Helical Bar plc
Report & Accounts 2013
helical bar plc 2013
helical bar plc 2013
contents
directors’ report - annual review
01 what we do
02 helical at a glance
05 chairman’s statement
06 chief executive’s statement
08 strategy and performance
12 events of the year
14
16
18 principal investment properties
24 development programme
35 financial review
42 corporate responsibility
investment portfolio overview
investment portfolio statistics
directors’ report - governance
45 governance
46 corporate governance review
49
50
51
53
54 directors’ remuneration report
63
64
report of the audit committee
report of the directors
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
report of independent auditor
financial statements
66 financial statements
67
68 consolidated income statement
68 consolidated statement of comprehensive income
69 consolidated and company balance sheets
70 consolidated and company cash flow statements
71 consolidated and company statements of changes in equity
72 notes to the financial statements
99
ten year review
investor information
101 investor information appendix I - property portfolio
104 investor information appendix II - risk register
106 shareholder information
107 glossary of terms
108 financial calendar
108 advisors
financial highlights
Diluted EPRA earnings per share1
Final proposed dividend per share
2.4p
2012: 3.4p
3.70p
2012: 3.40p
Diluted EPRA net asset value per share1
IFRS net assets
264p
2012: 250p
£253.8m
2012: £253.7m
Portfolio valuation2
Portfolio return3
£626.4m
2012: £572.7m
8.6%
2012: 5.6%
1 Calculated in accordance with the best practice recommendations of EPRA.
2 Includes the Group’s share of properties held in joint ventures and the surplus on directors’ valuation of trading and development stock.
3 Unleveraged return of property portfolio according to IPD.
Front cover: CGI of refurbished 207 Old Street, London EC1.
what we do
helical bar plc 2013
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Helical Bar: a property investment and development company
Helical aims to deliver market leading returns by acquiring high
yielding investment properties, applying a rigorous approach to
asset management and deploying limited equity through a variety
of different structures into development situations which have the
potential to be highly profitable.
Our spread of activities gives us flexibility to deploy capital rapidly
across our business and focus on whatever opportunities offer the
best returns at different points of the property cycle.
We aim to make excellent returns for our shareholders (which
include the management team who own 15% of the company)
through a wide variety of high margin activities.
Our core areas include central London offices and high yielding
retail investments, central London developments and refurbishment
projects pre-let regional foodstore developments and retirement
villages.
Barts Square, London EC1
Brickfields, White City, London W12
Clyde Shopping Centre, Clydebank
01
helical bar plc 2013
helical at a glance
Overall
portfolio split
Investment
portfolio
Investment
Trading and development
71%
29%
London offices
In town retail
South East Offices
36%
53%
4%
Out of town retail
Industrial
Other
3%
3%
1%
London
investment
Retail
investment
Key projects
Battersea, London SW8
Broadway House, London W6
Shepherds Building, London W14
Old St, London, EC1
Barts Square, London EC1
Key projects
The Morgan Quarter, Cardiff
Clyde Shopping Centre, Clydebank
Corby Town Centre, Corby
Idlewells Shopping Centre, Sutton-in-Ashfield
The Guineas, Newmarket
Central London
development
Key projects
200 Aldersgate St, London EC1
Mitre Square, London EC3
3.12 acre
Freehold interest at Old St
2.0m sq ft
Of retail investment space
273,000 sq ft
Office consent at Mitre Square
02
helical at a glance
helical bar plc 2013
Trading and development portfolio (Helical’s share)
Project type
Office
Retail
Industrial
Mixed use
Change of use
Retirement villages
Poland
Total
Book value
£m
Fair value
£m
Surplus
£m
% of development
portfolio (fair value)
15.6
22.3
1.4
5.0
4.6
55.3
65.4
169.6
27.3
23.6
1.4
22.4
6.8
72.6
65.4
219.5
11.7
1.3
–
17.4
2.2
17.3
–
49.9
12.44
10.75
0.64
10.19
3.11
33.07
29.80
100.00
Note: the table above includes the Group’s share of development properties held in joint ventures.
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West London
development
Retail
development
Key projects
Brickfields, London W12
King St, Hammersmith, London W6
Key projects
Parkgate, Shirley, West Midlands
Leisure Plaza, Milton Keynes
Europa Centralna, Poland
Retirement
villages
Key projects
Bramshott Place, Liphook
Durrants Village, Faygate
Maudslay Park, Great Alne
Millbrook Village, Exeter
c1.5m sq ft
Size of mixed use scheme at White City
March 2013
Europa Centralna open for trade
618 units
In our retirement village programme
03
helical bar plc 2013
200 Aldersgate Street,
London, EC1
04
chairman’s statement
Your Company has had a very good year against
a backdrop of challenging, albeit improving,
economic conditions. The total unleveraged return
of its property portfolio, as measured by IPD, was
8.6%, the Company’s best return since 31 March
2007, compared to the IPD Universe of March
valued funds of 3.9%.
helical bar plc 2013
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Total property return increased by 31% to £35.9m (2012:
£27.5m) and included growing net rents of £24.5m (up 7.0%
from £22.9m in 2012) and development profits of £7.0m
(2012: £0.7m). Diluted EPRA net asset value per share
increased 5.6% to 264p (2012: 250p). Total Shareholder
Return for the year to 31 March 2013 was 28.4%, compared
to returns for the Listed Real Estate Sector of 21.8% and for
the UK Equity Market as a whole of 16.8%. These results
allow the Board to continue its progressive dividend policy
and to recommend to shareholders a final dividend of 3.70p,
taking the total for the year to 5.55p, an increase of 7.8%.
The year has seen many successes in the Company’s
investment portfolio and development programme. Asset
management initiatives have driven the net income of the
Group forward and, at 31 March 2013, passing net rents were
£28.7m (2012: £25.9m). Our share of the surplus on revaluation
of investment properties, including those held in joint ventures,
was £6.8m (2012: £4.2m) and the investment portfolio is now
valued at £407.0m (2012: £394.1m). On the development
side we have delivered against many of the milestones set
at the beginning of the financial year, most notably at 200
Aldersgate Street, London EC1, where we have as of today
let 90% of the 348,000 sq ft refurbished office building (with
a further 6% under offer), at our 1.5m sq ft development at
Brickfields, White City where we have received planning
consent and contracts have been exchanged for a sale of the
site, and at our 450,000 sq ft redevelopment of Barts Square,
London EC1, where we have received a resolution to grant
planning consent.
Despite frequent commentary that banks are not lending
enough to the private sector, there is clearly an appetite
amongst banks to lend to well managed, profitable and
stable public companies in the real estate sector. We continue
to enjoy excellent relationships with our banking partners
with c. £290m of new or renewed facilities agreed since the
beginning of 2012, extending our debt maturity to 3.3 years.
With interest rates continuing at historic lows, we have
been able to ensure that we are adequately protected against
future interest rate rises, thereby securing growing income
surpluses, strong cash flows and good interest cover.
During the year we consulted with shareholders on
a proposed new annual bonus scheme, designed to codify
the existing discretionary scheme, rewarding participants
based on the results of the business and seeking greater
alignment of executive remuneration with shareholders’
interests. The resulting bonus scheme, incorporating the
feedback received from shareholders holding more than 50%
of our share register, was approved by over 95% of
shareholders who voted at the 2012 AGM. I am delighted
this year’s results have allowed participants in the scheme
to receive bonuses in the form of cash payments and
deferred shares.
Consultation with shareholders was also undertaken with
regard to changes to the Board during the year. Richard
Gillingwater, Senior Independent Director, and Richard
Grant, Audit Committee Chairman, joined as independent
non-executive directors and I welcome both of them to the
Board. I congratulate my former deputy, Tim Murphy, who
replaced me as Finance Director when I became Chairman,
having served as Finance Director for the last 25 years. Our
former Chairman, Giles Weaver, served with distinction
during his time on the Board and I would like to thank him
as well as Antony Beevor and Wilf Weeks, who have also
retired, for their invaluable contributions to the Board and
its Committees.
After a challenging five years, I believe we are on the cusp
of returning to delivering outperformance. Looking forward,
we will benefit from a rebalanced portfolio with a strong and
growing income stream which we intend to increase
significantly in the next year. In addition, our development
portfolio is expected to deliver substantial profits and cash
returns over the same period and in the following years.
We look forward to these two elements of our business
combining to generate strong returns and value on behalf
of all our shareholders.
Nigel McNair Scott,
Chairman
23 May 2013
05
helical bar plc 2013
chief executive’s statement
It is worth restating the Company’s strategy to re-emphasise
our focus and differentiate ourselves from our peer group. We
are a property investment and development company whose
objective is to maximise shareholder returns by driving income,
repositioning assets to deliver capital growth and generating
substantial development gains employing limited amounts of
our own equity. This simple strategy is once again starting to
bear fruit and deliver industry outperformance.
Helical’s strategy
Our investment portfolio includes high yielding multi-let
retail located throughout the UK and offices in central
London. Through intensive property management we
have been able to grow income and enhance capital
values. An analysis of the properties we hold demonstrates
how we have managed to circumvent the well documented
pitfalls in the UK’s retail sector to maintain positive rental
returns. We can now look forward to capital growth for
good quality secondary stock as those investors seeking
better yields now move up the risk curve. The balance
of our investment portfolio has increased its weighting
towards central London office investments where we have
concentrated our efforts over the last two years and where
our main focus now lies.
Having created stable positive income returns the
Company is now able to progress with a number of new
developments and refurbishments where by carrying
out land assembly, planning and in some cases securing
pre-letting or pre-funding, we can create significant returns
with little capital or balance-sheet exposure. It should be
noted that projects at 200 Aldersgate EC1, in partnership
with the Deutsche Pfandbriefbank, and the Brickfields,
White City W12 development, acting as development
partner with Aviva Investors, have involved limited use
of your Company’s capital. We shall remain focussed
on central London schemes for the length of the current
market cycle.
In previous reports I have referred to Helical Retail’s success
in securing a number of foodstore-led developments
throughout the Midlands and the South East. Acting with
our long standing partners at Oswin Developments, we
have now optioned or have exclusivity over eight projects
with further deals in the pipeline. Despite recent reports of
retrenchment by the major foodstore companies, our
outstanding relationships and reputation have enabled
us to obtain sites in those areas still under-serviced and
in demand from foodstore retailers. The projects will be
pre-sold to investment partners.
It would be wrong not to acknowledge our position as
one of the UK’s leading developers of retirement villages.
These take the form of 150+ units set around a clubhouse
in parkland settings for sale to those over 55 years of age.
With the benefit of advantageous bank facilities, we have
embarked on three new projects comprising of 467 units
on sites near Horsham in Sussex, Stratford-upon-Avon in
Warwickshire and Exeter in Devon. Success at Liphook
(151 units), despite the challenges of the last five years,
gives us the encouragement to continue with this specialist
sector in partnership with Urban Renaissance Villages.
We remain grateful to our supportive bankers who have
proved ever-willing to respond positively and quickly to
requests we put to them. This enables us to be quick to
take advantage of opportunities that arise. You will note
that we have successfully increased our banking facilities
during the year, extending their maturity dates. This
process will continue and we will look to further extend
and diversify our sources of funding.
Our market
Our path through the next three years becomes clearer
by the day. We will maintain our high yielding investment
portfolio and look to reinvest cash receipts from sales of our
trading and development stock into accretive acquisitions
with a strong emphasis on central London. I regard our
successful investment in foodstore development and the
retirement village business as valuable profit generators
that sit beside our main focus on the opportunities we see
in central London.
Overseas equity continues to be a vital element in today’s
property market. It is not and never has been our role to
compete to invest in prime stock, but rather to use our
expertise to create prime investments for sale into a strong
market. We are confident that given the skills and experience
we provide and the financial partners with whom we are
involved, the next few years will see enhanced profits.
06
•
•
•
•
•
chief executive’s statement
Silverthorne Road, Battersea
London SW8
helical bar plc 2013
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We believe that our market is now moving out of recession,
albeit slowly. Much of the potential overhaul of bad bank
debt is being taken out by globally financed debt acquisitions
and vast sums of ‘equity’ continue to seek to invest in the
UK, safe in the knowledge that we enjoy the ‘rule of law’
and a steady state economy.
Helical’s progress
We were delighted to announce last week the letting
of 80,909 sq ft to FTI Consulting at 200 Aldersgate which
triggers our entitlement to a profit share. In similar vein
we have announced the sale of the Brickfields, White City
project where we have acted as development partner on
behalf of Aviva. Once this sale contract has been completed,
we will be entitled to a profit share, the details of which we
will be able to disclose at that time. We anticipate both the
above transactions will create substantial profits to be
recognised in the accounts for the year to 31 March 2014.
At Mitre Square, EC3, we have commenced demolition
and, following granting of planning consent at Barts Square,
EC1, we are preparing for development in January 2015.
We are also hopeful of submitting a planning application
in July for the Hammersmith Town Hall project in partnership
with Grainger, and anticipate consent for our major
refurbishment at 207-211 Old Street at “Silicon Roundabout”
prior to the end of the year.
As has already been announced we have completed our
major Polish retail development at Gliwice where we maintain
a 50% interest with a pre-agreed take-out in approximately
18 months’ time by our partner, clients of Standard Life.
Summary
Happily the ‘Helical Model’ is alive and well. My thanks to
the Helical team, our investment partners, our bankers, the
many property agents and corporate advisors with whom
we have the pleasure of dealing with day to day. Last but
by no means least, our thanks to you, our shareholders, for
your support.
Michael Slade,
Chief Executive
23 May 2013
07
helical bar plc 2013
strategy and performance
Investment strategy
The investment portfolio, which is mainly let and income
producing, has two main purposes:
• To provide a steady income stream to cover overheads, interest and
dividends;
• 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 selection of
properties, generally comprising multi-let offices in London, shopping
centres, industrial estates and mixed-use portfolios. Our key aim, when
undertaking this selection process, is to seek to ensure that there is
sustainable demand from potential occupiers for all of our assets.
We frequently refurbish and/or extend our properties. We also work
closely with tenants with the aim of maintaining maximum occupancy
in our portfolio properties. Our relationships with these tenants can lead
to opportunities to increase value through re-gearing leases or moving
tenants within a building as their respective businesses expand or
contract.
Additionally, we may purchase entirely vacant buildings (such as the
Morgan Quarter, Cardiff or Shepherds Building, London W14) with a
view to carrying out a major refurbishment and, where we are confident
that the occupational market is strong enough to allow the majority of
the building to be let quickly.
Our portfolio by equity invested
Development strategy
We employ a wide variety of approaches to our
development activities. The Group aims to limit the
amount of equity that it deploys into development
situations through a variety of different structures which
are explained below. These aim to maximise the Group’s
share of profits in a development by leveraging the
capital employed by the Group and with a view to
managing the risks inherent in the development process.
• Participation in profit share situations where no equity investment is
required, where we will seek to minimise our ongoing fee to maximise
our profit share so that our interests are completely aligned with our
partners. In this way, for minimal equity commitments, we can benefit
from a significant profit share if we contribute to a project’s success
by using our skills and experience through the entire development
process. This participation method was used in connection with our
investments in the Fulham Wharf and 200 Aldersgate developments.
• Reduce up-front equity required by entering into conditional contracts
or options. We have used this approach in the context of our Mitre
Square development (where Helical has entered into conditional
contracts) and our foodstore led supermarket development
programme (where land is optioned or put under contract conditional
on achieving planning permission and pre-let to a supermarket
operator) thereby mitigating the risks of the developments.
• Co-investment alongside a larger partner where we have a minority
equity stake, where we will typically receive a “waterfall” payment
subject to certain conditions being met. Such waterfall payments tend
to be structured in a manner where we receive a greater profit share
than our percentage investment depending upon the success of the
project. This investment method is used in our investments in the Barts
Square, Old Street and White City developments.
• Traditional forward funding, where the cost of the development overrun
is one to be borne by the developer for a commensurate profit participation.
In such a case, we have no equity in the property but underwrite a
maximum build cost and bear the risk of costs being in excess of an
agreed maximum construction price.
51%
of Helical’s equity is
deployed in London
and the South East
Scotland 6%
Wales 7%
South East 16%
London 35%
Midlands 21%
South West 3%
North 1%
Poland 11%
08
strategy and performance
helical bar plc 2013
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 financial stability, current and future financial
performance and reputation. As well as seeing changes
in our internal and external environment as potential
risks, we also see them as being opportunities which can
drive performance.
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 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 specific 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 risks faced by the Group do not change significantly from year to year
but their importance and the Group’s response to them vary in accordance
with the changes in the internal and external environment. The Board
considers not only the current situation but also potential future scenarios
and how these might impact our business when setting the Group’s policies.
Helical sees its principal uncertainties as falling within the following
categories:
development
risk
market
risk
Helical
financial
risk
strategic
risk
people
risk
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Market risks are risks specific to the economy as a whole and to the
property sector. These include the UK economy falling into recession
again and falling property prices.
Strategic risk includes the risk that Helical’s business strategy or capital
structure results in the Group underperforming the rest of the property
sector, or being unable to take advantage of opportunities that may arise.
Helical’s strategy is regularly discussed by the Board to ensure that it is
appropriate.
Helical is subject to a number of financial risks due to the way it is
funded. These include the risk that interest rates rise, the risk that Helical
does not have ability to access cash as it is required and the risk that the
Group’s lenders no longer wish to offer loans to it. These risks are carefully
managed by arranging debt repayment dates to spread the maturity
profile of bank loans over several years, seeking medium to long term
debt, limiting the impact of potential interest rate rises through the use of
interest rate swaps and caps, ensuring the availability of resources
through the preparation of detailed medium and long term cash forecasts,
retaining a significant level of cash or undrawn committed bank facilities and
ensuring strong relationships are maintained with all the major real estate
lenders.
Helical’s continued success is reliant on our management and staff and
successful relationships with our joint venture partners. People risks include
the inability of Helical to find the right personnel to carry out our strategy.
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 insist that our employees and joint venture partners act
with both ethical and health & safety considerations at the forefront of
their decision making processes.
The Group derives a significant part of its results from development activity.
Development profits are more likely to be subject to fluctuation due to external
factors as they are more opportunistic in nature. Development risks
include: changes in planning legislation, difficulty 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 through a variety of
means including using our own capital, bringing in joint venture partners
and forward funding development projects.
The Board has ultimate responsibility for risk within the business. However
the small size of our team and our flat management structure allows the
Executive Directors to have close contact with all aspects of the business
and allows us to ensure that the identification and management of risks
and opportunities is part of the mindset of all decision makers at Helical.
A more detailed analysis of these risks and what steps the Group takes
to mitigate these risks can be found in appendix II on page 104.
09
helical bar plc 2013
strategy and performance
Performance
A property company’s share price should reflect 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 identifiable 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
2013 was 8.6% (2012: 5.6%) compared to the IPD median benchmark of
3.9% (2012: 6.4%) and upper quartile benchmark of 4.7% (2012: 7.0%).
The three years to 31 March 2013 was a period during which the Group
continued to transform its property holdings and this has had an impact
on performance in that period. However, over five, 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 figure are shown in note 32 to these accounts.
Management is incentivised to exceed 15% p.a. growth in net asset value
per share. The diluted net asset value per share, excluding trading stock
surplus, at 31 March 2013 was 217p (2012: 217p).
Including the surplus on valuation of trading and development stock, the
diluted EPRA net asset value per share at 31 March 2013 was 264p
(2012: 250p). Diluted EPRA triple net asset value per share was 259p
(2012: 246p).
Other key performance indicators include:
• a surplus of net rental income over finance costs, overheads
and dividends;
• staff retention and average length of service; and
• inclusion in the FTSE4Good Index.
Europa Centralna, Gliwice
720,000 sq ft of
out-of-town retail space
10
strategy and performance
Helical Bar portfolio unleveraged returns to 31 March 2013
5 yrs
%pa
3 yrs
%pa
1 yr
%pa
Helical
IPD
Helical’s Percentile Rank
8.6
3.9
5
5.6
7.2
61
3.7
1.5
12
helical bar plc 2013
10 yrs
%pa
10.8
6.1
1
20 yrs
%pa
14.4
8.9
1
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Source: Investment Property Databank.
Helical’s trading & development portfolio (29% 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
Helical Bar plc
UK Equity Market
Listed Real Estate Sector Index
Direct Property - monthly data
1
2
3
4
1 year
pa
%
28.4%
16.8%
21.8%
2.5%
3 years
pa
%
-9.5%
8.8%
9.8%
6.6%
Performance measured over
5 years
pa
%
-7.1%
6.7%
-4.0%
1.0%
10 years
pa
%
9.1%
10.7%
7.2%
5.7%
15 years
pa
%
20 years
pa
%
25 years
pa
%
9.2%
4.6%
3.2%
7.3%
14.7%
10.0%
8.1%
7.0%
8.5%
9.4%
5.1%
8.1%
1 Growth over 1 year, 3 years etc to 31/03/13
2 Growth in FTSE All-Share Return Index over 1 year, 3 years etc to 31/03/13
3 Growth in FTSE 350 Real Estate Super Sector Return Index over 1 year, 3 years, 5 years and 10 years to 31/03/13. 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 31/03/13
Europa Centralna, Gliwice
720,000 sq ft of
out-of-town retail space
11
helical bar plc 2013
events of the year
White City, London
W12
In March 2013, and in joint venture with Aviva, we received
a resolution to grant planning permission for a residential
led mixed use scheme comprising c.1.25 million sq ft of
residential, 210,000 sq ft of commercial, and 60,000 sq ft
of retail, leisure and community uses. Since the year end
contracts have been exchanged to sell the site.
1.5m sq ft mixed use
Barts Square, London
EC1
In November 2012 we received a resolution to grant planning
permission to build 225,000 sq ft of offi ce space, 215 high
quality residential apartments across a number of buildings
and retail at ground fl oor level.
3.2 acre mixed use development
Europa
Centralna,
Gliwice
The 720,000 sq ft out-of-town retail scheme
opened in March 2013. The scheme is
currently 80% let with tenants including Tesco,
Castorama, Media Saturn and Sports Direct.
720,000 sq ft shopping centre
and retail park
Old Street, London EC1
In November 2012 Helical, in a joint venture with Crosstree
Real Estate Partners, acquired 284,000 sq ft of offi ce and
retail space at the Old Street roundabout, London EC1.
3.12 acre freehold interest
12
events of the year
helical bar plc 2013
200 Aldersgate Street,
London EC1
By 31 March 2013, Helical had let 208,261 sq ft
with a further 103,323 sq ft let since then and 21,430 sq ft
under offer.
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Fulham Wharf,
London SW6
In June 2012, housebuilder Barratts bought the site from
Sainsburys enabling Helical to recognise its profi t share with
cash receivable when Sainsburys receives its consideration.
100,000 sq ft store and 463
residential units
Parkgate, Shirley,
West Midlands
At Parkgate, Shirley, in joint venture with Coltham Developments,
construction continues of an 80,000 sq ft Asda foodstore,
and 78,000 sq ft of retail and leisure accommodation, 50% of
which is in solicitors’ hands.
Construction started in April 2012
Sales
Since March 2012 we have sold £23m of investment
properties at 200 Great Dover Street, London SE1; Langlands
Place Industrial Estate, East Kilbride; Stanwell Road, Ashford
and Merlin Business Business Park, Manchester.
We have sold £29m of development properties including the
retirement village site at Ely Road, Milton and the back part of
the site at Millbrook Village, Exeter; and the land at Tiviot Way,
Stockport.
13
helical bar plc 2013
investment portfolio overview
Our £407m investment portfolio provides
income to cover all operational and finance
costs and dividends. We have a strong
focus on asset management, maximising
net operating income and working
closely with our tenants.
It is our aim to grow our investment
portfolio from 71% now to 75% of our
assets further increasing our net
cash flow.
Our income stream is diverse and secure
with no tenant accounting for more than
5.5% of the rent roll. Our average weighted
unexpired lease term is 6.4 years.
The income stream has grown steadily
since 2010 and is highly reversionary.
The passing rent from our investment
portfolio is £28.7m and the estimated
rental value of our portfolio £32.4m
(Helical share). This reversionary
income will be captured
through letting vacant
units and rent reviews.
Through judicious buying
of under-rented buildings
in growth areas, securing
lettings and undertaking
refurbishments, we aim
to generate substantial
capital growth in our
property values.
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14
Retail
Clyde Shopping Centre
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Shopping
Centre
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Idlewells Shopping Centre
Sutton-in-Ashfield
Corby Town Centre
Corby
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SYDENHAM HILL
investment portfolio overview
helical bar plc 2013
Asset management
During the year contracted income increased by £0.38m.
There was significant activity within the investment portfolio with a lease
event on nearly 300 leases.
We lost £0.75m of rent at lease end or break (2.5% rent roll) and a further
£0.73m through tenant administrations (2.5% rent roll). Our biggest
exposures to administrations were Clintons, Peacocks and JJB Sport. We
did not have any units let to HMV, Jessops or Comet and only one each
of Blockbuster and Dreams.
We concluded £1.48m of new lettings (5.3% rent roll) and benefitted from
uplifts at rent reviews of £0.38m.
The Guineas
Shopping
Centre
Newmarket
Rent lost at break/expiry
Rent lost to administrations
Rent reviews
Lease renewals and new lettings
Total change
-£0.75m
-£0.73m
+£0.38m
+£1.48m
+£0.38m
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Acquisitions
It has been a relatively quiet year for acquisitions with much focus on
delivering value from the existing portfolio.
We did however acquire 207-211 Old Street in joint venture with Crosstree
(Helical 33.3% interest) for £60.8m. A planning application for a major
refurbishment and creation of extra floor area as well as significant public
realm works will be submitted shortly. Whilst plans are being developed,
we are benefiting from a 4.2% running yield.
