TIDMTOWN
RNS Number : 2179U
Town Centre Securities PLC
01 December 2021
1 December 2021
TOWN CENTRE SECURITIES PLC
('TCS' or the 'Company')
Correction announcement
Further to the Company's final results announcement for the year
ended 30 June 2021, released at 7.00am on 30 November 2021, the
announcement erroneously stated in note 5 that:
A final dividend in respect of the year ended 30 June 2021 of
1.75p per share is proposed. This dividend, based on the shares in
issue at 23 November 2021, amounts to GBP0.9m which has not been
reflected in these accounts and will be paid on 21 January 2022 to
shareholders on the register on 30December 2021. The entire
dividend will be paid as an ordinary dividend.
It should have stated that:
A final dividend in respect of the year ended 30 June 2021 of
1.75p per share is proposed. This dividend, based on the shares in
issue at 23 November 2021, amounts to GBP0.9m which has not been
reflected in these accounts and will be paid on 21 January 2022 to
shareholders on the register on 31 December 2021. The entire
dividend will be paid as an ordinary dividend.
In addition, the second paragraph of the portfolio review -
valuation summary section erroneously included the following
reference:
This is set out in the table on page *, which includes a
reconciliation to the amounts disclosed in Note 12 to the financial
statements.
This relates to the specific note in full Annual Report of the
Company, as opposed to this announcement and should not have been
included. It has been removed for the corrected announcement.
All other details from the results are unchanged.
The full amended text is shown below.
TOWN CENTRE SECURITIES PLC
('TCS' or the 'Company')
Final results for the year ended 30 June 2021
Further progress in resetting and reinvigorating the
business
Town Centre Securities PLC, the Leeds, Manchester, Scotland, and
London property investment, development and car parking company,
today announces its audited final results for the year ended 30
June 2021.
Commenting on the results, Chairman and Chief Executive Edward
Ziff, said:
"It has been a challenging year, however I am pleased to see the
business recovering since pandemic related restrictions have been
eased. We have benefited from the decisions taken earlier in the
year to accelerate our disposal programme and reduce our net
borrowings. As a result, the Company is in a stronger financial
position to benefit from the ongoing economic recovery."
"I am pleased that our rent collection has remained robust
throughout the year. This demonstrates the resilience, quality and
diversified nature of our continuing portfolio as well as our
collaborative, longstanding and strong relationships with our
tenants. With people steadily returning to offices and normal life
resuming, we are seeing improvements in both our car park and hotel
operations."
"Overall, we remain committed to delivering on our accelerated
four pillar strategy of: actively managing our assets, maximising
available capital, investing in our development pipeline and
acquiring and improving investment assets to diversify our
portfolio."
Financial performance
-- Net assets:
o Statutory net assets of GBP155.4m or 292p per share up 0.2% on
prior year (2020: GBP155.1m, 292p)
o EPRA net tangible assets* measure introduced during the year
at GBP151.0m or 284p per share (2020 equivalents: GBP151.1m or
284p)
o Revaluation increase and reversal of impairment uplifts on
property portfolio, car parks and TCS share of properties held in
Joint Ventures in the year of GBP1.4m (2020: Reduction of
GBP26.0m)
o Revaluation gain on other investments during the year of
GBP2.8m (2020: Reduction of GBP2.4m)
-- Profits and earnings per share:
o Significantly reduced statutory loss before tax of GBP0.6m
(2020: loss of GBP24.1m) and statutory loss per share of 1.1p
(2020: loss of 45.4p), including total estimated negative impact of
COVID-19 on the results for the year of GBP6.2m
o EPRA earnings*, profit of GBP0.3m (2020: profit of
GBP1.7m)
o EPRA earnings per share* of 0.6p (2020: 3.1p)
-- Financing:
o Headroom of over GBP12.1m at year end based on June 2021
borrowings and valuations. This stands at GBP12.1m as at 18
November 2021
o Nine properties were sold during the year, generating
aggregate proceeds of GBP48.0m
o Net debt (excluding finance leases liabilities) reduced by 21%
to GBP145.6m (FY20: GBP183.6m), with LTV reducing to 51.3% (FY20:
56.0%) - note LTV calculation includes finance lease assets and
liabilities
-- Dividends:
o Final dividend of 1.75p proposed, following interim dividend
of 1.75p paid at the half-year
o Total dividend for the year of 3.5p (2020: 5p)
Prior year comparatives have been restated to reflect six
adjustments, full details of which are set out in Note 26 to the
financial statements. The three key adjustments are as follows:
o Reclassification of two of the Group's Multi Storey Car Parks
('MSCPs') from freehold investment properties to freehold
properties within car park activities
o Application of a single accounting policy to all types of
leasehold car park properties, whether long term, short term or
right of use asset
o Reclassification of the Group's investment in a listed entity
from current to non-current asset investments
* Alternative performance measures are detailed, defined and
reconciled within Notes 4 and 10 of this announcement
COVID-19 impact, response and recovery
Impact
-- Estimated GBP6.2m impact on income from COVID-19 in the year, driven by:
o GBP1.0m impact in the property business, primarily bad
debt
o GBP4.5m CitiPark impact due to lost car parking income during
the nationwide lockdowns
o GBP0.7m ibis Styles hotel impact due to lockdowns and hotel
closure
Response
-- Temporary closure of car parks to minimise overhead costs,
furloughing CitiPark operational branch staff and some head office
staff, and TCS board took a 20% salary and fee reduction
-- Our long history of engagement with tenants has ensured good outcomes achieved in most cases
Recovery
-- The revaluation gains on our office and development portfolio
ensured a net revaluation increase over the entire portfolio,
despite further reductions in retail and leisure assets
-- Rent receipts remain strong; as at 18 November 2021 of the
GBP41.4m rent, service charge and VAT billed since March 2020,
GBP38.3m or 92.6% has been paid, with a further GBP0.4m or 0.8%
agreed to be deferred, totalling 93.4%
-- Of the remaining GBP2.7m, GBP2.1m has been waived, mostly in
return for improvements in the terms of length of leases. On the
remaining GBP0.6m no agreement has yet been reached
Resetting and reinvigorating the business for the future
We are now seeing a broadening recovery across all segments of
our business. As stated this time last year, the Board has focused
on resetting and reinvigorating the business, in particular
accelerating the disposal and debt reduction programme. Progress
against the strategy is detailed below:
Actively managing our assets
Our long-standing strategy of active management and
redevelopment, to drive income and capital growth, has
continued:
-- The proportion of retail and leisure assets in the portfolio
has reduced to 29% from 40% in June 2020, and down from 60% in
2016. Pure retail now represents only 21% of the total portfolio
and of that, 52% is in the resilient Merrion Estate
-- The capital values of both 123 Albion Street and Ducie House
have increased, reflecting the completion of their respective
refurbishments
-- Whilst we saw six tenants either entering administration or
CVAs (no exposure to any high-profile retail failures), the
exposure is modest, representing circa 4% of income. We remain
confident in maintaining occupation in the majority of these
units
Maximising available capital
A conservative capital structure, with a mix of short and
long-term secure financing, has always underpinned our
approach:
-- GBP40m of disposal proceeds were used to part repay Group borrowings
-- Bought back for cancellation of GBP6.5m of our GBP106m 2031 5.375% debenture
-- Since the year end we have refinanced our NatWest facility,
which now expires in August 2024 and extended our Lloyds facility
by two further years out to June 2023
Investing in our development pipeline
Our development pipeline, with an estimated GDV of over GBP600m,
is a valuable and strategic point of difference for TCS which we
continue to progress and improve. Notably, in the past year:
-- We completed the works to implement the planning consent for
our next PRS development, Eider House, in Manchester's Piccadilly
Basin
Acquiring and improving investment assets to diversify our
portfolio
We continue to improve investment assets, and will consider new
acquisition opportunities that offer the opportunity for both
diversification and growth:
-- Completed the GBP4m redevelopment of the office space at 123
Albion Street, Leeds and secured leases with StepChange Debt
Charity and the Instant office Group for all the remaining vacant
space
-- Potential valuable opportunity to redevelop and modernise our
Wade House office (having been vacated by StepChange Debt Charity),
the third of our four Merrion Estate offices
Current trading - strong first half performance expected
-- Strong rent receipts in the first quarter ended 30 September 2021
-- Recoveries in both the car park and hotel operations as the economy has reopened
-- Further disposals agreed and being marketed
-Ends-
For further information, please contact:
Town Centre Securities PLC www.tcs-plc.co.uk / @TCS PLC
Edward Ziff, Chairman and Chief Executive 0113 222 1234
Stewart MacNeill, Group Finance Director
MHP Communications 020 3128 8572
Reg Hoare / Alistair de Kare-Silver / Florence Mayo
tcs@mhpc.com
Chairman and Chief Executive's Statement
Overview
As we take steps towards returning to normal life, although
COVID-19 has indeed taken a considerable toll, I am pleased to see
our business recovering well. We have used the year wisely, driving
forward on our key strategic priorities to ensure we are in the
best possible shape to bounce back. This includes reducing our
debt, completing refurbishment projects and continuing to reduce
the proportion of retail and leisure assets in our portfolio
through a substantial disposal programme.
As COVID challenges continued, our focus has been on preserving
cash and supporting our tenants, employees and communities. This
challenge has reinforced the importance of a committed and
resilient team. I would like to thank each and every one of them
for their hard work and dedication in this difficult year. Support
from our shareholders and lenders has also been very encouraging
and greatly appreciated.
Despite the impact of COVID-19, the completion of two major
refurbishments during the pandemic is testament to the strength and
culture of our organisation and our commitment to building city
centre environments fit for the future.
Performance
The significant impact of COVID on our revenues and profits is
clear, resulting in earnings taking an estimated GBP6.2m hit during
the year, GBP3.2m in the first half and GBP3.0m in the second half.
I am confident that the gradual easing of lockdown measures will
lead to a stronger first half in the current financial year.
EPRA earnings per share* are 0.6p for the year (2020: 3.1p),
which compares to pre-COVID levels of 12p in FY19. EPRA net assets
per share* are 292p and remains unchanged from the 292p at the
previous year end, the small increase highlighting the resilience
of our investment portfolio over what was a turbulent year.
The focus on accelerating key strategic initiatives means net
borrowing (excluding finance lease liabilities) is down by GBP38.0m
to GBP145.6m(2020: GBP183.6m) and loan to value is down to 51.3%
(2020: 56.0%) following a proactive programme of disposals
generating gross proceeds of GBP48.0m. This has contributed to a
reduction in the proportion of retail and leisure assets in our
portfolio to 29% from 40% in FY20.
Rent receipts over the entire COVID-19 period remain robust with
93.4% either paid or agreed to be deferred, reflecting our long
history of engagement with our tenants and the hard work of our
team to generate equitable solutions with the majority of our
retailers, albeit with some notable exceptions. We were again
disappointed to see the government's lack of support for landlords
continuing with an extension of the government's rent moratorium
until March 2022.
Whilst we were fortunate to avoid any significant exposure to
retail store failures, we did see six tenants either entering
administration or CVAs. Our broad portfolio of tenants ensured our
exposure was modest representing only 4% of income and we are in
active discussions on re-letting all of this space.
Restatement of prior year figures
Prior year comparatives have been restated to reflect six
adjustments, full details of which are set out in Note 11 to this
announcement. The three key adjustments are as follows:
o Reclassification of two of the Group's Multi Storey Car Parks
('MSCPs') from freehold investment properties to freehold
properties within car park activities
o Application of a single accounting policy to all types of
leasehold car park properties, whether long term, short term or
right of use asset
o Reclassification of the Group's investment in a listed entity
from current to non-current asset investments
* Alternative performance measures are detailed, defined and
reconciled within Notes 4 and 10 of this announcement
Key achievements
Even in these challenging times, I have felt it is increasingly
important to look forward to the future and reinvigorate our
business to maintain momentum.
Leeds
The completion of the refurbishment of 123 Albion Street, Leeds
represents a significant milestone in the year, creating a valuable
asset which has already become the home of the StepChange Debt
Charity, an existing tenant. It is particularly pleasing to report
that, following the Instant Office Group letting, the whole of the
building is now let, illustrating the strength of the development.
This has in turn created a redevelopment opportunity in Wade House,
Merrion Centre, their previous location.
This places us firmly at the heart of an exciting plan to
transform Leeds City Centre, with investment in a leading-edge
Innovation District including the building of purpose built
accommodation for over 3,500 students around Merrion, which will
drive footfall and create a vibrant, active community.
Manchester
The refurbishment of Ducie House, our multi-tenant office
building in Manchester is now complete. We are pleased to welcome
both existing and new tenants to the building.
We are also at the heart of one of Manchester's historic
districts - Piccadilly Basin. We operate a large prime site, Urban
Exchange, which is let to Aldi, M&S, Pure Gym and Go Outdoors.
Go Outdoors was put into administration by its owners in 2020.
Since that point, we have been receiving full rent from the
administrator and are in active discussions regarding the future of
the store.
We have an exciting development pipeline in this vibrant area of
Manchester, including an implementable planning consent for Eider
House, our second Build to Rent (BTR) development, which follows on
from the successful completion of Burlington House in September
2019.
