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HELICAL BAR PLC
Report & Accounts
2015
CONTENTS
STRATEGIC REPORT
What we do
Financial highlights
Review of the year
Chief Executive’s statement
Strategies
Performance
Helical’s property portfolio
Financial review
Principal risks review
Corporate responsibility
GOVERNANCE
Chairman’s review
Governance structure
Board of Directors
Governance review
Nominations committee report
Audit committee report
Directors’ remuneration report
Report of the directors
Statement of directors’ responsibilities
Independent Auditor’s report
FINANCIAL STATEMENTS
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated and company balance sheets
Consolidated and company cash flow statements
Consolidated and company statements of changes in equity
Notes to the financial statements
Five year review
ADDITIONAL INFORMATION
See through analysis
Property portfolio
Shareholder information
Glossary of terms
Financial calendar
Advisors
2
4
8
12
15
16
19
37
40
44
50
51
52
54
56
56
58
72
74
75
78
78
79
80
81
82
111
114
117
120
121
122
122
FINANCIAL CALENDAR
Year ended 31 March 2015
Final ordinary dividend payable
Half year ending 30 September 2015
Year ending 31 March 2016
Annual General Meeting to be held on 24 July 2015
31 July 2015
Results and interim ordinary dividend announced November 2015
Interim ordinary dividend payable December 2015
Results and final dividend announced May 2016
Final ordinary dividend payable July 2016
→ FRONT COVER: ONE CREECHURCH PLACE, LONDON EC3
STRATEGIC REPORT
HELICAL BAR PLC
REPORT & ACCOUNTS 2015
STRATEGIC REPORT
What we do
Financial highlights
Review of the year
Chief Executive’s statement
Strategies
Performance
Helical’s property portfolio
Financial review
Principal risks review
Corporate responsibility
2
4
8
12
15
16
19
37
40
44
01 STRATEGIC REPORT
01
STRATEGIC REPORT
What we do
HELICAL BAR PLC REPORT & ACCOUNTS 2015
Helical Bar plc is a property investment and development company
which operates across many sectors of the property industry.
We aim 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.
Our portfolio is primarily targeted towards London for capital growth
and development profits and the regions for high yielding investment
assets and trading profits.
→ HELICAL BAR PLC, HEAD OFFICE LONDON W1S
02
OVERALL PORTFOLIO
LONDON OFFICES
REGIONAL OFFICES
INDUSTRIAL/LOGISTICS
RETAIL
RETIREMENT VILLAGES
CHANGE OF USE
POLAND
TOTAL
INVESTMENT
£M
370.2
103.5
145.7
159.1
11.3
-
-
789.8
DEVELOPMENT
£M
53.3
2.6
-
26.3
87.8
8.3
53.3
%
36.2
10.1
14.3
15.6
1.1
-
-
77.3
%
5.2
0.3
-
2.6
8.6
0.8
5.2
TOTAL
£M
423.5
106.1
145.7
185.4
99.1
8.3
53.3
%
41.4
10.4
14.3
18.2
9.7
0.8
5.2
231.6
22.7
1,021.4
100.0
STRATEGIC REPORT
STRATEGIC REPORT
Helical’s portfolio
DEVELOPMENT PORTFOLIO
23%
REGIONAL
OFFICES
0.3%
POLAND
5.2%
CHANGE OF USE
0.8%
RETIREMENT VILLAGES
8.6%
RETAIL
2.6%
HELICAL BAR PLC, HEAD OFFICE LONDON W1S
LONDON
OFFICES
5.2%
RETIREMENT
VILLAGES
1.1%
LONDON OFFICES
36.2%
RETAIL
15.6%
INVESTMENT
PORTFOLIO
77%
INDUSTRIAL/LOGISTICS
14.3%
REGIONAL OFFICES
10.1%
HELICAL’S PORTFOLIO BY FAIR VALUE
OVERALL PORTFOLIO
LONDON OFFICES
REGIONAL OFFICES
INDUSTRIAL/LOGISTICS
RETAIL
RETIREMENT VILLAGES
CHANGE OF USE
POLAND
TOTAL
INVESTMENT
£M
370.2
103.5
145.7
159.1
11.3
-
-
789.8
%
36.2
10.1
14.3
15.6
1.1
-
-
77.3
DEVELOPMENT
£M
53.3
2.6
-
26.3
87.8
8.3
53.3
%
5.2
0.3
-
2.6
8.6
0.8
5.2
TOTAL
£M
423.5
106.1
145.7
185.4
99.1
8.3
53.3
%
41.4
10.4
14.3
18.2
9.7
0.8
5.2
231.6
22.7
1,021.4
100.0
03
HELICAL BAR PLC REPORT & ACCOUNTS 2015
STRATEGIC REPORT
Financial highlights
TOTAL PROPERTY RETURN
PROFIT BEFORE TAX
£155.3million
£35.9 million
£140.1 million
£155.3 million
£87.4million
2015
2014
2013
£5.0 million
£87.4 million
£101.7 million
PORTFOLIO RETURN - IPD
EPRA EARNINGS PER SHARE
20.4%
8.6%
2.4 pence
2.4 pence
20.4%
23.8%
2015
2014
2013
2.4 pence
33.3 pence
2015
2014
2013
2015
2014
2013
TOTAL DIVIDEND PAID PER SHARE
TOTAL SHAREHOLDER RETURN
6.85 pence
2015
2014
2013
6.85 pence
5.70 pence
5.25 pence
7.6%
7.6%
2015
2014
2013
28.4%
61.1%
→
KING STREET LONDON W6
→
BARTS SQUARE LONDON EC1
04
HELICAL BAR PLC REPORT & ACCOUNTS 2015
FINANCIAL HIGHLIGHTS continued
STRATEGIC REPORT
SEE-THROUGH PORTFOLIO VALUE
NET ASSETS
£1,021.4million
£404.4million
2015
2014
2013
£801.7 million
£626.4 million
£1,021.4 million
2015
2014
2013
£404.4 million
£340.5 million
£253.8 million
EPRA NET ASSET VALUE PER SHARE
SEE-THROUGH LOAN TO VALUE
385 pence
2015
2014
2013
385 pence
313 pence
264 pence
52%
2015
2014
2013
52%
46%
45%
SEE-THROUGH NET ASSET VALUE GEARING
NET INTEREST COVER RATIO
113%
2015
2014
2013
113%
99%
90%
2.5x
2.5x
2015
2014
2013
Note: The see-through figures are reconciled to statutory figures on pages 114-116
→
CHURCHGATE AND LEE HOUSE MANCHESTER
→
C-SPACE LONDON EC1
2.7x
8.3x
05
HELICAL BAR PLC REPORT & ACCOUNTS 2015
LONDON PORTFOLIO
One Creechurch Place
London EC3
271,000 sq ft of offices
2,227 sq ft of retail
Completion expected in September 2016.
06
FINANCIAL HIGHLIGHTS continued
HELICAL BAR PLC REPORT & ACCOUNTS 2015
STRATEGIC REPORT
07
STRATEGIC REPORT
Review of the year
Overview
Our strategy of holding London
assets for capital growth and
regional assets for income has
delivered strong results again this
year. Included within the £155.3m
total property return is £95.3m of
capital appreciation in London and
£30.7m from regional income.
08
Our income producing assets continue to
perform well with considerable letting
progress at Churchgate and Lee House,
Manchester, The Shepherds Building,
London W14 and New Loom House, London
E1. We are enjoying rising income levels as
we continue to acquire high yielding assets
and begin to capture some of the
reversionary potential of our properties.
At points in the property cycle where there
is yield compression and rental growth, we
are able to deliver outstanding profits. We
achieve these returns from working our
assets hard, creating value from asset
management and development rather than
relying solely on market improvements.
This year we have been extremely active,
acquiring 58 properties, the equivalent of
one purchase every six days. We have
entered the delivery phase for the majority
of our developments with construction
having commenced at The Bower, London
EC1, Barts Square, London EC1, One
Creechurch Place, London EC3, and
C-Space, London EC1. Occupational
demand remains very strong in these
locations giving us confidence that we will
continue to achieve favourable letting
outcomes, well in excess of our original
expectations.
HELICAL BAR PLC REPORT & ACCOUNTS 2015 REVIEw OF THE YEAR continued
STRATEGIC REPORT
→
THE BOWER OLD STREET LONDON EC1
→
C-SPACE LONDON EC1
→→
BARTS SQUARE LONDON EC1
→
NEW LOOM HOUSE LONDON E1
→
SHEPHERDS BUILDING LONDON W14
London portfolio
The Bower, Old Street, London EC1
Development of phase one of the 3.12 acre site
has continued and is expected to complete in
summer 2015. Letting of the three buildings that
make up phase one; The Warehouse, The Studio
and Empire House has progressed well.
Development of The Tower, phase two, is
expected to commence in July 2015.
Barts Square, London EC1
Construction of phase one of the 3.2 acre site
commenced in January 2015. Phase one consists
of 144 residential units, of which 64 have been sold
and a further two reserved, with completion expected
in summer 2017. Phase two, construction of
211,000 sq ft of offices, will commence in 2016,
once vacant possession is obtained. Phase three,
comprising an additional 92 residential units, is
expected to commence at the end of 2016.
C-Space, London EC1
Significant progress has been made on the
extension and complete refurbishment of the
62,000 sq ft office building. It is expected that
c. 75% will be let before completion.
One Creechurch Place, London EC3
Demolition and ground works have completed.
The new site will comprise 271,000 sq ft of office
space with a further 2,000 sq ft of retail.
Clifton Street, London EC2
In September Helical exchanged contracts on the
forward sale of Clifton Street for £38.25m,
crystallising a £16.4m development profit on the
Group’s own existing contractual commitment to
acquire the property upon its completion.
New Loom House, London E1
The comprehensive refurbishment of a variety of
elements of this 112,000 sq ft listed building is
expected to complete in early 2016. New lettings
at £37.50 psf are being achieved, compared to a
current passing rent of £22.00 psf.
Shepherds Building,
London W14
This 151,000 sq ft multi-let office building has
seen significant rental growth with the ERV now
c. £50 psf compared to an average passing rent
of £30.50 psf. The refurbishment of the common
parts in now complete.
09
HELICAL BAR PLC REPORT & ACCOUNTS 2015
REVIEw OF THE YEAR continued
→
CHURCHGATE AND LEE HOUSE, MANCHESTER
→
DURRANTS VILLAGE, FAYGATE, HORSHAM
→
→
ST VINCENT STREET, GLASGOW
Regional portfolio
Distribution warehouses
The move out of secondary retail into high
yielding distribution warehouses has resulted in
the Group holding 36 units at the year end. These
units have very few bespoke features and the
majority are single let, making them relatively
straightforward to both re-let and manage.
Churchgate and Lee House,
Manchester
Refurbishment and remodelling of this 248,000
sq ft office has progressed well in the year, with in
excess of 30,000 sq ft being let since its
acquisition in March 2014.
St Vincent Street, Glasgow
Construction of the new headquarters for Scottish
Power has continued to progress with completion
expected in February 2016. As a result we have
recognised £1.3m of development management
fees in the year.
Retirement villages
Development has continued at our four primary
retirement village sites. Bramshott Place, Liphook
is complete with just four of the 151 units left to
sell. At Durrants Village, Faygate, the Clubhouse is
expected to open in summer 2015 and 28 units
have been sold.
Retail assets
During the year we have sold our shopping
centres at Corby Town Centre; Clyde Shopping
Centre; The Guineas, Newmarket; Idlewells
Shopping Centre, Sutton-in-Ashfield and Town
Square, Basildon. Our prime retail asset in Cardiff,
The Morgan Quarter, has been retained and
continues to be highly reversionary.
Poland
Sale of our completed out-of-town retail
development in Wroclaw, West Poland, is expected
in July 2015. At our retail park and shopping
centre in Europa Centralna, Gliwice, we have
agreed terms for the sale of our 50% interest to
our joint venture partner Standard Life. This is
expected to complete in July 2015.
10
HELICAL BAR PLC REPORT & ACCOUNTS 2015
REVIEw OF THE YEAR continued
HELICAL BAR PLC REPORT & ACCOUNTS 2015
STRATEGIC REPORT
CHURCHGATE AND LEE HOUSE, MANCHESTER
DURRANTS VILLAGE, FAYGATE, HORSHAM
→
THE MORGAN QUARTER, CARDIFF
ST VINCENT STREET, GLASGOW
→
Financing
Convertible Bond issue
The Group issued an unsecured £100m Convertible
Bond in June 2014 at a fixed rate of 4.0%. The
bond is repayable in 2019 unless the conversion
conditions are met, whereby the Group has the
option to settle in ordinary shares, the corresponding
value in cash or a combination of the two. The
initial conversion price is set at a 35% premium
above the price on the day of issue and a 59%
premium above the Company’s EPRA net asset
value per share at 31 March 2014.
Aviva Comercial Finance
In December 2014 the Group entered into a new
£81m secured facility with Aviva Commercial
Finance fixed for ten years at 3.48%.
HSBC
In December 2014 our joint venture at Barts
Square, London EC1 entered into a five year
£165m development facility to fund phase one of
the scheme and to finance the holding of the
remaining assets.
Cash and cash flow
At the year end the Group had over £229m of
cash and agreed, undrawn, committed facilities
including its share in joint ventures, as well as
£131m of uncharged property on which it could
borrow funds.
Revolving credit facilities
During the year we extended our £75m revolving
credit facility with Barclays, now repayable in
November 2019. Since the year end we have
extended our £100m revolving credit facility with
RBS to April 2020 with the option to extend for
two further one year periods.
Debt profile
At 31 March 2015, Helical’s debt had an average
maturity of 4.3 years (2014: 3.9 years) and a
weighted cost of 4.1% (2014: 4.5%).
11
STRATEGIC REPORT
Chief Executive’s
statement
30%
GROWTH IN NET RENTAL INCOME
7.4%
INCREASE IN TOTAL DIVIDEND
£96.6M
GAIN ON SALE AND REVALUATION OF
INVESTMENT PROPERTY
23%
GROWTH IN EPRA NET ASSET VALUE
£155.3M
TOTAL PROPERTY RETURN
£100M
CONVERTIBLE BOND ISSUE
It has been another good year for
Helical with returns from its portfolio
reaffirming the Group’s multi-sectoral
and multi-disciplined approach to the
property cycle.
This involves identifying opportunities across the
property spectrum which contribute to a regular
and increasing flow of rental income as well as
creating capital growth and development profits
throughout the cycle. We seek a balance between
an investment portfolio that provides income for
the Group and a development programme that,
through the use of limited equity, seeks to
maximise returns. This balance currently targets,
and has achieved, an investment portfolio
representing at least 75% of our total property
assets and a development programme covering
the remaining 25% which is capable of producing
exceptional profits. The portfolio is primarily
targeted towards London for capital growth and
development profits and the regions for high
yielding investment assets and trading profits.
The London Portfolio
The London investment and development portfolio
continues to combine exceptional contributions
from individual schemes with significant progress
in delivering the Group’s programme of new and
refurbished properties.
At Clifton Street, London EC2, we have forward
sold an office development of 45,000 sq ft which
is due to complete this summer, for £38.25m, having
committed to purchase it on completion for £21.0m.
At Barts Square, London EC1, our scheme in joint
venture with The Baupost Group LLC, we have
exchanged contracts for sale, at an average of
£1,574 psf, on 64 of the 92 residential units
released in September 2014 from phase one of
the development, which commenced in January
2015 and is due for completion in summer 2017.
Subsequent phases will commence in 2016.
At The Bower, Old Street, London EC1, our joint
venture with Crosstree Real Estate Partners LLP,
we expect to complete phase one, the refurbishment
and extension of The Warehouse (122,000 sq ft
NIA of offices, 5,300 sq ft of restaurant use) and
The Studio (18,363 sq ft of offices, 3,746 sq ft of
restaurant use) by summer 2015 having pre-let
Empire House (20,726 sq ft) to Z Hotels and
restaurant Ceviche who carried out their own
refurbishment works. The second phase, a
complete refurbishment of The Tower at 207 Old
Street, is due to commence in summer 2015. At
C-Space, London EC1 we expect to complete the
refurbishment in August 2015 and are confident
that the whole building will be let by the end of
this year.
Results for the year
The profit before tax for the year to 31 March
2015 was £87.4m, the second highest in the
Group’s history following last year’s record pre-tax
profits of £101.7m. Total property return
increased by 10.8% to £155.3m (2014:
£140.1m) and included growing net rents of
£38.6m (up 30% on 2014) and development
profits of £17.6m (2014: £65.0m). The gain on
sale and revaluation of the investment portfolio
contributed £96.6m (2014: £45.0m) and there
were trading profits of £2.5m (2014: £0.3m).
Net finance costs of £21.2m were significantly
higher than in 2014 (£12.7m), with the Income
Statement also adversely affected by falls in
expected future interest rates which led to an
£8.4m charge arising from valuing the Group’s
derivative financial instruments (2014: a gain of
£5.3m) and a £3.3m charge from valuing the
£100m Convertible Bond issued in June 2014.
Recurring administration costs were higher at
£10.2m (2014: £8.8m) with increased numbers
of head office employees reflecting the growth of
the Group’s portfolio and the acceleration of the
delivery phase of its development programme.
Performance related awards, before national
insurance costs, reflecting the success of the
Group’s activities in the year were £13.4m, down
from £15.7m in 2014.
The growth in rents and the surpluses on the
investment portfolio contributed to an increase in
the EPRA net asset value per share to 385p, up
23% from 313p at 31 March 2014. EPRA
earnings per share were 2.4p (2014: 33.3p)
reflecting the exclusion of the £96.6m (2014:
£45.0m) investment portfolio gain from this
measure. These results allow the Board to
continue its progressive dividend policy and to
recommend to shareholders a final dividend of
5.15p, an increase of 8.4% on 2014 (4.75p),
taking the total for the year to 7.25p (2014:
6.75p), an overall increase of 7.4%.
12
HELICAL BAR PLC REPORT & ACCOUNTS 2015
CHIEF ExECUTIVE’S STATEMENT continued
HELICAL BAR PLC REPORT & ACCOUNTS 2015
STRATEGIC REPORT
Outlook
Our strategy of investing and developing in London
whilst maintaining a high yielding regional investment
programme continues to bear fruit. We expect our
London portfolio to continue to provide significant
surpluses over the next few years as rental levels
grow and we complete and let our development
schemes. In the regions, we have completed our
rotation out of secondary shopping centres and into
high yielding distribution warehouses, regional offices
and out-of-town retail parks. We have seen good
demand from occupiers for the assets in our portfolio
and strong interest in those types of assets from
institutions. This is leading to a rise in both rental and
capital values as the UK economy strengthens
outside London.
With the General Election behind us we can look
forward with confidence to a more stable domestic
political situation, which should help the UK economy
to grow, and we anticipate providing shareholders
with continued strong growth in the value of our
business.
Michael Slade
Chief Executive
12 June 2015
The regional portfolio also includes our retirement
village development programme where we have
continued construction works at Durrants Village
Horsham, Millbrook Village Exeter and Maudslay
Park Great Alne near Stratford-upon-Avon. During
the year we sold 36 residential units and look
forward to the opening of the Clubhouse at
Durrants Village later this year. Our retail
development programme, with partners Oswin
Developments, continues to progress schemes at
Truro, Cortonwood, Kingswinford and Evesham
having completed its scheme at Shirley, West
Midlands.
Finance
The £100m 4% Convertible Bond, issued in June
2014, continued the move away from the use of
secured borrowings which started in 2013 with
the issue of the £80m 6% Retail Bond. The issue
of these two financing instruments allowed the
Group to increase its investment in the property
market without significant dilution of existing
shareholders and without putting pressure on the
Group’s loan covenants. We draw a distinction
between secured borrowings, on which we have a
net LTV (loan to value) of 34% and unsecured
forms of debt i.e. our Retail and Convertible
Bonds, which increase our overall LTV to 52%.
During the year we agreed a 10 year facility with
Aviva Commercial Finance and extended our
revolving credit facilities with Barclays and, since
the year end, with RBS, whilst taking advantage
of the low interest rates to arrange medium to
long term interest rate hedging. The effect of
these financial arrangements has been to extend
the average debt maturity to 4.3 years (2014: 3.9
years) whilst reducing our average cost of debt to
4.1% (2014: 4.5%). The Group continues to have
a significant level of cash and unutilised bank
facilities at the year end of £229m (2014:
£186m) to fund any additional purchases and
capital works on its portfolio.
Our 271,000 sq ft office development at One
Creechurch Place, London EC3, equity funded
with our joint venture partner HOOPP (Healthcare
of Ontario Pension Plan), is under construction
and due for completion in September 2016. At
23-28 Charterhouse Square, London EC1 we
have acquired an existing office building which
will comprise 38,600 sq ft of offices and 5,350 sq
ft of retail/restaurant use on completion of
refurbishment works in late 2016.
At Shepherds Building, London W14, having
completed the refurbishment of the common
parts, we have recently let space at £47.50 psf
which compares to a current average passing rent
of £30.50 psf. At New Loom House, London E1,
we continue to refurbish space as it becomes
available and are achieving rents of £37.50 psf
compared to an average rent on acquisition of this
building in 2013 of £18 psf. In 2015 we shall be
embarking on a substantial refurbishment
programme which will provide a new entrance and
refresh many of the common parts of the building.
At Artillery Lane, London E1 we expect to
complete the comprehensive refurbishment of this
17,000 sq ft office building in September 2015,
following which we will complete the sale of the
building at an agreed price of £15.1m.
This level of asset management activity has
contributed to a 27% valuation increase of the
London investment portfolio, which is now valued
at £370m (47% of the total investment portfolio).
Passing rents on the portfolio are £9.3m, but will
grow over the next few years towards its ERV,
now estimated to be £28.1m.
The Regional Portfolio
The regional investment and development portfolio
provides a growing stream of net rents from a high
yielding investment portfolio whilst contributing
development surpluses from the retirement village
and retail development programmes. The
investment portfolio has seen a major switch out of
secondary retail assets, acquired in 2010 and
2011, into high yielding distribution warehouses,
regional offices and out-of-town retail parks. We
have sold our shopping centres at Corby Town
Centre; Clyde Shopping Centre; The Guineas,
Newmarket; Idlewells Shopping Centre, Sutton-in-
Ashfield and Town Square Basildon. We now retain
just one in-town retail investment asset at The
Morgan Quarter, Cardiff, a prime retail asset
opposite the St David’s Shopping Centre. We have
reinvested the proceeds into 44 new regional
assets, primarily distribution warehouses
throughout the country but also offices in
Manchester, Bristol, Cobham and out-of-town retail
park units in Harrogate, Stockport, Great Yarmouth,
Southend, Stoke-on-Trent and other locations.
13
CHIEF ExECUTIVE’S STATEMENT continued
HELICAL BAR PLC REPORT & ACCOUNTS 2015
REGIONAL PORTFOLIO
Churchgate
& Lee House
Manchester
248,000 sq ft of offices
across 2 buildings and over 8 floors
14
STRATEGIC REPORT
Strategies
Investment strategy
The investment portfolio, which is mainly let and
income producing, has two main purposes:
• To provide a steady stream of rental income for
the Group; and,
• To produce above average capital growth over
the cycle to contribute to growth in the Group’s
net asset value.
We seek to achieve this through careful, disciplined
selection of properties which currently include
multi-let offices in London, distribution warehouses,
regional offices and mixed-use portfolios. Our key
aim, when undertaking this selection process, is to
ensure that there is sustainable demand from
potential occupiers for all of our assets. We look to
have a blend of London properties, where yields
are lower but the potential for capital growth
higher, and properties outside London where
surplus cash flow is greater.
We acquire properties where good management
can enhance value rather than relying simply on
market improvements.
We frequently refurbish and/or extend our
properties to create value. We also work closely
with tenants with the aim of maintaining maximum
occupancy in our properties. Our relationship with
tenants can lead to opportunities to increase value
through re-gearing leases or moving tenants within
a building as their businesses expand or contract.
STRATEGIC REPORT
Development strategy
The Group aims to limit the amount of equity that
it deploys into development situations through a
variety of different structures. The intention is 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. The
Group’s approach to development activities
includes:
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.
• Co-investment alongside a larger partner where
we have a minority equity stake, receiving a
“waterfall” payment whereby we obtain a
greater profit share than the percentage of our
investment, depending upon the profitability of
the project. This strategy is used for the
developments at Barts Square, The Bower and
Creechurch Place.
• Reduce up-front equity required by entering
into conditional contracts or options. We are
using this approach at Creechurch Place and
for our out-of-town retail development
programme, for example Cortonwood (where
land is optioned or put under contract which is
conditional upon achieving planning permission
and pre-lets to retailers), thereby mitigating the
risks of the developments.
• Participation in profit share situations where
little or no equity investment is required,
seeking to minimise any fixed base fee to
maximise our profit share so that our interests
are completely aligned with our partners. In this
way, for a minimal equity commitment, we can
benefit from a significant profit share if we
contribute to a project’s success by using our
skills and experience throughout the entire
development process.
Risk management starts at Board level where the
Directors set the overall risk appetite of the Group
and the risk management strategies. Helical’s
management runs the business within these
guidelines and part of its role is to act within
these strategies and to report to the Board on
how they are being operated.
The Group’s risk appetite and risk management
strategies are continually assessed by the Board
to ensure that they are appropriate and consistent
with the Group’s overall strategy and with external
market conditions. The effectiveness of the
Group’s risk management strategy is reviewed
every six months by the Audit Committee and by
the full Board.
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 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.
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.
The principal risks faced by the Group, and the
steps taken by the Group to mitigate these risks,
can be found in the Principal Risks Review on
pages 40 to 42.
Helical is a UK focused property company
investing in London for capital growth and
the regions for income.
15
HELICAL BAR PLC REPORT & ACCOUNTS 2015
STRATEGIC REPORT
Performance
We measure our performance using a
number of financial and non-financial
key performance indicators (“KPIs”).
We incentivise management to outperform the
Group’s competitors by setting appropriate 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.
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, which it has
consistently achieved. Helical’s ungeared
performance for the year to 31 March 2015 was
20.4% (2014: 23.8%) compared to the IPD
median benchmark of 17.5% (2014: 13.4%) and
upper quartile benchmark of 19.6% (2014: 15.4%).
Helical Bar portfolio unleveraged returns to
31 March 2015 are as follows:
20.4
17.5
17.4
1 year % pa
Helical’s Percentile Rank: 19
3 years
Helical’s Percentile Rank: 5
5 years
Helical’s Percentile Rank: 13
10 years
6.3
Helical’s Percentile Rank: 3
20 years
11.4
11.9
10.5
10.9
14.9
8.9
Helical’s Percentile Rank: 1
Helical IPD
Source: Investment Property Databank.
Helical’s trading & development portfolio (23% of
gross assets) is shown in IPD at the lower of book
cost or fair value and uplifts are only included on
the sale of an asset.
16
EPRA net asset value
per share (pence)
A property company’s share price should reflect
growth in net assets per share. The 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. Net asset value per share represents the
share of net assets attributable to each ordinary
share. Whilst the basic and diluted net asset value
per share calculations provide a guide to performance,
the property industry prefers to use an EPRA
adjusted net asset value per share to represent
the fair value of net assets on an ongoing long
term basis. The adjustments necessary to arrive at
this figure are shown in note 34 to these results.
Management is incentivised to exceed 15% pa
growth in net asset value per share.
The diluted net asset value per share, excluding
trading stock surplus, at 31 March 2015 increased
by 15.3% to 332p (2014: 288p). Including the
surplus on valuation of trading and development
stock, the EPRA net asset value per share at 31
March 2015 increased by 23.0% to 385p (2014:
313p). EPRA triple net asset value per share
increased by 17.0% to 364p (2014: 311p).
Total shareholder return
Total Shareholder Return is a measure of the
return on investment for shareholders. The table
demonstrates this return compared to various
indices. Over three, ten, fifteen, twenty and twenty
five years Helical’s Total Shareholder Return
exceeded that of the Listed Retail Estate Sector
Index and the IPD UK Monthly Index.
1 year total return % pa
7.6
6.6
22.8
18.3
10.6
11.4
30.6
24.0
3 years
5 years
5.2
8.3
15.7
10.3
10 years
7.3
7.7
4.7
5.9
15 years
4.5
11.4
20 years
25 years
8.1
7.7
7.9
8.3
8.6
8.7
6.8
7.8
13.8
13.4
Helical Bar plc
Growth to 31/03/15
UK Equity Market
Growth in FTSE All-Share Return Index to 31/03/15
Listed Real Estate Sector Index
Growth in FTSE 350 Real Estate Super Sector Return Index
over 1 year, 3 years, 5 years and 10 years to 31/03/15.
For data prior to 30 September 1999 FTSE All Share Real
Estate Sector Index has been used
IPD UK Monthly Index
Growth in Total Return of IPD UK Monthly Index
(All Property) to 31/03/15
HELICAL BAR PLC REPORT & ACCOUNTS 2015
PERFORMANCE continued
STRATEGIC REPORT
Investment/development
property ratio
Helical’s strategy is to hold approximately 75% of
its real estate assets as investment property and
25% as development property. Helical believes
that at this point in the property cycle, this ratio
provides us with sufficient investment return to
provide a steady income stream for our investors
but allows us to make ‘super-profits’ on our
development schemes.
0%
25%
50%
75%
100%
2015
2014
2013
Investment Development
Average length of employee
service (years)
High levels of staff retention remain a key feature
of Helical’s business. The Group retains a highly
skilled and experienced team. Below is the
average length of service of the Group’s UK
employees:
0
2
4
6
8
10
2015
2014
2013
→
BARTS SQUARE LONDON EC1
→
ONE KING STREET LONDON W6
17
HELICAL BAR PLC REPORT & ACCOUNTS 2015
PERFORMANCE continued
HELICAL BAR PLC REPORT & ACCOUNTS 2015
18
18
STRATEGIC REPORT
Helical’s property portfolio
STRATEGIC REPORT
Investment portfolio overview
Our £789.8m investment portfolio provides income
for the Group. We have a strong focus on asset
management, maximising net operating income
and working closely with our tenants.
Our aim is to have at least 75% of our portfolio in
investment properties and 25% in development
properties, blending stable recurring income with
exposure to potentially superior profitability in
developments. We currently have 77% of our
assets in investment properties and, having
realised our stated goal, we will look to broadly
retain this balance going forward.
Our income stream is diverse and secure with no
tenant accounting for more than 6.2% of the rent
roll. Our average weighted unexpired lease term is
7.0 years (2014: 7.2 years).
The income stream has grown steadily since 2010
and is highly reversionary. The passing rent from
our investment portfolio is £36.7m (2014:
£37.7m) and the estimated rental value of our
portfolio is £59.5m (2014: £45.6m). This
reversionary income will be captured through
letting vacant units and rent reviews.
The marginal fall in passing rent at 31 March
2015 reflects the impact of the sale of the
majority of our in-town retail portfolio, including
Corby Town Centre, Clyde Shopping Centre, the
Guineas Newmarket and Idlewells in Sutton-in-
Ashfield. These assets have been replaced with a
number of logistics purchases.
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.
Investment portfolio (Helical’s share)
PROJECT TYPE
LONDON OFFICES
REGIONAL OFFICES
INDUSTRIAL/LOGISTICS
RETAIL
RETIREMENT VILLAGES
TOTAL
Portfolio yields
LONDON OFFICES
REGIONAL OFFICES
INDUSTRIAL/LOGISTICS
RETAIL
TOTAL PORTFOLIO
BOOK VALUE
£M
370.2
103.5
145.7
159.1
11.3
789.8
%
46.9
13.1
18.5
20.1
1.4
100.0
EPRA NET
INITIAL YIELD
%
REVERSIONARY
%
EPRA ‘TOPPED-UP”
NET INITIAL YEILD
%
2.9
5.2
7.3
6.2
4.9
6.2
7.6
7.3
6.5
6.7
5.7
5.9
7.4
6.5
6.3
Note: this analysis excludes Barts Square, London EC1 and The Bower, Old Street, London EC1.
Valuation movements, portfolio weighting and changes to rental values
LONDON OFFICES
REGIONAL OFFICES
INDUSTRIAL/LOGISTICS
RETAIL
OTHER
TOTAL
WEIGHTING
%
46.9
13.1
18.5
20.1
1.4
100.0
VALUATION
INCREASE
%
ERV CHANGE SINCE
MARCH 2014
%
27.0
12.2
1.3
2.6
4.2
11.7
20.4
(0.9)
0.6
4.4
-
8.6
Note: includes sales, purchases and capital expenditure.
Capital values, vacancy rates and unexpired lease terms
LONDON OFFICES
REGIONAL OFFICES
INDUSTRIAL/LOGISTICS
RETAIL
TOTAL PORTFOLIO
CAPITAL
VALUE PSF
£
VACANCY RATE
BY AREA
%
AVERAGE UNEXPIRED
LEASE TERM
(YEARS)
331
189
59
189
146
26.8
7.9
0.3
2.2
5.1
7.0
5.8
4.8
7.9
7.0
Trading and development portfolio (Helical’s share)
BOOK VALUE
£M
FAIR VALUE
£M
SURPLUS
£M
FAIR VALUE
%
PROJECT TYPE
LONDON OFFICES
RESIDENTIAL
MIXED USE
REGIONAL OFFICES
RETAIL
RETIREMENT VILLAGES
POLAND
CHANGE OF USE
TOTAL
8.0
26.3
5.2
0.7
26.0
72.4
52.2
4.5
14.9
33.3
5.2
2.6
26.3
87.7
53.3
8.3
195.3
231.6
6.9
7.0
-
1.9
0.3
15.3
1.1
3.8
36.3
Note: the table above includes the Group’s share of development properties held in joint ventures.
6.5
14.4
2.2
1.1
11.4
37.9
23.0
3.5
100.0
19
→
KING STREET HAMMERSMITH W6
→
SHEPHERDS BUILDING LONDON W14
HELICAL BAR PLC REPORT & ACCOUNTS 2015
HELICAL’S PROPERTY PORTFOLIO continued
STRATEGIC REPORT
London portfolio
HELICAL BAR PLC REPORT & ACCOUNTS 2015
5
Enterprise House W2
45,000 sq ft office building
let to Network Rail
5
5
1
The Powerhouse W4
43,000 sq ft recording studio
4
1
2
3
One King Street W6
4
Shepherds Building W14
151,000 sq ft office building
2
King Street W6
500,000 sq ft mixed use
regeneration
20
CITY OF LONDONHOLBORNBOWISLINGTONBATTERSEA PARKKENSINGTON OLYMPIALONDON VICTORIASHEPHERD'S BUSHACTON CENTRALMARYLEBONE (LONDON)LONDON PADDINGTONVAUXHALL (LONDON)RICHMONDEALINGBERMONDSEYLAMBETHCAMBERWELLDEPTFORDBRIXTONPOPLARSOUTH ACTONLONDON EUSTONKENSAL GREENWILLESDEN JUNCTIONKEW BRIDGEWATERLOOROTHERHITHECANADA WATERKEWBLACKFRIARSLONDON CHARING CROSSFARRINGDON FENCHURCH STREET LIVERPOOL STREETLONDON BRIDGEOLD STREETWHITECHAPEL
HELICAL’S PROPERTY PORTFOLIO continued
HELICAL BAR PLC REPORT & ACCOUNTS 2015
STRATEGIC REPORT
8
C-Space EC1
62,000 sq ft office refurb
10
9
9
Chart House N1
23-28 Charterhouse Square
EC1
6
7
8
1111
Clifton Street EC1
12
Artillery Lane E1
10
The Bower
Old Street EC1
Office and retail refurb and
extension
14
13
14
One Creechurch Place EC3
271,000 sq ft offices
2,000 sq ft of retail
7
Barts Square EC1
244,700 sq ft of office space
236 residential apartments
16,300 sq ft of retail/leisure
13
New Loom House E1
112,000 sq ft office building
21
CITY OF LONDONHOLBORNBOWISLINGTONBATTERSEA PARKKENSINGTON OLYMPIALONDON VICTORIASHEPHERD'S BUSHACTON CENTRALMARYLEBONE (LONDON)LONDON PADDINGTONVAUXHALL (LONDON)RICHMONDEALINGBERMONDSEYLAMBETHCAMBERWELLDEPTFORDBRIXTONPOPLARSOUTH ACTONLONDON EUSTONKENSAL GREENWILLESDEN JUNCTIONKEW BRIDGEWATERLOOROTHERHITHECANADA WATERKEWBLACKFRIARSLONDON CHARING CROSSFARRINGDON FENCHURCH STREET LIVERPOOL STREETLONDON BRIDGEOLD STREETWHITECHAPEL
HELICAL’S PROPERTY PORTFOLIO continued
HELICAL BAR PLC REPORT & ACCOUNTS 2015
22
→
THE BOWER WORK STARTED
ON PHASE ONE IN JANUARY 2015
→
THE BOWER VIEW FROM OLD STREET
Z HOTEL
→
THE BOWER VIEW SOUTH TOWARDS
OLD STREET
→
THE BOWER NEW PUBLIC REALM
HELICAL BAR PLC REPORT & ACCOUNTS 2015
STRATEGIC REPORT
London portfolio
STRATEGIC REPORT
THE BOWER,
OLD STREET, 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 an area which has become
a “creative halo”, a district of London which is a
hub for technology, media and telecommunications
companies and which is benefitting from substantial
investment in infrastructure.
Since acquisition, a planning consent has been
obtained to increase the floor space on the site by
116,000 sq ft, to refurbish existing areas and
significantly upgrade the public realm with the
creation of a new pedestrian street.
Phase One
Building work started on phase one (211 Old Street)
in January 2014 comprising The Warehouse,
127,300 sq ft and The Studio, 22,109 sq ft, and is
due for completion in July 2015. During this
process rental income is still being received on
the retail parade and the office building at 207
Old Street. The basement area under the retail
parade has been let to Gym Box at a rent of
£150,000 pa.
Phase Two
Comprising The Tower (207 Old Street), planning
has been obtained to comprehensively refurbish
the existing building of 114,900 sq ft NIA,
increasing the building to 170,000 sq ft NIA of
office and 7,300 sq ft of retail/restaurant. Works
are due to commence in July 2015.
The current letting position on Phase One is as follows:-
TOTAL
SQ FT
LET
SQ FT
RENT
PSF
TENANTS
THE WAREHOUSE
OFFICES
122,000
24,434
£50.25
Farfetch
RESTAURANTS
5,300
4,862
Bone Daddies, The Draft House
127,300
29,116
The sixth, eighth and ninth floors of The Warehouse are under offer (29,601 sq ft).
THE STUDIO
OFFICES
18,363
18,363
£40.00-£45.00
John Brown Media
RESTAURANTS
3,746
3,746
Honest Burger, Enoteca da Luca
22,109
22,109
EMPIRE HOUSE
HOTEL
17,315
17,315
RESTAURANTS
3,411
3,411
20,726
20,726
£ PA
650,000
140,000
790,000
Z Hotels
Ceviche
23
HELICAL’S PROPERTY PORTFOLIO continued
24
HELICAL BAR PLC REPORT & ACCOUNTS 2015
HELICAL’S PROPERTY PORTFOLIO continued
STRATEGIC REPORT
London portfolio
STRATEGIC REPORT
BARTS SQUARE EC1
In joint venture with The Baupost Group LLC
(Baupost 66.7%, Helical 33.3%), we own the
freehold interest in land and buildings at
Bartholomew Close, Little Britain and Montague
Street, a 3.2 acre site adjacent to the new Barts
Hospital and just south of Smithfield Market.
Existing buildings are let to the NHS on a number
of short term leases that expire in 2016.
Planning consent has been obtained for a
comprehensive redevelopment of 19 buildings
to provide a total of 236 residential apartments,
three office buildings of 211,000 sq ft, 23,485 sq ft
and 10,200 sq ft, 16,300 sq ft of retail/restaurant
at ground floor as well as major public realm
improvements, which will be incorporated into
the wider Smithfield Area Strategy being worked
up by the City of London.
Phase One
Residential/offices/retail
Phase one of the redevelopment of Barts Square,
comprising 144 residential units, 10,200 sq ft of
retail space, 23,485 sq ft of new offices behind
retained facades, the refurbishment of offices at
54-58 Bartholomew Close and public realm
improvements. The demolition of buildings in
Bartholomew Close and Little Britain commenced
in January 2015, with the retention of various
façades behind which the buildings are being
demolished. Completion of phase one is expected
in summer 2017. 92 residential units were
launched in September 2014 and 64 have been
sold for a total sales value of c. £87m at an
average £1,574 psf.
Phase Two
One Bartholomew Close
Demolition of the existing buildings and the
construction of a new 12 storey office block of
c. 211,000 sq ft, to be called One Bartholomew
Close, will commence in 2016, once vacant
possession of the building is achieved. The
building is due to be completed in 2018.
Phase Three
Residential/retail
Phase three of the redevelopment of the site,
involving the demolition of Queen Elizabeth II
House, 62 Bartholomew Close and 45-47 Little
Britain is expected to commence after vacant
possession of these buildings is obtained at the
end of 2016. In their place, 92 residential units
and 10,700 sq ft of retail space will be
constructed.
