![](/cdn/assets/images/search/clock.png)
We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Name | Symbol | Market | Type |
---|---|---|---|
Trafford 'a2' | LSE:BC84 | London | Bond |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 136.65 | 0 | 01:00:00 |
TIDMBC84
RNS Number : 6293X
Trafford Centre Finance Ld
30 April 2019
LEI: 213800J9WWQVUK5FE223
THE TRAFFORD CENTRE FINANCE LIMITED
Regulated Information Classification: Annual Financial and audit reports
ANNUAL FINANCIAL REPORT
In compliance with the Disclosure and Transparency Rules, The Trafford Centre Finance Limited (the "Company") announces the publication of its Annual Financial Report for the year ended 31 December 2018. A copy of this document has been submitted to the National Storage Mechanism and will shortly be available for inspection at morningstar.co.uk/uk/NSM
The Annual Report will also shortly be available for download at intugroup.co.uk
In accordance with the Disclosure and Transparency Rules, the following information is extracted from the Company's Annual Report and in unedited full text.
DIRECTORS' REPORT FOR THE YEARED 31 DECEMBER 2018 The directors present their report and the audited financial statements of the company for the year ended 31 December 2018. The company is incorporated and registered in the Cayman Islands (company number 91678). The company's registered office is 190 Elgin Avenue, George Town, Grand Cayman, Cayman Islands KY1-9005. PRINCIPAL ACTIVITY The principal activity of the company is the provision of financing to The Trafford Centre Limited, which owns intu Trafford Centre. This is funded by the issue of loan notes. The company's results and financial position for the year ended 31 December 2018 are set out in full in the income statement, the balance sheet, the statement of changes in equity, the statement of cash flows and the notes to the financial statements. The company receives interest on the provision of financing to The Trafford Centre Limited at rates equal to those paid on its external debt plus additional interest of 0.01% per annum on the average principal loan amount outstanding. Any financing related fees incurred by the company are also charged on to The Trafford Centre Limited. The company's financial risk management objectives and policies are set out in note 10 as is the company's exposure to price and liquidity risk. The company recorded a profit before taxation of GBP12,000 compared with a profit of GBP50,000 for the previous year. Net assets at 31 December 2018 were GBP1,030,000, an increase of GBP12,000 from the 31 December 2017 figure of GBP1,018,000. Given the straightforward nature of the business, the company's directors are of the opinion that analysis using KPIs is not necessary for an understanding of the development, performance or position of the business. The directors expect that the present level of activity will continue for the foreseeable future. CAPITAL MANAGEMENT The directors consider the capital of the company to be the ordinary share capital of GBP2 (2017 GBP2). Management of this capital is performed at a group level. GOING CONCERN The directors have assessed the risk that the company is not a going concern and concluded that the going concern assumption is appropriate and prepared the annual report and financial statements on that basis. Further information regarding the adoption of the going concern can be found in note 1 to the financial statements. DIRECTORS The directors who held office during the year and until the date of this report are given below: Raulin Amy David Fischel Matthew Roberts KEY RISKS AND UNCERTAINTIES As the company's principal activity is to provide financing to The Trafford Centre Limited, the company's key risks and uncertainties are those faced by The Trafford Centre Limited to the extent that they impact The Trafford Centre Limited's ability to meet its obligations to the company including those related to the terms of the company's borrowings which are secured on the assets of The Trafford Centre Limited. The key risks and uncertainties facing The Trafford Centre Limited and the company are set out below: Risk & Impact Mitigation Change 2018 commentary Property Macro-economic + Likelihood and impact of Weakness in * Prime asset macroeconomic weakness continues the to be a risk with continued macro-economic political uncertainty in environment * Covenant headroom monitored and stress-tested the UK and Brexit arrangements could undermine not yet detailed, which has rental income increased investor caution levels and * Make representation on key policies, for example resulting in a reduction property business rates in property values and lower values, reducing transaction volumes in the return on year investment * Marketing events to attract footfall and covenant * Valuation continues to support LTV headroom headroom * Use our respected brand to attract and retain aspirational retailers * Tenant administrations at relatively low levels * Review and update of Brexit risk review --------------------------------------------------------------- ------ ----------------------------------------------------------------- Retail + Due to continued macroeconomic environment * Active management of tenant mix uncertainty, the likelihood Failure to react and impact of changes to to changes in the retail environment resulting the retail * Regular monitoring of tenant strength and diversity in potential tenant failures environment continues to increase. intu could undermine monitored this closely in intu Trafford * 'Tell intu' customer feedback programme helps 2018 with intu's strategy Centre's