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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Urban Exposure Plc | LSE:UEX | London | Ordinary Share | GB00BFNSQ303 | ORD GBP0.01 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 68.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Dow Jones received a payment from EQS/DGAP to publish this press release.
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Urban Exposure plc (UEX)
Urban Exposure plc: Interim results for the period from 10 April 2018
(incorporation) to 30 September 2018
18-Dec-2018 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
18 December 2018
Urban Exposure plc
Interim results for the period from 10 April 2018 (incorporation) to 30
September 2018
Urban Exposure Plc ("the Company") and its subsidiaries (together "the
Group" or "Urban Exposure"), a specialist residential development financier
and asset manager, today announces its unaudited Group financial results for
the period from 10 April 2018 (the date of incorporation) to 30 September
2018 ("the Period"), following its admission to AIM on 9 May 2018 ("IPO").
The Group's financial year ends on 31 December each year and, accordingly,
the period to 30 June is the half-year period in each year for which interim
results will be prepared going forward.
These interim results, are being published in accordance with AIM Rule 18.
The Group will publish its inaugural audited financial results for the
period from 10 April 2018 to 31 December 2018 before 30 June 2019.
Highlights
· As at 30 September 2018, funding of GBP168.4 million had been committed
across seven loans. GBP62.1 million of cash had been deployed in respect of
these seven loans, being 41% of the GBP150 million capital raised in the
IPO.
· On 27 July 2018, the Group announced that it had closed its first
managed account, a partnership agreement with Kohlberg Kravis Roberts
(KKR) with exclusivity, and with a value of GBP165 million (of which the
Group co-invested GBP15m).
· The loss for the period was GBP3.1 million, which includes exceptional
costs of GBP0.6 million and share-based expenses of GBP0.3 million.
· Interim dividend of 0.83 pence per ordinary share
Financial Highlights
Revenue: GBP0.6m
Loss before tax: GBP(3.1)m
Basic loss per share: (2.25)p
Dividend per share: 0.83p
Net assets: GBP155.5m
Cash on balance sheet: GBP80.4m
A copy of the Interim Report will shortly be available on the Company's
website at www.urbanexposureplc.com [1]
Enquiries:
Urban Exposure plc Tel: +44 (0) 845 643 2173
Randeesh Sandhu, CEO
Liberum Capital Limited (Nominated Tel: +44 (0) 20 3100 2000
Adviser and Sole Broker)
Neil Patel
Gillian Martin
Jonathan Wilkes-Green
Louis Davies
MHP Communications (Financial Public Tel: +44 (0) 20 3128 8540
Relations)
Barnaby Fry
Charlie Barker
Patrick Hanrahan
Sophia Samaras
CEO STATEMENT
I am pleased to announce our inaugural set of Group interim results,
covering the period from 10th April 2018 to 30 September 2018. Following our
successful IPO in May this year, we have been delighted with the response
from our key stakeholders, in particular - our borrowers, funders and
employees.
As at 30 September 2018, the Group had written GBP168.4 million of new loans
and secured GBP150 million of external funding via a partnership agreement
with KKR. More importantly, the pipeline for the Group on both sides of the
business - the direct lending division and the asset management division -
that has been generated post-IPO is consistent with our expectations at
listing. We are pleased with the quality of our loan book. The Loan to Value
("LTV") levels offer better credit protection, being 8-10 percentage points
lower than anticipated, at a weighted average of 60.3%. We have been able to
negotiate conservative pre-sales levels which also offer enhanced risk
mitigation. In addition, funding commitments that are both secured and in
the pipeline are at a significant quantum.
Our unlevered gross returns on the seven loans written within the Period
remain in line with the business plan at IPO. In furtherance of the Group's
strategy of growing the asset management business, a number of these loans
will be sold to the KKR partnership structure, or will utilise other
syndication arrangements thereby freeing up the Group's capital for new
loans. 'Loan-on-loan' credit lines (whereby our lending commitments are
matched by equivalent commitments from a third party) are progressing with a
number of institutions, at least one of which is expected to close before 31
December 2018, whilst additional syndication partnership opportunities are
also at an advanced stage.
