Helical Bar plc
Registered Office
11-15 Farm Street
London, W1J 5RS
Tel: 020 7629 0113
Fax: 020 7408 1666
email: info@helical.co.uk
www.helical.co.uk
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Helical Bar plc
report & accounts
2012
fi nancial highlights
fi nancial calendar
Underlying profi t before tax, property
write downs and investment gains1
£8.6m
2011: £2.9m
Final proposed dividend per share
3.40p
2011: 3.15p
Year ended 31 March 2012
Annual General Meeting to be held 24 July 2012
Final ordinary dividend payable
26 July 2012
Half year ending 30 September 2012
Year ending 31 March 2013
Results and interim ordinary dividend announced November 2012
Interim ordinary dividend payable December 2012
Results and fi nal dividend announced May 2013
Final ordinary dividend payable July 2013
Diluted EPRA earnings/(loss)
per share2
3.4p
2011: (6.4p)
Diluted EPRA net asset value
per share3
250p
2011: 253p
IFRS net assets
£253.7m
2011: £255.4m
Portfolio valuation4
£572.6m
2011: £532.2m
1 Pre-tax profi t as adjusted for property write-downs and net gain on sale and revaluation of investment properties.
2 Calculated in accordance with IAS33 and the best practice recommendations of EPRA.
3 Calculated in accordance with the best practice recommendations of EPRA.
4 Includes the Group’s share of properties held in joint ventures and the surplus on directors’ valuation of trading and development stock.
Front cover: Barts Square, London EC1
helical bar plc 2012
advisors
Registrars
Bankers
Joint stockbrokers
Auditors
Merchant bankers
Solicitors
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Aareal Bank AG
Allied Irish Bank
Barclays Bank plc
Clydesdale Bank
HSBC plc
Nationwide
The Royal Bank of Scotland Group plc
JP Morgan Cazenove Limited
10 Aldermanbury
London EC2V 7RF
Oriel Securities Limited
150 Cheapside
London EC2V 6ET
Grant Thornton UK LLP
Grant Thornton House
Melton Street
Euston Square
London NW1 2EP
Lazard Ltd
50 Stratton Street
London W1J 8LL
Ashurst
Clifford Chance
Lawrence Graham
Linklaters
Lovells
Mishcon de Reya
Nabarro
Norton Rose
Semple Fraser
Wragge & Co
109
fi nancial calendar/ advisors helical bar plc 2012
contents
directors’ report – annual review
chairman’s statement
chief executive’s statement
strategy and performance
02 helical at a glance
04
05
06
11 business review
12 events during the year
14 development programme
investment portfolio overview
investment portfolio statistics
24
25
28 principal investment properties
32 fi nancial review
36
corporate responsibility
directors’ report – governance
41
45
46
47
49
corporate governance review
letter from the chairman of the
nominations committee
report of the nominations committee
the board of directors and senior
management
letter from the chairman of the
remuneration committee
50 directors’ remuneration report
57
58
report of the audit committee
report of the directors
fi nancial statements
61
62
63
64
66
report of independent auditor
consolidated income statement
consolidated statement of
comprehensive income
group and company balance sheets
group and company cash fl ow
statements
67
group and company statements of
changes in equity
68 notes to the fi nancial statements
99
ten year review
investor information
101 appendix I – property portfolio
104 appendix II – risk register
107 investor information
108 glossary of terms
109 fi nancial calendar
109 advisors
contents helical bar plc 2012
2012
01
40
60
100
helical at a glance
02
Helical Bar is a property
development and investment
company.
Our aim is to make excellent returns
for our shareholders (which include
the management team who own
16% of the company) through a wide
variety of high margin activities.
While our core areas include London
offi ce and mixed use development,
we are able to deploy capital to
whichever part of the property market
we believe offers the best returns
at different points in the cycle.
Central London development
Key projects
Barts Square, London EC1
200 Aldersgate, London EC1
Mitre Square, London EC3
West London development
Key projects
White City, London W12
Hammersmith, London W6
Fulham Wharf, London SW6
Retail development
Key projects
Parkgate, Shirley
Tyseley, Birmingham
Europa Centralna, Poland
directors report - review helical bar plc 2012
9.3
-1.7
3.4
9.9
3.9
36.7
4.7
13.0
20.8
Trading and development
portfolio (Helical’s share)
Project type
Book
value
£m
Fair
value
£m
Surplus Equity
(from
fair
over
book
value
£m
value) Equity
%
£m
London offi ce
2.6
8.6
Provincial offi ce
10.3
10.4
Industrial
6.2
6.2
In town retail
10.0
11.3
Out of town retail
3.6
3.6
6.0
0.1
–
1.3
–
8.6
-1.6
3.1
9.2
3.6
Retirement villages
60.1
73.9
13.8
34.1
Change of use
Mixed use
Poland
Total
4.4
4.6
42.0
6.4
15.1
42.8
2.0
10.5
0.8
4.4
12.1
19.3
143.8
178.3
34.5
92.8
100.0
Note: the table above includes the Group’s share of development properties held
in joint ventures.
3.2 acres
Barts Square site
1.5m sq ft
Size of mixed use scheme at White City
Oct 2012
Expected completion date of Europa Centralna construction
Our portfolio – how we invest our capital
Overall portfolio split
Investment portfolio
Trading and development
portfolio
03
Investment
Trading and development
73%
27%
London offi ces
In town retail
Out of town retail
Industrial
Other
30%
57%
4%
4%
5%
Retirement village
Poland
Mixed use
In town retail
London offi ce
Other
37%
21%
13%
10%
9%
10%
London investment
Key properties
Chiswick, London W4
Battersea, London SW8
Hammersmith, London W6
Shepherds Building, London W14
Retail investment
Key properties
The Morgan Quarter, Cardiff
Clyde Shopping Centre, Clydebank
Corby Town Centre, Corby
Retirement villages
Key projects
Bramshott Place, Liphook
Durrants Village, Faygate
Maudslay Park, Great Alne
St Loye’s College, Exeter
1%
Vacancy rate at Shepherds Building
2.0m sq ft
Of retail investment space
744 units
In our retirement village programme
directors report - review helical bar plc 2012
Oct 2012
chairman’s statement
04
Helical Bar plc returned to profi tability in the year to 31 March 2012
and is poised to continue its upwards progress, with a number of
exciting development schemes approaching realisation, backed up by
sound fi nances and an investment portfolio generating a signifi cant
surplus over costs. This has been achieved against a background
of signifi cant economic uncertainty and I am confi dent that the Group
is well prepared for the strong headwinds approaching from Europe.
Michael Slade reports fully on the results for the year and the
prospects for the Group in his Chief Executive’s Statement.
As Chairman of the Nominations Committee, I have
reported in detail on page 45 of this Annual Report
regarding the present and proposed future constitution
of your Board of Directors. Most importantly, I have
asked Michael Slade to consider continuing in his
current position as Chief Executive for a further fi ve
years and am pleased that he has indicated his
willingness and enthusiasm to do so.
As Nigel will not be regarded as independent, the
Committee determined that it is essential that the
Board be strengthened by the appointment of two
new independent non-executive directors. After an
extensive search using external consultants, and
having interviewed a number of strong candidates,
I am pleased that we have identifi ed two excellent
individuals in Richard Gillingwater, who will become
the Board’s Senior Independent Director, and will
serve on all the Board’s committees, and Richard
Grant, who will become the Chairman of the Audit
Committee and will serve on the other two
committees. Both individuals will be appointed to the
Board immediately following the AGM.
In June 2011, Duncan Walker was promoted to the Board
as an executive director and Michael O’Donnell was
appointed as an independent non-executive director.
Having been on the Board of Helical for almost 19 years,
I intend to step down at the conclusion of this year’s
Annual General Meeting (“AGM”). My fellow long-
serving non-executive directors, Antony Beevor and
Wilf Weeks will also step down at the same time. I would
very much like to thank them for their substantial
contribution to your Company for many years and
particularly to Antony for his masterful management
of the Audit Committee.
Nigel McNair Scott, Finance Director, has been on the
Board of the Company since 1985 and has also indicated
that he wishes to step down as Finance Director from
the conclusion of the AGM. I am, however, pleased
that Nigel has accepted the request of the Nominations
Committee to continue his close involvement with the
Group and be appointed Chairman following my
retirement. Tim Murphy, who joined the Group in 1994
and has worked alongside Nigel since then, will be
promoted to Finance Director immediately following
the AGM.
directors report - review helical bar plc 2012
It has been a privilege to serve on this exceptional
Company’s Board for almost 19 years and to be
Chairman for seven years. I shall be sad to relinquish
my association with such a dynamic and successful
team of people after so long. However, I believe that
the Group, the executives and the portfolio of
investment properties and developments are poised
for a successful future which should be enhanced
by a refreshed Board and a new Chairman.
Giles Weaver,
Chairman
20 June 2012
chief executive’s
statement
In the year to 31 March 2012 we continued the process of
rebalancing our portfolio between income producing investment
assets and non-income producing development sites. In the
economic environment we fi nd ourselves in today, we believe this
will help deliver long term shareholder value through combining
the twin drivers of an investment portfolio generating signifi cant
cash surpluses and a London centric development programme.
Applied together, these portfolios offer defensive qualities much
needed in this uncertain world, whilst providing the potential
to deliver outperformance in the future.
05
Strategy
Our prime objective is to maximise returns for shareholders through
income returns, development and trading profi ts and capital growth.
Our strategy for achieving this is to:
• Maintain and expand our investment portfolio, providing a blend of high
yielding retail, offi ce and industrial property which offers considerable
opportunity to increase income and enhance capital values through
proactive asset management and skilful stock selection;
• Have circa 75% of our gross property assets in the investment portfolio
creating positive net cash fl ow for the business which exceeds our net
fi nancing costs, administration costs and dividends;
• Carry out London based redevelopments, whether new build or
refurbishments, creating value through land assembly, planning and
implementation in the offi ce, residential, mixed use and retail sectors;
• Carry out pre-let regional foodstore and retail developments;
• Maximise returns by minimising the use of equity in development
situations; and,
• Reduce exposure to non-core assets i.e. non-UK assets and
retirement villages.
Progress
During the year we made signifi cant progress in each of these key strategic
areas. We have sold £50m of investment assets and £26m of development
sites, recovered £16m of cash through the sale of 50 per cent of our retail
development at Gliwice in Poland and re-cycled these proceeds in over
£100m of investment assets, increasing our annualised net rental income
from £23m to circa £26m. We have also obtained over 850,000 sq ft of
planning permissions at our offi ce development at Mitre Square, our
foodstore scheme at Fulham Wharf, our retail schemes at Shirley and
Tyseley and our industrial scheme at Stockport and for over 850 residential
units at Fulham Wharf, Shirley and our retirement villages at Great Alne,
Milton and Exeter. More recently, we have submitted a planning application
for our major mixed use scheme at Barts Square and intend to submit a
planning application in respect of our scheme at White City later this summer.
The impact of this activity is clearly illustrated in the annual results for the
year to 31 March 2012, with a 29% increase in the Group’s share of net
rental income to £22.9m (2011: £17.8m), a development profi t of £0.7m
(2011: loss of £16.6m), a net gain on the sale and revaluation of the
investment portfolio of £3.3m (2011: £7.5m) and a pre-tax profi t of £7.4m
(2011: loss of £6.3m). EPRA earnings per share were 3.4p (2011: loss of
6.4p). This return to profi tability encourages us to propose an increased
fi nal dividend of 3.40p (2011: 3.15p) per share, up 8% on 2011, taking
the total dividend to 5.15p (2011: 4.90p). Our property portfolio delivered
an ungeared total return of 5.6% (2011: 2.7%). EPRA net asset value per
share fell marginally to 250p (2011: 253p).
Future
We live in a world where the news from Europe is dominating the
headlines with daily warnings of the potential consequences of the impact
of a collapsing Eurozone economy. Whatever the end result, there will be
repercussions on the UK economy and our focus is on ensuring that the
Group is well placed to ride out the storm that seems to be gathering.
We have performed strongly over the year and the continued effort to
address the imbalance in our business by increasing the Group’s weighting
towards income producing properties has been vindicated by Helical’s
return to profi tability. Our ability to outperform our peers in the future will
depend upon the strength of our development pipeline and it is that part
of the business that offers the greatest opportunity for growth. We are
increasingly redirecting our hard earned equity to London and the South-
East, markets which currently represent 47% of our portfolio. The next
few years are all about Central London and happily that is where we hold
our most exciting assets. The prospects for substantial profi ts in respect
of our London and retail developments provide cause for optimism for
the future performance of the Group.
Michael Slade,
Chief Executive
20 June 2012
directors report- review helical bar plc 2012
strategy and
performance
Investment strategy
The investment portfolio, which is mainly let
and income producing, has two main purposes:
06
• To provide a steady income stream to cover overheads, dividends and
interest;
• To produce above average capital growth over the cycle to contribute
to growth in the Group’s net asset value.
We seek to achieve these aims through careful, disciplined stock picking,
generally of multi-let London offi ces, shopping centres, industrial estates
and mixed portfolios. Our key aim is to be confi dent that there is
sustainable demand from occupiers for all of our assets.
We frequently reposition our properties through signifi cant refurbishment
or extensions. We work closely with our tenants to maintain maximum
occupancy and these relationships often lead to opportunities to increase
value through re-gearing leases or moving tenants within a building as
they expand or contract. Finally, at certain points in the cycle we may buy
entirely vacant buildings (such as the Morgans, Cardiff or Shepherds
Building, London W14) with a view to carrying out a major refurbishment,
where we are confi dent that the occupational market is strong enough to
allow the whole building to be let quickly.
Development strategy
We employ a wide variety of approaches in our
development activities. The principal aim is to
be ‘equity lean’ to maximise our share of
profi ts by leveraging our capital employed and
managing the risks inherent in the
development process given the size of our
balance sheet. A summary of the alternative
ways of participating in development schemes
is as follows:
• Participate in profi t share situations where no equity is required. We will
minimise our ongoing fee to maximise our profi t share so that our
interests are completely aligned with our partners e.g. Fulham Wharf
and 200 Aldersgate.
• Reduce up front equity required by entering into conditional contracts
or options e.g. Mitre Square, where we have entered into conditional
contracts, and Helical Retail.
• Co-investment alongside a larger partner where we have a minority
stake e.g. Barts Square, where we will receive a “waterfall” above a
hurdle which skews super profi t towards Helical; and White City, where
our equity contribution entitles us to an enhanced profi t share.
• Traditional forward funding. This requires the institution to want the
cost overrun risk to be covered by the developer in return for a
commensurate profi t participation.
Our portfolio by equity invested
Scotland 7%
Wales 12%
South East 20%
London 27%
Midlands 23%
North 2%
Poland 6%
Other 3%
47%
of Helical’s equity is
deployed in London
and the South East
directors report - review helical bar plc 2012
strategy and
performance
How is directors’ remuneration
linked to the Group’s strategy?
The Group’s executive remuneration policy
is designed to ensure that Executive Directors
and senior management are provided with
appropriate incentives to encourage enhanced
performance and are, in a fair and responsible
manner, rewarded for their individual
contributions to the success of the Group.
The remuneration packages of individual directors are structured so that
the performance related elements form a signifi cant proportion of the total
and are designed to align their interests with those of the shareholders.
Share incentives are designed so that they recognise the long-term
growth of the Group. The performance periods are longer term,
being three to fi ve years, and participants receive shares in Helical
if performance criteria are met. Share incentive schemes are also
designed to encourage long term investment in Helical by the directors.
Further details of the remuneration of directors can be found in the
directors’ remuneration report on page 50.
How is corporate and social
responsibility linked to this
strategy?
Helical recognises that our business activities
impact on the environment and the wider
communities in which we operate.
We are aware of the infl uence we can exert through the implementation
of responsible environmental and social practices via our partners,
contractors and suppliers.
An endorsement of Helical’s commitment to managing environment and
social impacts is our continued listing in the FTSE4Good Index. The
FTSE4Good Index measures the performance of companies that meet
globally recognised corporate responsibility standards and facilitates
investment in those companies. Maintaining listed status on this Index
remains a key priority for Helical, and informs our evolving approach to
Corporate Responsibility.
Further details of the Group’s impact on the environment and the wider
communities can be found in the Corporate Responsibility Report on
page 36.
07
What is our risk strategy?
Risk is an integral part of any Group’s
business activities and Helical’s ability to
identify, assess, monitor and manage each
risk to which it is exposed is fundamental
to its fi nancial stability, current and future
fi nancial performance and reputation.
Risk management starts at Board level where the Directors set
the overall risk appetite of the Group and the individual risk policies.
These risk policies are the framework used by Helical’s management
to run the business.
Part of the management’s role is to act within these policies and
to report to the Board on how these policies are being operated.
The Group’s risk appetite and specifi c risk policies are continually
assessed by the Board to ensure that they are appropriate and consistent
with the Group’s overall strategy and the external market conditions.
The effectiveness of the Group’s risk management strategy is reviewed
annually by the Directors.
The principal risks faced by the Group are:
Strategic risk
The main strategic risks the Group face are that its strategy is inconsistent
with market conditions and it has an inappropriate capital structure.
Financial risks
The Group is vulnerable to a number of fi nancial risks due to the way in
which it is funded. The Group has a signifi cant level of cash and debt and
as such is subject to the following fi nancial risks:
Risk
Interest rate risk
The Group’s profi ts are impacted High proportion of debt
by increases in interest rates
How the risk is managed
is either at fi xed interest rates
or capped interest rates
Liquidity risk
The Group doesn’t have the
ability to access cash as required
The Group has signifi cant undrawn
committed bank facilities and cash
Short and long-term cash
forecasts are frequently monitored
by management
Loan covenants are continually
monitored
Credit risks
Helical’s ability to borrow reduces Helical borrows from a number
due to a deterioration in its
relationships with lenders
of institutions and has good
relationships with its bankers
Tenant failures impact on the
Group’s profi tability
Ensure that no tenant provides
a disproportionate share of rental
income
directors report- review helical bar plc 2012
strategy and performance
The Morgan Quarter
220,000 sq ft of prime
retail space in the centre
of Cardiff.
08
Development risk
The Group derives a signifi cant part of its results from development
activity. Development profi ts are more likely to be subject to fl uctuation
due to external factors as they are more opportunistic in nature. Development
risks include: changes in planning legislation, diffi culty in managing
current developments and a scarcity in future development opportunities.
Helical has an experienced development team with an excellent
track record and a well established network of joint venture partners,
contractors and professional advisors. Helical has no set formula for
managing its developments and delivers development projects using
our own capital, bringing in joint venture partners and forward funding
development projects.
People risk
Our employees are vital to the success of our business. The retention
and incentivisation of our staff is of great importance to Helical and
executive remuneration packages are designed to attract, motivate and
retain directors of the calibre necessary to maintain the Group’s position
as a market leader and to reward them for enhancing shareholder value
and returns. We evaluate the training needs of each employee in line with
business objectives.
Further details on Helical’s risk management can be found in Appendix II
on pages 104 to 106.
directors report - review helical bar plc 2012
09
Performance
A property company’s share price should refl ect
growth in net assets per share. Our Group’s main
objective is to maximise growth in assets from
increases in investment portfolio values and
from retained earnings from other property
related activities.
Key performance indicators and benchmarks
We incentivise management to outperform the Group’s competitors by setting
the right levels for performance indicators against which rewards are
measured. We also design our remuneration packages to align management’s
interests with shareholders’ aspirations. Key to this is the monitoring and
reporting against identifi able performance targets and benchmarks. For a
number of years we have reported on these, the most important of which are:
Investment Property Databank
The Investment Property Databank (“IPD”) produces a number of
independent benchmarks of property returns which are regarded as
the main industry indices.
IPD has compared the ungeared performance of Helical’s total property
portfolio against that of portfolios within IPD for the last 20 years. The
Group’s annual performance target is to exceed the top quartile of the
IPD database. Helical’s ungeared performance for the year to 31 March
2012 was 5.6% (2011: 2.7%) compared to the IPD median benchmark of
6.4% (2011: 11.7%) and upper quartile benchmark of 6.9% (2011: 12.1%).
As referred to in the Chairman’s Statement, the year to 31 March 2012
was a period during which the Group continued to transform its property
holdings and this has had an impact on performance in the year.
However, over fi ve, ten and twenty years the Group’s property portfolio
continued to outperform the IPD benchmark.
Net asset value
Net asset value per share represents the share of net assets attributable
to each ordinary share. Whilst the basic and diluted net asset per share
calculations provide a guide to performance the property industry prefers
to use an adjusted diluted net asset per share. The adjustments
necessary to arrive at this fi gure are shown in note 32 to these accounts.
Management is incentivised to exceed 15% p.a. growth in net asset value
per share. The adjusted diluted net asset value per share, excluding trading
stock surplus, at 31 March 2012 was 221p (2011: 225p).
Including the surplus on valuation of trading and development stock, the
diluted EPRA net asset value per share at 31 March 2012 was 250p (2011:
253p). Diluted EPRA triple net asset value per share was 246p (2011: 246p).
Other key performance indicators include:
• a surplus of net rental income over fi nance costs, overheads
and dividends;
• staff retention and average length of service; and
• inclusion in the FTSE4Good Index.
Total Shareholder Return
Total Shareholder Return (“TSR”) measures the return to shareholders
from share price movements and dividend income and is used to
compare returns between companies listed on the London Stock
Exchange. Helical’s TSR for the year to 31 March 2012 was -28.4%
(2011: –19.3%) compared to the median of the listed real estate sector of
-3.4% (2011: 12.6%).
However, over fi ve, ten, fi fteen, twenty and twenty-fi ve years Helical’s TSR
has outperformed the Listed Real Estate Sector Index as shown below.
Helical Bar portfolio unleveraged returns to March 2012
Helical
IPD
Helical’s Percentile Rank
1 yr
%pa
5.6
6.4
53
2 yrs
%pa
4.1
9.0
88
3 yrs
%pa
5.5
11.7
91
5 yrs
%pa
1.6
-1.1
8
10 yrs
%pa
10.5
6.7
4
20 yrs
%pa
14.6
8.7
1
Source: Investment Property Databank.
Helical’s trading & development portfolio (25% of gross assets as measured by IPD) is shown in IPD at the lower of book cost or fair value and uplifts are only included on the sale of an asset.
Total Gross Shareholder Return
Performance measured over
Total Returns
Helical Bar plc
UK Equity Market
Listed Real Estate Sector Index
Direct Property - monthly data
1 year
%pa
-28.4%
1.4%
-3.4%
6.6%
3 years
%pa
-11.4%
18.8%
19.4%
11.2%
5 years
%pa
-13.7%
1.8%
-14.7%
-1.8%
10 years
%pa
15 years
%pa
20 years
%pa
25 years
%pa
3.3%
5.2%
2.5%
6.5%
9.8%
5.7%
3.7%
8.2%
17.0%
11.7%
8.5%
7.3%
8.4%
8.4%
5.0%
8.8%
1
2
3
4
1 Growth over 1 year, 3 years etc to 31/03/12
2 Growth in FTSE All-Share Return Index over 1 year, 3 years etc to 31/03/12
3 Growth in FTSE 350 Real Estate Super Sector Return Index over 1 year, 3 years, 5 years and 10 years to 31/03/12. For data prior to 30 September 1999 FTSE All Share Real Estate Sector Index has been used.
4 Growth in Total Return of IPD UK Monthly Index (All Property) over 1 year, 3 years etc to 31/03/12
Source: New Bridge Street
directors report- review helical bar plc 2012
The next few years are all about Central
London and happily that is where we
hold our most exciting assets.
10
business review
12 events during the year
14 development programme
central london
west london
retail
retirement villages
24 investment portfolio overview
portfolio statistics
retail
central london offi ces
11
200 Aldersgate, London EC1
Helical is acting as a development
manager for this 370,000 sq ft
scheme.
business review helical bar plc 2012
events during the year
12
In June planning consent for a
new building of 273,000 sq ft NIA
of offi ces and 3,000 sq ft of retail/
restaurant was formally granted
at Mitre Square, London EC3.
Planning consent was granted
for a 100,000 sq ft supermarket
and 463 residential units on
behalf of Sainsbury’s at Fulham
Wharf, London SW6.
Planning permissions
850,000 sq ft of planning permissions
We have obtained over 850,000 sq ft of planning permissions for commercial or
mixed use at:
Sales
During the year we sold £50m of investment properties
realising a small loss below their March 2011 values.
Properties sold included:
• Mitre Square, London EC3 (offi ce)
• Fulham Wharf, London SW6 (foodstore/residential)
• Parkgate, Shirley, West Midlands (foodstore/retail/residential)
• Tyseley, Birmingham (foodstore/retail)
• Stockport, Greater Manchester (industrial)
and permission for residential or retirement village use at:
• Great Alne, Warwickshire
• Milton, Cambridge
• Exeter
Planning applications
In February 2012, we submitted a planning application for a new urban mixed use
quarter at Barts Square, London EC1, integrating this historic location into a high
quality offi ce, residential and retail scheme.
• Westgate, Aldridge
• Hawtin Park, Blackwood
• Queens Walk, East Grinstead
• Waterfront Business Park, Fleet
• Abbot Works, Hailsham
• Southwark Street, London
• Motherwell Food Park, Motherwell
• Standard Industrial Estate, Woolwich
Additionally we have sold £26m of development sites including
retirement village units at our scheme at Bramshott Place,
Liphook and the remaining units at our industrial scheme in
Southall. We have also recovered £16m of cash through the
sale of 50% of our retail development in Europa Centralna,
Poland.
business review helical bar plc 2012
In October we acquired 700,000 sq ft
of retail space in Corby Town
Centre at an 8.0% net initial yield.
Acquisitions
During the year we purchased more than £100m of investment assets acquiring:
• Corby Town Centre for £70m in October 2011
• Town Square, Basildon for £11m in June 2011
• The Powerhouse, Chiswick for £4m in November 2011
• Broadway House, Hammersmith for £14m in February 2012
13
We acquired Broadway House,
Hammersmith in February for
£14.1m refl ecting a net initial
yield of 5.7% and a targeted
reversionary yield of 8.7%.
Financing
During the year, the Group entered into a number of new bank
facilities totalling £130m, which were used to refi nance existing
assets and fund its purchase of new investment properties.
The principal new facility was a fi ve year £100m revolving
credit facility with The Royal Bank of Scotland plc.
The Group also entered into new investment facilities with
Barclays enabling it to acquire properties in Newmarket and
Hammersmith and, since the year end, refi nanced its
investment at Shepherds Building, Shepherds Bush in a new
three year facility.
HSBC provided a development facility enabling our retirement
village at Durrants Village to be built out. In addition, new
investment facilities were agreed with Nationwide and
Clydesdale Bank during the year.
business review helical bar plc 2012
development
programme
We employ a wide variety of approaches in our
development activities. The principal aim is to be
‘equity lean’ to maximise our share of profi ts by
leveraging our capital employed and managing
the risks inherent in the development process
given the size of our balance sheet.
14
Profi ts from the Group’s development programme
of £5.2m (2011: losses of £1.7m) were offset by
provisions of £4.5m (2011: £14.9m) made against
the carrying value of development stock. Profi ts
of £2.1m were generated at our retirement village
scheme at Bramshott Place, Liphook, and our
offi ce development in Crawley (£0.5m) and
development management fees received in
respect of Fulham Wharf, 200 Aldersgate and
Barts Square, totalling £2.1m. However, we wrote
down a number of sites to their net realisable
values and these provisions, totalling £4.5m,
reduced the net development profi ts to £0.7m.
By equity – Helical’s share
21%
poland
6%
other
9%
london
offi ces
13%
mixed use
37%
retirement
villages
14%
retail
200 Aldersgate
Barts Square
Mitre Square
White City
Hammersmith
Fulham Wharf
West London
Central London
business review helical bar plc 2012
development programme
central london
The focus of the Group
over the last year has
been on those schemes
recently completed or
under construction,
letting up vacant space
and progressing a small
number of major schemes
for the future.
14%
15
200 Aldersgate,
London EC1
Originally developed in the late 1980’s, this
370,000 sq ft offi ce building had remained
vacant since Clifford Chance left for Canary
Wharf in 2005. In 2010, we were appointed
under an asset and development management
agreement by the owners of the building to
advise on a refurbishment and re-letting
programme. We have refreshed and re-clad
parts of the building, creating a “vertical village”
for offi ce users.
Having completed the works in November
2010 the building was launched in January
2011 and since then we have completed
twelve offi ce lettings totalling 112,000 sq ft.
In addition we have let 35,000 sq ft of
basement to Virgin Active who have
opened a new fl agship Classic Club gym.
The remaining space continues to attract
interest from potential tenants and we are
optimistic that there will be further letting
success in 2012.
Upon the completion of a successful letting
programme and subsequent sale of the
building by the current owners, we will receive
a development management profi t share to
supplement the annual fee that we currently
receive.
business review helical bar plc 2012
Central London
A 273,000 sq ft offi ce
scheme with planning
permission
16
business review helical bar plc 2012
development programme
central london
17
Mitre Square,
London EC3
At Mitre Square, London EC3 we have
signed agreements to purchase two
adjoining sites from the City of London
and SFL2 Limited (previously Ansbacher).
The S.106 agreement which enabled the
planning permission to be issued was
signed last June. In addition we have
been working with the City to obtain
a Section 237 TCPA 1990 to overcome
any injunctable rights to light. We now
intend to proceed with the demolition
of the existing buildings to facilitate the
construction of a new building comprising
offi ces of 273,000 sq ft NIA and 3,000 sq ft
of retail/restaurant use. This construction
will not commence until a substantial
pre-let is agreed or a forward funding
is obtained.
business review helical bar plc 2012
property development
development programme
central london
central london
18
Barts Square,
London EC1
In joint venture with The Baupost Group LLC
(Baupost 66.7%, Helical 33.3%) we own the
freehold interest in land and buildings at
Bartholomew Close, Little Britain and Montague
Street, a 3.2 acre site adjacent to the new
Barts Hospital and just south of Smithfi eld
Market. The current buildings comprise
420,000 sq ft let to the NHS for circa £3.5m
per annum on a number of short term leases
that expire between 2014 and 2016. In February
2012 we submitted a planning application for
a new urban mixed use quarter integrating this
historic location into a high quality offi ce,
residential and retail scheme. The proposed
scheme seeks to retain some of the existing
buildings and complement them with a
sympathetic redevelopment of the site which
will comprise circa 226,000 sq ft NIA of offi ces,
202,000 sq ft NIA of residential comprising
216 apartments and 24,000 sq ft of retail/
restaurant use. We are hopeful that planning
permission will be obtained by the end of
2012. We estimate a total development value
of circa £460m.
business review helical bar plc 2012
A 3.2 acre site in
the heart of the City
19
business review helical bar plc 2012
development programme
west london
20
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 submitted a planning
application in November 2010 for new council
offi ces, a foodstore and restaurants around a
new public square, 300 new homes and a new
public footbridge across the Great West Road,
re-connecting Hammersmith Town Centre to the
River Thames and Furnival Gardens. A resolution
to grant planning consent was obtained in
November 2011, but its referral to the Mayor
was withdrawn pending further discussions
with the Greater London Authority.
business review helical bar plc 2012
White City,
London W12
At White City we intend submitting an outline
planning application in July 2012 for a residential
led mixed use scheme immediately adjacent to
White City underground station. The Eric Parry
designed master plan comprises c. 1.25 million
sq ft of residential, 200,000 sq ft of commercial
and 70,000 sq ft of retail/leisure/community
uses. The landscaping proposals include the
creation of a new bridge link from Wood Lane
opening out into an urban square surrounded
by local retailers and cafes. A large publically
accessible garden square will also be created
together with private communal courtyard
gardens for the residents. Assuming planning
consent is granted by the end of 2012, we hope
to be in a position to make a start on site at the
end of 2013.
development programme
21
Fulham Wharf,
London SW6
The Hub,
Pacifi c Quay, Glasgow
At Fulham Wharf we secured, on behalf of
landowner Sainsbury’s, planning permission for
a new 100,000 sq ft foodstore, together with
463 residential units (590,000 sq ft) and 11,000
sq ft of restaurant/retail/community use at Sands
End in Fulham. Helical has received a fee of
£1.5m for obtaining planning permission and
will receive a profi t share on the sale of the site,
which is expected to be completed in June
2012. This profi t share will be paid when
Sainsbury’s receive their monies from the
sale of the site.
