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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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| -4.80 | -1.22% | 388.20 | 388.20 | 388.60 | 395.00 | 386.00 | 395.00 | 2,291,704 | 16:35:27 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Real Estate Investment Trust | 418M | -1.04B | -1.1194 | -3.47 | 3.6B |
From Apr 2019 to Apr 2024
TIDMBLND
RNS Number : 6459W
British Land Co PLC
16 November 2017
The British Land Company PLC
Consolidated income statement
For the six months ended 30 September 2017
Hot Features
Premium
Six months ended Six months ended
30 September 2017 30 September 2016
Unaudited Unaudited
================================ ==== ============================= ===============================
Underlying Capital Underlying Capital
pre-tax1 and other Total pre-tax1 and other Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
================================ ==== ========== ========== ===== ========== ========== =======
Revenue 3 282 50 332 288 9 297
-------------------------------- ---- ---------- ---------- ----- ---------- ---------- -------
Costs 3 (68) (42) (110) (67) (6) (73)
================================ ==== ========== ========== ===== ========== ========== =======
3 214 8 222 221 3 224
-------------------------------- ---- ---------- ---------- ----- ---------- ---------- -------
Joint ventures and
funds
(see also below) 8 64 9 73 68 (199) (131)
-------------------------------- ---- ---------- ---------- ----- ---------- ---------- -------
Administrative expenses (40) - (40) (42) - (42)
-------------------------------- ---- ---------- ---------- ----- ---------- ---------- -------
Valuation movement 4 - 141 141 - (257) (257)
-------------------------------- ---- ---------- ---------- ----- ---------- ---------- -------
Profit on disposal
of investment properties
and investments - 20 20 - 27 27
-------------------------------- ---- ---------- ---------- ----- ---------- ---------- -------
Net financing costs
-------------------------------- ---- ---------- ---------- ----- ---------- ---------- -------
- financing income 5 - - - 2 32 34
-------------------------------- ---- ---------- ---------- ----- ---------- ---------- -------
- financing charges 5 (34) (144) (178) (43) (17) (60)
-------------------------------- ---- ========== ========== ===== ========== ========== =======
(34) (144) (178) (41) 15 (26)
================================ ==== ========== ========== ===== ========== ========== =======
Profit (loss) on
ordinary activities
before taxation 204 34 238 206 (411) (205)
-------------------------------- ---- ---------- ---------- ----- ---------- ---------- -------
Taxation 6 - 7 7 - 1 1
================================ ==== ========== ========== ===== ========== ========== =======
Profit (loss) for
the period after
taxation 245 (204)
================================ ==== ========== ========== ===== ========== ========== =======
Attributable to non-controlling
interests 6 - 6 7 (16) (9)
-------------------------------- ---- ---------- ---------- ----- ---------- ---------- -------
Attributable to shareholders
of the Company 198 41 239 199 (394) (195)
================================ ==== ========== ========== ===== ========== ========== =======
Earnings per share:
-------------------------------- ---- ---------- ---------- ----- ---------- ---------- -------
- basic 2 23.2p (19.0)p
-------------------------------- ---- ---------- ---------- ===== ---------- ---------- =======
- diluted 2 23.2p (20.3)p
-------------------------------- ---- ---------- ---------- ===== ---------- ---------- =======
All results derive from continuing operations.
Six months ended Six months ended
30 September 2017 30 September 2016
Unaudited Unaudited
======================== ==== ============================= =============================
Underlying Capital Underlying Capital
pre-tax1 and other Total pre-tax1 and other Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
======================== ==== ========== ========== ===== ========== ========== =====
Results of joint
ventures and funds
accounted for using
the equity method
------------------------ ==== ========== ========== ===== ========== ========== =====
Underlying Profit 64 - 64 68 - 68
------------------------ ==== ========== ========== ===== ========== ========== =====
Valuation movement 4 - 26 26 - (205) (205)
------------------------ ==== ========== ========== ===== ========== ========== =====
Capital financing
costs - (9) (9) - (6) (6)
------------------------ ==== ========== ========== ===== ========== ========== =====
(Loss) profit on
disposal of investment
properties, trading
properties
and investments - (8) (8) - 12 12
------------------------ ==== ========== ========== ===== ========== ========== =====
Taxation - - - - - -
======================== ==== ========== ========== ===== ========== ========== =====
8 64 9 73 68 (199) (131)
======================== ==== ========== ========== ===== ========== ========== =====
1 See definition in glossary.
consolidated statement OF COMPREHENSIVE INCOME
For the six months ended 30 September 2017
Six months Six months
ended 30 ended 30
September September
2017 2016
Unaudited Unaudited
GBPm GBPm
========================================================== ========== ==========
Profit (loss) for the period after taxation 245 (204)
========================================================== ========== ==========
Other comprehensive income (expense):
========================================================== ---------- ----------
Items that will not be reclassified subsequently to
profit or loss:
========================================================== ========== ==========
Net actuarial gain (loss) on pension scheme 4 (23)
========================================================== ========== ==========
Valuation movements on owner-occupied properties (3) (2)
========================================================== ========== ==========
1 (25)
========================================================== ========== ==========
Items that may be reclassified subsequently to profit
or loss:
========================================================== ========== ==========
Gains (losses) on cash flow hedges
========================================================== ========== ==========
- Group 7 (47)
========================================================== ========== ==========
- Joint ventures and funds 1 (3)
========================================================== ========== ==========
8 (50)
========================================================== ---------- ----------
Transferred to the income statement (cash flow hedges)
========================================================== ---------- ----------
- Interest rate derivatives 129 10
========================================================== ========== ==========
129 10
========================================================== ---------- ----------
Exchange differences on translation of foreign operations
========================================================== ---------- ----------
- Hedging and translation - -
========================================================== ========== ==========
- -
========================================================== ---------- ----------
Deferred tax on items of other comprehensive income (4) -
========================================================== ---------- ----------
Other comprehensive profit (expense) for the period 134 (65)
========================================================== ========== ==========
Total comprehensive income (expense) for the period 379 (269)
========================================================== ========== ==========
Attributable to non-controlling interests 7 (10)
---------------------------------------------------------- ---------- ----------
Attributable to shareholders of the Company 372 (259)
========================================================== ========== ==========
consolidated BALANCE SHEET
AS AT 30 SEPTEMBER 2017
30 September 31 March
2017 2017
Unaudited Audited
Note GBPm GBPm
=================================================== ==== ============ ========
ASSETS
--------------------------------------------------- ---- ------------ --------
Non-current assets
--------------------------------------------------- ---- ------------ --------
Investment and development properties 7 9,373 9,073
--------------------------------------------------- ---- ------------ --------
Owner-occupied property 7 91 94
--------------------------------------------------- ---- ------------ --------
9,464 9,167
--------------------------------------------------- ---- ------------ --------
Other non-current assets
--------------------------------------------------- ---- ------------ --------
Investments in joint ventures and funds 8 2,764 2,766
--------------------------------------------------- ---- ------------ --------
Other investments 9 158 154
--------------------------------------------------- ---- ------------ --------
Deferred tax assets 5 4
--------------------------------------------------- ---- ------------ --------
Interest rate and currency derivative assets 10 175 217
--------------------------------------------------- ---- ------------ --------
12,566 12,308
--------------------------------------------------- ---- ------------ --------
Current assets
--------------------------------------------------- ---- ------------ --------
Joint venture held for sale 8 - 540
--------------------------------------------------- ---- ------------ --------
Trading properties 7 330 334
--------------------------------------------------- ---- ------------ --------
Debtors 49 171
--------------------------------------------------- ---- ------------ --------
Cash and short-term deposits 10 119 114
--------------------------------------------------- ---- ------------ --------
498 1,159
--------------------------------------------------- ---- ------------ --------
Total assets 13,064 13,467
--------------------------------------------------- ---- ------------ --------
LIABILITIES
--------------------------------------------------- ---- ------------ --------
Current liabilities
--------------------------------------------------- ---- ------------ --------
Short-term borrowings and overdrafts 10 (59) (464)
--------------------------------------------------- ---- ------------ --------
Creditors (328) (458)
--------------------------------------------------- ---- ------------ --------
Corporation tax (28) (30)
--------------------------------------------------- ---- ------------ --------
(415) (952)
--------------------------------------------------- ---- ------------ --------
Non-current liabilities
--------------------------------------------------- ---- ------------ --------
Debentures and loans 10 (2,813) (2,817)
--------------------------------------------------- ---- ------------ --------
Other non-current liabilities (73) (78)
--------------------------------------------------- ---- ------------ --------
Interest rate and currency derivative liabilities 10 (131) (144)
--------------------------------------------------- ---- ------------ --------
(3,017) (3,039)
--------------------------------------------------- ---- ------------ --------
Total liabilities (3,432) (3,991)
--------------------------------------------------- ---- ------------ --------
Net assets 9,632 9,476
--------------------------------------------------- ---- ------------ --------
EQUITY
--------------------------------------------------- ---- ------------ --------
Share capital 257 260
--------------------------------------------------- ---- ------------ --------
Share premium 1,299 1,298
--------------------------------------------------- ---- ------------ --------
Merger reserve 213 213
--------------------------------------------------- ---- ------------ --------
Other reserves 32 (97)
--------------------------------------------------- ---- ------------ --------
Retained earnings 7,577 7,547
=================================================== ==== ============ ========
Equity attributable to shareholders of the Company 9,378 9,221
=================================================== ==== ============ ========
Non-controlling interests 254 255
--------------------------------------------------- ---- ------------ --------
Total equity 9,632 9,476
=================================================== ==== ============ ========
EPRA NAV per share* 939p 915p
=================================================== ==== ============ ========
* See definition in glossary.