We have increased our headcount to help execute the enhanced deal pipeline
and asset management relationships, and I am delighted with how the entire
expanded team has stepped up to achieving our targets and the new reporting
and governance requirements of being a listed company.
Accounting for Minimum Earnings
All loans and investments in partnership vehicles will be accounted for on a
Fair Value Basis under the requirements of International Financial Reporting
Standard 9.
The structure of our business model going forward is such that loans are
typically on balance sheet at origination but are thereafter transferred
into the asset management side of the business, whilst maintaining a portion
of the capital commitment. This structure allows the Group to continue its
participation in the loans by virtue of its co-investment, and to free up
capital to originate new loans to our borrowers.
Each loan originated by the Group includes a Minimum Earnings Clause
("MEC"). MECs set a floor on the earnings of each loan originated by the
Group by guaranteeing a minimum return, regardless of the draw-down profile
or an early re-financing of the debt. The projected earnings on each loan
originated always exceed the level of any MECs. Following consultations with
our Auditors, the Group has concluded that loans should be valued based on
their expected cash flow profiles and discounted at a factor equal to the
yield of the underlying loan. The effect of this is that no value is
attributed to the MECs because, on a Fair Value Basis, forecast cash flows
assume that loans follow their anticipated course, thereby excluding the
effect of MECs.
Projected earnings
Below we have set out an indication of minimum and projected earnings for
the seven loan commitments written as at 30 September 2018. In order to
portray a more realistic representation of earnings, loans that have since
been confirmed as moving into an asset management structure are assumed to
have been duly transferred, despite the fact that the actual transfer may
not yet have taken place. To not do so would state a level of MEC earnings
that was unrealistically high, in that it would fail to reflect the
proportion of those earnings that would become due to our co-funders.
Based on loan commitments as at 30 September 2018:
No of loans: 7 (3 subsequently transferred into asset management structures)
Total loan commitments: GBP168.4m (GBP86.2m subsequently to be transferred into
asset management structures)
Loan commitments by Group: GBP82.2m
Projected earnings: GBP11.1m (89% derived from balance sheet deployment)
MECs: GBP5.6m (85% derived from balance sheet deployment)
The breakdown of income categorisation is two-fold:
1) balance sheet income (this includes projected income for loans and loan
commitments on balance sheet at that point in time, plus projected income
for the Group's co-investment stake in any asset management structure);
2) asset management income (which is projected fee and 'promote' income
from the Group's co-investors).
Given that MECs are both contractually secured and legally binding, the
Group is in a position to pay its dividend from what is essentially
'covered' income.
OPERATING REVIEW
During the Period, the Group has deployed approximately 41% of the capital
raised, and secured additional third-party funds of GBP150 million.
Loss before tax
The Group made a loss of GBP3.1 million for the Period. Revenue recognition in
the Period was lower than expected due to the draw-down profile of the
Group's newly originated loan book being more protracted. This was, in turn,
due to higher than anticipated levels of developer equity being contributed
to the loans, and a resultant increase in loan book quality.
Operating expenses
In line with expectations, operating expenses during the Period amounted to
GBP3.7 million, consisting mainly of salaries and benefits totalling GBP1.8
million. It also included GBP0.3 million share-based expenses, relating to the
costs of the Long-Term Incentive Plan and management share options which
were introduced by the Group to motivate and incentivise employees and
exceptional costs of GBP0.6 million for professional and consultancy fees
relating to listing.
Loans
As at 30 September 2018, the Group had completed seven loans, bringing total
lending commitments to GBP168.4 million. The loans are geographically
diversified, covering development projects across the UK, specifically
Central London, Greater London, Essex, Buckinghamshire, Cornwall, Nottingham
and Wales. These loans, in aggregate, will finance the construction of 598
private residential homes, 86 affordable housing units and c. 26,000 sq ft
of commercial real estate (including office space, retail and a hotel).
The average weighted term of these loans is 25 months and the weighted
average Loan to Gross Development Value (LTV) is 60 per cent, which is more
conservative than initial expectations (between 65 per cent and 75 per
cent). Projected returns in respect of these loans remain in line with
expectations at IPO.
Assets under management
Our asset management business has gained momentum since the KKR partnership
agreement was confirmed in July 2018. Furthermore, we are actively
negotiating with several third parties to raise additional funds to further
diversify our asset management operations.