Future investment acquisitions
The focus remains on London for future acquisitions albeit competition is
strong. With continued efforts we are confident that we will be able to
acquire reasonably priced assets with significant potential to add value
through repositioning and refurbishment with the potential to increase
rents. These assets are likely to be multi-let (or have the ability to be so)
in fringe central London locations such as Hammersmith, Islington,
Camden, Southwark and Shoreditch.
We also managed to substantially reduce the number of tenants that were
holding over (in occupation beyond their lease expiry) from 57 tenants at
31 March 2012 (3.6% rent roll) to 29 at 31 March 2013 (1.1% of rent roll).
Overall we have seen good letting demand across the portfolio, reducing
our vacancy rate from 8.8% (31 March 2012) to 5.7%. We have seen
strong take up and rental growth in our London office portfolio and in
particular in our retail holding in Cardiff. Across the portfolio we have seen
ERV growth of 0.4%, with a marginal fall in the retail portfolio (-1.3%)
being more than offset by our London offices (5.9%). Note that this
occupancy and ERV analysis ignores Barts Square and Old Street, both of
which have redevelopment opportunities.
Sales
Since 31 March 2012 we have sold £50.8m of property (£83.2m year to
31 March 2012). Our sales are lower than previous years principally because
the majority of our non-income producing assets with limited growth
prospects had already been sold.
Significant sales include £10.6m of units at our retirement village at
Bramshott Place, Liphook and part of our site at Exeter for £7.6m. We
also sold our retirement village site at Milton, Cambridgeshire, having
achieved planning consent for open market housing, for £6.8m.
We sold the remainder of our industrial development site in Stockport for
£4.5m bringing our joint venture with Chancerygate to a conclusion.
We also sold properties in East Kilbride for £4.8m, Ashford for £7.4m,
Merlin Park, Manchester for £3.6m and Southwark for £6.5m.
15
investment portfolio statistics
helical bar plc 2013
investment portfolio
statistics
The following refers to Helical’s share of the investment portfolio.
Portfolio yields
Industrial
London offices
South East offices
Retail
Total
Valuation movements, portfolio weighting and changes to rental values
Industrial
London offices
South East offices
Retail
Other
Total
Note includes sales, purchases and capex.
Capital values, vacancy rates and unexpired lease terms
Industrial
London offices
South East offices
Retail
Total portfolio
16
Initial
yield
%
Reversionary
%
Yield on
letting
voids
%
Equivalent
yield (AiA)
%
9.4
6.1
8.3
7.4
7.2
9.8
8.0
8.5
8.1
8.1
10.3
7.1
8.3
7.8
7.7
9.1
7.5
8.5
7.6
7.7
Valuation
increase /
(decrease)
%
ERV
change
since
Mar 2012
%
-9.5
4.9
0.5
-0.3
19.0
1.3
-0.4
5.9
–
-1.3
–
0.4
Weighting
%
3.0
35.5
4.0
56.0
1.5
100.0
Capital
value psf
£
Vacancy
rate by area
%
Average
unexpired
lease term
(years)
63
230
209
133
163
12.5
12.3
–
3.0
5.7
2.9
3.6
16.8
7.1
6.4
investment portfolio statistics
helical bar plc 2013
Lease expiries or tenant break options
% of rent roll
Number of leases
Average rate per lease (£)
2013
11.4
104
2014
13.6
107
2015
8.9
66
2016
12.2
66
2017
10.9
68
32,600
37,800
40,000
54,916
47,600
In the year to 31 March 2013 we retained 69% of tenants who had a lease expiry. 86% of tenants who had break options did not exercise their breaks.
This compares favourably to the industry averages of 41%* and 52%* respectively.
* Source: IPD / Strutt and Parker Lease Events Review 2012
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We have a strong rental income stream and a diverse tenant base, with no single tenant accounting for more than 5.5% of the rent roll. The top 10
tenants account for 26.5% of the total rent roll and the tenants come from diverse industries.
Rank
Tenant
1
2
3
5
4
6
7
8
9
10
Total
Endemol UK Ltd
Barts and The London NHS Trust
TK Maxx
Quotient Bioresearch Ltd
Asda Stores Ltd
Argos
Fox International Channels
AMEC Group Ltd
Wickes Building Supplies Ltd
Metropolis Group
6%
engineering
12%
biotech
31%
media
Top 10 Tenants
by Tenant
Industry
35%
retail
16%
government
Tenant
industry
Media
Government
Retail
Biotech
Retail
Retail
Media
Engineering
Retail
Media
%
Rent roll
5.3%
4.1%
4.1%
3.2%
2.2%
1.6%
1.6%
1.5%
1.5%
1.4%
26.5%
17
helical bar plc 2013
principal investment properties
retail
Our strategy is to acquire multi-tenanted
properties where there is significant
opportunity to increase net operating income
and capital values. In both our office and retail
investments we acquire properties with rents
which are low compared to equivalent
buildings providing scope for rental growth
and low total occupational costs. We spend
a considerable amount of time talking to
our tenants both prior to acquiring buildings
and during the course of our ownership to
ensure that the space they occupy continues
to be fit for their purpose. We continue to
enjoy very strong cash on cash returns from
many of our high yielding retail assets.
Corby Town Centre
Corby
This asset, comprising nearly 40 acres, is virtually
the entirety of the commercial centre of Corby. It
was acquired in 2011 and, since acquisition, 40
new leases or lease renewals have been concluded.
Anchor tenants include Primark, TK Maxx, H&M,
Argos and Wilkinsons. We enjoy cash on cash
returns of 15.0% and have increased income
since its acquisition.
The first phase of cosmetic refurbishment works
has completed, substantially improving the look and
feel of the centre and driving strong letting interest.
Tenant performance remains good with both the
Dreams and Blockbusters on the Oasis Retail Park
being included in the package acquired by their
respective new owners and remaining open
for trade.
Significant projects are now planned to convert
vacant upper parts of the town to residential with
a planning application having been submitted for
the first phase of these works.
The Morgan Quarter
Cardiff
Acquired empty in 2005 this asset was
comprehensively refurbished and let to retailers
including Urban Outfitters, TK Maxx and Molton
Brown. During the year we let a unit to Jack Wills
setting new zone A evidence of £175 per sq ft.
Since the opening of St Davids 2 in 2009, The
Hayes has become one of Cardiff’s principal
retailing pitches. We have benefited from a
number of new lettings and positive rent reviews
increasing passing rent to £3.3m, continuing the
progression towards an ERV of £4.2m. The rent
reviews concluded in the year have shown a
25% rental growth from 2007 to 2012.
4
5
3
1
2
1 Corby Town Centre, Corby
2 The Morgan Quarter, Cardiff
3 The Guineas, Newmarket
4 Otford Retail Park, Sevenoaks
5 Clyde Shopping Centre, Clydebank
18
principal investment properties
helical bar plc 2013
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Clyde Shopping Centre,
Clydebank
This asset, which comprises the majority of the
town’s retail offer, was acquired in 2010 in joint
venture with a private investor. The Group has a
60% economic interest in the centre and
undertakes all of the asset management
activities. Since its acquisition, the rental income
attributable to this asset has increased by nine per
cent and more than 30 new lettings to tenants
including The Post Office, Trespass, Watt Brothers
and Poundworld have been concluded. Anchor
tenants for the centre include Asda, BHS,
Primark and Wilkinsons.
Otford Retail Park,
Sevenoaks
The final lease renewal on this three unit retail park
has been concluded with Carpetright meaning
that all leases now have in excess of nine years
term certain. This is the only retail park in Sevenoaks
with an open A1 planning consent.
The Guineas,
Newmarket
We have had strong tenant demand at our
shopping centre in Newmarket and since the
year end is now fully let for the first time in at
least 10 years. The assignment of the Peacocks
unit to Poundland has improved footfall and five
other new lettings totalling £85,000 of rent have
been concluded in the year.
19
1 Corby Town Centre, Corby
2 The Morgan Quarter, Cardiff
3 The Guineas, Newmarket
4 Otford Retail Park, Sevenoaks
5 Clyde Shopping Centre, Clydebank
helical bar plc 2013
principal investment properties
central london
offices
Shepherds Building,
Shepherds Bush, W14
This 151,000 multi-let office building close
to Westfield Shopping Centre has enjoyed an
occupancy of at least 96% for the last 6 years.
There is currently just 2.6% vacant and rental
growth prospects are strong. Average rent in
the building is £24.25 psf with recent letting
evidence in the locality from £27.50 to £30.00.
ERV for the building stands at £4.2m compared
to a passing rent of £3.6m.
We are planning to undertake a major
refurbishment of the common parts of the
building during the course of the year with
a view to driving rental values forward.
20
principal investment properties
helical bar plc 2013
1
3
4
5
1/2 Shepherds Building
London W14
3 Barts Square
London EC1
2
4/5 Silverthorne Road, Battersea
London SW8
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21
helical bar plc 2013
principal investment properties
principal investment properties
22
207-211
Old Street,
London EC1
This 3.12 acre asset was acquired in
November 2012 for £60.8m in joint
venture with Crosstree Real Estate
Partners LLP (Helical interest 33.3%). The
site is in the heart of “Tech City”, an area
of London which is a hub for technology,
media and telecommunications
companies and is benefitting from
substantial investment in infrastructure.
Since acquisition plans have been
developed to substantially increase
the amount of space on site, refurbish
existing areas and significantly upgrade
the public realm. A planning application
has recently been submitted.
Whilst working on our refurbishment
plans we are managing our existing
tenant relationships on site to ensure
a rental income surplus.
principal investment properties
principal investment properties
helical bar plc 2013
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23
Barts Square, London EC1
www.bartssquare.com
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 Smithfield 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 November 2012, a resolution to
grant planning permission was obtained and planning consent has now been issued following
signing of the s.106 agreement. The scheme will bring much needed regeneration to this area of
the City and will seek to retain some of the existing buildings and complement them with a
sympathetic redevelopment of the site. It will comprise circa 230,000 sq ft of office space in two
buildings and 215 high quality residential apartments in 17 buildings with retail space at ground
floor level. Significant public realm improvements are planned, which will be incorporated into the
wider Smithfield Area Strategy being worked up by the City. We estimate a total development
value of circa £470m.
helical bar plc 2013
development programme
18%
poland
3%
other
15%
london offices
Helical’s
Helical’s
equity share
equity share
13%
offices
21%
mixed use
30%
retirement villages
In the year to 31 March 2013, profits
from the Group’s development
programme of £7.7m (2012: £5.2m)
were partially offset by provisions of
£0.7m (2012: £4.5m) made against the
carrying value of development stock,
leaving net development profits of
£7.0m, up from £0.7m in 2012.
Looking at the individual schemes,
profits of £6.1m were recognised in
respect of our share of the result at
Fulham Wharf, London SW6 and £1.4m
was generated at our retirement village
scheme at Bramshott Place, Liphook.
At 200 Aldersgate, London EC1, we
were able to recognise £1.0m of an
additional management fee in addition
to the development management fees
of £0.25m. However, the sales of land
at Stockport, Milton and Exeter and
units at Hailsham for total sale proceeds
of £19.6m, created a loss of £0.3m,
mainly arising from sale expenses.
In addition, we wrote off the overheads
of our retail development programme
in Poland and reduced the carrying
value of the completed development
at Wroclaw, pending renewal of leases
in 2013, with a resulting charge of
£1.7m from our Polish operations.
The focus of the Group over the last year has been on attaining the
milestones set by the Company a year ago.
Property
200 Aldersgate, London EC1
Milestone
Lettings
Progress during the year
200,595 sq ft of new lettings
Europa Centralna, Gliwice
Completion and lettings
Scheme completed and opened March 2013, 80% let
Fulham Wharf, London SW6
Sale/fee settlement
Sale completed, fee agreed
Barts Square, London EC1
Brickfields, White City W12
Planning consent
Planning consent
Consent granted
Resolution to grant consent obtained March 2013
Mitre Square, London EC3
Demolition
Start demolition in June 2013
Hammersmith Town Hall, W6
Planning consent
Revised scheme to be submitted July 2013
Helical Retail Projects
Conditional purchases
Ongoing
24
WOOD STREET
WALTHAMSTOW CENTRAL
WALTHAMSTOW QUEEN'S ROAD
LEYTON MIDLAND ROAD
LEYTON
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KILBURN HIGH ROAD
HARLESDEN
KENSAL RISE
QUEENS PARK (LONDON)
WILLESDEN JUNCTION
KENSAL GREEN
ISLINGTON
HIGHBURY & ISLINGTON
CANONBURY
DALSTON KINGSLAND
HACKNEY DOWNS
CALEDONIAN ROAD & BARNSBURY
DALSTON
helical bar plc 2013
ESSEX ROAD
HAGGERSTON
LONDON FIELDS
HOXOOO OXTOON
ONNNNTOO
HOXTON
LONDON EUSTON
OLD STREET
SHOREDITCH
HNHBETHTHBETHN
BETHNAL GREEN
ACTON MAIN LINE
LONDON PADDINGTON
central london
FARRINGDON
HOLBORN
CITY THAMESLINK
BLACKFRIARS
CHARING CROSS
CHACCHARRARACCHC
LIVERPOOL STREET
200 Aldersgate
MOORGATE
CCHH
L
CHAPELAPEELLAPH ELEHHAH
WHITECHAPEL
CITY OF LONDON
CANNON STREET
Mitre Square
FENCHURCH STREET
SHADWELL
SHH DW
SHADW
WAPPING
WAWWWWW
ACTON CENTRAL
SHEPHERD'S BUSH
SOUTH ACTON
KENSINGTON OLYMPIA
WATERLOO EAST
WATERLOO
LONDON BRIDGE
LONDON VICTORIA
ELEPHANT & CASTLE
EPH N & CA&& CACA
L HA
ELEPHAN
AAANAN
ANT &
EEEE
EELEL HHAPHAH
N
ASTLE
ASTLE
& CCA
LAMBETH
WEST BROMPTON
VAUXHALL (LONDON)
CHISWICK
IMPERIAL WHARF
QUEENSTOWN ROAD (BATTERSEA)
BATTERSEA PARK
BARNES BRIDGE
MORTLAKE
BARNES
WANDSWORTH ROAD
CLAPHAM HIGH STREET
PUTNEY
WANDSWORTH TOWN
CLAPHAM JUNCTION
WANDSWORTH COMMON
200 Aldersgate Street, London EC1
www.200aldersgate.com
BALHAM
EARLSFIELD
STREATHAM
Helical was appointed asset and development
manager by Deutsche Pfandbriefbank in May
2010. Our brief was to refurbish and let this
office building, vacant since 2005 when the
previous tenant, Clifford Chance, relocated to
Canary Wharf. We have refreshed and re-clad
parts of the building, creating a “vertical village”
for office users comprising a variety of floor-plates
to suit a range of different occupiers, as well as
exceptional tenant facilities, including a concierge
cycle store service, an on-site gym and a café
and business lounge. Refurbishment works
were completed and the building re-launched
in January 2011.The building now comprises
348,000 sq ft of offices, 16,673 sq ft of retail
and 39,601 sq ft of basement space. The
refurbishment works were completed within
budget in December 2010 and we have been
seeking tenants for the vacant space since
that date. By 31 March 2013 we had let
208,261 sq ft of office space, 9,000 sq ft of
retail and the whole of the basement space to
Virgin Active. Since then we have let 103,323
sq ft of space and have under offer a further
21,430 sq ft feet of offices and the remaining
7,673 sq ft of retail. This leaves just 14,714 sq ft
of office space to let. Rents of £40 to £45 psf
have been achieved on the larger floors
(20,000 sq ft to 40,000 sq ft) and £50 to £55 psf
on the smaller upper floors. Now the building is
over 80% let our right to receive a development
management profit share is triggered. We
anticipate receiving our profit share in 2013.
25
helical bar plc 2013
development programme
development programme
Mitre Square, London EC3
www.mitresquareec3.com
Mitre Square is a landmark City office scheme in the heart of the insurance sector in London.
We have signed agreements to purchase two adjoining sites from the City of London and
SFL2 Limited (previously Ansbacher) and will complete the purchase of 1 Mitre Square in
the Summer of 2013. The s.106 agreement, which enabled the planning permission to be
issued, was signed in 2011. We have commenced the demolition of the existing buildings to
facilitate the construction of a new building comprising offices of 273,000 sq ft NIA and
3,000 sq ft of retail/restaurant use. It is anticipated that construction will not commence until
a substantial pre-let is agreed or a forward funding is obtained and the finished development
will have a capital value of circa £250m.
26
WOOD STREET
WALTHAMSTOW CENTRAL
WALTHAMSTOW QUEEN'S ROAD
LEYTON MIDLAND ROAD
LEYTON
ISLINGTON
HIGHBURY & ISLINGTON
CANONBURY
DALSTON KINGSLAND
HACKNEY DOWNS
CALEDONIAN ROAD & BARNSBURY
ESSEX ROAD
HAGGERSTON
LONDON FIELDS
DALSTON
HOXTON
OLD STREET
SHOREDITCH
BETHNAL GREEN
FARRINGDON
LIVERPOOL STREET
MOORGATE
WHITECHAPEL
HOLBORN
CITY THAMESLINK
BLACKFRIARS
CITY OF LONDON
CANNON STREET
FENCHURCH STREET
CHARING CROSS
SHADWELL
WAPPING
WATERLOO EAST
WATERLOO
LONDON BRIDGE
HARLESDEN
KILBURN HIGH ROAD
KENSAL RISE
QUEENS PARK (LONDON)
WILLESDEN JUNCTION
KENSAL GREEN
helical bar plc 2013
LONDON EUSTON
development programme
ACTON MAIN LINE
LOO
LONDON PADDINGTON
White City
ACTON CENTRAL
SHEPHERD'S BUSH
SOUTH ACTON
KENSINGTON OLYMPIA
west london
Hammersmith
WEST BROMPTON
ELEPHANT & CASTLE
LAMBETH
VAUXHALL (LONDON)
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BATTERSEA PARK
BATTERTEATTBATTE
CHISWICKW CS CWWI KCK
CHISWICK
BARNES BRIDGE
BAA
MORTLAKE
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MORTLAKE
BARNES
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Fulham Wharf
QUEENSTOWN ROAD (BATTERSEA)
TOWN RWN RRO
QUEENSTOWN RO
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WANDSWORTH ROAD
CLAPHAM HIGH STREET
PUTNEY
WANDSWORTH TOWN
CLAPHAM JUNCTION
UNCTIONOONTCTIOOOO
JUJU JU
WANDSWORTH COMMON
EARLSFIELD
BALHAM
STREATHAM
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. Despite obtaining a resolution to grant planning consent in November
2011, its referral to the Mayor was withdrawn pending further discussions with the Greater
London Authority. We have revised our plans, following detailed consultation with interested
parties, and intend submitting a new planning application in the Summer of 2013.
27
helical bar plc 2013
development programme
Brickfields,
White City,
London W12
(www.brickfieldsw12.com)
In joint venture with Aviva, we have
obtained a resolution to grant planning
permission for a residential led mixed use
scheme on a 10 acre site immediately
adjacent to White City underground
station. The Eric Parry designed master
plan comprises c. 1.25 million sq ft of
residential, 210,000 sq ft of commercial
and 60,000 sq ft of retail, leisure and
community uses. In May 2013,
contracts were exchanged for the sale
of the site and completion is due in
August 2013.
28
development programme
helical bar plc 2013
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Fulham Wharf,
London SW6
At Sands End, Fulham Wharf, on behalf of landowner Sainsbury’s,
we secured planning permission for a new 100,000 sq ft food store,
together with 463 residential units (590,000 sq ft) and 11,000 sq ft
of restaurant, retail and community use. In June 2012, the site
was sold to a joint venture between housebuilder, Barratts, and
London & Quadrant housing association. Construction of the first
phase, consisting of the food store and 267 residential units has
commenced. Helical received a fee of £1.5m in 2011 for obtaining
planning permission for the scheme and has recognised a profit
share from the sale of the site and will receive the cash as phased
payments are made to Sainsbury’s. In accordance with the Group’s
income recognition policies and IFRS, the Group has recognised
this additional income in these accounts.
29
helical bar plc 2013
development programme
out of london offices
St Vincent Street,
Glasgow,
The Hub,
Pacific Quay, Glasgow
Helical, in partnership with local development
partner, Dawn Developments Ltd, has been
appointed development manager by Scottish
Power for the construction of their new headquarters
at St Vincent Street, Glasgow. The completed
building will comprise 220,000 sq ft of prime office
space in the heart of the city’s commercial district.
As part of the deal, Helical are taking on three
existing Scottish Power sites which are surplus to
their requirements. Planning permission has been
granted and a start on site is expected later this
year.
The Hub, Pacific Quay, Glasgow was completed
in 2009. This 60,000 sq ft building offers flexible
office space with an onsite cafe and events area.
Located in the midst of a media hotbed with BBC
Scotland and STV as neighbours, this scheme
has been partly let to The Digital Design Studio,
the commercial arm of Glasgow School of Art,
Shed Media and other high-tech, media-orientated
tenants. The tenant demand has been strong
this year and the building is now 81% let.
1
1 The Hub
Pacific Quay, Glasgow
2 St Vincent Street
Glasgow
2
30
development programme
retail
helical bar plc 2013
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We continue to work closely with the main
food retailers with a view to satisfying their
ongoing new store requirements. Whilst
there is no doubt the heat has come out of
the occupier market, their appetite for
stores in key locations, where a quality
proposal can be delivered, is likely to
continue going forward.
Parkgate, Shirley,
West Midlands
At Parkgate Shirley, where we have a 50%
interest, we continue to make good progress
with the construction of an 80,000 sq ft Asda
foodstore, and 78,000 sq ft of retail and leisure
accommodation, 50% of which is in solicitors’
hands. The scheme is due to open for trade
April in 2014. The private residential element of
the scheme is under offer to a major housebuilder
and the site for 51 Extracare units is being
purchased by a local Housing Association.
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.
31
1 Leisure Plaza
Milton keynes
2 Parkgate
Shirley
helical bar plc 2013
development programme
Europa Centralna, Gliwice
720,000 sq ft of
out-of-town retail space
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.
Europa Centralna,
Gliwice
This retail park and shopping centre was built in
50:50 joint venture with clients of Standard Life.
The scheme is situated to the south of Gliwice
at the intersection of the A4 and A1 motorways.
This highly visible scheme has unparalleled
accessibility and will be a major regional shopping
destination. It comprises approximately 66,000
sq m (720,000 sq ft) of retail space, incorporating
three distinct parts, being a foodstore, DIY and
household goods and fashion. The scheme is now
over 80% let to Tesco, Castorama, H & M, Media
Saturn, Sports Direct, Jula and others. Construction
completed in February 2013 and the scheme
opened on 1 March 2013. The sale of 50% in
2011 includes a provision that we will sell the
remaining ownership stake two years after the
date of completion of the development to the
same clients of Standard Life.
Evesham
A seven acre site has been secured in the Four
Pools retail area in Evesham and a planning
application is being worked up for a foodstore and
discussions are in hand with potential operators.
Truro
In Truro, we have entered into a Conditional
Purchase Agreement on the six acre Truro City
Football Club site and a scheme is being put
together to satisfy the requirement of a major
foodstore operator. A planning application is
likely to be submitted in the Autumn of this year.
Proposals for a non-food 60,000 sq ft retail park
on an adjoining site are also in hand.
Nottingham
We were delighted to be selected by
Nottinghamshire County Council to be their
development partner on an eight acre site at
Hucknall, Nottingham where we will be progressing
a foodstore scheme, which will act as a catalyst
for major residential and employment developments
to be promoted by the Council in due course.
A planning application will be submitted once
we have secured an operator for the foodstore
later in the year.
Ross-on-Wye
At Ross-on-Wye we are seeking the change of
use of a former DIY unit to enable a letting to a
foodstore operator. The 30,000 sq ft building will
be retained and converted following
refurbishment.
Kingswinford
We are working with landowner, Ibstock, to
develop a 16 acre site in Kingswinford for a
foodstore and 100 residential units which would
be built out by a housebuilder following planning
consent. A planning application is due to be
submitted later in the year.
Leicester
In Leicester terms have been agreed with corporate
landowners to progress a foodstore development
for a 70,000 sq ft store and petrol filling station.
Birmingham
In Birmingham we are reconfiguring the
foodstore and non-food scheme in Tyseley to
reflect changing retail operator requirements and
in Stechford we are working up another
foodstore site and we hope to be submitting a
planning application in the Autumn.
32
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33
helical bar plc 2013
development programme
development programme
retirement villages
A retirement village is a private residential
community in which active over-55s are able
to live independently in retirement. Residents
have typically down-sized from a larger family
home into a cottage or apartment which
provides no maintenance or security issues.
With access to a central clubhouse containing
a bar and restaurant facilities, health and
fitness rooms and surrounded by maintained
grounds, this retirement option is proving
increasingly popular.
Bramshott Place,
Liphook, Hampshire
The original Bramshott Place Village was an
Elizabethan mansion built in 1580, 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.
Construction of the final phase of 55 units completed
in late 2012. To date, we have sold 115 units
(£44.25m of proceeds) with reservations on
a further 14 units, with just 22 units, mainly
apartments, left to sell.
34
Durrants Village,
Faygate, Horsham, West Sussex
Millbrook Village,
Exeter
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.
Following changes to the scheme the development
will be for 171 units. The first phase (43 units)
started in May 2012 for the construction of a
retirement village and clubhouse and we have
exchanged on one sale and have reservations
on 16 units with up-field reservations on a
further 13 units in future phases.
Maudslay Park,
Great Alne, Warwickshire
This is a Green Belt site which has 320,000 sq ft
of built footprint and benefits 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 have completed with
construction to follow in autumn 2013.
