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HELICAL PLC NEX:HLCL.GB NEX Ordinary Share GB00B0FYMT95
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Helical PLC Final Results

23/05/2019 7:01am

UK Regulatory (RNS & others)


HELICAL (NEX:HLCL.GB)
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2 Months : From May 2019 to Jul 2019

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RNS Number : 9252Z

Helical PLC

23 May 2019

HELICAL PLC

("Helical" or the "Group" or the "Company")

Annual Results for the Year to 31 March 2019

A YEAR OF STRONG PROGRESS

Gerald Kaye, Chief Executive, commented:

"The results for the year to 31 March 2019 reflect significant progress for Helical, now an office-led investment and development company focused purely on London and Manchester. We have completed three of our four on-site office development schemes, have let 304,073 sq ft at rents 4.3% above ERVs and have sold GBP167m of investment assets at a 12.0% premium to book value.

"We now have a collection of newly redeveloped or refurbished assets of premium quality which are attractive to occupiers and situated in desirable locations. We were delighted to announce earlier this week the acquisition, in a 50:50 joint venture, of a major site for the development of c.192,000 sq ft of offices in Farringdon, London EC1. This scheme supplements our existing assets located in the Tech Belt in EC1 and E1.

"We have a tremendous track record in London, built up over the last 25 years, and we believe this experience and our longstanding sector relationships will enable us to continue to add new opportunities to our pipeline. Our increased financial capacity, following the transformation of the portfolio over the last two years, allied to our current operational capacity, enables us to look forward with confidence in our ability to deliver capital profits and increased earnings."

Operational Performance

   --    In our office development/refurbishment programme: 

- Practical completion was achieved at The Tower, London EC1 in August 2018, at One Bartholomew, London EC1 in December 2018 and at Trinity, Manchester in January 2019, delivering a total of 455,127 sq ft of new space.

- Construction continues at our 88,680 sq ft office development at Farringdon East, renamed Kaleidoscope, London EC1, with completion expected in December 2019.

-- 268,782 sq ft of new London office lettings during the year delivered contracted rent of GBP18.7m (Helical share GBP6.7m at 3.2% above 31 March 2018 ERVs).

   --    Post year end, 62,854 sq ft has been let at One Bartholomew at premium rents. 

-- In Manchester, five office lettings of 15,191 sq ft, with a further 8,208 sq ft let post year end, generated rental income of GBP538,000 at 15.9% above 31 March 2018 ERVs.

-- We have completed six lettings of 20,100 sq ft to restaurants or retailers, including Albion & East (trading as Serata Hall) at The Tower, London EC1 and Stem + Glory at Barts Square, London EC1 for contracted rents of GBP871,000 (Helical share GBP686,000) at 9.0% above 31 March 2018 ERVs.

-- Investment property sale proceeds of GBP167m since 31 March 2018 achieved at 12.0% above book value.

Financial Highlights

Earnings

   --    IFRS basic earnings per share of 35.8p (2018: 22.3p). 
   --    IFRS Profit before tax of GBP43.5m (2018: GBP30.8m). 
   --    Total Accounting Return(1) of 8.4% (2018: 5.3%). 
   --    See-through Total Property Return(1) of GBP81.4m (2018: GBP68.8m): 
   -     Group's share(1) of net rental income of GBP25.2m (2018: GBP36.1m). 
   -     Development losses of GBP4.4m (2018: GBP8.0m), after provisions of GBP13.7m (2018: GBP4.1m). 
   -     Net gain on sale and revaluation of investment properties of GBP60.6m (2018: GBP40.7m). 
   --    EPRA loss per share(1) of 8.4p (2018: 7.0p). 
   --    Final dividend proposed of 7.50p per share (2018: 7.00p), up 7.1%. 
   --    Total dividend for the year of 10.10p (2018: 9.50p), up 6.3%. 

Balance Sheet

   --    Net asset value up 6.3% to GBP567.4m (31 March 2018: GBP533.9m). 
   --    EPRA net asset value per share(1) up 3.0% to 482p (31 March 2018: 468p). 
   --    EPRA triple net asset value per share(1) up 3.8% to 465p (31 March 2018: 448p). 

Property Valuations

   --    IFRS property portfolio value of GBP778.8m (31 March 2018: GBP791.9m). 
   --    See-through property portfolio(1) of GBP876.4m (31 March 2018: GBP909.6m). 

-- Total property portfolio performance, as measured by MSCI, of 10.1% compared to the MSCI Central London Offices Total Return Index of 4.8%.

-- See-through investment property valuation gain, on a like-for-like basis, of 6.8% (7.4% including purchases and gains on sales).

Financing

   --    See-through loan to value(1) reduced to 30.6% (31 March 2018: 39.9%). 
   --    See-through net borrowings(1) of GBP268.6m (2018: GBP362.9m). 

-- Average maturity of the Group's share(1) of secured debt of 3.4 years (31 March 2018: 3.5 years), increasing to 4.2 years, on exercise of options to extend current facilities.

   --    See-through average cost of secured facilities(1) of 4.1% (31 March 2018: 4.4%). 
   --    GBP100m 4.0% Convertible Bond to be repaid in June 2019 from existing cash resources. 
   --    Group's share(1) of cash and undrawn bank facilities of GBP382m (31 March 2018: GBP277m). 

Portfolio Update

London Portfolio

-- 6.6% valuation increase, on a like-for-like basis, of our see-through London investment portfolio, valued at GBP693.8m at 31 March 2019 (85.0% of investment portfolio) compared to GBP699.9m at 31 March 2018 (84.8% of investment portfolio).

-- Contracted rents on our see-through London investment portfolio of GBP27.5m (2018: GBP28.4m) compared to an ERV of GBP42.4m (2018: GBP49.6m).

   --    WAULT of 8.0 years on the London portfolio (31 March 2018: 5.8 years). 

Manchester Portfolio

-- 7.8% valuation increase, on a like-for-like basis, of our Manchester investment portfolio, valued at GBP122.7m at 31 March 2019 (15.0% of investment portfolio) compared to GBP98.0m at 31 March 2018 (11.9% of investment portfolio).

-- Contracted rents on the Manchester portfolio at 31 March 2019 increased to GBP5.7m (2018: GBP4.7m) compared to an ERV of GBP9.0m (2018: GBP8.1m).

   --   WAULT of 3.9 years on the Manchester portfolio (31 March 2018: 4.2 years). 

For further information, please contact:

 
Helical plc                     020 7629 0113 
Gerald Kaye (Chief Executive) 
Tim Murphy (Finance Director) 
 
Address:                        5 Hanover Square, London W1S 
                                 1HQ 
Website:                        www.helical.co.uk 
Twitter:                        @helicalplc 
 
FTI Consulting                  020 3727 1000 
Dido Laurimore/ Richard Gotla 
schelical@fticonsulting.com 
 

Results Presentation

Helical will be holding a presentation for analysts and investors starting at 9am on Thursday 23 May 2019 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 conference call facility will be available. The dial-in details are as follows:

 
Participants, Local - London, United Kingdom:   +44 (0)330 336 9125 
Confirmation Code:                              8740144 
 

Webcast Link:

https://webcasting.brrmedia.co.uk/broadcast/5cadfaadeb566331974d5fc4

(1) See Glossary for definition of terms. The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). 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 more relevant information about the Group's share of assets and liabilities, income and expenses in subsidiaries and joint ventures.

Chief Executive's Statement

I am pleased to present the Company's 2019 Annual Results.

A Year of Progress

The results for the year to 31 March 2019 reflect significant progress for Helical, now an office-led investment and development company focused purely on London and Manchester. We have completed three of our four on-site office development schemes, have let 304,073 sq ft at rents 4.3% above ERVs and have sold GBP167m of investment assets at a 12.0% premium to book value.

We now have a collection of newly redeveloped or refurbished assets of premium quality which are attractive to occupiers and situated in desirable locations. We were delighted to announce earlier this week the acquisition, in a 50:50 joint venture, of a major site for c.192,000 sq ft of offices in Farringdon, London EC1. This scheme supplements our existing assets located in the Tech Belt in EC1 and E1.

The London investment portfolio, following the completion of recent office developments and the sale of The Shepherds Building, was 83.8% let (31 March 2018: 91.7%), with contracted rent of GBP27.5m (2018: GBP28.4m), and with good interest in the remaining available space. In March we launched our redeveloped office building in Manchester, Trinity, to the market and contracted rents on the Manchester portfolio have grown from GBP4.7m (87.2% let) to GBP5.7m (80.2% let).

Our schemes at The Tower, London EC1 and One Bartholomew, London EC1 have both received BREEAM "Excellent" ratings from this world-leading sustainability assessment methodology, along with our other schemes at The Warehouse and The Studio, London EC1, 25 Charterhouse Square, London EC1 and One Creechurch Place, London EC3.

Results for the Year

Profit before tax for the year to 31 March 2019 increased by 41.2% from GBP30.8m to GBP43.5m. Total Property Return increased to GBP81.4m (2018: GBP68.8m) and included net rents of GBP25.2m (2018: GBP36.1m), offset by development losses, largely a result of the impact of the collapse of Carillion plc at Barts Square, London EC1, of GBP4.4m (2018: GBP8.0m). The gain on sale and revaluation of the investment portfolio contributed GBP60.6m (2018: GBP40.7m).

Net finance costs of GBP18.4m were substantially lower than in 2018 (GBP35.2m) as a result of the reduction in borrowings achieved in the last two years. However, the Income Statement was adversely affected by the reduction in medium and long-term interest rates over the year which led to a GBP3.3m charge (2018: credit of GBP4.0m) arising from the valuation of the Company's derivative financial instruments. The valuation of the Company's Convertible Bond provided a credit of GBP0.9m (2018: charge of GBP1.6m). Recurring administration costs were marginally lower at GBP10.9m (2018: GBP11.0m) whilst performance related awards increased to GBP5.2m (2018: GBP1.7m) with National Insurance on these awards of GBP0.7m (2018: GBP0.1m).

The Board is confident of the letting prospects of the remaining vacant space in the investment portfolio and, with net rental income increasing over the next few years, the Board expects the Group's EPRA earnings to improve significantly in the near future. This expectation has led the Board to recommend to Shareholders an increase in the final dividend of 7.1% to 7.50p (2018: 7.00p) which, together with the interim dividend of 2.60p paid in December 2018, takes the total dividend for the year to 10.10p (2018: 9.50p), an overall increase of 6.3%.

Performance

We measure our performance at both portfolio and Company level, seeking to outperform the relevant sector indices and our peer group in the medium and long-term.

IFRS basic earnings per share increased to 35.8p (2018: 22.3p) with EPRA loss per share of 8.4p (2018: 7.0p), reflecting a reduction in net rental income as the direct result of the sales of income producing investment properties in the last 18 months. On a like-for-like basis, the investment portfolio increased in value by 6.8% (7.4% including purchases and gains on sales). However, with the sales in the year of GBP167m, 12% above book value, the see-through portfolio value adjusted to GBP876m (31 March 2018: GBP910m).

The unleveraged return of our property portfolio, as measured by MSCI, was 10.1% (2018: 11.1%). We now compare our portfolio performance to two MSCI benchmarks. The March MSCI Annual All Properties Index produced a return of 3.6% (2018: 9.3%) with an upper quartile return of 7.0% (2018: 12.0%). The MSCI Central London Offices Total Return Index produced a return of 4.8% (2018: 7.5%) with an upper quartile return of 6.2% (2018: 9.0%).

Total Accounting Return, being the growth in the net asset value of the Company plus dividends paid in the year, was 8.4% (2018: 5.3%). EPRA net asset value per share was up 3.0% to 482p (31 March 2018: 468p), with EPRA triple net asset value per share up 3.8% to 465p (31 March 2018: 448p).

Finance

The Company uses gearing on a tactical basis, dependant on market fluctuations, being raised to accentuate performance when property returns are judged to materially outperform the cost of debt and lowered when seeking to reduce exposure to the property market.

During the year to 31 March 2019, the Group generated gross proceeds of GBP167m from the sale of investment properties and GBP45m from the sale of development stock. These proceeds, net of investment in the portfolio of GBP124m, were used to reduce net borrowings by GBP94m, significantly reducing future finance costs.

The see-through loan to value ratio ("LTV") reduced to 30.6% at the year end (31 March 2018: 39.9%) and our see-though net gearing, the ratio of net borrowings to the net asset value of the Group, has fallen to 47.3% (31 March 2018: 68.0%) over the same period.

During the year, the average debt maturity on secured loans, on a see-through basis, was 3.4 years (31 March 2018: 3.5 years), increasing to 4.2 years on exercise of options to extend the Group's GBP150m RCF. No secured loan is repayable before July 2021. The average cost of debt at 31 March 2019 was 4.0% (31 March 2018: 4.3%). The Group's remaining unsecured debt instrument, the GBP100m Convertible Bond, will be repaid in June 2019, reducing the Group's annual interest payments by GBP4.0m. The Group has a significant level of liquidity with see-through cash and unutilised bank facilities of GBP382m (31 March 2018: GBP277m) to fund the repayment of the Convertible Bond, capital works on its portfolio and future acquisitions.

Board Matters

At this year's Annual General Meeting ("AGM") our Chairman and former Chief Executive, Mike Slade OBE, will step down from the Board after 35 years' service. Mike has been an inspiration to everyone at Helical and to many in the property industry during this time and, on behalf of the rest of the Board, I thank him for his considerable contribution to the success of Helical and wish him well for his retirement. He recently received an OBE for services to charity, for his work with LandAid, the sector's main charity, an award thoroughly deserved.

At the AGM, Michael O'Donnell will also step down after eight years serving as a Non-Executive Director. On behalf of the Board, I would like to thank him for his service to the Company.

In September 2018, we welcomed Joe Lister, CFO at Unite Group, as a Non-Executive Director. Joe will assume the role of Chairman of the Audit & Risk Committee ("Committee") on appointment to the Board at the close of the forthcoming AGM. Joe will replace Richard Grant as Chairman of the Committee, with Richard replacing Mike Slade as Chairman of the Board.

The Future

Helical is primarily a capital growth stock, albeit one with an increasingly important income stream as our redeveloped and refurbished investment assets become let. We have a tremendous track record in London, built up over the last 25 years, and we believe this experience and our longstanding sector relationships will enable us to add new opportunities to our pipeline. Our increased financial capacity, following the transformation of the portfolio over the last two years, allied to our current operational capacity, enables us to look forward with confidence in our ability to deliver capital profits and increased earnings.

Gerald Kaye

Chief Executive

23 May 2019

Our Market

Overview

Helical's core business is developing and owning dynamic, well located office space in London and Manchester. With intelligent stock selection, we aim to maximise returns by development and refurbishment as well as through significant asset management initiatives.

London

In our judgement, the London commercial property market continues to provide the best source of capital profits and we expect this to remain the case for the foreseeable future, notwithstanding the current political chaos over Brexit.

In order for Helical to generate capital profits, the Group needs to identify those areas where it believes tenant demand is, or will become, strong and to source opportunities in those areas at an appropriate entry price. Equally important, we need to provide inspiring working environments suited to the needs of our customers, the tenants. Using the skills, knowledge and expertise gained over many years, the Helical team aims to deliver attractive and exciting office space in our identified locations. In a low growth environment, stock selection needs to reflect the granular characteristics that will attract our target market of occupiers.

Helical has based its investment decisions in London on four continuing major developments in the office market. First, the growth of the London population; second, the continuing and rapid expansion of the creative industries (predominantly in technology and media); third, the migration of occupiers across Central London to the City and East London; and fourth, a fast-growing market in flexible leasing.

London's population is forecast to grow to 9.5m by 2026, a 9% increase since mid-2016. This will present challenges, particularly in terms of infrastructure, but will also provide opportunities, particularly in the demand for new and refurbished offices. Whilst the Elizabeth Line has again been delayed, its eventual opening will be a boost to travelling in London.

The UK is a global leader in the creative industries, an area we have targeted with our portfolio. Companies involved in media, advertising and marketing, technology and other creative industries comprised 57% of our new lettings in the year (31 March 2018: 59%).

The third factor influencing our choice of location for our portfolio is the migration of occupiers from West to East across Central London to the City and East London. The desire to be part of creative hubs, surrounded by like-minded individuals, located a short travelling distance from home are common themes in discussing requirements with tenants. Most obviously, those hubs are in the Tech Belt from King's Cross to Whitechapel.

Finally, the growth of flexible leasing is having a continuing effect on the commercial office letting market in London and has spread to regional cities. At Helical we seek early and continued engagement with customers and look to develop long-standing relationships with them. By offering flexible leases on our multi-let assets, which allow them to occupy space commensurate with their requirements, we target long-term retention of our customers.

In London, Helical has been building up a portfolio of multi-tenanted office buildings in the Tech Belt locations of Farringdon, the Old Street roundabout and Whitechapel. We also own two assets in Chiswick, West London. By owning these "clusters" or "villages" of office buildings, the Company now has a portfolio of assets with multiple lease events leading to ongoing asset management opportunities with the potential to lock in future rental growth.

The Company is also seeking to expand its portfolio by taking on additional schemes in Central London either on its own balance sheet, or in the case of larger projects, by co-investment or by forward selling/funding them, to create the opportunity for significant profit shares but with reduced balance sheet exposure.

Manchester

We continue to believe that Manchester presents an attractive opportunity for us outside of London. The Manchester office market continues to outperform all other regional markets and demonstrates rich and diverse opportunities. 2018 saw a record year of take up with 1.75m sq ft of lettings across 314 transactions. Manchester has also seen the greatest volume of inward investment deals compared to the five other major UK regional cities and the office market demonstrates resilience and growth despite the background of political uncertainty.

Manchester benefits from the highest graduate retention rate outside of London and population growth within the city centre continue to rise. Research indicates the city will have 10,000 more office workers by 2021 than it did in 2018, whilst continued strong economic and employment growth forecasts reaffirm our belief that outside of London, Manchester is the best regional city in which to invest.

In Manchester we now have four assets, following the disposal of 31 Booth Street in December 2018. Our buildings, located across the city centre, have proven to be attractive to occupiers. Each building is specific in its offering, location, size and rental tone, with the opportunity for Helical to apply the skills, knowledge and property expertise gained over many years in London. The Manchester portfolio, of multi-tenanted office buildings, provides Helical with a resilient income stream outside of London.

Looking Forward

Our ambition is to have a balanced portfolio that generates sufficient net rental income to firstly, exceed all of our recurring costs and second, provide a surplus significantly greater than our annual dividend to Shareholders. We have an ERV on the portfolio of GBP51.5m and expect to generate this surplus once all of our current development and asset management activities are complete. We are also seeking a pipeline of opportunities to grow the balance sheet through the creation of development profits and capital surpluses.