CitiPark
Our car parking business has been hit very hard by COVID-19. As
a business it is dependent on commuter, retail and leisure parking
so each lockdown has had a material impact on revenue. We are
clearly not operating in a level playing field when retailers can
take advantage of rent and business rates holiday, whereas we are
expected to pay these in full. I find it hard to see why a business
like car parking, which is so closely related to retail, has been
completely ignored. The most we have been able to do is temporarily
close branches or sections of branches to claim small reductions in
business rates. As at the end of June 2021 we have opened all our
car parks and we are seeing a recovery now similar to that
experienced in the summer of 2020 with our portfolio of car parks
operating at over 2/3(rds) of normal capacity.
As one of the most innovative parts of our business, through the
creation of CitiCharge, we are already providing electric vehicle
(EV) charging points in our branches, as part of the refurbishment
of 123 Albion Street and winning contracts to provide EV chargers
to external organisations.
Our investment in Yourparkingspace, an online parking
marketplace, has continued to strengthen as this exciting business
attracts new investors and embarks on the next phase of its rapid
growth.
We also see a great opportunity to use technology to develop a
professional and fair parking enforcement business as we add
further contracts to BaySentry Solutions, including the acquisition
of KBT Cornwall Ltd at the end of the year.
Stakeholder engagement
Tenants
Our staff have worked tirelessly to negotiate agreements with
our tenants and ensure that we fill any vacant space as quickly as
possible. Whilst many of our smaller tenants have worked
collaboratively with us to meet their obligations, in contrast some
of our larger tenants have made this difficult. For example, when
Go Outdoors was put into administration and then bought back in a
pre-pack deal by owner JD Sports, it left its landlords including
Town Centre Securities (TCS) to shoulder the losses. JD Sports
acquired Go Outdoors in 2017 and I presume were properly advised of
the obligations they took on at that time. I find it outrageous and
appalling that a company the size of JD Sports is allowed to walk
away freely from its legal obligations, incurring only minor
penalties and doing so without any reputational damage whatsoever.
It is a sad indictment that profit is now regarded more importantly
than moral and legal obligations. Bonuses for the JD Sports
Directors this year seem inappropriate to say the least.
Employees
Our employees have demonstrated their adaptability and
flexibility whether transitioning to working from home or taking
periods of furlough. We topped up salaries to 100% and continued
open, regular communication with all employees to maintain morale
and engagement. Some Head Office staff were furloughed but all have
returned to work - many to our Merrion office working in COVID-safe
conditions.
Board
In February 2021, we said goodbye to our Group Finance Director,
Mark Dilley. Mark was invaluable during a period of significant
change for TCS, both in his careful management of our financial
position, and his valuable insight into our future direction. I am
particularly grateful for his support and hard work during the
extremely challenging past time and we wish him and his family well
for the future.
On the 1(st) June 2021, we welcomed Stewart MacNeill to the
Board as our new Group Finance Director after an interim period.
His experience and knowledge have already made him a good addition
to the TCS team and we are delighted he has joined us on permanent
basis.
Shareholders
Shareholder support has been important during this difficult
period. We will always follow the regulatory requirements to ensure
shareholders are suitably informed. On 17 June 2021 we commenced a
share buy-back programme and we acquired for cancellation 214,713
shares in the capital of the Company, for a total consideration
(incl SDRT and costs) of GBP304,940. If prices allow us, we intend
to use this authority again in the coming year.
Whilst we were pleased to declare a dividend at the half year, I
am truly sorry that we are not able to announce dividends that
return to pre-COVID levels. We need shareholders to remain patient
as we secure the business for the long term. The Board has approved
a final dividend of 1.75p, totalling 3.5p for the full year - a
step in the right direction.
ESG and communities
We have a five-part approach to ESG: minimising our
environmental impact; engaging with external stakeholders; having
engaged and committed employees; making a positive contribution to
our local communities and always behaving properly. We are
committed to delivering environmentally friendly buildings that
meet the needs of our occupiers and make a positive contribution to
the communities they operate in.
Giving back to our local communities has always been an
essential part of the way we operate, right from the moment the
Marjorie and Arnold Ziff Charitable Foundation was set up in 1960.
Offering free parking and concessionary hotel accommodation to NHS
staff is a continuation of that long-held tradition, along with
support for our retail partner initiatives during the year and our
ongoing support for young people.
Outlook
Whilst our diversified portfolio, strong development pipeline
and strong financial position gives me optimism for the future, I
would like to reinforce the point that our city centres need people
and footfall so they can return to the vibrant, busy spaces our
communities thrive on. The government, local authorities, local
employers and large organisations all have a responsibility to
encourage their staff to return to their place of work to fill our
public transport, our shops, restaurants and coffee shops and
encourage the collaboration and innovation that fuels our growth
and builds our future.
We remain committed to our strategy and will continue to
actively manage our assets, sell certain retail assets to maximise
our available capital, invest in our development pipeline and
acquire assets to improve our portfolio. COVID-19 of course remains
the big risk as any further lockdowns would create further damage,
and the need for the Government to communicate its plans clearly in
advance is crucial.
I am confident that our focus on the two growing and exciting
cities of Leeds and Manchester, where we are helping to create a
sense of place and purpose for living and working, will enable us
to generate value for all our stakeholders as the world returns to
normality.
Portfolio review
Valuation summary
TCS saw the like-for-like value of its portfolio increase by
0.3% (GBP1m) after modest capex of GBP2.2m in the year. This has
reversed the GBP2.6m like-for-like reduction in value recorded in
the six months to 31 December 2020. This recovery bears testament
to the diversified portfolio of the Company and the continuing
strategy of reducing our exposure to retail and leisure assets.
For the year to the 30(th) June 2021 the total portfolio,
including development assets, our share of properties held in joint
ventures and car parking assets, declined in value from GBP372.5m
to GBP329.2m. However after adjusting for a net movement of
GBP44.2m of capex, sales and purchases the underlying uplift in
value of the portfolio was GBP1m. This represents an increase of
0.3% year on year.
Our development assets increased in value by 9.7%, whilst our
Office portfolio increased by 6.1%, on a like for like basis. The
combination of these outweighed an 8.7% revaluation decrease in our
retail and leisure portfolio. Our retail and leisure investments
outside of the Merrion Centre, primarily in Scotland, fared the
worst, with a 17.4% like-for-like revaluation deficit in the
year.
Our main and most complex asset, the Merrion Estate saw a 2.0%
decline (after capex) in value year on year from GBP148.0m to
GBP145.0m. More than a shopping centre, from initial inception, a
true mixed-use asset, this comprises offices including our share of
Merrion House, retail space, a hotel and a multi-storey car park.
The initial yield across the whole Merrion Estate of 6.9% signifies
a robust performance against others in the sector where retail
assets, particularly shopping centres have continued to fall.
The valuation of all of our properties (except one) are carried
out by CBRE and Jones Lang LaSalle. Both companies have removed the
'material valuation uncertainty' clause, as set out in the RICS
Valuation Global Standards, which was included last year at the
time of peak COVID-19 uncertainty.
Sales and Purchases
The COVID-19 crisis prompted the Board to accelerate the retail
and leisure disposal programme. During the financial year ended 30
June 2021 we have sold nine properties for gross proceeds of
GBP48.0m.
Our continued commitment to asset recycling is clear. The table
details the GBP96.9m of disposals since FY17 of which 93% were
retail and leisure assets.
GBPm Sales Purchases
================== =========== ================= ===========
% Retail & % Retail &
leisure leisure
FY17 22.3 88% 4.0 46%
FY18 10.1 95% 9.0 0%
FY19 14.0 100% 16.0 25%
FY20 2.5 100% 1.7 100%
FY21 48.0 93% 0.0
Total 96.9 93% 30.6 24%
Retail and leisure
The global pandemic has presented many challenges to the UK
retail market during the last 18 months. Structural shifts in
consumer behaviour and the move to multi-channel retailing have
been accelerated by the pandemic.
However, as we move into the second half of 2021, the reopening
phases throughout Q2 2021, the widespread vaccination programme and
pent-up demand have triggered significant improvement to consumer
sentiment.
Online sales accounted for 26.1% of total UK retail sales in
June 2021. This is notably below the peak of 36.3%, recorded in
January 2021. Although hospitality and leisure spend is reported as
being subdued, within our own portfolio, there is increasing
evidence of a rapid return to pre-pandemic levels.
Retail Parks continue to outperform with footfall down 4.1% on
average in June (Source: Springboard) whilst Shopping Centre and
High Street locations recorded 27.2% and 29.1% reductions
respectively.
Changes to Government support packages including the changes to
furlough, the extension of the eviction moratorium to March 2022
and changes to the rates support will all be relevant factors going
forwards as operators consider their particular market headwinds.
There are high levels of retail vacancy across the UK, however,
Savills are reporting a slight softening in retail rental
decline.
Shopping Centre yields have risen by 75 bps over the last year.
There is evidence of this trend having turned a corner and in the
first half of 2021, GBP594m was invested in the UK Shopping Centre
Market. This compares with GBP343m in the whole of 2020. TCS's
principal mixed-use scheme, The Merrion Estate, anchored by
Morrisons (the only full-line supermarket in Leeds City Centre) is
well placed to benefit from the interest of risk-averse investors
preferring the food store anchored schemes. The retail sector is
increasingly offering value for the opportunistic investor.
Unlike the Shopping Centre sector, High Street retail investment
in 2021 is on a par with 2020, with cGBP1.1bn of investment
turnover for the first half of 2021. Institutional investors are
increasingly turning away from this sector. However there are still
opportunities on the High Street, especially in the essential
retail category that will attract the risk-adverse investor.
Investor demand for food stores remains strong with the downward
pressure on prime yields. In the meantime, active landlords such as
TCS are continuing to build flexibility into their retail
portfolios through active asset management, planning consents and
innovative terms.
From a TCS perspective, total retail and leisure assets fell by
GBP9.0m or 8.7%. Merrion excluding offices and the MSCP delivered
an Initial Yield of 7.7% reflecting the skew in tenant mix to
supermarket and value retailers. Merrion's value fell by GBP3.8m or
6.3%. TCS's out of town retail had an initial yield of 7.9%
representing its mix of food and value retailers, with value
falling GBP0.3m or 2.0%. Other retail and leisure assets fell by
GBP4.9m or 17.4%, with these more traditional standalone retail
units being most significantly impacted.
Our hotels, while both open for key workers during the start of
COVID-19, were then closed from the start of January 2021 to April
2021, but with a quick recovery values have rebounded slightly with
an increase of GBP0.6m or 2.4%. The success of the 'staycation' has
clearly had an effect and we are continuing to see increased
booking volumes in the months after June 2021.
Regional offices
Office investment volumes reached GBP1.07 billion outside of
central London in Q1 2021, which was a 25% decrease in volumes
recorded in Q1 2020 and a 32% decrease in the long-term average.
(1)
Overseas investors were the most active investors across the
regional office investment market in Q1 2021. The investor type
accounted for 58% of investment which was the highest proportion
from the sector in the last 10 years. (1)
The regional office markets have remained quiet during the
period due to changing working from home restrictions imposed by
the pandemic and a general lack of any new stock coming to the
market. Investors are set to gauge sentiment when occupiers return
to buildings later this year in line with restrictions easing.
Take up in most of the major regional cities remains
significantly below the ten-year averages. Enquiry levels have
slowly started to increase with some of the larger requirements
gathering momentum as they establish what their longer-term
occupational requirements will be.
The prime regional office yield moved out by 25 basis points to
5.00% in April 2020 in response to investor caution arising from
the coronavirus pandemic and has remained at this level. (1) Office
sector capital values increased 0.2% in July, reflecting positive
growth outside Central London, while Central London values were
unchanged. Office rental values increased 0.2%. Office total
returns were 0.5% for the month. (2)
1) Savills UK Regional Office Investment Market Watch 8(th) June 2021.
2) CBRE UK Monthly Snapshot July 2021.
Our office portfolio increased in value by GBP5.0m or 6.1% over
the year, the majority of which was due to the completion of the
123 Albion Street refurbishment and the subsequent letting of all
of the vacant space. The value of TCS's share in Merrion House has
also increased by GBP1.1m reflecting both an improvement in the
yield but also an increase in the estimated rental value.
Residential
Residential property has been the surprise outperformer during
the pandemic, with fears of a repeat of 2008's housing market
collapse proving unwarranted. Investment levels into institutional
rented property have been sustained and are expected to hit new
records throughout the coming years. Fiscal support for the
owner-occupied market has maintained prices and transaction levels,
though the risk of rising unemployment could stall this is in the
coming months.
At the end of Q2 there were just over GBP2.1bn of Buy-to-Rent
transactions under offer. The pipeline again highlights strong
demand for regional markets, with two-thirds located outside of
London. There is currently close to GBP1.3bn under offer across
regional markets including Birmingham, Bristol, Cardiff, Glasgow,
Leeds, Manchester, Newcastle and Sheffield.
From a returns perspective, CBRE expect Residential to
outperform other real estate sectors over a five-year horizon.
According to the Office for National Statistics, rents across the
UK have remained stable between January and June 2021. However,
potential downside risks, including the ending of the furlough
scheme in September, mean they continue to forecast a marginal fall
in rents for the full year, but then expect a rebound in 2022. A
highly competitive market will underpin asset pricing and yields.
Overall, they are forecasting residential total returns to average
7.3% per year to 2025 and investment to continue on an upward trend
throughout a five-year horizon, with the expectation of GBP9.8bn
invested across the residential sector in 2021, rising to GBP15.7bn
by 2025.