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 sold 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 summer 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 sold the whole site in summer 2012.
financial review
Helical’s business model
Helical aims to deliver market leading returns by acquiring high yielding
investment properties, applying a rigorous approach to asset management
and deploying limited equity into development situations which have the
potential to be highly profitable. We have set a target balance between
the income producing portfolio and non-income producing development
stock of 75:25, and have an active asset management programme for
the investment portfolio with a clear strategy of increasing net operating
income. Risks associated with our development programme are mitigated
through limited equity exposure, options, forward funding, conditional
contracts and joint ventures with major UK and global institutions. Our
aim is to have a stable platform with all recurring operational and finance
costs and dividends fully covered by revenue streams from our investment
portfolio, as supplemented by short term rental income from the development
programme. Gearing is used on a tactical basis, being raised to accentuate
property performance when property returns are judged to materially
outperform the cost of debt.
Joint ventures
Increasingly, we are entering into joint ventures with partners who provide
the majority of the equity for an acquisition, in return for accessing Helical’s
asset management or development expertise, thereby reducing Helical’s
financial risk but allowing exceptional returns to be made. We are bound
by accounting convention to account for our share of the net results and
net assets of joint ventures in limited detail in the income statement and
balance sheet, as supplemented in the notes to the financial statements.
In this review we have incorporated the separate components into a more
detailed “See-through” analysis of our property portfolio and debt profile
and the associated income streams and financing costs, to assist in
providing a more comprehensive overview of the Group’s activities.
European Public Real Estate Association (“EPRA”)
The European Public Real Estate Association is a body which aims, through
its best practice recommendations, to make the financial statements of public
real estate companies clearer, more transparent and comparable across
Europe. Earnings reported in the income statement as required under IFRS
do not provide stakeholders with the most relevant information on the operating
performance of the underlying property portfolio of real estate companies.
A key measure of a company’s operational performance and the extent to
which its dividend payments to shareholders are underpinned by earnings is
the level of recurring income arising from core operational activities. Unrealised
changes in valuation, gains or losses on disposals of properties and certain
other items do not necessarily provide an accurate picture of the company’s
underlying operational performance and are, therefore, excluded from this
measure.
Net asset value is a key performance measure used in the real estate industry.
However, net asset value as reported in the financial statements under IFRS
does not provide stakeholders with the most relevant information on the fair
value of the assets and liabilities within an ongoing real estate investment
company with a long term investment strategy. The objective of the EPRA
NAV measure is to highlight the fair value of net assets on an ongoing,
long-term basis. Assets and liabilities that are not expected to crystallise in
normal circumstances such as the fair value of financial derivatives and deferred
taxes on property valuation surpluses are therefore excluded. Similarly
trading properties and development are adjusted to their fair value under
EPRA’s measure.
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helical bar plc 2013
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4
.
3
9
8
6
,
9
9
8
6
5
,
8
8
2
2012
2010
£000’s
140,000
p
4
.
2
2
5
2
,
0
0
3
120,000
100,000
80,000
2013
2009
60,000
0
0
4
,
7
4
40,000
20,000
60,000
-8
0
2009
2013
2010
2012
40,000
EPRA net assets
2
2
7
,
0
4
2
5
9
,
3
1
7
4
2
,
1
1
Diluted EPRA net asset value per share
20,000
p
0
2
7
320
0
2009
2010
2011
2012
2013
0
300
Gross bank debt – wholly owned
Total gross bank debt
Gross bank debt – in joint ventures
280
p
6
8
2
3
3
7
,
3
1
3
2009
4
4
8
,
2
2013
2009
p
6
8
2
p
0
.
9
2009
260
£’000
£000
240
10,000
318,000
220
8,000
310,000
200
6,000
302,000
4,000
294,000
£000’s
2,000
286,000
30,000
0
0
25,000
20,000
-2,000
15,000
-4,000
p
10,000
-6,000
320
5,000
300
-8,000
0
280
240
p
220
10
8
200
6
4
2
0
-4
-6
-8
£000’s
30,000
-2
25,000
20,000
15,000
10,000
5,000
£000
318,000
310,000
302,000
294,000
286,000
p
320
300
280
260
240
220
200
£000’s
30,000
25,000
20,000
15,000
10,000
5,000
p
2
7
2
p
3
5
2
p
0
5
2
p
4
6
2
8
0
7
,
8
2010
2011
2012
2013
2
5
2
0
0
3
,
8
2009
8
6
,
4
2
35
6
5
3
,
5
9
2
7
7
7
,
7
1
)
9
0
0
,
7
(
p
3
5
2
)
p
4
.
6
(
8
8
0
9
0
3
,
4
,
4
9
2
3
6
8
,
4
1
p
9
.
2
3
6
8
,
4
1
0
2
1
8
,
6
3
5
8
8
2
,
6
3
9
,
2
2
p
0
5
2
p
4
.
3
6
3
9
,
2
2
8
6
5
,
8
8
2
p
4
6
2
p
4
.
2
8
8
6
,
4
2
2
5
2
,
0
0
3
p
4
6
2
2013
2012
2011
2010
EPRA net assets
2012
2010
2011
2011
2010
2012
2009
2013
EPRA earnings/(loss)
Net rental income
260
p
2
7
2
2010
2011
2012
2013
2009
2010
2012
2013
2011
7
7
7
,
7
1
0
2009
2010
2011
2012
2013
Net rental income
3
3
7
,
3
1
3
8
9
3
,
4
9
2
6
5
3
,
5
9
2
0
2013
2012
2011
2010
2009
EPRA net assets
p
6
8
2
p
2
7
2
p
3
5
2
p
0
5
2
2009
2010
2011
2012
2013
8
8
6
,
4
2
6
3
9
,
2
2
7
7
7
,
7
1
3
6
8
,
4
1
0
2009
2010
2011
2012
2013
Net rental income
helical bar plc 2013
financial review
EPRA Earnings
Adjusted EPRA Earnings per share, before performance related awards, increased by 116% to 8.2p per share (2012: 3.8p), reflecting increased
development profits of £7.0m (2012: £0.7m) and the Group’s share of net rental income of £24.5m (2012: £22.9m). After taking into account
performance related bonuses and share awards of £6.8m (2012: £0.4m), EPRA Earnings per share reduced to 2.4p (2012: 3.4p).
EPRA Earnings
Earnings as per note 14
Add: performance related awards
Add: adjustments as per note 14
Adjusted EPRA Earnings
Less: Performance related awards
EPRA Earnings
Adjusted diluted EPRA Earnings per share
Diluted EPRA Earnings per share
31.3.13
£000
31.3.12
£000
5,867
6,828
(3,023)
9,672
(6,828)
2,844
8.2p
2.4p
7,575
415
(3,567)
4,423
(415)
4,008
3.8p
3.4p
EPRA net asset value
Diluted EPRA net asset value per share increased by 5.6% to 264.0p per share (2012: 250.0p). This rise was principally due to an increase in the value
of the property portfolio, including the surplus on valuation of the trading and development stock of £49.9m (2012: £34.5m) including our share of the
surplus in the joint ventures.
EPRA net asset value
Diluted net asset value
EPRA Adjustments for:
Fair value of trading and development stock, including in joint ventures
Fair value of financial instruments
Deferred tax
Diluted EPRA net asset value
31.3.13
£000
31.3.13
p per share
31.3.12
£000
31.3.12
p per share
257,242
217
255,312
217
49,865
6,048
578
34,542
3,494
1,050
313,733
264
294,398
250
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See-through net rental income and property overheads
Helical’s share of the gross rental income, head rents payable and property overheads from property assets held in subsidiaries and in joint ventures are
shown in the table below.
Gross rental income
Total gross rental income
Rents payable
– subsidiaries
– joint ventures
– subsidiaries
– joint ventures
2009
£000
20,781
197
20,978
(12)
(1)
2010
£000
18,881
1,106
19,987
(12)
(406)
Property overheads
– subsidiaries
(2,394)
(3,732)
Net rental income attributable to profit share partner
– joint ventures
–
(693)
–
(986)
2011
£000
18,590
5,531
24,121
(24)
(1,000)
(3,662)
(941)
(717)
2012
£000
23,058
6,645
29,703
(418)
(848)
2013
£000
25,816
6,193
32,009
(342)
(802)
(3,938)
(5,186)
(737)
(826)
(510)
(710)
See-through net rental income
17,878
14,851
17,777
22,936
24,459
See-through net finance costs
Helical’s share of the interest payable, finance charges, capitalised interest and interest receivable on bank borrowings and cash deposits in
subsidiaries and in joint ventures are shown in the table below.
2009
£000
Interest payable on bank loans and overdrafts
– subsidiaries
15,890
Total interest payable on bank loans and overdrafts
Other interest payable and similar charges
– subsidiaries
– joint ventures
Interest capitalised
Total finance costs
Interest receivable and similar income
See-through net finance costs
– joint ventures
– subsidiaries
– joint ventures
16
15,906
268
(6,855)
9,319
(2,082)
(252)
6,985
2010
£000
10,956
492
11,448
1,568
(3,196)
9,820
(1,039)
(2)
8,779
2011
£000
9,690
1,704
11,394
1,481
(4,179)
8,696
(652)
(11)
2012
£000
10,808
2,223
13,031
901
(3,300)
10,632
(583)
(12)
2013
£000
10,445
2,269
12,714
1,658
(2,526)
11,846
(887)
(66)
8,033
10,037
10,893
See-through property portfolio
Helical’s share of the investment, trading and property portfolio in subsidiaries and joint ventures are shown in the table below.
2009
£000
2010
£000
2011
£000
2012
£000
2013
£000
Investment property
– subsidiaries
241,287
219,901
271,876
326,876
312,026
– joint ventures
–
Total investment property
Trading and development stock
– subsidiaries
– joint ventures
Trading and development stock surplus
– subsidiaries
241,287
210,415
13,761
45,456
Total trading and development stock
See-through property portfolio
– joint ventures
–
269,632
510,919
45,300
265,201
182,576
14,346
32,991
–
229,913
495,114
65,870
337,746
147,542
14,434
32,436
–
194,412
532,158
67,187
94,962
394,063
406,988
99,741
44,324*
33,107
1,435
178,607
572,670
92,874
76,698*
48,837
1,028
219,437
626,425
* Trading and development stock of joint ventures includes the Group’s share of development stock of Helical Sosnica Sp zoo (see note 19).
37
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financial review
See-through net borrowings
Helical’s share of borrowings and cash deposits in subsidairies and joint ventures are shown in the table below.
2009
£000
In parent and subsidiaries
– gross borrowings less than one year
48,155
– gross borrowings more than one year 249,297
Total
297,452
In joint ventures
– gross borrowings less than one year
4,352
– gross borrowings more than one year
1,292
Total
5,644
2010
£000
72,459
170,229
242,688
1,852
27,900
29,752
2011
£000
37,500
199,917
237,417
3,100
36,936
40,036
2012
£000
59,203
203,992
263,195
1,500
54,342*
55,842
2013
£000
39,295
220,446
259,741
720
72,509*
73,229
In parent and subsidiaries
Cash and cash equivalents
(72,776)
(39,800)
(31,327)
(35,411)
(36,863)
In joint ventures
Cash and cash equivalents
(2,094)
(3,958)
(4,138)
(3,627)
(9,793)
See-through net borrowings
228,226
228,682
242,078
279,999
286,314
* Gross borrowings in joint ventures include the Group’s share of borrowings of Helical Sosnica Sp. zoo. (see note 19).
Income Statement
The main focus of the year was on targeting and working towards the many development milestones that were set in early 2012. Whilst these had little
effect on the income statement for the year under review, they are expected to have a significant impact on the profitability of the Group in future years.
Apart from these milestones, we continued to dispose of investment properties which had reached their short to medium term potential as well as
selling those development sites that were surplus to our development plans. We added to our investment portfolio through a major acquisition with a
new joint venture partner and continued towards the Group’s stated target balance between the income producing property portfolio and non-income
producing development stock of 75:25.
Rental income and property overheads
Gross rental income receivable by the group in respect of wholly owned properties increased by 11.7% to £25.8m (2012: £23.1m), mainly reflecting the
additions made towards the end of the previous financial year. The Group’s share of gross rents receivable in joint ventures fell 6.0% to £6.2m
(2012: £6.6m). The see-through gross rents totalled £32.0m, an increase of 7.8% on 2012. After taking account of head rents payable on those
properties held on long leases, and the costs of managing the assets, void costs and the amortisation of annual letting costs, see-through net rents
increased by 7.0% to £24.5m (2012: £22.9m). Bad debts from tenant administrations and failures remained low at 2.4% of gross rents (2012: 2.0%).
38
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Development programme
Looking at the development programme, our success at Fulham Wharf, London SW6, enabled the Company to recognise further profits of £6.1m
arising out of the development management agreement with Sainsbury’s. At 200 Aldersgate Street, London EC1, the success in letting space enables
us to recognise £1.0m of an additional management fee receivable due when the property is sold, when we expect further substantial profits to be
recognised based on our post year end performance. In addition, we completed the sale of the remaining units at our industrial development at
Stockport and sold two of the remaining industrial units at Ropemaker Park, Hailsham, at their book value of £5m. The retirement village development
programme was financed with sales of our undeveloped retirement village site at Milton, Cambridge, part of the site at Millbrook Village, Exeter and
continued sales of units at Bramshott Place, Liphook, generating over £24m of net sale proceeds during the year. These sales, together with
development finance agreed with our banks, provide the funding for the completion of works at Bramshott Place, the commencement of construction
at Durrants Village, Faygate, as well as financing enabling works at Great Alne and Exeter. Profits of £1.4m were generated from the sales at Bramshott
Place.
Offsetting these profits we made a £0.8m provision against the carrying value of our fully let retail development at Wroclaw, Poland and have expensed
the running costs of our Warsaw office, charging £1.7m in total from our Polish operations. Other provisions against stock totalled £0.7m (2012:
£4.5m).
Share of results of joint ventures
As mentioned above, Helical has increasingly sought to acquire larger assets in joint venture with funds that provide the majority of the equity required
to purchase the assets, whilst relying on the Group to provide the asset management or development expertise. These joint ventures include our share
of the investment properties at Clyde Shopping Centre, Clydebank; Barts Square, London EC1 and 207-211 Old Street, London EC1, and our development
schemes at Europa Centralna, Gliwice, Poland; Shirley Town Centre, West Midlands; Leisure Plaza, Milton Keynes and King Street, Hammersmith.
Detailed analysis of the financial position of our share of these joint ventures is provided in note 19 to these accounts and the see-through analysis on
pages 37 and 38. In the year under review, net rents of £4.9m (2012: £5.1m) were received, offset by net finance costs of £2.2m (2012: £2.2m). A gain
on revaluation of the investment portfolio of £3.1m (2012: £0.6m), primarily arose in respect of Barts Square. Net of taxes, our joint ventures
contributed £3.9m (2012: £2.5m).
Administration costs
Administration costs, before performance related awards, increased by 9%, from £7.4m to £8.1m, mainly arising from an average salary rise of 5%
for UK employees of the group.
Performance related share awards and bonus payments increased to £6.8m (2012: £0.4m) for the year. Of this amount, the £1.9m (2012: £0.03m)
charge for share awards under the Performance Share Plan is expensed through the Income Statement but added back to shareholders funds through
the Statement of Changes in Equity. The £4.1m accrual for bonus payments comprises £2.7m which will be paid in June 2013, £0.8m which will be
carried forward to next year in accordance with the terms of the Annual Bonus Scheme 2012 and £0.6m which will be paid in deferred shares to be
held for a minimum of three years. In addition, National Insurance of £0.6m has been accrued for.
Administration costs
Share awards plus associated NIC
Directors and senior executives bonuses plus associated NIC
Total
2009
£000
7,410
342
338
8,090
2010
£000
7,202
1,478
–
8,680
2011
£000
7,312
(262)
–
7,050
2012
£000
7,385
39
376
2013
£000
8,092
2,122
4,706
7,800
14,920
Finance costs, finance income and derivative financial instruments
Interest payable on bank loans including our share of loans on assets held in joint ventures but before capitalised interest, fell marginally to £12.7m
(2012: £13.0m). Capitalised interest reduced from £3.3m to £2.5m reflecting the lower level of development stock held during the year. Other interest
payable increased from £0.9m to £1.7m. As a consequence of these movements, total finance costs increased by £1.2m from £10.6m to £11.8m.
Finance income earned on cash deposits increased to £0.9m (2012:£0.6m).
Derivative financial instruments have been valued on a mark to market basis and a charge of £2.6m (2012: £0.3m) 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 profits in the foreseeable future.
Investment portfolio
Sales of over £23m of investment assets, where our asset management initiatives were completed, provided funds, net of loan repayments, for the
acquisition of our office refurbishment scheme in Old Street, London EC1, in joint venture with Crosstree, and for £5.1m of value enhancing capital
expenditure on our investment portfolio. The sales of these investment assets generated a loss of £2.4m of which £0.6m represented transaction costs
and £1.0m was in respect of our industrial estate at East Kilbride, which had suffered a number of tenant losses. The remaining assets were sold at
c.98% of book value.
Helical acquired no new wholly owned investment properties during the year. The capital expenditure of £5.1m added to the revaluation surplus of
£3.7m was more than offset by the book value of properties sold of £23.9m, thereby reducing the value of the wholly owned investment properties
from £326.9m to £312.0m. In joint venture we purchased 207-211 Old Street, London EC1 and this purchase, together with our share of a valuation
uplift on the investment properties held in joint venture of £3.1m, took the Group’s share of the total investment portfolio, on a see-through basis, from
£394.1m to £407.0m.
39
helical bar plc 2013
financial review
Borrowings and financial risk
The Group is well positioned to face the future with a sound financial base, having increased its income stream by replacing low growth assets with
higher yielding retail properties, refinanced 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
that enable it to deal with the current economic uncertainties and to continue to rebalance its portfolio through the acquisition of new income producing
investment properties.
Debt profile at 31 March 2013 - excluding the effect of arrangement fees
Total
Facility
£000’s
Total
Utilised
£000’s
Investment facilities
218,526
202,110
Development and site holding facilities
Short term working capital facilities
66,620
10,972
51,092
9,132
296,118
262,434
Joint venture bank facilities
83,504
73,321
Total see-through debt
379,622
335,755
2014
£000’s
7,782
23,120
9,132
40,034
720
40,754
2015
£000’s
2,244
9,306
–
11,550
13,953
25,503
2016
£000’s
59,101
4,660
–
63,761
58,648
2017
£000’s
85,683
14,006
–
2018
£000’s
47,400
–
–
99,689
47,400
–
–
122,409
99,689
47,400
The Group arranges its bank borrowings to suit its investment and development intentions as follows:
Investment facilities
These are typically for four to five years, financing the Group’s investment portfolio and a fully let retail development at Wroclaw in Poland with loan to
value and income covenants. The value of the Group’s properties secured on these facilities at 31 March 2013 was £319,035,000 (2012:
£330,251,000) with a corresponding loan to value of 63% (2012: 64%). Of the £7.8m due for repayment in the year to 31 March 2014, £6.2m has
been refinanced and is now due for repayment in the year to 31 March 2017. The remaining amounts due in the two years to 31 March 2015 represent
amortisation of loans during that period. The average maturity of the Group’s investment facilities at 31 March 2013 was 3.6 years, extended to 4.1
years since that date. Since the year end £49.0m of debt, in three facilities maturing in the period to 31 March 2016, have been replaced by a £75m
revolving credit facility, £49.3 drawn, repayable in the period to 31 March 2018.
Development and site holding facilities
These facilities finance the construction of the retirement villages at Bramshott Place, Liphook and Durrants Village, Horsham and the office
development at The Hub, Glasgow. They also include site holding facilities at Exeter and Telford and fund the holding of the completed developments
at Hedge End, Southampton and Ropemaker Park, Hailsham. Of the £23.1m due for repayment in the year to 31 March 2014, £6.0m has been
refinanced into a five year facility and £10.1m is due for repayment in December 2013 and we shall look to enter into discussions with the relevant bank
in the near future. We anticipate refinancing the remaining £7.0m in the near future. The average maturity of the Group’s development and site holding
facilities at 31 March 2013 was 1.9 years.
Short term working capital facilities
These facilities provide working capital for the Group and c. £3.0m has been repaid since the year end.
Joint venture bank facilities
As noted above we hold a number of investment and development properties in joint venture with third parties and include in the above table our share,
in proportion to our economic interest, of the debt associated with each asset. Of the amount due to be repaid in the year to 31 March 2015, £11.7m
is in respect of the investment holding facility for Barts Square, and timed for a potential redevelopment of the site. In the year to 31 March 2016, there
are three facilities due to be repaid. In April 2015, our investment facility on the Clyde Shopping Centre, Clydebank, is repayable. In December 2015 we
are due to repay the loan on 207-211 Old Street, London EC1, this repayment being timed to fit into plans for the refurbishment of the properties
acquired in December 2012. The remaining debt repayable in this year relates to the development of the shopping centre and retail park at Europa
Centralna, Gliwice. This development has been partly financed with a development facility due to convert into an investment facility, on satisfaction of a
number of conditions precedent, by December 2013. At the option of the joint venture, the investment facility will be repayable within either three or five
years. For the purposes of this debt maturity analysis we have assumed that all conditions precedent will be met and a term of three years is agreed
with the bank. The average maturity of the Group’s share of bank facilities in joint ventures at 31 March 2013 was 2.4 years.
Cash and cash flow
At 31 March 2013,the Group had over £80m (2012: £65m) of cash and agreed, undrawn, committed bank facilities including its share in joint ventures
as well as £27m (2012: £16m) of uncharged property on which it could borrow funds.
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Net borrowings and gearing
Net borrowings held by the Group have reduced during the year from £227.8m to £222.9m. Including the Group’s share of net debt of its joint ventures
the Group’s share of total net debt has increased from £280.0m to £286.3m.
Net borrowings and gearing
Net borrowings – Group
Net borrowings – Including joint ventures
Net assets
Gearing – Group
Gearing – Including joint ventures
2012
2013
£227.8m
£222.9m
£280.0m
£286.3m
£253.7m
£253.8m
90%
110%
88%
113%
Hedging
At 31 March 2013 the Group had £135.6m (2012: £120.3m) of fixed rate debt with an average effective interest rate of 4.34% (2012: 4.80%), and
£124.1m (2012: £142.9m) of floating rate debt with an average effective interest rate of 3.31% (2012: 3.47%). In addition, the Group had £82m of
interest rate caps at an average of 4.00% (2012: £125m at 4.70%). In the joint ventures, the Group’s share of fixed rate debt was £27.5m (2012:
£18.0m) with an average effective interest rate of 5.12% (2012: 5.20%), and £45.8m (2012: £37.8m) of floating rate debt with an effective rate of
3.76% (2012: £3.54%). In addition, the joint ventures benefitted from £51.5m (2012: £49.0m) of interest rate caps at an average of 5.00% (2012:
5.00%).
Interest cover
In assessing the results of the Group for each financial year, Helical considers its interest cover as a measure of its performance and its ability to finance
its annual interest payments from its net operating income, before revaluation gains or losses on the investment portfolio and net realisable provisions
on the trading and development stock. In the year to 31 March 2013, this interest cover was 2.7 times (2012: 2.8 times).
2009
£000’s
17,878
(514)
15,040
1,335
33,739
2009
£000’s
6,985
4.8x
2010
£000’s
14,851
(10)
8,748
(4,909)
2011
£000’s
17,777
(367)
(1,729)
4,842
2012
£000’s
22,936
–
5,166
(376)
18,680
20,523
27,726
2010
£000’s
8,779
2.1x
2011
£000’s
8,033
2.6x
2012
£000’s
10,037
2.8x
2013
£000’s
24,459
(1)
7,616
(2,388)
29,686
2013
£000’s
10,893
2.7x
See through net rental income
Trading profits/(losses)
Development profits before provisions
Gain/(loss) on sale of investment properties
Net operating income
See-through net finance costs
Interest cover
Tim Murphy
Finance Director
23 May 2013
41
helical bar plc 2013
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 ventures and outsourcing partners, our direct impacts
as a business are relatively small. However, we are aware of the influence
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 environmental and
social impact 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 shows 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 our website, is embedded within the
operations of Helical. Key elements of the system include:
• ‘Environment’ and ‘Corporate Responsibility’ policies which set out
Helical’s high-level commitment across a number of impact 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 office,
and measured our performance against quantitative targets set in
2012/3. 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. It should be
acknowledged that our particular business model with regard to the
buying and selling of assets means that absolute performance
measures can be difficult to compare year on year, hence this year we
also report 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. Introduced last year was a Contractor’s Checklist
that is issued to individual contractors in order to address our
corporate goals at the construction stage.
• Effective use of internal audit and review through quarterly meetings of
key Helical personnel, their external corporate responsibility advisors
and principal managing agents to ensure effective delivery of the
objectives and targets.
The management system we have developed has been designed specifically
to reflect the flexibility of Helical’s business model. It also reflects the key
role that our partners play in delivering enhanced sustainability outcomes
in all our business ventures, be they developments/refurbishments of which
there have only been small scale refurbishments during 2012/3, or in the
management of individual multi-let assets such as at Shepherds Building
or Battersea Studios.
Review of progress in the year to 31 March 2013
We manage our environmental and social impacts because there are
business benefits in doing so. These benefits 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 commitments to environmental issues are outlined
in the Group’s Environmental Policy which can be found on our website.
The Policy details our commitments across a range of impact areas and our
development and property management activities. In 2012-13, we set
ourselves 24 targets to guide the Environmental element of our Corporate
Responsibility programme over the following 12 months. These targets
address a range of impacts arising from our development and property
management activities, including resource use and waste production,
pollution, biodiversity, timber sourcing, tenant engagement, flood risk and
sustainable design and construction. A full list of these targets can be
found on our website. The performance against the key targets is
summarised below.
• At our Head office at Farm Street, we aimed to maintain our current
performance given the significant improvement achieved in previous
years. Usage of water and electricity were consistent with last year’s
low level of consumption but there was a 40% increase in gas use
reflecting the need for more heating due to the inclement weather
over the past year.
• At our managed multi-let offices, we continue to improve energy and
water efficiency through the implementation of low and no cost measures.
