Half Yearly Report

RNS Number : 2545Y
Helical Bar PLC
28 November 2014
 



 

H E L I C A L   B A R   P L C

("Helical"/"Company"/"Group")

28 November 2014

Half Year Results

For the Six Months to 30 September 2014

 

STRONG RESULTS WITH PLENTY TO COME

 

Financial Highlights:

 

Another excellent financial performance and strong shareholder returns

·      Profit before tax of £42.9m (2013: record £68.9m).

·      Total property return of £69.2m (2013: £88.5m):

-       Group's share of net rental income up 33% to £18.8m (2013: £14.1m).

-       Development profits of £15.6m (2013: £63.5m).

-       Net gain on sale and revaluation of investment properties of £34.8m (2013: £10.9m).

·      Adjusted diluted EPRA earnings per share of 11.5p (2013: 40.5p).

·      Diluted EPRA net asset value per share up 10.2% to 345p (31 March 2014: 313p).

·      Interim dividend payable of 2.10p per share (2013: 2.00p), up 5%.

 

Improved capital returns

·      Investment portfolio valuations increased by 6.5% on a like-for-like basis (4.9% including sales and purchases) during the period.

·      Group's share of property portfolio £919m (31 March 2014: £802m).

 

Strong financial position

·      £100m 4% Convertible Bond issued in June.

·      See-through LTV of 33% on a secured basis (31 March 2014: 36%) and 53% overall (31 March 2014: 46%).

·      Average maturity of the Group's share of debt of 3.5 years (31 March 2014: 3.9 years) at an average cost of 4.7% (31 March 2014: 4.5%).

·      Group's share of cash and undrawn bank facilities of £198m (31 March 2014: £186m).

 

Operational Highlights:

 

Development portfolio well placed to deliver good profits over next few years

·      Assignment of our purchase contract on 99 Clifton Street generates £14.7m profit.

·      At Barts Square, London EC1, 45 residential units exchanged on phase 1 out of 88 units released.

·      Lettings progress at The Bower, Old Street, London EC1.

·      C-Space, London EC1 and Creechurch Place, London EC3 under construction.

 

Growing investment portfolio

·      9.2% valuation increase on London offices and 8.8% valuation increase on regional offices.

·      Portfolio initial yield of 6.0% growing to 7.3% reversionary.

·      Acquisitions of £94m (excluding associated costs) of assets during the half year and £46m of assets sold. On average one new property was acquired every eight days during the period.

·      Investment portfolio now comprises 40% London offices, 35% retail, 13% industrial, 11% regional offices, 1% other.

 

Asset management activity

·      Helical's share of gross annualised passing rent from the investment portfolio has increased to £40.9m

·      (31 March 2014: £37.7m) with ERV of £57.1m (31 March 2014: £45.6m).

·      £2.0m of new lettings in period.

·      Like-for-like rents up £1.0m. Increase driven by new lettings and uplifts at lease renewal of £2.3m, offset by losses at lease end or expiry of £1.3m.

·      On average, the Group achieved a new letting or lease renewal every two days in the period.

·      £0.6m contracted rental increase in Churchgate and Lee House, Manchester.

 

 

 

Commenting on the results, Michael Slade, Chief Executive said:

 

"Our strategy of developing in Central London for sale or long term investment whilst maintaining a high yielding regional investment portfolio continues to bear fruit. As the UK economy strengthens outside of London and the South East we anticipate continuing to invest in regional assets both for their relatively high yield and the potential to create added value. Our development programme is expected to provide surpluses for the next three years as we complete and let our schemes.

 

Although the next 12 months are likely to be impacted by the usual hiatus in the run-up to the General Election and the subsequent flurry of activity which follows, as well as the ongoing uncertainty in the Eurozone and the global economy, we remain confident that our balance of assets held for income and capital gains, with strong exposure to London, provides shareholders with the prospect of substantial growth in value for the foreseeable future."

 

 

For further information, please contact:

 

Helical Bar plc

020 7629 0113

Michael Slade (Chief Executive)


Tim Murphy (Finance Director)




Address:

5 Hanover Square, London W1S 1HQ

Fax:

020 7408 1666

Website:

www.helical.co.uk



FTI Consulting

020 3727 1000

Stephanie Highett/Dido Laurimore/Clare Glynn


 

 

Half Year Results Presentation

 

Helical will be holding a presentation for analysts and investors at 9.30am (GMT), Friday 28 November 2014 at FTI Consulting, 200 Aldersgate, Aldersgate Street, London EC1A 4HD. The presentation will be on the Company's website www.helical.co.uk and a conference call facility will be available. The dial-in details are as follows:

 

Participants, local - London, United Kingdom:

+44 (0)20 3427 1905

Confirmation Code:

2716399

 

 

 

FINANCIAL HIGHLIGHTS

 


Notes


Half Year To

30 September 2014

Half Year To

30 September 2013

Year  To

31 March

2014

See-through Income Statement

1


£m

£m

£m

Net rental income



18.8

14.1

29.8

Development property profits



15.6

63.5

65.0

Trading property gains



-

-

0.3

Gain on revaluation of investment properties



33.4

10.9

36.4

Gain on sale of investment properties



1.4

-

8.6

Total property return



69.2

88.5

140.1







Profit before tax



42.9

68.9

101.7

EPRA earnings



6.5

40.9

38.9

 

Earnings Per Share and Dividends

2


 

Pence

 

Pence

 

Pence

Basic earnings per share



32.0

47.4

75.0

Diluted earnings per share



30.0

46.4

73.2

Diluted EPRA earnings per share



5.3

34.2

32.5

Adjusted diluted EPRA earnings per share

3


11.5

40.5

47.4

Dividends per share paid in period



4.75

3.70

5.70









 

 

At

30 September

2014

 

 

At

30 September

2013

 

 

At

31 March

2014

See-through Balance Sheet

4


£m

£m

£m

See-through property portfolio



918.8

684.1

801.7

See-through net borrowings



482.4

274.1

365.1

Net assets



369.1

305.5

340.5







Net assets per share, gearing and loan to value






Diluted EPRA net asset value per share

5


345p

282p

313p

See-through loan to value      - secured

6


33%

29%

36%

                                               - total

6


53%

40%

46%

See-through net gearing

7


131%

90%

107%

 

 

 

Notes

 

1.      Includes Group's share of income and gains of its subsidiaries and joint ventures. See Note 25.

2.      Calculated in accordance with IAS 33 and guidance issued by the European Public Real Estate Association ("EPRA").

3.      Diluted EPRA earnings per share adjusted for performance related awards.

4.      Includes Group's share of assets and liabilities of its subsidiaries and joint ventures. See Note 25.

5.      Calculated in accordance with guidance issued by EPRA.

6.      See-through loan to value is the ratio of see-through net borrowings to see-through property portfolio. See Note 25.

7.      See-through net gearing is the ratio of see-through net borrowings to net assets. See Note 25.

 

 

 

CHIEF EXECUTIVE'S STATEMENT

 

Helical's approach to real estate is to identify opportunities across the property spectrum which produce regular and growing rental income as well as development profits through the property cycle. We seek a balance between an investment portfolio that covers our operational and finance costs and dividends, and a development programme that, through the use of limited equity, looks to maximise returns.  This balance currently targets, and has achieved an investment portfolio representing 75% of our property assets and a development programme covering the remaining 25% which is capable of producing exceptional profits.

 

The first half continued the good progress of the Group with a strong financial performance from our diverse property portfolio. Our income producing portfolio continues to grow with net rents of £18.8m, up 33% on the corresponding period last year. The investment portfolio produced a revaluation surplus of £33.4m taking the gross value of the portfolio to £692m. The first half also saw the start of a rotation out of assets, mainly shopping centres, that have served us well since their acquisition in 2010 and 2011, and the reinvestment of the net receipts - together with the proceeds of the Convertible Bond - into high yielding distribution warehouses, out of town retail parks and regional offices, which we are confident offer a good blend of income and capital growth.

 

Our development portfolio continues to combine exceptional contributions from individual schemes with significant progress in delivering our programme of new and refurbished properties. At 99 Clifton Street, London EC2 we have forward sold an office development of 45,000 sq ft which is due to complete in summer 2015 for £38.25m having committed to purchase it on completion for £21m. An exceptional result. At Barts Square, London EC1 we have exchanged contracts on 45 of the 88 residential units released in September, from Phase 1 of the development, which is due to commence in January 2015 and complete in Q2 2017. We have equity funded, with a joint venture partner, our 271,000 sq ft office development at 1 Creechurch Place, London EC3 which is now under construction with completion due in October 2016.

 

At The Bower, Old Street, London EC1 works continue on phase one, refurbishing and extending The Warehouse and The Studio which have been pre-let. At C-Space, London EC1 we have started work to refurbish the building, increasing the office building from 50,000 sq ft to 62,000 sq ft.

 

We also continued to grow our overall portfolio, now valued at £919m up from £802m at 31 March 2014. In doing so we seek to maximise growth in net asset value per share, funding the increase in our portfolio size through the use of gearing. Our strategy with regard to gearing is to use debt on a tactical and judicious basis, in order to accentuate property performance when property returns are expected to materially outperform the cost of debt. We believe that this continues to be the most appropriate means by which we can grow our business at this point in the cycle. The £100m 4% Convertible Bond issued in June 2014 continues the move away from the use of secured borrowings, started in 2013 with the issue of the 6% £80m Retail Bond. We draw a distinction between secured borrowings, on which we have a net LTV of 33%, and unsecured forms of debt i.e. our retail and convertible bonds, which increase our overall LTV to 53%. This debt structure allows us to achieve the exposure to real estate that is commensurate with our business plan and objectives, whilst protecting the balance sheet from external headwinds.

 

Our strategy of developing in Central London for sale or long term investment whilst maintaining a high yielding regional investment portfolio continues to bear fruit. As the UK economy strengthens outside London and the South East, we anticipate continuing to invest in regional assets both for their relatively high yield and the potential to create added value. Our development programme is expected to provide surpluses for the next three years as we complete and let our schemes.

 

Although the next 12 months are likely to be impacted by the usual hiatus in the run-up to the General Election and the subsequent flurry of activity which follows, as well as the ongoing uncertainty in the Eurozone and the global economy, we remain confident that our balance of assets held for income and capital gains, with strong exposure to London, provides shareholders with the prospect of substantial growth in value for the foreseeable future.

