Final Results
Helical Bar PLC
07 June 2007
7 June 2007
H E L I C A L B A R P L C
('Helical'/'Company'/'Group')
P r e l i m i n a r y R e s u l t s
For the year to 31 March 2007
HELICAL DOUBLES NET ASSET VALUE PER SHARE OVER THREE YEARS
Financial Highlights
• Adjusted diluted net asset value, including trading and development stock
surplus, up 21% to 374p per share (2006: 309p).
• Profit before tax of £60.1m (2006: £57.1m) - up 5%
• Gain on sale and revaluation of investment properties of £40.6m (2006:£43.6m)
• Valuation of investment properties up 14.4% (2006: 17.3%)
• Adjusted diluted earnings per share of 16.6p (2006: 12.2p) - up 36%
• Final dividend proposed of 2.75p per share (2006: 2.45p) - up 12%
Giles Weaver, Chairman, commented:
'As a specialist in adding value through development, refurbishment and
planning, Helical is not dependent on yield shift to deliver consistently good
returns. A 21% net asset value per share increase has led to a doubling of net
asset value per share over the last three years. We believe the diversity of
projects we have accumulated leave us well placed to outperform in the future'.
For further information, please contact:
Helical Bar plc 020 7629 0113
Michael Slade (Managing Director)
Nigel McNair Scott (Finance Director)
Address: 11-15 Farm Street, London W1J 5RS
Fax: 020 7408 1666
Website: www.helical.co.uk
Financial Dynamics 020 7831 3113
Stephanie Highett/Dido Laurimore
FINANCIAL HIGHLIGHTS
Year To Year To
31 March 31 March
Notes 2007 2006
£m £m
Net rental income 14.8 16.5
Development profits 13.6 4.6
Trading profits 2.1 13.4
Gain on investment properties 40.6 43.6
Profits before tax 60.1 57.1
Pence Pence
Basic earnings per share 58.0 54.7
Diluted earnings per share 53.7 51.8
Adjusted diluted earnings per share 1 16.6 12.2
Dividends per share (paid in year) 4.05 3.65
Adjusted diluted net assets 2 374 309
per share, including
trading and development
stock surplus
Adjusted diluted net assets 3 334 278
per share
£m £m
Value of investment portfolio 316.0 294.6
Trading and development stock at cost 110.8 86.1
Net borrowings 134.0 112.7
Net assets 282.2 230.1
Net gearing 47% 49%
1. Calculated in accordance with IAS 33 and the best practice
recommendations of the European Public Real Estate Association ('EPRA') (see
note 9)
2. Calculated in accordance with the best practice recommendations of
EPRA (see note 24).
3. As per 2, but excluding the adjustment for the fair value of
development stock.
Chairman's Statement
Helical has a history of producing good financial results and the year to 31
March 2007 is no exception. The 21% increase in net assets per share in the year
means that the Company has more than doubled its diluted EPRA net asset value
per share in the last three years.
This performance has been reflected in our share price which has increased by
over 150% over the same period.
Results
Profits before tax increased to £60.1m (2006: £57.1m) as higher development
profits and lower net finance costs exceeded reduced trading profits and gains
on investment properties. Adjusted diluted earnings per share increased to
16.6p (2006: 12.2p).
The gain on sale and revaluation of the investment portfolio was £40.6m (2006:
£43.6m) reflecting a like for like valuation increase of 14.4% (2006: 17.3%) and
sales of investment properties at 17.1% over book values.
The Group's diluted EPRA net asset value per share rose by 21% to 374p (2006:
309p). The directors' valuation of trading and development stock shows a
surplus of £36m (2006: £29m). Excluding this valuation, the adjusted diluted
net asset value per share rose by 20% to 334p (2006: 278p).
The Company's prospects for 2007/8 allow the Board to recommend to shareholders
a final dividend of 2.75p per share (2006: 2.45p), an increase of 12%. Under
IFRS dividends are accounted for once declared and, as a consequence, this final
dividend is not reflected in these accounts. However, taken with the interim
dividend paid in December 2006 of 1.60p (2006: 1.45p) it represents a total
dividend of 4.35p (2006: 3.90p), an increase of 12%.
The Board
In July 2006, John Southwell retired after almost 25 years involvement with the
Company, the majority of that time as Chairman of the Board. The Board thanks
John for his important contribution to the success of the Company and wishes him
well in his retirement. Wilf Weeks is to be congratulated on receiving an OBE
for services to the Arts in London.
Outlook
The Company's consistent success is derived from an ever-widening portfolio of
activities, many involving highly professional and specialist joint venture
partners who share in this success. As yield compression ceases and total
returns for the property market move into single figures, the diversification of
our activities will drive our performance over the next few years.
The Company is poised to benefit from a number of exciting schemes, whether
through major mixed use developments, change of planning use, retirement
villages and nursing homes, outsourcing, office and retail developments and many
other opportunities.
As a specialist in adding value through development, refurbishment and planning,
Helical is not dependent on yield shift to deliver consistently good returns. A
21% net asset value increase has led to a doubling of net asset value per share
over the last three years. We believe that the diversity of projects we have
accumulated leave us well placed to outperform in the future.
Giles Weaver
Chairman
7 June 2007
Managing Director's Statement
State of the Market
Recent investment performance data show that the commercial property market is
levelling off. The overall figures, however, mask a sharp contrast between
central London offices, which could produce double digit capital growth, and the
other sectors which are now showing little capital appreciation.
Helical's current stance is to adopt a relatively defensive approach to our
investment portfolio while we remain committed to buy trading and development
opportunities where we are continuing to find attractive margins.
Unlocking shareholder value in competitive markets requires increasingly
creative means. Helical is constantly reinventing itself and has established a
very successful model of setting up joint ventures with talented specialist
management teams. This augments our core business helping to keep Helical at
the forefront of the property market and continuing to outperform its peers.
Real Estate Investment Trusts (REIT)
The REIT legislation was enacted in 2006 and, from 1 January 2007, qualifying
listed property companies have been able to convert into REITs.
Companies in the new REIT asset class are required to maintain a far greater
percentage of their business devoted to investments than we would wish. We
believe that at this point in the current cycle, it is from development and
trading, rather than investment, whence the majority of our future profits will
flow. Conversion to a REIT is not appropriate for Helical. Our objective is to
take advantage of the flexibility that we retain to generate sufficient profits
net of tax to outperform the more tax efficient REITs.
Senior Management
A cornerstone on which Helical is built is the alignment of shareholders'
interests with those of the senior management of the Company. The Board of
Directors have always had a significant shareholding in Helical and at 31 March
2007 this shareholding stood at 17.6%. Including the shares held by the
Company's Employee Share Ownership Plan Trust ('ESOP') this shareholding is
23.8%. The average term of office for our talented team is almost 17 years for
our executive directors, with the equivalent for management below Board level
being over 11 years. I take this opportunity to express my thanks to the home
team and all our various joint venture partners for their contributions to these
results.
Michael Slade
Managing Director
Business Review
Our business
Helical Bar is a property development and investment company. We create
shareholder value through a wide variety of high margin activities with property
investment at our core. Whilst a profit centre in its own right, property
investment provides a stable income stream to cover all our overheads and
interest costs. Our spread of activities gives us the flexibility to deploy
capital rapidly across our business and focus on whatever opportunities offer
the best returns at different points of the property cycle.
Our goals
We seek to make excellent returns for our shareholders over the short, medium
and long term whilst avoiding the pitfalls of the commercial property cycle. We
aim to achieve this through a broadly based, diversified property business,
which has access to a very wide range of opportunities.
We do this with a small, long-serving management team who have a significant
proportion of their own wealth invested in a 18% stake in the company and have
no competing interests. We try to keep execution risk to a minimum, working
with first rate joint venture partners when we move into new areas of property
business.
Our performance
IPD (all monthly and quarterly valued funds) ungeared returns
Our unleveraged returns are measured against the industry benchmark produced by
IPD.
