TIDMNRR
RNS Number : 9302S
NewRiver Retail Limited
29 November 2011
29 November 2011
NewRiver Retail Limited ("NewRiver" or "the Company")
Interim results for the period ended 30 September 2011
NewRiver Retail Limited (AIM and CISX: 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 2011.
Key Highlights
-- Profit before tax has increased by 65% to GBP2.8 million,
(2010: GBP1.7 million) and fivefold increase in EPRA EPS to 7.2p
(2010: 1.4p)
-- Increase in the interim dividend of 500% to 6p per share (2010: 1p)
-- EPRA NAV per share of 260p (2010: 264p) after absorbing
one-off purchase and fundraising costs of 20p per share
-- Oversubscribed equity fundraising of GBP42.5 million,
immediately deployed in completion of a major acquisition
-- Acquisitions in the period of GBP87.5 million and GBP6.4
million post period end at an average initial yield of 8.5%
-- Active asset management programme continues with 87 leasing
events completed since IPO defending and generating GBP2.7 million
of income
-- Risk controlled development programme of 500,000 sq ft
-- Gross assets under management have increased to GBP270 million (2010: GBP174 million)
David Lockhart, Chief Executive of NewRiver Retail Limited,
commented:
"These interim results reflect the strong start that the company
has made in the first half of the financial year. NewRiver strongly
believes that income returns will form the key element of total
returns for shareholders in the foreseeable future and therefore we
are particularly proud of the increased level of dividend we are
able to pay to our shareholders. This payment demonstrates the
Company's ability to deliver on its strategy.
Despite the challenging economic headwinds the Company remains
able to identify attractive opportunities and undertake an active
asset management and development programme which will help to
protect us from any fall in capital values. The Company has created
a significant platform for growth and we continue to look forward
to the future with confidence."
- ends -
For further information
NewRiver Retail Limited Tel: 0203 328 5800
David Lockhart, Chief Executive
Mark Davies, Finance Director
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 the interim results for the six months to
30 September 2011. NewRiver has made a strong start to the
financial year, delivering a profit before tax of GBP2.8 million,
(2010: GBP1.7 million). The Company has continued to build on its
strong start since incorporation and continues to develop a focused
asset-backed profitable business platform.
The Board is committed to shareholder returns and has agreed an
interim dividend of 6p per share which represents a 500% increase
on last year. The Board strongly believes that income returns will
form the key element of total returns for shareholders in the
foreseeable future and this significant increase in the dividend
demonstrates the Company's ability to deliver on its strategy.
A positive revaluation surplus in the period of GBP1.3 million
was achieved, reflecting the Company's astute acquisition strategy
and gains made through its active asset management programme at a
time when investment yields have remained static. This is reflected
in the EPRA NAV of 260p per share which has been achieved after
absorbing one off purchase and fundraising costs of 20p per
share.
Key highlights of the period under review include a successful
fundraise of GBP42.5 million through the issue of new ordinary
equity. The Board was very pleased with the level of interest from
a wide range of blue chip institutions that were attracted to
NewRiver's investment case and the issue was comfortably
oversubscribed despite challenging equity market conditions.
NewRiver quickly deployed the majority of the funds raised to
acquire a portfolio of four shopping centres from Zurich Assurance
Limited for a total consideration of GBP68 million bringing the
total value of acquisitions completed during the interim period to
GBP87.5 million. The average yield on the acquisitions completed
was an attractive 8.3% and total assets under management increased
to more than GBP270 million, a significant achievement considering
NewRiver's admission to AIM was only two years previous.
I am delighted to welcome all new shareholders who supported our
successful equity raise during the period. I'd also like to thank
all existing shareholders for their continued support. The Board is
also delighted to have completed the Zurich portfolio acquisition
with senior debt provided by the Clydesdale Bank which we welcome
as another principal lender to the Group alongside Santander and
HSBC.
The Company has announced two further acquisitions since the
period close. The Newlands shopping centre, Witham was acquired at
a purchase price of GBP5.0 million at an initial yield of 9.7%.
Witham is a well-established market town situated in Essex. The
Company is in discussions with a number of food retailers with whom
it has a good relationship about an anchoring opportunity within
this centre. The Company also completed the acquisition of 60-64
Church Walk, Burgess Hill where the Company already owns The
Martlets shopping centre. This unit is let to Store 21 and was
acquired at a price of GBP1.3 million to reflect an initial yield
of 10.1%.
The Company is making strong progress in its asset management
programme having completed 87 leasing events since IPO. In addition
the Company is engaged in a risk controlled development programme
within its existing portfolio in excess of 500,000 sq ft.
Negotiations with anchor retailers are ongoing and at a recent
investor day in Burgess Hill, West Sussex, the management team
presented outline plans for an extension of the shopping centre to
include a c80,000 sq ft food store anchor. Whilst the Company moves
forward on its development plans, it continues to generate
attractive double digit cash on equity returns through actively
asset managing existing income streams. This is at the heart of the
Company's investment model.
Despite the challenging headwinds the Company remains able to
identify attractive opportunities in its key sectors of food and
value led retailing. These key sectors continue to perform well,
with positive demand from occupiers many of whom are looking for
new space. The Company's top 10 tenants include Tesco, Poundland,
Sainsbury's and Wilkinsons.
NewRiver Retail aims to become one of the leading value-creating
property investment platforms in the UK retail property sector and
significant progress has been made in achieving that goal. In these
uncertain economic times, capital values may come under pressure,
but the Board believes the Company's value creating business model
will protect shareholders interests. NewRiver remains well placed
to deliver strong earnings growth and the Board looks forward to
the future with confidence.
