4th Jun 2009 07:00
4 June 2009
H E L I C A L B A R P L C
("Helical"/"Company"/"Group")
P r e l i m i n a r y R e s u l t s
For the year to 31 March 2009
HELICAL TURNS THE CORNER
Financial Highlights
Profit before property write-downs, investment gains and tax of £16.2m (2008: £8.9m) Ungeared total return, as measured by IPD, of -6.3% compared to the benchmark index of -25.8% Diluted EPRA net asset value, including trading and development stock surplus, down 19% to 286p per share (2008: 352p). Diluted EPRA earnings per share of 12.8p (2008: 11.6p Valuation of investment properties down 25.7% or £68.0m (2008: 11.3% or £32.6m) Trading and development stock written down by 10% or £23m Loss after tax of £53.5m (2008: £12.3m). Good operational progress through active asset management. Final dividend maintained at 2.75p per share (2008: 2.75p) Cash and cash equivalents at year end of £72.8m (2008: £17.1m) following the successful Placing raising net proceeds of £26.4m Ratio of net borrowings to value of property portfolio 45.2% (2008: 38.6%).
Giles Weaver, Chairman, commented:
"It is to be hoped that the next twelve months mark the bottom of the economic recession but any recovery will take time and there will be casualties along the way. Helical will concentrate on making progress with its diverse range of investment properties, planning and development projects. With a strong balance sheet, well-established partnerships and the broad expertise and skills of our management team, we are extremely well positioned to take advantage of opportunities in the market to create future shareholder value when the market stabilises."
Michael Slade, Chief Executive, added:
"I am particularly pleased to note that our ungeared total return over the financial year was -6.3% compared to the IPD Benchmark of -25.8%, placing us in the first percentile of performance over 1, 3, 10 and indeed the 19 years we have measured ourselves against the Benchmark. Looking forward, Helical is confident that we will see great value emerge. We have the firepower from the recent Placing, the backing of our US partner and others and internally generated resources to take full advantage of the opportunities. With no material legacy issues and our track record, we are able to concentrate on high quality and very profitable business. Helical has significant upside in the existing portfolio of projects particularly from our trading and development activities which it should be noted have been aggressively written down this year. We are particularly enthusiastic about our out-of-town retail schemes in Poland, food store developments, retirement village projects, student accommodation developments and our Government office campus schemes."
For further information, please contact:
Helical Bar plc 020 7629 0113
Michael Slade (Chief Executive)
Nigel McNair Scott (Finance Director)
Address: 11-15 Farm Street, London W1J 5RS
Fax: 020 7408 1666
Website: www.helical.co.uk
Financial Dynamics 020 7831 3113
Stephanie Highett/Dido Laurimore/Laurence Jones
Financial Highlights
|
Notes |
Year To 31 March 2009 £m |
Year To 31 March 2008 £m |
|
|
Net rental income |
17.7 |
16.4 |
|
|
Development (losses)/profits |
(7.7) |
6.1 |
|
|
Trading losses |
(0.5) |
0.0 |
|
|
Share of results of joint ventures |
1 |
1.8 |
(0.1) |
|
Profit before property writedowns, investments gains and tax |
16.2 |
8.9 |
|
|
Provisions against trading and development stock |
(23.3) |
(0.4) |
|
|
Losses on investment properties |
(66.7) |
(32.8) |
|
|
Gain on sale of investments |
1.9 |
- |
|
|
Loss before tax |
(71.9) |
(24.3) |
|
|
Pence |
Pence |
||
|
Basic loss per share |
(56.6) |
(13.5) |
|
|
Diluted loss per share |
(56.6) |
(13.5) |
|
|
Diluted EPRA earnings per share |
2 |
12.8 |
11.6 |
|
Dividends per share (paid in year) |
4.50 |
4.50 |
|
|
Diluted EPRA net assets per share |
3 |
286 |
352 |
|
Adjusted diluted net assets per share |
4 |
242 |
306 |
|
£m |
£m |
||
|
Value of investment portfolio |
241.3 |
306.8 |
|
|
Trading and development stock at directors' value |
5 |
255.9 |
225.5 |
|
Net borrowings |
224.7 |
205.5 |
|
|
Ratio of net borrowings to value of property portfolio |
45.2% |
38.6% |
|
|
Net assets |
237.1 |
268.7 |
|
|
Net gearing |
95% |
76% |
Chairman's Statement
The year to 31 March 2009 has been one of the most tumultuous periods in the last century with the global banking crisis and wider economic woes creating unprecedented problems for the property sector. Falling capital values, falling rental values and severe constraints on borrowing have been the backdrop against which companies in the property sector have operated.
Helical has weathered this storm well, having degeared in previous years and retained only those assets where there was potential to add value. Whilst this potential has been adversely affected in the short term and values have fallen, the Company has performed well compared to its peers and retained the support of investors, as shown by the successful placing of 9.7m shares in January 2009 at 285p per share, raising £26.4m net of costs to invest in the market.
Results
The profit before tax, property write-downs and investment gains increased to £16.2m (2008: £8.9m). Development profits, before stock write downs, increased to £15.6m (2008: £6.5m). There was a trading loss of £0.5m (2008: nil) and an increased contribution from the Company's share in the results of joint ventures of £1.8m (2008: loss £0.1m). However, write-downs of trading and development stock of £23.3m are set against these profits. Net rental income rose to £17.7m (2008: £16.4m).
Administration costs reduced from £13.7m to £8.1m with the costs of share awards and performance related bonuses substantially lower at £0.7m (2008: £6.8m). Net finance costs before capitalised interest increased from £9.7m to £14.5m due to a higher average level of borrowings during the year. Capitalised interest reduced to £6.9m from £9.3m. The loss on mark to market valuation of the Company's financial instruments was £13.4m (2008: £1.3m). The Company benefitted from currency movements with a foreign exchange gain of £4.0m (2008: £1.9m) on its Polish operations.
Valuation yields on our investment portfolio rose by 180 (2008: 90) basis points, which was in line with the market and this caused a fall in values of 25.7% (2008: 11.3%) reflected as a loss on revaluation of £68.0m (2008: £32.6m). A gain on sale of investment properties of £1.3m compares with a loss of £0.2m in the previous year.
Diluted loss per share was 56.6p (2008: 13.5p) and diluted EPRA earnings per share were 12.8p (2008: 11.6p).
The Group's diluted EPRA net asset value per share fell by 19% to 286p (2008: 352p). The directors' valuation of trading and development stock showed a surplus of £45m (2008: £43m) and excluding this surplus the adjusted diluted net asset value per share fell by 21% to 242p (2008: 306p).
In view of the continuing uncertain economic outlook the Board is recommending to shareholders that the final dividend is maintained at the same level as the last two years at 2.75p per share. Under IFRS dividends are accounted for once approved and, as a consequence, this final dividend is not reflected in these accounts. However, taken with the interim dividend paid in December 2008 of 1.75p (2008: 1.75p) it represents an unchanged total dividend of 4.50p (2008: 4.50p).
Financing
A primary task of your directors during the year has been to put financing in place to ensure the business is well positioned to continue its activities and to enable the Company to take advantage of opportunities that become available as a result of the economic turmoil.
In the year to 31 March 2009 Helical has drawn down £81.5m of new secured bank loans and £11.7m under existing bank facilities, extending £27.6m and repaying £8.7m of loans due to expire during the year.
At 31 March 2009 the Company had net borrowings of £224.7m (2008: £205.5m) and gross property values of £497.2m (2008: £532.3m). The ratio of net borrowings to the value of the property portfolio (including directors' valuation of stock) was 45.2% (2008: 38.6%). Net debt to equity gearing at 31 March 2009 was 95% (2008: 76%).
At 31 March 2009, the Company had £147.9m (2008: £87.7m) of fixed rate borrowings with an average effective interest rate of 6.31% (2008: 6.33%) and an average length of 3.2 years (2008: 3.4 years) and £110m of interest rate caps at an average of 6.73% (2008: 7%). In addition the Company had a £30m floor at 4.50% until 2013.
Banking Covenants
Each bank loan is secured on individual properties in separate companies, although in almost every case the parent company, Helical Bar plc, is a guarantor of the loans. Loan to value covenants range from 60% to 85% and income covenants from 1.00 to 1.40 of rent as a proportion of interest. At 31 March 2009 there were no breaches of these covenants.
The Directors regularly stress test the portfolio with scenario planning to ensure that the Company can stay within its banking covenants allowing for recent and future potential falls in value. Covenants are monitored continuously and where potential breaches are anticipated, the Company has recourse to cure rights to avert such breaches by the placing of deposits with lenders or partial loan repayment. Since 31 March 2009 the Company has renegotiated the terms of £134m of secured loans repaying £28m and removing loan to value covenants for between two and three years. The Company will continue to monitor the loan to value covenants on the remaining secured loans, together with all income covenants. The Company's significant cash balances put it in a position to remedy any potential breach for the foreseeable future.
Placing
In January 2009, Helical issued 9,735,100 ordinary 1p shares at 285p per share, raising £26.4m net of costs. The Company was delighted that over 40 institutional investors participated in this Placing, including many new shareholders. The Placing was also supported by the Company's management with each director and senior employee participating with a total management investment of over £1m.
