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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Helical Plc | LSE:HLCL | London | Ordinary Share | GB00B0FYMT95 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -1.40 | -0.71% | 197.00 | 195.00 | 197.00 | 198.40 | 195.20 | 195.20 | 9,743 | 11:32:16 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Lessors Of Real Property,nec | 49.85M | -64.51M | -0.5230 | -3.77 | 243.01M |
From Apr 2019 to Apr 2024
TIDMHLCL
RNS Number : 0049Q
Helical PLC
24 November 2016
HELICAL PLC
("Helical" or the "Group" or the "Company")
Half Year Results for the Six Months to 30 September 2016
HELICAL'S MILESTONES DELIVERING GROWTH
Gerald Kaye, Chief Executive, commented:
"Against a background of some uncertainty in the UK Real Estate market and widespread debate as to whether the "property cycle" has peaked or is merely pausing, Helical's results for the half year to 30 September 2016 show growing net rental income, a net gain on sale and revaluation of our investment portfolio, growth in Shareholders' Funds and an increase in our EPRA net asset value per share.
"Helical's portfolio at the half year reflected passing rents of GBP39m, contracted rents of a further GBP13m and an ERV of GBP78m. As this reversionary potential is captured and passing rental income grows, I would expect our EPRA earnings per share to grow proportionately.
"In London, where most of this reversionary potential exists, we have an exciting collection of assets under refurbishment and development in locations where we believe demand from occupiers will continue to be robust. Today's news of a 59,000 sq ft pre-let at The Bower is a good example of this and I am confident that we will continue to attract occupiers to ensure that our schemes become vibrant and dynamic office communities.
"Looking ahead, the UK faces a continued period of uncertainty as it seeks its place in a post Brexit world. However, I believe it will remain resilient and London will continue to be a World City attracting people, businesses and investors."
Financial Highlights
Results
-- EPRA net asset value per share up 3% to 471p (31 March 2016: restated 456p). -- EPRA earnings per share of 4.4p (2015: 13.0p). -- IFRS Profit before tax of GBP31.1m (2015: GBP85.9m). -- Total Property Return of GBP47.8m (2015: GBP107.6m). - Group's share of net rental income of GBP24.6m (2015: GBP20.8m) - up 18%. - Net gain on sale and revaluation of investment properties of GBP25.8m (2015: GBP68.1m). -- Interim dividend proposed of 2.40p per share (2015: 2.30p) - up 4.3%.
Property Valuations
-- Group's share of property portfolio GBP1,250m (31 March 2016: GBP1,240m).
-- Investment property valuations, on a like-for-like basis, up 4.0% (3.0% including sales and purchases) with London office valuations up 5.3% (5.3% including sales and purchases).
Financing
-- See-through loan to value of 39% on a secured basis (31 March 2016: 40%) and 53% overall (31 March 2016: 55%). Post 30 September 2016 sales reduce pro forma loan to value to 34% on a secured basis and 49% overall.
-- Average maturity of the Group's share of debt of 4.0 years (31 March 2016: 4.5 years) at an average cost of 4.3% (31 March 2016: 4.2%).
-- Group's share of cash and undrawn bank facilities at 30 September 2016 of GBP220m (31 March 2016: GBP193m).
Operational Highlights
London Portfolio
-- 5.3% valuation increase of London investment portfolio now valued at GBP651m (61.5% of investment portfolio) - 31 March 2016: GBP593m (56.4%).
-- Contracted rents on our London portfolio at 30 September 2016 were GBP23.4m compared to an ERV of GBP46.9m.
-- At Barts Square EC1, 108 of the 144 residential units in Phase One had exchanged at 23 November 2016 (31 March 2016: 102 units), with a further two reserved.
-- One King Street, Hammersmith, W6 was sold post 30 September 2016 for GBP34.5m, its March value, at a net initial yield of 4.85%.
-- Completion of a major refurbishment at The Loom, E1 with 13,750 sq ft subsequently let at rents in excess of GBP50 psf and a further 9,250 sq ft under offer.
Regional Portfolio
-- 1.0% valuation increase in the Regional investment portfolio, on a like for like basis, now valued at GBP408m (38.5% of investment portfolio) - 31 March 2016: GBP460m (43.6%).
-- Contracted gross rents on regional investment portfolio of GBP28.5m (31 March 2016: GBP32.4m).
-- Regional investment portfolio now comprises 9.5% offices, 5.4% in town retail, 3.0% retail parks, 19.5% logistics and 1.1% other (percentages of whole investment portfolio)
-- Sales of nine regional assets during the period comprising two logistics units, two offices and five retail assets for GBP56m at a 3.6% discount to March values.
-- Sales of ten logistics units and one retail asset post 30 September 2016 for GBP55m at a 6.7% premium to March values.
-- 23,735 sq ft let at Churchgate House, Manchester at average rents of GBP16.50 psf, 7.7% above March ERV.
-- 92,672 sq ft logistics unit let in Burton-on-Trent at GBP5.50 psf, 5% above March ERV. -- Since March 2016, 56 retirement village units sold for GBP22.7m with 44 reserved for GBP22.3m. -- Land at Liphook sold for GBP3.7m (of which GBP2.5m was subsequent to half year end).
For further information, please contact:
Hot Features
Premium
Helical plc 020 7629 0113
Gerald Kaye (Chief Executive)
Tim Murphy (Finance Director)
Address: 5 Hanover Square, London W1S
1HQ
Website: www.helical.co.uk
FTI Consulting 020 3727 1000
Dido Laurimore/Tom Gough/Richard Gotla
Half Year Results Presentation
Helical will be holding a presentation for analysts and investors at 9:30am, Thursday 24 November 2016 at FTI Consulting, 200 Aldersgate, Aldersgate Street, London, EC1A 4HD. If you would like to attend, please contact Jenni Nkomo on 020 3727 1000, or jenni.nkomo@fticonsulting.com.
The presentation will be on the Company's website www.helical.co.uk and a conference call facility will be available. The dial-in details are as follows:
Participants, Local - London, United Kingdom: +44(0)203 043 2002 Confirmation Code: 1906196
Financial Highlights
Year to
Half Year to Half Year to 31 March
Notes 30 September 2016 30 September 2015 2016
See-through Income Statement 1 GBPm GBPm GBPm
--------------------------------------------- ------ ------------------ ------------------ ---------
Net rental income 24.6 20.8 43.4
Development property (losses)/profits (2.6) 18.7 27.5
Gain on revaluation of investment properties 28.6 59.8 49.8
(Loss)/gain on sale of investment properties (2.8) 8.3 43.9
----------------------------------------------------- ------------------ ------------------ ---------
Total property return 47.8 107.6 164.6
----------------------------------------------------- ------------------ ------------------ ---------
IFRS Profit before tax 31.1 85.9 114.0
EPRA earnings 5.0 14.9 19.6
Earnings Per Share and Dividends Pence Pence Pence
---------------------------------------- ------- ------- -------
Basic earnings per share 2 27.8 66.1 91.3
Diluted earnings per share 2 26.6 63.7 88.0
EPRA earnings per share 2 4.4 13.0 17.1
Dividends per share paid in period 0.72 5.15 12.60
Dividends per share declared for period 2.40 2.30 8.17
---------------------------------------- ------- ------- -------
At
At At 31 March
30 September 2016 30 September 2015 2016
See-through Balance Sheet 3 GBPm GBPm GBPm
------------------------------------------------ --- ------------------ ------------------ ---------
See-through property portfolio 1,249.5 1,066.3 1,240.0
See-through net borrowings 664.3 518.0 681.8
Net assets 508.9 461.2 480.7
------------------------------------------------ --- ------------------ ------------------ ---------
Net assets per share, gearing and loan to value
------------------------------------------------ --- ------------------ ------------------ ---------
EPRA Net Asset Value per share 4 471p 436p 456p
See-through loan to value 5 53% 49% 55%
Pro-forma see-through loan to value 6 49% n/a n/a
See-through net gearing 7 131% 112% 142%
See-through Net Asset Value gearing 8 118% 99% 126%
------------------------------------------------ --- ------------------ ------------------ ---------
Notes
1. Includes Group's share of income and gains of its subsidiaries and joint ventures. See Note 25.
2. Calculated in accordance with IAS 33 and guidance issued by the European Public Real Estate Association ("EPRA"). EPRA earnings per share exclude the net gain on sale and revaluation of the investment portfolio of GBP25.8m (2015: GBP68.1m) but include development losses of GBP2.6m (2015: profits of GBP18.7m).
3. Includes the Group's share of assets and liabilities of its subsidiaries and joint ventures. See Note 25.
4. The EPRA Net Asset Value per share at 31 March 2016 has been restated from 461p for the matters referred to in note 28.
5. See-through loan to value is the ratio of see-through net borrowings to see-through property portfolio. See Note 26.
6. See-through loan to value at 30 September 2016, adjusted for GBP91.5m of sales since the half year end.
7. See-through net gearing is the ratio of see-through net borrowings to net assets. See Note 26.
8. See-through net asset value gearing is the ratio of see-through net borrowing to EPRA net asset value. See Note 26.
Chief Executive's Statement
Overview
I am pleased to be able to announce the Company's Half Year Results to 30 September 2016, my first results as Chief Executive Officer of Helical.
Against a background of some uncertainty in the UK Real Estate market and widespread debate as to whether the "property cycle" has peaked or is merely pausing, Helical's results show growing net rental income, a net gain on sale and revaluation of our investment portfolio, growth in Shareholders' Funds and an increase in our EPRA net asset value per share.
The results demonstrate:
-- our ability to enhance value through our development programme; -- the success of our asset management initiatives for individual assets; and, -- that stock selection is key to performance.
Our business model, using investment, trading and development strategies to acquire assets on an opportunity led basis, continues to have the potential to create value for Shareholders. For a number of years we have sought a balance between a higher yielding regional portfolio providing good cash flow for the business with development and capital profits coming from the London portfolio, augmented by our retirement and retail development programmes.
In recent years, we have made significant progress in de-risking our development programme, funding our largest two London schemes at One Creechurch Place, EC3 and One Bartholomew Place, EC1, with third party investors. Since 31 March 2016 we have made further progress on de-risking this development programme. These actions have enabled Helical to release equity from those properties where our asset management objectives have been met (One King Street, Hammersmith and two logistics portfolios) and to reduce our loan to value ("LTV") below our medium to long term target of 50%. As further asset management plans reach their conclusion, and as we continue to focus the business, I would expect additional recycling of equity to provide firepower for future acquisitions or to further reduce LTV levels.
Helical's portfolio at the half year reflected passing rents of GBP39m, contracted rents of a further GBP13m and an ERV of GBP78m. As this reversionary potential is captured and passing rental income grows, I would expect our EPRA earnings per share to grow proportionately.
In London, where most of this reversionary potential exists, we have an exciting collection of assets under refurbishment and development in locations where we believe demand from occupiers will continue to be robust. Today's news of a 59,000 sq ft pre-let at The Bower is a good example of this and I am confident that we will continue to attract occupiers to ensure that our schemes become vibrant and dynamic office communities.
Results for the Half Year
The IFRS profit before tax for the half year to 30 September 2016 was GBP31.1m (2015: GBP85.9m), Total Property Return was GBP47.8m (2015: GBP107.6m) and included growing net rents of GBP24.6m, an increase of 18.3% on 2015 (GBP20.8m), offset by development losses of GBP2.6m (2015: profit of GBP18.7m). The gain on sale and revaluation of the investment portfolio contributed GBP25.8m (2015: GBP68.1m).
Net finance costs of GBP12.8m were higher than in 2015 (GBP10.0m), and the Income Statement was adversely affected by falls in expected future interest rates which led to a GBP5.9m charge (2015: credit of GBP0.01m) arising from the valuation of the Group's derivative financial instruments. The valuation of the Group's Convertible Bond provided a credit of GBP7.7m (2015: GBP0.1m). Recurring administration costs were GBP5.8m (2015: GBP5.4m) and the provision for performance related remuneration, including associated NIC, was GBP0.1m (2015: GBP8.7m).
These results allow the Board to continue its progressive dividend policy and to recommend to Shareholders an interim dividend of 2.40p (2015: 2.30p), an increase of 4.3%.
The London Portfolio
Since 2010 we have steadily acquired property in two "clusters"; the City and Tech Belt districts of Farringdon, Shoreditch, Aldgate through to Whitechapel and the West London districts of Hammersmith, Shepherds Bush and Chiswick.
The London investment and development portfolio contributes capital growth and development profits and, increasingly, rental income. In the half year to 30 September 2016, London provided c. 66% of the total property return of GBP47.8m (2015: GBP107.6m).
-- City and Tech Belt
Helical has a portfolio of six investment assets in the East London districts of Shoreditch, Farringdon and Whitechapel acquired between 2012 and 2015. Five of these assets have been subject to complete or substantial redevelopment/refurbishment programmes. The assets in the Tech Belt comprise 42% of our total property portfolio and have made a substantial contribution to the growth of our current and future rental income stream and to the growth in our net assets.
Phase One of The Bower, comprising The Warehouse and The Studio, is fully let with contracted rents of GBP8.0m at an average of GBP53 psf compared to an ERV of GBP62 psf. Phase Two, The Tower, is being redeveloped, adding 65,000 sq ft to the current building, taking the completed building to 171,200 sq ft of offices and 7,200 sq ft of retail with works due for completion in June 2018. We are pleased to be able to announce today the pre-letting of six floors, comprising c. 59,000 sq ft, to WeWork, the global provider of flexible collaborative co-working space.
At The Loom, E1 we completed a major repositioning in September and recently announced two separate lettings totalling 4,750 sq ft at rents of GBP52.50 psf, a 17% premium to March 2016 ERV. A further 29,000 sq ft of this 110,000 sq ft building is available to let with 9,250 sq ft currently under offer.
We have let the remaining 15,387 sq ft at C-Space, EC1 and at 25 Charterhouse Square, EC1 we have made good progress on the redevelopment and expect works at this 43,674 sq ft building to complete in March 2017.
In the City we have completed and launched our 272,555 sq ft new office building at One Creechurch Place, EC3, funded with our joint venture partner HOOPP (Healthcare of Ontario Pension Plan). Several potential tenants are showing interest in taking space in the building and we hope that we shall be able to announce lettings by the end of our financial year.
At Barts Square, EC1, our mixed use scheme in joint venture with The Baupost Group LLC, we have now exchanged contracts on 108 of the 144 residential units with a further two units reserved in Phase One of the development. Phased completion of these units is expected to commence in Q2 2017. Demolition of the existing buildings for the second phase of residential is due to commence in December 2016 for 92 additional units with completion expected in 2019. Terms have been agreed with HSBC for the financing of these works. The office development of 213,000 sq ft at One Bartholomew Close, forward funded by clients of Ashby Capital, is under construction with completion due in August 2018.
-- The West
We had five assets in West London at 30 September 2016 comprising c. 17% of our total property portfolio. At One King Street, Hammersmith we have completed our asset management programme, having refurbished the building, adding a fifth floor to create 26,000 sq ft of offices with retail units on the ground floor. Having delivered on the business plan we sold the building in November 2016 for its March 2016 book value of GBP34.5m, a net initial yield of 4.85%. At Shepherd's Building, Shepherds Bush, W14 we have grown contracted rents to GBP6.3m with the most recent lettings at GBP54 psf. At Power Road Studios, W4 we have taken 17,000 sq ft of space back and are shortly to start on refurbishment works which is partly funded by dilapidations receipts and will increase rents from GBP22 psf to GBP42.50 psf. A planning application to add further office space is expected to be submitted in December 2016.