Performance

We measure our performance using a number of financial and non-financial key performance indicators ("KPIs").

We incentivise management to outperform the Group's peers by setting challenging targets and using these performance indicators to measure success. We design our remuneration packages to align management's interests with Shareholders' aspirations.

MSCI (formerly IPD)

MSCI produces a number of independent benchmarks of property returns that are regarded as the main industry indices.

MSCI has compared the ungeared performance of Helical's total property portfolio against that of portfolios within MSCI for the last 20 years. The Group's annual performance target is to exceed the top quartile of the MSCI Annual March All Properties Universe, which it has consistently achieved. Helical's ungeared performance for the year to 31 March 2019 was 10.1% (2018: 11.1%). This compares to the MSCI Annual March All Properties Universe of 3.6% (2018: 9.3%) with an upper quartile return of 7.0% (2018: 12.0%).

In addition, the Annual Bonus Scheme 2018 performance criteria include the comparison of the Group's performance with the MSCI Central London Offices Total Return Index, with target performance to match the index and outperformance exceeding it by 3.25%. In the year to 31 March 2019, this index showed a return of 4.8% (2018: 7.5%) with an upper quartile return of 6.2% (2018: 9.0%).

Helical's unleveraged portfolio returns to 31 March 2019 were as follows:

 
                                                     1 year  3 years  5 years  10 years  20 years 
---------------------------------------------------  ------  -------  -------  --------  -------- 
Helical (%)                                            10.1     10.2     14.4      11.9      12.8 
MSCI Annual March All Properties Universe (%)           3.6      5.7      9.1       9.8       8.0 
Helical's Percentile Rank                                 5        8        3        10         2 
MSCI Central London Offices Total Return Index (%)      4.8      4.8     10.6      12.9       9.6 
---------------------------------------------------  ------  -------  -------  --------  -------- 
 

Source: MSCI

Helical's share of the trading and development portfolio (6.8% of gross property assets) is included in its performance, as measured by MSCI, at the lower of book cost or fair value and uplifts are only included on the sale of an asset.

EPRA Net Asset Value Per Share

The Group's main objective is to maximise growth in net asset value per share, which we seek to achieve through increases in investment portfolio values and from retained earnings from other property related activity. EPRA net asset value per share is the property industry's preferred measure of the proportion of net assets attributable to each share as it includes the fair value of net assets on an ongoing long-term basis. The adjustments to net asset value to arrive at this figure are shown in Note 22 to the financial statements.

The EPRA net asset value per share at 31 March 2019 increased by 3.0% to 482p (31 March 2018: 468p). EPRA triple net asset value per share at 31 March 2019 increased by 3.8% to 465p (31 March 2018: 448p).

Total Shareholder Return

Total Shareholder Return is a measure of the return on investment for Shareholders. It combines share price appreciation and dividends paid to show the total return to the Shareholder expressed as an annualised percentage.

The Total Shareholder Return in the year to 31 March 2019 was 5.2% (2018: 6.1%).

 
                                                      Performance Measured Over 
                      1 year        3 years        5 years       10 years       15 years       20 years       25 years 
                Total return   Total return   Total return   Total return   Total return   Total return   Total return 
                        pa %           pa %           pa %           pa %           pa %           pa %           pa % 
-------------  -------------  -------------  -------------  -------------  -------------  -------------  ------------- 
Helical 
 plc(1)                  5.2          (2.9)          (0.1)            3.6            6.4            9.0           10.3 
UK Equity 
 Market(2)               6.4            9.5            6.1           11.1            7.8            5.1            7.4 
Listed Real 
 Estate 
 Sector 
 Index(3)              (0.3)            2.4            4.3           12.5            4.7            5.8            6.2 
Direct 
 Property - 
 monthly 
 data(4)                 5.6            6.8           10.1           10.0            7.3            8.3            8.7 
-------------  -------------  -------------  -------------  -------------  -------------  -------------  ------------- 
 
   1.   Growth over all years to 31/03/19. 
   2.   Growth in FTSE All-Share Return Index over all years to 31/03/19. 

3. Growth in FTSE 350 Real Estate Super Sector Return Index over all years to 31/03/19. For data prior to 30 September 1999, the FTSE All Share Real Estate Sector Index has been used.

   4.   Growth in Total Return of MSCI UK Monthly Index (All Property) over all years to 31/03/19. 

Total Accounting Return

Total Accounting Return is the growth in the net asset value of the Group plus dividends paid in the reporting year, expressed as a percentage of the net asset value at the beginning of the period. The metric measures the growth in Shareholders' Funds each year and is expressed as an absolute measure.

The Total Accounting Return in the year to 31 March 2019 was 8.4% (2018: 5.3%).

 
                          2019  2018  2017  2016  2015 
------------------------  ----  ----  ----  ----  ---- 
Total Accounting Return    8.4   5.3   8.3  22.5  21.1 
------------------------  ----  ----  ----  ----  ---- 
 

Average Length of Employee Service and Average Staff Turnover

A high level of staff retention remains a key feature of Helical's business. The Group retains a highly skilled and experienced team. We assess our success based on two key metrics: the average length of service of the Group's head office employees and average staff turnover.

The average length of service of the Group's head office employees at 31 March 2019 was 8.7 years and the average staff turnover during the year to 31 March 2019 was 6.3%.

 
                                                 2019  2018  2017  2016  2015 
-----------------------------------------------  ----  ----  ----  ----  ---- 
Average length of service at 31 March - years     8.7   7.9   8.0   7.6   7.6 
Staff turnover during the year to 31 March - %    6.3  15.2   5.7  14.3  12.5 
-----------------------------------------------  ----  ----  ----  ----  ---- 
 

Financial Review

 
 
   IFRS Performance                EPRA Performance 
 Profit Before Tax               EPRA EPS 
  GBP43.5m (2018: GBP30.8m)       Loss 8.4p (2018: loss 7.0p) 
 IFRS EPS                        EPRA NAV 
  35.8p (2018: 22.3p)             482p (31 March 2018: 468p) 
 IFRS Diluted NAV                EPRA Triple NAV465p (31 March 
  469p (31 March 2018: 445p)      2018: 448p) 
                                ------------------------------ 
 

Overview

Our development and asset management programme has driven the results for the year, principally through revaluation gains at The Tower, London EC1 and Kaleidoscope, London EC1, and from the sale of The Shepherds Building, London W14, at a significant premium to 31 March 2018 book value.

With the sale of the final three non-core assets in the year, the Group has completed its transformation to a London and Manchester investment and development company. Whilst the sales of GBP477m of investment assets over the last two years have reduced the Group's net rental income, the cash generated has been used to fund its development programme and repay debt, substantially reducing its LTV and finance costs. Going forward, we expect this income stream to grow as we work to capture the portfolio's ERV of GBP51.5m.

Results for the Year

The year to 31 March 2019 includes net rental income of GBP25.2m and a net gain on sale and revaluation of the investment portfolio of GBP60.6m, offset by development losses of GBP4.4m, leading to a Total Property Return of GBP81.4m (2018: GBP68.8m). Total administration costs of GBP17.2m (2018: GBP13.2m) and significantly reduced net finance costs of GBP18.4m (2018: GBP35.5m) contributed to a pre-tax profit of GBP43.5m (2018: GBP30.8m). EPRA net asset value per share increased by 3.0% to 482p (31 March 2018: 468p).

The proposed final dividend of 7.50p takes the total dividend for the year to 10.10p, a 6.3% increase on the previous year. With growing rents from our London and Manchester portfolios, the Company aims to continue to increase its annual dividend going forward.

The Group's real estate portfolio, including its share of assets held in joint ventures, reduced to GBP876.4m (31 March 2018: GBP909.6m) as gains from its annual revaluation and capital expenditure on the investment portfolio and development programme were offset by the sale of assets with a book value of GBP194m. One asset was purchased during the year, Fourways House, Manchester for GBP16.5m.

The cash generated from the sale of property assets during the year allowed the repayment of debt and reduced the Group's see-through loan to value to 30.6% (31 March 2018: 39.9%). The Group's weighted average cost of debt reduced to 4.0% (31 March 2018: 4.3%) and a weighted average debt maturity, excluding the Convertible Bond, of 3.4 years (2018: 3.5 years). The average maturity of the facilities would increase to 4.2 years following the two one-year extensions of the revolving credit facility. The GBP100m unsecured Convertible Bond is to be repaid in June 2019.

At 31 March 2019, the Group had unutilised bank facilities of GBP176m and GBP205m of cash on a see-through basis. The bank facilities are primarily available to fund the development of Kaleidoscope, London EC1, the construction of the last phase of residential at Barts Square, London EC1, future property acquisitions and to repay the GBP100m Convertible Bond in June 2019.

Total Property Return

We calculate our Total Property Return to enable us to assess the aggregate of income and capital profits made each year 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.

 
                         2019   2018   2017   2016   2015 
                         GBPm   GBPm   GBPm   GBPm   GBPm 
----------------------  -----  -----  -----  -----  ----- 
Total Property Return    81.4   68.8   79.9  164.6  155.3 
----------------------  -----  -----  -----  -----  ----- 
 

Earnings Per Share

The IFRS earnings per share increased from 22.3p to 35.8p and are based on the after tax earnings attributable to ordinary Shareholders divided by the weighted average number of shares in issue during the year.

On an EPRA basis, losses per share were 8.4p (2018: loss 7.0p), reflecting the Group's share of net rental income of GBP25.2m (2018: GBP36.1m) and development losses of GBP4.4m (2018: GBP8.0m), but excluding gains on sale and revaluation of investment properties of GBP60.6m (2018: GBP40.7m).

Net Asset Value

IFRS diluted net asset value per share increased from 445p to 469p and is a measure of Shareholders' Funds divided by the number of shares in issue at the year end, adjusted to allow for the effect of all dilutive share awards.

EPRA net asset value per share increased by 3.0% to 482p per share (31 March 2018: 468p). This movement arose principally from a total comprehensive income (retained profits) of GBP42.6m (2018: GBP26.3m), less GBP11.4m of dividends (31 March 2018: GBP10.2m) and the crystallisation of a GBP13.5m tax charge on the capital gain from the sale of The Shepherds Building, London W14.

EPRA triple net asset value per share increased by 3.8% to 465p (31 March 2018: 448p).

Income Statement

Rental Income and Property Overheads

Gross rental income receivable by the Group in respect of wholly owned properties reduced by 29.9% to GBP28.2m (2018: GBP40.2m), reflecting the partial capture of the investment portfolio's reversionary potential offset by sales of assets during the current and prior years. In the joint ventures, gross rents rose from GBP0.2m to GBP1.0m. Property overheads in respect of wholly owned assets and in respect of those assets in joint ventures remained steady at GBP4.1m (2018: GBP4.1m). After taking account of net rents receivable from our profit share partners of GBP0.1m (2018: payable of GBP0.1m), see-through net rents reduced by 30.2% to GBP25.2m (2018: GBP36.1m).

Development Profits

In the year under review the Group let the remaining space at One Creechurch Place, London EC3 which, under its role as development manager, allowed it to recognise GBP4.1m of profit. A further profit of GBP0.8m was recognised for carrying out a similar role at Barts Square, London EC1.

Provisions of GBP6.5m against our legacy retail development programme, non-core residential land and to satisfy cost indemnities given on the sale of our Retirement Villages in the prior year, combined with other costs of GBP0.2m, contributed to a net development loss of GBP1.8m (2018: GBP4.2m).

Share of Results of Joint Ventures

The revaluation of our investment assets held in joint ventures generated a surplus of GBP1.3m (2018: GBP3.3m). Under our development management agreement for One Bartholomew, Barts Square, London EC1, we recognised a net development fee of GBP3.9m as a result of achieving practical completion and letting progress, but an assessment of the book value of our land holdings at Barts Square development resulted in development provisions of GBP7.2m. A profit of GBP2.2m was recognised on the sale of the site at Hammersmith Town Hall.

Finance, administration, taxation and other sundry items added a further GBP4.8m (2018: GBP1.5m) of losses. Accounting adjustments to our interest in the One Creechurch Place joint venture generated surpluses of GBP1.4m, leaving a net loss from our joint ventures of GBP3.2m (2018: profit of GBP3.2m).

Gain on Sale and Revaluation of Investment Properties

During the year, we sold five investment assets for gross proceeds of GBP167.0m, generating a net overall profit of GBP15.0m. In London, we sold The Shepherds Building, W14 for GBP125.2m, a 12.3% premium to its 31 March 2018 book value. 31 Booth Street, Manchester was sold for GBP11.9m, a 29.6% premium to its 31 March 2018 book value, and we also sold three non-core assets for a combined price of GBP28.5m at a 6.2% premium to 31 March 2018 book value.

The valuation of our investment portfolio, on a see-through basis, continued to reflect the benefit of our refurbishment activities in London where we generated a valuation surplus of 7.4% overall (including purchases and gains on sales) and 6.6% on a like-for-like basis. In Manchester, the portfolio generated a surplus of 7.8% on a like-for-like basis. In total, the see-through investment portfolio showed a valuation surplus of 7.4% (including purchases and gains on sales), or 6.8% on a like-for-like basis.

The total impact on our results of the gain on sale and revaluation of our investment portfolio, including in joint ventures, was a net gain of GBP60.6m (2018: GBP40.7m).

Administration Costs

Administration costs in the Group, before performance-related awards, reduced slightly from GBP11.0m to GBP10.9m.

Performance related share awards and bonus payments, before National Insurance costs, were GBP5.2m (2018: GBP1.7m). Of this amount, the GBP2.3m (2018: GBP1.4m) charge for share awards under the Performance Share Plan is expensed through the Income Statement but added back to Shareholders' Funds through the Statement of Changes in Equity.

 
                                              2019     2018 
                                            GBP000   GBP000 
-----------------------------------------  -------  ------- 
Administration costs                        10,858   11,023 
Share awards                                 2,274    1,388 
Directors and senior executives' bonuses     2,929      289 
NIC on share awards and bonuses                692       65 
-----------------------------------------  -------  ------- 
Group                                       16,753   12,765 
In joint ventures                              406      468 
-----------------------------------------  -------  ------- 
Total                                       17,159   13,233 
-----------------------------------------  -------  ------- 
 

Finance Costs, Finance Income and Derivative Financial Instruments

Interest payable on secured bank loans, including our share of loans on assets held in joint ventures, but before capitalised interest, reduced to GBP12.9m (2018: GBP18.5m). Interest payable in respect of the unsecured bonds was GBP4.0m (2018: GBP8.4m). Bank charges, commitment fees, sundry interest and the amortisation of refinancing costs decreased to GBP5.8m (2018: GBP17.8m) due to the prior year's redemption of the 6% Retail Bond (GBP8.7m premium) and the repayment of bank debt. Capitalised interest reduced from GBP5.2m to GBP3.2m as development schemes progressed and as a result of the sale of the Retirement Village portfolio in the prior year, as well as the completion of The Tower, London EC1 in August 2018. Total finance costs, including joint ventures, decreased to GBP19.5m (2018: GBP39.5m).

Finance income earned, including in joint ventures, was GBP1.1m (2018: GBP4.3m). The movement in medium and long-term interest rate projections during the year contributed to a charge of GBP3.3m (2018: credit of GBP4.0m) on their mark-to-market valuation. The mark-to-market valuation of the Convertible Bond resulted in a credit of GBP0.9m (2018: charge of GBP1.6m).

Taxation

Helical pays corporation tax on its UK sourced net rental income, trading and development profits and realised chargeable gains, after offsetting administration and finance costs.

The current tax charge for the year of GBP9.0m (2018: credit of GBP0.4m) is primarily a result of the tax charge on the capital gain on the sale of The Shepherds Building, London W14. The majority of this tax liability had been recognised as a deferred tax liability in the prior year and this liability was reversed as a deferred tax credit during the year. This deferred tax credit was offset by an increased liability on the investment property revaluation surpluses recognised in the year.

Dividends

Helical follows a progressive dividend policy of increasing its dividends whilst retaining the majority of funds generated for investment to grow the business. As the Group completes and lets its current development programme, it expects to be able to reflect the growth in earnings in increased dividends paid to Shareholders. The interim dividend paid on 31 December 2018 of 2.60p was an increase of 4% on the previous interim dividend of 2.50p. The Company has proposed a final dividend of 7.50p, an increase of 7.1% on the previous year (2018: 7.00p), for approval by Shareholders at the 2019 AGM. In total, the dividend paid or payable in respect of the results for the year to 31 March 2019 will be 10.10p (2018: 9.50p), an increase of 6.3%. Since 2016, the compound annual growth rate of the Company's dividends has been 7.3%.

Balance Sheet

Shareholders' Funds

Shareholders' Funds at 1 April 2018 were GBP533.9m. The Group's results for the year added GBP42.6m (2018: GBP26.3m), net of tax, representing the total comprehensive income for the year. Movements in reserves arising from the Group's share schemes increased funds by GBP2.3m. The Company paid dividends to Shareholders amounting to GBP11.4m leaving a net increase in Shareholders' Funds from Group activities during the year of GBP33.5m to GBP567.4m.

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 2018                 802,134    22,623      824,757         2,189     (12,375)    814,571 
Acquisitions          - wholly owned        29,500         -       29,500             -            -     29,500 
Capital expenditure   - wholly owned        60,820         -       60,820             -            -     60,820 
 - joint ventures                                -     1,377        1,377             -            -      1,377 
Disposals             - wholly owned     (149,051)         -    (149,051)             -        1,501  (147,550) 
Revaluation 
 surplus              - wholly owned        48,097         -       48,097             -      (3,813)     44,284 
 - joint ventures                                -     1,382        1,382             -         (94)      1,288 
 - profit share 
  partners                                   (250)         -        (250)             -            -      (250) 
 --------------------------------------  ---------  --------  -----------  ------------  -----------  --------- 
Valuation at 31 March 2019                 791,250    25,382      816,632         2,189     (14,781)    804,040 
---------------------------------------  ---------  --------  -----------  ------------  -----------  --------- 
 

In the year to 31 March 2019, the Group acquired Fourways House, Manchester for GBP16.5m and paid additional consideration of GBP13.0m for Kaleidoscope, London EC1. The Group spent GBP62.2m on capital works on the investment portfolio, mainly at Kaleidoscope, London EC1 (GBP36.0m), The Tower, London EC1 (GBP10.5m), Barts Square, London EC1 (GBP1.4m), Trinity, Manchester (GBP6.9m) and 35 Dale Street, Manchester (GBP1.6m). The aggregate book value of the five investment assets sold during the year was GBP149.1m. Revaluation gains added GBP49.5m (GBP0.3m loss for our partners) to increase the see-through value of the portfolio, before lease incentives, to GBP816.6m (2018: GBP824.8m). The accounting for head leases and lease incentives resulted in a book value of the see-through investment portfolio of GBP804.0m (31 March 2018: GBP814.6m).