 

 

Michael Slade

Chief Executive

28 November 2014

 

 

 

Financial Review

 

The half year to 30 September 2014 produced pre-tax profits for Helical of £42.9m, compared to last year's record first half profits of £68.9m.

 

See-through net rents from the Group's share of the property portfolio increased by 33% from £14.1m to £18.8m, comprising £16.4m (2013: £11.1m) from wholly owned assets and £2.4m (2013: £3.0m) from assets held in joint ventures.

 

On 30 September 2014, Helical exchanged contracts on the forward sale of 99 Clifton Street, London, EC2 for £38.25m allowing the Group to recognise £14.7m of development profit. Profits from the Group's retirement village programme of £1.0m and development management fees of £0.9m in respect of our schemes for Scottish Power in Glasgow and at Barts Square, London EC1 and The Bower, London EC1, were partially offset by a provision of £2.0m against our retail development at Europa Centralna, Poland. We recognised a further £1.2m on our foodstore development at Leisure Plaza, Milton Keynes. The Group's share of net development profits were £15.6m (2013: £63.5m).

 

The investment portfolio, including assets held in joint venture, rose 6.5% on a like-for-like basis (2013: 3.5%) and 4.9% after sales and purchases (2013: 2.3%), reflected as a gain on revaluation of £33.4m (2013: £10.9m). Sales of investment properties produced a gain of £1.4m (2013: £nil).


Administration costs, before performance related awards, increased to £5.0m (2014: £4.1m), mainly arising from Helical's office move to Hanover Square, London W1S from Farm Street, London W1J, its home for the previous 25 years, reflecting the increasing size of the Company. The results of the Group for the half year have increased expectations that awards issued by the long term performance share plan will vest in the next few years and that cash and deferred shares payable in accordance with the Group's bonus schemes will vest. Accordingly, based on these results, a total charge of £6.0m (2013: £6.6m) plus National Insurance has been made in these accounts to provide for the future vesting of these awards.

 

See-through net finance costs, excluding the interest payable on the retail bond and convertible bond, increased from £5.4m to £6.1m. Including interest accrued on the retail bond and convertible bond payable half yearly in December and June, and writing off the costs of raising the convertible bond, interest payable in the see-through net finance costs increased to £12.4m (2013: £6.7m).

 

The fall in medium and long term interest rate projections since the year end contributed to a £1.8m loss (2013: gain of £5.3m) on the fair value of the Group's share of derivative financial instruments. Exchange rate movements on the Group's share of the assets and liabilities relating to its Polish developments generated a loss of £0.2m (2013: £0.2m). Valuing the convertible bond at its fair value at 30 September 2014 gave rise to a surplus of £1.6m.

 

The net result for the half year was a pre-tax profit of £42.9m compared to a profit of £68.9m in the corresponding period last year. This profit resulted in adjusted diluted EPRA earnings per share of 11.5p (2013: 40.5p). Diluted EPRA earnings per share were 5.3p (2013: 34.2p). The Directors have declared an interim dividend of 2.10p (2013: 2.00p) an increase of 5%. This dividend will be paid on 30 December 2014 to shareholders on the register on 12 December 2014.

 

Net Assets

 

Net asset value increased by £28.6m from £340.5m at 31 March 2014 to £369.1m at 30 September 2014. EPRA net asset value per share at 30 September 2014 was 345p (31 March 2014: 313p), an increase of 10.2%. This increase was mainly due to the increase in the value of the investment portfolio as set out below.

 


EPRA

Net Assets

£000

EPRA

NAV per share

p

At 31 March 2014

377,186

312.6

EPRA earnings

6,516

5.3

Gain on sale and revaluation of investment portfolio

34,748

28.7

Increase in trading and development property surplus

5,431

4.5

Dividends paid in the period

(5,538)

(4.8)

Other items

(982)

(1.3)

At 30 September 2014

417,361

345.0

 

 

Financing

 

Since 31 March 2014, Helical has raised £100m through the issue of a five year convertible bond with a 4% coupon. It has used £30m to temporarily repay revolving credit facilities with the balance used to supplement the Group's cash resources. These were used to acquire two investment portfolios and a number of additional assets for a total of £99m. The composition of the Group's debt structure has significantly changed since 31 March 2013 with unsecured debt now representing 33% of debt drawn at 30 September 2014.

 

As at 30 September 2014 Helical's debt profile was as follows.

 

Facility Type

 

Total

Facility

Total

Utilised

Available

Facility

Net

LTV*

Weighted

Average

Interest

Rate

Average Maturity


£000

£000

£000

%

%

Years

Secured debt       - wholly owned

419,753

295,834

123,919

34.6

4.3

2.9

                            - in joint ventures

86,991

74,367

12,624

28.4

5.6

1.9

Total secured debt

506,744

370,201

136,543

33.2

4.6

2.7

Unsecured debt instruments

178,405

178,405

-

-

4.9

5.2

See-through debt

685,149

548,606

136,543

52.5

4.7

3.5

 

*Net LTV is the ratio of gross borrowings less cash deposits to the fair value of the property portfolio.

 

The Group's cash balances at 30 September 2014 were £47.0m with its share of cash in its joint ventures of £14.1m. In addition, the Group owned £120.0m of unsecured properties on which it could generate additional cash to invest.

 

The Group is protected from future interest rate rises through a combination of interest rate swaps and the fixed rate debt of the £80m 6% Retail Bond and the £100m 4% Convertible Bond. At 30 September 2014, the Group had £300m of interest rate swaps (including in joint ventures) at an average of 1.9% with an average maturity of 3 years.

 

 

Tim Murphy

Finance Director

28 November 2014

 

 

 

PROPERTY PORTFOLIO

 

 

Total Portfolio


31 March 2013

31 March 2014

30 September 2014

At Fair Value


£m

%

£m

%

£m

%

Investment


407.0

65.0

600.7

74.9

691.6

75.3

Development and trading


219.4

35.0

201.0

25.1

227.1

24.7

Total Portfolio


626.4

100.0

801.7

100.0

918.7

100.0

 

Investment Portfolio

At Fair Value


31 March 2013

31 March 2014

30 September 2014


£m

%

£m

%

£m

%

London Office


144.5

35.5

259.2

43.1

274.7

39.7

Retail


227.9

56.0

245.6

40.9

243.0

35.1

Industrial


12.2

3.0

12.4

2.1

89.1

12.9

Regional Office


16.3

4.0

76.1

12.7

77.4

11.2

Retirement Villages


6.1

1.5

7.4

1.2

7.4

1.1

Total


407.0

100.0

600.7

100.0

691.6

100.0

 

 

The investment portfolio currently comprises 75% of Helical's portfolio by fair value (75% at 31 March 2014).

 

 

Development and Trading Portfolio

At Fair Value


31 March 2013

31 March 2014

30 September 2014


£m

%

£m

%

£m

%

London Office


27.2

12.4

21.4

10.7

17.3

7.6

Retail


23.6

10.8

27.2

13.5

28.0

12.3

Industrial


1.4

0.6

0.4

0.2

0.2

0.1

Mixed Use


22.4

10.2

2.9

1.4

3.1

1.4

Change of Use


6.8

3.1

8.3

4.1

8.8

3.9

Residential


-

-

-

-

24.4

10.7

Retirement Villages


72.6

33.1

80.5

40.1

86.8

38.2

Poland


65.4

29.8

60.3

30.0

58.5

25.8

Total


219.4

100.0

201.0

100.0

227.1

100.0

 

 

The development portfolio comprises 25% of Helical's portfolio by fair value (25% at 31 March 2014).

Development and Trading Portfolio

 

 

 

Book Value

£m

 

 

Fair Valuation

£m

 

 

Surplus

£m

Office

9.5

17.3

7.8

Retail

26.0

28.0

2.0

Industrial

0.1

0.2

0.1

Mixed Use

3.1

3.1

-

Change of Use

4.9

8.8

3.9

Residential

22.4

24.4

2.0

Retirement Villages

71.5

86.8

15.3

Poland

56.7

58.5

1.8

Total

194.2

227.1

32.9

 

 

INVESTMENT PORTFOLIO OVERVIEW

 

At 30 September 2014, our income producing investment portfolio comprised 75% of our assets by fair value (78% by book value). The income stream from this portfolio has grown steadily since 2010 and is highly reversionary. The passing rent from our investment portfolio is £40.9m (31 March 2014: £37.7m) and the estimated rental value of the portfolio is £57.1m (31 March 2014: £45.6m). This reversionary income will be captured through letting vacant units and rent reviews over the next few years.

 

During the six months to 30 September 2014, and subsequently, we have sought to rotate our investment portfolio, selling those assets that we believe have served their purpose, providing good cash on cash returns, and reinvesting the proceeds, together with the cash received from the issue of the convertible bond, into other high yielding assets which we believe offer a greater expectation of capital growth.

 

Investment Property Portfolio Values

 

At 30 September 2014, the investment property portfolio was valued at £691.6m (31 March 2014: £600.7m), with £586.8m (31 March 2014: £493.2m) held in wholly owned subsidiaries and £104.8m (31 March 2014: £107.5m) held in joint ventures, as set out below.

 


Wholly Owned

In Joint Venture

See-Through


£000

£000

£000

Valuation at 31 March 2014

493,201

107,504

600,705

Acquisitions

98,596

-

98,596

Capital Expenditure

7,784

6,780

14,564

Disposals

(34,600)

-

(34,600)

Transfer to stock

-

(21,149)

(21,149)

Revaluation Surplus - Helical

21,700

11,650

33,350

         - Profit Share Partners

159

-

159

Valuation at 30 September 2014

586,840

104,785

691,625

 

Acquisitions

 

During the half year we acquired two portfolios of industrial and office investments. In April we acquired The Constellation Portfolio, a mixed-use portfolio for £40.2m, reflecting an 8.35% net initial yield. In August we acquired a portfolio of eleven industrial and distribution warehouse assets known as the Boss Portfolio for £29.7m, reflecting a net initial yield of 8.0% (excluding a vacant property at Rugby which was subsequently sold). In addition we purchased two retail warehouses in Harrogate and Stockport for £12.1m at a net initial yield of 6.95% and a regional distribution warehouse in Yate, Bristol, for £11.5m at a net initial yield of 10.1%.