Total Returns %pa %pa %pa %pa %pa
Annualised over 1 yr 3 yrs 5 yrs 10 yrs 17 yrs
Helical 24.1 25.9 19.5 20.8 18.5
IPD Benchmark 15.8 17.8 14.9 13.3 9.7
Percentile rank 5 3 3 1 0
* '0' means the top ranked fund
The returns noted above take no account of the £36m (2006:£29m) surplus of
trading and development stock above book value arising from the directors'
valuation.
Investment Portfolio Valuation Yields
Initial Reversionary Equivalent True Equivalent
London offices 6.2% 7.0% 6.0% 6.3%
In town retail 3.2% 5.1% 5.1% 5.3%
Out of town retail 4.9% 5.0% 4.9% 5.1%
Industrial 6.1% 7.5% 7.4% 7.8%
Total 5.2% 6.4% 5.9% 6.2%
Portfolio Balance
Offices Offices Retail
Central South Retail Out of Change
London East In town town Industrial of use Total
Investment 32.8% 1.2% 20.4% 6.0% 8.9% 2.4% 71.7%
Trading & development - 2.6% 1.0% 2.3% 13.1% 9.3% 28.3%
Total 32.8% 3.8% 21.4% 8.3% 22.0% 11.7% 100.0%
Total Shareholder Return
Total Shareholder Return ('TSR') measures the return to shareholders from share
price movements and dividend income and is used to compare returns between
companies listed on the Stock Exchange.
Total Shareholder Return measured over
1 year 3 years 5 years 10 years 15 years 20 years
From From From From From From
31/03/2006 31/03/2004 31/03/2002 31/03/1997 31/03/1992 31/03/1987
%pa %pa %pa %pa %pa %pa
Helical Bar plc 9.7 % 37.2% 23.6% 24.0% 29.5% 19.2%
UK equity market 11.1 % 18.0% 8.6% 7.7% 10.8% 10.1%
Listed real estate 22.1% 31.7% 23.5% 14.7% 16.0% 10.8%
sector index
Direct property 15.6% 18.1% 15.5% 13.5% 12.1% 11.6%
Source: New Bridge Street Consultants/Datastream
Our approach - how we create value
Planning
We are specialists in unlocking value by obtaining planning consents for more
valuable uses.
This year we gained consent for a retirement village of 144 units on the site of
a disused hospital in Liphook, Hants, resulting in a £9 million increase in site
value.
We currently have brownfield sites in Cambridge, Horsham and Great Alne (west of
Stratford upon Avon) where we are seeking retirement village consents.
Residential use is being sought on industrial sites in Fleet and Whitstable and
on a greenfield site in Telford.
In Vauxhall, London we are working with the National Grid UK Pension Fund to
secure a large residential allocation on an industrial estate fronting the
Thames. Our biggest project is at White City where on behalf of a consortium of
landowners we are master planning 4.5 million sq ft of residential and
commercial space on 33 acres. In Milton Keynes we are in the process of gaining
consent for a 300,000 sq ft retail warehouse and leisure scheme and a trade park
on separate sites.
Mixed use development
In recent years we have sought to create more sustainable development with a
variety of complementary uses. In particular, we have incorporated residential
uses into a number of our schemes. These include 700 student housing units above
180,000 sq ft retail in Nottingham and 56 flats in our department store
conversion in Cardiff which were all sold on the first morning of the launch, a
year before completion. At C4.1 in Milton Keynes, with local developers
Abbeygate, we are building 440 flats above a new 110,000 sq ft Sainsbury
supermarket. These have been forward sold to Barratts and social landlord
Genesis. At Parkgate, Shirley the construction of an 80,000 sq ft Asda
supermarket together with 120,000 sq ft of retail and 200 residential units is
planned to commence in 2008. In Wolverhampton an 11 acre site has been divided
and sold into land parcels for residential, hotel, car showroom and public
houses with a listed building to be converted into a casino.
Office development
We have a twenty year track record of building Grade A Central London office
buildings, often in partnership with institutions and other landowners. We have
recently been appointed by Pace Investments (City) Limited to manage the
development in the City of 320,000 sq ft of offices pre-let to Man Group as
their new headquarters.
We are also partnering the National Grid UK Pension Fund on the refurbishment of
35,000 sq ft of offices and 23,000 sq ft of leisure and restaurants at
Clareville House SW1. At Mitre Square, EC3 we have obtained planning consent for
a 350,000 sq ft office scheme and plan to commence in 2008. At Bracknell we are
moving forward through planning a major mixed use scheme which will comprise
over 300,000 sq ft of offices and residential.
Office refurbishment
We like to breathe new life into unloved, empty office buildings in and around
central London introducing some design flair and creating new hubs or
communities of occupiers. In Battersea we recently converted an empty TV studio
into offices with a communal bar and meeting space, which is now let to over
twenty different businesses. We have just obtained planning consent to double
the floor space, building a further 50,000 sq ft on part of the car park.
Investment properties Rex House, SW1, Shepherds Building, W12 and 61 Southwark
Street, SE1 represent over £100 million of buildings that we have refurbished in
the past and retained for their growth potential.
Retail development
Through our joint ventures with Oswin and Overton, we have been building retail
parks and shopping centres for over a decade. Last month we completed a retail
park in Luton let to DFS, SCS, Carpetright, Harveys and sold to the Hercules
Unit Trust for £36m.
Planning consent is being sought for a 25,000 sq ft bulky goods retail warehouse
scheme in Crewe.
Retail asset management
Reconfiguring and combining small retail units enables us to attract desirable
new retailers into our retail centres. At the old Morgan's Department Store in
Cardiff we have created units for Borders, TK Maxx, Moss Bros and Rossiters. At
Letchworth we nearly doubled rental values over a three year period. We
introduced a dozen new retailers to the town more than doubling the capital
value and generating a near five-fold return on equity.
Industrial development
In partnership with Chancerygate we are building around 140 units totalling over
580,000 sq ft for onward sale to owner occupiers at two sites in Oxford and at
Southampton, Southall (West London) and Stockport. We are also building 93,000
sq ft of mainly industrial space but also trade counters, creche and a
convenience store in Hailsham with Quadrant Estates. In recent years we have
completed successful schemes in Slough with Chancerygate and in Cambridge,
Edenbridge and Harlow in partnership with Dencora. These schemes often include
sales of parcels of land for hotels, car showrooms and self-storage and the
development of trade counter schemes.
Retirement villages
As part of our planning business, we obtained retirement village consents and in
the past sold off the sites for development. At Cawston, Rugby we retained an
interest in the development as a consortium member and following its success we
have elected to build out our recently consented scheme at Liphook.
Outsourcing
Our outsourcing venture, The Asset Factor, has made good progress during the
year - evolving its positioning as an asset manager and property operator.
We have secured a 50% stake in an internal property management business in
partnership with Nelson Bakewell. Currently managing support services to a
portfolio of over 30 million square feet in over 600 locations; it is one of the
top three managers of multi- tenanted buildings in the UK. Our strategy is to
invest in new management, improved systems and best practice processes to create
and grow a premium branded, market leading property and facilities management
business.
We have also launched a new corporate services office business as a joint
venture with fast growing sector specialist Avanta. Our first surplus space deal
was signed in December 2006 with Prudential on 22,000 sq ft property in
Dukesbridge House in Reading. The facility has since been refurbished and
commenced operations in April 2007.
Poland
Helical Poland continues to make good progress.
Sosnica Retail Park, Gliwice, will comprise a 64,000 sq m retail park anchored
by a 12,000 sq m Carrefour hypermarket. The site is at the intersection of the
new A1 and A4 motorways and will be completed to coincide with the new junction
in the second half of 2009.
At Wroclaw, a retail scheme for 10,000 sq m is planned adjacent to the existing
Korona Retail Centre. Pre-lets have already been agreed with Electroworld and
Carpetright. Work will start on site at the end of 2007 and terms have been
agreed to forward sell the completed scheme to an Irish investor.
