HELICAL PLC
Annual Report and Accounts 2020
Barts Square
A new quarter in the City,
consisting of office buildings,
residential apartments and
retail. Find out how we
created this distinctive
destination in the heart
of London on page 15.
From the big
ideas to the
smallest details.
— We create
distinctive
destinations.
We create buildings for today’s occupiers who
demand more inspiring space with distinctive
architectural detail, carefully curated public
realm, market leading amenities, high quality
management and a flexible approach to leasing.
Applying this philosophy we seek to maximise
Shareholder returns through delivering income
growth from creative asset management and
capital gains from our development activity.
01
STRATEGIC REPORT
2020 Financial Highlights
Chief Executive’s Statement
Our Market
Strategy
Barts Square – Case Study
Investment Case
Business Model
Key Performance Indicators
Property Portfolio
The Property Portfolio in Numbers
Financial Review
Risk Management
Sustainability at Helical
78
GOVERNANCE REPORT
Chairman’s Review
Board of Directors
Governance Review
Nominations Committee Report
Audit and Risk Committee Report
Directors’ Remuneration Report
Report of the Directors
Statement of Directors’ Responsibilities
118
FINANCIAL STATEMENTS
Independent Auditor’s Report
to the Members of Helical plc
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
161
ADDITIONAL INFORMATION
Appendix 1 — See-through Analysis
Appendix 2 — Total Accounting Return
and Total Property Return
Appendix 3 — Five Year Review
Appendix 4 — Property Portfolio
Appendix 5 — EPRA Performance Measures
Glossary of Terms
Shareholder Information
Financial Calendar and Advisors
Front cover image: Kaleidoscope, London EC1
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Helical plc
3
Inspiring
Spaces
2
2020 FINANCIAL HIGHLIGHTS
Helical has had another successful year, delivering
a Total Property Return of 9.6%, Total Accounting
Return on EPRA net assets of 9.3% and an increase
in EPRA net asset value per share of 6.0%. This was
reflected in a Total Shareholder Return of 8.7%.
Financial
Highlights
Net assets (£m)
2019: 567
EPRA net asset value per share1 (p)
2019: 482
599 +5.5% 511
+6.0%
Profit before tax (£m)
2019: 43.5
Total dividend per share (p)
2019: 10.10
43.0
8.70
IFRS earnings per share (p)
2019: 35.8
EPRA earnings per share1 (p)
2019: loss of 8.4
32.3
7.6
Total Property Return1 (£m)
2019: 81.4
Portfolio return – MSCI (%)
2019: 10.1
83.9
9.6
See-through loan to value1 (%)
2019: 30.6
Total shareholder return1 (%)
2019: 5.2
31.4
8.7
1 See Glossary of Terms for definition.
Helical plcAnnual Report and Accounts 2020Annual Report and Accounts 2020 4
CHIEF EXECUTIVE’S STATEMENT
5
Well positioned with a high quality
portfolio and a robust balance sheet
Portfolio return - MSCI
9.6%
Profit before tax
£43.0m
Total Shareholder Return
EPRA net asset value
8.7%
511p
THE COMPLETION OF OUR DEVELOPMENT PIPELINE
In the last year we have completed a full development cycle
which started in March 2011 when we acquired, in joint venture,
3.2 acres of land and buildings at Barts Square, London EC1.
By March 2020, we had built or refurbished 2.3m sq ft of office
space in 20 buildings in London and Manchester and delivered
236 residential apartments (0.2m sq ft).
Whilst 1.3m sq ft of offices has been developed in partnership
with their ultimate owners or subsequently sold, we have retained
a high quality portfolio comprising 1.0m sq ft of new or recently
refurbished Grade A offices in London and Manchester.
RESULTS FOR THE YEAR
Profit before tax for the year to 31 March 2020 remained steady
at £43.0m (2019: £43.5m). Total Property Return increased
to £83.9m (2019: £81.4m) and included net rents of £28.5m
(2019: £25.2m), bolstered by development profits of £9.9m
(2019: losses of £4.4m). The net gain on sale and revaluation
of the investment portfolio contributed £45.5m (2019: £60.6m).
Net finance costs of £15.6m were substantially lower than in
2019 (£18.4m) as a result of the reduction in borrowings achieved
in the last two years and lower interest rates. However, the
Income Statement was adversely affected by the reduction in
medium and long-term interest rates over the year which led to
a £7.7m charge (2019: £3.3m) arising from the valuation of the
Company’s derivative financial instruments. The repayment of
the Company’s Convertible Bond provided a credit of £0.5m
(2019: £0.9m).
Recurring administration costs were marginally lower at £11.1m
(2019: £11.3m), whilst performance related awards increased
marginally to £5.3m (2019: £5.2m) with National Insurance on
these awards of £0.9m (2019: £0.7m).
IFRS basic earnings per share decreased to 32.3p (2019: 35.8p).
However, EPRA earnings per share improved to 7.6p (2019: loss
of 8.4p), reflecting the contribution to earnings from the
development profits.
The Total Accounting Return on EPRA net assets, being the
growth in the net asset value of the Group, as calculated in
accordance with EPRA guidelines, plus dividends paid in the
year, was 9.3% (2019: 8.0%). EPRA net asset value per share was
up 6.0% to 511p (31 March 2019: 482p), with EPRA triple net asset
value per share up 3.2% to 480p (31 March 2019: 465p).
“ In the last year we have completed
a full development cycle which
started in March 2011 when we
acquired, in joint venture, 3.2 acres
of land and buildings at Barts Square,
London EC1. By March 2020, we
had built or refurbished 2.3m sq ft
of office space in 20 buildings
in London and Manchester and
delivered 236 residential apartments
(0.2m sq ft).”
On a like-for-like basis, the investment portfolio increased in
value by 5.9% (5.8% including purchases and gains on sales).
The see-through total portfolio value increased to £949.3m
(31 March 2019: £876.4m).
The unleveraged return of our property portfolio, as measured
by MSCI, was 9.6% (2019: 10.1%). We compare our portfolio
performance to two MSCI benchmarks. The MSCI UK March-
Valued Annual Property Index produced a return of -1.1%
(2019: 3.6%) with an upper quartile return of 2.9% (2019: 7.0%).
The MSCI Central London Offices Total Return Index produced
a return of 4.5% (2019: 4.8%) with an upper quartile return of
6.2% (2019: 6.2%).
FINANCE
The Company uses gearing on a tactical basis, dependant on
market fluctuations, being increased to accentuate performance
when property returns are judged to materially outperform the
cost of debt and lowered when seeking to reduce exposure to
the property market.
During the year to 31 March 2020, the Group invested £86.8m in
its investment portfolio and incurred development expenditure
of £15.5m on its residential scheme at Barts Square, London EC1.
Offsetting this expenditure, the Group generated £41.6m of
investment sales and £24.7m from the sale of development
stock and funded the balance of expenditure through
borrowings, which increased to £298.5m (2019: £268.6m).
The see-through loan to value ratio (“LTV”) marginally increased
to 31.4% at the year end (31 March 2019: 30.6%) and our see-
through net gearing, the ratio of net borrowings to the net asset
value of the Group, increased to 49.9% (31 March 2019: 47.3%)
over the same period.
At the year end, the average debt maturity on secured loans,
on a see-through basis, was 4.1 years (31 March 2019: 3.4 years),
increasing to 5.5 years on exercise of options to extend the
Group’s £400m RCF and on a fully utilised basis. No secured
loan is repayable before December 2021. The average cost of
debt at 31 March 2020 was 3.5% (31 March 2019: 4.0%). The
Group has a significant level of liquidity with see-through cash
and unutilised bank facilities of £279m (31 March 2019: £382m)
to fund capital works on its portfolio and future acquisitions.
EARNINGS AND DIVIDENDS
As I stated in last year’s Annual Report, Helical is primarily a
capital growth stock, albeit one with an increasingly important
income stream as our redeveloped and refurbished investment
assets become let.
The portfolio was 82% let at 31 March 2020, generating
contracted rents of £37.6m (2019: £33.2m), at an average of
£42.60 psf, growing to £47.8m on the letting of currently vacant
space, towards an ERV of £60.0m (2019: £51.5m). The Group’s
contracted rent has a Weighted Average Unexpired Lease Term
(“WAULT”) of 7.8 years in London and 3.9 years in Manchester.
The most immediate impact on our business from Covid-19 has
been the delay in letting our most recently completed office
schemes at Kaleidoscope, London EC1 and Trinity, Manchester.
The ERV of these two buildings is £8.9m, or 15% of the portfolio’s
total ERV, and we had anticipated lettings being achieved
by now. Whilst we have good interest in the buildings, they
remain available and this will have an impact on earnings
in the coming year.
Commensurate with action taken elsewhere to reduce outgoings
and preserve the Group’s cash resources in the current uncertain
environment, the Board is recommending to Shareholders a final
dividend of 6.00p, a reduction of 20.0% on last year (7.50p). If
approved by Shareholders at the 2020 AGM, the total dividend
for the year will be 8.70p, down 13.9% on 2019 (10.10p). This
reduction of the dividend recognises the near-term uncertainty
in our earnings and provides us with the opportunity, over the
medium term, to grow dividends in line with sustainable earnings.
GERALD KAYE
CHIEF EXECUTIVE
INTRODUCTION
Having started the financial year with the political uncertainty
over Brexit followed by the December General Election, 2020
commenced with an encouraging level of business confidence.
This confidence dissipated rapidly as the Covid-19 pandemic
spread and we are now encountering a recession, caused not
by financial stress but by the cessation of a considerable level of
economic activity. The pace of economic recovery is uncertain,
and it is against this backdrop that we announce the Company’s
2020 annual results.
Helical has had another successful year, delivering a Total
Property Return of 9.6%, Total Accounting Return on EPRA net
assets of 9.3% and an increase in EPRA net asset value per share
of 6.0%. This was reflected in a Total Shareholder Return of 8.7%.
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 6
CHIEF EXECUTIVE’S STATEMENT
CONTINUED
OUR BALANCE SHEET STRENGTH AND LIQUIDITY
At 31 March 2020, we had £64m of cash deposits available
to deploy without restrictions and a further £19m of rent and
sales receipts collected in bank accounts available to service
payments under loan agreements, cash held at managing
agents and cash held in joint venture. In addition, the sale of
90 Bartholomew Close, London EC1 in April, realised a further
£8m for Helical. The net cash available to the Group is sufficient
to cover over two years of operating costs. Furthermore, the
Group has £196m of loan facilities available to draw on plus
£70m of currently uncharged investment assets.
With no secured borrowings repayable before December 2021,
the weighted average maturity of its secured borrowings is
4.1 years, increasing to 5.5 years on exercise of options to extend
the £400m RCF and on a fully utilised basis. The Group’s
weighted average cost of debt is 3.5%. The marginal cost
of fully utilising the undrawn RCF is 2.2%.
BOARD MATTERS
At the 2019 AGM we said goodbye to Mike Slade, the founder
and former Chief Executive of Helical, who retired from the
Board after 35 years to be succeeded as Chairman by Richard
Grant. At the same time, Michael O’Donnell stepped down from
the Board after eight years as a Non-Executive Director and
we thank both of them for their contributions to the success
of the Company.
In June 2019, Sue Farr was appointed as an independent
Non-Executive Director and a member of each of the Company’s
Audit and Risk, Nominations and Remuneration Committees.
Sue is an experienced Non-Executive Director and, subject
to her re-election at the 2020 AGM, will assume the role
of Chair of the Remuneration Committee.
SUSTAINABILITY
Sustainability underpins all activities at Helical and we have
long recognised that our activities have an impact on the
environment and communities in which we operate. During
the year we formalised our approach to sustainability and
notably established a Sustainability Committee, chaired by
Property Director Matthew Bonning-Snook, along with other
representatives from across the business. We are also pleased to
announce our new Sustainability Strategy, “Built for the Future”,
which will be made available alongside our Annual Report and
Accounts. This strategy sets out our long-term vision and
associated targets for our key areas: Our Environment,
Our People and Our Communities.
Eight of our buildings have either achieved or are targeting a
BREEAM rating of “Excellent” and 75% of our portfolio holds an
EPC rating of C and above. As part of our ongoing commitment
to sustainability reporting, we measure our performance under
MSCI, GRESB and CDP, along with aligning our disclosures with
EPRA. In addition to this, we have also had our greenhouse gas
(GHG) emissions externally verified giving additional confidence
to our stakeholders.
OUR RESPONSE TO COVID-19
OUR PEOPLE
We have 29 full and part-time employees in the Company who
have been working from home since mid-March. Despite the
challenges they have faced, their commitment and contribution
have been unwavering, and the Board is proud of the way they
have continued undeterred by current events.
OUR COMMUNITY
Helical’s relationship with LandAid began over 30 years ago and
since then the Group has raised or donated a significant amount
to provide temporary accommodation for vulnerable young
people, enabling them to make a new start in life.
Helical has participated in LandAid events throughout its life as
a charity and when the call came in March for further assistance,
Helical became one of the first Founding Partners to donate to the
LandAid Emergency Fund. Our donation of £20,000 is enabling
frontline charities across the country to provide vital support to
young homeless people during the Covid-19 pandemic.
7
Group’s share of cash and undrawn bank facilities
Weighted average maturity of secured borrowings
£279m
5.5yrs
Office buildings holding or targeting BREEAM “Excellent”
March 2020 quarter rent collected
8
92%
OUR TENANTS
We are a provider of Grade A office space to multiple businesses
in London and Manchester, all of which are having to navigate
their own journey through this difficult time. Since the Covid-19
lockdown, we have continued to keep all our buildings open,
ensuring that they comply with Government guidelines on
providing safe office space.
During this period, we have engaged positively with all our
tenants, seeking solutions to any short-term cash flow concerns.
For those in financial difficulty, we have agreed to rent
concessions with the March quarter rent being paid monthly
rather than quarterly. This approach has enabled us to collect
92% of the March quarter rents, with a further 3% being paid
in instalments and 2% deferred. In addition, we have collected
97% of the quarterly service charge due from our tenants.
In anticipation of possible cash flow difficulties for some
occupiers, we have taken early steps to engage with all our
tenants in advance of the June quarter. Whilst the Government
has launched a range of business support measures, including
protection against forfeiture and legal action to recover rents,
it has reiterated that commercial tenants remain liable for their
obligations under leases. We will continue to work collaboratively
with our tenants to help them through this crisis.
OUR DEVELOPMENT PROGRAMME
At the outbreak of Covid-19, work at our only major scheme, at
33 Charterhouse Street, London EC1, halted temporarily whilst
appropriate assessment of the Government’s guidance on safe
working on construction sites was considered. Demolition of the
structures on site has now resumed in full compliance with the
latest guidance.
ACTIONS TAKEN TO REDUCE OVERHEADS
AND OTHER OUTGOINGS
Notwithstanding the strong financial position of the Group at
31 March 2020, we are in a period of uncertainty, with clarity
unlikely until businesses return to their usual places of work
and become able to operate normally.
With this as the background, we have taken prudent steps
to reduce the costs of the business and the call on our cash
resources. We have reviewed our overheads and cancelled the
previously anticipated annual salary increases for the Board and
staff, other than in exceptional circumstances. The Executive
Directors have agreed to a reduction of 10% in their annual
bonus entitlement, an amount equivalent to a reduction in base
salary of 25% for six months, with the reduced bonus level
awarded wholly in shares with no cash element. In addition,
capital expenditure programmes have been reviewed to
ensure that any commitments are accretive to value.
OUTLOOK
These results are announced during a period of considerable
uncertainty with the timing and strength of the recovery from
the Covid-19 pandemic yet to be determined. For the office
sector, questions are being asked about the desire to return
to previous working practices. As we move through the various
stages of the Covid-19 pandemic and arrive at the so-called
“new normal”, we shall learn how businesses and their staff view
their experiences and the productivity of working from home.
What we do know, however, is that people are sociable and
prefer to congregate together, both at work and at play.
It is our view that a large majority of businesses will continue to
seek space for their employees to gather in a centralised working
environment and that the draw of London, as a pre-eminent
global city, will remain. It is our challenge to ensure that what we
have to offer is attractive to these businesses. We believe they
will continue to seek well located and accessible buildings
near large and modern transport hubs, served with the latest
technology but with an increased focus on health and wellbeing
within sustainable buildings. Our properties, with spacious, light
filled floors let on flexible leases and served by multiple transport
options, amenity rich with sizeable bike storage and changing
facilities, will continue to provide the features of office life that
our tenants and their employees are seeking.
We anticipate there will be a growing divergence in the office
sector between Grade A buildings and the rest. The response
from both occupiers and investors following Covid-19 is likely
to accelerate this process and we are confident that the
successful delivery of our strategy in recent years means we
are positioned on the right side of this gap, with our Grade A
buildings offering an appealing environment for businesses
seeking high quality space.
The Company has robust finances and will seek to protect
Shareholder value and meet the challenges that the coming
months will bring. Going forward, Helical has £279m of cash
and undrawn bank facilities available to pursue its strategy
of growing the business when the opportunities arise.
GERALD KAYE
Chief Executive
4 June 2020
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 8
OUR MARKET
9
MATTHEW BONNING-SNOOK
PROPERTY DIRECTOR
Q&A
Helical Property Director
Matthew Bonning-Snook
assesses the market
How have the occupiers’ office and amenity requirements evolved and how is this impacting
your property developments?
MB-S/ There is clear and growing demand from occupiers for sustainable and amenity rich
workplaces that supports talent attraction and retention.
We are invested in delivering design-led, best in class space to occupiers that benefit both their
physical and mental wellbeing. We aspire to create pleasant communal areas and public realm
within, or around, our developments, increasing employee happiness and, as a result, tenant
demand. All our buildings include generous cycle provisions and changing facilities, supporting
our occupiers in exercising and keeping fit.
Technology is playing an important role in delivering and monitoring the sustainability and
ongoing efficiency of our buildings. We are working to incorporate this technology into
our new developments, as well as retrofitting this to other buildings within the portfolio.
As a final point, we are seeing more occupiers, particularly those looking at smaller floorplates
and shorter leases, interested in fully fitted rather than traditional Cat A space. In response to
this we offer pre-fitted “Plug & Play” options, as well as a more bespoke fit out if required,
to occupiers in both London and Manchester, on flexible lease terms.
We are also now capitalising
on the value of owning
properties in clusters,
as tenants expand from
one building within our
portfolio to another.”
Why have you built up a cluster of assets in the Old Street and Farringdon areas
and are there any other locations you are considering?
MB-S/ Helical has always been an opportunity led investor and does not limit itself
to considering assets in pre-defined locations within London; all potential assets
are assessed on their individual merits. However, when making this assessment the
individual characteristics of the micro location will be a significant factor, including
the area’s transportation links, future potential, supply/demand dynamics, but also
importantly the cultural richness of the area.
Both the Old Street and Farringdon areas have excellent public transport, with the latter
expected to benefit significantly from the opening of the Elizabeth Line. They both
attract tenants from the creative and tech industries, sitting within the “Tech Belt”.
Finally, they are both undergoing significant regeneration and revitalisation, through
Government and private investment, which is expected to continue for the foreseeable
future. We are also now capitalising on the value of owning properties in clusters,
as tenants expand from one building within our portfolio to another.
Whilst we continue to look for new opportunities within these locations, we are also
looking for the next emerging area in which to build a footprint.
Why are you focusing on offices in London and Manchester?
MB-S/ Gerald and I have over 70 years combined experience in the London
commercial property market, of which 50 years has been with Helical. We remain
confident that London will continue to provide the best source of capital profits
for the foreseeable future.
London benefits from being the home to government, finance, technology, the creative
industries and life sciences. The increase in urbanisation and the “war for talent” have
driven the demand for the highest quality office space, whilst geographical and political
constraints continue to limit supply.
Manchester presents attractive opportunities for us outside of London as it appeals
to many of the same occupiers and Helical has found that its approach to providing
inspiring workspaces has been equally well received by its tenants in both cities.
Sustainability has rapidly moved up most stakeholders’ agendas; how are you responding?
MB-S/ During the year we refocused our approach to sustainability to ensure that our vision and
the pathway to achieving our goals is clear. Firstly, in September 2019 we appointed a Sustainability
Committee. This Committee, which I chair, meets on a quarterly basis and creates a forum in which
ideas can be discussed, targets and policies set, and knowledge shared. Secondly, this Committee
is pleased to announce our new Sustainability Strategy “Built for the Future”. This strategy sets out
our long-term vision, and associated targets, for our key areas: Our Environment, Our People and
Our Communities.
We recognise the importance of sustainability and the critical role it plays in business performance,
now and in the future, and as such we are committed to finding ways to lower our carbon emissions,
support social values in our communities and encourage a culture that promotes diversity and inclusion.
We believe our strategy will put us in a strong position to respond to the future risks and opportunities
associated with sustainability.
The increase in urbanisation and the “war for
talent” have driven the demand for the highest
quality office space, whilst geographical and
political constraints continue to limit supply.”
What does the future look like for Helical?
MB-S/ Repositioning, refurbishing and redeveloping property is, and will continue
to be, at the core of Helical’s strategy.
As we reach the point where our net rental income covers our costs and dividends,
our focus now is to build our pipeline, finding exciting new opportunities to add to
our chosen “clusters” and looking for new growth locations in which we can play
a key part of their regeneration and deliver strong capital returns to our Shareholders.
Helical plcAnnual Report and Accounts 2020STRATEGIC REPORTHelical plcAnnual Report and Accounts 2020 10
OUR MARKET
CONTINUED
“Since moving into The Tower almost a year
ago, the brilliant design and quality of the
office space continues to impress us and
suit our clients’ and employees’ needs.
There is a real community amongst the
other businesses in The Tower, making
it a great environment to work in.”
Anand Verma, Founder and CEO of Brilliant Basics
Plug & Play
Fast paced and growing businesses need flexibility, fewer
up-front costs and convenience. Helical’s response to this is
our “Plug & Play” offering. In partnership with trusted fit out
contractors, we design and deliver fitted office suites which
include flooring, data cabling, high quality furniture and
partitioning, that allows the occupier to move into a space
that is ready to go from day one.
Benefits to the occupier are threefold. Firstly, they do not have
to organise and get necessary approvals for their own fit out,
which can be a difficult and daunting task for those without
prior property experience. Secondly, taking a Plug & Play unit
reduces an occupier’s upfront capital expenditure as they do not
pay for their fit out. Thirdly, our Plug & Play spaces are let on a
flexible basis, meaning that occupiers can upsize and downsize
as their business requirements change, without the worry
of high reinstatement costs.
From our perspective, we benefit from reaching a wider market
and can let our vacant space more quickly. We have found there
is a growing number of occupiers who have outgrown serviced
offices and want their own space and identity but are not yet
ready to commit to a long-term lease or undertake their own fit
out. A further benefit is that the Plug & Play suites also act as
a show suite for any remaining vacant space within the building.
Finally, we are achieving a premium on our Plug & Play lettings
compared to traditional lettings, even once fit out costs have
been taken into account.
HOW IT WORKS
With our Plug & Play lettings, the cost of the fit out is written off
over a five-year period. The fit out costs vary between buildings
and locations, as does the style of finish, however we ensure the
quality is consistent across the portfolio. The occupier covers
the fit out costs through a reduced rent free period, a higher
headline rent or, most likely, a combination of the two.
THE BOWER, 12TH FLOOR
In June 2019, working with Thirdway
Interiors, we began work on our first
Plug & Play floor within The Tower at
The Bower, our flagship development
in Old Street. Great care was taken in
delivering space that was consistent with
the quality of the base build and would
suit tenants in the creative and tech
sectors, key industries within this location,
but equally provide flexibility to occupiers
should they wish to make bespoke changes.
Following an eight-week programme
the works were completed at the end of
July 2019 and the floor was let to Brilliant
Basics, an existing occupier, in October that
year. This allowed them to take immediate
occupation of the space.
Following the success of the 12th floor,
the 13th and 14th floors of The Tower
were pre-let to two separate occupiers
on the same Plug & Play basis.
11
SUSTAINABILITY
Sustainability is hugely important to us and our
Plug & Play solution is an environmentally friendly
way to let space. All the materials and furniture used
are of high quality and have been designed to last,
and the spaces themselves are designed in a way that
facilitates flexibility for future occupiers. At the end
of the lease, rather than having to completely remove
and replace the fit out, the space will undergo a light
touch refurbishment and, where possible, be reused
for the next occupier. In terms of the construction
of our Plug & Play suites, we only partner with
contractors who have a proven sustainability
track record, and we ensure all waste is recycled
where possible.
Bespoke
fit outs
55 BARTHOLOMEW, FIFTH FLOOR
We appreciate that one size does not fit all. If occupiers
require a more bespoke fit out, we work with them
to create the perfect solution for their business.
At 55 Bartholomew, ShadowFall designed their own
fit out with our approved contractor, Warnes Projects.
After entering into a simple form lease and works
agreement, Helical executed the fit out on their behalf
with the costs of the works being deducted from
the initial rent free period. The fit out works were
completed and ShadowFall were in occupation within
three weeks of the lease documentation being signed.
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 12
STRATEGY
Our strategy
13
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GROWTH
Maximise Shareholder return by increasing the
net asset value of the Group through capital
gains and growing our rental income stream
to cover dividends.
PROPERTY
Manage a balanced portfolio with a clear
market focus, combining assets with significant
development and asset management potential
with a strong rental income stream.
Strategic priorities
Strategic priorities
Deliver long-term sustainable growth.
Clear focus on Total Shareholder Return, delivering capital
growth and income.
Purpose and Values embedded effectively in the operational
policies and practices of the Group.
Incentivise management to outperform the Group’s
competitors by setting challenging levels of performance
targets, against which rewards are measured.
A focus on London and Manchester, delivering income
growth from asset management and capital gains from
development activity.
Locate sites where complexity presents opportunity to add
significant value through innovative development and asset
management.
Maximise income through attracting a diverse and financially
robust portfolio of tenants.
Continue a culture that is committed to the highest standards
in health and safety.
Improve the communities in which we are active and ensure
sustainability underpins our approach.
FINANCING
Operate a sustainable capital structure in which
the core business costs are covered by income
from the investment portfolio.
PEOPLE
Attract and retain the best people encouraging
their development and progression to ensure
future succession is secured.
Use gearing on a tactical basis throughout
the cycle to accentuate returns.
Maintain our excellent reputation and network
of property sector contacts, trusted partners
and advisors.
Strategic priorities
Strategic priorities
Maintain an appropriate risk-adjusted LTV.
Use of “equity lite” structures to maximise returns.
Strong banking relationships for quick access to finance
at competitive pricing.
Build cash reserves to cope with market fluctuations
and take advantage of opportunities as they arise.
Small and empowered core team supported by valued
advisors to allow scalability.
Clear plan for succession.
Strong relationships and a reputation which generates
off-market opportunities.
A trusted team of external consultants to enable us to deliver
quickly and to a very high standard.
Work with joint venture partners to increase project scale
and to manage risk.
Key Performance Indicators
TOTAL
SHAREHOLDER
RETURN (1 YEAR)
TOTAL
ACCOUNTING
RETURN
EPRA NAV
8.7%
7.7%
511p
Principal Associated Risks
• Poor management of
stakeholder relations
• Political risk
• The Group’s strategy is
inconsistent with the market
• Non-compliance with
prevailing legislation,
regulation and best practice
Other Performance Measures
7.6p
EPRA EARNINGS
PER SHARE
Principal Associated Risks
• Property values
decline/reduced tenant
demand for space
• Inability to asset
manage, develop and
let property assets
• Health and safety risk
• Risks arising from the
Group’s significant
development projects
Key Performance Indicators
PORTFOLIO
RETURN –
MSCI (1 YEAR)
PORTFOLIO
RETURN –
MSCI (3 YEAR)
9.6%
10.2%
Other Performance Measures
ERV
CONTRACTED
RENTAL
INCOME
£60.0m
£37.6m
VACANCY
RATE
WAULT
TOTAL
PROPERTY
RETURN
17.8%
7.1 yrs
£83.9m
SEE-THROUGH
SEE-THROUGH
NET GEARING
Other Performance Measures
LOAN TO VALUE 31.4%
49.9%
3.5%
4.1 yrs
AVERAGE COST
OF DEBT
AVERAGE
MATURITY –
SECURED DEBT
CASH AND
UNDRAWN
BANK FACILITIES
£279m
Principal Associated Risks
• Availability and cost
of bank borrowing and
cash resources
• Breach of loan covenants
Key Performance Indicators
AVERAGE
EMPLOYEE
SERVICE
10.0 yrs
Principal Associated Risks
• Employment and retention
of key personnel and
business relationships
AVERAGE STAFF
TURNOVER
10.3%
• Reliance on key contractors
and suppliers
Other Performance Measures
DEVELOPMENT 900 hrs
TRAINING AND
• Business disruption and
cyber security
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020
14
STRATEGY
CONTINUED
15
SUSTAINABILITY
Ensure that sustainability is at the heart of
our business decisions creating a portfolio
which is futureproofed for all our stakeholders.
Strategic priorities
Transition to a low carbon business.
Buy, use and re-use resources efficiently.
Bring social, economic and environmental benefits to the areas
in which we operate.
Design and operate our buildings to support health and wellbeing.
SUSTAINABILITY
UNDERPINS ALL
OF OUR OTHER
STRATEGIC
PRIORITIES, AND
IS CONSIDERED
THROUGHOUT THE
IMPLEMENTATION
OF OUR BUSINESS
STRATEGY.
Key Performance Indicators
BREEAM Rating
(Excellent)
8
OFFICE BUILDINGS
Principal Associated Risks
• Sustainability risk
Other Performance Measures
75%
EPC Ratings
(C or higher)
Energy acquired
from renewable
sources
100%
Section 172 Statement
Our stakeholders play a key role
in the successful execution of our
Company’s long-term strategy.
Our section 172(1) statement for
the year ended 31 March 2020
on page 88 demonstrates the
influence our stakeholders have
had on some of the principal
decisions made by the Board
over the year.
Helical plcAnnual Report and Accounts 2020STRATEGIC REPORTHelical plcAnnual Report and Accounts 2020 16
BARTS SQUARE
01 Barts Square
initial sketch
02 Architect drawings
03 Detailing of
90 Bartholomew Close
and One Bartholomew
We create destinations through
attention to every detail
01
THE VISION
The opportunity to purchase the freehold
interest in land and buildings on a 3.2 acre
site in the City of London does not come
around very often. Lying adjacent to
200 Aldersgate, which we had recently
refurbished, and the new Barts Hospital,
the acquisition of c 400,000 sq ft of
existing buildings, let on short-term leases
to the NHS, provided the potential to
create a new urban quarter in this historic
but hidden away part of the City.
The area is home to London’s oldest
church, St Bartholomew the Great, as
well as its Grade II listed gatehouse
(see overleaf), and the lesser known,
but equally historic, St John’s Gate
as well as housing several examples
of splendid pre-war architecture.
The challenges of a redevelopment of this
nature are many and varied with complex
archaeology, the retention of historic
façades and multiple important neighbours
to consider throughout a multi phased
mixed-use scheme developed over a
number of years.
Working with architects Sheppard Robson,
we created a masterplan for the site
maintaining the existing streetscape. The
basic strategy was simple; retain all pre-war
elements of architectural significance and
all new development would be in a style
that was appropriate and complementary
to the historic nature of the area.
The initial design concept was to create
a fully mixed-use development with
commercial office, residential apartments
and ground floor restaurants and retail
units. We appointed renowned landscape
architects Gross Max to develop a scheme
for the extensive public realm, which
surrounds the development, and for
the private gardens for the use of residents.
Helical plc
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History in our midst –
the incredible story of the
St Bartholomew the Great
Church Gatehouse
Barts Square is steeped in centuries of London’s
history with the most significant and remarkable
building being the Grade II listed Gatehouse of
St Bartholomew the Great Church, which is located
immediately adjacent to the current marketing suite
on Little Britain. Dating back to 1123, the Gatehouse
is a rare survivor of Tudor London with its
characteristic monochrome façade and leaded
windows. Despite being located at the epicentre
of several catastrophic events, this small yet
significant building is seemingly invincible to
external calamities and is determined to maintain
its longstanding position in its Little Britain location.
First, in 1666, despite the demise of the majority
of the similarly constructed neighbouring buildings,
it miraculously survived the Great Fire of London
largely unscathed due to the huge stone walls of
the neighbouring priory which then stood on the
site providing the Gatehouse with protection.
Later, during the 18th century, a Georgian façade
was erected over the original Tudor timber and
the building was all but forgotten, the lower parts
being used as a shop for the ensuing two centuries.
During a German Zeppelin raid in 1917, the building
suffered some bomb damage but again, the
Gatehouse itself was largely protected by the
existence of the Georgian façade. The cracks and
damage caused to the façade by the bombing
meant that the original building was revealed after
two centuries under wraps. It was subsequently
fully restored and has since been lovingly
maintained as one of the finest surviving examples
of London’s Tudor past. Amazingly, the tiny
residence above the Gatehouse (which was an
addition to the original structure in 1595) is still
inhabited by tenants today, arguably being the
gatekeepers to one of London’s most fascinating
(and lucky) small buildings.
02
02
03
03
Helical plcAnnual Report and Accounts 2020Annual Report and Accounts 2020
18
BARTS SQUARE
City living
Adding to
the story
of the City
RESIDENTIAL
One of the advertising “strap lines” that
has been regularly used throughout
the Barts residential sales campaign is
“For those seeking homes like no other”.
The incorporation of the historic façades
interwoven with new build elements ensures
that individual buildings have their own
character such that Barts Square feels more
of a place than just a new development. The
material choices for the new build elements
were based on detailed research into the
history and existing vernacular of the area.
For example, the window reveals of
The Levett Building feature a lace pattern
inlaid into the tiling which is a direct copy
of lace which was made by the members
of the former convent at the church of
St Bartholomew the Great. The timber
detailing to the windows and doors of
Abernethy House reference the warehouse
vernacular so apparent in the area and the
octagonal roof light in Hogarth House is a
reconstructed version of the Victorian
original. Interior architects Johnson Naylor
worked with Helical to design a clean, sleek
and stylish palette with understated luxury
at its heart.
01
“ Collaboration is at the
heart of any great project
and throughout our work
on Barts Square we have
worked closely with
Helical to ensure we
were assisting in bringing
their initial vision to life,
as well as collaborating
with the architects, wider
design team and even
the branding agency to
ensure that the end result
had a truly joined up feel,
packed with integrity.”
01 Phase 2 residential exteriors
02 Vicary House interior
19
02
Interview with
Fiona Naylor of Johnson Naylor
As local residents themselves, Johnson Naylor were perfectly placed to
take on the challenge of creating the beautiful interiors at Barts Square.
Fiona Naylor, founding partner, tells us about the project in more detail:
“We have a long history in this area so we were excited to be a part of
bringing this significant site back to life. While the studio is working on
many large central London schemes, it is a rare opportunity to be able
to develop a site of such scale and significance in this richly historic area
and we were delighted to be a key part of the team.
We started by looking in depth at the area’s existing architectural grain
and texture to ensure that while the interiors have a contemporary and
premium feel, the area’s heritage is not forgotten and plays a key part in
informing the aesthetics of the apartments. The warehouse vernacular that
is so evident in the area was a key theme that has flowed throughout the
design of the interiors.
Collaboration is at the heart of any great project and throughout our work
on Barts Square we have worked closely with Helical to ensure we were
assisting in bringing their initial vision to life, as well as collaborating with
the architects, wider design team and even the branding agency to ensure
that the end result had a truly joined up feel, packed with integrity.
Materiality and texture are paramount in the design of the Barts Square
apartments. The use of high quality finishes and the positioning of
contrasting textures in close proximity to one another results in a feeling
of ‘discreet luxe’; sophisticated, prime central London living without ever
feeling over the top or ostentatious. We create places for people to express
their own personalities and create their own homes, rather than imposing
a scripted style upon the occupiers.”
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 20
BARTS SQUARE
Designed, delivered
and operated responsibly
“ The site is one of the most significant in the City in terms of the
quality and character of the architecture in the immediate vicinity.
This includes the medieval church of St Bartholomew the Great
and its cloisters, as well as St Bartholomew’s Hospital, the oldest
hospital in London, designed by James Gibbs in the mid-18th
century. The narrow streets and 19th and 20th century industrial
buildings add to the unique character of this part of the City.”
— Lead project architects, Sheppard Robson
01
02
OFFICES
There are three office
buildings at Barts Square;
— One Bartholomew
214,434 sq ft, Grade A
office building arranged
over 12 floors.
— 90 Bartholomew Close
24,013 sq ft of office space
arranged over first-sixth
floors and a 6,414 sq ft
restaurant at ground and
lower ground, behind
an attractive, retained
Edwardian façade.
— 55 Bartholomew
A characterful, refurbished
former Victorian warehouse
which totals 10,976 sq ft
arranged over ground and
four upper levels.
All the office buildings in the scheme are
on the south/south eastern part of Barts
Square which faces towards the larger
high-rise scale of the City of London, most
notably the neighbouring 200 Aldersgate
building. One Bartholomew and
90 Bartholomew Close are recognisable
landmarks which form the gateway leading
through to the newly created public realm
at the heart of Barts Square.
OVERVIEW AND INCEPTION
From the inception of the initial design concept,
Barts Square was intended to be a fully mixed-use
development with commercial, residential and retail
uses complementing each other. The position of the
uses reflects the context of the surrounding area
both in terms of design and scale.
Project
timeline
2 010
2 011
2 012
2 013
2 014
2 017
2 018
First site visit
August 2010
Acquisition
April 2011
Initial planning
application made
February 2012
Initial planning
consent granted
May 2013
Start on site
December 2014
First resident
moves in
September 2017
90 Bartholomew Close
completes
May 2018
Phase 1 Residential
completes
September 2018
One Bartholomew
completes
December 2018
COMMUNITY BENEFITS
The Barts Square scheme
has made a direct contribution
to local community benefit,
comprised of s106 payments,
Affordable Housing
Contribution, Mayoral
and Crossrail Community
Infrastructure Levy and public
realm improvements.
The development also
contributed towards the
construction of a new
Maggie’s Cancer Care Centre
at St Barts Hospital, with
pro-bono assistance from
professional consultants of the
Barts Square project team.
21
04
01 The Levett Building
exterior
02 90 Bartholomew
Close and
One Bartholomew
03 Initial architect’s
sketch looking down
Little Britain
04 The Trade Desk
fit out at
One Bartholomew
ADAPTING TO CHANGE
At the peak of construction activities
during 2017 there were over 600
operatives on site daily, with a weekly
construction spend in excess of £1m.
Due to the phased nature of the
development, taking eight years from site
acquisition to delivery of the final office
building, there was the challenge of
designing for a dynamic occupier market
with fast changing needs. From 2012,
when the City of London was still feeling
the effects of the Global Financial Crisis,
the shape of the economy has changed
markedly. The economy of London and
especially the City fringe has benefitted
from a burgeoning tech and digital sector,
helped by an already strong creative and
arts culture. Within this context the design
challenge has been to create workplaces
that meet the changing needs of
occupiers and, at its core, create places
where people want to be.
