---------- ----------
EPRA NNNAV 9,640 1,096 880 8,359 1,090 767
---------------- ----------- ---------- ---------- ----------- ---------- ----------
IFRS
---------------- ----------- ---------- ---------- ----------- ---------- ----------
Basic 9,619 1,029 935 8,565 1,020 840
---------------- ----------- ---------- ---------- ----------- ---------- ----------
Diluted 10,019 1,096 914 8,565 1,032 830
---------------- ----------- ---------- ---------- ----------- ---------- ----------
Total accounting return
The Group also measures financial performance with reference to total accounting return. This is calculated as the increase in EPRA net asset value per share and dividend paid in the year as a percentage of the EPRA net asset value per share at the start of the year.
2016 2015
----------------- ------------------------------------ -------------------------------------
Increase Dividend Increase Dividend
in NAV per per share Total in NAV per per Total
share paid accounting share share paid accounting
pence pence return pence pence return
----------------- ----------- ---------- ----------- ----------- ----------- -----------
Total accounting
return 90 28.02 14.2% 141 27.30 24.5%
----------------- ----------- ---------- ----------- ----------- ----------- -----------
3 Revenue and costs
2016 2015
-------------------------------- ---------------------- ----------------------
Capital Capital
Underlying and other Underlying and other
GBPm GBPm GBPm GBPm
-------------------------------- ---------- ---------- ---------- ----------
Rent receivable 437 - 369 -
-------------------------------- ---------- ---------- ---------- ----------
Spreading of tenant incentives
and guaranteed rent increases 12 - 26 -
-------------------------------- ---------- ---------- ---------- ----------
Surrender premia 2 - 4 -
-------------------------------- ---------- ---------- ---------- ----------
Gross rental income 451 - 399 -
-------------------------------- ---------- ---------- ---------- ----------
Trading property sales proceeds - 21 - 51
-------------------------------- ---------- ---------- ---------- ----------
Service charge income 72 - 65 -
-------------------------------- ---------- ---------- ---------- ----------
Management and performance
fees (from joint ventures and
funds) 8 - 7 -
-------------------------------- ---------- ---------- ---------- ----------
Other fees and commissions 38 - 34 -
-------------------------------- ---------- ---------- ---------- ----------
Revenue 569 21 505 51
-------------------------------- ---------- ---------- ---------- ----------
Trading property cost of sales - (11) - (45)
-------------------------------- ---------- ---------- ---------- ----------
Service charge expenses (72) - (65) -
-------------------------------- ---------- ---------- ---------- ----------
Property operating expenses (26) - (24) -
-------------------------------- ---------- ---------- ---------- ----------
Other fees and commissions
expenses (30) - (26) -
-------------------------------- ---------- ---------- ---------- ----------
Costs (128) (11) (115) (45)
-------------------------------- ---------- ---------- ---------- ----------
441 10 390 6
-------------------------------- ---------- ---------- ---------- ----------
The cash element of net rental income recognised during the year ended 31 March 2016 from properties which were not subject to a security
interest was GBP229m (2014/15: GBP182m). Property operating expenses relating to investment properties that did not generate any rental income were GBP1m (2014/15: GBP2m). Contingent rents of GBP3m (2014/15: GBP3m) were recognised in the year.
4 Valuation movements on property
2016 2015
GBPm GBPm
================================================= ===== =====
Consolidated income statement
------------------------------------------------- ----- -----
Revaluation of properties 616 884
------------------------------------------------- ----- -----
Revaluation of properties held by joint ventures
and funds accounted for using the equity method 245 589
------------------------------------------------- ----- -----
861 1,473
------------------------------------------------- ----- -----
Consolidated statement of comprehensive income
------------------------------------------------- ----- -----
Revaluation of owner-occupied properties 19 10
------------------------------------------------- ----- -----
880 1,483
------------------------------------------------- ----- -----
5 Net financing costs
2016 2015
GBPm GBPm
============================================== ===== =====
Underlying
---------------------------------------------- ----- -----
Financing charges
---------------------------------------------- ----- -----
Bank loans, overdrafts and derivatives (30) (36)
---------------------------------------------- ----- -----
Other loans (88) (88)
---------------------------------------------- ----- -----
Obligations under head leases (2) (2)
---------------------------------------------- ===== =====
(120) (126)
---------------------------------------------- ----- -----
Development interest capitalised 9 14
---------------------------------------------- ===== =====
(111) (112)
---------------------------------------------- ----- -----
Financing income
---------------------------------------------- ----- -----
Deposits, securities and liquid investments 3 2
---------------------------------------------- ----- -----
Loans to joint ventures 2 5
---------------------------------------------- ===== =====
5 7
============================================== ===== =====
Net financing charges - underlying (106) (105)
============================================== ===== =====
Capital and other
---------------------------------------------- ----- -----
Financing charges
---------------------------------------------- ----- -----
Valuation movements on translation of foreign
currency debt 2 (11)
---------------------------------------------- ----- -----
Hedging reserve recycling (2) 11
---------------------------------------------- ----- -----
Valuation movements on fair value derivatives 54 108
---------------------------------------------- ----- -----
Valuation movements on fair value debt (53) (104)
---------------------------------------------- ----- -----
Recycling of fair value movement on close-out
of derivatives (6) (12)
---------------------------------------------- ----- -----
Capital financing costs1 (29) (2)
---------------------------------------------- ----- -----
Fair value movement on convertible bonds - (35)
---------------------------------------------- ----- -----
Valuation movement on translation of foreign
currency net assets - (1)
---------------------------------------------- ----- -----
Fair value movement on non-hedge accounted
derivatives - (1)
---------------------------------------------- ===== =====
(34) (47)
---------------------------------------------- ===== =====
Financing income
---------------------------------------------- ----- -----
Fair value movement on convertible bonds 64 -
---------------------------------------------- ----- -----
Fair value movement on non-hedge accounted
derivatives 1 -
---------------------------------------------- ===== =====
65 -
============================================== ===== =====
Net financing income (charges) - capital 31 (47)
============================================== ===== =====
Net financing costs
---------------------------------------------- ----- -----
Total financing income 70 7
---------------------------------------------- ----- -----
Total financing charges (145) (159)
============================================== ===== =====
Net financing costs (75) (152)
============================================== ===== =====
1 Primarily debenture bonds tender offer and purchase.
Interest payable on unsecured bank loans and related interest rate derivatives was GBP19m (2014/15: GBP24m). Interest on development expenditure
is capitalised at the Group's weighted average interest rate of 2.6% (2014/15: 3.3%). The weighted average interest rate on a proportionately consolidated basis at 31 March 2016 was 3.3% (2014/15: 3.8%).
6 Taxation
2016 2015
GBPm GBPm
=================================================== ===== =====
Taxation income (expense)
--------------------------------------------------- ----- -----
Current taxation:
--------------------------------------------------- ----- -----
UK corporation taxation: 20% (2014/15: 21%) (15) (1)
--------------------------------------------------- ----- -----
Adjustments in respect of prior years 17 -
--------------------------------------------------- ===== =====
Total current taxation income (expense) 2 (1)
--------------------------------------------------- ----- -----
Deferred taxation on revaluations and derivatives 31 (23)
=================================================== ===== =====
Group total taxation 33 (24)
--------------------------------------------------- ----- -----
Attributable to joint ventures and funds (1) 2
=================================================== ===== =====
Total taxation income (expense) 32 (22)
=================================================== ===== =====
Taxation reconciliation
--------------------------------------------------- ----- -----
Profit on ordinary activities before taxation 1,331 1,789
--------------------------------------------------- ----- -----
Less: profit attributable to joint ventures
and funds1 (397) (726)
--------------------------------------------------- ===== =====
Group profit on ordinary activities before
taxation 934 1,063
--------------------------------------------------- ===== =====
Taxation on profit on ordinary activities
at UK corporation taxation rate of 20% (2014/15:
21%) (187) (223)
--------------------------------------------------- ----- -----
Effects of:
--------------------------------------------------- ----- -----
REIT exempt income and gains 161 232
--------------------------------------------------- ----- -----
Taxation losses 11 (10)
--------------------------------------------------- ----- -----
Deferred taxation on revaluations and derivatives 31 (23)
--------------------------------------------------- ----- -----
Adjustments in respect of prior years 17 -
=================================================== ===== =====
Group total taxation income (expense) 33 (24)
=================================================== ===== =====
(1) A current taxation expense of GBP1m (2014/15: GBP2m expense) and a deferred taxation expense of GBPnil (2014/15: GBP4m credit) arose on profits attributable to joint ventures and funds.
Taxation attributable to Underlying Profit for the year ended 31 March 2016 was a credit of GBP2m (2014/15: GBPnil). Corporation taxation payable at 31 March 2016 was GBP18m (2014/15: GBP9m) as shown on the balance sheet.
7 Property
Property reconciliation for the year ended 31 March 2016
Canada Water was added as a property sector in the year, reflecting the key role the campus has in the strategy of the Group.
Investment
====================== ========================== ====== ============ ============ =========== ========= ======
Investment
and
Retail Offices Canada development Owner-
& leisure & residential Water Developments properties occupied
Level Level Level Level Level Trading Level
3 3 3 3 3 properties 3 Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
====================== ========== ============== ====== ============ ============ =========== ========= ======
Carrying value
at 1 April 2015 5,584 2,902 249 385 9,120 274 60 9,454
---------------------- ---------- -------------- ------ ------------ ------------ ----------- --------- ------
Additions
---------------------- ---------- -------------- ------ ------------ ------------ ----------- --------- ------
- property purchases 4 234 - - 238 - - 238
---------------------- ---------- -------------- ------ ------------ ------------ ----------- --------- ------
- development
expenditure 4 6 1 43 54 59 - 113
---------------------- ---------- -------------- ------ ------------ ------------ ----------- --------- ------
- capitalised
interest
and staff costs - - 1 3 4 5 - 9
---------------------- ---------- -------------- ------ ------------ ------------ ----------- --------- ------
-
capital expenditure
on asset management
initiatives 91 24 1 - 116 - - 116
---------------------- ========== ============== ====== ============ ============ =========== ========= ======
99 264 3 46 412 64 - 476
---------------------- ========== ============== ====== ============ ============ =========== ========= ======
Depreciation - - - - - - (1) (1)
---------------------- ---------- -------------- ------ ------------ ------------ ----------- --------- ------
Disposals (372) (130) - (7) (509) (11) - (520)
---------------------- ---------- -------------- ------ ------------ ------------ ----------- --------- ------
Reclassifications 135 22 - (172) (15) (2) 17 -
---------------------- ---------- -------------- ------ ------------ ------------ ----------- --------- ------
Revaluations included
in income statement 161 369 4 82 616 - - 616
---------------------- ---------- -------------- ------ ------------ ------------ ----------- --------- ------
Revaluation included
in OCI - - - - - - 19 19
---------------------- ---------- -------------- ------ ------------ ------------ ----------- --------- ------
Movement in tenant
incentives and
contracted rent
uplift balances 10 9 - - 19 - - 19
---------------------- ========== ============== ====== ============ ============ =========== ========= ======
Carrying value
at 31 March 2016 5,617 3,436 256 334 9,643 325 95 10,063
---------------------- ========== ============== ====== ============ ============ =========== ========= ======
Head lease liabilities
(note 12) (37)
---------------------- ---------- -------------- ------ ------------ ------------ ----------- --------- ------
Valuation surplus on
trading properties 85
================================== ============== ====== ============ ============ =========== ========= ======
Group property portfolio
valuation
at 31 March 2016 10,111
---------------------------------- -------------- ------ ------------ ------------ ----------- --------- ------
Non-controlling
interests (324)
====================== ========== ============== ====== ============ ============ =========== ========= ======
Group property portfolio valuation at
31 March 2016 attributable to shareholders 9,787
====================================================================================== =========== ========= ======
Property valuation
The different valuation method levels are defined below:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2:
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
These levels are specified in accordance with IFRS 13 'Fair Value Measurement'. Property valuations are inherently subjective as they are made on the basis of assumptions made by the valuer which may not prove to be accurate. For these reasons, and consistent with EPRA's guidance, we have classified the valuations of our property portfolio as Level 3 as defined by IFRS 13. The unobservable inputs to the valuations are analysed in the table on the following page.
