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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Helical Plc | AQSE:HLCL.GB | Aquis Stock Exchange | Ordinary Share | GB00B0FYMT95 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 200.00 | 150.00 | 250.00 | 200.00 | 200.00 | 200.00 | 0.00 | 07:03:33 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Nov 2023 to May 2024
TIDMHLCL
RNS Number : 2082U
Helical PLC
22 November 2023
HELICAL PLC
("Helical" or the "Group" or the "Company")
Results for the Half Year to 30 September 2023 (the "Period"/"Half Year")
Helical's letting potential and development pipeline to drive future growth
Gerald Kaye, Chief Executive, commented:
"Occupational demands are evolving in the office sector, with tenants using their premises to optimise the work experience for their employees. Amenity, connectivity, service and sustainability are encouraging businesses towards new buildings. At the same time, buildings that provide a poorer working environment are driving occupiers away. This bifurcation of the market between the "best-in-class" and the rest is accelerating with rental growth continuing for the "best" and values falling for the rest. This will provide opportunities to acquire potential developments and major refurbishments at levels that allow for strong capital returns.
"We have experienced a further significant outward yield movement in the Period, and while interest from potential occupiers has been encouraging, lease negotiations are taking longer to conclude. However, having taken the pain of reductions in value, Helical is now well positioned to drive growth through the letting of the vacant space in its investment portfolio.
"At The JJ Mack Building, EC1, a prime example of a "best-in-class" building, recent letting progress has been encouraging and we will be c.60% let once the current space under offer completes in December. Each letting to date has exceeded the applicable ERV and the recent letting of the 9(th) floor sets a record rent for the sub-market. By concluding these lettings, the existing 25bps yield differential between vacant and let space will unwind providing a significant positive impact on valuations. Similarly, upon re-letting the WeWork space at The Bower, EC1, the capital value will be enhanced as the yield differential is removed and contracted rent increases towards its ERV of c.GBP24m, which is significantly in excess of our total annualised recurring administration and finance costs.
"Our development pipeline is expected to provide surpluses for the foreseeable future. Scheduled to start in 2024 and be delivered from late 2025 onwards, this pipeline will be supplemented with additional "equity-light" opportunities as building owners seek specialists in office development and refurbishment to partner with them to maximise the value of their assets. In addition, banks and other financial institutions with non-performing assets should provide additional opportunities for Helical to create value.
"The balance sheet is in good shape and maintaining financial discipline remains at the forefront of Helical's approach. Recycling equity and seeking third party financing to fund the pipeline of opportunities will allow the Company to grow the business while containing gearing to appropriate levels.
"There remains a shortage of "best-in-class" newly refurbished or redeveloped office space in central London. With an experienced management team, a substantial development pipeline with optionality over timing and funding, and no legacy assets requiring investment to meet minimum sustainability standards, Helical is well positioned to capitalise on current cyclical opportunities."
Operational Activity During the Period
Steady progress with lettings, despite challenging backdrop
-- During the Period we completed five new lettings, comprising 10,381 sq ft, delivering contracted rent of GBP576,803 in line with 31 March 2023 ERVs.
-- Despite this activity, vacancy increased across the portfolio to 18.5% (31 March 2023: 16.1%) at 30 September 2023.
-- S i nce the Period end, we have let the 9(th) floor (13,408 sq ft) at The JJ Mack Building, EC1 for 10 years to Corio Generation, a subsidiary of Macquarie Group, at a 2.3% premium to 31 March 2023 ERVs, and have a further three floors (68,002 sq ft) under offer to one tenant. On completion, the building will be c.60% let.
-- At The Bower, EC1 we have extended the lease to existing tenant Verkada by 10 years and have facilitated their expansion into an additional, adjacent floor. The vacant 14(th) floor is now under offer at a rent above 31 March 2023 ERV.
-- In October 2023, we exercised our right to forfeit the individual leases for the six floors let to WeWork at The Tower, EC1 following non-payment of rent for the September 2023 quarter. Subsequently, we have entered into a short-term licence arrangement with them and received a fee equivalent to the whole of the September quarter's rent and service charge due under the terms of the previous lease arrangements.
-- On the expiry of the WeWork licence arrangement, and following the departure of Baker McKenzie from 100 New Bridge Street, EC4 in anticipation of its redevelopment, the vacancy rate across the investment portfolio will rise to c.25%.
Sales
-- Subsequent to the Period end, we have sold the long leasehold interest in the retail units at Barts Square for GBP7.0m (our share GBP3.5m), bringing an end to the joint venture with Baupost, which built 235 apartments, three office buildings totalling 249,000 sq ft and 21,000 sq ft of retail across 10 units.
Portfolio Valuation
-- There was an average outward yield adjustment of 46bps at 30 September 2023 across the portfolio. This compares to the 75bps outward movement of City office prime yields, as reported by Savills for the Period.
100 New Bridge Street, EC4
-- At 100 New Bridge Street, EC4, we received planning approval from The City of London for our 194,000 sq ft scheme. The main construction contract and development financing facility are being finalised so that we can be ready to start construction in early 2024.
The Platinum Portfolio - TfL
-- On 11 July 2023, contracts were signed confirming Helical as Transport for London's ("TfL") commercial office joint venture partner. This long term partnership will see the delivery of new, high-quality and sustainable office space predominantly above or adjacent to key transport hubs. The first three development opportunities are:
- Bank OSD, EC4 - Located above the recently opened Bank Station entrance on Cannon Street. This eight storey office development will deliver 142,000 sq ft NIA over seven office floors, with typical floorplates of 22,500 sq ft, and 7,653 sq ft of terracing over three floors. A start on site is envisaged in October 2024.
- Southwark OSD, SE1 - Located above Southwark Station. The scheme has consent for a 222,000 sq ft NIA office building over 17 storeys. Feasibility studies are underway, looking at alternative approaches for the site.
- Paddington OSD, W2 - The 235,000 sq ft NIA scheme is to be built over the canal level eastern entrance to Paddington Station, opposite the Brunel Building. We intend to make minor changes to ensure we deliver a "best-in-class" scheme with enhanced amenities.
Financial Highlights
Earnings and Dividends
-- IFRS loss of GBP93.1m (2022: profit of GBP17.2m), primarily driven by revaluation losses. -- IFRS basic loss per share of 75.8p (2022: earnings of 14.1p). -- EPRA earnings per share(1) of 1.1p (2022: 4.8p). -- Interim dividend maintained at 3.05p per share (2022: 3.05p).
Balance Sheet
-- Net asset value down 17.5% to GBP502.3m (31 March 2023: GBP608.7m). -- Total Accounting Return(1) on IFRS net assets of -15.9% (2022: 2.3%). -- Total Accounting Return(1) on EPRA net tangible assets of -16.6% (2022: -2.5%). -- EPRA net tangible asset value per share(1) down 17.0% to 409p (31 March 2023: 493p). -- EPRA net disposal value per share(1) down 16.5% to 409p (31 March 2023: 490p).
Financing
-- See-through loan to value(1) of 33.5% (31 March 2023: 27.5%). -- See-through net borrowings(1) of GBP249.6m (31 March 2023: GBP231.4m).
-- Average maturity of the Group's share(1) of secured debt of 2.4 years (31 March 2023: 2.9 years).
-- 100% of drawn debt protected by interest rate hedging to expiry of facilities. -- Gain in valuation of derivative financial instruments of GBP2.1m (2022: GBP26.6m). -- See-through average cost of secured facilities(1) of 3.3% (31 March 2023: 3.4%). -- Group's share(1) of cash and undrawn bank facilities of GBP226.7m (31 March 2023: GBP244.2m).
Portfolio Update
-- IFRS investment property portfolio value of GBP595.1m (31 March 2023: GBP681.7m).
-- Our see-through investment portfolio(1) , valued at GBP745.6m (31 March 2023: GBP839.5m), declined 11.8% with yield expansion of 46bps offset by 1.8% ERV(1) growth.
-- See-through portfolio WAULT(1) of 4.6 years (31 March 2023: 5.0 years).
Sustainability Highlights
-- Good progress against targets set out in sustainability strategy "Built for the Future" and our aim to be a net zero carbon business by 2030.
-- Ranked 1(st) against our peers in the UK Office Listed sector for standing investments, as measured by GRESB, scoring 87% and receiving a 4 Star rating. Our developments received a score of 92% and also received a 4 Star rating.
-- Retention of EPRA Sustainability BPR Gold rating.
Interim Dividend Timetable
Hot Features
Premium
Announcement date 22 November
2023
Ex-dividend date 30 November
2023
Record date 1 December
2023
Dividend payment date 12 January
2024
A Dividend Reinvestment Plan ("DRIP") is provided by Equiniti Financial Services Limited. The DRIP enables the Company's Shareholders to elect to have their cash dividend payments used to purchase the Company's shares. More information can be found at www.shareview.co.uk/info/drip .
For further information, please contact:
Helical plc 020 7629 0113 Gerald Kaye (Chief Executive) Tim Murphy (Chief Financial Officer) Address: 5 Hanover Square, London W1S 1HQ Website: www.helical.co.uk Twitter: @helicalplc FTI Consulting 020 3727 1000 Dido Laurimore/Richard Gotla/Andrew Davis schelical@fticonsulting.com
Results Presentation
Helical will be holding a presentation for analysts and investors starting at 10:00am on Wednesday 22 November 2023 at the offices of FTI Consulting, 200 Aldersgate, Aldersgate Street, London, EC1A 4HD. If you would like to attend, please contact FTI Consulting on 020 3727 1000, or email schelical@fticonsulting.com
The presentation will be on the Company's website www.helical.co.uk and a live webcast and Q&A will also be available.
Webcast Link:
https://stream.brrmedia.co.uk/broadcast/64e620a4d584ef1a8fc186ab
Half Year Results Statement
At Helical, sustainability is at the heart of everything we do and forms one of the key pillars of our strategy. With this in mind, we have taken the decision to cease mailing hard copies of our half year results reports to our Shareholders and other stakeholders unless specifically requested. Should you wish to receive a hard copy of our Results for the Half Year to 30 September 2023 by post, please email your request to companysecretary@helical.co.uk . An electronic version of our Results for the Half Year to 30 September 2023 is available on our website ( https://www.helical.co.uk/investors/results-and-presentations/ ).
1. See Glossary for definition of terms. These interim condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the UK and the Disclosure Guidance and Transparency Rules sourcebook of the UK's Financial Conduct Authority. In common with usual and best practice in our sector, alternative performance measures have also been provided to supplement IFRS, some of which are based on the recommendations of the European Public Real Estate Association ("EPRA"), with others designed to give additional information about the Group's share of assets and liabilities, income and expenses in subsidiaries and joint ventures.
Chief Executive's Statement
Overview
During the six months to 30 September 2023, there has been a painful readjustment in the investment market as valuation yields have increased to reflect movements in ten year gilts and five year swap rates, the pricing of which is correlated to real estate property yields.
There are signs, however, with inflation falling and predictions that CPI will be in low single figures by the end of 2024, that base rates have peaked and may start to fall sooner than the "higher for longer" commentators suggest, allowing yields to stabilise.
At Helical, the portfolio has seen an outward yield adjustment of 46bps since 31 March 2023, offset by 1.8% ERV growth, with both valuations and earnings impacted by increased vacancy in the portfolio, particularly as the result of our forfeiture of the leases to WeWork at The Bower, EC1. This proactive step has allowed us to regain control of the space, shortly before the tenant went into Chapter 11 in the US, and it enables us to determine the best future leasing strategy for this high quality space.
At the same time, we continue to let space at our most recently completed new development, The JJ Mack Building, EC1. Despite an increase in the time taken to negotiate commercial terms and complete the legal processes, we have made good progress in letting the space and at record rents for the Farringdon area, significantly in excess of the initial appraisal rental levels and above March 2023 ERVs.
The Half Year at Helical has also seen significant progress made across the development pipeline, including signing the joint venture with TfL's property company, "Places for London", and reviewing and refining plans for each of our projects. The selection of Helical as the joint venture partner for Places for London was a significant milestone, boosting our development pipeline by almost 600,000 sq ft, with the potential for additional schemes to be added to the joint venture in the future. This collaboration with TfL, one of London's largest landowners, is an endorsement of the Helical brand and recognises our track record of producing "best-in-class" successful developments across central London over many years.
Results for the Half Year
The loss after tax for the half year to 30 September 2023 was GBP93.1m (2022: profit GBP17.2m).
The see-through Total Property Return of -GBP84.8m (2022: +GBP4.0m), incorporating the Group's share of results of its joint ventures, includes see-through net rental income of GBP12.4m (2022: GBP18.2m), while developments generated see-through losses of GBP0.5m (2022: profit of GBP0.9m). The see-through net loss on sale and revaluation of the investment portfolio was GBP96.7m (2022: GBP15.1m).
See-through recurring administration costs, excluding performance related awards and NIC, were down 16.1% to GBP4.8m (2022: GBP5.8m). Including the charge for share based payments and NIC, total see-through administration costs were down 4.6%, to GBP5.8m (2022: GBP6.0m). Total see-through net finance costs reduced by 22% to GBP5.6m (2022: GBP7.2m) while an increase in expected future interest rates, as assessed at 30 September 2023, led to a GBP2.1m gain (2022: GBP26.6m) in the valuation of the Group's derivative financial instruments.
There was an IFRS basic loss per share of 75.8p (2022: earnings of 14.1p) and an EPRA earnings per share of 1.1p (2022: 4.8p).
On a like-for-like basis, the see-through investment portfolio fell in value by 11.8%, reflecting yield expansion of 46bps offset by 1.8% ERV growth.
EPRA net tangible assets ("NTA") per share were down 17.0% to 409p (31 March 2023: 493p), with EPRA net disposal value ("NDV") per share down 16.5% to 409p (31 March 2023: 490p). The Total Accounting Return ("TAR") for the Period, being the growth in the IFRS net asset value of the Group, plus dividends paid in the Period, was -15.9% (2022: 2.3%). Based on EPRA NTA per share, the TAR was
-16.6% (2022: -2.5%).
Balance Sheet Strength and Liquidity
At 30 September 2023, the Group had GBP226.7m (31 March 2023: GBP244.2m) of cash and agreed, undrawn, committed bank facilities, including its share in joint ventures, available to fund capital works on its portfolio and future acquisitions.
The see-through loan to value ratio ("LTV") increased to 33.5% at the balance sheet date (31 March 2023: 27.5%) and our see-through net gearing, the ratio of net borrowings to the net asset value of the Group, increased to 49.7% (31 March 2023: 38.0%) over the same period.
At the Period end, the average debt maturity on secured loans, on a see-through basis, was 2.4 years (31 March 2023: 2.9 years). The average cost of debt, on a see-through basis, at 30 September 2023 was 3.3% (31 March 2023: 3.4%).
Dividends
Helical seeks to maximise value by successfully letting redeveloped or comprehensively refurbished property. Once stabilised, these assets are either retained for their long-term income and reversionary potential or sold to recycle equity into new schemes.
This recycling leads to fluctuations in our EPRA earnings per share, as the calculation of these earnings excludes capital profits or losses generated from the sale and revaluation of assets. As such both EPRA earnings and accumulated realised capital profits are considered when determining the payment of any dividend in excess of the Property Income Distribution requirement.
In the Period to 30 September 2023, EPRA earnings per share fell to 1.1p (2022: 4.8p), mainly reflecting the impact of the forfeiture of the leases to WeWork at The Bower, EC1 and the sale of Kaleidoscope, EC1 in September 2022. No investment assets were sold during the Period.
In the light of the reduced earnings, the Board has approved an Interim Dividend of 3.05p per share, the same level as in 2022. This dividend is to be paid out of EPRA earnings and accumulated realised capital profits. The Property Income Distribution ("PID") for the six months to 30 September 2023 will be 0.50p, with the balance of the Interim Dividend of 2.55p representing an additional ordinary dividend.