→
ONE BARTHOLOMEW CLOSE VIEW TO ST PAULS
→
BARTS SQUARE PHASE 3 LITTLE BRITAIN
ONE & NINETY BARTHOLOMEW CLOSE OFFICES
→
BARTS SQUARE MIDDLESEX PASSAGE
Phase 2
Phase 1
Phase 1
Phase 3
25
HELICAL BAR PLC REPORT & ACCOUNTS 2015
HELICAL’S PROPERTY PORTFOLIO continued
STRATEGIC REPORT
London portfolio
HELICAL BAR PLC REPORT & ACCOUNTS 2015
New Loom House, Whitechapel E1
This 112,000 sq ft listed building was acquired in
2013 and Helical has secured planning consent
for a comprehensive refurbishment/reconfiguration
of the common parts to include a new entrance/
reception, showers, bike store, refurbishment of
c.15,000 sq ft of offices, including the creation of a
single 11,000 sq ft unit and 4,000 sq ft of café and
restaurants. The works are underway and are due
for completion in early 2016. Strong rental growth
is already being achieved with new lettings being
agreed at £37.50 psf compared to an average
passing rent of £22.00 psf. Further increases in
rents are anticipated as the opening of Crossrail
approaches.
Enterprise House, Paddington W2
Enterprise House, Paddington W2 is a freehold
investment adjacent to Paddington Station in London
comprising 45,000 sq ft of offices. The building was
acquired on a sale and lease back agreement from
Network Rail, which holds a 20 year lease without
breaks, for c. £31m representing a 5.7% yield
generating annual rental income of £1.8m.
Clifton Street, Shoreditch EC2
In November 2013, we committed to forward
purchase a new 45,000 sq ft office building in
Clifton Street, London EC2 for £21m. Since
contracting to acquire the building, Helical has
worked with the developer to achieve a revised
planning consent and to refine the building’s
specifications to ensure it meets the demands of
the Shoreditch tech occupiers. It was intended
that the Group would complete the freehold
purchase upon practical completion of the
construction in summer 2015. However, on 30
September 2014, Helical exchanged contracts on
the forward sale of Clifton Street for £38.25m,
allowing the Group to recognise development
profits of £16.4m in the year.
One King Street, Hammersmith W6
One King Street, Hammersmith W6 is a 35,000 sq
ft building acquired in 2012 comprising 22,000 sq
ft of offices and 13,000 sq ft of retail.
Refurbishment of the fourth floor and the addition
of a fifth floor of offices on top of the building is
expected to be completed by August 2015
providing 3,500 sq ft of extra space.
C-Space, 37-45 City Road EC1
Helical acquired C-Space in June 2013. Planning
consent has been obtained for a complete
refurbishment of the building which will increase
the existing 50,000 sq ft office building to 62,000
sq ft. The works involve an additional floor and
extensions to the third floor, a landscaped
courtyard and entrance “pavilion” to the rear and
full height glazing to the raised ground floor. Works
have commenced and are expected to complete by
August 2015. Significant interest is being shown
by prospective tenants and we expect to let c. 75%
of the new space before completion.
Artillery Lane, Bishopsgate E1
Artillery Lane, Bishopsgate E1 is an office building
in the City of London. The building is undergoing
work to provide 17,000 sq ft of newly refurbished
offices and a restaurant. Acquired for £6.8m in
2013 the property has been sold to Standard Life
for £15.1m once the refurbishment works which
will cost £3.2m are completed in September 2015.
A new 25 year lease with Manicomio has been
signed on the ground and lower ground floor to
operate the restaurant.
→
NEW LOOM HOUSE WHITECHAPEL E1
→
CLIFTON STREET SHOREDITCH EC2
→
C SPACE 37-45 CITY ROAD EC1
26
HELICAL’S PROPERTY PORTFOLIO continued
HELICAL BAR PLC REPORT & ACCOUNTS 2015
STRATEGIC REPORT
Shepherds Building,
Shepherds Bush W14
This 151,000 sq ft multi-let office building close to
the Westfield London shopping centre maintains
an occupancy approaching 100%, as it has for
seven consecutive years. The refurbishment of the
common parts including new receptions and a
café/bar is now complete. These works have given
the building a refresh and have been positively
received by occupiers. Significant rental growth is
beginning to be seen with ERV now c. £50 psf
compared to an average passing rent of £31.00
psf. The most recent significant letting in the
building in February 2015 was at £47.50 psf.
Chart House, Islington N1
Chart House is a 10,500 sq ft office building in
Islington which was acquired during the year. There
is currently planning consent for an additional floor
of residential on top of the building. It is our intention
to renegotiate the planning consent and add an extra
floor of office accommodation in place of the planned
residential upon getting vacant possession in 2018.
One Creechurch Place,
City of London EC3
Creechurch Place, London EC3 is a landmark City
office scheme in the heart of the insurance sector
in London. In May 2014, Helical signed a joint
venture agreement with HOOPP (Healthcare of
Ontario Pension Plan) to redevelop the site. Under
the terms of the joint venture, HOOPP and Helical
will jointly fund the project on a 90:10 split, with
Helical acting as development manager, for which
it will receive a promote payment depending on the
successful outcome of the scheme. It is anticipated
the completed development will have a capital
value of circa £250m. Demolition and ground
works have been completed to facilitate the
construction of a new building comprising 271,000
sq ft NIA of offices and 2,227 sq ft of retail, which
is expected to be completed in September 2016.
King Street, Hammersmith W6
King Street, Hammersmith W6 is a mixed use scheme,
in joint venture with Grainger plc, for the regeneration
of the west end of King Street. Planning permission
for the scheme was granted in April 2014 for 196
apartments, a three screen cinema to be operated
by Curzon, new retail, restaurant and café space
and replacement offices for the Council with a
new public square. During the period the joint
venture acquired the existing cinema which is now
let on a short term basis to the current operator.
Work is expected to commence in late 2015.
23-28 Charterhouse Square,
Smithfield EC1
In December 2014, Helical exchanged contracts to
acquire a new 155 year leasehold interest in 23-28
Charterhouse Square, London EC1 from the
Governors of Sutton’s Hospital in Charterhouse for
£16m. The Group plan to carry out a major
refurbishment of the existing building, increasing
the current 34,000 sq ft to 38,600 sq ft NIA of
offices and 5,350 sq ft of retail/restaurant use with
the addition of a new sixth floor. Works are due to
commence in December 2015 and the completed
building is expected to be delivered in late 2016.
NEW LOOM HOUSE WHITECHAPEL E1
CLIFTON STREET SHOREDITCH EC2
C SPACE 37-45 CITY ROAD EC1
→
SHEPHERDS BUILDING SHEPHERDS BUSH W14
→
ONE CREECHURCH PLACE CITY OF LONDON EC3
→
KING STREET HAMMERSMITH W6
→
23-28 CHARTERHOUSE SQUARE SMITHFIELD EC1
27
HELICAL’S PROPERTY PORTFOLIO continued
STRATEGIC REPORT
Regional portfolio
HELICAL BAR PLC REPORT & ACCOUNTS 2015
Our regional portfolio provides
significant income for the Group.
We have a broad spread of income
providing diversity between tenants
and sectors of the market.
Our £419.6m regional investment portfolio
comprises £103.5m of offices (13.1% of the
investment portfolio), £145.7m of industrial/
logistics (18.5%), £159.1m of retail comprising
£97.9m of retail warehousing and £61.2m of in
town retail, largely The Morgan Quarter, Cardiff
(in aggregate 20.1%) and £11.3m of retirement
village investment assets (1.4%).
6
Our strategy is to acquire multi-tenanted
properties where there is significant opportunity
to increase net operating income and capital
values. We acquire properties with rents which are
low compared to equivalent buildings, providing
scope for rental growth. We spend a considerable
amount of time talking to our tenants both prior to
acquiring properties and during the course of our
ownership to ensure that the space they occupy
continues to be fit for their purpose.
→
CARDIFF THE MORGAN QUARTER
→
CANNOCK LOGISTICS
→
CHEADLE OFFICES
→
WROCLAW POLAND PARK HANDLOWY MLYN
MANCHESTER CHURCHGATE AND LEE HOUSE
STOKE ON TRENT RETAIL PARK
28
HELICAL’S PROPERTY PORTFOLIO continued
STRATEGIC REPORT
Regional portfolio
Industrial and logistics
HELICAL BAR PLC REPORT & ACCOUNTS 2015
STRATEGIC REPORT
6
7
8
9
Distribution warehouses
Helical has 36 distribution and light industrial units located
around major UK transport networks. These units generally
have very few bespoke features making them straightforward to
re-let if vacancies occur. In the majority the assets are single let
with a few multi-let estates. Significant assets within the portfolio
include a 256,000 sq ft distribution warehouse let to Sainsbury’s
in Yate, Bristol, a 203,000 sq ft facility in Leighton Buzzard,
Bedfordshire, a 188,000 sq ft distribution warehouse in Hinckley,
Leicestershire let to Triumph Motorcycles and a 154,000 sq ft
distribution warehouse let to Polypipe in Doncaster, Yorkshire.
1
2
3
4
5
6
7
8
9
Key assets include:
Centrum 100 Burton Upon Trent
93,000 sq ft single let distribution centre
Let to a third party logistics provider
Walkmill Lane Cannock
154,000 sq ft single let distribution centre
Let to Nicholl Food Packaging
Aspect Way Doncaster
123,000 sq ft single let distribution centre
Let to Next
Kirk Sandalls Doncaster
154,000 sq ft single let distribution centre
Let to Polypipe
IO Centre Gloucester
63,000 sq ft single let distribution centre
Comprises five units let to four tenants
Triumph Motorcycle Works Hinckley
188,000 sq ft single let distribution centre
Let to Triumph Motorcycles
The Stanbridge Buildings
Leighton Buzzard
203,000 sq ft multi let industrial estate
Jeyes Distribution Centre Thetford
127,000 sq ft sq ft single let distribution centre
Let to Jeyes
Sainsbury’s Distribution Centre Yate
256,000 sq ft sq ft single let distribution centre
Let to Sainsbury’s
Locations for other industrial/logistics assets
3&4
7
1
2
6
5
9
8
29
HELICAL’S PROPERTY PORTFOLIO continued
ST VINCENT STREET GLASGOW
11
30
HELICAL BAR PLC REPORT & ACCOUNTS 2015
HELICAL’S PROPERTY PORTFOLIO continued
STRATEGIC REPORT
Regional portfolio
Office and retail
HELICAL BAR PLC REPORT & ACCOUNTS 2015
STRATEGIC REPORT
11
6
2
3
1
2
3
4
5
6
7
8
9
10
11
Key assets include:
The Morgan Quarter Cardiff
290,000 sq ft mixed use development
Let to tenants including White Stuff, Urban Outfitters,
Molton Brown, Jack Wills and Fred Perry
Huddersfield Retail Park Huddersfield
101,000 sq ft retail park
Tenants include Matalan, Dunelm, Aldi and B&M
Otford Road Retail Park Sevenoaks
42,000 sq ft retail park
Let to Wickes, Currys/PC World and Carpetright
London Road Retail Park Southend on Sea
75,000 sq ft retail park
Fully let to Homebase, Pets At Home and
Currys/PC World
Churchgate and Lee House Manchester
248,000 sq ft office building
Two iconic Grade II Listed interlinked office buildings
located in central Manchester
Dale House Manchester
42,000 sq ft office space
Grade II listed building located in the heart of
Manchester’s Northern Quarter
The Hub Glasgow
57,000 sq ft multi tenanted offices
Let to media tenants, adjacent to BBC Scotland
St Vincent Street Glasgow
220,000 sq ft office space
Development manager of new Scottish Power headquarters
Manor Park Reading
36,000 sq ft office buildings
Let to Thames Water
Manor Royal Crawley
48,000 sq ft office and industrial use building
Let to Curzon Estates
25 King Street Bristol
18,000 sq ft office building
Fully refurbished office building let to a variety of tenants
Locations for other office and retail assets
7&8
2
5&6
1
11
9
4
3
10
31
HELICAL’S PROPERTY PORTFOLIO continued
HELICAL BAR PLC REPORT & ACCOUNTS 2015
32
HELICAL’S PROPERTY PORTFOLIO continued
STRATEGIC REPORT
Regional portfolio
Office and retail
HELICAL BAR PLC REPORT & ACCOUNTS 2015
STRATEGIC REPORT
REGIONAL OFFICES
Churchgate and Lee House,
Manchester
Helical acquired Churchgate and Lee House, two
interlinked office buildings comprising 248,000 sq ft
of offices, in March 2014. We have refurbished the
reception, café and fourth floor of Churchgate
House and continue to reposition the asset.
Projects are underway to refurbish the first floor
of Lee House and the Courtyard Suite where we
hope to attract TMT Sector tenants. We are also
remodelling the reception of Lee House. Since
acquisition we have let in excess of 30,000 sq ft
and have a further 10,000 sq ft under offer.
Dale House, Manchester
Dale House is a 42,000 sq ft office building
situated in the Northern Quarter of Manchester.
It is fully let to a number of tenants at an average
rent of £12.00 psf and was acquired in March
2015 for £7.4m. The property is a long term hold
with plans to refurbish the building over time and
moving rents upwards as the location improves.
St Vincent Street, Glasgow
In partnership with local development partner,
Dawn Developments Ltd, Helical is the development
manager for the construction of the new headquarters
building for Scottish Power at St Vincent Street,
Glasgow. The completed building will comprise
circa 220,000 sq ft of prime office space in the
heart of the City’s commercial district. Funded by
M&G Investments, the scheme is under construction
and all works including Scottish Power’s fit out, are
due to be completed in February 2016. As part of
the overall deal, Helical is taking on three existing
Scottish Power sites which are surplus to requirements.
At Cathcart we have received planning permission
for a change of use of the grounds of Cathcart
House to 158 residential units and will look to sell
the site. At Yoker, we have agreed heads of terms
with a supermarket operator to sell the site and at
Falkirk we have agreed a sale of the site with
completion expected in October 2015.
RETAIL WAREHOUSING
We have acquired a number of retail warehouse
assets during the year including properties in
Harrogate, Stockport, Southend-on-Sea,
Scarborough, Ellesmere Port and Stoke-on-Trent.
We see good occupational demand in this sector
with vacancy levels at a long term low.
Cortonwood
Planning consent has been secured at appeal and
marketing is in hand for an 80,000 sq ft Open A1
non-food retail park. Negotiations are proceeding
with a number of leading fashion retailers and a
start on site is anticipated in January 2016, once
funding has been obtained.
RETAIL DEVELOPMENTS
Parkgate, Shirley, West Midlands
The Shopping Centre at Parkgate, Shirley, where
Helical has a 50% interest has completed on site
and the 80,000 sq ft Asda together with a number
of other retailers have opened successfully for
trade. The space beyond the food-store is 80%
pre-let to occupiers such as Peacocks, 99p Stores,
Pizza Express, Wetherspoons, Prezzo, Shoe Zone
and Shirley Library. Two residential sites have been
sold to provide 97 private and extra-care units, six
apartments and eight townhouses which are being
built out directly. The food-store has been pre-sold
to Asda and the retail units will be marketed for
sale once the remaining units are let.
A second phase high density residential led
scheme is being considered on a ten acre site
opposite the Parkgate scheme. Terms have been
agreed with a care home provider, a residential
developer and a supermarket operator for a petrol
filling station.
Truro
In Truro Helical has entered into a Conditional
Purchase Agreement on the six acre Truro City
Football Club site and have submitted a Planning
Application for a 78,000 sq ft non-food retail park.
The scheme proposals provide for the relocation of
the football club and, if approved, we anticipate
starting on site in May 2016.
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 Sports Direct, T K
Maxx, Media Expert, Makro, Deichmann, Smyk,
Komfort and others. We have agreed terms to sell
the development at a price marginally above book
value and expect to complete the sale by July 2015.
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 good accessibility and is
becoming 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 outlets. The scheme is now over 85% let to
Tesco, Castorama, H&M, Media Saturn, Sports
Direct, Jula and others. Construction was completed
in February 2013 and the scheme opened on 1 March
2013. Helical’s 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.
This is now expected to complete in July 2015.
→
MANCHESTER CHURCHGATE AND LEE HOUSE
→
→
CARDIFF THE MORGAN QUARTER
HARROGATE RETAIL
→
GLIWICE, POLAND EUROPA CENTRALNA
33
HELICAL’S PROPERTY PORTFOLIO continued
STRATEGIC REPORT
Retirement villages
HELICAL BAR PLC REPORT & ACCOUNTS 2015
Millbrook Village, Exeter
This 19 acre site was acquired in 2007 from the
St Loye’s Foundation, a long established
rehabilitation college in the City of Exeter.
Resolution to grant planning permission was
obtained in October 2009 for a retirement village
of 206 units, a 50 bed residential care home, an
affordable extra-care block of 50 units and a
central facilities clubhouse building. 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 in summer
2012. Construction of a 164 unit retirement
village and clubhouse in phases on the remainder
of the site commenced in October 2013. We have
sold seven units, have exchanged contracts on a
further four units and have reservations on 22
other units.
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 ensures
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.
The Group has four retirement village developments.
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 Helical has fully restored. The land
and buildings were derelict when we acquired the
site 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, has completed. To date,
we have sold 147 units with one reserved and just
three units, all apartments, left to sell.
Durrants Village, Faygate, Horsham,
West Sussex
Durrants Village, a 30 acre site, had operated as a
saw-mill with outside storage for many years.
Helical was granted planning permission, at
appeal, in May 2009 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 now comprise 173
units. The first phase started in May 2012 for the
construction of the retirement village and
clubhouse and we have sold 28 units, exchanged
on one further sale and have reservations on
10 additional units in the first two 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. Covering 82
acres, this site received outline planning
permission in April 2011 for a retirement village
of 164 units. Demolition and enabling works have
completed and construction is due to commence
shortly.
→
MAUDSLAY PARK GREAT ALNE
→
MILLBROOK VILLAGE EXETER
→
BRAMSHOTT PLACE LIPHOOK
34
HELICAL’S PROPERTY PORTFOLIO continued
STRATEGIC REPORT
Purchases, capital expenditure & sales
HELICAL BAR PLC REPORT & ACCOUNTS 2015
STRATEGIC REPORT
MAUDSLAY PARK GREAT ALNE
MILLBROOK VILLAGE EXETER
BRAMSHOTT PLACE LIPHOOK
Investment property portfolio values
At 31 March 2015, the investment property portfolio was valued at £789.8m (31 March 2014: £600.7m), with £701.5m (31 March 2014: £493.2m) held in
wholly owned subsidiaries and £88.3m (31 March 2014: £107.5m) held in joint ventures, as set out below.
VALUATION AT 31 MARCH 2014
ACQUISITIONS
CAPITAL EXPENDITURE
DISPOSALS
TRANSFER TO STOCK
REVALUATION SURPLUS - HELICAL
- PROFIT SHARE PARTNERS
VALUATION AT 31 MARCH 2015
WHOLLY OWNED
£000
IN JOINT VENTURE
£000
493,201
245,656
25,437
(130,729)
-
66,904
1,052
701,521
107,504
-
15,698
(40,515)
(20,516)
26,134
-
88,305
SEE-THROUGH
£000
600,705
245,656
41,135
(171,244)
(20,516)
93,038
1,052
789,826
Acquisitions and sales
It has been another extremely active year of buying
and selling. During the year we have acquired 58
properties, the equivalent of one purchase every six
days. In aggregate, we have acquired £276.7m of
assets (including costs) with £245.7m added to
our investment portfolio and £31.0m traded out of
portfolios, either on acquisition or shortly
afterwards. Net sales values totalled £211.2m with
£133.8m of net proceeds from the sale of
investment properties, £41.4m being our share of
the net proceeds of the sale of Clyde Shopping
Centre and £36.0m being the net proceeds from
the sale of trading properties. Including capital
expenditure of £41.1m, this represents a net
investment in investment assets of £106.6m.
During the year we acquired five portfolios of
industrial/logistics, out-of-town retail and office
investments. In April 2014 we acquired The
Constellation Portfolio, a mixed-use portfolio for
£40.2m reflecting an 8.35% net initial yield. In
August we acquired a portfolio of eleven industrial
and distribution warehouse assets, known as the
Boss Portfolio, for £29.7m, reflecting a net initial
yield of 8.0% (excluding a vacant property at
Rugby which was subsequently sold). In December
we acquired the Sun and Mint Portfolios for
£46.6m, reflecting a net initial yield of 7.9%. The
Sun Portfolio comprised three single let units and
two multi let industrial estates of eight units. We
also acquired the 4:2 Portfolio for £22.1m
reflecting a net initial yield of 8.3%. This comprised
three office properties and two industrial properties
(excluding an office in Southampton which was sold
on completion of the purchase). In addition we have
purchased two retail warehouses in Harrogate and
Stockport for £12.1m at a net initial yield of 6.95%
and a regional distribution warehouse in Yate, Bristol,
for £11.5m at a net initial yield of 10.1%. We have
also acquired a distribution facility in Leighton
Buzzard for £9.9m at a net initial yield of 7.85% and
a distribution warehouse in Hinckley, Leicestershire
for £9.5m at a net initial yield of 7.75%, as well as a
number of smaller assets.
The most significant sales have been of our shopping
centres, including Corby for £71.7m, Clydebank for
£69.7m (Helical’s share 60%), Newmarket for
£18.2m and Sutton-in-Ashfield for £16.1m. This has
concluded our move out of in-town retail.
Capital Expenditure
We have a refurbishment and redevelopment programme upgrading and increasing space at a number of our investment properties.
PROPERTY
THE BOWER, OLD ST, LONDON EC1
NEW LOOM HOUSE, LONDON E1
CHURCHGATE & LEE HOUSE, MANCHESTER
ONE KING STREET, HAMMERSMITH, LONDON W6
C SPACE, LONDON EC1
ARTILLERY LANE, LONDON E1
CAPEX BUDGET
(HELICAL SHARE)
£M
15.9
4.7
1.5
2.9
12.5
3.2
CURRENT
TOTAL
SPACE
SQ FT
285,000
112,000
248,000
35,000
50,000
17,000
REFURBISHED
SPACE
SQ FT
116,000
20,000
66,000
5,000
50,000
17,000
NEW SPACE
SQ FT
53,000
-
-
4,000
12,000
2,000
COMPLETION
DATE
July 2015
April 2016
October 2015
August 2015
August 2015
September 2015
35
HELICAL’S PROPERTY PORTFOLIO continued
STRATEGIC REPORT
Asset management review
During the year contracted income increased by £1.1m as a result of new lettings and rent reviews, net of any losses from breaks and expiries (2014: £0.4m).
There was significant activity within the investment portfolio with a lease event on over 200 leases.
We concluded £5.1m of new lettings and uplifts at renewal (12.2% rent roll) and benefited from uplifts at rent review of £0.1m (0.3% rent roll), offsetting the
loss of rent at lease end or break (£4.0m, 9.6% rent roll) and a further £0.1m through tenant administrations (0.3% rent roll).
RENT LOST AT BREAK/EXPIRY
RENT LOST TO ADMINISTRATIONS
RENT REVIEWS
LEASE RENEWALS AND NEW LETTINGS
TOTAL CHANGE
(£4.0m)
(£0.1m)
£0.1m
£5.1m
£1.1m
Overall we have seen good letting demand across the portfolio, maintaining our vacancy rate around 5.0% (31 March 2014: 4.6%). Approximately £1m of rent
has deliberately been forgone as properties are vacated for redevelopment and refurbishment. We have seen strong take up and rental growth in our London
office portfolio with estimated rental values increasing by 20.4% in the year for our London portfolio (excluding Barts Square, London EC1, which will be
redeveloped).
Lease expiries or tenant break options
% OF RENT ROLL
NUMBER OF LEASES
AVERAGE RATE PER LEASE (£)
YEAR TO MARCH
2016
YEAR TO MARCH
2017
YEAR TO MARCH
2018
YEAR TO MARCH
2019
YEAR TO MARCH
2020
9.0
76
49,100
14.0
86
67,400
10.7
68
12.6
37
11.4
34
65,000
141,000
139,000
We have a strong rental income stream and a diverse tenant base, with no single tenant accounting for more than 6.2% of the rent roll. The top 10 tenants
account for 33% of the total rent roll and the tenants come from diverse industries.
RANK
TENANT
1
2
3
4
5
6
7
8
9
ENDEMOL UK
NETWORK RAIL INFRASTRUCTURE
DSG RETAIL
HOMEBASE
SAINSBURY'S SUPERMARKETS
ECONOMIC SOLUTIONS
B&Q
TRIUMPH MOTORCYCLES
NICHOLL FOOD PACKAGING
TENANT INDUSTRY
Media
Infrastructure
Retail
Retail
Retail
Government
Retail
Manufacturing
Manufacturing
10
CAPITA LIFE & PENSIONS REGULATED SERVICES
Professional Services
RENT (HELICAL)
£M
RENT ROLL
%
2.3
2.0
1.3
1.3
1.3
1.0
0.8
0.8
0.8
0.8
6.2
5.5
3.5
3.5
3.5
2.6
2.1
2.1
2.1
2.1
TOTAL
12.4
33.2
36
HELICAL BAR PLC REPORT & ACCOUNTS 2015
STRATEGIC REPORT
Financial review
STRATEGIC REPORT
REVIEW OF THE YEAR
The main areas that we focused on in the year to 31 March 2015 were to
drive growth in rents through asset management, to increase our exposure to
London assets where we see continued growth in rental and capital values,
to grow the overall size of our regional portfolio and to switch out of
secondary shopping centres and into high yielding distribution warehouses,
out-of-town retail parks and offices.
The results for the year, having delivered on these initiatives, have created
growing rental surpluses, significant revaluation gains on the investment
portfolio and profits from the development programme in London and are
reflected in pre-tax profits of £87.4m (2014: £101.7m) and shareholders’
funds which increased by 19% in the year to 31 March 2015. The Group’s
portfolio, including its share of property held in joint ventures, increased to
£1,021m (2014: £802m), largely the result of investment property
acquisitions during the year funded by a £100m Convertible Bond plus
substantial revaluation surpluses. This expansion of the Group’s activities has
resulted in an increase in its loan to value to 52% (2014: 46%) and an
increase in balance sheet gearing to 132% (2014: 107%).
During the year the Group continued to lengthen and diversify its borrowings
profile. New secured borrowings included an £81m 10 year fixed rate
investment facility, supplemented by the issue of a five year unsecured
Convertible Bond, raising a further £100m. These new sources of funding
enabled the Group to extend its overall debt maturity profile to 4.3 years
(2014: 3.9 years), with a reduced weighted average cost of debt of 4.1%
(2014: 4.5%).
At 31 March 2015, the Group had unutilised bank facilities of £93m and
£136m of cash. These facilities are available to fund the Group’s retirement
village development programme, refurbishment works at C-Space, London
EC1, The Bower, Old Street, London EC1 and the phase one construction
works at Barts Square, London EC1.
EPRA Earnings
EPRA Earnings is a measure of operational performance representing the net
income generated from a company’s operational activities. These activities
exclude gains on the sale and revaluation of investment properties, trading
property gains and losses and fair value movements of assets and liabilities, most
notably in respect of derivative financial instruments, net of associated tax. The
measure, as defined by the European Public Real Estate Association, does not
make any adjustment for additional costs associated with such excluded gains,
the most notable of which are performance related awards. At Helical such
awards derive from all sources of profits and gains and, accordingly, to provide a
more meaningful comparison, an Adjusted Earnings per share is noted below,
which is calculated on earnings before the charge for performance related
awards relating to those items excluded from this measure.
EPRA Earnings per share were 2.4p (2014: 33.3p), reflecting the Group’s
share of net rental income of £38.6m (2014: £29.8m), development profits
of £17.6m (2014: £65.0m) and excluding gains on sale and revaluation of
investment properties of £96.6m (2014: 45.0m) and trading profits of £2.5m
(2014: £0.3m). After adding back performance related awards of £15.6m
(2014: £11.6m), Adjusted Earnings per share were 16.0p (2014: 43.3p).
EPRA EARNINGS
EPRA EARNINGS AS PER NOTE 14
31.03.15
£000
31.03.14
£000
2,805
38,934
ADD PERFORMANCE RELATED AWARDS
15,647
11,613
ADJUSTED EARNINGS
EPRA EARNINGS PER SHARE
ADJUSTED EARNINGS PER SHARE
18,452
50,547
2.4p
16.0p
33.3p
43.3p
EPRA Net Asset Value
EPRA net asset value per share increased by 23.0% to 385p per share
(2014: 313p). This rise was principally due to a total comprehensive income
of £74.9m (2014: £86.7m), plus an increase in the surplus on valuation of
the trading and development stock to £36.2m (2014: £27.5m).
EPRA NET ASSET VALUE
31.03.15
£000
31.03.15
PER SHARE
p
31.03.14
£000
31.03.14
PER SHARE
p
NET ASSET VALUE
404,098
332 340,382
288
EPRA ADJUSTMENTS FOR:
FAIR VALUE OF TRADING AND
DEVELOPMENT STOCK,
INCLUDING IN JOINT VENTURES
36,243
27,479
FAIR VALUE OF FINANCIAL
INSTRUMENTS
FAIR VALUE OF CONVERTIBLE
BOND
8,568
3,263
(243)
-
DEFERRED TAX
16,956
2,444
EPRA NET ASSET VALUE
469,128
385 370,062
313
Rental income and property overheads
Gross rental income receivable by the Group in respect of wholly owned
properties increased by 27.7% to £38.3m (2014: £30.0m). The Group’s share
of gross rents receivable in joint ventures reduced to £6.1m (2014: £6.6m)
reflecting the termination of leases at Barts Square, London EC1 where the
phase one residential development has commenced. See-through gross rents
totalled £44.4m, an increase of 21.4% on 2014. After taking account of head
rents payable on those properties held on long leases, and the costs of
managing the assets, void costs and letting costs, see-through net rents
increased by 29.5% to £38.6m (2014: £29.8m). Bad debts from tenant
administrations and failures fell below 0.1% of gross rents (2014: 0.4%).
Development programme
Development profits were down on last year, which had seen exceptional
profits at 200 Aldersgate London and White City of £62m. This year we have
recognised 95% of the profit on the Clifton Street, London EC2 forward sale to
UBS (Triton), amounting to £16.4m and development management fees on our
Barts Square, London EC1 The Bower, Old Street, London EC1 and One
Creechurch Place, London EC3 developments, totalling £1.1m. In addition, our
development management role in building the new Scottish Power
headquarters in Glasgow has generated fees of £1.3m. In our joint ventures we
have recognised £1.9m of development profit on our schemes at Leisure Plaza
and C4.1, both in Milton Keynes. Our retirement village programme contributed
£1.0m of profits. Set against these profits is an impairment of £3.0m against
our retail development at Europa Centralna, Poland and a provision against a
site in Telford of £1.0m.
Share of results of joint ventures
Helical has increasingly sought to acquire larger assets in joint ventures with
property funds that provide the majority of the equity required to purchase the
assets, who in turn rely on Helical to provide the asset management or
development expertise. These joint ventures include our share of the investment
properties at Clyde Shopping Centre, Clydebank (sold in March 2015) and The
Bower, Old Street, London EC1, and our development schemes at Barts
Square, London EC1; One Creechurch Place, London EC3; Europa Centralna,
Gliwice, Poland; Shirley Town Centre, West Midlands; Leisure Plaza, Milton
Keynes and King Street, London W6. Detailed analysis of the financial position
of our share of these joint ventures is provided in note 19 to this report and in
the see-through analysis on pages 114-116. In the year under review, net
rents of £4.4m (2014: £5.4m) were received, offset by net finance costs of
£3.6m (2014: £2.5m). A gain on revaluation of the investment portfolio of
£26.1m (2014: £15.7m), primarily arose in respect of Barts Square, London
EC1 and The Bower, Old Street, London EC1. Net of taxes, our joint ventures
contributed £27.5m (2014: £16.4m).
37
HELICAL BAR PLC REPORT & ACCOUNTS 2015 FINANCIAL REVIEw continued
Administration costs
Administration costs, before performance related awards, increased by 16%,
from £8.8m to £10.2m. This reflects an increase in the number of asset
managers and development executives within the Group as it expands its
investment portfolio and moves through the delivery phase of its development
portfolio as well as from costs incurred in connection with the move of the
Company’s head office to Hanover Square, London W1S.
Performance related share awards and bonus payments, before National
Insurance costs, reduced to £13.4m (2014: £15.7m) for the year. Of this
amount, the £6.4m (2014: £6.3m) 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 £6.9m (2014: £9.4m) accrual for bonus payments comprises
£5.8m (2014: £5.1m) which will be paid in June 2015, £nil (2014: £2.9m)
which will be carried forward to next year in accordance with the terms of the
Annual Bonus Scheme 2012 and £1.1m (2014: £1.4m) which will be paid in
deferred shares to be held for a minimum of three years. In addition, National
Insurance of £3.0m (2014: £2.2m) has been accrued in the year.
ADMINISTRATION COSTS
SHARE AWARDS
DIRECTORS AND SENIOR EXECUTIVES
BONUSES
NIC ON SHARE AWARDS AND BONUSES
TOTAL
2015
£000
10,156
6,432
6,920
3,022
26,530
2014
£000
8,816
6,333
9,357
2,170
26,676
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 increased to £24.7m (2014:
£17.3m), reflecting the increased debt taken on to finance the expansion of
the Group’s investment activities.
The fall in medium and long term interest rate projections since 31 March 2014
contributed to a charge of £8.4m (2014: credit of £5.3m) on the derivative
financial instruments which have been valued on a mark to market basis.
Debt profile at 31 March 2015 – excluding the effect of arrangement fees
Capitalised interest increased from £2.8m to £3.6m as development
schemes progressed. Other interest payable increased from £2.5m to £6.3m
as the Group wrote off £2.8m of costs incurred in issuing the £100m
Convertible Bond. As a consequence of these movements, total finance costs
increased by £10.3m from £17.0m to £27.3m. Finance income earned was
£2.5m (2014: £1.2m).
Taxation
The deferred tax charge for the year is principally derived from the revaluation
surpluses recognised in the year offset by tax losses which the Group believe
will be utilised against profits in the foreseeable future.
Investment portfolio
The issue of the £100m Convertible Bond in June 2014, together with sales
of over £170m of investment assets, mainly shopping centres where our
asset management initiatives were completed, provided funds, net of loan
repayments, for £246m of acquisitions and £41m of further value enhancing
capital expenditure. Revaluation surpluses of £68m (£1m attributable to our
profit share partners) in our main portfolio and £26m in our joint venture
assets, increased the overall size of the investment portfolio on a see-through
basis to £790m (2014: £601m). The sales of investment assets generated
profits of £2.5m (2014: £8.6m) in the main portfolio and £1.1m (2014: £nil)
in our joint ventures.
Debt and financial risk
Since 31 March 2014, the Group has raised £100m through the issue of a
five year Convertible Bond with a 4.0% coupon and £81m of long term debt
repayable in December 2024 with a fixed interest rate of 3.48%. The composition
of the Group’s debt structure has significantly changed since 31 March 2014
with unsecured debt now representing 27% of debt drawn at 31 March 2015.
In total, Helical’s outstanding debt at 31 March 2015 of £674.6m had an
average maturity of 4.3 years (2014: 3.9 years) and a weighted cost of 4.1%
(2014: 4.5%).
FACILITY TYPE
TOTAL
FACILITY
£000
TOTAL
UTILISED
£000
SECURED DEBT - INVESTMENT FACILITIES
395,127
372,198
- DEVELOPMENT AND SITES
TOTAL WHOLLY OWNED
IN JOINT VENTURES
TOTAL SECURED DEBT
UNSECURED DEBT - RETAIL BOND
- CONVERTIBLE BOND
- WORKING CAPITAL
FAIR VALUE ADJUSTMENT OF CONVERTIBLE BOND
TOTAL UNSECURED DEBT
TOTAL SEE-THROUGH DEBT
68,300
463,427
109,936
573,363
80,000
100,000
10,666
3,263
193,929
767,292
47,365
419,563
71,158
490,721
80,000
100,000
666
3,263
183,929
674,650
*Net LTV is the ratio of gross borrowings less cash deposits to the fair value of the property portfolio.
AVAILABLE
FACILITY
£000
22,929
20,935
43,864
38,778
82,642
-
-
10,000
-
10,000
92,642
NET LTV*
%
WEIGHTED AVERAGE
INTEREST RATE
%
AVERAGE
MATURITY
YEARS
58.2
53.2
35.9
27.0
34.1
-
-
-
-
-
52.1
3.7
3.7
3.7
4.5
3.8
6.0
4.0
-
4.9
4.1
4.6
2.0
4.3
3.0
4.1
5.2
4.2
-
4.6
4.3
38
HELICAL BAR PLC REPORT & ACCOUNTS 2015
FINANCIAL REVIEw continued
STRATEGIC REPORT
The Group arranges its 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 2015 was £639.0m (2014: £486.3m) with a
corresponding loan to value of 58% (2014: 53%). The average maturity of the
Group’s investment facilities at 31 March 2015 was 4.6 years (2014: 3.7
years).
Development and site holding facilities
These facilities finance the construction of the retirement villages at Durrants
Village, Horsham, Maudslay Park, Great Alne and Millbrook Village, Exeter.
They also include a site holding facility at Telford. The average maturity of the
Group’s development and site holding facilities at 31 March 2015 was 2.0
years (2014: 3.0 years).
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.
During the year we agreed a new five year facility to December 2019
providing finance for the first phase of the redevelopment of Barts Square,
London EC1. The average maturity of the Group’s share of bank facilities in
joint ventures at 31 March 2015 was 3.0 years (2014: 2.5 years).
Retail Bond
In June 2013, the Group raised £80m from the issue of an unsecured Retail
Bond with a 6.00% coupon. This bond is repayable in June 2020.
Convertible Bond
In June 2014, the Group raised £100m from the issue of an unsecured
Convertible Bond with a 4.0% coupon, repayable in June 2019 or, subject to
certain conditions, convertible at the option of the bondholders into ordinary
shares, unless a cash settlement option is exercised by the Company. The
initial conversion price has been set at £4.9694 per share, representing a
35% premium above the price on the day of the issue and a premium of 59%
above the Company’s EPRA net asset value per share at 31 March 2014.
Short term working capital facilities
These facilities provide working capital for the Group.
Net borrowings and gearing
Net borrowings held by the Group have increased during the year from
£312.8m to £477.2m. Including the Group’s share of net debt of its joint
ventures the Group’s share of total net debt has increased from £365.1m to
£531.9m. There has been a corresponding increase from 99% to 113% in
see-through net asset value gearing. This gearing measure, which is the ratio
of see-through net borrowings to EPRA net asset value, represents a longer
term view than the standard gearing measure.
NET BORROwINGS AND GEARING
2015
2014
NET BORROWINGS – INCLUDING JOINT
VENTURES
NET ASSETS
GEARING – GROUP
GEARING – INCLUDING JOINT VENTURES
SEE-THROUGH NET ASSET VALUE GEARING
£531.9m
£365.1m
£404.4m
£340.5m
118%
132%
113%
92%
107%
99%
Hedging
At 31 March 2015 the Group had £496.9m (2014: £291.5m) of fixed rate
debt with an average effective interest rate of 4.4% (2014: 4.8%) and
£98.1m (2014: £84.6m) of floating rate debt with an average effective
interest rate of 2.4% (2014: 3.50%). In addition, the Group had £143.2m of
interest rate caps at an average of 4.0% (2014: £132m at 4.0%). In the joint
ventures, the Group’s share of fixed rate debt was £49.6m (2014: £29.6m)
with an average effective interest rate of 5.0% (2014: 6.0%), and £21.6m
(2014: £43.6m) of floating rate debt with an effective rate of 3.4% (2014:
3.3%). In addition, the joint ventures benefited from £35.0m (2014: £49.0m)
of interest rate caps at an average of 5.0% (2014: 5.0%).
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
2015, this interest cover was 2.5 times (2014: 8.3 times).
SEE-THROUGH NET OPERATING INCOME
SEE-THROUGH NET FINANCE COSTS
INTEREST COVER
2015
£62.7m
£24.8m
2.5x
2014
£103.1m
£12.3m
8.3x
Cash and cash flow
At 31 March 2015, the Group had over £229m (2014: £186m) of cash and
agreed, undrawn, committed bank facilities including its share in joint ventures
as well as £131m (2014: £82m) of uncharged property on which it could
borrow funds.
Tim Murphy
Finance Director
12 June 2015
39
FACILITY TYPE
SECURED DEBT - INVESTMENT FACILITIES
395,127
372,198
- DEVELOPMENT AND SITES
TOTAL WHOLLY OWNED
IN JOINT VENTURES
TOTAL SECURED DEBT
UNSECURED DEBT - RETAIL BOND
- CONVERTIBLE BOND
- WORKING CAPITAL
FAIR VALUE ADJUSTMENT OF CONVERTIBLE BOND
TOTAL UNSECURED DEBT
TOTAL SEE-THROUGH DEBT
68,300
463,427
109,936
573,363
80,000
100,000
10,666
3,263
193,929
767,292
47,365
419,563
71,158
490,721
80,000
100,000
666
3,263
183,929
674,650
*Net LTV is the ratio of gross borrowings less cash deposits to the fair value of the property portfolio.
