Final Results

RNS Number : 9861M
Helical Bar PLC
03 June 2010
 



 

 

 

 

 

3 June 2010

H E L I C A L   B A R   P L C

("Helical"/"Company"/"Group")

 

P r e l i m i n a r y   R e s u l t s

For the year to 31 March 2010

 

HELICAL POISED FOR NEW PHASE OF GROWTH

 

Financial Highlights

 

§ Profit before tax of £7.9m (2009: loss of £71.9m).

 

§ Valuation of investment properties up 7.9%, like for like, or £13.1m (2009:  down 25.7% or £68.0m).

 

§ Diluted EPRA net asset value, including trading and development stock surplus, down 5% to 272p per share (2009: 286p), after dividends paid and payable in the year of 7.25p (2009: 4.50p).

 

§ Final dividend payable of 0.25p per share taking total dividends for the year to 4.75p (2009: 4.50p), up 5.6%.

 

Operational Highlights

 

§ £73m of sales of assets which have reached their full potential during the year and a further £26m since the year end.  Sales include £54m of non-income producing assets.

 

§ Capital recycled into the acquisition, with Joint Venture partners, of £120m of investment assets, of which £50m since the year end.

 

§ Acquisitions show income return of 21.5% p.a. (income net of interest and all unrecoverable costs divided by equity invested) and offer significant asset management opportunities including letting voids (7% vacant by floor area).

 

§ Legal agreements have been exchanged to acquire the site at Mitre Square, London EC3.  A planning application for a new, high quality office development of 270,000 sq ft NIA has been submitted.

 

§ Appointed as asset and development manager at 200 Aldersgate Street, 360,000 sq ft of refurbished offices in the City.

 

§ Appointed development manager at Fulham Wharf, London SW6 for a major foodstore and residential application.

 

§ Turawa Retail Park, in Poland comprising 41,000 sq m, forward sold to Standard Life and construction commenced on site.  Value circa €75m.

 

Giles Weaver, Chairman, commented:

 

"Since we last reported to shareholders, the Group has successfully re-entered the investment market by acquiring, with joint venture partners, properties valued at more than £120m at yields that offer substantial potential for capital growth, whilst providing excellent cash returns. 

 

"This move back into investment properties marks the start of a re-alignment of the Group's activities as we realise cash from the sale of our industrial and change of use development portfolio and re-invest these funds into high yielding investment assets with good growth prospects as well as Central London office and other development opportunities.

 

"The Helical brand is ideally placed to take advantage of any opportunities as a result of its strong balance sheet, well-established industry, banking and investor partnerships coupled with the experience and skills of its management team."

 

Michael Slade, Chief Executive, added:

 

"In every market cycle, Helical has experienced a period during which it repositions its business to prepare for opportunities in forthcoming years.  It is no accident that half of our portfolio is made up of development and trading property rather than mainstream investment stock.  Now is the time to be working up major projects, both in Central London offices and in large residential plays in West London, as well as keeping an eye open for attractive investment opportunities as and when they arise. 

 

"Interestingly, we made our first major investment acquisition in four and a half years when buying the Clyde Shopping Centre in Glasgow with joint venture partners last autumn.  This was followed by the purchase of nine industrial and office investments last month.  More recently we have been appointed 'asset and development manager' at the 360,000 sq ft City office property, 200 Aldersgate, reflecting our long experience of City development.  Legal agreements have been exchanged to acquire the site at Mitre Square, London EC3 from the City of London and Ansbacher and a planning application for a new, high quality office development of 270,000 sq ft NIA has been submitted.  A start on site could be as early as the first quarter of 2011.  With responsibility for some 3,500 residential units to be built in West London at Fulham Wharf, Hammersmith Town Hall and White City, in addition to our growing Retirement Villages portfolio, we look also to benefit from an improving residential market.

 

"Having successfully navigated our way through the crisis period and in doing so outperformed our peers, we now look to monetising our portfolio of opportunity, sharing risk with partners, and maintaining a strong balance sheet."

 

 

 

For further information, please contact:

 

Helical Bar plc                                                                      020 7629 0113

Michael Slade (Chief Executive)                                

Nigel McNair Scott (Finance Director)

 

Address:          11-15 Farm Street, London W1J 5RS

Fax:                 020 7408 1666

Website:          www.helical.co.uk

 

Financial Dynamics                                                             020 7831 3113

Stephanie Highett/Dido Laurimore/Laurence Jones



Financial Highlights


 

 

Notes

Year To

31 March

2010

£m

Year To

31 March

2009

£m





Net rental income


14.2

17.7

Development property loss


(1.3)

(7.7)

Trading property loss


-

(0.5)

Share of results of joint ventures

1

3.7

1.8





Profit before property writedowns, investments gains and tax


9.7

16.2

Provisions against trading and development stock


(10.0)

(23.3)

Gains/(losses) on investment properties


8.2

(66.7)

Gain on sale of investments


-

1.9

Profit/(loss) before tax


7.9

(71.9)







Pence

Pence

 

Basic earnings/(loss) per share

 


9.1

(56.6)

Diluted earnings/(loss) per share

 


9.1

(56.6)

Diluted EPRA earnings per share

 

2

2.9

9.0

Dividends per share

 

3

7.25

4.50

Diluted EPRA net assets per share

 

4

272

286

Adjusted diluted net assets per share

 

5

241

242

 

 


£m

£m

Value of investment portfolio

 


219.9

241.3

Trading and development stock at directors' value

 

6

215.6

255.9

Net borrowings

 


203.0

224.7

Ratio of net borrowings to value of property portfolio

 


46.6%

45.2%

Net assets

 


242.6

237.1

Net gearing

 


84%

95%

 

1.         The Group's share of the results of entities controlled equally by the Group and its joint venture partners.

 

2.         Calculated in accordance with IAS 33 and the best practice recommendations of the European Public Real Estate Association ("EPRA") (see note 8 of the Preliminary Announcement).

 

3.         Includes a second interim dividend of 2.75p per share paid 1 April 2010 but excludes the final dividend of 0.25p per share payable, if approved, in July 2010.

 

4.         Calculated in accordance with the best practice recommendations of EPRA (see note 21).

 

5.         As per 4, but excluding the adjustment for the fair value of development stock.

 

6.         Includes the trading and development stock surplus of £33m (2009: £45m).

 

 

Chairman's Statement

 

Since we last reported to shareholders, the Group has successfully re-entered the investment market by acquiring, with joint venture partners, properties valued at more than £120m at yields that offer substantial potential for capital growth, whilst providing excellent cash returns. 

 

This move back into investment properties marks the start of a re-alignment of the Group's activities as we realise cash from the sale of our industrial and change of use development portfolio and re-invest these funds into high yielding investment assets with good growth prospects as well as Central London office and other development opportunities.

 

We have protected our balance sheet by not having a dilutive and deeply discounted rights issue, preferring to rely on the successful placing in January 2009, which raised £26m at a small premium to net asset value per share.  The result is that our net asset value performance over the last two years shows a decline of 21.2% in adjusted diluted net asset value per share which comfortably outperforms our peer group.  In addition, over this two year period, our property portfolio provided an unleveraged return of 0.8% p.a. compared to a decline in the IPD benchmark of 7.7% p.a.

 

Results

 

The profit before tax, property write-downs and investment gains reduced to £9.7m (2009: £16.2m). Development profits, before stock write downs, reduced to £8.7m (2009: £15.6m).  There were no trading property profits (2009: loss of £0.5m) and an increased contribution from the Group's share in the results of joint ventures of £3.7m (2009: £1.8m).  However, write-downs of trading and development stock of £10.0m, mainly resulting from a reduction in the carrying value of land held for industrial and change of use potential, are set against these profits.  Net rental income fell to £14.2m (2009: £17.7m), mainly the result of the sale of Rex House, London SW1.  Profit before tax was £7.9m (2009: £71.9m).

 

Administration costs increased from £8.1m to £8.7m with the costs of share awards higher at £1.2m (2009: credit £0.4m).  Net finance costs before capitalised interest reduced from £14.5m to £11.5m due to a lower average level of borrowings during the year and lower average interest rates.  Capitalised interest reduced to £3.2m from £6.9m.  There was a profit on mark to market valuation of the Company's financial instruments of £1.2m (2009: loss of £13.4m).  The Company made a loss on currency movements of £1.1m (2009: gain of £4.0m) on its Polish operations.

 

Valuation yields on our investment portfolio fell by 70 basis points (2009: rise of 180). This created a like for like rise in values of 7.9% (2009: fall of 25.7%), reflected as a gain on revaluation of £13.1m (2009: loss of £68.0m).  A loss on sale of investment properties of £4.9m compares with a gain of £1.3m in the previous year.

 

Diluted earnings per share were 9.1p (2009: loss 56.6p) and diluted EPRA earnings per share were 2.9p (2009: 9.0p).

 

The Group's diluted EPRA net asset value per share fell by 5% to 272p (2009: 286p).  The directors' valuation of trading and development stock showed a surplus of £33m (2009: £45m) and excluding this surplus the adjusted diluted net asset value per share reduced to 241p (2009: 242p).