A number of other retail schemes are under consideration.
Held in the accounts as: I - Investment
D - Development
T - Trading
Properties sold / Description Helical share
projects completed
during year
Garden Square, Letchworth 150,000 sq ft shopping centre 95%
Rental values increased from £35 psf to £65 psf Zone A during I
ownership
Sold for more than double 2003 purchase price
Luton 80,000 sq ft retail park development 80%
Pre-let to DFS, Carpetright, Harveys, SCS D
Sold to Hercules for £36.2 million
over 20% profit on cost
Sandiacre, 145,000 sq ft industrial sold to Tesco for potential 75%
Nottingham supermarket development T
32% profit on cost over one year
Weston-super-Mare 29,000 sq ft retail warehouse development pre-let to Wickes 75%
and presold to Scottish Widows D
Completed October 2006
Profit over 40% on cost
St Austell 36,000 sq ft Homebase sold for circa 100% above 2002 purchase 75%
price I
Worthing 26,000 sq ft Wickes sold for 69% above 2003 purchase price 75%
I
Sawston, Cambridge Final sales completed of 65,000 sq ft of offices and 67%
industrial units developed for freehold sales. I/T
25% profit on cost
Portfolio - schedules
Held in the accounts as: I - Investment
D - Development
T - Trading
Mixed use Description Helical share
Developments
Morgan Department Store, 160,000 sq ft retail - Borders, TK Maxx, and Moss Bros. 100%
Cardiff Completion summer 2007. I
56 flats, all sold. Completion late 2007
Trinity Square, Nottingham 180,000 sq ft retail - Borders, TK Maxx, Dixons 65%
700 student units D
Forward sold to Morley for over £100m
Completion 2007
C4.1, Milton Keynes 110,000 sq ft Sainsbury's (forward sold) 50%
440 residential units (forward sold) D
35,000 sq ft of retail and offices.
Completion 2008
White City, London W12 Planning consent to be sought for 4.5 million sq ft of Consortium
commercial and residential on 33 acres landowner &
development
manager
D
Amen Corner, Bracknell Land and options held for a gateway office/mixed use 100%
development off A329M D
Bluebrick, Wolverhampton 11 acre site. Individual land sales completed for 208 75%
flats, 20,000 D
sq ft showroom, 88 bed hotel, 7,000 sq ft pub
A casino use is proposed for the remaining listed building
Ropemaker Park, Hailsham 70,000 sq ft light industrial, 27,000 sq ft trade counter, 50%
12,000 sq ft D
car showroom, 4,000 sq ft convenience store and 4,000 sq ft
creche
Construction started 2006
Leisure Plaza, Milton Keynes Resolution to grant planning consent for 165,000 sq ft ILVA 50%
store, 65,000 sq ft casino, 50,000 sq ft ice rink, plus a D
further 25,000 sq ft of retail
Tiviot Way, Stockport A planning application will be submitted in 2007 for 100,000 80%
sq ft D
industrial, 49,000 sq ft trade counter, 20,000 sq ft self
storage, 20,000 sq ft builders merchant and car showroom
Parkgate, Shirley, 200,000 sq ft retail - Asda (80,000 sq ft supermarket) 50%
Birmingham 200 residential units D
Construction to commence 2007
Hagley Road West, Quinton, 16,000 sq ft retail plus 15 residential units 75%
Birmingham Under construction D
Office Description Helical share
Developments
Mitre Square, London EC3 350,000 sq ft 50%
Due to start on site 2008 D
Riverbank House, London 320,000 sq ft pre-let to Man Group Development
EC4 Due to start on site 2007 management role
D
Clareville House, London Refurbishment of 35,000 sq ft offices plus 23,000 sq ft of Development
SW1 restaurant, nightclub and retail. management role
Construction started D
Battersea Studios (Phase 2), 50,000 sq ft of new office development commencing 75%
London SW8 I
Forestgate, Crawley Refurbishment of 24,000 sq ft completed 75%
Scheme for two new buildings of 21,000 sq ft and 18,000 sq D
ft
Industrial Description Helical share
Developments
Watlington Road, Cowley, 71,000 sq ft of industrials and offices of which 25,000 sq 80%
Oxford ft of offices sold and 27,000 sq ft of industrials sold or D
under offer
Longford Lane, Kidlington 140,000 sq ft of industrial units for freehold sales 80%
Construction of Phase 1 due to complete summer 2007 D
Scotts Road, Southall, West 250,000 sq ft of industrial units for freehold sales 80%
London Construction to commence 2007 D
Millbrook Trading Estate, 50,000 sq ft of industrial units, 65,000 sq ft of trade 80%
Southampton counters,
20,000 sq ft of self storage to commence 2007 plus a
further 4
acres of industrial land
Retail Description Helical share
developments
Hatters Retail Park, Luton 80,000 sq ft retail warehouse - DFS, SCS, Carpetright, 80%
Harveys, D
Paul Simon
Completion 2007
25,000 sq ft industrial to rear
Macon Way, Crewe 25,000 sq ft bulky goods scheme 50%
Subject to planning consent D
Gliwice, Poland 64,000 sq m out of town retail 50%
construction to commence 2007/08 D
Wroclaw, Poland 10,000 sq m out of town retail 50%
construction due to commence 2007 D
Retirement Village Description Helical share
Developments
Lime Tree Village, Rugby 154 bungalows, cottages and apartments being constructed in 33%
phases D
104 sold to date
Bramshott Place, Liphook Planning consent granted for 144 units resulting in an 90%
increase of over £9 million in site value D
Construction to commence 2007
Projects with change of Description Helical
use potential share
Maudslay Park, Great Alne 314,000 sq ft industrial estate on a 20 acre site subject 90%
to a planning appeal for 175 retirement home units D
Waterside, Fleet 54,000 sq ft of industrial property on 5 acres with 75%
planning application for 207 residential units I
Upper High Street, Epsom Site with residential consent subject to a planning appeal 100%
for an 80,000 sq ft supermarket D
Vauxhall, London SW8 In partnership with National Grid UK Pension Fund we Profit share
are seeking to gain an allocation for a large residential D
led mixed use development on a Thames-side industrial estate.
