Half-year Report

RNS Number : 1400R

Circle Property PLC

07 December 2016

 

Circle Property Plc

("Circle" or the "Group")

7 December 2016

CIRCLE DELIVERS STRONG GROWTH IN PROFIT AND NAV FROM UK REGIONAL PROPERTY PORTFOLIO

Circle Property Plc (AIM: CRC), a specialist regional UK property investment, development and management company today announces its results for the six months to 30 September 2016.

Financial Highlights

·     16.3% increase in value of the Group's portfolio of 16 UK investment properties to £90.425 million (31 March 2016: £77.735 million) resulting primarily from the Group's successful asset management initiatives.

·     17% growth in Net Asset Value per share to £1.79 per share (31 March 2016: £1.53 per share).

·     An operating profit to £1.15 million, compared with £0.84 million for the almost four month period from 4 December 2015 to 31 March 2016 contributing to a pre-tax profit of £8.27 million and an increase in earnings per share to 29.0 pence per share from 3.8 pence for the previous period.

·     Net rental income for the six month period to 30 September was £2.0 million compared with £1.1 million for the period to 31 March 2016.

·     Annualised rental income as at 30 September 2016 was £5.7 million compared with £5.9 million at 31 March 2016, despite a loss of £0.8 million of annualised rent resulting from the Group strategically vacating Somerset House in Birmingham to facilitate a refurbishment of the building. 

·     An additional c£2.3 million of annualised rent is obtainable by the end of 2018 upon the letting of the completed refurbishments at current ERVs.

·     The weighted average unexpired lease term to break is now 7.81 years (5.6 years at 31 March 2016) and 11.53 years to expiry (6.85 years at 31 March 2016).

·     Based upon the September valuation of £90.425m the portfolio reflects a net initial yield of 6% and a reversionary yield of 9.15%.

·     In June 2016, Circle signed a new £50 million revolving facility with RBS which facilitated the refinancing of £39 million of existing facilities at a lower cost, and provides capital for further acquisitions. Following this transaction and as at 30 September the Group's secured debt amounts to £44.0 million with a weighted average term to expiry of 4.4 years and a weighted average cost of 2.44% secured on the Company's investment property portfolio.

·     The Board has declared an interim dividend of 2.4 pence per share, which maintains the level of dividend paid  for the previous reporting period.  This dividend will be paid on 18^th January 2017 to shareholders on the register on 16^th December 2016 with an ex-dividend date of 15^th December 2016.

Operational Highlights

·     Three significant lease contracts were secured during the period, adding £648,300 of annualised rent and comprising:

o  A lease surrender and new 25 year lease with the Compass Group at the Kents Hill Conference Centre in Milton Keynes at a commencing rent of £1,500,428 and representing a 71% increase over the previous rental level. 

o  Signed a new 10 year lease with Urgent Technology in April on 4,350 sq. ft. of vacant ground floor space at the 21,400 sq. ft. Power House office in Milton Keynes at £70,000 per annum, representing an increase of 8% over the previous tenant's rent.

o  The Group has also entered into an agreement with Topps Tiles for a new 10 year lease with a five year break option on 4,700 sq. ft. of currently vacant space at the 37,200 sq. ft. Baildon Bridge retail park bringing occupancy at the park to 91%.

·     Significant progress with development pipeline:

o  K1, Kents Hill Park, Milton Keynes is refurbished and fully let.  At K2 the refurbishment completed in July 2016 with 40,000 sq. ft. available to let, in which there is good interest based upon an ERV of £600,000 per annum.

o  In July 2016 planning permission was obtained for a change of use of the ground floor of Somerset House, Temple Street, Birmingham from offices to A3 restaurant.  A lease surrender with the existing ground floor tenant has been agreed (to complete December 2016), with both ground floor A3 units totalling approximately 10,950 sq. ft. under offer to two national restaurant chains at a combined rent of £410,000 per annum.  The refurbishment of floors 1-6 totalling 36,455 sq. ft. will commence in December with completion scheduled for July 2017.