 

Since 30 September 2014, we have acquired a distribution facility in Leighton Buzzard for £9.9m at a net initial yield of 7.85% and a distribution facility in Wolverhampton for £3.9m at a net initial yield of 8.75%. We have a further £28m of assets under offer to purchase. In total, these purchases will add £2.76m to our net rental income.

 

Capital Expenditure

 

We have a refurbishment and redevelopment programme upgrading and increasing space at a number of our investment properties.

 

 

 

Property

Capex Budget

(Helical Share)

£m

Current Total Space

Sq ft

Refurbished Space

Sq ft

New

Space

Sq ft

 

 

Completion Date

The Bower, Old St, London EC1

15.6

284,000

90,000

60,000

June 2015

New Loom House, London E1

5.0

112,000

20,000

-

October 2015

Churchgate & Lee House, Manchester

2.8

248,000

66,000

-

September 2015

One King Street, Hammersmith, London W6

2.2

35,000

5,000

4,000

April 2015

Morgan Quarter, Cardiff

4.1

226,000

30,000

20,000

December 2015

C Space, London EC1

10.6

50,000

50,000

12,000

June 2015

Corby Town Centre

7.5

781,000

10,000

19,000

September 2016

Artillery Lane, London, E1

3.5

17,000

17,000

2,000

July 2015

 

 

Disposals

 

During the half year to 30 September 2014, we sold The Guineas, Newmarket, a 142,000 sq ft town centre shopping centre for £18.3m; a research and development facility at Fordham, Newmarket for £15.9m; an office building in Preston for £1.7m; an office building in Milton Keynes for £2.6m; a Co-op supermarket in Doncaster for £0.9m; and a small unit in Corby for £0.3m. Total proceeds of £40.0m exceeded book value by £2.4m (4%) which netted down to a total profit on disposal of £1.4m after sale costs.

 

Since 30 September 2014 we have exchanged or completed on the sale of retail assets in Sutton-in-Ashfield and Basildon for £25.7m, industrial units in Leicester, Slough and Rugby for £7.6m and an office in Botleigh for £4.6m. Total sales value was marginally above book value.

 

Revaluation Surplus

 

Valuation movements, yields, capital values and other relevant portfolio metrics relating to the investment portfolio are noted in the table below. These metrics include Helical's share of all investment properties.

 

 


Percentage of investment portfolio

%

Valuation increase/

decrease (like-for-like)

%

Valuation increase/

decrease

(inc. sales & purchases)

%

Initial yield

%

Reversionary yield

%

Average unexpired lease term

Years

Vacancy rate (floor area)

%

ERV change since March 2014

%

Capital value psf

£











London office

39.7

10.9

9.2

4.1

6.5

6.3

23.0

3.6

450

Retail

35.1

0.6

0.5

7.0

7.8

7.5

3.3

0.7

137

Industrial

12.9

10.0

0.6

7.7

7.4

4.9

0.0

0.0

60

Regional offices

11.2

10.8

8.8

5.9

8.0

6.5

11.8

0.4

152

Other

1.1

0.0

6.3

-

-

-

-

-

-

Total

100.0

6.5

4.9

6.0

7.3

6.3

6.0

1.4

146

 

 

Asset Management

 

During the half year, contracted income increased by £1.0m as a result of new lettings and rent reviews, net of losses from breaks and expiries (31 March 2014: £0.4m).

 

We concluded £2.0m of new lettings and an uplift at lease renewal of £0.3m (6.4% of rent roll), more than offsetting the loss of rent at lease end or break of £1.3m (3.2% of rent roll).

 

Overall we have seen good demand across the whole portfolio. In particular, we have seen continued strong take up and rental growth in our London office portfolio with estimated rental values increasing by 3.6%.

 

 

Asset Management Overview: Cash on Cash Returns

 

Our high yielding assets continue to deliver strong cash on cash returns:

 

Centre

 

Free Cash Post Interest

£m

Cash on Cash

%

Clydebank

3.0

11.7

Corby

3.6

12.6

 

 

Across the portfolio, rent collection was 95% within two weeks of the quarter day.

 

We have a strong rental income stream and a diverse tenant base. Our top 10 tenants accounted for 26% of our rent roll.

 

 

Top tenants in the portfolio are:

 

Rank

Tenant

Tenant Industry

Rent (Helical)

Rent Roll




£m

%

1

Network Rail Infrastructure

Infrastructure

2.03

5.0

2

Endemol UK

Media

1.58

3.9

3

Sainsbury's Supermarkets

Retail

1.25

3.0

4

Homebase

Retail

1.01

2.5

5

Economic Solutions

Government

0.96

2.4

6

Nicholl Food Packaging

Manufacturing

0.77

1.9

7

Capita Life & Pensions Regulated Services

Professional Services

0.76

1.8

8

Curzon Estates

Professional Services

0.74

1.8

9

Polypipe

Manufacturing

0.68

1.7

10

DSG Retail

Retail

0.68

1.7

Total



10.46

25.7

 

 

Lease expiries or tenant breaks

 

Year

2015

2016

2017

2018

2019

% of rent roll

12.9%

8.7%

14.6%

11.8%

12.2%

Average rent/lease

£44,700

£34,300

£58,500

£61,200

£83,800

 

 

 

Principal Investment Properties

 

Offices

 

Barts Square, London EC1

 

In joint venture with The Baupost Group LLC (Helical 33.3%) Helical owns the freehold interest in land and buildings at Bartholomew Close, Little Britain and Montague Street, a 3.2 acre site adjacent to the new Barts hospital and just south of Smithfield Market. The current buildings comprise 420,000 sq ft let to the NHS for c. £3.5m pa on a number of short leases that expire between 2014 and 2016. 

 

Planning consent has been obtained for a comprehensive redevelopment of 19 buildings to provide a total of 236 residential apartments, two office buildings of 202,000 sq ft and 26,000 sq ft, 24,200 sq ft of retail/A3 at ground floor and major public realm improvements. The construction of Phase 1, comprising 144 residential units, will commence in January 2015 and that part of the site has been transferred to development stock in anticipation of the works commencing shortly.

 

The Bower, Old Street, London EC1

 

This 3.12 acre asset was acquired in November 2012 for £60.8m in joint venture with Crosstree Real Estate Partners LLP (Helical interest 33.3%). The site is in the heart of an area which has become a "creative halo", a district of London which is a hub for technology, media and telecommunications companies and is benefitting from substantial investment in infrastructure. Since acquisition, planning consent has been obtained to increase the floor space on the site by 106,000 sq ft to refurbish existing areas and significantly upgrade the public realm with the creation of a new pedestrian street. 

 

Building work started on Phase 1 (211 Old Street) in January 2014 comprising The Warehouse 122,000 sq ft and The Studio 18,363 sq ft, and is due for completion in June 2015. In Phase 1, we have signed an agreement to lease the whole of The Studio to John Brown Media for 15 years at £45 psf and have agreed heads of terms for a further 42,000 sq ft in The Warehouse. At Empire House, 17,315 sq ft has been pre-let to Z Hotels at a rent of £650,000pa on a 35 year lease and 3,411 sq ft to Peruvian restaurant Ceviche, at a rent of £140,000pa on a 25 year lease.

 

At 207 Old Street (The Tower) and the retail parade we continue to receive rent whilst we work up plans to refurbish and extend the Tower with works expected to start in June 2015.

 

C-Space, 37-45 City Road, London EC1

 

We acquired C-Space (formerly Maple House) in June 2013. Planning consent has been obtained for a complete refurbishment of the building which will increase the existing 50,000 sq ft office building to 62,000 sq ft. The works will involve an additional floor and extensions to the third floor, a landscaped courtyard and entrance "pavilion" to the rear and full height glazing to the raised ground floor. Works have commenced and are expected to complete by summer 2015.

 

Shepherds Building, London W14

 

The refurbishment of the common parts (East, West & Central receptions, ground floor common parts, new showers and café/bar) are now complete. These works have given the building a much needed refresh and have been positively received by the occupiers.

 

The building is currently 98.5% let and the only vacant space is awaiting refurbishment. The average rent in the building is increasing as we complete new lettings/renewals but is still a very modest £25 psf. Over the summer, we completed new open market lettings to two tenants of £37.50 psf. These deals have set evidence of new rental values in the building and we are expecting rents to continue to increase from this level.

 

New Loom House, London, E1

 

We have now secured planning consent for a comprehensive refurbishment/reconfiguration of the reception and common parts and plan to start these works in January 2015 for completion in October 2015. We are in the final stage of negotiations with contractors to carry out this work.

 

We have completed three renewals and seven new lettings since the start of April and have two further lettings currently in solicitors' hands. We have been achieving rents of £34.50 psf for units that have been comprehensively refurbished, typically on five year terms with three year breaks. Comprehensive refurbishment works are ongoing on other units as and when these are given back and we are confident of securing at least £34.50 psf for this space.

 

These rents significantly exceed what we expected to achieve for refurbished space at purchase (£25 psf) and this is typical of the continued rental growth that we are seeing across all of our London assets.

 

Enterprise House, London W2

 

Enterprise House, W2 is a freehold investment adjacent to Paddington Station in London comprising 45,000 sq ft. The building was acquired on a sale and leaseback arrangement with Network Rail, which holds a 20 year lease without breaks, for c. £31m representing a yield of 5.7%, generating annual rental income of £1.8m.

 

One King Street, London W6

 

One King Street, London W6 is a 35,000 sq ft building acquired in 2012 comprising 22,000 sq ft of offices and 13,000 sq ft of retail. We recently commenced works to construct an additional office floor on top of the building which we hope to be complete by Easter 2015.

 

Churchgate & Lee House, Manchester

 

In March 2014, we acquired Churchgate House and Lee House, two interlinked office buildings comprising 250,000 sq ft of office space, for a net consideration of £34m reflecting a net initial yield of 5.9%. Since acquisition we have refurbished the reception and let 55,000 sq ft. Upon expiry of the rent free period granted, the building will be yielding 7.8% on cost. There is a further 38,000 sq ft to let. 

 

Retail

 

The Morgan Quarter, Cardiff

 

The increased activity reported in the last period has continued to gain momentum with seven new lettings and a lease renewal having been agreed in the period. We continue to discuss potential increases in space requirements with tenants in The Hayes and new lettings with tenants in the Arcades.