The specific target for 2012 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 reflects increasing
occupancy and changes to the portfolio structure. An additional performance
measure of average utilisation of kWh/ sq m for electricity and gas is
provided for the portfolio and shows a general trend of a year on year
increase reflecting again the increased occupancy and activity. An
equivalent assessment is made of average water consumption which
shows a consistent usage at between 0.5 and 0.67 m3 per square meter.
• At our managed shopping centres, comparative figures where available
indicate a similar story that the performance is allied to overall occupancy.
Although, it is pleasing to note that the replacement of all fluorescent
light bulbs with light emitting diodes (LED) resulted in a 22% reduction
in energy consumption year on year at Idlewells Shopping Centre.
• We continue to offer recycling facilities at all our managed assets. The
success of our approach has been particularly demonstrated at Farm
Street, the Shepherds Building, and Corby Town Centre Shopping
Centre where 100% of waste is diverted from landfill. In addition,
Ashdown Philips, the managing agents at Corby Town Centre were
awarded a Gold Star in November 2012 at the National Recycling
Awards. At other of our managed assets we comfortably exceeded our
ongoing target of a recycling rate of at least 35%.
42
corporate responsibility
helical bar plc 2013
• One ongoing target is to proactively engage with our tenants to encourage
improvements in efficient 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. It is
regularly reviewed to reflect changing performance data. Following this,
individual property managers have engaged with tenants to try and see
if there are ways in which efficiency initiatives can be introduced and to
particularly encourage increased recycling within the portfolio. An example
is Idlewells Shopping Centre where retailers were briefed on a new
waste system by the waste contractor and advised on which skip
could be used for which waste stream. Leaflets and signage were
issued to all retailers and staff to guide correct disposal. Ongoing
training and support has been offered by the waste management
company and centre management team for retailers who have
complex waste such as charity shops.
• The success of a holistic approach to environmental management was
again demonstrated by Clydebank Shopping Centre which followed its
Green Apple Gold Award in the retail category for Scotland with a
Bronze Award for retail in the UK wide Green Apple Awards for the
d
i
r
e
c
t
o
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s
’
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p
o
r
t
-
a
n
n
u
a
l
r
e
v
i
e
w
ongoing ‘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, significant reductions
were achieved in both electricity consumption and waste disposed to
landfill. A particularly pertinent initiative this year is the keeping of bees
at the Centre to highlight to customers the importance of bees and the
threat to their ongoing wellbeing through Colony Collapse Disorder.
• There was limited activity throughout 2012-13 with regard to construction
projects. Key corporate objectives including maximising waste recycling
and addressing ecological considerations were achieved.
In addition, the Group has maintained our registration with CRC (Carbon
Reduction Commitment) and has purchased 5,198 carbon allowances
for the year 2012-13 based on the reported emissions for the portfolio as
a whole. We have also reported for the first time to the Carbon Disclosure
Project.
Below we present our utility consumption performance for multi-let buildings under management as well as our head office (where data availability permits).
Head office and multi-let offices
Electricity
2010-11
kWh
Electricity
2011-12
kWh
Electricity
2012-13
kWh
Gas
2010-11
kWh
Gas
2011-12
kWh
Gas
2012-13
kWh
Water
2010-11
m3
Water
2011-12
m3
Water
2012-13
m3
134,531
125,101
120,242
45,904
35,753
53,633
2,479
538
546
2,250,701
2,541,723
3,323,528
1,255,766
1,600,956
1,744,971
5,017
4,906
7,474
992,777
–
–
525,614
–
–
4,506
–
–
3,397,545
3,380,916
3,403,393
No gas
No gas
No gas
8,494
6,724
8,373
11-15 Farm Street,
London W1
82 Silverthorne Road,
London SW8
61 Southwark Street,
London SE1
Shepherds Building,
London W14
The Hub
328,436
374,277
610,070
392,587
513,019
740,212
n/a
n/a
n/a
Net lettable area sq m
35,767
29,542
29,542
21,739
15,514
15,514
30,193
23,968
23,968
Average utilisation
kWh / sq m or m3/sq m
Shopping centres
199
205
252
102
139
164
0.68
0.51
0.68
Electricity
2011-12
kWh
Electricity
2012-13
kWh
Gas
2011-12
kWh
Gas
2012-13
kWh
Water
2011-12
m3
Water
2012-13
m3
The Guineas Shopping Centre, Newmarket
56,231
68,695
356,845
387,451
Idlewells Shopping Centre, Sutton in Ashfield
397,985
309,597
70,576
44,266
Corby Town Centre, Corby
The Morgan Quarter, Cardiff
Net lettable area sq m
Average utilisation
kWh / sq m or m3/sq m
n/a
n/a
1,127,247
352,817
n/a
n/a
24,296
107,713
24,296
18.7
17.26
14.8
934,845
No gas
82,720
16.5
168
1,377
n/a
n/a
176
921
806
123
24,296
107,713
0.06
0.02
Notes:
• ‘No gas’ refers to assets where gas is not used on site
• ‘-’ refers to asset that are no longer in ownership
• n/a refers to data not available at time of reporting e.g. inaccessible water meters
Going forward for 2013-14, the suitability of the targets will be reviewed against the performance for 2012-13 and revised accordingly to remain
challenging yet achievable.
43
During the year to 31 March 2013 Helical donated £13,055 to charities
including: LandAid Charitable Trust, The Story of Christmas Appeal,
Oxford Childrens Hospital, The Cure and Action for Tay-Sachs
Foundation, East Anglian Air Ambulance and Great Ormond Street
Hospital Children’s Charity.
In addition, on Land Aid day, a Helical team raised £7,500 by dressing up
as Alice in Wonderland characters and visiting other companies’ offices in
the locality.
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 our employees or
others that may be affected by our 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 reflect the latest legislative and regulatory
developments. There have been no reportable RIDDOR incidents within
the portfolio during 2012 -13. Our Health & Safety policy can be found
on our 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 flow. The Group’s policy is to
settle all agreed liabilities within the terms established with suppliers.
helical bar plc 2013
corporate responsibility
Employees
As at 31 March 2013, we employed a team of 24 people in our head
office, 38% 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. No
incidents were reported against these policies in the year under review.
High levels of staff retention remain a key feature of our business. We retain
a highly skilled and experienced team and the table below shows a breakdown
of our staff by length of service.
Directors and management
Finance
Administration
Total number
of staff
Average length of
service (years)
11
6
7
12
12
5
Our staff retention levels not only reflect competitive remuneration and benefits
packages but also our commitment to enhancing the professional and
personal skills of our team. During 2012/3 we provided an average of
13.15 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.
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 benefited the communities
that we work with over the past year.
• We have made a number of in-kind contributions through our Clyde
Shopping Centre including supporting a project to donate electronic
equipment through a competition for 20 local schools and sponsorship
of the local youth football tournament. In the context of working with
and protecting children Clyde Shopping Centre is the first centre in the
UK to achieve accreditation to the Safer Retailer Award for all stores
within the centre which sell age restricted products. The award, which
assesses the Policies, Training and Procedures revolving around the
sale of age restricted goods is supported by The Scottish Government,
Police Scotland, The Scottish Fire and Rescue Service and the Trading
Standards Institute.
• Idlewells Shopping Centre has enjoyed a long running relationship with
a major local educational facility, Sutton Centre Community College,
and this has recently undergone a transformation to become Sutton
Community Academy. Individual initiatives have included work with
Sutton Town Centre Group to organise and host themed events in the
town, such as a Diamond Jubilee celebration and a Christmas light
switch-on, as well as work with both mainstream and adult education
students on enterprising activities focused on the theme of ‘learning
and earning’. Centre management have supported with mock interviews
to help give students experience of the work environment, and even set
one business studies group a challenge of helping to create part of the
shopping centre’s marketing and events strategy. The most long-standing
project has been a free of charge agreement for the Community Academy
to utilise a shop unit within Idlewells to showcase the work of the adult
education classes including nail art, paintings, fashion accessories
and clothing.
44
governance
helical bar plc 2013
index
46 corporate governance review
49 letter from the chairman of the nominations committee
50 report of the nominations committee
51 the board of directors and senior management
53 letter from the chairman of the remuneration committee
54 directors’ remuneration report
63 report of the audit committee
64 report of the directors
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45
helical bar plc 2013
corporate governance review
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. The
independent non-executive directors are Richard Gillingwater (Senior
Independent Director), Andrew Gulliford, Michael O’Donnell and
Richard Grant.
In the Board’s view, the composition of the Board has 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 2012 AGM the Notice and related papers were sent out 16
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.
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
financial 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 financial information
and that financial 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.
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 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” and, except where stated below, have
complied with the provisions 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 as Chairman of Giles Weaver at last year’s
AGM, the Nominations Committee indicated its intention to appoint
then 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 McNair Scott
did not satisfy this Code provision on appointment. The Committee
engaged in an extensive consultation process with shareholders and
representative bodies, explaining its reasons for the appointment and
received indications that there would be considerable support for his
re-election at the AGM and his appointment as Chairman at the
conclusion of the AGM. In proposing this appointment, the Committee
was conscious of non-compliance with the Code and 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 51, became the Senior
Independent Director. Richard Grant is the Finance Director of
Cadogan Estates Limited and a former partner of PwC. He was
appointed the Chairman of the Audit Committee. In his role as Senior
Independent Director, Richard Gillingwater has taken on the
responsibility for liaising with shareholders and their representative
bodies regarding the governance of the Company and is also responsible
for undertaking the annual directors’ evaluation process. He holds
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 sufficient 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 finance 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.
46
corporate governance review
helical bar plc 2013
The Board has a schedule of matters specifically 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:
Attendance at Board and Committee meetings during the year
In addition to ad hoc meetings arranged to discuss particular transactions
and events and the 2012 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.
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 significant changes in accounting
policies or practices; approval of treasury policies.
• Internal controls – ensuring maintenance of a sound system of control
and risk management.
• 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 Nigel McNair Scott.
The executive directors are Michael Slade (Chief Executive), Tim Murphy
(Finance Director), Gerald Kaye, Matthew Bonning-Snook, Jack Pitman
and Duncan Walker. The non-executive directors are Richard Gillingwater
(Senior Independent Director), Andrew Gulliford, Michael O’Donnell and
Richard Grant. All the directors will be offering themselves for re-appointment
at the 2013 AGM.
Further details, including biographies and shareholdings in the Company,
can be found on pages 51 and 52.
Full
Board
Audit
Commitee
Remuneration
Committee
Nominations
Committee
Chairman
Nigel McNair Scott
6/6
n/a
Executive Directors
Michael Slade
Tim Murphy
Gerald Kaye
Matthew
Bonning – Snook
Jack Pitman
Duncan Walker
6/6
3/3
6/6
6/6
6/6
6/6
Non-Executive Directors
Richard Gillingwater
Andrew Gulliford
Michael O’Donnell
Richard Grant
Former Directors
Giles Weaver
Antony Beevor
Wilf Weeks
3/3
6/6
6/6
3/3
3/3
3/3
3/3
n/a
n/a
n/a
n/a
n/a
n/a
2/2
3/3
3/3
2/2
n/a
1/1
1/1
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
3/3
3/3
n/a
n/a
3/3
3/3
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n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
3/3
3/3
n/a
3/3
3/3
3/3
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 and, by each non-executive
director, in respect of each Board Committee of which they are a member.
During the year the Board undertook a formal evaluation of its own
performance and that of its Committees and the Senior Independant
Director reported the results of that evaluation process to the Board.
Individual evaluations of directors were conducted by the Chief Executive,
and Chairman.
47
helical bar plc 2013
corporate governance review
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 flows 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 53 and 63
respectively of this Annual Report. The report of the Nominations
Committee can be found on page 49.
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.
During the year under review, Andrew Gulliford, as Chairman of the
Remuneration Committee, engaged with principal shareholders (holding
more than 3% of the Company’s shares) and shareholder representative
bodies, to seek their approval for the Annual Bonus Scheme 2012.
The former Chairman, Giles Weaver, also engaged with principal
shareholders and shareholder representative bodies during the year,
regarding the proposed changes to the Board which became effective on
the date of the 2012 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.
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 defined 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;
• financial controls and review procedures;
• financial information systems including cash flow, profit and capital
expenditure forecasts. The Board receives regular and comprehensive
reports on the day-to-day running of the business;
• an Audit Committee which meets with the auditors and deals with any
significant 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 profile.
An analysis of the Group’s risk strategy can be found on page 9.
Internal audit
The Board reviewed its position during the year to 31 March 2013 and
reaffirmed 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
significant 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 2013, made charitable donations of £13,055. Further details
are provided in the Corporate Responsibility Report on page 42. 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 2013.
Going concern
The directors have reviewed the current and projected financial position of
the Group making reasonable assumptions about future trading performance.
The key areas of sensitivity are:
• Timing and value of property sales
• Availability of loan finance and related cash flows
• Future property valuations and their impact on covenants and
potential loan repayments
• Committed future expenditure
• Future rental income and bad debts
• Payment timings and the value of trade receivables
The forecast cash flows have been sensitised to eliminate those cash
inflows 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.
48
letter from the chairman of
the nominations committee
helical bar plc 2013
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. Alongside me, the Committee comprises
Andrew Gulliford, Michael O’Donnell, Richard Gillingwater and Richard
Grant.
During the year, the main focus of the Committee was succession planning,
both for the executive team and the non-executive directors. In early 2012,
the Committee identified a need for additional independent non-executive
directors in view of the intention of the Group’s then Chairman and two
other non-executive directors to step down from the Board at the 2012
AGM. Accordingly, the Group appointed search firm Norman Broadbent
to assist in this process. After considering a number of candidates, the
Committee recommended the appointments of Richard Gillingwater and
Richard Grant, both of whom were appointed to the Board on 24 July
2012, immediately following the 2012 AGM. At the same time the Committee
also recommended to the Board the promotion of Tim Murphy to Finance
Director and, following an extensive consultation process with shareholders
and representative bodies, my appointment as Chairman after stepping
down as Finance Director at the 2012 AGM.
Annual General Meeting
At the Annual General Meeting to be held on 24 July 2013, the following
resolutions relating to the appointment of directors are being proposed:
• The re-election of Nigel McNair Scott as non-executive Chairman;
• The re-election, as executive directors, of Michael Slade, Tim Murphy,
Gerald Kaye, Matthew Bonning-Snook, Jack Pitman and Duncan
Walker; and,
• The re-election, as independent non-executive directors, of Andrew
Gulliford, Michael O’Donnell, Richard Gillingwater and Richard Grant.
I trust that shareholders will support the Committee and vote in favour
of these resolutions.
Nigel McNair Scott
Chairman of the Nominations Committee
23 May 2013
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49
helical bar plc 2013
report of the nominations committee
Shareholder consultation
On appointment as the new Chairman of the Company, Nigel McNair
Scott was not regarded as independent by shareholders and their
representative bodies. In the light of this, the previous Chairman, Giles
Weaver, conducted an extensive consultation exercise with the
Company’s largest investors and representative bodies, to explain the
rationale behind this appointment. Whilst concern was expressed by
some shareholders that such an appointment was not in accordance
with the UK Corporate Governance Code, the Committee confirmed their
view that Nigel McNair Scott was the most appropriate candidate for the
role. This role specifically requires 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. At the 2012
AGM, 91% of votes cast were in favour of the re-election of Nigel McNair
Scott. The Committee believes that this successful result reflects the
constructive consultation exercise undertaken with shareholders.
Directors’ re-election
The Board believes that the requirements of Code Provision B.7.I of the
UK Corporate Governance Code should be fulfilled. This provision
requires all directors of FTSE350 companies 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 confirms
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 51.
The nominations committee
The Nominations Committee is chaired by Nigel McNair Scott (from 24
July 2012). The other members of the Committee are Andrew Gulliford,
Michael O’Donnell, Richard Gillingwater (from 24 July 2012) and Richard
Grant (from 24 July 2012). Giles Weaver (former chairman), Antony
Beevor and Wilf Weeks stepped down from the Committee on 24 July
2012.
None of the Committee members has any personal or financial interest in
the matters to be decided (other than as shareholders), potential conflicts
of interest arising from cross-directorships nor any day-to-day
involvement in running the business.
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.
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 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 3 times during the period and a record of attendance
at these meetings is shown on page 47. Including the matters referred to
in the Letter from the Chairman of the Nominations Committee on page 49,
the Committee considered the following matters during the year:
• The results of the annual directors’ evaluation process;
• The retirement of Giles Weaver, Antony Beevor and Wilf Weeks;
• The appointment of Nigel McNair Scott as non-executive Chairman;
• The appointment of Tim Murphy as Finance Director on 24 July 2012;
• The appointment of search consultants Norman Broadbent and the
subsequent appointment of Richard Gillingwater and Richard Grant as
independent non-executive directors on 24 July 2012;
• The re-election of directors at the 2012 Annual General Meeting.
50
the board of directors and
senior management
helical bar plc 2013
Chairman
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 was appointed Chairman of the Company after the 2012 AGM.
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.
Non-executive directors
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 & Wakefield Healey & Baker,
he is a non-executive director of McKay Securities PLC, F&C UK Real
Estate Investments Limited and various other companies.
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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 firm where he was responsible for a number of
successful investments in fast growing businesses, often with a
significant property element. In 2009 he established Ebbtide Partners, a
consultant to, and investor in, private companies. He was appointed
Chairman of Cygnet Healthcare in May 2013. He is a member of the
Nominations, Audit and Remuneration Committees.
Richard Gillingwater, CBE, is the non-executive Chairman of Henderson
Group plc, non-executive Chairman of CDC Group plc, Senior
Independent Director of Hiscox Ltd and SSE plc and non-executive
director of Wm Morrison Supermarkets Plc. He was, until recently, Dean
of Cass Business School. Prior to this he spent 10 years at Kleinwort
Benson, before moving to BZW, and, in due course, becoming joint
Head of Corporate Finance and then latterly Chairman of European
Investment Banking at Credit Suisse First Boston. He was Chief
Executive and later Chairman of the Shareholder Executive and has also
been a non-executive director of P&O, Debenhams, Tomkins, Qinetiq
Group and Kidde plc. Richard is the Senior Independent Director of
Helical and is a member of the Nominations, Audit and Remuneration
Committees.
Richard Grant, BA (Oxon), ACA is the Finance Director at Cadogan
Estates Limited and former corporate finance partner at PwC, whom he
joined in 1975. He is a member of the Investment Advisory Committee of
Rockspring Hanover Property Unit Trust. Richard is the Chairman of the
Audit Committee and a member of the Nominations and Remuneration
Committees.
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, Co-Chairman
of the Business and Entrepreneurs 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.
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. He was appointed
Finance Director of the Company after the 2012 AGM. Prior to joining
Helical, he worked for accountants Grant Thornton and KPMG.
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 four million sq ft
of offices, retail, leisure and industrial developments. Gerald is the Past
President of the British Council for Offices 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.
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 office and mixed use developments.
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.
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 acquisition of Helical’s shopping
centres. Prior to joining Helical, Duncan led Edinburgh House Estate’s
investment team.
51
helical bar plc 2013
the board of directors and senior management
Directors and their interests
The current directors and their interests, all of which were beneficial, in the ordinary shares of the Company are listed below. There have been no
changes in the directors’ interests in the period from 31 March 2013 to 22 May 2013.
Age
Date of
appointment
Title
Committees
Shares held
at 31.3.13
Shares held
at 31.3.12
Chairman
Nigel McNair Scott
Executive Directors
Michael Slade
Tim Murphy
Gerald Kaye
Matthew Bonning-Snook
Jack Pitman
Duncan Walker
Non-Executive Directors
Andrew Gulliford
Michael O’Donnell
Richard Gillingwater
Richard Grant
67
66
53
55
45
44
34
66
46
56
59
November 1985
Chairman
N(C)
2,722,556
2,710,132
August 1985
Chief Executive
July 2012
Finance Director
September 1994
Executive Director
June 2007
June 2007
June 2011
Executive Director
Executive Director
Executive Director
March 2006
Non-executive director
N, A, R(C)
June 2011
Non-executive director
N, A, R
July 2012
July 2012
Non-executive director
S, N, A, R
Non-executive director
N, A (C), R
13,032,358
13,427,494
128,140
1,535,452
285,113
440,327
15,931
14,328
62,000
–
15,000
n/a
1,530,589
280,260
445,053
11,480
14,328
46,000
n/a
n/a
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 Wakefield in 1995 and is the Head of Asset Management. Aged 47.
Tom Anderson, BSc (Hons) MRICS, joined the Group in 2009 from Allsops where he worked in the National Investment Team. Aged 34.
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 31.
Alastair Oastler, BSc (Hons) FCA AMCT, joined the Group as Financial Controller in 2007 having previously worked for Invensys plc and Compagnie
Financiere Richemont SA. Aged 36.
52
letter from the chairman of the
remuneration committee
helical bar plc 2013
Dear Shareholder,
I am pleased to present the Remuneration Committee’s Report on
directors’ remuneration for the year to 31 March 2013. This report has
been approved by the Board of Helical Bar plc.
I am Chairman of the Committee which also comprises Michael
O’Donnell and, following their appointment immediately after the 2012
AGM, Richard Gillingwater and Richard Grant. Each member of the
Committee is an independent non-executive director.
The main duty of the Committee is to determine and agree with the
Board, the framework or broad policy for the remuneration of the
Chairman and the executive directors and, subject to proposals being
submitted by the Chief Executive, recommend and monitor the level and
structure of remuneration for such other members of the executive
management as report directly to the Chief Executive. The remuneration
of non-executive directors shall be a matter for the Chairman and
executive members of the Board.
During the last year, the Department for Business, Innovation and Skills
(“BIS”) issued consultation papers on revised directors’ remuneration
reporting regulations. Full compliance with these new regulations will not
apply until the 2014 Report and Accounts but we have sought, in this
report, to include some of the regulations early to further improve the
level and transparency of disclosure and better illustrate the link between
performance and remuneration. In particular, the report has been divided
into the following two sections:
• Remuneration Policy Report, which sets out the Group’s policy on the
remuneration of executive and non-executive directors; and,
• Implementation Report, which discloses how the remuneration policy
has been implemented in the year ended 31 March 2013.
A single advisory vote on both parts of the report will be tabled at the
forthcoming 2013 AGM.
Remuneration issues dealt with during the year
In the year under review, the Committee undertook consultations with
shareholders and shareholder representative bodies on changes to the
remuneration of executive directors, in particular with respect to the
introduction of a new Helical Bar Annual Bonus Scheme 2012. At the
2012 AGM, 95 per cent of votes cast were in favour of the adoption of
this new bonus scheme. The Directors’ Remuneration Report also
received 95 percent of votes cast in favour. The Committee believes that
these successful results reflect the constructive consultation exercise
undertaken with shareholders.
In addition, the Committee considered a number of other matters during
the financial year under review and the following decisions were taken:
• basic salaries were reviewed in July 2012 and inflationary increases of
3 per cent were awarded with effect from 1 July 2012 to Gerald Kaye,
Matthew Bonning-Snook and Jack Pitman. Michael Slade waived his
entitlement to an inflationary increase;
• On appointment to the Board as Finance Director, Tim Murphy’s salary
was set at £250,000pa;
• On appointment as Chairman of the Company, Nigel McNair Scott’s
fee was set at £150,000pa;
• The Helical Bar 2002 Approved Share Incentive Plan was renewed for a
further 10 years. At the 2012 AGM, 100 per cent of votes cast were in
favour of the renewal of this HMRC approved all employee share scheme;
• The Committee reviewed the awards made in accordance with the terms of
the Performance Share Plan (“PSP”) in 2009 and considered the
performance of the Company during the three year performance period to
31 March 2012. Despite a return to profitability, the performance conditions
required for vesting of the shares were not met and no shares vested;
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• The Committee resolved in May 2012 to make a further award of
shares under the terms of the PSP; and,
• The Committee resolved that the provision of long-term incentives
through the PSP, which was approved by shareholders in 2004, should
continue in its present form until expiry in 2014.
The implementation of these decisions is detailed in this report, together
with additional information on the fixed and variable remuneration paid
and payable to the directors of the Group.
Performance and reward during 2013
As noted in the business review on pages 1 to 44, the Group has delivered
an increase in EPRA net assets per share of 5.6% and a total portfolio
return, as reported by IPD, of 8.6%. Pre-tax profits of the Group, before
performance related awards, increased by 51% to £11.8m (2012: £7.8m).
Subsequent to the year end and in accordance with the rules of the
Helical Bar Annual Bonus Scheme 2012 and the Executive Bonus Plan
2011, cash bonuses have been approved for inclusion in the financial
statements for the year to 31 March 2013. Details of the bonuses
payable are disclosed in the Implementation Report below.
Remuneration policy for 2014
The Remuneration Committee of Helical Bar plc is committed to ensuring
that its remuneration policy remains aligned to the interest of shareholders,
incentivising management to increase total returns and growing net asset
value per share whilst ensuring that an appropriate balance is maintained
between the targets set for management and the risk profile of the Group.
The Committee believes that it has struck the right balance between fixed
annual remuneration and an incentive structure with challenging targets
which seeks to reward outperformance with a mixture of cash-based
annual bonus payments and longer term share awards.
Reviewing the current remuneration the Committee has determined that the
basic salaries of the executive directors should again be increased by 3%,
reflecting current inflation levels, which is below the 5% awarded to all other
employees of the Group. The Committee has also determined that the basic
salary levels of the two recently appointed directors, Duncan Walker and Tim
Murphy, be increased by 10% (including the annual inflationary increase) to
move them towards market norms as their respective contributions increase.
These increases will be effective from 1 July 2013.
The two annual bonus schemes were approved by shareholders in 2011
and 2012 and will not be reviewed during the forthcoming year. However,
the long-term share incentive plan, the Helical Bar Performance Share
Plan, was introduced in 2004 and will need to be reviewed during the
year with a view to assessing its continuing suitability within the framework
of the Group’s remuneration structure. The Committee will seek to
consult with major shareholders and representative bodies on this matter
before proposing any replacement of this long-term incentive plan.
