NewRiver Retail Limited Final Results -14-
15 Maggio 2014 - 8:01AM
UK Regulatory
Determining whether investments 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.
vi Property disposals
The Company has elected for REIT status. To continue to benefit
from this regime, the Group is required to comply with certain
conditions as defined in the REIT legislation. In particular,
Management are required to determine whether each property
acquisition should be included within the REIT rental property
income business and whether on disposal of that property, any gain
arising is capital or trading in nature, and therefore whether it
has triggered a tax charge to be payable to HMRC. If HMRC were to
challenge the tax treatment on the disposal of a property,
particularly for properties for which redevelopment works have
occurred and disposal is within a three year period since
acquisition, and consider this to be trading in nature, this may
give rise to a tax charge. The Group has determined that all
property acquisitions during the year, including those within joint
ventures should be included within the REIT ring-fence and
therefore has not recognised any deferred tax on the revaluation
movements since acquisition, and that all property disposals during
the year generated a taxable loss. The Group has unrecognised tax
losses carried forwards of GBP1 million at 31 March 2014 as
detailed in note 8.
2 Segmental reporting
During the year the Group operated in one business segment,
being property investment in the UK and as such no further
information is provided.
3 Gross property income
2014 2013
GBP'000 GBP'000
=================================== ======== ========
Rental and related income 16,046 16,308
Asset management fees 1,699 653
Surrender premiums and commissions 452 1,017
=================================== ======== ========
Gross property income 18,197 17,978
=================================== ======== ========
4 Property operating expenses
2014 2013
GBP'000 GBP'000
==================================================== ======== ========
Amortisation of tenant incentives and letting costs 465 402
Ground rent payments 717 733
Rates on vacant units 402 482
Other property operating expenses 703 700
==================================================== ======== ========
Property operating expenses 2,287 2,317
==================================================== ======== ========
Service charge income 2,830 2,602
Service charge expense (3,926) (3,876)
---------------------------------- ------- -------
Net service charge expense 1,096 1,274
Total property operating expenses 3,383 3,591
================================== ======= =======
5 Administrative expenses
2014 2013
GBP'000 GBP'000
========================================================== ======== ========
Group staff costs 4,270 2,943
Depreciation 60 53
Share option expense 193 73
Administration and other operating expenditure 1,897 1,728
========================================================== ======== ========
Administrative expenses 6,420 4,797
========================================================== ======== ========
Asset management fees (1,699) (653)
========================================================== ======== ========
Net administrative expenses 4,721 4,144
========================================================== ======== ========
Net administrative expenses as a % of gross rental income
(inc share of joint ventures) 22% 24%
========================================================== ======== ========
2014 2013
GBP'000 GBP'000
=============================================================== ======== ========
Auditor's remuneration
Fees payable to the Company's auditor for the year end
audit 147 118
Fees payable to the Company's auditor for the interim
review 25 25
=============================================================== ======== ========
Total audit fees 172 143
=============================================================== ======== ========
Fees payable to the Company's auditor for reporting accountant
services - 23
=============================================================== ======== ========
Total non-audit fees - 23
=============================================================== ======== ========
Total 172 166
=============================================================== ======== ========
2014 2013
Number Number
=============================================================== ======== ========
Average staff numbers including Directors 27 19
=============================================================== ======== ========
6 Profit on disposal of investment properties
2014 2013
GBP'000 GBP'000
======================== ======== ========
Gross disposal proceeds 7,990 850
Costs of disposal (120) (39)
======================== ======== ========
Net disposal proceeds 7,870 811
Carrying value (5,838) - *
======================== ======== ========
Profit on disposal 2,032 811
======================== ======== ========
* There was no carrying value associated with the sale of
Gilmour House in the prior year as it was vacant and of nil value
when acquired as part of the investment property at Paisley.
7 Finance income and expense
2014 2013
GBP'000 GBP'000
========================================= ======== ========
(a) Finance income
Income from cash and short-term deposits 105 10
========================================= ======== ========
Total finance income 105 10
========================================= ======== ========
(b) Finance costs
Interest on bank loans 4,057 4,645
Interest on debt instruments 1,451 1,575
========================================= ======== ========
Total finance costs 5,508 6,220
========================================= ======== ========
Net finance cost 5,403 6,210
========================================= ======== ========
Interest on debt instruments relates to the Convertible
Unsecured Loan Stock.
More details on the Group's borrowings are provided in Note
19.
8 Taxation
The tax expense for the year comprises:
2014 2013
GBP'000 GBP'000
====================================== ======== ========
Current taxation
UK Corporation Tax at 22% (2013: 24%) 11 (88)
====================================== ======== ========
Tax charge/(credit) for the year 11 (88)
====================================== ======== ========
The charge for the year can be reconciled to the profit per the
consolidated income statement as follows:
2014 2013
GBP'000 GBP'000
=========================================== ======== ========
Profit before tax 23,059 1,410
Tax at the current rate of 22% (2013: 24%) 5,073 338
Reversal of prior year tax over provision - (120)
Tax effect of profit under REIT regime (5,062) (306)
=========================================== ======== ========
Tax charge/(credit) 11 (88)
=========================================== ======== ========
At the time of the Company's REIT conversion on 22 November 2010
a provision of GBP1.6 million (representing a 2% charge on the
assets taken into the regime) was made for the REIT conversion
charge which the Company has chosen to pay over 4 years (which
carries as 0.19% charge). The instalments are payable annually
between June 2011 and July 2014.
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