 

The first phase of the Creative Quarter office refurbishment was completed at the end of April. Phase 2 of the Creative Quarter which provides c. 7,500 sq ft together with the common "Hub" break-out area and meeting rooms remains on schedule to complete by the end of December 2014. We have already concluded our first two lettings of this phase.

 

Corby Town Centre

 

Leasing continues and a number of re-gears are ongoing. New leases to Yours Clothing, Heron Foods and Papa Johns have recently completed with all operators now open and trading. Planning was approved on unit 29/31 Corporation Street to convert this unit into three. Two of these units have pre-lets with interest in the third to provide a combined rent of c. £100,000 pa.

 

Clyde Shopping Centre, Clydebank

 

Works to extend the centre were completed in June 2014 and the unit handed over to Pure Gym for a 15 year term. There are a number of new lettings and increased space requirements being worked on.

 

Mixed Use Portfolios

 

Quartz Portfolio

 

In December 2013, we acquired a portfolio of ten regional properties comprising five retail and leisure assets, four office properties and one industrial property for a total consideration of c. £49m. During the six months to 30 September 2014 we sold a retail asset in Doncaster for £0.9m at c. 7% above book value and retain the remaining properties.

 

Constellation Portfolio

 

In April 2014, we acquired a mixed-use portfolio of ten properties for a total consideration of c. £40m. The portfolio includes modern high-bay logistic facilities and regional and headquarter offices. During the half year we sold offices in Preston for £1.7m, marginally above book value and, since 30 September 2014, we have sold a distribution warehouse in Leicester for £5.2m, c. 8% above acquisition cost.

 

Boss Portfolio

 

In August 2014, we acquired a portfolio of 11 industrial and distribution warehouse assets for a total consideration of £29.7m, reflecting a net initial yield of 8.0% (excluding one vacant property in Rugby subsequently sold). The portfolio, with a total floor area of c. 460,000 sq ft, comprises seven multi-let industrial entities and four single let distribution warehouses.

 

 

DEVELOPMENT PORTFOLIO OVERVIEW

 

We have a development programme as follows:

 

Property

Helical Interest

%

Status

Start

Completion

Offices

Sq ft

Retail

Sq ft

Residential Units

Barts Square, London, EC1  - Phase 1 Residential

33

Consented

Jan 2015

Q2 2017

26,000

12,480

144

                                              - Phase 2 Residential

33

Consented

Nov 2016

Q2 2019

-

11,733

92

                                              - Offices

33

Consented

Feb 2016

Q2 2018

202,000

-

-

Creechurch Place, London, EC3

10+

On site

2014

Oct 2016

271,000

2,227

-

Clifton Street, London

100

On site

2014

June 2015

45,000

-

-

Scottish Power Headquarters, Glasgow

75

On site

2013

Dec 2015

220,000

-

-

King Street, Hammersmith, London W6

50

Resolution to grant planning

2015/17

2017/19

40,000

17,738

196

 

 

Barts Square Residential Phase 1, London, EC1

 

In September 2014, the first phase of the residential development at Barts Square was launched in anticipation of construction commencing in January 2015. Of the 88 plots released for sale we have exchanged contracts for sale on 45 units with four further units reserved comprising, in total, c. 56% of the total released. On average these units have been sold at a price of £1,570 psf.

 

99 Clifton Street, London, EC2

 

In November 2013, we committed to forward purchase a new 45,000 sq ft (NIA) office building in Clifton Street, London EC2 for £21m. Since contracting on the building, Helical has worked with the developer to achieve a revised planning consent and to refine the building's specifications to ensure it meets the demands of Shoreditch tech occupiers. It was intended that the Group would complete the freehold purchase upon practical completion of the construction in summer 2015. However, on 30 September 2014 Helical exchanged contracts on the forward sale of 99 Clifton Street for £38.25m, allowing the Group to recognise development profits of £14.7m at the half year. 

 

Creechurch Place, London EC3 

 

Creechurch Place is a landmark City office scheme in the heart of the insurance sector in London.  In May 2014, the Group signed a joint venture agreement with HOOPP (Healthcare of Ontario Pension Plan) to redevelop this site in a 90:10 joint venture (Helical interest 10%) with Helical acting as development manager for which it will receive a promote payment depending on the outcome of the scheme.  Construction of the building has commenced and is expected to complete in October 2016 with a capital value of c. £250m.

 

Scottish Power Headquarters, Glasgow

 

Helical and local development partner, Dawn Developments Limited, were appointed as development managers by Scottish Power for the construction of their new headquarters at St Vincent Street, Glasgow, pre-sold by Scottish Power to M&G Real Estate. The completed building will comprise 220,000 sq ft of prime office space in the heart of the city's commercial district. Since making a start on site in October 2013 Helical has been awarded the Cat B fit out contract and works are due to complete in December 2015.  As part of the deal Helical is purchasing, for c. £5.75m, three additional existing Scottish Power sites in Glasgow, Yoker and Falkirk which are surplus to their requirements.

 

King Street, Hammersmith, London W6

 

King Street, Hammersmith is a mixed use scheme, in joint venture with Grainger plc, for the regeneration of the west end of King Street.  Planning permission for the scheme was granted in April 2014 for 196 apartments, a three screen cinema to be operated by Curzon, new retail, restaurant and café space and replacement offices for the Council with a new public square.  Work is expected to start in the second half of 2015.

 

Europa Centralna, Poland

 

This retail park and shopping centre comprises 720,000 sq ft of retail space and was built in a 50:50 joint venture with clients of Standard Life. The scheme opened in March 2013 and is over 86% let to Tesco, Castorama, H&M, Sports Direct, Media Saturn and others. The sale of 50% of the scheme in 2011 included a provision that we will sell the remaining ownership stake two years after the date of completion of the development to our existing joint venture partners and this sale is expected to complete by March 2015.

 

Park Handlowy Mlyn, Wroclaw, Poland

 

This 103,000 sq ft out-of-town retail development was completed in December 2008 and is fully let to a number of international and local retailers including Sports Direct, TK Maxx, Media Expert, Super Pharm, Deichmann, Smyk, Komfort and others. We have agreed terms to sell the development and expect to complete the sale by our year end.

 

Leisure Plaza, Milton Keynes

 

Leisure Plaza is a 50:50 joint venture with Abbeygate Developments.  Completion of an 80,000 sq ft supermarket, pre-let to Morrisons on a long lease and pre-sold to Aviva Investors' Lime Property Fund at a headline yield of 4.25%, will occur in December 2014. A second phase of development including 33,000 sq ft of open A1 retail and the refurbishment of an existing ice rink is expected to commence in 2015.

 

Helical Retail

 

Parkgate, Shirley, West Midlands

 

The shopping centre at Parkgate, Shirley, where we have a 50% interest, has completed on site and the 80,000 sq ft Asda and a number of other retailers have opened successfully for trade. The space beyond the foodstore is 80% pre-let to occupiers such as Peacocks, 99p Stores, Pizza Express, Wetherspoons, Prezzo and the Shirley Library. Two residential sites have been sold to provide 97 private and extra-care units with a further site in solicitors's hands. Six apartments and eight town houses are being built out directly. A residentially orientated second phase is being put together on a site of 10 acres opposite the Parkgate scheme and a planning application is likely to be submitted in spring 2015.

 

Cortonwood

 

Planning consent has been secured at appeal and marketing is in hand for an 80,000 sq ft Open A1 non-food retail park. Negotiations are in hand with a number of leading fashion retailers. A start on site is anticipated in the summer of 2015.

 

Truro

 

In Truro we have entered into a Conditional Purchase Agreement on the six acre Truro City Football Club Site and a Planning Application is being submitted shortly for a 78,000 sq ft non-food retail park.

 

Kingswinford

 

A conditional contract has been secured on a site owned by Ibstock and a Planning Application for a 75,000 sq ft non-food scheme is to be submitted in the first quarter of 2015. 

 

Retirement Villages

 

Our retirement village development programme continues apace with Bramshott Place completed and Durrants Village, Millbrook Village and Maudslay Park at varying stages of construction.

 

Bramshott Place, Liphook, Hampshire

 

Construction of this 151 unit village completed in December 2012. We have completed or exchanged on the sale of 144 units (compared to 136 at the year end) and have a further two under offer leaving five to be sold.

 

Durrants Village, Faygate, Horsham, West Sussex

 

We started the first phase of this 171 unit village in May 2012, and construction is expected to continue in phases, completing in 2017.  The Clubhouse is expected to complete in summer 2015.  We have completed on the sale of 19 units with a further nine reserved. 

 

Millbrook Village, Exeter

 

We started the construction of this 164 unit village in 2013 and expect completion of the building works during 2018.  To date we have completed on one unit and exchanged on five units with a further 23 reserved in the first two phases of 84 units.

 

Maudslay Park, Great Alne, Warwickshire

 

We have completed the construction of the marketing suite and during the period started the first phase of the development, which totals 150 units.  Completion of the scheme is expected in 2018 and to date we have reservations on four units.

 

 

 

Independent review report to the members of Helical Bar plc

 

Introduction

We have reviewed the condensed set of unaudited financial statements in the Half Year Results of Helical Bar plc for the six months ended 30 September 2014 which comprises the Unaudited Consolidated Income Statement, the Unaudited Consolidated Statement of Comprehensive Income, the Unaudited Consolidated Balance Sheet, the Unaudited Consolidated Cash Flow Statement, the Unaudited Consolidated Statement of Changes in Equity and the related unaudited notes. We have read the other information contained in the Half Year Results: Financial Highlights, Chief Executive's Statement, Financial Review, Property Portfolio, Investment Portfolio Overview and Development Portfolio Overview, and have considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of unaudited financial statements.

 

This report is made solely to the Company's members, as a body, 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'. Our review work has been undertaken so that we might state to the Company's members those matters we are required to state to them 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 and the Company's members as a body, for our review work, for this report, or for the conclusion we have formed.