The Opportunity
Occupational demands are evolving in the office sector, with tenants using their premises to optimise the work experience for their employees. Amenity, connectivity, service and sustainability are encouraging businesses towards new buildings. At the same time, buildings that provide a poorer working environment are driving occupiers away. This bifurcation of the market between the "best-in-class" and the rest is accelerating with rental growth continuing for the "best" and values falling for the rest. This will provide opportunities to acquire potential developments and major refurbishments at levels that allow for strong capital returns.
We have experienced a further significant outward yield movement in the Period, and while interest from potential occupiers has been encouraging, lease negotiations are taking longer to conclude. However, having taken the pain of reductions in value, Helical is now well positioned to drive growth through the letting of the vacant space in its investment portfolio.
At The JJ Mack Building, EC1, a prime example of a "best-in-class" building, recent letting progress has been encouraging and we will be c.60% let once the current space under offer completes in December. Each letting to date has exceeded the applicable ERV and the recent letting of the 9(th) floor sets a record rent for the sub-market. By concluding these lettings, the existing 25bps yield differential between vacant and let space will unwind providing a significant positive impact on valuations. Similarly, upon re-letting the WeWork space at The Bower, EC1, the capital value will be enhanced as the yield differential is removed and contracted rent increases towards its ERV of c.GBP24m, which is significantly in excess of our total annualised recurring administration and finance costs.
Our development pipeline is expected to provide surpluses for the foreseeable future. Scheduled to start in 2024 and be delivered from late 2025 onwards, this pipeline will be supplemented with additional "equity-light" opportunities as building owners seek specialists in office development and refurbishment to partner with them to maximise the value of their assets. In addition, banks and other financial institutions with non-performing assets should provide additional opportunities for Helical to create value.
The balance sheet is in good shape and maintaining financial discipline remains at the forefront of Helical's approach. Recycling equity and seeking third party financing to fund the pipeline of opportunities will allow the Company to grow the business while containing gearing to appropriate levels.
There remains a shortage of "best-in-class" newly refurbished or redeveloped office space in central London. With an experienced management team, a substantial development pipeline with optionality over timing and funding, and no legacy assets requiring investment to meet minimum sustainability standards, Helical is well positioned to capitalise on current cyclical opportunities.
Gerald Kaye
Chief Executive
22 November 2023
Our Market
General overview
During the Period, the central London office market experienced significant headwinds as geopolitical and economic events continued to weigh on sentiment towards the sector.
While the economic environment for real estate remains challenging, the fundamentals of the central London office occupier market remain robust with Q3 2023 experiencing the highest levels of take-up so far this year and active requirements surpassing 10 million sq ft as occupiers continue to seek "best-in-class" space for their employees.
Investment Market
The investment market continues to be impacted by higher interest rates and general economic uncertainty. Investment volumes in the three quarters to 30 September 2023 have been subdued, totalling GBP3.8bn in central London. This is 74% below the 10 year average as reported by CBRE. This lack of activity has led to further uncertainty over appropriate asset valuations as comparable evidence remains scarce.
Savills prime equivalent yields show that, over the last six months, the City office yield has moved out 75bps to 5.25%. The MSCI London City Equivalent Yield, which includes both prime and non-prime office buildings, has moved out 90bps over the last six months, while our portfolio yield expanded by 46bps, highlighting that "best-in-class" yields have been less impacted.
The consensus opinion that interest rates will remain at higher levels for an extended period has added significant costs to project appraisals, suppressing investor appetite for new acquisitions and undertaking capital expenditure projects of scale. However, debt markets remain open, with an increasingly diverse lender pool seeking the opportunity to deploy capital, albeit lenders are being increasingly discerning about their choice of counterparty.
Occupational Market
Despite a challenging economic backdrop, the occupational market has remained relatively robust and the latest figures show, as at 30 September 2023, there is 10.6 million sq ft of active requirements for space across central London, up 42% compared to a year earlier. The trend towards "best-in-class" office space continues and is evidenced by CBRE's Q3 2023 figures, showing a decline in availability of newly completed space to 4.0 million sq ft, while second-hand space availability stood much higher, at 17.3 million sq ft, well above the long-term average of 11.1 million sq ft.
Banking, finance and professional services remain the most active sectors, making up 73% of active requirements in the market as at the end of Q3 2023.
Businesses continue to encourage workers to return to the office, with an increasing number of firms revising their working from home policies. Occupiers remain focused upon providing their employees with the optimal workplace environment and continue to seek buildings with the highest levels of amenity, connectivity, service and sustainability, which align to the characteristics of our existing portfolio and is a trend we can continue to capitalise on through our development pipeline.
New build vacancy rates continue to remain at low levels at 1.6%, comparing favourably to an overall vacancy rate of 9.6% (4.0% above the 10 year average). This shortage is translating into tenants' willingness to pay increasing rents for "best-in-class" accommodation. JLL has seen 49% of all H1 2023 letting deals completed at or above the prime rent, against a long term average of 30% and CBRE forecast annualised rental growth of 4-5% for central London over the next five years.
Development Pipeline
CBRE reports 3.9 million sq ft of developments and major refurbishments completed in the first nine months of the year, marginally higher than the comparable periods over the last two years. In addition, there is around 13.7m sq ft of space under construction across central London, with 39% of this space already let or under offer, further illustrating the strength of demand for new space.
Recent sustained construction cost inflation, driven by strong demand, supply chain disruption, tight labour markets and volatile energy costs seem to be moderating, but when coupled with interest rate rises, the viability of development remains challenging.
We continue to expect a clear medium term demand/supply imbalance for "best-in-class" space of which we will look to take advantage. For many, however, the market conditions mean new starts will be paused until it is evident there is sufficient rental growth to support viable returns.
The challenging planning environment also continues to elongate development timelines and limit the future pipeline of new development stock. Occupiers continue to require newly developed or refurbished offices that are well located and have good amenities; this will exacerbate the scarcity. The opportunity to work with TfL to develop a portfolio of new consented schemes adjacent to key transport infrastructure provides the opportunity to seize upon these trends by delivering new "best-in-class" space into supply constrained sub-markets.
Sustainability requirements will also continue to drive redevelopment with around 75% of central London space currently below an EPC B rating, meaning there will be significant works required to upgrade the existing unsustainable buildings. Many assets with upcoming lease events face obsolescence and owners will be required to invest considerable capital to bring these assets back to the market to the appropriate standard.
Conclusion
Our portfolio focuses on "best-in-class", sustainable buildings and our extensive development pipeline ensures that we are well placed to outperform the market in the current environment. Furthermore, Helical has the necessary expertise and established track record to take advantage of the opportunities that we expect to emerge in the future, partnering with land owners to minimise equity and maximise returns.
Sustainability and Net Zero Carbon
We continue to make good progress against the targets we set out in our sustainability strategy "Built for the Future" and our aim to become a net zero carbon business by 2030. With a pipeline of new developments and major refurbishments, we are continuing to challenge carbon emissions across these projects with the aspiration of meeting our embodied carbon target of 600kgco(2) e/m(2) and energy intensity target of 90kWh/m(2) .
For GRESB, we have again been ranked the number one company in the UK Office Listed sector, scoring 87% and receiving a 4 Star rating in the annual sustainability performance index for our standing investment properties. Alongside this, we received a score of 92% for our development activities resulting in a 4 Star rating. This downgrade from the prior year reflects the application of more onerous criteria and we have identified where improvements can be made for the future.
For our sustainability reporting, we received a Gold Award for the third consecutive year from EPRA's Sustainability Best Practice Recommendations (sBPR). The EPRA sBPR is intended to raise the standards and consistency of sustainability reporting for listed real estate companies across Europe.
Our portfolio is well placed in terms of energy efficiency, with 99% of our assets (by value) already compliant with the proposed legislative requirement that all rented commercial buildings achieve a minimum EPC rating of B by 2030. Research has highlighted that c.75% of current office stock in London has an EPC C or below, with significant capital outlay likely to be required to take non-compliant buildings up to the minimum standard. In addition to strong EPC ratings, 99% of our assets (by value) hold a BREEAM certification, with 88% being "Outstanding" or "Excellent" (excluding 100 New Bridge Street, EC4, which is to be refurbished).
Furthermore, in partnership with Places for London, TfL's commercial property company, we will deliver market leading buildings with exemplary ESG credentials, including BREEAM, NABERS and WELL certifications. It is intended that all sites will be developed on a net zero carbon basis and promote circular economy principles, operating to the highest efficiency with the aid of all-electric solutions and on-site renewables, as well as promoting health and wellbeing.
Helical's Property Portfolio - 30 September 2023
Property Overview
Helical's "best-in-class" portfolio comprises income-producing multi-let offices, refurbishments and developments across central London. We have a development pipeline of 790,000 sq ft of consented schemes following the establishment of our strategic joint venture with TfL's commercial property company, Places for London. Our portfolio is focused on areas of central London where we see strong tenant demand and growth potential for our amenity rich, technologically advanced and highly sustainable office schemes.
The Platinum Portfolio
On 11 July 2023, contracts were signed confirming Helical as Places for London's commercial office joint venture partner. This long term partnership will see the delivery of new high-quality and sustainable office space above key transport hubs. At inception, the joint venture consists of three new commercial office development opportunities, namely:
Bank OSD, EC4
Located above the recently opened Bank Station entrance on Cannon Street, this eight storey office development will deliver 142,000 sq ft NIA over seven office floors, with typical floorplates of 22,500 sq ft and 7,653 sq ft of terracing over three floors. We are looking to make minor changes to the existing permission to enhance the arrival facilities and amenity and incorporate a shared space on Abchurch Lane. A start on site is envisaged in October 2024.
Southwark OSD, SE1
Located above Southwark Station, the scheme has consent for a 222,000 sq ft NIA office building over 17 storeys. Feasibility studies are underway, looking at alternative approaches for the site's development. It is to be drawn down in July 2025 and it is expected that any revision to the planning permission will be obtained by then.
Paddington OSD, W2
The 235,000 sq ft NIA scheme is to be built over the canal level eastern entrance to Paddington Station, opposite the Brunel Building. Planning permission was granted in 2015 for the 19 storey building with 15 floors of office accommodation and we are looking at making minor changes to this consent in order to provide a visually striking, "best-in-class" scheme with enhanced amenities and terracing. The site drawdown is scheduled for January 2026.
The JJ Mack Building, EC1
Our most recently completed office development, The JJ Mack Building, is one of London's smartest and most sustainable new office buildings. The 206,050 sq ft office building was developed in a joint venture with AshbyCapital.
The sixth and seventh floors, comprising 37,880 sq ft, are let to Partners Group, a leading global private markets firm, for their new London office and they are progressing their fit-out works with the aim of taking occupation in Q1 2024.
Subsequent to the Period end, we completed a letting of the ninth floor, comprising 13,408 sq ft, to Corio Generation, a subsidiary of Macquarie Group. In addition, the first, second and third floors are under offer and due to formally sign in early December.
The building is situated just 150m from Farringdon Station and the Elizabeth Line, providing occupiers with unparalleled connectivity. Its construction has utilised design, technology and operational practices that have created a market leading sustainable property. This commitment to sustainability has been recognised by a BREEAM 2018 New Construction "Outstanding" rating at design stage which is currently being certified, an EPC A rating and an anticipated NABERS 5 Star rating. It also provides a technologically pioneering environment for occupiers with smart building systems and a fully integrated building management app for tenants.
100 New Bridge Street, EC4
We received planning approval from The City of London in June 2023 for our next "best-in-class" office development, located adjacent to City Thameslink and a short walk from Farringdon and Blackfriars stations. Two new floors will be added to the building, increasing the net internal area from 167,026 sq ft to 194,000 sq ft. The main construction contract and development financing facility are being finalised so that we can be ready to start construction in early 2024.
The major refurbishment will achieve the highest standards of sustainability through the retention of the existing structure and the reuse of materials where possible. Three facades will be reclad to significantly increase the thermal performance of the building and the building systems will be replaced with the latest technology to provide the best operational energy efficiency. The new building will provide high-quality tenant amenities, including extensive cycle parking, changing facilities and extensive outside space to create a new "best-in-class" office building.
The Bower, EC1
The Bower comprises 312,573 sq ft of innovative, high quality office space along with 21,059 sq ft of restaurant and retail space. The estate is located adjacent to the Old Street roundabout which has been undergoing significant works that are due to complete in early 2024, providing extensive additional public realm to occupiers.
The Warehouse and The Studio
The Warehouse and The Studio comprise 141,141 sq ft of fully-let office space. In addition, there is 10,298 sq ft of retail space across the buildings with these units also being fully let following two lettings in the Period to a restaurant operator and a hair and beauty studio.
The Tower
The Tower offers 171,432 sq ft of office space with a contemporary façade and innovatively designed interconnecting floors, along with 10,761 sq ft of retail space across two units, let to food and beverage operators Serata Hall and Wagamama.
In the Period, we have extended the lease on the 17(th) floor with Verkada by 10 years and facilitated their expansion into the 16(th) floor. The 14(th) floor is now under offer to Incubeta who are relocating from the 16(th) floor. These asset management initiatives extend the WAULT across 32,201 sq ft and achieve rents at a premium to the March 2023 ERVs.
On 27 October 2023, following non-payment of rent for the September quarter, we exercised our right to forfeit the individual leases for six floors let to WeWork. Subsequently, we entered into a short-term licence arrangement with them, to re-occupy the space, following Helical's receipt of a fee equivalent to the whole of the September quarter's rent and service charge due under the terms of the previous contractual arrangements.
Barts Square, EC1
In the Period, we completed the sale of the last residential unit thereby ending our involvement in the residential elements of the scheme.
The retail component has nine units, with a variety of occupiers including Michelin-Starred Restaurant St Barts, Lap Bikes, MyLuthier and Athletic Fitness. One unit has become available in the Period, with an additional unit under offer to Italian Taste as at 30 September 2023. Since the Period end, we have sold the long leasehold interest in the retail units for their book value of GBP7m. This was our last remaining interest in Barts Square.
This enables us to conclude our joint venture with Baupost which started in 2011. This joint venture built 235 apartments, three office buildings totalling 249,000 sq ft and 21,000 sq ft of retail across 10 units. Through outperformance, we increased our share of profit from our 33% equity participation to 44% and made a total profit of GBP41m with a 26% IRR.
The Loom, E1
This former Victorian wool warehouse offers 108,555 sq ft of office space and we continue with our active management approach to this asset, with vacancy currently at 37%. Whilst 16,009 sq ft became vacant during the Period, we have completed three new lettings, totalling 7,443 sq ft, in line with March 2023 ERVs.
25 Charterhouse Square, EC1
25 Charterhouse Square comprises 42,921 sq ft of offices adjacent to the newly operational Farringdon East Elizabeth Line station, overlooking the historic Charterhouse Square. The building is 85% let with the fourth floor available following a comprehensive refurbishment.
The Power House, W4
The Power House is a listed building, providing 21,268 sq ft of office and recording studio space, on Chiswick High Road and is fully let on a long lease to Metropolis Music Group.
Portfolio Analytics
See-through Total Portfolio by Fair Value
Investment Development Total
GBPm % GBPm % GBPm %
------------------------- ---------- ----- ----------- ----- ----- -----
London Offices
- Completed properties 626.4 84.0 - 0.0 626.4 84.0
- Development pipeline 119.0 16.0 - 0.0 119.0 16.0
Total London Core 745.4 100.0 - 0.0 745.4 100.0
Other 0.2 0.0 0.3 100.0 0.5 0.0
-------------------------
Total Non-Core Portfolio 0.2 0.0 0.3 100.0 0.5 0.0
------------------------- ---------- ----- ----------- ----- ----- -----
Total 745.6 100.0 0.3 100.0 745.9 100.0
------------------------- ---------- ----- ----------- ----- ----- -----
See-through Land and Development Portfolio
Book value Fair value Surplus Fair value
GBPm GBPm GBPm %
---------------------- ---------- ---------- ------- ----------
Land and developments 0.0 0.3 0.3 100.0
----------------------
Total 0.0 0.3 0.3 100.0
---------------------- ---------- ---------- ------- ----------
Capital Expenditure
We have a committed and planned development and refurbishment programme.