consolidated statement OF CASH FLOWS
For the six months ended 30 September 2017
Six months Six months
ended 30 ended 30
September September
2017 2016
Unaudited Unaudited
Note GBPm GBPm
======================================================== ==== ========== ==========
Rental income received from tenants 225 241
-------------------------------------------------------- ---- ---------- ----------
Fees and other income received 34 31
-------------------------------------------------------- ---- ---------- ----------
Operating expenses paid to suppliers and employees (94) (86)
-------------------------------------------------------- ---- ========== ==========
Cash generated from operations 165 186
-------------------------------------------------------- ---- ========== ==========
Interest paid (30) (50)
-------------------------------------------------------- ---- ---------- ----------
Interest received 4 2
-------------------------------------------------------- ---- ---------- ----------
Corporation tax payments (1) -
-------------------------------------------------------- ---- ---------- ----------
Distributions and other receivables from joint ventures
and funds 8 45 25
-------------------------------------------------------- ---- ========== ========== Net cash inflow from operating activities 183 163 -------------------------------------------------------- ---- ========== ========== Cash flows from investing activities -------------------------------------------------------- ---- ---------- ---------- Development and other capital expenditure (101) (109) -------------------------------------------------------- ---- ---------- ---------- Purchase of investment properties (57) (72) -------------------------------------------------------- ---- ---------- ---------- Sale of investment and trading properties 85 436 -------------------------------------------------------- ---- ---------- ---------- Payments received in respect of future trading property sales - 4 -------------------------------------------------------- ---- ---------- ---------- Purchase of investments (2) (15) -------------------------------------------------------- ---- ---------- ---------- Investment in and loans to joint ventures and funds (137) (27) -------------------------------------------------------- ---- ---------- ---------- Disposal of joint venture held for sale 570 - -------------------------------------------------------- ---- ---------- ---------- Proceeds from disposal of joint venture with Tesco 68 - -------------------------------------------------------- ---- ---------- ---------- Capital distributions and loan repayments from joint ventures and funds 3 64 -------------------------------------------------------- ---- ========== ========== Indirect taxes paid in respect of investing activities (8) (9) -------------------------------------------------------- ---- ========== ========== Net cash inflow from investing activities 421 272 -------------------------------------------------------- ---- ========== ========== Cash flows from financing activities -------------------------------------------------------- ---- ---------- ---------- Issue of ordinary shares 1 2 -------------------------------------------------------- ---- ---------- ---------- Purchase of ordinary shares (66) (8) -------------------------------------------------------- ---- ---------- ---------- Dividends paid (151) (150) -------------------------------------------------------- ---- ---------- ---------- Dividends paid to non-controlling interests (8) (6) -------------------------------------------------------- ---- ---------- ---------- Acquisition of units in Hercules Unit Trust - (12) -------------------------------------------------------- ---- ---------- ---------- Closeout of interest rate derivatives (16) (11) -------------------------------------------------------- ---- ---------- ---------- Decrease in bank and other borrowings (766) (297) -------------------------------------------------------- ---- ---------- ---------- Drawdown on bank and other borrowings 407 40 -------------------------------------------------------- ---- ========== ========== Net cash outflow from financing activities (599) (442) -------------------------------------------------------- ---- ========== ========== Net increase (decrease) in cash and cash equivalents 5 (7) -------------------------------------------------------- ---- ---------- ---------- Cash and cash equivalents at 1 April 114 114 ======================================================== ==== ========== ========== Cash and cash equivalents at 30 September 119 107 ======================================================== ==== ========== ========== Cash and cash equivalents consists of: -------------------------------------------------------- ---- ---------- ---------- Cash and short-term deposits 119 107 ======================================================== ==== ========== ==========
Consolidated Statement of Changes in Equity
For the six months ended 30 September 2017
Six month movements in equity
Hedging
and Re-
Share Share translation valuation Merger Retained Non-controlling Total
capital premium reserve reserve reserve earnings Total interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
=================== ======== ======== =========== ========= ======== ========= ====== =============== =======
Balance at 1 April
2017 260 1,298 (112) 15 213 7,547 9,221 255 9,476
=================== ======== ======== =========== ========= ======== ========= ====== =============== =======
Total comprehensive
income
for the period - - 131 (2) - 243 372 7 379
------------------- ======== ======== =========== ========= ======== ========= ====== =============== =======
Share issues - 1 - - - - 1 - 1
------------------- -------- -------- ----------- --------- -------- --------- ------ --------------- -------
Fair value of share
and share
option awards - - - - - - - - -
------------------- -------- -------- ----------- --------- -------- --------- ------ --------------- -------
Purchase of own
shares (3) - - - - (63) (66) - (66)
------------------- -------- -------- ----------- --------- -------- --------- ------ --------------- -------
Dividends payable
in period
(14.60p per share) - - - - - (150) (150) - (150)
------------------- -------- -------- ----------- --------- -------- --------- ------ --------------- -------
Dividends paid to
non-controlling
interests - - - - - - - (8) (8)
=================== ======== ======== =========== ========= ======== ========= ====== =============== =======
Balance at 30
September 2017 257 1,299 19 13 213 7,577 9,378 254 9,632
=================== ======== ======== =========== ========= ======== ========= ====== =============== =======
Balance at 1 April
2016 260 1,295 (107) 14 213 7,667 9,342 277 9,619
=================== ======== ======== =========== ========= ======== ========= ====== =============== =======
Total comprehensive
income
for the period - - (36) (5) - (218) (259) (10) (269)
------------------- ======== ======== =========== ========= ======== ========= ====== =============== =======
Share issues - 2 - - - - 2 - 2
------------------- -------- -------- ----------- --------- -------- --------- ------ --------------- -------
Fair value of share
and share
option awards - - - - - 1 1 - 1
------------------- -------- -------- ----------- --------- -------- --------- ------ --------------- -------
Purchase of units
from
non-controlling
interests - - - - - (8) (8) - (8)
------------------- -------- -------- ----------- --------- -------- --------- ------ --------------- -------
Dividends payable
in period
(14.18p per share) - - - - - - - (12) (12)
------------------- -------- -------- ----------- --------- -------- --------- ------ --------------- -------
Dividends payable
by subsidiaries - - - - - (146) (146) - (146)
------------------- -------- -------- ----------- --------- -------- --------- ------ --------------- -------
Adjustment for
scrip dividend
element - - - - - - - (6) (6)
------------------- ======== ======== =========== ========= ======== ========= ====== =============== =======
Balance at 30
September 2016 260 1,297 (143) 9 213 7,296 8,932 249 9,181
------------------- ======== ======== =========== ========= ======== ========= ====== =============== =======
Prior year movements in equity
Hedging
and Re-
Share Share translation valuation Merger Retained Non-controlling Total
capital premium reserve reserve reserve earnings Total interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
================== ======== ======== ============ ========== ======== ========= ===== =============== =======
Balance at 1 April
2016 260 1,295 (107) 14 213 7,667 9,342 277 9,619
================== ======== ======== ============ ========== ======== ========= ===== =============== =======
Total
comprehensive
income
for the period - - (5) 1 - 181 177 3 180
------------------ ======== ======== ============ ========== ======== ========= ===== =============== =======
Share issues - 3 - - - - 3 - 3
------------------ -------- -------- ------------ ---------- -------- --------- ----- --------------- -------
Fair value of
share and share
option awards - - - - - 2 2 - 2
------------------ -------- -------- ------------ ---------- -------- --------- ----- --------------- -------
Purchase of own
shares - - - - - (8) (8) - (8)
------------------ -------- -------- ------------ ---------- -------- --------- ----- --------------- -------
Purchase of units
from
non-controlling
interests - - - - - - - (11) (11)
------------------ -------- -------- ------------ ---------- -------- --------- ----- --------------- -------
Gain on purchase
of units
from
non-controlling
interests - - - - - 1 1 - 1
------------------ -------- -------- ------------ ---------- -------- --------- ----- --------------- -------
Dividends payable
in year
(28.8p per share) - - - - - (296) (296) - (296)
------------------ -------- -------- ------------ ---------- -------- --------- ===== --------------- -------
Dividends payable
by subsidiaries - - - - - - - (14) (14)
------------------ -------- -------- ------------ ---------- -------- --------- ===== --------------- -------
Balance at 31
March 2017 260 1,298 (112) 15 213 7,547 9,221 255 9,476
================== ======== ======== ============ ========== ======== ========= ===== =============== =======
Notes to the accounts for the six months ended 30 September 2017
1 Basis of preparation
The financial information for the period ended 30 September 2017 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for the year ended 31 March 2017 has been delivered to the Registrar of Companies. The auditors' report on those accounts was not qualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report, and did not contain statements under section 498(2) or (3) of the Companies Act 2006.
The financial information included in this announcement has been prepared on a going concern basis using accounting policies consistent with International Financial Reporting Standards (IFRS) as adopted by the European Union and in accordance with IAS 34 Interim Financial Reporting. The current period financial information presented in this document has been reviewed, not audited.
