We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register to chat with like-minded investors on our interactive forums.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Civitas Social Housing Plc | LSE:CSH | London | Ordinary Share | GB00BD8HBD32 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 79.80 | 79.70 | 80.20 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMCSH
RNS Number : 0404R
Civitas Social Housing PLC
12 June 2018
12 June 2018
Civitas Social Housing PLC
("Civitas" or the "Company")
Annual Results
Period from 18 November 2016 to 31 March 2018
Civitas Social housing PLC (Lon: CSH), the first London listed Real Estate Investment Trust ("REIT") dedicated to investing into regulated social housing in England and Wales, is pleased to announce its results for the period since IPO in 18 November 2016 to 31 March 2018.
The full annual report and financial statements can be accessed via the Company's website at www.civitassocialhousing.com or by contacting the Company Secretary by telephone on 01392 477500.
Financial Highlights
Hot Features
Premium
31 March 2018
---------------------------------- -----------------
Profit before tax GBP36.9 million
Earnings per share 10.6p
IFRS NAV GBP369.4 million
IFRS NAV per share 105.5p
IFRS NAV increase since IPO 7.7%
Portfolio NAV GBP398.5 million
Portfolio NAV per share 113.9p
Portfolio NAV increase since IPO 16.2%
IFRS property valuation GBP516.6 million
Annualised rent roll GBP28.4 million
Ordinary share equity raised GBP350 million
C share capital raised GBP302 million
Dividends declared 3p per share
Total shareholder return 10.7%
Operational Highlights
-- 414 properties acquired in the period, across 109 Local Authorities, based on long-term leases signed with 11 Housing Associations, providing dependable accommodation for 2,621 tenants supported by 64 care providers
-- Independent Social Impact Report noted encouraging evidence that Civitas can deliver on its social objective: increasing the provision of high quality social homes, improving the quality of life for low income and vulnerable people in social need while achieving financial returns for investors
Funding
-- Scottish Widows GBP52.5 million loan note with an agreed term of ten years with an all-in fixed rate of 2.99% Lloyds GBP40 million three year floating rate revolving credit facility
-- Oversubscribed GBP350 million IPO with proceeds fully invested by December 2017 -- Total bank borrowings of GBP92.5 million equating to 12% of gross assets -- GBP302m of capital raised through a C share issue in November 2017
Post Balance Sheet Highlights
-- 19 properties acquired post the period end, totalling GBP30.5 million -- Lloyds RCF extended by a further GBP20 million -- Transfer of all First Priority leases to Falcon
Michael Wrobel, Chairman of Civitas, commented:
"Civitas has made a strong start. It has succeeded in assembling a market leading portfolio of high quality social housing, providing long-term stable, affordable accommodation for some of the most vulnerable in society.
It has successfully deployed the proceeds of the IPO and is making good progress in deploying the C share proceeds. The Investment Adviser has identified a further pipeline of opportunities and is engaged presently in conducting detailed due diligence on those that are near term and evaluating further those for purchase later in 2018 and beyond. As part of this work, the Investment Adviser continues to build relationships with potential vendors, particularly care providers who today form a growing element of the pipeline overall in addition to housing associations and other private vendors.
The objective remains to acquire high-quality properties off-market and to seek to ensure that Civitas benefits from the widest possible choice and range of potential properties that offer diversity of underlying tenants and mid to upper level care acuity.
There remains a significant unmet need for high quality accommodation, which is underpinned by legislation and growing demand. We look forward to the future with confidence."
For further information, please contact:
Civitas Housing Advisors Limited Paul Bridge Tel: +44 (0)20 3058 4844 Andrew Dawber Tel: +44 (0)20 3058 4846 Cenkos Securities PLC Sapna Shah Tel: +44 (0)20 7397 1922 Tom Scrivens Tel: +44 (0)20 7397 1915 Pagefield Philip Dennis Tel: +44 (0)7947 868206 David Leslie Tel: +44 (0)7584 070274
Notes:
Civitas Social Housing PLC is the first Real Estate Investment Trust offering pure play exposure to social housing in England and Wales. The Company is managed by Civitas Housing Advisors Limited. The Company's ordinary shares are listed on the premium listing segment of the Official List of the Financial Conduct Authority and were admitted to trading on the main market for listed securities of the London Stock Exchange in November 2016.
Chairman's Statement
Introduction
I am pleased to provide the Company's first shareholder report, including the audited consolidated financial statements for the period from its listing on 18 November 2016 to 31 March 2018.
The Company has succeeded in assembling a market leading portfolio of top quality social housing, focused on properties that are specially adapted to enable the provision of care in the community. The leases are with Housing Associations, which in turn are funded by Local Authorities. The leases are long-term, usually 25 years and rents linked to inflation. This investment strategy provides shareholders with an attractive level of income and a measure of inflation protection, together with the potential for capital growth. Our Company also has a significant positive social impact.
The Company launched via an oversubscribed Initial Public Offering ("IPO"), with gross proceeds of GBP350 million in November 2016, followed by a further capital raise in the form of a C share issuance in November 2017 of GBP302 million. Being the first REIT to be listed on the London Stock Exchange that offers a focused exposure to built social housing, the Company has been able to establish a substantial network of relationships and partners that provide the Company with opportunities to acquire suitable properties off market.
As at 31 March 2018, the Company's portfolio was valued at GBP516.6 million on an IFRS basis, consisting of 414 properties housing 2,621 tenants, leased to 11 Registered Providers, involving 109 Local Authorities and 64 care providers with a focus on Specialist supported housing. The Company enhances existing properties to its exacting standards, or works with its development partners to bring new properties into the sector, while never exposing our shareholders to development risk.
Deployment
As a reflection of the significant demand for specialist social housing and the strength of the Company's network, the net proceeds of the IPO and most of the planned associated debt were fully deployed by December 2017. In light of the pipeline of further potential transactions, an additional GBP302 million of capital was raised by way of a C share issue in November 2017. The Company has made good progress in deploying the funds from the C share issue acquiring refurbished, repositioned or new Specialist supported housing. As at 31 March 2018, an overall total of GBP471.6 million (total transactions completed and exchanged, before purchase costs) has been deployed into high quality Specialist supported housing.
The majority of the acquisitions made by the Company have been through relationships fostered over many years by the team at our Investment adviser, Civitas Housing Advisors, as well as more recent introductions. The Company has benefitted from acquiring many properties off-market in large part due to the strong reputation of the Company in the market. Hence, acquisition prices achieved have been very competitive, resulting in capital appreciation of GBP30.6 million in this first reporting period.
Dividends
On 4 May 2017, the Company declared its maiden interim dividend of 0.75p per Ordinary share, followed by a further three quarterly dividends of 0.75p, as outlined in the launch Prospectus on IPO. Since the period end a further dividend of 1.25p per Ordinary share has been declared for the period to 31 March 2018, the increase matching the Company's original intention to target a 5p dividend for the calendar year to 31 December 2018. The Company's C shares are due to pay a 3% cumulative dividend up to the point of conversion to Ordinary shares. A first dividend for the C shares of 1.13p was declared on 10 May 2018.
Financial performance
Rental income of GBP18.6 million was generated in the period, with acquisitions made steadily during that time, at the period end the rent roll stood at GBP28.4 million. Total comprehensive income for the period was GBP36.9 million reflecting earnings per share for the period of 10.6p.
As at 31 March 2018, the IFRS net asset value of the Company was 105.5p representing an increase of 7.7% since the IPO price of 98p per Ordinary share, giving a total return of 10.7% (including dividends paid of 3p per share in the period).
C share Issue
As a result of the Company's success in delivering its original objectives, the Company received strong demand for new C shares in November 2017, raising GBP302 million of new capital, of which GBP72.4 million has been deployed in the first 4 months.
Loan financing
On 3 November 2017, the Company agreed a GBP52.5 million term loan facility with Scottish Widows Limited, with a term of 10 years, and an interest rate of 2.99%.
On 16 November 2017, the Company further agreed a GBP40 million revolving credit facility with Lloyds Bank plc, available for a term of three years, at a floating rate above 3-month LIBOR. Following the period end the revolving credit facility was extended by a further GBP20 million on the same terms as the original facility, to help fund the Company's pipeline alongside the C share proceeds.
The Company will continue to consider additional financing as and when it is necessary to facilitate the momentum of deployment, and the Board deems the terms of the facilities fair and reasonable.
As stated at the outset, the Company expects to put in place an average gearing of approximately 30% of the Company's gross asset value. At the period end the Company had gearing of 12% of gross assets, excluding the C share liability.
Outlook
There remains a chronic shortage of all forms of social housing in the UK, including Specialist supported housing. The Company will look to continue to build on the successful deployment to date and further enhance the portfolio. The Investment Adviser has identified a pipeline of social homes that may be acquired by the Company over the next 12 months, of which approximately GBP100 million is expected to be available in the near term. The Investment Adviser will continue to implement a disciplined policy focused on quality opportunities, whilst rejecting others on the grounds of quality, location and value for money in addition to a number of other factors.
The Board is grateful for the support and encouragement of the Company's shareholders and the hard work of the team at our Investment Adviser and our other advisers. We look forward to long and successful relationships with our various counter parties and making a positive contribution to the social housing sector.
Michael Wrobel
Chairman
11 June 2018
Analysis of property portfolio
As at 31 March 2018 the Company's Portfolio is spread across England and Wales, reflecting the Company's objective of creating a coherent yet diversified portfolio.
KEY REGION COUNTY PROPERTIES TENANCIES
1 North East Durham 58 365
-------------- ---------------- ---------- ---------
2 York & Humber South Yorkshire 11 81
-------------- ---------------- ---------- ---------
3 York & Humber West Yorkshire 8 118
-------------- ---------------- ---------- ---------
4 North West Cheshire 1 13
-------------- ---------------- ---------- ---------
5 North West Lancashire 26 85
-------------- ---------------- ---------- ---------
6 North West Merseyside 26 183
-------------- ---------------- ---------- ---------
7 East Midlands Derbyshire 3 10
-------------- ---------------- ---------- ---------
8 East Midlands Leicestershire 17 106
-------------- ---------------- ---------- ---------
9 East Midlands Lincolnshire 4 39
-------------- ---------------- ---------- ---------
10 East Midlands Northamptonshire 4 13
-------------- ---------------- ---------- ---------
11 East Midlands Nottinghamshire 12 97
-------------- ---------------- ---------- ---------
12 West Midlands Staffordshire 11 71
-------------- ---------------- ---------- ---------
13 West Midlands Warwickshire 10 38
-------------- ---------------- ---------- ---------
14 West Midlands West Midlands 43 121
-------------- ---------------- ---------- ---------
15 West Midlands Worcestershire 10 44
-------------- ---------------- ---------- ---------
16 East Bedfordshire 2 25
-------------- ---------------- ---------- ---------
17 East Cambridgeshire 9 25
-------------- ---------------- ---------- ---------
18 East Essex 2 8
-------------- ---------------- ---------- ---------
19 East Hertfordshire 1 13
-------------- ---------------- ---------- ---------
20 Greater London Greater London 24 326
-------------- ---------------- ---------- ---------
21 South East Berkshire 4 29
-------------- ---------------- ---------- ---------
22 South East Buckinghamshire 1 1
-------------- ---------------- ---------- ---------
23 South East East Sussex 2 8
-------------- ---------------- ---------- ---------
24 South East Hampshire 12 66
-------------- ---------------- ---------- ---------
25 South East Kent 8 90
-------------- ---------------- ---------- ---------
26 South East Oxfordshire 4 19
-------------- ---------------- ---------- ---------
27 South East Surrey 8 53
-------------- ---------------- ---------- ---------
28 South West Cornwall 14 110
-------------- ---------------- ---------- ---------
29 South West Devon 5 19
-------------- ---------------- ---------- ---------
30 South West Dorset 37 250
-------------- ---------------- ---------- ---------
31 South West Gloucestershire 27 126
-------------- ---------------- ---------- ---------
32 South West Somerset 5 41
-------------- ---------------- ---------- ---------
33 South West Wiltshire 1 3
-------------- ---------------- ---------- ---------
34 Wales Gwent 2 10
-------------- ---------------- ---------- ---------
35 Wales West Glamorgan 2 15
=== ============== ================ ========== =========
Total 414 2,621
---------- ---------
Investment Adviser's report
Civitas Housing Advisors Limited ("CHA"), the Investment Adviser to the Company, is pleased to report on the first period of operation for the Company for the period from IPO in November 2016 to 31 March 2018.
Market update
The need for increased levels of housing of all types and tenures continues to be a prominent issue for all political parties. The government has recently set a new target to provide 300,000 new homes each year and is investigating various initiatives to achieve this, with current supply being well behind this target.
The current shortfall in housing provision is felt acutely within the specialist areas of care, with the result that good quality properties that are established to provide healthcare in the community are today in significant and growing demand and likely to remain so for many years to come.
Against this background the market to acquire Specialist supported housing remains robust with a range of both private and public buyers seeking to purchase properties and with an element of upward pressure on pricing as a result. Despite this, the Company utilises its relationships, existing agreements and buying power to acquire good quality properties at competitive prices that remain within the yield range set out at the time of IPO in 2016.
In addition, properties and counterparties continue to be turned-down (in excess of GBP300 million declined since IPO) as a result of the due diligence and acquisition requirements set by the Company. The issues identified earlier in the year by First Priority Housing Association have emphasised further the importance of ensuring that counterparty, transaction and lease structures are robust and sustainable.
The Company itself continues to enhance its own due diligence procedures with the development of its best practice investment Protocol including procedures to further secure rental income and deposits resting with housing association partners.
On 9 May 2018 the Company announced that all leases held with First Priority had been successfully assigned to Falcon Housing Association.
Investment strategy
The Company's aim is to improve the standard and availability of Specialist supported housing, while providing value for money to the public purse.
In many instances the alternative accommodation available to individuals in need of Specialist supported housing is an NHS institution or care home. Despite the efforts of staff, placement in an NHS institution or care home may not, however, provide the most optimal outcome for the individual, reducing their wellbeing at the same time as carrying a significant cost.
During the period the Company has assembled a high quality portfolio of 414 properties, roughly half of these properties were existing residential properties that have been modified and enhanced to enable long term care to be provided within the community. The other half of the portfolio represents properties that have been repurposed from an alternative use such as offices, or newly built properties designed to provide long term care.
Key to the establishment of the Company's portfolio are the strong relationships it has built in the sector, for example working with a number of specialised healthcare partners to obtain high quality properties at competitive prices. In instances where new properties are developed or converted the Company will commit to acquire the property once completed, subject to all necessary standards being met. By contracting to acquire a property once complete the developer is the only party exposed to the development or forward funding risk and the Company has an income generating property from day one.