 

A second interim dividend of 2.75p was paid to shareholders on 1 April 2010, originally in lieu of the final dividend.  However, the Board is recommending to shareholders an additional final dividend of 0.25p per share, payable, if approved, after the Annual General Meeting in July.  IFRS dividends are accounted for once approved and, as a consequence, these accounts include the final dividend from 2009 and both of the interim dividends from 2010, thereby reducing diluted EPRA net asset value per share by 2.75p more than if the second interim had been paid as a final dividend in July.  However, taken with the interim dividend paid in December 2009 of 1.75p (2009: 1.75p) and the final dividend of 0.25p it represents a total dividend of 4.75p (2009: 4.50p), an increase of 5.6% for the year.

 

Financing

 

In the year to 31 March 2010, Helical strengthened its financial position by re-negotiating the terms on £183m of secured loans, repaying £29m and removing loan covenants for between two and three years.  Whilst property values have recovered from their low point in August 2009, the Group will continue to monitor loan to value covenants, where applicable, and all income covenants to ensure that any potential breaches are avoided.  Helical has repaid £68m of debt during the period, partly as a result of its renegotiation of loans and partly arising from the sale of Rex House and industrial units at Southampton, Southall and Kidlington.  Since the year end, the Group has repaid £9m of loans from the sale of Watford, Paignton and Whitstable and will repay a further £10m on the sale of Fieldgate Street, London E1 in June 2010.

 

At 31 March 2010 the Group had net borrowings of £203.0m (2009: £224.7m) and gross property values of £435.5m (2009: £497.2m).  The ratio of net borrowings to the value of the property portfolio (including directors' valuation of stock) was 46.6% (2009: 45.2%).  Net debt to equity gearing at 31 March 2010 was 84% (2009: 95%).

 

At 31 March 2010, the Group had £92.6m (2009: £147.9m) of fixed rate borrowings with an average effective interest rate of 6.43% (2009: 6.31%) and an average length of 2.3 years (2009: 3.2 years) and £34m of interest rate caps at an average of 6.00% (2009: 6.73%).  In addition, the Group had a £34m floor at 4.50% until 2013.

 

Outlook

 

Despite the recovery in commercial property values since August 2009 there remain significant uncertainties over the current strength and future direction of the UK economy.  Continued volatility in Europe and its impact on the Euro, and uncertainty surrounding the new UK Government's plans to stabilise the domestic economy, threaten to slow the recent rise in property values.  However, the next 18 months should see an increase in activity as the domestic banks seek to sell assets following recent rises in values.  The Helical brand is ideally placed to take advantage of any opportunities as a result of its strong balance sheet, well-established industry, banking and investor partnerships coupled with the experience and skills of its management team.

 

 

Giles Weaver

Chairman      

3 June 2010



 

Chief Executive's Statement

 

In the year to 31 March 2010, commercial property started to recover from the 44% decline in capital values between their peak in June 2007 and their trough in July 2009.  Since then, capital values have improved by approximately 14%.  This recovery is now stalling as buyers digest the potential clouds on the horizon.  The derivative market points to negligible capital growth for the foreseeable future and IPF forecasts are no more optimistic.  The overwhelming concern centres on the banking crisis spilling over into a sovereign wealth problem whilst on a domestic level, the market remains worried over tenant demand/failure, forced sales as the banks slowly unload and a constipated new planning regime.

 

Set against good gains by the majors with a strong London weighting, Helical's efforts this year at first may seem pedestrian.  This is a function of how we have managed our way through the last three years of crisis.  I draw your attention to the Chairman's Statement on our adjusted net asset value per share outperformance over the last two difficult years which demonstrates the virtues of avoiding hugely dilutive rights issues.  That path never was and never will be Helical's way.  Shareholders can be grateful that your management team maintains a sizeable shareholding in the company.

 

In every market cycle, Helical has experienced a period during which it repositions its business to prepare for opportunities in forthcoming years.  It is no accident that half of our portfolio is made up of development and trading property rather than mainstream investment stock.  Now is the time to be working up major projects, both in Central London offices and in large residential plays in West London, as well as keeping an eye open for attractive investment opportunities as and when they arise. 

 

Interestingly, we made our first major investment acquisition in four and a half years when buying the Clyde Shopping Centre in Glasgow with joint venture partners last autumn.  This was followed by the purchase of nine industrial and office investments last month.  More recently we have been appointed 'asset and development manager' at the 360,000 sq ft City office property, 200 Aldersgate, reflecting our long experience of City development.  Legal agreements have been exchanged to acquire the site at Mitre Square, London EC3 from the City of London and Ansbacher and a planning application for a new, high quality office development of 270,000 sq ft NIA has been submitted.  A start on site could be as early as the first quarter of 2011.  With responsibility for some 3,500 residential units to be built in West London at Fulham Wharf, Hammersmith Town Hall and White City, in addition to our growing Retirement Villages portfolio, we look also to benefit from an improving residential market.

 

Having successfully navigated our way through the crisis period and in doing so outperformed our peers, we now look to monetising our portfolio of opportunity, sharing risk with partners, and maintaining a strong balance sheet.

 

 

Michael Slade

Chief Executive

3 June 2010

Business Review

Total portfolio - unleveraged returns


1 year

%

2 years

%

3 years

%

5 years

%

10 years

%

20 years

%

Helical

8.5

0.8

0.0

9.9

13.5

15.7

IPD Benchmark

17.4

(7.7)

(7.4)

2.2

6.5

6.9

Helical's percentile rank

90

5

3

2

2

0

 

0 = top ranked fund

Note: excludes the surplus but includes writedowns arising from the directors' valuation of trading and development stock.

Our Portfolio - how we commit our capital

 


    London Offices  %

 Provincial Offices  %

    In Town Retail     %

Out of Town Retail   %

                  

Industrial  %

    Change of  Use  %

   Retirement Village       %

                                 

Total   %

Investment

19.6

2.4

22.5

4.2

6.1

-

0.9

55.7

Trading and development

0.4

4.3

2.1

11.2

7.5

5.0

13.8

44.3

Total

20.0

6.7

24.6

15.4

13.6

5.0

14.7

100.0

 

Note: excludes the surplus arising from the directors' valuation of trading and development stock.

 

Development and Trading Portfolio

Project Type


Book cost

£m

Write down

£m

Written down book cost

£m

Directors' Valuation

£m

Surplus Over Book Cost £m

Change of Use


23

(1)

22

32

10

 

Industrial Development for Freehold Sales


38

(6)

32

32

-

Retirement Village development


61

(2)

59

72

13

Office Development


20

(1)

19

19

-

Retail Development (Helical Poland)


45

-

45

55

10

Others - Mainly Mixed Development


6

-

6

6

-

Total

 

193

(10)

183

216

33

 

 

Basis of valuation - the Directors' valuation of the properties is based on current site values.

 

 

Our business

 

Helical Bar is a property development and investment company.  We create shareholder value through a wide variety of high margin activities with property investment at our core.  The intention is that property investment should provide a stable income stream to cover overheads and interest costs.  Our spread of activities gives us the flexibility to deploy capital rapidly across our business and focus on whatever opportunities offer the best returns at different points of the property cycle.

 

Our goals

 

Our overriding long term strategy is to make excellent returns for our shareholders through a broadly based, diversified property business, which has access to a very wide range of opportunities.

 

We do this with a small, long serving management team who have a significant proportion of their own wealth invested in a 17% stake in the Company and have no competing interests. We try to keep execution risk to a minimum, working with first rate joint venture partners when we move into new areas of property business.

 

Development Programme

 

Helical seeks to provide a continuing flow of development profits.  It has good experience across the different sectors of offices, retail, industrial, mixed use and residential/retirement village schemes.  These developments are either pre let or speculative and financed either by Helical or by third party funding partners.  Helical tends to develop smaller schemes on its own and works on larger schemes either as development manager, typically being paid a small fee in return for a greater share of profit to incentivise a successful outcome, or with equity invested alongside our partner.

 


 Year to 31 March 2010

 

Profits from the Group's development programme of £8.7m (2009: £15.6m) were again turned into net losses by provisions of £10.0m (2009: £23.3m) made against the carrying value of development stock.  The profits generated during the year came from a range of developments including the retail schemes at Opole, Poland and Trinity Square, Nottingham; industrial schemes at Kidlington and Southall and at Aycliffe industrial estate; our office scheme at Riverbank House, London EC1 and at Bramshott Place Retirement Village.  Provisions were made against the carrying value of land held for industrial and change of use potential.  In addition to these schemes the Group's efforts were directed towards progressing our position in a range of schemes across the portfolio, details of which are outlined below:

 

Offices

 

The focus of the Group over the last year has been on those schemes recently completed or under construction, looking for tenants for the space, where vacant, and progressing a small number of major schemes for the future.

 

Riverbank House, London EC4

 

Riverbank House, EC4 is a 320,000 sq ft new office building built for the City of London / Pace Investments and pre-let in its entirely to Man Group.  Building work started in late 2006 and recently completed with the building handed over to the tenant for its fit-out.  Helical has a development management agreement with the owners under which it will receive a profit related fee, due this month.

 

200 Aldersgate Street, London EC1

 

Originally developed in the late 1980's, this 360,000 sq ft office building has remained vacant since Clifford Chance left for Canary Wharf in 2005.  We have been appointed as asset and development managers with a view to refreshing and re-cladding parts of the building and creating a "vertical village" for office users.  It is anticipated that the works will be completed in late 2010, following which the building will be re-launched on the market.

