TIDMNRR
RNS Number : 4710X
NewRiver Retail Limited
07 December 2010
7 December 2010
NewRiver Retail Limited ("NewRiver" or "the Company")
Interim results for the period ended 30 September 2010
NewRiver Retail Limited (AIM: NRR), the UK REIT specialising in value-creating
retail property investment and asset management, is pleased to announce its
interim results for the period ended 30 September 2010.
Key Highlights
· Profit before tax of GBP1.7m - reflecting rental profits and increased
valuations
· Maiden dividend of 1p per share
· Net asset valuation ("NAV") of GBP37.1m - NAV per share of 261 pence and
EPRA NAV per share of 264 pence
· Acquisitions in the period of GBP23m at 8.1% initial yield and GBP67m of
acquisitions announced since the period end at 8.5% initial yield
· Gross assets under management have increased to GBP174m
· Real Estate Investment Trust ("REIT") status from 22 November 2010
· Fund raising of GBP10.5m in the period to accelerate growth
· GBP25m issuance of Convertible Unsecured Loan Stock post period end
David Lockhart, Chief Executive of NewRiver Retail Limited, commented:
"These interim results reflect the significant strides that the company has made
in the first half of the financial year. Combined with acquisitions after the
period end, NewRiver has now acquired more than GBP150 million of assets since
formation, and we continue to be very active in our marketplace. I am
particularly proud of the continued move into profit and the fact that we have
commenced payment of a dividend. Our recent conversion to REIT status will
ensure a regular future dividend distribution. Since the beginning of the
financial year, this has been a very active period for the Company and we do not
see that changing in the second half and through 2011. The Company has created a
significant platform for growth and I look forward to the future with great
confidence."
- ends -
For further information
NewRiver Retail Limited
Tel: 0203 328 5808
David Lockhart, Chief Executive
Pelham Bell Pottinger
Tel: 0207 861 3232
David Rydell/Rosanne Perry
Cenkos Securities
Ian Soanes/Max Hartley
Tel: 0207 397 8900
Chairman's statement
I am pleased to report NewRiver Retail's interim results for the six month
period to 30 September 2010. The Company generated an operating profit of
GBP1.9m and a profit before tax of GBP1.7m, which the Board considers to be an
excellent start to the Company's first full accounting year. A revaluation
surplus in the period of GBP1.5m demonstrates further the Company's ability to
create value and deploy capital wisely.
I am delighted to announce that the Board is recommending the payment of the
Company's maiden interim dividend of 1p per share. The Board believes that this
first payment is a notable achievement, considering the early stage of the
Company.
The period under review has been one of significant progress and growth. The
platform the Board put in place last year is now firmly established and provides
a strong base for future development. The highlights included a secondary
fundraise in April 2010 which the company has since invested.
Since 31 March 2010, the Company completed acquisitions totalling GBP23m
utilising its own Balance Sheet and a further GBP10m in the Morgan Stanley Real
Estate Fund joint venture. The Company successfully identifies attractive
investment opportunities through its extensive industry network and each of
these transactions was agreed "off market", allowing the Company to operate in
an exclusive, cost effective and timely manner. The average yield on the
acquisitions completed was an attractive 8.1%, a reflection of the astute
purchasing strategy of the Company.
The Company has announced two further portfolio acquisitions since 30 September
2010. The Standard Life Portfolio exchanged contracts at a purchase price of
GBP14m on 28 October 2010 and the CReAM acquisition completed on 30 November
2010 at an aggregate cost of approximately GBP53m. These acquisitions, again
both "off market", were acquired at initial yields of 9% and 8.4% respectively
and further demonstrate the ability of the Company to acquire attractive assets
at good values.
Since the period end the Company has made significant progress in developing its
structure and business model. On 28 October 2010 the Company announced its
intention to convert to the status of a REIT. This was approved by shareholders
at an Extraordinary General Meeting ("EGM") on 19 November 2010 and subsequently
by HMRC meaning that as of 22 November 2010 the Company began trading as a REIT.
Simultaneously, the Company announced the issuance of up to GBP25m of
Convertible Unsecured Loan Stock ("CULS") to provide further capital to grow the
Company's asset base. The issuance was approved by shareholders at the EGM and
the Company has since drawn down the full GBP25m of CULS to support the Standard
Life and CReAM portfolio acquisitions.
I would like to thank shareholders for the strong support they gave to the
resolutions tabled at the EGM. I would also like to welcome Andrew Walker to the
Board and both Forum and Spearpoint as new investors in the Company.
The Board is delighted to have completed the CReAM acquisition with senior debt
provided by HSBC who we welcome as our principal bankers alongside Santander.
Together the two banks have provided GBP95m of senior debt to support the
Company and joint venture acquisitions to date.
Investment sentiment in the retail property market has remained cautiously
positive. We continue to see good opportunities and our key sectors of food and
value-led retailing are performing well. We continue to see good demand from
selected retailers and our top 10 tenants include Tesco, Sainsbury's, The
Co-operative, New Look and Wilkinsons who are all actively seeking new space for
expansion. There is evidence of rental growth in the food sector and the Company
has executed over 30 asset management initiatives in the period which is
increasing the value of our assets as evidenced by the revaluation surplus.
The Board is pleased with the significant progress made since our last report
and looks forward to the future with confidence. It remains a key objective of
NewRiver Retail to establish the leading value-creating property investment
platform focused on the UK retail property market.