The Hub, Pacifi c Quay, Glasgow was completed
in 2009. This 60,000 sq ft building offers fl exible
offi ce 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. We continue to make
progress, albeit slowly, in letting the building.
Industrial development
We have now sold virtually all of our industrial
developments. Sales of £3.3m have been
achieved for the remaining units at Southall
during the year. Since the year end we have
conditionally exchanged to sell all the land at
Stockport for £4.5m with completion due over
the course of this fi nancial year. This sale follows
completion of all infrastructure works and a
revised planning consent for a car dealership.
Following the sale of Stockport, our only
remaining industrial development is at Hailsham
where we hope to sell the remaining units by the
end of the year.
business review helical bar plc 2012
development programme
retail
22
Parkgate
Shirley, West Midlands
Tyseley
Birmingham
Europa Centralna
Gliwice
At Parkgate, Shirley we are due to commence
the construction of an 85,000 sq ft Asda
supermarket, 72,000 sq ft of retail and circa
135 apartments and townhouses. The £70m
project is expected to complete in spring 2014.
Cortonwood
A planning application is to be submitted in
summer 2012 for a 96,000 sq ft A1 retail park.
If successful, construction could commence
in autumn 2013.
Leisure Plaza
Milton Keynes
At Leisure Plaza, Milton Keynes, we have
planning consent for 113,000 sq ft of retail
together with the existing 65,000 sq ft ice rink.
We are working with the various interested
parties in this development to bring it forward
with a view to starting construction later
this year.
Outline planning consent has recently been
granted for a 70,000 sq ft foodstore and
78,000 sq ft of open A1 retail units as part of
the regeneration of Tyseley. Discussions are in
hand with a number of potential tenants and
we are working towards a start on site
in early 2013.
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 T K Maxx, Media Expert, Makro,
Deichmann, Smyk, Komfort and others.
During the year we sold 50% of this scheme
to clients of Standard Life and recovered over
£16m of capital through the payment of loans.
The agreement for sale provides that we will sell
the remaining ownership two years after
completion of the development to the same
clients of Standard Life. The 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 66,000 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 is now over 70% pre-let
to Tesco, Castorama, H & M, Media Saturn,
Jula and others. Construction commenced in
October 2011 and is expected to complete
by October 2012.
Other retail projects
Helical Retail, our joint venture with Oswin
Developments, is actively pursuing a large
number of potential foodstore sites around the
UK and is working closely with the major food
retailers to satisfy their location specifi c
requirements.
business review helical bar plc 2012
development programme
retirement villages
23
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 fi tness rooms and
surrounded by maintained
grounds, this retirement option
is proving increasingly popular.
Bramshott Place
Liphook, Hampshire
Durrants Village
Faygate, Horsham, West Sussex
St Loye’s College
Exeter
The original Bramshott Place Village was an
Elizabethan mansion built in 1580, although now
only the original Grade II listed Tudor Gatehouse
remains, which we have fully restored. The land
and buildings were derelict when 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. To
date, we have sold 90 units with reservations on
a further 18 units. Construction of the fi nal phase
of 55 units will complete in September 2012.
Durrants Village, a 30 acre site, had operated as
a sawmill with outside storage for many years.
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 has been completed and the fi rst
phase started in May 2012 for the construction
of a retirement village and clubhouse. Following
changes to the scheme the development will be
for 171 units and we have reservations on fi ve
units in Phase One with reservations on a further
eight units in future phases.
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. Demolition,
site clearance and archaeological survey work
have been completed. In 2011 we received
planning consent for 63 open market housing
units on part of the site and expect to complete
the sale of this part in Summer 2012. Construction
of a retirement village and clubhouse in phases
on the remainder of the site is expected to
commence in late 2012/early 2013.
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 had been obtained for a retirement
village of 101 units and a central facilities
clubhouse building. In 2011 we received
consent for 89 open market housing units and
have agreed to sell the whole site with
completion due in Summer 2012.
Maudslay Park
Great Alne, Warwickshire
This is a Green Belt site which has 320,000 sq ft
of built footprint and benefi ts from Major
Development Site planning policy. Measuring
82 acres this site received outline planning
permission in April 2011 for a retirement village
of 132 units plus 47 extra care units. Demolition
and enabling works will commence in late
2012 with construction to follow in 2013.
business review helical bar plc 2012
investment portfolio
overview
One of our main objectives is to have
75% of our group’s property assets in the
investment portfolio creating positive
net cash fl ow for the business.
24
4%
industrial
3%
retirement
village
30%
london
offi ces
2%
other
61%
retail
Clyde
Shopping Centre
Clydebank
Idlewells
Shopping Centre
Sutton-in-Ashfi eld
The Powerhouse
Chiswick
Shepherds Building
Shepherds Bush
Corby Town Centre
Corby
Broadway House
Hammersmith
The Morgan
Quarter
Cardiff
The Guineas
Shopping Centre
Newmarket
Silverthorne Road
Battersea
United Kingdom
Central London
business review helical bar plc 2012
investment portfolio statistics
The following statistics all refer to Helical’s share of the investment portfolio.
Investment (Helical’s share)
London offi ce
Provincial offi ce
Industrial
In town retail
Out of town retail
Retirement village
Total
Note: Barts Square is held as an investment.
Portfolio Yields
Industrial
London Offi ces
South East offi ces
Retail
Other
Total
Valuation Movements, Portfolio Weightings and Changes to Rental Values
Sector
London Offi ces
South East Offi ces
Total Offi ces
In town retail
Out of town retail
Total retail
Industrial
Other
Total
Note: Including sales, purchases and capex.
25
Value
£m
113.6
7.8
20.3
213.6
14.1
5.0
Equity
£m
44.4
2.7
6.5
84.7
6.4
5.0
Equity
%
29.7
1.8
4.3
56.6
4.3
3.3
374.4
149.7
100.0
Portfolio
weighting
%
Initial Reversionary
Yield
Yield
%
%
Yield on
letting
voids
%
Equivalent
Yield
(AiA)
%
5.4
30.3
2.0
60.8
1.5
100.0
8.3
5.6
8.3
7.5
–
7.1
9.5
8.1
8.5
8.3
–
8.0
9.3
7.5
8.3
7.3
–
7.9
8.9
7.6
8.6
7.7
–
7.8
Valuation
Increase/
(Decrease) Weighting
%
%
ERV
Change
Mar 11 to
Mar 12 %
ERV
Change
Mar 10 to
Mar 11 %
3.2
2.5
3.2
0.0
-2.4
-0.2
-3.3
12.6
0.7
30.3
2.0
32.3
57.0
3.8
60.8
5.4
1.5
2.8
0.8
2.5
1.0
-2.0
0.8
-0.9
1.6
0.0
1.4
2.7
2.4
2.6
-5.4
100.0
1.2
1.3
business review helical bar plc 2012
portfolio statistics
investment portfolio
Capital Values, Vacancy Rates and Unexpired Lease Terms
26
South East offi ces
London offi ces
Retail
Industrial
Total
Lease expiries and tenant break options:
Percentage of rent roll
Number of leases
Average rent per lease
53% of Helical’s net rent roll has greater than 5 years to expiry.
Rank
Tenant
1
2
3
4
5
6
7
8
9
Endemol
TK Maxx
Barts and The London NHS Trust
Quotient Bioresearch
Asda
Argos
Metropolis Group
Urban Outfi tters
Hitchcock & King
10
Fox International
Total
Top 10 tenants account for 26.5% of the rent roll.
business review helical bar plc 2012
Capital value
psf
£
Vacancy
rate
%
Average
unexpired
lease term
Years
208
200
134
55
142
2012
7.7%
79
2013
8.1%
65
2014
13.9%
100
0.0
16.4
5.6
14.0
8.8
2015
5.3%
48
17.7
4.8
8.2
5.3
7.3
2016
12.0%
62
£26,200
£33,800
£37,500
£29,900
£52,500
Rent
Leases
% of
Rent Roll
£1,526,923
£1,160,000
£1,138,980
£664,792
£637,438
£453,750
£400,000
£400,000
£397,500
£374,031
23
2
7
7
2
4
1
1
1
3
5.65
4.29
4.21
2.46
2.36
1.68
1.48
1.48
1.47
1.38
£7,153,414
26.46
Asset Management
During the year £2.0m of rent was lost at lease end (7.6% of rent roll). A
further £0.6m (2.1% rent roll) was lost through administrations (net of rent
from regearing leases as tenants in administration were acquired). £1.8m
of leases were renewed (6.5% rent roll) with a further £2.3m (8.6% rent
roll) added through new letting and fi xed uplifts. The net rental reduction
was £0.2m. Of the rent lost, £0.4m was attributable to Barts Square and
£0.7m to 200 Great Dover Street, both of which were anticipated and
facilitate refurbishments / redevelopments. Excluding these anticipated
losses, net rental gain was £0.9m.
Our material exposures to tenant administrations have been Peacocks /
Bon Marche, Priceless Shoes, Shoon, Game and Clintons.
Including units which have been let or are under offer since March 2012,
we have lost £0.4m of rent from administrations. Total rent at risk from
administration was £1.5m. Of this total we have retained/re-let or have
under offer 63% of rent at risk from administration.
Sales
We have continued to make good progress in selling non-income
producing assets or assets where we perceive there to be limited further
asset management upside.
Since March 2011 we have completed on sales of £83.2m of property, of
which £14.2m was non-income producing. Wood Lane (£10.1m) was sold
to Aviva, our Joint Venture partner in our White City development, and will
contribute to our development site. 61 Southwark Street was sold for
£19.4m, the Union portfolio was sold for £18.4m and Woking (part of the
F3 portfolio) was sold for £8.25m, together with a number of other smaller
sales.
Of the non-income producing sales, £10.3m consists of units at our
retirement village at Bramshott Place, Liphook and £3.3m of units at
Southall (the entirety of our remaining interest).
Since the year end, we have exchanged or completed on £20.8m of
sales (£13.8m non-income producing). A further £12.9m is under offer
(all non-income producing).
Acquisitions
We have continued to acquire income producing properties throughout
the year, some with longer term redevelopment or refurbishment potential.
The acquisition of Barts Square, EC1, was completed in joint venture with
Baupost (Helical 33.3% interest) for £55m. A planning application for a
major mixed use development has been submitted.
27
Vacant possession will be attained between 2014 and 2016. In the
meantime we are receiving a net yield of circa 5.5%.
Offi ce investments were acquired in Chiswick (£3.7m, 10% NIY) on a 25
year RPI linked sale and leaseback transaction, Botleigh Grange for £2.4m
from the administrators and King Street, Hammersmith. In Hammersmith,
we acquired a part vacant offi ce building with retail on the ground fl oor
from the receivers for £14.1m. This is currently being refurbished and we
hope to achieve a running yield in excess of 8% upon letting.
We also acquired a retail parade in Basildon and Corby Town Centre for a
total of £81.3m, both yielding 8% where we intend to continue letting
vacant space and implement minor refurbishments where necessary.
Total gross annual rental income (before joint venture shares) arising from
these acquisitions is circa £12m.
There was a valuation increase of 0.7% in the year to 31 March 2012
including capex, sales and purchases which compares to the IPD monthly
index of 0.7% over the same period.
Future Investment Acquisitions
Following our recent acquisitions in the retail sector, especially Corby for
circa £70m last October, we are now concentrating on London for future
purchases. We are targeting multi-let offi ces with low rents (£20/£30 psf)
in the ‘villages’ such as Southwark, Clerkenwell and Hammersmith. Our
preference is for buildings in need of refurbishment and active
management, often with some vacancies.
An example of the sort of assets we are keen to purchase is illustrated by
our acquisition in January of Broadway House, King Street in
Hammersmith, which we acquired from receivers for £14.1m, 5.7% IY.
This building is partly retail, let at low rents (£105–125 psf Zone A) to Café
Nero, Thomas Cook, Dolland & Aitchison and others. There is also 23,270
sq ft of offi ces, 50% let at £24.50 psf and 50% vacant and being
refurbished. Once the vacant offi ces are let at circa £30 psf, the building
will be 52% retail income and 48% offi ce income and the yield on cost will
be circa 8% (including capex).
business review helical bar plc 2012
principal investment properties
retail
28
Corby Town Centre
Corby
We acquired this centre in October 2011. It
comprises in excess of 700,000 sq ft of retail
space including Oasis Retail Park, Willow Place
(2007 new build shopping centre) and
Corporation Street. This asset was acquired for
8.0% NIY (triple net). Since acquisition we have
sold Deene House for £1.5m (4.98% NIY).
Despite administrations, upon conclusion of
leases in solicitors’ hands, net rental income will
be in excess of that at acquisition. This is due to
a combination of new lettings (8 in solicitors’
hands), service charge and rates mitigation and
by taking operation of the car park in-house,
eliminating substantial costs. Further, circa
£400,000 of works has been instructed which
will increase NOI by circa £100,000, by reducing
costs and enabling lettings.
business review helical bar plc 2012
The Morgan Quarter
Cardiff
A prime retail asset on the Hayes opposite St
David’s 2, let to Urban Outfi tters, Joules, Fred
Perry, Molton Brown and TK Maxx. With current
contracted rent of £3.1m versus ERV of
£4.23m, we see many opportunities for asset
management initiatives and further rental growth
over the medium term, following capital growth
of 30% for the asset since the opening of St
Davids 2 in September 2009. Since the year
end, we have completed a new letting to Jack
Wills and set a new rental level of £172 Zone A.
The Guineas
Tenants include Marks and
Spencer and Argos at this
142,000 sq ft regional
shopping centre.
Idlewells Shopping Centre
Bought at an initial yield of 8.5%
in early 2011, vacancy rates are
low at 1%.
Clyde Shopping Centre
acquired in 2010, this 627,000
sq ft out-of-town shopping has
tenants which include Asda,
BHS and Argos.
29
The Guineas,
Newmarket
Idlewells Shopping Centre,
Sutton-in-Ashfi eld
Clyde Shopping Centre,
Clydebank
In 2010 we acquired this regional shopping
centre for £17.75m at an initial yield of circa 8%.
Tenants include Marks and Spencer and Argos.
Currently the centre is 91% let with zone A rents
between £30 and £50 per sq ft.
This 185,000 sq ft shopping centre was
purchased from LaSalle Investment
Management at an initial yield of 8.5%. Tenants
include: New Look, Superdrug and Argos. Since
acquisition we have renewed a number of
leases and its current vacancy rate is 1%.
Since acquiring this property in January 2010,
net income has increased from £5.85m to
£6.02m with a further £374,000 of income
contracted through expiry of rent free periods.
There is £206,000 of rent in solicitors’ hands.
Despite some tenant insolvencies, letting has
remained strong. We lost four tenants through
administrations but have subsequently re-let or
put under offer all four units at a total rent of
£273,000 compared with rents prior to
administration of £261,000.
There were no tenant breaks or lease expiries
exercised by tenants in the year 2011 to 2012
and the void rate now stands at only 3% of
fl oor area.
business review helical bar plc 2012
30
Shepherds Building,
London W14
This is a 151,000 sq ft refurbished offi ce just
south of Shepherds Bush Green and Westfi eld
shopping centre. The building is let on 64
leases, mainly to media related tenants,
at an average rent of £23.50 psf.
Ongoing tenant demand is strong with recent
lettings at £25 to £30 psf depending on size,
giving good prospects for rental growth over
the next three to fi ve years. There is only one
unit of 860 sq ft vacant at present.
property investments
central london offi ces
31
Broadway House,
London W14
Acquired in 2012, this 40,000 sq ft offi ce building
with retail units on the ground fl oor was acquired
from Joint Fixed Receivers for £14.1 million,
refl ecting a net initial yield of 5.7% and a targeted
reversionary yield of 8.7%. This building is partly
retail, let at low rents (£105-125 psf Zone A) to
Café Nero, Thomas Cook, Dolland & Aitchison
and others. There is also 23,270 sq ft of offi ces,
50% let at £24.50 psf and 50% vacant and
being refurbished. Once the vacant offi ces are
let at circa £30 psf, the building will be 52%
retail income and 48% offi ce income and the
yield on cost will be circa 8% (including capex).
Silverthorne Road, Battersea,
London SW8
Acquired with vacant possession in 2005 we
subsequently fully refurbished this offi ce and
TV studio complex to create a multi let TV
production and media offi ce hub of approximately
56,000 sq ft.
In 2007 we secured planning consent for
a further 50,000 sq ft of raised fl oor, air
conditioned offi ce accommodation over fi ve
fl oors which was developed out during 2008
and concluded in early 2009. The site is
currently 70% let by fl oor area.
Levels of interest and the lettings currently
in negotiation suggest that the low total
occupational cost of circa £40 psf including
rent, rates and service charge is making the
building increasingly attractive to those occupiers
no longer able to afford more central locations.
business review helical bar plc 2012
fi nancial review
32
Review of the Year
In the year to 31 March 2012 we made good progress towards the
Group’s stated target balance between the income producing investment
portfolio and development stock of 75:25. Sales of over £50m of
investment assets, where our asset management initiatives were
completed, added to the sale of over £26m of trading properties and
development sites. These, together with the recovery of £16m of cash
through the sale of a 50% interest in our largest Polish retail development,
provided funds for the acquisition of over £100m of new investment
assets. This net new investment of over £52m, including capital
expenditure, and the uplift in values at the year-end of £4m, took Helical’s
interest in its investment portfolio to £394m, including its share of assets
held in joint ventures, up from £338m. The impact of this increase in
investment assets is seen in the Income Statement where net rents,
including assets held in joint venture, increased from £17.8m to £22.9m,
a 29% increase.
Deepening economic concerns over the Eurozone and its potential
impact on the UK led to decreased valuations for a number of
development sites held by the Group and this has been refl ected in a
write-down of £4.5m (2011: £14.9m). However, this was more than offset
by profi ts made on the remainder of our development portfolio and the
Group posted its fi rst net development profi t since 2008 of £0.7m (2011:
loss £16.6m).
Administration costs, before performance related awards, increased by
6%. Net fi nance costs rose from £6.3m to £7.8m, refl ecting the increase in
the size of the investment portfolio. The downward trend in interest rates
between April 2011 and March 2012 gave rise to a small loss when
comparing the fair value of the Group’s derivative fi nancial instruments to
their book value, but as a result of the cancellation of a number of these
instruments during the year, the remaining fair value liability on the Group’s
balance sheet is now just £3m. During the year the Group was exposed to
exchange rate movements on its share of the assets and liabilities relating
to Poland and fl uctuating rates generated a loss of £1.1m.
The net result for the year was a pre-tax profi t of £7.4m compared to a
£6.3m loss in the previous year. This profi t resulted in a diluted EPRA
earnings per share of 3.4p (2011: loss of 6.4p) which allows the Group
to fund a total dividend of 5.15p (2011: 4.90p), of which 3.40p is
recommended to shareholders as a fi nal dividend, payable on 26 July 2012.
The total comprehensive income of £4m added 3.43p to the diluted
EPRA net assets per share. However, the dividend paid in the year of
4.90p reduced this to 250p.
During the year, the Group entered into a number of new bank facilities
totalling £130m, which were used to refi nance existing assets and fund
its purchase of new investment properties. The principal new facility was
a fi ve year £100m revolving credit facility with The Royal Bank of Scotland
plc which was used to refi nance its recent acquisition of Corby Town
Centre, consolidate a number of other facilities with the bank and provide
capacity for future acquisitions. The Group also entered into new
investment facilities with Barclays enabling it to acquire properties in
Newmarket and Hammersmith and, since the year end, refi nanced its
investment at Shepherds Building, Shepherds Bush in a new three year
facility. HSBC provided a development facility enabling our retirement
village at Durrants Village to be built out. In addition, new investment
facilities were agreed with Nationwide and Clydesdale Bank during the
year. Despite the perception that bank fi nance is diffi cult to obtain, we
continue to receive strong support from our banks.
The Group faces the future with a sound fi nancial base, having increased
its income stream by replacing low growth assets with higher yielding
retail properties, refi nanced maturing debt with longer term bank facilities
and reduced its exposure to any future interest rate rises by entering into
new hedging instruments, taking advantage of current low interest rates.
In addition, and with the backing of the major property lending banks, the
Group has access to a number of new bank facilities which, when added
to its cash balances, provides a level of liquidity and resources to enable
it to deal with the current economic uncertainties and to continue to
rebalance its portfolio.
Net rental income
The Group’s share of net rental income increased to £22.9m (2011: £17.8m)
including its share of net rental income of joint ventures. Head rents
payable to freeholders increased following the acquisition of Newmarket
on a long leasehold interest. Property overheads increased to £5.5m
(2011: £5.3m). Tenant bad debts remain low at 2% of gross rental
income.
Net rental income
Gross rental income – In company
– In joint ventures
Total gross rental income
Rents payable
Property overheads
Net rental income
fi nancial review helical bar plc 2012
2012
£000
23,058
6,645
29,703
(1,266)
(5,501)
2011
£000
2010
£000
18,590
18,881
5,531
1,103
24,121
19,984
(1,024)
(5,320)
(143)
(4,978)
22,936
17,777
14,863
Development profi ts
Total net development profi ts of £0.7m (2011: loss of £16.6m)
were generated after deducting write-offs and provisions of £4.5m
(2011: £14.9m).
Development profi ts were generated at the retirement village scheme at
Bramshott Place, Liphook, at our mixed use scheme at Fulham Wharf,
London SW6, at our offi ce development at Tilgate, Crawley and in
Poland. In addition, we recognised the remaining profi t in respect of our
development management role at Riverbank House, London EC4 and
fees for our development management roles at 200 Aldersgate Street,
London EC1 and Barts Square. However, during the year we wrote down
our remaining sites at Southall, Stockport and Wolverhampton, all of
which have subsequently been sold at their written down value. We have
also written down to net realisable value our retirement village site at
Exeter and our partially let offi ce development at The Hub, Glasgow.
Share of results of joint ventures
These joint ventures include our share of the investment properties
at Clyde Shopping Centre, Clydebank and Barts Square and our
development schemes at Europa Centralna Gliwice Poland, Shirley
Town Centre West Midlands, Leisure Plaza Milton Keynes and King
Street Hammersmith. During the year the Group’s share of results
from joint venture partners was £2.5m (2011: £2.9m) mainly due to
the Group’s share of net rental income and the net revaluation surplus
from its investment in the Clyde Shopping Centre and Barts Square.
Gain on sale and revaluation of investment properties
During the year the Group sold investment properties with book values of
£50.8m (2011: £27.9m) on which it made a loss of £0.4m (2011: gain of
£4.8m). The properties sold included 61 Southwark Street, Aldridge,
Hawtin Park, East Grinstead, Fleet, Hailsham, Motherwell and Woolwich.
The revaluation surplus for the year was £3.7m (2011: £2.7m).
33
Finance costs, fi nance income and derivative fi nancial
instruments
Interest payable on bank loans including our share of loans on assets
held in joint ventures but before capitalised interest, increased from
£12.9m to £13.9m due to a higher level of average debt during the year
more than offsetting the lower average cost of debt. Capitalised interest
reduced from £4.2m to £3.3m refl ecting the lower level of development
stock held during the year. As a consequence of these two movements,
total fi nance costs increased by £1.9m. Finance income earned on cash
deposits reduced marginally to £0.6m (2011:£0.7m).
Derivative fi nancial instruments have been valued on a mark to market
basis and a charge of £0.3m (2011: credit of £1.8m) has been
recognised in the Income Statement.
Taxation
The deferred tax asset is principally derived from tax losses which the
Group believe will be utilised against profi ts in the foreseeable future.
Net fi nance costs
Interest payable on bank loans – In company
Other interest payable and fi nance arrangement costs
– In joint ventures
Interest capitalised
Finance costs
Interest receivable
2012
£000
10,808
2,223
901
2011
£000
9,690
1,693
1,481
(3,300)
(4,179)
10,632
(583)
8,685
(652)
2010
£000
10,956
490
1,568
(3,196)
9,818
(1,039)
fi nancial review helical bar plc 2012
fi nancial review
Dividends
The Board is recommending to shareholders at the Annual General Meeting on 24 July 2012 a fi nal dividend of 3.40p per share to be paid on
26 July 2012 to shareholders on the register on 29 June 2012. This fi nal dividend, amounting to £3,972,753 has not been included as a liability
at 31 March 2012, in accordance with IFRS.
34
During the year the Group paid the 2011 fi nal dividend of 3.15p per share and an interim dividend for 2012 of 1.75p per share.
Dividends
1st interim
2nd interim
Prior period fi nal
Total
2012
pence
1.75
–
3.15
4.90
2011
pence
1.75
–
0.25
2.00
2010
pence
1.75
2.75
2.75
7.25
Earnings per share
Earnings and diluted earnings per share in the year to 31 March 2012 were both 6.50p (2011: loss per share of 3.6p) per share. Diluted EPRA earnings
per share increased to 3.4p (2011: loss per share 6.4p).
Earnings per share
Earnings/(loss) per share
Diluted earnings/(loss) per share
Diluted EPRA earnings/(loss) per share
2012
pence
6.5
6.5
3.4
2011
pence
(3.6)
(3.6)
(6.4)
2010
pence
9.1
9.1
(0.1)
Earnings per share calculations are based on the weighted average number of shares held in the year. This is a different basis to the net asset value per
share calculations which are based on the number of shares at 31 March 2012.
Investment portfolio
During the year investment properties with a book value of £51m were sold. New properties of £100m were acquired (including offi ces in Hammersmith
and Chiswick and shopping centres in Corby and Basildon). In addition, around £2m of capital expenditure was spent on refurbishing various offi ce,
industrial and retail buildings. At 31 March 2012 there was a revaluation surplus, net of joint venture share, of £3.7m (2011: £2.7m) on the investment
portfolio.
Investment portfolio
Valuation at 1 April
Additions at cost
Disposals
Joint venture partners share of revaluation
Revaluation
Valuation at 31 March
fi nancial review helical bar plc 2012
2012
£000
2011
£000
2010
£000
271,876
219,901
241,287
102,750
77,864
4,192
(50,768)
(27,902)
(40,438)
(646)
3,664
(657)
1,756
2,670
13,104
326,876
271,876
219,901
Net asset values
Equity shareholders’ funds, on which the net asset value per share is calculated, have decreased by £1.7m. This has led to a small decrease in
adjusted diluted net assets per share to 217p (2011: 218p). Taking into account the surplus on the directors’ valuation of trading and development
stock of £34.5m (2011: £32.4m), the diluted EPRA net assets per share decreased by 1% to 250p (2011: 253p).
Net asset values per ordinary share
Diluted
Adjusted diluted
Diluted EPRA
Diluted EPRA triple NAV
2012
pence
2011
pence
2010
pence
35
217
221
250
246
218
225
253
246
228
241
272
259
The net asset value per share calculations are included in Note 32 of this statement.
Debt and fi nancial risk
Net debt held by the Group has increased during the year from £206.1m to £227.8m. Including the Group’s share of net debt of its joint ventures the
Group’s share of total net debt has increased from £241.3m to £264.2m.
Net debt and gearing
Net debt – Company
Net debt – Including joint ventures
Gearing – Company
Gearing – Including joint ventures
2012
2011
2010
£227.8m
£206.1m
£203.0m
£264.2m
£241.3m
£228.8m
90%
104%
81%
94%
84%
94%
The fair value of the Group’s investment, trading and development portfolio at 31 March 2012 was £459.7m (2011: £451.9m). Including the Group’s
share of the property portfolio held in joint ventures the fair value of the total portfolio was £572.6m (2011: £532.2m). With the Group’s share of total
net debt of £264.2m (2011: £241.3m) the ratio of net debt to the value of the Group’s share of the property portfolio was 46% (2011: 45%).
The Group seeks to manage fi nancial risk by ensuring that there is suffi cient fi nancial liquidity to meet foreseeable needs and to invest surplus cash
safely and profi tably. The Group has over £65m (2011: £95m) of cash and agreed, undrawn, committed bank facilities as well as £16m (2011: £59m)
of uncharged property on which it could borrow funds.
At 31 March 2012 the Group had £120.3m (2011: £75.3m) of fi xed rate debt with an average effective interest rate of 4.80% (2011: 5.77%) and an average
length of 1.9 years (2011: 2.3 years), and £142.9m of fl oating rate debt with an average effective interest rate of 3.47% (2011: 2.97%). In addition, the Group
had £125m of interest rate caps at an average of 4.7% (2011: £91m at 4.9%). The average maturity of the Group’s debt was 2.7 years (2011: 2.1 years).
As at 20 June 2012, Helical’s average interest rate was 4.10%.
Nigel McNair Scott
Finance Director
20 June 2012
fi nancial review helical bar plc 2012
corporate responsibility
Introduction
Helical recognises that our business activities impact on the environment
and the wider communities in which we operate. As our business involves
working with joint venture partners and outsourcing partners, our direct
impacts as a business are relatively small. However, we are aware of the
infl uence we can exert through the implementation of responsible
environmental and social practices via our partners, contractors and
suppliers.
36
An endorsement of Helical’s commitment to managing environment and
social impacts is our continued listing in the FTSE4Good Index. The
FTSE4Good Index measures the performance of companies that meet
globally recognised corporate responsibility standards and facilitates
investment in those companies. Maintaining listed status on this Index
remains a key priority for Helical, and informs our evolving approach to
Corporate Responsibility.
Managing Corporate Responsibility
Each year we review and update our environmental management system,
which has been in place since 2003 and the updated environmental
management system, available on the Group’s website, is embedded
within the operations for Helical. Key elements of the system include:
• ‘Environment’ and ‘Corporate Responsibility’ policies which set out
Helical’s high-level commitment across a number of impacts areas.
These are reviewed at Board level annually and are implemented by
our senior management team.
• Annual (and rolling) performance targets to enable us to focus our
efforts throughout the year on measurable, yet achievable performance
goals. This year we have continued to report on energy and water
consumption at our large managed multi-let assets and head offi ce,
and measured our performance against quantitative targets set in
2011. In addition, we have measured the proportion of waste at our
managed assets as well as within our developments.
• Key Performance Indicators (KPIs) to help us monitor progress towards
these targets and to ensure that we are able to report in line with investor
disclosure requirements, notably FTSE4Good. Although, it should be
acknowledged that our particular business model with regard to buying
and selling of assets means that absolute performance measures can
be diffi cult to compare year on year, hence this year we are also
reporting selected intensity KPIs.
• A checklist to assist us in applying minimum sustainability requirements
across our development activities. In collaboration with our consultants,
we developed a sustainability project management checklist to ensure
that sustainability issues are incorporated into all decisions throughout
the development lifecycle. This has been expanded this year to include
a Contractor’s Checklist to ensure that individual contractors address
our corporate goals at the construction stage.
• Effective use of internal evaluation and review through quarterly
meetings of key Helical personnel, external corporate responsibility
advisors and principal managing agents to ensure effective delivery
of the objectives and targets.
corporate responsibility helical bar plc 2012
The management system we have developed has been designed
specifi cally to refl ect the fl exibility of Helical’s business model. It also
refl ects the key role that our partners play in delivering enhanced
sustainability outcomes in all our business ventures, be they developments
such as the ongoing refurbishment project at Broadway House,
Hammersmith, or in the management of individual multi-let assets
such as at Shepherds Building or Silverthorne Road, Battersea.
Review of progress in the year to 31st March 2012
We manage our environmental and social impacts because there are
business benefi ts in doing so. These benefi ts include increased ability to
secure planning consent, improved marketability of assets to prospective
tenants, reduced operating costs of assets, mitigating the risk of future
legislation and regulation, and enhanced corporate reputation.