Paul Roy
Chairman
NewRiver Retail Limited
29 November 2011
Independent Review Report to NewRiver Retail Limited
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2011 which comprises the Consolidated
Condensed Statement of Comprehensive Income, the Consolidated
Condensed Statement of Other Comprehensive Income, the Consolidated
Condensed Balance Sheet, the Consolidated Condensed Cash Flow
Statement, the Consolidated Condensed Statement of Changes in
Equity and related notes 1 to 16. We have read the other
information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Auditing Practices
Board. Our work has been undertaken so that we might state to the
Company those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Group, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the AIM Rules of the London Stock Exchange.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs. The condensed set of
financial statements included in this half-yearly financial report
has been prepared in accordance with International Accounting
Standard 34, "Interim Financial Reporting".
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and 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 financial statements
in the half-yearly financial report for the six months ended 30
September 2011 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 and the AIM
Rules of the London Stock Exchange.
Deloitte LLP
Chartered Accountants
Guernsey, Channel Islands
28 November 2011
Neither an audit nor a review provides assurance on the
maintenance and integrity of the website, including controls used
to achieve this, and in particular whether any changes may have
occurred to the financial information since first published. These
matters are the responsibility of the directors but no control
procedures can provide absolute assurance in this area.
Legislation in Guernsey governing the preparation and
dissemination of financial information differs from legislation in
other jurisdictions.
Consolidated Condensed Statement of Comprehensive Income
For the period from 1 April 2011 to 30 September 2011
Notes Unaudited Unaudited Audited
Period Period Year ended
1 April 1 April 31 March
2011 to 2010 to 2011
30 Sep 30 GBP'000
2011 GBP'000 Sep 2010
GBP'000
----------------------------------------------------- ------ -------------- ---------- ------------
Group net income 3 5,941 2,155 6,756
Less share of joint venture income (921) (1,122) (2,331)
----------------------------------------------------- ------ -------------- ---------- ------------
5,020 1,033 4,425
Total operating expenses (1,821) (1,152) (3,159)
Income from joint ventures 10 467 594 1,817
Net surplus on revaluation of investment properties 9 1,393 1,470 3,574
Profit on sale of investment properties 45 - -
----------------------------------------------------- ------ -------------- ---------- ------------
Operating profit 5,104 1,945 6,657
----------------------------------------------------- ------ -------------- ---------- ------------
Finance expense
Finance income 2 24 29
Finance costs (2,262) (284) (1,774)
----------------------------------------------------- ------ -------------- ---------- ------------
Profit for the period/year before taxation 2,844 1,685 4,912
Current taxation - (35) (124)
REIT conversion charge - - (1,600)
----------------------------------------------------- ------ -------------- ---------- ------------
Profit for the period/year after taxation 2,844 1,650 3,188
----------------------------------------------------- ------ -------------- ---------- ------------
Earnings per share
Basic (pence) 4 14.5 12.3 23.1
Diluted (pence) 4 14.3 12.2 23.0
----------------------------------------------------- ------ -------------- ---------- ------------
All activities derive from continuing operations of the Group.
The notes form an integral part of these financial statements
Consolidated Condensed Statement of Other Comprehensive
Income
For the period from 1 April 2011 to 30 September 2011
Notes Unaudited Unaudited Audited
Period Period Year ended
1 April 1 April 31 March
2011 to 2010 to 2011 GBP'000
30 Sep 30
2011 GBP'000 Sep 2011
GBP'000
------------------------------------------------ ------ -------------- ---------- --------------
Profit for the period/year after taxation 2,844 1,650 3,188
------------------------------------------------ ------ -------------- ---------- --------------
Other comprehensive income
Fair value loss on interest rate swaps 13 (1,323) (470) (204)
------------------------------------------------ ------ -------------- ---------- --------------
Total comprehensive income for the period/year 1,521 1,180 2,984
------------------------------------------------ ------ -------------- ---------- --------------
All activities derive from continuing operations of the Group.
The notes form an integral part of these financial statements
Consolidated Condensed Balance Sheet
As at 30 September 2011
Notes Unaudited Unaudited Audited
as at 30 as at 30 as at 31
Sep 2011 Sep 2010 March 2011
GBP'000 GBP'000 GBP'000
--------------------------- ------ ---------- ---------- ------------
Non-current assets
Investment properties 9 189,690 37,515 105,800
Development properties 195 - -
Investments in joint
ventures 10 11,893 13,562 11,926
Property, plant
& equipment 13 7 7
--------------------------- ------ ---------- ---------- ------------
Total non-current
assets 201,791 51,084 117,733
--------------------------- ------ ---------- ---------- ------------
Current assets
Trade and other
receivables 2,893 1,190 1,413
Cash and cash equivalents 8 6,565 6,221 10,651
--------------------------- ------ ---------- ---------- ------------
Total current assets 9,458 7,411 12,064
--------------------------- ------ ---------- ---------- ------------
Total assets 211,249 58,495 129,797
--------------------------- ------ ---------- ---------- ------------
Equity and liabilities
Current liabilities
Trade and other
payables 7,081 1,242 4,980
Derivative financial
instruments 1,573 516 116
--------------------------- ------ ---------- ---------- ------------
Total current liabilities 8,654 1,758 5,096
--------------------------- ------ ---------- ---------- ------------
Non-current liabilities
Trade and other
payables 1,160 - 1,201
Borrowings 11 97,046 19,619 60,252
Debt instruments 11 24,524 - 24,474
--------------------------- ------ ---------- ---------- ------------
Total non-current
liabilities 122,730 19,619 85,927
--------------------------- ------ ---------- ---------- ------------
Net assets 79,865 37,118 38,774