The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2017, which have been prepared in accordance with IFRS as adopted by the European Union.
The same accounting policies, estimates, presentation and methods of computation are followed in the half year report as applied in the Group's latest annual audited financial statements, with the exception of the tax policy, which for the interim period is as follows: The current tax charge is calculated on profits arising in the period and in accordance with legislation which has been enacted or substantially enacted at the balance sheet date.
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 - the new standard addresses the classification, measurement and recognition of financial assets and financial liabilities. It simplifies the existing categories of financial instruments, introduces an expected credit loss model and redefines the criteria required for hedge effectiveness. On adoption of the new standard, these changes are not expected to have a material impact on the consolidated financial statements of the Group. There will however be changes to presentation and disclosure.
IFRS 15 - Revenue from contracts with customers - the new standard combines a number of previous standards, setting out a five step model for the recognition of revenue and establishing principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. The new standard does not apply to gross rental income, but does apply to service charge income, management and performance fees and trading property disposals. The impact of the new standard on these items of revenue is not expected to have a material impact on the consolidated financial statements of the Group.
IFRS 16 - Leases, is effective for the Group's year ending 31 March 2020. For lessees, it will result in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases will be removed. The accounting for lessors will however not significantly change. As a result on adoption of the new standard, these changes are not expected to have a material impact on the consolidated financial statements of the Group.
The Group conducted an impact assessment of the above new standards in the prior year, and concluded that whilst adoption of these new standards based on the Group's current activities would lead to some limited changes to presentation and disclosure, they are not expected to have a material impact on the consolidated financial statements.
The Directors believe that the Group is well placed to manage its financing and other business risks satisfactorily, and have a reasonable expectation that the Company and the Group have adequate resources to continue in operation for at least 12 months from the signing date of these financial statements. They therefore consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements.
The interim financial information was approved by the Board on 15 November 2017.
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.
On 10 September 2017, the 2012 convertible bond was redeemed at par, therefore there is no dilutive impact in relation to this instrument for either EPRA or IFRS measures in the current period. In the prior period, EPRA measures excluded the dilutive impact of the 2012 convertible bond as the Group's share price was below the exchange price of 693 pence. IFRS measures included the dilutive impact of the 2012 convertible bond as IAS 33 ignores this hurdle to conversion.
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 period.
Six months ended 30 September Six months ended 30 September
2017 2016
=================== ================================= =================================
Relevant Relevant
Relevant number Earnings Relevant number Earnings
earnings of shares per share earnings of shares per share
GBPm million pence GBPm million pence
=================== ========= ========== ========== ========= ========== ==========
Underlying
------------------- ========= ========== ========== ========= ========== ==========
Underlying basic 198 1,028 19.3 199 1,029 19.3
------------------- ========= ========== ========== ========= ========== ==========
Underlying diluted 198 1,031 19.2 199 1,033 19.3
=================== ========= ========== ========== ========= ========== ==========
EPRA
------------------- ========= ========== ========== ========= ========== ==========
EPRA basic 198 1,028 19.3 199 1,029 19.3
------------------- ========= ========== ========== ========= ========== ==========
EPRA diluted 198 1,031 19.2 199 1,033 19.3
=================== ========= ========== ========== ========= ========== ==========
IFRS
------------------- ========= ========== ========== ========= ========== ==========
Basic 239 1,028 23.2 (195) 1,029 (19.0)
------------------- ========= ========== ========== ========= ========== ==========
Diluted 239 1,031 23.2 (221) 1,091 (20.3)
=================== ========= ========== ========== ========= ========== ==========
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 derivatives 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.
As at 30 September 2017, neither EPRA NAV, NNNAV nor IFRS net assets included the impact of the 2012 convertible bond, as the bond was redeemed at par on 10 September 2017. As at 31 March 2017, EPRA NAV and NNNAV did not include the dilutive impact of the 2012 convertible bond, as the Group's share price was below the exchange price of 693 pence. IFRS net assets included the dilutive impact following the treatment of IFRS earnings per share.
30 September 2017 31 March 2017
=========== =================================== ===================================
Relevant Net asset Relevant Net asset
Relevant number value per Relevant number value per
net assets of shares share net assets of shares share
GBPm million pence GBPm million pence
=========== =========== ========== ========== =========== ========== ==========
EPRA
----------- ----------- ---------- ---------- ----------- ---------- ----------
EPRA NAV 9,646 1,027 939 9,498 1,038 915
----------- ----------- ---------- ---------- ----------- ---------- ----------
EPRA NNNAV 9,117 1,027 888 8,938 1,038 861
=========== =========== ========== ========== =========== ========== ==========
IFRS
----------- ----------- ---------- ---------- ----------- ---------- ----------
Basic 9,632 1,019 945 9,476 1,029 921
----------- =========== ========== ========== ----------- ---------- ----------
Diluted 9,632 1,027 938 9,876 1,096 901
=========== =========== ========== ========== =========== ========== ==========
Total accounting return
The Group also measures financial performance with reference to total accounting return. This is calculated as the movement in EPRA net asset value per share and dividend paid in the period as a percentage of the EPRA net asset value per share at the start of the period.
Six months ended 30 September Six months ended 30 September
2017 2016
======================== ==================================== =====================================
Increase Dividend Decrease 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 24 14.60 4.2% (28) 14.18 (1.5%)
------------------------ ----------- ---------- ----------- ----------- ----------- -----------
3 Revenue and costs
Six months ended Six months ended
30 September 2017 30 September 2016
=============================== ============================= =============================
Capital Capital
Underlying and other Total Underlying and other Total
GBPm GBPm GBPm GBPm GBPm GBPm
=============================== ========== ========== ===== ========== ========== =====
Rent receivable 221 - 221 226 - 226
------------------------------- ========== ========== ===== ========== ========== =====
Spreading of tenant incentives
and guaranteed rent increases (5) - (5) (4) - (4)
------------------------------- ========== ========== ===== ========== ========== =====
Surrender premia 6 - 6 2 - 2
------------------------------- ---------- ---------- ----- ---------- ---------- -----
Gross rental income 222 - 222 224 - 224
------------------------------- ---------- ---------- ----- ---------- ---------- -----
Trading property sales
proceeds - 50 50 - 9 9
------------------------------- ========== ========== ===== ========== ========== =====
Service charge income 33 - 33 40 - 40
------------------------------- ========== ========== ===== ========== ========== =====
Management and performance
fees
(from joint ventures
and funds) 3 - 3 3 - 3
------------------------------- ========== ========== ===== ========== ========== =====
Other fees and commissions 24 - 24 21 - 21
------------------------------- ---------- ---------- ----- ---------- ---------- -----
Revenue 282 50 332 288 9 297
------------------------------- ---------- ---------- ----- ---------- ---------- -----
Trading property cost
of sales - (42) (42) - (6) (6)
------------------------------- ========== ========== ===== ========== ========== =====
Service charge expenses (33) - (33) (40) - (40)
------------------------------- ========== ========== ===== ========== ========== =====
Property operating expenses (15) - (15) (10) - (10)
------------------------------- ---------- ---------- ----- ---------- ---------- -----
Other fees and commissions
expenses (20) - (20) (17) - (17)
------------------------------- ---------- ---------- ----- ---------- ---------- -----
Costs (68) (42) (110) (67) (6) (73)
------------------------------- ---------- ---------- ----- ---------- ---------- -----
214 8 222 221 3 224
------------------------------- ---------- ---------- ----- ---------- ---------- -----
4 Valuation movements on property
Six months Six months
ended 30 ended 30
September September
2017 2016
GBPm GBPm
===================================================== ========== ==========
Consolidated income statement
----------------------------------------------------- ---------- ----------
Revaluation of properties1 141 (257)
----------------------------------------------------- ---------- ----------
Revaluation of properties held by joint ventures and
funds accounted for using the equity method 26 (205)
----------------------------------------------------- ---------- ----------
167 (462)
----------------------------------------------------- ---------- ----------
Consolidated statement of comprehensive income
----------------------------------------------------- ---------- ----------
Revaluation of owner-occupied properties (3) (2)
----------------------------------------------------- ---------- ----------
164 (464)
