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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 | 01:00:00 |
TIDMBC84
RNS Number : 0169O
Trafford Centre Finance Ld
27 September 2019
THE TRAFFORD CENTRE FINANCE LIMITED
LEI: 213800J9WWQVUK5FE223
27 September 2019
HALF-YEARLY FINANCIAL REPORT
In compliance with Disclosure and Transparency Rules, The Trafford Centre Finance Limited (the "Company") announces the publication of its Half-Yearly Financial Report for the period ended 30 June 2019. 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 2019
The Trafford Centre Finance Limited ("the company") is incorporated and registered in the Cayman Islands. The company's registered office is 190 Elgin Avenue, George Town, Grand Cayman, Cayman Islands KY1-9005.
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 which are listed on the London Stock Exchange. 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 2019 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 loss before taxation for the six months to 30 June 2019 was GBP13,000 (year ended 31 December 2018 profit of GBP12,000, six months ended 30 June 2018 profit of GBP3,000) with net assets at 30 June 2019 decreasing to GBP1,017,000 (as at 31 December 2018 GBP1,030,000, as at 30 June 2018 GBP1,021,000).
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 resigned 26 April 2019 Barbara Gibbes appointed 26 April 2019, resigned 16 August 2019
Matthew Roberts
Sean Crosby appointed 16 August 2019 Minakshi Kidia appointed 16 August 2019
OPERATING AND FINANCIAL REVIEW
FOR THE SIX MONTHSED 30 JUNE 2019
PRINCIPAL RISKS AND UNCERTAINTIES
The Board has reviewed its assessment of the principal risks and uncertainties facing the company, including those that would impact the business model, future performance, solvency or liquidity.
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 risk profile for the six months ended 30 June 2019 has increased since the year ended 31 December 2018 and is detailed in the table below. No significant new risk headings or sub risk categories have been identified, although it is recognised that risks within the categories continue to evolve.
The company's principal risks and uncertainties are reviewed throughout the year in-line with the intu Group's risk management framework and the company will provide a full report in the 2019 Report and Financial Statements. During the period, where risks have evolved, additional risk mitigation strategies have been put in place. Specifically, the property market sub risks of macroeconomic and retail environment have seen an increased risk profile. See commentary on these changes in risk profile below.
Risk heading Sub risk 2019 commentary ------------- ------------------- ------------------------------------------------------- Property Macroeconomic Likelihood and impact of macroeconomic weakness market continues to be a risk with continued political uncertainty in the UK and Brexit arrangements not yet detailed, which has increased investor caution resulting in a reduction in property values and lower transaction volumes in the period. ------------- ------------------- ------------------------------------------------------- Property Retail environment With the recent higher level of administrations market and CVAs and the continued macroeconomic uncertainty, the likelihood and impact of changes to the retail environment resulting in further potential tenant failures continues to increase, putting downward pressure on property values. intu monitor key retail metrics closely, in line with intu's strategy of continuing to deliver solid footfall numbers and occupancy. ------------- ------------------- -------------------------------------------------------
The uncertainty arising from the UK's decision to exit the EU continues to have a negative impact on the macroeconomic environment. Specifically for intu, the risks faced are affected by any changes in sentiment in the investment and occupier markets in which we operate, in our ability to execute our recycling and investment plans and in broader consumer confidence and expenditure. We have continued to review our Brexit risks and both planning and consideration has been given to implementing additional controls to mitigate risks where we can reduce either the likelihood or impact of the risk affecting the delivery of the company's objectives.
DIRECTORS' RESPONSIBILITY STATEMENT
FOR THE SIX MONTHSED 30 JUNE 2019
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 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 12 of the interim financial statements.
A list of current directors is provided in the Operating and Financial Review.
