One Heritage Group plc (OHG)
One Heritage Group plc: Interim Results
25-March-2021 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014
(MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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ONE HERITAGE GROUP PLC
(the "Company" or "One Heritage")
Interim report for
the six months ended
31 December 2020
25 March 2021
One Heritage Group PLC (LSE: OHG), the UK-based residential developer focused on the North West of England, is pleased
to announce its interim results for the six months ended 31 December 2020.
Operating highlights
? Successfully listed on the Standard List of the London Stock Exchange on 23 December 2020, raising gross proceeds
of GBP930,000.
? Restructured the Group in advance of listing, which included the disposal of two assets and the conversion of GBP2.75
million in shareholder funding into equity.
? Acquired 2 developments, Oscar House, Manchester and Bank Street, Sheffield for GBP1.2 million and GBP0.8 million,
respectively.
? The Group appointed two independent non-executive directors, Mr David Izett as Chairman, and Mr Jeff Pym, and
expanded the Executive Management Team with the appointment of Luke Piggin as Finance Director and Martin Crews as
Development Director.
Financial highlights
? The Group reports a net asset value of GBP2.8million, 9.25p per share, in its first reporting period following the
listing.
? Reports a loss for the period of GBP226,986 as the Group invested in its infrastructure for future growth while
progressing existing developments, which are expected to complete and generate profits in the next financial year.
? Agreed an increase in its GBP5.0 million loan facility with its majority shareholder to GBP7.5 million to support
future acquisitions.
Subsequent Events
? Successful placing and subscription of 1.83m ordinary shares, announced on 18 February 2021, raising gross proceeds
of GBP548,500.
? Contracts exchanged for the purchase of Plus House, Stockport, for GBP725,000, with expected completion of the
purchase on 31 March 2021.
CHIEF EXECUTIVE'S REVIEW
I am very pleased with the way the Group has performed in the execution of our strategy during the period under review.
Given the backdrop of Covid-19 and economic lockdowns, this has been a challenging period. Nevertheless, we have
demonstrated resilience and the ability to adapt, diversifying the business and growing the pipeline of opportunities.
This, I believe, is testament to the quality of the team we have assembled and bodes well for our future.
Looking back over the period under review, I set out below six strategic objectives and our progress to date against
each one.
1. Listing on the London Stock Exchange
We made the decision to apply for a standard listing on the main market of the London Stock Exchange to provide the
Group with access to the capital markets in order to better scale the business for future growth.
Our listing was successfully achieved on 23 December 2020, the last listing of the calendar year, when we raised
GBP930,000 through the issue of 9.3m ordinary shares for 31% of the share capital of the company. In response to investor
demand and an increased number of profitable opportunities presented to us, we followed up with a further raise in
February 2021 of GBP548,000 through a placing and subscription of 1.83m ordinary shares, representing 5.7% of the
post-raise shares in issue.
2. Establish a strong business infrastructure
We established a strong internal governance regime over the period under review, as outlined in our corporate
governance statement, and appointed Mr David Izett and Mr Jeffery Pym as Independent Non-Executive Directors, the
former as Chair of the Board and the latter as Chair of the audit and risk committee. David and Jeff bring exceptional
experience and complementary skills to the Board.
Changes were made to restructure the Group's subsidiary companies resulting in One Heritage Tower Limited and Harley
Street Developments Limited moving outside of the Group and in so doing establishing a clear strategic focus prior to
our listing. The Group continues to have an interest in these entities through a development management agreement,
which earns management fees and a share of profits on completion.
3. Recruitment in key positions
As part of our efforts to scale the business for the future, we were pleased to announce the appointment of Mr Luke
Piggin as Finance Director and Mr Martin Crews as Development Director. During the six months to 31 December 2020, we
also employed six additional staff and a further two staff members have joined post-calendar year end. As such, I
believe that we are building an outstanding team to enable us to execute our growth plans.
4. Secure development opportunities and build a pipeline of opportunities
We continued to see many exciting development opportunities during the period under review and acquired two new
development projects; Chester Road, Manchester and Bank Street, Sheffield. We made a further acquisition in February
2021, Plus House, Stockport, bringing the total number of development projects within the Group to five. This increased
the development pipeline to 169 residential units providing high quality self-contained accommodation and two
commercial units.
Our development activity progressed further with construction of our two development management projects, One Heritage
Tower and the Former Oldham County Court, both expected to start in the coming months.
5. Expand our Co-Living and Property Management operations
In March 2020 we took the first steps towards entering the letting and property management markets by acquiring a 47%
share in a property management company, which we subsequently rebranded as 'One Heritage Complete' and its sub brands
'One Heritage Letting', 'One Heritage Maintenance', 'One Heritage Design' and 'One Heritage Cleaning'. This provided
the Group with a core lettings and management infrastructure and expertise to complement our expansion plans. This
subsidiary is performing well and has opened two new offices adding 129 tenants under management, 42 new refurbishment
projects (an 110% increase over the previous 6 months) and has employed an additional 26 staff.
The Group has received monthly dividends from One Heritage Complete which we expect to continue throughout 2021 as
Co-living properties under management and properties under refurbishment continue to increase.
6. Expand our sales and marketing network abroad
Our developments are now being marketed through sales teams in Hong Kong, part of the wider One Heritage network, which
has already generated positive interest. We expect marketing and sales activity to increase over the coming months as
sites continue to progress, with sales teams overseas commencing activity upon our achieving project milestones, such
as the grant of planning permission being achieved. Teams in Hong Kong also continue to provide a sales function for
Co-living properties being sourced and refurbished by One Heritage Complete. The network in Asia also provides further
opportunities for the Group beyond selling our properties, for example, additional income from rental guarantees, as we
outlined in our prospectus, and consultancy services to source and facilitate UK property purchases.
Whilst the Hong Kong sales network provides a key sales conduit for our property, we are also engaging with other
potential purchasers including local registered housing providers which offer affordable housing. We are also marketing
units locally and to new overseas markets.
Covid-19 impact and response
With the property and construction industries remaining mostly open during the pandemic, we are confident that our
business will be largely unaffected during 2021 as we continue to operate at close to full capacity. We have, however,
seen some delays as other elements of the market have adapted differently. Specifically, we have seen the planning
process slow down as local authority planning teams adapt to remote working during the pandemic. This has resulted in
the Group having to adjust its development schedules.
Internally, we have mobilised our own team to work remotely when required and performance has largely been unaffected
throughout. Progress with projects has continued to be made and new opportunities have been acted upon.
Our Co-living properties, under the management of One Heritage Letting, have continued to experience strong demand.
This will support and grow the dividends we receive from One Heritage Complete. This strong demand for our Co-living
product is in spite of social distancing, which we believe will continue to remain a feature of everyday life for the
foreseeable future, and demonstrates the strong demand for Co-living. Our properties under management comprise mainly
four or five rooms, which offer affordable accommodation that fills a major gap in the market. Key workers and young
professionals remain our most dominant tenant type for Co-living properties and with room rates averaging GBP100 per
week, including council tax and utility bills, they provide an attractive and value-for-money product.
Outlook
We remain positive for the outlook of the property market and welcome the Government's latest efforts at 'levelling-up'
the Country. In particular, the Government has included Bolton in the list of areas that will receive support from The
Towns Fund and there continues to be an undersupply of quality housing in the North West, evidenced by the relative
outperformance of the region in terms of both rental and property price growth.
Furthermore, despite the pandemic and economic lockdown, we have not seen a drop in demand from overseas investors for
our properties, due we believe to the good rental yields they provide and their prospects for capital growth. We are
optimistic that performance and demand will remain strong as the economy returns to growth and savings, accumulated by
the public during the lockdowns, are utilised. Our network in Hong Kong is well positioned to execute sales over the
coming months and we are expecting a strong year for reservations and sales.
We have set clear strategic priorities for the Group for the forthcoming period. These are to:
? Successfully deliver our development projects;
? Secure sales for our properties under construction;
? Continue to build our existing letting and property management businesses through our focus on Co-living and newly
completed developments;
? Recruit exceptional talent as we identify new opportunities in the market and take on new projects;
? Grow the pipeline of new development opportunities.