The Group is in the process of executing two syndication partner agreements.
Loans syndicated to those parties will generate fees for the Group in line
with expectations. The Group is also in the late stages of closing a debt
financing facility to add gearing to the partnership arrangement with KKR.
This is expected to be an initial facility of GBP165 million, with scope to
further scale up as required.
Strengthening our technology platform
We are actively pursuing the development and implementation of loan software
that can facilitate our platform to digitise both borrower and funder
interactions with the Group. The Group is in negotiations with a technology
partner to build a bespoke platform.
Share premium cancellation
The Group made an application to cancel its share premium account in order
to create distributable reserves at the Group level, which would be
available to be used primarily for the purpose of paying dividends. The
Court approved the application on 24 July 2018.
Dividend
In accordance with our dividend policy outlined at IPO;
· the Board intends to pay a total dividend for the financial Period ended
31 December 2018 of 2.5p per ordinary share
· one third of which is payable as an interim dividend which was declared
on 17 December 2018 at 0.83 pence
· the balance of 1.67 pence is expected to be declared as a final dividend
for the year ended 31 December 2018 at a later date
· 5.0p per Ordinary Share is expected as a dividend for 2019
· The Group will have a progressive dividend policy thereafter.
The interim dividend will be paid on 21 January 2019 to those shareholders
on the register at the close of business on 28 December 2018. The
ex-dividend date is 27 December 2018.
Housing market outlook
Overall levels of housing market activity remained stable in the 12 months
to September 2018. Housing transactions were steady at around 100,000 a
month and mortgage approvals for house purchase averaged around 65,000 a
month. Nationally, house prices increased by around 3% over this 12-month
period. This was similar to the increase in whole economy average earnings.
Regionally, house price inflation slowed in London and the south east, but
remained steady elsewhere.
We continue to focus on housing projects outside of London, in areas of
significant housing need. The UK continues to face a chronic housing
shortage, with output currently still well below the government's target of
building 300,000 homes per annum. The market fundamentals of this housing
supply shortfall driving demand for housing also remain - a lack of finance
available for developers; a political determination now to address the
fundamental issues; and positive economic drivers including rising levels of
employment and higher wage growth, coupled with mortgage interest rates
remaining at historically low levels and mortgage availability continuing to
return to more normal levels.
Outlook
The Group has a strong balance sheet supported by both a healthy pipeline of
lending opportunities and a number of significant potential co-funding
relationships that are at an advanced stage of progression.
Looking forward we are optimistic for the Group's growth prospects. We have
formed a solid foundation from which we expect to generate significant
shareholder value in the coming months and years.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
AS AT 30 SEPTEMBER 2018
10 April 2018 to 30
September 2018
Note GBP000
Finance income 5 606
Total revenue 606
Administrative expenses (3,698)
Loss before taxation 4 (3,092)
Taxation (charge)/credit 6 -
Loss for the period (3,092)
Other comprehensive -
income/(expense)
Total comprehensive expense (3,092)
Basic and diluted loss per 7 ( 2.25)p
ordinary share
All the amounts relate to continuing operations.
The notes form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2018
Note GBP,000
Non-current assets
Investments 9 273
Intangible assets 10 12,468
Loan receivables more than one year 11 64,857
Total non-current assets 77,598
Current assets
Trade and other receivables 12 130
Cash and cash equivalents 13 80,435
Total current assets 80,565
Total assets 158,163
Non-current liabilities
Deferred tax provision 356
Total non-current liabilities 356
Current liabilities
Trade and other payables 14 2,326
Total current liabilities 2,326
Total liabilities 2,682
Net assets 155,481
Equity and reserves
Share capital 15 1,700
Share premium 16 -
Retained earnings 153,781
Total equity and reserves 155,481
The notes form an integral part of these financial statements.