Ely Road, Milton, Cambridge 32,000 sq ft of industrial on 20 acres 90%
Planning application to be submitted in 2007 for 120 unit D
retirement village
Thanet Way, Whitstable 80,000 sq ft of industrial on 6 acres with potential for 90%
residential development D
Cherry Tree Yard, Faygate, Former sawmill on 15 acres 90%
Horsham
Planning application to be submitted in 2007 for 175 D
retirement home units
Arleston, Telford 19 acre greenfield site with residential potential 90%
D
Winterhill, Milton Keynes 28,000 sq ft of warehouses and offices with retail 50%
warehouse or trade counter potential I
Cardiff Royal Infirmary Vacant hospital on a peppercorn lease with residential 75%
potential I
Income producing assets
Offices Description Helical share
Rex House, Lower Regent 80,000 sq ft office building refurbished in 2001 100%
Street, London SW1 Short leasehold expiring 2035 I
Acquired vacant in 2000
Shepherds Building, 150,000 sq ft of studio offices refurbished in 2001 and let 90%
Shepherds Bush, London to over I
W14 50 tenants
Acquired vacant in 2000
61 Southwark Street, London 66,000 sq ft of offices that have been subject to a rolling 100%
SE1 refurbishment and a new penthouse floor I
Acquired 1998
Battersea Studios, London 55,000 sq ft of media style offices refurbished in 2006 75%
SW8 Acquired vacant in 2005 I
Amberley Court, Crawley Partial refurbishment of 31,000 sq ft 90%
Office campus I
Description Helical share
Retail -
in town
Morgan & Royal Arcades, 56 units to be subject to intensive management on 100%
Cardiff completion of I
the adjoining development at the David Morgan Department
Store
Acquired 2005
1-5 Queens Walk, East 37,000 sq ft of retail opposite a proposed new retail 87%
Grinstead scheme I
Acquired 2005
Glasgow Portfolio Three unit shop investments and part of a multi-let office 100%
block, I/T
all in Glasgow City Centre
acquired 2005
Retail - Description Helical share
out of town
Otford Road Retail Park, 43,000 sq ft with open A1 consent let to Wickes, Currys and 75%
Sevenoaks Carpetright I
Acquired 2003
Stanwell Road, Ashford 32,000 sq ft Focus DIY store 75%
Acquired 2004 I
215 Brixham Road, Paignton 24,000 sq ft Focus store with open A1 consent 67%
Acquired 2005 I
Industrial Description Helical share
Hawtin Park, Blackwood 251,000 sq ft estate, part vacant 100%
Acquired 2003 I
Fordham, Newmarket 70,000 sq ft of R&D space and offices on a 32 acre 53%
landscaped I
site let on a long lease
Acquired 2007
Westgate, Aldridge 208,000 sq ft part vacant 80%
Acquired 2006 I
Dales Manor, Sawston, 70,000 sq ft multi-let estate 67%
Cambridge Acquired 2003 I/D
Golden Cross, Hailsham 102,000 sq ft unit let on a long RPI lease 100%
Acquired 2001 I
Standard Industrial Estate, 50,000 sq ft estate, recently refurbished 60%
North Woolwich Acquired 2002 I
Bushey Mill Lane, Watford 24,000 sq ft income producing with development potential 80%
acquired 2006 D
Financial Review
Consolidated Income Statement
Profits
Profits before tax increased to £60.1m (2006: £57.1m) with higher development
profits, an increased contribution from the company's joint ventures and lower
net finance costs exceeding the reduction in trading profits and gains on
investment properties.
Adjusted profits before tax, which excludes the gains on sale and revaluation of
investment properties, increased to £19.5m (2006: £13.6m). Profits after tax
and minority interest increased to £52.1m (2006: £47.4m).
Rental income
Net rental income for the year fell to £14.8m (2006: £16.5m) reflecting, for a
second year, the sale of let investment and trading properties and their
replacement with vacant or partially let properties with refurbishment and
rental growth prospects. During the year £48m of investment and trading
properties yielding £2.1m of rental income were sold. £30m was used to add to
the investment portfolio, principally through the refurbishment of existing
properties, and £42m was used to purchase sites and properties to be
re-developed. Together these currently produce a passing rent of £1.0m. Rent
reviews and new lettings, net of lease expiries and rent free periods, added
rental income of £1.6m on the remaining portfolio.
Rental costs fell from £3.6m to £3.3m as vacant space at refurbished properties
began to be let.
Trading and other profits
Trading profits of £2.1m were down on last year (2006: £13.4m) and arose from
the sale of number of properties at Nottingham, Curtain Road, London EC2 and in
Glasgow.
Development profits
The development programme produced profits at the retail schemes at
Weston-super-Mare, Luton and Nottingham, office schemes at Ropemaker Place,
London EC2, Chertsey and Hailsham and industrial/offices schemes in Oxford and
Cambridge.
2007 2006 2005
Developments £ 000 £ 000 £ 000
Profits 13,587 4,594 12,664
Share of results of joint ventures
During the year the main contributor to profits was the mixed use scheme at C4.1
Milton Keynes.
Administrative expenses
Administrative expenses increased to £17.5m (2006:£16.6m), principally as the
result of an increased charge for share based payments. Administrative expenses,
before impairment of goodwill and executive bonuses, remained at £6.1m (2006:
£6.1m).
Gain on sale and revaluation of investment properties
During the year to 31 March 2007 the Group sold investment properties with book
values of £45.6m (2006: £57.6m) on which it made £7.5m (2006: £7.8m) of profit.
The properties sold included the shopping centre at Letchworth, retail
warehouses in St. Austell and Worthing and a number of small units in Glasgow.
The revaluation surplus for the year was £33.2m (2006: £35.7m).
Finance costs and finance income
Increases in interest rates on higher levels of debt during most of the year led
to an increase in interest costs. However, capitalised interest more than offset
the higher interest costs reducing net finance costs to £2.7m (2006: £7.4m).
Finance income earned on cash deposits remained constant at £1.3m (2006:£1.3m)
2007 2006 2005
Net finance costs £ 000 £ 000 £ 000
Interest payable on bank 8,437 7,638 8,330
Loans
Other interest payable 228 2,346 2,243
Finance arrangement costs 114 234 457
Interest capitalised (6,069) (2,797) (2,296)
2,710 7,421 8,734
Interest receivable (1,335) (1,295) (1,948)
Taxation
The tax charge for the year is less than the standard rate of 30% due to the use
of capital allowances and tax losses. It is expected that the tax charge in the
year to 31 March 2008 will be less than the standard rate of 30% due to the use
of capital allowances.
The deferred tax charge for the year reflects a provision for tax on revaluation
surpluses and on temporary differences between the carrying amount of assets and
liabilities in the financial statements and their corresponding tax bases in
accordance with IFRS.
Dividends
The Board is recommending to shareholders at the Annual General Meeting on 25
July 2007 a final dividend of 2.75p per share (2006: 2.45p) to be paid on 27
July 2007 to shareholders on the register on 29 June 2007. This final dividend,
amounting to £2.5m (2006:£2.2m) has not been included as a liability at 31 March
2007, in accordance with IFRS.
2007 2006 2005
Dividends pence pence pence
Interim 1.60 1.45 1.32
Prior period final 2.45 2.20 2.00
Total 4.05 3.65 3.32
In the year to 31 March 2005 a 400p per share dividend was paid to shareholders
holding 14,143,020 A ordinary 5p shares as part of the Return of Cash on 23
December 2004.
Earnings per share
Earnings per share in the year to 31 March 2007 were 58.0p (2006: 54.7p) per
share and on a diluted basis were 53.7p (2006: 51.8p) per share.
2007 2006 2005
Earnings per share pence Pence pence
Earnings per share 58.0 54.7 56.3
Diluted earnings per share 53.7 51.8 53.7
Diluted EPRA earnings per share 16.6 12.2 14.1
Diluted EPRA earnings per share excludes from earnings the IFRS effects of
including the gain on sale and revaluation of investment properties (net of tax)
and fair value movement on derivative financial instruments.
Consolidated balance sheet
Investment portfolio
During the year investment properties with a book value of £45.6m were sold and
partly replaced by £10.4m of new properties. In addition, around £18.6m of
capital expenditure was spent on refurbishing various office, industrial and
retail buildings. At 31 March 2007 there was a revaluation surplus of £33.2m
(2006: £35.7m) on the investment portfolio.
2007 2006 2005
Investment portfolio £ 000 £ 000 £ 000
Cost or valuation at 1 April 294,583 271,315 335,114
Additions at cost 28,965 40,230 26,957
Disposals (45,638) (57,564) (124,210)
Joint venture share of revaluation 4,938 4,869 3,357
Revaluation 33,180 35,733 30,097
Amortisation of finance lease (3) - -
Cost or valuation at 31 March 316,025 294,583 271,315
Net asset values
The performance of the Company in the year to 31 March 2007 has increased equity
shareholders funds, on which the net asset value per share is calculated, by
£52.1m. This has led to a 21% increase in diluted net assets per share to 307p
(2006: 253p). Taking into account the directors' valuation of trading and
development stock of £36m (2006: £29m), the diluted EPRA net assets per share
increased by 21% to 374p (2006: 309p).
2007 2006 2005
Net asset values per
ordinary share pence pence pence
Diluted - 1 307 253 205
Adjusted diluted 334 278 224
Diluted EPRA - 2 374 309 238
Diluted EPRA triple NAV - 3 346 284 219
1 - net asset value diluted for share options.