With the Group's developments all in their infancy, we are not expecting any of our projects to be completed until Q4
2021 at the earliest, so our core strategic focus for 2021 is to make as much progress as we can with each development
programme. As were able to recruit in key positions during 2020, the team is well placed to execute the delivery of
these projects. The easing of national lockdown restrictions over the next few months will add to our increasing
enthusiasm and confidence as we work on our projects for the remainder of the year.
In the prospectus, we reported on specific costs, development values and timelines for developments. Since then, we
have made substantial progress on all our developments and report that the only material change is at Lincoln House,
Bolton, where, in line with our mission to deliver high quality accommodation, we have recently decided to adjust the
specification, by completely replacing the cladding. We expect the cost of the Lincoln House development to increase by
GBP0.9 million on what we previously reported.
Below is a summary of our existing developments:
Units Expected
Development City Gross development value (GBPm)
Residential Commercial Completion
Lincoln House, Bolton Bolton 88 - 9.1 Dec '21 - Mar '22
Churchgate, Leicester Leicester 17 2 2.8 Jun '22 - Sep '22
Oscar House, Chester Road Manchester 27 - 6.1 Dec '21 - Mar '22
Bank Street Sheffield 22 - 3.6 Dec '21 - Mar '22
Plus House, St Petersgate Stockport 15 - 2.3 Mar '22 - Jun '22
169 2 23.9
With our developments moving towards completion at the end of
the calendar year and the increasing demand we are seeing for
Co-living accommodation, we are expecting our lettings and property
management business to continue to perform well during 2021. In the
coming months over 180 new rooms in the 37 Co-living properties
under refurbishment will be marketed to let, which will fuel
further growth for One Heritage Letting. Our developments will also
provide 169 self-contained apartments which will be available to
let from Q4 2021 onwards. Further work is being undertaken over the
coming months to establish our block management and letting
strategy to be executed at the end of 2021 as developments
complete.
FINANCE REVIEW
The Group saw several significant events during the six-month
period to 31 December 2020: ? The initial public offering of One
Heritage Group PLC on the standard list of the London Stock
Exchange, which
raised gross proceeds of GBP930,000; ? Acquisition of the
Chester Road, Manchester and Bank Street, Sheffield developments
for GBP1.2 million and GBP0.8
million, respectively; and ? The restructuring of the Group in
preparation for the Listing, which involved the disposal of
non-core
subsidiaries, One Heritage Tower and Harley Street Developments,
the conversion of GBP2.75 million of shareholder
loan between One Heritage Property Development Limited and One
Heritage Property (UK) Limited into equity, and, the
reverse acquisition by One Heritage Property Development (UK)
Limited of One Heritage Group PLC on 21 October 2020
(See Note 2 to the Financial Statements for further
details).
Following the end of the interim reporting period the Group
raised a further GBP0.55 million in a placing and subscription of
1.83 million ordinary shares and subsequently exchanged on the
acquisition of Plus House, Stockport for GBP725,000. In conjunction
with this transaction, the Group also secured a GBP2.5 million
increase in the loan facility with our majority shareholder, to
GBP7.5 million.
The restructuring of the business, which involved the disposal
of Harley Street Developments Limited and One Heritage Tower
Limited, was undertaken to remove entities that were not seen as
part of the core internal development strategy of the Group going
forward. This resulted in assets totalling GBP15.5 million (net
asset value of GBP16,035) coming out of the Group. The Group
subsequently entered into a profit participation and development
management agreement with these entities.
Profit and loss key highlights
During the six-month period to 31 December 2020 the Group
generated revenue of GBP191,127 (31 December 2019: GBP4,919), which
was split between Co-living profit participation (GBP142,613),
development management fees (GBP44,992) and rental income
(GBP3,522) from properties owned by Harley Street Developments
Limited prior to its disposal. The revenue from Co-living was
generated through our profit participation agreements with related
entities and arose from the sale of 23 properties, 6 of which were
sold in December 2020 (30 June 2020: nil).
The Group also generated a further GBP53,330 (30 June 2020: nil)
of profit through its associate, One Heritage Complete, of which
GBP26,423 was distributed as a dividend. Of this profit, GBP14,419
was generated in December and reflects that activity is gradually
building as more refurbishments are undertaken and the letting
portfolio increases.
The development management fees are generated through our
agreement with One Heritage Tower Limited and are based on 0.75%
per month of the current costs. The Group does not expect to
generate any development profits until the developments are
completed in the next financial year.
The administration costs of GBP401,241 (31 December 2019:
GBP154,996) reflect the increasing number of employees, averaging
11 during the period (31 December 2019: 3) and professional fees
increasing as the Group grows. The Group had 14 employees at the
period end and employed a further 2 employees post period end.
Overall, the group generated a loss of GBP226,986 (31 December
2019: loss of GBP157,532) during the period and as a consequence
does not proposed to pay a dividend for the period.
Balance sheet key highlights
The total assets of the Group contracted to GBP7.4 million (30
June 2020: GBP18.1 million) with the Group disposing of the One
Heritage Tower Limited (GBP14.7 million at the date of disposal),
and Harley Street Developments Limited (GBP0.8 million at the date
of disposal) and acquiring Oscar House, Manchester though the
corporate acquisition of Generation 100 Limited for GBP1.2 million
and the asset acquisition of Bank Street, Sheffield for GBP0.8
million.
Removing the impact of the restructuring, the Group has
continued to grow the stock of developments in the business, with
development inventory totalling GBP4.0 million (30 June 2020:
GBP14.7 million). The inventory is broken out below:
As at As at
GBP
31 December 2021 30 June 2020
Lincoln House, Bolton 1,650,031 1,327,182
Churchgate, Leicester 131,235 52,280
Oscar House, Manchester 1,303,651 -
Bank Street, Sheffield 898,242 -
One Heritage Tower, Manchester - 13,350,165
3,983,159 14,729,627
Under the terms of the profit participation agreements the Group
has advanced a net amount of GBP1.7 million of funds to Robin Hood
Property Developments, Mosley Property and Harley Street
Developments. These agreements entitle the Group to 15.0% of the
profit from Co-living sales.
Capital management
The Group had GBP375,148 (30 June 2020: GBP711,798) of cash and
cash equivalents at the period end with GBP5.0 million of available
shareholder facility. This facility was extended to GBP7.5 million
post period end through a deed of variation in February 2021 as
part of the acquisition of Plus House, Stockport.
The GBP770,000 bridging loan with PMJ Capital that expired in
February 2021 has been extended for another 3 months to May 2021.
The remaining borrowing relates to the lease liability for the head
office of the Group as a right of use asset.
RISK MANAGEMENT AND PRINCIPAL RISKS
During the six months to 31 December 2020 businesses across the
economy have had to contend with extremely challenging conditions
in which to operate, with the related inherent uncertainty likely
to continue for a considerable period during the current year, if
not beyond.
One Heritage Group will continue to be exposed to the
uncertainty arising from macro risks, which affect the wider
economy and influence the operational risks to which the Group is
exposed. These macro risks are outside of the control of the Group,
but it can adopt mitigating strategies to address the operational
risks that arise from the macro environment.
While it is not possible to predict events, the Board and the
management team are confident that they have mapped out a range of
risks and identified sufficient strategies to mitigate those risks
where possible. Management has been pleased with how the business
has adapted to the constant changes throughout the last six months
and believe the Group remains agile enough to adjust to future
changes.
Below is a summary of the key macro and operational risks for
the second half of the year. These risks should be taken in
conjunction with the risks set out in the Prospectus, which can be
found on the Company's website.
Key risks
Covid-19 and BREXIT: The two key macro risks that will affect
One Heritage Group during the next six months continue to be the
impact of Covid-19 and the new arrangements between the United
Kingdom ("UK") and the European Union ("EU"), with the UK having
exited the transition period and signed a trade agreement with the
EU that was enacted at the end of the calendar year.
There remains significant uncertainty in the future economic
outlook for the UK in the next six months, which make it more
difficult than normal to predict the performance of the economy
which ultimately may impact the returns on the Group's developments
and the ability for tenants to pay rents for Co-living
accommodation. The Group is constantly reviewing economic data and
will use its agile structure to move quickly to mitigate such risks
and where possible to take advantage of any changes in the
market.