The Group's total property portfolio was valued by independent external valuers on the basis of fair value, in accordance with the RICS Valuation - Professional Standards 2014, ninth edition, published by The Royal Institution of Chartered Surveyors.
The information provided to the valuers, and the assumptions and valuations models used by the valuers are reviewed by the property portfolio team, the Head of Offices, the Head of Retail and the Chief Financial Officer. The valuers meet with the external auditors and also present directly to the Audit Committee at the interim and year end review of results.
Investment properties, excluding properties held for development, are valued by adopting the "investment method" of valuation. This approach involves applying capitalisation yields to current and future rental streams net of income voids arising from vacancies or rent-free periods and associated running costs. These capitalisation yields and future rental values are based on comparable property and leasing transactions in the market using the valuers' professional judgement and market observation. Other factors taken into account in the valuations include the tenure of the property, tenancy details and ground and structural conditions.
In the case of ongoing developments, the approach applied is the "residual method" of valuation, which is the investment method of valuation as described above, with a deduction for all costs necessary to complete the development, including a notional finance cost, together with a further allowance for remaining risk. Properties held for development are generally valued by adopting the higher of the residual method of valuation, allowing for all associated risks, or the investment method of valuation for the existing asset.
Copies of the valuation certificates of Knight Frank LLP and CBRE can be found at www.britishland.com/reports
Within their valuation report, CBRE have highlighted that they expect considerable uncertainty to arise if there is a decision for the UK to exit the EU following the referendum on 23 June 2016 and that this has the potential to reduce investment volumes and liquidity. This is a forward looking statement which has no impact on the valuations as at 31 March 2016.
A breakdown of valuations split between the Group and its share of joint ventures and funds is shown below:
2016 2015
------------------------- --------------------------- -------------------------
Joint Joint
ventures ventures
Group and funds Total Group and funds Total
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- ------ ---------- ------- ----- ---------- ------
Knight Frank LLP 7,529 3,576 11,105 6,795 3,313 10,108
------------------------- ------ ---------- ------- ----- ---------- ------
CBRE 2,582 1,361 3,943 2,714 1,401 4,115
------------------------- ------ ---------- ------- ----- ---------- ------
Total property portfolio
valuation 10,111 4,937 15,048 9,509 4,714 14,223
------------------------- ------ ---------- ------- ----- ---------- ------
Non-controlling
interests (324) (76) (400) (441) (105) (546)
------------------------- ------ ---------- ------- ----- ---------- ------
Total property portfolio
valuation
attributable to
shareholders 9,787 4,861 14,648 9,068 4,609 13,677
------------------------- ------ ---------- ------- ----- ---------- ------
Information about fair value measurements using unobservable inputs (Level 3)
ERV per sq Equivalent Costs to complete
ft Yield per sq ft
------------------ ------ ------------ -------------------- ------------------ ---------------------
Fair
value
at
31
March
2016 Valuation Min Max Average Min Max Average Min Max Average
Investment GBPm technique GBP GBP GBP % % % GBP GBP GBP
------------------ ------ ------------ ---- ---- -------- --- --- -------- ----- ---- --------
Retail & Investment
leisure 5,608 methodology 2 75 22 3 11 5 - 45 8
------------------ ------ ------------ ---- ---- -------- --- --- -------- ----- ---- --------
Offices Investment
& residential1,2 3,492 methodology 4 136 53 1 8 4 - 150 15
------------------ ------ ------------ ---- ---- -------- --- --- -------- ----- ---- --------
Investment
Canada Water 250 methodology 15 25 22 1 5 3 - 5 4
------------------ ------ ------------ ---- ---- -------- --- --- -------- ----- ---- --------
Residual
Developments2 343 methodology 65 107 73 4 5 4 - 664 447
------------------ ------ ------------ ---- ---- -------- --- --- -------- ----- ---- --------
Total 9,693
------------------ ------ ------------ ---- ---- -------- --- --- -------- ----- ---- --------
Trading
properties
at fair
value 418
------------------ ------ ------------ ---- ---- -------- --- --- -------- ----- ---- --------
Group property
portfolio
valuation 10,111
------------------ ------ ------------ ---- ---- -------- --- --- -------- ----- ---- --------
(1) Includes owner-occupied.
(2) Includes Residential with an average capital value per sq ft of GBP1,028 including developments at end value and mixed use.
All other factors being equal:
-- a higher equivalent yield or discount rate would lead to a decrease in the valuation of an asset;
-- an increase in the current or estimated future rental stream would have the effect of increasing the capital value; and
-- an increase in the costs to complete would lead to a decrease in the valuation of an asset.
However, there are interrelationships between the unobservable inputs which are partially determined by market conditions, which would impact
on these changes. There were no transfers between valuation levels in the period.
8 Joint ventures and funds
Summary movement for the Joint year of the investments in ventures Funds Total Equity Loans Total joint ventures and funds GBPm GBPm GBPm GBPm GBPm GBPm =============================== ========= ===== ===== ====== ===== ===== At 1 April 2015 2,586 315 2,901 2,598 303 2,901 ------------------------------- --------- ----- ----- ------ ----- ----- Additions 246 - 246 14 232 246 ------------------------------- --------- ----- ----- ------ ----- ----- Disposals (2) (13) (15) - (15) (15) ------------------------------- --------- ----- ----- ------ ----- ----- Share of profit on ordinary activities after taxation 365 32 397 397 - 397 ------------------------------- --------- ----- ----- ------ ----- ----- Distributions and dividends: ------------------------------- --------- ----- ----- ------ ----- ----- - Capital - (76) (76) (76) - (76) ------------------------------- --------- ----- ----- ------ ----- ----- - Revenue (90) (13) (103) (103) - (103) ------------------------------- --------- ----- ----- ------ ----- ----- Hedging and exchange movements 4 (1) 3 3 - 3 ------------------------------- --------- ----- ----- ------ ----- ----- At 31 March 2016 3,109 244 3,353 2,833 520 3,353 ------------------------------- --------- ----- ----- ------ ----- -----
Additional investments in joint ventures and funds covenant information
At 31 March 2016 the investments in joint ventures included within the total investments in joint ventures and funds was GBP3,348m (2014/15: GBP2,869m), being the GBP3,353m total investment shown above, less the net investment of GBP5m (2014/15: GBP32m) in PREF, a property fund in Continental Europe.
The summarised income statements and balance sheets below show 100% of the results, assets and liabilities of joint ventures and funds. Where necessary these have been restated to the Group's accounting policies.