As the first REIT to be listed on the London Stock Exchange to offer a focused exposure to social housing in England and Wales the Company has benefitted from a first mover advantage. The Company has built on this advantage to establish the pre-eminent position and a strong reputation in the market. The Company's position, its partnerships and the experience and networks of the Investment Adviser team have resulted in incoming investment opportunities and enabled the Company to acquire materially all properties off-market to date, delivering capital appreciation from day one. During the period GBP471.6 million of property was acquired, with revaluation gains of GBP30.6 million realised.
Earlier in the year one of the Company's tenants First Priority Housing Association reported itself to the Regulator, stating cash flow concerns. In the interests of ensuring stability for the Company's tenants discussions took place with several alternative Housing Associations to assign the Company's properties then leased to First Priority. On 9 May 2018 the Company announced that all leases held with First Priority had been successfully assigned to Falcon Housing Association without any loss of future rent, demonstrating the quality of the portfolio and the due diligence undertaken by the Company. At the same time this experience emphasised further the importance of ensuring that counterparty, transaction and lease structures are robust and sustainable and this has led to various enhancements to the due diligence process. Properties and counterparties continue to be turned-down as a result of the due diligence and acquisition requirements set by the Company.
During this period we have acquired 414 properties, leased to 11 Registered Providers and housing 2,621 tenants across 109 Local Authorities, with care support provided by 64 care providers, fully deploying the GBP350 million equity raised at IPO, the GBP92.5 million of debt subsequently drawn, and GBP72.4 million of the GBP302 million of C share capital raised in November 2017.
At the time of IPO the Company stated that it would invest at least 75% in Specialist supported housing, at the date of this report almost the entire portfolio is invested in Specialist supported housing.
Specialist Supported Housing
The Company actively acquires Specialist supported housing, which includes housing for some of the most vulnerable people in society. Typically, government funding for each tenant under this categorisation represents 100% of the cost. This includes housing (rent and property maintenance) as well as the cost for care (paid to the Care Provider and usually representing the largest element of the overall funding). Costs are paid from the Department for Communities and Local Government and the Department of Work and Pensions to the relevant Local Authority, which then passes funds on to the Registered Provider and Care Provider.
Due to the relationships the Company has fostered in the market acquisition yields achieved in the Specialist supported housing sector are typically in the region of 5.5% to 6.5%. Larger portfolios have been seen to date at significantly lower yields. Many of the tenants in the Company's portfolio are of an age that would mean that they could be in residence for the length of the lease and beyond, as such the leases are typically 25 years in length or longer and subject to annual CPI uplifts.
The Local Authority is responsible for paying the care provider directly for its provision of services to the tenant. The Company does not undertake responsibility for the operations of the care provider or care for the individual tenants. The Registered Provider typically enters into a service level agreement with the care provider. The care provider itself comes under the regulation of the Care Quality Commission.
Long-term leases and occupancy agreements
The Company has typically entered into long-term inflation adjusted leases for periods in excess of 20 years with Housing Associations, where all management and maintenance obligations are serviced by the Housing Associations. The Company's portfolio currently has a WAULT of 24.1 years.
The nature of the lease arrangements with the Housing Associations are that the Housing Association, and not the Company, is the landlord under applicable landlord and tenancy legislation.
Where the counterparty is a Local Authority, or where we believe it is in the Company's interest, the Company may consider unexpired leases of not less than 10 years. This may be due to the constraints on Local Authorities from entering into longer terms arrangements.
The investment pipeline
The investment pipeline has identified a number of new assets which meet the Investment Objective and Investment Strategy, including off-market portfolios identified through our contacts and relationships in the sector.
The assets identified for acquisition come from an increasingly broad range of sources reflecting the enhanced profile of the Company and the Investment Adviser within the social housing sector.
The Investment Adviser has identified further pipeline of opportunities and is engaged presently in conducting detailed due diligence, on those that are near term and evaluating further those for purchase later in 2018 and beyond. As part of this work the Investment Adviser continues to build relationships with potential vendors, particularly care providers who today form a growing element of the pipeline overall in addition to Housing Associations and other private vendors.
As part of the Company's plans to seek further diversification within the specialist areas of the regulated social housing sector, we anticipate that pipeline transactions will include not just homes for tenants with care needs based around learning disability and autism but also dependency, homelessness and the desire to release hospital beds through the use of "step down" accommodation associated with the NHS. In each case the Company intends to operate the same model with a Housing Association entering into a long-term arrangement with the Company and providing on the ground property services.
We look forward to continued progress over the forthcoming months and to deploying further capital to improve the quality and availability of social housing across England and Wales.
Civitas Housing Advisors Limited
Investment Adviser
11 June 2018
Corporate Social Responsibility Report
Sustainability
The business model of the Company is to provide long-term suitable homes for individuals with care needs; acting in a sustainable manner is key to achieving this aim. The property of the Company is tailored to meet the future needs of the tenants and where required is actively asset managed to provide long term functionality and value to the wider community.
Environment
During the investment due diligence the Company looks closely at the environmental impact of each potential acquisition, and encourages a sustainable approach for maintenance and upgrading properties. Through partnering with specialist developers and vendors, the high standards the Company expects from each investment in the Supported housing sector is adopted by other companies in the sector.
Once within the portfolio the properties of the Company are actively asset managed, with opportunities to improve environmental efficiencies factoring heavily in addition to other asset management initiatives.
The Board has considered the requirements to disclose the annual quantity of emissions, further detail on this is included in the Report of the Directors in the full Annual Report.
Diversity
The Company does not have any employees or office space, as such the Company does not operate a diversity policy with regards to any administrative, management and supervisory functions.
Whilst recognising the importance of diversity in the boardroom, the Company does not consider it to be in the interest of the Group and its shareholders to set prescriptive diversity criteria or targets. The Board will continue to monitor diversity, taking such steps as it considers appropriate to maintain its position as a meritocratic and diverse business.
The Board's objective is to maintain effective decision-making, including the impact of succession planning. All Board appointments will be made on merit and have regard to diversity regarding factors such as gender, ethnicity, skills, background and experience.
The Board comprises three male and one female non-executive Directors.
Human rights
The Company is not within the scope of the Modern Slavery Act 2015 because it has not exceeded the turnover threshold and is therefore not obliged to make a slavery and human trafficking statement.
The Board is satisfied that, to the best of its knowledge, the Company's principal advisers, which are listed in the Company Information section, comply with the provisions of the UK Modern Slavery Act 2015.
The Company's business is solely in the UK and therefore is considered to be low risk with regards to human rights abuses.
Community and Employees
The Company's properties enable the provision of care to some of the most vulnerable people in the community, ensuring safe and secure accommodation, tailored to meet individual care needs. The Company has increased the provision of Specialist supported housing, bringing new supply to the sector and providing homes to over 2,500 people. All of the Company's properties enable the provision of high levels of care, generating local jobs and helping to support local economies.
The Company has no employees and accordingly no requirement to separately report on this area.
The Investment Adviser is an equal opportunities employer who respects and seeks to empower each individual and the diverse cultures, perspectives, skills and experiences within its workforce.
Investment objective and policy
Investment objective
The Company's investment objective is to provide Shareholders with an attractive level of income, together with the potential for capital growth from investing in a portfolio of social homes, which benefits from inflation adjusted long-term leases or occupancy agreements with Registered Providers and to deliver, on a fully invested and geared basis, a targeted dividend yield of 5% per annum, which the Company expects to increase broadly in line with inflation.
Investment policy
The Company's investment policy is to invest in a diversified portfolio of social homes throughout England and Wales. The Company intends to meet the Company's investment objective by acquiring, typically indirectly via the SPVs, portfolios of social homes and entering into long-term inflation adjusted leases or occupancy agreements for terms primarily ranging from 10 years to 40 years with Registered Providers, where all management and maintenance obligations will be serviced by the Registered Providers. The Company will not undertake any development activity or assume any development or construction risk. However, the Company may engage in renovating or customising existing homes, as necessary.
The Company may make prudent use of leverage to finance the acquisition of social homes and to preserve capital on a real basis.
The Company is focused on delivering capital growth and expects to hold the Portfolio over the long term and therefore it is unlikely that the Company will dispose of any part of its Portfolio. In the unlikely event that a part of the Portfolio is disposed of, the Directors intend to reinvest proceeds from such disposals in assets in accordance with the Company's investment policy.
Investment restrictions
The Company invests and manages the Portfolio with the objective of delivering a high quality, diversified Portfolio through the following investment restrictions:
-- the Company only invests in social homes located in England and Wales;
-- the Company only invests in social homes where the counterparty to the lease or occupancy agreement is a Housing Association or Local Authority;
-- no lease or occupancy agreement shall be for an unexpired period of less than 10 years, unless the shorter leases or occupancy agreements represent part of an acquisition of a portfolio which the Investment Adviser intends to reorganise such that the average term of lease or occupancy agreement is increased to 15 years or above;
-- the aggregate maximum exposure to any single Local Authority or single Housing Association is 25% of the Gross Asset Value, once the capital of the Company is fully invested;
-- no investment by the Company in any single geographical area, in relation to which the houses and/or apartment blocks owned by the Company are located on a contiguous or largely contiguous basis, exceeds 20 per cent of the Gross Asset Value of the Company;
-- the Company only acquires completed social homes and will not forward finance any development of new social homes;
-- the Company does not invest in other alternative investment funds or closed-end investment companies; and
-- the Company is not engaged in short selling.
The investment limits detailed above apply at the time of the acquisition of the relevant investment in the Portfolio. The Company would not be required to dispose of any investment or to rebalance the Portfolio as a result of a change in the respective valuations of its assets.
Gearing limit
The Directors seek to use gearing to enhance equity returns. The level of borrowing is set on a prudent basis for the asset class and seeks to achieve a low cost of funds, whilst maintaining the flexibility in the underlying security requirements and the structure of both the Portfolio and the Company.
The Company may, following a decision of the Board, raise debt from banks and/or the capital markets and the aggregate borrowings of the Company is always subject to an absolute maximum, calculated at the time of drawdown, of 40 per cent of the Gross Asset Value.
Debt is secured at asset level, whether over a particular property or a holding entity for a particular series of properties, without recourse to the Company and also potentially at Company level with or without a charge over the Portfolio (but not against particular assets), depending on the optimal structure for the Company and having consideration to key metrics including lender diversity, cost of debt, debt type and maturity profiles. Otherwise there will be no cross-financing between investments in the Portfolio and the Company will not operate as a common treasury function between the Company and its investments.
Use of derivatives
The Company may choose to utilise derivatives for efficient portfolio management. In particular, the Directors may engage in full or partial interest rate hedging or otherwise seek to mitigate the risk of interest rate increases on borrowings incurred in accordance with the gearing limits as part of the management of the Portfolio.
Cash management
Until the Company is fully invested, and pending re-investment or distribution of cash receipts, the Company invests in cash, cash equivalents, near cash instruments and money market instruments.
REIT status
The Directors conduct the affairs of the Company so as to enable it to remain qualified as a REIT for the purposes of Part 12 of the CTA 2010 (and the regulations made thereunder).
Key Performance Indicators (KPIs)
Measure Explanation Result
Capital deployed Target of deploying the IPO All of the IPO proceeds
proceeds by 31 December 2017 plus debt invested by
and the C share proceeds December 2017. GBP72.4
by 31 December 2018 or earlier million of the C share
proceeds deployed in
the first four months
since raise. Total of
GBP471.6 million deployed
to date.
--------------------------------- -----------------------------
Increase in IFRS Target to achieve capital IFRS NAV, increase of
and Portfolio NAV appreciation whilst maintaining 7.5p per share or 7.7%
per share a low risk strategy from from IPO.
enhancing the quality of
cash flows from investments, Portfolio NAV, increase
by physical of 15.9p per share or
improvement of properties 16.2% from IPO.
and by creating a significantly
diversified, high-quality
portfolio
--------------------------------- -----------------------------
Dividend per share Targeting 3p per share in Dividends of 3p per share
the period from IPO to 31 declared for the period
December 2017; 5p per share from IPO to 31 December
per annum from the second 2017. Dividend of 5p
year onwards growing broadly per share targeted for
in line with inflation the calendar year to
31 December 2018.
--------------------------------- -----------------------------
Number of Local Authorities, Target risk mitigation through As at 31 March 2018:
Housing Associations a diversified portfolio (once
and care providers fully invested) with no more - 109 Local Authorities
than 25% exposure to any - 11 Housing Associations
one Local Authority or single - 64 care providers
Housing Association and no
more than 20% exposure to Westmoreland Housing
any single geographical area, Association currently
once the capital of the Company represents 35% of the
is fully invested Company's rental income,
this exposure will decrease
below 20% as the portfolio
is fully deployed.
--------------------------------- -----------------------------
Loan to Gross Assets Target debt drawn of 30% Loan to gross assets
of gross assets. of 12%.
--------------------------------- -----------------------------
Alternative performance measures
EPRA
The Company is a member of the European Public Real Estate Association ("EPRA"). EPRA has developed and defined the following performance measures to give transparency, comparability and relevant financial reporting across entities which may use different accounting standards. The Company is pleased to disclose the following measures which are calculated in accordance with EPRA guidance. Comparatives have not been disclosed as the Company did not own any property investments in the comparative period.
EPRA Performance 31 March
Measure Definition EPRA Performance Measure 2018
EPRA Earnings Earnings from operational EPRA Earnings GBP6,293,000
activities.
EPRA Earnings per share 1.80p
(basic)
EPRA Earnings per share 1.44p
(diluted)
-------------------------------- ------------------------------- ---------------
EPRA NAV Net Asset Value adjusted EPRA Net Asset Value GBP668,147,000
to include properties
and other investment
interest at fair value
and to exclude certain
items not expected to
crystallise in a long-term
investment property
business model.
EPRA NAV per share (diluted) 105.54p
-------------------------------- ------------------------------- ---------------
EPRA NNNAV EPRA NAV adjusted to EPRA NNNAV GBP667,435,000
include the fair values
of (i) financial instruments,
(ii) debt and (iii)
deferred taxes.
EPRA NNNAV per share 105.43p
(diluted)
-------------------------------- ------------------------------- ---------------
Estimated Market Rental
Value ("ERV") of vacancy
EPRA VACANCY space divided by ERV
RATE of the whole portfolio EPRA Vacancy Rate 0%
-------------------------------- ------------------------------- ---------------
For detailed workings reconciling the above measures to the IFRS results please see Appendix 1 to these financial statements.
Adjusted
Performance 31 March
Measure Definition Performance Measure 2018
IFRS NAV adjusted to
reflect investment
property valued on
a portfolio basis rather
Portfolio than on an individual
NAV asset basis. Portfolio NAV 113.86p
------------------------------- ------------------------ -------------
Company Adjusted Company Specific Earnings Adjusted Earnings GBP9,085,000
Earnings Measure which adds
back the finance costs
associated with the
C share financial liability.
Adjusted Earnings per 2.60p
share (basic)
--------------------------------------------------------------------------- -------------
For detailed workings reconciling the Portfolio NAV to the IFRS results please see note 16 to these financial statements. For detailed workings reconciling the Company Adjusted Earnings to the IFRS results please see Appendix 1 to these financial statements.