Residential property demand: The UK Government cut stamp duty at
the start of the pandemic on properties below GBP500,000. This has
been extended in the latest budget to the end of June 2021.
Empirical evidence suggests that transaction volumes will decline
significantly when the stamp duty reduction is reversed, which may
result in a decline in demand for residential property for sales.
To counter this, the Government has also introduced new budget
measures to extend the Help to Buy scheme and support for higher
loan-to-value mortgages, both are supportive of demand.
As the Group focuses on the residential property investment
market, with sales to overseas buyers that are typically driven by
investment yields, the Group's business model is less sensitive to
changes in residential property values but is more sensitive to
rental levels as a result. The Company has welcomed the Governments
latest increase in minimum wage and extension of the furlough
scheme which should help mitigate the impact of the pandemic on
those at lower income levels and support the rental market.
Availability and cost of finance: To enhance risk adjusted
returns, the Group is intending to raise external debt finance, and
thus the availability and cost of finance will impact the returns
of the Group. The speed of recovery from the economic downturn in
2020 remains uncertain and is likely to result in interest rates
remaining at their current low levels for an extended period of
time. However, debt providers may adopt a more cautious approach to
lending if the expected economic recovery does not materialise,
limiting the availability of debt. Whilst the Group continues to
explore different debt sources to diversify its supply of finance,
the availability of debt will not prevent the Group from being able
to complete its existing development pipeline, although this may
take longer than currently planned.
Regulatory environment: There are two key regulatory areas that
may impact the Group. Firstly, how it will approach the planning
system to facilitate greater levels of residential property
development whilst addressing safety concerns arising from issues
such as the Grenfell Tower disaster and the continued use of
cladding materials, while also meeting its commitments to climate
change. The second issue is where significant delays are being
experienced across local authorities, particularly with planning
applications, due to the pandemic, with delays likely to continue
beyond the lifting of Covid-19 restrictions.
To address these issues, the Group continues to review the
latest white papers from the Government and liaises regularly with
local officials to understand where and when changes may occur. The
Group has also recruited in-house planning expertise to work
closely with contractors to ensure that delays from planning can be
mitigated through efficiencies elsewhere in the construction
process.
Construction costs and timescales: Throughout the Covid-19
pandemic, the construction sector has experienced delays in the
delivery of construction materials, with reduced levels of
availability also leading to cost inflation. Furthermore, there is
a risk that the UK's access to skilled foreign labour may decline
following exit from the EU, leading to labour shortages and labour
cost inflation. Reduced levels of labour and materials may also
delay the completion of construction projects.
To mitigate such risks, the Group appoints contractors that have
an established work force and strong sub-contractor relationships.
The Group is proactive in working with construction companies to
ensure they have sufficient time to plan resource levels and that
development appraisals have sufficient contingency to cover the
risk of cost inflation and extended construction periods.
Human Resources: The Board expect the business to continue its
growth, which will require increased levels of staffing. The
ability to recruit sufficiently experienced and qualified staff on
a timely basis will remain a challenge. The Group continues to
monitor growth forecasts in order to plan future resource
requirements, allowing a sufficient lead in period during which
recruitment can be implemented. The Group is also committed to
retaining existing staff through the provision of training and
support to ensure staff and Directors develop the appropriate
skills and experience. The Group also maintains regular contact
with real estate recruitment specialists to ensure they are able to
employ the best staff available.
RESULTS PRESENTATION AND CONFERENCE CALL
A presentation of the results will be broadcast via Investor
Meet Company and the slides accompanying the call will be displayed
along with the live video at 17:00 BST on 31 March 2021.
The presentation is open to all existing and potential
shareholders. Questions can be submitted pre-event via your
Investor Meet Company dashboard up until 9am the day before the
meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add
to meet ONE HERITAGE GROUP PLC via:
https://www.investormeetcompany.com/one-heritage-group-plc/register-investor
Investors who already follow ONE HERITAGE GROUP PLC on the
Investor Meet Company platform will automatically be invited.
For information contact
Investor relations
Jason Upton
Chief Executive Officer
Email: jason.upton@one-heritage.com
Luke Piggin
Finance Director
Email: luke.piggin@one-heritage.com
Hybridan LLP (Financial Adviser and Broker)
Claire Louise Noyce
Email: claire.noyce@hybridan.com
Tel: +44 (0)203 764 2341
STATEMENT OF DIRECTOR'S RESPONSIBILITIES
in respect of the interim financial report
We confirm that to the best of our knowledge: ? the condensed
set of financial statements has been prepared in accordance with
IAS 34 Interim Financial Reporting
adopted pursuant to Regulation (EC) No 1606/2002 as it applies
in the European Union; ? the interim management report includes a
fair review of the information required by: ? DTR 4.2.7R of the
Disclosure Guidance and Transparency Rules, being an indication of
important events that have
occurred during the first six months of the financial year and
their impact on the condensed set of financial
statements; and a description of the principal risks and
uncertainties for the remaining six months of the year;
and ? DTR 4.2.8R of the Disclosure Guidance and Transparency
Rules, being related party transactions that have taken
place in the first six months of the current financial year and
that have materially affected the financial
position or performance of the entity during that period; and
any changes in the related party transactions
described in the last annual report that could do so.
The directors of One Heritage Group PLC are listed on the
company website, www.oneheritageplc.com
By order of the Board
Jason Upton
Chief Executive Officer
24 March 2021
INDEPENT REVIEW REPORT TO ONE HERITAGE GROUP PLC
Report on the interim financial statements
Conclusion
We have been engaged by the company to review the condensed set
of financial statements in the half yearly financial report for the
six months ended 31 December 2020 which comprises the consolidated
statements of comprehensive income, financial position, changes in
equity and cash flows and the related explanatory notes.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half yearly financial report for the six months ended 31
December 2020 is not prepared, in all material respects, in
accordance with IAS 34 Interim Financial Reporting adopted pursuant
to Regulation (EC) No 1606/ 2002 as it applies in the European
Union and the Disclosure Guidance and Transparency Rules ("the
DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. We read the other information contained in the
half-yearly financial report and consider whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Directors' responsibilities
The half yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in note 3, this the first reporting period for the
company. The first annual financial statements, which will be for
the year ended 30 June 2021, will be prepared in accordance with
International Financial Reporting Standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union
and in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006. The
directors are responsible for preparing the condensed set of
financial statements included in the half yearly financial report
in accordance with IAS 34 adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the company in accordance with the
terms of our engagement to assist the company in meeting the
requirements of the DTR of the UK FCA. Our review has been
undertaken so that we might state to the company those matters we
are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the company for our
review work, for this report, or for the conclusions we have
reached.