Joint ventures' and funds' summary financial statements for the year ended 31 March 2016
MSC Property Tesco Joint
Broadgate Intermediate BL Sainsbury Ventures1
REIT Holdings Superstores
Ltd Ltd Ltd
============================== ============= ================ ============ ============
Euro Bluebell Norges
LLP Bank Investment J Sainsbury
Partners (GIC) Management plc Tesco PLC
============================== ============= ================ ============ ============
Shopping
City Offices Centres
Property sector Broadgate Meadowhall Superstores Superstores
============================== ============= ================ ============ ============
Group share 50% 50% 50% 50%
============================== ============= ================ ============ ============
Summarised income statements GBPm GBPm GBPm GBPm
============================== ============= ================ ============ ============
Revenue5 244 102 56 19
------------------------------ ------------- ---------------- ------------ ------------
Costs (48) (23) (1) -
============================== ============= ================ ============ ============
196 79 55 19
------------------------------ ------------- ---------------- ------------ ------------
Administrative expenses - - - -
------------------------------ ------------- ---------------- ------------ ------------
Net interest payable (86) (36) (24) (9)
------------------------------ ============= ================ ============ ============
Underlying Profit 110 43 31 10
------------------------------ ------------- ---------------- ------------ ------------
Net valuation movement 334 50 (36) (9)
------------------------------ ------------- ---------------- ------------ ------------
Profit on disposal of
investment properties
and investments - - 2 -
------------------------------ ============= ================ ============ ============
Profit on ordinary activities
before taxation 444 93 (3) 1
------------------------------ ------------- ---------------- ------------ ------------
Taxation - - - 1
============================== ============= ================ ============ ============
Profit on ordinary activities
after taxation 444 93 (3) 2
============================== ============= ================ ============ ============
Other comprehensive income
(expenditure) 5 - - 3
============================== ============= ================ ============ ============
Total comprehensive income 449 93 (3) 5
============================== ============= ================ ============ ============
British Land share of
total comprehensive income 225 46 (2) 3
============================== ============= ================ ============ ============
British Land share of
distributions payable 44 17 11 4
============================== ============= ================ ============ ============
Summarised balance sheets GBPm GBPm GBPm GBPm
============================== ============= ================ ============ ============
Investment and trading
properties 4,622 1,786 946 354
------------------------------ ------------- ---------------- ------------ ------------
Current assets 4 5 2 -
------------------------------ ------------- ---------------- ------------ ------------
Cash and deposits 293 32 80 6
------------------------------ ============= ================ ============ ============
Gross assets 4,919 1,823 1,028 360
------------------------------ ============= ================ ============ ============
Current liabilities (77) (31) (30) (3)
------------------------------ ------------- ---------------- ------------ ------------
Bank and securitised debt (1,842) (694) (462) (184)
------------------------------ ------------- ---------------- ------------ ------------
Other non-current liabilities (65) (24) - (15)
------------------------------ ============= ================ ============ ============
Gross liabilities (1,984) (749) (492) (202)
============================== ============= ================ ============ ============
Net external assets 2,935 1,074 536 158
============================== ============= ================ ============ ============
British Land share of
net assets 1,467 537 269 79
============================== ============= ================ ============ ============
USS Leadenhall Hercules Other
Joint Holding Unit Trust joint ventures
The SouthGate Ventures2 Co joint ventures and funds4 TOTAL
Limited (Jersey) and sub-funds3 TOTAL Group share
Partnership Ltd 2016 2016
============= =============== ============ =============== =============== ======= ============
Universities
Superannuation
Scheme
Aviva Group Oxford
Investors PLC Properties
============= =============== ============ =============== =============== ======= ============
Shopping Shopping City Offices Retail
Centres Centres Leadenhall Parks
============= =============== ============ =============== =============== ======= ============
50% 50% 50% Various
============= =============== ============ =============== =============== ======= ============
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============= =============== ============ =============== =============== ======= ============
19 12 35 38 6 531 266
------------- --------------- ------------ --------------- --------------- ------- ------------
(6) (3) (10) (7) (1) (99) (44)
============= =============== ============ =============== =============== ======= ============
13 9 25 31 5 432 222
------------- --------------- ------------ --------------- --------------- ------- ------------
(1) - (1) (6) (2) (10) (5)
------------- --------------- ------------ --------------- --------------- ------- ------------
(1) - - (8) - (164) (82)
============= =============== ============ =============== =============== ======= ============
11 9 24 17 3 258 135
------------- --------------- ------------ --------------- --------------- ------- ------------
4 12 124 4 7 490 245
------------- --------------- ------------ --------------- --------------- ------- ------------
- - - - 30 32 18
============= =============== ============ =============== =============== ======= ============
15 21 148 21 40 780 398
------------- --------------- ------------ --------------- --------------- ------- ------------
- - - - (3) (2) (1)
============= =============== ============ =============== =============== ======= ============
15 21 148 21 37 778 397
============= =============== ============ =============== =============== ======= ============
- - - (2) - 6 3
============= =============== ============ =============== =============== ======= ============
15 21 148 19 37 784 400
============= =============== ============ =============== =============== ======= ============
8 11 74 10 25 400
============= =============== ============ =============== =============== ======= ============
4 6 3 59 31 179
============= =============== ============ =============== =============== ======= ============
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============= =============== ============ =============== =============== ======= ============
267 252 942 612 108 9,889 4,944
------------- --------------- ------------ --------------- --------------- ------- ------------
2 1 - 4 14 32 18
------------- --------------- ------------ --------------- --------------- ------- ------------
5 7 5 9 33 470 239
============= =============== ============ =============== =============== ======= ============
274 260 947 625 155 10,391 5,201
============= =============== ============ =============== =============== ======= ============
(4) (6) (6) (7) (51) (215) (111)
------------- --------------- ------------ --------------- --------------- ------- ------------
- - - (139) - (3,321) (1,660)
------------- --------------- ------------ --------------- --------------- ------- ------------
(28) - - (4) (18) (154) (77)
============= =============== ============ =============== =============== ======= ============
(32) (6) (6) (150) (69) (3,690) (1,848)
============= =============== ============ =============== =============== ======= ============
242 254 941 475 86 6,701 3,353
============= =============== ============ =============== =============== ======= ============
121 128 471 237 44 3,353
============= =============== ============ =============== =============== ======= ============
(1) Tesco joint ventures include BLT Holdings (2010) Limited as at 31 March 2016.
(2) USS joint ventures include the Eden Walk Shopping Centre Unit Trust and the Fareham Property Partnership.
(3) Hercules Unit Trust joint ventures and sub-funds includes 50% of the results of Deepdale Co-Ownership Trust, Gibraltar Limited Partnership and Valentine Co-Ownership Trust and 41.25% of Birstall Co-Ownership Trust. The balance sheet shows 50% of the assets of these joint ventures and sub-funds.
4Included in the column headed 'Other joint ventures and funds' are contributions from the following: BL Goodman Limited Partnership, The Aldgate Place Limited Partnership, Bluebutton Property
Management UK Limited, City of London Office Unit Trust and Pillar Retail Europark Fund (PREF). The Group's ownership share of PREF is 65%, however as the group is not able to exercise control over significant decisions of the fund, the Group equity accounts for its interest in PREF.
5 Revenue includes gross rental income at 100% share of GBP495m (2014/15: GBP451m).
The borrowings of joint ventures and funds and their subsidiaries are non-recourse to the Group. All joint ventures are incorporated in the United Kingdom, with
the exception of Broadgate REIT Limited, the Eden Walk Shopping Centre Unit Trust and Leadenhall Holding Co (Jersey) Limited which are incorporated in Jersey.
Of the funds, the Hercules Unit Trust (HUT) joint ventures and sub-funds are incorporated in Jersey and PREF in Luxembourg.
These financial statements include the results and financial position of the Group's interest in the Fareham Property Partnership, the Aldgate Place Limited Partnership, the BL Goodman Limited Partnership, the Auchinlea Partnership and the Gibraltar Limited Partnership. Accordingly, advantage has been taken of the exemptions provided by Regulation 7 of the Partnership (Accounts) Regulations 2008, not to attach the partnership accounts to these financial statements.
Operating cash flows of joint ventures and funds (Group share)
2016 2015
GBPm GBPm
=================================================== ===== =====
Rental income received from tenants 208 234
--------------------------------------------------- ----- -----
Fees and other income received 1 1
--------------------------------------------------- ----- -----
Operating expenses paid to suppliers and employees (18) (26)
--------------------------------------------------- ===== =====
Cash generated from operations 191 209
--------------------------------------------------- ===== =====
Interest paid (86) (114)
--------------------------------------------------- ----- -----
Interest received 1 2
--------------------------------------------------- ----- -----
UK corporation tax paid (3) (7)
--------------------------------------------------- ----- -----
Foreign tax paid (1) (2)
=================================================== ===== =====
Cash inflow from operating activities 102 88
=================================================== ===== =====
Cash inflow from operating activities deployed
as:
--------------------------------------------------- ----- -----
Surplus cash retained within joint ventures
and funds 44 15
--------------------------------------------------- ----- -----
Revenue distributions per consolidated statement
of cash flows 58 73
--------------------------------------------------- ----- -----
Revenue distributions split between controlling
and non-controlling interests
=================================================== ===== =====
Attributable to non-controlling interests 4 7
--------------------------------------------------- ----- -----
Attributable to shareholders of the Company 54 66
=================================================== ===== =====
9 Other investments
2016 2015
------------- ------------------------------- -------------------------------
Investment Loans, Investment Loans,
held receivables held receivables
for and for and
trading other Total trading other Total
GBPm GBPm GBPm GBPm GBPm GBPm
------------- ---------- ------------ ----- ---------- ------------ -----
At 1 April 99 280 379 92 170 262
------------- ---------- ------------ ----- ---------- ------------ -----
Additions - 35 35 - 113 113
------------- ---------- ------------ ----- ---------- ------------ -----
Disposals - (272) (272) - (2) (2)
------------- ---------- ------------ ----- ---------- ------------ -----
Revaluation 2 - 2 7 - 7
------------- ---------- ------------ ----- ---------- ------------ -----
Depreciation - (2) (2) - (1) (1)
------------- ---------- ------------ ----- ---------- ------------ -----
At 31 March 101 41 142 99 280 379
------------- ---------- ------------ ----- ---------- ------------ -----
The investment held for trading comprises interests as a trust beneficiary. The trust's assets comprise freehold reversions in a pool of commercial properties, comprising Sainsbury's superstores. The interest was categorised as Level 3 in the fair value hierarchy, is subject to the same inputs as those disclosed in note 7, and its fair value was determined by independent external valuers.
Included within the loans, receivables and other balance is GBPnil (2014/2015: GBP243m) in relation to a loan to the Broadgate joint venture, which is carried at amortised cost, and was fully repaid in the year.
10 Debtors
2016 2015
GBPm GBPm
=============================== ===== =====
Trade and other debtors 24 16
------------------------------- ----- -----
Prepayments and accrued income 9 4
=============================== ===== =====
33 20
=============================== ===== =====
Trade and other debtors are shown after deducting a provision for bad and doubtful debts of GBP16m (2014/15: GBP16m). The charge to the income statement in relation to bad and doubtful debts was GBP1m (2014/15: GBP1m).
The Directors consider that the carrying amount of trade and other debtors is approximate to their fair value. There is no concentration of credit risk with respect to trade debtors as the Group has a large number of customers who are paying their rent in advance.
As at 31 March, trade and other debtors outside their payment terms yet not provided for are as follows:
Outside credit
terms but not
impaired
----- -------------- ==========================
Within More
credit 0-1 1-2 than
Total terms month months 2 months
GBPm GBPm GBPm GBPm GBPm
===== ===== ======= ====== ======= =========
2016 24 12 11 1 -
===== ===== ======= ====== ======= =========
2015 16 9 7 - -
===== ===== ======= ====== ======= =========
11 Creditors
2016 2015
GBPm GBPm
----------------------------------- ----- -----
Trade creditors 39 61
----------------------------------- ----- -----
Other taxation and social security 34 31
----------------------------------- ----- -----
Accruals 72 98
----------------------------------- ----- -----
Deferred income 73 71
=================================== ===== =====
218 261
=================================== ===== =====
Trade creditors are interest-free and have settlement dates within one year. The Directors consider that the carrying amount of trade and other creditors is approximate to their fair value.
12 Other non-current liabilities
2016 2015
GBPm GBPm
======================== ===== =====
Other creditors 70 32
------------------------ ----- -----
Head leases1 46 41
------------------------ ----- -----
Net pension liabilities 6 6
======================== ===== =====
122 79
======================== ===== =====
(1) Includes GBP9m in relation to head lease liabilities on trading properties held at cost.