Principal risks and risk management
The Board considers that the risks detailed below are the principal risks facing the Group currently, along with the risks detailed in note 32 to the financial statements. These are the risks that could affect the ability of the Company to deliver its strategy. The Board can confirm that the Principal Risks of the Company, including those which would threaten its future performance, solvency or liquidity, have been robustly assessed throughout the period ended 31 March 2018, and that processes are in place to continue this assessment. Further detail of Risk Management processes that are in place can be found in the Report of the Audit and Management Engagement Committee in the full Annual Report. The principal risks and uncertainties relating to the Group are regularly reviewed by the Board along with the internal controls and risk management processes that are used to mitigate these risks. The principal risks and management of those risks are described below:
Principal risks and uncertainties
Strategy and competitiveness Impact How managed/mitigated
risks
The Company and its operations Any change in the laws, The Company focuses
are subject to laws and regulations and/or on niche real estate
regulations enacted by government policy affecting sectors where it believes
national and local governments the Company and its the regulatory framework
and government policy. operations may have to be robust.
a material adverse
effect on the ability The Board obtains regular
of the Company to successfully updates from professional
pursue its investment advisers to monitor
policy and meet its developments in regulation
investment objective and legislation.
and on the value of
the Company and the
Probability: Unlikely shares.
Impact: High
-------------------------------- -------------------------------
As a result of competition The rate of capital The Company has strong
from other purchasers deployment would drop links with vendors
of social housing properties decreasing returns and a robust pipeline
the Company's ability to shareholders. of future acquisitions.
to deploy capital effectively
within a reasonable timeframe The Board regularly
may be restricted or the reviews the pipeline
net initial yields at of potential acquisitions.
which the Company can
acquire properties may
decline such that target
returns cannot be met. Impact: Medium
Probability: Possible
-------------------------------- -------------------------------
Investment management Impact How managed/mitigated
risks
-------------------------------- -------------------------------
Due diligence may not The Company would over The Company undertakes
reveal all facts and circumstances pay for assets impairing detailed due diligence
that may be relevant in shareholder value, on the properties,
connection with an investment reducing rental income their condition, the
and may not prevent an and therefore returns. proposed rental levels
acquisition being materially - benchmarking against
overvalued or rental streams comparable schemes
being at risk. using both external
consultants where required
and its own proprietary
database - and on the
Registered Providers
and care providers
involved in each property
to ensure that the
purchase price is robust.
The Board considers
Impact: Medium the due diligence undertaken
Probability: Unlikely when approving acquisitions.
-------------------------------- -------------------------------
The value of the investments The valuation of the The Company invests
made by the Company may Company's assets would in projects with stable
change from time to time fall decreasing the predetermined, long
according to a variety Net Asset Value of term leases in place
of factors, including the Company. with CPI or CPI plus
movements in interest 1% indexation and its
rates and in inflation strategy is not focused
and general market pricing on sale of properties.
of similar investments.
The Board receives
regular updates on
factors that might
Impact: Medium impact investment valuations.
Probability: Possible
-------------------------------- -------------------------------
Loss of key staff at the Negative investor sentiment The Board considers
Investment Adviser. leading to a reduction the Investment Advisers'
in share price. Reduction key man risk and succession
in ability to source plans.
off market and favourable
deals.
Probability: Unlikely
Impact: High
-------------------------------- -------------------------------
Tenant defaulting under Loss of rental income The portfolio is diversified
the terms of a lease. in the short term. to reduce the impact
of default. Extensive
diligence is undertaken
on all assets, which
is reviewed and challenged
by the Board. The Board
is provided with regular
updates on the tenants
with any concerns raised
Probability: Possible Impact: Low for discussion.
-------------------------------- -------------------------------
Lack of availability for The rate of capital The Company has strong
debt financing or other deployment would drop links with a number
capital. decreasing returns of banks and other
to shareholders. capital sources.
The Board closely considers
any new loan facility
proposed and receives
regular updates on
debt and capital markets
for consideration.
Probability: Unlikely Impact: Medium
-------------------------------- -------------------------------
Accounting, legal and Impact How managed/mitigated
regulatory risks
-------------------------------- -------------------------------
If the Company fails to Any change in the tax The Company has been
remain qualified as a status of the Company structured to be REIT
REIT, its rental income or any of its underlying compliant and continuously
and gains will be subject investments or in tax monitors the tax status
to UK corporation tax. legislation or practice using professional
(including in relation taxation advisers.
to taxation rates and
allowances) or in accounting The Board has ultimate
standards could adversely responsibility for
affect the investment ensuring adherence
return of the Company. to the UK REIT regime
and monitors the compliance
reports provided by
the Investment Adviser
and other third party
Probability: Unlikely Impact: High providers.
-------------------------------- -------------------------------
Operational risks, including Impact How managed/mitigated
cyber crime
-------------------------------- -------------------------------
Disruption to, or failure Loss of operational The Board monitors
of the systems of third capabilities, potential the services provided
party providers could regulator actions. by the Investment Adviser
prevent accurate reporting and other service providers
and monitoring of the and the key elements
Company's financial position. which are designed
This includes the risk to provide effective
of cyber crime and potential internal control. All
threat to security, business service providers are
continuity and reputation. required to have robust
IT security and disaster
Impact: Medium recovery contingency
plans in place.
Probability: Possible
-------------------------------- -------------------------------
Going concern and viability statement
Going concern
The Board regularly reviews the position of the Company and its ability to continue as a going concern in Board meetings. The financial statements set out the current financial position of the Company.
The Company acquires high quality property with a particular focus on property providing care for the long term. The properties acquired are on long term full repairing and insuring leases in a sector of the market with very high levels of need. The cost base of the Company is proportionately low compared to revenue and there is a high level of certainty over cost to be incurred. On this basis the Company is expected to be viable well beyond the five year terms considered in the Company's testing below.
The cash balance of the Company at the period end was GBP250 million that was readily available for use. As stated in the Strategic Report, the Investment Adviser has identified a pipeline of GBP500 million of attractive investment opportunities for acquisition over the next twelve months. The Board has evaluated the financial position of the Company and is confident in the ability to raise debt and/or equity capital in order to fund the Company's investments for the next 12 months and to facilitate the payment of dividends to shareholders at the targeted rate. Based on this, the Board believes that the Company is in a position to manage its financial risks.
The Board believes that there are currently no material uncertainties in relation to the Company's ability to continue in operation for a period of at least 12 months from the date of approval of the Company's financial statements and therefore have adopted the going concern basis in the preparation of the financial statements.
Viability statement
In accordance with the UK Corporate Governance Code (2016) ("Code"), the Directors present the Company's viability statement which summarises the results of their assessment of the Company's current position, its principal risks and prospects over a period of five years to 31 March 2023. The prospects were assessed over a five year period for the following reasons:
(i) the Company's long term forecast covers a five year period;
(ii) the length of service level agreements between Housing Associations and care providers is typically five years.
(iii) the Company's leases are typically 25 years on fully repairing and insuring leases enabling reasonable certainty of income over the next five years.
The Company's five year forecast incorporates assumptions related to the Company's investment strategy and principal risks from which performance results, cash flows and key performance indicators are forecast. The principal risks are set out above. Of these risks, those which are expected to have a higher impact on the Company's longer term prospects are those related to future government housing policies. The principal risks are mitigated by the Company's risk management and internal control processes which function on an ongoing basis. The Board, via delegation to the Audit and Management Engagement Committee, monitors the effectiveness of the Company's risk management and internal control processes on an ongoing basis. The monitoring activities are described in the Report of the Audit and Management Engagement Committee in the full Annual Report and include direct review and challenge of the Company's documented risks, risk ratings and controls and review of performance and compliance reports prepared by the Company's advisers and the independent external auditors.
In accordance with the Code, the Board of Directors has carried out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency and liquidity.
Where appropriate, the Company's forecasts are subject to sensitivity analysis which involves applying severe conditions and flexing a number of assumptions simultaneously. The sensitivities performed were designed to provide the Directors with an understanding of the Company's performance in the event of severe but plausible scenarios, taking full account of mitigating actions that could be taken to avoid or reduce the impact or occurrence of the underlying risks outlined below:
-- Reduction in availability of suitable assets for acquisition -- Tenant defaulting under a lease -- Lack of availability for debt financing or other capital
-- Deterioration in economic outlook or change in government housing policy which could impact the fundamentals of the social housing sector, including a negative impact on valuations and rental uplifts
The remaining principal risks and uncertainties, whilst having an impact on the Company's business, are not considered by the Directors to have a reasonable likelihood of impacting the Company's viability over the five year period.
Based on the results of their assessment, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five year period of their assessment.
Approval of Strategic Report
The Group Strategic Report was approved by the Board and signed on its behalf by:
Michael Wrobel
Chairman
11 June 2018
Board of Directors
Michael Wrobel (Chairman)
Caroline Gulliver (Director and Chairman of the Audit and Management Engagement Committee)
Peter Baxter (Senior Independent Director)
Alastair Moss (Director)
Extracts from the Report of the Directors
Results and dividends
The results for the period are shown below. The following dividends were paid on the Ordinary shares during the period:
First quarterly dividend 0.75p paid on 31 May 2017
Second quarterly dividend 0.75p paid on 31 August 2017
-------------------------------
Third quarterly dividend 0.75p paid on 30 November 2017
-------------------------------
Fourth quarterly dividend 0.75p paid on 9 March 2018
-------------------------------
Since the period end, the Company has declared the following dividends:
First quarterly dividend 1.25p paid on 8 June 2018
on the Ordinary shares
First dividend on the C shares 1.13p paid on 8 June 2018
--------------------------
No final dividends are being recommended on the Ordinary or C shares.
Capital Structure
350 million Ordinary shares of 1p each (with an aggregate nominal value of GBP3,500,000) were issued under the IPO on 18 November 2016 at a price of 100p per share. This was followed by the issue of 302 million C shares of 1p each (with an aggregate nominal value of GBP3,020,000) at 100p per C share on 14 November 2017 under a fully pre-emptive Open Offer, Placing, Offer for Subscription and Intermediaries Offer.
50,000 redeemable preference shares had been issued to CHA on 26 October 2016 in consideration for an irrevocable undertaking by CHA to pay up one quarter of the nominal value in order to allow the Company to obtain a trading certificate pursuant to section 761 of the Companies Act 2006. These shares were redeemed on 28 November 2016, following the admission to trading of the Ordinary shares.
As at 31 March 2018, the Company had 350 million Ordinary shares and 302 million C shares in issue, none of which were held in treasury. The total voting rights as at 31 March 2018 and the date of this report were 350 million.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each financial period. Under that law, the Directors have prepared the Group financial statements in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union and the Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 "Reduced Disclosure Framework", 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 Group and Company and of the profit or loss of the Group and Company for that period. In preparing the financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- state whether applicable IFRSs as adopted by the European Union have been followed for the Group financial statements and United Kingdom Accounting Standards, comprising FRS 101, have been followed for the Company financial statements, subject to any material departures disclosed and explained in the financial statements;
-- make judgements and accounting estimates that are reasonable and prudent; and
-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation.
The Directors are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Directors consider that the Annual Report and financial statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group and Company's position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed above confirm that, to the best of their knowledge:
-- the Company financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 "Reduced Disclosure Framework", and applicable law), give a true and fair view of the assets, liabilities, financial position and profit of the Company;
-- the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and
-- the Strategic Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.
Approval
This Statement of Directors' Responsibilities statement was approved by the Board and signed on its behalf by:
Michael Wrobel
Chairman
11 June 2018
FINANCIAL INFORMATION
The financial information set out below does not constitute the Company's statutory accounts for the period ended 31 March 2018 or the period ended 17 November 2016 but is derived from those accounts. Statutory accounts for the period ended 17 November 2016 have been delivered to the Registrar of Companies and those for the period ended 31 March 2018 will be delivered in due course. The Auditor has reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the Auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The text of the Auditor's report can be found in the Company's full annual report and financial statements at www.civitassocialhousing.com.
Consolidated Statement of Comprehensive Income
For the period from 18 November 2016 to 31 March 2018
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
Note GBP'000 GBP'000
Revenue
Rental income 5 18,606 -
Net rental income 18,606 -
Directors' remuneration 6 (205) (9)
Investment advisory fees 8 (5,773) -
General and administrative expenses 9 (2,915) (22)
Total expenses (8,893) (31)
Change in fair value of investment
properties 15 30,633 -
Operating profit/(loss) 40,346 (31)
Finance income 10 413 -
Finance expense - relating to
bank borrowings 11 (1,041) -
Finance expense - C shares amortisation 11 (2,792) -
Profit/(loss) before tax 36,926 (31)
Taxation 12 - -
Profit/(loss) being total comprehensive
income/(loss) for the period 36,926 (31)
All amounts reported in the Consolidated Statement of Comprehensive Income above arise from continuing operations.
Earnings/(losses) per share - basic 13 10.55p (68,261.00)p Earnings/(losses) per share - diluted 13 6.27p (68,261.00)p
The notes below are an integral part of these consolidated financial statements.
Consolidated Statement of Financial Position
As at 31 March 2018
31 March 17 November
2018 2016
Note GBP'000 GBP'000
Assets
Non-current assets
Investment property 15 516,222 -
516,222 -
Current assets
Trade and other receivables 17 3,315 50
Cash and cash equivalents 18 249,608 -
252,923 50
Total assets 769,145 50
Liabilities
Current liabilities
Trade and other payables 19 (10,176) (81)
C shares 21 (298,752) -
(308,928) (81)
Non-current liabilities
Bank and loan borrowings 20 (90,822) -
-
Total liabilities (399,750) (81)
Total net assets/(liabilities) 369,395 (31)
Equity
Share capital 22 3,500 -
Share premium reserve 23 - -
Capital reduction reserve 24 331,625 -
Retained earnings/(accumulated
losses) 25 34,270 (31)
Total equity 369,395 (31)
Net assets per share - basic 26 105.54p (31,339.00)p
Net assets per share - diluted 26 105.54p (31,339.00)p
These consolidated group financial statements were approved by the Board of Directors of Civitas Social Housing PLC and authorised for issue on 11 June 2018 and signed on its behalf by:
Michael Wrobel,
Chairman and Independent Non-Executive Director
11 June 2018
Company No: 10402528
The notes below are an integral part of these consolidated financial statements.
Consolidated Statement of Changes in Equity
For the period from 18 November 2016 to 31 March 2018
Retained
Share premium Capital earnings/
Share reserve reduction (accumulated
Note capital GBP'000 reserve losses) Total equity
GBP'000 GBP'000 GBP'000 GBP'000
Balance at 29 September - - - - -
2016
Loss and total comprehensive
loss for the period - - - (31) (31)
Issue of Ordinary shares
Issue of share 22 - - - - -
capital
Balance at 17 November
2016 - - - (31) (31)
Profit and total comprehensive
income for the period - - - 36,926 36,926
Issue of Ordinary shares
Issue of share
capital 22 3,500 346,500 - - 350,000
Share issue costs 23 - (7,000) - - (7,000)
Cancellation of
share premium
reserve 23 - (339,500) 339,500 - -
Dividends paid
Total interim
dividends for
the period ended
31 March 2018
(3.00p) 14 - - (7,875) (2,625) (10,500)
Balance at 31 March
2018 3,500 - 331,625 34,270 369,395
The notes below are an integral part of these consolidated financial statements.
