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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Lxb Retail Properties Plc | LSE:LXB | London | Ordinary Share | JE00B4MFKH73 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.54 | 1.10 | 1.98 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMLXB
RNS Number : 9726S
LXB Retail Properties Plc
29 June 2018
For immediate release 29 June 2018
LXB Retail Properties Plc
INTERIM RESULTS FOR THE PERIODED 31 MARCH 2018
LXB Retail Properties Plc, a Jersey resident closed-ended real estate investment company focused on edge of town and out of town retail assets, today announces interim results for the period ended 31 March 2018.
Highlights 31 March 30 September
Hot Features
Premium
2018 2017
-- Cash deposits: GBP20.43m GBP7.98m
-- NAV per share: 25.78p 29.52p
-- Loss per share: (3.74)p (9.18)p
-- November 2017: following the satisfaction of the remaining criteria, GBP8.6m was received from the Crown Estate under the funding agreement in respect of phases 2 and 3 at Rushden Lakes
-- December 2017: exchanged contracts for the sale of the Riverside scheme at Stafford for net cash proceeds of GBP35.9m, which completed in January 2018
-- December 2017: exchanged contracts for the disposal of the leisure scheme at Stafford for an initial price of GBP8.9m (subject to future lettings), which is expected to complete in Summer 2018 on PC of the cinema
-- February/March 2018: exchanged contracts for the sale of 4 non-core assets at various sites generating total cash proceeds of GBP1.1m, all of which have now completed
-- March 2018: a proposed Jersey Scheme of Arrangement, enabling the transfer of certain longer term assets and liabilities to a third party, and therefore allowing a more expedient winding up of the Group's remaining affairs, was sanctioned by the Royal Court of Jersey and became effective on 31 March (see note 17)
Post period end:
-- May 2018: completed the disposal of the final phase of Neats Court Retail Park, Sheppey to Lightstone Neatscourt LLP generating net initial cash proceeds of GBP2.45m
-- June 2017: the Group announced plans to return GBP12.6m cash (7.5p per share) to Shareholders
For further information please contact:
LXB Partners LLP Tim Walton, CEO Brendan O'Grady, FD Tel: 020 7432 7900
J.P. Morgan Cazenove (NOMAD) Bronson Albery/Paul Hewlett Tel: 020 7742 4000
Buchanan Charles Ryland/Henry Wilson
Forward looking statements
This document includes forward looking statements which are subject to risks and uncertainties. You are cautioned that forward looking statements are not guarantees of future performance and that if risks and uncertainties materialise, or if assumptions underlying any of these statements prove incorrect, the actual results of operations and financial condition of the Group may materially differ from those made in, or suggested by, forward looking statements. Other than in accordance with its legal or regulatory obligations, the Company undertakes no obligation to review, update or confirm expectations or estimates or to release publicly any revisions to any forward looking statements to reflect events that occur or circumstances that arise after the date of this document.
Chairman's Statement
Dear Shareholder,
I am pleased to present the Interim Report and Financial Statements for the six months to 31 March 2018.
Following the overwhelming approval by Shareholders of the Scheme of Arrangement in February 2018 and the subsequent sanction of the reorganisation of the Group by means of that scheme, by the Royal Court of Jersey, I write with only nine months left in the life of the Group of which I have been Chairman for nearly nine years.
In the remaining months of our mandate your Board and the Investment Adviser have one aim; to return as much cash to Shareholders as quickly as possible, whilst always ensuring that commercial obligations, both contractual and to wider stakeholders, are met in full.
Following the completion of the sale of our retail scheme at Stafford we planned to return cash; however, we were unable to do so until we had secured release of the performance bond that was issued in relation to Rushden Lakes. I am delighted to say that this has now completed and that your Board has approved a Return of Cash of 7.5 pence per share, equivalent to cGBP12.6m. This is 25% higher than anticipated in the announcement of 5 February 2018, because, as noted in the Investment Manager's report, the Group has subsequently completed some other smaller disposals. Within the next few days the Company will make an announcement and send a letter to Shareholders, together with election forms which will set details of the return of cash and the manner of making elections under it in line with the terms of the returns of cash arrangements which were approved by Shareholders at the Annual General Meeting on 27 February 2018.
Further returns of cash are expected to be announced by the Board as soon as practicable, following further realisations consistent with the reducing working capital requirements of the Group.
It is important to acknowledge that the occupational markets in both retail and leisure have become even more challenging over the last three months as a whole list of household names have either become insolvent or have presented restructuring proposals such as Company Voluntary Arrangements. This has made it difficult to conclude deals with occupiers, especially given the short time that is left for us to complete such deals, and has meant that we have had to make difficult but necessary decisions to fulfil our mandate and maximise value for Shareholders.
Terms are agreed in principle for a transaction with The Crown Estate, whereby the Group would receive a final sum in respect of the Garden Square development site at Rushden Lakes (Phase 4), with the Group having no ongoing construction or letting obligations, and for the disposal of the Group's two adjacent property interests. The total receipts for the variation and disposals will not be determined until the Garden Square investment appraisal is agreed with The Crown Estate but they are not expected to be less than GBP7.5m. This contract variation, which is expected to be exchanged in July 2018, will become unconditional once outstanding planning matters and the terms of the build contract for Garden Square are finalised. Both matters are well-advanced and the Board anticipates that these monies will be received in August 2018. Whilst this agreement means the Group will receive less than the full potential development surplus from Garden Square, your Board is mindful of the fact that Phase 4 could not have been built within the remaining expected life of the Group, nor could we possibly deliver the lettings criteria required under the original agreement. Accordingly, we believe this is a satisfactory result in context of the Group's reorganisation that benefits both parties and, in particular, enables us to realise further value for Shareholders from Rushden Lakes in a timeous fashion.
Two members of the adviser team, Jon McCarthy and Giles Haywood, who have been closely involved with Rushden Lakes, have been approached by The Crown Estate to assist with completion of Garden Square after the Group has ceased to have an interest. Those discussions are, I understand, ongoing and if anything should result which needs to be brought to the attention of Shareholders, an announcement will be made.
Phase 3 at Rushden Lakes is due to reach practical completion in July of this year. There is one letting still to do and terms are agreed. The papers are out for signature and once that is exchanged, Phase 3 will be fully let. We expect that to occur before practical completion, and to receive further cash of GBP2.7m shortly thereafter. Phase 2, the leisure space, is not due to complete until January 2019 and should constitute the last remaining business of the Group. Whilst lettings are difficult, solicitors are instructed on lettings covering 5,450 sq ft and, if exchanged, we will be left with two units of 6,000 sq ft in total still to let. The final amount of cash to be realised from Phase 2 will not be known until practical completion at the earliest, and remains heavily dependent on lettings.
Agreement has also been reached in principle for a variation to the terms of the forward sale of the leisure investment at Stafford. Having concluded that there was no reasonable prospect of letting the space under the terms of the original contract with Legal and General within the expected life of the Group, this variation (which is expected to be exchanged within the next 10 days) will commute the Group's remaining interest in the unlet leisure space in return for an additional GBP1m payable at completion. The varied contract will complete when the development of the cinema achieves practical completion and will, realise a cash sum of GBP5.7m net of building costs for the sale of the cinema and restaurants. We are projecting that this will be received in October 2018.