 

Mitre Square, London EC3

 

Legal agreements have been signed to acquire the site at Mitre Square, London EC3 from the City of London and Ansbacher.  A planning application for a new high quality office development of 270,000 sq ft NIA has been submitted.  A start on site could be as early as the first quarter of 2011.

 

The Hub, Pacific Quay, Glasgow

 

The Hub, Pacific Quay, Glasgow was completed in 2009. This new 60,000 sq ft building offers flexible office space with an onsite cafe and events area.  Located in the midst of a media hotbed with BBC Scotland and STV as neighbours, this scheme has been partly let to The Digital Design Studio, the commercial arm of Glasgow School of Art, Shed Media and other high-tech, media-orientated tenants. 

 

Clareville House, Panton Street, London SW1

 

This 75,000 sq ft office refurbishment for the National Grid UK Pension Fund was completed in February 2008.  During the year, we have achieved lettings to restaurant Busaba Eathai and office tenants Novus Leisure Ltd and good progress is being made on the remainder of the vacant space.  Due to movements in rental and yield pricing it is very unlikely a further profit payment will be forthcoming.

 

Retail

 

In Poland we have three schemes totalling over 117,600 sq m (1.2m sq ft):

 

Park Handlowy Mlyn, Wroclaw

 

Wroclaw is a large city in West Poland, some 100km from the German border and 470km south of Warsaw.  This 9,600 sq m (103,000 sq ft) out of town retail development was completed in December 2008 and is fully let to a number of domestic and international retailers including Halfords, Media Expert, Deichmann, Komfort and others.  The scheme is currently under offer for sale to a private property investment fund.

 

Park Handlowy Turawa, Opole

 

Opole is located approximately 40km to the west of Wroclaw along the A4 motorway and is the administrative centre of the Opole province.  This shopping centre and retail park is anchored by a Carrefour Hypermarket and a Praktiker DIY store and comprises approximately 41,000 sq m (440,000 sq ft) of retail space.  The scheme has been forward funded and sold to Standard Life and is due for completion in the first quarter of 2011.

 

Europa Centralna, Gliwice

 

This scheme is being developed on land to the south of Gliwice at the intersection of the A4 and A1 motorways.  This highly visible site has unparalleled accessibility and will be a major regional shopping destination.  The retail park and shopping centre, comprising approximately of 67,000 sq m (720,000 sq ft) of retail space, will incorporate three distinct parts, being a foodstore, DIY and household goods and fashion.  The scheme has been part pre-let to Castorama, Media Expert and others.  We are currently in detailed discussions with potential joint venture partners.  Construction is due to commence by the end of 2010 with completion in the first quarter of 2012.

 

Change of use and mixed use

 

White City, London W12

 

We continue to work with the London Borough of Hammersmith and Fulham and the GLA in the production of an Opportunity Area Planning Framework for White City which will set out a blueprint for the area's potential. The aspiration for us and our landowning consortium ( Aviva , M&S, BBC and Land Securities) is a major mixed use scheme east of Wood Lane , London W12 incorporating some 3.5m sq ft of residential and commercial floorspace with a creative industries bias. The ownership interests of our consortium lie immediately opposite BBC Television Centre and just north of Westfield's new shopping centre.

 

Fulham Wharf, London SW6

 

At Fulham Wharf we are finalising, with landowner Sainsbury's, a planning application for a 100,000 sq ft new foodstore together with circa 475 residential units.  The proposal is to demolish the adjacent dilapidated buildings, construct a new store with housing above and turn the existing store into new housing, creating new public spaces and enhancing access to a Thames riverside walkway within the development.

 

King Street, Hammersmith, London W6

 

We have a development agreement with the London Borough of Hammersmith & Fulham, in partnership with residential specialist Grainger plc, for the regeneration of the west end of King Street, Hammersmith.  We will submit a planning application in Summer 2010 for new council offices, a foodstore and restaurants around a new public square, over 320 new homes and a new public footbridge across the Great West Road, which will re-connect Hammersmith to the River Thames and Furnival Gardens.

 

Parkgate, Shirley, West Midlands

 

At Parkgate, Shirley we have revised our plans for the redevelopment of this site and will be submitting a new planning application to Solihull Metropolitan Borough Council later this Summer.  The development will, however, continue to include an 85,000 sq ft Asda supermarket, 64,000 sq ft of retail and circa 120 residential apartments and townhouses.

 

Bluebrick, Wolverhampton

 

At Bluebrick, Wolverhampton, we currently own a refurbished disused railway station with planning permission for casino use and are looking for a tenant and/or purchaser for this building.  In previous years, we have sold off parcels of land for student housing, residential, hotel, car showroom and public house use.

 

Leisure Plaza, Milton Keynes

 

At Leisure Plaza, Milton Keynes, we have planning consent for a 165,000 sq ft retail store, 65,000 sq ft casino, 50,000 sq ft ice rink and 25,000 sq ft of other leisure.

 

Student Accommodation

 

Completion of the sale of our site at Fieldgate Street, London, E1, which has planning consent for 340 student rooms, is due in June 2010.  At 200 Great Dover Street, London, SE1, currently an investment property, let to Conoco Phillips until June 2011, we are appealing against a planning refusal for a new development of 35,000 sq ft of offices and 245 student rooms.

 

Industrial development

 

We have built 120 units totalling over 570,000 sq ft for onward sale to owner occupiers at two sites in Oxford as well as at Southampton, Southall (West London) and Hailsham.  We have sold 43 of these units (220,000 sq ft), and have let a further seven units (29,000 sq ft). These schemes include sales of parcels of land for car showrooms, builders merchants and self-storage uses and the development of trade counter schemes.  In addition, we own a vacant site in Stockport with planning permission for trade counters, industrial units and a builders merchant, self storage and car showroom. Infrastructure works have recently commenced at this site.

 

Retirement Villages

 

A retirement village is a private residential community in which active over-55s are able to live independently in retirement.  Residents have typically down-sized from a larger family home into a cottage or apartment with no maintenance or security issues.  With access to a central clubhouse containing a bar and restaurant facilities and health and fitness rooms and surrounded by maintained grounds, this retirement option is proving increasingly popular.

 

Bramshott Place, Liphook, Hampshire

 

The original Bramshott Place Village was an Elizabethan mansion built in 1580 by a local merchant.   Whilst this was demolished in the mid 19th Century and replaced by Bramshott Grange, the original Grade II listed Tudor Gatehouse remains and has been fully restored.  Bramshott Grange operated most recently as a hospital for the elderly but closed in 1987.  The land and buildings remained derelict until Helical acquired them in 2001.  Changing planning from its previously designated employment use to a retirement village took several years but was eventually achieved in 2006.

 

The development of 151 cottages and apartments, and the new clubhouse, started in late 2007 and has proceeded in phases as units are sold.  Currently, we have sold 33 units in phases 1 & 2 with reservations on a further 28 units out of a total of 96 units built or under construction.  The remaining 55 units are expected to be built in 2010/11.

 

Cherry Tree Yard, Faygate, Horsham, West Sussex

 

Cherry Tree Yard, a 30 acre site, had operated as a sawmill with outside storage for many years.  Now vacant, we were granted planning permission, at appeal, in May 2009 following a public inquiry where the Inspector allowed a development comprising a retirement village of 148 units, eight affordable housing units, a 50 bed residential care home and a central facilities clubhouse building.  Demolition and enabling works will commence shortly with construction of the retirement village and clubhouse, to be built in phases, expected to commence in late 2010. 

 

St Loye's College, Exeter

 

This 19 acre site was acquired in 2007 from the St Loye's Foundation, a long established rehabilitation college in the city of Exeter.  Resolution to grant planning permission was obtained in October 2009 for a retirement village of 206 units, a 50 bed residential care home, an affordable "extra-care" block of 50 units and a central facilities clubhouse building.  Construction of the retirement village and clubhouse in phases is expected to commence during 2011.

 

Ely Road, Milton, Cambridge

 

This 21 acre site was acquired from EDF in 2006 and was previously used as a training centre and depot.  Located within the Green Belt, planning permission has been obtained for a retirement village of 101 units and a central facilities clubhouse building.

 

Governetz 

 

Helical Governetz was formed in 2007 in anticipation of demand for the wholesale reform of the government estate which is inefficient, outdated and poorly located.  The intention is to provide office campus accommodation where civil service, local government, wider public sector bodies, and private sector servicing organisations can share facilities, accommodation and services.  The buildings will meet all the requirements of SOGE - Sustainability on the Government Estate.

 

Whilst these initiatives will take time to come to fruition we have been encouraged by our preliminary discussions with government bodies.  At Keele, Staffordshire we are planning a sustainable business park within Keele University Science and Business Park.  At Waverley, Rotherham, South Yorkshire in partnership with Harworth Estates, a division of UK Coal plc, we are planning a sustainable mixed use development of up to 600,000 sq ft of offices.  Other projects are under discussion at Newport, Preston and Porton Down.

 

Quotient

 

In January 2007 we acquired a research facility near Newmarket in a joint venture with the majority shareholder of Quotient who occupy the buildings. As part of the transaction we acquired a minority stake in Quotient, a fast growing biosciences company. 

 

Investment Portfolio

 

In recent years we have retained those assets identified as having potential for future growth, or which provided a strong cash flow to the business, having disposed of assets which had reached their maximum potential.  The remaining portfolio provided a source of income to cover overheads and finance costs but this, as with the rest of the property sector, suffered from valuation falls in 2007 and 2008. 

