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Share Name Share Symbol Market Type Share ISIN Share Description
Toc Property Backed Lending Trust Plc LSE:PBLT London Ordinary Share GB00BD0ND667 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 86.00 84.00 88.00 86.00 86.00 86.00 0.00 01:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 2.3 1.0 3.8 22.6 23

TOC Property Backed Lendng Tst PLC Half-year Report

29/07/2021 12:00pm

UK Regulatory (RNS & others)


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TIDMPBLT

RNS Number : 9388G

TOC Property Backed Lendng Tst PLC

29 July 2021

TOC PROPERTY BACKED LING TRUST PLC

Interim Report & Financial Statements for the six months ended 31 May, 2021

Announcement of Interim Results

LEI: 213800EXPWANYN3NEV68

Chairman's Statement

Highlights

Net Asset Value increase from 83.93 pence per share to 84.68 pence per share

Net Asset Value total return of 2.1%

Dividend distributions totalling 1.0p (2020: 1.5p) for the period

Ordinary share mid-price equivalent to a premium of 1.5%, as at 31 May 2021

Gearing facility with Shawbrook Bank Limited renewed to May 2022

Background

At the beginning of the period covered by this report, the Company entered the fifth year of trading since being listed on the main market of the London Stock Exchange in January 2017.

Headlines have continued to be dominated by the Covid-19 pandemic throughout the period, paradoxically boosting certain areas of the economy, notably digital commerce, e-learning and virtual business systems but adversely affecting sectors including travel, hospitality and high street retail outlets. Housebuilding, on the other hand, has remained resilient, aided by the extension of the UK Stamp Duty holiday scheme and underpinned by a fresh surge in demand for home loans.

Net Asset Value

The Company's Net Asset Value per share increased from 83.93p to 84.68p over the six months ended 31 May 2021. Taking the effects of dividend distributions into account, this was equivalent to a NAV Total Return of 2.1%. This figure may be placed into context by the total return figures over the same period of the Association of Investment Companies' (AIC's) "Property-Debt" sector, of which PBLT is a component member, of 3.4% and of the AIC's "Debt - Direct Lending" sector of 2.3%. Meanwhile in a much broader context the FTSE 100 and FTSE All-Share Indices returned 14.1% and 15.2%, respectively, on a total return basis over the same interval.

Dividends

A first quarterly dividend of 1 penny per share was paid on 30 June 2021. As set out in the Annual Report, the Company expects to pay dividends at a rate of 1 penny per share per quarter, equivalent to 4 pence per share per year in aggregate. Depending on market conditions and the performance of the investment portfolio, a final balancing payment may be made at the end of the current financial year so as to at least fulfil the investment trust qualification requirements.

Investment Portfolio

The total value of the Company's portfolio now stands at GBP19.7 million, from 17 live projects, following a reduction of GBP3.2 million in the gross value of loans and receivables. This is the result of repayment of loans by a number of borrowers and has increased the Company's cash available for redeployment.

New Investments - the Company agreed three new facilities during the period:

-- Horizon Cremation, Scotland - GBP3.8m 36-month facility - funding to construct a modern, environmentally friendly crematorium in East Renfrewshire, Glasgow, Scotland.

-- Bridge Street, Scotland - GBP1.05m 27-month facility - mezzanine facility to support the development of 31 residential apartments and three commercial units, working with experienced developers in Paisley, Scotland.

-- Finnieston, Scotland - GBP320,000 12-month facility - a bridging facility for a piece of land in the city of Glasgow which is currently going through the planning process .Additionally, since the period end, a new GBP4.5 million, 30 month facility, has been agreed with Calmont (Oak Meadows) Ltd to support the construction of 61 new homes at Middleton St George, Darlington.

Exits - successful redemptions were concluded with Gateshead Town Hall, Rare Earth Medburn and Chilton Moor, with the three projects now fully exited with full loan and interest repayment. These were repaid in December 2020, January 2021 and April 2021, respectively and generated an Internal Rate of Return ('IRR') of 8.23%, 8.24% and 12.77%, respectively.

Impairments - as discussed in the 2020 Annual Report, two legacy projects (Gatsby Homes and West Auckland) continued to be unable to meet their interest obligations as the borrowers work towards finalising the projects. Under IFRS 9 we are required to recognise the interest income, and the offsetting impairment in the Statement of Comprehensive Income. The Board and Investment adviser were aware the interest was unlikely to be received in this period, and liquidity has been planned accordingly. The underlying loans have not been impaired during the period from the recoverable value recorded in the Statement of Financial Position.

The loan portfolio is discussed more fully in the Investment Adviser's review.

Gearing

The Company continued to benefit from a Gearing facility with Shawbrook Bank Limited, the facility having been renewed for a further year in May 2021. None was drawn at the period end. The facility was renewed for a further year until May 2022. The facility provides the company with the capacity to invest in a wider range of loans, thus diversifying exposure and providing operating leverage with respect to the cost base of the Company. The period has been characterised by the winter Covid lockdown, which has to some degree inhibited the ability to deploy the capital available. However, as discussed more fully herein, the Company continues to see a number of good quality lending opportunities and anticipates putting more capital to work in the coming months.

Change of Auditor

Since the end of the period, following a competitive audit tender process, the Company has agreed to appoint MHA MacIntyre Hudson LLP as its auditors.

Outlook

Implementation of the Company's Strategic Review, as described in the 2020 Annual Report, is now underway. A key component of this strategy is the placing the Company's investment portfolio on a less volatile, more stable basis, reducing the risk of its loans by (typically) requiring a higher equity component from its borrowers. This will have the effect of lowering interest earnings from the loans - though still, in the current environment of extremely low interest rates, particularly on savings products, potentially generating an attractive dividend yield. The Company should therefore be well positioned as the UK economy gradually recovers and moves forward in the wake of the Covid crisis.

