Half-year Report

RNS Number : 1968T
Helical PLC
23 November 2021
 

HELICAL PLC

("Helical" or the "Group" or the "Company")

Half Year Results for the Six Months to 30 September 2021

 

HELICAL, A SUSTAINABLE INVESTMENT

 

Gerald Kaye, Chief Executive, commented:

 

"The performance for the half year to 30 September 2021 is the result of a decision taken five years ago to focus solely on the redevelopment, refurbishment and repositioning of office buildings. That we are able to announce such strong results, coming out of a global pandemic and when uncertainties remain about the strength of the economic recovery and the impact of inflationary pressures, is testimony to the quality of our portfolio and the dedication and drive of our experienced management team.

 

"Helical is moving forward in all areas with corporate and property sustainability at the forefront. We are making progress on our Pathway to Net Zero and improving our sustainability benchmark ratings. Our property portfolio, which is EPC A or B and highly rated under the BREEAM criteria, provides superior wellness, technology and amenities, all contributing to deliver best-in-class office space.

 

"As we anticipated, we are seeing increasing levels of bifurcation in both the leasing and investment markets between the green buildings and the "brown" buildings. Recent research from Knight Frank noted a significant rental premium for BREEAM "Outstanding" and "Excellent" buildings and the investment market is showing strong demand from investors seeking the most sustainable properties.

 

"We are now focused on adding a pipeline of new opportunities to our portfolio and are actively engaged in the market, identifying, appraising and bidding for Central London assets. At the same time, we are maintaining our discipline, ensuring that any new scheme will be accretive to our business and continue our growth."

 

Strong Operational Performance

 

Delivery of 33 Charterhouse Street, EC1 on Track

 

· At 33 Charterhouse Street, EC1, the topping out ceremony was held on 28 September 2021 to mark the completion of the superstructure works. Work continues to progress in line with the programme and practical completion is targeted for September 2022.

 

Leasing Market Rebounding

 

· In London, we completed two new lettings at The Tower, EC1 and 55 Bartholomew, EC1, totalling 12,731 sq ft, in line with 31 March 2021 ERVs. At The Warehouse, EC1 we have completed two rent reviews at an average of 2.1% above 31 March 2021 ERVs and achieving an uplift of 18% on the previous contracted rent. We have also completed three lease renewals at The Loom, with average rents in line with 31 March 2021 ERVs. Since 30 September 2021, we have let 9,268 sq ft across two units at 25 Charterhouse Square, EC1 at a 0.5% premium to 31 March 2021 ERVs.

· In Manchester, we have let the 5,588 sq ft seventh floor at Trinity at a rent of £34 psf, a 2% premium to 31 March 2021 ERV.  

 

 

 

Improving Rent Collection

 

· As at 22 November 2021, we have collected 94.5% of the September quarter rent (86.8% at 24 November 2020), helped by the reopening of our food and beverage tenants, and expect to receive a further 2.6% via agreed payment plans. Concessions have been granted on 0.9% and the remaining 2.0% is subject to ongoing discussions.

· We have collected 93.7% of the March and June quarter rents, with a further 0.6% to be collected under payment plans. Concessions have been granted over 3.7% and the remaining 2.0% is subject to ongoing discussions.

 

Enhanced Sustainability Credentials

 

· In April, Helical launched "Designing for Net Zero", a guide to assist our professional teams as they collaborate with us to reduce carbon in our development projects, following on from our new Sustainability Strategy, "Built for the Future", launched in 2020.

· We have improved our sustainability measures and ratings, with a GRESB 4* Green Star rating and EPRA Sustainability BPR award of Gold.

· 96% of the space in our buildings has been recently developed or refurbished with 99% of our investment portfolio, by value, having an A or B EPC rating.

 

 

Financial Highlights

 

Earnings and Dividends

 

· IFRS profit before tax of £31.0m (2020: loss of £12.7m).

· See-through Total Property Return1 of £44.9m (2020: £6.9m):

Group's share1 of net rental income of £14.1m (2020: £11.9m), up 18.5%.

Development profits of £1.0m (2020: loss of £0.5m), after provisions of £0.2m (2020: £0.3m).

Net gain on sale and revaluation of Investment properties of £29.8m (2020: loss of £4.5m).

· IFRS basic earnings per share of 18.2p (2020: loss of 8.9p).

· EPRA earnings per share1 of 0.9p (2020: loss of 1.0p).

· Interim dividend proposed of 2.90p per share (2020: 2.70p), an increase of 7.4%.

 

Balance Sheet

 

· Net asset value up 2.4% to £622.6m (31 March 2021: £608.2m).

· Total Accounting Return1 on EPRA net tangible assets of 5.1% (2020: -2.5%).

· EPRA net tangible asset value per share1 up 3.4% to 551p (31 March 2021: 533p).

· EPRA net disposal value per share1 up 2.3% to 496p (31 March 2021: 485p).

 

Financing

 

· Change in fair value of derivative financial instruments credit of £4.6m (2020: charge of £5.3m).

· See-through loan to value1 of 25.2% (31 March 2021: 22.6%).

· See-through net borrowings1 of £227.1m (31 March 2021: £193.9m).

· Average maturity of the Group's share1 of secured debt of 3.4 years (31 March 2021: 3.2 years), increasing to 4.4 years on exercise of options to extend current facilities and on a fully utilised basis.

· See-through average cost of secured facilities1 of 3.6% (31 March 2021: 3.5%).

· Group's share1 of cash and undrawn bank facilities of £336.5m (31 March 2021: £422.7m).

 

 

 

Portfolio Update

 

· IFRS property portfolio value of £761.3m (31 March 2021: £740.2m).

· 3.9% valuation increase, on a like-for-like basis1, of our see-through investment portfolio1 of £888.9m (31 March 2021: £839.4m).

· Contracted rents of £37.6m (31 March 2021: £37.8m) compared to an ERV1 of £52.2m (31 March 2021: £52.1m).

· See-through portfolio WAULT1 of 6.6 years (31 March 2021: 6.9 years).

· Vacancy rate increased marginally from 10.5% to 11.2%.

 

Interim Dividend

 

An interim dividend of 2.90 pence per share (2020: 2.70 pence per share) will be paid to Shareholders as follows:

 

Ex-dividend date

 2 December 2021

Record date

 3 December 2021

Payable date

31 December 2021

 

For further information, please contact:

 

Helical plc

020 7629 0113

Gerald Kaye (Chief Executive)

 

Tim Murphy (Finance Director)

 

 

 

Address:

5 Hanover Square, London W1S 1HQ

Website:

www.helical.co.uk

Twitter:

@helicalplc

 

 

FTI Consulting

020 3727 1000

Dido Laurimore/Richard Gotla/Andrew Davis

schelical@fticonsulting.com

 

 

Half Year Results Presentation

Helical will be holding a presentation for analysts and investors starting at 9am on Tuesday 23 November 2021 at the offices of FTI Consulting, 200 Aldersgate, Aldersgate Street, London, EC1A 4HD. If you would like to attend, please contact FTI Consulting on 020 3727 1000, or email schelical@fticonsulting.com 

 

The presentation will be on the Company's website www.helical.co.uk, via a webcast and a conference call facility will be available.

 

Conference Call:  +44 (0)330 336 9434

 

Passcode:  9503131

 

Webcast Link:

https://webcasting.brrmedia.co.uk/broadcast/616028bf4e29f55a94191848

1 See Glossary for definition of terms. The financial statements have been prepared in accordance with International Accounting Standards (IAS) in conformity with the Companies Act 2006. In common with usual and best practice in our sector, alternative performance measures have also been provided to supplement IFRS, some of which are based on the recommendations of the European Public Real Estate Association ("EPRA"), with others designed to give additional information about the Group's share of assets and liabilities, income and expenses in subsidiaries and joint ventures ("See-Through"). 
 

Chief Executive's Statement

 

Overview

 

The performance for the half year to 30 September 2021 is the result of a decision taken five years ago to focus solely on the redevelopment, refurbishment and repositioning of office buildings. That we are able to announce such strong results, coming out of a global pandemic and when uncertainties remain about the strength of the economic recovery and the impact of inflationary pressures, is testimony to the quality of our portfolio and the dedication and drive of our experienced management team.

 

Helical is moving forward in all areas with corporate and property sustainability at the forefront. We are making progress on our Pathway to Net Zero and improving our sustainability benchmark ratings. Our property portfolio, which is EPC A or B and highly rated under the BREEAM criteria, provides superior wellness, technology and amenities, all contributing to deliver best-in-class office space.

 

Sustainability

 

In April 2021, we launched Designing for Net Zero, a guide produced to aid our professional teams as they collaborate with us to reduce carbon use in our development projects, from the design and construction process through to operation and occupation. We are now on course to announce our Pathway to Net Zero by the end of the financial year.

 

As part of our commitment to sustainability reporting we measure our performance against industry-wide benchmarks, and I am again pleased to be able to report progress against these measures. During the period, we improved our GRESB rating from 3* to 4* Green Star and our EPRA Sustainability BPR Award from Silver to Gold.

 

At a portfolio level, 99% by value of our completed portfolio has an EPC rating of A or B and each of our completed refurbished or redeveloped office buildings has a BREEAM "Excellent" rating. Our 33 Charterhouse Street, EC1 office development, due for completion in September 2022, was awarded the UK's first BREEAM 2018 New Construction "Outstanding" rating at the design stage in 2020.

 

Results for the Half Year

 

The profit before tax for the six months to 30 September 2021 was £31.0m (2020: loss of £12.7m) with a see-through Total Property Return of £44.9m (2020: £6.9m). See-through net rental income was £14.1m (2020: £11.9m) while developments generated a see-through profit of £1.0m (2020: loss of £0.5m). The see-through net gain on sale and revaluation of the investment portfolio was £29.8m (2020: loss of £4.5m).

 

Total see-through net finance costs were £7.8m (2020: £7.9m). An increase in expected future interest rates led to a £4.6m credit (2020: charge of £5.3m) from the valuation of the Group's derivative financial instruments. Recurring see-through administration costs were £4.9m (2020: £5.1m), with accruals for performance related awards of £2.0m (2020: £0.3m) and with National Insurance on these awards of £0.5m (2020: £0.1m).

 

A corporation tax charge of £nil (2020: £nil) has been recognised in the Half Year Results. With an increase in the Group's deferred tax provision of £8.8m (2020: credit of £2.0m), a total tax charge of £8.8m (2020: credit of £2.0m) has been recognised.

 

The profit for the half year, after recognition of this tax charge, was £22.2m (2020: loss of £10.8m). There was an IFRS basic earnings per share of 18.2p (2020: loss of 8.9p) and an EPRA earnings per share of 0.9p (2020: loss of 1.0p).

 

On a like-for-like basis, the investment portfolio increased in value by 3.9%. The see-through total portfolio value increased to £901.9m (31 March 2021: £857.0m).

 

The portfolio was 88.8% let at 30 September 2021, generating contracted rents of £37.6m (31 March 2021: £37.8m), at an average of £61 psf, growing to £41.2m on the letting of currently vacant space, towards an ERV of £52.2m (31 March 2021: £52.1m). The Group's contracted rent has a Weighted Average Unexpired Lease Term ("WAULT") of 6.6 years.

 

The Total Accounting Return ("TAR"), being the growth in the net asset value of the Group, plus dividends paid in the period, was 3.9% (2020: -2.0%). Based on EPRA net tangible assets, the TAR was 5.1% (2020: -2.5%). EPRA net tangible assets per share were up 3.4% to 551p (31 March 2021: 533p), with EPRA net disposal value per share up 2.3% to 496p (31 March 2021: 485p).

 

Balance Sheet Strength and Liquidity

 

The Group has a significant level of liquidity with see-through cash and unutilised bank facilities of £336.5m (31 March 2021: £423m) available to fund capital works on its portfolio, service borrowings and deploy into future acquisitions.

 

During the half year to 30 September 2021, the Group invested £16.2m in its investment portfolio, primarily at 33 Charterhouse Street, EC1.

 

At 30 September 2021, the Group had £68.0m of cash deposits available to deploy without restrictions and a further £71.3m of rent and sales receipts collected in bank accounts available to service payments under loan agreements, cash held at managing agents and cash held in joint venture. Furthermore, the Group had £197.2m of loan facilities available to draw on, plus £28.5m of uncharged property.

 

The see-through loan to value ratio ("LTV") increased to 25.2% at the half year (31 March 2021: 22.6%) and our see-through net gearing, the ratio of net borrowings to the net asset value of the Group, increased to 36.5% (31 March 2021: 31.9%) over the same period.

 

At the period end, the average debt maturity on secured loans, on a see-through basis, was 3.4 years (31 March 2021: 3.2 years), increasing to 4.4 years on exercise of options to extend the Group's facilities and on a fully utilised basis. The average cost of debt at 30 September 2021 was 3.6% (31 March 2021: 3.5%).

 

Dividends

 

Helical is a capital growth stock, seeking to maximise value by successfully letting redeveloped, refurbished and repositioned property. Once stabilised, these assets are either retained for their long-term income and reversionary potential or sold to recycle equity into new schemes.

 

This recycling leads to fluctuations in our EPRA earnings per share, as the calculation of these earnings excludes capital profits generated from the sale and revaluation of assets. As such, both EPRA earnings and realised capital profits are considered when determining the payment of dividends.

