ADVFN Logo

We could not find any results for:
Make sure your spelling is correct or try broadening your search.

Trending Now

Toplists

It looks like you aren't logged in.
Click the button below to log in and view your recent history.

Hot Features

Registration Strip Icon for discussion Register to chat with like-minded investors on our interactive forums.

HLCL Helical Plc

208.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Helical Plc LSE:HLCL London Ordinary Share GB00B0FYMT95 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% 208.00 208.00 211.00 209.00 205.00 205.00 134,108 16:29:18
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Lessors Of Real Property,nec 49.85M -64.51M -0.5230 -3.98 256.58M

Helical PLC Half-year Report (5155W)

15/11/2017 7:01am

UK Regulatory


Helical (LSE:HLCL)
Historical Stock Chart


From Mar 2019 to Mar 2024

Click Here for more Helical Charts.

TIDMHLCL

RNS Number : 5155W

Helical PLC

15 November 2017

HELICAL PLC

("Helical" or the "Group" or the "Company")

Half Year Results for the Six Months to 30 September 2017

HELICAL SEES LETTING SUCCESS AND INCREASED FOCUS ON CORE SECTORS

Gerald Kaye, Chief Executive, commented:

"The financial year to date has seen Helical make encouraging progress in executing its strategy and meeting targets. Following the sale announced yesterday of our retirement village portfolio for GBP102m, a 13% discount to book value, we have now sold the majority of our non-core holdings, with those remaining accounting for just 4% of the total portfolio. One Creechurch Place, London EC3 is 48% let with a further 22% under offer and good interest in the remaining space. In addition, we have achieved record rents at a number of our London investment assets. With the second phase of The Bower, London EC1 and One Bartholomew Close, London EC1 due for completion in Q3 2018, we are confident of their letting prospects. Looking forward, we will continue to seek new refurbishment and development opportunities in undersupplied markets.

"We have sold over GBP315m of investment assets since 1 April 2016, including the sale this week of our London office investment at C-Space, London EC1, at prices in aggregate of 2.5% above book value. Net proceeds have funded our capital expenditure programme and, importantly, have reduced net borrowings by GBP236m substantially reducing our loan to value from 55%, at 31 March 2016, to today's pro-forma ratio of 43%.

"With our portfolio of high quality London and Manchester offices and higher yielding logistics properties, we now look forward to increasing our income stream from the current contracted rents of GBP45m towards the portfolio's ERV of GBP65m as completed office space is made available to potential tenants in the next 12 months."

Financial Highlights - strong base from which to deliver future returns

Results

-- EPRA net asset value per share down 1.7% to 465p (31 March 2017: 473p), reflecting the impact on NAV from the sale of the retirement village portfolio.

   --   EPRA loss per share of 5.9p (2016: earnings 4.4p). 
   --   IFRS basic earnings per share of 0.3p (2016: 27.8p) 
   --   IFRS Profit before tax of GBP1.2m (2016: GBP31.1m). 
   --   Total Property Return of GBP15.4m (2016: GBP47.8m). 

- Group's share of net rental income of GBP17.9m reflecting the sale of non-core properties (2016: GBP24.6m).

- Development losses of GBP8.2m (2016: GBP2.6m), after provisions of GBP11.5m (2016: GBP6.6m).

   -       Net gain on sale and revaluation of investment properties of GBP5.7m (2016: GBP25.8m). 
   --   Interim dividend declared of 2.50p per share (2016: 2.40p) - up 4.2%. 

Property Valuations

   --   Group's share of property portfolio GBP1,211m (31 March 2017: GBP1,205m). 

-- Investment property valuations, on a like-for-like basis, up 0.8% (0.7% including sales and purchases).

Financing

-- See-through loan to value of 51% (31 March 2017: 51%). Post 30 September 2017 sales reduce pro-forma loan to value to 43%.

-- Average maturity of the Group's share of debt of 3.0 years (31 March 2017: 3.6 years) at an average cost of 4.3% (31 March 2017: 4.3%).

-- Group's share of cash and undrawn bank facilities at 30 September 2017 of GBP266m (31 March 2017: GBP267m).

Operational Highlights - portfolio positioned to capture ERV

London Portfolio

-- 1.5% valuation increase of London investment portfolio valued at GBP712m (71% of investment portfolio) at 30 September 2017 - 31 March 2017: GBP666m (65%).

-- C-Space EC1, a 61,973 sq ft office building on City Road, was sold post half-year end for GBP74.0m, a small premium to its 30 September 2017 and 31 March 2017 book values.

-- Contracted rents on our London portfolio, following the C-Space sale and including pre-lets at The Bower, of GBP25.3m compare to an ERV of GBP43.3m (like-for-like increase of 4.6%) - 31 March 2017: GBP27.9m contracted rents with ERV of GBP44.9m.

-- At One Creechurch Place EC3, we have signed leases with two tenants for space totalling 131,879 sq ft, representing 48% of the building and have agreed terms with another two tenants for 60,017 sq ft which, if concluded, will result in the building being 70% let.

-- At 25 Charterhouse Square EC1, 70% of the building now let at average rents of GBP75.50 psf on the offices and GBP59.35 psf on the ground floor retail.

-- At The Loom EC1, we have let an additional 12,850 sq ft of newly refurbished space at between GBP52.50 psf and a record GBP55.00 psf.

-- At The Bower EC1, we are on target to complete the refurbishment of The Tower by July 2018. Marketing of the remaining space, with 34% already pre-let to WeWork, has commenced and initial interest is encouraging.

-- At Barts Square EC1, 128 of the 144 residential units (89%) in Phase One have exchanged (31 March 2017: 116 units) with a further three units reserved.

-- 13 sales at Barts Square have completed by 14 November 2017 with the remaining 115 sales due to complete by March 2018 and expected to deliver net proceeds of GBP56m.

Manchester Portfolio

-- Comprises four office buildings generating GBP5.4m of contracted rents against an ERV of GBP7.2m and valued at GBP87.6m.

   --   Trinity Court, a 47,443 sq ft office building, acquired in May 2017 for GBP12.9m. An extensive refurbishment of the building is proposed. 

Logistics Portfolio

-- Comprises 23 predominantly single let assets located around the main UK transport networks generating GBP11.3m of contracted rents against an ERV of GBP11.9m and valued at GBP150.8m.

   --   One asset sold in the period to an owner-occupier at its book value of GBP9.3m. 

-- A new ten year lease completed to the existing tenant at our 65,000 sq ft unit at Telford at passing rent, with good interest in our only remaining vacant property in Doncaster.

Non-Core

-- The strategic sale of the retirement village portfolio for GBP102m, post the half year, reflects a 13% discount to book value with this sales value reflected in the carrying values at 30 September 2017.

-- The sale reduces Group borrowings by GBP46m and boosts cash reserves by GBP51m of which the payment of GBP26m is deferred for 12 months.

-- During the half year to 30 September 2017, we sold three retail assets for GBP73.3m at a profit of GBP1.5m.

-- Since 1 April 2016, we have sold GBP132m of non-core investment assets at 1.3% premium to book value.

-- Following the post period end sales, the non-core portfolio includes three regional offices and one retail asset, valued in total at GBP34.7m, and land valued at GBP5.9m. Non-core assets now comprise just 4.0% of the total current portfolio (31 March 2017: 17.6%).

For further information, please contact:

 
Helical plc                     020 7629 0113 
Gerald Kaye (Chief Executive) 
Tim Murphy (Finance Director) 
 
Address:                        5 Hanover Square, London W1S 
                                 1HQ 
Website:                        www.helical.co.uk 
Twitter:                        @helicalplc 
 
FTI Consulting                  020 3727 1000 
Dido Laurimore/Tom Gough/Richard Gotla 
schelical@fticonsulting.com 
 

Half Year Results Presentation

Helical will be holding a presentation for analysts and investors at 11am, Wednesday 15 November 2017 at FTI Consulting, 200 Aldersgate, Aldersgate Street, London, EC1A 4HD. If you would like to attend, please contact Jenni Nkomo on 020 3727 1000, or jenni.nkomo@fticonsulting.com.

The presentation will be on the Company's website www.helical.co.uk and a conference call facility will be available. The dial-in details are as follows:

 
Participants, Local - London, United Kingdom:   +44 (0)330 336 9411 
Confirmation Code:                              8623415 
 

Webcast Link:

http://webcasting.brrmedia.co.uk/broadcast/59d4e041d349960788385c49

The presentation will also be on the Company's website www.helical.co.uk

Financial Highlights

 
                                                         Half Year to                        Year to 
                                                         30 September        Half Year to   31 March 
                                                Notes            2017   30 September 2016       2017 
  See-through Income Statement                    1              GBPm                GBPm       GBPm 
---------------------------------------------  -------  -------------  ------------------  --------- 
Net rental income                                                17.9                24.6       47.0 
Development property losses                                     (8.2)               (2.6)      (5.7) 
Gain on revaluation of investment properties                      4.5                28.6       37.3 
Gain/(loss) on sale of investment properties                      1.2               (2.8)        1.3 
----------------------------------------------  ------  -------------  ------------------  --------- 
Total property return                                            15.4                47.8       79.9 
------------------------------------------------------  -------------  ------------------  --------- 
 
IFRS Profit before tax                                            1.2                31.1       41.6 
EPRA (loss)/earnings                                            (6.9)                 5.0        0.5 
 
 
 
 
  Earnings Per Share and Dividends         Pence    Pence    Pence 
----------------------------------------   -----  -------  ------- 
Basic earnings per share                  2  0.3     27.8     34.0 
Diluted earnings per share                2  0.3     26.6     33.2 
EPRA (loss)/earnings per share            2(5.9)      4.4      0.5 
Dividends per share paid in period          6.20     0.72     3.12 
Dividends per share declared for period     2.50     2.40     8.60 
----------------------------------------   -----  -------  ------- 
 
 
                                          Proforma At(4)             At                             At 
                                            30 September   30 September                  At   31 March 
                                                    2017           2017   30 September 2016       2017 
 See-through Balance Sheet             3            GBPm           GBPm                GBPm       GBPm 
------------------------------------      --------------  -------------  ------------------  --------- 
See-through property portfolio                   1,036.8        1,210.8             1,249.5    1,205.2 
See-through net borrowings                         445.4          619.4               664.3      620.0 
Net assets                                         510.2          510.2               508.9      516.9 
------------------------------------      --------------  -------------  ------------------  --------- 
 
Net assets per share and borrowings 
------------------------------------      --------------  -------------  ------------------  --------- 
EPRA Net Asset Value per share                      465p           465p                471p       473p 
See-through loan to value             5              43%            51%                 53%        51% 
See-through net gearing               6              87%           121%                131%       120% 
Weighted average cost of debt                       4.3%           4.3%                4.3%       4.3% 
Weighted average debt maturity                 3.0 years      3.0 years           4.0 years  3.6 years 
------------------------------------      --------------  -------------  ------------------  --------- 
 

Notes

1. Includes Group's share of income and gains of its subsidiaries and joint ventures. See Note 25.

2. Calculated in accordance with IAS 33 and guidance issued by the European Public Real Estate Association ("EPRA"). EPRA earnings per share exclude the net gain on sale and revaluation of the investment portfolio of GBP5.7m (2016: GBP25.8m) but include development losses of GBP8.2m (2016: GBP2.6m).

3. Includes the Group's share of assets and liabilities of its subsidiaries and joint ventures. See Note 25.

4. Reflects the Group's share of assets and liabilities at 30 September 2017, adjusted for GBP176m of sales since the half year end.

5. See-through loan to value is the ratio of see-through net borrowings to see-through property portfolio. See Note 26.

6. See-through net gearing is the ratio of see-through net borrowings to net assets. See Note 26.

Chief Executive's Statement

Overview

The financial year to date has seen Helical make encouraging progress in executing its strategy and meeting targets. Following the sale announced yesterday of our retirement village portfolio for GBP102m, a 13% discount to book value, we have now sold the majority of our non-core holdings, with those remaining accounting for just 4% of the total portfolio. One Creechurch Place, London EC3 is 48% let with a further 22% under offer and good interest in the remaining space. In addition, we have achieved record rents at a number of our London investment assets. With the second phase of The Bower, London EC1 and One Bartholomew Close, London EC1 due for completion in Q3 2018, we are confident of their letting prospects. Looking forward, we will continue to seek new refurbishment and development opportunities in undersupplied markets.

Results for the Half Year

The profit before tax for the half year to 30 September 2017 was GBP1.2m (2016: GBP31.1m) with a Total Property Return of GBP15.4m (2016: GBP47.8m). The reduction in net rents to GBP17.9m (2016: GBP24.6m) reflects the sale of GBP186m of investment assets over the preceding 12 months. Developments contributed profits of GBP3.3m (2016: GBP4.0m) before provisions of GBP11.5m (2016: GBP6.6m). The gain on sale and revaluation of the investment portfolio contributed GBP5.7m (2016: GBP25.8m).

Total finance costs were GBP14.1m (2016: GBP14.1m), offset by interest receivable of GBP1.2m (2016: GBP2.3m) to give net finance costs of GBP12.9m (2016: GBP11.7m). An increase in expected future interest rates led to a credit from the valuation of the Group's derivative financial instruments of GBP2.9m (2016: charge of GBP5.9m). The valuation of the Group's Convertible Bond gave rise to a charge to the Income Statement of GBP0.1m (2016: credit of GBP7.7m). Recurring administration costs were GBP5.6m (2016: GBP5.8m) and the provision for performance related remuneration, including associated NIC, was GBP0.5m (2016: GBP0.1m).

These results allow the Board to declare an Interim Dividend of 2.50p (2016: 2.40p), an increase of 4.2%.

Finance

The Company uses gearing on a tactical basis throughout the property cycle, being raised to accentuate property performance when property returns are judged to materially outperform the cost of debt and lowered when seeking to reduce exposure to the property cycle.

We have sold over GBP315m of investment assets since 1 April 2016, including the sale this week of our London office investment at C-Space, London EC1, at prices in aggregate of 2.5% above book value. Net proceeds have funded our capital expenditure programme and, importantly, have reduced net borrowings by GBP236m substantially reducing our loan to value from 55% at 31 March 2016 to today's pro-forma ratio of 43%.

Outlook

With our portfolio of high quality London and Manchester offices and higher yielding logistics properties, we now look forward to increasing our income stream from the current contracted rents of GBP45m to the portfolio's ERV of GBP65m as completed office space is made available to potential tenants in the next 12 months.

Gerald Kaye

Chief Executive

15 November 2017

Our Market

Overview

Helical's core business is the development of, and investment in, dynamic, well located office space in London and Manchester accompanied by a portfolio of logistics units along the motorway network of England and Wales. With intelligent stock selection, we aim to maximise returns by development and refurbishment as well as through significant asset management initiatives.

London

In London, Helical is building up a portfolio of multi-tenanted offices in the Tech Belt locations of Farringdon, the Old Street roundabout and Whitechapel areas, as well as in West London from Chiswick to Shepherds Bush. By owning these "clusters" or "villages" of office buildings we have a portfolio of assets with multiple lease events leading to ongoing asset management opportunities.

The Company also seeks to grow by taking on additional schemes in Central London often in joint venture or by forward selling/funding them, to allow for the generation of significant profit shares, reducing balance sheet exposure where appropriate.

