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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Kcr Residential Reit Plc | LSE:KCR | London | Ordinary Share | GB00BYWK1Q82 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 9.00 | 8.00 | 10.00 | 9.50 | 9.00 | 9.50 | 0.00 | 08:00:05 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Real Estate Investment Trust | 1.58M | -166k | -0.0040 | -22.50 | 3.75M |
From Apr 2019 to Apr 2024
TIDMKCR
RNS Number : 7550T
K&C REIT PLC
17 October 2017
17 October 2017
K&C REIT plc
("K&C" or the "Company")
Annual Results for year ended 30 June 2017
K&C REIT plc (AIM: KCR), the residential real estate investment trust group, is pleased to announce its annual results for year ended 30 June 2017. A copy of the annual report and accounts will be posted to shareholders shortly. A copy will also be available from the Company's website, www.kandc-reit.co.uk.
Highlights:
-- Revenue up 240% to GBP514,746 (2016: GBP151,417) -- Gross profit up 343% to GBP404,202 (2016: GBP91,177) -- NAV per share of 8.57p at 30 June 2017 (2016: 9.42p) -- Year-end portfolio valuation of GBP7.24 million (2016: GBP7.13 million)
-- Company issued GBP599,000 of new equity and GBP350,000 of restricted preference shares in the year
-- GBP1.35 million 6% loan note 2020 issued after the year-end, partly to finance acquisition of three residential units at Company's freehold Heathside property for GBP935,000.
Commenting on the results, Michael Davies, Chairman of K&C, said:
"K&C continued to make progress during the period despite the wider residential property market having to contend with a number of political and economic events. The Company successfully raised capital and made further investment in the portfolio to improve performance. As such, revenue has grown through ground rents, sales commissions and lease extensions and occupancy levels remain close to 100 per cent. Post year-end, the Company completed the acquisition of three residential units at its freehold Heathside property in Hampstead for GBP935,000, with refurbishing and improvements underway.
"The Board continues to find and be shown interesting acquisition opportunities and looks forward to updating the market in due course on further progress and asset developments."
Hot Features
Premium
K&C REIT plc info@kandc-reit.co.uk
Dominic White, Chief executive +44 20 3793
5236
Arden Partners plc (nominated
adviser and broker)
William Vandyk +44 20 7614
Steve Douglas 5917
Yellow Jersey PR
Charles Goodwin +44 7747 788
Abena Affum 221
Notes to Editors:
K&C's objective is to build a substantial residential property portfolio that generates secure income flow for shareholders through the acquisition of SPVs (Special Purpose Vehicles) with inherent historical capital gains. The Directors intend that the group will acquire, develop and manage residential property assets in Central London and other key residential areas in the UK.
CHAIRMAN'S STATEMENT
This is K&C REIT plc's third Annual Report since its admission to AIM.
Market and strategy
The Group operates in the UK residential private rented sector (PRS). It seeks to acquire:
-- under-managed rented property assets and portfolios
The team's considerable PRS expertise enables them to improve portfolios and, importantly, tenant experience at under-managed properties, through asset and property management activity. This has resulted in higher rental and property values.
-- in lower price segments
The focus on lower price segments ensures that the portfolio is directed towards the highest area of tenant and buyer demand. This is defensive in a downturn and shows strong growth in an upturn.
-- held within UK-incorporated companies
The REIT structure itself provides K&C with the opportunity to capitalise on the advantages afforded to REITs to provide an efficient exit route for vendors of SPVs, in particular, managing deferred capital gains tax liabilities.
The residential sales market has slowed over the last year, particularly in higher price-band properties in Central London. The impact of the Brexit vote, a more difficult economy, an inconclusive general election result and significant tax changes, particularly for 'buy-to-let' landlords, all taking place within a relatively short period of time, have been difficult for the market to digest.
It is important to note that, across the UK as a whole, prices and rental values continue to rise, albeit at slower rates. Indeed, the Group's assets, which, on a unit basis, are all in the lower price bands (studio, one and two beds), have performed well.