o  At 36, Great Charles Street, Birmingham the rolling refurbishment of the offices on the Ground to 7^th floors totalling approximately 25,000 sq. ft. is well underway with completion due in February 2017. Three tenants are being retained and moved into newly refurbished floors and approximately 17,000 sq. ft. is to be offered to the market in spring 2017 with a rent yet to be announced.  When complete, the ERV of the building will exceed £500,000 per annum

·     Occupancy was 81.1% compared with 89.1% at 31 March, primarily due to the strategic take back of 46,000 sq. ft. of space at Somerset House and 59,600 sq. ft. of other space being refurbished across the portfolio which account for 96% of the total vacant space.  Excluding properties which are undergoing refurbishments, occupancy across the remainder of the investment portfolio rose to 96.0% from 90.6% at 31 March 2016.

·     The Group's portfolio of 16 commercial property investments and developments remains strongly diversified across the UK with the South East and London representing 48.5% by value, the South West 21.0%, the West Midlands 15.7% and the East Midlands 8.4%.  Over 80% of the portfolio is offices or conference centre.

·     In November the Group completed the sale of the Skoda dealership in Warrington for £1.32 million representing a 6% yield and a 32% premium to the 30 September valuation.

John Arnold, Chief Executive at Circle Property Plc, commented: "At the time of IPO we set out a clear objective to deliver attractive returns by investing in and managing value from regional offices which are often overlooked by other investors.  With strong growth across all key metrics and significant lettings successes these results not only demonstrate our team's ability to do just that, but also show that there is plenty of growth to be had in the regions, where Brexit has had little or no impact thus far.  We will now look to progress our current pipeline of asset management opportunities, whilst also exploring ways to undertake new acquisitions and grow our portfolio."

Circle Property Plc	[phone]
John Arnold, CEO Edward Olins, COO
Peel Hunt (Nominated Adviser and broker)	[phone]
Capel Irwin Edward Fox
FTI Consulting	[phone]
Richard Sunderland Giles Barrie

Results for the six months to 30 September 2016

Chief Executive's statement

I am pleased to present the Group's results for the first full six months of operations since its AIM listing in February 2016 which clearly demonstrate that Circle is delivering on its aim to provide attractive returns for shareholders by investing in regional office markets.  These markets are often overlooked by other investors who have tended in recent years to focus their office portfolios in London.  Moreover, while the London office market has softened, conditions in the English regions in which Circle specialises continue to be favourable, and there is enough confidence in these markets for decision makers to justify taking space at the right rental level.

By capitalising on our wide contact base and deep market knowledge combined with our asset management skills, we seek to out-perform benchmark indices. Regardless of the fact that the comparisons we are making today are with a four month previous period, the six months covered by these results are, we are pleased to say, testament to that approach and the Group is well placed to capitalise on improving markets in the wider south-east, Birmingham and Bristol, where the European Union Referendum result appears to have had less impact.

Circle's portfolio increased in value by 16.3% in the period from £77.7 million to £90.4 million, equating to a 17%, 26 pence per share increase in Net Assets per share to 179 pence per share, which, most encouragingly, has been primarily driven by our own asset management initiatives.

Profits before tax have risen to £8.27 million, reflecting the increase in operating profit but, more importantly, a £12.68 million gain in the value of our investment portfolio. Net rental income has also shown a strong gain, to £2 million, over the last six months.

Key highlights of the results can be found in the table below:

		1 April 2016 to 30 September 2016	4 December 2015 to 31 March 2016
	Investment returns
	Net Asset Value (NAV) per share	179p	153p
	Return on Equity	19%	3%
	Profitability
	Operating Profit	£1.15m	£0.84m
	Profit for the period (including revaluation surplus)	£8.21m	£1.07m
	Basic earnings per share (including revaluation surplus)	29p	3.8p
	Dividend per share	2.4p	2.4p
	Financing
	Group Net Debt	£41m	£36m
	Portfolio Valuation	£90.42m	£77.74m