 

The Board has declared an interim dividend of 2.90p (2020: 2.70p), an increase of 7.4%. 

 

 

 

 

Outlook

 

As we anticipated, we are seeing increasing levels of bifurcation in both the leasing and investment markets between the green buildings and the "brown" buildings. Recent research from Knight Frank noted a significant rental premium for BREEAM "Outstanding" and "Excellent" buildings and the investment market is showing strong demand from investors seeking the most sustainable properties.

 

We are now focused on adding a pipeline of new opportunities to our portfolio and are actively engaged in the market, identifying, appraising and bidding for Central London assets. At the same time, we are maintaining our discipline, ensuring that any new scheme will be accretive to our business and continue our growth.

 

 

 

Gerald Kaye
Chief Executive

23 November 2021

 

 

Sustainability

 

As governments and businesses digest the outcomes from the COP26 summit, it has become clear that the time horizon to 2030 will prove to be pivotal for them to deliver on the commitments they have made.

 

For commercial real estate, one of the greatest challenges being faced is the future obsolescence of "brown" buildings and the associated costs of retrofitting these assets to ensure compliance with future legislation. At Helical, 96% by value of our offices have either been recently developed or refurbished, with 99% of buildings holding an EPC rating of A or B.

 

In the next six months we will set out our Pathway to Net Zero carbon, which will make a clear statement as to our ambitions and how these will be achieved. We do not want to rely on the use of carbon offsetting, rather we want to minimise our carbon impact by investing in better technologies, championing best practice construction methods and using low carbon materials.

 

The development at 33 Charterhouse Street, EC1 has acted as a case study for our guide "Designing for Net Zero", and we continue to challenge carbon emissions and employ smart building technology at every stage of the project. Through this rigorous process, we are on track to reduce operational carbon by c. 43% and create an embodied carbon saving of 20%, compared to the current RIBA benchmark. On its completion in September 2022, this building will be a flagship sustainable asset, which is smart, amenity rich and focuses on health and wellbeing.

 

In May 2021, Helical joined both the Better Buildings Partnership and the UK Green Building Council. We believe that collaboration with our peers, sharing knowledge and best practice, is critical to creating meaningful and long-term change in our industry.

 

The Group has taken active steps to embed sustainability into every part of the business. This commitment has been recognised in the continued improvement of our benchmark results. In October 2021, we were pleased to receive a 4* Green Star rating from GRESB with a score of 85/100, an improvement from 3* in the prior year. We were also awarded a Gold EPRA Sustainability Best Practice Recommendations certification, up from Silver in the previous year.

 

As we look forward to publishing our Pathway to Net Zero in the coming months, we will also undertake a more detailed asset level resilience review to establish the potential exposure we may face from rising temperatures. Sustainability along with wellness, technology and enhanced amenities, are key market drivers and we are now seeing the positive impact they have on valuations and rents. We recognise that maintaining a focus on sustainability across the business will be critical to delivering enhanced Shareholder returns.

 

 

Helical's Property Portfolio - 30 September 2021

 

Our Market

 

Following the significant challenges of the past 18 months, the Central London commercial property market has begun to demonstrate signs of a sustained recovery, with noticeable increases in occupier and investor demand for best-in-class buildings.

 

We continue to believe that, with our focus on high quality, sustainable and technologically advanced buildings, we are best placed to take advantage of this evolving market and that our newly developed or refurbished portfolio will continue to outperform. 

 

Why London?

 

We view the London commercial property market as the best source of capital profits and believe that our experience and skills are best deployed in this sector, which is rapidly evolving to respond to the demand for more sustainable buildings.

 

Economic activity has remained resilient in the face of Brexit and Covid-19, with TfL data showing tube journeys to the City stations having increased fourfold since 1 April 2021. London remains a global economic centre that attracts a diverse range of innovation and creativity-led businesses, whilst continuing to see growth from traditional sectors, with financial, insurance and professional services firms representing almost half of all take-up this year. 

 

The London market continues to attract significant inflows of global real estate capital, with the UK ranking second to the US in 2021. As global markets experience turbulence, the "safe-haven" reputation of the London market should result in sustained significant inbound investment. 

 

The London Market

 

The outlook for the Central London office market is increasingly positive, with key indicators of occupational demand and investment activity continuing to demonstrate growth.

 

From an occupational perspective, the successful vaccine roll out has led to a sustained return of employees to the office. This is translating into increased demand for new space within the market. CBRE has noted that space that is "under offer" grew by 42% in Q3 2021 to 3.9m sq ft, which represents the highest level the market has seen since Q3 2019. In particular, occupiers are seeking to acquire the best available space to ensure they provide an amenity rich, attractive working environment for their employees. This has been demonstrated by 89% of the take-up in the first half of the year being for Grade A space. Promisingly, the number of new requirements is continuing to grow with Savills noting active requirements for 10.2m sq ft of assets currently in the market.

 

Within the trend of increased take-up there continues to be a noticeable difference between best-in-class and secondary space, with new build vacancy standing at 1.6% compared to 8.0% for secondary stock.  Of all vacant office supply, 75% relates to second-hand space which has been driven by an increase in tenant released space, albeit this trend appears to be slowing. We see this rise in vacancy in secondary stock as an opportunity for Helical to apply its skillset to redevelop or refurbish obsolete buildings into new sustainable offices.

 

While the current global economic turbulence has seen an increase in material prices and instability to supply chains, development activity within the space-constrained Central London market has continued at pace and we expect these macro challenges to be short-term. CBRE report that 10.2m sq ft of office space is under construction and due to complete between 2022-2025. Encouragingly, of this new space, 30% is already let or under offer. CBRE has noted that the projected level of future completions is likely to result in an under supply of c. 9m sq ft of high quality office space. It would therefore suggest that the upward pressure on best-in-class office rents will be sustained as we move forward.

 

Investment volumes continue to remain strong at £6.2bn, with double the transaction volume recorded in the year to date when compared to the same period last year. The continued demand to acquire Central London investment opportunities is increasingly putting downward pressure on yields. CBRE has noted that both City and West End yields have compressed by 25 bps. Furthermore, investors' focus on buildings with the highest ESG credentials and the continuation of a yield differential between London and key European markets should drive further yield compression, even if there begins to be upward pressure on interest rates.

 

Looking Forward

 

We continue to believe that the key trends we have identified of sustainability, wellness, enhanced amenities and technology will be of upmost importance to occupiers and investors within the Central London market. Furthermore, these trends are increasingly being shown to be accretive to value, with Knight Frank recently reporting a 12.3% rental premium for achieving a BREEAM "Outstanding" rated building. We also believe that the gap between prime and secondary property will continue to widen, which will enhance the value of our existing portfolio and will provide significant opportunity for us to apply our strategy of redeveloping, refurbishing and repositioning properties that are no longer fit for purpose.

 

Property Overview

 

Helical's portfolio is comprised of income-producing multi-let offices, office refurbishments and developments and a mixed use commercial/residential scheme. At 30 September 2021, London represented 97% and Manchester 3% of the Investment property portfolio. Our strategy is to continue to increase our London holdings, focusing on areas where we see strong tenant demand and growth potential, such as the City and the "Tech Belt" that runs from King's Cross through Old Street and Shoreditch to Whitechapel.

 

Kaleidoscope, EC1

In March, we completed the letting of the whole of Kaleidoscope, our 88,581 sq ft office building located directly above the Farringdon East Elizabeth Line station, to TikTok Information Technologies UK Limited on a 15 year lease term at an annual rent of £7.6m. TikTok has commenced fitting out the building and is expected to be in occupation in Spring 2022.

 

33 Charterhouse Street, EC1

The development of our 205,369 sq ft office building, in 50:50 joint venture with AshbyCapital, is progressing on time and on budget, with practical completion due at the end of September 2022. The building topped out on 28 September 2021, marking the completion of the superstructure works, and work is continuing at pace on the installation of external cladding and internal services. 

 

The building is situated just 100m from Farringdon Station and directly opposite the proposed new Museum of London, offering future tenants excellent connectivity and amenity. Once completed it will provide a best-in-class office development meeting the highest ESG credentials, as evidenced by its BREEAM 2018 New Construction "Outstanding" rating. It will also provide a technologically pioneering environment for occupiers with smart building systems and a fully integrated building management app for tenants.

 

The Bower, EC1

The Bower is a landmark estate comprising 312,573 sq ft of innovative, high quality office space along with 21,059 sq ft of restaurant and retail space. The estate is located adjacent to the Old Street roundabout, which is currently undergoing significant remodelling and will provide extensive additional public realm when completed in Autumn 2022.

 

 

The Warehouse and The Studio

 

The Warehouse comprises 122,858 sq ft of offices and The Studio 18,283 sq ft of offices, both fully let, with 10,298 sq ft of retail space across the two buildings. In the period, we completed a lease renewal with Stripe at the Warehouse, extending the lease by three years. We have also completed a further two rent reviews at an average of 2.1% above 31 March 2021 ERVs and achieving an uplift of 18% on the previous contracted rent, and are in advanced discussions with the remaining tenants to determine outstanding rent reviews.

 

The retail operators are open and trading following the end of Government restrictions, adding valuable amenities to the estate. The recently vacated retail unit in The Studio is currently being marketed.

 

The Tower

 

The Tower, completed in August 2018, offers 171,432 sq ft of office space with a contemporary façade and innovatively designed interconnecting floors, along with 10,761 sq ft of retail space, across two units, let to food and beverage occupiers, Serata Hall and Wagamama.

 

In the period we have let the 17th floor, previously let to Finablr, to Verkada on a five year lease for a rent which is in line with the 31 March 2021 ERV. Infosys, who occupy four floors at The Tower, have exercised their break on the 12th floor, effective on 14 October 2021, and we are currently marketing this space.

 

Barts Square, EC1

In a joint venture with The Baupost Group LLC, Helical has redeveloped this 3.2 acre freehold site. The completed development now comprises 236 residential apartments, three office buildings: One Bartholomew (sold in September 2015), 90 Bartholomew Close (sold in April 2020) and 55 Bartholomew, and eight retail units, as well as extensive new public realm.

 

Residential/Retail

 

The Barts Square residential development has recently been recognised for its outstanding design and sympathetic approach to its surroundings by winning a Housing Design Award, the only awards promoted by all five major professional institutions.

 

We have completed the sale of a further six apartments in the period taking the total number of sold apartments across both phases to 214 at 30 September 2021. One apartment remains available in Phase One and 18 apartments are available in Phase Two, following the completion of three further sales since the period end.

 

The retail space in Phase One is fully let to Stem + Glory and Halfcup. One of the Phase Two retail units is let to BEERS London, an art gallery, and the remaining five retail units are currently being marketed. The landscaping of the new public square is complete, offering extensive public amenity.

 

55 Bartholomew

 

At 55 Bartholomew Close, EC1 we have completed the letting of the fourth floor to Push Gaming on a managed basis at a rental level above 31 March 2021 ERV, representing a new offering to tenants from the Group.

 

The Loom, E1

At this 108,612 sq ft former Victorian wool warehouse, we have completed the renewal of three leases, totalling 14,258 sq ft, at an average rent of £54 psf. Following these renewals, the Loom is 75% let with 26,949 sq ft across ten units available to let. We continue to undertake asset management activities to reconfigure units as they become available, ensuring we can offer larger floorplates and offering "plug and play" space to complement the existing variety of units.

 

25 Charterhouse Square, EC1

25 Charterhouse Square comprises 42,921 sq ft of offices adjacent to the new Farringdon East Elizabeth Line station, overlooking the historic Charterhouse Square.

 

Following the exercise of a break option by the previous tenant, we have relet the first floor and southern ground floor unit on terms ahead of the 31 March 2021 ERVs, leaving the northern ground floor unit available to let. Peakon has exercised its break on the third floor effective on 23 May 2022 and this will give us the opportunity to relet the space at an improved rent. The remaining floors are currently let to Anomaly and Hudson Sandler.

 

The Powerhouse, W4

The Powerhouse is a listed building, providing 21,268 sq ft of office and recording studio space, on Chiswick High Road and is fully let on a long lease to Metropolis Music Group. We are undertaking capital works on behalf of the tenants to improve the roof, which are due to complete in Summer 2022.

 

Trinity, Manchester

In the period we have completed the letting of the 5,588 sq ft seventh floor at Trinity, Manchester to AEW Architects at a rent of £34 psf. The letting represents a 2% premium to 31 March 2021 ERV. Following this letting the 58,760 sq ft building is now 55% let, with Kennedys Law, Saffery Champness and Tosca Debt Capital occupying the office space.

 

Portfolio Analytics

 

See-Through Total Portfolio by Fair Value

 

 

Investment

£m

Development

£m

Total

£m

 

%

London Offices

 

 

 

 

 

 

 - Completed, let and available to let

767.1

86.3

-

767.1

85.0

 - Being redeveloped

94.0

10.6

-

94.0

10.4

London Residential

-

12.4

95.0

12.4

1.4

Total London

861.1

96.9

  12.4

95.0

873.5

96.8

Manchester Offices

 

 

 

 

 

 

 - Completed, let and available to let

27.7

3.1

-

27.7

3.1

Total Manchester

27.7

3.1

  - 

-

27.7

3.1

Total Core

888.8

100.0

  12.4

95.0

901.2

99.9

Other

0.1

0.0

0.6

5.0

0.7

0.1

Total Non-Core Portfolio

0.1

0.0

0.6

5.0

0.7

0.1

Total

888.9

100.0

  13.0

100.0

901.9

100.0

 

See-Through Land and Development Portfolio

 

 

Book value

£m

Fair value

£m

Surplus

£m

Fair value

%

London Residential

12.4

12.4

0.0

95.0

Land

0.0

0.6

0.6

5.0

Total

12.4

13.0

0.6

100.0

 

Capital Expenditure

 

We have a committed and planned development and refurbishment programme.