On behalf of the Board
Minakshi Kidia
Director
27 September 2019
INDEPENT REVIEW REPORT TO
THE TRAFFORD CENTRE FINANCE LIMITED
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2019 which comprises the income statement, the balance sheet, the statement of changes in equity, the cash flow statement and related notes 1 to 13. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company 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 Financial Reporting Council. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the company are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
INDEPENT REVIEW REPORT TO
THE TRAFFORD CENTRE FINANCE LIMITED
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2019 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Deloitte LLP
London, United Kingdom
27 September 2019
INCOME STATEMENT (unaudited)
FOR THE SIX MONTHSED 30 JUNE 2019
Six months Six months ended ended Year ended 30 June 30 June 31 December 2019 2018 2018 (unaudited) (unaudited) (audited) Notes GBP000 GBP000 GBP000 Administration expenses (31) (14) (33) ------------ ------------ ------------ Operating loss (31) (14) (33) Finance income 4 21,760 23,054 46,046 Finance costs 4 (21,742) (23,037) (46,001) Change in fair value of financial 4 - - - instruments ------------ ------------ ------------ Net finance income 18 17 45 ------------ ------------ ------------ (Loss)/profit before tax (13) 3 12 Taxation - - - ------------ ------------ ------------ (Loss)/profit for the period (13) 3 12 ============ ============ ============
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 2019
As at As at As at 30 June 31 December 30 June 2019 2018 2018 (unaudited) (audited) (unaudited) Notes GBP000 GBP000 GBP000 Non-current assets Trade and other receivables 5 674,364 688,012 701,096 Derivative financial instruments 8 106,039 94,412 93,528 ------------ ------------ ------------ 780,403 782,424 794,624 Current assets Trade and other receivables 5 34,469 54,129 53,218 Derivative financial instruments 8 1,456 1,481 1,475 Cash and cash equivalents 582 545 506 ------------ ------------ ------------ 36,507 56,155 55,199 Total assets 816,910 838,579 849,823 ------------ ------------ ------------ Current liabilities Borrowings 7 (26,733) (45,652) (44,573) Trade and other payables 6 (7,301) (7,992) (8,130) Derivative financial instruments 8 (1,456) (1,481) (1,475) ------------ ------------ ------------ (35,490) (55,125) (54,178) Non-current liabilities Borrowings 7 (674,364) (688,012) (701,096) Derivative financial instruments 8 (106,039) (94,412) (93,528) ------------ ------------ ------------ (780,403) (782,424) (794,624) Total liabilities (815,893) (837,549) (848,802) ------------ ------------ ------------ Net assets 1,017 1,030 1,021 ============ ============ ============ Equity Share capital 9 - - - Other reserves 113 113 113 Retained earnings 904 917 908 ------------ ------------ ------------ Total equity 1,017 1,030 1,021 ============ ============ ============
The notes on pages 10 to 20 form part of this interim report.
The interim report was approved by the Board of directors and authorised for issue on 27 September 2019 and were signed on its behalf by:
Sean Crosby
Director
STATEMENT OF CHANGES IN EQUITY (unaudited)
FOR THE SIX MONTHSED 30 JUNE 2019
Share Other Retained Total capital Reserves earnings equity GBP000 GBP000 GBP000 GBP000 At 1 January 2018 - 113 905 1,018 ---------- --------- --------- ------- Profit for the period - - 3 3 ---------- --------- --------- ------- Total comprehensive income for the period - - 3 3 ---------- --------- --------- ------- At 30 June 2018 - 113 908 1,021 ========== ========= ========= ======= At 1 July 2018 - 113 908 1,021 ---------- --------- --------- ------- Profit for the period - - 9 9 ---------- --------- --------- ------- Total comprehensive income for the period - - 9 9 ---------- --------- --------- ------- At 31 December 2018 - 113 917 1,030 ========== ========= ========= ======= At 1 January 2019 - 113 917 1,030 ---------- --------- --------- ------- Loss for the period - - (13) (13) ---------- --------- --------- ------- Total comprehensive loss for the period - - (13) (13) ---------- --------- --------- ------- At 30 June 2019 - 113 904 1,017 ========== ========= ========= =======
STATEMENT OF CASH FLOWS (unaudited)
FOR THE SIX MONTHSED 30 JUNE 2019
Six months Six months ended ended Year ended 30 June 30 June 31 December 2019 2018 2018 (unaudited) (unaudited) (audited) Notes GBP000 GBP000 GBP000 Cash (used in)/generated from operations 11 (10) (3) 8 Interest received 21,744 22,927 45,431 Interest paid (21,697) (22,885) (45,361) ------------ ------------ ------------ Cash flows from operating activities 37 39 78 ------------ ------------ ------------ Amounts owed by group undertaking - received 33,006 10,688 23,179