John Newlands, Chairman

29 July 2021

Investment Adviser's Review

ABOUT THE ADVISER

Tier One Capital Ltd is a Newcastle upon Tyne based wealth management and property lending specialist providing financial advice services and bespoke tailored lending to the residential and commercial property development market.

INVESTMENT ADVISER'S REPORT - REVIEW OF THE 6 MONTHS TO 31 MAY 2021

This Interim Report and Accounts covers the end of the fourth and the beginning of the fifth year of performance of the Company, since its Listing in January 2017.

The Company's primary purpose is to provide debt finance to the property development sector. The Company also benefits from a number of equity positions attained at nil cost in a number of the borrowing entities which it supports.

Investment Adviser's highlights:

The trading period covered by this report has been historically unprecedented due to the ongoing impact of the Covid-19 pandemic which has decimated certain sectors of the economy, most notably travel and hospitality, and brought about what appear to be seismic shifts in how people work and live. A second lockdown was entered into at the beginning of 2021 and this slowed investment decisions until the vaccine roll out gained real momentum towards the end of Q1 2021. In addition to the pandemic, there remain uncertainties following the UK formally exiting the European Union in December 2020. While positive features are seen, such as the improved UK housing market, construction supply chain activity is disrupted and subject to escalating cost pressures.

Measures introduced by the government, most notably the stamp duty holiday, together with an increase in household discretionary cash and a lack of supply saw the residential housing market accelerate to new highs and forecasts expect these increases to be consolidated over the remainder of the year and into 2022.

The Company used the first six months to protect shareholder value, rebalance the portfolio to more conservative loans and reset the Company's investment policy to ensure it is fit for purpose as we enter the years ahead. We are pleased to report the investment highlights below:

   --      NAV Total Return of 2.1%. 
   --      Continued focus on liquidity, creating fund headroom of GBP9.7m at the period end. 

-- Profitable exits of three significant portfolio projects, bringing the number of exits since inception to ten.

-- Refreshed investment strategy allowing greater flexibility to deploy in sectors forecasted to grow.

-- Redeployment of funds across the North East and Scotland, meaning the Company is now focussed on regions and market economies to which it is closest.

-- The collection of 78.12% of contractual Net Interest Income due, despite exposure to non- performing sectors and assets. This figure increases to 94.55% when impaired assets are excluded.

-- Payment of a dividend of 1p for the first quarter, equivalent to an annualised dividend yield of 4.76%.

DEPLOYMENT

Despite the ongoing uncertainties faced, we are pleased to report an active period for new transactions, deployments to existing projects together with full and partial exits:

The Company agreed three new facilities during the period:

   --           Horizon Cremation, Scotland - GBP3.8m 36-month facility 
   --           Bridge Street, Scotland - GBP1.05m 27-month facility 
   --           Finnieston, Scotland - GBP320,000 12-month facility 

Further capital was also deployed to each of these projects in accordance with agreed milestones.

There were further deployments of capital as follows:

Deployments of Capital Update

 
 Project             GBP'000 
 Horizon Cremation     1,085 
                     ======= 
 Bridge Street           481 
                     ======= 
 Bill Quay               350 
                     ======= 
 Finnieston              320 
                     ======= 
 Coalsnaughton           217 
                     ======= 
 IHL                     194 
                     ======= 
 Springs                  50 
                     ======= 
 

Post period end, we were delighted to announce a GBP4.5m facility with Calmont (Oak Meadows) Ltd. The 30 month facility will facilitate the building of 61 new modern homes at Middleton St George, Darlington. The borrower is backed by private equity firm Maven Capital Partners LLP, and demonstrates the Company's ongoing commitment to supporting both residential and commercial developments.

Portfolio Exits

In December 2020, the eighth exit within the loan book occurred with the repayment of the Gateshead Town Hall project. All capital and interest was paid in full in December 2020 generating a positive internal rate of return ('IRR') of 8.23% since June 2018.

The ninth exit occurred in January 2021. Rare Earth Medburn, which has been in the portfolio since listing, repaid all of its capital and interest, generating an IRR of 8.24%.

The tenth exit occurred in April 2021. Chilton Moor, which has been in the portfolio since August 2019, repaid all of its capital and interest, generating an IRR of 12.77%.

Partial Redemptions Update

During the period there were a number of partial redemptions including:

 
 Project           GBP'000 
 Bill Quay             600 
                   ======= 
 Springs               419 
                   ======= 
 Whitefield Farm       310 
                   ======= 
 Gatsby Homes          172 
                   ======= 
 IHL                   170 
                   ======= 
 Newgate Street        164 
                   ======= 
 Newlands               50 
                   ======= 
 

Impairments

The Company, in accordance with IFRS 9, recognises the gross interest receivable on all its loans, and then recognises an impairment charge when that interest is not paid by the borrower, and there is not a clear expectation that this can be recovered subsequently. During the period to 31 May 2021,and as anticipated in the 2020 financial statements, the two projects unable to meet their interest requirements were Gatsby Homes and West Auckland.

We note that Gatsby Homes has repaid capital of GBP172,000 during the period, with further such repayments subsequent to year end. We anticipate that the remainder of the properties in this project will be sold during 2021, with a return of the residual loan balance held on the balance sheet. As such, we anticipate that the residual interest on this loan will be subject to impairment in 2021.

Post period end, West Auckland repaid GBP911,000 of capital and we anticipate that the remainder of the residual loan balance recognised on the balance sheet will be repaid before the end of the financial year. Pleasingly, this includes a write back of GBP243,000 to the loan in this reporting period as the recovery strategy that was implemented has delivered.

Accordingly, no provision has been made for loan impairment to the recoverable amount recorded in the Statement of Financial Position.