Manchester

In Manchester we have four assets with a potential capital value, after all refurbishment works and lettings are concluded, approaching GBP100m. In this city, the occupational and investment market continues to strengthen. It has high quality office stock and a diverse occupier base which has seen much international and institutional investment in recent years. Companies have access to a deep and highly skilled talent pool in a cost effective location both for the employer and employee. It is regarded as the leading UK creative location outside London and our buildings are designed to attract creative occupiers. Annual office take-up is consistently in excess of one million sq ft with high profile new occupiers coming to the city on a regular basis.

Logistics

We have a portfolio of logistics units comprising 15% of our investment portfolio, but which contribute 23% of our current contracted rents. This sector is characterised by strong occupational demand and limited available supply. These properties tend to have little obsolescence and good prospects for rental growth.

Looking Forward

Our key focus remains on London, Manchester offices and logistics. We have made significant progress in reducing non-core holdings which, post the retirement village sales, constitute just 4% of the total portfolio. We will continue to sell the remaining assets as the opportunities to do so arise.

Our ambition is to have a balanced portfolio which generates sufficient net rental income to exceed all of our recurring costs and provide a surplus significantly greater than our annual dividend to Shareholders. We have an ERV on the portfolio, post recent sales, of GBP65m and expect to generate this surplus once all of our current asset management initiatives are completed. We also seek a pipeline of opportunities to grow the balance sheet of Helical through the creation of development profits and capital surpluses.

Financial Review

 
 
   IFRS Performance                EPRA Performance 
 Profit Before Tax               EPRA EPS 
  GBP1.2m (2016: GBP31.1m)        Loss of 5.9p (2016: earnings 
                                  of 4.4p) 
 IFRS EPS                        EPRA NAV 
  0.3p (2016: 27.8p)              465p (31 March 2017: 473p) 
 IFRS Diluted NAV                EPRA Triple NAV436p (31 March 
  426p (31 March 2017: 431p)      2017: 442p) 
----------------------------    ------------------------------ 
 

Total Accounting Return

The total accounting return is the growth in the net asset value of the company plus dividends paid in the period, expressed as a percentage of the net asset value at the beginning of the period. The metric measures the growth in shareholders' funds each period and is expressed as an absolute measure.

 
                              1H 
                            2018   2017   2016   2015   2014   2013 
                               %      %      %      %      %      % 
------------------------  ------  -----  -----  -----  -----  ----- 
Total Accounting Return      0.1    8.3   22.5   21.1   36.8    2.4 
------------------------  ------  -----  -----  -----  -----  ----- 
 

Total Property Return

We calculate our Total Property Return to enable us to assess the aggregate of income and capital profits made each period from our property activities. Our business is primarily aimed at producing surpluses in the value of our assets through asset management and development, with the income side of the business seeking to cover our annual administration and finance costs.

 
                            1H 
                          2018    2017    2016    2015    2014    2013 
                          GBPm    GBPm    GBPm    GBPm    GBPm    GBPm 
----------------------  ------  ------  ------  ------  ------  ------ 
Total Property Return     15.4    79.9   164.6   155.3   140.1    35.9 
----------------------  ------  ------  ------  ------  ------  ------ 
 

Earnings per Share

The IFRS earnings per share is based on the after tax earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. For the six months to 30 September 2017 IFRS earnings per share was 0.3p (2016: 27.8p). On the EPRA basis, which excludes gains on the sale and revaluation of properties, the loss per share was 5.9p (2016: earnings 4.4p).

Net Asset Value Per Share

IFRS diluted net asset value per share is a measure of shareholders' funds divided by the number of shares in issue at the period end, excluding those held by the Company's Employee Share Ownership Plan Trust, adjusted to allow for the effect of all dilutive share awards. At 30 September 2017 it was 426p (31 March 2017: 431p). On an EPRA basis, which adds back the fair value of financial instruments and the Convertible Bond, the property related deferred tax creditor and reflects the fair value of trading and development properties, the net asset value per share was 465p (31 March 2017: 473p).

Income Statement

Rental Income and Property Overheads

Gross rental income receivable by the Group reduced by 23% to GBP20.2m (2016: GBP26.3m) reflecting the sale of GBP186m of investment assets with contracted rents of GBP11.8m since 30 September 2016, offset by the partial capture of the portfolio's reversionary potential. Property overheads increased from GBP1.7m to GBP2.3m leaving the see-through net rents reduced by 27% to GBP17.9m (2016: GBP24.6m).

Development Profits/Losses

Development profits in the half year include a GBP0.7m development management fee at Barts Square and a contribution of GBP1.9m from our retail development programme offset by a GBP1.2m loss on the sale of land at Cawston. The retirement village provision of GBP10.2m plus a loss on sales at the retirement villages of GBP0.8m contributed to a net development loss of GBP8.2m (2016: GBP2.6m).

Share of Results of Joint Ventures

In our joint ventures we recognised an investment valuation uplift of GBP2.3m. Our retail development scheme at Shirley contributed to a development profit of GBP1.4m with the joint ventures contributing a total profit of GBP3.4m (2016: loss of GBP1.0m).

Gain on Sale and Revaluation of Investment Properties

During the six months we sold three non-core retail assets for a combined GBP73.3m and an industrial unit to an owner-occupier for GBP9.3m. Net of costs these sales contributed a profit of GBP1.2m (2016: loss of GBP2.8m). Subsequent to the half year end we have sold our investment asset at C-Space, London EC1, for GBP74.0m, marginally above its 30 September 2017 book value.

Administration Costs

Administration costs, before performance-related awards, reduced from GBP5.8m to GBP5.6m. Including share awards and associated NIC of GBP0.5m (2016: GBP0.1m), total administration costs increased to GBP6.1m (2016: GBP5.9m).

Finance Costs, Finance Income and Derivative Financial Instruments

Interest payable on secured bank loans, including our share of loans on assets held in joint ventures but before capitalised interest, was GBP13.1m (2016: GBP13.1m). Interest payable in respect of the unsecured Retail and Convertible Bonds was GBP4.4m (2016: GBP4.4m). Capitalised interest marginally reduced to GBP3.4m (2016: GBP3.5m). Total finance costs, including in joint ventures, were GBP14.1m (2016: GBP14.1m). Finance income earned was GBP1.2m (2016: GBP2.3m). The movement in medium and long-term interest rate projections during the period, offset by the shortening maturity period of the Group's derivative financial instruments, contributed to a credit of GBP2.9m (2016: charge of GBP5.9m) on their mark-to-market valuation.

Taxation

Helical pays corporation tax on its net rental income, trading and development profits and realised chargeable gains, after offset of administration and finance costs and any available losses.

The deferred tax charge for the half year is principally derived from the revaluation surpluses recognised in the period offset by the recognition of the tax losses which the Group believes will be utilised against profits in the foreseeable future.

Dividends

The Board has approved the payment of an interim dividend of 2.50p per share (2016: 2.40p), an increase of 4.2%. This interim dividend will be paid on 22 December 2017 to Shareholders on the share register on 24 November 2017.

Balance Sheet

Shareholders' Funds

Shareholders' funds at 1 April 2017 were GBP516.9m. The Group's results for the six months added GBP0.4m, net of tax, representing the total comprehensive income for the period. Movements in reserves arising from the Group's share schemes increased funds by GBP0.2m. The Company paid dividends to Shareholders amounting to GBP7.3m leaving a net decrease in Shareholders' Funds from the Group's activities during the half year of GBP6.7m to GBP510.2m.

Investment Portfolio

 
                                                   Wholly  In joint               Lease Incentives       Book 
                                                    owned   venture  See-through            GBP000      Value 
                                                   GBP000    GBP000       GBP000                       GBP000 
----------------------------------------------  ---------  --------  -----------  ----------------  --------- 
Valuation at 31 March 2017                      1,003,000    13,907    1,016,907          (15,440)  1,001,467 
Acquisitions                                       13,785         -       13,785                 -     13,785 
Capital Expenditure                                36,774     3,757       40,531                 -     40,531 
Disposals                                        (79,353)         -     (79,353)               150   (79,203) 
Revaluation Surplus   - Helical                     2,920     2,331        5,251             (775)      4,476 
 - Profit Share Partners                            2,420         -        2,420                 -      2,420 
 ---------------------------------------------  ---------  --------  -----------  ----------------  --------- 
Valuation at 30 September 2017                    979,546    19,995      999,541          (16,065)    983,476 
----------------------------------------------  ---------  --------  -----------  ----------------  --------- 
 
 
Disclosed as: 
Investment properties            963,481  19,995  983,476       -  983,476 
In Trade and other receivables         -       -        -  16,065   16,065 
-------------------------------  -------  ------  -------  ------  ------- 
                                 963,481  19,995  983,476  16,065  999,541 
-------------------------------  -------  ------  -------  ------  ------- 
 

Debt and Financial Risk

Helical's outstanding debt at 30 September 2017 of GBP738m (31 March 2017: GBP737m) had a weighted average maturity of 3.0 years (31 March 2017: 3.6 years) and a weighted average interest cost of 4.3% (31 March 2017: 4.3%).

Debt Profile at 30 September 2017 - Excluding the Effect of Arrangement Fees

 
                                                                          Weighted  Weighted Average 
                      Total      Total         Available                   Average     Interest Rate 
                   Facility   Utilised          Facility  Net LTV    Interest Rate    Fully Utilised  Average Maturity 
                   GBP000's   GBP000's          GBP000's        %                %                 %             Years 
----------------  ---------  ---------  ----------------  -------  ---------------  ----------------  ---------------- 
Investment 
 facilities         569,344    439,543           129,801        -              4.3               3.5               3.5 
Development 
 facilities          60,000     47,910            12,090        -              3.5               3.1               2.9 
----------------  ---------  ---------  ----------------  -------  ---------------  ----------------  ---------------- 
Total wholly 
 owned              629,344    487,453           141,891        -              4.2               3.5               3.5 
In joint 
 ventures            72,270     70,795             1,475        -              3.4               3.4               2.2 
----------------  ---------  ---------  ----------------  -------  ---------------  ----------------  ---------------- 
Total secured 
 debt               701,614    558,248           143,366       36              4.1               3.5               3.3 
Retail bond          80,000     80,000                 -        -              6.0               6.0               2.7 
Convertible bond    100,000    100,000                 -        -              4.0               4.0               1.7 
Working capital      10,000          -            10,000        -                -                 -                 - 
Fair value of 
 convertible 
 bond                     -       (99)                 -        -                -                 -                 - 
----------------  ---------  ---------  ----------------  -------  ---------------  ----------------  ---------------- 
Total unsecured 
 debt               190,000    179,901            10,000        -              4.9               4.9               2.2 
----------------  ---------  ---------  ----------------  -------  ---------------  ----------------  ---------------- 
Total debt          891,614    738,149           153,366       51              4.3               3.8               3.0 
----------------  ---------  ---------  ----------------  -------  ---------------  ----------------  ---------------- 
 

Secured Debt

The Group arranges its secured investment and development facilities to suit its business needs as follows:

   -      Investment Facilities 

We have GBP190m of revolving credit facilities which enable the group to acquire, refurbish, reposition and hold significant parts of our investment portfolio. We have used these facilities mainly to finance our regional portfolio. Our London investment assets are primarily held in GBP379m of secured loan facilities which, where appropriate, allow us to finance projects, including the redevelopment of The Tower at The Bower, London EC1. Of the total of GBP569m of investment facilities we have GBP130m available to fund these works and finance any new acquisitions. The average maturity of the Group's investment facilities at 30 September 2017 was 3.5 years with a weighted average interest rate of 4.3%.

   -      Development Facilities 

These facilities finance the construction of the retirement villages at Durrants Village Horsham; Maudslay Park, Great Alne; Phase IV at Bramshott Place, Liphook and Millbrook Village, Exeter. The average maturity of the Group's development facilities at 30 September 2017 was 2.9 years with a weighted average interest rate of 3.5%. These facilities were transferred to the purchaser of the retirement village portfolio in November 2017.

   -      Joint Venture Facilities 

We hold a number of investment and development properties in joint venture with third parties and include in our reported figures our share, in proportion to our economic interest, of the debt associated with each asset. The average maturity of the Group's share of bank facilities in joint ventures at 30 September 2017 was 2.2 years with a weighted average interest rate of 3.4%.

Unsecured Debt

The Group's unsecured debt, including the Convertible Bond at its mark-to-market valuation, is GBP180m as follows:

   -      Retail Bond 

In June 2013, the Group raised GBP80m from the issue of an unsecured Retail Bond with a 6.00% coupon. This bond is repayable in June 2020.

   -      Convertible Bond 

In June 2014, the Group raised GBP100m from the issue of a listed unsecured Convertible Bond with a 4.0% coupon, repayable in June 2019, or, subject to certain conditions, convertible at the option of the bond holders into ordinary shares, unless a cash settlement option is exercised by the Company. The initial conversion price has been set at GBP4.9694 per share, representing a 35% premium above the price on the day of the issue and a premium of 59% above the Company's EPRA net asset value per share at 31 March 2014. The value of the Bond at 30 September 2017, as determined by the listed market price, was GBP99.9m.

   -      Short term working capital facilities 

These facilities provide access to additional working capital for the Group.

Cash and Cash Flow

At 30 September 2017, the Group had GBP266m (31 March 2017: GBP267m) of cash and agreed, undrawn, committed bank facilities including its share in joint ventures, as well as GBP22m (31 March 2017: GBP17m) of uncharged property on which it could borrow funds.

Net Borrowings and Gearing

Total gross borrowings of the Group, including in joint ventures, have increased marginally from GBP736.6m to GBP738.1m during the six months to 30 September 2017. After deducting cash balances of GBP112.4m and unamortised refinancing costs of GBP6.3m, net borrowings were GBP619.4m (31 March 2017: GBP620.0m). The gearing of the Group, including in joint ventures, was 121% (31 March 2017: 120%).

 
                                30 September   31 March 
                                        2017       2017 
------------------------------  ------------  --------- 
See-through gross borrowings       GBP738.1m  GBP736.6m 
See-through cash balances          GBP112.4m  GBP109.0m 
Unamortised refinancing costs        GBP6.3m    GBP7.6m 
See-through net borrowings         GBP619.4m  GBP620.0m 
Shareholders' funds                GBP510.2m  GBP516.9m 
See-through net gearing                 121%       120% 
------------------------------  ------------  --------- 
 

Hedging

At 30 September 2017, the Group had GBP621.3m (31 March 2017: GBP651.4m) of fixed rate debt with an average effective rate of 4.2% (31 March 2017: 4.2%) and GBP46.0m (31 March 2017: GBP29.3m) of floating rate debt with an average effective rate, excluding commitment fees, of 3.0% (31 March 2017: 3.0%). In addition, the Group had GBP3.3m of interest rate caps at 0.75% (31 March 2017: GBP3.3m at 0.75%). In our joint ventures, the Group's share of fixed rate debt was GBPnil (31 March 2017: GBPnil) and GBP70.8m (31 March 2017: GBP55.9m) of floating rate debt with an effective rate of 3.4% (31 March 2017: 3.4%) with interest rate caps set at 1.5% plus margin on GBP158.9m and 0.5% plus margin on GBP164.7m.