The Board
Further to the announcement on 1 May 2009, Mike Brown today formally stepped down from the Board to pursue other interests and will leave the Company at the end of June 2009. In Michael Slade we have an outstanding Chief Executive who remains committed to running the Company for many years to come. Helical has a highly experienced senior management team, comprising long-serving executives Nigel McNair Scott, Gerald Kaye, Matthew Bonning-Snook and Jack Pitman who, alongside Michael Slade, have collectively worked at the Company for 86 years, an average of over 17 years each.
Outlook
It is to be hoped that the next twelve months mark the bottom of the economic recession but any recovery will take time and there will be casualties along the way. Helical will concentrate on making progress with its diverse range of investment properties, planning and development projects. With a strong balance sheet, well-established partnerships and the broad expertise and skills of our management team, we are extremely well positioned to take advantage of opportunities in the market to create future shareholder value when the market stabilises.
Giles Weaver
Chairman
4 June 2009
Chief Executive's Statement
In the year to 31 March 2009 commercial property values across all sectors fell by over 30%, whether measured by the Investment Property Database ("IPD") or CBRE Indices. From their peak in June 2007 capital values have fallen by over 40% on both indices. I am particularly pleased to note that our ungeared total return over the financial year was -6.3% compared to the IPD Benchmark of -25.8% placing us in the first percentile of performance over 1, 3, 10 and indeed the 19 years we have measured ourselves against the Benchmark.
There is now mounting evidence that the pace of decline is slowing. Monthly falls of 6% in the IPD index in November and December slowed to 3% in each of January, February and March and 2% in April. The IPD equivalent yield of 9.3% in April is now well above long term trends and was only materially higher in 1990 - 1993 when interest rates were in double figures.
The investment market for well let properties has improved markedly in recent weeks, but some secondary properties are likely to continue to decline in tandem with the fall in rental values. It is worth remembering that the recovery from the last major property downturn took place in 1993 at a time when rents were still declining. As the recent stock market bounce demonstrates, capital markets move in anticipation of events and, even though rents will continue to fall, we expect the property market to find a floor and start to recover within the next twelve months.
At a time of such economic uncertainty it is always easy to see the downside risks but lose sight of the opportunities provided when assets are priced at cyclical lows. All the ingredients are coming into place for sustained recovery, similar to that which followed the difficulties of the 1970s and early 1990s, and we have positioned our business to benefit from this. Well let properties may be the most defensive but there is more upside on risk assets and this is where Helical is now concentrating its efforts. Looking forward, Helical is confident that we will see great value emerge. We have the firepower from the recent Placing, the backing of our US partner and others and internally generated resources to take full advantage of the opportunities.
The market's focus is either on corporate survival, on the one hand, or buying opportunities on the other. With no material legacy issues and our track record, we are able to concentrate on high quality and very profitable business. Helical has significant upside in the existing portfolio of projects, particularly from our trading and development activities, which it should be noted have been aggressively written down this year. We are particularly enthusiastic about our out-of-town retail schemes in Poland, food store developments, retirement village projects, student accommodation developments and our Government office campus schemes.
Management Team
I would like to thank Mike Brown for his contribution to Helical's success over the last 12 years and wish him well in the future. I do not see any need to replace Mike as the existing property team of Gerald Kaye, Matthew Bonning-Snook, Jack Pitman and I, ably supported below Board level by John Inwood and Duncan Walker, have the breadth of experience and skills to continue the success of the last 25 years whilst I have been at the helm of this Company.
Michael Slade
Chief Executive
4 June 2009
Business Review
Total portfolio - unleveraged returns
|
1 year % |
3 years % |
5 years % |
10 years % |
19 years % |
|
|
Helical |
(6.3) |
5.5 |
13.6 |
15.0 |
16.1 |
|
IPD Benchmark |
(25.8) |
(7.8) |
2.1 |
6.2 |
6.4 |
|
Helical's percentile rank |
1 |
1 |
2 |
1 |
0 |
0 = top ranked fund
Note: excludes the surplus but includes writedowns arising from the directors' valuation of trading and development stock.
Our Portfolio - how we commit our capital
|
London Offices % |
Provincial Offices % |
In Town Retail % |
Out of Town Retail % |
Industrial % |
Change of Use % |
Retirement Village % |
Total % |
|
|
Investment |
26.4 |
2.6 |
11.0 |
3.4 |
5.9 |
- |
0.3 |
49.6 |
|
Trading and development |
0.2 |
4.2 |
2.3 |
12.6 |
11.0 |
15.1 |
5.0 |
50.4 |
|
Total |
26.6 |
6.8 |
13.3 |
16.0 |
16.9 |
15.1 |
5.3 |
100.0 |
Note: excludes the surplus arising from the directors' valuation of trading and development stock.
Investment Portfolio
Valuation Movements
|
Sector |
Valuation Decrease |
Weighting |
Rise in equivalent yield over |
|
|
1 year |
2 years |
|||
|
Offices |
20.9% |
60% |
+150bp |
+270bp |
|
Retail |
32.3% |
28% |
+240bp |
+320bp |
|
Industrial |
29.7% |
12% |
+180bp |
+220bp |
|
Total |
25.7% |
+180bp |
+270bp |
|
Valuation Yields
|
Sector |
Initial |
On Letting Voids |
On Rack Rental Value |
Equivalent |
True Equivalent |
|
Offices |
8.2% |
9.4% |
9.7% |
8.7% |
9.1% |
|
Retail |
7.1% |
7.9% |
8.3% |
8.2% |
8.6% |
|
Industrial |
6.5% |
10.3% |
10.5% |
9.6% |
10.1% |
|
All |
7.7% |
9.1% |
9.4% |
8.6% |
9.0% |
|
Capital Value psf |
Vacancy Rate |
Average Unexpired Lease Term |
|
|
Offices |
£267 |
12% |
5.2 |
|
Retail |
£229 |
5% |
8.2 |
|
Industrial |
£36 |
27% |
5.2 |
|
Total |
£148 |
12% |
6.0 |
Lease expiries and tenant break options in:
|
2009 |
2010 |
2011 |
2012 |
|
|
Percentage of rent roll |
4.8% |
4.7% |
22.9% |
17.4% |
|
Number of leases |
22 |
29 |
53 |
37 |
|
Average rent per lease |
£37,600 |
£28,800 |
£76,300 |
£82,900 |
Development and Trading Portfolio
|
Project Type |
Book cost £m |
Write down £m |
Valuation changes |
Written down book cost £m |
Directors' Valuation £m |
Surplus Over Book Cost £m |
|
Change of Use |
72 |
11 |
-15% |
61 |
82 |
21 |
|
Industrial Development for Freehold Sales |
56 |
11 |
-20% |
45 |
46 |
1 |
|
Retirement Village development |
22 |
- |
- |
22 |
29 |
7 |
|
Office Development |
21 |
3 |
-14% |
18 |
18 |
0 |
|
Retail Development (Helical Poland) |
54 |
- |
- |
54 |
70 |
16 |
|
Others - Mainly Mixed Development |
15 |
5 |
-33% |
10 |
10 |
0 |
|
Total |
240 |
30 |
-12% |
210 |
255 |
45 |
|
Contributions from joint venture partners to writedowns |
(7) |
|||||
|
Total writedown |
23 |
-10% |
Basis of valuation - the Directors' valuation of the properties is based on current site values.
Our business
Helical Bar is a property development and investment company. We create shareholder value through a wide variety of high margin activities with property investment at our core. Whilst a profit centre in its own right, property investment provides a stable income stream to cover all our overheads and interest costs. Our spread of activities gives us the flexibility to deploy capital rapidly across our business and focus on whatever opportunities offer the best returns at different points of the property cycle.
Our goals
Our overriding long term strategy is to make excellent returns for our shareholders through a broadly based, diversified property business, which has access to a very wide range of opportunities.
We do this with a small, long serving management team who have a significant proportion of their own wealth invested in a 17% stake in the Company and have no competing interests. We try to keep execution risk to a minimum, working with first rate joint venture partners when we move into new areas of property business.
Our approach - how we create value
Planning
We are specialists in unlocking value by obtaining planning consents for more valuable uses.
Mixed use development
In Wolverhampton we have converted a disused railway station into a casino and sold a site for student housing having previously disposed of land parcels for residential, hotel, car showroom and a public house.
We have a development agreement with the London Borough of Hammersmith & Fulham in partnership with residential specialist Grainger plc to provide a scheme of 120,000 sq.ft. new civic offices, a food store, restaurants and 300 flats.
At Parkgate, Shirley we are finalising land assembly for an 80,000 sq.ft. Asda supermarket with 70,000 sq.ft. of retail and 100 residential units.
We continue to work with the London Borough of Hammersmith and Fulham and the GLA in the production of an Opportunity Area Planning Framework for White City which will set out a blueprint for the area's potential. The aspiration for us and our landowning consortium ( Aviva , M&S , BBC and Land Securities ) being a major mixed use scheme east of Wood Lane , London W12 incorporating some 4.5m sq ft of residential and commercial floorspace with a creative industries bias. The ownership interests of our consortium lie immediately opposite BBC Television Centre and just north of Westfield's new shopping centre.