03
PLANNING AND ENGAGEMENT
Most of the buildings which were on
the site at acquisition were occupied by
Barts and The London NHS Trust with a
phased exit from 2011 through to 2016, as
the neighbouring, new hospital buildings
were completed. In addition to hospital
wards and nurses’ accommodation the
site also housed the hospital’s boilers
and oxygen tanks. During construction
it was imperative that the activities of the
hospital were not impeded in any way, and
this was a key priority for the logistical
planning of the development. We have
placed importance on active consultation
with local stakeholders, including The
Worshipful Company of Butchers and
St Bartholomew the Great Church and as
part of the planning process neighbours
were invited to comment on the proposals
to encourage community engagement.
Planning consent for the site was secured
in 2012 with several minor variations being
secured in the years that followed.
2 019
2 0 2 0
55 Bartholomew
completes
December 2019
One Bartholomew
fully let
January 2020
90 Bartholomew Close
fully let
December 2019
Phase 2 Residential
competes
April 2020
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 22
BARTS SQUARE
One Bartholomew
Modern
working in
the heart
of the City
01
01 Entrance to
One Bartholomew
02 The Trade Desk fit out
at One Bartholomew
02
Helical plc
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DESIGN & CONSTRUCTION
One Bartholomew is distinct in its
role as the anchor-point for the
Barts Square masterplan and at
214,434 sq ft comprises the majority
of the office space within the
scheme. It offers ultra-flexible,
tenant-focused commercial
workplaces, executed to the highest
quality. Arranged over 12 floors, the
office space takes advantage of full
height façade glazing, intelligent
automatically controlled solar
shading, high levels of natural
daylighting and views over
St Paul’s and the City.
Highlights of the
specification include:
— 2.85m floor-to-ceiling heights
to all office floors
— Floor-to-floor glazing to office
perimeter with raised bulkhead
to maximise natural lighting
— Increased supply and extract
air ductwork installed at first and
second floors to allow enhanced
occupancy of one person/6m²
— Exceptional amenity provision
including shower, changing and
drying facilities, concierge and
dry-cleaning services,
complimentary towel service,
bicycle maintenance facilities,
Amazon Hub collection and
return lockers, and secure
USB charging lockers
— 338 bicycle racks, 17 showers
and 338 lockers
— Smart Spaces app, which gives
occupiers a simple platform for
managing and monitoring many
of the key systems including
temperature, lighting and access
control, as well as being a portal
for tenant engagement.
Materials used throughout the building
are naturally durable or have an enhanced
specification to minimise maintenance
demands and therefore optimise cost in
use. Self-finished, natural materials such
as Portland stone and granite feature in
the main public facing areas, alongside
hard-wearing and durable materials
such as stainless steel, concrete and
resin flooring being utilised in high
traffic locations. Detailed lifecycle and
material studies were undertaken to
optimise material specification and
minimise required frequency of repair
or replacement.
A connection to the Citigen District
Heating Network and the use of a “closed
cavity façade” system contribute to
achieving environmental sustainability
as demonstrated by the achievement
of the BREEAM “Excellent” standard.
The NHS vacated the building which
stood on the site previously at the end
of 2015 and One Bartholomew reached
practical completion in December 2018.
To achieve the highest quality in design,
and to maximise the commercial benefits
of a streamlined construction programme,
early input of key specialist trade
contractors was employed via pre-
construction services agreements.
This allowed the main contract to be
secured in parallel with early design
development activities.
A striking artwork installation was created
in the reception to enhance the visual
impact of the building at ground floor.
The barcode spells “One Bartholomew”
and is visible for the entire journey up
King Edward Street from St Pauls, adding
to the arrival experience.
Efficiency, adaptability and best-in-class
amenity provision are at the heart of
the design and have attracted a diverse
range of tenants.
LETTING
The building was designed with sufficient flexibility
to allow it to satisfy the needs of a wide range of
occupiers with large space requirements, not just
those traditionally associated with the City of London.
Efficiency, adaptability and best-in-class amenity
provision are at the heart of the design and have
attracted a diverse range of tenants who have
embraced the building’s qualities to create their own
exceptional office spaces. For example, the structure
was designed so that occupiers could link floors with
additional stairs to increase permeability between
contiguous units. The market perception of the
development is testament to its commercial success.
The building was fully let one year after completion,
attracting high rents, a diverse range of occupiers
and securing a pre-let for 35% of the space.
The first letting was to The Trade Desk, a technology-
led advertising business, who pre-let the top four
floors. They have created a truly spectacular space
that makes the best of the unobstructed views and
clear span floors. The ground, first and second floors
are occupied by Chicago Booth School of Business
who took advantage of the building’s ability to
accommodate a second, exclusive entrance. This
added level of activity makes the building more
accessible and adds to life within Bartholomew Close.
Helical plcAnnual Report and Accounts 2020Annual Report and Accounts 2020
24
BARTS SQUARE
The architectural vision for the
Barts Square development is for
a contemporary reinterpretation
of the existing fabric and
90 Bartholomew Close represents
this approach in every aspect.
01
90 Bartholomew Close
Where the work
life balance
becomes real
02
DESIGN & CONSTRUCTION
90 Bartholomew Close started life as a linoleum and
carpet warehouse in c.1910 and with its triangular
form and red brick exterior is a recognisable
landmark in the area, acting as a visual “book end”
for street views from the east. Several different uses
were considered, including hotel, but office use fitted
the building’s layout and the smaller floors allow
Barts Square to satisfy tenant demand from across
the size spectrum. Whilst the building was not listed,
its attractive façade was retained with modern,
functional office space created behind.
The Sheppard Robson designed building delivers a
contrasting mix between old and new where, above
the retained elements, metal portal frames fan
across the roof to create the enclosure. The structure
is set back from the parapet to create a terrace at
5th floor level.
The building totals 30,427 sq ft and comprises
24,013 sq ft of Grade A offices across six upper floors
and a 6,414 sq ft retail unit on the ground and lower
ground levels. With significant frontage to both
Bartholomew Close and Little Britain, the property
has excellent levels of natural light throughout.
The architectural vision for the Barts Square
development was for a contemporary reinterpretation
of the existing fabric and 90 Bartholomew Close
represents this approach in every aspect. Targeting
tech and media sectors, which have long been
associated with the area, the interior has exposed
concrete soffits on most of the floors and an industrial
aesthetic. Even with the constraints of building behind
the retained façade there are excellent facilities in the
building for cyclists with racks for 30 bicycles along
with associated showers and lockers.
As with the rest of the Barts Square development the
building is connected to Citigen, providing a lower
carbon and cost-efficient energy system which
helped to obtain a BREEAM Excellent score.
Construction was procured on a two-stage design
and build contract. As the building was occupied by
the hospital until just before the start of construction
it was only possible to do a limited amount of
investigative survey work so the two stage route
allowed design to be developed through the early
part of the programme. The preliminary works
contractor carried out demolition, façade retention
and parts of the concrete frame before handing
over to the main contractor with overall delivery
responsibility. Logistically this was a challenging
building to construct as it is in close proximity to
St Barts Hospital, so deliveries needed to be carefully
coordinated. In addition, the façade needed to be
retained from the inside so that the highways were
not obstructed in any way. The effect of this was that
there needed to be a high level of coordination and
carefully planned package sequencing. Practical
completion was achieved in May 2018.
The reception uses a mix of raw finishes that chime
with the building’s industrial heritage.
25
01 Lino,
90 Bartholomew Close
02 90 Bartholomew Close
exterior
03 90 Bartholomew Close
concept sketch
03
LETTING
Given the smaller floorplates of this
building, it was designed to accommodate
letting on a floor by floor basis. Interest
for 90 Bartholomew Close came from
across the occupier spectrum with many
businesses looking for “design-led” space,
previously only the preserve of those in
the creative sectors. In fact, two of the
floors in the building were let to law
firms; Northridge on the first floor
and Constantine Cannon LLP on the third.
Management consultancy Sia Partners
took the fourth and fifth floors and
recruitment consultant, Eric Salmon,
the sixth.
One of the most evident changes in the
London office market in the last decade
has been the rise of the flexible workspace
offering. Occupiers, especially at the
smaller end of the market, increasingly
see lease flexibility and greater service
offering as key requirements. To meet
this demand, the second floor was fitted
out, ready for occupation, and shortly after
those works were completed it was let to
Peakon, a tenant who also occupies a floor
in 25 Charterhouse Square, London EC1,
another of Helical’s buildings.
The restaurant unit is important to the
overall Barts Square retail strategy as it
is highly visible and marks out one of the
key gateways to the development. The
space itself is spectacular, with a floor
to ceiling height of nearly five metres.
Interest was received from many London
restaurant operators, both large and small.
Lino, providing high quality, seasonal
modern British cuisine, were selected
due to their imaginative proposals for the
space and for having an experienced
team. In addition, their focus on British
produce ties in well with the historic
connection of the area to the meat trade,
through proximity to Smithfield Market
and the neighbouring Butchers’ Hall.
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 26
BARTS SQUARE
27
55 Bartholomew
55 Bartholomew was originally three
Victorian residential townhouses which
were later merged and converted to
office space.
The building was acquired subsequently
to the wider Barts Square scheme and
planning permission for a comprehensive
refurbishment and additional floor was
granted in January 2018. The property
was used as the contractor’s office during
the Barts Square initial build and once
these offices were vacated we began the
refurbishment works in November 2018.
Great emphasis was placed on ensuring
the refurbishment respected and
complemented the heritage of the
building. Exposed brickwork, steel beams
and sash windows were retained and
cohere seamlessly with the otherwise
modern interiors. The refurbishment
was completed in December 2019
and 55 Bartholomew now comprises
10,976 sq ft of high quality, characterful
office space over lower ground to
fifth floor.
The building has achieved BREEAM
“Excellent” and has an EPC rating of “B”.
Working in
partnership
The Barts Square project for Helical has been one
built on partnership and collaboration, with numerous
stakeholders ranging from neighbours, St Barts
Hospital and St Bartholomew the Great Church,
to finance providers HSBC and development
partner clients of AshbyCapital.
At the core of these relationships is our partnership
with our joint venture partner, The Baupost
Group LLC ” (“Baupost”). In 2011, when Helical was
offered the off-market opportunity to acquire the
3.2 acre development site, the scale of the project
was too large to undertake on its own. Consistent
with the Group strategy and business model, where
Helical acts as development manager as well as
equity partner, a joint venture partnership was
established with Baupost having 67% ownership and
Helical 33%. This equity lean structure is well suited
to Helical particularly as it gives the opportunity for
further profit to be earned by successfully managing,
letting or selling different elements of the scheme.
This ensures that we are incentivised to make both
partners’ equity work hard and deliver returns.
Throughout the project, both parties have worked
effectively and built a strong working relationship.
The scope of the Barts project required that debt
funding be used alongside equity and this facility
was provided by HSBC. The mixed-use development
scheme comprising both offices and residential
properties posed a challenge in sourcing debt
finance. However, HSBC were supportive and
receptive to the complexities. The relationship has
gone from strength to strength through several
refinancings and amendments, including responding
to the challenges of the liquidation of the main
contractor, Carillion, in 2018.
Once construction on the scheme was underway
in 2015, an opportunity arose to de-risk part of it by
way of a sale to a third party. Clients of AshbyCapital
offered to forward purchase the office building
One Bartholomew with the joint venture continuing
to act as development manager until the building
was complete and fully let. The sale completed in
September 2015 at a purchase price of £102.4m,
with a development management fee and profit
share agreement to be run alongside until completion
of the project. Whilst this transaction de-risked the
site and allowed equity to be repaid to the partners,
the ongoing development management role ensured
Helical maintained involvement in all parts of the
scheme, helping preserve the overall design and feel
of the destination, as well as further incentivising the
development activities.
55 Bartholomew Close
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 28
BARTS SQUARE
Value creation
Delivering
on every level
As the scheme is nearing the end
of development, it is clear to see the
value that has been created through
selling the residential units and letting
the offices and retail/restaurant
space, as well as the sales of
individual properties within this
landmark destination.
01
29
01 Hogarth House interior
02 Phase 2 residential exteriors
02
OVERALL
As at 31 March 2020, the Barts Square development
has generated £77.7m of capital profits and £34.5m
of development fees.
Total capital profit and development fees
£112.2m
RESIDENTIAL AND RETAIL
The second phase (“Phase 2”) of the residential scheme of
92 apartments has recently reached practical completion
with the first phase (“Phase 1”) of 144 apartments having
been complete since early 2019. A total of 138 apartments
in Phase 1 have been sold for a total value of £177.4m, with
two further apartments exchanged for £2.9m and just four
apartments remaining available. The Phase 2 units were
released in 2018 with 32 apartments sold by 31 March 2020
for a total value of £48.3m with a further 20 apartments
exchanged at £30.0m, leaving 40 apartments for sale.
As part of the residential phases, the retail units have also
reached practical completion and Phase 1 is fully let with
contracted rent of £0.1m. Phase 2 units are now complete
and available, with an ERV of £0.5m for the seven units.
ONE BARTHOLOMEW
The sale of One Bartholomew
in September 2015 for £102.4m
to clients of AshbyCapital for
the joint venture resulted in a
profit of £58.4m. Under its role
as development manager, the
Barts joint venture was entitled
to a £1.8m fee for overseeing
the construction of the building
and a promote fee based on
the letting success. This
generated a further £32.7m
of profit for the joint venture.
90 BARTHOLOMEW CLOSE
Following the redevelopment
and subsequent letting of
90 Bartholomew Close, it
was sold on 28 April 2020 for
£48.5m. This price reflected a
NIY of 3.92% and represented
£1.5m premium to book value
at 31 March 2020, crystallising
a total capital profit of £19.2m
for the joint venture.
55 BARTHOLOMEW
The office building at
55 Bartholomew obtained
practical completion at the
end of 2019, with one floor
let in February 2020.
At 31 March 2020 a total
valuation gain of £2.0m
has been recognised
and the ERV was £0.8m.
Phase 1 unit sales
Phase 2 unit sales
Profit from sale
Profit from sale
Valuation gain at 31 March 2020
£180.3m
£78.3m
£58.4m
£19.2m
£2.0m
HELICAL’S SHARE
Whilst Helical owns 33.35% of the joint venture, the
partnership agreement with the Baupost Group LLC
allows us to earn a higher share of the return. The
increased return is dependent on the final IRR of
the joint venture and it is currently anticipated that
Helical will receive 43.0% of future equity distributions.
At 31 March 2020 Helical had recognised £43.6m of net
profit from its interest in the joint venture and a further
£4.1m of fee income for managing the development.
Helical’s total profit recognised at 31 March 2020
£47.7m
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT
30
31
INVESTMENT CASE
Investing
with Helical
We create buildings for today’s occupiers who demand more
inspiring space with distinctive architectural detail, carefully
curated public realm, market leading amenities, high quality
management and our flexible approach to leasing.
Applying this philosophy, we seek to maximise Shareholder
returns through delivering income growth from creative asset
management and capital gains from our development activity.
1
Strong track record
2
Focused portfolio
Each of the Executive Directors has over
25 years of experience at Helical, and
supported by a dynamic and collaborative
team, have developed award-winning
buildings that appeal to the most
demanding of occupiers.
Over 5m sq ft of completed
office developments.
The Group has built a high quality
portfolio, located in areas of London
and Manchester which are growing, have
excellent transport links and are culturally
rich. The buildings are occupied by a
diverse range of tenants, but with a clear
focus on the fast-growing creative sectors.
50% of our tenants work in
creative industries.
3
A customer focused approach
Helical develops buildings which appeal
to occupiers looking for design led,
sustainable and amenity rich workplaces,
and that support talent attraction and
retention. Whether the properties are built
from the ground up, or are rejuvenated
existing assets, they aim to be the best
in class, respecting the culture of the area.
Once complete and let, Helical applies
the same philosophy of excellence to its
ongoing asset management, ensuring the
occupiers receive the best service.
98% of our tenants are pleased
to be in our buildings.
4
Market knowledge
and relationships
With 35 years’ experience as a property
company, through multiple property
cycles, Helical has developed a
comprehensive knowledge of the market
and built an extensive network from
which it can source new development
opportunities and access to capital.
33 Charterhouse Street acquired
off-market in May 2019.
5
Robust financial position
6
Sustainable business model
The Group uses gearing on a tactical
basis, increasing it to accentuate returns
in a rising market, or reducing debt to
prepare for more challenging times whilst
retaining firepower to take advantage of
opportunities that arise.
Sustainability is at the core of all activities
at Helical. We recognise the impact
the buildings we develop have on the
environment and are focused on reducing
our carbon footprint throughout the
property’s lifecycle.
£279m of cash and undrawn
bank facilities.
Eight BREEAM “Excellent”
office buildings.
Barts Square is the embodiment
of the Helical difference.
One of the most iconic and diverse schemes in Helical’s history,
the Barts Square development began almost 10 years ago and
its legacy will continue into the future.
bartssquare.com
Helical plcAnnual Report and Accounts 2020STRATEGIC REPORTHelical plcAnnual Report and Accounts 2020 32
BUSINESS MODEL
Building value
We aim to deliver market-leading returns by developing
customer focused and design led properties, letting
them to diverse tenant base on flexible terms, then
applying a proactive approach to asset management.
33
RESOURCES
Assets, skills and knowledge to
create our competitive advantage.
Property
A high quality portfolio of land, buildings
and identified future opportunities.
People and Culture
A motivated, qualified and
experienced team.
Market Expertise
Comprehensive knowledge of the markets
in which we operate, built through multiple
property cycles.
Relationships and Reputation
An extensive network of joint venture
partners, advisors, and industry contacts.
A long-standing reputation for speed
of execution and excellence in delivery.
Financing
A strong financial position with access
to a variety of sources of funds, from
Shareholder capital to external borrowings.
LONG TERM
Use our own capital combined with external debt where
we see value in holding an asset for long-term income
and capital growth.
SHORT/MEDIUM TERM
Identify a joint venture partner, limiting our capital
commitment and risk exposure, whilst linking our return
to performance.
VALUE CREATION
Enhanced value for reinvestment or realisation.
Look to let our properties
on flexible terms to a
diverse tenant base who
are financially robust.
Property
£949.3m
SEE-THROUGH
PORTFOLIO VALUE
£83.9m
TOTAL PROPERTY RETURN
8/14
OFFICE BUILDINGS CERTIFIED OR
TARGETING BREEAM “EXCELLENT”
Actively manage our assets throughout their
development, working with trusted suppliers
and focusing on quality, efficiency and safety.
Through proactive asset management
we drive the rental value forward
whilst maximising occupancy.
SUSTAINABILITY
Working for the long-term benefit of our stakeholders,
local communities and the environment underpins all
our activities.
Sustainability — Page 68
People
and Culture
89.7%
AVERAGE STAFF RETENTION
Market
Expertise
98%
OF TENANTS SURVEYED
WERE PLEASED TO BE IN
OUR BUILDINGS
Relationships
and Reputation
c. 200,000 sq ft
NEW OFFICE DEVELOPMENT
AT 33 CHARTERHOUSE STREET,
LONDON EC1, ACQUIRED IN
JOINT VENTURE
Financing
8.7%
TOTAL SHAREHOLDER RETURN
3.5%
SEE-THROUGH WEIGHTED
AVERAGE INTEREST RATE
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 34
KEY PERFORMANCE INDICATORS
Measuring our
performance
We measure our performance using several financial
and non-financial key performance indicators (“KPIs”).
We incentivise management to outperform the Group’s
peers by setting challenging targets and using these
performance indicators to measure success. We design
our remuneration packages to align management’s
interests with Shareholders’ aspirations.
DESCRIPTION
The Group’s main objective is to maximise growth in net asset
value per share, which we seek to achieve through increases
in investment portfolio values and from retained earnings from
other property related activity. EPRA net asset value per share
is the property industry’s preferred measure of the proportion
of net assets attributable to each share as it includes the
fair value of net assets on an ongoing long-term basis.
The adjustments to net asset value to arrive at this figure
are shown in Note 35 to the Financial Statements.
PERFORMANCE
The EPRA net asset value per share at 31 March 2020 increased
by 6.0% to 511p (31 March 2019: 482p). EPRA triple net asset
value per share at 31 March 2020 increased by 3.2% to 480p
(31 March 2019: 465p).
LINK TO REMUNERATION
PERFORMANCE SHARE PLAN 2014
A third of the maximum Performance Share Plan (“PSP”) award
is based on the compound growth in net asset value (“NAV”)
over three years.
EPRA NET ASSET VALUE PER SHARE
511pEPRA NAV
480p EPRA NNNAV
EPRA NET ASSET VALUE PER SHARE
pence
2020
2019
2018
2017
2016
EPRA NET ASSET VALUE COMPOUND
ANNUAL GROWTH RATE (5 YEARS)
12.5%
13.6%
12.1%
511
482
468
473
456
9.0%
5.8%
2016
2017
2018
2019
2020
35
MSCI PROPERTY INDEX
9.6%
HELICAL’S UNLEVERAGED PORTFOLIO RETURNS
TO 31 MARCH 2020
I YEAR
% pa
3 YEARS
% pa
5 YEARS
% pa
10 YEARS
% pa
20 YEARS
% pa
Helical’s Percentile Rank: 2
Helical’s Percentile Rank: 4
Helical’s Percentile Rank: 2
Helical’s Percentile Rank: 5
Helical’s Percentile Rank: 5
Helical plc
MSCI Central London Offices Total Return Index
MSCI UK March-Valued Annual Property Index
Source: MSCI.
9.6%
-1.1%
4.5%
10.2%
3.8%
5.5%
12.2%
5.4%
6.9%
12.1%
7.9%
11.5%
12.5%
7.2%
9.0%
DESCRIPTION
MSCI produces several independent benchmarks of property
returns that are regarded as the main industry indices.
PERFORMANCE
MSCI has compared the ungeared performance of Helical’s
total property portfolio against that of portfolios within MSCI
for over 20 years. The Group’s annual performance target is
to exceed the top quartile of the MSCI UK March-Valued
Annual Property Index, which it has consistently achieved.
Helical’s ungeared performance for the year to 31 March 2020
was 9.6% (2019: 10.1%). This compares to the MSCI UK
March-Valued Annual Property Index of -1.1% (2019: 3.6%)
with an upper quartile return of 2.9% (2019: 7.0%).
The MSCI Central London Offices Total Return Index showed
a return of 4.5% (2019: 4.8%) with an upper quartile return of
6.2% (2019: 6.2%).
Helical’s share of the development portfolio (4% of gross
property assets) is included in its performance, as measured
by MSCI, at the lower of book cost or fair value and uplifts
are only included on the sale of an asset.
LINK TO REMUNERATION
ANNUAL BONUS SCHEME 2018
Half of the Annual Bonus Scheme 2018 performance criteria
is based on the Group’s performance compared to the
MSCI Central London Offices Total Return Index, with target
performance being to match the index and outperformance
exceeding it by 3.25%.
PERFORMANCE SHARE PLAN 2014
A third of the maximum PSP award is based on the Group’s
performance as compared with the performance of the MSCI
UK March-Valued Annual Property Index over three years.
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 36
KEY PERFORMANCE INDICATORS
CONTINUED
37
TOTAL SHAREHOLDER RETURN
AVERAGE LENGTH OF EMPLOYEE SERVICE AND AVERAGE STAFF TURNOVER
HELICAL’S TOTAL RETURNS
TO 31 MARCH 2020
8.7%
I YEAR
% pa
HELICAL’S TOTAL RETURNS
TO 31 MARCH 2020
I YEAR
3 YEARS
% pa
% pa
3 YEARS
5 YEARS
% pa
% pa
5 YEARS
10 YEARS
% pa
% pa
10 YEARS
15 YEARS
% pa
% pa
15 YEARS
20 YEARS
% pa
% pa
20 YEARS
25 YEARS
% pa
% pa
25 YEARS
● Helical plc1 ● Listed real estate sector index3
● UK equity market2 ● Direct property – monthly data4
% pa
Source: Datastream (Thomson Reuters).
TOTAL ACCOUNTING RETURN
● Helical plc1 ● Listed real estate sector index3
● UK equity market2 ● Direct property – monthly data4
Source: Datastream (Thomson Reuters).
7.7%
TOTAL ACCOUNTING RETURN
%
2020
2019
2018
2017
2016
8.7%
(18.5)%
(14.5)%
0.1%
8.7%
6.7%
(18.5)%
(4.2)%
(14.5)%
(2.8)%
0.1%
5.6%
6.7%
0.1%
(4.2)%
0.6%
(2.8)%
(3.0)%
5.6%
6.4%
0.1%
2.6%
0.6%
4.4%
(3.0)%
5.9%
6.4%
8.4%
2.6%
4.8%
4.4%
5.3%
5.9%
2.1%
8.4%
6.1%
4.8%
8.4%
5.3%
3.5%
2.1%
5.1%
6.1%
7.5%
8.4%
10.9%
3.5%
6.4%
5.1%
5.9%
7.5%
8.3%
10.9%
6.4%
5.9%
8.3%
7.7%
8.4%
5.3%
8.3%
22.5%
DESCRIPTION
Total Shareholder Return is a measure of the return on
investment for Shareholders. It combines share price
appreciation and dividends paid to show the total return
to the Shareholder expressed as an annualised percentage.
PERFORMANCE
The Total Shareholder Return in the year to 31 March 2020
was 8.7% (2019: 5.2%).
LINK TO REMUNERATION
PERFORMANCE SHARE PLAN 2014
A third of the maximum PSP award is based on the
Group’s TSR performance compared with its peers.
1 Growth over all years to 31/03/20.
2 Growth in FTSE All-Share Return Index over all years to 31/03/20.
3 Growth in FTSE 350 Real Estate Super Sector Return Index over all years
to 31/03/20. For data prior to 30 September 1999, the FTSE All Share
Real Estate Sector Index has been used.
4 Growth in Total Return of MSCI UK Monthly Index (All Property) over
all years to 31/03/20.
DESCRIPTION
Total Accounting Return is the growth in the net asset value of
the Group plus dividends paid in the reporting year, expressed
as a percentage of the net asset value at the beginning of the
period. The metric measures the growth in Shareholders’
Funds each year and is expressed as an absolute measure.
PERFORMANCE
The Total Accounting Return on IFRS net assets in the year
to 31 March 2020 was 7.7% (2019: 8.4%).
LINK TO REMUNERATION
ANNUAL BONUS SCHEME 2018
A quarter of the maximum bonus is payable based on the
Total Accounting Return (growth in net asset value plus
dividends), adjusted for performance-related awards.
DESCRIPTION
A high level of staff retention remains a key feature of Helical’s
business. The Group retains a highly skilled and experienced
team. We assess our success based on two key metrics:
the average length of service of the Group’s head office
employees and average staff turnover.
PERFORMANCE
The average length of service of the Group’s head office
employees at 31 March 2020 was 10.0 years and the average
staff turnover during the year to 31 March 2020 was 10.3%.
LINK TO REMUNERATION
ANNUAL BONUS SCHEME 2018
The deferred shares awarded under the Annual Bonus Scheme
2018 are required to be held for a period of three years.
PERFORMANCE SHARE PLAN 2014
These awards have a three-year vesting period and the
participants are required to hold them for a further two years
after they vest.
10.0
8.7
7.9
8.0
7.6
10.3%
6.9%
15.2%
5.7%
14.3%
10.0yrs
AVERAGE LENGTH OF SERVICE AT 31 MARCH
years
2020
2019
2018
2017
2016
STAFF TURNOVER DURING THE YEAR TO 31 MARCH
%
2020
2019
2018
2017
2016
BREEAM RATINGS
8/14 OFFICE BUILDINGS CERTIFIED OR
TARGETING BREEAM “EXCELLENT”
PERFORMANCE
During the year to 31 March 2020, eight of our 14 (31 March 2019:
eight out of 15) office buildings held or are targeting a BREEAM
certification of “Excellent”.
DESCRIPTION
BREEAM is an environmental impact assessment methodology for
commercial buildings. It sets out best practice standards for the
environmental performance of buildings through their design,
specification, construction and operational phases. Performance
is measured across a series of ratings; “Pass”, “Good”, “Very Good”,
“Excellent” and “Outstanding”. We target a BREEAM rating
of “Very Good” to “Excellent” on any major refurbishment
or new development.
Rating
Excellent
Building
The Warehouse, London EC11
The Tower, London EC11
25 Charterhouse Square, London, EC11
90 Bartholomew Close, London EC11
One Bartholomew, London EC11
Kaleidoscope, London EC12
55 Bartholomew, London EC12
33 Charterhouse Street, London EC13
1 Final certification
2 Certified at Design Stage
3 Targeting
We are currently exploring BREEAM In Use certification for
those assets where it was not possible to obtain a BREEAM
certification at the design and development stages.
LINK TO REMUNERATION
ANNUAL BONUS SCHEME 2018
A quarter of the maximum Annual Bonus is payable based on
the strategic and personal objectives, which include targeting
a BREEAM rating of between “Very Good” to “Excellent”
on any major refurbishment or new development.
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 38
PROPERTY PORTFOLIO
London
portfolio
Market context
London
In our judgement, the London commercial property market
continues to provide the best source of capital profits. From
an occupational perspective the market fundamentals remain
robust with strong global demand for commercial office space
from occupiers and a constrained supply of high quality, new
space. 2019 saw annual leasing activity reaching 11.5m sq ft
which was c.9% above the 10-year average. By the end of 2019
the overall London office vacancy rate had fallen to 4.1%, which
is significantly below the 10-year average of 5.5%. These factors
contributed to the significant increases in prime rents across the
London market, with a 7% rise seen in the City office market.
In particular, we have seen substantial premiums being paid for
best in class space within sub-markets, as occupiers increasingly
search for quality environments from which to conduct business.
Whilst occupational demand remains strong, within the
London office sector there remains a looming supply shortage,
particularly in new prime space. Recent research from CBRE
shows that of the c.12.6m sq ft of office space under construction,
60% is already let or under offer. Whilst Tech, Media and
Telecoms (TMT) occupiers make up the largest group taking
pre-let space, the market is diverse with significant requirements
from Financial and Professional Services businesses.
Prior to the impact of Covid-19, the investment market had
begun to benefit from renewed confidence at the beginning of
2020, which aligned with stability in the political environment.
Whilst investment volumes may be expected to remain subdued
this year due to concerns regarding Covid-19, significant capital
is still available to be allocated to the London office market which
we believe will provide an opportunity to deliver strong capital
returns. Furthermore, when compared against similar global
cities, London remains competitively priced, with prime yields in
Central London having not compressed to previous cyclical lows,
primarily due to Brexit concerns since 2016.
In recent years, the office market has seen significant evolution
with occupiers increasingly focusing their property decisions on
maximising employee wellbeing and ensuring the sustainability
of the space they occupy. It is anticipated that this trend will
continue, with the impact of Covid-19 likely to further expedite
change in the office environment. Furthermore, the rapid
evolution of the integration of technology into the workplace
continues, with best in class buildings providing innovative
technological solutions to enhance occupier efficiency.
We believe these trends align with our London properties
which place an emphasis on quality, modernity and wellbeing
and help to differentiate the portfolio.
The trend towards flexibility in occupiers’ leasing arrangements
continues to evolve across the commercial office market in
London. At Helical, we continue to engage with our customers and
look to develop long-standing relationships with them. By offering
flexible leases on our multi-let assets, which allows them to occupy
space commensurate with their requirements, we target the
long-term retention of our customers. We continue to evolve
our offering to reflect trends in demand, specifically the recent
introduction of fitted “Plug & Play” solutions across the portfolio.
We consider that the London office market provides solid
fundamentals which align with our strengths in the three “Rs” –
repositioning, refurbishing and redeveloping property. Our ability
to effectively engage with occupiers and evolve our offering
enables us to remain well positioned to take advantage of market
trends and continue to deliver best in class space.
39
Our London portfolio comprises income-producing multi-let
offices, office refurbishments and developments and a
mixed-use commercial/residential scheme. Our strategy is to
continue to increase our London holdings, focusing on areas
where we see strong tenant demand and growth potential,
such as the “Tech Belt” that runs from King’s Cross through
Farringdon, Old Street and Shoreditch to Whitechapel.
CLERKENWELL
4
HACKNEY
FARRINGDON
1
2
3
5
BARBICAN
FINSBURY
SPITALFIELDS
N
6
CITY OF
LONDON
SOUTHWARK
1 — 33 Charterhouse Street, EC1
2 — 25 Charterhouse Square, EC1
3 — Kaleidoscope, EC1
4 — The Bower, EC1
5 — Barts Square, EC1
6 — The Loom, E1
Helical plcAnnual Report and Accounts 2020STRATEGIC REPORTHelical plcAnnual Report and Accounts 2020 40
PROPERTY PORTFOLIO
CONTINUED
41
33 Charterhouse
Street/EC1
In May 2019, we acquired the long
leasehold interest in 33 Charterhouse
Street, a major development site located
in Farringdon, in a 50:50 joint venture
with AshbyCapital. The site is situated on
the corner of Charterhouse Street and
Farringdon Road, just 100m from
Farringdon Station and immediately
opposite the future Museum of London
site at Smithfield General Market.
Since acquisition, planning consent has
been obtained to enhance the ground
floor configuration and to add an
additional floor of 13,175 sq ft within
the envelope of the existing design,
such that the property will now provide
c.200,000 sq ft of office accommodation
over ground plus ten floors.
Work started on site in February 2020
and following a two-week suspension in
activity on site due to Covid-19, work is
back underway and the building is due
to complete in summer 2022.
Kaleidoscope/ EC1
Practical completion of this new office development
above the Farringdon East Elizabeth Line station was
achieved in December 2019. We are now actively
marketing the 86,064 sq ft of office space, spread
over five floors, alongside a ground floor restaurant/
retail unit and a kiosk unit.
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 42
PROPERTY PORTFOLIO
CONTINUED
25 Charterhouse
Square/EC1
25 Charterhouse Square comprises
38,355 sq ft of Grade A offices and
5,138 sq ft of retail space adjacent to
the new Farringdon East Elizabeth Line
station and overlooks the historic
Charterhouse Square. The building was
extensively refurbished upon acquisition
in January 2016, achieving practical
completion in March 2017, and is fully
let to Anomaly, Peakon, Hudson Sandler
and Senator International.
43
The Bower/EC1
The Bower is a landmark estate
immediately adjacent to the Old Street
roundabout featuring 312,575 sq ft of
innovative, high quality office space
along with 21,059 sq ft of restaurant
and retail space.
THE WAREHOUSE AND THE STUDIO
The Warehouse comprises 122,858 sq ft
of offices and The Studio 18,283 sq ft of
offices, with 10,298 sq ft of retail space
across the two buildings. The offices are
fully let to CBS, Farfetch, Pivotal, Allegis
and Stripe (The Warehouse) and John
Brown Media (The Studio), with the first
rent reviews for the office tenants taking
place in the coming year. The retail
operators are Bone Daddies, Brewdog AF,
Enoteca da Luca, Honest Burger, Mokka
Brothers and Good To Go.
THE TOWER
The Tower, completed in August 2018,
offers 171,434 sq ft of office space with
a contemporary façade and innovatively
designed interconnecting floors, along
with 10,761 sq ft of retail space, across two
units, let to food and beverage occupiers,
Serata Hall and Wagamama.
During the year, we let the 12th and
15th floors to Brilliant Basics, an Infosys
Company, an existing tenant. We also let
the 13th floor to OpenPayd, a financial
services business, the 14th floor to
Snowflake Computing and the 16th floor
to Incubeta, a multi-national marketing
group. The lettings on the 12th, 13th and
14th floors were on a “Plug & Play” basis.
Following these lettings, The Tower
is now fully let.
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 44
PROPERTY PORTFOLIO
CONTINUED
Barts Square/ EC1
In a joint venture with The Baupost Group LLC, Helical acquired the freehold
interest of Barts Square, a 3.2 acre site between St Paul’s and Smithfield
Market, in 2011. A redevelopment comprising 236 residential apartments,
three office buildings of 214,434 sq ft, 24,013 sq ft and 10,976 sq ft together
with 21,144 sq ft of retail/A3 at ground floor as well as major public realm
improvements has now been completed.
PHASE ONE
Residential/Retail
During the year we completed on the sales of four
residential apartments in Phase One and exchanged
contracts for the sale of a further two residential
apartments, one of which has completed since the
end of the year. This leaves just four apartments to sell,
of which one has been reserved since the end of the
year. In total, the sales of the 140 apartments have
achieved a total value of £180.3m, at an average
price of £1,536 psf. The retail space is fully let to
Stem + Glory and Halfcup. The landscaping of the
new public square has been completed offering
a further public amenity.
90 Bartholomew Close – Office/Restaurant
At 90 Bartholomew Close, a redevelopment
comprising 24,013 sq ft of offices and 6,414 sq ft
of restaurant, we let five floors during the year and
the building is now fully let. The second floor was
let to Peakon, an existing tenant within the Helical
portfolio, on a “Plug & Play” basis. The remaining
floors were let to Sia Partners, Constantine Cannon
LLP and Eric Salmon.
Subsequent to the year end, we completed the sale
of 90 Bartholomew Close to La Francaise Real Estate
Partners International, a pan-European investment
business acting on behalf of a French collective real
estate investment vehicle. The disposal price of
£48.5m reflected a Net Initial Yield of 3.92%
(£1,594 per sq ft capital value).
PHASE TWO
One Bartholomew – Offices
One Bartholomew was sold to clients of
AshbyCapital for £102.4m in August 2015.
The construction of a new 12 storey Grade A
office block of 214,434 sq ft completed
in December 2018. AshbyCapital’s clients
financed the development costs and
Helical acted as the development
manager for delivery of the project.
During the year we let all the remaining
space within the building, comprising
140,224 sq ft over eight floors. The ground,
first and second floors were let to The
University of Chicago Booth School of
Business, the third and fourth floors have
been let to BDB Pitmans, the fifth floor to
finnCap Group, the sixth floor to Sopra
Steria and the seventh floor to InfraRed
Capital Partners. As a result of the building
having been completed and successfully
let, the Barts Square joint venture has
received its profit share payment.
45
PHASE THREE
Residential/Retail
Phase Three is comprised of 92 residential
apartments and 11,538 sq ft of retail space.
During the year, practical completion was
achieved on three of the four residential
blocks, with the final block having been
completed shortly after the year end,
representing in total 91 apartments and
six retail units. 56 West Smithfield, the site
of the existing marketing suite, is to be
redeveloped into the final apartment
and retail unit at a later date.
We completed the sales of 32 apartments,
with a further 15 completions having
taken place since the year end. Legal
completions of a further five exchanged
apartments are ongoing over the
coming weeks. In total the sales of the
52 apartments will achieve a total value of
£78.3m, at an average price of £1,769 psf.
There are 39 apartments remaining to sell,
along with one additional duplex located
at 56 West Smithfield which will be
released at a later date. Six retail units
within Phase Three have also been
completed and are being marketed
at present.
55 BARTHOLOMEW
The substantial refurbishment of
55 Bartholomew has been completed
providing 10,976 sq ft of office
accommodation. We have let the
1,040 sq ft fifth floor to ShadowFall
Capital & Research, a hedge fund,
at a headline rent of £80 psf.
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT The
Powerhouse/W4
47
Helical acquired this 24,288 sq ft office
and recording studios by way of sale and
leaseback in 2013. The Powerhouse is a
listed building on Chiswick High Road and
is fully let on a long lease to Metropolis
Music Group.