 
                                   30 September  30 September  31 March  31 March 
                                           2017          2017      2017      2017 
                                           GBPm             %      GBPm         % 
---------------------------------  ------------  ------------  --------  -------- 
Fixed rate debt 
- Secured borrowings                      441.4           4.0     471.6       4.0 
- Retail Bond                              80.0           6.0      80.0       6.0 
- Convertible Bond                        100.0           4.0     100.0       4.0 
- Fair value of Convertible Bond          (0.1)             -     (0.2)         - 
---------------------------------  ------------  ------------  --------  -------- 
Total fixed rate debt                     621.3           4.2     651.4       4.2 
Floating rate debt 
- Secured                                  46.0        6.8(1)      29.3    8.9(1) 
---------------------------------  ------------  ------------  --------  -------- 
Total wholly owned                        667.3           4.4     680.7       4.4 
In joint ventures 
- Floating rate                            70.8           3.4      55.9       3.4 
---------------------------------  ------------  ------------  --------  -------- 
Total borrowings                          738.1           4.3     736.6       4.3 
---------------------------------  ------------  ------------  --------  -------- 
 

Note 1: This includes commitment fees on undrawn facilities. Excluding these would reduce the effective rate to 3.0% (31 March 2017: 3.0%).

Interest Cover

In assessing the results of the Group for each financial period, Helical considers its interest cover as a measure of its performance and ability to finance its annual interest payments from its net operating income, before revaluation gain or losses on the investment portfolio and net realisable provisions on the trading and development stock. In the half year to 30 September 2017 the interest cover was 1.7 times (2016: 2.2 times).

 
                                    30 September  30 September  31 March 
                                            2017          2016      2017 
---------------------------------  -------------  ------------  -------- 
See-through net operating income        GBP22.4m      GBP25.8m  GBP55.4m 
See-through net financing costs         GBP12.9m      GBP11.7m  GBP21.2m 
Interest Cover                              1.7x          2.2x      2.6x 
---------------------------------  -------------  ------------  -------- 
 

Tim Murphy

Finance Director

15 November 2017

Helical's Property Portfolio - 30 September 2017

Property Overview

Helical divides its property activities into three core markets: London, Manchester offices and logistics. Following the sale of C-Space and the Retirement Village portfolio in November 2017, the London Portfolio represents 73.1% of the total property portfolio and drives capital growth, development profits and, increasingly, income. Manchester offices accounts for 8.4%, and logistics account for 14.5%.

In addition, we have a small portfolio of non-core assets comprising three regional offices and one regional retail property which together represent just 4.0% of the total property portfolio.

The London Portfolio

Our strategy is to continue to increase our London holdings, focusing on areas where we see strong tenant demand and growth potential, such as the "Tech Belt" that runs from King's Cross through Old Street and Shoreditch to Whitechapel and in West London, in particular Shepherds Bush, Chiswick and Hammersmith. Our London portfolio comprises income producing multi-let offices, office refurbishments and developments and residential development schemes.

   --       City and Tech Belt 

One Creechurch Place, City of London EC3

One Creechurch Place is a landmark City office scheme in the heart of the insurance sector in London. In May 2014, Helical signed a joint venture agreement with HOOPP (Healthcare of Ontario Pension Plan) to redevelop the site. Under the terms of the joint venture, HOOPP and Helical jointly funded the project on a 90:10 split, with Helical acting as development manager for which it will receive a promote payment depending on the successful outcome of the scheme. The new building, comprising 272,505 sq ft NIA of offices and 786 sq ft of retail, achieved practical completion on 7 November 2016 and is currently being marketed for occupation. Since 30 September 2017, we have signed leases with Hyperion for 115,910 sq ft and Travelers for 15,969 sq ft, representing 48% of the building and are under offer with another two tenants for 60,017 sq ft, which, if concluded, will result in the building being 70% let.

25 Charterhouse Square, Smithfield EC1

In January 2016, Helical was granted a new 155 year leasehold interest in 25 Charterhouse Square, from the Governors of Sutton's Hospital in Charterhouse for GBP16m. Helical has carried out a major refurbishment of the existing building, which increased the previous 34,000 sq ft to 38,355 sq ft of offices with the addition of a new sixth floor, and added 5,138 sq ft of retail/restaurant space. The building achieved practical completion on 28 March 2017. The 5(th) and 6(th) floors have been let at GBP75 psf and in the period the 4(th) floor was let to Peakon, also at GBP75 psf on a 10 year lease with a five year break. Since the end of the period the ground and first floors have been let on five year leases at GBP77 psf for the first floor and an average GBP59 psf for the "shell" ground floor units. The second floor is also under offer and due to exchange shortly.

C-Space, 37-45 City Road EC1

Helical acquired C-Space in June 2013. Planning consent was obtained for a complete refurbishment of the building which increased the previous 50,000 sq ft office building to 61,973 sq ft. The works, which were completed in October 2015, involved an additional floor and extensions to the third floor, a landscaped courtyard and entrance pavilion to the rear and full height glazing to the raised ground floor. 75% of the space was pre-let to the creative agency MullenLowe in June 2015, with the remaining space let to NeuLion in November 2016.

Contracts were exchanged on 10 November 2017 for the sale of the building at GBP74m, marginally above its 31 March 2017 value book, with completion in December 2017.

The Loom, Whitechapel E1

This 110,069 sq ft listed former wool warehouse was acquired in 2013. A major repositioning was completed in September 2016 to include a new entrance and reception onto Gowers Walk, café, showers and a bike store. Since 1 April 2017, we have completed five new lettings on 12,850 sq ft with newly refurbished space being let at between GBP52.50 psf and a record GBP55.00 psf. Two further units totalling 2,431 sq ft are under offer.

The Bower EC1

211 Old Street EC1

The development of Phase One, comprising The Warehouse, 128,262 sq ft, and The Studio, 23,177 sq ft, completed in November 2015.

Phase One is fully let to CBS, Farfetch, Pivotal, Allegis and Stripe (The Warehouse) and John Brown Media (The Studio), and all tenants are in occupation. The retail operators are Bone Daddies, Draft House, Enoteca da Luca, Honest Burger, Maki and Franze & Evans.

207 Old Street EC1

At The Tower, comprising 178,571 sq ft of offices with ground floor retail, the refurbishment and construction works are well underway with practical completion scheduled for July 2018. We have pre-let six floors, comprising 58,904 sq ft (34%), to WeWork, the leading global provider of flexible collaborative co-working space, and recently launched the marketing of the remaining 119,667 sq ft of this building. A number of parties have inspected the building and we are encouraged by the interest being shown.

Barts Square EC1

In a joint venture with The Baupost Group LLC, Helical owns the freehold interest of Barts Square, a 3.2 acre site between St Pauls and Smithfield Market, situated a short walk from Farringdon East station on the Elizabeth Line (Crossrail) which is due to be operational at the end of 2018.

Barts Square will ultimately provide an entirely new quarter in the City consisting of 236 residential apartments, three office buildings of 213,125 sq ft, 24,031 sq ft and 10,200 sq ft and 21,839 sq ft of retail/A3 at ground floor as well as major public realm improvements.

Phase One - Residential

Phase 1 of Barts Square comprises 144 residential units, 3,193 sq ft of retail and extensive public realm improvements. The residential units are being handed over to purchasers as buildings are completed with the Underwood Building (13 sales) completed by October 2017 and six further buildings (115 sales) to be completed and handed over in the period to March 2018. In total, contracts have been exchanged for the sale of 128 residential units (12 in the period) for a total value of GBP162.1m at an average of GBP1,565 psf, with a further three units reserved, leaving just 13 apartments to sell.

90 Bartholomew Close - Offices

Construction of the 24,013 sq ft office building with 6,449 sq ft of restaurant use on the ground floor is expected to be completed in December 2017. Marketing of the offices will commence after practical completion of the building. The ground floor restaurant is under offer to a leading UK restauranteur who operates a small collection of restaurants, delis and bars.

Phase Two - One Bartholomew Close - Offices

One Bartholomew Close was sold to clients of Ashby Capital LLP ("Ashby") for GBP102.4m in August 2015. The demolition of the existing building and the construction of a new 12 storey office block of 213,125 sq ft commenced in January 2016 and is due to be completed in Q3 2018. Ashby's clients finance the development costs and, when the building is completed and successfully let, the joint venture will be entitled to receive a profit share payment. Helical is the development manager for delivery of the project.

Phase Three - Residential/retail/offices

Demolition work on Phase 3 of Barts Square is completed with pre-construction works now underway. This phase will comprise 92 apartments and 12,197 sq ft of retail space. Completion is due in Q3 2019 and marketing of the units is expected to commence in Q2 2018. The refurbishment of 54/58 Bartholomew Close to provide 10,200 sq ft of offices is expected to start in 2018 for completion in 2019.

Farringdon East, Smithfield EC1

We have an exclusivity agreement with Farringdon East Ltd whereby we will acquire the company with the intention of constructing a new consented 89,000 sq ft office building over the Farringdon East Crossrail Station with the benefit of a new 150 year lease from TFL. It is anticipated that the construction works will commence in Spring 2018 for completion by Q4 2019.

   --       West London 

The Shepherds Building, Shepherds Bush W14

This 151,000 sq ft multi-let office building close to the Westfield London shopping centre maintains an occupancy approaching 100%, as it has for the past ten consecutive years. The average contracted rent for the building is GBP45 psf with a total contracted rent of GBP6.64m. During the period we have completed new lettings totalling 8,987 sq ft and 1,573 sq ft since the period end.

Power Road Studios, Chiswick W4

The site comprises 58,404 sq ft of offices across five buildings and is multi-let to a wide range of predominantly media tenants. In October we completed the refurbishment of Studio 1, a project comprising 16,000 sq ft of air conditioned Grade A space, refurbished common parts and two new lift shafts to accommodate a consented future roof extension of 13,000 sq ft. Of the newly refurbished space, we pre-let 2,425 sq ft at GBP43 psf and have recently completed the letting of a further 5,916 sq ft at GBP43 psf. Preliminary works have been completed on a consented new 30,000 sq ft office building.

The Powerhouse, Chiswick W4

Helical acquired this 24,288 sq ft office and recording studios by way of sale and leaseback in 2013. The Powerhouse is a listed building on Chiswick High Road and is fully let on a long lease to Metropolis Music Group.

King Street, Hammersmith W6

Hammersmith & Fulham Borough Council, who have been opposed to this regeneration project since the Council became Labour controlled, have exercised their option to terminate the development agreement. With our partners Grainger plc we will now seek to maximise the value of the land held by the joint venture company and are in discussions with the Council with the aim of reaching agreement on this sale.

Manchester Offices

Manchester is a city with a diverse, thriving and growing economy which is widely regarded as England's second city and the centre of the "Northern Powerhouse". The assets we hold there are:

Churchgate and Lee House, Manchester

This asset, comprising 249,233 sq ft of multi let offices, was purchased in March 2014. Since purchase we have refurbished the reception and 75,254 sq ft of office space and the building is fully let. During the period we agreed a new ten year lease with Capita on 33,000 sq ft at GBP15.50 psf, an uplift of 7% on the previous rent. Looking forward we will continue with asset management initiatives to drive further rental and capital growth.

31 Booth Street, Manchester

This 25,441 sq ft office located in the prime city core was acquired in January 2016 for GBP4.7m. The building has been fully refurbished and was launched to the market in March 2017. The ground floor and basement has been let on an agreement to lease to Elevatione, a luxury boutique cosmetic retailer, and good interest is being shown in the remaining office space.

35 Dale Street, Manchester

35 Dale Street is a 51,634 sq ft office building situated in the Northern Quarter of Manchester. We have completed the refurbishment of the 3(rd) and 4(th) floor offices and agreed terms at GBP19 psf on that space. The refurbishment of the 1(st) and 2(nd) floors will commence in December 2017 with delivery expected in March 2018. All the available space on the 1(st) floor is under offer. The ground and lower ground floor space has been pre-let to Vibe Gym and Idle Hands (coffee shop).

Trinity Court, Manchester

Trinity Court, purchased in May 2017 for GBP12.9m, is a 47,443 sq ft office building situated in the central business district of Manchester. The building is currently 100% let with secured income until January 2018 at a passing rent of GBP26.94 psf. The building will be vacated in 2018 and a full refurbishment and extension will be implemented delivering 55,672 sq ft of new and refurbished office space to the market in early 2019.

Logistics

Helical owns 23 distribution and logistics units located around major UK transport networks. These units generally have few bespoke features making them straightforward to re-let if vacancies occur with low capital expenditure required. During the period, we sold our 189,349 sq ft warehouse at Hinckley, Leicestershire to an owner-occupier for its book value of GBP9.3m. We have completed a new ten year lease at the existing passing rent at Telford and have good interest from potential tenants in our remaining vacant asset in Doncaster.

Non-Core

Offices

Our regional offices, outside Manchester, comprise three fully let buildings located in Crawley, Reading and Glasgow which generate contracted rental income of GBP2.3m and have a combined value of GBP24.6m.

Retail Investments

During the period we sold our retail assets at Morgan Quarter, Cardiff, Great Yarmouth and Southend for a combined GBP73.3m, a premium to book value of 4.7%. At 30 September 2017, our single remaining retail investment is a 42,490 sq ft retail warehouse in Sevenoaks.

Retail Developments

During the period we completed our 79,750 sq ft retail park at Cortonwood Retail Park which was 100% pre-let and forward funded with clients of Aberdeen Asset Management. We also progressed our retail schemes at Truro, Evesham, Kingswinford and East Ham.

Retirement Villages

Our retirement village portfolio at 30 September 2017 consisted of four villages at Bramshott Place Liphook, Durrants Village Faygate, Millbrook Village Exeter and Maudslay Park Great Alne.

In November 2017, we sold our entire retirement village portfolio to L&G Capital for gross proceeds of GBP102m with GBP26m deferred for 12 months.

Total Portfolio by Fair Value

 
                           Investment        Development          Total         Proforma(1)  Proforma(1) 
                                 GBPm     %         GBPm     %     GBPm      %         GBPm            % 
-------------------------  ----------  ----  -----------  ----  -------  -----  -----------  ----------- 
London Offices 
 - Completed, let 
  and available to let          510.9  42.2         23.8   2.0    534.7   44.2        461.5         44.5 
 - Being redeveloped            200.7  16.6            -     -    200.7   16.6        200.7         19.4 
London Land and 
 Options                            -     -          8.0   0.6      8.0    0.6          8.0          0.8 
London Residential                  -     -         87.1   7.2     87.1    7.2         87.1          8.4 
-------------------------  ----------  ----  -----------  ----  -------  -----  -----------  ----------- 
Total London                    711.6  58.8        118.9   9.8    830.5   68.6        757.3         73.1 
Manchester Offices               87.6   7.2            -     -     87.6    7.2         87.6          8.4 
Logistics                       150.8  12.5            -     -    150.8   12.5        150.8         14.5 
------------------------- 
Total Core Portfolio            950.0  78.5        118.9   9.8  1,068.9   88.3        995.7         96.0 
 
Regional Offices                 24.6   2.1          0.5     -     25.1    2.1         25.2          2.4 
Retail                           10.0   0.8            -     -     10.0    0.8         10.0          1.0 
Retirement Villages              14.8   1.2         86.1   7.1    100.9    8.3            -            - 
Land                              0.1     -          5.8   0.5      5.9    0.5          5.9          0.6 
-------------------------  ----------  ----  -----------  ----  -------  -----  -----------  ----------- 
Total Non-Core Portfolio         49.5   4.1         92.4   7.6    141.9   11.7         41.1          4.0 
 
Total                           999.5  82.6        211.3  17.4  1,210.8  100.0      1,036.8        100.0 
-------------------------  ----------  ----  -----------  ----  -------  -----  -----------  ----------- 
 
 

(1) Proforma figures reflect the position at 30 September 2017, adjusted for the sales of C-Space, EC1 and the Retirement Village portfolio in November 2017.