The unaudited condensed financial statements were approved by the board of
directors on 17 December 2018 and were signed on its behalf by:
Trevor DaCosta
Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 30 SEPTEMBER 2018
Note Share Share Retained Total
capit premi earnings equit
al um y
GBP'000 GBP'000 GBP'000 GBP'000
Balance at 10 April - - - -
2018
Loss for the period - - (3,092) (3,09
2)
Share-based payments 17 - - 295 295
Issue of share 15,16 1,700 163,3 - 165,0
capital 00 00
IPO expenses - (6,72 - (6,72
2) 2)
Capital reduction 16 - (156, 156,578 -
578)
Dividends paid - - - -
Balance at 30 September 2018 1,700 - 153,781 155,4
81
CASH FLOW STATEMENT
FOR THE PERIODED 30 SEPTEMBER 2018
2018
Note GBP'000
Cash flows from operating activities
Loss before taxation (3,092)
Adjustments for non-cash items:
Amortisation of intangible fixed assets 74
Share-based payments 295
(2,723)
Changes in working capital
Increase in payables 1,342
Increase in loan receivables (62,127)
Increase in other receivables (130)
(60,915)
Net cash from operating activities (63,638)
Cash flows from investing activities
Investment during the period (273)
Net cash from investing activities (273)
Cash flows from financing activities
Proceeds from the issue of share capital 150,000
Share issue expenses (6,722)
Receipt from loans 1,068
Dividends paid -
Net cash inflow from financing activities 144,346
Net increase in cash and cash equivalents 80,435
Cash and cash equivalents at 10 April -
Cash and cash equivalents at 30 September 2018 13 80,435
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIODED 30 SEPTEMBER 2018
GENERAL INFORMATION AND BASIS OF PREPARATION
1) General Information
Urban Exposure 1 Plc was incorporated on 10 April 2018 as a public limited
company in England and Wales with Company registration number 11302859. The
Company changed its name to Urban Exposure Plc on 27 April 2018 and its
ordinary shares were admitted to trading on AIM on 9 May 2018.
The registered office of the Company is 1 Hamilton Mews, London W1J 7HA. The
Group's principal activity is the underwriting and management of loans to UK
residential developers.
The financial statements were approved for issue on 17 December 2018.
2) Accounting policies
2.1 Basis of preparation
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union and in
compliance with Companies Act 2006. The consolidated financial statements
are presented in Sterling and all values are rounded to the nearest thousand
pounds (GBP000) except where otherwise indicated.
The financial statements have been prepared under the historical cost
convention, except for financial instruments that are measured at fair value
at the end of the reporting period, and in accordance with IAS-34: Interim
Financial Reporting. The unaudited interim consolidated condensed financial
statements do not include all the information and disclosures required in
the annual financial statements.
In the application of the Group's accounting policies, the Directors are
required to make judgements, estimates and assumptions about the carrying
amounts of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the
period of the revision and future periods if the revision affects both
current and future periods. Details of the critical judgements made and key
sources of estimation uncertainty are included in the note to which they
relate.
2.2 Basis of consolidation
The Group's financial statements consolidate the results of Urban Exposure
Plc and entities controlled by the Company for the period to 30 September
2018. Control is achieved when the Company controls an entity when it has
power over the relevant activities, exposure to variable returns, and the
ability to affect those returns through its power over the entity.
All the Subsidiaries are consolidated in full from the date of acquisition.
All inter-company transactions, balances and unrealised gains and losses on
transactions between Group companies are eliminated in full.
2.3 Income recognition
Finance income
The Group earns interest income on financial assets carried at fair value
measured using the fair value through profit and loss method.
2.4 Going concern
The Directors have, at the time of approving the financial statements, a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future.
2.5 Loans and receivables
Under IFRS 9, the Group is required to classify and measure financial assets
according to the business model within which they are managed and their
contractual terms of the cash flows. Financial assets are measured at
amortised cost if they are held within a business model whose objective is
to hold financial assets in order to collect contractual cash flows, and
their contractual cash flows represent solely payments of principal and
interest. Financial assets are measured at fair value through other
comprehensive income ("FVTOCI") if they are held within a business model
whose objective is achieved by both collecting contractual cash flows and
selling financial assets, and their contractual cash flows represent solely
payments of principal and interest. Other financial assets are measured at
fair value through profit and loss ("FVTPL").
The Group has reviewed the business model within which each financial asset
is managed and concluded that all the loans from primary operating
activities should be measured at the FVTPL. At initial recognition, the
Group measures a financial asset at its fair value and any transaction costs
are expensed to the profit and loss.