 

Directors' responsibilities

The Half Year Results are the responsibility of, and have been approved by, the directors. The directors are responsible for preparing the Half Year Results in accordance with the Disclosure 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 International Financial Reporting Standards as adopted by the European Union. The condensed set of unaudited financial statements included in the Half Year Results has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

 

Our responsibility

Our responsibility is to express a conclusion on the condensed set of unaudited financial statements in the Half Year Results 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'. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) 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 unaudited financial statements in the Half Year Results for the six months ended 30 September 2014 is not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

 

GRANT THORNTON UK LLP

AUDITOR

London

28 November 2014

 

 

 

Unaudited Consolidated Income Statement

For the Half Year to 30 September 2014

 


 

 

 

Notes

Half Year to

30 September

2014

£000

Half Year to

30 September

2013

£000

Year to

31 March

2014

£000

Revenue

3

39,717

87,874

123,637

Net rental income

4

16,352

11,075

24,402

Development property profit

 

14,405

60,940

62,825

Trading property gain

 

-

-

252

Share of results of joint ventures

12

12,873

6,063

16,448

Other operating income

 

230

105

230

Gross profit before net gain on sale and revaluation

  of investment properties

 

43,860

78,183

104,157

Net gain on sale and revaluation of investment properties

5

23,094

3,921

29,325

Impairment of available-for-sale investments

15

(430)

(771)

(88)

Gross profit

 

66,524

81,333

133,394

Administrative expenses

6

(12,637)

(11,613)

(26,676)

Operating profit

 

53,887

69,720

106,718

Finance costs

7

(11,860)

(6,445)

(13,983)

Finance income

 

1,032

869

4,135

Change in fair value of derivative financial instruments

 

(1,514)

4,905

5,312

Change in fair value of Convertible Bond

 

1,595

-

-

Foreign exchange loss

 

(246)

(199)

(501)

Profit before tax

 

42,894

68,850

101,681

Tax on profit on ordinary activities

8

(5,580)

(13,405)

(14,126)

Profit after tax

 

37,314

55,445

87,555

- attributable to equity shareholders

 

37,069

55,429

87,603

- attributable to non-controlling interests

 

245

16

(48)

Profit for the period

 

37,314

55,445

87,555


 




Earnings per 1p share

10




Basic

 

32.0p

47.4p

75.0p

Diluted

 

30.0p

46.4p

73.2p

 

 

 

Unaudited ConsolidatedStatement of Comprehensive Income

For the Half Year to 30 September 2014

 


Half Year to

30 September

2014

£000

Half Year to

30 September

2013

£000

Year to

31 March

2014

£000

Profit for the period

37,314

55,445

87,555

Other comprehensive income




Impairment of available-for-sale investments

-

(928)

(936)

Exchange difference on retranslation of net investments in foreign operations

63

8

51

Total comprehensive income for the period

37,377

54,525

86,670

- attributable to equity shareholders

37,132

54,509

86,718

- attributable to non-controlling interests 

245

16

(48)

Total comprehensive income for the period

37,377

54,525

86,670





 

The exchange differences on retranslation of net investments in foreign operations will be reclassified to the Income Statement in the future.

 

 

 

Unaudited Consolidated Balance Sheet

At 30 September 2014

 


 

 

 

Notes

At

30 September

2014

£000

At

30 September

2013

£000

At

31 March

2014

£000

Non-current assets





Investment properties

11

586,840

389,326

493,201

Owner occupied property, plant and equipment


2,414

1,112

1,050

Investment in joint ventures

12

75,606

53,800

62,980

Derivative financial instruments

20

349

1,428

1,867

Trade and other receivables

16

1,358

6,491

7,673

Deferred tax asset

8

5,119

6,734

8,458



671,686

458,891

575,229

Current assets





Land, developments and trading properties

13

94,592

101,072

98,160

Forward property contract

14

14,663

-

-

Available-for-sale investments

15

4,571

4,290

4,973

Trade and other receivables

16

62,345

42,130

33,337

Cash and cash equivalents

17

47,023

63,239

63,237



223,194

210,731

199,707

Total assets


894,880

669,622

774,936

Current liabilities





Trade and other payables

18

(48,750)

(57,183)

(49,230)

Corporation tax payable


(2,222)

(9,333)

(5,370)

Borrowings

19

(8,958)

(15,958)

(1,275)



(59,930)

(82,474)

(55,875)

Non-current liabilities

Trade and other payables

 

18

 

(3,435)

 

-

 

(2,150)

Borrowings

19

(460,821)

(280,070)

(374,811)

Derivative financial instruments

20

(1,569)

(1,541)

(1,573)



(465,825)

(281,611)

(378,534)

Total liabilities


(525,755)

(364,085)

(434,409)

Net assets


369,125

305,537

340,527






Equity





Called-up share capital

21

1,447

1,447

1,447

Share premium account


98,798

98,678

98,678

Revaluation reserve


55,170

14,500

33,106

Capital redemption reserve


7,478

7,478

7,478

Other reserves


291

291

291

Retained earnings


205,923

183,057

200,455

Own shares held


-

-

(950)

Equity attributable to equity holders of the parent


369,107

305,451

340,505

Non-controlling interests


18

86

22

Total equity


369,125

305,537

340,527

 

 

 

Unaudited Consolidated Cash Flow Statement

For the Half Year to 30 September 2014

 


Half Year to

30 September

2014

£000

Half Year to

30 September

2013

£000

Year to

31 March

2014

£000

Cash flows from operating activities




Profit before tax

42,894

68,850

101,681

Depreciation

396

352

719

Revaluation gain on investment properties

(21,700)

(3,907)

(20,714)

Gain on sales of investment properties

(1,394)

(14)

(8,611)

Profit on sale of plant and equipment

(23)

-

-

Net financing costs

10,635

5,576

9,529

Change in value of derivative financial instruments

1,514

(4,905)

(5,312)

Profit on forward property contract

(14,663)

-

-

Change in fair value of Convertible Bond

(1,595)

-

-

Share based payment charge

3,150

1,567

6,333

Share of results of joint ventures

(12,873)

(6,063)

(16,448)

Impairment of available-for-sale investment

430

771

88

Foreign exchange movement

698

79

109

Other non-cash items

-

(10)

(10)

Cash inflows from operations before changes in working capital

7,469

62,296

67,364

Change in trade and other receivables

(22,049)

(4,279)

3,680

Change in land, developments and trading properties

2,917

(7,161)

(11,306)

Change in trade and other payables

(1,336)

20,683

16,096

Cash (outflows)/inflows generated from operations

(12,999)

71,539

75,834

Finance costs

(9,870)

(7,811)

(17,645)

Finance income

580

869

1,236

Tax paid

(5,370)

(495)

(6,903)


(14,660)

(7,437)

(23,312)

Cash flows from operating activities

(27,659)

64,102

52,522

Cash flows from investing activities




Purchase of investment property

(106,380)

(74,150)

(199,944)

Sale of investment property

35,994

1,038

56,914

Cost of cancelling interest rate swap

-

-

8

Investment in joint ventures

(249)

(150)

(650)

Return of investment in joint ventures

Dividends from joint ventures

245

-

2,293

-

2,668

1,350

Purchase of available for sale assets

(30)

-

-

Sale of plant and equipment

23

41

34

Purchase of leasehold improvements, plant and equipment

(1,760)

(343)

(646)

Net cash used in investing activities

(72,157)

(71,271)

(140,266)

Cash flows from financing activities




Borrowings drawn down

211,281

142,850

274,369

Borrowings repaid

(115,261)

(104,954)

(152,636)

Shares issued

120

-

-

Purchase of own shares

(6,995)

-

(950)

Equity dividends paid

(5,538)

(4,323)

(6,660)

Net cash generated from financing activities

83,607

33,573

114,123

Net (decrease)/increase in cash and cash equivalents

(16,209)

26,404

26,379

Exchange losses on cash and cash equivalents

(5)

(28)

(5)

Cash and cash equivalents at start of period

63,237

36,863

36,863

Cash and cash equivalents at end of period

47,023

63,239

63,237

 

 

 

Unaudited Consolidated Statement of Changes in Equity

At 30 September 2014

 


Share

Capital

£000

Share

Premium

£000

Revaluation

reserve

£000

Capital

redemption

reserve

£000

Other

reserves

£000

Retained earnings

reserve

£000

Non-controlling

interests

£000

Own shares

held

£000

Total

£000

At 31 March 2013

1,447

98,678

10,593

7,478

291

135,211

70

-

253,768

Total comprehensive income

-

-

-

-

-

86,718

(48)

-

86,670

Revaluation surplus

-

-

20,714

-

-

(20,714)

-

-

-

Realised on disposals

-

-

1,799

-

-

(1,799)

-

-

-

Performance share plan

-

-


-

-

6,333

-

-

6,333

Share settled bonus

-

-

-

-

-

1,366

-

-

1,366

Dividends paid

-

-

-

-

-

(6,660)

-

-

(6,660)

Purchase of own shares

-

-

-

-

-

-

-

(950)

(950)

At 31 March 2014

1,447

98,678

33,106

7,478

291

200,455

22

(950)

340,527

Total comprehensive income

-

-

-

-

-

37,132

245

-

37,377

Revaluation surplus

-

-

21,700

-

-

(21,700)

-

-

-

Realised on disposals

-

-

364

-

-

(364)

-

-

-

Payment to minority interest

-

-

-

-

-

-

(249)

-

(249)

Performance share plan

-

-

-

-

-

3,150

-

-

3,150

Share settled bonus

-

-

-

-

-

733

-

-

733

New share capital issued

-

120

-

-

-

-

-

-

120

Dividends paid

-

-

-

-

-

(5,538)

-

-

(5,538)

Purchase of own shares

-

-

-

-

-

-

-

(6,995)

(6,995)

Own shares held reserve transfer

-

-

-

-

-

(7,945)

-

7,945

-

At 30 September 2014

1,447

98,798

55,170

7,478

291

205,923

18

-

369,125

 

 

The adjustment against retained earnings of £3,150,000 (31 March 2014: £6,333,000) adds back the share based payments charge in accordance with IFRS 2 Share Based Payments.

 

There were net transactions with shareholders of £8,530,000 (31 March 2014: £89,000) made up of the performance share plan charge of £3,150,000 (31 March 2014: £6,333,000), dividends paid of £5,538,000 (31 March 2014: £6,660,000), the purchase of own shares of £6,995,000 (31 March 2014: £950,000), the issue of new shares of £120,000 (31 March 2014: nil) and the share settled bonus of £733,000 (31 March 2014: £1,366,000).

