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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Axa Property Trust Limited | LSE:APT | London | Ordinary Share | GG00BHXH0C87 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 31.75 | 31.00 | 32.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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AXA PROPERTY TRUST LIMITED
LEI: 213800AF85VEZMDMF931
(Classified Regulated Information, under DTR 6 Annex 1 section 1.2)
Key Financial Information
As at 31 December 2017
- Sterling currency Net Asset Value ("NAV") was GBP14.9 million (30 June
2017: GBP15.7 million)
- NAV was 63.69 pence per share (30 June 2017: 66.94 pence)
- Share price1 was 57.88 pence per share (30 June 2017: 61.25 pence per
share)
For the six months ended 31 December 2017
- Loss was 4.24 pence per share (31 December 2016: loss was 0.58 pence per
share)
- No dividends or redemptions of shares were paid during the period (31
December 2016: none)
1 Mid market share price (source: Stifel Nicolaus Europe Limited).
Performance Summary
Six months ended Year ended
31 December 2017 30 June
2017 % change
NAV (GBP000s) 14,906 15,665 (4.8)%
NAV per share 63.69p 66.94p (4.8)%
Loss per share (4.24)p (1.92)p (120)%
Share redemptions paid - GBP24.0m n/a
Share price1 57.88p 61.25p (5.5)%
Share price discount to NAV 9.1% 8.5% n/a
Total assets less current 15,171 16,164 (6.1)%
liabilities (GBP000s)2
Total return Six month Six month
period period
31 December 31 December
2017 2016
NAV Total Return3 (4.8)% 2.6%
Share price Total Return
- AXA Property Trust (5.5)% 12.5%
- FTSE All Share Index 6.8% 12.0%
- FTSE Real Estate Investment Trust Index 8.6% 5.4%
Past performance is not a guide to future performance.
1 Mid-market share price (source: Stifel Nicolaus Europe Limited).
2 Includes bank debt classified as a current liability.
3 On a pro-forma basis which includes adjustments to add back any prior NAV
reductions from share redemptions.
Source: AXA Investment Managers UK Limited and Stifel Nicolaus Europe Limited
Chairman's Statement
AXA Property Trust Limited's (the " Company") remaining property holding is a
multiplex cinema near Bergamo in Northern Italy. Its value, fundamentally, lies
in a contracted rent flow of EUR1.5 million p.a payable by UCI Italy Ltd for a
remaining 7 year term, plus the reversionary value at the end of that term. The
independent valuation as at December 2017 was EUR13.2 million but a thorough
marketing campaign over some years has not elicited any sustained interest at
all from buyers. As the Investment Managers report the prospects of an open
market sale are weaker and there is the prospect of a lease renegotiation with
the tenant. The outturn may have an impact on valuation. Any liquidation of the
asset is likely, therefore, to take a considerable time and the Board are
reviewing how the costs of the running the Company can be minimised.
Results
The Company and its subsidiaries (together the "Group") made a total net loss
after tax of GBP1.0 million for the period to 31 December 2017. The Net Asset
Value per share of the Company at 31 December 2017 was 63.69 pence (30 June
2017: 66.94 pence), a 4.8% decrease compared to 30 June 2017.
The mid-market price of the Company's shares on the London Stock Exchange on 31
December 2017 was 57.88 pence, representing a discount of 9.1% to the Company's
NAV at 31 December 2017.
Return of Capital to Shareholders
No return of capital was declared during the period and the dividend policy
remains unchanged.
Charles Hunter
Chairman
21 March 2018
Investment Manager's Report
Investment Manager
AXA Investment Managers UK Limited (the "Investment Manager", "AXA IM") is the
UK subsidiary of AXA Investment Managers, a dedicated asset manager within the
AXA Group. AXA Investment Managers is an innovative and fast-growing
multi-expertise investment manager managing EUR645 billion in assets as at 30
September 2017.