Asset management

The Group had a very active first six months of the year, with a particular highlight being a very long new lease agreement with Compass Group at its Kents Hill Park Conference Centre in Milton Keynes.  This involved Compass agreeing to surrender the 7 years remaining on its lease and agreeing a new 25 year lease with fixed 3% annual uplifts throughout the term at a rent commencing at £1,500,428, representing a 71% or £625,428 increase over the previous rental level.  The new lease is subject to 15 and 20 year tenant break options and Circle has a call option over one of the buildings at any time during the term of the lease.  Savills valued Kents Hill Park in its entirety, at £32 million as of September 2016 - an increase of £10.75 million, reflecting the Compass lease re-gear, and the completion of the K2 refurbishment.

This new lease was signed at the very end of this reporting period and therefore the resulting enhanced rental income will only be recognised in full for the second half of the year.

This transaction also gave Compass the confidence to invest in its conference centre which adjoins Kents Hill Park, and is the type of mutually beneficial arrangement we strive to agree with our tenants.

In April, Circle also secured a new 10 year lease, with a five year break option, with Urgent Technology on 4,350 sq. ft. of vacant ground floor space at the 21,400 sq. ft. Power House office in Milton Keynes.  The lease was agreed at £70,000 per annum (discounted by 50% for the first year), representing an increase of 8% over the previous tenant's rent after they vacated the space in February 2016.  6,640 sq. ft. of the office remains vacant but with good tenant interest.

Another highlight of the period was the Group agreeing a new 10 year lease with a five year break option with Topps Tiles on 4,700 sq. ft. of currently vacant space at the 37,200 sq. ft. Baildon Bridge Retail Park, which brings occupancy at the park to 91%.

Developments

Our developments are all on track with occupational demand still evident in both Milton Keynes and Birmingham.

Kents Hill Park

The only two buildings not currently let to Compass are K1 and K2. We refurbished K1 in 2015 which was fully let by the 31 March 2016.  The K2 refurbishment completed in July 2016 with 40,000 sq. ft. currently available to let in which there is good interest at the ERV of £600,000 per annum.  The half year valuation increase of £10.75 million values Kents Hill Park at £32 million as of September 2016. When K2 is let, the total income from Kents Hill Park is expected to exceed £2.5 million.  In addition, there is an option to take back the smallest building let to Compass (K3) with no reduction in the Compass rental.  On completion of any future refurbishment of that building, the income at the expected ERV will rise by a further £222,750 p.a. (£16.50 psf).

Somerset House

Somerset House, Temple Street, Birmingham now has planning consent for a change of use of the ground floor from offices to A3 restaurant.  A lease surrender with the existing ground floor tenant has been agreed (to complete December 2016), with both ground floor A3 units totalling approximately 10,950 sq. ft. under offer to 2 national restauranteurs at a combined rental of £410,000 per annum.  The refurbishment of floors 1-6 totalling 36,455 sq. ft. will commence in December with completion scheduled for July 2017. On completion, the building should generate a total income of circa £1.2 million.

Great Charles Street, Birmingham

At 36, Great Charles Street, Birmingham the rolling refurbishment of the seven floors of offices totalling approximately 25,000 sq. ft. commenced in May 2016 with completion due in February 2017. Three tenants are being retained and moved into newly refurbished floors and approximately 17,000 sq. ft. is to be offered to the market in spring 2017 at a rent yet to be announced.  When complete, the ERV of the building will be in excess of £500,000 per annum.

A rent of £2.28 million of income is obtainable upon letting these refurbishments at full Estimated Rental Values. There is an additional £770,000 to be obtained by undertaking lease renewals and rent reviews and lettings within the investment portfolio.

Asset Management Strategy

Our portfolio is predominantly offices with some "legacy" properties in other sectors, which we are selling on an opportunistic basis.  As referred to above, the Skoda Dealership has been sold at 32% above the September valuation and we are currently re-gearing the Co-Op lease on our petrol filling station at Amesbury on the A303, following which the property will be offered on the market.

