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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Urban Logistics Reit Plc | LSE:SHED | London | Ordinary Share | GB00BYV8MN78 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-2.40 | -2.13% | 110.40 | 110.20 | 110.80 | 113.60 | 109.80 | 113.60 | 582,130 | 16:29:55 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Real Estate Investment Trust | 59.71M | -82.66M | -0.1751 | -6.30 | 521.06M |
TIDMSHED
RNS Number : 3462T
Urban Logistics REIT PLC
14 November 2019
Urban Logistics REIT plc
("Urban Logistics", the "Company" or the "Group")
Interim results for the six months ended 30 September 2019
Active asset management drives strong portfolio performance
Urban Logistics, (AIM: SHED) the specialist UK logistics REIT, issues its interim financial results for the half year ended 30 September 2019.
Highlights 30 Sep 30 Sep Change 19 18 (%) ------- ------- ------- Income Statement ------- ------- ------- Net rental income (GBPm) 5.8 4.4 +31.3 ------- ------- ------- EPRA Earnings (GBPm) 3.4 2.6 +30.9 ------- ------- ------- EPRA Earnings per share (p) 3.9 3.1 +25.2 ------- ------- ------- Interim dividend (p) 3.75 3.00 +25.0 ------- ------- ------- Balance Sheet ------- ------- ------- EPRA NAV per share (p) 145.20 129.21 +12.4 ------- ------- ------- Gross borrowings (GBPm) 75.7 64.4 +17.5 ------- ------- ------- LTV (%) 34.1 34.3 ------- ------- -------
Financial
-- EPRA net asset value ("NAV") up to 145.20 pence per share
-- Total Accounting Return (NAV + dividends) of 8.2%
-- GBP195.0 million portfolio valuation with a 3.8% like-for-like increase since 31 March 2019
-- Interim dividend of 3.75 pence per share, up 25% on prior year
Property
-- Eight logistics properties with asset management potential acquired for GBP15.2 million
-- Disposals totalled GBP18.4 million representing an average profit on cost of 57.4%
-- Portfolio fully occupied
-- WAULT of 6.1 years (31 March 2019: 5.5 years)
Nigel Rich, Chairman, commented:
"The strong results reflect our specialist focus which is underpinned by a shift in retailing to e-commerce.
"We maintain a healthy acquisition pipeline which we expect to fund through equity raising and bank debt when we have the opportunity to do so.
"Looking forward we remain confident that our urban logistics portfolio will continue to deliver attractive returns for shareholders."
For further information contact:
Urban Logistics REIT plc Richard Moffitt +44 (0)20 7591 1600 Montfort - Financial PR and IR adviser Olly Scott +44 (0)78 1234 5205 N+1 Singer - Nominated Adviser and Broker James Maxwell / James Moat (Corporate Finance) Alan Geeves / James Waterlow / Sam Greatrex (Sales) +44 (0)20 7496 3000 Panmure Gordon (UK) Limited - Joint Broker Chloe Ponsonby (Corporate Broking) Emma Earl (Corporate Finance) +44 (0)20 7886 2500
About Urban Logistics REIT
Urban Logistics REIT plc is a property investment company, quoted on the AIM market of the London Stock Exchange, (AIM: SHED).
The Company invests in UK-based logistics properties with the objective of generating attractive dividends and capital returns for its shareholders. Its investment strategy focuses on strategically located smaller single let logistics properties servicing high-quality tenants. Investment returns will be generated by an experienced management team focusing on quality stock selection and active asset management.
Chairman's Statement
I am pleased to present the Group's consolidated results for its interim reporting period from 1 April 2019 to 30 September 2019.
Overview
The Group continues to assemble a diversified logistics portfolio of last mile properties that offer secure income from high quality tenants, with the prospect of an attractive total return through asset management initiatives undertaken by the Manager. The strong results achieved reflect our focus, which is underpinned by a structural shift in how consumers and businesses are procuring goods across the UK.
At the end of September, we owned a portfolio of 38 properties which were valued by CBRE at GBP195.0 million. As I write this, the Company's market capitalisation stands at just over GBP118 million.
The Portfolio
At 30 September 2019, the portfolio of properties was fully occupied with a WAULT of 6.1 years. A number of asset management initiatives were completed during the period which increased rents and lease terms. Contracted rent at 30 September 2019 increased to GBP12.2 million, compared with GBP10.7 million last year.
During the period, the Group continued to acquire properties suitable for logistics. We purchased a portfolio of parcel depots, leased to Tuffnells Parcels Express, offering 20-year income at a 7.0% net initial yield to the Group for GBP9.9 million, and two logistics properties which are let to DHL in the South East. In addition, three properties were sold in Nuneaton, Bedford and Dunstable for GBP18.4 million, with an average profit on original cost of over 57%.
Financial Results
Turning to our results for the interim period ended 30 September 2019, rental income increased to GBP5.9 million compared with GBP4.9 million at 30 September 2018. EPRA earnings are up to GBP3.4 million from GBP2.6 million, with EPRA earnings per share increasing to 3.92 pence from 3.13 pence. The increases reflect rents being received from purchased properties and increases in rental income as a result of renewals or new leases at higher rents.
Per CBRE's independent valuation, assets under management increased from GBP186.4 million at 31 March 2019 to GBP195.0 million which reflects an increase of 3.8% in the value of existing assets, plus the value of the new assets acquired. Our total return (NAV and dividend) for the six-month period was 8.2%.
Following the increase in total asset value, the loan to value ("LTV") at 30 September 2019 was 34.1%.
Dividend
The Company has declared a first interim dividend of 3.75 pence per Ordinary Share in respect of the financial year ended 31 March 2020. This will be paid as a property income distribution ("PID") on 20 December 2019 to shareholders on the register at the close of business on 22 November 2019. The ex-dividend date will be 21 November 2019.
Outlook
The outcomes of the upcoming General Election and ongoing Brexit negotiations will inevitably have an impact on the economic outlook for the UK.
Against this uncertain background Urban Logistics has continued to perform well, benefitting from the shift in retailing to e-commerce. We believe this structural change will continue to drive demand for last mile logistics properties in the coming years. Inevitably any major downturn in the economy could affect our tenants; however, we believe our portfolio is well positioned with no direct exposure to fashion retail.