--------------------------- ------ ---------- ---------- ------------
Equity
Retained earnings 13 1,129 1,026 318
Share premium 13 40,345 33,826 -
Other reserves 13 33,801 - 33,801
Hedging reserve 13 (1,573) (516) (250)
Share option reserve 14 78 43 62
Revaluation reserve 13 6,085 2,739 4,843
--------------------------- ------ ---------- ---------- ------------
Total equity 79,865 37,118 38,774
--------------------------- ------ ---------- ---------- ------------
Net Asset Value
(NAV) per share
Basic (pence) 5 257 261 273
Diluted (pence) 5 255 260 272
--------------------------- ------ ---------- ---------- ------------
The notes form an integral part of these financial
statements
The financial statements were approved by the Board of Directors
on 28 November 2011 and were signed on its behalf by:
David Lockhart Mark Davies
Chief Executive Finance Director
Consolidated Condensed Cash Flow Statement
As at 30 September 2011
Note Unaudited Unaudited Audited
as at as at as at
30 Sep 30 Sep 31 March
2011 GBP'000 2010 GBP'000 2011 GBP'000
--------------------------------------------------------------- ----- -------------- -------------- --------------
Net cash inflow/(outflow) from operating activities 12 3,115 (645) 2,796
--------------------------------------------------------------- ----- -------------- -------------- --------------
Investing Activities:
Purchase of investment properties 9 (87,497) (22,730) (88,911)
Costs on development properties (195) - -
Purchase of plant & equipment (6) (1) -
Cash received on sale of investment property 5,000 - -
Cash inflow/(outflow) from joint ventures 10 500 (1,190) 1,535
--------------------------------------------------------------- ----- -------------- -------------- --------------
Net cash from investing activities (82,198) (23,921) (87,376)
--------------------------------------------------------------- ----- -------------- -------------- --------------
Financing Activities:
Net finance costs (1,502) (102) (740)
Dividends paid during the period/year (640) - -
Issue of new shares 13 40,345 9,795 9,770
Increase in bank loans 40,382 12,926 53,559
Repayment of bank loans (3,588) - -
Net proceeds from issue of Convertible Unsecured Loan Stock 11 - - 24,474
--------------------------------------------------------------- ----- -------------- -------------- --------------
Net cash from financing activities 74,997 22,619 87,063
--------------------------------------------------------------- ----- -------------- -------------- --------------
Cash and cash equivalents at the beginning of the period/year 8 10,651 8,168 8,168
Movement during the period/year (4,086) (1,947) 2,483
--------------------------------------------------------------- ----- -------------- -------------- --------------
Cash and cash equivalents at the end of the period/year 8 6,565 6,221 10,651
--------------------------------------------------------------- ----- -------------- -------------- --------------
Cash and cash equivalents comprise:
Cash at bank and in hand 6,565 6,221 10,651
--------------------------------------------------------------- ----- -------------- -------------- --------------
Cash and cash equivalents at the end of the period/year 6,565 6,221 10,651
--------------------------------------------------------------- ----- -------------- -------------- --------------
The notes form an integral part of these financial
statements
Consolidated Condensed Statement of Changes in Equity
As at 30 September 2011
Notes Retained Other Share Revaluation Share Hedging Total
Earnings Reserves Premium Reserve based Reserve GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 Payments GBP'000
GBP'000
--------------------------- ------ ---------- ---------- --------- ------------ ---------- --------- ---------
As at 31 March 2010 846 - 24,031 1,269 25 (46) 26,125
--------------------------- ------ ---------- ---------- --------- ------------ ---------- --------- ---------
Net proceeds of issue of
new shares 13 - - 9,795 - - - 9,795
Total comprehensive income
for the period 1,650 - - - - (470) 1,180
Share-based payments - - - - 18 - 18
Revaluation surplus for
the period 9 (1,470) - - 1,470 - - -
--------------------------- ------ ---------- ---------- --------- ------------ ---------- --------- ---------
As at 30 September 2010 1,026 - 33,826 2,739 43 (516) 37,118
--------------------------- ------ ---------- ---------- --------- ------------ ---------- --------- ---------
Notes Retained Other Share Revaluation Share Hedging Total
Earnings Reserves Premium Reserve based Reserve GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 Payments GBP'000
GBP'000
-------------------------- ------ ---------- ---------- ---------- ------------ ---------- --------- ---------
As at 31 March 2010 846 - 24,031 1,269 25 (46) 26,125
-------------------------- ------ ---------- ---------- ---------- ------------ ---------- --------- ---------
Transfer of share premium 13 - 24,031 (24,031) - - - -
Net proceeds of issue
from new shares - 9,770 - - - - 9,770
Total comprehensive
income for the year 3,188 - - - - (204) 2,984
Share based payments - - - - 37 - 37
Dividend payments 13 (142) - - - - - (142)
Revaluation surplus for
the year 9 (3,574) - - 3,574 - - -
-------------------------- ------ ---------- ---------- ---------- ------------ ---------- --------- ---------
As at 31 March 2011 318 33,801 - 4,843 62 (250) 38,774
-------------------------- ------ ---------- ---------- ---------- ------------ ---------- --------- ---------
Transfer of share premium - - - - - - -
Net proceeds of issue
from new shares 13 - - 40,345 - - - 40,345
Total comprehensive
income for the period 2,844 - - - - (1,323) 1,521
Share based payments - - - - 16 - 16
Dividend payments 13 (640) - - - - - (640)
Unamortised tenant
incentives - - - (151) - - (151)
Revaluation surplus for
the period 9 (1,393) - - 1,393 - - -
-------------------------- ------ ---------- ---------- ---------- ------------ ---------- --------- ---------
As at 30 September 2011 1,129 33,801 40,345 6,085 78 (1,573) 79,865
-------------------------- ------ ---------- ---------- ---------- ------------ ---------- --------- ---------
The notes form an integral part of these financial
statements
Notes to the accounts
For the period from 1 April 2011 to 30 September 2011
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 was incorporated in
Guernsey under the provisions of The Companies (Guernsey) Law,
2008. On 22 November 2010, the Company converted to a REIT and
repatriated effective management and control to the United Kingdom.