Below we outline our progress in relation to the each of our Corporate
Responsibility impact areas.
Environment
Our high-level corporate commitment to environmental issues is outlined
in the Group’s Environmental Policy which can be found on the company
website. The Policy details our commitments across a range of impact
areas and our development and property management activities. In
2011–12, Helical set itself 21 targets to guide the Environmental element
of its Corporate Responsibility programme over the following 12 months.
These targets addressed a range of impacts arising from our development
and property management activities, including resource use and waste
production, pollution, biodiversity, tenant engagement, fl ood risk and
sustainable design and construction. A full list of these targets can be
found on the Helical website. The performance against the key targets
is summarised below.
• At out Head offi ce at Farm St, we comfortably achieved our targets of
a 2% reduction in water use and energy, with a signifi cant reduction in
water use of 78% and a reduction of 22% gas use and 7% electricity
use. This refl ects an ongoing effi ciency and internal awareness of how
we use and manage our offi ces.
• At our managed multi-let offi ces, we continue to improve energy and
water effi ciency through the implementation of low and no cost measures.
The specifi c target for 2011 was to achieve a 5% improvement against
the 2010 baseline. A review of the data in the table below shows that
performance is variable across the portfolio with the properties generally
showing an overall increase in consumption. This refl ects increasing
occupancy and changes to the portfolio structure. An additional
performance measure of average utilisation of kWh/sqm for electricity
and gas is provided for the portfolio this year and shows a general trend
of a year on year decrease. An equivalent assessment is made of
average water consumption which shows a very pleasing downward
trend to below 0.5 m3/m2. For the fi rst time this year we have also
included reporting of our managed shopping centres.
• We continue to offer recycling facilities at all our managed assets.
The success of our approach was particularly demonstrated at Corby
Shopping Centre where our managing agents Ashdown Phillips were
awarded a Shining Star of the Year award in the National Recycling
Stars Awards for 2011. At our other managed assets we comfortably
exceeded our ongoing target of a recycling rate of at least 35%.
• One ongoing target is to proactively engage with our tenants to
• There was limited activity throughout 2011–12 with regard to construction
encourage improvements in effi ciency of use of the buildings. A tenants
engagement poster has been designed for use within each of the
principal managed assets and is displayed in public areas to help
achieve this aim. Following from this, individual property managers
have engaged with the larger tenants to try and see if there are ways in
which effi ciencies can be made. The success of this holistic approach
to environmental management was demonstrated by Clyde Shopping
Centre which won a Green Apple award in November 2011 for the ‘Big
Steps – Smaller Footprints’ initiative. Through a combination of regular
communication with tenants and staff, promoting good practice with
regard to recycling and energy use and encouraging eco friendly groups
to use the centre to promote the message achieved signifi cant reductions
in both electricity consumption and waste disposed to landfi ll.
Head Offi ce and Multilet offi ces
projects. The ongoing refurbishment of Broadway House at
Hammersmith was the only project on site and the corporate objective
of achieving a minimum of 50% waste recycling was achieved.
In addition, the Group has maintained its registration with CRC and has
purchased 5,198 carbon allowances for the year 2011–12 based on the
reported emissions of the portfolio as a whole.
37
Below we present our utility consumption performance for multi-let
buildings under management as well as our head offi ce (where data
availability permits).
Electricity Electricity Electricity Electricity
2011–12
2008–09
kWh
kWh
2010–11
kWh
2009–10
kWh
Gas
2008–09
kWh
Gas
2009–10
kWh
Gas
2010–11
kWh
Gas
2011–12
kWh
11–15 Farm Street, London W1
209,439
161,822
134,531
125,101
66,929
78,659
45,904
35,753
80 Silverthorne Road, Battersea, London SW8
2,226,416 2,398,007 2,250,701 2,236,552 1,194,606 1,331,818 1,255,766 1,378,455
82 Silverthorne Road, Battersea, London SW8
–
–
–
305,171
–
–
–
222,501
61 Southwark St, London SE1 (sold 2011-12)
900,553
906,531
992,777
–
567,217
567,370
525,614
–
Shepherds Building, London W14
3,376,730 3,367,740 3,397,545 3,380,916
No gas
No gas
No gas
No gas
The Hub, Glasgow
–
–
328,436
374,277
–
–
392,587
513,019
Net lettable area sq ft (sq metres)
274,000
(25,455)
325,000
(30,193)
385,000
(35,767)
318,000
(29,542)
123,000
(11,427)
174,000
(16,165 )
234,000
(21,739)
167,000
(15,514)
Average utilisation kWh/sq m
255
221
195
213
154
117
100
136
11–15 Farm Street, London W1
80 Silverthorne Road, Battersea, London SW8
82 Silverthorne Road, Battersea, London SW8
61 Southwark St, London SE1
Shepherds Building, London W14 (sold 2011-12)
The Hub, Glasgow
Net lettable area sq ft (sq metres)
Average utilisation m3/sq m
Water
2008–09
m3
Water
2009–10
m3
Water
2010–11
m3
Water
2011–12
m3
3,857
5,366
–
3,772
9,092
2,800
4,703
–
6,706
6,989
2,479
5,017
–
4,506
8,494
538
4,480
423
–
6,724
–
Not
available
Not
available
Not
available
274,000
(25,455)
325,000
(30,193)
325,000
(30,193)
258,000
(23,968)
0.72
0.61
0.60
0.49
corporate responsibility helical bar plc 2012
corporate responsibility
Shopping Centres
38
The Guineas Shopping Centre, Newmarket
Idlewells Shopping Centre, Sutton-in-Ashfi eld
Notes:
• No gas’ refers to assets where gas is not used on site
• ‘–’ refers to assets that were under construction at time of data reporting
• Not available’ refers to data not available at time of reporting e.g. inaccessible water meters
Electricity
2011–12
kWh
Gas
Water
2011–12 2011–12
kWh
kWh
56,231
356,845
168
397,985
2,058
1,377
Going forward for 2012–13, the suitability of the targets will be reviewed against the performance for 2011–12 and revised accordingly to remain
challenging yet achievable.
Employees
As at 31 March 2012, we employed a team of 28 people in UK, 36% of
whom are women. We continue to enforce our equal opportunities,
harassment and sexual discrimination policies. We also continue to
monitor compliance with our whistle blowing policy. There have been no
incidents to report against this policy to date.
Communities
Helical takes a strong interest in community issues. Community
engagement is an on-going concern throughout the development
process, from planning until development completion and operation.
The following examples demonstrate how community engagement has
benefi ted the communities that we work with over the past year.
High levels of staff retention remains a key feature of our business. One
person left during the reporting year, who was replaced, and one member
of staff was employed on a temporary contract to provide maternity leave
cover. We retain a highly skilled and experienced team and the table
below shows a breakdown of our staff by length of service.
Total number
of staff
Average length of
service (years)
Directors and management
Finance
Administration
10
8
10
14
9
7
Our staff retention levels not only refl ect competitive remuneration and
benefi ts packages but also our commitment to enhancing the
professional and personal skills of our team. During 2011 we provided an
average of 12.39 hours of training per employee, an increase on last year.
As in previous years, we continue to evaluate training needs in line with
business objectives.
• We have made a number of in-kind contributions through our Clyde
Shopping Centre in Clydebank. The shopping centre provides either
a unit or outdoor space for a wide variety of charities and community
groups which enables these groups to promote their activities and
raise money. Charities supported in this way included British Heart
Foundation, Help for Heroes, National Association for the Blind, British
Legion Poppy Appeal and various local community groups such as the
local fi re, police and prison service. The local charity of the year for
several years now has been Lakelands Hospice which runs a hospice
on the Oakley Vale Estate for which various initiatives are facilitated by
the shopping centre throughout the year. In addition, the centre
manager is Chair of Governors at Lodge Park Technology College and
provides a considerable amount of his time in this role.
• At our Newmarket shopping centre we jointly sponsored ‘Horse about
Newmarket’, a community art event, featuring life size acrylic horses,
which were creatively designed and painted by local artists, companies
and schools. The equine works of art were displayed to the general
public at various locations throughout the town during the summer of
2011 and subsequently we purchased one of the horses which is on
display within the centre. All profi ts generated were shared between
Racing Welfare and St Nicholas Hospice. In addition, the shopping
centre worked closely with the Newmarket Retailers Association to
promote the “Strictly Come Newmarket Competition” with a remit of
bringing new business to town and not something already existing. As
a result, 7 new businesses opened in Newmarket of which The
Guineas Shopping Centre has 3.
corporate responsibility helical bar plc 2012
Health & Safety
Helical’s Health & Safety policy aims to develop a corporate culture that
is committed to the prevention of injuries and ill health to its employees
or others that may be affected by its activities. The Board of Directors
and senior staff are responsible for implementing this policy and ensure
that health and safety considerations are always given priority in planning
and in day-to-day activities. Our Health & Safety Policy was reviewed
and updated in January 2012 to refl ect the latest legislative and
regulatory developments. There has been one reportable RIDDOR
incident within the portfolio during 2011–12 which was a minor slip
incident in our Idlewells Shopping Centre. Our Health & Safety policy
can be found on the Group’s website.
Suppliers
Fair treatment of suppliers remains a key priority for Helical, particularly
in challenging market conditions where smaller suppliers in particular
may rely on our payments for balanced cash fl ow. The company’s policy
is to settle all agreed liabilities within the terms established with suppliers.
39
• Idlewells Shopping Centre, Sutton-in-Ashfi eld has taken the lead role in
producing a bid for a share of £1 million funding from the Government
to assist town centre improvements under the Mary Portas town centre
pilot scheme. The shopping centre is working with local community
groups including Sutton Town Centre Group, Sutton Centre Community
College, the District Council and a large number of other retail
businesses and organisations within the town centre. The initiative
involved the production of a YouTube video and a detailed proposal of
how the money would be used locally to deliver long term sustainable
benefi ts for the town. Other initiatives include a ‘charity giving tree’
within the centre, encouraging customers and retailers to donate gifts
– three days before Christmas these were delivered to a local hospice
for distribution to both residents and out-patients
• Silverthorne Road, Battersea undertakes a number of community
initiatives including hosting occasional events and exhibitions and has
an on-going arrangement with Wandsworth Council in support of the
proposed Nine Elms Development which includes Battersea Power
Station, the new US Embassy and other commercial, entertainment
and residential developments. It also offers free space to a local charity
for meetings of their management and the people they support and
actively supports seasonal charitable projects and donates recycled
items for the benefi t of the British Heart Foundation.
We continue to make corporate donations to charity. We contributed
£21,742 to charitable causes during 2011–12 which includes donations
to: Land Aid, Save The Children, Round Square (educational charity) and
the Winchester Cathedral Trust.
corporate responsibility helical bar plc 2012
governance
41 corporate governance review
45 letter from the chairman of the nominations committee
46 report of the nominations committee
47 the board of directors and senior management
49 letter from the chairman of the remuneration committee
50 directors’ remuneration report
57 report of the audit committee
58 report of the directors
40
governance helical bar plc 2012
corporate governance review
At Helical we believe that Corporate Governance is of fundamental
importance in delivering, for shareholders, long-term success through the
effective, entrepreneurial and prudent management of the Company. The
Board of Helical is collectively responsible for providing the entrepreneurial
leadership of the Company within a framework of controls and reporting
structures which assist in pursuing its strategic aims and business objectives.
The UK Corporate Governance Code (the “Code”)
The Board is accountable to the Group’s shareholders for good corporate
governance.
We believe in applying the highest principles of corporate governance
and, except where stated below, have complied throughout the year with
the principles as set out in the section of the UK Corporate Governance
Code (“Code”) headed “The Main Principles of the Code”. The Group also
takes into account the corporate governance guidelines of institutional
shareholders and their representative bodies.
– Appointment of Chairman
Following the retirement of the current Chairman, Giles Weaver, at this
year’s AGM the Nominations Committee is intending to appoint current
Finance Director Nigel McNair Scott as Chairman of the Company,
subject to his being re-appointed a director at the AGM. The Code
requires that a new chairman should satisfy, on appointment, the
independence criteria set out in provision B.1.1 and Nigel will not
satisfy this Code provision on appointment. The Committee has
engaged in an extensive consultation process with shareholders and
representative bodies, explaining its reasons for the proposed
appointment and has received indications that there will be
considerable support for Nigel’s re-election at the AGM and his
appointment as Chairman at the conclusion of the AGM. In proposing
this appointment, the Committee is conscious of non-compliance with
the Code and has sought to strengthen shareholder protections by the
appointment of two new, independent, non-executive directors,
Richard Gillingwater and Richard Grant. Richard Gillingwater, who has
an exceptional record of service on the Boards of many of the UK’s
listed companies, details of which are noted in his biography on page
47, will become the Senior Independent Director. Richard Grant is the
Finance Director of Cadogan Estates Limited and a former partner
of PwC. He will be the Chairman of the Audit Committee. In his role as
Senior Independent Director, Richard Gillingwater will take on the
responsibility for liaising with shareholders and their representative
bodies regarding the governance of the Company and will also be
responsible for undertaking the annual directors’ evaluation process. He
will hold meetings of the independent non-executive directors separately
from the rest of the Board to ensure that any issues may be discussed
without the presence of a non-independent director. The Committee
believes this will provide shareholders with suffi cient comfort that the
governance of the Company and the review of its Board procedures
and processes are not compromised by a perceived lack of
independence.
– Composition of the Board
The Code requires a Board to have an appropriate balance of skills,
experience, independence and knowledge of the Company to enable
it to discharge its duties and responsibilities effectively. Helical operates
with a strong management team of senior decision-makers backed up
by fi nance and other support staff. Given its size the Board does not
consider it appropriate to operate both a main board and a separate
executive committee, a structure commonly seen in larger companies.
However, despite its size, the Group is keen to promote exceptional
talent to Board level at the earliest opportunity to expose such individuals
to the broader issues facing the business, encourage their long term
commitment to the Group and to provide for future succession. It is for
these reasons that Helical’s Board of six executive directors’ is larger
than those of other comparable listed real estate companies.
Provision B.1.2 of the Code notes that companies such as Helical,
which are below the FTSE350, are required to have at least two
independent non-executive directors. The Board has determined,
however, that in Helical’s case a total of four independent non-
executive directors is appropriate to balance the current executive
team, to provide the experience and advice that the executive team
seeks and to ensure the interests of shareholders and other
stakeholders are adequately protected. In the year to 31 March 2012,
the team of non-executive directors included Antony Beevor, who was
appointed to the Board in April 2000 and has, therefore, served as a
non-executive director for 12 years. In the view of the Board, Antony
provides a robustly independent approach to his position as a
non-executive and to his roles as Senior Independent Director and
Chairman of the Audit Committee. However, Antony is stepping down
at this year’s AGM and will be succeeded as Senior Independent
Director by Richard Gillingwater and as Chairman of the Audit
Committee by Richard Grant.
In the Board’s view, the composition of the Board will continue to
have an appropriate balance of skills, experience, independence
and knowledge of the Company as required by the Code.
– Notice of Annual General Meeting
The code recommends that the Notice of AGM and related papers be
sent to shareholders at least 20 workings days before the meeting. For
the 2011 AGM the Notice and related papers were sent out 17 working
days before the AGM.
Chairman and Chief Executive
The Chairman and the Chief Executive collectively are responsible for the
leadership of the Company. The Chairman’s primary responsibility is for
leading the Board and ensuring its effectiveness, whilst the Chief Executive
is responsible for running the Company’s business. The division of
responsibilities is clearly established at Helical, is set out in writing and is
approved by the Board. Following the proposed changes to the Board,
the Chairman of Helical will be Nigel McNair Scott and the Chief
Executive will continue to be Michael Slade.
41
corporate governance review helical bar plc 2012
helical bar plc 2012
corporate governance review
42
Board responsibilities
The main purpose of the Board of Helical Bar plc is to create and deliver
the long term success of the Group and returns for its shareholders. The
Board is collectively responsible for providing the entrepreneurial leadership
of the Group within a framework of controls and reporting structures which
assist the Group in pursuing its strategic aims and business objectives. The
Board sets the Group’s strategic aims, ensures that the necessary fi nancial
and human resources are in place for the Group to meet its objectives and
reviews management performance. The Board sets the Group’s values and
standards and ensures that the Group’s obligations to its shareholders and
others are understood and met.
All directors take decisions objectively in the interests of the Group.
As part of their roles as members of the Board, non-executive directors
constructively challenge and help develop proposals on strategy and the
risk appetite of the Group. Non-executive directors scrutinise the
performance of management in meeting agreed goals and objectives and
monitor the reporting of performance. They satisfy themselves on the
integrity of fi nancial information and that fi nancial controls and systems
of risk management are robust and defensible. They are responsible for
determining appropriate levels of remuneration of executive directors and
have a prime role in appointing and, where necessary, removing executive
directors, and in succession planning. In addition to Boardroom discussions,
the Chairman contacts other non-executive directors by telephone and, if
appropriate, will hold meetings with the non executive directors without the
executive directors present.
The Board has a schedule of matters specifi cally reserved to it for
decision. The Board controls the business but delegates day-to-day
responsibility to the executive management. However, there are a number
of matters which are required to be or, in the interests of the Group,
should only be, decided by the Board of Directors as a whole. A
summary of the decisions reserved for the Board is set out below:
Schedule of matters reserved for the Board:
• Strategy and management – responsibility for the overall management
of the Group; approval of the Group’s long-term objectives and
commercial strategy; approval of annual administration budgets;
oversight of the Group’s operations; extension of the Group’s activities
into new business areas; any decision to cease to operate all or any
material part of the Group’s business.
• Structure and capital – changes to the Group’s capital structure; major
changes to the Group’s corporate structure; changes to the Group’s
management and control structure; changes to the Group’s listing or
plc status.
• Financial reporting and controls – approval of interim and preliminary
announcements; approval of annual report and accounts, including
the corporate governance statement and the directors’ remuneration
report; approval of dividend policy; approval of signifi cant changes in
accounting policies or practices; approval of treasury policies.
• Internal controls – ensuring maintenance of a sound system of control
and risk management.
corporate governance review helical bar plc 2012
• Communication – approval of resolutions and documentations to be
put to shareholders in general meeting; approval of press releases
concerning matters decided by the Board.
• Board membership and other appointments to senior management.
• Both appointment and removal of the Company Secretary.
• Corporate governance matters including directors’ performance
evaluations.
• Approval of policies including code of conduct incorporating
whistle-blowing procedures; share dealing code; health and safety
policy; environmental and corporate social responsibility policy;
implementation of procedures required by the Bribery Act 2010
and equal opportunity policy.
Members of the Board
The current members of the Board comprise a Chairman, six executive
directors and four non-executive directors. The Chairman is Giles Weaver.
The executive directors are Michael Slade (Chief Executive), Nigel McNair
Scott (Finance Director), Gerald Kaye, Matthew Bonning-Snook, Jack Pitman
and Duncan Walker. The non-executive directors are Antony Beevor (Senior
Independent Director), Andrew Gulliford, Wilf Weeks and Michael O’Donnell.
Giles Weaver, Antony Beevor and Wilf Weeks will not be offering
themselves for re-election at the 2012 Annual General Meeting having
served on the Board for 18, 12 and 7 years respectively. Nigel McNair
Scott will offer himself for re-election as a director and if re-elected, will be
appointed Chairman of the Company and Chairman of the Nominations
Committee. He will not be a member of the Audit or Remuneration
Committees. Immediately following the AGM Tim Murphy, currently
the Deputy Finance Director and Company Secretary, will be appointed
Finance Director, and Richard Gillingwater and Richard Grant will be
appointed to the Board as non-executive directors. Richard Gillingwater
will become the Senior Independent Director and a member of the
Nominations, Audit and Remuneration Committees. Richard Grant
will become Chairman of the Audit Committee and a member of the
Nominations and Remuneration Committees.
Further details, including biographies and shareholdings in the Company,
can be found on pages 47 and 48.
Attendance at Board and Committee meetings during the year
In addition to ad hoc meetings arranged to discuss particular transactions
and events and the 2011 AGM, the full Board met on six occasions
during the year under review. The attendance record of the directors at
these meetings and at meetings of the Board’s committees is shown in
the table below.
Full
Audit Remuneration Nominations
Board Commitee Committee Committee
Giles Weaver
Michael Slade
Nigel McNair Scott
Gerald Kaye
6/6
6/6
6/6
6/6
Matthew Bonning – Snook 6/6
Jack Pitman
Duncan Walker
Antony Beevor
Wilf Weeks
Andrew Gulliford
Michael O’Donnell
6/6
4/4
6/6
5/6
6/6
4/4
n/a
n/a
n/a
n/a
n/a
n/a
n/a
3/3
2/3
3/3
1/1
n/a
n/a
n/a
n/a
n/a
n/a
n/a
4/4
3/4
4/4
2/2
4/4
n/a
n/a
n/a
n/a
n/a
n/a
4/4
3/4
4/4
1/1
Annual evaluation of the Board and its Committees
The annual evaluation process involves each director submitting an
appraisal in respect of the performance of the main Board, of each
member of the Board and in respect of each Board Committee of which
they are a member. The non-executive directors, led by the Senior
Independent Director, are responsible for the performance evaluation
of the Chairman, taking into account views of executive directors. Each
director completes an evaluation of the Chairman’s performance and
provides this evaluation to the Senior Independent Director.
During the year the Board undertook a formal evaluation of its own
performance and that of its Committees and individual directors in the
period and the Chairman reported the results of that evaluation process to
the Board. The most signifi cant issue arising from the evaluation process
concerned the succession of the current Chief Executive, Michael Slade.
In the light of this issue being raised the Chairman engaged in a review of
the business needs of the Company with regard to the composition of the
Board. The Chief Executive, Michael Slade, was asked to continue his
tenure on the Board for the next fi ve years and, as referred to in the Letter
from the Chairman of the Nominations Committee on page 45, he
confi rmed his willingness and enthusiasm to continue leading the
Company for that period. The Senior Independent Director reported that
there were no matters arising from the evaluation of the Chairman that
necessitated any action or required a meeting to be held without the
Chairman present.
Directors – information and professional development
The Board is supplied in a timely manner with information in a form and of
a quality appropriate to enable it to discharge its duties and its directors
are free to seek any further information they consider necessary. Under
the direction of the Chairman, the Company Secretary’s responsibilities
include ensuring good information fl ows within the Board and its
Committees and between senior management and non-executive
directors, as well as facilitating induction and assisting with professional
development as required. The Company Secretary is responsible for
advising the Board through the Chairman on all governance matters.
The Board ensures that directors, especially non-executive directors,
have access to independent professional advice at the Group’s expense
where they judge it necessary to discharge their responsibilities as
directors. Training is available for new directors and other directors as
necessary. All directors have access to the advice and services of the
Company Secretary, who is responsible to the Board for ensuring that
board procedures are complied with.
Committees of the Board
The report of the Chairman of the Remuneration Committee and the
report of the Chairman of the Audit Committee are found on pages 49
and 57 respectively of this Annual Report. The report of the Nomination
Committee can be found on page 45.
43
Relations with shareholders
The Group values the views of its shareholders and recognises their interest
in the Group’s strategy and performance, Board membership and quality of
management. It therefore holds regular meetings with, and presentations
to, its institutional shareholders to discuss its results and objectives. The
Group also regularly meets, with the help of its brokers, institutions that do
not currently hold shares in the Group to inform them of its objectives.
Michael Slade, as Chief Executive, attends most of these meetings and is
usually accompanied by one of the other executive directors.
Since the end of the fi nancial year under review, Andrew Gulliford as
Chairman of the Remuneration Committee, has engaged with principal
shareholders (holding more than 3% of the Company’s shares) and
shareholder representative bodies, to seek their approval for a new,
codifi ed, Performance Related Cash Bonus Scheme as detailed on page 53.
The Chairman, Giles Weaver, has also engaged with principal
shareholders and shareholder representative bodies since the year end,
regarding the proposed changes to the Board due to become effective
on the date of the Annual General Meeting.
The AGM is used to communicate with private investors and they are
encouraged to participate. The Chairman, Senior Independent Director
and members of the Audit, Remuneration and Nominations Committees
are available to answer questions. Separate resolutions are proposed on
each issue so that they can be given proper consideration and there is a
resolution to consider the annual report and accounts. The Group counts
all proxy votes and will indicate the level of proxies lodged on each
resolution, after it has been dealt with by a show of hands.
The Group communicates with all shareholders through the issue of
regular press releases and through its website at www.helical.co.uk.
The Group receives regular reports from sector analysts and its investor
relations advisors on how it is viewed by its shareholders.
corporate governance review helical bar plc 2012
Going Concern
The directors have reviewed the current and projected fi nancial 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 fi nance and related cash fl ows
• Future property valuations and its impact of covenants and potential
loan repayments:
• Committed future expenditure
• Future rental income and bad debts
• Payment timings and value of trade receivables
The forecast cashfl ows have been sensitised to eliminate those cash
infl ows which are less certain and to take account of a 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.
Internal control and risk management
The Board is responsible for maintaining a sound system of internal
control to safeguard shareholders’ investment and the Group’s assets.
Such a system is designed to manage, but cannot eliminate, the risk of
failure to achieve business objectives. There are inherent limitations in
any control system and, accordingly, even the most effective system can
provide only reasonable, and not absolute, assurance against material
misstatement or loss.
The key features of the Group’s system of internal control are as follows:
• clearly defi ned organisational responsibilities and limits of authority.
The day-to-day involvement of the executive directors in the running
of the business ensures that these responsibilities and limits are
adhered to;
• fi nancial controls and review procedures;
• fi nancial information systems including cash fl ow, profi t and capital
expenditure forecasts. The Board receives regular and comprehensive
reports on the day-to-day running of the business;
44
• an Audit Committee which meets with the auditors and deals with any
signifi cant internal control matter. In the year under review the
Committee met with the Auditors on two occasions.
The Board is responsible for the management of the Group’s risk profi le.
An analysis of the Group’s risk strategy can be found on page 7.
Internal audit
The Board reviewed its position during the year to 31 March 2012 and
reaffi rmed its stance that in view of the relatively small size of the Group
it does not consider that an Internal Audit function would provide any
signifi cant additional assistance in maintaining a system of internal controls.
Charitable and Political Donations
The Company continues to support charitable causes and in the year to
31 March 2012, made charitable donations of £21,742. Further details
are provided in the Corporate Responsibility Report on page 39. The
Company’s policy with regard to political donations is to ensure that
shareholder approval is sought before making any such payments. No
shareholder approval has been sought and, accordingly, the Company
made no political donations in the year to 31 March 2012.
corporate governance review helical bar plc 2012
letter from the chairman of
the nominations committee
45
Dear shareholder,
In accordance with the UK Corporate Governance Code, the role of the
Committee, and my primary responsibility as its Chairman, is to ensure that
the Company is headed by an effective Board which is collectively responsible
for the long-term success of the Company. This is best achieved through
the provision of entrepreneurial leadership and a talented executive team,
supported by committees with an appropriate balance of skills, experience,
independence and knowledge of the company to be able to constructively
challenge and assist the executive team in achieving its objectives. In the
year to 31 March 2012, the Committee comprised Antony Beevor, Andrew
Gulliford, Wilf Weeks, Michael O’Donnell (from June 2011) and me.
During the year, the main focus of the Committee was succession planning,
both for the executive team and the non-executive directors. In early
2011 the Committee identifi ed a need for an additional independent
non-executive director and appointed search fi rm, Hanson Green, to
assist in this process. After considering a number of candidates, the
Committee recommended to the Board the appointment of Michael
O’Donnell, who was appointed to the Board on 24 June 2011. At the
same time the Committee also recommended to the Board the promotion
of Duncan Walker who joined the Company in August 2007. Duncan has
primary responsibility for the Company’s retail investments.
The results of the annual Board evaluation process held during the year
identifi ed a number of other succession issues. The Company’s Chief
Executive, Michael Slade, joined the Board in 1985 and turned this previously
small engineering company into a highly successful real estate company.
He has led the Company for over 25 years and is the Company’s largest
shareholder. I have asked Michael to consider continuing in his current
position of Chief Executive for the next fi ve years and am pleased that he
has indicated his willingness and enthusiasm to do so. The Company’s
Finance Director, Nigel McNair Scott, has been in charge of the fi nances
since 1987 and has informed the Committee that he intends to retire as
Finance Director at the forthcoming Annual General Meeting. In addition,
I have been on the Board for nearly 19 years, the last seven as Chairman.
Antony Beevor, Chairman of the Audit Committee, has been on the Board
for 12 years. Both Antony and I are considered to be non-independent under
Corporate Governance best practice and we both believe it is appropriate
that we stand down from the Board. Wilf Weeks has also indicated his
wish to retire from the Board. The consequence of these changes is that
we are looking to make a number of new appointments to the Board
immediately after the Annual General Meeting.
Tim Murphy, who joined the Company in 1994, will be promoted to
Finance Director at the conclusion of the Annual General Meeting and
will retain his role as Company Secretary until a suitable successor is
appointed. The executive team will, therefore, comprise Michael Slade,
Tim Murphy, Gerald Kaye, Matthew Bonning-Snook, Jack Pitman and
Duncan Walker.
In the knowledge of the proposed changes, the Committee has undertaken
a review of the balance of the Board and set out a number of objectives
in its search for new non-executive directors. In the light of my imminent
retirement, the main concern of the Committee has been to ensure that
the long term succession issue of who is to replace Michael Slade as Chief
Executive is handled by a Chairman with a good understanding of the
Company. I am pleased that Nigel McNair Scott has accepted the request
of the Committee to continue his involvement with the Company and to
act as Chairman following my retirement. Conscious that this appointment
may not be seen to be in accordance with best practice under the UK
Corporate Governance Code, we have engaged in an extensive consultation
process with shareholders and representative bodies and have received
indications that there will be considerable support for Nigel’s re-election
at the AGM and his appointment as Chairman at its conclusion.
Since Nigel will not be regarded as independent, the Committee determined
that it is essential that the Board be strengthened by the appointment of
two new independent directors. The Committee appointed search fi rm
Norman Broadbent to assist in this process. Their brief was to provide a
list of potential candidates to satisfy two perceived gaps in the ongoing
non-executive team. The fi rst was for a director with City experience who
could become the Senior Independent Director and provide a signifi cant
level of leadership and support for the rest of the non-executive team.
The second was for a director who has recent and relevant fi nancial
experience to replace Antony Beevor as Chairman of the Audit Committee.
In considering potential candidates, the Committee, conscious of the
recommendations of Lord Davies, asked Norman Broadbent to ensure
that women candidates were identifi ed and included in their search.
After an extensive search, and having interviewed a number of strong
candidates, I am pleased that we have identifi ed two excellent individuals
in Richard Gillingwater, who will become the Board’s Senior Independent
Director, and will serve on all the Board’s committees, and Richard Grant,
who will serve as the Chairman of the Audit Committee and as a member
of the other two committees. Further details of these two new directors
appear on page 47. Both of these appointments will become effective
immediately after the Annual General Meeting and at that point the
non-executive team of directors will comprise Nigel McNair Scott
(Chairman), Richard Gillingwater (Senior Independent Director), Andy
Gulliford (Chairman of the Remuneration Committee), Richard Grant
(Chairman of the Audit Committee) and Michael O’Donnell.
I am extremely grateful to the two continuing non-executive directors,
Andy Gulliford and Michael O’Donnell, who have been instrumental in
the process of appointing these new directors.
With regard to my retiring colleagues, Antony and Wilf, I would very much
like to thank them for their substantial contribution to your Company for
many years and particularly to Antony for his masterful management of
the Audit Committee.
Annual General Meeting
At the Annual General Meeting to be held on 24 July 2012 the following
resolutions relating to the appointment of directors are being proposed:
• The re-election of Nigel McNair Scott as a director who will
subsequently be appointed non-executive Chairman;
• The re-election, as executive directors, of Michael Slade, Gerald Kaye,
Matthew Bonning-Snook, Jack Pitman and Duncan Walker; and,
• The re-election, as independent non-executive directors, of Andy
Gulliford and Michael O’Donnell.