 

At 30 September 2013

 


 

Share

capital

£000

 

Share

premium

£000

 

Revaluation

reserve

£000

Capital

redemption

reserve

£000

 

Other

reserves

£000

 

Retained

earnings

£000

Non-controlling

interests

£000

 

 

Total

£000

At 31 March 2013

1,447

98,678

10,593

7,478

291

135,211

70

253,768

Total comprehensive income    

-

-

-

-

-

54,509

16

54,525

Revaluation surplus

-

-

3,907

-

-

(3,907)

-

-

Performance share plan

-

-

-

-

-

1,567

-

1,567

Dividends paid

-

-

-

-

-

(4,323)

-

(4,323)

At 30 September 2013

1,447

98,678

14,500

7,478

291

183,057

86

305,537

 

There were net transactions with shareholders of £2,756,000 made up of the performance share plan charge of £1,567,000 and dividends paid of £4,323,000.

 

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

 

 

 

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 2014, 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 of the Companies Act 2006, have been filed with the Registrar of Companies.

 

These interim condensed unaudited consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union. With the exception of the convertible bond policy noted below, the principal accounting policies have remained unchanged from the prior financial period to 31 March 2014.

 

Convertible Bonds

Convertible bonds are designated as fair value through the profit and loss and so are presented on the Balance Sheet at fair value with all gains and losses, including the write-off of issuance costs, recognised in the Income Statement. The interest charge in respect of the coupon rate on the bonds has been recognised within Finance Costs on an accruals basis.

 

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 ending 31 March 2014.

 

The Directors have a reasonable expectation that the Group will continue in operational existence for the foreseeable future and have, therefore, used the going concern basis in preparing the financial statements.

 

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:

 

-       market risk

-       strategic risk

-       financial risk

-       development risk, and

-       people risk.

 

There have been no significant changes to these risk areas in the period nor are there expected to be for the half year to 31 March 2015.  A further analysis of these risks is included within the consolidated financial statements of the Group for the year ended 31 March 2014.

 

The half year statement was approved by the Board on 28 November 2014 and is being sent to shareholders and will shortly be 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.

 

2.   Statement of Directors' responsibilities

 

Each of the Directors confirms that, to the best of his knowledge, the condensed set of unaudited financial statements, which has been prepared in accordance with IAS 34 as adopted by the European Union, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer, or the undertakings included in the consolidation as a whole and that the interim management report herein includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R.

 

 

Balances with related parties at 30 September 2014 and 31 March 2014 are disclosed in note 24.

 

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

 

On behalf of the Board

Tim Murphy

Finance Director

28 November 2014

 

 

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 trading properties, which are owned or leased with the intention to sell; and,

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

 


Investment and Trading

Developments

Total

Investment and Trading

Developments

Total


Half Year to 30.09.14

Half Year to

30.09.14

Half Year to

30.09.14

Half Year to 30.09.13

Half Year to 30.09.13

Half Year to 30.09.13

Revenue

£000

£000

£000

£000

£000

£000

Rental income

18,308

526

18,834

12,514

918

13,432

Development property income

-

19,481

19,481

-

73,107

73,107

Other revenue

1,402

-

1,402

1,335

-

1,335

Revenue

19,710

20,007

39,717

13,849

74,025

87,874


 

 










Investment and Trading

Developments

Total





Year to

31.03.14

Year to 31.03.14

Year to 31.03.14

Revenue




£000

£000

£000

Rental income




27,994

2,000

29,994

Development property income




-

82,457

82,457

Trading property sales




8,230

-

8,230

Other revenue




2,956

-

2,956

Revenue




39,180

84,457

123,637

 

 








Investment and Trading

Developments

Total

Investment and Trading

Developments

Total


Half Year to 30.09.14

Half Year to

30.09.14

Half Year to

30.09.14

Half Year to 30.09.13

Half Year to 30.09.13

Half Year to 30.09.13

Profit before tax

£000

£000

£000

£000

£000

£000

Net rental income

15,975

377

16,352

10,354

721

11,075

Development property profit

-

14,405

14,405

-

60,940

60,940

Share of results of joint ventures

11,947

926

12,873

8,468

(2,405)

6,063

Gain on sale and revaluation of investment properties

23,094

-

23,094

3,921

-

3,921


51,016

15,708

66,724

22,743

59,256

81,999

Other operating expense



(200)



(666)

Gross profit



66,524



81,333

Administrative expenses



(12,637)



(11,613)

Net finance costs



(10,747)



(671)

Foreign exchange loss



(246)



(199)

Profit before tax



42,894



68,850








 





Investment and Trading

Developments

Total





Year to 31.03.14

Year to 31.03.14

Year to 31.03.14

Profit before tax




£000

£000

£000

Net rental income




22,764

1,638

24,402

Development property profit




-

62,825

62,825

Trading property gain




252

-

252

Share of results of joint ventures




18,882

(2,434)

16,448

Gain on sale and revaluation of investment properties


29,325

-

29,325

 

Impairment of available for sale assets




71,223

 

62,029

 

133,252

(88)

Other operating income






230

Gross profit






133,394

Administrative expenses






(26,676)

Net finance costs






(4,536)

Foreign exchange losses






(501)

Profit before tax






101,681

 


Investment and Trading

Developments

Total

Investment and Trading

Developments

Total


At

30.09.14

At

30.09.14

At

30.09.14

At

30.09.13

At

30.09.13

At

30.09.13

Balance sheet

£000

£000

£000

£000

£000

£000

Investment properties

586,840

-

586,840

389,326

-

389,326

Land, development and trading properties

2,724

91,868

94,592

2,528

98,544

101,072

Investment in joint ventures

70,161

5,445

75,606

48,017

5,783

53,800


659,725

97,313

757,038

439,871

104,327

544,198

Other assets



137,842



125,424

Total assets



894,880



669,622

Liabilities



(525,755)



(364,085)

Net assets



369,125



305,537








 





Investment and Trading

Developments

Total





At

31.03.14

At

31.03.14

At

31.03.14

Balance sheet




£000

£000

£000

Investment properties




493,201

-

493,201

Land, development and trading properties




2,528

95,632

98,160

Investment in joint ventures




58,460

4,520

62,980





554,189

100,152

654,341

Other assets






120,595

Total assets






774,936

Liabilities






(434,409)

Net assets






340,527








 

 

4.   Net rental income

 


Half Year to

30 September

2014

£000

Half Year to

30 September

2013

£000

Year to

31 March

2014

£000

Gross rental income

18,834

13,432

29,994

Rents payable

(257)

(280)

(476)

Property overheads

(1,895)

(1,736)

(4,328)

Net rental income

16,682

11,416

25,190

          Net rental income attributable to profit share partner

(330)

(341)

(788)

Group share of net rental income

16,352

11,075

24,402

 

 

5.   Net gain on sale and revaluation of investment properties

 


Half Year to

30 September

2014

£000

Half Year to

30 September

2013

£000

Year to

31 March

2014

£000

Net proceeds from the sale of investment properties

37,019

1,084

57,971

Book value (note 11)

(34,600)

(1,024)

(48,303)

Related sales costs

(1,025)

(46)

(1,057)

Gain on sale of investment properties

1,394

14

8,611

Revaluation surplus on investment properties

21,700

3,907

20,714

Net gain on sale and revaluation of investment properties

23,094

3,921

29,325

 

 

6.   Administrative expenses

 


Half Year to

30 September

2014

£000

Half Year to

30 September 2013

£000

Year to

31 March

2014

£000

Administration costs

(4,975)

(4,140)

(8,816)

Performance related awards

(6,010)

(6,567)

(15,690)

National Insurance on performance related awards

(1,652)

(906)

(2,170)

Administrative expenses

(12,637)

(11,613)

(26,676)

 

 

7.   Finance costs

 


Half Year to

30 September

2014

£000

Half Year to

30 September 2013

£000

Year to

31 March

2014

£000

Interest payable on bank loans, bonds and overdrafts

(9,571)

(6,545)

(14,298)

Other interest payable and similar charges

(4,183)

(1,052)

(2,520)

Interest capitalised

1,894

1,152

2,835

Finance costs

(11,860)

(6,445)

(13,983)

 

 

8.   Tax on profit on ordinary activities

 


Half Year to

30 September

2014

£000

Half Year to

30 September 2013

£000

Year to

31 March

2014

£000

The tax charge is based on the profit for the period and represents:

 

United Kingdom corporation tax at 21%

- Group corporation tax

 

 

 

 

(2,222)

 

 

 

 

(9,758)

 

 

 

 

(11,687)

- Adjustment in respect of prior periods

14

-

(403)

- Overseas tax

(33)

-

(113)

Current tax charge

(2,241)

(9,758)

(12,203)





Deferred tax




- Capital allowances

(75)

139

1,157

- Tax losses

(649)

(3,014)

(1,746)

- Other temporary differences

(2,615)

(772)

(1,334)

Deferred tax

(3,339)

(3,647)

(1,923)

Total tax charge for period

(5,580)

(13,405)

(14,126)

 

 




Deferred tax

 

 

 

 

 

At

30 September

2014

£000

 

At

30 September

2013

£000

 

At

31 March

2014

£000

Capital allowances

(1,339)

(2,282)

(1,264)

Tax losses

8,339

7,721

8,988

Other temporary differences

(1,881)

1,295

734

Deferred tax asset

5,119

6,734

8,458

 

Under IAS 12, 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 £1.3m would be released and further capital allowances of £14.6m would be available to reduce future tax liabilities. 

 

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

 

 

9.   Dividends

 


 

Half Year to

30 September

2014

£000

 

Half Year to

30 September

2013

£000

 

Year to

31 March

2014

£000

Attributable to equity share capital




Ordinary




- Interim paid 2.00p per share

-

-

2,337

- Prior period final paid 4.75p per share (2013: 3.70p)

5,538

4,323

4,323


5,538

4,323

6,660

 

The interim dividend of 2.10p (30 September 2013: 2.00p per share) was approved by the Board on 25 November 2014 and will be paid on 30 December 2014 to shareholders on the register on 12 December 2014. This interim dividend, amounting to £2,407,000 has not been included as a liability as at 30 September 2014.

 

 

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 year end. Shares held by the Helical Bar Employees' Share Ownership Plan Trust (the "ESOP"), which has waived its entitlement to receive dividends, are treated as cancelled for the purpose of this calculation.

 

The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares and the post tax effect of dividends on the assumed exercise of all dilutive options.

 

The earnings per share is calculated in accordance with IAS 33 and the best practice recommendations of the European Public Real Estate Association ("EPRA").

 

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.