At Amen Corner, Bracknell, we are making good progress in planning terms on the site's allocation for residential but a deterioration in market conditions has resulted in site assembly issues which we continue to address.
Retail development
We are currently focusing on our retail development in Poland where we have circa 100,000 sq.m (1.1m sq.ft). of development planned in three projects. We have completed our first scheme in Wroclaw of 9,600 sq.m.(103,000 sq.ft) which is fully let. In Opole, site enabling works have commenced on our 38,000 sq.m. (409,000 sq.ft) scheme anchored by Carrefour and Praktiker with funding from Standard Life. Our largest scheme at Gliwice is 50,000 sq.m. (538,000 sq.ft) and 40% is currently preleased with commitments from Carrefour, Castorama, Media Expert and site preparation is well under way. In total we have let 55,550 sq.m. (598,000 sq.ft) with 18,250 sq.m. (196,000 sq.ft) in lawyers hands and 9,500 sq.m. (102,000 sq.ft) in negotiation.
Office development
We are acting as development managers for the new 320,000 sq.ft. Man Group HQ at Riverside House in the City for City of London and Pace Investments. In the West End we have completed the refurbishment of Clareville House, SW1 which comprises 35,000 sq.ft of offices and 23,000 sq.ft. of leisure and restaurant space for National Grid UK Pension Scheme.
At Mitre Square, EC3 we are preparing a revised planning application for a smaller scheme of circa 275,000 sq.ft. of offices.
Office refurbishment
In Battersea we have just completed a new 50,000 sq.ft. phase 2. This follows the conversion of an empty TV studio into offices with a communal bar and meeting space which is now fully let to over 20 different businesses. Three of our investment properties, Rex House, SW1, Shepherds Building, W12 and 61 Southwark Street, SE1 represent over £90m of buildings that we have refurbished in the past and retained for their growth potential. Our total London holdings comprise circa 440,000 sq.ft. of offices let to 72 tenants generating a rent roll of £10.5 million, an average of just £27 per sq.ft and an ERV of £12.4m, £28 per sq.ft.
Industrial development
In partnership with Chancerygate and Quadrant we have built 120 units totalling over 570,000 sq.ft. for onward sale to owner occupiers at two sites in Oxford as well as at Southampton, Southall (West London) and Hailsham. We have let or sold 46 of these units (300,000 sq.ft), releasing £35m. These schemes include sales of parcels of land for car showrooms, builders merchants and self-storage uses and the development of trade counter schemes.
Retirement villages
We continue to be a major supplier of retirement village schemes. Our successful scheme at Cawston, Rugby is now in its final stages and we retain a further 40 acres for future development. At Bramshott Place, Liphook we have built a 51 unit first phase and have sold eight units with reservations on 18, leaving 25 available. Schemes at Horsham (156 units) and Cambridge (101 units) have now received planning consent and we look to commence development next year. Further projects in Exeter and Great Alne, Warwickshre are the subject of recent planning applications.
Despite the slowdown in the new build housing market, we are very pleased with the reception the villages receive in the market.
Outsourcing
The market positioning of The Asset Factor in property services outsourcing is an attractive one as an increasing number of organisations look to save cost and meet increasingly demanding compliance issues as the economic downturn continues.
The principal Asset Factor venture, NB Entrust (a joint venture with NB Real Estate), two years after our major repositioning exercise, is now trading profitably and growing strongly and should be a major winner from this market trend. Similarly the commercialisation business, Asset Space, is well placed to grow as an incremental cash generating service for property owners.
A new joint venture with Integral in the facilities management sector (Mobius Support Services) and the existing managed help desk service (Asset OnCall) should also benefit from the market's focus on costs.
Our service project in Reading has faced pressure on market rates but has now achieved sustainable occupancy albeit at a lower rate than originally budgeted.
Governetz
Our Helical Governetz joint venture is proving most exciting with potential demand for space of several million sq.ft. spread between our three schemes at Waverley, Keele and Newport. A number of further campuses are in negotiation with an aim to provide in excess of 4m sq.ft. of supply over a period of time. The Government should be a major driver of occupier demand during these difficult times and, equally importantly, one of the few covenants readily fundable with our institutional partners. Whilst these initiatives will take time to come to fruition they will be a major plank of our future business.
Quotient
In January 2007 we acquired a research facility near Newmarket in a joint venture with the majority shareholder of Quotient who occupy the buildings. As part of the transaction we acquired a minority stake in Quotient, a fast growing biosciences company. During the year we sold a tenth of our shareholding and recovered the cost of our initial stake, leaving us with a 22% holding in the Company.
Student Accommodation
Completion of the sale of our site at Fieldgate Street, London, E1, which has planning consent for 340 student rooms, is due in August 2009. At 200 Great Dover Street, London, SE1, currently an investment property, let to Conoco Phillips until June 2011, we are at detailed planning negotiation stage for a new development of 35,000 sq.ft. of offices and 290 student rooms. Other schemes are under consideration.
Helical Property Portfolio
Ongoing Projects
I - Investment
D - Development
T - Trading
|
Mixed use Developments |
Description |
Helical share |
|
|
C4.1, Milton Keynes |
110,000 sq ft Sainsbury's completed and sold 440 residential units (forward sold) 35,000 sq ft of retail and offices |
50% D |
|
|
Trinity Square, Nottingham |
180,000 sq ft retail - tenants include Borders, TK Maxx, Dixons, Waitrose 700 student units Forward funded and sold to Morley for over £100m Completed |
65% D |
|
|
King Street, Hammersmith |
Selected as Development Partner to Hammersmith & Fulham Borough Council JV with Grainger plc Scheme comprises new civic offices (120,000 sq.ft.), food store, restaurants/retail, and 300 flats with a bridge linking to the River Thames Application to be submitted May 2010. |
50% D |
|
|
Amen Corner, Bracknell |
Land and options held for a gateway residential led/mixed use development off the A329M |
100% D |
|
|
Bluebrick, Wolverhampton |
11 acre site. Individual land sales completed for 208 flats, 20,000 sq ft showroom, 88 bed hotel, 7,000 sq ft pub Refurbishment completed of listed building for casino use. Further 1.5 acres sold for student housing |
75% D |
|
|
Leisure Plaza, Milton Keynes |
Planning consent gained for 165,000 sq ft retail store, 65,000 sq ft casino, 50,000 sq ft ice rink, plus a further 25,000 sq ft of leisure |
50% D |
|
|
Parkgate, Shirley, Birmingham |
70,000 sq ft retail plus Asda (80,000 sq ft supermarket) 100 residential units Site assembly underway |
50% D |
|
|
Hagley Road West, Quinton, Birmingham |
16,000 sq ft retail plus 15 residential units |
75% D |
|
|
Projects with change of use potential |
Description |
Helical share |
|
|
White City, London W12 |
Opportunity Area Planning Framework being progressed for 4.5 million sq ft of commercial and residential on 33 acres |
Consortium landowner & development manager D |
|
|
Vauxhall, London SW8 |
Site sold and profit share in our joint venture with National Grid UK Pension Scheme partly paid with final payment due June 2009 |
Profit Share D |
|
|
Fieldgate Street, London E1 |
Planning consent obtained for 14,000 sq ft of retail and 340 student residential units and 9 residential flats |
67% D |
|
|
St Loye's College, Exeter |
18 acre site currently used as a college Potential for retirement village use, planning application to be submitted for 240 units. |
90% D |
|
|
Ely Road, Milton, Cambridge |
32,000 sq ft of industrial on 20 acres Planning consent granted during year for 101 unit retirement village |
90% D |
|
|
Maudslay Park, Great Alne |
314,000 sq ft industrial estate on a 20 acre site with potential for up to 175 retirement home units |
90% D |
|
|
Cherry Tree Yard, Faygate, Horsham |
Former saw mill on 15 acres Planning consent granted for 156 retirement home units |
90% D |
|
|
Thanet Way, Whitstable |
80,000 sq ft of industrial on 6 acres with potential for 236 residential units |
90% D |
|
|
Arleston, Telford |
19 acre green field site with residential potential |
90% D |
|
|
Winterhill, Milton Keynes |
28,000 sq ft of warehouses and offices with trade counter consent and retail warehouse potential |
50% I |
|
|
Cawston, Rugby |
32 acre green field site with residential potential |
30% D |
|
|
Office Developments |
Description |
Helical Share |