Paul Roy
Chairman
NewRiver Retail Limited
7 December 2010
Consolidated Condensed Statement of Comprehensive Income (unaudited)
For the period from 1 April 2010 to 30 September 2010
+----------------------------+-------+-----------+------------+-----------+
| | | Unaudited | Audited | Unaudited |
| | | Period 1 | Period 4 | Period 4 |
| | | April | June 2009 | June 2009 |
| | | 2010 to | to 31 | to 30 Sep |
| | | 30 Sep | March 2010 | 2009 |
| | | 2010 | | |
+----------------------------+-------+-----------+------------+-----------+
| | Notes | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+-------+-----------+------------+-----------+
| Total revenue | | 1,033 | 329 | 18 |
+----------------------------+-------+-----------+------------+-----------+
| Total operating expenses | | (1,152) | (1,172) | (150) |
+----------------------------+-------+-----------+------------+-----------+
| Income from joint ventures | 6 | 594 | 1,741 | - |
+----------------------------+-------+-----------+------------+-----------+
| Net fair value gain on | 5 | 1,470 | 1,269 | - |
| revaluation of investment | | | | |
| properties | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Operating profit/(loss) | | 1,945 | 2,167 | (132) |
+----------------------------+-------+-----------+------------+-----------+
| Net finance expense/income | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Finance income | | 24 | 18 | 3 |
+----------------------------+-------+-----------+------------+-----------+
| Finance costs | | (284) | (28) | - |
+----------------------------+-------+-----------+------------+-----------+
| Profit/(loss) for the | | 1,685 | 2,157 | (129) |
| period before taxation | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Taxation | | (35) | (42) | - |
+----------------------------+-------+-----------+------------+-----------+
| Profit/(loss) for the | | 1,650 | 2,115 | (129) |
| period after taxation | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Other comprehensive income | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Fair value loss on | | (470) | (46) | - |
| interest rate swaps | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Total comprehensive income | | 1,180 | 2,069 | (129) |
| for the period | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Earnings/(loss) per share | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Basic (Pence) | 3 | 12.29 | 21.15 | (1.29) |
+----------------------------+-------+-----------+------------+-----------+
| Diluted (Pence) | | 12.21 | 21.11 | (1.29) |
+----------------------------+-------+-----------+------------+-----------+
All activities derive from continuing operations of the Group. The notes form an
integral part of these financial statements.
Consolidated Condensed Balance Sheet (unaudited)
As at 30 September 2010
+----------------------------+-------+-----------+------------+-----------+
| | | Unaudited | Audited | Unaudited |
| | | 30 Sep | 31 March | 30 Sep |
| | | 2010 | 2010 | 2009 |
+----------------------------+-------+-----------+------------+-----------+
| | Notes | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+-------+-----------+------------+-----------+
| Non-current assets | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Investment properties | 5 | 37,515 | 13,315 | - |
+----------------------------+-------+-----------+------------+-----------+
| Investments in joint | 6 | 13,562 | 11,778 | - |
| ventures | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Property, plant & | | 7 | 7 | - |
| equipment | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Goodwill | | - | - | 55 |
+----------------------------+-------+-----------+------------+-----------+
| | | 51,084 | 25,100 | 55 |
+----------------------------+-------+-----------+------------+-----------+
| Current Assets | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Trade and other | | 1,190 | 67 | 21 |
| receivables | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Cash and cash equivalents | 8 | 6,221 | 8,168 | 24,226 |
+----------------------------+-------+-----------+------------+-----------+
| | | 7,411 | 8,235 | 24,247 |
+----------------------------+-------+-----------+------------+-----------+
| Total assets | | 58,495 | 33,335 | 24,302 |
+----------------------------+-------+-----------+------------+-----------+
| Equity and liabilities | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Non-Current Liabilities | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Borrowings | 9 | 19,619 | 6,693 | - |
+----------------------------+-------+-----------+------------+-----------+
| Current Liabilities | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Trade and other payables | | 1,242 | 471 | 213 |
+----------------------------+-------+-----------+------------+-----------+
| Derivative financial | | 516 | 46 | - |
| instruments | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Net assets | | 37,118 | 26,125 | 24,089 |
+----------------------------+-------+-----------+------------+-----------+
| Equity | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Share capital | 11 | 33,826 | 24,031 | 24,212 |
+----------------------------+-------+-----------+------------+-----------+
| Retained earnings | | 1,026 | 846 | (129) |
+----------------------------+-------+-----------+------------+-----------+
| Hedging reserve | | (516) | (46) | - |
+----------------------------+-------+-----------+------------+-----------+
| Share option reserve | | 43 | 25 | 6 |
+----------------------------+-------+-----------+------------+-----------+
| Revaluation reserve | | 2,739 | 1,269 | - |
+----------------------------+-------+-----------+------------+-----------+
| | | 37,118 | 26,125 | 24,089 |
+----------------------------+-------+-----------+------------+-----------+
| NAV per share | | | | |
+----------------------------+-------+-----------+------------+-----------+
| Basic (Pence) | 4 | 261 | 261 | 241 |
+----------------------------+-------+-----------+------------+-----------+
| Diluted (Pence) | | 260 | 261 | 241 |
+----------------------------+-------+-----------+------------+-----------+
The notes form an integral part of these financial statements.
Signed on behalf of the Board on 6 December 2010
+---------------------------------+---------------------------------+
| Chief Executive | Finance Director |
+---------------------------------+---------------------------------+
| David Lockhart | Mark Davies |
+---------------------------------+---------------------------------+
Consolidated Condensed Cash Flow Statement (unaudited)
As at 30 September 2010
+----------------------------+------+-----------+------------+-----------+
| | | Unaudited | Audited | Unaudited |
| | | 30 Sep | 31 March | 30 Sep |
| | | 2010 | 2010 | 2009 |
+----------------------------+------+-----------+------------+-----------+
| | Note | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+------+-----------+------------+-----------+
| Net Cash (outflow) from | 10 | (645) | (496) | (2) |
| operating activities | | | | |
+----------------------------+------+-----------+------------+-----------+
| Investing Activities: | | | | |
+----------------------------+------+-----------+------------+-----------+
| Interest Received | | 24 | 18 | 3 |
+----------------------------+------+-----------+------------+-----------+
| Purchase of investment | 5 | (22,730) | (12,046) | - |
| properties | | | | |
+----------------------------+------+-----------+------------+-----------+
| Purchase of plant and | | 1 | (8) | - |
| equipment | | | | |
+----------------------------+------+-----------+------------+-----------+
| Cash acquired on | | - | 13 | 13 |
| acquisition of subsidiary | | | | |
+----------------------------+------+-----------+------------+-----------+
| Cash (outflow) from joint | | (1,190) | (10,037) | - |
| ventures | | | | |
+----------------------------+------+-----------+------------+-----------+
| Net cash from investing | | (23,895) | (22,060) | 16 |
| activities | | | | |
+----------------------------+------+-----------+------------+-----------+
| Financing Activities: | | | | |
+----------------------------+------+-----------+------------+-----------+
| Finance costs | | (130) | - | - |
+----------------------------+------+-----------+------------+-----------+
| Issue of new shares | 11 | 9,795 | 24,031 | 24,212 |
+----------------------------+------+-----------+------------+-----------+
| New bank loans | 9 | 12,926 | 6,693 | - |
+----------------------------+------+-----------+------------+-----------+
| Net cash from financing | | 22,593 | 30,724 | 24,212 |
| activities | | | | |
+----------------------------+------+-----------+------------+-----------+
| Cash and cash equivalents | 8 | 8,168 | - | - |
| at the beginning of the | | | | |
| period | | | | |
+----------------------------+------+-----------+------------+-----------+
| Movement during the period | | (1,947) | 8,168 | 24,226 |
+----------------------------+------+-----------+------------+-----------+
| Cash and cash equivalents | | 6,221 | 8,168 | 24,226 |
| at the end of the period | | | | |
+----------------------------+------+-----------+------------+-----------+
| Cash and cash equivalents | | | | |
| at the end of the period | | | | |
| comprise: | | | | |
+----------------------------+------+-----------+------------+-----------+
| Cash and cash equivalents | 8 | 6,221 | 8,168 | 24,226 |
+----------------------------+------+-----------+------------+-----------+
The notes form an integral part of these financial statements.