IFRS 9 also requires the Company to consider various credit loss scenarios and assign a risk weighting to these. This calculation generates a provision which is taken as a further impairment for the year. In this period the Company has increased the provision to GBP448,000 from the GBP261,000 that was in place at 30 November 2020. This provision is based on look-forward statements to withstand market-related shocks including those caused by the ongoing Covid-19 pandemic.

Gearing

In May 2021, the Company refreshed a committed revolving credit facility with Shawbrook Bank for a further year. Again the key driver was headroom and liquidity and its renewal for a fourth year demonstrates the support that the Company has from its lender, and the growing confidence in future deployment given the current strength of pipeline.

DEPLOYMENT

PROFIT SHARE PROJECTS

There are currently ten Profit Share projects in the portfolio (Nov 2020: ten).

Since the listing of the Company we have recognised an uplift in the equity value of seven projects (Nov 2020: five), The remaining Profit Share holdings are recognised as nil value, given where we are in the lifecycle of each project. We monitor and review this on an ongoing basis.

REFRESHED INVESTMENT STRATEGY

In March 2021 the Company's shareholders voted overwhelmingly to support a refreshed investment strategy for the Company. The key changes are as follows:

-- Reposition the Company as a stretch senior lender which has the benefit of reducing the risk of default. (as borrowers are typically required to contribute equity).

-- Reduce sector constraints to give the Company greater flexibility for deployment across residential and commercial.

OUTLOOK

Economic Outlook

Residential

As at 31 May 2021, 77.3% of deployed funds were invested across 12 projects with a residential focus.

The housing market has seen considerable growth, with Nationwide House Price Index reporting 13.4% increase in the twelve months to June 2021 across the UK. Within the North East and Scotland, these figures were a more modest 11.2% and 7.1% respectively. In Scotland the Stamp Duty holiday ended on 31 March 2021 which partially explains the smaller increase.

The outlook amongst analysts for the rest of 2021 and 2022 continues to be positive. The Stamp Duty holiday has accelerated transactions for the first half of the new year but underlying demand is likely to remain in the near term as the economy unlocks. The biggest driver of pricing for the rest of 2021 will be the continued shortage of supply with the Royal Institute of Chartered Surveyors (RICS) June 2021 report showing the number of properties being listed falling for the third successive month. The report goes on to say that "the latest feedback continues to signal a clear excess of demand over supply". The report comments that there is a strong belief that house prices "will increase further over the next twelve months".

Turning to cost pressures, the past twelve months has seen considerable price inflation on both materials and labour. According to ISH Markit/CIPS UK Construction PMI, "construction activity expanded at the fastest pace since June 1997...severe shortages of construction products and materials resulted in a survey record rise in purchasing prices in June". Specifically in house building construction, the index increased at its fastest pace since November 2003.

The Builders Merchants Federation and Construction Products Association have warned that availability issues are expected to worsen before they improve. The ongoing impact of the Covid-19 pandemic is a significant factor behind the shortages and price increases. There are other factors including the imbalance between global demand and supply for timber which is not likely to be resolved quickly. Therefore cost pressures are here for the rest of 2021.

The Company's residential exposure is predominantly in the North East (93.3%). This will continue to be a key focus as this region continues to offer affordability for house buyers, despite the recent increase in prices. Projects are appraised using the views of market experts for sales values and build cost and delivery, with all assumptions stress tested.

Commercial

As at 31 May 2021, 23.7% of deployed funds were invested across five projects with a commercial focus.

The new investment strategy allows the Company to be more selective in the level of exposure to commercial developments. We believe that a selective approach to the Company's deployment in the commercial property sector will continue to create shareholder value. The sectors within the commercial property space that the Company currently has exposure to are:

   --      bereavement (crematorium); 
   --      strategic land; and 
   --      shared office space. 

Each of the above sub-sectors offer downside protection in the current uncertain economic times with the latter two also giving flexibility for the borrowers as and when trends change. We will continue to identify and support professional, experienced and reliable management teams who have a clear vision and robust plan.

PIPELINE

In addition to the GBP4.5m project that was supported in June 2021, there is GBP10.7m at various stages of deployment across three residential projects with 100% in the North East.

The quality and experience of each management team that we are in discussions with will continue to enhance the Company's portfolio and strengthen its reputation in the market. This should lead to the creation of shareholder value that is sustainable in the longer term.