TCS's residential assets are concentrated in the city centres of
Leeds, Manchester, suburban London and Glasgow. Overall, we saw an
increase in the value of our residential portfolio year on year of
3.5%. This was largely driven by a rebound in the Manchester
market, effectively reversing and improving on the negative impact
COVID-19 had on residential values at 30 June 2020 of -1.3% . Rents
are expected to return to a 3% per annum growth rate from 2022. As
mentioned last year our Piccadilly Basin site remains one of the
most centrally located and accessible sites in the city and as
such, we expect it to outperform the market in the long term.
Passing
rent ERV Value % of Valuation Initial Reversionary
GBPm GBPm GBPm portfolio incr/(decr) yield yield
Retail & Leisure 1.6 1.9 23.4 7% -17.4% 6.4% 7.9%
Merrion Centre
(ex offices) 4.6 4.9 56.7 17% -6.3% 7.7% 8.1%
Offices 4.5 6.2 91.4 28% 6.1% 4.7% 6.4%
Hotels 1.2 1.6 23.6 7% 2.4% 4.7% 6.5%
Out of town retail 1.2 1.2 14.5 4% -2.0% 7.9% 7.5%
Distribution 0.4 0.5 6.5 2% 7.7% 6.0% 6.8%
Residential 1.0 1.0 20.5 6% 3.5% 4.6% 4.6%
14.6 17.3 236.6 72% -1.0% 5.8% 6.9%
Development property 41.5 13% 9.7%
Car parks 51.2 16% -1.9%
Portfolio 329.2 100% 0.3%
Note: includes our share of Merrion House within Offices (GBP35.8m
- see Note 7 of this announcement), our share of Burlington House
within Residential (GBP11.3m - see Note 7 of this announcement)
and Car Park Goodwill of GBP4.0m arising on individual car park
assets, but specifically excluding goodwill arising from the current
year car park operation acquisitions. All of the above are not
included in the table set out in Note 6 of this announcement.
Note: excludes IFRS 16 adjustments that relate to Right-of-Use
car park assets (GBP27.8m) as the Directors do not believe it is
appropriate to include in this analysis assets where there is less
than 50 years remaining on their lease and the Group does not have
full control over these assets - These assets are included in the
table set out in Note 6 of this announcement.
The table below reconciles the above table to that set out in
Note 6 of this announcement:
FY21 FY20
GBPm GBPm
Portfolio as per Note 6 305.9 354.3
50% share in Merrion House 35.8 34.7
50% share in Burlington House 11.3 10.9
Goodwill - Car Parks - Property specific
only 4.0 4.0
Less - IFRS 16 right-of-use car parks (27.8) (29.7)
Less - addition recognised relating
to an asset held for sale - (1.7)
As per the above table 329.2 372.5
Location Value GBPm %
Leeds 222.4 68%
Manchester 71.9 22%
Scotland 11.4 3%
London 23.4 7%
----------- -----
329.2 100%
Sector Value GBPm %
Retail/leisure 94.6 29%
Hotels 23.6 7%
Office 91.4 28%
Car parking 51.2 16%
Distribution 6.5 2%
Residential 20.5 6%
Development 41.5 13%
----------- -----
329.2 100%
Lease Expiries Value GBPm %
0-5 years 6.8 46%
5-10 years 2.0 14%
Over 10 years 5.8 40%
----------- -----
14.6 100%
Divisional review - property
Overview
It has been an intense period for our dedicated team as they
manage our estate on a daily basis, securing income, extending
lease terms, and working closely with our tenants to support them
through the current challenges. Despite the immediate urgencies
created by COVID-19, we have also continued to focus on pursuing
new opportunities to help create places that attract people and
create communities.
Over the course of the year our like-for-like void percentage
has improved marginally from 5.6% to 5.3%, again representing the
resilience of our portfolio. In measuring voids we include premises
to let and also those in Solicitor's hands, but where an agreement
for lease has not yet been signed. In measuring voids we
specifically exclude premises that are temporarily unlet pending
redevelopment.
Our portfolio is largely focused in the vibrant Northern cities
of Leeds and Manchester, where we have resilient assets and a
high-quality pipeline of development opportunities.
Leeds
The last twelve months have demonstrated the resilience of our
portfolio in Leeds and the strength of the Merrion Estate which is
at the heart of the Arena Quarter and adjacent to the Innovation
District in the City. The Arena Quarter has been transformed in
recent years with the development of the First Direct Arena,
substantial investment by the two largest universities in Leeds, a
brand-new Head Office for Leeds City Council and over 8,000 new
residential and student residential units. These new developments
include the tallest building in Leeds - IQ Altus, which is under
construction and scheduled for completion later this year. The same
developer is preparing to invest further in this location,
underlying the industry's confidence in this area.
The Merrion Estate is a mixed-use scheme comprising
supermarkets, offices, retail, leisure, car parks and a hotel. Our
largest office occupier is Leeds City Council's Head Office
(170,000 sq ft) and our supermarket tenants include Iceland, Co-op
and the only full line City Centre supermarket in Leeds, Morrisons.
Merrion represents 44% of the value of the portfolio.
Asset management
Merrion Centre
The Merrion Estate has continued its diversification and
repurposing programme that began over 10 years ago. Merrion's
strategic location at the heart of the Arena Quarter, adjacent to
the Innovation District, is continuing to deliver new customer
sources for our Estate. Domino's Pizza, Co-op, Leeds Teaching
Hospitals Trust and 7 independent and regional tenants all opened
premises during the last year. It is particularly pleasing to see
existing tenants invest further in Merrion, such as the popular
Blue Sakura Restaurant taking their second restaurant premises at
Merrion and Morrisons' investment in their brand new 'Market
Kitchen' concept.
Our teams have worked extremely hard to ensure that our rent
collection rates have remained high, ending the year at over 93%
either collected or deferred. This is testament to the close
relationships we have built with tenants over the years and the
collaborative approach we have taken to build arrangements that
work for both parties.
Despite challenging footfall levels, many employees working from
home and lower student numbers, our retail and leisure portfolio
has proven resilient given the emphasis on essential retailing,
namely grocery, health, convenience and discount retailing.
Fortunately, we have had no exposure to any of the larger high
street retail failures such as Arcadia or Debenhams.
Since July 2020, just four Merrion Estate tenants have entered
into CVAs or administration: Deltic Group, Café Nero, Slam Trading
and Select. These four tenants, together with two non-Merrion
Estate tenants, are the only TCS tenants to enter
administration/CVA during the last financial year. The billable
rent for these represents circa 4% of property income.
Encouragingly, all but one of these tenants are capable of being
replaced via a new letting or proposed new assignment. We have
completed or renewed 11 leases in the financial year including
eight new retailers moving into the Merrion Centre - examples
include the Leeds Rhinos shop, Teisha's Hair and Beauty Salon, and
Youshi. It is also encouraging to note a further seven new lettings
or lease renewals have completed after the year end.
123 Albion Street
Acquired in 2018, we have now completed a net GBP4m
refurbishment of 123 Albion Street adjacent to the Leeds Innovation
district and the Merrion Estate. The newly refurbished building
comprises 21,000 sq ft of flexible commercial space on the ground
floor, with 56,000 sq ft of good quality office space over three
upper floors. In a collaboration with our CitiPark's division, the
refurbishment programme includes two CitiCharge EV chargers as well
as plenty of parking, cycle storage and electricity regeneration
lifts.
The whole building has already been let, illustrating the
strength of the location. The ground floor will
now trade as a 'Job Centre Plus' focused on coaching people out
of work due to COVID-19 and in
December 2020 we agreed a new 12-year lease for the remaining
46,000 sq ft to StepChange Debt Charity. StepChange is the UK's
leading debt charity offering free expert advice to individuals
enabling them to tackle and manage their debts. This letting at 123
Albion Street involves the charity moving out of our Wade House
office (on the Merrion Estate) into this newly refurbished
building. StepChange has been a valuable Town Centre Securities
tenant for almost 20 years and the business has now reached a stage
where larger floorplate offices were required to take the business
forward. It is pleasing, both for TCS and for the wider City of
Leeds, that we have been able to satisfy StepChange's new office
requirement, enabling them to continue their important and valuable
work.
123 Albion Street was valued at GBP12.1m twelve months ago and
has increased to in excess of GBP20m, following the renovation and
successful letting programme.
The completion of 123 Albion Streets' refurbishment now presents
us with an opportunity to redevelop or refurbish Wade House, on the
back of the new demand for the area. Wade House represents the last
of the four main office buildings that form part of the Merrion
Estate, this being one that is now in need of investment, following
the redevelopment of Town Centre House and Merrion House. We are in
detailed discussions with potential partners and are confident in
delivering on this new opportunity.
ibis Styles Hotel
It's been a roller coaster of a year for our hotel, ibis Styles.
During the first lockdown in 2020, we were able to keep the hotel
open for key workers and offer concessionary rates to essential
workers, especially NHS staff. The hotel was then fully open and
trading well in early autumn 2020, only to shut down completely
from January to April 2021. Trading has rebounded since its
reopening in May 2021, although different trading patterns are
emerging. The initial lack of corporate business during the week
has been replaced by leisure bookings that extend over the weekend
into the traditionally quiet Sunday nights. Early signs of the
corporate market returning have recently started to emerge. ibis
Styles is on track to return to full strength very soon.
Manchester
Our Manchester portfolio represents 22% of our total assets and
is centred around the Piccadilly Basin area - a historic and
exciting contribution to Manchester's development. This is a
12.5-acre mixed use development site situated next to the Northern
Quarter, Ancoats and New Islington, all of which have experienced
significant investment and development over recent years. The value
and appeal of the immediate and surrounding areas is rising and our
most recent developments at Burlington House and Ducie House are
showing strong potential.
We have an approved Strategic Regeneration Framework in place
with Manchester City Council which identifies 800 residential
units, a 500 space multi-storey car park and 200,000 sq ft of
canal-side commercial development over the coming years.
Asset Management
Ducie House
We have now completed our GBP2.1m refurbishment of the iconic
Ducie House in Manchester. Originally a petticoat factory, Ducie
House is a 33,000 sq ft multi-tenant office building. The work
included essential fabric and M&E repairs post acquisition.
This included full roof, façade, and window repairs as well as new
boilers, lifts, air conditioning and heating. We adopted a strategy
of restructuring the building's configuration to provide three
additional meeting rooms, shower facilities and booth spaces. The
common areas on the upper floors have also been refurbished to
provide further amenity space including break-out booths with
balcony space and improved toilet/kitchen facilities.
We have seen a very positive response following our investment
and continue to expect the investment to deliver increased net
income of circa GBP0.3m per annum and a post investment return in
excess of 8.5%. The value of Ducie House increased by GBP1.0m to
GBP9.0m reflecting the additional capex spent in the first half of
FY2020. In January, we signed the first new lease for one of the
larger duplex offices with textile company NB Avenue Limited, who
supply and manufacture clothing to online retailers
internationally. Many existing tenants who moved out temporarily
during the refurbishment are returning and the building is now home
to around 20 companies from various sectors(Including technology,
marketing and fashion).
Urban Exchange
Urban Exchange is a 120,000 sq ft retail outlet within our
Piccadilly Basin ownership in the centre of Manchester. It is let
to Aldi, M&S, Pure Gym, and Go Outdoors. As previously
reported, Go Outdoors was put into administration by its owners in
2020. Since that point, we have been receiving full rent from the
administrator and are in active discussions regarding the future of
the store which is likely to continue to trade and stay open.
However, once again this presents TCS with an opportunity to look
at alternative uses and development options for this large, prime
site.
Other assets in our portfolio are performing well. Carver's
Warehouse continues to be strategically important and voids are
filled promptly. Burlington House, which was completed two years
ago, has proved resilient during the COVID-19 challenge. This was
the first residential scheme in Manchester to be awarded a
Wiredscore Silver rating for connectivity.
London and Scotland
Overview
Following a number of disposals in the year, our portfolio in
Scotland now comprises three mixed use properties in Glasgow and
restaurant premises in Edinburgh. In addition to our prime office
premises at Duke Street, London W1, our London investments are in
good-quality secondary high street locations and primarily consist
of retail and residential mixed-use assets.
Scotland
Our activity in Scotland this year has centred around the
disposal of mature assets, largely in the retail sector.
These include two Waitrose stores in Milngavie and Glasgow sold
for GBP23.2m and a recently completed retail development in
Milngavie, let to Home Bargains and Aldi, for GBP10.7m.
We have, however, following our tenant in Buchanan Street,
Glasgow entering a CVA, exercised our right to exit the lease
agreement. Whilst this did incur rental losses, it has given us the
opportunity to look at an alternative future for this property. We
have submitted a planning application to convert the top three
floors into six luxury apartments and will let the remaining retail
outlet to Watches of Switzerland. This greatly improves the quality
of tenancy and lease.
London
Activity in London has also centred around disposals of mature
assets, including retail units in Chiswick and Wood Green for a
total of GBP6.2m. Our other assets are performing well and, whilst
our key focus is on Leeds and Manchester, we will continue to take
advantage of good-quality opportunities as they arise.
Development Pipeline
Our portfolio is peppered with development opportunities, great
and small; from our strategically important sites at Piccadilly
Basin, Whitehall Riverside and Merrion Estate to smaller
residential flat conversion opportunities in Glasgow. We are now
actively exploring the impact of the booming residential and
co-living sector on our development pipeline.