|
|
Riverbank House, London EC4 |
320,000 sq ft pre-let to Man Group Under construction |
Development management role D |
|
|
Clareville House, London SW1 |
Refurbishment of 35,000 sq ft offices plus 23,000 sq ft of restaurant, nightclub and retail Completed February 2009 |
Development management role D |
|
|
Battersea Studios, London SW8 (Phase 2) |
50,000 sq ft new office development Completed December 2008 |
75% I |
|
|
Downtown Glasgow |
60,000 sq ft new office development 40% pre-let to Glasgow School of Art and other media tenants Completed early 2009 |
70% D |
|
|
Mitre Square, London EC3 |
275,000 sq ft Planning application to be made |
100% D |
|
|
Forestgate, Crawley |
Refurbishment of 24,000 sq ft completed Scheme for two new buildings of 21,000 sq ft and 18,000 sq ft |
75% D |
|
|
Industrial developments |
Description |
Helical share |
|
|
Scotts Road, Southall, West London |
167,000 sq ft of industrial units for freehold sales 61,000 sq ft sold during the year |
100% D |
|
|
Ropemaker Park, Hailsham |
70,000 sq ft light industrial, 12,000 sq ft supermarket, 12,000 sq ft industrial and 1,500 sq ft restaurant all let/sold 30,000 sq ft industrial remaining |
50% D |
|
|
Millbrook Trading Estate, Southampton |
Construction of 66,000 sq ft of industrial units, 64,000 sq ft of trade counters completed December 2008, 15,000 sq.ft. let or sold during year 1 acre sold for self-storage Phase 2 comprises 4 acres of industrial land |
100% D |
|
|
Watlington Road, Cowley, Oxford |
71,000 sq ft of industrials and offices of which 68,000 sq ft sold |
100% D |
|
|
Langford Lane, Kidlington |
Phase 1 of 72,000 sq ft industrial units completed, 11,000 sq.ft let or sold during year Phase 2, 15,000 sq ft completed and sold 1 acre site for further sales |
100% D |
|
|
Tiviot Way, Stockport |
Planning application submitted for 100,000 sq ft industrial, 49,000 sq ft trade counter, 20,000 sq ft self storage, 20,000 sq ft builders merchant and car showroom 1 acre sold during year for self storage |
100% D |
|
|
Retail developments |
Description |
Helical share |
|
|
Opole, Poland |
38,000 sq m out of town retail Part pre-let to Carrefour and Praktiker Forward funded with Standard Life Construction commenced |
50% D |
|
|
Wroclaw, Poland |
9,600 sq m out of town retail Fully pre-let Construction completed December 2008 |
50% D |
|
|
Europa Centralna (Gliwice), Poland |
50,000 sq m out of town retail 40% preleased to Carrefour and Castorama, Media Markt and others Construction to commence in the second half of 2009 |
50% D |
|
|
Retirement Village Developments |
Description |
Helical share |
|
|
Lime Tree Village, Rugby |
154 bungalows, cottages and apartments being constructed in phases 141 sold to date |
33% D |
|
|
Bramshott Place, Liphook |
Construction commenced in 2008 of 51 unit Phase 1 of 147 unit scheme. 8 sold with reservations on a further 18 units. |
90% D |
|
|
Income producing assets |
|||
|
Offices |
Description |
Helical share |
|
|
Rex House, Lower Regent Street, London SW1 |
80,000 sq ft office building refurbished in 2001 Short leasehold expiring 2035 Acquired vacant in 2000 |
100% I |
|
|
Shepherds Building, Shepherds Bush, London W14 |
150,000 sq ft of studio offices refurbished in 2001 and let to circa 40 tenants Acquired vacant in 2000 |
90% I |
|
|
61 Southwark Street, London SE1 |
66,000 sq ft of offices that have been subject to a rolling refurbishment plus a penthouse floor addition Acquired 1998 |
100% I |
|
|
200 Great Dover Street, London SE1 |
36,000 sq ft of offices Acquired 2008 |
100% I |
|
|
Battersea Studios, London SW8 |
55,000 sq ft of media style offices refurbished in 2006 Acquired vacant in 2005 |
75% I |
|
|
Quotient HQ, Fordham, Newmarket |
70,000 sq ft of R&D space and offices on a 32 acre landscaped site Acquired 2007 |
53% I |
|
|
Amberley Court, Crawley |
Partial refurbishment of 31,000 sq ft office campus |
95% I |
|
|
Retail - in town |
Description |
Helical share |
|
|
Morgan Department Store, Cardiff |
160,000 sq ft retail - Borders, White Stuff, Molton Brown, Shoon 56 flats, 45 of which were sold in the year Completed 2008 |
100% I |
|
|
Morgan & Royal Arcades, Cardiff |
56 units opposite new St Davids 2 Shopping Centre. Acquired 2005 |
100% I |
|
|
1-5 Queens Walk, East Grinstead |
37,000 sq ft of retail opposite a proposed new retail scheme Acquired 2005 |
87% I |
|
|
Glasgow Portfolio |
Two unit shop investments and part of a multi-let office block, all in Glasgow City Centre Acquired 2005 |
100% I/T |
|
|
Retail - out of town |
Description |
Helical share |
|
|
Otford Road Retail Park, Sevenoaks |
43,000 sq ft with open A1 consent let to Wickes, Currys and Carpetright Acquired 2003 |
75% I |
|
|
Stanwell Road, Ashford |
32,000 sq ft Focus DIY store Acquired 2004 |
75% I |
|
|
215 Brixham Road, Paignton |
24,000 sq ft Focus store with open A1 consent (including food) Acquired 2005 |
67% I |
|
|
Industrial |
Description |
Helical share |
|
|
Waterside, Fleet |
54,000 sq ft of industrial property with redevelopment potential Acquired 2000 |
100% I |
|
|
Westgate, Aldridge |
208,000 sq ft Let to Greenstar Environmental Ltd Acquired 2006 |
80% I |
|
|
Dales Manor, Sawston, Cambridge |
70,000 sq ft of industrial property Acquired 2003 |
67% I |
|
|
Standard Industrial Estate, North Woolwich |
50,000 sq ft estate, 95% let Acquired 2002 |
60% I |
|
|
Hawtin Park, Blackwood |
249,000 sq ft estate, part vacant, 78% let Acquired 2003 |
100% I |
|
|
Golden Cross, Hailsham |
102,000 sq ft unit recently vacated Acquired 2001 |
100% I |
|
|
Bushey Mill Lane, Watford |
24,000 sq ft fully let with development potential acquired 2006 |
80% D |
|
Financial Review
Consolidated Income Statement
Results for the year
The Company made profits of £16.2m (2008: £8.9m) before write-downs of its investment and trading and development properties, its gain on sale of investment properties and gain on sale of investments. However, a revaluation deficit of £68.0m (2008: £32.6m), and a £23.3m (2008: £0.4m) write-down of development stock, partially offset by gains on sales of investments of £1.9m (2008: nil) and investments properties of £1.3m (2008: loss of £0.2m) turned this profit into a pre-tax loss of £71.9m (2008: £24.3m). Loss after tax was £53.5m (2008: £12.3m).
Net rental income
Net rental income rose by 8% to £17.7m (2008: £16.4m) reflecting full year rents at 200 Great Dover Street and the first rents at our retail development at Wroclaw, Poland. Rental costs increased to £3.1m (2008: £1.9m) as irrecoverable service charges on vacant units increased. Tenant bad debts remain low at less than 1.5% of gross rental income.
Trading profits
There was a trading loss of £0.5m (2008: £nil) in the year.
Development profits
The development programme generated substantial profits from its schemes at Tideway, Vauxhall London SW8, Trinity Square Nottingham and Scotts Road Southall and from C4.1 Milton Keynes, shown in these accounts as a share of the operating profit in joint ventures. However, by 31 March 2009 values had fallen considerably and stock write-downs of £23.3m offset these profits.
Share of results of joint ventures
During the year profits recognised on the mixed use scheme at C4.1 Milton Keynes were partially offset by our share of the costs of operating the joint venture with The Asset Factor resulting in a net profit of £1.8m (2008: loss £0.1m).
Loss on sale and revaluation of investment properties
During the year to 31 March 2009 the Group sold investment properties with book values of £9.0m (2008: £6.3m) on which it made a £1.3m profit (2008: £0.2m loss). The properties sold included a freehold interest at Cardiff Royal Infirmary and 45 residential apartments at the Morgan Department Store, Cardiff. The revaluation deficit for the year was £68.0m (2008: £32.6m).
Administrative expenses
Administrative expenses decreased to £8.1m (2008: £13.7m) with performance related bonuses and the costs of share awards substantially lower at £0.7m (2008: £6.8m). Administrative expenses, before impairment of goodwill, share based payments charge and executive bonuses, increased to £7.4m (2008: £6.9m).
Finance costs, finance income and derivative financial instruments
Interest payable on bank loans, before capitalised interest, increased from £11.9m to £15.9m on a greater level of borrowing. Capitalised interest reduced to £6.9m from £9.3m as interest rates fell and development expenditure on investment properties was lower. Finance income earned on cash deposits decreased to £2.1m (2008:£2.6m).
|
2009 |
2008 |
2007 |
|
|
Net finance costs |
£000 |
£000 |
£ 000 |
|
Interest payable on bank loans |
15,890 |
11,901 |
8,437 |
|
Other interest payable |
362 |
265 |
228 |
|
Finance arrangement costs |
321 |
163 |
114 |
|
Interest capitalised |
(6,855) |
(9,296) |
(6,069) |
|
9,718 |
3,033 |
2,710 |
|
|
Interest receivable |
(2,082) |
(2,579) |
(1,335) |
Derivative financial instruments have been valued on a mark to market basis and a deficit of £13.4m (2008: £1.3m) recognised in the Income Statement.