ability identify changes in customer preferences continuing to deliver solid to attract footfall numbers and occupancy customers and tenants * Work closely with retailers * Increased level of administrations and retailer CVAs * Digital strategy that embraces technology and digital * Continuing digital investment to improve relevance as customer engagement. This enables intu to engage in shopping habits change and support multichannel retailing, and to take the opportunities offered by ecommerce * Occupancy remains strong at 98 per cent * Contingency plans for potential future vacant units * Footfall growth continues to beat the benchmark --------------------------------------------------------------- ------ ----------------------------------------------------------------- Risk & Impact Mitigation Change 2018 commentary Operations Health and = Likelihood of potential impact safety * Strong business process and procedures, including has not changed significantly Accidents or compliance with OHSAS 18001, supported by regular during 2018 system failure training and exercises * Retained OHSAS 18001, demonstrating consistent health leading to and safety management process and procedures financial and/or * Annual audits of operational standards carried out reputational internally and by external consultants * Gold award from RoSPA loss * Crisis management and business continuity plans in * Full review undertaken of each centre's fire strategy place and tested and building specifications post-Grenfell and Liverpool Echo Arena has provided appropriate assurance
* Culture of visitor, staff and contractor safety * Retailer liaison and briefings * Appropriate levels of insurance * Staff succession-planning and development in place to ensure continued delivery of world class service * Health and safety managers or coordinators in centre * Implementation of new risk mitigators such as acid attack response kits in centre ----------------------------------------------------------------- ------ ---------------------------------------------------------------- Cyber-security = Likelihood continues to rely Loss of data * Data and cyber security strategies on operational and third and information party systems and data. Severity or failure of of potential impact managed key systems * Regular testing programme and cyber scenario exercise through continued development resulting in and benchmarking of tools and controls. Hacking financial and/or attempts have not resulted reputational in data loss or major operational loss * Appropriate levels of insurance impacts * Ongoing intu-wide cyber security project with * Crisis management and business continuity plans in investment in tools, consultancy and staff to place and tested mitigate impact of threats from evolving cybersecurity andscape * Data committee and data protection officer in place * Implemented updated GDPR policies and procedures * Internal and external assessment of GDPR compliance * Monitoring of regulatory environment and best practice * Cybersecurity assessment performed by external consultancy and full action plan in place * Managing of supply chain and service providers who hold intu data ----------------------------------------------------------------- ------ ---------------------------------------------------------------- Risk & Mitigation Change 2018 commentary Impact Terrorism = Overall likelihood and severity Terrorist * Strong business processes and procedures, supported of potential impact unchanged. incident by regular training and exercises, designed to adapt The NaCTSO and the intelligence at intu and respond to changes in risk levels community continue to be as Trafford busy as ever in protecting Centre or the UK from terror attacks another * Trained security staff who are alert and vigilant and 2018 has seen a continuation major of terror attacks in mainland shopping Europe. The intu Group Head centre * Extraordinary pre-planned operational responses to of Security is a member of resulting changes in national threat level the Crowded Places Information in loss of Exchange. This group meets consumer quarterly and ensures that confidence * Annual audits of operational standards carried out intu is abreast of all the with internally and by external agencies current threats and work undertaken consequent by the Counter Terrorism Policing impact teams in the UK on * Culture of visitor and staff safety lettings * National threat level remains at Severe and rental growth * Crisis management and business continuity plans in place and tested with involvement of multiple * Major scenario exercise held at intu Trafford Centre external agencies with involvement of multiple external agencies * Retailer liaison and briefings * Operating procedures in place for the introduction of further security measures if required * Appropriate levels of insurance * Strong relationships and frequent liaison with police, NaCTSO, CPNI and other agencies * NaCTSO approved to train staff in counter-terrorism awareness programme ---------------------------------------------------------------- ------ ----------------------------------------------------------------- Change in level of risk + increased = remained the same STATEMENT OF DIRECTORS' RESPONSIBILTIES The directors are responsible for preparing the company financial statements in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union for to assist the directors to discharge their obligations under section 4 of the Disclosure and Transparency rules (the 'DTR') issued by the United Kingdom's Financial Conduct Authority and to enable the company to comply with its obligations