The Regional Portfolio
The regional portfolio provides a rental stream from a high yielding investment portfolio while contributing development profits from our retirement village and out-of-town retail development programmes.
The regional investment portfolio reduced to GBP408m at 30 September 2016 (31 March 2016: GBP460m) following the sale of two distribution warehouses, five retail assets and two regional offices for total proceeds of GBP56m. Subsequent to the half year end we have sold a further ten distribution warehouses and one retail asset for c.GBP55m, a 3.3% premium to 30 September 2016 book values and an 6.7% premium to March 2016 book values. Regional assets contributed GBP17.8m of net rental income during the period (2015: GBP15.6m).
Our regional development exposure is limited to our retirement villages, out-of-town retail development programmes and our Scottish Power project in Glasgow, where balance sheet risk is limited. In our retirement village development programme we continued the construction of units at Bramshott Place Liphook, Durrants Village Horsham, Millbrook Village Exeter and Maudslay Park Great Alne, near Stratford-upon-Avon. Since March we have sold 56 residential units at the three schemes (14 since 30 September 2016) and land at Liphook for GBP3.7m (GBP2.5m since 30 September 2016). In our retail development programme, we have forward funded our 79,750 sq ft retail park in Cortonwood, which is 95% pre-let and due for completion in June 2017. Scottish Power's new headquarters building in Glasgow is due to be completed by the end of this month.
Finance
In recent years, the Group has expanded its activities significantly, seeking to increase Shareholder Funds through the generation and retention of increased net rental streams, development profits and valuation surpluses. This growth has been financed through an increase in secured debt borrowed primarily from UK high street banks and, since 2013, through the use of unsecured debt in the form of a retail bond and a convertible bond.
At 31 March 2016, the growth in the activities took the LTV up to 55%. Since 31 March 2016, we have sold five of our eight out-of-town retail assets, two of our regional offices, 12 of our distribution warehouses (ten since 30 September 2016), one of our Central London offices and our 50% share of a shopping centre (both post half year end), reducing LTV to 53% at 30 September 2016 and to c. 49% on a pro-forma basis, taking into account the recent sales. With the first phase of our major residential scheme at Barts Square completing in mid 2017 and our retirement village development programme expected to be cash positive going forward, we expect to see further reductions in net debt levels and LTV in the foreseeable future, notwithstanding the planned capital expenditure on the portfolio.
As our individual asset management initiatives on our investment portfolio complete, driving rental income upwards and maximising value, we would expect to see equity recycled and cash resources boosted, enabling the Group to finance new acquisitions with potential for growth.
In pursuing this strategy, the Group operates with an average debt maturity of 4.0 years (31 March 2016: 4.5 years) with no secured loan repayable before November 2019, and with an average cost of debt of 4.3% (31 March 2016: 4.2%). The Group continues to retain a significant level of liquidity with cash and unutilised bank facilities of GBP220m (31 March 2016: GBP193m) to fund capital works and potential future additions to its portfolio.
Outlook
We stated in May that Helical is well placed to deal with any headwinds that may come its way and we reiterate that statement in the knowledge that we have made good progress on our development programme:
-- we have completed One Creechurch Place, EC3 on time and on budget and are encouraged with the level of interest being shown by potential tenants;
-- we have agreed a fixed price building contract on the second phase of The Bower and have pre-let one third of the space at rents in line with our latest valuation;
-- we have let the remaining space at C Space, EC1 at 31 March 2016 ERV levels;
-- construction works continue at One Bartholomew Close, EC1, a scheme forward sold and wholly funded by clients of Ashby Capital;
-- we are on track to complete the redevelopment work at Charterhouse Square, EC1 in March 2017 and initial interest from potential tenants is encouraging; and,
-- we have exchange contracts on over 75% of Phase One of our residential scheme at Barts Square, well in advance of completion and have agreed terms for the financing of the final phase of residential.
In addition, we have a robust investment portfolio where we have demonstrated value through lettings above ERV and sales above book value.
When considering our strategy, we remain of the view that our portfolio, balanced between investments and redevelopment schemes in central London and high yielding regional investment assets, provides investors with access to a growing income stream and potential future capital growth.
Looking ahead, the UK faces a continued period of uncertainty as it seeks its place in a post Brexit world. However, I believe the UK will remain resilient and London will continue to be a World City attracting people, businesses and investors.
Gerald Kaye
Chief Executive
24 November 2016
Financial Review
Results for the Half Year
Despite growing concerns over the impact of global events, we are pleased to be able to report good results with pre-tax profits of GBP31.1m in the half year to 30 September 2016 (2015: GBP85.9m). Growing net rental income of GBP24.6m and a valuation surplus of GBP28.6m (2015: GBP59.8m) were driven by our London development and asset management strategies.
The fair value of the Group's real estate portfolio, including its share of assets held in joint ventures, increased to GBP1,250m (31 March 2016: GBP1,240m).
The Group acquired no new assets during the period and concentrated on value enhancing capital expenditure and letting available space which helped to create an increase in the value of its investment portfolio by GBP34.4m, of which GBP5.3m came through lease incentives and GBP29.1m as revaluation surpluses. This valuation increase and sales of GBP57m of investment assets during the period, helped to reduce the Group's loan to value to 53% (31 March 2016: 55%). Since the half year end, further sales of GBP91.5m of assets has reduced the Group's loan to value, based on the 30 September 2016 balance sheet, to 34% on a secured basis and 49% overall.
During the period we increased our facility with Deutsche Pfandbriefbank by GBP21m to GBP120m to fund the redevelopment of Charterhouse Square and refinanced our retirement village development facility with HSBC to fund the development of Phase 4 at Bramshott Place Liphook. At 30 September 2016, the Group's overall debt maturity profile reduced to 4.0 years (31 March 2016: 4.5 years) with a weighted average cost of debt marginally increasing to 4.3% (31 March 2016: 4.2%).
At 30 September 2016, the Group had unutilised bank facilities of GBP155m and GBP65m of cash. These facilities are primarily available to fund Phase Two of the Group's redevelopment of The Bower, London EC1, its retirement village development programme, Phase One of the construction works at Barts Square, London EC1, refurbishment works at 25 Charterhouse Square, London EC1 and potential future investment acquisitions.
EPRA Earnings per Share
EPRA earnings per share were 4.4p (2015: 13.0p), reflecting the Group's share of net rental income of GBP24.6m (2015: GBP20.8m) net of development losses of GBP2.6m (2015: profits GBP18.7m) but excluding gains on sale and revaluation of investment properties of GBP25.8m (2015: GBP68.1m).
EPRA Net Asset Value
EPRA net asset value per share increased by 3% to 471p per share (31 March 2016: 456p). This increase arose principally from a total comprehensive income (retained profits) of GBP31.7m (2015: GBP75.7m) less dividends paid of GBP0.8m (2015: GBP5.9m) and reflecting a reduction in the surplus on valuation of the trading and development stock to GBP13.6m (31 March 2016: GBP19.4m).
Income Statement
Rental Income and Property Overheads
Gross rental income receivable by the Group in respect of wholly owned properties increased by 20% to GBP25.5m (2015: GBP21.2m) as we continue to capture the investment portfolio's reversionary potential. In the joint ventures, gross rents fell from GBP1.0m to GBP0.8m. Property overheads in respect of wholly owned assets and in respect of those assets in joint ventures increased from GBP1.1m to GBP1.5m and after taking account of net rents payable to our profit share partners of GBP0.2m (2015: GBP0.2m), see-through net rents increased by 18.3% to GBP24.6m (2015: GBP20.8m).
Development Profits
Development profits, before provisions, reduced from GBP20.2m to GBP4.0m on a see-through basis. The main contributor to profits during the period was the out-of-town retail development at Cortonwood where we recognised GBP3.1m of development profits at this 79,750 sq ft retail park. Continued development management fees at the Scottish Power headquarters in Glasgow and at One Creechurch Place, London EC3, plus profits from the sale of our site in Bracknell, contributed a further GBP1.3m. Provisions against the carrying value of sites at Maudslay Park, Great Alne and King Street, London W6 offset these development profits and resulted in a net loss on developments of GBP2.6m on a see-through basis.
Share of Results of Joint Ventures
The results of the joint ventures include our development schemes at Barts Square, London EC1; One Creechurch Place, London EC3; Shirley Town Centre, West Midlands; and King Street, London W6. Detailed analysis of our share of these joint ventures is provided in note 13 to this report and in the see-through analysis in note 25. In the period, net rents of GBP0.7m (2015: GBP0.8m) were received. A loss on the revaluation of the investment assets of GBP0.5m (2015: gain of GBP23.4m) arose in respect of Barts Square, London EC1. Net of taxes, our joint ventures incurred a loss of GBP1.0m (2015: profit of GBP31.8m).
Gain on Sale and Revaluation of Investment Properties
The valuation of our investment portfolio reflected our increased exposure to London offices where we generated an increase of 5.3% overall and also on a like-for-like basis. The regions showed a valuation fall of 0.1% overall and an increase of 1.1% on a like-for-like basis. In total, the investment portfolio showed a valuation increase of 3.0%, or 4.0% on a like-for-like basis.
The total impact on our financial statements of the gain on sale and revaluation of our investment portfolio was a net gain of GBP25.8m (2015: GBP68.1m).
Administration Costs
Administration costs, before performance related awards, increased by 7% from GBP5.4m to GBP5.8m. Performance related share awards of GBP0.3m (2015: GBP2.8m) and bonus payments of GBPnil (2015: GBP4.5m), were accrued. In addition, there was a credit for the reversal of previously accrued National Insurance of GBP0.2m (2015: charge of GBP1.4m).
Finance Costs, Finance Income and Derivative Financial Instruments
Interest payable on secured bank loans, including our share of loans on assets held in joint ventures, but before capitalised interest, increased to GBP10.6m (2015: GBP10.0m) reflecting the impact of funding our development programme with bank finance. Interest payable in respect of the unsecured Retail and Convertible Bonds was GBP4.4m (2015: GBP4.4m). Capitalised interest increased from GBP2.4m to GBP3.5m as development schemes progressed. Other interest payable increased from GBP1.5m to GBP2.5m reflecting an increase in the amortisation of bank arrangement fees. Total finance costs increased from GBP13.4m to GBP14.1m and finance income earned was GBP2.3m (2015: GBP1.2m). Net finance costs for the period reduced from GBP12.1m to GBP11.7m. The continued fall in medium and long term interest rate projections at 30 September 2016 contributed to a charge of GBP5.9m (2015: GBPnil) on the derivative financial instruments which have been valued on a mark-to-market basis.
Taxation
Helical pays corporation tax on its net rental income, trading and development profits and realised chargeable gains, after offset of administration and finance costs.
The deferred tax credit for the half year is principally derived from the recognition of tax losses which the Group believes will be utilised against profits in the foreseeable future.
Dividends
Helical follows a progressive dividend policy, seeking to increase its dividends in line with its results and expected future profitability, whilst retaining the majority of funds generated for investment in growing the business. The interim dividend to be paid on 30 December 2016 is 2.40p (2015: 2.30p) per share, an increase of 4.3%.
Balance Sheet
Investment Portfolio
During the period no new investment assets were acquired whilst nine investment assets were sold with a combined book value of GBP57.2m. In accordance with the Group's current development and refurbishment programme, GBP26.1m was expended on capital works in the London investment portfolio and GBP3.5m on the regional investment portfolio. During the period, new lettings, erosion of rent free periods and other asset management activities created a revaluation surplus of GBP34.4m
Wholly owned In joint venture See-through
GBP000 GBP000 GBP000
---------------------------------------------- ------------ ---------------- -----------
Valuation at 31 March 2016 1,041,100 11,552 1,052,652
Acquisitions - - -
Capital Expenditure 27,806 1,791 29,597
Disposals (57,243) - (57,243)
Revaluation Surplus - Helical 34,397 (510) 33,887
- Profit Share Partners (50) - (50)
Valuation at 30 September 2016 1,046,010 12,833 1,058,843
---------------------------------------------- ------------ ---------------- -----------
Disclosed as:
Investment properties 1,034,687 12,833 1,047,520
In Trade and other receivables 11,323 - 11,323
------------------------------- --------- ------ ---------
1,046,010 12,833 1,058,843
------------------------------- --------- ------ ---------
Debt and Financial Risk
In seeking to finance Helical's recent expansion, the Group has used a combination of secured facilities, whose purpose and terms reflect the nature of the assets charged to the lenders, and unsecured bonds which have provided the firepower to acquire many of the assets which have contributed to the recent growth in Shareholders' Funds. The composition of the Group's debt structure has significantly changed in recent years with unsecured debt now representing 24% of debt drawn at 30 September 2016.
In total, Helical's outstanding debt at 30 September 2016 of GBP737m (31 March 2016: GBP778m) had an average maturity of 4.0 years (31 March 2016: 4.5 years) and a weighted interest cost of 4.3% (31 March 2016: 4.2%).
Debt profile at 30 September 2016 (excluding the impact of capitalised refinancing costs)
Total Total Weighted Average
Facility Utilised Available Facility Net LTV Interest Rate Average Maturity
GBP000's GBP000's GBP000's % % Years
------------------------ --------- --------- ------------------ ------- ----------------------- ----------------
Investment facilities 589,566 472,925 116,641 - 4.3 4.4
Development facilities 60,000 46,119 13,881 - 3.6 3.9
------------------------ --------- --------- ------------------ ------- ----------------------- ----------------
Total wholly owned 649,566 519,044 130,522 - 4.2 4.3
In joint ventures 58,035 43,198 14,837 - 3.1 3.2
------------------------ --------- --------- ------------------ ------- ----------------------- ----------------
Total secured debt 707,601 562,242 145,359 39.2 4.2 4.2
Retail bond 80,000 80,000 - - 6.0 3.6
Convertible bond 100,000 100,000 - - 4.0 2.6
Working capital 10,000 - 10,000 - - -
Fair value of
convertible bond (4,916) (4,916) - - - -
------------------------ --------- --------- ------------------ ------- ----------------------- ----------------
Total unsecured debt 185,084 175,084 10,000 - 4.9 3.2
------------------------ --------- --------- ------------------ ------- ----------------------- ----------------
Total debt 892,685 737,326 155,359 53.2 4.3 4.0
------------------------ --------- --------- ------------------ ------- ----------------------- ----------------
Secured Debt
The Group arranges its secured investment and development facilities to suit its business needs as follows:
- Investment Facilities
We have GBP190m of revolving credit facilities which enable the group to acquire, refurbish, reposition and hold significant parts of our investment portfolio. We have used these facilities mainly to finance our regional portfolio. Our London investment assets are primarily held in GBP400m of secured loan facilities which, where appropriate, allow us to finance refurbishment projects, including the redevelopment of The Tower at The Bower, London EC1 and 25 Charterhouse Square, London EC1. Of the total of GBP590m of investment facilities we have GBP117m available to fund these redevelopment works and finance any new acquisitions. The average maturity of the Group's investment facilities at 30 September 2016 was 4.4 years with a weighted average interest rate of 4.3%.