 

Property

Capex

budget

(Helical share)

£m

Remaining spend

(Helical share)

£m

New space

sq ft

Total completed
space

sq ft

Completion
date

Investment - committed

 

 

 

 

 

- 33 Charterhouse Street, London EC1

65.9

30.9

205,369

205,369

September 2022

Development - committed

 

 

 

 

 

- Barts Square, London EC1 - Phase One

69.9

0.1

127,364

127,364

Completed

- Barts Square, London EC1 - Phase Three

44.3

0.8

89,353

89,353

Completed

       
 

 

Asset Management

 

Asset management is a critical component in driving Helical's performance. Through having well considered business plans and maximising the combined skills of our management team, we are able to create value in our assets.

 

 

Investment portfolio

Fair

value

weighting

%

Passing

rent

£m

 %

Contracted rent

£m

 %

ERV

£m

ERV change

like-for-like

%

London Offices

 

 

 

 

 

 

 

 

- Completed, let and available to let

86.3

26.9

97.8

36.5

97.1

41.7

79.9

0.2

- Being redeveloped

10.6

0.0

0.0

8.6

16.5

0.0

Total London

96.9

26.9

97.8

36.5

97.1

50.3

96.4

0.2

Manchester Offices

 

 

 

 

 

 

 

 

- Completed, let and available to let

3.1

0.6

2.2

1.0

2.7

1.8

3.4

0.0

Total Manchester

3.1

0.6

2.2

1.0

2.7

1.8

3.4

0.0

Other

0.0

0.0

0.0

0.1

0.2

0.1

0.2

0.0

Total

100.0

27.5

100.0

37.6

100.0

52.2

100.0

0.1

 

 

 

See-through

total portfolio contracted rent

£m

Rent lost at break/expiry - Covid related

(0.6)

Rent lost at break/expiry - Non-Covid related

(1.0)

Rent reviews and uplifts on lease renewals

0.2

New lettings - London

1.0

New lettings - Manchester

0.2

Total decrease in the period from asset management activities

(0.2)

Total contracted rental change from sales and purchases

0.0

Net decrease in contracted rents in the period

(0.2)

 

 

 

Investment Portfolio

 

Valuation Movements

 

 

Valuation change

%

Investment portfolio

weighting

30 September 2021

%

Investment portfolio

weighting

31 March 2021

%

London Offices

 

 

 

- Completed, let and available to let

3.1

86.3

88.5

- Being redeveloped

11.6

10.6

8.2

Total London

4.0

96.9

96.7

Manchester Offices

 

 

 

- Completed, let and available to let

1.2

3.1

3.3

Total Manchester

1.2

3.1

3.3

Total

3.9

100.0

100.0

 

Portfolio Yields

 

 

EPRA topped

up NIY

30 September

2021

%

EPRA topped

up NIY

31 March

2021

%

Reversionary

yield

30 September

2021

%

Reversionary

yield

31 March

2021

%

True equivalent yield

30 September

2021

%

True equivalent yield

31 March

2021

%

London Offices

 

 

 

 

 

 

- Completed, let and available to let

4.4

4.5

4.9

5.1

4.9

5.0

- Being redeveloped

n/a

n/a

5.3

5.6

4.6

4.9

Total London

4.4

4.5

5.0

5.3

4.8

4.9

Manchester Offices

 

 

 

 

 

 

- Completed, let and available to let

3.3

2.4

5.9

5.9

5.7

5.7

Total Manchester

3.3

2.4

5.9

5.9

5.7

5.7

Total

4.4

4.5

5.0

5.3

4.8

5.0

        

 

See-through Capital Values, Vacancy Rates and Unexpired Lease Terms

 

 

Capital value psf

30 September

2021

£

Capital value psf

31 March

2021

£

Vacancy rate

30 September

2021

%

Vacancy rate

31 March

2021

%

WAULT

30 September 2021

Years

WAULT

31 March 2021

Years

London Offices

 

 

 

 

 

 

- Completed, let and available to let

1,260

1,215

8.0

5.8

6.6

6.9

- Being redeveloped

915

674

n/a

n/a

n/a

n/a

Total London

1,174

1,081

8.0

5.8

6.6

6.9

Manchester Offices

 

 

 

 

 

 

- Completed, let and available to let

471

465

44.6

54.1

6.9

8.4

Total Manchester

471

465

44.6

54.1

6.9

8.4

Total

1,128

1,040

11.2

10.5

6.6

6.9

        

 

See-through Lease Expiries or Tenant Break Options

 

 

Half Year to

2022

Year to

2023

Year to

2024

Year to

2025

Year to

2026

2026

onward

% of rent roll

4.9

12.8

12.0

3.3

1.0

66.0

Number of leases

14

17

13

5

4

36

Average rent per lease (£)

130,427

282,514

345,794

248,270

97,478

684,580

 

 

 

Top 15 Tenants

 

We have a strong rental income stream and a diverse tenant base. The top 15 tenants account for 80.3% of the total rent roll.

 

 

Rank

Tenant

Tenant industry

Contracted rent

£m

Rent roll

%

1

TikTok

Technology

7.6

20.3

2

Farfetch

Online retail

3.9

10.5

3

WeWork

Flexible offices

3.8

10.2

4

Infosys

Technology

3.2

8.5

5

VMware

Technology

2.0

5.3

6

Anomaly

Marketing

1.4

3.7

7

Denstu

Media

1.1

2.8

8

CBS

Media

1.0

2.8

9

Allegis

Recruitment

1.0

2.7

10

Stripe

FinTech

1.0

2.6

11

Verkada

Technology

1.0

2.6

12

Incubeta

Marketing

0.9

2.5

13

Openpayd

FinTech

0.9

2.3

14

Snowflake

Technology

0.8

2.1

15

Hey Habito

FinTech

0.5

1.4

Total

 

30.1

80.3

 

Letting Activity - New Leases

 

 

Area

sq ft

Contracted rent

(Helical's share)

£

Rent

£ psf

Change to

 31 March 2021 ERV (exc Plug and Play and managed lettings)

%

Lease term to expiry

Years

Investment Properties

 

 

 

 

 

London Offices

 

 

 

 

 

- The Tower, EC1

11,327

962,965

85.02

-0.2

5.00

- 55 Bartholomew, EC1

1,404

82,062

-1

-1

3.00

Total London

  12,731

1,045,027

85.02

-0.2

4.84

Manchester Offices

 

 

 

 

 

- Trinity

5,588

193,492

34.63

1.8

10.00

Total Manchester

5,588

  193,492

34.63

1.8

10.00

Total

18,319

  1,238,519

68.37

0.1

5.65

 

1 Let on a managed basis at a 6.8% premium to the comparable 31 March 2021 net effective rent.

 

 

 

London Portfolio - Investment Properties

 

Property

Description

Area sq ft

(NIA)

Vacancy rate at

30 September 2021

%

Vacancy rate at 31 March 2021

%

Completed, let and available to let

 

 

 

 

The Warehouse and Studio, The Bower EC1

Multi-let office building

  151,439

0.0

0.0

The Tower, The Bower EC1

Multi-let office building

  182,193

0.0

0.0

The Loom, E1

Multi-let office building

  108,612

24.8

14.8

Kaleidoscope, EC1

Single-let office building

  88,581

0.0

0.0

25 Charterhouse Square, EC1

Multi-let office building

  42,921

26.0

26.0

55 Bartholomew, EC1

Multi-let office building

  10,976

54.4

67.2

The Powerhouse, W4

Single-let recording studios/office building

21,268

0.0

0.0

 

 

  605,990

8.0

5.8

Being redeveloped

 

 

 

 

33 Charterhouse Street, EC1

Office development

205,369

n/a

n/a

 

 

  811,359

n/a

n/a

      

 

London Portfolio - Development Properties

 

Property

Description

Total apartments

Unsold

apartments at

30 September 2021

Unsold apartments at 31 March 2021

Barts Square, EC1

Residential apartments and 8 retail units

 236

22

28

 

Manchester Offices

 

Property

Description

Area sq ft

(NIA)

Vacancy rate at

30 September 2021

%

Vacancy rate at 31 March 2021

%

Trinity

Multi-let office building

  58,760

44.6

54.1

 

 

Financial Review

 

 

IFRS Performance

 

 

EPRA Performance

Profit Before Tax
£31.0m (2020: loss of £12.7m)

 

EPRA profit
£1.1m (2020: loss of £1.2m)

 

EPS
18.2p (2020: loss of 8.9p)

 

EPRA EPS
0.9p (2020: loss of 1.0p)

 

Diluted NAV Per Share
502p (31 March 2021: 492p)

 

EPRA NTA Per Share
551p (31 March 2021: 533p)

 

Total Accounting Return

3.9% (2020: -2.0%)

 

Total Accounting Return on EPRA NTA

5.1% (2020: -2.5%)

 

Overview

 

The significant increase in the valuation of the Group's Investment properties and strong rental collection levels are a testament to the quality of the Group's portfolio and reflect an increased confidence in the London office market.

 

The anticipated interest rate rises have impacted the value of our derivative financial instruments, resulting in a gain of £4.6m (2020: deficit of £5.3m).

 

With cash and undrawn bank facilities of £336.5m and an LTV of 25.2%, the Group has significant firepower to continue to develop its assets, service its borrowings and deploy into new opportunities.

 

Results for the Half Year

 

The see-through results for the period to 30 September 2021 include net rental income of £14.1m, a net gain on sale and revaluation of the investment portfolio of £29.8m and development profits of £1.0m, leading to a Total Property Return of £44.9m (2020: £6.9m). Total administration costs of £7.4m (2020: £5.5m) and net finance costs of £7.8m (2020: £7.9m) resulted in an IFRS pre-tax profit of £31.0m (2020: loss of £12.7m).

 

The post tax profit for the period was £22.2m (2020: loss of £10.8m), after deduction of the tax charge of £8.8m (2020: credit of £1.9m). EPRA net tangible asset value per share increased by 3.4% to 551p (31 March 2021: 533p).

 

The interim dividend, payable on 31 December 2021, will be 2.90p per share (2020: 2.70p), an increase of 7.4%.

 

The Group's real estate portfolio, including its share of assets held in joint ventures, increased to £901.9m (31 March 2021: £857.0m) primarily as a result of net revaluation gains on the investment portfolio and capital expenditure at 33 Charterhouse Street, EC1.

 

Capital expenditure on the development of 33 Charterhouse Street, EC1 resulted in an increase in the Group's see-through loan to value to 25.2% (31 March 2021: 22.6%). The Group's weighted average cost of debt was 3.6% (31 March 2021: 3.5%) and the weighted average debt maturity was 3.4 years (31 March 2021: 3.2 years). The average maturity of the facilities would increase to 4.3 years on exercise of the available extension options, on a fully utilised basis.

At 30 September 2021, the Group had unutilised bank facilities of £197.2m and cash of £139.3m on a see-through basis. These are primarily available to fund the development of 33 Charterhouse Street, EC1 and future property acquisitions.

 

Total Property Return

 

We calculate our Total Property Return to enable us to assess the aggregate of income and capital profits made each year from our property activities. Our business is primarily aimed at producing surpluses in the value of our assets through asset management and development, with the income side of the business seeking to cover our annual administration and finance costs. 

 

 

Half Year to

2021

£m

Half Year to

2020

£m

Total Property Return

44.9

6.9

 

See-Through Total Accounting Return

 

Total Accounting Return is the growth in the net asset value of the Group plus dividends paid in the reporting period, expressed as a percentage of the net asset value at the beginning of the period. The metric measures the growth in Shareholders' Funds each period and is expressed as an absolute measure.

 

 

Half Year to

2021

%

Half Year to

2020

%

Total Accounting Return on IFRS net assets

3.9

(2.0)

 

Total Accounting Return on EPRA net tangible assets is the growth in the EPRA net tangible asset value of the Group plus dividends paid in the period, expressed as a percentage of EPRA net tangible asset value at the beginning of the period.

 

 

Half Year to

2021

%

Half Year to

2020

%

Total Accounting Return on EPRA net tangible assets

5.1

(2.5)

 

Earnings Per Share

 

The IFRS earnings per share improved from a loss per share of 8.9p last half year to an earnings per share of 18.2p and are based on the after tax earnings attributable to ordinary Shareholders divided by the weighted average number of shares in issue during the period. 

 

On an EPRA basis, the earnings per share were 0.9p compared to a loss per share of 1.0p in 2020, reflecting the Group's share of net rental income of £14.1m (2020: £11.9m) and development profits of £1.0m (2020: losses of £0.5m) but excluding gains on sale and revaluation of Investment properties of £29.8m (2020: loss of £4.5m).