 

By July 2009, the cycle appeared to be turning with capital values increasing despite continuing falls in rental values.  This is reflected in a like-for-like increase in values of 7.9% on the investment portfolio over the year. 

 

During this financial year we sold our short leasehold interest in Rex House, London SW1 to the freeholders, The Crown Estate, for £34m.  The sale price, reflecting an initial yield of 12% on a head lease with just 26 years remaining, was at 8% below the 31 March 2009 valuation.

 

We made our first significant investment property acquisition for four and a half years at the end of 2009, acquiring Clyde Shopping Centre in Glasgow with joint venture partners, and, following the year end, bought a portfolio of nine industrial and office assets located predominantly in London and the South East.

 

 

Valuation Movements

 

Sector

Valuation Increase/

(Decrease)

%

Weighting

%




London Offices

7.9

44

Provincial Offices

(5.9)

6

Total Offices

6.2





In town retail

10.7

27

Out of town retail

19.9

9

Total retail

13.0





Industrial

1.7

14

Total

7.9

100




 

Valuation Yields

 

Sector

Initial

On Letting Voids

On Rack Rental Value

Equivalent

True Equivalent


%

%

%

%

%

Offices

6.6

8.2

8.2

7.9

8.3

Retail

6.6

7.9

7.9

7.6

7.9

Industrial

6.3

9.4

10.1

9.2

9.7







All

6.6

8.2

8.3

7.9

8.3





 


Capital Value psf

£

Vacancy Rate

%

Average Unexpired

Lease Term

 

All offices

232

14

4.2

 

London offices

249

17

2.6

 

Retail

151

8

13.9

 

Industrial

44

18

4.6

 

Total

132

13

10.1

 

 

Lease expiries and tenant break options in:


2010

2011

2012

2013

2014




Percentage of rent roll

8.9%

15.0%

5.1%

9.5%

5.6%




Number of leases

70

58

31

26

20




Average rent per lease

£26,300

£53,900

£34,400

£76,300

£58,300




 



 

Lease expiries and tenant breaks in year

 


2010

£

 

 

%

Leases renewed

2,235,900


Break options not exercised

763,400


Tenants holding over

182,700



3,182,000

87

Rents lost at break/expiry

498,500

13


   3,680,500

            100

 

Passing rent changes in the year

 


Rent

£

Change

£

Rent lost at break/expiry

(498,485)

(498,485)

Rent lost through administration

(638,105)

(638,105)

Leases renewed

2,235,916

157,508

Tenants holding over

182,730

-

Fixed uplifts

1,918,904

184,737

New lettings

1,014,137

1,014,137



219,791




 

Investment Portfolio - changes in rental value

 


March 2009 -

March 2010

%


Industrial

8.1





Out of town retail

0.3


In town retail

7.5


Total retail

5.4





Provincial offices

-5.6


London offices

-3.7

(+2.3% since September 2009)

Total offices

-4.1





Total

0.8



PROPERTY PORTFOLIO












INCOME PRODUCING ASSETS











OFFICES



















Area

Helical




Average

Vacancy

Address



Region

Tenure

Acquired

Sq. Ft. (NIA)

Interest

Description



Passing Rent

Rate

Shepherds Building, Shepherds Bush, London W14

London

Freehold

2000

151,000

100%

Media style offices refurbished in 2001

£22.50

2%

61 Southwark Street, London SE1

London

Freehold

1998

67,000

100%

Refurbished with added penthouse suite

£18.65

0%

200 Great Dover Street, London SE1

London

Leasehold

2008

36,000

100%

Fully let, re-development potential


£19.95

0%

80 Silverthorne Road, Battersea, London SW8

London

Freehold

2005

56,000

75%

Media style offices refurbished in 2006

£18.37

13%

82 Silverthorne Road, Battersea, London SW8

London

Freehold

2008

52,000

75%

Media style offices built in 2008

0

100%

Fordham, Newmarket


South East

Freehold

2007

70,000

53%

R & D space and offices on 32 acres

£15.37

0%

Amberley Court, Crawley


South East

Freehold

2006

31,000

95%

Partial refurbishment of office campus

£13.88

12%







463,000




















RETAIL - SHOPPING CENTRE

















Area

Helical




Average

Vacant

Address



Region

Tenure

Acquired

Sq. Ft. (NIA)

Interest

Description



Passing Rent

Space

Clyde Shopping Centre, Clydebank

Scotland

Leasehold

2010

627,000

60%

Multi-let regional shopping centre

£13.74

7%







627,000




















RETAIL - IN TOWN


















Area

Helical




Average

Vacant

Address



Region

Tenure

Acquired

Sq. Ft. (NIA)

Interest

Description



Passing Rent

Space

Morgan Department Store, Cardiff

Wales

Freehold

2005

246,000

100%

Refurbished store let as prime retail units + arcades

£12.84

15%

1 - 5 Queens Walk, East Grinstead

South East

Freehold

2005

37,000

89%

Retail units 95% let to Sainsbury's

£8.37

0%







283,000







 

RETAIL - OUT OF TOWN


















Area

Helical




Average

Vacant

Address



Region

Tenure

Acquired

Sq. Ft. (NIA)

Interest

Description



Passing Rent

Space

Otford Road Retail Park, Sevenoaks

South East

Freehold

2003

42,000

75%

Retail park let to Wickes, Currys & Carpetright

£17.37

0%

Stanwell Road, Ashford


South East

Leasehold

2004

32,000

75%

Solus unit let to Focus DIY store

£17.76

0%

Brixham Road, Paignton


South West

Freehold

2005

24,000

77%

Solus unit let to Focus DIY store, sold In May 2010

£8.75

0%







98,000







 

 















 

PROPERTY PORTFOLIO












 

INCOME PRODUCING ASSETS











 

INDUSTRIAL













 







Area

Helical




Average

Vacant

Address



Region

Tenure

Acquired

Sq. Ft. (NIA)

Interest

Description



Passing Rent

Space

Standard Industrial Estate, North Woolwich E16

London

Leasehold

2002

50,000

60%

Multi-let industrial estate


£8.95

10%

Westgate, Aldridge


Midlands

Freehold

2006

184,000

90%

Single-let refurbished industrial unit



£2.93

0%

Waterfront Business Park, Fleet, Hampshire

South East

Freehold

2000

54,000

100%

Multi-let industrial estate


£5.93

47%

Dales Manor Business Park, Sawston, Cambridge

South East

Freehold

2003

62,000

67%

Multi-let industrial estate


£7.28

0%

Hawtin Park, Blackwood


Wales

Freehold

2003

249,000

100%

Offices and industrial units

£2.04

0%

 

Winterhill Industrial Estate, Milton Keynes

Midlands

Freehold

2004

24,000

50%

Offices and industrial units



£0.00

51%

Golden Cross, Hailsham


South East

Freehold

2001

102,000

100%

Industrial units



£4.36

89%







725,000




















 

 

 

 

 

PROPERTY PORTFOLIO








 

DEVELOPMENT PROGRAMME







 

OFFICES









 





Area

Helical




 

Address



Region

Sq. Ft.

Interest

Fund/Owner

Type of development


 

Riverbank House, London EC4

London

320,000

Dev. Man.

City of London /Pace Investments

New office building completed May 2010


 

200 Aldersgate Street, London EC1

London

360,000

Dev. Man.

Deutsche Pfandbriefbank

Refurbishment to be completed in Oct 2010


 

Mitre Square, London EC3


London

275,000

100%


New office building


 

Clareville House, London SW1

London

75,000

Dev. Man.

National Grid UK Pension Fund

Refurbishment completed 2009


 

The Hub, Pacific Quay, Glasgow

Scotland

60,000

100%

Helical

New office building completed 2009


 

Forest Gate, Crawley


South East

63,000

100%

Helical

Refurbished and new offices


 





1,153,000





 










 

INDUSTRIAL









 





Area

Helical




 

Address



Region

Sq. Ft.

Interest

Description

Type of development


 

Scotts Road, Southall, West London

London

167,000

100%

Industrial units

New build


 

Millbrook Trading Estate, Southampton

South East

110,000

100%

Industrial and trade counter

New build


 

Langford Lane, Kidlington, Oxford

South East

72,000

100%

Industrial units

New build


 

Tiviot Way, Stockport


North West

189,000

100%

Industrial, trade counter etc

New build


 

Watlington Road, Cowley, Oxford

South East

71,000

100%

Industrial and offices

New build


 

Ropemaker Park, Hailsham

South East

70,000

90%

Industrial and food store/rest

New build


 





679,000





 










 

RETAIL - OUT OF TOWN








 





Area

Helical




 

Address



Region

Sq. Ft.

Interest

Fund/Owner

Description

 Type of development

 

Wroclaw



Poland

103,000

50%

Under offer

Completed development, fully let

New build

 

Opole



Poland

440,000

50%

Standard Life

Under construction

New build

 

Europa Centralna, Gliwice


Poland

720,000

50%

Helical

To commence late 2010

New build

 





1,263,000





 










 

CHANGE OF USE POTENTIAL







 





Area

Helical




 

Address



Region

Sq. Ft.