Foreign exchange gains
A foreign exchange gain of £4.0m (2008: £1.9m) has been recognised in respect of the Group's retail developments in Poland.
Taxation
The Group corporation tax charge for the year is less than the standard rate of 28% due to the use of capital allowances, tax relief on share awards and tax losses.
The deferred tax credit for the year reflects a reduction in the provision for tax on revaluation surpluses as a result of the decline in the value of the investment portfolio and a reduction in the provision for tax on temporary differences between the carrying amount of assets and liabilities in the financial statements and their corresponding tax bases in accordance with IFRS.
Dividends
The Board is recommending to shareholders at the Annual General Meeting on 22 July 2009 a final dividend of 2.75p per share (2008: 2.75p) to be paid on 24 July 2009 to shareholders on the register on 3 July 2009. This final dividend, amounting to £2.9m (2008:£2.4m) has not been included as a liability at 31 March 2009, in accordance with IFRS.
|
2009 |
2008 |
2007 |
|
|
Dividends |
pence |
pence |
pence |
|
Interim |
1.75 |
1.75 |
1.60 |
|
Prior period final |
2.75 |
2.75 |
2.45 |
|
Total |
4.50 |
4.50 |
4.05 |
(Loss)/earnings per share
Loss per share in the year to 31 March 2009 was 56.6p (2008: 13.5p) per share and on a diluted basis was 56.6p (2008: 13.5p) per share. Diluted EPRA earnings per share increased to 12.8p (2008: 11.6p) per share.
|
2009 |
2008 |
2007 |
|
|
(Loss)/earnings per share |
pence |
pence |
pence |
|
(Loss)/earnings per share |
(56.6) |
(13.5) |
58.0 |
|
Diluted (loss)/earnings per share |
(56.6) |
(13.5) |
53.7 |
|
Diluted EPRA earnings per share |
12.8 |
11.6 |
16.6 |
(Loss)/earnings per share calculations are based on the weighted average number of shares held in the year. This is a different basis to the net asset value per share calculations which are based on the number of shares at 31 March 2009.
In accordance with IAS 33 on Earnings per Share, no weighting adjustments has been made for share awards in existence during the year to 31 March 2009 as a loss was made during that year. Accordingly, the basic and diluted loss per share for the year are the same.
Diluted EPRA earnings per share excludes from earnings the IFRS effects of including the loss on sale and revaluation of investment properties (net of tax) and fair value movement on derivative financial instruments.
Consolidated balance sheet
Investment portfolio
During the year investment properties with a book value of £9.0m were sold. No new properties were acquired. In addition, around £17.6m of capital expenditure was spent on refurbishing various office, industrial and retail buildings. At 31 March 2009 there was a revaluation deficit of £68.0m (2008: £32.6m) on the investment portfolio.
|
2009 |
2008 |
2007 |
|
|
Investment portfolio |
£000 |
£000 |
£ 000 |
|
Cost or valuation at 1 April |
306,778 |
316,025 |
294,583 |
|
Additions at cost |
17,585 |
31,601 |
28,962 |
|
Disposals |
(9,005) |
(6,250) |
(45,638) |
|
Joint venture share of revaluation |
(6,066) |
(2,044) |
4,938 |
|
Revaluation |
(68,005) |
(32,554) |
33,180 |
|
Cost or valuation at 31 March |
241,287 |
306,778 |
316,025 |
Net asset values
The performance of the Group in the year to 31 March 2009 has decreased equity shareholders funds, on which the net asset value per share is calculated, by £31.6m. This has led to a 22% decrease in diluted net assets per share to 226p (2008: 289p). Taking into account the directors' valuation of trading and development stock of £45m (2008: £43m), the diluted EPRA net assets per share decreased by 19% to 286p (2008: 352p).
|
2009 |
2008 |
2007 |
|
|
Net asset values per ordinary share |
pence |
pence |
pence |
|
Diluted |
226 |
289 |
307 |
|
Adjusted diluted |
242 |
306 |
334 |
|
Diluted EPRA |
286 |
352 |
374 |
|
Diluted EPRA triple NAV |
269 |
335 |
346 |
The net asset value per share calculations are included in Note 22 of this statement.
Borrowings and financial risk
The Group's purchases of development sites have increased debt and, at 31 March 2009, net debt had increased from £205.5m to £224.7m. Taken with a decrease in net assets of £31.6m, the increase in net debt combined to increase the Group's net gearing from 76% to 95%.
The fair value of the Group's investment, trading and development portfolio at 31 March 2009 was £497.2m (2008: £532.3m). With net borrowings of £224.7m (2008: £205.5m) the ratio of net borrowings to the value of the property portfolio was 45.2% (2008: 38.6%).
At 31 March 2009 the Group had £147.9m (2008: £87.7m) of fixed rate borrowings with an average effective interest rate of 6.31% (2008: 6.33%) and an average length of 3.2 years (2008: 3.4 years), and £110m of interest rate caps at an average of 6.73% (2008: £80m at 7%).
|
2009 |
2008 |
2007 |
|
|
Net debt and gearing |
|||
|
Net debt |
£224.7m |
£205.5m |
£134.0m |
|
Gearing |
95% |
76% |
47% |
The Group seeks to manage financial risk by ensuring that there is sufficient financial liquidity to meet foreseeable needs and to invest surplus cash safely and profitably. At the year end, Helical had £39m of undrawn bank facilities and cash of £72.8m (2008: £17.1m). In addition it had £64m (2008: £179m) of uncharged property on which the Group could borrow funds.
As at 3 June 2009, Helical's average interest rate was 4.82%.
Going Concern
The directors have reviewed the current and projected financial position of the Group making reasonable assumptions about future trading performance.
The key areas of sensitivity are:
timing and value of property sales
availability of loan finance and related cash flows
future property valuation and its impact on covenants and potential loan repayment
committed future expenditure
future rental income and potential bad debt
repayment timing and value of trade receivables
The forecast cashflows have been sensitised to eliminate those cash inflows which are less certain and to take account of a further deterioration of property valuations. From their review the directors believe that the Group have adequate resources to continue to be operational as a going concern for the foreseeable future.
Placing
On 28 January 2009 the Company placed 9,735,100 ordinary 1p shares (the "Placing Shares") at a price of 285 pence per share, raising net proceeds of £26.4m. These Placing Shares represented 9.99% of the Company's issued ordinary share capital prior to the Placing and were admitted to trading on 2 February 2009. The shares rank pari passu with existing ordinary shares.