I trust that shareholders will support the Committee and vote in favour of
these resolutions.
It has been a privilege to serve on this exceptional Company’s Board for
19 years and to be Chairman for seven years. I shall be sad to relinquish
my association with such a dynamic and successful team of people after
so long. However, I believe that the Company, the executives and the
portfolio of investment properties and developments are poised for a
successful future. This success should be further enhanced by a
refreshed Board and a new Chairman.
Giles Weaver
Chairman of the Nominations Committee
20 June 2012
letter from the chairman of the nominations committee helical bar plc 2012
report of the nominations
committee
Shareholder consultation
On appointment as the new Chairman of the Company, Nigel McNair
Scott will not be regarded as independent by shareholders and their
representative bodies. In the light of this, the current Chairman, Giles
Weaver, has conducted an extensive consultation exercise with the
Company’s largest investors and representative bodies, to explain the
rationale behind this appointment. Whilst concern has been expressed by
some shareholders that such an appointment is not in accordance with
the UK Corporate Governance Code, the Committee is confi dent that
Nigel McNair Scott is the most appropriate candidate for the role. This
role will specifi cally require him to ensure that the long term succession
issue of who replaces Michael Slade as Chief Executive is handled in the
best interests of shareholders. In discharging this task, he will be assisted
by four independent non-executive directors, from whom the next
Chairman of the Company is expected to be identifi ed.
Directors’ re-election
The Committee has been informed that Giles Weaver (Chairman),
Antony Beevor and Wilf Weeks will not be offering themselves for
re-election at the 2012 Annual General Meeting, to be held on 24 July
2012. Nigel McNair Scott will offer himself for re-election and, if re-
elected, be appointed non-executive Chairman of the Company. The
Board continues to believe that the requirements of Code Provision B.7.I
of the UK Corporate Governance Code, issued in June 2010, should be
fulfi lled. This provision requires all directors of FTSE350 companies to
be subject to annual re-election by shareholders. Whilst the Company
is no longer in the FTSE350 the Board has chosen to comply with this
provision as it accepts that shareholders should annually have the right
to vote on each director’s re-election to the board. The Nominations
Committee confi rms to shareholders that, following the annual formal
performance evaluation, these directors continue to be effective and
demonstrate commitment to their roles.
Biographical details of the directors are given on page 47.
The nominations committee
The Nominations Committee is chaired by Giles Weaver. The other
members of the Committee during the year under review were Antony
Beevor, Andrew Gulliford, Wilf Weeks and Michael O’Donnell (on his
appointment to the Board). None of the Committee members has any
personal or fi nancial interest in the matters to be decided (other than
as shareholders), potential confl icts of interest arising from cross-
directorships nor any day-to-day involvement in running the business.
At the 2012 AGM, Giles Weaver, Antony Beevor and Wilf Weeks will
retire from the Committee (and the Board). Immediately following the
2012 AGM Nigel McNair Scott will be appointed Chairman of the
Committee and Richard Gillingwater and Richard Grant will be appointed
to the Committee.
Board appointments
Appointments to the Board and its Committees are made on merit and
against objective criteria. Care is taken to ensure that appointees have
enough time available to devote to the job. The Nominations Committee
controls the process for Board appointments and makes
recommendations to the Board.
46
The terms of reference of the Nominations Committee are available by
request and are included on the Group’s website at www.helical.co.uk.
Advisors to the Committee
During the year under review the Committee appointed search
consultants Hanson Green and Norman Broadbent to assist in identifying
candidates for appointment to the Board as non-executive directors.
The work of the Nominations Committee in the year
The Committee met four times during the period and a record of
attendance at these meetings is shown above. Including the matters
referred to in the Letter from the Chairman of the Nominations Committee
on page 45, the Committee considered the following matters during
the year:
• The results of the annual directors’ evaluation process;
• The promotion of Duncan Walker to executive director in June 2011;
• The appointment of Hanson Green and the subsequent appointment
of Michael O’Donnell as an independent non-executive director in
June 2011;
• The re-election of directors at the 2011 Annual General Meeting;
• The appointment of Norman Broadbent to assist in identifying
candidates for appointment as independent directors; and,
• The preparation of a job specifi cation for the appointment of a
new Chairman of the Company.
report of the nominations committee helical bar plc 2012
the board of directors and
senior management
Chairman
Giles Weaver, FCA, was appointed to the Board as a non-executive
director in 1993 and was appointed Chairman following the 2005 AGM.
He is Chairman of the Nominations Committee. A past Chairman of Murray
Johnstone Ltd, he is Chairman of Tamar European Industrial Fund Limited
and a director of Aberdeen Asset Management plc and IRP Property
Investments Limited as well as being Chairman or a director of a number
of investment companies. Giles is to retire at the 2012 AGM. Aged 66.
Non-executive directors
Antony Beevor, MBE, BA, was appointed to the Board as a non-
executive director in 2000. He is the Senior Independent Director
and Chairman of the Audit Committee. He is also a member of the
Remuneration and Nominations Committees. A former Head of
Corporate Finance at Hambros Bank and former Chairman of Croda
International Plc, he is a Deputy Chairman of the Takeover Panel.
Antony is to retire at the 2012 AGM. Aged 72.
Executive directors
Chief Executive
Michael Slade, BSc (Est Man) FRICS FSVA, joined the Board as an
executive director in 1984 and was appointed Chief Executive in 1986.
He is President of Land Aid, the property industry charity, Chairman of
the Property Forum, a Fellow of the College of Estate Management,
Fellow of Wellington College, a Trustee of Purley Park and Sherborne
School Foundation and Vice Admiral of the Marie Rose Trust. Aged 65.
Finance Director
Nigel McNair Scott, MA FCA FCT, joined the Board as a non-executive
director in 1985 and was subsequently appointed Finance Director in
1987. He is Chairman of Reaction Engines Limited, a former Chairman
of Avocet Mining plc and a former director of Johnson Matthey plc and
Govett Strategic Investment Trust. Aged 66.
Director
Gerald Kaye, BSc (Est Man) FRICS, was appointed to the Board as an
executive director in 1994 and is responsible for the Group’s development
activities. He has been responsible for completing over 4 million sq ft of
offi ces, retail, leisure and industrial developments. Gerald is the Past
President of the British Council for Offi ces and a trustee of The Prince’s
Regeneration Trust. He is a former director of London & Edinburgh Trust
Plc and former Chief Executive of SPP. LET. EUROPE NV. Aged 54.
Director
Matthew Bonning-Snook, BSc (Urb Est Surveying) MRICS, was
appointed to the Board as an executive director in 2007. Prior to joining
Helical in 1995 he worked for Richard Ellis (now CBRE), and oversees
many of Helical’s offi ce and mixed use developments. Aged 44.
Director
Jack Pitman, MA (Cantab) MRICS, was appointed to the Board as an
executive director in 2007. Before joining the Group in 2001 he was a
director of Chester Properties Ltd. He is responsible for the Group’s
retirement village portfolio and its investment activities. Aged 43.
Director
Duncan Walker, MA (Hons) (Oxon), PG Dip Surveying, joined the Group
in 2007 and oversees a portfolio of investments and developments. In
particular, he is responsible for the recent acquisition of Helical’s shopping
centres. Prior to joining Helical, Duncan led Edinburgh House Estate’s
investment team. Aged 33.
Andrew Gulliford, BSc (Est.Man), FRICS, was appointed to the Board as
a non-executive director in 2006. He is Chairman of the Remuneration
Committee and a member of the Audit and Nominations Committees.
A former Deputy Senior Partner of Cushman & Wakefi eld Healey & Baker,
he is a non-executive director of McKay Securities PLC, IRP Property
Investments Limited and various other companies. Aged 65.
Wilf Weeks, OBE, was appointed to the Board as a non-executive
director in 2005. He is a member of the Audit, Remuneration and
Nominations Committees. Founder and Chairman of GJW Government
Relations, he is a former Chairman of European Public Affairs at Weber
Shandwick. Wilf is to retire at the 2012 AGM. Aged 64.
47
Michael O’Donnell was appointed to the board in June 2011. He is a
former Managing Director of LGV Capital (formerly Legal & General
Ventures), a private equity fi rm where he was responsible for a number
of successful investments in fast growing businesses, often with a
signifi cant property element. In 2009 he established Ebbtide Partners,
a consultant to, and investor in, private companies. He is a member of
the Nominations, Audit and Remuneration Committees. Aged 45.
New non-executive directors (to be appointed
after the 2012 AGM)
Richard Gillingwater, CBE, is the Dean of Cass Business School,
Chairman of CDC Group, a member of the Advisory Boards of TheCityUK
and of the Association of Corporate Treasurers; and a non-executive
director of Scottish and Southern Energy and Hiscox Ltd. He was
previously Chairman of the Shareholder Executive and Joint Head of
Global Corporate Finance at BZW and a non-executive director of P&O,
Debenhams,Tomkins Plc, Qinetiq Group and Kidde plc. Richard will be
the Senior Independent Director on his appointment and will be a
member of the Nominations, Audit and Remuneration Committees.
Aged 55.
Richard Grant, BA (Oxon), ACA is the Finance Director at Cadogan
Estates Limited and former corporate fi nance partner at PwC, whom he
joined in 1975. Richard will become the Chairman of the Audit Committee
and a member of the Nominations and Remuneration Committees.
Aged 58.
Deputy Finance Director and Company Secretary
Tim Murphy, BA (Hons) FCA, joined the Group as Company Secretary
in 1994 and became Deputy Finance Director in 2011. Prior to joining
Helical, he worked for accountants Grant Thornton and KPMG. Tim will
become Finance Director immediately following the 2012 AGM. Aged 52.
the board of directors and senior management helical bar plc 2012
the board of directors and senior management
Directors and their interests
The current directors and their interests, all of which were benefi cial, in the ordinary shares of the Company are listed below. Other than in respect of
the award of shares under the terms of the Company’s Share Incentive Plan on 31 May 2012, there have been no changes in the directors’ interests in
the period from 31 March 2012 to 20 June 2012.
Chairman
Giles Weaver
Executive Directors
Michael Slade
Nigel McNair Scott
Gerald Kaye
Matthew Bonning-Snook
48
Jack Pitman
Duncan Walker
Non-Executive Directors
Antony Beevor
Andrew Gulliford
Wilf Weeks
Michael O’Donnell
Total directors’ interests
Issued share capital
Percentage of issued share capital
Age
Date of
appointment
Title
Committees
Shares held
at 31.3.12
Shares held
at 31.3.11
66
September 1993
Chairman
N(C)
96,250
132,313
65
66
54
44
43
33
72
65
64
45
August 1985
Chief Executive
November 1985
Finance Director
September 1994
Executive Director
June 2007
June 2007
June 2011
Executive Director
Executive Director
Executive Director
April 2000
Non-executive director
S,N,A(C),R
March 2006
Non-executive director
N, A, R(C)
April 2005
June 2011
Non-executive director
N, A, R
Non-executive director
N, A, R
13,427,494
13,623,760
2,710,132
2,706,398
1,530,589
1,526,855
280,260
445,053
11,480
19,569
14,328
7,213
46,000
276,533
441,319
n/a
19,569
14,328
7,213
n/a
18,588,368
18,748,288
118,137,522
118,137,522
15.73%
15.87%
S – Senior independent Director, N – Nominations Committee, N(C) – Chairman of the Nominations Committee, A – Audit Committee, A(C) – Chairman
of the Audit Committee, R – Remuneration Committee, R(C) – Chairman of the Remuneration Committee
Senior management
John Inwood, BSc (Hons) MRICS, joined the Group from Cushman and Wakefi eld in 1995 and is the Head of Asset Management. Aged 46.
Tom Anderson, BSc (Hons) MRICS, joined the Group in 2009 from Allsops where he worked in the National Investment Team. Aged 33.
Oliver Rippier, BA (Hons) MSc Real Estate MRICS, formerly employed by Jones Lang LaSalle and Lloyds Banking Group, joined as a
property analyst and development executive in 2010. Aged 30.
Alastair Oastler, BSc (Hons) FCA, joined the Group as Financial Controller in 2007 having previously worked for Invensys plc and
Compagnie Financiere Richemont SA. Aged 35.
the board of directors and senior management helical bar plc 2012
letter from the chairman of the
remuneration committee
approval for a codifi cation of the scheme, with appropriate shareholder
protections, at the 2012 AGM. Further details and the main terms of
the proposed scheme are detailed below;
• The provision of long-term incentives through the Performance Share
Plan (“PSP”), which was approved by shareholders in 2004, should
continue in its present form until expiry in 2013/14; and
• The Committee reviewed the awards made in accordance with the
terms of the PSP in 2008 and considered the performance of the
Company during the three year performance period to 31 March 2011
and the Committee resolved in July 2011 to make a further award of
shares under the terms of the PSP.
The results of these decisions are outlined in further detail in this report,
together with additional information on the remuneration paid and
payable to the directors of the Group and the short term and long term
incentive schemes.
Annual General Meeting
At the Annual General Meeting to be held on 24 July 2012 the following
resolutions relating to remuneration are being proposed:
49
• The approval of the Directors Remuneration Report for the year ended
31 March 2012.
• The approval of the Helical Bar Annual Bonus Scheme 2012.
• The renewal of the Helical Bar 2002 Approved Share incentive Plan.
I trust that shareholders will support the Committee and vote in favour
of these resolutions.
Andrew Gulliford
Chairman of the Remuneration Committee
20 June 2012
Dear Shareholder,
The year to 31 March 2012 has been one of analysis and scrutiny for
remuneration committees with the implementation of the provisions of
the UK Corporate Governance Code and considerable debate between
politicians and in the media about the appropriate level of remuneration
for the executive directors of listed companies. This debate is likely to
continue in the coming year following the recent consultation by the
Department for Business, Innovation & Skills on executive remuneration
and its expected proposals to signifi cantly increase levels of disclosure of
incentive targets and strengthen the shareholder vote from 2013 onwards.
It is with this background that I present this remuneration report.
Remuneration policy
Helical’s approach to the remuneration of its executive directors is to
provide a basic remuneration package below the median level of its
peers within the listed real estate sector combined with an incentive
based bonus and share scheme structure aligned with the interests of
its shareholders. Remuneration within the real estate sector is monitored
and reviewed regularly to ensure that the Group’s positioning of its
remuneration remains in line with these objectives. In addition to this
external view, the Committee also monitors the remuneration levels of
senior management below Board level and the remuneration of other
employees to ensure that these are taken into account in determining the
remuneration of executive directors and considers environmental, social,
governance and risk issues.
Remuneration issues dealt with during the year
The Committee has considered a number of matters during the fi nancial
year under review and the following decisions were taken:
• Executive directors basic salaries were reviewed in July 2011 and
increases awarded to Gerald Kaye, Matthew Bonning-Snook and
Jack Pitman;
• The basic salary of Nigel McNair Scott was reduced in August 2011
due to his external commitments;
• The salaries payable to non-executive directors were reviewed in July
2011 and increases awarded to Giles Weaver, as Chairman, Antony
Beevor, as Chairman of the Audit Committee and Andy Gulliford, as
Chairman of the Remuneration Committee,
• The Executive Bonus Scheme, established to provide bonuses for the
Chief Executive and the Finance Director, was reviewed and a
resolution to renew the Scheme for a further fi ve years was approved
by shareholders at the 2011 AGM;
• The Annual Performance Related Cash Bonus Scheme, for all other
executive directors, was reviewed in the light of shareholder feedback.
Following extensive consultation with major investors and
representative bodies, the Committee determined to seek shareholder
letter from the chairman of the remuneration committee helical bar plc 2012
directors’ remuneration report
50
The Board recognises that directors’ remuneration is of legitimate
concern to shareholders and is committed to following current best
practice. This report has been prepared in accordance with the
Companies Act 2006 and Schedule 8 of the Large and Medium Sized
Companies and Groups (Accounts and Reports) Regulations 2008, the
Listing and Disclosure and Transparency Rules of the Financial Services
Authority, and the principles and provisions of the UK Corporate
Governance Code as they relate to Directors’ remuneration. It has been
approved by the Board and will be submitted to shareholders for approval
at the Group’s Annual General Meeting to be held on 24 July 2012. Grant
Thornton UK LLP has audited the disclosures of directors’ remuneration
and share awards on pages 54 to 56.
The remuneration committee (“Committee”)
The Committee is chaired by Andrew Gulliford. The other members of the
Committee during the year under review were Antony Beevor, Wilf Weeks
and Michael O’Donnell (on his appointment to the Board). None of the
Committee has any personal or fi nancial interest in the matters to be
decided (other than as shareholders), potential confl icts of interest arising
from cross-directorships nor any day-to-day involvement in running the
business. At the 2012 AGM, Antony Beevor and Wilf Weeks will retire
from the Committee (and the Board) and immediately following the
2012 AGM, Richard Gillingwater and Richard Grant will be appointed
to the Committee.
The Committee has responsibility for determining and agreeing with
the Board the framework or broad policy for the remuneration of the
Chairman, Chief Executive and the executive directors and, subject
to proposals submitted by the Chief Executive, shall recommend
and monitor the level and structure of remuneration for such other
members of the senior management as report directly to the Board.
The remuneration of non-executive directors shall be a matter for the
Chairman and the executive directors to be decided at a meeting of
the Board.
In determining such policy, the Committee shall take into account all
factors which it deems necessary. The objective of the remuneration
policy shall be to ensure that executive directors and senior management
are provided with appropriate incentives to encourage enhanced
performance and are, in a fair and responsible manner, rewarded for
their individual contributions to the success of the Group. Within the
terms of the agreed policy, the Committee shall determine, for the
executive directors:
• the total individual remuneration packages of each executive director
including, where appropriate, basic salaries, bonuses, share awards,
pensions and other benefi ts;
• targets for any performance related remuneration schemes; and,
• service agreements incorporating termination payments and
compensation commitments.
In determining such packages and arrangements the Committee gives
due regard to the recommendations of the UK Corporate Governance
Code and the UK Listing Authority’s Listing Rules.
The terms of reference of the Remuneration Committee are available on
request and are included on the Group’s website at www.helical.co.uk.
Advisors to the Committee
The Committee consults the Chief Executive and Finance Director about
its proposals and has access to professional advice from remuneration
consultants, New Bridge Street, to help it determine appropriate
remuneration arrangements. Terms of reference for New Bridge Street,
which provided no other services to the Company, are available from the
Company Secretary on request.
The executive directors’ remuneration packages
There are three main elements to the executive directors’ remuneration
packages:
• basic annual salary and benefi ts-in-kind;
• annual cash bonus payments, both performance related payments and
those made in accordance with the terms of the Executive Bonus Plan;
and,
• share awards, being the Performance Share Plan and the all-employee
Share Incentive Plan.
Balance of fi xed versus variable pay
In line with its policy, the Committee seeks to ensure that the balance of
remuneration provides a basic salary below the median, and performance
related bonuses and share awards that reward outperformance of the
Group’s peer group. In the year to 31 March 2012 the balance of fi xed
versus variable pay on an actual basis for the executive directors
compared to the maximum payable was as follows:
Actual
£
Share
of total Maximum
£
%
Share
of total
%
Basic salaries and
benefi ts in-kind
2,013,000
90 2,013,000
Annual cash bonus
220,000
10 5,000,000
Executive Bonus Plan
Share awards
–
–
0 2,000,000
0 3,760,000
16
39
16
29
2,233,000
100 12,773,000
100
Note: Share awards refl ect the market value of shares that vested (actual) or could have
vested (maximum) during the year in accordance with the terms of the Group’s
Performance Share Plan.
directors’ remuneration report helical bar plc 2012
Executive directors’ basic annual salary and benefi ts-in-kind
The basic package of salary and benefi ts is designed to match the
experience and responsibilities of each director and is reviewed annually
to ensure that it is consistent and appropriate to their responsibilities
and expectations. The Group does not provide any separate pension
provision for Executive Directors and expects individuals to provide for
their retirement through their basic salaries and incentive payments.
Basic salary levels were last reviewed in July 2011. Executive directors’
current basic annual salaries, together with salaries for the prior year,
are as follows:
Non-executive directors salaries
Salaries payable to non-executive directors were reviewed in the year and
increases awarded to Giles Weaver, Antony Beevor and Andrew Gulliford,
effective from 1 July 2011. The salaries payable to Giles Weaver and
Antony Beevor were last increased in April 2007. The salary payable
to Andrew Gulliford was last increased in February 2010 following
his appointment as Chairman of the Remuneration Committee.
Non-executive directors’ current annual salaries, together with salaries
for the prior year, are as follows:
Giles Weaver
Antony Beevor
Andrew Gulliford
Wilf Weeks
Michael O’Donnell
1 April 2011
£
1 April 2012
£
75,000
42,500
42,500
35,000
35,000*
90,000
50,000
50,000
35,000
35,000
51
* From appointment on 24 June 2011
The Board have resolved that with effect from 1 July 2012, the salaries
payable to non-executive directors will comprise a basic £40,000 plus
an additional £10,000 for the Chairmen of the Audit and Remuneration
Committees and the Senior Independent Director.
Chairman
Following consultation with the Company’s major investors and
representative bodies, it is proposed that Nigel McNair Scott, if re-elected
at the 2012 AGM, will become Chairman of the Company following the
retirement of Giles Weaver. His continuing involvement in the Company’s
affairs will principally concern dealing with the issue of succession
as well as providing guidance and advice on the Company’s strategy.
Accordingly, his day to day involvement in the Company’s affairs will
exceed those of his predecessor and in recognition of this, the Board
have resolved to pay him an annual salary of £150,000 pa.
Michael Slade
Nigel McNair Scott
Gerald Kaye
Matthew Bonning-Snook
Jack Pitman
Duncan Walker
1 April 2011
£
1 April 2012
£
500,000
335,000
325,000
275,000
275,000
175,000
500,000
235,000
375,000
300,000
300,000
250,000
The salaries of Matthew Bonning-Snook and Jack Pitman were increased
by circa 9% on 1 July 2011 to refl ect infl ationary rises since their last
increase on 1 July 2009 while the salary of Gerald Kaye was increased
by circa 15% to refl ect both an infl ationary rise over that period and
additional responsibilities undertaken. The salary of Nigel McNair Scott
was reduced to £235,000 on 1 August 2011 to refl ect his reduced
responsibilities following his appointment as High Sheriff of Hampshire for
2011/12. The salary of Duncan Walker was increased to £250,000 as
from 1 April 2012 to refl ect his appointment to the Board of the Company.
Going forward, the Committee has resolved that the basic salaries of
executive directors should be reviewed annually and increased to refl ect
an appropriate level of salary infl ation. Accordingly, the basic salary levels
of Gerald Kaye, Matthew Bonning-Snook and Jack Pitman will be
increased by 3% from 1 July 2012. Mr Slade has advised the Committee
that he will not be taking an infl ationary increase this year, thereby
retaining his current salary level. Nigel McNair Scott is to become
non-executive Chairman and will not receive an increase and Duncan
Walker is not eligible for this year’s infl ationary increase given the increase
in his basic salary he received following his appointment to the Board.
Benefi ts-in-kind provided to executive directors comprise the provision
of a company car or car allowance and health insurance.
directors’ remuneration report helical bar plc 2012
directors’ remuneration report
Annual cash bonus payments
Executive Bonus Plan
During the year Shareholders approved the renewal of the existing
Executive Bonus Plan, previously approved in 2006. The renewed plan
(“2011 Plan”) contains the same features and performance targets as
its predecessor and is designed to align the motivations of the Chief
Executive and Finance Director with the interests of shareholders and
to link their remuneration to the performance of the Group’s property
portfolio. Michael Slade and Nigel McNair Scott were eligible for Executive
Bonus Plan bonuses during the year. No Executive Plan Bonuses have
been paid in respect of the year to 31 March 2012 (2011: nil).
The Committee may, at its discretion, award bonuses in respect of a
fi nancial year subject to performance conditions, the aim of which is to
link the size of bonuses paid to the fi nancial growth of the Group over
that fi nancial year. No bonus will be payable unless the following
conditions are satisfi ed:
• Increase in net asset value; net asset value at the end of the fi nancial
year exceeds net asset value at the beginning of the fi nancial year;
52
• Absolute performance of the portfolio – ungeared total return; the
percentage increase in the total return on property assets of the Group
over the fi nancial year (the “Performance Period”) is greater than the
percentage increase achieved by the portfolio ranked nearest to
threequarters up the performance table (taken in ascending order of
return) (the “Upper Quartile”) of the portfolios of all quarterly valued
funds measured by the Investment Property Databank at the beginning
of the relevant Performance Period and compounded monthly during
the Performance Period (the “IPD Total Return Benchmark”); and,
• Performance of the net asset value per share; the percentage increase
in net asset value per share for the Performance Period must be
greater than the percentage increase achieved by the Upper Quartile of
the portfolios of all quarterly valued funds measured by the Investment
Property Databank at the beginning of the relevant Performance Period
and compounded monthly during the Performance Period (the “IPD
Capital Growth Benchmark”).
The Committee will recommend the size of the bonus payable by
reference to the same sliding scale based on the amount by which the
increase in net asset value per share exceeds the increase in the Upper
Quartile of the IPD Capital Growth Benchmark, subject to a £2m cap. The
total amount of the bonuses payable in any one year shall be determined
by:
• Calculating the difference between the percentage increase in net
asset value per share for the Performance Period and the percentage
increase in the Upper Quartile of the IPD Capital Growth Benchmark
over the same period (the “Difference”); and,
• Calculating the sum of the amounts payable in relation to each 1%
of the Difference on the following basis:
Amount of Difference
Less than 1%
1% to less than 2%
% of base net asset
value payable
0.01
0.02
And thereafter for every additional 1%
An increment of 0.01
For example: From 4% to less than 5%
0.05
If the net asset value at the end of a fi nancial year is less than the net
asset value at the beginning of that year, the bonus payable for any
subsequent year will be calculated by reference to the highest net asset
value in the preceding year.
The total amount payable under the 2011 Plan in any one year is limited
to £2m (2010: £2m). An individual employee’s participation in the 2011
Plan is limited so that the bonus which may be paid to him under the
2011 Plan will not exceed £1.5m per annum. There is a further limit that
payments under the 2011 Plan in any year may not exceed 20% of the
Group’s pre-tax profi ts plus any payments under the 2011 Plan. Among
other constraints the Committee could restrict the bonuses if payment
would affect the fi nancial or trading position of the Group.
Following feedback received during the investor consultation in respect
of the codifi cation of the bonus arrangement set out below, the
Committee agreed that future participants in this scheme who do not
have a minimum shareholding in the company of 2 times salary should
receive up to one third of any bonus in deferred shares.
Performance related cash bonus scheme
For executive directors other than the Chief Executive and Finance
Director, the Group operated a performance related cash bonus scheme
during the year. Under the terms of this scheme, the Committee
establishes the objectives which must be met for performance related
cash bonuses to be paid. The calculations of the performance related
cash bonuses payable to each participant are directly related to the
profi ts generated by the participants. In each case these profi ts are
recognised in the accounts of the year in which the bonus is accrued and
these profi ts will have been received by the time the bonuses are paid.
Any losses on other projects are deducted from the profi ts, as are all
costs directly attributable to the generation of the profi ts, including all
fi nance costs and an apportionment of central overheads. The net profi ts
generated by each participant are available as a bonus pool and bonus
payments are made based on individual performance. Bonuses are
calculated in a range of 0 to 10% of the bonus pool with appropriate
percentages depending on the level of equity contributed to each
property and risks assumed. Gerald Kaye, Matthew Bonning-Snook,
Jack Pitman and Duncan Walker were eligible for performance related
cash bonuses in the period under review. The maximum amount payable
in respect of the year was a total of £5m. Payment of these performance
related cash bonuses is at the discretion of the Committee. In the year
under review, performance related cash bonuses were paid to Matthew
Bonning-Snook (£105,000) and Duncan Walker (£115,000).
directors’ remuneration report helical bar plc 2012
Proposed Helical Bar Annual Bonus Scheme 2012
The performance related cash bonus scheme referred to above has been
reviewed by the Committee and, following an extensive consultation
exercise with the Company’s largest investors and representative bodies,
approval is being sought at the 2012 AGM for a codifi cation of the scheme
which will be renamed the Helical Bar Annual Bonus Scheme 2012. This
scheme, if approved by shareholders, will provide annual cash bonuses,
based on the performance of the Group’s property portfolio and is aligned
with shareholders through a profi t sharing model, with appropriate hurdles
and shareholder protections (including deferral and clawback). While full
details of the proposed scheme are set out in the Notice of AGM, the main
features of the plan will, subject to shareholder consent, be as follows:
• The proposed scheme will be introduced from 1 April 2012.
• The initial scheme participants will be Gerald Kaye, Matthew Bonning-
Snook, Jack Pitman and Duncan Walker. It is not intended that either the
Chief Executive or Finance Director participate in the Scheme given their
participation in the Executive Bonus Plan.
• All current and future property assets will be allocated to one of two pools
namely an “Investment Pool” and a “Development Pool” (“Profi t Pools”).
• Investment assets will be included at valuation as at 31 March 2012 with
subsequent valuation movements increasing or decreasing the size of
the relevant Profi t Pool (as is currently the case under the existing bonus
arrangement). Development assets will also be included at valuation as
at 31 March 2012 with subsequent valuation movements increasing or
decreasing the size of the Profi t Pool. Any opening surpluses or defi cits in
the value of the trading and development assets as at 31 March 2012 will
only be included in the Profi t Pools once they are realised.
• Net rents and profi ts/losses on the sale of property assets will be
allocated to the relevant Profi t Pools.
• Profi ts in the two Profi t Pools will be eligible for the award of bonuses
once they are suffi cient to exceed the recovery of all related fi nance costs,
a charge for the use of the Company’s equity at a rate equivalent to the
Company’s weighted average cost of debt plus a margin (reviewed
regularly to refl ect any changes in the cost of debt and the risk profi le of
the Company’s activities), the Group’s total administrative costs (excluding
performance related remuneration) and any unallocated losses from the
previous three fi nancial years.
Shareholder Protections
• Consistent with the existing arrangement, no more than 10% of profi ts
will be available to participants for distribution (“Bonus Award Pool”) at the
end of the relevant fi nancial year. Pool allocations between participants
will be based on a set formula agreed at the start of the fi nancial year.
• The distribution of the Bonus Award Pools to participants will be
restricted in any fi nancial year to the lower of 70% of the balance of the
Bonus Award Pool and 300% of salary (except in years fi ve and ten as
noted below). Any excess will be deferred and carried forward to the
subsequent year to form part of the Bonus Award Pool for the
subsequent year(s).
53
• Two thirds of any payment will be made in cash after the relevant fi nancial
year end and one third will be deferred for three years into Helical Bar plc
shares.
• In addition to any annual payments, at the end of the fi fth and tenth years
of operating the scheme, any Bonus Award Pool not paid out will be
distributed to participants in the form of deferred shares for 3 years,
subject to an individual limit of 300% of salary each time.
• No payments will be made where the Company has not generated a profi t
(amounts will be deferred until a profi t is generated). In addition, the
Remuneration Committee will retain discretion to increase the deferred
share amount (up to 100% of the payment) or not to make a payment at
all (with any amounts reverting back to the Company rather than remaining
in the Bonus Award Pool) where it is considered appropriate to do so.
• Net losses will be carried forward in Profi t Pools for offset against future
net profi ts. Carry forward of losses will be for a minimum of three years,
subject to extension at the request of the Remuneration Committee
• The scheme will operate a clawback provision whereby amounts
deferred, amounts held in Bonus Award Pools or the net of tax amounts
paid may be recovered in the event of a misstatement of results, an error
being made in assessing the calculation of Bonus Award Pools or in the
event of gross misconduct.
• The share of any increase in value of the Company (measured as the
increase in net asset value plus cash returned as dividends) that could
accrue to all executives through the Group’s long and short-term
incentive and bonus plans at maximum vesting/payouts will continue to
be no more than 20%.