Interest

Fund/Owner

Description


 

White City, London W12


London

3,500,000

Consortium

Consortium

Commercial and residential


 

Fieldgate Street, London E1

London

-

100%

Helical

Sold since year end

 

Cawston, Rugby


Midlands

-

100%

Helical

32 acre greenfield site with residential potential

 

Arleston, Telford


Midlands

-

100%

Helical

19 acre greenfield site with residential potential

 





3,500,000





 

 

 

 

 

 

 

 

 

DEVELOPMENT  PROGRAMME

RETIREMENT VILLAGES








 






Helical

 Description

 

Address



Region

Units

Interest

 

Bramshott Place, Liphook, Hampshire

South East

151

100%

33 units sold, 28 under offer

 

Lime Tree Village, Rugby


Midlands

154

33%

153 units sold



 

St Loye's College, Exeter


South West

206

100%

Resolution to grant planning consent for a retirement village granted in October 2009

 

Maudsley Park, Great Alne

Midlands

150

100%

314,000 sq ft industrial estate on a 20 acre site with potential for a retirement village

 

Ely Road, Milton, Cambridge

South East

101

100%

Planning consent for a retirement village granted in 2009


 

Cherry Tree Yard, Faygate, Horsham

South East

      148

100%

Planning consent for a retirement village granted in May 2009


 





910





 










 

MIXED USE DEVELOPMENTS






 





Helical




 

Address



Region

Interest

Description



 

C4.1, Milton Keynes


Midlands

50%

110,000 sq ft Sainsbury's, 440 residential units and 35,000 sq ft retail and offices

 

King Street, Hammersmith, London

London

50%

Planning application to be made for new council offices, foodstore and restaurants

 

Fulham Wharf, London SW6

London

Dev. Man.

100,000 sq ft foodstore and 475 residential units

 

Leisure Plaza, Milton Keynes

Midlands

50%

Consent for 165,000 sq ft retail store, 65,000 sq ft casino, 75,000 sq ft other leisure

 

Parkgate, Shirley, West Midlands

Midlands

50%

80,000 sq ft Asda supermarket, 70,000 sq ft retail, 100 residential units

 

Bluebrick, Wolverhampton

Midlands

75%

Refurbished railway station with permission for casino use

 

Hagley Road, Quinton, Birmingham

Midlands

75%

Consent for 16,000 sq ft retail. Site under offer.

 









 



Financial Review

 

Consolidated Income Statement

 

Results for the year

 

The Group made profits of £9.7m (2009: £16.2m) before writedowns of its investment and trading development properties and its loss on sale of investment properties.  A revaluation surplus of £13.1m (2009: deficit £68.0m) less a £10.0m (2009: £23.3m) writedown of trading and development stock, a gain on sale of investments of £nil (2009: £1.9m) and a £4.9m loss on sale of investment property (2009: profit £1.3m) reduced this profit to £7.9m (2009: loss £71.9m). Profit after tax was £9.6m (2009: loss £53.5m).

 

Net rental income

 

Net rental income fell by 20% to £14.2m (2009: £17.7m) reflecting the sale of Rex House, London SW1 during the year.  Rental costs increased to £4.7m (2009: £3.1m) as irrecoverable service charges on vacant units increased.  Tenant bad debts remain low at less than 4% of gross rental income.

 

Development profits

 

Development profits from the schemes in Turawa Poland, Liphook, Riverbank House and Trinity Square Nottingham were offset by stock write-downs of £10.0m (2009: £23.3m) to give a development loss for the year of £1.3m (2009: £7.7m).

 

Trading profits

 

There were no trading profits in the year (2009: £0.5m).

 

Share of results of joint ventures

 

During the year the Asset Factor sold its investment in NB Entrust and this, together with profits from the Group's share of net income and revaluation surplus from its investment in Clyde Shopping Centre, and profits at C4.1, Milton Keynes contributed to the Group's share of the results of its joint ventures of £3.8m (2009: £1.8m).

 

Gain on sale and revaluation of investment properties

 

During the year the Group sold investment properties with book values of £40.4m (2009: £9.0m) on which it made a £4.9m loss (2009: £1.3m profit).  The properties sold included Rex House, London SW1, residential units in Cardiff and offices in Glasgow.  The revaluation surplus for the year was £13.1m (2009: deficit £68.0m).

 

Administrative expenses

 

Administrative expenses increased to £8.7m (2009: £8.1m) with the increased cost of share awards offsetting a reduction in other costs.  Administrative expenses, before impairment of goodwill, share based payments charge and executive bonuses, reduced to £6.7m (2009: £7.4m).

 

Finance costs, finance income and derivative financial instruments

 

Interest payable on bank loans, before capitalised interest, decreased from £15.9m to £11.0m due to a fall of average interest rates and the repayment of the bank loan secured on Rex House.  Capitalised interest reduced to £3.2m from £6.9m as interest rates fell and developments were completed.  Finance income earned on cash deposits decreased to £1.0m (2009:£2.1m).

 



 


2010

2009

2008

Net finance costs

£000

£000

£000





Interest payable on bank loans

10,956

15,890

11,901

Other interest payable

696

362

265

Finance arrangement costs

872

321

163

Interest capitalised

(3,196)

(6,855)

(9,296)


9,328

9,718

3,033

 

Interest receivable

(1,039)

(2,082)

(2,579)

 

Derivative financial instruments have been valued on a mark to market basis and a surplus of £1.2m (2009: deficit £13.4m) has been recognised in the Income Statement.

 

Foreign exchange gains

 

A foreign exchange loss of £1.1m (2009: gain of £4.0m) has been recognised in respect of the Group's retail developments in Poland.

 

Taxation

 

The Group corporation tax charge for the year is less than the standard rate of 28% due to the use of capital allowances, tax relief on share awards and tax losses.  The adjustment in respect of prior periods related to corporation tax recoverable from previous years.

 

The deferred tax credit for the year reflects a reduction in the provision for tax on temporary differences between the carrying amount of assets and liabilities in the financial statements and their corresponding tax bases in accordance with IFRS.

 

The deferred tax asset is principally derived from tax losses which the Group believe will be utilised against profits in the foreseeable future.

 

Dividends

 

The Board is recommending to shareholders at the Annual General Meeting on 21 July 2010 a final dividend of 0.25p per share to be paid on 23 July 2010 to shareholders on the register on 25 June 2010.  This final dividend, amounting to £265,000 has not been included as a liability at 31 March 2010, in accordance with IFRS.

 

During the year the Group paid the 2009 final dividend of 2.75p per share and an initial interim dividend for 2010 of 1.75p per share.  On 3 March 2010 a second interim dividend was declared at 2.75p per share and was paid on 1 April 2010.  This dividend was included in current liabilities at 31 March 2010.

 


2010

2009

2008

Dividends

pence

pence

pence





1st interim

1.75

1.75

1.75

2nd interim

2.75

-

-

Prior period final

2.75

2.75

2.75





Total

7.25

4.50

4.50

 



Earnings/(loss) per share

 

Earnings per share in the year to 31 March 2010 were 9.1p (2009: loss of 56.6p) per share and on a diluted basis were 9.1p (2008: loss of 56.6p) per share.  Diluted EPRA earnings per share decreased to 2.9p (2009: 9.0p) per share.

 

 


2010

2009

2008

Earnings/(loss) per share

pence

pence

pence





Earnings/(loss) per share

9.1

(56.6)

(13.5)

Diluted earnings/(loss) per share

9.1

(56.6)

(13.5)

Diluted EPRA earnings per share

2.9

9.0

11.6

 

Earnings/(loss) per share calculations are based on the weighted average number of shares held in the year.  This is a different basis to the net asset value per share calculations which are based on the number of shares at 31 March 2010. 

 

In accordance with IAS 33 on Earnings per Share, no weighting adjustment has been made for share awards in existence during the years to 31 March 2009 and 31 March 2008 as a loss was made during that year.  Accordingly, the basic and diluted loss per share for these years are the same.

 

Diluted EPRA earnings per share excludes from earnings the IFRS effects of including the gain on sale and revaluation of investment properties (net of tax) and fair value movement on derivative financial instruments.

 

Consolidated balance sheet

 

Investment portfolio

 

During the year investment properties with a book value of £40.4m were sold.  No new properties were acquired (Clyde Shopping Centre is included in these accounts as an investment in joint ventures).  In addition, around £4.2m of capital expenditure was spent on refurbishing various office, industrial and retail buildings.  At 31 March 2010 there was a revaluation surplus, net of joint venture share, of £13.1m (2009: deficit £68.0m) on the investment portfolio.

 


2010

2009

2008

Investment portfolio

£000

£000

£000





Cost or valuation at 1 April

241,287

306,778

316,025

Additions at cost

4,192

16,011

31,601

Transferred from land, trading and development properties

-

1,514

-

Disposals

(40,438)

(9,005)

(6,250)

Joint venture share of revaluation

1,756

(6,006)

(2,044)

Revaluation

13,104

(68,005)

(32,554)

Cost or valuation at 31 March

219,901

241,287

306,778

 





Net asset values

 

The performance of the Group in the year to 31 March 2010 has increased equity shareholders funds, on which the net asset value per share is calculated, by £5.5m. This has led to a 1% increase in diluted net assets per share to 228p (2009: 226p).  Taking into account the directors' valuation of trading and development stock of £33m (2009: £45m), the diluted EPRA net assets per share decreased by 5% to 272p (2009: 286p).