The positive overall economic fundamentals in the residential sector - strong demand and shortage of supply - will, in our view, deliver attractive rental and capital value performance across the UK over the medium term
Investment and operations
Osprey has exceeded expectations, having significantly increased revenue from ground rents, sales commissions, lease extensions and other management income. We have invested in the operations of the business and believe that Osprey is well positioned to continue its strong performance in the future.
The Coleherne Road apartments have continued to perform well. The small size of the units (studio, one- and two-bed flats) is exactly what the market is looking for. This has meant that occupancy has been maintained at close to 100 per cent and rents have increased by eight per cent since acquisition in July 2015.
The Group considered a number of UK residential investment opportunities during the year. Post the year-end, the Group completed the acquisition of three residential units at its freehold Heathside property in Hampstead for GBP935,000 (accepting the surrender of 67-year leasehold interests) using funds raised from the issue of convertible loan notes. The Company continues to implement its value-adding asset-management plan at this property of creating 'marriage value' through the buy-in of leasehold units.
Financial
Income increased from GBP151,417 to GBP514,746 in the financial year. The Group reports a consolidated operating loss before separately disclosed administrative items of GBP636,896, which includes abortive and ongoing acquisition costs of approximately GBP200,000. The operating loss of GBP1,029,215 includes a non-cash share-based payment charge of GBP392,319.
During the year, the Company issued GBP599,000 of new ordinary shares at just over 10 pence per share and GBP350,000 of restricted preference shares at 1p per share. The funds raised have been used to maintain the Group's property assets and cover working capital requirements.
On 9 July 2017, the Company issued 6% Loan Notes in the total sum of GBP1.35 million, a proportion of which are convertible into ordinary shares. GBP950,000 had been received in advance at the year-end. The loan notes are redeemable by the Company on 30 June 2020. This capital injection has been used primarily to acquire and refurbish the three Heathside units referred to above.
The net asset value per share at 30 June 2017 is 8.57p. The post-balance sheet active asset management, acquisitions and light refurbishment in the Osprey portfolio has crystallised further value in the portfolio of more than GBP400,000.
Portfolio valuation
The portfolio at year-end was valued at GBP7.24 million, an increase of GBP0.1 million compared to 30 June 2016.
Board changes
We were delighted that Dominic White joined the Board as chief executive in January 2017. His long background in property investment has already proved of great value to the Company.
Christopher James, Tim Oakley and Patricia Farley stepped down from the board at the end of March. Christopher and Tim continue to play important roles as members of the senior management team while Patricia's property expertise and experience remains available to the business. Oliver Vaughan became a non-executive director of the Company in May 2017.
Future prospects
During the year, the Group has raised capital, restructured its Board, and, since year-end, acquired valuable assets. It has continued to build the positive momentum from the previous year.
The Company aims to deliver a strong and growing covered dividend from rental streams and net asset value growth through the professional management of residential assets and the acquisition and management of SPVs with attractive and undervalued portfolios. We have built a significant pipeline of potential UK residential investments that, if acquired, would deliver this outcome.
The Board continues to find and be shown interesting acquisition opportunities and I hope that I will be able to report further positive developments to you before too long.
STRATEGIC REPORT
The directors present the strategic report of K&C REIT plc ('K&C' or the 'Company') and its subsidiaries (together, the 'Group') for the year ended 30 June 2017. The Company was incorporated in England and Wales on 10 June 2014.
PRINCIPAL ACTIVITY
The Group carries on the business of acquiring and managing residential property in the UK for letting to third parties on long and short leases. At the year-end, the Group consisted of the Company and three subsidiaries.
1. K&C (Coleherne) Limited owns a freehold residential property in Chelsea, London
2. K&C (Osprey) Limited owns the freehold of several retirement properties let on long leases to residents and provides management services in respect of these properties and to third party landlords
3. K&C (Newbury) Limited owns no property and is now effectively dormant.
GROUP STRATEGY
The directors intend to build a significant presence in the residential letting market, primarily through the acquisition of UK-registered special purpose vehicles that own residential property for letting to third parties.
RESULTS
The Group reports an operating loss from operating activities of GBP1,029,215 for the year to 30 June 2017.