AXA Real Estate Investment Managers UK Limited (the "Real Estate Adviser") is
part of the real estate management arm of AXA Investment Managers S.A. ("AXA IM
Real Assets"). AXA IM Real Assets offers a 360° view of real asset markets,
investing in both equity and debt, across different geographies and sectors,
and via private and listed instruments with more than EUR71 billion of assets
under management and about 650 people operating in 20 countries as at 30 June
2017.
Source: AXA Investment Managers UK Limited
Fund Manager
Ian Chappell was appointed as the Fund Manager for AXA Property Trust in
November 2015. He has very broad experience across Europe's real estate
markets, having worked through several market cycles over the past 25 years and
transacting and managing real estate assets covering core, core plus and value
added strategies.
Ian graduated from Nottingham Trent University in 1991 and also holds a Master
of Arts from the University of Newcastle Upon Tyne (1992). He was elected as
Member of the Royal Institution of Chartered Surveyors in 1993.
Market Outlook
Eurozone GDP growth remained stable at a seasonally adjusted 0.7%
quarter-on-quarter (q-o-q) in Q3 2017, the fastest rate of growth since Q1
2015. Among the major Eurozone economies, Germany and Spain were the strongest
performers, with quarterly GDP growth of 0.8%, followed by France (0.6%) and
Italy (0.4%). Having increased to 2% year-on-year (y-o-y) in February 2017,
harmonised CPI in the Eurozone had moderated to 1.4% by December, largely
because energy price rises decelerated.
While still low by historical standards, long-term government bond yields are
forecast to rise over the next few years, in a continuation of the pattern seen
since the final quarter of 2016.
Italy's GDP growth accelerated from 0.3% q-o-q in Q2 2017 to 0.4% in Q3. Gross
fixed investment made the largest contribution to growth, followed by household
consumption and net trade. Fixed investment accelerated to 3% q-o-q and growth
in household spending accelerated to 0.3% q-o-q, although growth in government
expenditure decelerated to 0.1%. Exports grew by 1.6% q-o-q, while imports rose
by a slower 1.2%. The annual growth rate accelerated to 1.7%, its highest level
since Q1 2011. Having risen to 2% in April 2017, HICP inflation fell back to 1%
in December.
Having surprised on the upside in 2017, AXA IM Research expects the positive
momentum to last into 2018, forecasting GDP growth of 1.6%. They expect
consumer spending growth to be driven by job creation boosting purchasing power
in a low inflation environment; falling unemployment reducing precautionary
savings; and the effects of the improving housing market. Financial conditions
should continue to foster corporate investment, although the outlook remains
fragile, as lending to non-financial corporates is still volatile. However,
government consumption is likely to be very limited, as the country aims to
reduce its deficit. Lack of external competitiveness also prevents Italy from
extensively benefiting from recovering international trade.
With the exception of the reform of the banking sector (which contributed to an
easing of credit and reduced NPLs) and labour market reforms, progress
elsewhere has been rather limited. The fragmented political landscape is not
supportive. In advance of the general election to be held in March 2018, polls
were pointing to a three-way race as at Q4 2017; the right-wing coalition
(Forza Italia, Northern League and Brothers of Italy) ahead with around 35% of
the votes, followed by the Five Star Movement (M5S - c.27%) and the Democratic
Party (PD - c.25%). In combination with the new electoral law adopted in Autumn
2017, there is expected to be a hung parliament (the law is based on one-third
of seats allocated on a first-past-the post system and two-thirds on a
proportional basis). There is a very low chance that an anti-establishment
coalition (M5S, Northern League and Brothers of Italy) will be formed and reach
absolute majority in the Lower House.
Asset Management Update
The sole remaining asset comprises the cinema investment in Curno.
Following several months of pursuing interest with a potential buyer, the
likelihood of a sale is weaker, given that trading prospects at the property
appear to have been impacted by the competing new cinema at Orio del Serio,
also operated by UCI. The tenant has communicated its poor trading results and
would appear to be targeting a renegotiation of the contracted rent to reflect
a lower operating base. Further information will be sought from them to
determine the extent of the operating downturn, whether this is temporary, or a
sign of a longer term correction. Once this is received, an appropriate
strategy will be implemented.
