TIDMTOWN
RNS Number : 6458Z
Town Centre Securities PLC
22 September 2020
Tuesday 22 September 2020
TOWN CENTRE SECURITIES PLC
('TCS' or the 'Company')
Final results for the year ended 30 June 2020
Resetting and reinvigorating the business for the future
Town Centre Securities PLC, the Leeds, Manchester, Scotland, and
London property investment, development and car parking company,
today announces its audited final results for the year ended 30
June 2020.
Financial performance
-- The Company has applied the IFRS 16 lease accounting standard
for the first time which has reduced earnings and NAV by GBP0.5m.
Going forward, the Company will also report Adjusted EPRA Earnings
which removes the effect of IFRS 16 (see Finance section)
-- Net assets:
o Devaluation of like for like investment portfolio of 6.9%
despite a very uncertain market
o The majority of reduction driven by retail and leisure
properties as expected
o EPRA net assets per share down 17.4% to 292p (2019: 354p)
primarily as a result of the revaluation
-- Profits and earnings per share:
o Adjusted EPRA Earnings before tax of GBP2.6m (2019: GBP6.4m),
driven by an estimated GBP3.6m COVID-19 impact
o Adjusted EPRA earnings per share of 4.9p (2019: 12.0p)
o EPRA Earnings of GBP2.1m including the effect of IFRS 16
o Statutory loss before tax GBP24.2m (2019: loss of GBP12.5m)
and statutory loss per share 45.5p (2019: loss of 23.4p), impacted
by the unrealised GBP26.4m portfolio valuation and impairment
movement
-- Financing:
o Headroom of over GBP14.8m at year end based on June 2020
borrowings and valuations. This stands at GBP13.9m as at 1
September 2020
o Loan to value of 53.2% as at 30 June 2020 (2019: 49.3%),
driven by the unrealised valuation movement
o GBP35.2m of retail asset sales since the year-end improves the
pro-forma LTV to 47.9%
-- Dividends:
o Final dividend of 1.75p declared, following interim dividend
of 3.25p declared at the half-year
o Total dividend for the year of 5.00p, broadly fully covered by
earnings (2019: 11.75p)
COVID-19 impact and response
Impact
-- Strong first two thirds of the year, with good numbers and
progress made against our strategic initiatives
-- Estimated GBP3.6m impact of COVID-19 in the four months from
March 2020 to June 2020 driven by:
o GBP1.2m impact in the property business, primarily bad
debt
o GBP2.0m CitiPark impact due to lost car parking income
o GBP0.4m ibis Styles hotel impact driven by reduced
bookings
-- Retail and leisure tenants have been hardest hit as reflected
in the June 2020 valuation; these assets have seen valuations drop
by 11.8% year on year accounting for GBP23.0m of the total GBP26.4m
fall in valuation
-- Rent receipts remain strong; as at 15 September 2020 of the
GBP13.3m rent, service charge and VAT billed since March GBP10.9m
or 82% has been paid, with a further GBP0.5m or 4% agreed to be
deferred, totalling 86%
-- Of the remaining GBP1.9m, GBP0.8m has been waived, and on
GBP1.1m no agreement has yet been reached
Response and mitigating actions
-- Significant actions taken to mitigate the impact included:
o Closure of over half the car parks at the height of lockdown
to minimise overhead costs. All branches now reopen
o Furloughing CitiPark operational branch staff, and some head
office colleagues (all staff salary topped up to 100% by TCS)
o All non-essential spending halted
o All capital projects (with the exception of 123 Albion Street)
paused
o TCS board took a 20% salary and fees reduction for the six
months from April to September
-- Our long history of engagement with tenants has ensured
equitable solutions have been reached in most instances, and we are
now focused on helping them return to normality as quickly as
possible
Resetting and reinvigorating the business for the future
The impact of COVID-19 has been unprecedented and material, and
a high degree of uncertainty remains. Consistent with TCS's
strategy of focusing on long term performance and navigating the
challenges for all stakeholders, the Board is using this moment to
reset and reinvigorate the business.
The Board has determined that the Company's overall strategy
remains appropriate, however it requires acceleration, particularly
with regards to the disposal programme, which will be undertaken in
a measured, focused manner. TCS had already delivered on several
key initiatives in the first eight months of the year prior to the
lockdown and progress against the strategy is detailed below:
Actively managing our assets
Our long-standing strategy of active management and
redevelopment, to drive income and capital growth, has continued
throughout the crisis:
-- Recommencement of refurbishment of Ducie House, Manchester
following a pause during lockdown, with completion expected in the
autumn. This GBP2m project is expected to deliver an ongoing post
investment yield of over 8.5% delivering quality flexible office
space in this vibrant part of Manchester city centre
-- Completion of a refurbishment of the common parts of Carver's
Warehouse in Manchester. This GBP0.3m investment has helped
increase average rents by over 12% to GBP18psf with the ERV now at
circa GBP20psf
-- CitiPark performance was trending strongly with revenues up
4.7% year on year for the first eight months of the year. Whilst
the impact of COVID-19 has been severe for car parking, early
indications are that as normality resumes, a good recovery to at
least prior levels seems likely
Maximising available capital
A conservative capital structure, with a mix of short and
long-term secure financing, has always underpinned our
approach:
-- Sales and purchases in the year were modest; we sold two
assets in Shandwick Place, Edinburgh for GBP2.5m (3.7% above
valuation) and acquired 106b Kilburn High Road, London for GBP1.7m
including costs
-- All quarter end and year end bank and debenture covenants
have been successfully met and reported
-- Following the year end, we have extended our NatWest RCF
banking facility at no additional cost. This GBP33m facility will
now expire at the end of April 2022
-- Since the year end we have completed GBP35.2m of retail
sales, disposing of two Waitrose stores and an Aldi/Home Bargains
in Scotland, and a high street store in Chiswick, London, in total
marginally above June 2020 valuation levels
-- Sale proceeds initially utilised to reduce bank indebtedness
-- CitiPark added over 1,000 new car park spaces with the
addition of two new car park management contracts. The largest so
far, the Manchester Arena car park, generates management fee income
and the opportunity to share in the car park profits without the
need for capital investment
Investing in our development pipeline
Our development pipeline, with an estimated GDV of over GBP600m,
is a valuable and strategic point of difference for TCS which we
continue to progress and improve. Notably in the past year:
-- Our planning consent for Whitehall Road in Leeds to develop a
180,000 sq ft Grade A office space and 513 space multi-storey car
park has been implemented and we continue to market the site to
secure a pre-let
Acquiring and improving investment assets to diversify our
portfolio
We continue to improve investment assets, and will consider new
acquisition opportunities that offer the opportunity for both
diversification and growth:
-- Retail and leisure now accounts for 47% of our portfolio,
down from 50% a year ago and 70% in 2016. This diversification over
time has been a key contributor in keeping rent collection levels
high during the crisis. This reduces to 42% following the recent
sales
-- The refurbishment of 123 Albion Street, Leeds (previously The
Cube), continued during lockdown and has now completed, further
reducing exposure to retail and leisure. This net GBP4m office
investment is expected to deliver an ongoing post investment yield
of over 8.5%; interest in the space is strong
Commenting on the results, Chairman and Chief Executive Edward
Ziff, said:
"The COVID-19 crisis has presented entirely new challenges for
the business and for our stakeholders. I have been very reassured
by the ability of the business to adapt in such circumstances and
by the flexibility and resilience of our tenants and employees.
"The final third of our financial year was especially tough, but
I believe the underlying strength of the business, together with
our conservative focus on long-term, sustainable performance, as
well as recent strategic changes to our portfolio, have enabled us
to limit the worst impact of COVID-19.
"We are very disappointed to break our 60-year track record of
delivering a maintained or increased dividend although we were
pleased to be able to keep our commitment to pay the interim
dividend. However, the unpredictable nature of the COVID-19 crisis
has made the decision to reduce the full year dividend payment the
right one for the business.
"Looking forward, the Board is using this moment to reset and
reinvigorate the business; we have determined that the overall
strategy remains appropriate but requires acceleration particularly
with regards to the disposal programme, as evidenced by the
significant sales completed recently. This will affect future
earnings and dividend levels, however we believe longer-term we
shall emerge as a stronger business and look to the future with
confidence."
-Ends-
For further information, please contact:
Town Centre Securities PLC www.tcs-plc.co.uk / @TCS PLC
Edward Ziff, Chairman and Chief Executive 0113 222 1234
Mark Dilley, Group Finance Director
MHP Communications 020 3128 8572
Reg Hoare / Alistair de Kare-Silver / Florence Mayo
tcs@mhpc.com
Chairman and Chief Executive's Statement
Many financial years have ups and downs, but few have seen such
contrasting periods as this one. Though we have sought to iron out
the peaks and troughs of the property market for many years, the
COVID-19 crisis has presented entirely new challenges for the
business and for our stakeholders.
The final third of FY20 has been a very challenging time, but I
believe that when the going gets tough, the true strengths of a
business emerge. We have long prided ourselves on being a
conservatively managed business with a focus on long-term,
sustainable performance, and a number of strategic moves we have
made in recent years have protected us from the worst impacts of
COVID-19.
As well as demonstrating the soundness of our strategic
direction, I have been very pleased with the ability of the
business to adapt in challenging circumstances and impressed by the
flexibility and resilience our tenants and employees have
demonstrated. The contribution of every single member of the TCS
team has been exemplary, and I would like to extend my personal
thanks to all.
Performance
It should not be overlooked that we had a strong first two
thirds of the year, with good numbers and progress made against our
strategic initiatives.
We progressed with redevelopment projects at Ducie House and 123
Albion Street. We also launched Burlington House, our first private
rented sector (PRS) development and initial take up was strong. In
recognition of the success of that scheme, we were named Apartment
Developer of the Year at the North West Residential Property
Awards, an excellent achievement and testament to the high standard
of the work. We also won two new car park management contracts,
including the Manchester Arena car park, building on our successful
partnership with John Lewis in Cheltenham.
However, COVID-19 has understandably impacted our financial
performance. This is the first year that our financial statements
are presented in accordance with IFRS 16, which affects how we
account for leases and is further discussed in the financial
review. Excluding the effect of IFRS 16, adjusted EPRA earnings
were down GBP3.7m on the prior year to GBP2.6m. We report a
statutory loss for the year, on an IFRS 16 basis, of GBP24.2m, down
GBP11.7m year on year, largely due to the negative impact the
crisis has had on the value of our portfolio, which is down 6.9%
year on year, with net asset value also down GBP32.8m or 17.4% to
GBP155.5m.
These are clearly disappointing numbers, but with earnings
impacted by GBP3.6m due to COVID-19, and our valuation results
significantly better than other companies with less resilient
retail portfolios; we are reassured by the resilience of our
portfolio and our full compliance with all covenants. With our
decision to accelerate asset sales and with significant progress
already made post 30 June 2020, I firmly see this as an inflexion
point from which we can successfully move forwards.
COVID-19 response
From the onset of the crisis in March, we have ensured informed
decision making and close control through weekly Board meetings and
separate weekly meetings for myself and our Non-Executive
Directors.
Alongside protecting the health and wellbeing of our staff and
stakeholders, our main priority has been cash flow management. We
have always paid close and careful attention to cash flow and
borrowing headroom, and we immediately did everything we could to
minimise costs and preserve cash. All non-essential spending was
stopped; we closed over half of our car parks; we accessed a number
of the Government's support schemes including deferrals of VAT and
other taxes and the furlough scheme. Additionally, all Board
members agreed to reduce their salary by 20% for six months.
Out of our control has been the significant impact on some
segments of our property portfolio, specifically the retail and
leisure sector and our car park businesses. Our financial results
for the year ending 30 June 2020 have been impacted by COVID-19 by
an estimated GBP3.6m loss to earnings; include providing for
GBP1.7m of rental income and service charge not received in the
period, a net reduction to our CitiPark business of GBP2.0m, and a
GBP0.4m impact to our ibis Styles hotel.
However, the unique nature of our property portfolio as it
stands today has given us stability. The significant reduction in
our exposure to high street retail, that we have worked towards
over the past five to ten years, has proved invaluable during this
period, and the crisis has led us to accelerate our strategy of
diversifying away from retail and leisure in the portfolio.
The biggest threat to the business lies in the risk of continued
reductions in property values, which could threaten banking
covenants and future borrowing headroom. We were pleased, however,
to have extended our NatWest facility by a further year without
additional cost. Total headroom at 30 June 2020 stood at
GBP14.8m.