We will continue to evaluate opportunities to raise capital to accelerate our growth and we hope that following the General Election the outlook for the UK will become more certain, enabling us to continue to build our well positioned business in this very attractive sector of the property market.
Nigel Rich CBE, Chairman
Manager's Report
The Group owns real estate in the urban logistics sub-sector of the UK commercial property market. The investment proposition is focused on last mile warehousing and parcel depots. Our facilities principally operate business-to-business delivery of domestic goods such as food or pharmaceuticals - not the historically volatile area of fashion retail.
At a macro level there is strong structural support from evolving consumer and business supply chain demands - led by e-commerce and online retail which is driving the need for a greater volume of warehouse space. Therefore, whilst we believe it is right to have concern over a traditional "late cycle" position in real estate, we see that current supply cannot meet changing patterns of consumer demand and therefore have constructed a portfolio to benefit from this secular growth.
Whilst there are a number of broader near-term risks, including continued Brexit uncertainty and a General Election, we remain optimistic for the future given continued occupier interest; particularly across the South East and Midlands of the UK where our portfolio is centred.
The market
Investor activity in the logistics sub sector of the UK real estate market has been robust. H1 2019 investment volumes stood at GBP1.5bn, which is 5% higher than the corresponding period last year (Savills briefing July 2019).
Structural changes, in particular e-commerce and the continuing development of modern technology, are the drivers of demand as well as a supply chain requirement to modernise and fulfil orders to urban areas nationally.
Regionally, the East Midlands saw the strongest take up in H1 2019, accounting for just over 38% of total take up. The Group is very well represented in this area.
Speculative building is continuing across the Midlands, particularly in the 'big box' space of over 400,000 sq ft. New build space also remains popular for occupiers with "design and build" in particular driving take-up due to their increasingly complex requirements.
Investment Activity
The Group acquired eight properties during the period, excluding development land, all of which are high quality logistics warehouses, with good geographical spread and an average WAULT of 15 years. The new properties all present a variety of asset management opportunities, which have the potential to drive income growth and capital appreciation.
Tuffnells Portfolio Thatcham Sittingbourne ------------------- -------------------- ---------- -------------- Purchase price* GBP9.9m GBP3.4m GBP1.9m Net initial yield 7.0% 5.8% 5.9% Area (sq.ft) 84,872 26,478 21,872 Contracted rent GBP0.80m GBP0.21m GBP0.12m WAULT 20.0 years 4.5 years 2.5 years Rent per sq.ft GBP7.08 GBP8.01 GBP5.49
*Purchase price excludes acquisition costs
Tuffnells portfolio
On 27 September 2019, a portfolio of parcel depots was acquired for GBP9.9 million. The acquisition was sourced at a net initial yield of 7.0%. The properties are close to established regional transport hubs in last-mile locations. These well specified parcel delivery hubs are leased to Tuffnells Parcel Express Limited, a business-to-business distributor specialising in irregular dimensions and weights, on fully repairing and insuring leases.
Thatcham and Sittingbourne
The Group acquired two logistics properties in Sittingbourne and Thatcham for a combined consideration of GBP5.3 million at a 5.9% blended net initial yield. The acquisitions further extend our portfolio's weighting across the South East of England where there is a chronic shortage of logistics properties in our size range. Both properties are let to DHL's UK Mail business.
Disposals
The Group completed the sale of three logistics properties located in Nuneaton, Bedford and Dunstable. The sales totalled GBP18.4 million, representing an average profit on cost of 57%. Taken together with the income returns generated during the Group's ownership the combined sale price represents a total property return of 50%.
Nuneaton Postley Road Cemetery Road ----------------------- --------- ------------- -------------- Purchase price* GBP6.7m GBP5.6m GBP0.6m Sales price GBP8.1m GBP9.1m GBP1.2m Total property return 23.3% 73.1% 126.3% Sales price v NBV +1.3% +8.2% +14.3% Disposal NIY 4.7% 4.7% 5.3%
*Purchase price excludes acquisition costs
Nuneaton
The building was purchased as part of a portfolio in September 2017 for GBP6.7 million. The unit was acquired with vacant possession and was subject to a rent guarantee until September 2019. The property was sold to an owner occupier, Cofresh Limited, in April 2019 and realised a Total Property Return of 23%.
Postley Road, Bedford
This property was purchased at IPO in 2016 for GBP5.6 million and comprises four industrial units with a piece of development land. After extensive asset management, increasing rents and lease terms, the fully occupied site was sold in May 2019 for GBP9.1 million and realised a Total Property Return of 73%. The land element has been retained and the purchaser has an option to acquire it for GBP0.5m if planning for redevelopment is granted.
Forward funding of new warehouses
We are forward funding, using the Group's internal resources, three properties suitable for urban logistics by providing funds to the developer, with further detail provided below.
Stone Hinckley Southwater --------------- -------- --------- ----------- Unit size 86,000 63,500 24,000 Total cost GBP8.5m GBP6.9m GBP4.6m Yield on cost 6.0% 6.0% 6.0%
Stone/M6
The site will provide a flexible gross internal floor area of 86,000 sq. ft. Stone Business Park is in an established logistics location and benefits from direct access to junctions 14 and 15 of the M6.
Hinckley/M1
The site will comprise two units with a total gross internal floor area of 63,500 sq. ft. Lime Kilns Business Park has direct access to the A5 and is close to junction 1 of the M69, enabling access to both the M1 and M6.
Southwater, Horsham
This development of 24,000 sq. ft. is located in a prime location in the South East and will comprise one unit.
Construction across all three sites is expected to commence shortly with completion expected in the second quarter of calendar year 2020. A number of pre-lets are at an advanced stage.
Pipeline
We seek to identify markets with high performance characteristics. For example, the East of England has just 3 months of supply in the 100-200,000 sq. ft. range. We note that 70% of 2018 take up was within this size range and we have a number of assets in our pipeline located in this region. Through our track record and experience, we are well-placed to continue sourcing attractive new opportunities and have a strong pipeline of similar product to our current portfolio.
Asset Management
During the interim period, the Group successfully completed three new lettings and settled two rent reviews, which in total generated GBP0.3 million of additional annual rental income. Shortly after the period end, two further rent reviews were agreed at 9% above ERV and further increased our annual contracted rent by GBP0.3 million. Therefore, like-for-like income growth across the interim period, including rent reviews settled post period end, was 3.1%.