The Company's registered office is Isabelle Chambers, Route
Isabelle, St Peter Port, Guernsey GY1 3TX and the business address
is Level 2 Greybrook House, 28 Brook Street London, W1K 5DH. 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 were:
-- Value of investment property
-- Timing of property transactions
-- Capital expenditure and tenant incentive commitments
-- Forecast rental income
-- Loan covenants
The Group has cash and short term deposits, as well as surplus
net 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
These financial statements have been prepared on a going concern
basis and in accordance with International Accounting Standards 34,
"Interim Financial Reporting". These financial statements have been
prepared under the historical cost convention, as modified by the
revaluation of investment properties, joint venture interests and
derivatives which are fair valued.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company, its subsidiaries and the SPV's
controlled by the Company, made up to 30 September 2011. 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 Group financial statements consolidate the financial
statements of the Company and its subsidiaries. Intra group
transactions are eliminated in full.
Changes to standards
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 9 Financial Instruments effective 1 January 2013
IFRS 10 Consolidated Financial Statements effective 1 January
2013
IFRS 11 Joint arrangements effective 1 January 2013
IFRS 12 Disclosure of interests in other entities effective 1
January 2013
IFRS 13 Fair value measurements effective 1 January 2013
The following standards are currently in place and have not had
any significant impact on the financial statements.
IAS 24 (Amended) Related Party Disclosures (Effective for
periods on or after 1 January 2011)
IAS 34 Interim Financial Reporting effective 1 March 2011
These changes are not expected to have a material impact on the
Group's financial statements.
Use of estimates and key sources of estimation uncertainty
The preparation of the Group's financial statements requires
management to make estimates and assumptions that affect the
reported amounts of assets, liabilities and contingencies at the
date of the Group's 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 did not 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 significant 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 vesting period. This
requires significant estimates of a number of inputs which are used
to model that fair value.
(iii) Valuation of Convertible Unsecured Loan Stock
Management was required to make estimates with the assistance of
external experts to conclude on the valuation of the convertible
unsecured loan stock at the date of issue. The issuance of the
compound instrument was between two knowledgeable parties at arms
length and at a market rate of 5.85% pa for 5 years. Management
have concluded that the value of the convertible option was
negligible and the value resided in the debt portion of the
instrument at the date of issue.
(iv) 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.
When the Group begins to redevelop an existing investment
property for continued future use as an investment property, the
property remains an investment property and is accounted for as
such. When the Group begins to redevelop an existing investment
property with a view to sell, the property is transferred to
trading properties and held as a current asset. The property is
re-measured to fair value as at the date of the transfer with any
gain or loss being taken to the income statement. The re-measured
amount becomes the deemed cost at which the property is then
carried in trading properties.
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.
Value added tax
Revenues, expenses and assets are recognised net of the amount
of value added tax except:
(i) Where the value added tax incurred on a purchase of assets
or services is not recoverable from the taxation authority, in
which case the value added tax is recognised as part of the cost of
acquisition of the asset or as part of the expense item as
applicable; and
(ii) Receivables and payables that are stated with the amount of
value added tax included. The net amount of value added tax
recoverable from, or payable to, the taxation authority is included
as part of receivables or payables in the balance sheet.
Revenue recognition
(i) Rental income
Rental income is recognised on an accruals basis. A rent
adjustment based on open market estimated rental value is
recognised from the rent review date in relation to unsettled rent
reviews. Where a rent-free period is included in a lease, the
rental income foregone is allocated evenly over the period from the
date of lease commencement to the earliest termination date.
Rental income from fixed and minimum guaranteed rent reviews is
recognised on a straight-line basis over the shorter of the entire
lease term or the period to the first break option. Where such
rental income is recognised ahead of the related cash flow, an
adjustment is made to ensure the carrying value of the related
property including the accrued rent does not exceed the external
valuation. Initial direct costs incurred in negotiating and
arranging a new lease are amortised on a straight-line basis over
the period from the date of lease commencement to the earliest
termination date.
Where a lease incentive payment, including surrender premiums
paid, it is amortised on a straight-line basis over the period from
the date of lease commencement to the earliest termination date.
Upon receipt of a surrender premium for the early determination of
a lease, the profit, net of dilapidations and non-recoverable
outgoings relating to the lease concerned, is immediately reflected
in income.
(ii) Interest Income
Interest income and expenses are 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) Asset management fees
Management fees are recognised in the income statement on an
accruals basis. Interest income is recognised on a gross basis,
including withholding tax, if any.
(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 crystallisation of the fee
is virtually certain.
Business combinations
Goodwill arising on acquisition is recognised as an asset and
initially measured at cost, being the excess of the cost of the
business combination over the Group's interest in the net fair
value of the identifiable assets, liabilities and contingent
liabilities recognised. If, after reassessment, the Group's
interest in the net fair value of the acquiree's identifiable
assets, liabilities and contingent liabilities exceeds the cost of
the business combination, the excess is recognised immediately in
the income statement. Goodwill is reviewed for impairments
annually. The acquisition of subsidiaries is accounted for using
the purchase method. The cost of the acquisition is measured at the
aggregate of the fair values, at the date of completion, of assets
given, liabilities incurred or assumed, and equity instruments
issued by the Group in exchange for control of the acquired. The
acquiree's identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3
are recognised at their fair value at the acquisition.
Whilst a corporate acquisition would normally be accounted for
under IFRS 3, there are situations where these transfers may not
qualify as business combinations. This is considered on a case by
case basis by management in light of the substance of the
acquisition.