Property Portfolio at 31 December 2017
Investment Country Sector Net Yield on
valuation1
Curno, Bergamo Italy Leisure 11.00%
1 Net yield on valuation is Gross rental income over valuation.
Source: External independent valuers to the Company, Knight Frank LLP.
Weighted Average Lease Term
31 December 2017 7.0 years
30 June 2017 7.5 years
Covenant Strength Analysis at 31 December 2017
Creditreform: <199
Dun & Badstreet: A1
Source: AXA Real Estate Investment Managers UK Limited
Board of Directors
Charles Hunter (Chairman) has over 30 years of experience in property
investment, principally in UK commercial property. He was Head of Property
Investment of Insight Investment (formerly Clerical Medical Investment Group)
for some nine years and before that Property Director of the investment
management subsidiaries of The National Mutual of Australasia group in the
United Kingdom. He is currently a director of Care South and he was on the
Supervisory Board of Schroder Exempt Property Unit Trust until its conversion
to a PAIF in 2012. Mr Hunter is a Fellow of the Royal Institution of Chartered
Surveyors and a member of the Investment Property Forum. He is resident in the
United Kingdom.
Stephane Monier has over 25 years of investment experience (including asset
allocation, fixed income and foreign exchange). Mr Monier is currently Head of
Investments at Bank Lombard Odier & Cie Ltd. He is responsible for the
investment process and the performance for private clients' portfolios. Mr
Monier joined the Lombard Odier group in 2009 on the institutional side
(Lombard Odier Investment Managers or LOIM). He was initially Global Head of
Fixed Income and Currencies for LOIM and then promoted to Deputy Global Chief
Investment Officer. Prior to joining LOIM, Mr Monier was Global Head of Fixed
Income and Currencies at Fortis Investments from 2006 to 2009 and he also
occupied the very same position at the Abu Dhabi Investment Authority from 1998
to 2006. Prior to Abu Dhabi, Mr Monier spent seven years in JP Morgan
Investment Management as a Fixed Income Manager both in London and Paris from
1991 to 1998. Mr Monier has a Masters Degree in Science from Agrotech (Paris)
and a Masters Degree in International Finance from HEC Graduate School of
Business (Jouy en Josas) (France). He is also a CFA charterholder. He is
resident in Valais, Switzerland.
Gavin Farrell is qualified as a Solicitor of the Supreme Court of England and
Wales, a French Avocat and an Advocate of the Royal Court of Guernsey. He
worked for a number of years at Simmons & Simmons in their London and Paris
offices, both in the general corporate and financial services/funds
departments. He then moved to Guernsey in 1999 where he was called as an
Advocate of the Royal Court of Guernsey. Gavin became a partner in 2003 of the
corporate department of Ozannes, then Mourant Ozannes. Gavin left Mourant
Ozannes in November 2016 to establish his own practice Ferbrache & Farrell. His
practice covers general corporate and banking work, funds and the asset
management industry. Gavin holds a number of directorships in investment and
captive insurance companies. He is a resident of Guernsey and has been ranked
as a leading individual in banking, corporate and investment funds by a number
of publications as well as having been elected for a number of years as a Top
Five Global Offshore Funds Lawyers in Who's Who Private Funds.
Stuart Lawson is a Fellow of the Chartered Association of Certified
Accountants. He joined Northern Trust in 1988 working in Fund Administration
and Trust client accounting before being appointed Head of Finance for the
office in 1996 where he established a Risk Management Department. In 2005 he
was appointed Chief Administration Officer for Guernsey with local
responsibility for finance, risk, compliance, corporate services and
communication, and in 2007 he assumed responsibility for Real Estate and
Infrastructure Fund Administration services for the EMEA region. He is
currently a product manager for alternative asset services across the EMEA
region, is a Director of a number of client entities and Chairman of Northern
Trust (Guernsey) Limited. He has 30 years of experience in the Financial
Services Industry and is resident in Guernsey.