Annual General Meeting
At the Annual General Meeting to be held on 24 July 2013 the following
resolution relating to remuneration is being proposed:
• The approval of the Directors’ Remuneration Report for the year ended
31 March 2013.
I trust that shareholders will support the Committee and vote in favour of
this resolution.
Andrew Gulliford
Chairman of the Remuneration Committee
23 May 2013
53
helical bar plc 2013
directors’ remuneration report
Remuneration policy report
This section of the Remuneration Report sets out the remuneration policy
of the Group with effect from 1 April 2013. There have been no changes
to this policy since 1 April 2012 and the Committee believes that the
policy continues to support the Group’s strategy and is aligned with
shareholders interests.
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.
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. In addition, a
number of disclosures which will be required under the draft BIS reporting
regime from next year have been adopted early. It has been approved by
Executive director policy table for 2014
The table below summarises the 2013-14 executive remuneration policy with any changes from the prior year highlighted:
Element
Salary
Purpose and link to strategy
Operation
– Reflects the value of the individual and their
role and responsibilities
– Reflects delivery against key personal
objectives and development
– Provides an appropriate level of basic fixed
income avoiding excessive risk arising from
over reliance on variable income
Annual bonus: CEO and Finance Director
– Provides focus on delivering net asset value
growth above sector benchmark
– Rewards and helps retain key executives and
is aligned to the Group’s risk profile
– Maximum bonus only payable for achieving
demanding targets
Annual bonus: other directors
– Provides focus on delivering returns from the
Group’s property portfolio
– Aligned with shareholders through a profit
sharing model, with appropriate hurdles and
shareholder protections
– Rewards and helps retain key executives and
is aligned to the Group’s risk profile
– Maximum bonus only payable for achieving
demanding targets
– Normally reviewed annually, effective 1 July
– Paid in cash on a monthly basis; not pensionable
– Takes periodic account against companies
with similar characteristics and sector
comparators
– Targeted between lower quartile and median
– Reviewed in context of the salary increases
across the Group
– Payable in cash with deferred share element
– Non-pensionable
– Payable in cash with deferred share element
– Non-pensionable
– Claw-back provisions apply
Performance Share Plan (“PSP”)
– Aligned to main strategic objective of delivering
– Share plan approved by shareholders in July
long-term value creation
2004
– Aligns executive directors’ interests with those
– Discretionary annual grant of conditional share
of shareholders
awards
– Rewards and helps retain key executives and
is aligned to the Group’s risk profile
Other benefits
– Provide insured benefits to support the
individual and their family during periods of ill
health, accidents or death
– Cars or car allowances to facilitate effective travel
– Benefits provided through third party providers
– Insured benefits includes: private medical
cover, permanent health insurance and cars or
car allowances
Share ownership guidelines
– To provide alignment of interests between
executive directors and shareholders
Non-executive director fees
54
– Reflects time commitments and responsibilities
of each role and fees paid by similarly sized
companies
– Chairman’s remuneration is set by the Committee
which meets without him. The remaining
non-executive directors’ fees are set by a
committee comprising the executive directors
– Executive directors are required to build and
maintain a shareholding equivalent to two
years’ basic salary through the retention of the
post-tax shares received on the vesting of awards
– Participants in the PSP are required to retain
shares acquired under the terms of the PSP
for at least two years after vesting
– Cash fee paid monthly
– Fees are reviewed on an annual basis
– Fixed three year contracts with three month
notice periods
directors’ remuneration report
helical bar plc 2013
the Board and will be submitted to shareholders for approval at the
Group’s Annual General Meeting to be held on 24 July 2013. Grant
Thornton UK LLP has audited the disclosures of directors’ remuneration
and share awards on pages 58 to 62.
• targets for any performance related remuneration schemes; and,
• service agreements incorporating termination payments and
compensation commitments.
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,
and other benefits;
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 independent
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.
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Maximum
Performance targets
Changes in the year
– N/A
– Salary increases for executive directors will not
normally exceed the average increase awarded
to other employees
– Increases may be above this level if there is an
increase in the scale, scope or responsibility of the
role or to allow the basic salary of newly appointed
executives to move towards market norms as
their experience and contribution increases
– Inflationary increases of 3% were awarded
with effect from 1 July 2012. A similar increase
of 3% is to be implemented from 1 July 2013
– Increases in basic salary of 10% have been
awarded to Duncan Walker and Tim Murphy to
move their salaries towards market norms
– £2m in total, £1.5m per individual
– 300% of salary p.a. plus 300% p.a. in year 5
and year 10
Sliding scale targets based on:
– The amount by which the increase in the Group’s
net asset value exceeds an industry benchmark
– Subject to achieving minimum relative perfor-
mance levels
– Details of actual targets are set out on page 59
Sliding scale targets based on:
– Profits/losses of the business plus growth in
values of the investment, trading and
development portfolio after charging for the
Group’s finance, administration costs and the
use of the Group’s equity
– None proposed
– None proposed
– 300% of salary p.a. for all executive directors
– N/A
– N/A
– Performance measured over three years
– Absolute growth in the Group’s net asset value
per share
– Gross total property return relative to other
property funds as determined by IPD
– Plan to be reviewed in 2013/14 prior to its
termination date in July 2014. Any
replacement plan to be approved by
shareholders at the 2014 AGM
– Details of actual targets are set out on page 60
– N/A
– None proposed
– Aim to hold a shareholding equal to 200%
– None proposed
of basic salary
– Chairmans fee is £150,000 p.a.
– Non-executive base fee is £40,000 p.a.
– Fee for Senior Independent Director or for
chairing Audit or Remuneration Committee is
£10,000 p.a.
– N/A
– None proposed
55
Service contracts
The service contract of Michael Slade operates from 1 April 2007, those
of Gerald Kaye, Matthew Bonning-Snook and Jack Pitman from 1 March
2010, that of Duncan Walker from 24 June 2011 and of Tim Murphy from
24 July 2012. 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.
Share ownership guidelines
Senior executives will not normally be permitted to sell shares received
through the PSP, other than to meet taxation (and national insurance
contributions) liabilities, for at least two years and until they own shares to
the value of 200% of basic salary for executive directors and 100% of
salary for other executives. 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 over the term of the plans 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
each three year period.
helical bar plc 2013
directors’ remuneration report
Executive directors’ basic annual salary and benefits-in-kind
The basic package of salary and benefits 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 2012. Executive directors’ current basic annual salaries,
together with salaries for the prior year, are as follows:
Michael Slade
Tim Murphy
Gerald Kaye
Matthew Bonning-Snook
Jack Pitman
Duncan Walker
1 April 2012
£
1 April 2013
£
500,000
n/a
375,000
300,000
300,000
250,000
500,000
250,000
386,250
309,000
309,000
250,000
In 2012, the Committee resolved that the basic salaries of executive
directors should be reviewed annually and increased to reflect an appropriate
level of salary inflation. Accordingly, the basic salary levels of Gerald Kaye,
Matthew Bonning-Snook and Jack Pitman were increased by 3% from 1
July 2012. Mr Slade waived his entitlement to an inflationary increase,
thereby retaining his previous salary level. Duncan Walker was not eligible
for the 2012 inflationary increase given the increase in his basic salary he
received on 1 April 2012 following his earlier appointment to the Board.
Reviewing the current remuneration the Committee has determined that
the basic salaries of the executive directors should again be increased by
3%, reflecting current inflation levels, which is below the 5% awarded to
all other employees of the Group. The Committee has also determined that
the basic salary levels of the two recently appointed directors, Duncan Walker
and Tim Murphy, be increased by 10% (including the annual inflationary
increase) to move them towards market norms as their contribution
increases. These increases will be effective from 1 July 2013. Benefits-in-
kind provided to executive directors comprise the provision of a company
car or car allowance and health insurance.
Non-executive directors’ fees
In 2012, the Board resolved that with effect from 1 July 2012, the fees
payable to non-executive directors will comprise a basic £40,000 plus an
additional £10,000 for the Chairman of the Audit and Remuneration
Committees and the Senior Independent Director. On his appointment as
Chairman, Nigel McNair Scott’s annual fee was fixed at £150,000.
Non-executive directors’ current annual fees, together with fees for the
prior year, are as follows:
Nigel McNair Scott – Chairman
Richard Gillingwater – Senior
Independent Director
Andrew Gulliford – Chairman of the
Remuneration Committee
Richard Grant – Chairman of the Audit
Committee
1 April 2012
£
1 April 2013
£
n/a
n/a
150,000*
50,000*
50,000
50,000
n/a
50,000*
Michael O’Donnell
35,000
40,000
* From appointment on 24 July 2012
56
directors’ remuneration report
Statement of directors’ shareholdings
Legally
owned
31.3.12
Legally
owned
31.3.13
PSP
awards
unvested
PSP
awards
vested
All-employee
restricted
All-employee
Unrestricted
Total
31.3.13
helical bar plc 2013
% of salary
held under
shareholding
guideline
(200% of
salary)
Executive Directors
Michael Slade
13,399,738
12,999,738
2,017,395
Tim Murphy
Gerald Kaye
95,520
95,520
786,837
1,502,871
1,502,871
1,458,717
Matthew Bonning-Snook
252,929
252,929
1,183,272
Jack Pitman
Duncan Walker
417,297
407,707
1,183,272
–
–
802,386
Non-Executive Directors
Nigel McNair Scott
2,682,376
2,691,375
1,172,395
Andrew Gulliford
14,328
14,328
Richard Gillingwater
Richard Grant
–
–
Michael O’Donnell
46,000
–
15,000
62,000
–
–
–
–
d
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e
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o
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s
’
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e
p
o
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t
-
g
o
v
e
r
n
a
n
c
e
–
–
–
–
–
–
–
–
–
–
–
16,898
16,898
16,897
16,869
16,898
15,496
15,722
13,032,358
15,722
128,140
15,684
1,535,452
15,315
15,722
285,113
440,327
435
15,931
> 200%
< 200%
> 200%
> 200%
> 200%
< 200%
15,459
15,722
2,722,556
–
–
–
–
–
–
–
–
14,328
–
15,000
62,000
–
–
–
–
–
There have been no changes in the interests of any Director between 31 March 2013 and the date of this report.
57
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directors’ remuneration report
Implementation report
Balance of fixed 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 2013, the balance of fixed versus
variable pay on an actual basis for the executive directors compared to the maximum payable was as follows:
Basic salaries and benefits in-kind
Annual Bonus Scheme 2012
Executive Bonus Plan 2011
Performance Share Plan shares vested
Actual
£
2,509,000
1,754,000
1,297,000
–
Share
of total
%
45
32
23
–
Maximum
£
2,509,000
3,763,000
2,000,000
3,429,000
Share
of total
%
22
32
17
29
5,560,000
100
11,701,000
100
Note: Performance Share Plan shares vested reflect 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
Remuneration in respect of the directors was as follows:
Fixed
Basic
salary/
fees
£000
Benefits
£000
Pension
£000
Sub-total
£000
Variable
Annual
cash
bonus
£000
Deferred
shares
£000
PSP
£000
Sub-total
£000
2012-13
Total
£000
2011-12
Total
£000
Executive directors
Michael Slade
Tim Murphy*
Gerald Kaye
Matthew Bonning-Snook
Jack Pitman
Duncan Walker
Former executive director
Nigel McNair Scott
Non-executive directors
Nigel McNair Scott
Andrew Gulliford
Richard Gillingwater*
Richard Grant*
Michael O’Donnell
Former Chairman
Giles Weaver
Former non-executive directors
Antony Beevor
Wilf Weeks
Total
* From appointment on 24 July 2012.
500
171
383
307
307
250
74
103
50
34
34
39
28
16
11
50
14
39
21
21
17
40
–
–
–
–
–
–
–
–
2,307
202
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
550
185
422
328
328
267
114
103
50
34
34
39
28
16
11
973
33
440
440
145
145
275
–
–
–
–
–
–
–
–
–
16
220
220
72
72
–
–
–
–
–
–
–
–
–
2,509
2,451
600
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
973
49
660
660
217
217
1,523
234
1,082
988
545
484
541
–
398
419
315
256
275
389
304
–
–
–
–
–
–
–
–
103
50
34
34
39
28
16
11
–
48
–
–
27
86
48
35
3,051
5,560
2,477
Michael Slade was the highest paid director during the year with a total remuneration of £1,523,000 (2012: £541,000).
At the 2012 AGM on 24 July 2012, Giles Weaver (Chairman), Antony Beevor and Wilf Weeks retired as non-executive directors and Nigel McNair Scott
stepped down as Finance Director and was appointed Chairman. Immediately after the 2012 AGM Tim Murphy was appointed Finance Director and
Richard Gillingwater and Richard Grant were appointed non-executive directors.
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directors’ remuneration report
helical bar plc 2013
Annual cash bonus payments
Executive Bonus Plan
In 2011, shareholders approved the renewal of the Executive Bonus Plan
(the “2011 Plan”) for a further five years. Michael Slade, Nigel McNair
Scott and Tim Murphy were eligible for 2011 Plan bonuses during the
year. Total 2011 Plan bonuses for the year to 31 March 2013 of
£1,297,000 (2012: nil) have been accrued in the financial statements for
the year to 31 March 2013 and are payable in June 2013. During the
year, Tim Murphy replaced Nigel McNair Scott as a participant in the
2011 Plan.
The Committee may, at its discretion, award bonuses in respect of a
financial year subject to performance conditions, the aim of which is to
link the size of bonuses paid to the financial growth of the Group over
that financial year. No bonus will be payable unless the following
conditions are satisfied:
• Increase in net asset value; net asset value at the end of the financial
year exceeds net asset value at the beginning of the financial year;
• Absolute performance of the portfolio – un-geared total return; the
percentage increase in the total return on property assets of the Group
over the financial year (the “Performance Period”) is greater than the
percentage increase achieved by the portfolio ranked nearest to
three-quarters 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 financial 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.
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The total amount payable under the 2011 Plan in any one year is limited
to £2m (2012: £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 profits plus any payments under the 2011 Plan. This limit
operated in the year restricting the total bonus paid under the 2011 plan
to £1,297,000. Among other constraints the Committee could restrict the
bonuses if payment would affect the financial or trading position of the
Group.
Following feedback received during the investor consultation in respect of
the codification 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 200% of basic salary should
receive up to one third of any bonus in deferred shares for three years.
Helical Bar Annual Bonus Scheme 2012
The Helical Bar Annual Bonus Scheme 2012 was approved by
Shareholders at the 2012 AGM. This scheme provides annual cash
bonuses based on the performance of the Group’s property portfolio and
is aligned with shareholders through a profit sharing model, with
appropriate hurdles and shareholder protections (including deferral and
clawback). Total 2012 Bonus Scheme Bonuses have been accrued in the
financial statements for the year to 31 March 2013 and the cash element
will be payable in June 2013.
The main features of the 2012 Bonus Scheme are as follows:
• The 2012 Bonus Scheme is effective from 1 April 2012;
• The initial scheme participants are 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 2011 Plan;
• All current and future property assets will be allocated to one of two
pools namely an “Investment Pool” and a “Development Pool” (“Profit
Pools”);
• Investment assets are included at valuation as at 31 March 2012 with
subsequent valuation movements increasing or decreasing the size of
the relevant Profit Pool. Development assets are also included at
valuation as at 31 March 2012 with subsequent valuation movements
increasing or decreasing the size of the Profit Pool. Any opening
surpluses or deficits in the value of the trading and development assets
as at 31 March 2012 will only be included in the Profit Pools once they
are realised;
• Development profits, development management fees, net rents, other
income and profits/losses on the sale of property assets will be
allocated to the relevant Profit Pools; and,
• Profits in the two Profit Pools will be eligible for the award of bonuses
once they are sufficient to exceed the recovery of all related finance
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 reflect any changes in the cost of debt
and the risk profile of the Company’s activities), the Group’s total
administrative costs (excluding performance related remuneration) and
any unallocated losses from the previous three financial years.
59
helical bar plc 2013
directors’ remuneration report
Shareholder Protections
• Consistent with the existing arrangement, no more than 10% of profits
will be available to participants for distribution (“Bonus Award Pool”) at
the end of the relevant financial year. Pool allocations between
participants will be based on a set formula agreed at the start of the
financial year;
• The distribution of the Bonus Award Pools to participants will be
restricted in any financial year to the lower of 70% of the balance of the
Bonus Award Pool and 300% of salary (except in years five 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);
• Two thirds of any payment will be made in cash after the relevant
financial 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 fifth 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
profit (amounts will be deferred until a profit 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 Profit Pools for offset against
future net profits. 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; and,
• 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 during the
lifetime of the plans will continue to be no more than 20%.
Other matters
• Shareholder approval for the Plan was obtained for 10 years from 1
April 2012, although the Remuneration Committee will review the
operation of the Plan after 5 years;
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 satisfied 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 financial year over
shares worth more than 3 times salary.
• 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 financial 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
Between 7.5% p.a. and 15% p.a.
7.5% p.a.
Below 7.5% p.a.
66.7
Pro rata between
6.7 and 66.7
6.7
Zero
If UK inflation (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
Upper quartile or above
Between median and upper quartile
% of award vesting
33.3
Pro rata between
3.3 and 33.3
3.3
Zero
• Awards may be satisfied 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;
Median
Less than median
• 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;
and,
• On a change of control of the Company, any amounts accrued over
the financial year up to the relevant date, and any amounts held within
the Bonus Award Pools, and any deferred shares would be distributed.
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 sixth award, granted
on 9 July 2009, were considered. The three year performance period to
31 March 2012 showed that the net asset value per share, calculated in
accordance with the terms of the PSP, had reduced by 0.9% p.a.
During this three year period the total return of Helical’s property
portfolio, as determined by IPD, was 5.5% compared to the median of
the IPD Benchmark which showed a return of 11.1%. Therefore, no
shares could vest as the performance of the property portfolio was below
that of the IPD median benchmark.
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helical bar plc 2013
PSP Awards made in the year*
The following awards under the terms of the PSP were made in the year:
Individual
Michael Slade
Date of Grant
Basis of Award
31 May 2012
300% of salary
Nigel McNair Scott
31 May 2012
300% of salary
Gerald Kaye
31 May 2012
300% of salary
Matthew Bonning-Snook
31 May 2012
300% of salary
Jack Pitman
Duncan Walker
Tim Murphy
* structured as conditional awards
31 May 2012
300% of salary
31 May 2012
300% of salary
31 May 2012
300% of salary
Face Value
£000
Vesting at
threshold
Vesting at
Maximum
1,500
705
1,125
900
900
750
630
10%
10%
10%
10%
10%
10%
10%
100%
100%
100%
100%
100%
100%
100%
Performance Period
3 years to 31 March 2015
3 years to 31 March 2015
3 years to 31 March 2015
3 years to 31 March 2015
3 years to 31 March 2015
3 years to 31 March 2015
3 years to 31 March 2015
The total number of awards made to directors under the terms of the PSP which have not yet vested are as follows:
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Director
Michael Slade
Nigel McNair Scott
Tim Murphy
Gerald Kaye
Matthew Bonning-Snook
Jack Pitman
Duncan Walker
Shares awarded
13.7.10 at
276.10p
Shares awarded
5.7.11 at
259.25p
Shares awarded
31.5.12 at
167.50p
543,281
363,998
179,282
353,132
298,804
298,804
152,118
578,592
387,656
231,436
433,944
347,155
347,155
202,507
895,522
420,895
376,119
671,641
537,313
537,313
447,761
Total shares
awarded
Total expected
value £
2,017,395
1,780,000
1,172,549
786,837
928,000
738,000
1,458,717
1,335,000
1,183,272
1,067,000
1,183,272
1,067,000
802,386
821,000
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 62% of the shares awarded on 31 May 2012 will vest.
Helical Bar 2002 Approved Share Incentive Plan
On 24 July 2012 shareholders renewed 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 are
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
Tim Murphy
Gerald Kaye
Matthew Bonning-Snook
Jack Pitman
Duncan Walker
31 May 2012
£
11 December 2012
£
3,425
3,425
3,425
3,425
3,420
3,425
3,255
1,439
–
1,439
1,439
1,433
1,439
1,196
Shares held by the Trustees of the Plan at 31 March 2013 were 474,624 (2012: 390,624).
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Single figure remuneration table
The table below presents single figure remuneration for the Chief Executive over the past five years, together with past annual bonus payouts and
relevant PSP and Share Option vestings.
Year ended
31 March 2013
31 March 2012
31 March 2011
31 March 2010
31 March 2009
Name
Michael Slade
Michael Slade
Michael Slade
Michael Slade
Michael Slade
Total
Remuneration
£'000
Annual Bonus
£'000
(% of max payout)
1,523
541
538
1,890
4,962
973 (65%)
– (-%)
– (-%)
– (-%)
– (-%)
PSP
£'000
(% of max
vesting)
– (-%)
– (-%)
– (-%)
Share Options
£’000
(% of vesting)
n/a
n/a
n/a
390 (33.33%)
973 (100%)
1,576 (100.0%)
2,896 (100%)
Shareholder voting at the last AGM
At the 2012 AGM the Directors’ Remuneration Report received the following votes from shareholders:
For
Against
Total votes cast (for and against)
Votes withheld
Total votes cast (including withheld votes)
Total number of
votes
% of votes cast
93,007,260
5,181,917
98,189,177
1,120,375
99,309,552
95%
5%
100%
–
–
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 31 March 2012 to senior employees below Board level. 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 five years to 31 March 2013 compared to a holding in a broad equity index is shown above.
Total shareholder return performance graph
Total shareholder return
Source: Thomson Reuters
125
100
75
50
)
£
(
e
u
a
V
l
25
31-Mar-08
31-Mar-09
31-Mar-10
31-Mar-11
31-Mar-12
31-Mar-13
Helical Bar
FTSE 350 Super-sector Real Estate Index
This graph looks at the value, by 31 March 2013, of £100 invested in Helical Bar on 31 March 2008 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 2013 was 236.75p (2012: 189.50p). This market price varied between 164p and 249.75p during
the year.
Andrew Gulliford
Chairman of the Remuneration Committee
23 May 2013
62
report of the audit committee
helical bar plc 2013
The audit committee
The Audit Committee is chaired by Richard Grant, following his appointment
to the Board on 24 July 2012. The other members of the Committee are
Andrew Gulliford, Michael O’Donnell and Richard Gillingwater (from his
appointment to the Board on 24 July 2012). None of the Committee
members has any personal or financial interest in the matters to be
decided (other than as shareholders), potential conflicts of interest arising
from cross-directorships nor any day-to-day involvement in running the
business.
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 financial reporting and internal
control principles and for maintaining an appropriate relationship with its
auditor. 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 financial 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.
Audit independence
A policy of reviewing audit independence has been adopted whereby
non-audit services undertaken by the auditor are approved prior to work
being carried out. The audit committee considers the external auditor to
be independent and has satisfied itself of the effectiveness of the
external auditor.
The Group’s policy on awarding non-audit work to its auditor is designed
to ensure that the Group receives the most appropriate advice without
compromising the independence of the auditor. Whilst no fee caps or limits
have been set by the Committee, the level of fees would be a factor in
considering whether the auditor’s independence could be affected by the
award of non-audit work. In the year to 31 March 2013, no fees were paid
to the auditor for non-audit work.
Annual General Meeting
At the Annual General Meeting to be held on 24 July 2013 the following
resolutions relating to the auditor are being proposed:
• The re-appointment of Grant Thornton UK LLP as Independent
Auditor; and,
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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.
• To authorise the Directors to set the remuneration of the
Independent Auditor.
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 47. 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.
I trust that shareholders will support the Committee and vote in favour
of these resolutions.
Richard Grant
Chairman of the Audit Committee
Matters formally reviewed and discussed by the Board during the year
included:
23 May 2013
• The Group’s compliance with the UK Corporate Governance Code
including its whistle-blowing policies;
• The Group’s 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 financial statements of the Group and the Preliminary Announcement
of the annual results to 31 March 2012 and the Interim Statement on
the half year results to 30 September 2012;
• The re-appointment of the Group’s external auditor; and,
• The external auditors independence and the provision of non-audit
services by the external auditor.
The Audit Committee met the external auditor on two occasions to discuss
matters arising from the annual and interim audits.
63
helical bar plc 2013
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.
Substantial Shareholdings
At 15 May 2013, the shareholders listed below had notified the Company
of a disclosable interest of 3% or more in the nominal value of the
ordinary share capital of the Group:
Results
The results for the year are set out in the consolidated income statement
on page 68 and consolidated statement of comprehensive income on
page 69.
Dividends
An interim dividend of 1.85p (2011: 1.75p) was paid on 28 December 2012
to shareholders on the shareholder register on 30 November 2012. A final
dividend of 3.70p (2012: 3.40p) per share is recommended for approval
at the Annual General Meeting on 24 July 2013. The total ordinary
dividend paid in the year of 5.25p (2011-12: 4.90p) per share amounts to
£6,134,000 (2011-12: £5,707,000).
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 46 to 48 of the Corporate Governance Review.
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 48.
Re-appointment of directors
The directors listed on page 49 constituted the Board for the year, save
that Tim Murphy, Richard Gillingwater and Richard Grant were appointed
on 24 July 2012 and that at the 2012 Annual General Meeting, Giles Weaver,
Antony Beevor and Wilf Weeks stepped down from the Board. All the directors
currently serving will offer themselves for re-election at the AGM.
Details of directors’ remuneration and their interests in share awards are
set out in the Directors’ Remuneration Report on pages 54 to 62.
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 indemnifies 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 2013.
Share Capital
At 1 April 2012, 31 March 2013 and 23 May 2013 there were
118,137,522 ordinary 1p shares in issue.