Other matters
• Shareholder approval for the Plan will be sought for 10 years from 1 April
2012 although the Remuneration Committee will review the operation of
the Plan after 5 years.
• Awards may be satisfi ed through shares purchased in the market or by
new issue or Treasury Shares. Where new issue or treasury shares are
used, the ABI’s 5% in 10 year dilution limit will apply.
• Bad leavers will lose their entitlement to future distributions of Bonus
Award Pools or unvested deferred shares. Good leavers (e.g. retirement
with the Company’s agreement, redundancy or any other reason at the
discretion of the Committee) would cease to accrue future amounts into
future Bonus Award Pools although would continue to receive deferred
share awards and any remaining amounts held in the Bonus Award Pools
for a period of 3 years from cessation.
• On a change of control of the Company, any amounts accrued over the
fi nancial year up to the relevant date, and any amounts held within the
Bonus Award Pools, and any deferred shares would be distributed.
A detailed summary of the arrangements is set out in the Notice of AGM.
directors’ remuneration report helical bar plc 2012
directors’ remuneration report
Performance Share plan
The Performance Share Plan (“PSP”), which was approved by shareholders
in 2004 and is the Company’s primary long-term incentive arrangement,
rewards participants for net asset value growth and performance relative
to an industry comparator over a three year period. The Plan is designed
to encourage long term performance and participants are required to
retain shares acquired for at least two years after vesting. The main
features of the plan are as follows:
• Awards will normally vest no earlier than the third anniversary of their
grant to the extent that the applicable performance conditions (see
below) have been satisfi ed and the participant is still employed by the
Group. Once exercisable, awards will remain capable of exercise for a
period of normally no more than six months.
• No award may be granted to an individual in any fi nancial year over
shares worth more than 3 times salary.
54
• There are two performance conditions, one based on absolute growth
in the Group’s net asset value per share and the other based on the
gross (ungeared) total property return per share relative to other
property funds as determined by IPD but excluding those funds worth
less than £50m at the start of the three year period. Performance will
be measured over the three years following grant.
o For the growth in net asset value, the “fully diluted triple net” net
asset value as at the start of the fi nancial year in which a grant takes
place will be compared to the value three years later (having added
back dividends):
Annual compound increase after three years % of award vesting
15% p.a. or more
66.7
Between 7.5% p.a. and 15% p.a.
7.5% p.a.
Below 7.5% p.a.
Pro rata between
6.7 and 66.7
6.7
Zero
If UK infl ation (RPI) is higher than 3% per annum over the three year
period then the required compound increases will be raised by the
excess over the 3% per annum average.
o For the Total property return v IPD property funds condition:
Ranking after three years
% of award vesting
Upper quartile or above
33.3
Between median and upper quartile
Median
Less than median
Pro rata between
3.3 and 33.3
3.3
Zero
Provided the net value per share (having added back dividends) increases
over the three year period.
Share awards will lapse where the gross return falls below the IPD
median and where the growth in triple net asset value is below 7.5% per
annum over the three year period.
During the year the performance conditions relating to the fi fth award,
granted on 14 July 2008, were considered. The three year performance
period to 31 March 2011 showed that the net asset value per share,
calculated in accordance with the terms of the PSP, had reduced by
7.6% p.a.
During this three year period the total return of Helical’s property portfolio,
as determined by IPD, was 1.4% compared to the upper quartile of the
IPD Benchmark which showed a return of 1.0%. Therefore, although the
IPD comparison performance criteria had been met, no shares could vest
as the net asset value per share had fallen.
Subsequent to the year end the performance conditions relating to
the sixth award, granted on 9 July 2009, were considered and it was
determined that no shares would vest in respect of this award.
Further details will be included in the 2013 Annual Report.
Awards made to directors under the terms of the PSP which have not yet vested are as follows:
Director
Michael Slade
Nigel McNair Scott
Gerald Kaye
Matthew Bonning-Snook
Jack Pitman
Duncan Walker
Shares
awarded
13.07.10
at 276.10p
Shares
awarded
05.07.11
at 259.25p
Shares
awarded
31.05.12
at 167.50p
543,281
363,998
353,132
298,804
298,804
152,118
578,592
387,656
433,944
347,155
347,155
202,507
895,512
420,895
671,641
537,313
537,313
447,761
Total
shares
awarded
Total
expected
value
£
2,017,395
1,652,000
1,172,549
887,000
1,458,717
1,239,000
1,183,272
1,183,272
802,386
991,044
991,044
742,527
It is currently expected that no shares will vest in respect of the share awards made on 13 July 2010 and that 33% of the shares awarded on 5 July
2011 and 40% of the shares awarded on 31 May 2012 will vest.
directors’ remuneration report helical bar plc 2012
Helical Bar 2002 Approved Share Incentive Plan
On 24 July 2002 the shareholders approved the Helical Bar 2002 Approved Share Incentive Plan (the “Plan”). Under the terms of this Plan employees
of the Group are given up to £3,000 of free shares in any tax year. Participants in the Plan may purchase additional shares up to a value of £1,500
which is matched in a ratio of 2:1 by the Group. Provided participants remain employed by the Group for a minimum of three years they will retain the
free and matching shares.
Shares allocated to, or purchased on behalf of, the directors under the rules of the Plan were as follows:
Michael Slade
Nigel McNair Scott
Gerald Kaye
Matthew Bonning-Snook
Jack Pitman
Duncan Walker
14 June 2011
at 254.6p
30 November 2011
at 169.0p
31 May 2012
at 167.5p
1,917
1,917
1,917
1,917
1,917
1,917
1,818
1,818
1,818
1,811
1,818
1,520
3,425
3,425
3,425
3,420
3,425
3,425
55
Shares held by the Trustees of the Plan at 31 March 2012 were 390,624 (2011: 315,624).
A resolution to renew this Plan will be proposed at the 2012 AGM.
Share options
The Helical Bar 2010 Approved Share Option Scheme is an Inland Revenue approved scheme. Under the terms of this scheme options up to a
maximum value of £30,000 per individual may be granted. This scheme was approved by shareholders at the 2010 Annual General Meeting and
34,713 options were granted during the year to senior employees below Board level.
Share ownership guidelines
Participants will not normally be permitted to sell shares received through the PSP, other than to meet taxation (and national insurance contributions)
liabilities, until they own shares to the value of 2 x salary for directors and 1 x salary for other executives. In addition, and whilst it is not a condition of
their award, directors are encouraged to retain the shares received on the vesting of share awards, net of any requirements to pay personal taxes. To
date, all shares received by the executive directors under the terms of the group’s Performance Share Plan and Share Incentive Plan have been
retained, net of taxes paid, thereby increasing the management’s shareholding in Helical.
Alignment with shareholder interests
The Remuneration Committee has analysed the potential gains that may be made by executives (directors and those below Board level) through the
PSP and other incentive arrangements currently in place. It has concluded that the share of the increase in the value of the Group (measured as the
increase in the net asset value plus cash returned as dividends to shareholders) that could accrue to all executives through the Group’s long and
short-term incentive and bonus plans at the point at which the maximum awards vest might be of the order of 20%. At this point, in absolute terms, the
Group will have increased its triple net asset value by at least 15% per annum with the Group’s relative performance placing it in the top quartile of IPD,
over the three year period.
directors’ remuneration report helical bar plc 2012
directors’ remuneration report
Information subject to audit: Remuneration of directors
Directors’ Remuneration
Remuneration in respect of the directors was as follows:
Salaries and bonuses
Chairman
Giles Weaver
Non-executive directors
Antony Beevor
Wilf Weeks
Andrew Gulliford
Michael O’Donnell*
Executive directors
Michael Slade
Nigel McNair Scott
Gerald Kaye
Matthew Bonning-Snook
Jack Pitman
Duncan Walker*
fees
£000
86
48
35
48
27
500
268
362
294
294
131
56
Salary/ Benefi ts-
Cash
In-kind bonuses
£000
£000
2012
Total
£000
Salary/ Benefi ts-
In-kind
£000
fees
£000
Cash
bonuses
£000
2011
2011
2012
Total Pensions Pensions
£000
£000
£000
–
–
–
–
–
41
36
36
20
21
10
–
–
–
–
–
–
–
–
105
–
115
220
86
48
35
48
27
541
304
398
419
315
256
75
42
35
42
–
500
335
325
275
275
–
–
–
–
–
–
38
32
36
21
24
–
2,477
1,904
151
–
–
–
–
–
–
–
542
–
–
–
542
75
42
35
42
–
538
367
903
296
299
–
2,597
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
2,093
164
* Appointed to the Board on 24 June 2011
Michael Slade was the highest paid director during the year with a total remuneration of £541,000 (2011: Gerald Kaye £903,000).
Information not subject to audit
Other Remuneration Matters
Service contracts
The service contracts of Michael Slade and Nigel McNair Scott operate
from 1 April 2007, those of Gerald Kaye, Matthew Bonning-Snook and
Jack Pitman from 1 March 2010, and that of Duncan Walker from 24 June
2011. No service contract provides for more than a one year notice period.
On termination of employment each director is entitled to a payment in
lieu of notice of basic salary and other contractual entitlements i.e.
provision of car and health insurance. The Group may make payments in
lieu of notice as one lump sum or in instalments, at its own discretion.
If the Group chooses to pay in instalments the director is obliged to seek
alternative income over the relevant period and to disclose the amount to
the Group. Instalment payments will be reduced by any alternative income.
Non-Executive Directors
Non-executive directors are appointed by a Letter of Appointment and
their remuneration is determined by the Board. The appointment
of non-executive directors is terminable on three months’ notice.
Non-executive directors do not participate in any of the Group’s bonus
or share award schemes.
Total shareholder return
The performance criteria of the Helical Bar 2010 Approved Share Option
Scheme requires the Group to exceed certain targets of total shareholder
return. The total shareholder return for a holding in the Group’s shares in
the fi ve years to 31 March 2012 compared to a holding in a broad equity
index is shown in the graph opposite.
directors’ remuneration report helical bar plc 2012
Total shareholder return
Source: Thomson Reuters
125
)
£
(
e
u
a
V
l
75
25
31-Mar-07
31-Mar-08
31-Mar-09
31-Mar-10
31-Mar-11
31-Mar-12
Helical Bar
FTSE 350 Super-sector Real Estate Index
This graph looks at the value, by 31 March 2012, of £100 invested in Helical Bar on 31 March 2007 compared
with the value of £100 invested in the FTSE 350 Super-sector Real Estate Index. The other points plotted are the
values at intervening financial year-ends.
Share price
The market price of the ordinary shares at 31 March 2012 was189.5p
(2011: 270.8p). This market price varied between 163.5p and 275.4p
during the year.
Andrew Gulliford
Chairman of the Remuneration Committee
20 June 2012
report of the audit committee
The audit committee
The Audit Committee is chaired by Antony Beevor. The other members
of the Committee during the year under review were Andrew Gulliford,
Wilf Weeks and Michael O’Donnell (on his appointment to the Board).
None of the Committee members has any personal or fi nancial interest
in the matters to be decided (other than as shareholders), potential
confl icts of interest arising from cross-directorships nor any day-to-day
involvement in running the business. At the 2012 AGM, Antony Beevor
and Wilf Weeks will retire from the Committee (and the Board) and
immediately following the 2012 AGM, Richard Grant will be appointed
Chairman and Richard Gillingwater will be appointed to the Committee.
The Committee endorses the principles set out in the FRC Guidance on
Audit Committees. The Board has formal and transparent arrangements
for considering how it applies the Group’s fi nancial reporting and internal
control principles and for maintaining an appropriate relationship with
its auditors. Whilst all directors have a duty to act in the interests of the
Group, the Committee has a particular role, acting independently from
the executive, to ensure that the interests of shareholders are properly
protected in relation to fi nancial reporting and internal control.
Appointments to the Committee are made by the Board on the
recommendation of the Nominations Committee in consultation with
the Audit Committee Chairman.
The terms of reference of the Audit Committee are available by request
and are included on the Group’s website at www.helical.co.uk.
The work of the audit committee in the year
The Committee met three times during the year and a record of
attendance at these meetings is shown on page 43. It is common
practice at Helical for Audit Committee meetings to be attended by
all Board members who are available, whether or not they are members
of the Committee so that their contribution to the matters discussed
may be obtained.
Matters formally reviewed and discussed by the Committee during the
year included:
• The Group’s compliance with the UK Corporate Governance Code
including its whistle-blowing policies;
• The adoption of a policy and procedures to ensure compliance
with the Bribery Act 2010;
• Review of the group’s policies on equal opportunities and health
& safety;
• Review of the group’s environmental management systems;
• Review of the group’s internal controls;
• The group’s principal risks;
• IT risk and business continuity planning;
• The fi nancial statements of the Group and the Preliminary
Announcement of the annual results to 31 March 2011 and the
Interim Statement on the half year results to 30 September 2011;
• The re-appointment of the Group’s external auditors; and,
• The external auditors independence and the provision of non-audit
services by the external auditors.
The Audit Committee met the external auditors on two occasions to
discuss matters arising from the annual and interim audits.
Audit independence
A policy of reviewing audit independence has been adopted whereby
non-audit services undertaken by the auditors are approved prior to work
being carried out. The audit committee considers the external auditors to
be independent and has satisfi ed itself of the effectiveness of the external
auditors.
The Group’s policy on awarding non-audit work to its auditors is designed
to ensure that the Group receives the most appropriate advice without
compromising the independence of the auditors. Whilst no fee caps or
limits have been set by the Committee, the level of fees would be a factor
in considering whether the auditors’ independence could be affected by
the award of non-audit work.
Annual General Meeting
At the Annual General Meeting to be held on 24 July 2012 the following
resolutions relating to the auditors are being proposed:
• The re-appointment of Grant Thornton UK LLP as Independent
Auditor; and,
• To authorise the Directors to set the remuneration of the Independent
57
Auditor.
I trust that shareholders will support the Committee and vote in favour
of these resolutions.
Antony Beevor
Chairman of the Audit Committee
20 June 2012
report of the audit committee helical bar plc 2012
report of the directors
Principal activities
The principal activity of the Company is that of a holding company and
the principal activities of the subsidiaries are property investment, trading
and development.
Results
The results for the year are set out in the consolidated income statement on
page 62 and consolidated statement of comprehensive income on page 63.
Dividends
An interim dividend of 1.75p (2011: 1.75p) was paid on 22 December
2011 to shareholders on the shareholder register on 2 December 2011.
A fi nal dividend of 3.40p (2011: 3.15p) per share is recommended for
approval at the Annual General Meeting on 24 July 2012. The total
ordinary dividend paid in the year of 4.90p (2011: 2.00p) per share
amounts to £5,707,000 (2010: £2,122,000).
Corporate governance review
The Group’s Corporate Governance Policies, compliance with the UK
Corporate Governance Code and Going Concern statement are set out
on pages 41 to 44 of the Corporate Governance Review.
58
Employees and charitable and political donations
The Group’s policies on employment and details of its policies regarding
charitable and political donations are included in the Corporate
Governance Review on page 44.
Re-appointment of directors
The directors listed on page 47 constituted the Board for the year,
save that Michael O’Donnell and Duncan Walker were appointed on
24 June 2011. At the 2012 Annual General Meeting, Giles Weaver
(Chairman), Antony Beevor (Senior independent Director and Chairman
of the Audit Committee) and Wilf Weeks will step down from the Board.
The remaining directors currently serving will offer themselves for
re-election at the AGM. Immediately following the AGM Nigel McNair
Scott, if re-elected, will be appointed non-executive Chairman of the
Company. Tim Murphy, currently the Deputy Finance Director, will be
appointed to the Board as Finance Director and Richard Gillingwater
and Richard Grant will be appointed as non-executive directors.
Richard Gillingwater will be appointed Senior Independent Director and
Richard Grant will be appointed as Chairman of the Audit Committee.
Details of directors’ remuneration and their interests in share awards
are set out in the Directors’ Remuneration Report on pages 50 to 56.
Directors’ liability insurance and indemnity
The Company has arranged insurance cover in respect of legal action
against its directors. To the extent permitted by UK Law, the Company
also indemnifi es the directors against claims made against them as a
consequence of the execution of their duties as directors of the Company.
Post balance sheet events
There were no reportable events after the balance sheet date of
31 March 2012.
report of the directors’ helical bar plc 2012
Share Capital
At 1 April 2011, 31 March 2012 and 20 June 2012 there were
118,137,522 ordinary 1p shares in issue.
Substantial Shareholdings
At 12 June 2012, the shareholders listed below had notifi ed the Company
of a disclosable interest of 3% or more in the nominal value of the
ordinary share capital of the Group:
Michael Slade – Chief Executive
Aberdeen Asset Managers
Baillie Gifford
BlackRock
Artemis Investment Management
Investec Asset Management
Dimensional Fund Advisors
Number of
ordinary shares
at 12 June 2012
13,430,919
11,588,920
9,828,259
5,829,835
5,215,911
4,831,212
4,181,157
Legal & General Investment Management
4,119,565
%
11.4
9.8
8.3
4.9
4.4
4.1
3.5
3.5
PGGM Investments
4,034,863
3.4
Amendment of articles of association
The Company’s articles of association can be amended only by a special
resolution of the members, requiring a majority of not less than 75% of
such members voting in person or by proxy.
Takeovers Directive
Where not provided elsewhere in this Report of the Directors, the
following provides the additional information required for shareholders as
a result of the implementation of the Takeovers Directive into English law.
The Company’s share capital consists of both ordinary shares and
deferred shares. Each class of shares rank pari passu between
themselves. Details of the Company’s share capital can be found in note
27 to the fi nancial statements. There are no restrictions on the transfer of
the ordinary shares in the Company other than certain restrictions which
may from time to time be imposed by laws and regulations (for example:
insider trading laws) and pursuant to the Listing Rules of the Financial
Services Authority whereby certain employees of the Group require the
approval of the Company to deal in the ordinary shares.
On a show of hands at a general meeting of the Company, every holder
of ordinary shares present in person and entitled to vote shall have one
vote and on a poll every member present in person or by proxy and
entitled to vote shall have one vote for every ordinary share held. The
Notice of the Annual General Meeting specifi es deadlines for exercising
voting rights and appointing a proxy or proxies to vote in relation to
resolutions to be passed at the meeting. The rules governing the
appointment and replacement of Directors and changes to the articles
of association accord with usual English company law provisions.
Subject to the Company’s memorandum of association, the articles of
association, any statute or subordinate legislation for the time being in
force concerning companies and affecting the Company, and directions
given by special resolution, the business of the Group shall be managed
by the Directors, who may exercise all the powers of the Group.
Annual general meeting
The Annual General Meeting of the Company will be held on 24 July 2012
at 11.30 a.m. at The Connaught, Carlos Place, Mayfair, London W1K
2AL. The notice of meeting and the resolutions to be proposed at that
meeting are set out in the enclosed circular and can be found on the
Group’s website at www.helical.co.uk.
Auditors
Grant Thornton UK LLP have expressed their willingness to continue in
offi ce. In accordance with section 489(4) of the Companies Act 2006,
resolutions to reappoint Grant Thornton UK LLP and to authorise the
directors to determine their remuneration will be proposed at the Annual
General Meeting.
By order of the Board
Tim Murphy
Company Secretary
20 June 2012
Statement of directors’ responsibilities
The directors are responsible for preparing the Annual Report and the
fi nancial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare fi nancial statements for
each fi nancial year. Under that law the directors have to prepare fi nancial
statements in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRSs).
Under company law the directors must not approve the fi nancial
statements unless they are satisfi ed that they give a true and fair view of
the state of affairs of the Group and Company and of the profi t or loss of
the Group for that period.
In preparing these fi nancial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable IFRSs have been followed, subject to any
material departures disclosed and explained in the fi nancial statements;
• prepare the fi nancial statements on the going concern basis unless it is
inappropriate to presume that the Group will continue in business.
59
The directors are responsible for keeping adequate accounting records
that are suffi cient to show and explain the Group’s transactions and
disclose with reasonable accuracy at any time the fi nancial position of the
Group and enable them to ensure that the fi nancial statements comply
with the Companies Act 2006 and article 4 of the IAS Regulations. They
are also responsible for safeguarding the assets of the Group and hence
for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
The directors confi rm that:
• in so far as the directors are aware there is no relevant audit
information of which the Group’s auditors are unaware; and,
• the directors have taken all steps that they ought to have taken to
make themselves aware of any relevant audit information and to
establish that the auditors are aware of that information.
We, the directors listed below, confi rm that to the best of our knowledge:
• the fi nancial statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the assets,
liabilities, fi nancial position and profi t or loss of the group and the
undertakings included in the consolidation taken as a whole; and,
• the annual report includes a fair review of the development and
performance of the business and the position of the group and the
undertakings included in the consolidation taken as a whole, together
with a description of the principal risks and uncertainties that they face.
The directors are responsible for the maintenance and integrity of the corporate
and fi nancial information included on the Group’s website. Legislation in the
United Kingdom governing the preparation and dissemination of fi nancial
statements may differ from legislation in other jurisdictions.
On behalf of the Board
Michael Slade
Chief Executive
20 June 2012
Nigel McNair Scott
Finance Director
report of the directors’ helical bar plc 2012
index to fi nancial
statements
61 report of independent auditor
62 consolidated income statement
63 consolidated statement of comprehensive income
64 group and company balance sheets
66 group and company cash fl ow statements
67 group and company statements of changes in equity
68 notes to the fi nancial statements
99 ten year review
60
fi nancial statements helical bar plc 2012
report of independent auditor
Independent auditor’s report to
the members of Helical Bar plc
We have audited the fi nancial statements of Helical Bar plc for the
year ended 31 March 2012 which comprise the consolidated income
statement, the consolidated statement of comprehensive income, the
group and company balance sheets, the group and company cash fl ow
statements, the group and parent company statements of changes in
equity and the related notes. The fi nancial reporting framework that has
been applied in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union
and, as regards the parent company fi nancial statements, as applied in
accordance with the provisions of the Companies Act 2006.
This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a body, for
our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the statement of directors’ responsibilities set
out on page 59, the directors are responsible for the preparation of the
fi nancial statements and for being satisfi ed that they give a true and fair
view. Our responsibility is to audit and express an opinion on the fi nancial
statements in accordance with applicable law and International Standards
on Auditing (UK and Ireland). Those standards require us to comply with
the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the fi nancial statements
A description of the scope of an audit of fi nancial statements is provided
on the APB’s website atwww.frc.org.uk/apb/scope/private.cfm.
Opinion on fi nancial statements
In our opinion:
• the fi nancial statements give a true and fair view of the state of the
group’s and of the company’s affairs as at 31 March 2012 and of
the group’s profi t for the year then ended;
• the group fi nancial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
• the company fi nancial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union and as
applied in accordance with the provisions of the Companies Act 2006;
and
• the fi nancial statements have been prepared in accordance with the
requirements of the Companies Act 2006 and, as regards the group
fi nancial statements, Article 4 of the IAS Regulation.
Separate opinion in relation to IFRSs as issued by the IASB
As explained in Note 1 to the group fi nancial statements, the group in
addition to complying with its legal obligation to apply IFRSs as adopted
by the European Union, has also applied IFRSs as issued by the
International Accounting Standards Board (IASB).
In our opinion the group fi nancial statements comply with IFRSs as issued
by the IASB.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
• the part of the Directors’ Remuneration Report to be audited has been
properly prepared in accordance with the Companies Act 2006;
• the information given in the Directors’ Report for the fi nancial year for
which the fi nancial statements are prepared is consistent with the
fi nancial statements; and
• the information given in the Corporate Governance Statement set out
on pages 41 to 44 with respect to internal control and risk
management systems in relation to fi nancial reporting processes and
about share capital structures is consistent with the fi nancial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if,
in our opinion:
• adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
• the parent company fi nancial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
61
• certain disclosures of directors’ remuneration specifi ed by law are not
made; or
• we have not received all the information and explanations we require
for our audit; or
• a Corporate Governance Statement has not been prepared by the company.
Under the Listing Rules, we are required to review:
• the directors’ statement, set out on page 44 in relation to going concern;
• the part of the Corporate Governance Statement relating to the
company’s compliance with the nine provisions of the UK Corporate
Governance Code specifi ed for our review; and
• certain elements of the report to the shareholders by the Board on
directors’ remuneration.
Charles Hutton-Potts B.Sc., FCA
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
20 June 2012
fi nancial statements helical bar plc 2012
consolidated income statement
Year ended Year ended
31.3.11
£000
31.3.12
£000
Note
52,968
119,059
17,876
14,187
2
3
4
5
20
6
18
7
9
9
34
10
655
–
2,472
113
21,116
3,288
–
24,404
(7,800)
16,604
(8,409)
583
(306)
(1,064)
7,408
158
7,566
(9)
7,575
7,566
(16,642)
(367)
2,886
(358)
(294)
7,512
(1,817)
5,401
(7,050)
(1,649)
(6,992)
652
1,776
(67)
(6,280)
2,391
(3,889)
(2)
(3,887)
(3,889)
(3.6p)
(3.6p)
14
14
6.5p
6.5p
For the year ended 31 March 2012
Revenue
Net rental income
Development property profi t/(loss)
Trading property loss
Share of results of joint ventures
Other operating income/(expense)
Gross profi t/(loss) before net gain on sale and revaluation of investment properties
Net gain on sale and revaluation of investment properties
Impairment of available-for-sale assets
Gross profi t
Administrative expenses
Operating profi t/(loss)
Finance costs
Finance income
Change in fair value of derivative fi nancial instruments
Foreign exchange losses
Profi t/(loss) before tax
Taxation on profi t/(loss) on ordinary activities
Profi t/(loss) after tax
62
– attributable to non-controlling interests
– attributable to equity shareholders
Profi t/(loss) for the year
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
fi nancial statements helical bar plc 2012
consolidated statement of
comprehensive income
For the year ended 31 March 2012
Year ended Year ended
31.3.11
£000
31.3.12
£000
Note
Profi t/(loss) for the year
Other comprehensive income
Impairment of available-for-sale investments
Associated deferred tax on the impairment
Exchange difference on retranslation of net investments in foreign operations
Total comprehensive income/(expense) for the year
– attributable to equity shareholders
– attributable to non-controlling interests
Total comprehensive income/(expense) for the year
18
18
7,566
(3,889)
(3,521)
(12,169)
–
(39)
4,006
4,015
(9)
3,222
(14)
(12,850)
(12,848)
(2)
4,006
(12,850)
63
fi nancial statements helical bar plc 2012
group and company balance
sheets
As at 31 March 2012
Non-current assets
Investment properties held for sale
Investment properties
Owner occupied property, plant and equipment
Available-for-sale investments
Investment in subsidiaries
Investment in joint ventures
Derivative fi nancial instruments
Goodwill
Deferred tax asset
Total non–current assets
Current assets
Land, developments and trading properties
Available-for-sale investments
Trade and other receivables
64
Corporation tax receivable
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Borrowings
Non-current liabilities
Borrowings
Derivative fi nancial instruments
Total liabilities
Net assets
fi nancial statements helical bar plc 2012
Group
31.3.12
£000
Group Company
31.3.12
£000
31.3.11
£000
Company
31.3.11
£000
Note
15
15
17
18
19
20
34
–
–
19,350
19,350
326,876
252,526
–
–
–
–
–
–
1,251
1,497
1,107
1,336
–
–
–
–
–
–
31,173
30,994
40,592
36,064
629
–
793
14
11
9,050
8,879
165
340
–
463
165
715
–
717
378,398
299,773
378,398
319,123
33,248
33,248
33,927
33,927
21
18
22
99,741
147,542
7,003
10,505
101
–
1,125
–
23,076
35,783
324,673
375,751
1,178
1,069
1,250
23
35,411
31,327
26,355
1,069
22,243
166,409
226,226
352,379
400,188
544,807
545,349
385,627
434,115
24
25
25
34
(24,807)
(45,224)
(146,865)
(168,911)
(59,203)
(37,500)
(5,546)
(4,500)
(84,010)
(82,724)
(152,411)
(173,411)
(203,992)
(199,917)
(3,075)
(7,311)
(207,067)
(207,228)
–
(837)
(837)
(9,910)
(3,373)
(13,283)
(291,077)
(289,952)
(153,248)
(186,694)
253,730
255,397
232,379
247,421
group and company balance
sheets continued
As at 31 March 2012
Equity
Called-up share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Other reserves
Retained earnings
Group
31.3.12
£000
Group Company
31.3.12
£000
31.3.11
£000
Company
31.3.11
£000
1,447
1,447
1,447
98,678
98,678
98,678
2,612
7,478
291
3,495
7,478
291
–
7,478
1,987
1,447
98,678
–
7,478
1,987
143,111
143,886
122,789
137,831
Equity attributable to equity holders of the parent
253,617
255,275
232,379
247,421
Non-controlling interests
Total equity
113
122
–
–
253,730
255,397
232,379
247,421
The fi nancial statements were approved by the Board of Directors on 20 June 2012.
Michael Slade
Director
Nigel McNair Scott
Director
65
fi nancial statements helical bar plc 2012
group and company cash fl ow
statements
For the year to 31 March 2012
Cash fl ows from operating activities
Profi t/(loss) before tax
Depreciation
Revaluation gain on investment properties
Loss/(gain) on sales of investment properties
Net fi nancing costs/(income)
Impairment of available-for-sale assets
Impairment of investments
Change in value of derivative fi nancial instruments
Share based payment charge/(credit)
Share of results of joint ventures
Fair value adjustment for disposal of interest in subsidiary
Foreign exchange movement
Other non-cash items
Cash infl ow/(outfl ow) from operations before changes in working capital
Change in trade and other receivables
Change in land, developments and trading properties
Change in trade and other payables
Cash infl ow/(outfl ow) generated from operations
Finance costs
Finance income
Tax paid
66
Cash fl ows from operating activities
Cash fl ows from investing activities
Purchase of investment property
Sale of investment property
Proceeds from sale of derivative fi nancial instruments
Cost of acquiring derivative fi nancial instruments
Cost of cancelling interest rate swap
Investment in joint ventures
Return of investment in joint ventures
Dividends from joint ventures
Sale of plant and equipment
Purchase of leasehold improvements, plant and equipment
Net cash (used in)/generated from investing activities
Cash fl ows from fi nancing activities
Issue of shares
Borrowings drawn down
Borrowings repaid
Equity dividends paid
Net cash generated from/(used in) fi nancing activities
Net increase/(decrease) in cash and cash equivalents
Exchange losses on cash and cash equivalents
Cash and cash equivalents at 1 April
Cash and cash equivalents at 31 March
fi nancial statements helical bar plc 2012
Group
31.3.12
£000
Group Company
31.3.12
£000
31.3.11
£000
Company
31.3.11
£000
7,408
309
(3,664)
376
7,826
–
–
306
35
(2,472)
(4,278)
896
7
6,749
12,503
19,691
(19,617)
19,326
(13,119)
623
–
(12,496)
6,830
(102,750)
50,434
–
(1,276)
(3,102)
–
2,098
500
7
(63)
(54,152)
–
206,637
(149,502)
(5,707)
51,428
4,106
(22)
31,327
35,411
(6,280)
328
(2,670)
(4,842)
6,340
1,817
–
(1,776)
(196)
(2,886)
–
228
2
(9,935)
2,822
38,867
5,079
36,833
(11,264)
465
(68)
(10,867)
25,966
(77,864)
32,810
568
(744)
(71)
(9,520)
1,970
756
2
(189)
(52,282)
27,958
56,536
(61,523)
(5,031)
17,940
(8,376)
(97)
39,800
31,327
(2,697)
260
–
–
(2,098)
–
–
1,604
–
–
–
(838)
7
(3,762)
51,118
1,024
(28,653)
19,727
(4,624)
6,580
–
1,956
21,683
–
–
–
(1,276)
(2,489)
–
–
–
7
(31)
(3,803)
–
6,450
(14,500)
(5,707)
(13,757)
4,123
(11)
22,243
26,355
17,627
284
–
–
(2,929)
1,817
5,295
1,287
–
–
–
2
–
23,383
(23,042)
(157)
(16,542)
(16,358)
(2,066)
5,237
(68)
3,103
(13,255)
–
–
568
(552)
–
–
–
756
2
(146)
628
27,958
6,850
(20,163)
(5,031)
9,614
(3,013)
(2)
25,258
22,243
group and company statements
of changes in equity
For the year to 31 March 2012
Group
At 31 March 2010
Total comprehensive expense
Revaluation surplus
Realised on disposals
Performance share plan
Issue of shares
Dividends paid
At 31 March 2011
Total comprehensive income
Revaluation surplus
Realised on disposals
Performance share plan
Dividends paid
At 31 March 2012
Share
capital
£000
Share Revaluation
reserve
£000
premium
£000
Capital
redemption
reserve
£000
Other
reserves
£000
Retained
earnings
£000
Non-
controlling
interests
£000
1,339
–
–
–
–
108
–
1,447
–
–
–
–
–
1,447
70,828
–
–
–
–
27,850
–
98,678
–
–
–
–
–
98,678
–
–
2,670
825
–
–
–
3,495
–
3,664
(4,547)
–
–
2,612
7,478
–
–
–
–
–
–
7,478
–
–
–
–
–
7,478
291
–
–
–
–
–
–
291
–
–
–
–
–
291
162,547
(12,848)
(2,670)
(825)
(196)
–
(2,122)
143,886
4,015
(3,664)
4,547
35
(5,708)
143,111
124
(2)
–
–
–
–
–
122
(9)
–
–
–
–
113
Total
£000
242,607
(12,850)
–
–
(196)
27,958
(2,122)
255,397
4,006
–
–
35
(5,708)
253,730
For a breakdown of Total comprehensive income/expense see the Consolidated Statement of Comprehensive Income on page 63.