----------------------------------------------------- ---------- ----------
1 Includes GBP3m impairment of trading property in the current period (see note 7).
5 Net financing costs
Six months Six months
ended 30 ended 30
September September
2017 2016
GBPm GBPm
============================================================= ========== ==========
Underlying
Financing charges
------------------------------------------------------------- ---------- ----------
Bank loans, overdrafts and derivatives (11) (18)
------------------------------------------------------------- ---------- ----------
Other loans (25) (28)
------------------------------------------------------------- ---------- ----------
Obligations under head leases (1) (1)
------------------------------------------------------------- ========== ==========
(37) (47)
------------------------------------------------------------- ---------- ----------
Development interest capitalised 3 4
------------------------------------------------------------- ========== ==========
(34) (43)
------------------------------------------------------------- ---------- ----------
Financing income
------------------------------------------------------------- ---------- ----------
Deposits, securities and liquid investments - 2
------------------------------------------------------------- ---------- ----------
Loans to joint ventures - 2
============================================================= ========== ==========
Net financing charges - underlying (34) (41)
============================================================= ========== ==========
Capital and other
------------------------------------------------------------- ---------- ----------
Financing charges
------------------------------------------------------------- ---------- ----------
Hedging reserve recycling1 (115) -
------------------------------------------------------------- ---------- ----------
Valuation movements on fair value debt 43 (88)
------------------------------------------------------------- ---------- ----------
Valuation movements on fair value derivatives (44) 90
------------------------------------------------------------- ---------- ----------
Recycling of fair value movement on close-out of derivatives (14) (10)
------------------------------------------------------------- ---------- ----------
Capital financing costs (6) (5)
------------------------------------------------------------- ---------- ----------
Fair value movement on convertible bonds (1) -
------------------------------------------------------------- ---------- ----------
Fair value movement on non-hedge accounted derivatives (7) (4)
------------------------------------------------------------- ========== ==========
(144) (17)
------------------------------------------------------------- ========== ==========
Financing income
------------------------------------------------------------- ---------- ----------
Fair value movement on convertible bonds - 32
------------------------------------------------------------- ========== ==========
- 32
============================================================= ========== ==========
Net financing income (charges) - capital (144) 15
============================================================= ========== ==========
Total financing income - 34
------------------------------------------------------------- ---------- ----------
Total financing charges (178) (60)
============================================================= ========== ==========
Net financing costs (178) (26)
============================================================= ========== ==========
Interest on development expenditure is capitalised at the Group's weighted average interest rate of 2.1% (Six months ended 30 September 2016: 2.5%). The weighted average interest rate on a proportionately consolidated basis at 30 September 2017 was 3.0% (Six months ended 30 September 2016: 3.2%).
1 Represents a reclassification adjustment of cumulative losses within the hedging and translation reserve to capital profit and loss, in relation to a hedging instrument which is no longer hedge accounted. The recognition of this amount in capital financing charges has no impact on EPRA NAV. The impact of liability management undertaken in the period was a reduction of 3 pence on EPRA NAV per share.
6 Taxation
Six months Six months
ended 30 ended 30
September September
2017 2016
GBPm GBPm
===================================================== ========== ==========
Taxation income
----------------------------------------------------- ---------- ----------
Current taxation
----------------------------------------------------- ---------- ----------
Current period UK corporation taxation (30 September
2017: 19%; 30 September 2016: 20%) - 1
----------------------------------------------------- ---------- ----------
Adjustments in respect of prior periods 1 -
----------------------------------------------------- ========== ==========
Total current taxation income 1 1
----------------------------------------------------- ---------- ----------
Deferred taxation on revaluations and derivatives 6 -
===================================================== ========== ==========
Group total taxation 7 1
----------------------------------------------------- ---------- ----------
Attributable to joint ventures and funds - -
===================================================== ========== ==========
Total taxation income 7 1
----------------------------------------------------- ---------- ----------
Taxation expense attributable to Underlying Profits for the six months ended 30 September 2017 was GBPnil (Six months ended 30 September 2016: GBPnil).
7 Property
Property reconciliation
Six months ended 30 September
2017 Year ended 31 March 2017
================== ============================================== ================================================
Investment Investment
and and
development development
properties Owner-occupied properties Owner-occupied
Level Trading Level Level Trading Level
3 properties 3 Total 3 properties 3 Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
================== =========== ========== ============== ===== =========== =========== ============== ======
Carrying value at
the
start of the
period/year 9,073 334 94 9,501 9,643 325 95 10,063
------------------ ----------- ---------- -------------- ----- ----------- ----------- -------------- ------
Additions
------------------ ----------- ---------- -------------- ----- ----------- ----------- -------------- ------
- property
purchases 137 5 - 142 88 - - 88
------------------ ----------- ---------- -------------- ----- ----------- ----------- -------------- ------
- development
expenditure 21 33 - 54 81 56 - 137
------------------ ----------- ---------- -------------- ----- ----------- ----------- -------------- ------
- capitalised
interest
and staff costs 3 2 - 5 5 5 - 10
------------------ ----------- ---------- -------------- ----- ----------- ----------- -------------- ------
- capital
expenditure
on asset
management
initiatives 34 - - 34 92 - - 92
------------------ =========== ========== ============== ===== =========== =========== ============== ======
195 40 - 235 266 61 - 327
------------------ =========== ========== ============== ===== =========== =========== ============== ======
Depreciation - - - - - - (1) (1)
------------------ ----------- ---------- -------------- ----- ----------- ----------- -------------- ------
Disposals (37) (41) - (78) (670) (26) - (696)
------------------ ----------- ---------- -------------- ----- ----------- ----------- -------------- ------
Reclassifications - - - - 27 (27) - -
------------------ ----------- ---------- -------------- ----- ----------- ----------- -------------- ------
Revaluations
included
in income
statement 144 (3) - 141 (144) - - (144)
------------------ ----------- ---------- -------------- ----- ----------- ----------- -------------- ------
Revaluations
included
in OCI - - (3) (3) - - - -
------------------ ----------- ---------- -------------- ----- ----------- ----------- -------------- ------
Movement in tenant
incentives and
contracted
rent uplift
balances (2) - - (2) (49) 1 - (48)
------------------ =========== ========== ============== ===== =========== =========== ============== ======
Carrying value at
the
end of the
period/year 9,373 330 91 9,794 9,073 334 94 9,501
------------------ =========== ========== ============== ===== =========== =========== ============== ======
Head lease
liabilities (65) (64)
------------------ ----------- ---------- -------------- ----- ----------- ----------- -------------- ------
Valuation surplus
on
trading
properties 87 83
================== =========== ========== ============== ===== =========== =========== ============== ======
Group property
portfolio
valuation
at the end of the
period/year 9,816 9,520
------------------ ----------- ---------- -------------- ----- ----------- ----------- -------------- ------
Non-controlling
interests (314) (310)
================== =========== ========== ============== ===== =========== =========== ============== ======
Group property
portfolio
valuation
at the end of the
period/year
attributable
to shareholders 9,502 9,210
================== =========== ========== ============== ===== =========== =========== ============== ======
The Group's total property portfolio was valued by external valuers on the basis of fair value, in accordance with the RICS valuation - Professional Standards 2014, ninth edition, published by The Royal Institute 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 on a half yearly basis.
Property valuations are inherently subjective as they are made on the basis of significant unobservable inputs, including 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. There were no transfers between levels in the period. Inputs to the valuation, including equivalent yields, rental values and costs to complete, are 'unobservable' as defined by IFRS 13.
Additional property covenant information
Properties valued at GBP1,678m (year ended 31 March 2017: GBP1,882m) were subject to a security interest and other properties of non-recourse companies amounted to GBP1,226m (year ended 31 March 2017: GBP1,158), totalling GBP2,904m (year ended 31 March 2017: GBP3,040m).
8 Joint ventures and funds
Summary movement for the period of the investments in joint ventures and fund
Joint
ventures Funds Total Equity Loans Total
GBPm GBPm GBPm GBPm GBPm GBPm
=============================== ========= ===== ===== ====== ===== =====
At 1 April 2017 2,525 241 2,766 2,412 354 2,766
------------------------------- --------- ----- ----- ------ ----- -----
Additions 32 3 35 12 23 35
------------------------------- --------- ----- ----- ------ ----- -----
Disposals (68) - (68) (68) - (68)
------------------------------- --------- ----- ----- ------ ----- -----
Share of profit after taxation 70 3 73 73 - 73
------------------------------- --------- ----- ----- ------ ----- -----
Distributions and dividends:
------------------------------- --------- ----- ----- ------ ----- -----
- Capital - (3) (3) (3) - (3)
------------------------------- --------- ----- ----- ------ ----- -----
- Revenue (39) (6) (45) (45) - (45)
------------------------------- --------- ----- ----- ------ ----- -----
Hedging and exchange movements 5 1 6 6 - 6
=============================== ========= ===== ===== ====== ===== =====
At 30 September 2017 2,525 239 2,764 2,387 377 2,764
=============================== ========= ===== ===== ====== ===== =====
At 31 March 2017 the Group classified a joint venture as a held-for-sale asset of GBP540m, presented separately from the investment in joint ventures and funds on the consolidated balance sheet. On 25 May 2017 the transaction completed and consequently the held for sale asset was disposed of.
Additional investments in joint ventures and funds covenant information
At 30 September 2017 the investments in joint ventures included within the total investments in joint ventures and funds was GBP2,758m, being the GBP2,764m total investment shown above, less the net investment of GBP6m in PREF, a property fund in continental Europe (31 March 2017: GBP3,299m, being GBP2,766 shown above plus a joint venture held for sale of GBP540m less a GBP7m net investment in PREF).
