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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ct Property Trust Limited | LSE:CTPT | London | Ordinary Share | GB00B012T521 | 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% | 82.90 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
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TIDMCTPT
To: RNS
Date: 18 October 2022
From: CT Property Trust Limited
LEI: 231801XRCB89W6XTR23
* Portfolio ungeared total return* of 27.4 per cent for the year
* NAV total return* of 34.3 per cent for the year
* Dividend of 4.0 pence per share for the year, giving a yield* of 4.8 per
cent on the year-end share price
* Dividend cover* of 106.5 per cent for the year
* See Alternative Performance Measures
Chairman's Statement
The 12 months to 30 June 2022 saw a sustained period of strong performance for
UK commercial property, with the real estate capital and occupational markets
responding well as the worst of the pandemic seemed to be behind us. However,
as 2022 has progressed we have seen a marked shift in sentiment owing to the
growing economic concerns compounded by geopolitical events, inflationary
pressures and the cost-of-living crisis, increasing interest rates and a
decline in consumer confidence.
For the financial year, the Company has delivered a strong net asset value
('NAV') total return of 34.3 per cent and a NAV per share as at 30 June 2022 of
132.8 pence, up from 102.1 pence per share a year previously. The Company's
portfolio delivered a total return of 27.4 per cent over the 12 months, which
was was well ahead of the MSCI UK Quarterly Property Index ('MSCI' or 'Index),
aided by accretive capital investment and the completion of numerous successful
asset management initiatives.
Unfortunately, the Company's share price has not tracked the NAV performance
during the year. The share price total return for the year was 24.0 per cent
with the shares trading at 84.0 pence per share at 30 June, representing a
discount of 36.7 per cent to the NAV at the year end.
Property Market
The MSCI Index shows an all-property total return of 19.1 per cent in the 12
months to June 2022. The performance over this period continues to be driven by
the industrial, logistics and distribution ('industrial') sector, which
delivered an exceptional total return of 36.5 per cent in the year to June.
This return was underpinned primarily by strong investor demand, supported by
robust rental growth within an occupational market buoyed by the growth of
e-commerce and demand from companies shoring up their supply chains.
While the strong annual return figures illustrate the robust economic context
that has characterised the majority of the 12 month period, the unforeseen
invasion of Ukraine by Russia at the end of February 2022 dampened the obvious
positivity, and the good start to 2022 deteriorated as consumer confidence and
spending were impacted by the inflationary squeeze on real incomes and interest
rate increases. As a result, capital growth, whilst positive, notably slowed
towards the end of the financial year.
Portfolio Performance
Over the 12 month period, the Company's portfolio generated a total return of
27.4 per cent, posting significant outperformance over the MSCI Index return of
19.1 per cent. While capital growth of 21.8 per cent was the driver of the
Company's total return performance, the portfolio also maintained an income
advantage over the Index, delivering an income return of 4.7 per cent.
The sector allocations within the Company portfolio proved a significant
structural advantage as over-weight positions within the industrial and retail
warehousing sectors generated significant outperformance. These two sectors
account for 73.5 per cent of portfolio by capital value and the allocation of
further capital to both over the course of the financial year proved a highly
productive use of Company's resources.
The Company's industrial assets were once again the bedrock of performance,
delivering an exceptional total return of 41.0 per cent. The retail warehousing
assets lent further support with a total return contribution of 30.1 per cent.
In both cases, the sectors have seen strong investor demand on account of their
robust fundamentals. As a result, the Company's high relative weighting has
served to generate substantial capital growth over the year.
The period has seen the continuation of a strategy to reduce the Company's
exposure to the high street retail sector, which continues to face structural
challenge despite signs of gradual recovery. The sale during the year of the
retail asset at High Street, Guilford at a 14 per cent premium to valuation
illustrates the liquidity of the Company's holdings, which continue to maintain
a near-zero vacancy rate while delivering an attractive yield pick-up.
The Company's office assets have seen a more muted total return of 5.8 per
cent. As the UK's 'return to office' has continued to evolve, a clear
polarisation has emerged in favour of prime assets in core locations. The
Company's office portfolio is well-positioned in this regard, with over 50 per
cent of the exposure being in two prime south east assets (at period end). The
prime multi-let office holding at 14 Berkeley Street in London's Mayfair has
been a clear beneficiary of a 'flight to quality', with the asset becoming
fully occupied ahead of a post-period disposal, concluded in August 2022 for £
32.4 million. This asset was the third largest holding in the portfolio and was
sold for a premium of 5 per cent above the year end valuation. The disposal was
timed to take full advantage of both the asset and market cycles, which has
enabled the Company to secure a strong net initial yield of 3.1 per cent for
this quality asset and crystallise meaningful profit for the Company.
Borrowings and Cash
The Group had approximately £13.6 million of available cash at 30 June and an
undrawn revolving credit facility of £13.0 million. The Group's £90 million
long-term debt with Canada Life and the loan facility with Barclays do not need
to be refinanced until November 2026 and March 2025 respectively. As at 30 June
2022, the Group's net gearing was 22.1 per cent. The weighted average interest
rate on the Group's total current borrowings was 3.1 per cent. The Company
continues to maintain a prudent attitude to gearing. Since the year end, the
Company's cash resources have increased considerably following the Berkeley
Street disposal referred to above.
Share Buybacks
The Board and Manager believe that the current share price is not reflective of
the quality of the Company's portfolio, its long-term performance and robust
financial position. Since the year end, the Company has started to use some of
the cash generated from the sale of Berkeley Street to buy the Company's shares
at a discount rather than investment in new properties. This offers attractive
value for shareholders and will be both NAV and earnings enhancing. Purchases
of Ordinary Shares will only be made through the market for cash at prices
below the prevailing net asset value of the Ordinary Shares where the Directors
believe such purchases will enhance shareholder long-term value. At the time
of writing, the Company has bought back 6,325,000 Ordinary Shares since the
year-end at an average discount to the NAV of 36.1 per cent.
Dividends
Three interim dividends of 1.0 pence per share were paid for the year and a
fourth interim dividend was paid on 30 September 2022 at the same rate. The
Board will continue to keep the future level of dividends under review.
Manager Update
As previously announced Matthew Howard has succeeded Peter Lowe as the
Company's Lead Manager with effect from 19 July 2022. We thank Peter for his
considerable contribution to the Company's strong performance and wish him well
in his new role.
We are delighted to welcome Matthew as Lead Fund Manager. Matthew joins us with
an excellent track record in fund management and broad experience in UK real
estate investment. We are confident in Matthew's capabilities to drive the
strategy and performance of the Company.
Matthew is a Chartered Surveyor, and joined CT REP in July 2017, having spent
the previous six years at Hermes Investment Management (Now Federated Hermes).
