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| 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 | 00:00:00 |
From Jan 2020 to Jan 2025
TIDMBC84
RNS Number : 1926R
Trafford Centre Finance Ld
19 September 2017
THE TRAFFORD CENTRE FINANCE LIMITED
LEI: 213800J9WWQVUK5FE223
Regulated Information Classification: information disclosed under article 5 of the Transparency Directive
19 September 2017
HALF YEARLY FINANCIAL REPORT
In compliance with Disclosure and Transparency Rule 4.2, the Trafford Centre Finance Limited (the "Company") announces the publication of its Half-Yearly Financial Report for the period ended 30 June 2017. Pursuant to Listing Rule 9.6.1, 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 Half-Yearly Report will also shortly be available for download at intugroup.co.uk
OPERATING AND FINANCIAL REVIEW
FOR THE SIX MONTHSED 30 JUNE 2017
The Trafford Centre Finance Limited ("the company") is incorporated and registered in the Cayman Islands. The company's registered office is 89 Nexus Way, Camana Bay, Grand Cayman, Cayman Islands KY1-9007.
The principal activity of the company is the provision of financing to The Trafford Centre Limited which owns the intu Trafford Centre shopping centre. This is funded by the issue of loan notes. 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 results and financial position for the period ended 30 June 2017 are set out in full in the income statement, balance sheet, statement of changes in equity, statement of cash flows and the notes to the condensed interim financial statements.
The company's profit before taxation for the six months to 30 June 2017 was GBP31,000 (year ended 31 December 2016 profit of GBP20,000, six months ended 30 June 2016 loss of GBP1,000) with net assets increasing to GBP886,000 (as at 31 December 2016 GBP855,000, as at 30 June 2016 GBP834,000).
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.
The directors of the company who were in office during the period and up to the date of signing the condensed interim financial statements were:
Raulin Amy
David Fischel
Matthew Roberts
OPERATING AND FINANCIAL REVIEW
FOR THE SIX MONTHSED 30 JUNE 2017
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:
Hot Features
Premium
Risk & Impact Mitigation Change 2017 commentary
--------------- -------------------------------------------------------------- ------- ------------------------------------------------------------
Property
------------------------------------------------------------------------------------------------------------------------------------------------------
Macro-economic Likelihood of macro-economic
Weakness in * Prime asset = weakness continues
the to be a risk with
macro-economic political uncertainty
environment * Covenant headroom monitored and stress-tested in the UK and Brexit
could arrangements not yet
undermine detailed
rental income * Make representation on key policies, for example * Property value remains stable in the period
levels and business rates
property
values, * Substantial covenant headroom
reducing * Leveraging the strength of the intu brand to attract
return and retain aspirational retailers
on investment
and covenant
headroom
--------------- -------------------------------------------------------------- ------- ------------------------------------------------------------
Retail = Likelihood and severity
environment * Active management of tenant mix of potential impact
Failure to are unchanged in 2017
react to with intu's strategy
changes * Regular monitoring of tenant strength and diversity continuing to deliver
in the retail strong footfall numbers
environment and occupancy
could * 'Tell intu' customer feedback programme helps * Continuing digital investment to improve relevance as
undermine identify changes in customer preferences shopping habits change
intu Trafford
Centre's
ability * Work closely with retailers * Footfall continues to be ahead of benchmark
to attract
customers
and tenants * Digital strategy that embraces technology and digital
customer engagement. This enables intu to engage in
and support multichannel retailing, and to take the
opportunities offered by ecommerce
--------------- -------------------------------------------------------------- ------- ------------------------------------------------------------
OPERATING AND FINANCIAL REVIEW
FOR THE SIX MONTHSED 30 JUNE 2017
KEY RISKS AND UNCERTAINTIES (CONTINUED)
Risk & Impact Mitigation Change 2017 commentary
--------------- ------------------------------------------------------------ ------- ----------------------------------------------------------------
Operations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Health and Likelihood of potential
safety * Strong business process and procedures, including = impact has not changed
Accidents compliance with OHSAS 18001, supported by regular significantly during
or system training and exercises the first half of
failure 2017, however severity
leading impacted by new enforcement
to financial * Annual audits of operational standards carried out structure
and/or internally and by external consultants * Maintenance of OHSAS 18001 certification,
reputational demonstrating consistent health and safety management
loss process and procedures across the portfolio
* Culture of visitor, staff and contractor safety
* Work continuing towards achieving additional
* Crisis management and business continuity plans in accreditations with focus on ISO 14001
place and tested
* Award of the golden status from the Royal Society for
* Retailer liaison and briefings the Prevention of Accidents
* 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 all
centres
--------------- ------------------------------------------------------------ ------- ----------------------------------------------------------------
Cyber-security = Likelihood has increased
Loss of * Data and cyber security strategies with increased reliance
data and on operational and
information third party systems
or failure * Regular testing programme and cyber scenario exercise and data, and with
of key systems and benchmarking the number of recent
resulting high profile hacks.