Consolidated Condensed Statement of Changes in Equity (unaudited)
As at 30 September 2010
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| | | 2009 | 2009 | 2009 | 2009 | 2009 | 2009 | 2009 |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| | | Retained | Share | Share | Revaluation | Share | Hedging | Total |
| | | Earnings | Capital | Premium | Reserve | based | Reserve | |
| | | | | | | Payments | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| | Notes | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| As at 4 | | - | - | - | - | - | - | - |
| June | | | | | | | | |
| 2009 | | | | | | | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| Net | 11 | - | - | 24,212 | - | - | - | 24,212 |
| proceeds | | | | | | | | |
| of issue | | | | | | | | |
| of new | | | | | | | | |
| shares | | | | | | | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| Loss for | | (129) | - | - | - | - | - | (129) |
| the | | | | | | | | |
| period | | | | | | | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| Share-based | | - | - | - | - | 6 | - | 6 |
| payments | | | | | | | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| As at 30 | | (129) | - | 24,212 | - | 6 | - | 24,089 |
| September | | | | | | | | |
| 2009 | | | | | | | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| | | 2010 | 2010 | 2010 | 2010 | 2010 | 2010 | 2010 |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| | | Retained | Share | Share | Revaluation | Share | Hedging | Total |
| | | Earnings | Capital | Premium | Reserve | based | Reserve | |
| | | | | | | Payments | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| | Notes | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| As at 4 | | | | | | | | |
| June 2009 | | | | | | | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| Net | 11 | - | - | 24,031 | - | - | - | 24,031 |
| proceeds | | | | | | | | |
| of issue | | | | | | | | |
| of new | | | | | | | | |
| shares | | | | | | | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| Profit for | | 2,115 | - | - | - | - | (46) | 2,069 |
| the period | | | | | | | | |
| after | | | | | | | | |
| taxation | | | | | | | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| Share-based | | - | - | - | - | 2 | - | 25 |
| payments | | | | | | | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| Revaluation | 5 | (1,269) | - | - | 1,269 | - | - | - |
| surplus for | | | | | | | | |
| the period | | | | | | | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| As at 31 | | 846 | - | 24,031 | 1,269 | 25 | (46) | 26,125 |
| March 2010 | | | | | | | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| Net | 11 | - | - | 9,795 | - | - | - | 9,795 |
| proceeds | | | | | | | | |
| of issue | | | | | | | | |
| of new | | | | | | | | |
| shares | | | | | | | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| Profit for | | 1,650 | - | - | - | - | (470) | 1,180 |
| the period | | | | | | | | |
| after | | | | | | | | |
| taxation | | | | | | | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| Share-based | | - | - | - | - | 18 | - | 18 |
| payments | | | | | | | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| Revaluation | 5 | (1,470) | - | - | 1,470 | - | - | - |
| surplus for | | | | | | | | |
| the period | | | | | | | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
| As at 30 | | 1,026 | - | 33,826 | 2,739 | 43 | (516) | 37,118 |
| September | | | | | | | | |
| 2010 | | | | | | | | |
+-------------+-------+----------+---------+---------+-------------+----------+---------+---------+
The notes form an integral part of these financial statements.
Notes to the Accounts
For the period ended 30 September 2010
1 Accounting policies
General information
NewRiver Retail Limited (the "Company") and its subsidiaries (together the
"Group") is a property investment group specialising in commercial real estate
in the United Kingdom. NewRiver Retail was incorporated on 4 June 2009 in
Guernsey as a registered closed-ended investment company. The Company is
incorporated in Guernsey under the provisions of The Companies (Guernsey) Law,
2008. The Company's registered office is Isabelle Chambers, Route Isabelle, St
Peter Port, Guernsey GY1 3TX. The Company has taken advantage of the exemption
conferred by the Companies (Guernsey) Law, 2008, section 244, not to prepare
company only financial statements.
Going concern
The Directors of NewRiver Retail Limited have reviewed the current and projected
financial position of the Group making reasonable assumptions about future
trading and performance. The key areas reviewed are:
Value of investment property
Timing of property transactions
Capital expenditure and tenant incentive commitments
Forecast rental income
Loan covenants
The Group has substantial cash and short term deposits, as well as profitable
rental income streams and as a consequence the Directors believe the Group is
well placed to manage its business risks. Whilst the Group has borrowing
facilities in place, it is currently well within prescribed financial covenants.
After making enquiries and examining major areas which could give rise to
significant financial exposure the Board has a reasonable expectation that the
Company and the Group have adequate resources to continue its operations for the
foreseeable future. Accordingly, the Group continues to adopt the going concern
basis in preparation of these financial statements
Statement of compliance
The condensed interim financial statements (unaudited) have been prepared using
accounting policies consistent with International Financial Reporting Standards
("IFRS") and in accordance with IAS 34 'Interim Financial Reporting'. The same
accounting policies, presentation and methods of computation are followed in the
condensed financial statements as applied in the Group's latest annual audited
financial statements.