Nigel McNair Scott
Finance Director
4 June 2009
Helical Bar plc
Unaudited Consolidated Income Statement
For the year to 31 March 2009
|
Year To 31 March 2009 |
Year To 31 March 2008 |
||
|
Notes |
£000 |
£000 |
|
|
Revenue |
2 |
81,770 |
65,623 |
|
Net rental income |
3 |
17,682 |
16,400 |
|
Development (losses)/profits |
(7,704) |
6,068 |
|
|
Trading losses |
(514) |
(29) |
|
|
Share of results of joint ventures |
1,846 |
(98) |
|
|
Other operating income/(expense) |
6,752 |
(315) |
|
|
Gross profit before net loss on sale and revaluation of investment properties |
18,062 |
22,026 |
|
|
Net loss on sale and revaluation of investment properties |
4 |
(66,670) |
(32,790) |
|
Gain on sale of investments |
1,892 |
- |
|
|
Gross loss |
(46,716) |
(10,764) |
|
|
Administrative expenses |
5 |
(8,090) |
(13,659) |
|
Operating loss |
(54,806) |
(24,423) |
|
|
Finance costs |
6 |
(9,718) |
(3,033) |
|
Finance income |
2,082 |
2,579 |
|
|
Change in fair value of derivative financial instruments |
(13,412) |
(1,270) |
|
|
Foreign exchange gains |
3,999 |
1,862 |
|
|
Loss before tax |
(71,855) |
(24,285) |
|
|
Tax |
7 |
18,359 |
11,971 |
|
Loss after tax |
(53,496) |
(12,314) |
|
|
- attributable to minority interests |
143 |
(7) |
|
|
- attributable to equity shareholders |
(53,639) |
(12,307) |
|
|
Loss for the year |
(53,496) |
(12,314) |
|
|
Basic loss per share |
8 |
(56.6p) |
(13.5p) |
|
Diluted loss per share |
8 |
(56.6p) |
(13.5p) |
Helical Bar plc
Unaudited Consolidated Balance Sheet
At 31 March 2009
|
Notes |
At 31 March 2009 £000 |
At 31 March 2008 £000 |
|
|
Non-current assets |
|||
|
Investment properties |
9 |
241,287 |
306,778 |
|
Owner occupied property, plant and equipment |
10 |
1,745 |
2,007 |
|
Available-for-sale investments |
11 |
13,310 |
12,000 |
|
Investment in joint ventures |
7,924 |
6,078 |
|
|
Goodwill |
12 |
30 |
30 |
|
Deferred tax asset |
7 |
3,440 |
- |
|
267,736 |
326,893 |
||
|
Current assets |
|||
|
Land, developments and trading properties |
13 |
210,415 |
182,508 |
|
Available-for-sale investments |
11 |
7,684 |
12 |
|
Trade and other receivables |
14 |
41,459 |
44,083 |
|
Cash and cash equivalents |
15 |
72,776 |
17,090 |
|
332,334 |
243,693 |
||
|
Total assets |
600,070 |
570,586 |
|
|
Current liabilities |
|||
|
Trade payables and other payables |
16 |
(51,215) |
(66,551) |
|
Borrowings |
17 |
(48,155) |
(50,238) |
|
(99,370) |
(116,789) |
||
|
Non-current liabilities |
|||
|
Borrowings |
17 |
(249,297) |
(172,362) |
|
Derivative financial instruments |
(14,337) |
(925) |
|
|
Deferred tax provision |
7 |
- |
(11,851) |
|
(263,634) |
(185,138) |
||
|
Total liabilities |
(363,004) |
(301,927) |
|
|
Net assets |
237,066 |
268,659 |
Helical Bar plc
Unaudited Consolidated Balance Sheet
At 31 March 2009
|
Notes |
At 31 March 2009 £000 |
At 31 March 2008 £000 |
|
|
Equity |
|||
|
Called-up share capital |
18 |
1,336 |
1,222 |
|
Share premium account |
21 |
70,378 |
42,520 |
|
Revaluation reserve |
21 |
529 |
57,072 |
|
Capital redemption reserve |
21 |
7,478 |
7,478 |
|
Other reserves |
21 |
291 |
291 |
|
Retained earnings |
21 |
158, 494 |
163,911 |
|
Own shares held |
20/21 |
(1,597) |
(3,992) |
|
Equity attributable to equity holders of the parent |
236,909 |
268,502 |
|
|
Minority interests |
21 |
157 |
157 |
|
Total equity |
237,066 |
268,659 |
|
|
Net assets per share |
|||
|
Basic |
22 |
226p |
293p |
|
Diluted |
22 |
226p |
289p |
|
Adjusted Diluted |
22 |
242p |
306p |
|
Diluted EPRA |
22 |
286p |
352p |
Unaudited Consolidated Cash Flow Statement
For the year to 31 March 2009
Helical Bar plc
|
Year To 31 March 2009 |
Year To 31 March 2008 |
|
|
£000 |
£000 |
|
|
Cash flows from operating activities |
||
|
Loss before tax |
(71,855) |
(24,285) |
|
Depreciation |
321 |
270 |
|
Loss on investment properties |
68,005 |
32,554 |
|
Net interest payable |
6,999 |
1,112 |
|
(Gain)/loss on sale of investments |
(1,892) |
446 |
|
(Gain)/loss on sale of investment properties |
(1,335) |
236 |
|
Loss on valuation of derivative financial instruments |
13,412 |
1,270 |
|
Share based payment (credit)/charge |
(1,363) |
4,655 |
|
Non-cash share acquisition by ESOP |
- |
(3,859) |
|
Share of results of joint ventures |
(1,846) |
98 |
|
Other non-cash items |
(448) |
(517) |
|
Cash flows from operations before changes in working capital |
9,998 |
11,980 |
|
Change in trade and other receivables |
3,503 |
26,051 |
|
Change in land, developments & trading properties |
(23,632) |
(65,031) |
|
Change in trade and other payables |
(8,688) |
2,563 |
|
Cash outflow from operations |
(18,819) |
(24,437) |
|
Finance costs |
(16,992) |
(12,987) |
|
Finance income |
2,497 |
2,579 |
|
Dividends from joint ventures |
- |
98 |
|
Tax received |
1,439 |
- |
|
Tax paid |
(331) |
(3,100) |
|
(13,387) |
(13,410) |
|
|
Cash flows from operating activities |
(32,206) |
(37,847) |
|
Cash flows from investing activities |
||
|
Purchase of investment property |
(15,024) |
(26,760) |
|
Sale of investment property |
10,340 |
6,014 |
|
Purchase of investments |
(5,048) |
(8,080) |
|
Sale of investments |
2,100 |
6,508 |
|
Purchase of shares by ESOP |
(3,107) |
(5,273) |
|
Sale of plant and equipment |
14 |
- |
|
Purchase of leasehold improvements, plant & equipment |
(77) |
(1,973) |
|
(10,802) |
(29,564) |
|
|
Cash flows from financing activities |
||
|
Issue of shares |
27,972 |
- |
|
Borrowings drawn down |
93,250 |
96,837 |
|
Borrowings repaid |
(18,398) |
(11,644) |
|
Equity dividends paid |
(4,130) |
(4,081) |
|
98,694 |
81,112 |
|
|
Net increase in cash and cash equivalents |
55,686 |
13,701 |
|
Cash and cash equivalents at 1 April |
17,090 |
3,389 |
|
Cash and cash equivalents at 31 March |
72,776 |
17,090 |
Helical Bar plc
Unaudited Consolidated Statement of Recognised Income and Expense
For the year to 31 March 2009
|
Year To 31 March 2009 £000 |
Year To 31 March 2008 £000 |
|
|
Loss for the year |
(53,496) |
(12,314) |
|
Fair value movements on available for-sale-investments |
4,142 |
9,974 |
|
Associated deferred tax on the fair value movements |
(1,159) |
(2,793) |
|
Retranslation of net investments in foreign operations |
(309) |
- |
|
Total recognised income and expense for the year |
(50,822) |
(5,133) |
Unaudited Notes to the Preliminary Announcement
1. Basis of preparation
The financial information is abridged and does not constitute the Group's full financial statements for the years ended 31 March 2009 and 31 March 2008 from where the information has been derived. The principal accounting policies have remained unchanged from the prior financial period to 31 March 2008.
The financial statements for the year ended 31 March 2008 were prepared in accordance with International Financial Reporting Standards (IFRS) and have received an unqualified auditors' report which did not draw attention to any matters of emphasis and did not contain statements under s237 (2) or (3) of the Companies Act 1985.
The financial statements for the year to 31 March 2009 will be presented to the Members at the forthcoming Annual General Meeting.
2. Revenue
|
Year To 31 March 2009 £000 |
Year To 31 March 2008 £000 |
|
|
Rental income |
20,781 |
18,284 |
|
Trading property sales |
- |
115 |
|
Developments |
54,097 |
40,585 |
|
Other income |
6,892 |
6,639 |
|
81,770 |
65,623 |
3. Net rental income
|
Year To 31 March 2009 £000 |
Year To 31 March 2008 £000 |
|
|
Gross rental income |
20,781 |
18,284 |
|
Other property outgoings |
(3,099) |
(1,884) |
|
Net rental income |
17,682 |
16,400 |
4. Net loss on sale and revaluation of investment properties
|
Year To 31 March 2009 £000 |
Year To 31 March 2008 £000 |
|
|
Net proceeds from the sale of investment properties Book value (note 9) |
10,340 (9,005) |
6,014 (6,250) |
|
Gain/(loss) on sale of investment properties |
1,335 |
(236) |
|
Loss on revaluation on investment properties |
(68,005) |
(32,554) |
|
Net loss on sale and revaluation of investment properties |
(66,670) |
(32,790) |
5. Administrative expenses
|
Year To 31 March 2009 £000 |
Year To 31 March 2008 £000 |
|
|
Administrative expenses |
8,090 |
13,659 |
|
Operating loss is stated after: |
||
|
Staff costs |
4,951 |
5,036 |
|
Share-based payments (credit)/charge |
(425) |
4,208 |
|
Depreciation |
321 |
270 |
Administrative expenses includes salaries in respect of the directors of £2,007,500 (2008: £1,875,000) and cash bonuses payable to directors of £300,000 (2008: nil).
6. Finance costs
|
Year To 31 March 2009 £000 |
Year To 31 March 2008 £000 |
|
|
Interest payable on bank loans and overdrafts |
15,890 |
11,901 |
|
Other interest payable and similar charges |
362 |
265 |
|
Finance arrangement costs |
321 |
163 |
|
Interest capitalised |
(6,855) |
(9,296) |
|
Finance costs |
9,718 |
3,033 |
7. Taxation
|
Year To 31 March 2009 £000 |
Year To 31 March 2008 £000 |
|
|
The tax charge/(credit) is based on the loss for the period and represents: United Kingdom corporation tax at 28% (2008: 30%) - Group corporation tax - adjustments in respect of prior periods |
- (1,915) |
1,160 (1,492) |
|
Current tax credit |
(1,915) |
(332) |
|
Deferred tax - capital allowances - other temporary differences - revaluation surpluses |
480 (4,358) (12,566) |
560 (1,209) (10,990) |
|
Deferred tax |
(16,444) |
(11,639) |
|
Tax on loss |
(18,359) |
(11,971) |
Deferred tax
|
Capital gains |
- |
12,566 |
|
Capital allowances |
3,205 |
2,728 |
|
Other temporary differences |
(1,066) |
(3,443) |
|
Tax losses |
(5,579) |
- |
|
Deferred tax (asset)/provision |
(3,440) |
11,851 |
8. (Loss)/earnings per share
The calculation of the basic (loss)/earnings per share is based on the (loss)/earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year. Shares held by the ESOP, which has waived its entitlement to receive dividends, are treated as cancelled for the purposes of this calculation.