- Development Facilities
These facilities finance the construction of the retirement villages at Durrants Village Horsham; Maudslay Park Great Alne; Phase IV at Bramshott Place Liphook and Millbrook Village, Exeter. The average maturity of the Group's development facilities at 30 September 2016 was 3.9 years with a weighted average interest rate of 3.6%.
- Joint Venture Facilities
We hold a number of investment and development properties in joint venture with third parties and include in our reported figures our share, in proportion to our economic interest, of the debt associated with each asset. The average maturity of the Group's share of bank facilities in joint ventures at 30 September 2016 was 3.2 years with a weighted average interest rate of 3.1%.
Unsecured Debt
The Group's unsecured debt, including the convertible bond at its mark-to-market valuation, is GBP175.1m as follows:
- Retail Bond
In June 2013, the Group raised GBP80m from the issue of an unsecured Retail Bond with a 6.00% coupon. This bond is repayable in June 2020.
- Convertible Bond
In June 2014, the Group raised GBP100m from the issue of a listed unsecured Convertible Bond with a 4.0% coupon, repayable in June 2019, or, subject to certain conditions, convertible at the option of the bond holders into ordinary shares, unless a cash settlement option is exercised by the Company. The initial conversion price has been set at GBP4.9694 per share, representing a 35% premium above the price on the day of the issue and a premium of 59% above the Company's EPRA net asset value per share at 31 March 2014. The value of the Bond at 30 September 2016, as determined by the listed market price, was GBP95.1m.
- Short term working capital facilities
These facilities provide access to additional working capital for the Group.
Cash and Cash Flow
At 30 September 2016, the Group had GBP220m of cash and agreed, undrawn, committed bank facilities including its share in joint ventures as well as GBP93m of uncharged property on which it could borrow funds.
Net Borrowings and Gearing
Total gross borrowings of the Group, including in joint ventures, have reduced from GBP777.9m to GBP737.3m during the period to 30 September 2016. After deducting cash balances of GBP64.6m and unamortised refinancing costs of GBP8.4m, net borrowings reduced from GBP681.8m to GBP664.3m. The gearing of the Group, including in joint ventures, reduced from 142% to 131%. Including EPRA adjustments to IFRS shareholder's funds, the see-through net asset value gearing reduced from 126% to 118%. This gearing measure, the ratio of see-through net borrowings to EPRA net asset value, represents a longer term view of gearing than the standard measure.
30 September 31 March
2016 2016
------------------------------------------- ------------ ---------
See-through gross borrowings GBP737.3m GBP777.9m
See-through cash balances GBP64.6m GBP86.8m
Unamortised refinancing costs GBP8.4m GBP9.3m
See-through net borrowings GBP664.3m GBP681.8m
Shareholders' funds GBP508.9m GBP480.7m
EPRA shareholders' funds GBP561.1m GBP540.7m
See-through gearing - IFRS net asset value 131% 142%
See-through gearing - EPRA net asset value 118% 126%
------------------------------------------- ------------ ---------
Hedging
At 30 September 2016, the Group had GBP647.7m (31 March 2016: GBP635.5m) of fixed rate debt with an average effective interest rate of 4.2% (31 March 2016: 4.2%) and GBP46.4m (31 March 2016: GBP107.1m) of floating rate debt with an average effective interest rate of 2.9%. In our joint ventures, the Group had GBP43.2m (31 March 2016: GBP35.3m) of floating rate debt with an effective rate of 3.1% (31 March 2016: 3.4%).
30 September 30 September 31 March 31 March
2016 2016 2016 2016
GBPm % GBPm %
--------------------------------- ------------ ------------ -------- --------
Fixed rate debt
- Secured borrowings 472.6 4.0 452.8 3.9
- Retail Bond 80.0 6.0 80.0 6.0
- Convertible Bond 100.0 4.0 100.0 4.0
- Fair value of Convertible Bond (4.9) - 2.7 -
--------------------------------- ------------ ------------ -------- --------
Total fixed rate debt 647.7 4.2 635.5 4.2
Floating rate debt
- Secured 46.4 2.9 107.1 3.9
--------------------------------- ------------ ------------ -------- --------
Total wholly owned 694.1 4.4 742.6 4.2
In joint ventures
- Fixed rate - - - -
- Floating rate 43.2 3.1 35.3 3.4
--------------------------------- ------------ ------------ -------- --------
Total borrowings 737.3 4.3 777.9 4.2
--------------------------------- ------------ ------------ -------- --------
Interest Cover
In assessing the results of the Group for each financial year Helical considers its interest cover as a measure of its performance and its ability to finance its annual interest payments from its net operating income, before revaluation gains or losses on the investment portfolio and provisions on the trading and development stock. In the half year to 30 September 2016, this interest cover was 2.2 times (2015: 4.1 times).
30 September 30 September 31 March
2016 2015 2016
--------------------------------- ------------- ------------ ---------
See-through net operating income GBP25.8m GBP49.4m GBP121.3m
See-through net financing costs GBP11.7m GBP12.1m GBP22.6m
Interest Cover 2.2x 4.1x 5.4x
--------------------------------- ------------- ------------ ---------
Investment Property Accounting Treatment
International Accounting Standard 40 - Investment Property requires that accrued operating lease income assets should be shown separately and deducted from the fair value of the investment properties in the Statement of Financial Position. This accounting treatment had not been applied at 31 March 2016 but has been adopted for the period ended 30 September 2016. A prior year adjustment has been made to ensure consistency of comparative information, clarity and transparency.
The effect of the adjustment on the relevant financial statement line items for the year ended 31 March 2016 is detailed in note 28.
Tim Murphy
Finance Director
24 November 2016
Helical's Property Portfolio - 30 September 2016
Total Portfolio by Fair Value
Investment Development Total
GBPm % GBPm % GBPm %
--------------------------------------------- ---------- ---- ----------- ---- ------- -----
London Offices
- Completed 466.3 37.3 - - 466.3 37.3
- Being redeveloped/refurbished 142.1 11.4 22.3 1.8 164.4 13.2
- Held for future development/refurbishment 42.6 3.4 - - 42.6 3.4
London Residential - - 67.8 5.4 67.8 5.4
--------------------------------------------- ---------- ---- ----------- ---- ------- -----
Total London 651.0 52.1 90.1 7.2 741.1 59.3
Regional Offices 101.2 8.1 1.0 0.1 102.2 8.2
Regional logistics 205.5 16.5 - - 205.5 16.5
Regional Retail 89.1 7.1 7.8 0.6 96.9 7.7
Retirement Villages 11.9 1.0 85.9 6.8 97.8 7.8
Land 0.1 - 5.9 0.5 6.0 0.5
--------------------------------------------- ---------- ---- ----------- ---- ------- -----
Total Regional 407.8 32.7 100.6 8.0 508.4 40.7
Total 1,058.8 84.8 190.7 15.2 1,249.5 100.0
--------------------------------------------- ---------- ---- ----------- ---- ------- -----
Investment Portfolio by Asset Status
Income
Producing Being redeveloped/refurbished Total
GBPm % GBPm % GBPm %
--------------------------------------------- ---------- ---- ----------------------------- ---- ------- -----
London Offices
- Completed 466.3 44.1 - - 466.3 44.1
- Being redeveloped/refurbished - - 142.1 13.4 142.1 13.4
- Held for future development/refurbishment 42.6 4.0 - - 42.6 4.0
Total London 508.9 48.1 142.1 13.4 651.0 61.5
Regional Offices 93.5 8.8 7.7 0.7 101.2 9.5
Regional logistics 205.5 19.5 - - 205.5 19.5
Regional Retail 89.1 8.4 - - 89.1 8.4
Retirement Villages 11.9 1.1 - - 11.9 1.1
Land - - 0.1 - 0.1 -
--------------------------------------------- ---------- ---- ----------------------------- ---- ------- -----
Total Regional 400.0 37.8 7.8 0.7 407.8 38.5
Total 908.9 85.9 149.9 14.1 1,058.8 100.0
--------------------------------------------- ---------- ---- ----------------------------- ---- ------- -----
Income producing assets are those assets where the majority of the space is let. Major projects are those assets that are being substantially developed or refurbished.
Trading and Development Portfolio
Book Value Fair Value Surplus Fair Value
GBPm GBPm GBPm %
-------------------- ---------- ---------- ------- ----------
London Offices 18.3 22.3 4.0 11.7
London Residential 64.8 67.8 3.0 35.6
-------------------- ---------- ---------- ------- ----------
Total London 83.1 90.1 7.0 47.3
Regional Offices 0.2 1.0 0.8 0.5
Regional Retail 7.8 7.8 - 4.1
Retirement Villages 81.0 85.9 4.9 45.0
Land 5.0 5.9 0.9 3.1
-------------------- ---------- ---------- ------- ----------
Total Regional 94.0 100.6 6.6 52.7
Total 177.1 190.7 13.6 100.0
-------------------- ---------- ---------- ------- ----------
Overview
Helical divides its property activities into two core markets, London and the Regions. The London Portfolio represents 59% of the total property portfolio and drives capital growth, development profits and, increasingly, income. The Regional Portfolio, which accounts for the remaining 41%, predominantly generates rental income.
The London Portfolio
Our strategy is to increase our London holdings, focusing on select areas where we see strong tenant demand and growth potential, such as the "Tech Belt" that runs from King's Cross through Old Street and Shoreditch to Whitechapel and in West London, in particular Hammersmith, Shepherds Bush and Chiswick. Our London portfolio comprises income producing multi-let offices, office refurbishments and developments and residential development schemes.
-- City and Tech Belt
The Bower, Old Street EC1
This 3.12 acre asset was acquired in November 2012 for GBP60.8m in joint venture with Crosstree Real Estate Partners LLP. The site is in the heart of an area which has become a "creative halo", a district of London which is a hub for technology, media and telecommunications companies and which is benefitting from substantial investment in infrastructure. A planning consent has been implemented to increase the floor space on the site by 116,000 sq ft, to refurbish existing areas and significantly upgrade the public realm with the creation of a new pedestrian street.
On 20 January 2016, Helical acquired The Warehouse and The Studio (211 Old Street) and The Tower (207 Old Street) from the joint venture.
- 211 Old Street EC1
The development of phase 1, comprising The Warehouse, 128,262 sq ft, and The Studio, 23,177 sq ft, completed in November 2015.
Phase 1 is fully let to CBS, Farfetch, Pivotal, Allegis and Stripe (The Warehouse) and John Brown Media (The Studio), and all tenants are in occupation. Retail operators Bone Daddies, Draft House, Enoteca da Luca, Honest Burger and Maki are open and trading.
- 207 Old Street EC1
Comprising The Tower, the phase 2 deconstruction works have been concluded and the main contractor has started on site with practical completion scheduled for Q2 2018. Whilst the formal letting campaign for the building is expected to commence closer to completion, we have pre-let 6 floors, comprising 59,000 sq ft, to WeWork, the global provider of flexible collaborative co-working space.
Barts Square EC1
In joint venture with The Baupost Group LLC we own the freehold interest in land and buildings at Bartholomew Close, Little Britain and Montague Street, a 3.2 acre site adjacent to the new Barts Hospital and just south of Smithfield Market and the Farringdon East station on the Elizabeth Line (Crossrail) due to be operational in 2018.
Planning consent has been implemented for a comprehensive redevelopment of 19 buildings to provide a total of 236 residential apartments, three office buildings of 213,000 sq ft, 23,000 sq ft and 10,200 sq ft, 20,600 sq ft of retail/A3 at ground floor as well as major public realm improvements, which will be incorporated into the wider Smithfield Area Strategy being worked up by the City of London.
- Phase 1 - Residential/offices/retail
Phase 1 of the redevelopment of Barts Square comprises 144 residential units, 8,800 sq ft of retail space, 23,000 sq ft of new offices behind retained facades and public realm improvements. Completion of Phase 1 is expected in summer 2017. Contracts have been exchanged for the sale of 108 residential units for a total value of c.GBP138.5m at an average GBP1,580 psf, with a further two units under offer.
- Phase 2 - One Bartholomew Close - Offices
One Bartholomew Close was sold to clients of Ashby Capital LLP ("Ashby") for GBP102.4m in August 2015. The demolition of the existing building and the construction of a new 12 storey office block of 213,000 sq ft, commenced in January 2016. The building is due to be completed in August 2018. Ashby's clients finance the development costs and when the building is completed and successfully let the joint venture will be entitled to receive a profit share payment. Helical is the development manager for delivery of the project.
- Phase 3 - Residential/retail
Phase 3 of the redevelopment of the site, involving the demolition of Queen Elizabeth II Building, 62 Bartholomew Close, 42-44 Little Britain and 45-47 Little Britain, is expected to commence after vacant possession of these buildings is obtained at the end of November 2016. In their place, 92 residential units and 11,800 sq ft of retail space will be constructed, with completion due in early 2019.
One Creechurch Place, City of London EC3
One Creechurch Place, is a landmark City office scheme in the heart of the insurance sector in London. In May 2014, Helical signed a joint venture agreement with HOOPP (Healthcare of Ontario Pension Plan) to redevelop the site. Under the terms of the joint venture, HOOPP and Helical jointly funded the project on a 90:10 split, with Helical acting as development manager for which it will receive a promote payment depending on the successful outcome of the scheme. The new building, comprising 272,555 sq ft NIA of offices and 787 sq ft of retail, achieved practical completion on 7 November 2016 and is currently being marketed for occupation. A number of potential tenants have viewed the building and we are hopeful of being able to announce letting progress before our year end in March 2017.
C-Space, 37-45 City Road EC1
Helical acquired C-Space in June 2013. Planning consent was obtained for a complete refurbishment of the building which increased the previous existing 50,000 sq ft office building to 62,000 sq ft. The works, which were completed in October 2015, involved an additional floor and extensions to the third floor, a landscaped courtyard and entrance "pavilion" to the rear and full height glazing to the raised ground floor. 75% of the space was pre-let to the creative agency MullenLowe in June 2015, with the remaining space let to NeuLion in November 2016.
25 Charterhouse Square, Smithfield EC1
In January 2016, Helical was granted a new 155 year leasehold interest in 25 Charterhouse Square, from the Governors of Sutton's Hospital in Charterhouse for GBP16m. Helical has received planning for and commenced a major refurbishment of the existing building, which will increase the current 34,000 sq ft to 38,500 sq ft of offices, with the addition of a new sixth floor, and add 5,100 sq ft of retail/restaurant. The completed building is expected to be delivered in Q1 2017.
The Loom, Whitechapel E1
This 110,000 sq ft listed former wool warehouse was acquired in 2013. A major repositioning was completed in September 2016 to include a new entrance and reception onto Gowers Walk, showers and a bike store. A rolling refurbishment of the offices is also ongoing with circa 60,000 sq ft completed. The average contracted rent for the building is GBP32 psf. The largest, most prominent unit in the building of 9,000 sq ft was let in July in excess of GBP50 psf. Since then a further 4,750 sq ft has been let at GBP52.50 psf, a 17% premium to March 2016 ERV. 29,000 sq ft is currently available in 10 different sized units with an overall ERV of GBP1.4m.
Chart House, Islington N1
Chart House is a 10,500 sq ft office building in Islington. There is currently planning consent for an additional floor of residential on top of the building. This building is 100% let.