Consolidated Statement of Cash Flows
For the period from 18 November 2016 to 31 March 2018
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
Note GBP'000 GBP'000
Cash flows from operating activities
Profit/(loss) for the period
before taxation 36,926 (31)
- Change in fair value of investment (30,633) -
properties
- Rent straight line adjustments (332) -
Finance income (413) -
Finance expense 3,833 -
Increase in trade and other
receivables (2,540) (50)
Increase in trade and other
payables 803 81
Cash generated from operations 7,644 -
Interest received 413 -
Net cash flow generated from operating 8,057 -
activities
Investing activities
Purchase of investment properties (458,564) -
Acquisition costs (19,051) -
Restricted cash held as retention (6,283) -
money
Net cash flow used in investing (483,898) -
activities
Financing activities
Proceeds from the issue of Ordinary
share capital 22 350,000 -
Share issue costs paid 23 (7,000) -
Dividends paid to equity shareholders (10,073) -
Proceeds from the issue of C
shares 21 302,000 -
C share issue costs
paid 21 (6,040) -
Bank borrowings advanced 20 92,457 -
Bank borrowing issue
costs paid 20 (1,761) -
Loan interest paid (417) -
Net cash flow generated from financing 719,166 -
activities
Net increase in cash and cash 243,325 -
equivalents
Unrestricted cash and cash equivalents
at the start of the period 18 - -
Unrestricted cash and cash equivalents
at the end of the period 18 243,325 -
The notes below are an integral part of these consolidated financial statements.
Notes to the Consolidated Financial Statements
For the period from 18 November 2016 to 31 March 2018
1. Corporate Information
The Group's consolidated financial statements for the period from 18 November 2016 to 31 March 2018 comprise the results of the Company and its subsidiaries and were approved by the Board and authorised for issue on 11 June 2018.
Civitas Social Housing PLC ("the Company") was incorporated in England and Wales under the Companies Act 2006 as a public company limited by shares on 29 September 2016 with company number 10402528 under the name Civitas REIT PLC which was subsequently changed to the existing name on 3 October 2016.
The address of the registered office is Beaufort House, 51 New North Road, Exeter, EX4 4EP. The Company is registered as an investment company under section 833 of the Companies Act 2006 and is domiciled in the United Kingdom.
The Company did not begin trading until 18 November 2016 when the shares were admitted to trading on the LSE.
The Company's Ordinary shares are admitted to the Official List of the UK Listing Authority ("UKLA"), a division of the Financial Conduct Authority ("FCA"), and traded on the London Stock Exchange ("LSE").
The principal activity of the Company is to act as the ultimate parent company of Civitas Social Housing PLC and its subsidiaries (the "Group"), whose principal activity is to provide shareholders with an attractive level of income, together with the potential for capital growth from investing in a portfolio of social homes.
2. Basis of preparation
The Group's consolidated financial statements have been prepared on a going concern basis in accordance with the Disclosure Guidance and Transparency Rules of the FCA and with International Financial Reporting Standards ("IFRS") and IFRS Interpretation Committee ("IFRIC") as issued by the IASB and as adopted by the European Union ("EU"), and in accordance with Article 4 of the IAS Regulation and the Companies Act 2006 as applicable to companies using IFRS.
The comparative information disclosed in the consolidated financial statements relates to the period from 29 September 2016 to 17 November 2016. The period covered by the comparative information varies in length and the level of activities and therefore is not comparable to the current period.
The Group's consolidated financial statements have been prepared on a historical cost basis, as modified for the Group's investment properties at fair value through profit or loss.
The Group has chosen to adopt EPRA best practice guidelines for calculating key metrics such as net asset value and earnings per share.
2.1 Functional and presentation currency
The financial information is presented in Pounds Sterling which is also the functional currency of the Company, and all values are rounded to the nearest thousand (GBP'000s) pound, except where otherwise indicated.
2.2 Going concern
The Group benefits from a secure income stream from long leases with the Housing Associations, which are not overly reliant on any one tenant and present a well-diversified risk. The Group's cash balances as at 31 March 2018 were GBP249.6 million, of which GBP243.3 million was readily available and it had bank borrowings of GBP92.5million.
As a result, the Directors believe that the Group is well placed to manage its financing and other business risks and that the Group will remain viable, continuing to operate and meets its liabilities as they fall due.
The Directors believe that there are currently no material uncertainties in relation to the Group's ability to continue for the period of at least 12 months from the date of the Group's consolidated financial statements. The Board is, therefore, of the opinion that the going concern basis adopted in the preparation of the consolidated financial statements is appropriate.
2.3 New standards, amendments and interpretations
No new standards, amendments to standards and interpretations came into effect for accounting periods starting on or after 18 November 2016.
2.4 New standards, amendments and interpretations effective for future accounting periods
The following are new standards, interpretations and amendments, which are not yet effective and have not been early adopted in this financial information, that will or may have an effect on the Company's future financial statements:
-- Amendments to IAS 7 Statement of Cash Flows, is effective for annual periods beginning on or after 1 January 2017. The amendments require the disclosure of cash and non-cash changes in liabilities arising from financing activities.
-- IFRS 9 Financial Instruments. The standard will replace IAS 39 Financial Instruments and contains two primary measurement categories for financial assets (effective for annual periods beginning on or after 1 January 2018).
The Group will need to apply an expected credit loss model when calculating impairment losses on its trade and other receivables. This may result in increased impairment provisions and greater judgement due to the need to factor in forward looking information. It will need to consider the probability of default occurring over the contractual life of its trade receivables and contracts. As the Company has tenants with strong covenants and generally tenant receipts are received in advance or on the due date, the Directors do not consider there will be a material impact on the Group financial statements.
-- IFRS 15 Revenue from Contracts. The standard replaces IAS 11 Construction Contracts, IAS 18 Revenue. The standard introduces a new revenue recognition model that recognises revenue either at a point in time or over time (effective for annual periods beginning on or after 1 January 2018)
The Group does not believe that the standard will have a material impact on the financial statements as rental income is outside the scope of the standard. The adoption of the standard may result in changes to presentation and disclosure.
-- IFRS 16 Leases. Introduction of a single, on-balance sheet accounting model (effective for annual periods beginning on or after 1 January 2019).
The Directors are currently assessing the impact on the financial statements of this standard; however at present they do not anticipate that the adoption of this will have a material impact on the Group's financial statements as the Group does not hold any material operating leases as lessee.
3. Significant accounting judgements, estimates and assumptions
In the application of the Group's accounting policies, which are described in note 4, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below:
3.1 Valuation of investment property
The Group uses the valuation carried out by its independent valuers as the fair value of its property portfolio. The valuation is based upon assumptions including future rental income and the appropriate discount rate. The valuers also make reference to market evidence of transaction prices for similar properties. Further information is provided in note 15.
The Group's properties have been independently valued by Jones Lang LaSalle Ltd. ("JLL" or the "Valuer") according to the definitions published by the Royal Institute of Chartered Surveyors' ("RICS") Valuation - Professional Standards, July 2017, Global and UK Editions (commonly known as the "Red Book"). JLL is one of the most recognised professional firms within social housing valuation and has sufficient current local and national knowledge of both social housing generally and Specialist supported housing ("SSH") and has the skills and understanding to undertake the valuations competently.
With respect to the Group's consolidated financial statements, investment properties are valued at their fair value at each balance sheet date in accordance with IFRS 13 which recognises a variety of fair value inputs depending upon the nature of the investment. Specifically:
Level 1 - Unadjusted, quoted prices for identical assets and liabilities in active (typically quoted) markets.
Level 2 - Quoted prices for similar assets and liabilities in active markets.
Level 3 - External inputs are "unobservable". Value is the director's best estimate, based on advice from relevant knowledgeable experts, use of recognised valuation techniques and a determination of which assumptions should be applied in valuing such assets and with particular focus on the specific attributes of the investments themselves.
Given the bespoke nature of each of the Group's investments, the particular requirements of due diligence and financial contribution obtained from the vendors together with the recent emergence of Specialist supported housing, all of the Group's investment properties are included in Level 3.
3.2. Business combinations
The Group acquires subsidiaries that own investment properties. At the time of acquisition, the Group considers whether each acquisition represents the acquisition of a business or the acquisition of an asset. Management considers the substance of the assets and activities of the acquired entity in determining whether the acquisition represents the acquisition of a business.
The Group accounts for an acquisition as a business combination where an integrated set of activities is acquired in addition to the property. Where such acquisitions are not judged to be the acquisition of a business, they are not treated as business combinations. Rather, the cost to acquire the corporate entity is allocated between the identifiable assets and liabilities of the entity based upon their relative fair values at the acquisition date. Accordingly, no goodwill or additional deferred tax arises.
All corporate acquisitions during the period have been treated as asset purchases rather than business combinations because no integrated set of activities were acquired.
3.3. Operating lease contracts - the Group as lessor
The Group has acquired investment properties that are subject to commercial property leases with Registered Providers. The Group has determined, based on an evaluation of the terms and conditions of the arrangements, particularly the duration of the lease terms and minimum lease payments, that it retains all the significant risks and rewards of ownership of these properties and so accounts for the leases as operating leases.
4. Summary of significant accounting policies
The principal accounting policies applied in the preparation of the consolidated financial statements are set out below. The policies have been consistently applied to all periods presented, unless otherwise stated.
4.1. Basis of consolidation
The consolidated financial statements comprise the financial information of the Group as at the period end date.
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. All intra-group transactions, balances, income and expenses are eliminated on consolidation. The financial information of the subsidiaries is included in the consolidated financial statements from the date that control commences until the date that control ceases.
If an equity interest in a subsidiary is transferred but a controlling interest continues to be held after the transfer then the change in ownership interest is accounted for as an equity transaction.
Accounting policies of the subsidiaries are consistent with the policies adopted by the Company.
4.2. Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially measured at cost, being the fair value of the consideration given, including expenditure that is directly attributable to the acquisition of the investment property. After initial recognition, investment property is stated at its fair value at the balance sheet date. Gains and losses arising from changes in the fair value of investment property are included in profit or loss for the period in which they arise in the Consolidated Statement of Comprehensive Income.
Subsequent expenditure is capitalised only when it is probable that future economic benefits are associated with the expenditure. Ongoing repairs and maintenance are expensed as incurred.
An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is incurred in profit or loss in the period in which the property is derecognised.
Significant accounting judgements, estimates and assumptions made for the valuation of investment properties are discussed in note 3.
4.3. Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
The Company has determined that it retains all the significant risks and rewards of ownership of the properties and accounts for the contracts as operating leases as discussed in note 3.
Properties leased out under operating leases are included in investment property in the Consolidated Statement of Financial Position. Rental income from operating leases is recognised on a straight line basis over the term of the relevant leases.
4.4. Trade and other receivables
Trade and other receivables are amounts due in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.
Trade and other receivables are initially recognised at fair value, and subsequently where necessary re-measured at amortised cost less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence the Group will not be able to collect all amounts due according to the original terms of the receivables.
4.5. Cash and cash equivalents
Cash and cash equivalents include cash in hand, cash held by lawyers and liquidity funds with a term of no more than three months that are readily convertible to a known amount of cash and which are subject to an insignificant risk of changes in value.
Cash held by lawyers is money held in escrow for expenses expected to be incurred in relation to investment properties pending completion. These funds are available immediately on demand.
4.6. Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation.
4.7. Trade and other payables
Trade and other payables are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade and other payables are recognised initially at their fair value and subsequently measured at amortised cost until settled.
4.8. Bank and other borrowings
All bank and other borrowings are initially recognised at cost net of attributable transaction costs. After initial recognition, all bank and other borrowings are measured at amortised cost, using the effective interest method. Any attributable transaction costs relating to the issue of the bank borrowings are amortised through the Group's Statement of Comprehensive Income over the life of the debt instrument on a straight-line basis.
4.9. C share financial liability
C shares are convertible preference shares and under IAS 32 Financial Instruments: Presentation, meet the definition of a financial liability. C shares are recognised on issue at fair value less directly attributable transaction costs. After initial recognition, C shares are subsequently measured at amortised cost using the effective interest rate method. Amortisation is credited to or charged to finance income or finance costs in the Consolidated Statement of Comprehensive Income. Transaction costs are deducted from proceeds at the time of issue.
4.10. Taxation
Taxation on the profit or loss for the period not exempt under UK REIT regulations is comprised of current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income except to the extent that it relates to items recognised as a direct movement in equity, in which case it is recognised as a direct movement in equity. Current tax is expected tax payable on any non REIT taxable income for the period, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous periods.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax that is provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
4.11. Capital management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital.
The Group considers proceeds from equity share issuance and retained earnings as capital.
Until the Group is fully invested and pending re-investment or distribution of cash receipts, the Group will invest in cash, cash equivalents, near cash instruments and money market instruments.
The Directors may use gearing to enhance equity returns. The level of borrowing will be on a prudent basis for the asset class and will seek to achieve a low cost of funds, whilst maintaining the flexibility in the underlying security requirements and the structure of the Group.
The Group may, following a decision of the Board, raise debt from banks and/or the capital markets and the aggregate borrowings of the Group will always be subject to an absolute maximum, calculated at the time of drawdown, of 40% of the Gross Asset Value on a fully invested basis.
4.12. Dividends payable to shareholders
Dividends to the Company's shareholders are recognised as a liability in the Group's consolidated financial statements in the period in which the dividends are approved. In the UK, interim dividends are recognised when paid.
4.13. Rental income
Rental income from investment property is recognised on a straight-line basis over the term of ongoing leases and is shown gross of any UK income tax. Lease incentives are spread evenly over the lease term.
4.14. Finance income
Finance income is recognised as interest accrues on cash and cash equivalent balances held by the Group.
4.15. Finance costs
Finance costs consist of interest and other costs that the Group incurs in connection with bank and other borrowings. Bank interest and bank charges are recognised on an accruals basis. Borrowing transaction costs are amortised over the period of the loan.
After initial recognition, C shares are subsequently measured at amortised cost using the effective interest rate method. Amortisation is credited or charged to finance income or finance costs. Transaction costs are amortised to the earliest conversion period.
4.16. Expenses
All expenses are recognised in the Consolidated Statement of Comprehensive Income on an accruals basis.
4.17. Investment advisory fees
Investment advisory fees are recognised in the Consolidated Statement of Comprehensive Income on an accruals basis.
4.18. Share issue costs
The costs of issuing or reacquiring equity instruments (other than in a business combination) are accounted for as a deduction from equity.