Summary income statement for the period of the investments in joint ventures and funds
Six months ended Six months ended
30 September 2017 30 September 2016
================================================ ==================== =====================
GBPm GBPm GBPm GBPm
100% BL Share 100% BL Share
================================================ ======= =========== ======= ============
Revenue1 250 125 280 141
------------------------------------------------ ------- ----------- ------- ------------
Costs (52) (26) (64) (33)
================================================ ======= =========== ======= ============
198 99 216 108
------------------------------------------------ ======= =========== ======= ============
Administrative expenses (2) (1) (3) (2)
------------------------------------------------ ------- ----------- ------- ------------
Net financing costs (68) (34) (75) (38)
------------------------------------------------ ======= =========== ======= ============
Underlying Profit before taxation 128 64 138 68
------------------------------------------------ ======= =========== ======= ============
Valuation movement 52 26 (408) (205)
------------------------------------------------ ------- ----------- ------- ------------
Capital financing costs (18) (9) (12) (6)
------------------------------------------------ ------- ----------- ------- ------------
(Loss) profit on disposal of investment
properties, trading properties and investments (16) (8) 23 12
------------------------------------------------ ======= =========== ======= ============
Profit (loss) on ordinary activities
before taxation 146 73 (259) (131)
------------------------------------------------ ======= =========== ======= ============
Taxation - - - -
------------------------------------------------ ======= =========== ======= ============
Profit (loss) on ordinary activities
after taxation 146 73 (259) (131)
================================================ ======= =========== ======= ============
Profit (loss) split between controlling
and non-controlling interests
------------------------------------------------ ------- ----------- ------- ------------
Attributable to non-controlling interests - (2)
------------------------------------------------ ------- ----------- ------- ------------
Attributable to shareholders of the Company 73 (133)
------------------------------------------------ ------- ----------- ------- ------------
1 Included within revenue for the period is a GBP29m (GBP15m British Land share) payment received in June 2017 from the Royal Bank of Scotland in relation to their surrender of a lease at 135 Bishopsgate.
Operating cash flows of joint ventures and funds (Group share)
Six months Six months
ended 30 ended 30
September September
2017 2016
GBPm GBPm
====================================================== ========== ==========
Rental income received from tenants 100 96
------------------------------------------------------ ---------- ----------
Operating expenses paid to suppliers and employees (12) (10)
------------------------------------------------------ ========== ==========
Cash generated from operations 88 86
------------------------------------------------------ ========== ==========
Interest paid (38) (41)
====================================================== ========== ==========
Cash inflow from operating activities 50 45
====================================================== ========== ==========
Cash inflow from operating activities deployed as:
------------------------------------------------------ ---------- ----------
Surplus cash retained within joint ventures and funds 5 20
------------------------------------------------------ ---------- ----------
Revenue distributions per consolidated statement of
cash flows 45 25
------------------------------------------------------ ---------- ----------
Revenue distributions split between controlling and
non-controlling interests
====================================================== ========== ==========
Attributable to non-controlling interests 1 2
------------------------------------------------------ ---------- ----------
Attributable to shareholders of the Company 44 23
====================================================== ========== ==========
9 Other investments
30 September 31 March
2017 2017
GBPm GBPm
============================= ============ ========
Investment held for trading 96 93
----------------------------- ------------ --------
Loans, receivables and other 62 61
============================= ============ ========
158 154
============================= ============ ========
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 the Directors, supported by an external valuation.
10 Net debt
10.1 Fair value and book value of net debt
30 September 2017 31 March 2017
========================================= ================================== ==================================
Fair value Book value Difference Fair value Book value Difference
GBPm GBPm GBPm GBPm GBPm GBPm
========================================= ========== ========== ========== ========== ========== ==========
Debentures and unsecured bonds 1,942 1,837 105 1,682 1,590 92
----------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Convertible bonds 338 338 - 737 737 -
----------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Bank debt and other floating
rate debt 705 697 8 963 954 9
========================================= ========== ========== ========== ========== ========== ==========
Gross debt 2,985 2,872 113 3,382 3,281 101
========================================= ========== ========== ========== ========== ========== ==========
Interest rate and currency
derivative liabilities 131 131 - 144 144 -
----------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Interest rate and currency
derivative assets (175) (175) - (217) (217) -
----------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Cash and short-term deposits (119) (119) - (114) (114) -
========================================= ========== ========== ========== ========== ========== ==========
Net debt 2,822 2,709 113 3,195 3,094 101
========================================= ========== ========== ========== ========== ========== ==========
Net debt attributable to non-controlling
interests (111) (110) (1) (105) (103) (2)
----------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Net debt attributable to shareholders
of the Company 2,711 2,599 112 3,090 2,991 99
========================================= ========== ========== ========== ========== ========== ==========
The fair values of debentures, unsecured bonds and the convertible bonds have been established by obtaining quoted market prices from brokers. The bank debt and other floating rate debt has been valued assuming it 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 (see note 9) have been excluded from the disclosures on the basis that the fair value is equivalent to the book value.
10.2 Loan to value
Group loan to value (LTV)
30 September 31 March
2017 2017
GBPm GBPm
============================================================== ============ ========
Group loan to value (LTV) 20.1% 22.6%
============================================================== ============ ========
Principal value of gross debt 2,711 3,069
-------------------------------------------------------------- ------------ --------
Less debt attributable to non-controlling interests (116) (112)
-------------------------------------------------------------- ------------ --------
Less cash and short-term deposits (balance sheet) (119) (114)
-------------------------------------------------------------- ------------ --------
Plus cash attributable to non-controlling interests 6 9
============================================================== ============ ========
Total net debt for LTV calculation 2,482 2,852
============================================================== ============ ========
Group property portfolio valuation (note 7) 9,816 9,520
-------------------------------------------------------------- ------------ --------
Investments in joint ventures and funds (note 8) 2,764 2,766
-------------------------------------------------------------- ------------ --------
Joint venture held for sale (note 8) - 540
-------------------------------------------------------------- ------------ --------
Other investments (note 9) 158 154
-------------------------------------------------------------- ------------ --------
Less property and investments attributable to non-controlling
interests (368) (364)
============================================================== ============ ========
Total assets for LTV calculation 12,370 12,616
============================================================== ============ ========
Proportionally consolidated loan to value (LTV)
30 September 31 March
2017 2017
GBPm GBPm
======================================================== ============ ========
Proportionally consolidated loan to value (LTV) 26.9% 29.9%
======================================================== ============ ========
Principal value of gross debt 4,133 4,649
-------------------------------------------------------- ------------ --------
Less attributable to non-controlling interests (132) (128)
-------------------------------------------------------- ------------ --------
Less cash and short-term deposits (322) (323)
-------------------------------------------------------- ------------ --------
Plus cash attributable to non-controlling interests 8 9
-------------------------------------------------------- ------------ --------
Less joint venture debt beneficially owned by Group (3) -
======================================================== ============ ========
Total net debt for proportional LTV calculation 3,684 4,207
======================================================== ============ ========
Group property portfolio valuation (note 7) 9,816 9,520
-------------------------------------------------------- ------------ --------
Share of property of joint ventures and funds 4,083 4,801
-------------------------------------------------------- ------------ --------
Other investments (note 9) 158 154
-------------------------------------------------------- ------------ --------
Less other investments attributable to joint ventures
and funds (3) (3)
-------------------------------------------------------- ------------ --------
Less property attributable to non-controlling interests (384) (381)
======================================================== ============ ========
Total assets for proportional LTV calculation 13,670 14,091
======================================================== ============ ========
10.3 British Land Unsecured Financial Covenants
The two financial covenants applicable to the Group unsecured debt including convertible bonds are shown below:
30 September 31 March
2017 2017
GBPm GBPm
=============================================================== ============ ========
Net Borrowings not to exceed 175% of Adjusted Capital
and Reserves 25% 29%
=============================================================== ============ ========
Principal amount of gross debt 2,711 3,069
--------------------------------------------------------------- ------------ --------
Less the relevant proportion of borrowings of the partly-owned
subsidiary / non-controlling interests (116) (112)
--------------------------------------------------------------- ------------ --------
Less cash and deposits (balance sheet) (119) (114)
--------------------------------------------------------------- ------------ --------
Plus the relevant proportion of cash and deposits of
the partly-owned subsidiary / non-controlling interests 6 9
=============================================================== ============ ========
Net Borrowings 2,482 2,852
=============================================================== ============ ========
Share capital and reserves (balance sheet) 9,632 9,476
--------------------------------------------------------------- ------------ --------
EPRA deferred tax adjustment (EPRA Table A) 5 3
--------------------------------------------------------------- ------------ --------
Trading property surpluses (EPRA Table A) 90 83
--------------------------------------------------------------- ------------ --------
Exceptional refinancing charges (see below) 267 274
--------------------------------------------------------------- ------------ --------
Fair value adjustments of financial instruments (EPRA
Table A) 137 155
--------------------------------------------------------------- ------------ --------
Less reserves attributable to non-controlling interests
(balance sheet) (254) (255)
=============================================================== ============ ========
Adjusted Capital and Reserves 9,877 9,736
=============================================================== ============ ========
In calculating Adjusted Capital and Reserves for the purpose of the unsecured debt financial covenants, there is an adjustment of GBP267m (31 March 2017: GBP274m) to reflect the cumulative net amortised exceptional items relating to the refinancings in the years ended 31 March 2005, 2006 and 2007.