REVIEW OF BUSINESS AND FINANCIAL PERFORMANCE
The Board has reviewed whether the Annual Report, taken as a whole, presents a fair, balanced and understandable summary of the Group's position and prospects, and believes that it provides the information necessary for shareholders to assess the Group's position, performance, and strategy.
Information on the financial position and development of the Group is set out in the Chairman's Statement, the report of the directors and the annexed financial statements.
FINANCIAL KEY PERFORMANCE INDICATORS
The directors and management team review a variety of key performance indicators to monitor and improve Group performance, including:
A. At property level i. Rent per ft(2) compared with comparable market data and with other units in the asset ii. Vacancy rate in terms of number of units available and potential rental income
iii. Management costs as a percentage of rental income (including repairs and maintenance, insurance, cleaning, agents' fees, legal fees, utilities and council tax)
iv. Gross and net yield compared with target levels v. Marginal increase in income as a percentage of capital expenditure vi. Outstanding rents as a percentage of rental income vii. Implementation of property plans compared with target. B. At Group level i. Assets under management compared with target ii. Overheads as a percentage of gross/net rental income compared with target.
No analysis of performance compared to these KPIs has been provided because the diverse nature of the assets owned by the subsidiary companies, and the changes to the operating models initiated by the Group, make such analyses at this stage of their ownership potentially misleading.
RISKS AND UNCERTAINTIES
The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and regular reporting that these risks are minimised as far as possible.
The principal risks and uncertainties facing the Group at this stage in its development are:
-- Financing and liquidity risk
The Company has an ongoing requirement to fund its activities through the equity markets and in future to obtain finance for property acquisition and management. There is no certainty that such funds will be available when needed.
-- Financial instruments
Details of risks associated with the Group's financial instruments are given in the notes to the financial statements.
-- Valuations
The valuation of the investment property portfolio is inherently subjective as it is made on the basis of assumptions made by the valuer that may not prove to be accurate. The outcome of this judgment is significant to the Group in terms of its investment decisions and results.
INTERNAL CONTROLS AND RISK MANAGEMENT
The directors are responsible for the Group's system of internal control. Although no system of internal control can provide absolute assurance against material misstatement or loss, the Group's system is designed to provide reasonable assurance that problems are identified on a timely basis and dealt with appropriately.
In carrying out their responsibilities, the directors have put in place a framework of controls to ensure as far as possible that ongoing financial performance is monitored in a timely manner, that, where required, corrective action is taken and that risk is identified as early as practically possible. The directors have reviewed the effectiveness of internal control.
The Board, subject to delegated authority, reviews, among other things, capital investment, property sales and purchases, additional borrowing facilities, guarantees and insurance arrangements.
BRIBERY RISK
The Group has adopted an anti-corruption policy and whistle-blowing policy under the Bribery Act 2010. Notwithstanding this, the Group may be held liable for offences under that Act committed by its employees or subcontractors whether or not the Group or the directors have knowledge of the commission of such offences.
FORWARD-LOOKING STATEMENTS
This Annual Report contains certain forward-looking statements that have been made by the directors in good faith based on the information available at the time of the approval of the annual report and financial statements. By their nature, such forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements.
OUTLOOK
The Group took significant steps forward through its admission to AIM, achieving REIT status and enhancing the performance of its first two acquisitions. It now intends to build on these achievements through further purchases of high quality assets that will be able to support an increasing income yield. The Group is currently investigating several potential acquisitions. To make further acquisitions, the Group will be required to raise more capital and it is working closely with funding sources, both equity and debt providers, to achieve this objective.
REPORT OF THE DIRECTORS
The directors present their report with the financial statements of the Company and the Group for the year ended 30 June 2017.
A review of the business, risks and uncertainties and future developments is included in the Chairman's Statement, the Strategic Report and the notes to the financial statements.
DIVIDS
The directors do not recommend payment of a dividend for the year (2016 - GBPnil).
Political donations
The Group made no political donations during the year (2016 - GBPnil).
Corporate governance statement
The Board is committed to maintaining high standards of corporate governance. The UK Corporate Governance Code, published by the Financial Reporting Council, sets out standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders, providing principles of good governance and a code of best practice for listed companies. The UK Corporate Governance Code does not apply to AIM companies. However, shareholders expect companies in which they invest to be properly governed.