Edward Houghton BA FCA
for and on behalf of KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man
24 March 2021
FINANCIAL STATEMENTS
Consolidated statement of comprehensive income
For the six months ended 31 December 2020
Six months to Six months to
31 December 31 December
GBP unless stated Notes
2020 2019
Unaudited Unaudited
Revenue - Development management 6 44,992 -
Revenue - Rental income 6 3,522 4,919
Revenue - Co-living 6 142,613 -
Cost of sales - Co-living (26,400) -
116,213
Gross profit - Co-living -
Share of profits from associate 13 53,330 -
Other income 5,460 -
Administration expenses (401,241) (154,995)
Other expenses (26,762) (4,963)
(204,486)
Operating (loss) (155,041)
Profit on disposal of subsidiary 5 26,423 -
Finance expense 8 (48,923) (2,469)
(226,986)
(Loss) before taxation (157,510)
-
Taxation 9 -
(226,986)
(Loss) after taxation (157,510)
Other comprehensive income - (22)
COMPREHENSIVE INCOME attributable to shareholders (226,986) (157,532)
Weighted average shares in issued over the period 21,061,667 20,700,000
(Loss) per share (GBp) (1.1) (0.8)
Diluted (loss) per share (GBp) (1.1) (0.8)
Consolidated statement of financial position
As at 31 December 2020
As at
As at
30 June
GBP unless stated Notes 31 December 2020
2020
Unaudited
Unaudited
ASSETS
Non-current assets
Property, plant and equipment 10 149,191 165,301
Associate 13 285,459 258,512
434,650 423,813
Current assets
Cash and cash equivalents 375,148 711,798
Inventory - developments 11 3,983,159 14,729,627
Inventory - trading property 12 422,574 1,179,657
Financial assets through profit or loss 14 1,966,163 897,002
Trade and other receivables 15 229,065 132,622
6,976,109 17,650,706
TOTAL ASSETS 7,410,759 18,074,519
LIABILITIES
Non-current liabilities
Borrowings 16 2,238,321 4,117,403
2,238,321 4,117,403
Current liabilities
Trade and other payables 18 426,735 666,014
Borrowings 16 1,970,830 13,665,762
2,397,565 14,331,776
TOTAL LIABILITIES 4,635,886 18,449,179
EQUITY
Share capital 21 300,000 -
Share premium 21 3,076,519 -
Retained earnings (601,646) (374,660)
TOTAL EQUITY 2,774,873 (374,660)
TOTAL LIABILITIES AND EQUITY 7,410,759 18,074,519
Shares in issue 30,000,000 -
Net asset value per share (GBp) 9.25 -
Consolidated statement of cash flows
For the six months ended 31 December 2020
Six months to Six months to
31 December 31 December
GBP unless stated Notes
2020 2019
Unaudited Unaudited
Cash flows from operating activities
Loss for the period before tax (226,986) (157,510)
Adjustments for:
Share of profit in associate 13 (53,330) -
Finance expense 48,923 2,469
Profit on disposal of subsidiary (26,423) -
Depreciation of property, plant and equipment 10 20,759 14,855
Movement in working capital:
Increase in trade and other receivables (5,910) (11,037)
Increase in inventories (2,456,783) (2,071,322)
(Decrease)/increase in trade and other payables (393,020) 95,066
Cash from operations (3,092,770) (2,127,479)
Income taxation paid - -
Dividend received from associate 13 26,383 -
Net cash used in operating activities (3,066,387) (2,127,479)
Cash flows from investing activities
Disposal of subsidiaries, net of cash (66,030) -
Purchases of property, plant and equipment 10 (4,649) (46,101)
Net cash used in investing activities (70,679) (46,101)
Financing cash flows
Issue of share capital 930,000 -
Cost of share issue (303,581) -
Interest paid 8 (265,362) -
Proceeds of related party borrowing 2,451,057 2,118,014
Payments made in relation to lease liabilities 17 (11,698) (6,724)
Net cash generated from financing activities 2,800,416 2,111,290
Net change in cash and cash equivalents (336,650) (62,290)
Opening cash and cash equivalents 711,798 477,986
Closing cash and cash equivalents 375,148 415,696
The Trading Group undertook a debt for equity transaction in the
six-month period to 31 December 2020, for GBP2,750,000. This is not
reflected in the above cash flow statement. See Note 2.
Consolidated statement of changes in equity
For the six months ended to 31 December 2020
Share Share Total
GBP Retained earnings
capital premium Equity
Balance at 01 July 2020 - - (374,660) (374,660)
Loss for the period - - (226,986) (226,986)
Other comprehensive income for the period - - - -
Total comprehensive income for the period - - (226,986) (226,986)
Issue of share capital 300,000 3,380,100 - 3,680,100
Cost of share issue - (303,581) - (303,581)
Balance at 31 December 2020 300,000 3,076,519 (601,646) 2,774,873
For the six months ended to 30 June 2020
Share Share Total
GBP Retained earnings
Capital premium Equity
Balance at 01 January 2020 - - (158,491) (158,491)
Loss for the period - - (216,169) (216,169)
Other comprehensive income for the period - - - -
Total comprehensive income for the period - - (216,169) (216,169)
Issue of share capital - - - -
Balance at 30 June 2020 - - (374,660) (374,660)
For the six months ended to 31 December 2019
Share Share Total
GBP Retained earnings
Capital premium Equity
Balance at 01 July 2019 - - (959) (959)
Loss for the period - - (157,510) (157,510)
Other comprehensive income for the period - - (22) (22)
Total comprehensive income for the period - - (158,532) (158,532)
Issue of share capital - - - -
Balance at 31 December 2019 - - (158,491) (158,491)
Notes to the interim financial statements
For the six months ended to 31 December 2020 1. Reporting
entity
One Heritage Group PLC (the "Company") is a public limited
company, limited by shares, incorporated in England and Wales under
the Companies Act 2006. The address of its registered office and
its principal place of trading is 80 Mosley Street, Manchester, M2
3FX. The principal activity of the company is that of property
development.
These condensed consolidated interim financial statements
("interim financial statements") as at the end of the six month
period to 31 December 2020 comprise of the Company and its
subsidiaries. A full list of companies consolidated in these
interim financial statements can be found in Note 24 Disclosures
relating to subsidiary undertakings. 2. Group restructuring
A group restructuring exercise was carried out during the period
as follows: ? On 12 October 2020 (effective on 31 August 2020), One
Heritage Property Maintenance Limited, One Heritage Tower
Limited and Harley Street Developments Limited were transferred
from One Heritage Property Developments (UK)
Limited to One Heritage Property Developments Limited via a
share purchase arrangement. A net profit of GBP34,419 was
realised on disposal; ? On 14 October 2020 GBP2,750,000 of
shareholder loan was converted into 20,699,900 ordinary shares in
One Heritage
Property Development (UK) Limited; and, ? On 27 October 2020 One
Heritage Property Development (UK) Limited (the "Trading Group")
was acquired by One
Heritage Group PLC. The Trading Group and the Company were under
common control by One Heritage Property
Development Limited at the time of the transaction.
The acquisition by the Company of the Trading Group is a common
control transaction under IFRS 3. The consolidation of this Group
has been prepared using the merger method. In the statement of
financial position, the acquiree's identifiable assets, liabilities
are recognised at their book values at the acquisition date. The
results of merged operations following the Group's restructure in
the period are included in the consolidated statement of
comprehensive income as if the Group has always existed.
Comparative figures are provided on the basis that the merged group
always existed. 3. Basis of preparation
This condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting adopted pursuant
to Regulation (EC) No 1606/2002 as it applies in the European
Union.
This is the first reporting period, as the Company was
incorporated on 21 July 2020. The first annual financial statements
of the Company, which will be for the period ended 30 June 2021,
will be prepared in accordance with International Financial
Reporting Standards (IFRSs) adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union and in accordance
with international accounting standards in conformity with the
requirements of the Companies Act 2006. The significant accounting
policies are set out below. The accounting policies used are
consistent with those contained in prior periods to date.
The Group's management review the business as a whole, while it
remains in its early stage of development. The Group therefore does
not provide segmentation.
Going concern
The Directors are satisfied that the Group and Company has
adequate resources to continue in operational existence for a
period of at least 12 months from the date of approval of the
financial statements and for this reason the consolidated financial
statements have been prepared on a going concern basis.
In preparing forecast cashflow information the group has
considered the losses incurred, the financial position of the Group
and the availability of resources, principally supplemented by the
loan facility extension provided by One Heritage Property
Development Limited post year end (refer note 23).
Use of judgements and estimation uncertainty
The board has made judgements, estimates and assumptions that
affect the application of the Group's accounting policies and the
reported amounts in the financial statements. The directors
continually evaluate these judgements and estimates in relation to
assets, liabilities, contingent liabilities, revenue and expenses
based upon historical experience and on other factors that they
believe to be reasonable under the circumstances. Actual results
may differ from the judgements, estimates and assumptions.
The key areas of judgement and estimation are: ? When to
recognise revenue relating to the sales of Co-living property: Once
a sale agreement contract is negotiated
and a sale of property is agreed, the group assesses whether
control is transferred at a point in time or over
time. The judgement is based on the terms and conditions of the
sale agreement. ? When to recognise a deferred tax asset: The
Group's income tax charge and its provisions for income taxes
necessarily involve a degree of estimation and judgement. The
tax treatment of some transactions is uncertain and
tax computations are yet to be agreed with the tax authorities.