2 - net asset value diluted for share options and adding back deferred tax
on revaluation surpluses and capital allowances and fair value of
financial instruments and trading stock.
3 - net asset value as per 2 less the deferred tax on revaluation surpluses
and capital allowances.
Borrowings and financial risk
The Group's purchases of development sites have increased debt and, at 31 March
2007, net debt had increased from £112.7m to £134.0m.
Taken with an increase in net assets of £52.1m, the increase in net debt
combined to reduce the Group's net gearing from 49% to 47%.
2007 2006 2005
Net debt and gearing
Net debt £134.0m £112.7m £125.0m
Gearing 47% 49% 67%
The Group seeks to manage financial risk by ensuring that there is sufficient
financial liquidity to meet foreseeable needs and to invest surplus cash safely
and profitably. At the year end, Helical had £74m of undrawn bank facilities
and cash of £3.4m (2006: £10.1m). In addition it had £195m (2006: £158m) of
uncharged property on which the Group could borrow funds.
As at 7 June 2007, Helical's average interest rate was 6.4%.
Performance measures
In order to evaluate its overall performance against other small to mid-size
capital companies, both here and abroad, Helical looks at equity value added.
Equity value added
Year ended 31 March 2007 2006 2005
Capital employed £m 411 336 347
Return on capital % 21.6 19.7 24.2
Weighted average cost of capital % 7.7 7.0 6.7
Spread % 13.9 12.7 17.5
Equity value added £m 46.7 44.1 60.9
Nigel McNair Scott
Finance Director
Unaudited Consolidated Income Statement
For the year to 31 March 2007
Year To Year To
31 March 31 March
2007 2006
Notes £000 £000
Revenue 3 123,176 119,274
Net rental income 4 14,771 16,524
Trading profits 2,094 13,441
Development profits 13,587 4,594
Share of results of joint ventures 6,196 437
Other operating income 766 235
Gross profit before gain and sale on
investment properties 37,414 35,231
Gains on sale and revaluation of 5 40,637 43,551
investment properties
Gross profit 78,051 78,782
Administrative expenses 6 (17,544) (16,582)
Operating profit 60,507 62,200
Finance costs 7 (2,710) (7,421)
Finance income 1,335 1,295
Change in fair value of derivative financial
instruments 956 1,046
Profit before tax 60,088 57,120
Tax 8 (8,000) (9,676)
Profit after tax 52,088 47,444
- attributable to minority interests 300 (124)
- attributable to equity shareholders 51,788 47,568
Profit for the year 52,088 47,444
Basic earnings per share 9 58.0p 54.7p
Diluted earnings per share 9 53.7p 51.8p
Unaudited Consolidated Balance Sheet
At 31 March 2007
At At
31 March 31 March
2007 2006
Notes £000 £000
Non-current assets
Investment properties 10 316,025 294,583
Owner occupied property, 11 351 489
plant and equipment
Investment in joint ventures 6,188 295
Goodwill 12 30 68
322,594 295,435
Current assets
Land, developments and trading
Properties 13 110,815 86,076
Available-for-sale investments 14 912 66
Derivative financial instruments 345 -
Trade and other receivables 15 70,526 33,925
Cash and cash equivalents 16 3,389 10,135
185,987 130,202
Total assets 508,581 425,637
Current liabilities
Trade payables and other payables 17 (64,203) (49,506)
Tax liabilities (3,909) (3,394)
Borrowings 18 (31,560) (42,683)
(99,672) (95,583)
Non-current liabilities
Borrowings 18 (105,847) (80,160)
Derivative financial instruments - (610)
Deferred tax provision 8 (20,697) (19,005)
Obligations under finance leases 19 (179) (182)
(126,723) (99,957)
Total liabilities (226,395) (195,540)
Net assets 282,186 230,097
Unaudited Consolidated Balance Sheet
At 31 March 2007
At At
31 March 31 March
2007 2006
Notes £000 £000
Equity
Called-up share capital 20 1,222 1,209
Share premium account 23 42,520 42,490
Revaluation reserve 23 79,664 64,820
Capital redemption reserve 23 7,478 7,478
Other reserves 23 291 291
Retained earnings 23 157,006 120,948
Own shares held 22/23 (5,995) (7,139)
Equity shareholders' funds 282,186 230,097
Minority interests - -
Total equity 282,186 230,097
Net assets per share
Basic 24 311p 259p
Diluted 24 307p 253p
Adjusted Diluted 24 334p 278p
Diluted EPRA 24 374p 309p
Unaudited Consolidated Cash Flow Statement
For the year to 31 March 2007
Year To Year To
31 March 31 March 2006
2007
£000 £000
Cash flows from operating activities
Profit before tax 60,088 57,120
Depreciation 180 179
Gain on investment properties (40,637) (43,551)
Other non-cash items (6,294) 4,626
Cash flows from operations before changes in
working capital 13,337 18,374
Change in trade and other receivables (36,317) 3,232
Change in land, developments and trading properties (19,705) 11,989
Change in trade and other payables 14,828 (30,779)
Cash (outflow) / inflow from operations (27,857) 2,816
Finance costs (8,035) (10,256)
Finance income 574 1,295
Minority interest dividends paid (300) (3,545)
Dividends from joint ventures 303 2,337
Tax paid (2,602) (4,743)
(10,060) (14,912)
Cash flows from operating activities (37,917) (12,096)
Cash flows from investing activities
Purchase of investment property (27,772) (39,055)
Sale of investment property 53,446 65,991
Purchase of investments (4,164) -
Sale of investments 3,909 -
Purchase of shares by ESOP (5,084) (85)
Sale of plant and equipment 7 47
Purchase of plant and equipment (48) (140)
20,294 26,758
Cash flows from financing activities
Issue of shares 43 3,418
Borrowings drawn down 46,206 35,146
Borrowings repaid (31,616) (65,647)
Equity dividends paid (3,615) (3,127)
Return of cash-B share repurchase - (2,451)
Refinancing costs (141) (69)
10,877 (32,730)
Net decrease in cash and cash equivalents (6,746) (18,068)
Cash and cash equivalents at 1 April 2006 10,135 28,203
Cash and cash equivalents at 31 March 2007 3,389 10,135
Unaudited Consolidated Statement of Recognised Income and Expense
For the year to 31 March 2007
Year To Year To
31 March 31 March
2007 2006
£000 £000
Profit for the year 52,088 47,444
Fair value movements on available for-sale-investments (24) (14)
Total recognised income and expense for the year 52,064 47,430
Unaudited Notes to the Preliminary Announcement
1. Financial Information
The financial information contained in this report does not constitute statutory
accounts within the meaning of section 240 of the Companies Act 1985. The full
accounts for the year ended 31 March 2006, which received an unqualified report
from the Auditors, and did not contain a statement under s237(2) or (3) of the
Companies Act 1985, have been filed with the Registrar of Companies.
Financial statements for the year ended 31 March 2007 will be presented to the
Members at the Annual General Meeting on 25 July 2007. The auditors have
indicated that their report on these Financial Statements will be unqualified.
2. Principal Accounting Policies
Basis of preparation
The preliminary announcement has been prepared in accordance with International
Financial Reporting Standards ('IFRS') but does not contain sufficient
information to comply fully with IFRS. The Financial Statements to be presented
to Members at the 2007 AGM are expected to fully comply with IFRS.
The preliminary announcement has been prepared under the historical cost
convention as modified by the revaluation of investment properties, available
for sale investments and derivative financial instruments. The measurement and
principal accounting policies are set out below.
Basis of consolidation
The Group financial statements consolidate those of the Company and all of its
subsidiary undertakings drawn up to 31 March 2007. Subsidiary undertakings are
those entities over which the Group has the ability to govern the financial and
operating policies through the exercise of voting rights.
Unrealised gains on transactions between the Company and its subsidiaries and
between subsidiaries are eliminated. Unrealised losses are also eliminated
unless the transaction provides evidence of impairment of the asset transferred.