-- The West
Shepherds Building, Shepherds Bush W14
This 151,000 sq ft multi-let office building close to the Westfield London shopping centre maintains an occupancy approaching 100%, as it has for eight consecutive years. A rolling refurbishment of the common parts continues and the average contracted rent for the building is GBP44 psf with a total contracted rent of GBP6.3m and a passing net rent of GBP4.9m. During the period, 10 new lettings, all in excess of GBP50 psf, were completed securing a contracted rent of GBP350,000 and two rent reviews settled with an uplift to contracted rent of GBP225,000.
Power Road Studios, Chiswick W4
The site comprises 62,000 sq ft of offices across five buildings and is multi-let to a wide range of predominantly media tenants. Recent lettings have been concluded at a rent of GBP38 psf compared to an average rental of GBP24 psf at acquisition. Cineworld, who occupy 17,000 sq ft, have surrendered their lease which permits the comprehensive refurbishment of the unit and creation of a new entrance at the front of the building. The works, which are planned to commence in November 2016 and expected to last nine months, should increase the rent for this space from GBP22.00 psf to GBP42.50 psf. A planning application to add a further 45,000 sq ft of office space is expected to be submitted in December 2016.
One King Street, Hammersmith W6
This multi-let 39,000 sq ft building was acquired in 2012, comprising 26,000 sq ft of offices and 13,000 sq ft of ground floor retail. The building is fully let with a contracted rent of GBP1.8m. Following the period end this property has been sold to Orchard Street Investment Management at its March 2016 book value of GBP34.5m reflecting a net initial yield of 4.85%.
King Street, Hammersmith W6
King Street, Hammersmith W6, is a Council led regeneration project which is being carried out in a 50/50 joint venture with Grainger plc. Planning permission for the scheme has been granted for 196 apartments, a three-screen cinema, new retail and restaurant space and replacement offices for the Council. A minor amendment to the existing planning consent has been approved and demolition of the cinema site has commenced.
The Powerhouse, Chiswick W4
Helical acquired this 24,288 sq ft office and recording studios by way of sale and leaseback. The Powerhouse is a listed building on Chiswick High Road and is fully let on a long lease to Metropolis Music Group.
In addition to our holdings in East and West London we have one scheme in Covent Garden WC2.
Drury Lane & Dryden Street, Covent Garden WC2
The existing buildings, which are in office and retail use, sit on an island site of approximately 0.5 acres. Approximately half of the site, adjacent to Dryden Street, sits within the Covent Garden Conservation Area. In July 2015, contracts were exchanged with Diageo Pension Fund (a fund managed by Savills Investment Management) for the conditional acquisition of the Drury Lane site. The contract is conditional on the viability of the scheme and Helical securing planning consent. A planning application for the residential led scheme of 68 apartments was submitted in August 2015 and resolution to grant consent was issued at a planning committee in April 2016. A further planning consent for an alternative office led scheme is expected to be submitted in December 2016.
The Regional Portfolio
Our approach to regional investment is to acquire assets where occupational demand is robust throughout the property cycle and the barriers to new supply are high. Successfully picking the sectors and assets with these attributes will ensure strong cash flows and rental growth. In general, yields for regional assets are higher than those in London and these assets are acquired to provide significant cash flow for the Group. We anticipate that income will become an increasingly important part of total returns as yield compression slows and, as such, we focus our attention on areas where we believe the occupational market remains robust.
Our regional portfolio contributed 72% of our net rental income from tenants in diverse sectors and geographical locations. The GBP508.4m regional portfolio comprises GBP205.5m of logistics (41% of the regional portfolio), GBP102.2m of offices (20%), GBP96.9m of retail comprising GBP31.7m of retail warehousing and GBP65.2m of in-town retail, mainly the Morgan Quarter, Cardiff (in aggregate 19%), GBP97.8m in our retirement village development programme (19%) and GBP6.0m of land (1%).
Distribution Warehouses
Helical had 34 distribution and light logistics units located around major UK transport networks at 30 September 2016, of which ten have subsequently been sold. These units generally have few bespoke features making them straightforward to re-let if vacancies occur with minimal capital expenditure required. The majority of the assets are single let. Significant assets within the portfolio include a 256,000 sq ft distribution warehouse let to Sainsbury's in Yate, Bristol, a 203,000 sq ft facility in Leighton Buzzard, Bedfordshire and a 183,000 sq ft distribution warehouse let to the Royal Mail in Chester.
Regional Offices
Our regional office investment portfolio comprises seven assets valued at GBP101.2m, with c. 70% of value in Manchester. Other assets are located in Crawley, Glasgow, Reading and Cobham. During the half year we sold two assets in Castle Donnington and Cheadle for GBP7.0m, a 3% discount to book value.
We have three offices in Manchester; a city with a diverse, thriving and growing economy which is widely regarded as England's second city and the centre of the "Northern Powerhouse".
Churchgate and Lee House, Manchester
This asset, comprising 248,000 sq ft of multi occupied offices, was purchased in March 2014.
Since then we have refurbished the reception, cafe and just over 73,735 sq ft of the offices and will continue to reposition the asset as floors become vacant.
In the period we have concluded three new lettings on over 23,000 sq ft increasing the contracted rent across the buildings by GBP418,000. At the end of the period the building was 95% let. We have subsequently agreed terms on the 1st Floor of Lee House and with the completion of its lease anticipated before the end of November, we are on course to be 100% let.
Dale House, Manchester
Dale House is a 54,000 sq ft office building situated in the Northern Quarter of Manchester. It is 87% let to a number of tenants with an average rent of GBP12.70 psf and was acquired in March 2015 for GBP7.4m. The property is a long term hold with plans to significantly refurbish the building over time. Strategic lease surrenders across the building have been obtained and a refurbishment of 33,000 sq ft will commence in January 2017, with completion in August 2017.
Fountain Court, 31 Booth Street, Manchester
This vacant office located in the prime city core was acquired in January 2016 for GBP4.7m. Refurbishment of this 25,349 sq ft building is underway and nearing completion. We anticipate that the building will be launched to the market in January 2017.
St Vincent Street, Glasgow
In partnership with local development partner, Dawn Developments Ltd, Helical is the development manager for the new headquarters building for Scottish Power at St Vincent Street, Glasgow. The completed building comprises c. 220,000 sq ft of prime office space in the heart of the City's commercial district. Funded by M&G Investments, all works, including Scottish Power's fit out, are due to be completed in November 2016. As part of the overall deal, Helical took on three existing Scottish Power sites which are surplus to requirements. The site at Cathcart has been sold to Barratt Homes' subject to detailed planning approval being received (outline planning already achieved) and the listed Cathcart House has been sold subject only to vacant possession being granted following the move to the new headquarters by Scottish Power. The site at Yoker was sold to a supermarket operator during the period and the site at Falkirk was sold in the prior year.
Retail
The retail market is undergoing major structural changes with many high profile companies going into administration. There is a continued migration of customers and retailers to prime centres where the leisure offer and quality of the environment are a big driver of footfall.
Our retail assets total GBP97m, 8% of our portfolio (31 March 2016: GBP143m). This part of the portfolio includes a prime retail asset in Cardiff, three retail parks, one retail unit and a number of pre let and/or prefunded retail developments.
During the half year, five retail properties were sold for a total of GBP41m, at c. 6% below book value. At the period end the portfolio consisted of assets in Cardiff, Great Yarmouth, Leicester, Sevenoaks and Southend.
The Morgan Quarter, Cardiff
During the period we have continued our plans to reposition the asset and consolidate rental tone. We have concluded six new retail leases representing over GBP200,000 per annum in rental income. These include two tenants upsizing within the estate and the addition of JoJo Maman Bébé.
Within the Creative Quarter we have completed five new office leases on 1,265 sq ft and one renewal lease. Work is underway on Phase Three of the refurbishment which is due to complete early 2017 providing 5,700 sq ft of new space.
Retail Developments
Parkgate, Shirley, West Midlands
The shopping centre at Parkgate, Shirley, where Helical has a 50% interest, was completed in 2014 and the 80,000 sq ft Asda, which had been pre-sold to the food-store, together with a number of other retailers have all opened successfully for trade. The space beyond the food-store is let to occupiers such as B&M, Peacocks, Poundland, Pizza Express, JD Wetherspoon, Prezzo, Shoe Zone and Shirley Library and in November 2016 was sold to a private purchaser at its 30 September 2016 book value.
A second phase of high density residential is being progressed on a 10 acre site opposite the Parkgate scheme. Terms have been agreed with a care home provider, a residential developer and a supermarket operator for a petrol filling station. Planning consent has been achieved subject to a s.106 Agreement.
Truro
Helical has entered into a Conditional Purchase Agreement on the six acre Truro City Football Club site which has planning consent, subject to a s.106 Agreement, for a 78,000 sq ft non-food retail park. The scheme proposals provide for the relocation of the football club and we anticipate starting on site in late 2017.
Cortonwood
This 79,750 sq ft retail park has been 95% pre-let to tenants including Outfit, H&M, New Look, River Island and Marks and Spencer. The scheme has been forward funded with clients of Aberdeen Asset Management and construction on site has started with completion due in June 2017. The remaining space is currently under offer.
Retirement Villages
Our retirement village portfolio consists of four villages. We design each of the villages with an active, independent retirement in mind and the communities that we create are the ideal place to live a social and varied lifestyle. Each private, age-exclusive retirement community is centred around a residents' clubhouse, and features many amenities including an indoor pool and gym, landscaped gardens, bar, restaurant and library. With an increasing UK population over 65 years old, and a severe under supply in retirement housing, this sector creates significant opportunities for investors and developers.
Bramshott Place, Liphook, Hampshire
This village is situated amongst natural parkland near the village of Liphook on the border of Hampshire, West Sussex and Surrey. The village features a selection of two and three bedroom cottages and one, two and three bedroom apartments arranged around a residents' clubhouse. All construction works to Phases 1-3 are completed. 151 units in total have been built and sold. Phase 4 commenced in August 2016 with the construction of 40 additional cottages, due for completion in January 2018. Sales on the site will be formally launched in July 2017, with seven of the 40 new cottages already having been reserved. The residents' clubhouse is currently being extended and refurbished with completion of this project due in January 2017.
Durrants Village, Faygate, West Sussex
Durrants Village is set within 30 acres of private parkland in the hamlet of Faygate, near Horsham in West Sussex. The village features a selection of cottages and apartments. Phases 1 and 2 of the construction completed in January 2016 with 105 units located around the residents' clubhouse. Phase 3A has commenced and consists of an additional 20 units and is due to complete in July 2017. Sales have progressed well with 82 units sold, 4 exchanged and an additional 13 units reserved.
Millbrook Village, Exeter, Devon
Millbrook Village is nestled close to the River Exe in the heart of the historic cathedral city of Exeter. The village features a selection of two and three bedroom cottages and one, two and three bedroom apartments. The site will comprise 164 units once completed. The clubhouse will include a restaurant and bar, games room, gym, cinema and a swimming pool. The build programme is well advanced with 81 units currently completed with more stock now coming online at regular three month intervals. We anticipate that the village will be fully constructed by early 2018 with the clubhouse handed over in March 2017. 37 units have been sold, 7 exchanged with an additional 18 reserved.
Maudslay Park, Great Alne, Warwickshire
Maudslay Park is set in 90-acres of parkland in the Warwickshire village of Great Alne, near Stratford-upon-Avon. The village will comprise 164 units with a mixture of cottages and apartments built around the central clubhouse facility. The clubhouse will include a restaurant and bar, games room, gym, cinema and a swimming pool. Phase 1 of the development is currently under construction which consists of 14 cottages, 35 apartments and the central clubhouse facility. We have recently launched the sales office on site and have achieved six reservations on cottages. We anticipate the first cottages being completed in February 2017 with the central clubhouse facility being completed in March 2018.
Capital Expenditure
We have a planned development and refurbishment programme to drive the rental value and secure the future of our assets.
Current
Capex Budget Remaining spend Total Refurbished
(Helical Share) (Helical share) Space Space New Space Completion
Property GBPm GBPm Sq ft Sq ft Sq ft date
----------------------------------- ---------------- ---------------- ------- ----------- --------- ----------
Under Development
London Offices
207 Old Street, London EC1 93.5 72.6 114,000 114,000 65,000 Jun 2018
One Creechurch Place, London EC1 9.7 0.2 - - 273,000 Nov 2016
25 Charterhouse Square, London EC1 15.5 8.7 34,000 34,000 9,600 Mar 2017
The Loom, London E1 10.0 0.9 112,000 37,500 - Jan 2017
----------------------------------- ---------------- ---------------- ------- ----------- --------- ----------
London Residential
Barts Square, London EC1 85.2 63.7 n/a n/a n/a Mar 2019
----------------------------------- ---------------- ------- ----------- --------- ----------
Regional Offices
Booth St, Manchester 2.3 1.0 25,500 25,000 - Dec 2016
----------------------------------- ---------------- ---------------- ------- ----------- --------- ----------
Future Development
London Residential
Drury Lane, London WC2 75.0 73.2 - - 80,000 Jun 2019
King Street, London W6 55.0 55.0 - - 300,000 Dec 2021
----------------------------------- ---------------- ---------------- ------- ----------- --------- ----------
Retirement Villages
Remaining spend
Capex Budget GBPm Total number of Units under Completion
Property GBPm units Completed units construction date
------------------- ------------ --------------- ------------------ --------------- ----------------- ----------
Millbrook Village,
Exeter 40.1 12.8 164 81 83 Mar 2018
Durrants Village,
Faygate 46.5 17.9 173 105 20 Feb 2019
Maudslay Park,
Great Alne 58.4 46.6 164 5 45 Dec 2020
Bramshott Place,
Liphook 16.6 14.6 40 - 40 Jun 2018
------------------- ------------ --------------- ------------------ --------------- ----------------- ----------
161.6 91.9 541 191 188
------------------- ------------ --------------- ------------------ --------------- ----------------- ----------
Asset Management
Asset management is a critical component in driving Helical's performance. Through having intelligent business plans and by maximising the combined skills of our management team, we are able to create value in our assets without relying on market movements.
Fair Passing ERV Change Since
Investment portfolio Value Weighting Rent Contracted Rent ERV March 2016
% GBPm % GBPm % GBPm % %
-------------------------- ---------------- ------- ----- --------------- ----- ----- ----- ----------------
London Offices
- Completed 44.1 10.6 27.2 21.5 41.4 28.3 36.4 3.0
- Being
redeveloped/refurbished 13.4 - - - - 16.1 20.7 -
- Held for future
development
/refurbishment 4.0 1.8 4.6 1.9 3.7 2.5 3.2 (0.8)
Total London 61.5 12.4 31.8 23.4 45.1 46.9 60.3 1.7
Regional Offices 9.5 5.9 15.3 6.8 13.1 8.3 10.6 1.0
Regional Logistics 19.5 14.8 38.1 15.8 30.4 16.1 20.8 0.2
Regional Retail 8.4 5.8 14.8 5.9 11.4 6.4 8.3 0.1
Retirement Villages 1.1 - - - - - - -
Total Regional 38.5 26.5 68.2 28.5 54.9 30.8 39.7 0.4
Total 100.0 38.9 100.0 51.9 100.0 77.7 100.0 1.2
-------------------------- ---------------- ------- ----- --------------- ----- ----- ----- ----------------
During the half year contracted income increased by GBP1.1m as a result of new lettings and rent reviews, net of any losses from breaks and lease expiries (2015: GBP1.5m). The significant contributors to the new lettings were: The Loom, London E1 (GBP0.3m), Shepherds Building, London W14 (GBP0.4m) and our logistics unit in Burton-on-Trent (GBP0.5m).