The Loom/E1
Power
Road
Studios/
W4
The multi-let office campus, comprising
57,164 sq ft of offices across four studio
buildings, was sold to a private UK
investment manager for £41.6m in
February 2020. The sale price marginally
exceeded the 31 March 2019 valuation
and reflected a Net Initial Yield of 4.8%.
Prior to disposal we had completed six
lettings representing 16,637 sq ft and
had also let the café to a new operator.
46
PROPERTY PORTFOLIO
CONTINUED
At this 108,594 sq ft former Victorian
wool warehouse, we have let six office
units in the year at a c.4.3% premium to
31 March 2019 ERVs, along with the café.
The building is 96% let with four units
currently vacant, of which one is under
offer. Since acquisition in 2013 we have
extensively refurbished 92% of all the
units. We are currently assessing
further asset management
opportunities to reconfigure
units to offer larger floorplates
to complement the existing mix.
One
Creechurch
Place/EC3
The sale of our 10% shareholding in
One Creechurch Place, to our joint
venture partner HOOPP, took place
in September 2019, completing our
involvement in the development.
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 48
PROPERTY PORTFOLIO
Manchester
portfolio
Market context
Manchester
Manchester, the centre of the “Northern Powerhouse”, is a city
with a diverse and growing economy that continues to present
attractive opportunities. The city continues to attract significant
foreign investment, ranking second behind London, and is home
to over 2,000 foreign-owned companies. The vibrant culture
and high graduate retention rates provide a deep talent pool.
This has contributed to the rise in the number of creative
industry occupiers within the city in recent years, evidenced
by a 50% increase in FinTech in the past decade. The city also
continues to be a pioneer in relation to sustainability, with a goal
to halve carbon emissions by 2025 and become “zero carbon”
by 2038, 12 years ahead of the UK’s broader target.
The commercial office market has expanded significantly in
recent years and the trend has continued with take-up in 2019
for office space considerably in excess of the five-year average.
55% of total take-up comprises the serviced offices, TMT and
Business & Consumer Services sectors. Whilst serviced offices
alone contributed 20% of the total take-up in 2019, the sector
represents just 3.8% of the Manchester city office market,
which is significantly lower than the c.7% seen in London.
We continue to see a decline in the supply of prime stock in the
market with less than one year of Grade A supply reported as
being available at the end of 2019 (based on average Grade A
take-up rates). The limited supply has contributed to a 7%
increase in city centre prime rents to £36.50 per sq ft. With
increased private and public investment into the city and
significant infrastructure spending proposed in the coming
years, rental growth is anticipated in the medium term.
Going forward, 2.1m sq ft of office space is under construction,
double the average amount observed over the past 12 years.
However, of the space under development, 40% of the Grade A
space is pre-let, with 40% of that taken by the TMT sector and
19% by the serviced offices sector. As such, supply is expected
to be constrained for the foreseeable future, particularly if
construction is delayed due to the impacts of Covid-19.
49
Our Manchester portfolio comprises four offices where we offer
vibrant, modern space to a diverse group of tenants. Our four
offices are all clustered within a ten minute walk of one another,
enabling us to offer tenants a choice in design, size and rental
tone and aiding in the long-term retention of our customers.
N
L
L
W E
R I R
E
R I V
1
A
6
6
5
3
4
PICCADILLY
GARDENS
2
MANCHESTER
PICCADILLY
A57 (M)
1 — Trinity
2 — The Tootal Buildings
3 — 35 Dale Street
4 — Fourways
Helical plcAnnual Report and Accounts 2020STRATEGIC REPORTHelical plcAnnual Report and Accounts 2020 50
PROPERTY PORTFOLIO
CONTINUED
51
The Tootal
Buildings
This 245,822 sq ft multi-let office is
now fully let following the completion of
the lettings of the recently refurbished
third floor in Broadhurst (formerly
known as Churchgate) and the sixth
and seventh floors in Lee to Capita
Business Services, an existing tenant.
We have continued our asset management
programme which includes refurbishments
of the Broadhurst and Lee reception areas
and a rebranding of the two buildings as
The Tootal Buildings to reflect the heritage
of the property.
35 Dale
Street
35 Dale Street is a 56,124 sq ft office
building, situated in the Northern Quarter
of Manchester, which underwent a
comprehensive refurbishment that was
completed in June 2018. The property
is fully let apart from one unit which has
been refurbished during the year and is
currently under offer.
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 52
PROPERTY PORTFOLIO
CONTINUED
53
Fourways
We continue to apply our asset
management skills to this 59,260 sq ft
Grade II listed former packing warehouse
to reconfigure the existing space to
create a greater range of unit sizes,
including a complete refurbishment
and reconfiguration of the first floor.
In the year, we have let a further six units
representing 14,393 sq ft, taking the
building to 75% let. The refurbishment
of the atrium and common parts is due
to be completed shortly.
Trinity
Following completion of the full redevelopment
in January 2019, the repositioned building
comprises 54,651 sq ft of office space and
4,300 sq ft of retail/restaurant space. During
the year, three office floors and one retail unit
have gone under offer.
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 54
THE PROPERTY PORTFOLIO IN NUMBERS
55
PORTFOLIO ANALYTICS
SEE-THROUGH TOTAL PORTFOLIO BY FAIR VALUE
London Offices
– Completed, let and available to let
– Being redeveloped
– Held for redevelopment
London Residential
Total London
Manchester Offices
– Completed, let and available to let
Total Manchester
Total Core Portfolio
Other
Total Non–Core Portfolio
Total
SEE-THROUGH DEVELOPMENT PORTFOLIO
Investment
£m
Development
£m
%
731.9
45.0
–
–
776.9
136.7
136.7
913.6
0.1
0.1
913.7
80.1
4.9
–
–
85.0
15.0
15.0
100.0
0.0
0.0
100.0
–
–
0.8
34.2
35.0
–
–
35.0
0.6
0.6
35.6
%
–
–
2.2
96.0
98.2
–
–
98.2
1.8
1.8
100.0
London Offices
London Residential
Total London
Land
Total Non–Core Portfolio
Total
CAPITAL EXPENDITURE
We have a planned development and refurbishment programme.
Book value
Fair value
£m
0.8
34.2
35.0
0.0
0.0
35.0
£m
0.8
34.2
35.0
0.6
0.6
35.6
Total
£m
731.9
45.0
0.8
34.2
811.9
136.7
136.7
948.6
0.7
0.7
949.3
Surplus
£m
–
–
–
0.6
0.6
0.6
%
77.1
4.7
0.1
3.6
85.5
14.4
14.4
99.9
0.1
0.1
100.0
Fair value
%
2.2
96.0
98.2
1.8
1.8
100.0
Capex
budget
(Helicals share)
£m
Remaining
spend
(Helicals share)
£m
Pre-redeveloped
space
sq ft
New space
sq ft
Total
completed
space
sq ft
Completion
date
During the year, total contracted income increased by £4.4m primarily as a result of rent from new lettings and rent reviews. This
income more than offset the contracted income lost on the sale of Power Road Studios and losses from breaks and lease expiries.
Contracted rent reduced through disposals of London Offices
Total contracted rental change from sales and purchases
Rent lost at break/expiry
Rent reviews and uplifts on lease renewals
New lettings
– London
– Manchester
Total increase in the year from asset management activities
Net increase in contracted rents in the year
INVESTMENT PORTFOLIO
PORTFOLIO YIELDS
See-through total
portfolio contracted rent
£m
(2.1)
(2.1)
(1.4)
0.3
6.4
1.2
6.5
4.4
London Offices
– Completed, let and available to let
– Being redeveloped
Total London
Manchester Offices
– Completed, let and available to let
Total Manchester
Total
EPRA Topped
Up NIY
31.3.2020
EPRA Topped
Up NIY
31.3.2019
Reversionary
Yield
31.3.2020
Reversionary
Yield
31.3.2019
True Equivalent
Yield
31.3.2020
True Equivalent
Yield
31.3.2019
%
3.9
n/a
3.9
4.4
4.4
4.0
%
4.2
n/a
4.2
4.2
4.2
4.2
%
5.2
5.5
5.3
6.2
6.2
5.4
%
5.2
5.7
5.3
6.3
6.3
5.4
%
5.0
4.9
5.0
6.0
6.0
5.1
%
5.1
4.9
5.1
6.1
6.1
5.2
SEE-THROUGH CAPITAL VALUES, VACANCY RATES AND UNEXPIRED LEASE TERMS
Property
Investment – committed
The Tower, The Bower, London EC1
Kaleidoscope, London EC1
55 Bartholomew, London EC1
Investment – planned
33 Charterhouse Street, London EC1
Development – committed
Barts Square, London EC1 – Phase One
Barts Square, London EC1 – Phase Three
109.8
62.2
2.6
65.3
63.6
40.0
3.8
15.8*
0.1
62.0
0.2
1.2
114,000
–
9,000
68,195
88,581
1,976
182,195
Completed
88,581
10,976
Completed
Completed
London Offices
– Completed, let and available to let
– Being redeveloped
Total London
Manchester Offices
–
–
–
203,045
203,045 Summer 2022
– Completed, let and available to let
127,364
89,314
127,364
Completed
89,314
Completed
Total Manchester
Total
* Includes deferred consideration of £10.8m payable in April 2020.
SEE-THROUGH VALUATION MOVEMENTS
ASSET MANAGEMENT
Asset management is a critical component in driving Helical’s performance. Through having well considered business plans and
maximising the combined skills of our management team, we are able to create value in our assets without relying on market movements.
See-through Investment portfolio
London Offices
– Completed, let and available to let
– Being redeveloped
Total London
Manchester Offices
– Completed, let and available to let
Total Manchester
Other
Total
Fair value
weighting
%
Passing
rent
£m
Contracted
rent
£m
%
80.1
4.9
85.0
15.0
15.0
0.0
22.4
–
22.4
5.0
5.0
0.0
81.8
–
81.8
18.2
18.2
0.0
31.1
–
31.1
6.5
6.5
0.0
%
82.7
–
82.7
17.3
17.3
0.0
ERV
£m
42.1
8.5
50.6
9.3
9.3
0.1
%
70.2
14.2
84.4
15.5
15.5
0.1
100.0
27.4
100.0
37.6
100.0
60.0
100.0
ERV change
like-for-like
%
4.9
–
4.9
3.6
3.6
0.0
4.6
London Offices
– Completed, let and available to let
– Being redeveloped
Total London
Manchester Offices
– Completed, let and available to let
Total Manchester
Total Core
Regional Offices/Retail/Other
Total
31 March 2020
Capital value psf
£
1,182
443
1,007
325
325
764
31 March 2020
Vacancy rate
%
17.6
n/a
17.6
18.1
18.1
17.8
31 March 2020
WAULT
Years
31 March 2019
WAULT
Years
7.8
n/a
7.8
3.9
3.9
7.1
8.0
n/a
8.0
3.9
3.9
7.3
Val change inc
purchases &
gains on sales
Val change excl
purchases &
gains on sales
Investment
portfolio
weighting
31 March 2020
Investment
portfolio
weighting
31 March 2019
%
6.1
9.7
6.3
2.9
2.9
5.8
0.0
5.8
%
6.4
n/a
6.4
2.9
2.9
5.9
0.0
5.9
%
80.1
4.9
85.0
15.0
15.0
100.0
0.0
100.0
%
75.3
9.7
85.0
15.0
15.0
100.0
0.0
100.0
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT
56
THE PROPERTY PORTFOLIO IN NUMBERS
CONTINUED
FINANCIAL REVIEW
57
SEE-THROUGH LEASE EXPIRIES OR TENANT BREAK OPTIONS
% of rent roll
Number of leases
Year to 2021
Year to 2022
Year to 2023
Year to 2024
Year to 2025
2025 Onward
6.5
23
15.4
31
15.1
23
11.6
21
8.9
19
42.5
40
Average rent per lease (£)
106,127
186,560
247,220
207,025
176,829
395,252
We have a strong rental income stream and a diverse tenant base. The top ten tenants account for 50.9% of the total rent roll and the
tenants come from a variety of industries.
Contracted rent
£m
3.9
3.8
3.2
2.0
1.4
1.0
1.0
0.9
0.9
0.9
Rent roll
%
10.4
10.2
8.5
5.3
3.7
2.8
2.7
2.5
2.5
2.3
19.0
50.9
Area
sq ft
20,903
11,306
10,046
9,568
35,931
7,564
3,756
4,675
3,048
4,733
Lease term to
expiry
Years
5
10
5
5
10
10
1
5
5
5
Rent psf
31 March 2019 ERV1
Change to
TIM MURPHY
FINANCE DIRECTOR
2020 Performance
Financial highlights
Rank
1
2
3
4
5
6
7
8
9
10
Total
Tenant
Farfetch
WeWork
Brilliant Basics
Pivotal
Anomaly
CBS
Allegis
Finablr
Incubeta
OpenPayd
PRINCIPAL LETTINGS
Tenant industry
Online retail
Flexible offices
Technology
Technology
Marketing
Media
Recruitment
Financial Services
Marketing
Financial Services
Property
Tenant
The Tower, The Bower, London EC1
Brilliant Basics
The Tower, The Bower, London EC1
The Tower, The Bower, London EC1
Incubeta
OpenPayd
The Tower, The Bower, London EC1
Snowflake Computing
The Tootal Buildings, Manchester
Capita Business Services
90 Bartholomew Close, London EC1
SIA Partners
Fourways, Manchester
OYO Technology and Hospitality
90 Bartholomew Close, London EC1
The Loom, London E1
Peakon
UI Centric
90 Bartholomew Close, London EC1
Constantine Cannon LLP
LETTING ACTIVITY
Investment Properties
London
Completed, let and available to let – offices
Power Road Studios, W4
The Tower, The Bower, EC1
The Loom, E1
90 Bartholomew Close, EC1
55 Bartholomew, EC1
Completed, let and available to let – retail
The Loom, E1
Other income – car parking/storage
Manchester
Power Road Studios, W4
The Tower, The Bower, EC1
The Tootal Buildings
Fourways – Office
Fourways – Retail
Area
sq ft
Contracted rent
(Helical’s Share)
£
16,637
51,823
10,030
19,371
1,040
98,901
1,313
166
–
1,479
–
35,931
12,620
1,773
50,324
692,000
4,378,000
572,000
638,000
36,000
6,316,000
10,000
8,000
–
18,000
81,000
773,000
395,000
50,000
1,218,000
Total
Development Properties
150,704
7,633,000
56.58
Completed, let and available to let
One Bartholomew, EC1
140,224
–
79.67
1 Excludes leases on a “Plug & Play” basis.
£
41.57
84.48
57.00
76.56
80.00
72.88
7.62
48.19
–
12.17
–
21.50
31.34
28.20
24.20
%
9.0
4.4
4.3
2.0
8.5
5.0
-69.5
-33.3
n/a
-59.8
n/a
1.5
3.3
19.9
2.9
2.7
n/a
Helical aims to deliver market leading
returns by investing in and developing
real estate that best serves the needs
of its tenants and maximises value for
its Shareholders.
IFRS PERFORMANCE
EPRA PERFORMANCE
PROFIT BEFORE TAX
EPRA EARNINGS
£43.0m
(2019: £43.5m)
£9.1m
(2019: loss of £10.0m)
EPS
32.3p
(2019: 35.8p)
EPRA EPS
7.6p
(2019: loss of 8.4p)
DILUTED NAV PER SHARE
EPRA NAV PER SHARE
489p
511p
(31 March 2019: 469p)
(31 March 2019: 482p)
TOTAL ACCOUNTING
RETURN
TOTAL ACCOUNTING RETURN
ON EPRA NET ASSETS
7.7%
(31 March 2019: 8.4%)
9.3%
(31 March 2019: 8.0%)
Helical plcAnnual Report and Accounts 2020STRATEGIC REPORTHelical plcAnnual Report and Accounts 2020
58
FINANCIAL REVIEW
CONTINUED
59
OVERVIEW
The year has seen significant progress in the Group’s
development programme, with practical completion successfully
achieved at Kaleidoscope, London EC1, 55 Bartholomew,
London EC1 and at the second and final phase of residential
apartments at Barts Square, London EC1, while the acquisition of
33 Charterhouse Street, London EC1, in joint venture, has added
to the Group’s development pipeline.
This success has been further reflected in Helical’s letting
activities. The final vacant floors at The Tower, London EC1 and
One Bartholomew, London EC1 were let during the year. 90
Bartholomew Close, London EC1 was also fully let during the
year, enabling its sale after the year end at significantly above its
31 March 2019 book value.
The completion of its development management roles at One
Creechurch Place, London EC3 and One Bartholomew, London
EC1 has allowed the Group to recognise its final profit shares,
with receipt of these boosting its cash resources.
With the repayment of the £100m Convertible Bond in June
2019, the repayment of the development loan on The Bower,
London EC1 and the completion of the expanded £400m
Revolving Credit Facility, the Group has reduced its average cost
of debt whilst extending the maturity of its borrowings.
RESULTS FOR THE YEAR
The see-through results for the year to 31 March 2020 include
net rental income of £28.5m, a net gain on sale and revaluation
of the investment portfolio of £45.5m and development profits
of £9.9m, leading to a Total Property Return of £83.9m (2019:
£81.4m). Total administration costs of £17.3m (2019: £17.2m) and
net finance costs of £15.6m (2019: £18.4m) contributed to a
pre-tax profit of £43.0m (2019: £43.5m). EPRA net asset value
per share increased by 6.0% to 511p (31 March 2019: 482p).
The final dividend, payable on 27 July 2020, will be 6.00p per
share (2019: 7.50p).
The Group’s real estate portfolio, including its share of assets
held in joint ventures, increased to £949.3m (31 March 2019:
£876.4m) as a result of the acquisition, in joint venture, of
33 Charterhouse Street, London EC1, capital expenditure and net
revaluation gains on the investment portfolio, offset by the sale
of Power Road Studios, London W4.
The expenditure on the investment portfolio during the year
marginally increased the Group’s see-through loan to value to
31.4% (31 March 2019: 30.6%). Repayment of the Convertible Bond
and refinancing The Bower into an expanded £400m Revolving
Credit Facility reduced the Group’s weighted average cost of
debt to 3.5% (31 March 2019: 4.0%) and increased the weighted
average debt maturity to 4.0 years (31 March 2019: 2.7 years).
The average maturity of the facilities would increase to 5.4 years
on exercise of the two one-year extension options on the
Revolving Credit Facility, on a fully utilised basis.
At 31 March 2020, the Group had unutilised bank facilities of
£196m and £83m of cash on a see-through basis. These are
primarily available to fund the development of 33 Charterhouse
Street, London EC1, remaining capital commitments at
Kaleidoscope, London EC1 and future property acquisitions.
TOTAL PROPERTY RETURN
We calculate our Total Property Return to enable us to assess
the aggregate of income and capital profits made each year
from our property activities. Our business is primarily aimed
at producing surpluses in the value of our assets through
asset management and development, with the income side
of the business seeking to cover our annual administration
and finance costs.
Total Property Return
£m
164.6
79.9
68.8
81.4
83.9
2016
2017
2018
2019
2020
The net rental income, development profits and net gains on sale
and revaluation of our investment portfolio, which contribute to
the Total Property Return, provide the inputs for our
performance as measured by MSCI.
Unleveraged portfolio return – MSCI
%
21.7
9.3
10.8
10.1
9.6
2016
2017
2018
2019
2020
TOTAL ACCOUNTING RETURN
Total Accounting Return is the growth in the net asset value of
the Group plus dividends paid in the reporting year, expressed
as a percentage of the net asset value at the beginning of the
period. The metric measures the growth in Shareholders’ Funds
each year and is expressed as an absolute measure.
The Total Accounting Return on IFRS net assets in the year to
31 March 2020 was 7.7% (2019: 8.4%).
Total Accounting Return on IFRS net assets
%
22.5
8.3
5.3
8.4
7.7
2016
2017
2018
2019
2020
Total Accounting Return on EPRA net assets is the growth in the
EPRA net asset value of the Group plus dividends paid in the
year, expressed as a percentage of EPRA net asset value at the
beginning of the year.
Total Accounting Return on EPRA net assets
%
19.6
4.2
2016
2017
1.0
2018
8.0
9.3
2019
2020
EARNINGS PER SHARE
The IFRS earnings per share decreased from 35.8p to 32.3p
and are based on the after tax earnings attributable to ordinary
Shareholders divided by the weighted average number of shares
in issue during the year.
On an EPRA basis, the loss per share of 8.4p in 2019 improved to
a positive earnings per share of 7.6p, reflecting the Group’s share
of net rental income of £28.5m (2019: £25.2m) and development
profits of £9.9m (2019: losses of £4.4m), but excluding gains
on sale and revaluation of investment properties of £45.5m
(2019: £60.6m)
NET ASSET VALUE
IFRS diluted net asset value per share increased from 469p to
489p and is a measure of Shareholders’ Funds divided by the
number of shares in issue at the year end, adjusted to allow for
the effect of all dilutive share awards.
EPRA net asset value per share increased by 6.0% to 511p per
share (31 March 2019: 482p). This movement arose principally
from a total comprehensive income (retained profits) of
£38.8m (2019: £42.6m), less £12.2m of dividends (2019: £11.4m).
EPRA triple net asset value per share increased to 480p
(31 March 2019: 465p).
EPRA has introduced three new asset value measures which will
be applicable to Helical’s annual results to 31 March 2021. The
new measures will replace the existing EPRA net asset value and
triple net asset value metrics. Helical considers the EPRA net
tangible asset measure to be the most relevant for its business
and its net asset value per share under this measure is 524p
(31 March 2019: 494p).
INCOME STATEMENT
RENTAL INCOME AND PROPERTY OVERHEADS
Gross rental income for the Group in respect of wholly owned
properties increased to £31.6m (2019: £28.2m), reflecting letting
success and partial capture of the investment portfolio’s
reversionary potential. In the joint ventures, gross rents
decreased marginally to £0.9m (2019: £1.0m). Property
overheads in respect of wholly owned assets and in respect
of those assets in joint ventures remained steady at £4.1m
(2019: £4.1m). After taking account of net rents receivable from
our profit share partners of £nil (2019: £0.1m), see-through net
rents increased by 13.0% to £28.5m (2019: £25.2m).
DEVELOPMENT PROFITS
In the year, from our role as development manager at One
Creechurch Place, London EC3, we recognised £0.8m of fees.
Further fees of £1.3m were recognised for carrying out similar
roles at Barts Square, London EC1 and 33 Charterhouse Street,
London EC1.
A net write back of a provision for cost indemnities given on
the sale of the Retirement Village schemes in 2017 contributed
£1.1m and the sale of the Drury Lane scheme for a higher than
anticipated value resulted in a further write back of £0.5m.
The provisions of £0.4m against our legacy retail development
programme, taking the carrying value of these assets to £nil,
offset these to give a net development profit in the main group
of £3.3m (2019: losses of £1.8m).
SHARE OF RESULTS OF JOINT VENTURES
The revaluation of our investment assets held in joint ventures
generated a surplus of £8.5m (2019: £1.3m). Under our
development management agreement for One Bartholomew,
London EC1, we recognised a net development fee of £8.1m
as a result of completing the development and letting this
asset. However, a reassessment of the expected sales proceeds
and costs on the remaining apartments in the first phase of
residential at Barts Square resulted in a provision of £1.5m and
net development profits in joint ventures of £6.6m. The sale
of the Group’s interest in One Creechurch Place, London EC3
resulted in a profit of £1.3m.
Finance, administration, taxation and other sundry items added
a further £3.5m of costs. An adjustment to reflect our economic
interest in the Barts Square, London EC1 development and to
ensure our (now disposed of) investment in One Creechurch
Place, London EC3 is shown at its recoverable amount,
generated net surpluses of £0.5m, leaving a net profit from
our joint ventures of £13.4m (2019: loss of £3.2m).
GAIN ON SALE AND REVALUATION
OF INVESTMENT PROPERTIES
The valuation of our London investment portfolio, on a see-
through basis, continued to reflect the benefit of our letting and
development activities where we generated a valuation surplus
of 6.3% (including purchases and gains on sales) and 6.4% on
a like-for-like basis. In Manchester, a valuation surplus of 2.9%
(including purchases and gains on sales) and 2.9% on a like-for-
like basis was achieved. In total, the see-through investment
portfolio showed a valuation surplus of 5.8% (including
purchases and gains on sales), or 5.9% on a like-for-like basis.
The total impact on our results of the gain on sale and
revaluation of our investment portfolio, including in joint
ventures, was a net gain of £45.5m (2019: £60.6m).
ADMINISTRATIVE EXPENSES
Administration costs in the Group, before performance
related awards, reduced from £10.9m to £10.5m.
Performance related share awards and bonus payments,
including National Insurance costs, were £6.2m (2019: £5.9m).
Of this amount, £2.8m (2019: £2.3m), being the 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.
Administrative expenses
(excluding performance related rewards)
Performance related awards, including NIC
Group
In joint ventures
Total
2020
£000
2019
£000
10,524
6,191
16,715
596
10,858
5,895
16,753
406
17,311
17,159
FINANCE COSTS, FINANCE INCOME
AND DERIVATIVE FINANCIAL INSTRUMENTS
Total finance costs, including joint ventures, fell significantly
during the year to £17.0m (2019: £19.5m), primarily as a result
of the repayment of the Convertible Bond in June 2019.
Interest payable on secured bank loans
– subsidiaries
– joint ventures
Interest payable on unsecured bonds
Loan cancellation costs
Amortisation of refinancing costs
Sundry interest and bank charges
– subsidiaries
– joint ventures
Interest capitalised
Total
2020
£000
2019
£000
11,292
12,414
543
855
1,692
2,270
1,736
328
511
4,000
1,151
1,503
1,554
1,576
(1,745)
(3,215)
16,971
19,494
Finance income earned, including in joint ventures, was £1.4m
(2019: £1.1m). The movement downwards in medium and long-term
interest rate projections during the year contributed to a charge
of £7.7m (2019: £3.3m) on the mark-to-market valuation of the
derivative financial instruments. The repayment of the £100m
Convertible Bond resulted in a credit of £0.5m (2019: £0.9m) on
the reversal of the 31 March 2019 mark-to-market valuation.
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 60
FINANCIAL REVIEW
CONTINUED
61
TAXATION
Helical pays corporation tax on its UK sourced net rental income,
trading and development profits and realised chargeable gains,
after offsetting administration and finance costs.
The current tax charge for the year decreased to £0.5m from
£9.0m (which reflected the tax charge on the capital gain on the
sale of The Shepherds Building, London W14 in September 2018).
DIVIDENDS
The interim dividend paid on 31 December 2019 of 2.70p was
an increase of 3.8% on the previous interim dividend of 2.60p.
The Company has proposed a final dividend of 6.00p, a
decrease of 20% on the previous year (2019: 7.50p), for approval
by Shareholders at the 2020 AGM. In total, the dividend paid or
payable in respect of the results for the year to 31 March 2020
will be 8.70p (2019: 10.10p), a decrease of 13.9%.
BALANCE SHEET
SHAREHOLDERS’ FUNDS
Shareholders’ Funds at 1 April 2019 were £567.4m. The Group’s
results for the year added £38.8m (2019: £42.6m), net of tax,
representing the total comprehensive income for the year.
Movements in reserves arising from the Group’s bonus and share
schemes and the impact of adopting IFRS 16 Leases increased
funds by £4.7m. The Company paid dividends to Shareholders
amounting to £12.2m leaving a net increase in Shareholders’
Funds from Group activities during the year of £31.3m to £598.7m.
portfolio, mainly at Kaleidoscope, London EC1 (£24.9m),
The Tower, London EC1 (£7.8m), and 33 Charterhouse Street,
London EC1 (£3.9m), The Tootal Buildings (formerly called
Churchgate and Lee), Manchester (£6.2m) and Fourways,
Manchester (£3.2m). Power Road Studios, London W4 was
sold in the year with a book value of £41.5m. A downward
economic adjustment of £0.5m was made to reflect our share
of Barts Square, London EC1, at 43.0% compared to 43.8% in
the prior year. Revaluation gains added £52.2m to increase the
see-through value of the portfolio, before lease incentives, to
£913.7m (31 March 2019: £816.6m). The accounting for head
leases and lease incentives resulted in a book value of the
see-through investment portfolio of £895.7m (31 March 2019:
£804.0m).
DEBT AND FINANCIAL RISK
In total, Helical’s outstanding debt at 31 March 2020 of £386.9m
(31 March 2019: £479.2m) had a weighted interest cost of 3.5%
(31 March 2019: 4.0%) and a weighted average debt maturity of
4.0 years (31 March 2019: 2.7 years). The average maturity of the
facilities would increase to 5.4 years following exercise of the two
one-year extensions of the Group’s £400m Revolving Credit
Facility, on a fully utilised basis.
SECURED DEBT
The Group arranges its secured investment and development
facilities to suit its business needs as follows:
• Investment facilities
INVESTMENT PORTFOLIO
In the year to 31 March 2020, the Group acquired 33 Charterhouse
Street, London EC1 in joint venture for £37.1m (our share).
The Group spent £49.7m on capital works on the investment
We have a £400m Revolving Credit Facility that enables the
Group to acquire, refurbish, reposition and hold significant
parts of our investment portfolio with the remaining investment
assets held in an £81m term loan secured facility. The value of
Investment portfolio
Valuation at 31 March 2019
Acquisitions
– wholly owned
– joint ventures
Capital expenditure
– wholly owned
– joint ventures
Disposals
– wholly owned
Revaluation surplus
– wholly owned
– joint ventures
Economic interest adjustment
– joint ventures
Wholly
owned
£000
791,250
–
–
43,979
–
(41,532)
43,178
–
–
Valuation at 31 March 2020
836,875
In joint
venture
£000
25,382
–
37,114
–
5,750
–
–
9,027
(464)
76,809
See-through
£000
816,632
Head leases
capitalised
£000
2,189
Lease
incentives
£000
(14,781)
Book
value
£000
804,040
–
37,114
43,951
5,750
–
–
–
–
51
(41,481)
(4,827)
(574)
38,351
8,453
–
(464)
2,161
(20,131)
895,714
–
37,114
43,979
5,750
(41,532)
43,178
9,027
(464)
913,684
–
–
(28)
–
–
–
–
–
Debt profile at 31 March 2020 – including commitment fees but excluding the amortisation of arrangement fees
Investment facilities
Development facilities
Total wholly owned
In joint ventures
Total secured debt
Working capital
Total unsecured debt
Total debt
Total
facility
£000
480,750
50,400
531,150
42,140
573,290
10,000
10,000
583,290
Total
utilised
£000
310,750
38,061
348,811
33,075
381,886
5,000
5,000
Available
facility
£000
170,000
12,339
182,339
9,065
191,404
5,000
5,000
386,886
196,404
Weighted
average
interest rate
%
Average
maturity
Years
Extended1
average
maturity
Years
3.3
3.8
3.4
4.2
3.5
3.3
3.3
3.5
4.4
3.4
4.2
1.8
4.1
1.0
1.0
4.0
6.0
3.4
5.7
1.8
5.5
1.0
1.0
5.4
1 Calculated on a fully utilised basis with the two one-year extensions of the Revolving Credit Facility included.
the Group’s properties secured in these facilities at
31 March 2020 was £709m (31 March 2019: £698m) with a
corresponding loan to value of 43.8% (31 March 2019: 44.4%).
The average maturity of the Group’s investment facilities
at 31 March 2020 was 4.4 years (31 March 2019: 3.5 years),
increasing to 6.0 years on a fully utilised basis and following the
two one-year extensions of the Revolving Credit Facility. The
weighted average interest rate was 3.3% (31 March 2019: 3.9%).
The marginal cost of fully utilising the undrawn Revolving Credit
Facility was 2.2% (31 March 2019: 2.1%).
• Development facilities
This facility finances the over-station development at
Kaleidoscope, London EC1. The maturity of the Group’s
development facility at 31 March 2020 was 3.4 years
(31 March 2019: 4.4 years) with a weighted average interest
rate of 3.8% (31 March 2019: 6.3%).
• Joint venture facilities
We hold a number of investment and development properties
in joint venture with third parties and include in our reported
figures our share, in proportion to our economic interest, of the
debt associated with each asset. The average maturity of the
Group‘s share of bank facilities in joint ventures at 31 March
2020 was 1.8 years (31 March 2019: 2.8 years) with a weighted
average interest rate of 4.2% (31 March 2019: 4.0%).
UNSECURED DEBT
The Group’s unsecured debt, following the repayment of the
£100m Convertible Bond in June 2019, is £5.0m (31 March 2019:
£100.5m), as follows:
• Short-term working capital facilities
Drawn £5m (31 March 2019: £nil) of these facilities as additional
working capital for the Group.
CASH AND CASH FLOW
At 31 March 2020, the Group had £279m (31 March 2019: £382m)
of cash and agreed, undrawn, committed bank facilities including
its share in joint ventures, as well as £70m (31 March 2019: £25m)
of uncharged property on which it could borrow funds.
NET BORROWINGS AND GEARING
Total gross borrowings of the Group, including in joint ventures,
have decreased from £479.2m to £386.9m during the year to
31 March 2020. After deducting cash balances of £83.0m
(31 March 2019: £205.2m) and unamortised refinancing costs of
£6.0m (31 March 2019: £5.4m), net borrowings increased from
£268.6m to £298.5m. The see-through gearing of the Group,
including in joint ventures, increased from 47.3% to 49.9%.
See-through gross borrowings
See-through cash balances
Unamortised refinancing costs
See-through net borrowings
Shareholders’ Funds
31 March
2020
31 March
2019
£386.9m £479.2m
£83.0m £205.2m
£6.0m
£5.4m
£298.5m £268.6m
£598.7m £567.4m
See-through gearing – IFRS net asset value
49.9%
47.3%
HEDGING
At 31 March 2020, the Group had £285.8m (31 March 2019:
£363.0m) of fixed rate debt with an average effective interest
rate of 3.0% (31 March 2019: 3.7%) and £68.0m (31 March 2019:
£67.2m) of floating rate debt with an average effective interest
rate of 4.9% (31 March 2019: 5.7%). In addition, the Group had
£240m of interest rate caps at an average of 1.75% (31 March
2019: £240m at 1.69%). In our joint ventures, the Group’s share
of fixed rate debt was £nil (31 March 2019: £nil) and £33.1m
(31 March 2019: £49.0m) of floating rate debt with an effective
rate of 4.2% (31 March 2019: 4.0%), with interest rate caps set
at 1.5% plus margin on £32.3m (31 March 2019: £11.0m at 0.5%).
Fixed rate debt
– secured borrowings
– unsecured borrowings
– convertible Bond
– fair value of
Convertible Bond
Total
Floating rate debt
– secured
Total
In joint ventures
– floating rate
Total borrowings
31 March
2020
£m
Effective
interest
rate
%
31 March
2019
£m
Effective
interest
rate
%
280.8
5.0
–
–
3.0
3.3
–
–
262.5
–
100.0
0.5
285.8
3.0
363.0
68.0
353.8
33.1
386.9
4.91
3.4
67.2
430.2
4.2
3.5
49.0
479.2
3.6
–
4.0
–
3.7
5.71
4.0
4.0
4.0
1 This includes commitment fees on undrawn facilities. Excluding these would reduce
the effective rate to 3.0% (31 March 2019: 3.7%).
GOING CONCERN AND COVENANT COMPLIANCE
Helical’s going concern analysis is discussed in Note 1 of the
Notes to the Financial Statements. To the extent that this analysis
considers the collection of rent and the impact of this collection
on loan covenants, the position is outlined below.
Despite the impact of Covid-19, the rent collection for the
25 March 2020 quarter remained high and further progress has
been made since the quarter date, resulting in 92% of the rents
collected to date.
Rent collected (%)
31 March
2020
30 April
2020
84
87
31 May
2020
92
Of the remaining 8% uncollected, 5% is subject to an agreed
payment plan or deferral.
In addition, we have collected 97% of the service charge for the
25 March 2020 quarter.
The Group has income cover covenants on its Revolving Credit
Facility (RCF) and Aviva term loan and as a result of the strong
rent collection the March 2020 covenants were comfortably met.
RCF Covenant
Loan to Contracted Rental Value
Actual Interest Cover
Projected Interest Cover
Aviva Covenant
Historical Debt Service Cover
Projected Debt Service Cover
Threshold
Reported
March 2020
<12:1
>200%
>150%
9.3:1
307%
360%
Threshold
>200%
>200%
Reported
March 2020
246%
291%
For the RCF, £5.5m of rent will be charged for the June 2020 rent
quarter and we have rent deposits and bank guarantees of £9.7m
from tenants in buildings secured in this facility. For the Aviva
term loan, £2.0m of rent will be charged for the June 2020 rent
quarter and we have rent deposits and bank guarantees
of £1.8m from tenants in buildings secured to this loan.
The Group has adopted a going concern basis in preparing the
accounts for the year ended 31 March 2020.
TIM MURPHY
Finance Director
4 June 2020
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 62
RISK MANAGEMENT
Helical’s approach
to risk management
Risk is an integral part of the Group’s
business activities and Helical’s ability
to identify, assess, monitor and
manage its risks is fundamental
to its financial stability, continuing
performance and reputation.
When making business decisions, the Board of Helical assesses
all potential risks faced and considers the effect that such risks
could have on the achievement of the strategic priorities and
the long-term success of the Company.
The Board acknowledges that there are numerous risks faced
by the business and that these are often interrelated. However,
the Board also views the potential risks as opportunities which,
when handled appropriately, can drive performance. Therefore,
having an effective risk management framework is key to
support the delivery of the Group’s strategy.
The Board confirms that during this reporting period it has
carried out a robust assessment of the Group’s emerging and
principal risks (please see Audit and Risk Committee Report,
page 94, for details of the work undertaken by the Directors
during the reporting period). These risks and the Group’s
appetite for risk are discussed below.
RISK APPETITE
The Board has established procedures to determine the nature
and extent of the principal risks the Company is willing to take in
order to achieve its long-term strategic objectives. It is through
the enactment of these procedures that the Company is able to
set its risk appetite.
Helical’s risk appetite is driven by the business strategy.
The overall risk appetite is moderate to low and appropriate
mitigating actions are taken to reduce the severity of identified
risks into the acceptable range set by the Board. In determining
the risk appetite, the Board considers upside risks as well as
downside risks. Helical’s risk appetite is not static and is
reviewed by the Board at least twice a year.
Our appetite for risk in each principal risk category is set
out below:
STRATEGIC
FINANCIAL
OPERATIONAL
REPUTATIONAL
LOW
MEDIUM
HIGH
RISK CULTURE
Organisational structure
Risk culture
Behaviours
Personal ethics
Personal predisposition to risk
Tone from
the top
Tone from
the middle
Business
as usual
In accordance with good stewardship, the Board does not
inhibit sensible risk taking that is critical to growth. This approach
is embedded in the risk culture of the Group which is guided
by the Company’s Values (see page 82). The risk culture
aligns with the strategy and objectives of the business and
is embedded within the risk appetite.
ROLES & RESPONSIBILITIES
Whilst the Board is ultimately responsible for the management of
risk, the Group is structured in such a way that risk identification,
assessment, management and monitoring occur at all levels of
the Helical team. Roles and responsibilities with respect to risk
are well established and the close working relationships existing
between senior management and our Property Executives
enhance our ability to manage our risks.