Revenue recognition
Property revenue consists of gross rental income on an accruals basis, together
with sales of trading and development properties, excluding sales of investment
properties. Rental income receivable in the period from lease commencement to
the earlier of lease expiry and any tenant option to break is spread evenly over
that period. Any incentive for lessees to enter into a lease agreement and any
costs associated with entering into the lease are spread over the same period.
Revenue in respect of investment and other income represents investment income,
fees and commissions earned on an accruals basis and profits or losses
recognised on investments held for the short-term. Dividends are recognised
when the shareholders' right to receive payment has been established. Interest
income is accrued on a time basis, by reference to the principal outstanding and
the effective interest rate.
A property is regarded as sold when the significant risks and returns have been
transferred to the buyer. For conditional exchanges, sales are recognised as
the conditions are satisfied.
Income tax
The charge for current taxation is based on the results for the year as adjusted
for items which are non-assessable or disallowed. It is calculated using rates
that have been enacted or substantively enacted by the balance sheet date. Tax
payable upon realisation of revaluation gains recognised in prior periods is
recorded as a current tax charge with a release of the associated deferred
taxation.
Deferred tax is provided using the balance sheet liability method in respect of
temporary differences between the book value and tax base of relevant assets and
liabilities.
Deferred tax is provided on all temporary differences.
Deferred tax is determined using tax rates that have been enacted or
substantively enacted by the balance sheet date and are expected to apply when
the related deferred tax asset is realised or the deferred tax liability is
settled. It is recognised in the Income Statement except when it relates to
items credited or charged directly to equity, in which case the deferred tax is
also dealt with in equity.
Investments
Investments are classified as available-for-sale investments or trading
investments dependent on the purpose for which they were acquired.
Available-for-sale investments, being investments intended to be held for an
indefinite period, are revalued to fair value at the balance sheet date. For
listed investments, fair value is the bid market listed value ruling at the
balance sheet date. Gains or losses arising from changes in fair value are
included in the revaluation reserve except to the extent that losses are
attributable to impairment, in which case they are recognised in the income
statement. Upon disposal, accumulated fair value adjustments are included in
the income statement.
Trading investments, acquired principally for the purpose of generating a profit
from short-term fluctuations in price, are included in current assets and
revalued to fair value. Realised and unrealised gains or losses arising from
changes in fair value are included in the income statement in the period in
which they arise.
Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at cost. For the
purposes of the cash flow statement, cash and cash equivalents comprise cash in
hand, deposits with banks, other short term, highly liquid investments with
original maturities of three months or less, net of bank overdrafts.
Investment in joint ventures
Entities whose activities are jointly controlled by the Group and by other
ventures independent of the Group are accounted for using the equity method of
accounting. Under IFRS the Group's share of the results and of the net assets
of the joint ventures are shown in the Consolidated Income Statement and
Consolidated Balance Sheet respectively.
Goodwill
Goodwill representing the excess of the cost of acquisition over the fair value
of the Group's share of identifiable net assets acquired, is capitalised and
reviewed annually for impairment. Goodwill is carried at cost less accumulated
impairment losses. Negative goodwill is recognised immediately after
acquisition in the income statement.
Depreciation
In accordance with IAS 40 on Investment Property, depreciation is not provided
for on freehold investment properties or on leasehold investment properties.
The Group do not own the freehold land and buildings which it occupies. Costs
incurred in respect of leasehold improvements to the Group's head office at
11-15 Farm Street, London W1J 5RS are capitalised and held as short term
leasehold improvements. Leasehold improvements, plant and equipment are stated
at cost less accumulated depreciation and any recognised impairment loss.
Residual values are re-assessed annually.
Depreciation is charged so as to write off the cost of assets less residual
value over their estimated useful lives, using the straight line method, on the
following basis:
Short leasehold improvements - 10% or length of lease if shorter
Plant and equipment - 25%
Investment properties
Investment properties are properties owned or leased by the group which are held
for long-term rental income and for capital appreciation. Investment properties
are initially recognised at cost and revalued at the balance sheet date to fair
value as determined by professionally qualified external valuers. In accordance
with IAS40, investment properties held under the leases are stated gross of the
recognised finance lease liability.
Gains or losses arising from changes in the fair value of investment properties
are included in other operating income in the income statement of the period in
which they arise.
In accordance with IAS 40, as the group uses the fair value model, no
depreciation is provided in respect of investment properties including integral
plant.
When the group redevelops an existing investment property for continued future
use as investment property, the property remains an investment property measured
at fair value and is not reclassified. Interest is capitalised before tax
relief until the date of practical completion.
Leases
Leases are classified according to the substance of the transaction. A lease
that transfers substantially all the risks and rewards of ownership to the
lessee is classified as a finance lease. All other leases are classified as
operating leases.
In accordance with IAS 40, finance and operating leases of investment property
are accounted for as finance leases and recognised as an asset and an obligation
to pay future minimum lease payments. The investment property asset is included
in the balance sheet at fair value, gross of the recognised finance lease
liability. Lease payments are allocated between the liability and finance
charges so as to achieve a constant financing rate.
Assets leased out under operating leases are included in investment property,
with rental income recognised on a straight-line basis over the lease term.
Land, developments and trading properties
Land, developments and trading properties held for sale are inventory and are
included in the balance sheet at the lower of cost and net realisable value.
Derivative financial instruments
Derivative financial assets and financial liabilities are recognised on the
Group's balance sheet when the Group becomes a party to the contractual
provisions of the instrument. The Group enters into derivative transactions
such as interest, caps and floors in order to manage the risks arising from its
activities. Derivatives are initially recorded at fair value and are
subsequently remeasured to fair value based on market prices, estimated future
cash flows and forward rates as appropriate. Any change in the fair value of
such derivatives is recognised immediately in the income statement as a finance
cost.
Share based payments
The Company provides share-based payments in the form of share options,
performance share plan awards and a share incentive plan.
All share-based payment arrangements granted after 7 November 2002 that had not
vested prior to 1 January 2005 are recognised in the financial statements. The
Company uses the Stochastic valuation model and the resulting value is amortised
through the Income Statement over the vesting period of the share-based
payments.
For the performance share plan and share incentive plan awards, where non-market
conditions apply, the expense is allocated over the vesting period, to the
Income Statement based on the best available estimate of the number of awards
that are expected to vest. Estimates are subsequently revised if there is any
indication that the number of awards expected to vest differs from previous
estimates.
Borrowing and borrowing costs
Interest bearing loans and overdrafts are recorded at fair value, net of finance
and other costs yet to be amortised. Finance and other costs incurred in
respect of the obtaining and maintenance of borrowings are accounted for on an
accruals basis and written-off to the Income Statement over the length of the
associated borrowings.
Borrowing costs directly attributable to the acquisition and construction of new
development and investment properties are added to the costs of such properties
until the earliest of:
• the date when the development or investment becomes fully let;
• the date when the income exceeds the outgoings; and,
• the date of completion of the development or investment.
All other borrowing costs are recognised in the income statement in the period
in which they are incurred.
Trade receivables
Trade receivables do not carry any interest and are initially recognised at fair
value and subsequently at amortised cost as reduced by appropriate allowances
for estimated irrecoverable amounts.
Trade and other payables
Trade and other payables are not interest bearing and are initially recognised
at fair value and subsequently at amortised cost.
Net asset value per share
Net asset values per share have been calculated in accordance with the best
practice recommendations of the European Public Real Estate Association
('EPRA').
Earnings per share
Earnings per share have been calculated in accordance with IAS 33 and the best
practice recommendations of EPRA.
Use of estimates and judgements
To be able to prepare accounts according to generally accepted accounting
principles, management must make estimates and assumptions that effect the asset
and liability items and revenue expense amounts recorded in the financial
accounts. These estimates are based on historical experience and various other
assumptions that management and the Board of Directors believe are reasonable
under the circumstances. The results of this form the basis for making
judgements about the carrying value of assets and liabilities that are not
readily available from other sources.