There was significant activity within the investment portfolio with 165 lease events.
Contacted Rent
GBPm
-------------------------------- --------------
Rent lost at break/expiry (1.0)
Rent reviews 0.4
Uplift at Lease renewals 0.3
New Lettings 1.4
-------------------------------- --------------
Total increase in the half year 1.1
-------------------------------- --------------
Portfolio yields
EPRA Topped Up NIY Reversionary
% %
-------------------------------------------- ------------------ ------------
London Offices
- Completed 4.3 5.6
- Being redeveloped/refurbished - 5.8
- Held for future development/refurbishment 4.3 5.4
-------------------------------------------- ------------------ ------------
Total London 3.3 5.7
Regional Offices 6.3 7.5
Regional Logistics 7.1 7.1
Regional Retail 6.2 6.7
Total 4.6 6.2
-------------------------------------------- ------------------ ------------
Capital values, vacancy rates and unexpired lease terms
Capital value psf Vacancy rate* WAULT
GBP % Years
-------------------------------------------- ----------------- ------------- ------
London Offices
- Completed 868 9.5 6.7
- Being redeveloped/refurbished 575 n/a -
- Held for future development/refurbishment 621 7.4 0.1
Total London 763 9.3 6.8
Regional Offices 204 10.9 5.5
Regional Logistics 57 3.5 4.7
Regional Retail 239 - 4.9
Total Regional 91 4.0 5.0
Total 197 4.6 5.8
-------------------------------------------- ----------------- ------------- ------
*The vacancy rates exclude assets in the course of redevelopment/refurbishment.
Valuation movements
Val Change inc Capex, Val Change inc Capex, e
Sales & Purchases xcl Sales & Purchases Investment Portfolio Weighting September 2016 Investment Portfolio Weighting March 2016
% % % %
-------------------------- --------------------- ----------------------- --------------------------------------------- -----------------------------------------
London Offices
- Completed 5.5 5.5 44.0 29.0
- Being
redeveloped/refurbished 6.7 6.7 13.5 23.4
- Held for future
development/refurbishment (0.1) (0.1) 4.0 4.0
-------------------------- --------------------- ----------------------- --------------------------------------------- -----------------------------------------
Total London 5.3 5.3 61.5 56.4
Regional Offices 2.7 4.0 9.6 9.7
Regional Logistics 0.9 1.4 19.4 20.0
Regional Retail (3.7) (2.5) 8.4 12.8
Retirement Villages - - 1.1 1.1
Total Regional (0.1) 1.0 38.5 43.6
Total 3.0 4.0 100.0 100.0
-------------------------- --------------------- ----------------------- --------------------------------------------- -----------------------------------------
Lease expiries or tenant break options
Year to Year to Year to Year to Year to
2017 2018 2019 2020 2021
----------------------------- ------- ------- ------- ------- -------
% of rent roll 8.5 11.8 14.4 8.7 6.9
Number of leases 72 109 73 41 21
Average rent per lease (GBP) 61,685 56,488 102,826 110,316 171,088
----------------------------- ------- ------- ------- ------- -------
We have a strong rental income stream and a diverse tenant base, with the largest tenant in the portfolio accounting for only 7.5% of the rent roll. The top 10 tenants account for 31.3% of the total rent roll and the tenants come from a variety of industries.
Rent Rent Roll
Rank Tenant Tenant Industry GBPm %
------ -------------------------------- ------------------------------ --------------- ---------
1 Endemol UK Limited Media 4.0 7.5
2 MullenLowe Limited Marketing Communications 2.6 4.9
3 Gopivotal (UK) Limited Technology 2.0 3.8
4 Farfetch UK Limited Online Retail 1.9 3.5
5 Sainsbury's Supermarkets Limited Food Retail 1.2 2.3
6 CBS Interactive Limited Media 1.0 2.0
7 DSG Retail Limited Retail 1.0 2.0
8 Allegis Group Limited Recruitment 1.0 1.9
9 Economic Solutions Limited Employment and Skills Training 1.0 1.8
10 Stripe Payments UK Limited Technology 0.8 1.6
------ -------------------------------- ------------------------------ --------------- ---------
Total 16.5 31.3
---------------------------------------- ------------------------------ --------------- ---------
Independent review report to the members of Helical plc
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the Half Year Results report of Helical plc for the six months ended 30 September 2016 which comprises the Unaudited Consolidated Income Statement, the Unaudited Consolidated Statement of Comprehensive Income, the Unaudited Consolidated Balance Sheet, the Unaudited Consolidated Cash Flow Statement, the Unaudited Consolidated Statement of Changes in Equity and the related unaudited notes. We have read the other information contained in the report: Financial Highlights, Chief Executive's Statement, Financial Review and Helical's Property Portfolio and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company, in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. Our review work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusion we have formed.
Directors' responsibilities
The report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.
Our responsibility
Our responsibility is to express a conclusion on the condensed set of financial statements in the report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the report for the six months ended 30 September 2016 is not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
24 November 2016
Unaudited consolidated income statement
For the Half Year to 30 September 2016
Year to
Half Year to Half Year to 31 March 2016
30 September 2016 30 September 2015 Restated
Notes GBP000 GBP000 GBP000
------------------------------------------------------- ----- ------------------ ------------------ --------------
Revenue 3 52,367 58,280 116,500
------------------------------------------------------- ----- ------------------ ------------------ --------------
Net rental income 4 23,911 19,999 42,164
Development property (loss)/profit 5 (83) 16,165 24,252
Share of results of joint ventures 13 (1,044) 31,795 50,469
Other operating (expense)/income (1) 87 20
------------------------------------------------------- ----- ------------------ ------------------ --------------
Gross profit before net gain on sale and revaluation of
investment properties 22,783 68,046 116,905
Net gain on sale and revaluation of investment
properties 6 26,353 42,253 49,826
Impairment of available-for-sale investments 15 (1,179) (350) (1,370)
------------------------------------------------------- ----- ------------------ ------------------ --------------
Gross profit 47,957 109,949 165,361
Administrative expenses 7 (5,871) (14,079) (26,103)
------------------------------------------------------- ----- ------------------ ------------------ --------------
Operating profit 42,086 95,870 139,258
Finance costs 8 (13,949) (11,281) (24,113)
Finance income 1,199 1,248 5,128
Change in fair value of derivative financial
instruments (5,949) (9) (6,860)
Change in fair value of Convertible Bond 7,663 48 516
Foreign exchange gain 2 27 100
------------------------------------------------------- ----- ------------------ ------------------ --------------
Profit before tax 31,052 85,903 114,029
Tax on profit on ordinary activities 9 672 (10,196) (9,146)
------------------------------------------------------- ----- ------------------ ------------------ --------------
Profit after tax 31,724 75,707 104,883
------------------------------------------------------- ----- ------------------ ------------------ --------------
- attributable to equity shareholders 31,724 75,767 104,943
- attributable to non-controlling interests - (60) (60)
------------------------------------------------------- ----- ------------------ ------------------ --------------
Profit for the period 31,724 75,707 104,883
------------------------------------------------------- ----- ------------------ ------------------ --------------
Earnings per share 11
Basic 27.8p 66.1p 91.3p
Diluted 26.6p 63.7p 88.0p
------------------------------------------------------- ----- ------------------ ------------------ --------------
Unaudited consolidated statement of comprehensive income
For the Half Year to 30 September 2016
Year to
Half Year to Half Year to 31 March 2016
30 September 2016 30 September 2015 Restated
GBP000 GBP000 GBP000
-------------------------------------------------------------- ------------------ ------------------ --------------
Profit for the period 31,724 75,707 104,883
Exchange difference on retranslation of net investments in
foreign operations 21 5 (16)
-------------------------------------------------------------- ------------------ ------------------ --------------
Total comprehensive income for the period 31,745 75,712 104,867
-------------------------------------------------------------- ------------------ ------------------ --------------
- attributable to equity shareholders 31,745 75,772 104,927
- attributable to non-controlling interests - (60) (60)
-------------------------------------------------------------- ------------------ ------------------ --------------
Total comprehensive income for the period 31,745 75,712 104,867
-------------------------------------------------------------- ------------------ ------------------ --------------
The exchange differences on retranslation of net investments in foreign operations will be reclassified to the Income Statement on disposal.
Unaudited consolidated balance sheet
At 30 September 2016
At
At At 31 March 2016
30 September 2016 30 September 2015 Restated
Notes GBP000 GBP000 GBP000
---------------------------------------------------- ----- ------------------ ------------------ --------------
Non-current assets
Investment properties 12 1,034,687 800,600 1,035,033
Owner occupied property, plant and equipment 2,147 2,328 2,200
Investment in joint ventures 13 26,259 68,174 27,990
---------------------------------------------------- ----- ------------------ ------------------ --------------
1,063,093 871,102 1,065,223
---------------------------------------------------- ----- ------------------ ------------------ --------------
Current assets
Land, developments and trading properties 14 88,294 91,589 92,035
Available-for-sale investments 15 1,991 4,064 3,114
Corporate tax receivable 1,335 - -
Trade and other receivables 16 77,485 72,104 73,057
Cash and cash equivalents 17 52,945 136,998 74,670
---------------------------------------------------- ----- ------------------ ------------------ --------------
222,050 304,755 242,876
---------------------------------------------------- ----- ------------------ ------------------ --------------
Total assets 1,285,143 1,175,857 1,308,099
---------------------------------------------------- ----- ------------------ ------------------ --------------
Current liabilities
Trade and other payables 18 (62,408) (82,085) (71,000)
Corporation tax payable - (2,226) (1,592)
Borrowings 19 (901) (36,272) (885)
---------------------------------------------------- ----- ------------------ ------------------ --------------
(63,309) (120,583) (73,477)
---------------------------------------------------- ----- ------------------ ------------------ --------------
Non-current liabilities
Borrowings 19 (685,404) (577,695) (733,178)
Derivative financial instruments 20 (20,721) (8,104) (14,955)
Deferred tax liability 9 (6,800) (8,258) (5,768)
---------------------------------------------------- ----- ------------------ ------------------ --------------
(712,925) (594,057) (753,901)
---------------------------------------------------- ----- ------------------ ------------------ --------------
Total liabilities (776,234) (714,640) (827,378)
---------------------------------------------------- ----- ------------------ ------------------ --------------
Net assets 508,909 461,217 480,721
---------------------------------------------------- ----- ------------------ ------------------ --------------
Equity
Called-up share capital 21 1,447 1,447 1,447
Share premium account 98,798 98,798 98,798
Revaluation reserve 171,600 147,596 143,699
Capital redemption reserve 7,478 7,478 7,478
Other reserves 291 291 291
Retained earnings 229,295 205,607 229,008
---------------------------------------------------- ----- ------------------ ------------------ --------------
Equity attributable to equity holders of the parent 508,909 461,217 480,721
Non-controlling interests - - -
---------------------------------------------------- ----- ------------------ ------------------ --------------
Total equity 508,909 461,217 480,721
---------------------------------------------------- ----- ------------------ ------------------ --------------
Unaudited consolidated cash flow statement
For the Half Year to 30 September 2016
Year to
Half Year to Half Year to 31 March 2016
30 September 2016 30 September 2015 Restated
GBP000 GBP000 GBP000
-------------------------------------------------------------- ------------------ ------------------ --------------
Cash flows from operating activities
Profit before tax 31,052 85,903 114,029
Depreciation 204 186 338
Net revaluation gain on investment properties (29,141) (41,249) (47,441)
Loss/(gain) on sales of investment properties 2,788 (1,004) (2,385)
Profit on sale of plant and equipment (13) - -
Net financing costs 12,750 10,033 18,985
Change in value of derivative financial instruments 5,949 9 6,860
Change in fair value of Convertible Bond (7,663) (48) (516)
Share based payment charge 283 2,841 6,666
Share of results of joint ventures 1,044 (31,795) (50,469)
Impairment of available-for-sale investment 1,179 350 1,370
Foreign exchange movement 32 248 250
Other non-cash items - 3 -
-------------------------------------------------------------- ------------------ ------------------ --------------
Cash inflows from operations before changes in working capital 18,464 25,477 47,687
-------------------------------------------------------------- ------------------ ------------------ --------------
Change in trade and other receivables (4,319) (5,333) (5,074)
Movement in property derivative financial asset - 16,388 16,388
Change in land, developments and trading properties 5,451 752 306
Change in trade and other payables (7,625) 16,579 5,314
-------------------------------------------------------------- ------------------ ------------------ --------------
Cash inflows generated from operations 11,971 53,863 64,621
-------------------------------------------------------------- ------------------ ------------------ --------------
Finance costs (17,028) (11,923) (25,312)
Finance income 627 1,248 3,915
Tax paid (2,928) (1,276) (4,712)
-------------------------------------------------------------- ------------------ ------------------ --------------
(19,329) (11,951) (26,109)
-------------------------------------------------------------- ------------------ ------------------ --------------
Cash flows from operating activities (7,358) 41,912 38,512
-------------------------------------------------------------- ------------------ ------------------ --------------
Cash flows from investing activities
Additions to investment property (26,022) (87,693) (405,133)
Sale of investment property 54,919 31,101 121,770
Return of investment in joint ventures - - 11,495
Dividends from joint ventures 687 35,206 82,569
Available for sale asset additions (56) (72) (142)
Sale of plant and equipment 49 48 70
Purchase of leasehold improvements, plant and equipment (193) (205) (263)
-------------------------------------------------------------- ------------------ ------------------ --------------
Net cash generated from/(used by) investing activities 29,384 (21,615) (189,634)
-------------------------------------------------------------- ------------------ ------------------ --------------
Cash flows from financing activities
Borrowings drawn down 15,725 128,005 299,754
Borrowings repaid (57,709) (111,641) (161,648) Shares issued - - - Purchase of own shares (944) (14,752) (18,857) Equity dividends paid (823) (5,899) (14,437) -------------------------------------------------------------- ------------------ ------------------ -------------- Net cash (used by)/generated from financing activities (43,751) (4,287) 104,812 -------------------------------------------------------------- ------------------ ------------------ -------------- Net (decrease)/increase in cash and cash equivalents (21,725) 16,010 (46,310) Exchange losses on cash and cash equivalents - (5) (13) Cash and cash equivalents at start of period 74,670 120,993 120,993 -------------------------------------------------------------- ------------------ ------------------ -------------- Cash and cash equivalents at end of period 52,945 136,998 74,670 -------------------------------------------------------------- ------------------ ------------------ --------------
Unaudited consolidated statement of changes in equity
At 30 September 2016
Capital Non-
Share Share Revaluation redemption Other Retained Own shares controlling
capital premium reserve reserve reserves earnings held interests Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------- -------- -------- ----------- ---------- --------- --------- ---------- ----------- --------
At 31 March
2015 1,447 98,798 108,060 7,478 291 188,229 - 60 404,363
Total
comprehensive
income - - - - - 104,927 - (60) 104,867
Revaluation
surplus - - 47,441 - - (47,441) - - -
Realised on
disposals - - (11,802) - - 11,802 - - -
Performance
share plan - - - - - 6,666 - - 6,666
Performance
share plan -
deferred tax - - - - - (3,002) - - (3,002)
Share settled
bonus - - - - - 1,121 - - 1,121
Dividends paid - - - - - (14,437) - - (14,437)
Purchase of
own shares - - - - - - (18,857) - (18,857)
Own shares
held reserve
transfer - - - - - (18,857) 18,857 - -
-------------- -------- -------- ----------- ---------- --------- --------- ---------- ----------- --------
At 31 March
2016 restated 1,447 98,798 143,699 7,478 291 229,008 - - 480,721
Total
comprehensive
income - - - - - 31,745 - - 31,745
Revaluation
surplus - - 29,141 - - (29,141) - - -
Realised on
disposals - - (1,240) - - 1,240 - - -
Performance
share plan - - - - - 283 - - 283
Performance
share plan -
deferred tax - - - - - (1,748) - - (1,748)
Share settled
bonus - - - - - (325) - - (325)
Dividends paid - - - - - (823) - - (823)
Purchase of
own shares - - - - - - (944) - (944)
Own shares
held reserve
transfer - - - - - (944) 944 - -
-------------- -------- -------- ----------- ---------- --------- --------- ---------- ----------- --------
At 30
September
2016 1,447 98,798 171,600 7,478 291 229,295 - - 508,909
-------------- -------- -------- ----------- ---------- --------- --------- ---------- ----------- --------
For a breakdown of total comprehensive income see the Unaudited Consolidated Statement of Comprehensive Income.