in financial Severity of potential
and/or * Appropriate levels of insurance impact has reduced
reputational by significant development
loss of tools and controls.
* Crisis management and business continuity plans in We have experienced
place and tested attempted cybersecurity
hacks which have not
resulted in any data
* Data committee and data protection officer in place loss or major operational
impacts. We continue
to prioritise on the
* Monitoring of regulatory environment and best cybersecurity programme
practice of works
* Ongoing intu-wide cybersecurity project with
investment in tools, consultancy and staff to
* Cybersecurity assessment performed by external mitigate impact of threats from evolving
consultancy and full action plan in place (programme cybersecurity landscape
of works)
* Managing of supply chain and service providers who
hold intu data
--------------- ------------------------------------------------------------ ------- ----------------------------------------------------------------
OPERATING AND FINANCIAL REVIEW
FOR THE SIX MONTHSED 30 JUNE 2017
KEY RISKS AND UNCERTAINTIES (CONTINUED)
Terrorism = Overall likelihood
Terrorist * Strong business process and procedures, supported by and severity of potential
incident regular training and exercises, designed to adapt and impact unchanged.
at intu respond to changes in risk levels In May 2017 we enacted
Trafford our operational plan
Centre or for the period of
another * Extraordinary pre-planned operational responses to increased threat level.
major changes in national threat level The threat level was
shopping subsequently reduced
centre to the prior threat
resulting * Annual audits of operational standards and physical level
in loss protection measures carried out internally and by * National threat level remains at Severe
of external agencies
consumer
confidence * Major scenario exercise completed at intu Trafford
with * Culture of visitor, staff and contractor safety Centre with involvement of multiple external agencies
consequent
impact on
lettings * Crisis management and business continuity plans in * Operating procedures in place for the introduction of
and rental place and tested with involvement of multiple further security measures if required
growth external agencies
* Retailer liaison and briefings
* Appropriate levels of insurance
* Strong relationships and frequent liaison with police,
NaCTSO and other agencies
* NaCTSO approved to train staff in counter-terrorism
awareness programme
* Internal head of security appointed
----------- ------------------------------------------------------------- ------------------------------------------------------------
DIRECTORS' RESPONSIBILITY STATEMENT
FOR THE SIX MONTHSED 30 JUNE 2017
The directors are responsible for preparing the interim report and condensed set of interim financial statements (interim financial statements), in accordance with applicable law and regulations. The directors confirm that, to the best of their knowledge:
-- the interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting, as adopted by the European Union; and
-- the interim report includes a fair review of both the information required by Sections DTR 4.2.7R, and that which is subject of DTR 4.2.8R of the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.
The Operating and Financial Review refers to important events which have taken place in the period.
The principal risks and uncertainties facing the business are referred to in the Operating and Financial Review.
Related party transactions are set out in note 11 of the interim financial statements.
A list of current directors is provided in the Operating and Financial Review.
On behalf of the Board
David Fischel
Director
18 September 2017
INDEPENT REVIEW REPORT TO THE DIRECTORS OF
THE TRAFFORD CENTRE FINANCE LIMITED
Report on the condensed interim financial statements
Our conclusion
We have reviewed The Trafford Centre Finance Limited's condensed interim financial statements (the "interim financial statements") in the interim report of the Trafford Centre Finance Limited for the 6 month period ended 30 June 2017. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.
This conclusion is to be read in the context of what we say in the remainder of this report.