The Company's corporate governance procedures take due regard of the principles of good governance set out in the UK Corporate Governance Code, having regard to the size and the stage of development of the Company. Nonetheless, the Company has not formally adopted any specific corporate governance code.
The Company has established audit, AIM compliance and remuneration committees, with formally delegated duties and responsibilities.
Audit committee
The audit committee currently comprises James Cane and Michael Davies, the chairman. The committee is responsible for ensuring the financial performance, position and prospects of the Group are properly monitored and reported on, and for meeting the auditor and reviewing their reports relating to accounts and internal controls.
SUBSTANTIAL SHAREHOLDINGS
As at 11 October 2017, the directors had been notified that the following shareholders own a disclosable interest of three per cent or more in the ordinary shares of the Company:
Name Interest ------------------------- -------- Venaglass Limited 18.96% Michael Wellesley-Wesley 7.85% Christopher James 6.35% Timothy James 6.21% Susan Hards 5.69% 5XM Finance 5.21% Forbes Ventures 4.74% Xiao Min 4.21% Simon Wharmby 3.83% -------------------------- --------
GOING CONCERN
The directors have adopted the going concern basis in preparing the financial statements. This is further explained in the notes to the financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 30 JUNE 2017
30 June 30 June
2017 2016
GBP GBP
CONTINUING OPERATIONS
Revenue 514,746 151,417
Cost of sales (110,544) (60,240)
----------- ---------
GROSS PROFIT 404,202 91,177
Administrative expenses (1,157,098) (513,367)
Revaluation on investment
properties 116,000 250,000
----------- ---------
OPERATING LOSS BEFORE SEPARATELY
DISCLOSED ITEMS (636,896) (172,190)
Separately disclosed administrative
items
Gain on bargain purchase - 1,541,829
Share-based payments (392,319) (212,655)
AIM admission costs - (786,578)
Costs of acquisition of
subsidiaries - (469,848)
----------- ---------
OPERATING LOSS (1,029,215) (99,442)
Finance costs (195,361) (73,009)
Finance income 5 3,138
----------- ---------
LOSS BEFORE TAXATION (1,224,571) (169,313)
Taxation - 104,942
----------- ---------
LOSS FOR THE YEAR (1,224,571) (64,371)
=========== =========
TOTAL COMPREHENSIVE EXPENSE
FOR THE YEAR (1,224,571) (64,371)
=========== =========
Loss attributable to owners
of the parent (1,224,571) (64,371)
=========== =========
Loss per share expressed
in pence per share
Basic (2.48) (0.15)
Diluted (2.48) (0.15)
=========== =========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 30 June
2017 2016
GBP GBP
----------- ---------
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 1,843 2,730
Investment properties 7,242,000 7,126,000
=========== =========
7,243,843 7,128,730
=========== =========
CURRENT ASSETS
Trade and other receivables 90,777 24,262
Cash and cash equivalents 1,023,752 250,650
=========== =========
1,114,529 274,912
=========== =========
TOTAL ASSETS 8,358,372 7,403,642
=========== =========
EQUITY
SHAREHOLDERS' EQUITY
Share capital 877,518 467,856
Share premium 4,660,322 4,120,984
Capital redemption reserve 67,500 67,500
Retained earnings (1,083,179) (250,927)
=========== =========
TOTAL EQUITY 4,522,161 4,405,413
=========== =========
LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities - borrowings
Interest bearing loans and
borrowings 1,560,756 2,690,108
=========== =========
CURRENT LIABILITIES
Trade and other payables 194,147 277,960
Financial liabilities - borrowings
Interest-bearing loans and
borrowings 31,308 30,161
Other loans 2,050,000 -
=========== =========
2,275,455 308,121
=========== =========
TOTAL LIABILITIES 3,836,211 2,998,229
=========== =========
TOTAL EQUITY AND LIABILITIES 8,358,372 7,403,642
=========== =========
Net asset value per share
(pence) 8.57 9.42
=========== =========
CONSOLIDATED STATEMENT OF CASH FLOWS
2017 2016
GBP GBP
------------ ------------
Cash flows from operating
activities
Cash used in operations (902,338) (1,590,658)
Interest paid (195,361) (73,009)
------------ ------------