Our development pipeline is significant, with an estimated GDV
of over GBP600m and we see this as a strategic point of
difference.
The key components of the development pipeline include:
-- Piccadilly Basin, Manchester. Mixed residential, commercial,
and car-parking with a total estimated GDV of circa GBP300m.
-- Whitehall Road, Leeds. Office, car-parking, and potentially
leisure provision with a total estimated GDV of over GBP170m.
-- Merrion, Leeds. Office and residential towers with a total
estimated GDV of over GBP100m.
The value of our development pipeline value increased by GBP3.7m
or 9.7% since June 2020, driven by a 15.6% increase in the value of
our Piccadilly Basin, Manchester holding as the market value of
development land there has increased.
We are also exploring different options for Vicar Lane, Leeds,
as well as delivering new apartments, alongside Urban Splash at
Brownsfield Mill, Manchester.
The changing property landscape has led us to reimagine the
Whitehall Riverside development to ensure the master plan is fit
for the future. Initially focused on constructing three office
buildings, we are now active on site assessing a mixed-use scheme
to capitalise on the vibrant Build to Rent (BTR) in Leeds and
planning how best to bring forward plans for 3.5 acres of
undeveloped land.
The success of Burlington House and the buoyant BTR sector in
Manchester have proved to be a springboard for our next development
in the vibrant Piccadilly Basin area. Planning permission for Eider
House was implemented in January 2021 for a new development of 128
luxury apartments opposite Ducie House and adjacent to Dakota
hotel. We are currently reviewing the proposed scheme to ensure
that our next residential development builds on the success of
Burlington House and delivers a best in class scheme.
We take a conservative approach to development to ensure we
never over-commit ourselves, which has proven crucial following the
COVID-19 crisis. However, TCS does have a successful track record
in obtaining planning and delivering strategic developments. In the
last four years, TCS has delivered Merrion House office, two new
hotels in Leeds, and the Burlington House BTR scheme in Manchester.
In addition, over that time frame we have secured planning
permission for Eider House, our second BTR scheme in Manchester,
and for a 17-storey office tower at the Merrion Estate. This will
be our first high-rise development at Merrion and strategic
partnerships are now being put in place for this ambitious
project.
Divisional review - CitiPark
Overview
It's been a challenging year for our CitiPark business. It has
taken the full impact of COVID-1 related lockdowns, with no support
from government or local authorities on rent or rates relief,
leading to a material impact on revenue and profitability. Gross
revenue for FY 2021 was GBP6.7m, 34% down year on year with
operating profit reduced to GBP0.2m, compared to GBP2.7m in the
prior year.
Now lockdown is easing, we are seeing a strong recovery. All our
car parks are now open and short-term income is rising in line with
expectations, although season ticket revenue remains affected by
the slow return to the office. Interestingly, discussions with our
larger commercial clients suggest that nervousness about travelling
on public transport may lead to a rise in demand for parking, as
employees choose to drive as they return to the office.
We have remained flexible throughout the period, temporarily
closing branches when it was economically sensible and using the
government furlough scheme where appropriate. Now we are responding
to changing working patterns with restructured products, for
example, new style season tickets and commercial promotions to
support hybrid working.
Mindful of the needs of our local communities, we provided free
parking for NHS staff in the first lockdown, tailoring ongoing
concessions on a location by location basis as we manage
capacity.
We have also fully supported our staff throughout the year,
topping up furlough salaries and carefully managing their return to
work safely. Throughout this period of stop/start and moving goal
posts, they have proved remarkably resilient and we are very
pleased to see them all back at work.
Technology and innovation
Our strategic technology initiatives have made significant
advances in the year as we continue to expand beyond traditional
car park ownership, using technology as a key differentiator and to
underpin our focus on sustainable growth.
EV charging/CitiCharge
Launched shortly after the year end, in July 2021, our
CitiCharge app allows users to search for our electric vehicle (EV)
charging points around the country and will offer pre-booking
facilities in the future. We own and operate 30 charging points in
Leeds and 22 in Central and Greater London, where the congestion
charge is a key driver of demand. 35 EV charging points for a
Coventry NHS hospital will be live by the end of the calendar year
and we see this as an important future income stream as electric
car numbers increase.
Our three solar energy farms in Manchester and Leeds provide the
capacity to underpin this growth, in addition to selling excess
power to the National Grid.
CitiPark App
Launched last year, this app has come into its own with COVID-19
accelerating take-up as digital payments replaced cash. Our early
promotional message - 'a pay station in your pocket' - emphasised
the benefits of paying for your parking safely on the app and today
60% of all digital parking fees are paid via the CitiPark App.
BaySentry Solutions
Our parking management company, BaySentry Solutions Ltd, has
expanded significantly during the year, acquiring a Cornwall-based
parking enforcement company with 270 sites and 75 enforcement
contracts from an independent operator covering East, West &
North Yorkshire. We see opportunities to use technology to grow
these businesses, using ANPR cameras and other electronic payment
systems, both here and in 25 of our own branches. As the market for
electric vehicles grows, we will look to exploit our presence in
all these locations to expand our EV charging network.
YourParkingSpace.co.uk (YPS)
Our equity share in innovative online marketplace -
YourParkingSpace.co.uk - has continued to increase in value. This
platform connects drivers with over 350,000 privately owned and
commercially operated parking spaces across the UK, available to
book hourly, daily, or on a monthly basis. Drivers can book parking
on-demand through its website and mobile applications. In September
2020, YPS completed a significant fund raise from a new private
equity investor, which will fuel its future expansion as demand
recovers to accommodate returning workers who don't want to use
public transport. As part of the transaction, we exercised our
third and final investment option and now have a 19.9% voting share
with additional 1.2% non-voting shares, convertible to voting on
exit. Our cost of equity investment totals GBP1.0m, which following
an external fair value exercise undertaken after the recent fund
raise is valued at GBP1.5m as at 30 June 2021. We continue to
retain a Board position and are looking forward to working closely
with the founders and new investors as we rapidly grow this very
exciting business.
Multistories at the Merrion Centre
An innovative venue at the Merrion Centre in Leeds helped
maximise the use of space in the Centre car park that would have
otherwise been empty and breathe new life into the hard-hit
hospitality industry.
The top floor of the Merrion Centre car park was rented to a
third party for a series of unique summer pop-up events delivering
music, food and drinks in a setting not normally associated with
social gatherings. The various events were branded using the
Multistories name, inspired by the unique car park setting.
Outlook
CitiPark is set to benefit from a strong recovery in the car
parking sector as concerns over safety influence the return to work
and leisure pursuits, although we are anticipating regional
differences in our car parking estate. For example, our management
contract for Manchester Arena has only just come back on stream
with the restarting of events in September 2021.
Looking forward, we see technology as the key driver of growth
as we transition to a cashless society, developing and enhancing
our CitiPark and CitiCharge apps. We expect our EV charging
business to grow at a steady pace, building our sustainability
point of difference, and to look for strategic acquisition
opportunities for BaySentry Solutions.
FINANCIAL REVIEW
"The financial performance of the Company was significantly
impacted by COVID-19 during the year ended 30 June 2021 and a
degree of uncertainty remains. However, we have seen consistently
improving rent receipts throughout the year, strong recoveries in
both our Car Park and Hotel businesses following the easing of the
last lockdown and the acceleration of our disposal and debt
reduction programme."
The statutory loss for the year was GBP0.6m, compared to a loss
of GBP24.1m in the previous year, with the prior year heavily
influenced by a negative revaluation movement in Investment
Properties of GBP26.0m.
EPRA Earnings* were a profit of GBP0.3m in the year, compared to
a profit of GBP1.7m in the prior year. These amounts are presented
in accordance with IFRS 16 which affects how we account for
right-of-use leases that we have entered into. IFRS 16 was brought
in and adopted for the first time in the results for the year ended
30 June 2020.
COVID-19 had a material impact on our financial performance
during the year, and we estimate a total impact to earnings of
GBP6.2m, compared to pre-COVID-19 levels. We estimate that our
Investment Property business has been impacted by GBP1.0m,
primarily as a result of the fair valuation of rental income and
service charge income that would ordinarily be recognised but due
to COVID-19 is not expected to be recovered. The impact to our
CitiPark business is GBP4.5m due to a significant reduction in car
parking income with many fixed costs, such as rent and rates. Our
ibis Styles hotel has also been impacted by GBP0.7m in the
year.
With EPRA Earnings at historically low levels it would not be
prudent to increase our dividend. The unprecedented impact of
COVID-19 and the level of uncertainty that has arisen means we
believe this is the only responsible action to maintain the
long-term prosperity of the Company. The final dividend for the
year will be 1.75p per share, giving a full year dividend of 3.5p
per share.
During the year the Company sold nine separate investment
property assets which generated GBP48.0m of proceeds. The funds
generated were in the first instance applied to reduce the
Company's borrowings, which has reduced from GBP183.6m to GBP145.6m
in the year. Net borrowings represent total financial borrowings of
GBP176.1m less lease liabilities of GBP29.9m and cash and cash
equivalents of GBP0.6m. These disposals, combined with the
inevitable gap between asset sales and any asset purchases, and the
gradual recovery from COVID-19, will lead to a longer period of
reduced earnings which will inevitably lead to a lower level of
dividend payment than in recent years.
* Alternative performance measures are detailed, defined and
reconciled within Notes 6 and 10 of this announcement
Restatement of prior year figures
Prior year comparatives have been restated to reflect six
adjustments, full details of which are set out in Note 11 of this
announcement
o Reclassification of two of the Group's Multi Storey Car Parks
('MSCPs') from freehold investment properties to freehold
properties within car park activities
o Application of a single accounting policy to all types of
leasehold car park properties, whether long term, short term or
right of use asset
o Disclosure of amounts received under the Coronavirus Job
Retention Scheme
o Reversal of an historic provision for future anticipated
repairs and maintenance costs on an Investment Property owned by
the Group
o Separately identifying service charge income and expenses
within the consolidated income statement as opposed to disclosing a
net amount
o Reclassification of the Group's investment in a listed entity
from current to non-current asset investments
Income statement
EPRA Earnings* for the year ended 30 June 2021 were GBP0.3m.
Restated
GBP000s FY21 FY20 YOY
--------- --------- ---------
Gross Revenue 21,429 30,792 (30.4%)
Impairment of debtors 788 (1,478) (153.3%)
Property Expenses (11,145) (13,681) (18.5%)
Net Revenue 11,072 15,633 (29.2%)
--------- --------- ---------
Other Income /
JV Profit 2,962 2,018 46.8%
Other Expenses - (777) -
Administrative
Expenses (5,585) (6,197) (9.9%)
Operating Profit 8,449 10,677 (20.9%)
--------- --------- ---------
Finance Costs (8,145) (9,009) (9.6%)
EPRA Earnings 304 1,668 (81.8%)
--------- --------- ---------
Segmental FY21 FY20 YOY
--------- --------- ---------
Property
Net Revenue 10,196 11,694 (12.8%)
Operating Profit 8,471 7,849 7.9%
CitiPark
Net Revenue 1,053 3,802 (72.3%)
Operating Profit 155 2,691 (94.2%)
ibis Styles Hotel
Net Revenue (177) 137 (229.2%)
Operating Profit (177) 137 (229.2%)
Statutory profit
On a statutory basis the reported loss for the year was
GBP0.6m.
The statutory profit reflects the EPRA Earnings* of GBP0.3m plus
GBP1.4m of non-cash valuation and impairment movements less the
loss on disposal recognised of GBP2.3m on the nine investment
properties sold in the year.
Gross revenue
Gross revenue was down GBP9.4m or 30.4% year on year, with key
drivers being:
-- Property sales during the year accounted for GBP3.0m of this
reduction and a further GBP1.6m due to COVID-19 related voids and
rent concessions.
-- CitiPark revenues were materially reduced due to COVID-19, in
particular with the three significant UK lockdowns and the stay at
home/work from home policies. Whilst some monthly subscription
income continued to be received, daily receipts were again down
over 90% during the various lockdowns. This has reduced revenue on
a year on year basis by GBP3.5m.
-- Income for the ibis Styles hotel was impacted by COVID-19 by
an estimated GBP1.3m, in particular during the period from January
2021 to April 2021 when the hotel was fully closed.
Property expense
Property expenses were down 18.5% or GBP2.5m year on year. Key
drivers of this underlying decrease were:
-- Property: operating expenses were GBP0.8m lower year on year
predominantly due to a one-time write-off of historic service
charges in the prior period.
-- CitiPark: operating expenses were GBP0.7m lower year on year
primarily because of savings initiated as a result of COVID-19
including furlough savings, reduced rates costs where branches were
closed, and operational cost savings due to the significantly
reduced level of transactions.
-- Ibis Hotel: operating expenses were GBP1.0m lower year on
year, driven primarily by the response to the COVID-19 crisis. With
the hotel closed for over three months in the year, the operation
was able to reduce variable operating costs including the
furloughing of some staff and reduced rates costs.
Other / JV income
Total Other / JV income was up 46.8% or GBP0.9m year-on-year,
the majority of which relates to dilapidations payments received by
the Company as tenants vacate but there was also an increase in the
underlying profits within the joint ventures the Company has a 50%
interest in.