The Group recognises anticipated tax assets based
on all available evidence and, where appropriate, in the light
of external advice. Any difference between the final
outcome and the amounts provided will affect current and
deferred income tax charges in the period when the matter
is resolved. ? The carrying value of inventory: Under IAS 2:
Inventories the Group must hold developments at the lower of cost
and
net realisable value. The Group applies judgement to determine
the net realisable value of developments at a point
in time that is partly developed and compares that to the
carrying value. The Group have determined that all of the
current developments should be held at cost. 4. Significant
accounting policies
Business Combinations (not resulting from group
restructuring)
The Group applies the acquisition method in accounting for
business combinations. The consideration transferred by the Group
to obtain control of a subsidiary is calculated as the sum of the
acquisition-date fair values of assets transferred, liabilities
incurred and the equity interests issued by the Group, which
includes the fair value of any asset or liability arising from a
contingent consideration arrangement.
Assets acquired and liabilities assumed are generally measured
at their acquisition-date fair values.
Associates are all entities over which the Group has significant
influence but not control or joint control. This is generally the
case where the group holds between 20% and 50% of the voting
rights. Investments in associates are accounted for using the
equity method of accounting, after initially being recognised at
cost.
Revenue
Revenue is recognised when the performance obligation associated
with the sale is completed or as the performance obligation is
completed over time where appropriate. The transaction price
comprises the fair value of the consideration received or
receivable, net of value added tax, rebates and discounts and after
eliminating sales within the Group. Revenue and profit are
recognised as follows: a. Housing sales
Revenue is recognised in profit or loss when control is
transferred to the customer. This is deemed to be when title of the
property passes to the customer on legal completion and the
performance obligation associated with the sale is completed. b.
Rental income
Rental income, including fixed rental uplifts, from residential
property leased out under an operating lease is recognised as
revenue on a straight-line basis over the lease term. c. Management
fee
Management fees are recognised as revenue in the period to which
they relate when performance obligations are fulfilled based on
agreed transaction prices. Variable performance fees are estimated
based on the expected value and are only recognised over time as
performance obligations are fulfilled when progress can be measured
reliably and to the extent that a significant reversal of revenue
in a subsequent period is unlikely.
Cost of sales
The Group determines the value of inventory charged to cost of
sales based on the total budgeted cost of developing a site. Once
the total expected costs of development are established, they are
allocated to individual plots to achieve a standard build cost per
plot.
To the extent that additional costs or savings are identified as
the site progresses, these are recognised over the remaining plots
unless they are specific to a particular plot, in which case they
are recognised in profit or loss at the point of sale.
Finance income
Interest income on bank deposits is recognised on an accruals
basis. Also included in interest receivable are interest and
interest-related payments the Group receives on other receivables
and external loans.
Finance costs
Borrowing costs are recognised on an accruals basis and are
payable on the Group's borrowings and lease liabilities. Also
included are the amortisation of fees associated with the
arrangement of the financing.
Finance charges, including premiums payable on settlement or
redemption, and direct issue costs, are accounted for on an
accruals basis in profit or loss using the effective interest
method and are added to the carrying amount of the instrument to
the extent that they are not settled in the period in which they
arise.
Specific or general borrowing costs are capitalised if they are
directly attributable to the acquisition, construction or
production of qualifying assets which are assets that necessarily
take a substantial period of time to get ready for sale. The group
considers that its inventories are qualifying assets.
Foreign currencies
The individual financial statements of each Group company are
presented in Pound Sterling, the currency of the primary economic
environment in which it operates (its functional currency).
Transactions in currencies other than the functional currency are
recorded at the rates of exchange prevailing on the dates of the
transactions. At each statement of financial statement date,
monetary assets and liabilities that are denominated in foreign
currencies other than the functional currency are retranslated at
the rates prevailing at the statement of financial statement
date.
Non-monetary assets and liabilities carried at fair value that
are denominated in foreign currencies are translated at the rates
prevailing at the date when the fair value was determined. Gains
and losses arising on retranslation are included in the net profit
or loss for the period.
Leases
The Group as a lessee
The Group assesses at inception whether a contract is, or
contains, a lease. A lease exists if the contract conveys the right
to control the use of an identified asset for a period of time in
exchange for consideration.
The Group assessment includes whether: ? the contract involves
the use of an identified asset; ? the Group has the right to obtain
substantially all of the economic benefits from the use of the
asset throughout
the contract period; and ? the Group has the right to direct the
use of the asset.
At the commencement of a lease, the Group recognises a
right-of-use asset along with a corresponding lease liability.
The lease liability is initially measured at the present value
of the remaining lease payments, discounted using the Group's
incremental borrowing rate. The lease term comprises the
non-cancellable period of the contract, together with periods
covered by an option to extend the lease where the Group is
reasonably certain to exercise that option based on operational
needs and contractual terms. Subsequently, the lease liability is
measured at amortised cost by increasing the carrying amount to
reflect interest on the lease liability and reducing it by the
lease payments made. The lease liability is remeasured when the
Group changes its assessment of whether it will exercise an
extension or termination option.
Right-of-use assets are initially measured at cost, comprising
the initial measurement of the lease liability adjusted for any
lease payments made at or before the commencement date, estimated
asset retirement obligations, lease incentives received and initial
direct costs. Subsequently, right-of-use assets are measured at
cost, less any accumulated depreciation and any accumulated
impairment losses, and are adjusted for certain remeasurements of
the lease liability. Depreciation is calculated on a straight-line
basis over the length of the lease.
Right-of-use assets are presented within non-current assets on
the face of the financial statement, and lease liabilities are
shown separately on the statement of financial position date in
current liabilities and non-current liabilities depending on the
length of the lease term.
Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation, and accumulated impairment losses.
Depreciation is recognised so as to write off the cost or
valuation of assets less their residual values over their useful
lives, using the straight-line method. The estimated useful lives,
residual values and depreciation method are reviewed at each year
end, with the effect of any changes in estimate accounted for on a
prospective basis.
The gain or loss on the disposal or retirement of an item of
property, plant and equipment is determined as the difference
between the sales proceeds and the carrying amount of the asset as
is recognised in the profit and loss.
Depreciation is provided at the following annual rates in order
to write off each asset over its estimated useful life:
Fixtures and fittings 15% on cost
Office equipment 15% on cost
Motor vehicles 25% on cost
Impairment of tangible and intangible assets
At each reporting date, the Group reviews the carrying amounts
of its tangible and intangible assets to determine whether there is
any indication that those assets have suffered an impairment loss.
If any such indication exists, the recoverable amount of the asset
is estimated to determine the extent of the impairment loss (if
any). Where the asset does not generate cash flows that are
independent from other assets, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
The recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value, using a
pre-tax discount rate that reflects current market assessments and
the risks specific to the asset.
If the recoverable amount of an asset or cash-generating unit is
estimated to be less than its carrying amount, the carrying amount
of the asset or cash-generating unit is reduced to its recoverable
amount. An impairment loss is recognised as an expense immediately
in the profit and loss.
Where an impairment loss subsequently reverses, due to a change
in circumstances or in the estimates used to determine the asset's
recoverable amount, the carrying amount of the asset or
cash-generating unit is increased to the revised estimate of its
recoverable amount, so long as it does not exceed the original
carrying value prior to the impairment being recognised. A reversal
of an impairment loss is recognised as income immediately in the
statement of comprehensive income.
Financial instruments
Financial assets
Financial assets are initially recognised at fair value and
subsequently classified into one of the following measurement
categories: ? Measured at amortised cost ? Measured subsequently at
fair value through profit or loss (FVTPL) ? Measured subsequently
at fair value through other comprehensive income (FVOCI)
The classification of financial assets depends on the Group's
business model for managing the asset and the contractual terms of
the cash flows. Assets that are held for the collection of
contractual cash flows that represent solely payments of principal
and interest are measured at amortised cost, with any interest
income recognised in profit or loss using the effective interest
rate method.
Financial assets that do not meet the criteria to be measured at
amortised cost are classified by the Group as measured at FVTPL.
Fair value gains and losses on financial assets measured at FVTPL
are recognised in profit or loss and presented within net operating
expenses.
The Group currently has no financial assets measured at
FVOCI.
Trade and other receivables
Trade and other receivables are measured at amortised cost, less
any loss allowance.