TOTAL
FACILITY
£000
TOTAL
UTILISED
£000
WEIGHTED AVERAGE
INTEREST RATE
AVERAGE
MATURITY
YEARS
AVAILABLE
FACILITY
£000
22,929
20,935
43,864
38,778
82,642
-
-
-
10,000
10,000
92,642
NET LTV*
%
58.2
53.2
35.9
27.0
34.1
-
-
-
-
-
52.1
%
3.7
3.7
3.7
4.5
3.8
6.0
4.0
-
4.9
4.1
4.6
2.0
4.3
3.0
4.1
5.2
4.2
-
4.6
4.3
HELICAL BAR PLC REPORT & ACCOUNTS 2015
STRATEGIC REPORT
Principal risks review
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 risk management strategies. Helical’s management
runs the business within these guidelines and part of its role is to act within
these strategies and to report to the Board on how they are being operated.
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 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.
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.
The principal risks faced by the Group, and the steps taken by the Group
to mitigate these risks, are as follows:
The Group’s risk appetite and risk management strategies are continually
assessed by the Board to ensure that they are appropriate and consistent
with the Group’s overall strategy and with external market conditions. The
effectiveness of the Group’s risk management strategy is reviewed every
six months by the Audit Committee and by the full Board.
40
HELICAL BAR PLC REPORT & ACCOUNTS 2015STRATEGIC RISK Strategic risk includes the risk that the Group’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. RISK DESCRIPTIONMITIGATION/ACTIONGroup’s strategy is inconsistent with market conditions, for example:- 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 Management constantly monitors and considers changes to the Group strategy in the light of any changes to market conditions. The management team is very experienced and has a good track record in the property marketDue to the small size of the Group and the management team, changes to the strategy can be effected quicklyMARKET RISK Market risks are risks specific to the economy as a whole and to the property sector. RISK DESCRIPTIONMITIGATION/ACTIONProperty values decline Helical management reviews external dataHelical has been active in disposing of non-performing assets and rebalancing its portfolio for the changing marketHelical keeps a diversified portfolio to prevent being over-exposed to one sectorReduced tenant demand for spaceOur focus is on buying well let investment properties in good locationsWe continue to ensure that vacant space is kept to a minimumAppropriate timing of investment and divestment decisionsOur management team is highly experiencedMarket conditions result in difficulties in divestment of properties at a time when the proceeds are required for new investmentsManagement constantly reviews the market conditions PRINCIPAL RISkS REVIEw continued
STRATEGIC REPORT
41
HELICAL BAR PLC REPORT & ACCOUNTS 2015STRATEGIC RISK Strategic risk includes the risk that the Group’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. RISK DESCRIPTIONMITIGATION/ACTIONGroup’s strategy is inconsistent with market conditions, for example:- 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 Management constantly monitors and considers changes to the Group strategy in the light of any changes to market conditions. The management team is very experienced and has a good track record in the property marketDue to the small size of the Group and the management team, changes to the strategy can be effected quicklyMARKET RISK Market risks are risks specific to the economy as a whole and to the property sector. RISK DESCRIPTIONMITIGATION/ACTIONProperty values decline Helical management reviews external dataHelical has been active in disposing of non-performing assets and rebalancing its portfolio for the changing marketHelical keeps a diversified portfolio to prevent being over-exposed to one sectorReduced tenant demand for spaceOur focus is on buying well let investment properties in good locationsWe continue to ensure that vacant space is kept to a minimumAppropriate timing of investment and divestment decisionsOur management team is highly experiencedMarket conditions result in difficulties in divestment of properties at a time when the proceeds are required for new investmentsManagement constantly reviews the market conditionsFINANCIAL RISK The Group is subject to a number of financial risks due to the way in which it is funded. RISK DESCRIPTIONMITIGATION/ACTIONAccuracy of property valuationsHelical uses external independent valuers and/or members of executive management with extensive experience in the industry. Management maintains regular contact with valuers to understand movements in valuationsInability to roll over loansGood relationship with several established lending institutionsBorrowing is spread between a number of different institutionsWe arrange debt repayment dates to spread the maturity profile of bank loans over several yearsAvailability of bank lendingFunding requirements are regularly reviewedIncrease in cost of borrowingInterest rates on 82% of loans are hedgedHedging is regularly monitored to ensure that it remains at an appropriate levelUse of interest rate swaps and caps where appropriateBreaching loan covenantsAdherence to loan covenants is closely monitored with reference to both current and forecast complianceBreaching covenants of the retail bondAdherence to the retail bond covenants is closely monitoredInsufficient liquidity to take advantage of opportunitiesThe Group maintains a sufficient level of cash resources or undrawn committed bank facilitiesManagement ensures that cash resources do not fall below current forecast requirementsMaintaining income streams/tenant defaultTenant covenant strength is considered when making property decisionsManagement maintains dialogue with managing agents and tenants to reduce the risk of unexpected non-paymentManagement ensures there is no over-reliance on individual tenantsInappropriate capital structure (i.e. too highly geared)The Group’s capital structure and gearing is constantly monitored to ensure that they reflect investment/development intentions and the Board’s view on the property cycleLoss of deposits due to banking counterparty failureManagement ensures that all deposits remain at well capitalised institutionsRegular monitoring of financial institutions
PRINCIPAL RISkS REVIEw continued
42
HELICAL BAR PLC REPORT & ACCOUNTS 2015PEOPLE RISK The Group’s continued success is reliant on our management and staff and successful relationships with our joint venture partners.RISK DESCRIPTIONMITIGATION/ACTIONSuccession planningThe Nominations Committee and the Board regularly review succession planning issuesLack of the right personnel to ensure the Group’s strategy is adhered toSenior management team is very experiencedThe Directors monitor staff resources to ensure they are appropriate to any changes in the businessRetention and incentivisation of key personnelRemuneration is set to attract, motivate and retain high calibre staffEmployee turnover is lowHealth & safety issuesThe Group’s Health and Safety policy is updated annually by the Board and reports are reviewed monthly by the Executive Committee and at every Board meetingUse of specialist professional adviceNot involved in high risk activitiesNo significant issues reported in the yearBribery and corruption riskAnti-bribery policy and procedures are in place which are distributed to all staff. The Board is firmly behind the Group’s anti-bribery stanceManagement identify and monitor projects with a greater exposure to bribery and corruptionWe avoid doing business in high risk territoriesDEVELOPMENT RISK 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.RISK DESCRIPTIONMITIGATION/ACTIONInability to add to the current development pipelineExperienced development team with an excellent track recordGood reputation in the property sectorInability to manage current developmentsExperienced development team recently expanded to ensure adequate resources availableChanges in legislation leading to delays in receiving planning permissionGood relationships with planning consultants and local authoritiesManagement keeps up to date with planning legislationUse of specialist professional advisorsLack of demand for new propertyThe Group’s strategy is to avoid doing speculative developments on its own balance sheetInability to find suitable contractors/JV partnersWell established network of contractors, joint venture partners and professional advisors Counterparty risk (contractors, joint venture partners, contract parties)Management monitors counterparties to review their ability to meet their obligations and to monitor the likelihood that they will become insolvent
PRINCIPAL RISkS REVIEw continued
BARTS SQUARE LONDON EC1
STRATEGIC REPORT
STRATEGIC REPORT
43
HELICAL BAR PLC REPORT & ACCOUNTS 2015PEOPLE RISK The Group’s continued success is reliant on our management and staff and successful relationships with our joint venture partners.RISK DESCRIPTIONMITIGATION/ACTIONSuccession planningThe Nominations Committee and the Board regularly review succession planning issuesLack of the right personnel to ensure the Group’s strategy is adhered toSenior management team is very experiencedThe Directors monitor staff resources to ensure they are appropriate to any changes in the businessRetention and incentivisation of key personnelRemuneration is set to attract, motivate and retain high calibre staffEmployee turnover is lowHealth & safety issuesThe Group’s Health and Safety policy is updated annually by the Board and reports are reviewed monthly by the Executive Committee and at every Board meetingUse of specialist professional adviceNot involved in high risk activitiesNo significant issues reported in the yearBribery and corruption riskAnti-bribery policy and procedures are in place which are distributed to all staff. The Board is firmly behind the Group’s anti-bribery stanceManagement identify and monitor projects with a greater exposure to bribery and corruptionWe avoid doing business in high risk territoriesDEVELOPMENT RISK 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.RISK DESCRIPTIONMITIGATION/ACTIONInability to add to the current development pipelineExperienced development team with an excellent track recordGood reputation in the property sectorInability to manage current developmentsExperienced development team recently expanded to ensure adequate resources availableChanges in legislation leading to delays in receiving planning permissionGood relationships with planning consultants and local authoritiesManagement keeps up to date with planning legislationUse of specialist professional advisorsLack of demand for new propertyThe Group’s strategy is to avoid doing speculative developments on its own balance sheetInability to find suitable contractors/JV partnersWell established network of contractors, joint venture partners and professional advisors Counterparty risk (contractors, joint venture partners, contract parties)Management monitors counterparties to review their ability to meet their obligations and to monitor the likelihood that they will become insolvent
STRATEGIC REPORT
Corporate responsibility
HELICAL BAR PLC REPORT & ACCOUNTS 2015
The Group recognises that its business activities impact
on the environment and the wider communities in which
it operates. Helical implements responsible environmental
and social practices across its direct business, via partners,
contractors and suppliers and through its joint
venture activities.
An endorsement of Helical’s commitment to managing environmental and social
impacts is its continued listing in the FTSE4Good Index. The FTSE4Good Index
measures the performance of companies that meet globally recognised
corporate responsibility standards and facilitates investment in those companies.
Maintaining listed status on this Index remains a key priority for Helical, and
informs the evolving approach to Corporate Responsibility.
Managing Corporate Responsibility
Each year the Group reviews and updates its environmental management
system, which has been in place since 2003. The updated environmental
management system, which is available on the Company 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
annually at Board level and are implemented by the senior management team.
• Annual (and ongoing) performance targets to enable Helical to focus its
efforts throughout the year on measurable and achievable performance goals.
This year the Group has continued to report on energy and water consumption
at its larger managed multi-let assets, and measured performance against
quantitative targets set in 2014. In addition, the proportion of waste recycled
has been measured at managed assets and Group owned development
projects.
• Key Performance Indicators (KPIs) to help Helical monitor progress towards
these targets and to ensure they are able to report in line with investor
disclosure requirements, notably FTSE4Good. It should be acknowledged
that the particular business model of the buying and selling of assets means
that absolute performance measures can be difficult to compare year on
year, hence this year the reporting against selected intensity (resource
consumption) and like for like KPIs will be investigated.
• Checklists to assist in applying minimum sustainability requirements across
its development activities. Helical has developed a sustainability project
management checklist to ensure that sustainability issues are incorporated
into all decisions throughout the development lifecycle. In addition, an
Environmental Impact Checklist is issued to individual contractors in order
to address corporate goals at the construction stage.
• Effective use of internal audit and review through quarterly meetings
of key Helical personnel, external corporate responsibility advisors and
principal managing agents to ensure effective delivery of the objectives
and targets.
The management system developed has been designed specifically to
reflect the flexibility of the Group’s business model. It also reflects the key
role that Helical’s partners play in delivering enhanced sustainability
outcomes in all its business ventures, be they developments/refurbishments
or in the management of individual multi-let assets.
Review of progress in the year to 31 March 2015
The benefits of managing environmental and social impacts include increased
ability to secure planning consents, 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 the progress in relation to the each of Helical’s Corporate
Responsibility impact areas.
Environment
The Group’s corporate commitments to environmental issues are outlined in
the Group’s Environmental Policy which can be found on the Company website.
The policy details Helical’s commitments across a range of impact areas and
its development and property management activities. For this year, Helical set
itself 29 targets (versus 26 in 2014) to guide the environmental element of
its Corporate Responsibility programme over the 12 months. These targets
address a range of impacts arising from the 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 the Company
website. The performance against the key targets is summarised below.
• Previously, year on year improvement targets have been reported for the
Head Office at Farm Street, London W1J 5RS, however, in August 2014
Helical moved to 5 Hanover Square, London W1S 1HQ. Performance data
has been collated for energy but improvement targets will not be set until
a full year’s baseline data is available. Waste and water consumption data
will not be available going forward as the office is a multi-let building and
the data is difficult to obtain from the owner.
• Helical managed multi-let offices continue to improve their energy and
water efficiency through the implementation of low and no cost measures.
The specific target for 2015 was to achieve a 2% improvement against the
2014 baseline. A review of the data in the table below shows that performance
is variable, complicated by the changing nature of the portfolio with three
new properties purchased in the year, including Churchgate & Lee House,
Manchester and 25 King Street, Bristol. Other changes include the ongoing
refurbishment of The Bower (207 and 211), Old Street, London EC1and the
Head Office move from 11-15 Farm Street, London W1J, to 5 Hanover
Square, London W1S. The table highlights the inherent difficulties in
monitoring such a varying portfolio where there is significant year on year
change.
• Of those that can be compared, The Hub, Glasgow has shown an improved
performance with a 7% decrease in gas consumption, however it also reports
a 4.5% increase in electricity due to data understatement in 2014 during
the fit out project. The data received during 2015 is more representative of
the actual usage. The Hub also saw a 46% increase in water use during
2015; which can be attributed to an increase in occupancy levels. The
Shepherds Building, London W14 has increased its electricity consumption,
which can be linked to the café area and showers now being metred under
common parts; however water consumption has decreased by 6%.
• Helical’s shopping centres, where comparative figures are available, show a
similar story, where the performance is unsurprisingly allied to overall occupancy
and programmed refurbishment. Overall electricity usage at Corby Town
Centre reduced by 3%, despite an increase during quarter four as a result
of additional full time plant equipment running due to onsite works. Corby
Town Centre saw an unusual 84% reduction in its gas usage during the
year. This significant reduction was a result of a new more efficient boiler
being installed. The Morgan Quarter, Cardiff saw an increase in energy
usage relating to development works at the Creative Quarter which ran to
early 2015.
• Water consumption increased in both Corby and Cardiff during the year.
At Cardiff this is as a direct result of work associated with the current
development of the Creative Quarter. These works relate to the re-location
of welfare facilities, increase in office tenant occupancy and relocation of
the centre management office to the Creative Quarter.
• Helical continues to offer recycling facilities at all managed assets. New Loom
House, London EC1 is diverting nearly 100% waste from landfill as did Corby
Town Centre and Clyde Shopping Centre prior to their sale in March 2015.
Where data is available at other managed assets, Helical comfortably exceeded
its ongoing target of a recycling rate of at least 35%. The only exception to this
is The Morgan Quarter, Cardiff, where Helical are currently reviewing waste
management strategies via the cleaning contract to increase recycling rates.
44
CORPORATE RESPONSIBILITY continued
STRATEGIC REPORT
• One of Helical’s ongoing targets is to proactively engage with tenants to
encourage improvements in efficient use of the buildings. 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.
• Of those multi-let office buildings that can be compared, The Hub,
Glasgow and Shepherds Building, the average percentage change of
electricity use equated to a 24% increase in 2015 in comparison to 2014
for Shepherd’s Building, London W14 but a 2% decrease for the Hub. The
Morgan Quarter, Cardiff’s electricity use increased by a nominal 2% in 2015
in comparison to 2014.
Helical has maintained its registration with the Carbon Reduction
Commitment Energy Efficiency Scheme (CRC). The confirmed purchased
allowance for 1 April 2013 to 31 March 2014 was 5,602 tonnes. The
projected allowance for the year to 31 March 2015 is a similar figure based on
the current reported emissions for the portfolio as a whole. Helical has again
reported to the Carbon Disclosure Project in the year and achieved an
improvement in its disclosure scoring 77%. In line with the mandatory requirement
for reporting its greenhouse gas emissions, Helical has provided a separate
disclosure in this report.
Below, Helical presents its utility consumption performance for multi-let buildings
under management as well as their Head Office (where data availability permits).
As previously, the data provision focuses on energy consumption that is the
responsibility of the landlord within common parts, vacant space and
during refurbishment.
Head office and multi-let offices
HEAD OFFICES
11-15 FARM STREET, LONDON W1J*
5 HANOVER SQUARE, LONDON W1S*
SHEPHERDS BUILDING, LONDON W14
THE HUB, GLASGOW
NEW LOOM HOUSE, LONDON EC1
CHURCHGATE & LEE HOUSE,
MANCHESTER
207 OLD STREET, LONDON
211 OLD STREET, LONDON
25 KING STREET, BRISTOL
ELECTRICITY
2013-14 KWH
ELECTRICITY
2014-15 KWH
GAS
2013-14 KWH
GAS
2014-15 KWH
WATER
2013-14 M3
WATER
2014-15 M3
117,512
-
451,612
164,375
220,8162
-
44,8202
51,3975
559,366
171,868
266,449
509,331
1,253,605
2,405,4753
204,552
N/A
42,377
-
No gas1
691,714
No gas1
-
104,463
55,349
10,1822
N/A7
No gas
659,465
No gas1
No gas1
133,725
N/A
-
31,9998
-
129,4908
969
-
6,8004
3,812
3,0803
1902
N/A7
6,3874
5,569
5,137
-
12,693
2,565
2801
-
62
N/A
N/A
Notes:
‘-’ refers to asset that was not in ownership
‘N/A’ refers to data not available
* refers to part year occupancy due to office move
1 No gas refers to assets where gas is not used on site
2 Data for only part of the year as moved to Hanover Square in August 2014
3 Electricity being supplied to construction areas
Retail
4 Does not include a full years’ worth of data
5 Data up to February 2015
6 211 Old Street, London EC1 is undergoing refurbishment.
7 Managed let and waste and water data not available
8 Office purchased December 2014
ELECTRICITY
2013 -14 KWH
ELECTRICITY
2014-15 KWH
GAS
2013-14 KWH
GAS
2014-15 KWH
WATER
2013 -14 M3
WATER
2014-15 M3
THE GUINEAS SHOPPING CENTRE, NEWMARKET
156,823
35,6612
IDLEWELLS SHOPPING CENTRE,
SUTTON-IN-ASHFIELD
CORBY TOWN CENTRE
THE MORGAN QUARTER, CARDIFF
CLYDE SHOPPING CENTRE
HUDDERSFIELD RETAIL PARK
332,404
157,2131
739,433
329,056
1,143,382
-
715,6993
335,978
994,5943
237,144
No gas
33,429
2,097
No gas
No gas
-
No gas
2531
3373
No gas
No gas
N/A
588
189
1,389
172
3323
-
1252
1251
1,5983
374
73
N/A
Notes:
‘No gas’ refers to assets where gas is not used on site within landlord control
‘NA’ refers to data not available at time of reporting e.g. inaccessible water meters or property
not in Helical ownership for full year
‘-’ refers to asset that was not in ownership
1 refers to the asset being sold part way through the year
2 Guineas Shopping Centre sold after Q1
3 Corby Shopping Centre & Clyde Sold in March 2015
45
HELICAL BAR PLC REPORT & ACCOUNTS 2015
CORPORATE RESPONSIBILITY continued
Waste
MULTI-LET OFFICES
SHEPHERDS BUILDING, LONDON W14
THE HUB, GLASGOW
NEW LOOM HOUSE, LONDON EC1
CHURCHGATE & LEE HOUSE, MANCHESTER
207 OLD STREET, LONDON
211 OLD STREET, LONDON
Notes:
‘N/A’ refers to data not available
1 Waste contractor reports that a total of 60% of waste is recycled - this includes the
proportion done on site, with a further amount done off site. Anything that cannot be recycled
(c40% of total) is incinerated.
2 211 Old Street, London EC1 is undergoing refurbishment.
Retail
IDLEWELLS SHOPPING CENTRE
CORBY TOWN CENTRE
THE MORGAN QUARTER, CARDIFF
CLYDE SHOPPING CENTRE
Notes:
1 Sold Q1 2015
2 No data for Q1 2014
3 Current waste contractor does not provide for waste segregation
WASTE SEGREGATED
ON SITE YEAR TO
MARCH 2014
%
wASTE SEGREGATED
ON SITE YEAR TO
MARCH 2015
%
WASTE DIVERTED FROM
LANDFILL YEAR TO
MARCH 2014
%
wASTE DIVERTED FROM
LANDFILL YEAR TO
MARCH 2015
%
60
17.50
50
N/A
50
50
60
61
50
11
50
N/A2
100
80
100
NA
50
50
100
88
1001
77
50
N/A2
WASTE SEGREGATED
ON SITE YEAR TO
MARCH 2014
%
wASTE SEGREGATED
ON SITE YEAR TO
MARCH 2015
%
WASTE DIVERTED FROM
LANDFILL YEAR TO
MARCH 2014
%
wASTE DIVERTED FROM
LANDFILL YEAR TO
MARCH 2015
%
40
802
35
39
421
804
253
465
87
1002
-
96
891
1004
253
935
4 Corby Town Centre sold in March 2015
5 Clyde Shopping Centre sold in March 2015
The suitability of the targets will be reviewed against the performance for the year ended March 2015 and revised accordingly to ensure that they remain
challenging yet achievable.
Greenhouse gas emissions reporting
For the reporting year 1 April 2014 to 31 March 2015 the 2014 UK
Government’s Conversion Factors for Company Reporting has been followed.
Greenhouse gas emissions are reported using the following parameters to
determine what is included within the reporting boundaries.
The table below highlights that overall GHG emissions have increased by 44%
year on year. The reason for this is primarily due to the increased number of
properties that have been acquired over the reporting period and the diversity
of the portfolio. Other contributing factors to the increase are:
- 207 Old Street energy consumption has been high due to construction activities.
• Scope 1 – direct emissions includes any gas data for landlord controlled
parts and fuel use for company owned vehicles. Fugitive emissions from
air conditioning are included where it is Helical’s responsibility within the
managed portfolio.
• Scope 2 – indirect energy emissions includes purchased electricity throughout
the Group operations within landlord controlled parts. Electricity used in
refurbishment projects has not been recorded separately. In the majority of
cases the electricity consumed is recorded for the individual properties as
part of the data collection for the management of common parts, and
contractors have been required to collect project specific data.
- Air conditioning is more fully reported than in previous years
- Construction sites have not been reported in previous years
For the reasons explained on page 44, namely the changing nature of the
portfolio, only two multi-let office buildings and one Shopping Centre can
report its carbon intensity. At the Hub and Shepherds Building, average
carbon intensity equates to 0.09 tCO2e/m2, while The Morgan Quarter,
Cardiff has a carbon intensity of 0.02 tCO2e/m2.
Greenhouse gas emissions (tonnes CO2e) are set out below for the year.
1 APRIL 2013 TO
31 MARCH 2014
1 APRIL 2014 TO
31 MARCH 2015
SCOPE 1: DIRECT EMISSIONS
494 tonnes
607 tonnes
SCOPE 2: INDIRECT EMISSIONS
2,619 tonnes
3,879 tonnes
TOTAL ALL SCOPES
3,113 tonnes
4,486 tonnes
46
HELICAL BAR PLC REPORT & ACCOUNTS 2015
CORPORATE RESPONSIBILITY continued
STRATEGIC REPORT
The specific target set by Helical is to reduce energy consumption by 2% per
annum in the principal managed assets. As discussed earlier in this section of
the report, year on year performance is variable across the portfolio complicated
by the changing nature of the portfolio through acquisition and divestment,
increasing occupancy and ongoing refurbishment of the component assets.
Resource use/Supply chain
A strong performance is shown by all sites that reported against the key
performance indicator for sourcing sustainable timber. Eleven sites sourced
100% of their timber from sustainable sources and a further four sites
sourced a minimum of 80% timber from sustainable sources.
Construction site performance
As part of the ongoing refurbishment and development programme, a number
of key performance indicators are measured and recorded for the Group’s
schemes, as follows.
Proximity to public transport/Sustainable travel
The majority of Helical’s developments are within 1,000m of a rail station and
seven developments include cycle provisions on site.
BREEAM/Considerate Constructors Scheme (CCS)
In accordance with Helical’s corporate objectives, six out of the eligible six
commercial developments are registered under the BREEAM scheme to meet
a minimum of BREEAM Very Good. The Bower, Old Street, London EC1,
Leisure Plaza, Milton Keynes, St Vincent Street, Glasgow and One
Creechurch Place, London EC3 have indicated that they are expecting to
achieve an ‘Excellent’ rating. Where schemes also include residential
elements such as Barts Square, London EC1, the objective is to achieve
Code for Sustainable Homes Level 4. In addition, of the schemes registered
with CCS all are expected to achieve scores well above compliance as well as
above the current industry average of 35.70 with One Creechurch Place,
London EC3 being awarded a Bronze Medal.
Energy and Water
Out of the sixteen developments, ten are required to report on the monitoring of
purchased water and energy use. The remaining six developments report
purchased water and energy use under its managed buildings data set.
ELECTRICITY
YEAR TO MARCH 2015
KWH
GAS
YEAR TO MARCH 2015
KWH
WATER
YEAR TO MARCH 2015
M3
TOTAL
727,051
48,423
5,894
Waste
Eleven out of sixteen developments have indicated that they have a Site Waste
Management Plan and the majority of these divert more than 85% of waste
disposal from landfill.
HAZARDOUS WASTE
GENERATED ON SITE
IN TONNES
YEAR TO MARCH 2015
WASTE SEGREGATED
ON SITE
IN TONNES
YEAR TO MARCH 2015
WASTE DIVERTED
FROM LANDFILL
IN TONNES
YEAR TO MARCH 2015
TOTAL
10
5,072
4,052
Ecology/Biodiversity
Six out of the sixteen sites have indicated that they have prepared an ecology
report for their development. For The Bower, Old Street, London EC1 the number
of green and brown roofing bird boxes installed around the site is maximised.
Within Millbrook Village, Exeter there are a number of ecological features,
including enhancing the wildlife area closest to the Mill Race and the bat
house building, installing additional bat boxes on retained trees, adding reptile
habitat, and also installing bee/invertebrate boxes within the wildlife area. To
encourage biodiversity in an urban area, a green roof for the auditorium area
has been installed at St Vincent Street, Glasgow. One Creechurch Place,
London EC3 which is currently under construction has landscaping and
enhancement of biodiversity incorporated into the design, as well as a green
roof. Durrants Village, Faygate has a bat house, an exclusion zone for badger
protection and a wild flower meadow is to be planted.
Flood risk/Climate change
It is a Group objective to ensure that Sustainable Urban Drainage Systems
(SuDS) are included into the design to mitigate against flooding. This is only
relevant to seven of the developments of which three have incorporated SuDS.
Environmental incidents/Environmental Management
There have been no prosecutions or fines for environmental pollution incidents
reported on the operational sites during the year. Where appropriate to the size
and capital value of the developments, certified Environmental Management
Systems (EMS) are implemented. This applied to six projects during the year.
Employees
• As at 31 March 2015, Helical had 52 permanent employees, 35 of whom
were based at Helical’s head office in London, 6 employed by a related
company, Asset Space Limited, and 11 in Poland.
• Gender diversity of the Board and the Company as at 31 March 2015 is
set out below:
BOARD
SENIOR MANAGERS
ALL EMPLOYEES
MALE
100%
83%
41%
FEMALE
-
17%
59%
• Helical continues to enforce its equal opportunities, anti harassment and
anti sexual discrimination policies. They also continue to monitor
compliance with its anti-bribery and whistle blowing policies. There have
been no incidents to report against these policies to date.
• A high level of staff retention remains a key feature of its business. Helical
has retained a highly skilled and experienced team and the table below
shows a breakdown of staff by length of service.
EXECUTIVE DIRECTORS
SENIOR MANAGERS
ALL EMPLOYEES
TOTAL NUMBER
OF STAFF AS AT
31 MARCH 2015
AVERAGE
LENGTH OF
SERVICE (YEARS)
5
6
52
20.09
17.00
5.96
• Helical’s staff retention levels not only reflect competitive remuneration
and benefits packages but also its commitment to enhancing the
professional and personal skills of its team by supporting employee
training and development, by means of training courses, seminars and
mentoring where appropriate. As in previous years, Helical continues to
evaluate training needs in line with business objectives. There are no
human rights issues of which the Board are aware that are considered
relevant to the Group.
47
HELICAL BAR PLC REPORT & ACCOUNTS 2015
CORPORATE RESPONSIBILITY continued
Communities
The Group takes a strong interest in community issues and seeks to be
actively engaged with the local communities that it works with on an ongoing
basis. Our community initiatives over the year included the following:
• For the third time, The Morgan Quarter, Cardiff ran an initiative called
Trading Places during November and December 2014, in partnership with
the University of South Wales. Students from six local colleges worked
with the shopping centre and the University in a business game including
running stalls within a pop-up shop, using a vacant shop unit within the
Morgan Quarter. This enabled this group of 16-18 year olds to put their
entrepreneurial skills into practice, whilst also being given the opportunity
to understand the higher education opportunities on offer at the University.
The project aims to help develop and nurture self-sufficient, entrepreneurial
young people who will contribute positively to economic and social success.
A review of Trading Places took place in February 2015, which concluded
that the scheme continues to achieve its objectives. Plans are in place for
a fourth Trading Places to take place during November and December 2015.
• Clyde Shopping Centre encouraged local businesses to follow its lead and
boost its environmental performance by making a Resource Efficiency
Pledge, which asks businesses and organisations to show their commitment
to the environment by taking action to enhance their green credentials.
The shopping centre signed up to the pledge to demonstrate its dedication
to the environment and to encourage its employees, partners and tenants
to also take steps towards achieving a low carbon economy. Initiatives in
place at Clyde include food waste composting for tenants, LED lighting
and timers, water harvesting and on site electric vehicles. The shopping
centre’s commitment to greener practices has seen it nominated for a
number of sustainability awards.
In addition, Clyde runs several community projects to maintain links to the
local community. These include providing electronic equipment for schools,
a safe child scheme (the Harry Otter Kids Club) and bee keeping on the
premises. Support is also given to a number of local charities and community
groups by providing free spaces within the shopping centre to hold stalls.
The centre also raised around £10,000 for Landaid during the year.
• Corby Town Centre has sponsored Corby Football Club Youth Team for the
past two seasons. This helps to fund a number of projects focussed on
encouraging physical activity for young people and raising awareness of
health issues. In addition, space is made available in the town centre during
the summer for Corby Football Club to hold interactive football based
events, utilising a pop up five-a-side football pitch. Corby first team players
regularly attend these events, which help to encourage support for the
local team.
• Idlewells Shopping Centre, Sutton-in-Ashfield invited local community
groups and charities to bid for funding to run a project. A shortlist was
created followed by a public vote to decide which project should receive
the funding. With over 900 votes cast, a local playgroup won the funding
to host a Christmas Party for terminally ill children. As well as funding one
charity to run a specific project, Idlewells also supports many other local
groups and charities to raise money by providing free mall space for stalls
and coffee mornings.
• The Guineas, Newmarket allocated free space in the shopping centre to a
number of charities and other not-for-profit organisations, to enable them
to host stalls for fundraising and raising awareness of their activities.
• Helical is also part of the recently formed Aldgate Partnership which has
been created to help promote the Aldgate area. Members of the group
currently include landowners, commercial occupiers, and developers. The
Aldgate Partnership will work together to deliver a range of interventions
to support community development and develop a premier business hub
with high quality public realm and environment that is a desirable
destination for all employees, residents and visitors.
Health & safety
Helical’s Health & Safety policy aims to develop a corporate culture that is
committed to the prevention of injuries and ill health to its employees or
others that may be affected by its activities. The Board of Directors and
senior staff are responsible for implementing this policy and they look to
ensure that health and safety considerations are always given priority in
planning and in day-to-day activities. The Group’s Health & Safety Policy was
reviewed and updated in February 2015 to reflect the latest legislative and
regulatory developments. The Group’s Health & Safety policy can be found
on the Company website and a summary of performance for fourteen active
sites is below.
TOTAL
7
15
0
1,186,224
1.26
0.01
NO OF RIDDOR
REPORTABLE
NO OF LOST TIME
ACCIDENTS
NO OF FATALITIES
NO OF HOURS
WORKED
ACCIDENT FREQUENCY
RATE FOR LOST TIME
ACCIDENTS [LTAFR]
ACCIDENT INCIDENCE
RATE LOST TIME
ACCIDENTS [LTIFR]
Health & Safety Executive data for all UK Construction, shows that there
were 3,293 reported over-seven-day injuries to employees in the year
compared with 3,213 in the previous year, a rate of 260.1 per 100,000
(262.0). Over the previous three years, there were an average number of
5,180 over-three-day reports and an average rate of 382.5 for years
2009– 2011. In comparison, for the year to March 2015 Helical have
delivered over one million man hours of construction, with no fatalities and
only 7 RIDDOR reportable accidents.
In relation to CSCS accreditation, all projects have a minimum of 85% CSCS
accreditation with ten sites achieving 95% or above.
The Strategic Report contained on pages 1-48, was approved by the Board
on 12 June 2015.
On behalf of the Board
Michael Slade
Chief Executive
48
HELICAL BAR PLC REPORT & ACCOUNTS 2015
GOVERNANCE
HELICAL BAR PLC
REPORT & ACCOUNTS 2015
GOVERNANCE
Chairman’s review
Governance structure
Board of Directors
Governance review
Nominations committee report
Audit committee report
Directors’ remuneration report
Report of the directors
Statement of directors’ responsibilities
Independent Auditor’s report
50
51
52
54
56
56
58
72
74
75
02 GOVERNANCE
AT HELICAL WE BELIEVE THAT ROBUST
CORPORATE GOVERNANCE IS OF FUNDAMENTAL
IMPORTANCE IN DELIVERING LONG-TERM
SUCCESS FOR SHAREHOLDERS
49
BOARD OF DIRECTORS
GOVERNANCE
Chairman’s review
Dear Shareholder,
This Annual Report reflects on another excellent set of results for Helical Bar
building on the record profits of last year. Our London portfolio has produced
a valuation increase of 27.0% and is now valued at £370m (47% of the total
investment portfolio). The switch within our regional portfolio from shopping
centres to industrial assets, mainly distribution warehouses and offices, helps
to maintain the balance between a high yielding investment portfolio and a
London investment and development programme providing both capital and
rental growth.
Our Governance
The Board is accountable to the Group’s shareholders for good corporate
governance. We believe in applying the highest principals of corporate
governance and have complied throughout the year with the principles set
out in the UK Corporate Governance Code, except in relation to those
matters referred to on page 54.
Major Decisions
The Board meeting agendas during the year contained many issues including
consideration and approval of the £100m Convertible Bond, a review of the
Group’s strategy, succession issues, and Board changes including the departure
of investment director, Jack Pitman, and the appointment of a new
Remuneration Committee Chairman, Michael O’Donnell.
Convertible Bond
In June 2014, the Company issued £100m of Convertible Bonds with a 4%
coupon repayable in 2019 or, subject to certain conditions, convertible at the
option of bondholders into ordinary shares, unless a cash settlement option is
exercised by the Company. The initial conversion price has been set at
£4.9694 per share, representing a premium of 35% above the price on the
day of issue and a premium of 59% above the Company’s previously
reported EPRA net asset value per share.
Annual Strategy Review
In September 2014, the Company undertook its annual strategy review
examining the economic, geopolitical, societal and environmental risks
affecting the business. This review reaffirmed the Company’s principal
objective of combining investment and development activity to ensure
maximum shareholder returns whilst managing risks appropriately. The
development pipeline is larger than competitors/peers with the use of deal
structures with joint venture parties and third party finance in order to secure
superior returns at the same time as mitigating risk. The investment portfolio
has two main purposes, to provide an income stream to cover overheads,
finance costs and dividends and to produce above average growth over the
economic cycle.
Board Composition and Evaluation
In order that we may implement our strategy successfully the Board annually
evaluates its own performance and that of its committees and directors. As
Helical is currently a FTSE Small Cap company the Code does not require
the Company to undertake this evaluation process externally. This evaluation
concluded that the Board and its committees continue to operate effectively.
In February 2015 Andrew Gulliford stepped down as Chairman and member
of the Remuneration Committee and as member of the Audit and
Remuneration Committee. He was replaced as Chairman of the
Remuneration Committee by Michael O’Donnell, who has been on the board
and a member of that Committee since 2011. Andrew Gulliford remains on
the board as a non-executive director and continues to advise the Board on
property matters. Also in February 2015 Jack Pitman, an executive director
since 2007, stepped down from the Board and left the Company on 31
March 2015. We thank him for his significant contribution to the Company
over the last 14 years. He played an important part in the growth of the
investment portfolio and in our retirement village business and we wish him
every success in his new venture.
Investor Relations
We have an extensive programme of meetings and presentations with
shareholders throughout the year with the majority of these taking place in
the periods following our annual and half year results. In addition, we took
part in an investor conference in January 2015 where we met with a number
of financial institutions. The Chief Executive, Michael Slade, and the Finance
Director, Tim Murphy, attend the majority of meetings with an investment
director, Duncan Walker, and a development director, Gerald Kaye or Matthew
Bonning-Snook, also attending. The Senior Independent Director, Richard
Gillingwater, is available to meet shareholders and attended one investor
meeting during the year. I am also available to meet shareholders if they wish
to raise any matters with me.
The following pages describe in greater detail our governance structure and
the work of the Board and its Committees.
Nigel McNair Scott
Chairman
12 June 2015
50
HELICAL BAR PLC REPORT & ACCOUNTS 2015
GOVERNANCE
Governance structure
GOVERNANCE
BOARD OF DIRECTORS
EXECUTIVE COMMITTEE
Michael Slade - Chairman
Tim Murphy
Gerald Kaye
Matthew Bonning-Snook
Duncan Walker
NOMINATIONS COMMITTEE
Nigel McNair Scott - Chairman
Richard Gillingwater
Michael O’Donnell
Richard Grant
The Board of Helical is collectively responsible for providing the leadership of
the Company within a framework of controls and reporting structures which
assist in pursuing its strategic aims and business objectives. It comprises the
Chairman, the Chief Executive, four non-executive directors and four executive
directors. The Board delegates operational responsibilities to an Executive
Committee and governance responsibilities to Nominations, Audit and
Remuneration Committees whilst retaining overall responsibility for the
running of the Company.
LEADERSHIP
The Chairman is Nigel McNair Scott. The Chief Executive is Michael Slade
and the four executive directors are Tim Murphy (Finance Director), Gerald
Kaye, Matthew Bonning-Snook and Duncan Walker. The non-executive
directors are Richard Gillingwater (Senior Independent Director), Richard
Grant, Andrew Gulliford and Michael O’Donnell. All the directors will be
offering themselves for re-appointment at the 2015 AGM.
Biographies of all directors and details of their shareholdings in the Company
are on pages 52 and 53.
Roles of Chairman and Chief Executive
The Chairman and the Chief Executive 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 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 also 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 the executive
directors and have a prime role in appointing and, where necessary, removing
executive directors. In conjunction with the Nominations Committee, the
Board considers succession planning of Board members and senior management.
In addition to Boardroom discussions, the Chairman maintains contact with
other non-executive directors by telephone and at least annually, will hold
meetings with the non-executive directors without the executive directors
present. Richard Gillingwater (Senior Independent Director) holds meetings
of the independent non-executive directors separately from the rest of the
Board at least once a year to ensure that any issues may be discussed
without the presence of a non-independent director.
AUDIT COMMITTEE
Richard Grant - Chairman
Michael O’Donnell
Richard Gillingwater
REMUNERATION COMMITTEE
Michael O’Donnell - Chairman
Richard Gillingwater
Richard Grant
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. An Executive Committee, comprising all the executive
directors, meets regularly to discuss the development of strategy, to review
and implement proposed transactions, to review policies and procedures
(including health and safety), to monitor budget and financial performance
and to assess risk. The full Board reviews all minutes of proceedings at
Executive Committee meetings and receives reports from the Executive
Committee Chairman (Michael Slade) at every Board meeting.
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 as a whole. A
summary of the schedule of matters reserved for the Board is set out below:
• Strategy and management - responsibility for the overall management of
the Group; approval of the Group’s long-term strategic aims and objectives;
approval of annual operating and capital expenditure budgets; oversight of
the Group’s operations and review of performance; extension of the
Group’s activities into new business areas; approval of major capital
projects and projects outside the normal course of business; 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 half yearly report, approval of
interim and final results announcements; approval of annual report and accounts,
including the directors’ report, 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; approval of material unbudgeted capital or operating expenditures.
• Internal controls - ensuring maintenance of a sound system of control and
risk management.
• Contracts - approval of major capital projects; approval of contracts above
limits of authority delegated by the Board.
• Communication - approval of resolutions and corresponding
documentation to be put to shareholders in general meeting; approval of
all circulars and listing particulars.