 

Net Asset Value

 

IFRS diluted net asset value per share increased by 2.0% to 502p per share (31 March 2021: 492p) and is a measure of Shareholders' Funds divided by the number of shares in issue at the period end, adjusted to allow for the effect of all dilutive share awards. 

 

EPRA net tangible asset value per share increased by 3.4% to 551p per share (31 March 2021: 533p). This movement arose principally from a total comprehensive income (retained profits) of £22.2m (2020: expense of £10.8m), less £9.0m of dividends (2020: £7.3m).

 

EPRA net disposal value per share increased by 2.3% to 496p per share (31 March 2021: 485p).

 

Income Statement

 

Rental Income and Property Overheads

 

Gross rental income for the Group in respect of wholly owned properties increased to £15.7m (2020: £13.4m), mainly reflecting the letting of Kaleidoscope, EC1 in March 2021, whilst gross rents remained at £0.1m (2020: £0.1m) in the joint ventures. Property overheads in respect of wholly owned assets and in respect of those assets in joint ventures increased in line with rents at £1.8m (2020: £1.6m). Overall, see-through net rents increased by 18.5% to £14.1m (2020: £11.9m).

 

Included within gross rental income is £3.1m (30 September 2020: reduction of £0.6m, 31 March 2021: reduction of £0.4m) of accrued income for rent free periods.

 

The table below demonstrates the movement of the accrued income balance for rent free periods granted and the respective rental income adjustment over the four years to 31 March 2025, based on the tenant leases as at 30 September 2021. The actual adjustment will vary depending on lease events such as new lettings and early terminations and future acquisitions or disposals.

 

 

Accrued income

£000

 

Adjustment to rental income

£000

Year to 31 March 2022

22,969

5,536

Year to 31 March 2023

26,374

3,405

Year to 31 March 2024

22,688

(3,686)

Year to 31 March 2025

19,661

(3,027)

 

Rent Collection

 

 

March - September 2021

quarters

%

Rent collected to date

93.9

Rent under discussion

2.8

Rent concessions

3.3

 

At 22 November 2021, the Group had collected 93.9% of all rent contracted and payable for the March, June and September 2021 quarters.

 

Development Profits

 

In the period, from our role as development manager at 33 Charterhouse Street, EC1, we recognised £0.4m of fees. Additional fees of £0.1m were recognised for carrying out accounting and corporate services at Barts Square, EC1 and 33 Charterhouse Street, EC1.

 

Profit on the sale of a retail site at Kingswinford of £0.8m was recognised as well as a write back of a provision made in previous periods on Cortonwood Retail Park, completed in 2017, of £0.2m. These profits, offset by other costs of £0.5m, contributed to a net development profit in the Group of £1.0m (2020: £0.1m).

 

Share of Results of Joint Ventures

 

The revaluation of our investment assets held in joint ventures generated a surplus of £10.0m (2020: £2.0m). A small loss of £0.1m (2020: £0.5m) was recognised in respect of our Barts Square, London EC1 residential development as a result of marketing and void costs.

 

Finance, administration and other sundry items added a further £0.5m (2020: £0.3m) of costs and after a tax charge of £3.2m (2020: £0.8m), there was a net profit from our joint ventures of £6.2m (2020: loss of £1.0m).

 

Gain on Sale and Revaluation of Investment Properties

 

The valuation of our investment portfolio, on a see-through basis, continued to reflect the benefit of our letting and development activities where we generated a see-through valuation surplus of £29.9m (2020: deficit of £4.0m).

 

Administrative Expenses

 

Administration costs in the Group, before performance related awards, reduced from £4.8m to £4.7m.

 

Performance related share awards and bonus payments, including National Insurance costs, increased to £2.4m (2020: £0.4m). Of this amount, £1.1m (2020: £0.3m), being the charge for share awards under the Performance Share Plan, is expensed through the Income Statement but added back to Shareholders' Funds through the Statement of Changes in Equity.

 

 

2021

£000

2020
£000

Administrative expenses (excluding performance related awards)

4,712

4,803

Performance related awards, including NIC

2,430

412

Group

7,142

5,215

In joint ventures

230

292

Total

7,372

5,507

 

Finance Costs and Derivative Financial Instruments

 

Total finance costs, including in joint ventures, fell marginally during the period to £7.8m (2020: £7.9m).

 

 

 

2021

£000

2020
£000

Interest payable on secured bank loans

- subsidiaries

5,212

5,489

 

- joint ventures

1,080

547

Amortisation of refinancing costs 

- subsidiaries

519

555

Cancellation of loans 

- subsidiaries

719

-

Sundry interest and bank charges

- subsidiaries

1,085

1,192

 

- joint ventures

107

94

Interest capitalised 

- joint ventures

(919)

-

Total

 

7,803

7,877

 

The movement upwards in medium and long-term interest rate projections during the period contributed to a credit of £4.6m (2020: charge of £5.3m) on the mark-to-market valuation of the derivative financial instruments.

 

Taxation

 

Helical pays corporation tax on its UK sourced net rental income, trading and development profits and realised chargeable gains, after offsetting administration and finance costs.

 

The current tax charge for the period was £nil (2020: £nil). Included in the deferred tax charge of £8.8m (2020: credit of £2.0m) was £3.4m, reflecting the impact of the increase in the UK corporation tax rate from 19% to 25% in April 2023. 

 

 

Dividends

 

The Board has declared an interim dividend for the period of 2.90p (2020: 2.70p), an increase of 7.4%.

 

 

Balance Sheet

 

Shareholders' Funds

 

Shareholders' Funds at 1 April 2021 were £608.2m. The Group's results for the period added £22.2m (2020: expense of £10.8m), net of tax, representing the total comprehensive income for the year. Movements in reserves arising from the Group's share schemes increased funds by £1.2m. The Company paid dividends to Shareholders during the period of £9.0m. The net increase in Shareholders' Funds from Group activities during the period was £14.4m to £622.6m.

 

Investment Portfolio

 

 

 

Wholly

owned
£000

In joint venture

£000

See-through

£000

Head leases capitalised

£000

Lease incentives

£000

Book

value

£000

Valuation at 31 March 2021

756,875

82,516

839,391

6,567

(18,934)

827,024

Capital expenditure 

- wholly owned

1,271

-

1,271

(7)

-

1,264

 

- joint ventures

-

14,975

14,975

(14)

-

14,961

Letting costs amortised

- wholly owned

(109)

-

(109)

-

-

(109)

 

- joint ventures

-

(7)

(7)

-

-

(7)

Revaluation surplus

- wholly owned

23,388

-

23,388

-

(3,482)

19,906

 

- joint ventures

-

9,993

9,993

-

(32)

9,961

Valuation at 30 September 2021

781,425

107,477

888,902

6,546

(22,448)

873,000

 

The Group spent £16.2m on capital works across the investment portfolio, mainly at 33 Charterhouse Street, EC1 (£15.0m), Kaleidoscope, EC1 (£0.5m), The Loom, EC1 (£0.3m) and 25 Charterhouse Square, EC1 (£0.2m).

 

Revaluation gains added £33.4m to increase the see-through fair value of the portfolio, before lease incentives, to £888.9m (31 March 2021: £839.4m). The accounting for head leases and lease incentives resulted in a book value of the see-through investment portfolio of £873.0m (31 March 2021: £827.0m).

 

Debt and Financial Risk

 

In total, the see-through outstanding debt at 30 September 2021 of £371.8m (31 March 2021: £362.2m) had a weighted average interest cost of 3.6% (31 March 2021: 3.5%) and a weighted average debt maturity of 3.4 years (31 March 2021: 3.2 years). The average maturity of the facilities would increase to 4.3 years following exercise of the one-year extension of the Group's £400m Revolving Credit Facility, and the one-year extension of the joint venture development loan, on a fully utilised basis.

 

 

 

Debt Profile at 30 September 2021 - Including Commitment Fees but Excluding the Amortisation of Arrangement Fees

 

 

Total

facility

£000s

Total

utilised

£000s

Available facility

£000s

Weighted average interest

rate

%

Average maturity of facilities

Years

Average maturity including extensions*

Years

Investment facilities

480,750

340,750

140,000

3.4

3.5

4.5

Total wholly owned

480,750

340,750

140,000

3.4

3.5

4.5

In joint ventures

78,245

31,008

47,237

5.8

2.1

3.4

Total secured debt

558,995

371,758

187,237

3.6

3.4

4.4

Working capital

10,000

-

10,000

-

-

-

Total unsecured debt

10,000

-

10,000

-

-

-

Total debt

568,995

371,758

197,237

3.6

3.4

4.3

 

* Calculated on a fully utilised basis and assuming the exercise of the one-year extension of the Revolving Credit Facility and the one-year extension option of the joint venture development loan.

 

Secured Debt

 

The Group arranges its secured investment and development facilities to suit its business needs as follows:

 

Investment Facilities

We have a £400m Revolving Credit Facility that enables the Group to acquire, refurbish, reposition and hold significant parts of our investment portfolio with the remaining investment assets held in £81m of term loan secured facilities. The value of the Group's properties secured in these facilities at 30 September 2021 was £754m (31 March 2021: £729m) with a corresponding loan to value of 45.2% (31 March 2021: 46.8%). The average maturity of the Group's investment facilities at 30 September 2021 was 3.5 years (31 March 2021: 3.3 years), increasing to 4.5 years on a fully utilised basis and following the one-year extension of the Revolving Credit Facility. The weighted average interest rate was 3.4% (31 March 2021: 3.3%). The marginal cost of fully utilising the undrawn Revolving Credit Facility was 1.6% (31 March 2021: 1.5%).

 

Joint Venture Facilities

We hold a number of investment and development properties in joint venture with third parties and include in our reported figures our share, in proportion to our economic interest, of the debt associated with each asset. The average maturity of the Group's share of bank facilities in joint ventures at 30 September 2021 was 2.1 years (31 March 2021: 1.9 years) with a weighted average interest rate of 5.8% (31 March 2021: 6.5%). The average interest rate will fall as the 33 Charterhouse Street, EC1 development facility is drawn down and would be 4.95% on a fully utilised basis, reducing to 2.25% once the building is complete and let.

 

Unsecured Debt

 

The Group's unsecured debt is £nil (31 March 2021: £nil).

 

Cash and Cash Flow

 

At 30 September 2021, the Group had £336.5m (31 March 2021: £423m) of cash and agreed, undrawn, committed bank facilities including its share in joint ventures, as well as £28.5m (31 March 2021: £28.1m) of uncharged property on which it could borrow funds.

 

Net Borrowings and Gearing

 

Total gross borrowings of the Group, including in joint ventures, have increased from £362.2m to £371.8m during the period to 30 September 2021. After deducting cash balances of £139.3m (31 March 2021: £162.2m) and unamortised refinancing costs of £5.4m (31 March 2021: £6.1m), net borrowings increased from £193.9m to £227.1m. The see-through gearing of the Group, including in joint ventures, increased from 31.9% to 36.5%.

 

 

30 September

2021

31 March

2021

See-through gross borrowings

£371.8m

£362.2m

See-through cash balances

£139.3m

£162.2m

Unamortised refinancing costs

£5.4m

£6.1m

See-through net borrowings

£227.1m

£193.9m

Shareholders' funds

£622.6m

£608.2m

See-through gearing - IFRS net asset value

36.5%

31.9%

 

Hedging

 

At 30 September 2021, the Group had £340.8m (31 March 2021: £280.8m) of fixed rate debt and borrowings protected by interest rate swaps, with an average effective interest rate of 3.1% (31 March 2021: 3.1%) and average maturity of 3.7 years. In addition, the Group had £195m of interest rate caps at an average rate of 1.75% (31 March 2021: £240m at 1.75%) and with an average maturity of 2.0 years. In our joint ventures, the Group's share of fixed rate debt was £22.7m (31 March 2021: £9.4m) with an effective rate of 6.8% and £8.3m (31 March 2021: £11.6m) of floating rate debt with an effective rate of 3.1% (31 March 2021: 3.1%), with an interest rate cap set at 1.5% plus margin on £35.3m (31 March 2021: £35.3m at 1.5%) and maturing in 0.1 years.

 

 

30 September

2021

£m

Effective interest rate

%

31 March

2021

£m

Effective interest rate

%

Fixed rate debt

 

 

 

 

- Secured borrowings

340.8

3.1

280.8

3.1

Total

340.8

3.1

280.8

3.1

Floating rate debt

 

 

 

 

- Secured

-

-

60.4

4.21

Total

340.8

3.4

341.2

3.3

In joint ventures

 

 

 

 

- Fixed rate

22.7

6.82

9.4

10.72

- Floating rate

8.3

3.1

11.6

3.1

Total borrowings

371.8

3.6

362.2

3.5

 

1 This includes commitment fees on undrawn facilities. Excluding these would reduce the effective rate to 1.9%.

2 This includes commitment fees on undrawn facilities. Excluding these would reduce the effective rate to 4.95% (31 March 2021: 4.95%).

 

 

 

Tim Murphy

Finance Director

23 November 2021

 

 

Statement of Directors' Responsibilities

 

We confirm that to the best of our knowledge:

 

a)  The condensed unaudited consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting;

 

b) The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events and their impact during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

 

c)  The interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

 

Balances with related parties at 30 September 2021, 30 September 2020 and 31 March 2021 are disclosed in Note 23.

 

A list of current Directors is maintained at 5 Hanover Square, London, W1S 1HQ and at www.helical.co.uk.