Cash and cash equivalents
Cash and cash equivalents comprise cash held by the Group and
short-term bank deposits with an original maturity of three months
or less from inception and are subject to insignificant risk of
changes in value.
Impairment of financial assets
The Group assesses on a forward-looking basis the expected
credit loss associated with its financial assets carried at
amortised cost. The impairment methodology applied depends on
whether there has been a significant increase in credit risk. For
trade receivables, the Group applies the simplified approach
permitted by IFRS 9, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
Financial liabilities
Financial liabilities are initially recognised at fair value and
subsequently classified into one of the following measurement
categories: ? Measured at amortised cost ? Measured subsequently at
fair value through profit or loss (FVTPL)
Non-derivative financial liabilities are measured at FVTPL when
they are considered held for trading or designated as such on
initial recognition.
The Group has no non-derivative financial liabilities measured
at FVTPL.
Borrowings
Borrowings are allocated to either specific or general
borrowings and initially recognised at fair value, net of
transaction costs incurred and subsequently measured at amortised
cost. Specific or general borrowing costs are capitalised if they
are directly attributable to the acquisition, construction or
production of qualifying assets which are assets that necessarily
take a substantial period of time to get ready for sale. These are
added to the cost of those assets, until such time as the assets
are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in
the period in which they are incurred.
Trade and other payables
Trade and other payables are measured at amortised cost. When
the acquisition of land has deferred payment terms a land creditor
is recognised. Payables are discounted to present value when
repayment is due more than one year after initial recognition or
the impact is material.
Customer deposits
Customer deposits are recorded as a liability on receipt and
released to profit or loss as revenue upon legal completion.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of the Group after deducting all of its
liabilities. Equity instruments issued by the Company are recorded
as the proceeds are received, net of direct issue costs.
Inventory - developments
Inventories are initially stated at cost and held at the lower
of this initial amount and net realisable value. Costs comprise
direct materials and, where applicable, direct labour and those
overheads that have been incurred in bringing the inventories to
their present location and condition.
Net realisable value represents the estimated selling price
based on intended use less all estimated costs of completion and
costs to be incurred in marketing, selling and distribution. Land
is recognised in inventory when the significant risks and rewards
of ownership have been transferred to the Group.
Non-refundable land option payments are initially recognised in
inventory. They are reviewed regularly and written off to profit or
loss when it is probable that the option will not be exercised.
Inventory - trading properties
Trading property comprises those properties that in the
Directors' view are not held for long-term rental income or capital
appreciation and are expected to be disposed of within one year of
the reporting date or to be refurbished with the intention to
sell.
Trading property is carried at the lower of cost and net
realisable value. Net realisable value is the estimated selling
price based on intended use in the ordinary course of business,
less the estimated costs of completion and selling costs.
The amount of any write down of trading property to net
realisable value is recognised as an expense in the period the
write down occurs. Should a valuation uplift occur in a subsequent
period, the amount of any reversal shall be recognised as a
reduction in the previous write down in the period in which the
uplift occurs. This may not exceed the property's cost.
The sale of trading property is recognised as revenue when the
buyer obtains control of the property. Total costs incurred in
respect of trading property are recognised simultaneously as a cost
of sale.
Taxation
The tax charge represents the sum of the tax currently payable
and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the
period. Taxable profit differs from profit before tax as reported
in the profit and loss because it excludes items of income or
expense that are taxable or deductible in other years, and it
further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted at the reporting
date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial recognition
(other than in a business combination) of other assets and
liabilities in a transaction that affects neither the taxable
profit nor the accounting profit.
Deferred tax liabilities are also recognised for taxable
temporary differences arising on investments in subsidiaries and
interests in joint ventures, except where the Group is able to
control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable
future.
Deferred tax is measured on a non-discounted basis using the tax
rates and laws that have been enacted or substantively enacted by
the reporting date.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered. Deferred tax is charged
or credited to the profit and loss, except when it relates to items
charged or credited directly to other comprehensive income or
equity, in which case the deferred tax is also dealt with in other
comprehensive income or equity.
Share capital
Ordinary shares are classified as equity. Any incremental costs
directly attributable to the issue of new shares are shown in
equity as a deduction, net of tax, from the proceeds. 5. Disposal
of subsidiaries
On 12 October 2020 (effective 31 August 2020), the Group sold
the entire equity in One Heritage Tower Limited and Harley Street
Developments Limited as part of the restructuring in advance of
listing. Following the disposal the Group signed a development
management agreement with One Heritage Tower Limited and advanced a
profit participation loan to Harley Street Developments Limited,
which replaced the previous shareholder funding.
Results of disposed entities
Two months to
31 August
GBP unless stated
2020
Unaudited
Revenue 3,522
Expenses (29,548)
Results from operations (26,026)
Assets and liabilities of disposed of entities
As at
31 August
GBP unless stated
2020
Unaudited
Cash and cash equivalents 108,488
Inventory - developments 13,959,006
Inventory - trading property 768,651
Trade and other receivables 646,970
Total assets 15,483,115
Interest bearing borrowings (4,000,000)
Trade and other payables (11,467,080)
Total liabilities (15,467,080)
Net assets 16,035
Disposal price 42,458
Profit on disposal 26,423 6. Revenue
Six months to Six months to
31 December 31 December
GBP unless stated
2020 2019
Unaudited Unaudited
Development management 44,992 -
Rental income 3,522 4,919
Co-living 142,613 -
191,127 4,919
The Group has two development management agreements with One
Heritage Tower Limited and ACT Property Holding Limited.
The Group earns a management fee of 0.75% of costs incurred to
date per month, which generated GBP44,992 (31 December 2019: nil)
in revenue in the period, and a 10% share of net profit generated
by the development through the agreement with One Heritage Tower
Limited. The Group is also entitled to 1% of any external debt or
equity funding raised on behalf of the development.
The ACT Property Holding Limited agreement has a 20% profit
share of the net profit generated by the development.
The Group has not recognised any revenue linked to the profit
share element of either agreement as the transaction price is
variable and the amount cannot be reliably determined at this
time.
The Group has 3 profit participation agreements that entitle the
Group to a 15% share of profits on completed Co-living housing
sales. Revenue is recognised when a sale is complete. In the period
the Group generated revenue of GBP142,613 (31 December 2019: nil)
from these agreements with Robin Hood Property Development Limited
(GBP91,561), Mosley Limited (GBP45,159) and Harley Street Property
Developments Limited (GBP5,893).
The development management and Co-living revenues have been
generated through related parties. Further details can be found in
note 22. 7. Staff costs and employees
Six months to Six months to
31 December 31 December
GBP unless stated
2020 2019
Unaudited Unaudited
The aggregate remuneration comprised:
- Wages and salaries 199,251 17,857
- National insurance 19,708 1,415
- Pension costs 1,822 50
Average number of employees 11 3 8. Finance costs
Six months to Six months to
31 December 31 December
GBP unless stated
2020 2019
Unaudited Unaudited
Interest charged on lease liabilities 2,749 2,469
Interest paid on borrowings 265,362 -
Amount capitalised (151,188) -
Amount capitalised in disposed subsidiaries (68,000)
48,923 2,469
GBP68,000 interest was paid and capitalised in One Heritage
Tower Limited before it was disposed of on 31 August 2020. 9.