 


2010

2009

2008

Net asset values per ordinary share

 

pence

pence

 

pence





Diluted

228

226

289

Adjusted diluted

241

242

306

Diluted EPRA

272

286

352

Diluted EPRA triple NAV

259

269

335

 

The net asset value per share calculations are included in Note 21 of this statement.

 

Borrowings and financial risk

 

The Group's sales of investment properties and development sites have decreased debt and, at 31 March 2010, net debt had decreased from £224.7m to £203.0m.  Taken with an increase in net assets of £5.5m, the decrease in net debt combined to decrease the Group's net gearing from 95% to 84%.

 

The fair value of the Group's investment, trading and development portfolio at 31 March 2010 was £435.4m (2009: £497.2m).  With net borrowings of £203.0m (2009: £224.7m) the ratio of net borrowings to the value of the property portfolio was 46.6% (2009: 45.2%).

 

At 31 March 2010 the Group had £92.6m (2009: £147.9m) of fixed rate borrowings with an average effective interest rate of 6.43% (2009: 6.31%) and an average length of 2.3 years (2009: 3.2 years), and £34m of interest rate caps at an average of 6.00% (2009: £110m at 6.73%).

 


2010

2009

2008

Net debt and gearing








Net debt

£203.0

£224.7m

£205.5m





Gearing

84%

95%

76%

 

The Group seeks to manage financial risk by ensuring that there is sufficient financial liquidity to meet foreseeable needs and to invest surplus cash safely and profitably.  At the year end, Helical had £8.2m (2009: £38.6m) of undrawn bank facilities and cash of £39.8m (2009: £72.8m).  In addition it had £32m (2009: £64m) of uncharged property on which the Group could borrow funds.

 

As at 2 June 2010, Helical's average interest rate was 4.51%.

 



Going Concern

 

The directors have reviewed the current and projected financial position of the Group making reasonable assumptions about future trading performance.

The key areas of sensitivity are:

 

·     timing and value of property sales

·     availability of loan finance and related cash flows

·     future property valuation and its impact on covenants and potential loan repayment

·     committed future expenditure

·     future rental income and potential bad debt

·     repayment timing and value of trade receivables

 

The forecast cashflows have been sensitised to eliminate those cash inflows which are less certain and to take account of a potential further deterioration of property valuations. From their review the directors believe that the Group has adequate resources to continue to be operational as a going concern for the foreseeable future.

 

 

 

Nigel McNair Scott

Finance Director

3 June 2010

 

 



Helical Bar plc

Unaudited Consolidated Income Statement

For the year to 31 March 2010

 



Year To

31 March

2010

Year To

31 March

2009


Notes

£000

£000


 



Revenue

2

67,354

81,770


 



Net rental income

3

14,151

17,682

Development property loss

 

(1,293)

(7,704)

Trading property loss

 

(10)

(514)

Share of results of joint ventures

 

3,745

1,846

Other operating income

 

26

6,752


 



Gross profit before net gain/(loss) on sale and revaluation of investment properties    

 

16,619

18,062


 



Net gain/(loss) on sale and revaluation of investment properties

4

8,195

(66,670)

Gain on sale of investments

 

-

1,892

Gross profit/(loss)

 

24,814

(46,716)





Administrative expenses

5

(8,680)

(8,090)


 



Operating profit/(loss)

 

16,134

(54,806)


 



Finance costs

6

(9,328)

(9,718)

Finance income

 

1,039

2,082

Change in fair value of derivative financial instruments

 

1,157

(13,412)

Foreign exchange (loss)/gain

 

(1,127)

3,999


 



Profit/(loss) before tax

 

7,875

(71,855)

Tax

7

1,711

18,359


 



Profit/(loss) after tax

 

9,586

(53,496)


 



- attributable to minority interests

 

(33)

143

- attributable to equity shareholders

 

9,619

(53,639)

Profit/(loss) for the year

 

9,586

(53,496)


 



Basic earnings/(loss) per share

8

9.1p

(56.6p)

Diluted earnings/(loss) per share

8

9.1p

(56.6p)

 



Helical Bar plc

Unaudited Consolidated Statement of Comprehensive Income

For the year to 31 March 2010

 

 

 

 

Year To

31 March

2010

£000

 

Year To

31 March

2009

£000




Profit /(loss) for the year

9,586

(53,496)




Other Comprehensive Income:-



Fair value movements on available for-sale-investments

2,962

4,142

Associated deferred tax on the fair value movements

(829)

(1,159)

Retranslation of net investments in foreign operations

(131)

(309)

Total comprehensive income and expense for the year

11,588

(50,822)

 



 

Helical Bar plc

Unaudited Consolidated Balance Sheet

At 31 March 2010

 


 

 

 

Notes

At

31 March

2010

£000

At

31 March

2009

£000





Non-current assets




Investment properties

9

219,901

241,287

Owner occupied property, plant and equipment        

10

1,638

1,745

Available-for-sale investments

11

13,325

13,310

Investment in joint ventures


26,384

7,924

Derivative financial instruments


1,944

-

Goodwill

12

16

30

Deferred tax asset

7

3,169

3,440



266,377

267,736

Current assets




Land, developments and trading   

properties

13

182,576

210,415

Available-for-sale investments

11

10,959

7,684

Trade and other receivables

14

39,789

41,459

Cash and cash equivalents

15

39,800

72,776

 


273,124

332,334

Total assets


539,501

600,070

 




Current liabilities




Trade payables and other payables

16

(43,651)

(51,215)

Borrowings

17

(72,459)

(48,155)

 


(116,110)

(99,370)

Non-current liabilities




Borrowings

17

(170,299)

(249,297)

Derivative financial instruments


(10,485)

(14,337)

 


(180,784)

(263,634)

Total liabilities


(296,894)

(363,004)

 




Net assets                 


242,607

237,066

 



 

Helical Bar plc

Unaudited Consolidated Balance Sheet

At 31 March 2010

 

 

 

 

 

Notes

At

31 March

2010

£000

At

31 March

2009

£000

Equity




 




Called-up share capital

18

1,339

1,336

Share premium account


70,828

70,378

Revaluation reserve


-

529

Capital redemption reserve


7,478

7,478

Other reserves


291

291

Retained earnings


162,547

158,494

Own shares held

20

-

(1,597)

Equity attributable to equity holders of the parent


242,483

236,909

Minority interests


124

157

Total equity


242,607

237,066

 




Net assets per share




 




Basic

21

228p

226p

Diluted

21

228p

226p

Adjusted Diluted

21

241p

242p

Diluted EPRA

21

272p

286p

 


Helical Bar plc

Unaudited Consolidated Cash Flow Statement

For the year to 31 March 2010


Year To

31 March

2010

Year To

31 March

2009


£000

£000

Cash flows from operating activities



Profit/(loss) before tax

7,875

(71,855)

Depreciation

334

321

Revaluation (gain)/loss on investment properties

(13,104)

68,005

Net interest payable

8,289

6,999

Gain on sale of investments

-

(1,892)

Loss/(gain) on sale of investment properties

4,909

(1,335)

(Gain)/loss on valuation of derivative financial instruments

(1,157)

13,412

Share based payment charge/(credit)

1,151

(1,363)

Share of results of joint ventures

(3,745)

(1,846)

Foreign exchange movement on financing activities

(1,153)

4,703

Other non-cash items

2

(448)

Cash flows from operations before changes in working capital

3,401

14,701

Change in trade and other receivables

358

3,503

Change in land, developments & trading properties

30,707

(23,632)

Change in trade and other payables

(11,555)

(8,688)

Cash inflow/(outflow) from operations

22,911

(14,116)

Finance costs

(12,345)

(16,992)

Finance income

1,231

2,497

Tax received

834

1,439

Tax paid

(77)

(331)


(10,357)

(13,387)

Cash flows from operating activities

12,554

(27,503)

Cash flows from investing activities



Purchase of investment property

(4,192)

(15,024)

Sale of investment property

36,704

10,340

Purchase of investments

-

(5,048)

Sale of investments

-

2,100

Investment in joint venture

(18,641)

-

Dividends from joint ventures

3,926

-

Cost of acquiring derivative financial instruments

(1,437)

-

Cost of cancelling interest rate swap

(3,202)

-

Purchase of shares by ESOP

-

(3,107)

Sale of plant and equipment

28

14

Purchase of  leasehold improvements, plant & equipment

(237)

(77)


12,949

(10,802)

Cash flows from financing activities



Issue of shares

453

27,972

Borrowings drawn down

13,739

93,250

Borrowings repaid

(67,923)

(23,101)

Equity dividends paid

(4,748)

(4,130)


(58,479)

93,991

Net increase in cash and cash equivalents

(32,976)

55,686

Cash and cash equivalents at 1 April

72,776

17,090

Cash and cash equivalents at 31 March

39,800

72,776

 

Helical Bar plc

Statement of Changes in Equity

For the year to 31 March 2010












 

Share

Capital

 

Share

premium

 

Revaluation

reserve

Capital

redemption

reserve

 

Other

reserves

      Retained earnings

Own

shares

held

 

Minority interest

 

 

Total


£000

£000

£000

£000

£000

£000

£000

£000

£000











1,222

42,520

57,072

7,478

291

163,911

(3,992)

157

268,659

Revaluation deficit

-

-

(56,360)

-

-

56,360

-

-

-

Realised on disposals

-

-

(183)