Capex Remaining Total
budget spend New completed
(Helical share) (Helical share) Pre-redeveloped space space space Commencement
Property GBPm GBPm sq ft sq ft sq ft date
------------------------ ---------------- ---------------- --------------------- ------- ---------- ------------
Investment - committed
site acquisitions
- Bank OSD, EC4 32.9 32.9 - 142,000 142,000 Q4 2024
- Southwark OSD, SE1 11.0 11.0 - 222,000 222,000 Q4 2025
- Paddington OSD, W2 30.2 30.2 - 235,000 235,000 Q2 2026
Investment - planned
capital expenditure
- 100 New Bridge Street,
EC4 134.9 120.6 167,026 26,974 194,000 Q1 2024
- Bank OSD, EC4 59.3 59.3 - 142,000 142,000 Q4 2024
- Southwark OSD, SE1 123.9 123.9 - 222,000 222,000 Q4 2025
- Paddington OSD, W2 123.2 123.2 - 235,000 235,000 Q2 2026
------------------------ ---------------- ---------------- --------------------- ------- ---------- ------------
Asset Management
Asset management is a critical component in driving Helical's performance. Through having well considered business plans and maximising the combined skills of our management team, we are able to create value in our assets.
Fair
value Passing ERV change
weighting rent Contracted rent ERV like-for-like
Investment portfolio % GBPm % GBPm % GBPm % %
----------------------- ---------- ------- ----- --------------- ----- ----- ----- --------------
London Offices
- Completed properties 84.0 26.6 78.8 30.9(1) 81.2 43.6 71.0 0.3
- Development pipeline 16.0 7.1 21.1 7.1(2) 18.7 17.8 28.9 5.6
Total London 100.0 33.7 99.9 38.0 99.9 61.4 99.9 1.8
Other 0.0 0.0 0.1 0.0 0.1 0.1 0.1 0.0
----------------------- ---------- ------- ----- --------------- ----- ----- ----- --------------
Total 100.0 33.7 100.0 38.0 100.0 61.5 100.0 1.8
----------------------- ---------- ------- ----- --------------- ----- ----- ----- --------------
(1) Following the forfeiture of the leases to WeWork at The Bower, EC1 post Period end, the contracted rent reduced to GBP26.9m.
(2) In accordance with the business plan to redevelop 100 New Bridge Street, EC4 the Baker McKenzie lease will terminate on 31 December 2023, reducing the contracted rent by GBP7.1m.
See-through
total portfolio contracted rent
GBPm
------------------------------------------- --------------------------------
Rent lost at break/expiry (1.7)
Rent reviews and uplifts on lease renewals 0.1
New lettings 0.6
------------------------------------------- --------------------------------
Net decrease in the period (1.0)(1)
------------------------------------------- --------------------------------
(1) Following the forfeiture of the leases to WeWork at The Bower, EC1 post Period end, the contracted rent reduced by a further GBP4.0m.
Investment Portfolio
Valuation Movements
Investment portfolio Investment portfolio
Valuation weighting weighting
change 30 September 2023 31 March 2023
% % %
----------------------- --------- -------------------- --------------------
London Offices
- Completed properties (10.6) 84.0 83.4
- Development pipeline (17.7) 16.0 16.6
----------------------- --------- -------------------- --------------------
Total (11.8) 100.0 100.0
----------------------- --------- -------------------- --------------------
Portfolio Yields
EPRA topped EPRA topped Reversionary Reversionary
up NIY up NIY yield yield True equivalent yield True equivalent yield
30 September 31 March 30 September 31 March 30 September 31 March
2023 2023 2023 2023 2023 2023
% % % % % %
------------ -------------- ------------ -------------- ------------- ---------------------- ----------------------
London
Offices
- Completed
properties 4.0 4.1 6.3 5.7 6.0 5.6
-
Development
pipeline 1.4 3.6 5.7 5.1 5.4 4.9
------------ -------------- ------------ -------------- ------------- ---------------------- ----------------------
Total 3.5 4.0 6.1 5.5 5.9 5.4
------------ -------------- ------------ -------------- ------------- ---------------------- ----------------------
See-through Capital Values, Vacancy Rates and Unexpired Lease Terms
Capital value Capital value Vacancy rate Vacancy rate WAULT WAULT
30 September 31 March 30 September 31 March 30 September 31 March
2023 2023 2023 2023 2023 2023
GBP psf GBP psf % % Years Years
----------------------- -------------- -------------- -------------- ------------- -------------- ----------
London Offices
- Completed properties 1,058 1,166 22.8 19.8 5.6 5.8
- Development pipeline 712 835 2.6 2.6 0.2 0.7
----------------------- -------------- -------------- -------------- ------------- -------------- ----------
Total 994 1,104 18.5(1) 16.1 4.6(2) 5.0
----------------------- -------------- -------------- -------------- ------------- -------------- ----------
(1) Vacancy rate increases to 26.0% following the forfeiture of the WeWork leases.
(2) Total WAULT falls to 3.2 years following the forfeiture of the WeWork leases.
See-through Lease Expiries or Tenant Break Options
Half year to Year to Year to Year to Year to 2028
2024 2025 2026 2027 2028 onward
----------------------------- ------------ ------- ------- ------- ------- -------
% of rent roll 25.7 13.1 3.3 13.5 32.8 11.7
Number of leases 18 15 8 10 14 16
Average rent per lease (GBP) 439,953 268,980 126,469 414,517 722,555 224,462
----------------------------- ------------ ------- ------- ------- ------- -------
Includes impact of the forfeiture of the WeWork leases and the expiry of the lease to Baker McKenzie on 31 December 2023.
Top 15 Tenants
At 30 September 2023, the top 15 tenants account for 81.6% of the total rent roll.
Contracted rent Rent roll
Rank Tenant Tenant industry GBPm %
------ ---------------- ------------------ --------------- ---------
1 Baker McKenzie* Legal services 7.0 18.4
2 Farfetch Online retail 4.3 11.4
3 WeWork* Flexible offices 4.0 10.5
4 Brilliant Basics Technology 2.4 6.2
5 VMware Technology 2.2 5.7
6 Partner Group Financial Services 1.9 5.0
7 Anomaly Marketing 1.5 3.9
8 Viacom Technology 1.2 3.1
9 Allegis Media 1.1 2.8
10 Denstu Marketing 1.1 2.8
11 Stripe Financial services 1.0 2.6
12 Verkada Technology 1.0 2.5
13 Incubeta Marketing 0.9 2.4
14 Openpayd Financial services 0.9 2.3
15 Stenn Technology 0.8 2.0
Total 31.3 81.6
------------------------ ------------------ --------------- ---------
* Leases expire on or before 31 December 2023.
Letting Activity - New Leases Completed During the Period
Change to
31 March 2023 ERV
Contracted rent (exc Plug and Play and Average
Area (Helical's share) Rent managed lettings) lease term to expiry
sq ft GBP GBP psf % Years
---------------------------- ------ ------------------ -------- --------------------------- ---------------------
Investment Properties
London Offices
- The Loom, E1 7,443 446,803 60.03 0.1 4.0
------ ------------------ -------- --------------------------- ---------------------
London Offices Total 7,443 446,803 60.03 0.1 4.0
London Retail
- The Warehouse, The Bower,
EC1 2,938 130,000 44.25 (3.7) 5.0
---------------------------- ------ ------------------ -------- --------------------------- ---------------------
London Retail Total 2,938 130,000 44.25 (3.7) 5.0
Total 10,381 576,803 55.56 (2.1) 4.2
---------------------------- ------ ------------------ -------- --------------------------- ---------------------
Financial Review
IFRS Performance EPRA Performance
Loss after tax EPRA profit
GBP93.1m (2022: profit of GBP1.4m (2022: GBP5.8m)
GBP17.2m)
Loss per share (EPS) EPRA EPS
75.8p (2022: earnings of 1.1p (2022: 4.8p)
14.1p)
Diluted NAV per share EPRA NTA per share
409p (31 March 2023: 489p) 409p (31 March 2023: 493p)
Total Accounting Return Total Accounting Return on
-15.9% (2022: 2.3%) EPRA NTA
-16.6% (2022: -2.5%)
----------------------------
Overview
Against a challenging backdrop, the results for the half year reflect the outward yield shift experienced across the office sector through investment property valuation losses, coupled with the effect on net rental income of the forfeiture of the WeWork leases. This impact was partially offset by reductions in administrative costs (excluding performance related awards) and finance costs. The rise in interest rates during the Period has resulted in a small gain on the fair value of derivatives, which continue to protect the Company against the current high level of interest rates.
Results for the Period
The IFRS loss for the Period of GBP93.1m (2022: profit of GBP17.2m) includes revenue from rental income, service charges and development management fees of GBP19.2m, offset by direct costs of GBP7.8m to give a net property income of GBP11.4m (2022: GBP18.8m). Other income of GBP0.9m (2022: GBPnil), from the sub-letting of part of the Company's head office, was recognised in the Period. There was a net loss on sale and revaluation of investment properties of GBP93.4m (2022: GBP30.4m) and the loss from joint venture activities was GBP4.5m (2022: gain of GBP15.1m). Administration expenses of GBP5.6m (2022: GBP5.6m) and net finance costs of GBP4.0m (2022: GBP7.3m), were offset by a gain in the fair value of derivatives of GBP2.1m (2022: GBP26.6m).
The Group holds a significant proportion of its property assets in joint ventures. As the risk and rewards of ownership of these underlying properties are the same as those it wholly owns, Helical supplements its IFRS disclosure with a "see-through" analysis of alternative performance measures, which looks through the structure to show the Group's share of the underlying business.
The see-through results for the Period to 30 September 2023 include net rental income of GBP12.4m, a net loss on sale and revaluation of the investment portfolio of GBP96.7m and development losses of GBP0.5m, leading to a Total Property Return of -GBP84.8m (2022: GBP4.0m). Other income of GBP0.9m less total see-through administration costs of GBP5.8m (2022: GBP6.0m) and see-through net finance costs of GBP5.6m (2022: GBP7.2m) plus see-through gains from the mark-to-market valuation of derivative financial instruments of GBP2.1m (2022: GBP26.6m) contributed to an IFRS loss of GBP93.1m (2022: profit of GBP17.2m).
The interim dividend, payable on 12 January 2024, will be 3.05p per share (2022: 3.05p), unchanged from last year.
The EPRA net tangible asset value per share decreased by 17% to 409p (31 March 2023: 493p).
The Group's investment portfolio, including its share of assets held in joint ventures, decreased to GBP745.6m (31 March 2023: GBP839.5m) primarily due to the net loss on revaluation of the investment portfolio of GBP96.7m after lease incentives of GBP3.5m, offset by capital expenditure on the investment portfolio of GBP6.3m.
The Group's see-through loan to value at 30 September 2023 was 33.5% (31 March 2023: 27.5%). The Group's weighted average cost of debt at 30 September 2023 was 3.3% (31 March 2023: 3.4%) and the weighted average debt maturity was 2.4 years (31 March 2023: 2.9 years).
At 30 September 2023, the Group had unutilised bank facilities of GBP187.5m and cash of GBP39.2m on a see-through basis. These are primarily available to fund future property acquisitions and capital expenditure.
Total Property Return
We calculate our Total Property Return to enable us to assess the aggregate of income and capital profits made each period from our property activities. Our business is primarily aimed at producing surpluses in the value of our assets through asset management and development, with the income side of the business seeking to cover our annual administration and finance costs.
Half year Half year
to to
2023 2022
GBPm GBPm
---------------------- --------- ---------
Total Property Return (84.8) 4.0
---------------------- --------- ---------
Total Accounting Return
Total Accounting Return is the growth in the net asset value of the Group plus dividends paid in the Period, expressed as a percentage of the net asset value at the beginning of the Period. The metric measures the growth in Shareholders' Funds in each period and is expressed as an absolute percentage.
Half year to Half year to
2023 2022
% %
------------------------------------------- ------------- ------------
Total Accounting Return on IFRS net assets (15.9) 2.3
------------------------------------------- ------------- ------------
Total Accounting Return on EPRA net tangible assets is the growth in the EPRA net tangible asset value of the Group plus dividends paid in the period, expressed as a percentage of the EPRA net tangible asset value at the beginning of the period.
Half year to Half year to
2023 2022
% %
---------------------------------------------------- ------------- ------------
Total Accounting Return on EPRA net tangible assets (16.6) (2.5)
---------------------------------------------------- ------------- ------------
Earnings/(Loss) Per Share
The IFRS earnings/(loss) per share decreased from earnings of 14.1p to a loss of 75.8p and is based on the after tax (loss)/earnings attributable to ordinary Shareholders divided by the weighted average number of shares in issue during the Period.
On an EPRA basis, the earnings per share is 1.1p compared to 4.8p in 2022, reflecting a decrease in the Group's share of net rental income to GBP12.4m (2022: GBP18.2m) plus development losses of GBP0.5m (2022: profit of GBP0.9m), but excluding losses on sale and revaluation of Investment properties of GBP96.7m (2022: GBP15.1m).
Net Asset Value
IFRS diluted net asset value per share decreased to 409p per share (31 March 2023: 489p) and is a measure of Shareholders' Funds divided by the number of shares in issue at the Period end, adjusted to allow for the effect of all dilutive share awards.
EPRA net tangible asset value per share decreased to 409p per share (31 March 2023: 493p). This
movement arose principally from a total comprehensive expense (retained losses) of GBP93.1m (2023:
GBP64.5m), less GBP9.5m of dividends (2023: GBP13.8m).
EPRA net disposal value per share decreased by 16.5% to 409p per share (31 March 2023: 490p).
Income Statement
Rental Income and Property Overheads
Gross rental income for the Group in respect of wholly owned properties decreased to GBP12.8m (2022: GBP19.2m), with gross rents in joint ventures increasing to GBP0.9m (2022: GBP0.3m). Property overheads in respect of wholly owned assets and in respect of those assets in joint ventures remained at GBP1.3m (2022: GBP1.3m). Overall, see-through net rents decreased to GBP12.4m (2022: GBP18.2m).
Included within gross rental income is a reduction of GBP4.3m (30 September 2022: addition of GBP2.5m, 31 March 2023: addition of GBP1.7m) of accrued income for rent free periods including an adjustment of GBP2.9m relating to the forfeited leases to WeWork.
The table below demonstrates the movement of the see-through accrued income balance for rent free periods granted and the respective rental income adjustment over the period to 31 March 2027, based on the tenant leases as at 30 September 2023. The actual adjustment will vary depending on lease events such as new lettings and early terminations and future acquisitions or disposals.
Accrued
income Adjustment to rental income
GBP000 GBP000
-------------------------- ------- ---------------------------
6 months to 31 March 2024 10,678 (68)
Year to 31 March 2025 10,610 (328)
Year to 31 March 2026 10,282 (2,188)
Year to 31 March 2027 8,094 (2,125)
-------------------------- ------- ---------------------------
Rent Collection
March 2023 - September
2023
quarters
%
------------------------ ----------------------
Rent collected to date 98.8
Rent under payment plan 0.8
Rent under discussion 0.4
------------------------ ----------------------
At 22 November 2023, the Group had collected 98.8% of all rent contracted and payable for the March, June and September 2023 quarters.