The identification of risk occurs primarily at Board level and
as part of this process, the Risk Register and corresponding
Risk Heat Map (please see page 64) are produced. The
Board meets at least twice a year to assess the appropriateness
of the Risk Register, taking into account the macro-economic
environment, current projects and performance and
past experience.
The Board considers both prevailing and emerging risks in the
risk identification process. Horizon scanning is conducted, not
just by the Board or senior management, but every individual
staff member. Team meetings are conducted every two weeks
and provide a forum for information sharing with respect to
emerging risks. Helical’s collaborative environment and flat
management structure further support open discussion on
future and emerging risks.
63
Risk management approach
TOP-DOWN APPROACH
OVERSIGHT, IDENTIFICATION,
ASSESSMENT AND
MITIGATION OF RISKS
AT A STRATEGIC LEVEL
The Board has ultimate responsibility for risk management within the Group. The Board sets the risk
appetite of the Group, establishes a risk management strategy and is responsible for maintaining
a robust internal control system.
The Board continually monitors and reviews the risk management strategy to ensure that it remains
appropriate and consistent with the Group’s overall strategy and external market conditions.
The Audit and Risk Committee supports the Board by evaluating the effectiveness of the risk
management procedures and internal controls throughout the year.
The Executive Committee is responsible for the day-to-day operational application of the
risk management strategy and ensuring that all staff are aware of their responsibilities.
BOTTOM-UP APPROACH
OVERSIGHT, IDENTIFICATION,
ASSESSMENT AND
MITIGATION OF RISKS AT
AN OPERATIONAL LEVEL
Helical’s management team runs the business in line with the risk management strategy established
by the Board and reports to the Board on how it operates.
Both the small team size and the flat management structure allow the Executive Committee to have close
contact with all aspects of the business and ensure that the identification and management of risks and
opportunities are at the forefront of decision makers’ minds.
Individual asset managers are responsible for identifying and assessing risks relating
to the properties they manage and reporting to the Executive Committee as appropriate.
All staff members are responsible for complying with risk management procedures and internal
control measures, reporting to the Executive Committee as necessary.
Risk management framework
Helical’s Risk Management
Framework is made up of
eight components which
all function to create an
effective system of risk
management and internal
control. It is through the
application of the Risk
Management Framework
that clear procedures for risk
identification, assessment,
measurement, mitigation,
monitoring and reporting
are aligned with the Group’s
strategic aims and the
Board’s risk appetite.
Monitoring
Risk
culture
Information &
communication
E
C
N
A
N
R
E
V
O
G
Control
activities
Internal
environment
d
n
a
g
n
i
r
o
t
i
n
o
m
l
a
n
o
i
t
a
r
e
p
O
y
t
i
l
i
b
i
s
n
o
p
s
e
r
g
n
i
t
r
o
p
e
r
Board
Audit and Risk
Committee
Executive
Committee
Management
Team
Asset
Managers
All staff
Risk
response
d
n
a
n
o
i
t
a
t
n
e
m
e
p
m
l
i
c
i
g
e
t
a
r
t
S
y
t
i
l
i
b
i
s
n
o
p
s
e
r
e
c
n
a
i
l
p
m
o
c
Objective
setting
G
O
V
E
R
N
A
N
C
E
Risk
identification
Risk
culture
Risk
assessment
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT
64
RISK MANAGEMENT
CONTINUED
65
Mapping our principal risks
OUR PRINCIPAL RISKS
PRINCIPAL RISKS
CHANGE
Risk
Description
Mitigating actions
Changes in risk severity
Strategic
Risks
1 The Group's strategy is inconsistent with the market
2 The Group carries out significant development projects
3 Property values decline/reduced tenant demand for space
4 Political risk
5 Sustainability risk*
6 Availability and cost of bank borrowing and cash resources
7 Breach of loan covenants
8 Employment and retention of key personnel
9 Reliance on key contractors and suppliers
10 Inability to asset manage property assets
11 Health and safety risk
12 Business disruption and cyber security
13 Poor management of stakeholder relations
14 Non-compliance with prevailing legislation, regulation and best practice
Financial
Risks
Operational
Risks
Reputational
Risks
=
=
=
=
=
=
=
12
d
o
o
h
i
l
e
k
L
i
3
4
6
1
9
5
13
8
7
2
11
10
14
*This risk has been separately identified this year.
Impact
VIABILITY STATEMENT
HELICAL’S LONG-TERM PROSPECTS
With over 35 years’ experience as a
property company, the Group has
navigated multiple property cycles.
These cycles present challenges and
opportunities and it has been through
successfully responding to both that
Helical has grown to become a highly
respected London office developer and
asset manager. During this time, it has also
built an extensive network of trusted
partners who provide support, capital
and access to new opportunities.
The Group has a high quality portfolio,
located in growing areas of London and
Manchester, and is delivering modern
space which appeals to occupiers who
need to attract the best talent. Helical has
an excellent relationship with the financial
institutions who provide its debt and,
following the refinancing of its primary
debt facility earlier in the year, has secured
long-term and flexible financing.
It is from this strong position that the
Board has considered the Company’s
future viability.
TIME PERIOD ASSESSMENT
The Directors have assessed the viability
of the Group for a period of five years to
March 2025, being the period for which
the Board regularly reviews forecasts, and
which encompasses the lifetime of the
Group’s major development projects. The
Board considers the future performance
of the Group beyond five years, but less
certainty exists over the forecasting
assumptions beyond this period.
REVIEW PROCESS
The viability of the Group is reviewed
throughout the year and through multiple
channels, detailed below:
• The strategic direction of the Group is
established by the Board once a year
and is captured in the Business Plan
which forms the basis of the detailed
budgets and actions for the year;
• The Board and Audit and Risk
Committee review the principal risks
of the Group at least twice a year,
reassessing the severity of each risk and
determining the Group’s proposed
response and planned mitigation;
• The five-year forecasts for the Group are
updated and reviewed by the Board and
Executive Committee on a quarterly
basis; and
• Management reviews the short-term
(three–four months) cash requirements
of the Group on a monthly basis and
cash balances and movements are
monitored daily.
PRINCIPAL RISKS AND SENSITIVITY
ANALYSIS
In making its assessment, the Board
considers the Group’s principal risks
and assesses their combined potential
impact in severe, but plausible, downside
scenarios together with the likely
effectiveness of mitigating actions that
the Group has at its disposal.
The assessment included the following
key assumptions:
• Rental income – whilst the Group has a
WAULT of 7.1 years across its portfolio,
both void and rent-free periods have
been included where a lease term ends
within the period of review;
• Debt financing – the Company’s primary
source of financing is its £400m
Revolving Credit Facility which expires
in 2024, however, this facility has two
one-year extension options which have
been assumed to have been exercised;
• Development and asset management –
these activities require capital
expenditure, and this has been included
for both specific projects and general
ongoing works; and
• Administration expenditure and finance
costs – administration expenditure has
been subject to inflationary increases.
The hedging instruments the Group
have in place mitigates the impact of any
future changes to the interest base rate.
The most relevant risks and their potential
impact, along with the sensitivity analysis
performed, are highlighted below:
Risk areas
Covid-19
The impact of
Covid-19 is expected
to have the most
material effect in the
next 12 months and
is considered in the
going concern review
on page 115.
Principal risks
• Property values
decline/reduced
tenant demand
for space
• Political risk
• Breach of loan
covenants
• Health and
safety risk
• Business
disruption and
cyber security
UK withdraws from the EU
• Property values
decline/reduced
tenant demand
for space
• Breach of loan
covenants
• Political risk
A disorderly or
disruptive departure
from the EU could
adversely affect the
business case for
investment in the
UK, depressing the
property market and
causing a decline in
property values. This
could in turn result
in potential breaches
in the loan to value
covenants. The
impact of a fall in
property value of
25% was assessed.
Based on the outcomes of the procedures
outlined above and other matters
considered by the Board, the Directors
hold a reasonable expectation that the
Group will be able to continue in operation
and meet its liabilities as they fall due over
the five-year period to 31 March 2025.
STRATEGIC RISKS
Strategic risks are external risks that could prevent the Group delivering its strategy. It is these risks which principally impact decision-making with
respect to the purchasing or selling of property assets.
The Group’s strategy
is inconsistent with
the market
Link to Strategy
Growth
YoY change
=
Risks arising from the
Group’s significant
development projects
Link to Strategy
Property
YoY change
Property values
decline/reduced
tenant demand
for space
Link to Strategy
Property
YoY change
Changing market conditions could
hinder the Group’s ability to buy
and sell properties envisioned in its
strategy. The location, size and mix
of properties in Helical’s portfolio
determine the impact of the risk.
If the Group’s chosen markets
underperform, the impact on
the Group’s liquidity, investment
property revaluations and rental
income is greater.
The Group carries out significant
development projects over a
number of years and is therefore
exposed to fluctuations in the
market and tenant demand levels
over time.
The property portfolio is at risk
of valuation falls through changes
in market conditions, including
underperforming sectors or
locations, lack of tenant demand
or general economic uncertainty.
Political risk
Link to Strategy
Growth
YoY change
There is a risk that regulatory and
tax changes could adversely affect
the market in which the Group
operates and changes in legislation
could lead to delays in receiving
planning permission.
There remains uncertainty over the
outcome of the United Kingdom
leaving the European Union.
The results could adversely affect
the case for investment in the UK,
depressing the property investment
and occupational market, negatively
impacting the Group’s performance.
Sustainability risk
Link to Strategy
Growth
The Group is exposed to
sustainability risks such as climate
and legislation changes related to
ESG issues.
Management constantly monitors the market and
makes changes to the Group’s strategy in light of market
conditions. The Group conducts an annual strategic review
and maintains rolling forecasts, with inbuilt sensitivity
analysis to model anticipated economic conditions.
The Board considers the
risk to have remained
broadly the same as it has
benefitted from a resilient
office market.
The Group’s management team is highly experienced
and has a strong track record of understanding the
property market.
Due to the Group’s small management team, strategic
change can be implemented quickly.
Management carefully reviews the risk profile of
individual developments and in some cases builds
properties in several phases to minimise the Group’s
exposure to reduced demand for particular asset classes
or geographical locations over time. The Group carries
out developments in partnership with other organisations
and pre-lets space to reduce development risk, where
considered appropriate.
The Group has completed
the majority of its
developments and has
made significant letting
progress in the past year,
reducing the risk profile of
the development portfolio.
The Group’s property portfolio has tenants from diverse
industries, reducing the risk of over-exposure to one
sector. We carry out occupier financial covenant checks
ahead of approving leases in order to limit our exposure
to tenant failure. Management reviews external data,
seeks the advice of industry experts and monitors the
performance of individual assets and sectors in order
to dispose of non-performing assets and rebalance the
portfolio to suit the changing market. Management
regularly models different property revaluation scenarios
through its forecasting process in order to prepare a
considered approach to mitigating the potential impact.
Management seeks advice from experts to ensure it
understands the political environment and the impact
of emerging regulatory and tax changes on the Group.
It maintains good relationships with planning consultants
and local authorities. Where appropriate, management
joins with industry representatives to contribute to policy
and regulatory debate relevant to the industry.
The Group has established a Sustainability Committee,
chaired by Matthew Bonning-Snook, which will review
the Group’s approach and strategy for sustainability.
The Committee will also set appropriate targets and
KPIs which will be reported on annually.
The Group benchmarks its ESG reporting against various
industry indicators and instructs an external expert to
perform gap analysis on its performance.
For March 2020, a Sustainability Strategy and a key
performance review document have been produced
to clearly demonstrate the Group’s approach to
sustainability and the associated risks.
The stabilisation of the
political environment post
the general election had
decreased this risk,
however Covid-19 has
resulted in a high level
of macro-economic
uncertainty which is
adversely impacting many
businesses, particularly
retail and leisure. As such,
this risk has increased on
the prior year.
The outcome of the
general election has
created a more politically
stable outlook and set a
clearer pathway for
Brexit over the next year.
Against this, Covid-19 has
resulted in the Government
taking significant measures
to respond to this crisis.
Overall this risk is
considered to have
decreased on the
prior year.
This risk has been
separately identified this
year and reflects our
stakeholders’ increasing
focus on sustainability.
We also recognise that
the anticipated impact
of carbon emissions and
climate change continues
to increase and that
businesses that are not
responding to these risks
are likely to experience
operational and
reputational damage.
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT
66
RISK MANAGEMENT
CONTINUED
Risk
Description
Mitigating actions
Changes in risk severity
Risk
Description
Mitigating actions
The Group has £279m
of headroom (cash plus
undrawn facilities) at
31 March 2020.
Business disruption
and cyber security
Link to Strategy
Property
YoY change
67
Changes in risk severity
The outbreak and spread
of Covid-19 has created
global economic
uncertainty and we have
significantly increased the
impact and likelihood of
this risk. The risk to cyber
security has also increased
as Covid-19 has led to
increased fraud attempts.
FINANCIAL RISKS
Financial risks are those that could prevent the Group from funding its chosen strategy, both in the long and short term.
Availability and cost
of bank borrowing
and cash resources
Link to Strategy
Financing
YoY change
=
The inability to roll over existing
facilities or take out new borrowing
could impact on the Group’s ability
to maintain its current portfolio and
purchase new properties. The Group
may forego opportunities if it does
not maintain sufficient cash to take
advantage of them as they arise.
The Group is at risk of increased
interest rates on unhedged
borrowings.
Breach of loan
covenants
Link to Strategy
Financing
YoY change
If the Group breaches debt
covenants, lending institutions may
require the early repayment of
borrowings.
The Group maintains a good relationship with many
established lending institutions and borrowings are
spread across a number of these.
Funding requirements are reviewed monthly by
management, who seek to ensure that the maturity
dates of borrowings are spread over several years.
Management monitors the cash levels of the Group
on a daily basis and maintains sufficient levels of cash
resources and undrawn committed bank facilities
to fund opportunities as they arise.
The Group hedges the interest rates on the majority
of its borrowings, effectively fixing or capping the rates
over several years.
Covenants are closely monitored throughout the year.
Management carries out sensitivity analyses to assess
the likelihood of future breaches based on significant
changes in property values or rental income (see our
Viability Statement).
OPERATIONAL RISKS
Operational risks are internal risks that could prevent the Group from delivering its strategy.
Employment and
retention of key
personnel and
business relationships
The Group’s continued success is
reliant on its management and staff
and successful relationships with its
joint venture partners.
Link to Strategy
People
YoY change
=
Reliance on key
contractors and
suppliers
Link to Strategy
People
YoY change
=
Inability to asset
manage property
assets
Link to Strategy
Property
YoY change
=
The Group is dependent on the
performance of its key contractors
and suppliers for successful delivery
of its development property assets.
The Group relies on external parties
to support it in asset managing its
properties, including planning
consultants, architects, project
managers, marketing agencies,
lawyers and managing agents.
The senior management team is very experienced
with a high average length of service. The Nominations
Committee and Board review succession planning issues
and remuneration is set to attract and retain high calibre
staff. Staff are encouraged to undertake personal
development and training courses, supported by
the Company.
The Group nurtures well established relationships with
joint venture partners, seeking further projects where
it has had previous successful collaborations.
The Group actively monitors its development projects
and uses external project managers to provide support.
Potential contractors are vetted for their quality, health and
safety record and financial viability prior to engagement.
Their performance is closely monitored throughout the
development process, with bi-weekly reporting to
management. The Group often works with contractors
with whom it has previously worked successfully.
The Group has a highly experienced team managing its
properties, who regularly conduct on-site reviews and
monitor cash flows against budget. The Group seeks
to maintain excellent relationships with its specialist
professional advisors, often engaging parties with
whom it has successfully worked previously. Management
actively monitors these parties to ensure they are
delivering the required quality on time.
While the Group has let
vacant space in the period,
the impact of Covid-19,
and the lockdown
response in particular,
has put businesses
under cash flow pressure.
This in turn may adversely
impact rent collection and,
therefore, debt income
covenants may come
under pressure.
The risk has remained
broadly similar due to
high staff retention levels
and maintaining strong
business relationships.
No change has been
noted or is expected.
No change has been
noted or is expected.
Health and safety risk
Link to Strategy
Property
YoY change
The nature of the Group’s operations
and markets expose it to potential
health and safety risks both
internally and externally within the
supply chain.
The Group reviews and updates its Health & Safety
Policy regularly and it is approved by the Board annually.
Contractors are required to comply with the terms of
our Health & Safety Policy and the Group engages an
external health and safety consultant to review contractor
agreements prior to appointment and ensures they have
appropriate policies and procedures in place, then
monitors the adherence to such policies and procedures
throughout the project’s lifetime.
Whilst the level of the
Group’s development
activity is expected
to be lower, Covid-19
has presented
additional challenges
in maintaining safe
working environments.
The Executive Committee reviews the report by the
external consultant every month and the Board reviews
them at every scheduled meeting. The internal asset
managers carry out regular site visits.
The Group relies on Information
Technology to perform effectively
and a cyber-attack could result in IT
systems being unavailable, adversely
affecting the Group’s operations.
Commercially sensitive and personal
information is electronically stored by
the Group. Theft of this information
could adversely impact the Group’s
commercial advantage and result in
penalties where the information is
governed by law (GDPR and Data
Protection Act 2018).
The Group is at risk of being a
victim of social engineering fraud.
An external event such as extreme
weather, environmental incident,
power shortage, pandemic or
terrorist attack could cause
significant damage, disruption to
the business or reputational damage.
The Group engages and actively manages external
Information Technology experts to ensure IT systems
operate effectively and that we respond to the evolving
IT security environment. This includes regular off-site
backups and a comprehensive disaster recovery process.
The external provider also ensures the system is secure
and this is subject to routine testing including bi-annual
disaster recovery tests and annual Cyber Essential Plus
Certification.
There is a robust control environment in place for
invoice approval and payment authorisations including
authorisation limits and a dual sign off requirement for
large invoices and bank payments.
The Group provides training and performs penetration
testing to identify emails of a suspicious nature, ensuring
these are flagged to the IT providers and ensure
employees are aware they should not open attachments
or follow instructions within the email.
The Group has a disaster recovery plan, on-site security
at its properties and insurance policies in place in order to
deal with any external events and mitigate their impact.
REPUTATIONAL RISKS
Reputational risks are those that could affect the Group in all aspects of its strategy.
Poor management of
stakeholder relations
Link to Strategy
Growth
YoY change
=
The Group risks suffering from
reputational damage resulting
in a loss of credibility with key
stakeholders including Shareholders,
analysts, banking institutions,
contractors, managing agents,
tenants, property purchasers/sellers
and employees.
Non-compliance with
prevailing legislation,
regulation and best
practice
Link to Strategy
Growth
YoY change
=
The nature of the Group’s operations
and markets expose it to financial
crimes risks (including bribery and
corruption risks, money laundering
and tax evasion) both internally and
externally within the supply chain.
The Group is exposed to the
potential risk of acquiring or
disposing of a property where the
owner/ purchaser has been involved
in criminal conduct or illicit activities.
The Group would attract criticism
and negative publicity were any
instances of modern slavery and
human trafficking identified within
its supply chain.
The Group would attract criticism
and negative publicity if instances
of non-compliance with GDPR and
the Data Protection Act 2018 were
identified. Non-compliance may
also result in financial penalties.
The Group believes that by successfully delivering its
strategy and mitigating its strategic, financial and
operational risks its good reputation will be protected.
This risk remains and
is expected to remain
broadly similar.
This risk remains and
is expected to remain
broadly similar.
The Group regularly reviews its strategy and risks to
ensure it is acting in the interests of its stakeholders.
The Group maintains a strong relationship with investors
and analysts through regular meetings.
Management closely monitors day-to-day business
operations and the Group has a formal approval
procedure for all press releases and public
announcements.
A Group Disclosure Policy and Share Dealing Code,
Policy & Procedures have been circulated to all staff in
accordance with the EU Market Abuse Regulation (MAR).
The Group’s anti-bribery and corruption and
whistleblowing policies and procedures are reviewed and
updated annually and emailed to staff and displayed on
our website. Projects with greater exposure to bribery
and corruption are monitored closely.
The Group avoids doing business in high risk territories.
The Group has related policies and procedures designed
to mitigate bribery and corruption risks including:
Know Your Client checks; due diligence processes;
capital expenditure controls; contracts risk assessment
procedures; and competition and anti-trust guidance.
The Group engages legal professionals to support these
policies where appropriate.
All employees are required to complete anti-bribery and
corruption training and to submit details of corporate
hospitality and gifts received.
All property transactions are reviewed and authorised by
the Executive Committee.
Our Modern Slavery Act statement, which is prominently
displayed on our website, gives details of our policy and
our approach.
The Group monitors its GDPR and Data Protection Act
2018 compliance to ensure appropriate safeguards,
policies, procedures, contractual terms and records
are implemented and maintained in accordance with
the regulation.
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 68
SUSTAINABILITY AT HELICAL
Focus on
Sustainability
MATTHEW BONNING-SNOOK
Property Director & Chair of
the Sustainability Committee
It is imperative that sustainability is at the core of all activities at Helical.
As owners and creators of exciting design-led buildings we acknowledge
that our activities have a direct and an indirect environmental, social and
economic impact. We also recognise that there is a climate crisis and as
a responsible business we need to ensure we are minimising our impact
on the environment. As we move towards a net zero carbon world we are
in a position where we can enact change in the way buildings are built,
managed and operated. By creating measurable carbon targets, and
adopting low carbon technologies and green energy contracts, Helical
is well placed to become a net zero carbon business in the future.
As part of our continued focus on sustainability, I am happy to announce we
have released our Sustainability Strategy “Built for the Future”, which sets out
our long-term vision for “Our Environment, Our Communities and Our People”
to enable us to become a truly sustainable business.
In developing and refurbishing buildings, we seek to provide flexible and smart
spaces which encourage creativity and collaboration, increasing productivity
and meeting our customers’ needs both now and in the future. We invest
significantly in high quality public realm and building amenities, creating unique
places where communities can thrive, boosting their health and wellbeing.
SUSTAINABILITY REPORTS
Alongside our Annual Report
and Accounts we have
also published our new
Sustainability Strategy
“Built for the Future” and our
Sustainability Performance
Report. Please refer to our
Company website to view
these reports.
69
2019: 9%
2019: 59%
2019: 55%
2019: 8/15
+7%
2019: 699
+29%
2019: £34,000
+32%
Performance
in the year
4%
reduction in our like-for-like portfolio GHG emissions
(Scope 1 and 2)
62%
of waste recycled across our managed portfolio
65%
of our assets achieved an EPC rating of “B”
8/14
office buildings certified or targeting BREEAM “Excellent”
c.900
hours of employee training
£45,000
in charity donations
Helical plcAnnual Report and Accounts 2020STRATEGIC REPORTHelical plcAnnual Report and Accounts 2020
70
SUSTAINABILITY AT HELICAL
CONTINUED
71
Through the entire lifecycle of our
buildings, we continue to look for
innovative ways to reduce our
carbon emissions and running costs
for the benefit of both Helical and
our tenants.
• Checklists to ensure minimum sustainability requirements
are applied across our 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 our corporate goals in the
construction stage; and
• Effective oversight through quarterly meetings of the
Sustainability Committee, use of external sustainability
advisors and regular meetings with our principal managing
agents to ensure effective delivery against our objectives
and targets.
The management system has been designed specifically to
reflect the flexibility of Helical’s business model. It also reflects
the key role that Helical’s partners play in delivering enhanced
sustainability outcomes in all its business ventures.
SUSTAINABILITY COMMITTEE
In September 2019, a Sustainability Committee was formally
appointed, chaired by Matthew Bonning-Snook, our Property
Director. The Committee meets on a quarterly basis to
review and set targets, policies and our overall approach to
sustainability. The Committee reports to both the Executive
Committee and the Board.
MEMBERS
Matthew Bonning-Snook
Property Director & Chair of Sustainability Committee
Laura Beaumont
Sustainability Executive
John Inwood
Head of Asset Management
Pavlos Clifton
Senior Development Executive
Lois Robertson
Office Manager
We acknowledge that our activities have a direct and indirect
environmental, social and economic impact. Through the entire
lifecycle of our buildings we continue to look for innovative ways
to reduce our carbon emissions. Our proactive approach seeks
to maximise our asset performance, deliver resource efficiency
and enable our tenants to use their spaces as effectively as
possible. We take great pride in developing high quality public
realm and believe creating places where communities can work,
meet and socialise is key in creating a sustainable building.
To provide transparency when reporting our sustainability
performance, we use a number of external benchmark indices
and ratings including:
— FTSE4Good;
— Carbon Disclosure Project;
— GRESB; and
— ISS ESG
We also align our reporting with EPRA Best Practice in
Sustainability Reporting Guidelines. Maintaining listed status
on these benchmark indices remains a key priority for Helical,
and informs our evolving approach to sustainability.
OUR APPROACH
We recognise that there is a direct link between sustainability
and shareholder value through enhancing the long-term
value of the business. In response to this we have created a
Sustainability Strategy “Built for the Future”. Our strategy sets
out our long-term vision for the business, our approach to
sustainability and our long-term targets. The document works
alongside our Environmental Management System to ensure
we continue to effectively monitor, control and improve our
environmental performance.
Our Sustainability Strategy and Environmental Management
System are available on the Company’s website and key
elements of the system include:
• Our Environmental Policy which sets out the Group’s high-level
commitment across a number of impact areas. These are
reviewed annually by the Board and are implemented by the
Sustainability and Executive Committees;
• Annual (and ongoing) performance targets to enable Helical
to focus its efforts throughout the year on measurable and
achievable performance goals;
• Key Performance Measures to monitor progress towards these
targets and to ensure we can report in line with any investor
disclosure requirements;
Our people
Key priorities
— Attract and retain the
best people
— Maintain strong relationships
with our business partners
By ensuring that Helical is a diverse
business, the Group benefits from a
variety of experiences and perspectives,
stimulating creativity and contributing
to our open and cohesive culture.
OUR APPROACH
Not only do we offer our staff a competitive remuneration and
benefits package, but we also support part-time, job-sharing and
flexible working requests where possible. During the year under
review, 16.5% of the workforce carried out their roles on a part-time
basis in order to meet family commitments. We believe this
competitive approach to remuneration, alongside an attractive
working environment, has continued to keep staff turnover low
at 10.3%, with an average length of service of 10.0 years.
To ensure a highly skilled and experienced team, Helical
continues to evaluate training needs in line with business
objectives. Our employees are actively encouraged to attend
training that enhances their knowledge and benefits the
business. Over the year, our staff undertook c.900 hours of
training and development, an average of 4.2 days per employee.
We promote wellbeing through a number of benefits including
a paid for gym membership, medical insurance, a cycle-to-work
scheme and the availability of fruit and healthy snacks at
the office.
As Helical operates with a small team, our ability to establish
excellent long-term relationships with our advisors, agents and
other suppliers is very important. As part of this, fair treatment of
suppliers remains a key priority for Helical and the Group’s policy
is to settle all agreed liabilities as soon as possible and within the
terms established with them.
OUR EMPLOYEES
Helical has a small core team, working closely with trusted
partners across multiple disciplines. Our success is built
on the skills of our staff and therefore finding; developing;
rewarding; and retaining our people is a key element of our
corporate strategy.
OUR CULTURE
At Helical we encourage an open and inclusive culture and
we believe this creates a collaborative and focused approach
to achieving the Group’s aims and aspirations, encouraging
individuals to proactively suggest ideas and opportunities for
the benefit of the business and the people. This culture is further
supported and encouraged through Helical’s Values. Please see
the Governance Review on page 82 for further details of these.
Diversity is important in supporting Helical in achieving its
strategic aims. By ensuring that Helical is a diverse business,
the Group benefits from a variety of experiences and
perspectives, stimulating creativity and contributing to
our open and cohesive culture.
OUR PEOPLE
AS AT 31 MARCH 2020
75%
100%
63%
48%
25%
The Board1
Average length
of service (years)
Male
Female
37%
8
8.2
Executive Directors1 3
Average length
of service (years)
25.6
Executives1
Average length
of service (years)
16
7.8
52%
All employees1 29
Average length
of service (years)
10.0
1 Total as at 31 March 2020
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 72
SUSTAINABILITY AT HELICAL
CONTINUED
Our
environment
Key priorities
— Transition to a low
carbon business
— Buy, use and re-use
resources efficiently
In line with the mandatory requirement for reporting the
total energy consumption for the year to 31 March 2020 is
10,345,777 kWh, including electricity, natural gas, diesel
and petroleum fuels. Helical completed the second phase
assessment in accordance with the Government Energy Savings
Opportunities Scheme (ESOS). Based on the findings from the
assessment several key areas are currently under investigation
across our portfolio to improve the energy efficiency of our
assets. These are as follows:
• Increasing coverage of LED lighting;
• Developing existing energy management practices;
• Increasing the coverage of climate and lighting controls;
• Considering Low and Zero Carbon (LZC) technologies,
such as photovoltaics; and
• Active management of ventilation and heating strategies.
Adhering to the mandatory requirement for reporting on its
greenhouse gas emissions, Helical provides this disclosure below
which has been based on all the data that has been made
available to us.
GREENHOUSE GAS (GHG) EMISSIONS REPORTING
It should be noted that due to
the impact of Covid-19 it has
not been possible to gather
consumption information for
some of our development sites.
Although every effort has been
made to quantify GHG emissions
for construction related activities
the impact of the omitted
emissions is not considered
to be material.
The table on the right highlights
that overall GHG emissions have
decreased by 4% year-on-year.
Due to the changing portfolio,
the like-for-like GHG emissions are
only reported for a small number
of properties (6 properties for
electricity and 3 properties
for gas). The decrease of
over 4% demonstrates that
the improvements made from
increased awareness and
engagement with tenants on
consumption and energy efficient
design measures (such as LED
light fittings) have proved
effective across the portfolio
in addition to the effects from
decarbonisation of the UK grid.
OUR APPROACH
The Group’s corporate commitments to environmental issues are
outlined in our Sustainability Strategy “Built for the Future” and
the Group’s Environmental Policy, both of which can be found
on the Company’s website.
Our strategy and supporting policy set out Helical’s
commitments across a range of impact areas including its
development and property management activities. The Group
sets itself targets to guide its environmental responsibilities,
including: resource use and waste production; pollution;
biodiversity; timber sourcing; flood risk and sustainable design
and construction.
Full details of our performance against the targets during the
year are available in the Environment section of the Company’s
website. Due to changes in the portfolio over the year, it is
difficult to provide meaningful overall like-for-like statistics.
However, of the properties that can be compared we have seen
a stable reduction across the electricity consumption (-2%) and
an increase in gas (19%). We will focus on gas reduction going
forward, as we have successfully done for electricity over the
past 12 months.
The Group continues to offer recycling facilities at the larger of
its managed assets and there has been great success in working
with tenants to roll out initiatives to avoid single use plastics
including the use of paper straws, biodegradable cutlery and
reusable cup discounts. Most properties exceeded the ongoing
target of a recycling rate of 50% including; The Warehouse and
The Tower; The Loom; 25 Charterhouse Square; 90 Bartholomew
Close in London and Fourways in Manchester. All properties
where waste is collected achieved 100% diversion from landfill.
Going forward at The Tootal Buildings and 35 Dale Street in
Manchester we will look to increase the scope of their site
recycling to exceed the Helical target.
73
Alongside our Annual Report we
have also published a Sustainability
Performance Report. This report
includes further information and data
on our sustainability performance
in the year. A copy of this report can
be found on the company website.
Based on the verification procedures detailed in their full
statement. Avieco have found no evidence to suggest that
Helical’s GHG statement and associated environmental indicators
are materially incorrect and confirm they have been prepared
in accordance with the relevant guidance and legislation.
This conclusion should be read in conjunction with Avieco’s
full ISO 14064:3 limited verification statement available in the
Sustainability Performance Report 2020 on our website.
THIRD PARTY VERIFICATION
In March 2020, Helical plc appointed Avieco Ltd to perform
third party verification of our greenhouse gas (GHG) emissions
statement for the year 1 April 2019 to 31 March 2020.
The objective was to verify that Helical’s underlying raw data,
reporting processes, application of international standards and
publicly reported GHG emissions and environmental indicators
are free from material misstatement. The aim was to provide
greater confidence to stakeholders of the relevance,
completeness, consistency, transparency and accuracy
of the environmental information disclosed.
Scope 1
Scope 2
Direct emissions include any gas data for landlord controlled
parts and fuel use for Group owned vehicles. Fugitive
emissions from air conditioning are included where it is
Helical’s responsibility within the managed portfolio, when
the data is available.
Indirect energy emissions include purchased electricity
throughout the Group’s operations within landlord controlled
parts. Electricity used in refurbishment projects has been
recorded separately where appropriate. 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.
Greenhouse gas (GHG) emissions (tonnes CO2e) are set out below for the year:
Scope 1: Direct emissions
Scope 2: Indirect emissions
Total all scopes
Emissions Intensity based on floor area:
Reporting year
2020
2019
Total portfolio Tonnes CO2e Like-for-like portfolio Tonnes CO2e
Year ended
31.3.20
Year ended
31.3.19
Year ended
31.3.20
Year ended
31.3.19
642
1,789
2,431
739
1,794
2,533
250
666
916
362
959
1,321
Scope 1 & 2
Tonnes
CO2e
2,431
2,533
Portfolio
Floor area
(GIA) m2
167,333
171,954
Scope 1 & 2
Tonnes
CO2e/m2
0.015
0.015
Net Rental
Income
£m
27.8
24.6
Scope 1 & 2
Tonnes
CO2e/£m
87.5
102.9
The specific target set by Helical is to reduce GHG emissions by 2% pa in its principal managed assets. It is challenging to produce meaningful analysis of year on year
performance due to the changes in the portfolio from acquisitions and divestments, increased occupancy and the ongoing refurbishment of the component assets.
Like-for-like GHG emissions have seen an improvement of 4% on the 2019 baseline performance and achieved the 2% reduced GHG emissions target.
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT
74
SUSTAINABILITY AT HELICAL
CONTINUED
Our
communities
Creating and supporting communities is at the heart of our
development activities and is a priority for Helical. We recognise
that the buildings that we own and develop have an impact on
the local environment and the communities that live and work
there. We create a calendar of events and initiatives to ensure we
are positively engaging with local residents, schools, community
groups and businesses.
The health and wellbeing of our tenants is a priority for how
we operate and we understand the importance of creating
an environment that promotes the productivity, creativity and
happiness of our tenants. One tool we use to achieve this is
through our annual tenant survey. The survey reveals what
tenants are looking for from their spaces and enables us to
respond accordingly. Of the tenants surveyed, 98% were pleased
to be in our buildings. We also have building specific events to
promote health and wellbeing and also encourage active
lifestyles with cycle and shower facilities.
ACTIVITIES IN THE YEAR
As part of our commitment
to the areas in which we
operate, we regularly support
community and tenant
initiatives. Some examples
from the year to 31 March
2020 include:
THE BOWER, LONDON EC1
At The Bower, London EC1,
we held a number of One
Great Day events raising over
£1,200 for the Great Ormond
Street Charity. In addition to
this we also donated £1,000 to
St Monica’s School in Hackney
and £750 to Spitalfields Crypt
Trust. Throughout the year
we held several tenant social
events along with our annual
table tennis competition for all
occupiers. We also continue to
support health and wellbeing
by hosting a bicycle servicing
event and inviting a health
professional to hold a Nutrition
& Lifestyle Medicine Clinic.
Key priorities
— Bring social, economic and
environmental benefits to the
areas in which we operate
— Design and operate our
buildings to support health
and wellbeing
35 DALE STREET,
MANCHESTER
35 Dale Street, Manchester
hosted a Wellness Week in July
to encourage exercise with
discounts at local gyms, tenant
yoga sessions and a table
tennis tournament. We
continued the health initiative
in January by supporting
Veganuary and by holding a
vegan bake sale for charity
along with many other
Veganuary events. For The
Samaritans ‘Brew Monday’
campaign, we offered free
plant based hot drinks to our
tenants. Both events served to
encourage colleagues to
connect and engage with
one another.
THE LOOM, LONDON E1
At The Loom, London E1, we
continue to send a weekly
newsletter to tenants detailing
upcoming events and during
the year the Macmillan Coffee
Morning raised over £600, we
also hosted a health “pop-up”
which offered corporate rates
on gym memberships and free
advice on health and nutrition.
75
LANDAID EMERGENCY COVID-19 APPEAL
Helical is very pleased to be a Founding Partner of the
LandAid Emergency Covid-19 Fund. The fund aims to
raise £1m to support young homeless people during the
Covid-19 global crisis.
The fund will enable charities up and down the country to meet
the needs of young homeless people throughout this crisis, from
basic necessities to emergency support including: food; a safe
space to isolate or recuperate, money to pay bills; and vital
mental health support. Every penny raised will go directly to
charities helping vulnerable young people who are suffering
severe hardship as a result of Covid-19.
“At this critical time Helical are pleased to
support this great initiative by LandAid to
provide emergency food, accommodation
and safety to vulnerable young people
who have nowhere else to turn for help.”
GERALD KAYE
CEO
In November 2019 the
Sustainability Committee was
invited to view the “secret”
garden at St Bartholomew
The Great in Smithfield.
The church is at the heart of
both our Barts Square and
Kaleidoscope developments
and through the help of local
volunteers and the donation
of materials from our site
contractors the garden has
been completely revived.
“ We have opened up
the view from the
street and the garden
now has a huge sensory
footprint to the
thousands of residents,
workers and tourists
who pass-by in a year:
the sight, the smell,
the colours.”
BERNADETTE SKEHAN
LOCAL RESIDENT
EQUIEM
In October 2019 we announced the launch of Equiem, our
tenant engagement app, as part of our ongoing commitment
to creating strong communities. We have initially launched this
app at all of our Manchester properties. The app incorporates a
number of features including: our building information; meeting
room bookings; deals and offers; news and events; and message
boards. Our aim is to elevate the tenants’ experiences of our
buildings, enabling them to easily connect to amenities, services
and experiences, increasing their enjoyment, productivity, and
sense of community.
The app has proven to be a particularly valuable tool throughout
the Covid-19 crisis. The app has been used to keep tenants up to
date on government guidelines and a number of resources are
available on how best to work from home and stay connected
with colleagues.
“It’s a great tool for us to flag up things that
are going on to other users of the building.”
MANCHESTER TENANT
We continue to run The
Helical Bursary which was
established in 2017/18 to
support Real Estate and
Planning students studying
at Henley Business School,
University of Reading. To date
we have funded £15,000
towards tuition and living
costs for a current student.
TOOTAL BUILDINGS,
MANCHESTER
At the Tootal Buildings,
Manchester, we held a very
successful Christmas event.
Many tenants attended for
mulled wine and mince pies
and listened to a local choir.
The event raised £90 for a
local charity and over 100 toys
were donated to The Mission
Christmas charity.
KALEIDOSCOPE,
LONDON EC1
At our Kaleidoscope, London
EC1 site a cycle safety event
was held for over 140 cyclists
and school children, where
people were given the
opportunity to sit in the cab of
a concrete lorry to see where
the blind spots were and raise
awareness to help general
road safety around
construction sites.
