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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| F&c Commercial Property Trust Limited | LSE:FCPT | London | Ordinary Share | GG00B4ZPCJ00 | 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% | 121.20 | 121.40 | 121.60 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
TIDMFCPT
To: RNS
Date: 24 April 2019
From: F&C Commercial Property Trust Limited (the "Company")
L.E.I. 213800A2B1H4ULF3K397
Results in Respect of the Year Ended 31 December 2018 (audited)
Financial Headlines
* Share price total return of -4.3 per cent*
* Portfolio total return of 4.0 per cent*
* Dividend cover decreased to 80.2 per cent from 83.1 per cent*
* Yield on year-end share price of 4.8 per cent*. Maintained dividend at 6.0
pence per share for the 13th successive year
*see Alternative Performance Measures
Chairman's Statement
Introduction
The UK direct commercial property market as measured by the MSCI Quarterly
Property Universe ('MSCI') delivered positive return of 6.2 per cent during
2018, driven primarily by an income return of 4.4 per cent. Total return
performance slowed as the year progressed, affected by muted economic growth,
the approach of the Brexit deadline and a marked deterioration in the
performance of retail property, particularly in the regions. The industrial and
distribution sector was again the stand-out performer, delivering another year
of double-digit total return. The office market performed broadly in line with
the all-property index. Investment activity remained resilient over the year
with both UK institutions and overseas buyers being net investors in UK
property.
Performance for the Year
The net asset value ('NAV') total return for the year was 3.3 per cent and the
share price total return was -4.3 per cent. The total return from the portfolio
was 4.0 per cent, lagging the MSCI Index. Performance is lower quartile
compared with the MSCI Index over three and five years but the longer-term
historic performance of the portfolio remains strong with MSCI rating it top
quartile over ten years.
The share price at the year-end was 124.6p, representing a discount of 10.9 per
cent to the NAV per share of 139.8p (compared to a 3.8 per cent discount as at
31 December 2017). We continue to monitor the level of discount which we
believe reflects both the uncertainties in the market surrounding Brexit and
the concerns over the retail sector.
The following table provides an analysis of the movement in the NAV per share
for the year:
Pence
NAV per share as at 31 December 2017 141.2
Unrealised decrease in valuation of direct property (0.7)
portfolio
Realised gain on sale of direct property 0.3
Other net revenue 5.0
Dividends paid (6.0)
NAV per share as at 31 December 2018 139.8
During 2018 the loss on capital for the Company was -0.1 per cent, compared to
MSCI which recorded a capital return of 1.7 per cent. The strongest
contributions came from the Alternatives and Industrial sectors.
In absolute terms, the most significant contributors to returns were:
* Winchester, Student Accommodation, Burma Road - reflecting the increased
income to be received following its annual rent review.
* London, St Christopher's Place Estate - continues to benefit from the high
number of completed and ongoing initiatives that reached fruition at different
stages during the period.
* Camberley, Building B, Watchmoor Park - sold during the year for GBP5.1
million, significantly ahead of the December 2017 valuation of GBP2.4 million.
* Manchester, Kings Street - successfully completed a number of leases; the
building is now fully let.
Negative contributions came from:
* Reading, Thames Valley One and Two, Thames Valley Park - all of building one
and majority of building two are void and were earmarked for sale. These sales
completed in January 2019 and the valuations at 31 December 2018 were adjusted
to reflect the final sale price. This sale removes the Company's largest void
and significantly reduces ongoing non-recoverable costs and capital
expenditure.
* Newbury, Newbury Retail Park - reflecting the fact that the park has a number
of Company Voluntary Arrangement's ('CVA's') in place. Poundworld has entered
administration and the unit is now vacant.
* Solihull, Sears Retail Park - Homebase has a CVA in place which will result
in their unit being vacated.
There have been a number of high profile CVA's, administrations and failures in
the retail sector over the past year and this has had a direct effect on the
Company's retail parks at Newbury and Solihull. New Look, Mothercare and
Homebase have all entered CVA's and Poundworld has gone into administration.
This has resulted in the downward pressure on rents and, in some cases, the
likely vacation of the properties.
The Manager has produced a number of plans to manage this situation which could
produce a positive outcome over the longer-term and negotiations are ongoing.
There will be a short-term fall in rental income and there has been a fall in
the market values of the properties to reflect this.
Borrowings and Loan Refinancing
The Group's available borrowings comprise a GBP260 million term loan with Legal &
General Pensions Limited, maturing on 31 December 2024, and both a GBP50 million
term loan facility and an undrawn GBP50 million revolving credit facility with
Barclays, available until June 2021. The Group's total loan to value, net of
cash, was 21.2 per cent at the end of the year. The weighted average interest
rate on the Group's total current borrowings is 3.3 per cent.
Dividends and Dividend Cover
Twelve monthly interim dividends, each of 0.5p per share, were paid during the
year. This maintains the annual dividend of 6.0p per share since 2006 and
provides a dividend yield of 4.8 per cent based on the year-end share price.
Barring unforeseen circumstances, the Board intends that dividends in 2019 will
continue to be paid monthly at the same rate.
The Company's level of dividend cover for the year (excluding capital gains and
losses on properties) was 80.2 per cent. This was lower than the 83.1 per cent
cover achieved last year. While the purchase of the office building at
Cathedral Square, Bristol in December 2017 increased the level of rental income
by GBP1.4 million in 2018, there have been a number of development initiatives
ongoing during the year which have led to a short-term negative impact on the
level of rents received, as these buildings have been empty.
The key projects have been at Cassini House in London and an office at
Edinburgh Park. The combined reduction in rent against 2017 for these
properties amounted to GBP1.3 million, although the buildings will be income
producing once the developments are completed. Another negative factor has been
the level of tax payable in the current year which continues to increase.