No. of Deals Rental Uplift Like-for-like % of Sep WAULT (years) Rental growth 19 Contracted Rent New lettings 3 GBP0.2m n/a 2% 7.3 Fixed rent review 1 GBP0.1m 20% 2% n/a OMV rent reviews* 3 GBP0.3m 44% 8% n/a ------------------- ------------- -------------- --------------- --------------- -------------- Total 7 GBP0.6m 38% 12% ------------------- ------------- -------------- --------------- --------------- --------------
*Includes two rent reviews settled shortly after the period end
Valuation and portfolio growth
CBRE independently valued the portfolio at 30 September 2019. The portfolio's market value was GBP195.0 million, compared with the assets' combined purchase price of GBP163.3 million, excluding purchaser costs. This represents an increase of GBP31.7 million, or 19.4%, when compared to the purchase prices. During the interim financial period, property values increased by 3.8% on a like-for-like basis, supporting our growth conviction. The valuation increase reflects our focus on asset management and buying well-located sites, in many cases off market.
Financial Review
The interim financial period to 30 September 2019 was a busy operational time for the Company with a focus on both asset management and investment activity.
The results demonstrate some significant achievements and how the stated strategy of the Group, namely adding scale whilst focusing on investment returns, continues to prosper. We expect the results to continue to improve as the Group achieves scale and undertakes its rent and lease driven asset management initiatives.
EPRA earnings for the period were GBP3.4 million (H1 Sep 18: GBP2.6 million), or 3.92 pence per share (H1 Sep 18: 3.13 pence per share). There were two principal drivers for this positive performance. The first was full capital utilisation, as acquisitions replaced sold properties and the portfolio was fully occupied. The second was successful asset management undertaken during the prior and current periods across a number of sites.
Administrative and other expenses, which include the Manager's fee and other costs of running the Group, were GBP1.1 million (H1 Sep 18: GBP0.18m). The EPRA cost ratio was 18.6% for the period (H1 Sep 18: 26.2%).
The Company has seen strong NAV growth over the period, up 5.2% from 137.96 pence at 31 March 2019, to 145.20 pence per share at 30 September 2019. With the Company fully invested, and a range of asset management initiatives ongoing, we expect earnings and capital growth to continue.
Financing and hedging
As at 30 September 2019, the Group had a senior debt facility with Santander and Barclays totalling GBP75.7 million. This is 72% hedged using interest rate swaps. It reflects a conservative loan to value (LTV) of 34.1% which is felt appropriate. The Group's target LTV is 35-40%.
Market Outlook
The Manager believes that this property sub sector continues to show resilience in a context of wider economic and political uncertainty.
The UK continues to be one of the fastest growing adopters of online retail sales and there is a requirement for tenants to develop their e-fulfilment capability accordingly. As such, key geographic regions across the UK are seeing buoyant leasing activity.
We also see a strong market for local delivery driven by 10% expected population growth across major UK conurbations by 2038 (source: Savills). Furthermore, supply in the 20,000-200,000 sq ft logistics space, where Urban Logistics is focused, has fallen by 36.0% since 2012 with land being lost to higher value uses.
Growth of online retail could account for up to 25% of all retail sales by 2021, creating yet more demand for distribution warehousing, particularly in our size range of unit.
Our focus will be to continue acquiring assets and implementing asset management initiatives with a focus on rental growth in light of the current market dynamic of diminishing supply and increasing occupier demand. We will also focus on maintaining and building existing tenant relationships with a view to extending the Group's reputation as the leader in the smaller lot size urban logistics market.
We will continue to build a pipeline of property acquisitions in the expectation that we will be able to raise new equity capital in the not too distant future.
Richard Moffitt
Independent Review Report to Urban Logistics REIT plc
1 Introduction
We have been engaged by Urban Logistics REIT plc (the "Company") to review the condensed set of financial statements in the interim report for the six months ended 30 September 2019 which comprise the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Financial Position, the Condensed Consolidated Cash Flow Statement and the Condensed Consolidated Statement of Changes in Equity and related explanatory 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 financial information in the condensed set of financial statements.
2. Directors' responsibility
The interim report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the interim report in accordance with AIM Rule 18.
As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRS as adopted by the European Union. It is the responsibility of the Directors to ensure that the condensed set of financial statements included in this interim report have been prepared on a basis consistent with that which will be adopted in the Group's annual financial statements.
3. Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim report based on our review.
4. 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.
5. 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 report for the six months ended 30 September 2019 is not prepared, in all material respects, in accordance with the requirements of the AIM rules.
6. Use of our report
This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the AIM Rule 18. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this 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 the conclusions we have reached.