2.6 Intangible assets and goodwill
Goodwill
Goodwill arising on the acquisition of subsidiaries is measured at cost less
accumulated impairment losses.
Other intangible assets
Other intangible assets include brand names that are acquired by the Group
and which have finite useful economic lives are measured at cost less
accumulated amortisation and any accumulated impairment losses.
Amortisation
Amortisation is calculated to write off the cost of intangible assets less
their estimated residual values using the straight-line method over their
estimated lives, and is generally recognised in profit and loss. Goodwill is
not amortised.
The estimated useful economic lives for current and comparative periods are
as follows:
Brand: 10 years
Amortisation methods, useful lives and residual values are reviewed at each
reporting date and adjusted if appropriate.
2.7 Cash and cash equivalents
Cash and cash equivalents in the balance sheet include cash in hand,
deposits held at call with banks, and other short-term highly liquid
investments with a maturity of three months or less at the date of
acquisition.
2.8 Employee benefits
Share-based payments
The fair value of equity-settled share-based payment arrangements granted to
employees is recognised as an expense, with a corresponding increase in
equity and spread over the vesting period of the plan. The total amount to
be expensed is determined by reference to the fair value of the awards made
at the grant date, and is adjusted to reflect the number of awards for which
the related service and non-market performance conditions are expected to be
met, such that the amount ultimately recognised is based on the number of
awards that meet the related service and non-market performance conditions
at the vesting date. At the date of each statement of financial position,
the Group revises its estimate of the number of equity instruments that are
expected to become exercisable. It recognises the impact, if any, in the
income statement, and a corresponding adjustment is made to equity over the
remaining vesting period. The fair value of the awards and ultimate expense
are not adjusted on a change in market vesting conditions during the vesting
period.
Defined contribution plans
Obligations for contributions to defined contribution plans are expensed as
the related service is provided.
2.9 Earnings per share
Basic earnings per share are calculated by dividing profit after tax
attributable to equity shareholders of the parent company by the weighted
average number of ordinary shares in issue during the period.
Diluted earnings per share requires that the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all dilutive
potential ordinary shares. These arise from awards made under share-based
incentive schemes. Share awards with performance conditions attaching to
them are not considered to be dilutive if the share price on their exercise
is above market price.
2.10 Income taxes
Current income tax assets and liabilities are measured at the amount
expected to be recovered or paid to the taxation authorities. The tax rates
and tax laws used to compute the amount are those that are enacted or
substantively enacted.
Deferred tax is provided on the liability method on temporary differences
between the tax bases of assets and liabilities and their carrying amount
for financial reporting purposes at the reporting date. Deferred tax assets
and liabilities are measured at the rates that are expected to apply in the
period when the asset is realised or the liability is settled, based on tax
rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.
2.11 Provisions and contingencies
Provisions are liabilities with uncertainties in the amount or timing of
payments. Provisions are recognised if there is a present obligation as a
result of past events, if it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation, and
if a reliable estimate of the amount of the obligation can be made at the
date of the statement of financial position.
A contingent liability is a possible obligation that arises from past events
or a present obligation that is not recognised as it is not probable that an
outflow of resources will be required to settle the obligation or the amount
of obligation cannot be measured with sufficient reliability. A contingent
liability is disclosed but not recognised.
2.12 Dividend and capital distributions
Dividend and capital distributions to the shareholders are recognised in the
Group's Financial Statements in the period in which they are declared and
appropriately approved. Dividends paid are recognised as a deduction from
equity.
2.13 Business combinations
Acquisitions of subsidiaries are accounted for using the acquisition method.
The cost of the acquisition is measured at the aggregate of the fair values
at the date of exchange of assets given, liabilities incurred or assumed,
and equity instruments issued by the Group. Acquisition-related costs are
recognised in the income statement as incurred. The acquiree's identifiable
assets and liabilities are recognised at their fair values at the
acquisition date. Goodwill is measured as the excess of the sum of the
consideration transferred over the net amounts of identifiable assets
acquired and liabilities assumed at the acquisition date.
2.14 Investments
All the equity investments are recognised at fair value.
All fair value movements on equity investments are taken through the
statement of comprehensive income.