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT
76
SUSTAINABILITY AT HELICAL
CONTINUED
Health
and safety
Helical has a corporate culture that is committed to the
prevention of injuries and ill health to its employees or other
people that may be affected by its activities. The Group’s
Health & Safety Policy reflects this commitment and is a core
component of Helical’s culture. The Board of Directors and
senior executives 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 last reviewed and
updated in February 2020 to reflect the latest legislative
and regulatory developments. Training of Helical staff in
the updated Health & Safety Policy and supporting the
Construction Design and Management requirements has
been undertaken during the reporting year.
• The Group’s Health & Safety Policy can be found on the
Company’s website and a summary of performance for the
active sites is below. This is based on all the data that has
been made available to us.
• Helical has delivered nearly three million hours of construction
during the year with no fatalities or major accidents and only
four RIDDOR reportable incidents. The majority of Helical
projects are managed by principal contractors holding OHSAS
18001 certification and that maintain 100% Construction Skills
Certification Scheme (CSCS) accreditation for all full time
and subcontracted staff.
Year ended
31.3.20
Year ended
31.3.19
4
4
0
2,919,095
11
4
0
1,922,894
Number of Lost Time accidents
Number RIDDOR reportable
Number of fatalities
Number of hours
Accident frequency rate for
Lost Time accidents (LTAFR)
Accident frequency rate
for RIDDOR reportable (AFR)
Reduction in LTAFR
75%
Reduction in AFR
33%
Case study
Kaleidoscope/EC1
Kaleidoscope reached practical completion in
December 2019, bringing 86,064 sq ft of Grade A office
space to the Farringdon/Smithfield area of London. Located
above the new Farringdon East Elizabeth Line station, the
site also lies within the vibrant ‘Culture Mile’ initiative.
Sustainability was a strong area of focus throughout the
design and development of this project and we were pleased
to see the building achieve a BREEAM “Excellent” rating and
an EPC rating of “B”. As a result of developing on top of the
new Elizabeth Line station a significant saving in embodied
carbon in the foundation structure was achieved.
Throughout the development phase of the project the site
received a CCS Score of 44/50 (beyond compliant) and the
environmental impact of the site was continually monitored.
This enhanced focus resulted in 100% of waste diverted from
landfill, 100% of waste recycled and 100% of timber used was
from sustainable sources. Through specific initiatives and
collaboration with the main contractor, the site was powered
by 100% renewable sources for a 12-month period and a
site-specific plastic free initiative resulted in a reduction in
single use plastic of 1 tonne.
The Farringdon area has a strong community, including
primary schools, residents and people working in the area.
It was therefore important for us that we regularly engaged
with these communities and ensured an open channel of
communication. During the development a number of events
were held, including a cycle safety event at which over
140 cyclists and school children were given the opportunity
to sit in the cab of a concrete lorry to see where the blind
spots were, a site tour for University of Westminster
students and a Clean Air Assembly for the pupils of
Charterhouse Square School.
0.14
0.14
0.57
0.21
Waste diverted from landfill
100%
Sustainable timber
100%
BREEAM
Excellent
Reduction in plastic
1 tonne
77
ENVIRONMENTAL RISKS
AND OPPORTUNITIES
Helical recognises that
changing social and
environmental factors need
to be taken into account
when considering our broad
business strategies, as these
may give rise to opportunities
to be exploited or risks to
be mitigated.
Such factors include:
• The uncertainties
surrounding future changes
to environmental and social
legislation and potential
changes to labour markets
following the UK’s decision
to leave the European Union;
• The implications for the
property sector from global
agreements to tackle climate
change and from more local
actions that may be taken to
tackle specific environmental
issues (for example measures
to reduce air pollution in city
centres); and
• Broader technological and
social changes that may
impact on our tenants, our
partners and the wider
communities where our
properties are situated.
As a Group, we keep such
matters under review and act
as necessary to ensure that we
meet our obligations and take
advantage of opportunities
that arise.
The Strategic Report, on
pages 1 to 77, was approved
by the Board on 4 June 2020.
On behalf of the Board
GERALD KAYE
Chief Executive
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020STRATEGIC REPORT 78
CHAIRMAN’S REVIEW
79
business early in the transformation. I am sure Shareholders
will join me, one final time, in thanking Mike for his service and
contribution to the success that is Helical today.
There were further changes to the Board in the year. Michael
O’Donnell stepped down, also at the 2019 AGM, after eight
years’ service as a Non-Executive Director, the last four years as
Chair of the Remuneration Committee. On behalf of the Board
I would like to thank Michael for his service to the Company and
his contribution to its success.
In June 2019, the Board was delighted to welcome Sue Farr as
an independent Non-Executive Director. Through the addition
of Sue, the Board has gained expertise in the areas of marketing,
branding and consumer issues, improving the balance of
knowledge and experience on the Board. For details of Sue’s
recruitment process, please see the Nominations Committee
Report on page 92. It is proposed that Sue will become the
Chair of the Company’s Remuneration Committee, subject
to her re-election by Shareholders at the 2020 AGM, and
I look forward to welcoming her to her new role. The current
Remuneration Committee Chair, Richard Cotton, will remain
as Senior Independent Director and continue to be a member
of the Committee. On behalf of the Board, I would like to
thank Richard for chairing the Remuneration Committee
for the past year.
BOARD DECISIONS
The Board is committed to ensuring Helical’s sustainable
success whilst navigating through the current challenging
background. Regardless of the market conditions, the Board’s
decision-making process is founded on the promotion of
the long-term success of the business for the benefit of
our Shareholders, whilst also having regard to the interests
of our other stakeholders.
RICHARD GRANT
CHAIRMAN
A good
year for
Helical
DEAR SHAREHOLDER,
I am pleased to present to you my first review of the business
since becoming Chairman of Helical at the 2019 Annual
General Meeting.
In addition to discussions on economic and political issues
and their impact on the market, the Board meeting agendas
over the year covered a variety of issues including:
• a review of the Group’s corporate, property and
In the year to 31 March 2020, Helical completed a full
development cycle and accompanied this with a strong
operational and financial performance against a background of
great political uncertainty. These results are a credit to the whole
team at Helical. We now face new uncertainty dealing with the
impacts of the Covid-19 pandemic and the team at Helical will
work with all our stakeholders to ensure that we all get through
this crisis. Looking forward, we acquired, during the year, a new
200,000 sq ft office development scheme at 33 Charterhouse
Street, London EC1 and I look forward to seeing additions to this
new development pipeline in due course.
Turning to governance, there were a number of changes
to the Board during the year as well as the adoption of new
procedures to ensure compliance with the UK Corporate
Governance Code 2018. These changes, together with other
actions taken by the Board, are noted below.
CHANGES TO THE BOARD
I was pleased and honoured to be asked to succeed Michael
Slade as Chairman of Helical at the 2019 AGM. Mike joined the
Board in 1984 and turned a struggling, listed steel company
that had made reinforcing bars for the construction industry
since its incorporation in July 1919, into a successful property
development and investment company, selling off its previous
financial strategy;
• consideration and approval of material property transactions
and opportunities;
• approval of the Group’s updated Risk Management
Framework, and risk appetite with respect to principal and
emerging risks;
• implementation of UK corporate governance reforms:
approval of enhancements to governance and reporting
practices to ensure full compliance with the 2018 UK
Corporate Governance Code and The Companies
(Miscellaneous Reporting) Regulations 2018;
• approval of the articulation of the Company’s Purpose,
Values and Culture;
• the setting of the Group’s sustainability strategy and the
establishment of a Sustainability Committee;
• review of the effectiveness of the Board and its Committees,
conducted as part of an external board evaluation process;
• approval of the Company’s Diversity and Inclusion Policy and
the setting of key diversity and inclusion objectives for the
Group; and
• approval of changes to the composition of the Board, notably
the appointment of Sue Farr in June 2019, and consideration
of Board and senior management succession plans.
UK CORPORATE GOVERNANCE REFORMS
Throughout the year to 31 March 2020, the Group’s corporate
governance reporting and practices have been enhanced to
ensure full compliance with the UK Corporate Governance Code
2018 (the “Code”) and Companies (Miscellaneous Reporting)
Regulations 2018 (the “Regulations”). The Financial Reporting
Council’s 2018 Guidance on Board Effectiveness has also
informed the practices of the Board over the course of the year.
Both of these reforms place more importance on the Company’s
role in the wider society and in accordance with the Code, and
the Regulations which run in parallel, we have described in our
Governance Review how the wider interests set out in section
172 of the Companies Act 2006 have been considered in the
Board’s discussions and decision making throughout the year.
The Regulations, supported by the Code, also introduced the
requirement to understand the views of our wider stakeholders
and report on our stakeholder engagement mechanisms. A
noteworthy change, which was implemented in compliance with
the Regulations, was the appointment of Sue Clayton as the
Designated Non-Executive Director for Workforce Engagement.
The Governance Review reports on this requirement of the
Regulations, and Sue’s new role, in more detail on page 91.
The importance of a healthy corporate culture and its link to
long-term sustainability is a recurring theme throughout the
Code, and in order to articulate our Culture to our stakeholders,
the Board has defined Helical’s Purpose and Values and
considered the behaviours it wishes to promote throughout
the organisation. The Purpose and Values are aligned with the
Company’s Culture and flow through to all the practices and
policies of the business, as well as its strategy.
These are just some of the key highlights with respect to our
governance enhancements over the year, and I encourage you
to read our Governance Review for a more detailed account of
how Helical has complied with these reforms.
ANNUAL STRATEGY REVIEW
In September 2019, the Board carried out its annual strategic
review of the business, which included consideration of the
economic, geopolitical, societal and environmental risks
affecting the business. This review involved an assessment of
the Company’s position in the listed sector, its strengths and
weaknesses and options for business growth. The strategic
review confirmed that the Group’s focus on development of,
and investment in, offices in London and Manchester would
maximise the potential future performance of the Group given
the talent, knowledge and experience of the current executive
team and was, and continues to be, in the best interests
of Shareholders.
Further details of the Board’s annual strategy review can be
found on page 84 of the Governance Review.
BOARD EVALUATION
In the year to 31 March 2020, an external Board Effectiveness
Review was undertaken. The overall findings from that appraisal
have concluded that Helical’s Board, Committees and individual
Directors continue to operate effectively.
This year’s external evaluation process highlighted a small
number of key improvements which could be implemented to
increase the effectiveness of the Board, and the Directors are
focused on actioning the Review’s recommendations over the
course of the coming year. Further information on the Board
Effectiveness Review can be found on page 87.
BOARD COMMITTEES
The work of the Nominations, Remuneration and Audit and Risk
Committees is discussed in detail in their individual reports on
pages 92 to 114. A report on the newly established Sustainability
Committee can be found on page 70 of the Strategic Report.
The establishment of the Committee reflects the Board’s
proactive and structured approach towards the oversight
of sustainability practices. The importance afforded to the
sustainability of the business model is also communicated
to our stakeholders through the setting of the Group’s
sustainability strategy which is available to download from
our website.
At the 2018 AGM, the current three-year Remuneration Policy
was proposed and approved by 97% of Shareholders who
voted. No changes are being proposed in relation to the
Company’s Remuneration Policy at the 2020 AGM.
However, the Policy will be renewed at the 2021 AGM and
the Remuneration Committee will engage with Shareholders
during the next 12 months to seek approval of any changes
considered appropriate.
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.
I met with several of our major Shareholders during the year,
alongside the Chief Executive, Gerald Kaye, and the Finance
Director, Tim Murphy. Gerald and Tim attended the majority of
the Shareholder meetings in the year to 31 March 2020, with the
Property Director, Matthew Bonning-Snook, and Company
Secretary, James Moss, also attending as appropriate. The other
independent Non-Executive Directors are also available to meet
Shareholders should they wish to discuss any matters with the
wider Board. Several of the Non-Executive Directors will be
attending the Company’s planned property tours for investors
later in the year, and look forward to meeting Shareholders at
these events.
SUMMARY
Finally, I would like to thank my fellow Non-Executive Directors,
Gerald Kaye and his Executive team, the senior property
professionals, finance team and all the staff for their hard work
during the year. The drive, skill and enthusiasm of the entire
Helical team is fundamental to the effectiveness of the Board,
and this has proved particularly so during this challenging year.
I should also like to thank our stakeholders for their contribution
to our success for the year to 31 March 2020 and the Board will
continue to prioritise and expand its stakeholder engagement
activities going forward.
Overall, I am confident that Helical is well positioned to
pursue its strategy and take advantage of opportunities
in the forthcoming year and I look forward to witnessing
the achievements of the business and the ongoing success
of the Company.
The following pages describe our governance structure and
the work of the Board and its Committees in greater detail.
RICHARD GRANT
Chairman
4 June 2020
GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 80
BOARD OF DIRECTORS
Our Board
81
1
2
3
4
5
A AUDIT AND RISK COMMITTEE MEMBER
N NOMINATIONS COMMITTEE MEMBER
3. TIM MURPHY
FINANCE DIRECTOR
R REMUNERATION COMMITTEE MEMBER
E
V PROPERTY VALUATIONS
COMMITTEE MEMBER
S S USTAINABILITY COMMITTEE MEMBER
E EXECUTIVE COMMITTEE MEMBER
COMMITTEE CHAIR
S SECRETARY TO THE BOARD
AND BOARD COMMITTEES
Board meetings present: 6/6
Tenure 8 years
Skills and experience
Tim Murphy, BA (Hons) FCA, joined the Group
in 1994 and became Finance Director of the
Company in 2012. He is responsible for the
Financial Statements, financial reporting,
treasury and taxation.
1. RICHARD GRANT
CHAIRMAN AND CHAIR OF THE
NOMINATIONS COMMITTEE
N A R
Board meetings present: 6/6
Tenure 8 years
Skills and experience
Richard Grant, BA (Oxon), ACA, has over
40 years’ financial experience. He was the
Chief Financial Officer of Cadogan Estates
Limited from 1994 until his retirement in 2017,
and prior to this, he was a Corporate Finance
Partner at PricewaterhouseCoopers. Richard
was appointed to the role of Chairman of the
Board at the 2019 AGM.
Other external appointments
Chairman of Stenprop Limited and Chairman
of Wittington Investments (Properties) Limited.
2. GERALD KAYE
CHIEF EXECUTIVE AND CHAIR OF THE
EXECUTIVE COMMITTEE
E V
Board meetings present: 6/6
Tenure 26 years
Skills and experience
Gerald Kaye, BSc (Est Man) FRICS,
was appointed Chief Executive in 2016.
He joined the Board as an Executive
Director in 1994, responsible for the
Group’s development activities.
Other external appointments
Gerald is a member of the Investment
Committee at Guy’s & St Thomas’ Charity,
and a past President of the British Council
for Offices, a former Director of London
& Edinburgh Trust Plc and former Chief
Executive of SPP. LET. EUROPE NV.
4. MATTHEW BONNING-SNOOK
PROPERTY DIRECTOR AND CHAIR
OF THE SUSTAINABILITY COMMITTEE
S E V
Board meetings present: 6/6
Tenure 12 years
Skills and experience
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).
In 2019, the Board appointed Matthew as Chair
of the Sustainability Committee and he now
leads our commitment to measuring and
improving Helical’s corporate ESG performance
against external industry benchmarks.
5. RICHARD COTTON
SENIOR INDEPENDENT DIRECTOR
R A N
Board meetings present: 6/6
Tenure 4 years
Skills and experience
Richard Cotton was appointed to the Board as
a Non-Executive Director in March 2016 and
as Senior Independent Director in March 2018.
Richard was formerly head of UK Real Estate at
J.P. Morgan Cazenove, a position he held until
2009, and he spent five subsequent years as
managing director of Forum Partners. Richard
has also previously held the position of Chairman
of Centurion Properties and was a Non-
Executive Director of Hansteen Holdings plc.
Richard currently Chairs the Remuneration
Committee, but will step down from this
role at the 2020 AGM. He is also a member
of the Audit and Risk Committee and the
Nominations Committee.
Other external appointments
Richard is Non-Executive Director of Big
Yellow Group plc. He is also a member of the
Commercial Development Advisory Group at
Transport for London.
6
7
8
9
Changes to Board composition
during the year
Michael Slade OBE retired from the Board at
the 2019 AGM on 11 July 2019 after thirty five
years of service.
After eight years of service, Michael O’ Donnell
stepped down from the Board at the 2019
AGM on 11 July 2019.
Helical was pleased to appoint Sue Farr to
the Board on 5 June 2019. Sue is a member
of the Audit and Risk Committee, Nominations
Committee and Remuneration Committee.
6. SUE CLAYTON
NON-EXECUTIVE DIRECTOR, CHAIR OF
THE PROPERTY VALUATIONS COMMITTEE
AND DESIGNATED WORKFORCE
REPRESENTATIVE
8. SUE FARR
NON-EXECUTIVE DIRECTOR AND CHAIR
OF THE REMUNERATION COMMITTEE
(DESIGNATE)
V A N R
Board meetings present: 6/6
Tenure 4 years
Skills and experience
Sue Clayton, FRICS, was appointed to the
Board as a Non-Executive Director in February
2016. Sue is a former Managing Director of
CBRE’s Capital Markets Team. She has sat
on the CBRE UK Management and Executive
Boards and on the CBRE Group Inc. Board
as Employee Director.
In addition to being Chair of the Property
Valuations Committee, Sue is a member of the
Nominations Committee, the Audit and Risk
Committee and the Remuneration Committee.
In 2019, the Board appointed Sue as the
designated workforce representative and she
has engaged directly with members of the
workforce on a regular basis throughout the year.
Other external appointments
Executive Director, CBRE (part-time) and
Chair of CBRE UK’s Women’s Network, Board
Member of the Committee of Management
of Hermes Property Unit Trust and a
Non-Executive Director of SEGRO plc.
7. JOE LISTER
NON-EXECUTIVE DIRECTOR AND
CHAIR OF THE AUDIT AND RISK COMMITTEE
A N R
Board meetings present: 6/6
Tenure 1 year and 6 months
Skills and experience
Joe Lister was appointed to the Board in
September 2018 and as Chair of the Audit
and Risk Committee in July 2019. He is Chief
Financial Officer at Unite Group plc, a position
he has held since January 2008 after joining the
company in 2002. Prior to joining Unite Group
plc, Joe qualified as a Chartered Accountant
with PricewaterhouseCoopers.
In addition to being Chair of the Audit and
Risk Committee, Joe is a member of both
the Nominations Committee and the
Remuneration Committee.
Other external appointments
Executive Director, Unite Group plc.
R A N
Board meetings present: 5/5
Tenure 9 months
Skills and experience
Sue was appointed to the Helical Board in
June 2019. Sue is Special Advisor to the
Chime Group and a Non-Executive Director
of British American Tobacco plc and Accsys
Technologies PLC.
Sue is a former Chair of both the Marketing
Society and the Marketing Group of Great
Britain. Prior to joining the Chime Group in
2003, where she was Chair of the Advertising
and Marketing Services Division and Strategic
and Business Development Director until 2015,
Sue served as Marketing Director of the BBC
for seven years, Director of Corporate Affairs at
Thames Television for three years and Director
of Corporate Communications at Vauxhall
Motors. Sue has also served as a Non-Executive
Director for Millennium & Copthorne Hotels plc,
New Look plc, Dairy Crest plc, Dolphin Capital
Partners and Historic Royal Palaces.
Sue is a member of the Audit and Risk
Committee, the Nominations Committee and
the Remuneration Committee. It is proposed
that, upon her re-election as Director at the
2020 AGM, Sue will replace Richard Cotton
as the Remuneration Committee Chair.
For details regarding the appointment
process, please see the Report of the
Nominations Committee.
Other external appointments
Non-Executive Director, British American
Tobacco, Non-Executive Director, Accsys
Technologies PLC, and Special Advisor,
Chime Group
9. JAMES MOSS
COMPANY SECRETARY AND
GROUP FINANCIAL CONTROLLER
S E
Board meetings present: 6/6
Tenure 5 years
Skills and experience
James Moss, MChem (Hons) (Oxon) FCA, joined
Helical in September 2014 as Group Financial
Controller and was appointed Company
Secretary in May 2015 and to the Executive
Committee in March 2018. He was previously at
Grant Thornton, where he was responsible for
leading audit and other assurance assignments
in their Real Estate sector.
GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020
82
GOVERNANCE REVIEW
Underpinning Helical’s business model is its commitment to strong
corporate governance, this being an essential component of the
Company’s objective: long-term value creation for stakeholders,
having a beneficial impact on society and taking responsibility for
its effect on the environment. The Board is continuously assessing
the basis on which the Company generates and preserves value
over the long term.
CORPORATE GOVERNANCE STATEMENT – COMPLIANCE
WITH THE UK CORPORATE GOVERNANCE CODE 2018
For the financial year 1 April 2019 to 31 March
2020, the Group has applied the Principles
of the UK Corporate Governance Code 2018
(the “Code”) and complied with its provisions in
full. The Code, along with the Financial Reporting
Council’s 2018 Guidance on Board Effectiveness,
has informed the Company’s governance
practices, particularly with respect to the Board’s
effectiveness and decision making, and has
contributed to the delivery of strategy.
In response to the new Code, The Companies (Miscellaneous
Reporting) Regulations 2018 and best practice guidance,
we have enhanced our reporting in this year’s Governance
section of the Annual Report. The key additions are
highlighted as follows:
• Disclosure of Helical’s Purpose & Values
• A heightened focus on the Company’s Culture and
its link to the long-term sustainability of Helical
• Details of Helical’s efforts to promote diversity throughout
the Company
• The Section 172(1) Companies Act 2006 statement
(“s172(1) Statement”)
• Enhanced reporting on Helical’s stakeholder engagement
initiatives and the consideration given to stakeholder
interests when decision making
Our Governance Review is structured around the Principles
of the Code, and articulates how we have applied the Code’s
Principles and complied with its Provisions throughout the year.
To help our Shareholders and other stakeholders navigate
through our Annual Report and evaluate our application
of the Code Principles, we have included the following table:
Code section
Principles Pages
Board
Leadership
and Company
Purpose
Division of
Responsibilities
Composition,
succession and
evaluation
Audit, risk and
internal control
A-E
80–96 Governance Report
62–67 Risk Management
F-I
80–91 Governance Report
J-L
80–91 Governance Report (specifically
Board Effectiveness Review)
92–93 Nominations Committee Report
M-O
62–67 Risk Management
94–96 Audit and Risk Committee Report
Remuneration
P-R
97–114 Directors’ Remuneration Report
OUR PURPOSE, VALUES AND CULTURE
The Board recognises the importance of articulating its
strategy and business model to its stakeholders in a clear and
concise manner and this is evidenced through the defining of
the Company’s Purpose and Values.
Following the reorganisation and refocusing of the Group’s
business over the last few years, the Purpose of Helical is clear:
To create buildings for today’s occupiers in London and
Manchester by providing sustainable, inspiring space with
distinctive architectural detail, carefully curated public realm,
market leading amenities, high-quality management and a
flexible approach to leasing.
Applying this philosophy, we seek to maximise Shareholder
returns through delivering income growth from creative
asset management and capital gains through our
development activity.
The Company’s Purpose is inextricably linked to the Values
which support the way in which Helical strives to achieve its
strategic aims.
The Helical Board promotes an open culture, enabling the
strategic direction to be fully understood by all members of
the workforce. This environment supports the achievement
of the Company’s aims and aspirations and is conducive to the
Group’s collaborative and focused approach of encouraging
all members of staff to proactively share ideas, opportunities
and concerns.
The Board has articulated the Company’s Culture through
the setting of six Company Values which, combined with the
Purpose, align to the policies, practices and desired behaviours
in the business.
COLLABORATION – SETTING OF THE HELICAL VALUES
The collaborative environment fostered by the
Board can be demonstrated through the setting
of the Company Values.
As part of the process of deciding which Values best
supported the strategic aims of the business, the
Board asked a selection of people across the business
to select those values which they felt best reflected
Helical. The results of this exercise were communicated
to the Board and contributed to the setting of the final
six Values.
The Values represent the Company’s Culture as
articulated by its workforce and are at the heart
of every decision and action.
83
Our Values
Integrity
Through our honest and open approach, we aim to
engender the respect of everyone we work with.
Excellence
Using our market experience and intelligence,
we strive to be “best in class” in everything we do.
Collaboration
Building strong relationships and teamwork
are at the heart of our success.
Creative
We are passionate about developing innovative
and inspiring spaces.
Dynamic
Energy, adaptability and agility are core to our approach.
Sustainable
Working for the long-term benefit of our stakeholders,
local communities and the environment drives the
decisions we make.
As part of its leadership responsibilities, the Board continually
monitors the Culture of the business and during the reporting
period, Sue Clayton was appointed as the Designated Non-
Executive Director for Workforce Engagement. For more
information on Sue’s role in enabling the Board to monitor the
Company’s Culture and in ensuring that the Culture is reflected
in decision making, please see the Stakeholder Engagement and
Section 172(1) Companies Act 2006 section on pages 88–91.
The Purpose and Values of the Company are also taken into
account when setting the Group Remuneration Policy and
structure. Details of this can be found in the Report of the
Remuneration Committee at pages 97–114.
Helical‘s Culture and Values are reinforced through the
Company’s Code of Conduct along with various other policies
and procedures including share dealing, security of data and
anti-bribery and corruption measures. In terms of engaging
with external stakeholders, the Company publishes certain
key policies on its website (https://www.helical.co.uk/
sustainability/policies-reports/). All Company policies and
procedures have been implemented for the purpose of
supporting the long-term sustainable success of the business.
The ability of our employees to speak freely and openly
is an important characteristic of Helical’s ethos. Helical’s
Whistleblowing Policy enables all members of the workforce to
raise concerns about malpractice or misconduct, in confidence,
to either the CEO, Company Secretary, Chairman or Senior
Independent Director. Whistleblowing is a matter reserved for
the Board and any whistleblowing issue raised, as well as any
outcome of subsequent investigations, will be notified to the
Board. Further methods for the Board to engage with the
workforce and other stakeholders are detailed in the
Stakeholder Engagement and Section 172(1) Companies
Act 2006 section at pages 88–91.
As well as being linked to the Culture, the Purpose and Values
flow through to other policies, practices and behaviours in
the business. For example, the Value of working Sustainably
underpins the Company’s strategy and more detail on this
can be found in the Sustainability Report on pages 68–77.
As confirmed in the Company’s most recent external Board
Effectiveness Review (for more information on the 2019/20
external Board Effectiveness Review, please see the report
on page 87), the Board of Directors collectively have the skills
and experience required to provide effective leadership of the
Company. They demonstrate focus and interest in generating
Shareholder value and in contributing to the wider society.
The Directors’ variety of backgrounds and expertise ensure
that the Company’s leadership is effective and balanced
(see pages 80–81 for details), and the range of the Board’s
skill set has been further bolstered by the addition of Sue Farr
in 2019. Sue possesses considerable experience in marketing,
branding and consumer issues (please see Nominations
Committee Report on pages 92–93 for further details
regarding Sue’s appointment).
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GOVERNANCE REVIEW
CONTINUED
OUR BOARD AND ITS COMMITTEES
The Board appreciates the Company’s broader role in
society and the need to engage with all those affected by
its endeavours. The Board prioritises its duty to promote
the success of the Company whilst having regard to all its
stakeholders and contributing to the wider society (for more
information on how this is demonstrated in practice, see the
Stakeholder Engagement and s172(1) Companies Act 2006
section on pages 88–91).
The Helical Board is suitably balanced in terms of power, with
more than half of the Board, excluding the Chairman, being
independent Non-Executive Directors.
There is a clear division of responsibilities between the running
of the Board and the Executive Directors’ responsibility for
running the business. A culture of openness and debate exists
between both the Executive and Non-Executive Directors,
enabling the Non-Executives to provide constructive challenge
and give their specialist advice and guidance on strategy. This
open forum extends beyond the boardroom and can be
evidenced by the Board’s usage of an instant messaging
platform to share real time, key business updates.
ANNUAL STRATEGY SESSION
In September 2019, the Board met for its annual strategy
session at which all the Directors were in attendance. The
annual session provides a forum outside the quarterly Board
meetings for the whole Board to come together to focus
their discussions on Company strategy, and draw upon the
breadth of experience and strategic insights of the Non-
Executive Directors.
The Directors were provided with reading materials in
advance of the session to allow for prior consideration
of the agenda items. The Company’s advisors, JP Morgan
Cazenove, presented their Strategic Review of Helical at the
outset of the meeting. The Board’s discussions focused on
the market, economic climate and outlook, sustainability,
Shareholders and other stakeholders, with the strategic
options available to the Company being carefully
deliberated in light of these factors.
The meeting concluded with key actions which were
incorporated into the Group’s strategy for the
forthcoming year.
The Group’s core activities are performed within the
governance and strategic framework set by the Board.
However, once set, the strategy is continually overseen
by the Board throughout the year, and reviewed as
necessary. For example, changes to strategy may be
implemented in the event of significant changes to market
conditions or to align the Company’s objectives with the
interests of its stakeholders.
The Executive Committee, led by the Chief Executive, is
responsible for ensuring the Group’s strategy is communicated
and implemented. It is comprised of the three Executive
Directors and two senior managers and usually meets monthly,
or more frequently if required. Given the size of the organisation,
the importance of succession planning within the executive
team is a key area of focus for the Board. The Company is in
the process of further developing its succession plans. Further
details on succession planning can be read in the Nominations
Committee Report on pages 92–93.
KEY ROLES AND RESPONSIBILITIES ON THE BOARD
Chairman and Chief Executive
The positions of Chairman and Chief Executive are held
separately, and their roles and responsibilities are clearly
established, set out in writing and agreed by the Board. The
Chairman is responsible for the leadership of the Board and
ensuring its effectiveness. The Chief Executive is responsible
for the leadership of the business and managing it within the
authorities delegated by the Board. Alongside boardroom
discussions, the Chairman maintains contact with the Non-
Executive Directors by telephone and, at least annually, will
hold meetings with the Non-Executive Directors without the
Executive Directors present.
Senior Independent Director
The Senior Independent Director (“SID”) has acted, and
continues to act, as a sounding board for the Chairman and as
an intermediary for the other Directors and Shareholders. The
SID is available to Shareholders for meetings or to discuss any
concerns which have not been resolved through, or would be
inappropriate to resolve through, the normal channels of
communication with the Chairman, Chief Executive or
other Directors.
The annual appraisal of the Chairman’s performance was
conducted by the SID as part of the Board Effectiveness Review
(for further details, please see page 87).
The detailed roles of the Chairman, CEO and SID are available
on our website: https://www.helical.co.uk/investors/
corporate-governance/
Non-Executive Directors
The Non-Executive Directors are responsible for constructively
challenging and helping to develop proposals on strategy.
They are also responsible for applying independent and
objective judgement and scrutiny to all matters before the
Board and its Committees. Throughout the reporting period,
the Non-Executive Directors have received information from
JP Morgan Cazenove and Numis Securities Limited to help
enhance their understanding of the views of Helical’s
major Shareholders.
Since his appointment as Chairman, Richard Grant has met with
Shareholders on several occasions, with feedback from such
interactions having been reported directly to the Board.
The Helical Directors strive to maintain effective corporate
leadership by integrating stakeholder engagement with the
accepted core functions of the Board. For more details on how
the Board discharges this key responsibility of engagement,
please see Stakeholder Engagement and Section 172(1)
Companies Act 2006 section on pages 88–91.
EXECUTIVE
COMMITTEE
Assists the Chief Executive in
the performance of his duties
and ensures that the Group’s
strategy is implemented,
subject to the limitations
of authority set out in the
Schedule of Matters Reserved
for the Board.
Committee members
Gerald Kaye (Chair and
Chief Executive)
Tim Murphy (Finance Director)
Matthew Bonning-Snook
(Property Director)
James Moss (Group Financial
Controller and Company
Secretary)
Tom Anderson (Senior
Investment Executive)
LEADERSHIP
GOVERNANCE STRUCTURE
BOARD OF
DIRECTORS
The Board’s main responsibilities
include, but are not limited to:
• providing overall leadership of the
Group and for setting its long-term
strategic aims;
• approving changes to the Group’s
capital, corporate and governance
structures;
• reviewing management/operational
performance;
• oversight and approval of the Group’s
financial reporting;
• approving the risk appetite of
the Company and ensuring the
maintenance of a robust system of
controls and risk management;
• approving major capital projects,
investments and contracts above limits
of authority delegated by the Board;
• approving resolutions and
corresponding documentation to be
put to Shareholders at general
meetings; circulars and listing
particulars;
• approving major disposals;
• ensuring satisfactory dialogue, and
approving all formal communications,
with Shareholders;
• approval of policies on matters such
as health and safety, sustainability
and the environment; and
• oversight of all corporate
governance matters.
Board members
Richard Grant (Independent
Non-executive Chairman)
Gerald Kaye (Chief Executive)
Richard Cotton (Senior
Independent Director)
Sue Clayton (Independent
Non-Executive Director)
Joe Lister (Independent
Non-Executive Director)
Sue Farr (Independent
Non-Executive Director)
Tim Murphy (Finance Director)
Matthew Bonning-Snook
(Property Director)
Secretary to the Board
James Moss
85
COMMITTEES
AUDIT AND RISK COMMITTEE
Assists the Board in fulfilling its oversight responsibilities by
reviewing and monitoring:
• the integrity of financial information provided to
Shareholders;
• the Company’s system of internal control and risk
management;
• the external audit process and auditors; and
• the processes for compliance with laws, regulations and
ethical codes of practice.
Committee members
Joe Lister (Chair) (NED)
Sue Clayton (NED)
Richard Cotton (NED)
Richard Grant (NED)
Sue Farr (NED)
See Audit and Risk Committee Report on pages 94–96.
NOMINATIONS COMMITTEE
Ensures there is a formal, rigorous and transparent
procedure for the appointment and induction of new
Directors to the Board, leads the process for Board
appointments and succession planning (including the
development of a diverse succession pipeline), supports the
annual Board evaluation process.
Committee members
Richard Grant (Chair) (NED)
Sue Clayton (NED)
Richard Cotton (NED)
Joe Lister (NED)
Sue Farr (NED)
See Nominations Committee Report on pages 92–93.
REMUNERATION COMMITTEE
Assists the Board in fulfilling its responsibility to
Shareholders to ensure that the Remuneration Policy and
practices of the Company reward fairly and responsibly, with
a clear link to corporate and individual performance, whilst
having regard to statutory and regulatory requirements.
Committee members
Sue Farr (Chair) (NED)*
Sue Clayton (NED)
Richard Cotton (NED)
Richard Grant (NED)
Joe Lister (NED)
See Directors’ Remuneration Report on pages 97–114.
SUBCOMMITTEES
PROPERTY VALUATIONS COMMITTEE
Reviews the valuations of the Company’s property portfolio
and reports to the Audit and Risk Committee on its findings.
Committee members
Sue Clayton (Chair) (NED)
Gerald Kaye (Chief Executive)
Matthew Bonning-Snook
(Property Director)
Tom Anderson (Senior
Investment Executive)
See Audit and Risk Committee Report on pages 94–96.
SUSTAINABILITY COMMITTEE
Assists the Board in setting and monitoring the Company’s
sustainability strategy, policies, targets and performance.
The Committee was formed during the year, and details with
respect to the background of its establishment can be found
on page 70.
Committee members
Matthew Bonning-Snook
(Chair)
Laura Beaumont
(Sustainability Executive)
John Inwood (Head of Asset
Management)
Pavlos Clifton (Senior
Development Executive)
Lois Robertson
(Office Manager)
For further details on the Group’s sustainability
initiatives, see Sustainability at Helical on pages 68–77.
* It is proposed that, upon her re-election as Director at the 2020 AGM, Sue Farr will replace Richard Cotton as the Remuneration Committee Chair. Sue’s appointment
as Chair was carefully considered by the Nominations Committee, which concluded that Sue had the requisite relevant and recent skills and experience to enable her to
become Chair of the Committee. The Board approved the appointment based upon the recommendation of the Nominations Committee in May 2020.
GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020
86
GOVERNANCE REVIEW
CONTINUED
Diversity and Inclusion
In the workforce:
Helical is dedicated to promoting and celebrating the positive
effect that diversity has, both in the workplace and within the
wider community, and this is embedded within the Company’s
Culture. In addition, the Board is focused on ensuring that the
views of its workforce and other stakeholders are taken into
account, and that an environment of inclusivity is promoted
at all times.
By ensuring that Helical is an inclusive and diverse business, the
Group benefits from a variety of experiences and perspectives.
Such variety helps to stimulate creativity and contributes to our
open and cohesive Culture. In addition, benefits extend to the
development of a diverse succession pipeline, necessary for
future sustainability.
Over the reporting period, the Board set key objectives
with regards to diversity and inclusion in the workforce and
these objectives are documented in the Company’s Diversity
and Inclusion Policy which can be found on our website:
https://www.helical.co.uk/sustainability/policies-reports/
The Board will be monitoring and reviewing the Company’s
progress with regards to its Diversity and Inclusion (“D&I”)
initiatives by assessing the successful delivery of Company
strategy over time against the objectives set. Success will also
be measured using the information gathered through the
Company’s employee engagement initiatives (please see
Stakeholder Engagement and Section 172(1) Companies Act
2006 section on pages 88–91).
The positive impact of our D&I Policy and initiatives, and the
value created by the Company’s open and cohesive Culture, can
be demonstrated through Helical’s ability to attract and retain
staff (for details of our staff tenure and turnover rates, please
see Sustainability at Helical on pages 68–77). The impact of
our D&I Policy will be continually monitored by the Board.
Helical’s Employment Policy supports its D&I objectives,
whereby all employee candidates are considered fairly and
without prejudice or discrimination. The Policy also supports
the enhancement of our employees’ career development.
The Company’s Employment Policy can also be found
on our website: https://www.helical.co.uk/sustainability/
policies-reports/
During the year under review, 37% of the Group’s professional
positions were held by women, providing a positive balance of
gender in our talent pool. In order to maintain a diverse and
inclusive business, Helical supports part-time, job-sharing and
flexible working requests wherever possible. During the year
under review 17% of the workforce carried out their roles
on a part-time basis in order to meet family commitments.
The overall gender balance of the workforce can be found on
page 71. The Board supports the findings of the Hampton-
Alexander Review with respect to increasing gender diversity
in company leadership below board level, and diversity in the
succession pipeline will be a key factor in the Nomination
Committee’s work with respect to Board and senior
management level succession planning in the coming year.
Helical is a signatory to Real Estate Balance CEO’s Commitments
for Diversity and the Group supports the principles on leadership,
culture and opportunity contained in the Real Estate Balance
Toolkit, designed to support a more diverse workplace.
On the Board:
Whilst Helical does not set specific targets for diversity on the
Board, it recognises that diversity brings benefits and resources
to the execution of the strategic role of the Board. Furthermore,
diversity underpins each of Helical’s Values and is key to the
achievement of the Company’s Purpose.
The Board is committed to making appointments based on
merit and objective criteria, and promotes the diversity of social
and ethnic backgrounds, as well as gender. The Nominations
Committee regularly reviews the balance of experience, skills,
cognitive and personal strengths and diversity of thought to
ensure that the composition of the Board and its Committees
is appropriate for the Group as it continues to evolve and
implement strategy.
With respect to gender diversity, the Board has made
improvements to its composition over the reporting period,
and following the appointment of Sue Farr in June 2019, female
representation on the Board of Directors has increased and now
stands at 25%.
The Board will continue to focus on the levels of diversity
amongst its Directors, aiming to make improvements to
such levels, in order to promote the success of the Company,
thereby generating value for Shareholders and contributing
to wider society.