Directors' Responsibility Statement
We confirm that to the best of our knowledge:
- the Condensed Half Year Consolidated Financial Statements have been
prepared in accordance with International Accounting Standard 34 Interim
Financial Reporting; and
- this Half Year Report provides a fair review of the information required
by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication
of important events that have occurred during the first six months of the
financial year and their impact on the Condensed Half Year Consolidated
Financial Statements; and a description of the principal risks and
uncertainties for the remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could materially
affect the financial position or performance of the entity.
Signed on behalf of the Board by:
Charles Hunter
Chairman
21 March 2018
Stuart Lawson
Director
21 March 2018
Condensed Half Year Consolidated Income Statement
For the six months ended 31 December 2017 (unaudited)
Six month Six month
period ended period ended
31 December 31 December
2017 2016
Notes GBP000s GBP000s
Gross rental income 3 663 1,397
Service charge income - 142
Property operating expenses (169) (153)
Net rental and related income 494 1,386
Valuation loss on investment properties 6 (710) (677)
Loss on disposals of a subsidiary and - (646)
investment properties
General and administrative expenses 4 (315) (406)
Operating loss (531) (343)
Net foreign exchange gain - 285
Net gain on financial instruments 12 - 63
Share in (loss)/profit of a joint 8 (1) 50
venture
Net finance cost (11) (186)
Loss before tax (543) (131)
Income tax expense (449) (204)
Loss for the period (992) (335)
Basic and diluted loss per ordinary share (4.24) (0.58)
(pence)
Condensed Half Year Consolidated Statement of Comprehensive Income
For the six months ended 31 December 2017 (unaudited)
Six month Six month
period ended period ended
31 December 31 December
2017 2016
GBP000s GBP000s
Loss for the period (992) (335)
Other comprehensive income
Hedging reserve recycled to profit or loss - -
Foreign exchange translation gain 232 1,330
Total items that are or may be 232 1,330
reclassified to profit or loss
Total comprehensive (loss)/profit for the (760) 995
period
Condensed Half Year Consolidated Statement of Changes in Equity
For the six months ended 31 December 2017 (unaudited)
Foreign
Revenue Distributable currency
reserve reserve reserve Total
GBP000s GBP000s GBP000s GBP000s
Balance at 1 July 2017 (41,411) 44,853 12,223 15,665
Loss for the period (992) - - (992)
Other comprehensive income - - 232 232
Balance at 31 December 2017 (42,403) 44,853 12,455 14,905
For the six months ended 31 December 2016 (unaudited)
Foreign
Revenue Distributable currency
reserve reserve reserve Total
GBP000s GBP000s GBP000s GBP000s
Balance at 1 July 2016 (40,489) 68,856 10,327 38,694
Loss for the period (335) - - (335)
Other comprehensive income - - 1,330 1,330
Balance at 31 December (40,824) 68,856 11,657 39,689
2016
Condensed Half Year Consolidated Statement of Financial Position
As at 31 December 2017 (unaudited)
31 December 30 June
2017 2017
Notes GBP000s GBP000s
Non-current assets
Investment properties 6 11,782 12,310
Current assets
Cash and cash equivalents 3,033 3,846
Trade and other receivables 9 368 788
Investment in joint venture held for sale 8 649 642
Total assets 15,832 17,586
Current liabilities
Trade and other payables 10 662 1,422
Non-current liabilities
Provisions 11 265 499
Total liabilities 927 1,921
Net assets 14,905 15,665
Reserves 14,905 15,665
Total equity 14,905 15,665
Number of ordinary shares 23,402,881 23,402,881
Net asset value per ordinary share (pence) 63.69 66.94
By order of the Board
Charles Hunter
Chairman
21 March 2018
Stuart Lawson
21 March 2018
Director
Condensed Half Year Consolidated Statement of Cash Flow
For the six months ended 31 December 2017 (unaudited)
Six month Six month
period ended period ended
31 December 31 December
2017 2016
Notes GBP000s GBP000s
Operating activities
Loss before tax (543) (131)
Adjustments for:
Loss on valuation and disposals of a 6 710 1,323
subsidiary and investment properties
Shares in loss/(profit) of 8 1 (50)