Included within changes in equity are net transactions with owners of £5,673,000 (2011: £25,640,000) made up of: the performance share plan charge of £35,000 (2011: credit of
£196,000), issue of shares of £nil (2011: £27,958,000), dividends paid of £5,708,000 (2011: £2,122,000).
The adjustment to retained earnings of £35,000 adds back the share–based payments charge (2011: credit of £196,000), in accordance with IFRS 2 Share–Based Payments.
Company
At 31 March 2010
Total comprehensive income
Issue of shares
Dividends
At 31 March 2011
Total comprehensive income
Dividends
At 31 March 2012
Share
capital
£000
1,339
–
108
–
1,447
–
–
1,447
Share Revaluation
reserve
£000
premium
£000
Capital
redemption
reserve
£000
Other
reserves
£000
70,828
–
27,850
–
98,678
–
–
98,678
–
–
–
–
–
–
–
–
7,478
–
–
–
7,478
–
–
7,478
1,987
–
–
–
1,987
–
–
1,987
Retained
earnings
£000
152,831
(12,878)
–
(2,122)
137,831
(9,334)
(5,708)
122,789
Total
£000
234,463
(12,878)
27,958
(2,122)
247,421
(9,334)
(5,708)
232,379
67
Total comprehensive income includes the loss after tax of £9,334,000 (2011: £4,592,000), the loss on fair value movements on available–for–sale investments of £nil (2011: £11,508,000),
and the deferred tax credit on these fair value movements of £nil (2011: £3,222,000).
Included within changes in equity are net transactions with owners of £5,708,000 (2011: £25,836,000) made up of: the issue of shares of £nil (2011: £27,958,000) and dividends paid of
£5,708,000 (2011: £2,122,000) .
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.
fi nancial statements helical bar plc 2012
notes to the fi nancial
statements
1. Basis of preparation
These fi nancial statements have been prepared in accordance with applicable International Financial Reporting Standards (“IFRS”), including
International Financial Reporting Interpretations Committee (“IFRIC”) interpretations as adopted by the European Union and as issued by the
International Accounting Standards Board (“IASB”).
The directors have taken advantage of the exemption offered by Section 408 of the Companies Act 2006 not to present a separate income statement
for the parent company.
The fi nancial statements have been prepared in Sterling (rounded to the nearest thousand) under the historical cost convention as modifi ed by the
revaluation of investment properties, available-for-sale investments and derivative fi nancial instruments. The measurement bases and principal
accounting policies of the Group are set out in note 35. These accounting policies are consistent with those applied in the year to 31 March 2011, as
amended to refl ect any new Standards, Amendments to Standards and interpretations which are mandatory for the year ended 31 March 2012.
Status of Adoption of Signifi cant New or Amended IFRS Standards or Interpretations
IAS 24 (revised): Related Party disclosures;
IFRIC 17 Distributions of Non–cash Assets to Owners;
IFRIC 18 Transfer of Assets from Customers;
Disclosures – Transfer of Financial Assets – Amendments to IFRS 7; and
Improvements to IFRSs issued May 2010.
There has been no material impact as a result of adopting the above.
The following standards, interpretations and amendments have been issued but are not yet effective. They will be adopted at the point they are
effective:
IAS 1 (amended): Presentation of items of other comprehensive income (effective 1 July 2012);
IAS 19 (revised): Employee benefi ts (effective 1 January 2013);
IAS 27 (revised): Separate fi nancial statements (effective 1 January 2013);
IAS 28 (revised): Associates and joint ventures (effective 1 January 2013);
Deferred Tax: Recovery of Underlying Assets – Amendments to IAS 12;
Income Taxes (effective 1 January 2012);
IFRS 7 (amended): Disclosures – transfer of fi nancial assets (effective 1 January 2013);
IFRS 9: Financial Instruments: Classifi cation and measurement;
Mandatory effective date and transition disclosures – amendments to IFRS 9 and IFRS 7 (effective 1 January 2015);
IFRS 10: Consolidated fi nancial statements (effective 1 January 2013);
IFRS 11: Joint arrangements (effective 1 January 2013);
IFRS 12: Disclosures in interests in other entities (effective 1 January 2013); and
IFRS 13: Fair value measurement (effective 1 January 2013);
68
The Directors do not expect that the adoption of these Standards and Interpretations in future periods will have a material impact on the fi nancial
statements of the Group.
notes to the fi nancial statements helical bar plc 2012
2. Segmental information
IFRS 8 requires the identifi cation of the Group’s operating segments which are defi ned as being discrete components of the Group’s operations whose
results are regularly reviewed by the Chief Operating Decision Maker (being the Chief Executive) to allocate resources to those segments and to assess
their performance. The Group divides its business into the following segments:
• Investment properties, which are owned or leased by the Group for long-term income and for capital appreciation, and Trading properties which are
owned or leased with the intention to sell; and,
• Development properties, which include sites, developments in the course of construction, completed developments available for sale and pre-sold
developments.
Revenue
Rental income
Development property income
Trading property sales
Other revenue
Total revenue
Investment
and trading Developments
Year ended
Year ended
31.3.12
31.3.12
£000
£000
Total
Year ended
31.3.12
£000
Investment
and trading Developments
Year ended
Year ended
31.3.11
31.3.11
£000
£000
21,391
–
10,131
31,522
1,667
19,666
–
21,333
16,988
–
15,915
32,903
23,058
19,666
10,131
52,855
113
52,968
Total
Year ended
31.3.11
£000
18,590
84,311
15,915
1,602
84,311
–
85,913
118,816
243
119,059
All revenue is from external sales and is attributable to continuing operations. There were no inter-segmental sales.
Revenue for the year comprises revenue from construction contracts of £1,735,000 (2011: £22,978,000), revenue from the sale of goods of
£25,652,000 (2011: £75,824,000), revenue from services of £2,523,000 (2011: £1,667,000), and rental income of £23,058,000 (2011: £18,590,000).
All revenues are within the UK other than rental income from development properties in Poland of £1,052,000 (2011: £958,000) and £2,965,000 (2011:
£23,011,000) of development income derived from the Group’s operations in Poland.
69
notes to the fi nancial statements helical bar plc 2012
notes to the fi nancial statements
Profi t/(loss) before tax
Net rental income
Development property profi t/(loss )
Trading property loss
Share of results of joint ventures
Gain on sale and revaluation of investment properties
Impairment of available-for-sale investments
Other operating income/(expense)
Gross profi t
Administrative expenses
Finance income
Finance costs
Foreign exchange losses
Profi t/(loss) before tax
Investment
and trading Developments
Year ended
Year ended
31.3.12
31.3.12
£000
£000
Total
Year ended
31.3.12
£000
Investment
and trading Developments
Year ended
Year ended
31.3.11
31.3.11
£000
£000
Total
Year ended
31.3.11
£000
16,740
1,136
17,876
13,776
411
14,187
–
–
2,616
3,288
655
–
(144)
–
655
–
2,472
3,288
(367)
2,905
7,512
–
(19)
–
–
(16,642)
(16,642)
22,644
1,647
24,291
23,826
(16,250)
–
113
24,404
(7,800)
583
(8,715)
(1,064)
7,408
(367)
2,886
7,512
7,576
(1,817)
(358)
5,401
(7,050)
652
(5,216)
(67)
(6,280)
Balance sheet
Investment properties held for sale
Investment properties
Land, development and trading properties
Investment in joint ventures
70
Other assets
Total assets
Liabilities
Net assets
31.3.12
£000
–
326,876
2,638
31,919
31.3.12
£000
–
–
97,103
8,673
31.3.12
£000
–
31.3.11
£000
19,350
326,876
252,526
31.3.11
£000
–
–
99,741
40,592
10,288
31,401
137,254
4,663
31.3.11
£000
19,350
252,526
147,542
36,064
361,433
105,776
467,209
313,565
141,917
455,482
77,598
544,807
(291,077)
253,730
89,867
545,349
(289,952)
255,397
All non-current assets are derived from the Group’s UK operations except for Helical’s share of a held for sale investment held at £4,792,000 which is
derived from the Group’s Polish operations.
notes to the fi nancial statements helical bar plc 2012
3. Net rental income
Gross rental income
Rents payable
Property overheads
Net rental income
Net rental income attributable to profi t share partner
Group share of net rental income
Year ended
31.3.12
£000
Year ended
31.3.11
£000
23,058
18,590
(418)
(24)
(3,938)
(3,662)
18,702
14,904
(826)
(717)
17,876
14,187
Property overheads include lettings costs, vacancy costs and bad debt provisions.
The amounts above include gross rental income from investment properties of £21,106,000 (2011: £16,729,000) and net rental income of
£16,490,000 (2011: £13,526,000).
4. Development property profi t/(loss)
Development property income
Cost of sales
Sales expenses
Provision against book values
Development property profi t/(loss)
Year ended
31.3.12
£000
Year ended
31.3.11
£000
19,666
84,311
(13,935)
(85,041)
(565)
(999)
(4,511)
(14,913)
71
655
(16,642)
In accordance with IAS27, development property income includes a £4.3m gain resulting from the sale of 50% of a fully owned subsidiary (see note 20).
5. Trading property loss
Trading property sales
Cost of sales
Sales expenses
Trading property loss
Year ended
31.3.12
£000
Year ended
31.3.11
£000
10,131
15,915
(10,131)
(16,181)
–
–
(101)
(367)
notes to the fi nancial statements helical bar plc 2012
notes to the fi nancial statements
6. Net gain on sale and revaluation of investment properties
Year ended
31.3.12
£000
Year ended
31.3.11
£000
Net proceeds from the sale of investment properties
Book value (note 15)
Tenants incentives on sold investment properties
(Loss)/gain on sale of investment properties
Revaluation surplus on investment properties
Gain on sale and revaluation of investment properties
7. Administrative expenses
Administrative expenses
Operating profi t/(loss) is stated after the following items that are contained within administrative expenses:
Depreciation
– owner occupied property, plant and equipment
Share-based payments charge/(credit)
Auditors’ remuneration:
72
Audit fees
– audit of parent company and consolidated fi nancial statements
– audit of company’s subsidiaries
– interim audit of consolidated fi nancial statements
– internal controls review
Non–audit fees
– PSP review
50,427
32,810
(50,768)
(27,902)
(35)
(376)
3,664
3,288
(66)
4,842
2,670
7,512
Year ended
31.3.12
£000
Year ended
31.3.11
£000
(7,800)
(7,050)
309
35
145
57
40
16
–
328
(196)
140
51
41
–
3
notes to the fi nancial statements helical bar plc 2012
8. Staff costs
Staff costs during the year:
– salaries and other remuneration
– social security costs
– other pension costs
Year ended
31.3.12
£000
Year ended
31.3.11
£000
4,615
4,199
657
136
625
120
5,408
4,944
Details of the remuneration of Directors amounting to £2,482,000 (2011: £2,597,000) are included in the Directors’ Remuneration Report on pages 50
to 56. The amount of the share-based payments charge relating to share awards made to Directors is £29,000 (2011: credit of £165,000).
Other pension costs relate to payments to individual pension plans.
The average number of employees (management and administration) of the Group during the year was 36 (2011: 34) of which 27 are UK staff and 9
are based in Poland.
Of the staff costs of £5,408,000 (2011: £4,944,000), £5,007,000 is included within administrative expenses (2011: £4,544,000) and £401,000 is
included within development costs (2011: £400,000).
9. Finance costs and fi nance income
Interest payable on bank loans and overdrafts
Other interest payable and similar charges
Interest capitalised
Finance costs
Interest receivable and similar income
Finance income
Year ended
31.3.12
£000
Year ended
31.3.11
£000
73
(10,808)
(901)
3,300
(8,409)
583
583
(9,690)
(1,481)
4,179
(6,992)
652
652
On projects where specifi c third party loans have been arranged, interest has been capitalised at the rate for the individual loan. The weighted average
capitalised interest rate of such loans was 3.35% (2011: 2.43%). Where general fi nance has been used to fund the acquisition and construction of
properties the rate used was a weighted average of the fi nancing costs for the applicable borrowings of 4.64% (2011: 4.93%).
notes to the fi nancial statements helical bar plc 2012
notes to the fi nancial statements
10. Taxation on profi t on ordinary activities
The tax credit is based on the loss/profi t for the year and represents:
United Kingdom corporation tax at 24%/26%
– Group corporation tax
– adjustment in respect of prior periods
– overseas tax
Current tax (charge)/credit
Deferred tax at 24%
– capital allowances
– tax losses
– other temporary differences
Deferred tax credit
Tax credit on profi t/(loss) on ordinary activities
Factors affecting the tax credit for the period:
The tax assessed for the period is lower than the standard rate of corporation tax in the UK (24%).
The differences are explained below:
Profi t/(loss) on ordinary activities before tax
Profi t/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 24%/26%
74
Effect of:
– expenses not deductible for tax purposes
– income not subject to UK corporation tax
– capital allowances not refl ected through deferred tax
– tax relief on share awards
– tax losses utilised
– operating profi t of joint ventures
– prior year adjustment
– revaluation surplus not recognised through deferred tax
– chargeable gain in excess of loss on investment property
– overseas tax
– effect of change in rate of corporation tax
– other temporary differences
Total tax credit for the period
Year ended
31.3.12
£000
Year ended
31.3.11
£000
–
153
(163)
(10)
348
1,045
(1,225)
168
158
–
–
(97)
(97)
442
1,823
223
2,488
2,391
Year ended
31.3.12
£000
Year ended
31.3.11
£000
7,408
(1,778)
(6,280)
1,633
(506)
(1,281)
1,695
475
(23)
(1,442)
580
153
880
(82)
(163)
–
369
158
469
553
(123)
(212)
751
–
694
(538)
(97)
(568)
1,110
2,391
Note: all deferred tax balances have been calculated at the rate of corporation tax for the year to 31 March 2013 of 24%. Accordingly, the tax reconciliation also uses this rate of corporation tax.
Factors that may affect future tax charges
The tax charge is expected to be less than the full rate in future years, primarily due to the Group continuing to claim allowances in respect of eligible
expenditure on investment properties and unrealised capital losses at 31 March 2012 of £10m.
notes to the fi nancial statements helical bar plc 2012
11. Deferred tax
Deferred tax provided for in the fi nancial statements is set out below:
Capital allowances
Tax losses
Other temporary differences
Deferred tax asset
Group
31.3.12
£000
Group
31.3.11
£000
Company
31.3.12
£000
Company
31.3.11
£000
(2,467)
(2,815)
10,572
945
9,050
9,527
2,167
8,879
–
–
463
463
(29)
–
746
717
Other temporary differences represent deferred tax assets arising from the recognition of the fair value of derivative fi nancial instruments and future tax
relief available to the Group from capital allowances and when share awards vest.
If upon sale of the investment properties the Group retained all the capital allowances, the deferred tax provision in respect of capital allowances of
£2.5m (2011: £2.8m) would be released and further capital allowances of £7.7m (2011: £10.6m) would be available to reduce future tax liabilities.
12. Dividends paid and payable
Attributable to equity share capital
Ordinary
– interim paid of 1.75p (2011: 1.75p) per share
– prior period fi nal paid of 3.15p (2011: 0.25p) per share
Total dividends paid and payable in year – 4.90p (2011: 2.00p) per share
Year ended
31.3.12
£000
Year ended
31.3.11
£000
2,044
3,663
5,707
1,857
265
2,122
75
An interim dividend of 1.75p was paid on 22 December 2011 to shareholders on the register on 2 December 2011. The fi nal dividend, if approved at
the AGM on 24 July 2012, will be paid on 26 July 2012 to shareholders on the register on 29 June 2012. This fi nal dividend, amounting to £3,973,000,
has not been included as a liability as at 31 March 2012, in accordance with IFRS.
13. Parent company
The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own income statement in the fi nancial
statements. The loss for the year of the Company was £9,334,000 (2011: £4,592,000).
notes to the fi nancial statements helical bar plc 2012
notes to the fi nancial statements
14. Earnings per share
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number
of shares in issue during the year. This is a different basis to the net asset per share calculations which are based on the number of shares at the year
end. 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 per share is based on the basic earnings per share, adjusted to allow for the issue of shares on the assumed
exercise of all dilutive options.
The earnings per share are calculated in accordance with IAS 33, Earnings per Share and the best practice recommendations of the European Public
Real Estate Association (“EPRA”).
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.
Ordinary shares in issue
Weighting adjustment
Weighted average ordinary shares in issue for calculation of basic earnings/(loss) per share
Weighted average ordinary shares issued on exercise of share options
Weighted average ordinary shares to be issued under performance share plan
Year ended
31.3.12
£000
Year ended
31.3.11
£000
118,138
118,138
(1,292)
(8,700)
116,846
109,438
34
63
–
–
Weighted average ordinary shares in issue for calculation of diluted and diluted EPRA earnings/(loss) per share
116,943
109,438
Earnings/(loss) used for calculation of basic and diluted earnings per share
7,575
(3,887)
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
76
Earnings/(loss) used for calculation of basic and diluted earnings per share
Net gain on sale and revaluation of investment properties
Share of net gain on revaluation of investment properties in the results of joint ventures
Tax on profi t on disposal of investment properties
Trading property loss
Fair value movement on derivative fi nancial instruments
Share of fair value movements on derivative fi nancial instruments in the results of joint ventures
Impairment of available-for-sale investment
Deferred tax
Earnings/(loss) used for calculation of diluted EPRA earnings per share
6.5p
(3.6p)
6.5p
(3.6p)
7,575
(3,288)
(581)
(90)
–
306
409
–
(323)
4,008
(3,887)
(7,512)
(583)
1,162
367
(1,776)
162
1,817
3,241
(7,009)
Diluted EPRA earnings/(loss) per share
3.4p
(6.4p)
In accordance with IAS 33 no dilutive weighting adjustments have been made for share awards in existence during the year to 31 March 2011 as a loss
was made during that year making the adjustments anti-dilutive. Accordingly, the basic and diluted losses per share for that year are the same.
The earnings/(loss) used for calculation of diluted EPRA earnings per share includes net rental income and development property profi ts/losses but
excludes trading property losses.
notes to the fi nancial statements helical bar plc 2012
15. Investment properties
Group
Fair value at 1 April
Property acquisitions
Disposals
Revaluation surplus/(defi cit)
Revaluation surplus/(defi cit) attributable to profi t share partner
Freehold Leasehold
31.3.12
£000
31.3.12
£000
Total
31.3.12
£000
Freehold
31.3.11
£000
Leasehold
31.3.11
£000
Total
31.3.11
£000
232,326
102,238
39,550
271,876
212,651
7,250
219,901
512
102,750
44,877
32,987
77,864
(47,158)
(3,610)
(50,768)
(27,902)
–
(27,902)
5,516
(646)
(1,852)
–
3,664
(646)
3,357
(657)
(687)
–
2,670
(657)
Fair value at 31 March
292,276
34,600
326,876
232,326
39,550
271,876
Within Investment Properties held at 31 March 2011 was one property which was classifi ed as being held for sale per IFRS 5. This property was being
marketed for sale at 31 March 2011 and was sold on 17 May 2011. At 31 March 2011 the value of this property was £19,350,000.
A disposal of the investment property portfolio at its stated fair value would crystallise a net payment of £791,000 (2011: £1,062,000) due to the
Group’s joint venture partners in respect of their share of the revaluation surplus.
Interest capitalised during the year in respect of the refurbishment of investment properties amounted to £nil (2011: £nil).
Interest capitalised in respect of the refurbishment of investment properties is included in investment properties to the extent of £5,767,000 (2011:
£5,767,000).
Investment properties with a total fair value of £326,875,000 were held as security against borrowings.
Properties are stated at market value as at 31 March 2012, valued by professionally qualifi ed external valuers except for investment properties valued
by the Directors. The valuations have been prepared in accordance with the Valuation Standards (6th edition) published by the Royal Institution of
Chartered Surveyors (“the Standards”). In their valuation reports, the valuers have noted, in accordance with Guidance Note 5 of the Standards, that
the primary source of evidence for valuations is recent, comparable market transactions on arms length terms. The Directors have valued £5,001,000
(1.5%) of the investment portfolio on a discounted cashfl ow basis representing the present value of future income receivable upon the disposal by
residents of units in the Group’s retirement village portfolio.
The investment properties have been valued at 31 March 2012 as follows:
Cushman & Wakefi eld LLP
Drivers Jonas Deloitte
Directors’ valuation
The historical cost of investment property is £321,970,000 (2011: £264,947,000).
77
31.3.12
£000
31.3.11
£000
321,875
261,975
–
5,001
5,500
4,401
326,876
271,876
notes to the fi nancial statements helical bar plc 2012
notes to the fi nancial statements
16. Operating lease arrangements
The Group earns rental income by leasing its investment properties to tenants under non-cancellable operating leases. At the balance sheet date the
Group had contracted with tenants to receive the following future minimum lease payments:
Not later than one year
Later than one year but not more than fi ve years
More than fi ve years
The Company has no operating lease arrangements.
Group
31.03.12
£000
Group
31.03.11
£000
24,253
68,716
72,166
17,881
47,581
54,615
165,135
120,077
17. Owner occupied property, plant and equipment – Group
Short
leasehold
Plant and
improvements equipment
31.3.12
£000
31.3.12
£000
Cost at 1 April
Additions at cost
Disposals
78
Cost at 31 March
Depreciation at 1 April
Provision for the year
Eliminated on disposals
Depreciation at 31 March
Net book amount at 31 March
2,071
–
–
2,071
897
199
–
1,096
975
727
63
(104)
686
404
110
(104)
410
276
Short
leasehold
Total improvements
31.3.11
£000
31.3.12
£000
2,798
2,071
63
(104)
2,757
1,301
309
(104)
1,506
1,251
–
–
2,071
708
189
–
897
1,174
Plant and
equipment
31.3.11
£000
670
189
(132)
727
395
139
(130)
404
323
Total
31.3.11
£000
2,741
189
(132)
2,798
1,103
328
(130)
1,301
1,497
Plant and equipment include vehicles, fi xtures and fi ttings and other offi ce equipment.
All short leasehold improvements, plant and equipment relate to the Company except for plant and equipment with a net book value of £144,000 as at
31 March 2012 (2011: £161,000).
notes to the fi nancial statements helical bar plc 2012
18. Available–for–sale investments
Non-current Non-current
31.3.11
£000
31.3.12
£000
Current
31.3.12
£000
At 1 April
Interest receivable
Impairment in the year
Fair value adjustments
At 31 March
–
–
–
–
–
13,325
10,505
–
–
(13,325)
(3,521)
–
–
19
7,003
10,505
Current
31.3.11
£000
10,959
207
–
(661)
Included within current available-for-sale investments is an amount lent to a company promoting a mainly residential mixed–use development and an
investment of 20% of the equity of this company.
The loan and the equity are classed as available-for-sale investments and are held at fair value. The Group has determined its fair value by considering
both the loan and the equity element separately. The loan element is valued at the fair value of the expected consideration to be received including
anticipated future costs of recovering this loan. This amount has been impaired in the year due to a revision in the expected receipt. The equity element
is given a nil value with the Group valuing the underlying company on a break up basis at £nil as it is believed that this is the most probable outcome.
This nil valuation is derived because the Group believe that the value of the property and any other of the company’s assets, after the repayment of the
loan payable to the Group, would be required to repay the outstanding creditors leaving negligible value to the shareholders.
Of the movement in the fair value of the loan and equity and the associated deferred tax movement, £19,000 of other fair value movement has been
recognised in the Income Statement and the impairment of £3,521,000 has been recognised in Other Comprehensive Income.
During the year to 31 March 2011, the Group impaired its investment in Quotient Biosciences Group Ltd, a private bioscience company, due to the
deterioration of its trading conditions. Of the impairment of £13,325,000, £1,817,000, representing the cost of our investment, was written off through
the Income Statement as Impairment of available-for-sale investments and the remaining £11,508,000 was written off in Other Comprehensive Income.
In the year to 31 March 2012 the Group sold its investment for nominal consideration.
Movements in the Statement of Comprehensive Income comprise:
Fair value movements of available-for-sale investments
Impairment movements of available-for-sale investments
Deferred tax on fair value movements
Deferred tax on impairments
19. Investment in subsidiaries
At 1 April
Acquired during year
Impairment in the carrying value of investments
At 31 March
2012
£000
–
2011
£000
(661)
(3,521)
(11,508)
(3,521)
(12,169)
79
–
–
–
–
3,222
3,222
Group
31.3.12
£000
Group
31.3.11
£000
Company
31.3.12
£000
Company
31.3.11
£000
–
–
–
–
–
–
–
–
30,994
31,822
179
–
5
(833)
31,173
30,994
notes to the fi nancial statements helical bar plc 2012
notes to the fi nancial statements
The Company’s principal subsidiary undertakings, all of which have been consolidated, are:
Name of undertaking
Baylight Developments Ltd*
Dencora (Docklands) Ltd
Dencora (Fordham) Ltd
Downtown Space Properties LLP
Harbour Developments (Bracknell) Ltd
HB Sawston No. 3 Ltd
Helical (Aldridge) Ltd
Helical (Ashford) Ltd
Helical Bar Developments (South East) Ltd
Helical Bar (East Grinstead) Ltd
Helical Bar (Great Dover Street) Ltd
Helical Bar (Hawtin Park No. 3) Ltd
Helical Bar (Mitre Square) Ltd
Helical Bar Services Ltd
Helical Bar (Wales) Ltd*
Helical Bar (White City) Ltd
Helical (Basildon Retail) LP*
Helical (Battersea) Ltd
Helical (Bramshott Place) Ltd
Helical (Broadway) Ltd
Helical (Cardiff) Ltd
Helical (Corby) Ltd*
Helical (Corby Investments) Ltd
Helical (Crownhill) Ltd
Helical (East Kilbride) Ltd
Helical (Exeter) Ltd
Helical (Faygate) Ltd
Helical (Fleet) No. 2 Ltd*
Helical (Glasgow) Ltd
Helical (Hailsham) Ltd
Helical (Hedge End) Ltd
Helical (Liphook) Ltd
Helical (Merlin Park) Ltd
Helical (Milton) Ltd
Helical (Motherwell) Ltd
Helical Retail Ltd
Helical Retail (RBS) Ltd*
Helical (Sevenoaks) Ltd
Helical (Southall) Ltd
Helical (Stockport) Ltd
Helical (Telford) Ltd
Helical (Winterhill) Ltd
Helical Wroclaw Sp. z.o.o.*
Metropolis Property Ltd
Newmarket LP*
Prescot Street Investments Ltd
61 Southwark Street Ltd*
Sutton-in-Ashfi eld LP*
80
Nature of business
Percentage of ordinary share capital held
Investment
Investment
Investment
Development
Development
Investment
Investment
Investment
Development
Investment
Investment
Investment
Development
Management Services
Investment
Development
Investment
Investment
Development
Investment
Investment
Investment
Investment
Investment
Investment
Development
Development
Investment
Investment/Trading
Development
Trading
Development (Jersey)
Investment
Development
Investment
Development
Development
Investment
Development
Development
Development
Investment
Development (Poland)
Investment
Investment
Investment
Investment
Investment
100%
100%
100%
70%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
All principal subsidiary undertakings operate in the United Kingdom other than Helical Wroclaw Sp. z.o.o. and, unless otherwise indicated, are
incorporated and registered in England and Wales. In line with s410(2) of the Companies Act 2006 a full list of all subsidiaries is lodged with the Annual
Return at Companies House.
*Ordinary capital is held by a subsidiary undertaking.
Investments in subsidiaries have been impaired based on a review of their fair value at the balance sheet date. A review of the fair value of the
investments is undertaken periodically. The fair value of the investment in subsidiaries is based on the value of the subsidiaries underlying assets.
notes to the fi nancial statements helical bar plc 2012
20. Investment in joint ventures
Investment
& trading Development
31.3.12
£000
31.3.12
£000
Investment
Total
31.3.12
£000
& trading Development
31.3.11
£000
31.3.11
£000
Group
31.3.11
£000
Summarised statements of consolidated income
Revenue
Net rental income
Gain on revaluation of investment properties
Other operating (expense)/income
Net fi nance costs
Profi t before tax
Tax
Profi t after tax
Summarised balance sheets
Investment properties
Other non-current assets
Land, development and trading properties
Held for sale investments
Other current assets
Current liabilities
Non-current liabilities
Net assets
6,584
4,866
581
(52)
(2,794)
2,601
15
2,616
67,187
28
–
–
5,750
339
194
–
(230)
(108)
(144)
–
(144)
–
–
6,923
5,060
581
(282)
(2,902)
2,457
15
2,472
5,561
3,432
798
72
(1,516)
2,786
119
2,905
67,187
65,875
193
158
–
–
(177)
(19)
–
(19)
5,754
3,590
798
72
(1,693)
2,767
119
2,886
–
–
65,875
–
14,434
14,434
28
15,709
15,709
4,792
517
4,792
6,267
–
–
–
–
4,660
5,619
(4,604)
(10,245)
(14,849)
(3,641)
(13,890)
(36,442)
(2,100)
(38,542)
(35,493)
31,919
8,673
40,592
31,401
(1,500)
4,663
The cost of the Company’s investment in joint ventures was £165,000 (2011: £165,000).
At 31 March 2012 the Group and the Company had interests in the following joint venture companies:
Country of Class of share Proportion
Proportion
capital held held Group held Company
incorporation
Abbeygate Helical (Leisure Plaza) Ltd
Abbeygate Helical (Winterhill) Ltd
Abbeygate Helical (C4.1) LLP
The Asset Factor Ltd
Shirley Advance LLP
King Street Developments (Hammersmith) Ltd
PH Properties Limited (BVI)
Barts Two Investment Property Limited
Helical Sosnica Sp. zoo.
United Kingdom
Ordinary
United Kingdom
Ordinary
United Kingdom
n/a
United Kingdom
Ordinary
United Kingdom
n/a
United Kingdom
British Virgin Islands
Jersey
Poland
Ordinary
Ordinary
Ordinary
Ordinary
50%
50%
50%
50%
50%
50%
60%
33%
50%
50% Development
50% Development
50% Development
50% Outsourcing
– Development
– Development
–
–
Investment
Investment
– Development
During the year the Group sold 50% of its interest in its subsidiary Helical Sosnica Sp. zoo. for nominal consideration. At 31 March 2011 the results and
fi nancial position were consolidated in the Group’s results and fi nancial position. The results of this Company for the part of the year before the sale
were consolidated in the Group’s results and for the results of this Company for the part of the year after the sale and for the fi nancial position at the
balance sheet date have been accounted for as an investment held for sale due to a commitment to sell the remaining 50% within the next 3 years.