REIT Conversion
On 23 April 2019, the Company announced a proposal to take the necessary steps
to join the UK REIT regime. The Group is now subject to a rising level of
taxation and this will increase substantially following the policy changes
announced in the Autumn Budget 2017. Non-UK resident companies that have UK
property income, such as the property holding subsidiaries in the Group, will
be charged UK corporation tax from 6 April 2020, rather than being subject to
UK income tax as they are at present. In addition, the Board notes that from 6
April 2019 non-resident landlords who invest in UK properties, such as the
Group as it is currently structured, will be brought into the UK Capital Gains
tax regime.
In the light of the current and continuing increase in tax, the Board has
determined that action is necessary to preserve the ongoing effectiveness of
the group from a UK tax perspective in advance of the above changes.
Accordingly, the Board has proposed that the Company takes the necessary steps
on behalf of the Group in order to achieve real estate investment trust
('REIT') status.
In order to facilitate the Group qualifying as a REIT as per the Circular
issued to shareholders in April 2019, certain amendments to the Company's
articles of incorporation are required. These changes address the REIT rules
regarding the payment of dividends to substantial shareholders (being a
shareholder who holds 10 per cent or more of the Company as more fully
described in the circular) and the requirement that the Company and its Group
are UK resident for tax purposes. An extraordinary general meeting will be held
on 30 May 2019 immediately prior to the Annual General Meeting, to consider
these proposals and, if passed, the Company will enter the REIT regime from 3
June 2019. The adoption of REIT status by the Group will alter the
shareholders' tax positions in respect of the receipt of dividends made under
the REIT regime. On the basis that REIT status is achieved with effect from 3
June 2019, the first distribution that the Company could make under the REIT
regime would relate to profits earned from 31 May 2019. The amount and payment
date of such property income distribution will be announced in October 2019.
For more detail, a copy of the Circular can be downloaded from the Company's
website at fccpt.co.uk.
Change of Company Name
In 2014 the Company's investment manager, F&C Investment Business Limited, was
acquired by BMO ('Bank of Montreal'). BMO transitioned the majority of its
remaining F&C branded products and funds to BMO in November 2018. Its savings
plans, through which many of our shareholders invest, have also aligned to the
BMO brand. The Board is therefore recommending that the Company changes its
name from F&C Commercial Property Trust Limited to BMO Commercial Property
Trust Limited and is seeking shareholder approval at the Annual General
Meeting. If approved, this renaming will take effect on 3 June 2019.
Board Composition
Having served nine years on the Board, I will step down as Chairman of the
Company and retire from the Board at the Annual General Meeting. Martin Moore,
Senior Independent Director of the Company, will take over as Chairman and Paul
Marcuse will take on the role of Senior Independent Director.
If the REIT conversion proposals are approved, Peter Cornell and David Preston,
both Guernsey directors, will stand down from the Board with effect from 30 May
2019 and Linda Wilding, who is UK based, will join the Board. Both Peter and
David joined the Board in April 2015 and I would like to thank them for their
valuable contribution over the last four years.
Linda qualified as a chartered accountant with Ernst & Young, before working in
the private equity division of Mercury Asset Management from 1989 to 2001,
rising to the position of Managing Director. She has served as a non-executive
director (including as Chairman) on a number of boards. She is currently a
non-executive director of UDG Healthcare plc and Electra plc. She was a
non-executive director and latterly chair of Corin plc from 2006 to 2012 and
was a non-executive director of Touchstone Innovations plc until 2017.
John Wythe, who was appointed in September 2018, will stand for election at the
Annual General Meeting of the Company. John brings considerable experience of
the property market as Chairman of the Trustees of The Portman Estates after a
long career with Prudential Property Investment Managers Ltd, now M & G Real
Estate.
Following the above changes, the Board will consist of five Directors, three
male and two female, four of which will be based in the UK and one in Guernsey.
Responsible Property Investment
I am particularly pleased with the progress that has been made with our
Responsible Property Investment (RPI) strategy and the positive engagement we
have had with a number of our key shareholders in this area.
The publication of the inaugural RPI Report for the Group for 2017 was a
significant milestone in our pledge to drive greater transparency into our
performance on material Environmental, Social & related Governance (ESG)
factors and we have had some excellent feedback on it from shareholders. We
continue to place considerable emphasis on our RPI commitments and are pleased
to provide a further summary of progress in the Annual Report, complemented by
our RPI Report 2018 which will be available on the Company's website and gives
greater detail and insight on our performance against relevant metrics.
Annual General Meeting
The Annual General Meeting will be held at 12.30pm on Thursday 30 May 2019 at
Trafalgar Court, Les Banques, St. Peter Port, Guernsey, GY1 3QL.
Outlook
Investors have remained cautious given the uncertainty in the macro-economic
and political spheres, with income protection a major consideration. We would
expect this to persist as Brexit and its aftermath unfolds and should global
growth slow and UK interest rates rise. We anticipate further problems in the
retail sector which will drive valuations lower. The next two years are
therefore predicted to be a period of relative weakness. However, the market is
expected to be supported by its income return and continued interest from
overseas buyers. Over the longer-term, we are forecasting a modest recovery
with total return performance underpinned by the income return.
Notwithstanding the uncertainties, the Company has a strong financial structure
and a high quality portfolio where the priority continues to be to invest in
and complete asset management initiatives within the portfolio and to exploit
any external opportunity to provide a dependable and long-term rental income.
I leave your company in the safe and experienced hands of my successor, the
rest of the Board and the BMO management team. It only remains for me to
express my appreciation to the Board, the manager and shareholders during my
time as chairman for their contributions and support.
Chris Russell
Chairman
Managers' Review
Property headlines over the year
* 12 month total return of 4.0* per cent.
* Significant capital projects at Nevis and Ness House ,Edinburgh Park;
Cassini House, London and at the St Christopher's Place Estate.
* Completed the strategic office sales of Building B, Watchmoor Park,
Camberley and two office buildings in Reading in January.