During the period we have completed the sale of our remaining interests at Sheppey. We have previously reported that we were also in legals to complete the sale of our remaining property at Sutton, however we recently terminated discussions due to concerns about the prospective purchaser's willingness to commit within an acceptable timeframe. In light of that experience, and mindful that Sutton has significant cash value within the remaining portfolio, we have determined to pursue a number of potential bidders but, if matters do not proceed rapidly, the investment will be offered for sale at auction. The Group also has the potential to realise further value from the last remaining unit at Biggleswade and lawyers are instructed in connection with two lettings that will see that space fully let.
The Group has a number of other external negotiations to conclude in anticipation of the planned dissolution of the Company and these are all in progress. We expect them to be largely concluded, together with disposals of all remaining property interests, by the end of 2018. I am pleased also to report that all of the highways works have finally been completed and provided for at Rushden Lakes, save only for the safety audit which we do not anticipate will reveal any further issues.
As well as concluding external business we continue to make good progress in reducing the number of legal entities within the Group. We are forecasting that by the end of 2018 the Group will consist of the Plc and only a handful of subsidiary entities.
I am conscious of Shareholders' desire to be informed as to the likely timing and quantum of returns of cash. As I noted earlier, we aim to return cash as quickly as we can and the next payment will most likely follow after the completion of the Garden Square variation and practical completion of Phase 3 at Rushden Lakes. Currently we anticipate that will be in the order of 5.5 pence per share. Shareholders are, of course, most interested in the final outcome. As a result of the proposed contract variations in respect of Rushden Lakes and Stafford outlined above and other developments in the portfolio, the Board has revised its expectations of the final position down from 30-35 pence per share (including the proposed return of 7.5 pence per share referred to earlier) to between 26 and 28 pence per share (again including the proposed return of 7.5 pence per share). We are cautious in our assessment of the likely range of outcomes due to the Group's continuing exposure to letting risk at Phase 2 of Rushden Lakes and at Biggleswade. This reflects our best current assessment of what letting terms will be achieved but it is important to note that, as the balance sheet is reduced by further returns of cash, even small differences will have a meaningful impact on NAV.
Finally, I would like to record my thanks to my fellow directors, the Investment Adviser and our other advisers. It is never easy working in a Group running down its operations, with long-time friends and colleagues leaving as the work flow diminishes, especially in such a tough economic climate for the markets in which we operate. Nevertheless, I am pleased to say that the work being undertaken on your behalf continues to be carried out with extreme professionalism and skill and I am confident that it will be completed in line with the mandate that you have given us.
Phil Wrigley
Chairman
29 June 2018
Report of the Investment Manager, LXB Partners LLP
LXB Partners LLP advises LXB Retail Properties Plc ("LXB" or "the Group") and is pleased to report on the operations of the Group during the six-month period ended 31 March 2018 and up to the date of this report. Given the Group's mandate from Shareholders, we will focus primarily on the current position of each of the principal investments and on what needs to be accomplished in order that the planned dissolution can occur, subject to the necessary approvals.
The Company's scheme of arrangement (approval of which by the Royal Court of Jersey was announced on 16 March 2018) was implemented as planned on 31 March 2018 with the relevant transfers to the IW Topco Limited group of companies. The Group incurred costs of GBP1.692m in connection with the scheme of arrangement, of which GBP766k was provision for future running costs of the IW Group and the balance relates to legal and professional costs. Since 1 April 2018, the Group has continued with its plans to realise investments and close out its remaining contractual positions with a view to seeking dissolution of LXB shortly after 31 March 2019. At the date of this report, LXB still has 29 subsidiaries, nine of which have concluded all material third party business and are expected to be wound up shortly.
The remaining active subsidiaries relate to the following investments:
Banbury
A small performance bond is due to expire in July 2018 once a final inspection of highways-related matters has taken place. There are no indications that there will be any actual liability in respect of that bond and the Group expects that the last remaining Banbury entity can be wound up by late summer 2018.
Biggleswade
Two of the remaining subsidiaries are involved with this investment. Solicitors are instructed in connection with two lettings covering the final remaining space. The potential lettings required amendments to the existing planning consent (to allow sub-division of a larger unit) which has been obtained and the contractor has been appointed. We expect the agreements for lease to exchange shortly and leases to be signed following completion of the sub division works which is expected to occur in August 2018. Once the leases are signed, the Group will become entitled to the final receipt of proceeds due under the related forward funding agreement.
Greenwich
The Group retains three active Greenwich-related subsidiaries. There is still a small amount of space (1,670 sq ft on ground floor) to let in the last remaining unit at the Sainsbury's/M&S led Gallions Road development. Under the terms of the relevant forward funding agreement, the Group has until November 2018 to secure a tenant, although it is likely that any letting will require approval of the new owner.
All external matters at Brocklebank Retail Park are substantially complete however the two Brocklebank related subsidiaries will remain in existence until the defects period (which lasts for 12 months after practical completion in August 2017) has expired satisfactorily and the final accounting and other administrative aspects have been concluded.
Rushden
Three of the Group's subsidiaries are involved with the Rushden Lakes investment and there has been significant progress in the period covered by this report and subsequently.
Following the signing of leases on the last two units at Phase 1, the GBP15m performance bond has been released, allowing the Board to propose a return of cash to Shareholders.
Phase 3 is expected to be fully let shortly, all terms are agreed for the final letting and the contracts are out for signature. This should occur before practical completion which is scheduled to occur in July 2018, following which the Group expects to receive cash of GBP2.7m.
Construction of the leisure space in Phase 2 is progressing well and practical completion will occur as sections are completed, allowing tenants to take occupation in stages. The first tenants are expected to take possession of their units for fitting out in September 2018 with further sections completing over the following months until full practical completion occurs in January 2019. The final receipt for Phase 2 will only be determined after January 2019 and is primarily dependent on lettings achieved by that time. Currently, there is 11,450 sq ft still to let in four units although solicitors are instructed in connection with lettings covering 5,450 sq ft (two units).
The expected lifetime of the Group is incompatible with meeting the terms of the agreement previously reached with The Crown Estate concerning Phase 4, the Garden Square scheme. Consequently, the Group has explored alternative options to maximise value for Shareholders prior to the planned dissolution. As noted in today's Chairman's statement, terms are agreed in principle for the Group to sell its remaining land interests at Rushden and to be freed from its obligations in relation to the build-out and letting of that phase. The variation to the contract with The Crown Estate is expected to be exchanged shortly and the requirements for the agreement to become unconditional are expected to be fulfilled by the end of July 2018. A cash receipt of not less than GBP7.5m is anticipated to be received in August 2018. Two members of the Investment Adviser's team who have been closely involved with Rushden Lakes have been approached by The Crown Estate to discuss the possibility that they are retained by the Crown Estate to assist with the Garden Square development following completion of the contract variation. These discussions are ongoing.
The contractor appointed by Highways England to carry out the A45 improvement works has completed and, subject to final sign-off by Highways England, the works are final and the related completion certificate can be issued. The final account will not be finalised for a short period thereafter as all the costs have to be collated and accounted for; the Group has accounted conservatively for all known costs.