 

The half year statement was approved by the Board on 23 November 2021 and is available from the Company's registered office at 5 Hanover Square, London, W1S 1HQ and on the Company's website at www.helical.co.uk.

 

 

 

On behalf of the Board

 

Tim Murphy
Finance Director

23 November 2021

 

 

Independent Review Report to the Members of Helical plc

 

Introduction

 

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2021 which comprises the Unaudited Consolidated Income Statement, Unaudited Consolidated Statement of Comprehensive Income, Unaudited Consolidated Balance Sheet, Unaudited Consolidated Cash Flow Statement and Unaudited Consolidated Statement of Changes in Equity, and related Notes 1 to 28. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

Directors' Responsibilities

 

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

As disclosed in Note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the United Kingdom. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting as adopted by the United Kingdom.

 

Our Responsibility

 

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of Review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Financial Reporting Council for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2021 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the United Kingdom and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority. 

 

 

 

 

Use of Our Report

 

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Financial Reporting Council. Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

 

 

 

 

Deloitte LLP

Statutory Auditor

London, United Kingdom

23 November 2021

 

 

Unaudited Consolidated Income Statement

 

For the Half Year to 30 September 2021

 

 

Notes

Half Year to

30 September 2021

£000

Half Year to

30 September 2020

£000

Year to

31 March

2021

£000

Revenue

3

25,099

19,320

38,596

Cost of sales

3

(10,041)

(7,318)

(12,987)

Net property income

4

15,058

12,002

25,609

Share of results of joint ventures

12

6,244

(959)

2,352

Gross profit before net gain/(loss) on sale and revaluation of Investment properties

 

21,302

11,043

27,961

Loss on sale of Investment properties

5

(88)

(4)

(1,341)

Revaluation of Investment properties

11

19,906

(6,019)

19,387

Gross profit

 

41,120

5,020

46,007

Administrative expenses

6

(7,142)

(5,215)

(14,416)

Operating profit/(loss)

 

33,978

(195)

31,591

Finance costs

7

(7,535)

(7,236)

(14,079)

Finance income

 

2

20

58

Change in fair value of derivative financial instruments

20

4,552

(5,333)

2,938

Profit/(loss) before tax

 

30,997

(12,744)

20,508

Tax on profit/(loss) on ordinary activities

8

(8,809)

1,983

(2,631)

Profit/(loss) for the period

 

22,188

(10,761)

17,877

 

 

 

 

 

Earnings/(loss) per share

10

 

 

 

Basic

 

18.2p

(8.9)p

14.8p

Diluted

 

18.0p

(8.9)p

14.5p

 

Unaudited Consolidated Statement of Comprehensive Income

 

For the Half Year to 30 September 2021

 

 

Half Year to

30 September 2021

£000

Half Year to

30 September 2020

£000

Year to

31 March

2021

£000

Profit/(loss) for the period

22,188

(10,761)

17,877

Total comprehensive income/(expense) for the period

22,188

(10,761)

17,877

 

 

 

Unaudited Consolidated Balance Sheet

 

At 30 September 2021

 

 

Notes

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Non-current assets

 

 

 

 

Investment properties

11

761,268

815,680

740,207

Owner occupied property, plant and equipment

 

5,003

5,724

5,362

Investment in joint ventures

12

82,845

69,607

79,953

Other investments

13

354

-

-

Derivative financial instruments

20

1,492

58

171

 

 

850,962

891,069

825,693

Current assets

 

 

 

 

Land and developments

14

66

52

448

Corporation tax receivable

 

-

1,452

-

Trade and other receivables

15

38,581

45,447

40,427

Cash and cash equivalents

16

134,751

62,284

154,448

 

 

173,398

109,235

195,323

Total assets

 

1,024,360

1,000,304

1,021,016

Current liabilities

 

 

 

 

Trade and other payables

17

(30,572)

(32,808)

(46,764)

Lease liability

18

(646)

(622)

(634)

Corporation tax payable

 

(563)

-

(655)

 

 

(31,781)

(33,430)

(48,053)

Non-current liabilities

 

 

 

 

Borrowings

19

(336,825)

(354,545)

(336,703)

Derivative financial instruments

20

(4,382)

(15,760)

(7,601)

Lease liability

18

(6,604)

(7,250)

(6,929)

Deferred tax liability

8

(22,184)

(10,087)

(13,569)

 

 

(369,995)

(387,642)

(364,802)

Total liabilities

 

(401,776)

(421,072)

(412,855)

 

 

 

 

 

Net assets

 

622,584

579,232

608,161

 

 

 

 

 

Equity

 

 

 

 

Called-up share capital

21

1,489

1,478

1,478

Share premium account

 

112,600

107,990

107,990

Revaluation reserve

 

184,222

165,445

164,316

Capital redemption reserve

 

7,478

7,478

7,478

Own shares held

 

-

(1,542)

-

Other reserves

 

291

291

291

Retained earnings

 

316,504

298,092

326,608

Total equity

 

622,584

579,232

608,161

 

 

Unaudited Consolidated Cash Flow Statement

 

For the Half Year to 30 September 2021

 

 

Half Year to

30 September 2021

£000

Half Year to

30 September 2020

£000

Year to

31 March

2021

£000

Cash flows from operating activities

 

 

 

Profit/(loss) before tax

30,997

(12,744)

20,508

Adjustment for:

 

 

 

Depreciation

386

400

791

Revaluation (surplus)/deficit on Investment properties

(19,906)

6,019

(19,387)

Letting cost amortisation

109

4

19

Loss on sale of Investment properties

88

4

1,341

Profit on sale of plant and equipment

(11)

(14)

(14)

Net financing costs

7,533

7,216

14,021

Change in value of derivative financial instruments

(4,552)

5,333

(2,938)

Share based payment charge

1,063

314

2,031

Share of results of joint ventures

(6,244)

959

(2,352)

Cash inflows from operations before changes in working capital

9,463

7,491

14,020

Change in trade and other receivables

1,752

1,935

(2,554)

Change in land, developments and trading properties

382

800

404

Change in trade and other payables

(7,891)

(2,837)

3,758

Cash inflows generated from operations

3,706

7,389

15,628

Finance costs

(6,813)

(6,609)

(12,902)

Finance income

2

20

58

Tax received/(paid)

12

(35)

1,219

 

(6,799)

(6,624)

(11,625)

Net cash (used by)/generated from operating activities

(3,093)

765

4,003

Cash flows from investing activities

 

 

 

Additions to Investment property

(9,815)

(12,945)

(16,306)

Purchase of other investments

(354)

-

-

Net (costs)/proceeds from sale of Investment property

(88)

(4)

113,207

Investments in joint ventures and subsidiaries

-

(7,014)

(7,414)

Dividends from joint ventures

3,352

10,267

10,266

Sale of plant and equipment

43

23

23

Purchase of leasehold improvements, plant and equipment

(59)

(125)

(156)

Net cash (used by)/generated from investing activities

(6,921)

(9,798)

99,620

Cash flows from financing activities

 

 

 

Borrowings drawn down

50,000

10,815

12,339

Borrowings repaid

(50,400)

(5,000)

(25,000)

Finance lease repayments

(311)

(301)

(610)

Shares issued

11

13

13

Purchase of own shares

-

(1,542)

-

Sale of own shares

52

-

25

Equity dividends paid

(9,035)

(7,254)

(10,528)

Net cash used by financing activities

(9,683)

(3,269)

(23,761)

Net (decrease)/increase in cash and cash equivalents

(19,697)

(12,302)

79,862

Cash and cash equivalents at start of period

154,448

74,586

74,586

Cash and cash equivalents at end of period

134,751

62,284

154,448

 

 

 

Unaudited Consolidated Statement of Changes in Equity

 

At 30 September 2021

 

 

Share

capital

£000

Share

premium

£000

Revaluation

reserve

£000

Capital

redemption

reserve

£000

Other

reserves

£000

Retained earnings

£000

Total

£000

At 31 March 2020

1,465

103,522

171,464

7,478

291

314,469

598,689

Total comprehensive income

-

-

-

-

-

17,877

17,877

Revaluation surplus

-

-

19,387

-

-

(19,387)

-

Realised on disposal

-

-

(26,535)

-

-

26,535

-

Issued share capital

13

4,468

-

-

-

-

4,481

Performance Share Plan

-

-

-

-

-

2,031

2,031

Performance Share Plan - deferred tax

-

-

-

-

-

66

66

Share settled Performance Share Plan

-

-

-

-

-

(3,335)

(3,335)

Share settled bonus

-

-

-

-

-

(1,145)

(1,145)

Profit on sales of shares

-

-

-

-

-

25

25

Dividends paid

-

-

-

-

-

(10,528)

(10,528)

At 31 March 2021

1,478

107,990

164,316

7,478

291

326,608

608,161

Total comprehensive income

-

-

-

-

-

22,188

22,188

Revaluation surplus

-

-

19,906

-

-

(19,906)

-

Issued share capital

11

4,610

-

-

-

-

4,621

Performance Share Plan

-

-

-

-

-

1,063

1,063

Performance Share Plan - deferred tax

-

-

-

-

-

155

155

Share settled Performance Share Plan

-

-

-

-

-

(3,591)

(3,591)

Share settled bonus

-

-

-

-

-

(1,030)

(1,030)

Profit on sales of shares

-

-

-

-

-

52

52

Dividends paid

-

-

-

-

-

(9,035)

(9,035)

At 30 September 2021

1,489

112,600

184,222

7,478

291

316,504

622,584

         

 

For a breakdown of Total comprehensive income see the Unaudited Consolidated Statement of Comprehensive Income.

 

The adjustment to retained earnings of £1,063,000 (31 March 2021: £2,031,000) adds back the share based payments charge recognised in the Unaudited Consolidated Income Statement, in accordance with IFRS 2 Share Based Payments.

 

There were net transactions with owners of £7,765,000 (31 March 2021: £8,405,000) made up of the Performance Share Plan credit of £1,063,000 (31 March 2021: £2,031,000) and related deferred tax credit of £155,000 (31 March 2021: £66,000), dividends paid of £9,035,000 (31 March 2021: £10,528,000), the issued share capital of £11,000 (31 March 2021: £13,000) and corresponding share premium of £4,610,000 (31 March 2021: £4,468,000), share settled Performance Share Plan awards charge of £3,591,000 (31 March 2021: £3,335,000), the share settled bonus awards charge of £1,030,000 (31 March 2021: £1,145,000) and the profit on the sale of shares of £52,000 (31 March 2021: £25,000).

 

 

 

Share

capital

£000

Share

premium

£000

Revaluation

reserve

£000

Capital

redemption

reserve

£000

Own shares held

£000

Other

reserves

£000

Retained earnings

£000

Total

£000

At 31 March 2020

1,465

103,522

171,464

7,478

-

291

314,469

598,689

Total comprehensive expense

-

-

-

-

-

-

(10,761)

(10,761)

Revaluation deficit

-

-

(6,019)

-

-

-

6,019

-

Issued share capital

13

4,468

-

-

-

-

-

4,481

Performance Share Plan

-

-

-

-

-

-

314

314

Performance Share Plan - deferred tax

-

-

-

-

-

-

(214)

(214)

Purchase of own shares

-

-

-

-

(1,542)

-

-

(1,542)

Share settled Performance Share Plan

-

-

-

-

-

-

(3,335)

(3,335)

Share settled bonus

-

-

-

-

-

-

(1,146)

(1,146)

Dividends paid

-

-

-

-

-

-

(7,254)

(7,254)

At 30 September 2020

1,478

107,990

165,445

7,478

(1,542)

291

298,092

579,232

          

 

The adjustment to retained earnings of £314,000 adds back the share based payments charge recognised in the Unaudited Consolidated Income Statement, in accordance with IFRS 2 Share Based Payments.

 

There were net transactions with owners of £8,696,000 made up of the Performance Share Plan credit of £314,000 and related deferred tax charge of £214,000, share settled Performance Share Plan charge of £3,335,000, share settled bonus awards charge of £1,146,000, dividends paid of £7,254,000, the issued share capital of £13,000 and corresponding share premium of £4,468,000 and the purchase of own shares of £1,542,000.

 

 

Unaudited Notes to the Half Year Results

 

1.  Financial Information

 

The financial information contained in this statement does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The full accounts for the year ended 31 March 2021, which were prepared under International Financial Reporting Standards as adopted by the European Union and which received an unqualified report from the Auditors, and did not contain a statement under Section 498(2) or Section 498(3) of the Companies Act 2006, have been filed with the Registrar of Companies. The consolidated financial statements for the year ended 31 March 2022 will be prepared in accordance with the United Kingdom adopted International Financial Reporting Standards.

 

These interim condensed unaudited consolidated financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2021.

 

These interim condensed unaudited consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the United Kingdom. The same accounting policies and methods of computation are followed in the 30 September 2021 interim condensed unaudited consolidated financial statements as in the most recent annual financial statements, with the addition of an accounting policy for other investments below:

 

Other Investments

 

Other investments are measured at fair value with changes in the fair value recognised in the Income Statement in the period in which they arise.

 

Going Concern

 

The Directors have considered the appropriateness of adopting a going concern basis in preparing the condensed unaudited financial statements. Their assessment is based on forecasts for the next 12 month period, with the potential impact of Covid-19 being an area of focus and including severe but plausible downside scenarios on the principal risks and uncertainties.