joint-venture
Gain on financial instruments 12 - (63)
Decrease/(increase) in trade and other 9 615 (273)
receivables
Decrease in provisions 11 (234) (367)
(Increase)/decrease in trade and other 10 (477) 3,584
payables
Net finance cost 11 186
Net foreign exchange gain - (285)
Net cash generated from operations 83 3,924
Interest income received - 97
Interest paid (10) (382)
Tax paid (927) (1,256)
Net cash (outflow)/inflow from operating (854) 2,383
activities
Investing activities
Investment in joint-ventures - 8,383
Proceeds from disposals of a subsidiary - 7,450
and investment properties
Net cash inflow from investing activities - 15,833
Financing activities
Bank loan facility repaid - (14,907)
Net cash used in financing activities - (14,907)
Effects of exchange rate fluctuations 41 (2,154)
(Decrease)/increase in cash and cash equivalents (813) 1,155
Cash and cash equivalents at start of 3,846 8,806
the period
Cash and cash equivalents at the period end 3,033 9,961
The accompanying notes form an integral part of these condensed Half Year
Financial Statements.
Notes to the Condensed Half Year Consolidated Financial Statements
For the period ended 31 December 2017
1. Operations
AXA Property Trust Limited (the "Company") is a limited liability, closed-ended
investment company incorporated in Guernsey. The Company invests in commercial
properties in Europe which are held through its subsidiaries. The Condensed
Half Year Consolidated Financial Statements of the Company for six month ended
31 December 2017 comprise the financial statements of the Company and its
subsidiaries (together referred to as the "Group").
2. Significant accounting policies
(a) Statement of compliance
The Condensed Half Year Consolidated Financial Statements have been prepared in
accordance with the Disclosure Transparency Rules of the Financial Conduct
Authority and with IAS 34, 'Interim Financial Reporting'. They do not include
all the information required for the full annual financial statements and
should be read in conjunction with the consolidated financial statements of the
Group for the year ended 30 June 2017, which were prepared under full
International Financial Reporting Standard ("IFRS") requirements as issued by
the International Accounting Standards Board.
(b) Basis of preparation
The same accounting policies and methods of computation have been applied to
the Condensed Half Year Consolidated Financial Statements as in the Annual
Report and Consolidated Financial Statements for the year ended 30 June 2017
expect for following captions:
- Trade and other receivables
- Trade and other payables
for which VAT and taxes payables and receivables have been netted off both in
Balance Sheet and corresponding notes for December 2017 figures and
comparatives figures.
The presentation of the condensed Half Year Consolidated Financial Statements
is consistent with the Annual Report and Consolidated Financial Statements.
(c) Going concern
The discount control provisions established when the Company was launched
required a continuation vote to be proposed to Shareholders at the Company's
Annual General Meeting in 2015. As a result of the large discount to Net Asset
Value at which shares were trading there was little chance of raising new
capital. After extensive shareholder consultation, the Board resolved not to
seek continuation of the Company in 2015 and proposed to Shareholders that the
Company enter into a managed wind-down. This proposal was approved at an EGM
held on 26 April 2013.
The Condensed Half Year Consolidated Financial Statements have been prepared on
a non-going concern basis reflecting the orderly wind-down of the Group.
Accordingly, the going concern basis of accounting is not considered
appropriate. All assets and liabilities continue to be measured in accordance
with IFRS. The Board recognises that the timely disposal of properties is
uncertain and continues to keep under review the most appropriate course of
action with regard to these assets over the coming months with the aim of
maximising shareholder return. As at 31 December 2017, the completion of all
sales is foreseen in the course of 2018.