The calculation of diluted (loss)/earnings per share is based on the basic (loss)/earnings per share, adjusted to allow for the issue of shares and the post tax effect of dividends on the assumed exercise of all dilutive options.
The (loss)/earnings per share are calculated in accordance with IAS 33 and the best practice recommendations of the European Public Real Estate Association ("EPRA").
Reconciliations of the (loss)/earnings and weighted average number of shares used in the calculations are set out below.
|
Year To 31 March 2009 |
Year To 31 March 2008 |
|
|
000's |
000's |
|
|
Ordinary shares in issue |
107,087 |
95,732 |
|
Weighting adjustment |
(12,242) |
(4,289) |
|
Weighted average ordinary shares in issue for calculation of basic earnings per share |
94,845 |
91,443 |
|
Weighting adjustments - for diluted earnings per share |
- |
- |
|
Weighted average ordinary shares in issue for calculation of diluted earnings per share |
94,845 |
91,443 |
|
Weighting adjustments - for diluted EPRA earnings per share |
2,425 |
6,309 |
|
Weighted average ordinary shares in issue for calculation of diluted EPRA earnings per share |
97,270 |
97,752 |
|
Loss used for calculation of basic and diluted earnings per share |
(53,639) |
(12,307) |
|
Basic loss per share |
(56.6p) |
(13.5p) |
|
Diluted loss per share |
(56.6p) |
(13.5p) |
|
Loss used for calculation of basic and diluted earnings per share |
(53,639) |
(12,307) |
|
Net loss on sale and revaluation of investment properties |
66,670 |
32,790 |
|
Fair value movement on derivative financial instruments |
13,412 |
1,270 |
|
Deferred tax in respect of investment properties |
(12,566) |
(10,430) |
|
Deferred tax in respect of accumulated capital allowances |
480 |
- |
|
Gain on disposal of investments |
(1,892) |
- |
|
Earnings used for calculation of diluted EPRA earnings per share |
12,465 |
11,323 |
|
Diluted EPRA earnings per share |
12.8p |
11.6p |
9. Investment properties
|
Freehold 31.03.09 £000 |
Leasehold 31.03.09 £000 |
Total 31.03.09 £000 |
Freehold 31.03.08 £000 |
Leasehold 31.03.08 £000 |
Total 31.03.08 £000 |
|
|
Group |
||||||
|
Fair value at 1 April |
246,301 |
60,477 |
306,778 |
253,696 |
62,329 |
316,025 |
|
Additions at cost |
9,460 |
545 |
10,005 |
29,066 |
491 |
29,557 |
|
Transfers from land, developments and trading properties |
1,514 |
- |
1,514 |
- |
- |
- |
|
Disposals |
(9,005) |
- |
(9,005) |
(6,250) |
- |
(6,250) |
|
Revaluation deficit |
(52,908) |
(15,097) |
(68,005) |
(30,211) |
(2,343) |
(32,554) |
|
Fair value at 31 March |
195,362 |
45,925 |
241,287 |
246,301 |
60,477 |
306,778 |
A disposal of the investment property portfolio at its stated fair value would crystallise a payment due to the Group's joint venture partners in respect of their share of the revaluation surplus of £nil (2008: £6.0m). This amount is included in accruals (note 16).
Interest capitalised during the year in respect of the refurbishment of investment properties amounted to £1,065,000 (2008: £2,634,000).
Interest capitalised in respect of the refurbishment of investment properties is included in investment properties to the extent of £nil (2008: £5,140,000).
10. Owner occupied property, plant and equipment
|
Short leasehold improvements 31.03.09 £000 |
Vehicles and office equipment 31.03.09 £000 |
Total 31.03.09 £000 |
Short leasehold improvements 31.03.08 £000 |
Vehicles and office equipment 31.03.08 £000 |
Total 31.03.08 £000 |
|
|
Cost at 1 April |
2,033 |
587 |
2,620 |
646 |
778 |
1,424 |
|
Additions at cost |
38 |
39 |
77 |
1,733 |
239 |
1,972 |
|
Disposals |
- |
(72) |
(72) |
(346) |
(430) |
(776) |
|
Cost at 31 March |
2,071 |
554 |
2,625 |
2,033 |
587 |
2,620 |
|
Depreciation at 1 April |
328 |
285 |
613 |
552 |
521 |
1,073 |
|
Provision for the year |
190 |
131 |
321 |
123 |
147 |
270 |
|
Eliminated on disposals |
- |
(54) |
(54) |
(347) |
(383) |
(730) |
|
Depreciation at 31 March |
518 |
362 |
880 |
328 |
285 |
613 |
|
Net book amount at 31 March |
1,553 |
192 |
1,745 |
1,705 |
302 |
2,007 |
11. Available for sale investments
|
At 31 March 2009 £000 |
At 31 March 2008 £000 |
|
|
Non-current investments |
||
|
Investment in Quotient Bioscience Group Ltd at directors' valuation |
13,310 |
12,000 |
|
13,310 |
12,000 |
|
|
Current investments |
||
|
UK listed investments at fair value |
12 |
12 |
|
Investment in a private property developer |
7,672 |
- |
|
7,684 |
12 |
Helical Bar plc owns 22% of Quotient Bioscience Group Limited a private biosciences company. During the year the Group lent money to a private property developer with an option to convert this loan into equity.
The Group has accounted for its interests as available-for-sale investments in accordance with IAS39 as it does not have significant influence over the operating and financial policies of either company. Both investments are held at their fair values.
12. Goodwill
|
At 31 March 2009 £000 |
At 31 March 2008 £000 |
|
|
Cost at 1 April Additions |
1,515 - |
1,515 - |
|
Cost at 31 March |
1,515 |
1,515 |
|
Impairment at 1 April Impairment for the year |
1,485 - |
1,485 - |
|
Impairment at 31 March |
1,485 |
1,485 |
|
Fair value at 31 March |
30 |
30 |
13. Land, developments and trading properties
|
Cost |
At 31 March 2009 £000 |
At 31 March 2008 £000 |
|
|
Development properties |
209,537 |
181,118 |
|
|
Properties held as trading stock |
878 |
1,390 |
|
|
210,415 |
182,508 |
The directors' valuation of trading and development stock showed a surplus of £45m above book value at 31 March 2009 (2008: £43m).
Interest capitalised in respect of the development of sites is included in stock to the extent of £8,749,000 (2008: £11,636,000). Interest capitalised during the period in respect of development sites amounted to £5,790,000 (2008: £6,661,000). Capitalised interest previously provided for but reinstated during the year amounted to £nil (2008: £452,000).
14. Trade and other receivables
|
At 31 March 2009 £000 |
At 31 March 2008 £000 |
|
|
Trade receivables |
19,001 |
11,626 |
|
Other receivables |
16,917 |
14,131 |
|
Prepayments and accrued income |
5,541 |
18,326 |
|
41,459 |
44,083 |
15. Cash and cash equivalents
|
At 31 March 2009 £000 |
At 31 March 2008 £000 |
|
|
Rent deposits and cash held at managing agents |
1,216 |
3,105 |
|
Cash deposits |
71,560 |
13,985 |
|
72,776 |
17,090 |
16. Trade payables and other payables
|
At 31 March 2009 £000 |
At 31 March 2008 £000 |
|
|
Trade payables |
3,611 |
13,035 |
|
Other payables |
15,701 |
9,050 |
|
Accruals and deferred income |
31,903 |
44,466 |
|
51,215 |
66,551 |
17. Borrowings
|
Bank overdraft and loans - maturity |
At 31 March 2009 £000 |
At 31 March 2008 £000 |
|
Due within one year |
48,155 |
50,238 |
|
Due after more than one year |
249,297 |
172,362 |
|
297,452 |
222,600 |
|
Undrawn committed bank facilities |
At 31 March 2009 £000 |
At 31 March 2008 £000 |
|
Expiring in one year or less Expiring in more than one year but not more than two years Expiring in more than two years |
35,646 3,000
- |
62,427 2,000
11,730 |
|
38,646 |
76,157 |
|
Interest Rates |
% |
Expiry |
At 31 March 2009 £000 |
|
Fixed rate borrowings - swap rate plus bank margin - swap rate plus bank margin - swap rate plus bank margin - swap rate plus bank margin - swap rate plus bank margin - swap rate plus bank margin - swap rate plus bank margin - swap rate plus bank margin - swap rate plus bank margin - swap rate plus bank margin - swap rate plus bank margin |
5.939 7.273 5.661 6.052 5.341 6.405 6.260 5.290 6.565 3.770 6.465 |
Sep 09 Nov 09 Nov 10 Jan 11 Jun 11 Oct 12 Dec 13 Mar 12 Aug 13 Oct 10 Aug 13 |
14,324 8,000 5,200 4,200 4,536 35,190 10,120 3,570 9,912 15,347 37,500 |
|
Weighted average Floating rate borrowings |
6.313 2.251 |
May 12 |
147,899 151,013 |
|
Total borrowings Deferred arrangement costs |
298,912 (1,460) |
||
|
297,452 |
Floating rate borrowings bear interest at rates based on LIBOR.