He is a member of CT REP's Investment Committee and also acts as Fund Manager
of the RSA Shareholders Real Estate Fund.
Board Composition
As previously announced, Rebecca Gates retired as a Director of the Company on
31 August 2022. I would like to thank Rebecca for the contribution she has made
during her time on the Board. I will also step down from the Board later this
year having served on the Board for nine years. The process to identify two new
non-executive Directors, including a successor to me as Chairman has commenced
and we hope to be able to provide a further update on Board appointments in the
near future.
Management Fee Arrangements
The Board has been in discussion with the Manager with regards to the level of
management fee being charged. The current fee is 0.6 per cent per annum of the
total assets, including cash held provided that no fee is payable on any cash
held in excess of 5 per cent of the net assets of the Group. Following these
negotiations, it has been agreed that the rate of 0.6 per cent will reduce to
0.55 per cent with effect from 1 July 2022.
Environmental, Social and Governance ('ESG')
As a Board, we continue to give considerable attention to our ESG commitments
and will work closely with our Property Manager to meet and exceed
ever-evolving regulatory standards.
As a measure of our efforts in continuing to build our ESG agenda, we are
targeting further incremental improvements in our GRESB rating, which to this
point has seen year-on-year improvement since the Company first entered the
regime in 2018. GRESB provides validated ESG performance data and peer
benchmarks for investors and managers to improve business intelligence and
industry engagement.
The Company's pathway to Net Zero Carbon (NZC) emissions is a clear strategic
priority, and we have made excellent progress in developing our strategy over
the course of the year. Asset-level NZC audits have been completed across the
portfolio, itemising the interventions needed to achieve net zero emissions
from our real estate portfolio. Armed with this information, we can establish a
deliverable and tangible pathway to NZC based on informed asset-level strategy.
We aim to publish our target date and pathway later this year.
An ESG Report, detailing the current status and progress made on the portfolio
is available on the Group's website.
Outlook
The UK economy rebounded strongly in 2021, but growth has slowed in the face of
rising and entrenched inflation, persistent supply chain disruption and
elevated geopolitical risks. Policymakers are also taking steps that will
further constrain growth, with the Bank of England raising interest rates. It
seems increasingly likely that this will precipitate a recession in the UK and
a period of negative growth lies ahead.
At the time of writing, inflation in the UK was 9.9 per cent, just shy of the
10.1 per cent 40-year high seen in July and the Bank of England have revised
their estimate of peak inflation to 11.0 per cent. Double digit inflation is
expected to last for a year as households face an acute cost of living crisis
driven by increasing energy prices. 2023 should see inflation begin to edge
down with the unveiling of the government's energy price guarantee package
designed to shield households and businesses from soaring energy prices over
the next 6 months, followed by a review. The Bank of England has raised
interest rates to 2.25 per cent, with further increases anticipated as they
battle to tame inflation. Increases in the costs of financing will undoubtedly
slow real estate activity, while the ability of occupiers to withstand
inflationary pressures will be a key differentiator. There have been falls in
property valuations across all sectors since 30 June, with industrial
valuations seeing the largest declines and the Company's portfolio will not be
immune. Discounts in the UK REIT sector have widened substantially in recent
months and the current discount in our shares reflects that.
In uncertain markets, the quality of the underlying portfolio comes to the
fore. Our portfolio is characterised by assets in core locations, with long
term value in the residual and a quality tenant base, which has delivered
consistent long-term capital and income performance. As we move to the next
stage in the property market cycle, income will drive returns, while asset
resilience should protect long-term capital values. Consequently, the
portfolio's income advantage, sector exposures, geographical focus and low
vacancy rate stand us in good stead as we enter a period of economic
uncertainty.
Vikram Lall
Chairman
Manager's Review
Portfolio headlines
* The Company's portfolio produced a total return of 27.4 per cent over the
12 months to June 2022, versus the MSCI UK Quarterly Property Index ('the
Index') return of 19.1 per cent.
* The portfolio has outperformed the Index on income, capital and total
return over one, three, five, ten and eighteen years since inception to
June 2022.
* Two property disposals totalling £11.0m executed at a combined 9 per cent
premium to NAV, with subsequent redeployment into two accretive
acquisitions totalling £19.4m.
* Successful practical completion of major retail warehousing redevelopment
project at Enterprise Way, Luton generating exceptional returns.
* The transactional activity and capital deployment continues the Company's
focus on growth sectors and enhancing fund income return, demonstrated by
the purchases in Banbury (Retail Warehousing) and Heathrow (Industrial).
* Low vacancy rate of 2.6 per cent by Estimated Rental Value, down from 4.1
per cent over the year and considerably below the MSCI Index average of 7.8
per cent.
* Robust rent collection for the year of 99.1 per cent and 97.7 per cent
since the onset of the pandemic.
Property Market Review
The last 12 months have seen impressive performance from the UK real estate
market. The market generated a total return of 19.1 per cent over the year to
June 2022 (MSCI UK Quarterly Property Index, 'MSCI' or 'the Index') with
capital growth of 14.5 per cent the driving force of performance. £35.1 billion
was invested into the UK real estate market over the first six months of 2022,
representing a 17 per cent increase on the equivalent period in 2021.
As the calendar year progressed, mounting economic headwinds in the form of
geopolitical uncertainty, supply chain disruption, inflationary pressures and
the associated cost of living crisis have begun to weigh on wider market
sentiment. Investment volumes will slow over the second half of the year with
uncertainty cooling capital markets and leading to some repricing in the latter
part of 2022. As with all market cycles, there will be increased resilience
from quality assets in sustainable locations but we expect valuation pressures
across the full breadth of the UK commercial real estate markets.
Offices delivered a comparatively muted total return of 6.8 per cent over the
year. Occupier and investor demand for well located, high-quality offices have
proven robust at the expense of lower-quality, secondary or tertiary stock. As
the UK's 'return to office' has continued to evolve, office occupancy rates
have improved relative to recent periods, although working patterns have yet to
settle as companies continue to assess their real estate strategies.
The industrial sector has been supported over the past decade by the growth of
e-commerce across big-box and mid-box logistics, as well as urban sites
dedicated to last-mile delivery. E-commence now accounts for approximately 25
per cent of all retail sales in the UK, which is below the short-lived peak of
38 per cent during 2020 but demonstrates an overall upward trend compared to 19
per cent in 2019 prior to the pandemic. Consequently, the sector has produced
stellar total returns over the period of 36.9 per cent. In recent years,
occupier supply chains have become increasingly sophisticated and agile and,
given the economic backdrop, ensuring supply chain resilience has been of
particular focus for operators. Indeed, H1 2022 has seen industrial
occupational take up at near-record levels with vacancy rates in the UK
standing at an all-time low. Economic headwinds will inevitably present
challenges to occupiers but the supply and demand fundamentals are particularly
well placed going into this period, with tangible rental growth remaining a key
feature of the market at the time of writing.