As a result of our strategy of actively managing our assets by taking back space from tenants to allow us to undertake refurbishments, occupancy within our portfolio was 81.1% at the end of the period compared with 89.1% at the end of March.  This reflects the approximately 120,500 sq. ft. of space in our Birmingham and Milton Keynes properties which are under refurbishment or recently completed.

Our strategy is to maximise income as quickly as possible and September's valuation of our portfolio by Savills reflects the potential for higher income from within the portfolio, as well as a successful asset management strategy over the six months covered by these results.

Outlook

In June we announced the agreement of a new £50 million revolving facility with RBS for the purpose of refinancing at a lower cost £39 million of Circle Property Unit Trust facilities, as well as providing capital for future acquisitions.

It remains our intention to grow our portfolio, because despite the uncertainties caused by Britain's decision on 23 June 2016 to leave the European Union, the economy continues to grow with many global corporates re-stating their commitment to the United Kingdom.

We will continue with our strategy of buying well located offices and other properties in the regions, undertaking judicious refurbishment and under-cutting competitors in order to fill our properties ahead of the competition.

As far as the investment market is concerned, although there are some concerns in Central London, the yield gap between longer let property and gilts is at an all-time high, which could be an indication that property yields are at least sustainable.

This has been a strong performance by Circle early in its life as a publicly-listed company. We continue to be on the lookout for opportunities to grow returns further by recycling capital and in time may seek to raise further funds to support our investment strategy.

We will also be maintaining a progressive dividend policy, and our confidence in the regional office markets, in which we specialise, continues to be strong. 

Condensed consolidated statement of comprehensive income
for the period from 1 April 2016 to 30 September 2016
								Unaudited			Audited
					Note			1 April 2016 to 30 September 2016			4 December 2015 to 31 March 2016
								£			£
Rental income					4			2,340,377			664,392
Other income					4			60,262			595,178
								2,400,639			1,259,570
Property expenses					5			(393,726)			(122,529)
Net rental income								2,006,913			1,137,041
Administrative expenses					6			(855,991)			(293,255)
Operating profit before gains on investment properties								1,150,922			843,786
Gains on revaluation of investment properties					11			6,597,429			-
Negative goodwill on acquisition of CPUT								-			3,817,264
Impairment of goodwill on acquisition of CPML								-			(2,117,591)
Listing costs								-			(1,326,054)
Operating profit								7,748,351			1,217,405
Finance income					7			46,542			17,875
Finance costs					8			(752,895)			(129,476)
Effective interest rate adjustment on borrowings					13			1,232,304			-
Net finance costs								525,951			(111,601)
Profit for the period before taxation								8,274,302			1,105,804
Taxation					9			(61,897)			(32,399)
Profit after taxation								8,212,405			1,073,405
Earnings per share					10			0.29			0.04
Condensed consolidated statement of financial position
30 September 2016
								Unaudited				Audited
						Note		30 September 2016				31 March 2016
								£				£
Non-current assets
Investment properties						11		83,734,663				75,780,824
Property plant and equipment								32,894				22,371
Trade and other receivables						12		6,312,535				1,771,394
Deferred tax								908,553				914,949
								90,988,645				78,489,538
Current assets
Trade and other receivables						12		1,757,277				2,555,037
Deferred tax								102,736				104,504
Cash and cash equivalents								2,991,506				4,516,153
								4,851,519				7,175,694
Total assets								95,840,164				85,665,232
Equity
Stated capital								42,542,179				42,542,179
Treasury share reserve								(380,001)				(380,001)
Retained earnings								8,606,688				1,073,405
Total equity								50,768,866				43,235,583
Non-current liabilities
Borrowings						13		44,085,159				40,028,371
Financial liability at fair value through profit and loss								-				94,855
								44,085,159				40,123,226
Current liabilities
Trade and other payables						14		986,139				2,306,423
								986,139				2,306,423
Total liabilities								45,071,298				42,429,649
Total liabilities and equity								95,840,164				85,665,232
The condensed consolidated interim financial statements were approved by the Board of Directors on 6 December 2016.
The accompanying notes form an integral part of these condensed consolidated interim financial statements.
Condensed consolidated statement of changes in equity
for the period from 1 April 2016 to 30 September 2016
		Share capital		Treasury shares reserve					Retained earnings			Total
		£		£					£			£
As at 4 December 2015		-		-					-			-
Profit for the period		-		-					1,073,405			1,073,405
Issue of ordinary share capital		42,162,178		-					-			42,162,178
Issue of treasury shares		380,001		(380,001)					-			-
As at 31 March 2016		42,542,179		(380,001)					1,073,405			43,235,583
Profit for the period		-		-					8,212,405			8,212,405
Dividends		-		-					(679,122)			(679,122)
As at 30 September 2016		42,542,179		(380,001)					8,606,688			50,768,866