Hedging
In addition to the fixed rates, borrowings are also hedged by the following financial instruments:
|
Instrument |
Value £000 |
Rate % |
Start |
Expiry |
|
Current |
||||
|
- cap |
80,000 |
7.000 |
Jan 2006 |
Sept 2009 |
|
- cap |
30,000-40,950 |
6.000 |
May 2008 |
May 2013 |
|
- floor |
30,000 |
4.500 |
May 2008 |
May 2013 |
|
Gearing |
At 31 March 2009 £000 |
At 31 March 2008 £000 |
|
Total borrowings |
297,452 |
222,600 |
|
Cash |
(72,776) |
(17,090) |
|
Net borrowings |
224,676 |
205,510 |
|
Net assets |
237,066 |
268,659 |
|
Gearing |
95% |
76% |
Net borrowings exclude the Group's share of borrowings in joint ventures of £5,644,000 (2008: £19,990,000).
18. Share capital
|
At 31 March 2009 £000 |
At 31 March 2008 £000 |
||
|
Authorised |
39,577 |
39,577 |
|
|
39,577 |
39,577 |
||
|
The authorised share capital of the Company is £39,576,626.60 divided into ordinary shares of 1p each, and deferred shares of 1/8p each |
|||
|
Allotted, called up and fully paid - 107,087,012 (2008: 95,732,457) ordinary shares of 1p each |
1,071 |
957 |
|
|
- 212,145,300 deferred shares of 1/8 p each |
265 |
265 |
|
|
1,336 |
1,222 |
||
As at 1 April 2008, the Company had 95,732,457 ordinary 1p shares in issue. In the year to 31 March 2009 1,619,455 new ordinary 1p shares were issued as the result of share options being exercised. On 2 February 2009 the Company issued 9,735,100 new ordinary 1p shares to shareholders as a part of the Placing referred to in the Chairman's Statement. At 31 March 2009 there were 107,087,012 ordinary 1p shares in issue.
Share options
At 31 March 2009 unexercised options over 320,510 (31 March 2008: 1,939,965) new ordinary 1p shares in the Company and 1,057,095 (31 March 2008: 2,629,695) purchased ordinary 1p shares held by the ESOP had been granted to directors and employees under the Company's share option schemes. During the period, no new options were granted.
19. Dividends
|
Year To 31 March 2009 £000 |
Year To 31 March 2008 £000 |
|
|
Attributable to equity share capital |
||
|
Ordinary - interim paid of 1.75p (2008: 1.75p) per share - prior period final paid 2.75p (2008: 2.75p) per share |
1,640 2,490 |
1,613 2,468 |
|
Total dividends paid 4.50p (2008 : 4.50p) |
4,130 |
4,081 |
The interim dividend of 1.75p was paid on 3 December 2008 to shareholders on the register on 5 December 2008.
The final dividend, if approved by shareholders at the AGM on 22 July 2009, amounting to £2,881,000 representing 2.75 pence per share, will be paid on 24 July 2009 to shareholders on the register on 3 July 2009 and has not been included as a liability as at 31 March 2009.
20. Own shares held
Following approval at the 1997 Annual General Meeting the Company established the Helical Bar Employees' Share Ownership Plan Trust (the "Trust") to be used as part of the remuneration arrangements for employees. The purpose of the Trust is to facilitate and encourage the ownership of shares by or for the benefit of employees by the acquisition and distribution of shares in the Company.
The Trust purchases shares in the Company to satisfy the Company's obligations under its Share Option Schemes and Performance Share Plan.
At 31 March 2009, the Trust held 2,338,904 (31 March 2008: 4,170,868) ordinary shares in Helical Bar plc.
At 31 March 2009, options over 1,057,095 (31 March 2008: 2,629,695) ordinary shares in Helical Bar plc had been granted through the Trust. At 31 March 2009, awards over 4,738,900 (31 March 2008: 4,536,065) ordinary shares in Helical Bar plc had been made under the terms of the Performance Share Plan.
21. Statement of Changes in Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Capital
|
Share
premium
|
Revaluation
reserve
|
Capital
redemption
reserve
|
Other
reserves
|
Retained earnings
|
Own
shares
held
|
Minority interest
|
Total
|
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
|
|
|
|
As at 31 March 2007
|
1,222
|
42,520
|
79,664
|
7,478
|
291
|
157,006
|
(5,995)
|
-
|
282,186
|
|
Revaluation deficit
|
-
|
-
|
(21,564)
|
-
|
-
|
21,564
|
-
|
-
|
-
|
|
Realised on disposals
|
-
|
-
|
(1,028)
|
-
|
-
|
1,028
|
-
|
-
|
-
|
|
Total recognised expense
|
-
|
-
|
-
|
-
|
-
|
(5,133)
|
-
|
-
|
(5,133)
|
|
Dividends paid
|
-
|
-
|
-
|
-
|
-
|
(4,081)
|
-
|
-
|
(4,081)
|
|
Minority interests
|
-
|
-
|
-
|
-
|
-
|
7
|
-
|
157
|
164
|
|
Purchase of shares
|
-
|
-
|
-
|
-
|
-
|
-
|
(9,132)
|
-
|
(9,132)
|
|
Performance share plan
|
-
|
-
|
-
|
-
|
-
|
4,655
|
-
|
-
|
4,655
|
|
Own shares held
|
-
|
-
|
-
|
-
|
-
|
(11,135)
|
11,135
|
-
|
-
|
|
As at 31 March 2008
|
1,222
|
42,520
|
57,072
|
7,478
|
291
|
163,911
|
(3,992)
|
157
|
268,659
|
|
Revaluation deficit
|
-
|
-
|
(56,360)
|
-
|
-
|
56,360
|
-
|
-
|
-
|
|
Realised on disposals
|
-
|
-
|
(183)
|
-
|
-
|
183
|
-
|
-
|
-
|
|
Total recognised expense
|
-
|
-
|
-
|
-
|
-
|
(50,822)
|
-
|
-
|
(50,822)
|
|
Dividend paid
|
-
|
-
|
-
|
-
|
-
|
(4,130)
|
-
|
-
|
(4,130)
|
|
Minority interests
|
-
|
-
|
-
|
-
|
-
|
(143)
|
-
|
-
|
(143)
|
|
Performance share plan
|
-
|
-
|
-
|
-
|
-
|
(1,363)
|
-
|
-
|
(1,363)
|
|
Purchase of shares
|
-
|
-
|
-
|
-
|
-
|
-
|
(3,107)
|
-
|
(3,107)
|
|
Own shares held
|
-
|
-
|
-
|
-
|
-
|
(5,502)
|
5,502
|
-
|
-
|
|
Issue of shares
|
114
|
27,858
|
-
|
-
|
-
|
-
|
-
|
-
|
27,972
|
|
At 31 March 2009
|
1,336
|
70,378
|
529
|
7,478
|
291
|
158,494
|
(1,597)
|
157
|
237,066
|
The adjustment to retained earnings of £1,363,000 (2008 £4,655,000) adds back the share-based payments charge, in accordance with IFRS 2 Share-Based Payments.
Notes:
Share capital - represents the nominal value of issued share capital.
Share premium - represents the excess of value of shares issued over their nominal value.
Revaluation reserve - represents the surplus of fair value of investment properties over their historic cost.
Capital redemption reserve - represents amounts paid to purchase issued shares for cancellation at their nominal value.
Retained earnings - represents the accumulated retained earnings of the Group.
Own shares held - relates to the shares purchased by the Helical Bar Employees' Share Ownership Plan Trust.
22. Net assets per share
|
At 31 March 2009 £000 |
At 31 March 2009 Number of Shares 000's |
Pence per share |
At 31 March 2008 £000 |
At 31 March 2008 Number of Shares 000's |
Pence per share |
|
|
Net asset value |
237,066 |
107,087 |
268,502 |
95,732 |
||
|
Own shares held by ESOP |
(2,339) |
(4,170) |
||||
|
Less deferred shares |
(265) |
(265) |
||||
|
Basic net asset value |
236,801 |
104,748 |
226 |
268,237 |
91,562 |
293 |
|
Unexercised share options |
454 |
321 |
1,988 |
1,940 |
||
|
Diluted net asset value |
237,255 |
105,069 |
226 |
270,225 |
93,502 |
289 |
|
- Fair value of financial instruments - Deferred tax on capital allowances - Deferred tax on chargeable gains |
14,337 3,205 - |
925 2,728 12,565 |
||||
|
Adjusted diluted net asset value - Fair value of trading properties |
254,797 45,455 |
105,069 |
242 |
286,443 42,970 |
93,502 |
306 |
|
Diluted EPRA net asset value |
300,252 |
105,069 |
286 |
329,413 |
93,502 |
352 |
|
- Fair value of financial instruments |
(14,337) |
(925) |
||||
|
- Deferred tax on capital allowances |
(3,205) |
(2,728) |
||||
|
- Deferred tax on capital gains |
- |
(12,565) |
||||
|
Diluted Triple NAV |
282,710 |
105,069 |
269 |
313,195 |
93,502 |
335 |
Related Shares:
Helical Bar