Nexia Smith & Williamson
Statutory Auditor
Chartered Accountants
25 Moorgate
London
EC2R 6AY
Condensed Consolidated Statement of Comprehensive Income
Six months to 30 Sep 19 Six months to 30 Sep 18 Year ended (unaudited) (unaudited) 31 Mar 19 (audited) Note GBP'000 GBP'000 GBP'000 ---------------------------------------------- ----- ------------------------ ------------------------ ----------- Rental income 5,853 4,853 10,771 Property operating expenses (46) (431) (694) Net Rental Income 5,807 4,422 10,077 Administrative and other expenses (1,045) (840) (1,833) Long-term incentive plan charge 8 (60) (59) (119) ---------------------------------------------- ----- ------------------------ ------------------------ ----------- Operating profit before changes in fair value of investment properties 4,702 3,523 8,125 Changes in fair value of investment property 10 5,636 6,658 13,352 Profit/(Loss) on disposal of investment property 582 (64) 160 ---------------------------------------------- ----- ------------------------ ------------------------ ----------- Operating profit 10,920 10,117 21,637 Finance income 7 25 29 Finance expense 6 (1,272) (923) (2,210) Changes in fair value of interest rate derivatives 12 (612) 63 (709) ---------------------------------------------- ----- ------------------------ ------------------------ ----------- Profit before taxation 9,043 9,282 18,747 ---------------------------------------------- ----- ------------------------ ------------------------ ----------- Tax credit/(charge) for the period - - - ---------------------------------------------- ----- ------------------------ ------------------------ ----------- Profit and total comprehensive income (attributable to the shareholders) 9,043 9,282 18,747 ---------------------------------------------- ----- ------------------------ ------------------------ ----------- Earnings per share - basic 7 10.31p 11.14p 22.12p Earnings per share - diluted 7 10.31p 11.08p 22.10p EPRA earnings per share - diluted 7 3.92p 3.13p 7.01p
Condensed Consolidated Statement of Financial Position
30 Sep 19 30 Sep 18 31 Mar 19 (unaudited) (unaudited) (audited) Note GBP'000 GBP'000 GBP'000 ------------------------------- ----- ------------- ------------- ----------- Non-current assets Investment property 10 196,900 173,840 186,420 Intangible assets 20 25 22 Interest rate derivatives 12 - 82 - ------------------------------- ----- ------------- ------------- ----------- Total non-current assets 196,920 173,947 186,442 Current assets Trade and other receivables 4,189 1,284 1,531 Cash and cash equivalents 9,103 4,756 9,760 ------------------------------- ----- ------------- ------------- ----------- Total current assets 13,292 6,040 11,291 ------------------------------- ----- ------------- ------------- ----------- Total assets 210,212 179,987 197,733 ------------------------------- ----- ------------- ------------- ----------- Current liabilities Trade and other payables (2,762) (1,457) (1,808) Deferred rental income (2,698) (2,288) (2,388) ------------------------------- ----- ------------- ------------- ----------- Total current liabilities (5,460) (3,745) (4,196) Non-current liabilities Long-term rental deposits (953) (949) (951) Lease obligation (1,865) - - Interest rate derivatives (1,302) - (690) Bank borrowings 11 (74,522) (63,321) (71,420) ------------------------------- ----- ------------- ------------- ----------- Total non-current liabilities (78,642) (64,270) (73,061) ------------------------------- ----- ------------- ------------- ----------- Total liabilities (84,102) (68,015) (77,257)
------------------------------- ----- ------------- ------------- ----------- Total net assets 126,110 111,972 120,476 ------------------------------- ----- ------------- ------------- ----------- Equity Share capital 13 878 861 877 Share premium 14 93,937 92,283 93,877 Share warrant reserve - 62 14 Other reserves 254 134 194 Retained earnings 31,041 18,632 25,514 ------------------------------- ----- ------------- ----------- Total equity 126,110 111,972 120,476 ------------------------------- ----- ------------- ------------- ----------- NAV per share basic 16 143.71p 130.08p 137.39p NAV per share diluted 16 143.71p 129.30p 137.18p EPRA NAV - diluted 16 145.20p 129.21p 137.96p
Condensed Consolidated Cash Flow Statement
Six months to 30 Sep 19 Six months to 30 Sep 18 Year ended 31 Mar 19 (unaudited) (unaudited) (audited) Note GBP'000 GBP'000 GBP'000 ------------------------------------ ----- ------------------------ ------------------------ --------------------- Cash flows from operating activities Profit for the period (attributable to shareholders) 9,043 9,282 18,747 Add: depreciation and amortisation 3 - 4 Less: changes in fair value of investment property (5,636) (6,658) (13,352) Add/(less): changes in fair value of interest rate derivatives 612 (63) 709 (Less)/add: (profit)/loss on disposal of investment property (582) 64 (160) Less: finance income (7) (25) (29) Add: finance expense 1,272 923 2,210 Long-term investment plan 60 59 119 Increase in trade and other receivables (2,658) (699) (946) Increase in trade and other payables 1,265 844 1,291 ------------------------------------ ----- ------------------------ ------------------------ --------------------- Cash generated from operations 3,372 3,727 8,593 Net cash flow generated from operating activities 3,372 3,727 8,593 ------------------------------------ ----- ------------------------ ------------------------ --------------------- Investing activities Purchase of investment properties 10 (20,488) (38,502) (52,088) Disposal of investment properties 18,091 3,101 11,030 Purchase of intangible assets - (26) (26) Net cash flow used in investing activities (2,397) (35,427) (41,084) ------------------------------------ ----- ------------------------ ------------------------ --------------------- Financing activities Proceeds from issue of Ordinary Share capital - 21,268 20,400 Proceeds from issue of warrant shares 59 - 2,430 Cost of share issue - (664) (664) Bank borrowings drawn 10,771 17,200 28,931 Bank borrowings repaid (7,667) (1,361) (4,930) Loan arrangement fees paid (165) (351) (610) Interest paid (1,109) (762) (1,853) Interest received 7 25 29 Dividends paid to equity holders (3,528) (2,179) (4,762) ------------------------------------ ----- ------------------------ ------------------------ --------------------- Net cash flow generated (used in)/generated from financing activities (1,632) 33,176 38,971 ------------------------------------ ----- ------------------------ ------------------------ --------------------- Net (decrease)/increase in cash and cash equivalents for the period (657) 1,476 6,480 ------------------------------------ ----- ------------------------ ------------------------ --------------------- Cash and cash equivalents at start of period 9,760 3,280 3,280 ------------------------------------ ----- ------------------------ ------------------------ --------------------- Cash and cash equivalents at end of period 9,103 4,756 9,760 ------------------------------------ ----- ------------------------ ------------------------ ---------------------
Condensed Consolidated Statement of Changes in Equity
Share Share Share Other Retained Total capital premium warrant reserves earnings reserves Six months ended GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 30 September 2019 (unaudited) --------------------------- --------- --------- ---------- ---------- ---------- -------- 1 April 2019 877 93,877 14 194 25,514 120,476 --------------------------- --------- --------- ---------- ---------- ---------- -------- Profit for the period - - - - 9,043 9,043 --------------------------- --------- --------- ---------- ---------- ---------- -------- Total comprehensive income - - - - 9,043 9,043 Dividends to shareholders - - - - (3,528) (3,528) Long-term incentive plan - - - 60 - 60 Exercise of warrant shares 1 60 (2) - - 59 Expiry of warrant shares - - (12) - 12 - 30 September 2019 878 93,937 - 254 31,041 126,110 --------------------------- --------- --------- ---------- ---------- ---------- -------- Six months ended 30 September 2018 (unaudited) 1 April 2018 681 71,832 89 75 11,529 84,206 --------------------------- --------- --------- ---------- ---------- ---------- -------- Profit for the period - - - - 9,282 9,282 --------------------------- --------- --------- ---------- ---------- ---------- -------- Total comprehensive income - - - - 9,282 9,282 Dividends to shareholders - - - - (2,179) (2,179) Long-term incentive plan - - - 59 - 59 Issue of Ordinary Shares 171 19,565 - - - 19,736 Exercise of warrant shares 9 886 (27) - - 868 30 September 2018 861 92,283 62 134 18,632 111,972 --------------------------- --------- --------- ---------- ---------- ---------- -------- Year ended 31 March 2019 (audited) --------------------------- --------- --------- ---------- ---------- ---------- -------- 1 April 2018 681 71,832 89 75 11,529 84,206 --------------------------- --------- --------- ---------- ---------- ---------- -------- Profit for the period - - - - 18,747 18,747 --------------------------- --------- --------- ---------- ---------- ---------- --------
Total comprehensive income - - - - 18,747 18,747 Dividends to shareholders - - - - (4,762) (4,762) Long-term incentive plan - - - 119 - 119 Issue of Ordinary Shares 171 19,565 - - - 19,736 Exercise of warrant shares 25 2,480 (75) - - 2,430 31 March 2019 877 93,877 14 194 25,514 120,476 --------------------------- --------- --------- ---------- ---------- ---------- --------
Notes to the Interim Financial Statements
1. Corporate information
Urban Logistics REIT plc (the "Company") and its subsidiaries (the "Group") carry on the business of property lettings throughout the United Kingdom. The Company is a public limited company incorporated and domiciled in England and Wales and listed on AIM, part of the London Stock Exchange. The registered office address is 124 Sloane Street, London, SW1X 9BW.