Condensed consolidated statement of cash flows
for the period from 1 April 2016 to 30 September 2016
				Unaudited		Audited
		Note		1 April 2016 to 30 September 2016		4 December 2015 to 31 March 2016
				£		£
Cash flows from operating activities
Profit for the period before taxation				8,274,302		1,105,804
Adjustments for:
Finance income				(46,542)		(17,875)
Finance expense				752,895		129,476
Depreciation				3,678		1,195
Gains on revaluation of investment properties		11		(6,597,429)		-
Amortisation of loan arrangement fees				11,049		7,223
Fair value movement on interest rate swaps				(94,872)		2,146
Effective interest rate adjustment on borrowings				(1,232,304)		(53,578)
Negative goodwill on acquisition of CPUT				-		(3,817,264)
Impairment of goodwill on acquisition of CPML				-		2,117,591
(Increase) / decrease in trade and other receivables				(3,700,877)		1,712,781
Decrease in trade and other payables				(1,327,035)		(580,888)
Cash generated from operating activities				(3,957,135)		606,611
Interest and other finance costs paid				(821,386)		(60,158)
Interest received				4,055		4,107
Net cash from operating activities				(4,774,466)		550,560
Cash flows from investing activities
Cost of additions to investment properties		11		(1,356,410)		(266,755)
Cost of additions of property plant and equipment				(14,200)		(15,150)
Acquisition of subsidiaries, net of cash acquired				-		3,891,568
Net cash from investing activities				(1,370,610)		3,609,663
Cash flows from financing activities
Repayment of borrowings				(38,966,135)		(827,790)
Drawdown of borrowings				44,244,177		-
Proceeds of issue of shares				-		1,183,720
Dividends paid				(657,613)		-
Net cash used in financing activities				4,620,429		355,930
Net (decrease) / increase in cash and cash equivalents				(1,524,647)		4,516,153
Cash and cash equivalents at the beginning of the period				4,516,153		-
Cash and cash equivalents at the end of the period				2,991,506		4,516,153
The accompanying notes form an integral part of these condensed consolidated interim financial statements.

Notes to the condensed consolidated interim financial statements
for the period from 1 April 2016 to 30 September 2016
1  General information
These condensed consolidated interim financial statements are for Circle Property Plc ("the Company") and its subsidiary undertakings (together referred to as the "Group").
The Company's shares are admitted to trading on AIM, a market operated by the London Stock Exchange plc. The Company is domiciled and registered in Jersey, Channel Islands. The address of its registered office is 3rd Floor, Standard Bank House, 47-49 La Motte Street, St Helier, Jersey, JE2 4SZ.
The nature of the Company's operations and its principal activities are that of property investment in the UK.
2  Principal accounting policies
Basis of accounting
The condensed consolidated interim financial statements have been prepared in accordance with the IAS 34 "Interim Financial Reporting", and should be read in conjunction with the Group's last consolidated financial statements as at and for the period ended 31 March 2016. They do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last financial statements.
Going concern
The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chief Executive's statement. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in these financial statements.
The Group has adequate financial resources together with long term rental contracts with a wide range of tenants. As a consequence, the Directors believe that the Group is well placed to manage its business risk successfully.
The Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they have adopted the going concern basis in preparing the condensed consolidated interim financial statements.
Estimates and judgements
In preparing these condensed consolidated interim financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the period ended 31 March 2016.
3  Operating segments
During the period the Group operated in one geographical segment, which is the United Kingdom, and one reporting segment, which is investment in commercial property. Therefore no segmental reporting is required.