• Board membership and other appointments to senior management -
appointment and removal of the Company Secretary; membership of Board
committees following recommendations from the Nominations Committee.
• Corporate governance matters - including directors’ performance evaluations
and review of the Company’s corporate governance arrangements.
• Remuneration - determine the remuneration policy for the Chairman,
executive directors, Company Secretary and other senior executives
following recommendation from the Remuneration Committee; determine
the remuneration of the non-executive directors subject to the Articles of
Association and shareholder approval as appropriate.
• Approval of policies - including anti-bribery policy; whistleblowing procedures;
equal opportunities policy; diversity policy; share dealing code; health and
safety policy; environmental and corporate social responsibility policy; charitable
donations policy.
51
HELICAL BAR PLC REPORT & ACCOUNTS 2015
GOVERNANCE
Board of Directors
HELICAL BAR PLC REPORT & ACCOUNTS 2015
Chairman
Nigel McNair Scott
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. Nigel is Chairman of
the Nominations Committee.
Chief Executive
Michael Slade
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, a Fellow of the College of
Estate Management, Fellow of Wellington
College, a trustee of Purley Park charity and
Sherborne School Foundation and Vice Admiral
of the Marie Rose Trust.
Senior Independent Director
Richard Gillingwater
Richard Gillingwater, CBE, is the non-executive
Chairman of Henderson Group plc and Deputy
Chairman and Chairman elect of SSE plc. He
was, until 2013, Dean of Cass Business School.
Prior to this he was Chief Executive and later
Chairman of the Shareholder Executive, after a
career in investment banking at Kleinwort
Benson and then at BZW/Credit Suisse First
Boston. He has also been a non-executive
director of P&O, Debenhams, Tomkins, Qinetiq
Group, Kidde Hiscox and Morrisons. Richard is
the Senior Independent Director of Helical and is
a member of the Nominations, Audit and
Remuneration Committees.
Chairman of Audit Committee
Richard Grant
Richard Grant, BA (Oxon), ACA is the Finance
Director at Cadogan Estates Limited and former
corporate finance partner at
PricewaterhouseCoopers, whom he joined in 1975.
Richard is the Chairman of the Audit Committee
and a member of the Nominations and
Remuneration Committees.
Chairman of Remuneration
Committee
Michael O’Donnell
Michael O’Donnell was appointed to the Board
in June 2011. He is a former Managing
Director of LGV Capital, a private equity firm.
Through his company, Ebbtide Partners, he acts
as a consultant to, and investor in, private
companies. He is Chairman of Amore, the
elderly care business of the Priory Group and is
a non-executive director of Park Resorts, a
caravan park operator. Michael is Chairman of
the Remuneration Committee and a member of
the Nominations and Audit Committees.
Non-Executive Director
Andrew Gulliford
Andrew Gulliford, BSc (Est.Man), FRICS, was
appointed to the Board as a non-executive
director in 2006. A former Deputy Senior
Partner of Cushman & Wakefield Healey &
Baker (now Cushman & Wakefield LLP), he is a
non-executive director of F&C UK Real Estate
Investments Limited and various other
companies.
52
BOARd Of dIRECtORs continued
GOVERNANCE
Finance Director
Tim Murphy
Tim Murphy, BA (Hons) FCA,
joined the Group in 1994 and
became Finance Director of the
Company in 2012. Prior to joining
Helical, he worked for accountants
Grant Thornton and KPMG. He
has responsibility for financial
strategy and reporting, treasury
and taxation.
Director
Gerald Kaye
Gerald Kaye, BSc (Est Man) FRICS,
was appointed to the Board as an
executive director in 1994 and is
jointly responsible for the Group’s
development activities. He is a past
President of the British Council for
Offices and is 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
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 was a
Development Agent and
Consultant at Richard Ellis (now
CBRE). He is jointly responsible
for the Group’s development
activities.
Director
Duncan Walker
Duncan Walker, MA (Hons) (Oxon),
PG Dip Surveying, joined the
Group in 2007 and was appointed
to the Board as an executive
director in 2011. Prior to joining
Helical, Duncan led Edinburgh
House Estate’s investment team.
He is responsible for the Group’s
investment portfolio.
LEGALLY
OWNEd
31.3.14
LEGALLY
OWNEd
31.3.15
dEfERREd
sHAREs
ALL-EMPLOYEE
REstRICtEd
ALL-EMPLOYEE
UNREstRICtEd
tOtAL
31.3.15
PsP
AWARds
UNVEstEd
EXECUTIVE DIRECTORS
MICHAEL SLADE
TIM MURPHY
GERALD KAYE
12,849,738
12,648,820
95,520
152,257
-
6,731
1,252,871
1,046,753
209,039
MATTHEW BONNING - SNOOK
162,929
118,034
202,222
DUNCAN WALKER
NON-EXECUTIVE DIRECTORS
NIGEL MCNAIR SCOTT
ANDREW GULLIFORD
RICHARD GILLINGWATER
RICHARD GRANT
MICHAEL O’DONNELL
The information in this table is subject to audit.
-
67,145
111,827
2,722,556
2,620,941
14,328
11,500
15,000
62,000
14,328
11,500
15,000
62,000
-
-
-
-
-
18,887
18,773
18,882
18,841
17,157
21,004
12,688,711
1,951,101
1,004
172,034
918,866
20,967
1,086,602
1,487,080
20,593
157,468
1,231,865
5,287
89,589
1,022,159
-
-
-
-
-
-
-
-
-
-
2,620,941
420,895
14,328
11,500
15,000
62,000
-
-
-
-
53
HELICAL BAR PLC REPORT & ACCOUNTS 2015
GOVERNANCE
Governance review
HELICAL BAR PLC REPORT & ACCOUNTS 2015
At Helical we believe that robust corporate governance is of fundamental
importance in delivering for shareholders the long-term success of the
Company through the effective, entrepreneurial and prudent management of
the Company. The Board of Helical is collectively responsible for providing
the 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 and we believe in applying the highest principles of corporate
governance. Except in relation to the appointment of Nigel McNair Scott, who
was formerly the Group’s Finance Director before his appointment as
Chairman of the company in 2012, and the posting of the Notice of Meeting
and related papers for the 2014 AGM, we have complied throughout the year
with the principles as set out in the section of the Code headed “The Main
Principles of the Code”. The Group also takes into account the corporate
governance guidelines of institutional shareholders and their representative
bodies.
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 a finance
team and other support staff. 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 includes five executive directors, which is more
than those of other comparable listed real estate companies.
Provision B.1.2 of the Code notes that companies such as Helical, which
are below the FTSE350, are required to have at least two independent
non-executive directors. The Board has determined that in Helical’s case a
total of four non-executive directors, of which three are independent, 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 current
independent non-executive directors are Richard Gillingwater, Richard Grant
and Michael O’Donnell. With effect from 1 March 2015, Andrew Gulliford was
no longer considered independent under the Code, having been a director for
nine years.
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.
Annual evaluation of the Board and its Committees
The annual evaluation process, led by the Senior Independent Director,
involves each director submitting an appraisal in respect of the performance
of the main Board, its committees and directors, including the Chairman.
Since the Company is outside the FTSE350 and as permitted by the Code, it
does not currently make use of an external evaluation process.
During the year the Board undertook a formal evaluation of its own
performance and that of its committees and the Senior Independent Director
reported the results of that evaluation process to the Board. The process
covered criteria including real estate matters, Board composition and Board
and Committee processes. There were no significant areas of concern raised
by the Directors and any points raised have been dealt with appropriately.
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. The directors
have access to the services of a Company Secretary who is responsible for
advising the Board on all governance matters and ensuring compliance with
Board procedures and applicable laws and regulations. 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 of new directors and assisting with professional development as
required. The Board ensures that 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 all
directors as necessary.
Nominations Committee
The report of the Nominations Committee, which describes the work of the
Committee, is on page 56.
ACCOUNTABILITY
Audit Committee
The Audit Committee Chairman is Richard Grant, who is the Finance Director
of Cadogan Estates Limited and a former partner of
PricewaterhouseCoopers. As a result, the Board considers that he has recent
and relevant financial experience. The report of the Chairman of the Audit
Committee describing the issues considered by the Committee in the year
under review is on pages 56 to 57.
Risk management and internal controls
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 matters. In the year under review the Audit
Committee met with the Auditors on two occasions.
• The Board is responsible for the management of the Group’s risk profile
which is reviewed by the Audit Committee during the year. An analysis of
the Group’s principal risks can be found on pages 40 to 42.
Internal audit
The Board reviewed its position during the year to 31 March 2015 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.
54
GOVERNANCE REVIEW continued
HELICAL BAR PLC REPORT & ACCOUNTS 2015
GOVERNANCE
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 reflect those cash inflows
which are less certain and to take account of a potential 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.
Attendance at Board and Committee meetings during
the year
Six scheduled meetings of the Board were held during the year ended
31 March 2015. In addition, several unscheduled meetings were arranged to
discuss particular transactions and events. On occasions, directors who are
not members of the Committees attend at the invitation of the Committee
Chairman. The attendance record of the directors at the scheduled meetings
and at meetings of the Board’s committees is shown in the table below:
fULL
BOARd
AUdIt
COMMIttEE
REMUNERAtION
COMMIttEE
NOMINAtIONs
COMMIttEE
NUMBER OF MEETINGS
HELD DURING THE YEAR
UNDER REVIEW
CHAIRMAN
NIGEL MCNAIR SCOTT
EXECUTIVE DIRECTORS
MICHAEL SLADE
TIM MURPHY
GERALD KAYE
MATTHEW BONNING - SNOOK
DUNCAN WALKER
NON-EXECUTIVE DIRECTORS
RICHARD GILLINGWATER
ANDREW GULLIFORD
MICHAEL O’DONNELL
RICHARD GRANT
6
6
6
6
6
6
6
6
6
6
6
5
7
-
-
-
-
-
-
4*
5
5
5
-
-
-
-
-
-
6*
7
7
7
2
2
-
-
-
-
-
1*
2
2
2
RELATIONS WITH SHAREHOLDERS
Notice of Annual General Meeting
The Code recommends that the Notice of AGM and related papers be sent
to shareholders at least 20 working days before the meeting. For the 2014
AGM the Notice and related papers were sent out 18 working days before
the AGM.
Engagement with shareholders
The directors value the views of the Company’s shareholders and recognise
their interest in the Group’s strategy and performance, Board membership
and quality of management. They hold regular meetings with, and give
presentations to, the Company’s institutional shareholders to discuss the
Group’s results and objectives. The directors regularly meet, with the help of
the Company’s brokers, institutions that do not currently hold shares in the
Group to inform them of the Company’s 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, then 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 renewal of the Company’s Long Term Incentive
Plan, which was approved by shareholders at the 2014 AGM.
The Senior Independent Director, Richard Gillingwater, was available to meet
with shareholders throughout the year under review and will hold meetings
with shareholders whenever requested in order to ensure sufficient
understanding of any issues and concerns they may have.
The AGM is used to communicate with investors and they are encouraged to
participate. The Chairman, Senior Independent Director and members of the
Audit, Remuneration and Nominations Committees will attend the AGM and
will be available to answer questions. Separate resolutions are proposed on
each issue in order that they can be given proper consideration and there is a
separate resolution to consider the annual report and accounts. All proxy
votes are counted and the level of proxies lodged on each resolution will be
indicated after it has been dealt with by a show of hands.
The directors receive regular reports from sector analysts and investor
relations advisors on how the Group is viewed by its shareholders. The Group
communicates with all shareholders through the issue of regular press
releases and through its website at www.helical.co.uk.
PRINCIPAL INVEstOR RELAtION ACtIVItIEs
MAY 2014
JUNE 2014
JULY 2014
NOVEMBER 2014
DECEMBER 2014
Annual results announcement and
presentation for 2013/14
Investor Roadshow presentation London
Q1 Interim Management Statement
Annual General Meeting
Half year results announcement and
presentation
Investor roadshow presentation, London and
Netherlands
FORMER DIRECTOR
* Richard Gillingwater was absent from these meetings due to an operation which had to be
performed at short notice.
JACK PITMAN
5
-
-
JANUARY 2015
JPMC Investor Conference
-
FEBRUARY 2015
Q3 Interim Management Statement
* Richard Gillingwater was absent from these meetings due to an operation which had to be
performed at short notice.
REMUNERATION
This information is contained in the Directors’ Remuneration Report on pages
58 to 71.
By order of the Board
James Moss ACA
Company Secretary
12 June 2015
55
GOVERNANCE
Nominations
committee
report
GOVERNANCE
Audit
committee
report
Dear Shareholder,
Dear Shareholder,
In accordance with the UK Corporate Governance Code, the role of the
Nominations 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 Richard Gillingwater, Richard Grant and Michael O’Donnell.
Board appointments
Appointments to the Board and its Committees are made 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 Board is mindful
of the Group’s diversity policy and the Committee will give full consideration
to diversity, including gender diversity, when recommending to the Board any
future Board appointments. All Board appointments will be based on
experience and will be made on merit.
The work of the Nominations Committee in the year
The Committee met twice during the year. A record of attendance at all
Board and Committee meetings is shown on page 55.
The Committee reviewed the following matters during the year:
• Structure, size and composition of the Board;
• Membership of the Board committees;
• Performance Evaluation of the Board and its committees; and
• Succession planning
The terms of reference of the Nominations Committee, which were reviewed
during the year, are available on request and are included on the Group’s
website at www.helical.co.uk.
Directors’ re-election
The Board believes that the requirements of Code Provision B.7.1 of the UK
Corporate Governance Code should be fulfilled. This provision requires all
directors of FTSE350 companies to be subject to annual re-election by
shareholders. Whilst the Company is not 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.
I chair the Audit Committee and the other members are Richard Gillingwater
and Michael O’Donnell. Further details of these directors may be found on
pages 52 to 53. None of the Committee members have any personal or
financial interest in the matters to be decided (other than as shareholders),
potential conflicts of interest arising from cross-directorships, or 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 auditors.
Whilst all directors have a duty to act in the interests of the Group the
Committee has a particular role, acting independently from the executive
directors, 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.
The terms of reference of the Audit Committee, which were reviewed during
the year, are available on request and are included on the Company’s website
at www.helical.co.uk.
The work of the audit committee in the year
The Committee met five times during the year and a record of attendance at
these meetings is shown on page 55. 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.
In conjunction with the Board, the Audit Committee reviewed the following
matters during the year:
• Review of risk and internal controls;
• Recommendations to the Board for the payment of dividends;
• The financial statements of the Group and the announcement of the
annual results to 31 March 2014 and the interim statement on the
half year results to 30 September 2014;
• 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.
At the Annual General Meeting to be held on 24 July 2015, the following
resolutions relating to the appointment of directors are being proposed:
Other matters formally reviewed and discussed by the Committee during the
year included:
• The re-election of Nigel McNair Scott as non-executive Chairman;
• Review of various company policies including those relating to anti-bribery,
• The re-election, as executive directors, of Michael Slade, Tim Murphy,
share dealing and whistleblowing;
Gerald Kaye, Matthew Bonning-Snook and Duncan Walker; and
• Review of the group’s need for an internal audit function and issues
• The re-election, as non-executive directors, of Richard Gillingwater,
related to IT risk and business continuity planning; and
Richard Grant, Andrew Gulliford and Michael O’Donnell.
• Review of the annual bonus scheme calculations to ensure they are in
accordance with the scheme rules and that any judgements are
appropriate.
The Nominations Committee confirms to shareholders that, following the
annual formal performance evaluation and taking into account their qualifications
and experience, these directors continue to be effective and demonstrate
commitment to their roles. Biographical details of the directors are given
on pages 52 to 53.
I trust that shareholders will support the Committee and vote in favour
of these resolutions.
Nigel McNair Scott
Chairman of the Nominations Committee
12 June 2015
56
HELICAL BAR PLC REPORT & ACCOUNTS 2015 AUdIt COMMIttEE REPORt continued
GOVERNANCE
In discharging its responsibilities in connection with the preparation of the
financial statements for the year to 31 March 2015, the Committee is
responsible for reviewing the appropriateness of the Group’s accounting
policies, assumptions, judgements and estimates as applied by the executive
management to the financial statements. During this review the following
matters were considered:
• Internal controls
The Committee annually reviews the need for an internal audit function and
recently reaffirmed its stance that in view of the close involvement of the
executive directors in the running of the business and the relatively small
size of the Group, it does not consider an internal audit function would
provide any additional assistance in maintaining a system of internal
control. However, periodically, the Committee asks the Group’s auditors to
review its internal controls and their most recent report was presented to
the Committee in April 2015. Grant Thornton’s ‘Report on the Design and
Operating Effectiveness of Internal Controls of Helical Bar plc’ provided a
review of the Group’s control environment and internal controls. This report
did not highlight any material weaknesses in the design and effectiveness
of the Group’s systems and controls. Its key recommendations will be
reviewed and, where appropriate, additional controls will be introduced
during the year.
• Valuation
The valuation of the Group’s investment and trading and development
portfolio is the key area of judgement in preparing the annual and half
yearly financial statements and reports. For this reason the fair value of the
Group’s investment portfolio is determined by independent third party
experts familiar with the markets in which the Group operates and suitably
professionally qualified to enable them to provide appropriate valuations of
the portfolio.
The Group’s trading and development stock is accounted for in a different
way to investment properties, being carried in the financial statements at
the lower of cost and net realisable value. Accordingly, the Committee
reviews the assumptions made in considering whether an asset should be
written down to its net realisable value, if lower than cost. In addition, the
Committee reviews those instances where stock is considered to have a
fair value above its current book value. The surplus of fair value above book
value is not included in the Group’s balance sheet nor is any movement
reflected in the income statement. However, in accordance with the best
practice recommendations of the European Public Real Estate Association,
the surplus is included in the calculation of the EPRA net asset value per
share at each balance sheet date. The fair value calculation of the trading
and development stock is reviewed by an independent third party valuer
and by Andrew Gulliford, FRICS, a non-executive director.
• Directors’ Remuneration
The Group operates two bonus schemes and two performance share plans,
as explained in the Directors’ Remuneration Report on pages 58 to 71. The
determination of the bonuses to be paid and the awards to be made involve
judgement and are required to be calculated in accordance with the
scheme rules, as approved by shareholders.
Accordingly, the Committee is presented with the calculations to confirm
that they have been made in accordance with the scheme rules and that
any judgements involved in these calculations are appropriate.
• Revenue Recognition
Where the Group enters into complex material transactions, judgement
must be applied in determining when revenue should be recognised.
Technical papers are presented to the Committee on each issue and the
Committee also requests that the Group’s external auditors provide
commentary.
The Committee assesses the appropriateness of the proposed revenue
recognition for each transaction and any issues requiring significant
judgement are discussed between the external auditor and Richard Grant,
Chair of the Audit Committee, independently from the Executive Board.
Effectiveness of the external auditor
During the year, the Audit Committee reviewed Grant Thornton UK LLP’s
fees, effectiveness and whether the agreed audit plan had been fulfilled and
the reasons for any variation from the plan. The Audit Committee also
considered its robustness and the degree to which Grant Thornton UK LLP
was able to assess key accounting and audit judgements and the content of
the management report issued by the external auditor. This was performed
through meeting with the external auditor and discussing the issues they had
addressed. The Audit Committee concluded that both the audit and the audit
process were effective.
Audit independence
The Audit Committee considers the external auditor to be independent and
has satisfied itself of the effectiveness of the external auditor. The Audit
Committee has noted the rules on mandatory audit firm rotation contained in
the EU Audit Regulation and the requirements under the UK Corporate
Governance Code. Helical is currently below the threshold for inclusion in the
FTSE 350 and, accordingly, there is no requirement for it to consider the
rotation of its auditor. Grant Thornton UK LLP has been the auditor of the
Group for greater than ten years and there has been no audit tender during
this time. However, the Committee will continue to monitor the effectiveness
of the external auditor and will act in accordance with the EU regulations and
the Code as appropriate.
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. 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. Fees for non-audit
work cannot exceed £20,000 without the appointment being approved by the
Audit Committee. In the year to 31 March 2015, no fees were paid to the
auditors for non-audit work.
Annual General Meeting
At the Annual General Meeting to be held on 24 July 2015 the following
resolutions relating to the auditor are being proposed:
• The re-appointment of Grant Thornton UK LLP as Independent Auditor; and
• To authorise the Directors to set the remuneration of the Independent Auditor.
I hope that shareholders will support the Committee and vote in favour
of these resolutions.
Richard Grant
Chairman of the Audit Committee
12 June 2015
57
HELICAL BAR PLC REPORT & ACCOUNTS 2015
GOVERNANCE
Directors’
remuneration report
Annual statement
Dear Shareholder
I am pleased to present the Remuneration Committee’s Report on directors’
remuneration for the year to 31 March 2015. This report has been approved
by the Board of Helical Bar plc.
The main duty of the Remuneration Committee (“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
who 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.
This Directors’ Remuneration Report has been prepared in accordance with
the Directors’ Remuneration Reporting Regulations and Narrative Reporting
Regulations issued by the Department for Business, Innovation and Skills in
2013. 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
• Annual Report on Remuneration, which discloses how the remuneration
policy has been implemented in the year ended 31 March 2015 and how
the policy will be operated in the year ending 31 March 2016.
The Committee is not proposing any changes to the Group’s remuneration
policy and will not, therefore, be seeking a renewal of shareholders’ approval
of the Directors’ Remuneration Policy at the forthcoming AGM on 24th July
2015. However, an advisory vote on the Annual Statement and the Annual
Report on Remuneration will be tabled at the 2015 AGM.
Remuneration issues dealt with during the year
The Committee considered a number of matters during the financial year
under review and the following decisions were taken:
• Basic salaries of executive directors were reviewed in July 2014 and
inflationary increases of 2% were awarded with effect from 1 July 2014 to
Michael Slade, Tim Murphy, Gerald Kaye and Jack Pitman. As disclosed in
last year’s Directors’ Remuneration Report; (i) Matthew Bonning-Snook’s
basic salary was last increased on 1 January 2014, and, consequently, no
further increase was awarded in July 2014; and (ii) Duncan Walker’s basic
salary was increased by 16% from 1 July 2014 to reflect his significantly
increased contribution to the business and to bring his remuneration more
in alignment with his fellow directors;
• The fees payable to the non-executive directors were reviewed and
inflationary increases of 2% were awarded with effect from 1 July 2014;
• The Committee reviewed the awards made in accordance with the terms
of the Performance Share Plan 2004 (“2004 PSP”) in 2011 and considered
the performance of the Company during the three year performance period
to 31 March 2014. The performance conditions required for vesting of the
shares were partially met and 62.56% of shares vested;
• The Committee determined annual bonus awards for the year to 31 March
2014 in accordance with the rules of the Helical Bar Annual Bonus Scheme
2012 and the Executive Bonus Plan 2011;
• The Committee recommended that the Company’s Employee Share Ownership
Plan Trust (“ESOP”) acquire a further 3,790,000 shares in the Company to
enable it to satisfy the anticipated vesting of share awards in 2015 and
future years;
• The Committee approved the terms of the Performance Share Plan 2014
(“2014 PSP”) and 94.4% of shareholders voted to approve the Plan at the
2014 AGM;
• The Committee resolved in July 2014 to make an award of shares under
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 2014
As noted in the Strategic Report on pages 1 to 48, the Group has delivered an
increase in EPRA net assets per share of 23.0% (2014: 18.6%) and a total
portfolio return, as reported by IPD, of 20.4% (2014: 23.8%). Pre-tax profits of
the Group, before performance related awards, were £104m (2014: £120m).
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
and deferred shares have been approved for inclusion in the financial
statements for the year to 31 March 2015. Details of the bonuses payable
are disclosed in the Annual Report on Remuneration below.
Awards made under the 2004 PSP in 2012 were subject to two
performance conditions over the three years to 31 March 2015. Two thirds of
the awards were based on absolute net asset value performance with a vesting
threshold of 7.5% p.a. (24% over three years) growth and maximum vesting
at 15.0% p.a. (52% over three years) growth. The remaining third of the awards
were based on a comparison of the Group’s portfolio return to the IPD Total
Return index with a vesting threshold of the median of the index and full
vesting at the upper quartile of the index. The performance criteria were
measured at the end of the three year period and 100% of the awards are
expected to vest.
The Committee believes that the provision for annual cash and deferred
shares bonuses and the expected 2004 PSP vesting in respect of the
performance periods ending 31 March 2015 accurately and fairly represents
the reward determined by the Group’s remuneration schemes based on the
performance of the Group over the respective performance periods.
Remuneration policy for 2015/16
The Remuneration Committee of Helical Bar plc is committed to ensuring
that its remuneration policy remains aligned to the interests 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 be increased from 1 July
2015 by 2% (2014: 2%), which is below the average 8% (2014: 6%)
awarded to all other employees of the Group.
Annual General Meeting
At the Annual General Meeting to be held on 24 July 2015 the following
resolution relating to remuneration is being proposed:
• The approval of the Annual Statement and Annual Report on
Remuneration for the year ended 31 March 2015.
I trust that shareholders will support the Committee and vote in favour of this
resolution.
Michael O’Donnell
Chairman of the Remuneration Committee
the terms of the 2014 PSP; and,
12 June 2015
• The Committee determined the leaving arrangements for Jack Pitman.
58
HELICAL BAR PLC REPORT & ACCOUNTS 2015 dIRECtORs’ REMUNERAtION REPORt continued
GOVERNANCE
Remuneration policy report
GOVERNANCE
Operation of performance related remuneration
The Committee operates the two annual bonus schemes and the two PSP
schemes (2004 and 2014) in accordance with their respective rules, as
approved by shareholders, and the Listing Rules. In seeking shareholder
approval to the performance related remuneration schemes the Committee
has incorporated a number of shareholder protections and will apply these
in the operation of the schemes. In particular, the Committee has:
• applied a profit sharing and net asset value model to ensure cash bonuses
vest only on performance and with maximum limits;
• included clawback provisions in the Annual Bonus Scheme 2012 and the
2014 PSP;
• retained absolute discretion with regard to the payment of cash bonuses
or the vesting of shares in the determination of good/bad leavers, or
change of control or if payment of bonuses is not deemed to be in the
interests of shareholders; and
• included enhanced share retention guidelines.
The Report of the Remuneration Committee has been prepared in accordance
with the Large and Medium-sized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013 (the “Act”). The Remuneration Policy Report
noted below was approved by shareholders at the Annual General Meeting
held on 25 July 2014 and has an effective date from that point and for a
period of three years. The Company’s remuneration policy follows the principles
and guidelines of the Listing Rules and the UK Corporate Governance
Code 2012 as they relate to directors’ remuneration.
Remuneration policy report
This section of the Remuneration Report sets out the remuneration policy of
the Group. There have been no changes to this policy since 1 April 2014 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 (the FTSE 350 Super Sector Real Estate Index,
excluding storage companies and agencies) 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.
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;
• targets for any performance related remuneration schemes; and
• service agreements incorporating termination payments and
compensation commitments.
59
HELICAL BAR PLC REPORT & ACCOUNTS 2015
dIRECtORs’ REMUNERAtION REPORt continued
Directors’ remuneration policy table
The table below summarises the directors’ remuneration policy:
ELEMENt
SALARY
ANNUAL BONUS:
CEO AND FINANCE DIRECTOR
PURPOsE ANd LINK tO stRAtEGY
OPERAtION
MAXIMUM
PERfORMANCE tARGEts
- 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
- 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
- No maximum or maximum salary increase is operated
- N/A
- Salary increases will not normally exceed the average increase awarded to
- 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
- Provides focus on delivering net asset value growth
- Payable in cash and deferred shares (until minimum
- £2m p.a. in total, maximum £1.5m p.a. per individual
- Performance normally measured over one year
above sector benchmark
shareholding guidlines met)
- Rewards and helps retain key executives and is
- Non-pensionable
aligned to the Group’s risk profile
- Maximum bonus only payable for achieving
demanding targets
- Dividend equivalent payments (in cash or in shares) may be payable on
Sliding scale targets based on:
ANNUAL BONUS:
OTHER EXECUTIVE DIRECTORS
- Provides focus on delivering returns from the
Group’s property portfolio
- Payable in cash and deferred shares
- Non-pensionable
- 300% of salary p.a. plus additional 300% in year five and year ten
- Performance normally measured over one year
- Dividend equivalent payments (in cash or in shares) may be payable on
Sliding scale targets based on:
- 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
other employees
increases
deferred shares
deferred shares
LONG TERM
INCENTIVE AWARDS
- Aligned to main strategic objective of delivering
- Discretionary annual grant of conditional share awards
- 300% of salary p.a. for all executive directors
- Performance normally measured over three years
long-term value creation
under the 2014 PSP
- Dividend equivalent payments (in cash or in shares) may be payable
- 10% of an award vests at threshold performance
OTHER BENEFITS
SHARE OWNERSHIP
GUIDELINES
NON-EXECUTIVE
DIRECTOR FEES
- Aligns executive directors’ interests with those of
shareholders
- Rewards and helps retain key executives and is
aligned to the Group’s risk profile
- There is no Group pension scheme and no
contributions are paid into the directors’ own
pension plans
- 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 include: private medical cover, life
assurance and permanent health insurance
- Other benefits may be provided where appropriate
- N/A
- N/A
- To provide alignment of interests between
- Executive directors are required to build and maintain a
- N/A
executive directors and shareholders
- Reflects time commitments and responsibilities
of each role and fees paid by similarly sized
companies
- The remuneration of the non-executive directors is
determined by the Executive Board
specified shareholding through the retention of the post-tax
shares received on the vesting of awards
- Participants in the 2004 PSP and 2014 PSP are required to
retain shares acquired 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
- No maximum or maximum fee increase is operated
- Fee increases may be guided by the average increase awarded to
Executive Directors and other employees and/or general movements in the
market
- Increases may be above this level if there is an increase in the scale, scope
or responsibility of the role
- Aim to hold a shareholding to equal or exceed 200% of basic salary
(increasing to 300% on the first vesting of awards granted under the 2014
PSP)
- N/A
- The amount by which the increase in the Group’s net asset value exceeds
an industry benchmark
- Subject to achieving minimum relative performance levels
- Details of actual targets are set out on pages 66 to 67
- 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
- Clawback provisions apply as set out on page 67
- Details of profit sharing arrangements are set out on page 67
- Performance targets linked to net asset value per share, total property return and
total shareholder return
on pages 64 and 65
- Details of actual targets for the awards to be granted in 2015 are set out
- Clawback provisions apply to awards granted under the 2014 PSP
In addition to the above, executive directors may also participate in any all-employee share arrangement operated by the Company, up to prevailing
HMRC limits. However, employees including directors, who participate in the Group’s performance share plans are excluded from the Helical Bar 2010
Approved Share Option Scheme.
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HELICAL BAR PLC REPORT & ACCOUNTS 2015
Directors’ remuneration report
Annual statement
dIRECtORs’ REMUNERAtION REPORt continued
GOVERNANCE
Directors’ remuneration policy table
The table below summarises the directors’ remuneration policy:
ELEMENt
SALARY
PURPOsE ANd LINK tO stRAtEGY
OPERAtION
MAXIMUM
PERfORMANCE tARGEts
- Reflects the value of the individual and their role
- Normally reviewed annually, effective 1 July
and responsibilities
and development
- Reflects delivery against key personal objectives
- Provides an appropriate level of basic fixed income
avoiding excessive risk arising from over reliance
on variable income
- 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
- No maximum or maximum salary increase is operated
- Salary increases will not normally exceed the average increase awarded to
- N/A
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
ANNUAL BONUS:
- Provides focus on delivering net asset value growth
- Payable in cash and deferred shares (until minimum
CEO AND FINANCE DIRECTOR
above sector benchmark
shareholding guidlines met)
- £2m p.a. in total, maximum £1.5m p.a. per individual
- Dividend equivalent payments (in cash or in shares) may be payable on
deferred shares
- Rewards and helps retain key executives and is
- Non-pensionable
aligned to the Group’s risk profile
- Maximum bonus only payable for achieving
demanding targets
ANNUAL BONUS:
- Provides focus on delivering returns from the
- Payable in cash and deferred shares
OTHER EXECUTIVE DIRECTORS
Group’s property portfolio
- Non-pensionable
- 300% of salary p.a. plus additional 300% in year five and year ten
- Dividend equivalent payments (in cash or in shares) may be payable on
deferred shares
LONG TERM
INCENTIVE AWARDS
- Aligned to main strategic objective of delivering
- Discretionary annual grant of conditional share awards
long-term value creation
under the 2014 PSP
- 300% of salary p.a. for all executive directors
- Dividend equivalent payments (in cash or in shares) may be payable
- N/A
- N/A
- Performance normally measured over one year
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 performance levels
- Details of actual targets are set out on pages 66 to 67
- Performance normally measured over one year
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
- Clawback provisions apply as set out on page 67
- Details of profit sharing arrangements are set out on page 67
- Performance normally measured over three years
- 10% of an award vests at threshold performance
- Performance targets linked to net asset value per share, total property return and
total shareholder return
- Details of actual targets for the awards to be granted in 2015 are set out
on pages 64 and 65
- Clawback provisions apply to awards granted under the 2014 PSP
- N/A
- Aim to hold a shareholding to equal or exceed 200% of basic salary
(increasing to 300% on the first vesting of awards granted under the 2014
PSP)
- No maximum or maximum fee increase is operated
- Fee increases may be guided by the average increase awarded to
Executive Directors and other employees and/or general movements in the
market
- N/A
- Increases may be above this level if there is an increase in the scale, scope
or responsibility of the role
61
- 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
- Aligns executive directors’ interests with those of
shareholders
- Rewards and helps retain key executives and is
aligned to the Group’s risk profile
- There is no Group pension scheme and no
contributions are paid into the directors’ own
pension plans
- 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
OTHER BENEFITS
- Benefits provided through third party providers
- Insured benefits include: private medical cover, life
assurance and permanent health insurance
- Other benefits may be provided where appropriate
SHARE OWNERSHIP
GUIDELINES
- To provide alignment of interests between
- Executive directors are required to build and maintain a
executive directors and shareholders
specified shareholding through the retention of the post-tax
shares received on the vesting of awards
- Participants in the 2004 PSP and 2014 PSP are required to
retain shares acquired for at least two years after vesting
NON-EXECUTIVE
DIRECTOR FEES
- Reflects time commitments and responsibilities
- Cash fee paid monthly
of each role and fees paid by similarly sized
companies
- The remuneration of the non-executive directors is
determined by the Executive Board
- Fees are reviewed on an annual basis
- Fixed three year contracts with three month notice periods
HELICAL BAR PLC REPORT & ACCOUNTS 2015
dIRECtORs’ REMUNERAtION REPORt continued
Recruitment policy
In considering the structure of the Board, the balance between executive directors and independent non-executive directors and the skills, knowledge and
experience required to ensure the Board functions in accordance with the Group’s objectives, the Committee will seek to apply the following principles in
relation to the remuneration of new directors, whether by internal promotion or external appointment:
ELEMENt
SALARY
BENEFITS
POLICY
The salary of newly appointed executive directors would reflect the individual’s experience and skills, and be targeted at
between lower quartile and median of appropriate sector comparables, taking into account internal comparisons. On initial
appointment, salaries would generally be set at a level lower than benchmarked for that role to allow for pay increases to
market levels subject to satisfactory progress and contribution.
Benefits would be as are currently provided and periodically reviewed, being car or car allowance, private medical cover,
permanent health insurance and life assurance.
PENSION
There is no Group pension scheme for directors and no contributions are payable to directors’ own pension schemes.
ANNUAL BONUS
Annual bonus arrangements would be set in line with existing arrangements as approved by shareholders, with the
Committee retaining the right to pro-rata any bonus payable in respect of the year of appointment.
LONG TERM INCENTIVES
Annual awards under the terms of the 2014 PSP will be made in accordance with the terms of that Plan.
SHARE INCENTIVE PLAN
In line with that of existing executive directors.
BUY-OUT AWARDS
Should it be deemed necessary to compensate a new director for loss of bonus or incentives from a previous employer, the
Committee may structure the remuneration of such director to buy-out any such bonus or incentives on a like-for-like basis in
respect of currency (i.e. cash versus shares), timing and performance targets. Where possible such buy-out will be structured
within the Company’s existing incentive arrangements but the Committee has the discretion to implement the exemption
under rule 9.4.2 of the Listing Rules.
NON-EXECUTIVE
DIRECTORS
Newly appointed non-executive directors will be paid fees at a level consistent with existing non-executive directors.
Fees would be paid pro-rata in the year of appointment.
How employee pay is taken into account and how it
compares to the remuneration policy of executive directors
All permanent employees of the Company, including executive directors,
receive a basic remuneration package including base salary, private medical
cover, permanent health insurance, life assurance and membership of the
Share Incentive Plan. In addition, directors and senior management are entitled
to the use of company cars or the payment of a car allowance. Whilst employees
below Board level are not entitled to participate in the Executive Bonus Plan
2011 or Annual Bonus Scheme 2012, discretionary bonuses are paid to
employees on an individual basis depending on their performance and
contribution. The Performance Share Plan is available to all employees but is
primarily utilised to incentivise executive directors and senior management.
An Inland Revenue approved Share Option Scheme is available for the
Committee to grant options to those who do not receive awards under the
Performance Share Plan. Consequently, directors are not granted awards
under this scheme. In determining executive remuneration, the Committee
considers the overall remuneration of all the Company’s employees and, other
than in exceptional circumstances, seeks to award increases in salaries at
levels below those made to other staff and within its own guidelines. The
remaining remuneration is weighted towards performance related awards. The
Committee does not consult with its employees when drawing up the
Company’s remuneration policy.
Performance Metrics
The performance metrics used in the two annual bonus schemes and the
long term incentive plan are aligned with the Company’s Key Performance
Indicators, discussed on pages 16 to 17.
The Executive Bonus Plan 2011 compares the net asset value per share
performance of the Company to an index of property performance as measured
by the Investment Property Databank (“IPD”). The intention is to compare the
Company’s overall financial performance to that of the real estate sector’s primary
index. The scheme is open to the Chief Executive and the Finance Director.
The Annual Bonus Scheme 2012 is a profit sharing model which takes the
results of the Company, including valuation movements on its property portfolio,
and, after charging all finance costs, non-performance related administration
costs and a charge for the use of the Company’s equity, allocates the net results
into a profit pool for payment to participants with maximum limits, deferral,
clawback and other shareholder protections. The scheme is open to
executive directors, other than the Chief Executive and the Finance Director.
Long term incentives, awarded in accordance with the rules of the 2004 PSP
are subject to an absolute net asset value growth test and a relative
performance metric based on the performance of the Company’s property
portfolio compared to an IPD index. For the 2014 PSP, these two criteria are
joined by a third metric, based on relative Total Shareholder Return.
Service contracts
The service contract of Michael Slade operates from 1 August 2007, those of
Gerald Kaye and Matthew Bonning-Snook 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. All service contracts
can be inspected at the registered offices of the Company.
Leaver Policy
On termination of employment each director may be entitled to a payment in
lieu of notice of basic salary and other contractual entitlements i.e. provision
of a car, health and life 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.
62
HELICAL BAR PLC REPORT & ACCOUNTS 2015
dIRECtORs’ REMUNERAtION REPORt continued
GOVERNANCE
Awards under the Executive Bonus Plan 2011 may be payable with respect
to the period of the financial year served although amounts will be paid at the
normal payout date and, normally, pro-rated for the period of the financial
year worked. Under the Helical Bar Annual Bonus Scheme 2012, participants
shall not normally be entitled to receive any distribution under the scheme
following cessation and shall immediately cease to have any interests,
benefits, rights and/or entitlements under the scheme howsoever arising on
the date of such cessation except where good leaver status applies (i.e.
death; injury, disability; redundancy; retirement; sale or transfer of employing
company or business outside of the Group or any other reason permitted by
the Committee). For good leavers, individuals would cease to accrue future
amounts into 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 three years from cessation.
Any share-based entitlements granted to an executive director under the
Company’s share plans will be determined based on the relevant plan rules.
0
0
0
£
’
For awards granted under the 2004 PSP, awards will normally lapse at cessation
except where the good leaver status applies (e.g. death, redundancy, retirement
due to injury, disability or retirement otherwise with the Committee’s agreement).
For good leavers, awards will vest at cessation having regard to the satisfaction
of the relevant performance conditions and the time elapsed since the date
of the award (rounded up to the nearest whole year).
For awards granted under the 2014 PSP, awards held by good leavers will
vest on the normal vesting date subject to performance conditions and time
pro-rating, unless the Committee determines that awards should vest at
cessation and/or time pro-rating should not apply.
Non-executive directors
Non-executive directors are appointed by a Letter of Appointment and their
remuneration is determined by the Board. Current letters of Appointment, setting
out the terms of appointment, operate from 1 April 2015.The appointment of
non-executive directors is terminable on three months’ notice. Non-executive
directors are not eligible to participate in any new awards made under the terms
of the Group’s bonus or share award schemes. In exceptional circumstances,
where an executive director becomes a non-executive director e.g. Nigel McNair
Scott became Chairman in 2012, ongoing participation in awards previously
made in bonus and share schemes will be subject to the rules of those
schemes and will be subject to the discretion of the Committee.
