A2D Funding PLC RNS announcement (8065T)

TIDMA2D1

RNS Number : 8065T

A2D Funding PLC

26 July 2022

A2D FUNDING PLC

AUDITED RESULTS FOR THE YEARING 31 MARCH 2022

A2D Funding plc (LSE: A2D1) announces its audited results for the year ended 31 March 2022.

The following is an extract from the Company's financial statements which will be posted to shareholders on or around 29 July 2022.

Company summary

A2D Funding plc ("the Company" or "Issuer") is a special purpose company established for the purpose of issuing retail bonds on the London Stock Exchange (including further retail bonds issued in accordance with the Conditions) and lending the proceeds thereof to A2Dominion Housing Group Limited or one or more of its subsidiaries ("A2Dominion"). The Company has the benefit of a financial guarantee from A2Dominion for the full and punctual payment of interest and principal of bonds.

Business review

On 18 October 2013 the Company issued GBP150,000,000 bonds, listed on the London Stock Exchange. The proceeds of the bond issue were loaned to A2Dominion. Both the bonds and the loan bear interest at a fixed rate of 4.75% payable semi-annually in April and October. The loan was issued net of transaction costs of GBP793,515 which are amortised through the statement of comprehensive income over the loan term as deferred income. The loan and the bonds are due for repayment on 18 October 2022.

Principal risks and uncertainties

The principal risk and uncertainty for the Company is primarily credit risk as described more fully in the annual financial statements. This includes the full and timely receipt of interest and principal on the loan due from A2Dominion. During the current and prior year, all such amounts were paid on their due dates.

The directors have considered the nature and structure of the Company and are satisfied that there is sufficient capital in relation to the business activities of the Company and levels of planned financial performance.

Events after the balance sheet date

On 19th April 2022 the Company redeemed 50% of the outstanding on the Bonds ahead of the Bond Maturity date in accordance with the terms of the Bonds. As a result, GBP75,000,000 of principal together with an early redemption penalty of GBP1,263,000 was repaid to Bond holders on that date. The remaining GBP75,000,000 principal outstanding on the Bonds is due for repayment on 18th October 2022, being the Bond Maturity date. 50% of the issue costs (GBP51k) have also been released upon this partial redemption.

The Russia/Ukraine conflict has affected the global economic markets and is exacerbating ongoing economic challenges, including inflation and global supply chain disruption. Due to the financial guarantees in place in the transaction, the Directors believe that the Company's performance is not directly affected by the economic implications of the conflict.

Related party transactions

The Company has taken advantage of the exemption under section 33 of FRS102, not to disclose transactions with other wholly owned group companies consolidated by A2Dominion Housing Group Limited.

Under the terms of a corporate services agreement entered into by the Company at arm's length, Law Debenture Corporate Services Limited is contracted to provide certain corporate services including a registered office, corporate administration and directors amongst other services for which it charges a corporate service fee. The amount charged for these services during the year was GBP25k (2021:GBP25k) and the amount prepaid at year end was GBP11k (2021:GBP12k).

On behalf of the Board

Law Debenture Corporate Services Limited (Company Secretary)

29 July 2022

STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2022

 
                                   Year ended   Year ended 
                                     31 March     31 March 
                                         2022         2021 
                                       GBP000       GBP000 
-------------------------------   -----------  ----------- 
 Interest receivable and 
  similar income                        8,562        7,200 
 Interest payable and similar 
  charges                             (8,528)      (7,198) 
--------------------------------  -----------  ----------- 
 Gross profit                              34            2 
 Other operating income                    19           53 
 Administrative expenses                 (52)         (53) 
--------------------------------  -----------  ----------- 
 Profit on ordinary activities 
  before taxation                           1            2 
 Taxation                                   -            - 
-------------------------------   -----------  ----------- 
 Profit for the year                        1            2 
--------------------------------  -----------  ----------- 
 

There are no other comprehensive income items other than the result for the year stated above. Accordingly, no statement of other comprehensive income is given.