Ian McElroy,

Tier One Capital Ltd

29 July 2021

THE INVESTMENT PORTFOLIO AS AT 31 MAY 2021

 
Project                  Sector            Maturity    Profit      Security           %         LTV* (May          Loan Value          Loan Value 
                                                        Share                                         21)           (May 21)            (Nov 20) 
                                            Date                              Portfolio                 %           GBP'000s            GBP'000s 
                   ============  ===================  =======  ============  ==========  ================  ================== 
                                                        Yes - 
Bill Quay           Residential             Feb 2022    25.1%        Senior        13.7              63.2               3,046               3,236 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
                                                        Yes - 
Springs             Residential             Nov 2021    25.1%        Senior        11.5              78.9               2,559               2,952 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
West Auckland       Residential             Jun 2022       No        Senior         8.5             102.4               1,892               1,649 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
                                                        Yes - 
 Coalsnaughton       Commercial             Jul 2021    25.1%        Senior         8.4             123.9               1,867               1,688 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
                                                        Yes - 
 Newgate Street     Residential             Aug 2020    25.1%        Senior         8.0             100.0               1,771               1,941 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
                                                        Yes - 
 Gatsby Homes       Residential             Nov 2021    25.1%        Senior         5.2             101.5               1,161               1,333 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
 Pendower Hall       Commercial             Mar 2023       No        Senior         5.2              88.3               1,150               1,150 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
                                                         Exit 
 Whitefield Farm    Residential             Jan 2020      fee        Senior         5.1              75.1               1,140               1,450 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
 Horizon                                                 Exit 
  Cremation          Commercial             Dec 2023      fee        Senior         4.9              43.6               1,085                   - 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
 IHL                Residential             Sep 2021       No   Subordinate         3.6              67.6                 800                 776 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
 Charlton's Bonds   Residential             Nov 2021       No        Senior         2.8             100.0                 628                 628 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
                                                         Exit 
 Bridge Street      Residential             Aug 2023      fee   Subordinate         2.2              32.0                 481                   - 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
                                                        Yes - 
 Oswald Street       Commercial             Feb 2022    25.1%        Senior         1.7              64.9                 382                 382 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
 Finnieston         Residential             May 2022       No        Senior         1.4              30.5                 320                   - 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
                                                         Exit 
 Newlands            Commercial             Mar 2022      fee        Senior         1.3              56.6                 300                 330 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
 Glenfarg           Residential             Oct 2020       No   Subordinate         1.3              25.0                 300                 300 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
 Fernhill           Residential             Jul 2020       No   Subordinate         2.7              38.1                 598                 598 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
 Chilton Moor                                            Exit 
  **                Residential               Exited      fee        Senior         0.2               N/a                  49               2,459 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
                                                        Yes - 
 Marley Hill***     Residential               Exited    25.1%        Senior         0.0               N/a                   3                  60 
                   ============  ===================  =======  ============  ==========  ================  ==================  ================== 
 Exits                                                                                                                      -               1,622 
                                                                             ==========  ================  ==================  ================== 
 General Impairment                                                               (2.0)                                 (448)               (261) 
                                                                             ==========  ================  ==================  ================== 
 Cash                                                                              14.3                                 3,174               1,002 
                                                                             ==========  ================  ==================  ================== 
 
   Total/Weighted 
   Average                                                                        100.0              80.9              22,258              23,295 
                                                                             ==========  ================  ==================  ================== 
 

*LTV has been calculated using the carrying value of the loans as at the balance sheet date

** Completed in January 2021; plot fees held on the balance sheet.

*** Completed in December 2019; equity shares held on the balance sheet.

Interim Management Report

The principal and emerging risks and uncertainties that could have a material impact on the Company's performance have not changed from those set out in the Company's Annual Report for the year ended 30 November 2020.

The Directors consider that the Chairman's Statement and the Investment Adviser's Review in this Interim Report, the above disclosure on related party transactions and the Statement of Directors' Responsibilities below, together constitute the Interim Management Report of the Company for the six months ended 31 May 2021 and satisfy the requirements of the Disclosure Guidance and Transparency Rules 4.2.3 to 4.2.11 of the Financial Conduct Authority.

The Interim Report has not been reviewed or audited by the Company's Auditor.

The Directors believe, having considered the Company's investment objectives, risk management policies, capital management policies and procedures, the nature of the portfolio and expenditure projections, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future and, more specifically, that these are no material uncertainties pertaining to the Company that would prevent its ability to continue in such operational existence for at least twelve months from the date of the approval of this Interim Report. For these reasons they consider that there is sufficient evidence to continue to adopt the going concern basis in preparing the accounts.

Directors' Responsibility Statement

We confirm that to the best of our knowledge:

-- The condensed set of financial statements has been prepared in accordance with FRS 104 'Interim Financial Reporting' and gives a true and fair view of the assets, liabilities, financial position and profit of the Company, as at 31 May 2021, as required by the Disclosure Guidance and Transparency Rule 4.2.4R;

-- The Interim Management Report includes a fair review of the information required by the Disclosure and Transparency Rule 4.2.7R, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

-- The Interim Management Report includes a fair review of the information concerning related party transactions as required by Disclosure Guidance and Transparency Rule 4.2.8R.

On Behalf of the Board

John Newlands, Chairman

29 July 2021

Condensed Statement of Comprehensive Income

 
                                                       Six months     Six months     Year ended 
                                                        ended 31       ended 31       30 November 
                                                        May 2021       May 2020       2020 (audited) 
                                                        (unaudited)    (unaudited) 
                          Note    Revenue    Capital          Total          Total             Total 
                                  GBP'000    GBP'000        GBP'000        GBP'000           GBP'000 
                         -----  ---------  ---------  -------------  -------------  ---------------- 
 Revenue 
  Investment interest                 879          -            879          1,290             2,346 
                         -----  ---------  ---------  -------------  -------------  ---------------- 
 
   Total revenue                      879          -            879          1,290             2,346 
                         -----  ---------  ---------  -------------  -------------  ---------------- 
 Losses on investments 
  held at fair value 
  through profit 
  of loss                            (79)         40           (39)              -             (452) 
                         -----  ---------  ---------  -------------  -------------  ---------------- 
 
   Total income                       800         40            840          1,290             1,894 
                         -----  ---------  ---------  -------------  -------------  ---------------- 
 Expenditure 
  Investment adviser 
  fee                                (34)          -           (34)           (24)              (57) 
                         -----  ---------  ---------  -------------  -------------  ---------------- 
 Impairments on 
  investments held 
  at amortised cost                  (58)         57            (1)          (611)             (237) 
                         -----  ---------  ---------  -------------  -------------  ---------------- 
 
   Other expenses                   (198)          -          (198)          (256)             (513) 
                         -----  ---------  ---------  -------------  -------------  ---------------- 
 
   Total expenditure                (290)         57          (233)          (891)             (807) 
                         -----  ---------  ---------  -------------  -------------  ---------------- 
 Profit before 
  finance costs 
  and taxation                        510         97            607            399             1,087 
                         -----  ---------  ---------  -------------  -------------  ---------------- 
 
   Finance costs 
                         -----  ---------  ---------  -------------  -------------  ---------------- 
 
   Interest payable                   (1)          -            (1)          (134)             (231) 
                         -----  ---------  ---------  -------------  -------------  ---------------- 
 
   Profit before 
   taxation                           509         97            606            265               856 
                         -----  ---------  ---------  -------------  -------------  ---------------- 
 
   Taxation                             -          -              -              -                 - 
                         -----  ---------  ---------  -------------  -------------  ---------------- 
 Profit and total 
  comprehensive 
  profit for the 
  period/year                         509         97            606            265               856 
                         -----  ---------  ---------  -------------  -------------  ---------------- 
 
   Basic earnings 
   per share                3       1.89p      0.36p          2.25p          0.98p             3.18p 
                         -----  ---------  ---------  -------------  -------------  ---------------- 
 

The total column of this statement represents the Company's Statement of Comprehensive Income, prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies.