Following the purchase of Barts in 2011, the joint venture company has a contingent liability to pay up to a further £35m which will be dependent upon
the timing of vacant possession and the fl oor area of any future redevelopment scheme for which planning permission is received. The meeting of the
conditions in which an extra payment is required will almost certainly result in an increase in the valuation of the property equal to or above the amount
of the additional payment.
notes to the fi nancial statements helical bar plc 2012
–
10,279
(17,531)
(36,993)
36,064
81
Nature of
business
notes to the fi nancial statements
21. Land, developments and trading properties
Group
Development
properties
31.3.12
£000
Trading
stock
31.3.12
£000
Development
properties
31.3.11
£000
Total
31.3.12
£000
Trading
stock
31.3.11
£000
Total
31.3.11
£000
At 1 April
Construction costs
Interest capitalised
Disposals
Foreign exchange movements
Provision
At 31 March
Company
At 1 April
Construction costs
Disposals
Provision
At 31 March
137,254
10,288
147,542
182,303
273
182,576
21,653
3,300
2,481
24,134
25,026
26,196
51,222
–
3,300
4,179
–
4,179
(58,101)
(10,131)
(68,232)
(58,995)
(16,181)
(75,176)
(2,492)
(4,511)
–
–
(2,492)
(346)
(4,511)
(14,913)
–
–
(346)
(14,913)
97,103
2,638
99,741
137,254
10,288
147,542
Development Development
properties
31.3.11
£000
properties
31.3.12
£000
1,125
51
(1,020)
(55)
101
968
171
–
(14)
1,125
The directors’ valuation of trading and development stock shows a surplus of £33m above book value (2011: £32m).
82
Interest capitalised in respect of the development of sites is included in stock to the extent of £6,379,000 (2011: £6,827,000).
Land, developments and trading properties with carrying values totalling £83,493,000 (2011: £102,299,000) were held as security against borrowings.
22. Trade and other receivables
Trade receivables
Amounts owed by joint venture undertakings
Amounts owed by subsidiary undertakings
Other receivables
Prepayments and accrued income
notes to the fi nancial statements helical bar plc 2012
Group
31.3.12
£000
Group
31.3.11
£000
Company
31.3.12
£000
Company
31.3.11
£000
8,025
20,891
12,457
8,342
428
6,658
116
4,669
–
1,010
1,584
–
316,935
369,817
1,691
4,859
346
306
329
820
23,076
35,783
324,673
375,751
Receivables
Fully performing
Past due < 3 months
Past due > 3 months
Total receivables being fi nancial assets
Total receivables being non-fi nancial assets
Total receivables
Group
31.3.12
£000
Group
31.3.11
£000
Company
31.3.12
£000
Company
31.3.11
£000
21,419
32,175
324,136
374,620
231
737
2,062
692
–
–
–
–
22,387
34,929
324,136
374,620
689
854
537
1,131
23,076
35,783
324,673
375,751
Past due receivables relate to a number of independent customers for whom there is no recent history of default. Against trade receivables, Helical held
£0.9m of rental deposits at 31 March 2012 (2011: £0.8m).
Movements in the provision for impairment of trade receivables are as follows:
Gross receivables being fi nancial assets
Provisions for receivables impairment
Net receivables being fi nancial assets
Group
31.3.12
£000
Group
31.3.11
£000
Company
31.3.12
£000
Company
31.3.11
£000
22,784
35,418
324,136
374,620
(397)
(489)
–
–
22,387
34,929
324,136
374,620
Receivables written off during the year as uncollectable
465
361
–
–
23. Cash and cash equivalents
83
Rent deposits and cash held at managing agents
Cash held by solicitors
Cash held in blocked accounts
Cash deposits
The cash held in blocked accounts was released to cash deposits 38 days after the year end.
Group
31.3.12
£000
2,438
1,115
3,578
28,280
35,411
Group
31.3.11
£000
Company
31.3.12
£000
Company
31.3.11
£000
3,313
–
773
27,241
31,327
–
–
–
–
–
–
26,355
26,355
22,243
22,243
notes to the fi nancial statements helical bar plc 2012
notes to the fi nancial statements
24. Trade and other payables
Trade payables
Social security costs and other taxation
Amounts owed to joint venture undertakings
Amounts owed to subsidiary undertakings
Other payables
Accruals and deferred income
25. Debt
Current debt
Bank loans repayable within:
– one to two years
– two to three years
– three to four years
– four to fi ve years
Non-current debt
84
Group
31.3.12
£000
5,274
1,231
–
–
4,458
13,844
24,807
Group
31.3.11
£000
18,358
70
–
–
5,371
21,425
45,224
Company
31.3.12
£000
Company
31.3.11
£000
270
–
–
270
–
499
145,120
161,546
79
1,396
729
5,867
146,865
168,911
Group
31.3.12
£000
Group
31.3.11
£000
Company
31.3.12
£000
Company
31.3.11
£000
59,203
37,500
5,546
4,500
71,551
656
21,600
110,185
74,318
88,175
4,199
33,225
203,992
199,917
–
–
–
–
–
9,910
–
–
–
9,910
Bank overdrafts and term loans in creditors falling due within one year and after one year are secured against properties held in the normal course of
business by subsidiary undertakings to the value of £410,368,000 (2011: £360,024,000). These will be repayable when the underlying properties are
sold. Bank overdrafts and term loans exclude the Group’s share of borrowings in joint venture companies of £40,036,000 (2011: £39,384,000).
26. Financing and fi nancial instruments
The policies for dealing with liquidity and interest rate risk are noted in the Strategy and Performance Review on pages 6 to 9.
Bank overdraft and loans – maturity
Due after more than one year
Due within one year
notes to the fi nancial statements helical bar plc 2012
Group
31.3.12
£000
Group
31.3.11
£000
203,992
199,917
59,203
37,500
263,195
237,417
The Group has various undrawn committed borrowing facilities. The facilities available at 31 March 2012 in respect of which all conditions precedent
had been met were as follows:
Expiring in one year or less
Expiring in more than one year but not more than two years
Expiring in more than four year but not more than fi ve years
Interest rates – Group
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
Weighted average
Floating rate borrowings
Total borrowings
Group
31.3.12
£000
16,441
777
21,091
38,309
%
Expiry
31.3.12
£000
%
Expiry
Group
31.3.11
£000
6,299
1,672
–
7,971
31.3.11
£000
–
–
–
4.480
Jun 2011
4,236
3.950
Jan 2015
4.500
Jan 2015
6.401
Oct 2012
5.645
Oct 2014
6.240
Dec 2013
3.965
Jan 2016
5.300
Apr 2012
50,000
12,250
28,500
6,690
10,120
9,172
3,570
–
3.406
6.401
5.645
–
Jan 2015
Oct 2012
Oct 2014
6.240
Dec 2013
–
–
5.300
Apr 2012
–
–
–
7.208
Aug 2013
–
12,250
28,500
6,690
10,120
–
3,570
9,912
4.804 Mar 2014
120,302
5.769
Jun 2013
75,278
3.467
Oct 2014
142,893
2.974
May 2013
162,139
263,195
237,417
85
Changes in fi xed borrowing rates are the result of stepped increases in interest rate swaps rates. Floating rate borrowings bear interest at rates based
on LIBOR.
As at 31 March 2012 and 31 March 2011 the Company’s borrowings consist of fi xed rate borrowings of £6,690,000 at 5.645% (2011: 5.645%)
expiring in October 2014 with the remainder being fl oating rate borrowings.
Economic hedging
In addition to the fi xed rates, borrowings are also hedged by the following fi nancial instruments:
Instrument
Current:
– cap
– cap
– cap
– cap
– cap
– cap
– cap
– cap
Value
£000
Rate
%
Start
Expiry
40,950
50,000
25,000
50,000
25,000 – 75,000
7,200
10,613 – 11,037
6.000
May 2008
May 2013
4.000
4.000
4.000
4.000
4.000
4.000
Apr 2011
Apr 2015
Apr 2011
Apr 2016
Jul 2013
Jul 2016
Apr 2015
Jan 2017
Jan 2012
Oct 2016
Jan 2015
Jan 2016
1,656 – 1,851
4.000
May 2011
May 2015
Where a range in capped values is shown, these refl ect stepped increases over the life of the cap.
notes to the fi nancial statements helical bar plc 2012
notes to the fi nancial statements
Gearing
Total debt
Cash
Net debt
Net debt excludes the Group’s share of debt in joint ventures of £40,036,000 (2011: £39,384,000).
Net assets
Gearing
27. Share capital
Authorised
Group
31.3.12
£000
Group
31.3.11
£000
263,195
237,417
(35,411)
(31,327)
227,784
206,090
Group
31.3.12
£000
Group
31.3.11
£000
253,730
255,397
90%
81%
31.3.12
£000
39,577
39,577
31.3.11
£000
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.
86
Allotted, called up and fully paid
– 118,137,522 ordinary shares of 1p each
– 212,145,300 deferred shares of 1⁄ 8p each
Ordinary shares
At 1 April
New shares issued
At 31 March
Deferred shares
At 1 April
At 31 March
notes to the fi nancial statements helical bar plc 2012
31.3.12
£000
31.3.11
£000
1,182
265
1,447
1,182
265
1,447
Shares
in issue
31.3.11
Number
Share
capital
31.3.11
£000
Shares
in issue
31.3.12
Number
Share
capital
31.3.12
£000
118,137,522
1,182
107,407,522
–
–
10,730,000
118,137,522
1,182
118,137,522
212,145,300
212,145,300
265
265
212,145,300
212,145,300
1,074
108
1,182
265
265
The Group’s capital management objectives are:
– to ensure the Group’s ability to continue as a going concern; and,
– to provide an adequate return to shareholders.
The Group sets the amount of capital in proportion to its overall fi nancing structure. It manages the capital structure and makes adjustments to it in the
light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt. Capital
is defi ned as being issued share capital, retained earnings, revaluation reserve and other reserves. (2012: £246,139,000; 2011: £247,797,000). The
Group continually monitors its gearing level to ensure that it is appropriate. Gearing increased from 81% to 90% in the year due to the rebalancing of
the Group’s property portfolio.
The deferred shares were issued on 23 December 2004 to those shareholders electing to receive a dividend, rather than a capital repayment or further
shares in the Company, as part of the Return of Cash approved by shareholders on 20 December 2004. The deferred shares carry no voting rights and
have no right to a dividend or capital payment in the event of a winding up of the Company.
The Company’s Articles of Association give the Company irrevocable authority to purchase all or any of the deferred shares for a maximum aggregate
total of 1 penny for all deferred shares in issue on the date of such purchase.
28. Share options
At 31 March 2012 there were 34,713 unexercised options over new ordinary 1p shares in the Company (31 March 2011: nil). No options over
purchased ordinary 1p shares held by the ESOP had been granted to directors and employees under the Company’s share option schemes
(31 March 2011: nil).
Summary of share options
At 1 April
Options granted
Options exercised
Option expired/lapsed
At 31 March
Weighted
average
exercise
Price
31.3.12
Number
31.3.12
–
–
34,713
259.25
–
–
–
–
34,713
259.25
Weighted
average
exercise
price
31.3.11
Number
31.3.11
–
–
–
–
–
87
–
–
–
–
–
notes to the fi nancial statements helical bar plc 2012
notes to the fi nancial statements
29. Share–based payments
The Group provides share-based payments to employees in the form of performance share plan awards and a share incentive plan. The Company
uses a stochastic valuation model and the resulting value is amortised through the Income Statement over the vesting period of the share-based
payments.
Performance share plan awards
Outstanding at beginning of period
Awards vested during the period
Awards lapsed during the period
Awards cancelled during the period
Awards made during the period
Outstanding at end of period
2012
Weighted
average
award
value
Awards
2011
Weighted
average
award
value
Awards
6,249,364
284p 4,870,283
–
–
–
(1,747,441)
276p
(989,620)
–
–
–
2,728,927
7,230,850
259p 2,368,701
277p 6,249,364
332p
–
473p
–
276p
284p
The performance share plan awards outstanding at 31 March 2012 had a weighted average remaining contractual life of 1 year 4 months.
The inputs into the stochastic model of valuation of the PSP awards made in the year to 31 March 2012 were as follows:
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk free rate
88
Expected dividends
2012
2011
215.2p
285.1p
–
n/a
–
n/a
2010
297.5p
–
n/a
3 years
3 years
3 years
n/a
n/a
n/a
1.88%
1.05%
1.51%
The Group recognised a charge of £35,000 (2011: credit of £196,000) during the year in relation to Share-based payments.
At the balance sheet date there were no exercisable awards.
30. 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 benefi t 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 2012 unexercised options over nil (2011: nil) ordinary 1p shares in Helical Bar plc had been granted over shares held by the Trust.
At 31 March 2012 outstanding awards over 7,230,850 (2011: 6,249,364) ordinary 1p shares in Helical Bar plc had been made under the terms of the
Performance Share Plan over shares held by the Trust.
notes to the fi nancial statements helical bar plc 2012
31. Contingent liabilities
The Group’s share of its Joint Ventures’ contingent liabilities is discussed in note 20. The Group has guaranteed this payment in the event of default of
the Joint Venture.
The Company has entered into cross guarantees in respect of the banking facilities of its subsidiaries. These are not considered to have a material value.
The Company has undertaken to provide support for some of its subsidiaries undertakings. However it does not believe that this support will be
required in the foreseeable future.
Other than these contingent liabilities there were no contingent liabilities at 31 March 2012 for the Group or the Company (2011: £nil).
32. Net assets per share
31.3.12
£000
Number
of shares
000s
31.3.12
pence
per share
31.3.11
£000
Number
of shares
000s
31.3.11
pence
per share
Net asset value
253,730
118,138
255,397
118,138
Less: own shares held by ESOP
–
(1,292)
–
(1,292)
deferred shares
Basic net asset value
Add: unexercised share options
Add: dilutive effect of the Performance Share Plan
Diluted net asset value
Adjustment for:
– fair value of fi nancial instruments
– deferred tax
(265)
(265)
253,465
116,846
217
255,132
116,846
218
90
1,757
34
901
–
–
–
–
255,312
117,781
217
255,132
116,846
218
3,494
1,050
7,071
717
89
Adjusted diluted net asset value
259,856
117,781
221
262,920
116,846
225
Adjustment for:
– fair value of trading and development properties
34,542
32,436
Diluted EPRA net asset value
294,398
117,781
250
295,356
116,846
253
Adjustment for:
– fair value of fi nancial instruments
– deferred tax
(3,494)
(1,050)
(7,071)
(717)
Diluted EPRA triple net asset value
289,854
117,781
246
287,568
116,846
246
The net asset values per share have been calculated in accordance with the best practice recommendations of the European Public Real Estate
Association (“EPRA”).
notes to the fi nancial statements helical bar plc 2012
notes to the fi nancial statements
33. Related party transactions
At 31 March 2012 and 31 March 2011 the following amounts were due from the Group’s joint ventures.
Abbeygate Helical (Leisure Plaza) Ltd
Abbeygate Helical (Winterhill) Ltd
Abbeygate Helical (C4.1) LLP
King Street Developments (Hammersmith) Ltd
Shirley Advance LLP
The Asset Factor Ltd
PH Properties Limited (BVI)
Barts Two Investment Property Limited
Helical Sosnica Sp zoo
All movements in joint venture balances related to loans repaid and loans advanced.
At 31 March 2012 and 31 March 2011 there were the following balances between the Company and its subsidiaries.
Amounts due from subsidiaries
Amounts due to subsidiaries
At 31.3.12
£000
At 31.3.11
£000
2,316
2,040
–
10
2,150
4,603
8
–
3
3,367
–
6
2,000
4,296
596
–
–
n/a
At 31.3.12
£000
At 31.3.11
£000
316,935
369,817
145,120
161,546
During the years to 31 March 2012 and 31 March 2011 there were the following transactions between the Company and its subsidiaries:
90
Management charges receivable
Management charges payable
Interest receivable
Interest payable
Year ended
31.3.12
£000
Year ended
31.3.11
£000
4,318
127
3,439
–
3,422
250
4,725
–
Management charges relate to the performance of management services for the Company or its subsidiaries. Interest receivable relates to interest on
loans made by the Company to its subsidiaries. All of these transactions, and the year-end balance sheet amounts arising from these transactions were
conducted on an arm’s length basis and on normal commercial terms. Amounts owed by subsidiaries to the company are identifi ed in note 22.
Amounts owed to subsidiaries by the company are identifi ed in note 24.
The Group consider that the key management personnel are the directors and the detail of their remuneration is disclosed in the directors’
remuneration report on pages 50 to 56. Share based payments for directors are disclosed in note 8.
notes to the fi nancial statements helical bar plc 2012
34. Financial instruments
Categories of fi nancial instruments
Financial assets in the Group include derivative fi nancial assets which are designated as ‘Fair value through the Profi t or Loss’. Financial assets also
include trade and other receivables and cash and cash equivalents all of which are included within loans and receivables as well as available-for-sale
investments.
Financial liabilities in the Group comprise derivative fi nancial liabilities which are categorised as ‘Fair value through the Profi t or Loss’ (non hedge).
Financial liabilities also include secured bank loans and overdrafts, trade and other payables, provisions and current tax liabilities, all of which are
classifi ed as fi nancial liabilities at amortised cost.
Financial assets and liabilities by category
The fi nancial instruments of the Group as classifi ed in the fi nancial statements can be analysed under the following IAS 39 Financial Instruments:
Recognition and Measurement, categories:
Financial assets
Loans and receivables
Fair value through the Profi t or Loss
Available-for-sale fi nancial assets
Total fi nancial assets
These fi nancial assets are included in the balance sheet within the following headings:
Group
31.3.12
£000
Group
31.3.11
£000
Company
31.3.12
£000
Company
31.3.11
£000
57,798
66,256
350,491
396,863
629
793
7,003
10,505
340
–
715
–
65,430
77,554
350,831
397,578
Group
31.3.12
£000
Group
31.3.11
£000
Company
31.3.12
£000
Company
31.3.11
£000
Available–for–sale investments
Derivative fi nancial instruments
Trade and other receivables
Cash and cash equivalents
Total fi nancial assets
7,003
10,505
793
–
340
–
715
629
22,387
35,411
65,430
34,929
324,136
374,620
31,327
26,355
22,243
77,554
350,831
397,578
91
Financial assets are stated in accordance with IAS 32 Financial Instruments: Presentation.
For fair value of available-for-sale investments see note 18. The carrying value of the trade and other receivables and cash and cash equivalents is
deemed not to be materially different from the fair value.
Financial liabilities
Fair value through the Profi t or Loss
Other fi nancial liabilities
Total fi nancial liabilities
Group
31.3.12
£000
Group
31.3.11
£000
Company
31.3.12
£000
Company
31.3.11
£000
(3,075)
(7,311)
(837)
(3,373)
(280,864)
(281,782)
(152,411)
(183,321)
(283,939)
(289,093)
(153,248)
(186,694)
notes to the fi nancial statements helical bar plc 2012
notes to the fi nancial statements
These fi nancial liabilities are included in the balance sheet within the following headings:
Trade and other payables
Borrowings – current
Borrowings – non current
Derivative fi nancial instruments
Total fi nancial liabilities
Group
31.3.12
£000
Group
31.3.11
£000
Company
31.3.12
£000
Company
31.3.11
£000
(17,669)
(44,365)
(146,865)
(168,911)
(59,203)
(37,500)
(5,546)
(203,992)
(199,917)
(3,075)
(7,311)
–
(837)
(4,500)
(9,910)
(3,373)
(283,939)
(289,093)
(153,248)
(186,694)
The carrying value of trade and other payables and borrowings is not deemed to be materially different from the fair value. Financial liabilities are stated
in accordance with IAS 32.
The Group and Company fi nancial instruments that are measured subsequent to initial recognition at fair value are available-for-sale assets, forward
exchange contracts and interest rate swaps, caps and fl oors.
Forward foreign exchange contracts are externally measured using quoted forward exchange rates and yield curves derived from quoted interest rates
matching maturities of the contracts. Interest rate swaps, caps and fl oors are measured at the present value of future cash fl ows estimated and
discounted based on the applicable yield curves derived from quoted interest rates.
IFRS 7 categorises fi nancial assets and liabilities as being valued in 3 hierarchical levels:
– Level 1: values are unadjusted quoted prices in active markets for identical assets or liabilities
– Level 2: values are derived from observing market data
– Level 3: values cannot be derived from observable market data
The derivative fi nancial instruments above have been valued using a Level 2 methodology and the available-for-sale investments, which are described
in note 18, are classifi ed as Level 3 fair value measurements, being those not based on observable market data. There were no transfers between
categories in the current or prior year.
92
Derivative fi nancial instruments
Derivative fi nancial assets
Interest rate caps
Foreign exchange contracts
Derivative fi nancial liabilities
Interest rate swaps
Interest rate fl oors
Group
Year ended
31.3.12
£000
Group
Company
Year ended Year ended
31.3.12
£000
31.3.11
£000
Company
Year ended
31.3.11
£000
629
–
629
629
164
793
(3,075)
–
(3,075)
(4,764)
(2,547)
(7,311)
340
–
340
(837)
–
(837)
551
164
715
(826)
(2,547)
(3,373)
The group’s movement in the fair value of the derivative fi nancial instruments in the year was a loss of £306,000 (2011: gain of £1,776,000); Company:
loss of £1,604,000 (2011: £1,287,000).
notes to the fi nancial statements helical bar plc 2012
Credit risk
Credit risks arise from the possibility that customers may not be able to settle their obligations as agreed. To manage this risk the Group periodically
assesses the fi nancial reliability of customers, taking into account the fi nancial position, past experience and other factors.
As at 31 March 2012 Helical has total credit risk exposure excluding cash of £29m of which £7m is available-for-sale assets and £22m is loans and
receivables. Available-for-sale assets are analysed in note 18.
Of the trade receivables held at 31 March 2012, £1.7m related to rent due from tenants which was received post year-end.
All other debtors are deemed to be recoverable.
The Group is not reliant on any major customer for its ability to continue as a going concern.
For further information on trade and other receivables, see note 22.
Liquidity risk
Liquidity risk is defi ned as the risk that the Group would not be able to settle or meet its obligations on time or at a reasonable price.
Liquidity and funding risks, related processes and policies are overseen by management.
Helical manages its liquidity risk on a consolidated basis based on business needs, tax, capital or regulatory considerations, if applicable, and through
numerous sources of fi nance in order to maintain fl exibility. Management monitors the Group’s net liquidity position through rolling forecasts on the
basis of expected cash fl ows. The Group’s cash and cash equivalents are held with major regulated fi nancial institutions and the directors regularly
monitor the fi nancial institutions that the group uses to ensure its exposure to liquidity risk is minimised.
For further information on debt facilities, see notes 25 and 26.
The maturity profi le of the Group’s contracted fi nancial liabilities is as follows:
Payable within 3 months
Payable between 3 months and 1 year
Payable between 1 and 3 years
Payable after 3 years
Total contracted liabilities
Group
31.3.12
£000
19,913
65,135
Group
31.3.11
£000
Company
31.3.12
£000
Company
31.3.11
£000
66,099
147,067
169,556
29,042
7,011
89,567
178,910
140,201
37,785
789
–
314,816
311,836
154,867
189,757
6,401
13,173
627
93
At 31 March 2012 Helical had £38m of undrawn borrowing facilities, £16m of uncharged property assets and cash balances of £35m. The above
contracted liabilities assume that no loans are extended beyond their current facility expiry date. The management believe that these facilities, together
with anticipated sales and the renewal of some of these loan facilities, mean that Helical can meet its contracted liabilities as they fall due.
Market risk
Helical is exposed to market risk, primarily related to interest rates, foreign currency exchange movements, the market value of the investments and
accrued development profi ts. The Group actively monitors these exposures.
Interest rate risk
It is the Group’s policy and practice to minimise interest rate cash fl ow exposures on long-term fi nancing. Helical does this by using a number of
derivative fi nancial instruments including interest rate swaps and interest rate caps. The purpose of these derivatives is to manage the interest rate risks
arising from the Group’s sources of fi nance. The Group does not use fi nancial instruments for speculative purposes.
Details of fi nancing and fi nancial instruments can be found in note 26.
In the year to 31 March 2012, if interest rates had moved by 0.5%, this would have resulted in the following movement to pre-tax profi ts and equity due
to movements in interest charges and mark-to-market valuations of derivatives.
notes to the fi nancial statements helical bar plc 2012
notes to the fi nancial statements
0.5% increase – increase in net results and equity
0.5% decrease – decrease in net results and equity
Group
31 March 2012
Company
31 March 2012
Impact on
results
£000
Equity
impact
£000
Impact on
results
£000
2,988
2,988
1,713
Equity
impact
£000
1,713
(3,787)
(3,787)
(1,713)
(1,713)
Foreign currency exchange risk
Due to its operations in Poland and its investment in a non-UK based property developer, Helical has exposure to exchange movements on foreign
currencies. Helical’s management monitors its exposure to risks associated with foreign currency exchange risk and reviews any requirements to act to
minimise these risks. Helical has entered into currency option contracts in order to reduce its exposure to these risks.
In the year to 31 March 2012 the Group made foreign exchange losses of £1,064,000 resulting from movements in foreign exchange rates during the year
affecting its assets and liabilities related to its overseas operations.
The Group’s balance sheet translation exposure is summarised as follows:
Gross currency assets
Gross currency liabilities
Net exposure
31 March 2012
Euro
(£000)
Zloty US dollars
(£000)
(£000)
31 March 2011
Zloty
(£000)
Euro
(£000)
US dollars
(£000)
18,197
3,599
6,990
51,428
6,338
10,492
(8,799)
(1,729)
–
(22,339)
(5,411)
–
9,398
1,870
6,990
29,089
927
10,492
The Company’s balance sheet translation exposure is almost exclusively due to intra-group loans and is summarised as follows:
Gross currency assets
94
Gross currency liabilities
Net exposure
31 March 2012
Euro
(£000)
3,311
31 March 2011
Euro
(£000)
Zloty
(£000)
Zloty
(£000)
6,749
2,550
17,247
–
(1,402)
–
–
3,311
5,347
2,550
17,247
The Group’s main currency exposure is to the euro. The sensitivity of the net assets and profi t of the Group to a 10% change in the value of the foreign
currencies against sterling is Euro: £940,000 (March 2011: £2,209,000), Zloty: £187,000 (March 2011: £93,000), US dollar: £531,000 (March 2011:
£797,000).
The sensitivity of the net assets and profi t of the Company to a 10% change in the value of the foreign currencies against sterling is Euro: £331,000
(March 2011: £255,000), Zloty: £535,000 (March 2011: £1,725,000).
notes to the fi nancial statements helical bar plc 2012
35. Principal accounting policies
Basis of consolidation
The Group fi nancial statements consolidate those of Helical Bar plc (the “Company”) and all of its subsidiary undertakings (together the “Group”) drawn
up to 31 March 2012. Subsidiary undertakings are those entities over which the Group has the ability to govern the fi nancial and operating policies
through the exercise of voting rights. Subsidiaries are accounted for under the purchase method and are held in the Company balance sheet at cost
and reviewed annually for impairment.
Joint Ventures are entities whose economic activities are controlled jointly by the Group and by other ventures independent of the Group and are
accounted for using the equity method of accounting, whereby the Group’s share of profi t after tax in the Joint Venture is recognised in the
Consolidated Income Statement and the Group’s share of the Joint Venture’s net assets are incorporated in the Consolidated Balance Sheet.
The Company’s cost of investment in Joint Ventures less any provision for permanent impairment loss is shown in the Company Balance Sheet.
Associates are those entities over which the Group has signifi cant infl uence but which are neither subsidiaries nor joint ventures.
Intra-group balances and any unrealised gains on transactions between the Company and its subsidiaries and between subsidiaries are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Going concern
The accounts have been prepared on a going concern basis as explained in the Corporate Governance review on page 44.
Revenue recognition
Rental income – rental income receivable is recognised in the Income Statement on a straight line basis over the lease term. Any incentive for lessees
to enter into a lease agreement and any costs associated with entering into the lease are spread over the same period.
Sale of goods – assets, such as trading properties, development sites and completed developments, are regarded as sold upon the transfer of the
signifi cant risks and rewards of ownership to the purchaser, in accordance with IAS 18 Revenue. This occurs on exchange of unconditional contracts
for the sale of the site, on satisfaction of any and all conditions on a conditional contract for the sale of the site or on completion of the contract on a
conditional sale where those conditions are satisfi ed at completion. Measurements of revenue arising from the sale of such assets are derived from the
fair value of the consideration received in accordance with IAS 18 Revenue.
Construction contracts – where an asset is constructed under a specifi c contract with a purchaser (a “pre-sold development”) the initial sale of the
site to that purchaser is recognised as a sale of goods in accordance with IAS 18 Revenue. The construction element of the contract is treated, for the
purposes of revenue recognition, as a construction contract in accordance with IAS 11 Construction Contracts. Revenue is recognised by reference to
the stage of completion which is typically determined by reference to project appraisals, normally supported by independent valuation certifi cates
provided by quantity surveyors. The Company’s principal other responsibility on pre-sold developments is the identifi cation of and agreement of terms
with potential tenants of the completed building(s). The revenue recognition of this additional component of the funding agreements is considered
separately to refl ect the substance of the transaction as the rendering of services, in accordance with IAS 18 Revenue. The amount of revenue
recognised is determined by reference to the percentage of the building(s) that are let.
95
Investment income – revenue in respect of investment and other income represents investment income, fees and commissions earned on an
accruals basis and the fair value of the consideration received/receivable on investments held for the short-term. Dividends are recognised when the
shareholders’ right to receive payment has been established. Interest income is accrued on a time basis, by reference to the principal outstanding and
the effective interest rate.
Share-based payments
The Group provides share-based payments in the form of performance share plan awards and a share incentive plan. These payments are discussed
in greater detail in the Directors’ Remuneration Report on pages 50 to 56. The fair value of share-based payments related to employees’ service are
determined indirectly by reference to the fair value of the related instrument at the grant date. All share-based payment arrangements granted after
7 November 2002 that had not vested prior to 1 January 2005 are recognised in the fi nancial statements. The Group uses the stochastic valuation
model and the resulting value is amortised through the Consolidated Income Statement (“Income Statement”) over the vesting period of the
share-based payments.
For the performance share plan and share incentive plan awards, where non-market conditions apply, the expense is allocated, over the vesting period,
to the Income Statement based on the best available estimate of the number of awards that are expected to vest. Estimates are subsequently revised if
there is any indication that the number of awards expected to vest differs from previous estimates.
notes to the fi nancial statements helical bar plc 2012
notes to the fi nancial statements
Depreciation
In accordance with IAS 40 Investment Property, depreciation is not provided for on freehold investment properties or on leasehold investment
properties. The Group does not own the freehold land and buildings which it occupies. Costs incurred in respect of leasehold improvements to the
Group’s head offi ce at 11–15 Farm Street, London W1J 5RS are capitalised and held as short-term leasehold improvements. Leasehold improvements,
plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Residual values are reassessed annually.
Depreciation is charged so as to write off the cost of assets less residual value, over their estimated useful lives, using the straight line method, on the
following basis:
Short leasehold improvements – 10% or length of lease, if shorter
Plant and equipment
– 25%
Taxation
The taxation charge represents the sum of tax currently payable and deferred tax. The charge for current taxation is based on the results for the year as
adjusted for items which are non-assessable or disallowed. It is calculated using rates that have been enacted or substantively enacted by the balance
sheet date. Tax payable upon realisation of revaluation gains recognised in prior periods is recorded as a current tax charge with a release of the
associated deferred taxation.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the fi nancial
statements and the corresponding tax bases used in the computation of taxable profi t, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable
that taxable profi ts will be available against which deductible temporary differences can be utilised. The measurement of deferred tax assets and liabilities
refl ects the tax consequences of the manner in which Helical expects, at the balance sheet date, to recover or settle the carrying amount of those assets
and liabilities. Such assets and liabilities are not recognised if the temporary differences arise from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profi t nor the accounting profi t.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that suffi cient
taxable profi ts will be available to allow all or part of the assets to be recovered.