------------ ------------ ------------ Cash flows from investing activities 33,006 10,688 23,179 Borrowings repaid (33,006) (10,688) (23,179) Cash outflows from financing activities (33,006) (10,688) (23,179) ------------ ------------ ------------ Net increase in cash and cash equivalents 37 39 78 Cash and cash equivalents at beginning of period 545 467 467 ------------ ------------ ------------ Cash and cash equivalents at end of period 582 506 545 ============ ============ ============
NOTES (unaudited)
FOR THE SIX MONTHSED 30 JUNE 2019
1. Basis of preparation
The condensed set of interim financial statements ("interim financial statements") for the six months ended 30 June 2019 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 2018 is not the company's financial statements for that year. Those financial statements have been reported on by the company's previous auditors. The previous 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 2018 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 2018. 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 of the company 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 2019
2. Accounting policies
The accounting policies applied are consistent with those of the company's financial statements for the year ended 31 December 2018 as set out on pages 14 to 16 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 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 income Six months Six months ended ended Year ended 30 June 30 June 31 December 2019 2018 2018 (unaudited) (unaudited) (audited) GBP000 GBP000 GBP000 Finance income On amounts due from group undertaking 21,760 23,054 46,046 21,760 23,054 46,046 =========== =========== ============ Finance costs On borrowings (21,724) (23,032) (45,986) Other interest (18) (5) (15) ----------- ----------- ------------ (21,742) (23,037) (46,001) =========== =========== ============ Change in fair value of financial instruments On external derivative financial instruments (11,627) 9,728 8,844 On derivative financial instruments with The Trafford Centre Limited 11,627 (9,728) (8,844) ----------- ----------- ------------ - - - Net finance income 18 17 45 =========== =========== ============
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2019
5. Trade and other receivables As at As at As at 30 June 31 December 30 June 2019 2018 2018 (unaudited) (audited) (unaudited) GBP000 GBP000 GBP000 Current Amounts owed by group undertaking 27,591 46,525 45,498 Less: finance costs (858) (873) (925) ----------- ----------- ----------- Net loan amount 26,733 45,652 44,573 Accrued income and other amounts due from group undertaking 7,682 8,094 8,266 Prepayments 37 373 373 Other receivables 17 10 6 ----------- ----------- ----------- 34,469 54,129 53,218 =========== =========== =========== As at As at As at 30 June 31 December 30 June 2019 2018 2018 (unaudited) (audited) (unaudited) GBP000 GBP000 GBP000 Non-current Amounts owed by group undertaking 683,767 697,838 711,357 Less: finance costs (9,403) (9,826) (10,261) ----------- ----------- ----------- Net loan amount 674,364 688,012 701,096 =========== =========== ===========
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 credit risk of these balances has been reviewed and there is no loss allowance recognised as it has been concluded that there is an immaterial risk of credit loss in the next 12 months. 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 2019
6. Trade and other payables As at As at As at 30 June 31 December 30 June 2019 2018 2018 (unaudited) (audited) (unaudited) GBP000 GBP000 GBP000 Amounts owed to group undertaking 35 6 - Accruals 7,266 7,986 7,987 Other payables - - 143 ----------- ----------- ----------- 7,301 7,992 8,130 =========== =========== ===========
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 2019
7. Borrowings Year Interest Final As at ended 31 As at rate maturity 30 June December 30 June 2019 2018 2018 (unaudited) (audited) (unaudited) GBP000 GBP000 GBP000 Current Secured notes: Class A2 6.5% 2033 12,772 12,376 11,992 A4 2.875% 2019 - 20,000 20,000 B 7.03% 2029 4,929 4,764 4,604 D2 8.28% 2022 9,890 9,385 8,902 Debt falling due within one year 27,591 46,525 45,498 Less: finance costs (858) (873) (925) ------------ ---------- ------------ Net loan amount 26,733 45,652 44,573 ============ ========== ============ Non-current Secured notes: Class A2 6.5% 2033 267,675 274,163 280,446 A3 Floating 2035 188,500 188,500 188,500 B 7.03% 2029 60,110 62,617 65,039 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 28,428 33,504 38,318 D3 4.750% 2024 70,000 70,000 70,000 Debt falling due after one year 683,767 697,838 711,357 Less: finance costs (9,403) (9,826) (10,261) ------------ ---------- ------------ Net loan amount 674,364 688,012 701,096 ============ ========== ============ Total borrowings 701,097 733,664 745,669 ============ ========== ============
The fair value of borrowings as at 30 June 2019 was GBP817,110,000 (31 December 2018 GBP837,163,000(1) , 30 June 2018 GBP870,844,000(1) ).