Certain new interpretations and amendments or revisions to existing standards,
which may be relevant to the Group, have been published that are mandatory for
later accounting periods and which have not been adopted early. These are:
IFRS 3 Business Combinations (Amended) and IAS 27 Consolidated and Separate
Financial statements (Amended) - amendments resulting from May 2010 Annual
Improvements to IFRSs, effective for periods beginning on or after 1 July 2010
IFRS 7 Financial Instruments: Disclosures - amendments resulting from May 2010
Annual Improvements to IFRSs, effective for periods beginning on or after 1
January 2011
IFRS 7 Financial Instruments: Disclosures - amendments enhancing disclosures
about transfers of financial assets, effective for periods beginning on or after
1 July 2011
IAS 1 Presentation of Financial Statements - amendments resulting from May 2010
Annual Improvements to IFRSs, effective for periods beginning on or after 1
January 2011
IAS 24 Related Party Disclosures - revised definition of related parties,
effective for periods beginning on or after 1 January 2011
IAS 34 Interim Financial Reporting - amendments resulting from May 2010 Annual
Improvements to IFRSs, effective for periods beginning on or after 1 January
2011
IFRS 9 Financial Instruments, effective 1 January 2010.
These changes are not expected to have a material impact on the Group's
financial statements.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company, its subsidiaries and the Special Purpose Vehicle's ("SPV")
controlled by the Company. Control is achieved where the Company has the power
to govern the financial and operating policies of an investee entity so as to
obtain benefits from its activities.
The Condensed Consolidated financial statements consolidate the financial
statements of the Company and its subsidiaries. Intra group transactions are
eliminated in full.
Use of estimates and key sources of estimation uncertainty
The preparation of the Condensed Consolidated financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets, liabilities and contingencies at the date of the Condensed Consolidated
financial statements, and revenue and expenses during the reporting period.
Actual results could differ from estimated. Significant estimates in the Group's
financial statements include the assumptions relating to the valuation of
options and investment properties. By their nature these estimates and
assumptions are subject to measurement uncertainty.
Critical judgements in applying the Group's accounting policies
In the process of applying the Group's accounting policies, management is of the
opinion that any instances of application of judgements are not expected to have
a significant effect on the amounts recognised in the financial statements.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the end of the reporting period, that have a risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the
next financial year, are discussed below.
(i) Investment properties
The preparation of financial statements requires management to make estimates
affecting the reported amounts of assets and liabilities, of revenues and
expenses, and of gains and losses. As described below, the Group's investment
properties are stated at estimated market value, as accounted for by management
based on an independent external appraisal. The estimated market value may
differ from the price at which the Group's assets could be sold at a particular
time, since actual selling prices are negotiated between willing buyers and
sellers. Also, certain estimates require an assessment of factors not within
management's control, such as overall market conditions. As a result, actual
results of operations and realisation of net assets could differ from the
estimates set forth in these financial statements, and the difference could be
significant.
(ii) Valuation of Options
Management have relied on the services of external experts to determine the fair
value of options at their grant date, in order to expense that value over their
estimated exercise period. This requires significant estimates of a number of
inputs which are used to model that fair value.
(iii) Impairment in investment in subsidiaries and associates
Determining whether investments in subsidiaries and associates are impaired
requires an estimation of the fair values less cost to sell and value in use of
those investments. The process requires the Group to estimate the future cash
flows expected from the cash-generating units and an appropriate discount rate
in order to calculate the present value of the future cash flows. Management has
evaluated the recoverability of those investments based on such estimates.
Investment property
Property held to earn rentals and for capital appreciation is classified as
investment property. Investment property comprises both freehold and leasehold
land and buildings.
Investment property is recognised as an asset when:
It is probable that the future economic benefits that are associated with the
investment property will flow to the company;
There are no material conditions precedent which could prevent completion; and
The cost of the investment property can be measured reliably.
Investment property is measured initially at its cost, including related
transaction costs. After initial recognition, investment property is carried at
fair value. The Group has appointed Colliers International as property valuers
to prepare valuations on a semi-annual basis. Valuations are undertaken in
accordance with the appropriate sections of the current Practice Statements
contained in the Royal Institution of Chartered Surveyors Appraisal and
Valuation Standards, 6th Edition (the "Red Book"). This is an internationally
accepted basis of valuation. Gains or losses arising from changes in the fair
value of investment property are included in the income statement in the period
in which they arise and transferred to the revaluation reserve.
In completing these valuations the valuer considers the following:
(i) current prices in an active market for properties of a different nature,
condition or location (or subject to different lease or other contracts),
adjusted to reflect those differences;
(ii) recent prices of similar properties in less active markets, with
adjustments to reflect any changes in economic conditions since the date of the
transactions that occurred at those prices; and
(iii) discounted cash flow projections based on reliable estimates of future
cash flows, derived from the terms of any existing lease and other contracts and
(where possible) from external evidence such as current market rents for similar
properties in the same location and condition, and using discount rates that
reflect current market assessments of the uncertainty in the amount and timing
of the cash flows.
Revenue recognition
(i) Rental income
Rental income from operating leases is recognised in income on a straight-line
basis over the lease term. Rent is billed in advance and then allocated to the
appropriate period. Therefore, deferred revenue generally represents the
proportion of rentals invoiced in advance as at the reporting date and any
advance payments from tenants. Revenue is recognised when it is probable that
the economic benefits associated with the transaction will flow to the Group and
the amount of revenue can be measured reliably. Incentives for lessees to enter
into lease agreements are spread evenly over the lease term, even if the
payments are not made on such a basis. The lease term is the non-cancellable
period of the lease, together with any further term for which the tenant has the
option to continue the lease, where, at the inception of the lease, the
directors are reasonably certain that the tenant will exercise that option.
(ii) Interest Income
Interest income and expenses is recognised in the income statement under the
effective interest method as they accrue. Interest income is recognised on a
gross basis, including withholding tax, if any.
(iii) Management fees
Management fees are recognised in the income statement on an accruals basis.
(iv) Promote payments
Under the terms of the Limited Partnership Agreement of NewRiver Retail
Investments LP, the Group is contractually entitled to receive a promote payment
should the returns from the joint venture to the joint venture partner exceed a
certain internal rate of return. This payment is only receivable by the Group on
disposal of underlying properties held by the joint venture. Any entitlements
under these arrangements are only accrued for in the financial statements once
the Group believes that crystalisation of the fee is virtually certain.