Acquisitions
The consideration payable in respect of each acquisition may be
dependant upon certain future events. In calculating the cost of
each acquisition the Group has assessed the most probable outcome
as at the balance sheet date. These amounts are reconsidered
annually at each year end and changes to consideration are taken to
the income statement.
Joint ventures
The Group's investment properties are typically held in property
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 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.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits, and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value.
Convertible unsecured loan stock
Convertible unsecured loan stock consist of both a liability and
equity element. On issue of convertible debt, management assess the
fair value of the liability by reference to the cash flow to
redemption associated with the instrument, discounted at a market
rate of interest. The difference between the issue proceeds and the
fair value of the liability is allocated to the equity element of
the instrument.
Trade and other payables
Trade and other payables are initially recognised at fair value,
and subsequently where necessary re-measured at amortised cost
using the effective interest method.
Trade and other receivables
Trade and other receivables are initially recognised at fair
value. A provision for impairment of trade receivables is
established when there is objective evidence the Group will not be
able to collect all amounts due according to the original terms of
the receivables.
Share based payments
Share options have been granted to key management as set out in
note 14. The cost of equity settled transactions is measured with
reference to the fair value at the date at which they were granted.
The Group accounts for the fair value of these options at grant
date over the vesting period in the income statement, with a
corresponding increase to the share based payment reserve. The fair
value was calculated based on the Black Scholes Model using the
following inputs:
Share price GBP2.40 - GBP2.50
Exercise price GBP2.44 - GBP2.71
Expected volatility 23%* - 10%*
Risk free rate 2.48% - 2.60%
Expected dividends* 4% - 3%
*based on quoted property sector average (not NewRiver Retail
Limited's expected dividend)
Treasury shares
Own equity instruments which are reacquired (treasury shares)
are recognised at cost and deducted from equity. No gain or loss is
recognised in the income statement on the purchased, sale, issue or
cancellation of the Group's own equity instruments. Any difference
between the carrying amount and the consideration is recognised in
the reserves.
The Group has issued a number of shares to an Employee Benefit
Trust (EBT). As this EBT is controlled by the Group, it is
consolidated in these financial statements and unallocated shares
held by the EBT are shown as treasury shares.
Dividends
Dividends to the Company's shareholders are recognised when they
become legally payable. This occurs when the dividend is declared
by the Directors and approved by the Board.
Hedge accounting
Hedges of interest rate risk on firm commitments are accounted
for as cash flow hedges.
At the inception of the hedge relationship, the entity documents
the relationship between the hedging instruments and the hedged
item, along with its risk management objectives and its strategy
for undertaking various hedge transactions. Furthermore, at the
inception of the hedge and on an ongoing basis, the Group documents
whether the hedging instrument is highly effective in offsetting
changes in fair values or cash flows of the hedged item.
Cash flow hedge
The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash flow hedges is
recognised in other comprehensive income. The gain or loss relating
to the ineffective portion is recognised immediately in profit or
loss, and is included in the 'other gains and losses' line
item.
Amounts previously recognised in other comprehensive income and
accumulated in equity are reclassified to profit or loss in the
periods when the hedged item is recognised in profit or loss, in
the same line of the income statement as the recognised hedged
item. However, when the forecast transaction that is hedged results
in the recognition of a non-financial asset or a non-financial
liability, the gains and losses previously accumulated in equity
are transferred from equity and included in the initial measurement
of the cost of the non-financial asset or non-financial
liability.
Hedge accounting is discontinued when the Group revokes the
hedging relationship, the hedging instrument expires or is sold,
terminated, or exercised, or no longer qualifies for hedge
accounting. Any gain or loss recognised in other comprehensive
income at that time is accumulated in equity and is recognised when
the forecast transaction is ultimately recognised in profit or
loss. When a forecast transaction is no longer expected to occur,
the gain or loss accumulated in equity is recognised immediately in
profit or loss.
Leasing (as lessors)
Leases where the Group does not transfer substantially all the
risks and benefits incidental to the ownership of the assets are
classified as operating leases. All of the Group's properties are
leased under operating leases and included in investment property
in the balance sheet.
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 Revenue
30 Sep 30 Sep 31 March
2011 GBP'000 2010 GBP'000 2011 GBP'000
------------------------------------ --------------- --------------- --------------
Rental and related income 6,088 1,981 6,709
Asset management fees 217 166 342
Surrender premiums and commissions 32 8 58
Direct property costs (396) - (353)
------------------------------------ --------------- --------------- --------------
Group net income 5,941 2,155 6,756
------------------------------------ --------------- --------------- --------------
4 Earnings per share
The European Public Real Estate Association (EPRA) issued Best
Practices Policy Recommendations in October 2010, which gives
guidelines for performance measures. The EPRA earnings measure
excludes investment property revaluations and gains on disposals,
intangible asset movements and their related taxation and the REIT
conversion charge.