Share ownership guidelines
Senior executives will not normally be permitted to sell shares received through
the 2004 PSP/2014 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. This is increased for executive directors to 300% on the
first vesting of share awards in respect of the 2014 PSP.
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 2004
PSP/2014 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, before incentives, 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 and Total Shareholder
Return, over each three year period.
Reward scenarios
The charts below show how the composition of the executive directors’
remuneration packages varies at three performance levels, namely, at minimum
(i.e. fixed pay), target (assumed to be 50% of the maximum incentive levels)
and maximum levels, under the policy set out in the table overleaf.
Value of remuneration packages at different levels of performance
3,750
3,500
3,250
3,000
2,750
2,500
2,250
2,000
1,750
1,500
1,250
1,000
750
500
250
0
43%
42%
37%
36%
27%
15%
PSP
Bonus
Basic salary & benefits
43%
43%
37%
38%
25%
14%
52%
31%
17%
44%
26%
30%
Minimum Target
Maximum
Minimum Target
Maximum
Minimum Target
Maximum
CHIEF EXECUTIVE
FINANCE DIRECTOR
OTHER DIRECTORS
The chart is based on:
• salary levels effective 1 April 2015.
• an approximated annual value of benefits (no pension is provided).
• a £1.5m maximum annual bonus for the Chief Executive, a £500,000
maximum annual bonus for the Finance Director and a 300% of salary
maximum annual bonus for the other executive directors (based on Gerald
Kaye’s package for simplicity) (with target assumed to be 50% of the
maximum).
• a 300% of salary award under the 2014 PSP in line with the normal
maximum award (with target assumed to be 50% of the maximum). No
share price appreciation in respect of the 2014 PSP awards has been
assumed.
Remuneration Committee
The Committee comprises Michael O’Donnell, as Chairman, Richard Gillingwater
and Richard Grant, all of whom have served throughout the year. Andrew Gulliford
stepped down as Chairman and member of the Committee on 11 February
2015. Each member of the Committee is an independent non-executive director.
The Company Secretary acts as Secretary to the Committee. The terms of
reference of the 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. Their fees for the year to 31 March 2015 amounted to £42,710
(2014: £46,167).
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HELICAL BAR PLC REPORT & ACCOUNTS 2015
dIRECtORs’ REMUNERAtION REPORt continued
GOVERNANCE
Annual report on remuneration
IMPLEMENTATION OF THE REMUNERATION POLICY
FOR THE YEAR TO 31 MARCH 2016
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 with 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. Executive directors’ basic annual salaries
at 31 March 2015 and increases from 1 July 2015 are as follows:
AT
1 APRIL 2015
£
INCREASES WEF
1 JULY 2015
£
AT
1 JULY 2015
£
525,300
280,500
405,800
375,000
10,500
535,800
5,600
8,100
7,500
286,100
413,900
382,500
MICHAEL SLADE
TIM MURPHY
GERALD KAYE
MATTHEW BONNING-
SNOOK
DUNCAN WALKER
318,270
6,330
324,600
The Committee’s policy in respect of basic salaries is that they should be
reviewed annually and increased to reflect an appropriate level of salary inflation
or greater to reflect increases in the scale, scope or responsibility of their roles
or to allow recently appointed executives to move to market norms as their
experience and contribution increase. Reflecting this policy, the Committee
has determined that all the executive directors, will receive increases of 2%
from 1 July 2015, compared to an average 8% awarded to other employees.
Benefits-in-Kind
Benefits-in-kind provided to executive directors comprise the provision of a
company car or car allowance, private medical cover, permanent health insurance
and life insurance. There is no Group pension scheme for directors and no
contributions will be paid by the Group to the directors’ own pension schemes.
Non-executive directors’ fees
In line with executive directors, the non-executive directors receive annual
inflationary increases which, with effect from 1 July 2015, will be 2%.
Non-executive directors’ annual fees at 31 March 2015 and increases from
1 July 2015, are as follows:
1 APRIL 2015
£
1 JULY 2015
£
NIGEL MCNAIR SCOTT – CHAIRMAN
153,000
156,000
RICHARD GILLINGWATER – SENIOR
INDEPENDENT DIRECTOR
51,000
52,000
RICHARD GRANT – CHAIRMAN OF THE
AUDIT COMMITTEE
51,000
52,000
ANDREW GULLIFORD – PROPERTY
ADVISOR TO THE BOARD
51,000
52,000
MICHAEL O’DONNELL – CHAIRMAN OF
THE REMUNERATION COMMITTEE
51,000*
52,000
* Fees payable to Michael O’Donnell were increased from £40,800 to £51,000 on his
appointment as Chairman of the Remuneration Committee.
ANNUAL BONUSES
Executive Bonus Plan 2011
Michael Slade and Tim Murphy will continue to be eligible to participate in the
Executive Bonus Plan 2011 (the “2011 Plan”) for the year ending 31 March
2016. The Committee may, at its discretion, award bonuses in respect of the
year ending 31 March 2016 subject to performance conditions based on
absolute net asset value, un-geared total property return and relative net
asset value per share versus the IPD, the aim of which is to link the size of
bonuses paid to the financial growth of the Group over that financial year.
The total amount payable under the 2011 Plan in any one year will continue to be
limited to £2.0m. 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 adding back any
payments under the Group’s bonus schemes. Among other constraints the
Committee could restrict the bonuses if payment would affect the financial or
trading position of the Group.
Participants in this scheme who do not have a minimum shareholding in the
Company of 200% of basic salary will receive up to one third of any bonus in
shares deferred for three years.
The main features of the 2011 Plan and details of how it operated for the
year ended 31 March 2015, which will be consistent with how it will operate
for the year ending 31 March 2016, are set out on pages 66 to 67. The year
to 31 March 2016 will be the final year of operation of the 2011 Plan and
proposals for its replacement will be considered during that year and put to
shareholders for approval at the 2016 AGM.
Helical Bar Annual Bonus Scheme 2012
Gerald Kaye, Matthew Bonning-Snook and Duncan Walker will continue to
participate in the Helical Bar Annual Bonus Scheme 2012 which was approved
by Shareholders at the 2012 AGM. Neither the Chief Executive nor the Finance
Director participate in the Scheme given their participation in the 2011 Plan.
This scheme provides annual bonuses based on the performance of the Group’s
property portfolio and is aligned with shareholders’ interests through a profit
sharing model, with appropriate hurdles and shareholder protections
(including deferral and clawback).
The distribution of the Bonus Award Pools to participants will continue to be
restricted for 2015/16 to the lower of 70% of the balance of the Bonus Award
Pool and 300% of salary. 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).
The main features of the 2012 Bonus Scheme and details of how it operated
for the year ended 31 March 2015, which will be consistent with how it will
operate for the year ending 31 March 2016, are set out on page 67.
Jack Pitman, a former director, will continue to receive annual bonuses out of
the Bonus Award Pool as at 31 March 2015 in accordance with the “Good
Leaver” provisions of the scheme.
LONG-TERM INCENTIVES
Performance Share plan
It is anticipated that long-term incentives will be granted to all executive directors
and senior management in the form of shares awarded under the terms of the
2014 PSP Scheme. For executive directors the awards will be granted at
300% of base salary.
The main features of the 2014 PSP 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 three times salary.
• there are three performance conditions, one based on absolute growth in
the Group’s net asset value per share, one based on the gross (ungeared)
total property return per share relative to other property funds as
determined by IPD and one based on relative total shareholder return.
• performance conditions for the awards to be granted in 2015 will, subject
to shareholder approval, be measured over the three years following grant
as follows:
64
HELICAL BAR PLC REPORT & ACCOUNTS 2015
dIRECtORs’ REMUNERAtION REPORt continued
GOVERNANCE
- 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
15% P.A. OR MORE
BETWEEN 7.5% P.A. AND 15% P.A.
7.5% P.A.
BELOW 7.5% P.A.
% OF AWARD VESTING
33.3
Pro rata between 3.3 and 33.3
3.3
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.
- for the total property return v IPD property funds condition:
RANKING AFTER THREE YEARS
UPPER QUARTILE OR ABOVE
BETWEEN MEDIAN AND UPPER QUARTILE
MEDIAN
LESS THAN MEDIAN
- for the relative TSR condition:
RANKING AFTER THREE YEARS
UPPER QUARTILE OR ABOVE
BETWEEN MEDIAN AND UPPER QUARTILE
MEDIAN
LESS THAN MEDIAN
% OF AWARD VESTING
33.3
Pro rata between 3.3 and 33.3
3.3
Zero
% OF AWARD VESTING
33.3
Pro rata between 3.3 and 33.3
3.3
Zero
The comparator group for the awards to be granted in 2015 will be the companies included in the FTSE 350 Super Sector Real Estate Index, excluding
storage companies and agencies.
Share awards will lapse in full where:
- net asset value per share (having added back dividends) does not increase over the three year performance period; or
- the gross return falls below the IPD median, the growth in triple net asset value is below 7.5% per annum and relative TSR is below median over the three
year period.
APPLICATION OF THE REMUNERATION POLICY IN THE YEAR TO 31 MARCH 2015
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 absolute performance and outperformance relative to the Group’s peer group. In the year to 31 March 2015, 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
£
2,742,000
4,271,000
2,000,000
15,051,000
24,064,000
SHARE
OF TOTAL
%
11
18
8
63
MAXIMUM
£
2,742,000
4,271,000
2,000,000
15,051,000
100
24,064,000
SHARE
OF TOTAL
%
11
18
8
63
100
Note: Performance Share Plan shares vested reflect the market value of shares that are expected to vest (actual) or could vest (maximum) in respect of the
three year performance period to 31 March 2015 in accordance with the terms of the Group’s Performance Share Plan.
65
HELICAL BAR PLC REPORT & ACCOUNTS 2015
dIRECtORs’ REMUNERAtION REPORt continued
Directors’ remuneration
Remuneration in respect of the directors was as follows:
fIXEd
VARIABLE
BASIC
SALARY/
FEES
£000
BENEFITS
£000
SUB-TOTAL
£000
523
511
279
269
404
395
375
330
307
269
152
150
51
50
51
50
51
50
42
40
29
45
19
21
38
48
43
49
17
17
26
42
-
-
-
-
-
-
-
-
552
556
298
290
442
443
418
379
324
286
178
192
51
50
51
50
51
50
42
40
ANNUAL
CASH
BONUS
£000
1,500
1,500
500
468
811
796
750
750
637
550
-
-
-
-
-
-
-
-
-
-
323
316
2,558
2,430
12
22
184
244
335
338
2,742
2,674
974
637
5,172
4,701
DEFERRED
BONUS
SHARES
£000
-
-
-
32
406
398
375
375
318
275
-
-
-
-
-
-
-
-
-
-
-
318
1,099
1,398
SHARE
AWARDS
£000
3,468
1,287
1,456
515
2,601
965
2,081
772
1,734
450
1,630
862
-
-
-
-
-
-
-
-
SUB-TOTAL
£000
4,968
2,787
1,956
1,015
3,818
2,159
3,206
1,897
2,689
1,275
1,630
862
-
-
-
-
-
-
-
-
TOTAL
£000
5,520
3,343
2,254
1,305
4,260
2,602
3,624
2,276
3,013
1,561
1,808
1,054
51
50
51
50
51
50
42
40
2,081
772
15,051
5,623
3,055
1,727
21,322
11,722
3,390
2,065
24,064
14,396
EXECUTIVE DIRECTORS
MICHAEL SLADE
TIM MURPHY
GERALD KAYE
2014-15
2013-14
2014-15
2013-14
2014-15
2013-14
MATTHEW BONNING-SNOOK 2014-15
DUNCAN WALKER
2013-14
2014-15
2013-14
NON-EXECUTIVE DIRECTORS
NIGEL MCNAIR SCOTT
ANDREW GULLIFORD
RICHARD GILLINGWATER
RICHARD GRANT
MICHAEL O’DONNELL
FORMER DIRECTORS
JACK PITMAN¹
TOTAL
2014-15
2013-14
2014-15
2013-14
2014-15
2013-14
2014-15
2013-14
2014-15
2013-14
2014-15
2013-14
2014-15
2013-14
¹Jack Pitman stepped down from the Board on 13 February 2015 and left the Company on 31 March 2015.
The information in this table is subject to audit
Executive Bonus Plan 2011
In 2011, shareholders approved the renewal of the Executive Bonus Plan
(the “2011 Plan”) for a further five years. Michael Slade and Tim Murphy
were eligible for 2011 Plan bonuses during the year. Total 2011 Plan bonuses
for the year to 31 March 2015 of £2,000,000 (2014: £2,000,000) have been
accrued in the financial statements for the year to 31 March 2015 and are
payable in June 2015.
The performance conditions which applied for the year ended 31 March 2015
were as follows:
• 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”).
66
HELICAL BAR PLC REPORT & ACCOUNTS 2015
dIRECtORs’ REMUNERAtION REPORt continued
GOVERNANCE
• development profits, development management fees, net rents, other income
and profits/losses on the sale of property assets were allocated to the
relevant Profit Pools; and
• profits in the two Profit Pools were eligible for the award of bonuses once
they were 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.
SHAREHOLDER PROTECTIONS
• no more than 10% of profits are available to participants for distribution
(“Bonus Award Pool”) at the end of the relevant financial year. Pool allocations
between participants are based on a set formula agreed at the start of the
financial year;
• the distribution of the Bonus Award Pools to participants are 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 is 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 is made in cash after the relevant financial year
end and one third is 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 three years, subject to an
additional 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%.
The total amount of bonus payable in the year ended 31 March 2015 was
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.
In the year to 31 March 2015, the application of the bonus calculation to the
results of the Group resulted in a potential total bonus payment of £4,612,000.
This was reduced to the maximum amount payable of £2,000,000. Bonuses
paid under the terms of this 2011 Plan in the last six years are as follows:
YEAR
2015
2014
2013
2012
2011
2010
AMOUNT PAID
£
2,000,000
2,000,000
1,297,000
nil
nil
nil
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 2015 and the cash element will be payable in June 2015.
The main features of the 2012 Bonus Scheme as applied to the year to
31 March 2015 are as follows:
• the scheme participants were Gerald Kaye, Matthew Bonning-Snook,
Duncan Walker and former director, Jack Pitman. Neither the Chief Executive
nor the Finance Director participate in the Scheme given their participation
in the 2011 Plan;
• all property assets held during the year were allocated to one of two pools
namely the “Investment Pool” or the “Development Pool” (“Profit Pools”);
• investment assets are included at valuation as at 31 March 2014 with
subsequent valuation movements increasing or decreasing the size of the
relevant Profit Pool. Development assets were also included at valuation as
at 31 March 2014 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 the introduction of
the scheme on 1 April 2012 were only included in the Profit Pools if they
were realised;
67
HELICAL BAR PLC REPORT & ACCOUNTS 2015
dIRECtORs’ REMUNERAtION REPORt continued
Bonus Scheme Pools - Year to 31 March 2015
The amount transferred to the Bonus Pool based on the results of the Group for the year to 31 March 2015 and its allocation to cash and deferred share
awards is as follows:
AMOUNT TRANSFERRED TO BONUS POOL BASED ON THE RESULTS FOR THE YEAR
BONUS POOL BROUGHT FORWARD
BONUS POOL AVAILABLE FOR DISTRIBUTION
AMOUNT PAID AS CASH BONUSES
AMOUNT PAID AS DEFERRED SHARES
BONUS POOL CARRIED FORWARD
2015
£
2014
£
12,788,000
10,641,000
7,295,000
752,000
20,083,000
11,393,000
3,172,000
2,732,000
1,099,000
1,366,000
15,812,000
7,295,000
20,083,000
11,393,000
Other matters
• shareholder approval for the Plan was obtained for ten years from 1 April 2012, although the Remuneration Committee will review the operation of the Plan
after five years;
• 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 ten year dilution limit will apply; 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.
2004 PSP awards vesting in 2015
The 2004 PSP award, granted on 31 May 2012, will vest after 1 June 2015. The expected vesting percentage is as follows:
METRIC
PERFORMANCE CONDITION
NAV
(FULLY DILUTED
TRIPLE NET)
Total property return v IPD property
10% of this part of an award vests for compound NAV growth
of 7.5% p.a. increasing pro-rata to 100% of this part of an
award vesting for compound NAV growth of 15% p.a.
THRESHOLD
TARGET
7.5%
STRETCH
TARGET
15%
ACTUAL
18.1%
% VESTING
66.67%
TPR
TOTAL
Total property return v IPD property
10% of this part of an award vests for median ranking
increasing pro-rata to 100% of this part of an award vesting
for upper quartile or above performance
Median
10.8%
Upper quartile
12.3%
17.4%
33.33%
100.00%
The main feature of the 2004 PSP, which remains operative for the awards made in 2012 and 2013 and which will vest in 2015 and 2016 respectively, are
substantially the same as for 2014 PSP except that the two performance criteria are as follows:
ANNUAL COMPOUND INCREASE AFTER THREE YEARS
15% P.A. OR MORE
BETWEEN 7.5% P.A. AND 15% P.A.
7.5% P.A.
BELOW 7.5% P.A.
% OF AWARD VESTING
66.7
Pro rata between 6.6 and 66.7
6.6
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.
- For the total property return v IPD property funds condition:
RANKING AFTER THREE YEARS
UPPER QUARTILE OR ABOVE
BETWEEN MEDIAN AND UPPER QUARTILE
MEDIAN
LESS THAN MEDIAN
68
% OF AWARD VESTING
33.3
Pro rata between 3.3 and 33.3
3.3
Zero
HELICAL BAR PLC REPORT & ACCOUNTS 2015
dIRECtORs’ REMUNERAtION REPORt continued
GOVERNANCE
Based on the above and given that net value per share (having added back dividends) increased over the three year performance period, details of the shares
under award and the expected value at vesting is as follows:
EXECUTIVE DIRECTORS
MICHAEL SLADE
TIM MURPHY
GERALD KAYE
MATTHEW BONNING-SNOOK
DUNCAN WALKER
NUMBER OF
SHARES AT GRANT
NUMBER OF SHARES
EXPECTED TO LAPSE
NUMBER OF SHARES
EXPECTED TO VEST
ESTIMATED VALUE
AT VESTING1 (£’000)
895,522
376,119
671,641
537,313
447,761
-
-
-
-
-
895,522
376,119
671,641
537,313
447,761
3,468
1,456
2,601
2,081
1,734
1,630
2,081
NON-EXECUTIVE DIRECTOR (NB AWARDS WERE ORIGINALLY GRANTED WHEN NIGEL MCNAIR SCOTT WAS AN EXECUTIVE DIRECTOR)
NIGEL MCNAIR SCOTT
JACK PITMAN – FORMER DIRECTOR
420,895
537,313
-
-
420,895
537,313
1The share price used to calculate the expected value at vesting was 387.24p, based on the average share price over the three months to 31 March 2015.
The 2004 PSP numbers presented for the comparatives in the remuneration table above are based on the 2004 PSP awards granted on 5 July 2011. The
three year performance period to 31 March 2014 showed that the net asset value per share, calculated in accordance with the terms of the 2004 PSP, had
increased by 10.42% p.a. During this three year period the total return of Helical’s property portfolio, as determined by IPD, was 12.9% compared to the
median of the IPD Benchmark which showed a return of 8.3%. Therefore, 62.56% of the shares vested.
The information in this section is subject to audit.
2014 PSP awards granted in the year
The following conditional awards were granted on 25 July 2014 under the 2014 PSP in the year:
INDIVIDUAL
MICHAEL SLADE
TIM MURPHY
GERALD KAYE
MATTHEW BONNING-SNOOK
DUNCAN WALKER
JACK PITMAN – FORMER DIRECTOR
BASIS OF AWARD
(AS A % OF SALARY)
FACE VALUE
£000
VESTING AT
THRESHOLD
VESTING AT
MAXIMUM
300%
300%
300%
300%
300%
300%
1,576
842
1,217
1,125
955
974
10%
10%
10%
10%
10%
10%
100%
100%
100%
100%
100%
100%
PERFORMANCE PERIOD
3 years to 31 March 2017
3 years to 31 March 2017
3 years to 31 March 2017
3 years to 31 March 2017
3 years to 31 March 2017
3 years to 31 March 2017
The total number of awards made to directors under the terms of the 2004 PSP and 2014 PSP which have not yet vested are as follows:
DIRECTOR
MICHAEL SLADE
TIM MURPHY
GERALD KAYE
MATTHEW BONNING-SNOOK
DUNCAN WALKER
NIGEL MCNAIR SCOTT
JACK PITMAN – FORMER DIRECTOR
SHARES AWARDED
31.5.12
AT 167.50P
SHARES AWARDED
24.06.13
AT 243.75P
SHARES AWARDED
25.07.14
AT 358.00P
TOTAL
SHARES
AWARDED
1,951,101
918,866
1,487,080
1,231,865
440,195
235,055
340,055
314,245
895,522
376,119
671,641
537,313
447,761
420,895
537,313
615,384
307,692
475,384
380,307
307,692
-
266,706
1,022,159
-
420,895
380,307
272,053
1,189,673
It is currently expected that 100% of the shares awarded on 31 May 2012, 100% of the shares awarded on 24 June 2013 and 66% of the shares awarded
on 25 July 2014 will vest.
As detailed below, Jack Pitman, a former director, will be treated as a good leaver under the 2004 PSP and 2014 PSP. Awards will vest under terms of the
relevant plans, subject to performance and time pro-rating.
The information in this section is subject to audit.
69
HELICAL BAR PLC REPORT & ACCOUNTS 2015
dIRECtORs’ REMUNERAtION REPORt continued
Vesting of PSP awards
Awards to executive directors which have vested in accordance with the terms of the 2004 PSP in the last six years are as follows:
YEAR
2015
2014
2013
2012
2011
2010
VALUE
£
15,051,000
5,623,000
nil
nil
nil
nil
Helical Bar 2002 Approved Share Incentive Plan
Under the terms of this Plan employees of the Group are given annual awards of free shares with a value of £3,600 and participants are allowed to purchase
additional shares up to a value of £1,800, to be matched in a ratio of 2:1 by the Company. 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
TIM MURPHY
GERALD KAYE
MATTHEW BONNING-SNOOK
DUNCAN WALKER
JACK PITMAN – FORMER DIRECTOR
17 MARCH
2015
AT 382.85p
13 JANUARY
2015
AT 368.75p
2 DECEMBER
2014
AT 351.00p
16 SEPTEMBER
2014
AT 340.5p
29 AUGUST
2014
AT 333.0p
354
354
354
354
354
-
224
110
223
221
125
223
384
384
384
384
384
384
264
264
264
264
264
264
544
543
543
537
300
543
20 JUNE
2014
AT 335.0p
1,812
1,812
1,812
1,812
1,812
1,812
Shares held by the Trustees of the Plan at 31 March 2015 were 438,898 (2014: 443,588).
The information in this section is subject to audit.
Payments for loss of office - departure of Jack Pitman
Jack Pitman stepped down from the Board on 13 February 2015. He continued to receive his base salary and car allowance until his departure on 31 March
2015. No further payments in respect of salary and car allowance have been or will be made post cessation. His membership of the Group’s health insurance
scheme will continue until its renewal in October 2015 but other benefits-in-kind ceased on 31 March 2015. In respect of his incentives, it was determined by
the Remuneration Committee that Jack Pitman should be treated as a Good Leaver for the purposes of the Annual Bonus Scheme 2012 and the 2004 PSP
and 2014 PSP. He will receive cash bonuses in respect of the Annual Bonus Scheme 2012 for the year to 31 March 2015 and in respect of the balance
remaining in that scheme at that date for a further three years in line with the plan rules, subject to offset of future losses and clawback. The 2012 PSP is
expected to vest in June 2015, subject to the performance conditions being met. The 2013 PSP award will vest subject to performance and time pro-rating
and the 2014 PSP award (granted under the 2014 PSP) is expected to vest in June 2017, again subject to performance and time pro-rating.
The information in this section is subject to audit.
Total shareholder return
The total shareholder returns for a holding in the
Group’s shares in the three years and six years to
31 March 2015 compared to a holding in the FTSE
350 Super-sector Real Estate Index are shown in the
graphs. This index has been chosen because it
includes the majority of listed real estate companies.
The table showing the relative performance of
Helical during the three years to 31 March 2015
matches the performance period for the 2004 PSP
Award granted on 31 May 2012 and which will vest
after 1 June 2015.
)
D
E
S
A
B
E
R
(
N
R
U
T
E
R
R
E
D
L
O
H
E
R
A
H
S
L
A
T
O
T
Total shareholder return
Source: Thompson Reuters
250
200
150
100
50
0
MAR
12
MAR
13
MAR
14
MAR
15
)
D
E
S
A
B
E
R
(
N
R
U
T
E
R
R
E
D
L
O
H
E
R
A
H
S
L
A
T
O
T
Total shareholder return
Source: Thompson Reuters
350
300
250
200
150
100
50
0
MAR
09
MAR
10
MAR
11
MAR
12
MAR
13
MAR
14
MAR
15
Share price
The market price of the ordinary shares at 31 March
2015 was 394.25p (2014: 373.75p). This market
price varied between 320.00p and 401.75p during
the year.
70
HELICAL BAR
FTSE 350 SUPER-SECTOR
REAL ESTATE INDEX
HELICAL BAR
FTSE 350 SUPER-SECTOR
REAL ESTATE INDEX
THIS GRAPH SHOWS THE VALUE, BY 31 MARCH 2015,
OF £100 INVESTED IN HELICAL BAR ON 31 MARCH 2012,
COMPARED WITH THE VALUE OF £100 INVESTED IN THE
FTSE 350 SUPERSECTOR REAL ESTATE INDEX.
THIS GRAPH SHOWS THE VALUE, BY 31 MARCH 2015,
OF £100 INVESTED IN HELICAL BAR ON 31 MARCH
2009, COMPARED WITH THE VALUE OF £100 INVESTED
IN THE FTSE 350 SUPERSECTOR REAL ESTATE INDEX.
HELICAL BAR PLC REPORT & ACCOUNTS 2015
dIRECtORs’ REMUNERAtION REPORt continued
GOVERNANCE
Remuneration of the Chief Executive
The table below presents single figure remuneration for the Chief Executive over the past six years, together with past annual bonus payouts and relevant
2004 PSP and Share Option vestings.
YEAR ENDED
NAME
31 MARCH 2015
31 MARCH 2014
31 MARCH 2013
31 MARCH 2012
31 MARCH 2011
31 MARCH 2010
MICHAEL SLADE
MICHAEL SLADE
MICHAEL SLADE
MICHAEL SLADE
MICHAEL SLADE
MICHAEL SLADE
PERCENTAGE INCREASES IN CHIEF EXECUTIVE REMUNERATION
CHIEF EXECUTIVE
SALARY
BENEFITS
BONUS
AVERAGE EMPLOYEE
SALARY
BENEFITS
BONUSES
RELATIVE IMPORTANCE OF THE SPEND ON PAY
STAFF COSTS
DISTRIBUTIONS TO SHAREHOLDERS
NET ASSET VALUE OF THE GROUP
Directors’ share interests and shareholding guidelines
MICHAEL SLADE
TIM MURPHY
GERALD KAYE
MATTHEW BONNING-SNOOK
DUNCAN WALKER
¹Value as per share price on 10 June 2015 of 440.25p
TOTAL
REMUNERATION
£000
ANNUAL BONUS
£000
(% OF MAX PAYOUT)
2004 PSP
£000
(% OF MAX VESTING)
SHARE OPTION
£000
(% OF MAX VESTING)
5,520
3,343
1,523
541
538
1,500
1,500 (100%)
1,500 (100%)
973 (65%)
- (-%)
- (-%)
- (-%)
3,468 (100%)
1,287 (62%)
- (-%)
- (-%)
- (-%)
- (-%)
n/a
n/a
n/a
n/a
n/a
973 (100%)
2015
£000
523
29
1,500
68
2
25
2015
£000
2014
£000
511
45
1,500
66
3
25
2014
£000
16,101
7,944
404,363
17,424
6,660
340,527
CHANGE
%
2
(36)
-
3
(33)
-
CHANGES
%
(8)
19
19
SHAREHOLDING
REQUIREMENT
£
1,050,600
561,000
811,600
750,000
636,540
VALUE OF BENEFICIALLY
HELD AND DEFERRED
SHARES¹
£
RATIO OF SHARES HELD
TO REQUIREMENT
%
53,213,000
672,000
5,362,000
1,432,000
774,000
5,065
120
661
191
122
SALARY
£
525,300
280,500
405,800
375,000
318,270
Shareholder voting at the last AGM
At the 2014 AGM the Directors’ Remuneration Report and the Directors’ Remuneration Policy received the following votes from shareholders:
FOR
AGAINST
TOTAL VOTES CAST (FOR AND AGAINST)
VOTES WITHHELD
TOTAL VOTES CAST (INCLUDING WITHHELD VOTES)
Approved by the Board on 12 June 2015 and signed on its behalf.
Michael O’Donnell
Chairman of the Remuneration Committee
POLICY TOTAL
NUMBER OF VOTES
% OF VOTES CAST
86,038,316
7,075,625
93,113,941
228,025
93,341,966
92%
8%
100%
-
-
REPORT TOTAL
NUMBER OF VOTES
69,603,704
23,510,237
93,113,941
228,025
93,341,966
% OF VOTES CAST
75%
25%
100%
-
-
71
HELICAL BAR PLC REPORT & ACCOUNTS 2015
GOVERNANCE
Report of the directors
Strategic report
A review of the Company’s business during the year, the principal risks and
uncertainties facing the Group and future prospects and developments are
included in the Chairman’s Review on page 50, the Chief Executive’s
statement on pages 12 to 13, the strategic report on pages 1 to 48 and the
Principal Risks report on pages 40 to 42, which should be read in
conjunction with this report.
Results and dividends
The results for the year are set out in the Consolidated Income Statement on
page 78 and Consolidated Statement of Comprehensive Income on page 78.
An interim dividend of 2.10p (2014: 2.00p) was paid on 30 December 2014
to shareholders on the shareholder register on 12 December 2014. A final
dividend of 5.15p (2014: 4.75p) per share is recommended for approval at
the Annual General Meeting (“AGM”) to be held on 24 July 2015. The total
ordinary dividend paid in the year of 6.85p (2014: 5.70p) per share amounts
to £7,944,000 (2014: £6,660,000).
Directors
The directors who held office during the year and up to the date of this report are listed below:
CHAIRMAN
NIGEL MCNAIR SCOTT
EXECUTIVE DIRECTORS
MICHAEL SLADE
TIM MURPHY
GERALD KAYE
MATTHEW BONNING-SNOOK
DUNCAN WALKER
NON-EXECUTIVE DIRECTORS
RICHARD GILLINGWATER
RICHARD GRANT
ANDREW GULLIFORD
MICHAEL O’DONNELL
JACK PITMAN – FORMER DIRECTOR
AGE
69
68
55
57
47
36
58
61
68
48
46
DATE OF APPOINTMENT
DATE OF RESIGNATION
TITLE
December 1985
August 1984
July 2012
September 1994
August 2007
June 2011
July 2012
July 2012
March 2006
June 2011
August 2007
Chairman
Chief Executive
Finance Director
Executive Director
Executive Director
Executive Director
Non-executive director
Non-executive director
Non-executive director
Non-executive director
13 February 2015
Executive Director
Details of the directors’ interests in the ordinary shares of the Company are shown on page 53.
Biographical details of all directors are shown on pages 52 and 53. All the
directors currently serving will offer themselves for re-election at the AGM to
be held on 24 July 2015. Details of directors’ remuneration and their
interests in share awards are set out in the Directors’ Remuneration Report
on pages 58 to 71.
Directors’ liability insurance and indemnity
The Company maintains Directors and Officers Liability Insurance. 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.
Corporate governance
The Group’s corporate governance policies, compliance with the UK
Corporate Governance Code and Going Concern statement are set out on
pages 54 to 55.
Directors’ conflict of interest
Under the Companies Act 2006 (the “Act”), Directors are subject to a
statutory duty to avoid a situation where they have, or can have, a direct or
indirect interest that conflicts, or may possibly conflict, with the interests of
the Company. As is permissible under the Act, the Company’s Articles of
Association allow the Board to consider, and if it sees fit, to authorise
situations where a Director has an interest that conflicts, or may possibly
conflict, with the interests of the Company. Directors are required to notify
the Company of any conflict or potential conflict of interest under an
established procedure and any conflicts or potential conflicts are noted at
each Board meeting.
Political donations
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 2015.
Financial instruments, capitalised interest and long
term incentive schemes
The information required in respect of financial instruments, as required
by Schedule 7 of the Large and Medium Sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2013 is shown in
note 36 on pages 104 to 107.
Interest capitalised on the Group property portfolio is shown on pages 89
and 95. Long term incentive schemes are explained on pages 64 to 65.
72
HELICAL BAR PLC REPORT & ACCOUNTS 2015
REPORt Of tHE dIRECtORs continued
GOVERNANCE
Substantial shareholdings
As at 1 June 2015, 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:
Change of control
Certain agreements between the Company or its subsidiaries and entities
including lending banks, joint venture partners and development partners
contain termination rights to take effect in the event of a change of control of
the Group. Given the commercial sensitivity of these agreements, the
directors do not intend to disclose specific details.
The Company’s Employee Share Incentive Plan contains provisions relating
to the vesting and exercise of options in the event of a change of control of
the Company.
Further to the issue on 24 June 2013 of £80 million 6.00% bonds due in
2020 (the “Bonds”), upon a change of control event as defined by the terms
and conditions of the Bonds, the bondholders will have the option to require
the Company to redeem or, at the Company’s option, purchase the Bonds at
their nominal amount together with accrued interest.
ABERDEEN ASSET MANAGERS
MICHAEL SLADE
BAILLIE GIFFORD
OLD MUTUAL
INVESTEC ASSET MANAGEMENT
Similarly, if a change of control event occurs, the holders of the Convertible
Bonds of £100m, issued on 17 June 2014 at 4.00% and due in June 2019,
have the right to require the issuer to redeem the Convertible Bonds at their
principal amount and accrued interest.
BLACK ROCK, INC.
AVIVA
JP MORGAN CHASE
NUMBER OF
ORDINARY SHARES
AT 1 JUNE 2015
15,551,401
12,688,711
7,688,919
6,856,860
5,861,046
5,731,209
5,269,258
4,865,402
4,569,862
%
13.2
10.7
6.5
5.8
5.0
4.8
4.5
4.1
3.9
There are no agreements between the Company and Directors or employees
providing for the compensation for loss of office or employment as a result of
a takeover bid.
Employment and environmental matters
Information in respect of the Group’s employment and environmental matters
and greenhouse gas reporting is contained in the Corporate Responsibility
Report on pages 44 to 48.
Post balance sheet events
There were no material post balance sheet events.
Group structure
Details of the Group’s principal subsidiary undertakings are disclosed in note
18 to the Financial Statements on pages 91 to 92.
Share capital
Details of the Company’s issued share capital are shown in note 28 to the
Financial Statements on page 100. The Company’s share capital consists of
both ordinary shares and deferred shares. Each class of shares rank pari
passu between themselves. There are no restrictions on the transfer of
shares in the Company other than those specified by law or regulation (for
example: insider trading laws) and pursuant to the Listing Rules of the
Financial Conduct 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 2015 Annual General
Meeting (AGM) specifies deadlines for exercising voting rights and
appointing a proxy or proxies to vote in relation to resolutions to be passed at
the meeting. There are no restrictions on voting rights other than as specified
by the Company’s Articles of Association.
Purchase of own shares
The Company was granted authority at the 2014 Annual General Meeting to
make market purchases of its own ordinary shares. No ordinary shares were
purchased under this authority during the year and up to the date of this
report. The authority will expire at the conclusion of the 2015 AGM, at which
a resolution will be proposed to renew this authority.
DIMENSIONAL FUND ADVISORS
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.
Annual General Meeting
The Annual General Meeting of the Company will be held on 24 July 2015 at
11.30 a.m. at The Connaught, Carlos Place, Mayfair, London W1K 2AL. The
special business at the 2015 AGM will include resolutions dealing with the
authority to issue shares, the disapplication of pre-emption rights, the authority
for the Company to purchase its own shares and the authority to call general
meetings on not less than 14 clear days’ notice. The notice of meeting,
containing explanations of all the resolutions to be proposed at that meeting,
is enclosed with this Annual Report and can be found on the Group’s website
at www.helical.co.uk.
Auditors
The Group’s auditors, Grant Thornton UK LLP, have expressed their willingness
to continue in office and resolutions to reappoint them and to authorise the
directors to determine their remuneration will be proposed at the AGM.
Disclosure of information to auditors
The directors who held office at the date of approval of this Directors’ report
confirm that, so far as they are aware, there is no relevant audit information
of which the Company’s auditors are unaware, and each director has taken all
the steps that he ought to have taken as a director to make himself aware of
any relevant information and to establish that the Company’s auditors are
aware of that information.
By order of the Board
James Moss ACA
Company Secretary
12 June 2015
73
HELICAL BAR PLC REPORT & ACCOUNTS 2015
GOVERNANCE
Statement of directors’ responsibilities
We 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, including the strategic 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
12 June 2015
Tim Murphy
Finance Director
The directors are responsible for preparing the Annual Report, the
Remuneration Report and the financial statements in accordance with
applicable law and regulations.
The directors consider that the annual report and the financial statements,
taken as a whole, provide the information necessary to assess the Company’s
performance, business model and strategy and is fair, balanced and
understandable.
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 and
Company 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; and,
• 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 Company’s transactions and disclose
with reasonable accuracy at any time the financial position of the Company
and enable them to ensure that the financial statements and Remuneration
Report comply with the Companies Act 2006 and article 4 of the IAS
Regulations. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
74
HELICAL BAR PLC REPORT & ACCOUNTS 2015
GOVERNANCE
Independent Auditor’s report
TO THE MEMBERS OF HELICAL BAR PLC
GOVERNANCE
Our opinion on the financial statements is unmodified
In our opinion:
• the financial statements give a true and fair view of the state of the
Group’s and of the parent company’s affairs as at 31 March 2015 and of
the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance
with International Financial Reporting Standards (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.
Who we are reporting to
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.
What we have audited
Helical Bar plc’s financial statements 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 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 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.
Our assessment of risk
In arriving at our opinions set out in this report, we highlight the following
risks that are, in our judgement, likely to be most important to users’
understanding of our audit.
AUdIt RIsK
HOW WE REsPONdEd tO tHE RIsK
Revenue recognition
The risk: The Group enters into contracts under which
the recognition of revenue and profit often involves
management judgement in applying International Accounting
Standard (IAS) 18, IAS 11 and International Financial
Reporting Interpretations Committee (IFRIC) 15, or is
determined by complex criteria such as staged recognition
of revenue upon completion of specified contractual
obligations. In addition, auditing standards prescribe a
presumed risk of fraud in revenue recognition in that
revenue may be misstated through improper recognition.
We have therefore identified revenue recognition as a
significant risk requiring special audit consideration.
Valuation of investment properties
The risk: The Group holds investment property for rental
income and capital appreciation which it has chosen to
revalue to fair value at each reporting date in accordance
with IAS 40 ‘Investment Property’. The fair values of
significant investment properties are determined by
professionally qualified external valuers.
These valuations involve a number of estimates and
assumptions, some of which derive from information
provided by management and can be highly judgemental.
In addition a small percentage difference in individual
property valuations could, when aggregated, result in a
material misstatement. We have therefore identified the
valuation of investment properties as a significant risk
requiring special audit consideration.
Directors’ remuneration – bonus and performance
share plans
The risk: The Group operates three directors’ bonus and
share plans being the Executive Bonus Plan 2011, the
Helical Bar Annual Bonus Scheme 2012 and the
Performance Share Plan.
Determining the charge in respect of the Performance
Share Plan in accordance with IFRS 2 ‘Share Based
Payments’ involves complex calculations and elements of
management judgement. The bonus calculation is driven
by the results of the Group and the performance of the
property portfolio, the latter of which is considered a key
area of management judgement. We have therefore
identified the bonus and performance share plans as
areas requiring particular audit attention.
Our response: Our audit work included, but was not limited to:
• evaluating the Group’s revenue recognition policies are in line with accounting standards and
their application to key development contracts;
• testing property proceeds to completion statements;
• agreeing rental income to tenant records and reconciling differences to relevant evidence such
as changes to lease terms;
• testing a sample of revenue items for each revenue stream, agreeing items selected for testing
to supporting documentation;
• reviewing contracts to ensure that revenue and profit has been correctly accounted for; and
• discussing and challenging key management judgements in interpreting contractual terms.
The Group’s accounting policy on the recognition of income is shown in note 38 and the
components of that income are included in note 2.