under various agreements known as 'The Trafford Centre Securitisation Agreements'. The directors must not approve the financial statements unless they are satisfied that the financial statements give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing the financial statements, the directors are responsible for: * selecting suitable accounting policies and then applying them consistently; * stating whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements; * making judgements and accounting estimates that are reasonable and prudent; and * preparing the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company. The directors are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. STATEMENT OF DISCLOSURE TO AUDITORS So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company's auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company's auditor is aware of that information. INDEPENT AUDITORS As previously announced by intu properties plc group, it is proposed that Deloitte LLP will succeed PricewaterhouseCoopers LLP as the auditor of the group including subsidiaries for the financial year commencing 1 January 2019. On behalf of the Board David Fischel Director 24 April 2019 INDEPENT AUDITORS' REPORT TO THE MEMBERS OF THE TRAFFORD CENTRE FINANCE LIMITED Opinion In our opinion, The Trafford Centre Finance Limited's financial statements: * give a true and fair view of the state of the company's affairs as at 31 December 2018 and of its profit and cash flows for the year then ended; and
* have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. We have audited the financial statements, included within the Report and Financial Statements (the "Annual Report"), which comprise: the balance sheet as at 31 December 2018; the income statement and statement of comprehensive income, the statement of cash flows and the statement of changes in equity for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC's Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Our audit approach The scope of our audit As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all our audits we also addressed the risk of management override of controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company which were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. We focused on laws and regulations that could give rise to a material misstatement in the company's financial statements, including, but not limited to, the Disclosure and Transparency rules. Our tests included, but were not limited to, review of financial statement disclosures to underlying supporting documentation and enquires of management. There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all of our audits we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. Key audit matters Key audit matters are those matters that, in the auditors' professional judgement, were of most significance in the audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit. Key audit matter How our audit addressed the key audit matter Recoverability of amounts owed by The We have considered the key risks and Trafford Centre Limited uncertainties faced by The Trafford Centre The principal activity of the company is Limited. We the provision of financing to The Trafford have performed audit procedures over the Centre financial statements of The Trafford Centre Limited. Its borrowings are secured on the Limited assets of The Trafford Centre (being intu and concluded that these give a true and Trafford fair view of the company's affairs in our Centre shopping centre). Amounts owed by audit opinion The Trafford Centre Limited represent back dated 25 April 2019. As part of our audit to back procedures, we have considered whether the arrangements between the companies, with going the same terms as The Trafford Centre concern assumption and the company's net Limited's external assets are supportable. debt. The Trafford Centre Finance Limited is therefore wholly reliant on The Trafford Centre Limited's ability to meet its obligations to it, in order to be able to meet the terms of its own borrowing arrangements. The recoverability of amounts owed by The Trafford Centre Limited is therefore a key audit matter. ------------------------------------------- How we tailored the audit scope We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the company, the accounting processes and controls, and the industry in which it operates. Materiality The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: Overall materiality 8,385,790 (2017: 8,719,172). How we determined it 1% of total assets. ------------------------------------------------------ Rationale for benchmark applied The principal activity of the company is the provision of financing to The Trafford Centre Limited. External debt and the company's ability to meet it's obligations relating to this financing are therefore the primary focus for users of the financial statements. The company has entered into back to back financing arrangements with The Trafford Centre Limited, which owns intu Trafford Centre (the asset on which The Trafford Centre Finance Limited's debt is secured). As such total assets approximate to total liabilities and are considered to be an appropriate benchmark on which to calculate materiality.. ------------------------------------------------------ We agreed with the Audit Committee that we would report to them misstatements identified during our audit above 838,579 (2017: 871,917) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons. Conclusions relating to going concern ISAs (UK) require us to report to you when: * the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or * the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. We have nothing to report in respect of the above matters. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company's ability to continue as a going concern. For example, the terms on which the United Kingdom may withdraw from the European Union are not clear, and it is difficult to evaluate all of the potential implications on the company's trade, customers, suppliers and the wider economy. Reporting on other information The other information comprises all of the information in the Annual Report other than the financial statements and our auditors' report
thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities. Responsibilities for the financial statements and the audit Responsibilities of the directors for the financial statements As explained more fully in the Statement of Directors' Responsibilities set out on page 4, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. Auditor's responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report. Use of this report This report, including the opinion, has been prepared for and only for the company's directors as a body for to assist the directors to discharge their obligations under section 4 of the Disclosure and Transparency rules (the 'DTR') issued by the United Kingdom's Financial Conduct Authority and to enable the company to comply with its obligations under various agreements known as 'The Trafford Centre Securitisation Agreements' in accordance with our engagement letter dated 8 April 2019 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come, including without limitation under any contractual obligations of the company, save where expressly agreed by our prior consent in writing. Partner responsible for the audit The engagement partner on the audit resulting in this independent auditors' report is Mark Pugh. PricewaterhouseCoopers LLP Chartered Accountants London 25 April 2019 INCOME STATEMENT FOR THE YEARED 31 DECEMBER 2018 2018 2017 Notes GBP000 GBP000 Administrative expenses (33) (31) Operating loss 3 (33) (31) Finance costs 4 (46,001) (48,559) Finance income 46,046 48,640 Change in fair value of derivative financial instruments 4 - - Profit before taxation 12 50 Taxation 5 - - Profit for the year 12 50 Other than the items in the income statement above, there are no other items of comprehensive income and accordingly, a separate statement of comprehensive income has not been prepared. BALANCE SHEET AS AT 31 DECEMBER 2018 2018 2017 Notes GBP000 GBP000 Non-current assets Derivative financial instruments 6 94,412 103,256 Trade and other receivables 7 688,012 733,551 782,424 836,807 Current assets Trade and other receivables 7 54,129 33,032 Derivative financial instruments 6 1,481 1,611 Cash and cash equivalents 545 467 56,155 35,110 Total assets 838,579 871,917 Current liabilities Trade and other payables 8 (7,992) (10,238) Borrowings 9 (45,652) (22,243) Derivative financial instruments 6 (1,481) (1,611) (55,125) (34,092) Non-current liabilities Borrowings 9 (688,012) (733,551) Derivative financial instruments 6 (94,412) (103,256) (782,424) (836,807) Total liabilities (837,549) (870,899) Net assets 1,030 1,018 Equity Share capital 11 - - Other reserves 113 113 Retained earnings 917 905 Total equity 1,030 1,018 The notes on pages 14 to 26 form part of these financial statements The financial statements were approved by the Board of directors and authorised for issue on 24 April 2019 and were signed on its behalf by: David Fischel Director Matthew Roberts Director STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31 DECEMBER 2018 Share capital Other reserves Retained Total equity earnings Notes GBP000 GBP000 GBP000 GBP000 Balance at 1 January 2017 - - 855 855 Profit for the year - - 50 50 Total comprehensive income for the year - - 50 50 Capital injection from parent - 113 - 113 Balance at 31 December 2017 - 113 905 1,018 Balance at 1 January 2018 - 113 905 1,018 Profit for the year - - 12 12 Total comprehensive income for the year - - 12 12 Balance at 31 December 2018 - 113 917 1,030 STATEMENT OF CASH FLOWS FOR THE YEARED 31 DECEMBER 2018 2018 2017 Notes GBP000 GBP000 Cash flows from operating activities Cash generated from/(used in) operations 12 8 (1,715) Interest paid (45,361) (47,731) Interest received 45,431 49,414 Net cash inflow/(outflow) from operating activities 78 (32) Investing activities Amounts owed by group undertaking received 23,179 15,069 Net cash generated from
investing activities 23,179 15,069 Financing activities Borrowings repaid (23,179) (15,069) Capital injection from parent - 113 Net cash used in financing activities (23,179) (14,956) Net increase in cash and cash equivalents 78 81 Cash and cash equivalents at beginning of year 467 386 Cash and cash equivalents at end of year 545 467 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 31 DECEMBER 2018 1 Principal accounting policies Purpose of financial statements The financial statements have been prepared to assist the directors to discharge their obligations under section 4 of the Disclosure and Transparency rules (the 'DTR') issued by the United Kingdom's Financial Conduct Authority and to enable to company to comply with its obligations under various agreements relating to the issue, management, and amortisation of bond issues of various notes issued in February 2000, June 2005, January 2006 and March 2014 where collectively such agreements are known as "The Trafford Centre Securitisation Agreements". They have not been prepared for the purpose of compliance with the requirements of the Companies Act 2006 and are therefore not statutory financial statements. Basis of preparation The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union and interpretations issued by the International Financial Reporting Standards Interpretations Committee. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain financial assets and liabilities. A summary of the accounting policies is set out below. In assessing whether the going concern basis of preparation is appropriate to adopt, the directors considered a number of factors including financial projections of the company and the level of financial support that may be made available to the company by its ultimate parent, intu properties plc. In addition investment property held by The Trafford Centre Limited, a fellow subsidiary of intu properties plc, acts as security for the financial instruments held in The Trafford Centre Finance Limited. The ability of the company to meet its obligations of these financial instruments is dependent upon the performance of The Trafford Centre Limited and its ability to meet its obligations to the company. In concluding that the going concern basis is appropriate the directors have considered the net rental income forecasts of The Trafford Centre Limited. Based on this review the directors have concluded that there is a reasonable expectation that the company will have sufficient resources to continue in operational existence for the foreseeable future and therefore the prepare the financial statements on a going concern basis. This is the company's first set of annual financial statements where IFRS 9 Financial Instruments has been applied. This standard applies to classification and measurement of financial assets and financial liabilities, impairment provisioning and hedge accounting. The adoption of this standard has not had a material impact on the financial statements. Estimates and assumptions The preparation of financial statements in conformity with generally accepted accounting principles requires management to make judgements and use estimates that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Although these judgements and estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. Interest income and expense Interest income and expense is accrued on a time basis, by reference to the principal outstanding and the effective interest rate. Borrowings Borrowings are recognised initially at their net proceeds on issue and subsequently carried at amortised cost. Any transaction costs and premiums or discounts are recognised over the contractual life using the effective interest rate method. In the event of early repayment, all unamortised transaction costs are recognised immediately in the income statement. Cash and cash equivalents Cash and cash equivalents comprise cash in hand, deposits with banks, whether restricted or unrestricted and other short-term liquid investments with original maturities of three months or less. Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost. When applying a loss allowance, the Directors exercise judgement as to the collectibility of trade receivables and determine if it is appropriate to impair these assets. Factors such as days past due, credit status of the counterparty and historical evidence of collection are considered. As trade receivables are financial assets within the scope of IFRS 9 Financial Instruments, the company applies the expected credit loss model. Trade payables Trade payables are recognised initially at fair value and subsequently measured at amortised cost. Derivatives The company uses derivative financial instruments to manage exposure to interest rate risk. They are initially recognised on the trade date at fair value and subsequently re-measured at fair value. In assessing fair value the company uses its judgement to select suitable valuation techniques and make assumptions which are mainly based on market conditions existing at the balance sheet date. The fair value of interest rate swaps is calculated by discounting estimated future cash flows based on the terms and maturity of each contract and using market interest rates for similar instruments at the measurement date. These values are tested for reasonableness based upon broker or counterparty quotes. Amounts paid under derivative financial instruments (currently for the company this relates to interest rate swaps), both on obligations as they fall due and on early settlement are recognised in the income statement as finance costs. Fair value movements on revaluation of derivative financial instruments are shown in the income statement through changes in fair value of financial instruments. The company does not currently apply hedge accounting to its interest rate swaps. Taxation Current tax is the amount payable on the taxable income for the year and any adjustment in respect of prior years. It is calculated using rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax Deferred tax is provided using the balance sheet liability method in respect of temporary differences between the carrying amounts of assets and liabilities in the balance sheet and their tax bases. Temporary differences are not provided on the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they will not reverse in the foreseeable future. Deferred tax is determined using tax rates that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. Deferred tax assets are recognised only to the extent that management believe it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred tax assets and liabilities are offset only when they relate to taxes levied by the same authority and the