13 Deferred tax
The movement on deferred tax is as shown below:
Deferred tax assets year ended 31 March 2016
Credited Transferred
1 April Credited (debited) to joint 31 March
2015 to income to equity ventures 2016
GBPm GBPm GBPm GBPm GBPm
=========================== ======= ========== ========== =========== ========
Interest rate and currency
derivative revaluations - - 5 - 5
--------------------------- ------- ---------- ---------- ----------- --------
Other timing differences - 6 - - 6
=========================== ======= ========== ========== =========== ========
- 6 5 - 11
=========================== ======= ========== ========== =========== ========
Deferred tax liabilities year ended 31 March 2016
GBPm GBPm GBPm GBPm GBPm
============================= ==== ==== ==== ==== ====
Property and investment
revaluations (5) - (2) - (7)
----------------------------- ---- ---- ---- ---- ----
Interest rate and currency
derivative revaluations (4) 25 (21) - -
----------------------------- ---- ---- ---- ---- ----
Other timing differences (3) - - 2 (1)
============================= ==== ==== ==== ==== ====
(12) 25 (23) 2 (8)
============================= ==== ==== ==== ==== ====
Net deferred tax (liability)
asset (12) 31 (18) 2 3
============================= ==== ==== ==== ==== ====
Deferred tax assets year ended 31 March 2015
Credited Transferred
1 April Expensed to to joint 31 March
2014 to income equity ventures 2015
GBPm GBPm GBPm GBPm GBPm
======= ========== ======== =========== ========
- - - - -
======= ========== ======== =========== ========
Deferred tax liabilities year ended 31 March 2015
GBPm GBPm GBPm GBPm GBPm
============================= ==== ==== ==== ==== ====
Property and investment
revaluations - (5) - - (5)
----------------------------- ---- ---- ---- ---- ----
Interest rate and currency
derivative revaluations - (19) 15 - (4)
----------------------------- ---- ---- ---- ---- ----
Other timing differences (4) 1 - - (3)
============================= ==== ==== ==== ==== ====
(4) (23) 15 - (12)
============================= ==== ==== ==== ==== ====
Net deferred tax (liability)
asset (4) (23) 15 - (12)
============================= ==== ==== ==== ==== ====
The following corporation tax rates have been substantively enacted; 20% effective from 1 April 2015 reducing to 19% effective from 1 April 2017
and 18% effective from 1 April 2020. The deferred tax assets and liabilities have been calculated at the tax rate effective in the period that the tax is expected to crystallise.
The Group has recognised a deferred tax asset calculated at 18% (2014/2015: 20%) of GBP6m (2014/2015: GBPnil) in respect of capital losses from previous years available for offset against future capital profit. Further unrecognised deferred tax assets in respect of capital losses of GBP60m (2014/2015: GBP87m) exist at 31 March 2016.
The Group has recognised deferred tax assets on derivative revaluations to the extent that future matching taxable profits are expected to arise.
At 31 March 2016 the Group had an unrecognised deferred tax asset calculated at 18% (2014/2015: 20%) of GBP51m (2014/2015: GBP38m) in respect of UK revenue tax losses from previous years.
Under the REIT regime, development properties which are sold within three years of completion do not benefit from tax exemption. At 31 March 2016 the value of such properties is GBP967m (2014/2015: GBP1,008m) and if these properties were to be sold and no tax exemption was available, the tax arising would be GBP56m (2014/15: GBP66m).
14 Net debt
2016 2015
Footnote GBPm GBPm
=================================================== ======== ===== =====
Secured on the assets of the Group
--------------------------------------------------- -------- ----- -----
9.125% First Mortgage Debenture Stock 2020 1.1 34 35
--------------------------------------------------- -------- ----- -----
5.264% First Mortgage Debenture Bonds 2035 371 355
--------------------------------------------------- -------- ----- -----
5.0055% First Mortgage Amortising Debentures
2035 100 99
--------------------------------------------------- -------- ----- -----
5.357% First Mortgage Debenture Bonds 2028 349 344
--------------------------------------------------- -------- ----- -----
6.75% First Mortgage Debenture Stock 2020 62 176
--------------------------------------------------- -------- ----- -----
1.2,
Bank loans 1.3 733 963
--------------------------------------------------- -------- ----- -----
Loan notes 2 2
--------------------------------------------------- -------- ===== =====
1,651 1,974
--------------------------------------------------- -------- ----- -----
Unsecured
--------------------------------------------------- -------- ----- -----
5.50% Senior Notes 2027 101 98
--------------------------------------------------- -------- ----- -----
6.30% Senior US Dollar Notes 2015 - 104
--------------------------------------------------- -------- ----- -----
3.895% Senior US Dollar Notes 2018 2 28 28
--------------------------------------------------- -------- ----- -----
4.635% Senior US Dollar Notes 2021 2 165 158
--------------------------------------------------- -------- ----- -----
4.766% Senior US Dollar Notes 2023 2 105 99
--------------------------------------------------- -------- ----- -----
5.003% Senior US Dollar Notes 2026 2 69 64
--------------------------------------------------- -------- ----- -----
3.81% Senior Notes 2026 113 111
--------------------------------------------------- -------- ----- -----
3.97% Senior Notes 2026 116 114
--------------------------------------------------- -------- ----- -----
1.5% Convertible Bond 2017 445 493
--------------------------------------------------- -------- ----- -----
0% Convertible Bond 2020 334 -
--------------------------------------------------- -------- ----- -----
Bank loans and overdrafts 634 706
--------------------------------------------------- -------- ===== =====
2,110 1,975
=================================================== ======== ===== =====
Gross debt 3 3,761 3,949
=================================================== ======== ===== =====
Interest rate and currency derivative liabilities 137 126
--------------------------------------------------- -------- ----- -----
Interest rate and currency derivative assets (167) (139)
--------------------------------------------------- -------- ----- -----
Cash and short-term deposits 4,5 (114) (108)
=================================================== ======== ===== =====
Total net debt 3,617 3,828
=================================================== ======== ===== =====
Net debt attributable to non-controlling
interests (104) (190)
=================================================== ======== ===== =====
Net debt attributable to shareholders of
the Company 3,513 3,638
=================================================== ======== ===== =====
(1) These are non-recourse borrowings with no recourse for repayment to other companies or assets in the Group:
2016 2015
GBPm GBPm
============================================ ===== =====
1.1 BLD Property Holdings Ltd 34 35
-------------------------------------------- ----- -----
1.2 Hercules Unit Trust 443 645
-------------------------------------------- ----- -----
1.3 TBL Properties Limited and subsidiaries 290 318
============================================ ===== =====
767 998
============================================ ===== =====
(2) Principal and interest on this borrowing was fully hedged into Sterling at a floating rate at the time of issue.
(3) The principal amount of gross debt at 31 March 2016 was GBP3,552m (2014/15: GBP3,717m). Included in this is the principal amount of secured borrowings and other borrowings of non-recourse companies of GBP1,563m of which the borrowings of the partly-owned subsidiary, Hercules Unit Trust, not beneficially owned by the Group
is GBP109m.
(4) Included within cash and short-term deposits is the cash and short-term deposits of Hercules Unit Trust, of which GBP8m is the proportion not beneficially owned
by the Group.
(5) Cash and deposits not subject to a security interest amount to GBP93m (2014/15: GBP84m).
Maturity analysis of net debt
2016 2015
GBPm GBPm
============================================ ===== =====
Repayable: within one year and on demand 74 102
-------------------------------------------- ===== =====
Between: one and two years 504 71
-------------------------------------------- ----- -----
two and five years 1,491 1,707
-------------------------------------------- ----- -----
five and ten years 807 943
-------------------------------------------- ----- -----
ten and fifteen years 500 747
-------------------------------------------- ----- -----
fifteen and twenty years 385 6
-------------------------------------------- ----- -----
twenty and twenty five years - 373
-------------------------------------------- ===== =====
3,687 3,847
-------------------------------------------- ===== =====
Gross debt 3,761 3,949
-------------------------------------------- ===== =====
Interest rate and currency derivatives (30) (13)
-------------------------------------------- ----- -----
Cash and short-term deposits (114) (108)
============================================ ===== =====
Net debt 3,617 3,828
============================================ ===== =====
1.5% Convertible bond 2012 (maturity 2017)
On 10 September 2012 British Land (Jersey) Limited (the 2012 Issuer), a wholly-owned subsidiary of the Group, issued GBP400 million 1.5% guaranteed convertible bonds due 2017 (the 2012 bonds) at par. The 2012 Issuer is fully guaranteed by the Company in respect of the 2012 bonds.
Subject to their terms, the 2012 bonds are convertible into preference shares of the 2012 Issuer which are automatically transferred to the Company in exchange for ordinary shares in the Company or, at the Company's election, any combination of ordinary shares and cash. Bondholders may exercise their conversion right at any time up to (but excluding) the 20th dealing day before 10 September 2017 (the maturity date).
The initial exchange price was 693.07 pence per ordinary share. The exchange price is adjusted based on certain events.
From 25 September 2015, the Company has the option to redeem the 2012 bonds at par if the Company's share price has traded above 130% of the exchange price for a specified period, or at any time once 85% by nominal value of the 2012 bonds have been converted, redeemed, or purchased and cancelled. The 2012 bonds will be redeemed at par on 10 September 2017 (the maturity date) if they have not already been converted, redeemed or purchased and cancelled. No redemption of the bonds occurred in the year.
0% Convertible bond 2015 (maturity 2020)
On 9 June 2015 British Land (White) 2015 Limited (the 2015 Issuer), a wholly owned subsidiary of the Group, issued GBP350 million zero coupon guaranteed convertible bonds due 2020 (the 2015 bonds) at par. The 2015 Issuer is fully guaranteed by the Company in respect of the 2015 bonds.
Subject to their terms, the 2015 bonds are convertible into preference shares of the Issuer which are automatically transferred to the Company in exchange for ordinary shares in the Company or, at the Company's election, any combination of ordinary shares and cash. From 20 July 2015 up to and including 29 June 2018, a bondholder may exercise its conversion right if the share price has traded at a level exceeding 130% of the exchange price for a specified period. Thereafter, and up to but excluding the 7th dealing day before 9 June 2020 (the maturity date), a bondholder may convert at any time.
The initial exchange price was 1103.32 pence per ordinary share. The exchange price is adjusted based on certain events (such as the Company paying dividends in any year above 14.18 pence per ordinary share).
From 30 June 2018, the Company has the option to redeem the 2015 bonds at par if the Company's share price has traded above 130% of the exchange price for a specified period, or at any time once 85% by nominal value of the 2015 bonds have been converted, redeemed, or purchased and cancelled. The 2015 bonds will be redeemed at par on 9 June 2020 (the maturity date) if they have not already been converted, redeemed or purchased and cancelled.