* Purchase of an industrial unit in Estuary Business Park, Liverpool.
*see Alternative Performance Measures
2018 Property Market Review
The market total return for the year, as measured by the MSCI UK Quarterly
Property Universe, was 6.2 per cent. A relatively subdued economic growth
out-turn, coupled with the uncertainty surrounding Brexit acted to constrain
occupier and investor sentiment and as a consequence rental growth and capital
growth decelerated in the year, although both remained positive at 0.5 per cent
and 1.7 per cent respectively. There was some modest yield compression
(signalling market strength) during the year at the all-property level.
Key Benchmark Metrics - All Property
2018 2017
% %
Total Returns 6.2 10.3
Income Return 4.4 4.6
Capital Return 1.7 5.4
Open Market Rental Value Growth 0.5 2.2
Initial Yield 4.5 4.7
Equivalent Yield 5.5 5.6
Source: MSCI Inc
Investment activity in 2018 was lower than in the previous year but well above
the long-term average, supported by overseas buying and net investment by
institutions and local authorities.
Performance in 2018 was highly polarized by sector. As in the previous year,
performance was driven by industrials and distribution, with a 16.4 per cent
total return. This sector has now delivered double-digit performance in five
out of the past six years being underpinned by strength in both occupier and
investor demand, pushing annual rental growth up to 4.6 per cent and driving
the equivalent yield (the UK property markets measure of current yield) to
below the all-property average at 5.3 per cent. The reverse was true for retail
where a succession of Company Voluntary Arrangements ('CVAs'), store portfolio
rationalisations and business failures affected both occupier and investor
sentiment. Retail rental growth in the year was negative and yields shifted
outwards. Central London retail delivered total returns broadly in line with
the all-property average at 6.1 per cent, which is disappointing by recent
standards. However, other parts of the retail market were much weaker with
regional high streets, shopping centres and retail warehousing all recording
negative annual total returns. The weakness in the sector is now affecting many
major towns and large retailers. The problems related to the sector are
structural, involving elements such as the growth of online sales, high
business rates, excess and rising supply, increasing retailer costs and profit
margin pressure. This will take time to resolve and pricing will continue to be
affected.
The office market delivered a total return of 6.4 per cent with Rest of UK
offices out-performing whilst the West End market was relatively weak. City
offices surprised positively, with overseas buyers seemingly little troubled by
Brexit threats. Alternatives recorded an above average 7.4 per cent total
return in the year, supported by strong investor sentiment for longer let
leases with a linkage to inflation. This was further strengthened by investment
from balanced portfolio's looking to diversify and the growth of specialist
single strategy funds.
Overall the year was one of consolidation, which saw all-property total returns
broadly in line with the historic norm. Domestic investors remained cautious,
focusing on long-term secure income streams often linked to the alternative
sector and prime property. The UK commercial property market has delivered ten
consecutive years of positive total returns supported by relatively attractive
income returns which are not available from UK gilts and in certain sectors
from overseas investors. There are headwinds facing this long-lived cycle and a
reversion to the longer-term average return dominated by income is in prospect.
Valuation and Portfolio
Total Portfolio Performance
2018 2017
No of properties 38 37
Valuation (GBP'000) 1,430,190 1,418,612
Average Lot Size (GBP'm) 37.6 38.3
Portfolio Benchmark
(%) (%)
Portfolio Capital Return (0.1) 1.7
Portfolio Income Return 4.1 4.4
Portfolio Total Return 4.0 6.2
The total return from the portfolio over the year was 4.0 per cent compared to
the MSCI UK Quarterly Property Universe of 6.2 per cent. The strongest
performance in the portfolio was attributable to the student accommodation at
Winchester whilst offices and retail in the Rest of UK outperformed their
comparative.
The most significant negative impact to returns was due to the valuation
movements on the Company's retail warehouses, with the valuation of Solihull
falling by 13.0 per cent and Newbury by 22.8 per cent. Initiatives are in place
to address the impact of last year's CVA's. There was also a negative impact
from the valuation write-downs on the office sales that were undertaken during
the year and relative underperformance as a result of an underweight position
to Industrial South East.
Reclassification of Sector Weightings
A key theme in the property sector over 2018 was an increase in the number of
CVA's or administrations among retail businesses. Historically, the Company's
investments in the St. Christopher's Place Estate and at Wimbledon Broadway
have been shown as retail in their entirety, consistent with how they are
classified within the MSCI property index. At a time when shareholders and
analysts are now scrutinising any portfolio's retail exposure, it is important
to provide more detail as to the true retail exposure. St. Christopher's Place
comprises approximately 150 lettable units made up of over 50 shops and
restaurants, 40 office suites and 60 residential apartments. Wimbledon Broadway
comprises a number of retail units, a cinema, a gym and some food and beverage
units. These assets fall into the following underlying segments:
Sector Analysis St. Christopher Place & Wimbledon
% of capital
value as at 31
Dec 2018
Retail 47.6
Food & Beverage 20.6
Residential 15.0
Office 10.7
Leisure 6.1
Source: BMO REP Asset Management plc
Residential and leisure will now be more appropriately classified under the
alternatives sector category. Food and beverage will remain in the retail
category.
The effect that this reclassification had on the weightings reported in 2017 is
as follows:
Effect of Sector Reclassification
% of total property portfolio
Reclassified
2017 2017
(%) (%)
Offices 39.2 36.2
Retail 22.4 31.0
Retail Warehouses 13.1 13.1
Industrial 16.9 16.9
Alternative 8.4 2.8
Source: BMO REP Asset Management plc
Sector Analysis (% of total property portfolio)
Reclassified
2018 2017
(%) (%)
Offices 39.9 39.2
Retail 22.4 22.4
Retail Warehouses 10.9 13.1
Industrial 17.8 16.9
Alternative 9.0 8.4
Source: BMO REP Asset Management plc
Geographical Analysis (% of total property portfolio)
2018 2017
(%) (%)
South East 23.4 25.2
London - West End 35.3 34.3
Eastern 2.1 2.0
Midlands 11.8 12.5
Scotland 12.3 11.8
North West 11.4 10.6
Rest of London 1.4 1.4
South West 2.3 2.2
Source: BMO REP Asset Management plc
Income analysis
Although the portfolio has suffered a number of retailer defaults it still
benefits from a secure income stream. The void rate, excluding properties being
developed or extensively refurbished is 8.5 per cent. However, as a result of
the office sales that completed in January 2019, this would equate to 5.1 per
cent at year end.