All revenue and capital items in the above statement derive from continuing operations.

There is no other comprehensive income as all income is recorded in the statement above.

Condensed Statement of Financial Position

 
                              As at 30 
   As at 31     As at 31       November 
        May 
       2021     May 2020           2020 
(unaudited)  (unaudited)      (audited) 
 
 
                                       Notes   GBP'000   GBP'000          GBP'000 
=====================================  =====  ========  ========  =============== 
 Non-current assets 
  Investments held at fair value           5     1,580     4,388            3,948 
 Loans at amortised cost                   6     3,099     6,771            2,799 
                                                 4,679    11,159            6,747 
 Current assets 
  Investments held at fair value           5    12,688    10,776           12,861 
 Loans at amortised cost                   6     2,326     4,523            3,247 
 Other receivables and repayments                    7        26               21 
 Cash and cash equivalents                       3,174     1,672            1,002 
                                                18,195    16,997         17,131 
 Total assets                                   22,874    28,156         23,878 
 Current liabilities 
 Loan facility                                       -   (6,000)        (1,150) 
 Other payables and accrued expenses              (75)     (150)            (131) 
 Total liabilities                                (75)   (6,150)        (1,281) 
 Net assets                                     22,799    22,006         22,597 
 Share capital and reserves 
 Share capital                             7       269       269              269 
 Share premium                                   9,094     9,094            9,094 
 Special distributable reserve                  13,093    16,455         13,497 
 Revenue reserve                                   509     (711)                - 
 Capital reserve                                 (166)   (3,101)            (263) 
 Equity shareholders' funds                     22,799    22,006         22,597 
 
   Net asset value per ordinary 
   share                                   8    84.68p    81.73p           83.93p 
 

The notes below form an integral part of the financial statements.

The financial statements were approved by the Board of Directors of TOC Property Backed Lending Trust plc (a public limited company incorporated in England and Wales with company number 10395804) and authorised for issue on 29 July 2021.

They were signed on its behalf by:

John Newlands

Chairman

Condensed Statement of Changes in Equity

 
For the six months ending                                            Special 
                                                                      distributable 
 31 May 2021                       Share           Share              reserve           Capital      Revenue     Total 
                                    capital         premium                              reserve      reserve 
 (unaudited) 
                                    GBP'000         GBP'000                 GBP'000      GBP'000      GBP'000  GBP'000 
=============================  ============  ==============  ======================  ===========  ===========  ======= 
 At beginning of the period             269           9,094                  13,497        (263)            -   22,597 
 Total comprehensive profit 
  for the period: 
 Profit for the period                    -               -                       -           97          509      606 
 Transactions with owners 
 recognised directly in 
 equity: 
 Dividends paid (note 4)                  -               -                   (404)            -            -    (404) 
=============================  ============  ==============  ======================  ===========  ===========  ======= 
 At 31 May 2021                         269           9,094                  13,093        (166)          509   22,799 
 
 
For the six months ending                                         Special 
                                                                   distributable 
 31 May 2020                    Share            Share             reserve            Capital     Revenue      Total 
                                 capital         premium                              reserve      reserve 
 (unaudited) 
                                  GBP'000        GBP'000                 GBP'000      GBP'000       GBP'000  GBP'000 
==========================  =============  =============  ======================  ===========  ============  ======= 
 At beginning of the 
  period                              269          9,094                  16,455      (2,978)         (291)   22,549 
 Total comprehensive 
 profit 
 for the period: 
 Profit for the period                  -              -                       -        (123)           388      265 
 Transactions with owners 
 recognised directly in 
 equity: 
 Dividends paid (note 4)                -              -                       -            -         (808)    (808) 
==========================  =============  =============  ======================  ===========  ============  ======= 
 At 31 May 2020                       269          9,094                  16,455      (3,101)         (711)   22,006 
Condensed Statement of 
Changes in Equity 
                                                                                                               Total 
                                                                   Special                         Revenue 
                                  Share          Share             distributable      Capital      reserve 
For the year ending               capital        premium           reserve            reserve 
30 November 2020 (audited) 
                                  GBP'000        GBP'000                 GBP'000      GBP'000       GBP'000  GBP'000 
==========================  =============  =============  ======================  ===========  ============  ======= 
 At beginning of the year             269          9,094                  16,455      (2,978)         (291)   22,549 
 Total comprehensive 
 profit 
 for the year: 
 Profit for the year                    -              -                       -        (170)       1,026        856 
 Transfer of realised loss 
  on loans                              -              -                 (2,885)        2,885             -        - 
 Transactions with owners 
  recognised directly in 
  equity: 
 Dividends paid (note 4)                -              -                    (73)            -         (735)    (808) 
==========================  =============  =============  ======================  ===========  ============  ======= 
 At 30 November 2020                  269          9,094                  13,497        (263)             -   22,597 
 
 

Condensed Cash Flow Statement

 
 Six months   Six months  Year ending 
         to           to 
     31 May       31 May  30 November 
       2021         2020         2020 
(unaudited)  (unaudited)    (audited) 
 