Areas requiring the use of estimates and critical judgement that may
significantly impact on the Group's earnings and financial position are revenue
and cost recognition on developments, valuation of investment properties,
calculation of deferred tax liabilities, calculation and assessment of
recoverability of deferred tax assets and the recognition of share-based payment
charges.
Dividends
Dividend distributions to the Company's shareholders are recognised as a
liability in the financial statements in the period in which dividends are
declared.
3. Revenue
Year To Year To
31 March 31 March 2006
2007 £000
£000
Rental income 18,044 20,102
Trading property sales 12,355 72,101
Developments 88,685 26,756
Other income 4,092 315
123,176 119,274
4. Net rental income
Year To Year To
31 March 31 March
2007 2006
£000 £000
Gross rental income 18,044 20,102
Rents payable (137) (489)
Other property outgoings (3,136) (3,089)
Net rental income 14,771 16,524
5. Gain on sale and revaluation of investment properties
Year To Year To
31 March 31 March
2007 2006
£000 £000
Net proceeds from the sale of investment
properties 53,446 65,992
Book value (note 10) (45,638) (57,565)
Lease incentive and letting costs adjustment (351) (609)
Gain on sale of investment properties 7,457 7,818
Revaluation gains on investment properties 33,180 35,733
Gain on sale and revaluation of investment properties 40,637 43,551
6. Administrative expenses
Year To Year To
31 March 31 March
2007 2006
£000 £000
Administrative expenses 17,544 16,582
Operating profit is stated after:
Staff costs 10,131 9,488
Share-based payments charge 4,578 3,458
Depreciation 180 179
Auditors' remuneration 135 137
Administrative expenses includes salaries and cash bonuses in respect of the
directors of £5,786,000 (2006: £5,666,000) plus cash bonuses payable to
directors arising out of their exercise of share options of £754,000 (2006:
£693,000).
7. Finance costs
Year To Year To
31 March 31 March
2007 2006
£000 £000
Interest payable on bank loans and overdrafts 8,437 7,638
Other interest payable and similar charges 228 2,346
Finance arrangement costs 114 234
Interest capitalised (6,069) (2,797)
Finance costs 2,710 7,421
8. Taxation
Year To Year To
31 March 31 March
2007 2006
£000 £000
The tax charge is based on the profit for the period and represents:
United Kingdom corporation tax at 30% (2006: 30%)
- Group corporation tax 6,449 5,983
- adjustments in respect of prior periods (141) -
Current tax charge 6,308 5,983
Deferred tax
-capital allowances (7) (804)
-other temporary differences (929) (872)
-revaluation surpluses 2,628 5,369
Deferred tax 1,692 3,693
Tax on profit 8,000 9,676
Deferred tax
Capital gains 23,555 20,927
Capital allowances 2,168 2,175
Other temporary differences (5,026) (4,097)
Deferred tax provision 20,697 19,005
9. Earnings per share
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number of
shares in issue during the year. Shares held by the ESOP, which has waived its
entitlement to receive dividends, are treated as cancelled for the purposes of
this calculation.
The calculation of diluted earnings per share is based on the basic earnings per
share, adjusted to allow for the issue of shares and the post tax effect of
dividends on the assumed exercise of all dilutive options.
The earnings per share are calculated in accordance with IAS 33 and the best
practice recommendations of the European Public Real Estate Association
('EPRA').
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below.
Year To Year To
31 March 31 March
2007 2006
000's 000's
Ordinary shares in issue 94,372 90,506
Weighting adjustment (5,028) (3,540)
Weighted average ordinary shares in issue for calculation of basic earnings 89,344 86,966
per share
Weighting adjustments 7,122 4,918
Weighted average ordinary share in issue for calculation of diluted earnings 96,466 91,884
per share
Earnings used for calculation of basic and diluted earnings per share 51,788 47,568
Basic earnings per share 58.0p 54.7p
Diluted earnings per share 53.7p 51.8p
Earnings used for calculation of basic and diluted earnings per share 51,788 47,568
Gain on sale and revaluation of investment properties (40,637) (43,551)
Fair value movement on derivative financial instruments (955) (1,046)
Deferred tax in respect of investment properties 2,621 4,565
Tax on profit on disposal of investment properties 3,191 3,632
Earnings used for calculation of diluted EPRA earnings per share 16,008 11,168
Diluted EPRA earnings per share 16.6p 12.2p
10. Investment properties
Freehold Leasehold Total Freehold Leasehold Total
31.03.07 31.03.07 31.03.07 31.03.06 31.03.06 31.03.06
£000 £000 £000 £000 £000 £000
Group
Fair value at 1 April 211,451 83,132 294,583 203,683 67,632 271,315
Additions at cost 32,445 1,458 33,903 39,800 5,300 45,100
Disposals (15,174) (30,464) (45,638) (57,565) - (57,565)
Revaluation surplus 24,974 8,206 33,180 25,533 10,200 35,733
Amortisation - (3) (3) - - -
Fair value at 31 March 253,696 62,329 316,025 211,451 83,132 294,583
Interest capitalised during the year in respect of the refurbishment of
investment properties amounted to £1,192,000 (2006: £300,000).
Interest capitalised in respect of the refurbishment of investment properties is
included in investment properties to the extent of £2,505,000 (2006:
£1,313,000).
11. Owner occupied property, plant and equipment
Short Vehicles Short Vehicles
leasehold and office Leasehold and office
improvements equipment Total Improvements equipment Total
31.03.07 31.03.07 31.03.07 31.03.06 31.03.06 31.03.06
£000 £000 £000 £000 £000 £000
Cost at 1 April 646 866 1,512 646 853 1,499
Additions at cost - 49 49 - 142 142
Disposals - (137) (137) - (129) (129)
Cost at 31 March 646 778 1,424 646 866 1,512
Depreciation at 1 April 505 518 1,023 458 501 959
Provision for the year 47 133 180 47 132 179
Eliminated on disposals - (130) (130) - (115) (115)
Depreciation at 31 March 552 521 1,073 505 518 1,023
Net book amount at 31 March 94 257 351 141 348 489
12. Goodwill
At At
31 March 31 March
2007 2006
£000 £000
Cost at 1 April 1,515 1,515
Additions - -
Cost at 31 March 1,515 1,515
Impairment at 1 April 1,447 1,333
Impairment for the year 38 114
Impairment at 31 March 1,485 1,447
Fair value at 31 March 30 68
13. Land, developments and trading properties
At At
31 March 31 March
2007 2006
Cost £000 £000
Development sites 109,165 76,762
Properties held as trading stock 1,650 9,314
110,815 86,076
The directors' valuation of trading and development stock showed a surplus of
£36m above book value at 31 March 2007 (2006: £29m).
Interest capitalised in respect of the development of sites is included in stock
to the extent of £4,523,000 (2006: £2,867,000). Interest capitalised during the
period in respect of development sites amounted to £4,877,000 (2006: £2,497,000)
During the year properties held as trading stock at 31 March 2006 with a book
value of £36,914,000 have been re-categorised as development sites.