Michael Slade
Number of
ordinary shares
at 15 May 2013
%
13,032,358
11.0
Aberdeen Asset Managers
10,814,890
Baillie Gifford
JP Morgan Asset Management
Blackrock Inc
Artemis Investment Management
Investec Asset Management
Dimensional Fund Advisors
Aviva Investors
9,096,203
5,646,721
5,513,400
4,828,278
4,159,010
4,110,891
4,012,842
Legal & General Investment Management Ltd
3,630,595
9.2
7.7
4.8
4.7
4.1
3.5
3.5
3.4
3.1
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 financial
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 specifies 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.
64
report of the directors
helical bar plc 2013
Annual general meeting
The Annual General Meeting of the Company will be held on 24 July 2013
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 Notice of Meeting 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
office. 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
23 May 2013
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Statement of directors’ responsibilities
The directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law the directors have to prepare financial statements
in accordance with International Financial Reporting Standards as adopted
by the European Union (IFRSs).
Under company law the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of the profit or loss of the Group
for that period.
In preparing these financial 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 financial statements;
• prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Group’s transactions and disclose
with reasonable accuracy at any time the financial position of the Group
and enable them to ensure that the financial 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 confirm 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, confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit 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 financial information included on the Group’s website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
On behalf of the Board
Michael Slade
Chief Executive
23 May 2013
Tim Murphy
Finance Director
65
helical bar plc 2013
helical bar plc 2013
financial statements
index
67 report of independent auditor
68 consolidated income statement
68 consolidated statement of comprehensive income
69 consolidated and company balance sheets
70 consolidated and company cash flow statements
71 consolidated and company statements of changes in equity
72 notes to the financial statements
99 ten year review
66
report of independent auditor
helical bar plc 2013
Independent auditor’s report to the
members of Helical Bar plc
We have audited the financial statements of Helical Bar plc for the year
ended 31 March 2013 which comprise the consolidated income statement,
the consolidated statement of comprehensive income, the consolidated
and company balance sheets, the consolidated and company cash flow
statements, the consolidated and parent company statements of changes
in equity and the related notes. The financial 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 financial 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 65, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair
view. Our responsibility is to audit and express an opinion on the financial
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.
Separate opinion in relation to IFRSs as issued by the IASB
As explained in Note 1 to the group financial 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 financial 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 financial year for
which the financial statements are prepared is consistent with the
financial statements; and
• the information given in the Corporate Governance Statement set out
on pages 46 to 48 with respect to internal control and risk management
systems in relation to financial reporting processes and about share
capital structures is consistent with the financial 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
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided
on the APB’s website at www.frc.org.uk/apb/scope/private.cfm.
• the parent company financial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
Opinion on financial statements
In our opinion:
• certain disclosures of directors’ remuneration specified by law are not
made; or
• the financial statements give a true and fair view of the state of the
• we have not received all the information and explanations we require
group’s and of the parent company’s affairs as at 31 March 2013 and
of the group’s profit for the year then ended;
• the group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
• the parent company financial 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 financial statements have been prepared in accordance with the
requirements of the Companies Act 2006 and, as regards the group
financial statements, Article 4 of the IAS Regulation.
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 48 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 specified for our review; and
• certain elements of the report to the shareholders by the Board on
directors’ remuneration.
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Charles Hutton-Potts B.Sc., FCA
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
23 May 2013
(left) Old Street London EC1
67
helical bar plc 2013
consolidated income statement
For the year ended 31 March 2013
Revenue
Net rental income
Development property profit
Trading property loss
Share of results of joint ventures
Other operating (expense)/income
Gross profit before net gain on sale and revaluation of investment properties
Net gain on sale and revaluation of investment properties
Gross profit
Administrative expenses
Operating profit
Finance costs
Finance income
Change in fair value of derivative financial instruments
Foreign exchange gains/(losses)
Profit before tax
Taxation on profit on ordinary activities
Profit after tax
– attributable to non-controlling interests
– attributable to equity shareholders
Profit for the year
Basic earnings per share
Diluted earnings per share
consolidated statement of
comprehensive income
For the year ended 31 March 2013
Profit for the year
Other comprehensive income
Year ended
31.3.13
£000
Year ended
31.3.12
£000
Note
2
3
4
5
19
6
7
9
9
34
10
14
14
65,439
19,578
6,956
(1)
3,854
(547)
29,840
1,335
31,175
(14,920)
16,255
(9,577)
887
(2,573)
17
5,009
815
5,824
(43)
5,867
5,824
5.0p
5.0p
52,968
17,876
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
6.5p
6.5p
Year ended
31.3.13
£000
Year ended
31.3.12
£000
Note
5,824
7,566
Impairment of available-for-sale investments
21
Exchange difference on retranslation of net investments in foreign operations
Total comprehensive income for the year
– attributable to equity shareholders
– attributable to non-controlling interests
Total comprehensive income for the year
68
(1,304)
(212)
4,308
4,351
(43)
4,308
(3,521)
(39)
4,006
4,015
(9)
4,006
consolidated and company
balance sheets
As at 31 March 2013
helical bar plc 2013
Group
31.3.13
£000
Group
31.3.12
£000
Company
31.3.13
£000
Company
31.3.12
£000
Note
15
17
18
19
34
22
11
20
21
22
23
24
25
25
34
Non-current assets
Investment properties
Owner occupied property, plant and equipment
Investment in subsidiaries
Investment in joint ventures
Derivative financial instruments
Trade and other receivables
Deferred tax asset
Total non–current assets
Current assets
Land, developments and trading properties
Available-for-sale investments
Trade and other receivables
Corporation tax receivable
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Corporate tax payable
Borrowings
Non-current liabilities
Borrowings
Derivative financial instruments
Total liabilities
Net assets
Equity
Called-up share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Other reserves
Retained earnings
Equity attributable to equity holders of the parent
Non-controlling interests
Total equity
The financial statements were approved by the Board of Directors on 23 May 2013.
Michael Slade
Director
Tim Murphy
Director
312,026
326,876
1,153
–
49,890
146
6,325
10,381
379,921
92,874
5,997
38,017
–
36,863
173,751
553,672
1,251
–
40,592
629
–
9,050
378,398
99,741
7,003
23,076
1,178
35,411
166,409
544,807
–
980
36,945
15
52
–
577
38,569
–
1,107
31,173
165
340
–
463
33,248
–
–
101
–
326,244
324,673
–
24,035
350,279
388,848
1,250
26,355
352,379
385,627
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t
s
(34,929)
(24,807)
(153,580)
(146,865)
(70)
(39,295)
(74,294)
–
(59,203)
(84,010)
–
–
(6,848)
(5,546)
(160,428)
(152,411)
(220,446)
(203,992)
(5,164)
(225,610)
(299,904)
(3,075)
(207,067)
(291,077)
(4,457)
(1,027)
(5,484)
–
(837)
(837)
(165,912)
(153,248)
253,768
253,730
222,936
232,379
1,447
98,678
10,593
7,478
291
135,211
253,698
70
1,447
98,678
2,612
7,478
291
143,111
253,617
113
1,447
98,678
–
7,478
1,987
113,346
222,936
–
1,447
98,678
–
7,478
1,987
122,789
232,379
–
253,768
253,730
222,936
232,379
69
helical bar plc 2013
consolidated and company cash flow
statements
For the year to 31 March 2013
Group
31.3.13
£000
Group
31.3.12
£000
Company
31.3.13
£000
Company
31.3.12
£000
Cash flows from operating activities
Profit/(loss) before tax
Depreciation
Revaluation gain on investment properties
Loss on sales of investment properties
Net financing costs/(income)
Change in value of derivative financial instruments
Share based payment charge
Share of results of joint ventures
Fair value adjustment for disposal of interest in subsidiary
Foreign exchange movement
Other non-cash items
Cash inflow/(outflow) 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 inflow/(outflow) generated from operations
Finance costs
Finance income
Tax received/(paid)
Cash flows from operating activities
Cash flows from investing activities
Purchase of investment property
Sale of investment property
Cost of acquiring derivative financial instruments
Cost of cancelling interest rate swap
Investment in subsidiaries
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
5,009
340
(3,723)
2,388
8,690
2,573
1,864
(3,854)
–
(211)
–
13,076
(21,470)
9,520
10,637
11,763
(13,104)
887
732
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
–
(11,485)
(12,496)
278
6,830
(5,141)
(102,750)
21,910
–
(1)
–
(6,622)
751
–
–
(242)
50,434
(1,276)
(3,102)
–
–
2,098
500
7
(63)
Net cash generated from/(used in) investing activities
10,655
(54,152)
(287)
290
–
–
(1,565)
478
–
–
–
32
–
(1,052)
(1,571)
101
7,715
5,193
(951)
3,217
(1,886)
380
5,573
–
–
–
–
(6,622)
–
–
–
–
(163)
(6,785)
Cash flows from financing activities
Borrowings drawn down
Borrowings repaid
Equity dividends paid
Net cash (used in)/generated from financing 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
70
33,682
206,637
11,298
(37,001)
(149,501)
(6,134)
(9,453)
1,480
(28)
35,411
36,863
(5,708)
51,428
4,106
(22)
31,327
35,411
(6,240)
(6,134)
(1,076)
(2,288)
(32)
26,355
24,035
(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
(14,499)
(5,708)
(13,757)
4,123
(11)
22,243
26,355
consolidated and company statements
of changes in equity
For the year to 31 March 2013
helical bar plc 2013
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Group
At 31 March 2011
Total comprehensive income
Revaluation surplus
Realised on disposals
Performance share plan
Dividends paid
At 31 March 2012
Total comprehensive income
Revaluation surplus
Realised on disposals
Performance share plan
Dividends paid
Share
premium
£000
Revaluation
reserve
£000
Capital
redemption
reserve
£000
Other
reserves
£000
Retained
earnings
£000
Non-
controlling
interests
£000
Share
capital
£000
1,447
–
–
–
–
–
98,678
3,495
7,478
291
143,886
–
–
–
–
–
–
3,664
(4,547)
–
–
–
–
–
–
–
–
–
–
–
–
4,015
(3,664)
4,547
35
(5,708)
1,447
98,678
2,612
7,478
291
143,111
–
–
–
–
–
–
–
–
–
–
–
3,723
4,258
–
–
–
–
–
–
–
–
–
–
–
–
4,351
(3,723)
(4,258)
1,864
(6,134)
Total
£000
255,397
4,006
–
–
35
(5,708)
253,730
4,308
–
–
1,864
(6,134)
122
(9)
–
–
–
–
113
(43)
–
–
–
–
At 31 March 2013
1,447
98,678
10,593
7,478
291
135,211
70
253,768
For a breakdown of Total comprehensive income see the Consolidated Statement of Comprehensive Income on page 69.
Included within changes in equity are net transactions with owners of £4,270,000 (2012: £5,673,000) made up of: the performance share plan charge
of £1,864,000 (2012: £35,000), dividends paid of £6,134,000 (2012: £5,708,000).
The adjustment to retained earnings of £1,864,000 adds back the share–based payments charge (2012: £35,000), in accordance with IFRS 2 Share–
Based Payments.
Company
At 31 March 2011
Total comprehensive expense
Dividends paid
At 31 March 2012
Total comprehensive expense
Dividends paid
At 31 March 2013
Share
capital
£000
1,447
–
–
Share
premium
£000
98,678
–
–
1,447
98,678
–
–
–
–
1,447
98,678
Revaluation
reserve
£000
Capital
redemption
reserve
£000
Other
reserves
£000
Retained
earnings
£000
Total
£000
–
–
–
–
–
–
–
7,478
1,987
137,831
247,421
–
–
–
–
(9,334)
(5,708)
(9,334)
(5,708)
7,478
1,987
122,789
232,379
–
–
–
–
(3,309)
(6,134)
(3,309)
(6,134)
7,478
1,987
113,346
222,936
Total comprehensive expense is made up of the loss after tax of £3,309,000 (2012: £9,334,000).
Included within changes in equity are net transactions with owners of £6,134,000 (2012: £5,708,000) made up of dividends paid of £6,134,000 (2012:
£5,708,000).
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/deficit 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.
71
helical bar plc 2013
notes to the financial statements
1. Basis of preparation
These financial 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 financial statements have been prepared in Sterling (rounded to the nearest thousand) under the historical cost convention as modified by the
revaluation of investment properties, available-for-sale investments and derivative financial 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 2012, as
amended to reflect any new Standards, Amendments to Standards and interpretations which are mandatory for the year ended 31 March 2013.
Status of Adoption of Significant New or Amended IFRS Standards or Interpretations
IAS 12, Income Taxes - Deferred Tax: Recovery of underlying assets;
IFRIC 18 Transfer of Assets from Customers;
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 benefits (effective 1 January 2013);
IAS 27 (revised): Separate financial statements (effective 1 January 2013);
IAS 28 (revised): Associates and joint ventures (effective 1 January 2013);
IFRS 7 (amended): Disclosures – transfer of financial assets (effective 1 January 2013);
IFRS 9: Financial Instruments: Classification and measurement;
Mandatory effective date and transition disclosures – amendments to IFRS 9 and IFRS 7 (effective 1 January 2015);
IFRS 10: Consolidated financial 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);
IFRS 13: Fair value measurement (effective 1 January 2013); and
Annual improvements to IFRSs 2011 cycle (effective 1 January 2013).
The directors do not expect that the adoption of these Standards and Interpretations in future periods will have a material impact on the financial
statements of the Group except for IFRS13, which will impact the disclosure of fair value measurements.
2. Segmental information
IFRS 8 requires the identification of the Group’s operating segments which are defined 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,
• Developments, which include sites, developments in the course of construction, completed developments available for sale, pre-sold developments
and interest in third party developments.
Revenue
Rental income
Development property income
Trading property sales
Other revenue
Total revenue
Investment
and trading
Year ended
31.3.13
£000
Developments
Year ended
31.3.13
£000
Total
Year ended
31.3.13
£000
Investment
and trading
Year ended
31.3.12
£000
Developments
Year ended
31.3.12
£000
Total
Year ended
31.3.12
£000
24,032
–
122
1,003
25,157
1,784
38,498
–
–
25,816
38,498
122
1,003
40,282
65,439
21,391
–
10,131
113
31,635
1,667
19,666
–
–
21,333
23,058
19,666
10,131
113
52,968
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 £nil (2012: £1,735,000), revenue from the sale of goods of £31,193,000 (2012:
£25,652,000), revenue from services of £8,430,000 (2012: £2,523,000), and rental income of £25,816,000 (2012: £23,058,000).
All revenues are within the UK other than rental income from development properties in Poland of £1,104,000 (2012: £1,052,000) and £671,000 (2012:
£2,965,000) of development income derived from the Group’s operations in Poland.
72
notes to the financial statements
helical bar plc 2013
Profit before tax
Net rental income
Development property profit
Trading property loss
Share of results of joint ventures
Gain on sale and revaluation of investment properties
Other operating (expense)/income
Gross profit
Administrative expenses
Finance income
Finance costs
Change in fair value of derivative financial instruments
Foreign exchange gains/(losses)
Profit before tax
Net assets
Investment properties
Land, development and trading properties
Investment in joint ventures
Owner occupied property, plant and equipment
Derivative financial instruments
Deferred tax assets
Available-for-sale investments
Trade and other receivables
Corporation tax receivable
Cash and cash equivalents
Total assets
Liabilities
Net assets
Investment
and trading
Year ended
31.3.13
£000
18,232
–
(1)
4,323
1,335
23,889
Developments
Year ended
31.3.13
£000
Total
Year ended
31.3.13
£000
1,346
6,956
–
(469)
–
19,578
6,956
(1)
3,854
1,335
Investment
and trading
Year ended
31.3.12
£000
Developments
Year ended
31.3.12
£000
Total
Year ended
31.3.12
£000
16,740
1,136
17,876
–
–
2,616
3,288
655
–
(144)
–
7,833
31,722
22,644
1,647
(547)
31,175
(14,920)
887
(9,577)
(2,573)
17
5,009
655
–
2,472
3,288
24,291
113
24,404
(7,800)
583
(8,409)
(306)
(1,064)
7,408
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t
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31.3.13
£000
312,026
2,528
41,687
356,241
31.3.13
£000
31.3.13
£000
31.3.12
£000
31.3.12
£000
31.3.12
£000
–
312,026
326,876
–
326,876
90,346
8,203
98,549
92,874
49,890
2,638
31,919
97,103
8,673
99,741
40,592
454,790
361,433
105,776
467,209
1,153
146
10,381
5,997
44,342
–
36,863
553,672
(299,904)
253,768
1,251
629
9,050
7,003
23,076
1,178
35,411
544,807
(291,077)
253,730
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.
73
helical bar plc 2013
notes to the financial statements
3. Net rental income
Gross rental income
Rents payable
Property overheads
Net rental income
Net rental income attributable to profit share partner
Group share of net rental income
Year ended
31.3.13
£000
Year ended
31.3.12
£000
25,816
(342)
(5,186)
20,288
(710)
19,578
23,058
(418)
(3,938)
18,702
(826)
17,876
Property overheads include lettings costs, vacancy costs and bad debt provisions.
The amounts above include gross rental income from investment properties of £24,032,000 (2012: £21,391,000) and net rental income of
£18,232,000 (2012: £16,740,000).
No contingent rental income was received in the year (2012: £nil).
4. Development property profit
Development property income
Cost of sales
Sales expenses
Provision against book values
Development property profit
Year ended
31.3.13
£000
Year ended
31.3.12
£000
38,498
(30,420)
(462)
(660)
6,956
19,666
(13,935)
(565)
(4,511)
655
In accordance with IAS27, development property income for the year to 31 March 2012 includes a £4.3m gain resulting from the sale of 50% of a fully
owned subsidiary (see note 19), which we considered to be part of the core business of the Group.
5. Trading property loss
Trading property sales
Cost of sales
Sales expenses
Trading property loss
Year ended
31.3.13
£000
Year ended
31.3.12
£000
122
(110)
(13)
(1)
10,131
(10,131)
–
–
6. Net gain on sale and revaluation of investment properties
Net proceeds from the sale of investment properties
Book value (note 15)
Tenants incentives on sold investment properties
Loss on sale of investment properties
Revaluation surplus on investment properties
Gain on sale and revaluation of investment properties
74
Year ended
31.3.13
£000
Year ended
31.3.12
£000
21,910
(23,865)
(433)
(2,388)
3,723
1,335
50,427
(50,768)
(35)
(376)
3,664
3,288
notes to the financial statements
helical bar plc 2013
7. Administrative expenses
Administrative expenses
Operating profit is stated after the following items that are contained within administrative expenses:
Depreciation
– owner occupied property, plant and equipment
Share-based payments charge
Auditors’ remuneration:
Audit fees
– audit of parent company and consolidated financial statements
– audit of company’s subsidiaries
– interim audit of consolidated financial statements
– internal controls review
8. Staff costs
Staff costs during the year:
– wages and salaries
– social security costs
– other pension costs
Year ended
31.3.13
£000
Year ended
31.3.12
£000
(14,920)
(7,800)
340
1,864
155
58
41
–
309
35
145
57
40
16
Year ended
31.3.13
£000
Year ended
31.3.12
£000
8,627
1,420
116
10,163
4,615
657
136
5,408
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Details of the remuneration of Directors amounting to £5,560,000 (2012: £2,477,000) are included in the Directors’ Remuneration Report on pages 54
to 62. The amount of the share-based payments charge relating to share awards made to Directors is £1,715,000 (2012: £29,000).
Included within wages and salaries are directors’ bonuses of £3,051,000 (2012: £220,000) as discussed in the Remuneration Report on page 58.
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 40 (2012: 36) of which 29 are UK staff and 11
are based in Poland.
Of the staff costs of £10,163,000 (2012: £5,408,000), £9,713,000 is included within administrative expenses (2012: £5,007,000) £331,000 is included
within development costs (2012: £401,000) and £119,000 is included in Other operating income/expense (2012: £nil).
Within administrative costs is the share based payment charge for the year of £1,864,000 (2012: £35,000) which is not included in the staff costs above.
9. Finance costs and finance 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
31.3.13
£000
Year ended
31.3.12
£000
(10,445)
(10,808)
(1,658)
2,526
(9,577)
887
887
(901)
3,300
(8,409)
583
583
On projects where specific 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 2.87% (2012: 3.35%). Where general finance has been used to fund the acquisition and construction of
properties the rate used was a weighted average of the financing costs for the applicable borrowings of 4.06% (2012: 4.64%).
75
helical bar plc 2013
notes to the financial statements
10. Taxation on profit on ordinary activities
The tax credit is based on the profit for the year and represents:
United Kingdom corporation tax at 24%
– Group corporation tax
– adjustment in respect of prior periods
– overseas tax
Current tax charge
Deferred tax at 23%/24%
– capital allowances
– tax losses
– other temporary differences
Deferred tax credit
Tax credit on profit 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:
Profit on ordinary activities before tax
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23%/24%
Effect of:
– expenses not deductible for tax purposes
– income not subject to UK corporation tax
– capital allowances not reflected through deferred tax
– tax movements on share awards
– additional tax losses recognised/(unavailable)
– operating profit of joint ventures
– prior year adjustment
– revaluation surplus not recognised through deferred tax
– chargeable gain in excess of loss on investment property
– overseas tax
– other temporary differences
Total tax credit for the period
Year ended
31.3.13
£000
Year ended
31.3.12
£000
(435)
–
(84)
(519)
46
163
1,125
1,334
815
–
153
(163)
(10)
348
1,045
(1,225)
168
158
Year ended
31.3.13
£000
Year ended
31.3.12
£000
5,009
(1,152)
(1,308)
311
–
616
7,408
(1,778)
(506)
1,695
475
(23)
1,411
(1,442)
876
–
856
(510)
(84)
(201)
815
580
153
880
(82)
(163)
369
158
Note: all deferred tax balances have been calculated at the rate of corporation tax for the year to 31 March 2013 of 23%. 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.
76
notes to the financial statements
helical bar plc 2013
11. Deferred tax
Deferred tax provided for in the financial statements is set out below:
Capital allowances
Tax losses
Other temporary differences
Deferred tax asset
Group
31.3.13
£000
(2,421)
10,734
2,068
10,381
Group
31.3.12
£000
(2,467)
10,572
945
9,050
Company
31.3.13
£000
Company
31.3.12
£000
(29)
–
606
577
–
–
463
463
Other temporary differences represent deferred tax assets arising from the recognition of the fair value of derivative financial instruments and future tax
relief available to the Group from capital allowances and when share awards vest.
The Group contains entities with tax losses for which no deferred tax asset is recognised. The total unrecognised losses amount to approximately
£8.4m. A deferred tax asset has not been recognised because the entities in which the losses have been generated either do not have forecast taxable
profits or the losses have restrictions whereby their utilisation is considered to be unlikely.
If upon sale of the investment properties the Group retained all the capital allowances, the deferred tax provision in respect of capital allowances of
£2.4m (2012: £2.5m) would be released and further capital allowances of £9.5m (2012: £7.7m) would be available to reduce future tax liabilities.
12. Dividends paid and payable
Attributable to equity share capital
Ordinary
– interim paid of 1.85p (2012: 1.75p) per share
– prior period final paid of 3.40p (2012: 3.15p) per share
Total dividends paid and payable in year – 5.25p (2012: 4.90p) per share
Year ended
31.3.13
£000
Year ended
31.3.12
£000
2,161
3,973
6,134
2,044
3,664
5,708
An interim dividend of 1.85p was paid on 28 December 2012 to shareholders on the register on 30 November 2012. The final dividend of 3.70p, if
approved at the AGM on 24 July 2013, will be paid on 26 July 2013 to shareholders on the register on 5 July 2013. This final dividend, amounting to
£4,323,000, has not been included as a liability as at 31 March 2013, 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 financial
statements. The loss for the year of the Company was £3,309,000 (2012: £9,334,000).
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notes to the financial 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 effect of all dilutive options and awards.
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 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
31.3.13
000
Year ended
31.3.12
000
118,138
118,138
(1,292)
(1,292)
116,846
116,846
34
1,349
34
63
Weighted average ordinary shares in issue for calculation of diluted and diluted EPRA earnings per share
118,229
116,943
Earnings used for calculation of basic and diluted earnings per share
Basic earnings per share
Diluted earnings per share
Earnings 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 profit on disposal of investment properties
Trading property loss
Fair value movement on derivative financial instruments
Share of fair value movements on derivative financial instruments in the results of joint ventures
Deferred tax
Performance related awards
Earnings used for calculation of adjusted diluted EPRA earnings per share
Performance related awards
Earnings used for calculation of diluted EPRA earnings per share
Adjusted diluted EPRA earnings per share
Diluted EPRA earnings per share
£000
5,867
£000
7,575
5.0p
6.5p
5.0p
6.5p
£000
5,867
(1,335)
(3,109)
(549)
1
2,573
(32)
(572)
6,828
9,672
(6,828)
2,844
8.2p
2.4p
£000
7,575
(3,288)
(581)
(90)
–
306
409
(323)
415
4,423
(415)
4,008
3.8p
3.4p
The earnings used for calculation of diluted EPRA earnings per share includes net rental income and development property profits but excludes trading
property losses.
78
notes to the financial statements
helical bar plc 2013
15. Investment properties
Group
Fair value at 1 April
Property acquisitions
Disposals
Revaluation surplus/(deficit)
Revaluation surplus/(deficit) attributable to profit
share partner
Freehold
31.3.13
£000
Leasehold
31.3.13
£000
Total
31.3.13
£000
Freehold
31.3.12
£000
Leasehold
31.3.12
£000
292,276
34,600
326,876
4,299
842
5,141
232,326
102,238
(13,069)
(10,796)
(23,865)
(47,158)
4,419
151
(696)
–
3,723
151
5,516
(646)
39,550
512
(3,610)
(1,852)
–
Total
31.3.12
£000
271,876
102,750
(50,768)
3,664
(646)
Fair value at 31 March
288,076
23,950
312,026
292,276
34,600
326,876
Interest capitalised during the year in respect of the refurbishment of investment properties amounted to £nil (2012: £nil).
Interest capitalised in respect of the refurbishment of investment properties is included in investment properties to the extent of £5,767,000 (2012:
£5,767,000).