Sheppey
The Group has disposed of its remaining property interests on the Isle of Sheppey since 31 March 2018. Phase 2C at Neats Court, which comprises six units with occupiers including Starbucks, Burger King, Subway and Costa Coffee has been sold to Lightstone LLP (which acquired the adjacent Neats Court Retail Park from the Group in January 2017). A headline price of GBP2.51 million was achieved realising initial cash proceeds of GBP2.45m after adjustment for unexpired rent-free periods. A further GBP475,000 (less adjustment for any unexpired rent free period) will be received if a letting of the final vacant unit (for which terms are agreed and solicitors instructed) is concluded before mid-September 2018. Although the disposal had no material impact on NAV, it has increased the amount of cash available for return to shareholders.
Once the final unit is let, the Group will have concluded all material external business for this investment. There remain a number of less significant matters and obligations to conclude, and the two Sheppey related entities will continue to exist for a short while after expiry of the defects period in July 2018.
Stafford
The interaction of the Group's various investments at Stafford necessitated a complex legal structure and six Stafford related subsidiaries remain in existence.
The Group disposed of its Riverside retail investment to funds managed by Legal & General in January 2018 realising cash proceeds of GBP35.9m and releasing cash of GBP10.2m after repayment of the GBP25.7m of bank borrowings secured on the investment.
The principal outstanding commercial issue at Stafford is to complete construction of the cinema and adjacent restaurant unit so that the previously announced sale to Legal & General Leisure Fund Trustee Limited and Legal & General Property Partners (Leisure) Limited can complete in October 2018. As announced on 22 December 2017, the original contract provided for an initial payment with additional proceeds linked to the achievement of further lettings (beyond those in place at exchange) at any time up to December 2020. No further lettings have been achieved since exchange and, given the challenges currently facing the casual dining sector and the relatively short period to generate value for Shareholders, the Board has approved a proposal to vary the sales contract such that the right to further lettings-related receipts is cancelled in return for an additional GBP1m payable at completion. This variation to the original forward sale agreement is expected to be exchanged within the next 10 days. Following the exchange of contracts for the sale in January 2018, the Group also concluded that it was more cost-effective to fund the development from cash and the RBS development facility was cancelled. Currently, the Group is forecasting that it will realise net proceeds of GBP5.7m from this investment (after adjustment for costs to be incurred after 31 March 2018 to complete the development).
Sutton
The Portfolio Update on 26 March 2018 reported that solicitors were instructed in connection with the sale of the Group's last remaining investment at Sutton, with completion at that time expected to occur in April/May 2018. It has proven impossible to be assured that binding contracts would be exchanged within an acceptable timeframe and the Group recently took the decision to pursue discussions with alternative bidders and, in the absence of a committed party, to sell the investment at auction.
There are two Sutton related subsidiaries. One of those is expected to achieve final local authority sign-off shortly in regard to the highways works associated with the Sainsbury's investment (which was sold some time ago). That will enable a small performance bond to be released, following which this subsidiary can be dissolved as soon as its final accounting and administrative matters are concluded.
Higher Newham Farm
The Board has concluded that this investment should be sold and is currently in discussions with interested third parties.
Returns of Cash
As noted in today's Chairman's Statement, the Board has approved a return of cash of 7.5 pence per share (equivalent to c. GBP12.6m).
Our instructions from the Board continue to be, to identify opportunities for the Group to realise cash from the portfolio and to finalise contractual positions so that further returns of cash may be made as soon as is appropriate.
Revaluation deficit and profit on sale of investment properties
As described in note 10 to the Interim Report, the investment properties held by the Group at 31 March 2018 were valued by the Group's external property valuers, JLL. In their opinion the fair value of these investment properties at that date was GBP21.75m, resulting in a revaluation deficit for the period of GBP4.7m. The principal component of this was the write-down in value of the unlet restaurant units at Stafford (to reflect the revised sale terms referred to above).
In addition to the transactions detailed above the Group has also disposed of a number of smaller residual land interests at Denbigh, Gloucester, Greenwich and Truro in the period since 1 October 2017 at prices close to their book values. The Group has recognised a profit on sale of investment properties of GBP1.69m in the period which arises mainly from recognition in part of the potential Garden Square receipt mentioned above, less adjustments to reflect conservative rental values on the remaining unlet units and the final highways costs at Rushden Lakes.
Accounting treatment of forward funded construction activities
Under the terms of the sale of a number of the Group's investments, the buyer funds the development with the Group overseeing the works. The Group recharges the costs associated with the relevant forward funding agreement plus a 1% fee on the main contractor's costs. As explained previously, following consultation with the Group's auditors, the appropriate accounting treatment for these arrangements is to include the amounts receivable from the buyer (in respect of each reporting period) in gross revenue and to include the costs incurred by the Group (in respect of each reporting period) in direct costs. The relevant amounts for the period are disclosed in note 4 to the Interim Report.
Basis of preparation
As the Group is now in the final year of its expected life the directors have concluded that it continues to be appropriate not to adopt a going concern basis of preparation in these interim financial statements. Readers of the accounts should be aware that, as was the case at 30 September 2017, the Group's investment properties are classified in the Group Balance Sheet as current assets "held for sale" rather than non-current assets. No other material adjustments arose as a result of ceasing to apply the going concern basis in either the current period or the prior year.
Cash position and expenditure
During the six months to 31 March 2018, GBP6.82m of cash was deployed in capital expenditure on investment properties.
At the balance sheet date the Group had GBP20.43m of cash.
Tim Walton
On behalf of LXB Partners LLP
29 June 2018
Auditor's independent review report
to LXB Retail Properties Plc
Introduction
We have been engaged by the Company to review the condensed set of financial statements included within this Interim Report for the six months ended 31 March 2018 which comprises the Group Income Statement, the Group Statement of Changes in Equity, the Group Balance Sheet, the Group Cash Flow Statement and the related notes.
We have read the other information contained in the Interim Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Directors' responsibilities
The Interim Report, including the financial information contained therein, is the responsibility of and has been approved by the Directors. The Directors are responsible for preparing the Interim Report in accordance with the rules of the London Stock Exchange for companies trading securities on the AIM and the rules for companies trading securities on the Channel Islands Securities Exchange. These rules require that the Interim Report be presented and prepared in a form consistent with that which will be adopted in the Company's annual accounts having regard to the accounting standards applicable to such annual accounts.
As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The condensed set of financial statements included in this Interim 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 to the Company a conclusion on the condensed set of financial statements in the Interim Report based on our review.
Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on the AIM and the rules for companies trading securities on the Channel Islands Securities Exchange and for no other purpose. No person is entitled to rely on this report unless such a person is entitled to rely on this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.
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", issued by the Auditing Practices Board for use in the United Kingdom. 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 Interim Report for the six months ended 31 March 2018 is not prepared, in all material respects, in accordance with International Accounting Standard 34, as adopted by the European Union, the rules of the London Stock Exchange for companies trading securities on the AIM and the rules for companies trading securities on the Channel Islands Securities Exchange.