The calculation of basic and diluted earnings per share is based
on the following data
30 Sep 30 Sep 31 March
2011 GBP'000 2010 GBP'000 2011 GBP'000
-------------------------------------------------------------------- --------------- --------------- --------------
Earnings
Earnings for the purposes of basic and diluted EPS being profit
after taxation 2,844 1,650 3,188
Adjustments to arrive at EPRA profit
Exceptional items:
REIT conversion charge - - 1,600
Prior year tax provision - - 36
Other exceptional items - - 165
Profit on sale of investment properties (45) - -
Unrealised surplus on revaluation of investment properties (1,393) (1,470) (3,574)
Unrealised surplus on revaluation of joint venture investment
properties - 12 (545)
-------------------------------------------------------------------- --------------- --------------- --------------
EPRA profit 1,406 192 870
-------------------------------------------------------------------- --------------- --------------- --------------
Number of shares No 000's No 000's No 000's
------------------------------------------------------------------------------------- --------- --------- ---------
Weighted average number of ordinary shares for the purposes of basic EPS and basic
EPRA EPS 19,652 13,425 13,822
Effect of dilutive potential ordinary shares:
Options 125 57 21
Warrants 62 36 22
------------------------------------------------------------------------------------- --------- --------- ---------
30 Sep 30 Sep 31 March
2011 000's 2010 000's 2011 000's
-------------------------------------------------------------------------- ------------- ------------- ------------
Weighted average number of ordinary shares for the purposes of basic
diluted EPS and basic
diluted EPRA EPS 19,839 13,518 13,865
-------------------------------------------------------------------------- ------------- ------------- ------------
EPRA EPS basic (pence) 7.2 1.4 6.3
EPRA diluted EPS (pence) 7.1 1.4 6.3
EPS basic (pence) 14.5 12.3 23.1
Diluted EPS (pence) 14.3 12.2 23.0
-------------------------------------------------------------------------- ------------- ------------- ------------
5 Net asset value per share
30 Sep 30 Sep 31 March
2011 GBP'000 2010 GBP'000 2011 GBP'000
--------------------------- -------------- -------------- --------------
Net asset value 79,865 37,118 38,774
Number of ordinary shares
(000's) 31,080 14,215 14,215
Number of ordinary shares
EPRA* (000's) 43,743 - 24,467
EPRA Net asset value
per share (pence) 260 264 273
Basic Net asset value
per share (pence) 257 261 273
Diluted Net asset value
per share (pence) 255 260 272
--------------------------- -------------- -------------- --------------
*The number of shares in issue is adjusted under the EPRA
calculation assumes conversion of the warrants, options and the
Convertible Unsecured Loan Stock converted to equity. The
conversion of the CULS would currently have an accretive effect to
the EPRA NAV per share.
Under the terms of the Limited Partnership agreement relating to
NewRiver Retail Investments LP dated 28 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, up to 10 per cent of the share capital of NewRiver Retail
Limited during the joint venture period. This conversion would
currently have an accretive effect on the Group's EPS calculation
and hence is not reflected in the NAV per share or EPRA NAV per
share figures.
6 Dividends
On 20 July 2011, the Company paid a final dividend of 4.5p per
share. The total dividend paid for the year ended 31 March 2011 was
5.5p per share.
On 28 November 2011, the Board of Directors approved an interim
dividend of 6p per share, payable on 23 December 2011 to ordinary
shareholders on the register at the close of business on 9 December
2011.
The dividend will be paid entirely as a PID (Property Income
Distribution). PID dividends are paid, as required by REIT
legislation, after deduction of withholding tax at the basic rate
of income tax (currently 20%). However, certain classes of
shareholder may be able to claim exemption from deduction of
withholding tax.
7 Investment in subsidiary undertakings
Below is a list of the Group's principal subsidiaries:
Name Country Activity Proportion
of incorporation of ownership
interest
2011
------------------------------ ------------------- --------------- --------------
Operating
NewRiver Retail (UK) United Co and asset
Limited Kingdom management 100%
NewRiver Retail (Wrexham Real estate
No. 1) Limited Guernsey investments 100%
NewRiver Retail (Market Real estate
Deeping No. 1) Limited Guernsey investments 100%
NewRiver Retail (Newcastle Real estate
No. 1) Limited Guernsey investments 100%
NewRiver Retail (Portfolio Real estate
No. 1) Limited Guernsey investments 100%
NewRiver Retail (Portfolio Real estate
No. 2) Limited Guernsey investments 100%
NewRiver Retail (Portfolio United Real estate
No. 3) Limited Kingdom investments 100%
NewRiver Retail (Portfolio United Real estate
No. 4) Limited Kingdom investments 100%
NewRiver Retail (Portfolio United Real estate
No. 5) Limited Kingdom investments 100%
NewRiver Retail (Wisbech) United Real estate
Limited Kingdom investments 100%
NewRiver Retail (Carmarthen) United Real estate
Limited Kingdom investments 100%
NewRiver Retail (Skegness) United Real estate
Limited Kingdom investments 100%
NewRiver Retail (Paisley) United Real estate
Limited Kingdom investments 100%
NewRiver Retail (Boscombe United Real estate
No. 1) Limited Kingdom investments 100%
NewRiver Retail CUL No. United Finance
1 Limited Kingdom Company 100%
------------------------------ ------------------- --------------- --------------
The Group's investment properties are held by its subsidiary
undertakings.
8 Cash and cash equivalents
30 Sep 30 Sep 31 March
2011 GBP'000 2010 GBP'000 2011 GBP'000
-------------- --------------- --------------- --------------
Cash at bank 6,565 6,221 10,651
-------------- --------------- --------------- --------------
6,565 6,221 10,651
-------------- --------------- --------------- --------------
9 Investment properties
30 Sep 30 Sep 31 March
2011 GBP'000 2010 GBP'000 2011 GBP'000
--------------------------------- --------------- --------------- --------------
Opening balance 105,800 13,315 13,315
Acquisitions in the period/year 87,497 22,730 88,911
Disposals in the period/year (5,000) - -
--------------------------------- --------------- --------------- --------------
188,297 36,045 102,226
Fair value surplus on property
revaluations 1,393 1,470 3,574
--------------------------------- --------------- --------------- --------------
Closing balance 189,690 37,515 105,800
--------------------------------- --------------- --------------- --------------
The Group's investment properties have been valued at 30
September 2011 by independent valuers on the basis of open market
value in accordance with the Appraisal and Valuation Standards of
the Royal Institute of Chartered Surveyors Sixth Edition (the "Red
Book").