Lease Expiry Profile
At 31 December 2018 the weighted average lease length for the portfolio,
assuming all break options are exercised, was 7.1 years (2017: 7.3 years)
% of leases expiring (weighted by rental 2018 2017
value) (%) (%)
0 - 5 years 44.4 46.9
5 - 10 years 30.2 27.3
10 - 15 years 17.1 15.6
15 - 25 years 8.3 10.2
Source: BMO REP Asset Management plc
Covenant Strength (% of income by risk bands)
2018 2017
(%) (%)
Unscored and ineligible 5.9 5.0
Maximum 10.3 4.0
High 2.1 1.8
Medium to High 3.2 2.5
Low to Medium 4.5 4.8
Low 19.9 16.8
Negligible and Government 54.1 65.1
Source: IRIS Report, MSCI Inc
The largest occupiers, based as a percentage of contracted rent, as at 31
December 2018, are summarised as follows:
Income Concentration
Company name % of Total Income
Apache North Sea Limited 4.5
GB Gas Holdings Limited 4.4
Virgin Atlantic Limited 4.2
Kimberly-Clark Limited 4.1
Nexen Petroleum UK Limited 3.8
JP Morgan Chase Bank 3.4
Mothercare UK Limited 3.1
University of Winchester 3.0
DHL Supply Chain Limited 2.8
Transocean Drilling UK Limited 2.7
Total 36.0
Source: BMO REP Asset Management plc
Retail
Retailers have endured an extremely challenging year because of reasons well
publicised in the UK's media. This is resulting in a concentrated period of
failures, administrations and CVAs and as a consequence many retailers are
demanding lower rents and flexibility in leasing. The Company has no exposure
to shopping centres and limited exposure to the High Street. However, the
Company's retail parks in Newbury and Solihull have been impacted by the stress
in the sector with New Look, Mothercare and Homebase entering into CVA's and
Poundworld into administration. Specifically, at Newbury the CVA's have
resulted in New Look occupying one unit at a 20 per cent rent reduction,
Homebase on 35 per cent rent reduction, and Mothercare on a 70 per cent rent
reduction (with the intention to close the unit within twelve months of the
CVA). At Solihull, Homebase have paid the full rent to year end, but the store
closed at end of February 2019. In total, the rent at Newbury has reduced by GBP
740,050 per annum and at Solihull by GBP1.04 million per annum.
We have identified a number of initiatives to attract new retailers to the
properties, but these do require planning approvals and advanced negotiations
with key retailers are taking place. Planning applications to facilitate new
lettings have been submitted but have to date not been determined by the
appropriate Local Authorities. It is hoped these consents will be forthcoming
during the first half of 2019, which will then allow the commencement of asset
management initiatives, including a variety of development, refurbishment and
the reconfiguration of units, as well as allowing lettings to contract.
St Christopher's Place
Our asset management strategy continues to drive income growth by way of
refurbishment, selective relettings, the repositioning of James Street and the
delivery of a carefully curated line up of retail and restaurants.
Additionally, a number of apartments and offices have been refurbished during
the year, all of which have been successfully re-let.
On James Street, two units have been refurbished with lettings contracted to
Caprice Holdings (Harry's Bar) and Homeslice.
Over the next twelve to twenty-four months, there are meaningful opportunities
affecting eleven buildings in total, to refurbish and, in some cases, redevelop
buildings, subject to securing planning consents and vacant possession.
There have been two CVAs on the Estate, Carluccios and Aldo, but in both cases
the units were retained and the contracted rent unaffected.
Industrial Purchase
In May 2018, the Company completed the purchase of Hurricane 47, Estuary
Business Park, Liverpool for GBP3.995 million together with an adjoining 3.6 acre
site with planning consent of a further 52,000 sq. ft. unit. This site was
purchased for GBP1.080 million. Hurricane 47 comprises a 47,462 sq. ft. unit
which was developed speculatively and completed in April 2018. Hurricane 47 is
being formally marketed and there is a reasonable level of occupier interest.
The Company has entered into a forward commitment to acquire the second
warehouse on completion of construction works for an additional sum of GBP3
million. It is expected that works will start on site in May 2019 with
completion scheduled for March 2020.
Industrial Sale Update
The conditional contract for the sale of the former Ozalid Works site in
Colchester remains with Persimmon Homes. The sale is conditional upon Persimmon
Homes securing a revised planning consent. Progress continues to be made to
negotiate and secure an acceptable planning consent which will discharge the
conditionality of the sale. The planning process has been slower than expected
but it is hoped the planning application will be determined during the second
quarter of 2019.
Offices
A significant project for the Company has been the refurbishment of Nevis and
Ness House at Edinburgh Park. Diageo committed to this building for their new
Scottish headquarters and the property is currently being refurbished in
accordance with Diageo's requirements at a cost of GBP6.5 million. The
refurbishment works completed in March 2019 and the new 16-year lease with a
break at year 10, contracted at GBP21 per square foot.
At Cassini House, London SW1, the top three floors have been refurbished and
this completes the phased refurbishment of the whole building. Two of the three
floors are under offer and the new letting should shortly complete. The
remaining floor is being marketed with a good level of interest identified.