Confidence within the Retail market has strengthened over the period, with the
sector generating a total return of 16.6 per cent. The traditional High Street
sector has seen some tentative signs of recovery in the form of rental growth
and yield compression, however performance from the wider Retail sector was
driven by the Retail Warehousing sub-sector. After some rebasing of rents and
occupier turnover in recent years, Retail Warehousing has demonstrated its
resilience and relevance as part of the consumer supply chain, particularly
'essential retail' such as DIY, pet stores, and discount retailers for example.
Confidence in the attractive occupational fundamentals has seen a weight of
capital chasing the sector leading to value growth and contributing to the
sub-sector's excellent total return of 31.8 per cent over the year. Occupiers
and consumers are attracted to the convenience, accessibility, parking and the
inherent flexibility of the real estate will continue to underpin the sector.
However, although pockets of rental growth have been evident, rental levels are
likely to come under pressure as consumer incomes and operator margins are
squeezed.
Portfolio Performance
The Company's portfolio delivered an ungeared total return of 27.4 per cent
over the twelve months, against the Index return of 19.1 per cent. Capital
growth from the portfolio of 21.8 per cent was the key driver of total returns,
supported by a robust income return of 4.7 per cent, with both metrics showing
material outperformance against the Index. Indeed, the Company portfolio has
outperformed the Index on income, capital and total return over one, three,
five, ten and eighteen years since inception.
The Company's high exposure to the Industrial and Retail Warehouse sectors
(73.5 per cent combined) has proven the key determinant of outperformance. Both
sectors have benefitted from a weight of capital driving material yield
compression, as investors have sought exposure to the strong occupational
fundamentals and favourable performance outlook.
Limited exposure to the more muted capital returns of the High Street retail
and Office sectors has also proven a structural advantage, while transactional
activity has further supported returns as we continue to position the portfolio
towards growth assets. The strategic disposals of two assets from the retail
and office portfolios were concluded at a combined premium of 9 per cent over
the preceding valuations, demonstrating the liquidity of the underlying
portfolio.
Despite capital outperformance, the portfolio has also sustained a significant
yield premium, delivering an income return of 4.7 per cent versus the Index
return of 4.1 per cent. Over the course of the year, the portfolio vacancy rate
fell from 4.1 per cent to 2.6 per cent by Estimated Rental Value (ERV),
comparing favourably to the Index average of 7.8 per cent. The sustained low
vacancy rate is testament to the quality and sectoral constitution of the
Company's portfolio.
Alongside a yield premium, the Company's income profile retains a lower
weighted credit risk than the MSCI Index, with high quality covenants a notable
feature of the Company's office portfolio. The resilience of the Company's
tenant base is borne out in the rent collection figures, which stand at 97.7
per cent over the 27 months since the onset of the pandemic. Indeed, rental
payment patterns have now normalised to pre-pandemic levels and collection
across the Company portfolio stands at 99.1 per cent for the twelve months to
June.
At the end of June 2022, the weighted average unexpired lease term stood at 6.1
years assuming all tenant breaks are operated. This improvement from 5.9 years
in June 2021 is on account of the successful conclusion of a number of
proactive asset management initiatives enhancing the portfolio's leasing
profile and supporting income and capital returns.
Industrial
With all five of the Company's top performing assets coming from the industrial
sector, combined with a 54.8 per cent exposure to the sector, it is no surprise
that this has again proven the key driver of Company performance. Over the
course of the year, the Company's assets outperformed their Index peers,
posting a total return of 41.0 per cent against the Index return of 36.9 per
cent.
The wider market generated capital growth of 32.5 per cent driven by a
significant weight of money seeking exposure to the sector's growth potential.
However, as industrial returns become primarily focussed on income, the ability
to crystallise market rental growth into income through asset management will
be key in delivering outperformance.
During the year we completed a number of value-accretive asset management
initiatives, which supported portfolio outperformance of 4.1 per cent over the
Index. Some of the most notable initiatives include:
* PCS Wireless, 1-2 Network, Bracknell - as Proctor & Gamble's lease of Unit
2 approached expiry, we agreed a surrender of their lease in exchange for a
significant premium. This allowed the unit to be near-simultaneously relet
on a 10-year lease to PCS Wireless at a rental level showing a 33 per cent
uplift to previous passing rent. Completion of this initiative generated a
16 per cent increase in the asset valuation.
* Booker Logistics, Echo Park, Banbury - the outstanding December 2020 rent
review of this 195,000 sq ft unit was settled at a 10 per cent uplift to
the passing rent and an 11 per cent premium to the ERV. The successful
conclusion of the rent review resulted in a 19 per cent uplift to
valuation, which was highly accretive to company performance given the
asset's relative scale as the second largest portfolio holding.
Retail and Retail Warehouses
The portfolio's Retail assets generated a total return of 23.8 per cent against
the Index return of 16.6 per cent, proving highly accretive to overall Company
performance. The driver of relative sector outperformance has been the
Company's high exposure to the Retail Warehousing sub-sector, which now
accounts for 18.8 per cent by portfolio capital value. Our holdings are
focussed on convenience/discount-led assets let off affordable rents, also
known as 'essential retail'. These sub-markets have benefitted from strong
investor appetite due to quality tenants and sustainable income streams
offering a yield advantage and supported by long term residual value. As a
result, portfolio Retail Warehouse holdings saw capital growth of 22.9 per cent
over the course of the year.
Across both Retail Warehousing and traditional High Street retail (the latter
accounting for 4.9 per cent of portfolio value), the long-term rationale for
holding retail assets is the yield advantage offered by the sector as well as
the resilient positioning of the real estate serving its core local market.
Over the course of the year, a number of successful initiatives have maintained
a near-zero void rate and contributed to the Retail portfolio's income
outperformance of 1.1 per cent relative to the Index:
* B&Q, Churchill Way, Nelson - as the tenant entered the final two years of
their lease, close tenant engagement resulted in an accretive lease
extension. The negotiations yielded a 10-year term certain at a rental
level ahead of expectation, alongside a commitment from B&Q to invest in
the fabric and appearance of the unit. The initiative contributed to an
increased property valuation of 42 per cent.
* Chobham Road, Sunningdale -Over the course of the 12 months to June, four
occupational agreements have been renewed, maintaining the passing rent,
improving the unexpired lease term and enhancing the capital value of the
asset.