(1) The 31 December 2018 and 30 June 2018 fair value of the D1(N) loan notes has been restated to reflect the fair value attributable to the company. This previously reflected the intu Group's net position. The impact on the 31 December 2018 and 30 June 2018 fair value of borrowings figures is an increase of GBP8,381,000 and GBP8,490,000 respectively. No financial statement line item is affected by the restatement.
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2019
7. Borrowings (continued)
The maturity profile of gross debt is as follows:
As at As at As at 30 June 31 December 30 June 2019 2018 2018 (unaudited) (audited) (unaudited) GBP000 GBP000 GBP000 Repayable within one year 27,591 46,525 45,497 Repayable in more than one year but not more than two years 29,835 28,693 27,591 Repayable in more than two years but not more than five years 174,446 87,163 89,711 Repayable in more than five years 479,486 581,982 594,056 ----------- ----------- ----------- 711,358 744,363 756,855 =========== =========== ===========
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 (31 December 2018 GBP237,554,000, 30 June 2018 GBP237,554,000) with rates of 4.20%, 4.34% and 4.66%. The fair value of these interest rate swaps at 30 June 2019 was a liability of GBP107,495,000 (31 December 2018 GBP95,893,000, 30 June 2018 GBP95,003,000).
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 GBP Issued, called up and fully paid At 30 June 2019, 31 December 2018 and 30 June 2018 - 2 ordinary shares of GBP1 each 2 ===
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2019
10. Financial instruments
The table below presents the company's financial assets and liabilities recognised at fair value at 30 June 2019, 31 December 2018 and 30 June 2018.
As at 30 June 2019 Level 1 Level 2 Level 3 Total GBP000 GBP000 GBP000 GBP000 Assets Derivative financial instruments: - Fair value through profit or loss - 107,495 - 107,495 --------- ---------- ------- ---------- Total assets - 107,495 - 107,495 --------- ---------- ------- ---------- Liabilities Derivative financial instruments: - Fair value through profit or loss - (107,495) - (107,495) --------- ---------- ------- ---------- Total liabilities - (107,495) - (107,495) ========= ========== ======= ========== As at 31 December 2018 Level 1 Level 2 Level 3 Total GBP000 GBP000 GBP000 GBP000 Assets Derivative financial instruments: - Fair value through profit or loss - 95,893 - 95,893 --------- --------- ------- --------- Total assets - 95,893 - 95,893 --------- --------- ------- --------- Liabilities Derivative financial instruments: - Fair value through profit or loss - (95,893) - (95,893) --------- --------- ------- --------- Total liabilities - (95,893) - (95,893) ========= ========= ======= =========
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2019
10. Financial instruments (continued) As at 30 June 2018 Level 1 Level 2 Level 3 Total GBP000 GBP000 GBP000 GBP000 Assets Derivative financial instruments: - Fair value through profit or loss - 95,003 - 95,003 --------- --------- ------- --------- Total assets - 95,003 - 95,003 --------- --------- ------- --------- Liabilities Derivative financial instruments: - Fair value through profit or loss - (95,003) - (95,003) --------- --------- ------- --------- Total liabilities - (95,003) - (95,003) ========= ========= ======= =========
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 2019