Our response: Our audit work included, but was not restricted to:
• obtaining an understanding of the approach to, and controls over, the valuation of investment
property through discussions with management;
• meeting with the external valuer, discussing and challenging the estimates, assumptions and
valuation methodology used;
• discussing and challenging the estimates, assumptions and valuation methodology used in the
directors’ valuations;
• comparing the accuracy of prior period valuations in the context of subsequent sales;
• reviewing the accounting treatment of complex transactions to confirm the recognition of any
sale or purchase as appropriate; and
• assessing the independence and credentials of the external valuer and evaluating the
adequacy of the valuer’s work in respect of our audit.
The group’s accounting policy on investment properties is included in note 38 and its
disclosures about investment properties are shown in note 15. The Audit Committee also
identified the valuation of the Group’s investment and trading and development portfolio is
the key area of judgement in its report on pages 56 and 57, where the Committee also
describes how it addressed this issue.
Our response: Our audit work included, but was not restricted to:
• confirming that the calculation methodologies adopted accord with the schemes’ rules;
• discussing and challenging management judgements over the key inputs into the bonus
calculation and performance share plan. Appropriate explanations and supporting evidence
were provided;
• confirming that matters in relation to the changes in the performance measures, to include an
increase in total shareholder returns, and approval of awards that required approval of the
Remuneration Committee have been approved;
• assessing and challenging management assumptions relating to the development stock
surplus which is a key input into the bonus calculation. Supporting evidence was provided for
explanations obtained; and
• challenging the assumptions underlying the forecast net asset value growth of the Group over
the three year vesting period of the Performance Share Plan options and future bonus cap.
The group’s disclosure of staff costs, share options and share based payments is shown in note 8.
75
HELICAL BAR PLC REPORT & ACCOUNTS 2015 INdEPENdENt AUdItOR’s REPORt continued
OUR APPLICATION OF MATERIALITY AND AN
OVERVIEW OF THE SCOPE OF OUR AUDIT
Materiality
We define materiality as the magnitude of misstatement in the financial statements
that makes it probable that the economic decisions of a reasonably knowledgeable
user would be changed or influenced. We determined materiality for the audit of
the Group financial statements as a whole to be £3.605 million, which is
approximately 1% of net assets. This benchmark is considered the most
appropriate because this is a key performance measure used by the Board of
Directors to report to investors on the financial position of the Group. We use a
different level of materiality, performance materiality, to drive the extent of our
testing and this was set at 75% of financial statement materiality for the audit of
the Group financial statements. We also determine a lower level of specific
materiality for certain areas such as directors’ remuneration and related party
transactions.
We determined the threshold at which we will communicate misstatements to the
Audit Committee to be £181,000. In addition we will communicate misstatements
below that threshold that, in our view, warrant reporting on qualitative grounds.
Overview of the scope of our audit
We conducted our audit in accordance with International Standards on
Auditing (UK and Ireland). Our responsibilities under those standards are
further described in the ‘Responsibilities for the financial statements and the
audit’ section of our report. We consider the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
We are independent of the Group in accordance with the Auditing Practices
Board’s Ethical Standards for Auditors, and we have fulfilled our other ethical
responsibilities in accordance with those Ethical Standards.
Our audit approach was based on a thorough understanding of the Group’s
business and was risk-based. The Group’s properties are spread across
wholly owned statutory entities and the Group’s 11 joint ventures. The
components of the Group were evaluated by the group audit team based on
a measure of materiality, considering each as a percentage of total Group
assets, revenues and profit before tax, to assess the significance of each
component and to determine the planned audit response. For those
components that were deemed significant either a full scope or targeted
audit approach was determined based on their relative materiality to the
Group and our assessment of audit risk. For significant components requiring
a full scope approach we evaluated and tested controls over the financial
reporting systems identified as part of our risk assessment, reviewed the
accounts production process and addressed critical accounting matters.
In order to address the audit risks described above, as identified during our
planning procedures, we performed a full scope audit of the consolidated
financial statements of the parent company, Helical Bar plc, and of the
financial information of the Group’s operations throughout the United
Kingdom. The operations that were subject to full scope audit procedures
make up 82% of net assets. Statutory audits of subsidiaries are performed to
lower materiality where applicable.
While the majority of the operations are located within the United Kingdom, the
Group has joint ventures overseas. Through an analysis of these operations we
determined that targeted audit procedures should be carried out, these targeted
procedures addressed the significant risks described above. Those components
subjected to targeted audit procedures comprise 18% of net assets.
The components that were subject to full scope audit procedures make up
82% of the Group’s net assets at the balance sheet date, 100% of the
Group’s revenue for the year and 68% of the Group’s profit before tax for the
year. In total our full scope and targeted procedures covered 100% of the
Group’s net assets at the balance sheet date, 100% of the Group’s revenue
for the year and 100% of the Group’s profit before tax for the year.
OTHER REPORTING REQUIRED BY REGULATION
Our opinion on other matters prescribed by the
Companies Act 2006 is unmodified
In our opinion:
• the part of the Directors’ Remuneration Report to be audited has been
properly prepared in accordance with the Companies Act 2006; and
• the information given in the Strategic Report and Report of the Directors
for the financial year for which the financial statements are prepared 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 ISAs (UK and Ireland), we are required to report to you if, in
our opinion, information in the annual report is:
• materially inconsistent with the information in the audited financial statements;
or
• apparently materially incorrect based on, or materially inconsistent with, our
knowledge of the Group acquired in the course of performing our audit; or
• otherwise misleading.
In particular, we are required to report to you if:
• we have identified any inconsistencies between our knowledge acquired
during the audit and the directors’ statement that they consider the annual
report is fair, balanced and understandable; or
• the annual report does not appropriately disclose those matters that were
communicated to the Audit Committee which we consider should have
been disclosed.
Under the Companies Act 2006 we are required to report to you if, in
our opinion:
• adequate accounting records have not been kept by the parent company,
or returns adequate for our audit have not been received from branches
not visited by us; or
• the parent company financial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for
our audit.
Under the Listing Rules, we are required to review:
• the directors’ statement, set out on page 55, in relation to going concern; and
• the part of the Corporate Governance Statement relating to the company’s
compliance with the ten provisions of the UK Corporate Governance Code
specified for our review.
Responsibilities for the financial statements and the audit
What an audit of financial statements involves:
A description of the scope of an audit of financial statements is provided on the
Financial Reporting Council’s website at www.frc.org.uk/auditscopeukprivate.
What the directors are responsible for:
As explained more fully in the Statement of Directors’ Responsibilities set out
on page 74, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view.
What we are responsible for:
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 Ethical Standards for Auditors.
Charles Hutton-Potts
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
12 June 2015
76
HELICAL BAR PLC REPORT & ACCOUNTS 2015
FINANCIAL STATEMENTS
HELICAL BAR PLC
REPORT & ACCOUNTS 2015
FINANCIAL STATEMENTS
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated and company balance sheets
Consolidated and company cash flow statements
Consolidated and company statements of changes in equity
Notes to the financial statements
Five year review
78
78
79
80
81
82
111
03
FINANCIAL STATEMENTS
77
Consolidated income statement
FOR THE YEAR ENDED 31 MARCH 2015
REVENUE
NET RENTAL INCOME
DEVELOPMENT PROPERTY PROFIT
TRADING PROPERTY GAIN
SHARE OF RESULTS OF JOINT VENTURES
OTHER OPERATING INCOME
GROSS PROFIT BEFORE NET GAIN ON SALE AND REVALUATION OF INVESTMENT PROPERTIES
NET GAIN ON SALE AND REVALUATION OF INVESTMENT PROPERTIES
IMPAIRMENT OF AVAILABLE FOR SALE ASSETS
GROSS PROFIT
ADMINISTRATIVE EXPENSES
OPERATING PROFIT
FINANCE COSTS
FINANCE INCOME
CHANGE IN FAIR VALUE OF DERIVATIVE FINANCIAL INSTRUMENTS
CHANGE IN FAIR VALUE OF CONVERTIBLE BOND
FOREIGN EXCHANGE LOSSES
PROFIT BEFORE TAX
TAXATION ON PROFIT ON ORDINARY ACTIVITIES
PROFIT AFTER TAX
- ATTRIBUTABLE TO EQUITY SHAREHOLDERS
- ATTRIBUTABLE TO NON-CONTROLLING INTERESTS
PROFIT FOR THE YEAR
BASIC EARNINGS PER SHARE
DILUTED EARNINGS PER SHARE
YEAR ENDED
31.3.15
£000
106,341
34,233
15,674
2,503
27,497
368
80,275
69,384
(773)
148,886
(26,530)
122,356
(23,678)
2,480
(8,389)
(3,263)
(2,061)
87,445
(12,669)
74,776
74,489
287
74,776
64.6P
60.8P
YEAR ENDED
31.3.14
£000
123,637
24,402
62,825
252
16,448
230
104,157
29,325
(88)
133,394
(26,676)
106,718
(13,983)
4,135
5,312
-
(501)
101,681
(14,126)
87,555
87,603
(48)
87,555
75.0P
73.2P
NOTE
2
3
4
5
19
6
22
7
9
9
36
26
10
14
14
Consolidated statement of comprehensive income
FOR THE YEAR ENDED 31 MARCH 2015
PROFIT FOR THE YEAR
IMPAIRMENT OF AVAILABLE-FOR-SALE INVESTMENTS
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
NOTE
22
YEAR ENDED
31.3.15
£000
74,776
-
149
74,925
74,638
287
74,925
YEAR ENDED
31.3.14
£000
87,555
(936)
51
86,670
86,718
(48)
86,670
The exchange differences on retranslation of net investments in foreign operations will be reclassified to the Income Statement in the future.
78
FINANCIAL STATEMENTS HELICAL BAR PLC REPORT & ACCOUNTS 2015 Consolidated and company balance sheets
AS AT 31 MARCH 2015
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
PROPERTY DERIVATIVE FINANCIAL ASSET
AVAILABLE-FOR-SALE INVESTMENTS
CORPORATE TAX RECEIVABLE
TRADE AND OTHER RECEIVABLES
CASH AND CASH EQUIVALENTS
TOTAL ASSETS
CURRENT LIABILITIES
TRADE AND OTHER PAYABLES
CORPORATE TAX PAYABLE
BORROWINGS
NON-CURRENT LIABILITIES
TRADE AND OTHER PAYABLES
BORROWINGS
DERIVATIVE FINANCIAL INSTRUMENTS
DEFERRED TAX LIABILITY
TOTAL LIABILITIES
NET ASSETS
EQUITY
CALLED-UP SHARE CAPITAL
SHARE PREMIUM ACCOUNT
REVALUATION RESERVE
CAPITAL REDEMPTION RESERVE
OTHER RESERVES
RETAINED EARNINGS
OWN SHARES HELD
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY
NON-CONTROLLING INTERESTS
TOTAL EQUITY
The financial statements were approved by the Board of Directors on 12 June 2015.
Michael Slade
Director
Tim Murphy
Director
NOTE
15
17
18
19
36
23
11
20
21
22
23
24
25
26
25
26
36
11
GROUP
31.3.15
£000
GROUP
31.3.14
£000
701,521
2,361
-
71,585
1
1,555
-
777,023
92,578
16,388
4,342
1,418
65,216
120,993
300,935
1,077,958
(65,802)
-
(45,428)
(111,230)
-
(552,813)
(8,096)
(1,456)
(562,365)
(673,595)
493,201
1,050
-
62,980
1,867
7,673
8,458
575,229
98,160
-
4,973
-
33,337
63,237
199,707
774,936
(49,230)
(5,370)
(1,275)
(55,875)
(2,150)
(374,811)
(1,573)
-
(378,534)
(434,409)
COMPANY
31.3.15
£000
-
2,292
36,585
15
-
-
1,233
40,125
-
-
-
1,418
777,728
13,942
793,088
833,213
(416,696)
-
(6,120)
(422,816)
-
(169,109)
(11,080)
-
(180,189)
(603,005)
COMPANY
31.3.14
£000
-
949
36,584
15
315
-
749
38,612
-
-
-
-
491,437
30,376
521,813
560,425
(235,578)
(2,908)
-
(238,486)
-
(82,399)
(192)
-
(82,591)
(321,077)
2
404,363
340,527
230,208
239,348
28
1,447
98,798
108,060
7,478
291
188,229
-
404,303
60
1,447
98,678
33,106
7,478
291
200,455
(950)
340,505
22
1,447
98,798
-
7,478
1,987
1,447
98,678
-
7,478
1,987
120,498
129,758
-
-
230,208
239,348
-
-
404,363
340,527
230,208
239,348
79
FINANCIAL STATEMENTSFINANCIAL STATEMENTS HELICAL BAR PLC REPORT & ACCOUNTS 2015
Consolidated and company cash flow statements
FOR THE YEAR TO 31 MARCH 2015
CASH FLOWS FROM OPERATING ACTIVITIES
PROFIT/(LOSS) BEFORE TAX
DEPRECIATION
REVALUATION GAIN ON INVESTMENT PROPERTIES
GAIN ON SALES OF INVESTMENT PROPERTIES
PROFIT ON SALE OF PLANT AND EQUIPMENT
NET FINANCING COSTS
CHANGE IN VALUE OF DERIVATIVE FINANCIAL INSTRUMENTS
PROFIT ON FORWARD PROPERTY CONTRACT
CHANGE IN FAIR VALUE OF CONVERTIBLE BOND
SHARE BASED PAYMENT CHARGE
SHARE OF RESULTS OF JOINT VENTURES
IMPAIRMENT OF AVAILABLE FOR SALE ASSETS
FOREIGN EXCHANGE MOVEMENT
OTHER NON-CASH ITEMS
CASH INFLOW 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 PAID
CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
PURCHASE OF INVESTMENT PROPERTY
SALE OF INVESTMENT PROPERTY
COST OF CANCELLING INTEREST RATE SWAP
INVESTMENT IN SUBSIDIARIES
INVESTMENT IN JOINT VENTURES
RETURN OF INVESTMENT IN JOINT VENTURES
DIVIDENDS FROM JOINT VENTURES
AVAILABLE-FOR-SALE ASSET ADDITIONS
SALE OF PLANT AND EQUIPMENT
PURCHASE OF LEASEHOLD IMPROVEMENTS, PLANT AND EQUIPMENT
NET CASH USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
BORROWINGS DRAWN DOWN
SHARES ISSUED
BORROWINGS REPAID
PURCHASE OF OWN SHARES
EQUITY DIVIDENDS PAID
NET CASH 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
80
GROUP
31.3.15
£000
87,445
544
(66,904)
(2,480)
(23)
20,806
8,389
(16,388)
3,263
6,432
(27,497)
773
2,213
-
16,573
(25,975)
4,125
13,162
7,885
(22,277)
2,480
(7,064)
(26,861)
(18,976)
GROUP
31.3.14
£000
101,681
719
(20,714)
(8,611)
-
9,529
(5,312)
-
-
6,333
(16,448)
88
109
(10)
67,364
3,680
(11,306)
16,096
75,834
(17,645)
1,236
(6,903)
(23,312)
52,522
(271,093)
133,209
(199,944)
56,914
-
-
(10,141)
11,778
17,013
(144)
23
(1,859)
8
-
(650)
2,668
1,350
-
34
(646)
(121,214)
(140,266)
COMPANY
31.3.15
£000
(1,780)
517
-
-
-
6,260
-
-
-
-
-
-
3,014
(23)
7,988
COMPANY
31.3.14
£000
29,549
653
-
-
-
1,121
(1,098)
-
-
-
-
-
-
(10)
30,215
(286,291)
(165,193)
-
182,976
(95,327)
(12,216)
5,157
(6,841)
(13,900)
(109,227)
-
-
-
(1)
-
-
-
-
23
(1,859)
(1,837)
-
87,763
(47,215)
(6,087)
1,810
(6,903)
(11,180)
(58,395)
-
-
-
(150)
-
-
-
-
34
(646)
(762)
274,369
104,200
80,000
375,503
120
-
(156,381)
(152,636)
(13,349)
(7,944)
197,949
57,759
(3)
63,237
120,993
(950)
(6,660)
114,123
26,379
(5)
36,863
63,237
120
(1,746)
-
(7,944)
94,630
(16,434)
-
30,376
13,942
-
(7,842)
-
(6,660)
65,498
6,341
-
24,035
30,376
FINANCIAL STATEMENTS HELICAL BAR PLC REPORT & ACCOUNTS 2015 Consolidated and company statements
of changes in equity
FOR THE YEAR TO 31 MARCH 2015
GROUP
SHARE
CAPITAL
£000
SHARE
PREMIUM
£000
REVALUATION
RESERVE
£000
CAPITAL
REDEMPTION
RESERVE
£000
OTHER
RESERVES
£000
RETAINED
EARNINGS
£000
OWN
SHARES
HELD
£000
NON-
CONTROLLING
INTERESTS
£000
TOTAL
£000
-
-
-
-
-
-
AT 31 MARCH 2013
1,447
98,678
10,593
7,478
291
135,211
TOTAL COMPREHENSIVE INCOME/
(EXPENSE)
REVALUATION SURPLUS
REALISED ON DISPOSALS
PERFORMANCE SHARE PLAN
SHARE SETTLED BONUS
PURCHASE OF OWN SHARES
DIVIDENDS PAID
AT 31 MARCH 2014
TOTAL COMPREHENSIVE INCOME
REVALUATION SURPLUS
REALISED ON DISPOSALS
PAYMENT TO MINORITY INTEREST
PERFORMANCE SHARE PLAN
PERFORMANCE SHARE PLAN DEFERRED TAX
SHARE SETTLED BONUS
NEW SHARE CAPITAL ISSUED
DIVIDENDS PAID
PURCHASE OF OWN SHARES
OWN SHARES HELD RESERVE TRANSFER
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,714
1,799
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
86,718
(20,714)
(1,799)
6,333
1,366
-
(950)
(6,660)
-
1,447
98,678
33,106
7,478
291
200,455
(950)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
120
-
-
-
-
66,904
8,050
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
74,638
(66,904)
(8,050)
-
6,432
2,477
1,424
-
(7,944)
-
-
-
-
-
-
-
-
-
-
(13,349)
(14,299)
14,299
70
(48)
253,768
86,670
-
-
-
-
-
-
-
-
6,333
1,366
(950)
(6,660)
22
287
340,527
74,925
-
-
-
-
(249)
(249)
-
-
-
-
-
-
-
6,432
2,477
1,424
120
(7,944)
(13,349)
-
AT 31 MARCH 2015
1,447
98,798
108,060
7,478
291
188,229
-
60
404,363
For a breakdown of Total Comprehensive Income/Expense, see the Consolidated Statement of Comprehensive Income on page 78.
Included within changes in equity are net transactions with owners of £10,840,000 (2014: £89,000) made up of: the performance share plan charge of £6,432,000
(2014: £6,333,000) and related deferred tax of £2,477,000 (2014: £nil), dividends paid of £7,944,000 (2014: £6,660,000), the purchase of own shares of
£13,349,000 (2014: £950,000), new share capital issued of £120,000 (2014: £nil) and the share settled bonuses of £1,424,000 (2014: £1,366,000).
The adjustment to retained earnings of £6,432,000 adds back the performance share plan charge (2014: £6,333,000), in accordance with IFRS 2 Share-Based Payments.
COMPANY
AT 31 MARCH 2013
TOTAL COMPREHENSIVE EXPENSE
DIVIDENDS PAID
AT 31 MARCH 2014
TOTAL COMPREHENSIVE INCOME
DIVIDENDS PAID
NEW SHARE CAPITAL ISSUED
AT 31 MARCH 2015
SHARE
CAPITAL
£000
1,447
-
-
SHARE
PREMIUM
£000
98,678
-
-
1,447
98,678
-
-
-
1,447
-
-
120
98,798
REVALUATION
RESERVE
£000
CAPITAL
REDEMPTION
RESERVE
£000
OTHER
RESERVES
£000
RETAINED
EARNINGS
£000
TOTAL
£000
-
-
-
-
-
-
-
-
7,478
1,987
113,346
222,936
-
-
-
-
23,072
(6,660)
23,072
(6,660)
7,478
1,987
129,758
239,348
-
-
-
-
-
-
(1,316)
(7,944)
-
(1,316)
(7,944)
120
7,478
1,987
120,498
230,208
Total Comprehensive Income is made up of the loss after tax of £1,316,000 (2014: gain of £23,072,000).
Included within changes in equity are net transactions with owners of £7,824,000 (2014: £6,660,000) made up of dividends paid of £7,944,000 (2014:
£6,660,000) and new share capital issued of £120,000 (2014: £nil).
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.
81
FINANCIAL STATEMENTSFINANCIAL STATEMENTS HELICAL BAR PLC REPORT & ACCOUNTS 2015 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.
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, convertible bonds and derivative financial instruments. The measurement bases and principal
accounting policies of the Group are set out in note 38. These accounting policies are consistent with those applied in the year to 31 March 2014, as amended
to reflect any new Standards, Amendments to Standards and interpretations which are mandatory for the year ended 31 March 2015, these are detailed below:
IAS 27 (revised): Separate financial statements (effective 1 January 2014);
IAS 28 (revised): Associates and joint ventures (effective 1 January 2014);
IFRS 10: Consolidated financial statements (effective 1 January 2014);
IFRS 11: Joint arrangements (effective 1 January 2014);
IFRS 12: Disclosure of interests in other entities (effective 1 January 2014);
Amendments to IAS 32 (Dec 2011) Offsetting financial assets and financial liabilities (effective 1 January 2014); and
Amendments to IAS 36 Recoverable amounts disclosures for non-financial assets (effective 1 January 2014).
There has been no material impact as a result of adopting the above other than additional disclosure on the fair value measurement of Investment Properties.
The following standards, interpretations and amendments have been issued but are not yet effective and will be adopted at the point they are effective:
IFRS 9: Financial instruments: Classification and measurement;
Annual improvements to IFRSs 2011-2013 cycle (effective period commencing after 1 July 2014);
IFRS 14 Regulatory deferral accounts;
IFRS 15 Revenue from contracts with customers (effective period commencing after 1 February 2015);
Defined benefit plans: employee contributions (Amendments to IAS 19);
Clarification of acceptable methods of depreciation and amortisation – amendments to IAS 16 and IAS 38;
Sale or contribution of assets between an investor and its associate or joint venture;
Amendments to IFRS 11: Accounting for acquisitions of interest in joint operations; and
Amendments to IAS 27: Equity method in separate financial statements.
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.
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
31.3.15
£000
37,246
-
37,394
199
74,839
DEVELOPMENTS
YEAR ENDED
31.3.15
£000
1,086
30,416
-
-
TOTAL
YEAR ENDED
31.3.15
£000
38,332
30,416
37,394
199
INVESTMENT
AND TRADING
YEAR ENDED
31.3.14
£000
27,994
-
8,230
2,956
DEVELOPMENTS
YEAR ENDED
31.3.14
£000
2,000
82,457
-
-
TOTAL
YEAR ENDED
31.3.14
£000
29,994
82,457
8,230
2,956
31,502
106,341
39,180
84,457
123,637
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 (2014: £nil), revenue from the sale of goods of £63,953,000
(2014: £62,965,000), revenue from services of £4,056,000 (2014: £30,678,000), and rental income of £38,332,000 (2014: £29,994,000).
All revenues are within the UK other than rental income from development properties in Poland of £1,086,000 (2014: £1,065,000) and £630,000 (2014:
£835,000) of development income derived from the Group’s operations in Poland.
82
FINANCIAL STATEMENTS HELICAL BAR PLC REPORT & ACCOUNTS 2015 2. SEGMENTAL INFORMATION continued
PROFIT BEFORE TAX
NET RENTAL INCOME
DEVELOPMENT PROPERTY PROFIT
TRADING PROPERTY PROFIT
SHARE OF RESULTS OF JOINT VENTURES
GAIN ON SALE AND REVALUATION OF
INVESTMENT PROPERTIES
IMPAIRMENT OF AVAILABLE FOR SALE ASSETS
OTHER OPERATING INCOME
GROSS PROFIT
ADMINISTRATIVE EXPENSES
FINANCE COSTS
FINANCE INCOME
CHANGE IN FAIR VALUE OF DERIVATIVE FINANCIAL INSTRUMENTS
CHANGE IN FAIR VALUE OF CONVERTIBLE BOND
FOREIGN EXCHANGE LOSSES
PROFIT BEFORE TAX
NET ASSETS
INVESTMENT PROPERTIES
LAND, DEVELOPMENTS AND TRADING
PROPERTIES
INVESTMENT IN JOINT VENTURES
PROPERTY DERIVATIVE FINANCIAL ASSET
INVESTMENT
AND TRADING
AT 31.3.15
£000
701,521
DEVELOPMENTS
AT 31.3.15
£000
-
28
92,550
57,209
-
14,376
16,388
INVESTMENT
AND TRADING
YEAR ENDED
31.3.15
£000
33,270
-
2,503
27,398
69,384
DEVELOPMENTS
YEAR ENDED
31.3.15
£000
963
15,674
-
99
-
TOTAL
YEAR ENDED
31.3.15
£000
34,233
15,674
2,503
27,497
69,384
INVESTMENT
AND TRADING
YEAR ENDED
31.3.14
£000
22,764
-
252
18,882
29,325
DEVELOPMENTS
YEAR ENDED
31.3.14
£000
1,638
62,825
-
(2,434)
-
TOTAL
YEAR ENDED
31.3.14
£000
24,402
62,825
252
16,448
29,325
132,555
16,736
149,291
71,223
62,029
133,252
(773)
368
148,886
(26,530)
(23,678)
2,480
(8,389)
(3,263)
(2,061)
87,445
TOTAL
AT 31.3.15
£000
701,521
92,578
71,585
16,388
INVESTMENT
AND TRADING
AT 31.3.14
£000
493,201
DEVELOPMENTS
AT 31.3.14
£000
-
2,528
95,632
58,460
-
4,520
-
(88)
230
133,394
(26,676)
(13,983)
4,135
5,312
-
(501)
101,681
TOTAL
AT 31.3.14
£000
493,201
98,160
62,980
-
758,758
123,314
882,072
554,189
100,152
654,341
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
2,361
1
-
4,342
66,771
1,418
120,993
1,077,958
(673,595)
404,363
1,050
1,867
8,458
4,973
41,010
-
63,237
774,936
(434,409)
340,527
All non-current assets are derived from the Group’s UK operations except for owner occupied property, plant and equipment with a net book value of £69,000
(2014: £101,000).
83
FINANCIAL STATEMENTSHELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued 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
Property overheads include lettings costs, vacancy costs and bad debt provisions.
YEAR ENDED
31.3.15
£000
38,332
(269)
(3,489)
34,574
(341)
34,233
YEAR ENDED
31.3.14
£000
29,994
(476)
(4,328)
25,190
(788)
24,402
The amounts above include gross rental income from investment properties of £37,246,000 (2014: £27,994,000) and net rental income from investment
properties of £33,270,000 (2014: £22,764,000).
No contingent rental income was received in the year (2014: £nil).
4. DEVELOPMENT PROPERTY PROFIT
DEVELOPMENT PROPERTY INCOME
PROFIT ON FORWARD PROPERTY CONTRACT
COST OF SALES
SALES EXPENSES
PROVISION AGAINST BOOK VALUES
DEVELOPMENT PROPERTY PROFIT
5. TRADING PROPERTY GAIN
TRADING PROPERTY SALES
COST OF SALES
SALES EXPENSES
TRADING PROPERTY GAIN
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
GAIN ON SALE OF INVESTMENT PROPERTIES
REVALUATION SURPLUS ON INVESTMENT PROPERTIES
GAIN ON SALE AND REVALUATION OF INVESTMENT PROPERTIES
84
YEAR ENDED
31.3.15
£000
30,416
16,388
(30,136)
(542)
(452)
15,674
YEAR ENDED
31.3.15
£000
37,394
(33,512)
(1,379)
2,503
YEAR ENDED
31.3.15
£000
133,782
(130,729)
(573)
2,480
66,904
69,384
YEAR ENDED
31.3.14
£000
82,457
-
(15,613)
(4,571)
552
62,825
YEAR ENDED
31.3.14
£000
8,230
(7,945)
(33)
252
YEAR ENDED
31.3.14
£000
57,971
(48,303)
(1,057)
8,611
20,714
29,325
HELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued 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
- AUDIT OF INTERIM CONSOLIDATED FINANCIAL STATEMENTS
- AUDIT OF COMPANY’S SUBSIDIARIES BY AFFILIATE OF GROUP AUDITOR
OPERATING LEASE COSTS
8. STAFF COSTS
STAFF COSTS DURING THE YEAR:
- WAGES AND SALARIES
- SOCIAL SECURITY COSTS
- OTHER PENSION COSTS
YEAR ENDED
31.3.15
£000
26,530
YEAR ENDED
31.3.14
£000
26,676
544
6,432
719
6,333
154
62
68
3
730
YEAR ENDED
31.3.15
£000
12,406
3,524
171
16,101
150
52
42
12
574
YEAR ENDED
31.3.14
£000
14,465
2,844
115
17,424
Details of the remuneration of Directors amounting to £24,064,000 (2014: £14,396,000) are included in the Directors’ Remuneration Report on pages 58 to
71. The amount of the share-based payments charge relating to share awards made to Directors is £5,815,000 (2014: £5,799,000).
Included within wages and salaries are directors’ bonuses of £6,271,000 (2014: £6,099,000) as discussed in the Directors’ Remuneration Report on pages
58 to 71.
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 43 (2014: 46) of which 32 are UK staff and 11 are
based in Poland.
Of the staff costs of £16,101,000 (2014: £17,424,000), £15,663,000 is included within administrative expenses (2014: £16,369,000), £438,000 is included
within development costs (2014: £481,000) and £nil is included in Other operating income/expense (2014: £574,000).
Within administrative costs is the share based payment charge for the year of £6,432,000 (2014: £6,333,000) 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
GAIN ON PURCHASE OF LOAN
FINANCE INCOME
YEAR ENDED
31.3.15
£000
(21,055)
(6,264)
3,641
(23,678)
2,480
-
2,480
YEAR ENDED
31.3.14
£000
(14,298)
(2,520)
2,835
(13,983)
1,236
2,899
4,135
85
FINANCIAL STATEMENTSHELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued 9. FINANCE COSTS AND FINANCE INCOME continued
During the year to 31 March 2014, the Group purchased a loan from one of its lenders realising a gain of £2,899,000.
On projects where specific third party loans have been arranged, interest has been capitalised in accordance with IAS 23 - Borrowing Costs, at the rate for the
individual loan. The weighted average capitalised interest rate of such loans was 3.68% (2014: 3.57%). 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 4.62% (2014: 4.60%).
10.
TAXATION ON PROFIT ON ORDINARY ACTIVITIES
THE TAX CHARGE IS BASED ON THE PROFIT FOR THE YEAR AND REPRESENTS:
UNITED KINGDOM CORPORATION TAX AT 21% (2014: 23%)
- GROUP CORPORATION TAX
- ADJUSTMENT IN RESPECT OF PRIOR PERIODS
- OVERSEAS TAX
CURRENT TAX CHARGE
DEFERRED TAX AT 20% (2014: 20%)
- CAPITAL ALLOWANCES
- TAX LOSSES
- UNREALISED CHARGEABLE GAINS
- OTHER TEMPORARY DIFFERENCES
DEFERRED TAX CHARGE
TAX CHARGE ON PROFIT ON ORDINARY ACTIVITIES
Factors affecting the tax charge for the period
The tax assessed for the period is lower than the standard rate of corporation tax in the UK.
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 21% (2014: 23%)
EFFECT OF:
- EXPENSES NOT DEDUCTIBLE FOR TAX PURPOSES
- INCOME NOT SUBJECT TO UK CORPORATION TAX
- ADJUSTMENT TO CAPITAL ALLOWANCES
- TAX MOVEMENTS ON SHARE AWARDS
- ADDITIONAL TAX LOSSES UNAVAILABLE
- OPERATING PROFIT OF JOINT VENTURES
- PRIOR YEAR ADJUSTMENT
- MOVEMENT ON SALE AND REVALUATION NOT RECOGNISED THROUGH DEFERRED TAX
- CHARGEABLE GAIN IN (EXCESS OF)/LOWER THAN PROFIT OR LOSS ON INVESTMENT PROPERTY
- OVERSEAS TAX
- OTHER TEMPORARY DIFFERENCES
EFFECT OF CHANGE OF RATE OF CORPORATION TAX
TOTAL TAX CHARGE FOR THE PERIOD
YEAR ENDED
31.3.15
£000
YEAR ENDED
31.3.14
£000
(215)
(22)
(39)
(276)
(297)
3,033
(15,096)
(33)
(12,393)
(12,669)
(11,687)
(403)
(113)
(12,203)
1,157
(1,746)
(1,598)
264
(1,923)
(14,126)
YEAR ENDED
31.3.15
£000
87,445
(18,363)
YEAR ENDED
31.3.14
£000
101,681
(23,387)
(1,041)
(1,422)
285
331
609
(143)
5,774
(22)
(1,370)
(278)
(39)
901
687
(12,669)
164
493
1,135
(168)
3,783
(403)
3,971
1,980
(113)
971
(1,130)
(14,126)
Note: all deferred tax balances have been calculated at the substantively enacted future rate of corporation tax of 20% for the year to 31 March 2016.
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.
86
HELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued DEFERRED TAX
11.
Deferred tax provided for in the financial statements is set out below:
CAPITAL ALLOWANCES
TAX LOSSES
UNREALISED CHARGEABLE GAINS
OTHER TEMPORARY DIFFERENCES
DEFERRED TAX (LIABILITY)/ASSET
GROUP
31.3.15
£000
(1,561)
12,021
(16,687)
4,771
(1,456)
GROUP
31.3.14
£000
(1,264)
8,988
(1,598)
2,332
8,458
COMPANY
31.3.15
£000
60
1,173
-
-
1,233
COMPANY
31.3.14
£000
99
363
-
287
749
Other temporary differences include 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 deferred tax liability of £3,278,000 arising on the profit on the fair value of the
forward property contract has also been included in other temporary differences. £2,477,000 of the increase in the deferred tax in respect of future tax relief
for share awards has been recognised in reserves in accordance with IAS12.
The Group contains entities with tax losses for which no deferred tax asset is recognised. The total unrecognised losses amount to approximately £9,036,000.
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 £1,561,000
(2014: £1,264,000) would be released and further capital allowances of £18,031,000 (2014: £11,400,000) would be available to reduce future tax liabilities.
12.
DIVIDENDS PAID AND PAYABLE
ATTRIBUTABLE TO EQUITY SHARE CAPITAL
ORDINARY
- INTERIM PAID OF 2.10p (2014: 2.00p) PER SHARE
- PRIOR PERIOD FINAL PAID OF 4.75p (2014: 3.70p) PER SHARE
TOTAL DIVIDENDS PAID AND PAYABLE IN YEAR – 6.85p (2014: 5.70p) PER SHARE
YEAR ENDED
31.3.15
£000
YEAR ENDED
31.3.14
£000
2,406
5,538
7,944
2,337
4,323
6,660
An interim dividend of 2.10p was paid on 30 December 2014 to shareholders on the register on 12 December 2014. The final dividend of 5.15p, if approved
at the AGM on 24 July 2015, will be paid on 31 July 2015 to shareholders on the register on 3 July 2015. This final dividend, amounting to £5,899,000, has
not been included as a liability as at 31 March 2015, in accordance with IFRS.
PARENT COMPANY
13.
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 £1,316,000 (2014: profit of £23,072,000).
EARNINGS PER SHARE
14.
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.
87
FINANCIAL STATEMENTSHELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued EARNINGS PER SHARE continued
14.
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.
EARNINGS PER SHARE
ORDINARY SHARES IN ISSUE
WEIGHTING ADJUSTMENT
YEAR ENDED
31.3.15
000
118,184
YEAR ENDED
31.3.14
000
118,138
(2,897)
(1,323)
WEIGHTED AVERAGE ORDINARY SHARES IN ISSUE FOR CALCULATION OF BASIC EARNINGS PER SHARE
115,287
116,815
WEIGHTED AVERAGE ORDINARY SHARES ISSUED ON EXERCISE OF SHARE OPTIONS
WEIGHTED AVERAGE ORDINARY SHARES TO BE ISSUED ON SHARE SETTLED BONUSES
WEIGHTED AVERAGE ORDINARY SHARES TO BE ISSUED UNDER PERFORMANCE SHARE PLAN
-
1,016
6,182
WEIGHTED AVERAGE ORDINARY SHARES IN ISSUE FOR CALCULATION OF DILUTED EARNINGS PER SHARE
122,485
EARNINGS USED FOR CALCULATION OF BASIC AND DILUTED EARNINGS PER SHARE
£000
74,489
46
451
2,389
119,701
£000
87,603
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 SALE AND REVALUATION OF INVESTMENT PROPERTIES IN THE RESULTS OF JOINT VENTURES
TAX ON PROFIT ON DISPOSAL OF INVESTMENT PROPERTIES
TRADING PROPERTY GAIN
FAIR VALUE MOVEMENT ON DERIVATIVE FINANCIAL INSTRUMENTS
FAIR VALUE MOVEMENT ON CONVERTIBLE BOND
SHARE OF FAIR VALUE MOVEMENTS ON DERIVATIVE FINANCIAL INSTRUMENTS IN THE RESULTS OF JOINT
VENTURES
IMPAIRMENT OF AVAILABLE-FOR-SALE INVESTMENT
DEFERRED TAX
EARNINGS USED FOR CALCULATION OF EPRA EARNINGS PER SHARE
PERFORMANCE RELATED AWARDS
EARNINGS USED FOR CALCULATION OF ADJUSTED EARNINGS PER SHARE
EPRA EARNINGS PER SHARE
ADJUSTED EARNINGS PER SHARE
64.6p
75.0p
60.8p
73.2p
YEAR ENDED
31.3.15
£000
74,489
(69,384)
(27,225)
-
(2,503)
8,389
3,263
578
773
14,425
2,805
15,647
18,452
2.4p
16.0p
YEAR ENDED
31.3.14
£000
87,603
(29,325)
(15,710)
1,981
(252)
(5,312)
-
(1,001)
88
862
38,934
11,613
50,547
33.3p
43.3p
The earnings used for calculation of EPRA earnings per share includes net rental income and development property profits but excludes trading property
gains/losses.
88
HELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued 15.
INVESTMENT PROPERTIES
GROUP
FAIR VALUE AT 1 APRIL
PROPERTY ACQUISITIONS
TRANSFERS FROM LAND, DEVELOPMENTS
AND TRADING PROPERTIES
DISPOSALS
REVALUATION SURPLUS
REVALUATION SURPLUS ATTRIBUTABLE TO
PROFIT SHARE PARTNER
FREEHOLD
31.3.15
£000
450,276
191,280
-
LEASEHOLD
31.3.15
£000
42,925
79,813
-
TOTAL
31.3.15
£000
493,201
271,093
-
(112,089)
(18,640)
(130,729)
61,376
1,027
5,528
25
66,904
1,052
FREEHOLD
31.3.14
£000
288,076
183,357
-
(41,870)
20,493
220
LEASEHOLD
31.3.14
£000
23,950
16,587
8,600
TOTAL
31.3.14
£000
312,026
199,944
8,600
(6,433)
(48,303)
221
-
20,714
220
FAIR VALUE AT 31 MARCH
591,870
109,651
701,521
450,276
42,925
493,201
Interest capitalised during the year in respect of the refurbishment of investment properties amounted to £667,000 (2014: £nil).
Interest capitalised in respect of the refurbishment of investment properties is included in investment properties to the extent of £5,449,000 (2014:
£4,782,000).
Investment properties with a total fair value of £628,621,000 (2014: £474,200,000) were held as security against borrowings.
All of the Group’s properties are level 3, as defined by IFRS 13 Fair Value Measurement, in the fair value hierarchy as at 31 March 2015 and there were no
transfers between levels during the year. Level 3 inputs used in valuing the properties, are those which are unobservable, as opposed to level 1 (inputs from
quoted prices) and level 2 (observable inputs either directly, i.e. as prices, or indirectly, i.e. derived from prices).
Transfers into and transfers out of the fair value hierarchy levels are recognised on the date of the event or change in circumstances that caused the transfer.
There were no transfers in or out of Level 3 for investment properties during the year.
Valuation methodology
The fair value of the Group’s investment property as at 31 March 2015 was determined by independent external valuers at that date, except for investment
properties valued by the Directors. The valuations are in accordance with the Royal Institution of Chartered Surveyors (‘RICS’) Valuation – Professional
Standards (“The Red Book”) and the International Valuation Standards and were arrived at by reference to market transactions for similar properties. Fair values
for investment properties are calculated using the present value income approach. The main assumptions underlying the valuations are in relation to rent profile
and yields as discussed below. A key driver of the property valuations is the terms of the leases in place at the valuation date. These determine the cash flow
profile of the property for a number of years. The valuation assumes adjustments from these rental values to current market rent at the time of the next rent
review (where a typical lease allows only for upward adjustment) and as leases expire and are replaced by new leases. The current market level of rent is
assessed based on evidence provided by the most recent relevant leasing transactions and negotiations. The nominal equivalent yield is applied as a discount
rate to the rental cash flows which, after taking into account other input assumptions such as vacancies and costs, generates the market value of the property.