* Bramingham Retail Park, Enterprise Way, Luton - in August 2021, the
redevelopment of the former Homebase reached practical completion,
delivering an Aldi food store and Costa drive-thru alongside a reconfigured
Homebase. The development was delivered comfortably within budget and was
de-risked through a pre-letting. The initiative has more than doubled the
rental income and delivered an annual IRR in excess of 16 per cent over the
development period.
Offices
The portfolio Office assets generated a total return of 5.8 per cent over the
12 months, lagging the Index return of 6.8 per cent.
The Company's Office portfolio is focussed primarily on the South East, with
the prime assets at Berkeley Street, London and County House, Chelmsford
accounting for more than 50 per cent by capital value at period end. Over the
course of the year, a clear polarisation has emerged within the Office sector
as both occupier and investor demand for prime assets in core locations showed
steady improvement throughout the period. In contrast, secondary and tertiary
assets have seen more subdued market conditions as occupiers and investors
alike grapple with structural changes and uncertainty brought about by the UK's
'return to office' alongside concerns surrounding ESG-led obsolescence.
Consequently, the Company's prime West End holding at 14 Berkeley Street proved
the key driver of sector returns. A series of successful asset management
initiatives on the multi-let holding saw the asset become fully occupied on
leases ahead of ERV. The outstanding rent review on the ground floor car
showroom was settled at a meaningful 19 per cent uplift to the passing rent.
The culmination of the asset business plan optimised both the leasing profile
and capital value, presenting an opportunity to extract significant profit via
a disposal. The sale of the asset concluded post-period on 5 August 2022 at a 5
per cent premium to the preceding valuation. Please see 'Investment Activity'
for further information.
Following the sale of Berkeley Street, the Company's exposure to the Office
sector fell to 15.2 per cent by capital value. While more subdued capital
growth on some of the portfolio's regional assets held back overall returns,
close tenant engagement has also yielded positive asset management outcomes
across the wider portfolio. We are also engaged in a number of initiatives
across the Office portfolio, where assets lend themselves to longer-term,
higher-value alternative uses on account of their attractive residual values.
Investment Activity
The Company completed a number of transactions during the period, continuing
the strategy of increasing exposure to growth sectors. The strategic
down-weighting from the High Street sector continued with the sale of High
Street, Guildford which had been identified as a potential disposal target on
account of long-term void risk. The sale was completed in April 2022 at a price
of £3.1 million reflecting a 14 per cent premium achieved over the most recent
valuation.
The Company also completed the disposal of the Office holding, Marlborough
House in St Albans in July 2021. The asset had been identified for disposal as
the obsolete office accommodation required wholesale redevelopment at a scale
and risk exposure incompatible with the Company's strategy. The asset was sold
for £7.9 million, an 8 per cent premium to the subsequent valuation.
Two strategic acquisitions were concluded in September 2021 for a combined £
19.4 million. The Company acquired a trade-led retail warehousing scheme in
Banbury for £7.325 million, occupied by Wickes and Topps Tiles. The asset met
with our investment rationale for the sector, offering a robust occupational
underwrite and strong residual value. Shortly thereafter, the Company acquired
a South East industrial asset for £12.1 million, adjacent to the existing
holding in Colnbrook, Heathrow. The asset offered excellent prospects for both
capital and income growth, alongside potential for value generation through
active asset management. The two assets were accretive to both capital and
income return at portfolio level and have represented a highly effective use of
Company cash reserves with the combined assets delivering a weighted total
return of in excess of 30 per cent since acquisition, to the financial year
end.
As referenced above, the disposal of the prime, multi-let office holding at 14
Berkeley Street was completed post-year end in August 2022 for £32.4 million.
The asset had been identified for sale primarily on account of its very
low-yielding nature, and potential to release significant cash reserves for
redeployment into more accretive initiatives. The sale was executed following
the successful culmination of the asset business plan and was timed to take
full advantage of both asset and market cycles, allowing us to generate a
highly competitive net initial yield of 3.1 per cent and a 5 per cent premium
to valuation. The proceeds from the sale have served to strengthen the Company
balance sheet, offering flexibility for capital reallocation to deliver further
shareholder value.
Outlook
The UK real estate market had a solid first 6 months of 2022. However, given
the weakening economic backdrop, geopolitical events, ensuing high inflation
and rising interest rates, it is no surprise that there is more caution amongst
the investor community going into the second half of the calendar year.
A UK recession now looks likely and growth will inevitably slow. The
expectation is that the principal impact will be on real estate pricing rather
than a wholesale slowdown in the occupational markets, a dynamic which we have
begun to witness post year end. Through periods of uncertainty investors will
look to protect income, which will be the primary driver of returns. The rising
cost of capital and increasing gilt yields mean that yields across the market
are under pressure. Industrial, where yields have reached historic lows over
the period, has already seen downward pricing pressure in the capital markets ,
particularly for secondary or tertiary assets and where the Industrial markets
became overbought.
In this economic context, the key differentiators for the Company will be
twofold. Firstly, as returns become income-led, relative performance will be
predicated on the ability of the tenant base to withstand inflationary
pressures. In this regard, the portfolio's sustained low vacancy rate, yield
advantage and high-quality covenants in strong locations will serve the Company
well, as was demonstrated through robust rent collection during the depths of
the pandemic. Secondly, in a lower-returning environment, portfolio resilience
will be critical in the generation of relative returns. The high weighting to
Industrial and Retail Warehousing position the Company relatively well, as the
two sectors are characterised by strong underlying occupational markets and
perform an essential function in the business and consumer supply chain.
The portfolio has a strong pipeline of asset management opportunities to
protect and create value for the Company. In addition, a strategic priority
will be to explore some asset rotation to enhance the portfolio's income return
and increase diversity. The current dislocation in real estate capital markets
should present opportunities to seek value and in accordance with the
portfolio's long term characteristics we will continue to target strong assets
in resilient locations to position the portfolio for further growth.
There is no doubt that we are entering a period of mounting economic headwinds
and the Company will not be immune to these pressures. Nevertheless, the
portfolio has been positioned to navigate challenging periods, as demonstrated
by the strong track record of outperformance, and I look forward to working
closely with the Board to build upon the Company's excellent foundations.
Matthew Howard
Columbia Threadneedle REP PM Limited
CT Property Trust Limited
Consolidated Statement of Comprehensive Income
Year ended 30 Year ended
June 2022 30 June
2021
£'000 £'000
Revenue
Rental income 17,869 16,836
Other income 607 -
Total revenue 18,476 16,836
Gains/(losses) on investment properties
Gains/(losses) on sale of investment properties 772 (1,304)
realised
Unrealised gains on revaluation of investment 71,767 12,926
properties
Total Income 91,015 28,458
Expenditure
Investment management fee (2,380) (1,932)
Other expenses (1,568) (2,154)
Total expenditure (3,948) (4,086)
Net operating profit before finance costs and
taxation 87,067 24,372
Net finance costs
Interest receivable 5 2
Finance costs (3,434) (3,341)
(3,429) (3,339)
Net profit before taxation 83,638 21,033
Taxation (235) (187)
Profit for the year / total comprehensive income 83,403 20,846
Basic and diluted earnings per share 34.6p 8.7p
All items in the above statement derive from continuing operations.