4.19. Impairment of financial assets
A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset and can be estimated reliably.
5. Rental income
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
Rental income from investment property 18,274 -
Rent straight line adjustments 332 -
Direct property expenses - -
Total 18,606 -
As per the lease agreements between the Group and the Registered Providers, the Registered Providers are responsible for the settlement of all present and future rates, taxes, costs and other impositions payable in respect of the Property. As a result, no direct property expenses were incurred.
6. Directors' Remuneration
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
Directors' fees 190 9
Employer's National Insurance Contributions 15 -
Total 205 9
The Directors are remunerated for their services at such rate as the Directors shall from time to time determine.
At IPO the Chairman was entitled to a fee of GBP35,000 per annum, and the other Directors of the Board to a fee of GBP30,000 per annum (with the exception of the Chairman of the Audit and Management Engagement Committee who was entitled to an additional fee of GBP2,500 per annum).
During the Board meeting on 26 July 2017, a resolution was passed authorising an increase to the fees of the Chairman to GBP50,000 per annum, the Chairman of the Audit and Management Engagement Committee and the other Directors to GBP36,000 per annum and GBP32,000 per annum respectively effective from 1 August 2017.
7. Particulars of employees
The Group had no employees during the period (17 November 2016 period: nil) other than the Directors.
8. Investment advisory fees
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
Advisory fee 5,773 -
Total 5,773 -
Civitas Housing Advisors Limited ("CHA") is appointed as the Investment Adviser of the Company. Under the current Investment Management Agreement, the Advisory Fee shall be an amount calculated in respect of each Quarter, in each case based upon the Portfolio Net Asset Value (further explained in note 16) most recently announced to the market at the relevant time (as adjusted for issues or repurchases of shares in the period between the date of such announcement and the date of the relevant calculation), on the following basis:
a) on that part of the Portfolio Net Asset Value up to and including GBP250 million, an amount equal to 1% of such part of the Portfolio Net Asset Value;
b) on that part of the Portfolio Net Asset Value over GBP250 million and up to and including GBP500 million, an amount equal to 0.9% of such part of the Portfolio Net Asset Value;
c) on that part of the Portfolio Net Asset Value over GBP500 million and up to and including GBP1,000 million, an amount equal to 0.8% of such part of the Portfolio Net Asset Value;
d) on that part of the Portfolio Net Asset Value over GBP1,000 million, an amount equal to 0.7% of such part of the Portfolio Net Asset Value.
The appointment of the Investment Adviser shall continue in force unless and until terminated by either party giving to the other not less than 12 months' written notice, such notice not to expire earlier than 30 November 2021.
9. General and administrative expenses
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
Legal and professional fees 1,136 -
Administration fees 581 11
Consultancy fees 274 -
Audit fees 308 11
Abortive costs 168 -
Valuation fees 96 -
Depositary fees 83 -
Grants and donations 79 -
Insurance 32 -
Marketing 71 -
Regulatory fees 29 -
Sundry expenses 57 -
Directors' expenses 1 -
Total 2,915 22
Abortive costs represent legal and professional fees incurred in relation to acquisition of investment properties that were considered but subsequently aborted.
Services provided by the Company's auditor and its associates
The Group has obtained the following services from the Company's auditor and its associates:
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
Audit of the financial statements 273 11
Review of the half year financial 35 -
statements
Corporate services relating to the 55 -
initial launch
Corporate services relating to the 200 -
C share fund raise
Total 563 11
10. Finance income
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
Interest and dividends received on 413 -
liquidity funds
Bank interest received - -
Total 413 -
11. Finance expense
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
Bank charges 4 -
Interest paid and payable on bank 902 -
borrowings
Bank borrowing commitment fees 9 -
Amortisation of loan arrangement fees 126 -
Finance expenses associated with bank 1,041 -
borrowings
Amortisation of C share liability 2,792 -
Total 3,833 -
12. Taxation
As a UK REIT, the Group is exempt from corporation tax on the profits and gains from its property investment business, provided it meets certain conditions as set out in the UK REIT regulations. For the current period ended 31 March 2018, the Group did not have any non-qualifying profits and accordingly there is no tax charge in the period. If there were any non-qualifying profits and gains, these would be subject to corporation tax.
It is assumed that the Group will continue to be a group UK REIT for the foreseeable future, such that deferred tax has not been recognised on temporary differences relating to the property rental business. No deferred tax asset has been recognised in respect of the unutilised residual current period losses as it is not anticipated that sufficient residual profits will be generated in the future.
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
Corporation tax charge/(credit) for - -
the period
Total - -
The tax charge for the period is less than the standard rate of corporation tax in the UK of 19%. The differences are explained below.
Group Profit/(loss) before taxation 36,926 (31) UK Corporation tax rate 19.27% 20% Theoretical tax at UK Corporation tax rate 7,116 (6) Effects of: Change in value of exempt investment (5,903) - properties Exempt REIT income (2,352) - Amounts not deductible for tax purposes 691 - Unutilised residual current period tax losses 448 6 Total - -
The standard rate of corporation tax was reduced from 20% to 19% from 1 April 2017. The Government has announced that the corporation tax standard rate is to be reduced to 17% with effective date from 1 April 2020.
REIT exempt income includes property rental income that is exempt from UK Corporation Tax in accordance with Part 12 of CTA 2010.
13. IFRS Earnings per share
Earnings per share ("EPS") amounts are calculated by dividing profit for the period attributable to ordinary equity holders of the Company by the weighted average number of Ordinary shares in issue during the period.
Diluted EPS is calculated by adjusting earnings and the number of shares for the effects of dilutive options and other dilutive potential Ordinary shares (i.e. the C shares).
The calculation of basic and diluted earnings per share is based on the following:
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
Calculation of Basic Earnings per
share
Net profit/(loss) attributable to
Ordinary shareholders (GBP'000) 36,926 (31)
Weighted average number of Ordinary
shares 350,000,000 46
Earnings/(losses) per share
- basic 10.55p (68,261.00)p
Calculation of Diluted Earnings per
share
Net profit/(loss) attributable to
Ordinary shareholders
(GBP'000's) 36,926 (31)
Add back finance costs associated
with the C share liability (GBP'000's) 2,792 -
Total (GBP'000's) 39,718 (31)
Weighted average number of Ordinary
shares 350,000,000 46
Effects of dilution from C shares 283,065,815 -
633,065,815 46
Earnings/(losses) per share
-diluted 6.27p (68,261.00)p
14. Dividends
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
Dividend of 0.75p for the 3 months 2,625 -
to 31 March 2017
Dividend of 0.75p for the 3 months 2,625 -
to 30 June 2017
Dividend of 0.75p for the 3 months 2,625 -
to 30 September 2017
Dividend of 0.75p for the 3 months 2,625 -
to 31 December 2017
Total 10,500 -
On 4 May 2017 the Company announced a dividend of 0.75 pence per share in respect of the period 1 January 2017 to 31 March 2017. The dividend payment was made on 31 May 2017 to shareholders on the register as at 12 May 2017.
On 24 July 2017 the Company announced a dividend of 0.75 pence per share in respect of the period 1 April 2017 to 30 June 2017. The dividend payment was made on 31 August 2017 to shareholders on the register as at 4 August 2017.
On 31 October 2017 the Company announced a dividend of 0.75 pence per share in respect of the period 1 July 2017 to 30 September 2017. The dividend payment was made on 30 November 2017 to shareholders on the register as at 10 November 2017.
On 9 February 2018 the Company announced a dividend of 0.75 pence per share in respect of the period 1 October 2017 to 31 December 2017. The dividend payment was made on 9 March 2018 to shareholders on the register as at 23 February 2018.
On 10 May 2018 the Company announced a dividend of 1.25 pence per share in respect of the period 1 January 2018 to 31 March 2018. The dividend will be paid on 8 June 2018 to shareholders on the register as at 18 May 2018. The financial statements do not reflect this dividend.
15. Investment property
31 March 17 November
2018 2016
GBP'000 GBP'000
Balance at beginning of period - -
Property acquisitions 465,522 -
Acquisition costs 20,067 -
Change in fair value during the period 30,965 -
Value advised by the property 516,554 -
valuers
Adjustments for lease incentive
assets and rent straight line (332) -
assets recognised
Total 516,222 -
In accordance with "IAS 40: Investment Property", the investment property has been independently valued at fair value by JLL, an accredited external valuer with recognised and relevant professional qualifications and recent experience of the location and category of the investment property being valued, however the valuations are the ultimate responsibility of the Directors.
JLL valued the Civitas Social Housing PLC property portfolio on the basis of each individual property and the theoretical sale of the properties without the benefit of any corporate wrapper at GBP516.2 million as at 31 March 2018.
JLL has provided valuations services to the Company with regards to the properties during the period. In relation to the period ended 31 March 2018, the proportion of the total fees payable by the Company to JLL's total fee income was less than 5% and is therefore minimal. Additionally, JLL has a rotation policy in place whereby the signatories on the valuations rotate after seven years.
All corporate acquisitions during the period have been treated as asset purchases rather than business combinations because they are considered to be acquisitions of properties rather than businesses.
The following table provides the fair value measurement hierarchy for investment property:
Significant Significant
Quoted prices observable unobservable
in active inputs inputs
Total markets (level 2) (level 3)
Investment properties GBP'000 (level 1) GBP'000 GBP'000
measured at fair value: GBP'000
31 March 2018 516,222 - - 516,222
17 November 2016 - - - -
There have been no transfers between Level 1 and Level 2 during any of the periods, nor have there been any transfers between Level 2 and Level 3 during any of the periods.
The valuations have been prepared in accordance with the RICS Valuation - Professional Standards (incorporating the International Valuation Standards) by JLL, one of the leading professional firms engaged in the social housing sector.
As noted previously all of the Group's investments are reported as Level 3 in accordance with IFRS 13 where external inputs are "unobservable" and value is the Directors' best estimate, based upon advice from relevant knowledgeable experts.
In this instance, the determination of the fair value of investment property requires an examination of the specific merits of each property that are in turn considered pertinent to the valuation.
These include:
i) the regulated social housing sector and demand for the facilities offered by each Specialist supported housing property owned by the Group;
ii) the particular structure of the Group's transactions where vendors, at their own expense, meet the majority of the refurbishment costs of each property and certain purchase costs;
iii) detailed financial analysis with discount rates supporting the carrying value of each property;
iv) underlying rents for each property in comparison to the market rent, with consideration given as whether a property is over rented; and
v) a full repairing and insuring lease with annual indexation based on CPI or CPI+1% and effectively 25 years outstanding in most cases with a Housing Association itself regulated by the Homes and Communities Agency.
The following descriptions and definitions relating to valuation techniques and key unobservable inputs made in determining fair values are as follows:
Valuation techniques: market value method
The estimated amount for which a property should exchange between a willing buyer and a willing seller in an arm's length transaction after proper marketing wherein the parties had acted knowledgeably, prudently and without compulsion. Such marketing to be structured such that the sale is undertaken in such a manner and in a specific market with a view to maximising the value achieved.
There are two main unobservable inputs that determine the fair value of the Group's investment property:
1) The rate of inflation as measured by CPI; it should be noted that all leases benefit from either CPI or CPI+1 indexation.
2) The discount rate applied to the rental flows.
Key factors in determining the discount rates applied include the regulated social housing sector and demand for each SSH property owned by the Group, costs of acquisition and refurbishment of each property, the anticipated future underlying cash flows for each property, benchmarking of each underlying rent for each property (passing rent), and the fact that all of the properties within the Group's Portfolio have the benefit of full repairing and insuring leases entered into by a Housing Association.
As at the balance sheet date the lease lengths within the Group's Portfolio ranged from an effective 22 years to 25 years with a weighted average unexpired lease term of 24.1 years. The greater the length then, all other metrics being equal, the greater the value of the property.
Sensitivities of measurement of significant unobservable inputs
As set out within significant accounting estimates and judgements at 3.1 above, the Group's property investment valuation is open to judgements and is inherently subjective by nature. As a result the following sensitivity analysis has been prepared:
Average discount rate and range
The average discount rate used in the Group's property Portfolio Valuation is 6.5%.
The range of discount rates used in the Group's property Portfolio Valuation is from 5.6% to 9.1%.
The table below illustrates the change to the value of investment properties if the discount rate and CPI used for the portfolio valuation calculations are changed:
-0.5% in +0.5% in +0.25% in -0.25% in
Increase/(decrease) in discount discount CPI (2%) CPI (2%)
the IFRS fair value of rate rate GBP'000 GBP'000
investment properties GBP'000 GBP'000
at:
31 March 2018 20,634 (19,158) 16,062 (15,412)
17 November 2016 n/a n/a n/a n/a
16. Portfolio Net Asset Value
The objective of the Portfolio Net Asset Value ("Portfolio NAV") measure is to highlight the fair value of the net assets on an ongoing, long-term basis, which aligns with the Group's business strategy as an ongoing REIT with a long-term investment outlook. This Portfolio NAV is made available on a quarterly basis on the Company's website and announced via a RIS.
On 14 November 2017 the Company issued 302,000,000 C shares. The results, assets and liabilities attributable to the C shares are accounted for in a separate pool to those of the Ordinary shares and thus the Company announces a quarterly Portfolio NAV for both share classes.
Under IFRS accounting rules, the C shares are recognised in the financial statements as a liability valued at amortised cost which represents the value of the assets and liabilities attributable to the C share pool (see note 21). Thus, the net assets of the Company disclosed in the financial statements are equal to the net assets attributable to the Ordinary shareholders.
In order to arrive at Portfolio Net Asset Value for each share class, adjustments are made to the IFRS Net Asset Value ("IFRS NAV") reported in the consolidated financial statements such that;
i) The C share liability, equivalent to the net assets attributable to the C shareholders is added back to net assets, because under IFRS accounting rules the C shares are recognised as a liability. (Please refer to note 21 for more details).
ii) The hypothetical sale of properties will take place on the basis of a sale of a corporate vehicle rather than a sale of underlying property assets. This assumption reflects the basis upon which the Company's assets have been assembled within specific SPVs.
iii) The hypothetical sale will take place in the form of a single portfolio disposal.
Ordinary
share C share
pool pool Total
GBP'000 GBP'000 GBP'000
Net asset value per the consolidated
financial statements 369,395 - 369,395
Add back C share liability - 298,752 298,752
Value of Asset pools 369,395 298,752 668,147
Effects of the adoption to
the assumed, hypothetical
sale of properties as a portfolio
and on the basis of sale
of a corporate vehicle 29,110 4,014 33,124
Portfolio Net Asset Value 398,505 302,766 701,271
After reflecting these amendments, the movement in net assets since inception is as follows:
Ordinary
share C share
pool pool Total
GBP'000 GBP'000 GBP'000
Opening reserves at 18 November
2016 (31) - (31)
Net issue proceeds 343,000 295,960 638,960
Operating profits/(losses) 10,470 (757) 9,713
Capital appreciation 56,393 7,364 63,757
Finance income 214 199 413
Finance costs (1,041) - (1,041)
Dividends paid (10,500) - (10,500)
Portfolio Net Assets at 31
March 2018 398,505 302,766 701,271
Value is represented by:
Ordinary
share C share
pool pool Total
GBP'000 GBP'000 GBP'000
Investment property using
the portfolio valuation method 471,525 77,821 549,346
Net current assets 17,802 224,945 242,747
Bank borrowings (90,822) - (90,822)
Portfolio Net Assets 398,505 302,766 701,271
Shares in issue 350,000,000 302,000,000
Portfolio Net Asset Value
per share 113.86p 100.25p
Stated below is the Consolidated Statement of Comprehensive Income for the period from 18 November 2016 to 31 March 2018, reflecting the application of the above two assumptions.