Trading and Development Portfolio

 
                                                                        Proforma(1)  Proforma(1) 
                           Book Value  Fair Value  Surplus  Fair Value   Fair Value   Fair Value 
                                 GBPm        GBPm     GBPm           %         GBPm            % 
-------------------------  ----------  ----------  -------  ----------  -----------  ----------- 
London Offices                   15.8        23.8      8.0        11.3         23.8         19.0 
London Residential               84.1        87.1      3.0        41.2         87.1         69.6 
London Land and Options           8.0         8.0        -         3.8          8.0          6.4 
-------------------------  ----------  ----------  -------  ----------  -----------  ----------- 
Total London                    107.9       118.9     11.0        56.3        118.9           95 
Manchester Offices                  -           -        -           -            -            - 
Logistics                           -           -        -           -            -            - 
-------------------------  ----------  ----------  -------  ----------  -----------  ----------- 
Total core portfolio            107.9       118.9     11.0        56.3        118.9           95 
 
Regional Offices                  0.2         0.5      0.3         0.3          0.5          0.5 
Retail                              -           -        -           -            -            - 
Retirement Villages              86.1        86.1        -        40.7            -            - 
Land                              5.2         5.8      0.6         2.7          5.8          4.5 
-------------------------  ----------  ----------  -------  ----------  -----------  ----------- 
Total Non-Core Portfolio         91.5        92.4      0.9        43.7          6.3          5.0 
 
Total                           199.4       211.3     11.9       100.0        125.2        100.0 
-------------------------  ----------  ----------  -------  ----------  -----------  ----------- 
 

(1) Proforma figures reflect the position at 30 September 2017, adjusted for the sales of C-Space, EC1 and the Retirement Village portfolio in November 2017.

Capital Expenditure

We have a planned development and refurbishment programme.

 
                           Capex Budget   Remaining Spend  Pre-refurbished             Total Completed 
                        (Helical Share)   (Helical share)            Space  New Space            Space      Completion 
Property                           GBPm              GBPm            Sq ft      Sq ft            Sq ft            Date 
---------------------  ----------------  ----------------  ---------------  ---------  ---------------  -------------- 
Investment - 
committed 
207 Old Street, 
 London EC1                        97.2              49.2          114,000     65,000          179,000       July 2018 
35 Dale Street, 
 Manchester                         4.7               1.1           56,000          -           56,000        May 2018 
Trinity Court, 
 Manchester                         5.8               5.8           47,000      8,000           55,000      March 2019 
Investment - planned 
Barts Square, London 
 EC1                               10.8               1.5           27,000          -           27,000   December 2017 
Power Road Studios, 
 London W4                         20.1              20.1           59,000     43,000          102,000  September 2019 
Development - 
committed 
Barts Square, London 
 EC1 - Phase 1                     81.1              15.4                -    129,000          129,000      March 2018 
Barts Square, London 
 EC1 - Phase 3                     44.2              38.4                -     92,000           92,000  September 2019 
---------------------  ----------------  ----------------  ---------------  ---------  ---------------  -------------- 
 

Asset Management

Asset management is a critical component in driving Helical's performance. Through having well considered business plans and by maximising the combined skills of our management team, we are able to create value in our assets without relying on market movements.

 
                              Fair                                                                                                          ERV Change Like 
                             Value  Passing                                                                               ERV Change Since              for 
                         Weighting     Rent         Contracted(1) Rent           ERV         ERV Change Since March 2017        March 2017             Like 
 Investment portfolio            %     GBPm      %                GBPm      %   GBPm      %                         GBPm                 %                % 
----------------------  ----------  -------  -----  ------------------  -----  -----  -----  ---------------------------  ----------------  --------------- 
London Offices 
- Completed, let and 
 available to let             51.1     20.6   50.4                23.6   48.5   29.4   42.5                          0.4               1.3              1.3 
- Being redeveloped           20.1      1.3    3.2                 5.3   10.9   17.5   25.4                          1.7              10.8             10.8 
Total London                  71.2     21.9   53.6                28.9   59.4   46.9   67.9                          2.1               4.6              4.6 
Manchester Offices             8.8      5.0   12.2                 5.4   11.1    7.2   10.4                          1.6              28.7            (0.1) 
Logistics                     15.0     10.9   26.8                11.3   23.2   11.9   17.1                        (0.7)             (5.5)              0.9 
Total Core Portfolio          95.0     37.8   92.6                45.6   93.7   66.1   95.4                          3.0               4.8              3.4 
 
Regional Offices               2.5      2.3    5.5                 2.3    4.7    2.4    3.4                            -                 -                - 
Retail                         1.0      0.8    1.9                 0.8    1.6    0.8    1.2                        (5.4)            (87.0)                - 
Retirement Villages            1.5        -      -                   -      -      -      -                            -                 -                - 
Total Non-Core 
 Portfolio                     5.0      3.1    7.4                 3.1    6.3    3.2    4.6                        (5.4)            (62.9)                - 
 
Total                        100.0     40.9  100.0                48.7  100.0   69.2  100.0                        (2.4)             (3.4)              3.3 
----------------------  ----------  -------  -----  ------------------  -----  -----  -----  ---------------------------  ----------------  --------------- 
 
 

(1) Contracted rent includes GBP3.8m pre-let to WeWork at The Bower.

During the period, total contracted income reduced by GBP3.5m as the result of the sale of GBP82.6m of investment properties and losses from breaks and lease expiries, offset by the purchase of one investment property and rent from new lettings and rent reviews.

 
                                                                    Total Portfolio Contracted Rent 
                                                                                               GBPm 
------------------------------------------------------------------  ------------------------------- 
Contracted rent reduced through sales of investment properties                                (5.8) 
Contracted rent increased from purchases of investment properties                               1.3 
------------------------------------------------------------------  ------------------------------- 
Total contracted rental change from sales and purchases                                       (4.5) 
Rent lost at break/expiry                                                                     (0.7) 
Rent reviews and uplifts on lease renewals                                                      0.1 
New lettings                                                                                    1.6 
------------------------------------------------------------------  ------------------------------- 
Total increase in the period from asset management activities                                   1.0 
------------------------------------------------------------------  ------------------------------- 
Net decrease in contracted rents in the period                                                (3.5) 
------------------------------------------------------------------  ------------------------------- 
 

Investment Portfolio - as at 30 September 2017

Portfolio Yields

 
                                        EPRA Topped Up NIY  Reversionary 
                                                         %             % 
--------------------------------------  ------------------  ------------ 
London Offices 
- Completed, let and available to let                  4.3           5.3 
- Being redeveloped                                      -           5.8 
Manchester Offices                                     5.8           6.9 
Logistics                                              7.0           7.1 
-------------------------------------- 
Total Core Portfolio                                   5.0           5.9 
 
Regional Offices                                       8.7           8.7 
Retail                                                 7.4           7.6 
--------------------------------------  ------------------  ------------ 
Total Non-Core Portfolio                               8.3           8.3 
 
Total                                                  5.2           6.0 
--------------------------------------  ------------------  ------------ 
 

Capital Values, Vacancy Rates and Unexpired Lease Terms

 
                                        Capital value psf  Vacancy rate*   WAULT 
                                                      GBP              %   Years 
--------------------------------------  -----------------  -------------  ------ 
London Offices 
- Completed, let and available to let                 943            9.5     6.4 
- Being redeveloped                                   653              -       - 
Total London                                          838            9.5     6.4 
Manchester Offices                                    226           18.6     2.9 
Logistics                                              56            5.6     4.8 
Total Core Portfolio                                  242            7.4     6.1 
 
Regional Offices                                      174              -     6.6 
Retail                                                235              -     6.9 
Total Non-Core Portfolio                              188              -     6.6 
 
Total                                                 239            7.1     6.1 
--------------------------------------  -----------------  -------------  ------ 
 

*The vacancy rates exclude assets in the course of redevelopment.

Valuation Movements

 
                   Val Change 
                   inc Capex,               Val Change 
                      Sales &               inc Capex,  Investment Portfolio Weighting  Investment Portfolio Weighting 
                    Purchases   excl Sales & Purchases                  September 2017                      March 2017 
                            %                        %                               %                               % 
----------------  -----------  -----------------------  ------------------------------  ------------------------------ 
London Offices 
- Completed, let 
 and available 
 to let                   1.6                      1.6                            51.1                            49.3 
- Being 
 redeveloped              1.0                      1.0                            20.1                            12.4 
- Held for 
 future 
 development              n/a                      n/a                               -                             3.8 
----------------  -----------  -----------------------  ------------------------------  ------------------------------ 
Total London              1.5                      1.5                            71.2                            65.5 
Manchester 
 Offices                (0.1)                      0.2                             8.8                             7.0 
Logistics                 2.2                      2.3                            15.0                            15.4 
---------------- 
Total Core 
 Portfolio                1.4                      1.5                            95.0                            87.9 
 
Regional Offices        (0.9)                    (0.9)                             2.5                             2.3 
Retail                      -                        -                             1.0                             7.8 
Retirement 
 Villages              (25.6)                   (25.6)                             1.5                             2.0 
Total Non-Core 
 Portfolio              (4.3)                    (9.9)                             5.0                            12.1 
 
Total                     0.7                      0.8                           100.0                           100.0 
----------------  -----------  -----------------------  ------------------------------  ------------------------------ 
 

Lease Expiries or Tenant Break Options

 
                               Year to  Year to  Year to  Year to  Year to 
                                  2018     2019     2020     2021     2022 
-----------------------------  -------  -------  -------  -------  ------- 
% of rent roll                      11       11        7        7       18 
Number of leases                    86       52       38       11       32 
Average rent per lease (GBP)    59,072   97,340   84,900  270,787  248,644 
-----------------------------  -------  -------  -------  -------  ------- 
 

We have a strong rental income stream and a diverse tenant base, with the largest tenant in the portfolio accounting for only 8.7% of the rent roll. The top 10 tenants account for 36.7% of the total rent roll and the tenants come from a variety of industries.

 
                                                                     Rent  Rent Roll 
  Rank  Tenant                            Tenant Industry            GBPm          % 
------  --------------------------------  ------------------------  -----  --------- 
1       Endemol UK Limited                Media                       3.9        8.7 
2       MullenLowe Limited                Marketing Communications    2.6        5.8 
3       Gopivotal (UK) Limited            Technology                  2.0        4.5 
4       Farfetch UK Limited               Online Retail               1.9        4.2 
5       Sainsbury's Supermarkets Limited  Food Retail                 1.3        2.8 
6       Neulion Limited                   Technology                  1.0        2.3 
7       CBS Interactive Limited           Media                       1.0        2.3 
8       Allegis Group Limited             Recruitment                 1.0        2.2 
9       Anomaly UK Limited                Marketing                   0.9        2.0 
10      Stripe Payments UK Limited        Technology                  0.8        1.9 
------  --------------------------------  ------------------------  -----  --------- 
Total                                                                16.4       36.7 
----------------------------------------  ------------------------  -----  --------- 
 

Independent review report to the members of Helical plc

Introduction

We have reviewed the condensed set of financial statements in the half-yearly financial report of Helical Plc for the six months ended 30 September 2017 which comprises the Unaudited Consolidated Income Statement, the Unaudited Consolidated Balance Sheet, the Unaudited Consolidated Cash Flow Statement, the Unaudited Consolidated Statement of Changes in Equity and the related unaudited notes. We have read the other information contained in the half yearly financial report: Financial Highlights, Chief Executive's Statement, Financial Review and Helical's Property Portfolio and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company, as a body, in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company as a body, for our review work, for this report, or for the conclusion we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

Our responsibility

Our responsibility is to express a conclusion to the company on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

London

15 November 2017

Unaudited Consolidated Income Statement

For the Half Year to 30 September 2017

 
                                                                                                               Year to 
                                                                           Half Year to        Half Year to   31 March 
                                                                      30 September 2017   30 September 2016       2017 
                                                              Notes              GBP000              GBP000     GBP000 
------------------------------------------------------------  -----  ------------------  ------------------  --------- 
Revenue                                                           3              33,207              52,367     99,934 
------------------------------------------------------------  -----  ------------------  ------------------  --------- 
Net rental income                                                 4              18,037              23,911     46,162 
Development property (loss)/profit                                5             (9,520)                (83)        843 
Share of results of joint ventures                               13               3,382             (1,044)    (6,528) 
Other operating income/(expense)                                                     41                 (1)        982 
------------------------------------------------------------  -----  ------------------  ------------------  --------- 
Gross profit before net gain on sale and revaluation of 
 investment properties                                                           11,940              22,783     41,459 
Net gain on sale and revaluation of investment properties         6               3,370              26,353     40,543 
Change in fair value of available-for-sale investments           15               1,423             (1,179)    (3,352) 
------------------------------------------------------------  -----  ------------------  ------------------  --------- 
Gross profit                                                                     16,733              47,957     78,650 
Administrative expenses                                           7             (6,081)             (5,871)   (18,372) 
------------------------------------------------------------  -----  ------------------  ------------------  --------- 
Operating profit                                                                 10,652              42,086     60,278 
Finance costs                                                     8            (13,376)            (13,949)   (25,598) 
Finance income                                                                    1,154               1,199      3,156 
Change in fair value of derivative financial instruments                          2,884             (5,949)        789 
Change in fair value of Convertible Bond                                          (127)               7,663      2,973 
Foreign exchange gain                                                                22                   2        (3) 
------------------------------------------------------------  -----  ------------------  ------------------  --------- 
Profit before tax                                                                 1,209              31,052     41,595 
Tax on profit on ordinary activities                              9               (809)                 672    (2,471) 
------------------------------------------------------------  -----  ------------------  ------------------  --------- 
Profit for the period                                                               400              31,724     39,124 
------------------------------------------------------------  -----  ------------------  ------------------  --------- 
 
Earnings per share                                               11 
Basic                                                                              0.3p               27.8p      34.0p 
Diluted                                                                            0.3p               26.6p      33.2p 
------------------------------------------------------------  -----  ------------------  ------------------  --------- 
 

Unaudited Consolidated Statement of Comprehensive Income

For the Half Year to 30 September 2017

 
                                                                                                               Year to 
                                                                           Half Year to        Half Year to   31 March 
                                                                      30 September 2017   30 September 2016       2017 
                                                                                 GBP000              GBP000     GBP000 
-------------------------------------------------------------------  ------------------  ------------------  --------- 
Profit for the period                                                               400              31,724     39,124 
Exchange difference on retranslation of net investments in foreign 
 operations                                                                        (18)                  21         48 
-------------------------------------------------------------------  ------------------  ------------------  --------- 
Total comprehensive income for the period                                           382              31,745     39,172 
-------------------------------------------------------------------  ------------------  ------------------  --------- 
 

The exchange differences on retranslation of net investments in foreign operations will be reclassified to the Income Statement on disposal.