The Directors estimate that the wind-down costs will be approximately GBP164,637
(30 June 2017: GBP189,000). The Board believes that the Group has sufficient
funds available to meet its wind-down costs and day-to-day running costs.
3. Gross rental income
Gross rental income for the six months ended 31 December 2017 amounted to GBP0.7
million (31 December 2016: GBP1.40 million). The Group leases out all of its
investment property under operating leases and are usually structured in
accordance with local practices in Italy. All leases benefit from indexation.
Minimum Lease Payments (based on leases in place as at 31 December 2017)
Rental income Rental income
31 December 2017 30 June 2017
GBP000s GBP000s
0-1 year 1,277 1,277
1-5 years 6,383 6,385
5+ years 1,245 1,892
4. General and administrative expenses
Six month Six month
period ended period ended
31 December 31 December
2017 2016
GBP000s GBP000s
Administration fees (89) (99)
General expenses (93) (146)
Audit fees (82) (89)
Legal and professional fees (10) (145)
Director's fees (35) (41)
Insurance fees (30) (30)
Liquidation costs 24 2
Sponsor's fees (13) (13)
Investment management fees* (197) (57)
Performance fee 210 212
Total (315) (406)
*Investment management fees for the period ended 31 December 2017 include GBP107k
adjustments related to previous years.
5. Share capital redemptions
No share redemption took place during the period.
6. Investment properties
31 December 30 June 2017
2017
GBP000s GBP000s
Fair value of investment properties at beginning of 12,310 37,023
the period/year
Opening fair value of assets sold during the year - (24,724)
Fair value adjustments (710) (781)
Foreign exchange translation 182 792
Fair value of investment properties at the end of 11,782 12,310
the period/year
Total investment properties 11,782 12,310
All investment properties are carried at fair value.
In accordance with IFRS accounting standards, the valuation attributed to the
property in Curno is before any allowance or deduction of capital gains tax due
on sale. The extent of these taxes will depend upon whether the asset is sold
directly, in which case full capital gains tax on the chargeable gain is due,
or within the existing corporate structure, in which case the extent of the net
price adjustment will depend upon commercial negotiations between the Company
and the buyer. In either case it is expected the impact will be a reduction in
net proceeds.
7. Investment properties held for sale
As at 31 December 2017, there is no investment property classified as held for
sale (30 June 2017: none).
8. Investment in Joint ventures held for sale
The Group holds a 50% joint venture interest in the equity of the Italian joint
venture Property Trust Agnadello S.r.l. which was holding a logistics warehouse
in Agnadello, Italy. On 15 November 2016, Property Trust Agnadello S.r.l.
completed the sale of its asset for a total sale price of GBP23.2 million.
The Group's interest in Property Trust Agnadello S.r.l. is accounted for using
the equity method in the consolidated financial statements, which approximates
the lower of its carrying amount and its fair value less cost to sell.
The following table summarises the financial information of Property Trust
Agnadello S.r.l. which also reconciles the summarised financial information to
the carrying amount of the Group's interest in the joint venture:
Summarised Consolidated Statement of Financial 31 December 30 June 2017
Position 2017
GBP000s GBP000s
Current assets 1,343 1,322
Current liabilities (45) (38)
Net assets (100%) 1,298 1,284
Group's share of net assets (in percent) 50% 50%
Group's share of net assets 649 642
Loan balances due to joint-venture partners - -
Carrying amount of interest in joint-venture 649 642
Summarised Consolidated Income Statement Six month Six month
period ended period ended
31 December 31 December
2017 2016
GBP000s GBP000s
Net rental and related income - 633
Valuation loss on investment property - (506)
Total administrative and other expenses (2) (184)
Other income - 234
Financial expenses - (192)
Loss before tax (2) (15)
Income tax gain - 115
(Loss)/profit for the period (2) 100
Group's share of (loss)/profit for the period (1) 50
Summarised Consolidated Statement of Comprehensive
Income Six month Six month
period ended period ended
31 December 31 December
2017 2016
GBP000s GBP000s
(Loss)/profit for the period (2) 100
Total comprehensive (loss)/income for the period (2) 100
Group's share of comprehensive (loss)/income for the (1) 50
period
9. Trade and other receivables
31 December 2017 30 June 2017
GBP000s GBP000s
Other receivables 2 681
Management fee receivable 84 -
VAT receivable 104 59
Rent receivable 11 14
Prepayments 167 34
Total 368 788
The carrying values of trade and other receivables are considered to be
approximately equal to their fair value. Rent receivable is non-interest
bearing and typically due within 30 days.