Net cash used in operating
activities (1,097,699) (1,663,667)
------------ ------------
Cash flows from investing
activities
Purchase of tangible fixed
assets - (3,416)
Sale of investment properties - 715,254
Acquisition of subsidiaries - (4,630,000)
Interest received 5 3,138
------------ ------------
Net cash generated from/(used
in) investing activities 5 (3,915,024)
------------ ------------
Cash flows from financing
activities
Loan repayments in year (28,204) (874,000)
New loans in year 950,000 2,720,269
Shares issued 949,000 3,981,340
------------ ------------
Net cash generated from
financing activities 1,870,796 5,827,609
------------ ------------
Increase in cash and cash
equivalents 773,102 248,918
Cash and cash equivalents
at beginning of year 250,650 1,732
------------ ------------
Cash and cash equivalents
at end of year 1,023,752 250,650
============ ============
RECONCILIATION OF LOSS BEFORE TAXATION TO CASH
USED IN OPERATIONS
Group 2017 2016
GBP GBP
----------- -----------
Loss before taxation (1,224,571) (169,313)
Depreciation charges 887 686
Profit on disposal of investment
properties - (23,698)
Gain on bargain purchase - (1,541,829)
Revaluation of investment properties (116,000) (250,000)
Share-based payment charge 392,319 212,655
Finance costs 195,361 73,009
Finance income (5) (3,138)
----------- -----------
(752,009) (1,701,628)
(Increase)/decrease in trade and
other receivables (66,516) 221,708
Decrease in trade and other payables (83,813) (110,738)
----------- -----------
Cash used in operations (902,338) (1,590,658)
=========== ===========
Company 2017 2016
GBP GBP
----------- -----------
Loss before taxation (1,591,032) (1,978,502)
Depreciation charges 754 587
Profit on disposal of investment
properties - (17,874)
Share-based payment charge 392,319 212,655
Finance costs 194,149 65,271
Finance income - (3,086)
----------- -----------
(1,003,810) (1,720,949)
(Increase)/decrease in trade and
other receivables (24,741) 228,540
Increase/(decrease) in trade and
other payables 107,993 (101,764)
----------- -----------
Cash used in operations (920,558) (1,594,173)
----------- -----------
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 30 JUNE 2017
1) REVENUE
The Group is involved in UK property ownership, management and letting and is considered to operate in a single geographical and business segment.
The total revenue of the Group for the year was derived from its principal activities, being the letting to third parties of, and management of, property assets owned by the Group, and, in certain cases, the management of property assets owned by third parties.
2) EMPLOYEES AND DIRECTORS
2017 2016
GBP GBP
------- -------
Wages and salaries 276,538 264,971
Social security costs 17,431 2,332
Pension costs 599 -
------- -------
294,568 267,303
======= =======
The average monthly number of employees
during the year was as follows 2017 2016
Directors and management 7 8
Administration 2 1
------- -------
9 9
======= =======
2017 2016
GBP GBP
Directors' remuneration (as per
Report of the Directors) 132,375 23,000
======= =======
The directors are considered to be key management personnel.
Certain directors and others have also received share options in the Company, further details of which are contained in the notes to the financial statements
3) SEPARATELY DISCLOSED ITEMS
On 3 July 2015, the Group was admitted to AIM. The costs involved totalled GBP786,578. It is considered that the size and nature of these costs are such that they should be disclosed on the face of the Consolidated Statement of Comprehensive Income.
On 3 July 2015, the Group acquired K&C (Coleherne) Limited and on 27 May 2016, the Group acquired K&C (Osprey) Limited. The costs to the Group of acquiring these entities totalled GBP469,848. It is considered that the size and nature of these costs are such that they should be disclosed on the face of the Consolidated Statement of Comprehensive Income.
Further information on the gain on bargain purchase and the share-based payments, which are shown on the face of the Consolidated Statement of Comprehensive Income, can be found in the notes to the financial statements.