The key assumptions used in the review are summarised below:

• The Group's rental income receipts were modelled for each tenant on an individual basis;

• Existing loan facilities remain available, but no new financing is arranged; and

• Free cash is utilised to repay debt/cure bank facility covenants.

The results of this review demonstrated the following:

• The Group has £336.5m of cash and undrawn bank facilities, including in joint ventures, at 30 September 2021;

• The forecasts show that all bank facility financial covenants will be met throughout the review period, with headroom to withstand a 27% fall in rental income;

• The Group could withstand receiving no rental income during the going concern period (excluding the impact on income covenants);

• Property values could fall by 36% before loan to value covenants come under pressure; and

• Whilst the Group has a WAULT of 6.6 years, in a downside scenario whereby all tenants with lease expiries or break options in the going concern period exercise their breaks or do not renew at the end of their lease, and with no vacant space let or re-let, the rental income covenants would be met throughout the review period;

• Asset sales could be utilised to generate additional cash to repay debt, materially increasing covenant headroom.

 

Based on this analysis, the Directors have adopted a going concern basis in preparing the condensed unaudited financial statements for the period ended 30 September 2021.

 

Principal Risks and Uncertainties 

 

The responsibility for the governance of the Group's risk profile lies with the Board of Directors of Helical. The Board is responsible for setting the Group's risk strategy by assessing risks, determining its willingness to accept those risks and ensuring that the risks are monitored and that the Group is aware of and, if appropriate, reacts to changes in those risks. The Board is also responsible for allocating responsibility for risk within the Group's management structure.

 

The Group considers its principal risks to be:

 

Strategic Risks - external risks that could prevent the Group delivering its strategy. These risks principally impact our decision to purchase or exit from a property asset.

 

Financial Risks - risks that could prevent the Group from funding its chosen strategy, both in the long and short-term.

 

Operational Risks - internal risks that could prevent the Group from delivering its strategy.

 

Reputational Risks - risks that could affect the Group in all aspects of its strategy.

 

There have been no significant changes to these risks and further analysis is included within the Group's Annual Report and Accounts 2021.

 

2.  Revenue from Contracts with Customers

 

 

Half Year to

30 September 2021

£000

Half Year to

30 September 2020

£000

Year to

31 March

2021

£000

Development property income

4,951

1,251

1,700

Service charge income

4,423

4,649

8,841

Other revenue

-

-

48

Total revenue from contracts with customers

9,374

5,900

10,589

 

The total revenue from contracts with customers is the revenue recognised in accordance with IFRS 15 Revenue from Contracts with Customers.

 

No impairment of contract assets was recognised in the half year to 30 September 2021 (half year to 30 September 2020: £nil, year to 31 March 2021: £140,000).

 

3.  Segmental Information

 

The Group identifies two discrete operating segments whose results are regularly reviewed by the Chief Operating Decision Maker (the Chief Executive) to allocate resources to these segments and to assess their performance. The segments are:

 

• Investment properties, which are owned or leased by the Group for long-term income and for capital appreciation; and

• Development properties, which include sites, developments in the course of construction, completed developments available for sale, and pre-sold developments.
 

Revenue

Investments

Half Year to 30.09.21

£000

Developments

Half Year to

30.09.21

£000

Total

Half Year to

30.09.21

£000

Investments

Half Year to 30.09.20

£000

Developments

Half Year to

30.09.20

£000

Total

Half Year to

30.09.20

£000

Rental income

15,725

-

15,725

13,420

-

13,420

Service charge income

4,423

-

4,423

4,649

-

4,649

Development property income

-

4,951

4,951

-

1,251

1,251

Revenue

20,148

4,951

25,099

18,069

1,251

19,320

 

 

Revenue

Investments Year to

31.03.21

£000

Developments

Year to

31.03.21

£000

Total

Year to

31.03.21

£000

Rental income

28,007

-

28,007

Service charge income

8,841

-

8,841

Development property income

-

1,700

1,700

Other revenue

48

-

48

Revenue

36,896

1,700

38,596

 

Cost of sales

Investment

Half Year to

30.09.21

£000

Developments

Half Year to

30.09.21

£000

Total

Half Year to

30.09.21

£000

Investment

Half Year to

30.09.20

£000

Developments

Half Year to

30.09.20

£000

Total

Half Year to

30.09.20

£000

Rents payable

(76)

-

(76)

(122)

-

(122)

Property overheads

(1,636)

-

(1,636)

(1,348)

-

(1,348)

Service charge expense

(4,423)

-

(4,423)

(4,649)

-

(4,649)

Development cost of sales

-

(3,651)

(3,651)

-

(917)

(917)

Development sales expenses

-

(90)

(90)

-

(1)

(1)

Expected credit loss provision

-

(165)

(165)

-

(281)

(281)

Cost of sales

(6,135)

(3,906)

(10,041)

(6,119)

(1,199)

(7,318)

        

 

Cost of sales

Investments Year to

31.03.21

£000

Developments

Year to

31.03.21

£000

Total

Year to

31.03.21

£000

Rents payable

(232)

-

(232)

Property overheads

(2,810)

-

(2,810)

Service charge expense

(8,841)

-

(8,841)

Development cost of sales

-

(1,018)

(1,018)

Development sales expenses

-

(4)

(4)

Expected credit loss provision

-

(82)

(82)

Cost of sales

(11,883)

(1,104)

(12,987)

 

 

Profit/(loss) before tax

Investments

Half Year to 30.09.21

£000

Developments

Half Year to

30.09.21

£000

Total

Half Year to

30.09.21

£000

Investments

Half Year to 30.09.20

£000

Developments

Half Year to

30.09.20

£000

Total

Half Year to

30.09.20

£000

Net property income

14,013

1,045

15,058

11,950

52

12,002

Share of results of joint ventures

6,863

(619)

6,244

615

(1,574)

(959)

Gain/(loss) on sale and revaluation of Investment properties

19,818

-

19,818

(6,023)

-

(6,023)

Segmental profit/(loss)

40,694

426

41,120

6,542

(1,522)

5,020

Gross profit

 

 

41,120

 

 

5,020

Administrative expenses

 

 

(7,142)

 

 

(5,215)

Net finance costs

 

 

(7,533)

 

 

(7,216)

Change in fair value of derivative financial instruments

 

 

4,552

 

 

(5,333)

Profit/(loss) before tax

 

 

30,997

 

 

(12,744)

        

 

 

 

Profit before tax

Investments

Year to

31.03.21

£000

Developments

Year to

31.03.21

£000

Total

Year to

31.03.21

£000

Net property income

24,965

596

25,561

Share of results of joint ventures

4,389

(2,037)

2,352

Gain on sale and revaluation of Investment properties

18,046

-

18,046

Segmental profit/(loss)

47,400

(1,441)

45,959

Other operating income

 

 

48

Gross profit

 

 

46,007

Administrative expenses

 

 

(14,416)

Net finance costs

 

 

(14,021)

Change in fair value of derivative financial instruments

 

 

2,938

Profit before tax

 

 

 

Net assets

Investments

at 30.09.21

£000

Developments

at 30.09.21

£000

Total

at 30.09.21

£000

Investments

at 30.09.20

£000

Developments

at 30.09.20

£000

Total

at 30.09.20

£000

Investment properties

761,268

-

761,268

815,680

-

815,680

Land and developments

-

66

66

-

52

52

Investment in joint ventures

79,094

3,751

82,845

63,390

6,217

69,607

 

840,362

3,817

844,179

879,070

6,269

885,339

Other assets

 

 

180,181

 

 

114,965

Total assets

 

 

1,024,360

 

 

1,000,304

Liabilities

 

 

(401,776)

 

 

(421,072)

Net assets

 

 

622,584

 

 

579,232

 

 

Net assets

 

Investments

at 31.03.21

£000

Developments

at 31.03.21

£000

Total

at 31.03.21

£000

Investment properties

740,207

-

740,207

Land and developments

-

448

448

Investment in joint ventures

74,165

5,788

79,953

 

814,372

6,236

820,608

Other assets

 

 

200,408

Total assets

 

 

1,021,016

Liabilities

 

 

(412,855)

Net assets

 

4.  Net Property Income

 

 

Half Year to

30 September 2021

£000

Half Year to

30 September 2020

£000

Year to

31 March

2021

£000

Gross rental income

15,725

13,420

28,007

Head rents payable

(76)

(122)

(232)

Property overheads

(1,636)

(1,348)

(2,810)

Net rental income

14,013

11,950

24,965

Development property income

4,951

1,251

1,700

Development cost of sales

(3,651)

(917)

(1,018)

Sales expenses

(90)

(1)

(4)

Expected credit loss provision

(165)

(281)

(82)

Development property profit

1,045

52

596

Other revenue

-

-

48

Other expense

-

-

-

Net property income

15,058

12,002

25,609

 

Included within Gross rental income above is £3,077,000 (September 2020: reduction of £589,000, March 2021: reduction of £389,000) of accrued income for rent free periods.

 

5.  Loss on Sale of Investment Properties

 

 

Half Year to

30 September 2021

£000

Half Year to

30 September 2020

£000

Year to

31 March

2021

£000

Net (costs)/proceeds from the sale of Investment properties

(88)

(4)

113,207

Book value (Note 11)

-

-

(111,883)

Tenants' incentives on sold Investment properties

-

-

(2,665)

Loss on sale of Investment properties

(88)

(4)

(1,341)

 

6.  Administrative Expenses

 

 

Half Year to

30 September 2021

£000

Half Year to

30 September 2020

£000

Year to

31 March

2021

£000

Administration costs

(4,712)

(4,803)

(9,276)

Performance related awards, including annual bonuses

(1,905)

(314)

(4,341)

National Insurance on performance related awards

(525)

(98)

(799)

Administrative expenses

(7,142)

(5,215)

(14,416)

 

7.  Finance Costs

 

 

Half Year to

30 September 2021

£000

Half Year to

30 September 2020

£000

Year to

31 March

2021

£000

Interest payable on bank loans and overdrafts

(5,212)

(5,489)

(10,697)

Other interest payable and similar charges

(2,323)

(1,747)

(3,382)

Finance costs

(7,535)

(7,236)

(14,079)

 

 

 

8.  Tax on Profit/(Loss) on Ordinary Activities

 

 

Half Year to

30 September 2021

£ 000

Half Year to

30 September 2020

£000

Year to

31 March

2021

£000

The tax charge is based on the profit/(loss) for the period and represents:

 

United Kingdom corporation tax at 19%

 

 

 

- Group corporation tax

-

-

(1,218)

- Adjustment in respect of prior periods

-

(1)

365

- Payment for losses

(39)

-

-

Current tax charge

(39)

(1)

(853)

 

 

 

 

Deferred tax

 

 

 

- Capital allowances

(2,246)

(720)

(398)

- Tax losses

1,050

1,442

(794)

- Unrealised chargeable gains

(6,638)

1,132

338

- Other temporary differences

(936)

130

(924)

Deferred tax (charge)/credit

(8,770)

1,984

(1,778)

Total tax (charge)/credit for period

(8,809)

1,983

(2,631)

 

 

Deferred tax

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Capital allowances

(6,786)

(4,862)

(4,540)

Tax losses

2,074

3,260

1,024

Unrealised chargeable gains

(20,150)

(12,718)

(13,512)

Other temporary differences

2,678

4,233

3,459

Deferred tax liability

(22,184)

(10,087)

(13,569)

 

Under IAS 12 Income Taxes, deferred tax provisions are made for the tax that would potentially be payable on the realisation of Investment properties and other assets at book value.

 

If upon sale of the Investment properties the Group retained all the capital allowances, the deferred tax provision in respect of capital allowances of £6,786,000 (net) would be released and further capital allowances of £72,780,000 (gross) would be available to reduce future tax liabilities.

 

The net deferred tax asset in respect of other temporary differences arises from tax relief available to the Group on the mark-to-market valuation of financial instruments, the future vesting of share awards and other timing differences.

 

The Finance Act 2020 included provisions to set the UK corporation tax rate to 19% from

1 April 2020 and accordingly the deferred tax at 31 March 2021 was calculated at this rate.

 

The Finance Act 2021 which was substantively enacted on 24 May 2021 included provisions to increase the rate further to 25% effective from 1 April 2023. In valuing the deferred tax balances at 30 September 2021 a combination of 19% and 25% has been used based on the expected periods of reversals.

 

 

9.  Dividends

 

 

Half Year to

30 September 2021

£000

Half Year to

30 September 2020

£000

Year to

31 March

2021

£000

Attributable to equity share capital

 

 

 

Ordinary

 

 

 

- Interim paid 2.70p per share

-

-

3,274

- Prior period final paid 7.40p per share (2020: 6.00p)

9,035

7,254

7,254

 

9,035


The interim dividend of 2.90 pence per share (30 September 2020: 2.70p per share) was approved by the Board on 23 November 2021 and will be paid on 31 December 2021 to Shareholders on the register on 3 December 2021. This interim dividend, amounting to £3,547,000, has not been included as a liability as at 30 September 2021.

 

10.  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 period. This is a different basis to the net asset per share calculations which are based on the number of shares at the period end.

 

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 share awards.