Development Profits
During the Period, a profit of GBP0.6m on a legacy retail scheme at East Ham and a close out payment for the site at Kingswinford of GBP0.1m were recognised. These were offset by a write back of the expected development management fee at The JJ Mack Building, EC1 of GBP1.2m, recognised in previous periods, which led to a net development loss of GBP0.5m (2022: profit of GBP0.9m).
Share of Results of Joint Ventures
The revaluation of our Investment properties held in joint ventures generated a deficit of GBP3.3m (2022: surplus of GBP15.3m). A profit of GBP0.1m (2022: profit of GBP0.2m) was recognised in respect of the final apartment sale at our Barts Square, EC1 residential development. Net rental income of GBP0.5m (2022: GBP0.1m) was recognised.
Finance, administration and other sundry costs totalling GBP1.8m (2022: GBP0.3m) were incurred and after a tax charge of GBPnil (2022: GBP0.1m), there was a net loss from our joint ventures of GBP4.5m (2022: profit of GBP15.1m).
Loss on Sale and Revaluation of Investment Properties
The loss on valuation of our investment portfolio on a see-through basis resulted in an overall loss on sale and revaluation, including in joint ventures, of GBP96.7m (2022: GBP15.1m).
Administrative Expenses
Administration costs in the Group, before performance related awards, decreased by 12.5% from GBP5.3m to GBP4.7m.
Performance related share awards and bonus payments, before National Insurance costs, increased to GBP0.8m (2022: GBP0.2m). Of this amount, GBP0.7m (2022: GBP0.1m), being the charge for share awards under the Performance Share Plan, which, currently are not expected to vest, is expensed through the Income Statement but added back to Shareholders' Funds through the Statement of Changes in Equity.
2023 2022
GBP000 GBP000
--------------------------------------------------------------- ------- -------
Administrative expenses (excluding performance related awards) 4,655 5,323
Performance related awards 793 220
NIC 122 41
Group 5,570 5,584
In joint ventures 188 452
--------------------------------------------------------------- ------- -------
Total 5,758 6,036
--------------------------------------------------------------- ------- -------
Finance Costs, Finance Income and Change in Fair Value of Derivative Financial Instruments
Net finance costs excluding changes in the fair value of derivative financial instruments, including in joint ventures, reduced to GBP5.6m (2022: GBP7.2m).
2023 2022
Group GBP000 GBP000
------------------------------------------------------------------------------------------------- ------- -------
Interest payable on secured bank loans (2,878) (5,214)
Other interest payable and similar charges (1,487) (2,056)
Total interest payable before cancellation of loans (4,365) (7,270)
Cancellation of loans - (132)
-------------------------------------------------------------------------------------------------- ------- -------
Total finance costs (4,365) (7,402)
Finance income 328 96
-------------------------------------------------------------------------------------------------- ------- -------
Net finance costs (4,037) (7,306)
Change in fair value of derivative financial instruments 2,098 26,564
-------------------------------------------------------------------------------------------------- ------- -------
Finance costs, net of finance income and change in fair value of derivative financial instruments (1,939) 19,258
-------------------------------------------------------------------------------------------------- ------- -------
Joint Venture
------------------------------------------------------------------------------------------------- ------- -------
Interest payable on secured bank loans (1,502) (1,619)
Other interest payable and similar charges (104) (101)
Interest capitalised - 1,815
Total finance costs (1,606) 95
Finance income 18 6
-------------------------------------------------------------------------------------------------- ------- -------
Finance costs, finance income and change in fair value of derivative financial instruments (1,588) 101
-------------------------------------------------------------------------------------------------- ------- -------
Total finance costs, net of finance income (5,625) (7,205)
-------------------------------------------------------------------------------------------------- ------- -------
Total finance costs, net of finance income and change in fair value of derivative financial
instruments (3,527) 19,359
-------------------------------------------------------------------------------------------------- ------- -------
The movement upwards in medium and long-term interest rate projections during the Period contributed to a gain of GBP2.1m (2022: GBP26.6m) on the mark-to-market valuation of the derivative financial instruments.
Taxation
The Group elected to become a REIT, effective from 1 April 2022, and is now exempt from UK corporation tax on the profits/(losses) of its property activities that fall within the REIT regime. Helical will continue to pay corporation tax on its profits/(losses) that are not within this regime.
As a consequence, the tax charge for the Period was GBPnil (2022: GBPnil).
Dividends
The Board has declared an interim dividend for the Period of 3.05p per share, the same level as in 2022. This dividend is to be paid out of EPRA earnings and accumulated realised capital profits. The Property Income Distribution ("PID") for the Period will be 0.5p, with the balance of 2.55p representing an additional ordinary dividend.
Balance Sheet
Shareholders' Funds
Shareholders' Funds at 31 March 2023 were GBP608.7m. The Group's loss for the Period, representing the total comprehensive expense for the Period, reduced funds by GBP93.1m (2022: increased by profit of GBP17.2m). Movements in reserves arising from the Group's share schemes decreased funds by GBP3.8m. The Company paid dividends to Shareholders during the Period of GBP9.5m. The net decrease in Shareholders' Funds from Group activities during the Period was GBP106.4m to GBP502.3m.
Investment Portfolio
Head
Wholly In joint leases Lease Book
owned venture See-through capitalised incentives value
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------------- ----------------- -------- -------- ----------- ------------ ----------- --------
Valuation at 31 March 2023 693,550 145,975 839,525 6,481 (14,172) 831,834
- wholly
Capital expenditure owned 6,822 - 6,822 (8) - 6,814
- joint ventures - (558) (558) (15) - (573)
- wholly
Letting costs amortised owned (56) - (56) - - (56)
- joint ventures - (12) (12) - - (12)
- wholly
Revaluation (deficit)/surplus owned (97,666) - (97,666) - 4,299 (93,367)
- joint ventures - (2,505) (2,505) - (804) (3,309)
Valuation at 30 September
2023 602,650 142,900 745,550 6,458 (10,677) 741,331
------------------------------------------------ -------- -------- ----------- ------------ ----------- --------
The Group expended GBP6.8m on capital works across the investment portfolio, at 100 New Bridge Street, EC4 (GBP5.1m), The Bower, EC1 (GBP0.6m), The Loom, E1 (GBP0.6m), and The Power House, W4 (GBP0.5m). These costs were partially offset by a reversal of costs at The JJ Mack Building, EC1 of GBP0.5m.
Revaluation losses resulted in a GBP100.2m decrease in the see-through fair value of the portfolio, before lease incentives, to GBP745.6m (31 March 2023: GBP839.5m). The accounting for head leases and lease incentives resulted in a book value of the see-through investment portfolio of GBP741.3m (31 March 2023: GBP831.8m).
Debt and Financial Risk
In total, the see-through outstanding debt at 30 September 2023 of GBP292.4m (31 March 2023: GBP290.4m) had a weighted average interest cost of 3.3% (31 March 2023: 3.4%) and a weighted average debt maturity of 2.4 years (31 March 2023: 2.9 years).
Debt Profile at 30 September 2023 - Including Commitment Fees but Excluding the Amortisation of Arrangement Fees
Total Total Available Weighted average interest Average maturity of
facility utilised facility rate borrowings
GBP000s GBP000s GBP000s % Years
--------------------------- --------- --------- --------- --------------------------- ---------------------------
GBP400m Revolving Credit
Facility 400,000 230,000 170,000 3.0 2.8
Total wholly owned 400,000 230,000 170,000 3.0 2.8
In joint ventures 69,900 62,366 7,534 4.2 0.8
--------------------------- --------- --------- --------- --------------------------- ---------------------------
Total secured debt 469,900 292,366 177,534 3.3 2.4
Working capital 10,000 - 10,000 - -
--------------------------- --------- --------- --------- --------------------------- ---------------------------
Total unsecured debt 10,000 - 10,000 - -
--------------------------- --------- --------- --------- --------------------------- ---------------------------
Total debt 479,900 292,366 187,534 3.3 2.4
--------------------------- --------- --------- --------- --------------------------- ---------------------------
Secured Debt
The Group arranges its secured investment and development facilities to suit its business needs as follows:
- GBP400m Revolving Credit Facility
The Group has a GBP400m Revolving Credit Facility in which all of its wholly owned investment assets are secured. The value of the Group's properties secured in this facility at 30 September 2023 was GBP603m (31 March 2023: GBP693m) with a corresponding loan to value of 38.2% (31 March 2023: 33.2%). The average maturity of the facility at 30 September 2023 was 2.8 years (31 March 2023: 3.3 years) with a weighted average interest rate of 3.0% (31 March 2023: 3.1%).
- Joint Venture Facilities
Where the Group holds investment and development properties in joint venture with third parties it includes its share, in proportion to its 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 2023 was 0.8 years (31 March 2023: 1.3 years) with a weighted average interest rate of 4.2% (31 March 2023: 4.2%). The average interest rate will fall as The JJ Mack Building, EC1 development facility is drawn down and would be 4.00% on a fully utilised basis, reducing to 2.25% once the building is let. There is a one-year extension option in this facility.
Unsecured Debt
The Group's unsecured debt is GBPnil (31 March 2023: GBPnil).
Cash and Cash Flow
At 30 September 2023, the Group had GBP17.5m (31 March 2023: GBP28.2m) of cash deposits available to deploy without restrictions, GBP7.7m (31 March 2023: GBP9.1m) of rent deposits from tenants and a further GBP14.0m (31 March 2023: GBP17.4m) of rent in bank accounts available to service payments under loan agreements, cash held at managing agents and cash held in joint ventures. Furthermore, the Group had GBP187.5m (31 March 2023: GBP189.5m) of loan facilities available to fund future acquisitions.
Net Borrowings and Gearing
Total gross borrowings of the Group, including in joint ventures, have slightly increased from GBP290.4m to GBP292.4m during the Period to 30 September 2023. After deducting cash balances of GBP39.2m (31 March 2023: GBP54.7m) and unamortised refinancing costs of GBP3.6m (31 March 2023: GBP4.3m), net borrowings increased from GBP231.4m to GBP249.6m. The see-through net gearing of the Group, including in joint ventures, increased from 38.0% to 49.7%.
30 September 31 March
2023 2023
------------------------------------------- ------------ ---------
See-through gross borrowings GBP292.4m GBP290.4m
See-through cash balances GBP39.2m GBP54.7m
Unamortised refinancing costs GBP3.6m GBP4.3m
See-through net borrowings GBP249.6m GBP231.4m
Shareholders' funds GBP502.3m GBP608.7m
See-through gearing - IFRS net asset value 49.7% 38.0%
------------------------------------------- ------------ ---------
Hedging
At 30 September 2023, the Group had GBP230.0m (31 March 2023: GBP230.0m) of borrowings protected by interest rate swaps, with an average effective interest rate of 2.5% (31 March 2023: 2.6%) and average maturity of 2.8 years. The Group had no floating rate debt (31 March 2023: GBPnil). In our joint ventures, the Group's share of fixed rate debt was GBP62.4m (31 March 2023: GBP60.4m) at 0.5% plus margin with an effective rate at 31 March 2023 of 4.2% and no floating rate debt (31 March 2023: none).
30 September 31 March
2023 Effective interest rate 2023 Effective interest rate
GBPm % GBPm %
--------------------- ------------ ----------------------- -------- -----------------------
Fixed rate debt
- Secured borrowings 230.0 2.5 230.0 2.6
Total 230.0 3.0(1) 230.0 3.1 (1)
In joint ventures
- Fixed rate 62.4 4.2(2) 60.4 4.2(2) Total borrowings 292.4 3.3 290.4 3.4 --------------------- ------------ ----------------------- -------- -----------------------
(1) This includes commitment fees on undrawn facilities.
(2) This includes commitment fees on undrawn facilities. Excluding these would reduce the effective rate to 4.00% (31 March 2023: 4.00%).
Tim Murphy
Chief Financial Officer
22 November 2023
Statement of Directors' Responsibilities
We confirm that to the best of our knowledge:
a) The condensed unaudited consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting;
b) The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events and their impact during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
c) The interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).
On behalf of the Board
Tim Murphy
Chief Financial Officer
22 November 2023
Independent Review Report to Helical Plc
Conclusion
We have been engaged by Helical plc ('the Company') to review the condensed set of financial statements of the Company and its subsidiaries (the 'Group') in the half year financial report for the six months ended 30 September 2023 which comprises the unaudited consolidated income statement, unaudited consolidated balance sheet, unaudited consolidated cash flow statement, unaudited consolidated statement of changes in equity and notes to the half year results. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent material misstatements of fact or material inconsistencies with the information in the condensed set of financial statements.
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2023 is not prepared, in all material respects, in accordance with International Accounting Standard 34, "Interim Financial Reporting" as contained in UK-adopted International Accounting Standards, and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" ('ISRE (UK) 2410') issued 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 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.
As disclosed in Note 1, the annual financial statements of the Group are prepared in accordance with UK-adopted International Accounting Standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as contained in UK-adopted International Accounting Standards.
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for Conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410, however future events or conditions may cause the Group and the Company to cease to continue as a going concern.
Responsibilities of Directors
The half-yearly financial report, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with International Accounting Standard 34, "Interim Financial Reporting" as contained in UK-adopted International Accounting Standards and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible for assessing the Group's and the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the Review of the Financial Information
In reviewing the half-yearly financial report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.
Use of our Report
This report is made solely to the Company in accordance with International Standard on Review Engagements (UK) 2410 "Review of Interim Financial Information performed by the Independent Auditor of the Entity". Our review work has been undertaken so that we might state to the Company those matters we are required to state to them 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 conclusions we have formed.
RSM UK Audit LLP
Chartered Accountants
25 Farringdon Street
London
EC4A 4AB
22 November 2023
Unaudited Consolidated Income Statement
For the Half Year to 30 September 2023
Year to
Half Year to Half Year to 31 March
30 September 2023 30 September 2022 2023
Notes GBP000 GBP000 GBP000
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Revenue 3 19,224 23,461 49,848
Cost of sales 3 (7,857) (4,623) (13,567)
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Net property income 4 11,367 18,838 36,281
Share of results of joint ventures 12 (4,499) 15,101 3,494
Other income 3 905 - -
7,773 33,939 39,775
Gain on sale of Investment properties 5 - 4,606 4,564
Revaluation loss on Investment properties 11 (93,367) (34,994) (97,854)
------------------------------------------------------------ ----- ------------------ ------------------ ---------
(85,594) 3,551 (53,515)
Administrative expenses 6 (5,570) (5,584) (12,835)
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Operating loss (91,164) (2,033) (66,350)
Net finance costs and change in fair value of derivative
financial instruments 7 (1,939) 19,258 1,839
(Loss)/profit before tax (93,103) 17,225 (64,511)
Tax on (loss)/profit on ordinary activities 8 - - -
------------------------------------------------------------ ----- ------------------ ------------------ ---------
( Loss)/p rofit for the period (93,103) 17,225 (64,511)
------------------------------------------------------------ ----- ------------------ ------------------ ---------
(Loss)/earnings per share 10
Basic (75.8)p 14.1p (52.6)p
Diluted (75.8)p 14.0p (52.6)p
------------------------------------------------------------ ----- ------------------ ------------------ ---------
There were no items of comprehensive income in the current or prior periods other than the (loss)/profit for the Period and, accordingly, no Statement of Comprehensive Income is presented.