4) LOSS BEFORE TAXATION
The loss before taxation is stated after charging/(crediting):
2017 2016
GBP GBP
====== ========
Hire of plant and machinery 2,018 1,487
Other operating leases 12,840 2,493
Depreciation - owned assets 887 686
Profit on disposal of investment
properties - (23,698)
Auditors' remuneration for the Group
- audit services for parent company 20,000 15,000
- audit services for subsidiaries 15,000 12,500
- taxation advisory services 12,000 5,000
- other non-audit services - 80,000
------ --------
5) LOSS PER SHARE
Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.
Fully diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.
In the opinion of the directors, all of the outstanding share options and warrants are anti-dilutive and, hence, basic and fully diluted loss per share are the same.
2017
Weighted
average Per
number of share
Loss shares amount
------------ ----------- --------
GBP No pence
Loss attributable to
ordinary shareholders (1,224,571) 49,455,237 (2.48)
Effect of dilutive securities - - -
============ =========== ========
2016
Weighted
average Per
number of share
Loss shares amount
------------ ----------- --------
GBP No pence
Loss attributable to
ordinary shareholders (64,371) 43,711,358 (0.15)
Effect of dilutive securities - - -
============ =========== ========
6) INVESTMENT PROPERTIES
Group Total
GBP
----------
COST
At 1 July 2016 7,126,000
Revaluations 116,000
----------
At 30 June 2017 7,242,000
==========
NET BOOK VALUE
At 30 June 2017 7,242,000
==========
At 30 June 2016 7,126,000
==========
The investment properties were procured upon acquisition of subsidiaries.
The properties were valued by professionally qualified independent external valuers at the date of acquisition and were recorded at the values that were attributed to the properties at acquisition date. In September 2017, certain properties were valued again by professionally qualified independent external valuers in accordance with the Royal Institution of Chartered Surveyors' Appraisal and Valuation Standards 2014 as amended, resulting in a revaluation to GBP6,612,000. The remaining properties were valued at GBP630,000 by the directors as at 30 June 2017. The fair values used are considered to be level 3 inputs under IFRS13.
The revenue earned by the Group from its investment properties and all direct operating expenses incurred on its investment properties are recorded in the Consolidated Statement of Comprehensive Income.
The total rental income in relation to investment properties for the Group equated to GBP154,903 (2016 - GBP133,113). The total rental expenses in relation to investment properties for the Group equated to GBP53,101 (2016 - GBP52,673).
7) INVESTMENTS
Shares
in group
undertakings
Company GBP
--------------
COST
At 1 July 2016 5,305,000
==============
At 30 June 2017 5,305,000
==============
NET BOOK VALUE
At 30 June 2017 5,305,000
==============
At 30 June 2016 5,305,000
==============
The Company's investments comprise the following:
Acquisition of K&C (Coleherne) Limited
On 3 July 2015, the Company acquired the entire issued share capital of K&C (Coleherne) Limited (formerly Silcott Properties Limited) for GBP3,630,000, satisfied by cash of GBP3,330,000 and the issuance of ordinary shares to the value of GBP300,000. In the director's opinion, the net assets of K&C (Coleherne) Limited, consisting solely of an investment property in London that was independently valued on 22 July 2015 at GBP4 million, were worth in excess of the amount paid and hence gave rise to negative goodwill.
Net assets acquired were as follows:
GBP
-----------
Investment property 4,000,000
Trade and other receivables 366,118
Cash and cash equivalents 8,339
Trade and other payables (10,767)
Financial liabilities - borrowings (489,200)
Taxation payable (9,944)
Net assets 3,864,546
Gain on bargain purchase - taken to
Statement of Comprehensive Income (364,784)
Total Consideration (includes deduction
of GBP130,238 loan repayment) 3,499,762
Satisfied by cash 3,199,762
Net cash outflow arising on acquisition:
Cash consideration (3,199,762)
Bank and cash balances acquired 8,339
-----------
(3,191,423)
===========
Acquisition of K&C (Osprey) Limited
On 27 May 2016, the Company acquired the entire issued share capital of K&C (Osprey) Limited (formerly The Osprey Management Company Limited) satisfied by cash of GBP1,300,000 and the issuance of ordinary shares to the value of GBP300,000. In the director's opinion, the net assets of K&C (Osprey) Limited, consisting of various developments in England that have been valued (independently or by the directors) at GBP2,876,000, were worth in excess of the amount paid and hence gave rise to negative goodwill.