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 2019, 31 December 2018 and 30 June 2018. 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 2019 GBP000 GBP000 GBP000 Derivative financial instrument assets 107,495 107,495 11,627 ---------- ---------- ------------ Total assets - fair value through profit or loss 107,495 107,495 11,627 ---------- ---------- ------------ Trade and other receivables 708,779 824,792 - Cash and cash equivalents 582 582 - ---------- ---------- ------------ Total - assets - amortised cost 709,361 825,374 - ---------- ---------- ------------ Derivative financial instrument liabilities (107,495) (107,495) (11,627) ---------- ---------- ------------ Total liabilities - fair value through profit or loss (107,495) (107,495) (11,627) ---------- ---------- ------------ Trade and other payables (35) (35) - Borrowings (701,097) (817,110) - ---------- ---------- ------------ Total liabilities - amortised cost (701,132) (817,145) - ========== ========== ============ Gain/(loss) Carrying Fair to income value value statement As at 31 December 2018 GBP000 GBP000 GBP000 Derivative financial instrument assets 95,893 95,893 (8,844) ---------- ----------- ------------ Total assets - fair value through profit or loss 95,893 95,893 (8,844) ---------- ----------- ------------ Trade and other receivables 741,758 845,257(1) - Cash and cash equivalents 545 545 - ---------- ----------- ------------ Total assets - amortised cost 742,303 845,802 - ---------- ----------- ------------ Derivative financial instrument liabilities (95,893) (95,893) 8,844 ---------- ----------- ------------ Total liabilities - fair value through profit or loss (95,893) (95,893) 8,844 ---------- ----------- ------------ Trade and other payables (6) (6) - (837,163) Borrowings (733,664) (1) - ---------- ----------- ------------ Total liabilities - amortised cost (733,670) (837,169) - ========== =========== ============
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2019
10. Financial instruments (continued) Gain/(loss) Carrying Fair to income value value statement As at 30 June 2018 GBP000 GBP000 GBP000 Derivative financial instrument assets 95,003 95,003 (9,728) ---------- ----------- ------------ Total assets - fair value through profit or loss 95,003 95,003 (9,728) ---------- ----------- ------------ Trade and other receivables 753,935 879,110(1) - Cash and cash equivalents 506 506 - ---------- ----------- ------------ Total assets - amortised cost 754,441 879,616 - ---------- ----------- ------------ Derivative financial instrument liabilities (95,003) (95,003) 9,728 ---------- ----------- ------------ Total liabilities - fair value through profit or loss (95,003) (95,003) 9,728 ---------- ----------- ------------ Trade and other payables (143) (143) - (870,844) Borrowings (745,669) (1) - ---------- ----------- ------------ Total liabilities - amortised cost (745,812) (870,987) - ========== =========== ============
(1) The 31 December 2018 and 30 June 2018 fair value of the D1(N) loan notes included in borrowings has been restated to reflect the fair value attributable to the company. This previously reflected the intu Group's net position. The impact on the 31 December 2018 and 30 June 2018 figures is an increase of GBP8,381,000 and GBP8,490,000 respectively. The same restatement is also reflected in trade and other receivables as a result of the financing arrangement with The Trafford Centre Limited. No financial statement line item is affected by the restatement.
11. Cash (used in)/generated from operations Six months Six months ended ended Year ended 30 June 30 June 31 December 2019 2018 2018 (unaudited) (unaudited) (audited) GBP000 GBP000 GBP000
(Loss)/profit before tax (13) 3 12 Remove: Finance income (21,760) (23,054) (46,046) Finance costs 21,742 23,037 46,001 Changes in working capital: Change in trade and other receivables 319 1,708 1,877 Change in trade and other payables (298) (1,697) (1,836) ----------- ----------- ----------- Cash (used in)/generated from operations (10) (3) 8 =========== =========== ===========
NOTES (unaudited) (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2019
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 or under IAS 34 Interim Financial Reporting except those disclosed elsewhere in this condensed set of interim financial statements.
13. 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
IR UBVSRKUAKUAR
(END) Dow Jones Newswires
September 27, 2019 11:00 ET (15:00 GMT)
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