30 September 31 March
2017 2017
GBPm GBPm
============================================================= ============ ========
Net Unsecured Borrowings not to exceed 70% of Unencumbered
Assets 19% 26%
============================================================= ============ ========
Principal amount of gross debt 2,711 3,069
------------------------------------------------------------- ------------ --------
Less cash and deposits not subject to a security interest
(being GBP109m less the relevant proportion of cash
and deposits of the partly owned subsidiary of GBP4m) (105) (96) ------------------------------------------------------------- ------------ -------- Less principal amount of secured and non-recourse borrowings (1,251) (1,238) ============================================================= ============ ======== Net Unsecured Borrowings 1,355 1,735 ============================================================= ============ ======== Properties (note 7) 9,816 9,520 ------------------------------------------------------------- ------------ -------- Investments in joint ventures and funds (note 8) 2,764 2,766 ------------------------------------------------------------- ------------ -------- Joint venture held for sale (note 8) - 540 ------------------------------------------------------------- ------------ -------- Other investments (note 9) 158 154 ------------------------------------------------------------- ------------ -------- Less investments in joint ventures (note 8) (2,758) (3,299) ------------------------------------------------------------- ------------ -------- Less encumbered assets (note 7) (2,904) (3,040) ============================================================= ============ ======== Unencumbered Assets 7,076 6,641 ============================================================= ============ ========
10.4 Convertible bonds
1.5% Convertible bond 2012 (redeemed in the current period)
On 10 September 2012 British Land (Jersey) Limited (the Issuer), a wholly-owned subsidiary of the Group, issued GBP400 million 1.5% guaranteed convertible bonds due 2017 at par. On 10 September 2017, the convertible bonds were redeemed at par.
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 a threshold amount in pence-per-ordinary-share. As at 30 September 2017 the exchange price was 1050.18 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.
10.5 Fair value hierarchy
The table below analyses financial instruments carried at fair value, by the valuation method. The different levels are defined as follows:
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).
30 September 2017 31 March 2017
============================== ========================== ==========================
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 - (175) - (175) - (217) - (217)
------------------------------ ----- ----- ----- ----- ----- ----- ----- -----
Other investments - available
for sale (14) - - (14) (14) - - (14)
------------------------------ ----- ----- ----- ----- ----- ----- ----- -----
Other investments - held
for trading - - (96) (96) - - (93) (93)
============================== ===== ===== ===== ===== ===== ===== ===== =====
Assets (14) (175) (96) (285) (14) (217) (93) (324)
============================== ===== ===== ===== ===== ===== ===== ===== =====
Interest rate and currency
derivative liabilities - 131 - 131 - 144 - 144
------------------------------ ----- ----- ----- ----- ----- ----- ----- -----
Convertible bonds 338 - - 338 737 - - 737
============================== ===== ===== ===== ===== ===== ===== ===== =====
Liabilities 338 131 - 469 737 144 - 881
============================== ===== ===== ===== ===== ===== ===== ===== =====
Total 324 (44) (96) 184 723 (73) (93) 557
============================== ===== ===== ===== ===== ===== ===== ===== =====
There have been no transfers between levels in the period. A GBP3m valuation gain in relation to the investment held for trading has been recorded in the six months ended 30 September 2017 (30 September 2016: GBP8m valuation loss). Further disclosures in relation to the valuation of the investment held for trading are included within note 9.
11 Dividend
The 2018 second quarter dividend of 7.52 pence per share is payable on 9 February 2018 to shareholders on the register at close of business on 5 January 2018.
The second interim dividend will be a Property Income Distribution ('PID') and no SCRIP alternative will be offered. 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) for details.
The 2018 first quarter dividend of 7.52 pence per share, totalling GBP77m was paid on 10 November 2017. The whole of the first quarter dividend was a PID and no scrip alternative was offered. GBP66m was paid to shareholders, and GBP11m of withholding tax was retained.
The Consolidated Statement of Changes in Equity shows total dividends in the six months to 30 September 2017 of GBP150m, GBP75m being the third quarter 2017 dividend of 7.30 pence per share paid on 5 May 2017, and the fourth quarter 2017 dividend of 7.30 pence per share, paid on 4 August, totalling GBP75m. No scrip alternatives were offered for the third or fourth quarters and the fourth quarter dividend was PID.
12 Segment information
Operating segments
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.
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 period.
Segment result
Six months ended 30 September
---------------- ============================================================================================
Offices Retail Canada Water Other/unallocated Total
---------------- ============ ============ ============== =================== ===========================
2017 2016 2017 2016 2017 2016 2017 2016 2017 2016
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
================ ===== ===== ===== ===== ====== ====== ========= ======== ============ =============
Gross rental
income
---------------- ----- ----- ----- ----- ------ ------ --------- -------- ------------ -------------
British Land
Group 68 70 140 142 4 5 - - 212 217
---------------- ----- ----- ----- ----- ------ ------ --------- -------- ------------ -------------
Share of joint
ventures and
funds 60 60 44 50 - - - - 104 110
================ ===== ===== ===== ===== ====== ====== ========= ======== ============ =============
Total 128 130 184 192 4 5 - - 316 327
================ ===== ===== ===== ===== ====== ====== ========= ======== ============ =============
Net rental
income
---------------- ----- ----- ----- ----- ------ ------ --------- -------- ------------ -------------
British Land
Group 62 67 133 136 4 4 - - 199 207
---------------- ----- ----- ----- ----- ------ ------ --------- -------- ------------ -------------
Share of joint
ventures and
funds 57 58 41 47 - - - - 98 105
================ ===== ===== ===== ===== ====== ====== ========= ======== ============ =============
Total 119 125 174 183 4 4 - - 297 312
================ ===== ===== ===== ===== ====== ====== ========= ======== ============ =============
Operating result
---------------- ----- ----- ----- ----- ------ ------ --------- -------- ------------ -------------
British Land
Group 61 66 129 129 2 3 (23) (26) 169 172
---------------- ----- ----- ----- ----- ------ ------ --------- -------- ------------ -------------
Share of joint
ventures and
funds 56 56 39 49 - - - - 95 105
================ ===== ===== ===== ===== ====== ====== ========= ======== ============ =============
Total 117 122 168 178 2 3 (23) (26) 264 277
================ ===== ===== ===== ===== ====== ====== ========= ======== ============ =============
Six Six
months months
ended ended
30 September 30 September
Reconciliation to Underlying 2017 2016
Profit before taxation GBPm GBPm
============================== ===== ===== ====== ====== ========= ======== ============ =============
Operating result 264 277
---------------- ----- ----- ----- ----- ------ ------ --------- -------- ------------ -------------
Net financing
costs (66) (78)
================ ===== ===== ===== ===== ====== ====== ========= ======== ============ =============
Underlying
Profit 198 199
================ ===== ===== ===== ===== ====== ====== ========= ======== ============ =============
Reconciliation
to profit on
ordinary
activities
before
taxation
================ ===== ===== ===== ===== ====== ====== ========= ======== ============ =============
Underlying
Profit 198 199
---------------- ----- ----- ----- ----- ------ ------ --------- -------- ------------ -------------
Capital and
other 34 (411)
---------------- ----- ----- ----- ----- ------ ------ --------- -------- ------------ -------------
Underlying
Profit
attributable
to
non-controlling
interests 6 7
================ ===== ===== ===== ===== ====== ====== ========= ======== ============ =============
Total profit (loss)
on ordinary activities
before taxation 238 (205)
======================= ===== ===== ===== ====== ====== ========= ======== ============ =============
Of the gross rental income above, GBPnil (six months ended 30 September 2016: GBPnil) was derived from outside the UK.
Segment assets
Offices Retail Canada Water Total
---------------- ====================== ====================== ====================== ======================
30 September 31 March 30 September 31 March 30 September 31 March 30 September 31 March
2017 2017 2017 2017 2017 2017 2017 2017
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
================ ============ ======== ============ ======== ============ ======== ============ ========
Property assets
---------------- ------------ -------- ------------ -------- ------------ -------- ------------ --------
British Land
Group 4,366 4,223 4,866 4,716 270 271 9,502 9,210
---------------- ------------ -------- ------------ -------- ------------ -------- ------------ --------
Share of funds
and joint
ventures 2,287 2,792 1,726 1,938 - - 4,013 4,730
================ ============ ======== ============ ======== ============ ======== ============ ========
Total 6,653 7,015 6,592 6,654 270 271 13,515 13,940
================ ============ ======== ============ ======== ============ ======== ============ ========
Reconciliation to net assets
---------------------------------------- ------------ -------- ------------ -------- ------------ --------
30 September 31 March
British Land 2017 2017
Group GBPm GBPm
================ ============ ======== ============ ======== ============ ======== ============ ========
Property assets 13,515 13,940
---------------- ------------ -------- ------------ -------- ------------ -------- ------------ --------
Other
non-current
assets 162 156
================ ============ ======== ============ ======== ============ ======== ============ ========
Non-current
assets 13,677 14,096
================ ============ ======== ============ ======== ============ ======== ============ ========
Other net
current
liabilities (340) (364)
---------------- ------------ -------- ------------ -------- ------------ -------- ------------ --------
Adjusted net
debt (3,691) (4,223)
---------------- ------------ -------- ------------ -------- ------------ -------- ------------ --------
Other
non-current
liabilities - (11)
================ ============ ======== ============ ======== ============ ======== ============ ========
EPRA net assets (undiluted) 9,646 9,498
============================== ======== ============ ======== ============ ======== ============ ========
Non-controlling interests 254 255
------------------------------ -------- ------------ -------- ------------ -------- ------------ --------
EPRA adjustments (268) (277) ============================== ======== ============ ======== ============ ======== ============ ======== Net assets 9,632 9,476 ============================== ======== ============ ======== ============ ======== ============ ========
13 Related party transactions
There have been no material changes in the related party transactions described in the last annual report.