2.15 IPO expenses
Qualifying costs attributable to the primary issuance are debited directly
to equity. They include incremental costs that are directly attributable to
issuing the primary shares, such as advisory and underwriting fees.
All other non-qualifying costs are taken to the statement of comprehensive
income.
3 Segment information
Under IFRS 8, operating segments are required to be determined based upon
the Group's internal organisation and management structure and the primary
way in which the Chief Operating Decision Maker (CODM) is provided with
financial information. In the case of the Group, the CODM is considered to
be the Executive Committee.
The Executive Committee reviews the activities of the Group as a single
operating segment.
The Group operates only in the United Kingdom and, as a result, no
geographical segments are reported. The Group does not rely on any
individual customer and so no additional customer information is reported.
4 Loss for the period
Loss for the period has been arrived at after charging:
For the period from 10 April
2018 to 30 September 2018
GBP000
Staff costs 1,829
Amortisation 74
IPO costs 598
Auditor's remunerations
- Audit 43
- Non-audit 332
Fees paid to the auditor of the Group relate to an Initial Accounts audit
fee of GBP15,000 and an interim audit fee of GBP28,000. In addition to these
fees, the Group has incurred additional costs of GBP330,067 for the work
carried out by the auditor in relation to the admission on the AIM of London
Stock Exchange out of which GBP210,000 has been included in the above IPO cost
and the remaining amount of GBP120,067 has been treated as a reduction in
equity as share issue costs. The Group also paid GBP121,639 in relation to the
tax advice on various projects.
5 Finance income
For the period from 10 April
2018 to 30 September 2018
GBP000
Interest on loans and receivables 606
6 Taxation
For the period
from 10 April
2018 to 30
September 2018
GBP000
Current tax credit on loss for the period -
Deferred tax -
-
The standard rate of tax for the period ended 30 September 2018 is 19%. The
tax credit for the period can be reconciled to the loss per the consolidated
statement of comprehensive income as follows:
Loss before tax (3,092)
Tax at the UK corporation tax rate of 19% (587)
Expenses not deductible for tax purposes 133
Deferred tax asset not recognised 454
Tax charge for the period -
7. Earnings per share
Earnings per share ("EPS") are based on the loss for the period and the
number of ordinary shares in issue. Basic EPS are calculated by dividing the
loss attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue during the period. Diluted earnings per share take
into account share options and awards which can be converted to ordinary
shares. Basic and Diluted loss per share for the period ending 30 September
2018 is 2.25p.
8. Dividends
The board approved an interim dividend of 0.83 pence per share on 17
December 2018 for the Period ended 30 September 2018.
9. Investments
On 27 July 2018, The Group entered into a partnership agreement with
Kohlberg Kravis Roberts (KKR) in which the Group have a 9% interest. The
purpose of the partnership is to make loans to real estate developers in the
United Kingdom.
As per the partnership agreement, the Group invested GBP272,727 as initial
capital on 8 August 2018 and considers this to be the fair value at 30
September 2018.
10. Intangible assets
Goodwill Brand Total
GBP000 GBP000 GBP000
Cost
At 10 April 2018 - - -
Additions 10,668 1,874 12,542
At 30 September 2018 10,668 1,874 12,542
Amortisation
At 10 April 2018 - - -
Charge for the period - 74 74
At 30 September 2018 - 74 74
Carrying amount
At 10 April 2018 - - -
At 30 September 2018 10,668 1,800 12,468
11. Loan receivables
As at 30 September 2018
GBP000
Development loans 62,127
Legacy loans 2,730
64,857
12. Trade and other receivables
As at 30 September 2018
GBP000
Prepayments 89
Other debtors 41
130
13. Cash and cash equivalents
As at 30 September 2018
GBP000
Unrestricted cash 80,435
Cash and cash equivalents comprise cash and short-term bank deposits with an
original maturity of three months or less and an insignificant risk of
change to fair value.