The adjustment against retained earnings of GBP283,000 (31 March 2016: GBP6,666,000) adds back the share based payments charge in accordance with IFRS 2 Share Based Payments.
There were net transactions with owners of GBP3,557,000 (31 March 2016: GBP28,509,000) made up of the performance share plan charge of GBP283,000 (31 March 2016: GBP6,666,000) and related deferred tax debit of GBP1,748,000 (31 March 2016: GBP3,002,000), dividends paid of GBP823,000 (31 March 2016: GBP14,437,000), the purchase of own shares of GBP944,000 (31 March 2016: GBP18,857,000) and the share settled bonus of GBP325,000 (31 March 2016: credit of GBP1,121,000).
Capital Own Non-
Share Share Revaluation redemption Other Retained shares controlling
capital premium reserve reserve reserves earnings held interests Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------- -------- -------- ----------- ----------- --------- --------- -------- ------------ --------
At 31 March
2015 1,447 98,798 108,060 7,478 291 188,229 - 60 404,363
Total
comprehensive
income - - - - - 75,772 - (60) 75,712
Revaluation
surplus - - 41,249 - - (41,249) - - -
Realised on
disposals - - (1,713) - - 1,713 - - -
Performance
share
plan - - - - - 2,840 - - 2,840
Performance
share
plan -
deferred tax - - - - - (1,714) - - (1,714)
Share settled
bonus - - - - - 667 - - 667
Dividends paid - - - - - (5,899) - - (5,899)
Purchase of
own
shares - - - - - - (14,752) - (14,752)
Own shares
held
reserve
transfer - - - - - (14,752) 14,752 - -
-------------- -------- -------- ----------- ----------- --------- --------- -------- ------------ --------
At 30
September
2015 1,447 98,798 147,596 7,478 291 205,607 - - 461,217
-------------- -------- -------- ----------- ----------- --------- --------- -------- ------------ --------
The adjustment against retained earnings of GBP2,840,000 adds back the share based payments charge in accordance with IFRS 2 Share Based Payments.
There were net transactions with shareholders of GBP18,858,000 made up of the performance share plan charge of GBP2,840,000 and related deferred tax debit of GBP1,714,000, dividends paid of GBP5,899,000, the purchase of own shares of GBP14,752,000 and the share settled bonus of GBP667,000.
Unaudited notes to the half year results
1. Financial Information
The financial information contained in this statement does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The full accounts for the year ended 31 March 2016, which were prepared under International Financial Reporting Standards as adopted by the European Union and which received an unqualified report from the Auditors, and did not contain a statement under Section 498 of the Companies Act 2006, have been filed with the Registrar of Companies.
These interim condensed unaudited consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union. The principal accounting policies have remained unchanged from the prior financial period to 31 March 2016.
These interim condensed unaudited consolidated financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2016.
The Directors have a reasonable expectation that the Group will continue in operational existence for the foreseeable future and have, therefore, used the going concern basis in preparing the financial statements.
Principal risks and uncertainties
The responsibility for the governance of the Group's risk profile lies with the Board of Directors of Helical. The Board is responsible for setting the Group's risk strategy by assessing risks, determining its willingness to accept those risks and ensuring that the risks are monitored and that the Group is aware of and, if appropriate, reacts to changes in those risks. The Board is also responsible for allocating responsibility for risk within the Group's management structure.
The Group considers its principal risks to be:
-- strategic risk; -- financial risk; -- operational risk; and -- reputational risk.
There have been no significant changes to these risk areas in the period nor are there expected to be for the half year to 31 March 2017. A further analysis of these risks is included within the consolidated financial statements of the Group for the year ended 31 March 2016.
Use of estimates and judgements
The estimates and judgements have remained unchanged from the prior financial year to 31 March 2016.
2. Statement of Directors' Responsibilities
Each of the Directors confirms that, to the best of his knowledge, the condensed set of unaudited financial statements, which has been prepared in accordance with IAS 34 as adopted by the European Union, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer, or the undertakings included in the consolidation as a whole and that the interim management report herein includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R.
Balances with related parties at 30 September 2016, 30 September 2015 and 31 March 2016 are disclosed in note 24.
A list of current Directors is maintained at 5 Hanover Square, London W1S 1HQ and at www.helical.co.uk.
The half year statement was approved by the Board on 24 November 2016 and is available from the Company's registered office at 5 Hanover Square, London W1S 1HQ and on the Company's website at www.helical.co.uk.
On behalf of the Board
Tim Murphy
Finance Director
24 November 2016
3. Segmental Information
The Group identifies two discrete operating segments whose results are regularly reviewed by the Chief Operating Decision Maker (the Chief Executive) to allocate resources to these segments and to assess their performance. The segments are:
-- investment properties, which are owned or leased by the Group for long-term income and for capital appreciation, and trading properties, which are owned or leased with the intention to sell; and,
-- development properties, which include sites, developments in the course of construction, completed developments available for sale, and pre-sold developments.
Investment Investment
and Trading Developments Total and Trading Developments Total
Half Year to Half Year to Half Year to Half Year to Half Year to Half Year to
30.09.16 30.09.16 30.09.16 30.09.15 30.09.15 30.09.15
Revenue GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------ ------------------ ------------- ------------- ------------------ ------------- -------------
Rental income 25,531 - 25,531 20,891 325 21,216
Development
property income - 26,836 26,836 - 36,948 36,948
Other revenue - - - 116 - 116
------------------ ------------------ ------------- ------------- ------------------ ------------- -------------
Revenue 25,531 26,836 52,367 21,007 37,273 58,280
------------------ ------------------ ------------- ------------- ------------------ ------------- -------------
Investment and Trading Developments Total
Year to Year to Year to
31.03.16 31.03.16 31.03.16
Revenue GBP000 GBP000 GBP000
---------------------------- ------------------------ ------------ ---------
Rental income 45,158 347 45,505
Development property income - 70,876 70,876
Other revenue 119 - 119
---------------------------- ------------------------ ------------ ---------
Revenue 45,277 71,223 116,500
---------------------------- ------------------------ ------------ ---------
Investment and Investment and
Trading Developments Total Trading Developments Total
Half Year to Half Year to Half Year to Half Year to Half Year to Half Year to
30.09.16 30.09.16 30.09.16 30.09.15 30.09.15 30.09.15
Profit before tax GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------ ------------------ ------------- ------------- ------------------ ------------- -------------
Net rental income 23,935 (24) 23,911 19,803 196 19,999
Development
property (loss)/
profit - (83) (83) - 16,165 16,165
Share of results
of joint ventures (704) (340) (1,044) 30,712 1,083 31,795
Gain on sale and
revaluation of
investment
properties 26,353 - 26,353 42,253 - 42,253
------------------ ------------------ ------------- ------------- ------------------ ------------- -------------
49,584 (447) 49,137 92,768 17,444 110,212
Impairment of
available for
sale assets (1,179) (350)
Other operating
(expense)/income (1) 87
------------------ ------------------ ------------- ------------- ------------------ ------------- -------------
Gross profit 47,957 109,949
Administrative
expenses (5,871) (14,079)
Net finance costs (11,036) (9,994)
Foreign exchange
gain 2 27
------------------ ------------------ ------------- ------------- ------------------ ------------- -------------
Profit before tax 31,052 85,903
------------------ ------------------ ------------- ------------- ------------------ ------------- -------------
Investment
and Trading Developments Total
Year to Year to Year to
31.03.16 31.03.16 31.03.16
Profit before tax GBP000 GBP000 GBP000
------------------------------------------------------ ------------ -------------- ----------
Net rental income 42,010 154 42,164
Development property profit - 24,252 24,252
Share of results of joint ventures 47,592 2,877 50,469
Gain on sale and revaluation of investment properties 49,826 - 49,826
------------------------------------------------------ ------------ -------------- ----------
139,428 27,283 166,711
Impairment of available for sale assets (1,370)
Other operating income 20
------------------------------------------------------ ------------ -------------- ----------
Gross profit 165,361
Administrative expenses (26,103)
Net Finance costs (25,329)
Foreign exchange gain 100
------------------------------------------------------ ------------ -------------- ----------
Profit before tax 114,029
------------------------------------------------------ ------------ -------------- ----------
Investment and Investment
Trading Developments Total and Trading Developments Total
At 30.09.16 At 30.09.16 At 30.09.16 At 30.09.15 At 30.09.15 At 30.09.15
Balance sheet GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------- -------------------- -------------- ------------- ------------ -------------- -------------
Investment
properties 1,034,687 - 1,034,687 800,600 - 800,600
Land, development
and trading
properties 28 88,266 88,294 28 91,561 91,589
Investment in joint
ventures 3,192 23,067 26,259 57,825 10,349 68,174
-------------------- -------------------- -------------- ------------- ------------ -------------- -------------
1,037,907 111,333 1,149,240 858,453 101,910 960,363
Other assets 135,903 215,494
-------------------- -------------------- -------------- ------------- ------------ -------------- -------------
Total assets 1,285,143 1,175,857
Liabilities (776,234) (714,640)
-------------------- -------------------- -------------- ------------- ------------ -------------- -------------
Net assets 508,909 461,217
-------------------- -------------------- -------------- ------------- ------------ -------------- -------------
Investment
and Trading Developments Total
At 31.03.16 At 31.03.16 At 31.03.16
Balance sheet GBP000 GBP000 GBP000
----------------------------------------- ------------- ------------ ------------
Investment properties 1,035,033 - 1,035,033
Land, development and trading properties 28 92,007 92,035
Investment in joint ventures 14,162 13,828 27,990
----------------------------------------- ------------- ------------ ------------
1,049,223 105,835 1,155,058
Other assets 153,041
----------------------------------------- ------------- ------------ ------------
Total assets 1,308,099
Liabilities (827,378)
----------------------------------------- ------------- ------------ ------------
Net assets 480,721
----------------------------------------- ------------- ------------ ------------
4. Net Rental Income
Year to
Half Year to Half Year to 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
------------------------------------------------------- ------------------ ------------------ ---------
Gross rental income 25,531 21,216 45,505
Rents payable (17) (24) (80)
Property overheads (1,378) (964) (2,728)
------------------------------------------------------- ------------------ ------------------ ---------
Net rental income 24,136 20,228 42,697
Net rental income attributable to profit share partner (225) (229) (533)
------------------------------------------------------- ------------------ ------------------ ---------
Group share of net rental income 23,911 19,999 42,164
------------------------------------------------------- ------------------ ------------------ ---------
5. Development property (loss)/profit
Year to
Half Year to Half Year to 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
------------------------------------ ------------------ ------------------ ---------
Development property income 26,836 36,948 70,876
Profit on forward property contract - 1,008 14
Cost of sales (18,938) (18,204) (29,519)
Sales expenses (4,012) (2,056) (10,671)
Provision against book values (3,969) (1,531) (6,448)
------------------------------------ ------------------ ------------------ ---------
Development property (loss)/profit (83) 16,165 24,252
------------------------------------ ------------------ ------------------ ---------
6. Net Gain on Sale and Revaluation of Investment Properties
Year to
Half Year to Half Year to 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
---------------------------------------------------------- ------------------ ------------------ ---------
Net proceeds from the sale of investment properties 54,919 31,101 122,201
Book value (note 12) (57,243) (30,097) (119,385)
Tenants incentives on sold investment properties (464) - (431)
---------------------------------------------------------- ------------------ ------------------ ---------
(Loss)/gain on sale of investment properties (2,788) 1,004 2,385
Revaluation surplus on investment properties 29,141 41,249 47,441
---------------------------------------------------------- ------------------ ------------------ ---------
Net gain on sale and revaluation of investment properties 26,353 42,253 49,826
---------------------------------------------------------- ------------------ ------------------ ---------
7. Administrative Expenses
Year to
Half Year to Half Year to 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
------------------------------------------------- ------------------ ------------------ ---------
Administration costs (5,801) (5,356) (10,717)
Performance related awards (285) (7,302) (13,299)
National Insurance on performance related awards 215 (1,421) (2,087)
------------------------------------------------- ------------------ ------------------ ---------
Administrative expenses (5,871) (14,079) (26,103)
------------------------------------------------- ------------------ ------------------ ---------
8. Finance Costs
Year to
Half Year to Half Year to 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
----------------------------------------------------- ------------------ ------------------ ---------
Interest payable on bank loans, bonds and overdrafts (14,923) (12,178) (25,353)
Other interest payable and similar charges (2,520) (1,468) (3,700)
Interest capitalised 3,494 2,365 4,940
----------------------------------------------------- ------------------ ------------------ ---------
Finance costs (13,949) (11,281) (24,113) ----------------------------------------------------- ------------------ ------------------ ---------
9. Tax on Profit on Ordinary Activities
Year to
Half Year to Half Year to 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
----------------------------------------- ------------------ ------------------ ---------
The tax credit/(charge) is based on the profit for the period and represents:
United Kingdom corporation tax at 20%
- Group corporation tax - (4,990) (7,010)
- Adjustment in respect of prior periods - (98) (115)
- Overseas tax 2 (19) (712)
----------------------------------------- ------------------ ------------------ ---------
Current tax credit/(charge) 2 (5,107) (7,837)
Deferred tax
- Capital allowances (847) (115) (385)
- Tax losses 674 (1,379) 500
- Unrealised chargeable gains (164) (6,906) (7,447)
- Other temporary differences 1,007 3,311 6,023
----------------------------------------- ------------------ ------------------ ---------
Deferred tax credit/(charge) 670 (5,089) (1,309)
----------------------------------------- ------------------ ------------------ ---------
Total tax credit/(charge) for period 672 (10,196) (9,146)
----------------------------------------- ------------------ ------------------ ---------
At
At At 31 March
30 September 2016 30 September 2015 2016
Deferred tax GBP000 GBP000 GBP000
---------------------------- ------------------- ------------------ ---------
Capital allowances (2,793) (1,676) (1,946)
Tax losses 13,195 10,642 12,521
Unrealised chargeable gains (24,298) (23,593) (24,134)
Other temporary differences 7,096 6,369 7,791
---------------------------- ------------------- ------------------ ---------
Deferred tax liability (6,800) (8,258) (5,768)
---------------------------- ------------------- ------------------ ---------
Under IAS 12, deferred tax provisions are made for the tax that would potentially be payable on the realisation of investment properties and other assets at book value.