group intends to settle them on a net basis. Tax is included in the income statement except when it related to items recognised directly in other comprehensive income or equity, in which case the related tax is also recognised directly in other comprehensive income or equity. Current/non-current classification Current assets include assets held primarily for trading purposes, cash and cash equivalents, and assets expected to be realised in, or intended for sale or consumption in, the course of the company's operating cycle. All other assets are classified as non-current assets. Current liabilities include liabilities held primarily for trading purposes, liabilities expected to be settled in the course of the company's operating cycle and those liabilities due within one year from the reporting date. All other liabilities are classified as non-current liabilities. Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax, from the proceeds. 2 Operating segments Management have not identified separate operating segments and rely on information presented in the primary statements for decision making purposes. 3 Operating loss The operating loss for the year ended 31 December 2018 of GBP33,000 (2017 operating loss of GBP31,000) includes fees in respect of auditors' remuneration of GBP5,163 (2017 GBP4,917) in respect
of the audit of the financial statements. Non-audit services of GBP4,634 for a half year review were provided during the year (2017 GBP4,456). The directors did not receive or waive any emoluments (2017 GBPnil) in respect of their services to the company. There were no employees during the year (2017 none). 4 Net finance income 2018 2017 GBP000 GBP000 Finance income On amounts due from group undertaking 46,046 48,640 Finance costs On borrowings (45,986) (48,557) Other interest (15) (2) (46,001) (48,559) Change in fair value of financial instruments On external derivative financial instruments 8,844 (5,139) On derivative financial instruments with The Trafford Centre Limited (8,844) 5,139 - - 5 Taxation The company is subject to UK corporation tax on its profits. The tax expense for the year is lower than (2017 lower than) the standard rate of corporation tax in the UK. The differences are explained below: 2018 2017 GBP000 GBP000 Profit before tax 12 50 Profit before tax multiplied by the standard rate of tax in the UK of 19% (2017 19.25%) 2 10 Utilisation of tax losses not previously recognised (1) - Group relief (without payment) (1) (10) Tax expense - - Deferred tax The company has tax losses arising in the UK of GBP2,557,000 (2017 GBP2,583,000) that are available for offset against future taxable profits. No deferred tax asset is recognised in respect of these losses due to uncertainty over the level of taxable profits against which these losses can be used in future periods. 6 Derivative financial instruments All derivative financial instrument liabilities relate to interest rate swaps with an external counterparty which are classified as held for trading. All derivative financial instrument assets relate to interest rate swap arrangements with The Trafford Centre Limited under the same terms as the interest rate swaps with the counterparty. 7 Trade and other receivables Current Non-current 2018 2017 2018 2017 GBP000 GBP000 GBP000 GBP000 Amounts owed by group undertaking 46,525 23,179 697,838 744,363 Less: finance costs (873) (936) (9,826) (10,812) Net loan amount 45,652 22,243 688,012 733,551 Accrued income and other amounts due from group undertaking 8,094 10,402 - - Prepayments 373 387 - - VAT recoverable 10 - - - 54,129 33,032 688,012 733,551 The amounts owed by group undertaking relate to an intercompany loan with The Trafford Centre Limited where the company's borrowings with external parties are passed to The Trafford Centre Limited. The amounts owed are unsecured and the repayment profile matches the maturity profile of the company's borrowings as The Trafford Centre Limited is required to provide funds to the company in order for it to meet its external funds obligations. The recoverability of these balances has been reviewed and as a result no allowance for doubtful debts is considered to be required. There have been no impairments on receivables or amounts written off in the year. Interest is due on the intercompany loans at rates equal to those paid on the external debt plus additional interest of 0.01% per annum on the average principal loan amount outstanding. Interest is also due to cover any fees and costs incurred by the company. 8 Trade and other payables 2018 2017 GBP000 GBP000 Amounts owed to group undertakings 6 1,690 Accruals 7,986 8,403 Other payables - 145 7,992 10,238 Amounts owed to group undertakings are unsecured and repayable on demand. No interest is charged on these amounts. 9 Borrowings Interest Final Carrying Fair Carrying Fair rate maturity value value value value 2018 2018 2017 2017 GBP000 GBP000 GBP000 GBP000 Current secured notes Class: A2 6.50% 2023 12,376 15,232 11,619 14,667 A4 2.88% 2019 20,000 20,075 - - B 7.03% 2029 4,764 5,435 4,450 5,213 D2 8.28% 2022 9,385 10,440 7,110 8,174 Debt falling due within one year 46,525 51,182 23,179 28,054 Less: finance costs (873) - (936) - Net loan amount 45,652 51,182 22,243 28,054 Non-current secured notes Class: A2 6.50% 2033 274,163 364,669 286,538 393,114 A3 Floating 2035 188,500 163,695 188,500 172,809 A4 2.88% 2019 - - 20,000 20,404 B 7.03% 2029 62,617 77,015 67,381 85,892 B2 Floating 2035 20,000 17,475 20,000 18,250 B3 4.25% 2024 20,000 21,343 20,000 21,698 D1(N) Floating 2035 29,054 20,690 29,054 21,075 D2 8.28% 2022 33,504 37,190 42,890 49,480 D3 4.75% 2024 