-

-

183

-

-

-

Total recognised expense

-

-

-

-

-

(50,822)

-

-

(50,822)

Dividends payable

-

-

-

-

-

(4,130)

-

-

(4,130)

Minority interests

-

-

-

-

-

(143)

-

-

(143)

Performance share plan

-

-

-

-

-

(1,363)

-

-

(1,363)

Purchase of shares

-

-

-

-

-

-

(3,107)

-

(3,107)

Own shares held

-

-

-

-

-

(5,502)

5,502

-

-

Issue of shares

114

27,858

-

-

-

-

-

-

27,972

At 31 March 2009

1,336

70,378

529

7,478

291

158,494

(1,597)

157

237,066

Revaluation surplus

-

-

13,104

-

-

(13,104)

-

-

-

Realised on disposals

-

-

(13,633)

-

-

13,633

-

-

-

Total recognised income

-

-

-

-

-

11,588

-

-

11,588

Dividends payable

-

-

-

-

-

(7,657)

-

-

(7,657)

Minority interests

-

-

-

-

-

33

-

(33)

-

Purchase of shares

-

-

-

-

-

-

6

-

6

Performance share plan

-

-

-

-

-

1,151

-

-

1,151

Own shares held

-

-

-

-

-

(1,591)

1,591

-

-

Issue of shares

3

450

-

-

-

-

-

-

453

As at 31 March 2010

1,339

70,828

-

7,478

291

162,547

-

124

242,607










 

The adjustment to retained earnings of £1,151,000 (2009: £1,363,000) adds back the share-based payments charge, in accordance with IFRS 2 Share-Based Payments. 

 

Notes:

Share capital - represents the nominal value of issued share capital.

Share premium - represents the excess of value of shares issued over their nominal value.

Revaluation reserve - represents the surplus of fair value of investment properties over their historic cost.

Capital redemption reserve - represents amounts paid to purchase issued shares for cancellation at their nominal value.

Retained earnings - represents the accumulated retained earnings of the Group.

Own shares held - relates to the shares purchased by the Helical Bar Employees' Share Ownership Plan Trust.

 



Unaudited Notes to the Preliminary Announcement

1. Basis of preparation

 

The financial information is abridged and does not constitute the Group's full financial statements for the years ended 31 March 2010 and 31 March 2009 from where the information has been derived. The Group's accounting policies are consistent with those applied in the year to 31 March 2009, amended to reflect any new Standards.  The key amendments to Standards and interpretations which are mandatory for the year ended 31 March 2010 are:

 

IAS 1 Presentation of Financial Statements (revised 2007)

IFRS 8 Operating Segments (effective 1 January 2009).

 

The financial statements for the year ended 31 March 2009 were prepared in accordance with International Financial Reporting Standards (IFRS) and have received an unqualified auditors' report which did not draw attention to any matters of emphasis and did not contain statements under s237 (2) or (3) of the Companies Act 1985.

 

The financial statements for the year to 31 March 2010 will be presented to the Members at the forthcoming Annual General Meeting.

 

2.    Revenue

 


Year To

31 March

2010

£000

Year To

31 March

2009

£000




Rental income

18,881

20,781

Development property income

47,822

54,097

Trading property sales

525

-

Other income

126

6,892


67,354

81,770

 

3.         Net rental income

 

 

Year To

31 March

2010

£000

Year To

31 March

2009

£000




Gross rental income

18,881

20,781

Rents payable

(12)

(12)

Property overheads

(3,732)

(2,394)

Third party share of net rental income

(986)

(693)

Net rental income

14,151

17,682

 

4.         Net gain/(loss) on sale and revaluation of investment properties

 


Year To

 31 March

2010

£000

Year To

31 March

2009

£000




Net proceeds from the sale of investment  

   properties

Book value (note 9)

Lease incentive and letting costs adjustment

 

36,704

(40,438)

(1,175)

 

10,340

(9,005)

-

(Loss)/gain on sale of investment properties

(4,909)

1,335

Gain/(loss) on revaluation on investment properties

13,104

(68,005)

Net gain/(loss) on sale and revaluation of investment properties

8,195

(66,670)

 

5.         Administrative expenses

 


Year To

 31 March

2010

£000

Year To

 31 March

2009

£000

Administrative expenses

8,680

8,090

Operating profit/(loss) is stated after:



Staff costs

4,597

4,951

Share-based payments charge/(credit)

1,151

(425)

Depreciation

334

321

 

Administrative expenses includes salaries in respect of the directors of £1,918,000 (2009: £2,007,500) and cash bonuses payable to directors of £nil (2009: £300,000).

 

6.         Finance costs


Year To

31 March

2010

£000

Year To

31 March

2009

£000




Interest payable on bank loans and overdrafts

10,956

15,890

Other interest payable and similar charges

696

362

Finance arrangement costs

872

321

Interest capitalised

(3,196)

(6,855)

Finance costs

9,328

9,718

 

7.         Taxation

 


Year To

31 March

2010

£000

Year To

31 March

2009

£000




The tax credit is based on the loss for the period and represents:

United Kingdom corporation tax at 28%

                       -   Group corporation tax

                       -   adjustments in respect of prior periods

 

 

-

(1,152)

 

 

-

(1,915)

Current tax credit

(1,152)

(1,915)




Deferred tax   -  capital allowances

                       -  other temporary differences

                       -  revaluation surpluses

52

(611)

-

480

(4,358)

(12,566)

Deferred tax

(559)

(16,444)

Tax on profit/loss

(1,711)

(18,359)

 

Deferred tax

 

Capital gains

-

-

Capital allowances

(3,257)

(3,205)

Other temporary differences

(1,278)

1,066

Tax losses

7,704

5,579

Deferred tax asset

3,169

3,440

 

 

8.         Earnings per share

 

The calculation of the basic earnings/(loss) per share is based on the earnings/(loss) attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year.  Shares held by the ESOP, which has waived its entitlement to receive dividends, are treated as cancelled for the purposes of this calculation.

 

The calculation of diluted earnings/(loss) per share is based on the basic earnings/(loss)  per share, adjusted to allow for the issue of shares and the post tax effect of dividends on the assumed exercise of all dilutive options.

 

The earnings/(loss) per share are calculated in accordance with IAS 33 and the best practice recommendations of the European Public Real Estate Association ("EPRA").

 

Reconciliations of the earnings/(loss) and weighted average number of shares used in the calculations are set out below.

 


Year To

31 March

2010

Year To

31 March

2009


000's

000's

Ordinary shares in issue

107,408

107,087

Weighting adjustment

(1,852)

(12,242)

Weighted average ordinary shares in issue for calculation of basic earnings per share

105,556

94,845

Weighting adjustments - for diluted earnings per share

700

-

Weighted average ordinary shares in issue for calculation of diluted earnings per share

106,256

94,845

Weighting adjustments - for diluted EPRA earnings per share

-

2,425

Weighted average ordinary shares in issue for calculation of diluted EPRA earnings per share

106,256

97,270




Profit/(loss) used for calculation of basic and diluted earnings per share

9,619

(53,639)




Basic earnings/(loss) per share

9.1p

(56.6p)

Diluted earnings/(loss) per share

9.1p

(56.6p)




Profit/(loss) used for calculation of basic and diluted earnings per share

9,619

(53,639)

Net (gain)/loss on sale and revaluation of investment properties

(8,195)

66,670

Fair value movement on derivative financial instruments

(1,157)

13,412

Gain on disposal of investments

-

(1,892)

Deferred tax on the above

2,853

(15,843)

Earnings used for calculation of diluted EPRA earnings per share

3,120

8,708




Diluted EPRA earnings per share

2.9p

9.0p

 

9.         Investment properties

 


Freehold

31.03.10

£000

Leasehold

31.03.10

£000

Total

31.03.10

£000

Freehold

31.03.09

£000

Leasehold

31.03.09

£000

Total

31.03.09

£000

Group







Fair value at 1 April

182,812

58,475

241,287

230,853

75,925

306,778

Additions at cost

3,853

339

4,192

14,159

1,852

16,011

Transfers from land, developments and trading properties

-

-

-

1,514

-

1,514

Disposals

(3,263)

(37,175)

(40,438)

(9,005)

-

(9,005)

Revaluation surplus/(deficit)

13,756

(652)

13,104

(49,273)

(18,732)

(68,005)

Joint venture share of revaluation

1,643

113

1,756

(5,436)

(570)

(6,006)

Fair value at 31 March

198,801

21,100

219,901

182,812

58,475

241,287

 

A disposal of the investment property portfolio at its stated fair value would crystallise a payment due to the Group's joint venture partners in respect of their share of the revaluation surplus of £1.7m (2009: £nil).  Investment properties exclude the Group's share of investment properties disclosed in investment in joint ventures of £45,300,000 (2009: nil)

 

Interest capitalised during the year in respect of the refurbishment of investment properties amounted to £nil (2009: £1,065,000).

 

Interest capitalised in respect of the refurbishment of investment properties is included in investment properties to the extent of £5,767,000 (2009: £6,205,000).