 

The earnings per share is calculated in accordance with IAS 33 Earnings per Share 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:

 

 

Half Year to

30 September 2021

£000

Half Year to

30 September 2020

£000

Year to

31 March

2021

£000

Ordinary shares in issue

122,325

121,266

121,266

Own shares held

-

(259)

-

Weighting adjustment

(481)

(563)

(282)

Weighted average ordinary shares in issue for calculation of basic and EPRA earnings per share

121,844

120,444

120,984

Weighted average ordinary shares issued on share settled bonuses

513

-

719

Weighted average ordinary shares to be issued under Performance Share Plan

1,136

-

1,434

Weighted average ordinary shares in issue for calculation of diluted earnings per share

123,493

120,444

123,137

 

 

£000

£000

£000

Earnings/(loss) used for calculation of basic and diluted earnings per share

22,188

(10,761)

17,877

Basic earnings/(loss) per share

18.2p

(8.9)p

14.8p

Diluted earnings/(loss) per share

18.0p

(8.9)p

14.5p

      

 

 

 

 

 

 

£000

£000

£000

Earnings/(loss) used for calculation of basic and diluted earnings per share

22,188

(10,761)

17,877

Net (gain)/loss on sale and revaluation of Investment properties

 

 

 

  - subsidiaries

(19,818)

6,023

(18,046)

  - joint ventures

(9,962)

(1,480)

(5,870)

Tax on profit on disposal of Investment properties

-

-

4,936

Loss on movement in share of joint ventures

22

768

767

Fair value movement on derivative financial instruments  - subsidiaries

(4,552)

5,333

(2,938)

Expense on cancellation of loans

719

-

-

Deferred tax on adjusting items

12,519

(1,071)

1,075

Earnings/(loss) used for calculations of EPRA earnings per share

1,116

(1,188)

(2,199)

 

 

 

 

EPRA earnings/(loss) per share

0.9p

(1.0)p

(1.8)p

     


The earnings used for the calculation of EPRA earnings per share include net rental income and development property profits but exclude investment and trading property gains.

 

11.  Investment Properties

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Book value at 1 April

740,207

819,573

819,573

Additions at cost

1,264

2,130

13,149

Disposals

-

-

(111,883)

Letting cost amortisation

(109)

(4)

(19)

Revaluation surplus/(deficit)

19,906

(6,019)

19,387

As at period end

761,268

815,680

740,207

 

All properties are stated at market value and are valued by professionally qualified external valuers (Cushman & Wakefield LLP) in accordance with the Valuation - Professional Standards, published by the Royal Institution of Chartered Surveyors. The fair value of the Investment properties are as follows:

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Book value

761,268

815,680

740,207

Lease incentives and costs included in trade and other receivables

22,297

18,874

18,815

Head leases capitalised

(2,140)

(2,154)

(2,147)

Fair value

781,425

832,400

756,875

 

Interest capitalised in respect of the refurbishment of Investment properties at 30 September 2021 amounted to £13,102,000 (30 September 2020: £13,102,000, 31 March 2021: £13,102,000). Interest capitalised during the period in respect of the refurbishment of Investment properties amounted to £nil (30 September 2020: £nil, 31 March 2021: £nil).

 

The historical cost of Investment property is £574,973,000 (30 September 2020: £648,053,000, 31 March 2021: £573,709,000).

 

 

12.  Joint Ventures

 

Share of results of joint ventures

Half Year to

30 September 2021

£000

Half Year to

30 September 2020

£000

Year to

31 March

2021

£000

Revenue

4,497

23,252

26,024

Gross rental income

105

87

156

Property overheads

(42)

(125)

(131)

Net rental income/(expense)

63

(38)

25

Gain on revaluation of Investment properties

9,962

2,032

6,423

Loss on sale of Investment properties

-

(552)

(553)

Development property loss

(41)

(504)

(948)

Gross profit

9,984

938

4,947

Administrative expenses

(230)

(292)

(432)

Operating profit

9,754

646

4,515

Interest payable on bank loans and overdrafts

(1,080)

(547)

(1,163)

Other interest payable and similar charges

(107)

(94)

(156)

Interest capitalised

919

-

514

Finance income

-

4

5

Profit before tax

9,486

9

3,715

Tax

(3,220)

(200)

(596)

Profit/(loss) after tax

6,266

(191)

3,119

Adjustment for Barts Square economic interest¹

(22)

(768)

(767)

Share of results of joint ventures

6,244

2,352

1 This adjustment reflects the impact of the consolidation of a joint venture at its economic interest of 47.0% (30 September 2020: 47.0%, 31 March 2021: 47.0%) rather than its actual ownership interest of 33.3%.

 

 

Investment in joint ventures

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Summarised balance sheets

 

 

 

Non-current assets

 

 

 

Investment properties

111,732

70,228

86,817

Owner occupied property, plant and equipment

41

24

41

 

111,773

70,252

86,858

Current assets

 

 

 

Land and developments

12,369

19,184

16,545

Trade and other receivables

2,003

1,805

1,661

Cash and cash equivalents

4,533

9,163

7,781

 

18,905

30,152

25,987

Current liabilities

 

 

 

Trade and other payables

(8,700)

(13,105)

(7,098)

Borrowings

(8,293)

-

(11,455)

 

(16,993)

(13,105)

(18,553)

Non-current liabilities

 

 

 

Trade and other payables

(405)

(4,414)

(408)

Borrowings

(21,216)

(12,241)

(8,014)

Leasehold interest

(4,680)

-

(4,584)

Deferred tax

(4,632)

(1,130)

(1,422)

 

(30,933)

(17,785)

(14,428)

Net assets pre-adjustment

82,752

69,514

79,864

Acquisition costs

93

93

89

Investment in joint ventures

82,845

79,953

 

 

 

The fair value of Investment properties at 30 September 2021 is as follows:

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Book value

111,732

70,228

86,817

Lease incentives and costs included in trade and other receivables

151

88

119

Head leases capitalised

(4,406)

(4,308)

(4,420)

Fair value

107,477

66,008

82,516

 

13.  Other Investments

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Book value at 1 April

-

-

-

Acquisitions

354

-

-

As at period end

354

-

-

 

On 6 August 2021, the Group entered into a commitment of £1,000,000 to invest in the Pi Labs European PropTech venture capital fund ("Fund") of which £354,000 was invested in the period. The Fund is focused on investing in the next generation of proptech businesses.

 

The fair value of the Group's investment is based on the net asset value of the Fund, representing Level 2 fair value measurement as defined in IFRS 13 Fair Value Measurement.

 

14.  Land and Developments

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Development properties

66

52

448


The Directors' valuation of development stock shows a surplus of £578,000 (30 September 2020: £578,000, 31 March 2021: £578,000) above book value. This surplus has been included in the EPRA net tangible asset value (Note 22).

 

No interest has been capitalised or included in land and developments.

 

15.  Trade and Other Receivables

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Trade receivables

12,088

14,437

17,426

Other receivables

663

7,382

544

Prepayments

4,862

4,071

4,597

Accrued income

20,968

19,557

17,860

Total trade and other receivables

38,581

45,447

40,427

 

Included in accrued income are lease incentives of £20,311,000 (30 September 2020: £18,874,000, 31 March 2021: £17,179,000).

 

 

16.  Cash and Cash Equivalents

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Cash held at managing agents

3,245

5,545

3,289

Restricted cash

63,534

12,909

72,878

Cash deposits

67,972

43,830

78,281

Total cash and cash equivalents

134,751

62,284

154,448

 

Restricted cash is made up of cash held by solicitors and cash in restricted accounts.

 

17.  Trade and Other Payables

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Trade payables

13,288

13,477 

24,194

Other payables

3,214

3,539

1,879

Accruals

6,366

8,393

14,023

Deferred income

7,704

7,399

6,668

Total trade and other payables

30,572

32,808

46,764

 

18.  Lease Liability

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Current lease liability

646

622

634

Non-current lease liability

6,604

7,250

6,929

 

Included within the lease liability are £646,000 (30 September 2020: £622,000, 31 March 2021: £634,000) of current and £4,415,000 (30 September 2020: £5,060,000, 31 March 2021: £4,740,000) of non-current lease liabilities which relate to the long leasehold of the Group's head office.

 

19.  Borrowings

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Current borrowings

-

-

-

Borrowings repayable within:

 

 

 

- two to three years

65,000

48,085

49,705

- three to four years

271,825

226,361

286,998

- four to five years

-

80,099

-

Non-current borrowings

336,825

354,545

336,703

Total borrowings

336,825

354,545

336,703

 

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Total borrowings

336,825

354,545

336,703

Cash

(134,751)

(62,284)

(154,448)

Net borrowings

202,074

292,261

182,255

 

Net borrowings exclude the Group's share of borrowings in joint ventures of £29,509,000 (30 September 2020: £12,241,000, 31 March 2021: £19,469,000) and cash of £4,533,000 (30 September 2020: £9,163,000, 31 March 2021: £7,781,000). All borrowings in joint ventures are secured.

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Net assets

622,584

579,232

608,161

Gearing

32%

51%

30%

 

20.  Derivative Financial Instruments

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Derivative financial instruments asset

1,492

58

171

Derivative financial instruments liability

(4,382)

(15,760)

(7,601)

 

A gain on the change in fair value of £4,552,000 has been recognised in the Unaudited Consolidated Income Statement (30 September 2020: loss of £5,333,000, 31 March 2021: £2,938,000).

 

The fair values of the Group's outstanding interest rate swaps and caps have been estimated by calculating the present values of future cash flows, using appropriate market discount rates, representing Level 2 fair value measurements as defined in IFRS 13 Fair Value Measurement.

 

21.  Share Capital

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Authorised

39,577

39,577

39,577

 

The authorised share capital of the Company is £39,577,000 divided into ordinary shares of 1p each and deferred shares of 1/8p each.

 

Allotted, called up and fully paid: 

 

 

 

- 122,325,413 (30 September 2020: 121,265,710, 31 March 2021: 121,265,710)  ordinary shares of 1p each

1,224

1,213

1,213

- 212,145,300 deferred shares of 1/8p each

265

265

265

 

1,489

1,478

1,478

 

 

 

22.  Net Assets Per Share

 

 

At

30 September 2021

£000

Number of shares

000

 

 

 

 

p

At

31 March

2021

£000

Number of shares

000

p

IFRS net assets

622,584

122,325

 

608,161

121,266

 

Adjustments:

 

 

 

 

 

 

-  deferred shares

(265)

 

 

(265)

 

 

Basic net asset value

622,319

122,325

509

607,896

121,266

501

-  share settled bonus

 

513

 

 

718

 

-  dilutive effect of Performance Share Plan

 

1,130

 

 

1,519

 

Diluted net asset value

622,319

123,968

502

607, 896

123,503

492

 

Adjustments:

 

 

 

 

 

 

-  fair value of financial instruments

2,890

 

 

7,431

 

 

-  deferred tax

30,866

 

 

18,348

 

 

-  fair value of land and developments

578

 

 

578

 

 

-  real estate transfer tax

60,250

 

 

56,877

 

 

EPRA net reinstatement value

716,903

123,968

578

691,130

123,503

560

-  real estate transfer tax

(25,817)

 

 

(24,862)

 

 

-  deferred tax

(7,871)

 

 

(7,605)

 

 

EPRA net tangible asset value

683,215

123,968

551

 658,663

123,503

533

-  real estate transfer tax

(34,433)

 

 

(32,015)

 

 

-  deferred tax

7,871

 

 

7,605

 

 

EPRA net asset value

656,653

123,968

530

634,253

123,503

514

 

 

At

30 September 2021

£000

Number of shares

000

 

 

 

p

At

31 March

 2021

£000

Number of shares

000

p

Diluted net assets

622,319

123,968

502

607,896

123,503

492

 

Adjustments:

 

 

 

 

 

 

-  surplus on fair value of stock

578

 

 

578

 

 

-  fair value of fixed rate loan

(7,731)

 

 

(9,622)

 

 

EPRA net disposal value/EPRA triple net asset value

615,166

123,968

496

598,852

123,503

485

 

 

 

 

 

 

At

30 September 2020

£000

 

Number of shares

000

p

IFRS net assets

 

 

 

579,232

121,266

 

Adjustments:

 

 

 

 

 

 

-  deferred shares

 

 

 

(265)

 

 

-  own shares held

 

 

 

 

(437)

 

Basic net asset value

 

578,967

120,829

479

-  share settled bonus

 

 

 

 

719

 

-  dilutive effect of Performance Share Plan

 

 

 

 

537

 

Diluted net asset value

 

 

 

578,967

122,085

474

 

Adjustments:

 

 

 

 

 

 

-  fair value of financial instruments

 

 

 

15,702

 

 

-  deferred tax

 

 

 

15,381

 

 

-  fair value of land and developments

 

 

 

578

 

 

-  real estate transfer tax

 

 

 

60,867

 

 

 EPRA net reinstatement value

 

 

 

671,495

122,085

550

-  real estate transfer tax

 

 

 

(48,011)

 

 

-  deferred tax

 

 

 

(6,475)

 

 

 EPRA net tangible asset value

 

 

 

617,009

122,085

505

-  real estate transfer tax

 

 

 

(12,856)

 

 

-  deferred tax

 

 

 

6,475

 

 

 EPRA net asset value

 

 

 

610,628

122,085

500

 

 

 

 

 

At

30 September 2020

£000

 

Number of shares

000

p

Diluted net assets

 

 

 

578,967

122,085

474

 

Adjustments:

 

 

 

 

 

 

-  surplus on fair value of stock

 

 

 

578

 

 

-  fair value of fixed rate loan

 

 

 

(12,150)

 

 

 EPRA net disposal value/EPRA triple net asset value

 

 

 

567,395

122,085

465

        

 

The net asset values per share have been calculated in accordance with guidance issued by the European Public Real Estate Association ("EPRA").