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 2011 has
been determined by the directors on the basis of open market
valuations carried out by Colliers International who are the
external valuers to the Group.
The basis for the valuations included in the report is based on
current market rental yields, expected rental income and comparable
market transactions.
10 Investments in joint ventures
30 Sep 30 Sep 31 March
2011 GBP'000 2010 GBP'000 2011 GBP'000
------------------------------------ --------------- --------------- --------------
Opening balance 11,926 11,778 11,778
Additional joint venture interests
during the period/year 1 - 1,440 1,440
Income from joint ventures 467 594 1,817
Distributions and dividends
1 (500) (250) (2,032)
Return of capital 1 - - (943)
Hedging movements - - (134)
------------------------------------ --------------- --------------- --------------
Net book value 11,893 13,562 11,926
------------------------------------ --------------- --------------- --------------
Below is a list of the Group's joint venture companies.
Name Country of incorporation % Holding 2011
----------------------------- -------------------------- ---------------
NewRiver Retail Investments
LP Guernsey 50%
NewRiver Retail Investments
(GP) Ltd* Guernsey 50%
----------------------------- -------------------------- ---------------
1 The net cash inflow during the year was GBP0.5m (2010: Outflow
GBP1.2m).
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 GBP250m 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 Retail (UK) Limited is the appointed asset manager on
behalf of the JV and receives asset management fees as well as
performance-related return promote payment. No promote payment has
been recognised during the period and the Group is entitled to
receive promote payments only after achieving the agreed
hurdles.
Under the terms of the Limited Partnership agreement relating to
NewRiver Retail Investments LP dated 28 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, 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 No 1) LP. These entities have been set up to facilitate
the investment in retail properties in the UK by the joint
venture.
The Group has a 31 December year end and applied equity
accounting for its interest in the JV. The aggregate amounts
recognised in the consolidated balance sheet and income statement
eliminate inter company transactions and are as follows:
30 Sep 30 Sep
2011 NewRiver 2011 Group's
Retail Share
Investments 50% GBP'000
(GP) Ltd
Total
GBP'000
--------------------------------------------- --------------- --------------
Non-current assets 46,430 23,215
Current assets 1,654 827
Current liabilities (1,371) (686)
Non-current liabilities (22,927) (11,463)
--------------------------------------------- --------------- --------------
Net assets 23,786 11,893
--------------------------------------------- --------------- --------------
Income 1,843 921
Administration expenses (455) (227)
Finance costs (454) (227)
--------------------------------------------- --------------- --------------
Profit after tax 934 467
--------------------------------------------- --------------- --------------
Fair value surplus on property revaluations - -
Income from joint ventures 934 467
--------------------------------------------- --------------- --------------
The Group's share of the contingent liabilities to the JV is
GBPnil.
11 Borrowings
30 Sep 30 Sep 31 March
2011 GBP'000 2010 GBP'000 2011 GBP'000
---------------------------------- --------------- --------------- --------------
Secured bank loans 97,046 19,619 60,252
Convertible Unsecured Loan Stock 24,524 - 24,474
---------------------------------- --------------- --------------- --------------
121,570 19,619 84,726
Maturity of borrowings:
Less than one year - - -
Between one and two years* 13,268 - -
Between two and five years 108,302 19,619 84,726
Over five years - - -
---------------------------------- --------------- --------------- --------------
*The Group has an option to extend this loan for a further two
years.
Secured bank loans
Bank loans are secured by way of legal charges on properties
held by the Group and a hedging policy is adopted which is aligned
with the property strategy on each of its assets.
Facility and arrangement fees
30 Sep 2011 30 Sep 2010 31 Mar 2011
-------------- -------------------------------- --------------------------------- ---------------------------------
Facilities Fees Balance Facilities Fees Balance Facilities Fees Balance
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ----------- -------- --------- ----------- --------- --------- ----------- --------- ---------
Santander 30,371 211 30,160 19,771 152 19,619 26,159 164 25,995
Clydesdale 33,069 475 32,594 - - - - - -
HSBC 34,580 288 34,292 - - - 34,580 323 34,257
-------------- ----------- -------- --------- ----------- --------- --------- ----------- --------- ---------
98,020 974 97,046 19,771 152 19,619 60,739 487 60,252
Convertibles 25,000 476 24,524 - - - 25,000 526 24,474
-------------- ----------- -------- --------- ----------- --------- --------- ----------- --------- ---------
123,020 1,450 121,570 19,771 152 19,619 85,739 1,013 84,726
-------------- ----------- -------- --------- ----------- --------- --------- ----------- --------- ---------
The Group recognised a mark to market fair value loss of
GBP1.32m (2010: GBP0.5m) on its interest rate swaps as at 31 March
2011. The fair value loss recognised for on Balance Sheet hedging
was GBP1.57m (2010: GBP0.5m).
All borrowings are due after more than one year.
Convertible Unsecured Loan Stock ("CULS")
On 22 November 2011 the Group issued GBP25m of CULS where the
stock holder may convert all or any of the stock into ordinary
shares at the rate of 1 ordinary share for every GBP2.80 nominal
value of CULS held (adjusted for special dividends). It will either
be converted or repaid. The interest payable on the CULS is due
biannually on the 30 June and 31 December.
Management was required to make estimates with the assistance of
external experts to conclude on the valuation of the CULS at the
date of issue. The issuance of the compound instrument was between
two knowledgeable parties at arms length and at a market rate of
5.85% pa for 5 years. Management have concluded that the value of
the convertible option was negligible and the value resided in the
debt portion of the instrument at the date of issue.