Net assets acquired were as follows:
GBP
-----------
Investment property 2,876,000
Non-current assets - Equipment 311
Investment in subsidiary 1
Trade and other receivables 25,615
Cash and cash equivalents 19,526
Trade and other payables (36,678)
Provisions (80)
-----------
Net assets 2,884,695
Fair value adjustment to deferred taxation (107,650)
Gain on bargain purchase - taken to
Statement of Comprehensive Income (1,177,045)
-----------
Total consideration 1,600,000
===========
Total consideration 1,600,000
===========
Satisfied by cash 1,300,000
===========
Net cash outflow arising on acquisition:
Cash consideration (1,300,000)
Bank and cash balances acquired 19,526
-----------
(1,280,474)
===========
8) TRADE AND OTHER RECEIVABLES
Group Company
2017 2016 2017 2016
GBP GBP GBP GBP
Trade debtors 960 - -
Other debtors 63,334 16,976 5,918
VAT 427 - -
Prepayments 26,056 7,286 21,578 2,756
------- ------- ------- ------
90,777 24,262 27,496 2,756
======= ======= ======= ======
There is no material difference between the fair value of trade and other receivables and their book value.
9) SHARE CAPITAL
Allotted, issued and fully paid
30 June 30 June
Number Class Nominal value 2017 2016
---------- ------- -------
GBP GBP
------- -------
52,751,813 Ordinary GBP0.01 527,518 467,856
Restricted
35,000,000 preference GBP0.01 350,000 -
======= =======
877,518 467,856
======= =======
At 1 July 2016, the Company had 46,785,623 Ordinary shares of GBP0.01 in issue.
On 23 December 2016, the Company issued 2,500,000 Ordinary shares of GBP0.01 each. The shares were issued at a premium of GBP0.09 per share.
Between 6 January and 30 January 2017, the Company issued 2,750,000 Ordinary shares of GBP0.01 each. The shares were issued at a premium of GBP0.09 per share.
Between 22 February and 1 March 2017, the Company issued 716,190 Ordinary shares of GBP0.01 each, 240,000 of which were issued as payment for professional services by Peterhouse Corporate Finance. 476,190 of the shares were issued at a premium of GBP0.095 per share and 240,000 of the shares were issued at a premium of GBP0.09 per share.
Between 22 February and 1 March 2017, the Company issued 16,400,000 Restricted Preference shares of GBP0.01 each at par.
On 26 April 2017, the Company issued 18,600,000 Restricted Preference shares of GBP0.01 each at par.
The restricted preference shares carry no voting or dividend rights.
On a winding up or a return of capital the holders of the preference shares shall rank pari passu with the holders of the Ordinary shares save that on a distribution of assets the amount to be paid to the holder shall be limited to the nominal capital paid up or credited as paid up.
10) FINANCIAL LIABILITIES - BORROWINGS
Group Company
2017 2016 2017 2016
GBP GBP GBP GBP
Current
Bank loans 31,308 30,161 31,308 30,161
Other loans 2,050,000 - 2,050,000 -
---------- ---------- ---------- ----------
2,081,308 30,161 2,081,308 30,161
========== ========== ========== ==========
Non-current
Bank loans 1,560,756 1,590,108 1,560,756 1,590,108
Other loans - 1,100,000 - 1,100,000
1,560,756 2,690,108 1,560,756 2,690,108
========== ========== ========== ==========
Terms and debt repayment schedule
1 year 1-2 More than
or less years 2-5 years 5 years Totals
---------- ------- ---------- ---------- ----------
Group GBP GBP GBP GBP GBP
Bank loans 90,336 90,336 271,008 2,052,387 2,504,067
Other loans 2,050,000 - - - 2,050,000
---------- ------- ---------- ---------- ----------
2,140,336 90,336 271,008 2,052,387 4,554,067
========== ======= ========== ========== ==========
Company
------- ---------- ---------- ----------
Bank loans 90,336 90,336 271,008 2,052,387 2,504,067
Other loans 2,050,000 - - - 2,050,000
---------- ------- ---------- ---------- ----------
2,140,336 90,336 271,008 2,052,387 4,554,067
========== ======= ========== ========== ==========
Details of the principal loans are as follows:
1) A 25-year bank loan of GBP1,592,064 (2016 - GBP1,620,269) repayable by 300 monthly instalments of GBP7,528 and a final instalment of GBP418,811. All the payments itemised above include both capital repayments and interest at 3.25 per cent above Base Rate. The loan is secured by a first debenture over all assets and undertakings of the Company, a cross guarantee from K&C (Coleherne) Limited over the freehold property known as 25 Coleherne Road and a debenture over the assets and undertakings of K&C (Coleherne) Limited. The loan is also secured by a pledge of shares of K&C (Coleherne) Limited.