 
                                      Notes    GBP'000  GBP'000    GBP'000 
===========================================  =========  =======  ========= 
 Operating activities 
 Profit after taxation                             606      265        856 
 Impairments                                       254       61        121 
 Fair value uplifts                              (351)        -       (14) 
 (Increase)/decrease in loan interest 
  receivable                                      (46)       61         14 
 Decrease in other receivables                      14       15         21 
 (Decrease)/increase in other payables            (56)       52         33 
 Interest paid                                       -      134        227 
 Net cash inflow from operating activities 
  before interest and after taxation               421      588      1,258 
 Investing activities 
 Loans given                                   (2,697)  (3,933)    (8,455) 
 Loans repaid                                    6,002    3,186     11,311 
 Net cash inflow/(outflow) from investing 
  activities                                     3,305    (747)      2,856 
 Financing 
 Equity dividends paid                           (404)    (808)      (808) 
 Bank loan drawn down                                -    2,250      3,050 
 Repayment of bank loan                        (1,150)        -    (5,650) 
 Interest paid                                       -    (134)      (227) 
 
 Net cash (outflow)/inflow from financing      (1,554)    1,308    (3,635) 
 
 Increase in cash and cash equivalents           2,172    1,149        479 
 Cash and cash equivalents at the start 
  of the period / year                           1,002      523        523 
 Cash and cash equivalents at 
  the end of the period/year                     3,174    1,672      1,002 
 

Notes to the Condensed Financial Statements (unaudited)

1. INTERIM RESULTS

The condensed financial statements have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and the accounting policies set out in the statutory accounts of the Company for the year ended 30 November 2020. The condensed financial statements do not include all of the information required for a complete set of financial statements and should be read in conjunction with the financial statements of the Company for the year ended 30 November 2020, which were prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. There have been no significant changes to management judgements and estimates.

The condensed financial statements have been prepared on the going concern basis. In assessing the going concern basis of accounting the Directors have had regard to the guidance issued by the Financial Reporting Council. After making enquiries, and bearing in mind the nature of the Company's business and assets, the Directors consider that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing these financial statements.

2. INVESTMENT ADVISER

In its role as the Investment Adviser, Tier One Capital Ltd is entitled to receive from the Company an investment adviser fee which is calculated and paid quarterly in arrears at an annual rate of 0.25 per cent. per annum of the prevailing Net Asset Value if less than GBP100m; or 0.50 per cent. per annum of the prevailing Net Asset Value if GBP100m or more.

There is no balance accrued for the Investment Adviser for the period ended 31 May 2021 (31 May 2020: GBPnil; 30 November 2020: GBPnil).

There are no performance fees payable.

ALTERNATIVE INVESTMENT FUND MANAGER'S DIRECTIVE ('AIFMD')

During the year it has been decided that the Company should become a Small Registered UK Alternative Investment Fund Manager AIFM ('AIFM') replacing R & H Fund Services (Jersey) Ltd. In the course of reviewing the arrangements, it came to the Company's attention that, although the Company has been operating in effect as an internally managed AIFM, an application to apply to become the AIFM still had to be made. An AIFM application has now been made to the FCA.

3. EARNINGS PER SHARE

The revenue, capital and total return per ordinary share is based on each of the profit after tax and on 26,924,063 ordinary shares, being the weighted average number of ordinary shares in issue throughout the period.

 
                                  Six months             Six months               Year ended 
                                    ended 31               ended 31              30 November 
                                    May 2021               May 2020                     2020 
                        GBP'000    Pence per   GBP'000    Pence per   GBP'000      Pence per 
                                       share                  share                    share 
                       --------  -----------  --------  -----------  --------  ------------- 
 Revenue earnings           509         1.89       388         1.44     1,026           3.81 
                       --------  -----------  --------  -----------  --------  ------------- 
 Capital earnings            97         0.36     (123)       (0.46)     (170)         (0.63) 
                       --------  -----------  --------  -----------  --------  ------------- 
 Total earnings             606         2.25       265         0.98       856           3.18 
                       --------  -----------  --------  -----------  --------  ------------- 
 Average number 
  of shares in issue              26,924,063             26,924,063               26,924,063 
                       --------  -----------  --------  -----------  --------  ------------- 
 

Earnings for the period to 31 May 2021 should not be taken as a guide to the results for the year to 30 November 2021.

4. DIVIDS

 
                                    Six months      Six months   Year ended 
                                     ended 31 May    ended 31     30 November 
                                     2021            May 2020     2020 
                                     GBP'000         GBP'000      GBP'000 
 In respect of the prior year: 
  Fourth interim dividend             404             404          404 
                                   --------------  -----------  ------------- 
 In respect of the current year: 
                                   --------------  -----------  ------------- 
 First interim dividend             -               404          404 
                                   --------------  -----------  ------------- 
 Second interim dividend            -               -            - 
                                   --------------  -----------  ------------- 
 Third interim dividend             -               -            - 
                                   --------------  -----------  ------------- 
 Total                              404             808          808 
                                   --------------  -----------  ------------- 
 

A first interim dividend for the year ending 30 November 2021, of 1.00 pence per share, was paid on 30 June 2021 to shareholders on the register on 11 June 2021.

5. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS

The Company's investment held at fair value through profit or loss represents its profit share arrangements whereby the Company owns 25.1% or has an exit fee mechanism for ten companies.