If upon sale of the investment properties the group retained all the capital allowances, the deferred tax provision in respect of capital allowances of GBP2,793,000 would be released and further capital allowances of GBP27,551,000 would be available to reduce future tax liabilities.
The net deferred tax asset in respect of other temporary differences arises from tax relief available to the Group on the mark to market valuation of financial instruments, the future vesting of share awards and other timing differences.
10. Dividends
Year to
Half Year to Half Year to 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
-------------------------------------------------------- ------------------ ------------------ ---------
Attributable to equity share capital
Ordinary
- Interim paid 2.30p per share - - 2,652
- Second interim paid of 5.15p per share - - 5,886
- Prior period final paid 0.72p per share (2015: 5.15p) 823 5,899 5,899
-------------------------------------------------------- ------------------ ------------------ ---------
823 5,899 14,437
-------------------------------------------------------- ------------------ ------------------ ---------
The interim dividend of 2.40p (30 September 2015: 2.30p per share) was approved by the Board on 22 November 2016 and will be paid on 30 December 2016 to Shareholders on the register on 2 December 2016. This interim dividend, amounting to GBP2,743,000 has not been included as a liability as at 30 September 2016.
11. Earnings Per Share
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. This is a different basis to the net asset per share calculations which are based on the number of shares at the year end. Shares held by the Helical Employees' Share Ownership Plan Trust (the "ESOP"), which has waived its entitlement to receive dividends, are treated as cancelled for the purpose of this calculation.
The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares and the post tax effect of dividends on the assumed exercise of all dilutive options.
The earnings per share is calculated in accordance with IAS 33 and the best practice recommendations of the European Public Real Estate Association ("EPRA").
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:
Year to
Half Year to Half Year to 31 March
30 September 2016 30 September 2015 2016
000's 000's 000's
----------------------------------------------------------------- ------------------- ------------------- ---------
Ordinary shares in issue 118,184 118,184 118,184
Weighting adjustment (3,901) (3,547) (3,296)
----------------------------------------------------------------- ------------------- ------------------- ---------
Weighted average ordinary shares in issue for calculation of
basic and EPRA earnings per share 114,283 114,637 114,888
Weighted average ordinary shares issued on share settled bonuses 1,197 1,053 1,197
Weighted average ordinary shares to be issued under performance
share plan 3,700 3,271 3,212
----------------------------------------------------------------- ------------------- ------------------- ---------
Weighted average ordinary shares in issue for calculation of
diluted earnings per share 119,180 118,961 119,297
----------------------------------------------------------------- ------------------- ------------------- ---------
GBP000 GBP000 GBP000
---------------------------------------------------------------------- -------- ------- -------
Earnings used for calculation of basic and diluted earnings per share 31,724 75,767 104,943
---------------------------------------------------------------------- -------- ------- -------
Basic earnings per share 27.8p 66.1p 91.3p
Diluted earnings per share 26.6p 63.7p 88.0p
---------------------------------------------------------------------- -------- ------- -------
GBP000 GBP000 GBP000
------------------------------------------------------------------------- -------- -------- --------
Earnings used for calculation of basic and diluted earnings per share 31,724 75,767 104,943
Net gain on sale and revaluation of investment properties - subsidiaries (26,353) (42,253) (49,826)
- joint ventures 518 (25,887) (50,210)
Tax on (loss)/profit on disposal of investment properties (308) - 998
Fair value movement on derivative financial instruments - subsidiaries 5,949 9 6,860
- joint ventures - (82) (211)
Fair value movement on Convertible Bond (7,663) (48) (516)
Impairment of available-for-sale investment 1,179 350 1,370
Deferred tax on adjusting items (66) 7,021 6,212 ------------------------------------------------------------------------- -------- -------- -------- Earnings used for calculations of EPRA earnings per share 4,980 14,877 19,620 ------------------------------------------------------------------------- -------- -------- -------- EPRA earnings per share 4.4p 13.0p 17.1p ------------------------------------------------------------------------- -------- -------- --------
The earnings used for the calculation of EPRA earnings per share includes net rental income and development property profits but excludes trading property gains.
12. Investment Properties
Year to
Half Year to Half Year to 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
---------------------------------------------------------- ------------------ ------------------ ---------
Book value at 1 April 1,035,033 701,521 701,521
Additions at cost 27,806 87,693 405,133
Disposals (57,243) (30,097) (119,385)
Revaluation surplus 34,397 41,249 53,508
Increase in lease incentive asset (5,256) - (6,067)
Revaluation surplus attributable to profit share partners (50) 234 323
---------------------------------------------------------- ------------------ ------------------ ---------
As at period end 1,034,687 800,600 1,035,033
---------------------------------------------------------- ------------------ ------------------ ---------
All properties are stated at market value as at 30 September 2016, and are valued by professionally qualified external valuers (Cushman & Wakefield LLP) in accordance with the Valuation-Professional Standards published by the Royal Institution of Chartered Surveyors. The fair value of the investment properties at 30 September 2016 is as follows:
Half Year to Year to
30 September Half Year to 31 March
2016 30 September 2015 2016
GBP000 GBP000 GBP000
------------------------------------------------------------------- ------------- ------------------ ---------
Book value 1,034,687 800,600 1,035,033
Lease incentives and costs included in trade and other receivables 11,323 - 6,067
------------------------------------------------------------------- ------------- ------------------ ---------
Fair value 1,046,010 800,600 1,041,100
------------------------------------------------------------------- ------------- ------------------ ---------
Interest capitalised in respect of the refurbishment of investment properties at 30 September 2016 amounted to GBP8,355,000 (30 September 2015: GBP5,959,000; 31 March 2016: GBP6,571,000).
The historical cost of investment property is GBP861,338,000 (30 September 2015: GBP650,303,000; 31 March 2016: GBP889,493,000).
13. Joint Ventures
Year to
Half Year to Half Year to 31 March
30 September 2016 30 September 2015 2016
Share of results of joint ventures GBP000 GBP000 GBP000
--------------------------------------------------------- ------------------ ------------------ ---------
Gross rental income 794 953 1,828
Property overheads (90) (130) (558)
--------------------------------------------------------- ------------------ ------------------ ---------
Net rental income 704 823 1,270
Net (loss)/gain on revaluation of investment properties (510) 18,521 2,316
(Loss)/profit on sale of investment properties (8) 7,366 41,553
Development profit 116 2,528 3,223
Provision against book values (2,668) - -
Other operating income - 263 218
Administrative expenses (175) (404) (1,140)
Finance costs (105) (2,118) (3,673)
Finance income 1,141 3 21
Change in fair value of derivative financial instruments - 82 211
--------------------------------------------------------- ------------------ ------------------ ---------
(Loss)/profit before tax (1,505) 27,064 43,999
Tax 461 (196) 129
--------------------------------------------------------- ------------------ ------------------ ---------
(Loss)/profit after tax (1,044) 26,868 44,128
Economic interest adjustment* - 4,927 6,341
--------------------------------------------------------- ------------------ ------------------ ---------
Share of results of joint ventures (1,044) 31,795 50,469
--------------------------------------------------------- ------------------ ------------------ ---------
*Under the Barts Square joint venture agreement the Group is entitled to varying returns dependent upon the performance of the development. Whilst the Group holds a 33.35% equity share in the Barts Square group, it has accounted for its share at 43.8% to reflect its expected economic interest in the joint venture. The assessment of the Group's economic interest has not changed since 31 March 2016.
At
At At 31 March
30 September 2016 30 September 2015 2016
Investment in joint ventures GBP000 GBP000 GBP000
--------------------------------------------- ------------------ ------------------ ---------
Summarised balance sheets
Non-current assets
Investment properties 12,833 88,545 11,552
Owner occupied property, plant and equipment 88 43 96
Deferred Tax 907 633 412
--------------------------------------------- ------------------ ------------------ ---------
13,828 89,221 12,060
--------------------------------------------- ------------------ ------------------ ---------
Current assets
Land, development and trading properties 88,831 60,402 75,904
Trade and other receivables 2,918 3,133 3,497
Cash and cash equivalents 11,690 12,845 12,177
--------------------------------------------- ------------------ ------------------ ---------
103,439 76,380 91,578
--------------------------------------------- ------------------ ------------------ ---------
Current liabilities
Trade and other payables (17,184) (13,366) (14,436)
--------------------------------------------- ------------------ ------------------ ---------
(17,184) (13,366) (14,436)
--------------------------------------------- ------------------ ------------------ ---------
Non-current liabilities
Trade and other payables (31,211) (29,787) (26,586)
Borrowings (42,613) (53,884) (34,626)
Derivative financial instruments - (390) -
--------------------------------------------- ------------------ ------------------ ---------
(73,824) (84,061) (61,212)
--------------------------------------------- ------------------ ------------------ ---------
Net assets 26,259 68,174 27,990
--------------------------------------------- ------------------ ------------------ ---------
The Directors' valuation of trading and development stock shows a surplus of GBP7,000,000 (30 September 2015: GBP7,238,000; 31 March 2016: GBP7,000,000) above book value.
14. Land, Developments and Trading Properties
At
At At 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
--------------------------------- ------------------ ------------------ ---------
Development properties 88,266 91,561 92,007
Properties held as trading stock 28 28 28
--------------------------------- ------------------ ------------------ ---------
88,294 91,589 92,035
--------------------------------- ------------------ ------------------ ---------
The Directors' valuation of trading and development stock shows a surplus of GBP6,573,000 (30 September 2015: GBP17,906,000; 31 March 2016: GBP12,412,000) above book value.
Total interest to date in respect of the development of sites is included in stock to the extent of GBP11,441,000 (30 September 2015: GBP10,482,000; 31 March 2016: GBP11,626,000). Interest capitalised during the period in respect of development sites amounted to GBP1,710,000.
15. Available-For-Sale Investments
Year to
Half Year to Half Year to 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
------------------------- ------------------ ------------------ ---------
Fair value at 1 April 3,114 4,342 4,342
Fair value additions 56 72 142
Fair value impairment (1,179) (350) (1,370)
------------------------- ------------------ ------------------ ---------
Fair value at period end 1,991 4,064 3,114
------------------------- ------------------ ------------------ ---------
The fair values of the Group's available-for-sale investments have been determined by assessing the expected future consideration receivable from these investments, representing Level 3 fair value measurements as defined by IFRS 13 Fair Value Measurement as the value cannot be derived from observable market data. The fair value of the asset is sensitive only to potential sales proceeds.
16. Trade and Other Receivables
At
At At 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
------------------------------- ------------------ ------------------ ---------
Trade receivables 13,974 5,432 20,869
Other receivables 36,022 52,027 32,382
Prepayments and accrued income 27,489 14,645 19,806
------------------------------- ------------------ ------------------ ---------
77,485 72,104 73,057
------------------------------- ------------------ ------------------ ---------
17. Cash and Cash Equivalents
At
At At 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
----------------------------------------------- ------------------ ------------------ ---------
Rent deposits and cash held at managing agents 7,513 4,196 4,906
Restricted cash 9,176 7,411 17,063
Cash deposits 36,256 125,391 52,701
----------------------------------------------- ------------------ ------------------ ---------
52,945 136,998 74,670
----------------------------------------------- ------------------ ------------------ ---------
Restricted cash is made up of cash held by solicitors and cash in blocked accounts.
18. Trade and Other Payables
At
At At 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
----------------------------- ------------------ ------------------ ---------
Trade payables 17,256 14,375 14,463
Other payables 3,494 18,236 8,218
Accruals and deferred income 41,658 49,474 48,319
----------------------------- ------------------ ------------------ ---------
62,408 82,085 71,000
----------------------------- ------------------ ------------------ ---------
19. Borrowings
At
At At 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
----------------------------- ------------------ ------------------ ---------
Current borrowings 901 36,272 885
----------------------------- ------------------ ------------------ ---------
Borrowings repayable within:
- one to two years 4,133 2,224 3,617
- two to three years 99,250 3,633 3,650
- three to four years 424,077 106,881 337,098
- four to five years 84,053 390,132 219,523
- five to six years 1,072 1,036 95,981
- six to ten years 72,819 73,789 73,309
----------------------------- ------------------ ------------------ ---------
Non-current borrowings 685,404 577,695 733,178
----------------------------- ------------------ ------------------ ---------
Total borrowings 686,305 613,967 734,063
----------------------------- ------------------ ------------------ ---------
Included within borrowings repayable within three to four years is the convertible bond at its fair value of GBP95,084,000. It is a financial instrument classified as Level 1 under the IFRS 13 fair value hierarchy.
At
At At 31 March
30 September 2016 30 September 2015 2016
Net Gearing GBP000 GBP000 GBP000
----------------- ------------------ ------------------ ---------
Total borrowings 686,305 613,967 734,063
Cash (52,945) (136,998) (74,670)
----------------- ------------------ ------------------ ---------
Net borrowings 633,360 476,969 659,393
----------------- ------------------ ------------------ ---------
Net borrowings excludes the Group's share of borrowings in joint ventures of GBP42,613,000 (30 September 2015: GBP53,884,000; 31 March 2016: GBP34,626,000) and cash of GBP11,690,000 (30 September 2015: GBP12,845,000; 31 March 2016: GBP12,177,000). All borrowings in joint ventures are secured.
At
At At 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
----------- ------------------ ------------------ ---------
Net assets 508,909 461,217 480,721
----------- ------------------ ------------------ ---------
Gearing 124% 103% 137%
----------- ------------------ ------------------ ---------
20. Derivative Financial Instruments
At
At At 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
------------------------------------------- ------------------ ------------------ ---------
Derivative financial instruments asset - - -
------------------------------------------- ------------------ ------------------ ---------
Derivative financial instruments liability (20,721) (8,104) (14,955)
------------------------------------------- ------------------ ------------------ ---------
The fair values of the Group's outstanding interest rate swaps have been estimated by calculating the present values of future cash flows, using appropriate market discount rates, representing Level 2 fair value measurements as defined in IFRS 13 Fair Value Measurement.
21. Share Capital
At
At At 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
----------- ------------------ ------------------ ---------
Authorised 39,577 39,577 39,577
----------- ------------------ ------------------ ---------
The authorised share capital of the Company is GBP39,576,626.60 divided into ordinary shares of 1p each and deferred shares of 1/8p each.
Allotted, called up and fully paid:
- 118,183,806 ordinary shares of 1p each 1,182 1,182 1,182
- 212,145,300 deferred shares of 1/8p each 265 265 265
------------------------------------------- ----- ----- -----
1,447 1,447 1,447
------------------------------------------- ----- ----- -----
22. Own Shares Held
Following approval at the 1997 Annual General Meeting the Company established the Helical Employees' Share Ownership Plan Trust (the "ESOP") to be used as part of the remuneration arrangements for employees. The purpose of the ESOP is to facilitate and encourage the ownership of shares by or for the benefit of employees by the acquisition and distribution of shares in the Company.