Summary Consolidated Statement of Comprehensive Income - Portfolio NAV Basis
For the period from 18 November 2016 to 31 March 2018
Ordinary
share C share
pool pool Total
GBP'000 GBP'000 GBP'000
Net rental income 17,840 766 18,606
Expenses (7,370) (1,523) (8,893)
Fair value gains on investment
properties 56,393 7,364 63,757
Finance income 214 199 413
Finance costs (1,041) - (1,041)
Value of each pool 66,036 6,806 72,842
Shares in issue 350,000,000 302,000,000
Adjusted Earnings/(losses)
per share - basic 18.87p 2.25p
17. Trade and other receivables
31 March 17 November
2018 2016
GBP'000 GBP'000
Rent receivable 175 -
Less provision for impairment - -
Net rent receivable 175 -
Accrued income 2,398 -
Debtor arising from rent straight 332 -
line adjustments
Prepayments and other receivables 410 -
Amounts due from shareholders - 50
Total 3,315 50
Prepayments and other receivables amount above includes prepaid legal and professional fees of GBP393,000 that have been incurred in connection with the acquisitions yet to be completed.
The aged analysis of trade receivables that are past due but not impaired was as follows:
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
Current - -
< 30 days 175 -
30-60 days - -
> 60 days - -
175 -
Less provision for impairment - -
Total 175 -
The Directors consider the fair value of receivables equals their carrying amount.
The table above shows the aged analysis of trade receivables included in the table above which are past due but not impaired. These principally relate to First Priority Housing Association ("First Priority"). Please see the Investment Advisers' report for more details.
Other categories within trade and other receivables do not include impaired assets.
18. Cash and cash equivalents
31 March 17 November
2018 2016
GBP'000 GBP'000
Cash held by solicitors 12,262 -
Liquidity funds 210,969 -
Cash held at bank 20,094 -
Unrestricted cash and cash equivalents 243,325
Restricted cash 6,283 -
Total 249,608 -
Liquidity funds refer to money placed in money market funds. These are highly liquid funds with accessibility within 24 hours and subject to insignificant risk of changes in value.
Cash held by lawyers is money held in escrow for expenses expected to be incurred in relation to investment properties pending completion. These funds are available immediately on demand.
Restricted cash represents retention money held by lawyers in relation to deferred payments subject to achievement of certain conditions, other retentions and cash segregated to fund repair, maintenance and improvement works to bring the properties up to satisfactory standards for the Group and the tenants. Currently that amount of cash is held in escrow.
19. Trade and other payables
31 March 17 November
2018 2016
GBP'000 GBP'000
Deferred income 225 -
Acquisition costs accrued 8,366 -
Finance costs 498 -
Dividends payable 427 -
Accruals 660 -
Amounts due to shareholders - 81
Total 10,176 81
Acquisition costs accrued includes the balance of retention monies (as represented by GBP6,283,000 restricted cash as per note 18) and acquisition costs capitalised.
20. Bank and loan borrowings
Bank borrowings are secured by charges over individual investment properties held by certain asset-holding subsidiaries. The banks also hold charges over the shares of certain subsidiaries and any intermediary holding companies of those subsidiaries. Any associated fees in arranging the bank borrowings unamortised as at the period end are offset against amounts drawn on the facilities as shown in the table below:
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
Bank borrowings drawn 92,457 -
Bank borrowings drawn at end of period 92,457 -
Less: loan issue costs incurred (1,761) -
Add: loan issue costs amortised 126 -
Unamortised costs at end of period (1,635) -
At end of period 90,822 -
Maturity of bank borrowings:
Repayable within 1 year - -
Repayable between 1 to 2 years - -
Repayable between 2 to 5 years 39,957 -
Repayable after 5 years 52,500 -
Total 92,457 -
The Group entered into the following loan facility agreements during the period:
A 10 year Sterling Term Facility Agreement dated 2 November 2017 for up to GBP52,500,000 with Scottish Widows Limited. Interest is fixed at a total of 2.9936% per annum.
The borrowings include amounts secured on investment property to the value of GBP163,812,000 (17 November 2016: GBPnil).
A 3 year Sterling Revolving Facility Agreement dated 15 November 2017 for up to GBP40,000,000 with Lloyds Bank plc. Interest is charged at LIBOR + 1.50% margin.
The borrowings include amounts secured on investment property to the value of GBP97,400,000 (17 November 2016: GBPnil).
A number of covenants are in place under the two agreements. Under the 10 year facility, historical and projected interest cover must be at least 325% and the loan to value ratio must not exceed 40%. Under the 3 year revolving credit facility, historical and projected interest cover must be at least 250% and the loan to value ratio must not exceed 55%.
21. C shares
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
At beginning of period - -
Proceeds from issue of C shares 302,000 -
C share issue costs (6,040) -
Amortisation of C share liability 2,792 -
At end of period 298,752 -
On 10 November 2017 the Company announced the issue of 302,000,000 C shares, issued at GBP1 per share. The C shares are convertible preference shares. The shares are listed on the London Stock Exchange and dealing commenced on 14 November 2017.
Holders of C shares are not entitled to receive notice of, attend, speak or vote at general meetings of the Company.
Under ISA 32 Financial Instruments: Presentation, the C shares meet the definition of a financial liability rather than equity and are presented in the financial statements as a liability of the Company carried at amortised cost.
The funds were raised in order to finance a number of property acquisitions and C shares were issued rather than Ordinary shares so that the issue costs associated with the fund raise and the costs associated with the property acquisitions did not dilute the Ordinary share NAV.
The C shares will be converted to Ordinary shares later in the year once most of the funds have been utilised for property acquisitions. The conversion ratio will be based on the ratio of the value of the net assets attributable to each share class.
In order to calculate the net assets attributable to each share class, the results, assets and liabilities attributable to the C shares are identified in a separate pool to the results, assets and liabilities of the Ordinary shares. A share of fund level expenses for the period is allocated to the C shares based on the net assets of each share class pool.
It should be noted that these financial statements include all results, assets and liabilities of both share class pools however as the C shares are classified as a liability, net assets are reduced by the value of the C shares liability which is also equivalent to the net assets of the C share pool.
The value of the C shares liability at 31 March 2018 is GBP298,752,000 representing 98.92p per share.
The table below gives a summary of the movement in net assets of the C share pool and Group results for the period from 18 November 2016 to 31 March 2018
C share
pool Group
GBP'000 GBP'000
Opening reserves - (31)
Proceeds from issue of shares 302,000 652,000
Share issue costs (6,040) (13,040)
Net rental income 766 18,606
Expenses (1,523) (8,893)
Fair value gains on investment
properties 3,350 30,633
Finance income 199 413
Finance costs - (1,041)
Dividends paid - (10,500)
298,752 668,147
Less C share liability - (298,752)
Net assets 298,752 389,395
Net assets are represented by:
C share
pool Group
GBP'000 GBP'000
Investment property 73,807 516,222
Trade and other receivables 625 3,315
Cash at bank 227,231 249,608
Trade and other payables (2,911) (10,176)
Bank borrowings - (90,822)
298,752 668,147
Less C share liability - (298,752)
Net assets 298,752 389,395
22. Share capital
Share capital represents the nominal value of consideration received by the Company for the issue of Ordinary shares.
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
Share capital
At beginning of period - -
Shares issued 3,500 -
At end of period 3,500 -
Number of shares issued and fully
paid
Ordinary shares of GBP0.01 each
At beginning of period 100 -
Shares issued 349,999,900 100
At end of period 350,000,000 100
The Company achieved admission to the premium listing segment of the Official List of the UK Listing Authority on 18 November 2016, raising GBP350 million. As a result of the IPO, at 18 November 2016, 349,999,900 shares at GBP0.01 per share have been issued and fully paid.
23. Share premium reserve
The share premium reserve represents the amounts subscribed for Ordinary share capital in excess of nominal value less associated issue costs of the subscriptions.
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
At beginning of period - -
Premium arising on shares issued 346,500 -
Share issue costs (7,000) -
Transfer to capital reduction reserve (339,500) -
At end of period - -
During the Board meeting on 15 November 2016, a resolution was passed authorising the cancellation of the share premium account and it was conditional upon the three following terms:
-- admission of the Ordinary shares to listing on the UK Listing Authority's Official List;
-- trading on London Stock Exchange's Main Market for listed securities; and
-- approval of the Court for the reduction of share capital.
In order to cancel the share premium account the Company needed to obtain a court order, which was received on 1 February 2017. An SH19 form was sent to Companies House with a copy of the court order on 1 February 2017 and the certificate of cancellation was issued by Companies House on 13 February 2017.
Upon cancellation of the share premium account, the funds were transferred to the capital reduction reserve and these funds are classified as amounts available for distribution.
24. Capital reduction reserve
The capital reduction reserve is a distributable reserve to which the value of the share premium has been transferred. Dividends can be paid from this reserve.
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
At beginning of period - -
Transfer from the share premium reserve 339,500 -
Dividends paid in the period (as per (7,875) -
note 14)
At end of period 331,625 -
25. Retained earnings/ (accumulated losses)
This reserve represents the profits and losses of the Group
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
At beginning of period (31) -
Profit/(loss) for the period 36,926 (31)
Dividends paid in the period (as per (2,625) -
note 14)
At end of period 34,270 (31)
26. Net asset value
Basic NAV per share is calculated by dividing net assets in the Consolidated Statement of Financial Position attributable to ordinary equity holders of the parent by the number of Ordinary shares outstanding at the end of the period.
Diluted NAV per share is calculated by adjusting net assets for the conversion of the C shares.
Net asset values have been calculated as follows:
31 March 17 November
2018 2016
Net assets (GBP'000) 369,395 (31)
Number of Ordinary shares in issue
at end of period 350,000,000 100
NAV - basic 105.54p (31,399.00)p
Net assets (GBP'000) 369,395 (31)
Adjust for the effect of the C shares 298,752 -
converting (GBP'000)
Adjusted net assets (GBP'000) 668,147 (31)
Number of Ordinary shares in issue
at end of period 350,000,000 100
Number of Ordinary shares that would
be issued on the conversion of C shares 283,065,815 -
Total 633,065,815 100
NAV - diluted 105.54p (31,399.00)p
27. Operating Leases
The Group is party to a number of operating leases on its investment properties with Registered Providers. The future minimum lease payments under non-cancellable operating leases receivable by the Group are as follows:
31 March 17 November
2018 2016
GBP'000 GBP'000
Amounts receivable
< 1 year 28,203 -
1-2 years 28,801 -
2-5 years 86,399 -
> 5 years 554,050 -
At end of period 697,453 -
Leases are direct-let agreements with Registered Providers for a term between 15 to 25 years with indexed linked annual rent reviews. All current leases are full repairing and insuring ("FRI") leases, the tenants are therefore obliged to repair, maintain and renew the properties back to the original conditions.
The following table gives details of percentage of annual rental income per Registered Provider:
% of total
annual rent
Westmoreland Supported Housing Limited 35.02
Falcon Housing Association CIC 14.44
First Priority Housing Association 10.66
Trinity Housing Association Limited 9.04
Inclusion Housing CIC 8.70
PAS Housing Association 6.04
New Walk Property Management CIC 4.59
Chrysalis Supported Association Limited 4.43
Harbour Light Assisted Living CIC 3.76
IKE Supported Housing Limited 1.89
Hilldale Housing Association Limited 1.43
Total 100.00
The Group is also party to a number of operating leases on its long leasehold properties. The ground rent payment commitments under these operating leases are negligible so the future minimum lease payments under these leases have not been disclosed in these financial statements.
28. Controlling parties
As at 31 March 2018 there is no ultimate controlling party.
29. Related party disclosures
The Directors are remunerated for their services at such rate as the Directors shall from time to time determine. The aggregate remuneration and benefits in kind of the Directors of the Company (in each case, solely in their capacity as such) in respect of the period ended 31 March 2018 payable out of the assets of the Company is not expected to exceed GBP200,000. At IPO the Chairman was entitled to a Director's fee of GBP35,000 per annum, and the other Directors of the Board to a fee of GBP30,000 per annum (with the exception of the chairman of the Audit and Management Engagement Committee who will was entitled to an additional fee of GBP2,500 per annum).
During the Board meeting on 26 July 2017, a resolution was passed authorising an increase to the fees of the Chairman to GBP50,000 per annum, the Chairman of the Audit and Management Engagement Committee and the other Directors to GBP36,000 per annum and GBP32,000 per annum respectively effective from 1 August 2017.
For the period from 18 November 2016 to 31 March 2018, fees of GBP190,000 were incurred and paid to the Directors.
The Directors held the following number of shares:
Director Ordinary shares C shares
Michael Wrobel Chairman 30,000 45,000
Peter Baxter Director 20,000 30,000
Audit and Management
Engagement Committee
Caroline Gulliver Chair 25,000 37,500
Alastair Moss Director 5,000 7,500
The Company and CHA (collectively the "Members") entered into a limited liability partnership agreement with Civitas Social Housing UK LLP ("LLP") on 1 November 2016 to govern the mutual rights and duties of the LLP and the Members of the LLP. Under the terms of the Limited Liability Partnership Agreement, the Investment Adviser was entitled to an amount of GBP980,000 as Priority Profit Share from the date of the IPO to 31 March 2017, which is included in the Investment Advisory fees of GBP5,773,000 mentioned in note 8. There was no consideration paid or due from the Members of the LLP. The limited liability partnership agreement and the original Investment Advisory Agreement were terminated on 1 April 2017 and were replaced by the current Investment Management Agreement.
30. Transactions with the Investment Adviser
On 1 November 2016 Civitas Housing Advisors Limited was appointed as the Investment Adviser of the Company.
For the period from 18 November 2016 to 31 March 2018, fees of GBP5,773,000 were incurred and paid to CHA.
As at 31 March 2018, no amounts (17 November 2016: GBP50,000) were due to/from CHA.
Following the admission of the Company's shares to the premium segment of the London Stock Exchange on 18 November 2016, CHA purchased 50,000 Ordinary shares in the Company.
31. Consolidated entities
The Group consists of a parent company, Civitas Social Housing PLC, incorporated in England and Wales and a number of subsidiaries held directly by Civitas Social Housing PLC, which operate and are incorporated in the UK, and Jersey.