2. Basis of preparation
The interim financial information in this report has been prepared using accounting policies consistent with IFRS as adopted by the European Union. IFRS is subject to amendment and interpretation by the International Accounting Standards Board (IASB) on the IFRS Interpretations Committee and there is an ongoing process of review and endorsement by the European Commission. The financial information has been prepared on the basis of IFRS that the Directors expect to be adopted by the European Union and applicable as at 30 September 2019. The Group has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing the interim financial information.
The Group's financial information has been prepared on a historical cost basis, except for investment property and derivative interest rate caps which have been measured at fair value.
The functional currency of the Group is considered to be pounds sterling as this is the currency of the primary environment in which the Group operates.
Non-statutory financial statements
Financial information contained in this document does not constitute statutory accounts for the year ended 31 March 2019 within the meaning of Section 434 of the Companies Act 2006. The statutory accounts for the year ending 31 March 2019 have been delivered to the Registrar of Companies. The audit report was unqualified and did not contain a statement under Section 498 of the Companies Act 2006 nor did it include references to any matters to which the auditor drew attention by way of emphasis.
Going concern
The Directors have reviewed the current and projected financial position of the Group, making reasonable assumptions about future trading performance. As part of the review, the Group has considered its cash balances, its debt maturity profile, including undrawn facilities, and the long-term nature of the tenant leases.
On the basis of this review, and after making due enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Interim Report and financial statements.
Standards in issue and effective from 1 April 2019
IFRS 16: Leases
The Group has adopted IFRS 16: Leases for the six months ended 30 September 2019. On adoption the Group initially recognises the lease liability at the present value of the remaining lease payments, discounted using the Group's weighted average cost of debt. The associated right-of-use "(ROU)" assets were measured equal to the lease liability.
The leases are comprised of Head leases: A small proportion of the investment properties owned by the Group are situated on land held through leasehold arrangements, as opposed to the Group owning the freehold. The remaining lease terms for the leasehold arrangements range between 124 to 131 years.
The Balance Sheet impact of recognising the lease liability and associated ROU asset at 30 September 2019 is set out below. Opening balances have not been restated as the impact at 31 March 2019 was not material.
30 Sep 19 (unaudited) GBP'000 -------------------------------------------------------- -------------- Investment property (ROU asset) 1,865 Non-current Trade and other Payables (lease liability) 1,865
As the head leases meet the definition of investment property, it is initially recognised in accordance with IFRS 16, and then subsequently accounted for as investment property in accordance with IAS 40 and the Group's accounting policy.
3. Significant accounting judgements, estimates and assumptions
The preparation of the financial statements in conformity with the generally accepted accounting practices requires management to make estimates and judgements that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the statement of financial position date and the reported amounts of revenue and expenses during the reporting period.
Business combinations
The Group has acquired companies that own real estate. At the time of acquisition, the Group considers whether each acquisition represents the acquisition of a business or the acquisition of an asset. The Group accounts for an acquisition as a business combination where an integrated set of activities is acquired in addition to the property.
Where such acquisitions are not judged to be the acquisition of a business, they are not treated as business combinations. Rather the cost to acquire the corporate entity is allocated between identifiable assets and liabilities of the entity based upon their relative fair values at the acquisition date. Accordingly, no goodwill or additional deferred tax arises.
Long-term incentive plan
In determining the fair value of the long-term incentive plan and the related charge to the Statement of Comprehensive Income, the Group makes assumptions about future events and market conditions. In particular, judgement must be formed as to the likely number of shares that will vest, and the fair value of each award granted.
The fair value is determined using a valuation model which is dependent on a number of assumptions of the Group's future dividend policy and the future volatility in the price of the Group's shares. Such assumptions are based on publicly available information and reflects market expectation. Different assumptions about these factors to those made by the Group could materially affect the reported value of the long-term investment plan.
Details of the Group's long-term incentive plan can be found in note 8.
Fair value of investment property
The fair value of investment property is market value as determined on a half-yearly basis, to be the estimated amount for which a property should exchange on the date of the valuation in an arm's length transaction. Each property has been valued on an individual basis. The valuers use recognised valuation techniques and the principles of IFRS 13. The valuations have been prepared in accordance with RICS Valuation - Global Standards July 2017 (the "Red Book"). Factors reflected include current market conditions, annual rentals, lease lengths and location. The significant methods and assumptions used by the valuers in estimating the fair value of investment property are set out in note 10.
4. Principal accounting policies
The principal accounting policies applied in the preparation of these financial statements are consistent with those applied within the Company's Annual Report and Financial Statements for the year ended 31 March 2019, apart from IFRS 16: leases which is applied as below:
Leases
At inception, the Group assesses whether a contract is or contains a lease. This assessment involves the exercise of judgement about whether the Group obtains substantially all the economic benefits from the use of that asset, and whether the Group has the right to direct the use of the asset.