 

10.        Owner occupied property, plant and equipment

 


Short

leasehold

improvements

31.03.10

£000

Vehicles

and office

equipment

31.03.10

£000

 

 

Total

31.03.10

£000

Short

leasehold

improvements

31.03.09

£000

Vehicles

and office

equipment

31.03.09

£000

 

 

Total

31.03.09

£000

Cost at 1 April

2,071

554

2,625

2,033

587

2,620

Additions at cost

-

237

237

38

39

77

Disposals

-

(121)

(121)

-

(72)

(72)

Cost at 31 March

2,071

670

2,741

2,071

554

2,625

Depreciation at 1 April

518

362

880

328

285

613

Provision for the year

190

144

334

190

131

321

Eliminated on disposals

-

(111)

(111)

-

(54)

(54)

Depreciation at 31 March

708

395

1,103

518

362

880

Net book amount at 31 March

1,363

275

1,638

1,553

192

1,745

 

11.        Available for sale investments

 

 

Non-Current

£000

Current

£000

At 1 April 2009

Additions

Disposals

Fair value adjustments

13,310

-

-

15

7,684

338

(10)

2,947

At 31 March 2010

13,325

10,959

 

Non-current available-for-sale investment consists of Helical's stake in Quotient Bioscience Group Limited, a private biosciences company. 

 

Within current available-for-sale investments is money lent to a private property developer and a 20% equity investment in the company.

 

The Group has accounted for its interests as available-for-sale investments in accordance with IAS39 as it does not have significant influence over the operating and financial policies of either company. Both investments are held at their fair values.

 

12.        Goodwill

 

At

31 March

2010

£000

At

31 March

2009

£000

Cost at 1 April

Additions

1,515

-

1,515

-

Cost at 31 March

1,515

1,515

Impairment at 1 April

Impairment for the year

1,485

14

1,485

-

Impairment at 31 March

1,499

1,485




Fair value at 31 March

16

30

 

 

 

13.        Land, developments and trading properties

 

 

 

 

Cost


At

31 March

2010

£000

At

31 March

2009

£000

Development properties


182,303

209,537

Properties held as trading stock


273

878



182,576

210,415

The directors' valuation of trading and development stock showed a surplus of £33m above book value at 31 March 2010 (2009: £45m).

 

Interest capitalised in respect of the development of sites is included in stock to the extent of £8,999,000 (2009: £8,749,000).  Interest capitalised during the period in respect of development sites amounted to £3,196,000 (2009: £5,790,000). 

 

14.        Trade and other receivables

 


At

31 March

2010

£000

At

31 March

2009

£000

Trade receivables

12,316

19,001

Other receivables

12,826

16,917

Prepayments and accrued income

14,647

5,541


39,789

41,459

 

15.        Cash and cash equivalents

 


At

31 March

2010

£000

At

31 March

2009

£000

Rent deposits and cash held at managing agents

1,274

1,215

Cash deposits

38,526

71,561


39,800

72,776

                                       

16.        Trade payables and other payables

 


At

31 March

2010

£000

At

31 March

2009

£000




Trade payables

4,635

3,611

Other payables

9,857

15,702

Accruals and deferred income

29,159

31,902


43,651

51,215

 

17.        Borrowings

 

 

 

 

Bank overdraft and loans - maturity

At

31 March

2010

£000

At

31 March

2009

£000




Due within one year

72,459

48,155

Due after more than one year

170,299

249,297


242,758

297,452

 

 

 

 

Undrawn committed bank facilities

At

31 March

2010

£000

At

31 March

2009

£000

Expiring in one year or less

Expiring in more than one year but not more than two years

Expiring in more than two years

8,187

-

-

35,646

3,000

-


8,187

38,646

 

Interest Rates

%

Expiry

At

31 March

2010

£000

Fixed rate borrowings

-   swap rate plus bank margin

-   swap rate plus bank margin

-   swap rate plus bank margin

-   swap rate plus bank margin

-   swap rate plus bank margin

-   swap rate plus bank margin

-   swap rate plus bank margin

-   swap rate plus bank margin

-   swap rate plus bank margin

-   swap rate plus bank margin

 

3.555

8.295

5.650

6.040

5.330

7.150

6.240

5.290

6.555

6.270

 

Jun 11

Oct 14

Nov 10

Jan 11

Jun 11

Oct 12

   Dec 13

Mar 12

Aug 13

Oct 10

 

5,400

6,690

5,200

4,200

4,316

28,500

10,120

3,570

9,912

14,652

Weighted average

Floating rate borrowings

6.429

2.321

Jun 12

Jun 12

92,560

151,146

Total borrowings

Deferred arrangement costs



243,706

(948)




242,758

 

Floating rate borrowings bear interest at rates based on LIBOR.

 

Hedging

 

In addition to the fixed rates, borrowings are also hedged by the following financial instruments:

 

Instrument

Value

£000

Rate

%

Start

Expiry






Current





-   cap

30,000 - 40,950

6.000

May 2008

May 2013

-   floor

30,000 - 40,950

4.500

May 2008

May 2013

 

Gearing

At

31 March

2010

£000

At

31 March

2009

£000

Total borrowings

242,758

297,452

Cash

(39,800)

(72,776)

Net borrowings

202,958

224,676




Net assets

242,607

237,066




Gearing

84%

95%

 

Net borrowings exclude the Group's share of borrowings in joint ventures of £29,752,000 (2009: £5,644,000).

 

 

18.        Share capital

 


At

31 March

2010

£000

At

31 March

2009

£000




Authorised

39,577

39,577





39,577

39,577

The authorised share capital of the Company is £39,576,626.60 divided into ordinary shares of 1p each,  and deferred shares of 1/8p each

Allotted, called up and fully paid

 -   107,407,522 (2009: 107,087,012) ordinary shares of 1p
     each

 

1,074

 

1,071

-   212,145,300 deferred shares of 1/8 p each

265

265





1,339

1,336

 

As at 1 April 2009, the Company had 107,087,012 ordinary 1p shares in issue.  In the year to 31 March 2010 320,510 new ordinary 1p shares were issued as the result of share options being exercised.  At 31 March 2010 there were 107,407,522 ordinary 1p shares in issue.

 

Share options

 

At 31 March 2010 unexercised options over nil (31 March 2009: 320,510) new ordinary 1p shares in the Company and nil (31 March 2009: 1,057,095) purchased ordinary 1p shares held by the ESOP had been granted to directors and employees under the Company's share option schemes.  During the period, no new options were granted.

 

19.        Dividends

 


Year To

31 March

2010

£000

Year To

31 March

2009

£000




Attributable to equity share capital






Ordinary - 1st interim paid of 1.75p (2009: 1.75p) per share

              - 2nd interim paid on 1 April 2010 of 2.75p (2009: nil) per
                 share              

                - prior period final paid of 2.75p (2009: 4.50p) per share

1,851

2,909

2,897

1,640

-

2,490

Total dividends paid and payable 7.25p (2009 : 4.50p)

7,657

4,130

 

An interim dividend of 1.75p was paid on 23 December 2009 to shareholders on the register on 4 December 2009.  A second interim dividend of 2.75p was declared on 3 March 2010 and paid on 1 April 2010 to shareholders on the register on 12 March 2010.  At 31 March 2010 this dividend was included within current liabilities.  The final dividend, if approved at the AGM on 21 July 2010, will be paid on 23 July 2010 to shareholders on the register on 25 June 2010.  This final dividend, amounting to £265,000, has not been included as a liability at 31 March 2010, in accordance with IFRS.

 

20.       Own shares held

 

Following approval at the 1997 Annual General Meeting the Company established the Helical Bar Employees' Share Ownership Plan Trust (the "Trust") to be used as part of the remuneration arrangements for employees.  The purpose of the Trust is to facilitate and encourage the ownership of shares by or for the benefit of employees by the acquisition and distribution of shares in the Company.

 

The Trust purchases shares in the Company to satisfy the Company's obligations under its Share Option Schemes and Performance Share Plan.

 

At 31 March 2010, the Trust held 1,291,844 (31 March 2009: 2,338,904) ordinary 1p shares in Helical Bar plc.

 

At 31 March 2010 unexercised options over nil (2009: 1,057,095) ordinary 1p shares in Helical Bar plc had been granted over shares held by the trust.

 

At 31 March 2010 outstanding awards over 4,870,283 (2009: 4,738,900) ordinary 1p shares in Helical Bar plc had been made under the terms of the Performance Share Plan over shares held by the Trust.

 

21.        Net assets per share

 


 

 

At

31 March

2010

£000

At

31 March

2010

Number of Shares

000's

 

 

 

 

Pence per share

 

 

At

31 March

2009

£000

At

31 March

2009

Number of Shares

000's

 

 

 

 

Pence per share

Net asset value

242,607

107,408


237,066

107,087


Own shares held by ESOP


(1,292)



(2,339)


Less deferred shares

(265)



(265)



Basic net asset value

242,342

106,116

228

236,801

104,748

226

Unexercised share options

-

-


454

321


Diluted net asset value

242,342

106,116

228

237,255

105,069

226

- Fair value of financial instruments 

- Deferred tax

9,978

3,257



14,337

3,205



Adjusted diluted net asset value

- Fair value of trading properties

255,577

32,991

106,116

241

254,797

45,455

105,069

242

Diluted EPRA net asset value

288,568

106,116

272

300,252

105,069

286

- Fair value of financial instruments

(9,978)



(14,337)



- Deferred tax

(3,257)



(3,205)










 

Diluted Triple NAV

 

275,333

106,116

 

259

 

282,710

105,069

 

269

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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