What we have reviewed
The interim financial statements comprise:
-- the balance sheet as at 30 June 2017;
-- the income statement for the period then ended;
-- the statement of cash flows for the period then ended;
-- the statement of changes in equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the interim report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Company is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
Responsibilities for the condensed interim financial statements and the review
Our responsibilities and those of the directors
The interim report, including the interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority
Our responsibility is to express a conclusion on the interim financial statements based on our review. This report, including the conclusion, has been prepared for and only for the directors of the Company as a body, for management purposes, for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. Our report may not be made available to any other party without our prior written consent. We do not, in giving this conclusion, 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 save where expressly agreed by our prior consent in writing.
INDEPENT REVIEW REPORT TO THE DIRECTORS OF
THE TRAFFORD CENTRE FINANCE LIMITED
What a review of condensed financial statements involves
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
18 September 2017
INCOME STATEMENT (unaudited)
FOR THE SIX MONTHSED 30 JUNE 2017
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
Notes GBP000 GBP000 GBP000
Administration expenses (10) (24) (29)
----------- ----------- ------------
Operating loss (10) (24) (29)
Finance income 4 24,427 24,656 48,743
Finance costs 4 (24,386) (24,633) (48,694)
Change in fair value 4 - - -
of financial instruments
----------- ----------- ------------
Net finance income 41 23 49
----------- ----------- ------------
Profit/(loss) before
tax 31 (1) 20
Taxation - - -
----------- ----------- ------------
Profit/(loss) for the
period 31 (1) 20
=========== =========== ============
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 (unaudited)
AS AT 30 JUNE 2017
As at As at As at
30 June 31 December 30 June
2017 2016 2016
Notes GBP000 GBP000 GBP000
Non-current assets
Trade and other receivables 5 745,559 755,936 762,990
Derivative financial
instruments 8 99,830 108,396 128,871
---------- ------------ ----------
845,389 864,332 891,861
Current assets
Trade and other receivables 5 27,926 23,833 23,134
Derivative financial
instruments 8 1,653 1,594 1,510
Cash and cash equivalents 426 386 346
---------- ------------ ----------
30,005 25,813 24,990
Total assets 875,394 890,145 916,851
---------- ------------ ----------
Current liabilities
Borrowings 7 (17,417) (14,007) (13,682)
Trade and other payables 6 (10,049) (9,357) (8,964)
Derivative financial
instruments 8 (1,653) (1,594) (1,510)
---------- ------------ ----------
(29,119) (24,958) (24,156)
Non-current liabilities
Borrowings 7 (745,559) (755,936) (762,990)
Derivative financial
instruments 8 (99,830) (108,396) (128,871)
---------- ------------ ----------
(845,389) (864,332) (891,861)
Total liabilities (874,508) (889,290) (916,017)
---------- ------------ ----------
Net assets 886 855 834
========== ============ ==========
Equity
Share capital 9 - - -
Retained earnings 886 855 834
---------- ------------ ----------
Total equity 886 855 834
========== ============ ==========
STATEMENT OF CHANGES IN EQUITY (unaudited)
FOR THE SIX MONTHSED 30 JUNE 2017
Share Retained Total
capital earnings equity
GBP000 GBP000 GBP000
At 1 January 2016 - 835 835
---------- --------- -------
Loss for the period - (1) (1)
---------- --------- -------
Total comprehensive income
for the period - (1) (1)
---------- --------- -------
At 30 June 2016 - 834 834
========== ========= =======
At 1 July 2016 - 834 834
---------- --------- -------
Profit for the period - 21 21
---------- --------- -------
Total comprehensive income
for the period - 21 21
---------- --------- -------
At 31 December 2016 - 855 855
========== ========= =======
At 1 January 2017 - 855 855
---------- --------- -------
Profit for the period - 31 31
---------- --------- -------
Total comprehensive income
for the period - 31 31
---------- --------- -------
At 30 June 2017 - 886 886
========== ========= =======
STATEMENT OF CASH FLOWS (unaudited)
FOR THE SIX MONTHSED 30 JUNE 2017
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
Notes GBP000 GBP000 GBP000
Cash generated from operations 11 255 1 1,722
Interest received 23,103 24,375 46,383
Interest paid (23,318) (24,336) (48,025)
----------- ----------- ------------
Cash flows from operating
activities 40 40 80
----------- ----------- ------------
Amounts owed by group
undertaking - received 7,415 6,953 14,129
----------- ----------- ------------
Cash flows from investing
activities 7,415 6,953 14,129
Borrowings repaid (7,415) (6,953) (14,129)
Cash flows from financing
activities (7,415) (6,953) (14,129)
----------- ----------- ------------
Net increase in cash and
cash
equivalents 40 40 80
Cash and cash equivalents
at beginning of
period 386 306 306
----------- ----------- ------------
Cash and cash equivalents
at end of period 426 346 386
=========== =========== ============
NOTES (unaudited)
FOR THE SIX MONTHSED 30 JUNE 2017
1. Basis of preparation
The condensed set of interim financial statements ("interim financial statements") for the six months ended 30 June 2017 are unaudited. The interim financial statements have been prepared in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the Financial Conduct Authority and with IAS 34 as adopted by the European Union.