70,000 75,523 70,000 76,910 Debt falling due after one year 697,838 777,600 744,363 859,632 Less: finance costs (9,826) - (10,812) - Net loan amount 688,012 777,600 733,551 859,632 Total borrowings 733,664 828,782 755,794 887,686 2018 2017 GBP000 GBP000 Repayable within one year 46,525 23,179 Repayable in more than one year but not more than two years 28,693 46,525 Repayable in more than two years but not more than five years 87,163 92,061 Repayable in more than five years 581,982 605,077 744,363 766,842 The secured notes have the benefit of a floating charge over all of the assets and undertakings of the company and in addition are secured against The Trafford Centre Securitisation Agreements together with the benefit of a fixed legal charge over the land and buildings comprising The Trafford Centre granted by The Trafford Centre Limited, a fellow subsidiary undertaking of Intu Trafford Centre Group (UK) Limited and owner of intu Trafford Centre. Interest on the Class A3, Class B2 and Class D1(N) secured notes whose rates are based on LIBOR plus an applicable margin has been hedged under interest rate swap contracts totalling GBP237,554,000 (2017 GBP237,554,000) with rates of 4.20%, 4.34% and 4.66%. The fair value of these interest rate swaps at 2018 was a liability of GBP95,893,000 (2017 GBP104,867,000). 10 Financial risk management The company is exposed to a variety of risks arising from the company's operations being principally market risk (including interest rate risk and market price risk) and liquidity risk. The majority of the company's financial risk management is carried out by intu properties plc's treasury department and the group's
policies for managing each of these risks as they apply to the company and the principal effects of these policies on the results for the year are summarised below. Further details of intu properties plc's financial risk management are disclosed in the group's publicly available financial statements. Market risk Interest rate risk Interest rate risk comprises of both cash flow and fair value risks. Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate due to changes in market interest rates. Fair value interest rate risk is the risk that the fair value of financial instruments will fluctuate as a result of changes in market interest rates. The company's interest rate risk arises from borrowings issued at variable rates that expose the company to cash flow interest rate risk, whereas borrowings issued at fixed interest rates expose the company to fair value interest rate risk. Bank debt is typically issued at floating rates linked to LIBOR. Bond debt and other capital market debt are generally issued at fixed rates. It is the intu properties plc group's policy, and often a requirement of the group's lenders, to eliminate substantially all short and medium-term exposure to interest rate fluctuations in order to establish certainty over medium-term cash flows by using floating to fixed interest rate swaps. Such swaps have the economic effect of converting borrowings from floating to fixed rates. As a consequence, the company is exposed to market price risk in respect of the fair value of its fixed rate interest rate swaps. The table below shows the effect of interest rate swaps on the borrowings profile of the company: Fixed Floating Fixed Floating 2018 2018 2017 2017 GBP000 GBP000 GBP000 GBP000 Borrowings 506,809 237,554 529,987 237,555 Interest rate swap impact 237,554 (237,554) 237,555 (237,555) Net borrowings profile 744,363 - 767,542 - Interest rate protection on floating debt 100% 100% The weighted average rate of interest rates contracted through interest rate swaps is 4.4 per cent (2017 4.4 per cent). The approximate impact of a 50 basis point increase in the level of interest rates would be to reduce the liability by GBP20,882,000 (2017 GBP22,628,000) in the fair value of derivatives. The approximate impact of a 50 basis point decrease in the level of interest rates would be to increase the liability by GBP20,882,000 (2017 GBP22,628,000) in the fair value of derivatives. In practice, a parallel shift in the yield curve is highly unlikely. However, the above sensitivity analysis is a reasonable illustration of the possible effect from the changes in slope and shifts in the yield curve hat may occur. Due to offsetting loans and derivative contracts with The Trafford Centre Limited the impact of interest rate movements on the company is minimal as the cash flows from the assets and liabilities will be symmetrical. Liquidity risk Liquidity risk is managed to ensure that the company is able to meet future payment obligations when financial liabilities fall due. Liquidity analysis is conducted to ensure that sufficient headroom is available to meet the operational requirements and committed investments. The group treasury policy aims to meet this objective through maintaining adequate cash, marketable securities and committed facilities to meet these requirements. The group's policy is to seek to optimise its exposure to liquidity risk by balancing its exposure to interest rate risk and to refinancing risk. In effect the group seeks to borrow for as long as possible at the lowest acceptable cost. The tables below set out the maturity analysis of the company's financial liabilities based on the undiscounted contractual obligations to make payments of interest and to repay principal. Where interest payment obligations are based on a floating rate the rates used are those implied by the par yield curve. Within 1 1-2 years 3-5 years Over 5 years Total year or on demand GBP000 GBP000 GBP000 GBP000 GBP000 At 31 December 