Unaudited Consolidated Balance Sheet
At 30 September 2023
At At
At 30 September 2022 31 March
30 September 2023 Restated(1) 2023
Notes GBP000 GBP000 GBP000
--------------------------------------------- ----- ------------------ ------------------ ---------
Non-current assets
Investment properties 11 595,073 738,518 681,682
Owner occupied property, plant and equipment 3,631 4,358 4,351
Investment in joint ventures 12 82,141 105,895 87,330
Other investments 13 434 306 353
D erivative financial instruments 20 25,343 36,758 23,245
Trade and other receivables 15 1,449 - -
------------------ ------------------ ---------
708,071 885,835 796,961
--------------------------------------------- ----- ------------------ ------------------ ---------
Current assets
Land and developments 14 28 2,089 28
Corporation tax receivable 7 - 7
Trade and other receivables 15 16,697 27,581 24,935
Cash and cash equivalents 16 37,040 63,348 50,925
--------------------------------------------- ----- ------------------ ------------------ ---------
53,772 93,018 75,895
--------------------------------------------- ----- ------------------ ------------------ ---------
Total assets 761,843 978,853 872,856
--------------------------------------------- ----- ------------------ ------------------ ---------
Current liabilities
Trade and other payables 17 (26,406) (33,225) (31,232)
Lease liability 18 (695) (670) (683)
Corporation tax payable - (230) -
--------------------------------------------- ----- ------------------ ------------------ ---------
(27,101) (34,125) (31,915)
--------------------------------------------- ----- ------------------ ------------------ ---------
Non-current liabilities
Borrowings 19 (227,176) (246,100) (226,677)
Lease liability 18 (5,238) (5,933) (5,589)
--------------------------------------------- ----- ------------------ ------------------ ---------
(232,414) (252,033) (232,266)
--------------------------------------------- ----- ------------------ ------------------ ---------
Total liabilities (259,515) (286,158) (264,181)
--------------------------------------------- ----- ------------------ ------------------ ---------
Net assets 502,328 692,695 608,675
--------------------------------------------- ----- ------------------ ------------------ ---------
Equity
Called-up share capital 21 1,233 1,233 1,233
Share premium account 116,619 116,619 116,619
Revaluation reserve (46,951) 109,276 46,416
Capital redemption reserve 7,743 7,743 7,743
Own shares held (1,675) (1,535) (848)
Other reserves 291 291 291
Retained earnings 425,068 459,068 437,221
--------------------------------------------- ----- ------------------ ------------------ ---------
Total equity 502,328 692,695 608,675
--------------------------------------------- ----- ------------------ ------------------ ---------
(1) Trade and other receivables and cash and cash equivalents have been restated as at 30 September 2022 following the IFRIC agenda decision in respect of demand deposits with restrictions on use arising from a contract with a third party (see Note 29).
Unaudited Consolidated Cash Flow Statement
For the Half Year to 30 September 2023
Half Year to Year to
Half Year to 30 September 2022 31 March
30 September 2023 Restated(1) 2023
GBP000 GBP000 GBP000
------------------------------------------------------------------- ------------------ ------------------ ---------
Cash flows from operating activities
(Loss)/profit before tax (93,103) 17,225 (64,511)
Adjustment for:
Depreciation 420 382 798
Revaluation deficit on Investment properties 93,367 34,994 97,854
Letting cost amortisation 56 135 200
Gain on sale of Investment properties - (4,606) (4,564)
Profit on sale of plant and equipment - - (18)
Net financing costs 4,037 7,306 10,918
Change in value of derivative financial instruments (2,098) (26,564) (12,757)
Share based payment charge 698 54 1,073
Share of results of joint ventures 4,499 (15,101) (3,494)
Gain on sublet of the Group's head office (902) - -
Cash inflows from operations before changes in working capital 6,974 13,825 25,499
Change in trade and other receivables 8,483 (6,211) (3,560)
Change in land, developments and trading properties - - 2,061
Change in trade and other payables (4,997) (11,385) (11,477)
------------------------------------------------------------------- ------------------ ------------------ ---------
Cash inflows/(outflows) generated from operations 10,460 (3,771) 12,523
------------------------------------------------------------------- ------------------ ------------------ ---------
Finance costs (3,698) (6,952) (12,361)
Finance income 328 96 274
Tax received - 568 331
------------------------------------------------------------------- ------------------ ------------------ ---------
(3,370) (6,288) (11,756)
------------------------------------------------------------------- ------------------ ------------------ ---------
N et cash generated from/(used by) operating activities 7,090 (10,059) 767
------------------------------------------------------------------- ------------------ ------------------ ---------
Cash flows from investing activities
Additions to Investment property (6,814) (4,420) (10,509)
Purchase of other investments (81) - (47)
Net proceeds from sale of Investment property - 186,583 186,541
(Investments)/return from investments in joint ventures and
subsidiaries (1,375) 3,323 3,323
Dividends from joint ventures 2,066 6,488 13,446 Sale of plant and equipment - - 48 Purchase of leasehold improvements, plant and equipment (491) (108) (548) ------------------------------------------------------------------- ------------------ ------------------ --------- Net cash (used by)/generated from investing activities (6,695) 191,866 192,254 ------------------------------------------------------------------- ------------------ ------------------ --------- Cash flows from financing activities Borrowings repaid - (150,000) (170,000) Finance lease repayments (338) (326) (659) Shares issued - 10 10 Purchase of own shares (4,402) (1,535) (1,089) Equity dividends paid (9,540) (10,092) (13,842) ------------------------------------------------------------------- ------------------ ------------------ --------- Net cash used by financing activities (14,280) (161,943) (185,580) ------------------------------------------------------------------- ------------------ ------------------ --------- Net (decrease)/increase in cash and cash equivalents (13,885) 19,864 7,441 Cash and cash equivalents at start of period 50,925 43,484 43,484 ------------------------------------------------------------------- ------------------ ------------------ --------- Cash and cash equivalents at end of period 37,040 63,348 50,925 ------------------------------------------------------------------- ------------------ ------------------ ---------
(1) Trade and other receivables and cash and cash equivalents have been restated as at 30 September 2022 following the IFRIC agenda decision in respect of demand deposits with restrictions on use arising from a contract with a third party (see Note 29).
Unaudited Consolidated Statement of Changes in Equity
At 30 September 2023
Capital
Share Share Revaluation redemption Other Retained
capital premium reserve reserve Own shares held reserves earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------- -------- -------- ----------- ----------- --------------- --------- ---------------- --------
At 31 March 2022 1,223 112,654 197,627 7,743 - 291 367,505 687,043
Total
comprehensive
expense - - - - - - (64,511) (64,511)
Revaluation
deficit - - (97,854) - - - 97,854 -
Realised on
disposals - - (53,357) - - - 53,357 -
Transactions
with owners
Issued share
capital 10 3,965 - - - - - 3,975
Performance
Share Plan - - - - - - 1,073 1,073
Purchase of own
shares - - - - (848) - - (848)
Share settled
Performance
Share Plan - - - - - - (3,536) (3,536)
Share settled
bonus - - - - - - (439) (439)
Revaluation
deficit on
valuation of
shares - - - - - - (240) (240)
Dividends paid - - - - - - (13,842) (13,842)
---------------- -------- -------- ----------- ----------- --------------- --------- ---------------- --------
Total
transactions
with owners 10 3,965 - - (848) - (16,984) (13,857)
At 31 March 2023 1,233 116,619 46,416 7,743 (848) 291 437,221 608,675
Total
comprehensive
expense - - - - - - (93,103) (93,103)
Revaluation
deficit - - (93,367) - - - 93,367 -
Transactions
with owners
Performance
Share Plan - - - - - - 698 698
Purchase of own
shares - - - - (4,402) - - (4,402)
Share settled
Performance
Share Plan - - - - 2,352 - (2,352) -
Share settled
bonus - - - - 1,223 - (1,223) -
Dividends paid - - - - - - (9,540) (9,540)
---------------- -------- -------- ----------- ----------- --------------- --------- ---------------- --------
Total
transactions
with owners - - - - (827) - (12,417) (13,244)
At 30 September
2023 1,233 116,619 (46,951) 7,743 (1,675) 291 425,068 502,328
---------------- -------- -------- ----------- ----------- --------------- --------- ---------------- --------
Capital Own
Share Share Revaluation redemption shares Other Retained
capital premium reserve reserve held reserves earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------- -------- -------- ----------- ----------- ------- --------- --------- --------
At 31 March 2022 1,223 112,654 197,627 7,743 - 291 367,505 687,043
Total comprehensive income - - - - - - 17,225 17,225
Revaluation deficit - - (34,994) - - - 34,994 -
Realised on disposals - - (53,357) - - - 53,357 -
Transactions with owners
Issued share capital 10 3,965 - - - - - 3,975
Performance Share Plan - - - - - - 54 54
Purchase of own shares - - - - (1,535) - - (1,535)
Share settled Performance Share
Plan - - - - - - (3,536) (3,536)
Share settled bonus - - - - - - (439) (439)
Dividends paid - - - - - - (10,092) (10,092)
------------------------------- -------- -------- ----------- ----------- ------- --------- --------- --------
Total transactions with owners 10 3,965 - - (1,535) - (14,013) (11,573)
At 30 September 2022 1,233 116,619 109,276 7,743 (1,535) 291 459,068 692,695
------------------------------- -------- -------- ----------- ----------- ------- --------- --------- --------
Unaudited Notes to the Half Year Results
1. Financial Information and Basis of Preparation
The Company is a public limited company incorporated and domiciled in England and Wales and listed on the Main Market of the London Stock Exchange. The registered office address is 5 Hanover Square London W1S 1HQ.
These condensed interim financial statements were approved for issue on 22 November 2023.
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 2023, approved by the Board of Directors on 23 May 2023, which were prepared under International Financial Reporting Standards as adopted by the United Kingdom and which received an unqualified report from the Auditors, and did not contain a statement under Section 498(2) or Section 498(3) of the Companies Act 2006, have been filed with the Registrar of Companies.
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 2023.
These interim condensed unaudited consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the United Kingdom and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. The same accounting policies and methods of computation are followed in the 30 September 2023 interim condensed unaudited consolidated financial statements as in the most recent annual financial statements.
Change in Accounting Policies
The Group adopted the following new and amended standards in the Period ended 30 September 2023. There was no material impact arising from their adoption.
-- Disclosure of accounting policies - Amendments to IAS 1 and IFRS Practice Statement 2 -- Definition of accounting policies - Amendments to IAS 8
-- Deferred tax related to assets and liabilities arising from a single transaction - Amendments to IAS 12
Going Concern
The Directors have considered the appropriateness of adopting a going concern basis in preparing the financial statements. Their assessment is based on forecasts for the next 12 month period, with sensitivity testing undertaken to replicate severe but plausible downside scenarios related to the principal risks and uncertainties associated with the business.
The key assumptions used in the review are summarised below:
-- The Group's rental income receipts were modelled for each tenant on an individual basis; -- Existing loan facilities remain available;
-- Certain property additions/disposals are assumed in line with the individual asset business plans; and
-- Free cash is utilised where necessary to repay debt/cure bank facility covenants.
Compliance with the financial covenants of the Group's main debt facility, its GBP400m Revolving Credit Facility, was one of the Directors' key areas of review, with particular focus on the following three covenants:
-- Loan to Value ("LTV") - the ratio of the drawn loan amount to the value of the secured property as a percentage;
-- Loan to Rent Value ("LRV") - the ratio of the loan to the projected contractual net rental income for the next 12 months; and
-- Projected Net Rental Interest Cover Ratio ("ICR") - the ratio of projected net rental income to projected finance costs.
The October 2023 compliance position for these covenants is summarised below:
Covenant Requirement Actual --------- ------------ ------ LTV <65% 31% LRV <12.0x 10.8x ICR >150% 360% --------- ------------ ------
The results of this review demonstrated the following:
-- The forecasts show that all bank facility financial covenants will be met throughout the review period, with headroom to withstand a 13% fall in contracted rental income;
-- Property values could fall by 30% before loan to value covenants come under pressure;
-- Whilst the Group has a WAULT of 4.6 years, in a downside scenario whereby all tenants with lease expiries or break options in the going concern period exercise their breaks or do not renew at the end of their lease, and with no vacant space let or re-let, the rental income covenants would be met throughout the review period; and
-- Additional asset sales could be utilised to generate cash to repay debt, materially increasing covenant headroom.
Based on this analysis, the Directors have adopted a going concern basis in preparing the accounts for the Period.
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:
Principal Risk
Strategic
* The Group's strategy is inconsistent with the market
* Risks arising from the Group's significant
development projects
* Property values decline/reduced tenant demand for
space
* Geopolitical and economic
* Climate change
-------------------------------------------------------------
Financial
* Availability and cost of bank borrowing, cash
resources and potential breach of loan covenants
-------------------------------------------------------------
Operational
* Our people and relationships with business partners
and reliance on external partners
* Health and safety
* Significant business disruption/external catastrophic
event/cyber-attacks to our business and our buildings
-------------------------------------------------------------
Reputational
* Poor management of stakeholder relations and
non-compliance with prevailing legislation,
regulation and best practice
-------------------------------------------------------------
There have been no significant changes to these risks in the Period and further analysis is included within the Group's Annual Report and Accounts 2023.
2. Revenue from Contracts with Customers
Year to
Half Year to Half Year to 31 March
30 September 2023 30 September 2022 2023
GBP000 GBP000 GBP000
-------------------------------------------- ------------------ ------------------ ---------
Development property income 462 934 4,921
Service charge income 5,958 3,282 8,372
-------------------------------------------- ------------------ ------------------ ---------
Total revenue from contracts with customers 6,420 4,216 13,293
-------------------------------------------- ------------------ ------------------ ---------
The total revenue from contracts with customers is the revenue recognised in accordance with IFRS 15 Revenue from Contracts with Customers.
No impairment of contract assets was recognised in the Period to 30 September 2023 (Half Year to 30 September 2022: GBPnil, Year to 31 March 2023: GBP5,000).
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
-- Development properties, which include sites, developments in the course of construction, completed developments available for sale, and pre-sold developments.
Investments Developments Total Investments Developments Total
Half Year to Half Year to Half Year to Half Year to Half Year to Half Year to
30.09.23 30.09.23 30.09.23 30.09.22 30.09.22 30.09.22
Revenue GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- ------------- ------------- ------------- -------------------- ------------- -------------
Gross rental income 12,804 - 12,804 19,245 - 19,245
Development property
income - 462 462 - 934 934
Service charge income 5,958 - 5,958 3,282 - 3,282
Revenue 18,762 462 19,224 22,527 934 23,461
--------------------- ------------- ------------- ------------- -------------------- ------------- -------------
Investments Developments Total
Year to Year to Year to
31.03. 23 31.03.23 31.03.23
Revenue GBP000 GBP000 GBP000
---------------------------- ----------- ------------ ---------
Gross rental income 36,555 - 36,555
Development property income - 4,921 4,921
Service charge income 8,372 - 8,372
Revenue 44,927 4,921 49,848
---------------------------- ----------- ------------ ---------
Investments Developments Total Investments Developments Total
Half Year to Half Year to Half Year to Half Year to Half Year to Half Year to
30.09.23 30.09.23 30.09.23 30.09.22 30.09.22 30.09.22
Cost of sales GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- ------------- ------------- ------------- -------------------- ------------- -------------
Rents payable (95) - (95) ( 69) - ( 69)
Property overheads (846) - (846) ( 1,121) - ( 1,121)
Service charge
expense (5,958) - (5,958) ( 3,282) - ( 3,282)
Development cost of
sales - (922) (922) - ( 150) (150 )
Development sales
expenses - (36) (36) - ( 1) ( 1)
Cost of sales (6,899) (958) (7,857) ( 4,472) ( 151) (4,623)
--------------------- ------------- ------------- ------------- -------------------- ------------- -------------
Investments Developments Total
Year to Year to Year to
31.03. 23 31.03.23 31.03.23
Cost of sales GBP000 GBP000 GBP000
--------------------------- ----------- ------------ ---------
Rents payable (157) - (157)
Property overheads (2,092) - (2,092)
Service charge expense (8,372) - (8,372)
Development cost of sales - (2,915) (2,915)
Development sales expenses - (1) (1)
Reversal of provision - (30) (30)
Cost of sales (10,621) (2,946) (13,567)
--------------------------- ----------- ------------ ---------
Investments Developments Total Investments Developments Total
Half Year to Half Year to Half Year to Half Year to Half Year to Half Year to
(Loss)/profit before 30.09.23 30.09.23 30.09.23 30.09.22 30.09.22 30.09.22
tax GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------- ------------- ------------- ------------- ------------------- ------------- -------------
Net property income 11,863 (496) 11,367 18,055 783 18,838
Share of results of
joint ventures (4,439) (60) (4,499) 14,750 351 15,101
Other income 905 - 905 - - -
Loss on sale and
revaluation of
Investment
properties (93,367) - (93,367) (30,388) - (30,388)
-------------------- ------------- ------------- ------------- ------------------- ------------- -------------
Segmental
(loss)/profit (85,038) (556) (85,594) 2,417 1,134 3,551
Administrative
expenses (5,570) (5,584)
Finance costs (4,365) (7,402)
Finance income 328 96
Change in fair value
of derivative
financial
instruments 2,098 26,564
-------------------- ------------- ------------- ------------- ------------------- ------------- -------------
(Loss)/profit before
tax (93,103) 17,225
-------------------- ------------- ------------- ------------- ------------------- ------------- -------------
Included in other income of GBP905,000 (30 September 2022: GBPnil, 31 March 2023: GBPnil) is the gain on the sublet of the Group's head office of GBP902,000 (30 September 2022: GBPnil, 31 March 2023: GBPnil).