4  Revenue					Unaudited		Audited
					1 April 2016 to 30 September 2016		4 December 2015 to 31 March 2016
					£		£
Rental income					2,099,171		614,024
SIC 15 adjustment (spreading of lease incentives)					241,206		50,368
					2,340,377		664,392
Insurance recovery					60,036		18,884
Other income					226		576,294
					60,262		595,178
					2,400,639		1,259,570
On 29 September 2016 Compass Contract Services (UK) Limited ("Compass") surrendered their existing 10 year lease, relating to land and buildings Kents Hill Park, and entered into a new 25 year lease for the same property. The Group made a payment of £4,494,955, inclusive of SDLT and land registry fees, to Compass in relation to the surrender of their 10 year lease.
5  Property expenses					Unaudited		Audited
					1 April 2016 to 30 September 2016		4 December 2015 to 31 March 2016
					£		£
Property expenses					81,627		18,450
Property service charges					167,185		35,828
Property repairs and maintenance costs					26,059		41,103
Property insurance					70,615		19,157
Property rates					48,240		7,991
					393,726		122,529

6  Administrative expenses					Unaudited		Audited
					1 April 2016 to 30 September 2016		4 December 2015 to 31 March 2016
					£		£
Staff costs					250,366		62,039
Non-executive directors' fees					67,852		15,874
Administration fees					126,000		30,797
Legal and professional fees					290,853		110,117
Audit fees					30,639		32,500
Accountancy fees					4,769		1,733
Rent, rates and other office costs					26,531		5,696
Other overheads					54,862		33,304
Depreciation of tangible fixed assets					4,119		1,195
					855,991		293,255
7  Finance income					Unaudited		Audited
					1 April 2016 to 30 September 2016		4 December 2015 to 31 March 2016
					£		£
Bank interest					4,055		4,107
Loan interest					42,487		13,768
					46,542		17,875
8  Finance costs					Unaudited		Audited
					1 April 2016 to 30 September 2016		4 December 2015 to 31 March 2016
					£		£
Swap interest					70,880		16,749
Loan interest					566,679		110,581
Loan commitment fees					24,159		-
Loan arrangement fees					186,049		-
Fair value movement on interest rate swaps					(94,872)		2,146
					752,895		129,476

9  Taxation						Unaudited		Audited
						1 April 2016 to 30 September 2016		4 December 2015 to 31 March 2016
						£		£
Current tax						53,733		-
Deferred tax						8,164		32,399
						61,897		32,399
10  Earnings per share
Basic earnings per share has been calculated on profit after tax attributable to ordinary shareholders for the period (as shown on the condensed consolidated statement of comprehensive income) and the weighted average number of ordinary shares in issue during the period.
						Unaudited		Audited
						1 April 2016 to 30 September 2016		4 December 2015 to 31 March 2016
						£		£
Profit for the period						8,212,405		1,073,405
Weighted average number of shares						28,296,762		28,165,517
Earnings per ordinary share:						0.29		0.04
In the opinion of the Board, treasury shares held to satisfy share awards to management currently do not have any material value and hence do not have any dilutive effect. Therefore no diluted earnings per share has been presented.