All of the profit and total comprehensive income for the year is attributable
to the owners of the Group.
CT Property Trust Limited
Consolidated Balance Sheet
30 June 2022 30 June 2021
£'000 £'000
Non-current assets
Investment properties 405,875 321,886
Trade and other receivables 4,734 3,292
410,609 325,178
Current assets
Trade and other receivables 2,418 3,431
Cash and cash equivalents 13,563 16,631
15,981 20,062
Total assets 426,590 345,240
Non-current liabilities
Interest-bearing bank loan (89,999) (89,722)
Trade and other payables (1,137) (890)
(91,136) (90,612)
Current liabilities
Trade and other payables (8,768) (8,631)
Interest-bearing bank loan (6,915) -
Tax payable (186) (187)
(15,869) (8,818)
Total liabilities (107,005) (99,430)
Net assets 319,585 245,810
Represented by:
Share capital 2,407 2,407
Special distributable reserve 177,161 177,161
Capital reserve 136,283 63,744
Revenue reserve 3,734 2,498
Equity shareholders' funds 319,585 245,810
Net asset value per share 132.8p 102.1p
CT Property Trust Limited
Consolidated Statement of Changes in Equity
For the year ended 30 June 2022
Special
Share Distributable Capital Revenue
Capital Reserve Reserve Reserve Total
£'000 £'000 £'000 £'000 £'000
At 1 July 2021 2,407 177,161 63,744 2,498 245,810
Profit for the year - - - 83,403 83,403
Total comprehensive
income for the year - - - 83,403 83,403
Dividends paid - - - (9,628) (9,628)
Transfer in respect of - - 72,539 (72,539) -
gains on investment
properties
At 30 June 2022 2,407 177,161 136,283 3,734 319,585
For the year ended 30 June 2021
Special
Share Distributable Capital Revenue
Capital Reserve Reserve Reserve Total
£'000 £'000 £'000 £'000 £'000
At 1 July 2020 2,407 177,161 52,122 916 232,606
Profit for the year - - - 20,846 20,846
Total comprehensive - - - 20,846 20,846
income for the year
Dividends paid - - - (7,642) (7,642)
Transfer in respect of - - 11,622 (11,622) -
gains on investment
properties
At 30 June 2021 2,407 177,161 63,744 2,498 245,810
CT Property Trust Limited
Consolidated Statement of Cash Flows
Year ended Year ended
30 June 2022 30 June 2021
£'000 £'000
Cash flows from operating activities
Net profit for the year before taxation 83,638 21,033
Adjustments for:
(Gains)/losses on sale of investment properties (772) 1,304
realised
Unrealised gains on revaluation of investment (71,767) (12,926)
properties
(Increase)/decrease in operating trade and other (429) 502
receivables
Increase in operating trade and other payables 384 2,241
Interest received (5) (2)
Finance costs 3,434 3,341
14,483 15,493
Taxation paid (236) (258)
Net cash inflow from operating activities 14,247 15,235
Cash flows from investing activities
Purchase of investment properties (20,737) -
Capital expenditure (1,547) (5,816)
Sale of investment properties 10,834 4,287
Interest received 5 2
Net cash outflow from investing activities (11,445) (1,527)
Cash flows from financing activities
Dividends paid (9,628) (7,642)
Bank loan interest paid (3,242) (3,161)
Bank loan drawn, net of costs - Barclays Loan 7,000 -
Net cash outflow from financing activities (5,870) (10,803)
Net (decrease)/increase in cash and cash equivalents (3,068) 2,905
Opening cash and cash equivalents 16,631 13,726
Closing cash and cash equivalents 13,563 16,631
CT Property Trust Limited
Principal Risks and Future Prospects
Each year the Board carries out a comprehensive, robust assessment of the
principal risks and uncertainties that could threaten the Group's success. The
consequences for its business model, liquidity, future prospects and viability
form an integral part of this assessment.
Risks faced by the Company include market, geopolitical, investment and
strategic, regulatory, tax structuring and compliance, financial, reporting,
credit, operational and environmental. The Board seeks to mitigate and manage
these risks through continual review, policy-setting and enforcement of
contractual obligations. It also regularly monitors the investment environment
and the management of the Group's property portfolio.
To mitigate investment and strategic risks the Board regularly monitors the
investment environment and the management of the Company's property portfolio.
The Manager seeks to mitigate the portfolio risks through active asset
management initiatives and carrying out due diligence work on potential tenants
before entering into any new lease agreements. All of the properties in the
portfolio are insured.
As well as considering current risks quarterly, the Board and the Investment
Manager carry out a separate assessment of emerging risks when reviewing
strategy and evaluate how these could be managed or mitigated. However, the
Board considers that the line between current and emerging risks is often
blurred and many of the emerging risks identified are already being managed to
some degree where their effects are beginning to impact.
The principal emerging risks identified are outlined below:
* Economic and geopolitical uncertainties leading to inflation and interest
rate increases. This has been compounded by the military invasion of
Ukraine by Russia which is clearly a humanitarian tragedy and is already
starting to have widespread economic consequences. The Manager expects
global markets to remain volatile. From a macro-economic perspective,
higher medium-term oil, gas and food prices alongside financial market
disruption and sanctions on Russia are likely to lead to an increase in
already elevated inflationary pressures, which will in turn weaken the
outlook for economic growth. There is also the risk of further interest
rate increases. A period of prolonged instability, with impacts for Europe
in particular, is now clearly a potential outcome. The situation is
uncertain, and changing rapidly, but this may affect real estate valuations
across the Group.
* The ESG agenda is a very prominent one and will continue to grow in its
importance to shareholders, future investors and our customers. The
increasing market attention being paid to climate risk, to net zero carbon
ambition and to social impact have been notable features of the evolving
agenda, and those need to be considered more explicitly in property
investment and management activity than has been the case previously.
Failure to respond to the evolving regulatory requirements and public
expectations could have a negative effect on property valuations and would
be reputationally damaging.
* There is the potential for structural change in the office market brought
on by Covid-19. Appetite for offices is finding its equilibrium with a
clear focus on higher quality space in central locations, as companies look
to provide employees with a more structured hybrid model of operation where
strong ESG and wellbeing credentials will be essential. This will be at the
expense of lower quality stock and the emergence of a two-tier market is
likely, rebasing both capital values and rents. There is uncertainty how
this will play out and it continues to be monitored.