Emphasis of Matter
Without modifying our conclusion, we draw your attention to note 2 in the condensed set of financial statements. It is the Directors' intention to bring the Group's activities to a close through either a voluntary liquidation or other reconstruction or reorganisation following the return of surplus cash to Shareholders. Accordingly, the condensed set of financial statements have not been prepared on a going concern basis.
BDO LLP
Chartered Accountants
London
United Kingdom
29 June 2018
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Group income statement
for the period ended 31 March 2018
Unaudited Unaudited Audited
six months six months year to
to to 30 September
31 March 31 March 2017
2018 2017
------------------------------ ---------------- ------------------------ ------------------------ ------------------------
Note GBP GBP GBP
------------------------------ ---------------- ------------------------ ------------------------ ------------------------
Gross revenue 4 21,339,751 37,055,626 61,972,832
Direct costs 4 (21,112,454) (36,218,224) (60,081,862)
------------------------------ ---------------- ------------------------ ------------------------ ------------------------
Net revenue and
gross profit 227,297 837,402 1,890,970
Administrative
expenses:
------------------------------ ---------------- ------------------------ ------------------------ ------------------------
Corporate administrative
expenses (1,749,632) (3,008,766) (4,502,979)
Scheme of arrangement costs (1,691,783) - -
(note 17)
------------------------------ ---------------- ------------------------ ------------------------ ------------------------
Total
administrative
expenses (3,441,415) (3,008,766) (4,502,979)
Other
property-related
transactions: 5
------------------------------ ---------------- ------------------------ ------------------------ ------------------------
Amounts receivable in
respect
of the
cancellation of certain
contractual
arrangements - 4,834,117 4,834,117
Impairment arising as a
result
of the
cancellation of certain
contractual
arrangements - (2,770,730) (2,773,213)
------------------------------ ---------------- ------------------------ ------------------------ ------------------------
Net
surplus/(deficit)
in respect
of the
cancellation
of certain
contractual
arrangements - 2,063,387 2,060,904
Investment
property
revaluation
deficit 10 (4,704,323) (3,405,499) (12,831,691)
Profit/(loss) on
sale of
investment
properties 1,686,564 (4,363,654) (782,614)
Other income - 10,461 15,078
------------------------------ ---------------- ------------------------ ------------------------ ------------------------
Operating loss (6,231,877) (7,866,669) (14,150,332)
Finance income 6 1,855 10,637 11,435
Finance costs 6 (247,877) (536,712) (989,243)
------------------------------ ---------------- ------------------------ ------------------------ ------------------------
Loss before tax (6,477,899) (8,392,744) (15,128,140)
------------------------------ ---------------- ------------------------ ------------------------ ------------------------
Taxation credits
/(charges) 7 182,732 (137,559) (330,059)
------------------------------ ---------------- ------------------------ ------------------------ ------------------------
Loss for the
period (6,295,167) (8,530,303) (15,458,199)
------------------------------ ---------------- ------------------------ ------------------------ ------------------------
Pence Pence Pence
Loss per share Per share Per share Per share
------------------------------ ------------- --------------------- --------------------- ---------------------
Basic and diluted 8 (3.74) (5.07) (9.18)
------------------------------ ------------- --------------------- --------------------- ---------------------
As described in note 2, the Group is in the process of performing an orderly realisation of its investments.
There were no items of other comprehensive income in the current period or prior year and therefore the loss for the period also reflects the Group's total comprehensive loss for the period.
Group statement of changes in equity
for the period ended 31 March 2018
Stated Retained
Period ended 31 March capital earnings Total
2018 (unaudited)
================================== ======================== ======================== ========================
GBP GBP GBP
================================== ======================== ======================== ========================
At 1 October 2017
(audited) 51,889,356 (2,197,455) 49,691,901
Loss for the period - (6,295,167) (6,295,167)
------------------------------------ ------------------------ ------------------------ ------------------------
At 31 March 2018
(unaudited) 51,889,356 (8,492,622) 43,396,734
------------------------------------ ------------------------ ------------------------ ------------------------
Stated Retained
Period ended 31 March capital earnings Total
2017 (unaudited)
---------------------------------- ------------------------ ------------------------ ------------------------
GBP GBP GBP
================================== ======================== ======================== ========================
At 1 October 2016
(audited) 71,766,495 23,698,642 95,465,137
Loss for the period - (8,530,303) (8,530,303)
Transactions with
owners:
The Third Return of
Cash (see
note 15):
Redemption of "B" shares
inclusive
of costs (19,877,139) - (19,877,139)
Dividends - (10,437,898) (10,437,898)
------------------------------------ ------------------------ ------------------------ ------------------------
At 31 March 2017
(unaudited) 51,889,356 4,730,441 56,619,797
------------------------------------ ------------------------ ------------------------ ------------------------
Group balance sheet
at 31 March 2018
Unaudited Unaudited Audited
as at as at as at
31 March 31 March 30 September
2018 2017 2017
======================== ================ ======================== ======================== ========================
Note GBP GBP GBP
======================== ================ ======================== ======================== ========================
Current
assets
Business and
other
receivables 11 23,156,217 23,710,436 32,969,884
Cash and
cash
equivalents 12 20,431,435 15,074,593 7,978,972
======================== ================ ======================== ======================== ========================
43,587,652 38,785,029 40,948,856
------------------------ ---------------- ------------------------ ------------------------ ------------------------
Investment
properties
- held for
sale 10 21,356,763 58,991,080 54,184,255
------------------------ ---------------- ------------------------ ------------------------ ------------------------
Total assets 64,944,415 97,776,109 95,133,111
======================== ================ ======================== ======================== ========================
Current
liabilities
Business and
other
payables 13 (21,473,824) (15,239,085) (19,316,822)
Borrowings 14 - (25,722,372) (25,722,372)
Income tax
creditor (73,857) (83,492) (290,653)
(21,547,681) (41,044,949) (45,329,847)
Deferred
taxation
associated
with
investment
properties
- held for
sale - (111,363) (111,363)
------------------------ ---------------- ------------------------ ------------------------ ------------------------
Total
liabilities (21,547,681) (41,156,312) (45,441,210)
======================== ================ ======================== ======================== ========================
Net assets 43,396,734 56,619,797 49,691,901
======================== ================ ======================== ======================== ========================
Equity
Stated
capital 15 51,889,356 51,889,356 51,889,356
Retained
earnings (8,492,622) 4,730,441 (2,197,455)
======================== ================ ======================== ======================== ========================
Total equity 43,396,734 56,619,797 49,691,901
------------------------ ---------------- ------------------------ ------------------------ ------------------------
Pence Pence Pence
Net asset value per share per share per share
per share
============================== ============== ====================== ====================== ======================
Basic and diluted 16 25.78 33.63 29.52
============================== ============== ====================== ====================== ======================
Group cash flow statement
for the period ended 31 March 2018
Unaudited Unaudited Audited
six months to six months year to
31 March to 30 September
2018 31 March 2017
2017
=========================================================== ======================== ===========================
GBP GBP GBP
================================== ======================== ======================== =========================
Cash flows from
operating activities
Loss before tax (6,477,899) (8,392,744) (15,128,140)
Adjustments for
non-cash items:
Investment property
revaluation
deficit 4,704,323 3,405,499 12,831,691
Amortisation of lease incentives - 220,060 518,075
Impairment arising on
the cancellation
of
certain contractual
arrangements - 2,770,730 2,773,213
Loss/(profit) on sale