 

The adjustments to the net asset value comprise the amounts relating to the Group and its share of joint ventures.

 

The calculation of EPRA net disposal value and triple net asset value per share reflects the fair value of all the assets and liabilities of the Group at 30 September 2021. One of the loans held by the Group is at a fixed rate and therefore not at fair value. The adjustment of £7,731,000 (30 September 2020: £12,150,000, 31 March 2021: £9,622,000) is the increase from book to fair value.

 

 

23.  Related Party Transactions

 

The following amounts were due from the Group's joint ventures:

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Charterhouse Place Limited

-

7,000

-

Charterhouse Street Limited

400

-

400

Barts Square companies

24

86

16

Old Street Holdings LP

3

3

3

Shirley Advance LLP

8

7

8

 

A development management, accounting and corporate services fee of £25,000 (30 September 2020: £25,000, 31 March 2021: £50,000) was charged by the Group to the Barts Square companies. In addition, a development management, accounting and corporate services fee of £425,000 (30 September 2020: £426,000, 31 March 2021: £850,000) was charged by the Group to the Charterhouse Place Limited group.

 

24.  See-through Analysis

 

Helical holds a significant proportion of its property assets in joint ventures with partners that provide a significant equity contribution, whilst relying on the Group to provide asset management or development expertise. Accounting convention requires Helical to account under IFRS for its share of the net results and net assets of joint ventures in limited detail in the Income Statement and Balance Sheet. Net asset value per share, a key performance measure used in the real estate industry, as reported in the financial statements under IFRS, does not provide Shareholders with the most relevant information on the fair value of assets and liabilities within an ongoing real estate company with a long-term investment strategy.

 

This analysis incorporates the separate components of the results of the consolidated subsidiaries and Helical's share of its joint ventures' results into a "see-through" analysis of its property portfolio, debt profile and the associated income streams and financing costs, to assist in providing a comprehensive overview of the Group's activities.

 

See-through Net Rental Income

Helical's share of the gross rental income, head rents payable and property overheads from property assets held in subsidiaries and in joint ventures is shown in the table below.

 

 

 

Half Year to

30 September 2021

£000

Half Year to

30 September 2020

£000

Year to

31 March

2021

£000

Gross rental income

- subsidiaries

15,725

13,420

28,007

 

- joint ventures

105

87

156

Total gross rental income

 

15,830

13,507

28,163

Rents payable

- subsidiaries

(76)

(122)

(232)

Property overheads

- subsidiaries

(1,636)

(1,348)

(2,810)

 

- joint ventures

(42)

(125)

(131)

See-through net rental income

 

14,076

11,912

24,990

      

 

 

 

See-through Net Development Profits/(Losses)

Helical's share of development profits/(losses) from property assets held in subsidiaries and in joint ventures is shown in the table below.

 

 

Half Year to

30 September 2021

£000

Half Year to

30 September 2020

£000

Year to

31 March

2021

£000

In parent and subsidiaries

1,210

333

678

In joint ventures

(41)

(504)

(948)

Total gross development profit/(loss)

1,169

(171)

(270)

Provision against stock

- subsidiaries

(165)

(281)

(82)

See-through development profits/(losses)

1,004

(452)

(352)

     

 

See-through Net Gain/(Loss) on Sale and Revaluation of Investment Properties

Helical's share of the net gain/(loss) on the sale and revaluation of Investment properties held in subsidiaries and joint ventures is shown in the table below.

 

 

 

Half Year to

30 September 2021

£000

Half Year to

30 September 2020

£000

Year to

31 March

2021

£000

Revaluation surplus/(deficit) on Investment properties

- subsidiaries

19,906

(6,019)

19,387

 

- joint ventures

9,962

2,032

6,423

Total revaluation surplus/(deficit)

 

29,868

(3,987)

25,810

Net loss on sale of Investment properties

- subsidiaries

(88)

(4)

(1,341)

 

- joint ventures

-

(552)

(553)

Total net loss on sale of Investment properties 

(88)

(556)

(1,894)

See-through net gain/(loss) on sale and revaluation of Investment properties

29,780

23,916

      

 

See-through Net Finance Costs

Helical's share of the interest payable, finance charges, capitalised interest and interest receivable on bank borrowings and cash deposits in subsidiaries and joint ventures is shown in the table below.

 

 

 

Half Year to

30 September 2021

£000

Half Year to

30 September 2020

£000

Year to

31 March

2021

£000

Interest payable on bank loans and overdrafts

- subsidiaries

5,212

5,489

10,697

 

- joint ventures

1,080

547

1,163

Total interest payable on bank loans and overdrafts

6,292

6,036

11.860

Other interest payable and similar charges

- subsidiaries

2,323

1,747

3,382

 

- joint ventures

107

94

156

Interest capitalised

- subsidiaries

-

-

-

 

- joint ventures

(919)

 

(514)

Total finance costs

 

7,803

7,877

14,884

Interest receivable and similar income

- subsidiaries

(2)

(20)

(58)

 

- joint ventures

-

(4)

(5)

See-through net finance costs

 

7,801

 

 

 

See-through Property Portfolio

Helical's share of the investment, land and development property portfolio in subsidiaries and joint ventures is shown in the table below.

 

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Investment property fair value

- subsidiaries

781,425

832,400

756,875

 

- joint ventures

107,477

66,008

82,516

Total Investment property fair value

 

888,902

898,408

839,391

Land and development stock

- subsidiaries

66

52

448

 

- joint ventures

12,369

19,184

16,545

Total land and development stock

 

12,435

19,236

16,993

Land and development stock surplus

- subsidiaries

578

578

578

Total land and development stock surpluses

 

578

578

578

Total land and development stock at fair value

 

13,013

19,814

17,571

See-through property portfolio

 

901,915

918,222

856,962

 

See-through Net Borrowings

Helical's share of borrowings and cash deposits in subsidiaries and joint ventures is shown in the table below.

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Gross borrowings more than one year

- subsidiaries

336,825

354,545

336,703

Total

 

336,825

354,545

336,703

Gross borrowings less than one year

- joint ventures

8,293

-

11,455

Gross borrowings more than one year

- joint ventures

21,216

12,241

8,014

Total

 

29,509

12,241

19,469

Cash and cash equivalents

- subsidiaries

(134,751)

(62,284)

(154,448)

 

- joint ventures

(4,533)

(9,163)

(7,781)

Total

 

(139,284)

(71,447)

(162,229)

See-through net borrowings

227,050

 

25.  See-through Net Gearing and Loan to Value

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Property portfolio

901,915

918,222

856,962

Net borrowings

227,050

295,339

193,943

Net assets

622,584

579,232

608,161

See-through net gearing

36.5%

51.0%

31.9%

See-through loan to value

25.2%

 

26.  Total Accounting Return

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Brought forward IFRS net assets

608,161

598,689

598,689

Carried forward IFRS net assets

622,584

579,232

608,161

Increase/(decrease) in IFRS net assets

14,423

(19,457)

9,472

Dividends paid

9,035

7,254

10,528

Total accounting return

23,458

(12,203)

20,000

Total accounting return percentage

3.9%

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

Brought forward EPRA net tangible assets

658,663

640,424

640,424

Carried forward EPRA net tangible assets

683,215

617,009

658,663

Increase/(decrease) in EPRA net tangible assets

24,552

(23,415)

18,239

Dividends paid

9,035

7,254

10,528

Total EPRA accounting return

33,587

(16,161)

28,767

Total EPRA accounting return percentage

5.1%

(2.5)%

 

27.  Total Property Return

 

 

At

30 September 2021

£000

At

30 September 2020

£000

At

31 March

2021

£000

See-through net rental income

14,076

11,912

24,990

See-through development profits/(losses)

1,004

(452)

(352)

See-through revaluation surplus/(deficit)

29,868

(3,987)

25,810

See-through net loss on sale of Investment properties

(88)

(556)

(1,894)

Total property return

44,860

6,917

48,554

 

28.  Capital Commitments

 

The Group has a commitment of £30,900,000 (30 September 2020: £65,134,000, 31 March 2021: £4,400,000), all of which relates to 33 Charterhouse Street, London EC1, due to be completed in the period to March 2023.

 

 

 

Appendix 1 - Glossary of Terms

 

Capital value (psf)

The open market value of the property divided by the area of the property in square feet.

 

Company or Helical or Group

Helical plc and its subsidiary undertakings.

 

Diluted figures

Reported amounts adjusted to include the effects of potential shares issuable under the Director and employee remuneration schemes.

 

Earnings per share (EPS)

Profit after tax divided by the weighted average number of ordinary shares in issue.

 

EPRA

European Public Real Estate Association.

 

EPRA earnings per share

Earnings per share adjusted to exclude gains/losses on sale and revaluation of Investment properties and their deferred tax adjustments, the tax on profit/loss on disposal of Investment properties, trading property profits/losses, movement in fair value of available-for-sale assets and fair value movements on derivative financial instruments, on an undiluted basis. Details of the method of calculation of the EPRA earnings per share are available from EPRA (see Note 10).

 

EPRA net assets per share

Diluted net asset value per share adjusted to exclude fair value surplus of financial instruments, and deferred tax on capital allowances and on Investment properties revaluation but including the fair value of trading and development properties in accordance with the best practice recommendations of EPRA (see Note 22).

 

EPRA net disposal value per share

Represents the Shareholders' value under a disposal scenario, where deferred tax, financial instruments and certain other adjustments are calculated to the full extent of their liability, net of any resulting tax (see Note 22).

 

EPRA net reinstatement value per share

Net asset value adjusted to reflect the value required to rebuild the entity and assuming that entities never sell assets. Assets and liabilities, such as fair value movements on financial derivatives, that are not expected to crystallise in normal circumstances and deferred taxes on property valuation surpluses are excluded (see Note 22).

 

EPRA net tangible assets per share

Assumes that entities buy and sell assets, thereby crystallising certain levels of unavoidable deferred tax, but excludes assets and liabilities, such as fair value movements on financial derivatives, that are not expected to crystallise in normal circumstances and deferred taxes on property valuation surpluses are excluded (see Note 22).

 

EPRA topped-up NIY

The current annualised rent, net of costs, topped-up for contracted uplifts, expressed as a percentage of the fair value of the relevant property.

 

EPRA triple net asset value per share

EPRA net asset value per share adjusted to include fair value of financial instruments and deferred tax on capital allowances and on Investment properties revaluation (see Note 22). 

 

 

Estimated rental value (ERV)

The market rental value of lettable space as estimated by the Group's valuers at each Balance Sheet date.

 

Gearing

Total borrowings less short-term deposits and cash as a percentage of net assets.

 

Initial yield

Annualised net passing rents on Investment properties as a percentage of their open market value.

 

Like-for-like valuation change

The valuation gain/loss, net of capital expenditure, on those properties held at both the previous and current reporting period end, as a proportion of the fair value of those properties at the beginning of the reporting period plus net capital expenditure.

 

MSCI INC. (MSCI IPD)

MSCI INC. is a company that produces independent benchmarks of property returns using its Investment Property Databank (IPD).

 

Net asset value per share (NAV)

Net assets divided by the number of ordinary shares at the Balance Sheet date (see Note 22).

 

Net gearing

Total borrowings less short-term deposits and cash as a percentage of net assets.

 

Passing rent

The annual gross rental income being paid by the tenant.

 

Reversionary yield

The income/yield from the full estimated rental value of the property on the market value of the property grossed up to include purchaser's costs, capital expenditure and capitalised revenue expenditure.

 

See-through/Group share

The consolidated Group and the Group's share in its joint ventures (see Note 24).

 

See-through net gearing

The see-through net borrowings expressed as a percentage of net assets (see Note 25).

 

Total Accounting Return

The growth in the net asset value of the Company plus dividends paid in the period, expressed as a percentage of net asset value at the start of the period (see Note 26).

 

Total Property Return

The total of net rental income, trading and development profits and net gain on sale and revaluation of Investment properties on a see-through basis (see Note 27).

 

Total Shareholder Return (TSR)

The growth in the ordinary share price as quoted on the London Stock Exchange plus dividends per share received for the period expressed as a percentage of the share price at the beginning of the period.

 

True equivalent yield

The constant capitalisation rate which, if applied to all cash flows from an Investment property, including current rent, reversions to current market rent and such items as voids and expenditures, equates to the market value. Assumes rent is received quarterly in advance.
 

Unleveraged returns

Total property gains and losses (both realised and unrealised) plus net rental income expressed as a percentage of the total value of the properties.

 

WAULT

The total contracted rent up to the first break, or lease expiry date, divided by the contracted annual rent.

 

 

HELICAL PLC

 

Registered in England and Wales No.156663

 

Registered Office:
5 Hanover Square
London

W1S 1HQ

 

T:  020 7629 0113

F:  020 7408 1666

 

E:  reception@helical.co.uk

 

www.helical.co.uk

 

 

 

 

 

 

 

 

 

 

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