The properties at Prime Four, Aberdeen are now due their rent reviews at the
agreed minimum uplift of 3 per cent per annum.
Office Sales
It has been the Company's strategy to sell a number of its vacant non-income
producing properties where the immediate re-letting prospects were challenging.
In November the Company completed the sale of Building B, Watchmoor Park,
Camberley for a price of GBP5.1 million. The property is an entirely vacant,
three storey office building totalling 32,641 sq. ft. The sale price was
in-line with the external September valuation but significantly ahead of the GBP
2.4 million valuation as at 31 December 2017. In December 2018, the Company
exchanged contracts for the sale of its freehold interest in two further office
properties, Thames Valley Park One and Thames Valley Park Two. The sale
completed in January 2019 at a combined sale price of GBP24.4 million compared
with the previous external valuation of GBP27.0 million. This is a strategic
sale, Thames Valley Park One comprises 75,000 sq. ft. and is entirely vacant
and requiring extensive refurbishment. Thames Valley Park Two is a separate
building of approximately 55,000 sq. ft. of which 28,900 sq. ft. is vacant. At
a time of significant uncertainty these non-core disposals address the
Company's largest void exposure by rental value, releases capital to be
invested in income producing properties, significantly reduces non-recoverable
expenditure and removes a future substantive capital expenditure requirement of
approximately GBP8.0 million.
The Alternative Property Sector
Following the re-classification of sector weightings highlighted above the
Company's weighting to alternatives has increased to 9 per cent from
approximately 3 per cent. To confirm, the Company's exposure relates to the
purpose-built student accommodation block in Winchester, the residential
properties within St Christopher's Place and the leisure units at Wimbledon
Broadway.
Outlook
The final quarter of 2018 saw a sharp downgrade for retail property and
nervousness in the property equity and "open ended" property funds. These
elements may well affect the UK commercial property market in 2019 and 2020 as
valuers respond to both the weaker trend in retail and pricing evidence from
transactions. Brexit and its economic and political ramifications will affect
sentiment more widely and it is likely over the first half of 2019 businesses
will delay making decisions. Therefore the expected number of capital market
and leasing transactions will reduce. In the absence of a clean Brexit a period
of market volatility could be in prospect. Possible future increases in
interest rates may also affect investment decisions, particularly in areas of
the market that are keenly priced and dependent on aggressive rental growth
assumptions. Over the longer-term, factors such as property's attractive income
return, the constrained supply of stock (outside retail), restrained bank
lending, the opportunities offered by demographic and technological change will
come to the fore and as the economy adapts to the post-Brexit world.
The portfolio is currently experiencing some stress in the retail sector as
highlighted above but asset management initiatives are well underway to address
the loss of income and capital value. There are a significant number of
projects identified within the portfolio that will be the focus of activity and
attention over the next eighteen months timeframe. A number of sales have also
been identified and the recycling of capital into an uncertain market may offer
timing opportunities to acquire quality assets at more attractive prices.
Overall the Company is well positioned to progress the significant number of
opportunities available in its own portfolio, as well as other opportunities
that may arise in the wider market.
Richard Kirby
Fund Manager
BMO REP Asset Management plc
F&C Commercial Property Trust Limited
Consolidated Statement of Comprehensive Income (audited)
Year ended Year ended
31 December 31 December
2018 2017
GBP'000 GBP'000
Revenue
Rental income 64,903 64,775
Other income 1,483 -
--------- ---------
Total revenue 66,386 64,775
(Losses)/gains on investment properties
Unrealised (losses)/gains on revaluation of
investment properties (6,171) 52,854
Gains/(losses) on sale of investment properties 2,613 (5)
realised
---------- ----------
Total income 62,828 117,624
---------- ----------
Expenditure
Investment management fee (7,823) (7,692)
Other expenses (6,191) (5,659)
---------- ----------
Total expenditure (14,014) (13,351)
----------- -----------
Operating profit before finance costs and taxation 48,814 104,273
----------- -----------
Net finance costs
Interest receivable 6 72
Finance costs (10,912) (10,932)
----------- -----------
(10,906) (10,860)
----------- -----------
Profit before taxation 37,908 93,413
Taxation (1,510) (703)
---------- ----------
Profit for the year 36,398 92,710
---------- ----------
Other comprehensive income
Items that are or may be reclassified subsequently
to profit or loss
Movement in fair value of effective interest rate 362 457
swaps
---------- ----------
Total comprehensive income for the year, net of tax 36,760 93,167
---------- ----------
Basic and diluted earnings per share 4.6p 11.6p
All of the profit and total comprehensive income for the year is attributable
to the owners of the Group.
All items in the above statement derive from continuing operations.