The Group owns 100% equity shares of all subsidiaries listed below and has the power to appoint and remove the majority of the board of directors of those subsidiaries. The relevant activities of the below subsidiaries are determined by the board of directors based on the purpose of each company.
Therefore the Directors concluded that the Group has control over all these entities and all these entities have been consolidated within the consolidated financial statements.
A list of all subsidiary companies included within these consolidated financial statements are noted below. Indirectly held subsidiary companies are marked by an indentation in the table below.
Registered Country Ownership
Number Principal of incorporation %
Name Activity
Civitas Social Housing UK England
LLP* OC414370 Holding company & Wales 100%
Civitas Social Housing Finance England
Company 1 Limited ++ 10997707 Finance company & Wales 100%
Civitas Social Housing Jersey
1 Limited 124129 Holding company Jersey 100%
England
Civitas SPV1 Limited ++ 10518729 Property investment & Wales 100%
England
Civitas SPV2 Limited ++ 10114251 Property investment & Wales 100%
England
Civitas SPV11 Limited ++ 10546749 Property investment & Wales 100%
England
Civitas SPV15 Limited ++ 09777380 Property investment & Wales 100%
England
Civitas SPV33 Limited ++ 10546407 Property investment & Wales 100%
England
Civitas SPV35 Limited ++ 10588530 Property investment & Wales 100%
England
Civitas SPV25 Limited ++ 10791473 Property investment & Wales 100%
England
Civitas SPV27 Limited ++ 10883112 Property investment & Wales 100%
England
Civitas SPV38 Limited ++ 10738318 Property investment & Wales 100%
England
Civitas SPV39 Limited ++ 10547333 Property investment & Wales 100%
England
Civitas SPV40 Limited ++ 10738510 Property investment & Wales 100%
England
Civitas SPV41 Limited ++ 10738542 Property investment & Wales 100%
England
Civitas SPV50 Limited ++ 10775419 Property investment & Wales 100%
Civitas Social Housing Finance England
Company 2 Limited ++ 10997698 Finance company & Wales 100%
Civitas Social Housing Jersey
2 Limited 124876 Holding company Jersey 100%
England
Civitas SPV3 Limited ++ 10156529 Property investment & Wales 100%
England
Civitas SPV4 Limited ++ 10433744 Property investment & Wales 100%
England
Civitas SPV5 Limited ++ 10479104 Property investment & Wales 100%
England
Civitas SPV9 Limited ++ 10536388 Property investment & Wales 100%
England
Civitas SPV10 Limited ++ 10535243 Property investment & Wales 100%
England
Civitas SPV12 Limited ++ 10546753 Property investment & Wales 100%
England
Civitas SPV17 Limited ++ 10479036 Property investment & Wales 100%
England
Civitas SPV18 Limited ++ 10546651 Property investment & Wales 100%
England
Civitas SPV19 Limited ++ 10548932 Property investment & Wales 100%
England
Civitas SPV20 Limited ++ 10588735 Property investment & Wales 100%
England
Civitas SPV22 Limited ++ 10743958 Property investment & Wales 100%
England
Civitas SPV24 Limited ++ 10751512 Property investment & Wales 100%
England
Civitas SPV29 Limited ++ 10911565 Property investment & Wales 100%
England
Civitas SPV34 Limited ++ 10738381 Property investment & Wales 100%
England
Civitas SPV36 Limited ++ 10588792 Property investment & Wales 100%
England
Civitas SPV42 Limited ++ 10738556 Property investment & Wales 100%
England
Civitas SPV43 Limited ++ 10534877 Property investment & Wales 100%
England
Civitas SPV51 Limited ++ 10826693 Property investment & Wales 100%
England
Civitas SPV52 Limited ++ 10827006 Property investment & Wales 100%
Civitas Social Housing Finance England
Company 3 Limited ++ 10997714 Dormant & Wales 100%
Civitas Social Housing Jersey
3 Limited 124877 Holding company Jersey 100%
England
Civitas SPV6 Limited ++ 10674493 Property investment & Wales 100%
England
Civitas SPV7 Limited ++ 10536368 Property investment & Wales 100%
England
Civitas SPV8 Limited ++ 10536157 Property investment & Wales 100%
England
Civitas SPV13 Limited ++ 09517692 Property investment & Wales 100%
England
Civitas SPV14 Limited ++ 10479041 Property investment & Wales 100%
England
Civitas SPV16 Limited ++ 09917557 Property investment & Wales 100%
England
Civitas SPV21 Limited ++ 10631541 Property investment & Wales 100%
England
Civitas SPV23 Limited ++ 10746881 Property investment & Wales 100%
England
Civitas SPV28 Limited ++ 10895228 Property investment & Wales 100%
England
Civitas SPV37 Limited ++ 10738450 Property investment & Wales 100%
England
Civitas SPV44 Limited ++ 10588783 Property investment & Wales 100%
England
Civitas SPV26 Limited ++ 10864336 Property investment & Wales 100%
England
Civitas SPV30 Limited ++ 10956025 Property investment & Wales 100%
England
Civitas SPV31 Limited ++ 10974889 Property investment & Wales 100%
England
Civitas SPV32 Limited 11007173 Property investment & Wales 100%
England
Civitas SPV45 Limited ++ 10871854 Property investment & Wales 100%
England
Civitas SPV46 Limited ++ 10871910 Property investment & Wales 100%
England
Civitas SPV47 Limited ++ 10873270 Property investment & Wales 100%
England
Civitas SPV48 Limited ++ 10873295 Property investment & Wales 100%
England
Civitas SPV49 Limited 11031349 Property investment & Wales 100%
England
Civitas SPV53 Limited 11021625 Property investment & Wales 100%
England
Civitas SPV54 Limited 11039750 Property investment & Wales 100%
England
Civitas SPV55 Limited 11056455 Property investment & Wales 100%
England
Civitas SPV56 Limited 11056465 Property investment & Wales 100%
England
Civitas SPV57 Limited 11091444 Property investment & Wales 100%
England
Civitas SPV59 Limited 11111912 Property investment & Wales 100%
England
Civitas SPV60 Limited 11111908 Property investment & Wales 100%
England
Civitas SPV61 Limited ++ 10937662 Property investment & Wales 100%
England
Civitas SPV62 Limited ++ 10937528 Property investment & Wales 100%
England
Civitas SPV63 Limited ++ 10937805 Property investment & Wales 100%
England
Civitas SPV64 Limited ++ 10938411 Property investment & Wales 100%
England
Civitas SPV65 Limited ++ 10938467 Property investment & Wales 100%
England
Civitas SPV66 Limited ++ 10937898 Property investment & Wales 100%
England
Civitas SPV67 Limited ++ 10937929 Property investment & Wales 100%
England
Civitas SPV68 Limited ++ 10938269 Property investment & Wales 100%
England
Civitas SPV69 Limited 11142372 Property investment & Wales 100%
England
Civitas SPV70 Limited ++ 10770201 Property investment & Wales 100%
England
Civitas SPV79 Limited 11236544 Property investment & Wales 100%
England
Civitas SPV81 Limited 11192811 Property investment & Wales 100%
England
CSH SPV77 Limited 11166491 Property investment & Wales 100%
England
CSH SPV78 Limited ++ 11170099 Property investment & Wales 100%
England
FPI CO 151 Ltd ++ 10888639 Property investment & Wales 100%
England
FPI CO 157 Ltd** ++ 10888903 Property investment & Wales 100%
England
FPI CO 171 Ltd ++ 10938022 Property investment & Wales 100%
England
FPI CO 176 Ltd** ++ 10939044 Property investment & Wales 100%
England
FPI CO 177 Ltd ++ 10939075 Property investment & Wales 100%
England
FPI CO 178 Ltd** ++ 10939131 Property investment & Wales 100%
England
FPI CO 184 Ltd** ++ 10941377 Property investment & Wales 100%
England
FPI CO 192 Ltd ++ 11001855 Property investment & Wales 100%
England
FPI CO 193 Ltd ++ 11001834 Property investment & Wales 100%
England
FPI CO 195 Ltd ++ 11001998 Property investment & Wales 100%
* Dissolved 23 January 2018
** Registered address: 5 Old Bailey, London EC4M 7BA
Other than the four entities noted above by **, the registered addresses for the subsidiaries are consistent based on their country of incorporation and are as follows:
England & Wales entities: Beaufort House, 51 New North Road, Exeter, United Kingdom, EX4 4EP
Jersey entities: 12 Castle Street, St Helier, Jersey, JE2 3RT
++ These entities are exempt from the requirements of the Companies Act 2006 relating to the audit of individual accounts by virtue of Section 479A of that Act. These are all entities that have a year end prior to 31 March 2019.
32. Financial risk management
32.1. Financial instruments
The Group's principal financial assets and liabilities are those that arise directly from its operations: trade and other receivables, trade and other payables and cash and cash equivalents. The Group's other principal financial liabilities are bank borrowings, the main purpose of which is to finance the acquisition and development of the Group's investment property portfolio. The C share financial liability is also considered to be a financial instrument, the main purposes of which is to finance new acquisitions.
Financial assets are classified as loans and receivables and all financial liabilities are measured at amortised cost. All financial instruments were designated in their current categories upon initial recognition.
Set out below is a comparison by class of the carrying amounts and fair value of the Group's financial instruments that are carried in the financial statements:
Book value Fair value Book value Book value
31 March 31 March 17 November 17 November
2018 2018 2016 2016
GBP'000 GBP'000 GBP'000 GBP'000
Financial assets
Trade and other receivables(1) 2,573 2,573 50 50
Cash and cash equivalents 249,608 249,608 - -
Financial liabilities
Trade and other payables(2) 9,951 9,951 81 81
Bank borrowings 90,822 92,350 - -
C share liability 298,752 294,148 - -
(1 Excludes prepayments and debtors arising on rent smoothing)
(2 Excludes deferred income and tax liabilities)
The Group has two bank loans. One is a 10 year fixed rate loan of GBP52.5 million, provided by Scottish Widows and the other is a 3 year revolving credit facility variable rate loan of GBP40 million provided by Lloyds Bank. The fair value of the fixed rate loan is determined by comparing the discounted future cash flows.
The C share liability fair value is based on the quoted bid-market price at 31 March 2018 multiplied by the number of C shares in issue.
Financial risk management
The Group is exposed to market risk, interest rate risk, credit risk and liquidity risk in the current and future periods. The Board of Directors oversees the management of these risks. The Board of Directors reviews and agrees policies for managing each of these risks that are summarised below.
32.2. Market risk
The Group's activities will expose it primarily to the market risks associated with changes in property values and changes in interest rates.
Risk relating to investment in property
Investment in property is subject to varying degrees of risk. Some factors that affect the value of the investment in property include:
-- changes in the general economic climate;
-- competition from available properties;
-- obsolescence; and
-- Government regulations, including planning, environmental and tax laws.
Variations in the above factors can affect the valuation of assets held by the Group and as a result can influence the financial performance of the Group.
Risk relating to liquidity funds classified as cash and cash equivalents
The Group holds positions in two AAA rated liquidity funds that invest in a diversified range of government and non-government money market securities, which are subject to varying degrees of risk. Some factors that affect the value of the liquidity funds include:
-- the performance of the underlying government and non-government money market securities; and
-- interest rates.
Variations in the above factors can affect the valuation of assets held by the Group and as a result can influence the financial performance of the Group.
31.3. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Group's interest rate risk principally arises from long-term borrowings. To manage this, the Group has entered into a fixed rate bank loan and a variable rate bank loan. At 31 March 2018 57% of the Group's borrowings are at a fixed rate of interest.
The exposure of the Group to variable rates of interest is considered upon drawing of any new loan facilities, to ensure that the Group's exposure to interest rate fluctuations is within acceptable levels.
The Investment Adviser monitors the Group's exposure to any changes in interest rate on an ongoing basis, with the Board updated on a quarterly basis of the current exposure of the Group's loan facilities
As at 31 March 2018 if interest rates had been 200 basis points higher/(lower) with all other variables held constant the impact on profits after taxation for the period would be as follows:
31 March 17 November
2018 2016
GBP'000 GBP'000
Increase/(decrease) in profits due
to interest rates
200 basis points higher 3,429 -
200 basis points lower (7) -
The average effective interest rates of financial instruments at 31 March 2018 were as follows:
31 March 17 November
2016
2018 %
%
Bank borrowings - fixed rate 2.99360 -
Bank borrowings - variable rate 2.02125 -
Cash and cash equivalents 0.38205 -
32.4. Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risks from both its leasing activities and financing activities, including deposits with banks and financial institutions.
Debtors and accrued income represent rent due or accrued, these amounts due are diversified between a number of different Housing Associations of differing financial strength, see note 27 for details of the different counterparties. None of the Housing Associations have listed debt and as such do not have a credit rating however the diversified nature of this asset supports the credit quality.
The Group has policies in place to ensure that rental contracts are entered into only with lessees with an appropriate credit and operational history, and limits exposure to any one tenant. The credit risk is considered to be further reduced as the source of the rents received by the Group is ultimately provided by the government, by way of housing benefit and care provision, via a diverse range of Local Authorities.
For details of provisions for impairment please refer to note 17.
Credit risk related to financial instruments and cash deposits
One of the principal credit risks of the Group will arise with the banks and financial institutions. The Board of Directors believes that the credit risk on short-term deposits and current account cash balances is limited because the counterparties are banks considered to be of good credit quality. In the case of cash deposits held with lawyers, the credit risk is limited because the cash is held by the lawyers within client accounts at banks with high credit quality.
32.5. Liquidity risk
The Group manages its liquidity and funding risks by considering cash flow forecasts and ensuring sufficient cash balances are held within the Group to meet future needs. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of financing through appropriate and adequate credit lines, and the ability of customers to settle obligations within normal terms of credit. The Group ensures, through forecasting of capital requirements, that adequate cash is available.
The following table details the Group's maturity profile in respect of its financial instrument liabilities based on contractual undiscounted payments:
On demand <1 year 1-5 years > 5 years Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
31 March 2018
Trade and other
payables 9,951 - - - 9,951
Bank borrowings - 2,371 49,483 58,145 109,999
C share liability - - - - -
9,951 2,371 49,483 58,145 119,950
On demand <1 year 1-5 years > 5 years Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
17 November 2016
Trade and other
payables 81 - - - 81
81 - - - 81
The profile above assumes that the revolving credit facility loan will be rolled over and held to term. Included within the contracted payments is GBP17,971,000 (17 November 2016: GBPnil) of loan interest payable up to the point of maturity.
The C share liability and any interest accruing to the C shareholders will be settled by the issue of Ordinary shares.
33. Capital commitments
At 31 March 2018 the Company had funds committed totalling GBP4,902,000 concerning the acquisition of a group of four properties where the exchange of contracts has taken place but the purchases have not yet completed.
34. Post balance sheet events
Acquisitions
On 5 April 2018 a portfolio of four properties in Yorkshire, Lancashire and Somerset was acquired for GBP2.1 million.