Investment properties with a total fair value of £312,025,000 (2012: £326,875,000) were held as security against borrowings.
Properties are stated at market value as at 31 March 2013, valued by professionally qualified 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.
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The investment properties have been valued at 31 March 2013 as follows:
Cushman & Wakefield LLP
Directors’ valuation
The historical cost of investment property is £298,878,000 (2012: £321,970,000).
31.3.13
£000
31.3.12
£000
312,025
321,875
1
5,001
312,026
326,876
79
helical bar plc 2013
notes to the financial 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 five years
More than five years
The Company has no operating lease arrangements.
Group
31.3.13
£000
24,281
64,729
57,966
Group
31.3.12
£000
24,253
68,716
72,166
146,976
165,135
17. Owner occupied property, plant and equipment – Group
Cost at 1 April
Additions at cost
Disposals
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
Short
leasehold
improvements
31.3.13
£000
Plant and
equipment
31.3.13
£000
2,071
–
–
2,071
1,096
187
–
1,283
788
686
242
(103)
825
410
153
(103)
460
365
Short
leasehold
improvements
31.3.12
£000
Plant and
equipment
31.3.12
£000
2,071
–
–
2,071
897
199
–
1,096
975
727
63
(104)
686
404
110
(104)
410
276
Total
31.3.13
£000
2,757
242
(103)
2,896
1,506
340
(103)
1,743
1,153
Total
31.3.12
£000
2,798
63
(104)
2,757
1,301
309
(104)
1,506
1,251
Plant and equipment include vehicles, fixtures and fittings and other office equipment.
All short leasehold improvements, plant and equipment relate to the Company except for plant and equipment with a net book value of £173,000 as at
31 March 2013 (2012: £144,000).
18. Investment in subsidiaries
Group
31.3.13
£000
Group
31.3.12
£000
Company
31.3.13
£000
–
–
–
–
–
–
–
–
31,173
6,772
(1,000)
36,945
Company
31.3.12
£000
30,994
179
–
31,173
At 1 April
Acquired during year
Share capital repaid by subsidiary
At 31 March
80
notes to the financial statements
helical bar plc 2013
The Company’s principal subsidiary undertakings, all of which have been consolidated, are:
Nature of business
Percentage of ordinary share capital held
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 (Ashford) Ltd
Investment
Investment
Investment
Development
Development
Investment
Investment
Helical Bar Developments (South East) Ltd
Development
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 (Glasgow) Ltd
Helical (Hailsham) Ltd
Helical (Hedge End) Ltd
Helical (Liphook) Ltd
Helical (Merlin Park) Ltd
Helical (Milton) Ltd
Helical Retail Ltd
Helical Retail (RBS) Ltd*
Helical (Sevenoaks) 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
Sutton-in-Ashfield LP*
Investment
Investment
Development
Management Services
Investment
Development
Investment
Investment
Development
Investment
Investment
Investment
Investment
Investment (Jersey)
Investment
Development
Development
Investment/Trading
Development
Trading
Development (Jersey)
Investment
Development
Development
Development
Investment
Development
Development
Investment
Development (Poland)
Investment
Investment
Investment
Investment
fi
n
a
n
c
i
a
l
s
t
a
t
e
m
e
n
t
s
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%
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.
81
helical bar plc 2013
notes to the financial statements
19. Investment in joint ventures
Investment
& trading
31.3.13
£000
Development
31.3.13
£000
Total
31.3.13
£000
Investment
& trading
31.3.12
£000
Development
31.3.12
£000
Total
31.3.12
£000
Summarised statements of consolidated income
Revenue
Gross rental income
Rents payable
Property overheads
Net rental income
Gain on revaluation of investment properties
Other operating income/(expense)
Administrative expenses
Finance costs
Finance income
Change in fair value movement of derivative
financial instruments
Profit/(loss) before tax
Tax
Profit/(loss) after tax
Summarised balance sheets
Non-current assets
Investment properties
Owner occupied property, plant and equipment
Current assets
Land, development and trading properties
Held for sale investments
Trade and other receivables
Cash
Current liabilities
Trade and other payables
Borrowings
Non-current liabilities
Borrowings
Derivative financial instruments
Net assets
5,629
5,629
(802)
(437)
4,390
3,109
58
(623)
(2,189)
5
32
4,782
(505)
4,277
94,962
25
94,987
–
–
1,088
4,713
5,801
564
564
–
(73)
491
–
(816)
(79)
(80)
61
–
(423)
–
(423)
6,193
6,193
(802)
(510)
4,881
3,109
(758)
(702)
6,584
6,306
(848)
(592)
4,866
581
(40)
(127)
(2,269)
(1,974)
66
32
4,359
(505)
3,854
5
(790)
2,601
15
2,616
–
–
–
94,962
67,187
25
28
94,987
67,215
23,797
23,797
4,792
962
5,080
4,792
2,050
9,793
34,631
40,432
–
–
2,510
3,240
5,750
339
339
–
(145)
194
–
(477)
–
(249)
7
381
(144)
–
(144)
–
–
–
15,709
4,792
130
387
6,923
6,645
(848)
(737)
5,060
581
(437)
(127)
(2,223)
12
(409)
2,457
15
2,472
67,187
28
67,215
15,709
4,792
2,640
3,627
21,018
26,768
(11,257)
(24,928)
(36,185)
(3,549)
(720)
–
(720)
–
(8,745)
(1,500)
(12,294)
(1,500)
(11,977)
(24,928)
(36,905)
(3,549)
(10,245)
(13,794)
(46,094)
(1,030)
(47,124)
41,687
(1,500)
(47,594)
(36,436)
(2,100)
(38,536)
–
(1,500)
8,203
(1,030)
(48,624)
49,890
(1,061)
(37,497)
31,919
–
(2,100)
8,673
(1,061)
(39,597)
40,592
The cost of the Company’s investment in joint ventures was £15,000 (2012: £165,000).
The directors’ valuation of the land, trading and development stock shows a surplus of £1,028,000 above book value (2012: £1,435,000).
82
notes to the financial statements
helical bar plc 2013
At 31 March 2013 the Group and the Company had interests in the following joint venture companies:
Abbeygate Helical (Leisure Plaza) Ltd
Abbeygate Helical (Winterhill) Ltd
Abbeygate Helical (C4.1) LLP
Shirley Advance LLP
King Street Developments (Hammersmith) Ltd
HP Properties Ltd
Barts Two Investment Property Ltd
Helical Sosnica Sp. zoo.
207 Old Street Unit Trust
211 Old Street Unit Trust
Old Street Retail Unit Trust
City Road (Jersey) Ltd
Country of
incorporation
Class of share
capital held
Proportion
held Group
Proportion
held Company
Nature of
business
United Kingdom
Ordinary
United Kingdom
Ordinary
United Kingdom
United Kingdom
United Kingdom
British Virgin Islands
Jersey
Poland
Jersey
Jersey
Jersey
Jersey
n/a
n/a
Ordinary
Ordinary
Ordinary
Ordinary
n/a
n/a
n/a
Ordinary
50%
50%
50%
50%
50%
60%
33%
50%
33%
33%
33%
33%
50% Development
50% Development
50% Development
– Development
– Development
–
–
–
–
–
–
–
Investment
Investment
Development
Investment
Investment
Investment
Investment
During the year to 31 March 2013 the Group acquired a 33% stake in 207 Old Street Unit Trust, 211 Old Street Unit Trust, Old Street Retail Unit Trust
and City Road (Jersey) Ltd all of which own investment properties in the UK. The results of these entities since acquisition have been included above.
During the year to 31 March 2012 the Group sold 50% of its interest in its subsidiary Helical Sosnica Sp. zoo. for nominal consideration. 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 financial 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 2 years. The Group lost control of £65m of assets and £65m of liabilities as a result of the sale of its interest in
Helical Sosnica Sp. zoo. At 31 March 2013 Helical Sosnica Sp zoo held a development property the fair value of which the directors believe to be £105,802,000
(of which Helical’s share is £52,901,000) and a bank loan of £49,830,000 (of which Helical’s share is £24,915,000) repayable in September 2015.
20. Land, developments and trading properties
fi
n
a
n
c
i
a
l
s
t
a
t
e
m
e
n
t
s
Group
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
Development
properties
31.3.13
£000
97,103
20,164
2,526
Trading
stock
31.3.13
£000
2,638
5
–
Total
31.3.13
£000
99,741
20,169
2,526
Development
properties
31.3.12
£000
137,254
21,653
3,300
Trading
stock
31.3.12
£000
10,288
2,481
–
Total
31.3.12
£000
147,542
24,134
3,300
(28,919)
(110)
(29,029)
(58,101)
(10,131)
(68,232)
127
(655)
–
(5)
127
(660)
90,346
2,528
92,874
(2,492)
(4,511)
97,103
–
–
2,638
(2,492)
(4,511)
99,741
Development
properties
31.3.13
£000
Development
properties
31.3.12
£000
101
–
–
(101)
–
1,125
51
(1,020)
(55)
101
The directors’ valuation of trading and development stock shows a surplus of £48,837,000 above book value (2012: £33,107,000).
Interest capitalised in respect of the development of sites is included in stock to the extent of £7,010,000 (2012: £6,379,000).
Land, developments and trading properties with carrying values totalling £82,144,000 (2012: £83,493,000) were held as security against borrowings.
83
helical bar plc 2013
notes to the financial statements
21. Available–for–sale investments
At 1 April
Additions
Impairment in the year
Fair value adjustments
At 31 March
Current
31.3.13
£000
7,003
298
(1,304)
–
5,997
Current
31.3.12
£000
10,505
–
(3,521)
19
7,003
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 an available-for-sale investment and 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.
The Group does not consider that it has significant influence over this company despite having 20% of the equity as another party owns a majority
shareholding and the Group does not have a representative on the Board of the company.
Of the movement in the fair value of the loan and equity and the associated deferred tax movement, the impairment of £1,304,000 (2012: £3,521,000)
has been recognised in Other Comprehensive Income.
22. Trade and other receivables
Trade receivables
Amounts owed by joint venture undertakings
Amounts owed by subsidiary undertakings
Other receivables
Prepayments and accrued income
Group
31.3.13
£000
15,238
25,568
–
292
3,244
44,342
Group
31.3.12
£000
8,025
12,457
Company
31.3.13
£000
Company
31.3.12
£000
418
20,803
428
6,658
–
304,392
316,935
1,010
1,584
178
453
346
306
23,076
326,244
324,673
Included within Trade receivables of the Group at 31 March 2013 is £6,325,000 due in 2015 and 2016 which is shown as a non-current asset in the
Balance Sheet.
Receivables
Fully performing
Past due < 3 months
Past due > 3 months
Total receivables being financial assets
Total receivables being non-financial assets
Total receivables
Group
31.3.13
£000
Group
31.3.12
£000
Company
31.3.13
£000
Company
31.3.12
£000
42,195
21,419
325,665
324,136
311
458
42,964
1,378
44,342
231
737
–
–
–
–
22,387
325,665
324,136
689
579
537
23,076
326,244
324,673
Past due receivables relate to a number of independent customers for whom there is no recent history of default. Against trade receivables, Helical held
£1.0m of rental deposits at 31 March 2013 (2012: £0.9m).
84
notes to the financial statements
helical bar plc 2013
Movements in the provision for impairment of trade receivables are as follows:
Gross receivables being financial assets
Provisions for receivables impairment
Net receivables being financial assets
Group
31.3.13
£000
Group
31.3.12
£000
Company
31.3.13
£000
Company
31.3.12
£000
43,414
22,784
325,665
324,136
(450)
(397)
–
–
42,964
22,387
325,665
324,136
Receivables written off during the year as uncollectable
616
465
–
–
23. Cash and cash equivalents
Rent deposits and cash held at managing agents
Cash held by solicitors
Cash held in blocked accounts
Cash deposits
24. Trade and other payables
Trade payables
Social security costs and other taxation
Amounts owed to subsidiary undertakings
Other payables
Accruals
Deferred income
25. Borrowings
Current borrowings
Bank loans repayable within:
– one to two years
– two to three years
– three to four years
– four to five years
Non-current borrowings
Group
31.3.13
£000
2,788
–
7,327
26,748
36,863
Group
31.3.13
£000
7,599
2,988
–
4,073
15,293
4,976
34,929
Group
31.3.13
£000
39,295
10,811
63,009
99,301
47,325
220,446
Group
31.3.12
£000
2,438
1,115
3,578
28,280
35,411
Group
31.3.12
£000
5,274
1,231
Company
31.3.13
£000
Company
31.3.12
£000
–
–
–
–
–
–
24,035
24,035
26,355
26,355
fi
n
a
n
c
i
a
l
s
t
a
t
e
m
e
n
t
s
Company
31.3.13
£000
Company
31.3.12
£000
233
–
270
–
–
152,435
145,120
4,458
8,692
5,152
71
841
–
79
1,396
–
24,807
153,580
146,865
Group
31.3.12
£000
59,203
71,551
656
21,600
110,185
203,992
Company
31.3.13
£000
Company
31.3.12
£000
6,848
5,546
–
4,457
–
–
4,457
–
–
–
–
–
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 £394,169,000 (2012: £410,368,000). 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 £48,314,000 (2012: £40,036,000).
85
helical bar plc 2013
notes to the financial statements
26. Financing and financial instruments
The policies for dealing with liquidity and interest rate risk are noted in the Strategy and Performance Review on pages 8 to 11.
Bank overdraft and loans – maturity
Due after more than one year
Due within one year
Group
31.3.13
£000
Group
31.3.12
£000
220,446
203,992
39,295
59,203
259,741
263,195
The Group has various undrawn committed borrowing facilities. The facilities available at 31 March 2013 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 two years but not more than three years
Expiring in more than three years but not more than four years
Expiring in more than four years but not more than five 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
%
Expiry
3.958
4.500
–
5.645
6.240
3.972
–
4.240
4.117
4.340
3.312
Jan 2015
Jan 2015
–
Oct 2014
Dec 2013
Jan 2016
–
Nov 2017
May 2015
Sep 2015
Oct 2016
31.3.13
£000
50,000
11,873
–
6,690
10,120
9,172
–
26,400
21,375
135,631
124,110
259,741
Group
31.3.13
£000
1,877
1,694
6,074
25,811
–
35,456
%
Expiry
3.950
4.500
6.401
5.645
6.240
3.972
5.300
–
–
4.804
3.467
Jan 2015
Jan 2015
Oct 2012
Oct 2014
Dec 2013
Jan 2016
Apr 2012
–
–
Mar 2014
Oct 2014
Group
31.3.12
£000
16,441
777
–
–
21,091
38,309
31.3.12
£000
50,000
12,250
28,500
6,690
10,120
9,172
3,570
–
–
120,302
142,893
263,195
Changes in fixed 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 2013 and 31 March 2012 the Company’s borrowings consist of fixed rate borrowings of £6,690,000 at 5.645% (2012: 5.645%)
expiring in October 2014 with the remainder being floating rate borrowings.
In addition to the fixed rate borrowings above, the Group has a £75m interest rate swap at 2.000% starting in January 2015 and expiring in January
2020.
86
notes to the financial statements
helical bar plc 2013
Economic hedging
In addition to the fixed rates, borrowings are also hedged by the following financial instruments:
Instrument
Current:
– cap
– cap
– cap
– cap
– cap
– cap
– cap
Value
£000
40,950
50,000
25,000
50,000
25,000 – 75,000
7,200
10,613 – 11,037
Rate
%
6.000
4.000
4.000
4.000
4.000
4.000
4.000
Start
Expiry
May 2008
May 2013
Apr 2011
Apr 2015
Apr 2011
Apr 2016
Jul 2013
Jul 2016
Apr 2015
Jan 2017
Jan 2012
Oct 2016
Jan 2015
Jan 2016
Where a range in capped values is shown, these reflect stepped increases over the life of the cap.
Gearing
Total debt
Cash
Net debt
Group
31.3.13
£000
Group
31.3.12
£000
259,741
263,195
(36,863)
(35,411)
222,878
227,784
fi
n
a
n
c
i
a
l
s
t
a
t
e
m
e
n
t
s
Net debt excludes the Group’s share of debt in joint ventures of £48,314,000 (2012: £40,036,000), and cash of £9,793,000 (2012: £3,627,000).
Net assets
Gearing
27. Share capital
Authorised
Group
31.3.13
£000
Group
31.3.12
£000
253,768
253,730
88%
90%
31.3.13
£000
39,577
39,577
31.3.12
£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.
Allotted, called up and fully paid
– 118,137,522 ordinary shares of 1p each
– 212,145,300 deferred shares of 1⁄8p each
31.3.13
£000
31.3.12
£000
1,182
265
1,447
1,182
265
1,447
87
helical bar plc 2013
notes to the financial statements
Ordinary shares
At 1 April and 31 March
Deferred shares
At 1 April and 31 March
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.
Shares
in issue
31.3.13
Number
Share
capital
31.3.13
£000
Shares
in issue
31.3.12
Number
Share
capital
31.3.12
£000
118,137,522
1,182
118,137,522
1,182
212,145,300
265
212,145,300
265
The Group sets the amount of capital in proportion to its overall financing 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 defined as being issued share capital, retained earnings, revaluation reserve and other reserves (2013: £246,220,000; 2012: £246,139,000). The
Group continually monitors its gearing level to ensure that it is appropriate. Gearing decreased from 90% to 88% in the year due to the Group selling
some of its non-core properties.
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 and 31 March 2013 there were 34,713 unexercised options over new ordinary 1p shares in the Company. 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 2012: nil).
The Company uses a stochastic valuation model to value the share options.
Summary of share options
At 1 April
Options granted
Options exercised
Option expired/lapsed
At 31 March
Weighted
average
exercise
Price
31.3.13
Number
31.3.13
34,713
259.25
Weighted
average
exercise
price
31.3.12
–
Number
31.3.12
–
–
–
–
–
–
–
34,713
259.25
–
–
–
–
34,713
259.25
34,713
259.25
The share option awards outstanding at 31 March 2013 had a weighted average remaining contractual life of 1 year 3 months.
The outstanding share options are all exercisable at 259.25p per share.
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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 lapsed during the period
Awards made during the period
Outstanding at end of period
2013
Weighted
average
award
value
277p
300p
167p
211p
Awards
7,230,850
(2,133,222)
4,212,534
9,310,162
Awards
6,249,364
(1,747,441)
2,728,927
7,230,850
The performance share plan awards outstanding at 31 March 2013 had a weighted average remaining contractual life of 1 year 5 months.
The inputs into the stochastic model of valuation of the PSP awards made in the year to 31 March 2013 were as follows:
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk free rate
Expected dividends
2013
203.4p
–
n/a
3 years
n/a
3.07%
2012
215.2p
–
n/a
3 years
n/a
1.88%
2012
Weighted
average
award
value
284p
276p
259p
277p
2011
285.1p
–
n/a
3 years
n/a
1.05%
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The Group recognised a charge of £1,864,000 (2012: £35,000) 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 benefit of employees by the acquisition and distribution of shares in the Company.
The Trust purchases shares in the Company to satisfy the Company’s obligations under its Share Option Schemes and Performance Share Plan.
At 31 March 2013 unexercised options over nil (2012: nil) ordinary 1p shares in Helical Bar plc had been granted over shares held by the Trust.
At 31 March 2013 outstanding awards over 9,310,162 (2012: 7,230,850) ordinary 1p shares in Helical Bar plc had been made under the terms of the
Performance Share Plan over shares held by the Trust.
At 31 March 2013, the Trust held 1,292,000 shares (2012: 1,292,000).
31. Contingent liabilities
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.
Other than these contingent liabilities there were no contingent liabilities at 31 March 2013 for the Group or the Company (2012: £nil).
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32. Net assets per share
31.3.13
£000
Number
of shares
000s
31.3.13
pence
per share
31.3.12
£000
Number
of shares
000s
31.3.12
pence
per share
Net asset value
253,768
118,138
253,730
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:
(265)
(265)
253,503
116,846
217
253,465
116,846
217
90
3,649
34
1,824
90
1,757
34
901
257,242
118,704
217
255,312
117,781
217
– fair value of financial instruments
– deferred tax
6,048
578
3,494
1,050
Adjusted diluted net asset value
263,868
118,704
222
259,856
117,781
221
Adjustment for:
– fair value of trading and development properties
49,865
34,542
Diluted EPRA net asset value
313,733
118,704
264
294,398
117,781
250
Adjustment for:
– fair value of financial instruments
– deferred tax
(6,048)
(578)
(3,494)
(1,050)
Diluted EPRA triple net asset value
307,107
118,704
259
289,854
117,781
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”).
The adjustments to the net asset value comprise the amounts relating to the Group and its share in Joint Ventures.
33. Related party transactions
At 31 March 2013 and 31 March 2012 the following amounts were due in respect of the Group’s joint ventures.
Abbeygate Helical (Leisure Plaza) Ltd
Abbeygate Helical (C4.1) LLP
King Street Developments (Hammersmith) Ltd
Shirley Advance LLP
The Asset Factor Ltd
HP Properties Ltd (BVI)
Barts Two Investment Property Ltd
Helical Sosnica Sp. zoo
207 Old Street Unit Trust
211 Old Street Unit Trust
Old St Retail Unit Trust
City Road (Jersey) Ltd
All movements in joint venture balances related to loans repaid and loans advanced.
90
At 31.3.13
£000
At 31.3.12
£000
3,279
–
2,392
4,323
n/a
–
152
10,839
1,757
1,456
684
675
2,316
10
2,150
4,603
8
–
3
3,367
n/a
n/a
n/a
n/a
notes to the financial statements
At 31 March 2013 and 31 March 2012 there were the following balances between the Company and its subsidiaries.
Amounts due from subsidiaries
Amounts due to subsidiaries
helical bar plc 2013
31.3.13
£000
304,392
152,435
31.3.12
£000
316,935
145,120
During the years to 31 March 2013 and 31 March 2012 there were the following transactions between the Company and its subsidiaries:
Management charges receivable
Management charges payable
Interest receivable
Interest payable
Year ended
31.3.13
£000
Year ended
31.3.12
£000
3,480
83
1,574
–
4,318
127
3,439
–
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 identified in note 22.
Amounts owed to subsidiaries by the company are identified in note 24.
The Group considers that the key management personnel are the directors and the detail of their remuneration is disclosed in the directors’
remuneration report on pages 54 to 62. Share based payments for directors are disclosed in note 8.
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34. Financial instruments
Categories of financial instruments
Financial assets in the Group include derivative financial assets which are designated as ‘Fair value through the Profit 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 classed as ‘Fair value through the Profit or Loss’ include derivatives and those liabilities designated as such. Financial liabilities also
include secured bank loans and overdrafts, trade and other payables and provisions, all of which are classified as financial liabilities at amortised cost.
Financial assets and liabilities by category
The financial instruments of the Group as classified in the financial statements can be analysed under the following IAS 39 Financial Instruments:
Recognition and Measurement, categories:
Financial assets
Loans and receivables
Fair value through the Profit or Loss
Available-for-sale financial assets
Total financial assets
These financial assets are included in the balance sheet within the following headings:
Available–for–sale investments
Derivative financial instruments
Trade and other receivables
Cash and cash equivalents
Total financial assets
Group
31.3.13
£000
79,827
146
5,997
Group
31.3.12
£000
Company
31.3.13
£000
Company
31.3.12
£000
57,798
349,700
350,491
629
7,003
52
–
340
–
85,970
65,430
349,752
350,831
Group
31.3.13
£000
5,997
146
42,964
36,863
85,970
Group
31.3.12
£000
7,003
629
22,387
35,411
65,430
Company
31.3.13
£000
Company
31.3.12
£000
–
52
–
340
325,665
324,136
24,035
26,355
349,752
350,831
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notes to the financial statements
Financial assets are stated in accordance with IAS 32 Financial Instruments: Presentation.
For fair value of available-for-sale investments see note 21. 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 Profit or Loss
Other financial liabilities
Total financial liabilities
Group
31.3.13
£000
Group
31.3.12
£000
Company
31.3.13
£000
Company
31.3.12
£000
(13,379)
(3,075)
(1,027)
(837)
(278,491)
(280,864)
(164,886)
(152,411)
(291,870)
(283,939)
(165,913)
(153,248)
These financial liabilities are included in the balance sheet within the following headings:
Trade and other payables
Borrowings – current
Borrowings – non current
Derivative financial instruments
Total financial liabilities
Group
31.3.13
£000
(27,135)
(39,295)
Group
31.3.12
£000
Company
31.3.13
£000
Company
31.3.12
£000
(17,669)
(153,581)
(146,865)
(59,203)
(220,446)
(203,992)
(5,164)
(3,075)
(6,848)
(4,457)
(1,027)
(5,546)
–
(837)
(291,870)
(283,939)
(165,913)
(153,248)
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 financial 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 floors, and those designated on initial recognition.
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 floors are measured at the present value of future cash flows estimated and
discounted based on the applicable yield curves derived from quoted interest rates.
IFRS 7 categorises financial 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 financial instruments above have been valued using a Level 2 methodology and the available-for-sale investments, which are described
in note 21, are classified 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.
Derivative financial instruments
Derivative financial assets
Interest rate caps
Derivative financial liabilities
Interest rate swaps
Group
Year ended
31.3.13
£000
Group
Year ended
31.3.12
£000
Company
Year ended
31.3.13
£000
Company
Year ended
31.3.12
£000
146
146
629
629
52
52
(5,164)
(5,164)
(3,075)
(3,075)
(1,027)
(1,027)
340
340
(837)
(837)
The group’s movement in the fair value of the derivative financial instruments in the year was a loss of £2,573,000 (2012: £306,000); Company: loss of
£478,000 (2012: £1,604,000).
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helical bar plc 2013
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 financial reliability of customers, taking into account their financial position, past experience and other factors.