The Group recognises a right-of-use ("ROU") asset and a corresponding lease liability at the commencement date of the lease. The ROU asset is initially measured based on the present value of lease payments, plus initial direct costs and the cost of obligations to refurbish the asset, less any incentives received.
Lease payments generally include fixed payments and variable payments that depend on an index (such as an inflation index). When the lease contains an extension or purchase option that the Group considers reasonably certain to be exercised, the cost of the option is included in the lease payments.
Each lease payment is allocated between the liability and finance cost. The lease payments are discounted using the interest rate implicit in the lease if that rate can be readily determined or if not, the incremental borrowing rate is used. The finance cost is charged to profit or loss over the lease period so as to produce a constant rate of interest on the remaining balance of the liability for each period.
As the head leases meet the definition of investment property, it is initially recognised in accordance with IFRS 16, and then subsequently accounted for as investment property in accordance the Group's accounting policy. After initial recognition the ROU head lease asset is subsequently carried at fair value and the valuation gains and losses recognised within 'Realised and unrealised property gain' in the Income Statement.
ROU assets are included in the heading Non-current assets, and the lease liability included in the heading non-current liabilities on the Balance Sheet.
Where the ROU asset relates to land or property that meets the definition of investment property under IAS 40, the ROU assets are included in the heading Investment properties, and the lease liability in the heading Non-current liabilities on the Balance Sheet.
5. Revenue
The Group is involved in UK property ownership and letting and is considered to operate in a single geographical and business segment. The total revenue of the Group for the year was derived from its principal activity, being that of property lettings.
For the interim period to 30 September 2019, one tenant accounted for 11% Group's gross rental income. This tenant is XPO Logistics, one of the largest providers of logistics services globally.
6. Finance expense
Six months Six months Year ended to 30 Sep to 30 Sep 31 Mar 19 18 19 (unaudited) (unaudited) (audited) GBP'000 GBP'000 GBP'000 ---------------------------------- -------------- -------------- ------------ Interest on bank borrowings 1,109 762 1,853 Amortisation of loan arrangement fees 163 161 357 ---------------------------------- -------------- -------------- ------------ 1,272 923 2,210 ---------------------------------- -------------- -------------- ------------
7. Earnings per share
The calculation of the basic earnings per share ("EPS") was based on the profit attributable to Ordinary Shareholders divided by the weighted average number of Ordinary Shares outstanding during the period, in accordance with IAS 33.
Six months Six months Year ended to 30 Sep to 30 Sep 19 18 (unaudited) (unaudited) 31 Mar 19 (audited) GBP'000 GBP'000 GBP'000 ------------------------------------- ------------- -------------- ------------ Profit attributable to Ordinary Shareholders Total profit (GBP'000) 9,043 9,282 18,747 ------------------------------------- ------------- -------------- ------------ Weighted average number of Ordinary Shares in issue 87,738,937 83,328,855 84,734,355 Basic earnings per share (pence) 10.31p 11.14p 22.12p ------------------------------------- ------------- -------------- ------------ Number of diluted shares under option/warrant - 439,140 89,866 Weighted average number of Ordinary Shares for the purpose of dilutive earnings per share 87,738,937 83,767,995 84,824,221 ------------------------------------- ------------- -------------- ------------ Diluted earnings per share (pence) 10.31p 11.08p 22.10p ------------------------------------- ------------- -------------- ------------ Adjustments to remove: Changes in fair value of investment property (GBP'000) (5,636) (6,658) (13,352) Changes in fair value of interest rate derivatives (GBP'000) 612 (63) 709 (Profit)/ loss on disposal of investment properties (582) 64 (160) ------------------------------------- ------------- -------------- ------------ EPRA earnings (GBP'000) 3,437 2,625 5,944 EPRA diluted earnings per share 3.92p 3.13p 7.01p ------------------------------------- ------------- -------------- ------------
8. Long-term incentive plan
The Company has a LTIP, accounted for as an equity settled share-based payment. At 30 September 2019, Pacific Industrial LLP, an affiliate of Pacific Capital Partners Limited, has subscribed for 1,000 B Ordinary Shares of GBP0.01 each and 1,000 C Ordinary Shares of GBP0.01 each issued in Pacific Industrial & Logistics Limited, a subsidiary of the Company.
Fair value Charge at grant for the period Date options granted Class of GBP'000 GBP'000 share ---------------------- ------------ ----------- --------- April 2016 B Ordinary 307 49 August 2017 C Ordinary 131 11 60 ----------------------------------- ----------- ---------
The LTIP has an EPRA NAV element and a share price element and will be assessed on: i) 30 September 2020 (the "First Calculation Date") and ii) 30 September 2023 (the "Second Calculation Date"). The EPRA NAV element will be 10 per cent. of the excess of the EPRA NAV per Ordinary Share return, including dividends, over an annualised 9 per cent. hurdle, multiplied by the number of Ordinary Shares in issue at the relevant calculation date. The share price element will be 10 per cent. of the excess of the share price return, including dividends, over an annualised 9 per cent. hurdle, multiplied by the number of Ordinary Shares in issue at the relevant calculation date.
At the First Calculation Date, the share price element and the EPRA NAV element hurdle will be calculated by reference to the Placing Price of 115.0 pence.
At the Second Calculation Date, if a payment has been made at the First Calculation Date under either element, the hurdle for that element at the Second Calculation Date will be re-set to be based on the prevailing EPRA NAV per Ordinary Share/share price as at the First Calculation Date (as applicable). If no payment is made under an element at the First Calculation Date, then the hurdle for that element will continue to be calculated by reference to the Placing Price of 115.0 pence.
The LTIP will be paid in shares or, at the Board's discretion, in cash.
9. Dividends
Six months Six months Year ended to 30 Sep to 30 Sep 31 Mar 19 18 19 (unaudited) (unaudited) (audited) GBP'000 GBP'000 GBP'000 -------------------------------- -------------- -------------- ------------ Ordinary dividends paid 2018: Third interim dividend: 3.20p per share - 2,179 2,180 2018: Fourth interim dividend: 0.02p per share - - 17 2019: First interim dividend: 2.98p per share - - 2,565 2019: Second interim dividend: 3,528 - - 4.02p per share Total dividends paid 3,528 2,179 4,762 -------------------------------- -------------- -------------- ------------
The Company has declared a first interim dividend of 3.75p pence per Ordinary Share in respect of the financial year ended 31 March 2020. The total dividend of 3.75p pence per Ordinary Share will be paid as a property income distribution ("PID") on 20 December 2019 to shareholders on the register at the close of business on 22 November 2019. The ex-dividend date will be 21 November 2019.