 


Half Year to

30 September 2014

£000

Half Year to

30 September 2013

£000

Year to

31 March     2014

£000

Ordinary shares in issue

118,184

118,138

118,138

Weighting adjustment

(2,236)

(1,292)

(1,323)

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

115,948

116,846

116,815

Weighted average ordinary shares issued on exercise of share options

-

35

46

Weighted average ordinary shares issued on share settled bonuses

734

-

451

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

123,522

119,457

119,701





Basic earnings per share

32.0p

47.4p

75.0p

Diluted earnings per share

30.0p

46.4p

73.2p






£000

£000

£000

Earnings used for calculation of basic and diluted earnings per share

37,069

55,429

87,603

Net gain on sale and revaluation of investment properties    - subsidiaries

(23,094)

(3,921)

(29,325)

                                                                                              - joint ventures

(11,650)

(6,981)

(15,710)

Tax on profit on disposal of investment properties

-

3

1,981

Trading property gains

-

-

(252)

Fair value movement on derivative financial instruments   - subsidiaries

1,514

(4,905)

(5,312)

                                                                                           - joint ventures

287

(409)

(1,001)

Fair value movement on Convertible Bond

(1,595)

-

-

Impairment of available-for-sale investment

430

771

88

Deferred tax on adjusting items

3,555

888

862

Performance related awards

7,662

7,474

17,860

Earnings used for calculations of adjusted diluted EPRA earnings per share

14,178

48,349

56,794

Performance related awards

(7,662)

(7,474)

(17,860)

Earnings used for calculation of diluted EPRA earnings per share

6,516

40,875

38,934

Adjusted diluted EPRA earnings per share

11.5p

40.5p

47.4p

Diluted EPRA earnings per share

5.3p

34.2p

32.5p

 

The earnings used for the calculation of diluted EPRA earnings per share includes net rental income and development property profits but excludes trading property gains.

 

 

11. Investment properties

 


Half Year to

30 September

2014

£000

Half Year to

30 September

2013

£000

Year to

31 March

2014

£000

Fair value at 1 April

493,201

312,026

312,026

Additions at cost

106,380

74,150

199,944

Transfers from land, developments and trading properties

-

-

8,600

Disposals

(34,600)

(1,024)

(48,303)

Revaluation

21,700

3,907

20,714

Revaluation surplus attributable to profit share partner

159

267

220

As at period end

586,840

389,326

493,201

 

All properties are stated at market value as at 30 September 2014, and are valued by professionally qualified external valuers (Cushman & Wakefield LLP) in accordance with the Valuation Standards (6th edition) published by the Royal Institution of Chartered Surveyors.

 

Interest capitalised in respect of the refurbishment of investment properties at 30 September 2014 amounted to £5,067,000 (31 March 2014: £4,782,000; 30 September 2013: £5,767,000).

 

The historical cost of investment property is £530,067,000 (31 March 2014: £457,780,930; 30 September 2013: £372,997,000).

 

 

12. Joint ventures

 

Share of results of joint ventures

 

 

Half Year to

30 September

2014

£000

Half Year to

30 September 2013

£000

Year to

31 March

2014

£000

Gross rental income

3,145

3,400

6,601

Rents payable

(363)

(272)

(625)

Property overheads

(362)

(70)

(539)

Net rental income

2,420

3,058

5,437

Net gain on revaluation of investment properties

11,650

6,930

15,710

Profit/(loss) on sale of investment properties

4

-

(31)

Impairment of held for sale asset

-

(4,775)

(4,792)

Development profit

1,225

2,585

2,199

Other operating (expense)/income

(56)

39

372

Administrative expenses

(206)

(224)

(94)

Finance costs

(1,643)

(1,225)

(3,051)

Finance income

28

52

539

Change in fair value movement of derivative financial instruments

(287)

409

1,001

Profit before tax

13,135

6,849

17,290

Tax

(262)

(786)

(842)

Profit after tax

12,873

6,063

16,448

Investment in joint ventures

 

At

30 September

2014

£000

 

At

30 September

2013

£000

At

31 March

2014

£000

Summarised balance sheets




Non-current assets




Investment properties

104,785

95,107

107,504

Owner occupied property, plant and equipment

19

23

21

Deferred Tax

209

-

-


105,013

95,130

107,525

Current assets




Land, development and trading properties

54,307

25,136

27,165

Held for sale investments

-

-

-

Trade and other receivables

3,594

2,914

3,193

Cash

11,609

24,067

15,792


69,510

52,117

46,150

Current liabilities




Trade and other payables

(43,967)

(43,245)

(39,077)

Borrowings

(30,063)

(750)

(12,453)


(74,030)

(43,995)

(51,530)

Non-current liabilities




Trade and other payables

(8,464)

(8,634)

(8,464)

Borrowings

(16,085)

(40,197)

(30,389)

Derivative financial instruments

(338)

(621)

(51)

Deferred tax

-

-

(261)


(24,887)

(49,452)

(39,165)

Net assets

75,606

53,800

62,980

 

 

Included within cash at 30 September 2014 is nil of restricted cash held in escrow (31 March 2014: nil; 30 September 2013: £17,580,000).

 

The Directors' valuation of trading and development stock shows a surplus of £5,763,000 (31 March 2014: £1,760,000; 30 September 2013: £1,586,000) above book value.

 

The Group's investment in Helical Sosnica Sp. zoo has been accounted for as an investment held for sale due to a commitment to sell the Group's share within the next year.  At 30 September 2014 Helical Sosnica Sp. zoo held a development property the fair value of which the Directors believe to be £90,631,000 (of which Helical's share is £45,316,000), cash balance of £4,946,000 (of which Helical's share is £2,473,000) and a bank loan of £55,195,000 (of which Helical's share is £27,598,000) repayable in September 2017.

 

13. Land, developments and trading properties

 


At

30 September

2014

£000

At

30 September

2013

£000

At

31 March

2014

£000

Development properties

91,868

98,544

95,632

Properties held as trading stock

2,724

2,528

2,528


94,592

101,072

98,160

 

The Directors' valuation of trading and development stock shows a surplus of £27,147,000 (31 March 2014: £25,719,000; 30 September 2013: £23,614,000) above book value.

 

Total interest to date in respect of the development of sites is included in stock to the extent of £8,825,000 (31 March 2014: £7,743,000; 30 September 2013: £6,346,000). Interest capitalised during the period in respect of development sites amounted to £1,894,000.

 

 

14. Forward property contract

 


At

30 September

2014

£000

At

30 September

2013

£000

At

31 March

2014

£000

Forward property contract

14,663

-

-


14,663

-

-

 

The Group has assigned its forward purchase contract on 99 Clifton Street to a third party. The agreement to assign the forward purchase contract is considered to be a derivative financial instrument. As such, under IAS 39, it is carried at its fair value with gains and losses taken to the Income Statement. The fair value inputs represent Level 2 fair value measurements as defined by IFRS 13 Fair Value Measurement. The fair value of this assignment contract at 30 September 2014 is £14,663,000, being the expected cash receipt of £17.3m discounted for risk and the time value of money. The gain of £14,663,000 has been taken to the Income Statement as a development profit.

 

 

15. Available-for-sale investments

 


Half Year to

30 September

2014

£000

 

Half Year to

30 September

2013

£000

 

Year to

31 March

2014

£000

Fair value at 1 April

4,973

5,997

5,997

Fair value additions

30

-

-

Fair value disposals

(2)

-

-

Fair value adjustments

(430)

(1,707)

(1,024)

Fair value at period end

4,571

4,290

4,973

 

The fair values of the Group's available-for-sale investments have been determined by assessing the expected future consideration receivable from these investments, representing Level 3 fair value measurements as defined by IFRS 13 Fair Value Measurement as the value cannot be derived from observable market data. The fair value of the asset is sensitive only to potential sales proceeds.

 

 

16. Trade and other receivables

 

Due after 1 year


At

30 September

2014

£000

At

30 September

2013

£000

At

31 March

2014

£000

Trade receivables

1,358

6,491

6,673

Prepayments and accrued income

-

-

1,000


1,358

6,491

7,673

 

Due within 1 year


At

30 September

2014

£000

At

30 September 2013

£000

At

31 March

2014

£000

Trade receivables

8,107

7,364

2,717

Other receivables

44,235

30,114

25,578

Prepayments and accrued income

10,003

4,652

5,042


62,345

42,130

33,337

 

Trade receivables due after one year relate to monies receivable in 2015 and 2016 which have been discounted under the requirements of IAS 18.

 

17. Cash and cash equivalents

 


At

30 September

2014

£000

At

30 September

2013

£000

At

31 March

2014

£000

Rent deposits and cash held at managing agents

5,732

6,667

4,107

Restricted cash

11,700

4,860

12,721

Cash deposits

29,591

51,712

46,409


47,023

63,239

63,237

 

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

 

 

18. Trade and other payables

 

Due after 1 year

 


At

30 September

2014

£000

At

30 September

2013

£000

At

31 March

2014

£000

Accruals and deferred income

3,435

-

2,150


3,435

-

2,150

 

Due within 1 year

 


At

30 September

2014

£000

At

30 September

2013

£000

At

31 March

2014

£000

Trade payables

10,126

6,901

11,074

Other payables

6,482

18,707

8,314

Accruals and deferred income

32,142

31,575

29,842


48,750

57,183

49,230

 

 

19. Borrowings

 


At

30 September

2014

£000

At

30 September

2013

£000

At

31 March

2014

£000

Current secured borrowings:- less than one year

8,958

15,958

1,275

Non-current secured borrowings repayable within:-




- one to two years

51,937

9,909

13,904

- two to three years

82,844

6,977

102,403

- three to four years

82,202

67,540

100,562

- four to five years

66,482

116,876

79,083


283,465

201,302

295,952

Non-current unsecured borrowings




Convertible Bond repayable within:-




- four to five years

98,405

-

-

Retail Bond repayable within:-




- five to six years

78,951

78,768

78,859

Total non-current borrowings

460,821

280,070

374,811

Total borrowings

469,779

296,028

376,086

 

 

On 17 June 2014 the Group issued £100m convertible bonds at par with a 4% coupon rate which are due for settlement on 17 June 2019 (the "Bonds"). The Bonds can be converted from 28 July 2014 up to and including 7 July 2017, if the share price has traded at a level exceeding 135% of the exchange price for a specified period, and from 8 July to (but excluding) the seventh dealing day before 17 June 2019 at any time. On conversion, the Group can elect to settle the Bonds by any combination of ordinary shares and cash.