Fair value and book value of net debt
2016 2015
------------------------------ -------------------------- --------------------------
Fair Book Fair Book
value value Difference value value Difference
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------ ------ ------ ---------- ------ ------ ----------
Debentures and unsecured
bonds 1,637 1,613 24 1,925 1,785 140
------------------------------ ------ ------ ---------- ------ ------ ----------
Convertible bonds 779 779 - 493 493 -
------------------------------ ------ ------ ---------- ------ ------ ----------
Bank debt and other
floating rate debt 1,384 1,369 15 1,691 1,671 20
------------------------------ ------ ------ ---------- ------ ------ ----------
Gross debt 3,800 3,761 39 4,109 3,949 160
------------------------------ ------ ------ ---------- ------ ------ ----------
Interest rate and currency
derivative liabilities 137 137 - 126 126 -
------------------------------ ------ ------ ---------- ------ ------ ----------
Interest rate and currency
derivative assets (167) (167) - (139) (139) -
------------------------------ ------ ------ ---------- ------ ------ ----------
Cash and short-term
deposits (114) (114) - (108) (108) -
------------------------------ ------ ------ ---------- ------ ------ ----------
Net debt 3,656 3,617 39 3,988 3,828 160
------------------------------ ------ ------ ---------- ------ ------ ----------
Net debt attributable
to non-controlling interests (106) (104) (2) (192) (190) (2)
------------------------------ ------ ------ ---------- ------ ------ ----------
Net debt attributable
to shareholders of the
Company 3,550 3,513 37 3,796 3,638 158
------------------------------ ------ ------ ---------- ------ ------ ----------
The fair values of debt, debentures and the convertible bonds have been established by obtaining quoted market prices from brokers. The bank debt and loan notes have been valued assuming they could be renegotiated at contracted margins. The derivatives have been valued by calculating the present value of expected future cash flows, using appropriate market discount rates, by an independent treasury advisor.
Short-term debtors and creditors and other investments have been excluded from the disclosures on the basis that the fair value is equivalent
to the book value.
Group loan to value (LTV)
2016 2015
GBPm GBPm
============================================== ====== ======
Group loan to value (LTV) 25% 28%
============================================== ====== ======
Principal amount of gross debt 3,552 3,717
---------------------------------------------- ------ ------
Less debt attributable to non-controlling
interests (109) (200)
---------------------------------------------- ------ ------
Less cash and short-term deposits (balance
sheet) (114) (108)
---------------------------------------------- ------ ------
Plus cash attributable to non-controlling
interests 8 10
============================================== ====== ======
Total net debt for LTV calculation 3,337 3,419
============================================== ====== ======
Group property portfolio valuation (note 7) 10,111 9,509
---------------------------------------------- ------ ------
Investments in joint ventures and funds (note
8) 3,353 2,901
---------------------------------------------- ------ ------
Other investments (note 9) 142 379
---------------------------------------------- ------ ------
Less property and investments attributable
to non-controlling interests (384) (528)
============================================== ====== ======
Total assets for LTV calculation 13,222 12,261 ============================================== ====== ======
Proportionally consolidated loan to value (LTV)
2016 2015
GBPm GBPm
================================================ ====== ======
Proportionally consolidated loan to value
(LTV) 32% 35%
================================================ ====== ======
Principal amount of gross debt 5,217 5,404
------------------------------------------------ ------ ------
Less debt attributable to non-controlling
interests (128) (200)
------------------------------------------------ ------ ------
Less cash and short-term deposits (353) (300)
------------------------------------------------ ------ ------
Plus cash attributable to non-controlling
interests 9 10
================================================ ====== ======
Total net debt for proportional LTV calculation 4,745 4,914
================================================ ====== ======
Group property portfolio valuation (note 7) 10,111 9,509
------------------------------------------------ ------ ------
Share of property of joint ventures and funds
(note 7) 4,937 4,714
------------------------------------------------ ------ ------
Other investments (note 9) 142 379
------------------------------------------------ ------ ------
Less other investments attributable to joint
ventures and funds (4) (123)
------------------------------------------------ ------ ------
Less property attributable to non-controlling
interests (400) (546)
================================================ ====== ======
Total assets for proportional LTV calculation 14,786 13,933
================================================ ====== ======
British Land Unsecured Financial Covenants
The two financial covenants applicable to the Group unsecured debt including convertible bonds are shown below:
2016 2015
GBPm GBPm
================================================== ===== =====
Net Borrowings not to exceed 175% of Adjusted
Capital and Reserves 34% 38%
================================================== ===== =====
Principal amount of gross debt 3,552 3,717
-------------------------------------------------- ----- -----
Less the relevant proportion of borrowings
of the partly-owned subsidiary / non-controlling
interests (109) (200)
-------------------------------------------------- ----- -----
Less cash and deposits (balance sheet) (114) (108)
-------------------------------------------------- ----- -----
Plus the relevant proportion of cash and deposits
of the partly-owned subsidiary / non-controlling
interests 8 10
================================================== ===== =====
Net Borrowings 3,337 3,419
================================================== ===== =====
Share capital and reserves (balance sheet) 9,619 8,565
-------------------------------------------------- ----- -----
EPRA deferred tax adjustment (EPRA Table A) 5 13
-------------------------------------------------- ----- -----
Trading property surpluses (EPRA Table A) 93 96
-------------------------------------------------- ----- -----
Exceptional refinancing charges (see below) 287 300
-------------------------------------------------- ----- -----
Fair value adjustments of financial instruments
(EPRA Table A) 198 257
-------------------------------------------------- ----- -----
Less reserves attributable to non-controlling
interests (balance sheet) (277) (333)
================================================== ===== =====
Adjusted Capital and Reserves 9,925 8,898
================================================== ===== =====
In calculating Adjusted Capital and Reserves for the purpose of the unsecured debt financial covenants, there is an adjustment of GBP287m (2014/15: GBP300m) to reflect the cumulative net amortised exceptional items relating to the refinancings in the years ended 31 March 2005, 2006 and 2007.
2016 2015
GBPm GBPm
===================================================== ======= =======
Net Unsecured Borrowings not to exceed 70%
of Unencumbered Assets 29% 28%
===================================================== ======= =======
Principal amount of gross debt 3,552 3,717
----------------------------------------------------- ------- -------
Less cash and deposits not subject to a security
interest (being GBP93m less the relevant proportion
of cash and deposits of the partly owned subsidiary
/ non-controlling interests of GBP5m) (88) (77)
----------------------------------------------------- ------- -------
Less principal amount of secured and non-recourse
borrowings (1,563) (1,906)
===================================================== ======= =======
Net Unsecured Borrowings 1,901 1,734
===================================================== ======= =======
Group property portfolio valuation (note 7) 10,111 9,509
----------------------------------------------------- ------- -------
Investments in joint ventures and funds (note
8) 3,353 2,901
----------------------------------------------------- ------- -------
Other investments (note 9) 142 379
----------------------------------------------------- ------- -------
Less investments in joint ventures (note 8) (3,348) (2,869)
----------------------------------------------------- ------- -------
Less encumbered assets (note 7) (3,803) (3,844)
===================================================== ======= =======
Unencumbered Assets 6,455 6,076
===================================================== ======= =======
Reconciliation of movement in Group net debt for the year ended 31 March 2016
Arrangement
Cash Business Foreign Fair costs
2015 flows combinations Transfers3 exchange value amortisation 2016
====================== ===== ====== ============== ========== ========= ====== ============= =====
Short term borrowings 102 (104) - 74 2 - - 74
---------------------- ----- ------ -------------- ---------- --------- ------ ------------- -----
Long term borrowings 3,847 (98) - (74) 14 (9) 7 3,687
---------------------- ----- ------ -------------- ---------- --------- ------ ------------- -----
Derivatives1 (13) 22 - - (13) (26) - (30)
====================== ===== ====== ============== ========== ========= ====== ============= =====
Total liabilities
from financing
activities 3,936 (180) - - 3 (35) 7 3,731
---------------------- ----- ------ -------------- ---------- --------- ------ ------------- -----
Cash and cash
equivalents (108) (6) - - - - - (114)
====================== ===== ====== ============== ========== ========= ====== ============= =====
Net debt 3,828 (186) - - 3 (35) 7 3,617
====================== ===== ====== ============== ========== ========= ====== ============= =====
Reconciliation of movement in Group net debt for the year ended 31 March 2015
Arrangement
Cash Business Foreign Fair costs
2014 flows combinations Transfers3 exchange value amortisation 2015
====================== ===== ====== ============= ========== ========= ====== ============= =====
Short term borrowings 495 (495) - 102 - - - 102
---------------------- ----- ------ ------------- ---------- --------- ------ ------------- -----
Long term borrowings 2,803 616 379 (102) 40 104 7 3,847
---------------------- ----- ------ ------------- ---------- --------- ------ ------------- -----
Derivatives2 25 (4) - - (47) 13 - (13)
====================== ===== ====== ============= ========== ========= ====== ============= =====
Total liabilities
from financing
activities 3,323 117 379 - (7) 117 7 3,936 ---------------------- ----- ------ ------------- ---------- --------- ------ ------------- ----- Cash and cash equivalents (142) 34 - - - - - (108) ====================== ===== ====== ============= ========== ========= ====== ============= ===== Net debt 3,181 151 379 - (7) 117 7 3,828 ====================== ===== ====== ============= ========== ========= ====== ============= =====
(1) Cash flows on derivatives include GBP7m of net receipts on derivative interest.
(2) Cash flows on derivatives include GBP8m of net receipts on derivative interest.
(3) Transfers comprises debt maturing from long term to short term borrowings.
Fair value hierarchy
The table below provides an analysis of financial instruments carried at fair value, by the valuation method. The fair value hierarchy levels are defined in note 7.