* The impact of technology increasingly means that working practices and the
needs of society change very quickly which is an opportunity as well as a
risk, and it is important that we continue to keep abreast of what is
happening in this space. This has been compounded over the last two years
as the reliance on technology, particularly with regards to home working
has increased.
The highest residual risks encountered during the year, how they are mitigated
and actions taken to address these are set out in the table below.
Highest Residual Risks Mitigation Actions taken in the year
Portfolio Performance The underlying investment The Board reviewed the
Unfavourable markets, poor strategy, performance, Manager's performance at
stock selection, gearing and income quarterly Board meetings
inappropriate asset forecasts are reviewed with against key performance
allocation and the Investment Manager at indicators and the ongoing
underperformance against each Board Meeting. The strategy is reviewed and
the Index and/ or peer Company's portfolio is agreed.
group. This risk may be diversified and of a high Performance has been strong
exacerbated by gearing quality. Gearing is kept at during the last year.
levels. modest levels and is Following the strategic sale
Economic backdrop of monitored by the Board. of a number of properties in
inflationary pressures and The Manager provides recent years, particularly
increasing interest rates regular information on the smaller High Street retail,
(heightened by the Ukraine expected level of rental and reinvestment into
crisis). income that will be Industrial and Retail
generated from underlying Warehouses, the Company has
properties. The exposure to combined exposure to the
individual tenants is outperforming Industrial and
monitored and managed to Retail Warehouse sectors
ensure there is no over amounting to 73.5 per cent
exposure. of the portfolio. The
Manager has also ensured
that the tenant base is of a
Risk unchanged in the year high quality. Despite the
under review strong performance, Russia's
invasion of Ukraine and
continuing economic and
market uncertainty indicates
that this risk is unchanged.
.
Discount to NAV The discount is reported to Investors have access to the
The share price is trading and reviewed by the Board Board, the Manager and the
at a discount to NAV, in regularly. Share buybacks underlying team who will
common with the rest of the as a means of narrowing the respond to any queries they
sector. This widened discount or as an have on the discount. The
towards the year end with attractive investment for Manager and Broker meet
growing economic the Company are considered regularly with prospective
uncertainty both in the UK and weighed up against the and existing investors to
and globally. This risks. The position is try and improve demand for
imbalance, combined with monitored by the Manager the Company's shares. The
the recent share price and Broker on a daily basis level of discount is kept
volatility can diminish the and any material changes under constant review, but
attractiveness of the are investigated and it is difficult to control.
Company to investors. communicated to the Board Following the sale of a
more regularly. large property post
year-end, the Company
introduced share buybacks in
August 2022 to try and help
manage this. This continues
to be closely monitored
Risk unchanged in the year given the volatile share
under review price since the start of the
Ukraine crisis. The discount
has been wide since 2020 and
the risk is therefore
categorised as unchanged.
Service providers and The ancillary functions of The Audit and Risk Committee
systems security administration, accounting and the Board have regularly
Covid-19 and the and marketing services are reviewed the Company's risk
implementation of working all carried out by the management framework with
from home and increased Manager. The performance of the assistance of the
sophistication of cyber the Manager is kept under Manager.
threats have heightened continual review. Any Each key service provider
risks of loss through security issues would be provides a Report on
errors, fraud or control reported to the Board on a Internal Controls where
failures at service timely basis. available (AAF 01/20 or
providers or loss of data The Management Engagement similar). This will include
through business continuity Committee reviews the the controls relevant to
failure. performance of third-party cyber risk where
service providers on an appropriate. This report is
annual basis and the reviewed by the relevant
Manager keeps service parties and submitted to the
levels under constant Board on an annual basis.
review. The Manager has maintained
regular contact with its key
outsourced service providers
throughout the Covid-19
Risk unchanged in the year pandemic and received
under review assurances regarding the
continuity of their
operations.
Vigilance remains heightened
with this risk categorised
as unchanged.
ESG The Manager has a dedicated Regular reporting to the
Not recognising and acting team that works on this Board on progress with
upon any future area and has allocated implementing initiatives.
environmental, social and resources over recent years A policy on the Company's
governance risks which into building a net zero carbon pathway is
exist within the portfolio. comprehensive ESG plan and being formulated and will be
Failure to do so creates gathering accurate data. published on the Company
the risk that the portfolio The Manager also works with website.
no longer remains external consulting firms The Manager regularly looks
attractive to tenants and who specialise in this area to engage with tenants on
will not maintain its to scrutinise and validate ESG issues.
value. these plans. The Manager
There is increasing liaises with tenants
regulation and public wherever possible to obtain
interest relating to ESG data and to carry out any
issues and failure to be necessary enhancements.
proactive could cause
serious reputational
damage.
Risk unchanged in the year
under review
Viability Assessment and Statement
The Board conducted this review over a 5 year time horizon, a period thought to
be appropriate for a commercial property investment company with a long term
investment outlook, borrowings secured over an extended period and a portfolio
with a weighted average unexpired lease length of 6.1 years. The assessment has
been undertaken taking into account the principal risks and uncertainties faced
by the Group which could threaten its objective, strategy, future performance,
liquidity and solvency.
The major risks identified as relevant to the viability assessment were those
relating to a downturn in the UK commercial property market and its resultant
effect on the valuation of the investment portfolio, the level of rental income
being received and the effect that this would have on cash resources and
financial covenants. The Board took into account the illiquid nature of the
Group's portfolio, the existence of the long-term borrowing facilities, the
effects of any significant future falls in investment values and income
receipts on the ability to repay and re-negotiate borrowings, maintain dividend
payments and retain investors. These matters were assessed over an initial
period to September 2027, and the Directors will continue to assess viability
over 5 year rolling periods, taking account of foreseeable severe but plausible
scenarios.
In the ordinary course of business, the Board reviews a detailed financial
model on a quarterly basis, incorporating market consensus forecast returns,
projected out for 5 years. Based on conversations that have been held with
existing lenders to real estate companies, it is believed that it will be
possible to satisfactorily refinance existing loans. This model uses prudent
assumptions and factors in any potential capital commitments. For the purpose
of assessing the viability of the Group, the model is stress tested with
projected returns comparable to the most extreme UK commercial property market
downturn experienced historically. The model projects a worst case scenario of
an equivalent fall in capital and income values over the next two years,
followed by three years of zero growth.