As at 31 March 2013 Helical has total credit risk exposure excluding cash of £48,961,000 of which £5,997,000 is available-for-sale assets and
£42,964,000 is loans and receivables. Available-for-sale assets are analysed in note 21.
Of the trade receivables held at 31 March 2013, £0.8m related to rent due from tenants which was received post year-end and £1.2m related to
completion monies due on the sale of a property which was received on 2 April 2013.
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 defined 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.
The Group manages its liquidity risk on a consolidated basis based on business needs, tax, capital or regulatory considerations, if applicable, and
through numerous sources of finance in order to maintain flexibility. Management monitors the Group’s net liquidity position through rolling forecasts on
the basis of expected cash flows. The Group’s cash and cash equivalents are held with major regulated financial institutions and the directors regularly
monitor the financial 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 profile of the Group’s contracted financial 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
31.3.13
£000
45,839
28,620
95,219
154,222
323,900
Group
31.3.12
£000
19,913
65,135
89,567
140,201
314,816
Company
31.3.13
£000
Company
31.3.12
£000
158,800
147,067
2,543
5,215
–
7,011
789
–
166,558
154,867
Of the Group’s contracted financial liabilities due within 3 months £12m of loans have been refinanced and are payable after more than 3 years.
At 31 March 2013 Helical had £35m of undrawn borrowing facilities, £27m of uncharged property assets and cash balances of £37m. 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 the Group can meet its contracted liabilities as they fall due.
Market risk
The Group is exposed to market risk, primarily related to interest rates, foreign currency exchange movements, the market value of the investments
and accrued development profits. The Group actively monitors these exposures.
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Interest rate risk
It is the Group’s policy and practice to minimise interest rate cash flow exposures on long-term financing. The Group does this by using a number of
derivative financial 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 finance. The Group does not use financial instruments for speculative purposes.
Details of financing and financial instruments can be found in note 26.
In the year to 31 March 2013, if interest rates had moved by 0.5%, this would have resulted in the following movement to net profits and equity due to
movements in interest charges and mark-to-market valuations of derivatives.
0.5% increase – increase in net results and equity
0.5% decrease – decrease in net results and equity
Group
31 March 2013
Company
31 March 2013
Impact on
results
£000
2,724
(2,537)
Equity
impact
£000
2,724
(2,537)
Impact on
results
£000
673
(571)
Equity
impact
£000
673
(571)
Foreign currency exchange risk
Due to its operations in Poland and its investment in a non-UK based property developer, the Group 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.
In the year to 31 March 2013 the Group made foreign exchange gains of £17,000 (2012: 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 2013
31 March 2012
Euro
(£000)
28,135
(8,921)
19,214
Zloty
(£000)
1,361
(1,112)
249
US dollars
(£000)
5,984
–
5,984
Euro
(£000)
18,197
(8,799)
9,398
Zloty
(£000)
US dollars
(£000)
3,599
(1,729)
1,870
6,990
–
6,990
The Company’s balance sheet translation exposure is almost exclusively due to intra-group loans and is summarised as follows:
Gross currency assets
Gross currency liabilities
Net exposure
31 March 2013
31 March 2012
Euro
(£000)
10,853
–
10,853
Zloty
(£000)
4,507
–
4,507
Euro
(£000)
3,311
–
3,311
Zloty
(£000)
6,749
(1,402)
5,347
The Group’s main currency exposure is to the euro. The sensitivity of the net assets and profit of the Group to a 10% change in the value of the foreign
currencies against sterling is Euro: £1,921,000 (2012: £940,000), Zloty: £25,000 (2012: £187,000), US dollar: £598,000 (2012: £531,000).
The sensitivity of the net assets and profit of the Company to a 10% change in the value of the foreign currencies against sterling is Euro: £1,085,000
(2012: £331,000), Zloty: £451,000 (2012: £535,000).
94
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helical bar plc 2013
35. Principal accounting policies
Basis of consolidation
The Group financial statements consolidate those of Helical Bar plc (the “Company”) and all of its subsidiary undertakings (together the “Group”) drawn
up to 31 March 2013. Subsidiary undertakings are those entities over which the Group has the ability to govern the financial 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 profit 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 significant influence 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 48.
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
significant 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 satisfied 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.
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Property advisory/development management services – where the Group provides these services to the third party property site owner the Group
recognises income over the period these services are provided and in accordance with the specific terms of the contract. If the amount of, and
payment of, the consideration for these services are contingent upon a future event (such as sale of the property) and the Group recognises revenue
when it has provided the services, it can reliably estimate the fair value of the consideration and upon occurrence of the relevant event.
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 54 to 62. 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 financial 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.
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 office 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%
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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 financial
statements and the corresponding tax bases used in the computation of taxable profit, 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 profits will be available against which deductible temporary differences can be utilised. The measurement of deferred tax assets
and liabilities reflects the tax consequences of the manner in which the Group 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
profit nor the accounting profit.
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 sufficient
taxable profits will be available to allow all or part of the assets to be recovered.
The deferred tax asset relating to share based payment awards reflects 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.
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 satisfied:
a)
the Group is able to control the timing of the reversal of the temporary difference; and,
b)
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 financial 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 qualified 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 finance 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 reclassified. 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.
Goodwill
Goodwill, representing the excess of the cost of acquisition over the fair value of the Group’s share of the identifiable 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 either based on the interest paid (where a project has a specific loan) or calculated using the Group’s weighted average cost of
borrowings (where there are no specific borrowings for the project). Interest is capitalised from the date of commencement of the development work
until date of practical completion.
96
notes to the financial statements
helical bar plc 2013
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 defined 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 classification 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 flow 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 finance and other costs yet to be amortised.
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 financial instruments
Derivative financial assets and financial 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 floors, 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 flows and forward rates as appropriate. Any change in the fair value of such derivatives is recognised immediately in the Income Statement.
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Further information on the categorisation of financial instruments can be found in note 34.
Leases
Leases are classified according to the substance of the transaction. A lease that transfers substantially all the risks and rewards of ownership to the
lessee is classified as a finance lease. All other leases are classified as operating leases.
In accordance with IAS 40, finance leases of investment property are accounted for as finance 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 finance lease
liability. Lease payments are allocated between the liability and finance charges so as to achieve a constant financing rate.
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 financial 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 recognised in Other Comprehensive Income. 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.
97
helical bar plc 2013
notes to the financial statements
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 per share
Earnings 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 value of “Own shares held” with
reference to the expected cash proceeds 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 financial 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 significantly impact on the Group’s earnings and financial position are:
– recognition of property management/development management service income includes subjective assumptions such as assessment of contingent
events and time value of money for future payments (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 sufficient taxable profits 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 21); 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 20).
98
helical bar plc 2013
ten year review
Consolidated income statements
IFRS
31.3.13
£000
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
31.3.05
£000
UK GAAP
31.3.04
£000
Revenue
Net rental income
65,439
52,968
119,059
67,354
81,770
65,623
123,176
119,274
101,469
54,566
19,578
17,876
14,187
14,151
17,682
16,400
14,771
16,524
20,440
22,980
Development profit/(loss)
7,616
5,166
(1,729)
8,748
15,040
6,453
13,587
4,594
12,664
Provisions against stock
(660)
(4,511)
(14,913)
(10,041)
(22,744)
(385)
Trading (loss)/profit
(1)
–
(367)
(10)
(514)
Share of results of joint ventures
3,854
2,472
2,886
3,745
–
2,094
6,196
766
–
13,441
437
235
–
5,771
2,699
235
(29)
(98)
(315)
1,846
6,752
26
38
–
1,031
1,636
601
Other (expense)/income
Gross profit/(loss) before gain/
(loss) on investment properties
(547)
113
29,840
21,116
(358)
(294)
16,619
18,062
22,026
37,414
35,231
41,809
26,286
(Loss)/gain on sale of
investment properties
Revaluation surplus/(deficit)
on investment properties
Gain on sale of investments
Impairment of available-for-sale
investments
Administrative expenses excluding
performance related awards
(2,388)
(376)
4,842
(4,909)
1,335
(236)
7,457
7,818
14,106
2,035
3,723
3,664
2,670
13,104
(68,005)
(32,554)
33,180
35,733
30,098
–
–
–
–
–
(1,817)
–
–
1,892
–
–
–
–
–
–
–
–
–
–
–
–
(8,092)
(7,385)
(7,312)
(7,202)
(7,410)
(6,894)
(6,174)
(6,104)
(5,848)
(5,799)
Performance related awards
(6,828)
(415)
(262)
(1,478)
(680)
(6,765)
(11,370)
(10,478)
(9,909)
(2,238)
Loss on sale of subsidiary
–
–
–
–
–
–
–
–
–
(59)
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1,070
–
–
Finance costs
Finance income
Movement in fair value of derivative
financial instruments
(9,577)
(8,409)
(6,992)
(9,328)
(9,718)
(3,033)
(2,710)
(7,421)
(8,734)
(7,642)
887
(2,573)
583
(306)
652
1,039
2,082
2,579
1,335
1,776
1,157
(13,412)
(1,270)
956
1,295
1,046
1,948
1,225
Foreign exchange gains/(losses)
17
(1,064)
(67)
(1,127)
3,999
1,862
–
–
–
Profit/(loss) before tax
5,009
7,408
(6,280)
7,875
(71,855)
(24,285)
60,088
57,120
64,695
13,653
Tax
815
158
2,391
1,711
18,359
11,971
(8,000)
(9,676)
844
(2,199)
Profit/(loss) after tax
5,824
7,566
(3,889)
9,586
(53,496)
(12,314)
52,088
47,444
65,539
11,454
The financial statements for the year to 31 March 2005 have been restated to reflect 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 2013 is taken from the financial statements of
those years and the information for the years 31 March 2004 to 31 March 2005 is taken from the financial statements of those years restated to reflect
the impact of the 5 for 1 share issue on 1 September 2005
99
helical bar plc 2013
ten year review
IFRS
31.3.13
£000
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
31.3.05
£000
UK GAAP
31.3.04
£000
Investment portfolio
312,026 326,876
271,876
219,901
241,287
306,778
316,025
294,583
271,315 334,932
Land, developments and trading
properties
Group’s share of investment
properties held by joint ventures
Group’s share of land, trading and
development properties held by
joint ventures
92,874
99,741
147,542
182,576
210,415
182,508
110,815
86,076
95,568
70,254
94,962
67,187
65,870
45,300
–
–
–
–
–
13,830
23,797
15,709
14,434
14,346
13,761
6,885
5,795
4,906
4,672
2,968
Group’s share of total properties
523,659 509,513
499,722
462,123
465,463
496,171
432,635
385,565
371,555 421,984
Net debt
222,878 227,784
206,090
202,958
224,676
205,510
134,018
112,708
124,976 129,799
Group’s share of net debt of joint
ventures
Group’s share of net rental income of
joint ventures
38,521
36,409
35,898
25,794
3,550
19,566
11,049
2,202
2,344
8,379
4,881
5,060
3,590
695
212
186
118
130
120
1,418
Shareholders’ funds
253,768 253,730
255,397
242,607
237,066
268,659
282,186
230,097
186,165 234,917
Dividend per ordinary share
5.25p
4.90p
2.00p
7.25p
4.50p
4.50p
4.05p
3.65p
Special dividend per ordinary share
–
–
–
–
–
–
–
–
Diluted EPRA earnings/(loss) per
ordinary share
2.4p
3.4p
(6.4p)
2.9p
9.0p
11.6p
16.6p
12.2p
3.32p
80.0p
n/a
3.32p
–
n/a
Diluted EPRA net assets per share
264p
250p
253p
272p
286p
352p
374p
309p
238p
182p
The financial statements for the year to 31 March 2005 have been restated to reflect 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 2013 is taken from the financial statements of
those years and the information for the years 31 March 2004 to 31 March 2005 is taken from the financial statements of those years restated to reflect
the impact of the 5 for 1 share issue on 1 September 2005
The diluted EPRA earnings per ordinary share were not calculated for the years to 31 March 2004 and 31 March 2005.
100
investor information appendix I
property portfolio
helical bar plc 2013
investment portfolio
London offices
Address
Description
Area sq ft (NIA)
Average rent
Vacancy rate
Shepherds Building,
Shepherds Bush, London, W14
Multi-let office building. Let to media
companies
Silverthorne Road, Battersea,
London, SW8
Multi-let office building. Let to media
companies
NHS Hospital with planning consent for
225,000 sq ft office, 215 residential
apartments and 26,000 sq ft retail/leisure
Office and retail buildings with major
refurbishment/redevelopment potential
Recently refurbished office and retail
building adjacent to Hammersmith
Broadway
Barts Square, London, EC1
207-211 Old Street, London, EC1
Broadway House, London, W6
The Powerhouse, Chiswick,
London, W4
Regional offices
151,000
£23.95 psf
107,000
£20.90 psf
420,000
£8.85 psf
284,000
35,000
Office: £11.85 psf
Retail: £25-£75 ITZA
Office: £24.50
Retail: £125-£145 ITZA
3%
26%
5%
15%
30%
0%
Single let music recording/office building
24,000
£16.50 psf
1,021,000
Address
Description
Area sq ft (NIA)
Average rent
Vacancy rate
Fordham, Newmarket
Single let research and development
facility
70,000
70,000
£17.70 psf
0%
Industrial
Address
Dales Manor, Business Park,
Cambridge
Winterhill Industrial Estate,
Milton Keynes
Crownhill Business Centre,
Milton Keynes
Description
Area sq ft (NIA)
Average rent
Vacancy rate
Industrial and office park
Town centre industrial estate
Multi-let industrial estate
68,000
25,000
108,000
201,000
£8.50 psf
£7.70 psf
£6.60 psf
3%
0%
20%
Retail
Address
Description
Area sq ft (NIA)
Average rent
Vacancy rate
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The Morgan Quarter, Cardiff
Prime retail parade and listed retail
arcades with residential above
78-104 Town Square, Basildon
High street retail parade with offices above
The Guineas, Newmarket
Town centre shopping centre
Idlewells Shopping Centre,
Sutton in Ashfield
Corby Town Centre, Corby
Covered town centre shopping centre
Town centre including modern shopping
centre, original High Street, retail park
and residential
Clyde Shopping Centre, Clydebank Town centre shopping centre and foodstore
Otford Retail Park, Sevenoaks
Retail park
294,000
£120-£175 ITZA
54,000
142,000
143,000
£75-£100 ITZA
£30-£50 ITZA
£25-£50 ITZA
700,000
£30-£50 ITZA
627,000
42,000
2,002,000
£30-£65 ITZA
£18.50 psf
4%
16%
4%
2%
2%
3%
0%
101
helical bar plc 2013
investor information appendix I
property portfolio
development programme
Offices
Address
Area sq ft (NIA)
Fund/owner
Helical interest
Type of development
200 Aldersgate Street, London EC1
370,000
Mitre Square, London EC3
The Hub, Pacific Quay, Glasgow
St Vincent Street, Glasgow
Botleigh Grange, Hedge End
Southampton
Industrial
Address
Ropemaker Park, Hailsham
Retail
Address
273,000
60,000
220,000
Deutsche
Pfandbriefbank
Helical
Helical
Scottish Power/
Iberdrola
Dev. Man
Refurbished and in course of letting
100%
100%
Dev Man
Site for new consented office building
Media focused multi-let office
(i.e. 78% let)
Creation of new office headquarters
with local partner
23,000
Helical
100%
New build regional HQ office
946,000
Area sq ft (NIA)
Fund/owner
Helical interest
Type of development
8,000
8,000
Helical
90%
New build – completed
Area sq ft (NIA)
Helical interest
Type of development
Parkgate, Shirley, West Midlands
157,000
C4.1 Milton Keynes
Leisure Plaza, Milton Keynes
Retirement villages
Address
Bramshott Place, Liphook, Hampshire
Durrants Village, Faygate, Horsham
Millbrook Village, Exeter
33,000
305,500
495,500
Units
151
171
164
Maudslay Park, Great Alne, Warwickshire
132
618
50%
50%
50%
Consented food store, retail and
residential. Construction underway.
Remaining retail and office units, part let
Consent for 133,000 sq ft retail store,
65,000 sq ft ice rink
Helical interest
Type of development
100%
100%
100%
100%
115 units sold, 16 under offer.
Construction of all phases completed
First phase under construction
Detailed consent for retirement village.
Construction due to commence in
2013.
82 acre site with consent for a
retirement village. Construction due
to commence in 2013.
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investor information appendix I
property portfolio
development programme
helical bar plc 2013
Change of use potential
Address
Cawston, Rugby
Arleston, Telford
Developments
Address
Area
32 acres
19 acres
51 acres
Helical interest
Type of development
100%
100%
32 acre greenfield site with residential
potential
19 acre greenfield site with residential
potential
Area sq ft (NIA)
Helical interest
Type of development
Brickfields, White City, London W12
1,500,000
Joint venture
King Street, Hammersmith, London W6
340,000
50%
1,840,000
Received resolution to grant planning
permission for residential led scheme.
Contracts for the sale of the site
exchanged
Revised planning application to be
submitted in summer 2013 for
residential, office, retail and leisure
scheme
Retail – Poland
Address
Park Handlowy Mlyn, Wroclaw
Europa Centralna, Gliwice
Area sq ft (NIA)
Fund/owner
Helical interest
Type of development
103,000
720,000
823,000
Helical
100%
Completed development, fully let
Helical/
Standard Life
37.50%
Completed development
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helical bar plc 2013
investor information appendix II
risk register
Market risk
Risk
Property values decline
Mitigation/remarks
Current uncertainties in the world economy mean that future
performance is difficult to predict
Helical has been active in disposing of non-performing assets
and rebalancing its portfolio for the changing market
Reduced tenant demand for space
Group’s strategy is to avoid doing speculative developments
Focus is on buying well let properties in good locations
Action to be taken
Keep diversified portfolio to
prevent being over-exposed
to one sector
Continue to avoid speculative
developments
Continue to ensure that vacant
space is kept to a minimum
Strategic risk
Risk
Group’s strategy is inconsistent with market
conditions e.g.:
- Asset concentration/lot size impacts on
liquidity (e.g. if investments become difficult
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) leading to financial underperformance
Financial risk
Risk
Inability to roll over loans
Foreign exchange risk
Mitigation/remarks
Action to be taken
Continue monitoring
capital structure
Take gearing level into
account when making
business decisions
Action to be taken
Focus on refinancing loans
due to be repaid before
31 March 2014
Management constantly monitors the Group’s 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 quickly.
The group’s gearing was 88% at March 2013
The group’s gearing is constantly monitored to ensure that
it remains appropriate relative to the economic cycle
Mitigation/remarks
Good relationship with the majority of real estate lending
institutions
Maturity profile of the Group’s loans at 31 March 2013 is:
£40m maturing within 1 year
£11m maturing between 1 to 2 years
£63m maturing between 2 and 3 years
£99m maturing between 3 and 4 years
£48m maturing after 4 years
Since 31 March 2013 of the loans expiring within one year, £8m
has been repaid, £6m has been refinanced until 2017 and £6m
until 2018.
Maturity profile of the Group’s share of joint venture loans
at 31 March 2013 is:
£1m maturing within 1 year
£14m maturing between 1 to 2 years
£59m maturing between 2 and 3 years
Borrowing is spread between a number of different institutions
Helical’s exposure to foreign exchange risk has been reduced
due to borrowing on developments in local currencies where
possible. As at 31 March 2013 the Group’s net euro assets are
worth £19.2m, net Polish zloty assets £0.2m and net US dollars
assets £6.0m.
Increase in cost of borrowing
At 31 March 2013 the Group and its share of joint ventures
had £163m of fixed rate debt and interest rates caps of
£133m at an average rate of 4.71%
Ensure that hedging %
remains at an appropriate level
Hedge effectiveness regularly monitored
104
investor information appendix II
investor information appendix II
risk register
helical bar plc 2013
Financial risk (continued)
Risk
Mitigation/remarks
Action to be taken
Breaching loan covenants
Insufficient liquidity to take advantage of
opportunities
Tenant default
Adherence to loan covenants is constantly
monitored with reference to current compliance
and forecast compliance.
As at 31 March 13 the Group had £37m
of cash, £35m of undrawn borrowings and
£27m of uncharged property.
Continue monitoring loan covenants
Maintain overdraft facilities
Ensure that cash resources do not fall below
currently forecast levels
Tenant covenant strength is considered when
making property decisions. Currently no tenant
represents more than 5.5% 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
Bad debts were 2% of gross rent in the year
to 31 March 2013.
Loss of deposits due to banking counterparty
failure
All deposits are held at high quality financial
institutions
Ensure that all deposits remain at well
capitalised institutions
No significant deposits held outside the UK
Regular monitoring of financial institutions
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 annually
Monitor compliance with policy
Use of specialist professional advice
Continue to use specialist advice
Bribery and corruption risk
Not involved in high risk activities
No significant issues reported in the year
Anti-bribery policy and procedures in place
which is distributed to all staff and all
significant Joint Venture partners
The Board is firmly behind the prohibition
of giving or receiving of bribes or facilitation
payments
Continue to identify and monitor projects with
a greater exposure to bribery and corruption
Avoid doing business in high risk territories
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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 find suitable contractors/JV partners Well established network of joint venture
Keep up to date with planning legislation
Continue to use specialist professional advisors
Continue to avoid speculative developments
partners which it has worked with in the past
As Helical nears the construction of key
projects (e.g. White City, Barts Square,
Old Street) this risk increase
Appoint well established contractors with a good
reputation
105
helical bar plc 2013
shareholder information
The report and financial statements, share price information, company
presentations, the financial calendar, Corporate Governance, contact
details and other investor information on the Group are available in the
‘Investors’ and ‘About us’ areas 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 Alert Service in the ‘News’
area of our website. 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.
For further details, contact the Company’s Registrar.
For participants in the plan, key dates can be found in the online financial
calendar in the ‘Investors’ 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 benefit.
Dividends
Dividend payment dates on the Company’s Ordinary 1p shares in 2012
were as follows:
Dividend
2011/12
Final
2012/13
Interim
Record
Date
29 June
2012
30 Nov
2012
Payment
Date
26 July
2012
28 Dec
2012
Dividend payment dates in 2013 will be as follows:
Dividend
2012/13
Final
2013/14
Interim
Record
Date
5 July
2013
Dec
2013
Payment
Date
26 July
2013
Dec
2013
Amount
3.40p
1.85p
Amount
3.70p
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. 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 FCA (Financial
Conduct Authority) before getting involved. You can check at
www.fca.org.uk/consumers.
• Report the matter to the FCA either by calling 0800 111 6768 or by
completing an online form at:
www.fca.org.uk/consumers/scams/investment-scams/share-fraud-
and-boiler-room-scams/reporting-form.
If you deal with an unauthorised firm, you would not be eligible to receive
payment under the Financial Services Compensation Scheme. Also keep
in mind that some fraudsters use the name of genuine firms or individuals
on the FCA Register to suggest that they are legitimate. However,
authorised firms are unlikely to contact you out of the blue offering to buy
or sell shares.
Share price information
The latest information on the Helical Bar plc share price is available on
our website www.helical.co.uk.
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.
Registered office
11–15 Farm Street, London, W1J 5RS
Registered in England and Wales No. 156663.
106
glossary of terms
helical bar plc 2013
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/profit on disposal of investment
properties, trading property losses/profits, impairment of available-for-sale investments and fair value
movements on derivative financial 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 financial 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 financial instruments and
deferred tax on capital allowances and on investment properties revaluation.
Diluted figures
Reported amounts adjusted to include the effects of potential shares issuable under the employee
share option schemes.
Earnings per share
Profit after tax divided by the weighted average number of ordinary shares in issue.
EPRA
Equivalent yield
European Public Real Estate Association.
The constant capitalisation rate which, if applied to all cash flows from an investment property,
including current rent, reversions to current market rent and such items as voids and expenditures,
equates to the market value. Assumes rent is received in arrears.
Estimated rental value (ERV)
The market rental value of lettable space as estimated by the Group’s valuers at each balance sheet
date.
Initial yield
IPD
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
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.
Rack rental value %
The anticipated yield, which the initial yield will rise to once the rent reaches the ERV.
Total shareholder return (TSR)
True equivalent yield
Unleveraged returns
Reversionary
See-through
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 flows from an investment property,
including current rent, reversions to current market rent and such items as voids and expenditures,
equates to the market value. Assumes rent is received quarterly in advance.
Total property gains and losses (both realised and unrealised) plus net rental income expressed as a
percentage of the total value of the properties.
The income/yield from the full Estimated Rental Value of the property on the Market Value of the
property grossed up to include purchaser’s costs, capital expenditure and capitalised revenue
expenditure.
The net rental income, net finance cost, property portfolio and net borrowings of the Group and the
Group’s share in its Joint Ventures
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helical bar plc 2013
financial calendar
Year ended 31 March 2013
Annual General Meeting to be held 24 July 2013
Final ordinary dividend payable
26 July 2013
Half year ending 30 September 2013
Year ending 31 March 2014
Results and interim ordinary dividend announced November 2013
Interim ordinary dividend payable December 2013
Results and final dividend announced May 2014
Final ordinary dividend payable July 2014
Capita Registrars
Aareal Bank AG
Allied Irish Bank
Barclays Bank PLC
Deutsche Hypothekenbank
HSBC plc
Nationwide
The Royal Bank of Scotland Group plc
JP Morgan Cazenove Limited
Oriel Securities Limited
Grant Thornton UK LLP
Lazard Ltd
Anderson Strathern
Ashurst
Clifford Chance
Lawrence Graham
Linklaters
Lovells
Maclay Murray & Spens
Mayer Brown
Mishcon de Reya
Nabarro
Norton Rose
Wragge & Co
advisors
Registrars
Bankers
Joint stockbrokers
Auditors
Merchant bankers
Solicitors
108
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Helical Bar plc
Registered Offi ce
11-15 Farm Street
London, W1J 5RS
Tel: 020 7629 0113
Fax: 020 7408 1666
email: info@helical.co.uk
www.helical.co.uk