The above amounts relate exclusively to continuing operations.

STATEMENT OF FINANCIAL POSITION

As at 31 March 2022

 
                                        2022        2021 
                                      GBP000      GBP000 
-------------------------------   ----------  ---------- 
 Non current assets 
 Loans and receivables                     -     149,802 
--------------------------------  ----------  ---------- 
 
 Current assets 
 Loans and receivables               151,236           - 
 Debtors: Amounts falling 
  due within one year                  3,237       3,239 
 Cash at bank                             46          41 
--------------------------------  ----------  ---------- 
                                     154,519       3,280 
 Current liabilities : Amounts 
  falling due within one year      (154,493)     (3,255) 
--------------------------------  ----------  ---------- 
 Net current assets                       26          25 
--------------------------------  ----------  ---------- 
 Total assets less current 
  liabilities                             26     149,827 
 Non current liabilities 
  : Amounts falling due after 
  more than one year                       -   (149,802) 
--------------------------------  ----------  ---------- 
 Net assets                               26          25 
--------------------------------  ----------  ---------- 
 
 Capital and reserves 
 Called up share capital                  13          13 
 Profit and loss account                  13          12 
--------------------------------  ----------  ---------- 
 Shareholders' funds                      26          25 
--------------------------------  ----------  ---------- 
 

STATEMENT OF CHANGES IN EQUITY

For the year ended 31 March 2022

 
                                      Called up   Retained    Total 
                                  Share capital     income 
                                         GBP000     GBP000   GBP000 
 Total equity as at 31 March 
  2020                                       13         10       23 
 Profit for the year                          -          2        2 
------------------------------  ---------------  ---------  ------- 
 Total equity as at 31 March 
  2021                                       13         12       25 
 
 Profit for the year                          -          1        1 
------------------------------  ---------------  ---------  ------- 
 Total equity as at 31 March 
  2022                                       13         13       26 
------------------------------  ---------------  ---------  ------- 
 

STATEMENT OF CASH FLOWS

For the year ended 31 March 2022

 
                                                         Year ended             Year ended 
                                                           31 March                     31 
                                                               2022                  March 
                                                                                      2021 
                                                             GBP000                 GBP000 
 Operating activities 
 Profit on ordinary activities 
  before taxation                                                 1                      2 
 Interest received                                            8,463                  7,106 
 Interest paid                                              (8,431)                (7,106) 
 Net impact of EIR adjustment                                  (32)                      - 
 Increase in debtors                                              2                     16 
 Increase in creditors                                            2                   (13) 
---------------------------------------------  --------------------  --------------------- 
 Cash generated from operating 
  activities                                                      5                      5 
---------------------------------------------  --------------------  --------------------- 
 
 Cash flow from investing 
  activities 
                                                                  -                      - 
 Cash flow from financing 
  activities 
                                                                  -                      - 
 Net increase in cash and cash equivalents                        5                      5 
---------------------------------------------  --------------------  --------------------- 
 
 Cash and cash equivalent at beginning 
  of year                                                        41                     36 
---------------------------------------------  --------------------  --------------------- 
 Cash and cash equivalent at end 
  of year                                                        46                     41 
---------------------------------------------  --------------------  --------------------- 
 

Directors' responsibility statement

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that year.

In preparing these financial statements, the directors are required to:

   --    select suitable accounting policies and then apply them consistently; 
   --    make judgements and accounting estimates that are reasonable and prudent; 

-- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors confirm, to the best of their knowledge:

-- the financial statements have been prepared in accordance with UK Generally Accepted Accounting Practice and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company;

-- the annual report includes a fair review of the development and performance of the business and the financial position of the Company, together with a description of the principal risks and uncertainties that it faces.

- ENDS-

For further information contact:

Law Debenture Corporate Services Limited (Company Secretary) [phone]

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July 26, 2022 09:25 ET (13:25 GMT)