Other expenses
There are no recurring costs in relation to the proposed George
Street aparthotel joint venture with Leeds City Council. The write
down of this joint venture resulted in the prior year charge of
GBP0.8m.
Administrative expenses
Administrative costs were GBP0.6m lower year on year. This is as
a result of significantly reduced spend on bonuses, advertising,
travel, entertaining and other expenditure as a result of our
response to COVID-19.
Finance costs
Finance costs were 9.6% or GBP0.9m lower year on year as a
result of the reduction in both the Company's bank borrowings and
the buyback of GBP6.5m of debenture stock.
* Alternative performance measures are detailed, defined and
reconciled within Notes 6 and 10 of this announcement.
Balance sheet
The below table shows the year-end balance sheet as reported
including the IFRS 16 implementation.
Restated
GBPm FY21 FY20 vs FY20
-------- --------- --------
Freehold and Right of Use Investment
properties* 181.3 239.4 (24.3%)
Development properties 41.5 37.8 9.8%
Car Park related Assets, Goodwill
and Investments 82.7 83.2 (0.6%)
Hotel operations 8.6 0.0 n/a
314.1 360.4 (12.8%)
Joint ventures 16.2 13.8 17.4%
Listed Investments 5.8 3.5 65.7%
Other non-current assets 1.0 1.1 (9.1%)
Total non-current assets inc available
for sale 337.1 378.8 (11.0%)
Net borrowings (incl. lease liabilities) (174.6) (214.2) (18.5%)
Other assets/(liabilities) (7.1) (9.5) (25.9%)
Statutory and EPRA NAV 155.4 155.1 0.2%
Statutory and EPRA NAV per share 292p 292p 0.0%
* includes Assets held for sale in FY20
of GBP23.2m, FY21 GBP3.9m
Non-current assets:
Our total non-current assets (including investments in JVs) of
GBP337.1m (2020: GBP378.8) include GBP222.8m of investment
properties (2020: GBP279.1m), GBP82.7m of non-current car parking
assets (2020: GBP83.2m) and GBP8.6m of Operational Hotel assets
(2020: GBPnil). The car parking assets include GBP4.8m (2020:
GBP4m) of goodwill and intangible assets arising on business
combinations.
The reduction in non-current assets of GBP41.7m during the year
comprises:
-- Disposals of GBP(49.5m)
-- Depreciation charge of GBP(1.8m)
-- Capital expenditure of GBP3.0m
-- Movement in tenant lease incentives GBP1.5m
-- Revaluation uplift/reversal of impairments totalling GBP4.2m
-- Operating profits generated and retained in JV entities GBP0.9m
Although we paused the vast majority of our capital expenditure
from March 2020 onwards in order to preserve cash during the
uncertainty of the COVID-19 crisis, across the year we invested a
total of GBP3.0m of capital expenditure in our properties and car
parking operations.
Borrowings:
During the year our Net Borrowings have reduced by GBP39.6m,
from GBP214.2m as at 30 June 2020 to GBP174.6m. This was primarily
as a direct consequence of the targeted retail sales made in the
first six months. As part of this we bought back GBP6.5m of our
GBP106m 2031 5.375% debenture stock with the remaining reduction
spread across our bank facilities.
Two of the three bank facilities expire within twelve months of
the year end and are therefore classed as current liabilities in
the balance sheet. Since the year end we have had bank credit
approval and have refinanced our GBP33m facility with NatWest, for
a further three years on the same terms and margin albeit at lower
facility limit of GBP25m, this facility will expire in September
2024, with an option for two further one-year extensions.
Our Lloyds Bank facility's initial three-year term expired in
June 2021. However, the facility allows for two one-year extensions
and these were both actioned prior to the year end, the second
extension is subject to a bank instructed valuation exercise, which
is in progress. The Lloyds facility is a GBP35m revolving credit
facility with a further GBP5m overdraft facility and once the
valuation exercise is completed will expire in June 2023.
Finally, our GBP35m Handelsbanken facility does not expire until
June 2023.
Loan to value has been reduced to 51.3%, down from 56.0% a year
ago. Note the calculation of loan to value includes both the
finance lease assets and liabilities.
After the year end, the Company breached a financial covenant on
its Handelsbanken facility for the covenant reporting period from 6
July 2021 to 5 October 2021. The Company had made the bank aware
prior to formally reporting this breach. On 24 November 2021 the
bank confirmed in writing to the Company that it had waived its
right to take any action as a consequence of this breach.
At the time of the breach, the Company had drawndown GBP6.3m out
of a total facility of GBP35m. At the date of this report, the
total amounts drawndown were GBP2.6m.
EPRA net asset reporting
Following the introduction of the EPRA net asset reporting, we
will focus primarily on the measure of Net Tangible Assets (NTA).
The below table reconciles IFRS net assets to NTA, and the other
new EPRA measures.
There are three new EPRA Net Asset Valuation metrics, namely
EPRA Net Reinstatement Value (NRV), EPRA Net Tangible Assets (NTA)
and EPRA Net Disposal Value (NDV). The EPRA NRV scenario, aims to
represent the value required to rebuild the entity and assumes that
no selling of assets takes place. The EPRA NTA is focused on
reflecting a company's tangible assets. EPRA NDV aims to represent
the shareholders' value under an orderly sale of business, where,
for example, financial instruments are calculated to the full
extent of their liability. All three NAV metrics share the same
starting point, namely IFRS Equity attributable to
shareholders.
Restated
Restated FY21 FY20
p per p per
GBPm FY21 FY20 share share
-------- --------- ------- ---------
IFRS reported NAV 155.4 155.1 292 292
Purchasers Costs (1) 21.1 24.1
EPRA Net Reinstatement Value 176.5 179.2 332 337
Remove Purchasers Costs (21.1) (24.1)
Remove Goodwill (2) (4.4) (4.0)
EPRA Net Tangible Assets 151.0 151.1 284 284
Fair value of fixed interest
rate debt (3) (10.2) (17.7)
EPRA Net Disposal Value 140.8 133.4 265 251
-------- ---------
(1) Estimated purchasers' costs including
fees and stamp duty and related taxes.
(2) Removal of goodwill as per the IFRS Balance Sheet - relates
predominantly to goodwill paid to acquire two long term car park
leaseholds in London.
(3) Represents the adjustment to fair value (market
price) of the 2031 5.375% debenture.
Future financial considerations
Future P&L pressure
As highlighted elsewhere in this report, COVID-19 had a material
impact on profitability in the year ended 30 June 2021, in
particular the changing ways people work and their shopping habits.
Both of which have had an effect on our retail and leisure tenants
but also in the revenue derived from our car park operation.
However we are seeing recoveries in all segments of our business,
although there is still a risk if these recoveries are stalled.
As has been seen, the acceleration of our retail disposal
programme has enabled us to reduce Company borrowings and gearing,
although the disposal of income producing assets has had an impact
on the earnings of the business. The Board is reviewing options for
how the proceeds of any further sales could be utilised including
debt repayment, asset purchases and share buybacks.
Whilst the reduction in the dividend in the current year is due
to the impact of COVID-19, the gradual recovery of our car park
business and the loss of income due to disposals are likely to lead
to continued pressure on our ability to pay a higher covered
dividend.
Future balance sheet and covenant pressure
As identified in the Risk Report, we have highlighted the
continued pressure on retail and leisure assets to be a significant
risk to the business. A further risk is the pressure on the
financial covenants of the Company's banking facilities, especially
after the recent breach on the Handelsbanken facility. As part of
the going concern and viability statement review process the
Company has prepared consolidated forecasts and identified a number
of mitigating factors to ensure that the ongoing viability of the
business was not threatened.
Our expectation is that continued asset sales and debt
repayments, will strengthen this further.
Going concern and headroom
One of the most critical judgements for the Board is the
headroom in the Group's debt facilities. This is calculated as the
maximum amount that could be borrowed, taking into account the
properties secured to the funders and the facilities in place. The
total headroom at 30 June 2021 was GBP12.1m (2020: GBP14.8m), which
was considered to be sufficient to support our going concern
conclusion. The properties secured under the Group's debt
facilities would need to fall 19.8% in value before this headroom
number was breached.
In assessing both the viability and going concern status of the
Company, the Board reviewed detailed projections including various
different scenarios. A summary of the approach and the findings is
set out in the Risk Report, forming part of the Strategic Report of
these financial statements.
Total shareholder return and total property return
Total shareholder return of 55.8% (2020: minus 50.4%) was
calculated as the total of dividends paid during the financial year
of 3.5p (2020: 11.75p) and the movement in the share price between
30 June 2020 (95p) and 30 June 2021 (144p), assuming reinvestment
of dividends. This compares with the FTSE All Share REIT index at
23.1% (2020: minus 10.1%) for the same period.
The Company's share price continues to trade at a significant
discount to its NAV, impacting total shareholder return.
Total shareholder returns %
(CAGR)
Total shareholder returns 1 Year 10 Years 20 Years
Town Centre Securities 55.8% 1.6% 5.4%
FTSE All Share REIT
index 23.1% 6.4% 3.3%
Total Property Return is calculated as the net operating profit
and gains / losses from property sales and valuations as a
percentage of the opening investment properties.
Total Property Return for the business for the reported 12
months was 4.3% (2020: (2.1%)). This compared to the MSCI/IPD
market return of 6.4% (2020: (2.9%)).
A key driver of the All Property MSCI index being higher than
TCS is due to the strong market performance of industrial property
of which TCS only has a small amount.
Consolidated income statement
for the year ended 30 June 2021
2021 2020
Restated
Notes GBP000 GBP000
--------------------------------------------- ------ -------- -----------
Gross revenue (excl. service charge
income) 18,703 27,989
Service charge income 2,726 2,803
--------------------------------------------- ------ -------- -----------
Gross revenue 21,429 30,792
Release of provision/(provision for)
impairment of debtors 788 (1,478)
Service charge expenses (3,656) (4,011)
Property expenses (7,489) (9,670)
--------------------------------------------- ------ -------- -----------
Net revenue 11,072 15,633
Administrative expenses 2 (5,585) (6,197)
Other income 3 1,989 1,218
Other expenses - (777)
Valuation movement on investment properties 63 (26,024)
Impairment of car parking assets (111) 414
(Loss)/profit on disposal of investment
properties (2,320) 168
Share of post-tax profits from joint
ventures 2,461 450
--------------------------------------------- ------ -------- -----------
Operating profit/(loss) 7,569 (15,115)
Finance costs (8,145) (9,009)
--------------------------------------------- ------ -------- -----------
Loss before taxation (576) (24,124)
Taxation - -
--------------------------------------------- ------ -------- -----------
Loss for the year attributable to owners
of the Parent (576) (24,124)
--------------------------------------------- ------ -------- -----------
Earnings per share
Basic and diluted 4 (1.1)p (45.4)p
EPRA (non-GAAP measure) 4 0.6p 3.1p
--------------------------------------------- ------ -------- -----------
Dividends per share
Paid during the year 5 3.5p 11.75p
Proposed 5 1.75p 1.75p
--------------------------------------------- ------ -------- -----------
Consolidated statement of comprehensive income
for the year ended 30 June 2021
2021 2020
Restated
GBP000 GBP000
----------------------------------------- --- -------- --------------
Loss for the year (576) (24,124)
Items that will not be subsequently
reclassified to profit or loss
Revaluation gains/(losses) on other
investments 2,795 (2,363)
---------------------------------------------- -------- --------------
Total other comprehensive income/(loss) 2,795 (2,363)
---------------------------------------------- -------- --------------
Total comprehensive income/(loss) for
the year 2,219 (26,487)
---------------------------------------------- -------- --------------
All profit and total comprehensive income for the year is
attributable to owners of the Parent.