On 6 April 2018 a property in Worcestershire was acquired for GBP0.5 million
On 20 April 2018 a portfolio of two properties in Stockport was acquired for GBP4.8 million
On 26 April 2018 a property in Dorset was acquired for GBP1.6 million
On 27 April 2018 a property in Yorkshire was acquired for GBP3.9 million
On 30 April 2018 a property in Cheshire was acquired for GBP0.4 million.
On 31 May 2018 contracts were exchanged for the purchase of a portfolio of 4 properties in the West Midlands for a consideration of GBP8.2 million.
On 31 May 2018 a property in Birmingham was acquired for GBP0.7 million.
On 7 June 2018 a portfolio of three properties in Kent and Durham was acquired for GBP4.8 million.
On 8 June 2018 a property in Essex was acquired for GBP3.5 million.
Dividends
On 10 May 2018 the Board declared a quarterly dividend in respect of the Ordinary shares for the three months to 31 March 2018 of 1.25 pence per Ordinary share. The dividend was paid on 8 June 2018 to holders of Ordinary shares on the register as at 18 May 2018. The dividend was paid as a REIT property income distribution ("PID").
On 10 May 2018 the Board declared a first dividend in respect of the C shares for the period since issue on 14 November 2017 to 31 March 2018 of 1.13 pence per C share. The dividend was paid on 8 June 2018 to holders of C shares on the register as at 18 May 2018. The dividend will be paid as an ordinary UK dividend.
Restructure and extension of borrowings
On 24 May 2018 the Company transferred property assets held indirectly through 17 specialist purpose vehicles to Civitas Social Housing Jersey 2 Limited. Subsequently the GBP40 million Revolving Loan Facility with Lloyds Bank was increased by GBP20 million. Additional security is provided by the property assets above.
Other Announcements
On 9 May 2018 the Company announced that all Civitas leases previously with First Priority had been assigned, on the same terms to Falcon Housing Association CIC ("Falcon"), an existing Civitas Housing Association partner. In addition, Civitas has acquired an option to increase the length of the leases to 40 years from their respective start dates, exercisable at Civitas' discretion. Post this assignment, the Company has a total of 86 properties leased to Falcon, which represents 12.7% of 31 December 2017 Gross Asset Value.
Company Statement of Financial Position
As at 31 March 2018
31 March 17 November 29 September
2018 2016 2016
Note GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Investment in subsidiaries 7 479,134 - -
- -
Current assets
Trade and other receivables 8 2,380 50 -
Cash and cash equivalents 9 241,924 - -
244,304 50 -
Total assets 723,438 50 -
Liabilities
Current liabilities
Trade and other payables 10 (4,082) (81) -
C shares financial liability (298,752) - -
(302,834) (81) -
Total liabilities (302,834) (81) -
Total net assets/(liabilities) 420,604 (31) -
Equity
Share capital 11 3,500 - -
Capital reduction reserve 331,625 - -
Retained earnings/(accumulated
losses) 12 85,479 (31) -
Total equity 420,604 (31) -
These financial statements were approved by the Board of Directors of Civitas Social Housing PLC and authorised for issue on 11 June 2018 and signed on its behalf by:
Michael Wrobel,
Chairman and Independent Non-Executive Director
11 June 2018
Company No: 10402528
The notes below are an integral part of these financial statements.
Company Statement of Changes in Equity
For the period from 18 November 2016 to 31 March 2018
Retained
Share premium Capital earnings/
Share reserve reduction (accumulated Total
capital GBP'000 reserve losses) equity
GBP'000 GBP'000 GBP'000 GBP'000
Balance at 29 September - - - - -
2016
Loss and total comprehensive
loss for the period - - - (31) (31)
Issue of Ordinary shares
Issue of share - - - - -
capital
Balance at 17 November
2016 - - - (31) (31)
Profit and total comprehensive
income for the period - - - 88,135 88,135
Issue of Ordinary shares
Issue of share
capital 3,500 346,500 - - 350,000
Share issue costs - (7,000) - - (7,000)
Cancellation of
share premium
reserve - (339,500) 339,500 - -
Dividends paid
Total interim
dividends for
the period ended
31 March 2018
(3.00p) - - (7,875) (2,625) (10,500)
Balance at 31 March
2018 3,500 - 331,625 85,479 420,604
Distributable reserves total GBP417,104,000 (17 November 2016: GBPnil)
The notes below are an integral part of these financial statements.
Notes to the Company Financial Statements
For the period from 18 November 2016 to 31 March 2018
1. Corporate information
These financial statements for the period from 18 November 2016 to 31 March 2018 comprise the results of the Company and were approved by the Board and authorised for issue on 11 June 2018.
Civitas Social Housing PLC ("the Company") was incorporated in England and Wales under the Companies Act 2006 as a public company limited by shares on 29 September 2016 with company number 10402528 under the name Civitas REIT PLC which was subsequently changed to the existing name on 3 October 2016.
The address of the registered office is Beaufort House, 51 New North Road, Exeter, EX4 4EP. The Company is registered as an investment company under section 833 of the Companies Act 2006 and is domiciled in the United Kingdom.
The Company did not begin trading until 18 November 2016 when the shares were admitted to trading on the LSE.
The Company's Ordinary shares are admitted to the Official List of the UK Listing Authority ("UKLA"), a division of the Financial Conduct Authority ("FCA"), and traded on the London Stock Exchange ("LSE").
The principal activity of the Company is to act as the ultimate parent company of Civitas Social Housing PLC and its subsidiaries (the "Group"), whose principal activity is to provide shareholders with an attractive level of income, together with the potential for capital growth from investing in a portfolio of social homes.
2. Basis of preparation
The financial statements have been prepared on a historical cost basis and in accordance with Financial Reporting Standard 100 Application of Financial Reporting Requirements ("FRS 100"), Financial Reporting Standard 101 Reduced Disclosure Framework ("FRS 101") and the Companies Act 2006 as applicable to companies using FRS 101.
In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs"), but makes amendments where necessary in order to comply with the Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.
In preparing these financial statements the Company has taken advantage of all disclosure exemptions conferred by FRS 101.
Therefore these financial statements do not include:
-- certain comparative information as otherwise required by EU endorsed IFRS;
-- certain disclosures regarding the Company's capital;
-- a statement of cash flows;
-- the effect of future accounting standards not yet adopted;
-- the disclosure of the remuneration of key management personnel; and
-- disclosure of related party transactions with other wholly owned members of Civitas Social Housing PLC.
In addition, and in accordance with FRS 101 further disclosure exemptions have been adopted because equivalent disclosures are included in the Company's consolidated financial statements. These financial statements do not include certain disclosures in respect of:
-- share based payments;
-- financial instruments; and
-- fair value measurement other than certain disclosures required as a result of recording financial instruments at fair value.
In the current period the Company has adopted FRS 100 and FRS 101. In the previous period the financial statements were prepared in accordance with IFRS.
This change in the basis of preparation has not materially altered the recognition and measurement requirements previously applied in accordance with IFRS and there are no changes to reported shareholder funds at 29 September 2016 or 17 November 2016 nor total comprehensive income for the period ended 17 November 2016 arising from the adoption of FRS 100 and FRS 101 for the first time.
The comparative information disclosed in the financial statements relates to the period from 29 September 2016 to 17 November 2016. The period covered by the comparative information varies in length and the level of activities and therefore is not entirely comparable to the current period.
The Company has taken advantage of the exemption in section 408 of the Companies Act 2006 not to present its own income statement or statement of comprehensive income.
Going concern
The financial statements have been prepared on a going concern basis.
Significant judgements and sources of estimation uncertainty
The key source of estimation uncertainty relates to the Company's investments in subsidiaries and joint ventures. In estimating the requirement for impairment of these investments, management make assumptions and judgements on the value of these investments using inherently subjective underlying asset valuations, supported by independent valuers.
3. Accounting policies
The financial statements of the Company follow the accounting policies laid out in the Group's consolidated financial statements along with the following accounting policies:
Investments in subsidiaries
The investments in subsidiary companies are included in the Company's Statement of Financial Position at cost less provision for impairment.
Loans to subsidiaries
Loans made to subsidiary companies are initially recognised at fair value and subsequently are measured at amortised cost.
4. Dividends
Details of dividends paid and proposed are included in note 14 of the Group's consolidated financial statements.
5. Employee information
Details of Directors' remuneration are included in note 6 of the consolidated financial statements. The Company had no employees during the period (17 November 2016 period: nil) other than the Directors.
6. Audit fees
Audit fees in relation to the Company's financial statements total GBP273,000 (17 November 2016 period: GBP11,000)
7. Investments in subsidiaries
From From
18 November 29 September
2016 to 2016 to
Shares in Loans to subsidiaries 31 March 17 November
subsidiaries GBP'000 2018 2016
GBP'000 GBP'000 GBP'000
At the beginning - - - -
of the period
Increase in investments 65,522 413,612 479,134 -
Loans cancelled 122,900 (122,900) -
Additions due
to internal group
restructure 296,115 - 296,115 -
Disposals due
to internal group
restructure (37,583) (258,532) (296,115) -
At the end of
the period 446,954 32,180 479,134 -
8. Trade and other receivables
31 March 17 November
2018 2016
GBP'000 GBP'000
Prepayments and other receivables 393 -
Amounts due from subsidiary companies 1,987 -
Amounts due from shareholders - 50
Total 2,380 50
Prepayments and other receivables amount above includes prepaid legal and professional fees of GBP366,000 that have been incurred in connection with the acquisitions yet to be completed.
9. Cash and cash equivalents
31 March 17 November
2018 2016
GBP'000 GBP'000
Cash held by solicitors 12,262 -
Liquidity funds 210,969 -
Cash held at bank 12,410 -
Cash and cash equivalents 235,641 -
Restricted cash 6,283 -
Total cash held at bank 241,924 -
10. Trade and other payables
31 March 17 November
2018 2016
GBP'000 GBP'000
Acquisition costs accrued 309 -
Retentions 2,806 -
Accruals 540 -
Dividends payable 427 -
Amounts due to shareholders - 81
Total 4,082 81
11. Share capital
Share capital represents the nominal value of consideration received by the Company for the issue of Ordinary shares.
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
Share capital
At beginning of period - -
Shares issued 3,500 -
At end of period 3,500 -
Number of shares issued and fully Number Number
paid
Ordinary shares of GBP0.01 each
At beginning of period 100 -
Shares issued 349,999,900 100
At end of period 350,000,000 100
The Company achieved admission to the premium listing segment of the Official List of the London Stock Exchange on 18 November 2016, raising GBP350 million. As a result of the IPO, at 18 November 2016, 349,999,900 shares at GBP0.01 per share have been issued and fully paid.
12. Retained earnings/(accumulated losses)
This reserve represents the profits and losses of the Company
From From
18 November 29 September
2016 to 2016 to
31 March 17 November
2018 2016
GBP'000 GBP'000
At beginning of period (31) -
Profit/(loss) for the period 88,135 (31)
Dividends paid in the period (2,625) -
At end of period 85,479 (31)
13. Controlling parties
As at 31 March 2018 there is no ultimate controlling party.
14. Related party transactions
For all related party transactions please make reference to notes 29-31 of the Group's consolidated financial statements.
Appendix 1
Notes to the calculation of EPRA and other alternative performance measures
1. EPRA Earnings
Earnings from operational activities.
31 March
2018
Profit after taxation (GBP'000) 36,926
Changes in value of investment properties
(GBP'000) (30,633)
EPRA Earnings (GBP'000) 6,293
Finance costs associated with the C share
financial liability (GBP'000) 2,792
Diluted EPRA earnings (GBP'000) 9,085
Weighted average number of shares in issue 350,000,000
Dilutive elements 281,065,815
Adjusted weighted average number of shares
in issue 633,065,815
EPRA Earnings per share (EPS) - basic 1.80p
EPRA Earnings per share (EPS) - diluted 1.44p
2. EPRA NAV
Net Asset Value adjusted to include properties and other investment interest at fair value and to exclude certain items not expected to crystallise in a long-term investment property business model.
31 March
2018
Net assets (GBP'000) 369,395
Effect of the exercise of C shares (GBP'000) 298,752
Diluted net assets (GBP'000) 668,147
Other adjustments (GBP'000) -
EPRA Net assets (GBP'000) 668,147
Number of ordinary shares in issue 350,000,000
Number of ordinary shares that would be
issued on the conversion of C shares 283,065,815
Adjusted number of shares to calculated
diluted NAV 633,065,815
EPRA Net assets per share 105.54p
3. EPRA NNNAV
EPRA NAV adjusted to include the fair values of (i) financial instruments, (ii) debt and (iii) deferred taxes.
31 March
2018
EPRA Net assets (per above) (GBP'000) 668,147
Adjustment to value bank borrowings at
fair value (GBP'000) (712)
EPRA NNNAV (GBP'000) 667,435
Number of ordinary shares in issue 350,000,000
Number of ordinary shares that would be
issued on the conversion of C shares 283,065,815
Adjusted number of shares to calculated
diluted NAV 633,065,815
EPRA NNNAV per share 105.43p
4. EPRA Vacancy Rate
Estimated Market Rental Value (ERV) of vacancy space divided by ERV of the whole portfolio.
31 March
2018
GBP'000
Estimated Market Rental Value (ERV) of -
vacant spaces
Estimated Market Rental Value (ERV) of
whole portfolio 28,543
EPRA Vacancy Rate 0%
5. Portfolio NAV
IFRS NAV adjusted to reflect investment property valued on a portfolio basis rather than individual asset basis.
31 March
2018
Net assets (GBP'000) 369,395
Adjustment for change to property valuation
(GBP'000) 2,911
Portfolio net assets (GBP'000) 398,505
Number of Ordinary shares in issue 350,000,000
EPRA Net assets per share 113.86p
6. Company Adjusted Earnings
Company Specific Earnings Measure which adds back finance costs associated with the C share financial liability.
31 March
2018
Profit after taxation (GBP'000) 36,926
Changes in value of investment properties
(GBP'000) (30,633)
EPRA Earnings (GBP'000) 6,293
Finance costs associated with the C share
financial liability (GBP'000) 2,792
Company Adjusted Earnings (GBP'000) 9,085
Weighted average number of shares in issue 350,000,000
EPRA Earnings per share (EPS) - basic 2.60p
NATIONAL STORAGE MECHANISM
A copy of the Annual Report and Financial Statements will be submitted shortly to the National Storage Mechanism ("NSM") and will be available for inspection at the NSM, which is situated at www.morningstar.co.uk/uk/NSM.
LEI: 213800PGBG84J8GM6F95
ENDS
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the website (or any website) is incorporated into, or forms part of, this announcement.
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 DGGDLGSBBGIB
(END) Dow Jones Newswires
June 12, 2018 02:00 ET (06:00 GMT)
1 Year Civitas Social Housing Chart |
1 Month Civitas Social Housing Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