 
                                               31 May   31 May  30 November 
                                                 2021     2020         2020 
                                              GBP'000  GBP'000      GBP'000 
  Opening Balance                              16,809   14,499       14,219 
  Loans deployed                                2,183    3,833        7,805 
  Principal repayments                        (4,760)  (3,106)      (5,516) 
  Prior year interest repayments                (428)    (280)            - 
  Interest receivable                             503      320          753 
  Unrealised losses on investments held at fair value through 
  profit or loss                                 (39)    (102)        (452) 
  Total Loans at fair value through profit 
   and loss                                    14,268   15,164       16,809 
  Split: 
  Non-current assets: Investments held at fair value through profit 
  and loss due for repayment after one year     1,580    4,388        3,948 
  Current assets: Investments held at fair 
   value through profit and 
  loss due for repayment under one year        12,688   10,776       12,861 
 
  6. LOANS AT AMORTISED COST 
 
 
 Opening Balance                               6,046  11,333   11,037 
 Loans deployed                                  514     100      670 
 Principal repayments                        (1,242)    (80)  (5,795) 
 Prior year interest repayments                (134)   (296)        - 
 Interest receivable                             242     196      371 
 Movement in impairments                         (1)      41    (237) 
 Total Loans at amortised cost                 5,425  11,294    6,046 
 
   Split: 
 Non-current assets: Loans at amortised cost due for repayment 
 after one year                                3,099   6,771    2,799 
 Current assets: Loans at amortised cost 
  due for repayment under 
 one year                                      2,326   4,523    3,247 
 

The Company's loans held at amortised cost are accounted for using the effective interest method. The carrying value of each loan is determined after taking into consideration any requirement for impairment provisions during the year, allowances for impairment losses amounted to GBP1,000 (May 2020: gains of GBP41,000; November 2020: losses of GBP237,000).

7. SHARE CAPITAL

 
                                              Nominal value          Number of Ordinary 
                                               GBP'000                shares of 1p 
        Issued and fully paid as at 
         30 November 2020                               269                  26,924,063 
                                      ---------------------  -------------------------- 
        Issued and fully paid as at 
         31 May 2021                                    269                  26,924,063 
                                      ---------------------  -------------------------- 
 

The ordinary shares are eligible to vote and have the right to participate in either an interest distribution or participate in a capital distribution (on a winding up).

8. NET ASSET VALUE PER ORDINARY SHARE

The net asset value per ordinary share is based on net assets of GBP22,798,683 (31 May 2020: GBP22,005,858; 30 November 2020: GBP22,597,279) and on 26,924,063 ordinary shares (31 May 2020: 26,924,063; 30 November 2020: 26,924,063), being the number of ordinary shares in issue at the period/year end.

9. RELATED PARTIES

Fees payable during the year to the Directors and their interests in shares of the Company are considered to be related party transactions and are disclosed within the Directors' Remuneration Report on pages 37 to 38 of the Annual Report. The balance of fees due to Directors at the year end was GBPnil (31 May 2020 GBPnil; 30 November 2020 GBPnil).

The Company has an agreement with Tier One Capital Ltd for the provision of investment advisory services and details of that agreement are set out in the Directors' Report on pages 26 and 27 of the Annual Report.

Ian McElroy is Chief Executive of Tier One Capital Ltd and is a founding shareholder and director of the firm.

Tier One Capital Ltd received GBP28,000 (excluding VAT) investment adviser's fee during the period (31

May 2020: GBP20,000 (excluding VAT); 30 November 2020: GBP47,000 (excluding VAT)) and GBPnil was payable at the period end (31 May 2020: GBP20,000 (excluding VAT); 30 November 2020: GBPnil). Tier One Capital Ltd receives up to a 20% margin and arrangement fee for all loans it facilitates.

There are various related party relationships in place with the borrowers as below:

Thursby Homes (Charlton's Bonds)

Tier One Capital Ltd sold 25.1% of Thursby Homes Ltd on 20 March 2019. The loan amount outstanding as at 31 May 2021 was GBP628,000 (31 May 2020: GBP697,000; 30 November 2020: GBP628,000). Transactions in relation to loans repaid during the period amounted to GBPnil (31 May 2020: GBPnil; 30 November 2020: GBP68,000). Interest due to be received as at 31 May 2021 was GBP21,000 (31 May 2020: GBP9,000; 30 November 2020: GBP8,000). Interest received during the period amounted to GBP25,000 (31 May 2020: GBP28,000; 30 November 2020: GBP54,000).

The following related parties arise due to the opportunity taken to advance the 25.1% profit share contracts:

   ï        Gatsby   Homes 

The Company owns 25.1% of the borrower Gatsby Homes Ltd. The loan amount outstanding as at 31 May 2021 was GBP1.2m (31 May 2020: GBP1.6m; 30 November 2020: GBP1.3m). Transactions in relation to loans (repaid)/made during the year amounted to GBP(172,000) (31 May 2020: GBP225,000; 30 November 2020: GBP(474,000)). Interest due to be received as at 31 May 2021 was GBPnil (31 May 2020: GBPnil; 30 November 2020: GBPnil). Interest received during the year amounted to GBPnil (31 May 2020: GBPnil; 30 November 2020: GBPnil)

   -       Bede and Cuthbert   Developments 

The Company owns 25.1% of the borrower Bede and Cuthbert Developments Ltd. The loan amount outstanding as at 31 May 2021 was GBP3.0m (31 May 2020: GBP921,000; 30 November 2020: GBP3.2m). Transactions in relation to loans (repaid)/made during the period amounted to GBP(250,000) (31 May 2020: GBPnil; 30 November 2020: GBP2.5m). Interest due to be received as at 31 May 2021 was GBP41,000 (31 May 2020 GBP10,000; 30 November 2020: GBP36,000). Interest received during the year amounted to GBP127,000 (31 May 2020: GBP23,000; 30 November 2020: GBP100,000).

   ï        Thursby Homes   (Springs) 

The Company owns 25.1% of the borrower Thursby Homes (Springs) Ltd. The loan amount outstanding as at 31 May 2021 was GBP2.56m (31 May 2020: GBP3.74m; 30 November 2020: GBP2.95m). Transactions in relation to loans (repaid)/made during the period amounted to GBP(369,000) (31 May 2020: GBP175,000; 30 November 2020: GBP(58,000)). Interest due to be received as at 31 May 2021 was GBP185,000 (31 May 2020: GBP138,000; 30 November 2020: GBP168,000). Interest received during the period amounted to GBP131,000 (31 May 2020: GBP189,000; 30 November 2020: GBP365,000).