Income tax expense
The Group has generated a loss in the period and the period
before, and therefore has not recognised any taxation charge or
credit. 10. Property, plant and equipment
As at 31 December 2020
Right Motor
GBP unless stated Office equipment Fixtures and fittings Total
of use vehicles
Cost
At 30 June 2020 154,149 4,169 8,433 33,990 200,741
Additions - 3,202 803 644 4,649
Disposals - - - - -
At 31 December 2020 154,149 7,371 9,236 34,634 205,390
Accumulated depreciation
At 30 June 2020 28,261 407 1,107 5,665 35,440
Charge for the period 15,415 427 668 4,249 20,759
Disposals - - - - -
At 31 December 2020 43,676 834 1,775 9,914 56,199
Carrying amount
At 30 June 2020 125,888 3,762 7,326 28,325 165,301
At 31 December 2020 110,473 6,537 7,461 24,720 149,191
As at 30 June 2020
Right Motor
GBP unless stated Office equipment Fixtures and fittings Total
of use vehicles
Cost
At 31 December 2019 154,149 3,878 8,234 33,990 200,251
Additions - 291 199 - 490
Disposals - - - - -
At 30 June 2020 154,149 4,169 8,433 33,990 200,741
Accumulated depreciation
At 31 December 2019 12,846 159 434 1,416 14,855
Additions 15,415 248 673 4,249 20,585
Disposals - - - - -
At 30 June 2020 28,261 407 1,107 5,665 35,440
Carrying amount
At 31 December 2019 141,303 3,719 7,799 32,574 185,396
At 30 June 2020 125,888 3,762 7,326 28,325 165,301 11. Inventory - developments
As at As at
31 December 30 June
GBP unless stated
2020 2020
Unaudited Unaudited
Residential developments
- Land 3,353,591 11,788,736
- Construction and development costs 429,931 2,674,195
- Capitalised interest 199,637 266,696
3,983,159 14,729,627
As at 31 December 2020 GBP1,650,031 of the inventory was pledged
as security for liabilities.
The Group has a non-refundable right to purchase land at
Churchgate, Leicester, which will result in the Group paying an
additional GBP120,000 on the successful approval of planning on the
property. The Group has recognised GBP131,235 (30 June 2020:
GBP52,280) in inventory in relation to this in the period. 12.
Inventory trading properties
As at As at
31 December 30 June
GBP unless stated
2020 2020
Unaudited Unaudited
Opening 1,179,657 1,187,676
Disposals (768,651) (197,558)
Additions 11,568 189,539
Closing 422,574 1,179,657
As at 31 December 2020 GBP27,368 (30 June 2020: GBP19,121) of
interest was capitalised. 13. Investment in associate
As at As at
31 December 30 June
GBP unless stated
2020 2020
Unaudited Unaudited
Balance brought forward 258,512 -
Additions - 258,512
Disposals - -
Share of profit for the period 53,330 -
Dividends received in the period (26,383) -
Balance carried forward 285,459 258,512
Name of association Registered office Nature of busines % of ownership
80 Mosley Street, Manchester,
One Heritage Complete Limited Holding company 47.0%
M2 3FX 14. Financial assets at FVTPL
As at As at
31 December 30 June
GBP unless stated
2020 2020
Unaudited Unaudited
Current assets
Profit participation loans 1,966,163 897,002
1,966,163 897,002
The Company had loans outstanding to related parties outside of
the group to Robin Hood Property Development Limited for
GBP1,391,585 (30 June 2020: GBP517,276) and Harley Street
Developments Limited for GBP574,578 (30 June 2020: GBP379,727). The
loan agreements entitle the Group to 15% of the net profits on each
Co-living property sale.
These financial assets are considered due from related parties,
further details can be found in note 22. 15. Trade and other
receivables
As at As at
31 December 30 June
GBP unless stated
2020 2020
Unaudited Unaudited
Trade receivables 17,146 11,038
VAT receivable 76,529 120,584
Related party receivable 135,390 1,000
229,065 132,622
The amounts due from One Heritage Property Management Limited of
GBP42,470 and from One Heritage Property Development Limited of
GBP91,920, are both interest free and repayable on demand. The
company has an outstanding loan of GBP1,000 (30 June 2020:
GBP1,000) to the directors. No interest is charged on these amounts
and are repayable on demand.
These financial assets are considered due from related parties,
further details can be found in note 22.
Management consider that the credit quality of the various
receivables is good in respect of the amounts outstanding, there
have been no increases in credit risk and therefore credit risk is
considered to be low. Therefore, no expected credit loss provision
has been recognised. 16. Borrowing
As at As at
31 December 30 June
GBP unless stated
2020 2020
Unaudited Unaudited
Non-current
Lease liability (note 17) 96,321 117,403
Related party borrowings 2,142,000 -
Loan - 4,000,000
2,238,321 4,117,403
Current
Lease liability (note 17) 35,700 23,568
Related party borrowings 1,165,130 12,872,194
Loan 770,000 770,000
1,970,830 13,665,762
4,209,151 17,783,165
On 28 February 2020 a subsidiary, Lincoln House Property
Development Limited, drew down on a GBP770,000 12-month loan with
Wright (Holdings) Pension Scheme. The loan has a fixed rate of
interest of 0.95% interest per calendar month and the full amount
is repayable on expiry. A legal mortgage has been taken out by the
borrower over the land and there is a guarantee from the Company.
On 05 March 2021 this was extended for a further 3 months.
Related party borrowings
During the year the company received loans from One Heritage
Tower Limited amounting to GBP653,972, Mosley Property Limited of
GBP260,616 and ACT Property Developments Limited amounting to
GBP142,980. The loans are interest free and are repayable on
demand.
On 22 July 2020 and 11 August 2020 the Trading Group received
loans worth GBP1,135,000 and GBP1,007,000 respectively from One
Heritage SPC. As at 31 December 2020, GBP107,562 of interest had
been accrued against the loans. Each has a term of 18 months with
an annual interest rate of 12 per cent.
The Group has signed a GBP5.0 million loan facility with One
Heritage Property Development Limited on 21 September 2020. This
can be drawn down as required and is to be repaid on 31 December
2024. The facility has an interest rate of 7.0%. As at 31 December
2020, the full facility is available. On 18 February 2021 the
facility was increased by GBP2.5 million to GBP7.5 million, this
additional amount can only be drawn to fund property development
activities where obtaining project financing is delayed or
unavailable.
Further details of related parties can be found in note 22. 17.
Lease
As at As at
31 December 30 June
GBP unless stated
2020 2020
Unaudited Unaudited
Amount recognised in the statement of financial position:
Right of use
Buildings 110,474 125,889
Lease liability
Non-current 96,321 117,403
Current 35,700 23,568
132,021 140,971
Six months to Six months to
31 December 31 December
GBP unless stated
2020 2019
Unaudited Unaudited
Amount recognised in the profit and loss:
Depreciation on right of use building 15,415 12,846
Interest expense 2,749 2,469
Amount recognised in the statement of cash flow:
Lease payments made 11,698 6,724 18. Trade and other payables
As at As at
31 December 30 June
GBP unless stated
2020 2020
Unaudited Unaudited
Trade payables 279,008 378,417
Accruals and prepayments 112,477 283,650
PAYE payable 35,250 3,947
426,735 666,014
Trade payables and accruals relate to amounts payable at the
reporting date for services received during the period.
The company has financial risk management policies in place to
ensure that all payables are paid within the credit timeframe.
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note. 19. Financial instruments and fair value
disclosures
Capital management
The Group's policy is to maintain a strong statement of
financial position for the business and to have an appropriate
funding structure. Shareholders' equity and long term debt are used
to fund property, plant and equipment, trading property and the
medium to long term inventories.
Financial assets and financial liabilities
The following table shows the carrying amounts and fair values
of financial assets and liabilities, including their levels in the
fair value hierarchy:
Financial assets
As at As at
GBP unless stated 31 December 2020 30 June 2020
Unaudited Unaudited
Carrying value Fair value Carrying value Fair value
Cash and cash equivalentsa 375,148 375,148 711,798 711,798
Financial asset FVTPLb 1,966,163 1,966,163 897,203 897,203
Related party receivablesa 135,390 135,390 1,000 1,000
Trade and other receivablesa 93,676 93,676 131,721 131,721
2,570,377 2,570,377 1,741,522 1,741,522
Financial liabilities
As at As at
GBP unless stated
31 December 2020 30 June 2020
Unaudited Unaudited Unaudited Unaudited
Carrying value Fair value Carrying value Fair value
Loansc 770,000 770,000 4,770,000 4,770,000
Related party borrowingsc 3,307,131 3,307,131 12,872,194 12,872,194
Lease liabilitiesa 132,021 132,021 140,971 140,971
Trade and other payablesa 426,734 426,734 666,014 666,014
4,635,886 4,635,886 18,449,179 18,449,179 a. The Directors consider the carrying amounts of financial assets and financial liabilities recorded at amortised
costs in the consolidated financial statements to approximate
their fair value. b. The Directors estimate the fair value the
financial assets FVTPL to be equal to the carrying value (level 3).
c. The fair value of the loan has been determined by reference to
external interest rates and the Directors'
assessment of the margin for credit risk (level 2).