Despite the crisis, we have decided to press ahead with key
refurbishments at 123 Albion Street and Ducie House. These are high
quality opportunities and we expect demand for office space will
return as the guidance on working from home eases. Our development
pipeline is full of similarly exciting opportunities and we
envision moving forwards with the next phase of residential
property development at Eider House in Manchester when it is
prudent to do so.
Our Stakeholders
We approached the crisis with consideration for our key
stakeholder groups and the potential long-term impacts our
decisions may have on them lie at the heart of our thinking.
We have always sought to work closely with our tenants, building
trusting partnerships. Such long-term relationships have been key
during this period, allowing us to understand the changing needs of
tenants and share their pain where we can. We worked closely with
many tenants to agree payment plans during the peak of the crisis
and are now helping to ensure the safe and successful reopening of
their businesses.
Most tenants have acted responsibly and in good faith in
difficult circumstances, however, it has been frustrating that
some, such as Boots, have not been so considerate and have taken
advantage of legislation put in place for companies who wouldn't
otherwise be able to afford their rent. We were also extremely
disappointed with JD Sports in relation to the administration of
its subsidiary Go Outdoors, a tenant at our Piccadilly Basin site.
For a large, profitable and valuable company, their unwillingness
to stand by leases they had only recently acquired is unacceptable
and reflects very poorly on their senior management. Knowing they
were impacted by COVID-19, we made proposals to share the impact.
However, with their chosen approach landlords have had to take all
the rental pain. We presume they haven't treated their trade
suppliers in the same manner, otherwise they would have put their
supply chain in jeopardy. There is a presumption in insolvency
situations that all creditors should be treated equally. We hope
that in light of this the Government will seek to implement
legislation to prevent profitable companies acting in this way in
the future.
We have been able to support our tenants in part thanks to our
strong relationships with our banks and debenture holders. The
importance of good stakeholder engagement with our funders has been
demonstrated again during this crisis.
I have been particularly proud of the response from our
colleagues. The vast majority of our staff transitioned to working
from home, and in doing so demonstrated great flexibility and
resolve. We chose to furlough 53 staff, predominantly CitiPark
branch employees, and I would like to thank those colleagues for
their patience and understanding. Making use of the furlough scheme
was a necessary step, but I am pleased that during a difficult time
for all, we were able to continue to pay all staff 100% of their
salaries. We expect a lot from our staff, however we hope we have
demonstrated that we are always there to support them when they
need it.
I would also like to take this opportunity to thank Lynda
Shillaw, who has now left the business as Group Property Director.
As a long-standing friend of TCS we wish her and her family well
and wish her well in her future. Following Lynda's departure, we
have promoted Helen Green to the role of Property Director, and
appointed Craig Burrow, previously Director of Leeds at Bruntwood,
as Development Director. Both will report to me and as a result of
these changes we will not be appointing a Group Property
Director.
In line with our long history of being a local business with
strong ties to our communities, we were proud to be able to offer
free car parking and concessionary hotel accommodation to
hardworking NHS staff. We also championed many other initiatives
set up by our tenants to support key workers, the elderly and the
most vulnerable in the community during the pandemic.
Finally, for our shareholders, we are very disappointed to break
a 60-year track record of delivering a maintained or increased
dividend. The unpredictable nature of the COVID-19 crisis has made
the decision to reduce the final dividend payment for the year
unavoidable. We are pleased that we are able to pay a 1.75p final
dividend, totalling 5.00p for the full year. However, we recognise
that this represents a significant reduction for shareholders.
Outlook
I am extremely grateful to my colleagues and staff, who have
done an excellent job in difficult circumstances. With most of our
portfolio open and trading again, and staff returning to the
office, the business is recovering. It is now time for us to return
to business as usual. Our conservative and flexible approach has
allowed for our continued operation despite the disruption; however
looking forwards, we face an unprecedented level of
uncertainty.
The acceleration of our disposal programme, though essential for
generating cash, reducing risk and strengthening our foundations,
will have an effect on earnings and our dividend levels in the
coming years. That said, some of the cash generated from sales will
be available to reinvest where it's needed most, and we will do all
we can to see a return to previous levels as soon as possible.
There are many reasons to be positive though. Our portfolio is
unique and diversified, and our development pipeline continues to
be a key differentiator for us. We are not currently committed to
any single project but have GBP600m of development opportunities in
the pipeline, with flexibility over when and how these can be
delivered.
Overall, I have been very satisfied with our response to an
unprecedented situation. Despite the ongoing challenges of
COVID-19, I am certain that we remain an excellent long-term
investment proposition.
Valuation Summary
For the year to the 30(th) June 2020 the total portfolio,
including development and car parking assets, sales and purchases,
declined in value from GBP394.2m to GBP372.5m after a net movement
of GBP5.1m of capex, sales and purchases. This represents a decline
of 6.9% year on year.
TCS saw the like for like value of its portfolio also fall by
6.9% (GBP26.6m) after capex of GBP6.0m. TCS's retail assets bore
the brunt of the valuation reductions (GBP23.0m being 11.8%),
reflecting the major shift in both investor sentiment and retail
trading conditions. As reported at the half-year TCS experienced
only a 1.1% like for like decline in valuation in the first half of
the year, and therefore the remaining 5.8% fall has occurred in the
second half of the year, with the backdrop of the COVID-19
crisis.
Our development assets increased in value slightly by 2.6%, and
our Car Parks increased by 1.3% where a bounce back in customers is
being seen as the lockdown eases and long-term alternative uses are
identified and progressed. In the year, we sold two assets in
Shandwick Place, Edinburgh for GBP2.5m (3.7% above valuation) and
acquired 106b Kilburn High Road, London for GBP1.7m including
costs.
Our main and most complex asset, the Merrion Estate saw a 6.1%
decline (after capex) in value year on year from GBP156.9m to
GBP148.0m. More than a shopping centre, from initial inception, a
true mixed-use asset, this comprises of offices including our share
of Merrion House, retail space, a hotel and a multi-story car park.
The initial yield across the whole Merrion Estate of 6.8% signifies
a robust performance against others in the sector where retail
assets, particularly shopping centres have fallen by in excess of
20% in value.
The valuation of all of our properties except one are carried
out by CBRE and Jones Lang LaSalle. As a result of the COVID-19
crisis both companies have reported that valuations on the majority
of our properties are subject to a 'material valuation uncertainty'
clause as set out in the RICS Valuation Global Standards.
Sales and Purchases
It had been a relatively quiet year to the 30 June 2020 for
sales and purchases. However, as described earlier the COVID-19
crisis has prompted the Board to decide to accelerate the retail
and leisure disposal programme. Since 30 June 2020 we have agreed
the sale of four properties for a total of GBP35.2m. The sales were
marginally above June 2020 valuations in total, and include two
Waitrose stores and an Aldi/Home Bargains in Scotland, and a high
street retail store in Chiswick, London.
Our continued commitment to asset recycling is clear. The below
table details the GBP84.1m of disposals since FY17 of which 95%
were retail and leisure assets. Acquisitions of GBP30.6m included
only 24% retail and leisure.
GBPm Sales Purchases
================== =========== ================= ===========
% Retail & % Retail &
Leisure Leisure
FY17 22.3 88% 4.0 46%
FY18 10.1 95% 9.0 0%
FY19 14.0 100% 16.0 25%
FY20 2.5 100% 1.7 100%
FY21 to
date 35.2 100%
84.1 95% 30.6 24%
Retail and Leisure
The UK retail market has had a tough time over the last 18
months. Structural shifts in consumer behaviour and the shift to
multichannel retailing have been accelerated by the impact of
COVID-19.
With high streets closed for nearly three months to all but
non-essential retailers and office workers staying away from the
office, the easing of lockdown in recent weeks has supported
footfall improvements. However, d espite considerable weekly
growth, high street destinations over the summer remain at nearly
50% below 2019 levels with shopping centres slightly ahead of these
levels at the half year. Local regional high streets appear to be
responsible for driving the recovery of footfall as office workers
remain working from home and the feed through to larger urban
centres is much slower.
Retail parks have remained more resilient over the entire
period, benefiting from schemes anchored by essential retailers,
the earlier reopening of homeware retailers as well as being more
accessible by car and consisting of more spacious stores, allowing
for greater social distancing.
Through a landlord's lens, pressure on valuations, LTVs, rents
and leasing models are all being experienced. Despite Government
moratoria, codes of conduct, rates relief and other available
assistance, some retailers who can afford to rent have chosen not
to do so. In addition to a flurry of administrations and CVAs, most
tenants are seeking concessions on their leases.
Lockdown continued to hit the retail market in Q2, with yields
increasing across all asset classes. Prime UK high street yields
moved from 5.25% in March 2020, to 6.25% in June 2020 and prime
shopping centre yields now at 6.5%, up from 5.85% in March. Good
secondary high street yields for Q2 were up from Q1 to 8.50% and
secondary high street yields in Q2 were up from Q1 to 12.0% [1]
.
From a TCS perspective, total retail and leisure assets fell by
GBP23m or 11.8%. Merrion ex offices delivered an Initial Yield of
7.7% reflecting the skew in tenant mix to supermarket and value
retailers. Merrion's value fell by GBP7.3m or 7.9%. TCS's out of
town retail had an initial yield of 6.3% reflecting assets in well
placed suburbs and again, a tenant mix of food and value retailers,
with value falling GBP4.0m or 9.5%. Other retail and leisure assets
fell by GBP11.7m or 19.2%, with these more traditional standalone
retail units being most significantly impacted.
Our hotels, while both open for key workers, were impacted by
COVID-19, seeing values fall GBP2.7m or 10.5%. While yields have
only softened slightly to the 30(th) June, and the hospitality
sector is now slowly starting to recover as lockdown eases; the
speed of the recovery of the sector will depend on how quickly both
tourists and businesses come back into city centres at something
approaching pre-COVID-19 levels.
Regional Offices
Office investment volumes reached GBP1.3 billion outside of
central London in Q1 2020, which was a 24% increase in volumes
recorded in Q1 2019, although 15% below the long-term average. 43%
of office investment in the UK was outside of central London in Q1
2020 [2] .
The regional office markets have been quiet since COVID-19. Not
many prime assets are trading with a general lack of any new stock
coming to market. Investors are set to gauge general sentiment when
occupiers return to buildings and restrictions are eased. Yields
for prime offices in regional cities held at 4.75% to June
2020.
Every core regional city market has below two years of Grade A
supply. The development pipeline is limited and will not alleviate
the supply constraints that are present in the market. There is
currently 4.48 million sq ft under construction and 56% of this
total space in the regional city office market has been pre-let.
Nine of the regional office markets have a vacancy rate below 10%
which Savills classify as undersupplied. The total vacancy rate
across the core regional office markets combined is 7.1% which
compares favourably to the long-term average of 10%. Savills has
produced vacancy rate forecasts which underline the robust nature
of the market. 3
Our office portfolio dropped GBP2.3m or 2.9% over the year, the
majority of which was due to a reduction in the value of 123 Albion
Street as leases fall away, tenants vacate, and we were able to
refurbish. We expect this to recover. The value of TCS's share in
Merrion House was unchanged at GBP34.7m, at an initial yield of
4.49%. Ducie House and 123 Albion Street are currently undergoing
major refurbishments and we expect to see a corresponding uptick in
value post completion.
Residential
Given the current operating environment and little transactional
evidence in Q2, CBRE opted to maintain their benchmark yields at
the current level. However, since lockdown restrictions were eased,
there are early signs that deals are progressing at pre-lockdown
levels, with no significant pricing impact. Prime net yields
continue to range from 3.25% to 4.25%. Prime regional centres are
now trending stable, but yields may begin to weaken in more
secondary locations.
Although there was little activity in Q2, investment into the UK
multifamily sector looks poised to make a significant rebound in
the second half of 2020. There is a substantial investment pipeline
with just over GBP1.4bn worth of deals currently under offer. This
is broadly equivalent to the investment pipeline at the end of
2019, which then translated into GBP1bn of investment in Q1 2020.
Although it's not a certainty all of this will transact, it
nonetheless demonstrates the continued strong appetite for the UK
multifamily sector. Currently half of the investment pipeline is
spread across the prime regional centres. Approximately two-thirds
of the investment pipeline are forward funding agreements, with a
further 20% accounted for by direct site acquisitions. The lockdown
period has also served to demonstrate the relative resilience of
the multifamily sector, which has boosted investor appetite.
Specifically, multifamily rent collections have been resilient and
remained high, averaging 96% in May. This compares with 90%
(offices) 82% (logistics) and 63% (retail). Although we may see
modest rent falls in 2020, we expect the sector to return to growth
in 2021 and outperform. CBRE is currently forecasting total returns
of 5% per annum for multifamily over the next five years. This
compares with 3% and 2% per annum, for offices and retail
respectively. Overall, demand for UK multifamily remains strong.
Sentiment is positive and we are seeing early signs of an
increasing level of activity as the lockdown restrictions continue
to ease.
TCS's residential assets are concentrated in the city centres of
Leeds, Manchester, suburban London and Glasgow. Overall, we saw a
slight decline in the value of our residential portfolio year on
year of -1.3%. This was largely driven by a short-term softening of
rents in the Manchester market, reflecting both the impact of COVID
and the volume of stock coming into the market in 2021. Rents are
expected to return to a 3% per annum growth rate from 2022.
Appetite for high quality, centrally located residential sites in
Manchester from both tenants and investors remains strong. Our
Piccadilly Basin site remains one of the most centrally located and
accessible sites in the city and as such, we expect it to
outperform the market in the long-term.
Passing
rent ERV Value % of Valuation Initial Reversionary
GBPm GBPm GBPm portfolio incr/(decr) yield yield
Retail & Leisure 3.6 4.1 51.1 14% -19.2% 6.6% 7.5%
Merrion Centre
(ex offices) 7.0 7.4 85.7 23% -7.9% 7.7% 8.1%
Offices 3.8 6.2 82.5 22% -2.9% 4.4% 7.1%
Hotels 1.2 1.6 23.1 6% -10.5% 4.8% 6.7%
Out of town retail 2.5 2.5 38.0 10% -9.5% 6.3% 6.2%
Distribution 0.4 0.4 6.0 2% -2.1% 6.5% 6.7%
Residential 1.1 0.6 21.5 6% -1.3% 5.0% 2.8%
19.7 22.8 307.9 83% -8.6% 6.0% 7.0%
-------- -------------
Development property 1.6 1.6 37.8 10% 2.6%
Other Car parks 0.9 0.9 26.9 7% 1.3%
-------- ------ ------ ----------- -------------
Let portfolio 22.2 25.3 372.5 100% -6.9%
-------- ------ ------ ----------- -------------
Note: includes Merrion House within Offices and Burlington House
within Residential, and therefore differs from the notes in the
accounts
Note excludes IFRS 16 adjustments to Car Park valuations
Location Value %
Leeds 226.5 61%
Manchester 66.8 18%
Scotland 47.9 13%
London 30.2 8%
Other 1.2 0%
------ -----
372.5 100%
Sector Value %
Retail/leisure 174.8 47%
Hotels 23.1 6%
Office 82.5 22%
Car parking 26.9 7%
Distribution 6.0 2%
Residential 21.5 6%
Development 37.8 10%
372.5 100%
Lease Expiries Value %
0-5 years 9.5 48%
5-10 years 4.0 20%
Over 10 years 6.2 31%
------ -----
19.7 100%
Divisional Property Review
Overview
This has been a year of two parts for the business. In the first
two thirds of the year, we delivered robust operational performance
and made good progress against our strategic initiatives. We
continued to actively manage our assets, investing in refurbishment
projects including Ducie House in Manchester and 123 Albion Street
(formally known as The Cube) in Leeds, both of which offer high
quality office space.
We also signed a number of deals with new tenants from a diverse
range of sectors, including supermarkets and food and drink
outlets, and further expanded our Asian food offering at the
Merrion Centre. In addition, we successfully renewed leases with a
number of existing tenants in both our retail and office
portfolios, including Whittards, OKA, Cotswold, PCSU and K7.
We completed and launched our first PRS product in Manchester,
Burlington House. This 91 apartment Simpson Haugh designed building
has been a real success as well as a new iconic piece of
architecture in the city. Along with our JV partner GMI, we were
delighted to be awarded Apartment Developer of the Year at the
North West Residential Property Awards.
In the final third of the year, we have clearly been
significantly impacted by the disruption caused by COVID-19. This
period tested our colleagues, our relationships with our customers
and suppliers, and our operational capabilities in the most extreme
way imaginable. So far, our performance has proved to be very
reassuring, with income collection at 82%, significantly ahead of
the majority of our peer group. Overall, the strategy to diversify
the portfolio in recent years is proving to be a resilient and
sustainable one. We have had to provide for non-payment of GBP1.2m
of rental income.
Impact of COVID-19
Since February, COVID-19 has had a very significant impact on
our business. Our focus during this time has been on maximising our
capital and managing our cash flow while supporting our tenants and
employees and ensuring they can continue to work safely.
While the housing and industrial markets have remained more
resilient, the need to work remotely has led to a slowdown in
tenants looking for new office space. The retail and leisure sector
has been significantly impacted by COVID-19 and just under two
thirds of our retail and leisure businesses, including high street
shops, hotels, food and beverage outlets, gyms and hotels were
closed during the height of the lockdown period. This has impacted
rental payments and collection rates in the short and medium
term.
We have good relationships with most of our tenants,
particularly our smaller tenants, and have held one-on-one
discussions to find solutions, such as deferring payments or
renegotiating lease terms and we have shared the pain with those
most in need of support. As a result, we received or agreed to
defer payments for 86% of the rent and service charge due for the
period from March to the middle of September. However, a number of
our larger tenants have chosen to take advantage of the government
limiting the ability of landlords to pursue non-payment of rent.
This has resulted in some tenants who could pay choosing not to pay
their rent and service charges. This puts pressure on landlords,
like TCS, and significant uncertainty remains around the level of
rent receipts for the coming quarters.
COVID-19 has put additional significant pressure on retailers
and the food and hospitality sectors. We expect this to lead to
increasing pressure on rents, lower levels of rental growth and
continued lower levels of rent collection. We could also
potentially see a shift towards more flexible leases, for example,
a combination of fixed and turnover rent. It should be noted that
the nature of TCS's retail property portfolio means that we have
little exposure to those fashion retailers and department stores
who have been most hard hit. However, there remains a considerable
degree of uncertainty across the market in relation to the speed at
which normal business will resume, rent receipts, rental levels
going forward and the ability of tenants to continue trading.
TCS made the decision to put all capital projects on hold, with
the exception of 123 Albion Street (which completed in August 20),
in order to preserve cash during the height of the crisis. Work has
restarted post year end on Ducie House, due to complete this
autumn.
Our tenant portfolio
Over the past five years TCS has built an increasingly diverse
and mixed-use portfolio with a high quality and diverse tenant base
across a range of sectors including retail and leisure, office,
hospitality, food and drink and residential property. Through our
strategy of diversification, the proportion of retail and leisure
assets in the portfolio has reduced to 47% at year end, down from
70% in 2016. Pure retail represents only 35% of the total portfolio
and our retail portfolio remains focused on supermarket, discount,
and convenience retailing, which typically has higher footfall and
is less affected by the growth in internet shopping. As our
exposure to retail has been reduced, office space, food and drink
and private rented sector (PRS) residential assets have increased
share. As a result, we have been insulated to a degree from some of
the challenges currently facing the retail sector, but we have been
exposed to the challenges faced by our tenants in the food,
beverage and leisure sectors and are working through this with
them, supporting their recovery. The COVID-19 pandemic has
reinforced the need to continue with our strategy of repositioning
our portfolio by reducing our retail exposure going forward.
Key tenants include Leeds City Council, Morrisons, Step Change
debt charity, Pure Gym and Premier Inn.
Regional focus
TCS has a regionally focused property portfolio, with an
emphasis on the northern cities of Leeds and Manchester, which
together represented 79% of our portfolio by value at end FY20.
Leeds and Manchester are two of the largest conurbations in the UK
and have attracted significant investment from both UK and
international investors and delivered strong economic growth over
the past five years. The regions typically do not see the extreme
peaks and troughs in returns seen in the London property market,
providing a more stable and less volatile environment through the
cycle. As a result, we believe the fundamental longer-term outlook
for our Leeds and Manchester assets remains positive. The housing
market remains strong but the challenge of rebalancing the UK
economy and delivering the critical infrastructure required to
drive growth in the regions remains. Devolution deals have an
important role to play in rebalancing the economy and Leeds and
Manchester have two of the most significant devolution deals of all
of the English regions and key roles to play in drawing further
investment into big regional cities to attract businesses and
create jobs.
Leeds
Active asset management
Merrion Estate
The Merrion Estate has been a key asset in our portfolio for
over 55 years and one that we continue to evolve as a unique
mixed-use development consisting of retail and leisure, office and
car parking assets.
Adjacent to Leeds Arena and very much at the centre of a growing
student community from both existing student developments and
approximately 3,500 new student beds under construction around the
centre, our significant investment and focused asset management
activity has materially reinvented the centre, targeting the
growing local student population and the Leeds Arena crowds. With
various redevelopment opportunities still existing, we believe the
Merrion Estate continues to represent a valuable long-term
opportunity. During the year we continued to develop the
centre:
-- The office space is fully let serving a range of smaller and
larger tenants including Leeds City Council's headquarters and we
work hard to keep tenants on site and build strong
relationships.
-- Inside the centre, 23% of our space is retail, focused on the
more stable food and value sector of the market. 30% of our retail
tenants were able to remain open during lockdown including a large
Morrisons supermarket and we have supported our tenants during this
time, ensuring they are able to operate safely and helping other
tenants to get up and running as lockdown eases.
-- Outside the centre we have invested significantly to improve
the centre's fascia and kerb appeal. This has generated significant
interest and led to a raft of new tenants including the Co-op and a
variety of food outlets such as Starbucks, Blue Sakura, Dominos,
and a number of new Asian food offerings which are popular with the
local student population.
Ibis Styles hotel
Due to the direct impact of COVID-19 on the hospitality sector,
performance has been weak across our hotel and leisure assets.
However, forming part of the Merrion Estate, the hotel is in a key
location close to Leeds Infirmary and it has been able to help
support the local community by remaining open to key workers at a
discounted rate during the lockdown.
As people slowly return to work, the business is starting to
attract customers once again and it has expanded its marketing
channels to attract corporate bookings to help increase the
occupancy rate.
Refurbishing existing investment assets
Grade A space is in short supply in Leeds and Manchester. TCS is
spending over GBP7m on major refurbishments of 123 Albion Street in
Leeds and Ducie House in Manchester, and the common parts in
Carvers Warehouse. These great city centre locations are well
placed to benefit from the lack of available new Grade A stock on
the market and we are seeing strong levels of interest in 123
Albion Street where the refurbishment is complete.
123 Albion Street
Acquired in 2018, we have undertaken a net GBP4m refurbishment
of this building which achieved practical completion in August
2020. The building comprises 22,000 sq ft of leisure space on the
ground floor, with 50,000 sq ft of good quality office space over
three floors. It is located in central Leeds in close proximity to
the Merrion Estate and we have had healthy interest for occupancy
from the end of this year.
New tenants and lease renewals
At Vicar Lane, we have signed a ten-year lease with income of
GBP75,000 with a new tenant, We are Cow, a leading independent
retailer specialising in vintage clothing. This unit has now been
fitted out and is trading. We have successfully re-geared a number
of our properties during the year. At the Headrow in Leeds we have
agreed lease renewals with both Whittard (five years) and Greggs
(five years) while in West Park, Harrogate ten -- year lease
renewals have been signed with OKA and Cotswold Outdoor. All deals
have been at or close to passing rent.
Manchester
Manchester represents one of the largest UK city regions outside
London, with an economy worth GBP62.8 billion (GVA). This strength
has enabled it to establish an outstanding reputation as a
competitive place to do business, boasting a diverse and
high-quality portfolio of business properties. Talent-hungry
companies choose to invest in Manchester because of the people that
choose to live, work and study here.
Manchester is a leading European business destination and the
most successful UK city for attracting foreign direct investment
outside of London. The birthplace of the Industrial Revolution, it
continues to be a city which innovates across a variety of sectors.
As highlighted in The Data City for the UK's Top Digital Tech
Cities - 2020 report, Manchester outperforms all other major UK
cities in the fields of AI and data, advanced materials, cyber,
construction tech, eCommerce , IoT, MedTech and service design.
Refurbishing existing investment assets
Office space
In Manchester, vacancy rates for grade A office stock are
relatively low, and rents have risen steadily over the last five
years. With a lack of new build space, the city is also seeing
significant growth in refurbished space as these buildings offer an
attractive alternative to new developments.
Ducie House
Ducie House is a 33,000 sq ft multi -- tenant office building
where we are investing GBP2.2m in a full refurbishment of the
building during the year to create good quality working spaces
which can be let on flexible, short-term leases. Due to COVID-19,
the refurbishment was paused in the spring, but the work is now due
to be completed in October 2020 and we expect to see strong demand
as good quality refurbished office space is in short supply.