The ESOP purchases shares in the Company to satisfy the Company's obligations under its Share Option Scheme and Performance Share Plan.
At 30 September 2016 the ESOP held 3,901,000 ordinary shares in Helical plc (30 September 2015: 2,901,000; 31 March 2016: 3,901,000).
At 30 September 2016 options over nil (30 September 2015 and 31 March 2016: nil) ordinary shares in Helical plc had been granted through the ESOP. At 30 September 2016 awards over 7,524,000 (30 September 2015 and 31 March 2016: 6,558,000) ordinary shares in Helical plc, made under the terms of the Performance Share Plan, were outstanding.
23. Net Assets per Share
Number
At of At
30 September 2016 Shares 30 September 2016
GBP000 000's Pence Per Share
-------------------------------------------------------- ------------------ ------- ------------------
Net asset value 508,909 118,184
Less: - own shares held by ESOP (3,901)
- deferred shares (265)
-------------------------------------------------------- ------------------ ------- ------------------
Basic net asset value 508,644 114,283 445
Add: share settled bonus 1,197
Add: dilutive effect of the Performance Share Plan 3,562
-------------------------------------------------------- ------------------ ------- ------------------
Diluted net asset value 508,644 119,042 427
Adjustment for:
- fair value of financial instruments 20,721
- fair value movement on Convertible Bond (4,916)
- deferred tax 23,094
-------------------------------------------------------- ------------------ ------- ------------------
Adjusted diluted net asset value 547,543 119,042 460
Adjustment for:
- fair value of trading and development properties 13,573
-------------------------------------------------------- ------------------ ------- ------------------
EPRA net asset value 561,116 119,042 471
Adjustment for:
- fair value of financial instruments (20,721)
- deferred tax (23,094)
-------------------------------------------------------- ------------------ ------- ------------------
EPRA triple net asset value 517,301 119,042 435
-------------------------------------------------------- ------------------ ------- ------------------
The adjustment for the fair value of trading and development properties represents the surplus as at 30 September 2016.
At Number At
31 March of 31 March
2016 Shares 2016
GBP000 000's Pence Per Share
------------------------------------------------------------------ --------- ------- ----------------
Net asset value 480,721 118,184
Less: - own shares held by ESOP (3,901)
- deferred shares (265)
------------------------------------------------------------------ --------- ------- ----------------
Basic net asset value 480,456 114,283 420
Add: share settled bonus 1,197
Add: dilutive effect of the Performance Share Plan 3,177
------------------------------------------------------------------ --------- ------- ----------------
Diluted net asset value 480,456 118,657 405
Adjustment for:
- fair value of financial instruments 14,955
- fair value movement on Convertible Bond 2,747
- deferred tax 23,161
------------------------------------------------------------------ --------- ------- ----------------
Adjusted diluted net asset value 521,319 118,657 439
Adjustment for:
- fair value of trading and development properties 19,412
------------------------------------------------------------------ --------- ------- ----------------
EPRA net asset value 540,731 118,657 456
Adjustment for:
- fair value of financial instruments (14,955)
- deferred tax (23,161)
------------------------------------------------------------------ --------- ------- ----------------
EPRA triple net asset value 502,615 118,657 424
------------------------------------------------------------------ --------- ------- ----------------
The net asset values per share have been calculated in accordance with guidance issued by the European Public Real Estate Association ("EPRA").
The adjustments to the net asset value comprise the amounts relating to the Group and its share of Joint Ventures.
24. Related Party Transactions
At 30 September 2016, 30 September 2015 and 31 March 2016 the following amounts were due from the Group's joint ventures.
At
At At 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
------------------------------------------- ------------------ ------------------ ---------
King Street Developments (Hammersmith) Ltd 6,818 5,880 6,231
Shirley Advance LLP 11,688 10,372 11,347
Barts Square companies - 36 77
Helical Sosnica Sp. zoo 1,112 1,090 1,099
207 Old Street Unit Trust - 2,625 -
211 Old Street Unit Trust - 2,401 -
Old Street Retail Unit Trust - 725 - City Road (Jersey) Ltd - 737 - Old Street Holdings LP 169 14,872 - Creechurch Place Ltd 14,267 12,721 13,345 ------------------------------------------- ------------------ ------------------ ---------
25. See-Through Analysis
Helical holds a significant proportion of its property assets in joint ventures with partners that provide the majority of the equity required to purchase the assets, whilst relying on the Group to provide asset management or development expertise. Accounting convention requires Helical to account under IFRS for our share of the net results and net assets of joint ventures in limited detail in the income statement and balance sheet. Net asset value per share, a key performance measure used in the real estate industry, as reported in the financial statements under IFRS, does not provide shareholders with the most relevant information on the fair value of assets and liabilities within an ongoing real estate company with a long term investment strategy.
In this statement we have incorporated the separate components into a more detailed "see-through" analysis of our property portfolio and debt profile and the associated income streams and financing costs to assist in providing a more comprehensive overview of the Group's activities.
This analysis incorporates the separate components of the results of the consolidated subsidiaries and Helical's share of its joint ventures' results into a 'see-through' analysis of our property portfolio, debt profile and the associated income streams and financing costs, to assist in providing a comprehensive overview of the Group's activities.
See-through net rental income
Helical's share of the gross rental income, head rents payable and property overheads from property assets held in subsidiaries and in joint ventures are shown in the table below.
Half Year to Half Year to Year to
30 September 2016 30 September 2015 31 March 2016
GBP000 GBP000 GBP000
---------------------------------------- ------------------ ------------------ ------------------ --------------
Gross rental income - subsidiaries 25,531 21,216 45,505
- joint ventures 794 953 1,828
------------------ ------------------ ------------------ --------------
Total gross rental income 26,325 22,169 47,333
Rents payable - subsidiaries (17) (24) (80)
Property overheads - subsidiaries (1,378) (964) (2,728)
- joint ventures (90) (130) (558)
Net rental income attributable to profit
share partner (225) (229) (533)
----------------------------------------- ----------------- ------------------ ------------------ --------------
See-through net rental income 24,615 20,822 43,434
------------------------------------------------------------ ------------------ ------------------ --------------
See-through net development (losses)/profits
Helical's share of development (losses)/profits from property assets held in subsidiaries and in joint ventures are shown in the table below.
Half Year to Half Year to Year to
30 September 2016 30 September 2015 31 March 2016
GBP000 GBP000 GBP000
----------------------------------------- ------------------ ------------------ --------------
In parent and subsidiaries 3,886 17,694 30,700
In joint ventures 116 2,528 3,223
----------------------------------------- ------------------ ------------------ --------------
Total gross development profit 4,002 20,222 33,923
Provision against stock (6,637) (1,529) (6,448)
----------------------------------------- ------------------ ------------------ --------------
See-through development (losses)/profits (2,635) 18,693 27,475
----------------------------------------- ------------------ ------------------ --------------
See-through net gain on sale and revaluation of investment properties
Half Year to Half Year to Year to
30 September 2016 30 September 2015 31 March 2016
GBP000 GBP000 GBP000
---------------------------------------- ------------------ ------------------ ------------------ --------------
Revaluation surplus on investment
properties - subsidiaries 29,141 41,249 47,441
- joint ventures (510) 18,521 2,316
----------------------------------------------------------- ------------------ ------------------ --------------
Total revaluation surplus 28,631 59,770 49,757
Net (loss)/gain on sale of investment
properties - subsidiaries (2,788) 1,004 2,385
- joint ventures (8) 7,366 41,553
----------------------------------------------------------- ------------------ ------------------ --------------
Total net (loss)/gain on sale of investment properties (2,796) 8,370 43,938
------------------------------------------------------------ ------------------ ------------------ --------------
See-through net gain on sale and revaluation of investment
properties 25,835 68,140 93,695
------------------------------------------------------------ ------------------ ------------------ --------------
See-through net finance costs
Helical's share of the interest payable, finance charges, capitalised interest and interest receivable on bank borrowings and cash deposits in subsidiaries and in joint ventures are shown in the table below.
Half Year to Half Year to Year to
30 September 2016 30 September 2015 31 March 2016
GBP000 GBP000 GBP000
------------------------------------------- ----------------- ------------------ ------------------ --------------
Interest payable on bank loans and
overdrafts - subsidiaries 14,923 12,178 25,353
- joint ventures 105 2,118 3,673
------------------------------------------------------------- ------------------ ------------------ --------------
Total interest payable on bank loans and overdrafts 15,028 14,296 29,026
Other interest payable and similar charges - subsidiaries 2,520 1,468 3,700
Interest capitalised - subsidiaries (3,494) (2,365) (4,940)
------------------------------------------- ----------------- ------------------ ------------------ --------------
Total finance costs 14,054 13,399 27,786
Interest receivable and similar income - subsidiaries (1,199) (1,248) (5,128)
- joint ventures (1,141) (3) (21)
------------------------------------------------------------- ------------------ ------------------ --------------
See-through net finance costs 11,714 12,148 22,637
-------------------------------------------------------------- ------------------ ------------------ --------------
See-through property portfolio
Helical's share of the investment, trading and development property portfolio in subsidiaries and joint ventures are shown in the table below.
At
At At 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
------------------------------------------------ ----------------- ------------------ ------------------ ---------
Investment property fair value - subsidiaries 1,046,010 800,600 1,041,100
- joint ventures 12,833 88,545 11,552
------------------------------------------------------------------ ------------------ ------------------ ---------
Total investment property fair value 1,058,843 889,145 1,052,652
Trading and development stock - subsidiaries 88,294 91,589 92,035
- joint ventures 88,831 60,402 75,904
------------------------------------------------------------------ ------------------ ------------------ ---------
Total trading and development stock 177,125 151,991 167,939
Trading and development stock surplus - subsidiaries 6,573 17,906 12,412
- joint ventures 7,000 7,238 7,000
------------------------------------------------------------------ ------------------ ------------------ ---------
Total trading and development stock surpluses 13,573 25,144 19,412
------------------------------------------------------------------- ------------------ ------------------ ---------
Total trading and development stock at fair value 190,698 177,135 187,351
------------------------------------------------------------------- ------------------ ------------------ ---------
See-through property portfolio 1,249,541 1,066,280 1,240,003
------------------------------------------------------------------- ------------------ ------------------ ---------
See-through net borrowings
Helical's share of borrowings and cash deposits in parent and subsidiaries and joint ventures are shown in the table below.
At At
30 September At 31 March
2016 30 September 2015 2016
GBP000 GBP000 GBP000
------------------------------------------------------------------- ------------- ------------------ ---------
In parent and subsidiaries - gross borrowings less than one year 901 36,272 885
- gross borrowings more than one year 685,404 577,695 733,178
------------------------------------------------------------------ ------------- ------------------ ---------
Total 686,305 613,967 734,063
------------------------------------------------------------------ ------------- ------------------ ---------
In joint ventures - gross borrowings less than one year - - -
- gross borrowings more than one year 42,613 53,884 34,626
------------------------------------------------------------------ ------------- ------------------ ---------
Total 42,613 53,884 34,626
------------------------------------------------------------------ ------------- ------------------ ---------
In parent and subsidiaries Cash and cash equivalents (52,945) (136,998) (74,670)
In joint ventures Cash and cash equivalents (11,690) (12,845) (12,177)
--------------------------- -------------------------------------- ------------- ------------------ ---------
See-through net borrowings 664,283 518,008 681,842
------------------------------------------------------------------- ------------- ------------------ ---------
See-through net operating income
Year to
Half year to Half year to 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
--------------------------------------------- ------------------ ------------------ ---------
Net rental income 24,615 20,822 43,434
Development profits (before provisions) 4,002 20,222 33,923
(Loss)/gain on sale of investment properties (2,796) 8,370 43,938
--------------------------------------------- ------------------ ------------------ ---------
Net operating income 25,821 49,414 121,295
--------------------------------------------- ------------------ ------------------ ---------
26. See-Through Interest Cover, Gearing and Loan to Value
At
At At 31 March
30 September 2016 30 September 2015 2016
GBP000 GBP000 GBP000
-------------------------------------- ------------------ ------------------ ---------
Interest cover 2.2x 4.1x 5.4x
Gearing 131% 112% 142%
Gearing based on EPRA net asset value 118% 99% 126%
Loan to value 53% 49% 55%
-------------------------------------- ------------------ ------------------ ---------
27. Capital Commitments
The Group has a commitment of GBP131,085,000 (30 September 2015: GBP34,299,000, 31 March 2016: GBP34,054,000) in relation to construction contracts, which are due to be completed in the period to March 2019. Of the total, GBP86,155,000 relates to the Group's investment property portfolio and GBP44,930,000 are in relation to the Group's retirement village programme.
28. Investment property accounting restatement
International Accounting Standard 40 - Investment Property requires that accrued operating lease income assets should be shown separately and deducted from the fair value of the investment properties in the Consolidated Balance Sheet. This accounting treatment had not been applied at 31 March 2016 but has been adopted for the period ended 30 September 2016. A prior year adjustment has been made to ensure consistency of comparative information, clarity and transparency.
The effect of the adjustment on the relevant financial statement line items for the year ended 31 March 2016 is as follows:
Original Adjustment Restated
At 31 March At 31 March At 31 March
2016 2016 2016
Impact on equity - increase/(decrease) in equity GBP000 GBP000 GBP000
------------------------------------------------- ------------ ------------ ------------
Investment properties 1,041,100 (6,067) 1,035,033
Deferred tax liability (6,367) 599 (5,768)
------------------------------------------------- ------------ ------------ ------------
Equity 486,189 (5,468) 480,721
------------------------------------------------- ------------ ------------ ------------
Original Adjustment Restated
At 31 March At 31 March At 31 March
Impact on the consolidated income statement - increase/(decrease) in profit 2016 2016 2016
for the year GBP000 GBP000 GBP000
---------------------------------------------------------------------------- ------------ ------------ ------------
Net gain on sale and revaluation of investment properties 55,893 (6,067) 49,826
Profit before tax 120,096 (6,067) 114,029
---------------------------------------------------------------------------- ------------ ------------ ------------
Tax on profit on ordinary activities (9,745) 599 (9,146)
---------------------------------------------------------------------------- ------------ ------------ ------------
Profit for the year 110,351 (5,468) 104,883
---------------------------------------------------------------------------- ------------ ------------ ------------
Impact on basic and diluted earnings per share and EPRA Net Asset Value - Original Adjustment Restated
increase/(decrease) At 31 March At 31 March At 31 March
2016 2016 2016
GBP000 GBP000 GBP000
---------------------------------------------------------------------------- ------------ ------------ ------------
Basic earnings per share 96.1 (4.8) 91.3
Diluted earnings per share 92.6 (4.6) 88.0
EPRA net asset value per share 461 (5) 456
---------------------------------------------------------------------------- ------------ ------------ ------------
The adjustment did not have an impact on the Group's EPRA earnings per share.
29. Post Balance Sheet Events
Since the period end, the Group has sold ten logistics units, one retail asset and one London office for GBP91,500,000, an aggregate of GBP1,450,000 above 30 September 2016 fair values.
HELICAL PLC
Registered in England and Wales No.156663
Registered Office:
5 Hanover Square
London
W1S 1HQ
T: 020 7629 0113
F: 020 7408 1666
E: info@helical.co.uk
www.helical.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KMMZMGDLGVZG
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November 24, 2016 02:01 ET (07:01 GMT)
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