2016 2015
--------------------- -------------------------- --------------------------
Level Level Level Level Level Level
1 2 3 Total 1 2 3 Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------------- ----- ----- ----- ----- ----- ----- ----- -----
Interest rate and
currency derivative
assets - (167) - (167) - (139) - (139)
--------------------- ----- ----- ----- ----- ----- ----- ----- -----
Other investments
- held for trading - - (101) (101) - - (99) (99)
--------------------- ----- ----- ----- ----- ----- ----- ----- -----
Assets - (167) (101) (268) - (139) (99) (238)
--------------------- ----- ----- ----- ----- ----- ----- ----- -----
Interest rate and
currency derivative
liabilities - 137 - 137 - 126 - 126
--------------------- ----- ----- ----- ----- ----- ----- ----- -----
Convertible bonds 779 - - 779 493 - - 493
--------------------- ----- ----- ----- ----- ----- ----- ----- -----
Liabilities 779 137 - 916 493 126 - 619
--------------------- ----- ----- ----- ----- ----- ----- ----- -----
Total 779 (30) (101) 648 493 (13) (99) 381
--------------------- ----- ----- ----- ----- ----- ----- ----- -----
Categories of financial instruments
2016 2015
GBPm GBPm
=============================================== ======= =======
Financial assets
----------------------------------------------- ------- -------
Fair value through income statement
----------------------------------------------- ------- -------
Other investments - held for trading 101 99
----------------------------------------------- ------- -------
Derivatives in designated hedge accounting
relationships 164 139
----------------------------------------------- ------- -------
Derivatives not in designated hedge accounting
relationships 3 -
----------------------------------------------- ------- -------
Amortised cost
----------------------------------------------- ------- -------
Trade and other debtors 24 16
----------------------------------------------- ------- -------
Cash and short term deposits 114 108
----------------------------------------------- ------- -------
Other investments - loans and receivables 41 280
=============================================== ======= =======
447 642
----------------------------------------------- ------- -------
Financial liabilities
----------------------------------------------- ------- -------
Fair value through income statement
----------------------------------------------- ------- -------
Convertible bonds (779) (493)
----------------------------------------------- ------- -------
Derivatives in designated hedge accounting
relationships (137) (126)
----------------------------------------------- ------- -------
Amortised cost
----------------------------------------------- ------- -------
Gross debt (2,982) (3,456)
----------------------------------------------- ------- -------
Head leases payable (46) (41)
----------------------------------------------- ------- -------
Creditors (133) (178)
=============================================== ======= =======
(4,077) (4,294)
=============================================== ======= =======
Total (3,630) (3,652)
=============================================== ======= =======
Gains and losses on financial instruments, as classed above, are disclosed in note 5 (net financing costs), note 10 (debtors), note 4 (valuation movements on property), the consolidated income statement and the consolidated statement of comprehensive income. The Directors consider that the carrying amounts of other investments and head leases payable are approximate to their fair value, and that the carrying amounts are recoverable.
Maturity of committed undrawn borrowing facilities
2016 2015
GBPm GBPm
=============================================== ===== =====
Maturity date: over five years - -
----------------------------------------------- ----- -----
between four and five years 1,113 930
----------------------------------------------- ----- -----
between three and four years 95 -
=============================================== ===== =====
Total facilities available for more than three
years 1,208 930
=============================================== ===== =====
Between two and three years 85 61
----------------------------------------------- ----- -----
Between one and two years - 235
----------------------------------------------- ----- -----
Within one year 60 10
=============================================== ===== =====
Total 1,353 1,236
=============================================== ===== =====
The above facilities are comprised of British Land undrawn facilities of GBP1,150m, plus undrawn facilities of Hercules Unit Trust totalling GBP203m.
15 Dividend
The fourth quarter interim dividend of 7.09 pence per share, totalling GBP73m (2014/15: 6.92 pence per share, totalling GBP71m) was approved by the Board
on 16 May 2016 and is payable on 5 August 2016 to shareholders on the register at the close of business on 1 July 2016.
The Board will announce the availability of the Scrip Dividend Alternative, if available, via the Regulatory News Service and on its website (www.britishland.com/dividends), no later than four business days before the ex-dividend date of 30 June 2016. The Board expects to announce the split between Property Income Distributions (PID) and non-PID income at that time. Any Scrip Dividend Alternative will not be enhanced. PID dividends are paid, as required by REIT legislation, after deduction of withholding tax at the basic rate (currently 20%), where appropriate. Certain classes of shareholders may be able to elect to receive dividends gross. Please refer to our website www.britishland.com/dividends for details.
Pence
per 2016 2015
Payment date Dividend share GBPm GBPm
====================== ================= ====== ===== =====
Current year dividends
----------------------------------------- ------ ----- -----
05.08.2016 2016 4th interim 7.09
---------------------- ----------------- ------ ----- -----
06.05.2016 2016 3rd interim 7.09
---------------------- ----------------- ------ ----- -----
12.02.2016 2016 2nd interim 7.09 73
---------------------- ----------------- ------ ----- -----
06.11.2015 2016 1st interim 7.09 72
---------------------- ----------------- ====== ----- -----
28.36
---------------------------------------- ====== ----- -----
Prior year dividends
---------------------- ----------------- ------ ----- -----
07.08.2015 2015 4th interim 6.921 71
---------------------- ----------------- ------ ----- -----
06.05.2015 2015 3rd interim 6.92 71
---------------------- ----------------- ------ ----- -----
13.02.2015 2015 2nd interim 6.92 71
---------------------- ----------------- ------ ----- -----
07.11.2014 2015 1st interim 6.92 70
---------------------- ----------------- ====== ----- -----
27.68
---------------------------------------- ====== ----- -----
08.08.2014 2014 4th interim 6.751 68 ---------------------- ----------------- ------ ----- ----- Dividends in consolidated statement of changes in equity 287 277 ----------------------------------------- ------ ----- ----- Dividends settled in shares (52) (49) ========================================= ====== ===== ===== Dividends settled in cash 235 228 ----------------------------------------- ------ ----- ----- Timing difference relating to payment of withholding tax - - ========================================= ====== ===== ===== Dividends in cash flow statement 235 228 ========================================= ====== ===== =====
(1) Scrip alternative treated as non-PID for this dividend.
16 Share capital and reserves
2016 2015
======================================== ============= =============
Number of ordinary shares in issue at 1
April 1,031,788,286 1,019,766,481
---------------------------------------- ------------- -------------
Share issues 8,774,037 12,021,805
======================================== ============= =============
At 31 March 1,040,562,323 1,031,788,286
======================================== ============= =============
Of the issued 25p ordinary shares, 627 shares were held in the ESOP trust (2014/15: 98,453), 11,266,245 shares were held as treasury shares (2014/15: 11,266,245) and 1,029,295,451 shares were in free issue (2014/15: 1,020,423,588). No treasury shares were acquired by the ESOP trust during the year. All issued shares are fully paid.
Hedging and translation reserve
The hedging and translation reserve comprises the effective portion of the cumulative net change in the fair value of cash flow and foreign currency hedging instruments, as well as all foreign exchange differences arising from the translation of the financial statements of foreign operations.
The foreign exchange differences also include the translation of the liabilities that hedge the Company's net investment in a foreign subsidiary.
Revaluation reserve
The revaluation reserve relates to owner-occupied properties and investments in joint ventures and funds.
Merger reserve
This comprises the premium on the share placing in March 2013. No share premium is recorded in the Company's financial statements, through
the operation of the merger relief provisions of the Companies Act 2006.
17 Segment information
The Group allocates resources to investment and asset management according to the sectors it expects to perform over the medium term. Its three principal sectors are Offices, Retail and Canada Water. The Office sector includes residential, as this is often incorporated into Office schemes, and Retail includes leisure, for a similar rationale. Canada Water was added as a principal sector in the year, reflecting the key role the campus has in the strategy of the Group. Consequently the prior year comparatives in this note have been restated to reflect this additional principal sector.
The relevant gross rental income, net rental income, operating result and property assets, being the measures of segment revenue, segment result and segment assets used by the management of the business, are set out below. Management reviews the performance of the business principally on a proportionally consolidated basis, which includes the Group's share of joint ventures and funds on a line-by-line basis and excludes non-controlling interests in the Group's subsidiaries. The chief operating decision maker for the purpose of segment information is the Executive Committee.
Gross rental income is derived from the rental of buildings. Operating result is the net of net rental income, fee income and administrative expenses. No customer exceeded 10% of the Group's revenues in either year.
Segment result
Offices Retail Canada
and residential and leisure Water Other/unallocated Total
--------------------- ================== ============== ============ =================== ============
2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
===================== ======== ======== ====== ====== ===== ===== ========= ======== ===== =====
Gross rental
income
--------------------- -------- -------- ------ ------ ----- ----- --------- -------- ----- -----
British Land
Group 133 121 291 248 8 6 - - 432 375
--------------------- -------- -------- ------ ------ ----- ----- --------- -------- ----- -----
Share of joint
ventures and
funds 114 89 104 146 - - 4 8 222 243
===================== ======== ======== ====== ====== ===== ===== ========= ======== ===== =====
Total 247 210 395 394 8 6 4 8 654 618
===================== ======== ======== ====== ====== ===== ===== ========= ======== ===== =====
Net rental
income
--------------------- -------- -------- ------ ------ ----- ----- --------- -------- ----- -----
British Land
Group 124 112 277 233 7 6 - - 408 351
--------------------- -------- -------- ------ ------ ----- ----- --------- -------- ----- -----
Share of joint
ventures and
funds 110 85 99 141 - - 3 8 212 234
===================== ======== ======== ====== ====== ===== ===== ========= ======== ===== =====
Total 234 197 376 374 7 6 3 8 620 585
===================== ======== ======== ====== ====== ===== ===== ========= ======== ===== =====
Operating result
--------------------- -------- -------- ------ ------ ----- ----- --------- -------- ----- -----
British Land
Group 112 101 260 218 7 6 (46) (41) 333 284
--------------------- -------- -------- ------ ------ ----- ----- --------- -------- ----- -----
Share of joint
ventures and
funds 109 82 102 138 - - (1) 10 210 230
===================== ======== ======== ====== ====== ===== ===== ========= ======== ===== =====
Total 221 183 362 356 7 6 (47) (31) 543 514
===================== ======== ======== ====== ====== ===== ===== ========= ======== ===== =====
Reconciliation to Underlying 2016 2015
Profit GBPm GBPm
========================================= ====== ====== ===== ===== ========= ======== ===== =====
Operating result 543 514
--------------------- -------- -------- ------ ------ ----- ----- --------- -------- ----- -----
Net financing
costs (180) (201)
===================== ======== ======== ====== ====== ===== ===== ========= ======== ===== =====
Underlying
Profit 363 313
===================== ======== ======== ====== ====== ===== ===== ========= ======== ===== =====
Reconciliation
to profit on
ordinary activities
before taxation
===================== ======== ======== ====== ====== ===== ===== ========= ======== ===== =====
Underlying
Profit 363 313
--------------------- -------- -------- ------ ------ ----- ----- --------- -------- ----- -----
Capital and
other 954 1,460
--------------------- -------- -------- ------ ------ ----- ----- --------- -------- ----- -----
Underlying
Profit attributable
to non-controlling
interests 14 16
===================== ======== ======== ====== ====== ===== ===== ========= ======== ===== =====
Total profit on
ordinary activities
before taxation 1,331 1,789
=============================== ======== ====== ====== ===== ===== ========= ======== ===== =====
Of the total revenues above, GBP4m (2014/15: GBP8m) was derived from outside the UK.