F&C Commercial Property Trust Limited
Consolidated Balance Sheet (audited)
As at As at
31 December 31 December
2018 2017
GBP'000 GBP'000
Non-current assets
Investment properties 1,384,856 1,398,894
Trade and other receivables 19,344 20,734
Interest rate swap 102 -
------------ ------------
1,404,302 1,419,628
------------ ------------
Current assets
Investment properties held for sale 23,562 -
Trade and other receivables 6,630 3,288
Cash and cash equivalents 10,127 35,156
------------ ------------
40,319 38,444
------------ ------------
Total assets 1,444,621 1,458,072
------------ ------------
Current liabilities
Trade and other payables (16,282) (18,936)
Taxation payable (1,029) (739)
------------ ------------
(17,311) (19,675)
Non-current liabilities
Trade and other payables (1,847) (1,812)
Interest-bearing loans (308,015) (307,675)
Interest rate swaps - (260)
------------ ------------
(309,862) (309,747)
------------ ------------
Total liabilities (327,173) (329,422)
------------ ------------
Net assets 1,117,448 1,128,650
------------ ------------
Represented by:
Share capital 7,994 7,994
Special reserve 589,593 589,593
Capital reserve - investments sold 1,708 7,063
Capital reserve - investments held 410,237 408,440
Hedging reserve 102 (260)
Revenue reserve 107,814 115,820
------------ ------------
Equity shareholders' funds 1,117,448 1,128,650
------------ ------------
Net asset value per share 139.8p 141.2p
F&C Commercial Property Trust Limited
Consolidated Statement of Changes in Equity
for the year ended 31 December 2018 (audited)
Capital Capital
Reverse Reserve - Reserve -
Share Share Acquisition Special Investments Investments Hedging Revenue
Capital Premium Reserve Reserve Sold Held Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2018 7,994 - - 589,593 7,063 408,440 (260) 115,820 1,128,650
Total
comprehensive
income for the
year
Profit for the - - - - - - - 36,398 36,398
year
Movement in fair
value of interest - - - - - - 362 - 362
rate swaps
Transfer in
respect of
unrealised losses - - - - - (6,171) - 6,171 -
on investment
properties
Gains on sale of
investment - - - - 2,613 - - (2,613) -
properties
realised
Transfer of prior
years'
revaluations to - - - - (7,968) 7,968 - - -
realised reserve
Total
comprehensive - - - - (5,355) 1,797 362 39,956 36,760
income for the
year
Transactions with
owners of the
Company recognised
directly in equity
Dividends paid - - - - - - - (47,962) (47,962)
At 31 December 7,994 - - 589,593 1,708 410,237 102 107,814 1,117,448
2018
Consolidated Statement of Changes in Equity
for the year ended 31 December 2017 (audited)
Capital Capital
Reverse Reserve - Reserve -
Share Share Acquisition Special Investments Investments Hedging Revenue
Capital Premium GBP Reserve Reserve Sold Held Reserve Reserve Total
GBP'000 '000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2017 7,994 127,612 831 461,150 7,068 355,586 (717) 123,921 1,083,445
Total comprehensive
income for the year
Transfer to Special
Reserve - (127,612) (831) 128,443 - - - - -
Profit for the year - - - - - - - 92,710 92,710
Movement in fair
value of interest - - - - - - 457 - 457
rate swaps
Transfer in respect
of unrealised gains
on investment - - - - - 52,854 - (52,854) -
properties
Loss on sale of
investment - - - - (5) - - 5 -
properties realised
Total comprehensive
income for the year - (127,612) (831) 128,443 (5) 52,854 457 39,861 93,167
Transactions with
owners of the
Company recognised
directly in equity
Dividends paid - - - - - - - (47,962) (47,962)
At 31 December 2017 7,994 - - 589,593 7,063 408,440 (260) 115,820 1,128,650
F&C Commercial Property Trust Limited
Consolidated Statement of Cash Flows (audited)
Year ended Year ended
31 December 31 December
2018 2017
GBP'000 GBP'000
Cash flows from operating activities
Profit for the year before taxation 37,908 93,413
Adjustments for:
Finance costs 10,912 10,932
Interest receivable (6) (72)
Unrealised losses/(gains) on revaluation of investment
properties 6,171 (52,854)
(Gains)/losses on sale of investment properties realised (2,613) 5
Increase in operating trade and other receivables (2,054) (3,204)
(Decrease)/increase in operating trade and other payables (2,317) 200
----------- -----------
Cash generated from operations 48,001 48,420
----------- -----------
Interest received 6 72
Interest and bank fees paid (10,551) (10,559)
Tax paid (1,220) (203)
----------- -----------
(11,765) (10,690)
----------- -----------
Net cash inflow from operating activities 36,236 37,730
----------- -----------
Cash flows from investing activities
Purchase of investment properties (5,754) (32,802)
Sale of investment properties 5,100 -
Capital expenditure (12,649) (6,831)
----------- -----------
Net cash outflow from investing activities (13,303) (39,633)
----------- -----------
Cash flows from financing activities
Dividends paid (47,962) (47,962)
Draw down of Barclays Loan revolving credit facility - 35,000
Repayment of Barclays Loan revolving credit facility - (35,000)
----------- -----------
Net cash outflow from financing activities (47,962) (47,962)
----------- -----------
Net decrease in cash and cash equivalents (25,029) (49,865)
Opening cash and cash equivalents 35,156 85,021
----------- -----------
Closing cash and cash equivalents 10,127 35,156
----------- -----------
F&C Commercial 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 Company's success.
The consequences for its business model, liquidity, future prospects and
viability form an integral part of this assessment.
The Board applies the principles detailed in the internal control guidance
issued by the Financial Reporting Council, and has established an ongoing
process designed to meet the particular needs of the Company in managing the
risks and uncertainties to which it is exposed.
Principal risks and uncertainties faced by the Company are described below and
in note 2, which provides detailed explanations of the risks associated with
the Company's financial instruments.
* Market - the Company's assets comprise direct investments in UK
commercial property and it is therefore exposed to movements and changes in
that market.
* Investment and strategic - poor investment decisions and incorrect
strategy, including sector and geographic allocations, use of gearing,
inadequate asset management activity and tenant defaults could lead to poor
returns for shareholders.
* Regulatory - breach of regulatory rules could lead to suspension of
the Company's London Stock Exchange listing, financial penalties or a qualified
audit report.
* Environmental - inadequate attendance to environmental factors by the
Managers, including those of a regulatory and market nature and particularly
those relating to energy performance, health and safety, flood risk and
environmental liabilities, leading to the reputational damage of the Company,
reduced liquidity in the portfolio, and/or negative asset value impacts.
* Tax structuring and compliance - the Company should ensure compliance
with relevant tax rules and thresholds at all time. Changes to tax legislation
could have an adverse financial impact.
* Operational - failure of the Managers' accounting systems or
disruption to its business, or that of other third party service providers,
could lead to an inability to provide accurate reporting and monitoring,
leading to a loss of shareholders' confidence.
* Financial - inadequate controls by the Managers or other third party
service providers could lead to misappropriation of assets. Inappropriate
accounting policies or failure to comply with accounting standards could lead
to a qualified audit report, misreporting or breaches of regulations. Breaching
Guernsey solvency test requirements or loan covenants could lead to a loss of
shareholders' confidence and financial loss for shareholders.
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 Company's
property portfolio. The Managers seek to mitigate these 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.
The principal risks encountered during the year, how they are mitigated and
actions taken to address these are set out in the table below.
Principal Risk Mitigation Actions taken in the year
Valuers have difficulty in Professional external Transactional volumes in
valuing the property assets valuers are appointed to 2018 were at very healthy
due to lack of market value the portfolio on a levels, although we have
evidence or market quarterly basis. There is seen volumes fall in the
uncertainty. Error in the regular liaison with the first quarter of 2019.
calculation/ application of valuers regarding all Nevertheless, there has
the Company Net Asset Value elements of the portfolio. been sufficient
('NAV') leads to a material There is attendance by one transactions to date with
misstatement. or more Directors at the trades in all sectors in
valuation meetings and the which the Company invests
Auditors attend the year end which provide evidence for
valuation meeting. our valuations. This level
of trading has continued
Unchanged in the year under despite the political
review uncertainty of recent
months.
Unfavourable markets, poor The underlying investment The Board review the
stock selection, strategy, performance, Manager's performance at
inappropriate asset gearing and income forecasts quarterly Board Meetings
allocation and are reviewed with the against key performance
under-performance against Investment Manager at each indicators and is satisfied
benchmark and/or peer Board Meeting. The Company's that the Manager's
group. This risk may be portfolio is well long-term performance is in
exacerbated by gearing diversified and of a high line with expectations.
levels. There is increased quality. Gearing is kept at
volatility at the present modest levels.
time given the
uncertainties surrounding
Brexit.
Risk increased in the year
under review
Non-resident landlords will The Company has announced The changes in taxation
be taxable under the UK plans to adopt UK REIT were formalised in the UK
corporation tax regime from status subject to Chancellor's Budget in
April 2020. This change shareholder approval. Under November 2017. An
could have a material current tax legislation, the extraordinary general
impact on the Company's tax principal tax advantage for meeting is scheduled for 30
affairs. Additionally, new the Company in doing this is May 2019 at which
capital gains tax rules that the Group's net rental shareholders will vote on
were implemented in April income derived from its the Company adopting UK
2019 which will also impact property rental business REIT status.
the Company moving forward. would be exempt from UK
taxation. The same treatment
would apply to capital gains
Risk increased in the year arising on the disposal of
under review relevant rental properties.
The retail market has The Manager provides regular The portfolio has been
witnessed a number of information on the expected impacted by a number of
company voluntary level of rental income that CVA's and administrations
arrangements, profit will be generated from the at its retail parks. There
warning announcements and underlying properties. The is a short-term impact on
administrations in recent Portfolio is well retail income and the
months. There is an diversified by geography and valuation of these assets.
increased risk of tenant sector and the exposure to The Manager has business
defaults in this sector individual tenants is plans in place to asset
which could put the level monitored and managed to manage these events.
of dividend cover at risk. ensure there is no over
exposure.
Risk increased in the year
under review
Viability Assessment and Statement
The Board conducted this review over a five year time horizon, a period thought
to be appropriate for a Company investing in commercial property with a
long-term investment outlook; with primary borrowings secured for a further six
years and a property portfolio with an average unexpired lease length of 7.1
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 property 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 Company's property portfolio, the existence of the long-term
borrowing facility, the effects of any significant future falls in investment
property values and property income receipts on the ability to repay and
re-negotiate borrowings, maintain dividend payments and retain investors. These
matters were assessed over a period to March 2024, and the Directors will
continue to assess viability over five 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 to the maturity of its principal loan of GBP260 million which is
due to mature in 2024 and coincides with the next continuation vote. This model
uses prudent assumptions and factors in any potential capital commitments. For
the purpose of assessing the viability of the Group, the model has been
adjusted to look at the next five years and is stress tested with projected
returns comparable to the commercial property market crash experienced between
2007 and 2009. 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 model demonstrated that even under these extreme
circumstances the Company remains viable.
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 five year period to March 2024.
F&C Commercial 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 Company'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. They have not identified
any material uncertainties which cast significant doubt on the ability to
continue as a going concern for the foreseeable future, which is considered for
a period of not less than 12 months from the date of the approval of the
financial statements. The Board believes it is appropriate to adopt the going
concern basis in preparing the financial statements.
Statement of Directors' Responsibilities in Respect of the Annual Report and
Accounts
In accordance with Chapter 4 of the Disclosure and Transparency Rules, we
confirm that to the best of our knowledge:
* The financial statements contained within the Annual Report and Accounts
for the year ended 31 December 2018, of which this statement of results is
an extract, have been prepared in accordance with applicable International
Financial Reporting Standards as adopted by the EU, on a going concern
basis, and 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 Chairman's Statement and Managers' Review include 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
they face; and
* The consolidated financial statements include details of related party
transactions; and
In the opinion of the Directors:
* 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
Chris Russell
Director
F&C Commercial Property Trust Limited
Notes to the audited Consolidated Financial Statements
for the year ended 31 December 2018
1. The Board has declared a twelfth, and last, interim dividend for the
year of 0.50p per share to be paid on 30 April 2019 to shareholders on the
register on 12 April 2019.
It is the Directors' intention that the Company will continue to pay dividends
monthly.
2. Financial Instruments and investment properties
The Company's investment objective is to provide ordinary shareholders with an
attractive level of income together with the potential for capital and income
growth from investing in a diversified UK commercial property portfolio.
Consistent with that objective, the Group holds UK commercial property
investments. In addition, the Group's financial instruments during the year
comprised interest-bearing bank loans, cash and receivables and payables that
arise directly from its operations. The Group does not have exposure to any
derivative instruments other than the interest rate swap entered into to hedge
the interest paid on the Barclays interest-bearing bank loan.