Consolidated balance sheet
as at 30 June 2021
2021 2020 2019
Restated Restated
Notes GBP000 GBP000 GBP000
------------------------------------------------- ------ ---------- ----------- -----------
Non-current assets
Property rental
Investment properties 6 218,909 254,014 297,300
Investments in joint ventures 7 16,212 13,751 13,387
235,121 267,765 310,687
------------------------------------------------- ------ ---------- ----------- -----------
Car park activities
Freehold and leasehold properties 6 74,502 76,513 50,810
Goodwill and intangible assets 4,841 4,024 4,024
79,343 80,537 54,834
------------------------------------------------- ------ ---------- ----------- -----------
Hotel operations
Freehold and leasehold properties 6 8,630 - -
------------------------------------------------- ------ ---------- ----------- -----------
8,630 - -
------------------------------------------------- ------ ---------- ----------- -----------
Fixtures, equipment and motor vehicles 955 1,113 1,609
Investments 9,217 6,164 8,381
------------------------------------------------- ------ ---------- ----------- -----------
Total non-current assets 333,266 355,579 375,511
------------------------------------------------- ------ ---------- ----------- -----------
Current assets
Assets held for sale 6 3,850 23,199 -
Trade and other receivables 5,311 3,468 5,354
Cash and cash equivalents 21,670 12,643 23,692
------------------------------------------------- ------ ---------- ----------- -----------
Total current assets 30,831 39,310 29,046
------------------------------------------------- ------ ---------- ----------- -----------
Total assets 364,097 394,889 404,557
------------------------------------------------- ------ ---------- ----------- -----------
Current liabilities
Trade and other payables (32,612) (23,236) (34,593)
Financial liabilities (42,260) (61,984) -
Total current liabilities (74,872) (85,220) (34,593)
------------------------------------------------- ------ ---------- ----------- -----------
Non-current liabilities
Financial liabilities (133,830) (154,591) (182,152)
------------------------------------------------- ------ ---------- ----------- -----------
Total liabilities (208,702) (239,811) (216,745)
------------------------------------------------- ------ ---------- ----------- -----------
Net assets 155,395 155,078 187,812
------------------------------------------------- ------ ---------- ----------- -----------
Equity attributable to the owners of the Parent
Called up share capital 8 13,282 13,290 13,290
Share premium account 200 200 200
Capital redemption reserve 567 559 559
Revaluation reserve 500 500 -
Retained earnings 140,846 140,529 173,763
------------------------------------------------- ------ ---------- ----------- -----------
Total equity 155,395 155,078 187,812
------------------------------------------------- ------ ---------- ----------- -----------
Net asset value per share 10 292p 292p 353p
------------------------------------------------- ------ ---------- ----------- -----------
Consolidated statement of Changes in Equity
as at 30 June 2021
Share capital Share Capital Revaluation Retained Total equity
premium account redemption reserve earnings
reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------- -------------- ---------------- --------------- ---------------- ---------------- -------------
Balance at 30
June 2019 -
restated 13,290 200 559 - 173,763 187,812
Comprehensive
income for the
year
Loss for the
year - - - - (24,124) (24,124)
Other
comprehensive
income - - - - (2,363) (2,363)
Transfer - - - 500 (500) -
-------------- ---------------- --------------- ---------------- ---------------- -------------
Total
comprehensive
income for the
year - - - 500 (26,987) (26,487)
Contributions
by and
distributions
to owners
Final dividend
relating to
the year ended
30 June 2019 - - - - (4,519) (4,519)
Interim
dividend
relating to
the year ended
30 June 2020 - - - - (1,728) (1,728)
---------------- -------------- ---------------- --------------- ---------------- ---------------- -------------
Balance at 30
June 2020 -
restated 13,290 200 559 500 140,529 155,078
---------------- -------------- ---------------- --------------- ---------------- ---------------- -------------
Comprehensive
income for the
year
Loss for the
year - - - - (576) (576)
Other
comprehensive
income - - - - 2,795 2,795
Total
comprehensive
loss for the
year - - - - 2,219 2,219
Contributions
by and
distributions
to owners
Arising on
purchase and
cancellation
of own shares (8) - 8 - (42) (42)
Final dividend
relating to
the year ended
30 June 2020 - - - - (930) (930)
Interim
dividend
relating to
the year ended
30 June 2021 - - - - (930) (930)
---------------- -------------- ---------------- --------------- ---------------- ---------------- -------------
Balance at 30
June 2021 13,282 200 567 500 140,846 155,395
---------------- -------------- ---------------- --------------- ---------------- ---------------- -------------
Consolidated cash flow statement
for the year ended 30 June 2021
2021 2020
-------------------- -------------------
Notes GBP000 GBP000 GBP000 GBP000
----------------------------------------- ------ --------- --------- -------- ---------
Cash flows from operating activities
Cash generated from operations 9 4,644 14,433
Interest paid (6,920) (7,648)
----------------------------------------- ------ --------- --------- -------- ---------
Net cash (absorbed by)/generated
from operating activities (2,276) 6,785
----------------------------------------- ------ --------- --------- -------- ---------
Cash flows from investing activities
Purchase and construction of investment
properties - (1,610)
Refurbishment of investment properties (2,637) (5,442)
Payments for leasehold property
improvements - (25)
Purchases of fixtures, equipment
and motor vehicles (198) (93)
Proceeds from sale of investment
properties 48,049 2,494
Payments for business acquisitions (874) -
Payments for acquisition of non-listed
investments (258) (146)
Repayment of loans from joint ventures - 86
----------------------------------------- ------ --------- --------- -------- ---------
Net cash generated from/(used in)
investing activities 44,082 (4,736)
----------------------------------------- ------ --------- --------- -------- ---------
Cash flows from financing activities
Proceeds from non-current borrowings 4,000 8,000
Repayment of non-current borrowings (44,091) -
Principal element of lease payments (1,659) (1,650)
Dividends paid to shareholders (1,860) (6,247)
----------------------------------------- ------ --------- --------- -------- ---------
Net cash generated from/(used in)
financing activities (43,610) 103
----------------------------------------- ------ --------- --------- -------- ---------
Net (decrease)/increase in cash
and cash equivalents (1,804) 2,152
Cash and cash equivalents at beginning
of the year 2,361 209
----------------------------------------- ------ --------- --------- -------- ---------
Cash and cash equivalents at end
of the year 557 2,361
----------------------------------------- ------ --------- --------- -------- ---------
Cash and cash equivalents at the year end are comprised
of the following:
Cash balances 21,670 12,643
Overdrawn balance (21,113) (10,282)
557 2,361
----------------------------------------- ------ --------- --------- -------- ---------
Audited preliminary results announcements
The financial information for the year ended 30 June 2021 and
the year ended 30 June 2020 does not constitute the company's
statutory accounts for those years.
Statutory accounts for the year ended 30 June 2020 have been
delivered to the Registrar of Companies. The statutory accounts for
the year ended 30 June 2021 will be delivered to the Registrar of
Companies following the Company's Annual General Meeting.
The auditors' reports on the accounts for 30 June 2021 and 30
June 2020 were unqualified, did not draw attention to any matters
by way of emphasis, and did not contain a statement under 498(2) or
498(3) of the Companies Act 2006 .
1. Segmental information
Segmental assets 2021 2020
Restated
GBP000 GBP000
--------------------- -------- ----------
Property rental 275,661 306,407
Car park activities 79,658 79,852
Hotel operations 8,778 8,630
--------------------- -------- ----------
364,097 394,889
--------------------- -------- ----------
Segmental 2021 2020
results Restated
------------------------------------------------- ----------------------------------------------
Property Car park Hotel Property Car Hotel
park
rental activities operations Total rental activities operations Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------- --------- ----------- ----------- -------- --------- ----------- ----------- ---------
Gross revenue
(excl.
service charge
income) 11,358 6,719 626 18,703 15,875 10,198 1,916 27,989
Service charge
income 2,726 - - 2,726 2,803 - - 2,803
-------------------- --------- ----------- ----------- -------- --------- ----------- ----------- ---------
Gross revenue 14,084 6,719 626 21,429 18,678 10,198 1,916 30,792
Release of
provision/
(provision for)
impairment of
debtors 788 - - 788 (1,478) - - (1,478)
Service charge
expenses (3,656) - - (3,656) (4,011) - - (4,011)
Property expenses (1,020) (5,666) (803) (7,489) (1,495) (6,396) (1,779) (9,670)
-------------------- --------- ----------- ----------- -------- --------- ----------- ----------- ---------
Net revenue/(costs) 10,196 1,053 (177) 11,072 11,694 3,802 137 15,633
-------------------- --------- ----------- ----------- -------- --------- ----------- ----------- ---------
Administrative
expenses (4,687) (898) - (5,585) (5,086) (1,111) - (6,197)
Other income 1,989 - - 1,989 1,218 - - 1,218
Other expenses - - - - (777) - - (777)
Share of post-tax
profits from joint
ventures 973 - - 973 800 - - 800
-------------------- --------- ----------- ----------- -------- --------- ----------- ----------- ---------
Operating
profit/(loss)
before valuation
movements 8,471 155 (177) 8,449 7,849 2,691 137 10,677
-------------------- --------- ----------- ----------- -------- --------- ----------- ----------- ---------
Valuation movement
on investment
properties 63 - - 63 (26,024) - - (26,024)
Impairment of car
parking assets - (111) - (111) - 414 - 414
(Loss)/profit on
disposal of
investment
properties (2,320) - - (2,320) 168 - - 168
Valuation movement
on joint venture
properties 1,488 - - 1,488 (350) - - (350)
Operating
profit/(loss) 7,702 44 (177) 7,569 (18,357) 3,105 137 (15,115)
Finance costs (8,145) (9,009)
-------------------- --------- ----------- ----------- -------- --------- ----------- ----------- ---------
Loss before
taxation (576) (24,124)
-------------------- --------- ----------- ----------- -------- --------- ----------- ----------- ---------
Taxation - -
-------------------- --------- ----------- ----------- -------- --------- ----------- ----------- ---------
Loss for the year (576) (24,124)
-------------------- --------- ----------- ----------- -------- --------- ----------- ----------- ---------
All results are derived from activities conducted in the United
Kingdom.
The car park results include car park income from sites that are
held for future development. The value of these sites has been
determined based on their development value and therefore the total
value of these assets has been included within the assets of the
property rental business.
The net revenue at the development sites for the year ended 30
June 2021, arising from car park operations , was GBP1,005,000.
After allowing for an allocation of administrative expenses, the
operating profit at these sites was GBP646,000.
Revenue received within the car park and hotel segments is the
only revenue recognised on a contract basis under IFRS 15. All
other revenue within the Property segment comes from rental lease
agreements.
2. Administrative expenses
2021 2020
GBP000 GBP000
------------------------------ ------- -------
Employee benefits 3,444 3,893
Depreciation 163 227
Charitable donations 7 49
Other 1,971 2,028
------------------------------ ------- -------
5,585 6,197
------------------------------ ------- -------
Depreciation charged to the Consolidated Income Statement as an
administrative expense relates to depreciation on central office
equipment, including fixtures and fittings, computer equipment and
motor vehicles. Depreciation on operational equipment and right of
use assets within both the car park and hotel businesses are
charged as direct property expenses within the Consolidated Income
Statement.
3. Other income and expenses
2021 2020
GBP000 GBP000
-------------------------------------------- ------- -------
Commission received 166 172
Dividends received 34 33
Management fees receivable 245 245
Dilapidations receipts and income relating
to surrender premiums 1,103 715
Other 441 53
-------------------------------------------- ------- -------
1,989 1,218
-------------------------------------------- ------- -------
Other expenses
During the prior year a provision of GBP777,000 was recognised
in relation to costs incurred on a project that may not be
recoverable. Costs had been incurred over a number of years on the
planned George Street aparthotel joint venture however there was
some doubt over the future viability of the project, therefore a
full provision was recognised against the costs incurred to
date.
4. Earnings per share (EPS)
The calculation of basic earnings per share has been based on
the profit for the period, divided by the weighted average number
of shares in issue. The weighted average number of shares in
issue during the period was 53,161,950 (2020: 53,161,950).
2021 2020
Restated
--------------------- ---------------------
Earnings Earnings
Earnings per Earnings per share
share
GBP000 p GBP000 p
--------------------------------------- --------- --------- --------- ----------
Loss for the year and earnings
per share (576) (1.1) (24,124) (45.4)
---------------------------------------- --------- --------- --------- ----------
Valuation movement on investment
properties (63) (0.1) 26,024 49.0
Impairment of car parking assets 111 0.2 (414) (0.8)
Valuation movement on properties
held in joint ventures (1,488) (2.8) 350 0.6
Profit/loss on disposal of investment
and development properties 2,320 4.4 (168) (0.3)
---------------------------------------- --------- --------- --------- ----------
EPRA earnings and earnings per
share 304 0.6 1,668 3.1
---------------------------------------- --------- --------- --------- ----------
There is no difference between basic and diluted earnings per
share.
There is no difference between basic and diluted EPRA earnings
per share.
5. Dividends
2021 2020
GBP000 GBP000
---------------------------------- ------- -------
2019 final paid: 8.50p per 25p
share - 4,519
2020 interim paid: 3.25p per
25p share - 1,728
2020 final paid: 1.75p per share 930 -
2021 interim paid: 1.75p per 930 -
share
---------------------------------- ------- -------
1,860 6,247
---------------------------------- ------- -------
An interim dividend in respect of the year ended 30 June 2021 of
1.75p per share was paid to shareholders on 25 June 2021. This
dividend was paid entirely as a Property Income Distribution
(PID).
A final dividend in respect of the year ended 30 June 2021 of
1.75p per share is proposed. This dividend, based on the shares in
issue at 23 November 2021, amounts to GBP0.9m which has not been
reflected in these accounts and will be paid on 21 January 2022 to
shareholders on the register on 31 December 2021. The entire
dividend will be paid as an ordinary dividend.
6. Non-current assets
(a) Investment properties
Freehold Right of Development Total
use asset
GBP000 GBP000 GBP000 GBP000
------------------------------------- --------- ----------- ------------ ---------
Valuation at 30 June 2019
- restated 239,565 21,284 36,451 297,300
Additions at cost 1,610 - - 1,610
IFRS 16 adjustments - 518 - 518
Other capital expenditure 5,630 - 348 5,978
Purchase of freehold 14,129 (13,594) - 535
Disposals (2,425) - - (2,425)
Transfer to assets held for
sale (23,199) - - (23,199)
Deficit on revaluation (24,906) (2,070) 952 (26,024)
Movement in tenant lease incentives (279) - - (279)
Valuation at 30 June 2020
- restated 210,125 6,138 37,751 254,014
------------------------------------- --------- ----------- ------------ ---------
Capital expenditure 2,146 - 22 2,168
Disposals (26,319) - - (26,319)
Transfer to hotel operations (8,630) - - (8,630)
Transfer to assets held for
sale - (3,850) - (3,850)
Valuation movement (4,095) 480 3,678 63
Movement in tenant lease incentives 1,463 - - 1,463
------------------------------------- --------- ----------- ------------ ---------
Valuation at 30 June 2021 174,690 2,768 41,451 218,909
------------------------------------- --------- ----------- ------------ ---------
At 30 June 2021, investment property valued at GBP213,720,000
(2020: GBP247,985,000) was held as security against the Group's
borrowings.