The comparative information presented for the year ended 31 December 2016 is not the company's financial statements for that year. Those financial statements have been reported on by the company's auditors. The auditors' opinion on those financial statements was unqualified and did not contain an emphasis of matter paragraph.
The interim financial statements should be read in conjunction with the company's financial statements for the year ended 31 December 2016 which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.
Use of estimates and assumptions
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing the interim financial statements, the areas of significant judgement made by management in applying the company accounting policies and the key sources of estimation uncertainty were the same as those applied to the financial statements as at and for the year ended 31 December 2016. In particular, significant judgement is required in the use of estimates and assumptions in the valuation and accounting for derivative financial instruments.
Going concern
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 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 which are held in The Trafford Centre Finance Limited. The ability of the company to meet the 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 of preparation 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 it is appropriate to continue to adopt the going concern basis of accounting in preparing the entity's interim financial statements.
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2017
2. Accounting policies
The accounting policies applied are consistent with those of the company's financial statements for the year ended 31 December 2016 as set out on pages 12 to 14 of that Report and Financial Statements as amended when relevant to reflect the adoption of new standards, amendments and interpretations which became effective in the period. These amendments have not had an impact on the financial statements. These have been applied in preparing these interim financial statements to the extent they are relevant to the preparation of interim financial information but have not resulted in any material changes to the information presented.
Taxes on income in interim periods are accrued using tax rates expected to be applicable to total annual earnings.
3. Operating segments
Management have not identified separate operating segments and rely on information presented in the primary statements for decision making purposes.
4. Net finance costs
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
Finance income
On amounts due from group
undertaking 24,427 24,656 48,743
Other interest - - -
---------- ---------- ------------
24,427 24,656 48,743
========== ========== ============
Finance costs
On borrowings (24,385) (24,616) (48,664)
Other interest (1) (17) (30)
---------- ---------- ------------
(24,386) (24,633) (48,694)
========== ========== ============
Change in fair value of
financial instruments
On external derivative financial
instruments 8,567 (40,814) (20,338)
On derivative financial
instruments with
The Trafford Centre Limited (8,567) 40,814 20,338
---------- ---------- ------------
- - -
========== ========== ============
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2017
5. Trade and other receivables
As at As at As at
30 June 31 December 30 June
2017 2016 2016
GBP000 GBP000 GBP000
Current
Amounts owed by group
undertaking 18,342 14,927 14,591
Less: finance costs (925) (920) (909)
------- ----------- -------
Net loan amount 17,417 14,007 13,682
Accrued income and other
amounts due
from group undertaking 10,462 9,381 9,013
Prepayments 44 445 439
Other receivables 3 - -
------- ----------- -------
27,926 23,833 23,134
======= =========== =======
As at As at As at
30 June 31 December 30 June
2017 2016 2016
GBP000 GBP000 GBP000
Non-current
Amounts owed by group
undertaking 756,855 767,684 775,197
Less: finance costs (11,296) (11,748) (12,207)
--------- ----------- ---------
Net loan amount 745,559 755,936 762,990
========= =========== =========
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.
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2017
6. Trade and other payables
As at As at As at
30 June 31 December 30 June
2017 2016 2016
GBP000 GBP000 GBP000
Amounts owed to group
undertaking 1,802 797 318
Accruals 8,247 8,560 8,646
------- ----------- -------
10,049 9,357 8,964
======= =========== =======
Amounts owed to group undertakings are unsecured and repayable on demand. No interest is charged on these amounts.