Unaudited Consolidated Balance Sheet

At 30 September 2017

 
                                                                                                            At 
                                                                             At                  At   31 March 
                                                              30 September 2017   30 September 2016       2017 
                                                      Notes              GBP000              GBP000     GBP000 
----------------------------------------------------  -----  ------------------  ------------------  --------- 
Non-current assets 
Investment properties                                    12             963,481           1,034,687    987,560 
Owner occupied property, plant and equipment                              2,013               2,147      2,124 
Investment in joint ventures                             13              23,264              26,259     19,882 
----------------------------------------------------  -----  ------------------  ------------------  --------- 
                                                                        988,758           1,063,093  1,009,566 
----------------------------------------------------  -----  ------------------  ------------------  --------- 
Current assets 
Land, developments and trading properties                14              95,476              88,294     86,680 
Available-for-sale investments                           15                   -               1,991          - 
Corporate tax receivable                                                  3,358               1,335      3,320 
Trade and other receivables                              16              60,322              77,485     73,925 
Cash and cash equivalents                                17             104,341              52,945     99,262 
----------------------------------------------------  -----  ------------------  ------------------  --------- 
                                                                        263,497             222,050    263,187 
----------------------------------------------------  -----  ------------------  ------------------  --------- 
Total assets                                                          1,252,255           1,285,143  1,272,753 
----------------------------------------------------  -----  ------------------  ------------------  --------- 
Current liabilities 
Trade and other payables                                 18            (57,650)            (62,408)   (56,349) 
Borrowings                                               19             (4,133)               (901)    (2,517) 
----------------------------------------------------  -----  ------------------  ------------------  --------- 
                                                                       (61,783)            (63,309)   (58,866) 
----------------------------------------------------  -----  ------------------  ------------------  --------- 
Non-current liabilities 
Borrowings                                               19           (657,410)           (685,404)  (671,184) 
Derivative financial instruments                         20            (10,095)            (20,721)   (13,981) 
Deferred tax liability                                    9            (12,734)             (6,800)   (11,825) 
----------------------------------------------------  -----  ------------------  ------------------  --------- 
                                                                      (680,239)           (712,925)  (696,990) 
----------------------------------------------------  -----  ------------------  ------------------  --------- 
Total liabilities                                                     (742,022)           (776,234)  (755,856) 
----------------------------------------------------  -----  ------------------  ------------------  --------- 
 
Net assets                                                              510,233             508,909    516,897 
----------------------------------------------------  -----  ------------------  ------------------  --------- 
 
Equity 
Called-up share capital                                  21               1,450               1,447      1,447 
Share premium account                                                    98,798              98,798     98,798 
Revaluation reserve                                                     182,183             171,600    164,190 
Capital redemption reserve                                                7,478               7,478      7,478 
Other reserves                                                              291                 291        291 
Retained earnings                                                       220,033             229,295    244,693 
----------------------------------------------------  -----  ------------------  ------------------  --------- 
Equity attributable to equity holders of the parent                     510,233             508,909    516,897 
Non-controlling interests                                                     -                   -          - 
----------------------------------------------------  -----  ------------------  ------------------  --------- 
Total equity                                                            510,233             508,909    516,897 
----------------------------------------------------  -----  ------------------  ------------------  --------- 
 

Unaudited Consolidated Cash Flow Statement

For the Half Year to 30 September 2017

 
                                                                                                           Year to 
                                                                       Half Year to        Half Year to   31 March 
                                                                  30 September 2017   30 September 2016       2017 
                                                                             GBP000              GBP000     GBP000 
---------------------------------------------------------------  ------------------  ------------------  --------- 
Cash flows from operating activities 
Profit before tax                                                             1,209              31,052     41,595 
Depreciation                                                                    151                 204        391 
Net revaluation gain on investment properties                               (2,145)            (29,141)   (39,152) 
(Gain)/loss on sale of investment properties                                (1,225)               2,788    (1,391) 
Profit on sale of plant and equipment                                             -                (13)       (56) 
Net financing costs                                                          12,222              12,750     22,442 
Change in value of derivative financial instruments                         (2,884)               5,949      (789) 
Change in fair value of Convertible Bond                                        127             (7,663)    (2,973) 
Share based payment charge                                                      321                 283      1,672 
Share of results of joint ventures                                          (3,382)               1,044      6,528 
Change in fair value of available-for-sale investment                       (1,423)               1,179      3,352 
Foreign exchange movement                                                      (22)                  32          6 
---------------------------------------------------------------  ------------------  ------------------  --------- 
Cash inflows from operations before changes in working capital                2,949              18,464     31,625 
---------------------------------------------------------------  ------------------  ------------------  --------- 
Change in trade and other receivables                                        14,339             (4,319)        876 
Change in land, developments and trading properties                         (6,734)               5,451      3,789 
Change in trade and other payables                                            (841)             (7,625)    (9,338) 
---------------------------------------------------------------  ------------------  ------------------  --------- 
Cash inflows generated from operations                                        9,713              11,971     26,952 
---------------------------------------------------------------  ------------------  ------------------  --------- 
Finance costs                                                              (16,407)            (17,028)   (33,041) 
Finance income                                                                   56                 627      1,413 
Tax received/(paid)                                                               5             (2,928)    (3,392) 
---------------------------------------------------------------  ------------------  ------------------  --------- 
                                                                           (16,346)            (19,329)   (35,020) 
---------------------------------------------------------------  ------------------  ------------------  --------- 
Cash flows from operating activities                                        (6,633)             (7,358)    (8,068) 
---------------------------------------------------------------  ------------------  ------------------  --------- 
Cash flows from investing activities 
Additions to investment property                                           (49,175)            (26,022)   (59,310) 
Sale of investment property                                                  80,578              54,919    156,254 
Dividends from joint ventures                                                     -                 687      1,580 
Receipts from/(purchases of) available for sale asset                         1,423                (56)      (238) 
Sale of plant and equipment                                                       -                  49        178 
Purchase of leasehold improvements, plant and equipment                        (40)               (193)      (442) 
---------------------------------------------------------------  ------------------  ------------------  --------- 
Net cash generated from investing activities                                 32,786              29,384     98,022 
---------------------------------------------------------------  ------------------  ------------------  --------- 
Cash flows from financing activities 
Borrowings drawn down                                                        11,704              15,725     41,986 
Borrowings repaid                                                          (25,526)            (57,709)  (102,887) 
Shares issued                                                                     3                   -          - 
Purchase of own shares                                                            -               (944)      (944) 
Equity dividends paid                                                       (7,261)               (823)    (3,566) 
---------------------------------------------------------------  ------------------  ------------------  --------- 
Net cash used by financing activities                                      (21,080)            (43,751)   (65,411) 
---------------------------------------------------------------  ------------------  ------------------  --------- 
Net increase/(decrease) in cash and cash equivalents                          5,073            (21,725)     24,543 
Exchange gains on cash and cash equivalents                                       6                   -         49 
Cash and cash equivalents at start of period                                 99,262              74,670     74,670 
---------------------------------------------------------------  ------------------  ------------------  --------- 
Cash and cash equivalents at end of period                                  104,341              52,945     99,262 
---------------------------------------------------------------  ------------------  ------------------  --------- 
 

Unaudited Consolidated Statement of Changes in Equity

At 30 September 2017

 
                                                          Capital 
                        Share     Share  Revaluation   redemption      Other                     Own shares 
                      capital   premium      reserve      reserve   reserves  Retained earnings        held    Total 
                       GBP000    GBP000       GBP000       GBP000     GBP000             GBP000      GBP000   GBP000 
-------------------  --------  --------  -----------  -----------  ---------  -----------------  ----------  ------- 
At 31 March 2016        1,447    98,798      143,699        7,478        291            229,008           -  480,721 
Total comprehensive 
 income                     -         -            -            -          -             39,172           -   39,172 
Revaluation surplus         -         -       39,152            -          -           (39,152)           -        - 
Realised on 
 disposals                  -         -     (18,661)            -          -             18,661           -        - 
Performance share 
 plan                       -         -            -            -          -              1,672           -    1,672 
Performance share 
 plan - deferred 
 tax                        -         -            -            -          -            (2,062)           -  (2,062) 
Share settled bonus         -         -            -            -          -              1,904           -    1,904 
Dividends paid              -         -            -            -          -            (3,566)           -  (3,566) 
Purchase of own 
 shares                     -         -            -            -          -                  -       (944)    (944) 
Own shares held 
 reserve transfer           -         -            -            -          -              (944)         944        - 
-------------------  --------  --------  -----------  -----------  ---------  -----------------  ----------  ------- 
At 31 March 2017        1,447    98,798      164,190        7,478        291            244,693           -  516,897 
Total comprehensive 
 income                     -         -            -            -          -                382           -      382 
Revaluation surplus         -         -        2,145            -          -            (2,145)           -        - 
Realised on 
 disposals                  -         -       15,848            -          -           (15,848)           -        - 
Issued share 
 capital                    3         -            -            -          -                  -           -        3 
Performance share 
 plan                       -         -            -            -          -                321           -      321 
Performance share 
 plan - deferred 
 tax                        -         -            -            -          -              (109)           -    (109) 
Dividends paid              -         -            -            -          -            (7,261)           -  (7,261) 
-------------------  --------  --------  -----------  -----------  ---------  -----------------  ----------  ------- 
At 30 September 
 2017                   1,450    98,798      182,183        7,478        291            220,033           -  510,233 
-------------------  --------  --------  -----------  -----------  ---------  -----------------  ----------  ------- 
 
 

For a breakdown of total comprehensive income see the Unaudited Consolidated Statement of Comprehensive Income.

The adjustment against retained earnings of GBP321,000 (31 March 2017: GBP1,672,000) adds back the share based payments charge in accordance with IFRS 2 Share Based Payments.

There were net transactions with owners of GBP7,046,000 (31 March 2017: GBP2,996,000) made up of the Performance Share Plan credit of GBP321,000 (31 March 2017: GBP1,672,000) and related deferred tax debit of GBP109,000 (31 March 2017: GBP2,062,000), dividends paid of GBP7,261,000 (31 March 2017: GBP3,566,000), the issue of share capital of GBP3,000 (31 March 2017: GBPnil), the purchase of own shares of GBPnil (31 March 2017: GBP944,000) and the share settled bonus of GBPnil (31 March 2017: GBP1,904,000).

 
                                                             Capital 
                           Share     Share  Revaluation   redemption      Other   Retained  Own shares 
                         capital   premium      reserve      reserve   reserves   earnings        held    Total 
                          GBP000    GBP000       GBP000       GBP000     GBP000     GBP000      GBP000   GBP000 
----------------------  --------  --------  -----------  -----------  ---------  ---------  ----------  ------- 
At 31 March 2016           1,447    98,798      143,699        7,478        291    229,008           -  480,721 
Total comprehensive 
 income                        -         -            -            -          -     31,745           -   31,745 
Revaluation surplus            -         -       29,141            -          -   (29,141)           -        - 
Realised on disposals          -         -      (1,240)            -          -      1,240           -        - 
Performance share 
 plan                          -         -            -            -          -        283           -      283 
Performance share 
 plan - deferred tax           -         -            -            -          -    (1,748)           -  (1,748) 
Share settled bonus            -         -            -            -          -      (325)           -    (325) 
Dividends paid                 -         -            -            -          -      (823)           -    (823) 
Purchase of own 
 shares                        -         -            -            -          -          -       (944)    (944) 
Own shares held 
 reserve transfer              -         -            -            -          -      (944)         944        - 
----------------------  --------  --------  -----------  -----------  ---------  ---------  ----------  ------- 
At 30 September 
 2016                      1,447    98,798      171,600        7,478        291    229,295           -  508,909 
----------------------  --------  --------  -----------  -----------  ---------  ---------  ----------  ------- 
 
 

The adjustment against retained earnings of GBP283,000 adds back the share based payments charge in accordance with IFRS 2 Share Based Payments.

There were net transactions with owners of GBP3,557,000 made up of the performance share plan credit of GBP283,000 and related deferred tax debit of GBP1,748,000, dividends paid of GBP823,000, the purchase of own shares of GBP944,000 and the share settled bonus of GBP325,000.

Unaudited Notes to the Half Year Results

1. Financial Information

The financial information contained in this statement does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The full accounts for the year ended 31 March 2017, which were prepared under International Financial Reporting Standards as adopted by the European Union and which received an unqualified report from the Auditors, and did not contain a statement under Section 498(2) or Section 498(3) of the Companies Act 2006, have been filed with the Registrar of Companies.

These interim condensed unaudited consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union. The principal accounting policies have remained unchanged from the prior financial period to 31 March 2017.

These interim condensed unaudited consolidated financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2017.

The Directors have a reasonable expectation that the Group will continue in operational existence for the foreseeable future and have, therefore, used the going concern basis in preparing the financial statements.

Principal Risks and Uncertainties

The responsibility for the governance of the Group's risk profile lies with the Board of Directors of Helical. The Board is responsible for setting the Group's risk strategy by assessing risks, determining its willingness to accept those risks and ensuring that the risks are monitored and that the Group is aware of and, if appropriate, reacts to changes in those risks. The Board is also responsible for allocating responsibility for risk within the Group's management structure.

The Group considers its principal risks to be:

   --    strategic risk; 
   --    financial risk; 
   --    operational risk; and 
   --    reputational risk. 

There have been no significant changes to these risk areas in the period nor are there expected to be for the half year to 31 March 2018. A further analysis of these risks is included within the consolidated financial statements of the Group for the year ended 31 March 2017.

Use of Estimates and Judgements

The estimates and judgements have remained unchanged from the prior financial year to 31 March 2017.

2. Statement of Directors' Responsibilities

Each of the Directors confirms that, to the best of his knowledge, the condensed set of unaudited consolidated financial statements, which has been prepared in accordance with IAS 34 as adopted by the European Union, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer, or the undertakings included in the consolidation as a whole and that the interim management report herein includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R.

Balances with related parties at 30 September 2017, 30 September 2016 and 31 March 2017 are disclosed in note 24.

A list of current Directors is maintained at 5 Hanover Square, London W1S 1HQ and at www.helical.co.uk.

The half year statement was approved by the Board on 15 November 2017 and is available from the Company's registered office at 5 Hanover Square, London W1S 1HQ and on the Company's website at www.helical.co.uk.

On behalf of the Board

Tim Murphy

Finance Director

15 November 2017

3. Segmental Information

The Group identifies two discrete operating segments whose results are regularly reviewed by the Chief Operating Decision Maker (the Chief Executive) to allocate resources to these segments and to assess their performance. The segments are:

-- investment properties, which are owned or leased by the Group for long-term income and for capital appreciation, and trading properties, which are owned or leased with the intention to sell; and,

-- development properties, which include sites, developments in the course of construction, completed developments available for sale, and pre-sold developments.