The Group is exposed to various types of risk that are associated with
financial instruments. The most important types are credit risk, liquidity
risk, interest rate risk and market price risk. There is no foreign currency
risk as all assets and liabilities of the Group are maintained in pounds
sterling.
The Board reviews and agrees policies for managing the Group's risk exposure.
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.
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 Managers
monitor such reports in order to anticipate, and minimise the impact of,
defaults by occupational tenants.
All of the Group's cash is placed with financial institutions with a long-term
credit rating of A or better. Bankruptcy or insolvency of such 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, cash holdings would be
moved to another bank.
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 and property-related assets in which
the Group invests are not traded in an organised public market and may be
illiquid. As a result, the Group may not be able to liquidate quickly 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 Managers 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.
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 its long-term
debt obligations. Interest rate risk on long-term debt obligations is managed
by fixing the interest rate on such borrowings, either directly or through
interest rate swaps for the same notional value and duration. Long-term debt
obligations and the interest rate risk they confer to the Group is considered
by the Board on a quarterly basis. Long term debt obligations consist of a GBP260
million L&G loan on which the rate has been fixed at 3.32 per cent until the
maturity date of 31 December 2024. The Group also has a GBP50 million
interest-bearing bank loan with Barclays on which the rate has been fixed
through an interest rate swap at 2.522 per cent per annum until the maturity
date of 21 June 2021. The Group has agreed an additional revolving credit
facility of GBP50 million with Barclays over the same period, which has not been
drawn down as at 31 December 2018. The revolving credit facility pays an
undrawn commitment fee of 0.60 per cent per annum.
When the Group retains cash balances, they are ordinarily held on
interest-bearing deposit accounts. The benchmark which determines the interest
income received on interest bearing cash balances is the bank base rate of the
Bank of England which was 0.75 per cent as at 31 December 2018 (2017: 0.50 per
cent). The Company's policy is to hold cash in variable rate or short-term
fixed rate bank accounts and not usually in fixed rate securities with a term
greater than three months.
Market price risk
The Group's strategy for the management of market price risk is driven by the
investment policy. The management of market price 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. Investments 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.
3. There were 799,366,108 Ordinary Shares in issue at 31 December 2018
(2017: 799,366,108).
At 31 December 2018, the Company did not hold any Ordinary Shares in treasury
(2017: nil).
4. The basic and diluted earnings per Ordinary Share are based on the
profit for the year of GBP36,398,000 (2017: GBP92,710,000) and on 799,366,108
(2017: 799,366,108) Ordinary Shares, being the weighted average number of
shares in issue during the year.
5. The Company owns 100 per cent of the issued ordinary share capital
of FCPT Holdings Limited, a company registered in Guernsey. The principal
activity of FCPT Holdings Limited is to act as a holding company and it owns
100 per cent of the ordinary share capital of F&C Commercial Property Holdings
Limited, a company registered in Guernsey whose principal business is that of
an investment and property company, and 100 per cent of the ordinary share
capital of Winchester Burma Limited, a company registered in Guernsey whose
principal business is that of an investment and property company.
The Company owns 100 per cent of the issued ordinary share capital of SCP
Estate Holdings Limited, a company registered in Guernsey. The principal
activity of SCP Estate Holdings Limited is to act as a holding company and it
owns 100 per cent of the ordinary share capital of SCP Estate Limited, a
company registered in Guernsey whose principal business is that of an
investment and property company, and 100 per cent of the ordinary share capital
of Prime Four Limited, a company registered in Guernsey whose principal
business is that of an investment and property company.
The Company owns 100 per cent of the issued ordinary share capital of Leonardo
Crawley Limited, a company registered in Guernsey whose principal business is
that of an investment and property company.
The results of the above entities are consolidated within the Group financial
statements.
6. The Group had capital commitments totalling GBP3,600,000 as at 31
December 2018 (2017: GBP6,800,000). These commitments related mainly to
contracted development work at the Group's property at Nevis and Ness Houses,
Edinburgh Park.
7. These are not full statutory accounts. The full audited accounts for
the year to 31 December 2018 will be sent to shareholders and will be available
for inspection at Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1
3QL, the registered office of the Company, and from the Company's website:
fccpt.co.uk
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. This price is not
identical to the NAV. If the share price is lower than the NAV per share, the
shares are trading at a discount. This could indicate that there are more
sellers than buyers. Shares trading at a price above the NAV per share, are
said to be at a premium.
Dividend Cover - The percentage by which Profits for the year (less Gains/
losses on investment properties) cover the dividend paid.
A reconciliation of dividend cover is shown below:
2018 2017
GBP'000 GBP'000
Profit for the year 36,398 92,710
Add back: Unrealised losses / (gains) on
revaluation of investment 6,171 (52,854)
properties
(Gains) / losses on sales of
investment properties realised (2,613) 5
Other income (1,483) -
Profit before investment gains and losses (a) 38,473 39,861
Dividends (b) 47,962 47,962
Dividend Cover percentage (c= a/b) (c) 80.2 83.1
Dividend Yield - The annualised dividend divided by the share price at the year
end.
Net Gearing - Borrowings less cash divided by total assets (less current
liabilities and cash).
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. The 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. The
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. The calculation is carried out by MSCI Inc.
Total Return - The theoretical 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.
All enquiries to:
The Company Secretary
Northern Trust International Fund Administration (Guernsey) Limited
Trafalgar Court
Les Banques
St. Peter Port
Guernsey GY1 3QL
Tel: 01481 745436
Fax: 01481 745186
Richard Kirby
BMO REP Asset Management plc
Tel: 0207 016 3577
Graeme Caton
Winterflood Securities Limited
Tel: 0203 100 0268
END
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April 24, 2019 07:43 ET (11:43 GMT)
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