Joint ventures
The Group's investment properties are typically held in property specific SPVs,
which may be legally structured as a joint venture.
In assessing whether a particular SPV is accounted for as a subsidiary or joint
venture, the Group considers all of the contractual terms of the arrangement,
including the extent to which the responsibilities and parameters of the venture
are determined in advance of the joint venture agreement being agreed between
the two parties. The Group will then consider whether it has the power to govern
the financial and operating policies of the SPV, so as to obtain benefits from
its activities, and the existence of any legal disputes or challenges to this
control in order to conclude on the classification of the SPV as a joint venture
or subsidiary undertaking. The Group considers this position with the evidence
available at the time.
The Condensed Consolidated financial statements account for interests in joint
ventures using the equity method of accounting. Any premium paid for an interest
in a jointly controlled entity above fair value of identifiable assets,
liabilities and contingent liabilities is accounted for in accordance with the
goodwill accounting policy.
2 Segmental reporting
During the period the Group operated in one business segment, being property
investment in the United Kingdom and as such no further information is provided.
3 Earnings per share
The EPRA issued Best Practice Policy Recommendations in November 2006, which
gives guidelines for the calculation of performance measures. The Group has
decided to adopt the EPRA earnings measure, which excludes investment property
revaluations, impairments, gains and losses on disposals, changes in fair value
of financial instruments, intangible asset movements and related taxation.
The calculation of basic and diluted earnings per share is based on the
following data:
+--------------------------+------------+------------+----------+
| | 30 Sep | 31 March | 30 Sep |
| | 2010 | 2010 | 2009 |
+--------------------------+------------+------------+----------+
| | Group | Group | Group |
+--------------------------+------------+------------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+------------+------------+----------+
| Earnings | | | |
+--------------------------+------------+------------+----------+
| Earnings for the | 1,650 | 2,115 | (129) |
| purposes of basic and | | | |
| diluted earnings per | | | |
| share being net | | | |
| profit/(loss) for the | | | |
| period | | | |
+--------------------------+------------+------------+----------+
Adjustments to arrive at EPRA profit/(loss)
+--------------------------+------------+------------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+------------+------------+----------+
| Profit/(loss) after | 1,650 | 2,115 | (129) |
| taxation | | | |
+--------------------------+------------+------------+----------+
| Unrealised surplus on | (1,470) | (1,269) | - |
| revaluation of | | | |
| investment properties | | | |
+--------------------------+------------+------------+----------+
| Revaluation movement in | 12 | (1,663) | - |
| the joint venture | | | |
+--------------------------+------------+------------+----------+
| Adjusted EPRA | 192 | (817) | (129) |
| profit/(loss) | | | |
+--------------------------+------------+------------+----------+
Number of shares
+--------------------------+------------+------------+----------+
| | No 000's | No 000's | No 000's |
+--------------------------+------------+------------+----------+
| Weighted average number | 13,425 | 10,000 | 10,000 |
| of ordinary shares for | | | |
| the purposes of basic | | | |
| EPS and basic EPRA EPS | | | |
+--------------------------+------------+------------+----------+
| Effect of dilutive | | | |
| potential ordinary | | | |
| shares: | | | |
+--------------------------+------------+------------+----------+
| Options | 57 | 12 | - |
+--------------------------+------------+------------+----------+
| Warrants | 36 | 6 | - |
+--------------------------+------------+------------+----------+
| Weighted average number | 13,518 | 10,018 | 10,000 |
| of ordinary shares for | | | |
| the purposes of basic | | | |
| diluted EPS and basic | | | |
| diluted EPRA EPS | | | |
+--------------------------+------------+------------+----------+
As per the audited Consolidated Financial Statements at 31 March 2010, 624,000
shares have been issued to the Employee Benefit Trust ("EBT"). No shares have
been allocated to the Directors as at 30 September 2010 and therefore is not
included above.
+-------------------------+-------+--------+--------+
| EPS basic (Pence) | 12.29 | 21.15 | (1.29) |
+-------------------------+-------+--------+--------+
| EPRA EPS basic (Pence) | 1.43 | (8.17) | (1.29) |
+-------------------------+-------+--------+--------+
| Diluted EPS (Pence) | 12.21 | 21.11 | (1.29) |
+-------------------------+-------+--------+--------+
| EPRA diluted EPS | 1.42 | (8.16) | (1.29) |
| (Pence) | | | |
+-------------------------+-------+--------+--------+
4 Net asset value per share
The EPRA issued Best Practice Policy Recommendations in November 2006, which
gives guidelines for the calculation of performance measures. The Group has
decided to adopt the EPRA net asset value, which includes investment property
revaluations and excludes fair value of financial instruments.
+---------------------------+----------+----------+----------+
| | 30 Sep | 31 March | 30 Sep |
| | 2010 | 2010 | 2009 |
| | Group | Group | Group |
+---------------------------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------+----------+----------+----------+
| Net asset value (GBP'000) | 37,118 | 26,125 | 24,089 |
+---------------------------+----------+----------+----------+
| Number of ordinary shares | | | |
| at | | | |
+---------------------------+----------+----------+----------+
| 30 September/31 March | 14,212 | 10,000 | 10,000 |
| (000's) | | | |
+---------------------------+----------+----------+----------+
| Net asset value per share | 261 | 261 | 241 |
| (Pence) | | | |
+---------------------------+----------+----------+----------+
| Net asset value per share | 260 | 261 | 241 |
| (diluted) (Pence) | | | |
+---------------------------+----------+----------+----------+
| EPRA Net asset value per | 264 | 261 | 241 |
| share (Pence) | | | |
+---------------------------+----------+----------+----------+
Net asset value per share is based on Group net assets at 30 September 2010 of
GBP37,118k and the 14,212,000 ordinary shares in issue.