of investment
properties (1,686,564) 4,363,654 782,614
Net finance costs 246,022 526,075 977,808
================================== ======================== ======================== =========================
Cash flows from operating
activities
before changes in working capital (3,214,118) 2,893,274 2,755,261
Change in business and
other
receivables 1,149,371 13,730,472 6,260,572
Change in business and
other
payables 2,125,853 (22,647,738) (24,202,393)
Taxation paid (145,427) (94,116) (79,455)
================================== ======================== ======================== =========================
Cash flows from
operating activities (84,322) (6,118,108) (15,266,015)
================================== ======================== ======================== =========================
Investing activities:
Interest received 1,855 10,637 11,435
Capital expenditure on
investment properties (6,820,548) (8,624,533) (10,525,250)
Proceeds on disposal
of investment
properties 45,329,722 18,496,158 22,953,328
Cash flows from
investing activities 38,511,029 9,882,262 12,439,513
================================== ======================== ======================== =========================
Financing activities:
Redemption of "B"
shares - (19,865,169) (19,865,169)
Costs associated with
redeemed
"B" shares - (11,970) (11,970)
Dividends paid - (10,437,898) (10,437,898)
Bank borrowings drawn - 513,000 513,000
Bank borrowings repaid (25,722,372) (5,000,000) (5,000,000)
Finance costs paid (251,873) (369,044) (874,009)
=================================== ======================== ======================== =========================
Cash flows from
financing activities (25,974,245) (35,171,081) (35,676,046)
=================================== ======================== ======================== =========================
Net
increase/(decrease) in
cash
and cash
equivalents 12,452,463 (31,406,927) (38,502,548)
Cash and cash
equivalents at
the
beginning of the
period 7,978,972 46,481,520 46,481,520
---------------------------------- ------------------------ ------------------------ -------------------------
Cash and cash
equivalents at
the end of
the period 20,431,435 15,074,593 7,978,972
================================== ======================== ======================== =========================
Notes to the interim report
1. General information about the Group
LXB Retail Properties Plc was listed on the AIM and CISE markets on 23 October 2009. It is a closed-ended real estate investment company that was incorporated in Jersey on 27 August 2009.
This Interim Report includes the results and net assets of the Company and its subsidiaries, together referred to as the Group, on a consolidated basis.
Further general information about the Company and the Group can be found on its website:
www.lxbretailproperties.com.
2. Basis of preparation
The financial information contained in this report has been prepared in accordance with IAS 34, "Interim Financial Reporting", as adopted by the European Union.
As described more fully in the Chairman's Statement, following the Shareholders' approval on 29 February 2016, the Directors are continuing to enact the plans for an orderly realisation of the Group's investments, with the bulk of the remaining value to be returned to Shareholders as soon as is practicable and no later than 31 March 2019. Consequently the Directors have concluded that it continues to be appropriate not to adopt a going concern basis of preparation in these interim accounts. No material adjustments have arisen in this period or arose in the prior year, as a result of ceasing to apply the going concern basis, other than the reclassification of investment properties from non-current assets to held for sale.
The condensed set of financial statements for the half year are unaudited and do not constitute statutory accounts for the purposes of the Companies (Jersey) Law 1991. They should be read in conjunction with the Group's statutory financial statements for the year ended 30 September 2017, which were prepared under International Financial Reporting Standards adopted for use in the European Union and upon which an unqualified auditors' report was given.
The accounting policies adopted in this report are consistent with those applied in the Group's Annual Report and financial statements for the year ended 30 September 2017 (the 2017 Annual Report) and are expected to be consistently applied in the year ending 30 September 2018.
The 2017 Annual Report is available from the "Investor relations" page of the Company's website, www.lxbretailproperties.com, or by writing to the Company Secretary at Intertrust Fund Services, 44 Esplanade, St Helier, Jersey, JE4 9WG.
The Group's financial performance is not subject to material seasonal fluctuations.
3. Segmental information
During the current period and prior periods, the Group operated in and was managed as one business segment, being property investment, with all investment properties located in the United Kingdom.
4. Gross revenue and direct costs
Unaudited Unaudited Audited
six months six months year to
to to 30 September
Gross revenue: 31 March 31 March 2017
2018 2017
=================================== ======================== ======================== ==========================
GBP GBP GBP
=================================== ======================== ======================== ==========================
Gross rental income 302,582 806,916 1,780,123
Revenue derived from
Forward
Funding
Agreements 21,037,169 36,248,710 60,192,709
------------------------------------ ------------------------ ------------------------ --------------------------
21,339,751 37,055,626 61,972,832
----------------------------------- ------------------------ ------------------------ --------------------------
Unaudited Unaudited Audited
six months six months year to
to to 30 September
Direct costs: 31 March 31 March 2017
2018 2017
=================================== ======================== ======================== ==========================
GBP GBP GBP
=================================== ======================== ======================== ==========================
Property outgoings 146,976 135,785 211,697
Costs associated with
Forward
Funding
Agreements 20,965,478 36,082,439 59,870,165
------------------------------------ ------------------------ ------------------------ --------------------------
21,112,454 36,218,224 60,081,862
----------------------------------- ------------------------ ------------------------ --------------------------
The Group's revenue and costs in connection with Forward Funding Agreements relate to:
-- Sutton foodstore -- London Road Retail Park in Biggleswade -- the retail scheme at Brocklebank Road in Greenwich -- the Gateway Retail Park in Banbury -- the Sainsbury's/M&S development in Greenwich -- the Rushden Lakes Retail Park in Rushden, Northamptonshire 5. Other property related transactions in the prior year
During the prior year, the Group accepted settlement payments in return for the cancellation of contractual arrangements relating to certain of its assets held for investment. The cancellation of these contractual arrangements had a direct and immediate detrimental effect on the value of the assets to which the contracts related, and as a result, an impairment charge was applied to those assets. As those transactions were considered to be relevant to an understanding of the performance of the Group, and as the resulting impairment did not necessarily relate to investment property assets, the income and the resulting impairment was shown separately to other fair value movements of investment properties described in note 10.
6. Finance income and costs
Unaudited Unaudited Audited
six months six months year to
to to 30 September
Recognised in the income 31 March 31 March 2017
statement: 2018 2017
====================================== ======================= ======================= =========================
GBP GBP GBP
====================================== ======================= ======================= =========================
Finance income:
Interest on cash deposits 1,855 10,637 11,435
Total finance income in
the
income statement 1,855 10,637 11,435
Finance costs:
Bank interest (233,166) (396,750) (849,585)
Amortisation of capitalised
finance costs - (111,238) (111,238)
Other finance costs (14,711) (28,724) (28,420)
======================================= ======================= ======================= =========================
Total finance costs in the
income statement (247,877) (536,712) (989,243)
--------------------------------------- ----------------------- ----------------------- -------------------------
Net finance costs
recognised
in the income
statement (246,022) (526,075) (977,808)
======================================= ======================= ======================= =========================
The average interest rate incurred by the Group on its bank borrowings for the period ended 31 March 2018, including the lender's margin but excluding amortisation of capitalised finance costs was 2.88% (31 March 2017: 2.59%; 30 September 2017: 2.70%).