 
                            Investment                                        Investment 
                           and Trading   Developments          Total         and Trading   Developments          Total 
                          Half Year to   Half Year to   Half Year to        Half Year to   Half Year to   Half Year to 
                              30.09.17       30.09.17       30.09.17            30.09.16       30.09.16       30.09.16 
Revenue                         GBP000         GBP000         GBP000              GBP000         GBP000         GBP000 
------------------  ------------------  -------------  -------------  ------------------  -------------  ------------- 
Rental income                   20,178              -         20,178              25,531              -         25,531 
Development 
 property income                     -         12,962         12,962                   -         26,836         26,836 
Other revenue                       67              -             67                   -              -              - 
------------------  ------------------  -------------  -------------  ------------------  -------------  ------------- 
Revenue                         20,245         12,962         33,207              25,531         26,836         52,367 
------------------  ------------------  -------------  -------------  ------------------  -------------  ------------- 
 
 
 
                                 Investment 
                                and Trading  Developments      Total 
                                    Year to       Year to    Year to 
                                   31.03.17      31.03.17   31.03.17 
Revenue                              GBP000        GBP000     GBP000 
----------------------------  -------------  ------------  --------- 
Rental income                        48,835             -     48,835 
Development property income               -        49,994     49,994 
Other revenue                         1,105             -      1,105 
----------------------------  -------------  ------------  --------- 
Revenue                              49,940        49,994     99,934 
----------------------------  -------------  ------------  --------- 
 
 
 
                           Investment                                   Investment and 
                          and Trading   Developments          Total            Trading   Developments          Total 
                         Half Year to   Half Year to   Half Year to       Half Year to   Half Year to   Half Year to 
                             30.09.17       30.09.17       30.09.17           30.09.16       30.09.16       30.09.16 
Profit before tax              GBP000         GBP000         GBP000             GBP000         GBP000         GBP000 
------------------  -----------------  -------------  -------------  -----------------  -------------  ------------- 
Net rental income              18,034              3         18,037             23,935           (24)         23,911 
Development 
 property loss                      -        (9,520)        (9,520)                  -           (83)           (83) 
Share of results 
 of joint ventures              2,419            963          3,382              (704)          (340)        (1,044) 
Gain on sale and 
 revaluation of 
 investment 
 properties                     3,370              -          3,370             26,353              -         26,353 
------------------  -----------------  -------------  -------------  -----------------  -------------  ------------- 
                               23,823        (8,554)         15,269             49,584          (447)         49,137 
Fair value 
 movement of 
 available for 
 sale assets                                                  1,423                                          (1,179) 
Other operating 
 income/(expense)                                                41                                              (1) 
------------------  -----------------  -------------  -------------  -----------------  -------------  ------------- 
Gross profit                                                 16,733                                           47,957 
Administrative 
 expenses                                                   (6,081)                                          (5,871) 
Net finance costs                                           (9,465)                                         (11,036) 
Foreign exchange 
 gain                                                            22                                                2 
------------------  -----------------  -------------  -------------  -----------------  -------------  ------------- 
Profit before tax                                             1,209                                           31,052 
------------------  -----------------  -------------  -------------  -----------------  -------------  ------------- 
 
 
 
                                                          Investment 
                                                         and Trading    Developments       Total 
                                                             Year to         Year to     Year to 
                                                            31.03.17        31.03.17    31.03.17 
Profit before tax                                             GBP000          GBP000      GBP000 
------------------------------------------------------  ------------  --------------  ---------- 
Net rental income                                             46,213            (51)      46,162 
Development property profit                                        -             843         843 
Share of results of joint ventures                           (2,049)         (4,479)     (6,528) 
Gain on sale and revaluation of investment properties         40,543               -      40,543 
------------------------------------------------------  ------------  --------------  ---------- 
                                                              84,707         (3,687)      81,020 
Fair value movement of available for sale assets                                         (3,352) 
Other operating income                                                                       982 
------------------------------------------------------  ------------  --------------  ---------- 
Gross profit                                                                              78,650 
Administrative expenses                                                                 (18,372) 
Net finance costs                                                                       (18,680) 
Foreign exchange loss                                                                        (3) 
------------------------------------------------------  ------------  --------------  ---------- 
Profit before tax                                                                         41,595 
------------------------------------------------------  ------------  --------------  ---------- 
 
 
                            Investment and                                   Investment 
                                   Trading    Developments          Total   and Trading    Developments          Total 
                               At 30.09.17     At 30.09.17    At 30.09.17   At 30.09.16     At 30.09.16    At 30.09.16 
Balance sheet                       GBP000          GBP000         GBP000        GBP000          GBP000         GBP000 
--------------------  --------------------  --------------  -------------  ------------  --------------  ------------- 
Investment 
 properties                        963,481               -        963,481     1,034,687               -      1,034,687 
Land, development 
 and trading 
 properties                             28          95,448         95,476            28          88,266         88,294 
Investment in joint 
 ventures                            4,233          19,031         23,264         3,192          23,067         26,259 
--------------------  --------------------  --------------  -------------  ------------  --------------  ------------- 
                                   967,742         114,479      1,082,221     1,037,907         111,333      1,149,240 
Other assets                                                      170,034                                      135,903 
--------------------  --------------------  --------------  -------------  ------------  --------------  ------------- 
Total assets                                                    1,252,255                                    1,285,143 
Liabilities                                                     (742,022)                                    (776,234) 
--------------------  --------------------  --------------  -------------  ------------  --------------  ------------- 
Net assets                                                        510,233                                      508,909 
--------------------  --------------------  --------------  -------------  ------------  --------------  ------------- 
 
 
 
                                              Investment 
                                             and Trading  Developments         Total 
                                             At 31.03.17   At 31.03.17   At 31.03.17 
Balance sheet                                     GBP000        GBP000        GBP000 
-----------------------------------------  -------------  ------------  ------------ 
Investment properties                            987,560             -       987,560 
Land, development and trading properties              28        86,652        86,680 
Investment in joint ventures                       1,814        18,068        19,882 
-----------------------------------------  -------------  ------------  ------------ 
                                                 989,402       104,720     1,094,122 
Other assets                                                                 178,631 
-----------------------------------------  -------------  ------------  ------------ 
Total assets                                                               1,272,753 
Liabilities                                                                (755,856) 
-----------------------------------------  -------------  ------------  ------------ 
Net assets                                                                   516,897 
-----------------------------------------  -------------  ------------  ------------ 
 

4. Net Rental Income

 
                                                                                                   Year to 
                                                               Half Year to        Half Year to   31 March 
                                                          30 September 2017   30 September 2016       2017 
                                                                     GBP000              GBP000     GBP000 
-------------------------------------------------------  ------------------  ------------------  --------- 
Gross rental income                                                  20,178              25,531     48,835 
Rents payable                                                          (83)                (17)       (68) 
Property overheads                                                  (1,991)             (1,378)    (2,283) 
-------------------------------------------------------  ------------------  ------------------  --------- 
Net rental income                                                    18,104              24,136     46,484 
Net rental income attributable to profit share partner                 (67)               (225)      (322) 
-------------------------------------------------------  ------------------  ------------------  --------- 
Group share of net rental income                                     18,037              23,911     46,162 
-------------------------------------------------------  ------------------  ------------------  --------- 
 

5. Development Property (Loss)/Profit

 
                                                                               Year to 
                                           Half Year to        Half Year to   31 March 
                                      30 September 2017   30 September 2016       2017 
                                                 GBP000              GBP000     GBP000 
-----------------------------------  ------------------  ------------------  --------- 
Development property income                      12,962              26,836     49,994 
Cost of sales                                  (10,974)            (18,938)   (37,576) 
Sales expenses                                     (53)             (4,012)    (5,275) 
Provision against book values                  (11,455)             (3,969)    (6,300) 
-----------------------------------  ------------------  ------------------  --------- 
Development property (loss)/profit              (9,520)                (83)        843 
-----------------------------------  ------------------  ------------------  --------- 
 

6. Net Gain on Sale and Revaluation of Investment Properties

 
                                                                                                      Year to 
                                                                  Half Year to        Half Year to   31 March 
                                                             30 September 2017   30 September 2016       2017 
                                                                        GBP000              GBP000     GBP000 
----------------------------------------------------------  ------------------  ------------------  --------- 
Net proceeds from the sale of investment properties                     81,489              54,919    156,939 
Book value (note 12)                                                  (79,203)            (57,243)  (154,863) 
Tenants incentives on sold investment properties                       (1,061)               (464)      (685) 
----------------------------------------------------------  ------------------  ------------------  --------- 
Gain/(loss) on sale of investment properties                             1,225             (2,788)      1,391 
Revaluation surplus on investment properties                             2,145              29,141     39,152 
----------------------------------------------------------  ------------------  ------------------  --------- 
Net gain on sale and revaluation of investment properties                3,370              26,353     40,543 
----------------------------------------------------------  ------------------  ------------------  --------- 
 

7. Administrative Expenses

 
                                                                                             Year to 
                                                         Half Year to        Half Year to   31 March 
                                                    30 September 2017   30 September 2016       2017 
                                                               GBP000              GBP000     GBP000 
-------------------------------------------------  ------------------  ------------------  --------- 
Administration costs                                          (5,606)             (5,801)   (10,799) 
Performance related awards                                      (340)               (285)    (6,854) 
National Insurance on performance related awards                (135)                 215      (719) 
-------------------------------------------------  ------------------  ------------------  --------- 
Administrative expenses                                       (6,081)             (5,871)   (18,372) 
-------------------------------------------------  ------------------  ------------------  --------- 
 
   8.         Finance Costs 
 
                                                                                                 Year to 
                                                             Half Year to        Half Year to   31 March 
                                                        30 September 2017   30 September 2016       2017 
                                                                   GBP000              GBP000     GBP000 
-----------------------------------------------------  ------------------  ------------------  --------- 
Interest payable on bank loans, bonds and overdrafts             (14,471)            (14,923)   (28,586) 
Other interest payable and similar charges                        (2,353)             (2,520)    (4,913) 
Interest capitalised                                                3,448               3,494      7,901 
-----------------------------------------------------  ------------------  ------------------  --------- 
Finance costs                                                    (13,376)            (13,949)   (25,598) 
-----------------------------------------------------  ------------------  ------------------  --------- 
 

9. Tax on Profit on Ordinary Activities

 
                                                                                      Year to 
                                                  Half Year to        Half Year to   31 March 
                                             30 September 2017   30 September 2016       2017 
                                                        GBP000              GBP000     GBP000 
------------------------------------------  ------------------  ------------------  --------- 
The tax (charge)/credit is based on the profit for the period and represents: 
United Kingdom corporation tax at 19% 
- Group corporation tax                                      -                   -          - 
- Adjustment in respect of prior periods                  (10)                   -      1,521 
- Overseas tax                                               -                   2          2 
------------------------------------------  ------------------  ------------------  --------- 
Current tax (charge)/credit                               (10)                   2      1,523 
 
Deferred tax 
- Capital allowances                                       403               (847)    (1,023) 
- Tax losses                                             1,158                 674    (4,347) 
- Unrealised chargeable gains                          (1,562)               (164)      1,803 
- Other temporary differences                            (798)               1,007      (427) 
------------------------------------------  ------------------  ------------------  --------- 
Deferred tax (charge)/credit                             (799)                 670    (3,994) 
------------------------------------------  ------------------  ------------------  --------- 
Total tax (charge)/credit for period                     (809)                 672    (2,471) 
------------------------------------------  ------------------  ------------------  --------- 
 
 
                                                                              At 
                                               At                  At   31 March 
                                30 September 2017   30 September 2016       2017 
Deferred tax                               GBP000              GBP000     GBP000 
----------------------------  -------------------  ------------------  --------- 
Capital allowances                        (2,566)             (2,793)    (2,969) 
Tax losses                                  9,332              13,195      8,174 
Unrealised chargeable gains              (23,893)            (24,298)   (22,331) 
Other temporary differences                 4,393               7,096      5,301 
----------------------------  -------------------  ------------------  --------- 
Deferred tax liability                   (12,734)             (6,800)   (11,825) 
----------------------------  -------------------  ------------------  --------- 
 

Under IAS 12, deferred tax provisions are made for the tax that would potentially be payable on the realisation of investment properties and other assets at book value.

If upon sale of the investment properties the group retained all the capital allowances, the deferred tax provision in respect of capital allowances of GBP2,566,000 would be released and further capital allowances of GBP26,254,000 would be available to reduce future tax liabilities.

The net deferred tax asset in respect of other temporary differences arises from tax relief available to the Group on the mark to market valuation of financial instruments, the future vesting of share awards and other timing differences.

10. Dividends

 
                                                                                                    Year to 
                                                                Half Year to        Half Year to   31 March 
                                                           30 September 2017   30 September 2016       2017 
                                                                      GBP000              GBP000     GBP000 
--------------------------------------------------------  ------------------  ------------------  --------- 
Attributable to equity share capital 
Ordinary 
- Interim paid 2.40p per share                                             -                   -      2,743 
- Prior period final paid 6.20p per share (2016: 0.72p)                7,261                 823        823 
--------------------------------------------------------  ------------------  ------------------  --------- 
                                                                       7,261                 823      3,566 
--------------------------------------------------------  ------------------  ------------------  --------- 
 

The interim dividend of 2.50p (30 September 2016: 2.40p per share) was approved by the Board on 14 November 2017 and will be paid on 22 December 2017 to Shareholders on the register on 24 November 2017. This interim dividend, amounting to GBP2,934,000 has not been included as a liability as at 30 September 2017.

11. Earnings Per Share

The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. This is a different basis to the net asset per share calculations which are based on the number of shares at the year end. Shares held by the Helical Employees' Share Ownership Plan Trust (the "ESOP"), which has waived its entitlement to receive dividends, are treated as cancelled for the purpose of this calculation.

The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares and the post tax effect of dividends on the assumed exercise of all dilutive options.

The earnings per share is calculated in accordance with IAS 33 and the best practice recommendations of the European Public Real Estate Association ("EPRA").