14. Trade and other payables
As at 30 September 2018
000
Trade payables 366
Accruals 1,272
Other creditors 688
2,326
15. Share capital
As at 30
September 2018
Number GBP000
Authorised, issued, called up and fully paid up:
Ordinary shares of GBP0.01 each 165,000,000 1,650
Deferred shares of GBP0.01 each 4,950,000 50
169,950,000 1,700
The movement in the number of shares during the period:
Deferred shares Total
At 10 April 2018 - -
Share issue - 19,950,000
Re-classifications 4,950,000 -
IPO share issue - 150,000,000
At 30 September 2018 4,950,000 169,950,000
The Company was incorporated on 10 April 2018. On incorporation, the Company
issued 1 Ordinary Shares of GBP1 each at par value. On 16 April 2018, the
Company issued another 49,999 shares of GBP1 each.
On 30 April 2018, the entire share capital of 50,000 ordinary shares was
subdivided into 5,000,000 ordinary shares or GBP0.01 each and reorganised into
50,000 ordinary shares of GBP0.01 each and 4,950,000 of deferred shares of
GBP0.01 each.
On 9 May 2018, the Company entered into a shares exchange agreement with
Urban Exposure Holdings Company (Jersey), and as a result 7,151,300 ordinary
shares of GBP0.01 each were issued for a consideration of GBP7,151,300.
On 9 May 2018, the Company entered into a share exchange agreement with the
members of Urban Exposure Investment Management LLP and issued 7,798,700
shares of GBP0.01 each for a consideration of GBP7,798,700.
On 9 May 2018, the Company was admitted to AIM and issued 165,000,000 shares
of GBP0.01 each at an issue price of GBP1.
The ordinary shares have attached to them full voting, dividend and capital
distribution rights (including on a winding up). The ordinary shares do not
confer any rights of redemption.
The deferred shares have attached to them no rights to dividends and no
right to participate in a capital distribution (including on a winding up)
before all other shareholders. There is no right to attend or vote at a
general meeting of the Company.
16. Share premium
As at 30 September 2018
GBP000
Share premium arising on ordinary 163,300
shares issued in relation to equity
issuance
Share issue costs (6,722)
Transfer to retained earnings (156,578)
Balance at end of period -
In the board meeting on 31 May 2018, a resolution was passed authorising,
conditional on admission, the amount standing to the credit of the share
premium account of the Company (less any issue expenses set off against the
share premium account) to be cancelled and the amount of the share premium
account so cancelled to be credited to the retained earnings.
In order to cancel the share premium account, the Company needed to obtain a
court order, which was received on 24 July 2018. The SH19 form was submitted
to Companies House with a copy of the court order on 24 July 2018.
17. Share-based payments
The Group operates a Long Term Incentive Plan (LTIP), an equity-settled
employee share scheme, under which shares or share options are granted to
employees or directors subject to the terms of the scheme.
The LTIP enables the participants to acquire A ordinary shares in Urban
Exposure Holdings Limited ("A Ordinary Shares") as awards. On or after
vesting, the participants may require the Company to acquire the A Ordinary
Shares in exchange for the issue of Ordinary Shares in the Company. The
acquisition price for the A Ordinary Shares shall be the nominal value of
the shares.
The LTIP also grants share options to the participants with a nominal value
exercise price. On exercise, the participants will be issued Ordinary Shares
in the Company. The A Ordinary Shares and the share options will combine to
deliver a maximum number of Ordinary Shares in the Company.
In addition to the LTIP Options, the Group operates a management share
scheme for the senior management. Under the scheme, 1.5 million options were
granted to directors and senior management with an exercise price of 100p
and the same other terms as the LTIP options, but with the only vesting
condition being that they remain to be employed at the end of the vesting
period. The end of the vesting period is the third anniversary of the grant
date, and is therefore 9 May 2021.
17) Share-based payments (continued)
The share-based payment expense for the period included in administrative
expenses comprises:
For the period from 10 April
2018 to 30 September 2018
Total share-based payment expense 295
A Number of awards / A N Fair value Total
/ options O o at the fair
grant date value of
O o o per award the
o a e (pence) options
(GBP)
a 3 t
1 S v
A 2 a
2 t
g
d
G Exerci Vested
r sed
a
n
t
e
d
Long Term 1 - - 1,65 1 76.9 879,788
Incentive , 0,00 3
Plan 6 0
(LTIP) 5
0
,
0
0
0
1 - - 1,50 1 11.1 133,200
, 0,00 0
5 0
0
Management 0
share ,
scheme 0
0
0
3 - - 3,15 2 - 1,012,988
, 0,00
1 0
5
0
,
0
0
0
18) Acquisitions
On 9 May 2018, Urban Exposure Amco Limited purchased the business of Urban
Exposure Investment Management LLP in exchange for 15,000,000 ordinary
shares of GBP1. The following assets were acquired as part of the acquisition.