5 Investment Property
+---------------------------+----------+------------+----------+
| | 30 Sep | 31 March | 30 Sep |
| | 2010 | 2010 | 2009 |
| | Group | Group | Group |
+---------------------------+----------+------------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------+----------+------------+----------+
| Opening Balance | 13,315 | - | - |
+---------------------------+----------+------------+----------+
| Acquisitions in the | 22,730 | 12,046 | - |
| period | | | |
+---------------------------+----------+------------+----------+
| | 36,045 | 12,046 | - |
+---------------------------+----------+------------+----------+
| Net fair value gain on | 1,470 | 1,269 | - |
| revaluation of investment | | | |
| properties | | | |
+---------------------------+----------+------------+----------+
| Closing Balance | 37,515 | 13,315 | - |
+---------------------------+----------+------------+----------+
The Group's investment properties have been valued at 30 September 2010 by
independent valuers and by the Directors on the basis of open market value in
accordance with the Appraisal and Valuation Standards of the Royal Institute of
Chartered Surveyors.
The assets purchased as part of the Redevco portfolio were valued at the time of
purchase in May 2010. The Directors have considered this valuation and are
satisfied there has been no change in value at 30 September 2010.
It is the Group's policy to carry investment property at fair value in
accordance with IAS 40 "Investment Property". The fair value of the Group's
investment property at 30 September 2010 has been determined by the directors on
the basis of open market valuations carried out by Colliers International, who
is the external valuer to the Group.
The valuations included in the financial statements have been carried out in
accordance with The Royal Institution of Chartered Surveyors Valuation
Standards, Sixth Edition (the "Red Book").
The basis for the valuations included in the report is based on current market
rental yields, expected rental income and comparable market transactions.
6 Investment in joint ventures
+---------------------------+----------+------------+----------+
| | 30 Sep | 31 March | 30 Sep |
| | 2010 | 2010 Group | 2009 |
| | Group | | Group |
+---------------------------+----------+------------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------+----------+------------+----------+
| Opening Balance | 11,778 | - | - |
+---------------------------+----------+------------+----------+
| Additions at cost of | 1,440 | 10,037 | - |
| joint venture interests | | | |
| in the period | | | |
+---------------------------+----------+------------+----------+
| Dividend receivable at | (250) | - | - |
| period end | | | |
+---------------------------+----------+------------+----------+
| Share of post acquisition | 594 | 1,741 | - |
| profits | | | |
+---------------------------+----------+------------+----------+
| Net book value carried | 13,562 | 11,778 | - |
| forward | | | |
+---------------------------+----------+------------+----------+
The Group has the following interests in joint ventures:
+----------------------------------+---------------+------------+
| Name | Country | % Holding |
| | of | 2010 |
| | incorporation | |
+----------------------------------+---------------+------------+
| NewRiver Retail Investments LP | Guernsey | 50% |
+----------------------------------+---------------+------------+
| NewRiver Retail Investments (GP) | Guernsey | 50% |
| Ltd* | | |
+----------------------------------+---------------+------------+
NewRiver Retail Investments LP (the 'JV') is an established jointly controlled
limited partnership set up by NewRiver Retail Limited and Morgan Stanley Real
Estate Investing ("MSREI") to invest in UK Retail property. The JV has an
acquisition capacity in excess of GBP250 million including appropriate leverage
with future respective equity commitments being decided on a transaction by
transaction basis. Interests in further property acquisitions made by the joint
venture may vary from the current 50/50 split of existing projects.
The JV is owned equally by NewRiver Retail Limited and MSREI. NewRiver Capital
Limited, the wholly-owned subsidiary and property manager, and adviser to
NewRiver Retail Limited, is the appointed asset manager on behalf of the JV and
receives asset management fees as well as a performance-related return ("promote
payment"). No promote payment has been recognised
during the period and the
Company is entitled to receive promote payments when achieving the agreed
hurdles.
Under the terms of the Limited Partnership agreement relating to NewRiver Retail
Investments LP dated 28th February, 2010, MSREI has been granted the right to
convert its interest in the JV or part thereof on an NAV for NAV basis into
shares of NewRiver Retail Limited, to up to 10 per cent of the share capital of
NewRiver Retail Limited during the joint venture period. This conversion would
currently have an anti-dilutive effect on the Group's EPS calculation.
In line with the existing NewRiver investment strategy, the JV will target UK
retail property assets with the objective of delivering added value and above
average returns through NewRiver's proven skills in active and entrepreneurial
asset management and risk controlled development and refurbishment.
*NewRiver Retail Investments (GP) Ltd has a number of 100% owned subsidiaries
which are NewRiver Retail (Finco No 1) Limited and NewRiver Retail (GP1)
Limited, acting in its capacity as General Partner for NewRiver Retail (Holding
No 1) LP and NewRiver Retail (Portfolio No1 ) LP. These entities have been set
up to facilitate the investment in retail properties in the UK by the joint
venture.
The Group has applied equity accounting for its interest in the JV. The
aggregate amounts recognised in the consolidated balance sheet and income
statement are:
+------------------------+-------------------+--------------+
| | 2010 | 2010 |
+------------------------+-------------------+--------------+
| | NewRiver Retail | Group's |
| | Investments (GP) | Share |
| | Ltd | |
+------------------------+-------------------+--------------+
| | Total | 50% |
+------------------------+-------------------+--------------+
| | GBP'000 | GBP'000 |
+------------------------+-------------------+--------------+
| Non-current assets | 56,217 | 28,109 |
+------------------------+-------------------+--------------+
| Current assets | 2,037 | 1,019 |
+------------------------+-------------------+--------------+
| Current liabilities | (1,923) | (962) |
| | | |
+------------------------+-------------------+--------------+
| Non-current | (29,205) | (14,604) |
| liabilities | | |
+------------------------+-------------------+--------------+
| Net assets | 27,126 | 13,562 |
+------------------------+-------------------+--------------+
+------------------------+-------------------+--------------+
| Income | 2,243 | 1,122 |
+------------------------+-------------------+--------------+
| Administration | (306) | (153) |
| expenses | | |
+------------------------+-------------------+--------------+
| Finance costs | (531) | (266) |
+------------------------+-------------------+--------------+
| Decrease in valuation | (24) | (12) |
| of investment | | |
| properties | | |
+------------------------+-------------------+--------------+
| Provision for taxation | (194) | (97) |
+------------------------+-------------------+--------------+
| Profit after tax | 1,188 | 594 |
+------------------------+-------------------+--------------+
The Group's share of the contingent liabilities to the JV is GBPNil.