Right of use investment property assets include long leasehold
property interests.
(b) Freehold and leasehold properties - car park activities
Freehold Right Total
to use
asset
GBP000 GBP000 GBP000
-------------------------------------- --------- -------- --------
Valuation at 30 June 2019 - restated 30,950 19,860 50,810
Additions - 25 25
IFRS 16 adjustment - 27,021 27,021
Depreciation (285) (1,472) (1,757)
(Impairment)/reversal of impairment (15) 429 414
-------------------------------------- --------- -------- --------
Valuation at 30 June 2020 - restated 30,650 45,863 76,513
-------------------------------------- --------- -------- --------
IFRS 16 adjustment - (95) (95)
Depreciation (329) (1,476) (1,805)
(Impairment)/reversal of impairment (421) 310 (111)
-------- --------
Valuation at 30 June 2021 29,900 44,602 74,502
-------------------------------------- --------- -------- --------
The historical cost of freehold properties and right of use
assets relating to car park activities is GBP30,153,000 (2020:
GBP30,506,000).
At 30 June 2021, freehold properties and right of use assets
relating to car park activities, held as security against the
Group's borrowings are held at GBP43,650,000 (2020:
GBP44,450,000).
The Company occupies an office suite in part of the Merrion
Centre and also at 6 Duke Street in London. The Directors do not
consider this element to be material.
(c) Freehold and leasehold properties - hotel operations
Freehold
GBP000
------------------------------------- ---------
Valuation at 30 June 2020 -
Transfer from investment properties 8,630
Valuation at 30 June 2021 8,630
------------------------------------- ---------
At 30 June 2021, freehold and leasehold property relating to
hotel operations valued at GBP8,630,000 was held as security
against the Group's borrowings.
The Group owns and operates a hotel that has previously
accounted for within Investment Property, on the basis that it was
marketing the property for a letting to a hotel operator. The hotel
was closed between January and April 2021 due to the Covid
pandemic. Since re-opening, trading at the hotel has been strong
and given there was no firm interest for a third party letting the
directors have decided to continue to operate the hotel, therefore
this property has been transferred to freehold and leasehold
properties with effect from 30 June 2021.
The fair value of the Group's investment and development
properties, freehold car parks, hotel operations and assets held
for sale have been determined principally by independent,
appropriately qualified external valuers CBRE and Jones Lang
LaSalle. The external valuation reports for June 2020 explicitly
mentioned material valuation uncertainty due to Novel Coronavirus
(COVID- 19) in their portfolio valuation reports to management for
certain properties within the TCS portfolios. This reference has
not been considered necessary in the valuation reports for June
2021. The remainder of the portfolio has been valued by the
Property Director.
Valuations are performed bi-annually and are performed
consistently across the Group's whole portfolio of properties. At
each reporting date appropriately qualified employees verify all
significant inputs and review computational outputs. The external
valuers submit and present summary reports to the Property Director
and the Board on the outcome of each valuation round.
Valuations take into account tenure, lease terms and structural
condition. The inputs underlying the valuations include market
rents or business profitability, incentives offered to tenants,
forecast growth rates, market yields and discount rates and selling
costs including stamp duty.
The development properties principally comprise land in Leeds
and Manchester. These have also been valued by appropriately
qualified external valuers Jones Lang LaSalle, taking into account
an assessment of their realisable value in their existing state and
condition based on market evidence of comparable transactions and
residual land value calculations.
Property income, values and yields have been set out by category
in the table below.
Passing ERV Value Initial Reversionary
rent yield yield
GBP000 GBP000 GBP000 % %
---------------------------- -------- ------- -------- -------- -------------
Retail and Leisure 1,589 1,947 23,445 6.4% 7.9%
Merrion Centre (excluding
offices) 4,630 4,857 56,654 7.7% 8.1%
Offices 2,872 4,568 55,546 4.9% 7.8%
Hotels 1,180 1,630 23,630 4.7% 6.5%
Out of town retail 1,205 1,155 14,500 7.9% 7.5%
Distribution 411 463 6,470 6.0% 6.8%
Residential 504 492 9,175 5.2% 5.1%
---------------------------- -------- ------- -------- -------- -------------
12,391 15,112 189,420 6.2% 7.5%
---------------------------- -------- ------- -------- -------- -------------
Development property 41,451
Car parks 74,502
IFRS 16 Adjustment - Right
of use assets held within
investment property 518
---------------------------- -------- ------- --------
305,891
---------------------------- -------- ------- --------
Investment properties (freehold and right of use), freehold
properties (PPE), hotel operations and assets held for sale
The effect on the total valuation (excluding development
property and car parks of GBP189.4m of applying a different yield
and a different ERV would be as follows:
Valuation in the Consolidated Financial Statements at an initial
yield of 7.2% - GBP163.1m, Valuation at 5.2% - GBP226.0m.
Valuation in the Consolidated Financial Statements at a
reversionary yield of 8.5% - GBP167.2m, Valuation at 6.5% -
GBP218.4m.
Investment properties (development properties)
The key unobservable inputs in the valuation of one of the
Group's development properties of GBP27.4m is the assumed per acre
or per unit land value. The effect on the development property
valuation of applying a different assumed per acre or per unit land
value would be as follows:
Valuation in the Consolidated Financial Statements if a 5%
increase in the residual land value - GBP428.8m, 5% decrease in the
residual land value - GBP26.0m.
The other key development property in the Group is valued on a
residual land value basis, the effect on the development property
valuation of applying reasonable sensitivities would not create a
material impact.
Freehold car park activities
The effect on the total valuation of the Group's freehold car
park properties of GBP29.9m in applying a different yield/discount
rate would be as follows:
Valuation in the Consolidated Financial Statements based on a 1%
decrease in the yield/discount rate - GBP35.3m, 1% increase in the
yield/discount rate - GBP26.0m
Property valuations can be reconciled to the carrying value of
the properties in the balance sheet as follows:
Assets
Freehold held
Investment and Leasehold Hotel for
Properties Properties operations sale Total
GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------ ------------- ---------------- ------------- ------- --------
Externally valued by CBRE 108,150 24,500 8,630 3,850 145,130
Externally valued by Jones
Lang LaSalle 110,190 5,400 - - 115,590
Investment properties valued
by the Directors 51 - - - 51
------------------------------ ------------- ---------------- ------------- ------- --------
Properties held at valuation 218,391 29,900 8,630 3,850 260,771
IFRS 16 right to use assets 518 44,602 - - 45,120
------------------------------ ------------- ---------------- ------------- ------- --------
218,909 74,502 8,630 3,850 305,891
------------------------------ ------------- ---------------- ------------- ------- --------
Valuation of investment properties (freehold and right of
use),freehold properties (PPE), hotel operations and assets held
for sale at fair value
All investment properties, freehold properties held in property
plant and equipment, hotel operations and assets held for sale are
measured at fair value in the consolidated balance sheet and are
categorised as level 3 in the fair value hierarchy as defined in
IFRS13 as one or more inputs to the valuation are partly based on
unobservable market data. In arriving at their valuation for each
property (as in prior years) both the independent external valuers
and the Directors have used the actual rent passing and have also
formed an opinion as to the two significant unobservable inputs
being the market rental for that property and the yield (i.e. the
discount rate) which a potential purchaser would apply in arriving
at the market value. Both these inputs are arrived at using market
comparables for the type, location and condition of the
property.
Assets held for sale
As at 30 June 2021, one property with a value of GBP3,850,000
(2020: two properties with a total value of GBP23,199,000) was in
the process of being sold and was therefore classified within
current assets as Assets held for sale. The valuation surplus
recognised through the Income Statement in relation to this
property for the year ended 30 June 2021 was GBP230,000 (2020:
deficit of GBP3,471,000).
(d) Fixtures, equipment and motor vehicles
Accumulated
Cost depreciation
GBP000 GBP000
------------------------------------------------ ------- ---------------
At 1 July 2019 4,390 2,781
Additions 93 -
Depreciation - 589
At 30 June 2020 4,483 3,370
------------------------------------------------ ------- ---------------
Net book value at 30 June 2020 1,113
------------------------------------------------ ------- ---------------
At 1 July 2020 4,483 3,370
Additions 198 -
On acquisition of subsidiaries 30 -
Depreciation - 386
At 30 June 2021 4,711 3,756
------------------------------------------------ ------- ---------------
Net book value at 30 June 2021 955
------------------------------------------------ ------- ---------------
7. Investments in joint ventures
2021 2020
GBP000 GBP000
----------------------------------------- ------- -------
At the start of the year 13,751 13,387
Repayments of loans from joint ventures - (86)
Loan interest 110 156
Valuation movement 1,488 (350)
Share of profits after tax 863 644
----------------------------------------- ------- -------
At the end of the year 16,212 13,751
----------------------------------------- ------- -------
Investments in joint ventures are broken down as follows:
2021 2020
GBP000 GBP000
-------- ------- -------
Equity 10,376 8,452
Loans 5,836 5,299
-------- ------- -------
16,212 13,751
-------- ------- -------
Investments in joint ventures primarily relate to the Group's
interest in the partnership capital of Merrion House LLP and share
capital of Belgravia Living Group Limited.
Also within Investments in Joint Ventures exist loan balances
due from joint ventures as they are considered to form part of the
net investment in the JV. Repayment of the loans is neither planned
nor likely to occur in the foreseeable future. These loan balances
are held at amortised cost and are assessed for impairment on an
annual basis using an expected credit loss model, in accordance
with IFRS 9. Where a joint venture is loss making (as was the case
for Belgravia Living Group Ltd in the prior year) and the losses
exceed the equity investment in the joint venture, any excess
losses are allocated to the loan balance which reduces the loan
receivable's carrying amount. If the joint venture becomes
profitable (as is the case for Belgravia Living Group Ltd in the
current year) the profits are allocated first to the loan to
reverse previous losses allocated and are subsequently allocated to
the equity investment.
Merrion House LLP owns a long leasehold interest over a property
that is let to the Group's joint venture partner, Leeds City
Council ('LCC'). The interest in the joint venture for each partner
is an equal 50% share, regardless of the level of overall
contributions from each partner. The investment property held
within this partnership has been externally valued by CBRE at each
reporting date.
The net assets of Merrion House LLP for the current and previous
year are as stated below:
2021 2020
GBP000 GBP000
------------------------- --------- ---------
Non-current assets 71,650 69,400
Current assets 664 689
Current liabilities (2,307) (2,269)
Non-current liabilities (48,929) (50,532)
------------------------- --------- ---------
Net assets 21,078 17,288
------------------------- --------- ---------
The profits of Merrion House LLP for the current and previous
year are as stated below:
2021 2020
GBP000 GBP000
--------------------------------------------- -------- --------
Revenue 3,328 3,328
Expenses (8) (5)
Finance costs (1,780) (1,832)
1,540 1,491
Valuation movement on investment properties 2,250 -
--------------------------------------------- -------- --------
Net profit 3,790 1,491
--------------------------------------------- -------- --------
Belgravia Living Group Limited completed construction of a block
of residential apartments in Manchester in 2019. These apartments
have been let to residential tenants during the year. The Group's
financial interest in this joint venture is primarily in the form
of a loan with a value as at 30 June 2021 of GBP5.7m (2020:
GBP5.3m).
The assets and liabilities of Belgravia Living Group for the
current and previous year are as stated below:
2021 2020
GBP000 GBP000
------------------------- --------- ---------
Non-current assets 22,783 22,923
Current assets 3,168 3,014
Current liabilities (11,286) (11,365)
Non-current liabilities (14,634) (14,725)
------------------------- --------- ---------
Net liabilities 31 (153)
------------------------- --------- ---------
The income and expenses of Belgravia Living Group Limited for
the current and previous year are as stated below:
2021 2020
GBP000 GBP000
--------------------------------------------- ------- -------
Revenue 1,262 1,215
Expenses (514) (538)
Finance costs (571) (751)
--------------------------------------------- ------- -------
177 (74)
Valuation movement on investment properties 726 (700)
--------------------------------------------- ------- -------
Net profit/(loss) 903 (774)
--------------------------------------------- ------- -------
The Group's interest in other joint ventures are not considered
to be material. The book value of the Group's investment in Bay
Sentry Limited is GBPnil (2020: GBPnil)
The joint ventures have no significant contingent liabilities to
which the Group is exposed nor has the Group any significant
contingent liabilities in relation to its interest in the joint
ventures.
A full list of the Group's joint ventures, which are all
registered in England and operate in the United Kingdom, is set out
as follows:
Beneficial Activity
Interest
%
------------------------------- ----------- ---------------------
Merrion House LLP 50 Property investment
Belgravia Living Group Limited 50 Property Investment
Bay Sentry Limited 50 Software Development
------------------------------- ----------- ---------------------
8. Share capital
Authorised
The authorised share capital of the company is 164,879,000
(2020: 164,879,000) Ordinary Shares of 25p each. The nominal value
of authorised share capital is GBP41,219,750 (2020:
GBP41,219,750).