   ï        Whitefield   Farm 

TOC Property Backed Lending Trust plc owns 25.1% of the borrower Northumberland Ltd. The loan amount outstanding as at 31 May 2021 was GBP1.77m (31 May 2020: GBP3.16m; 30 November 2020: GBP1.94m). Transactions in relation to loans (repaid)/made during the period amounted to GBP(164,000) (31 May 2020: GBP25,000; 30 November 2020: GBP(910,000)). Interest due to be received as at 31 May 2021 was GBP26,000 (31 May 2020: GBP62,000. 30 November 2020: GBP27,000). Interest received during the period amounted to GBP78,000 (31 May 2020: GBP111,000; 30 November 2020: GBP209,000).

   ï        Dinosauria 

TOC Property Backed Lending Trust plc owns 25.1% of the borrower Dinosauria Ltd. The loan amount outstanding as at 31 May 2021 was GBPnil (31 May 2020: GBP550,000; 30 November 2020: GBP550,000). Transactions in relation to loans repaid during the period amounted to GBP550,000 (31 May 2020: GBPnil; 30 November 2020: GBPnil). Interest due to be received as at 31 May 2021 was GBPnil (31 May 2020: GBP7,000; 30 November 2020: GBP18,000). Interest received during the period amounted to GBP2,000 (31 May 2020: GBP22,000; 30 November 2020: GBP44,000).

   ï        Coalsnaughton 

TOC Property Backed Lending Trust plc owns 25.1% of the borrower Kudos Partnership. The loan amount outstanding as at 31 May 2021 was GBP1.87m (31 May 2020: GBP1.8m; 30 November 2020: GBP1.69m). Transactions in relation to loans made during the period amounted to GBP217,000 (31 May 2020: GBP1.8m; 30 November 2020: GBP1.69m). Interest due to be received as at 31 May 2021 was GBP128,000 (31 May 2020: GBP57,000; 30 November 2020: GBP88,000). Interest received during the period amounted to GBP110,000 (31 May 2020: GBP95,000; 30 November 2020: GBP194,000).

   ï        Oswald   Street 

TOC Property Backed Lending Trust plc owns 25.1% of the Riverfront Property Limited Partnership. The loan amount outstanding as at 31 May 2021 was GBP382,000 (31 May 2020: GBPnil; 30 November 2020: GBP382,000). Transactions in relation to loans made during the period amounted to GBPnil (31 May 2020: GBPnil; 30 November 2020: GBP382,000). Interest due to be received as at 31 May 2021 was GBP5,000 (31 May 2020: GBPnil; 30 November 2020: GBP5,000). Interest received during the period amounted to GBP15,000 (31 May

2020: GBPnil; 30 November 2020:   GBP9,000). 

10. OPERATING SEGMENTS

The Board has considered the requirements of IFRS 8 'Operating Segments'. The Board is of the view that the Company is engaged in a single unified business, being the investment of the Company's capital in financial assets comprising loans and joint venture equity contracts and in one geographical area, the United Kingdom, and that therefore the Company has no segments. The Board of Directors, as a whole, has been identified as constituting the chief operating decision maker of the Company. The key measure of performance used by the Board to assess the Company's performance is the total return on the Company's net asset value. As the total return on the Company's net asset value is calculated based on the IFRS net asset value per share as shown at the foot of the Consolidated Statement of Financial Position, the key performance measure is that prepared under IFRS. Therefore no reconciliation is required between the measure of profit or loss used by the Board and that contained in the financial statements.

11. FAIR VALUE HIERARCHY

Accounting standards recognise a hierarchy of fair value measurements for financial instruments which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The classification of financial instruments depends on the lowest significant applicable input, as follows:

-- Level 1 - Unadjusted, fully accessible and current quoted prices in active markets for identical assets or liabilities. Examples of such instruments would be investments listed or quoted on any recognised stock exchange.

-- Level 2 - Quoted prices for similar assets or liabilities, or other directly or indirectly observable inputs which exist for the duration of the period of investment. Examples of such instruments would be forward exchange contracts and certain other derivative instruments.

-- Level 3 - External inputs are unobservable. Value is the Directors' best estimate, based on advice from relevant knowledgeable experts, use of recognised valuation techniques and on assumptions as to what inputs other market participants would apply in pricing the same or similar instrument. All loans are considered Level 3.

12. POST BALANCE SHEET EVENTS

-- The loan facility with Shawbrook Bank was extended for a further year to May 2022 on 5 June 2021.

-- On 30 June 2021, a new facility of GBP4.5m was entered into with Calmont Homes (Oak Meadows) Ltd with an initial drawdown of GBP300,000.

   13. INTERIM REPORT   STATEMENT 

These are not full statutory accounts in terms of Section 434 of the Companies Act 2006 and are unaudited. Statutory accounts for the year ended 30 November 2020, which received an unqualified audit report and which did not contain a statement under Section 498 of the Companies Act 2006, have been lodged with the Registrar of Companies. No full statutory accounts in respect of any period after 30 November 2020 have been reported on by the Company's auditor or delivered to the Registrar of Companies.

For further information please contact:

Faith Pengelly

For and on behalf of Maitland Administration Services Limited, Secretary

29 July 2021

ENDS

Interim Report 2021

The Interim Report will be posted to shareholders and will shortly be available on the Company's website ( www.tocpropertybackedlendingtrust.co.uk ) or in hard copy format from the Company's Registered Office.

A copy of the Interim Report will be submitted to the FCA's National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

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.

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END

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