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2017
7. Borrowings
Interest Final As at Year ended As at
rate maturity 30 June 31 December 30 June
2017 2016 2016
GBP000 GBP000 GBP000
Current
Secured notes:
Class
D2 8.28% 2022 2,780 - -
B 7.03% 2029 4,302 4,016 4,018
A2 6.5% 2033 11,260 10,911 10,573
--------- ------------ ---------
Debt falling
due
within one
year 18,342 14,927 14,591
Less: finance
costs (925) (920) (909)
--------- ------------ ---------
Net loan
amount 17,417 14,007 13,682
========= ============ =========
Non-current
Secured notes:
Class
A2 6.5% 2033 292,438 298,158 303,698
A3 Floating 2035 188,500 188,500 188,500
A4 2.875% 2019 20,000 20,000 20,000
B 7.03% 2029 69,643 71,972 73,945
B2 Floating 2035 20,000 20,000 20,000
B3 4.250% 2024 20,000 20,000 20,000
D1(N) Floating 2035 29,054 29,054 29,054
D2 8.28% 2022 47,220 50,000 50,000
D3 4.750% 2024 70,000 70,000 70,000
Debt falling
due
after one
year 756,855 767,684 775,197
Less: finance
Costs (11,296) (11,748) (12,207)
--------- ------------ ---------
Net loan
amount 745,559 755,936 762,990
========= ============ =========
Total
borrowings 762,976 769,943 776,672
========= ============ =========
The fair value of borrowings as at 30 June 2017 was GBP898,890,000 (31 December 2016 GBP901,951,000, 30 June 2016 GBP923,353,000).
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2017
7. Borrowings (continued)
The maturity profile of gross debt is as follows:
As at As at As at
30 June 31 December 30 June
2017 2016 2016
GBP000 GBP000 GBP000
Repayable within one year 18,342 14,927 14,591
Repayable in more than
one year
but not more than two
years 45,497 23,179 18,342
Repayable in more than
two years
but not more than five
years 89,362 106,235 45,497
Repayable in more than
five years 621,996 638,270 711,357
-------- ----------- --------
775,197 782,611 789,787
======== =========== ========
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 GBP233,716,000 (31 December 2016 GBP230,045,000, 30 June 2016 GBP226,541,000) with rates of 4.2%, 4.34% and 4.66% and an interest rate cap of GBP3,838,000 (31 December 2016 GBP7,509,000, 30 June 2016 GBP11,013,000) with a capped rate of 6.66% plus an applicable margin on each bond. The fair value of these interest rate swaps at 30 June 2017 was a liability of GBP101,500,000 (31 December 2016 GBP109,990,000, 30 June 2016 GBP131,332,000).
8. Derivative financial instruments
All derivative financial instrument liabilities relate to interest rate swaps with a 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.
9. Share capital
As at
30
June 2017
GBP
Issued, called up and fully paid
At 31 December 2016 and 30 June 2017 - 2
ordinary shares of GBP1 each 2
=========
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2017
10. Financial instruments
The table below presents the company's financial assets and liabilities recognised at fair value at 30 June 2017, 31 December 2016 and 30 June 2016.
As at 30 June 2017
Level Level Level Total
1 2 3
GBP000 GBP000 GBP000 GBP000
Assets
Derivative financial
instruments:
- Fair value through
profit or loss - 101,483 - 101,483
-------- ---------- ------ ----------
Total assets - 101,483 - 101,483
-------- ---------- ------ ----------
Liabilities
Derivative financial
instruments:
- Fair value through
profit or loss - (101,483) - (101,483)
-------- ---------- ------ ----------
Total liabilities - (101,483) - (101,483)
======== ========== ====== ==========
As at 31 December 2016
Level Level Level Total
1 2 3
GBP000 GBP000 GBP000 GBP000
Assets
Derivative financial
instruments:
- Fair value through
profit or loss - 109,990 - 109,990
-------- ---------- ------ ----------
Total assets - 109,990 - 109,990
-------- ---------- ------ ----------
Liabilities
Derivative financial
instruments:
- Fair value through
profit or loss - (109,990) - (109,990)
-------- ---------- ------ ----------
Total liabilities - (109,990) - (109,990)
======== ========== ====== ==========
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2017
10. Financial instruments (continued)
As at 30 June 2016
Level Level Level Total
1 2 3
GBP000 GBP000 GBP000 GBP000
Assets
Derivative financial
instruments:
- Fair value through
profit or loss - 130,381 - 130,381
-------- ---------- ------ ----------
Total assets - 130,381 - 130,381
-------- ---------- ------ ----------
Liabilities
Derivative financial
instruments:
- Fair value through
profit or loss - (130,381) - (130,381)
-------- ---------- ------ ----------
Total liabilities - (130,381) - (130,381)
======== ========== ====== ==========
Fair value hierarchy
Level 1: Valuation based on quoted market prices traded in active markets.