Debt and Financial Risk

In total, Helical's outstanding debt at 31 March 2019 of GBP479.2m (31 March 2018: GBP470.7m) had a weighted interest cost of 4.0% (31 March 2018: 4.3%) and a weighted average debt maturity excluding the Convertible Bond, of 3.4 years (31 March 2018: 3.5 years). The average maturity of the facilities would increase to 4.2 years following exercise of the two one-year extensions of the Group's GBP150m revolving credit facility. The GBP100m unsecured Convertible Bond is to be repaid in June 2019.

Debt Profile at 31 March 2019 - Excluding the Effect of Arrangement Fees

 
                             Total      Total                      Weighted average    Average 
                          facility   utilised  Available facility     interest rate   maturity       Extended* average 
                            GBP000     GBP000              GBP000                 %      Years          maturity Years 
-----------------------  ---------  ---------  ------------------  ----------------  ---------  ---------------------- 
Investment facilities      443,000    309,679             133,321               3.9        3.5                     4.4 
Development facilities      50,400     20,023              30,377               6.3        4.4                     4.4 
-----------------------  ---------  ---------  ------------------  ----------------  ---------  ---------------------- 
Total wholly owned         493,400    329,702             163,698               4.1        3.5                     4.3 
In joint ventures           51,684     48,980               2,704               4.0        2.8                     2.8 
-----------------------  ---------  ---------  ------------------  ----------------  ---------  ---------------------- 
Total secured debt         545,084    378,682             166,402               4.1        3.4                     4.2 
Convertible Bond           100,000    100,000                   -               4.0        0.2                     0.3 
Working capital             10,000          -              10,000                 -          -                     1.0 
Fair value of 
 Convertible Bond                -        468                   -                 -          -                       - 
-----------------------  ---------  ---------  ------------------  ----------------  ---------  ---------------------- 
Total unsecured debt       110,000    100,468              10,000               4.0        0.2                     0.3 
-----------------------  ---------  ---------  ------------------  ----------------  ---------  ---------------------- 
Total debt                 655,084    479,150             176,402               4.0        2.7                     3.6 
-----------------------  ---------  ---------  ------------------  ----------------  ---------  ---------------------- 
 

* Calculated on a fully utilised basis with the two one-year extensions of the revolving credit facility included.

Secured Debt

The Group arranges its secured investment and development facilities to suit its business needs as follows:

   -       Investment Facilities 

We have GBP150m of revolving credit facilities that enable the Group to acquire, refurbish, reposition and hold significant parts of our investment portfolio. Our London investment assets are primarily held in GBP293m of term loan secured facilities. The value of the Group's properties secured in these facilities at 31 March 2019 was GBP698m (31 March 2018: GBP706m) with a corresponding loan to value of 44.4% (31 March 2018: 45.3%). The average maturity of the Group's investment facilities at 31 March 2019 was 3.5 years (31 March 2018: 3.8 years), increasing to 4.4 years following the two one-year extensions of the revolving credit facility with a weighted average interest rate of 3.9% (31 March 2018: 4.5%).

   -       Development Facilities 

This facility finances the over-station development at Kaleidoscope, London EC1. The maturity of the Group's development facility at 31 March 2019 was 4.4 years with a weighted average interest rate of 6.3%. Excluding the impact of commitment fees, the weighted average interest rate of this facility is 4.2%.

   -          Joint Venture Facilities 

We hold a number of investment and development properties in joint venture with third parties and include in our reported figures our share, in proportion to our economic interest, of the debt associated with each asset. The average maturity of the Group's share of bank facilities in joint ventures at 31 March 2019 was 2.8 years (31 March 2018: 1.7 years) with a weighted average interest rate of 4.0% (31 March 2018: 3.6%).

Unsecured Debt

The Group's utilised unsecured debt is GBP100.5m (31 March 2018: GBP101.3m), as follows:

   -       Convertible Bond 

In June 2014, the Group raised GBP100m from the issue of a listed unsecured Convertible Bond with a 4.0% coupon, repayable in June 2019, or, subject to certain conditions, convertible at the option of the Bond holders into ordinary shares, unless a cash settlement option is exercised by the Company. The initial conversion price has been set at GBP4.9694 per share, representing a 35% premium above the price on the day of the issue and a premium of 59% above the Company's EPRA net asset value per share at 31 March 2014. The value of the Bond at 31 March 2019, as determined by the listed market price, was GBP100.5m (31 March 2018: GBP101.3m). The Group expects to repay the GBP100m Bond in June 2019 from existing cash resources.

   -       Short-term Working Capital Facilities 

These facilities provide access to additional working capital for the Group.

Cash and Cash Flow

At 31 March 2019, the Group had GBP382m (31 March 2018: GBP277m) of cash and agreed, undrawn, committed bank facilities including its share in joint ventures, as well as GBP25m (31 March 2018: GBP105m) of uncharged property on which it could borrow funds.

Net Borrowings and Gearing

Total gross borrowings of the Group, including in joint ventures, have increased from GBP470.7m to GBP479.2m during the year to 31 March 2019. After deducting cash balances of GBP205.2m (31 March 2018: GBP103.7m) and unamortised refinancing costs of GBP5.4m (31 March 2018: GBP4.1m), net borrowings reduced from GBP362.9m to GBP268.6m. The gearing of the Group, including in joint ventures, reduced from 68.0% to 47.3%.

 
                                              31 March   31 March 
                                                  2019       2018 
-------------------------------------------  ---------  --------- 
See-through gross borrowings                 GBP479.2m  GBP470.7m 
See-through cash balances                    GBP205.2m  GBP103.7m 
Unamortised refinancing costs                  GBP5.4m    GBP4.1m 
See-through net borrowings                   GBP268.6m  GBP362.9m 
Shareholders' Funds                          GBP567.4m  GBP533.9m 
See-through gearing - IFRS net asset value       47.3%      68.0% 
-------------------------------------------  ---------  --------- 
 

Hedging

At 31 March 2019, the Group had GBP363.0m (31 March 2018: GBP366.6m) of fixed rate debt with an average effective interest rate of 3.7% (31 March 2018: 4.1%) and GBP67.2m (31 March 2018: GBP54.2m) of floating rate debt with an average effective interest rate, excluding commitment fees, of 3.7% (31 March 2018: 3.9%). In addition, the Group had GBP240m of interest rate caps at an average of 1.69% (31 March 2018: GBP15.0m at 0.75%). In our joint ventures, the Group's share of fixed rate debt was GBPnil (31 March 2018: GBPnil) and GBP49.0m (31 March 2018: GBP49.9m) of floating rate debt with an effective rate of 4.0% (31 March 2018: 3.6%) with interest rate caps set at 0.5% plus margin on GBP11.0m (31 March 2018: GBP58.0m).

 
                                    2019  Effective interest rate   2018  Effective interest rate 
                                    GBPm                        %   GBPm                        % 
---------------------------------  -----  -----------------------  -----  ----------------------- 
Fixed rate debt 
- Secured borrowings               262.5                      3.6  265.3                      4.1 
- Convertible Bond                 100.0                      4.0  100.0                      4.0 
- Fair value of Convertible Bond     0.5                        -    1.3                        - 
---------------------------------  -----  -----------------------  -----  ----------------------- 
Total                              363.0                      3.7  366.6                      4.1 
Floating rate debt 
- Secured                           67.2                   5.7(1)   54.2                   7.0(1) 
---------------------------------  -----  -----------------------  -----  ----------------------- 
Total                              430.2                      4.0  420.8                      4.4 
In joint ventures 
- Floating rate                     49.0                      4.0   49.9                      3.6 
---------------------------------  -----  -----------------------  -----  ----------------------- 
Total borrowings                   479.2                      4.0  470.7                      4.3 
---------------------------------  -----  -----------------------  -----  ----------------------- 
 

(1) This includes commitment fees on undrawn facilities. Excluding these would reduce the effective rate to 3.7% (31 March 2018: 3.9%).

Tim Murphy

Finance Director

23 May 2019

Helical's Property Portfolio - 31 March 2019

Property Overview

Helical divides its property activities into two core markets: London and Manchester offices. Following the sale of the last three non-core investment assets and the acquisition of a new office building in Manchester, London represents 86% and Manchester 14% of the total property portfolio. Whilst there are structural differences in these markets, Helical has found that its business model can be applied successfully to each, driving capital growth, development profits and rental income.

The London Portfolio

Our strategy is to continue to increase our London holdings, focusing on areas where we see strong tenant demand and growth potential, such as the "Tech Belt" that runs from King's Cross through Old Street and Shoreditch to Whitechapel. Our London portfolio comprises income-producing multi-let offices, office refurbishments and developments and a mixed use commercial/residential scheme.

Charterhouse Street, EC1

After the year end, we acquired in a 50:50 joint venture with AshbyCapital the long leasehold interest in a major development site in the heart of Farringdon, further enhancing our presence in this vibrant area. The site is situated on the corner of Charterhouse Street and Farringdon Road, just 100m from Farringdon Station and 350m from our development at Farringdon East, now named Kaleidoscope, at the opposite end of the Farringdon Elizabeth Line platform.

The site has an existing planning consent for c.192,000 sq ft of offices and ground floor retail. Demolition has already been undertaken and the site is vacant. Construction will commence later this year with completion anticipated early in 2022.

The Bower, EC1

The Bower is a landmark estate immediately adjacent to the Old Street roundabout and features 312,575 sq ft of innovative, high quality office space along with 20,606 sq ft of restaurant and retail space.

The Warehouse and The Studio

The Warehouse comprises 122,858 sq ft of offices and The Studio 18,283 sq ft of offices with 10,298 sq ft of retail space at the two buildings. Works on The Warehouse entailed a complete refurbishment of the building whilst retaining its original 1960s characteristics. The Studio was a ground up development on the former car park site.

The works were completed in March 2015 and the offices were fully pre-let to CBS, Farfetch, Pivotal, Allegis and Stripe (The Warehouse) and John Brown Media (The Studio). The retail operators are Bone Daddies, Draft House, Enoteca da Luca, Honest Burger, Franze & Evans, Ejder and Good To Go.

The Tower

The Tower offers 171,434 sq ft of office space with a contemporary façade and innovatively designed interconnecting floors, along with 10,308 sq ft of retail space across two units.

With six floors (34%) let to WeWork when construction started, we let, prior to completion of building works, an additional three floors to Farfetch, an existing tenant in The Warehouse. Since the building completed in August 2018, two floors have been let to Brilliant Basics (Infosys) and one floor to Finablr, taking the office space to 70% let, and there is good interest in the remaining space. In addition, the two retail units have been let, one to Albion & East (trading as Serata Hall) for an urban bar and one to restaurant operator Wagamama.

Barts Square, EC1

In a joint venture with The Baupost Group LLC, Helical owns the freehold interest of Barts Square, a 3.2 acre site between St Paul's and Smithfield Market, situated a short walk from Farringdon East Crossrail station.

Barts Square provides a new quarter in the City, consisting of 236 residential apartments, three office buildings of 214,434 sq ft, 24,013 sq ft and 10,286 sq ft together with 21,330 sq ft of retail/A3 at ground floor as well as major public realm improvements.

Phase One

Residential/Retail

Phase One of Barts Square comprises 144 residential units, 3,101 sq ft of retail space and extensive public realm improvements. By the year end, 134 residential units, with a total value of GBP171.8m have been sold at an average price of GBP1,558 psf, leaving just 10 apartments to sell, one of which has exchanged since the year end. The retail space was let to Stem + Glory and Halfcup during the year.

90 Bartholomew Close - Office/Restaurant

The 24,013 sq ft office building, with 6,414 sq ft of restaurant space, completed in March 2018. During the year the first floor was let and the fourth and fifth floors are under offer. The ground and lower ground restaurant, let to Lino, opened in November 2018.

Phase Two

One Bartholomew - Offices

One Bartholomew was sold to clients of AshbyCapital for GBP102.4m in August 2015. The demolition of the existing building and the construction of a new 12 storey Grade A office block of 214,434 sq ft commenced in January 2016 and completed in December 2018. AshbyCapital's clients financed the development costs and, when the building is completed and successfully let, the joint venture will be entitled to receive a profit share payment. Helical is the development manager for delivery of the project. During the year, the top three floors (9(th) -11(th) ) were let to The Trade Desk, who subsequently took an additional floor (8(th) ). Since the year end the ground, first and second floor have been let to The Chicago Booth School of Business and the seventh floor has been let to Infrared Capital Partners, taking the building to 64% let.

Phase Three

Residential/Retail

Construction works on Phase Three of Barts Square are well underway. This phase will comprise 92 apartments and 11,815 sq ft of retail space. Marketing of the units commenced in March 2018 and, during the year, contracts were exchanged on 23 units, taking the total number of units exchanged to 37, at a value of GBP63.0m and an average price of GBP1,810 psf.

Since the year end contracts have been exchanged on a further seven units, leaving 47 units left to sell and one additional unit that will be released at a later date.

54 Bartholomew Close

The refurbishment of 54 Bartholomew Close is ongoing and will provide 10,286 sq ft of offices, with completion expected in Q4 2019.

Kaleidoscope, EC1

The over-station development at the Farringdon East Elizabeth Line station will comprise a six storey 86,183 sq ft office building, with a 2,497 sq ft restaurant unit on the ground floor. The building will sit immediately east of Smithfield Market with views over Charterhouse Square and towards St Paul's Cathedral. Following the grant of a 150-year lease, development commenced in August 2018 and completion is due in December 2019.

One Creechurch Place, EC3

One Creechurch Place is a landmark City office scheme in the heart of the insurance district in London. In May 2014, Helical signed a joint venture agreement with HOOPP (Healthcare of Ontario Pension Plan) to redevelop the site. Under the terms of the joint venture, HOOPP and Helical jointly funded the project on a 90:10 split, with Helical acting as development manager, for which it will now receive the final instalment of the promote payment following the successful completion and letting of the scheme.

The building, comprising 272,505 sq ft of offices and 786 sq ft of retail, achieved practical completion on 7 November 2016 and, following the letting of 86,311 sq ft during the year, the building is now fully let.

Helical will shortly exercise its option to sell its 10% shareholding in the joint venture to HOOPP, with completion of this sale expected in the next few months.

The Loom, E1

This 108,640 sq ft building is one of London's few remaining former Victorian wool warehouses and was acquired in 2013. Works to transform this asset completed in September 2016 and included a new entrance and reception onto Gowers Walk, a café, showers and a bike store. The Loom has won both a RIBA London and National Award as well as an Architects Journal Retrofit Award. Due to careful asset management, the building remained at an average of 78% let throughout the refurbishment. Since 1 April 2018, we have let 37,080 sq ft at 4.5% above 31 March 2018 ERVs, such that the building is now 97% let.

25 Charterhouse Square, EC1

In January 2016, Helical was granted a new 155 year leasehold interest in 25 Charterhouse Square from the Governors of Sutton's Hospital in Charterhouse for GBP16m. The building is a Grade A office adjacent to the new Farringdon East station on the Elizabeth Line and overlooks the historic Charterhouse Square. Helical carried out a major refurbishment of the existing building, which increased the previous 34,000 sq ft to 38,355 sq ft of offices with the addition of a new sixth floor, and 5,138 sq ft of retail space. The building achieved practical completion in March 2017 and was fully let to Anomaly, Peakon, Hudson Sandler and Senator International by December 2017, less than two years after it was acquired.

Power Road Studios, W4

The site comprises 57,585 sq ft of offices across four studio buildings and is multi-let to a wide range of predominantly media tenants. In October 2017 we completed the refurbishment of Studio 1, a project comprising c.16,000 sq ft of Grade A space, refurbished common parts and added two new lift shafts to accommodate a consented future roof extension of 13,000 sq ft. In the year, we have let 6,072 sq ft at average rents of GBP39.15 psf, with a further 2,007 sq ft let following the year end. Preliminary works have been completed for a new 30,000 sq ft office building which secured planning consent in August 2017.

The Powerhouse, W4

Helical acquired this 24,288 sq ft office and recording studios by way of sale and leaseback in 2013. The Powerhouse is a listed building on Chiswick High Road and is fully let on a long lease to Metropolis Music Group.

The Shepherds Building, W14

In October 2018, after successfully completing new lettings on 12,375 sq ft, this 150,072 sq ft multi-let office building was sold for GBP125.2m. This price represented a net initial yield of 4.8% and a 12.3% premium to 31 March 2018 book value. The building had been acquired in 2000 for GBP12.8m and was fully refurbished with an extra floor added.

King Street, W6

Hammersmith & Fulham Borough Council, who had been opposed to this regeneration project since the Council became Labour controlled, exercised their option to terminate the development agreement. During the year, the sale of the land held by the Group (which is a 50/50 joint venture with Grainger plc) completed, resulting in a profit to Helical of GBP2.2m.

Drury Lane and Dryden Street, WC2

This is a 0.5 acre office and retail site which sits within the Covent Garden Conservation Area. The Group agreed with Savills Investment Management to act as development manager to obtain a revised office planning consent, which it achieved in February 2019. The Group will receive a fee for this which is dependent on the agreed value of the property with the benefit of the new planning permission.

The Manchester Portfolio

Manchester is a city with a diverse, thriving and growing economy that is widely regarded as England's second city and the centre of the "Northern Powerhouse". Helical has found that the approach it applies to development and asset management in London is equally well received by the tenants in Manchester.

Churchgate & Lee, Manchester

This asset comprises 244,627 sq ft of multi-let offices. The asset was 64% let when acquired in March 2014. Since its purchase, we have refurbished the reception and 73,374 sq ft of office space. Following the letting of 8,208 sq ft since the year end, all available space is now let. We continue to actively manage the building, with planning permission approved for a full refurbishment of Lee reception.

31 Booth Street, Manchester

This 24,902 sq ft office located in the prime city core was acquired in January 2016 for GBP4.7m. The building has been fully refurbished and was launched to the market in March 2017.

During the year, all of the newly refurbished space was let and the building was sold in December 2018 for GBP11.9m, a premium of 29.6% to March 2018 book value.

35 Dale Street, Manchester

35 Dale Street is a 54,112 sq ft office building situated in the Northern Quarter of Manchester, acquired in March 2015. The building underwent a comprehensive refurbishment which completed in June 2018. During the year, 10,134 sq ft was let and the building is now fully occupied.

Trinity, Manchester

Trinity, purchased in May 2017 for GBP12.9m, underwent a full redevelopment which completed in January 2019. The repositioned building comprises 54,651 sq ft of office space and 4,300 sq ft of retail/restaurant space.

Fourways House, Manchester

This 59,067 sq ft brick built Grade 2 listed former packing warehouse was acquired in July 2018 for GBP16.5m, representing a net initial yield of 5.3%. We have begun to apply our asset management skills and completed three new lettings of 5,057 sq ft at average rents of GBP24.00 psf, compared to average rents on acquisition of GBP16.00 psf.

Non-Core

Retail and Regional Office Investments

We sold our three remaining non-core investment assets at Sevenoaks (retail), Reading and Glasgow (both regional offices) during the year, for a total consideration of GBP28.5m, representing a 6.2% premium to book value and an aggregate net initial yield of 7.6%.

Retail Developments

We continue to progress our retail schemes at Kingswinford and East Ham. We have assigned our land option in Evesham, with a profit share dependent on the success of the scheme, which is due for completion in August 2019. These schemes require no capital input from Helical beyond fees to design, pre-let and pre-sell the consented developments.

Portfolio Analytics

See-through Total Portfolio by Fair Value

 
                            Investment         Development         Total 
                                  GBPm      %         GBPm      %   GBPm      % 
--------------------------  ----------  -----  -----------  -----  -----  ----- 
London Offices 
 - Completed, let 
  and available to let           615.2   75.3         14.0   23.5  629.2   71.8 
 - Being redeveloped              78.6    9.7            -      -   78.6    9.0 
 - Held for redevelopment            -      -          0.3    0.4    0.3    0.0 
London Residential                   -      -         42.9   71.7   42.9    4.9 
--------------------------  ----------  -----  -----------  -----  -----  ----- 
Total London                     693.8   85.0         57.2   95.6  751.0   85.7 
Manchester Offices 
 - Completed, let 
  and available to let           122.7   15.0            -      -  122.7   14.0 
--------------------------  ----------  -----  -----------  -----  -----  ----- 
Total Manchester                 122.7   15.0            -      -  122.7   14.0 
 
Total Core Portfolio             816.5  100.0         57.2   95.6  873.7   99.7 
 
Other                              0.1    0.0            -      -    0.1    0.0 
Regional Retail                      -      -          0.8    1.4    0.8    0.1 
Land                                 -      -          1.8    3.0    1.8    0.2 
--------------------------  ----------  -----  -----------  -----  -----  ----- 
Total Non-Core Portfolio           0.1    0.0          2.6    4.4    2.7    0.3 
 
Total                            816.6  100.0         59.8  100.0  876.4  100.0 
--------------------------  ----------  -----  -----------  -----  -----  ----- 
 

See-through Trading and Development Portfolio

 
                           Book value  Fair value  Surplus  Fair value 
                                 GBPm        GBPm     GBPm           % 
-------------------------  ----------  ----------  -------  ---------- 
London Offices                   14.3        14.3        -        23.9 
London Residential               42.9        42.9        -        71.7 
-------------------------  ----------  ----------  -------  ---------- 
Total Core Portfolio             57.2        57.2        -        95.6 
 
Regional Retail                   0.8         0.8        -         1.4 
Land                              1.2         1.8      0.6         3.0 
-------------------------  ----------  ----------  -------  ---------- 
Total Non-Core Portfolio          2.0         2.6      0.6         4.4 
 
Total                            59.2        59.8      0.6       100.0 
-------------------------  ----------  ----------  -------  ---------- 
 

Capital Expenditure

We have a planned development and refurbishment programme.

 
                                 Capex                                                     Total 
                                budget  Remaining spend  Pre-redeveloped               completed 
                       (Helical share)  (Helical share)            space  New space        space          Completion 
Property                          GBPm             GBPm            sq ft      sq ft        sq ft                date 
----------------  --------------------  ---------------  ---------------  ---------  -----------  ------------------ 
Investment - 
committed 
The Tower, 
 London EC1                      108.8             10.5          114,000     67,742      181,742           Completed 
Kaleidoscope, 
 London EC1*                      58.7             35.2                -     88,680       88,680       December 2019 
Charterhouse Street, 
 London EC1**                     96.1             96.1                -    192,000      192,000          March 2022 
54 Bartholomew Close, 
 London EC1                        2.1              1.6            9,000      1,286       10,286        October 2019 
Development - 
committed 
Barts Square, London EC1 - 
 Phase One                        64.6              1.0                -    127,323      127,323           Completed 
                                                                                                      From September 
Barts Square, London EC1 -                                                                           2019 to January 
 Phase Three                      39.8             16.6                -     90,427       90,427                2020 
--------------------------  ----------  ---------------  ---------------  ---------  -----------  ------------------ 
 
 

* Includes deferred consideration payment due in April 2020.

** Acquired after 31 March 2019 - see Note 25.

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 without relying on market movements.

 
                                            Fair 
                                           value  Passing                                                   ERV change 
                                       weighting     rent         Contracted rent           ERV          like-for-like 
  See-through Investment portfolio             %     GBPm      %             GBPm      %   GBPm      %               % 
------------------------------------  ----------  -------  -----  ---------------  -----  -----  -----  -------------- 
London Offices 
- Completed, let and available to 
 let                                        75.3     17.3   78.8             27.5   82.6   34.8   67.7             0.9 
- Being redeveloped                          9.7        -      -                -      -    7.6   14.7            14.0 
------------------------------------  ----------  -------  -----  ---------------  -----  -----  -----  -------------- 
Total London                                85.0     17.3   78.8             27.5   82.6   42.4   82.4             3.0 
Manchester Offices 
- Completed, let and available to 
 let                                        15.0      4.6   21.1              5.7   17.3    9.0   17.4             2.6 
------------------------------------  ----------  -------  -----  ---------------  -----  -----  -----  -------------- 
Total Manchester                            15.0      4.6   21.1              5.7   17.3    9.0   17.4             2.6 
Other                                        0.0      0.0    0.1              0.0    0.1    0.1    0.2             0.0 
------------------------------------  ----------  -------  -----  ---------------  -----  -----  -----  -------------- 
Total                                      100.0     21.9  100.0             33.2  100.0   51.5  100.0             3.0 
------------------------------------  ----------  -------  -----  ---------------  -----  -----  -----  -------------- 
 

During the year, total contracted income reduced by GBP2.3m as a result of the sale of investment properties and losses from breaks and lease expiries, offset by the purchase of one investment property and rent from new lettings and rent reviews.

 
                                                                                         See-through 
                                                                     total portfolio contracted rent 
                                                                                                GBPm 
------------------------------------------------------------------  -------------------------------- 
Contracted rent reduced through disposals of London offices                                    (7.4) 
Contracted rent reduced through disposals of Manchester offices                                (0.1) 
Contracted rent reduced through disposals of non-core assets                                   (2.3) 
Contracted rent increased from purchases of investment properties                                0.9 
------------------------------------------------------------------  -------------------------------- 
Total contracted rental change from sales and purchases                                        (8.9) 
Rent lost at break/expiry                                                                      (1.7) 
Rent reviews and uplifts on lease renewals                                                       0.1 
New lettings 
                   - London                                                                      7.6 
                   - Manchester                                                                  0.6 
------------------------------------------------------------------  -------------------------------- 
Total increase in the year from asset management activities                                      6.6 
------------------------------------------------------------------  -------------------------------- 
Net decrease in contracted rents in the year                                                   (2.3) 
------------------------------------------------------------------  -------------------------------- 
 

Investment Portfolio

Portfolio Yields

 
                       EPRA topped  True equivalent    Reversionary     EPRA topped                           Reversionary 
                            up NIY            yield           yield          up NIY  True equivalent yield           yield 
                     31 March 2019    31 March 2019   31 March 2019   31 March 2018          31 March 2018   31 March 2018 
                                 %                %               %               %                      %               % 
----------------  ----------------  ---------------  --------------  --------------  ---------------------  -------------- 
London Offices 
- Completed, let and 
 available to let              4.2              5.1             5.2             4.5                    5.4             5.3 
- Being 
 redeveloped                   n/a              4.9             5.7             n/a                    5.2             5.6 
----------------  ----------------  ---------------  --------------  --------------  ---------------------  -------------- 
Total London                   4.2              5.1             5.3             4.5                    5.3             5.4 
Manchester 
Offices 
- Completed, let and 
 available to let              4.2              6.1             6.3             5.3                    6.4             6.5 
- Being 
 redeveloped                   n/a              n/a             n/a             n/a                    6.2             7.0 
----------------  ----------------  ---------------  --------------  --------------  ---------------------  -------------- 
Total Manchester               4.2              6.1             6.3             5.3                    6.4             6.7 
 
Total                          4.2              5.2             5.4             4.6                    5.5             5.6 
----------------  ----------------  ---------------  --------------  --------------  ---------------------  -------------- 
 
 

See-through Capital Values, Vacancy Rates and Unexpired Lease Terms

 
                                             31 March 2019  31 March 2019  31 March 2019  31 March 2018 
                                         Capital value psf   Vacancy rate          WAULT          WAULT 
                                                       GBP              %          Years          Years 
--------------------------------------  ------------------  -------------  -------------  ------------- 
London Offices 
- Completed, let and available to let                1,061           16.2            8.0            5.8 
- Being redeveloped                                    805            n/a            n/a            n/a 
--------------------------------------  ------------------  -------------  -------------  ------------- 
Total London                                         1,021           16.2            8.0            5.8 
Manchester Offices 
- Completed, let and available to let                  295           19.8            3.9            4.2 
--------------------------------------  ------------------  -------------  -------------  ------------- 
Total Manchester                                       295           19.8            3.9            4.2 
Other                                                    -              -              -            3.8 
--------------------------------------  ------------------  -------------  -------------  ------------- 
Total                                                  753           17.7            7.3            5.4 
--------------------------------------  ------------------  -------------  -------------  ------------- 
 

See-through Valuation Movements

 
                                                                                      Investment 
                                                                                       portfolio  Investment portfolio 
                                     Val change                       Val change       weighting             weighting 
                 inc purchases & gains on sales   excl purchases & gains on sale   31 March 2019         31 March 2018 
                                              %                                %               %                     % 
--------------  -------------------------------  -------------------------------  --------------  -------------------- 
London Offices 
- Completed, 
 let and 
 available to 
 let                                        6.8                              5.8            75.3                  59.2 
- Being 
 redeveloped                               13.3                             13.3             9.7                  25.6 
--------------  -------------------------------  -------------------------------  --------------  -------------------- 
Total London                                7.4                              6.6            85.0                  84.8 
Manchester 
Offices 
- Completed, 
 let and 
 available to 
 let                                        7.3                              7.8            15.0                  10.1 
- Being 
 developed                                    -                                -               -                   1.8 
--------------  -------------------------------  -------------------------------  --------------  -------------------- 
Total 
 Manchester                                 7.3                              7.8            15.0                  11.9 
--------------  -------------------------------  -------------------------------  --------------  -------------------- 
Total Core                                  7.4                              6.8           100.0                  96.7 
Regional 
 Offices/ 
 Retail/ Other                              6.0                                -               -                   3.3 
--------------  -------------------------------  -------------------------------  --------------  -------------------- 
Total                                       7.4                              6.8           100.0                 100.0 
--------------  -------------------------------  -------------------------------  --------------  -------------------- 
 

See-through Lease Expiries or Tenant Break Options

 
                               Year to  Year to  Year to  Year to  Year to 
                                  2020     2021     2022     2023     2024 
-----------------------------  -------  -------  -------  -------  ------- 
% of rent roll                     5.9      6.4     11.7      7.9     13.4 
Number of leases                    36       19       28       15       25 
Average rent per lease (GBP)    54,309  111,037  138,860  175,870  178,434 
-----------------------------  -------  -------  -------  -------  ------- 
 

We have a strong rental income stream and a diverse tenant base. The top 10 tenants account for 51.6% of the total rent roll and the tenants come from a variety of industries.

 
                                                   Contracted rent  Rent roll 
  Rank  Tenant              Tenant Industry                   GBPm          % 
------  ------------------  ---------------------  ---------------  --------- 
1       Farfetch            Online retail                      3.9       11.8 
2       WeWork              Co-working                         3.8       11.5 
3       Pivotal             Technology                         2.0        6.0 
4       Infosys             Technology                         1.4        4.2 
5       Anomaly             Marketing                          1.4        4.2 
6       CBS                 Media                              1.0        3.1 
7       Allegis             Recruitment                        1.0        3.0 
8       Finablr             Financial services                 0.9        2.8 
9       Stripe Payments     Technology                         0.8        2.5 
10      The Growth Company  Community Development              0.8        2.5 
------  ------------------  ---------------------  ---------------  --------- 
Total                                                         17.0       51.6 
--------------------------  ---------------------  ---------------  --------- 
 

Principal lettings

 
                                                                              Lease term 
                                                                        Area   to expiry 
  Property                   Tenant                                    sq ft       years 
---------------------------  ---------------------------------------  ------  ---------- 
The Tower, London EC1        Farfetch                                 29,671           9 
The Tower, London EC1        Infosys                                  19,576          10 
The Loom, London E1          Hey Habito                               15,907           5 
The Tower, London EC1        Finablr                                  11,329          10 
90 Bartholomew, London EC1   Wright & Bell (trading as Lino)           6,414          25 
The Loom, London E1          The Fairtrade Foundation                  6,400          10 
The Loom, London E1          G-Star                                    5,691           5 
The Tower, London EC1        Albion & East (trading as Serata Hall)    5,395          25 
90 Bartholomew, London EC1   Northridge Law                            4,642           5 
The Loom, London E1          Vidsy                                     3,619           3 
---------------------------  ---------------------------------------  ------  ---------- 
 
 

Letting Activity

 
                                                                  Contracted Rent                         Change to 
                                                         Area   (Helical's Share)                 31 March 2018 ERV 
                                                        sq ft                 GBP  Rent psf GBP                   % 
----------------------------------------------------  -------  ------------------  ------------  ------------------ 
Investment Properties 
Completed, let and available to let - offices 
           The Tower, The Bower, EC1                   60,576           4,400,000         72.63                 1.3 
           The Loom, E1                                37,080           1,919,000         51.76                 4.5 
           The Powerhouse, W4                               -                   -             -                   - 
           Power Road Studios, W4                       6,072             238,000         39.14                11.8 
           25 Charterhouse Square, EC1                      -                   -             -                   - 
           90 Bartholomew Close, EC1                    4,642             152,000         75.00                15.4 
 
Completed, let and available to let - retail 
           The Warehouse and Studio, The Bower, EC1       277              15,000         55.69                   - 
           The Tower, The Bower, EC1                   10,308             526,000         51.03                18.3 
           Barts Square, EC1                            3,101              57,000         41.92               -16.2 
           90 Bartholomew Close, EC1                    6,414              88,000         40.88                 0.0 
 
Manchester 
           Churchgate & Lee                                 -                   -             -                   - 
           35 Dale Street                              10,134             241,000         23.72                24.2 
           Trinity                                          -                   -             -                   - 
           Fourways House                               5,057             121,000         23.98                 2.0 
----------------------------------------------------  -------  ------------------  ------------  ------------------ 
Total                                                 143,661           7,757,000         56.65                4.3% 
 
Development Properties 
Completed, let and available to let 
           One Creechurch Place, EC3                   86,311             445,000         64.43                 2.1 
           One Bartholomew, EC1                        74,101                   -         84.62                 n/a 
----------------------------------------------------  -------  ------------------  ------------  ------------------ 
 

Consolidated Income Statement

For the year ended 31 March 2019

 
                                                                                     Year ended  Year ended 
                                                                                        31.3.19     31.3.18 
                                                                              Notes      GBP000      GBP000 
----------------------------------------------------------------------------  -----  ----------  ---------- 
Revenue                                                                           3      44,175     175,596 
----------------------------------------------------------------------------  -----  ----------  ---------- 
Net rental income                                                                 4      24,599      36,329 
Development property loss                                                         5     (1,781)     (4,174) 
Share of results of joint ventures                                               13     (3,217)       3,196 
Other operating income                                                                        -         111 
----------------------------------------------------------------------------  -----  ----------  ---------- 
Gross profit before net gain on sale and revaluation of investment properties            19,601      35,462 
Gain on sale of investment properties                                             6      15,008      13,567 
Revaluation of investment properties                                             12      44,284      23,848 
Fair value movement of available-for-sale assets                                 15         144       1,385 
----------------------------------------------------------------------------  -----  ----------  ---------- 
Gross profit                                                                             79,037      74,262 
Administrative expenses                                                           7    (16,753)    (12,765) 
----------------------------------------------------------------------------  -----  ----------  ---------- 
Operating profit                                                                         62,284      61,497 
Finance costs                                                                     8    (17,407)    (37,438) 
Finance income                                                                              983       4,303 
Change in fair value of derivative financial instruments                                (3,322)       4,029 
Change in fair value of Convertible Bond                                                    865     (1,559) 
Foreign exchange gain/(loss)                                                                 53        (10) 
----------------------------------------------------------------------------  -----  ----------  ---------- 
Profit before tax                                                                        43,456      30,822 
Tax on profit on ordinary activities                                              9       (836)     (4,537) 
----------------------------------------------------------------------------  -----  ----------  ---------- 
Profit for the year                                                                      42,620      26,285 
----------------------------------------------------------------------------  -----  ----------  ---------- 
 
Earnings per share                                                               11 
Basic                                                                                     35.8p       22.3p 
Diluted                                                                                   35.3p       22.1p 
----------------------------------------------------------------------------  -----  ----------  ---------- 
 
 

Consolidated Statement of Comprehensive Income

For the year ended 31 March 2019

 
                                                                                Year ended  Year ended 
                                                                                   31.3.19     31.3.18 
                                                                                    GBP000      GBP000 
------------------------------------------------------------------------------  ----------  ---------- 
Profit for the year                                                                 42,620      26,285 
Exchange difference on retranslation of net investments in foreign operations         (51)        (15) 
------------------------------------------------------------------------------  ----------  ---------- 
Total comprehensive income for the year                                             42,569      26,270 
------------------------------------------------------------------------------  ----------  ---------- 
 

The exchange differences on retranslation of net investments in foreign operations will be reclassified to the Income Statement on disposal.

Consolidated Balance Sheet

At 31 March 2019

 
                                                        31.3.19    31.3.18 
                                               Notes     GBP000     GBP000 
---------------------------------------------  -----  ---------  --------- 
Non-current assets 
Investment properties                             12    778,752    791,948 
Owner occupied property, plant and equipment              1,747      1,825 
Investment in joint ventures                      13     24,676     27,809 
Derivative financial instruments                  20        915        123 
---------------------------------------------  -----  ---------  --------- 
                                                        806,090    821,705 
---------------------------------------------  -----  ---------  --------- 
Current assets 
Land, developments and trading properties         14      2,311      6,042 
Corporation tax receivable                                    -      3,736 
Trade and other receivables                       16     58,726    100,757 
Cash and cash equivalents                         17    197,570     91,871 
---------------------------------------------  -----  ---------  --------- 
                                                        258,607    202,406 
---------------------------------------------  -----  ---------  --------- 
Total assets                                          1,064,697  1,024,111 
---------------------------------------------  -----  ---------  --------- 
Current liabilities 
Trade and other payables                          18   (43,159)   (51,378) 
Corporation tax payable                                 (2,561)          - 
Borrowings                                        19  (100,468)          - 
---------------------------------------------  -----  ---------  --------- 
                                                      (146,188)   (51,378) 
---------------------------------------------  -----  ---------  --------- 
Non-current liabilities 
Borrowings                                        19  (324,814)  (416,992) 
Derivative financial instruments                  20    (4,158)    (2,874) 
Long leasehold liability                                (2,189)    (2,189) 
Trade and other payables                          18   (11,405)          - 
Deferred tax liability                             9    (8,518)   (16,784) 
---------------------------------------------  -----  ---------  --------- 
                                                      (351,084)  (438,839) 
---------------------------------------------  -----  ---------  --------- 
Total liabilities                                     (497,272)  (490,217) 
---------------------------------------------  -----  ---------  --------- 
 
Net assets                                              567,425    533,894 
---------------------------------------------  -----  ---------  --------- 
 
Equity 
Called-up share capital                           21      1,459      1,451 
Share premium account                                   101,304     98,798 
Revaluation reserve                                     131,050    162,753 
Capital redemption reserve                                7,478      7,478 
Other reserves                                              291        291 
Retained earnings                                       325,843    263,123 
---------------------------------------------  -----  ---------  --------- 
Total equity                                            567,425    533,894 
---------------------------------------------  -----  ---------  --------- 
 

Consolidated Cash Flow Statement

For the year to 31 March 2019

 
                                                                 Year ended  Year ended 
                                                                    31.3.19     31.3.18 
                                                                     GBP000      GBP000 
---------------------------------------------------------------  ----------  ---------- 
Cash flows from operating activities 
Profit before tax                                                    43,456      30,822 
Depreciation                                                            296         291 
Revaluation surplus on investment properties                       (44,284)    (23,848) 
Gain on sales of investment properties                             (15,008)    (13,567) 
(Profit)/loss on sale of plant and equipment                           (52)          81 
Net financing costs                                                  16,424      33,135 
Change in value of derivative financial instruments                   3,322     (4,029) 
Change in fair value of Convertible Bond                              (865)       1,559 
Share based payment charge                                            2,274       1,185 
Share of results of joint ventures                                    3,217     (3,196) 
Fair value movement of available-for-sale assets                      (144)     (1,385) 
Foreign exchange movement                                              (52)        (19) 
---------------------------------------------------------------  ----------  ---------- 
Cash inflows from operations before changes in working capital        8,584      21,029 
---------------------------------------------------------------  ----------  ---------- 
Change in trade and other receivables                                40,561    (25,126) 
Change in land, developments and trading properties                   3,731      82,801 
Change in trade and other payables                                  (3,176)     (6,917) 
---------------------------------------------------------------  ----------  ---------- 
Cash inflows generated from operations                               49,700      71,787 
---------------------------------------------------------------  ----------  ---------- 
Finance costs                                                      (25,358)    (45,537) 
Finance income                                                          461         162 
Tax (paid)/received                                                 (2,200)           6 
---------------------------------------------------------------  ----------  ---------- 
                                                                   (27,097)    (45,369) 
---------------------------------------------------------------  ----------  ---------- 
Cash flows from operating activities                                 22,603      26,418 
---------------------------------------------------------------  ----------  ---------- 
Cash flows from investing activities 
Additions to investment property                                   (79,742)    (95,821) 
Sale of investment property                                         164,058     337,570 
Investment in joint ventures                                              -     (5,403) 
Dividends from joint ventures                                           416         671 
Receipts in respect of available-for-sale assets                        144       1,385 
Sale of plant and equipment                                             155           - 
Purchase of owner occupied property, plant and equipment              (320)        (73) 
---------------------------------------------------------------  ----------  ---------- 
Net cash generated from investing activities                         84,711     238,329 
---------------------------------------------------------------  ----------  ---------- 
Cash flows from financing activities 
Borrowings drawn down                                                64,089      94,196 
Borrowings repaid                                                  (54,306)   (356,670) 
Shares issued                                                             8           4 
Sale of own shares                                                        -         521 
Equity dividends paid                                              (11,406)    (10,195) 
---------------------------------------------------------------  ----------  ---------- 
Net cash used by financing activities                               (1,615)   (272,144) 
---------------------------------------------------------------  ----------  ---------- 
Net increase/(decrease) in cash and cash equivalents                105,699     (7,397) 
Exchange gains on cash and cash equivalents                               -           6 
Cash and cash equivalents at start of year                           91,871      99,262 
---------------------------------------------------------------  ----------  ---------- 
Cash and cash equivalents at end of year                            197,570      91,871 
---------------------------------------------------------------  ----------  ---------- 
 

Consolidated Statement of Changes in Equity

At 31 March 2019

 
                                                           Capital 
                         Share     Share  Revaluation   redemption      Other       Retained  Own shares 
                       capital   premium      reserve      reserve   reserves       earnings        held     Total 
                        GBP000    GBP000       GBP000       GBP000     GBP000         GBP000      GBP000    GBP000 
------------------  ----------  --------  -----------  -----------  ---------  -------------  ----------  -------- 
At 31 March 2017         1,447    98,798      164,190        7,478        291        244,693           -   516,897 
Total 
 comprehensive 
 income                      -         -            -            -          -         26,270           -    26,270 
Revaluation 
 surplus                     -         -       23,848            -          -       (23,848)           -         - 
Realised on 
 disposals                   -         -     (25,285)            -          -         25,285           -         - 
Issued share 
 capital                     4         -            -            -          -              -           -         4 
Performance share 
 plan                        -         -            -            -          -          1,185           -     1,185 
Performance share plan 
 - deferred tax              -         -            -            -          -           (55)           -      (55) 
Share settled 
 bonus                       -         -            -            -          -          (733)           -     (733) 
Dividends paid               -         -            -            -          -       (10,195)           -  (10,195) 
Sale of own shares           -         -            -            -          -              -         521       521 
Own shares held 
 reserve transfer            -         -            -            -          -            521       (521)         - 
-----------------  -----------  --------  -----------  -----------  ---------  -------------  ----------  -------- 
At 31 March 2018         1,451    98.798      162,753        7,478        291        263,123           -   533,894 
Total 
 comprehensive 
 income                      -         -            -            -          -         42,569           -    42,569 
Revaluation 
 surplus                     -         -       44,284            -          -       (44,284)           -         - 
Realised on 
 disposals                   -         -     (75,987)            -          -         75,987           -         - 
Issued share 
 capital                     8     2,506            -            -          -              -     (2,514)         - 
Performance share 
 plan                        -         -            -            -          -          2,274           -     2,274 
Performance share plan 
 - deferred tax              -         -            -            -          -             94           -        94 
Share settled 
 Performance Share 
 Plan                        -         -            -            -          -        (1,837)       1,837         - 
Share settled 
 bonus                       -         -            -            -          -          (677)         677         - 
Dividends paid               -         -            -            -          -       (11,406)           -  (11,406) 
------------------  ----------  --------  -----------  -----------  ---------  -------------  ----------  -------- 
At 31 March 2019         1,459   101,304      131,050        7,478        291        325,843           -   567,425 
------------------  ----------  --------  -----------  -----------  ---------  -------------  ----------  -------- 
 
 

For a breakdown of total comprehensive income see the Consolidated Statement of Comprehensive Income.

The adjustment against retained earnings of GBP2,274,000 (31 March 2018: GBP1,185,000) adds back the share based payments charge in accordance with IFRS 2 Share Based Payments.

There were net transactions with owners of GBP9,038,000 (31 March 2018: GBP9,273,000) made up of the Performance Share Plan credit of GBP2,274,000 (31 March 2018: GBP1,185,000) and related deferred tax credit of GBP94,000 (31 March 2018: charge of GBP55,000), dividends paid of GBP11,406,000 (31 March 2018: GBP10,195,000), issued share capital of GBP8,000 (31 March 2018: GBP4,000) and corresponding share premium of GBP2,506,000 (31 March 2018: GBPnil), the sale of own shares of GBPnil (31 March 2018: GBP521,000), share settled PSP awards charge of GBP1,837,000 (31 March 2018: GBPnil) and the share settled bonus charge of GBP677,000 (31 March 2018: GBP733,000).

Notes to the Full Year Results

1. Basis of Preparation

These financial statements have been prepared using the recognition and measurement principles of International Financial Reporting Standards ("IFRS"), including International Financial Reporting Interpretations Committee ("IFRIC") interpretations as adopted by the European Union.

The financial statements have been prepared in Sterling (rounded to the nearest thousand) under the historical cost convention as modified by the revaluation of investment properties, available-for-sale investments, convertible bonds and derivative financial instruments.

The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 434 of the Companies Act 2006 but has been derived from the Company's audited statutory accounts for the year ended 31 March 2019. These accounts will be delivered to the Registrar of Companies following the Annual General Meeting. The auditor's opinion on the 2019 accounts was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The principal accounting policies of the Group are consistent with those applied in the year to 31 March 2018, as amended to reflect the new standards set out below. The Group Annual Report and Financial Statements for 2018 are available at Companies House.

New standards adopted during the year

IFRS 15 Revenue from Contracts with Customers

IFRS 15 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The core principle of IFRS 15 is that the Group should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The standard sets out a five-step model:

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations within a contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations within the contract.

Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.

The standard is applicable to investment property disposals, development property disposals and property development management/advisory services but excludes rental income, which is within the scope of IAS 17 Leases (until the adoption of IFRS 16 for accounting periods beginning on or after 1 January 2019).

Prior year adjustment

An adjustment of GBP9,623,000 to the revenue reported for the year to 31 March 2018 has been made to reflect the gross up of service charges in rental income and costs, where the net amount had previously been recognised in rental costs. This adjustment is due to the adoption of IFRS 15 Revenue from Contracts with Customers and has no net impact on the profit for the year or on the Group's net asset position.

IFRS 9 Financial Instruments

This standard applies to classification and measurement of financial assets and financial liabilities, impairment provisioning and hedge accounting. The Group's assessment of IFRS 9 determined that the main area of potential impact was impairment provisioning on trade receivables, given the requirement to use a forward-looking expected credit loss model. However, the Group concluded that this has no material impact on its financial statements.

In addition, the following pronouncements had no significant impact on the consolidated financial statements:

   --    IFRS 2 Share-based Payments (amendment); 
   --    IAS 28 Investments in Associates (amendment); 
   --    IAS 40 Investment Property (amendment); and 
   --    Amendments to IFRS (Annual improvements cycle 2014-2016). 

Standards in issue but not yet effective

The following standards and interpretations, which have not been applied in these condensed unaudited financial statements, were in issue but not effective, and in some cases have not been adopted for use by the European Union:

IFRS 16 Leases

This standard does not affect the accounting for rental income earned by the Group as a lessor, but from the Group's initial assessment of its head office lease, it believes adoption will result in the recognition on the Consolidated and Company Balance Sheets of: a right of use asset of GBP5,600,000; a lease liability of GBP7,300,000; the reversal of lease incentive accrual of GBP1,300,000; and a net asset decrease of GBP400,000.

Going Concern

The Board continues to adopt the going concern basis in preparing the financial statements. The Board's assessment took into account the following:

-- The Group's latest cash flow and profit forecasts, which were subject to sensitivity analysis;

-- The cash and undrawn bank facilities available to the Group, within the constraints of the Group's loan covenants; and

-- The Group's principal risks that could impact on the Group's ability to settle its liabilities over the 12 months from the date of signing.

2. Revenue from Contracts with Customers

 
                                                Year ended  Year ended 
                                                  31.03.19    31.03.18 
                                                    GBP000      GBP000 
----------------------------------------------  ----------  ---------- 
Development management services                      7,963      17,309 
Development property sales                               -      21,660 
Corporate sale - retirement village portfolio            -      86,709 
----------------------------------------------  ----------  ---------- 
Development property income                          7,963     125,678 
Service charge income                                8,058       9,623 
Other income                                             -         138 
----------------------------------------------  ----------  ---------- 
Total revenue from contracts with customers         16,021     135,439 
----------------------------------------------  ----------  ---------- 
 

The total revenue from contracts with customers is the revenue recognised in accordance with IFRS 15 Revenue from Contracts with Customers. This reflects the Development property income and Other revenue in Note 3 Segmental Information.

No impairment of contract assets was recognised in the year to 31 March 2019 (2018: GBPnil).

3. Segmental Information

IFRS 8 Operating Segments requires the identification of the Group's operating segments, which are defined as being discrete components of the Group's operations whose results are regularly reviewed by the Chief Operating Decision Maker (being the Chief Executive) to allocate resources to those segments and to assess their performance. The Group divides its business into the following segments:

-- investment properties, which are owned or leased by the Group for long-term income and for capital appreciation, and trading properties, which are owned or leased with the intention to sell; and,

-- development properties, which include sites, developments in the course of construction, completed developments available for sale, and pre-sold developments.

 
                                Investment                               Investment 
                               and Trading  Developments        Total   and Trading  Developments        Total 
                                Year ended    Year ended   Year ended    Year ended    Year ended   Year ended 
                                  31.03.19      31.03.19     31.03.19      31.03.18      31.03.18     31.03.18 
Revenue                             GBP000        GBP000       GBP000        GBP000        GBP000       GBP000 
----------------------------  ------------  ------------  -----------  ------------  ------------  ----------- 
Rental income                       28,154             -       28,154        40,157             -       40,157 
Development property income              -         7,963        7,963             -       125,678      125,678 
Service charge income                8,058             -        8,058         9,623             -        9,623 
Other revenue                            -             -            -           138             -          138 
----------------------------  ------------  ------------  -----------  ------------  ------------  ----------- 
Revenue                             36,212         7,963       44,175        49,918       125,678      175,596 
----------------------------  ------------  ------------  -----------  ------------  ------------  ----------- 
 
 
                                                                              Investment 
                         Investment and Trading  Developments        Total   and Trading    Developments         Total 
                                     Year ended    Year ended   Year ended    Year ended      Year ended    Year ended 
                                       31.03.19      31.03.19     31.03.19      31.03.18        31.03.18      31.03.18 
Profit before tax                        GBP000        GBP000       GBP000        GBP000          GBP000        GBP000 
---------------------  ------------------------  ------------  -----------  ------------  --------------  ------------ 
Net rental income                        24,599             -       24,599        36,329               -        36,329 
Development property 
 loss                                         -       (1,781)      (1,781)             -         (4,174)       (4,174) 
Share of results of 
 joint ventures                           5,203       (8,420)      (3,217)         5,135         (1,939)         3,196 
Gain on sale and 
 revaluation of 
 Investment 
 properties                              59,292             -       59,292        37,415               -        37,415 
---------------------  ------------------------  ------------  -----------  ------------  --------------  ------------ 
                                         89,094      (10,201)       78,893        78,879         (6,113)        72,766 
Fair value movement of 
 available-for-sale assets                                             144                                       1,385 
Other operating 
 income                                                                  -                                         111 
---------------------  ------------------------  ------------  -----------  ------------  --------------  ------------ 
Gross profit                                                        79,037                                      74,262 
Administrative 
 expenses                                                         (16,753)                                    (12,765) 
Net finance costs                                                 (18,881)                                    (30,665) 
Foreign exchange 
 gain/(loss)                                                            53                                        (10) 
---------------------  ------------------------  ------------  -----------  ------------  --------------  ------------ 
Profit before tax                                                   43,456                                      30,822 
---------------------  ------------------------  ------------  -----------  ------------  --------------  ------------ 
 
 
 
                                            Investment                             Investment 
                                           and Trading  Developments      Total   and Trading  Developments      Total 
                                              31.03.19      31.03.19   31.03.19      31.03.18      31.03.18   31.03.18 
Net assets                                      GBP000        GBP000     GBP000        GBP000        GBP000     GBP000 
--------------------------------------  --------------  ------------  ---------  ------------  ------------  --------- 
Investment properties                          778,752             -    778,752       791,948             -    791,948 
Land, development and trading properties             -         2,311      2,311            28         6,014      6,042 
Investment in joint ventures                    17,556         7,120     24,676        12,352        15,457     27,809 
--------------------------------------  --------------  ------------  ---------  ------------  ------------  --------- 
                                               796,308         9,431    805,739       804,328        21,471    825,799 
Other assets                                                            258,958                                198,312 
--------------------------------------  --------------  ------------  ---------  ------------  ------------  --------- 
Total assets                                                          1,064,697                              1,024,111 
Liabilities                                                           (497,272)                              (490,217) 
--------------------------------------  --------------  ------------  ---------  ------------  ------------  --------- 
Net assets                                                              567,425                                533,894 
--------------------------------------  --------------  ------------  ---------  ------------  ------------  --------- 
 
 

4. Net Rental Income

 
                                                                 Year ended  Year ended 
                                                                    31.3.19     31.3.18 
                                                                     GBP000      GBP000 
---------------------------------------------------------------  ----------  ---------- 
Gross rental income                                                  28,154      40,157 
Rents payable                                                         (285)       (144) 
Property overheads                                                  (3,410)     (3,549) 
---------------------------------------------------------------  ----------  ---------- 
Net rental income                                                    24,459      36,464 
Net rental costs/(income) attributable to profit share partner          140       (135) 
---------------------------------------------------------------  ----------  ---------- 
Net rental income                                                    24,599      36,329 
---------------------------------------------------------------  ----------  ---------- 
 