14 Contingent liabilities
The Group, joint ventures and funds have contingent liabilities in respect of legal claims, guarantees and warranties arising in the ordinary course of business. It is not anticipated that any material liabilities will arise from contingent liabilities.
15 Share capital and reserves
Ordinary
shares
GBPm of 25p each
============================== ==== =============
Issued, called and fully paid
------------------------------- ---- -------------
At 1 April 2017 260 1,041,035,058
------------------------------- ---- -------------
Issues - 189,904
------------------------------- ---- -------------
Repurchased and cancelled (3) (10,671,074)
=============================== ==== =============
At 30 September 2017 257 1,030,553,888
=============================== ==== =============
At 30 September 2017, of the issued 25p ordinary shares, 8,003 shares were held in the ESOP trust (31 March 2017: 7,783), 11,266,245 shares were held as treasury shares (31 March 2017: 11,266,245) and 1,019,279,640 shares were in free issue (31 March 2017: 1,029,761,030). No treasury shares were acquired by the ESOP trust during the year. All issued shares are fully paid.
In the six months ended 30 September 2017, the Company repurchased 10,724,362 ordinary shares, of which 10,671,074 were cancelled. The weighted average share price of repurchases was 607 pence. During the period from 1 October 2017 to 15 November 2017, a further 15,114,663 shares were repurchased, of which 12,842,709 were cancelled. The weighted average share price of these repurchases was 599 pence.
SUPPLEMENTARY DISCLOSURES
UNAUDITED
Table A: Summary income statement and balance sheet
Summary income statement based on proportional consolidation for the six months ended 30 September 2017
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.
Six months ended 30 September Six months ended 30 September
2017 2016
--------------- ================================================ =================================================
Joint
ventures Less Joint Less
and non-controlling Proportionally ventures non-controlling Proportionally
Group funds interests consolidated Group and funds interests consolidated
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
=============== ===== ======== =============== ============== ===== ========= =============== ==============
Gross rental
income 222 103 (9) 316 224 113 (10) 327
--------------- ----- -------- --------------- -------------- ----- --------- --------------- --------------
Property
operating
expenses (15) (4) - (19) (10) (5) - (15)
--------------- ===== ======== =============== ============== ===== ========= =============== ==============
Net rental
income 207 99 (9) 297 214 108 (10) 312
--------------- ----- -------- --------------- -------------- ----- --------- --------------- --------------
Administrative
expenses (40) (1) - (41) (42) (2) 1 (43)
--------------- ----- -------- --------------- -------------- ----- --------- --------------- --------------
Net fees and
other
income 7 - 1 8 7 - 1 8
--------------- ===== ======== =============== ============== ===== ========= =============== ==============
Ungeared Income
Return 174 98 (8) 264 179 106 (8) 277
--------------- ----- -------- --------------- -------------- ----- --------- --------------- --------------
Net financing
costs (34) (34) 2 (66) (41) (38) 1 (78)
=============== ===== ======== =============== ============== ===== ========= =============== ==============
Underlying
Profit 140 64 (6) 198 138 68 (7) 199
=============== ===== ======== =============== ============== ===== ========= =============== ==============
Underlying
taxation - - - - - - - -
=============== ===== ======== =============== ============== ===== ========= =============== ==============
Underlying
Profit
after taxation 140 64 (6) 198 138 68 (7) 199
=============== ===== ======== =============== ============== ===== ========= =============== ==============
Valuation
movement 167 (462)
--------------- ----- -------- --------------- -------------- ----- --------- --------------- --------------
Other capital
and
taxation
(net)1 100 (411)
=============== ===== ======== =============== ============== ===== ========= =============== ==============
Capital and
other 267 (873)
=============== ===== ======== =============== ============== ===== ========= =============== ==============
Total return 465 (674)
=============== ===== ======== =============== ============== ===== ========= =============== ==============
1 Includes other comprehensive income, movement in dilution of share options and the movement in items excluded for EPRA NAV.
Summary balance sheet based on proportional consolidation as at 30 September 2017
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.
EPRA
Mark-to-market EPRA Net Net
Share on derivatives Valuation assets assets
of joint Less and related surplus 30 31
ventures non-controlling Share Deferred debt Head on trading September March
Group & funds interests options tax adjustments leases properties 2017 2017
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============== ======= ======== =============== ======= ======== ============== ====== ========== ========= =======
Retail
properties 5,218 1,804 (384) - - - (46) - 6,592 6,654
-------------- ------- -------- --------------- ------- -------- -------------- ------ ---------- --------- -------
Office
properties 4,291 2,287 - - - - (15) 90 6,653 7,015
-------------- ------- -------- --------------- ------- -------- -------------- ------ ---------- --------- -------
Canada Water
properties 285 - - - - - (15) - 270 271
-------------- ======= ======== =============== ======= ======== ============== ====== ========== ========= =======
Total
properties 9,794 4,091 (384) - - - (76) 90 13,515 13,940
-------------- ------- -------- --------------- ------- -------- -------------- ------ ---------- --------- -------
Investments
in joint
ventures
and funds 2,764 (2,764) - - - - - - - -
-------------- ------- -------- --------------- ------- -------- -------------- ------ ---------- --------- -------
Other
investments 158 (2) - - - - - - 156 151
-------------- ------- -------- --------------- ------- -------- -------------- ------ ---------- --------- -------
Other net
(liabilities)
assets (375) (81) 5 36 5 - 76 - (334) (370)
-------------- ------- -------- --------------- ------- -------- -------------- ------ ---------- --------- -------
Net debt (2,709) (1,244) 125 - - 137 - - (3,691) (4,223)
============== ======= ======== =============== ======= ======== ============== ====== ========== ========= =======
Net assets 9,632 - (254) 36 5 137 - 90 9,646 9,498
============== ======= ======== =============== ======= ======== ============== ====== ========== ========= =======
EPRA NAV per
share (note
2) 939p 915p
============== ======= ======== =============== ======= ======== ============== ====== ========== ========= =======
30 September
2017 31 March 2017
----------------- ================= ==================
Pence Pence
GBPm per share GBPm per share
================= ===== ========== ====== ==========
Opening EPRA NAV 9,498 915 10,074 919
----------------- ----- ---------- ------ ----------
Income return 198 19 390 36
----------------- ----- ---------- ------ ----------
Capital return 100 20 (670) (13)
----------------- ----- ---------- ------ ----------
Dividend Paid (150) (15) (296) (27)
================= ===== ========== ====== ==========
Closing EPRA NAV 9,646 939 9,498 915
================= ===== ========== ====== ==========
Table B: EPRA Performance measures
EPRA Performance measures summary table
Six months ended Six months ended
30 September 30 September
2017 2016
-------------------------------------- ================== ==================
Pence Pence
GBPm per share GBPm per share
====================================== ===== =========== ===== ===========
EPRA Earnings - basic 198 19.3 199 19.3
---------------------- -------------- ----- ----------- ----- -----------
- diluted 198 19.2 199 19.3
===================================== ===== =========== ===== ===========
EPRA Net Initial Yield 4.3% 4.3%
-------------------------------------- ----- ----------- ----- -----------
EPRA 'topped-up' Net Initial Yield 4.6% 4.7%
-------------------------------------- ----- ----------- ----- -----------
EPRA Vacancy Rate 2.9% 2.7%
====================================== ===== =========== ===== ===========
30 September
2017 31 March 2017
------------ ====================== ======================
Net asset Net asset
value value
Net assets per share Net assets per share
GBPm pence GBPm pence
============ ========== ========== ========== ==========
EPRA NAV 9,646 939 9,498 915
------------ ---------- ---------- ---------- ----------
EPRA NNNAV 9,117 888 8,938 861
============ ========== ========== ========== ==========
Calculation and reconciliation of EPRA/IFRS earnings and EPRA/IFRS earnings per share
Six months Six months
ended 30 ended 30
September September
2017 2016
GBPm GBPm
============================================================== ========== ==========
Profit (loss) attributable to the shareholders of the
Company 239 (195)
-------------------------------------------------------------- ---------- ----------
Exclude:
-------------------------------------------------------------- ---------- ----------
Group - taxation (7) (1)
-------------------------------------------------------------- ---------- ----------
Group - valuation movement (141) 257
-------------------------------------------------------------- ---------- ----------
Group - profit on disposal of investment properties
and investments (20) (27)
-------------------------------------------------------------- ---------- ----------
Group - profit on disposal of trading properties (8) (3)
-------------------------------------------------------------- ---------- ----------
Joint ventures and funds - valuation movement (including
result on disposals) (18) 193
-------------------------------------------------------------- ---------- ----------
Joint ventures and funds - capital financing costs 9 6
-------------------------------------------------------------- ---------- ----------
Changes in fair value of financial instruments and associated
close-out costs 144 (15)
-------------------------------------------------------------- ---------- ----------
Non-controlling interests in respect of the above - (16)
============================================================== ========== ==========
EPRA earnings - basic 198 199
============================================================== ========== ==========
Dilutive effect of 1.5% convertible bond - -
============================================================== ========== ==========
EPRA earnings - diluted 198 199
============================================================== ========== ==========
Profit (loss) attributable to the shareholders of the
Company 239 (195)
-------------------------------------------------------------- ---------- ----------
Dilutive effect of 1.5% convertible bond - (26)
============================================================== ========== ==========
IFRS earnings - diluted 239 (221)
============================================================== ========== ==========
Six months Six months
ended 30 ended 30
September September
2017 2016
Number Number
million million
==================================================== ========== ==========
Weighted average number of shares 1,039 1,040
---------------------------------------------------- ---------- ----------
Adjustment for Treasury shares (11) (11)
==================================================== ========== ==========
IFRS/EPRA weighted average number of shares (basic) 1,028 1,029
==================================================== ========== ==========
Dilutive effect of share options 1 1
---------------------------------------------------- ---------- ----------
Dilutive effect of ESOP shares 2 3
---------------------------------------------------- ---------- ----------
Dilutive effect of 1.5% convertible bond - 58
==================================================== ========== ==========
IFRS weighted average number of shares (diluted) 1,031 1,091
==================================================== ========== ==========
Remove dilutive effect of 1.5% convertible bond - (58)
==================================================== ========== ==========
EPRA weighted average number of shares (diluted) 1,031 1,033
==================================================== ========== ==========
Net assets per share
30 September
2017 31 March 2017
----------------------------------------------- ============== ===============
Pence Pence
per per
GBPm share GBPm share
=============================================== ====== ====== ====== =======
Balance sheet net assets 9,632 9,476
=============================================== ====== ====== ====== =======
Deferred tax arising on revaluation movements 5 3
----------------------------------------------- ------ ------ ------ -------
Mark-to-market on derivatives and related debt
adjustments 137 155
----------------------------------------------- ------ ------ ------ -------
Dilution effect of share options 36 36
----------------------------------------------- ------ ------ ------ -------
Surplus on trading properties 90 83
----------------------------------------------- ------ ------ ------ -------
Less non-controlling interests (254) (255)
=============================================== ====== ====== ====== =======
EPRA NAV 9,646 939 9,498 915
=============================================== ====== ====== ====== =======
Deferred tax arising on revaluation movements (23) (19)
----------------------------------------------- ------ ------ ------ -------
Mark-to-market on derivatives and related debt
adjustments (137) (155)
----------------------------------------------- ------ ------ ------ -------
Mark-to-market on debt (369) (386)
=============================================== ====== ====== ====== =======
EPRA NNNAV 9,117 888 8,938 861
=============================================== ====== ====== ====== =======
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.