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:

 
                                                                                                             Year to 
                                                                        Half Year to         Half Year to   31 March 
                                                                   30 September 2017    30 September 2016       2017 
                                                                               000's                000's      000's 
--------------------------------------------------------------  --------------------  -------------------  --------- 
Ordinary shares in issue                                                     118,534              118,184    118,196 
Weighting adjustment                                                         (1,426)              (3,901)    (3,110) 
---------------------------------------------------------------  -------------------  -------------------  --------- 
Weighted average ordinary shares in issue for calculation of 
 basic and EPRA earnings per share                                           117,108              114,283    115,086 
Weighted average ordinary shares issued on share settled 
 bonuses                                                                         840                1,197      1,402 
Weighted average ordinary shares to be issued under performance 
 share plan                                                                    1,600                3,700      1,403 
---------------------------------------------------------------  -------------------  -------------------  --------- 
Weighted average ordinary shares in issue for calculation of 
 diluted earnings per share                                                  119,548              119,180    117,891 
---------------------------------------------------------------  -------------------  -------------------  --------- 
                                                                              GBP000               GBP000     GBP000 
---------------------------------------------------------------  -------------------  -------------------  --------- 
Earnings used for calculation of basic and diluted earnings per 
 share                                                                           400               31,724     39,124 
---------------------------------------------------------------  -------------------  -------------------  --------- 
Basic earnings per share                                                        0.3p                27.8p      34.0p 
Diluted earnings per share                                                      0.3p                26.6p      33.2p 
---------------------------------------------------------------  -------------------  -------------------  --------- 
 
 
 
 
                                                                             GBP000    GBP000    GBP000 
-------------------------------------------------------------------------  --------  --------  -------- 
Earnings used for calculation of basic and diluted earnings per share           400    31,724    39,124 
Net gain on sale and revaluation of investment properties - subsidiaries    (3,370)  (26,353)  (40,543) 
     - joint ventures                                                       (2,331)       518     1,929 
Tax on profit/(loss) on disposal of investment properties                       659     (308)       420 
Fair value movement on derivative financial instruments - subsidiaries      (2,884)     5,949     (789) 
     - joint ventures                                                             6         -        42 
Fair value movement on Convertible Bond                                         127   (7,663)   (2,973) 
Fair value movement of available-for-sale investment                        (1,423)     1,179     3,352 
Deferred tax on adjusting items                                               1,876      (66)      (37) 
-------------------------------------------------------------------------  --------  --------  -------- 
(Loss)/earnings used for calculations of EPRA earnings per share            (6,940)     4,980       525 
-------------------------------------------------------------------------  --------  --------  -------- 
 
EPRA (loss)/earnings per share                                               (5.9p)      4.4p      0.5p 
-------------------------------------------------------------------------  --------  --------  -------- 
 

The earnings used for the calculation of EPRA earnings per share includes net rental income and development property profits but excludes trading property gains.

12. Investment Properties

 
                                                                                                      Year to 
                                                                  Half Year to        Half Year to   31 March 
                                                             30 September 2017   30 September 2016       2017 
                                                                        GBP000              GBP000     GBP000 
----------------------------------------------------------  ------------------  ------------------  --------- 
Book value at 1 April                                                  987,560           1,035,033  1,035,033 
Additions at cost                                                       50,559              27,806     68,778 
Disposals                                                             (79,203)            (57,243)  (154,863) 
Revaluation surplus                                                      2,145              29,141     39,152 
Revaluation surplus attributable to profit share partners                2,420                (50)      (540) 
----------------------------------------------------------  ------------------  ------------------  --------- 
As at period end                                                       963,481           1,034,687    987,560 
----------------------------------------------------------  ------------------  ------------------  --------- 
 

All properties are stated at market value as at 30 September 2017, and are valued by professionally qualified external valuers (Cushman & Wakefield LLP) in accordance with the Valuation-Professional Standards published by the Royal Institution of Chartered Surveyors. The fair value of the investment properties at 30 September 2017 is as follows:

 
                                                                      Half Year to                        Year to 
                                                                      30 September        Half Year to   31 March 
                                                                              2017   30 September 2016       2017 
                                                                            GBP000              GBP000     GBP000 
-------------------------------------------------------------------  -------------  ------------------  --------- 
Book value                                                                 963,481           1,034,687    987,560 
Lease incentives and costs included in trade and other receivables          16,065              11,323     15,440 
-------------------------------------------------------------------  -------------  ------------------  --------- 
Fair value                                                                 979,546           1,046,010  1,003,000 
-------------------------------------------------------------------  -------------  ------------------  --------- 
 

Interest capitalised in respect of the refurbishment of investment properties at 30 September 2017 amounted to GBP7,174,000 (30 September 2016: GBP8,355,000; 31 March 2017: GBP10,972,000). Interest capitalised during the period in respect of the refurbishment of investment properties amounted to GBP408,000.

The historical cost of investment property is GBP791,823,000 (30 September 2016: GBP861,338,000; 31 March 2017: GBP822,161,000).

13. Joint Ventures

 
                                                                                                     Year to 
                                                                 Half Year to        Half Year to   31 March 
                                                            30 September 2017   30 September 2016       2017 
Share of results of joint ventures                                     GBP000              GBP000     GBP000 
---------------------------------------------------------  ------------------  ------------------  --------- 
Gross rental income                                                         5                 794        931 
Property overheads                                                      (164)                (90)      (100) 
---------------------------------------------------------  ------------------  ------------------  --------- 
Net rental (expense)/income                                             (159)                 704        831 
Net gain/(loss) on revaluation of investment properties                 2,331               (510)    (1,875) 
Loss on sale of investment properties                                       -                 (8)       (54) 
Development profit/(loss)                                               1,367                 116       (35) 
Provision against book values                                               -             (2,668)    (6,524) 
Other operating expense                                                  (63)                   -    (1,118) 
Administrative expenses                                                 (127)               (175)      (338) 
Finance costs                                                           (709)               (105)        (2) 
Finance income                                                              5               1,141      1,233 
Change in fair value of derivative financial instruments                  (6)                   -       (42) 
---------------------------------------------------------  ------------------  ------------------  --------- 
Profit/(loss) before tax                                                2,639             (1,505)    (7,924) 
Tax                                                                      (89)                 461      1,396 
---------------------------------------------------------  ------------------  ------------------  --------- 
Profit/(loss) after tax                                                 2,550             (1,044)    (6,528) 
Accounting adjustment*                                                    832                   -          - 
---------------------------------------------------------  ------------------  ------------------  --------- 
Share of results of joint ventures                                      3,382             (1,044)    (6,528) 
---------------------------------------------------------  ------------------  ------------------  --------- 
 
 
                                                                                              At 
                                                               At                  At   31 March 
                                                30 September 2017   30 September 2016       2017 
Investment in joint ventures                               GBP000              GBP000     GBP000 
---------------------------------------------  ------------------  ------------------  --------- 
Summarised balance sheets 
Non-current assets 
Investment properties                                      19,995              12,833     13,907 
Owner occupied property, plant and equipment                   22                  88         30 
Deferred Tax                                                1,761                 907      1,811 
Derivative financial instruments                               51                   -         52 
---------------------------------------------  ------------------  ------------------  --------- 
                                                           21,829              13,828     15,800 
---------------------------------------------  ------------------  ------------------  --------- 
Current assets 
Land, development and trading properties                  103,888              88,831     89,115 
Trade and other receivables                                 6,522               2,918      1,327 
Cash and cash equivalents                                   8,056              11,690      9,745 
---------------------------------------------  ------------------  ------------------  --------- 
                                                          118,466             103,439    100,187 
---------------------------------------------  ------------------  ------------------  --------- 
Current liabilities 
Trade and other payables                                 (21,901)            (17,184)   (17,699) 
---------------------------------------------  ------------------  ------------------  --------- 
                                                         (21,901)            (17,184)   (17,699) 
---------------------------------------------  ------------------  ------------------  --------- 
Non-current liabilities 
Trade and other payables                                 (25,680)            (31,211)   (23,124) 
Borrowings                                               (70,282)            (42,613)   (55,282) 
                                                         (95,962)            (73,824)   (78,406) 
---------------------------------------------  ------------------  ------------------  --------- 
Net assets pre adjustment                                  22,432              26,259     19,882 
Accounting adjustment*                                        832                   -          - 
---------------------------------------------  ------------------  ------------------  --------- 
Net assets                                                 23,264              26,259     19,882 
---------------------------------------------  ------------------  ------------------  --------- 
 

*The adjustment in economic interest has been made for the Group's share of the loss incurred on one of its joint ventures in the period to ensure the Group's interest is shown at its recoverable amount.

The Directors' valuation of trading and development stock shows a surplus of GBP11,000,000 (30 September 2016: GBP7,000,000; 31 March 2017: GBP7,500,000) above book value.

14. Land, Developments and Trading Properties

 
                                                                                  At 
                                                   At                  At   31 March 
                                    30 September 2017   30 September 2016       2017 
                                               GBP000              GBP000     GBP000 
---------------------------------  ------------------  ------------------  --------- 
Development properties                         95,448              88,266     86,652 
Properties held as trading stock                   28                  28         28 
---------------------------------  ------------------  ------------------  --------- 
                                               95,476              88,294     86,680 
---------------------------------  ------------------  ------------------  --------- 
 

The Directors' valuation of trading and development stock shows a surplus of GBP943,000 (30 September 2016: GBP6,573,000; 31 March 2017: GBP5,014,000) above book value.

Total interest to date in respect of the development of sites is included in stock to the extent of GBP11,660,000 (30 September 2016: GBP11,441,000; 31 March 2017: GBP11,178,000). Interest capitalised during the period in respect of development sites amounted to GBP481,000.

   15.       Available-For-Sale Investments 
 
                                                                     Year to 
                                 Half Year to        Half Year to   31 March 
                            30 September 2017   30 September 2016       2017 
                                       GBP000              GBP000     GBP000 
-------------------------  ------------------  ------------------  --------- 
Fair value at 1 April                       -               3,114      3,114 
Additions                                   -                  56        248 
Fair value movement                     1,423             (1,179)    (3,352) 
Disposals                             (1,423)                   -       (10) 
-------------------------  ------------------  ------------------  --------- 
Fair value at period end                    -               1,991          - 
-------------------------  ------------------  ------------------  --------- 
 

The fair values of the Group's available-for-sale investments have been determined by assessing the expected future consideration receivable from these investments, representing Level 3 fair value measurements as defined by IFRS 13 Fair Value Measurement as the value cannot be derived from observable market data. The fair value of the asset is sensitive only to potential sales proceeds. The gain of GBP1,423,000 recognised in the period is the result of cash received in relation to a previously fully impaired asset.

16. Trade and Other Receivables

 
                                                                                At 
                                                 At                  At   31 March 
                                  30 September 2017   30 September 2016       2017 
                                             GBP000              GBP000     GBP000 
-------------------------------  ------------------  ------------------  --------- 
Trade receivables                             8,644              13,974     12,836 
Other receivables                            28,733              36,022     27,462 
Prepayments and accrued income               22,945              27,489     33,627 
-------------------------------  ------------------  ------------------  --------- 
                                             60,322              77,485     73,925 
-------------------------------  ------------------  ------------------  --------- 
 
   17.       Cash and Cash Equivalents 
 
                                                                                                At 
                                                                 At                  At   31 March 
                                                  30 September 2017   30 September 2016       2017 
                                                             GBP000              GBP000     GBP000 
-----------------------------------------------  ------------------  ------------------  --------- 
Rent deposits and cash held at managing agents                4,896               7,513      4,046 
Restricted cash                                              71,167               9,176     12,111 
Cash deposits                                                28,278              36,256     83,105 
-----------------------------------------------  ------------------  ------------------  --------- 
                                                            104,341              52,945     99,262 
-----------------------------------------------  ------------------  ------------------  --------- 
 

Restricted cash is made up of cash held by solicitors and cash in blocked accounts. Of the blocked amount, GBP54,408,000 relates to the sale of a property in the period and is expected to be released in the near future upon the successful refinancing of an existing facility.

   18.       Trade and Other Payables 
 
                                                                              At 
                                               At                  At   31 March 
                                30 September 2017   30 September 2016       2017 
                                           GBP000              GBP000     GBP000 
-----------------------------  ------------------  ------------------  --------- 
Trade payables                             14,704              17,256     12,197 
Other payables                              2,255               3,494      3,022 
Accruals and deferred income               40,691              41,658     41,130 
-----------------------------  ------------------  ------------------  --------- 
                                           57,650              62,408     56,349 
-----------------------------  ------------------  ------------------  --------- 
 

19. Borrowings

 
                                                                              At 
                                               At                  At   31 March 
                                30 September 2017   30 September 2016       2017 
                                           GBP000              GBP000     GBP000 
-----------------------------  ------------------  ------------------  --------- 
Current borrowings                          4,133                 901      2,517 
-----------------------------  ------------------  ------------------  --------- 
Borrowings repayable within: 
- one to two years                        104,067               4,133      4,150 
- two to three years                      421,886              99,250    304,641 
- three to four years                       1,036             424,077    215,667 
- four to five years                       57,500              84,053      1,053 
- five to six years                         1,110               1,072     73,353 
- six to ten years                         71,811              72,819     72,320 
-----------------------------  ------------------  ------------------  --------- 
Non-current borrowings                    657,410             685,404    671,184 
-----------------------------  ------------------  ------------------  --------- 
Total borrowings                          661,543             686,305    673,701 
-----------------------------  ------------------  ------------------  --------- 
 

Included within borrowings repayable within one to two years is the Convertible Bond at its fair value of GBP99,901,000. It is a financial instrument classified as Level 1 under the IFRS 13 fair value hierarchy.

 
                                                                  At 
                                   At                  At   31 March 
                    30 September 2017   30 September 2016       2017 
                               GBP000              GBP000     GBP000 
-----------------  ------------------  ------------------  --------- 
Total borrowings              661,543             686,305    673,701 
Cash                        (104,341)            (52,945)   (99,262) 
-----------------  ------------------  ------------------  --------- 
Net borrowings                557,202             633,360    574,439 
-----------------  ------------------  ------------------  --------- 
 

Net borrowings excludes the Group's share of borrowings in joint ventures of GBP70,282,000 (30 September 2016: GBP42,613,000; 31 March 2017: GBP55,282,000) and cash of GBP8,056,000 (30 September 2016: GBP11,690,000; 31 March 2017: GBP9,745,000). All borrowings in joint ventures are secured.

 
                                                            At 
                             At                  At   31 March 
              30 September 2017   30 September 2016       2017 
                         GBP000              GBP000     GBP000 
-----------  ------------------  ------------------  --------- 
Net assets              510,233             508,909    516,897 
-----------  ------------------  ------------------  --------- 
Gearing                    109%                124%       111% 
-----------  ------------------  ------------------  --------- 
 

20. Derivative Financial Instruments

 
                                                                                            At 
                                                             At                  At   31 March 
                                              30 September 2017   30 September 2016       2017 
                                                         GBP000              GBP000     GBP000 
-------------------------------------------  ------------------  ------------------  --------- 
Derivative financial instruments asset                        -                   -          - 
-------------------------------------------  ------------------  ------------------  --------- 
Derivative financial instruments liability             (10,095)            (20,721)   (13,981) 
-------------------------------------------  ------------------  ------------------  --------- 
 

The fair values of the Group's outstanding interest rate swaps have been estimated by calculating the present values of future cash flows, using appropriate market discount rates, representing Level 2 fair value measurements as defined in IFRS 13 Fair Value Measurement.

   21.       Share Capital 
 
                                                            At 
                             At                  At   31 March 
              30 September 2017   30 September 2016       2017 
                         GBP000              GBP000     GBP000 
-----------  ------------------  ------------------  --------- 
Authorised               39,577              39,577     39,577 
-----------  ------------------  ------------------  --------- 
 

The authorised share capital of the Company is GBP39,576,626.60 divided into ordinary shares of 1p each and deferred shares of 1/8p each.

 
Allotted, called up and fully paid: 
- 118,534,278 (31 March 2017: 118,196,215) ordinary shares of 1p each   1,185  1,182  1,182 
- 212,145,300 deferred shares of 1/8p each                                265    265    265 
----------------------------------------------------------------------  -----  -----  ----- 
                                                                        1,450  1,447  1,447 
----------------------------------------------------------------------  -----  -----  ----- 
 

22. Own Shares Held

Following approval at the 1997 Annual General Meeting the Company established the Helical Employees' Share Ownership Plan Trust (the "ESOP") to be used as part of the remuneration arrangements for employees. The purpose of the ESOP is to facilitate and encourage the ownership of shares by, or for the benefit of employees, by the acquisition and distribution of shares in the Company.