10. Investment properties
In accordance with IAS 40 "Investment Property", investment property is carried at its fair value as determined by an external valuer. This valuation has been conducted by CBRE and has been prepared as at 30 September 2019, in accordance with the RICS valuation - Professional Standards UK January 2017 (the "Red Book").
The valuations have been prepared in accordance with those recommended by the International Valuation Standards Committee and are consistent with the principles in IFRS 13.
Investment Investment Total properties properties freehold leasehold GBP'000 GBP'000 GBP'000 ----------------------------------------- ------------ ------------ --------- As at 1 April 2019 137,690 48,730 186,420 Property additions through acquisitions 15,784 4,704 20,488 Property additions through recognition of Right of Use Asset - 1,865 1,865 Disposals in year (9,482) (8,027) (17,509) Change in fair value during the period 5,432 204 5,636 ----------------------------------------- ------------ ------------ --------- As at 30 September 2019 149,424 47,476 196,900 ----------------------------------------- ------------ ------------ ---------
Total rental income for the interim period recognised in the Condensed Consolidated Statement of Comprehensive Income amounted to GBP5.9 million (H1 Sep 18: GBP4.9 million).
11. Bank borrowings and reconciliation of liabilities to cash flows from financing activities
Bank borrowings GBP'000 -------------------------------------------------- ---------------- Balance at 1 April 2019 71,420 Bank borrowings drawn in the year 10,771 Bank borrowings repaid in the year (7,667) Loan arrangement fees paid (165) Non-cash movements: Amortisation of loan arrangement fees 163 -------------------------------------------------- ---------------- Total bank borrowings per the Consolidated Group Statement of Financial Position 74,522 -------------------------------------------------- ---------------- Being: Drawn debt 75,698 Unamortised loan arrangement fees (1,176) -------------------------------------------------- ---------------- Total 74,522 -------------------------------------------------- ----------------
On 5 December 2018, the Group, Santander UK plc and Barclays Bank plc entered into a facility agreement pursuant to which Santander UK plc has agreed to provide the Group with a loan facility of GBP72.6 million for a term of five years.
On 23 August 2019, the loan facility was renegotiated so the Group could draw a further GBP10.8m. At 30 September 2019 the amount of drawn debt was GBP75.7m.
12. Interest rate derivatives
The Group has used interest rate swaps to mitigate exposure to interest rate risk. The total fair value of these contracts are recorded in the Statement of Financial Position. The interest rate derivatives are marked to market by the relevant counterparty banks on a quarterly basis in accordance with IFRS 9. Any movement in the fair value of the interest rate derivatives are taken to finance costs in the Statement of Comprehensive Income.
Six months Six months Year ended to 30 Sep to 30 Sep 31 Mar 19 18 19 (unaudited) (unaudited) (audited) GBP'000 GBP'000 GBP'000 ------------------------------------ -------------- -------------- ------------ Non-current assets/(liabilities): derivative interest rate swaps: At beginning of period (690) 19 19 Change in fair value in the period (612) 63 (709) ------------------------------------ -------------- -------------- ------------ (1,302) 82 (690) ------------------------------------ -------------- -------------- ------------
13. Share capital
30 Sep 19 30 Sep 19 (unaudited) (unaudited) Number GBP'000 -------------------------------- -------------- -------------- Issued and fully paid up at 1p each 87,751,604 878 -------------------------------- -------------- -------------- At beginning of period 87,690,604 877 Issued and fully paid - 10 May 2019 61,000 1 At 30 September 2019 87,751,604 878 -------------------------------- -------------- --------------
On 10 May 2019, 61,000 warrant shares were redeemed for an issue price of 97.0 pence per share.
14. Share premium
Share premium relates to amounts subscribed for share capital in excess of nominal value less any associated issue costs that have been capitalised.
Six months Six months Year ended to 30 Sep to 30 Sep 31 Mar 19 (unaudited) 18 19 (unaudited) (audited) GBP'000 GBP'000 GBP'000 ------------------------------- ---------------- -------------- ----------- Balance brought forward 93,877 71,832 71,832 Share premium on the issue of Ordinary Shares 60 21,115 22,709 Share issue costs - (664) (664) ------------------------------- ---------------- -------------- ----------- 93,937 92,283 93,877 ------------------------------- ---------------- -------------- -----------
15. Related party transactions
The terms and conditions of the Investment Management Agreement are described in the Management Engagement Committee Report. During the interim period, the amount paid for services provided by Pacific Capital Partners Limited (the "Manager") totalled GBP587,568.
Long-term incentive plan
Under the terms of the Company's long-term incentive plan, at 30 September 2019 Pacific Industrial LLP, an affiliate of Pacific Capital Partners Limited, has subscribed for shares in Pacific Industrial & Logistics Limited, a subsidiary of Urban Logistics REIT plc. Further details have been provided in note 8.
Acquisition of investment properties
During the interim period, the Group incurred fees totalling GBP315,570 from M1 Agency LLP, a partnership in Richard Moffitt is a member. These fees were incurred in the acquisition and sale of investment properties.
For the transactions listed above, Richard Moffitt's benefit is derived from the profit allocation he receives from M1 Agency LLP as a member and not from the transaction.
The Board, with the assistance of the Manager, and excluding Richard Moffitt, review and approve each fee payable to M1 Agency LLP, and ensure the fees are in line with market rates and on standard commercial property terms.
16. Net asset value per share
Basic NAV per share is calculated by dividing net assets in the Consolidated Statement of Financial Position attributable to Ordinary Shareholders by the number of Ordinary shares at the end of the period.