2018 Borrowings (including interest) (81,534) (61,859) (175,134) (728,692) (1,047,219) Amounts owed to group undertakings (6) - - - (6) Derivative payments (10,486) (10,515) (31,575) (113,633) (166,209) Derivative receipts 2,231 2,645 9,439 39,661 53,976 (89,795) (69,729) (197,270) (802,664) (1,159,458) At 31 December 2017 Borrowings (including interest) (59,359) (81,191) (185,089) (780,054) (1,105,693) Amounts owed to group undertakings (1,690) - - - (1,690) Derivative payments (10,486) (10,486) (31,544) (124,178) (176,694) Derivative receipts 1,319 1,888 8,048 43,156 54,411 Other financial liabilities (145) - - - (145) (70,361) (89,789) (208,585) (861,076) (1,229,811) Classification of financial assets and liabilities The tables below set out the company's accounting classification of each class of financial assets and liabilities, and their fair values at 31 December 2018 and 31 December 2017. The fair values of quoted borrowings are based on the asking price. The fair values of derivative financial instruments are determined from observable market prices or estimated using appropriate yield curves at 31 December each year by discounting the future contractual cash flows to the net present values. Carrying Gain/(loss) to income value Fair value statement 2018 GBP000 GBP000 GBP000 Derivative financial instrument assets 95,893 95,893 (8,844) Total held for trading assets 95,893 95,893 (8,844) Trade and other receivables 741,758 836,876 - Cash and cash equivalents 545 545 - Total cash and receivables 742,303 837,421 - Derivative financial instrument liabilities (95,893) (95,893) 8,844 Total held for trading liabilities (95,893) (95,893) 8,844 Trade and other payables (6) (6) - Borrowings (733,664) (828,782) - Total loans and payables (733,670) (828,788) - Carrying Gain/(loss) to income value Fair value statement 2017 GBP000 GBP000 GBP000 Derivative financial instrument assets 104,867 104,867 5,139 Total held for trading assets 104,867 104,867 5,139 Trade and other receivables 766,196 898,088 - Cash and cash equivalents 467 467 - Total cash and receivables 766,663 898,555 - Derivative financial instrument liabilities (104,867) (104,867) (5,139) Total held for trading liabilities (104,867) (104,867) (5,139) Trade and other payables (1,835) (1,835) - Borrowings (755,794) (887,686) - Total loans and payables (757,629) (889,521) - The only financial assets and liabilities of the company recognised at fair value are derivative financial instruments. These are all held at fair value through profit or loss and are categorised
as level 2 in the fair value hierarchy as explained below. Fair value hierarchy * valuation based on quoted market prices traded in active markets. * valuation techniques are used, maximising the use of observable market data, either directly from market prices or derived from market prices. * where one or more inputs to valuation are not based on observable market data. Valuations at this level are more subjective and therefore more closely managed, including sensitivity analysis of inputs to valuation models. Such testing has not indicated that any material difference would arise due to a change in input variables. Transfers into and out of the fair value hierarchy levels are recognised on the date of the event or change in circumstance that caused the transfer. There were no transfers in or out for the above financial assets and liabilities during the year. Valuation techniques for level 2 hierarchy financial assets and liabilities are presented in the accounting policies. There were no gains or losses arising on financial assets or liabilities recognised direct to equity (2017 GBPnil). 11 Share capital 2018 2017 GBP GBP Issued, called up and fully paid 2 (2017 2) Ordinary shares of GBP1 each 2 2 12 Cash generated from/(used in) operations 2018 2017 GBP000 GBP000 Profit before tax 12 50 Adjustments for: Finance costs 46,001 48,559 Finance income (46,046) (48,640) Movements in working capital: Decrease/(increase) in trade and other receivables 1,877 (2,656) (Decrease)/increase in trade and other payables (1,836) 972 Cash generated from/(used in) operations 8 (1,715) 13 Related party transactions During the year the company entered into the following transactions with other group companies: 2018 2017 Nature of transaction GBP000 GBP000 The Trafford Centre Limited* Interest receivable 46,046 48,640 The Trafford Centre Holdings Limited* Capital injection - 113 Significant balances outstanding between the company and other group companies are shown below: Amounts owed by 2018 2017 GBP000 GBP000 The Trafford Centre Limited 739,524 766,196 Amounts owed to 2018 2017 GBP000 GBP000 Liberty International Group Treasury Limited* - 1,690 Intu Trafford Centre Group (UK) Limited* 6 - *The company's registered office is 40 Broadway, London, SW1H 0BT. 14 Ultimate parent company The ultimate parent company is intu properties plc, a company incorporated and registered in England and Wales, copies of whose financial statements may be obtained from the Company Secretary, 40 Broadway, London, SW1H 0BT. The immediate parent company is The Trafford Centre Holdings Limited, a company incorporated and registered in England and Wales, copies of whose financial statements may be obtained as above. The registered office of The Trafford Centre Holdings Limited is 40 Broadway, London, England and Wales, United Kingdom, SW1H 0BT.
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
FR EASLEDDANEFF
(END) Dow Jones Newswires
April 30, 2019 11:38 ET (15:38 GMT)
1 Year Trafford 'a2' Chart |
1 Month Trafford 'a2' Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions