HELICAL
PLC
("Helical" or the "Group" or the "Company")
Results
for the Half Year to 30 September 2024 (the "Period"/"Half
Year")
FUNDING
IN PLACE TO DELIVER ON CENTRAL LONDON DEVELOPMENT PIPELINE - NOW IS
THE TIME TO BUILD
Matthew Bonning-Snook, Chief
Executive, commented:
"In my first six months as Chief
Executive of Helical we have been implementing the strategy agreed
following the business review undertaken earlier this year and have
focused on shaping the Company to best capture the cyclical growth
opportunity. Our substantial development pipeline is set to deliver
"best-in-class" office developments into a supply-constrained 2026
and beyond. Recycling equity through £245m of sales at a surplus to
book value has underpinned a return to profitability, alongside an
increase in Net Asset Value and a positive Total Accounting Return.
These sales have also reduced our post balance sheet pro-forma LTV
to 15.9%, its lowest ever level. Importantly, this provides the
Group with all the anticipated equity it needs to complete its
current development pipeline, including those schemes not yet
started, providing the means to our future growth.
"While retaining a focus on
offices, we are widening our offering to incorporate alternative
uses, such as the student accommodation being planned above
Southwark tube station, and we will continue to seek the best value
use for sites in central London. Our exciting development pipeline,
delivering in joint venture with equity partners, will provide
valuation surpluses as well as new revenue streams of significant
development management fees and promotes. This pipeline will be
supplemented with additional "equity-light" opportunities as
building owners seek specialists in development and refurbishment
to partner with them to maximise the value of their
assets.
"With an experienced management
team and funds in place to deliver a substantial development
pipeline, Helical is financially and operationally well placed to
deliver a strong performance over the coming cycle."
Financial Highlights
|
EPRA Measures1
|
30 September
2024
|
30
September
2023
|
|
IFRS Measures
|
30 September
2024
|
30
September 2023
|
|
EPRA earnings
|
£2.8m
|
£1.4m
|
|
Profit/(loss) after tax
|
£4.7m
|
£(93.1)m
|
|
EPRA earning per share
|
2.25p
|
1.15p
|
|
Basic earning/(loss) per
share
|
3.8p
|
(75.8)p
|
|
EPRA Total Accounting
Return
|
0.8%
|
(16.6)%
|
|
Interim dividend per
share
|
1.50p
|
3.05p
|
|
|
30 September
2024
|
31
March
2024
|
|
|
30 September
2024
|
31
March
2024
|
|
EPRA NTA per
share1
|
331p
|
331p
|
|
Net assets per
share1
|
329p
|
327p
|
|
See-through LTV1
- at Period end
-
pro-forma
|
31.5%
15.9%
|
39.5%
28.7%
|
|
See-through net
debt1 - at Period
end
- pro-forma
|
£188.1m
£77.0m
|
£261.6m
£163.8m
|
Operational Activity During the
Period
Good letting progress
· During the half year we completed 12 new lettings, comprising
62,015 sq ft with a contracted rent of £5.0m per annum (our share:
£2.8m), 1.3% (our share 0.9%) above March 2024 ERVs. Following the
Period end, we have signed one additional lease for 9,499 sq ft at
a contracted rent of £0.7m, 3.6% above March 2024 ERVs. In
addition, we have completed five lease renewals of 14,260 sq ft
during the Period and one following the Period end of 10,046 sq ft,
totalling 24,306 sq ft.
- At The JJ Mack
Building, EC1, we let 45,624 sq ft (our share 22,812 sq ft) at a
1.8% premium to 31 March 2024 ERVs. On the sale of Helical's 50%
share in the asset, 90% of the building was let at an average
office rent of £95 psf, with just one floor remaining.
- At The
Tower at The Bower, EC1, following the Period end, we have let the
refurbished, ex WeWork, fourth floor at a 3.6% premium to 31 March
2024 ERVs, and have agreed terms for a five year renewal of the
lease on the 13th floor to the existing tenant at its 31
March 2024 ERV. Refurbishment works on the fifth and sixth floors
have just completed and these are now available to let. The third
floor is undergoing refurbishment.
- At The Loom,
E1, we let 16,391 sq ft, for a contracted rent of £0.7m, 1.8% below
31 March 2024 ERVs.
Sales
· In April 2024, we completed on the £43.5m sale of 25
Charterhouse Square, EC1.
· In May 2024, we entered into a joint venture arrangement for
the redevelopment of 100 New Bridge Street, EC4, selling a 50%
interest in the site for £55m structured on a preferred equity
basis to a vehicle led by Orion Capital Managers. At the same time,
the parties entered into a £155m development financing arrangement
with NatWest and an institutional lender, as well as a building
contract to deliver the scheme.
· In August 2024, we exchanged contracts to sell The Power
House, W4 for £7.0m, with completion due at the end of
November.
· In October 2024, we completed on the sale of our 50% interest
in Charterhouse Place Limited, the owner of The JJ Mack Building,
EC1 to our joint venture partner, AshbyCapital, for £71.4m. The
transaction reflected a value of £139.2m for Helical's 50% share of
the property. As this was a corporate sale, the £71.4m reflected
the consolidated net asset value of Charterhouse Place Limited at
the date of sale, which included bank finance and other working
capital items.
Development Pipeline
On Site
· 100 New Bridge Street,
EC4 - This 194,500 sq ft "carbon
friendly" redevelopment of the existing building is progressing
with a planned completion date for April 2026.
· Brettenham House,
WC2 - The repositioning of this
128,000 sq ft building (including 6,000 sq ft of retail) is well
underway with the building scaffolded to facilitate the cleaning
and repair of the external stonework and new window installation.
Completion of the works is due April 2026.
· 10 King William Street,
EC4 - The first of three initial
sites to be developed in joint venture with Transport for London's
("TfL") property company, Places for London, this
eight-storey office development will deliver 139,000 sq ft of
"best-in-class" new office space with 2,000 sq ft of ground floor
retail. Practical completion is programmed for December
2026.
Pipeline
· Southwark Over Station
Development, SE1 - We have
submitted a planning application for a purpose-built student
accommodation scheme of 429 studio units together with a separate
building providing 44 affordable housing units. This will be the
second development with Places for London and is expected to be
delivered in Q2 2028.
· Paddington Over Station
Development, W2 - Situated close to
the Elizabeth Line station at Paddington, this 19-storey building
will provide 235,000 sq ft of office space. The site will be
acquired in January 2026 with the intention to deliver the scheme
in Q1 2029.
Financial and Portfolio
Performance
Earnings and Dividends
· IFRS profit of £4.7m (2023: loss £93.1m).
· IFRS basic earnings per share of 3.79p (2023: loss of
75.85p).
· EPRA earnings per share1 of 2.25p (2023:
1.15p).
· Interim dividend of 1.50p per share (2023: 3.05p).
Balance Sheet
· Net asset value up 0.8% to £404.2m (31 March 2024:
£401.1m).
· Total Accounting Return1 on IFRS net assets of
1.3% (2023: -15.9%).
· Total Accounting Return1 on EPRA net tangible
assets of 0.8% (2023: -16.6%).
· EPRA net tangible asset value per share1 unchanged
at 331p (31 March 2024: 331p).
· EPRA net disposal value per share1 up to 328p (31
March 2024: 327p).
Financing
· IFRS net borrowings of £120.5m (31 March 2024:
£199.0m).
· See-through loan to value1 of 31.5% (31 March
2024: 39.5%).
· Pro-forma see-through loan to value1 of
15.9%.
· See-through net borrowings1 of £188.1m (31 March
2024: £261.6m).
· Pro-forma see-through net borrowings1 of
£77.0m.
· Average maturity of the Group's share1 of secured
investment debt of 3.0 years (31 March 2024: 2.1 years).
· 100% of drawn debt protected by interest rate hedging to
expiry of facilities.
· Average cost of the Group's share of secured investment
facilities1 of 3.0% (31 March 2024: 2.9%).
· Group's share1 of cash and undrawn bank facilities
of £176.1m (31 March 2024: £115.5m).
Portfolio Update
· Investment property valuations showed an improvement, on a
like-for-like basis of 0.4% while the development portfolio value
increased by 9.0% to provide a net 1.3% improvement overall. The
true equivalent yield of the investment portfolio increased from
6.45% to 6.56% during the Period.
· IFRS investment property portfolio value of £371.9m (31 March
2024: £472.5m) reflecting disposals during the Period.
· See-through investment portfolio1, valued at
£591.5m (31 March 2024: £660.6m).
· Contracted rents of £30.5m (31 March 2024: £33.0m), compared
to an ERV of £39.7m (31 March 2024: £60.8m). Following the sales of
The JJ Mack Building, EC1 and The Power House, W4, the ERV falls to
£29.4m.
· See-through portfolio WAULT1 of 6.8 years (31
March 2024: 6.6 years).
· Vacancy rate on completed assets decreased to 16.1% at 30
September 2024 (31 March 2024: 17.6%).
Sustainability
Highlights
· Received a 5 star GRESB rating across both our development
portfolio and standing investments with a score of 96/100 and
88/100 respectively.
· Design stage BREEAM certificate received for 100 New Bridge
Street, EC4 with an Outstanding rating and a score of
95%.
· Sustainability Linked Revolving Credit Facility signed
incorporating three ESG targets.
Interim Dividend
Timetable
|
Announcement date
|
26
November 2024
|
|
Ex-dividend date
|
20
December 2024
|
|
Record date
|
6
December 2024
|
|
Dividend payment date
|
15
January 2025
|
A Dividend Reinvestment Plan
("DRIP") is provided by Equiniti Financial Services Limited. The
DRIP enables the Company's Shareholders to elect to have their cash
dividend payments used to purchase the Company's shares. More
information can be found at www.shareview.co.uk/info/drip.
For further information, please
contact:
|
Helical plc
|
020 7629 0113
|
|
Matthew Bonning-Snook (Chief
Executive)
|
|
|
Tim Murphy (Chief Financial
Officer)
|
|
|
|
|
|
Address:
|
5 Hanover Square, London W1S
1HQ
|
|
Website:
|
www.helical.co.uk
|
|
X:
|
@helicalplc
|
|
|
|
|
FTI Consulting
|
020 3727 1000
|
|
Dido Laurimore/Richard
Gotla/Andrew Davis
|
|
schelical@fticonsulting.com
|
Results Presentation
Helical will be holding a
presentation for analysts and investors starting at 10:30am on
Tuesday 26 November 2024 at the offices of FTI Consulting, 200
Aldersgate, Aldersgate Street, London, EC1A 4HD. If you would like
to attend, please contact FTI Consulting on 020 3727 1000, or
email schelical@fticonsulting.com
The presentation will be on the
Company's website www.helical.co.uk
and a live webcast and Q&A will also be
available.
Webcast Link:
https://brrmedia.news/HLCL_HY_25
Half Year Results
Statement
At Helical, sustainability is at
the heart of everything we do and forms one of the key pillars of
our strategy. With this in mind, we have taken the decision to
cease mailing hard copies of our half year results reports to our
Shareholders and other stakeholders unless specifically requested.
Should you wish to receive a hard copy of our Results for the Half
Year to 30 September 2024 by post, please email your request
to companysecretary@helical.co.uk.
An electronic version of our Results for the Half Year to 30
September 2024 is available on our website
(https://www.helical.co.uk/investors/results-and-presentations/).
1. See Glossary for
definition of terms. These interim condensed consolidated financial
statements have been prepared in accordance with IAS 34 Interim
Financial Reporting as adopted by the UK and the Disclosure
Guidance and Transparency Rules sourcebook of the UK's Financial
Conduct Authority. In common with usual and best practice in our
sector, alternative performance measures have also been provided to
supplement IFRS, some of which are based on the recommendations of
the European Public Real Estate Association ("EPRA"), with others
designed to give additional information about the Group's share of
assets and liabilities, income and expenses in subsidiaries and
joint ventures.
Chief Executive's
Statement
Overview
Since 31 March 2024, we have taken
advantage of letting progress to recycle capital from the
portfolio. The Group has sold £190m of completed investment
properties (of which £139m was contracted since 30 September 2024)
as well as 50% of the site at 100 New Bridge Street, EC4 for £55m.
In aggregate, the Group has realised £245m of value at a net profit
of £10m over 31 March 2024 book values. These sales have
underpinned a return to profit, alongside an increase in Net Asset
Value and a positive Total Accounting Return. Importantly, they
also provide the Group with all the anticipated equity it requires
to be able to complete its current development pipeline, including
those schemes not yet commenced, providing fuel for our future
growth.
Our business model is now focused
on delivering, in joint venture with equity partners,
"best-in-class" developments in highly desirable central London
locations. Primarily, these will be new office schemes or the
comprehensive refurbishment of existing buildings. In addition, we
will look at alternative uses within central London, such as the
purpose built student accommodation being planned above Southwark
tube station. As we consider alternative opportunities, we will
always look to deliver the best value use.
We have a current pipeline of five
development projects with our future equity requirements fully
funded, delivering into a window with strongly predicted low levels
of supply. We also have a strategic joint venture with TfL's
property company, Places for London, with an ambition to deliver
more schemes with them, having just started on site at the first
office project at 10 King William Street, EC4. Future potential
schemes are already in discussion. This exciting approach to
development in central London brings the prospect of a number of
revenue streams to Helical. During the construction phase, the
development management fees payable by the joint ventures fund the
Group's costs of providing its expertise. In aggregate, with
several schemes under construction at the same time, the receipt of
these fees significantly reduces the net overheads of the business,
in addition to the 25% cost reduction referred to below. On
completion and successful letting, particularly for "equity-light"
schemes, a development promote is payable to the Group, which has
the potential to provide returns significantly in excess of the
level of equity required. Our business model envisages additional
"equity-light" schemes being added to the current development
pipeline. Finally, for those schemes in joint venture, there will
be a proportionate return for the equity participation.
In the Period, the Group started
three new schemes, at 100 New Bridge Street, EC4, 10 King William
Street, EC4 and Brettenham House, WC2. All three schemes, totalling
460,000 sq ft, are scheduled to achieve practical completion in
2026, when supply of new schemes is expected to be severely
constrained.
In May 2024, we committed to
reduce our running overheads by 25% by the end of March 2025 and I
am pleased that we are on track to deliver on this promise. A major
part of this cost reduction is the imminent move of our head office
which will complete before Christmas.
Results for the Half
Year
The profit after tax for the half
year to 30 September 2024 was £4.7m (2023: loss of £93.1m).
See-through net rental income reduced by 11.4% to £11.0m (2023:
£12.4m) while developments generated a see-through profit of £0.3m
(2023: loss of £0.5m). The see-through net gain on sale and
revaluation of the investment portfolio was £9.2m (2023: loss of
£96.7m).
Total see-through net finance
costs reduced to £5.1m (2023: £5.6m), reflecting a lower level of
debt. Included in net finance costs is a charge of £2.0m relating
to the amortisation of arrangement costs relating to the revolving
credit facility repaid at the end of the Period. A fall in expected
future interest rates led to a £4.7m charge (2023: credit of £2.1m)
from the valuation of the Group's see-through derivative financial
instruments. Recurring see-through administrative costs were 5.5%
lower at £4.6m (2023: £4.8m) before an accelerated depreciation
charge of £0.4m (2023: £nil) and non-recurring restructuring costs
of £0.2m (2023: £nil). Performance related awards, including
National Insurance, reduced to £0.8m (2023: £0.9m).
Since 1 April 2022, Helical has
been a REIT and there was a £nil tax charge (2023: £nil) for the
half year.
The IFRS basic earnings per share
was 3.79p (2023: loss of 75.85p) and EPRA earnings per share were
2.25p (2023: 1.15p).
On a like-for-like basis, the
investment portfolio increased in value by 0.4% (0.4% including
purchases and gains on sales). The see-through total investment
portfolio value reduced to £591.5m (31 March 2024: £660.6m), mainly
reflecting the sales of 25 Charterhouse Square, EC1 and 50% of 100
New Bridge Street, EC4. Subsequent to 30 September 2024, the
pro-forma investment portfolio decreased in value to £481.9m,
reflecting the sale of the Group's 50% share of The JJ Mack
Building, EC1, the expected sale of The Power House, W4 and the
purchase of the site at 10 King William Street, EC4 in joint
venture with Places for London.
The completed investment portfolio
was 83.9% let at 30 September 2024 (31 March 2024: 82.4%) and
generated contracted rents of £30.5m (31 March 2024: £33.0m),
equating to an average of £68.86 psf (31 March 2024: £69.02 psf).
The post half year end sales reduce contracted rent to £21.3m. This
increases to an ERV of £29.4m on the letting of the currently
vacant space and capturing the reversion of the portfolio. The
Group's contracted rent has a Weighted Average Unexpired Lease Term
("WAULT") at 30 September 2024 of 6.8 years (31 March 2024: 6.6
years).
The Total Accounting Return
("TAR"), being the growth in the IFRS net asset value of the Group,
plus dividends paid in the half year, was 1.3% (2023: -15.9%).
Based on EPRA net tangible assets, the TAR was 0.8% (2023: -16.6%).
EPRA net tangible assets per share remained unchanged at 331p (31
March 2024: 331p), with EPRA net disposal value per share
increasing to 328p (31 March 2024: 327p).
Asset Management
We have an investment portfolio
which is significantly reduced in the number of assets held, as we
recycle equity once the asset management is largely completed and
as we pivot the business further towards development. The
investment portfolio now consists of The Bower, EC1 and The Loom,
E1.
At The Bower, EC1, we have made
progress following the departure of WeWork, who occupied the first
six floors of The Tower comprising c.59,000 sq ft. We have
refurbished three of the six floors, with one let and two recently
released to the market. Of the other three floors, two are occupied
by a provider of flexible space and the final floor is undergoing a
light refit. At The Warehouse, we have carried out works on the
recently vacated 7th floor to re-present the space as an
attractive fitted option.
At The Loom, E1 we have made
progress during the Period, reducing vacancy from 35% to 27%
today.
We continue to actively manage the
multi-let campus at The Bower, EC1 which has a broad mix of office
and F&B occupiers, ensuring that it presents as new. Offering a
mix of occupier spaces including fitted solutions, Cat A finish and
our serviced operation Beyond The Bower, we aim to retain occupiers
as they reach lease ends and attract new occupiers when vacancy
occurs, maximizing occupancy throughout the estate. The new public
realm works carried out by TfL, immediately outside The Tower after
several years of construction, have certainly increased the
estate's appeal.
Balance Sheet Strength and
Liquidity
The Group has a significant level
of liquidity following the post balance sheet sales with
see-through cash and unutilised bank facilities of £217.6m (31
March 2024: £115.5m), and a development pipeline whose equity is
fully funded.
At 30 September 2024, the Group
had £14.2m of cash deposits available to deploy without
restrictions and a further £12.7m of rent in bank accounts
available to service payments under loan agreements, cash held at
managing agents and cash held in joint ventures. In addition, the
Group held rental deposits from tenants of £10.5m and had £32.2m
deposited with solicitors to fund the acquisition of the site at 10
King William Street, EC4. Furthermore, the Group had £106.5m of
loan facilities available to draw on.
These Period end balances are
supplemented by cash receipts of £71.4m from the sale of the
Group's 50% share in The JJ Mack Building, EC1 at the end of
October 2024 and the sale of The Power House, W4 for £7.0m, due for
completion at the end of November 2024.
The see-through loan to value
ratio ("LTV") reduced to 31.5% at the Balance Sheet date (31 March
2024: 39.5%) and our see-through net gearing, the ratio of net
borrowings to the net asset value of the Group, decreased to 46.5%
(31 March 2024: 65.2%) over the same period. However, post
Period-end sales have reduced the pro-forma see-through LTV to
15.9% and the pro-forma see-through net gearing to 19.1%, the
lowest gearing ratios in the Group's history.
At the Period end, the average
debt maturity of the Group's secured investment loans was 3.0 years
(31 March 2024: 2.3 years), with two one-year extensions of the
Group's revolving credit facility extending this maturity to 5.0
years. The average cost of debt, on a see-through basis, was 3.0%
(31 March 2024: 2.9%).
Dividends
Helical is a capital growth stock,
seeking to maximise value by successfully letting comprehensively
refurbished and redeveloped property. Once stabilised, these assets
are either retained for their long-term income and reversionary
potential or sold to recycle equity into new schemes.
This recycling leads to
fluctuations in our EPRA earnings per share, as the calculation of
these earnings excludes capital profits generated from the sale and
revaluation of assets. As such, both EPRA earnings and realised
capital profits have previously been considered when determining
the payment of dividends.
Moving forward, and in line with
our new strategy, we have adjusted our dividend policy to suit our
expected trajectory. We will align our dividends to our EPRA
earnings per share, rebasing to a lower level while we wait for our
development pipeline to produce profits.
In the Period to 30 September
2024, EPRA earnings per share increased from 1.15p to 2.25p.
However, due to the sales of investment assets during the financial
year to date, we do not currently expect this earnings trajectory
to continue in the second half of the year. We are, therefore,
restricting the Interim Dividend to the minimum Property Income
Distribution ("PID") required under the REIT regime and an Interim
Dividend of 1.50p per share will be paid in January
2025.
The Opportunity
Our development pipeline is
expected to provide development management fees, promotes and
surpluses for the next three years. With three recently started new
schemes delivering c.460,000 sq ft from early 2026 onwards, this
pipeline will be supplemented with additional "equity-light"
opportunities as building owners seek specialists in development
and refurbishment to partner with them to maximise the value of
their assets. In addition, banks and other financial institutions
with non-performing assets should provide additional opportunities
for Helical.
Our Balance Sheet is in very good
shape with gearing at its lowest level in the Group's history.
Maintaining financial discipline remains at the forefront of
Helical's approach. Recycling equity and seeking third party
funding for future opportunities will allow the Company to grow the
business while keeping gearing within our guidance levels of 15% to
35%.
We have a current pipeline of five
development projects, which will be delivered into a window where
demand for the best quality space is expected to significantly
outstrip supply. With an experienced management team, funds in
place to deliver a substantial development pipeline and no legacy
assets requiring investment to meet minimum sustainability
standards, Helical is financially and operationally well placed to
deliver a strong performance over the coming cycle.
Matthew Bonning-Snook
Chief Executive
25 November 2024
Our Market
Overview
As we approach 2025, the central
London office market is showing encouraging signs of life, despite
the ongoing economic and geopolitical challenges. The broader
economy is also beginning to stabilise, with falling interest rates
creating a more favourable environment for the investment
market.
Leasing activity has continued to
strengthen quarter-on-quarter, outpacing the five year average.
Demand is heavily concentrated at the top end of the market, driven
by a "flight to quality" as occupiers seek premium office spaces
that align with evolving workplace strategies and stringent ESG
criteria. This trend is bolstering demand and rental growth for
"best-in-class" assets, while posing challenges for older, less
well-specified buildings. Among the larger occupier requirements, a
first-mover advantage will likely emerge as the pipeline of new
office deliveries slows from 2026.
Over the last year, the Bank of
England has cut policy rates twice to 4.75% and further reductions
are expected, albeit more slowly than previously anticipated. The
combination of economic uncertainty, geopolitical events, and
changes in global governance means investors have continued to
adopt a "wait-and-see approach".
Encouragingly, we have seen the
arrival of several large lot size sales onto the commercial
property market which are expected to serve as key indicators as we
enter the new year, guiding the ongoing phase of price discovery
and bringing confidence back into the market.
Investment Market
The investment market is showing
signs of recovery despite overall volumes remaining below
historical averages. Q3 2024 saw central London investment volumes
reach £1.2 billion. According to CBRE data, investment volumes to
the end of Q3 reached £3.1 billion, marking a 17% decline compared
to the same period in 2023 and remaining 59% below the ten year
quarterly average.
A total of 35 deals were
transacted in Q3, slightly up from 34 in the previous quarter with
the purchase of Atlantic House, EC1 for c.£180m, representing the
City's largest transaction since Q1 2024. The activity has tended
to focus on the smaller lot sizes with the West End accounting for
61% of all deals so far in 2024. In the City, the interest has been
focused on core-plus and value-add transactions although the recent
emergence of larger lot sizes onto the market is receiving
increasing attention from investors. The appetite and pricing for
core City assets has yet to be tested in a significant openly
marketed transaction.
A key emerging trend for London
capital markets is the widening of the demand pool with evidence of
some UK and European institutional investors returning to the
market alongside private family offices and private equity capital.
According to CBRE, during the last 12 months, overseas investors
represented approximately half of the market and domestic investors
the other half.
The widening yield spread between
prime and secondary assets highlights the strong preference for
quality, sustainable buildings. This, coupled with improving market
sentiment, strong rental growth for the best quality space and
economic recovery, is attracting investors who sense that market
yields have peaked and the trajectory is positive.
Occupational Market
The central London occupational
market demonstrated continued growth in 2024, with leasing activity
gaining significant momentum. Take-up reached 2.8m sq ft in Q3
2024, marking the highest quarterly volume of the year and bringing
year-to-date volumes to 6.6m sq ft. This represents a 5% increase
compared to the same period in 2023, surpassing the Q1-Q3 five year
average by 8%, as reported by JLL.
Demand for high-quality space
continues, with large pre-let deals driving the market. According
to industry data, banking and finance sector take-up was 22%,
closely followed by the professional sector at 19%. Significant
pre-let transactions included Citadel, BDO, Evercore and Legal
& General and it is reported that 40.9% of the total volume
under construction is already pre-leased.
Overall availability in central
London stands at 24.2m sq ft (8.5%) at the end of Q3, however the
new build vacancy rate stands at 1.5% in total and 1.1% in the
City. The market continues to favour "best-in-class" spaces,
reinforcing a "flight to quality". Real estate sector insights
support a positive outlook with elevated levels of space under
offer, 3.5m sq ft, compared to a 10 year average of 2.8m sq ft and
active demand at 12.7m sq ft, compared to a 9.4m sq ft 10 year
average.
Prime rental levels are forecast
to rise strongly as demand for the "best-in-class" space outpaces
supply. JLL predict prime rents rising from 2025-2029 by 3.8% per
annum and even higher growth levels for the "super-prime"
buildings. Occupiers are increasingly mindful of factors such as
fit-out costs and landlord counterparty risk when making
pre-leasing decisions but the drive to improve productivity,
encourage collaboration, promote employee wellbeing, attract and
retain the best talent outweighs this, enhancing the appeal of
being in the best quality office accommodation.
Development Pipeline
As stated above, the market is
poised for a demand-supply imbalance. Of the space currently under
construction JLL report that 44% is pre-let or under offer. With
regard to the completions planned post 2026 there is considerable
uncertainty on delivery with over 54% having "multiple barriers to
starting on site" (JLL Central London Market Overview).
Increasingly, existing redundant
office buildings that cannot profitably be repositioned to be
"best-in-class" buildings are being re-purposed for alternative
uses such as hotels or student accommodation. In certain
sub-markets the alternative uses generate higher values. An example
of this is our office project with Places for London at Southwark
where we are now submitting a planning application for a 429-unit
purpose built student accommodation scheme, aiming to target the
robust demand in the student housing sector in this location. We
will continue to look at other central London opportunities where
we can reposition assets to their best value use.
A planning system focused on
retrofit-first, rightly trying to reduce embodied carbon emission,
will inevitably lead to a slowdown in planning approvals as
developers seek to justify levels of demolition and new build
replacement.
Rising construction costs have
tempered but whilst this slowdown offers some relief to developers,
challenges persist. Supply chain disruptions, labour shortages and
material availability remain issues affecting project schedules.
The industry's volatility, evidenced by contractor insolvencies,
poses additional risks. As developers we are very careful in our
contractor selection and implement risk management strategies to
manage these risks.
The combination of these factors
is likely to lead to the reassessment of schemes and delays in
delivery, potentially exacerbating undersupply and driving
increased competition for those schemes that are
deliverable.
This environment presents an
excellent opportunity for developers and investors able to deliver
new, "best-in-class" schemes who can navigate the complex planning
requirements and increased regulatory scrutiny.
Conclusion
Helical is strategically
positioned to capitalise on the evolving and recovering central
London market. Our portfolio, focused on the best quality space and
amenities, aligns with current occupier requirements, attracting
tenants through our excellent credentials and proactive asset
management strategy. This year, we have achieved significant
success through the sale of our 50% interest in The JJ Mack
Building, EC1, and have also renewed our revolving credit facility,
securing it for the next three years. Furthermore, we have
commenced construction on our "best-in-class" schemes at 100 New
Bridge Street, EC4, Brettenham House, WC2 and 10 King William
Street, EC4, delivering 460,000 sq ft of space into a market which
is predicted to be undersupplied.
While maintaining a focus on
offices, we retain a flexible approach, considering diversification
into alternative property sectors to maximise available market
opportunities. We have an extensive development pipeline in vibrant
submarkets experiencing strong tenant demand and high rental growth
potential. With our strategic joint venture with Places for London,
combined with our proven track record and expertise, we are well
placed to benefit from what we see as a significant market
opportunity to create value.
Sustainability
We continue to make good progress
against the targets we set out in our sustainability strategy
"Built for the Future" and our ambitions to become a net zero
carbon business. With the recent release of the first UK Net Zero
Carbon Building Standard, we are in the process of reviewing how
our pipeline of developments aligns with the targets and limits set
within, with a view of providing a full assessment of the impact in
our Annual Report and Accounts in May 2025. In the intervening
period, we have submitted 100 New Bridge Street, EC4 to participate
in the pilot testing scheme for the Standard.
For GRESB, we have again performed
well with a score of 88% and receiving a 5 star rating in the
annual sustainability performance index for our standing investment
properties. Alongside this, we received a score of 96% for our
development activities, also resulting in a 5 star rating. This
uplift from our previous 4 star rating demonstrates the continued
improvements we are making in how we develop and manage our
assets.
For our sustainability reporting,
we received a Gold Award for the fourth consecutive year from
EPRA's Sustainability Best Practice Recommendations (sBPR). The
EPRA sBPR is intended to raise the standards and consistency of
sustainability reporting for listed real estate companies across
Europe.
During the Period we were pleased
to receive the interim design stage BREEAM certificate for 100 New
Bridge Street, EC4, achieving a score of 95% and an Outstanding
rating. Alongside this, the development was also awarded a NABERS
Design for Performance Reviewed Target Rating of 5 stars. This is
the first building within Helical's development portfolio to
achieve this milestone and sets a new standard for energy
efficiency and sustainability. We have a commitment to achieve a
minimum NABERS rating of 5 stars across all our development
schemes.
In September, the new £210m Group
Revolving Credit Facility was signed with the inclusion of three
Sustainability KPIs. The targets were selected to reflect our
development activities over the next three years and include an
embodied carbon target, BREEAM certification target and, to reflect
our commitments to growing social value, a volunteering hours
target. We will report on the performance against these targets in
May 2025 as part of our annual reporting.
Helical's Property Portfolio - 30
September 2024
Property Overview
We seek to maximise returns
through delivering income growth from creative asset management and
capital gains from our development activity. Focused on central
London, the Helical portfolio comprises investment assets we have
created and an exciting pipeline of development schemes, each
designed to the very highest standards to enable their occupiers to
thrive and benefitting the communities in which they are located.
This pipeline includes three schemes that have started on site and
will deliver 460,000 sq ft of "best-in-class" offices in 2026 into
a supply constrained market. We are actively looking to add to our
pipeline with further joint ventures and "equity-light"
opportunities.
Investment Portfolio
The Bower, EC1
The Bower is a prominent estate
comprising 312,573 sq ft of innovative, high quality office space
along with 21,059 sq ft of restaurant and retail space. The estate
is located adjacent to the former Old Street roundabout which has
been peninsularised, creating further high-quality public realm to
the benefit of The Bower and its occupiers.
The Warehouse and The Studio
The Warehouse and The Studio
comprise 141,141 sq ft of office space. In addition, there is
10,298 sq ft of fully-let retail space across the
buildings.
The buildings are 91.8% let, with
fitout works on the vacant seventh floor expected to complete at
the beginning of December.
The Tower
The Tower offers 171,432 sq ft of
office space with a contemporary façade and innovatively designed
interconnecting floors, along with 10,761 sq ft of retail space
across two units, let to food and beverage operators Serata Hall
and Wagamama.
Following the departure of WeWork,
who occupied the first six floors, Beyond The Bower (run by third
party operator infinitSpace), our serviced office offering, is
fully operational on floors one and two. Occupancy across these two
floors, by number of desks, is now 62%.
The fourth floor has been
refurbished and let on a five year lease with a three year break.
The refurbishment of the fifth and sixth floors on a fully fitted
basis has completed and these floors are now available to
let.
The third floor, previously
occupied by Stripe, under license through WeWork until June 2024,
is being refurbished.
Farfetch, who occupied six floors
across the wider Bower estate, consolidated into their three floors
in The Warehouse and assigned floors seven, eight and nine of The
Tower to Fresha, a multi-national software booking
platform.
We have also completed the renewal
of 13th floor with OpenPayd, which was due to expire in
February 2025 but has been extended for a further five years to 17
February 2030, with a break option in year three, at its ERV of £80
psf.
As a result, the building is now
83.7% occupied.
The Loom, E1
This former Victorian wool
warehouse offers 108,540 sq ft of space and we have made good
progress with our flexible lease offerings, resulting in the
letting of previously vacant space and the retention of current
tenants. Vacancy stands at 27%, down from 35% at the last year end,
following the completion of eight new lettings and five lease
renewals, including relocating existing tenants within the
building.
Sales
The JJ Mack Building,
EC1
A 206,085 sq ft office building,
including 5,474 sq ft of retail, which was developed with
AshbyCapital via a 50:50 joint venture.
The JJ Mack Building, named after the market trader who occupied
the site in the 1940s, is one of London's most sustainable new
office buildings, having recently been recognised as BREEAM's
highest rated new office development under the 2018 guidance, with
an Outstanding score of 96.42%. In addition, the building won the
2021 SECBE Digital Construction Award and has been awarded EPC A
and NABERS 5 star.
During the Period, we leased a
further 45,624 sq ft of space at 1.8% above 31 March 2024 ERVs,
taking the building to 90% let.
After the Period end, we completed
the sale of our 50% share in the building to our joint venture
partner, AshbyCapital on 31 October 2024 with £139.2m representing
our share of the property value. After accounting for debt, this
released £71.4m of equity to fund our current development
pipeline.
25 Charterhouse Square,
EC1
25 Charterhouse Square is a 42,921
sq ft office building, including 4,566 sq ft of retail space,
overlooking the historic Charterhouse Square and adjacent to the
Farringdon East Elizabeth Line station. On 25 April 2024,
we completed the sale of the long leasehold to
Ares Management, a real estate fund manager, for £43.5m.
The Power House, W4
The Power House is a listed
building, providing 21,268 sq ft of office and recording studio
space on Chiswick High Road. The building is fully let on a long
leasehold to Metropolis Music Group.
We have exchanged contracts to
sell the building for £7.0m with completion expected at the end of
November 2024.
Development Pipeline
On Site
100 New Bridge Street,
EC4
Our "best-in-class" office
development at 100 New Bridge Street is adjacent to City Thameslink
and a short walk from Farringdon and Blackfriars
stations.
This "carbon friendly new build"
will provide 191,000 sq ft of office space across seven retained
floors and three new floors, as well as 3,500 sq ft of retail space
once completed in April 2026. In addition, we will make
considerable public realm improvements to improve the street level
experience for tenants and the local community.
During the Period, we signed a
joint venture agreement with Orion Capital Managers,
a £155m (our share
£77.5m) development facility agreement with NatWest and an
institutional lender, as well as the main building contract with
Mace. Works are progressing well, with internal strip-out works now complete along with the removal
of the façade on all elevations and hard demolition has commenced
on the upper floors.
Brettenham House, WC2
We have signed a development
management agreement with the owner of Brettenham House, a 1930s
heritage office building located on the Thames between The Savoy
and Somerset House at Waterloo Bridge. We have utilised our
expertise in retrofit and refurbishments to assist with the design
of a comprehensive refurbishment of the building and obtained
planning consent for extensive amenity which will significantly
upgrade this asset. Work has commenced and is due to complete by
April 2026. Helical have committed to contributing £12.5m during
the construction phase and will receive a development management
fee of £2.5m and profit share based upon rental performance once
the building is successfully let.
Places for London Joint
Venture
Contracts were signed in July
2023, confirming Helical as the commercial office joint venture
partner of Transport for London's property company, Places for
London. This long-term partnership will see the delivery of new
high-quality and sustainable space, predominantly above or adjacent
to key transport hubs. The joint venture consists of three initial
development opportunities with construction underway at the first
of these sites, 10 King William Street, EC4.
10 King William Street, EC4
An eight-storey office development
on an island site, located above the recently opened Bank station
entrance on Cannon Street, offering 139,000 sq ft of prime office
space with attractive sized floor plates and 2,000 sq ft ground
floor retail space. Since formation of the joint venture, we have
enhanced the scheme alongside Fletcher Priest Architects and the
wider professional team.
During the summer we secured
consent for public realm enhancements making Abchurch Lane a shared
space, a much improved cycle arrival
experience and the inclusion of changing facilities and a wellness
lounge at mezzanine level, via three separate s96a planning
applications. We acquired the site on 1 October 2024 and the
basement construction works are now well underway. Terms have been
agreed for a four year, £125m development facility to fund the
construction works and we aim to achieve
practical completion of the scheme by December 2026.
Future Opportunities
Southwark OSD, SE1
The second site in our joint
venture with Places for London is located
above Southwark tube station. Prior to the formation of the joint
venture, planning was obtained for a 222,000 sq ft NIA office
scheme. After conducting feasibility studies (to determine the most
appropriate and valuable use for the site) and having detailed
pre-application discussions with Southwark Borough Council, we
submitted a planning application on 20 September 2024
proposing a purpose-built student
accommodation scheme of 429 studio units, together with a separate
building providing 44 affordable housing units.
The new scheme sees a reduction in
height and massing compared to the previously consented office
scheme, as well as retaining and enhancing Joan Street as part of
the significant improvements to local biodiversity and urban
greening.
We aim to commence on site in July
2025 with completion in Q2 2028. As part of our focus on "equity
light" opportunities, we intend to forward fund the
scheme.
Paddington OSD, W2
Situated close to the Elizabeth
Line station at Paddington, the third development in our joint
venture with Places for London is a 19-storey building that will
provide 235,000 sq ft of office space. In the Period, we received
consent to introduce terracing on each office floor and have
submitted a further application to significantly improve the end of
trip facilities and arrival experience. The site will be acquired
by the joint venture in January 2026 and the intention is to
deliver the scheme in January 2029.
Portfolio Analytics
See-through Total Portfolio by
Fair Value
|
|
Investment
£m
|
%
|
Development
£m
|
%
|
Total
£m
|
%
|
|
London Offices
|
|
|
|
|
|
|
|
- Completed properties
|
525.1
|
88.8
|
-
|
-
|
525.1
|
87.9
|
|
- Development pipeline
|
66.3
|
11.2
|
5.7
|
94.5
|
72.0
|
12.0
|
|
Total London Core
|
591.4
|
100.0
|
5.7
|
94.5
|
597.1
|
99.9
|
|
Other
|
0.1
|
0.0
|
0.3
|
5.5
|
0.4
|
0.1
|
|
Total Non-Core
Portfolio
|
0.1
|
0.0
|
0.3
|
100.0
|
0.4
|
0.1
|
|
Total
|
591.5
|
100.0
|
6.0
|
100.0
|
597.5
|
100.0
|
Capital Expenditure
We have a committed and planned
development and refurbishment programme.
|
Property
|
Capex
budget
(Helical
share)
£m
|
Proposed equity (Helical
share)
£m
|
Proposed debt (Helical
share)
£m
|
Commencement
date
|
Completion
date
|
|
Investment - committed
|
|
|
|
|
|
|
- 100 New Bridge Street,
EC4
|
53.9
|
-
|
53.9
|
On-site
|
Q2
2026
|
|
- Brettenham House, WC2
|
12.5
|
12.5
|
-
|
On-site
|
Q2
2026
|
|
- 10 King William Street,
EC4
|
95.4
|
42.1
|
53.3*
|
On-site
|
Q4
2026
|
|
- Southwark OSD, SE1
|
11.0
|
11.0
|
-
|
Q3
2025
|
Q2
2028
|
|
- Paddington OSD, W2
|
30.2
|
30.2
|
-
|
Q1
2026
|
Q1
2029
|
|
Investment - planned
|
|
|
|
|
|
|
- Paddington OSD, W2
|
127.2
|
41.1
|
86.1*
|
Q1
2026
|
Q1
2029
|
* Assumes 55% LTC debt facility
arranged for future schemes.
Asset Management
Asset management is a critical
component in driving Helical's performance. Through having well
considered business plans and maximising the combined skills of our
management team, we are able to create value in our
assets.
|
Investment portfolio
|
Passing
rent
£m
|
%
|
Contracted
rent
£m
|
%
|
ERV
£m
|
%
|
ERV change
like-for-like
%
|
|
London Offices
|
20.1
|
100.0
|
30.4
|
99.7
|
39.6
|
99.7
|
0.9
|
|
Total London
|
20.1
|
100.0
|
30.4
|
99.7
|
39.6
|
99.7
|
0.9
|
|
Other
|
0.0
|
0.0
|
0.1
|
0.3
|
0.1
|
0.3
|
0.0
|
|
Total
|
20.1
|
100.0
|
30.5
|
100.0
|
39.7
|
100.0
|
0.9
|
|
|
See-through
total portfolio contracted
rent
£m
|
|
Rent lost at
break/expiry
|
(2.4)
|
|
Contracted rent reduced through
sales
|
(2.9)
|
|
New lettings
|
2.8
|
|
Net decrease in the Period
|
(2.5)
|
* Following the sale of The
JJ Mack Building, EC1 and The Power House, W4 post Period end, the
contracted rent reduced by a further £9.2m.
Investment Portfolio
Valuation Movements
|
|
Valuation
change
inc sales
%
|
Valuation
change
exc sales
%
|
Investment
portfolio
weighting
30 September
2024
%
|
Investment portfolio
weighting
31 March
2024
%
|
|
London Offices
|
|
|
|
|
|
- Completed properties
|
0.4
|
0.4
|
88.8
|
85.0
|
|
- Development pipeline
|
9.0
|
9.0
|
11.2
|
15.0
|
|
Total
|
1.2
|
1.3
|
100.0
|
100.0
|
Portfolio Yields
|
|
EPRA
topped
up NIY
30
September
2024
%
|
EPRA
topped
up
NIY
31
March
2024
%
|
Reversionary
yield
30
September
2024
%
|
Reversionary
yield
31
March
2024
%
|
True equivalent
yield
30
September
2024
%
|
True
equivalent yield
31
March
2024
%
|
|
London Offices
|
|
|
|
|
|
|
|
- Completed properties
|
5.37
|
5.14
|
6.67
|
6.86
|
6.56
|
6.45
|
|
- Development pipeline
|
n/a
|
n/a
|
5.98
|
6.05
|
5.57
|
5.68
|
|
Total
|
5.37
|
5.14
|
6.46
|
6.60
|
6.26
|
6.34
|
See-through Capital Values,
Vacancy Rates and Unexpired Lease Terms
|
|
Capital
value
30
September
2024
£ psf
|
Capital
value
31
March
2024
£
psf
|
Vacancy
rate
30
September
2024
%
|
Vacancy
rate
31
March
2024
%
|
WAULT
30
September
2024
Years
|
WAULT
31
March
2024
Years
|
|
London Offices
|
992
|
982
|
16.1
|
17.6
|
6.8
|
6.6
|
See-through Lease Expiries or
Tenant Break Options
|
|
Half Year
to
2025
|
Year to
2026
|
Year to
2027
|
Year to
2028
|
Year to
2029
|
2029
onward
|
|
% of rent roll
|
7.8
|
4.6
|
6.6
|
32.8
|
7.7
|
40.5
|
|
Number of leases
|
15
|
13
|
8
|
17
|
5
|
28
|
|
Average rent per lease
(£)
|
158,617
|
107,603
|
251,882
|
588,186
|
466,332
|
440,327
|
Letting Activity - New
Leases
|
|
Area
sq ft
|
Area
(Helical
share)
sq ft
|
Contracted
rent
(Helical's
share)
£
|
Rent
£ psf
|
Increase
to
31 March 2024
ERV
%
|
Average
lease term to
expiry
Years
|
|
Investment Properties
|
|
|
|
|
|
|
|
Offices
|
|
|
|
|
|
|
|
- The Loom, E1
|
16,391
|
16,391
|
709,293
|
43.27
|
(1.8)
|
4.93
|
|
- The JJ Mack Building,
EC1
|
44,103
|
22,052
|
2,084,236
|
94.51
|
1.2
|
12.33
|
|
Total
|
60,494
|
38,443
|
2,793,529
|
72.67
|
0.4
|
11.26
|
|
Retail
|
|
|
|
|
|
|
|
- The JJ Mack Building,
EC1
|
1,521
|
760
|
50,000
|
65.79
|
31.6
|
5.00
|
|
Total
|
1,521
|
760
|
50,000
|
65.79
|
31.6
|
5.00
|
|
Total
|
62,015
|
39,203
|
2,843,529
|
72.53
|
0.9
|
11.13
|
Financial Review
|
IFRS Performance
|
|
EPRA Performance
|
|
Profit after tax
£4.7m (2023: loss of £93.1m)
|
EPRA earnings
£2.8m (2023: £1.4m)
|
|
Earnings per share (EPS)
3.8p (2023: loss of 75.8p)
|
EPRA EPS
2.25p (2023: 1.15p)
|
|
Diluted NAV per share
328p (31 March 2024: 326p)
|
EPRA NTA per share
331p (31 March 2024: 331p)
|
|
Total Accounting Return
1.3% (2023: -15.9%)
|
|
Total Accounting Return on EPRA
NTA
0.8% (2023: -16.6%)
|
Overview
In the Period since 31 March 2024,
the Group has made significant progress in funding its development
pipeline by selling investment assets and 50% of its office
development scheme at 100 New Bridge Street, EC4, generating
c.£245m of gross proceeds (£146m post half year). These
transactions have funded the Group's contribution to acquiring the
site at 10 King William Street, EC4, reduced gearing, post the half
year end, to a pro-forma LTV of 15.9%, the lowest level in the
Group's history, and provided all the equity expected to be
required to complete the Group's current development
programme.
Results for the Period
The IFRS profit for the Period of
£4.7m (2023: loss of £93.1m) includes revenue from rental income,
service charges and development management fees of £16.9m, offset
by direct costs of £8.3m to give a net property income of £8.6m
(2023: £12.3m). Other income was £nil (2023: £0.9m from the
sub-letting of part of the Company's head office). There was a net
gain on sale and revaluation of investment properties of £11.8m
(2023: loss of £93.4m) and the loss from joint venture activities
was £1.1m (2023: £4.5m). Administration expenses of £5.9m (2023:
£5.6m) and net finance costs of £3.8m (2023: £4.0m), were further
increased by a loss in the fair value of derivatives of £4.9m
(2023: gain of £2.1m).
The Group holds a significant
proportion of its property assets in joint ventures. As the risk
and rewards of ownership of these underlying properties are the
same as those it wholly owns, Helical supplements its IFRS
disclosure with a "see-through" analysis of alternative performance
measures, which looks through the structures to show the Group's
share of the underlying business.
The see-through results for the
Period to 30 September 2024 include net rental income of £11.0m
(2023: £12.4m), a net gain on sale and revaluation of the
investment portfolio of £9.2m (2023: loss of £96.7m) and
development profits of £0.3m (2023: loss of £0.5m), leading to a
Total Property Return of £20.4m (2023: -£84.8m). Administration
costs of £6.0m (2023: £5.8m) and see-through net finance costs of
£5.1m (2023: £5.6m) plus see-through losses from the mark-to-market
valuation of derivative financial instruments of £4.7m (2023: gains
of £2.1m) contributed to an IFRS profit of £4.7m (2023: loss of
£93.1m).
While sales of investment assets
reduced the Group's net rental income in the half year, repayment
of borrowings and the receipt of development management fees
contributed to an increase in earnings with an EPRA EPS for the
Period of 2.25p (2023: 1.15p).
The interim dividend, payable on
15 January 2025, will be 1.50p per share (2023: 3.05p).
The EPRA net tangible asset value
per share remained the same at 331p (31 March 2024:
331p).
The Group's investment portfolio,
including its share of assets held in joint ventures, decreased to
£591.5m (31 March 2024: £660.6m), primarily due to the sale of 25
Charterhouse Square, EC1 and the sale of 50% of our interest in 100
New Bridge Street, EC4, offset by capital expenditure on the
investment portfolio of £15.9m and on the development portfolio of
£4.3m.
The Group's see-through loan to
value at 30 September 2024 was 31.5% (31 March 2024: 39.5%). The
Group's weighted average cost of debt at 30 September 2024 was 3.0%
(31 March 2024: 2.9%) and the weighted average debt maturity was
2.7 years (31 March 2024: 2.1 years).
At 30 September 2024, the Group
had unutilised bank facilities of £106.5m and cash of £69.6m on a
see-through basis. These are primarily available to fund future
property acquisitions and capital expenditure.
The sale of The JJ Mack Building,
EC1 plus our share of the purchase of the site at 10 King William
Street, EC4, both completed since 30 September 2024. In addition,
we anticipate the completion of the sale of The Power House, W4 at
the end of November 2024 and together these transactions will
reduce our net borrowings, resulting in a proforma see-through LTV
of 15.9%.
Total Property Return
We calculate our Total Property
Return to enable us to assess the aggregate of income and capital
profits made each year from our property activities. Our business
is primarily aimed at producing surpluses in the value of our
assets through asset management and development, with the income
side of the business seeking to cover our annual administration and
finance costs.
|
|
Half Year
to
2024
£m
|
Half
Year to
2023
£m
|
Half
Year to
2022
£m
|
|
Total Property Return
|
20.4
|
(84.8)
|
4.0
|
See-through Total Accounting
Return
Total Accounting Return is the
growth in the net asset value of the Group plus dividends paid in
the Period, expressed as a percentage of the net asset value at the
beginning of the Period. The metric measures the growth in
Shareholders' Funds each Period and is expressed as an absolute
measure.
|
|
Half Year
to
2024
%
|
Half
Year to
2023
%
|
Half
Year to
2022
%
|
|
Total Accounting Return on IFRS
net assets
|
1.3
|
(15.9)
|
2.3
|
Total Accounting Return on EPRA
net tangible assets is the growth in the EPRA net tangible asset
value of the Group plus dividends paid in the Period, expressed as
a percentage of the EPRA net tangible asset value at the beginning
of the Period.
|
|
Half Year
to
2024
%
|
Half
Year to
2023
%
|
Half
Year to
2022
%
|
|
Total Accounting Return on EPRA
net tangible assets
|
0.8
|
(16.6)
|
(2.5)
|
Earnings/Loss Per Share
(EPS)
The IFRS loss per share of 75.8p
in the first half of the last financial year improved to IFRS
earnings of 3.8p this financial year and is based on the after tax
earnings (2023: loss) attributable to ordinary Shareholders divided
by the weighted average number of shares in issue during the
year.
On an EPRA basis, the earnings per
share were 2.25p compared to an earnings per share of 1.15p in
2023, reflecting a decrease in the Group's share of net finance
costs to £5.1m (2023: £5.6m) and an increase in development profits
to £0.3m (2023: loss of £0.5m) offset by a reduction in net rental
income to £11.0m (2023: £12.4m). EPRA EPS excludes gains on sale
and revaluation of investment properties of £9.2m (2023: loss of
£96.7m).
Net Asset Value
IFRS diluted net asset value per
share increased to 328p per share (31 March 2024: 326p) and is a
measure of Shareholders' Funds divided by the number of shares in
issue at the Period end, adjusted to allow for the effect of all
dilutive share awards.
EPRA net tangible asset value per
share remained at 331p (31 March 2024: 331p).
EPRA net disposal value per share
increased to 328p (31 March 2024: 327p).
Income Statement
Rental Income and Property
Overheads
Gross rental income for the Group
in respect of wholly owned properties decreased to £10.3m (2023:
£17.1m) before adjusting for lease incentives.
In order to spread the impact of
rent free periods over the term of the associated leases,
additional rental income of £0.1m has been added to gross rental
income reflecting accrued income from lease incentives (2023: £4.3m
was offset against gross rental income reflecting the net reversal
of previously recognised rental income accrued in advance of
receipt). In 2023, £2.9m of this adjustment related to the
unexpired lease incentives provided to WeWork which were reversed
on the termination of their leases during the half year. Overall,
this resulted in gross rental income of wholly owned properties of
£10.4m (2023: £12.8m).
|
|
|
2024
£000
|
2023
£000
|
|
Gross rental income (excluding
lease incentives)
|
- subsidiaries
|
10,351
|
17,111
|
|
Lease incentives
|
- subsidiaries
|
52
|
(4,307)
|
|
Total gross rental income
|
|
10,403
|
12,804
|
Gross rental income in joint
ventures increased to £3.1m (2023: £0.9m) as a result of lettings
at The JJ Mack Building, EC1.
Property overheads in respect of
wholly owned assets and in respect of those assets in joint
ventures increased to £2.5m (2023: £1.3m) reflecting increased
vacancy in the investment portfolio.
Overall, see-through net
rents decreased by 11.4% to £11.0m (2023: £12.4m).
The table below demonstrates the
movement of the accrued income balance for rent free periods
granted and the respective rental income adjustment over the period
to 31 March 2028, based on the tenant leases as at 30 September
2024. The actual adjustment will vary depending on lease events
such as new lettings and early terminations and future acquisitions
or disposals.
|
|
Accrued
income
£000
|
Adjustment to rental
income
£000
|
|
6 months to 31 March
2025
|
6,847
|
(266)
|
|
Year to 31 March 2026
|
5,338
|
(1,509)
|
|
Year to 31 March 2027
|
3,838
|
(1,500)
|
|
Year to 31 March 2028
|
2,588
|
(1,250)
|
Rent Collection
We have collected 100% of all rent
contracted and payable for the half year to 30 September 2024 and
so far have collected 98.5% of the September 2024 quarter rents
demanded (98.8% at the corresponding date last year). At 30
September 2024 there was a bad debt provision of £26,000 against
the total rent debtor, all in respect of tenants at The Loom,
E1.
Development Profits
In the Group, development
management fees of £0.4m plus a £0.1m net contribution from the
retail scheme at East Ham, offset by professional indemnity
insurance and consultancy fees on our development schemes of £0.1m,
resulted in a net development profit of £0.3m (2023: loss of
£0.5m).
Share of Results of Joint
Ventures
Net rental income recognised in
the Period was £2.7m (2023: £0.5m) as a result of significant
lettings at The JJ Mack Building, EC1 over the past
year.
The revaluation of our investment
properties held in joint ventures generated a deficit of £2.7m
(2023: £3.3m).
Finance, administration and other
sundry costs totalling £1.1m (2023: £1.7m) were incurred and after
a tax charge of £nil (2023: £nil), there was a net loss from our
joint ventures of £1.1m (2023: £4.5m).
Gain on Sale and Revaluation of
Investment Properties
There was a gain on revaluation in
the Group of £1.8m which together with the loss on valuation in
joint ventures of £2.7m resulted in an overall see-through loss on
valuation of £0.9m. This was offset by the gain on sales of our
investment portfolio on a see-through basis of £10.1m and resulted
in an overall gain on sale and revaluation, including in joint
ventures, of £9.2m (2023: loss of £96.7m).
Administrative Expenses
Administration costs in the Group,
before performance related awards, increased by 9.6% from £4.7m to
£5.1m.
Performance related share awards
and bonus payments decreased to £0.8m (2023: £0.9m). Of this
amount, £0.4m (2023: £0.7m), being the charge for share awards
under the Performance Share Plan, is expensed through the Income
Statement but added back to Shareholders' Funds through the
Statement of Changes in Equity.
|
|
2024
£000
|
2023
£000
|
|
Administrative expenses (excluding
performance related awards)
|
4,493
|
4,655
|
|
Accelerated depreciation change
and restructuring costs
|
607
|
-
|
|
Performance related awards and
related NIC
|
795
|
915
|
|
Group
|
5,895
|
5,570
|
|
In joint ventures
|
82
|
188
|
|
Total
|
5,977
|
5,758
|
Administrative expenditure of
£5.1m for the half year to 30 September 2024 includes £0.6m of
non-recurring expenditure, including costs reflecting an
accelerated depreciation of leasehold improvements at our current
head office in anticipation of our move to new offices in December
2024. The Group remains on track to reduce fixed overheads by 25%
by the end of March 2025.
Finance Costs, Finance Income and
Change in Fair Value of Derivative Financial Instruments
Net finance costs excluding
changes in fair value of derivative financial instruments, but
including joint ventures, reduced to £5.1m (2023:
£5.6m).
|
Group
|
|
2024
£000
|
2023
£000
|
|
Interest payable on secured bank
loans
|
|
(1,511)
|
(2,878)
|
|
Other interest payable and similar
charges
|
|
(1,276)
|
(1,487)
|
|
Total interest payable before
cancellation of loans
|
|
(2,787)
|
(4,365)
|
|
Cancellation of loans
|
|
(1,960)
|
-
|
|
Total finance costs
|
|
(4,747)
|
(4,365)
|
|
Finance income
|
|
923
|
328
|
|
Finance costs net of finance
income
|
|
(3,824)
|
(4,037)
|
|
Joint Ventures
|
|
|
|
|
Interest payable on secured bank
loans
|
|
(1,209)
|
(1,502)
|
|
Other interest payable and similar
charges
|
|
(108)
|
(104)
|
|
Total finance costs
|
|
(1,317)
|
(1,606)
|
|
Finance income
|
|
27
|
18
|
|
Finance costs net of finance
income
|
|
(1,290)
|
(1,588)
|
|
|
|
|
|
|
Total finance costs net of finance
income
|
|
(5,114)
|
(5,625)
|
The movement downwards in medium
and long-term interest rate projections during the Period, together
with a restructuring of the interest rate swaps contributed to a
loss of £4.9m (2023: gain £2.1m) on the mark-to-market valuation of
the derivative financial instruments in the Group. In the joint
ventures, a new swap was taken out, resulting in a gain of £0.2m in
the Period.
|
IFRS Disclosure
|
|
2024
£000
|
2023
£000
|
|
Finance costs net of finance
income - Group
|
|
(3,824)
|
(4,037)
|
|
Change in fair value of derivative
financial instruments
|
|
(4,893)
|
2,098
|
|
Net finance costs and change in
fair value of financial instruments
|
|
(8,717)
|
(1,939)
|
Taxation
The Group has been a REIT since 1
April 2022, and is exempt from UK corporation tax on the profits of
its property activities that fall within the REIT regime.
Helical will continue to pay corporation tax on
its profits that are not within this regime.
As a consequence, the tax charge
for the Period was £nil (2023: £nil).
Dividends
The Board has declared an interim
dividend for the Period of 1.50p (2023: 3.05p) per share,
representing the minimum PID payment required under the REIT
regime.
Balance Sheet
Shareholders' Funds
Shareholders' Funds at 1 April
2024 were £401.1m. The Group generated total comprehensive income
for the Period of £4.7m (2023: loss of £93.1m). Movements in
reserves arising from the Group's share schemes increased funds by
£0.4m as a result of the charge for the Performance Share Scheme
being added back. The Company paid dividends to Shareholders during
the Period of £1.9m. As a result of these movements, Shareholders'
Funds increased by £3.2m to £404.2m.
Investment Portfolio
|
|
|
Wholly
owned
£000
|
In joint
venture
£000
|
See-through
£000
|
Head
leases capitalised
£000
|
Lease
incentives
£000
|
Book
value
£000
|
|
Valuation at 31 March
2024
|
479,600
|
138,250
|
617,850
|
4,331
|
(8,848)
|
613,333
|
|
Capital expenditure
|
- wholly owned
|
3,782
|
-
|
3,782
|
-
|
-
|
3,782
|
|
|
- joint ventures
|
-
|
12,135
|
12,135
|
(15)
|
-
|
12,120
|
|
Site acquisition
|
- joint ventures
|
-
|
55,000
|
55,000
|
-
|
-
|
55,000
|
|
Letting costs amortised
|
- wholly owned
|
(70)
|
-
|
(70)
|
-
|
-
|
(70)
|
|
|
- joint ventures
|
-
|
(50)
|
(50)
|
-
|
-
|
(50)
|
|
Transfer to assets held for
sale
|
- wholly owned
|
(6,880)
|
-
|
(6,880)
|
-
|
-
|
(6,880)
|
|
Disposals
|
- wholly owned
|
(99,178)
|
-
|
(99,178)
|
-
|
-
|
(99,178)
|
|
Revaluation
(deficit)/surplus
|
- wholly owned
|
1,896
|
-
|
1,896
|
-
|
(139)
|
1,757
|
|
|
- joint ventures
|
-
|
161
|
161
|
-
|
(2,855)
|
(2,694)
|
|
Valuation at 30 September 2024
|
379,150
|
205,496
|
584,646
|
4,316
|
(11,842)
|
577,120
|
The Group expended £15.9m on
capital works across the investment portfolio on a see-through
basis; at 100 New Bridge Street, EC4 (£11.4m), The Bower, EC1
(£3.3m), The JJ Mack Building, EC1 (£0.9m), and The Loom, E1
(£0.3m).
Revaluation gains resulted in a
£2.1m increase in the see-through fair value of the portfolio,
before lease incentives, to £584.6m (31 March 2024: £617.9m). The
accounting for head leases and lease incentives resulted in a book
value of the see-through investment portfolio of £577.1m (31 March
2024: £613.3m).
Debt and Financial Risk
In total, the see-through
outstanding debt at 30 September 2024 of £260.9m (31 March 2024:
£296.1m) had a weighted average interest cost of 3.0% (31 March
2024: 2.9%) and a weighted average debt maturity of 2.7 years (31
March 2024: 2.1 years).
Debt Profile at 30 September 2024
- Excluding the Amortisation of Arrangement Fees
|
|
Total
facility
£000s
|
Total
utilised
£000s
|
Available
facility
£000s
|
Weighted
average interest rate
%
|
Average
maturity of borrowings
Years
|
|
£210m Revolving Credit
Facility
|
210,000
|
188,000
|
22,000
|
3.1
|
3.0
|
|
Total wholly owned
|
210,000
|
188,000
|
22,000
|
3.1
|
3.0
|
|
In joint ventures
|
|
|
|
|
|
|
-
The JJ Mack Building, EC1
|
69,900
|
67,151
|
2,749
|
2.3
|
0.8
|
|
-
100 New Bridge Street, EC4
|
77,500
|
5,785
|
71,715
|
8.5*
|
3.6
|
|
Total secured debt
|
357,400
|
260,936
|
96,464
|
3.0
|
2.7
|
|
Working capital
|
10,000
|
-
|
10,000
|
-
|
1.0
|
|
Total unsecured debt
|
10,000
|
-
|
10,000
|
-
|
1.0
|
|
Total debt
|
367,400
|
260,936
|
106,464
|
3.0
|
2.7
|
* Excludes commitment
fees.
The debt secured on the investment
portfolio at 30 September 2024 had a weighted average interest rate
of 3.1% with an average maturity of three years, extendable at the
Group's option to five years. The debt in joint ventures, secured
on The JJ Mack Building, EC1 and 100 New Bridge Street, EC4 had a
weighted average interest rate of 2.8% and an average maturity of
2.3 years.
At 30 September 2024, the Group's
borrowings under the £210m RCF (reduced from £300m in September
2024) of £188m were fully covered by £200m of interest rate
swaps.
Subsequent to the half year,
drawings under the RCF were reduced to £138m following the
completion of the sale of The JJ Mack Building, EC1. Further
restructuring of the interest rate swaps down to £175m meant that
current drawings are overhedged by £37m. As we expect to draw down
further amounts under the RCF, we plan to keep the hedging level at
£175m. As a consequence of these changes, the schedule of
borrowings post half year end is as follows:
|
|
Total
facility
£000s
|
Total
utilised
£000s
|
Available
facility
£000s
|
Weighted
average interest rate
%
|
Average
maturity of borrowings
Years
|
|
£210m Revolving Credit
Facility
|
210,000
|
138,000
|
72,000
|
3.0
|
3.0
|
|
Total wholly owned
|
210,000
|
138,000
|
72,000
|
3.0
|
3.0
|
|
In joint ventures
|
|
|
|
|
|
|
-
100 New Bridge Street, EC4
|
77,500
|
5,785
|
71,715
|
8.5*
|
3.6
|
|
Total secured debt
|
287,500
|
143,785
|
143,715
|
3.2
|
3.2
|
|
Working capital
|
10,000
|
-
|
10,000
|
-
|
1.0
|
|
Total unsecured debt
|
10,000
|
-
|
10,000
|
-
|
1.0
|
|
Total debt
|
297,500
|
143,785
|
153,715
|
3.2
|
3.1
|
* Excludes commitment
fees.
Secured Debt
The Group arranges its secured
investment and development facilities to suit its business needs as
follows:
-
£210m Revolving Credit Facility
During the Period, the Group
reduced its Revolving Credit Facility from £300m to £210m. All of
the Group's wholly owned investment assets are secured in this
facility. The value of the Group's properties secured in this
facility at 30 September 2024 was £386m (31 March 2024: £522m) with
a corresponding loan to value of 48.7% (31 March 2024: 44.0%). The
average maturity of the facility at 30 September 2024 was 3.0 years
(31 March 2024: 2.3 years), with two one-year extension options
which, if exercised, would extend the facility's repayment date to
September 2029.
-
Joint Venture Facilities
The Group has a number of
investment and development properties in joint ventures with third
parties and includes our share, in proportion to our economic
interest, of the debt associated with each asset.
During the Period, a new £155m
facility was arranged with an institutional lender and NatWest to
finance 100 New Bridge Street, EC4 at a fixed rate of 3.8% plus
margin. This margin starts at 4.65% during the development phase,
reducing to 2.25% on letting post completion.
The Group's share of bank
facilities in joint ventures at 30 September 2024 was comprised of
debt of £67.2m against The JJ Mack Building, EC1 and £5.8m against
100 New Bridge Street, EC4. The debt against The JJ Mack Building,
EC1 had a weighted average interest rate of 2.3% and an average
maturity of 0.8 years. This debt was subsequently transferred to
the purchaser on sale of the building in October 2024. The debt
against 100 New Bridge Street, EC4 had a weighted average interest
rate (excluding commitment fees) of 8.5% and an average maturity of
3.6 years at 30 September 2024.
Unsecured Debt
The Group's utilised unsecured
debt is £nil (31 March 2024: £nil).
Cash and Cash Flow
At 30 September 2024, the Group
had £176.1m (31 March 2024: £115.5m) of cash and agreed, undrawn,
committed bank facilities including its share in joint
ventures.
Net Borrowings and
Gearing
Total gross borrowings of the
Group, including in joint ventures, have decreased from £296.1m to
£260.9m during the Period to 30 September 2024 as a result of the
sale of 25 Charterhouse Square, EC1, offset by funds drawn down
against 100 New Bridge Street, EC4. After deducting cash balances
of £69.6m (31 March 2024: £31.7m) and unamortised refinancing costs
of £3.2m (31 March 2024: £2.8m), see-through net borrowings
decreased from £261.6m to £188.1m. The see-through gearing of the
Group, including in joint ventures, decreased from 65.2% to
46.5%.
Following the sale of The JJ Mack
Building, EC1, and the purchase of the site at 10 King William
Street, EC4 (our share 51%), both completed in October 2024, and
the anticipated completion of the sale of The Power House, W4 at
the end of November 2024, our pro-forma see-through loan to value
falls to 15.9% and our pro-forma see-through gearing falls to
19.1%.
|
|
Pro-forma
30
September
2024
|
30
September
2024
|
31
March
2024
|
|
See-through gross
borrowings
|
£143.8m
|
£260.9m
|
£296.1m
|
|
See-through cash
balances
|
£63.9m
|
£69.6m
|
£31.7m
|
|
Unamortised refinancing
costs
|
£2.9m
|
£3.2m
|
£2.8m
|
|
See-through net
borrowings
|
£77.0m
|
£188.1m
|
£261.6m
|
|
Shareholders' funds
|
£404.2m
|
£404.2m
|
£401.1m
|
|
See-through loan to
value
|
-
|
31.5%
|
39.5%
|
|
Pro-forma see-through loan to
value
|
15.9%
|
-
|
-
|
|
See-through gearing - IFRS net
asset value
|
-
|
46.5%
|
65.2%
|
|
Pro-forma see-through gearing -
IFRS net asset value
|
19.1%
|
-
|
-
|
Tim Murphy
Chief Financial Officer
25 November 2024
Statement of Directors'
Responsibilities
We confirm that to the best of our
knowledge:
a) The condensed unaudited
consolidated financial statements have been prepared in accordance
with IAS 34 Interim Financial
Reporting;
b) The interim
management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events and their
impact during the first six months and description of principal
risks and uncertainties for the remaining six months of the year);
and
c) The interim
management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions
and changes therein).
On behalf of the Board
Tim Murphy
Chief Financial Officer
25 November 2024
Independent Review Report to
Helical Plc
Conclusion
We have been engaged by Helical
plc ('the Company') to review the condensed set of financial
statements of the Company and its subsidiaries (the 'Group') in the
half year financial report for the six months ended 30 September
2024 which comprises the unaudited consolidated income statement,
unaudited consolidated balance sheet, unaudited consolidated cash
flow statement, unaudited consolidated statement of changes in
equity and notes to the half year results. We have read the other
information contained in the half-yearly financial report and
considered whether it contains any apparent material misstatements
of fact or material inconsistencies with the information in the
condensed set of financial statements.
Based on our review, nothing has
come to our attention that causes us to believe that the condensed
set of financial statements in the half-yearly financial report for
the six months ended 30 September 2024 is not prepared, in all
material respects, in accordance with International Accounting
Standard 34, "Interim Financial Reporting" as contained in
UK-adopted International Accounting Standards, and the Disclosure
Guidance and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
Basis for Conclusion
We conducted our review in
accordance with International Standard on Review Engagements (UK)
2410, "Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" ('ISRE (UK) 2410') issued for
use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with
International Standards on Auditing (UK) and consequently does not
enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
As disclosed in Note 1, the annual
financial statements of the Group are prepared in accordance with
UK-adopted International Accounting Standards. The condensed set of
financial statements included in this half-yearly financial report
has been prepared in accordance with International Accounting
Standard 34, "Interim Financial Reporting" as contained in
UK-adopted International Accounting Standards.
Conclusions Relating to Going
Concern
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or
that management have identified material uncertainties relating to
going concern that are not appropriately disclosed.
This conclusion is based on the
review procedures performed in accordance with ISRE (UK) 2410,
however future events or conditions may cause the Group and the
Company to cease to continue as a going concern.
Responsibilities of
Directors
The half-yearly financial report,
is the responsibility of, and has been approved by, the Directors.
The Directors are responsible for preparing the half-yearly
financial report in accordance with International Accounting
Standard 34, "Interim Financial Reporting" as contained in
UK-adopted International Accounting Standards and the Disclosure
Guidance and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
In preparing the half-yearly
financial report, the Directors are responsible for assessing the
Group's and the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Directors
either intend to liquidate the Group or the Company or to cease
operations, or have no realistic alternative but to do
so.
Auditor's Responsibilities for the
Review of the Financial Information
In reviewing the half-yearly
financial report, we are responsible for expressing to the Company
a conclusion on the condensed set of financial statements in the
half-yearly financial report. Our conclusion, including our
Conclusions Relating to Going Concern, are based on procedures that
are less extensive than audit procedures, as described in the Basis
for Conclusion paragraph of this report.
Use of our Report
This report is made solely to the
Company in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information
performed by the Independent Auditor of the Entity". Our review
work has been undertaken so that we might state to the Company
those matters we are required to state to them in an independent
review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company, for our review work, for this
report, or for the conclusions we have formed.
RSM UK Audit LLP
Chartered Accountants
25 Farringdon Street
London
EC4A 4AB
25 November 2024
Unaudited Consolidated
Income Statement
For the Half Year to 30 September
2024
|
|
Notes
|
Half Year to
30 September 2024
£000
|
Half Year to
30 September 2023
£000
|
Year to
31 March
2024
£000
|
|
Revenue
|
3
|
16,920
|
20,129
|
39,905
|
|
Cost of sales
|
3
|
(8,361)
|
(7,857)
|
(14,450)
|
|
Net property income
|
4
|
8,559
|
12,272
|
25,455
|
|
Share of results of joint
ventures
|
12
|
(1,143)
|
(4,499)
|
(9,310)
|
|
|
|
7,416
|
7,773
|
16,145
|
|
Gain on sale of Investment
properties
|
5
|
10,090
|
-
|
-
|
|
Revaluation gain/(loss) on
Investment properties
|
11
|
1,757
|
(93,367)
|
(181,213)
|
|
|
|
19,263
|
(85,594)
|
(165,068)
|
|
Administrative expenses
|
6
|
(5,895)
|
(5,570)
|
(11,011)
|
|
Operating profit/(loss)
|
|
13,368
|
(91,164)
|
(176,079)
|
|
Net finance costs and change in
fair value of derivative financial instruments
|
7
|
(8,717)
|
(1,939)
|
(13,556)
|
|
Profit/(loss) before
tax
|
|
4,651
|
(93,103)
|
(189,635)
|
|
Tax on profit/(loss) on ordinary
activities
|
8
|
-
|
-
|
(179)
|
|
Profit/(loss) for the period
|
|
4,651
|
(93,103)
|
(189,814)
|
|
|
|
|
|
|
|
Earnings/(loss) per share
|
10
|
|
|
|
|
Basic
|
|
3.8p
|
(75.8)p
|
(154.6)p
|
|
Diluted
|
|
3.8p
|
(75.8)p
|
(154.6)p
|
There were no items of
comprehensive income in the current or prior periods other than the
profit/(loss) for the Period and, accordingly, no Statement of
Comprehensive Income is presented.
Unaudited Consolidated Balance
Sheet
At 30 September 2024
|
|
Notes
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Non-current assets
|
|
|
|
|
|
Investment properties
|
11
|
371,933
|
595,073
|
472,522
|
|
Owner occupied property, plant and
equipment
|
|
2,826
|
3,631
|
3,569
|
|
Investment in joint
ventures
|
12
|
142,042
|
82,141
|
73,923
|
|
Other investments
|
13
|
586
|
434
|
565
|
|
Derivative financial instruments
|
21
|
12,742
|
25,343
|
17,635
|
|
Trade and other
receivables
|
16
|
1,056
|
1,449
|
1,252
|
|
|
|
531,185
|
708,071
|
569,466
|
|
Current assets
|
|
|
|
|
|
Land and developments
|
14
|
28
|
28
|
28
|
|
Asset held for sale
|
15
|
6,880
|
-
|
42,761
|
|
Corporation tax
receivable
|
|
-
|
7
|
-
|
|
Trade and other
receivables
|
16
|
15,472
|
16,697
|
16,981
|
|
Cash and cash
equivalents
|
17
|
66,130
|
37,040
|
28,633
|
|
|
|
88,510
|
53,772
|
88,403
|
|
Total assets
|
|
619,695
|
761,843
|
657,869
|
|
Current liabilities
|
|
|
|
|
|
Trade and other
payables
|
18
|
(25,023)
|
(26,406)
|
(24,886)
|
|
Lease liability
|
19
|
(861)
|
(695)
|
(829)
|
|
|
|
(25,884)
|
(27,101)
|
(25,715)
|
|
Non-current liabilities
|
|
|
|
|
|
Borrowings
|
20
|
(186,594)
|
(227,176)
|
(227,634)
|
|
Lease liability
|
19
|
(3,008)
|
(5,238)
|
(3,445)
|
|
|
|
(189,602)
|
(232,414)
|
(231,079)
|
|
Total liabilities
|
|
(215,486)
|
(259,515)
|
(256,794)
|
|
|
|
|
|
|
|
Net assets
|
|
404,209
|
502,328
|
401,075
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Called-up share capital
|
22
|
1,233
|
1,233
|
1,233
|
|
Share premium account
|
|
116,619
|
116,619
|
116,619
|
|
Revaluation reserve
|
|
(48,502)
|
(46,951)
|
(134,797)
|
|
Capital redemption
reserve
|
|
7,743
|
7,743
|
7,743
|
|
Own shares held
|
|
(1,675)
|
(1,675)
|
(1,675)
|
|
Other reserves
|
|
291
|
291
|
291
|
|
Retained earnings
|
|
328,500
|
425,068
|
411,661
|
|
Total equity
|
|
404,209
|
502,328
|
401,075
|
Unaudited Consolidated Cash Flow
Statement
For the Half Year to 30 September
2024
|
|
Half Year to
30 September 2024
£000
|
Half Year to
30 September 2023
£000
|
Year to
31 March
2024
£000
|
|
Cash flows from operating activities
|
|
|
|
|
Profit/(loss) before
tax
|
4,651
|
(93,103)
|
(189,635)
|
|
Adjustment for:
|
|
|
|
|
Depreciation
|
844
|
420
|
1,506
|
|
Revaluation (gain)/loss on
Investment properties
|
(1,757)
|
93,367
|
181,213
|
|
Letting cost
amortisation
|
70
|
56
|
168
|
|
Gain on sale of Investment
properties
|
(10,090)
|
-
|
-
|
|
Profit on sale of plant and
equipment
|
(36)
|
-
|
(29)
|
|
Net financing costs
|
3,824
|
4,037
|
7,947
|
|
Change in value of derivative
financial instruments
|
4,893
|
(2,098)
|
5,609
|
|
Share based payment
charge
|
396
|
698
|
1,039
|
|
Share of results of joint
ventures
|
1,143
|
4,499
|
9,310
|
|
Gain on sublet of the Group's head
office
|
-
|
(902)
|
(902)
|
|
Cash inflows from operations before changes in working
capital
|
3,938
|
6,974
|
16,226
|
|
Change in trade and other
receivables
|
1,709
|
8,483
|
9,555
|
|
Change in trade and other
payables
|
495
|
(4,997)
|
(6,581)
|
|
Cash inflows generated from operations
|
6,142
|
10,460
|
19,200
|
|
Finance costs
|
(4,148)
|
(3,698)
|
(7,587)
|
|
Finance income
|
923
|
328
|
661
|
|
|
(3,225)
|
(3,370)
|
(6,926)
|
|
Net cash generated from operating activities
|
2,917
|
7,090
|
12,274
|
|
Cash flows from investing activities
|
|
|
|
|
Additions to Investment
property
|
(3,782)
|
(6,814)
|
(16,038)
|
|
Purchase of other
investments
|
(21)
|
(81)
|
(212)
|
|
Net proceeds from sale of
Investment property
|
152,029
|
-
|
-
|
|
Investments in joint
ventures
|
(69,742)
|
(1,375)
|
(3,861)
|
|
Returns from joint
ventures
|
481
|
2,066
|
5,666
|
|
Sale of plant and
equipment
|
52
|
-
|
30
|
|
Purchase of leasehold
improvements, plant and equipment
|
(118)
|
(491)
|
(618)
|
|
Net cash generated from/(used by) investing
activities
|
78,899
|
(6,695)
|
(15,033)
|
|
Cash flows from financing activities
|
|
|
|
|
Borrowings repaid
|
(42,000)
|
-
|
-
|
|
Lease liability
payments
|
(406)
|
(338)
|
(708)
|
|
Purchase of own shares
|
-
|
(4,402)
|
(4,402)
|
|
Equity dividends paid
|
(1,913)
|
(9,540)
|
(14,423)
|
|
Net cash used by financing
activities
|
(44,319)
|
(14,280)
|
(19,533)
|
|
Net increase/(decrease) in cash and cash
equivalents
|
37,497
|
(13,885)
|
(22,292)
|
|
Cash and cash equivalents at start
of period
|
28,633
|
50,925
|
50,925
|
|
Cash and cash equivalents at end of period
|
66,130
|
37,040
|
28,633
|
Unaudited Consolidated
Statement of Changes in Equity
At 30 September 2024
|
|
Share
capital
£000
|
Share
premium
£000
|
Revaluation
reserve
£000
|
Capital
redemption
reserve
£000
|
Own shares
held
£000
|
Other
reserves
£000
|
Retained
earnings
£000
|
Total
£000
|
|
At 31 March 2023
|
1,233
|
116,619
|
46,416
|
7,743
|
(848)
|
291
|
437,221
|
608,675
|
|
Total comprehensive
expense
|
-
|
-
|
-
|
-
|
-
|
-
|
(189,814)
|
(189,814)
|
|
Revaluation deficit
|
-
|
-
|
(181,213)
|
-
|
-
|
-
|
181,213
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners
|
|
|
|
|
|
|
|
|
|
Performance Share Plan
|
-
|
-
|
-
|
-
|
-
|
-
|
1,039
|
1,039
|
|
Purchase of own shares
|
-
|
-
|
-
|
-
|
(4,402)
|
-
|
-
|
(4,402)
|
|
Share settled Performance Share
Plan
|
-
|
-
|
-
|
-
|
2,352
|
-
|
(2,352)
|
-
|
|
Share settled bonus
|
-
|
-
|
-
|
-
|
1,223
|
-
|
(1,223)
|
-
|
|
Dividends paid
|
-
|
-
|
-
|
-
|
-
|
-
|
(14,423)
|
(14,423)
|
|
Total transactions with
owners
|
-
|
-
|
-
|
-
|
(827)
|
-
|
(16,959)
|
(17,786)
|
|
|
|
|
|
|
|
|
|
|
|
At 31 March 2024
|
1,233
|
116,619
|
(134,797)
|
7,743
|
(1,675)
|
291
|
411,661
|
401,075
|
|
Total comprehensive
income
|
-
|
-
|
-
|
-
|
-
|
-
|
4,651
|
4,651
|
|
Revaluation surplus
|
-
|
-
|
1,757
|
-
|
-
|
-
|
(1,757)
|
-
|
|
Realised on disposals
|
-
|
-
|
84,538
|
-
|
-
|
-
|
(84,538)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners
|
|
|
|
|
|
|
|
|
|
Performance Share Plan
|
-
|
-
|
-
|
-
|
-
|
-
|
396
|
396
|
|
Dividends paid
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,913)
|
(1,913)
|
|
Total transactions with
owners
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,517)
|
(1,517)
|
|
|
|
|
|
|
|
|
|
|
|
At 30 September 2024
|
1,233
|
116,619
|
(48,502)
|
7,743
|
(1,675)
|
291
|
328,500
|
404,209
|
|
|
Share
capital
£000
|
Share
premium
£000
|
Revaluation
reserve
£000
|
Capital
redemption
reserve
£000
|
Own
shares
held
£000
|
Other
reserves
£000
|
Retained
earnings
£000
|
Total
£000
|
|
At 31 March 2023
|
1,233
|
116,619
|
46,416
|
7,743
|
(848)
|
291
|
437,221
|
608,675
|
|
Total comprehensive
income
|
-
|
-
|
-
|
-
|
-
|
-
|
(93,103)
|
(93,103)
|
|
Revaluation deficit
|
-
|
-
|
(93,367)
|
-
|
-
|
-
|
93,367
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners
|
|
|
|
|
|
|
|
|
|
Performance Share Plan
|
-
|
-
|
-
|
-
|
-
|
-
|
698
|
698
|
|
Purchase of own shares
|
-
|
-
|
-
|
-
|
(4,402)
|
-
|
-
|
(4,402)
|
|
Share settled Performance Share
Plan
|
-
|
-
|
-
|
-
|
2,352
|
-
|
(2,352)
|
-
|
|
Share settled bonus
|
-
|
-
|
-
|
-
|
1,223
|
-
|
(1,223)
|
-
|
|
Dividends paid
|
-
|
-
|
-
|
-
|
-
|
-
|
(9,540)
|
(9,540)
|
|
Total transactions with
owners
|
-
|
-
|
-
|
-
|
(827)
|
-
|
(12,417)
|
(13,244)
|
|
|
|
|
|
|
|
|
|
|
|
At 30 September 2023
|
1,233
|
116,619
|
(46,951)
|
7,743
|
(1,675)
|
291
|
425,068
|
502,328
|
Unaudited Notes to the Half Year
Results
1. Financial Information
and Basis of Preparation
The Company is a public limited
company incorporated and domiciled in England and Wales and listed
on the Main Market of the London Stock Exchange. The registered
office address is 5 Hanover Square, London, W1S 1HQ. These
condensed interim financial statements were approved for issue on
25 November 2024.
The financial information
contained in this statement does not constitute statutory accounts
within the meaning of section 434 of the Companies Act 2006. The
full accounts for the year ended 31 March 2024, approved by the
Board of Directors on 23 May 2024, which were prepared under
International Financial Reporting Standards as adopted by the
United Kingdom and which received an unqualified report from the
Auditors, and did not contain a statement under Section 498(2) or
Section 498(3) of the Companies Act 2006, have been filed with the
Registrar of Companies.
These interim condensed unaudited
consolidated financial statements do not include all of the
information required for full annual financial statements and
should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 March
2024.
These interim condensed unaudited
consolidated financial statements have been prepared in accordance
with IAS 34 Interim Financial
Reporting as adopted by the United Kingdom and the
Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority. The same accounting policies
and methods of computation are followed in the 30 September 2024
interim condensed unaudited consolidated financial statements as in
the most recent annual financial statements.
Change in Accounting
Policies
In the current year, the following
amendments have been adopted which were effective for the periods
commencing on or after 1 January 2024:
· Amendments to IAS 1: Non-current
liabilities with covenants, and classification of liabilities as
current or non-current;
· Amendments to IFRS 16: Lease liability in a sale and
leaseback; and
· Amendments to IAS 7 and IFRS 7: Supplier Finance
Arrangements.
As a result of the adoption of the
amendments to IAS 1, the Group changes its accounting policy for
the classification of borrowings:
· "Borrowings are classified as current liabilities unless at
the end of the reporting period the Group has a right to defer
settlement of the liability for at least 12 months after the
reporting period."
This new policy did not result in
a change in the classification of the Group's borrowings. The Group
did not make any retrospective adjustments as a result of adopting
the amendments to IAS 1.
Standards and
Interpretations in issue but not yet effective
At the date of authorisation of
these financial statements there were standards and amendments
which were in issue but not yet effective and which have not been
applied.
The principal ones
were:
· Amendments to IAS 21: Accounting where there is a lack of
exchangeability (effective 1 January 2025); and
· IFRS 18: Presentation and Disclosure in Financial Statements
(effective 1 January 2027 - subject to endorsement by the
UKEB).
The Directors do not expect the
adoption of these standards and amendments to have a material
impact on the financial statements.
Going Concern
The Directors have considered the
appropriateness of adopting a going concern basis in preparing the
financial statements. Their assessment is based on forecasts for
the next 12 month period, with sensitivity testing undertaken to
replicate severe but plausible downside scenarios related to the
principal risks and uncertainties associated with the
business.
The key assumptions used in the
review are summarised below:
· The Group's rental income receipts were modelled for each
tenant on an individual basis;
· Existing loan facilities remain available;
· Certain property additions/disposals are assumed in line with
the individual asset business plans; and
· Free cash is utilised where necessary to repay debt/cure bank
facility covenants.
Compliance with the financial
covenants of the Group's main debt facility, its £210m Revolving
Credit Facility, was one of the Directors' key areas of review,
with particular focus on the following three covenants:
· Loan to Value ("LTV") - the ratio of the drawn loan amount to
the value of the secured property as a percentage;
· Loan to Rent Value ("LRV") - the ratio of the loan to the
projected contractual net rental income for the next 12 months;
and
· Projected Net Rental Interest Cover Ratio ("ICR") - the ratio
of projected net rental income to projected finance
costs.
The October 2024 compliance
position for these covenants is summarised below:
|
Covenant
|
Requirement
|
Actual
|
|
LTV
|
65%
|
48%
|
|
LRV
|
15*
|
10.9
|
|
ICR
|
185%
|
256%
|
* Covenant relaxation from 12 times to 15 times agreed with
lenders from December 2023 up to but not including the January 2025
IPD.
The results of this review
demonstrated the following:
· The forecasts show that all bank facility financial covenants
will be met throughout the review period, with headroom to
withstand a 32% fall in contracted rental income;
· Property values could fall by 32% before loan to value
covenants come under pressure;
· Whilst the Group has a WAULT of 6.8 years, in a downside
scenario whereby all tenants with lease expiries or break options
in the going concern period exercise their breaks or do not renew
at the end of their lease, and with no vacant space let or re-let,
the rental income covenants would be met throughout the review
period; and
· Additional asset sales could be utilised to generate cash to
repay debt, materially increasing covenant headroom.
Based on this analysis, the
Directors have adopted a going concern basis in preparing the
accounts for the Period.
Principal Risks and
Uncertainties
The ability to identify, assess,
monitor and manage risks is fundamental to the financial stability,
continuing performance and reputation of our business. The
responsibility for the Group's risk-centric governance arrangements
lies with the Board of Directors of Helical (the "Board") and it is
through application of the Group's established risk management
framework that the Board determines the nature and extent of the
principal risks the Group is willing to take to achieve its
long-term strategic objectives.
The Board assesses and monitors
the principal risks of the business and considers how these risks
can be managed or mitigated, where possible, through a combination
of risk management procedures and internal controls. Whilst the
Board is ultimately responsible for the management of risk, the
Group is structured so that risk identification, assessment,
management and monitoring occur at all levels of the Helical team
and risk management is a standing agenda item at the Group's
management meetings.
For the Period to 30 September
2024, the Group considered the appropriateness of its principal
risks, taking into account the Group's performance, the
macro-political and economic environment and current business
projects. The Group's increased levels of development activity, the
escalation of the Israel-Hamas war, the deepening of the
Russo-Ukrainian war and the impacts of political elections on the
global economy were of significant note when reviewing the
principal risks.
The improved market sentiment
towards "best-in-class" offices over the Period was also
considered, specifically the forecast demand for "best-in-class"
office space outstripping supply and property yield
stabilisation.
Following its review of the Period
to 30 September 2024, the Group concluded that, despite there being
revisions to the impacts of each of the principal risks
given the wider macro-economic environment
and Helical's current operations, overall Helical's principal risks
remain materially unchanged from those reported in the Group's 2024
Annual Report and Accounts. The Board is also satisfied that we
continue to operate within our risk appetite.
At 30 September 2024, Group
considers its principal risks to be:
|
Risk
Category
|
Principal Risk
|
Description
|
|
Strategic
|
1
|
The Group's strategy is
inconsistent with the market
|
|
2
|
Risks arising from the Group's
significant development projects
|
|
3
|
Property values decline/reduced
tenant demand for space
|
|
4
|
Geopolitical and
economic
|
|
5
|
Climate change
|
|
Financial
|
6
|
Availability and cost of bank
borrowing, cash resources and potential breach of loan
covenants
|
|
Operational
|
7
|
Our people and relationships with
business partners and reliance on external partners
|
|
8
|
Health and safety risk
|
|
9
|
Significant business
disruption/external catastrophic event/cyber-attacks to our
business and our buildings
|
|
Reputational
|
10
|
Poor management of stakeholder
relations and non-compliance with prevailing legislation,
regulation and best practice
|
2. Revenue from Contracts with Customers
|
|
Half Year to
30 September 2024
£000
|
Half Year to
30 September 2023
£000
|
Year to
31 March
2024
£000
|
|
Development property
income
|
865
|
462
|
711
|
|
Service charge income
|
5,652
|
5,958
|
10,689
|
|
Other
|
-
|
-
|
991
|
|
Total revenue from contracts with
customers
|
6,517
|
6,420
|
12,391
|
The total revenue from contracts
with customers is the revenue recognised in accordance with IFRS 15
Revenue from Contracts with
Customers.
No impairment of contract assets
was recognised in the Period to 30 September 2024 (Half Year to 30
September 2023: £nil, Year to 31 March 2024: £23,000).
3. Segmental
Information
The Group identifies two discrete
operating segments whose results are regularly reviewed by the
Chief Operating Decision Maker (the Chief Executive) to allocate
resources to these segments and to assess their performance. The
segments are:
·
Investment properties, which are owned or leased
by the Group for long-term income and for capital appreciation;
and
· Development properties, which include sites, developments in
the course of construction, completed developments available for
sale, and pre-sold developments.
|
Revenue
|
Investments
Half Year
to
30.09.24
£000
|
Developments
Half Year
to
30.09.24
£000
|
Total
Half Year
to
30.09.24
£000
|
Investments
Half
Year to 30.09.23
£000
|
Developments
Half
Year to
30.09.23
£000
|
Total
Half
Year to
30.09.23
£000
|
|
Gross rental income
|
10,403
|
-
|
10,403
|
12,804
|
-
|
12,804
|
|
Development property
income
|
-
|
865
|
865
|
-
|
462
|
462
|
|
Service charge income
|
5,652
|
-
|
5,652
|
5,958
|
-
|
5,958
|
|
Other revenue
|
-
|
-
|
-
|
905
|
-
|
905
|
|
Revenue
|
16,055
|
865
|
16,920
|
19,667
|
462
|
20,129
|
|
Revenue
|
Investments
Year
to
31.03.24
£000
|
Developments
Year
to
31.03.24
£000
|
Total
Year
to
31.03.24
£000
|
|
Gross rental income
|
27,514
|
-
|
27,514
|
|
Development property
income
|
-
|
711
|
711
|
|
Service charge income
|
10,689
|
-
|
10,689
|
|
Other revenue
|
991
|
-
|
991
|
|
Revenue
|
39,194
|
711
|
39,905
|
|
Cost of sales
|
Investments
Half Year
to
30.09.24
£000
|
Developments
Half Year
to
30.09.24
£000
|
Total
Half Year
to
30.09.24
£000
|
Investments
Half
Year to 30.09.23
£000
|
Developments
Half
Year to
30.09.23
£000
|
Total
Half
Year to
30.09.23
£000
|
|
Rents payable
|
-
|
-
|
-
|
(95)
|
-
|
(95)
|
|
Property overheads
|
(2,151)
|
-
|
(2,151)
|
(846)
|
-
|
(846)
|
|
Service charge expense
|
(5,652)
|
-
|
(5,652)
|
(5,958)
|
-
|
(5,958)
|
|
Development cost of
sales
|
-
|
(536)
|
(536)
|
-
|
(922)
|
(922)
|
|
Development sales
expenses
|
-
|
(22)
|
(22)
|
-
|
(36)
|
(36)
|
|
Cost of sales
|
(7,803)
|
(558)
|
(8,361)
|
(6,899)
|
(958)
|
(7,857)
|
|
Cost of sales
|
Investments
Year
to
31.03.24
£000
|
Developments
Year
to
31.03.24
£000
|
Total
Year
to
31.03.24
£000
|
|
Rents payable
|
(224)
|
-
|
(224)
|
|
Property overheads
|
(2,580)
|
-
|
(2,580)
|
|
Service charge expense
|
(10,689)
|
-
|
(10,689)
|
|
Development cost of
sales
|
-
|
(922)
|
(922)
|
|
Development sales
expenses
|
-
|
(35)
|
(35)
|
|
Cost of sales
|
(13,493)
|
(957)
|
(14,450)
|
|
Profit/(loss) before tax
|
Investments
Half Year
to
30.09.24
£000
|
Developments
Half Year
to
30.09.24
£000
|
Total
Half Year
to
30.09.24
£000
|
Investments
Half
Year to 30.09.23
£000
|
Developments
Half
Year to
30.09.23
£000
|
Total
Half
Year to
30.09.23
£000
|
|
Net property income
|
8,252
|
307
|
8,559
|
12,768
|
(496)
|
12,272
|
|
Share of results of joint
ventures
|
(1,371)
|
228
|
(1,143)
|
(4,439)
|
(60)
|
(4,499)
|
|
Gain/(loss) on sale and
revaluation of Investment properties
|
11,847
|
-
|
11,847
|
(93,367)
|
-
|
(93,367)
|
|
Segmental profit/(loss)
|
18,728
|
535
|
19,263
|
(85,038)
|
(556)
|
(85,594)
|
|
Administrative expenses
|
|
|
(5,895)
|
|
|
(5,570)
|
|
Finance costs
|
|
|
(4,747)
|
|
|
(4,365)
|
|
Finance income
|
|
|
923
|
|
|
328
|
|
Change in fair value of derivative
financial instruments
|
|
|
(4,893)
|
|
|
2,098
|
|
Profit/(loss) before
tax
|
|
|
4,651
|
|
|
(93,103)
|
|
|
|
|
|
|
|
|
|
Loss before
tax
|
Investments
Year
to
31.03.24
£000
|
Developments
Year
to
31.03.24
£000
|
Total
Year
to
31.03.24
£000
|
|
Net property income
|
25,701
|
(246)
|
25,455
|
|
Share of results of joint
ventures
|
(9,969)
|
659
|
(9,310)
|
|
Loss on sale and revaluation of
Investment properties
|
(181,213)
|
-
|
(181,213)
|
|
Segmental (loss)/profit
|
(165,481)
|
413
|
(165,068)
|
|
Administrative expenses
|
|
|
(11,011)
|
|
Finance costs
|
|
|
(8,608)
|
|
Finance income
|
|
|
661
|
|
Change in fair value of derivative
financial instruments
|
|
|
(5,609)
|
|
Loss before tax
|
|
|
(189,635)
|
|
Net assets
|
Investments
at
30.09.24
£000
|
Developments
at
30.09.24
£000
|
Total
at
30.09.24
£000
|
Investments
at
30.09.23
£000
|
Developments at 30.09.23
£000
|
Total
at
30.09.23
£000
|
|
Investment properties
|
371,933
|
-
|
371,933
|
595,073
|
-
|
595,073
|
|
Land and developments
|
-
|
28
|
28
|
-
|
28
|
28
|
|
Asset held for sale
|
6,880
|
-
|
6,880
|
-
|
-
|
-
|
|
Investment in joint
ventures
|
134,356
|
7,686
|
142,042
|
81,126
|
1,015
|
82,141
|
|
|
513,169
|
7,714
|
520,883
|
676,199
|
1,043
|
677,242
|
|
Other assets
|
|
|
98,812
|
|
|
84,601
|
|
Total assets
|
|
|
619,695
|
|
|
761,843
|
|
Liabilities
|
|
|
(215,486)
|
|
|
(259,515)
|
|
Net assets
|
|
|
404,209
|
|
|
502,328
|
|
Net assets
|
Investments
at
31.03.24
£000
|
Developments
at
31.03.24
£000
|
Total
at
31.03.24
£000
|
|
Investment properties
|
472,522
|
-
|
472,522
|
|
Land and developments
|
-
|
28
|
28
|
|
Asset held for sale
|
42,761
|
-
|
42,761
|
|
Investment in joint
ventures
|
71,528
|
2,395
|
73,923
|
|
|
586,811
|
2,423
|
589,234
|
|
Other assets
|
|
|
68,635
|
|
Total assets
|
|
|
657,869
|
|
Liabilities
|
|
|
(256,794)
|
|
Net assets
|
|
|
401,075
|
4. Net Property
Income
|
|
Half Year to
30 September 2024
£000
|
Half Year to
30 September 2023
£000
|
Year to
31 March
2024
£000
|
|
Gross rental income
|
10,403
|
12,804
|
27,514
|
|
Head rents payable
|
-
|
(95)
|
(224)
|
|
Property overheads
|
(2,151)
|
(846)
|
(2,580)
|
|
Net rental income
|
8,252
|
11,863
|
24,710
|
|
Development property
income
|
865
|
462
|
711
|
|
Development cost of
sales
|
(536)
|
(922)
|
(922)
|
|
Sales expenses
|
(22)
|
(36)
|
(35)
|
|
Development property
profit/(loss)
|
307
|
(496)
|
(246)
|
|
Other revenue
|
-
|
905
|
991
|
|
Net property income
|
8,559
|
12,272
|
25,455
|
Included within gross rental
income above is a net addition of £52,000 (September 2023: net
deduction of £4,307,000, March 2024: net deduction of £5,830,000)
of accrued income for rent free periods. Also included within gross
rental income are dilapidation receipts of £146,000 (September
2023: £215,000, March 2024: £1,490,000).
Included in other revenue of £nil
(30 September 2023: £905,000, 31 March 2024: £991,000) is the gain
on the sublet of the Group's head office of £nil (30 September
2023: £902,000, 31 March 2024: £902,000).
5. Gain on Sale of
Investment Properties and Assets held for sale
|
|
Half Year to
30 September 2024
£000
|
Half Year to
30 September 2023
£000
|
Year to
31 March
2024
£000
|
|
Net proceeds from the sale of
Investment properties and assets held for sale
|
152,029
|
-
|
-
|
|
Book value of Investment
properties (Note 11)
|
(99,178)
|
-
|
-
|
|
Asset held for sale
|
(42,761)
|
-
|
-
|
|
Gain on sale of Investment
properties and assets held for sale
|
10,090
|
-
|
-
|
6. Administrative
Expenses
|
|
Half Year to
30 September 2024
£000
|
Half Year to
30 September 2023
£000
|
Year to
31 March
2024
£000
|
|
Administration costs
|
(5,100)
|
(4,655)
|
(9,731)
|
|
Performance related awards,
including annual bonuses and NIC
|
(795)
|
(915)
|
(1,280)
|
|
Administrative expenses
|
(5,895)
|
(5,570)
|
(11,011)
|
7. Net Finance Costs and
Change in Fair Value of Derivative Financial Instruments
|
|
Half Year to
30 September 2024
£000
|
Half Year to
30 September 2023
£000
|
Year to
31 March
2024
£000
|
|
Interest payable on bank loans and
overdrafts
|
(1,511)
|
(2,878)
|
(5,493)
|
|
Other interest payable and similar
charges
|
(1,276)
|
(1,487)
|
(3,115)
|
|
Total before cancellation of
loans
|
(2,787)
|
(4,365)
|
(8,608)
|
|
Cancellation of loans
|
(1,960)
|
-
|
-
|
|
Finance costs
|
(4,747)
|
(4,365)
|
(8,608)
|
|
Finance income
|
923
|
328
|
661
|
|
Net finance costs
|
(3,824)
|
(4,037)
|
(7,947)
|
|
Change in fair value of derivative
financial instruments
|
(4,893)
|
2,098
|
(5,609)
|
|
Net finance costs and change in
fair value of derivative financial instruments
|
(8,717)
|
(1,939)
|
(13,556)
|
8. Tax on Profit on
Ordinary Activities
The Group became a UK REIT on 1
April 2022. As a REIT, the Group is not subject to Corporation Tax
on the profits of its property rental business and chargeable gains
arising on the disposal of investment assets used in the property
rental business, but remains subject to tax on profits and
chargeable gains arising from non REIT business activities. No
current tax charge arises in the half year to 30 September 2024
(Half Year to 30 September 2023: £nil, Year to 31 March 2024:
£179,000) in respect of non-REIT activities.
At 30 September 2024, no deferred
tax was recognised (30 September 2023: £nil, 31 March 2024: £nil).
This is on the basis that deferred tax assets and liabilities
either relate to the Group's exempt property rental business, or
are deferred tax assets where it is unlikely that there will be
taxable profit in the future against which they could be
used.
9. Dividends
|
|
Half Year to
30 September 2024
£000
|
Half Year to
30 September 2023
£000
|
Year to
31 March
2024
£000
|
|
Attributable to equity share
capital
|
|
|
|
|
Ordinary
|
|
|
|
|
- Interim paid 3.05p per share
(2023: 3.05p)
|
-
|
-
|
3,744
|
|
- Prior period final paid 1.78p
per share (2023: 8.70p)
|
1,913
|
9,540
|
10,679
|
|
|
1,913
|
9,540
|
14,423
|
The interim dividend of 1.50p per
share (30 September 2023: 3.05p per share) was approved by the
Board on 25 November 2024 and will be paid on 15 January 2025 to
Shareholders on the register on 6 December 2024. This interim
dividend, amounting to £1,841,000 has not been included as a
liability as at 30 September 2024.
10. Earnings Per
Share
The calculation of the basic
earnings per share is based on the earnings attributable to
ordinary shareholders divided by the weighted average number of
shares in issue during the Period. This is a different basis to the
net asset per share calculations which are based on the number of
shares at the Period end.
The calculation of diluted
earnings per share is based on the basic earnings per share,
adjusted to allow for the issue of shares and the post tax effect
of dividends on the assumed exercise of all dilutive share
awards.
The earnings per share is
calculated in accordance with IAS 33 Earnings per Share and the best
practice recommendations of the European Public Real Estate
Association ("EPRA").
Reconciliations of the earnings
and weighted average number of shares used in the calculations are
set out below:
|
|
Half Year to
30 September 2024
000
|
Half Year to
30 September 2023
000
|
Year to
31 March
2024
000
|
|
Ordinary shares in
issue
|
123,355
|
123,355
|
123,355
|
|
Own shares held
|
(602)
|
(602)
|
(602)
|
|
Weighted average ordinary shares
in issue for calculation of basic and EPRA earnings per
share
|
122,753
|
122,753
|
122,753
|
|
Weighted average ordinary shares
issued on share settled bonuses
|
154
|
154
|
154
|
|
Weighted average ordinary shares
to be issued under Performance Share Plan
|
304
|
-
|
-
|
|
Adjustment for anti-dilutive
shares
|
-
|
(154)
|
(154)
|
|
Weighted average ordinary shares
in issue for calculation of diluted earnings per share
|
123,211
|
122,753
|
122,753
|
|
|
£000
|
£000
|
£000
|
|
Earnings/(loss) used for
calculation of basic and diluted earnings per share
|
4,651
|
(93,103)
|
(189,814)
|
|
Basic earnings/(loss) per
share
|
3.8p
|
(75.8)p
|
(154.6)p
|
|
Diluted earnings/(loss) per
share
|
3.8p
|
(75.8)p
|
(154.6)p
|
|
|
|
|
|
|
|
£000
|
£000
|
£000
|
|
Earnings/(loss) used for
calculation of basic and diluted earnings per share
|
4,651
|
(93,103)
|
(189,814)
|
|
Net gain/(loss) on sale and
revaluation of Investment properties
|
|
|
|
|
- subsidiaries
|
(11,847)
|
93,367
|
181,213
|
|
- joint ventures
|
2,694
|
3,309
|
7,401
|
|
Gain on movement in share of joint
ventures
|
(30)
|
(66)
|
(155)
|
|
Fair value movement on derivative
financial instruments
|
|
|
|
|
- subsidiaries
|
4,893
|
(2,098)
|
5,609
|
|
- joint ventures
|
(170)
|
-
|
-
|
|
Expense on cancellation of
loans
|
1,960
|
-
|
-
|
|
Non-operating items
|
607
|
-
|
-
|
|
Earnings used for calculations of
EPRA earnings per share
|
2,758
|
1,409
|
4,254
|
|
|
|
|
|
|
EPRA earnings per share
|
2.25p
|
1.15p
|
3.47p
|
The earnings used for the
calculation of EPRA earnings per share include net rental income
and development property profits but exclude investment and trading
property gains.
11. Investment
Properties
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Book value at 1 April
|
472,522
|
681,682
|
681,682
|
|
Additions at cost
|
3,782
|
6,814
|
16,038
|
|
Disposals
|
(99,178)
|
-
|
-
|
|
Transfer to Asset held for
sale
|
(6,880)
|
-
|
(43,817)
|
|
Letting cost
amortisation
|
(70)
|
(56)
|
(168)
|
|
Revaluation gain/(loss)
|
1,757
|
(93,367)
|
(181,213)
|
|
As at period end
|
371,933
|
595,073
|
472,522
|
There are two small sites held at
Directors' valuation totalling £150,000. All remaining properties
are stated at market value and are valued by professionally
qualified external valuers (Cushman & Wakefield LLP) in
accordance with the Valuation - Professional Standards, published
by the Royal Institution of Chartered Surveyors. The fair value of
the Investment properties are as follows:
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Book value
|
371,933
|
595,073
|
472,522
|
|
Lease incentives and costs
included in trade and other receivables
|
7,217
|
9,689
|
7,078
|
|
Head leases capitalised
|
-
|
(2,112)
|
-
|
|
Fair value
|
379,150
|
602,650
|
479,600
|
Cumulative interest capitalised in
respect of the refurbishment of Investment properties at 30
September 2024 amounted to £8,271,000 (30 September 2023:
£9,620,000, 31 March 2024: £8,271,000). Interest capitalised during
the Period in respect of the refurbishment of Investment properties
amounted to £nil (30 September 2023: £nil, 31 March 2024: £nil) and
an amount of £nil (30 September 2023: £nil, 31 March 2024:
£1,349,000) was released as a result of an asset being transferred
to assets held for sale.
The historical cost of Investment
property is £420,737,000 (30 September 2023: £640,052,000, 31 March
2024: £608,010,000).
The fair value of the Group's
Investment property as at 30 September 2024 was determined by
independent external valuers at that date, except for Investment
properties valued by the Directors. The valuations are in
accordance with the RICS Valuation
- Professional Standards ("The Red
Book") and the International Valuation Standards and were arrived
at by reference to market transactions for similar
properties.
Fair values for Investment
property are calculated using the present value income approach.
The main assumptions underlying the valuations are in relation to
rent profile and yields as discussed below. A key driver of the
property valuations is the terms of the leases in place at the
valuation date. These determine the cash flow profile of the
property for a number of years. The valuation assumes adjustments
from these rental values to current market rent at the time of the
next rent review (where a typical lease allows only for upward
adjustment) and as leases expire and are replaced by new leases.
The current market level of rent is assessed based on evidence
provided by the most recent relevant leasing transactions and
negotiations. The equivalent yield is applied as a discount rate to
the rental cash flows which, after taking into account other input
assumptions such as vacancies and costs, generates the market value
of the property.
The equivalent yield applied is
assessed by reference to market transactions for similar properties
and takes into account, amongst other things, any risks associated
with the rent uplift assumptions.
The net initial yield is
calculated as the current net income over the gross market value of
the asset and is used as a sense check and to compare against
market transactions for similar properties. The valuation outputs,
along with inputs and assumptions, are reviewed to ensure these are
in line with what a market participant would use when pricing each
asset.
The reversionary yield is the
return received from an asset once the estimated rental value has
been captured on today's assessment of market value.
There are interrelationships
between all the inputs as they are determined by market conditions.
The existence of an increase in more than one input would be to
magnify the input on the valuation. The impact on the valuation
will be mitigated by the interrelationship of two inputs in
opposite directions.
A sensitivity analysis was
performed to ascertain the impact of a 25 and 50 basis point shift
in the equivalent yield and a 2.5% and 5.0% shift in ERVs for the
wholly owned investment portfolio:
|
|
At
30
September
|
Change in portfolio
value
|
|
|
2024
|
%
|
£m
|
|
True equivalent yield
|
6.79%
|
|
|
|
+ 50bps
|
|
(7.2)
|
(27.9)
|
|
+ 25bps
|
|
(3.7)
|
(14.4)
|
|
- 25bps
|
|
4.0
|
15.6
|
|
- 50bps
|
|
8.4
|
32.5
|
|
ERV
|
£78.38 psf
|
|
|
|
+ 5.00%
|
|
4.2
|
16.3
|
|
+ 2.50%
|
|
2.1
|
8.1
|
|
- 2.50%
|
|
(2.0)
|
(7.9)
|
|
- 5.00%
|
|
(4.1)
|
15.8
|
12. Joint
Ventures
|
Share of results of joint ventures
|
Half Year to
30 September 2024
£000
|
Half Year to
30 September 2023
£000
|
Year to
31 March
2024
£000
|
|
Revenue
|
3,080
|
1,442
|
2,559
|
|
Gross rental income
|
3,080
|
887
|
2,004
|
|
Property overheads
|
(348)
|
(349)
|
(1,209)
|
|
Net rental income
|
2,732
|
538
|
795
|
|
Loss on revaluation of Investment
properties
|
(2,694)
|
(3,309)
|
(5,933)
|
|
Loss on sale of Investment
properties
|
-
|
-
|
(1,468)
|
|
Development property
(loss)/profit
|
(9)
|
(18)
|
659
|
|
|
29
|
(2,789)
|
(5,947)
|
|
Administrative expenses
|
(82)
|
(188)
|
(338)
|
|
Operating loss
|
(53)
|
(2,977)
|
(6,285)
|
|
Interest payable on bank loans and
overdrafts
|
(1,209)
|
(1,502)
|
(3,012)
|
|
Other interest payable and similar
charges
|
(108)
|
(104)
|
(211)
|
|
Finance income
|
27
|
18
|
43
|
|
Fair value movement on derivative
financial instruments
|
170
|
-
|
-
|
|
Loss before tax
|
(1,173)
|
(4,565)
|
(9,465)
|
|
Tax
|
-
|
-
|
1
|
|
Loss after tax
|
(1,173)
|
(4,565)
|
(9,464)
|
|
Adjustment for Barts Square
economic interest¹
|
30
|
66
|
154
|
|
Share of results of joint ventures
|
(1,143)
|
(4,499)
|
(9,310)
|
1.This adjustment reflects the
impact of the consolidation of a joint venture at its economic
interest of 50% (31 March 2024: 50%) rather than its actual
ownership interest of 33%.
The net rental income has
increased in the Period due to lettings at The JJ Mack Building,
EC1.
|
Investment in joint ventures
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Summarised balance sheets
|
|
|
|
|
Non-current assets
|
|
|
|
|
Investment properties
|
205,187
|
146,257
|
140,811
|
|
Owner occupied property, plant and
equipment
|
63
|
63
|
63
|
|
Derivative financial
instruments
|
170
|
-
|
-
|
|
|
205,420
|
146,320
|
140,874
|
|
Current assets
|
|
|
|
|
Land and developments
|
5,627
|
-
|
1,321
|
|
Trade and other
receivables
|
6,906
|
1,894
|
3,034
|
|
Cash and cash
equivalents
|
3,516
|
2,207
|
3,064
|
|
|
16,049
|
4,101
|
7,419
|
|
Current liabilities
|
|
|
|
|
Trade and other
payables
|
(7,310)
|
(2,728)
|
(4,254)
|
|
Borrowings
|
(66,746)
|
(61,634)
|
-
|
|
|
(74,056)
|
(64,362)
|
(4,254)
|
|
Non-current liabilities
|
|
|
|
|
Trade and other
payables
|
(1,314)
|
(407)
|
(1,155)
|
|
Borrowings
|
(4,359)
|
-
|
(65,644)
|
|
Leasehold interest
|
(5,166)
|
(5,020)
|
(5,020)
|
|
|
(10,839)
|
(5,427)
|
(71,819)
|
|
Net assets pre-adjustment
|
136,574
|
80,632
|
72,220
|
|
Acquisition costs
|
5,468
|
1,509
|
1,703
|
|
Investment in joint ventures
|
142,042
|
82,141
|
73,923
|
During the Period, our share of
the net assets of our joint ventures has increased by £68,119,000.
The majority of this increase is the acquisition of 50% of 100 New
Bridge Street, EC4, for £55,000,000.
The fair value of Investment
properties held by joint ventures at 30 September 2024 is as
follows:
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Book value
|
205,187
|
146,257
|
140,811
|
|
Lease incentives and costs
included in trade and other receivables
|
4,626
|
989
|
1,770
|
|
Head leases capitalised
|
(4,317)
|
(4,346)
|
(4,331)
|
|
Fair value
|
205,496
|
142,900
|
138,250
|
13. Other
Investments
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Book value at 1 April
|
565
|
353
|
353
|
|
Acquisitions
|
21
|
81
|
212
|
|
As at period end
|
586
|
434
|
565
|
On 6 August 2021, the Group
entered into a commitment of £1,000,000 to invest in the Pi Labs
European PropTech venture capital fund ("Fund") of which £21,000
(31 March 2024: £212,000, 30 September 2023: £81,000) was invested
during the Period. The Fund is focused on investing in the next
generation of proptech businesses.
The fair value of the Group's
investment is based on the net asset value of the Fund,
representing Level 2 fair value measurement as defined in IFRS 13
Fair Value
Measurement.
14. Land and
Developments
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
At 1 April and period
end
|
28
|
28
|
28
|
The Directors' valuation of
development stock shows a surplus of £302,000 (30 September 2023:
£302,000, 31 March 2024: £302,000) above book value. This surplus
has been included in the EPRA net tangible asset value (Note 23).
No interest has been capitalised or included in land and
developments.
15. Assets Held for
Sale
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Transfer to assets held for
sale
|
6,880
|
-
|
43,817
|
|
Lease incentives
|
-
|
-
|
1,133
|
|
Long leasehold
liability
|
-
|
-
|
(2,189)
|
|
As at period end
|
6,880
|
-
|
42,761
|
16. Trade and Other
Receivables
|
Due within 1 year
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Trade receivables
|
2,134
|
3,027
|
2,111
|
|
Other receivables
|
3,846
|
1,296
|
3,601
|
|
Prepayments
|
2,279
|
2,099
|
4,103
|
|
Accrued income
|
7,213
|
10,275
|
7,166
|
|
Total trade and other
receivables
|
15,472
|
16,697
|
16,981
|
Included in Accrued income is
accrued income from rent free periods granted to tenants of
£7,113,000 (30 September 2023: £9,689,000, 31 March 2024:
£7,046,000). Prepayments include capital contributions to tenants
of £104,000 (30 September 2023: £nil, 31 March 2024: £32,000).
Taken together, these form the lease incentives adjustment in Note
11.
|
Due after 1 year
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Other receivables
|
1,056
|
1,449
|
1,252
|
|
Total trade and other
receivables
|
1,056
|
1,449
|
1,252
|
17. Cash and Cash
Equivalents
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Cash held at managing
agents
|
4,113
|
7,513
|
4,914
|
|
Rental deposits
|
10,498
|
7,714
|
7,828
|
|
Restricted cash
|
5,095
|
4,350
|
3,880
|
|
Cash deposits
|
46,424
|
17,463
|
12,011
|
|
Total cash and cash
equivalents
|
66,130
|
37,040
|
28,633
|
Restricted cash is made up of
rental deposits and cash in restricted accounts.
18. Trade and Other
Payables
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Trade payables
|
15,762
|
14,465
|
13,497
|
|
Other payables
|
923
|
1,591
|
1,252
|
|
Accruals
|
3,399
|
3,030
|
5,101
|
|
Deferred income
|
4,939
|
7,320
|
5,036
|
|
Total trade and other
payables
|
25,023
|
26,406
|
24,886
|
19. Lease
Liability
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Current lease liability
|
861
|
695
|
829
|
|
Non-current lease
liability
|
3,008
|
5,238
|
3,445
|
Included within the lease
liability are £861,000 (30 September 2023: £695,000, 31 March 2024:
£829,000) of current and £3,008,000 (30 September 2023: £3,049,000,
31 March 2024: £3,445,000) of non-current lease liabilities which
relate to the long leasehold of the Group's head office.
20. Borrowings
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Current borrowings
|
-
|
-
|
-
|
|
Borrowings repayable
within:
|
|
|
|
|
- two to three years
|
186,594
|
227,176
|
227,634
|
|
Non-current borrowings
|
186,594
|
227,176
|
227,634
|
|
Total borrowings
|
186,594
|
227,176
|
227,634
|
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Total borrowings
|
186,594
|
227,176
|
227,634
|
|
Cash
|
(66,130)
|
(37,040)
|
(28,633)
|
|
Net borrowings
|
120,464
|
190,136
|
199,001
|
Net borrowings exclude the Group's
share of borrowings in joint ventures of £71,105,000 (30 September
2023: £61,634,000, 31 March 2024: £65,644,000) and cash of
£3,516,000 (30 September 2023: £2,207,000, 31 March 2024:
£3,064,000). All borrowings in joint ventures are
secured.
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Net assets
|
404,209
|
502,328
|
401,075
|
|
Net gearing
|
29.8%
|
37.9%
|
49.6%
|
21. Derivative Financial
Instruments
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Derivative financial instruments
asset
|
12,742
|
25,343
|
17,635
|
A loss on the change in fair value
of £4,893,000 has been recognised in the Unaudited Consolidated
Income Statement (30 September 2023: gain of £2,098,000, 31 March
2024: loss of £5,609,000) as a result of the unwinding of the
derivative asset and the reduction in the medium and long-term
interest rate projections.
The fair values of the Group's
outstanding interest rate swaps and caps have been estimated by
calculating the present values of future cash flows, using
appropriate market discount rates, representing Level 2 fair value
measurements as defined in IFRS 13 Fair Value Measurement.
22. Share
Capital
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Authorised
|
39,577
|
39,577
|
39,577
|
The authorised share capital of
the Company is £39,577,000 divided into ordinary shares of 1p
each.
|
Allotted, called up and fully
paid:
|
|
|
|
|
- 123,355,197 (30 September 2023:
123,355,197, 31 March 2024: 123,355,197) ordinary shares of 1p
each
|
1,233
|
1,233
|
1,233
|
|
|
1,233
|
1,233
|
1,233
|
23. Net Assets Per
Share
|
|
At
30 September
2024
£000
|
Number of
shares
000
|
p
|
At
31
March
2024
£000
|
Number
of shares
000
|
p
|
|
IFRS net assets
|
404,209
|
123,355
|
|
401,075
|
123,355
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
- own shares held
|
|
(602)
|
|
|
(602)
|
|
|
Basic net asset value
|
404,209
|
122,753
|
329
|
401,075
|
122,753
|
327
|
|
- share settled
bonus
|
|
154
|
|
|
154
|
|
|
- dilutive effect of
Performance Share Plan
|
|
308
|
|
|
-
|
|
|
Diluted net asset value
|
404,209
|
123,215
|
328
|
401,075
|
122,907
|
326
|
|
Adjustments:
|
|
|
|
|
|
|
|
- fair value of financial instruments
|
(12,911)
|
|
|
(17,635)
|
|
|
|
- fair value of land and developments
|
302
|
|
|
302
|
|
|
|
- real estate transfer tax
|
39,049
|
|
|
44,605
|
|
|
|
EPRA net reinstatement
value
|
430,649
|
123,215
|
350
|
428,347
|
122,907
|
349
|
|
- real estate transfer tax
|
(22,932)
|
|
|
(21,879)
|
|
|
|
EPRA net tangible asset
value
|
407,717
|
123,215
|
331
|
406,468
|
122,907
|
331
|
|
|
At
30 September
2024
£000
|
Number of
shares
000
|
p
|
At
31
March
2024
£000
|
Number
of shares
000
|
p
|
|
Diluted net asset value
|
404,209
|
123,215
|
328
|
401,075
|
122,907
|
326
|
|
Adjustments:
|
|
|
|
|
|
|
|
- surplus on fair value of stock
|
302
|
|
|
302
|
|
|
|
EPRA net disposal value
|
404,511
|
123,215
|
328
|
401,377
|
122,907
|
327
|
|
|
At
30
September
2023
£000
|
Number
of shares
000
|
p
|
|
IFRS net assets
|
|
|
|
502,328
|
123,355
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
- own shares held
|
|
|
|
|
(602)
|
|
|
Basic net asset value
|
|
|
|
502,328
|
122,753
|
409
|
|
- share settled
bonus
|
|
|
|
|
154
|
|
|
- dilutive effect of
Performance Share Plan
|
|
|
|
|
-
|
|
|
Diluted net asset value
|
|
|
|
502,328
|
122,907
|
409
|
|
Adjustments:
|
|
|
|
|
|
|
|
- fair value of financial instruments
|
|
|
|
(25,343)
|
|
|
|
- deferred tax
|
|
|
|
-
|
|
|
|
- fair value of land and developments
|
|
|
|
302
|
|
|
|
- real estate transfer tax
|
|
|
|
50,348
|
|
|
|
EPRA net reinstatement
value
|
|
|
|
527,635
|
122,907
|
429
|
|
- real estate transfer tax
|
|
|
|
(25,301)
|
|
|
|
- deferred tax
|
|
|
|
-
|
|
|
|
EPRA net tangible asset
value
|
|
|
|
502,334
|
122,907
|
409
|
|
|
|
|
|
At
30
September
2023
£000
|
Number
of shares
000
|
p
|
|
Diluted net assets
|
|
|
|
502,328
|
122,907
|
409
|
|
Adjustments:
|
|
|
|
|
|
|
|
- surplus on fair value of stock
|
|
|
|
302
|
|
|
|
EPRA net disposal
value
|
|
|
|
502,630
|
122,907
|
409
|
The net asset values per share
have been calculated in accordance with guidance issued by the
European Public Real Estate Association ("EPRA").
The adjustments to the net asset
value comprise the amounts relating to the Group and its share of
joint ventures.
The calculation of EPRA net
tangible asset value includes a real estate transfer tax adjustment
which adds back the benefit of the saving of the purchaser's costs
that Helical expects to receive on the sales of the corporate
vehicles that own the buildings, rather than direct asset
sales.
The calculation of EPRA net
disposal value per share reflects the fair value of all the assets
and liabilities of the Group at 30 September 2024.
24. Related Party
Transactions
The following amounts were due
from/(to) the Group's joint ventures:
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Charterhouse Place Limited
group
|
1,306
|
578
|
1,340
|
|
Barts Square companies
|
51
|
71
|
71
|
|
100 New Bridge Street
group
|
1,997
|
-
|
-
|
|
Platinum companies
|
4
|
-
|
1,530
|
|
Shirley Advance LLP
|
(43)
|
8
|
(43)
|
A development management,
accounting and corporate services fee of £25,000 (30 September
2023: £25,000, 31 March 2024: £50,000) was charged by the Group to
the Barts Square companies. In addition, a net development
management, accounting and corporate services fee of £55,000 was
charged during the Period (30 September 2023: reversal of charge of
£1,229,000, 31 March 2024: reversal of charge of £1,084,000) by the
Group to the Charterhouse Place Limited group. A development
management fee of £317,000 (30 September 2023: £nil) was charged by
the Group to the 100 New Bridge Street group. During the Period,
the Group advanced a short term working capital loan to the 100 New
Bridge Street group. The balance at 30 September 2024 was
£1,997,000 (31 March 2024: £nil).
25. See-through
Analysis
Helical holds a significant
proportion of its property assets in joint ventures with partners
that provide a significant equity contribution, whilst relying on
the Group to provide asset management or development expertise.
Accounting convention requires Helical to account under IFRS for
its share of the net results and net assets of joint ventures on an
equity basis in the Income Statement and Balance Sheet. Helical
considers that Net asset value per share, a key performance measure
used in the real estate industry, as reported in the financial
statements under IFRS, does not provide Shareholders with the most
relevant information on the fair value of assets and liabilities
within an ongoing real estate company with a long-term investment
strategy.
This analysis incorporates the
separate components of the results of the consolidated subsidiaries
and Helical's share of its joint ventures' results into a
"see-through" analysis of its property portfolio, debt profile and
the associated income streams and financing costs, to assist in
providing a comprehensive overview of the Group's
activities.
See-through Net Rental
Income
Helical's share of the gross
rental income, head rents payable and property overheads from
property assets held in subsidiaries and in joint ventures is shown
in the table below.
|
|
Half Year to
30 September 2024
£000
|
Half Year to
30 September 2023
£000
|
Year to
31 March
2024
£000
|
|
Gross rental income
|
- subsidiaries
|
10,403
|
12,804
|
27,514
|
|
|
- joint ventures
|
3,080
|
887
|
2,004
|
|
Total gross rental
income
|
|
13,483
|
13,691
|
29,518
|
|
Rents payable
|
- subsidiaries
|
-
|
(95)
|
(224)
|
|
Property overheads
|
- subsidiaries
|
(2,151)
|
(846)
|
(2,580)
|
|
|
- joint ventures
|
(348)
|
(349)
|
(1,209)
|
|
See-through net rental income
|
|
10,984
|
12,401
|
25,505
|
See-through Net Development
Profits/(Losses)
Helical's share of development
profits/(losses) from property assets held in subsidiaries and in
joint ventures is shown in the table below.
|
|
Half Year to
30 September 2024
£000
|
Half Year to
30 September 2023
£000
|
Year to
31 March
2024
£000
|
|
In parent and
subsidiaries
|
307
|
(496)
|
(246)
|
|
In joint ventures
|
(9)
|
(18)
|
659
|
|
See-through development profits/(losses)
|
298
|
(514)
|
413
|
See-through Net Gain/(loss) on
Sale and Revaluation of Investment Properties
Helical's share of the net
gain/(loss) on the sale and revaluation of Investment properties
held in subsidiaries and joint ventures is shown in the table
below.
|
|
|
Half Year to
30 September 2024
£000
|
Half Year to
30 September 2023
£000
|
Year to
31 March
2024
£000
|
|
Revaluation gain/(loss) on
Investment properties
|
- subsidiaries
|
1,757
|
(93,367)
|
(181,213)
|
|
|
- joint ventures
|
(2,694)
|
(3,309)
|
(5,933)
|
|
Total revaluation loss
|
|
(937)
|
(96,676)
|
(187,146)
|
|
Net gain/(loss) on sale of
Investment properties
|
- subsidiaries
|
10,090
|
-
|
-
|
|
|
- joint ventures
|
-
|
-
|
(1,468)
|
|
Total net gain/(loss) on sale of
Investment properties
|
10,090
|
-
|
(1,468)
|
|
See-through net gain/(loss) on sale and revaluation
of Investment properties
|
9,153
|
(96,676)
|
(188,614)
|
See-through Administration
Expenses
Helical's share of the
administration expenses incurred in subsidiaries and joint ventures
is shown in the table below.
|
|
Half Year to
30 September 2024
£000
|
Half Year to
30 September 2023
£000
|
Year to
31 March
2024
£000
|
|
Administration expenses
|
- subsidiaries
|
|
5,100
|
4,655
|
9,731
|
|
|
- joint ventures
|
|
82
|
188
|
338
|
|
Total administration
expenses
|
|
|
5,182
|
4,843
|
10,069
|
|
Performance related awards,
including NIC
|
- subsidiaries
|
|
795
|
915
|
1,280
|
|
Total performance related awards,
including NIC
|
|
795
|
915
|
1,280
|
|
See-through administration expenses
|
|
5,977
|
5,758
|
11,349
|
See-through Net Finance
Costs
Helical's share of the interest
payable, finance charges, capitalised interest and interest
receivable on bank borrowings and cash deposits in subsidiaries and
joint ventures is shown in the table below.
|
|
|
Half Year to
30 September 2024
£000
|
Half Year to
30 September 2023
£000
|
Year to
31 March
2024
£000
|
|
Interest payable on bank loans and
overdrafts
|
- subsidiaries
|
1,511
|
2,878
|
5,493
|
|
|
- joint ventures
|
1,209
|
1,502
|
3,012
|
|
Total interest payable on bank
loans and overdrafts
|
2,720
|
4,380
|
8,505
|
|
Other interest payable and similar
charges
|
- subsidiaries
|
3,236
|
1,487
|
3,115
|
|
|
- joint ventures
|
108
|
104
|
211
|
|
Total finance costs
|
|
6,064
|
5,971
|
11,831
|
|
Interest receivable and similar
income
|
- subsidiaries
|
(923)
|
(328)
|
(661)
|
|
|
- joint ventures
|
(27)
|
(18)
|
(43)
|
|
See-through net finance costs
|
|
5,114
|
5,625
|
11,127
|
See-through Property
Portfolio
Helical's share of the investment,
land and development property portfolio in subsidiaries and joint
ventures is shown in the table below.
|
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Investment property fair
value
|
- subsidiaries
|
379,150
|
602,650
|
479,600
|
|
|
- joint ventures
|
205,496
|
142,900
|
138,250
|
|
Asset held for sale
|
- subsidiaries
|
6,880
|
-
|
42,761
|
|
Total Investment property fair
value
|
|
591,526
|
745,550
|
660,611
|
|
Land and development
stock
|
- subsidiaries
|
28
|
28
|
28
|
|
|
- joint ventures
|
5,627
|
-
|
1,321
|
|
Total land and development
stock
|
|
5,655
|
28
|
1,349
|
|
Total land and development stock
surplus
|
|
302
|
302
|
302
|
|
Total land and development stock
at fair value
|
|
5,957
|
330
|
1,651
|
|
See-through property portfolio
|
|
597,483
|
745,880
|
662,262
|
See-through Net
Borrowings
Helical's share of borrowings and
cash deposits in subsidiaries and joint ventures is shown in the
table below.
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Gross borrowings more than one
year
|
- subsidiaries
|
186,594
|
227,176
|
227,634
|
|
|
- joint ventures
|
4,359
|
-
|
-
|
|
Total
|
|
190,953
|
227,176
|
227,634
|
|
Gross borrowings less than one
year
|
- joint ventures
|
66,746
|
61,634
|
65,644
|
|
Total
|
|
66,746
|
61,634
|
65,644
|
|
Cash and cash
equivalents
|
- subsidiaries
|
(66,130)
|
(37,040)
|
(28,633)
|
|
|
- joint ventures
|
(3,516)
|
(2,207)
|
(3,064)
|
|
Total
|
|
(69,646)
|
(39,247)
|
(31,697)
|
|
See-through net borrowings
|
188,053
|
249,563
|
261,581
|
26. See-through Net Gearing
and Loan to Value
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Property portfolio
|
597,483
|
745,880
|
662,262
|
|
Net borrowings
|
188,053
|
249,563
|
261,581
|
|
Net assets
|
404,209
|
502,328
|
401,075
|
|
See-through net gearing
|
46.5%
|
49.7%
|
65.2%
|
|
See-through loan to
value
|
31.5%
|
33.5%
|
39.5%
|
|
Pro-forma see-through loan to
value (Note 30)
|
15.9%
|
N/A
|
28.7%
|
27. Total Accounting
Return
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Brought forward IFRS net
assets
|
401,075
|
608,675
|
608,675
|
|
Carried forward IFRS net
assets
|
404,209
|
502,328
|
401,075
|
|
Increase/(decrease) in IFRS net
assets
|
3,134
|
(106,347)
|
(207,600)
|
|
Dividends paid
|
1,913
|
9,540
|
14,423
|
|
Total accounting return
|
5,047
|
(96,807)
|
(193,177)
|
|
Total accounting return
percentage
|
1.3%
|
(15.9%)
|
(31.7%)
|
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
Brought forward EPRA net tangible
assets
|
406,468
|
613,455
|
613,455
|
|
Carried forward EPRA net tangible
assets
|
407,717
|
502,334
|
406,468
|
|
Increase/(decrease) in EPRA net
tangible assets
|
1,249
|
(111,121)
|
(206,987)
|
|
Dividends paid
|
1,913
|
9,540
|
14,423
|
|
Total EPRA accounting
return
|
3,162
|
(101,581)
|
(192,564)
|
|
Total EPRA accounting return
percentage
|
0.8%
|
(16.6%)
|
(31.4%)
|
28. Total Property
Return
|
|
At
30 September
2024
£000
|
At
30
September 2023
£000
|
At
31
March
2024
£000
|
|
See-through net rental
income
|
10,984
|
12,401
|
25,505
|
|
See-through development
profits/(losses)
|
298
|
(514)
|
413
|
|
See-through revaluation
loss
|
(937)
|
(96,676)
|
(187,146)
|
|
See-through net gain/(loss) on
sale of Investment properties
|
10,090
|
-
|
(1,468)
|
|
Total property return
|
20,435
|
(84,789)
|
(162,696)
|
29. Capital
Commitments
In July 2023, Helical and Places
for London entered into a Joint Venture Agreement with a commitment
to purchase a portfolio of three over-station development sites. 10
King William Street, EC4 site was acquired on 1 October 2024 for
£32.6m (our share), the Southwark OSD, SE1 site will be acquired in
July 2025 for £11.0m (our share) and the Paddington OSD, W2 site in
January 2026 for £30.2m (our share).
30. Post Balance Sheet
Events
Following the Period end, the sale
of The JJ Mack Building, EC1, for £278.4m (Helical share: £139.2m),
which is included within Joint Ventures on the Balance Sheet,
completed. In addition, on 1 October 2024, the Group purchased the
site at 10 King William Street, EC4 for £32.6m. The impact of these
transactions and the completion of the sale of The Power House, W4,
whose sale had exchanged before the Period end and was classified
as "Asset Held for Sale", is included in the pro-forma table
below:
|
|
|
30
September
2024
£000
|
Impact of
transactions
£000
|
Pro-forma
£000
|
|
Investment property fair
value
|
- subsidiaries
|
379,150
|
-
|
379,150
|
|
|
- joint ventures
|
205,496
|
(102,786)
|
102,710
|
|
Asset held for sale
|
- subsidiaries
|
6,880
|
(6,880)
|
-
|
|
Land and developments
|
|
5,957
|
(3,804)
|
2,153
|
|
Total see-through property
portfolio
|
|
597,483
|
(113,470)
|
484,013
|
|
See-through net
borrowings
|
|
188,053
|
(111,030)
|
77,023
|
|
See-through loan to
value
|
|
31.5%
|
-
|
15.9%
|
|
Net assets
|
|
404,209
|
-
|
404,209
|
|
See through gearing
|
|
46.5%
|
-
|
19.1%
|
|
|
|
|
|
|
|
At 31 March 2024, the see-through
pro-forma loan to value was 28.7%, which took into account the sale
of 25 Charterhouse Square, EC1, in April 2024.
Appendix 1 - Glossary of
Terms
Capital value (psf)
The open market value of the
property divided by the area of the property in square
feet.
Company or Group or Helical
Helical plc and its subsidiary
undertakings.
Diluted figures
Reported amounts adjusted to
include the effects of potential shares issuable under the Director
and employee remuneration schemes.
Earnings per share (EPS)
Profit after tax divided by the
weighted average number of ordinary shares in issue.
EPRA
European Public Real Estate
Association.
EPRA earnings per share
Earnings per share adjusted to
exclude gains/losses on sale and revaluation of Investment
properties and their deferred tax adjustments, the tax on
profit/loss on disposal of Investment properties, trading property
profits/losses, movement in fair value of available-for-sale assets
and fair value movements on derivative financial instruments, on an
undiluted basis. Details of the method of calculation of the EPRA
earnings per share are available from EPRA (see Note
10).
EPRA net disposal value per share
Represents the Shareholders' value
under a disposal scenario, where deferred tax, financial
instruments and certain other adjustments are calculated to the
full extent of their liability, net of any resulting tax (see Note
23).
EPRA net reinstatement value per share
Net asset value adjusted to
reflect the value required to rebuild the entity and assuming that
entities never sell assets. Assets and liabilities, such as fair
value movements on financial derivatives, that are not expected to
crystallise in normal circumstances and deferred taxes on property
valuation surpluses are excluded (see Note 23).
EPRA net tangible assets per share
Assumes that entities buy and sell
assets, thereby crystallising certain levels of unavoidable
deferred tax, but excludes assets and liabilities, such as fair
value movements on financial derivatives, that are not expected to
crystallise in normal circumstances and deferred taxes on property
valuation surpluses are excluded (see Note 23).
EPRA topped-up NIY
The current annualised rent, net
of costs, topped-up for contracted uplifts, expressed as a
percentage of the fair value of the relevant property.
Estimated rental value (ERV)
The market rental value of
lettable space as estimated by the Group's valuers at each Balance
Sheet date.
Initial yield
Annualised net passing rents on
Investment properties as a percentage of their open market
value.
Like-for-like valuation change
The valuation gain/loss, net of
capital expenditure, on those properties held at both the previous
and current reporting period end, as a proportion of the fair value
of those properties at the beginning of the reporting period plus
net capital expenditure.
MSCI INC. (MSCI IPD)
MSCI INC. is a company that
produces independent benchmarks of property returns using its
Investment Property Databank (IPD).
Net asset value per share (NAV)
Net assets divided by the number
of ordinary shares at the Balance Sheet date (see Note
23).
Net gearing
Total borrowings less short-term
deposits and cash as a percentage of net assets.
Net internal area (NIA)
The usable area within a building
measured to the internal face of the perimeter walls at each floor
level.
Passing rent
The annual gross rental income
being paid by the tenant.
Reversionary yield
The income/yield from the full
estimated rental value of the property on the market value of the
property grossed up to include purchaser's costs, capital
expenditure and capitalised revenue expenditure.
See-through/Group share
The consolidated Group and the
Group's share in its joint ventures (see Note 25).
See-through net gearing
The see-through net borrowings
expressed as a percentage of net assets (see Note 26).
Total Accounting Return
The growth in the net asset value
of the Company plus dividends paid in the Period, expressed as a
percentage of net asset value at the start of the Period (see Note
27).
Total Property Return
The total of net rental income,
trading and development profits and net gain on sale and
revaluation of Investment properties on a see-through basis (see
Note 28).
Total Shareholder Return (TSR)
The growth in the ordinary share
price as quoted on the London Stock Exchange plus dividends per
share received for the Period expressed as a percentage of the
share price at the beginning of the Period.
True equivalent yield
The constant capitalisation rate
which, if applied to all cash flows from an Investment property,
including current rent, reversions to current market rent and such
items as voids and expenditures, equates to the market value.
Assumes rent is received quarterly in advance.
Unleveraged returns
Total property gains and losses
(both realised and unrealised) plus net rental income expressed as
a percentage of the total value of the properties.
WAULT
The total contracted rent up to
the first break, or lease expiry date, divided by the contracted
annual rent.
HELICAL PLC
Registered in England and Wales
No.156663
Registered Office:
5 Hanover Square
London
W1S 1HQ
T: 020 7629 0113
F: 020 7408 1666
E:
reception@helical.co.uk
www.helical.co.uk