Segment assets
Offices Retail Canada
and residential and leisure Water Other/unallocated Total
------------------ ================== ============== ============ =================== ================
2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
================== ======== ======== ====== ====== ===== ===== ========= ======== ======= =======
Property assets
------------------ -------- -------- ------ ------ ----- ----- --------- -------- ------- -------
British Land
Group 4,181 3,520 5,323 5,275 283 273 - - 9,787 9,068
------------------ -------- -------- ------ ------ ----- ----- --------- -------- ------- -------
Share of joint
ventures and
funds 2,843 2,530 2,018 2,039 - - - 40 4,861 4,609
================== ======== ======== ====== ====== ===== ===== ========= ======== ======= =======
Total 7,024 6,050 7,341 7,314 283 273 - 40 14,648 13,677
================== ======== ======== ====== ====== ===== ===== ========= ======== ======= =======
Reconciliation to net
assets
-------------------------------------- ------ ------ ----- ----- --------- -------- ------- -------
British Land 2016 2015
Group GBPm GBPm
================== ======== ======== ====== ====== ===== ===== ========= ======== ======= =======
Property assets 14,648 13,677
------------------ -------- -------- ------ ------ ----- ----- --------- -------- ------- -------
Other non-current
assets 138 256
================== ======== ======== ====== ====== ===== ===== ========= ======== ======= =======
Non-current
assets 14,786 13,933
================== ======== ======== ====== ====== ===== ===== ========= ======== ======= =======
Other net current
liabilities (257) (307)
------------------ -------- -------- ------ ------ ----- ----- --------- -------- ------- -------
Adjusted net
debt (4,765) (4,918)
------------------ -------- -------- ------ ------ ----- ----- --------- -------- ------- -------
Other non-current
liabilities (90) (73)
================== ======== ======== ====== ====== ===== ===== ========= ======== ======= =======
EPRA net assets
(undiluted) 9,674 8,635
============================ ======== ====== ====== ===== ===== ========= ======== ======= =======
Convertible dilution 400 400
============================ ======== ====== ====== ===== ===== ========= ======== ======= =======
EPRA net assets
(diluted) 10,074 9,035
---------------------------- -------- ------ ------ ----- ----- --------- -------- ------- -------
Non-controlling
interests 277 333
---------------------------- -------- ------ ------ ----- ----- --------- -------- ------- -------
EPRA adjustments (732) (803)
============================ ======== ====== ====== ===== ===== ========= ======== ======= =======
Net assets 9,619 8,565
============================ ======== ====== ====== ===== ===== ========= ======== ======= =======
SUPPLEMENTARY DISCLOSURES
Table A: Summary income statement and balance sheet
Summary income statement based on proportional consolidation for the year ended 31 March 2016
The following pro forma information is unaudited and does not form part of the consolidated primary statements or the notes thereto. It presents the results of the Group, with its share of the results of joint ventures and funds included on a line-by-line basis and excluding non-controlling interests.
Year ended 31 March Year ended 31 March
2016 2015
--------------- ================================================ =================================================
Joint Joint
ventures Less ventures Less
and non-controlling Proportionally and non-controlling Proportionally
Group funds interests consolidated Group funds interests consolidated
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
=============== ===== ======== =============== ============== ===== ========= =============== ==============
Gross rental
income 451 231 (28) 654 399 250 (31) 618
--------------- ----- -------- --------------- -------------- ----- --------- --------------- --------------
Property
operating
expenses (26) (9) 1 (34) (24) (10) 1 (33)
--------------- ===== ======== =============== ============== ===== ========= =============== ==============
Net rental
income 425 222 (27) 620 375 240 (30) 585
--------------- ----- -------- --------------- -------------- ----- --------- --------------- --------------
Administrative
expenses (93) (5) 4 (94) (85) (4) 1 (88)
--------------- ----- -------- --------------- -------------- ----- --------- --------------- --------------
Net fees and
other income 16 - 1 17 15 - 2 17
--------------- ===== ======== =============== ============== ===== ========= =============== ==============
Ungeared Income
Return 348 217 (22) 543 305 236 (27) 514
--------------- ----- -------- --------------- -------------- ----- --------- --------------- --------------
Net financing
costs (106) (82) 8 (180) (105) (107) 11 (201)
=============== ===== ======== =============== ============== ===== ========= =============== ==============
Underlying
Profit 242 135 (14) 363 200 129 (16) 313
=============== ===== ======== =============== ============== ===== ========= =============== ==============
Underlying
taxation 2 - - 2 - - - -
=============== ===== ======== =============== ============== ===== ========= =============== ==============
Underlying
Profit after
taxation 244 135 (14) 365 200 129 (16) 313
=============== ===== ======== =============== ============== ===== ========= =============== ==============
Valuation
movement 861 1,473
--------------- ----- -------- --------------- -------------- ----- --------- --------------- --------------
Other capital
and taxation
(net)1 48 50
=============== ===== ======== =============== ============== ===== ========= =============== ==============
Capital and
other 909 1,523
=============== ===== ======== =============== ============== ===== ========= =============== ==============
Total return 1,274 1,836
=============== ===== ======== =============== ============== ===== ========= =============== ==============
(1) Includes other comprehensive income, movement in dilution of share options and the movement in items excluded for EPRA NAV.
Table A (continued)
Summary balance sheet based on proportional consolidation as at 31 March 2016
The following pro forma information is unaudited and does not form part of the consolidated primary statements or the notes thereto. It presents
the composition of the EPRA net assets of the Group, with its share of the net assets of the joint venture and fund assets and liabilities included
on a line-by-line basis, and excluding non-controlling interests, and assuming full dilution.
Mark-to-market
on effective
cash
Share flow EPRA EPRA
of hedges Net Net
joint and Valuation assets assets
ventures Less related Convertible surplus 31 31
& non-controlling Share Deferred debt Head bond on trading March March
Group funds interests options tax adjustments leases adjustment properties 2016 2015
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============== ======= ======== =============== ======= ======== ============== ====== =========== ========== ======= =======
Retail
properties 5,662 2,109 (400) - - - (30) - - 7,341 7,314
-------------- ------- -------- --------------- ------- -------- -------------- ------ ----------- ---------- ------- -------
Office
properties 4,118 2,835 - - - - (16) - 87 7,024 6,050
-------------- ------- -------- --------------- ------- -------- -------------- ------ ----------- ---------- ------- -------
Canada
Water
properties 283 - - - - - (6) - 6 283 273
-------------- ------- -------- --------------- ------- -------- -------------- ------ ----------- ---------- ------- -------
Other
properties - - - - - - - - - - 40
-------------- ======= ======== =============== ======= ======== ============== ====== =========== ========== ======= =======
Total
properties 10,063 4,944 (400) - - - (52) - 93 14,648 13,677
-------------- ------- -------- --------------- ------- -------- -------------- ------ ----------- ---------- ------- -------
Investments
in joint
ventures
and funds 3,353 (3,353) - - - - - - - - -
-------------- ------- -------- --------------- ------- -------- -------------- ------ ----------- ---------- ------- -------
Other
investments 142 (4) - - - - - - - 138 256
-------------- ------- -------- --------------- ------- -------- -------------- ------ ----------- ---------- ------- -------
Other net
(liabilities)
assets (322) (121) 3 36 5 - 52 - - (347) (380)
-------------- ------- -------- --------------- ------- -------- -------------- ------ ----------- ---------- ------- -------
Net debt (3.617) (1,466) 120 - - 198 - - - (4,765) (4,918)
-------------- ------- -------- --------------- ------- -------- -------------- ------ ----------- ---------- ------- -------
Dilution
due to
convertible
bond - - - - - - - 400 - 400 400
============== ======= ======== =============== ======= ======== ============== ====== =========== ========== ======= =======
Net assets 9,619 - (277) 36 5 198 - 400 93 10,074 9,035
============== ======= ======== =============== ======= ======== ============== ====== =========== ========== ======= =======
EPRA NAV
per share
(note 2) 919p 829p
============== ======= ======== =============== ======= ======== ============== ====== =========== ========== ======= =======
EPRA Net Assets Movement
Year ended Year ended
31 March 31 March
2016 2015
-------------------------------------- ============== =============
Pence Pence
per per
GBPm share GBPm share
====================================== ====== ====== ===== ======
Opening EPRA NAV 9,035 829 7,027 688
-------------------------------------- ------ ------ ----- ------
Income return 365 34 313 31
-------------------------------------- ------ ------ ----- ------
Capital return 909 77 1,523 145
-------------------------------------- ------ ------ ----- ------
Dividend paid (235) (21) (228) (27)
-------------------------------------- ------ ------ ----- ------
Dilution due to 2012 convertible bond - - 400 (8)
====================================== ====== ====== ===== ======
Closing EPRA NAV 10,074 919 9,035 829
====================================== ====== ====== ===== ======
Table B: EPRA Performance measures
EPRA Performance measures summary table
2016 2015
-------------------------------------- ============ ============
Pence Pence
per per
GBPm share GBPm share
====================================== ==== ====== ==== ======
EPRA Earnings - basic 365 35.6 313 30.8
---------------------- -------------- ---- ------ ---- ------
- diluted 371 34.1 319 29.5
===================================== ==== ====== ==== ======
EPRA Net Initial Yield 4.1% 4.3%
-------------------------------------- ---- ------ ---- ------
EPRA 'topped-up' Net Initial Yield 4.5% 4.8%
-------------------------------------- ---- ------ ---- ------
EPRA Vacancy Rate 2.0% 2.9%
====================================== ==== ====== ==== ======
2016 2015
------------ =============== ===============
Net Net
asset asset
value value
per per
Net share Net share
assets pence assets pence
============ ======= ====== ======= ======
EPRA NAV 10,074 919 9,035 829
------------ ------- ------ ------- ------
EPRA NNNAV 9,640 880 8,359 767
============ ======= ====== ======= ======
Calculation and reconciliation of EPRA/IFRS earnings and EPRA/IFRS earnings per share
2016 2015
GBPm GBPm
==================================================== ====== =====
Profit attributable to the shareholders of
the Company 1,345 1,710
---------------------------------------------------- ------ -----
Exclude:
---------------------------------------------------- ------ -----
Group - current taxation (2) 1
---------------------------------------------------- ------ -----
Group - deferred taxation (31) 23
---------------------------------------------------- ------ -----
Joint ventures and funds - current taxation 1 2
---------------------------------------------------- ------ -----
Joint ventures and funds - deferred taxation - (4)
---------------------------------------------------- ------ -----
Group - valuation movement (616) (884)
---------------------------------------------------- ------ -----
Group - profit on disposal of investment properties
and investments (35) (20)
---------------------------------------------------- ------ -----
Group - profit on disposal of trading properties (10) (6)
---------------------------------------------------- ------ -----
Joint ventures and funds - net valuation movement
(including result on disposals) (263) (595)
---------------------------------------------------- ------ -----
Changes in fair value of financial instruments
and associated close-out costs (31) 47
---------------------------------------------------- ------ -----
Non-controlling interests in respect of the
above 5 39
==================================================== ====== =====
Underlying Profit 363 313
==================================================== ====== =====
Group - underlying current taxation 2 -
==================================================== ====== =====
EPRA earnings - basic 365 313
==================================================== ====== =====
Dilutive effect of 2012 convertible bond 6 6
==================================================== ====== =====
EPRA earnings - diluted 371 319
==================================================== ====== =====
Profit attributable to the shareholders of
the Company 1,345 1,710
---------------------------------------------------- ------ -----
Dilutive effect of 2012 convertible bond 6 -
==================================================== ====== =====
IFRS earnings - diluted 1,351 1,710
==================================================== ====== =====
2016 2015
Number Number
million million
================================================= ======== ========
Weighted average number of shares 1,036 1,027
------------------------------------------------- -------- --------
Adjustment for Treasury shares (11) (11)
================================================= ======== ========
IFRS/EPRA Weighted average number of shares
(basic) 1,025 1,016
================================================= ======== ========
Dilutive effect of share options 2 2
------------------------------------------------- -------- --------
Dilutive effect of ESOP shares 4 4
------------------------------------------------- -------- --------
Dilutive effect of 2012 convertible bond 58 -
================================================= ======== ========
IFRS Weighted average number of shares (diluted) 1,089 1,022
================================================= ======== ========
Dilutive effect of 2012 convertible bond - 58
================================================= ======== ========
EPRA Weighted average number of shares (diluted) 1,089 1,080
================================================= ======== ========
Net assets per share
2016 2015
-------------------------------------- ============== =============
Pence Pence
per per
GBPm share GBPm share
====================================== ====== ====== ===== ======
Balance sheet net assets 9,619 8,565
====================================== ====== ====== ===== ======
Deferred tax arising on revaluation
movements 5 13
-------------------------------------- ------ ------ ----- ------
Mark-to-market on effective cash flow
hedges and related debt adjustments 198 257
-------------------------------------- ------ ------ ----- ------
Dilution effect of share options 36 37
-------------------------------------- ------ ------ ----- ------
Surplus on trading properties 93 96
-------------------------------------- ------ ------ ----- ------
Convertible bond adjustment 400 400
-------------------------------------- ------ ------ ----- ------
Less non-controlling interests (277) (333)
====================================== ====== ====== ===== ======
EPRA NAV 10,074 919 9,035 829
====================================== ====== ====== ===== ======
Deferred tax arising on revaluation
movements (24) (13)
-------------------------------------- ------ ------ ----- ------
Mark-to-market on effective cash flow
hedges and related debt adjustments (153) (257)
-------------------------------------- ------ ------ ----- ------
Mark-to-market on debt (257) (406)
====================================== ====== ====== ===== ======
EPRA NNNAV 9,640 880 8,359 767
====================================== ====== ====== ===== ======
EPRA NNNAV is the EPRA NAV adjusted to reflect the fair value of the debt and derivatives and to include the deferred taxation on revaluations and derivatives.