7 Investment in subsidiary undertakings
+------------------------+---------------+-----------------+----------------+
| Name | Country | Activity | Proportion of |
| | of | | ownership |
| | incorporation | | interest |
+------------------------+---------------+-----------------+----------------+
| | | | 2010 |
+------------------------+---------------+-----------------+----------------+
| NewRiver Retail | Guernsey | Real estate | 100% |
| (Wrexham No.1) Limited | | investments | |
+------------------------+---------------+-----------------+----------------+
| NewRiver Retail | Guernsey | Real estate | 100% |
| (Market Deeping No.1) | | investments | |
| Limited | | | |
+------------------------+---------------+-----------------+----------------+
| NewRiver Retail | Guernsey | Real estate | 100% |
| (Newcastle No.1) | | investments | |
| Limited | | | |
+------------------------+---------------+-----------------+----------------+
| NewRiver Retail | Guernsey | Real estate | 100% |
| (Portfolio No. 2) | | investments | |
| Limited | | | |
+------------------------+---------------+-----------------+----------------+
| NewRiver Capital | United | Investment | 100% |
| Limited | Kingdom | management | |
+------------------------+---------------+-----------------+----------------+
The Group's investment properties are held by its subsidiary undertakings.
8 Cash and cash equivalents
+---------------------------+--------------+--------------+--------------+
| | 30 Sep 2010 | 31 March | 30 Sep 2009 |
| | Group | 2010 | Group |
| | | Group | |
+---------------------------+--------------+--------------+--------------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------+--------------+--------------+--------------+
| Cash at bank | 1,208 | 503 | 4,226 |
+---------------------------+--------------+--------------+--------------+
| Short term deposits | 5,013 | 7,665 | 20,000 |
+---------------------------+--------------+--------------+--------------+
| | 6,221 | 8,168 | 24,226 |
+---------------------------+--------------+--------------+--------------+
9 Financial assets and liabilities
a) The financial assets of the Group consist of trade and other receivables,
cash and cash equivalents and cash deposits.
b) Non-current financial liabilities
+---------------------------+--------------+--------------+--------------+
| | 30 Sep 2010 | 31 March | 30 Sep 2009 |
| | Group | 2010 | Group |
| | | Group | |
+---------------------------+--------------+--------------+--------------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------+--------------+--------------+--------------+
| Secured bank loans | 19,619 | 6,693 | - |
+---------------------------+--------------+--------------+--------------+
| | | | |
+---------------------------+--------------+--------------+--------------+
| Maturity of borrowings: | | | |
+---------------------------+--------------+--------------+--------------+
| Less than one year | - | - | - |
+---------------------------+--------------+--------------+--------------+
| Between one and two years | - | - | - |
+---------------------------+--------------+--------------+--------------+
| Between two and five | 19,619 | 6,693 | - |
| years | | | |
+---------------------------+--------------+--------------+--------------+
| Over five years | - | - | - |
+---------------------------+--------------+--------------+--------------+
Borrowings
Bank loans are secured by way of legal charges on certain properties held by the
Group.
+----------+-------+--------------+----------+----------+--------------+
| Facility | Term | Maturity | 2010 | 2010 | Interest |
| type | | date | | | rate |
+----------+-------+--------------+----------+----------+--------------+
| | | | Total | Group | |
| | | | facility | utilised | |
+----------+-------+--------------+----------+----------+--------------+
| | | | Group | Group | |
+----------+-------+--------------+----------+----------+--------------+
| | | | GBP'000 | GBP'000 | |
+----------+-------+--------------+----------+----------+--------------+
| Term | 5 | 19 February | 9,303 | | |
| loan | Years | 2015 | | | |
| | | | | | |
+----------+-------+--------------+----------+----------+--------------+
| a) | | | | 6,702 | Fixed rate |
| Tranche | | | | | hedge at |
| 1 | | | | | 5.18% |
+----------+-------+--------------+----------+----------+--------------+
| b) | | | | 2,520 | Current rate |
| Tranche | | | | | floating at |
| 2 | | | | | 2.99% |
+----------+-------+--------------+----------+----------+--------------+
| Term | 3 | 4 June 2013 | 12,360 | | |
| loan | Years | | | | |
+----------+-------+--------------+----------+----------+--------------+
| a) | | | | 442 | Fixed rate |
| Tranche | | | | | hedge at |
| 1 | | | | | 3.89% |
+----------+-------+--------------+----------+----------+--------------+
| b) | | | | 9,955 | Fixed rate |
| Tranche | | | | | hedge at |
| 2 | | | | | 3.77% |
+----------+-------+--------------+----------+----------+--------------+
| Total | | | | 19,619 | |
+----------+-------+--------------+----------+----------+--------------+
The Group adopts a hedging policy which is aligned with the property strategy on
each of its assets. The total cost of borrowing on assets acquired at 30
September 2010 in respect of Investment properties held on Balance Sheet was
4.16% and for the joint venture entities was 3.52% giving a total effective
borrowing cost for the Group of 3.88% during the period to 30 September 2010.
Total loan facility fees of GBP172k have been offset against the Group's
borrowings and are being amortised over the life of the facilities.
The Group recognised a mark to market fair value loss of GBP470k on its interest
rate swaps as at 30 September 2010.
All borrowings are due after more than one year.