Issued and fully paid up
Number Nominal
of shares value
000 GBP000
------------------------------ ----------- --------
At 30 June 2020 53,162 13,290
Purchase and cancellation of
own shares (31) (8)
------------------------------ ----------- --------
At 30 June 2021 53,131 13,282
------------------------------ ----------- --------
The Company has only one type of Ordinary Share class in issue.
All shares have equal entitlement to voting rights and dividend
distributions.
At the year end the Company had authority to buy back for
cancellation a further 7,943,377 Ordinary Shares.
9. Cash flow from operating activities
2021 2020
Restated
GBP000 GBP000
----------------------------------------- -------- ----------
Loss for the financial year (576) (24,124)
Adjustments for:
Depreciation 2,191 2,346
Amortisation 37 -
Loss/(profit) on disposal of investment
properties 2,320 (168)
Finance costs 8,145 9,009
Share of post tax profits from joint
ventures (2,461) (450)
Movement in valuation of investment
properties (63) 26,024
Movement in lease incentives (1,463) 279
Impairment of/(reversal of impairment
of) car parking assets 111 (414)
(Increase)/decrease in receivables (2,675) 1,097
(Decrease)/increase in payables (922) 834
----------------------------------------- -------- ----------
Cash generated from operations 4,644 14,433
----------------------------------------- -------- ----------
10. EPRA net asset value per share
The Basic and EPRA net asset values are the same, as set out in
the table below.
2021 2020
GBP000 GBP000
-------------------------- -------- --------
Net assets at 30 June 155,395 155,078
Shares in issue (000) 53,131 53,162
Basic and EPRA net asset
value per share 292p 292p
-------------------------- -------- --------
11. Restatement of prior year figures
During the year the Directors identified that a number of the
Group's accounting policies were either not in compliance with the
relevant accounting standard or where not applied correctly. For
this reason prior year figures have been restated and the details
are summarised below:
1) Classification of owner-occupied assets
The Group operates a number of car parks on freehold land owned
by the Group. Under the relevant accounting standards these
owner-occupied car parks are required to be classified as Property,
Plant and Equipment. During the year two car parks were identified
that were mis-classified as Investment Property. The prior year
comparatives have been restated to:
-- Re-classify investment property as Freehold and Leasehold
Properties (car park activities) within the Consolidated balance
sheet, the amount being GBP27,200,000 at 1 July 2019 and
GBP26,900,000 at 30 June 2020.
-- Recognise a depreciation charge of GBP285,000 within the
Consolidated income statement for the year ended 30 June 2020
-- Recognise an impairment of GBP15,000 on Freehold and
Leasehold Properties within the Consolidated income statement for
the year ended 30 June 2020
-- Reduce the valuation movement on investment properties in the
income statement by GBP300,000 for the year ended 30 June 2020
The adjustment has no overall effect on the total net assets of
the Group at 30 June 2020 or on the Group's loss for the year ended
30 June 2020.
2) Measurement of leasehold properties (car park activities)
The group operates a number of car parks from leasehold
properties (right-of-use assets). The Directors consider that the
leased sites upon which these car parks are operated fall into one
class of asset because they are of similar nature and use in the
Group's operations. Accounting standards require right-of-use
assets within the same class of assets to be measured consistently
using either the cost model or the revaluation model.
In the prior year, leasehold properties were inconsistently
split between two classes of assets, being long leasehold and
right-of-use assets. Within these classes a mixed measurement
approach was applied with two sites held at valuation and the
remaining held under the cost model.
The prior year comparative figures have been restated to present
all leased car park sites as right-of-use assets within note 12(B)
and to consistently apply the cost model to the entire class of
assets. The effect of this restatement is:
-- A decrease in Freehold and leasehold properties and of
GBP584,000 at 1 July 2019 and GBP546,000 at 30 June 2020
-- Recognise an additional depreciation charge of GBP141,000
within the Consolidated income statement for the year ended 30 June
2020
-- Recognise an additional reversal of impairment of GBP179,000
on Freehold and Leasehold Properties within the Consolidated income
statement for the year ended 30 June 2020
The adjustment results in a reduction in net assets of
GBP546,000 June 2020. The adjustment also results in a GBP38,000
decrease to the Group loss for the year ended 30 June 2020.
3) Disclosure of employee benefits
Company law requires the Group to disclose the total amount of
employee benefits paid or payable in respect of the year. In the
prior year, employee benefits were presented net of monies received
under the Coronavirus Job Retention Scheme (furlough grant) and
excluded some benefits payable to employees where the cost was
later re-claimed via a service charge. As a result, the disclosure
did not comply with the requirements of the Companies Act.
The comparatives in note 6 have been restated to provide correct
information. The effect of this restatement is to increase the
disclosed total employee benefits payable for the year ended 30
June 2020 by GBP377,000.
The adjustment has no overall effect on the total net assets of
the Group at 30 June 2020 or on the Group's loss for the year ended
30 June 2020.
4) Provisions / trade and other payables
In the prior year a provision of GBP146,000 was recognised in
relation to future anticipated repairs and maintenance costs on an
Investment Property owned by the Group. The provision was presented
within trade and other payables. The provision should not have been
recognised as the amount relates to a future operating cost of the
Group. The prior year comparatives have been restated to:
-- Reduce trade and other payables within the Consolidated
Balance Sheet by GBP146,000 at 1 June 2019 and GBP146,000 at 30
June 2020.
The adjustment results in an increase in net assets of
GBP146,000 at 30 June 2020. The adjustment has no effect on the
income statement for the year ended 30 June 2020.
5) Service charge income and expenses
In the prior year Consolidated income statement service charge
income and service charge expenses were presented as a net amount
within property expenses. The amounts should not have been
presented net under the relevant accounting standards. The prior
year comparatives in the consolidated income statement have been
restated to present service charge income of GBP2,803,000 and
service charge expenses of GBP4,011,000 as gross amounts in the
year to 30 June 2020.
The adjustment has no overall effect on the total net assets of
the Group at 30 June 2020 or on the Group's loss for the year ended
30 June 2020.
6) Classification of Investments
The Group owns shares in a company listed on the AIM market of
the London Stock Exchange. The total value of the investment at 30
June 2020 was GBP3,508,000 and this was presented in the
Consolidated balance sheet within current asset investments. The
investment should not have been classified as current because on 30
June 2020 management did not expect to realise the asset within
twelve months of the reporting date.
The Group additionally holds shares in an unlisted company which
were valued at GBP2,656,000 at 30 June 2020. Previously this
investment was presented within car park activities as a
non-current investment. This investment has been re-classified
outside of car park activities and presented the investment
together with the Group's listed investment, the investment remains
in non-current assets.
The prior year comparatives have been restated to:
-- Decrease current investments in the Consolidated balance
sheet by GBP5,871,000 at 1 July 2019 and 3,508,000 at 30 June
2020
-- Decrease non-current investments (car park activities) in the
Consolidated balance sheet by GBP2,510,000 at 1 July 2019 and
GBP2,656,000 at 30 June 2020
-- Increase non-current investments in the Consolidated balance
sheet by GBP8,381,000 at 1 July 2019 and GBP6,164,000 at 30 June
2020.
The adjustment has no overall effect on the total net assets of
the Group at 30 June 2020 or on the Group's loss for the year ended
30 June 2020.
The above restatements do not have any tax implications as the
Group's activities are tax exempt due to its REIT status.
The impact on the Balance Sheet as at 30 June 2020 is as
follows:
2020 (1) (2) (4) (6) 2020
Previously Car parking Leasehold Sinking Listed Restated
reported assets properties fund investments
provision
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Non-current assets
Property rental
Investment properties 280,914 (26,900) - - - 254,014
Investments in joint
ventures 13,751 - - - - 13,751
294,665 (26,900) - - - 267,765
----------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Car park activities
Freehold and leasehold
properties 50,159 26,900 (546) - - 76,513
Goodwill and intangible
assets 4,024 - - - - 4,024
Investments 2,656 - - - (2,656) -
56,839 26,900 (546) - (2,656) 80,537
----------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Fixtures, equipment
and motor vehicles 1,113 - - - - 1,113
Investments - - - - 6,164 6,164
----------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Total non-current assets 352,617 - (546) - 3,508 355,579
----------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Current assets
Investments 3,508 - - - (3,508) -
Assets held for sale 23,199 - - - - 23,199
Trade and other receivables 3,468 - - - - 3,468
Cash and cash equivalents 12,643 - - - - 12,643
----------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Total current assets 42,818 - - - (3,508) 39,310
----------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Total assets 395,435 - (546) - - 394,889
----------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Current liabilities
Trade and other payables (23,382) - - 146 - (23,236)
Financial liabilities (61,984) - - - - (61,984)
Total current liabilities (85,366) - - 146 - (85,220)
----------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Non-current liabilities
Financial liabilities (154,591) - - - - (154,591)
----------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Total liabilities (239,957) - - 146 - (239,811)
----------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Net assets 155,478 - (546) 146 - 155,078
----------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Equity attributable
to the owners of the
Parent
Called up share capital 13,290 - - - - 13,290
Share premium account 200 - - - - 200
Capital redemption
reserve 559 - - - - 559
Revaluation reserve 750 - (250) - - 500
Retained earnings 140,679 - (296) 146 - 140,529
----------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Total equity 155,478 - (546) 146 - 155,078
----------------------------- ------------ ------------- ------------ ----------- ------------- ----------
The impact on the Balance Sheet as at 30 June 2019 is as
follows:
2019 (1) (2) (3) (4) 2019
Previously Car parking Leasehold Sinking Listed Restated
reported assets properties fund investments
provision
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Non-current assets
Property rental
Investment properties 324,500 (27,200) - - - 297,300
Investments in joint
ventures 13,387 - - - - 13,387
337,887 (27,200) - - - 310,687
--------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Car park activities
Freehold and leasehold
properties 24,194 27,200 (584) - - 50,810
Goodwill and intangible
assets 4,024 - - - - 4,024
Investments 2,510 - - - (2,510) -
30,728 27,200 (584) - (2,510) 54,834
--------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Fixtures, equipment
and motor vehicles 1,609 - - - - 1,609
Investments - - - - 8,381 8,381
--------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Total non-current
assets 370,224 - (584) - 5,871 375,511
--------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Current assets
Investments 5,871 - - - (5,871) -
Assets held for - - - - - -
sale
Trade and other
receivables 5,354 - - - - 5,354
Cash and cash equivalents 23,692 - - - - 23,692
--------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Total current assets 34,917 - - - (5,871) 29,046
--------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Total assets 405,141 - (584) - - 404,557
--------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Current liabilities
Trade and other
payables (34,739) - - 146 - (34,593)
Financial liabilities - - - - - -
Total current liabilities (34,739) - - 146 - (34,593)
--------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Non-current liabilities
Financial liabilities (182,152) - - - - (182,152)
--------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Total liabilities (216,891) - - 146 - (216,745)
--------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Net assets 188,250 - (584) 146 - 187,812
--------------------------- ------------ ------------ ------------- ----------
Equity attributable
to the owners of
the Parent
Called up share
capital 13,290 - - - - 13,290
Share premium account 200 - - - - 200
Capital redemption
reserve 559 - - - - 559
Revaluation reserve 250 - (250) - - -
Retained earnings 173,951 - (334) 146 - 173,763
--------------------------- ------------ ------------- ------------ ----------- ------------- ----------
Total equity 188,250 - (584) 146 - 187,812
--------------------------- ------------ ------------- ------------ ----------- ------------- ----------
The impact on the income statement is as follows:
2020 (1) (2) 2020
Previously Car parking Leasehold Restated
reported assets properties
GBP000 GBP000 GBP000 GBP000
------------
Gross revenue 27,989 - - 27,989
Provision for impairment of
debtors (1,478) - - (1,478)
Service charge income 2,803 - - 2,803
Service charge expenses (4,011) - - (4,011)
Property expenses (9,244) (285) (141) (9,670)
------------
Net revenue 16,059 (285) (141) 15,633
Administrative expenses (6,197) - - (6,197)
Other income 1,218 - - 1,218
Other expenses (777) - - (777)
Valuation movement on investment
properties (26,324) 300 - (26,024)
Impairment of car parking
assets 250 (15) 179 414
Profit on disposal of investment
properties 168 - - 168
Share of post-tax profits
from joint ventures 450 - - 450
Operating loss (15,153) - 38 (15,115)
Finance costs (9,009) - - (9,009)
Loss before taxation (24,162) - 38 (24,124)
Taxation - - - -
------------
Loss for the year attributable
to owners of the Parent (24,162) - 38 (24,124)
The impact on the cash flow statement is as follows:
2020 (1) (2)
Previously Car parking Leasehold 2020
reported assets properties Restated
GBP000 GBP000 GBP000 GBP000
Loss for the financial year (24,162) - 38 (24,124)
Adjustments for:
Depreciation 1,920 285 141 2,346
Profit on disposal of investment
properties (168) - - (168)
Finance costs 9,009 - - 9,009
Share of post tax profits from
joint ventures (450) - - (450)
Movement in valuation of investment
and development properties 26,324 (300) - 26,024
Movement in lease incentives 279 - - 279
Impairment of car parking assets (250) 15 (179) (414)
Decrease in receivables 1,097 - - 1,097
Increase in payables 834 - - 834
Cash generated from operations 14,433 - - 14,433
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END
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(END) Dow Jones Newswires
December 01, 2021 05:44 ET (10:44 GMT)
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