5. Development Property Loss

 
                                Year ended  Year ended 
                                   31.3.19     31.3.18 
                                    GBP000      GBP000 
------------------------------  ----------  ---------- 
Development property income          7,963     125,678 
Cost of sales                      (5,399)   (125,085) 
Sales expenses                           -     (2,554) 
Provision against book values      (4,345)     (2,213) 
------------------------------  ----------  ---------- 
Development property loss          (1,781)     (4,174) 
------------------------------  ----------  ---------- 
 

6. Gain on Sale of Investment Properties

 
                                                      Year ended  Year ended 
                                                         31.3.19     31.3.18 
                                                          GBP000      GBP000 
----------------------------------------------------  ----------  ---------- 
Net proceeds from the sale of investment properties      164,058     341,911 
Book value (Note 12)                                   (147,550)   (324,002) 
Tenants' incentives on sold investment properties        (1,500)     (4,342) 
----------------------------------------------------  ----------  ---------- 
Gain on sale of investment properties                     15,008      13,567 
----------------------------------------------------  ----------  ---------- 
 

7. Administrative Expenses

 
                                                   Year ended  Year ended 
                                                      31.3.19     31.3.18 
                                                       GBP000      GBP000 
-------------------------------------------------  ----------  ---------- 
Administration costs                                 (10,858)    (11,023) 
Performance related awards                            (5,203)     (1,677) 
National Insurance on performance related awards        (692)        (65) 
-------------------------------------------------  ----------  ---------- 
Administrative expenses                              (16,753)    (12,765) 
-------------------------------------------------  ----------  ---------- 
 

8. Finance Costs

 
                                                       Year ended  Year ended 
                                                          31.3.19     31.3.18 
                                                           GBP000      GBP000 
-----------------------------------------------------  ----------  ---------- 
Interest payable on bank loans, bonds and overdrafts     (16,414)    (26,873) 
Retail Bond redemption premium                                  -     (8,708) 
Other interest payable and similar charges                (4,208)     (7,053) 
Interest capitalised                                        3,215       5,196 
-----------------------------------------------------  ----------  ---------- 
Finance costs                                            (17,407)    (37,438) 
-----------------------------------------------------  ----------  ---------- 
 

9. Tax on Profit on Ordinary Activities

 
                                                           Year ended  Year ended 
                                                              31.3.19     31.3.18 
                                                               GBP000      GBP000 
--------------------------------------------------------  -----------  ---------- 
The tax charge is based on the profit for the year and represents: 
United Kingdom corporation tax at 19% (2018: 19%) 
- Group corporation tax                                       (8,813)       (831) 
- Adjustment in respect of prior periods                          315       1,253 
- Use of tax losses                                             (509)           - 
--------------------------------------------------------  -----------  ---------- 
Current tax (charge)/credit                                   (9,007)         422 
 
Deferred tax 
- Capital allowances                                          (1,003)         709 
- Tax losses                                                    (677)     (5,478) 
- Unrealised chargeable gains                                  10,647       2,525 
- Other timing differences                                      (796)     (2,715) 
--------------------------------------------------------  -----------  ---------- 
Deferred tax credit/(charge)                                    8,171     (4,959) 
--------------------------------------------------------  -----------  ---------- 
Total tax charge for the year                                   (836)     (4,537) 
--------------------------------------------------------  -----------  ---------- 
 
 
 
                                31.3.19    31.3.18 
Deferred tax                     GBP000     GBP000 
----------------------------  ---------  --------- 
Capital allowances              (3,263)    (2,260) 
Tax losses                        2,019      2,696 
Unrealised chargeable gains     (9,159)   (19,806) 
Other timing differences          1,885      2,586 
----------------------------  ---------  --------- 
Deferred tax liability          (8,518)   (16,784) 
----------------------------  ---------  --------- 
 

Note: all deferred tax balances have been calculated at an effective rate of corporation tax of 17% (2018: 19%) which is the average of the substantively enacted future rates for the periods in which the deferred tax is expected to be realised.

Under IAS 12 Income Taxes, deferred tax provisions are made for the tax that would potentially be payable on the realisation of investment properties and other assets at book value.

If upon sale of the investment properties the Group retained all the capital allowances, the deferred tax provision in respect of capital allowances of GBP3,263,000 (2018: GBP2,260,000) would be released and further capital allowances of GBP65,906,000 (2018: GBP40,921,000) would be available to reduce future tax liabilities.

The net deferred tax asset in respect of other timing differences arises from tax relief available to the Group on the mark-to-market valuation of financial instruments, the future vesting of share awards and other timing differences.

10. Dividends

 
                                                        Year ended  Year ended 
                                                           31.3.19     31.3.18 
                                                            GBP000      GBP000 
------------------------------------------------------  ----------  ---------- 
Attributable to equity share capital 
Ordinary 
- Interim paid 2.60p per share (2018: 2.50p)                 3,103       2,934 
- Prior year final paid 7.00p per share (2017: 6.20p)        8,303       7,261 
------------------------------------------------------  ----------  ---------- 
                                                            11,406      10,195 
------------------------------------------------------  ----------  ---------- 
 

A final dividend of 7.50p, if approved at the AGM on 11 July 2019, will be paid on 19 July 2019 to Shareholders on the register on 14 June 2019. This final dividend, amounting to GBP8,952,000, has not been included as a liability as at 31 March 2019, in accordance with IFRS.

11. Earnings Per Share

The calculation of the basic earnings per share is based on the earnings attributable to ordinary Shareholders divided by the weighted average number of shares in issue during the year. This is a different basis to the net asset per share calculations which are based on the number of shares at the year 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 options.

The EPRA 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 ended  Year ended 
                                                                                                   31.3.19     31.3.18 
                                                                                                       000         000 
--------------------------------------------------------------------------------------------  ------------  ---------- 
Ordinary shares in issue                                                                           119,363     118,611 
Weighting adjustment                                                                                 (307)       (997) 
--------------------------------------------------------------------------------------------  ------------  ---------- 
Weighted average ordinary shares in issue for calculation of basic and EPRA earnings per share     119,056     117,614 
Weighted average ordinary shares issued on share settled bonuses                                       862         920 
Weighted average ordinary shares to be issued under Performance Share Plan                             778         478 
--------------------------------------------------------------------------------------------  ------------  ---------- 
Weighted average ordinary shares in issue for calculation of diluted earnings per share            120,696     119,012 
--------------------------------------------------------------------------------------------  ------------  ---------- 
 
 
 
 
                                                                          GBP000  GBP000 
----------------------------------------------------------------------  --------  ------ 
Earnings used for calculation of basic and diluted earnings per share     42,620  26,285 
----------------------------------------------------------------------  --------  ------ 
 
Basic earnings per share                                                   35.8p   22.3p 
Diluted earnings per share                                                 35.3p   22.1p 
----------------------------------------------------------------------  --------  ------ 
 
 
 
                                                                                                                           GBP000    GBP000 
-----------------------------------------------------------------------------------------------------------------------  --------  -------- 
Earnings used for calculation of basic and diluted earnings per share                                                      42,620    26,285 
Net gain on sale and revaluation of investment properties - subsidiaries                                                 (59,292)  (37,415) 
                                                                                                              - joint 
                                                                                                               ventures   (1,288)   (3,317) 
Tax on profit on disposal of investment properties                                                                         14,130     3,931 
Gain on movement in share of joint ventures                                                                                     -   (1,693) 
Fair value movement on derivative financial instruments - subsidiaries                                                      3,322   (4,029) 
                                                                                                              - joint 
                                                                                                               ventures        35       (7) 
Fair value movement on Convertible Bond                                                                                     (865)     1,559 
Profit on cancellation of derivative financial instruments                                                                   (72)   (1,756) 
Expense on cancellation of loans                                                                                            1,458     2,296 
Retail Bond redemption premium                                                                                                  -     8,708 
Fair value movement of available-for-sale assets                                                                            (144)   (1,385) 
Deferred tax on adjusting items                                                                                           (9,935)   (1,431) 
-----------------------------------------------------------------------------------------------------------------------  --------  -------- 
Loss used for calculations of EPRA earnings per share                                                                    (10,031)   (8,254) 
-----------------------------------------------------------------------------------------------------------------------  --------  -------- 
 
EPRA loss per share                                                                                                        (8.4)p    (7.0)p 
-----------------------------------------------------------------------------------------------------------------------  --------  -------- 
 

The loss/earnings used for the calculation of EPRA earnings per share includes net rental income and development property profits/losses but excludes trading property gains.

12. Investment Properties

 
                                                                        31.3.19    31.3.18 
                                                                         GBP000     GBP000 
--------------------------------------------------------------------  ---------  --------- 
Book value at 1 April                                                   791,948    987,560 
Additions and transfers at cost                                          90,320    101,042 
Disposals                                                             (147,550)  (324,002) 
Revaluation surplus                                                      44,284     23,848 
Revaluation (deficit)/surplus attributable to profit share partners       (250)      3,500 
--------------------------------------------------------------------  ---------  --------- 
Book value at 31 March                                                  778,752    791,948 
--------------------------------------------------------------------  ---------  --------- 
 

All properties are stated at market value as at 31 March 2019, of which GBP791,100,000 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 remaining GBP150,000 was valued by the Directors. The fair value of the investment properties at 31 March 2019 is as follows:

 
                                                                     31.3.19  31.3.18 
                                                                      GBP000   GBP000 
-------------------------------------------------------------------  -------  ------- 
Book value                                                           778,752  791,948 
Lease incentives and costs included in trade and other receivables    14,687   12,375 
Head leases capitalised                                              (2,189)  (2,189) 
-------------------------------------------------------------------  -------  ------- 
Fair value                                                           791,250  802,134 
-------------------------------------------------------------------  -------  ------- 
 

Interest capitalised in respect of the refurbishment of investment properties at 31 March 2019 amounted to GBP11,357,000 (31 March 2018: GBP9,057,000).

The historical cost of investment property is GBP645,521,000 (31 March 2018: GBP622,226,000).

13. Investments in Joint Ventures

 
                                                           Year ended  Year ended 
                                                              31.3.19     31.3.18 
Share of results of joint ventures                             GBP000      GBP000 
---------------------------------------------------------  ----------  ---------- 
Summarised consolidated income statement 
---------------------------------------------------------  ----------  ---------- 
Revenue                                                        52,402      37,667 
---------------------------------------------------------  ----------  ---------- 
Gross rental income                                               971         189 
Property overheads                                              (411)       (412) 
---------------------------------------------------------  ----------  ---------- 
Net rental income/(expense)                                       560       (223) 
Development gain/(loss)                                         4,570     (1,939) 
Provision against book value of development stock             (7,198)     (1,880) 
Gain on revaluation of investment properties                    1,288       3,317 
Other operating income/(expenses)                                   9        (31) 
---------------------------------------------------------  ----------  ---------- 
Gross loss                                                      (771)       (756) 
Administrative expenses                                         (406)       (468) 
---------------------------------------------------------  ----------  ---------- 
Operating loss                                                (1,177)     (1,224) 
Interest payable on bank loans and overdrafts                   (511)        (24) 
Other interest payable and similar charges                    (1,576)     (2,012) 
Finance income                                                     92          16 
Change in fair value of derivative financial instruments         (35)           7 
---------------------------------------------------------  ----------  ---------- 
Loss before tax                                               (3,207)     (3,237) 
Tax                                                           (1,399)       1,255 
---------------------------------------------------------  ----------  ---------- 
Loss after tax                                                (4,606)     (1,982) 
Reversal of Creechurch loss*                                    1,389       3,485 
Uplift for Barts Square economic interest**                         -       1,693 
---------------------------------------------------------  ----------  ---------- 
Share of results of joint ventures                            (3,217)       3,196 
---------------------------------------------------------  ----------  ---------- 
 

* This is an adjustment that has been made to add back the Group's share of the loss incurred in one of its joint ventures, arising from finance and other costs in the year, to ensure the Group's interest is shown at its recoverable amount.

** This is an adjustment to reflect the impact of the consolidation of a joint venture at its economic interest of 43.8% rather than its actual ownership interest of 33.3%.

 
                                                  31.3.19   31.3.18 
Investment in joint ventures                       GBP000    GBP000 
-----------------------------------------------  --------  -------- 
Summarised balance sheets 
Non-current assets 
Investment properties                              25,289    22,623 
Owner occupied property, plant and equipment          106        39 
Derivative financial instruments                       23        59 
Deferred tax                                        1,774     3,071 
-----------------------------------------------  --------  -------- 
                                                   27,192    25,792 
-----------------------------------------------  --------  -------- 
Current assets 
Land, development and trading properties           56,935    76,474 
Trade and other receivables                        10,554     6,109 
Cash and cash equivalents                           7,612    11,790 
-----------------------------------------------  --------  -------- 
                                                   75,101    94,373 
-----------------------------------------------  --------  -------- 
Current liabilities 
Trade and other payables                         (13,599)  (18,666) 
-----------------------------------------------  --------  -------- 
                                                 (13,599)  (18,666) 
-----------------------------------------------  --------  -------- 
Non-current liabilities 
Trade and other payables                         (20,419)  (27,652) 
Borrowings                                       (48,473)  (49,523) 
-----------------------------------------------  --------  -------- 
                                                 (68,892)  (77,175) 
-----------------------------------------------  --------  -------- 
Net assets pre-adjustments                         19,802    24,324 
Reversal of Creechurch net liability position*      4,874     3,485 
-----------------------------------------------  --------  -------- 
Net assets                                         24,676    27,809 
-----------------------------------------------  --------  -------- 
 

* This is an adjustment that has been made to add back the Group's share of the loss incurred in one of its joint ventures, arising from finance and other costs in the year, to ensure the Group's interest is shown at its recoverable amount.

The Directors' valuation of land, developments and trading properties shows a surplus of GBPnil (31 March 2018: GBP1,700,000) above book value.

14. Land, Developments and Trading Properties

 
                                   31.3.19  31.3.18 
                                    GBP000   GBP000 
---------------------------------  -------  ------- 
Development properties               2,283    6,014 
Properties held as trading stock        28       28 
---------------------------------  -------  ------- 
                                     2,311    6,042 
---------------------------------  -------  ------- 
 

The Directors' valuation of land, developments and trading properties shows a surplus of GBP578,000 (31 March 2018: GBP628,000) above book value.

Total interest to date in respect of the development of sites is included in stock to the extent of GBPnil (2018: GBPnil). Interest capitalised during the year in respect of development sites amounted to GBPnil (31 March 2018: GBP2,188,000 relating to assets which were sold during the year).

15. Available-for-sale investments

The gain of GBP144,000 (2018: 1,385,000) recognised in the year is the result of cash received in relation to a previously fully impaired asset.

16. Trade and Other Receivables

 
                    31.3.19  31.3.18 
                     GBP000   GBP000 
------------------  -------  ------- 
Trade receivables     9,680   35,883 
Other receivables    22,856   30,083 
Prepayments           4,173    3,841 
Accrued income       22,017   30,950 
------------------  -------  ------- 
                     58,726  100,757 
------------------  -------  ------- 
 

17. Cash and Cash Equivalents

 
                                                 31.3.19  31.3.18 
                                                  GBP000   GBP000 
-----------------------------------------------  -------  ------- 
Rent deposits and cash held at managing agents     2,599    5,371 
Restricted cash                                    2,678    2,713 
Cash deposits                                    192,293   83,787 
-----------------------------------------------  -------  ------- 
                                                 197,570   91,871 
-----------------------------------------------  -------  ------- 
 

Restricted cash is made up of cash held by solicitors and cash in blocked/restricted bank accounts.

18. Trade and Other Payables

 
                                       31.3.19  31.3.18 
                                        GBP000   GBP000 
-------------------------------------  -------  ------- 
Trade payables                          13,009   11,175 
Other payables                           1,869    1,632 
Accruals                                23,368   32,735 
Deferred income                          4,913    5,836 
-------------------------------------  -------  ------- 
Current trade and other payables        43,159   51,378 
 
Accruals                                11,405        - 
-------------------------------------  -------  ------- 
Non-current trade and other payables    11,405        - 
-------------------------------------  -------  ------- 
Total trade and other payables          54,564   51,378 
-------------------------------------  -------  ------- 
 

19. Borrowings

 
                               31.3.19  31.3.18 
                                GBP000   GBP000 
-----------------------------  -------  ------- 
Current borrowings             100,468        - 
-----------------------------  -------  ------- 
Borrowings repayable within: 
- one to two years                   -  272,501 
- two to three years           195,410        - 
- three to four years                -        - 
- four to five years            37,399   21,878 
- five to six years             92,005        - 
- six to ten years                   -  122,613 
-----------------------------  -------  ------- 
Non-current borrowings         324,814  416,992 
-----------------------------  -------  ------- 
Total borrowings               425,282  416,992 
-----------------------------  -------  ------- 
 

Included within current borrowings is the Convertible Bond at its fair value of GBP100,468,000 (31 March 2018: GBP101,333,000) which is repayable in June 2019. It is a financial instrument classified as Level 1 under the IFRS 13 Fair Value Measurement fair value hierarchy.

 
                     31.3.19   31.3.18 
Net gearing           GBP000    GBP000 
-----------------  ---------  -------- 
Total borrowings     425,282   416,992 
Cash               (197,570)  (91,871) 
-----------------  ---------  -------- 
Net borrowings       227,712   325,121 
-----------------  ---------  -------- 
 

Net borrowings excludes the Group's share of borrowings in joint ventures of GBP48,473,000 (31 March 2018: GBP49,523,000) and cash of GBP7,612,000 (31 March 2018: GBP11,790,000). All borrowings in joint ventures are secured.

 
             31.3.19  31.3.18 
              GBP000   GBP000 
-----------  -------  ------- 
Net assets   567,425  533,894 
-----------  -------  ------- 
Gearing          40%      61% 
-----------  -------  ------- 
 

20. Derivative Financial Instruments

 
                                             31.3.19  31.3.18 
                                              GBP000   GBP000 
-------------------------------------------  -------  ------- 
Derivative financial instruments asset           915      123 
-------------------------------------------  -------  ------- 
Derivative financial instruments liability   (4,158)  (2,874) 
-------------------------------------------  -------  ------- 
 

The fair values of the Group's outstanding interest rate swaps, caps and floors 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

 
             31.3.19  31.3.18 
              GBP000   GBP000 
-----------  -------  ------- 
Authorised    39,577   39,577 
-----------  -------  ------- 
 

The authorised share capital of the Company is GBP39,576,627 divided into ordinary shares of 1p each and deferred shares of 1/8p each.

 
                                                                        31.3.19  31.3.18 
                                                                         GBP000   GBP000 
----------------------------------------------------------------------  -------  ------- 
Allotted, called up and fully paid: 
- 119,363,349 (31 March 2018: 118,610,741) ordinary shares of 1p each     1,194    1,186 
- 212,145,300 deferred shares of 1/8p each                                  265      265 
----------------------------------------------------------------------  -------  ------- 
                                                                          1,459    1,451 
----------------------------------------------------------------------  -------  ------- 
 

22. Net Assets per Share

 
 
                                                                     Number of      31.3.19 
                                                            31.3.19     shares        Pence 
                                                             GBP000        000    per share 
--------------------------------------------------------  ---------  ---------  ----------- 
Net asset value                                             567,425    119,363 
Less: deferred shares                                         (265) 
--------------------------------------------------------  ---------  ---------  ----------- 
Basic net asset value                                       567,160    119,363          475 
Add: share settled bonus                                                   862 
Add: dilutive effect of the Performance Share Plan                         734 
--------------------------------------------------------  ---------  ---------  ----------- 
Diluted net asset value                                     567,160    120,959          469 
Adjustment for: 
     - fair value of financial instruments                    3,218 
     - fair value movement on Convertible Bond                  468 
     - deferred tax                                          11,687 
--------------------------------------------------------  ---------  ---------  ----------- 
Adjusted diluted net asset value                            582,533    120,959          482 
Adjustment for: 
     - fair value of trading and development properties         578 
--------------------------------------------------------  ---------  ---------  ----------- 
EPRA net asset value                                        583,111    120,959          482 
Adjustment for: 
     - fair value of fixed rate loans                       (5,449) 
     - fair value of financial instruments                  (3,218) 
     - deferred tax                                        (11,687) 
--------------------------------------------------------  ---------  ---------  ----------- 
EPRA triple net asset value                                 562,757    120,959          465 
--------------------------------------------------------  ---------  ---------  ----------- 
 

The adjustment for the fair value of trading and development properties represents the surplus as at 31 March 2019.

 
 
                                                                               Number of      31.3.18 
                                                                      31.3.18     shares        Pence 
                                                                       GBP000        000    per share 
------------------------------------------------------------------  ---------  ---------  ----------- 
Net asset value                                                       533,894    118,611 
Less deferred shares                                                    (265) 
------------------------------------------------------------------  ---------  ---------  ----------- 
Basic net asset value                                                 533,629    118,611          450 
Add: share settled bonus                                                             920 
Add: dilutive effect of the Performance Share Plan                                   478 
------------------------------------------------------------------  ---------  ---------  ----------- 
Diluted net asset value                                               533,629    120,009          445 
Adjustment for: 
               - fair value of financial instruments                    2,692 
               - fair value movement on Convertible Bond                1,333 
               - deferred tax                                          21,662 
------------------------------------------------------------------  ---------  ---------  ----------- 
Adjusted diluted net asset value                                      559,316    120,009          466 
Adjustment for: 
               - fair value of trading and development properties       2,328 
------------------------------------------------------------------  ---------  ---------  ----------- 
EPRA net asset value                                                  561,644    120,009          468 
Adjustment for: 
               - fair value of financial instruments                  (2,692) 
               - deferred tax                                        (21,662) 
------------------------------------------------------------------  ---------  ---------  ----------- 
EPRA triple net asset value                                           537,290    120,009          448 
------------------------------------------------------------------  ---------  ---------  ----------- 
 

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 triple net asset value per share reflects the fair value of all the assets and liabilities of the Group at 31 March 2019. One of the loans held by the Group is at a fixed rate and therefore not at fair value. The adjustment of GBP5,449,000 (2018: GBPnil) is the increase from book to fair value.

23. Related Party Transactions

At 31 March 2019 and 31 March 2018 the following amounts were due from the Group's joint ventures.

 
                                                 31.3.19  31.3.18 
                                                  GBP000   GBP000 
-----------------------------------------------  -------  ------- 
King Street Developments (Hammersmith) Limited        71    9,916 
Shirley Advance LLP                                  330      249 
Barts Square companies                                34    2,205 
Old Street Holdings LP                                 3        3 
Creechurch Place Limited                          22,073   32,096 
-----------------------------------------------  -------  ------- 
 

24. Capital Commitments

The Group has a commitment of GBP64,900,000 (31 March 2018: GBP63,143,000) in relation to construction contracts, which are due to be completed in the year to March 2020, of which GBP19,200,000 (2018: GBP520,000) relates to the Group's share of commitments in joint ventures.

25. Post Balance Sheet Events

In May 2019 the Group completed its acquisition of the site at Charterhouse Street, London EC1, in joint venture with AshbyCapital, for GBP75,000,000 (Helical's share: GBP37,500,000).

Appendix 1 - See-through Analysis

All appendices are unaudited.

Helical holds a significant proportion of its property assets in joint ventures with partners that provide the majority of the equity required to purchase the assets, whilst relying on the Group to provide asset management or development expertise. Accounting convention requires Helical to account under IFRS for our share of the net results and net assets of joint ventures in limited detail in the Income Statement and Balance Sheet. Net asset value per share, a key performance measure used in the real estate industry, as reported in the financial statements under IFRS, does not provide shareholders with the most relevant information on the fair value of assets and liabilities within an ongoing real estate company with a long-term investment strategy.

This analysis incorporates the separate components of the results of the consolidated subsidiaries and Helical's share of its joint ventures' results into a 'see-through' analysis of our property portfolio, debt profile and the associated income streams and financing costs, to assist in providing a comprehensive overview of the Group's activities.

See-through net rental income

Helical's share of the gross rental income, head rents payable and property overheads from property assets held in subsidiaries and in joint ventures are shown in the table below:

 
                                                                              Year ended  Year ended 
                                                                                 31.3.19     31.3.18 
                                                                                  GBP000      GBP000 
--------------------------------------------  ----------------------------  ------------  ---------- 
Gross rental income                           - subsidiaries                      28,154      40,157 
 - joint ventures                                                                    971         189 
 ----------------------------                                               ------------  ---------- 
Total gross rental income                                                         29,125      40,346 
Rents payable                                 - subsidiaries                       (285)       (144) 
Property overheads                            - subsidiaries                     (3,410)     (3,549) 
 - joint ventures                                                                  (411)       (412) 
Net rental costs/(income) attributable to profit share partner                       140       (135) 
------------------------------------------------------------------  ------  ------------  ---------- 
See-through net rental income                                                     25,159      36,106 
--------------------------------------------------------------------------  ------------  ---------- 
 
 

See-through net development (losses)/profits

Helical's share of development profits from property assets held in subsidiaries and in joint ventures are shown in the table below:

 
                                                            Year ended  Year ended 
                                                               31.3.19     31.3.18 
                                                                GBP000      GBP000 
----------------------------  ----------------------------  ----------  ---------- 
In parent and subsidiaries                                       4,740     (1,961) 
In joint ventures                                                4,570     (1,939) 
----------------------------------------------------------  ----------  ---------- 
Total gross development profit/(loss)                            9,310     (3,900) 
Provision against stock       - subsidiaries                   (6,521)     (2,213) 
 - joint ventures                                              (7,198)     (1,880) 
 ----------------------------                               ----------  ---------- 
See-through development losses                                 (4,409)     (7,993) 
----------------------------------  ----------------------  ----------  ---------- 
 
 

See-through net gain on sale and revaluation of investment properties

Helical's share of the net gain on sale and revaluation of investment properties held in subsidiaries and in joint ventures is shown in the table below:

 
                                                                         Year ended  Year ended 
                                                                            31.3.19     31.3.18 
                                                                             GBP000      GBP000 
------------------------------------------------  -----------------  --------------  ---------- 
Revaluation surplus on investment properties      - subsidiaries             44,284      23,848 
 - joint ventures                                                             1,288       3,317 
 ------------------------------------------------------------------  --------------  ---------- 
Total revaluation surplus                                                    45,572      27,165 
Net gain on sale of investment properties         - subsidiaries             15,008      13,567 
                                                  - joint ventures                -           - 
------------------------------------------------  -----------------  --------------  ---------- 
Total net gain on sale of investment properties                              15,008      13,567 
-------------------------------------------------------------------  --------------  ---------- 
See-through net gain on sale and revaluation of investment properties        60,580      40,732 
---------------------------------------------------------------------------  ------  ---------- 
 
 

See-through net finance costs

Helical's share of the interest payable, finance charges, capitalised interest and interest receivable on bank borrowings, bonds and cash deposits in subsidiaries and in joint ventures is shown in the table below:

 
                                                                          Year ended  Year ended 
                                                                             31.3.19     31.3.18 
                                                                              GBP000      GBP000 
-----------------------------------------------------  -----------------  ----------  ---------- 
Interest payable on bank loans, bonds and overdrafts   - subsidiaries         16,414      26,873 
 - joint ventures                                                                511          24 
 -----------------------------------------------------------------------  ----------  ---------- 
Total interest payable on bank loans, bonds and overdrafts                    16,925      26,897 
Other interest payable and similar charges             - subsidiaries          4,208      15,761 
 - joint ventures                                                              1,576       2,012 
Interest capitalised                                   - subsidiaries        (3,215)     (5,196) 
-----------------------------------------------------  -----------------  ----------  ---------- 
Total finance costs                                                           19,494      39,474 
Interest receivable and similar income                 - subsidiaries          (983)     (4,303) 
 - joint ventures                                                               (92)        (16) 
 -----------------------------------------------------------------------  ----------  ---------- 
See-through net finance costs                                                 18,419      35,155 
------------------------------------------------------------------------  ----------  ---------- 
 

See-through property portfolio

Helical's share of the investment, trading and development property portfolio in subsidiaries and joint ventures is shown in the table below:

 
 
                                                                         31.3.19    31.3.18 
                                                                          GBP000     GBP000 
--------------------------------------------------  -----------------  ---------  --------- 
Investment property fair value                      - subsidiaries       791,250    802,134 
 - joint ventures                                                         25,382     22,623 
 --------------------------------------------------------------------  ---------  --------- 
Total investment property fair value                                     816,632    824,757 
Trading and development stock                       - subsidiaries         2,311      6,042 
 - joint ventures                                                         56,935     76,474 
 --------------------------------------------------------------------  ---------  --------- 
Total trading and development stock                                       59,246     82,516 
Trading and development stock surplus               - subsidiaries           578        628 
 - joint ventures                                                              -      1,700 
 --------------------------------------------------------------------  ---------  --------- 
Total trading and development stock surpluses                                578      2,328 
---------------------------------------------------------------------  ---------  --------- 
Total trading and development stock at fair value                         59,824     84,844 
---------------------------------------------------------------------  ---------  --------- 
See-through property portfolio                                           876,456    909,601 
---------------------------------------------------------------------  ---------  --------- 
 

See-through net borrowings

Helical's share of borrowings and cash deposits in parent and subsidiaries and joint ventures is shown in the table below:

 
 
                                                                         31.3.19    31.3.18 
                                                                          GBP000     GBP000 
---------------------------------------------------------------------  ---------  --------- 
Gross borrowings less than one year                 - subsidiaries       100,468          - 
Gross borrowings more than one year                 - subsidiaries       324,814    416,992 
--------------------------------------------------  -----------------  ---------  --------- 
Total gross borrowings in parent and subsidiaries                        425,282    416,992 
Gross borrowings less than one year                 - joint ventures           -          - 
Gross borrowings more than one year                 - joint ventures      48,473     49,523 
--------------------------------------------------  -----------------  ---------  --------- 
Total gross borrowings in joint ventures                                  48,473     49,523 
Cash and cash equivalents                           - subsidiaries     (197,570)   (91,871) 
 - joint ventures                                                        (7,612)   (11,790) 
 --------------------------------------------------------------------  ---------  --------- 
See-through net borrowings                                               268,573    362,854 
---------------------------------------------------------------------  ---------  --------- 
 

See-through analysis ratios

 
                     31.03.19  31.03.18 
                       GBP000    GBP000 
-------------------  --------  -------- 
Balance sheet 
Property portfolio    876,456   909,601 
Net borrowings        268,573   362,854 
Net assets            567,425   533,894 
 
Loan to value           30.6%     39.9% 
Gearing                 47.3%     68.0% 
-------------------  --------  -------- 
 

Appendix 2 - Total Accounting Return and Total Property Return

 
                             Year ended  Year ended 
                               31.03.19    31.03.18 
                                   GBPm        GBPm 
---------------------------  ----------  ---------- 
Brought forward net assets        533.9       516.9 
Carried forward net assets        567.4       533.9 
---------------------------  ----------  ---------- 
Increase in net assets             33.5        17.0 
Dividends paid                     11.4        10.2 
---------------------------  ----------  ---------- 
Total Accounting Return            44.9        27.2 
 
Total Accounting Return            8.4%        5.3% 
---------------------------  ----------  ---------- 
 
 
                                                        Year ended  Year ended 
                                                          31.03.19    31.03.18 
                                                              GBPm        GBPm 
------------------------------------------------------  ----------  ---------- 
See-through net rental income                                 25.2        36.1 
See-through development losses                               (4.4)       (8.0) 
See-through revaluation surplus                               45.6        27.2 
See-through net gain on sale of investment properties         15.0        13.5 
------------------------------------------------------  ----------  ---------- 
Total Property Return                                         81.4        68.8 
------------------------------------------------------  ----------  ---------- 
 

Appendix 3 - Five Year Review

Income Statements

 
                                                Year      Year      Year      Year      Year 
                                               ended     ended     ended     ended     ended 
                                             31.3.19   31.3.18   31.3.17   31.3.16   31.3.15 
                                              GBP000    GBP000    GBP000    GBP000    GBP000 
------------------------------------------  --------  --------  --------  --------  -------- 
Revenue                                       44,175   175,596    99,934   116,500   106,341 
------------------------------------------  --------  --------  --------  --------  -------- 
Net rental income                             24,599    36,329    46,162    42,164    34,233 
Development property profit/(loss)             2,564   (1,961)     7,143    30,700    16,126 
Provisions against stock                     (4,345)   (2,213)   (6,300)   (6,448)     (452) 
Trading profit                                     -         -         -         -     2,503 
Share of results of joint ventures           (3,217)     3,196   (6,528)    50,469    27,497 
Other operating income                             -       111       982        20       368 
------------------------------------------  --------  --------  --------  --------  -------- 
Gross profit before gain on investment 
 properties                                   19,601    35,462    41,459   116,905    80,275 
Gain on sale of investment properties         15,008    13,567     1,391     2,385     2,480 
Revaluation surplus on investment 
 properties                                   44,284    23,848    39,152    47,441    66,904 
Fair value movement of available-for-sale 
 assets                                          144     1,385   (3,352)   (1,370)     (773) 
Administrative expenses excluding 
 performance related awards                 (10,858)  (11,023)  (10,800)  (10,716)  (10,156) 
Performance related awards                   (5,895)   (1,742)   (7,572)  (15,387)  (16,374) 
Finance costs                               (17,407)  (37,438)  (25,598)  (24,113)  (23,678) 
Finance income                                   983     4,303     3,156     5,128     2,480 
Movement in fair value of derivative 
 financial instruments                       (3,322)     4,029       789   (6,860)   (8,389) 
Change in fair value of Convertible 
 Bond                                            865   (1,559)     2,973       516   (3,263) 
Foreign exchange gains/(losses)                   53      (10)       (3)       100   (2,061) 
------------------------------------------  --------  --------  --------  --------  -------- 
Profit before tax                             43,456    30,822    41,595   114,029    87,445 
Tax on profit on ordinary activities           (836)   (4,537)   (2,471)   (9,146)  (12,669) 
------------------------------------------  --------  --------  --------  --------  -------- 
Profit after tax                              42,620    26,285    39,124   104,883    74,776 
------------------------------------------  --------  --------  --------  --------  -------- 
 

Balance Sheets

 
                                                                     31.3.19  31.3.18    31.3.17    31.3.16    31.3.15 
                                                                      GBP000   GBP000     GBP000     GBP000     GBP000 
-------------------------------------------------------------------  -------  -------  ---------  ---------  --------- 
Investment portfolio at fair value                                   791,250  802,134  1,003,000  1,041,100    701,521 
Land, developments and trading properties                              2,311    6,042     86,680     92,035     92,578 
Group's share of investment properties held by joint ventures         25,382   22,623     13,907     11,552     88,305 
Group's share of land, trading and development properties held by 
 joint ventures                                                       56,935   76,474     89,115     75,904    102,715 
Group's share of land, trading and development stock surpluses           578    2,328     12,514     19,412     36,243 
-------------------------------------------------------------------  -------  -------  ---------  ---------  --------- 
Group's share of total properties at fair value                      876,456  909,601  1,205,216  1,240,003  1,021,362 
-------------------------------------------------------------------  -------  -------  ---------  ---------  --------- 
 
Net debt                                                             227,712  325,121    574,439    659,393    477,248 
Group's share of net debt of joint ventures                           40,861   37,733     45,537     22,449     54,649 
-------------------------------------------------------------------  -------  -------  ---------  ---------  --------- 
Group's share of net debt                                            268,573  362,854    619,976    681,842    531,897 
-------------------------------------------------------------------  -------  -------  ---------  ---------  --------- 
 
Net assets                                                           567,425  533,894    516,897    480,721    404,363 
-------------------------------------------------------------------  -------  -------  ---------  ---------  --------- 
EPRA net assets                                                      583,111  561,644    565,973    540,731    469,128 
-------------------------------------------------------------------  -------  -------  ---------  ---------  --------- 
 
Dividend per ordinary share paid/payable                               9.60p    8.70p      3.12p     12.60p      6.85p 
-------------------------------------------------------------------  -------  -------  ---------  ---------  --------- 
Dividend per ordinary share declared                                  10.10p    9.50p      8.60p      8.17p      7.25p 
-------------------------------------------------------------------  -------  -------  ---------  ---------  --------- 
 
EPRA (loss)/earnings per ordinary share                               (8.4)p   (7.0)p       0.5p      17.1p       2.4p 
-------------------------------------------------------------------  -------  -------  ---------  ---------  --------- 
EPRA net assets per share                                               482p     468p       473p       456p       385p 
-------------------------------------------------------------------  -------  -------  ---------  ---------  --------- 
 

Appendix 4 - Property Portfolio

London Portfolio - Investment Properties

 
                                                                                Area  Vacancy rate at  Vacancy rate at 
Address                             Description                          sq ft (NIA)    31 March 2019    31 March 2018 
----------------------------------  ----------------------------------  ------------  ---------------  --------------- 
Completed, let and available to 
let 
The Warehouse & Studio, The Bower, 
 EC1                                Multi-let office building                151,439             0.0%             0.0% 
The Tower, The Bower, EC1           Multi-let office building                181,742            28.5%              n/a 
The Loom, E1                        Multi-let office building                108,640             2.9%            17.0% 
                                    Single-let recording 
The Powerhouse, W4                   studios/office building                  24,288             0.0%             0.0% 
                                    Multi-let office building with 
Power Road Studios, W4               redevelopment potential                  57,585            40.3%            29.0% 
25 Charterhouse Square, EC1         Multi-let office building                 43,493             0.0%             0.0% 
90 Bartholomew Close, EC1           Multi-let office building                 30,427            63.7%              n/a 
----------------------------------  ----------------------------------  ------------  ---------------  --------------- 
                                                                             597,614            16.2%             8.3% 
Being redeveloped 
Kaleidoscope, EC1                   Over-station office development          88,680*              n/a              n/a 
54 Bartholomew Close, EC1           Office redevelopment                     10,286*              n/a              n/a 
----------------------------------  ----------------------------------  ------------  ---------------  --------------- 
                                                                             696,580              n/a              n/a 
 ---------------------------------------------------------------------  ------------  ---------------  --------------- 
 

*Estimated space once developed.