The viability assessment modelling used the following assumptions:-
* 44 per cent capital falls in the next two years (based on the largest UK
commercial property market downturn experienced in recent history) followed
by zero growth for the next three years;
* tenant defaults of 15 per cent for the first year, followed by 9 per cent
for the following year before returning to normal levels;
* tenant lease breaks to be taken at the earliest opportunity, followed by a
substantial void period.
Even under this extreme model the Group remains viable with loan covenant tests
passed and the current dividend rate maintained.
Based on their assessment, and in the context of the Group's business model,
strategy and operational arrangements set out above, the Directors have a
reasonable expectation that the Group will be able to continue in operation and
meet its liabilities as they fall due over the 5 year period to September 2027.
For this reason, the Board also considers it appropriate to continue adopting
the going concern basis in preparing the Annual Report and Consolidated
Financial Statements.
CT Property Trust Limited
Going Concern
In assessing the going concern basis of accounting the Directors have had
regard to the guidance issued by the Financial Reporting Council. They have
reviewed detailed cash flow, income and expense projections in order to assess
the Group's ability to pay its operational expenses, bank interest and
dividends. The Directors have examined significant areas of possible financial
risk including cash and cash requirements and the debt covenants, in particular
those relating to loan to value and interest cover. The Directors have not
identified any material uncertainties which cast significant doubt on the
Group's ability to continue as a going concern for a period of not less than 12
months from the date of the approval of the consolidated financial statements.
The Board believes it is appropriate to adopt the going concern basis in
preparing the consolidated financial statements.
Directors' Responsibilities in Respect of the Annual Report & Consolidated
Accounts
We confirm that to the best of our knowledge:
* the consolidated financial statements, prepared in accordance with IFRS as
adopted by the European Union, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Group and the
undertakings included in the consolidation taken as a whole and comply with
The Companies (Guernsey) Law, 2008; and
* the Strategic Report (comprising the Chairman's Statement, Business Model
and Strategy, Promoting the Success of the Company, Key Performance
Indicators, Principal Risks and Future Prospects, Manager's Review,
Environmental, Social and Governance and Property Portfolio) and the Report
of the Directors' includes a fair review of the development and performance
of the business and the position of the Group and the undertakings included
in the consolidation taken as a whole together with a description of the
principal risks and uncertainties that it faces; and
* the financial statements and Directors' Report include details of related
party transactions; and
* the Annual Report and financial statements, taken as a whole, are fair,
balanced and understandable and provide the information necessary for
shareholders to assess the Group's position and performance, business model
and strategy.
On behalf of the Board
V Lall
Chairman
17 October 2022
CT Property Trust Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2022
1. The audited results of the Group which were approved by the Board on
17 October 2022 have been prepared on the basis of International Financial
Reporting Standards as adopted by the EU, interpretations issued by the IFRS
Committee, applicable legal and regulatory requirements of the Companies
(Guernsey) Law, 2008 and the Listing Rules of the Financial Conduct Authority
as well as the accounting policies set out in the statutory accounts of the
Group for the year ended 30 June 2022.
2. Financial Risk Management
The Group's financial instruments comprise cash, receivables, interest-bearing
loans and payables that arise directly from its operations.
The Group is exposed to various types of risk that are associated with
financial instruments. Financial risks are risks arising from financial
instruments to which the Group is exposed during or at the end of a reporting
period. Financial risk comprises market risk (including currency risk, price
risk and interest rate risk), credit risk and liquidity risk. There was no
currency risk as at 30 June 2022 or 30 June 2021 as assets and liabilities are
maintained in Sterling.
The Board reviews and agrees policies for managing the Group's risk exposure
and these policies are summarised below and have remained unchanged for the
year under review. These disclosures include, where appropriate, consideration
of the Group's investment properties which, whilst not constituting financial
instruments as defined by IFRS, are considered by the Board to be integral to
the Group's overall risk exposure.
The primary objectives of the financial risk management policies are to
establish risk limits, and then ensure that exposure to risks stays within
these limits.
Market risk
Market risk is the risk the fair value of future cash flows of a financial
instrument will fluctuate because of changes in market prices.
Sensitivities to market risks included below are based on change in one factor
while holding all other factors constant. In practice, this is unlikely to
occur, and changes in some of the factors may be correlated - for example,
changes in interest rate and changes in foreign currency rates.
The Group's strategy for the management of market risk is driven by the
investment policy. The management of market risk is part of the investment
management process and is typical of commercial property investment. The
portfolio is managed with an awareness of the effects of adverse valuation
movements through detailed and continuing analysis, with an objective of
maximising overall returns to shareholders.
Price Risk
The Group has no significant exposure to price risk as it does not hold any
equity securities or commodities. The Group is exposed to price risk other than
in respect of financial instruments, such as property price risk including
property rentals risk. Investment in property and property-related assets are
inherently difficult to value due to the individual nature of each property. As
a result, valuations are subject to substantial uncertainty. There is no
assurance that the estimates resulting from the valuation process will reflect
the actual sales price even where such sales occur shortly after the valuation
date. Such risk is minimised through the appointment of external property
valuers.
Interest rate risk
Some of the Group's financial instruments are interest-bearing. They are a mix
of both fixed and variable rate instruments with differing maturities. As a
consequence, the Group is exposed to interest rate risk due to fluctuations in
the prevailing market rate.
The Group's exposure to interest rate risk relates primarily to the Group's
borrowings. Interest rate risk on the £90 million Canada Life term loan is
managed by the loan bearing interest at a fixed rate of 3.36 per cent per annum
until maturity on 9 November 2026.
Credit risk
Credit risk is the risk that an issuer or counterparty will be unable or
unwilling to meet a commitment that it has entered into with the Group.
In the event of default by an occupational tenant, the Group will suffer a
rental shortfall and incur additional costs, including legal expenses, in
maintaining, insuring and re-letting the property. The Board receives regular
reports on concentrations of risk and any tenants in arrears. The Manager
monitors such reports in order to anticipate, and minimise the impact of,
defaults by occupational tenants.
The Group has a diversified tenant portfolio. The maximum credit risk from the
rent receivables of the Group at 30 June 2022 was £816,000 (2021: £839,000).
The maximum credit risk is stated after deducting an impairment provision of £
164,000 (2021: £583,000). Of this amount £nil was subsequently written-off and
£6,500 has been recovered.
Deposits refundable to tenants may be withheld by the Group in part or in whole
if receivables due from the tenant are not settled or in case of other breaches
of contract.
All of the cash is placed with financial institutions with a credit rating of A
or above. Bankruptcy or insolvency of these financial institutions may cause
the Group's ability to access cash placed on deposit to be delayed or limited.
Should the credit quality or the financial position of the banks currently
employed significantly deteriorate, the Manager would move the cash holdings to
another financial institution.
The Group can also spread counterparty risk by placing cash balances with more
than one financial institution. The Directors consider the residual credit
risk to be minimal.