14. Available-for-sale investments
At At
31 March 31 March
2007 2006
£000 £000
UK listed investments at fair value 12 66
Unlisted investment at fair value 900 -
912 66
15. Trade and other receivables
At At
31 March 31 March
2007 2006
£000 £000
Trade receivables 50,850 13,156
Other receivables 6,575 5,999
Prepayments and accrued income 13,101 14,770
70,526 33,925
16. Cash and cash equivalents
At At
31 March 31 March
2007 2006
£000 £000
Rent deposits and
cash held at managing agents 1,852 1,980
Cash secured against debt
and cash held at solicitors 1,045 189
Cash held to fund future development costs - 382
Cash deposits 492 7,584
3,389 10,135
17. Trade payables and other payables
At At
31 March 31 March
2007 2006
£000 £000
Trade payables 9,841 8,424
Other payables 8,552 7,372
Accruals and deferred income 45,810 33,710
64,203 49,506
18. Borrowings
At At
31 March 31 March
2007 2006
Bank overdraft and loans - maturity £000 £000
Due within one year 31,560 42,683
Due after more than one year 105,847 80,160
137,407 122,843
At At
31 March 31 March
2007 2006
Undrawn committed bank facilities £000 £000
Expiring in one year or less 44,200 45,000
Expiring in more than one year but not
more than two years 27,456 2,011
Expiring in more than two years 2,000 8,691
73,656 55,702
Interest Rates % Expiry At
31 March
2007
£000
Fixed rate borrowings
- fixed 9.050 Feb 2009 6,815
- swap rate plus bank margin 5.939 Sep 2009 14,324
- swap rate plus bank margin 6.231 Feb 2008 5,800
- swap rate plus bank margin 6,052 Jan 2011 4,200
- swap rate plus bank margin 5.341 Jun 2011 4,536
- swap rate plus bank margin 6,052 Nov 2010 5,200
Weighted average 6.189 Nov 2009 40,875
Floating rate borrowings 6.326 June 2009 96,802
Total borrowings 137,677
Deferred arrangement costs (270)
137,407
Floating rate borrowings bear interest at rates based on LIBOR.
Hedging
In addition to the fixed rates, borrowings are also hedged by the following
financial instruments:
Instrument Value Rate Start Expiry
£000 %
Current
- cap 80,000 7.000 Jan 2006 Sept 2009
Gearing At At
31 March 31 March
2007 2006
£000 £000
Total borrowings 137,407 122,843
Cash (3,389) (10,135)
Net borrowings 134,018 112,708
Net assets 282,186 230,097
Gearing 47% 49%
Net borrowings exclude the Group's share of borrowings in joint ventures of
£22,666,000 (2006: £11,718,000).
19. Obligations under finance leases
At At
31 March 31 March
2007 2006
£000 £000
Lease payments under finance leases fall due:
Not later than one year 14 14
Later than one year and not later than five years 46 46
Later than five years 119 122
Present value of finance lease obligations 179 182
20. Share capital
At At
31 March 31 March
2007 2006
£000 £000
Authorised 39,577 39,577
39,577 39,577
The authorised share capital of the Company is £39,576,626.60 divided into
ordinary shares of 1p each, 5.25p convertible cumulative redeemable preference #
shares 2012 of 70p each and deferred shares of 1/8p each
Allotted, called up and fully paid
- 95,719,432 ordinary shares of 1p each 957 944
- 212,145,300 deferred shares of 1/8 p each 265 265
1,222 1,209
As at 1 April 2006, the Company had 94,371,925 ordinary 1p shares in issue. On
30 June 2006, options over 654,792 ordinary 1p shares were exercised increasing
the issued share capital of the Company to 95,026,717 ordinary 1p shares. On 29
September 2006, options over 33,895 ordinary 1p shares were exercised. On 4
December 2006, options over 229,320 ordinary 1p shares were exercised. On 21
December 2006, options over 429,500 ordinary 1p shares were exercised. At 31
March 2007, there were 95,719,432 ordinary 1p shares in issue.
Share options
At 31 March 2007 unexercised options over 1,956,070 (31 March 2006: 3,655,510)
new ordinary 1p shares in the Company and 3,964,695 (31 March 2006: 6,234,695)
purchased ordinary 1p shares held by the ESOP had been granted to directors and
employees under the Company's share option schemes. During the period, no new
options were granted. Options over 1,699,440 new ordinary 1p shares and
2,270,000 purchased ordinary 1p shares were exercised.
21. Dividends
Year To Year To
31 March 31 March
2007 2006
£000 £000
Attributable to equity share capital
Ordinary
-interim paid of 1.60p (2006: 1.45p) per share 1,441 1,296
-prior period final paid 2.45p (2006: 2.20p) per share 2,174 1,831
Total dividends paid 4.05p (2006 : 3.65p) 3,615 3,127
The interim dividend of 1.60p was paid on 29 December 2006 to shareholders on
the register on 8 December 2006.
The final dividend, if approved by shareholders at the AGM on 25 July 2007,
amounting to £2,480,000 representing 2.75 pence per share, will be paid on 27
July 2007 and has not been included as a liability as at 31 March 2007.
22. Own shares held
Following approval at the 1997 Annual General Meeting the Company established
the Helical Bar Employees' Share Ownership Plan Trust (the 'Trust') to be used
as part of the remuneration arrangements for employees. The purpose of the
Trust is to facilitate and encourage the ownership of shares by or for the
benefit of employees by the acquisition and distribution of shares in the
Company.
The Trust purchases shares in the Company to satisfy the Company's obligations
under its Share Option Schemes and Performance Share Plan.
At 31 March 2007, the Trust held 5,174,701 (31 March 2006: 5,648,080) ordinary
shares in Helical Bar plc.
At 31 March 2007, options over 3,964,695 (31 March 2006: 6,234,695) ordinary
shares in Helical Bar plc had been granted through the Trust. At 31 March 2007,
awards over 5,960,675 (31 March 2006: 4,514,380) ordinary shares in Helical Bar
plc had been made under the terms of the Performance Share Plan.
23. Statement of Changes in Equity
Capital Profit Own
Share Share Revaluation redemption Other and loss shares
Capital premium reserve reserve reserves account held Total
£000 £000 £000 £000 £000 £000 £000 £000
At 1 April 2005 1,170 39,110 54,530 7,467 291 86,822 (6,893) 182,497
Issue of shares 39 3,380 - - - - - 3,419
Purchase of shares - 11 (11) (472) (472)
Revaluation surplus 30,364 (30,364) -
Realised on disposals (20,074) 20,074 -
Total recognised 47,430 47,430
income
Dividends paid (3,127) (3,127)
Performance share plan 3,128 3,128
Provision for ESOP
purchase (3,128) (3,128)
Share options 226 226
exercised
Minority Interest 124 124
As at 31 March 2006 1,209 42,490 64,820 7,478 291 120,948 (7,139) 230,097
Issue of shares 13 30 43
Revaluation surplus 30,552 (30,552)
Realised on disposals (15,708) 15,708
Total recognised 52,064 52,064
income
Dividends paid (3,615) (3,615)
Purchase of shares (5,155) (5,155)
Share options 71 71
exercised
Performance share plan 8,981 8,981
Own shares held (6,228) 6,228 -
Minority interest (300) (300)
As at 31 March 2007 1,222 42,520 79,664 7,478 291 157,006 (5,995) 282,186
24. Net assets per share
At At
31 March 31 March
At 2007 At 2006
31 March Number of 31 March Number of
2007 Shares Pence per 2006 Shares Pence per
£000 000's share £000 000's share
Net asset value 282,186 95,719 230,097 94,372
Own shares held by ESOP (5,174) (5,648)
Less deferred shares (265) (265)
Basic net asset value 281,921 90,545 311 229,832 88,724 259
Unexercised share options 2,002 1,956 3,506 3,655
Diluted net asset value 283,923 92,501 307 233,338 92,379 253
- Fair value of financial (345) 427
instruments
2,168 2,175
- Deferred tax on capital
allowances 23,555 20,927
- Deferred tax on chargeable gains
Adjusted diluted net asset value 309,301 92,501 334 256,867 92,379 278
- Fair value of trading properties 36,480 28,704
Diluted EPRA net asset value 345,781 92,501 374 285,571 92,379 309
- Fair value of financial statements 345 (427)
- Deferred tax on capital allowances (2,168) (2,175)
- Deferred tax on capital gains (23,555) (20,927)
Diluted EPRA NNNAV 320,403 92,501 346 262,042 92,379 284
This information is provided by RNS
The company news service from the London Stock Exchange
Monday, 20th May 2024
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