EFFECTIVENESS
Key Board activities
Board Matter
Activity
Strategy
• Review of corporate objectives
• Review of market trends, opportunities and risks
• Annual off-site strategy meeting
• Setting the Group’s sustainability strategy and
monitoring the achievement of objectives
People
• Executive and Non-Executive development and
succession planning
• Evaluation of the Board’s effectiveness
• Review of staff resource and development of the
Group’s employees
• Review of staff engagement initiatives and
appointment of a Designated Non-Executive
Director for Workforce Engagement
• Engagement with the Company’s stakeholders
and consideration of their interests when making
Board decisions (see Stakeholder Engagement
and Section 172(1) Companies Act 2006 section
on pages 88–91)
• Appointment of Sue Farr to further increase the
balance of skills on the Board
• Oversight and review of Company whistleblowing
procedures
• Approval of half year and annual results
• Review of dividend policy
• Review of Group’s capital and debt structure
• Assessment of viability and going concern, including
sensitivity analysis
Financial
Governance
• Implementation of UK corporate governance reforms
– 2018 UK Corporate Governance Code, FRC’s
Guidance on Board Effectiveness and The Companies
(Miscellaneous Reporting) Regulations 2018
• Approval of Board policies and procedures,
Schedule of Matters Reserved for the Board and
Committee terms of reference
• Establishment of a Sustainability Committee
• Implementation of the sustainability strategy
• Oversight of the Group’s Health & Safety Policy and
monitoring the Group’s performance
• Financial crime risks review and mitigation
• Internal control system review
• Review of principal risks
• Approval of the Group’s Risk Management
Framework and risk appetite
Risk
management
& internal
controls
Property
transactions
and
operations
• Approval of material property transactions and
opportunities – including the sale of Power Road
Studios, London W4 and the acquisition of
33 Charterhouse Street, London EC1, in joint venture
• Review of independent valuations of assets
BOARD EFFECTIVENESS REVIEW
To ensure that the optimal performance of the Board is
maintained, an evaluation of the effectiveness of the Board
is conducted annually, with an external evaluation instructed
every three years in accordance with the Code’s best practice
standards. In 2017, Helical instructed executive search and
board evaluation services firm, Sam Allen Associates, to
conduct an external evaluation of the Board and its
effectiveness. Three years later, the Board thought it
appropriate for Sam Allen Associates to return to perform
a new evaluation, allowing the effectiveness of the Board
to be compared and contrasted over the three-year period
and provide insight into the results of the Company’s
transformation over the same period.
The process
At the start of the process, the Board Effectiveness Review
(“BER”) timetable was formulated and agreed with the
Chairman, the Senior Independent Director, the Chief
Executive and the Company Secretary. Sam Allen Associates
created a bespoke BER programme for Helical which was
conducted in phases, beginning initially with the anonymous
completion of a questionnaire by the Directors. The
questionnaire responses were then collated to detect key
themes which would be used as focal points in the subsequent
interview stage of the programme. One-to-one interviews
were then conducted between Sam Allen and each member of
the Board, and within these interviews, the key themes arising
from both the questionnaire and the Board and Committee
meetings over the past year were explored.
Board attendance
Regular Board meetings are scheduled each year and
the Directors allocate sufficient time to the Company
to discharge their responsibilities effectively. The Non-
Executives in particular provide constructive challenge,
strategic guidance, and offer specialist insight and advice
based on their experience (see pages 80–81 for the diverse
skill set of the Helical Board, which provides for balanced
and effective leadership of the Company). During the year
ended 31 March 2020, six scheduled Board meetings were
held, with an additional two unscheduled meetings having
been held to discuss specific issues and events. Please refer
to pages 80–81 and to the individual Committee Reports
for each individual Director’s Board and Committee meeting
attendance records.
The Board also held its annual strategy session during
September 2019, which enabled focused discussions relating
to the Group’s strategy. The strategy event was structured
to facilitate formal discussions during the day followed by
informal discussions in the evening (see also page 84 for
further details).
87
Sam Allen Associates also observed a meeting of the
Board and each Board Committee and undertook a review
of the previous twelve months of Board and Committee
meeting minutes.
In formulating the final results, Sam Allen Associates compared
the key themes identified in the 2020 BER to the results from
their 2017 BER, as well as the results of the 2018 and 2019
internal BERs. The findings of the 2020 BER process were
presented to the Board of Helical in March 2020.
Key recommendations from the 2020 BER
The results of the BER demonstrated that the Helical Board
was balanced, with relevant and diverse experience, and that it
functioned effectively. The BER further highlighted the positive
team dynamic on the Board, and recognised the high level of
contribution and appropriate level of challenge provided at
meetings from all members. The Review suggested a small
number of improvements that could be implemented to
further increase the effectiveness of the Board, and these
are detailed in the table below.
Recommendations from the 2019/20 BER
• Further, or reprioritised, time to discuss and set corporate strategy
drawing on the diverse balance of skills of the Board members;
• The Nominations Committee to lead a review of succession planning
for senior management; and
• KPIs to be reviewed and reflected in remuneration targets as
appropriate.
The Board is in the process of formulating an action plan in
response to the recommendations of the BER, and will report
on progress made in next year’s Annual Report.
Key investor relations activities
2019
May
Annual results announcement and analysts’ presentation
for 2019
May/June
Investor Roadshow presentations and meetings in London
July
AGM Trading Update
Annual General Meeting
US Investor Roadshow – New York
September
Portfolio and trading update
City and Tech Belt Property Tour
October
Manchester Property Tour
Investor meeting in London
November
Half year results announcement and analysts’
presentation for 2019
Post half year investor meetings
December
Post half year investor meetings
2020
March
Portfolio and trading update
Annual General Meeting
For details of the resolutions passed at the 2019 AGM and the
voting results, please visit our website: https://www.helical.
co.uk/investors/shareholder-information/agm/
Fair, balanced and understandable – the Board’s responsibility
The Code requires the Board to ensure that, taken as a whole,
the Annual Report and Accounts present a fair, balanced and
understandable assessment of the Group’s position and
prospects. In reviewing the Annual Report and Accounts, the
Audit and Risk Committee considered the points set out in its
Report on pages 94–96. After such a review, the Audit and Risk
Committee reported its findings to the Board. For the Directors’
statement in this regard, please see page 117.
GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 88
GOVERNANCE REVIEW
CONTINUED
Stakeholder engagement and
Section 172(1) Companies Act 2006
SECTION 172(1) STATEMENT
The Board of Directors confirms that during the year under
review, it has acted to promote the long-term success of the
Company for the benefit of Shareholders, whilst having due
regard to the matters set out in section 172(1)(a) to (f) of the
Companies Act 2006, being:
(a) the likely consequences of any decision in the long term;
(b) the interests of the Company’s employees;
(c) the need to foster the Company’s business relationships
with suppliers, customers and others;
(d) the impact of the Company’s operations on the
community and the environment;
(e) the desirability of the Company maintaining a reputation
for high standards of business conduct; and
(f) the need to act fairly between members of the Company.
In line with section 172 of the Companies Act 2006, the
Directors of Helical act to promote the success of the
Company for the benefit of its members. However, the
Helical Board places a great emphasis on the importance of
the views and interests of its other key stakeholders. Helical’s
stakeholders are those groups that are likely to be affected
by the Company’s actions, and hence play a key role in the
successful execution of the Company’s long-term strategy.
In recognition of the importance of the Group’s relationship
to its stakeholders, the Board has set out its commitments
to its stakeholders as follows:
(i) engaging with our stakeholders to build and maintain
positive business relationships;
(ii) ensuring that our stakeholders are kept informed
and have access to information about our business;
(iii) considering the needs and expectations of our
stakeholders throughout the Company;
(iv) inviting feedback from our stakeholders to help
us identify current and emerging issues facing our
business; and
(v) ensuring that our activities generate sustainable,
long-term value for all our stakeholders.
89
Engaging with
our stakeholders
THE BOARD
The Board takes into
consideration the material
issues for each stakeholder
group when making decisions,
supporting its duty under
s.172 CA 2006 – to promote
the success of the Company
as a whole.
CLIMATE CHANGE GOVERNANCE
Sustainability is at the core of all activities at Helical and the
Board acknowledges both the direct and indirect impacts that
the Company’s activities can have on our stakeholders, as well
as the environment.
The Board considers climate-related issues when reviewing
and guiding strategy, ensuring that such issues inform risk
management policies, annual budgets, business plans,
performance objectives and decision making with regards
to major capital expenditures and acquisitions.
With respect to the Group’s governance around climate-related
risks and opportunities, the Board is continuously identifying,
assessing and monitoring climate change risks through our
Risk Management Framework – please see pages 62–67.
The Group has also established a Sustainability Committee
which monitors climate-related issues and reviews the Group’s
strategic approach regarding climate change. The Committee
reviews the Company’s policies, management, initiatives,
targets and performance in the following areas:
a) Environmental impact of Helical’s activities, including:
energy use, greenhouse gas emissions (including direct
and indirect emissions), water usage, waste management
and carbon footprint;
b) Impact of Helical’s activities on local communities;
c) Workplace sustainability policies and procedures;
d) Corporate policies on responsible and ethical business
conduct; and
e) Stakeholder engagement policies and procedures
for sustainability.
For further details of the work of the Sustainability
Committee, including the Group’s sustainability strategy,
please see pages 68–77.
Our stakeholders and engagement mechanisms
The Company’s stakeholders are defined as our Shareholders,
partners, occupiers (tenants/customers), employees, local
communities situated in and around our development and
property sites, suppliers and contractors, the Government and
other regulatory bodies. The Company’s stakeholders were last
reviewed in September 2019 and will be reconsidered regularly
by the Board.
The Board places upmost importance on the maintenance of
positive relationships with all the Company’s stakeholders, not
just its Shareholders. It is through effective engagement that
the Board has sought to understand the views of all the Group’s
stakeholders. Details of the current methods of engagement
employed by Helical are detailed below and on page 91.
SHAREHOLDERS
Material issues and
considerations
• Financial performance
• Generation of long-term
sustainable returns
• Environmental, social
and governance practice
Means of engagement
• Scheduled and unscheduled
meetings between
Shareholders and key
members of the Helical team
• Investor roadshow
presentations
PARTNERS
Material issues and
considerations
• Financial performance
and generation of
sustainable returns
• Collaboration and
communication
• Risk appetite and
management suitable
to partnership
• Corporate responsibility
Means of engagement
• Regular communication
and feedback
• Annual General Meeting
• Transparent reporting
• Property tours
• Annual and half year
results announcements
and presentations
• Helical’s website
• Collaborative approach
with clear responsibilities
• Helical’s website
OCCUPIERS
(TENANTS/CUSTOMERS)
Material issues
and considerations
• Quality of service provided
EMPLOYEES
Material issues
and considerations
• Opportunities for
development
• Delivery of quality space
• Fulfilling and rewarding
to meet needs
• Ability to meet needs
of changing market
• Value for money
Means of engagement
• Independent tenant
satisfaction surveys
(please see pages 74 and 91
• Programme of meeting with
tenants on a regular basis
• Helical’s website
• Engagement crisis situations
e.g. Covid-19 (please see
page 91)
work in a safe and
comfortable environment
• Fair treatment, recognition
and remuneration
• Diverse and positive culture
Means of engagement
• Designated Non-Executive
Director responsible
for ongoing workforce
engagement (please see
page 91)
• Open and inclusive culture
• Staff satisfaction survey
• Regular staff appraisals
• Helical’s website
LOCAL COMMUNITIES
Material issues and
considerations
• Ethical and responsible
corporate behaviour
• Environmental impact
of developments
• Positive impact to local
areas, including
development of public
realm
Means of engagement
• Local resident consultations
• Community and charitable
events
• Helical’s website
SUPPLIERS AND
CONTRACTORS
Material issues and
considerations
• Agreement of, and
compliance with, appropriate
payment terms
GOVERNMENT AND OTHER
REGULATORY BODIES
Material issues and
considerations
• Corporate responsibility
and accountability
• Compliance with applicable
• Payments made as soon
laws and regulations
as practicable
• Collectively prevent
and mitigate risk of
modern slavery, bribery,
and corruption in our
supply chain
• Monitoring updates to legal
and regulatory environment,
including the impact of
Brexit and Covid-19
Means of engagement
• Transparent statutory
• Ethical and fair dealings
reporting
Means of engagement
• Open communication
about expected behaviour
within our supply chains
(see Supplier Code of
Conduct on our website)
• Regular communication
and feedback
• Policy of paying a fair fee
• Helical’s website
• Open approach
to communication
• External advice
regularly sought
• Board oversight
of key relationships
and areas impacted
• Helical’s website
GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 90
GOVERNANCE REVIEW
CONTINUED
91
Consideration of stakeholder interests and
the impacts on Board decision making
Engrained within the Culture of Helical is its consistent approach
to ensuring that the wider interests of its stakeholders are
considered throughout its corporate decision making processes.
When making decisions, the Directors of Helical are committed
to complying with their section 172(1) Companies Act 2006
duty (“s172(1) Duty”) to weigh up all the relevant factors and
determine the course of action that would most likely contribute
to the long-term success of the Company. The Board is also
focused on its responsibility to have regard for all stakeholders
when setting strategy and developing policies.
During the period the Directors approved the section 172/
Stakeholder Model, shown below, which summarises the
interaction between the s172(1) Duty and Helical’s stakeholders.
The Model is included in all Board and Committee packs to aid
the Directors in complying with their s172(1) Duty.
When matters are presented to the Board for approval, the
Directors always consider the interests of the Company’s
stakeholders alongside the matters set out in section 172(1)
Companies Act 2006 prior to making any decisions. On key
approval items in Board and Board Committee papers, guidance
will be given as to which stakeholders the Board should have
regard to when reaching a decision.
Interaction between s172 and stakeholders
F.
Need to act
fairly between
members
E.
Maintaining
reputation for
high standards
of business
conduct
A.
Likely long-term
consequences
S172(1) DUTY
Directors must
promote success for
the benefit of the
members with
regard to…
D.
Impact of
operations on
the community
and the
environment
B.
Interests of
employees
C.
Need to foster
business
relationships
with suppliers,
customers and
others
SHAREHOLDERS
PARTNERS
OCCUPIERS
(TENANTS/CUSTOMERS)
EMPLOYEES
LOCAL COMMUNITIES
SUPPLIERS AND
CONTRACTORS
GOVERNMENT AND OTHER
REGULATORY BODIES
Section 172 Companies Act 2006 (“CA”) imposes a statutory duty on directors to promote the success of their company:
• A director must act in the way he/she considers, in good faith, would be most likely to promote the success of the company
for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to those factors set out in
Section 172 (1)(a) to (f) CA.
• In fulfilling their s172 (1) duty, directors must give full consideration to the interests of the Company’s stakeholders, and this
is achieved through ongoing stakeholder identification, impact assessment and engagement with stakeholder groups.
The Directors are pleased to report on how they have
had regard to the need to foster the relationships
with suppliers and contractors, tenants/occupiers,
partners and others in a business relationship with
the Company, and the effect of that regard on
recent, principal, decisions taken by the Company.
STAKEHOLDER ENGAGEMENT CASE STUDY –
ESTABLISHMENT OF THE SUSTAINABILITY COMMITTEE
Operating in a sustainable manner that does not risk the
business’s ability to continue into the foreseeable future has
always been a priority of the Helical leadership and this is
clearly communicated in the Company’s Purpose
(see pages 82–83).
In response to the Company’s stakeholders’ increasing
focus on sustainability, the Helical Board has enhanced its
oversight and communication of the Company’s sustainability
practices over the year. In September 2019, the Board
approved the establishment of the Sustainability Committee
and approved a sustainability strategy for the Company.
Please see Sustainability at Helical on pages 68–77 for
more details on the work of the Sustainability Committee.
Our sustainability strategy sets out the Group’s long-term
vision for sustainability and identifies the importance of
engaging with, and considering the needs of, stakeholders.
Within the strategy, the Group has listed its key sustainability
priorities and objectives with respect to its stakeholders.
Please see our sustainability strategy for more details.
STAKEHOLDER ENGAGEMENT CASE STUDY –
TENANT SUPPORT DURING THE COVID-19 CRISIS
In accordance with Helical’s Values of Integrity and
Collaboration we aim to work openly and collaboratively with
all our stakeholders and in doing so, engender their respect.
Our Values lie at the heart of how we conduct business, and
inform our stakeholder engagement practices. This can be
demonstrated through our tenant support initiative which
we implemented at the outset of UK’s Covid-19 lockdown.
Whilst the UK Government had made it clear that commercial
occupiers were still liable to pay rents to their landlords during
the lockdown, our team, led by the CEO, engaged proactively
with our tenants, offering them an opportunity to discuss the
financial impact of Covid-19 on their businesses. For those
tenants demonstrating financial hardship as a result of
Covid-19, the Company engaged in further open, collaborative
discussions and, where appropriate, offered forms of financial
assistance during the period of difficulty.
This approach evidences how the Directors consider the
interests of the Company’s stakeholders when making
business decisions.
Our sustainability strategy is available to download
from our website.
STAKEHOLDER ENGAGEMENT CASE STUDY –
NEW TENANT APP
As articulated in the Company’s Purpose, Helical strives to
provide best in class services to all its tenants and occupiers.
In order to achieve this goal, the Company seeks feedback
from its tenants/occupiers throughout the year and, on
an annual basis, asks these stakeholders to complete an
externally administered Tenant Satisfaction Survey.
As a direct result of the feedback gleaned from the 2019
Tenant Satisfaction Survey, the Executive Committee approved
the adoption of a bespoke, online, tenant experience and
management platform. The app was launched for 35 Dale
Street, Manchester and Tootal Buildings, Manchester in
October 2019, and has been received positively by the tenants.
The app was subsequently launched for Fourways in 2020,
and is being considered for adoption at other properties in the
Helical portfolio.
The positive response to the introduction of the app was
captured in the results of the 2020 Tenant Satisfaction
Survey, and this example demonstrates the effectiveness
of the Survey in engaging with the tenants and occupiers.
Furthermore, the adoption of this app highlights that the
Helical Directors are listening and responding to the views
of the Company’s stakeholders.
Helical staff attending a breakfast forum with Sue Clayton, our
Designated Non-Executive Director for Workforce Engagement
Engagement with workforce & appointment of the Designated
Non-Executive Director for Workforce Engagement
We know that our staff are vital to our success and every
member of the Helical workforce is valued, with their opinions
continuously sought and held in high regard. This principle of
mutual respect and inclusion is integral to the culture of the
Company (see pages 82-83). Engagement with the workforce is
deemed a key priority for the Directors and, as such, the Board
frequently invites members of staff to present on key projects
or topics of interest at its meetings. Through this engagement
mechanism, the workforce is given the opportunity to meet
the full Board of Directors. The Board also encourages open
dialogue with the workforce and details of how to communicate
directly with the Board and Executive management are clearly
documented in the workforce policies and procedures.
Building on the engagement between the Board and the
workforce, and in line with the Code, the Board appointed
Sue Clayton to the position of Designated Non-Executive Director
for Workforce Engagement during the reporting period.
Following her appointment, Sue invited the staff to a breakfast
forum at which she presented on this new position, and
explained the role of the Helical Board and how it functioned.
In addition, two members of the workforce gave presentations
on current projects upon which they were working.
Attendee feedback indicated that the event was positively
received by all those involved, with the open and relaxed forum
facilitating discussion on a wide range of topics, whilst also
giving all staff an opportunity to contribute.
Through our workforce engagement sessions we aim to
produce outcomes which benefit our workforce. All suggestions,
or indeed concerns, arising from our workforce engagement
sessions will be reported to the full Board and will be considered
as part of the Directors’ decision making processes.
GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020
92
NOMINATIONS COMMITTEE REPORT
93
RICHARD GRANT
CHAIR OF THE
NOMINATIONS COMMITTEE
Committee membership and attendance
Independent
Committee meeting
attendance
Richard Grant (Chair)
Sue Clayton
Richard Cotton
Joe Lister
Sue Farr1
Yes
Yes
Yes
Yes
Yes
4/4
4/4
4/4
4/4
3/3
1 Sue Farr joined the Board on 5 June 2019 and was not a member
of the Committee when it convened in June 2019.
The Company Secretary acts as secretary to
the Committee.
The Committee’s Terms of Reference is available to
download at: https://www.helical.co.uk/investors/
corporate-governance/
KEY HIGHLIGHTS FOR 2019/20
• Recruitment and induction of Sue Farr, independent
Non-Executive Director
• External Board Effectiveness Review conducted
by Sam Allen Associates in early 2020
• Compliance with the Code following the appointment
of the new Company Chairman, Richard Grant
KEY AREAS OF FOCUS DURING 2020/21
• Succession pipeline for senior management to be
further developed
• Board Effectiveness Review to be conducted internally
in early 2021
• Consideration of Chairman’s tenure and compliance
with the Code
DEAR SHAREHOLDER,
I am pleased to present the Nominations Committee Report
covering the work of the Committee during the period
April 2019 to March 2020.
The Committee met four times over the period and spent a
significant proportion of time considering the composition of
the Board and its Committees, as well as the oversight of the
2019/20 external Board Effectiveness Review (please see the
report on page 87).
BOARD COMPOSITION AND APPOINTMENTS
Director appointments are considered against objective criteria
and are based on experience and merit. This supports the
Group’s strategy to maintain an appropriate combination of
skills, experience, independence and knowledge on the Board
and its Committees. The Committee keeps the composition of
the Board and its Committees under review throughout the
year. On an annual basis, the Nominations Committee considers
the composition of the Board and its Committees, and focuses
its review upon the balance of skills, experience, length of
service, knowledge of the Group and wider diversity
considerations. This review is aided by the use of a skills matrix.
In terms of changes to the Board’s composition over the period,
I was appointed by Shareholders as Chairman in succession to
Michael Slade at the AGM in July 2019, and Joe Lister took over
as the Chair of the Audit and Risk Committee.
Former member of the Committee, Michael O’ Donnell, also
stepped down from the Board in July 2019 and the Committee
embarked upon a rigorous recruitment process in May 2019 to
identify a suitable candidate to replace him.
With the assistance of external search consultancy, Korn Ferry,
the Committee identified Sue Farr as the most suitable
candidate to succeed Michael O’Donnell and she was formally
elected to the Board at the 2019 AGM.
NON-EXECUTIVE RECRUITMENT PROCESS
SUE FARR, NON-EXECUTIVE DIRECTOR
The Committee led the process to recruit a new Non-Executive
Director during the year. The Committee instructed external
search consultancy, Korn Ferry, based upon the firm’s
reputation as a specialist in board level recruitment. Korn
Ferry has qualified as an Enhanced Code Accredited Firm
with respect to the Voluntary Code of Conduct for Executive
Search Firms and has no connection to Helical other than in
respect of this appointment.
The Committee requested that a broad and diverse list of
non-executive candidates be presented for consideration,
including those without experience in property. A shortlist
of diverse candidates provided by Korn Ferry was prudently
considered and interviews carried out. Ultimately, the
Committee unanimously agreed to recommend the
appointment of Sue Farr based on the knowledge, skill
and experience she could contribute to the Board and its
Committees, particularly in the areas of marketing, branding
and consumer issues; valuable skills which were required by
the Board. Sue has no direct connection to Korn Ferry, other
than in a recruitment services capacity.
Sue’s appointment added to the good mixture of abilities,
knowledge and experience possessed by the Directors and
enhanced the effectiveness of the Board.
Sue’s biography can be found on page 81.
DIRECTOR APPOINTMENT PROCESS
Role requirements and criteria: The Committee, in conjunction
with the Chief Executive, agrees objective criteria for appointees –
skills, knowledge, experience and personal attributes relevant to
the Group’s strategy.
continue to have sufficient time available to devote to the
Company, Directors are required to inform the Board of any
changes to their other significant commitments.
Non-Executive Directors’ tenures (as at 31 March 2020)
Search process: Under the direction of the Committee, an independent
executive search provider (Korn Ferry in 2019/20) is engaged to
facilitate the search process.
Review: Details of preferred candidates are presented to, and considered
by, the Committee. Shortlisted candidates are interviewed by a sub-
committee of the Board.
Recruitment: The Committee considers feedback from interviews and,
after careful consideration, recommends appointments to the Board.
Induction: Newly appointed Directors undergo an induction schedule
bespoke to their needs.
DIVERSITY
The Board and Nominations Committee pay full regard to the
benefits of diversity and inclusion in the widest sense, including
in relation to gender, social and ethnic backgrounds, religious
belief, sexual orientation and disability, cognitive and personal
strengths when recommending future Board appointments and
in considering succession planning below Board level. When
seeking to fill vacant Board positions, the Committee considers
both internal and external candidates as appropriate.
The Group chooses to engage external search firms who are
signatories to the UK Voluntary Code of Conduct for Executive
Search Firms to address gender diversity on corporate boards.
The Company is a signatory to Real Estate Balance, a cross-
industry organisation which has, since 2017, focused on helping
to increase the number of women operating in senior positions
in the real estate sector. Since 2019, Helical has been a signatory
to Real Estate Balance CEO’s Commitments for Diversity. The
Board is committed to strengthening the pipeline of senior
female executives within the business and will continue to
develop the Group’s policies and practices to support women
succeeding at the highest levels possible at Helical. For more
details on diversity at Helical, please see the Diversity and
Inclusion section of the Governance Review on page 86.
DIRECTOR INDEPENDENCE AND EFFECTIVENESS
Following due consideration of each Director’s tenure, alongside
the commitment and effective contribution demonstrated
in relation to their respective roles, the Committee has
recommended to the Board that resolutions to re-elect each
Non-Executive Director be proposed at the AGM alongside
resolutions to re-elect the Executive Directors. The Committee
ensures that Board appointees have enough time available to
devote to the appointed role. To enable the Board to identify
any potential conflicts of interest and ensure that Directors
Under 1 year
1-3 years
3-6 years
Over 6 years
20%
20%
40%
20%
By the time of my next Nominations Committee Report,
I shall have served on the Helical Board for nine years. In light
of this fact, the Committee will be considering how to ensure
compliance with Provision 10 of the Code throughout the
course of the forthcoming year.
SUCCESSION PLANNING
The Committee is responsible for making appointments to
the Board and ensures that plans have been created to enable
orderly succession to the Board, its Committees and the senior
management team of Helical. In formulating succession plans,
the Committee is cognisant of the need to develop a diverse
pipeline of candidates, particularly with regard to gender and
social and ethnic backgrounds, in order to equip the Group with
the necessary skills and expertise it requires to drive long-term
value creation and support its strategic aims.
The Executive Committee reviews the suitability of the Group’s
succession plans below Board level at least once a year, as part
of its annual strategic review. The Nominations Committee has
instructed the Executive Committee to conduct a detailed
review into the succession pipeline for the Group’s executives
in the coming year, considering the skills and strengths of all
potential internal candidates, highlighting any gaps that exist, as
well as analysing training requirements. The results of this review
will enable the Nominations Committee to proactively plan for
succession in the Executive team, and thus further develop the
Group’s succession plans across all levels of the business.
Given the size of the Company, whilst it is always the Committee’s
aim to nurture and promote existing talent when recruiting for
senior leadership and Board roles, the Group will also utilise the
expertise of external search consultants to ensure that the best
possible range of diverse candidates are considered.
BOARD EVALUATION 2019/20
As reported on page 92, an externally facilitated Board
evaluation was performed by Sam Allen Associates during
the period from January to March 2020. This process and the
outcomes are discussed in detail in the Governance Review
on page 87.
RICHARD GRANT
Chair of the Nominations Committee
GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 94
AUDIT AND RISK COMMITTEE REPORT
JOE LISTER
CHAIR OF THE
AUDIT AND RISK COMMITTEE
Committee membership and attendance
Independent
Committee meeting
attendance
Joe Lister* (Chair)
Richard Grant*
Sue Clayton
Richard Cotton
Sue Farr
Yes
Yes
Yes
Yes
Yes
5/5
5/5
5/5
5/5
4/4**
* Considered as having recent and relevant financial expertise.
** Sue joined the Board in June 2019 and therefore was not in attendance at
the Committee meeting in May 2019.
The Company Secretary acts as Secretary to the
Committee. The Committee’s role and responsibilities are
set out in its Terms of Reference which are available at:
www.helical.co.uk/investors/corporate-governance/
ROLE OF THE COMMITTEE
Assists the Board in fulfilling its oversight responsibilities
by reviewing and monitoring:
• the integrity of the Financial Statements of the Company,
including its annual and half-yearly reports, preliminary
announcements and any other formal statements relating
to its financial performance, and review and report to the
Board on significant financial reporting issues and
judgements which those statements contain;
• the Company’s system of internal control and risk
management;
• the need for an internal audit function;
• the external audit process and managing the
Company’s relationship with the external Auditor; and
• the processes for compliance with laws, regulations
and ethical codes of practice.
KEY HIGHLIGHTS FOR 2019/20
• Appointment of Joe Lister as Committee Chair
• Review of the effectiveness of the Committee conducted
as part of the external Board Effectiveness Review
• Approval of the Company’s updated Risk Management
Framework
• Consideration of the need for an internal auditor
DEAR SHAREHOLDER,
Having assumed the role of Chair in July 2019, I am pleased to
present my first Audit and Risk Committee Report. This report
outlines the Committee’s key activities and areas of focus for the
year to 31 March 2020.
The Committee endorses the principles set out in the FRC
Guidance on Audit Committees and Risk Management, Internal
Control and Related Financial and Business Reporting. The
Board has formal and transparent arrangements for considering
how it applies the Group’s financial reporting and internal control
principles and for maintaining an appropriate relationship with
its Auditor. Whilst all Directors have a duty to act in the interests
of the Group, this Committee has a particular role, acting
independently from the Executive Directors, to ensure that the
interests of Shareholders are properly protected in relation to
risk, financial reporting and internal controls. Appointments to
the Committee are made by the Board on the recommendation
of the Nominations Committee in consultation with the Audit
and Risk Committee Chair.
EXTERNAL REVIEW OF THE COMMITTEE’S EFFECTIVENESS
The effectiveness of the Audit and Risk Committee was
reviewed as part of the external Board Effectiveness Review
conducted by Sam Allen Associates. Please see page 87
for details of the review process, including the key
recommendations which arose from the Review.
THE WORK OF THE COMMITTEE DURING THE YEAR
The Committee met five times during the year and a record
of Director attendance for these meetings is shown opposite.
It is common practice at Helical for Audit and Risk Committee
meetings to be attended by all Board members, regardless
of whether they are members of the Committee, as their
experience is highly valued and their contribution welcomed
in Committee discussions. The Company’s external Auditor,
Deloitte LLP, is also invited to attend all or part of meetings as
appropriate and over the period, the Committee met twice with
Deloitte without members of management being present.
In conjunction with the Board, the Audit and Risk Committee
reviewed the following matters during the year:
• The Group’s internal financial controls that identify, assess,
manage and monitor financial risks, and its other internal
control and risk management systems (encompassed
in the Group’s Risk Management Framework – see page 95
for further details);
• The Financial Statements of the Group and the announcement
of the annual results and the interim statement on the half
year results;
• The Annual Report, to ensure it is fair, balanced and
understandable and provides the Shareholders with the
information necessary to assess the Company’s position,
performance, business model and strategy;
• The performance of the external Auditor and its programme
of work, taking into consideration relevant UK professional and
regulatory requirements;
• The external Auditor’s independence and objectivity;
• Reviewing the provision of non-audit services by the
external Auditor, taking into account relevant regulations
and ethical guidance;
• Review of IT risk and business continuity planning;
• Review of the Company policies, including those relating to
anti-bribery and corruption, anti-facilitation of tax evasion and
the Modern Slavery Act; and
• The consideration of the requirement for an internal
audit function.
95
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 (“EPRA”), the surplus is included
in the calculation of the EPRA net asset value per share at
each reporting date. The fair value calculation of the trading
and development stock is reviewed by a suitably qualified
independent third party valuer. In order to assist the Audit and
Risk Committee in considering the valuations, the fair values
of the investment and development property portfolios are
reviewed and approved by the Property Valuations Committee
which is chaired by independent Non-Executive Director,
Sue Clayton, FRICS.
• Going concern and estimates and judgements
In light of the uncertainty surrounding the impact of Covid-19,
the Committee carefully considered, and concluded upon, the
Group’s ability to continue as a going concern and its viability
for the next five-year period (please see Note 1 to the Financial
Statements and the Report of the Directors, page 115). It also
considered the estimates and judgements discussed in Note
38 to these Financial Statements.
REVIEW OF THE 2020 ANNUAL REPORT
The Committee has reviewed and concluded that the Group’s
Annual Report and Accounts, taken as a whole, are fair,
balanced and understandable. The Committee asked the
following questions during its review of the Annual Report
and Accounts.
Performance
• Is it clear how outcomes are measured using key
performance indicators?
• Is there a good mix of financial and non-financial key
performance indicators?
• Is there an appropriate balance between statutory and
non-statutory performance measures?
• Is it clear that the stated key performance indicators measure
the achievement of the Company’s strategy and how they are
linked to Directors’ remuneration?
• Are movements in key performance indicators over time, both
favourable and adverse, fair and well-explained?
• Are key performance risks explained?
Strategy
• Is the Company’s purpose clearly articulated?
• Does the strategy discuss how the business intends to achieve
its objectives in the context of the market outlook?
• Are the value drivers explained clearly?
• Is there enough information to assess the strategic risks?
Business model
• Are the key elements of the business model clearly explained?
• Are business model risks and disruptions adequately disclosed?
• Do the business risks disclosed link to sensitivities set out
within the Financial Statements?
RISK MANAGEMENT AND INTERNAL CONTROLS
During the year, the Committee and the Board approved the
Group’s Risk Management Framework and this approval is
representative of the emphasis placed by the Committee on
the management and mitigation of risks in order to enable the
development and delivery of the Group’s business objectives.
Encompassed within the Risk Management Framework is
the Board’s responsibility to maintain, monitor and review
the Company’s system of internal controls. Such a system is
designed to manage, rather than eliminate, the risk of failure
to achieve business objectives. Helical’s internal controls are
designed to provide reasonable assurance in the following areas:
• Effectiveness and efficiency of operations;
• Reliability of financial reporting; and
• Compliance with applicable laws and regulations.
It is the responsibility of the Board to ensure that the Company’s
internal control system is effective in preventing losses from risk
events, or identifying risk events, and taking corrective action
when they occur. Oversight of our control system is delegated to
the Committee which identifies, monitors and manages the
principal risks faced by the Group and reviews the effectiveness
of all material controls. The Company’s Executive Committee
continually assesses and monitors the adequacy of the key
internal controls and makes recommendations to the Audit
and Risk Committee regarding the addition of key controls
as necessary.
SIGNIFICANT AREAS OF REVIEW
In discharging its responsibilities in connection with the
preparation of the Financial Statements for the year to
31 March 2020, 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 significant issues 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
small scale and relative simplicity of the business, it does not
consider that an internal audit function would be cost
effective. The Audit and Risk Committee reviewed Helical’s
internal control environment and confirmed that the key
controls had been implemented for the year. This review
did not highlight any material weaknesses in the design
and effectiveness of the Group’s systems and controls.
• Property valuation
The valuation of the Group’s investment and development
portfolio is a key area of judgement in preparing the annual and
half yearly Financial Statements and reports. For this reason,
the fair value of the majority of the Group’s investment
portfolio is determined by independent third party experts
who are familiar with the markets in which the Group operates
and have requisite professional qualifications. Due to the
uncertainty surrounding the impact of Covid-19, the report
issued by the independent valuers includes a clause which
highlights a “material valuation uncertainty”; for more
information, please see Note 15 to the Financial Statements.
The Group’s development stock is accounted for in the
Financial Statements at the lower of cost and net realisable
value. Accordingly, the Committee reviews the assumptions
made in determining the net realisable value of the Group’s
assets. In addition, the Committee reviews those instances
where stock is considered to have a fair value above its current
GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 96
AUDIT AND RISK COMMITTEE REPORT
CONTINUED
DIRECTORS’ REMUNERATION REPORT
97
The Committee noted the following updates to the
Annual Report:
• updating the Group’s Strategy, Business Model and KPIs to
highlight the importance of sustainability (see pages 34–37);
• the Group’s corporate governance reporting has been
enhanced with the inclusion of:
– Helical’s Purpose & Values (pages 82–83);
– a heightened focus on the Company’s Culture and its link
to the long-term sustainability of Helical;
– details of Helical’s efforts to promote diversity throughout
the Company (page 86);
– the Section 172(1) Companies Act 2006 statement
(“s172(1) Statement”) (page 88); and
– enhanced reporting on Helical’s stakeholder engagement
initiatives and the consideration given to stakeholder
interests when decision making (see Governance Report
on pages 88–91):
AUDITOR INDEPENDENCE
The Audit and Risk Committee considers the external Auditor
to be independent. The Committee’s policy is not to award
non-audit services where the outcome of the work is relevant to
a future audit judgement or that could impact the independence
or objectivity of the audit firm. The assignment of non-audit
services to the Company’s Auditor must be approved by the
Committee where the fees for that assignment amount to
more than £50,000 or more than 50% of the relevant year’s
cumulative audit fee. The assignment of non-audit services with
fees below this threshold may be approved by the Committee
Chair. This policy is designed to ensure that the Group receives
the most appropriate advice without compromising the
independence of the Auditor. As part of this policy prior
approval of all non-audit services is required.
During the year, the following non-audit services were
undertaken by Deloitte:
• review of the Half Year Results (£56,200); and
• information in relation to the impact of Covid-19 on going
• review of the Performance Share Plan and Directors’ Bonus
concern (see Report of the Directors page 115); and
Scheme (£9,200).
The Committee considered all the services to be appropriate,
that they were an extension to the role of the external Auditor,
and they did not impact Deloitte’s independence. The non-audit
fees were 17% of the total fees payable to Deloitte, 15% of which
was for the review of the Half Year Results.
ANNUAL GENERAL MEETING
At the Annual General Meeting to be held on 23 July 2020, the
following resolutions relating to the Auditor are being proposed:
• The re-appointment of Deloitte 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.
JOE LISTER
Chair of the Audit and Risk Committee
• the inclusion of a detailed case study on Barts Square,
London EC1 to demonstrate how Helical differentiates itself
(pages 16–29).
The Committee concluded that, taken as a whole, the
Group’s Annual Report and Accounts were fair, balanced
and understandable.
EFFECTIVENESS OF THE EXTERNAL AUDITOR
The Audit and Risk Committee reviewed Deloitte’s fees,
effectiveness and whether the agreed audit plan had been
fulfilled and the reasons for any variation from the plan. As part
of the Committee’s review of the external Auditor’s effectiveness
the Committee considered the following:
• the audit plan (presented to the Committee in November 2019)
with focus on the quality of planning, whether the plan
was designed to suit Helical and whether the agreed
plan was fulfilled;
• the Auditor’s assessment of its independence;
• the quality of the Auditor’s reporting during the year; and
• the relationship between the Auditor and the Group, ensuring
objectivity and independence were maintained.
Two meetings were held between the Auditor and the
Committee without management present to enable open and
objective discussions to be held, enhancing assurance of Auditor
effectiveness.