The deferred tax asset relating to share based payment awards refl ects the estimated value of tax relief available on the vesting of the awards at the
balance sheet date.
Deferred tax is determined using tax rates that have been enacted or substantively enacted by the balance sheet date and are expected to apply when
the related deferred tax asset is realised or the deferred tax liability is settled. It is recognised in the Income Statement except when it relates to items
credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.
96
The Group recognises a deferred tax liability for all taxable temporary differences associated with investments in subsidiaries, associates and interests
in joint ventures, except to the extent that both of the following conditions are satisfi ed:
a)
b)
the Group is able to control the timing of the reversal of the temporary difference; and,
it is probable that the temporary difference will not reverse in the foreseeable future.
Dividends
Dividend distributions to the Company’s shareholders are recognised as a liability in the fi nancial statements in the period in which dividends are approved.
Investment properties
Investment properties are properties owned or leased by the Group which are held for long-term rental income and for capital appreciation. Investment
properties are initially recognised at cost, including associated transaction costs, and revalued at the balance sheet date to fair value. These fair values
are based on market values as determined by professionally qualifi ed external valuers or are determined by the directors of the Group based on their
knowledge of the property. In accordance with IAS 40, investment properties held under leases are stated gross of the recognised fi nance lease liability.
Gains or losses arising from changes in the fair value of investment properties are recognised as gains or losses on revaluation in the Income Statement
of the period in which they arise.
In accordance with IAS 40, as the Group uses the fair value model, no depreciation is provided in respect of investment properties including integral plant.
Property that is being constructed or developed for future use as an investment property is treated as investment property in accordance with IAS 40.
When the Group redevelops an existing investment property for continued future use as investment property, the property remains an investment
property measured at fair value and is not reclassifi ed. Interest is capitalised before tax relief until the date of practical completion.
Details of the valuation of investment properties can be found in note 15.
notes to the fi nancial statements helical bar plc 2012
Goodwill
Goodwill, representing the excess of the cost of acquisition over the fair value of the Group’s share of the identifi able net assets acquired, is capitalised
and reviewed annually for impairment. Goodwill is carried at cost less accumulated impairment losses. Negative goodwill is recognised immediately
after acquisition in the Income Statement.
Land, developments and trading properties
Land, developments and trading properties held for sale are inventory and are included in the Balance Sheet at the lower of cost and net realisable
value. Net realisable value is the estimated selling price in the ordinary course of business less estimated costs to completion and estimated costs
necessary to make the sale.
Gross borrowing costs associated with expenditure on properties under development or undergoing major refurbishment are capitalised. The interest
capitalised is calculated using the Group’s weighted average cost of borrowings. Interest is capitalised from the date of commencement of the
development work until date of practical completion.
Investments
Available-for-sale investments are revalued to fair value at the balance sheet date. Gains or losses arising from changes in fair value are recognised in
the Statement of Comprehensive Income except to the extent that losses are attributable to impairment, in which case they are recognised in the
Income Statement. Upon disposal, accumulated fair value adjustments are included in the Income Statement.
Held for sale investments
Investments are defi ned as held for sale when the Group intends to sell the investment and if sale is highly probable. Such held for sale investments are
measured at the lower of their carrying amounts immediately prior to their classifi cation as held for sale and their fair value less costs to sell.
Trade receivables
Trade receivables do not carry any interest and are stated initially at fair value and subsequently at amortised cost as reduced by appropriate
allowances for estimated irrecoverable amounts.
Cash and cash equivalents
Cash and cash equivalents are carried in the Balance Sheet at amortised cost. For the purposes of the cash fl ow statement, cash and cash equivalents
comprise cash in hand, deposits with banks, and other short-term, highly liquid investments with original maturities of three months or less.
Trade and other payables
Trade and other payables are not interest bearing and are initially recognised at fair value and subsequently at amortised cost.
Borrowing and borrowing costs
Interest bearing bank loans and overdrafts are initially recorded at fair value, net of fi nance and other costs yet to be amortised.
97
Borrowing costs directly attributable to the acquisition and construction of new developments and investment properties are added to the costs of
such properties until the date of completion of the development or investment. After initial recognition borrowings are carried at amortised cost. This
treatment has been adopted since transition to IFRS.
Derivative fi nancial instruments
Derivative fi nancial assets and fi nancial liabilities are recognised on the Balance Sheet when the Group becomes a party to the contractual provisions of
the instrument.
The Group enters into derivative transactions such as interest rate caps and fl oors, and forward foreign currency contracts in order to manage the risks
arising from its activities. Derivatives are initially recorded at fair value and are subsequently remeasured to fair value based on market prices, estimated
future cash fl ows and forward rates as appropriate. Any change in the fair value of such derivatives is recognised immediately in the Income Statement.
Further information on the categorisation of fi nancial instruments can be found in note 34.
Leases
Leases are classifi ed according to the substance of the transaction. A lease that transfers substantially all the risks and rewards of ownership to the
lessee is classifi ed as a fi nance lease. All other leases are classifi ed as operating leases.
In accordance with IAS 40, fi nance leases of investment property are accounted for as fi nance leases and recognised as an asset and an obligation to
pay future minimum lease payments. The investment property asset is included in the balance sheet at fair value, gross of the recognised fi nance lease
liability. Lease payments are allocated between the liability and fi nance charges so as to achieve a constant fi nancing rate.
notes to the fi nancial statements helical bar plc 2012
notes to the fi nancial statements
Foreign currencies
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities in foreign
currencies are translated at the rates of exchange ruling at the balance sheet date. Non-monetary items that are measured at historical cost in a foreign
currency are translated at the exchange rate at the date of the transaction.
Any exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were
initially recorded are recognised in the Income Statement in the period in which they arise. Exchange differences on non-monetary items are recognised
in the Statement of Comprehensive Income to the extent that they relate to a gain or loss on that non-monetary item which is included in the Statement
of Comprehensive Income, otherwise such gains and losses are recognised in the Income Statement.
The assets and liabilities in the fi nancial statements of foreign subsidiaries are translated at the rate of exchange ruling at the balance sheet date.
Income and expenses are translated at the average rate. The exchange differences arising from the retranslation of the opening net investment in
subsidiaries are taken directly to retained earnings in equity. On disposal of a foreign operation the cumulative translation differences (including, if
applicable, gains and losses on related hedges) are transferred to the Income Statement as part of the gain or loss on disposal.
Net asset values per share
Net asset values per share have been calculated in accordance with the best practice recommendations of the European Public Real Estate
Association (“EPRA”).
Earnings/(loss) per share
Earnings/(loss) per share have been calculated in accordance with IAS 33 and the best practice recommendations of EPRA.
Employee Share Ownership Plan Trust
Shares held in the Helical Bar Employee Share Ownership Plan Trust (“ESOP”) are shown as a deduction in arriving at equity funds. Assets, liabilities
and reserves of the ESOP are included in the statutory headings to which they relate. Purchases and sales of own shares increase or decrease the
book value of “Own shares held” in the Balance Sheet. At each period end the Group assesses and recognises the fair value of “Own shares held” and
accounts for movement between book value and fair value as a reserves transfer.
Use of estimates and judgements
To be able to prepare accounts according to the accounting principles, management must make estimates and assumptions that affect the asset and
liability items and revenue and expense amounts recorded in the fi nancial statements. These estimates are based on historical experience and various
other assumptions that management and the Board of Directors believe are reasonable under the circumstances. The results of these considerations
form the basis for making judgements about the carrying value of assets and liabilities that are not readily available from other sources.
Areas requiring the use of estimates and critical judgement that may signifi cantly impact on the Group’s earnings and fi nancial position are:
98
– revenue on construction contracts where the valuation is spread over the construction period using estimates of the fi nal outcome (note 2);
– valuation of investment properties, where external valuers are used to provide third party valuations (note 15);
– recognition of share–based payments which is dependent upon the estimated number of performance share plan awards that will vest at the end of
the performance periods (note 29);
– calculation and assessment of the recoverability of deferred tax assets, where it has been assumed that suffi cient taxable profi ts will be available in
future periods to allow all of the assets to be recovered (note 11);
– valuation of the investment in a property developer which is based on a valuation method (note 18); and,
– directors’ valuation of land, development and trading properties include subjective assumptions including the results of future planning decisions and
future sales values and timings (note 21).
notes to the fi nancial statements helical bar plc 2012
ten year review
IFRS
31.3.12
£000
IFRS
31.3.11
£000
IFRS
31.3.10
£000
IFRS
31.3.09
£000
IFRS
31.3.08
£000
IFRS
31.3.07
£000
IFRS
31.3.06
£000
IFRS UK GAAP UK GAAP
31.3.03
£000
31.3.04
£000
31.3.05
£000
Revenue
52,968
119,059
67,354
81,770
65,623
123,176
119,274
101,469
54,566
135,192
Net rental income
17,876
14,187
14,151
17,682
16,400
14,771
16,524
20,440
22,980
25,619
Development profi t/(loss)
655
(16,642)
(1,293)
(7,704)
6,068
13,587
4,594
12,664
38
4,630
Trading (loss)/profi t
–
(367)
(10)
(514)
(29)
2,094
13,441
5,771
1,031
349
Share of results of
joint ventures
2,472
2,886
3,745
Other income/(expense)
113
(358)
26
1,846
6,752
(98)
6,196
(315)
766
437
235
2,699
1,636
1,544
235
601
626
Gross profi t/(loss)
before gain/(loss) on
investment properties
Gain/(loss) on sale
and revaluation of
investment properties
Gain on sale of
investments
Impairment of
available-for-sale investments
21,116
(294)
16,619
18,062
22,026
37,414
35,231
41,809
26,286
32,768
3,288
7,512
8,195
(66,670)
(32,790)
40,637
43,551
44,204
2,035
2,126
–
–
–
(1,817)
–
–
1,892
–
–
–
–
–
–
–
–
–
–
–
–
–
Administrative expenses
(7,800)
(7,050)
(8,680)
(8,090)
(13,659)
(17,544)
(16,582)
(15,757)
(8,037)
(6,391)
Loss on sale of
subsidiary
Negative goodwill
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(59)
–
–
6,362
Net fi nance costs
(8,132)
(4,564)
(7,132)
(21,048)
(1,724)
(419)
(5,080)
(5,561)
(6,572)
(9,638)
Foreign exchange
(losses)/gains
(1,064)
(67)
(1,127)
3,999
1,862
–
–
–
–
–
99
Profi t/(loss) before tax
7,408
(6,280)
7,875
(71,855)
(24,285)
60,088
57,120
64,695
13,653
25,227
Tax
158
2,391
1,711
18,359
11,971
(8,000)
(9,676)
844
(2,199)
(7,660)
Profi t/(loss) after tax
7,566
(3,889)
9,586
(53,496)
(12,314)
52,088
47,444
65,539
11,454
17,567
Investment portfolio
326,876
271,876
219,901
241,287
306,778
316,025
294,583
271,315
334,932
342,484
Shareholders’ funds
253,730
255,397
242,607
237,066
268,659
282,186
230,097
186,165
234,917
226,870
Dividend per
ordinary share
Special dividend per
ordinary share
Diluted earnings/(loss)
per ordinary share
Diluted EPRA net assets
per share
4.90p
2.00p
7.25p
4.50p
4.50p
4.05p
3.65p
3.32p
3.32p
3.00p
–
–
–
–
–
–
–
80.0p
–
–
6.5p
(3.6p)
9.1p
(56.6p)
(13.5p)
53.7p
51.8p
53.7p
7.9p
11.8p
250p
253p
272p
286p
352p
374p
309p
238p
182p
155p
The fi nancial statements for the year to 31 March 2005 have been restated to refl ect the adoption of International Financial Reporting Standards.
The above table has not been audited but the information for the years 31 March 2006 to 31 March 2012 is taken from the fi nancial statements of
those years and the information for the years 31 March 2003 to 31 March 2005 is taken from the fi nancial statements of those years restated to refl ect
the impact of the 5 for 1 share issue on 1 September 2005.
ten year review helical bar plc 2012
investor information
101 appendix I – property portfolio
104 appendix II – risk register
107 investor information
108 glossary of terms
109 fi nancial calendar
109 advisors
100
investor information helical bar plc 2012
appendix I – property portfolio
Income producing assets
London offi ces
Address
Shepherds Building, Shepherds Bush, London W14
200 Great Dover Street, London SE1
80 Silverthorne Road, Battersea, London SW8
82 Silverthorne Road, Battersea, London SW8
Barts Square, London EC1
Broadway House, London W6
The Powerhouse, Chiswick, London W4
Provincial offi ces
Address
Fordham, Newmarket
Botleigh Grange, Hedge End, Southampton
Industrial
Address
Dales Manor Business Park, Sawston, Cambridge
Winterhill Industrial Estate, Milton Keynes
Merlin Business Park, Manchester
Crownhill Business Centre, Milton Keynes
Langlands Place Industrial Estate, East Kilbride
Retail – in town
Address
The Morgan Quarter, Cardiff
78–104 Town Square, Basildon
The Guineas, Newmarket
Idlewells Shopping Centre, Sutton-In-Ashfi eld
Corby Town Centre, Corby
Clyde Shopping Centre Clydebank
Retail – out of town
Address
Otford Road Retail Park, Sevenoaks
Stanwell Road, Ashford
Area sq ft (NIA)
Helical interest Average passing rent per sq ft
Vacancy rate
151,000
36,000
56,000
51,000
420,000
40,000
43,000
797,000
100%
100%
75%
75%
33%
£23.50
–
£17.63
£22.83
£8.62
100%
£24.50 / £105–£125 Zone A
100%
£9.33
1%
100%
2%
66%
4%
29%
0%
Area sq ft (NIA)
Helical interest Average passing rent per sq ft
Vacancy rate
70,000
23,000
93,000
53%
100%
£17.70
–
0%
100%
Area sq ft (NIA)
Helical interest Average passing rent per sq ft
Vacancy rate
62,000
25,000
62,000
108,000
153,000
410,000
67%
50%
100%
100%
100%
£7.71
£7.72
£5.25
£6.64
£4.89
0%
0%
0%
10%
27%
Area sq ft (NIA)
Helical interest
Zone A rent
Vacancy rate
220,000
54,000
142,000
185,000
700,000
627,000
1,928,000
100%
100%
100%
100%
100%
60%
£75–£125
£75–£100
£30–£50
£25–£50
£20–£80
£20–£65
4%
26%
9%
1%
7%
3%
101
Area sq ft (NIA)
Helical interest Average passing rent per sq ft
Vacancy rate
42,000
32,000
74,000
75%
75%
£17.96
£16.37
0%
0%
appendix I helical bar plc 2012
appendix I – property portfolio
Development programme
London offi ces
Address
Area sq ft (NIA)
Fund/owner
Helical interest
Type of development
200 Aldersgate Street, London EC1
370,000
Deutsche
Pfandbriefbank
Dev. Man
Refurbished and in course of letting
Mitre Square, London EC3
273,000
Helical
100%
Site for new consented offi ce building
643,000
Provincial offi ces
Address
Area sq ft (NIA)
Fund/owner
Helical interest
Type of development
The Hub, Pacifi c Quay, Glasgow
60,000
Helical
100%
Media focused multi-let offi ce (i.e. 60% let)
60,000
Industrial
Address
Area sq ft (NIA)
Fund/owner
Helical interest
Type of development
Tiviot Way, Stockport
–
Helical
100%
New build – sold since year end
Ropemaker Park, Hailsham
70,000
Helical
90%
New build – completed
70,000
Retail – in town
Address
Parkgate, Shirley, West Midlands
C4.1 Milton Keynes
Retail – out of town
Address
Leisure Plaza, Milton Keynes
Retirement villages
Address
Bramshott Place, Liphook, Hampshire
102
St Loye’s College, Exeter
Maudslay Park, Great Alne
Ely Road, Milton, Cambridge
Durrants Village, Faygate, Horsham
appendix I helical bar plc 2012
Area sq ft (NIA)
Helical interest
Type of development
157,000
33,000
190,000
50%
Consented food store, retail and residential
50%
Remaining retail and offi ce units, part let
Area sq ft (NIA)
Helical interest
Type of development
305,500
305,500
Units
151
206
132
101
154
744
50%
Consent for 113,000 sq ft retail store,
65,000 sq ft ice rink
Helical interest
Type of development
100%
100%
90 units sold, 18 under offer. Phases 1 and 2
completed, phase 3 under construction
Part of site has consent for 63 housing units
and is under offer for sale
100%
82 acre site with consent for a retirement village
100%
Planning consent granted for 89 open market
housing units. Site under offer to be sold
100%
Construction of a fi rst phase commenced
Change of use potential
Address
Cawston, Rugby
Arleston, Telford
Mixed use developments
Address
White City, London W12
King Street, Hammersmith, London
Fulham Wharf, London SW6
Retail – poland
Address
Area
Helical interest
Type of development
32 acres
19 acres
51 acres
100%
100%
32 acre greenfi eld site with residential potential
19 acre greenfi eld site with residential potential
Helical interest
Joint venture
50%
Dev. Man.
Type of development
Planning application for 1.5m sq ft mainly residential scheme
to be submitted summer 2012
Planning application submitted
Planning consent granted for 100,000 sq ft foodstore and
463 residential units.
Area sq ft
Helical interest
Fund/owner
Type of development
Park Handlowy Mlyn, Wroclaw
103,000
Europa Centralna, Gliwice
720,000
823,000
100%
37.50%
Helical
Completed development, fully let
Helical / Standard Life
Under construction
103
appendix I helical bar plc 2012
appendix II – risk register
Strategic risk
Risk
Group’s strategy is inconsistent with
market conditions e.g.:
- Asset concentration/lot size impacts on
liquidity (e.g. if investments becomes
diffi cult to sell does this affect our
liquidity)
- Asset concentration/mix creates
excessive volatility in property
revaluation movements
Inappropriate capital structure
(i.e. too highly geared)
Mitigation/remarks
Action to be taken
Management constantly monitors the Group
strategy and changes it where market conditions
dictate. Management team is very experienced and
has a strong track record in the property market
Due to the small size of the Group and the
management team, changes to the strategy can be
effected more quickly than most other property
companies
The group’s gearing was 90% at March 2012
Continue monitoring capital structure
The group’s gearing is constantly monitored to
ensure that it remains within the parameters that are
considered reasonable for the industry
Take gearing level into account when making
business decisions
Reputational risk
Risk
Mitigation/remarks
Action to be taken
Unwillingness of stakeholders to continue
to deal with Helical
Code of conduct and whistle-blowing policy
updated in 2010
Continue to monitor adherence to policies and
identify any new high-risk projects
Anti-bribery policy introduced in 2011
Currently no concerns identifi ed
Mitigation/remarks
Action to be taken
Focus on refi nancing over loans due before
March 2013
Good relationship with several
established lending institutions
Maturity profi le at 31 March 2012 is:
£59m maturing within 1 year
£72m maturing between 1 to 2 years
£1m maturing between 2 and 3 years
£22m maturing between 3 and 4 years
£110m maturing after 4 years
Since March 2012 £32m of loans expiring within
one year have been renewed until 2015
Borrowing is spread between a number
of different institutions
Agreed a £100m revolving credit facility
with RBS until January 2017
Financial risk
Risk
Inability to roll over loans
104
appendix II helical bar plc 2012
Financial risk (continued)
Risk
Foreign exchange risk
Mitigation/remarks
Action to be taken
Helical’s equity in its overseas developments has
been reduced in the year
Increase in cost of borrowing
At 31 March 2012 the Group had £120m of fi xed
rate debt and interest rates caps of £125m
Ensure that hedging % remains at an
appropriate level
Breaching loan covenants
Hedge effectiveness regularly monitored
Adherence to loan covenants are constantly
monitored and if necessary remedial action is taken
to cure the breach
Continue monitoring loan covenants
Insuffi cient liquidity to take advantage
of opportunities
As at 31/03/12 the Group had £35m of cash,
£38m of undrawn borrowings and £16m of
uncharged property
Maintain overdraft facilities
Ensure that cash resources do not fall below
currently forecast levels
Tenant default
Tenant covenant strength is considered when
making property decisions. Currently only 1 tenant
represents more than 5% of the Group’s share of
total rent roll
Maintain dialogue with tenants to reduce risk of
unexpected non-payment
Ensure no over reliance on individual tenants
Loss of deposits due to banking
counterparty failure
All deposits are held at high quality fi nancial
institutions
Ensure that all deposits remain at well capitalised
institutions
No signifi cant deposits held outside the UK
Regular monitoring of fi nancial institutions
Development risk
Risk
Mitigation/remarks
Action to be taken
Inability to add to the current development
pipeline
Experienced development team with an excellent
track record
Good reputation in property sector
Changes in legislation leading to delays
in receiving planning permission
Good relationships with planning consultants and
local authorities
Lack of demand for new property
Group’s strategy is to avoid doing speculative
developments
Inability to fi nd suitable contractors/
JV partners
Well established network of Joint Venture partners
which it has worked with in the past
Key up to date with planning legislation
Continue to use specialist professional advisors
Continue to avoid speculative developments
105
appendix II helical bar plc 2012
appendix II – risk register
Market risk
Risk
Property price falls
Mitigation/remarks
Action to be taken
Current uncertainties in the world economy mean
that future performance is diffi cult to predict though
Keep diversifi ed portfolio to prevent being
over-exposed to one sector
Helical has been active in disposing of non-
performing assets and rebalancing its portfolio for
the changing market
Reduced tenant demand for space
Focus is on buying well let properties in good
locations
Continue to ensure that vacant space is kept
to a minimum
People risk
Risk
Lack of the right personnel to ensure the
Group’s strategy is adhered to
Mitigation/remarks
Action to be taken
Senior management team are very experienced
Employee turnover is low
Remuneration is set to attract and retain high
calibre staff
Monitor staff resources to ensure appropriate to
any changes in the business
Health & safety issues
Health and safety policy updated regularly
Monitor compliance with policy
Use of specialist professional advice
Continue to use specialist advice
Bribery and corruption risk
Not involved in high risk activities
Introduced an anti bribery policy which it has
distributed to all staff and all signifi cant Joint
Venture partners
Continue to identify and monitor projects with a
greater exposure to bribery and corruption
Avoid doing business in high risk territories
106
appendix II helical bar plc 2012
investor information
The report and fi nancial statements, share price information, company
presentations, the fi nancial calendar, Corporate Governance, contact details
and other investor information on the Group are available in the Investor
Relations and Company Profi le area of our website www.helical.co.uk.
Registrar
All general enquiries concerning holdings of ordinary shares in Helical Bar
plc should be addressed to:
Capita Registrars
The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU
Telephone: 0871 664 0300*
Fax: 020 8639 2220
From outside the UK +44(0) 20 8639 3399
Website: www.capitaregistrars.com
Email: shareholder.services@capitaregistrars.com
*calls cost 10p per minute plus network extras. Lines are open between
9am and 5:30pm, Mon–Fri.
e–communication
UK shareholders may choose to be alerted about updates to the
Financial Reports, Results, Press Releases and Events Calendar sections
of the Group’s website by subscribing to the Alerting Service at www.
helical.co.uk. Shareholders may also submit their proxy votes
electronically. To register for this service, shareholders should visit the
Shareholders area of www.capitaregistrars.com.
Payment of dividends
Shareholders whose dividends are not currently paid to mandated
accounts may wish to consider having their dividends paid directly into
their bank or building society account. This has a number of advantages,
including the crediting of cleared funds into the nominated account on the
dividend payment date. If shareholders would like their future dividends to
be paid in this way, they should complete a mandate instruction available
from the Registrars. Under this arrangement tax vouchers are sent to the
shareholder’s registered address.
Dividends for shareholders resident outside the UK
Instead of waiting for a sterling cheque to arrive by mail, you can ask us
to send your dividends direct to your bank account. For information
contact the Company’s Registrar.
Dividend reinvestment plan (DRIP)
The Company offers shareholders the option to participate in a DRIP. This
enables shareholders to reinvest their cash dividends in Helical Bar plc shares.
Dividends
Dividend payment dates on the Company’s Ordinary 1p shares in 2011
were as follows:
Dividend
2010/11
Final
2011/12
Interim
Record
Date
1 July
2011
2 Dec
2011
Payment
Date
28 July
2011
22 Dec
2011
Dividend payment dates in 2012 will be as follows:
Dividend
2011/12
Final
2012/13
Interim
Record
Date
29 June
2012
Dec
2012
Payment
Date
26 July
2012
Dec
2012
Amount
3.15p
1.75p
Amount
3.40p
Unsolicited investment advice – warning to shareholders
Many companies have become aware that their shareholders have
received unsolicited phone calls or correspondence concerning
investment matters. These are typically from overseas-based ‘brokers’
who target UK shareholders offering to sell them what often turn out to
be worthless or high risk shares in US or UK investments. They can be
very persistent and extremely persuasive. A 2006 survey by the Financial
Services Authority (FSA) reported that the average amount lost by
investors was around £20,000. It is not just the novice investor that has
been duped in this way; many of the victims had been successfully
investing for several years. Shareholders are advised to be very wary of
any unsolicited advice, offers to buy shares at a discount or offers of free
reports into the company.
If you receive any unsolicited investment advice:
• Make sure you get the correct name of the person and organisation.
• Check that they are properly authorised by the FSA before getting
involved. You can check at www.fsa.gov.uk/register
• The FSA also maintains on its website a list of unauthorised overseas
fi rms who are targeting, or have targeted, UK investors and any approach
from such organisations should be reported to the FSA so that this list
can be kept up to date and any other appropriate action can be
considered.
• Report the matter to the FSA either by calling 0300 500 5000 or by
For further details, contact the Company’s Registrar.
completing an online form at:
For participants in the plan, key dates can be found in the online fi nancial
calendar in the ‘Investor Relations’ area at www.helical.co.uk.
ShareGift
Shareholders with a small number of shares, the value of which makes it
uneconomic to sell them, may wish to consider donating them to a
charity ShareGift, (registered charity 1052686) which specialises in using
such holdings for charitable benefi t.
Further information about ShareGift is available at www.sharegift.org or
by writing to: ShareGift, 17 Carlton House Terrace, London, SW1Y 5AH
Telephone: 020 7930 3737
http://www.moneymadeclear.org.uk/news/scams/share_scams.html
If you deal with an unauthorised fi rm, you would not be eligible to receive
payment under the Financial Services Compensation Scheme.
Share price information
The latest information on the Helical Bar plc share price is available on our
website www.helical.co.uk.
Registered offi ce
11–15 Farm Street, London, W1J 5RS
Registered in England and Wales No. 156663.
investor information helical bar plc 2012
107
glossary of terms
Average unexpired lease term
The average unexpired lease term expressed in years.
Capital value (psf)
The open market value of the property divided by the area of the property in square feet.
Diluted EPRA earnings per share
Diluted EPRA net assets per share
Earnings per share adjusted to exclude losses/gains on sale and revaluation of investment
properties and their deferred tax adjustments, the tax on loss/profi t on disposal of investment
properties, trading property losses/profi ts, impairment of available-for-sale investments and fair
value movements on derivative fi nancial instruments, on a diluted basis. Details of the method of
the calculation of the diluted EPRA earnings per share are available from EPRA.
Diluted net asset value per share adjusted to exclude fair value of fi nancial instruments and
deferred tax on capital allowances and on investment properties revaluation, but including the fair
value of trading and development properties in accordance with the best practice
recommendations of EPRA.
Diluted EPRA triple net asset value per share
Diluted EPRA net asset value per share adjusted to include fair value of fi nancial instruments and
deferred tax on capital allowances and on investment properties revaluation.
Diluted fi gures
Earnings per share
EPRA
Equivalent yield
Estimated rental value (ERV)
Initial yield
IPD
Reported amounts adjusted to include the effects of potential shares issuable under the
employee share option schemes.
Profi t after tax divided by the weighted average number of ordinary shares in issue.
European Public Real Estate Association.
The constant capitalisation rate which, if applied to all cash fl ows from an investment property,
including current rent, reversions to current market rent and such items as voids and
expenditures, equates to the market value. Assumes rent is received in arrears.
The market rental value of lettable space as estimated by the Group’s valuers at each balance
sheet date.
Annualised net rents on investment properties as a percentage of the investment property
valuation.
The Investment Property Databank Limited (IPD) is a company that produces a number of
independent benchmarks of unleveraged commercial property returns.
Net assets value per share (NAV)
Equity shareholders’ funds divided by the number of ordinary shares at the balance sheet date.
Net gearing
Passing rent
Rack rental value %
Total shareholder return (TSR)
True equivalent yield
Unleveraged returns
108
Total borrowings less short-term deposits and cash as a percentage of equity shareholders’
funds.
The annual gross rental income excluding the net effects of straightlining lease incentives.
The anticipated yield, which the initial yield will rise to once the rent reaches the ERV.
The growth in the ordinary share price as quoted on the London Stock Exchange plus dividends
per share received for the period expressed as a percentage of the share price at the beginning
of the period.
The constant capitalisation rate which, if applied to all cash fl ows from an investment property,
including current rent, reversions to current market rent and such items as voids and
expenditures, equates to the market value. Assumes rent is received quarterly in advance.
Total property gains and losses (both realised and unrealised) plus net rental income expressed
as a percentage of the total value of the properties.
glossary of terms helical bar plc 2012
fi nancial highlights
fi nancial calendar
Underlying profi t before tax, property
write downs and investment gains1
£8.6m
2011: £2.9m
Final proposed dividend per share
3.40p
2011: 3.15p
Year ended 31 March 2012
Annual General Meeting to be held 24 July 2012
Final ordinary dividend payable
26 July 2012
Half year ending 30 September 2012
Year ending 31 March 2013
Results and interim ordinary dividend announced November 2012
Interim ordinary dividend payable December 2012
Results and fi nal dividend announced May 2013
Final ordinary dividend payable July 2013
Diluted EPRA earnings/(loss)
per share2
3.4p
2011: (6.4p)
Diluted EPRA net asset value
per share3
250p
2011: 253p
IFRS net assets
£253.7m
2011: £255.4m
Portfolio valuation4
£572.6m
2011: £532.2m
1 Pre-tax profi t as adjusted for property write-downs and net gain on sale and revaluation of investment properties.
2 Calculated in accordance with IAS33 and the best practice recommendations of EPRA.
3 Calculated in accordance with the best practice recommendations of EPRA.
4 Includes the Group’s share of properties held in joint ventures and the surplus on directors’ valuation of trading and development stock.
Front cover: Barts Square, London EC1
helical bar plc 2012
advisors
Registrars
Bankers
Joint stockbrokers
Auditors
Merchant bankers
Solicitors
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Aareal Bank AG
Allied Irish Bank
Barclays Bank plc
Clydesdale Bank
HSBC plc
Nationwide
The Royal Bank of Scotland Group plc
JP Morgan Cazenove Limited
10 Aldermanbury
London EC2V 7RF
Oriel Securities Limited
150 Cheapside
London EC2V 6ET
Grant Thornton UK LLP
Grant Thornton House
Melton Street
Euston Square
London NW1 2EP
Lazard Ltd
50 Stratton Street
London W1J 8LL
Ashurst
Clifford Chance
Lawrence Graham
Linklaters
Lovells
Mishcon de Reya
Nabarro
Norton Rose
Semple Fraser
Wragge & Co
109
fi nancial calendar/ advisors helical bar plc 2012
Helical Bar plc
Registered Office
11-15 Farm Street
London, W1J 5RS
Tel: 020 7629 0113
Fax: 020 7408 1666
email: info@helical.co.uk
www.helical.co.uk
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Helical Bar plc
report & accounts
2012