12 Cash flow note
30 Sep 30 Sep 31 March
2011 GBP'000 2010 GBP'000 2011 GBP'000
---------------------------------------------------------------- --------------- --------------- --------------
Profit before tax 2,844 1,945 4,912
Adjustments for:
Income from joint ventures not received - (606) -
Profit on sale of investment properties (45) - -
Rent free amortisation (156) - -
Net gain on revaluation of investment properties (1,393) (1,470) (3,574)
Net gain on revaluation of joint venture investment properties - 12 (545)
Depreciation of property, plant and equipment and goodwill - 1 (1)
Share based payments expense 16 18 37
---------------------------------------------------------------- --------------- --------------- --------------
Operating cash flows before movements in working capital 1,266 (100) 829
---------------------------------------------------------------- --------------- --------------- --------------
Increase in receivables (1,417) (845) (1,412)
Increase in payables 3,266 300 3,379
---------------------------------------------------------------- --------------- --------------- --------------
Net cash inflow/(outflow) from operating activities 3,115 (645) 2,796
---------------------------------------------------------------- --------------- --------------- --------------
13 Share capital and reserves
Retained Other Share Hedging Revaluation
Earnings Reserves Premium Reserve Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------- ---------- ---------- ---------- --------- ------------
As at 31 March 2010 846 - 24,031 (46) 1,269
------------------------------------------- ---------- ---------- ---------- --------- ------------
Net proceeds of issue of new shares - - 9,795 - -
Total comprehensive income for the period 1,650 - - (470) -
Revaluation surplus for the period (1,470) - - - 1,470
------------------------------------------- ---------- ---------- ---------- --------- ------------
As at 30 September 2010 1,026 - 33,826 (516) 2,739
------------------------------------------- ---------- ---------- ---------- --------- ------------
Retained Other Share Hedging Revaluation
Earnings Reserves Premium Reserve Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------- ---------- ---------- ---------- --------- ------------
As at 31 March 2010 846 - 24,031 (46) 1,269
------------------------------------------- ---------- ---------- ---------- --------- ------------
Transfer of share premium - 24,031 (24,031) - -
Net proceeds of issue from new shares - 9,770 - - -
Total comprehensive income for the year 3,188 - - (204) -
Dividend payments (142) - - - -
Revaluation surplus for the year (3,574) - - - 3,574
------------------------------------------- ---------- ---------- ---------- --------- ------------
As at 31 March 2011 318 33,801 - (250) 4,843
------------------------------------------- ---------- ---------- ---------- --------- ------------
Net proceeds of issue from new shares - - 40,345 - -
Total comprehensive income for the period 2,844 - - (1,323) -
Dividend payments (640) - - - -
Unamortised tenant incentives - - - - (151)
Revaluation surplus for the period (1,393) - - - 1,393
------------------------------------------- ---------- ---------- ---------- --------- ------------
As at 30 September 2011 1,129 33,801 40,345 (1,573) 6,085
------------------------------------------- ---------- ---------- ---------- --------- ------------
In August 2011, 16.9m (2010: 4.2m) nil par value ordinary shares
were issued for cash consideration at a price of GBP2.52 (2010:
GBP2.50) resulting in an increase of the total share premium to
GBP40m (2010: GBP10m). Costs of GBP2.2m (2010: GBP0.7m) directly
attributable to the issue of these shares have been set against the
share premium.
As at 30 September 2011, the total number of shares outstanding
was 31,079,508 (2010: 14,214,508). No treasury shares were issued
during the period (2010: nil). There are currently 624,000
outstanding treasury 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 GBP2.37 following the share
issue in August 2011. There are currently 796,544 (2010: 439,560)
warrants outstanding.
14 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 1 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
30 Sep 30 Sep 31 March
2011 No 2010 No 2011 No
of options of options of options
--------------------------------------------------- ------------ ------------ ------------
Awards brought forward 886,949 660,200 660,200
Awards made during the period/year 2,065,163 193,836 226,749
--------------------------------------------------- ------------ ------------ ------------
Exercisable options at the end of the period/year 2,952,112 854,036 886,949
--------------------------------------------------- ------------ ------------ ------------
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
30 Sep 30 Sep 31 March
2011 GBP'000 2010 GBP'000 2011 GBP'000
------------------------------------------------ -------------- -------------- --------------
Share based payment expense brought forward 62 25 25
Share based payment expense in the period/year 16 18 37
------------------------------------------------ -------------- -------------- --------------
Cumulative share based payment 78 43 62
------------------------------------------------ -------------- -------------- --------------
15 Post balance sheet events
On 9 November 2011, the Group purchased a property for a
purchase price of GBP5m at a net initial yield of 9.7%. On 11
November, the Group purchased a property for a purchase price of
GBP1.32m at a net initial yield of 10.1%.
On 28 November 2011, the Board of Directors approved an interim
dividend of 6p per share, payable on 23 December 2011 to ordinary
shareholders on the register at the close of business on 9 December
2011.
The dividend will be paid entirely as a PID (Property Income
Distribution). PID dividends are paid, as required by REIT
legislation, after deduction of withholding tax at the basic rate
of income tax (currently 20%). However, certain classes of
shareholder may be able to claim exemption from deduction of
withholding tax.
16 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.
Total emoluments of Executive Directors during the period
(excluding share-based payments) was GBP1.0m (2010: GBP0.3m).
The following Directors held shares in the Company during the
period:
Number of shares
---------------- -----------------
David Lockhart 1,610,000
Allan Lockhart 140,000
Nick Sewell 100,000
Mark Davies 10,000
Paul Roy 360,000
Susie Farnon 25,000
Peter Tom CBE 40,000
---------------- -----------------
Share based payments of GBP0.02m (2010: GBP0.02m) accrued during
the period.
During the period 34,000 shares (2010: 205,000) were issued to
Directors.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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