7. Taxation
Unaudited Unaudited Audited
six months six months year to
to to 30 September
31 March 31 March 2017
2018 2017
====================================== ======================= ======================= =========================
GBP GBP GBP
====================================== ======================= ======================= =========================
The tax (credit)/charge
for the period recognised
in the income statement
comprises:
Current tax on results
for the period (71,369) 26,196 218,696
Movement in deferred tax
in the period (111,363) 111,363 111,363
(182,732) 137,559 330,059
-------------------------------------- ----------------------- ----------------------- -------------------------
The tax assessed for the period varies from the standard rate of income tax in the UK of 20%. The differences are explained below:
Unaudited Unaudited Audited
six months six months year to
to to 30 September
31 March 31 March 2017
2018 2017
====================================== ======================= ======================= =========================
GBP GBP GBP
====================================== ======================= ======================= =========================
Loss before tax (6,477,899) (8,392,744) (15,128,140)
--------------------------------------- ----------------------- ----------------------- -------------------------
Loss before tax at the
standard
rate of income
tax in the UK of 20% (1,295,580) (1,678,549) (3,025,628)
Items not subject to UK
income
tax: 1,112,848 1,813,857 3,326,547
Other amounts: - 2,251 29,140
Tax (credit)/charge for
the
period recognised
-------------------------------------- ----------------------- ----------------------- -------------------------
in the income statement (182,732) 137,559 330,059
======================================= ======================= ======================= =========================
Tax status of the Company and its subsidiaries
All group undertakings are either tax resident in Jersey or are tax transparent entities owned by Jersey resident entities. Jersey has a corporate tax rate of zero, so the Company and its subsidiaries have no liability to taxation on their income or gains in Jersey. The Company is not subject to UK Corporation tax on any dividend or interest income it receives.
The Group's investment properties are located in the United Kingdom and therefore the net rental income earned less deductible items is subject to UK income tax, currently at a rate applicable to the relevant group undertakings of 20%.
8. Loss per share
Loss per share is calculated on 168,350,374 (31 March 2017: 168,350,374; 30 September 2017: 168,350,374) ordinary shares in issue for the period and is based on losses attributable to Shareholders for the period of GBP6,229,167 (31 March 2017: GBP8,530,303; 30 September 2017: GBP15,458,199).
There are no share options or other equity instruments in issue and therefore no adjustments need to be made for dilutive or potentially dilutive equity arrangements.
9. Dividends
Unaudited Unaudited Audited
six months to six months to year to
31 March 2018 31 March 2017 30 September
2017
=================== ===================== ============================= =========================================
Pence Pence Pence
GBP per share GBP per share GBP per share
=================== ======= ============ ============== ============= ====================== =================
Interim dividends
paid - - 10,437,898 18.00 10,437,898 18.00
------------------- ------- ------------ -------------- ------------- ---------------------- -----------------
Prior year:
An interim dividend of 18p per ordinary share was declared on 22 September 2016 and paid on 3 November 2016. The dividend was payable on each of the 57,988,322 shares in issue for which a corresponding "B" share was not issued (see note 15).
The holders of the remaining 110,362,052 ordinary shares in issue received 18p per share (a total of GBP19,865,169) on the redemption of these "B" shares in November 2016 (see note 15).
10. Investment properties
As described in note 2, the Group's investment properties are 'held for sale'.
GBP
======================================== =============
Carrying value as at 30 September 2017
(audited) 54,184,255
Additions 8,484,604
Disposals (36,607,771)
Revaluation deficit (see below) (4,704,323)
========================================== =============
Carrying value as at 31 March 2018
(unaudited) 21,356,763
As the underlying investment property to which they relate was disposed of during the period, no amortisation in respect of lease incentives was included in the revaluation deficit and released to rental income in the period (31 March 2017: GBP220,060; 30 September 2017: GBP518,075).
Movements in the prior year were as follows:
GBP
================================================ ============================= ==========================
Carrying value as at 30 September
2016 73,170,186
Additions 8,777,448
Disposals (14,413,613)
Revaluation deficit (see below) (13,349,766)
---------------------------------------------------------------- ---------------------------------------
Carrying value as at 30 September
2017 54,184,255
================================================================ =======================================
The revaluation deficit shown above includes GBP518,075 of amortisation in respect of capitalised lease incentives that have been released to rental income in the year.
A reconciliation is provided below:
GBP
---------------------------------------------- ------------------------
Investment properties revaluation
deficit (13,349,766)
Amounts attributable to the
amortisation of lease
incentives released to rental
income 518,075
------------------------------------------------ ------------------------
Revaluation deficit in the income
statement (12,831,691)
------------------------------------------------ ------------------------
At 31 March 2018, the Group's investment properties were valued by JLL, Chartered Surveyors, on a fixed fee basis, in their capacity as independent external valuers. The aggregate fair value of these properties at 31 March 2018 is GBP21,750,000 (31 March 2017: GBP59,738,000; 30 September 2017: GBP54,738,000). The fair value includes amounts in respect of rents recognised in advance and lease incentives given to tenants that are included within business and other receivables at the balance sheet date.
The following tables reconcile the carrying value of investment properties to their fair values at the above balance sheet dates:
GBP
----------------------------------------------------- ----------------------
Carrying value as at 31 March 2018 21,356,763
------------------------------------------------------- ----------------------
Adjustment for rents recognised in
advance and lease
----------------------------------------------------- ----------------------
incentives given to tenants 393,237
------------------------------------------------------- ----------------------
Total property portfolio valuation
at 31 March 2018 21,750,000
------------------------------------------------------- ----------------------
GBP
----------------------------------------------------- ----------------------
Carrying value as at 30 September
2017 54,184,255
------------------------------------------------------- ----------------------
Adjustment for rents recognised in
advance and lease
----------------------------------------------------- ----------------------
incentives given to tenants 845,855
------------------------------------------------------- ----------------------
Adjustment for accrued costs to complete (292,110)
------------------------------------------------------- ----------------------
Total property portfolio valuation
at 30 September 2017 54,738,000
------------------------------------------------------- ----------------------
The external valuers' valuation was undertaken in accordance with the Royal Institution of Chartered Surveyors' Valuation Standards Professional Standards (January 2014) on the basis of fair value. Fair value is defined in IFRS 13 as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.
The Board determines the Group's valuation policies and procedures and is responsible for appointing the Group's independent external valuer. The Audit Committee considers the valuation process as part of its overall responsibilities.
The fair value of completed investment properties is determined using the 'investment method' whereby capitalisation yields derived from market transactions involving comparable investment properties are applied to the estimated net current and future cash flows expected to be generated by the investment property, which the valuer calculates using comparable market information, to obtain a market rent. The fair value of an investment property undergoing development is derived using the 'residual method' whereby the costs required to complete the development, including a notional cost of finance and an estimated risk factor or 'profit on cost', are deducted from the net development value arrived at under the 'investment method'.