 

Net Gearing


At

30 September

2014

£000

At

30 September

2013

£000

At

31 March

2014

£000

Total borrowings

469,779

296,028

376,086

Cash

(47,023)

(63,239)

(63,237)

Net borrowings

422,756

232,789

312,849

 

Net borrowings excludes the Group's share of borrowings in joint ventures and held for sale investments of £73,746,000 (31 March 2014: £72,587,000; 30 September 2013: £71,734,000) and cash of £14,082,000 (31 March 2014: £20,377,000; 30 September 2013: £30,422,000). All borrowings in joint ventures and held for sale investments are secured.

 


At

30 September

2014

£000

At

30 September

2013

£000

At

31 March

2014

£000

Net assets

369,125

305,537

340,527

Gearing

115%

76%

92%

 

 

20. Derivative financial instruments

 


At

30 September

2014

£000

At

30 September

2013

£000

At

31 March

2014

£000

Derivative financial instruments asset

349

1,428

1,867

Derivative financial instruments liability

(1,569)

(1,541)

(1,573)

 

The fair values of the Group's outstanding interest rate swaps 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

2014

£000

At

30 September

2013

£000

At

31 March

2014

£000

Authorised

39,577

39,577

39,577


39,577

39,577

39,577

 

The authorised share capital of the Company is £39,576,626.60 divided into ordinary shares of 1p each and deferred shares of 1/8p each.

 

Allotted, called up and fully paid

- 118,183,806 (31 March 2014 and 30 September 2013: 118,137,522) ordinary shares of 1p each

 

1,182

 

1,182

 

1,182

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

265

265

265


1,447

1,447

1,447

 

 

Share options

 

At 30 September 2014 there were nil unexercised options over new ordinary 1p shares (31 March 2014: £46,284; 30 September 2013: £46,284).

 

 

 

22. Own shares held

 

Following approval at the 1997 Annual General Meeting the Company established the Helical Bar Employees' Share Ownership Plan Trust (the "ESOP") to be used as part of the remuneration arrangements for employees.  The purpose of the ESOP is to facilitate and encourage the ownership of shares by or for the benefit of employees by the acquisition and distribution of shares in the Company.

 

The ESOP purchases shares in the Company to satisfy the Company's obligations under its Share Option Scheme and Performance Share Plan.

 

At 30 September 2014 the ESOP held 3,541,844 ordinary shares in Helical Bar plc (31 March 2014: 1,542,000; 30 September 2013: 1,292,000).

 

At 30 September 2014 options over nil (31 March 2014 and 30 September 2013: nil) ordinary shares in Helical Bar plc had been granted through the ESOP.  At 30 September 2014 awards over 9,127,153 (31 March 2014 and 30 September 2013: 9,721,375) ordinary shares in Helical Bar plc, made under the terms of the Performance Share Plan, were outstanding.

 

 

23. Net assets per share

 


 

At

30 September

2014

£000

 

 

Number of Shares

000's

 

At

30 September 2014

Pence Per Share

Net asset value

369,125

118,184


Less:  - own shares held by ESOP

-

(3,542)


- deferred shares

(265)

-


Basic net asset value

368,860

114,642

322

Share settled bonuses

-

734


Dilutive effect of the Performance Share Plan

9,550

5,587


Diluted net asset value

378,410

120,963

313

Adjustments for




- fair value of financial instruments

1,558



- deferred tax

6,078



- fair value of trading and development properties (including in joint ventures)

32,910



- fair value movement on Convertible Bond

(1,595)



Diluted EPRA net asset value

417,361

120,963

345

Adjustment for




- fair value of financial instruments

(1,558)



- fair value movement on Convertible Bond

1,595



- deferred tax

(6,078)



Diluted EPRA triple NAV 

411,320

120,963

340





The adjustment for the fair value of trading and development properties represents the surplus as at 30 September 2014.

 

 

 

 

At

31 March

2014

£000

 

 

Number of Shares

000's

 

At

31 March

2014

Pence Per Share

Net asset value

340,527

118,138


Less: - own shares held by ESOP

-

(1,542)


- deferred shares

(265)

-


Basic net asset value

340,262

116,596

292

Unexercised share options

120

46


Share settled bonus

-

451


Dilutive effect of the Performance Share Plan

7,124

3,578


Diluted net asset value

347,506

120,671

288

Adjustment for

- fair value of financial instruments

(243)



- deferred tax

2,444



- fair value of trading and development properties (including in joint ventures)

27,479



Diluted EPRA net asset value

377,186

120,671

313

Adjustment for

- fair value of financial instruments

243



- deferred tax

(2,444)



Diluted EPRA triple net asset value

374,985

120,671

311

 

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

 

 

24. Related party transactions

 

 

At 30 September 2014, 31 March 2014 and 30 September 2013 the following amounts were due from the Group's joint ventures.

 


At

30 September

2014

£000

At

30 September

2013

£000

At

31 March

2014

£000

Abbeygate Helical (Leisure Plaza) Ltd

-

4,823

-

King Street Developments (Hammersmith) Ltd

3,222

2,900

3,050

Shirley Advance LLP

10,439

4,323

4,723

Barts Two Investment Property Ltd

3,666

146

146

Helical Sosnica Sp. zoo

8,500

11,888

11,900

207 Old Street Unit Trust

1,792

1,792

1,792

211 Old Street Unit Trust

1,701

1,701

1,701

Old Street Retail Unit Trust

719

719

719

City Road (Jersey) Ltd

713

709

710

Old Street Holdings LP

100

-

100

Creechurch Place Ltd

11,564

-

-

 

 

25. See-through analysis

 

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-though' analysis of our 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 and property overheads

 

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








Half Year to

September

2014

£000

Half Year to

September

2013

£000

Year to

March

2014

£000

Gross rental income

- subsidiaries

18,834

13,432

29,994


- joint ventures

3,145

3,400

6,601

Total gross rental income


21,979

16,832

36,595

Rents payable

- subsidiaries

(257)

(280)

(476)


- joint ventures

(363)

(272)

(625)

Property overheads

- subsidiaries

(1,895)

(1,736)

(4,328)


- joint ventures

(362)

(70)

(539)

Net rental income attributable to profit share partner


(330)

(341)

(788)

See-through net rental income


18,772

14,133

29,839

 

See-through net development profits

 

Helical's share of development profits from property assets held in subsidiaries and in joint ventures are shown in the table below.



Half Year to

September

2014

£000

Half Year to

September 2013

£000

In parent and subsidiaries


16,373

61,158

62,273

In joint ventures


1,225

2,585

2,199

Total gross development profit


17,598

63,743

64,472

Provision against stock


(1,968)

(218)

552

See-through development profits


15,630

63,525

65,024

 

See-through net gain on sale and revaluation of investment properties








Half Year to September

2014

£000

Half Year to September

2013

£000

Year to

March

2014

£000

Revaluation surplus on investment properties

- subsidiaries

21,700

3,907

20,714


- joint ventures

11,650

6,981

15,710

Total revaluation surplus


33,350

10,888

36,424

Net gain/(loss) on sale of investment properties

- subsidiaries

1,394

14

8,611


- joint ventures

4

(51)

(31)

Total net gain/(loss) on sale of investment properties


1,398

(37)

8,580

See-through net gain on sale and revaluation of investment properties

34,748

10,851

45,004

 

 

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 in joint ventures are shown in the table below.








Half Year to

September

2014

£000

Half Year to September

2013

£000

Year to

March

2014

£000

Interest payable on bank loans and overdrafts

- subsidiaries

9,571

6,545

14,298


- joint ventures

1,643

1,225

3,051

Total interest payable on bank loans and overdrafts

11,214

7,770

17,349

Other interest payable and similar charges

- subsidiaries

4,183

1,052

2,520

Interest capitalised

- subsidiaries

(1,894)

(1,152)

(2,835)

Total finance costs


13,503

7,670

17,034

Interest receivable and similar income

- subsidiaries

(1,032)

(869)

(4,135)


- joint ventures

(28)

(52)

(539)

See-through net finance costs


12,443

6,749

12,360

 

 

See-through property portfolio

 

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

 



At

30 September

2014

£000

At

30 September

2013

£000

At

31 March

2014

£000

Investment property

- subsidiaries

586,840

389,326

493,201


- joint ventures

104,785

95,107

107,504

Total investment property


691,625

484,433

600,705

Trading and development stock

- subsidiaries

94,592

101,072

98,160


- joint ventures

99,623*

73,401*

75,368*

Total trading and development stock


194,215

174,473

173,528

Trading and development stock surplus

- subsidiaries

27,147

23,614

25,719


- joint ventures

5,763

1,586

1,760

Total trading and development stock surpluses


32,910

25,200

27,479

Total trading and development stock at fair value


227,125

199,673

201,007

See-through property portfolio


918,750

684,106

801,712

 

*Balance includes the Group's share of Helical Sosnica Sp. zoo which has been accounted for as an investment held for sale (see note 12).

 

See-through net borrowings

 

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



At

30 September

2014

£000

At

30 September

2013

£000

At

31 March

2014

£000

In parent and subsidiaries

- gross borrowings less than one year

8,958

15,958

1,275


- gross borrowings more than one year

460,821

280,070

374,811


Total

469,779

296,028

376,086

In joint ventures

- gross borrowings less than one year

30,063

750

12,453


- gross borrowings more than one year

43,683*

70,984*

60,134*


Total

73,746

71,734

72,587

In parent and subsidiaries

Cash and cash equivalents

(47,023)

(63,239)

(63,237)

In joint ventures

Cash and cash equivalents

(14,082)*

(30,422)*

(20,377)*

See-through net borrowings

482,420

274,101

365,059

 

*Balance includes the Group's share of Helical Sosnica Sp. zoo which has been accounted for as an investment held for sale (see note 12).

 

 

26. See-through interest cover, gearing, loan to value

 


At

30 September

2014

£000

At

30 September

2013

£000

At

31 March

2014

£000

Interest cover

3.0x

11.5x

8.3x

Gearing

131%

90%

107%

Loan to value

53%

40%

46%

 

 

27. Capital commitments

 

Other than where we have exchanged or completed on the purchase of a property after the period end (discussed in the Investment Property Overview), the Group has no capital commitments.

 


This information is provided by RNS
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