The comparative trade and other receivables have been amended as the tax has
been netted with note 10 trade and other payables.
10. Trade and other payables
31 December 2017 30 June 2017
GBP000s GBP000s
Investment manager's fee accrued 66 111
Tax payable (income, transfer, capital 198 632
and other)
Interest payable on loan facility - 13
Legal and professional fees accrued 19 29
Audit fee accrued 96 221
Rent prepaid 1 3
Other payables 282 413
Total 662 1,422
The carrying values of trade and other payables are considered to be
approximately equal to their fair value. Trade and other payables are
non-interest bearing and are normally settled on 30-day terms.
The comparative trade and other payables have been amended as the tax has been
netted with note 9 trade and other receivables.
.
11. Provisions
31 December 2017 30 June 2017
GBP000s GBP000s
Provision for performance fees 100 310
Provision for wind-down costs 165 189
Total 265 499
12. Financial risk management
The table below summarises the amounts recognised in the Consolidated Income
Statement in relation to derivative financial instruments.
Six month Six month
period ended period ended
31 December 2017 31 December 2016
GBP000s GBP000s
Current year fair value movement of ineffective - 63
hedges
Total gain recognised in the Consolidated Income - 63
Statement
The Group is exposed to various types of risk that are associated with
financial instruments. The Group's financial instruments comprise cash,
receivables and payables that arise directly from its operations. The carrying
value of financial assets and liabilities approximate the fair value.
The main risks arising from the Group's financial instruments are market risk,
credit risk, liquidity risk and currency risk. The Board review and agree
policies for managing its risk exposure. These policies are summarised below.
Market Price Risk
Property and property related assets are inherently difficult to value due to
the individual nature of each property. As a result, valuations are subject to
uncertainty. There is no assurance that the estimates resulting from the
valuation process will reflect the actual sales price even where a sale occurs
shortly after the valuation date. Rental income and the market value for
properties are generally affected by overall conditions in the local economy,
such as growth in Gross Domestic Product ("GDP"), employment trends, inflation
and changes in interest rates. Changes in GDP may also impact employment
levels, which in turn may impact the demand for premises. Furthermore,
movements in interest rates may affect the cost of financing for real estate
companies.
Both rental income and property values may be affected by other factors
specific to the real estate market, such as competition from other property
owners, the perceptions of prospective tenants of the attractiveness,
convenience and safety of properties, the inability to collect rents because of
the bankruptcy or the insolvency of tenants, the periodic need to renovate,
repair and release space and the costs thereof, the costs of maintenance and
insurance, and increased operating costs. The Investment Manager addresses
market risk through a selective investment process, credit evaluations of
tenants, ongoing monitoring of tenants and through effective management of the
properties.
Credit risk
Credit risk refers to the risk that counterparty will default on its
contractual obligations resulting in financial loss to the Group. The Group
has adopted a policy of only dealing with creditworthy counterparties and
obtaining sufficient collateral where appropriate as a means of mitigating the
risk of financial loss from defaults. The Group's and Company's exposure and
the credit-ratings of its counterparties are continuously monitored and the
aggregate value of transactions concluded is spread amongst approved
counterparties.
The credit risk on liquid funds is limited because the counterparties are banks
with high credit-ratings assigned by international credit-ratings agencies.
Cash and cash equivalents and trade and other receivables presented in the
Consolidated Statement of Financial Position are subject to credit risk with
maturities within one year.