The Audit and Risk Committee also considered their robustness
and the degree to which they were able to assess key
accounting and audit judgements and the content of their
reports. This was performed through reviewing their reports and
meeting with them to discuss their audit approach and findings.
As a result of their review the Committee concluded that the
audit process, led by Georgina Robb, was effective and efficient
and the re-appointment of Deloitte LLP as the Company’s
Auditor will be proposed at the 2020 AGM.
DEAR SHAREHOLDER,
I am pleased to present the Remuneration Committee’s
Directors’ Remuneration Report (“Report”) for the year to
31 March 2020. I was appointed Chair of this Committee at the
2019 AGM, taking over from Michael O’Donnell who stepped
down from the Board after eight years of service. Sue Farr, who
joined the Board in June 2019 and has been a member of the
Committee for more than 12 months, will take over from me on
re-election to the Board at the 2020 AGM. I would like to take
this opportunity to thank my colleagues for all their support and
assistance in helping me discharge my duties as Chair of the
Remuneration Committee. This Report has been approved by
the Board of Helical plc.
This year’s Report is the first prepared under the 2018 UK
Corporate Governance Code, which applies for accounting
periods commencing on or after 1 January 2019. With the
emphasis placed by the Code on transparency and clarity,
we have taken this opportunity to review the structure of the
Report and have introduced some changes which we hope
will be useful in navigating this section of our Annual Report.
Amongst these changes are an “at-a-glance” section summarising
key points, a specific section on how the Remuneration
Committee has taken account of the provisions of the UK
Corporate Governance Code and an index to where specific
aspects of remuneration can be found within this Report.
PREPARATION OF THIS REPORT
This Report, prepared by the Remuneration Committee on
behalf of the Board, takes full account of the prevailing UK
Corporate Governance Code and the latest Investment
Association (IA) Principles of Remuneration and Institutional
Shareholder Services (ISS) UK and Ireland Proxy Voting
Guidelines, and has been prepared in accordance with the
provisions of the Companies Act 2006 (“the Act”), the Listing
Rules of the Financial Conduct Authority and the Large and
Medium-Sized Companies and Groups (Accounts and
Reports) (Amendment) Regulations 2013 (“Regulations”). The
Act requires the Auditor to report to the Group’s Shareholders
on the audited information within this Report and to state
whether in their opinion those parts of the Report have been
prepared in accordance with the Act. Those parts of the
Report which have been subject to audit are clearly marked.
REMUNERATION REPORT INDEX
This Directors’ Remuneration Report has been divided
into the following sections:
Section
Remuneration at-a-glance
Annual Statement
The Annual Statement on remuneration
by the Chair of the Remuneration Committee.
Remuneration Policy Report
Sets out the Remuneration Policy for Executive
and Non-Executive Directors, which was
approved by Shareholders at the 2018 AGM.
No changes are proposed for the 2020 AGM.
Annual Report on Remuneration
Discloses how the Remuneration Policy was
implemented in the year to 31 March 2020
and how the Policy will be operated in the
year to 31 March 2021.
Pages
98-99
100-101
102-106
107-114
RICHARD COTTON
CHAIR OF THE
REMUNERATION COMMITTEE
“ Helical’s approach to remuneration
is to align executive reward to success
in achieving the Group’s financial
and strategic objectives, whilst
reflecting wider workforce and
peer group comparisons.”
Committee membership and attendance
Independent
Committee meeting
attendance
Richard Cotton1
Sue Clayton
Sue Farr2
Richard Grant
Joe Lister
Michael O’Donnell3
Yes
Yes
Yes
Yes
Yes
Yes
5/5
5/5
3/4
5/5
5/5
2/2
1 Richard Cotton was appointed Chair of the Committee on 11 July 2019 and
will step down from that position at the 2020 AGM.
2 Sue Farr will be appointed Chair of the Committee on re-election to the
Board at the 2020 AGM.
3 Michael O’Donnell served as the Chair of the Committee prior to stepping
down from the Board on 11 July 2019.
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/investors/corporate-governance/
ROLE OF THE COMMITTEE
The Committee assists the Board to fulfil its responsibility
to Shareholders to ensure that the Remuneration
Policy and practices of the Company reward fairly
and responsibly, with a clear link to corporate and
individual performance, having regard to statutory
and regulatory requirements.
In discharging its duties, the Committee focuses on:
• Remuneration policies, including basic pay, long and
short-term incentives;
• Remuneration practice and its cost to the Company;
• Recruitment, service contracts and severance policies;
• Compliance with the UK Corporate Governance Code; and
• The engagement and independence of external
remuneration advisors.
GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 98
DIRECTORS’ REMUNERATION REPORT
CONTINUED
REMUNERATION AT-A-GLANCE
PERFORMANCE HIGHLIGHTS
Our remuneration is directly linked
to the five pillars of our Strategy (see
pages 12-14). Our objective is to maximise
Shareholder return by increasing the net
asset value of the Group, outperforming
our peers and managing a balanced
portfolio with a clear market focus.
We operate a sustainable capital
structure, seeking to attract and retain
the best people with sustainability at
the heart of our business.
EPRA net asset value per share
511p +6.0%
2019: 482p
Total Accounting Return
7.7%
2019: 8.4%
Total Shareholder Return
8.7%
2019: 5.2%
Portfolio Return
MSCI (1 year)
9.6%
2019: 10.1%
MSCI (3 year)
10.2%
2019: 10.2%
EARNINGS FOR THE FINANCIAL YEAR
Total remuneration for Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Salary
£000
Benefits
£000
Pension
£000
545
317
424
66
29
49
–
–
–
Total
£000
611
346
473
Bonus
£000
622
371
467
PSP
£000
1,322
789
1,085
Total
2020
£000
2,555
1,506
2,025
Total
2019
£000
1,732
991
1,369
1. Full details of the Directors’ remuneration for the year can be found in the table on page 107.
ANNUAL TOTAL REMUNERATION COMPARED TO THE 2020 POTENTIAL
The following bar charts show the actual remuneration earned
by the Executive Directors against the minimum, on target and
maximum scenarios for the year.
The elements of remuneration have been categorised into three
components: (i) basic salary and benefits; (ii) annual bonus
(including deferred bonus); and (iii) PSP.
The target scenarios assume 50% payout of the maximum
opportunity under the annual bonus and PSP. In line with the
regulations, we have also shown the maximum scenario with
the impact of 50% share price appreciation over three years.
For the purposes of comparison we have included the single
figure remuneration for the year ending 31 March 2020,
including the impact of the actual share price growth.
Value of remuneration packages at different levels of performance
£’000
3,566
2,854
20%
50%
40%
29%
23%
21%
17%
2,555
14%
38%
24%
24%
1,732
41%
24%
35%
611
100%
1,694
2,130
21%
51%
41%
28%
21%
22%
16%
1,020
43%
23%
34%
346
100%
1,506
14%
38%
25%
23%
1,374
43%
23%
34%
473
100%
2,858
20%
2,275
51%
41%
28%
21%
22%
17%
Minimum On target Maximum
Maximum
with Share
price
growth
Actual
Minimum On target Maximum
Maximum
with Share
price
growth
Actual
Minimum On target Maximum
Maximum
with Share
price
growth
GERALD KAYE
TIM MURPHY
MATTHEW BONNING-SNOOK
Basic salary & benefits
Bonus
PSP
Maximum with 50% share price growth
Actual share price growth
2,025
14%
40%
23%
23%
Actual
99
ANNUAL BONUS PLAN – TARGETS AND OUTCOMES
Performance measure
TPR
TAR
Strategic
50%
25%
20%
Payout target
20%
4.47%
5.00%
100%
7.72%
10.00%
Actual
9.56%
8.05%
%
awarded
50.00%
17.20%
14.42%
Combining these outcomes
with the personal objectives
gives the following payouts:
Bonus
outcome
£000
Bonus
reduction
£000
Bonus
payable
£000
% of
maximum
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
691
412
519
69
41
52
622
371
467
76%
78%
74%
Notwithstanding the Group’s strong performance in the year to 31 March 2020, in the light of the current economic circumstances
caused by the COVID-19 pandemic, and commensurate with action taken elsewhere to reduce overheads and preserve the
Group’s cash resources, the Remuneration Committee, with full support from the Executive Directors, has exercised its discretion
to: (i) reduce the 2019/20 bonus out-turn by 10%; and (ii) deliver the net annual bonus award in deferred shares.
2017 PSP VESTING – TARGETS AND OUTCOMES
Payout target
Performance measure
NAV
TPR
TSR
10%
7.5%
5.5%
39.6%
100%
Actual
%
awarded
The estimated number of shares vesting
are as follows:
15.0%
7.0%
58.0%
5.9%
10.2%
57.5%
0.0%
33.3%
32.5%
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Estimated value
at vesting1
£’000
1,290
789
1,055
Number
293,148
179,407
239,826
1 The share price used to calculate the expected value at vesting was 439.87p, based on the average share price over the three months to 31 March 2020.
The level of PSP vesting in 2020 (65.8% of maximum) demonstrates the successful longer-term performance of the Company with
strong portfolio performance and a corresponding increase in shareholder returns over the performance period.
PSPs GRANTED IN THE YEAR
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Basis of award
(% of salary)
250%
250%
250%
Date of grant
3 June 2019
3 June 2019
3 June 2019
Share awards
number
366,896
213,517
285,379
Face value
of award
£000
1,330
774
1,035
Face value
per share
362.50p
362.50p
362.50p
SHAREHOLDING OF THE EXECUTIVE DIRECTORS
% of salary
0%
250%
500%
750%
1,000%
1,250%
1,500%
1,750%
Shareholding requirement
500%
Gerald Kaye
Chief Executive
Beneficially owned shares
Unvested interests over shares1
280%
1,499%
Shareholding requirement
500%
Tim Murphy
Finance Director
Beneficially owned shares
947%
Unvested interests over shares1
201%
Shareholding requirement
500%
Matthew Bonning-Snook
Property Director
Beneficially owned shares
Unvested interests over shares1
287%
1,155%
1 The value of unvested interests over shares is calculated on the net shares expected to vest of the 2017 PSP award, unvested Deferred Shares and the Restricted Share
Incentive Plan shares at the weighted average share price for the three months to 31 March 2020 of 439.87p.
GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020
100
DIRECTORS’ REMUNERATION REPORT
CONTINUED
101
ANNUAL STATEMENT
WORK OF THE COMMITTEE DURING THE YEAR
The Committee’s work during the year under review included
the following:
Fixed Pay
– The annual salary review for the Executive Directors
and wider workforce.
Performance Related Pay
– The approval of annual bonuses for the year ended
31 March 2019.
– The review of bonus targets for the year ended 31 March 2020.
– The setting of targets for the PSP awards which were
granted in June 2019.
– The approval of the vesting of PSP awards in June 2019
which were originally awarded in June 2016.
Other matters
– The Committee considered feedback received from
shareholder advisory bodies on remuneration.
– The Committee gave consideration to matters relating
to remuneration in the light of the 2018 UK Corporate
Governance Code.
– The Committee updated its terms of reference.
PERFORMANCE, DECISIONS AND REWARD OUTCOMES
Executive performance measures and pay are closely aligned to
Shareholders’ interests with a high proportion of total available
remuneration based on variable pay designed to award the
achievement of long-term strategic objectives. As noted in the
Strategic Report on pages 34 to 37, the EPRA net assets per
share of the Group increased by 6.0% (2019: 3.0%) in the year
under review. The Group’s Total Portfolio Return, as reported
by MSCI (formerly IPD) was 9.6% (2019: 10.1%). The Total
Accounting Return (growth in net asset value plus dividends
paid in the year) was 7.7% (2019: 8.4%).
ANNUAL BONUS SCHEME 2018
Subsequent to the year end, and in accordance with the rules
of the Helical Annual Bonus Scheme 2018, annual bonuses have
been approved for inclusion in the Financial Statements for
the year to 31 March 2020 for Gerald Kaye, Tim Murphy and
Matthew Bonning-Snook. Half of the maximum bonus payable
was dependent on the relative Total Property Return of the
Group, as calculated by MSCI, compared with the MSCI
Central London Offices Total Return Index. One quarter was
determined by the Total Accounting Return of the Group and
the remaining quarter was payable based on strategic/personal
objectives. In accordance with these performance criteria,
bonuses were calculated for the Executive Directors as
follows: Gerald Kaye £691,000, Tim Murphy £412,000 and
Matthew Bonning-Snook £519,000. As all three Executive
Directors satisfy the minimum shareholding guideline of 500%
of salary, bonus awards up to 100% of their base salaries are
eligible to be paid in cash, with the remainder in deferred shares.
However, in the light of the current economic circumstances and
commensurate with action taken elsewhere, the Remuneration
Committee, with full support from the Executive Directors, has
exercised discretion to: (i) reduce the 2019/20 bonus out-turn
by 10%; and (ii) deliver all of the annual bonus award in deferred
shares. Accordingly, the bonuses awarded for the year to
31 March 2020 are: Gerald Kaye £622,000, Tim Murphy
£371,000 and Matthew Bonning-Snook £467,000. Full details
of the targets and the performance against these targets are
set out in the Annual Report on Remuneration.
PERFORMANCE SHARE PLAN 2014
Share awards granted in 2017 under the terms of the 2014
Performance Share Plan were subject to three performance
conditions over the three years to 31 March 2020. One third of
the awards was based on absolute net asset value performance,
the second third of the awards was based on a comparison of
the Group’s portfolio return to the MSCI Annual March Universe
Total Return Index and the final third of the awards was based
on a comparison of the Group’s Total Shareholder Return to that
of a basket of companies in the Real Estate Super Sector. The
performance criteria were measured at the end of the three-
year period and the MSCI conditions were met in full. The TSR
condition was met such that 97.5% of this part of the award will
vest. The net asset value condition was not met. Consequently
65.8% of the awards are expected to vest in June 2020. Full
details of the targets and Helical’s performance are set out in
the Annual Report on Remuneration.
The Committee believes that the provision for annual bonuses
and the expected vesting of the PSP award in respect of the
three-year performance period ended 31 March 2020 accurately
and fairly represents the reward determined by the Group’s
remuneration schemes based on the performance of the Group
over the respective annual and three-year performance periods.
IMPLEMENTATION OF THE POLICY FOR THE YEAR TO
31 MARCH 2021
The Remuneration Policy will be implemented for the year to
31 March 2021 as follows:
• In line with action taken elsewhere, basic salaries will not be
increased from 1 April 2020. Accordingly, Gerald Kaye’s salary
is £544,750, Matthew Bonning-Snook’s salary is £423,750 and
Tim Murphy’s salary is £317,050. No changes will be made to
the provision of benefits;
• The policy of not providing separate pension provision, with
Executive Directors expected to provide for their retirement
from remuneration provided through the Company’s incentive
schemes, remains unchanged;
• For the year to 31 March 2021, annual bonuses will continue
to be capped at 150% of salary with targets based on Total
Property Return (50% of potential), Total Accounting Return
(25% of potential) and strategic/personal objectives (25% of
potential). To the extent that there is low or no bonus payable
on the portfolio/financial measures, the Committee will retain
discretion to reduce (including to zero) the payout under the
strategic/personal targets. One third of any bonus will continue
to be deferred into shares for three years, unless the Executive
Director has met the shareholding guideline, in which case the
annual bonus will be payable in cash up to 100% of salary and
in deferred shares from 100% to 150% of salary;
• The Remuneration Committee will review the stretch target for
the Total Property Return measure, which accounts for 50% of
the total bonus weighting and is currently set at MSCI Central
London Offices Total Return Index +3.25%, at the start of each
bonus year to ensure it remains appropriate;
• The 2020 award under the PSP will be granted over shares equal
to no more than 250% of annual salary. The proposed performance
targets, which are set out in detail in the Annual Report on
Remuneration, will continue to be linked to net asset value per
share growth, Total Property Return versus MSCI and relative
Total Shareholder Return. A two-year post vesting holding
period will apply to these awards to the extent that they vest;
• Shareholding guidelines will remain at 500% of salary; and
• Malus and clawback provisions will continue to operate.
The Committee is committed to ensuring that its Remuneration
Policy remains aligned to the long-term interests of Shareholders
– incentivising management to increase total returns and grow
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 its policy strikes the right balance between fixed annual
remuneration and an incentive structure with challenging targets
which seek to reward outperformance with a mixture of cash-
based bonus payments and longer-term share awards.
Further details of the proposed implementation of the
Remuneration Policy for the year to 31 March 2021 can be
found on page 112.
IMPACT OF THE 2018 UK CORPORATE GOVERNANCE CODE
This is the first year in which the provisions of the 2018 UK
Corporate Governance Code apply to the Group. As a
consequence, the Remuneration Committee has ensured that
the provisions of the Code have been taken into account in
its decisions during the year and has also considered how it
impacts on this Report. The Committee’s response in respect
of the main remuneration-related provisions is set out below.
First, the Code states that pension provision for Directors is
aligned with that provided for the wider workforce. As the
Directors do not receive pensions from the Group,
this provision is not relevant to Helical.
Secondly, the Code suggests that post-employment
shareholding provisions are set to ensure that Directors who
leave the Group are not in a position to immediately liquidate
their shareholdings. The Group has not previously made such
requirements of its Directors. Following the publication of the
Code, the Committee formalised the policy in respect of post
cessation shareholdings for Executive Directors. Although not
part of the 2018 Shareholder approved Remuneration Policy,
and subject to review as part of the 2021 Policy review process,
the policy approved by the Committee is as follows:
• Unvested deferred annual bonus and PSP share awards will be
treated in line with the good leaver/bad leaver provisions
presented in the shareholder approved Remuneration Policy;
• Any PSP awards which vested pre-cessation, but which are still
subject to the two-year holding period will need to be retained
by the individual, post cessation, until the relevant two-year
holding period has expired; and
• No restrictions will apply in respect of own shares held
(whether held as part of the 500% of salary shareholding
guideline or not).
The above approach will be revisited as part of the 2021
Policy review.
The Committee has considered how the Policy and practices are
consistent with the six factors set out in Provision 40 of the 2018
UK Corporate Governance Code:
• Clarity and Simplicity – The current Remuneration Policy
approved at the 2018 AGM was designed to simplify the
arrangements and provide clarity between remuneration
and the performance of the Group. In addition, the changes
being made to the Report this year are designed to assist the
reader in understanding how the Policy is being implemented.
• Risk – The Remuneration Policy contains provisions for malus
and clawback and permits the use of negative discretion by the
Committee to ensure that the outcomes of the performance
related pay components of total remuneration can be adjusted
in the light of overall performance and Shareholder experience.
Executive Directors are required to build substantial
shareholdings in the Company to further ensure that their
personal interests are aligned with those of Shareholders.
• Predictability – The range of potential award outcomes for the
performance related pay components are set out in this Report.
In addition to assessing the range between the minimum and
maximum values of remuneration packages, it also highlights
the impact of share price growth on the maximum awards.
• Proportionality – The Remuneration Policy sets out clear links
between the potential rewards available to Executive Directors,
the implementation of the Group’s business strategy and the
performance outcomes that generate Shareholder value.
Stretching targets are set by the Committee which retains the
ability to adjust remuneration outcomes where these do not truly
reflect the Group’s underlying performance. With a significant
element of remuneration being performance-related and in the
form of equity subject to holding periods, the interests of the
Executive Directors and Shareholders are aligned.
• Alignment to Culture – Helical’s strategy, Values and Purpose
have evolved over the years. Our Executive Directors, along
with our wider workforce, are continually looking to deliver on
our strategy whilst acting in accordance with our Values and
our Culture. The remuneration packages available to them are
aligned with the strategy and designed to incentivise them to
deliver value to our Shareholders.
Finally, the Committee has considered a number of matters as set
out in Paragraph 41 of the UK Corporate Governance Code as
part of its overall oversight of remuneration at the Company.
Specifically, the Committee is satisfied that the level of
remuneration provided to the Directors is appropriate, both by
comparison to the Company’s peer group within the real estate
industry (against which remuneration is benchmarked) and also
in the context of the level of remuneration of the wider workforce
– a team of experienced professionals of whom a significant
number are incentivised in similar ways to the Directors.
The Committee also considered whether the Policy operated
as intended in the light of the Company’s performance and
quantum. The Remuneration Policy measures a range of
performance metrics that are aligned to the Company’s strategy
with the remuneration outcomes being assessed against these.
The ability of the Committee to exercise negative discretion (as
was applied in the year) when the experience of Shareholders
does not match the performance metrics demonstrates that the
necessary checks and balances in place are operating as intended.
The Committee has not been required to engage with
Shareholders in respect of the Policy in the year, as the current
Remuneration Policy was approved at the 2018 AGM for a
period of three years. Appropriate engagement will take place
in advance of the 2021 AGM (when the Policy for the next
three-year period will be proposed) if material changes are
being proposed. The Committee does not view formal
engagement with the workforce on executive remuneration
as being appropriate in a company of Helical’s size.
2020 ANNUAL GENERAL MEETING RESOLUTION
The following resolution relating to remuneration will be
presented at the 2020 AGM to be held on 23 July 2020:
• An advisory resolution in respect of the Annual Statement and
Annual Report on Remuneration for the year to 31 March 2020.
I trust that Shareholders will support the Committee and vote in
favour of this resolution.
I will be happy to respond to any questions Shareholders may
have on this report or in relation to any Committee activities.
If you have questions or would like to discuss any aspect of the
Remuneration Policy, please feel free to contact me through
James Moss (Company Secretary) at jm@helical.co.uk.
RICHARD COTTON
Chair of the Remuneration Committee
4 June 2020
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DIRECTORS’ REMUNERATION REPORT
CONTINUED
REMUNERATION POLICY REPORT
This section of the Remuneration Report sets
out the Remuneration Policy of the Group. The
Committee believes that the Policy continues to
support the Group’s strategy and is aligned with
Shareholders’ interests.
POLICY SCOPE
The Remuneration Policy applies to the Chairman,
Executive Directors and Non-Executive Directors.
POLICY DURATION
The Remuneration Policy report was approved by Shareholders
at the Annual General Meeting held on 12 July 2018 for a
maximum period of three years. No changes are proposed for
the 2020 Annual General Meeting. The Policy will be renewed
at the 2021 AGM and the Committee will seek engagement with
major Shareholders during the next 12 months should any
material changes be considered appropriate.
REMUNERATION POLICY
Helical’s approach to the remuneration of its Executive Directors
is to provide a basic remuneration package combined with an
incentive-based bonus and share scheme structure aligned with
the interests of its Shareholders. The majority of performance-
based awards are judged on the relative performance of the
Group’s real estate portfolio against an industry benchmark
or on the absolute performance of the Group and its Total
Shareholder Return against appropriate industry benchmarks.
The remaining awards are judged on strategic/personal
objectives. 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
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. It also considers
environmental, social, governance and risk issues.
The objective of the Remuneration Policy is 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 and hurdles for any performance related remuneration
schemes; and
• Service agreements incorporating termination payments and
compensation commitments.
PEER GROUP
The Remuneration Committee determined a peer group of
companies at the start of the Policy for benchmarking purposes
(albeit with some caution, given the variances in size and nature
of operations in the sector and more general risk of pay inflation
where too great a reliance is placed on published data) and as a
reference point in ensuring that performance targets are
appropriately stretching and when reviewing the Group’s
relative performance.
The peer group set at the start of the Policy is as follows:
Capital & Counties Properties plc;
McKay Securities plc;
Capital & Regional plc;
NewRiver REIT plc;
Derwent London plc;
RDI REIT plc;
Great Portland Estates plc;
Shaftesbury plc;
Hammerson plc;
St. Modwen Properties plc;
Hansteen Holdings plc;
U+I Group plc;
Intu Properties plc;
Urban & Civic plc; and
LondonMetric Property plc;
Workspace Group plc.
This group will be reviewed and updated in advance of the 2021 AGM.
Directors’ Remuneration Policy Table
The table below summarises the Directors’ Remuneration Policy. No changes to the Policy approved at the 2018 AGM are
being proposed.
Element
Salary
Purpose and link to strategy
Operation
Maximum
Performance targets
• Reflects the value of the
• Normally reviewed annually,
individual and their role and
responsibilities
effective 1 April
• Paid in cash on a monthly
• Reflects delivery against key
basis; not pensionable
personal objectives and
development
• Provides an appropriate level
of basic fixed income,
avoiding excessive risk
arising from over reliance on
variable income
• Takes periodic account
against companies with
similar characteristics and
sector comparators
• Reviewed in context of the
salary increases across the
Group
• No minimum or maximum
salary increase is operated
• N/A
• Salary increases will normally
be aligned to the average
increase awarded to other
employees
• Increases may be above this
level if there is an increase in
the scale, scope or
responsibility of the role or to
allow the basic salary of
newly appointed Executives
to move towards market
norms as their experience
and contribution increases
103
Element
Purpose and link to strategy
Operation
Maximum
Performance targets
Annual bonus
• Provides focus on delivering
returns from the Group’s
property portfolio
• Rewards and helps retain key
Executive Directors and is
aligned with the Group’s risk
profile
• Maximum bonus only
payable for achieving
demanding targets
• Payable in cash (two thirds)
and deferred shares (one
third) unless the
shareholding guideline has
been met, in which case the
annual bonus will be payable
in cash up to 100% of salary
and in deferred shares from
100% to 150% of salary
• Non-pensionable
• Dividend equivalent
payments (in cash or in
shares) may be payable on
deferred shares
• 150% of salary pa for all
• Performance normally
Executive Directors
measured over one year
• The majority of the bonus
potential will be based on
portfolio and financial
targets (50% on Total
Property Return, 25% on
Total Accounting Return)
• Strategic/personal
objectives form the
remaining 25% of targets
• Malus and clawback
provisions apply
Long-term
incentive awards
• Aligned to main strategic
objective of delivering
long-term value creation
conditional share awards
under the 2014 PSP Scheme
• Discretionary annual grant of
• 250% of salary pa for all
• Performance normally
• Aligns Executive Directors’
• Executive Directors are
interests with those of
Shareholders
• Rewards and helps retain key
Executives and is aligned
with the Group’s risk profile
required to retain PSP shares
acquired for at least two
years after vesting
• Dividend equivalent
payments (in cash or in
shares) may be payable
Executive Directors
measured over three years
• 10% of an award vests at
threshold performance
• Performance targets linked
equally to net asset value per
share, Total Property Return
and Total Shareholder Return
• Malus and clawback
provisions apply
Pensions
• There is no Group pension
• N/A
• N/A
• N/A
Other benefits
scheme for Directors and no
contributions are payable to
Directors’ own pension
schemes
• Provide insured benefits to
support the individual and
their family during periods of
ill health, accidents or death
• Cars or car allowances and
fuel allowances to facilitate
effective travel
Share ownership
guidelines
• To provide alignment of
interests between Executive
Directors and Shareholders
Non-Executive
Director fees
• 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
• Benefits provided through
• N/A
• N/A
third party providers
• Insured benefits include:
private medical cover, life
assurance and permanent
health insurance
• Other benefits may be
provided where appropriate
• Executive Directors are
required to build and
maintain a specified
shareholding through the
retention of the post-tax
shares received on the
vesting of awards
• Cash fee paid monthly
• Fees are reviewed on a
• N/A
• Aim to hold a shareholding
to equal or exceed 500% of
basic salary
• No minimum or maximum
fee increase is operated
• N/A
regular basis
• Fee increases may be guided
• Benefits may be provided
where appropriate
• Fixed three-year contracts
with three-month notice
periods
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
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.
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105
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
Pension
Policy
The salary of newly appointed Executive Directors
would reflect the individual’s experience and skills,
taking into account internal comparisons. On initial
appointment and depending on experience, 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,
car fuel allowance, private medical cover, permanent
health insurance and life assurance.
There is no Group pension scheme for Directors
and no contributions are payable to Directors’ own
pension schemes.
Annual bonus Annual bonus arrangements under the terms of the
2018 Annual Bonus Scheme will be made in
accordance with the terms of that scheme, with the
Committee retaining the right to pro-rata any bonus
payable in respect of the year of appointment.
Annual awards under the terms of the 2014 PSP will
be made in accordance with the terms of that Plan.
In line with that of existing Executive Directors.
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.
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.
Long-term
incentives
Share
Incentive Plan
Buy-out
awards
Non-
Executive
Directors
HOW EMPLOYEE PAY IS TAKEN INTO ACCOUNT AND
COMPARED WITH THE REMUNERATION POLICY OF
EXECUTIVE DIRECTORS
All permanent employees of the Group, including Executive
Directors, receive a basic remuneration package including basic
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 and
a car fuel allowance. There is no Group pension scheme for
Directors and no contributions are payable into Directors’ own
pension schemes. For all permanent employees below Board
level, the Company has previously paid pension contributions
of either 10.0% or 12.5% into either a Group Pension Scheme or
personal pension scheme. With effect from 1 April 2020, the
Company has paid pension contributions of 12.5% in respect of
all employees’ pension arrangements, below Board level. Whilst
employees below Board level are not entitled to participate in
the Annual Bonus Scheme, 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 HMRC approved Share Option Scheme has
previously been available for the Committee to grant options to
those who do not receive awards under the Performance Share
Plan. The initial ten-year term of this scheme ends in 2020 and it
will not be renewed. In determining executive remuneration, the
Committee considers the overall remuneration of all the Group’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 the Group’s employees
when drawing up its Remuneration Policy.
GENDER PAY GAP REPORTING
The Group falls below the threshold for mandatory Gender Pay
Gap reporting. Due to the low number of employees, which
could result in distortions of data, the Board does not believe it
appropriate to voluntarily report. Notwithstanding this, the Board
firmly believes in pay equality for equal work and is mindful of
both the legal and moral obligations to ensure that employees
are remunerated in a fair manner regardless of gender.
EXECUTIVE DIRECTORS’ DATES OF APPOINTMENT AND SERVICE CONTRACTS
All service contracts are available for inspection at the registered offices of the Company. Original dates of appointment to the Board
are as follows:
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Notice period
Date of 1st employment
Board appointment
Date of current contract
6 months
6 months
6 months
6 March 1994
1 March 1994
13 March 1995
1 August 2007
28 September 1994
25 July 2016
24 July 2012
25 July 2016
25 July 2016
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 etc. 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 of alternative income received to the Group. Instalment payments will be
reduced by any alternative income.
Under the Annual Bonus Scheme 2018, participants will not normally be entitled to receive any payment under the scheme
following cessation of employment 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 the Group; or any other reason permitted by the
Committee). For good leavers, individuals would cease to accrue amounts in respect of any period after cessation of employment
but would receive any amounts previously deferred into shares under the terms of the Annual Bonus Scheme 2018.
Any share-based entitlements granted to an Executive Director under the Group’s share plans will be determined based on the
relevant plan rules. 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.
Finally, although not part of the 2018 Shareholder approved Remuneration Policy, the Committee has approved the following post
cessation shareholding policy:
• Unvested deferred annual bonus and PSP share awards will be treated in line with the good leaver/bad leaver provisions presented
in the shareholder approved Remuneration Policy;
• Any PSP awards which vested pre-cessation, but which are still subject to the two-year holding will need to be retained by the
individual, post cessation, until the relevant two-year holding period has expired; and
• No restrictions will apply in respect of own shares held (whether held as part of the 500% of salary shareholding guideline or not).
NON-EXECUTIVE DIRECTORS
Non-Executive Directors are appointed by a Letter of Appointment and their remuneration is determined by the Executive Board.
Current Letters of Appointment, setting out the terms of appointment, operate from 1 April 2015 or, if later, the date of appointment.
The appointment of Non-Executive Directors is terminable on three months’ notice. Non-Executive Directors are not eligible to
participate in any new share 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, ongoing participation in awards previously made
in bonus and share schemes will be subject to the rules of those schemes and to the discretion of the Committee.
NON-EXECUTIVE DIRECTORS’ LETTERS OF APPOINTMENT
Non-Executive Director
Richard Grant – Board Chairman and Chair of the Nominations Committee
Richard Cotton – Senior Independent Director
Sue Clayton – Chair of the Property Valuations Committee
Sue Farr – Chair of the Remuneration Committee (from 2020 AGM)
Joe Lister – Chair of the Audit and Risk Committee
Board appointment
24 July 2012
1 March 2016
Commencement date
of current term
1 April 2015
1 March 2016
1 February 2016
1 February 2016
5 June 2019
5 June 2019
1 September 2018
1 September 2018
PSP POST VESTING HOLDING PERIOD AND SHARE OWNERSHIP GUIDELINES
Directors will not normally be permitted to sell shares received through the 2014 PSP, other than to meet taxation and national
insurance contributions liabilities, for at least two years from vesting and until they own shares to the value of 500% of basic salary.
A shareholding guideline of 100% of salary operates for other senior management below Board level.
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REWARD SCENARIOS
The charts below show how the composition of the Executive Directors’ remuneration packages varies under four different
performance scenarios, namely, at minimum (i.e. fixed pay), target (assumed to be 50% of the maximum incentive levels), maximum
levels, all assuming no share price appreciation, and the maximum levels assuming 50% share price appreciation across the
performance period of long-term incentive awards.
The charts are based on:
• Salary levels effective 1 April 2020;
• An approximated annual value of benefits (no pension is provided);
• A 150% of salary maximum annual bonus (with target assumed to be 50% of the maximum);
• A 250% of salary award under the 2014 PSP in line with the normal maximum award (with target assumed to be 50% of the
maximum); and
• In the final column of each chart, share appreciation of 50% across the three-year performance period of the awards made under
Performance Share Plan 2014.
VALUE OF REMUNERATION PACKAGES AT DIFFERENT LEVELS OF PERFORMANCE
£’000
3,471
20%
2,790
49%
39%
29%
24%
1,701
40%
24%
611
100%
36%
22%
17%
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2,010
20%
1,614
49%
39%
29%
22%
24%
17%
980
40%
24%
36%
346
100%
2,698
20%
2,168
49%
39%
29%
24%
1,321
40%
24%
473
100%
36%
22%
17%
Minimum Target Maximum Maximum
Minimum Target Maximum Maximum
Minimum Target Maximum Maximum
Non-Executive Directors
with
share price
growth
with
share price
growth
with
share price
growth
GERALD KAYE
TIM MURPHY
MATTHEW BONNING-SNOOK
Basic salary & benefits
Bonus
PSP
Maximum with 50% share price growth
Richard Grant
Sue Clayton
Richard Cotton
Sue Farr 5
Joe Lister
Michael O’Donnell 6
Michael Slade 6
Total
ANNUAL REPORT ON REMUNERATION
This part of the Directors’ Remuneration Report explains how the Group has implemented the Remuneration Policy in the year
to 31 March 2020 and how the policy is intended to be implemented in the year to 31 March 2021.
APPLICATION OF THE REMUNERATION POLICY IN THE YEAR TO 31 MARCH 2020
This section has been subject to audit unless otherwise stated.
BALANCE OF FIXED VERSUS VARIABLE PAY (UNAUDITED)
In line with its policy, the Committee seeks to ensure that the balance of remuneration provides a basic salary 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 2020, the balance of fixed versus variable pay on an actual basis for the Executive Directors in office throughout
the year compared to the maximum payable was as follows:
Basic salaries and benefits-in-kind
Annual Bonus Scheme 2018
Deferred bonus dividend shares
Performance Share Plan shares vested
Actual
£000
Share of total
%
Maximum
£000
Share of total
%
1,430
1,460
62
3,134
6,086
23%
24%
1%
52%
100%
1,430
1,928
62
4,760
8,180
17%
24%
1%
58%
100%
Note: Performance Share Plan shares 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 2020 in accordance with the terms of the Performance Share Plan 2014.
DIRECTORS’ REMUNERATION
Total remuneration in respect of the Directors in the year to 31 March 2020 was as follows:
Year to 31 March 2020
Executive Directors
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Fixed
Share
Incentive
Benefits 1
£000
Plan 2
£000
Sub-total
£000
Variable
Annual
cash
bonus
£000
Deferred
bonus
shares
£000
Share 3,4
awards
£000
Basic
salary/fees
£000
Sub-total
£000
Total
£000
545
317
424
1,286
128
58
70
39
55
17
44
1,697
59
22
42
123
–
–
–
–
–
–
16
139
7
7
7
21
–
–
–
–
–
–
–
611
346
473
1,430
128
58
70
39
55
17
60
21
1,857
–
–
–
–
–
–
–
–
–
–
–
–
622
371
467
1,460
1,322
789
1,085
3,196
1,944
1,160
1,552
4,656
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,555
1,506
2,025
6,086
128
58
70
39
55
17
60
1,460
3,196
4,656
6,513
1 Benefits include the provision of a car/car allowance, fuel allowance, private medical cover, life assurance and permanent health insurance. Significant individual benefits
included £38,000 and £22,000 car benefit for Gerald Kaye and Matthew Bonning-Snook respectively.
2 The Share Incentive Plan figure relates to the free and matching shares awarded under the Helical Bar 2002 Approved Share Incentive Plan, details of which are on page 111.
3 Value of PSP awards based on average share price over three months to 31 March 2020 of 439.87p. Dividend shares awarded to Directors on 24 June 2019 under the terms
of the Annual Bonus Scheme 2012 are included at their vesting price of 354.50p.
4 The PSP award values include share price appreciation totalling £351,000 for Gerald Kaye, £215,000 for Tim Murphy and £287,000 for Matthew Bonning-Snook.
5 Sue Farr was appointed to the Board on 5 June 2019.
6 Michael Slade and Michael O’Donnell stepped down from the Board on 11 July 2019.
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DIRECTORS’ REMUNERATION REPORT
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Sub-total
£000
Total
£000
DETERMINATION OF ANNUAL BONUS OUTCOME
The first table below sets out the financial measures and strategic objectives and their respective outcomes under the terms of the
Annual Bonus Scheme 2018. These measures apply to all Executive Directors equally. The second table sets out the personal
objectives for each Executive Director, which account for 5% of the maximum bonus payable. The sum of these provides each
Director with a percentage payout of their maximum bonus, capped at 150% of basic salary. This is set out in the third table below.
Year to 31 March 2019
Executive Directors
Gerald Kaye
Tim Murphy
Matthew Bonning–Snook
Non–Executive Directors
Michael Slade
Sue Clayton
Richard Cotton
Richard Gillingwater 4
Richard Grant
Michael O’Donnell
Joe Lister
Total
Fixed
Share
Incentive
Benefits 1
£000
Plan 2
£000
Sub-total
£000
Variable
Annual
cash
bonus
£000
Deferred
bonus
shares
£000
Basic
salary/fees
£000
532
310
414
1,256
57
24
45
126
155
68
55
70
16
70
55
26
–
–
–
–
–
–
7
7
7
21
–
–
–
–
–
–
–
596
341
466
532
310
414
1,403
1,256
223
55
70
16
70
55
26
–
–
–
–
–
–
–
195
77
111
383
–
–
–
–
–
–
–
Share 3
awards
£000
409
263
378
1,136
650
903
1,050
2,689
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,732
991
1,369
4,092
223
55
70
16
70
55
26
1,703
194
21
1,918
1,256
383
1,050
2,689
4,607
1 Benefits include the provision of a car/car allowance, fuel allowance, private medical cover, life assurance and permanent health insurance. Significant individual benefits
included £38,000 and £32,000 car benefit for Gerald Kaye and Michael Slade respectively.
2 The Share Incentive Plan figure relates to the free and matching shares awarded under the Helical Bar 2002 Approved Share Incentive Plan, details of which are on page 111.