Liquidity risk
Liquidity risk is the risk that the Group will encounter in realising assets or
otherwise raising funds to meet financial commitments. The Group's investments
comprise UK commercial property.
Property in which the Group invests is not traded in an organised public market
and may be illiquid. As a result, the Group may not be able to quickly
liquidate its investments in these properties at an amount close to their fair
value in order to meet its liquidity requirements.
The Group's liquidity risk is managed on an ongoing basis by the Manager and
monitored on a quarterly basis by the Board. In order to mitigate liquidity
risk the Group aims to have sufficient cash balances (including the expected
proceeds of any property sales) to meet its obligations for a period of at
least twelve months from the date of approval of the Consolidated Financial
Statements.
In certain circumstances, the terms of the Group's bank loans entitle the
lender to require early repayment, for example, if covenants are breached, and
in such circumstances the Group's ability to maintain dividend levels and the
net asset value attributable to the Ordinary Shares could be adversely
affected.
3. The fourth interim dividend of 1.00p was paid on 30 September 2022
to shareholders on the register on 9 September 2022. The ex-dividend date was 8
September 2022.
4. There were 240,705,539 Ordinary Shares in issue at 30 June 2022. The
earnings per Ordinary Share are based on the net profit for the year of £
83,403,000 and on 240,705,539 Ordinary Shares, being the weighted average
number of shares in issue during the year.
5. These are not full statutory accounts. The full audited accounts for
the year ended 30 June 2022 will be sent to shareholders in October 2022, and
will be available for inspection at Trafalgar Court, Les Banques, St. Peter
Port, Guernsey, the registered office of the Company. The full Annual Report
and Consolidated Financial Statements will be available on the Company's
website: ctpropertytrust.com
6. The Annual General Meeting will be held at the offices of Columbia
Threadneedle Investments, Quartermile 4, 7a Nightingale Way, Edinburgh, EH3 9EG
on 29 November 2022 at 1pm.
Alternative Performance Measures
The Company uses the following Alternative Performance Measures ('APMs'). APMs
do not have a standard meaning prescribed by GAAP and therefore may not be
comparable to similar measures presented by other entities.
Discount or Premium - The share price of an Investment Company is derived from
buyers and sellers trading their shares on the stock market. If the share price
is lower than the NAV per share, the shares are trading at a discount. This
usually indicates that there are more sellers than buyers. Shares trading at a
price above the NAV per share, are said to be at a premium.
2022 2021
pence pence
Net Asset Value per share (a) 132.8 102.1
Share price per 84.0 71.0
share
(b)
Discount (c = (b-a)/a) -36.7% -30.5%
(c)
Dividend Cover - The percentage by which Profits for the year (less gains/
losses on investment properties and non-recurring other income) cover the
dividend paid.
A reconciliation of dividend cover is shown below:
30 June 30 June
2022 2021
£'000 £'000
Profit for the year/total comprehensive income 83,403 20,846
Add: (Gains)/losses on sale of investment property realised (772) 1,304
Unrealised gains on revaluation of investment properties
Other income (71,767) (12,926)
(607) -
Profit before investment gains/losses & other income 10,257 9,224
(a)
Dividends 9,628 7,642
(b)
Dividend Cover (c=a/b) 106.5% 120.7%
(c)
Dividend Yield - The annualised dividend divided by the share price at the
year-end.
Net Gearing - Borrowings less net current assets (excluding current Barclays
loan) divided by value of investment properties.
30 June 30 June
2022 2021
£'000 £'000
Interest-bearing bank loans 96,914 89,722
Less net current assets excluding current (7,027) (11,244)
Barclays loan
Total (a) 89,887 78,478
Investment properties (b) 405,875 321,886
Net Gearing (c = a/b) 22.1% 24.4%
(c)
Ongoing Charges - All operating costs incurred by the Company, expressed as a
proportion of its average Net Assets over the reporting year. The costs of
buying and selling investments and derivatives are excluded, as are interest
costs, taxation, non-recurring costs and the costs of buying back or issuing
Ordinary Shares. An additional Ongoing Charge figure is calculated which
excludes direct operating property expenses as these are variable in nature and
tend to be specific to lease events occurring during the year.
30 June 30 June
2022 2021
£'000 £'000
Investment management fee 2,380 1,932
Other expenses 1,568 2,154
Less credit loss provision 425 (380)
Less other non-recurring costs (25) -
Total 4,348 3,706
(a)
Average net assets 286,154 236,243
(b)
Ongoing charges (c=a/b) 1.5% 1.6%
(c)
30 June 30 June
2022 2021
£'000 £'000
Investment management fee 2,380 1,932
Other expenses 1,568 2,154
Less direct operating property costs (1,012) (846)
Less credit loss provision 425 (380)
Less other non-recurring costs (25) -
Total 3,336 2,860
(a)
Average net 286,154 236,243
assets (b)
Ongoing charges excluding direct operating (c) 1.2% 1.2%
property costs (c=a/b)
Portfolio (Property) Capital Return - The change in property value during the
period after taking account of property purchases and sales and capital
expenditure, calculated on a quarterly time-weighted basis. This calculation
is carried out by MSCI Inc.
Portfolio (Property) Income Return - The income derived from a property during
the period as a percentage of the property value, taking account of direct
property expenditure, calculated on a quarterly time-weighted basis. This
calculation is carried out by MSCI Inc.
Portfolio (Property) Total Return - Combining the Portfolio Capital Return and
Portfolio Income Return over the period, calculated on a quarterly
time-weighted basis. This calculation is carried out by MSCI Inc.
Total Return - The return to shareholders calculated on a per share basis by
adding dividends paid in the period to the increase or decrease in the Share
Price or NAV. The dividends are assumed to have been reinvested in the form of
Ordinary Shares or Net Assets, respectively, on the date on which they were
quoted ex-dividend.
2022 2021
NAV per share at start of year - pence 102.1 96.6
NAV per share at end of year - pence 132.8 102.1
Change in the year +30.1% +5.7%
Impact of dividend reinvestments +4.2% +3.4%
NAV total return for the year +34.3% +9.1%
2022 2021
Share price per share at start of year - 71.0 56.0
pence
Share price per share at end of year - pence 84.0 71.0
Change in the year +18.3% +26.8%
Impact of dividend reinvestments +5.7% +6.1%
Share price total return for the year +24.0% +32.9%
All enquiries to:
Matthew Howard
Scott Macrae
Columbia Threadneedle Investment Business Limited
Tel: 0207 628 8000
The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited
PO BOX 255
Trafalgar Court
Les Banques
St Peter Port
Guernsey GY1 3QL
Tel: 01481 745001
END
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