30 September 31 March
2017 2017
Number Number
million million
================================================ ============ ========
Number of shares at period/year end 1,030 1,040
------------------------------------------------ ------------ --------
Adjustment for treasury shares (11) (11)
================================================ ============ ========
IFRS/EPRA Number of shares (basic) 1,019 1,029
================================================ ============ ========
Dilutive effect of share options 2 3
------------------------------------------------ ------------ --------
Dilutive effect of ESOP shares 6 6
------------------------------------------------ ------------ --------
Dilutive effect of 1.5% convertible bond - 58
================================================ ============ ========
IFRS number of shares (diluted) 1,027 1,098
================================================ ============ ========
Remove dilutive effect of 1.5% convertible bond - (58)
================================================ ============ ========
EPRA number of shares (diluted) 1,027 1,038
================================================ ============ ========
EPRA Net Initial Yield and 'topped-up' Net Initial Yield
30 September 30 September
2017 2016
GBPm GBPm
======================================================== ============ ============
Investment property - wholly-owned 9,502 9,321
-------------------------------------------------------- ------------ ------------
Investment property - share of joint ventures and funds 4,013 4,598
-------------------------------------------------------- ------------ ------------
Less developments, residential and land (1,242) (951)
-------------------------------------------------------- ============ ============
Completed property portfolio 12,273 12,968
-------------------------------------------------------- ------------ ------------
Allowance for estimated purchasers' costs 813 914
======================================================== ============ ============
Gross up completed property portfolio valuation (A) 13,086 13,882
======================================================== ============ ============
Annualised cash passing rental income 581 610
-------------------------------------------------------- ------------ ------------
Property outgoings (13) (9)
======================================================== ============ ============
Annualised net rents (B) 568 601
======================================================== ============ ============
Rent expiration of rent-free periods and fixed uplifts1 32 50
======================================================== ============ ============
'Topped-up' net annualised rent (C) 600 651
-------------------------------------------------------- ------------ ------------
EPRA Net Initial Yield (B/A) 4.3% 4.3%
-------------------------------------------------------- ------------ ------------
EPRA 'topped-up' Net Initial Yield (C/A) 4.6% 4.7%
======================================================== ============ ============
Including fixed/minimum uplifts received in lieu of
rental growth 11 16
======================================================== ============ ============
Total 'topped-up' net rents (D) 611 667
-------------------------------------------------------- ------------ ------------
Overall 'topped-up' Net Initial Yield (D/A) 4.7% 4.8%
======================================================== ============ ============
'Topped-up' net annualised rent 600 651
-------------------------------------------------------- ------------ ------------
ERV vacant space 19 19
-------------------------------------------------------- ------------ ------------
Reversions 32 31
======================================================== ============ ============
Total ERV (E) 651 701
-------------------------------------------------------- ------------ ------------
Net Reversionary Yield (E/A) 5.0% 5.0%
======================================================== ============ ============
1 The weighted average period over which rent-free periods expire is 1 year (30 September 2016: 1 year).
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 30 September 2017, 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 un-rented, lettable space as a proportion of the total rental value of the completed property portfolio.
EPRA Vacancy Rate
30 September 30 September
2017 2016
GBPm GBPm
===================================================== ============ ============
Annualised potential rental value of vacant premises 19 19
----------------------------------------------------- ------------ ------------
Annualised potential rental value for the completed
property portfolio 662 710
----------------------------------------------------- ------------ ------------
EPRA Vacancy Rate 2.9% 2.7%
===================================================== ============ ============
EPRA Cost Ratios
Six months Six months
ended 30 ended 30
September September
2017 2016
GBPm GBPm
=========================================================== ========== ==========
Property operating expenses 15 10
----------------------------------------------------------- ---------- ----------
Administrative expenses 40 41
----------------------------------------------------------- ---------- ----------
Share of joint ventures and funds expenses 5 7
----------------------------------------------------------- ---------- ----------
Performance & management fees (from joint ventures
Less: & funds) (3) (4)
------ --------------------------------------------------- ---------- ----------
Other fees and commission (5) (4)
---------------------------------------------------------- ---------- ----------
Ground rent costs (1) (1)
========================================================== ========== ==========
EPRA Costs (including direct vacancy costs) (A) 51 49
----------------------------------------------------------- ---------- ----------
Direct vacancy costs (10) (6)
=========================================================== ========== ==========
EPRA Costs (excluding direct vacancy costs) (B) 41 43
----------------------------------------------------------- ---------- ----------
Gross Rental Income less ground rent costs 212 215
----------------------------------------------------------- ---------- ----------
Share of joint ventures and funds (Gross Rental Income
less ground rent costs) 103 111
=========================================================== ========== ==========
Total Gross Rental Income (C) 315 326
----------------------------------------------------------- ---------- ----------
EPRA Cost Ratio (including direct vacancy costs) (A/C) 16.2% 15.0%
----------------------------------------------------------- ---------- ----------
EPRA Cost Ratio (excluding direct vacancy costs) (B/C) 13.0% 13.2%
----------------------------------------------------------- ---------- ----------
Overhead and operating expenses capitalised (including
share of joint ventures and funds) 3 2
=========================================================== ========== ==========
In the current and prior periods employee costs in relation to staff time on development projects are capitalised into the base cost of relevant development assets.
Table C: Gross rental income
Six months Six months
ended 30 ended 30
September September
2017 2016
GBPm GBPm
============================================================= ========== ==========
Rent receivable 304 317
------------------------------------------------------------- ---------- ----------
Spreading of tenant incentives and guaranteed rent increases (8) 8
------------------------------------------------------------- ---------- ----------
Surrender premia 20 2
============================================================= ========== ==========
Gross rental income 316 327
============================================================= ========== ==========
The current and prior period information is presented on a proportionally consolidated basis, excluding non-controlling interests.
Table D: Property related capital expenditure
Six months ended 30 Year ended 31 March
September 2017 2017
============================= ======================== ========================
Joint Joint
ventures ventures
Group and funds Total Group and funds Total
============================= ===== ========== ===== ===== ========== =====
Acquisitions 141 - 141 88 - 88
----------------------------- ----- ---------- ----- ----- ---------- -----
Development 50 16 66 131 14 145
----------------------------- ----- ---------- ----- ----- ---------- -----
Like-for-like portfolio 34 15 49 67 47 114
----------------------------- ----- ---------- ----- ----- ---------- -----
Other 8 2 10 20 2 22
============================= ===== ========== ===== ===== ========== =====
Total property related capex 233 33 266 306 63 369
============================= ===== ========== ===== ===== ========== =====
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 GBP2m (31 March 2017: GBP7m), letting fees of GBP2m (31 March 2017: GBP3), capitalised staff costs of GBP3m (31 March 2017: GBP5m) and capitalised interest of GBP3m (31 March 2017: GBP7m).
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LFFSILRLELID
(END) Dow Jones Newswires
November 16, 2017 02:01 ET (07:01 GMT)
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