10 Cashflow note
+------------------------------+----------+------------+------------+
| | 30 Sep | 31 March | 30 Sep |
| | 2010 | 2010 | 2009 |
| | Group | Group | Group |
| | | | |
+------------------------------+----------+------------+------------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------+----------+------------+------------+
| Operating profit | 1,945 | 2,167 | (132) |
+------------------------------+----------+------------+------------+
| | | | |
+------------------------------+----------+------------+------------+
| Adjustments for: | | | |
+------------------------------+----------+------------+------------+
| Income from joint ventures | (606) | (79) | - |
| not received | | | |
+------------------------------+----------+------------+------------+
| Net gain on revaluation of | (1,470) | (1,269) | - |
| investment properties | | | |
+------------------------------+----------+------------+------------+
| Net gain on revaluation of | 12 | (1,663) | - |
| joint venture investment | | | |
+------------------------------+----------+------------+------------+
| Depreciation of property, | 1 | 12 | - |
| plant and equipment | | | |
+------------------------------+----------+------------+------------+
| Share based payments expense | 18 | 25 | 6 |
+------------------------------+----------+------------+------------+
| Operating cashflows before | (100) | (807) | (126) |
| movements in working capital | | | |
+------------------------------+----------+------------+------------+
| | | | |
+------------------------------+----------+------------+------------+
| Increase in receivables | (845) | (88) | 1 |
+------------------------------+----------+------------+------------+
| Increase in payables | 300 | 399 | 123 |
+------------------------------+----------+------------+------------+
| Cash outflows from | (645) | (496) | (2) |
| operations | | | |
+------------------------------+----------+------------+------------+
11 Share capital and share premium account
+---------------------------+------------+--------------+-----------+
| | 30 Sep | 31 March | 30 Sep |
| | 2010 | 2010 | 2009 |
| | Group | Group | Group |
+---------------------------+------------+--------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------+------------+--------------+-----------+
| Balance of share premium | 24,031 | - | - |
| account at 31 March 2010 | | | |
+---------------------------+------------+--------------+-----------+
| Issued in the period: | 10,530 | 25,000 | 25,000 |
| 4,212,000 ordinary shares | | | |
| at a price of 250p each | | | |
+---------------------------+------------+--------------+-----------+
| Issue costs | (735) | (969) | (788) |
+---------------------------+------------+--------------+-----------+
| Balance at 30 | 33,826 | 24,031 | 24,212 |
| September/31 March | | | |
+---------------------------+------------+--------------+-----------+
+---------------------------+------------+--------------+-----------+
| | No 000's | No 000's | No 000's |
+---------------------------+------------+--------------+-----------+
| Issued share capital | | | |
+---------------------------+------------+--------------+-----------+
| Ordinary shares of nil | 14,212 | 10,000 | 10,000 |
| par value | | | |
+---------------------------+------------+--------------+-----------+
| Treasury Shares | 624 | 624 | 624 |
+---------------------------+------------+--------------+-----------+
On the 5 May 2010 4,212,000 nil par value ordinary shares were issued for cash
consideration at a price of GBP2.50 resulting in an increase of the total share
premium to GBP33,826,000 (31 March 2010: GBP24,031,000). Costs of GBP735,000
directly attributable to the issue of these shares have been set against the
Share Premium account.
The number of shares in issue as at 30 September 2010 is 14,212,000 plus 624,000
of Treasury Shares. The Company has an unlimited Authorised share capital and
may issue an unlimited number of shares.
Shareholders who subscribed for Placing Shares in the initial Placing received
Warrants, in aggregate, to subscribe for 3 per cent of the Fully Diluted Share
Capital exercisable at the subscription price per Ordinary Share of GBP2.50 and
all such Warrants shall be fully vested and exercisable upon issuance. The
subscription price was adjusted to GBP2.46 following the share issue in May
2010.
The Warrants in aggregate give the Warrantholders the right to subscribe in cash
at the Subscription Price for the Warrant Shares.
12 Share-based payments
The Group provides share based payments to employees in the form of share
options, all share based payment arrangements granted since the admission on 1st
September 2009 have been recognised in the financial statements. The Group uses
the Black Scholes Model and the resulting value is amortised through the income
statement over the vesting period of the share based payments with a
corresponding credit to the share based payments reserve.
(a) Terms
+---------------------------------------------+------------+
| | No of |
| | options |
+---------------------------------------------+------------+
| Balance brought forward at 1 April 2010 | 660,200 |
+---------------------------------------------+------------+
| Awards made during the period | 193,836 |
+---------------------------------------------+------------+
| Awards vested during the period | - |
+---------------------------------------------+------------+
| Total at the end of the period | - |
+---------------------------------------------+------------+
| Exercisable options at the end of the | 854,036 |
| period | |
+---------------------------------------------+------------+
The awards granted during the period are based on a percentage of the total
number of shares in issue, as a result of the new share issue the number of
awards have increased.
(b) Share based payment charge
The Group recognised a total share-based payment expense of GBP18,110 during the
period.
13 Post balance sheet events
On the 28 October 2010 the Group announced the proposed election to enter the
UK-REIT regime and the proposed issue of up to GBP25m nominal value 5.85% CULS.
This was approved at the EGM on 19 November 2010. The Company will be liable for
a conversion charge of approximately GBP1.4m upon entering the UK-REIT regime,
this charge is payable over 4 years. Further details of the conversion to a REIT
and the issue of the CULS is included in the circular which can be found on the
company website at www.newriverretail.com.
On the 28 October 2010 the Group exchanged contracts on the purchase of a
portfolio of 5 retail assets from Standard Life for a purchase price of GBP14m
at a net initial yield of 9% financed with a debt facility at 65% loan to value
(LTV).
On the 30 November 2010 the Group completed on the purchase of a portfolio of 5
retail assets for a purchase price of GBP53m at a net initial yield of 8.35%
financed with a debt facility at 65% LTV.
On the 6 December 2010 the Board approved payment of the maiden dividend at 1p
per share (GBP142,120) payable in January 2011.
14 Related party transactions
Group
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note.
The following Directors held shares in the Company during the period:
+-------------------+-----------------+
| | Number of |
| | shares |
| | |
+-------------------+-----------------+
| David Lockhart | 1,580,000 |
+-------------------+-----------------+
| Allan Lockhart | 140,000 |
+-------------------+-----------------+
| Nick Sewell | 100,000 |
+-------------------+-----------------+
| Mark Davies | 6,000 |
+-------------------+-----------------+
| Paul Roy | 360,000 |
+-------------------+-----------------+
| Susie Farnon | 25,000 |
+-------------------+-----------------+
| Peter Tom CBE | 40,000 |
+-------------------+-----------------+
| Serena Tremlett | 6,000 |
+-------------------+-----------------+
Serena Tremlett (resigned 19 November 2010) is the Managing Director of Morgan
Sharpe Administration Limited which receives fees for providing secretarial and
administration services in respect of the Company. During the period GBP38k was
paid to Morgan Sharpe Administration in respect of these services. These
services were carried out on an arm's length basis.
Total emoluments of Directors and key management during the period (excluding
share-based payments) was GBP355k and there are no loan balances with directors.
Share based payments of GBP18,110 accrued during the period and no options were
exercised during the period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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