2) A loan of GBP1,100,000, commencing on 27 May 2016, which is repayable in full no later than 27 May 2018 and is secured on the assets of the Company and the assets of K&C (Osprey) Limited. Interest is charged at 12 per cent per annum and is payable quarterly in arrears.
3) A loan of GBP950,000 was received on 29 June 2017, with no payment terms or interest. Following the year end these loans were reclassified as convertible loan notes. These loan notes attract interest at a rate of six per cent per annum, payable quarterly, and will be redeemed on 30 June 2020.
11) RELATED PARTIES
During the previous year, the Group repaid a loan totalling GBP215,000 which was received from Christopher James, a director, in the previous period. The loan was subject to an interest charge for the period from receipt to redemption of 17.5 per cent of the principal amount, payable in full at the earlier of admission to AIM or 31 July 2016. The loan was repaid by converting the loan into ordinary shares of the Company at par. Following admission to AIM on 3 July 2015, gross interest of GBP37,625 was paid to Christopher James.
During the previous year, the Group repaid a loan totalling GBP125,000 which was received from Oliver Vaughan, a director, in the previous period. The loan was subject to an interest charge for the period from receipt to redemption of 17.5 per cent of the principal amount, payable in full at the earlier of admission to AIM or 31 July 2016. The loan was repaid in full during the year. Gross interest of GBP23,523 was paid to Mr Vaughan.
During the year, fees of GBP50,000 plus VAT were paid to White Amba Limited, a company controlled by the director, Dominic White.
At the balance sheet date, current liabilities included GBP100,000 received from a director, Timothy James, and his wife. These monies were reclassified into convertible loan notes after the balance sheet date.
During the year, the Group paid (i) Perry, Cane, a consultancy business owned by James Cane, fees of GBP25,000 excluding VAT, (ii) CD James (Property Consultants) Limited, a company owned by Christopher James, fees of GBP26,000 and (iii) DGS Capital Partners LLP, an LLP in which Michael Davies is a member, fees of GBP38,000 excluding VAT.
At the balance sheet date, the following directors held restricted preference shares:
Restricted Preference
Shares
=====================
Name No.
Timothy James 9,600,000
Oliver Vaughan 8,100,000
James Cane 300,000
Dominic White 5,000,000
=====================
Included in the total of Mr Vaughan's holdings above are 665,000 shares and 165,000 warrants held in the name of Grosmont Investments Limited, a company that he controls.
Included in the total of Mr White's holdings above are 5,000,000 restricted preference shares held in the name of White Amba Limited, a company that he controls.
Since the year-end, the holdings of directors have remained unchanged.
12) POST BALANCE SHEET EVENTS
On 7 July 2017, monies disclosed as Other loans of GBP950,000 at the balance sheet date were reclassified to convertible loan notes when the Company issued GBP1,350,000 6% convertible loan notes.
Post year-end, the Group purchased three properties for GBP935,000, excluding costs, within its freehold development at Heathside, London, using part of the proceeds from the issuance of the convertible loan notes.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LIFLIISLDLID
(END) Dow Jones Newswires
October 17, 2017 02:00 ET (06:00 GMT)
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