Investments Developments Total
Year to Year to Year to
31.03. 23 31.03.23 31.03.23
Loss before tax GBP000 GBP000 GBP000
--------------------------------------------------------- ----------- ------------ ---------
Net property income 34,306 1,975 36,281
Share of results of joint ventures 4,867 (1,373) 3,494
Loss on sale and revaluation of Investment properties (93,290) - (93,290)
--------------------------------------------------------- ----------- ------------ ---------
Segmental (loss)/profit (54,117) 602 (53,515)
Administrative expenses (12,835)
Finance costs (11,192)
Finance income 274
Change in fair value of derivative financial instruments 12,757
--------------------------------------------------------- ----------- ------------ ---------
Loss before tax (64,511)
--------------------------------------------------------- ----------- ------------ ---------
Investments Developments Total Investments Developments at Total
at 30.09.23 at 30.09.23 at 30.09.23 at 30.09.22 30.09.22 at 30.09.22
Net assets GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------- ------------ ------------ ------------ ------------ ----------------------- ------------
Investment properties 595,073 - 595,073 738,518 - 738,518
Land and developments - 28 28 - 2,089 2,089
Investment in joint
ventures 81,126 1,015 82,141 101,097 4,798 105,895
----------------------- ------------ ------------ ------------ ------------ ----------------------- ------------
676,199 1,043 677,242 839,615 6,887 846,502
Other assets 84,601 132,351
----------------------- ------------ ------------ ------------ ------------ ----------------------- ------------
Total assets 761,843 978,853
Liabilities (259,515) (286,158)
----------------------- ------------ ------------ ------------ ------------ ----------------------- ------------
Net assets 502,328 692,695
----------------------- ------------ ------------ ------------ ------------ ----------------------- ------------
Investments Developments Total
at 31.03.23 at 31.03.23 at 31.03.23
Net assets GBP000 GBP000 GBP000
----------------------------- ------------ ------------ ------------
Investment properties 681,682 - 681,682
Land and developments - 28 28
Investment in joint ventures 84,255 3,075 87,330
----------------------------- ------------ ------------ ------------
765,937 3,103 769,040
Other assets 103,816
----------------------------- ------------ ------------ ------------
Total assets 872,856
Liabilities (264,181)
----------------------------- ------------ ------------ ------------
Net assets 608,675
----------------------------- ------------ ------------ ------------
4. Net Property Income
Year to
Half Year to Half Year to 31 March
30 September 2023 30 September 2022 2023
GBP000 GBP000 GBP000
----------------------------------- ------------------ ------------------ ---------
Gross rental income 12,804 19,245 36,555
Head rents payable (95) (69) (157)
Property overheads (846) (1,121) (2,092)
----------------------------------- ------------------ ------------------ ---------
Net rental income 11,863 18,055 34,306
----------------------------------- ------------------ ------------------ ---------
Development property income 462 934 4,921
Development cost of sales (922) (150) (2,915) Sales expenses (36) (1) (1) Provision - - (30) ----------------------------------- ------------------ ------------------ --------- Development property (loss)/profit (496) 783 1,975 ----------------------------------- ------------------ ------------------ --------- Net property income 11,367 18,838 36,281 ----------------------------------- ------------------ ------------------ ---------
Included within gross rental income above is a net deduction of GBP4,307,000 (September 2022: net addition of GBP2,464,000, March 2023: net addition of GBP1,609,000) of accrued income for rent free periods.
5. Gain on Sale of Investment Properties
Year to
Half Year to Half Year to 31 March
30 September 2023 30 September 2022 2023
GBP000 GBP000 GBP000
---------------------------------------------------- ------------------- ------------------ ---------
Net proceeds from the sale of Investment properties - 186,583 186,541
Book value (Note 11) - (169,570) (169,570)
Tenants' incentives on sold Investment properties - (12,407) (12,407)
---------------------------------------------------- ------------------- ------------------ ---------
Gain on sale of Investment properties - 4,606 4,564
---------------------------------------------------- ------------------- ------------------ ---------
6. Administrative Expenses
Year to
Half Year to Half Year to 31 March
30 September 2023 30 September 2022 2023
GBP000 GBP000 GBP000
----------------------------------------------------- ------------------ ------------------ ---------
Administration costs (4,655) (5,323) (9,845)
Performance related awards, including annual bonuses (793) (220) (2,702)
National Insurance on performance related awards (122) (41) (288)
----------------------------------------------------- ------------------ ------------------ ---------
Administrative expenses (5,570) (5,584) (12,835)
----------------------------------------------------- ------------------ ------------------ ---------
7. Net Finance Costs and Change in Fair Value of Derivative Financial Instruments
Year to
Half Year to Half Year to 31 March
30 September 2023 30 September 2022 2023
GBP000 GBP000 GBP000
------------------------------------------------------------------- ------------------ ------------------ ---------
Interest payable on bank loans and overdrafts (2,878) (5,214) (8,284)
Other interest payable and similar charges (1,487) (2,056) (2,780)
------------------------------------------------------------------- ------------------ ------------------ ---------
Total before cancellation of loans (4,365) (7,270) (11,064)
Cancellation of loans - (132) (128)
------------------------------------------------------------------- ------------------ ------------------ ---------
Finance costs (4,365) (7,402) (11,192)
------------------------------------------------------------------- ------------------ ------------------ ---------
Finance income 328 96 274
------------------------------------------------------------------- ------------------ ------------------ ---------
Net finance costs (4,037) (7,306) (10,918)
------------------------------------------------------------------- ------------------ ------------------ ---------
Change in fair value of derivative financial instruments 2,098 26,564 12,757
------------------------------------------------------------------- ------------------ ------------------ ---------
Net finance costs and change in fair value of derivative financial
instruments (1,939) 19,258 1,839
------------------------------------------------------------------- ------------------ ------------------ ---------
8. Tax on Profit on Ordinary Activities
The Group became a UK REIT on 1 April 2022. As a REIT, the Group is not subject to Corporation Tax on the profits of its property rental business and chargeable gains arising on the disposal of investment assets used in the property rental business, but remains subject to tax on profits and chargeable gains arising from non REIT business activities. No current tax charge arises in the Period to 30 September 2023 (Half Year to 30 September 2022: GBPnil, Year to 31 March 2023: GBPnil) in respect of non-REIT activities.
At 30 September 2023, no deferred tax was recognised (30 September 2022: GBPnil, 31 March 2023: GBPnil). This is on the basis that deferred tax assets and liabilities either relate to the Group's exempt property rental business, or are deferred tax assets where it is unlikely that there will be taxable profit in the future against which they could be used.
9. Dividends
Year to
Half Year to Half Year to 31 March
30 September 2023 30 September 2022 2023
GBP000 GBP000 GBP000
-------------------------------------------------------- ------------------ ------------------ ---------
Attributable to equity share capital
Ordinary
- Interim paid 3.05p per share - - 3,750
- Prior period final paid 8.70p per share (2022: 8.25p) 9,540 10,092 10,092
-------------------------------------------------------- ------------------ ------------------ ---------
9,540 10,092 13,842
-------------------------------------------------------- ------------------ ------------------ ---------
The interim dividend of 3.05p per share (30 September 2022: 3.05p per share) was approved by the Board on 22 November 2023 and will be paid on 12 January 2024 to Shareholders on the register on 1 December 2023. This interim dividend, amounting to GBP3,744,000 has not been included as a liability as at 30 September 2023.
10. 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 Period end.
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 share awards.
The earnings per share is calculated in accordance with IAS 33 Earnings per Share 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 2023 30 September 2022 2023
000 000 000
----------------------------------------------------------------- ------------------ ------------------ ---------
Ordinary shares in issue 123,355 123,355 123,355
Own shares held (602) (398) -
Weighting adjustment - (658) (613)
----------------------------------------------------------------- ------------------ ------------------ ---------
Weighted average ordinary shares in issue for calculation of
basic and EPRA earnings per share 122,753 122,299 122,742
Weighted average ordinary shares issued on share settled bonuses 154 561 561
Weighted average ordinary shares to be issued under Performance
Share Plan - 575 846
Adjustment for anti-dilutive shares (154) - (1,407)
------------------ ------------------ ---------
Weighted average ordinary shares in issue for calculation of
diluted earnings per share 122,753 123,435 122,742
----------------------------------------------------------------- ------------------ ------------------ ---------
GBP000 GBP000 GBP000
----------------------------------------------------------------- ------------------ ------------------ ---------
(Loss)/earnings used for calculation of basic and diluted
earnings per share (93,103) 17,225 (64,511)
----------------------------------------------------------------- ------------------ ------------------ ---------
Basic (loss)/earnings per share (75.8)p 14.1p (52.6)p
Diluted (loss)/earnings per share (75.8)p 14.0p (52.6)p
----------------------------------------------------------------- ------------------ ------------------ ---------
GBP000 GBP000 GBP000
----------------------------------------------------------------------------- -------- -------- --------
(Loss)/earnings used for calculation of basic and diluted earnings per share (93,103) 17,225 (64,511)
Net loss/(gain) on sale and revaluation of Investment properties
- subsidiaries 93,367 30,388 93,290
- joint ventures 3,309 (15,268) (5,161)
Tax on profit on disposal of Investment properties - 228 463
(Gain)/loss on movement in share of joint ventures (66) 66 564
Fair value movement on derivative financial instruments (2,098) (26,564) (12,757)
Expense on cancellation of loans - 132 128
Deferred tax on adjusting items - (377) (503)
----------------------------------------------------------------------------- -------- -------- --------
Earnings used for calculations of EPRA earnings per share 1,409 5,830 11,513
----------------------------------------------------------------------------- -------- -------- --------
EPRA earnings per share 1.1p 4.8p 9.4p
----------------------------------------------------------------------------- -------- -------- --------
The earnings used for the calculation of EPRA earnings per share include net rental income and development property profits but exclude investment and trading property gains.
11. Investment Properties
At At
30 September 2023 At 31 March
GBP000 30 September 2022 2023
GBP000 GBP000
-------------------------- ------------------ ------------------ ---------
Book value at 1 April 681,682 938,797 938,797
Additions at cost 6,814 4,420 10,509
Disposals - (169,570) (169,570)
Letting cost amortisation (56) (135) (200)
Revaluation deficit (93,367) (34,994) (97,854)
As at period end 595,073 738,518 681,682
-------------------------- ------------------ ------------------ ---------
All properties are stated at market value 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 are as follows:
At At
30 September 2023 At 31 March
GBP000 30 September 2022 2023
GBP000 GBP000
------------------------------------------------------------------- ------------------ ------------------ ---------
Book value 595,073 738,518 681,682
Lease incentives and costs included in trade and other receivables 9,689 14,858 13,987
Head leases capitalised (2,112) (2,126) (2,119)
------------------------------------------------------------------- ------------------ ------------------ ---------
Fair value 602,650 751,250 693,550
------------------------------------------------------------------- ------------------ ------------------ ---------
Cumulative interest capitalised in respect of the refurbishment of Investment properties at 30 September 2023 amounted to GBP9,620,000 (30 September 2022: GBP9,620,000, 31 March 2023: GBP9,620,000). Interest capitalised during the Period in respect of the refurbishment of Investment properties amounted to GBPnil (30 September 2022: GBPnil, 31 March 2023: GBPnil) and an amount of GBPnil (30 September 2022: GBPnil, 31 March 2023: GBP3,482,000) was released on the sale of the properties in the Period.
The historical cost of Investment property is GBP640,052,000 (30 September 2022: GBP627,437,000, 31 March 2023: GBP633,237,000).
The fair value of the Group's Investment property as at 30 September 2023 was determined by independent external valuers at that date, except for Investment properties valued by the Directors. The valuations are in accordance with the RICS Valuation - Professional Standards ("The Red Book") and the International Valuation Standards and were arrived at by reference to market transactions for similar properties.
Fair values for Investment property are calculated using the present value income approach. The main assumptions underlying the valuations are in relation to rent profile and yields as discussed below. A key driver of the property valuations is the terms of the leases in place at the valuation date. These determine the cash flow profile of the property for a number of years. The valuation assumes adjustments from these rental values to current market rent at the time of the next rent review (where a typical lease allows only for upward adjustment) and as leases expire and are replaced by new leases. The current market level of rent is assessed based on evidence provided by the most recent relevant leasing transactions and negotiations. The equivalent yield is applied as a discount rate to the rental cash flows which, after taking into account other input assumptions such as vacancies and costs, generates the market value of the property.
The equivalent yield applied is assessed by reference to market transactions for similar properties and takes into account, amongst other things, any risks associated with the rent uplift assumptions.
The net initial yield is calculated as the current net income over the gross market value of the asset and is used as a sense check and to compare against market transactions for similar properties. The valuation outputs, along with inputs and assumptions, are reviewed to ensure these are in line with what a market participant would use when pricing each asset.
The reversionary yield is the return received from an asset once the estimated rental value has been captured on today's assessment of market value.
There are interrelationships between all the inputs as they are determined by market conditions. The existence of an increase in more than one input would be to magnify the input on the valuation. The impact on the valuation will be mitigated by the interrelationship of two inputs in opposite directions. The key unobservable inputs used to determine the fair values range from an ERV of GBP24.45 psf to GBP106.38 psf and a true equivalent yield range from 5.4% to 7.2%.
A sensitivity analysis was performed to ascertain the impact of a 25 and 50 basis point shift in the equivalent yield and a 2.5% and 5% shift in ERVs for the wholly owned investment portfolio:
At Change in portfolio
30 September value
2023 % GBPm
--------------------- ------------- ---------- ---------
True equivalent yield 5.85%
+ 50bps (10.8) (80.3)
+ 25bps (5.8) (42.0)
- 25bps 6.2 45.8
- 50bps 12.9 96.1
--------------------- ------------- ---------- ---------
ERV GBP79.68
psf
+ 5.00% 5.5 40.9
+ 2.50% 2.7 20.3
- 2.50% (2.7) (20.3)
- 5.00% (5.4) (40.2)
--------------------- ------------- ---------- ---------
12. Joint Ventures
Year to
Half Year to Half Year to 31 March
30 September 2023 30 September 2022 2023
Share of results of joint ventures GBP000 GBP000 GBP000
---------------------------------------------------- ------------------ ------------------ ---------
Revenue 1,442 4,873 10,141
---------------------------------------------------- ------------------ ------------------ ---------
Gross rental income 887 269 287
Property overheads (349) (142) (1,103)
---------------------------------------------------- ------------------ ------------------ ---------
Net rental income 538 127 (816)
(Loss)/gain on revaluation of Investment properties (3,309) 15,339 5,095
(Loss)/gain on sale of Investment properties - (71) 66
Development property (loss)/profit (18) 186 1,262
(2,789) 15,581 5,607
Administrative expenses (188) (452) (459)
---------------------------------------------------- ------------------ ------------------ ---------
Operating (loss)/profit (2,977) 15,129 5,148
Interest payable on bank loans and overdrafts (1,502) (1,619) (2,703)
Other interest payable and similar charges (104) (101) (203)
Interest capitalised - 1,815 1,815
Finance income 18 6 23
---------------------------------------------------- ------------------ ------------------ ---------
(Loss)/profit before tax (4,565) 15,230 4,080
Tax - (63) (22)
---------------------------------------------------- ------------------ ------------------ ---------
(Loss)/profit after tax (4,565) 15,167 4,058
Adjustment for Barts Square economic interest(1) 66 (66) (564)
---------------------------------------------------- ------------------ ------------------ ---------
Share of results of joint ventures (4,499) 15,101 3,494
---------------------------------------------------- ------------------ ------------------ ---------
(1) This adjustment reflects the impact of the consolidation of a joint venture at its economic interest of 50.0% (30 September 2022: 50.0%, 31 March 2023: 50.0%) rather than its actual ownership interest of 33.3%.
At At
30 September 2023 At 31 March
GBP000 30 September 2022 2023
Investment in joint ventures GBP000 GBP000
--------------------------------------------- ------------------ ------------------ ---------
Summarised balance sheets
Non-current assets
Investment properties 146,257 160,700 150,151
Owner occupied property, plant and equipment 63 154 109
--------------------------------------------- ------------------ ------------------ ---------
146,320 160,854 150,260
--------------------------------------------- ------------------ ------------------ ---------
Current assets
Land and developments - 4,663 539
Trade and other receivables 1,894 1,240 727
Cash and cash equivalents 2,207 4,516 3,749
--------------------------------------------- ------------------ ------------------ ---------
4,101 10,419 5,015
--------------------------------------------- ------------------ ------------------ ---------
Current liabilities
Trade and other payables (2,728) (5,573) (3,332)
Borrowings (61,634) - -
--------------------------------------------- ------------------ ------------------ ---------
(64,362) (5,573) (3,332)
--------------------------------------------- ------------------ ------------------ ---------
Non-current liabilities
Trade and other payables (407) (406) (406)
Borrowings - (54,603) (59,416)
Leasehold interest (5,020) (4,834) (4,927)
Deferred tax - (55) -
(5,427) (59,898) (64,749)
--------------------------------------------- ------------------ ------------------ ---------
Net assets pre-adjustment 80,632 105,802 87,194
Acquisition costs 1,509 93 136
--------------------------------------------- ------------------ ------------------ ---------
Investment in joint ventures 82,141 105,895 87,330
--------------------------------------------- ------------------ ------------------ ---------
The fair value of Investment properties at 30 September 2023 is as follows:
At At
30 September 2023 At 31 March
GBP000 30 September 2022 2023
GBP000 GBP000
------------------------------------------------------------------- ------------------ ------------------ ---------
Book value 146,257 160,700 150,151
Lease incentives and costs included in trade and other receivables 989 161 185
Head leases capitalised (4,346) (4,376) (4,361)
------------------------------------------------------------------- ------------------ ------------------ ---------
Fair value 142,900 156,485 145,975
------------------------------------------------------------------- ------------------ ------------------ ---------
13. Other Investments
At At
30 September 2023 At 31 March
GBP000 30 September 2022 2023
GBP000 GBP000
---------------------- ------------------ ------------------ ---------
Book value at 1 April 353 306 306
Acquisitions 81 - 47
---------------------- ------------------ ------------------ ---------
As at period end 434 306 353
---------------------- ------------------ ------------------ ---------
On 6 August 2021, the Group entered into a commitment of GBP1,000,000 to invest in the Pi Labs European PropTech venture capital fund ("Fund") of which GBP81,000 (31 March 2023: GBP47,000) was invested during the Period. The Fund is focused on investing in the next generation of proptech businesses.
The fair value of the Group's investment is based on the net asset value of the Fund, representing Level 2 fair value measurement as defined in IFRS 13 Fair Value Measurement.
14. Land and Developments
At At
30 September 2023 At 31 March
GBP000 30 September 2022 2023
GBP000 GBP000
----------------- ------------------ ------------------ ---------
At 1 April 28 2,089 2,089
Disposals - - (2,031)
Provision - - (30)
As at period end 28 2,089 28
----------------- ------------------ ------------------ ---------
The Directors' valuation of development stock shows a surplus of GBP302,000 (30 September 2022: GBP302,000, 31 March 2023: GBP302,000) above book value. This surplus has been included in the EPRA net tangible asset value (Note 22).
No interest has been capitalised or included in land and developments.
15. Trade and Other Receivables
At At
At 30 September 2022 31 March
30 September 2023 Restated(1) 2023
Due within 1 year GBP000 GBP000 GBP000
---------------------------------- ------------------ ------------------ ---------
Trade receivables 3,027 7,198 2,517
Other receivables 1,296 804 752
Prepayments 2,099 2,503 1,990
Accrued income 10,275 17,076 19,676
---------------------------------- ------------------ ------------------ ---------
Total trade and other receivables 16,697 27,581 24,935
---------------------------------- ------------------ ------------------ ---------
(1) Trade and other receivables and cash and cash equivalents have been restated as at 30 September 2022 following the IFRIC agenda decision in respect of demand deposits with restrictions on use arising from a contract with a third party (see Note 29).
Included in accrued income are lease incentives of GBP9,689,000 (30 September 2022: GBP14,858,000, 31 March 2023: GBP13,987,000).
At At
30 September 2023 At 31 March
GBP000 30 September 2022 2023
Due after 1 year GBP000 GBP000
---------------------------------- ------------------ ------------------ ---------
Other receivables 1,449 - -
---------------------------------- ------------------ ------------------ ---------
Total trade and other receivables 1,449 - -
---------------------------------- ------------------ ------------------ ---------
16. Cash and Cash Equivalents
At At
At 30 September 2022 31 March
30 September 2023 Restated(1) 2023
GBP000 GBP000 GBP000
-------------------------------- ------------------ ------------------ ---------
Cash held at managing agents 7,513 4,366 4,156
Rental deposits 7,714 8,970 9,069
Restricted cash 4,350 3,905 9,495
Cash deposits 17,463 46,107 28,205
-------------------------------- ------------------ ------------------ ---------
Total cash and cash equivalents 37,040 63,348 50,925
-------------------------------- ------------------ ------------------ ---------
(1) Trade and other receivables and cash and cash equivalents have been restated as at 30 September 2022 following the IFRIC agenda decision in respect of demand deposits with restrictions on use arising from a contract with a third party (see Note 29).
Restricted cash is made up of cash held by solicitors, rental deposits and cash in restricted accounts.
17. Trade and Other Payables
At At
30 September 2023 At 31 March
GBP000 30 September 2022 2023
GBP000 GBP000
------------------------------- ------------------ ------------------ ---------
Trade payables 14,465 15,551 15,212
Other payables 1,591 1,607 2,136
Accruals 3,030 6,266 5,404
Deferred income 7,320 9,801 8,480
------------------------------- ------------------ ------------------ ---------
Total trade and other payables 26,406 33,225 31,232
------------------------------- ------------------ ------------------ ---------
18. Lease Liability
At At
30 September 2023 At 31 March
GBP000 30 September 2022 2023
GBP000 GBP000
---------------------------- ------------------ ------------------ ---------
Current lease liability 695 670 683
---------------------------- ------------------ ------------------ ---------
Non-current lease liability 5,238 5,933 5,589
---------------------------- ------------------ ------------------ ---------
Included within the lease liability are GBP695,000 (30 September 2022: GBP670,000, 31 March 2023: GBP683,000) of current and GBP3,049,000 (30 September 2022: GBP3,745,000, 31 March 2023: GBP3,399,000) of non-current lease liabilities which relate to the long leasehold of the Group's head office.
19. Borrowings
At At
30 September 2023 At 31 March
GBP000 30 September 2022 2023
GBP000 GBP000
----------------------------- ------------------ ------------------- ---------
Current borrowings - - -
----------------------------- ------------------ ------------------- ---------
Borrowings repayable within:
- two to three years 227,176 - -
- three to four years - 246,100 226,677
Non-current borrowings 227,176 246,100 226,677
----------------------------- ------------------ ------------------- ---------
Total borrowings 227,176 246,100 226,677
----------------------------- ------------------ ------------------- ---------
At At
At 30 September 2022 31 March
30 September 2023 Restated(1) 2023
GBP000 GBP000 GBP000
----------------------------- ------------------ ------------------- ---------
Total borrowings 227,176 246,100 226,677
Cash (37,040) (63,348) (50,925)
----------------------------- ------------------ ------------------- ---------
Net borrowings 190,136 182,752 175,752
----------------------------- ------------------ ------------------- ---------
(1) Trade and other receivables and cash and cash equivalents have been restated as at 30 September 2022 following the IFRIC agenda decision in respect of demand deposits with restrictions on use arising from a contract with a third party (see Note 29).
Net borrowings exclude the Group's share of borrowings in joint ventures of GBP61,634,000 (30 September 2022: GBP54,603,000, 31 March 2023: GBP59,416,000) and cash of GBP2,207,000 (30 September 2022: GBP4,516,000, 31 March 2023: GBP3,749,000). All borrowings in joint ventures are secured.
At At
At 30 September 2022 31 March
30 September 2023 Restated(1) 2023
GBP000 GBP000 GBP000
------------ ------------------- ------------------ ---------
Net assets 502,328 692,695 608,675
------------ ------------------- ------------------ ---------
Net gearing 38% 26% 29%
------------ ------------------- ------------------ ---------
1 Trade and other receivables and cash and cash equivalents have been restated as at 30 September 2022 following the IFRIC agenda decision in respect of demand deposits with restrictions on use arising from a contract with a third party (see Note 29).
20. Derivative Financial Instruments
At At
30 September 2023 At 31 March
GBP000 30 September 2022 2023
GBP000 GBP000
--------------------------------------- ------------------ ------------------ ---------
Derivative financial instruments asset 25,343 36,758 23,245
--------------------------------------- ------------------ ------------------ ---------
A gain on the change in fair value of GBP2,098,000 has been recognised in the Unaudited Consolidated Income Statement (30 September 2022: GBP26,564,000, 31 March 2023: GBP12,757,000) as a result of the continued movements upwards in the medium and long term interest rate projections.
The fair values of the Group's outstanding interest rate swaps and caps 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
30 September 2023 At 31 March
GBP000 30 September 2022 2023
GBP000 GBP000
----------- ------------------ ------------------ ---------
Authorised 39,577 39,577 39,577
----------- ------------------ ------------------ ---------
The authorised share capital of the Company is GBP39,577,000 divided into ordinary shares of 1p each.
Allotted, called up and fully paid:
- 123,355,197 (30 September 2022: 123,355,197, 31 March 2023: 123,355,197) ordinary shares
of 1p each 1,233 1,233 1,233
1,233 1,233 1,233
------------------------------------------------------------------------------------------- ----- ----- -----
22. Net Assets Per Share
At
At 31 March
30 September 2023 Number of shares 2023 Number of shares
GBP000 000 p GBP000 000 p
----------------------------------------- ------------------ ---------------- --- --------- ---------------- ---
IFRS net assets 502,328 123,355 608,675 123,355
Adjustments:
- own shares held (602) (283)
----------------------------------------- ------------------ ---------------- --- --------- ---------------- ---
Basic net asset value 502,328 122,753 409 608,675 123,072 495
- share settled bonus 154 561
- dilutive effect of Performance Share
Plan - 751
----------------------------------------- ------------------ ---------------- --- --------- ---------------- ---
Diluted net asset value 502,328 122,907 409 608,675 124,384 489
----------------------------------------- ------------------ ---------------- --- --------- ---------------- ---
Adjustments:
* fair value of financial instruments (25,343) (23,245)
* fair value of land and developments 302 302
* real estate transfer tax 50,348 56,591
------------------------------------------- -------- ------- --- -------- ------- ---
EPRA net reinstatement value 527,635 122,907 429 642,323 124,384 516
------------------------------------------- -------- ------- --- -------- ------- ---
* real estate transfer tax (25,301) (28,868)
EPRA net tangible asset value 502,334 122,907 409 613,455 124,384 493
------------------------------------------- -------- ------- --- -------- ------- ---
At
At 31 March
30 September 2023 Number of shares 2023 Number of shares
GBP000 000 p GBP000 000 p
------------------------ ------------------ ---------------- --- --------- ---------------- ---
Diluted net asset value 502,328 122,907 409 608,675 124,384 489
------------------------ ------------------ ---------------- --- --------- ---------------- ---
Adjustments:
* surplus on fair value of stock 302 302
EPRA net disposal value 502,630 122,907 409 608,977 124,384 490
-------------------------------------- ------- ------- --- ------- ------- ---
At
30 September
2022 Number of shares
GBP000 000 p
----------------------------------------------- ------------- ---------------- ---
IFRS net assets 692,695 123,355
Adjustments:
- own shares held (398)
Basic net asset value 692,695 122,957 563
- share settled bonus 561
- dilutive effect of Performance Share Plan 543
----------------------------------------------- ------------- ---------------- ---
Diluted net asset value 692,695 124,061 558
----------------------------------------------- ------------- ---------------- ---
Adjustments:
* fair value of financial instruments (36,758)
* deferred tax 126
* fair value of land and developments 302
* real estate transfer tax 61,043
---------------------------------------------- -------- ------- ---
EPRA net reinstatement value 717,408 124,061 578
---------------------------------------------- -------- ------- ---
* real estate transfer tax (31,674)
* deferred tax (126)
---------------------------------------------- -------- ------- ---
EPRA net tangible asset value 685,608 124,061 553
---------------------------------------------- -------- ------- ---
At
30 September
2022 Number of shares
GBP000 000 p
------------------- ------------- ---------------- ---
Diluted net assets 692,695 124,061 558
---------------------- ------------- ---------------- ---
Adjustments:
* surplus on fair value of stock 302
EPRA net disposal value 692,997 124,061 559
----------------------------------------- ------- ------- ---
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.
The calculation of EPRA net tangible asset value includes a real estate transfer tax adjustment which adds back the benefit of the saving of the purchaser's costs that Helical expects to receive on the sales of the corporate vehicles that own the buildings, rather than direct asset sales.
The calculation of EPRA net disposal value per share reflects the fair value of all the assets and liabilities of the Group at 30 September 2023.
23. Related Party Transactions
The following amounts were due from the Group's joint ventures:
At At
30 September 2023 At 31 March
GBP000 30 September 2022 2023
GBP000 GBP000
---------------------------------- ------------------ ------------------ ---------
Charterhouse Street Limited group 578 565 577
Barts Square companies 71 76 79
Old Street Holdings LP - - 8
Shirley Advance LLP 8 8 -
---------------------------------- ------------------ ------------------ ---------
A development management, accounting and corporate services fee of GBP25,000 (30 September 2022: GBP25,000, 31 March 2023: GBP50,000) was charged by the Group to the Barts Square companies. In addition, a net development management, accounting and corporate services fee of GBP1.2m was reversed during the Period (30 September 2022: charge of GBP699,000, 31 March 2023: charge of GBP779,000) by the Group to the Charterhouse Place Limited group.
24. See-through Analysis
Helical holds a significant proportion of its property assets in joint ventures with partners that provide a significant equity contribution, whilst relying on the Group to provide asset management or development expertise. Accounting convention requires Helical to account under IFRS for its share of the net results and net assets of joint ventures on an equity basis in the Income Statement and Balance Sheet. Helical consider that 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.
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 its 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 is shown in the table below.
Year to
Half Year to Half Year to 31 March
30 September 2023 30 September 2022 2023
GBP000 GBP000 GBP000
------------------------------------------------- ------------------ ------------------ ---------
Gross rental income - subsidiaries 12,804 19,245 36,555
- joint ventures 887 269 287
------------------------------------------------ ------------------ ------------------ ---------
Total gross rental income 13,691 19,514 36,842
Rents payable - subsidiaries (95) (69) (157)
Property overheads - subsidiaries (846) (1,121) (2,092)
- joint ventures (349) (142) (1,103)
See-through net rental income 12,401 18,182 33,490
------------------------------------------------- ------------------ ------------------ ---------
See-through Net Development (Losses)/Profits
Helical's share of development (losses)/profits from property assets held in subsidiaries and in joint ventures is shown in the table below.
Year to
Half Year to Half Year to 31 March
30 September 2023 30 September 2022 2023
GBP000 GBP000 GBP000
-------------------------------------------- ------------------ ------------------ ---------
In parent and subsidiaries (496) 783 2,005
In joint ventures (18) 186 1,262
-------------------------------------------- ------------------ ------------------ ---------
Total gross development (loss)/profit (514) 969 3,267
Provision against stock - subsidiaries - - (30)
-------------------------- ---------------- ------------------ ------------------ ---------
See-through development (losses)/profits (514) 969 3,237
-------------------------------------------- ------------------ ------------------ ---------
See-through Net (Loss)/Gain on Sale and Revaluation of Investment Properties
Helical's share of the net (loss)/gain on the sale and revaluation of Investment properties held in subsidiaries and joint ventures is shown in the table below.
Year to
Half Year to Half Year to 31 March
30 September 2023 30 September 2022 2023
GBP000 GBP000 GBP000
----------------------------------------------- ------------------ ------------------ ------------------ ---------
Revaluation loss on Investment properties - subsidiaries (93,367) (34,994) (97,854)
- joint ventures (3,309) 15,339 5,095
------------------------------------------------------------------ ------------------ ------------------ ---------
Total revaluation loss (96,676) (19,655) (92,759)
Net gain/(loss) on sale of Investment
properties - subsidiaries - 4,606 4,564
- joint ventures - (71) 66
------------------------------------------------------------------ ------------------ ------------------ ---------
Total net gain on sale of Investment properties - 4,535 4,630
------------------------------------------------------------------- ------------------ ------------------ ---------
See-through net loss on sale and revaluation of Investment
properties (96,676) (15,120) (88,129)
------------------------------------------------------------------- ------------------ ------------------ ---------
See-through Administration Expenses
Helical's share of the administration expenses incurred in subsidiaries and joint ventures is shown in the table below.
Year to
Half Year to Half Year to 31 March
30 September 2023 30 September 2022 2023
GBP000 GBP000 GBP000
-------------------------------------------------------------- ------------------ ------------------ ---------
Administration expenses - subsidiaries 4,655 5,323 9,845
- joint ventures 188 452 459
------------------ ----------------------------------------- ------------------ ------------------ ---------
Total administration expenses 4,843 5,775 10,304
Performance related awards, including NIC - subsidiaries 915 261 2,990
Total performance related awards, including NIC 915 261 2,990
------------------------------------------------------------- ------------------ ------------------ ---------
See-through administration expenses 5,758 6,036 13,294
------------------------------------------------------------- ------------------ ------------------ ---------
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 joint ventures is shown in the table below.
Year to
Half Year to Half Year to 31 March
30 September 2023 30 September 2022 2023
GBP000 GBP000 GBP000
---------------------------------------------- ----------------- ------------------ ------------------ ---------
Interest payable on bank loans and overdrafts - subsidiaries 2,878 5,214 8,284
- joint ventures 1,502 1,619 2,703
---------------------------------------------------------------- ------------------ ------------------ ---------
Total interest payable on bank loans and overdrafts 4,380 6,833 10,987
Other interest payable and similar charges - subsidiaries 1,487 2,188 2,908
- joint ventures 104 101 203
Interest capitalised - joint ventures - (1,815) (1,815)
---------------------------------------------- ----------------- ------------------ ------------------ ---------
Total finance costs 5,971 7,307 12,283
Interest receivable and similar income - subsidiaries (328) (96) (274)
- joint ventures (18) (6) (23)
---------------------------------------------------------------- ------------------ ------------------ ---------
See-through net finance costs 5,625 7,205 11,986
----------------------------------------------------------------- ------------------ ------------------ ---------
See-through Property Portfolio
Helical's share of the investment, land and development property portfolio in subsidiaries and joint ventures is shown in the table below.
At At
30 September 2023 At 31 March
GBP000 30 September 2022 2023
GBP000 GBP000
----------------------------------------------- ----------------- ------------------ ------------------ ---------
Investment property fair value - subsidiaries 602,650 751,250 693,550
- joint ventures 142,900 156,485 145,975
----------------------------------------------------------------- ------------------ ------------------ ---------
Total Investment property fair value 745,550 907,735 839,525
Land and development stock - subsidiaries 28 2,089 28
- joint ventures - 4,663 539
----------------------------------------------------------------- ------------------ ------------------ ---------
Total land and development stock 28 6,752 567
Total land and development stock surplus 302 302 302
------------------------------------------------------------------ ------------------ ------------------ ---------
Total land and development stock at fair value 330 7,054 869
------------------------------------------------------------------ ------------------ ------------------ ---------
See-through property portfolio 745,880 914,789 840,394
------------------------------------------------------------------ ------------------ ------------------ ---------
See-through Net Borrowings
Helical's share of borrowings and cash deposits in subsidiaries and joint ventures is shown in the table below.
At At
At 30 September 2022 31 March
30 September 2023 Restated(1) 2023
GBP000 GBP000 GBP000
------------------------------------------------------- ------------------- ------------------ ---------
Gross borrowings more than one year - subsidiaries 227,176 246,100 226,677
------------------------------------ ----------------- ------------------- ------------------ ---------
Total 227,176 246,100 226,677
------------------------------------------------------- ------------------- ------------------ ---------
Gross borrowings less than one year - joint ventures 61,634 54,603 59,416
------------------------------------ ----------------- ------------------- ------------------ ---------
Total 61,634 54,603 59,416
------------------------------------------------------- ------------------- ------------------ ---------
Cash and cash equivalents - subsidiaries (37,040) (63,348) (50,925)
- joint ventures (2,207) (4,516) (3,749)
------------------------------------------------------ ------------------- ------------------ ---------
Total (39,247) (67,864) (54,674)
------------------------------------------------------- ------------------- ------------------ ---------
See-through net borrowings 249,563 232,839 231,419
------------------------------------------------------- ------------------- ------------------ ---------
(1) Trade and other receivables and cash and cash equivalents have been restated as at 30 September 2022 following the IFRIC agenda decision in respect of demand deposits with restrictions on use arising from a contract with a third party (see Note 29).
25. See-through Net Gearing and Loan to Value
At At
At 30 September 2022 31 March
30 September 2023 Restated(1) 2023
GBP000 GBP000 GBP000
-------------------------- ------------------- ------------------ ---------
Property portfolio 745,880 914,789 840,394
Net borrowings 249,563 232,839 231,419
Net assets 502,328 692,695 608,675
See-through net gearing 49.7% 33.6% 38.0%
See-through loan to value 33.5% 25.4% 27.5%
-------------------------- ------------------- ------------------ ---------
(1) Trade and other receivables and cash and cash equivalents have been restated as at 30 September 2022 following the IFRIC agenda decision in respect of demand deposits with restrictions on use arising from a contract with a third party (see Note 29).
26. Total Accounting Return
At At
30 September 2023 At 31 March
GBP000 30 September 2022 2023
GBP000 GBP000
--------------------------------------- ------------------ ------------------ ---------
Brought forward IFRS net assets 608,675 687,043 687,043
Carried forward IFRS net assets 502,328 692,695 608,675
--------------------------------------- ------------------ ------------------ ---------
(Decrease)/increase in IFRS net assets (106,347) 5,652 (78,368)
Dividends paid 9,540 10,092 13,842
--------------------------------------- ------------------ ------------------ ---------
Total accounting return (96,807) 15,744 (64,526)
Total accounting return percentage (15.9)% 2.3% (9.4)%
--------------------------------------- ------------------ ------------------ ---------
At At
30 September 2023 At 31 March
GBP000 30 September 2022 2023
GBP000 GBP000
----------------------------------------- ------------------ ------------------ ---------
Brought forward EPRA net tangible assets 613,455 713,279 713,279
Carried forward EPRA net tangible assets 502,334 685,608 613,455
----------------------------------------- ------------------ ------------------ ---------
Decrease in EPRA net tangible assets (111,121) (27,671) (99,824)
Dividends paid 9,540 10,092 13,842
----------------------------------------- ------------------ ------------------ ---------
Total EPRA accounting return (101,581) (17,579) (85,982)
Total EPRA accounting return percentage (16.6)% (2.5)% (12.1)%
----------------------------------------- ------------------ ------------------ ---------
27. Total Property Return
At At
30 September 2023 At 31 March
GBP000 30 September 2022 2023
GBP000 GBP000
------------------------------------------------------ ------------------ ------------------ ---------
See-through net rental income 12,401 18,182 33,490
See-through development (losses)/profits (514) 969 3,237
See-through revaluation loss (96,676) (19,655) (92,759)
See-through net gain on sale of Investment properties - 4,535 4,630
------------------------------------------------------ ------------------ ------------------ ---------
Total property return (84,789) 4,031 (51,402)
------------------------------------------------------ ------------------ ------------------ ---------
28. Capital Commitments
The Group has a commitment of GBP835,000 (31 March 2023: GBP835,000) relating to the finalisation works at The JJ Mack Building, EC1.
In July 2023, Helical and Transport for London entered into a Joint Venture Agreement with a commitment to purchase a portfolio of three over-station development sites. The Bank OSD, EC4 site will be acquired in October 2024 for GBP32.9m (our share), the Southwark OSD, SE1 site in July 2025 for GBP11.0m (our share) and the Paddington OSD, W2 site in January 2026 for GBP30.2m (our share).
29. Prior year adjustment
The Group has assessed the impact of the IFRS Interpretation Committee's (IFRIC) recent Agenda Decision in respect of Demand Deposits with Restrictions on Use arising from a Contract with a Third Party accounted for under IAS 7. The Group holds tenant deposits in separate bank accounts, the use of which is restricted under the terms of the lease agreements. Following the clarification by IFRIC, these tenant deposits are judged to meet the definition of restricted cash under IAS 7. The Group's accounting policy has been updated to align with this clarification.
The Group comparative balances have been restated to reflect this change in accounting policy, which resulted in the below reclassification of tenant deposits from trade and other receivables to cash and cash equivalents. There was no impact upon the Income Statement or the Statement of Changes in Equity for the period ended 30 September 2022.
30 September
30 September 2022
2022 Restatement Restated
Balance Sheet GBP000 GBP000 GBP000
---------------- ------------ ------------- ------------
Cash and cash
equivalents 54,378 8,970 63,348
Trade and other
receivables 36,551 (8,970) 27,581
LTV 26.4% -1.0% 25.4%
----------------- ------------ ------------- ------------
30 September
30 September 2022
2022 Restatement Restated
Cash Flow Statement GBP000 GBP000 GBP000
-------------------------- ------------ ------------- ------------
Change in trade and other
receivables (504) (5,707) (6,211)
--------------------------- ------------ ------------- ------------
Appendix 1 - Glossary of Terms
Capital value (psf)
The open market value of the property divided by the area of the property in square feet.
Company or Group or Helical
Helical plc and its subsidiary undertakings.
Diluted figures
Reported amounts adjusted to include the effects of potential shares issuable under the Director and employee remuneration schemes.
Earnings per share (EPS)
Profit after tax divided by the weighted average number of ordinary shares in issue.
EPRA
European Public Real Estate Association.
EPRA earnings per share
Earnings per share adjusted to exclude gains/losses on sale and revaluation of Investment properties and their deferred tax adjustments, the tax on profit/loss on disposal of Investment properties, trading property profits/losses, movement in fair value of available-for-sale assets and fair value movements on derivative financial instruments, on an undiluted basis. Details of the method of calculation of the EPRA earnings per share are available from EPRA (see Note 10).
EPRA net disposal value per share
Represents the Shareholders' value under a disposal scenario, where deferred tax, financial instruments and certain other adjustments are calculated to the full extent of their liability, net of any resulting tax (see Note 22).
EPRA net reinstatement value per share
Net asset value adjusted to reflect the value required to rebuild the entity and assuming that entities never sell assets. Assets and liabilities, such as fair value movements on financial derivatives, that are not expected to crystallise in normal circumstances and deferred taxes on property valuation surpluses are excluded (see Note 22).
EPRA net tangible assets per share
Assumes that entities buy and sell assets, thereby crystallising certain levels of unavoidable deferred tax, but excludes assets and liabilities, such as fair value movements on financial derivatives, that are not expected to crystallise in normal circumstances and deferred taxes on property valuation surpluses are excluded (see Note 22).
EPRA topped-up NIY
The current annualised rent, net of costs, topped-up for contracted uplifts, expressed as a percentage of the fair value of the relevant property.
Estimated rental value (ERV)
The market rental value of lettable space as estimated by the Group's valuers at each Balance Sheet date.
Initial yield
Annualised net passing rents on Investment properties as a percentage of their open market value.
Like-for-like valuation change
The valuation gain/loss, net of capital expenditure, on those properties held at both the previous and current reporting period end, as a proportion of the fair value of those properties at the beginning of the reporting period plus net capital expenditure.
MSCI INC. (MSCI IPD)
MSCI INC. is a company that produces independent benchmarks of property returns using its Investment Property Databank (IPD).
Net asset value per share (NAV)
Net assets divided by the number of ordinary shares at the Balance Sheet date (see Note 22).
Net gearing
Total borrowings less short-term deposits and cash as a percentage of net assets.
Net internal area (NIA)
The usable area within a building measured to the internal face of the perimeter walls at each floor level.
Passing rent
The annual gross rental income being paid by the tenant.
Reversionary yield
The income/yield from the full estimated rental value of the property on the market value of the property grossed up to include purchaser's costs, capital expenditure and capitalised revenue expenditure.
See-through/Group share
The consolidated Group and the Group's share in its joint ventures (see Note 24).
See-through net gearing
The see-through net borrowings expressed as a percentage of net assets (see Note 25).
Total Accounting Return
The growth in the net asset value of the Company plus dividends paid in the Period, expressed as a percentage of net asset value at the start of the Period (see Note 26).
Total Property Return
The total of net rental income, trading and development profits and net gain on sale and revaluation of Investment properties on a see-through basis (see Note 27).
Total Shareholder Return (TSR)
The growth in the ordinary share price as quoted on the London Stock Exchange plus dividends per share received for the Period expressed as a percentage of the share price at the beginning of the Period.
True equivalent yield
The constant capitalisation rate which, if applied to all cash flows from an Investment property, including current rent, reversions to current market rent and such items as voids and expenditures, equates to the market value. Assumes rent is received quarterly in advance.
Unleveraged returns
Total property gains and losses (both realised and unrealised) plus net rental income expressed as a percentage of the total value of the properties.
WAULT
The total contracted rent up to the first break, or lease expiry date, divided by the contracted annual rent.
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: reception@helical.co.uk
W: www.helical.co.uk
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