London Portfolio - Development Properties

 
                                                                                Area  Vacancy rate at  Vacancy rate at 
Address                             Description                          sq ft (NIA)    31 March 2019    31 March 2018 
----------------------------------  ----------------------------------  ------------  ---------------  --------------- 
Completed, let and available to 
let 
One Creechurch Place, EC3           Multi-let office building                273,291             0.0%            31.0% 
Being redeveloped 
Barts Square, EC1                   236 residential apartments and           217,750              n/a              n/a 
                                    14,916 sq ft retail/leisure 
                                    development under construction 
----------------------------------  ----------------------------------  ------------  ---------------  --------------- 
                                                                             491,041 
 ---------------------------------------------------------------------  ------------  ---------------  --------------- 
 

Manchester Offices

 
                                                          Vacancy    Vacancy 
                                                  Area    rate at    rate at 
                                                 sq ft   31 March   31 March 
Address            Description                   (NIA)       2019       2018 
-----------------  --------------------------  -------  ---------  --------- 
Churchgate & Lee   Multi-let office building   244,627       3.4%       0.0% 
35 Dale Street     Multi-let office building    54,112       0.0%      38.0% 
Fourways House     Multi-let office building    59,067      25.7%        n/a 
                   Newly completed office 
Trinity             building                    58,951     100.0%        n/a 
-----------------  --------------------------  -------  ---------  --------- 
                                               416,757      19.8%      12.8% 
 --------------------------------------------  -------  ---------  --------- 
 

Regional Portfolio

 
                                                                      Area  Vacancy rate at   Vacancy rate at 31 March 
Address                      Held as       Description         sq ft (NIA)    31 March 2019                       2018 
---------------------------  ------------  -----------------  ------------  ---------------  ------------------------- 
Land 
Dawley Road, Telford         Development   Residential land            n/a              n/a                        n/a 
---------------------------  ------------  -----------------  ------------  ---------------  ------------------------- 
Retail Development 
Ibstock site, Kingswinford   Development   Retail park             70,000*              n/a                        n/a 
Barking Road, East Ham       Development   Retail/leisure          43,000*              n/a                        n/a 
---------------------------  ------------  -----------------  ------------  ---------------  ------------------------- 
                                                                   113,000 
  ----------------------------------------------------------  ------------  ---------------  ------------------------- 
 

*Estimated space once developed.

Appendix 5 - Risk Register

 
STRATEGIC RISKS 
 Strategic risks are external risks that could prevent the Group delivering its strategy. These 
 risks principally impact our decision to purchase or exit from a property asset. 
Risk                                    Risk description                        Mitigation/action 
                                        --------------------------------------  -------------------------------------- 
The Group's strategy is inconsistent    Changing market conditions could        Management constantly monitors the 
with the market                         hinder the Group's ability to buy and   market and makes changes to the 
                                        sell properties envisioned              Group's strategy in light 
                                        in its strategy. The location, size     of market conditions. 
                                        and mix of properties in Helical's 
                                        portfolio determine                     The Group conducts an annual strategic 
                                        the impact of the risk.                 review and maintains rolling forecasts 
                                        If the Group's chosen markets           with inbuilt 
                                        underperform, the impact on the         sensitivity to model anticipated 
                                        Group's liquidity, investment           economic conditions. 
                                        property revaluations and rental 
                                        income is greater.                      The Group's management team is highly 
                                                                                experienced and has a strong track 
                                                                                record of understanding 
                                                                                the property market. 
 
                                                                                Due to the Group's small management 
                                                                                team, strategic change can be 
                                                                                implemented quickly. 
                                        --------------------------------------  -------------------------------------- 
The Group carries out significant       The Group carries out significant       Management carefully reviews the risk 
development projects                    development projects over a number of   profile of individual developments and 
                                        years and is therefore                  in some cases 
                                        exposed to fluctuations in the market   builds properties in several phases to 
                                        and tenant demand levels over time.     minimise the Group's exposure to 
                                                                                reduced demand for 
                                                                                particular asset classes or 
                                                                                geographical locations over time. The 
                                                                                Group carries out developments 
                                                                                in partnership with other 
                                                                                organisations and pre-lets space to 
                                                                                reduce development risk, where 
                                                                                considered appropriate. 
                                        --------------------------------------  -------------------------------------- 
Property values decline/reduced tenant  The property portfolio is at risk of    The Group's property portfolio has 
demand for space                        valuation falls through changes in      tenants from diverse industries, 
                                        market conditions,                      reducing the risk of over-exposure 
                                        including underperforming sectors or    to one sector. We carry out occupier 
                                        locations, lack of tenant demand or     financial covenant checks ahead of 
                                        general economic                        approving leases in 
                                        uncertainty.                            order to limit our exposure to tenant 
                                                                                failure. 
 
                                                                                Management reviews external data, 
                                                                                seeks the advice of industry experts 
                                                                                and monitors the performance 
                                                                                of individual assets and sectors in 
                                                                                order to dispose of non-performing 
                                                                                assets and rebalance 
                                                                                the portfolio to suit the changing 
                                                                                market. Management regularly models 
                                                                                different property 
                                                                                revaluation scenarios through its 
                                                                                forecasting process in order to 
                                                                                prepare a considered approach 
                                                                                to mitigating the potential impact. 
                                        --------------------------------------  -------------------------------------- 
Political risk                          There is a risk that regulatory and     Management seeks advice from experts 
                                        tax changes could adversely affect the  to ensure it understands the political 
                                        market in which                         environment and 
                                        the Group operates and changes in       the impact of emerging regulatory and 
                                        legislation could lead to delays in     tax changes on the Group. It maintains 
                                        receiving planning permission.          good relationships 
                                                                                with planning consultants and local 
                                        There remains uncertainty over the      authorities. Where appropriate, 
                                        outcome of the United Kingdom's         management joins with 
                                        decision to leave the European          industry representatives 
                                        Union. The result could adversely       to contribute to policy and regulatory 
                                        affect the case for investment in the   debate relevant to the industry. 
                                        UK, depressing the 
                                        property investment and occupational 
                                        market, negatively impacting the 
                                        Group's performance. 
                                        --------------------------------------  -------------------------------------- 
 
 
FINANCIAL RISKS 
 Financial risks are those that could prevent the Group from funding its chosen strategy, both 
 in the long and short term. 
Risk                                    Risk description                        Mitigation/action 
                                        --------------------------------------  -------------------------------------- 
Availability and cost of bank           The inability to roll over existing     The Group maintains a good 
borrowing and cash resources            facilities or take out new borrowing    relationship with many established 
                                        could impact on the                     lending institutions and borrowings 
                                        Group's ability to maintain its         are spread across a number of these. 
                                        current portfolio and purchase new 
                                        properties. The Group may               Funding requirements are reviewed 
                                        forego opportunities if it does not     bi-monthly by management, who seek to 
                                        maintain sufficient cash to take        ensure that the maturity 
                                        advantage of them as                    dates of borrowings are spread over 
                                        they arise.                             several years. 
                                        The Group is at risk of increased 
                                        interest rates on unhedged borrowings.  Management monitors the cash levels of 
                                                                                the Group on a daily basis and 
                                                                                maintains sufficient 
                                                                                levels of cash resources and undrawn 
                                                                                committed bank facilities to fund 
                                                                                opportunities as they 
                                                                                arise. 
 
                                                                                The Group hedges the interest rates on 
                                                                                the majority of its borrowings, 
                                                                                effectively fixing 
                                                                                or capping the rates over several 
                                                                                years. 
                                        --------------------------------------  -------------------------------------- 
Breach of loan covenants                If the Group breaches debt covenants,   Covenants are closely monitored 
                                        lending institutions may require the    throughout the year. Management 
                                        early repayment                         carries out sensitivity analyses 
                                        of borrowings.                          to assess the likelihood of future 
                                                                                breaches based on significant changes 
                                                                                in property values 
                                                                                or rental income. 
                                        --------------------------------------  -------------------------------------- 
 
 
OPERATIONAL RISK 
 Operational risks are internal risks that could prevent the Group from delivering its strategy. 
Risk                                    Risk description                        Mitigation/action 
                                        --------------------------------------  -------------------------------------- 
Employment and retention of key         The Group's continued success is        The senior management team is very 
personnel                               reliant on its management and staff     experienced with a high average length 
                                        and successful relationships            of service. The 
                                        with its joint venture partners.        Nominations Committee and Board 
                                                                                regularly review succession planning 
                                                                                issues and remuneration 
                                                                                is set to attract and retain high 
                                                                                calibre staff. Staff are encouraged to 
                                                                                undertake personal 
                                                                                development and training courses, 
                                                                                which the Company supports. 
 
                                                                                The Group has well established 
                                                                                relationships with joint venture 
                                                                                partners. 
                                        --------------------------------------  -------------------------------------- 
Reliance on key contractors and         The Group is dependent on the           The Group actively monitors its 
suppliers                               performance of its key contractors and  development projects and uses external 
                                        suppliers for successful                project managers to 
                                        delivery of its development property    provide support. Potential contractors 
                                        assets.                                 are vetted for their quality, health 
                                                                                and safety record 
                                                                                and financial viability prior to 
                                                                                engagement. Their performance is 
                                                                                closely monitored throughout 
                                                                                the development process, with 
                                                                                bi-weekly reporting to management. The 
                                                                                Group often works with 
                                                                                contractors with whom it has 
                                                                                previously worked successfully. 
                                        --------------------------------------  -------------------------------------- 
Inability to asset manage, develop and  The Group relies on external parties    The Group has a highly experienced 
let property assets                     to support it in asset managing,        team managing its properties, who 
                                        developing and letting                  regularly conduct on-site 
                                        its properties, including planning      reviews and monitor cash flows against 
                                        consultants, architects, project        budget. The Group seeks to maintain 
                                        managers, marketing agencies,           excellent relationships 
                                        lawyers and managing agents.            with its specialist professional 
                                                                                advisors. Management actively monitors 
                                                                                these parties to ensure 
                                                                                they are delivering the required 
                                                                                quality on time. Where appropriate, 
                                                                                the Group engages parties 
                                                                                it has worked with successfully 
                                                                                previously. 
                                        --------------------------------------  -------------------------------------- 
Health and safety risk                  The nature of the Group's operations    The Group reviews and updates its 
                                        and markets expose it to potential      Health and Safety policy regularly and 
                                        health and safety                       it is approved by 
                                        risks both internally and externally    the Board annually. The Group engages 
                                        within the supply chain.                an external health and safety 
                                                                                consultant to review contractor 
                                                                                agreements prior to appointment and 
                                                                                ensures they have appropriate policies 
                                                                                and procedures 
                                                                                in place, then monitors the adherence 
                                                                                to such policies and procedures 
                                                                                throughout the project's 
                                                                                lifetime. 
 
                                                                                The Executive Committee reviews the 
                                                                                report by the external consultant 
                                                                                every month and the 
                                                                                Board reviews them at every scheduled 
                                                                                meeting. The internal asset managers 
                                                                                carry out regular 
                                                                                site visits. 
                                        --------------------------------------  -------------------------------------- 
Business disruption and cyber security  The Group relies on Information          The Group engages and actively 
                                        Technology to perform effectively and    manages external Information 
                                        a cyber-attack could                     Technology experts to ensure IT 
                                        result in ITsystems being unavailable,   systems operate effectively and that 
                                        adversely affecting the Group's          we respond to the evolving IT 
                                        operations.                              security environment. This 
                                        Commercially sensitive and personal      includes regular off-site backups and 
                                        information is electronically stored     a comprehensive disaster recovery 
                                        by the Group. Theft                      process. The external 
                                        of this information could adversely      provider also ensures the system is 
                                        impact the Group's commercial            secure and this is subject to routine 
                                        advantage and result in                  testing including 
                                        penalties where the information is       bi-annual disaster recovery tests. 
                                        governed by law (GDPR and Data 
                                        Protection Act 2018).                    There is a robust control environment 
                                                                                 in place for invoice approval and 
                                        The Group is at risk of being a victim   payment authorisations 
                                        of social engineering fraud.             including authorisation limits and a 
                                                                                 dual sign off requirement for large 
                                        An external event such as extreme        invoices and bank 
                                        weather, environmental incident, power   payments. 
                                        shortage or terrorist 
                                        attack could cause significant damage,   The Group provides training, and 
                                        disruption to the business or            there are procedures in place, to 
                                        reputational damage.                     identify emails of a suspicious 
                                                                                 nature ensuring these are flagged to 
                                                                                 the IT providers and employees do not 
                                                                                 open attachments 
                                                                                 or follow instructions within the 
                                                                                 email. 
 
                                                                                 The Group has a disaster recovery 
                                                                                 plan, on-site security at its 
                                                                                 properties and insurance policies 
                                                                                 in place in order to deal with any 
                                                                                 external events and mitigate their 
                                                                                 impact. 
                                        --------------------------------------  -------------------------------------- 
 
 
REPUTATIONAL RISKS 
 Reputational risks are those that could affect the Group in all aspects of its strategy. 
Risk                                    Risk description                        Mitigation/action 
                                        --------------------------------------  -------------------------------------- 
Poor management of stakeholder          The Group risks suffering from          The Group believes that by 
relations                               reputational damage resulting in a      successfully delivering its strategy 
                                        loss of credibility with                and mitigating its strategic, 
                                        key stakeholders including              financial and operational risks its 
                                        Shareholders, analysts, banking         good reputation will be protected. 
                                        institutions, contractors, managing 
                                        agents, tenants, property               The Group regularly reviews its 
                                        purchasers/sellers and employees.       strategy and risks to ensure it is 
                                                                                acting in the interests 
                                                                                of its stakeholders. The Group 
                                                                                maintains a strong relationship with 
                                                                                investors and analysts 
                                                                                through regular meetings. 
 
                                                                                Management closely monitors day-to-day 
                                                                                business operations and the Group has 
                                                                                a formal approval 
                                                                                procedure for all press releases and 
                                                                                public announcements. 
 
                                                                                A Group Disclosure Policy and Share 
                                                                                Dealing Code, Policy & Procedures have 
                                                                                been circulated 
                                                                                to all staff in accordance with the EU 
                                                                                Market Abuse Regulation (MAR). 
                                        --------------------------------------  -------------------------------------- 
Non-compliance with prevailing          The nature of the Group's operations    The Group's anti-bribery and 
legislation, regulation and best        and markets expose it to potential      corruption and whistleblowing policies 
practice                                bribery and corruption                  and procedures are reviewed 
                                        risks(including money laundering and    and updated annually and projects with 
                                        tax evasion) both internally and        greater exposure to bribery and 
                                        externally within the                   corruption are monitored 
                                        supply chain.                           closely. 
 
                                        The Group is exposed to the potential   The Group avoids doing business in 
                                        risk of acquiring or disposing of a     high risk territories. 
                                        property where the 
                                        owner/ purchaser has been involved in   The Group has related policies and 
                                        criminal conduct or illicit             procedures designed to mitigate 
                                        activities.                             bribery and corruption 
                                                                                risks including: Know Your Client 
                                        The Group would attract criticism and   checks; due diligence processes; 
                                        negative publicity were any instances   capital expenditure controls; 
                                        of modern slavery                       contracts risk assessment procedures 
                                        and human                               and competition and anti-trust 
                                        trafficking identified within its       guidance. The Group engages 
                                        supply chain.                           legal professionals to support these 
                                                                                policies where appropriate. 
                                        The Group would attract criticism and 
                                        negative publicity if instances of      All employees are required to complete 
                                        non-compliance with                     anti-bribery and corruption training 
                                        GDPR and the Data Protection Act 2018   and to submit 
                                        were identified. Non-compliance may     details of corporate hospitality and 
                                        also result in financial                gifts received. 
                                        penalties. 
                                                                                All property transactions are reviewed 
                                                                                and authorised by the Executive 
                                                                                Committee. 
 
                                                                                Our Modern Slavery Act statement, 
                                                                                which is prominently displayed on our 
                                                                                website, gives details 
                                                                                of our policy and our approach. 
 
                                                                                The Group monitors its GDPR and Data 
                                                                                Protection Act 2018 compliance to 
                                                                                ensure appropriate 
                                                                                safeguards, policies, procedures, 
                                                                                contractual terms and records are 
                                                                                implemented and maintained 
                                                                                in accordance with the regulation. 
                                        --------------------------------------  -------------------------------------- 
 

Appendix 6 - 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 Helical or Group

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 11).

EPRA net assets per share

Diluted net asset value per share adjusted to exclude fair value surplus of financial instruments and the Convertible Bond, and deferred tax on capital allowances and on investment properties revaluation, but including the fair value of trading and development properties in accordance with the best practice recommendations of EPRA (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.

EPRA triple net asset value per share

EPRA net asset value per share adjusted to include fair value of financial instruments and deferred tax on capital allowances and on investment properties revaluation (see Note 22).

Estimated rental value (ERV)

The market rental value of lettable space as estimated by the Group's valuers at each balance sheet date.

Gearing

Group borrowings expressed as a percentage of net assets.

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.

MCSI Inc. (MSCI IPD)

MSCI Inc. is a company that produces independent benchmarks of property returns.

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.

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 Appendix 1).

See-through net gearing

The see-through net borrowings expressed as a percentage of net assets (see Appendix 1).

Total Accounting Return

The growth in the net asset value of the Company plus dividends paid in the year, expressed as a percentage of net asset value at the start of the year (see Appendix 2).

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 Appendix 2).

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

www.helical.co.uk

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

FR LIFEIEEIVFIA

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