11  Investment properties									Unaudited		Audited
									30 September 2016		31 March 2016
									£		£
Balance brought forward									77,735,000		-
Fair value of investment properties acquired									-		77,264,267
Cost of additions to investment properties									1,356,410		420,365
Gains on revaluation of investment properties									6,597,429		-
Lease incentive amortisation									4,736,161		50,368
Fair value of investment properties per valuation report									90,425,000		77,735,000
Unamortised lease incentives									(6,690,337)		(1,954,176)
Closing fair value									83,734,663		75,780,824
As at 30 September 2016 the fair value of investment properties under development included in the above amount was nil.
£86,425,000 of the above properties' value, estimated by the valuer, relate to property held on a freehold basis and £4,000,000 on a long leasehold basis.
The fair value of the Group's investment properties per the Valuation Report amounted to £90,425,000. The difference between the fair value of the investment properties per the Valuation Report and the fair value per the balance sheet of £6,690,337 relates to unamortised lease incentives which are recorded in the financial statements within non-current and current assets.
The Group has pledged all of its investment properties to secure banking facilities granted to the Group as detailed in note 13.
The fair value of the Group's investment properties at 30 September 2016 has been arrived at on the basis of valuation carried out by Savills (UK) Limited. The valuation was carried out in accordance with the Practice Statements contained in the Appraisal and Valuation Standards as published by the RICS. In forming their opinion of the fair value, the independent valuer's had regard to the current best use of the property, its investment attributes and recent comparable transactions. The valuation was carried out using the "All Risks Yield" method taking into consideration both sales and rental evidence and formulating the opinion of market value taking into account the properties' locations, specifications and specific characteristics.
12  Trade and other receivables								Unaudited			Audited
								30 September 2016			31 March 2016
								£			£
Non-current
Lease incentives								6,312,535			1,771,394
Current
Circle Property Trading (Maidstone) Limited								148,398			1,526,167
Loan interest due from Circle Property Trading (Maidstone) Limited								64,489			22,002
Lease incentives								377,802			182,782
Amounts due from property agents								8,951			100,956
Amounts due from tenants								241,063			135,276
VAT								783,394			387,031
Other receivables								133,180			200,823
								1,757,277			2,555,037
13  Borrowings								Unaudited			Audited
								30 September 2016			31 March 2016
								£			£
Brought forward								40,028,371			-
Fair value of loans acquired								-			40,902,516
Loan repayments								(38,966,135)			(827,790)
Loan drawdowns								44,244,177			-
Effective interest rate adjustment								(1,232,304)			(53,578)
Amortisation of lending costs								170,068			7,223
Unamortised lending costs								(159,018)			-
								44,085,159			40,028,371
On 21 June 2016 the Group entered into a new £50 million revolving facility with National Westminster Bank plc for the purpose of refinancing the Group's existing facility. The new facility has a three year term with two options to extend for a further year, with a drawdown loan to value of up to 55% of the gross portfolio value and an interest rate of 1.85% over LIBOR. The new facility was drawn down on 22 June 2016 and the existing facility repaid.

14  Trade and other payables					Unaudited		Audited
					30 September 2016		31 March 2016
					£		£
Trade payables					332,247		674,206
Deferred income					401,836		639,269
Rental deposit accounts					135,620		137,705
Loan interest payable					23,194		62,756
Valuation fee					18,000		28,000
Current taxation					53,733		-
Dividends payable					21,509		-
Final distribution due to CPML shareholders					-		396,670
Listing costs					-		338,888
SWAP interest payable					-		28,929
					986,139		2,306,423
15  Post balance sheet events
On 13 October 2016 the Group exchanged contracts on the sale of the freehold property Winwick Road, Warrington for a consideration of £1,320,000. The sale completed on 24 November 2016.

Registered Office, Officers and Registrars
Directors
Ian Henderson	Non-Executive Chairman
John Arnold	Chief Executive
Edward Olins	Chief Operating Officer
The Duke of Roxburghe	Non-Executive Director
James Hambro	Non-Executive Director
Michael Farrow	Non-Executive Director
Richard Hebert	Non-Executive Director
Company Secretary
Consortia Secretaries Limited
Registered Office
3rd Floor
Standard Bank House
47-49 La Motte Street
St Helier
Jersey
JE2 4SZ
Registrars
Computershare Investor Services (Jersey) Limited
Queensway House
Hillgrove Street
St Helier
Jersey
JE1 1ES

 

END

 

 

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