The equivalent yield applied is assessed by reference to market transactions for similar properties and takes into account, amongst other things, any risks
associated with the rent uplift assumptions.
The net initial yield is calculated as the current net income over the gross market value of the asset and is used as a sense check and to compare against
market transactions for similar properties. The valuation output, along with inputs and assumptions, are reviewed to ensure these are in line with what a market
participant would use when pricing each asset.
There are interrelationships between all the inputs as they are determined by market conditions. The existence of an increase in more than one input would be
to magnify the input on the valuation. The impact on the valuation will be mitigated by the interrelationship of two inputs in opposite directions.
Details of the investment portfolio yields can be found on page 19 of this report.
89
FINANCIAL STATEMENTSHELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued NOTES TO THE FINANCIAL STATEMENTS continued
INVESTMENT PROPERTIES continued
15.
The equivalent yield on the Group’s investment property portfolio at 31 March 2015 was 6.17%. The graph below demonstrates how the valuation of the
investment property portfolio would change with a movement in the equivalent yield.
Valuation - Equivalent Yield Sensitivity
Valuation - Equivalent Yield Sensitivity
)
£
(
n
o
i
t
a
u
l
a
V
o
i
l
o
f
t
r
o
P
950,000,000
900,000,000
850,000,000
800,000,000
750,000,000
700,000,000
650,000,000
600,000,000
550,000,000
500,000,000
5 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 6 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 7 7.1 7.2 7.3 7.4 7.5
Equivalent Yield (%)
The investment properties have been valued at 31 March 2015 as follows:
CUSHMAN & WAKEFIELD LLP
DIRECTORS’ VALUATION
31.3.15
£000
697,521
4,000
701,521
31.3.14
£000
493,200
1
493,201
The historical cost of investment property is £590,965,000 (2014: £457,781,000).
OPERATING LEASE ARRANGEMENTS
16.
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 as lessor.
90
GROUP
31.3.15
£000
39,393
104,268
159,001
302,662
GROUP
31.3.14
£000
29,065
81,237
104,240
214,542
HELICAL BAR PLC REPORT & ACCOUNTS 2015
OPERATING LEASE ARRANGEMENTS continued
16.
At the balance sheet date, the Group and Company had outstanding commitments for future minimum lease payments under non-cancellable operating leases,
which fall due as follows:
GROUP AND COMPANY
NOT LATER THAN ONE YEAR
LATER THAN ONE YEAR BUT NOT MORE THAN FIVE YEARS
MORE THAN FIVE YEARS
31.3.15
£000
281
3,273
7,773
31.3.14
£000
-
2,735
8,592
11,327
11,327
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
31.3.15
£000
2,373
1,695
(2,061)
2,007
1,811
361
(2,061)
111
1,896
PLANT AND
EQUIPMENT
31.3.15
£000
935
164
(91)
1,008
447
183
(87)
543
465
SHORT
LEASEHOLD
IMPROVEMENTS
31.3.14
£000
2,071
302
-
2,373
1,283
528
-
1,811
562
TOTAL
31.3.15
£000
3,308
1,859
(2,152)
3,015
2,258
544
(2,148)
654
2,361
PLANT AND
EQUIPMENT
31.3.14
£000
825
344
(234)
935
460
187
(200)
447
488
TOTAL
31.3.14
£000
2,896
646
(234)
3,308
1,743
715
(200)
2,258
1,050
Plant and equipment include vehicles, fixtures and fittings and other office equipment.
All short leasehold improvements and plant and equipment relate to the Company except for plant and equipment with a net book value of £69,000 as at
31 March 2015 (2014: £101,000).
18.
INVESTMENT IN SUBSIDIARIES
AT 1 APRIL
ACQUIRED DURING YEAR
INVESTMENT IMPAIRED DURING THE YEAR
AT 31 MARCH
GROUP
31.3.15
£000
-
-
-
-
GROUP
31.3.14
£000
-
-
-
-
COMPANY
31.3.15
£000
36,584
1
-
COMPANY
31.3.14
£000
36,945
150
(511)
36,585
36,584
91
FINANCIAL STATEMENTSHELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued INVESTMENT IN SUBSIDIARIES continued
18.
The Company’s principal subsidiary undertakings, all of which have been consolidated, are:
NAME OF UNDERTAKING
BAYLIGHT DEVELOPMENTS LTD*
DOWNTOWN SPACE PROPERTIES LLP
HB SAWSTON NO. 3 LTD
HELICAL BAR (MAPLE) LTD
HELICAL BAR DEVELOPMENTS (SOUTH EAST) LTD
HELICAL BAR (GREAT DOVER STREET) LTD
HELICAL BAR (MITRE SQUARE DEVELOPMENTS) LTD
HELICAL BAR SERVICES LTD
HELICAL BAR (WALES) LTD*
HELICAL (ARTILLERY) LTD
HELICAL (BOSS) LTD
HELICAL (BOSS 2) LTD
HELICAL (BRAMSHOTT PLACE) LTD
HELICAL (BROADWAY) LTD
HELICAL (BROWNHILLS) LTD
HELICAL (CANNOCK) LTD
HELICAL (CARDIFF) LTD
HELICAL (CHART) LTD
HELICAL (CHURCHGATE) LTD
HELICAL (COBHAM) LTD
HELICAL (CROWNHILL) LTD
HELICAL (CS) JERSEY LTD
HELICAL (DALE HOUSE) LTD
HELICAL (ELLESMERE PORT) LTD
HELICAL (ENTERPRISE) LTD
HELICAL (EXETER) LTD
HELICAL (FAYGATE) LTD
HELICAL (FP HOLDINGS) LTD
HELICAL (GLASGOW) LTD
HELICAL (GRACELANDS) LTD
HELICAL (GREAT YARMOUTH) LTD
HELICAL (HAILSHAM) LTD
HELICAL (HARROGATE) LTD
HELICAL (HAVANT) LTD
HELICAL (HEDGE END) LTD
HELICAL (HINCKLEY) LTD
HELICAL (HUDDERSFIELD) LTD
HELICAL (LB) LTD
HELICAL (LIPHOOK) LTD
HELICAL (MINT) LTD
HELICAL (PORCHESTER) LTD
HELICAL (QUARTZ) LTD
HELICAL RETAIL LTD
HELICAL (SCARBOROUGH) LTD
HELICAL (SEVENOAKS) LTD
HELICAL (SIX) LTD
HELICAL (SOUTHEND) LTD
HELICAL (ST VINCENT) LTD
HELICAL (SUN) LTD
HELICAL (TELFORD) LTD
HELICAL (WINTERHILL) LTD
HELICAL (WHITECHAPEL) LTD
HELICAL WROCLAW SP. Z.O.O.*
HELICAL (YATE) LTD
METROPOLIS PROPERTY LTD
NATURE OF BUSINESS
INVESTMENT
INVESTMENT
INVESTMENT
INVESTMENT
DEVELOPMENT
INVESTMENT
DEVELOPMENT
MANAGEMENT SERVICES
INVESTMENT
INVESTMENT
INVESTMENT
INVESTMENT
DEVELOPMENT
INVESTMENT
INVESTMENT
INVESTMENT
INVESTMENT
INVESTMENT
INVESTMENT
INVESTMENT
INVESTMENT (JERSEY)
INVESTMENT (JERSEY)
INVESTMENT
INVESTMENT
INVESTMENT
DEVELOPMENT
DEVELOPMENT
INVESTMENT
INVESTMENT/TRADING
INVESTMENT
INVESTMENT
DEVELOPMENT
INVESTMENT
INVESTMENT
TRADING
INVESTMENT
INVESTMENT
INVESTMENT
DEVELOPMENT (JERSEY)
INVESTMENT
INVESTMENT
INVESTMENT
DEVELOPMENT
INVESTMENT
INVESTMENT
INVESTMENT
INVESTMENT
DEVELOPMENT
INVESTMENT
DEVELOPMENT
INVESTMENT
INVESTMENT
DEVELOPMENT (POLAND)
INVESTMENT
INVESTMENT
PERCENTAGE OF ORDINARY SHARE CAPITAL HELD
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
*Ordinary capital is held by a subsidiary undertaking.
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.
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.
During the year, the Company sold its investment in Helical (Corby) Limited and Corby TC Limited. The profit on sale of £1.7m is included in the gain on sale of
investment property.
92
HELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued 19.
INVESTMENT IN JOINT VENTURES
SUMMARISED STATEMENTS OF CONSOLIDATED INCOME
INVESTMENT
& TRADING
31.3.15
£000
DEVELOPMENT
31.3.15
£000
REVENUE
GROSS RENTAL INCOME
RENTS PAYABLE
PROPERTY OVERHEADS
NET RENTAL INCOME
DEVELOPMENT PROFIT
PROFIT/(LOSS) ON SALE OF PROPERTY
GAIN ON REVALUATION OF INVESTMENT PROPERTIES
IMPAIRMENT OF HELD FOR SALE INVESTMENT
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
DEFERRED TAX
CURRENT ASSETS
LAND, DEVELOPMENT AND TRADING PROPERTIES
TRADE AND OTHER RECEIVABLES
CASH AND CASH EQUIVALENTS
5,523
5,523
(809)
(683)
4,031
-
1,087
26,134
-
(1)
(291)
(2,254)
4
(578)
28,132
(734)
27,398
88,205
-
256
88,461
-
1,468
7,030
8,498
575
575
-
(194)
381
1,902
4
-
-
294
(660)
(1,390)
39
-
570
(471)
99
100
42
278
420
61,782
1,258
6,423
69,463
INVESTMENT
& TRADING
31.3.14
£000
DEVELOPMENT
31.3.14
£000
TOTAL
31.3.15
£000
6,098
6,098
(809)
(877)
4,412
1,902
1,091
6,351
6,351
(625)
(671)
5,055
-
(31)
26,134
15,710
-
293
(951)
(3,644)
43
(578)
28,702
(1,205)
27,497
-
302
(94)
(3,027)
369
1,001
19,285
(403)
18,882
88,305
107,504
42
534
21
139
88,881
107,664
61,782
2,726
13,453
77,961
-
1,937
4,292
6,229
250
250
-
132
382
2,199
-
-
(4,792)
70
-
(24)
170
-
(1,995)
(439)
(2,434)
-
-
27
27
27,165
1,256
11,500
39,921
CURRENT LIABILITIES
TRADE AND OTHER PAYABLES
BORROWINGS
NON-CURRENT LIABILITIES
TRADE AND OTHER PAYABLES
BORROWINGS
DERIVATIVE FINANCIAL INSTRUMENTS
DEFERRED TAX
NET ASSETS
(3,947)
(20,749)
(24,696)
(3,649)
(35,428)
-
-
-
(3,947)
(20,749)
(24,696)
(12,453)
(16,102)
-
(35,428)
(5,590)
(19,842)
(25,432)
(29,503)
(14,916)
(44,419)
(473)
(237)
-
-
(473)
(237)
(35,803)
(34,758)
(70,561)
57,209
14,376
71,585
(8,464)
(30,389)
(51)
(427)
(39,331)
58,460
-
-
-
-
-
4,520
TOTAL
31.3.14
£000
6,601
6,601
(625)
(539)
5,437
2,199
(31)
15,710
(4,792)
372
(94)
(3,051)
539
1,001
17,290
(842)
16,448
107,504
21
166
107,691
27,165
3,193
15,792
46,150
(39,077)
(12,453)
(51,530)
(8,464)
(30,389)
(51)
(427)
(39,331)
62,980
The cost of the Company’s investment in joint ventures was £15,000 (2014: £15,000).
The Directors’ valuation of the trading and development stock shows a surplus of £11,013,000 above book value (2014: £1,760,000).
93
FINANCIAL STATEMENTSHELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued INVESTMENT IN JOINT VENTURES continued
19.
The Group has three material joint ventures. The full results and position of these joint ventures are set out below, of which we have included our share in the
previous table:
OLD STREET
HOLDINGS LP
GROUP
31.3.15
£000
SHIRLEY
ADVANCE LLP
31.3.15
£000
OLD STREET
HOLDINGS LP
GROUP
31.3.14
£000
SHIRLEY
ADVANCE LLP
31.3.14
£000
SUMMARISED INCOME STATEMENTS
REVENUE
GROSS RENTAL INCOME
PROPERTY OVERHEADS
NET RENTAL INCOME
DEVELOPMENT PROFIT
BARTS LP
GROUP
31.3.15
£000
3,532
(530)
3,002
-
2,885
(804)
2,081
-
GAIN ON REVALUATION OF INVESTMENT PROPERTIES
30,287
48,105
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
DEFERRED TAX
CURRENT ASSETS
(19)
(2,324)
(1,283)
8
-
29,671
(96)
29,575
-
(367)
(2,533)
-
(1,733)
45,553
437
45,990
91,887
173,000
126
99
-
767
92,112
173,767
179
(16)
163
-
-
599
-
(912)
-
-
(150)
-
(150)
-
-
-
-
LAND, DEVELOPMENT AND TRADING PROPERTIES
TRADE AND OTHER RECEIVABLES
CASH AND CASH EQUIVALENTS
78,784
2,419
29,219
110,422
-
3,593
3,656
7,249
44,911
1,800
967
47,678
CURRENT LIABILITIES
TRADE AND OTHER PAYABLES
(11,626)
(8,419)
(31,161)
BARTS LP
GROUP
31.3.14
£000
3,672
(48)
3,624
-
2,703
(1,103)
1,600
-
21,245
20,861
(250)
(163)
(897)
-
(2)
23,557
(807)
22,750
938
-
(3,686)
2
40
19,755
417
20,172
110,000
91,867
-
417
92,284
-
1,135
2,319
3,454
-
-
110,000
-
2,994
3,670
6,664
(4,174)
(34,863)
(39,037)
38
-
38
318
-
-
-
(48)
110
-
418
-
418
-
-
-
-
38,796
2,508
132
41,436
BORROWINGS
NON-CURRENT LIABILITIES
TRADE AND OTHER PAYABLES
BORROWINGS
DERIVATIVE FINANCIAL INSTRUMENTS
DEFERRED TAX
NET ASSETS
94
-
-
-
(11,626)
(8,419)
(31,161)
(4,073)
(41,299)
-
-
(4,073)
(41,299)
-
(16,767)
(16,527)
(10,623)
(64,883)
(68,348)
-
-
(1,416)
-
-
-
-
(64,883)
(86,531)
(16,527)
126,025
86,066
(10)
-
-
(628)
(11,251)
66,376
(14,767)
(37,308)
(260)
-
(52,335)
(39,330)
-
-
-
-
-
137
HELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued INVESTMENT IN JOINT VENTURES continued
19.
At 31 March 2015 the Group and the Company had interests in the following joint venture companies:
BARTS TWO INVESTMENT PROPERTY LTD
BARTS CLOSE OFFICE LTD
BARTS SQUARE FIRST OFFICE LTD
BARTS SQUARE ACTIVE ONE LTD
BARTS SQUARE FIRST LTD
BARTS SQUARE LAND ONE LTD
207 OLD STREET UNIT TRUST
211 OLD STREET UNIT TRUST
OLD STREET RETAIL UNIT TRUST
CITY ROAD (JERSEY) LTD
OLD STREET HOLDINGS LP
HELICAL SOSNICA SP. ZOO.
COUNTRY OF
INCORPORATION
JERSEY
JERSEY
JERSEY
JERSEY
UNITED KINGDOM
UNITED KINGDOM
JERSEY
JERSEY
JERSEY
JERSEY
JERSEY
POLAND
ABBEYGATE HELICAL (LEISURE PLAZA) LTD
UNITED KINGDOM
ABBEYGATE HELICAL (WINTERHILL) LTD
ABBEYGATE HELICAL (C4.1) LLP
SHIRLEY ADVANCE LLP
UNITED KINGDOM
UNITED KINGDOM
UNITED KINGDOM
CLASS OF SHARE
CAPITAL HELD
PROPORTION
HELD GROUP
PROPORTION
HELD COMPANY
NATURE OF
BUSINESS
ORDINARY
ORDINARY
ORDINARY
ORDINARY
ORDINARY
ORDINARY
N/A
N/A
N/A
ORDINARY
N/A
ORDINARY
ORDINARY
ORDINARY
N/A
N/A
33%
33%
33%
33%
33%
33%
33%
33%
33%
33%
33%
50%
50%
50%
50%
50%
50%
-
-
-
-
INVESTMENT
INVESTMENT
INVESTMENT
INVESTMENT
- DEVELOPMENT
- DEVELOPMENT
-
-
-
-
-
INVESTMENT
INVESTMENT
INVESTMENT
INVESTMENT
INVESTMENT
- DEVELOPMENT
50% DEVELOPMENT
50% DEVELOPMENT
50% DEVELOPMENT
- DEVELOPMENT
- DEVELOPMENT
KING STREET DEVELOPMENTS (HAMMERSMITH)
LTD
UNITED KINGDOM
ORDINARY
CREECHURCH PLACE LTD
JERSEY
ORDINARY
10%
- DEVELOPMENT
Significant Judgements and Estimates
There are a number of companies which are accounted for as joint ventures where the Group has an equity interest of less than 50%. This typically occurs
where the Group’s joint venture partner is providing a greater share of finance into the Company, with the Group contributing a greater share towards the day
to day management of the underlying project. In these cases neither party has control over the entity and therefore it is considered appropriate to account for
our interest as a joint venture.
Dividends of £17,013,000 were received from joint venture companies during the year (2014: £1,350,000). The joint venture companies are private
companies, therefore no quoted market prices are available for their shares.
The Group’s investment in Helical Sosnica Sp. zoo has been accounted for as an investment held for sale due to a commitment to sell the Group’s share within
the next year. At 31 March 2015 Helical Sosnica Sp. zoo held a development property the fair value of which the Directors believe to be £81,866,000 (of
which Helical’s share is £40,933,000) and a bank loan of £51,156,000 (of which Helical’s share is £25,578,000) repayable in September 2017.
20.
LAND, DEVELOPMENTS AND TRADING PROPERTIES
GROUP
AT 1 APRIL
ACQUISITIONS AND CONSTRUCTION COSTS
INTEREST CAPITALISED
TRANSFER TO INVESTMENT PROPERTIES
DEVELOPMENT
PROPERTIES
31.3.15
£000
95,632
21,131
3,381
-
TRADING
STOCK
31.3.15
£000
2,528
31,012
-
-
TOTAL
31.3.15
£000
98,160
52,143
3,381
-
DISPOSALS
(25,685)
(33,512)
(59,197)
FOREIGN EXCHANGE MOVEMENTS
PROVISION
AT 31 MARCH
(1,457)
(452)
92,550
-
-
28
(1,457)
(452)
92,578
DEVELOPMENT
PROPERTIES
31.3.14
£000
90,346
32,863
2,835
(8,600)
(22,109)
(255)
552
TRADING
STOCK
31.3.14
£000
2,528
-
-
-
-
-
-
TOTAL
31.3.14
£000
92,874
32,863
2,835
(8,600)
(22,109)
(255)
552
95,632
2,528
98,160
The Directors’ valuation of trading and development stock shows a surplus of £25,230,000 above book value (2014: £25,719,000).
Interest capitalised in respect of the development of sites is included in stock to the extent of £9,788,000 (2014: £7,743,000).
Land, developments and trading properties with carrying values totalling £83,948,000 (2014: £77,676,000) were held as security against borrowings.
The Company had no land, developments or trading properties (2014: none).
95
FINANCIAL STATEMENTSHELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued 21.
PROPERTY DERIVATIVE FINANCIAL ASSET
GROUP
PROPERTY DERIVATIVE FINANCIAL ASSET
31.3.15
£000
16,388
16,388
31.3.14
£000
-
-
The Group has assigned its forward purchase contract on Clifton Street, London EC2 to a third party. The agreement to assign the forward purchase contract is
considered to be a derivative financial instrument. As such, under IAS 39, it is carried at its fair value with gains and losses taken to the Income Statement. The
fair value inputs represent Level 2 fair value measurements as defined by IFRS 13 Fair Value Measurement. The fair value of this assignment contract at 31
March 2015 is £16,388,000, being the contracted cash receipt of £17.3m discounted for risk and the time value of money. The gain of £16,388,000 has been
taken to the Income Statement as a development profit.
22.
AVAILABLE-FOR-SALE INVESTMENTS
GROUP
AT 1 APRIL
ADDITIONS
DISPOSALS
IMPAIRMENT IN THE YEAR
AT 31 MARCH
31.3.15
£000
4,973
144
(2)
(773)
4,342
31.3.14
£000
5,997
-
-
(1,024)
4,973
Included within available-for-sale investments are an amount lent to a company promoting a mainly residential mixed-use development and a holding of 20% of
the equity of this company.
The loan and the equity are together classed as an available-for-sale investment and held at fair value. It is considered to be Level 3 of the IFRS 13 fair value
hierarchy. 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 value of the available-for-sale investment is 100% sensitive to changes in the expected repayment proceeds. 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.
The decline in value of £773,000 has been recognised in the Income Statement.
23.
TRADE AND OTHER RECEIVABLES
TRADE RECEIVABLES
AMOUNTS OWED BY JOINT VENTURE UNDERTAKINGS
AMOUNTS OWED BY SUBSIDIARY UNDERTAKINGS
OTHER RECEIVABLES
PREPAYMENTS AND ACCRUED INCOME
GROUP
31.3.15
£000
13,987
42,220
-
879
9,685
66,771
GROUP
31.3.14
£000
9,390
25,347
COMPANY
31.3.15
£000
97
40
-
776,550
231
6,042
41,010
853
188
COMPANY
31.3.14
£000
356
20,451
470,119
337
174
777,728
491,437
Included within trade receivables of the Group at 31 March 2015 is £1,555,000 (2014: £6,673,000) due in 2016 which is shown as a non-current asset in the
Balance Sheet. Included within prepayments and accrued income of the Group is a prepayment of £1,000,000 (2014: £1,000,000) for the purchase of a
property due to complete later in 2015.
96
HELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued 23.
TRADE AND OTHER RECEIVABLES continued
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
31.3.15
£000
56,848
1,384
70
58,302
8,469
66,771
GROUP
31.3.14
£000
COMPANY
31.3.15
£000
COMPANY
31.3.14
£000
35,272
777,540
490,966
414
194
35,880
5,130
41,010
-
-
-
-
777,540
490,966
188
471
777,728
491,437
Past due receivables not impaired relate to a number of independent customers for whom there is no recent history of default. Against trade receivables,
Helical held £1,648,000 of rental deposits at 31 March 2015 (2014: £1,284,000).
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
31.3.15
£000
58,390
(88)
58,302
GROUP
31.3.14
£000
36,192
(312)
35,880
COMPANY
31.3.15
£000
COMPANY
31.3.14
£000
777,540
490,966
-
-
777,540
490,966
RECEIVABLES WRITTEN OFF DURING THE YEAR AS UNCOLLECTABLE
9
162
-
-
24.
CASH AND CASH EQUIVALENTS
RENT DEPOSITS AND CASH HELD AT MANAGING AGENTS
RESTRICTED CASH
CASH DEPOSITS
GROUP
31.3.15
£000
3,049
91,955
25,989
120,993
GROUP
31.3.14
£000
4,107
12,721
46,409
63,237
COMPANY
31.3.15
£000
3
2
13,937
13,942
COMPANY
31.3.14
£000
-
-
30,376
30,376
Restricted cash is made up of amounts held by solicitors and amounts in blocked accounts. Of this balance, £70,166,000 was held in a blocked account due to
a bank refinancing and was subsequently released on 10 June 2015.
25.
TRADE AND OTHER PAYABLES
TRADE PAYABLES
SOCIAL SECURITY COSTS AND OTHER TAXATION
AMOUNTS OWED TO SUBSIDIARY UNDERTAKINGS
OTHER PAYABLES
ACCRUALS
DEFERRED INCOME
GROUP
31.3.15
£000
9,868
5,156
-
3,420
37,834
9,524
65,802
GROUP
31.3.14
£000
11,074
4,615
COMPANY
31.3.15
£000
440
-
COMPANY
31.3.14
£000
323
-
-
412,690
232,788
3,699
24,302
7,690
51,380
44
3,522
-
-
2,467
-
416,696
235,578
Included within deferred income is £nil (2014: £2,150,000) which is due after more than one year.
97
FINANCIAL STATEMENTSHELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued 26.
BORROWINGS
CURRENT BORROWINGS
BORROWINGS REPAYABLE WITHIN:
- ONE TO TWO YEARS
- TWO TO THREE YEARS
- THREE TO FOUR YEARS
- FOUR TO FIVE YEARS
- FIVE TO SIX YEARS
- SIX TO TEN YEARS
NON-CURRENT BORROWINGS
GROUP
31.3.15
£000
45,428
136,091
3,617
83,608
175,177
80,060
74,260
552,813
GROUP
31.3.14
£000
1,275
13,904
102,403
100,562
79,083
-
78,859
374,811
COMPANY
31.3.15
£000
6,120
-
-
-
90,067
79,042
-
169,109
COMPANY
31.3.14
£000
-
3,540
-
-
-
-
78,859
82,399
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 £712,569,000 (2014: £551,876,000). 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 £44,419,000 (2014: £42,842,000).
Convertible Bond
On 17 June 2014 the Group issued £100m convertible bonds at par with a 4% coupon rate which are due for settlement on 17 June 2019 (the “Bonds”). The
Bonds can be converted from 28 July 2014 up to and including 7 July 2017, if the share price has traded at a level exceeding 130% of the exchange price for
a specified period, and from 8 July 2017 to (but excluding) the seventh dealing day before 17 June 2019 at any time. On conversion, the Group can elect to
settle the Bonds by any combination of ordinary shares and cash. The Convertible Bond is included at its carrying amount of £103,263,000 in borrowings
repayable within four to five years.
Retail Bond
On 24 June 2013 the Group issued an £80m fixed rate retail bond at 6% per annum and with a maturity date of 24 June 2020. Under certain circumstances,
the bonds can be repaid early. The Retail Bond is included at its amortised cost of £79,042,000 in borrowings repayable within five to six years.
27. FINANCING AND DERIVATIVE FINANCIAL INSTRUMENTS
The policies for dealing with liquidity and interest rate risk are noted in the Principle Risks Review on pages 40 to 42.
BORROWINGS MATURITY
DUE AFTER MORE THAN ONE YEAR
DUE WITHIN ONE YEAR
GROUP
31.3.15
£000
552,813
45,428
598,241
GROUP
31.3.14
£000
374,811
1,275
376,086
The Group has various undrawn committed borrowing facilities. The facilities available at 31 March 2015 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
98
GROUP
31.3.15
£000
14,147
3,982
-
33,161
2,840
54,130
GROUP
31.3.14
£000
10,000
6,335
37,735
-
36,481
90,551
HELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued 27. FINANCING AND DERIVATIVE FINANCIAL INSTRUMENTS continued
31.3.15
£000
INTEREST RATES - GROUP
EXPIRY
%
DEC 2024
JUN 2020
JAN 2020
JUL 2019
80,862
80,000
75,000
30,000
JUN 2019
100,000
FIXED RATE BORROWINGS:
- FIXED RATE PLUS MARGIN
- FIXED RATE RETAIL BOND
- SWAP RATE PLUS BANK MARGIN
- SWAP RATE PLUS BANK MARGIN
- FIXED RATE CONVERTIBLE BOND
- 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
FAIR VALUE ADJUSTMENT OF CONVERTIBLE BOND
3.480
6.000
4.500
4.070
4.000
4.525
4.020
3.365
4.070
3.510
-
-
-
-
FEB 2019
MAY 2018
JAN 2016
JAN 2016
MAY 2015
-
-
-
-
4.366
2.438
MAR 2019
NOV 2016
75,630
10,800
9,172
11,100
21,375
-
-
-
-
493,939
101,039
3,263
%
-
EXPIRY
31.3.14
£000
-
-
6.000
JUN 2020
80,000
-
-
-
4.525
4.020
4.015
-
4.160
3.958
5.957
5.645
4.240
4.766
3.476
-
-
-
FEB 2019
MAY 2018
JAN 2016
-
MAY 2015
JAN 2015
JAN 2015
OCT 2014
NOV 2017
-
-
-
75,630
10,800
9,172
-
21,375
50,000
11,429
6,690
26,400
DEC 2016
291,496
MAR 2017
84,590
-
TOTAL BORROWINGS
4.026
AUG 2019
598,241
4.462
MAY 2018
376,086
The year on year changes in fixed borrowing rates are the result of stepped increases/decreases in interest rate swaps rates. Floating rate borrowings bear
interest at rates based on LIBOR.
At 31 March 2015 the Company had £30,000,000 and £11,000,000 interest rate swaps, both at 4.070% and expiring in July 2019 and January 2016
respectively. Interest is fixed on the retail bond and convertible bond as shown above, with the remaining borrowings being at floating rates. At 31 March 2014
the Company’s borrowings consisted of fixed rate borrowings of £6,690,000 at 5.645%.
In addition to the above, the Group has a £50,000,000 interest rate swap at 1.865% starting in June 2016 and expiring in June 2026.
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
50,000
25,000
25,000
25,000 - 75,000
7,200
11,037 - 10,613
25,000
RATE
%
4.000
4.000
4.000
4.000
4.000
4.000
4.000
START
EXPIRY
APR 2011
APR 2015
APR 2011
APR 2016
JUL 2013
JUL 2016
APR 2015
JAN 2017
JAN 2012
OCT 2016
JAN 2015
JAN 2016
JUL 2013
JUL 2016
Where a range in capped values is shown, these reflect stepped increases/decreases over the life of the cap.
99
FINANCIAL STATEMENTSHELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued 27. FINANCING AND DERIVATIVE FINANCIAL INSTRUMENTS continued
GEARING
TOTAL DEBT
CASH
NET DEBT
GROUP
31.3.15
£000
598,241
(120,993)
477,248
GROUP
31.3.14
£000
376,086
(63,237)
312,849
Net debt excludes the Group’s share of debt in joint ventures of £44,419,000 (2014: £42,842,000), and cash of £13,453,000 (2014: £15,972,000).
NET ASSETS
GEARING
28.
SHARE CAPITAL
AUTHORISED
GROUP
31.3.15
£000
404,363
118%
31.3.15
£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.
GROUP
31.3.14
£000
340,527
92%
31.3.14
£000
39,577
39,577
31.3.14
£000
1,182
265
1,447
SHARE
CAPITAL
31.3.14
£000
31.3.15
£000
1,182
265
1,447
SHARES
IN ISSUE
31.3.14
NUMBER
SHARES
IN ISSUE
31.3.15
NUMBER
SHARE
CAPITAL
31.3.15
£000
118,183,806
1,182
118,137,522
1,182
212,145,300
265
212,145,300
265
ALLOTTED, CALLED UP AND FULLY PAID
- 118,183,806 (2014: 118,137,522) ORDINARY SHARES OF 1p EACH
- 212,145,300 DEFERRED SHARES OF 1⁄8p EACH
ORDINARY SHARES
AT 1 APRIL AND 31 MARCH
DEFERRED SHARES
AT 1 APRIL AND 31 MARCH
Capital Management
The Group’s capital management objectives are:
- to ensure the Group’s ability to continue as a going concern; and,
- to provide an adequate return to shareholders.
The Group sets the amount of capital in proportion to its overall 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, share premium, retained earnings, revaluation reserve and other reserves (2015: £396,825,000; 2014: £333,977,000). The Group continually
monitors its gearing level to ensure that it is appropriate. Gearing increased from 92% to 118% in the year as the Group took advantage of favourable debt
market conditions.
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.
100
HELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued SHARE OPTIONS
29.
At 31 March 2015 there were nil (2014: 46,284) 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 2014: nil).
The Company uses a stochastic valuation model to value the share options.
SUMMARY OF SHARE OPTIONS
AT 1 APRIL
OPTIONS GRANTED IN PRIOR YEARS NOT PREVIOUSLY RECOGNISED
OPTIONS EXERCISED
AT 31 MARCH
The share price at date of exercise was 344.25p.
WEIGHTED
AVERAGE
EXERCISE
PRICE
31.3.15
NUMBER
31.3.15
46,284
259.25p
-
-
(46,284)
(259.25)p
WEIGHTED
AVERAGE
EXERCISE
PRICE
31.3.14
259.25p
259.25p
-
NUMBER
31.3.14
34,713
11,571
-
-
-
46,284
259.25p
SHARE-BASED PAYMENTS
30.
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 YEAR
AWARDS VESTED DURING YEAR
AWARDS LAPSED DURING THE YEAR
AWARDS MADE DURING THE YEAR
OUTSTANDING AT END OF YEAR
2015
WEIGHTED
AVERAGE
AWARD
VALUE
215p
246p
246p
335p
221p
AWARDS
9,310,162
-
(2,368,701)
2,779,914
9,721,375
2014
WEIGHTED
AVERAGE
AWARD
VALUE
211p
-
276p
244p
215p
AWARDS
9,721,375
(1,707,216)
(1,021,711)
2,134,705
9,127,153
The performance share plan awards outstanding at 31 March 2015 had a weighted average remaining contractual life of one year.
The fair value of the awards made in the year to 31 March 2015 was £7,158,000 (2014: £6,553,000).
The inputs into the stochastic model of valuation of the PSP awards made in the year to 31 March 2015 were as follows:
WEIGHTED AVERAGE SHARE PRICE
WEIGHTED AVERAGE EXERCISE PRICE
EXPECTED VOLATILITY
EXPECTED LIFE
RISK FREE RATE
EXPECTED DIVIDENDS
2015
355.0p
-
N/A
2014
2013
303.2p
203.4p
-
N/A
-
N/A
3 YEARS
3 YEARS
3 YEARS
N/A
1.90%
N/A
2.20%
N/A
3.07%
The Group recognised a charge of £6,432,000 (2014: £6,333,000) during the year in relation to share-based payments.
At the balance sheet date there were no exercisable awards.
OWN SHARES HELD
31.
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. For this
purpose, 3,790,000 shares (2014: 250,000) in the Company were purchased during the year at a cost of £13,349,000 (2014: £951,000).
At 31 March 2015, unexercised options over nil (2014: nil) ordinary 1p shares in Helical Bar plc had been granted over shares held by the Trust.
At 31 March 2015, outstanding awards over 9,127,000 (2014: 9,721,000) 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 2015, the Trust held 3,625,000 shares (2014: 1,542,000).
101
FINANCIAL STATEMENTSHELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued CONTINGENT LIABILITIES
32.
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.
There were no other contingent liabilities at 31 March 2015 for the Group or the Company (2014: £nil).
CAPITAL COMMITMENTS
33.
The Group has a commitment to purchase a property for £19,800,000 in 2015, discussed in further detail in note 21. A prepayment of £1,000,000 is included
in trade and other receivables.
The Group has a commitment of £86,800,000 in relation to construction contracts, which are due to be completed in the period to September 2018.
34.
NET ASSETS PER SHARE
31.3.15
£000
NUMBER
OF SHARES
000S
31.3.15
PENCE
PER SHARE
31.3.14
£000
NUMBER
OF SHARES
000S
31.3.14
PENCE
PER SHARE
NET ASSET VALUE
404,363
118,184
340,527
118,138
LESS:
OWN SHARES HELD BY ESOP
(3,625)
(1,542)
DEFERRED SHARES
(265)
(265)
BASIC NET ASSET VALUE
ADD: SHARE SETTLED BONUSES
ADD: UNEXERCISED SHARE OPTIONS
-
ADD: DILUTIVE EFFECT OF THE PERFORMANCE SHARE PLAN
1,016
-
6,256
120
451
46
1,121
404,098
114,559
353
340,262
116,596
292
DILUTED NET ASSET VALUE
ADJUSTMENT FOR:
404,098
121,831
332
340,382
118,214
288
- FAIR VALUE OF FINANCIAL INSTRUMENTS
- FAIR VALUE MOVEMENT ON CONVERTIBLE BOND
- DEFERRED TAX
8,568
3,263
16,956
(243)
2,444
ADJUSTED DILUTED NET ASSET VALUE
432,885
121,831
355
342,583
118,214
290
ADJUSTMENT FOR:
- FAIR VALUE OF TRADING AND DEVELOPMENT PROPERTIES
36,243
27,479
EPRA NET ASSET VALUE
ADJUSTMENT FOR:
469,128
121,831
385
370,062
118,214
313
- FAIR VALUE OF FINANCIAL INSTRUMENTS
- DEFERRED TAX
(8,568)
(16,956)
243
(2,444)
EPRA TRIPLE NET ASSET VALUE
443,604
121,831
364
367,861
118,214
311
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.
102
HELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued
RELATED PARTY TRANSACTIONS
35.
At 31 March 2015 and 31 March 2014 the following amounts were due in respect of the Group’s joint ventures:
KING STREET DEVELOPMENTS (HAMMERSMITH) LTD
SHIRLEY ADVANCE LLP
BARTS TWO INVESTMENT PROPERTY LTD
BARTS SQUARE FIRST LTD
HELICAL SOSNICA SP. ZOO
207 OLD STREET UNIT TRUST
211 OLD STREET UNIT TRUST
OLD ST RETAIL UNIT TRUST
CITY ROAD (JERSEY) LTD
OLD STREET HOLDINGS LP LTD
CREECHURCH PLACE LTD
All movements in joint venture balances related to loans repaid and loans advanced.
At 31 March 2015, there was an amount due to the Group of £347,000 (2014: £nil) by a company under common control.
At 31 March 2015 and 31 March 2014 there were the following balances between the Company and its subsidiaries.
AMOUNTS DUE FROM SUBSIDIARIES
AMOUNTS DUE TO SUBSIDIARIES
AT
31.3.15
£000
5,280
12,501
-
42
6,000
2,325
1,801
725
738
100
12,132
31.3.15
£000
776,550
412,690
During the years to 31 March 2015 and 31 March 2014 there were the following transactions between the Company and its subsidiaries:
MANAGEMENT CHARGES RECEIVABLE
MANAGEMENT CHARGES PAYABLE
INTEREST RECEIVABLE
INTEREST PAYABLE
YEAR ENDED
31.3.15
£000
10,795
-
2,294
3,125
AT
31.3.14
£000
3,050
4,723
146
-
11,900
1,792
1,701
719
710
100
-
31.3.14
£000
470,119
232,788
YEAR ENDED
31.3.14
£000
8,372
6,116
2,837
-
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 23. Amounts owed to
subsidiaries by the Company are identified in note 25.
The Group considers that key management personnel are the directors. The compensation paid or payable to key management is:
SALARIES AND OTHER SHORT TERM EMPLOYEE BENEFITS
OTHER LONG-TERM BENEFITS
SHARE BASED PAYMENTS
YEAR ENDED
31.3.15
£000
8,656
-
8,238
16,894
YEAR ENDED
31.3.14
£000
8,429
3,330
8,154
19,913
The total dividends paid to directors of the Group in the year was £1,181,000 (2014: £1,041,000).
During the year purchases of £50,000 (2014: £60,000) were made from a partnership in which Michael Slade, a director of the company, and his wife are
partners. All transactions were carried out on an arm’s length basis.
103
FINANCIAL STATEMENTSHELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued 36.
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 INVESTMENTS
GROUP
31.3.15
£000
180,713
16,389
4,342
GROUP
31.3.14
£000
COMPANY
31.3.15
£000
COMPANY
31.3.14
£000
99,117
792,900
521,342
1,867
4,973
-
-
315
-
TOTAL FINANCIAL ASSETS
201,444
105,957
792,900
521,657
These financial assets are included in the balance sheet within the following headings:
AVAILABLE-FOR-SALE INVESTMENTS
DERIVATIVE FINANCIAL INSTRUMENTS
PROPERTY DERIVATIVE FINANCIAL ASSET
TRADE AND OTHER RECEIVABLES
CASH AND CASH EQUIVALENTS
TOTAL FINANCIAL ASSETS
GROUP
31.3.15
£000
4,342
1
16,388
59,720
120,993
201,444
GROUP
31.3.14
£000
4,973
1,867
-
35,880
63,237
105,957
COMPANY
31.3.15
£000
-
-
-
778,958
13,942
792,900
COMPANY
31.3.14
£000
-
315
-
490,966
30,376
521,657
Financial assets are stated in accordance with IAS 32 Financial Instruments: Presentation.
For the fair value of available-for-sale investments see note 22. 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
DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
MEASURED AT AMORTISED COST
TOTAL FINANCIAL LIABILITIES
GROUP
31.3.15
£000
(12,545)
(103,263)
GROUP
31.3.14
£000
COMPANY
31.3.15
£000
(9,888)
(11,080)
-
-
COMPANY
31.3.14
£000
(192)
-
(545,523)
(410,362)
(591,925)
(317,977)
(661,331)
(420,250)
(603,005)
(318,169)
The Convertible Bond has been designated at fair value through profit or loss. The change in fair value of the Convertible Bond is wholly attributable to changes
in market conditions. If bondholders do not exercise their conversion right, the obligation is settled by a cash payment of £100,000,000. The difference
between the carrying amount of £103,263,000 and this settlement amount is an additional liability of £3,263,000.