As part of each half-yearly valuation exercise, the valuations performed by the external valuers are reviewed by appropriately qualified members of the Investment Manager's team. This includes discussion of the assumptions used and judgements made by the external valuers as well as detailed consideration of the resulting valuations. Discussion of the valuation process and results then takes place at a meeting between the external valuers and the auditors at which the key assumptions and estimates are reviewed together with consideration of the valuers' reasons for significant valuation movements on individual properties.
The key unobservable inputs used in the valuation of the Group's investment properties at 31 March 2018 are as follows:
ERV per square Equivalent yield
foot (GBP) (%)
------------------------------
Investment Fair Valuation Weighted Weighted
property value method Min Max average Min Max average
type
-------------- ----------- ----------- -------- ------- --------- --------- -------- ---------
Completed 19,400,000 Investment 15.0 30.06 19.83 5.25 7.31 6.42
Development* 1,000,000
Other* 1,350,000
-------------- -----------
Total 21,750,000
-------------- -----------
*Comprises land assets that are held at their estimated open market value.
The key unobservable inputs used in the valuation of the Group's investment properties at 30 September 2017 were as follows:
ERV per square Equivalent yield
foot (GBP) (%)
-------------------------
Investment Fair Valuation Weighted Weighted
property value method Min Max average Min Max average
type
------------- ----------- ----------- ------ ------ --------- ------ ------ ---------
Completed 46,000,000 Investment 15.0 47.5 21.95 5.8 7.0 6.2
Development 7,338,000 Residual 10.0 27.0 17.97 5.25 7.0 5.79
Other* 1,400,000
------------- -----------
Total 54,738,000
*Comprises land assets that are held at their estimated open market value.
All other factors remaining constant, an increase in rental income would increase a valuation whilst increases in nominal equivalent yield and discount rate would result in a fall in value and vice versa. However, there are interrelationships between unobservable inputs as they are determined by market conditions. Corresponding movements in more than one unobservable input may have a complementary effect on a valuation whereas unobservable inputs moving in opposite directions may compensate each other. For example, where market rents and nominal equivalent yields increase simultaneously, the overall impact on a valuation may be minimal.
For investment properties undergoing development, a reduction in the cost and time to complete a scheme will have a positive impact on value, assuming all other factors remain constant. Conversely, if the anticipated cost or time to complete a scheme increased then this would negatively impact value, assuming all other factors remain constant.
All of the Group's investment properties are considered to be 'Level 3' in the fair value hierarchy described by IFRS 13. There have been no transfers of property between hierarchical levels in the year.
The historic cost of the Group's investment properties as at 31 March 2018 was GBP29,790,313 (31 March 2017: GBP64,473,583; 30 September 2017: GBP69,326,834).
11. Business and other receivables
Unaudited Unaudited Audited
as at as at as at
31 March 31 March 30 September
2018 2017 2017
============================= =========== =========== ======================
GBP GBP GBP
============================= =========== =========== ======================
Business receivables 3,420,383 367,680 1,244,826
Property sales receivables 12,813,835 8,617,192 17,087,460
Rents recognised in advance 393,237 746,920 845,855
Amounts receivable under
Forward
Funding Agreements 5,261,492 8,991,612 12,617,851
Prepayments and accrued
income 123,554 185,454 258,027
Other receivables 1,143,716 4,801,578 915,865
============================== =========== =========== ======================
23,156,217 23,710,436 32,969,884
============================= =========== =========== ======================
Property sales receivables comprised amounts receivable in respect of investment property sales that had unconditionally exchanged prior to the relevant balance sheet date.
Amounts receivable under Forward Funding Agreements relate to the income referred to in note 4.
All of the above amounts are either receivable within one year or will be released to the income statement within one year except for GBP292,413 (31 March 2017: GBP706,386; 30 September 2017: GBP789,988) of lease incentives, included above within rents recognised in advance, which are due to be released to the income statement in more than one year.
No business receivables were overdue or impaired at the end of any of the above periods.
12. Cash and cash equivalents
Included within the Group's cash and cash equivalents balance as at 31 March 2018 is GBPnil (31 March 2017: GBP81,798; 30 September 2017: GBP124,052) in bank accounts held as security by the providers of the Group's secured bank debt and hedging facilities.
13. Business and other payables
Unaudited Unaudited Audited
as at as at as at
31 March 31 March 30 September
2018 2017 2017
============================ ====================== ====================== =====================================
GBP GBP GBP
============================ ====================== ====================== =====================================
Business payables 7,843,839 2,850,735 3,979,539
Amounts payable
under
Forward
Funding
Agreements 2,271,267 - 7,686,187
Other creditors 393,556 4,033,261 373,749
Accruals and
other amounts
payable 10,965,162 7,782,817 7,277,347
============================= ====================== ====================== =====================================
21,473,824 14,666,813 19,316,822
============================ ====================== ====================== =====================================
All of the above amounts are due within one year and none incur interest.
14. Borrowings: amounts repayable within one year
Unaudited Unaudited Audited
as at as at as at
31 March 31 March 30 September
2018 2017 2017
=================================== ====================== ====================== =========================
GBP GBP GBP
=================================== ====================== ====================== =========================
Bank loans (secured):
Investment facilities - - 25,722,372
Development facilities - 25,722,372 -
----------------------------------- ---------------------- ---------------------- -------------------------
- 25,722,372 25,722,372
---------------------------------------------------------- ---------------------- -------------------------
Investment facility:
In March 2017, the development facility that was entered into in December 2014 (see below) expired. Construction of the investment property on which the facility was secured completed in an earlier period. On 13 April 2017, the loan was converted into an investment facility and extended until 5 June 2018.
On 23 January 2018, the investment property on which the facility was secured was sold and the facility was repaid in full.
15. Stated capital
Unaudited Unaudited Audited
as at as at as at
31 March 31 March 30 September
2018 2017 2017
============================================================= ========================= ======================== ========================
Number Number Number
============================================================= ========================= ======================== ========================
Authorised
Ordinary shares of no par value Unlimited Unlimited
- number Unlimited
============================================================= ========================= ======================== ========================
Issued and fully paid
Ordinary shares of no par value
- number 168,350,374 168,350,374 168,350,374
============================================================= ========================= ======================== ========================
Summary of movements in stated GBP GBP
capital GBP
============================================================= ========================= ======================== ========================
Ordinary shares of no par value
* total paid on issues to date 266,359,124 266,359,124 266,359,124
* purchased for cancellation
------------------------------------------------------------- ------------------------- ------------------------ ------------------------
in prior years (99,309,458) (99,309,458) (99,309,458)
------------------------------------------------------------- ------------------------- ------------------------ ------------------------
* reclassification of the attributed retained earnings
------------------------------------------------------------- ------------------------- ------------------------ ------------------------
element of share buybacks undertaken
in prior
------------------------------------------------------------- ------------------------- ------------------------ ------------------------
years 10,951,754 10,951,754 10,951,754
------------------------------------------------------------- ------------------------- ------------------------ ------------------------
Redeemable "B" shares of no
par value (see below)
------------------------------------------------------------- ------------------------- ------------------------ ------------------------
- - -
* total paid on issue in the current year
------------------------------------------------------------- ------------------------- ------------------------ ------------------------
* redemption for cancellation in
------------------------------------------------------------- ------------------------- ------------------------ ------------------------
the current year - (19,865,169) (19,865,169)
------------------------------------------------------------- ------------------------- ------------------------ ------------------------
* redemption for cancellation in
------------------------------------------------------------- ------------------------- ------------------------ ------------------------
prior years (116,697,976) (96,832,807) (96,832,807)
------------------------------------------------------------- ------------------------- ------------------------ ------------------------
Total issue and purchase costs
deducted to date (9,414,088) (9,414,088) (9,414,088)
------------------------------------------------------------- ------------------------- ------------------------ ------------------------
Stated capital per the
balance sheet 51,889,356 51,889,356 51,889,356
============================================================= ========================= ======================== ========================
Transactions with Shareholders in the prior year - "B" shares and dividends:
In November 2016, a return of cash of 18p per ordinary share was made to Shareholders (the Third Return of Cash). The total Third Return of Cash of GBP30.3m comprised the following two elements:
-- GBP19.9m paid to Shareholders holding 110,362,052 of the Company's ordinary shares. This was paid through the redemption of an identical amount of redeemable "B" shares which had been allotted and issued to the holders of these shares at nil pence per share earlier in October 2016 as one of the options available to Shareholders under the mechanism of the Third Return of Cash.