Level 2: Valuation techniques are used, maximising the use of observable market data, either directly from market prices or derived from market prices.
Level 3: 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.
There were no transfers between Levels 1, 2 and 3 during the period.
Derivative financial instruments 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.
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2017
10. Financial instruments (continued)
Classification of financial assets and liabilities
The table below sets out the company's accounting classification of each class of financial assets and liabilities, and their fair values at 30 June 2017, 31 December 2016 and 30 June 2016. The fair values of quoted borrowings are based on the asking price. The determination of the fair values of derivative financial instruments is discussed above.
Gain/(loss)
Carrying Fair to income
value value statement
As at 30 June 2017 GBP000 GBP000 GBP000
Derivative financial instrument
assets 101,483 101,483 (8,567)
---------- ---------- ------------
Total held for trading assets 101,483 101,483 (8,567)
---------- ---------- ------------
Trade and other receivables 773,438 773,438 -
Cash and cash equivalents 426 426 -
---------- ---------- ------------
Total cash and receivables 773,864 773,864 -
---------- ---------- ------------
Derivative financial instrument
liabilities (101,483) (101,483) 8,567
---------- ---------- ------------
Total held for trading liabilities (101,483) (101,483) 8,567
---------- ---------- ------------
Trade and other payables (1,802) (1,802) -
Borrowings (762,976) (898,890) -
---------- ---------- ------------
Total loans and payables (764,778) (900,692) -
========== ========== ============
Gain/(loss)
Carrying Fair to income
value value statement
As at 31 December 2016 GBP000 GBP000 GBP000
Derivative financial instrument
assets 109,990 109,990 20,338
---------- ---------- ------------
Total held for trading assets 109,990 109,990 20,338
---------- ---------- ------------
Trade and other receivables 779,324 911,332 -
Cash and cash equivalents 386 386 -
---------- ---------- ------------
Total cash and receivables 779,710 911,718 -
---------- ---------- ------------
Derivative financial instrument
liabilities (109,990) (109,990) (20,338)
---------- ---------- ------------
Total held for trading liabilities (109,990) (109,990) (20,338)
---------- ---------- ------------
Trade and other payables (797) (797) -
Borrowings (769,943) (901,951) -
---------- ---------- ------------
Total loans and payables (770,740) (902,748) -
========== ========== ============
NOTES (unaudited) (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2017
10. Financial instruments (continued)
Gain/(loss)
Carrying Fair to income
value value statement
As at 30 June 2016 GBP000 GBP000 GBP000
Derivative financial instrument
assets 130,381 130,381 40,814
---------- ---------- ------------
Total held for trading assets 130,381 130,381 40,814
---------- ---------- ------------
Trade and other receivables 785,685 785,685 -
Cash and cash equivalents 346 346 -
---------- ---------- ------------
Total cash and receivables 786,031 786,031 -
---------- ---------- ------------
Derivative financial instrument
liabilities (130,381) (130,381) (40,814)
---------- ---------- ------------
Total held for trading liabilities (130,381) (130,381) (40,814)
---------- ---------- ------------
Trade and other payables (318) (318) -
Borrowings (776,672) (923,353) -
---------- ---------- ------------
Total loans and payables (776,990) (923,671) -
========== ========== ============
11. Cash generated from operations
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
Profit/(loss) before tax 31 (1) 20
Remove:
Finance income (24,427) (24,656) (48,743)
Finance costs 24,386 24,633 48,694
Changes in working capital:
Change in trade and other
receivables 194 (253) 1,004
Change in trade and other
payables 71 278 747
---------- ---------- -----------
255 1 1,722
========== ========== ===========
12. Related party transactions
There have been no related party transactions during the period that require disclosure under Section DTR 4.2.8 R of the Disclosure Guidance and Transparency Rules sourcebook or under IAS 34 Interim Financial Reporting except those disclosed elsewhere in this condensed set of interim financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BXGDCCXBBGRC
(END) Dow Jones Newswires
September 19, 2017 10:00 ET (14:00 GMT)
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