The 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
104
GROUP
31.3.15
£000
(54,994)
(45,428)
GROUP
31.3.14
£000
COMPANY
31.3.15
£000
COMPANY
31.3.14
£000
(42,591)
(416,696)
(235,578)
(1,275)
(6,120)
-
(552,813)
(374,811)
(169,109)
(82,399)
(8,096)
(1,573)
(11,080)
(192)
(661,331)
(420,250)
(603,005)
(318,169)
HELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued FINANCIAL INSTRUMENTS continued
36.
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 13 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
Assets and liabilities measured at fair value are classified as below:
LEVEL 1
LEVEL 2
LEVEL 3
CONVERTIBLE BOND (NOTE 26)
DERIVATIVE FINANCIAL INSTRUMENTS (NOTE 27)
PROPERTY DERIVATIVE FINANCIAL ASSET (NOTE 21)
AVAILABLE-FOR-SALE INVESTMENT (NOTE 22)
INVESTMENT PROPERTY (NOTE 15)
There were no transfers between categories in the current or prior year.
DERIVATIVE FINANCIAL INSTRUMENTS
DERIVATIVE FINANCIAL ASSETS
INTEREST RATE CAPS
INTEREST RATE SWAPS
PROPERTY DERIVATIVE FINANCIAL ASSET
DERIVATIVE FINANCIAL LIABILITIES
INTEREST RATE SWAPS
CONVERTIBLE BOND DERIVATIVE ELEMENT
GROUP
YEAR ENDED
31.3.15
£000
1
-
16,388
16,389
GROUP
YEAR ENDED
31.3.14
£000
133
1,734
-
1,867
(8,096)
(1,573)
-
-
(1,898)
(9,182)
(8,096)
(1,573)
(11,080)
COMPANY
YEAR ENDED
31.3.15
£000
COMPANY
YEAR ENDED
31.3.14
£000
-
-
-
-
34
281
-
315
(192)
-
(192)
The Group’s movement in the fair value of the derivative financial instruments in the year was a gain of £7,999,000 (2014: £5,312,000), of which a gain of
£16,388,000 was due to the property derivative financial asset and a loss of £8,389,000 was due to interest rate caps and swaps. In accordance with IAS 39,
the convertible bond is split into a loan and derivative element in the Company balance sheet. On initial recognition the derivative element had a value of
£8,190,000. At 31 March 2015, the derivative element had a value of £9,182 ,000 with a corresponding loss of £992,000 recognised in the Income
Statement. The movement in the Company’s interest rate swaps in the year was a loss of £2,021,000 (2014: gain of £1,098,000).
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 2015 the Group had total credit risk exposure excluding cash of £64,062,000 of which £4,342,000 is available-for-sale assets and
£59,720,000 is loans and receivables. Available-for-sale assets are analysed in note 22. The cash is held with reputable banking institutions and in client
accounts with solicitors and managing agents and therefore credit risk is considered low.
All other debtors are deemed to be recoverable.
All Company debtors are considered to be fully 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 23.
105
FINANCIAL STATEMENTSHELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued 36.
FINANCIAL INSTRUMENTS continued
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 26 and 27.
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
31.3.15
£000
40,696
75,390
182,692
451,877
750,655
GROUP
31.3.14
£000
41,259
13,656
156,987
304,560
516,462
COMPANY
31.3.15
£000
6,244
13,053
19,237
198,504
237,038
COMPANY
31.3.14
£000
1,460
3,686
10,701
22,047
37,894
At 31 March 2015 Helical had £54,130,000 of undrawn borrowing facilities, £81,530,000 of uncharged property assets and cash balances of £120,933,000.
The above contracted liabilities assume that no loans are extended beyond their current facility expiry date. 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.
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 27.
In the year to 31 March 2015, 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
IMPACT ON
RESULTS
31.3.15
£000
6,818
(5,992)
GROUP
EQUITY
IMPACT
31.3.15
£000
6,818
(5,992)
COMPANY
IMPACT ON
RESULTS
31.3.15
£000
1,069
(703)
COMPANY
EQUITY
IMPACT
31.3.15
£000
1,069
(703)
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 2015 the Group made foreign exchange losses of £2,061,000 (2014: £501,000) resulting from movements in foreign exchange rates
during the year affecting its assets and liabilities related to its overseas operations.
106
HELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued FINANCIAL INSTRUMENTS continued
36.
The Group’s balance sheet translation exposure is summarised as follows:
GROSS CURRENCY ASSETS
GROSS CURRENCY LIABILITIES
NET EXPOSURE
EURO
31.3.15
(£000)
16,897
(7,134)
9,763
ZLOTY
31.3.15
(£000)
927
(1,139)
(212)
US DOLLARS
31.3.15
(£000)
4,331
-
4,331
EURO
31.3.14
(£000)
23,890
(8,398)
15,492
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
EURO
31.3.15
(£000)
6,151
-
6,151
ZLOTY
31.3.15
(£000)
4,462
-
4,462
ZLOTY
31.3.14
(£000)
1,485
(1,187)
298
EURO
31.3.14
(£000)
11,921
-
11,921
US DOLLARS
31.3.14
(£000)
4,960
-
4,960
ZLOTY
31.3.14
(£000)
4,627
-
4,627
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: £976,000 (2014: £1,549,000), Zloty: £21,000 (2014: £30,000), US dollar: £433,000 (2014: £496,000).
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: £615,000 (2014:
£1,192,000), Zloty: £446,000 (2014: £463,000).
37. POST BALANCE SHEET EVENTS
There were no material post balance sheet events.
38. 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 2015. Subsidiary undertakings are entities for which the Group is exposed to variable returns and has the ability to control those returns. 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, where both parties
are exposed to variable returns but neither has control over those returns. They 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 Governance Review on page 55.
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.
107
FINANCIAL STATEMENTSHELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued 38. PRINCIPAL ACCOUNTING POLICIES continued
Construction contracts - where an asset is constructed under a specific
contract with a purchaser (a “pre-sold development”) the initial sale of the site
to that purchaser is recognised as a sale of goods in accordance with IAS 18
Revenue, where the sale of the land is not conditional on the construction of
the buildings and is not reversible in the event that the building is not
constructed. The construction element of the contract is treated, for the
purposes of revenue recognition, as a construction contract in accordance with
IAS 11 Construction Contracts. Revenue is recognised by reference to the
stage of completion which is typically determined by reference to project
appraisals, normally supported by independent valuation certificates provided
by quantity surveyors. The Company’s principal other responsibility on pre-sold
developments is the identification of and agreement of terms with potential
tenants of the completed building(s). The revenue recognition of this additional
component of the funding agreements is considered separately to reflect the
substance of the transaction as the rendering of services, in accordance with
IAS 18 Revenue. The amount of revenue recognised is determined by
reference to the percentage of the building(s) that are let.
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 and
payment of the consideration for these services are contingent upon a future
event (such as sale of the property) and if the fair value of the consideration
can be reliably estimated, the Group recognises this income as its services
are performed, discounting for time and risk if appropriate.
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.
Deferred income - money received in advance of the provision of goods or
services is held in the balance sheet until the income can be recognised in
the Income Statement.
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 58 to 71. 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. 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.
The amount charged to the Income Statement is credited to the Retained
Earnings reserve.
On exercise of the performance share plan options, the total cumulative
amount recognised in the Income Statement for the options is moved from
Retained Earnings to the Share Capital and Share Premium accounts. On
lapsing of the performance share plan options, the total cumulative amount
recognised in the Income Statement is reversed in the Income Statement and
Retained Earnings.
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 5 Hanover Square, London W1S 1HQ 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
Plant and equipment
- 10% or length of lease, if shorter
- 25%
Taxation
The taxation charge represents the sum of tax currently payable and deferred
tax. The charge for current taxation is based on the results for the year as
adjusted for items which are non-assessable or disallowed. It is calculated
using rates that have been enacted or substantively enacted by the balance
sheet date. Tax payable upon realisation of revaluation gains recognised in
prior periods is recorded as a current tax charge with a release of the
associated deferred taxation.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the 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.
108
HELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued 38. PRINCIPAL ACCOUNTING POLICIES continued
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.
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.
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.
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.
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 below historic cost, 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.
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, cash held at solicitors, cash in
blocked accounts 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 and the Group’s retail bond are
initially recorded at fair value, net of finance and other costs yet to be
amortised in accordance with IAS39. Embedded derivatives contained within
the borrowing agreements are treated in accordance with IAS39, which
includes consideration of whether embedded derivatives require bifurcation.
The retail bond and bank loans are held at amortised cost.
Convertible bonds are designated as fair value through the profit and loss
and so are presented on the Balance Sheet at fair value, with all gains and
losses, including the write-off of issuance costs, recognised in the Income
Statement. The interest charge in respect of the coupon rate on the bonds
has been recognised within Finance Costs on an accruals basis.
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.
Gains or losses on extinguishing debt are recognised in the Income
Statement in the period in which they occur.
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.
A derivative property asset is recognised on the Balance Sheet when the
Group has contractually assigned an existing purchase contract. A derivative
property asset is initially recorded at its fair value and is remeasured at each
reporting period date to its fair value, which is based upon the future
contracted cash flow discounted for both time and risk. Any change in fair
value is recognised in the Income Statement as a development profit.
Further information on the categorisation of financial instruments can be
found in note 36.
109
FINANCIAL STATEMENTSHELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued 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:
Estimates
- 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 periods based on future forecast performance and employee
retention (note 30);
- The provision for future bonuses payable under the Annual Bonus scheme
(note 8);
- Valuation of investment properties, including Directors’ valuations and where
external valuers are used to provide third party valuations (note 15); 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).
Judgements
- 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);
- Assessment of whether the exercise of option contracts entered into by
the Group over the sale and purchase of properties are considered
probable (note 15);
- Assessment of whether forward sales can be recognised as a
development profit by considering the likelihood of the inflow of the
economic benefits and assessing the level of profit, taking into account the
time value of money and risk (note 21);
- An assessment of the most suitable accounting treatment for convertible
bonds (note 26);
- Consideration of the nature of joint arrangements. In the context of IFRS
10, this involves consideration of where the control lies and whether either
party has the power to vary its returns from the arrangements. In particular,
significant judgement is exercised where the shareholding of the Group is
not 50% (note 19); and
- Consideration of whether an investment property purchase that has
exchanged but not completed should be recognised as investment
property under IAS 40. The judgement lies in assessing whether the
exchange is unconditional, in which case it is recognised (note 15).
38. PRINCIPAL ACCOUNTING POLICIES continued
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.
In accordance with IAS17, operating leases receipts are spread on a
straight-line basis over the length of the lease.
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.
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 on
consolidation. 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.
110
HELICAL BAR PLC REPORT & ACCOUNTS 2015 NOTES TO THE FINANCIAL STATEMENTS continued Five year review
REVENUE
NET RENTAL INCOME
DEVELOPMENT PROFIT/(LOSS)
PROVISIONS AGAINST STOCK
TRADING PROFIT/(LOSS)
SHARE OF RESULTS OF JOINT VENTURES
OTHER INCOME/(EXPENSE)
GROSS PROFIT/(LOSS) BEFORE GAIN/(LOSS) ON INVESTMENT
PROPERTIES
GAIN/(LOSS) ON SALE OF INVESTMENT PROPERTIES
REVALUATION SURPLUS ON INVESTMENT PROPERTIES
IMPAIRMENT OF AVAILABLE-FOR-SALE INVESTMENTS
ADMINISTRATIVE EXPENSES EXCLUDING PERFORMANCE
RELATED AWARDS
PERFORMANCE RELATED AWARDS
FINANCE COSTS
FINANCE INCOME
CHANGE IN FAIR VALUE OF DERIVATIVE FINANCIAL INSTRUMENTS
CHANGE IN FAIR VALUE OF CONVERTIBLE BOND
FOREIGN EXCHANGE (LOSSES)/GAINS
PROFIT/(LOSS) BEFORE TAX
TAX
PROFIT/(LOSS) AFTER TAX
SEE-THROUGH PROPERTY PORTFOLIO AT FAIR VALUE
SEE-THROUGH NET BORROWINGS
SHAREHOLDERS’ FUNDS
DIVIDEND PER ORDINARY SHARE
EPRA EARNINGS/(LOSS) PER ORDINARY SHARE
EPRA NET ASSETS PER SHARE
YEAR ENDED
31.3.15
£000
106,341
34,233
16,126
(452)
2,503
27,497
368
80,275
2,480
66,904
(773)
(10,156)
(16,374)
(23,678)
2,480
(8,389)
(3,263)
(2,061)
87,445
YEAR ENDED
31.3.14
£000
123,637
24,402
62,273
552
252
16,448
230
YEAR ENDED
31.3.13
£000
65,439
19,578
7,616
(660)
(1)
3,854
(547)
YEAR ENDED
31.3.12
£000
YEAR ENDED
31.3.11
£000
52,968
119,059
17,876
5,166
14,187
(1,729)
(4,511)
(14,913)
-
2,472
113
104,157
29,840
21,116
8,611
20,714
(88)
(2,388)
3,723
-
(376)
3,664
-
(8,816)
(8,092)
(7,385)
(17,860)
(13,983)
4,135
5,312
-
(501)
101,681
(12,669)
(14,126)
74,776
87,555
31.3.15
£000
1,021,362
531,897
404,363
31.3.15
PENCE
6.85
2.4
385
31.3.14
£000
801,712
365,059
340,527
31.3.14
PENCE
5.70
33.3
313
(6,828)
(9,577)
887
(2,573)
-
17
5,009
815
5,824
31.3.13
£000
(415)
(8,409)
583
(306)
-
(1,064)
7,408
158
7,566
31.3.12
£000
626,425
283,350
253,768
572,670
279,602
253,730
31.3.13
PENCE
5.25
2.4
264
31.3.12
PENCE
4.90
3.4
250
(367)
2,886
(358)
(294)
4,842
2,670
(1,817)
(7,312)
262
(6,992)
652
1,776
-
(67)
(6,280)
2,391
(3,889)
31.3.11
£000
532,158
241,988
255,397
31.3.11
PENCE
2.00
(6.4)
253
111
FINANCIAL STATEMENTSFINANCIAL STATEMENTS HELICAL BAR PLC REPORT & ACCOUNTS 2015 HELICAL BAR PLC REPORT & ACCOUNTS 2015
112
AdditionAl informAtion
HEliCAl BAr PlC
REPORT & ACCOUNTS 2015
AdditionAl informAtion
AdditionAl informAtion
See through analysis
Property portfolio
Shareholder information
Glossary of terms
Financial calendar
Advisors
114
117
120
121
122
122
04
AdditionAl informAtion
113
See through analysis
This analysis incorporates the separate components of the results of the consolidated subsidiaries and Helical’s share of its joint ventures’ results into
‘See-through’ analysis of our property portfolio, debt profile and the associated income streams and financing costs, to assist in providing a comprehensive
overview of the Group’s activities.
See-through net rental income 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.
2011
£000
GROSS RENTAL INCOME
– SUBSIDIARIES
18,590
– JOINT VENTURES
5,531
TOTAL GROSS RENTAL INCOME
RENTS PAYABLE
– SUBSIDIARIES
24,121
(24)
– JOINT VENTURES
(1,000)
2012
£000
23,058
6,645
29,703
(418)
(848)
2013
£000
25,816
6,193
32,009
(342)
(802)
2014
£000
29,994
6,601
36,595
(476)
(625)
PROPERTY OVERHEADS
– SUBSIDIARIES
(3,662)
(3,938)
(5,186)
(4,328)
NET RENTAL INCOME ATTRIBUTABLE TO
PROFIT SHARE PARTNER
– JOINT VENTURES
(941)
(717)
(737)
(826)
(510)
(710)
(539)
(788)
2015
£000
38,332
6,098
44,430
(269)
(809)
(3,489)
(877)
(341)
SEE-THROUGH NET RENTAL INCOME
17,777
22,936
24,459
29,839
38,645
See-through development profits
Helical’s share of development profits from property assets held in subsidiaries and in joint ventures are shown in the table below.
IN PARENT AND SUBSIDIARIES
IN JOINT VENTURES
TOTAL GROSS DEVELOPMENT PROFIT
PROVISION AGAINST STOCK
SEE-THROUGH DEVELOPMENT PROFITS
2011
£000
(1,729)
-
(1,729)
(14,913)
(16,642)
2012
£000
5,166
-
5,166
(4,511)
655
2013
£000
7,616
-
7,616
(660)
6,956
2014
£000
62,273
2,199
64,472
552
65,024
See-through net gain on sale and revaluation of investment properties
Helical’s share of net gain on sale and revaluation of investment properties held in subsidiaries and in joint ventures are shown in the table below.
REVALUATION SURPLUS ON INVESTMENT
PROPERTIES
– SUBSIDIARIES
2,670
3,664
3,723
20,714
2011
£000
2012
£000
2013
£000
2014
£000
TOTAL REVALUATION SURPLUS
NET GAIN/(LOSS) ON SALE OF
INVESTMENT PROPERTIES
TOTAL NET GAIN/(LOSS) ON SALE OF
INVESTMENT PROPERTIES
SEE-THROUGH NET GAIN ON SALE
AND REVALUATION OF INVESTMENT
PROPERTIES
– JOINT VENTURES
– SUBSIDIARIES
– JOINT VENTURES
798
3,468
4,842
-
4,842
8,310
114
581
4,245
(376)
-
(376)
3,109
6,832
(2,388)
-
(2,388)
15,710
36,424
8,611
(31)
8,580
3,869
4,444
45,004
96,609
2015
£000
16,126
1,902
18,028
(452)
17,576
2015
£000
66,904
26,134
93,038
2,480
1,091
3,571
ADDITIONAL INFORMATION HELICAL BAR PLC REPORT & ACCOUNTS 2015 SEE tHroUGH AnAlYSiS continued
AdditionAl informAtion
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 parent and
subsidiaries and in joint ventures are shown in the table below.
2011
£000
2012
£000
2013
£000
2014
£000
2015
£000
INTEREST PAYABLE ON BANK LOANS AND OVERDRAFTS
– SUBSIDIARIES
9,690
10,808
10,445
14,298
21,055
– JOINT VENTURES
1,704
2,223
2,269
3,051
3,644
TOTAL INTEREST PAYABLE ON BANK LOANS AND OVERDRAFTS
11,394
13,031
12,714
17,349
24,699
OTHER INTEREST PAYABLE AND SIMILAR CHARGES
– SUBSIDIARIES
1,481
901
1,658
2,520
6,264
INTEREST CAPITALISED
TOTAL FINANCE COSTS
– SUBSIDIARIES
(4,179)
(3,300)
(2,526)
(2,835)
(3,641)
8,696
10,632
11,846
17,034
27,322
INTEREST RECEIVABLE AND SIMILAR INCOME
– SUBSIDIARIES
(652)
(583)
(887)
(4,135)
(2,480)
– JOINT VENTURES
(11)
(12)
(66)
(539)
(43)
SEE-THROUGH NET FINANCE COSTS
8,033
10,037
10,893
12,360
24,799
See-through property portfolio
Helical’s share of the investment, trading and development property portfolio in subsidiaries and joint ventures are shown in the table below.
2011
£000
2012
£000
2013
£000
2014
£000
2015
£000
INVESTMENT PROPERTY
– SUBSIDIARIES
271,876
326,876
312,026
493,201
701,521
– JOINT VENTURES
65,870
67,187
94,962
107,504
88,305
TOTAL INVESTMENT PROPERTY
337,746
394,063
406,988
600,705
789,826
TRADING AND DEVELOPMENT STOCK
– SUBSIDIARIES
147,542
99,741
92,874
98,160
92,578
– JOINT VENTURES
14,434
44,324*
76,698*
75,368* 102,715*
TOTAL TRADING AND DEVELOPMENT STOCK
161,976
144,065
169,572
173,528
195,293
TRADING AND DEVELOPMENT STOCK SURPLUS
– SUBSIDIARIES
32,436
33,107
48,837
25,719
25,230
– JOINT VENTURES
-
1,435
1,028
1,760
11,013
TOTAL TRADING AND DEVELOPMENT STOCK SURPLUSES
32,436
34,542
49,865
27,479
36,243
TOTAL TRADING AND DEVELOPMENT STOCK AT FAIR VALUE
194,412
178,607
219,437
201,007
231,536
SEE-THROUGH PROPERTY PORTFOLIO
532,158
572,670
626,425
801,712 1,021,362
*Trading and development stock of joint ventures includes the Group’s share of development stock of Helical Sosnica Sp. Zoo (see note 19).
See-through net borrowings
Helical’s share of borrowings and cash deposits in parent and subsidiaries and joint ventures are shown in the table below.
2011
£000
2012
£000
2013
£000
2014
£000
2015
£000
IN PARENT AND SUBSIDIARIES
– GROSS BORROWINGS LESS THAN ONE YEAR
37,500
59,203
39,295
1,275
45,428
– GROSS BORROWINGS MORE THAN ONE YEAR
199,917
203,992
220,446
374,811
552,813
TOTAL
237,417
263,195
259,741
376,086
598,241
IN JOINT VENTURES
– GROSS BORROWINGS LESS THAN ONE YEAR
3,100
1,500
720
12,453
-
– GROSS BORROWINGS MORE THAN ONE YEAR
36,936
54,342*
72,509*
60,134*
69,997*
TOTAL
40,036
55,842
73,229
72,587
69,997
IN PARENT AND SUBSIDIARIES
CASH AND CASH EQUIVALENTS
(31,327)
(35,411)
(36,863)
(63,237) (120,993)
IN JOINT VENTURES
CASH AND CASH EQUIVALENTS
(4,138)
(4,024)*
(12,757)*
(20,377)*
(15,348)*
SEE-THROUGH NET BORROWINGS
241,988
279,602
283,350
365,059
531,897
*Gross borrowings and cash and cash equivalents in joint ventures include the Group’s share of borrowings and cash of Helical Sosnica Sp. Zoo (see note 19).
115
HELICAL BAR PLC REPORT & ACCOUNTS 2015
SEE tHroUGH AnAlYSiS continued
See-through analysis ratios
NET RENTAL INCOME
TRADING (LOSSES)/ PROFITS
DEVELOPMENT PROFITS (BEFORE PROVISIONS)
GAIN/(LOSS) ON SALE OF INVESTMENT PROPERTIES
NET OPERATING INCOME
FINANCE COSTS
INTEREST COVER
PROPERTY PORTFOLIO
NET BORROWINGS
SHAREHOLDERS’ FUNDS
EPRA NET ASSET VALUE
LOAN TO VALUE
GEARING
GEARING BASED ON EPRA NET ASSET VALUE
31.03.11
£000
17,777
(367)
(1,729)
4,842
20,523
31.03.12
£000
22,936
–
5,166
(376)
27,726
31.03.13
£000
24,459
(1)
7,616
(2,388)
31.03.14
£000
29,839
252
64,472
8,580
29,686
103,143
31.03.15
£000
38,645
2,503
18,028
3,571
62,747
8,033
10,037
10,893
12,360
24,799
2.6x
2.8x
2.7x
8.3x
2.5x
532,158
241,988
255,397
295,356
45%
95%
82%
572,670
279,602
253,730
294,398
49%
110%
95%
626,425
283,350
253,768
313,733
45%
112%
90%
801,712
365,059
340,527
370,062
46%
107%
99%
1,021,362
531,897
404,363
469,128
52%
132%
113%
116
HELICAL BAR PLC REPORT & ACCOUNTS 2015
Property portfolio
AdditionAl informAtion
London portfolio
AddrESS
HEld AS
dESCriPtion
ArEA SQ ft
(niA)
VACAnCY
rAtE
SHEPHERDS BUILDING, LONDON W14
INVESTMENT
MULTI-LET OFFICE BUILDING. LET TO MEDIA COMPANIES
THE BOWER, OLD STREET,
LONDON, EC1
INVESTMENT
OFFICE AND RETAIL BUILDINGS UNDERGOING
REFURBISHMENT AND EXTENSION
151,000
414,000
NEW LOOM HOUSE, LONDON E1
INVESTMENT
MULTI-LET OFFICE BUILDING WITH REFURBISHMENT UNDERWAY
112,000
C-SPACE, LONDON EC1
INVESTMENT
OFFICE REFURBISHMENT SCHEME DUE FOR COMPLETION IN
AUGUST 2015
62,000
6%
N/A
18%
N/A
ARTILLERY LANE, LONDON E1
INVESTMENT
17,000 SQ FT OFFICE BUILDING UNDERGOING
REFURBISHMENT
17,000
N/A
ENTERPRISE HOUSE, LONDON W2
INVESTMENT
OFFICE BUILDING LET TO NETWORK RAIL FOR 20 YEARS
ONE KING STREET, LONDON W6
INVESTMENT
RECENTLY REFURBISHED OFFICE AND RETAIL BUILDING
ADJACENT TO HAMMERSMITH BROADWAY
THE POWERHOUSE, LONDON W4
INVESTMENT
SINGLE LET MUSIC RECORDING STUDIOS/OFFICE BUILDING
23-28 CHARTERHOUSE SQUARE,
LONDON EC1
INVESTMENT
OFFICE BUILDING WITH SCOPE FOR EXTENSION AND
REFURBISHMENT
CHART STREET, LONDON N1
INVESTMENT
SINGLE LET OFFICE BUILDING WITH REFURBISHMENT AND
EXTENSION POTENTIAL
45,000
35,000
43,000
34,000
10,500
-
14%
-
-
-
BARTS SQUARE, LONDON EC1
ONE CREECHURCH PLACE,
LONDON EC3
INVESTMENT/
DEVELOPMENT
244,685 SQ FT OFFICES, 236 RESIDENTIAL APARTMENTS
AND 16,300 SQ FT RETAIL/LEISURE DEVELOPMENT UNDER
CONSTRUCTION
466,000
N/A
DEVELOPMENT NEW BUILDING DUE FOR COMPLETION SEPTEMBER 2016
273,000
N/A
CLIFTON STREET, LONDON EC2
DEVELOPMENT
CONTRACT TO BUY A NEWLY CONSTRUCTED OFFICE
BUILDING FOLLOWING COMPLETION IN SUMMER 2015
45,000
N/A
KING STREET, LONDON W6
DEVELOPMENT
PLANNING PERMISSION RECEIVED FOR RESIDENTIAL, OFFICE,
RETAIL AND LEISURE SCHEME. DUE TO START ON SITE EARLY 2016
500,000
N/A
Regional portfolio
AddrESS
IN TOWN RETAIL
BIRKENHEAD
HEld AS
dESCriPtion
INVESTMENT
CONVENIENCE SUPERMARKET
CARDIFF, THE MORGAN QUARTER
INVESTMENT
PRIME RETAIL PARADE AND LISTED RETAIL ARCADES WITH
RESIDENTIAL ABOVE
LANCASTER
LEICESTER
INVESTMENT
TOWN CENTRE BANK BRANCH
INVESTMENT
TOWN CENTRE SHOP
OUT-OF-TOWN RETAIL
CARDIFF, TY GLAS ROAD
INVESTMENT
SINGLE LET DIY STORE
ELLESMERE PORT
GREAT YARMOUTH
HARROGATE
HUDDESFIELD
LEIGH
SCARBOROUGH
SEVENOAKS, KENT
SOUTHEND ON SEA
STOCKPORT
STOKE ON TRENT
INVESTMENT
SINGLE LET RETAIL PARK
INVESTMENT
SINGLE LET RETAIL PARK
INVESTMENT
SINGLE LET RETAIL PARK
INVESTMENT
RETAIL PARK
INVESTMENT
RETAIL PARK
INVESTMENT
RETAIL PARK
INVESTMENT
RETAIL PARK
INVESTMENT
RETAIL PARK
INVESTMENT
SINGLE LET RETAIL PARK
INVESTMENT
RETAIL PARK
2,207,500
ArEA SQ ft
(niA)
VACAnCY
rAtE
15,855
-
290,364
6.6%
10,405
6,060
322,714
42,469
36,258
38,771
12,645
101,491
41,099
28,970
42,490
74,954
31,803
68,973
519,923
-
-
-
-
-
-
-
-
-
-
-
-
-
117
ADDITIONAL INFORMATION HELICAL BAR PLC REPORT & ACCOUNTS 2015
ProPErtY Portfolio CONTINUED
Regional Portfolio continued
AddrESS
HEld AS
dESCriPtion
INDUSTRIAL/LOGISTICS
BARKING
BEDFORD
BEDFORD
BOLTON
INVESTMENT
MULTI LET INDUSTRIAL ESTATE
INVESTMENT
MULTI LET INDUSTRIAL ESTATE
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
INVESTMENT
SINGLE LET CASH AND CARRY
BROWNHILLS, BIRMINGHAM
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
BURTON-ON-TRENT
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
CANNOCK
CANNOCK
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
CARDIFF, HEOL BILLINGSLEY
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
CHICHESTER
DAVENTRY
INVESTMENT
MULTI LET INDUSTRIAL ESTATE
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
DONCASTER, ASPECT WAY
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
DONCASTER, KIRK SANDALLS
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
GLOUCESTER QUEDGLEY
INVESTMENT
MULTI LET INDUSTRIAL ESTATE
GLOUCESTER IO
INVESTMENT
MULTI LET INDUSTRIAL ESTATE
GRAVESEND
HAVANT
HINCKLEY
INVESTMENT
MULTI LET INDUSTRIAL ESTATE
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
LEIGHTON BUZZARD
INVESTMENT
MULTI LET INDUSTRIAL ESTATE
MAIDENHEAD
INVESTMENT
MULTI LET INDUSTRIAL ESTATE
MILTON KEYNES, FINGLE DRIVE
INVESTMENT
MULTI LET INDUSTRIAL ESTATE
MILTON KEYNES, MAILCOM
INVESTMENT
MULTI LET INDUSTRIAL ESTATE
NORTHAMPTON
NORTHAMPTON
RUGBY
TELFORD
THETFORD
INVESTMENT
MULTI LET INDUSTRIAL ESTATE
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
WARRINGTON, CALVER QUAY
INVESTMENT
MULTI LET INDUSTRIAL ESTATE
WARRINGTON, RAGLAN COURT
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
WOLVERHAMPTON
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
YATE
INVESTMENT
SINGLE LET DISTRIBUTION CENTRE
REGIONAL OFFICES
BRISTOL
INVESTMENT
MULTI LET OFFICE BUILDING
CASTLE DONNINGTON
INVESTMENT
OFFICES LET TO NATIONAL GRID
CHEADLE
COBHAM
CRAWLEY
INVESTMENT
SINGLE LET OFFICE BUILDING
INVESTMENT
SINGLE LET OFFICE BUILDING
INVESTMENT
SINGLE LET OFFICE BUILDING
GLASGOW, THE HUB
INVESTMENT
MULTI LET OFFICE BUILDING
MANCHESTER, CHURCHGATE & LEE
INVESTMENT
MANCHESTER, DALE HOUSE
INVESTMENT
MULTI LET CITY CENTRE OFFICE BUILDING WITH
REFURBISHMENT AND ASSET MANAGEMENT POTENTIAL
MULTI LET CITY CENTRE OFFICE BUILDING WITH
REFURBISHMENT AND ASSET MANAGEMENT POTENTIAL
READING
SAWSTON
SHEFFIELD
118
INVESTMENT
OFFICE BUILDING LET TO THAMES WATER
INVESTMENT
INDUSTRIAL AND OFFICE PARK
INVESTMENT
SINGLE LET OFFICE BUILDING
ArEA SQ ft
(niA)
VACAnCY
rAtE
25,783
26,407
36,023
73,433
52,368
92,715
153,665
103,050
50,684
43,685
44,658
122,591
153,547
43,239
63,316
32,101
38,914
188,242
202,674
25,434
21,814
25,282
46,562
45,356
45,045
65,225
127,256
70,594
81,342
119,600
255,714
2,476,319
18,453
25,471
16,470
21,837
48,131
57,388
248,342
42,282
35,847
19,151
14,503
547,875
-
23%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
27%
-
-
-
-
5%
15%
-
-
13%
-
HELICAL BAR PLC REPORT & ACCOUNTS 2015
ProPErtY Portfolio continued
AdditionAl informAtion
Regional Portfolio continued
AddrESS
HEld AS
dESCriPtion
REGIONAL OFFICE DEVELOPMENT
GLASGOW, ST VINCENT STREET
DEVELOPMENT PRE-LET TO SCOTTISH POWER PLC. PRE-SOLD TO M&G
CHANGE OF USE
AYCLIFFE AND PETERLEE
INVESTMENT
RESTRICTIVE COVENANTS
BRACKNELL
HAILSHAM
DEVELOPMENT
DEVELOPMENT
SITE
SITE
RUGBY, CAWSTON ABBEY
DEVELOPMENT
RESIDENTIAL LAND
TELFORD, DAWLEY ROAD
DEVELOPMENT
RESIDENTIAL LAND
POLISH DEVELOPMENT
GLIWICE
WROCLAW
RETAIL DEVELOPMENT
DEVELOPMENT RETAIL PARK
DEVELOPMENT RETAIL PARK
HELICAL RETAIL
DEVELOPMENT
VARIOUS SITES
MILTON KEYNES C.4.1
DEVELOPMENT GROUND RENTS
MILTON KEYNES LEISURE PLAZA
DEVELOPMENT
ICE RINK AND DEVELOPMENT SITE
SHIRLEY, BIRMINGHAM
DEVELOPMENT
RETAIL SCHEME
Retirement villages
AddrESS
HEld AS
dESCriPtion
MILLBROOK, EXETER
DEVELOPMENT RETIREMENT VILLAGE DEVELOPMENT
DURRANTS VILLAGES, FAYGATE
DEVELOPMENT
RETIREMENT VILLAGE DEVELOPMENT
MAUDSLAY PARK, GREAT ALNE
DEVELOPMENT
RETIREMENT VILLAGE DEVELOPMENT
BRAMSHOTT PLACE, LIPHOOK
DEVELOPMENT
RETIREMENT VILLAGE DEVELOPMENT
PENALLY FARM, LIPHOOK
DEVELOPMENT
RETIREMENT VILLAGE DEVELOPMENT
BRAMSHOTT PLACE, CLUBHOUSE
INVESTMENT
CLUBHOUSE AT RETIREMENT VILLAGE
DURRANTS VILLAGES, CLUBHOUSE INVESTMENT
CLUBHOUSE AT RETIREMENT VILLAGE
ArEA SQ ft
(niA)
VACAnCY
rAtE
220,000
220,000
-
-
-
-
-
-
720,000
103,486
823,486
-
2,628
118,873
161,255
282,756
UnitS
164
173
164
151
-
-
-
652
N/A
N/A
N/A
N/A
N/A
N/A
15%
-
-
-
-
-
VACAnCY
rAtE
N/A
N/A
N/A
N/A
N/A
N/A
N/A
119
HELICAL BAR PLC REPORT & ACCOUNTS 2015
Shareholder
information
Website
The report and financial statements, a list of properties held by the Group,
Company presentations, press releases, the financial calendar and other
information on the Group are available on our website at www.helical.co.uk.
Registrar
All general enquiries concerning holdings of ordinary shares in Helical Bar
plc should be addressed to the Company’s Registrar:
Capita Asset Services
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.capitaassetservices.com
Email: shareholderenquiries@capita.co.uk
* calls cost 10p per minute plus network extras. Lines are open between 9.00 a.m. and 5:30
p.m., Monday to Friday.
e-communication
Shareholders and all interested parties may choose to be alerted about
updates to the Financial Reports, Results, Press Releases and Event
Calendar sections of the Group’s website by subscribing to the Alert Service
in the ‘News’ area of our website.
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 DRIP, key dates of forthcoming dividends can be found
in the online financial calendar in the ‘Investors’ area at www.helical.co.uk.
Share dealing service
An online and telephone share dealing service is available to our shareholders
through Capita Deal. For further information on this service or to buy and sell
shares online, please visit www.capitadeal.com. For telephone dealing, please
call 0871 664 0446 (calls cost 10p per minute plus network extras).
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.
Further information about ShareGift is available at www.sharegift.org or by
writing to: ShareGift, PO Box 72253, London, SW1P 9LQ.
Email: help@sharegift.org. Telephone: 020 7930 3737.
120
Dividends
Dividend payment dates on the Company’s Ordinary 1p shares in 2014 were
as follows:
DIVIDEND
RECORD
DATE
PAYMENT
DATE
2013/14 FINAL
4 JULY 2014
30 JULY 2014
2014/15 INTERIM 12 DECEMBER
2014
30 DECEMBER
2014
Dividend payment dates in 2015 will be as follows:
DIVIDEND
RECORD
DATE
PAYMENT
DATE
2014/15 FINAL
3 JULY 2015
31 JULY 2015
2015/16 INTERIM DECEMBER
2015
DECEMBER
2015
AMOUNT
4.75p
2.10p
AMOUNT
5.15p
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 who 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.
Registered office
5 Hanover Square, London, W1S 1HQ
Registered in England and Wales No. 156663.
ADDITIONAL INFORMATION HELICAL BAR PLC REPORT & ACCOUNTS 2015
Glossary of terms
AdditionAl informAtion
AVErAGE UnEXPirEd lEASE tErm
The average unexpired lease term expressed in years.
CAPitAl VAlUE (PSf)
ComPAnY or HEliCAl
EPrA EArninGS PEr SHArE
EPrA nEt ASSEtS PEr SHArE
The open market value of the property divided by the area of the property in square feet.
Helical Bar plc.
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 an undiluted basis. Details of the method of the calculation of the 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.
EPrA triPlE nEt ASSEt VAlUE PEr SHArE
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 (EPS)
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.
GEArinG
GroUP
initiAl YiEld
iPd
The normal value of Group borrowings expressed as a percentage of net assets
Helical Bar plc and its subsidiaries.
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
rEVErSionArY
SEE-tHroUGH
Total borrowings less short-term deposits and cash as a percentage of equity shareholders’ funds.
The annual gross rental income excluding the net effects of straightlining lease incentives.
The 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.
SEE-tHroUGH nEt ASSEt VAlUE GEArinG
The see-through net borrowings expressed as a percentage of EPRA net asset value.
totAl ProPErtY rEtUrn
totAl SHArEHoldEr rEtUrn (tSr)
trUE EQUiVAlEnt YiEld
UnlEVErAGEd rEtUrnS
The total of net rental income, trading and development profits and net gain on sale and revaluation of investment
properties on a See-through basis.
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.
121
ADDITIONAL INFORMATION HELICAL BAR PLC REPORT & ACCOUNTS 2015 Financial calendar
2015
2 JULY 2015
3 JULY 2015
24 JULY 2015
31 JULY 2015
EX-DIVIDEND DATE FOR FINAL ORDINARY DIVIDEND
REGISTRATION QUALIFYING DATE FOR FINAL ORDINARY DIVIDEND
ANNUAL GENERAL MEETING
FINAL ORDINARY DIVIDEND PAYABLE
26 NOVEMBER 2015 (PROVISIONAL)1
HALF YEAR RESULTS AND INTERIM ORDINARY DIVIDEND ANNOUNCED
3 DECEMBER 2015 (PROVISIONAL)2
EX-DIVIDEND DATE FOR INTERIM ORDINARY DIVIDEND
4 DECEMBER 2015 (PROVISIONAL)2
REGISTRATION QUALIFYING DATE FOR INTERIM ORDINARY DIVIDEND
2016
MAY 2016
ANNOUNCEMENT OF FULL YEAR RESULTS TO 31 MARCH 2016
The announcement date of the Half Year Results will be confirmed in October 2015
Dates for the potential interim dividend will be confirmed in the Half Year Results Announcement
Notes
1 The announcement date of the Half Year Results will be confirmed in October 2015
2 Dates for the potential interim dividend will be confirmed in the Half Year Results Announcement
CAPITA ASSET SERVICES
AVIVA COMMERCIAL FINANCE LIMITED
BARCLAYS BANK PLC
DEUTSCHE BANK AG
DEUTSCHE PFANDBRIEFBANK AG
HSBC BANK PLC
THE ROYAL BANK OF SCOTLAND PLC
J.P. MORGAN CAZENOVE
STIFEL
GRANT THORNTON UK LLP
LAZARD & CO LIMITED
ASHURST LLP
Advisors
REGISTRARS
BANKERS
JOINT STOCKBROKERS
AUDITORS
MERCHANT BANKERS
CORPORATE SOLICITORS
Contact details
Helical Bar plc
Registered Office
5 Hanover Square
London
W1S 1HQ
020 7629 0113
Email: info@helical.co.uk
www.helical.co.uk
122
ADDITIONAL INFORMATION HELICAL BAR PLC REPORT & ACCOUNTS 2015 Design: SG Design {sg-design.co.uk}
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HELICAL BAR PLC
Registered Offi ce
5 Hanover Square,
London, W1S 1HQ
T: 020 7629 0113
F: 020 7408 1666
E: info@helical.co.uk
www.helical.co.uk