GBP,000
Consideration 15,000
Receivables (3,798)
Payables 984
Deferred tax 356
Brand (1,874)
Goodwill 10,668
19) Related party transactions
The Directors are entitled to receive the following salaries from the
Company in accordance with the Articles.
Each of William McKee (Chairman), Andrew Baddeley and Nigel Greenaway are
paid an annual base fee of GBP50,000 per annum with an additional fee of
GBP10,000 per annum for the role of chairman and an additional fee of GBP5,000
per annum for the role of chair of any Board committee.
Randeesh Sandhu, Rabinder Takhar, and Trevor DaCosta are entitled to annual
base salary, payable monthly in arrears, of GBP425,000, GBP150,000 and GBP125,000
respectively.
Following the admission of the Company to the Alternative Investment Market
of the London Stock Exchange on 10 May 2018 and up to 30 September 2018, the
Directors purchased the following number of ordinary shares:
Ordinary shares held A ordinary shares held
after admission
William McKee 20,000 -
Nigel Greenaway 25,000 -
Andrew Baddeley 25,000 -
Randeesh Sandhu 3,307,500 157,895
Rabinder Takhar 2,295,000 78,947
Trevor DaCosta 50,000 47,368
Following the admission, The Group had no other related party transactions
for the period ending 30 September 2018 that would materially affect the
position or performance of the Group.
20) Post-balance sheet events
On 14 November 2018, the Company purchased 6,505,870 of GBP0.01 ordinary
shares at 80 pence per share through a share buyback program. All of the
shares repurchased will be held in treasury.
Independent review report to Urban Exposure Plc (the "Group")
Introduction
We have been engaged by Urban Exposure Plc to review the condensed financial
statements included within the interim financial report for the period ended
30 September 2018 which comprises the unaudited consolidated statement of
comprehensive income, the unaudited consolidated statement of financial
position, the unaudited consolidated statement of changes in equity and the
unaudited consolidated cash flow statement and the related notes.
We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
Directors' responsibilities
The interim report, including the financial information contained therein,
is the responsibility of and has been approved by the directors. The
directors are responsible for preparing the interim report in accordance
with the rules of the London Stock Exchange for companies trading securities
on AIM which require that the interim report be presented and prepared in a
form consistent with that which will be adopted in the Group's annual
accounts having regard to the accounting standards applicable to such annual
accounts.
The annual financial statements of the Group will be prepared in accordance
with International Financial Reporting Standard ("IFRS") as adopted by the
European Union. The condensed financial statements included in this interim
report have 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 Group a conclusion on the condensed
set of financial statements in the interim financial report based on our
review.
Our report has been prepared in accordance with the terms of our engagement
to assist the Group in meeting the requirements of the rules of the London
Stock Exchange for companies trading securities on AIM and for no other
purpose. No person is entitled to rely on this report unless such person is
a person entitled to rely upon this report by virtue of and for the purpose
of our terms of engagement has been expressly authorised to do so by our
written consent. Save as above, we do not accept responsibility for this
report to any other person or for any other purpose and we hereby expressly
disclaim any and all such liability.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Financial
Reporting Council for use in the United Kingdom. A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical
and other review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on Auditing (UK)
and consequently does not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the interim
financial report for the period ended 30 September 2018 is not prepared, in
all material respects, in accordance with the rules of the London Stock
Exchange for companies trading securities on AIM.
BDO LLP
Chartered Accountants
London, United Kingdom
17 December 2018
(BDO is a limited liability partnership registered in England and Wales with
registered number OC305127)
ISIN: GB00BFNSQ303
Category Code: IR
TIDM: UEX
LEI Code: 213800Q7WLHGIHUFBT43
Sequence No.: 6923
EQS News ID: 759253
End of Announcement EQS News Service
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(END) Dow Jones Newswires
December 18, 2018 02:02 ET (07:02 GMT)
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