The ESOP purchases shares in the Company to satisfy the Company's obligations under its Share Option Scheme and Performance Share Plan.

At 30 September 2017 the ESOP held 1,262,000 ordinary shares in Helical plc (30 September 2016: 3,901,000; 31 March 2017: 1,262,000).

At 30 September 2017 options over nil (30 September 2016 and 31 March 2017: nil) ordinary shares in Helical plc had been granted through the ESOP. At 30 September 2017 awards over 3,735,000 (30 September 2016: GBP7,524,000 and 31 March 2017: GBP4,744,000) ordinary shares in Helical plc, made under the terms of the Performance Share Plan, were outstanding.

23. Net Assets Per Share

 
                                                                                         Number 
                                                                                    At       of                  At 
                                                                     30 September 2017   Shares   30 September 2017 
                                                                                GBP000    000's     Pence Per Share 
------------------------------------------------------------------  ------------------  -------  ------------------ 
Net asset value                                                                510,233  118,534 
Less: - own shares held by ESOP                                                         (1,262) 
               - deferred shares                                                 (265) 
------------------------------------------------------------------  ------------------  -------  ------------------ 
Basic net asset value                                                          509,968  117,272                 435 
Add: share settled bonus                                                                    840 
Add: dilutive effect of the Performance Share Plan                                        1,570 
------------------------------------------------------------------  ------------------  -------  ------------------ 
Diluted net asset value                                                        509,968  119,682                 426 
Adjustment for: 
               - fair value of financial instruments                            10,043 
               - fair value movement on Convertible Bond                          (99) 
               - deferred tax                                                   24,999 
------------------------------------------------------------------  ------------------  -------  ------------------ 
Adjusted diluted net asset value                                               544,911  119,682                 455 
Adjustment for: 
               - fair value of trading and development properties               11,943 
------------------------------------------------------------------  ------------------  -------  ------------------ 
EPRA net asset value                                                           556,854  119,682                 465 
Adjustment for: 
               - fair value of financial instruments                          (10,043) 
               - deferred tax                                                 (24,999) 
------------------------------------------------------------------  ------------------  -------  ------------------ 
EPRA triple net asset value                                                    521,812  119,682                 436 
------------------------------------------------------------------  ------------------  -------  ------------------ 
 

The adjustment for the fair value of trading and development properties represents the surplus as at 30 September 2017.

 
                                                                           At   Number                At 
                                                                     31 March       of          31 March 
                                                                         2017   Shares              2017 
                                                                       GBP000    000's   Pence Per Share 
------------------------------------------------------------------  ---------  -------  ---------------- 
Net asset value                                                       516,897  118,196 
Less: - own shares held by ESOP                                                (1,262) 
               - deferred shares                                        (265) 
------------------------------------------------------------------  ---------  -------  ---------------- 
Basic net asset value                                                 516,632  116,934               442 
Add: share settled bonus                                                         1,402 
Add: dilutive effect of the Performance Share Plan                               1,410 
------------------------------------------------------------------  ---------  -------  ---------------- 
Diluted net asset value                                               516,632  119,746               431 
Adjustment for: 
               - fair value of financial instruments                   13,929 
               - fair value movement on Convertible Bond                (226) 
               - deferred tax                                          23,124 
------------------------------------------------------------------  ---------  -------  ---------------- 
Adjusted diluted net asset value                                      553,459  119,746               462 
Adjustment for: 
               - fair value of trading and development properties      12,514 
------------------------------------------------------------------  ---------  -------  ---------------- 
EPRA net asset value                                                  565,973  119,746               473 
Adjustment for: 
               - fair value of financial instruments                 (13,929) 
               - deferred tax                                        (23,124) 
------------------------------------------------------------------  ---------  -------  ---------------- 
EPRA triple net asset value                                           528,920  119,746               442 
------------------------------------------------------------------  ---------  -------  ---------------- 
 

The net asset values per share have been calculated in accordance with guidance issued by the European Public Real Estate Association ("EPRA").

The adjustments to the net asset value comprise the amounts relating to the Group and its share of joint ventures.

24. Related Party Transactions

At 30 September 2017, 30 September 2016 and 31 March 2017 the following amounts were due from the Group's joint ventures.

 
                                                                                            At 
                                                             At                  At   31 March 
                                              30 September 2017   30 September 2016       2017 
                                                         GBP000              GBP000     GBP000 
-------------------------------------------  ------------------  ------------------  --------- 
King Street Developments (Hammersmith) Ltd                9,923               6,818      8,162 
Shirley Advance LLP                                         509              11,688        503 
Barts Square companies                                     (13)                   -       (13) 
Helical Sosnica Sp. zoo                                   1,104               1,112      1,126 
Old Street Holdings LP                                        3                 169          3 
Creechurch Place Ltd                                     16,797              14,267     15,883 
-------------------------------------------  ------------------  ------------------  --------- 
 

25. See-Through Analysis

Helical holds a significant proportion of its property assets in joint ventures with partners that provide the majority of the equity required to purchase the assets, whilst relying on the Group to provide asset management or development expertise. Accounting convention requires Helical to account under IFRS for our share of the net results and net assets of joint ventures in limited detail in the income statement and balance sheet. Net asset value per share, a key performance measure used in the real estate industry, as reported in the financial statements under IFRS, does not provide shareholders with the most relevant information on the fair value of assets and liabilities within an ongoing real estate company with a long term investment strategy.

This analysis incorporates the separate components of the results of the consolidated subsidiaries and Helical's share of its joint ventures' results into a 'see-through' analysis of our property portfolio, debt profile and the associated income streams and financing costs, to assist in providing a comprehensive overview of the Group's activities.

See-Through Net Rental Income

Helical's share of the gross rental income, head rents payable and property overheads from property assets held in subsidiaries and in joint ventures are shown in the table below.

 
                                                                            Half Year to   Half Year to    Year to 
                                                                            30 September   30 September   31 March 
                                                                                    2017           2016       2017 
                                                                                  GBP000         GBP000     GBP000 
----------------------------------------------------  -------------------  -------------  -------------  --------- 
Gross rental income                                   - subsidiaries              20,178         25,531     48,835 
 - joint ventures                                                                      5            794        931 
 -------------------                                                       -------------  -------------  --------- 
Total gross rental income                                                         20,183         26,325     49,766 
Rents payable                                         - subsidiaries                (83)           (17)       (68) 
Property overheads                                    - subsidiaries             (1,991)        (1,378)    (2,283) 
 - joint ventures                                                                  (164)           (90)      (100) 
Net rental income attributable to profit share partner                              (67)          (225)      (322) 
------------------------------------------------------  -----------------  -------------  -------------  --------- 
See-through net rental income                                                     17,878         24,615     46,993 
-----------------------------------------------------  ------------------  -------------  -------------  --------- 
 
 

See-Through Net Development (Losses)/Profits

Helical's share of development (losses)/profits from property assets held in subsidiaries and in joint ventures are shown in the table below.

 
                                               Half Year to   Half Year to    Year to 
                                               30 September   30 September   31 March 
                                                       2017           2016       2017 
                                                     GBP000         GBP000     GBP000 
--------------------------------------------  -------------  -------------  --------- 
In parent and subsidiaries                            1,935          3,886      7,143 
In joint ventures                                     1,367            116       (35) 
--------------------------------------------  -------------  -------------  --------- 
Total gross development profit                        3,302          4,002      7,108 
Provision against stock    - subsidiaries          (11,455)        (3,969)    (6,300) 
 - joint ventures                                         -        (2,668)    (6,524) 
 -------------------------------------------  -------------  -------------  --------- 
See-through development (losses)/profits            (8,153)        (2,635)    (5,716) 
--------------------------------------------  -------------  -------------  --------- 
 

See-Through Net Gain on Sale and Revaluation of Investment Properties

Helical's share of the net gain on the sale and revaluation of investment properties held in subsidiaries and joint ventures are shown in the table below.

 
                                                                            Half Year to   Half Year to    Year to 
                                                                            30 September   30 September   31 March 
                                                                                    2017           2016       2017 
                                                                                  GBP000         GBP000     GBP000 
-----------------------------------------------------  ------------------  -------------  -------------  --------- 
Revaluation surplus on investment properties           - subsidiaries              2,145         29,141     39,152 
 - joint ventures                                                                  2,331          (510)    (1,875) 
 ------------------------------------------------------------------------  -------------  -------------  --------- 
Total revaluation surplus                                                          4,476         28,631     37,277 
Net gain/(loss) on sale of investment properties       - subsidiaries              1,225        (2,788)      1,391 
 - joint ventures                                                                      -            (8)       (54) 
 ------------------------------------------------------------------------  -------------  -------------  --------- 
Total net gain/(loss) on sale of investment properties                             1,225        (2,796)      1,337 
-------------------------------------------------------------------------  -------------  -------------  --------- 
See-through net gain on sale and revaluation of investment properties              5,701         25,835     38,614 
-------------------------------------------------------------------------  -------------  -------------  --------- 
 
 

See-Through Net Finance Costs

Helical's share of the interest payable, finance charges, capitalised interest and interest receivable on bank borrowings and cash deposits in subsidiaries and in joint ventures are shown in the table below.

 
                                                                    Half Year to   Half Year to    Year to 
                                                                    30 September   30 September   31 March 
                                                                            2017           2016       2017 
                                                                          GBP000         GBP000     GBP000 
----------------------------------------------  -----------------  -------------  -------------  --------- 
Interest payable on bank loans and overdrafts   - subsidiaries            14,471         14,923     28,586 
 - joint ventures                                                            709            105          2 
 ----------------------------------------------------------------  -------------  -------------  --------- 
Total interest payable on bank loans and overdrafts                       15,180         15,028     28,588 
Other interest payable and similar charges      - subsidiaries             2,353          2,520      4,913 
Interest capitalised                            - subsidiaries           (3,448)        (3,494)    (7,901) 
----------------------------------------------  -----------------  -------------  -------------  --------- 
Total finance costs                                                       14,085         14,054     25,600 
Interest receivable and similar income          - subsidiaries           (1,154)        (1,199)    (3,156) 
 - joint ventures                                                            (5)        (1,141)    (1,233) 
 ----------------------------------------------------------------  -------------  -------------  --------- 
See-through net finance costs                                             12,926         11,714     21,211 
-----------------------------------------------------------------  -------------  -------------  --------- 
 

See-Through Property Portfolio

Helical's share of the investment, trading and development property portfolio in subsidiaries and joint ventures are shown in the table below.

 
                                                                                                                  At 
                                                                                   At                  At   31 March 
                                                                    30 September 2017   30 September 2016       2017 
                                                                               GBP000              GBP000     GBP000 
---------------------------------------------                      ------------------  ------------------  --------- 
Investment property                            - subsidiaries                 979,546           1,046,010  1,003,000 
 - joint ventures                                                              19,995              12,833     13,907 
 ------------------                                                ------------------  ------------------  --------- 
Total investment property                                                     999,541           1,058,843  1,016,907 
Trading and development stock                  - subsidiaries                  95,476              88,294     86,680 
 - joint ventures                                                             103,888              88,831     89,115 
 ------------------                                                ------------------  ------------------  --------- 
Total trading and development stock                                           199,364             177,125    175,795 
Trading and development stock surplus          - subsidiaries                     943               6,573      5,014 
 - joint ventures                                                              11,000               7,000      7,500 
 ------------------                                                ------------------  ------------------  --------- 
Total trading and development stock surpluses                                  11,943              13,573     12,514 
                                                                   ------------------  ------------------  --------- 
Total trading and development stock at fair 
 value                                                                        211,307             190,698    188,309 
----------------------------------------------                     ------------------  ------------------  --------- 
See-through property portfolio                                              1,210,848           1,249,541  1,205,216 
                                                                   ------------------  ------------------  --------- 
 
 

See-Through Net Borrowings

Helical's share of borrowings and cash deposits in parent and subsidiaries and joint ventures are shown in the table below.

 
                                                                    At                             At 
                                                          30 September                  At   31 March 
                                                                  2017   30 September 2016       2017 
                                                                GBP000              GBP000     GBP000 
Gross borrowings less than one year   - subsidiaries             4,133                 901      2,517 
Gross borrowings more than one year   - subsidiaries           657,410             685,404    671,184 
                                                         -------------  ------------------  --------- 
 Total                                                         661,543             686,305    673,701 
                                                         -------------  ------------------  --------- 
Gross borrowings less than one year   - joint ventures               -                   -          - 
Gross borrowings more than one year   - joint ventures          70,282              42,613     55,282 
                                                         -------------  ------------------  --------- 
 Total                                                          70,282              42,613     55,282 
                                                         -------------  ------------------  --------- 
Cash and cash equivalents             - subsidiaries         (104,341)            (52,945)   (99,262) 
 - joint ventures                                              (8,056)            (11,690)    (9,745) 
                                                         -------------  ------------------  --------- 
See-through net borrowings                                     619,428             664,283    619,976 
-------------------------------------------------------  -------------  ------------------  --------- 
 

See-Through Net Operating Income

 
                                                                                         Year to 
                                                     Half year to        Half year to   31 March 
                                                30 September 2017   30 September 2016       2017 
                                                           GBP000              GBP000     GBP000 
---------------------------------------------  ------------------  ------------------  --------- 
Net rental income                                          17,878              24,615     46,993 
Development profits (before provisions)                     3,302               4,002      7,108 
Gain/(loss) on sale of investment properties                1,225             (2,796)      1,337 
---------------------------------------------  ------------------  ------------------  --------- 
Net operating income                                       22,405              25,821     55,438 
---------------------------------------------  ------------------  ------------------  --------- 
 

26. See-Through Interest Cover, Gearing and Loan to Value

 
                                                                At 
                                 At                  At   31 March 
                  30 September 2017   30 September 2016       2017 
                             GBP000              GBP000     GBP000 
Interest cover                 1.7x                2.2x       2.6x 
Gearing                        121%                131%       120% 
Loan to value                   51%                 53%        51% 
---------------  ------------------  ------------------  --------- 
 

27. Capital Commitments

The Group has a commitment of GBP51,868,000 (30 September 2016: GBP131,085,000, 31 March 2017: GBP69,830,000) in relation to construction contracts, which are due to be completed in the period to March 2020. Of the total, GBP4,015,000 relates to the Group's investment property portfolio and GBP10,614,000 are in relation to the Group's residential scheme at Barts Square.

28. Post Balance Sheet Events

Since the period end, the Group has sold, an investment property, C-Space EC1, for GBP74.0m and its Retirement Village portfolio for GBP101.5m.

HELICAL PLC

Registered in England and Wales No. 156663

Registered Office:

5 Hanover Square

London

W1S 1HQ

T: 020 7629 0113

F: 020 7408 1666

E: reception@helical.co.uk

www.helical.co.uk

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR MMMMMGKKGNZG

(END) Dow Jones Newswires

November 15, 2017 02:01 ET (07:01 GMT)

1 Year Helical Chart

1 Year Helical Chart

1 Month Helical Chart

1 Month Helical Chart

Your Recent History

Delayed Upgrade Clock