Net assets have been calculated as follows:
30 Sep 19 30 Sep 18 31 Mar 19 (unaudited) (unaudited) (audited) Net assets per Condensed Statement of Financial Position (GBP'000) 126,110 111,972 120,476 ----------------------------------------- -------------- -------------- ------------ Add: Cash received from issued share warrants (GBP'000) - 2,005 444 ----------------------------------------- -------------- -------------- ------------ Diluted NAV (GBP'000) 126,110 113,977 120,920 ----------------------------------------- -------------- -------------- ------------ Adjustment for: Fair value of interest rate derivatives (GBP'000) 1,302 (82) 690 ----------------------------------------- -------------- -------------- ------------ EPRA NAV (GBP'000) - basic 127,412 111,890 121,166 EPRA NAV (GBP'000) - diluted 127,412 113,895 121,610 ----------------------------------------- -------------- -------------- ------------ Ordinary shares: Number of Ordinary Shares in issue at period end 87,751,604 86,080,818 87,690,604 Number of Ordinary Shares for the purposes of dilutive Net Asset Value per share at period end 87,751,604 88,147,854 88,147,854 ----------------------------------------- -------------- -------------- ------------ Basic NAV 143.71p 130.08p 137.39p EPRA NAV - basic 145.20p 129.98p 138.17p ----------------------------------------- -------------- -------------- ------------ Diluted NAV 143.71p 129.30p 137.18p EPRA NAV - diluted 145.20p 129.21p 137.96p ----------------------------------------- -------------- -------------- ------------
Supplementary Information
i. EPRA performance measures summary
Six months Six months Year ended to 30 Sep to 30 Sep 31 Mar 19 18 19 (unaudited) (unaudited) (audited) GBP'000 GBP'000 GBP'000 ------------------------------------- ------------- ------------- ----------- EPRA EPS (diluted) 3.92p 3.13p 7.01p EPRA NAV per share (diluted) 145.20p 129.21p 137.96p EPRA triple NAV per share (diluted) 143.71p 129.30p 137.18p ------------------------------------- ------------- ------------- ----------- EPRA net initial yield 6.2% 6.1% 5.9% EPRA "topped up" net initial yield 6.7% 6.5% 6.1%
EPRA vacancy rate 0.0% 1.1% 0.0% EPRA cost ratio (including vacant property costs) 18.6% 26.2% 23.5% EPRA cost ratio (excluding vacant property costs) 18.5% 17.9% 17.5% ------------------------------------- ------------- ------------- -----------
ii. Income statement
Six months Six months Year ended to 30 Sep to 30 Sep 31 Mar 19 18 19 (unaudited) (unaudited) (audited) GBP'000 GBP'000 GBP'000 ---------------------------------- ------------- ------------- ----------- Gross rental income 5,853 4,853 10,771 Property operating costs (46) (431) (694) ---------------------------------- ------------- ------------- ----------- Net rental income 5,807 4,422 10,077 Administrative expenses (1,045) (840) (1,833) Long-term incentive plan charge (60) (59) (119) Operating profit before interest and tax 4,702 3,523 8,125 ---------------------------------- ------------- ------------- ----------- Net finance costs (1,265) (898) (2,181) Profit before tax 3,437 2,625 5,944 ---------------------------------- ------------- ------------- ----------- Tax on EPRA earnings - - - EPRA earnings 3,437 2,625 5,944 ---------------------------------- ------------- ------------- -----------
iii. Balance sheet
Six months Six months Year ended to 30 Sep to 30 Sep 31 Mar 19 18 19 (unaudited) (unaudited) (audited) GBP'000 GBP'000 GBP'000 -------------------------------- ------------- ------------- ----------- Investment property 196,900 173,840 186,420 Other net assets/(liabilities) 5,034 1,371 6,166 Net borrowings (74,522) (63,321) (71,420) -------------------------------- ------------- ------------- ----------- EPRA net assets 127,412 111,890 121,166 -------------------------------- ------------- ------------- -----------
iv. EPRA net initial yield and 'topped up' net initial yield
Six months to 30 Sep 19 Six months to 30 Sep 18 Year ended 31 Mar 19 (unaudited) (unaudited) (audited) GBP'000 GBP'000 GBP'000 ------------------------------------------- ------------------------ ------------------------ --------------------- Investment property - wholly owned 196,900 173,840 186,420 ------------------------------------------- ------------------------ ------------------------ --------------------- Completed property portfolio 196,900 173,840 186,420 Less: Development Properties (4,300) - - Right of Use Asset (1,865) - - ------------------------------------------- ------------------------ ------------------------ --------------------- Add: Allowance for estimated purchasers' costs 12,919 11,482 12,332 EPRA property portfolio valuation (A) 203,654 185,322 198,752 ------------------------------------------- ------------------------ ------------------------ --------------------- Annualised passing rent 12,737 11,520 11,883 Less irrecoverable property costs (63) (247) (247) ------------------------------------------- ------------------------ ------------------------ --------------------- Annualised net rents (B) 12,674 11,273 11,636 ------------------------------------------- ------------------------ ------------------------ --------------------- Contractual rental increased for rent free period 886 708 503 "Topped up" annualised net rent (C) 13,560 11,981 12,139 EPRA net initial yield (B/A) 6.2% 6.1% 5.9% EPRA "topped up" net initial yield (C/A) 6.2% 6.5% 6.1%
v. EPRA Cost Ratio
Six months Six months Year ended to 30 Sep to 30 Sep 31 Mar 19 18 19 (unaudited) (unaudited) (audited) GBP'000 GBP'000 GBP'000 --------------------------------------- ------------- ------------- ----------- Costs Property operating expenses (1) 46 431 694 Administrative expenses 1,045 840 1,833 Less: Ground rents (1) (1) (1) Total costs including vacant property costs (A) 1,090 1,270 2,526 --------------------------------------- ------------- ------------- ----------- Group vacant property costs (9) (403) (638) Total costs excluding vacant property costs (B) 1,081 867 1,888 --------------------------------------- ------------- ------------- ----------- Gross rental income 5,853 4,853 10,771 Less: Ground rents (1) (1) (1) Total gross rental income (C) 5,852 4,852 10,770 --------------------------------------- ------------- ------------- ----------- Total EPRA cost ratio (including vacant property costs) (A/C) 18.6% 26.2% 23.5% Total EPRA cost ratio (excluding vacant property costs) (B/C) 18.5% 17.9% 17.5% --------------------------------------- ------------- ------------- -----------
1) Property operating expenses are cost of sales. These typically include Utilities, Business rates, Letting fees, and other direct costs.
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