2016 2015
Number Number
million million
========================================= ======== ========
Number of shares at year end 1,040 1,031
----------------------------------------- -------- --------
Adjustment for treasury shares (11) (11)
========================================= ======== ========
IFRS / EPRA number of shares (basic) 1,029 1,020
========================================= ======== ========
Dilutive effect of share options 2 4
----------------------------------------- -------- --------
Dilutive effect of ESOP shares 7 8
----------------------------------------- -------- --------
Dilutive effect of 2012 convertible bond 58 -
========================================= ======== ========
IFRS number of shares (diluted) 1,096 1,032
========================================= ======== ========
Dilutive effect of 2012 convertible bond - 58
========================================= ======== ========
EPRA number of shares (diluted) 1,096 1,090
========================================= ======== ========
EPRA Net Initial Yield and 'topped-up' Net Initial Yield
2016 2015
GBPm GBPm
================================================ ====== =======
Investment property - wholly-owned 9,787 9,068
------------------------------------------------ ------ -------
Investment property - share of joint ventures
and funds 4,861 4,569
------------------------------------------------ ------ -------
Less developments, residential and land (894) (1,148)
------------------------------------------------ ====== =======
Completed property portfolio 13,754 12,489
------------------------------------------------ ------ -------
Allowance for estimated purchasers' costs 985 784
================================================ ====== =======
Gross up completed property portfolio valuation 14,739 13,273
================================================ ====== =======
Annualised cash passing rental income 607 575
------------------------------------------------ ------ -------
Property outgoings (8) (8)
================================================ ====== =======
Annualised net rents 599 567
================================================ ====== =======
Rent expiration of rent-free periods and fixed
uplifts1 63 64
================================================ ====== =======
'Topped-up' net annualised rent 662 631
------------------------------------------------ ------ -------
EPRA Net Initial Yield 4.1% 4.3%
------------------------------------------------ ------ -------
EPRA 'topped-up' Net Initial Yield 4.5% 4.8%
================================================ ====== =======
Including fixed/minimum uplifts received in
lieu of rental growth 24 26
================================================ ====== =======
Total 'topped-up' net rents 686 657
------------------------------------------------ ------ -------
Overall 'topped-up' Net Initial Yield 4.7% 4.9%
================================================ ====== =======
'Topped-up' net annualised rent 662 631
------------------------------------------------ ------ -------
ERV vacant space 14 20
------------------------------------------------ ------ -------
Reversions 42 18
================================================ ====== =======
Total ERV 718 669
------------------------------------------------ ------ -------
Net Reversionary Yield 4.9% 5.0%
================================================ ====== =======
(1) The weighted average period over which rent-free periods expire is 1 year (2014/15: 1 year).
The above is stated for the UK portfolio only.
EPRA Net Initial Yield (NIY) basis of calculation
EPRA NIY is calculated as the annualised net rent (on a cash flow basis), divided by the gross value of the completed property portfolio. The valuation of our completed property portfolio is determined by our external valuers as at 31 March 2016, plus an allowance for estimated purchaser's costs. Estimated purchaser's costs are determined by the relevant stamp duty liability, plus an estimate by our valuers of agent and legal fees on notional acquisition. The net rent deduction allowed for property outgoings is based on our valuers' assumptions on future recurring non-recoverable revenue expenditure.
In calculating the EPRA 'topped-up' NIY, the annualised net rent is increased by the total contracted rent from expiry of rent-free periods and future contracted rental uplifts where defined as not in lieu of growth. Overall 'topped-up' NIY is calculated by adding any other contracted future uplift to the 'topped-up' net annualised rent.
The net reversionary yield is calculated by dividing the total estimated rental value (ERV) for the completed property portfolio, as determined by our external valuers, by the gross completed property portfolio valuation.
The EPRA vacancy rate is calculated as the ERV of the unrented, lettable space as a proportion of the total rental value of the completed property portfolio.
EPRA Vacancy Rate
2016 2015
GBPm GBPm
=============================================== ===== =====
Annualised potential rental value of vacant
premises 14 20
----------------------------------------------- ----- -----
Annualised potential rental value for the
completed property portfolio 728 692
----------------------------------------------- ----- -----
EPRA Vacancy Rate 2.0% 2.9%
=============================================== ===== =====
The above is stated for the UK portfolio only.
----------------------------------------------- ----- -----
EPRA Cost Ratios
2016 2015
GBPm GBPm
================================================== ===== =====
Property operating expenses 25 23
-------------------------------------------------- ----- -----
Administrative expenses 90 84
-------------------------------------------------- ----- -----
Share of joint ventures and funds expenses 13 14
-------------------------------------------------- ----- -----
Performance & management fees (from joint
Less: ventures & funds) (9) (9)
------ ------------------------------------------ ----- -----
Net other fees and commissions (8) (8)
------------------------------------------------- ----- -----
Ground rent costs (3) (3)
================================================= ===== =====
EPRA Costs (including direct vacancy costs)
(A) 108 101
-------------------------------------------------- ----- -----
Direct vacancy costs (11) (11)
================================================== ===== =====
EPRA Costs (excluding direct vacancy costs)
(B) 97 90
-------------------------------------------------- ----- -----
Gross Rental Income less ground rent costs 429 374
-------------------------------------------------- ----- -----
Share of joint ventures and funds (GRI less
ground rent costs) 222 241
================================================== ===== =====
Total Gross Rental Income less ground rent
costs (C) 651 615
-------------------------------------------------- ----- -----
EPRA Cost Ratio (including direct vacancy
costs) (A/C) 16.6% 16.4%
-------------------------------------------------- ----- -----
EPRA Cost Ratio (excluding direct vacancy
costs) (B/C) 14.9% 14.6%
-------------------------------------------------- ----- -----
Overhead and operating expenses capitalised
(including share of joint ventures and funds) 4 -
================================================== ===== =====
In the current year, employee costs in relation to staff time on development projects have been capitalised into the base cost of relevant development assets.
Table C: Gross rental income
2016 2015
GBPm GBPm
============================================== ===== =====
Rent receivable 615 581
---------------------------------------------- ----- -----
Spreading of tenant incentives and guaranteed
rent increases 36 33
---------------------------------------------- ----- -----
Surrender premia 3 4
============================================== ===== =====
Gross rental income 654 618
============================================== ===== =====
The current and prior period information is presented on a proportionally consolidated basis, excluding non-controlling interests.
Table D: Property related capital expenditure
2016 2015
======================== ======================= =======================
Joint Joint
ventures ventures
and and
Group funds Total Group funds Total
======================== ===== ========= ===== ===== ========= =====
Acquisitions 238 - 238 147 - 147
------------------------ ----- --------- ----- ----- --------- -----
Development 104 58 162 64 83 147
------------------------ ----- --------- ----- ----- --------- -----
Like-for-like portfolio 99 6 105 67 23 90
------------------------ ----- --------- ----- ----- --------- -----
Other 25 15 40 25 8 33
------------------------ ----- --------- ----- ----- ========= =====
Total property related
capex 466 79 545 303 114 417
------------------------ ----- --------- ----- ----- ========= =====
The above is presented on a proportionally consolidated basis, excluding non-controlling interests and business combinations. The 'Other' category contains amounts owing to tenant incentives of GBP27m (2014/15: GBP18m), capitalised staff costs of GBP4m (2014/15: GBPnil) and capitalised interest of GBP9m (2014/15: GBP15m).
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AIMMTMBTBTLF
(END) Dow Jones Newswires
May 16, 2016 02:01 ET (06:01 GMT)
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