Carvers Warehouse
During the year we also invested GBP0.3m improving the common
areas in our Carvers Warehouse office building, creating social and
break-out space for our tenants. Carvers Warehouse continues to
have high occupancy levels and we are working hard to let the
remaining suite. Our investment has enabled us to ensure that the
asset is consistent with the best refurbished space available
locally, pushing rents on from an average of GBP16psf to GBP18psf.
The tone of the building is now GBP19-GBP20psf.
Residential
Housing in the region is in short supply and there are plans to
develop a minimum of 25,000 new homes in Manchester over the next
10 years. While there are some risks to the future outlook from
COVID-19, the residential market here remains robust with strong
investor developer interest for key sites.
Burlington House
Our first dedicated PRS building, Burlington House, in
Manchester, was completed and fully occupied by September 2019 and
we were pleased to be awarded Insider's North West Apartment
Developer of the Year for this development. It has continued to
enjoy high levels of occupancy during COVID-19 and we anticipate
that this will be a key step towards further PRS developments in
the Piccadilly Basin.
Scotland and London
We have had a long-standing presence in Scotland, however
following disposals over the past couple of years we have sold the
majority of our Edinburgh assets and now focus solely on Retail and
Residential assets in Glasgow and its close commuter town of
Milngavie.
In London, our investments are in good quality secondary high
street locations and primarily consist of retail and residential
mixed-use assets.
Refurbishing existing investment assets
We let the ground floor and basement of a property in Bath
Street, Glasgow, on a fifteen -- year lease to The Scotch Malt
Whisky Society at a headline rent of GBP30k per annum. The
transformational refurbishment has been a great success and the
tenant, opened for business in March before unfortunately having to
close temporarily as a result of COVID-19.
Acquisitions and disposals
In London, we bought a shop with upper residential space at 106b
Kilburn High Street for GBP1.61m. This was an opportunistic
purchase of an asset at an attractive price and yield adjacent to
an existing TCS asset.
We continue to look to maximise available capital partly through
the disposal of ex -- growth assets. In January 2020 we completed
the sale of a retail unit in Shandwick Place in Edinburgh. The
6,000 sq ft unit was empty but let for a remaining eight years to
Morrisons, and has been sold for GBP2m, 5% above valuation, at a
yield of 7%.
We continue to explore opportunities to dispose of retail assets
at the right price.
Development pipeline
Our development pipeline of over GBP600m has been built up over
time and is a major value creation opportunity for the business,
providing TCS with opportunities to support the business and
generate long-term value on a case-by-case basis. We take a
conservative, long-term approach to development to ensure we do not
overcommit ourselves, exploiting opportunities when the timing is
right and controlling the pace of development.
In the current uncertain and changing market environment, our
focus is capital management and some development projects are
therefore under review as we assess the opportunities.
-- We were in the planning process for a 50/50 joint venture
with Leeds City Council to develop a 136 room Apart -- Hotel on
George Street in Leeds. Our original plan was to use shares in the
joint venture as security to fund the asset, but in the current
environment this has proven unachievable, and therefore we have
decided not to proceed.
-- Our planning consent for Whitehall Road in Leeds to develop a
180,000 sq ft Grade A office space and 513 space multi-storey car
park has been implemented and we continue to market the site to
secure a pre-let. We are also reviewing alternative options for the
Whitehall Road development site in order to ensure we can maximise
value from this prime location.
-- We still see long-term value in residential property,
particularly prime sites with major transport links, and this will
enable us to continue to diversify away from retail. Our Eider
House development, our second PRS scheme in Manchester's Piccadilly
Basin, meets these criteria and has been granted planning consent.
We intend to proceed with this development, but the timing is
currently under review.
Over the long-term we believe our development pipeline continues
to present material opportunities for TCS.
Divisional CitiPark Review
CitiPark
CitiPark is a strong and profitable standalone business in its
own right, and also plays a valuable role in monetising what would
otherwise be empty, non -- income producing, development assets in
Leeds and Manchester.
Overview
Until the end of February 2020, CitiPark enjoyed a strong year
and saw significant year on year improvement in both revenue and
profitability. We introduced a number of new initiatives during
this period, including launching our own parking app and offering
instantly available season tickets to car park users. We have also
taken significant steps to expand our car park management services
platform, successfully adding two new locations in the past twelve
months. An important development for the business was the launch of
BaySentry Solutions, our parking enforcement company, which started
operations on 1(st) January 2020.
COVID-19
Since the end of February, COVID-19 has had a very significant
adverse effect on our business. Business closures across the
commercial, leisure & retail sectors combined with the
restrictions on movement during lockdown reduced the use of car
parks. The majority of our car parks were closed and we also saw
season ticket cancellations. In addition, car parks were not able
to benefit from the UK government's business rates relief scheme.
This has materially impacted our profitability, leading to profit
for FY20 of GBP2.6m (pre IFRS 16) compared to a profit of GBP4.4m
for FY19. Given the growth expected and seen in the first eight
months of the year we estimate COVID-19 to have impacted CitiPark
profitability by GBP2.0m in the year.
We were proactive in taking action to manage the impacts on the
business by:
-- Implementing cost saving initiatives across the business;
-- Making use of the furlough scheme, furloughing approximately
80% of our car park business employees including our hourly paid
operations staff;
-- Closing our operations in Leeds, Manchester and Watford and
making partial closures throughout the rest of our portfolio
helping to minimise costs, in particular business rates; and
-- Cancelling or suspending non-essential contracts and services wherever possible.
The measures we have taken combined with our strong early start
to the year, mean that we have been able to successfully navigate
this challenging situation and are well-positioned to benefit as
the economy begins to open up. We are starting to see an
improvement in business, our branches are now open, and we expect
this improvement to accelerate as consumers move away from public
transport and companies buy parking spaces for their employees so
they can drive to work.
Supporting our stakeholders
During this difficult time, despite the adverse effect on our
business from COVID-19, we felt it was important to support the NHS
and other key workers, in line with our commitment to contribute
positively to our local communities. We therefore offered our
services and premises to the NHS, becoming an NHS supplier so we
could open car parks and provide 6,500 car parking spaces to be
used completely free-of charge as and when needed, worth
GBP80,000.
We also put in place support mechanisms for our employees,
including topping up the pay of those staff who were furloughed so
they continued to receive their full salaries and providing regular
updates and touch points for all our employees. To protect our
staff as they return to work, we have conducted new risk
assessments for all our car parks and ensured that our employees
have access to suitable PPE and hand sanitisers.
Finally, we have been working together with high street
retailers and other operators to encourage people back to their
offices and businesses, and therefore using our car parking
facilities.
Our performance
During the first eight months of the year, CitiPark made good
progress and saw strong growth, increasing revenues by 4.7% against
the same period in the previous year.
We added over 1,500 parking spaces to our portfolio and
following our successful partnership with John Lewis, we took on
car park management contracts at two new locations, Victoria Mills,
Shipley and the Manchester Arena car park, a prime car park with
978 parking spaces in a flagship location. This went live
successfully on 1(st) April 2020, despite the challenges during
this time, and we remain confident on the outlook for this
location. Car park management services remain a growth opportunity
for the business going forward.
Developing technological solutions
We also continued to focus on technological improvements and
progressed various new initiatives during the year:
-- developing and launching our own fully integrated CitiPark
app, enabling our customers to pre-book parking and other services
via their mobile devices, whilst also allowing third party
integration (e.g. YPS);
-- offering digital season tickets that can be downloaded to
mobile phones eliminating the need for a plastic card, and;
-- providing mobile pay, scan and pay solutions at all our CitiPark car parks.
We have seen strong take up of these new solutions, recording
over 16,900 pre-bookings and over 12,600 mobile payment
transactions since launch and issuing over 500 digital season
tickets.
In addition, we have developed our own parking management system
which utilises ANPR technology and our own app. This system has
been introduced at our Ducie Street, Burlington and Victoria Mills
car parks during the year and we intend to roll this out more
widely across our portfolio in the coming year.
CitiCharge
The business continues to look at developing sustainable and
environmentally responsible solutions and we view this as an
opportunity to create additional value going forward. Sales of
electric cars continue to grow rapidly and as a result, we are
seeing increased demand for electric vehicle (EV) charging points.
As part of our CitiCharge plan to roll out EV charging points
across all our appropriate investment property, we installed EV
bays in the car park of our Milngavie retail property during the
year. Post year-end we won an order to supply 35 EV chargers to
Coventry NHS hospital, a significant contract which also provides
us with a potential opportunity for further collaboration on future
NHS projects.
BaySentry
In order to deter inconsiderate parking and ensure that there
are car parking spaces available for fee-paying customers, we use
enforcement services across our car parks, which have previously
been contracted to a third-party supplier. We saw an opportunity to
reduce our costs and gain an additional income stream by supplying
these services ourselves.
BaySentry Solutions Ltd, our parking management company, started
operating in January 2020 following receipt of its accreditation
from the British Parking Association Approved Operator Scheme. We
currently have contracts in place to provide enforcement services
and issue Parking Charge Notices (PCNs) at six branches and this
will expand further.
Going forward, we shall be able to add our enforcement services
to any future car park management contracts agreement tenders in
the wider market, often seen as a prerequisite to those looking for
an operator.
Yourparkingspace.co.uk (YPS)
YPS is an internet and app-based business that matches customers
to available car parking spaces across the UK. It has over 87,000
spaces available to book in over 15,000 different locations. TCS
has a stake in YPS, and in line with its original investment
agreement, TCS exercised a further share purchase option in the
year. Our equity stake at 30 June 2020 stood at 19.9%.
YPS, like all parking businesses, has been impacted by COVID-19.
However, it has managed its cash and expenses very carefully,
remains in good financial shape and has seen a significant upturn
in business in the past few months.
Since the 30(th) June YPS has concluded a further round of
fundraising with a new private equity investor investing cash into
the business for the next phase of growth, and becoming a
significant lead shareholder. As part of the process TCS executed
its final option agreement, and post completion of the transaction
will hold 21.7% of the business.
Outlook
The easing of lockdown measures since the middle of June has
enabled shops and businesses to reopen and staff to return to work
and we have started to see customers returning to our car parks. We
expect the business to recover relatively quickly as confidence
returns and consumers are encouraged to support local businesses.
We have put measures in place to ensure we are able to operate
safely and effectively going forward, including phasing out cash as
a form of payment across our car parks and implementing new, safe
ways of working to protect our staff and customers.
We also continue to look at growth opportunities, including the
addition of new management services contracts, the growth of our EV
charging platform and further development of our app including the
integration of the emissions-based tariffs and the expansion of our
BaySentry Solutions business.
FINANCIAL REVIEW
COVID-19 has materially impacted financial performance in FY20
and uncertainty remains. However, the strength of our portfolio has
delivered good levels of rent receipts allowing TCS to think
strategically about the future.
EPRA Earnings in the year were GBP2.1m. This is the first year
that the financial statements are presented in accordance with IFRS
16 which effects how we account for leases that we have entered
into. For a full explanation of the effect and implications see
below. As a result of the changes relating to this standard, we are
introducing an additional income statement measure of Adjusted EPRA
Earnings which removes the effect of IFRS 16 making the results
directly comparable with the prior year's financial statements
which have not been restated. Adjusted EPRA Earnings in the year
were GBP2.6m, down GBP3.7m on the prior year.
COVID-19 has had a material impact on our financial performance,
and we estimate a total impact to earnings in the year of GBP3.6m.
We estimate that our Investment Property business has been impacted
by GBP1.2m, primarily as a result of bad debt provisions associated
with non-payment of rental income and service charges. The impact
to our CitiPark business is GBP2.0m due to a significant reduction
in car parking income with many fixed costs, such as rent and
rates. Our ibis Styles hotel has been impacted by GBP0.4m in the
year.
With adjusted EPRA Earnings in the year 59% lower than last
year, and with pressure on cashflow and headroom we have had to
make the very difficult decision to reduce our dividend for the
first time in our history. The unprecedented impact of COVID-19 and
the level of uncertainty that has arisen means we believe this is
the only responsible action to take for the sake of the long-term
prosperity of the Company. The final dividend for the year will be
1.75p per share, giving a full year dividend of 5.00p per
share.
The impact of COVID-19 disruption has prompted the Company to
revisit it's strategy, and agree to an acceleration of the retail
and leisure disposal programme, albeit only at sensible values.
Whilst the Board has yet to finalise plans for the use of the
disposal proceeds, it is anticipated that TCS will look to reduce
borrowing levels further. This, combined with the inevitable gap
between asset sales and any asset purchases, will lead to a longer
period of reduced earnings which will inevitably lead to a lower
level of dividend payment than in recent years.
Income Statement
EPRA Earnings for the year ended 30 June 2020 were GBP2.1m.
Adjusted EPRA Earnings (removing the effect of IFRS 16) were
GBP2.6m down on the prior year profit of GBP6.4m.
FY20 FY20
inc exc
IFRS IFRS
GBP'000s 16 16 FY19 YOY
--------- --------- --------- --------
Gross Revenue 26,702 26,702 31,189 (14.4%)
Property Expenses (10,643) (11,149) (11,600) (3.9%)
Net Revenue 16,059 15,553 19,589 (20.6%)
--------- --------- --------- --------
Other Income /
JV Profit 2,018 2,018 1,649 22.4%
Other Expenses (777) (777) 0 -
Administrative
Expenses (6,197) (6,197) (6,857) (9.6%)
Operating Profit 11,103 10,597 14,381 (26.3%)
--------- --------- --------- --------
Finance Costs (9,009) (7,975) (8,025) (0.6%)
EPRA Earnings 2,094 2,622 6,356 (58.7%)
--------- --------- --------- --------
FY20
exc
IFRS
Segmental 16 FY19 YOY
------- ------- --------
Property
Net Revenue 11,676 13,970 (16.4%)
Operating Profit 7,830 9,725 (19.5%)
CitiPark
Net Revenue 3,740 5,388 (30.6%)
Operating Profit 2,630 4,425 (40.6%)
ibis Styles Hotel
Net Revenue 137 231 (40.7%)
Operating Profit 137 231 (40.7%)
Excluding the estimated impact of COVID-19 on our results,
underlying Adjusted EPRA Earnings would have been circa GBP0.1m
down year on year with the key drivers being:
Property (GBP0.7m) down year on year underlying:
- TCS took the decision not to continue with the planned George
Street aparthotel joint venture with Leeds City Council and the
income statement reflects a GBP0.8m provision against the capital
expenditure. We are looking for opportunities to recover some of
this cost.
- As reported at the half year, TCS benefited from a one off
GBP0.5m dilapidations payment in respect of 123 Albion Street. As
expected, the benefit of this increase in Other Income has been
offset as a result of the reduction in rental income year on year
from the building as it was redeveloped and significantly
vacant.
CitiPark GBP0.2m up year on year underlying:
- This underlying improvement was seen in the first half of the
year reflective of the previously strong run rate.
Ibis Styles Hotel GBP0.3m up year on year underlying:
- One-off costs associated with the change in the restaurant in
FY19 meant an expected and significant increase in profitability
year on year in FY20, and this was indeed being achieved in the
first 8 months of the year.
In addition, Interest costs were GBP0.05m lower year on
year.
Statutory Profit
On a statutory basis the reported loss for the year, on an IFRS
16 basis, was GBP24.2m, GBP11.7m worse year on year.
The statutory profit reflects the EPRA Earnings of GBP2.09m less
GBP26.42m of non-cash valuation and impairment movements plus a
GBP0.17m profit on disposal from Brownsfield Mill, Manchester and
two properties in Scotland.
The year on year worsening of GBP11.7m is due to the valuation
write down being GBP8.31m worse, underlying EPRA earnings being
GBP3.73m worse, disposals improving the result by GBP0.88 year on
year and the introduction of IFRS 16 impacting FY20 by GBP0.53m
(see following IFRS 16 section).
Gross Revenue
Gross revenue was down GBP4.5m or 14.4% year on year, with key
drivers being:
-- Property rents impacted by COVID-19 with GBP1.3m of net
incremental bad debt provisions where no agreement has been reached
on payment of outstanding rent or where payments have agreed to be
deferred but doubt remains over the likelihood of receipt and
therefore the income has not been recognised
-- CitiPark revenues were materially reduced due to COVID-19
from March through to the end of the year. Whilst some monthly
subscription income kept being received, daily receipts were down
over 90% with half of the branches being closed for the period. The
estimated impact to revenue is GBP2.3m
-- Income for the ibis Styles hotel was impacted by COVID-19 by
an estimated GBP1.0m
-- Underlying improvements in income, particularly in CitiPark
and the Hotel marginally offset the impact of COVID-19
Property Expense
At a Company level, property expenses excluding the effect of
IFRS 16 were down 3.9% or GBP0.45m year on year. Key drivers of
this underlying decrease were:
-- Property: operating expenses were GBP0.47m higher year on
year predominantly due to a one off write off of historic service
charges now deemed to be irrecoverable
-- CitiPark: operating expenses were GBP0.31m lower year on year
primarily as a result of savings initiated as a result of COVID-19
including furlough savings, reduced rates costs where branches were
closed, and operational cost savings due to the significantly
reduced level of transactions
-- Ibis Hotel: operating expenses were GBP0.62m lower year on
year, driven primarily by the response to the COVID-19 crisis.
Whilst the hotel operated at all times, supporting key workers, the
operation was able to reduce variable operating costs including the
furloughing of some staff
-- In addition, the implementation of IFRS 16 reduced Property
expenses by a further GBP0.51m with the removal of certain rental
expenses partly offset by depreciation of the newly created "right
of use" assets
Other / JV Income
Total Other / JV income was up 22.4% or GBP0.4m year on year.
This is explained by two key items:
-- Dilapidations income of GBP0.6m was GBP0.6m up year on year
mainly as a result of the dilapidations payment in respect of 123
Albion Street, Leeds
-- Income from joint ventures was down GBP0.3m year on year
driven by the annualisation of the financing agreement in respect
of Merrion House, where our share of income is reduced by the
effective interest cost
Other Expenses
This cost is due to a one-off provision against capitalised
costs associated with the proposed George Street aparthotel joint
venture with Leeds City Council. TCS incurred GBP0.8m of cost
associated with getting the building designed and through planning
approval. Our intention was to be a long-term partner in the joint
venture. However, given the current climate, we have been unable to
secure a commitment to use our share in the joint venture as
security for debt. Without being able to leverage the asset and
with a need for the project to proceed, we have taken the decision
to end our involvement and provide against the spend to date. We
are working with partners involved in the project to look to hand
over the output of our work in return for a financial contribution
towards our costs, albeit nothing yet has been agreed.
Administrative Expenses
Administrative costs were GBP0.7m lower year on year. This
includes GBP0.1m for the last quarter as a result of all the
Directors agreeing to a 20% salary and fees cut. There is a further
GBP0.2m saving year on year in bonuses. Further savings arose as a
result of significantly reduced spend on advertising, travel,
entertaining and other expenditure as a result of our response to
COVID-19.
Finance Costs
Excluding the effect of IFRS 16, Finance costs were 0.6% or
GBP0.05m lower year on year. This is due to lower levels of LIBOR
year on year.
Balance Sheet
The below table shows the year end balance sheet as reported
including the IFRS 16 implementation. In addition, it is shown
excluding IFRS 16 to allow for a like for like comparison with the
prior year.
Excluding IFRS 16 NAV is GBP156.0m, down GBP32.3m or 17.1% year
on year. IFRS 16 has the effect of reducing NAV by GBP0.5m but more
significantly materially increases both assets and liabilities
reflecting the creation of the "right of use" assets and the
corresponding lease liabilities.
FY20 FY20
GBPm inc IFRS16 exc IFRS16 FY19 vs FY19
------------ ------------ -------- --------
Investment properties* 266.4 265.8 288.0 (7.7%)
Development properties 37.8 37.8 36.5 3.4%
Car Parks 56.8 31.0 30.7 0.8%
============ ============ ======== ========
361.0 334.6 355.2 (5.8%)
Joint ventures 13.8 13.8 13.4 2.6%
Other non-current
assets 1.1 1.1 1.6 (30.9%)
Total non-current
assets inc available
for sale 375.8 349.4 370.2 (5.6%)
Net borrowings (214.2) (186.9) (182.0) 2.7%
Other assets/(liabilities) (6.1) (6.5) (0.0) n/a
EPRA NAV 155.5 156.0 188.3 (17.1%)
EPRA NAV per share 292p 293p 354p (17.1%)
* includes Assets
held for sale
All the below commentary in relation to the balance sheet is on
a comparable basis to prior year excluding the effect of IFRS 16.
See below for detail on the effect of the new standard on the
statutory accounts. In addition, in the reported balance sheet we
have classified our two Waitrose stores in Milngavie as available
for sale with a value of GBP23.2m. At the 30 June 2020, heads of
terms for the sale of these properties has been agreed hence their
change in categorisation. These stores were subsequently sold after
the year end. For comparability purposes, the numbers in the table
above and described below include these properties in Non-Current
Assets.
Our total non-current assets (including JVs) of GBP349.4m (2019:
GBP370.2m) include GBP317.4m of investment properties (2019:
GBP337.9m) and GBP31.0m of non-current car parking assets (2019:
GBP30.7m). The Merrion Centre car park is included in the
investment property asset value. The car parking assets include
GBP4m (2019: GBP4m) of goodwill arising on business
combinations.
The most significant driver of the decrease in non-current
assets year on year is the GBP26.3m of non-cash valuation movements
reflecting a 6.9% like for like reduction. The majority of this
reduction has come in the second half of the year, and is
significantly affected by the uncertainty due to COVID-19,
particularly in relation to retail and leisure assets. At the
December 2019 valuation TCS experienced only a 1.2% like for like
reduction in value from June 2019.
Although we paused the vast majority of our capital expenditure
from March onwards in order to preserve cash during the initial
uncertainty of the COVID-19 crisis, across the year we invested a
total of GBP6.0m of capital expenditure in our properties. This
included GBP3.3m as part of the refurbishment of 123 Albion Street,
GBP1.0m as part of the Ducie House refurbishment and GBP0.6m of
improvements in the Merrion Centre. Capital recycling comprised
GBP2.5m of sales and GBP1.7m of purchases.
Borrowings (excluding IFRS 16):
As in previous years we have total borrowing facilities of
GBP214m. These facilities are comprised of 3 revolving bank
facilities and a GBP106m long term debenture at a fixed rate of
5.375% which expires in 2031.
Two of the three bank facilities expire within twelve months of
the year end and are therefore classed as current liabilities in
the balance sheet. Since the year end we have already extended our
GBP33m facility with NatWest for a further year on the same terms
and margin, and this facility now expires in April 2022.
Our Lloyds Bank facility's initial three-year term expires in
June 2021. However the facility allows for two one-year extensions
and this is currently in the process of being requested. The Lloyds
facility is a GBP35m revolving credit facility with a further GBP5m
overdraft facility.
Finally, our GBP35m Handelsbanken facility does not expire until
June 2023.
Net Borrowing (excluding finance leases) as at 30 June 2020 was
GBP183.6m. This is GBP5.8m higher than a year ago driven
effectively by the GBP6.0m capex investment with earnings impacted
by the COVID-19 crisis.
Loan to value on this basis is 53.2% up from 48.8% a year ago
and 48.5% in December 2019. The driver of the increase being the
GBP26.3m reduction in value of the investment portfolio. On a
proforma basis, the addition of the GBP35.2m of sales since 30 June
2020 improves LTV to 47.9%
IFRS 16
As stated above, these financial statements are presented in
accordance with IFRS 16. Under IFRS 16, while total lease related
charges over the life of a lease remain unchanged, the lease
charges are now characterised as depreciation and financing
expenses with higher total expense in the early periods of a lease
and lower total expenses in the later periods of the lease. In
addition, on the balance sheet, the accounting treatment has the
effect of creating new assets on the balance sheet for these "right
of use" leased assets, partly offset by a liability reflecting the
future obligation to make lease payments. On the balance sheet, as
with the income statement, the effect is neutral over the life of
the lease but lowers net asset value in the early periods,
reversing over time.
The leases effected by the change in accounting treatment reside
primarily within the CitiPark segment of our financial results,
flowing into the consolidated results.
In the twelve months ended 30 June 2020 the effect of IFRS 16 is
as follows:
Income Statement
A net reduction in statutory profit (and EPRA Earnings) of
GBP0.53m, comprising a GBP1.14m increase in depreciation and a
GBP1.03m increase in interest costs, partly offset by a GBP1.65m
reduction in rental expenses.
Balance Sheet
A net reduction in net assets of GBP0.53m, comprising a
GBP26.40m increase in non-current assets, offset by a GBP25.62m
increase in financial liabilities and a GBP1.31m increase in
current liabilities.
As a result of these changes we are introducing an additional
income statement measure of Adjusted EPRA Earnings which removes
the effect of IFRS 16 making the result directly comparable with
the prior year's financial statements which have not been
restated.
Given the effect on the balance sheet is minimal, accounting for
only 0.34% of the total net assets we shall only report on net
assets including the IFRS 16 adjustment. However, both non-current
assets and liabilities are materially affected, and we shall
highlight pre and post IFRS 16 values for clarity and comparison
purposes.
Future financial considerations
Future P&L pressure
As highlighted elsewhere in this report, we have not escaped the
impact of COVID-19 and changing shopping habits, particularly
affecting retail and leisure tenants, and, given the current
climate, it is prudent to assume that this risk will continue. We
are prudently assuming that over the coming two quarters that rent
receipts will continue to be challenged.
As already described, we have made the decision to accelerate
our retail disposal programme, and this is likely to put future
earnings under pressure. The Board is reviewing options for how the
proceeds of such sales could be utilised including debt repayment,
asset purchases and share buybacks.
Whilst the reduction in the dividend in the current year is due
to the impact of COVID-19, the combination of likely shortfalls in
rent receipts over the coming quarters and loss of income due to
disposals are likely to lead to continued pressure on our ability
to pay a higher covered dividend.
Future balance sheet and covenant pressure
As described in the valuation report, the circumstances relating
to COVID-19 have led to our valuers CBRE and JLL including
uncertainty clauses as part of their valuations in relation to the
majority of our assets. As identified in the risk report, we have
highlighted the continued pressure on retail and leisure assets to
be a significant risk to the business. Whilst we comfortably met
all of our banking and debenture covenants as at 30 June 2020, the
revaluation process in December 2020 presents a further risk to
loan to value covenants.
Our expectation is that continued asset sales and debt
repayments, combined with the strength of our underlying asset
base, the Merrion Estate in particular, will ensure we are able to
successfully navigate these challenges. The risk however remains
significant.
Going concern and headroom
One of the most critical judgements for the Board is the
headroom in the Group's debt facilities. This is calculated as the
maximum amount that could be borrowed, taking into account the
properties secured to the funders and the facilities in place. The
total headroom at 30 June 2020 was GBP14.8m (2019: GBP26.1m), which
was considered to be sufficient to support our going concern
conclusion.
Total shareholder return and total property return
Total shareholder return of minus 50.4% (2019: minus 25.0%) was
calculated as the total of dividends paid during the financial year
of 11.75p (2019: 11.75p) and the movement in the share price
between 30 June 2019 (205p) and 30 June 2020 (95p), assuming
reinvestment of dividends. This compares with the FTSE All Share
REIT index at minus 10.1% (2019: minus 5.2%) for the same
period.
Disappointingly TCS has seen its share price come under
significant pressure despite the dividend performance over the
measured timescales. The Company's share price continues to trade
at a significant discount to its NAV, impacting total shareholder
return. The long-term twenty-year measure remains positive.
Total shareholder returns
% (CAGR)
Total shareholder returns 1 Year 10 Years 20 Years
Town Centre Securities (50.4%) 0.8% 5.0%
FTSE All Share REIT
index (10.1%) 8.1% 2.3%
Total property returns
MSCI Quarterly
TCS index
Retail (7.8%) (12.7%)
Retail Warehouses (4.3%) (14.9%)
Shopping Centres (5.5%) (22.8%)
Offices 3.4% 1.4%
All Property (2.1%) (2.9%)
(12 months ending June 2020)
Total Property Return is calculated as the net operating profit
and gains / losses from property sales and valuations as a
percentage of the opening investment properties.
Total Property Return for the business for the reported 12
months was (2.1%) (2019: 1.3%). This compared to the MSCI/IPD
market return of (2.9%) (2019: 3.1%).
Consolidated income statement
for the year ended 30 June 2020
2020 2019
Notes GBP000 GBP000
--------------------------------------------- ------ --------- ---------
Gross revenue 27,989 31,418
Provision for impairment of debtors (1,478) (229)
Property expenses (10,452) (11,600)
--------------------------------------------- ------ --------- ---------
Net revenue 16,059 19,589
Administrative expenses 2 (6,197) (6,857)
Other income 3 1,218 574
Other expenses (777) -
Valuation movement on investment properties (26,324) (18,308)
Reversal of impairment of car parking
assets 250 200
Profit/(loss) on disposal of investment
properties 168 (709)
Share of post tax profits from joint
ventures 450 1,067
--------------------------------------------- ------ --------- ---------
Operating loss (15,153) (4,444)
Finance costs (9,009) (8,025)
--------------------------------------------- ------ --------- ---------
Loss before taxation (24,162) (12,469)
Taxation - -
--------------------------------------------- ------ --------- ---------
Loss for the year attributable to owners
of the Parent (24,162) (12,469)
--------------------------------------------- ------ --------- ---------
Earnings per share
Basic and diluted 4 (45.5)p (23.4)p
EPRA (non-GAAP measure) 4 3.9p 12.0p
Adjusted EPRA (non-GAAP measure) 4.9p 12.0p
--------------------------------------------- ------ --------- ---------
Dividends per share
Paid during the year 5 11.75p 11.75p
Proposed 5 1.75p 8.5p
--------------------------------------------- ------ --------- ---------
Consolidated statement of comprehensive income
for the year ended 30 June 2020
2020 2019
GBP000 GBP000
----------------------------------------------------- ----------- ----------
Loss for the year (24,162) (12,469)
Items that may be subsequently reclassified
to profit or loss
Revaluation movement on car parking
assets - 500
Items that will not be subsequently
reclassified to profit or loss
Revaluation (losses)/gains on other
investments (2,363) 2,341
------------------------------------------------------ ----------- ----------
Total other comprehensive (loss)/ income (2,363) 2,841
------------------------------------------------------ ----------- ----------
Total comprehensive loss for the year (26,525) (9,628)
------------------------------------------------------ ----------- ----------
All profit and total comprehensive income for the year is attributable
to owners of the Parent.
Consolidated balance sheet
as at 30 June 2020
2020 2019
Notes GBP000 GBP000
------------------------------------------------- ------ ---------- ----------
Non-current assets
Property rental
Investment properties 6 280,914 324,500
Investments in joint ventures 7 13,751 13,387
294,665 337,887
------------------------------------------------- ------ ---------- ----------
Car park activities
Freehold and leasehold properties 6 50,159 24,194
Goodwill 4,024 4,024
Investments 2,656 2,510
------------------------------------------------- ------ ---------- ----------
56,839 30,728
------------------------------------------------- ------ ---------- ----------
Fixtures, equipment and motor vehicles 1,113 1,609
------------------------------------------------- ------ ---------- ----------
Total non-current assets 352,617 370,224
------------------------------------------------- ------ ---------- ----------
Current assets
Investments 3,508 5,871
Assets held for sale 6 23,199 -
Trade and other receivables 3,468 5,354
Cash and cash equivalents 12,643 23,692
------------------------------------------------- ------ ---------- ----------
Total current assets 42,818 34,917
------------------------------------------------- ------ ---------- ----------
Total assets 395,435 405,141
------------------------------------------------- ------ ---------- ----------
Current liabilities
Trade and other payables (23,382) (34,739)
Financial liabilities (61,984) -
Total current liabilities (85,366) (34,739)
------------------------------------------------- ------ ---------- ----------
Non-current liabilities
Financial liabilities (154,591) (182,152)
------------------------------------------------- ------ ---------- ----------
Total liabilities (239,957) (216,891)
------------------------------------------------- ------ ---------- ----------
Net assets 155,478 188,250
------------------------------------------------- ------ ---------- ----------
Equity attributable to the owners of the Parent
Called up share capital 8 13,290 13,290
Share premium account 200 200
Capital redemption reserve 559 559
Revaluation reserve 750 250
Retained earnings 140,679 173,951
------------------------------------------------- ------ ---------- ----------
Total equity 155,478 188,250
------------------------------------------------- ------ ---------- ----------
Net asset value per share 10 292p 354p
------------------------------------------------- ------ ---------- ----------
Consolidated statement of Changes in Equity
as at 30 June 2020
Share capital Share Capital Revaluation Retained Total equity
premium account redemption reserve earnings
reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------- -------------- ---------------- --------------- ---------------- ---------------- -------------
Balance at 30
June 2018 13,290 200 559 250 189,826 204,125
Comprehensive
income for the
year
Loss for the
year - - - - (12,469) (12,469)
Other
comprehensive
income - - - - 2,841 2,841
-------------- ---------------- --------------- ---------------- ---------------- -------------
Total
comprehensive
income for the
year - - - - (9,628) (9,628)
Contributions
by and
distributions
to owners
Final dividend
relating to
the year ended
30 June 2018 - - - - (4,519) (4,519)
Interim
dividend
relating to
the year ended
30 June 2019 - - - - (1,728) (1,728)
---------------- -------------- ---------------- --------------- ---------------- ---------------- -------------
Balance at 30
June 2019 13,290 200 559 250 173,951 188,250
---------------- -------------- ---------------- --------------- ---------------- ---------------- -------------
Comprehensive
income for the
year
Loss for the
year - - - - (24,162) (24,162)
Other
comprehensive
income - - - - (2,363) (2,363)
Transfer - - - 500 (500) -
-------------- ---------------- --------------- ---------------- ---------------- -------------
Total
comprehensive
loss for the
year - - - 500 (27,025) (26,525)
Contributions
by and
distributions
to owners
Final dividend
relating to
the year ended
30 June 2019 - - - - (4,519) (4,519)
Interim
dividend
relating to
the year ended
30 June 2020 - - - - (1,728) (1,728)
---------------- -------------- ---------------- --------------- ---------------- ---------------- -------------
Balance at 30
June 2020 13,290 200 559 750 140,679 155,478
---------------- -------------- ---------------- --------------- ---------------- ---------------- -------------
Consolidated cash flow statement
for the year ended 30 June 2020
2020 2019
------------------- --------------------
Notes GBP000 GBP000 GBP000 GBP000
------------------------------------------ ------ -------- --------- --------- ---------
Cash flows from operating activities
Cash generated from operations 9 14,433 11,090
Interest paid (7,648) (7,678)
------------------------------------------ ------ -------- --------- --------- ---------
Net cash generated from operating
activities 6,785 3,412
------------------------------------------ ------ -------- --------- --------- ---------
Cash flows from investing activities
Purchase and construction of investment
properties (1,610) (25,517)
Refurbishment of investment properties (5,442) (3,740)
Payments for leasehold property
improvements (25) (255)
Purchases of fixtures, equipment
and motor vehicles (93) (814)
Proceeds from sale of investment
properties 2,494 17,089
Proceeds from sale of fixed assets - 23
Payments for acquisition of non-listed
investments (146) (385)
Repayment of loans from/(investments
in) joint ventures 86 (723)
Distributions received from joint
ventures - 28,145
------------------------------------------ ------ -------- --------- --------- ---------
Net cash (used in)/generated from
investing activities (4,736) 13,823
------------------------------------------ ------ -------- --------- --------- ---------
Cash flows from financing activities
Proceeds from/(repayment of) non-current
borrowings 8,000 (16,233)
Movement in lease liabilities (1,650) (19)
Dividends paid to shareholders (6,247) (6,247)
------------------------------------------ ------ -------- --------- --------- ---------
Net cash generated from/(used in)
financing activities 103 (22,499)
------------------------------------------ ------ -------- --------- --------- ---------
Net increase/(decrease) in cash
and cash equivalents 2,152 (5,264)
Cash and cash equivalents at beginning
of the year 209 5,473
------------------------------------------ ------ -------- --------- --------- ---------
Cash and cash equivalents at end
of the year 2,361 209
------------------------------------------ ------ -------- --------- --------- ---------
Cash and cash equivalents at the year end are comprised
of the following:
Cash balances 12,643 23,692
Overdrawn balance (10,282) (23,483)
2,361 209
------------------------------------------ ------ -------- --------- --------- ---------
Audited preliminary results announcements
The financial information for the year ended 30 June 2020 and
the year ended 30 June 2019 does not constitute the company's
statutory accounts for those years.
Statutory accounts for the year ended 30 June 2019 have been
delivered to the Registrar of Companies. The statutory accounts for
the year ended 30 June 2020 will be delivered to the Registrar of
Companies following the Company's Annual General Meeting.
The auditors' reports on the accounts for 30 June 2020 and 30
June 2019 were unqualified, did not draw attention to any matters
by way of emphasis, and did not contain a statement under 498(2) or
498(3) of the Companies Act 2006 .
1. Segmental information
Segmental assets 2020 2019
GBP000 GBP000
--------------------- -------- --------
Property rental 333,307 363,375
Car park activities 53,498 31,466
Hotel operations 8,630 10,300
--------------------- -------- --------
395,435 405,141
--------------------- -------- --------
Segmental 2020 2019
results
----------------------------------------------- ----------------------------------------------
Property Car park Hotel Property Car Hotel
park
rental activities operations Total rental activities operations Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------ --------- ----------- ----------- --------- --------- ----------- ----------- ---------
Gross revenue 15,875 10,198 1,916 27,989 16,637 12,154 2,627 31,418
Provision for
impairment
of debtors (1,478) - - (1,478) (229) - - (229)
Service charge
income 2,803 - - 2,803 2,976 - - 2,976
Service charge
expenses (4,011) - - (4,011) (3,990) - - (3,990)
Property expenses (1,495) (5,970) (1,779) (9,244) (1,424) (6,766) (2,396) (10,586)
------------------ --------- ----------- ----------- --------- --------- ----------- ----------- ---------
Net revenue 11,694 4,228 137 16,059 13,970 5,388 231 19,589
------------------ --------- ----------- ----------- --------- --------- ----------- ----------- ---------
Administrative
expenses (5,086) (1,111) - (6,197) (5,889) (968) - (6,857)
Other income 1,218 - - 1,218 569 5 - 574
Other expenses (777) - - (777)
Share of post-tax
profits from
joint
ventures 800 - - 800 1,075 - - 1,075
------------------ --------- ----------- ----------- --------- --------- ----------- ----------- ---------
Operating profit
before valuation
movements 7,849 3,117 137 11,103 9,725 4,425 231 14,381
------------------ --------- ----------- ----------- --------- --------- ----------- ----------- ---------
Valuation
movement
on investment
properties (26,324) - - (26,324) (18,308) - - (18,308)
Reversal of
impairment
of car parking
assets - 250 - 250 - 200 - 200
Profit/(loss) on
disposal of
investment
properties 168 - - 168 (709) - - (709)
Valuation
movement
on joint venture
properties (350) - - (350) (8) - - (8)
Operating
(loss)/profit (18,657) 3,367 137 (15,153) (9,300) 4,625 231 (4,444)
Finance costs (9,009) (8,025)
------------------ --------- ----------- ----------- --------- --------- ----------- ----------- ---------
Loss before
taxation (24,162) (12,469)
------------------ --------- ----------- ----------- --------- --------- ----------- ----------- ---------
Taxation - -
------------------ --------- ----------- ----------- --------- --------- ----------- ----------- ---------
Loss for the year (24,162) (12,469)
------------------ --------- ----------- ----------- --------- --------- ----------- ----------- ---------
All results are derived from activities conducted in the United
Kingdom.
The results for the car park activities include the car park at
the Merrion Centre. As the value of the car park cannot be
separated from the value of the Merrion Centre as a whole, the full
value of the Merrion Centre is included within the assets of the
property rental business.
The car park results also include car park income from sites
that are held for future development. The value of these sites has
been determined based on their development value and therefore the
total value of these assets has been included within the assets of
the property rental business.
The net revenue at the Merrion Centre and development sites for
the year ended 30 June 2020, arising from car park operations, was
GBP3,053,000. After allowing for an allocation of administrative
expenses, the operating profit at these sites was GBP2,251,000.
Revenue received within the car park and hotel segments is the
only revenue recognised on a contract basis under IFRS 15. All
other revenue within the Property segment comes from rental lease
agreements.
2. Administrative expenses
2020 2019
GBP000 GBP000
------------------------------ ------- -------
Employee benefits 3,893 4,240
Depreciation 227 339
Charitable donations 49 92
Other 2,028 2,186
------------------------------ ------- -------
6,197 6,857
------------------------------ ------- -------
3. Other income and expenses
2020 2019
GBP000 GBP000
-------------------------------------------- ------- -------
Commission received 172 172
Dividends received 33 33
Management fees receivable 245 207
Dilapidations receipts and income relating
to lease premiums 715 85
Other 53 77
-------------------------------------------- ------- -------
1,218 574
-------------------------------------------- ------- -------
Other expenses
During the year a provision of GBP777,000 has been recognised in
relation to costs incurred on a project that may not be
recoverable. Costs have been incurred over a number of years on the
planned George Street aparthotel joint venture however there is
some doubt over the future viability of the project, therefore a
full provision has been recognised against the costs incurred to
date.
4. Earnings per share (EPS)
The calculation of basic earnings per share has been based on
the profit for the period, divided by the weighted average number
of shares in issue. The weighted average number of shares in
issue during the period was 53,161,950 (2019: 53,161,950).
2020 2019
--------------------- --------------------
Earnings Earnings
Earnings per Earnings per
share share
GBP000 p GBP000 p
--------------------------------------- --------- --------- --------- ---------
Loss for the year and earnings
per share (24,162) (45.5) (12,469) (23.4)
---------------------------------------- --------- --------- --------- ---------
Valuation movement on investment
properties 26,324 49.5 18,308 34.5
Reversal of impairment of car
parking assets (250) (0.5) (200) (0.4)
Valuation movement on properties
held in joint ventures 350 0.7 8 0.0
Profit/loss on disposal of investment
and development properties (168) (0.3) 709 1.3
EPRA earnings and earnings per
share 2,094 3.9 6,356 12.0
---------------------------------------- --------- --------- --------- ---------
Impact if IFRS16 adjustments 528 1.0 - -
---------------------------------------- --------- --------- --------- ---------
Adjusted EPRA earnings and earnings
per share 2,622 4.9 6,356 12.0
---------------------------------------- --------- --------- --------- ---------
There is no difference between basic and diluted earnings per
share and EPRA earnings per share.
5. Dividends
2020 2019
GBP000 GBP000
---------------------------------- ------- -------
2018 final paid: 8.50p per 25p
share - 4,519
2019 interim paid: 3.25p per
25p share - 1,728
2019 final paid: 8.50p per share 4,519 -
2020 interim paid: 3.25p per 1,728 -
share
---------------------------------- ------- -------
6,247 6,247
---------------------------------- ------- -------
An interim dividend in respect of the year ended 30 June 2020 of
3.25p per share was paid to shareholders on 26 June 2020. This
dividend was paid entirely as a Property Income Distribution
(PID).
A final dividend in respect of the year ended 30 June 2020 of
1.75p per share is proposed. This dividend, based on the shares in
issue at 22 September 2020, amounts to GBP0.9m which has not been
reflected in these accounts and will be paid on 5 January 2021 to
shareholders on the register on 4 December 2020. The entire
dividend will be paid as an ordinary dividend.
6. Non-current assets
(a) Investment properties
Freehold Long Development Right Total
leasehold to use
asset
GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------- --------- ----------- ------------ -------- ---------
Valuation at 30 June
2018 277,918 21,692 36,701 - 336,311
Additions at cost 16,968 - - - 16,968
Other capital expenditure 3,469 - 271 - 3,740
Disposals (14,290) - (500) - (14,790)
Deficit on revaluation (17,879) (408) (21) - (18,308)
Movement in tenant lease
incentives 579 - - - 579
Valuation at 30 June
2019 266,765 21,284 36,451 - 324,500
--------------------------- --------- ----------- ------------ -------- ---------
Additions at cost 1,610 - 1,610
IFRS 16 adjustments - - - 518 518
Other capital expenditure 5,630 - 348 - 5,978
Purchase of freehold 14,129 (13,594) - - 535
Disposals (2,425) - - - (2,425)
Transfer to assets held
for sale (23,199) - - - (23,199)
Deficit on revaluation (25,206) (2,070) 952 - (26,324)
Movement in tenant lease
incentives (279) - - - (279)
--------------------------- --------- ----------- ------------ -------- ---------
Valuation at 30 June
2020 237,025 5,620 37,751 518 280,914
--------------------------- --------- ----------- ------------ -------- ---------
(b) Freehold and leasehold properties - car park activities
Freehold Long Right Total
leasehold to use
asset
GBP000 GBP000 GBP000 GBP000
------------------------------------- --------- ----------- -------- --------
Valuation at 30 June 2018 3,000 20,423 - 23,423
Additions - 255 - 255
Depreciation - (184) - (184)
Surplus on revaluation 500 - - 500
Reversal of impairment/(impairment) 250 (50) - 200
------------------------------------- --------- ----------- -------- --------
Valuation at 30 June 2019 3,750 20,444 - 24,194
------------------------------------- --------- ----------- -------- --------
Additions - 25 - 25
IRFS 16 adjustment - (3,301) 30,322 27,021
Depreciation - (187) (1,144) (1,331)
Reversal of impairment - 250 - 250
----------- -------- --------
Valuation at 30 June 2020 3,750 17,231 29,178 50,159
------------------------------------- --------- ----------- -------- --------
The historical cost of freehold and leasehold properties
relating to car park activities is GBP22,425,000 (2019:
GBP22,425,000).
The Company occupies an office suite in part of the Merrion
Centre and also at 6 Duke Street in London. The Directors do not
consider this element to be material.
The fair value of the Group's investment and development
properties has been determined principally by independent,
appropriately qualified external valuers CBRE and Jones Lang
LaSalle. The external valuation reports have explicitly mentioned
material valuation uncertainty due to Novel Coronavirus (COVID- 19)
in their portfolio valuation reports to management for certain
properties within the TCS portfolios. The remainder of the
portfolio has been valued by the Property Director.
Valuations are performed bi-annually and are performed
consistently across the Group's whole portfolio of properties. At
each reporting date appropriately qualified employees verify all
significant inputs and review computational outputs. The external
valuers submit and present summary reports to the Property Director
and the Board on the outcome of each valuation round.
Valuations take into account tenure, lease terms and structural
condition. The inputs underlying the valuations include market
rents or business profitability, incentives offered to tenants,
forecast growth rates, market yields and discount rates and selling
costs including stamp duty.
The development properties principally comprise land in Leeds
and Manchester. These have also been valued by appropriately
qualified external valuers Jones Lang LaSalle, taking into account
the income from car parking and an assessment of their realisable
value in their existing state and condition based on market
evidence of comparable transactions.
Property income, values and yields have been set out by category
in the table below.
Passing ERV Value Initial Reversionary
rent yield yield
GBP000 GBP000 GBP000 % %
--------------------------- -------- ------- -------- -------- -------------
Retail and Leisure 2,973 3,455 41,990 6.7% 7.8%
Merrion Centre (excluding
offices) 6,993 7,351 85,725 7.7% 8.1%
Offices 2,175 4,529 47,795 4.3% 9.0%
Hotels 1,180 1,630 23,080 4.8% 6.7%
Out of town retail 1,938 1,871 25,575 7.2% 6.9%
Distribution 411 427 6,010 6.5% 6.7%
Residential 616 639 10,570 5.5% 5.7%
--------------------------- -------- ------- -------- -------- -------------
16,286 19,902 240,745 6.4% 7.8%
--------------------------- -------- ------- -------- -------- -------------
Development property 37,751
Car parks 22,881
Finance lease adjustments 29,696
--------------------------- -------- ------- --------
331,073
--------------------------- -------- ------- --------
The effect on the total valuation (including development
property, car parks and right to use assets) of applying a
different yield and a different ERV would be as follows:
Valuation in the Consolidated Financial Statements at an initial
yield of 7.4% - GBP298.5m, Valuation at 5.4% - GBP375.7m.
Valuation in the Consolidated Financial Statements at a
reversionary y ield of 8.8% - GBP303.8m, Valuation at 6.8% -
GBP366.4m.
Property valuations can be reconciled to the carrying value of
the properties in the balance sheet as follows:
Freehold Assets
Investment and Leasehold held
Properties Properties for sale Total
GBP000 GBP000 GBP000 GBP000
--------------------------------- ------------- ---------------- ---------- --------
Externally valued by CBRE 160,265 - 21,540 181,805
Externally valued by Jones Lang
LaSalle 119,980 17,250 - 137,230
Investment properties valued
by the Property Director 151 - - 151
Acquisitions recognised at cost - - 1,659 1,659
IFRS 16 right to use assets 518 29,178 - 29,696
Leasehold improvements - 3,731 - 3,731
--------------------------------- ------------- ---------------- ---------- --------
280,914 50,159 23,199 354,272
--------------------------------- ------------- ---------------- ---------- --------
Leasehold improvements primarily relate to expenditure incurred
on the refurbishment of three car parks in Watford that are held
under operating leases.
All investment properties measured at fair value in the
consolidated balance sheet are categorised as level 3 in the fair
value hierarchy as defined in IFRS13 as one or more inputs to the
valuation are partly based on unobservable market data. In arriving
at their valuation for each property (as in prior years) both the
independent valuers and the Property Director have used the actual
rent passing and have also formed an opinion as to the two
significant unobservable inputs being the market rental for that
property and the yield (i.e. the discount rate) which a potential
purchaser would apply in arriving at the market value. Both these
inputs are arrived at using market comparables for the type,
location and condition of the property.
Assets held for sale
As at 30 June 2020, two properties with a total value of
GBP23,199,000 were in the process of being sold and therefore have
been classified within current assets as Assets held for sale. The
valuation deficit recoginsed through the Income Statement in
relation to these properties was GBP3,471,000.
(c) Fixtures, equipment and motor vehicles
Accumulated
Cost depreciation
GBP000 GBP000
--------------------------------------------- ------- -------------
At 1 July 2018 3,632 2,088
Additions 814 -
Disposals (56) (42)
Depreciation - 735
At 30 June 2019 4,390 2,781
--------------------------------------------- ------- -------------
Net book value at 30 June 2019 1,609
--------------------------------------------- ------- -------------
At 1 July 2019 4,390 2,781
Additions 93 -
Depreciation - 589
At 30 June 2020 4,483 3,370
--------------------------------------------- ------- -------------
Net book value at 30 June 2020 1,113
--------------------------------------------- ------- -------------
7. Investments in joint ventures
2020 2019
GBP000 GBP000
------------------------------------------------- ------- ---------
At the start of the year 13,387 39,742
(Repayments of loans from)/Investments in joint
ventures (86) 723
Dividends and other distributions received
in the year - (28,145)
Share of profits after tax 450 1,067
------------------------------------------------- ------- ---------
At the end of the year 13,751 13,387
------------------------------------------------- ------- ---------
Investments in joint ventures are broken down as follows:
2020 2019
GBP000 GBP000
-------- ------- -------
Equity 8,452 7,792
Loans 5,299 5,595
-------- ------- -------
13,751 13,387
-------- ------- -------
Investments in joint ventures primarily relate to the Group's
interest in Merrion House LLP and Belgravia Living Group
Limited.
Merrion House LLP owns a long leasehold interest over a property
that is let to the Group's joint venture partner, Leeds City
Council ('LCC'). The interest in the joint venture for each partner
is an equal 50% share, regardless of the level of overall
contributions from each partner. The investment property held
within this partnership has been externally valued by CBRE at each
reporting date.
The net assets of Merrion House LLP for the current and previous
year are as stated below:
2020 2019
GBP000 GBP000
------------------------- --------- ---------
Non-current assets 69,400 69,400
Current assets 689 1,178
Current liabilities (2,269) (2,702)
Non-current liabilities (50,532) (52,080)
------------------------- --------- ---------
Net assets 17,288 15,796
------------------------- --------- ---------
The profits of Merrion House LLP for the current and previous
year are as stated below:
2020 2019
GBP000 GBP000
--------------------------------------------- -------- --------
Revenue 3,328 3,328
Expenses (5) (33)
Finance costs (1,832) (1,406)
1,491 1,889
Valuation movement on investment properties - (17)
--------------------------------------------- -------- --------
Net profit 1,491 1,872
--------------------------------------------- -------- --------
Belgravia Living Group Limited completed construction of a block
of residential apartments in Manchester towards the end of the
previous financial year. These apartments have been let to
residential tenants during the year. The Group's financial interest
in this joint venture is primarily in the form of a loan with a
value as at 30 June 2020 of GBP5.3m (2019: GBP5.5m).
The assets and liabilities of Belgravia Living Group for the
current and previous year are as stated below:
2020 2019
GBP000 GBP000
------------------------- --------- ---------
Non-current assets 22,923 22,736
Current assets 3,014 540
Current liabilities (11,365) (23,355)
Non-current liabilities (14,725) -
------------------------- --------- ---------
Net liabilities (153) (79)
------------------------- --------- ---------
The income and expenses of Belgravia Living Group Limited for
the current and previous year are as stated below:
2020 2019
GBP000 GBP000
--------------- ------- -------
Revenue 1,215 -
Expenses (538) -
Finance costs (751) (14)
--------------- ------- -------
Net loss (74) (14)
--------------- ------- -------
The Group's interest in other joint ventures are not considered
to be material.
The joint ventures have no significant contingent liabilities to
which the Group is exposed nor has the Group any significant
contingent liabilities in relation to its interest in the joint
ventures.
A full list of the Group's joint ventures, which are all
registered in England and operate in the United Kingdom, is set out
as follows:
Beneficial Activity
Interest
%
------------------------------- ----------- ---------------------
Merrion House LLP 50 Property investment
Belgravia Living Group Limited 50 Property Investment
Bay Sentry Limited 50 Software Development
------------------------------- ----------- ---------------------
8. Share capital
Authorised
The authorised share capital of the company is 164,879,000
(2019: 164,879,000) ordinary shares of 25p each. The nominal value
of authorised share capital is GBP41,219,750 (2019:
GBP41,219,750).
Issued and fully paid up
Number Nominal
of shares value
000 GBP000
----------------------------- ----------- --------
At 30 June 2019 and 30 June
2020 53,162 13,290
----------------------------- ----------- --------
The Company has only one type of ordinary share class in issue.
All shares have equal entitlement to voting rights and dividend
distributions.
The Company has no share option schemes in current operation and
there are no unexercised options outstanding at 30 June 2020.
9. Cash flow from operating activities
2020 2019
GBP000 GBP000
----------------------------------------- --------- ---------
Loss for the financial year (24,162) (12,469)
Adjustments for:
Depreciation 1,920 919
Profit on disposal of fixed assets - (9)
(Profit)/loss on disposal of investment
properties (168) 709
Finance costs 9,009 8,025
Share of post tax profits from joint
ventures (450) (1,067)
Movement in valuation of investment
and development properties 26,324 18,308
Movement in lease incentives 279 (579)
Reversal of impairment of car parking
assets (250) (200)
Decrease/(increase) in receivables 1,097 (2,074)
Increase/(decrease) in payables 834 (473)
----------------------------------------- --------- ---------
Cash generated from operations 14,433 11,090
----------------------------------------- --------- ---------
10. EPRA net asset value per share
The Basic and EPRA net asset values are the same, as set out in
the table below.
2020 2019
GBP000 GBP000
-------------------------- -------- --------
Net assets at 30 June 155,478 188,250
Shares in issue (000) 53,162 53,162
Basic and EPRA net asset
value per share 292p 354p
-------------------------- -------- --------
11. Adoption of IFRS16
Effective 1 July 2019, IFRS 16 has replaced IAS 17 Leases and
IFRIC 4 Determining whether an Arrangement Contains a Lease.
IFRS 16 provides a single lessee accounting model, requiring the
recognition of assets and liabilities for all leases, together with
options to exclude leases where the lease term is 12 months or
less, or where the underlying asset is of low value. IFRS 16
substantially carries forward the lessor accounting in IAS 17, with
the distinction between operating leases and finance leases being
retained.
Transition Method and Practical Expedients Utilised
The Group adopted IFRS 16 using the modified retrospective
approach, with recognition of transitional adjustments on the date
of initial application (1 July 2019), without restatement of
comparative figures. The Group elected to apply the practical
expedient to not reassess whether a contract is, or contains a
lease at the date of initial application. Contracts entered into
before the transition date that were not identified as leases under
IAS 17 and IFRIC 4 were not reassessed. The definition of a lease
under IFRS 16 was applied only to contracts entered into or changed
on or after 1 July 2019.
IFRS 16 provides for certain optional practical expedients,
including those related to the initial adoption of the standard.
The Group applied the following practical expedients when applying
IFRS 16 to leases previously classified as operating leases under
IAS 17:
(a) Apply a single discount rate to a portfolio of leases with
reasonably similar characteristics;
(b) Exclude initial direct costs from the measurement of
right-of-use assets at the date of initial application for leases
where the right-of-use asset was determined as if IFRS 16 had been
applied since the commencement date;
(c) Reliance on previous assessments on whether leases are
onerous as opposed to preparing an impairment review under IAS 36
as at the date of initial application; and
(d) Applied the exemption not to recognise right-of-use assets
and liabilities for leases with less than 12 months of lease term
remaining as of the date of initial application.
As a lessee, the Group previously classified leases as operating
or finance leases based on its assessment of whether the lease
transferred substantially all of the risks and rewards of
ownership. Under IFRS 16, the Group recognizes right-of-use assets
and lease liabilities for most leases. However, the Group has
elected not to recognise right-of-use assets and lease liabilities
for some leases of low value assets based on the value of the
underlying asset when new or for short-term leases with a lease
term of 12 months or less.
The discount rate applied in the calculations is 3.5% which
represents the incremental cost of borrowing.
The impact of the adoption of IFRS16 on the primarily statements
is presented below.
Consolidated income statement
for the year ended 30 June 2020
Pre IFRS16 Rental Depreciation Interest Post
adjustments expense charge expense IFRS16
adjustments
GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------------- -------------- ---------- --------------- ----------- --------------
Gross revenue 26,702 - - - 26,702
Property expenses (11,149) 1,650 (1,144) - (10,643)
---------------------------------- -------------- ---------- --------------- ----------- --------------
Net revenue 15,553 1,650 (1,144) - 16,059
Administrative expenses (6,197) - - - (6,197)
Other income 1,218 - - - 1,218
Other expenses (777) - - - (777)
Valuation movement on investment
properties (26,324) - - - (26,324)
Reversal of impairment of
car parking assets 250 - - - 250
Profit on disposal of investment
properties 168 - - - 168
Share of post tax profits
from joint ventures 450 - - - 450
---------------------------------- -------------- ---------- --------------- ----------- --------------
Operating loss (15,659) 1,650 (1,144) - (15,153)
Finance costs (7,975) - - (1,034) (9,009)
---------------------------------- -------------- ---------- --------------- ----------- --------------
Loss before taxation (23,634) 1,650 (1,144) (1,034) (24,162)
Taxation - - - - -
---------------------------------- -------------- ---------- --------------- ----------- --------------
Loss for the year (23,634) 1,650 (1,144) (1,034) (24,162)
---------------------------------- -------------- ---------- --------------- ----------- --------------
Consolidated balance sheet
as at 30 June 2020
Pre IFRS16 Right-to-use Lease Post IFRS16
adjustments assets liabilities adjustments
GBP000 GBP000 GBP000 GBP000
----------------------------------- -------------- --------------- -------------- --------------
Non-current assets
Property rental
Investment properties 280,396 518 - 280,914
Investments in joint ventures 13,751 - - 13,751
294,147 518 - 294,665
----------------------------------- -------------- --------------- -------------- --------------
Car park activities
Freehold and leasehold properties 24,282 25,877 - 50,159
Goodwill 4,024 - - 4,024
Investments 2,656 - - 2,656
----------------------------------- -------------- --------------- -------------- --------------
30,962 25,877 - 56,839
----------------------------------- -------------- --------------- -------------- --------------
Fixtures, equipment and motor
vehicles 1,113 - - 1,113
----------------------------------- -------------- --------------- -------------- --------------
Total non-current assets 326,222 26,395 - 352,617
----------------------------------- -------------- --------------- -------------- --------------
Current assets
Investments 3,508 - - 3,508
Assets held for sale 23,199 - - 23,199
Trade and other receivables 3,468 - - 3,468
Cash and cash equivalents 12,643 - - 12,643
----------------------------------- -------------- --------------- -------------- --------------
Total current assets 42,818 - - 42,818
----------------------------------- -------------- --------------- -------------- --------------
Total assets 369,040 26,395 - 395,435
----------------------------------- -------------- --------------- -------------- --------------
Current liabilities
Trade and other payables (23,735) 353 - (23,382)
Financial liabilities (60,326) - (1,658) (61,984)
Total current liabilities (84,061) 353 (1,658) (85,366)
----------------------------------- -------------- --------------- -------------- --------------
Non-current liabilities
Financial liabilities (128,973) - (25,618) (154,591)
----------------------------------- -------------- --------------- -------------- --------------
Total liabilities (213,034) 353 (27,276) (239,957)
----------------------------------- -------------- --------------- -------------- --------------
Net assets 156,006 26,748 (27,276) 155,478
----------------------------------- -------------- --------------- -------------- --------------
[1] CBRE UK RETAIL MARKET SNAPSHOT Q2 2020
[2] SAVILLS UK REGIONAL OFFICE INVESTMENT MARKETWATCH 25(TH)
JUNE 2020.
3 SAVILLS UK REGIONAL OFFICE INVESTMENT MARKETWATCH 25(TH) JUNE
2020.
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