Liquidity risk
Liquidity risk is the risk that the Company will encounter in realising assets
or otherwise raising funds to meet financial commitments in a reasonable
timeframe or at a reasonable price.
The Group invests the majority of its assets in investment properties which are
relatively illiquid, however, the Group has mitigated this risk by investing in
desirable properties in strong locations. The Group prepares forecasts in
advance which enables the Group's operating cash flow requirements to be
anticipated and ensures that sufficient liquidity is available to meet
foreseeable needs and to invest any surplus cash assets safely and profitably.
The Group also monitors the cash position in all subsidiaries to ensure that
any working capital needs are addressed as early as possible.
The Company has continued to suspend the payment of dividends to prudently
manage cash during the wind-down phase.
Foreign currency risk
The European subsidiaries will invest in properties using currencies other than
Sterling, the Company's functional and presentational currency, and the
Consolidated Statement of Financial Position may be significantly affected by
movements in the exchange rates of such currencies against Sterling. The Group
reviews and manage currency exposure in accordance with its hedging strategy.
13. Related party transactions
The Directors are responsible for the determination of the Company's investment
objective and policy and have overall responsibility for the Group's activities
including the review of investment activity and performance.
Mr Hunter, Chairman of the Company is also Director of the Company's
subsidiaries, Property Trust Luxembourg 1 S.à r.l., Property Trust Luxembourg 2
S.à r.l. and Property Trust Luxembourg 3 S.à r.l. and is able to control the
investment policy of the Luxembourg subsidiaries to ensure it conforms with the
investment policy of the Company.
Mr Lawson, a Director of the Company is also a product manager for alternative
asset service across EMEA region and Chairman of Northern Trust (Guernsey)
Limited, the Company's bankers and member of the same group as the
Administrator and Secretary. The total charge to the Consolidated Income
Statement from June to December 2017 in respect of Northern Trust
administration fees was GBP72,500 (31 December 2016: GBP72,500) of which nil
(31 December 2016: nil) remained payable at the year end.
Under the Investment Management Agreement, fees are payable to the Investment
Manager, Real Estate Adviser and other entities within the AXA Group. These
entities are involved in the planning and direction of the Company and Group,
as well as controlling aspects of their day to day activity, subject to the
overall supervision of the Directors. During the period, fees of GBP0.2 million
(31 December 2016: GBP0.02 million) were expensed to the Consolidated Income
Statement. During the six months period, the provision for performance fees was
reversed byGBP 0.2 million. The amount had been provided under the terms of the
Investment Management Agreement.
All the above transactions were undertaken at arm's-length.
14. Commitments
As at 31 December 2017, the Company has no commitment.
15. Subsequent events
No material subsequent events to report.
Corporate Information
Directors (All non-executive)
C. J. Hunter (Chairman)
G. J. Farrell
S. C. Monier
S. J. Lawson
Registered Office
PO Box 255
Trafalgar Court
Les Banques
St Peter Port
Guernsey GY1 3QL
Channel Islands
Investment Manager
AXA Investment Managers UK Limited
7 Newgate Street
London EC1A 7NX
United Kingdom
Real Estate Adviser
AXA Real Estate Investment Managers UK Limited
155 Bishopsgate
London EC2M 3XJ
United Kingdom
Sponsor and Broker
Stifel Nicolaus Europe Limited
150 Cheapside
London EC2V 6ET
United Kingdom
Administrator and Secretary
Northern Trust International Fund
Administration Services (Guernsey) Limited
PO Box 255
Trafalgar Court
Les Banques
St Peter Port
Guernsey GY1 3QL
Channel Islands
Registrar
Computershare Investor Services (Guernsey) Limited
1st Floor
Tudor House
Le Bordage
St Peter Port
Guernsey GY1 1DB
Channel Islands
Independent Auditor
KPMG Channel Islands Limited
Glategny Court, Glategny Esplanade
St Peter Port
Guernsey GY1 1WR
Channel Islands
END
(END) Dow Jones Newswires
March 22, 2018 03:00 ET (07:00 GMT)
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