-- An interim dividend amounting in total to GBP10.4m (see note 9). This was paid to Shareholders holding the remaining 57,988,322 of the Company's ordinary shares in issue at that date who elected to receive the Third Return of Cash by way of a cash dividend. The cash dividend was debited to retained earnings.
Issue and purchase costs of GBP11,970 in respect of the redeemable "B" shares were incurred in relation to the Third Return of Cash.
16. Net asset value per share
Net asset value per share is calculated as the net assets of the Group attributable to Shareholders at each balance sheet date, divided by the number of shares in issue at that date (see note 15).
There are no share options or other equity instruments in issue and therefore no adjustments need to be made for dilutive or potentially dilutive equity arrangements.
17. Related party transactions and balances
Interests in shares
The interests of the Directors and their families in the share capital of the Company are as follows:
Ordinary shares
======================================
Unaudited Unaudited Audited
as at as at as at
31 March 31 March 30 September
2018 2017 2017
================= ========== ========== ==============
Number Number Number
================= ========== ========== ==============
Phil Wrigley 447,748 447,748 447,748
Steve Webb 319,046 319,046 319,046
Danny Kitchen 622,927 622,927 622,927
Alastair Irvine 6,195,306 6,195,306 6,195,306
================= ========== ========== ==============
The interests disclosed above include both direct and indirect interests in shares. There were no Returns of Cash in the period. In the prior year, the Third Return of Cash to Shareholders in November 2016 resulted in the Directors receiving an aggregate GBP1,365,305 on the same terms as the other Shareholders of the Company.
LXB(3) Partners LLP and its subsidiary undertakings are related parties of the Company. LXB(3) Partners LLP is the Investment Manager to the Group and is the parent undertaking of LXB Adviser LLP which was the Investment Manager to the Group during the period until 31 March 2018. At 31 March 2018, the members of LXB(3) Partners LLP (and their spouses) held an aggregate total of 15,605,677 (31 March 2017: 17,247,977; 30 September 2017: 17,247,977) shares in the Company. The Third Return of Cash to Shareholders in the prior year resulted in the members of LXB(3) Partners LLP (and their spouses) receiving an aggregate amount of GBP3,536,162 on the same terms as the other Shareholders of the Company.
There have been no changes to any of the above shareholdings between 31 March 2018 and the date of this report
Fees
Directors' fees payable during the period to 31 March 2018 were GBP152,500 (period to 31 March 2017: GBP152,500; year ended 30 September 2017: GBP305,000). As at 31 March 2018, GBP76,250 (31 March 2017: GBP76,250; 30 September 2017: GBP76,250) of fees remained outstanding and are included within business and other payables (note 13).
Management fees during the period to 31 March 2018 of GBP850,000 (period to 31 March 2017: GBP2,000,000; year ended 30 September 2017: GBP2,850,000) were payable to the group headed by LXB(3) Partners LLP. No amounts were outstanding at the respective balance sheet dates.
LXB Adviser LLP was permitted, under the terms of the Investment Advisory Agreement, to recharge certain costs and expenses incurred in the discharge of its duties. During the period to 31 March 2018, it recharged costs totalling GBP18,853 (period to 31 March 2017: GBP57,228; year ended 30 September 2017: GBP87,303) to the Group.
The Scheme of Arrangement
On 3 February 2018, the Company announced a proposed reorganisation by way of a Jersey Scheme of Arrangement (the Scheme) which was passed by Shareholders on 27 February 2018 and sanctioned by the Royal Court of Jersey on 16 March 2018.
As described in more detail in the Scheme Circular which can be found on the Company's website, in order to meet the Shareholders' expectations of winding up the Company on or around 31 March 2019, the Scheme allowed, under the court-sanctioned Framework Agreement, for the transfer of certain longer term assets and liabilities that are expected to endure beyond 31 March 2019, to IW Midco Limited, a subsidiary undertaking of the group of companies headed by IW Topco Limited (the IW Group).
Pursuant to the Framework Agreement:
-- On 31 March 2018, the effective time of the Scheme, the Group sold LXB Retail Properties Fund LP and its two subsidiary undertakings, LXB Holdings Limited and LXB RP (London Road) Limited (the Transferring SPVs) to IW Midco Limited for GBP5,004, being the total value of the net assets of the Transferring SPVs at the effective time.
-- Prior to the effective time, the Group had paid an amount of GBP1.395m to the Transferring SPVs in order to fully fund the net liabilities of those entities prior to their sale to IW Midco Limited.
-- On 4 April 2018, the Group paid IW Topco Limited GBP98,612 in order to fund the running costs of the IW Group for the forthcoming year. Also on 4 April 2018, the Group paid to an escrow account of Carey Olsen an amount of GBP667,822 in order to fund the running costs of the IW Group in future years. The future running costs are to be released to the IW Group in annual instalments.
The IW Group is owned and controlled by Brendan O Grady, who is a designated member of LXB(3) Partners LLP.
Incentives - carried interest arrangements with LXB(3) Partners LLP
The carried interest arrangements with LXB(3) Partners LLP were cancelled as a result of the Scheme. No amounts were payable to LXB(3) Partners LLP at cancellation.
18. Post balance sheet events
On 18 May 2018, the Group completed the disposal of the final part of its investment property asset at Neats Court Retail Park in Sheppey generating net initial cash proceeds of GBP2.45m.
Glossary
AIM A sub-market of the London Stock Exchange.
CISE The Channel Islands Securities Exchange.
Investment Manager LXB(3) Partners LLP
Investment Advisory The agreement between LXB(3) Partners LLP and
Agreement the Company (formerly between LXBRP GP Limited,
the General Partner of LXB Retail Properties
Fund LP and LXB Adviser LLP) under which LXB(3)
Partners LLP provides investment advice to the
Group.
LIBOR The London Interbank Offered Rate, being the
interest rate charged by one bank to another
for lending money.
NAV Net asset value.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR QVLFLVQFLBBZ
(END) Dow Jones Newswires
June 29, 2018 02:00 ET (06:00 GMT)
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