Market risk
The Group's activities expose it to the financial risks of
changes in interest rates. The Group aims to manage the exposure to
these risks using fixed or variable rate borrowings, and derivative
financial instruments.
Interest rate risk management
The Group can be exposed to interest rate risk as the Group
borrows funds, when required, at variable interest rates. The
exposure to variable rate borrowings can fluctuate during the year
due to the seasonal nature of cash flows relating to housing sales
and the less certain timing of land payments.
Group policy is to manage the volatility risk by a combination
of fixed rate borrowings and interest rate swaps such that the
sensitivity to potential changes in variable rates is within
acceptable levels. Group policy does not allow the use of
derivatives to speculate against changes to future interest rates
and they are only used to manage exposure to volatility and no
interest-rate hedging has taken place in the current or previous
periods. This policy has not changed during the period.
To measure the risk, variable rate borrowings and the expected
interest cost for the year are forecast monthly and compared to
budget using management's expectations of a reasonably possible
change in interest rates. Interest expense volatility remained
within acceptable limits throughout the year.
Interest rate sensitivity
The Group does not currently have any outstanding variable
interest rate arrangements and therefore returns are not sensitive
to movements in the interest rates in the next financial period on
existing borrowing obligations.
Credit risk
Credit risk is the risk of financial loss where counterparties
are not able to meet their obligations. Group policy is that
surplus cash, when not used to repay borrowings, is placed on
deposit with the Group's main relationship banks and with other
banks or money market funds based on a minimum credit rating and
maximum exposure.
The significant concentrations of credit risk are to related
parties (refer notes 14, 15 and 22).
Management consider that the credit quality of the various
receivables is good in respect of the amounts outstanding and
therefore credit risk is considered to be low.
The carrying amount of financial assets, as detailed above,
represents the Group's maximum exposure to credit risk at the
reporting date assuming that any security held has no value.
Liquidity risk
Liquidity risk is the risk that the Group does not have
sufficient financial resources available to meet its obligations as
they fall due. The Group manages liquidity risk by continuously
monitoring forecast and actual cash flows, matching the expected
cash flow timings of financial assets and liabilities with the use
of cash and cash equivalents, borrowings, overdrafts and committed
revolving credit facilities with a minimum of 12 months to
maturity.
Future borrowing requirements are forecast on a monthly basis
and funding headroom is maintained above forecast peak requirements
to meet unforeseen events. At 31 December 2020, the Group's
borrowings and facilities had a range of maturities with an average
life of 42 month.
In addition to fixed term borrowings, the Group has access to a
shareholder loan facility. At the reporting date, the total unused
committed amount available for general purposes was GBP5.0 million
and cash and cash equivalents were GBP375,148.
The maturity profile of the anticipated future cash flows
including interest, using the latest applicable relevant rate,
based on the earliest date on which the Group can be required to
pay financial liabilities on an undiscounted basis, is as
follows:
As at 31 December 2020
GBP unless stated Borrowings Lease liabilities Trade and other payables Total
On demand 1,057,669 - - 1,057,669
Within one year 1,027,040 36,456 426,734 1,490,230
More than one years but less than two years 2,270,520 36,456 - 2,306,976
More than two years but less than five years - 60,760 - 60,760
More than five years - - - -
4,355,229 133,672 426,734 4,915,635
As at 30 June 2020
GBP unless stated Borrowings* Lease liabilities Trade and other payables Total
On demand 12,872,194 - - 12,872,194
Within one year 850,465 29,925 666,014 1,546,404
More than one years but less than two years 4,000,000 36,456 - 4,036,456
More than two years but less than five years - 78,988 - 78,988
More than five years - - - -
17,722,659 145,369 666,014 18,534,042
*excludes future interest on the borrowings that have been
disposed of as part of the Group restructuring 20. Director's
remuneration
Six months to Six months to
31 December 31 December
GBP unless stated
2020 2019
Unaudited Unaudited
During the period remuneration payable to directors was as follows:
Directors remuneration 44,747 3,271
The Directors' did not receive any other benefits or
post-employment remuneration. Jeffery Pym was paid GBP4,613 (31
December 2019: nil) as a consultant before becoming Director on 21
July 2020. 21. Share capital
As at As at
31 December 30 June
GBP unless stated
2020 2020
Unaudited Unaudited
Share capital (1p per share) 300,000 -
Share premium 3,076,519 -
3,376,519 -
On incorporation on 22 July 2020 100 shares were issued for
GBP1.00 per share.
On 27 October 2020 the Company issued 20,699,900 ordinary shares
for GBP2,750,000 as part of the Company's restructuring. This was a
debt for equity transaction regarding a shareholder loan for
GBP2.75 million, as described in Note 2.
On 23 December 2020 the Company issued 9,300,000 ordinary shares
for 10p per share. The Company incurred listing fees of GBP303,581.
The Company also issued 600,000 warrants to Hybridan LLP at a
strike price of 10p with an expiry on 23 December 2025. These were
valued at listing at GBP4,989 by using the Black-Scholes-Merton
Model and recognised as part of the equity component. These are
potentially dilutive instruments in the period but did not result
in a dilution because the Company incurred a loss.
The total shares in issue as at 31 December 2020 is 30,000,000
22. Related party
Below is a table that sets out the entities that are related
parties to the Group:
Company Description
ACT Property Developments Limited Common directors
Harley Street Developments Limited Common directors, owned by the beneficial owners of the Group
Mosley Property Limited Common directors, owned by the beneficial owners of the Group
One Heritage Property Development Limited Common director, owned by the beneficial owners of the Group
One Heritage Property Management Limited Common director, owned by the beneficial owners of the Group
One Heritage SPC Managed by the beneficial owners of the Group
One Heritage Tower Limited Common directors, part owned by the beneficial owners of the Group
Robin Hood Property Development Limited Common directors, owned by the beneficial owners of the Group 23. Events after the reporting date
On 18 February 2021 the Company announced that it had issued
1,828,333 ordinary shares through a placing and subscription at
GBP0.30 per share. This raised gross proceeds of GBP548,500. The
Company also announced at the same time it had exchanged contracts
on Plus House, Stockport for GBP725,000, with an expected
completion on 31 March 2021 and increased the loan facility with
One Heritage Property Development Limited from GBP5.0 million to
GBP7.5 million. 24. Disclosures relating to subsidiary
undertakings
The Company's subsidiaries and other related undertakings at 31
December 2020 are listed below. All Group entities are included in
the consolidated financial results. All companies listed below
undertake all of their activity in the United Kingdom.
The share capital of each of the companies, where applicable,
comprises ordinary shares unless otherwise stated.
Company name Company number Ownership
Generation 100 Limited 11331256 100.0%
Lincoln House Building Management Limited 12710283 100.0%
Lincoln House Property Development Limited 12434625 100.0%
Nicholas Street Developments LTD 12058412 100.0%
One Heritage (Chester Road) Limited 12763845 100.0%
One Heritage Aston Limited 12114319 100.0%
One Heritage Group PLC 12757649 100.0%
One Heritage Property Development (UK) Limited 11982934 100.0%
One Heritage Property Holding Limited 12376110 100.0%
One Heritage Property Management Limited 12258993 100.0%
Below is a list of former subsidiaries that were disposed of in
the period.
Company name Company number Previous ownership
Harley Street Developments Limited 12102827 100.0%
One Heritage Tower Limited 11780660 100.0%
*these entities were disposed of on 31 August 2020 but were
previously 100.0% subsidiaries.
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ISIN: GB00BLF79495
Category Code: IR
TIDM: OHG
LEI Code: 2138008ZZUCCE4UZHY23
OAM Categories: 1.2. Half yearly financial reports and audit reports/limited reviews
Sequence No.: 96214
EQS News ID: 1178171
End of Announcement EQS News Service
=------------------------------------------------------------------------------------
(END) Dow Jones Newswires
March 25, 2021 03:01 ET (07:01 GMT)
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