3 PSP awards are included at their actual vesting values in June 2019 of 362.50p. The table included in the 2019 Financial Statements included share awards at the average
share price over the three months to 31 March 2019 of 335.02p. Dividend shares awarded to Directors on 26 July 2018 under the terms of the Annual Bonus Scheme 2012 are
included at their actual vesting price of 334.00p
4 Richard Gillingwater stepped down from the Board on 12 July 2018.
The information in this section has been audited.
HELICAL ANNUAL BONUS SCHEME 2018
Gerald Kaye, Tim Murphy and Matthew Bonning-Snook participate in the Annual Bonus Scheme 2018, which was approved by
Shareholders at the 2018 AGM. This scheme provides annual bonuses based on the performance of the property portfolio, the
Group and the individual Directors and is aligned with Shareholders’ interests with appropriate hurdles and Shareholder protections.
The main features of the Annual Bonus Scheme 2018 are as follows:
• 50% of the maximum annual bonus will be payable if the Total Property Return (“TPR”) of the Group’s property portfolio matches
or exceeds the performance of the MSCI Central London Offices Total Return Index (“Index”) plus 3.25%, with 20% of this part of
the award paid out if the performance matches the performance of the Index;
• 25% of the maximum annual bonus will be payable if the Total Accounting Return (“TAR”) of the Group (Growth in IFRS NAV plus
dividends), calculated annually, is or exceeds 10.0%, with 20% of this part of the award paid out if the TAR is 5.0%; and
• 25% of the maximum annual bonus will be payable if strategic/personal objectives, to be determined by the Committee and
reported on retrospectively each year, are met.
The Committee will regularly review the threshold and maximum TPR and TAR targets to ensure they remain appropriate to the
Group’s strategy and market conditions.
SHAREHOLDER PROTECTIONS
• Annual bonus payments to individual Directors will be restricted in any financial year to 150% of salary;
• Until the minimum shareholding guideline of 500% of salary is met, two thirds of any payment is made in cash after the relevant
year end and one third is deferred for three years into Helical plc shares. Once the minimum shareholding guideline is met, any
bonus payment is normally made in cash up to 100% of salary and in deferred shares from 100% to 150% of salary;
• The Committee has a general negative discretion surrounding bonus payments and, to the extent there is a low or no bonus
payable on the financial measures, it will retain the discretion to reduce (including to zero) the payment under the strategic/
personal targets;
• The scheme will operate malus and clawback provisions, whereby amounts deferred, or the net of tax amounts paid, may be
recovered or withheld in the event of a misstatement of results, an error being made in assessing the calculation or in the event
of gross misconduct; and
• The Committee will have discretion to award annual bonuses in deferred shares (in full or in part) irrespective of an Executive
Director’s shareholding guidelines, although it is expected that this discretion would only be used in exceptional circumstances.
OTHER MATTERS
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 standard 5% in ten-year dilution limit will apply.
Metric
Performance condition
TPR
TAR
Total Property Return v MSCI Central London Offices Total Return Index
20% of the maximum bonus available pays out if the Group’s TPR matches
the performance of the Index increasing pro-rata to 100% for matching or
exceeding the Index plus 3.25%.
Total Accounting Return
20% of the maximum bonus available pays out if the Group’s TAR, adjusted
for performance related awards and calculated annually, exceeds 5.0%
increasing pro-rata to 100% for a TAR of 10.0% or greater.
Weighting
Threshold
target
50.00%
4.47%
Stretch
target
7.72%
Outcome
% of bonus
payable
9.56%
50.00%
25.00%
5.00%
10.00%
8.05%
17.20%
Strategic Corporate objectives
6.67%
75.00%
5.00%
1. Obtaining “equity” from third party investors to fund the Group’s
schemes. Equity to include funds from any source including individual
project equity participation, strategic partners or shareholders.
2. Taking active steps to improve the share rating, including increasing the
profile of the Group through an expanded Investor Relations programme.
3. Make improvements towards best practice, for a Group of Helical’s size,
in ESG matters.
Pipeline of schemes
1. Seek to acquire at least one significant high-quality project in the year
which complements the existing portfolio and which is consistent with the
Group’s strategy and long-term plans
Annualised EPS target
1. An annualised EPS target as at 31 March 2020 on a see-through basis,
excluding non-core assets with nil increase in recurring administration costs.
Subtotal from financial and strategic objectives
6.67%
50.00%
3.33%
6.67%
20.00%
95.00%
91.26%
6.09%
72.10%
14.42%
81.62%
Executive Director
Gerald Kaye
Subtotal for Gerald Kaye
Tim Murphy
Subtotal for Tim Murphy
Matthew Bonning-Snook
Weighting
Target
2.5%
2.5%
5.0%
2.5%
2.5%
5.0%
2.5%
2.5%
Successful lettings at The Bower, London EC1 with
base and stretch targets
Successful sales of residential units at Barts Square,
London EC1 with base and stretch targets
Improved debt maturity with base and stretch targets
Improved cost of debt with base and stretch targets
Successful lettings at Kaleidoscope, London EC1 with
base and stretch targets
Successful lettings at Trinity, Manchester with base
and stretch targets
Subtotal for Matthew Bonning-Snook 5.0%
The total annual bonus for the year ended 31 March 2020 is set out below:
Committee’s assessment of the
extent to which the performance
targets have been met
% of bonus
payable
100%
20%
100%
100%
0%
0%
2.5%
0.5%
3.0%
2.5%
2.5%
5.0%
0.0%
0.0%
0.0%
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Maximum
bonus payable
(150% basic
salary)
£000
817
476
636
Basic
salary
£000
545
317
424
Bonus
outcome
%
84.6%
86.6%
81.6%
Bonus
outcome
£000
Bonus
reduction
£000
691
412
519
69
41
52
Bonus
payable
£000
622
371
467
Cash
£000
–
–
–
Deferred
shares
£000
622
371
467
All Executive Directors satisfy the minimum shareholding guideline of 500% of salary and bonuses up to 100% of their base salaries
are eligible to be paid in cash, with the remainder in deferred shares. However, in light of the current economic circumstances and
commensurate with action taken elsewhere to reduce overheads and preserve the Group’s cash resources, the Remuneration
Committee, with full support from the Executive Directors, has exercised its discretion to reduce the bonus calculated by 10%
and to deliver all of the net annual bonus award in deferred shares.
GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020
110
DIRECTORS’ REMUNERATION REPORT
CONTINUED
111
HELICAL ANNUAL BONUS SCHEME – DEFERRED SHARES
Under the terms of the Annual Bonus Scheme 2016, one third of annual bonuses awarded to scheme participants each year were
deferred for three years into Helical plc shares. Under the Annual Bonus Scheme 2018, the same applies unless an Executive
Director satisfies the minimum shareholding guideline, in which case up to 100% of any bonus is payable in cash with the remainder
in deferred shares. Deferred shares awarded under the terms of these schemes, and which vested during the year to 31 March 2020,
are as noted in the table below:
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Deferred shares
1 April 2019
377,049
42,434
315,044
2019 bonus
award
3 June 2019
53,836
21,364
30.516
2016 award
vesting
24 June 2019
(105,924)
–
(97,888)
Deferred shares
31 March 2020
Expected 1
2020
award
Dividend shares
awarded on
2016 vesting
324,961
63,798
247,672
141,469
84,283
106,144
9,094
–
8,404
1 The expected 2020 deferred share award represents the deferred share element of the annual bonus awarded in respect of the year to 31 March 2020 at 439.87p per share,
the average share price over the three months to 31 March 2020.
PSP AWARDS VESTING IN 2020
The PSP award granted on 7 June 2017 will vest after 7 June 2020. The expected vesting percentage is as follows:
PSP AWARDS GRANTED IN THE YEAR
The following conditional awards were granted on 3 June 2019 under the 2014 PSP:
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Basis of award
(as a % of salary)
Face value
£000
250%
250%
250%
1,330
774
1,035
Vesting at threshold
Vesting at maximum
Performance period
10%
10%
10%
100%
100%
100%
3 years to 31 March 2022
3 years to 31 March 2022
3 years to 31 March 2022
Details of the performance targets attached to the awards are set out on page 112.
The total number of awards made to Directors under the terms of the 2014 PSP which have not yet vested are as follows:
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Shares awarded
07.06.17
at 320.0p
Shares awarded
01.06.18
at 375.0p
Shares awarded
03.06.19
at 362.5p
445,312
272,531
364,312
343,333
199,800
267,066
366,896
213,517
285,379
Total shares
awarded
1,155,541
685,848
916,757
Weighting
33.33%
Threshold
target
7.5%
Stretch target
15.0%
Actual
5.9%
% vesting
0.00%
It is currently expected that 65.8% of the shares awarded on 7 June 2017, 66.3% of the shares awarded on 1 June 2018 and 66.9%
of the shares awarded on 3 June 2019 will vest.
Metric
Performance condition
NAV
(fully diluted
triple net)
TPR
TSR
Total
Net Asset Value Growth
10% of this part of an award vests for pre-dividend
compound NAV growth of 7.5% pa increasing
pro-rata to 100% of this part of an award vesting
for pre-dividend compound NAV growth of 15% pa
Total Property Return v MSCI Annual March
Universe Total Return Index
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
Total Shareholder Return
10% of this part of an award vests for median
ranking increasing pro-rata to 100% of this part of
an award for upper quartile or above performance
33.33%
33.33%
Median
5.52%
Median
39.6%
Upper
quartile
7.03%
Upper
quartile
58.0%
10.16%
33.33%
57.5%
32.50%
65.83%
Based on the above and given that the net asset 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 are as follows:
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Number of shares at
grant
Number of shares
expected to lapse
Number of shares
expected to vest
445,312
272,531
364.312
152,164
93,124
124,486
293,148
179,407
239,826
Estimated value
at vesting1
£’000
1,290
789
1,055
VESTING OF PSP AWARDS OVER THE LAST TEN YEARS (UNAUDITED)
Awards to Executive Directors, in office during each year and excluding leavers, which have vested or are expected to vest in
accordance with the terms of the 2004 and 2014 PSPs in the last ten years are as follows:
2004 PSP
2014 PSP
100%
80%
60%
40%
20%
0%
Nil
2011
67%
67%
29%
33%
33%
12%
Nil
Nil
33%
33%
33%
33%
33%
33%
33%
2012
2013
2014
2015
2016
2017
2018
2019
2020
1 The share price used to calculate the expected value at vesting was 439.87p, based on the average share price over the three months to 31 March 2020.
MSCI
NAV
TSR
The share awards presented for the comparatives in the remuneration table on page 108 are based on the 2014 PSP awards
granted on 1 June 2016. The three-year performance period to 31 March 2019 showed that the net asset value per share, calculated
in accordance with the terms of the 2014 PSP, had increased by 5.8% pa. During this three-year period the total return of Helical’s
property portfolio, as determined by MSCI IPD, was 10.2% compared to the upper quartile of the MSCI Annual March Universe Total
Return Index which showed a return of 8.3%. The TSR of the Company during the period was minus -9.3% compared to the median
of plus 15.2% and upper quartile of 29.4%. Therefore, 33.33% of the shares vested in total. The share price used to calculate the
expected value at vesting for the 2016 PSP awards in the 2019 Annual Report was 335.02p (based on the average share price over
the three months to 31 March 2019). The actual share price at vesting on 1 June 2019 was 362.50p and the comparative figures reflect
these actual vesting share prices.
The 2004 PSP operated with two vesting conditions. The TSR condition was added to the 2014 PSP.
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:
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
3 June 2019
at 362.50p
19 July 2019
at 363.50p
3 September
2019
at 354.00p
3 December
2019
at 413.50p
6 January 2020
at 470.50p
16 March 2020
at 295.00p
1,365
1,365
1,365
1,155
700
1,146
381
381
381
327
327
327
330
201
328
456
456
456
Shares held by the Trustees of the Plan at 31 March 2020 were 560,496 (2019: 517,996).
GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 112
DIRECTORS’ REMUNERATION REPORT
CONTINUED
113
IMPLEMENTATION OF THE REMUNERATION POLICY FOR THE YEAR TO 31 MARCH 2021
This section has not been subject to audit unless stated.
FIXED REMUNERATION
EXECUTIVE DIRECTORS’ BASIC ANNUAL SALARY
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.
The Committee’s policy in respect of basic salaries is that they
should be reviewed annually and increased to reflect an
appropriate level of inflation (being linked to the Retail Price
Index) 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
contributions increase.
In light of the current economic situation and commensurate
with action taken elsewhere to reduce overheads and preserve
the Group’s cash resources, the Executive Directors have agreed
not to take the normal inflationary increase from 1 April 2020.
Accordingly, the basic salaries will remain unchanged for the
year to 31 March 2021 and are:
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
From
1 April
2020
£
544,750
317,050
423,750
BENEFITS-IN-KIND AND PENSION PROVISION
Benefits-in-kind provided to Executive Directors comprise the
provision of a company car or car allowance, fuel allowance,
private medical cover, permanent health insurance, life insurance
and participation in the Company’s Share Incentive Plan. There is
no Group pension scheme for Directors and no contributions will
be paid by the Group to the Directors’ own pension schemes.
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. Directors are required to hold
vested shares for a further two years after vesting.
Performance conditions for the awards to be granted in 2020
will be equally weighted and measured over the three years to
31 March 2023 as follows:
GROWTH IN NET ASSET VALUE
The “fully diluted triple 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 and
changes in issued share capital):
Annual compound increase after three years
% of award vesting
12.5% pa or more
33.3
Between 5.0% pa and 12.5% pa
Pro-rata between 3.3 and 33.3
5.0% pa
Below 5.0% pa
3.3
nil
If UK inflation (RPI) is higher than 3% pa over the three-year
period then the required compound increases will be raised by
the excess over the 3% pa average.
TOTAL PROPERTY RETURN VERSUS MSCI PROPERTY FUNDS
The Total Property Return of the Group’s property portfolio will be
compared to the MSCI Central London Offices Total Return Index.
Ranking after three years
Upper quartile or above
% of award vesting
33.3
Between median and upper quartile
Pro-rata between 3.3 and 33.3
Median
Less than median
3.3
nil
RELATIVE TOTAL SHAREHOLDER RETURN
The comparator group for the awards to be granted in 2020 will
be those companies noted under Peer Group on page 102 which
remain listed.
Ranking after three years
Upper quartile or above
% of award vesting
33.3
PERFORMANCE RELATED REMUNERATION
Between median and upper quartile
Pro-rata between 3.3 and 33.3
HELICAL ANNUAL BONUS SCHEME 2018
Gerald Kaye, Tim Murphy and Matthew Bonning-Snook will
participate in the Annual Bonus Scheme 2018 which was
approved by Shareholders at the 2018 AGM. This scheme
provides annual bonuses based on the performance of the
property portfolio, the Group and the individual Directors and is
aligned with Shareholders’ interests with appropriate hurdles
and Shareholder protections. The main features and Shareholder
protections of this scheme are set out on page 108. The Scheme
will operate the same way in the year to 31 March 2021 as it did in
the year to 31 March 2020. The strategic/personal objectives for
each Executive Director are set by the Remuneration Committee
and will be reported on retrospectively in the Annual Report for
the year ended 31 March 2021.
PERFORMANCE SHARE PLAN 2014
It is anticipated that long-term incentives will be granted to all
Executive Directors and senior management in June 2020 in the
form of nil cost options awarded under the terms of the 2014
PSP Scheme. For Executive Directors the awards will be granted
up to a maximum of 250% of basic salary as at 31 March 2020.
Median
Less than median
3.3
nil
Share awards will lapse in full where:
• Net asset value per share (having added back dividends and
changes in issued share capital) does not increase over the
three-year performance period; or
• The gross return falls below the MSCI median, the growth in
triple net asset value is below 5.0% pa and relative TSR is
below median over the three-year period.
NON-EXECUTIVE DIRECTORS’ FEES
The fee payable to the Chairman remains at £150,000. The base
fees payable to Non-Executive Directors were reviewed and
maintained at £48,000 pa from 1 April 2020. The additional fee
payable to the Chairs of the Audit and Risk, Remuneration and
Property Valuations Committees remains at £10,000 pa.
PAYMENTS FOR LOSS OF OFFICE (AUDITED)
No payments were made to Directors in the year for loss of
office or to past Directors.
OTHER REMUNERATION MATTERS
SHARE PRICE PERFORMANCE AND
TOTAL SHAREHOLDER RETURN (TSR)
The market price of the ordinary shares of Helical plc at 31 March
2020 was 350.00p (2019: 330.50p). This market price varied
between 243.00p and 526.00p and at an average of 392.83p
during the year.
The Total Shareholder Returns for a holding in the Group’s
shares in the three and 10 years to 31 March 2020 compared to
a holding in the FTSE 350 Supersector Real Estate Index are
shown in the graphs below. This index has been chosen because
it includes the majority of listed real estate companies.
TSR – THREE YEARS TO 31 MARCH 2020
The graph showing the relative performance of Helical during
the three years to 31 March 2020 matches the performance
period for the 2017 PSP award granted on 6 June 2017 and
which will vest after 6 June 2020.
TOTAL SHAREHOLDER RETURN
150
125
100
75
50
25
0
Mar
2017
Mar
2018
Mar
2019
Mar
2020
Helical
FTSE 350 Supersector Real Estate Index
Source: Datastream (Thomson Reuters).
This graph shows the value, by 31 March 2020, of £100 invested
in Helical on 31 March 2017, compared with the value of £100
invested in the FTSE 350 Supersector Real Estate Index.
TSR – TEN YEARS TO 31 MARCH 2020
The graph below shows the base position, at 31 March 2010,
from which subsequent performance is measured, as required
by the Regulations.
TOTAL SHAREHOLDER RETURN
250
200
150
100
50
0
Mar
’10
Mar
’11
Mar
’12
Mar
’13
Mar
’14
Mar
’15
Mar
’16
Mar
’17
Mar
’18
Mar
’19
Mar
’20
Helical
FTSE 350 Supersector Real Estate Index
Source: Datastream (Thomson Reuters).
REMUNERATION OF THE CHIEF EXECUTIVE
Comparing the ten-year TSR of the Company, set out opposite,
to the remuneration of the Chief Executive, the table below
presents single figure remuneration for the Chief Executive over
the period, since 1 April 2010, together with past annual bonus
payouts and the vesting of long-term incentive share awards:
Year ended
Name
31 March 2020 Gerald Kaye
31 March 2019 Gerald Kaye
31 March 2018 Gerald Kaye
31 March 2017 Gerald Kaye
31 March 2016 Michael Slade
31 March 2015 Michael Slade
31 March 2014 Michael Slade
31 March 2013 Michael Slade
31 March 2012 Michael Slade
31 March 2011 Michael Slade
Total
remuneration
£000
Annual
bonus
(% of max
payout)
PSP
(% of max
vesting)
2,557
1,732
2,209
2,6352
3,867
5,534
3,343
1,523
541
538
761
91
75
100
100
100
100
65
–
–
66
33
46
66
100
100
62
–
–
–
1 85% before the application of negative discretion by the Committee.
2 The total remuneration of Gerald Kaye includes the period whilst he was an
Executive Director but prior to his appointment as CEO on 25 July 2016.
CHIEF EXECUTIVE’S REMUNERATION COMPARED
TO REMUNERATION OF HELICAL EMPLOYEES
Percentage increases in Chief Executive remuneration:
2020
£000
2019
£000
Change
%
Average
change for
Helical
employee
%
Chief Executive
Salary
544.8
532.0
Benefits and share incentive plan
66.6
64.5
2.4%
3.2%
3.1%
1.3%
Annual bonus
622.3
727.2
-14.4%
-19.0%
CEO PAY RATIO
As Helical has fewer than 250 employees, there is no
requirement to disclose the CEO pay ratio. Given the very low
number of employees and the pay data required to be disclosed,
voluntary disclosure is not considered appropriate at this time
but this approach will be kept under review.
RELATIVE IMPORTANCE OF THE SPEND ON PAY
Staff costs
Distributions to Shareholders1
2020
£000
9,075
10,437
2019
£000
9,289
12,055
Net asset value of the Group
598,689
567,425
1 In respect of the financial year to which they relate.
Change
%
-2.3%
-13.4%
+5.5%
GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 114
DIRECTORS’ REMUNERATION REPORT
CONTINUED
REPORT OF THE DIRECTORS
115
DIRECTORS’ SHARE INTERESTS AND SHAREHOLDING GUIDELINES (AUDITED)
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
1 Salaries as at 31 March 2020.
2 Share ownership guideline is 500% of salary.
3 Value as per the weighted average share price for the three months to 31 March 2020 of 439.87p.
DIRECTORS’ SHAREHOLDINGS (AUDITED)
Salary1
£
544,750
317,050
423,750
Share
ownership
guideline2
£
2,724,000
1,585,000
2,119,000
Value of
beneficially
held shares3
£
8,167,000
3,003,000
4,893,000
Ratio of
shares held
to salary
%
1,499
947
1,155
Executive Directors
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Non-Executive Directors
Richard Grant
Richard Cotton
Sue Clayton
Sue Farr2
Joe Lister
Past Directors
Michael Slade3
Michael O’Donnell3
Legally
owned
31.3.19
Legally1
owned
31.3.20
Share
Incentive Plan
unrestricted
31.3.20
Beneficially1
held total
31.3.20
1,700,252
659,594
964,890
1,816,747
662,981
1,072,546
39,891
19,777
39,849
1,856,638
682,758
1,112,395
Deferred
shares
31.3.20
324,961
63,798
247,672
Share
Incentive Plan
restricted
31.3.20
PSP
awards
unvested
31.3.20
18,739
16,190
18,313
1,155,541
685,848
916,757
15,000
25,000
–
–
–
15,000
25,000
–
6,000
3,200
12,164,203
11,996,777
67,000
67,000
–
–
–
–
–
–
–
15,000
25,000
–
6,000
3,200
11,996,777
67,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 Or at cessation if earlier.
2 The shareholding of Sue Farr is held by a connected person.
3 Michael O’Donnell and Michael Slade retired from the Board on 11 July 2019.
The three Executive Directors of Helical have an average length of service of over 25 years and have built up a shareholding during
that time of circa 3.7m shares with a market value at 31 March 2020 of circa £16.1m at the weighted average share price for the
three months to 31 March 2020 of 439.87p.
ADVISORS TO THE COMMITTEE
The Committee consults the Chief Executive and Finance Director about its proposals and has access to professional advice from
FIT Remuneration Consultants LLP (“FIT”), members of the Remuneration Consultants Group, which is responsible for developing
and maintaining the Code of Conduct for Consultants to Remuneration Committees of UK listed companies. FIT is independent of
both the Group and its Directors and, as such, the Committee is satisfied that the advice received was objective and independent.
Terms of reference for the remuneration consultants, which provided no other services to the Company, are available from the
Company Secretary on request. Fees paid to FIT in the year to 31 March 2020 amounted to £20,951 (2019: £45,561). Fees are
charged on a time plus disbursements basis.
SHAREHOLDER VOTING AT THE LAST AGM
Details of the 2019 advisory Annual Report on Remuneration vote and 2018 binding Remuneration Policy vote were as follows:
2019 Annual Report on Remuneration
119,956,767
97,131,716
2018 Remuneration Policy
118,610,741
89,918,397
Issued
For
%
99.3
97.0
Against
712,513
2,736,254
%
0.7
3.0
Withheld
973,288
Total
98,817,517
12,860
92,667,511
The Committee was pleased to note the level of Shareholder support for the Annual Report on Remuneration last year.
Approved by the Board on 4 June 2020 and signed on its behalf.
RICHARD COTTON
Chair of the Remuneration Committee
STRATEGIC REPORT
A review of the Company’s business during the year, the
principal and emerging risks and uncertainties it faces, as well
as future prospects and developments, are included in the
Strategic Report on pages 1–77 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 125 and Consolidated Statement
of Comprehensive Income on page 125. An interim dividend
of 2.70p (2019: 2.60p) was paid on 31 December 2019 to
Shareholders on the Shareholder register on 30 November
2019. A final dividend of 6.00p (2019: 7.50p) per share is
recommended for approval at the Annual General Meeting
(“AGM”) to be held on 23 July 2020 and, if approved, will be
paid on 27 July 2020 to Shareholders on the register on
26 June 2020. The total ordinary dividend paid in the year
of 10.20p (2019: 9.60p) per share amounts to £12,219,000
(2019: £11,406,000) (see Note 12 to the Financial Statements).
CORPORATE GOVERNANCE
During the year ended 31 March 2020 the Group has
consistently applied the Principles of good corporate
governance contained in the 2018 UK Corporate Governance
Code (the “Code”), and has complied with the provisions
of the Code in full. Please see page 82 for more detail.
DIRECTORS
The Directors who held office during the year, and up to the
date of this report, are listed alongside their biographical details
on pages 80 and 81. All the Directors will be offering themselves
for election or re-election, as appropriate, at the 2020 AGM.
Details of Directors’ remuneration, including their interests in
share awards, and its alignment with the Company’s strategy
and the promotion of long-term sustainable success, are set out
in the Directors’ Remuneration Report on pages 97–114. Details
of the Directors’ interests in the ordinary shares of the Company
are shown on page 114.
GOING CONCERN
The Directors have considered the appropriateness of adopting
a going concern basis in preparing the Financial Statements.
Their assessment is based on forecasts for the next 12-month
period, with the potential impact of Covid-19 being an area of
focus and including severe but plausible downside scenarios on
the Principal Risks and uncertainties.
The key assumptions used in the review are summarised below:
• The Group’s rental income receipts were modelled for each
tenant on an individual basis;
• Existing loan facilities remain available, but no new financing
is arranged; and
• Free cash is utilised to repay debt/cure bank facility covenants.
The results of this review demonstrated the following:
• The Group has £279m of cash and undrawn bank facilities,
including in joint ventures, at 31 March 2020 and there is no
debt repayable within the forecast period;
• The Group could withstand receiving no rental income during
the going concern period (excluding the impact on income
covenants);
• The forecasts show that all bank facility financial covenants
will be met throughout the review period, with headroom to
withstand a 30% fall in rental income;
• Whilst the Group has a WAULT of 7.1 years, in a downside
scenario whereby all tenants, with lease expiries or break
options in the going concern period, exercise their breaks
or do not renew at the end of their leases, and with no
vacant space let or re-let, the rental income covenants
would be met throughout the review period;
• Based on the forecasts for the next quarter, June 2020,
rental income could fall by 36% before income covenants
would come under pressure;
• Property values could fall by 49% before loan to value
covenants come under pressure; and,
• Asset sales could be utilised to generate additional cash
to repay debt, materially increasing covenant headroom.
Based on this analysis, the Directors have adopted a going
concern basis in preparing the accounts for the year ended
31 March 2020.
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. In accordance with the Code provision 7,
the Board has a well-established process for the management
of conflicts of interest.
DIRECTORS’ LIABILITY INSURANCE AND INDEMNITY
The Company maintains Directors’ and Officers’ Liability
Insurance which is subject to annual renewal. To the extent
permitted by UK Law, the Company also indemnifies the
Directors against legal proceedings brought in connection
with the execution of their duties as Company Directors.
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 2020.
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 37. Interest capitalised
on the Group property portfolio is shown in Notes 15 and 20.
Long-term incentive schemes are explained in the Directors’
Remuneration Report on pages 97–114.
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, Annual Bonus Scheme and Performance
Share Plan contain provisions relating to the vesting and
exercise of options or share awards in the event of a change
of control of the Company.
GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 116
REPORT OF THE DIRECTORS
CONTINUED
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
117
The Directors are responsible for preparing the Strategic Report,
Governance Review and Financial Statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare Financial
Statements for each financial year. Under that law the Directors
are required to prepare the Group Financial Statements in
accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union and Article 4 of the
IAS Regulation and have also chosen to prepare the Parent
Company Financial Statements under IFRSs as adopted by the
EU. Under company law the Directors must not approve the
accounts unless they are satisfied that they give a true and
fair view of the state of affairs and of the profit or loss of the
Company and Group for that period.
In preparing these Financial Statements, International
Accounting Standard 1 requires the Directors to:
• properly select and apply accounting policies;
• present information, including accounting policies,
in a manner that provides relevant, reliable, comparable
and understandable information;
• provide additional disclosures when compliance with the
specific requirements in IFRSs are insufficient to enable users
to understand the impact of particular transactions, other
events and conditions on the entity’s financial position and
financial performance; and
• make an assessment of the Company’s ability to continue
as a going concern.
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 comply with the
Companies Act 2006. 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.
DIRECTORS’ RESPONSIBILITY STATEMENT UNDER THE
DISCLOSURE AND TRANSPARENCY RULES
Each of the Directors, whose names and roles appear on
pages 80–81 confirm that to the best of their knowledge:
• the Group Financial Statements, prepared in accordance
with International Financial Reporting Standards as adopted
by the European Union, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company
and the undertakings included in the consolidation taken
as a whole;
• the Strategic Report includes a fair review of the development
and performance of the business and the position of the
Company and the undertakings included in the consolidation
taken as a whole, together with a description of the principal
risks and uncertainties that they face.
DIRECTORS’ STATEMENT UNDER THE UK CORPORATE
GOVERNANCE CODE
Each of the Directors confirm that to the best of their
knowledge the Annual Report and Group Financial Statements,
taken as a whole, are fair, balanced and understandable and
provide the information necessary for Shareholders to assess
the Company’s position and performance, business model
and strategy.
A copy of the Financial Statements is available to view and
download from the Group’s website and the Directors are
responsible for the maintenance and integrity of the corporate
and financial information on that website (www.helical.co.uk).
Information published on the internet is accessible in multiple
countries with differing legal requirements. Legislation in the
United Kingdom governing the preparation and dissemination
of Financial Statements may differ from legislation in
other jurisdictions.
This Statement of Directors’ Responsibilities was approved by
the Board of Directors on 4 June 2020 and is signed on its
behalf by:
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of Financial
Statements may differ from legislation in other jurisdictions.
GERALD KAYE
Chief Executive
4 June 2020
TIM MURPHY
Finance Director
4 June 2020
SUBSTANTIAL SHAREHOLDINGS
As at 22 May 2020, 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.
Fund Manager/Owner
Mr Michael Eric Slade
Janus Henderson Investors
Baillie Gifford
BlackRock
Merian Global Investors
Schroder Investment Management
M&G Investment Management
Dimensional Fund Advisors
Aviva Investors
Vanguard Group
NBIM
* As at 1 May 2020.
Shares at
22/05/2020
11,233,555
10,531,753*
% Holding
9.36%
8.78%*
8,195,838
7,242,885
7,184,453
6,583,157
5,959,727
5,332,869
4,605,516
3,991,022
3,677,622
6.83%
6.04%
5.99%
5.49%
4.97%
4.44%
3.84%
3.33%
3.07%
KEY STAKEHOLDERS
In line with section 172 of the Companies Act 2006, the Directors
act to promote the success of the Company for the benefit
of its members. However, the Board places a great emphasis
on the importance of the views and interests of its other key
stakeholders. For details of our stakeholder engagement
mechanisms and the consideration given to stakeholder views
and interests when decision making, please see pages 88–91.
CULTURE, EMPLOYMENT AND ENVIRONMENTAL MATTERS
The corporate Culture of the Company, articulated through the
Company Purpose and Values, is discussed on pages 82–83 of
the Governance Review. As part of its leadership responsibilities,
the Board continually monitors the Culture of the business and
during the reporting period, Sue Clayton was appointed as the
Designated Non-Executive Director for Workforce Engagement.
For more information on Sue’s role in enabling the Board to
monitor the Company’s Culture and in ensuring that the Culture
is reflected in decision making, please see the Stakeholder
Engagement and Section 172(1) Companies Act 2006 section,
on pages 88–91.
The Board recognises the importance of having a diverse
workforce and an inclusive environment in which they can work.
Details of the Company’s Diversity and Inclusion Policy can be
found on page 86.
All employee candidates are considered fairly and without
prejudice or discrimination and the Company (please see
Employment Policy details on page 86) affords equal
opportunities to all its employees, irrespective of sex, race, colour,
disability, sexual orientation, religious beliefs or marital status.
Information in respect of the Group’s employment and
environmental matters as well as greenhouse gas reporting
is contained in Sustainability at Helical on pages 68–77.
POST BALANCE SHEET EVENTS
Details of post balance sheet events are set out in Note 34
to the Financial Statements.
GROUP STRUCTURE
Details of the Group’s subsidiary undertakings are disclosed in
Note 39 to the Financial Statements.
SHARE CAPITAL
Details of the Company’s issued share capital are shown in Note 28
to the Financial Statements. 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 2020 Annual General Meeting specifies
deadlines for exercising voting rights and appointing a proxy
or proxies to vote in relation to resolutions to be passed at the
meeting. 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 2019 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 2020 Annual General Meeting,
at which a resolution will be proposed to renew this authority.
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 Board is closely monitoring the impact of Coronavirus
(Covid-19) on the Company. It is the current intention of the
Board to hold the Company’s Annual General Meeting on
23 July 2020 at 11.30 a.m. at the Company’s registered office
address: 5 Hanover Square, London W1S 1HQ, but Shareholders
should note that the time, date and venue may change due
to Covid-19 developments. Should there be any changes
(including adjournment of the meeting) the Company will notify
Shareholders through announcements made on the London
Stock Exchange and published on the Company’s website as
soon as practicable. The special business at the 2020 AGM will
include resolutions dealing with the authority to issue shares,
the disapplication of preemption 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 Company’s Auditor, Deloitte 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 2020 AGM. The Directors confirm that:
• so far as each Director is aware, there is no relevant audit
information of which the Company’s Auditor is unaware; and
• the Directors have taken all the steps that they ought to have
taken as directors in order to make themselves aware of any
relevant audit information and to establish that the Auditor is
aware of that information.
This confirmation is given and should be interpreted in accordance
with the provisions of s418 of the Companies Act 2006.
By Order of the Board
JAMES MOSS FCA
Company Secretary
GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 118
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF HELICAL PLC
119
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
3. SUMMARY OF OUR AUDIT APPROACH
1. OPINION
In our opinion:
• the Financial Statements of Helical plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) give a true and fair view of the
state of the Group’s and of the Parent Company’s affairs as at 31 March 2020 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.
We have audited the Financial Statements which comprise:
• the Consolidated Income Statement;
• the Consolidated Statement of Comprehensive Income;
• the Consolidated and Company Balance Sheets;
• the Consolidated and Company Statements of Changes in Equity;
• the Consolidated and Company Cash Flow Statements; and
• the related Notes 1 to 39.
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.
2. BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the
Financial Statements section of our report.
We are independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant
to our audit of the Financial Statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard
as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We confirm that the non-audit services prohibited by the FRC’s Ethical Standard were not provided to the
Group or the Parent Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
The key audit matters that we identified in the current year were:
• Investment property valuation; and
• Going concern and covenant compliance.
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality
Scoping
The materiality that we used for the Group Financial Statements was £10,237,000 which was determined
on the basis of 1% of total assets.
We performed a full scope audit of the Financial Statements of the Parent Company and the Group,
including the component audit work on the Barts Square, London EC1 and 33 Charterhouse Street,
London EC1 joint ventures.
Significant changes
in our approach
There have been changes to our prior year key audit matters with “Revenue recognition - promote fees” no
longer being a key audit matter, as a result of the reduced complexity around the promote fee recognition
at 31 March 2020.
Furthermore, as a result of the ongoing Covid-19 pandemic, “Going concern and covenant compliance”
is included as a key audit matter for the year ended 31 March 2020.
4. CONCLUSIONS RELATING TO GOING CONCERN, PRINCIPAL RISKS AND VIABILITY STATEMENT
4.1. GOING CONCERN
We have reviewed the Directors’ statement in Note 1 to the Financial Statements about whether they
considered it appropriate to adopt the going concern basis of accounting in preparing them and their
identification of any material uncertainties to the Group’s and Company’s ability to continue to do so
over a period of at least 12 months from the date of approval of the Financial Statements.
We considered as part of our risk assessment the nature of the Group, its business model and related
risks including where relevant the impact of the Covid-19 pandemic and Brexit, the requirements of
the applicable financial reporting framework and the system of internal control. We evaluated the
Directors’ assessment of the Group’s ability to continue as a going concern, including challenging the
underlying data and key assumptions used to make the assessment, and evaluated the Directors’
plans for future actions in relation to their going concern assessment.
Going concern is the basis of preparation
of the Financial Statements that assumes
an entity will remain in operation
for a period of at least 12 months
from the date of approval of the
Financial Statements.
We confirm that we have nothing material
to report, add or draw attention to in
respect of these matters.
We are required to state whether we have anything material to add or draw attention to in relation to
that statement required by Listing Rule 9.8.6R(3) and report if the statement is materially inconsistent
with our knowledge obtained in the audit.
4.2. PRINCIPAL RISKS AND VIABILITY STATEMENT
Based solely on reading the Directors’ statements and considering whether they were consistent
with the knowledge we obtained in the course of the audit, including the knowledge obtained in the
evaluation of the Directors’ assessment of the Group’s and the Company’s ability to continue as a
going concern, we are required to state whether we have anything material to add or draw attention
to in relation to:
• the disclosures on pages 62–67 that describe the principal risks, procedures to identify emerging
risks, and an explanation of how these are being managed or mitigated;
• the Directors’ confirmation on page 64 that they have carried out a robust assessment of the
principal and emerging risks facing the Group, including those that would threaten its business
model, future performance, solvency or liquidity; or
• the Directors’ explanation on page 64 as to how they have assessed the prospects of the Group,
over what period they have done so and why they consider that period to be appropriate, and their
statement as to whether they have a reasonable expectation that the Group will be able to continue
in operation and meet its liabilities as they fall due over the period of their assessment, including any
related disclosures drawing attention to any necessary qualifications or assumptions.
We are also required to report whether the Directors’ statement relating to the prospects of the Group
required by Listing Rule 9.8.6R(3) is materially inconsistent with our knowledge obtained in the audit.
Viability means the ability of the
Group to continue over the time horizon
considered appropriate by the Directors.
We confirm that we have nothing material
to report, add or draw attention to in
respect of these matters.
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 120
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF HELICAL PLC
CONTINUED
5. KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial
Statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
“Revenue recognition – promote fees” has not been presented as a key audit matter for the current year as a result of the reduced
complexity associated with the revenue recognition at 31 March 2020. This reflects the One Creechurch Place, London EC3 disposal
and final One Bartholomew, London EC1 settlement in the year, whilst the 33 Charterhouse Street, London EC1 development is at
too early a stage to recognise promote fee revenue.
“Going concern and covenant compliance” is a newly identified key audit matter in the year, as a result of the ongoing Covid-19
pandemic. Whilst we do not consider this to be a significant audit risk, this inclusion is reflective of the level of audit effort
undertaken on the matter.
5.1. INVESTMENT PROPERTY VALUATION
Key audit matter
description
At 31 March 2020, the Group held wholly owned investment property valued at £819.6m (31 March 2019: £778.8m).
Investment properties are held at fair value on the Group Balance Sheet. During the year, a net valuation gain of
£38.4m (31 March 2019: £44.3m) was recorded (excluding acquisitions and disposals). Investment property valuation
represents the most significant area of estimation and judgement within the Group Financial Statements, which is why
we consider this to be a significant risk of material misstatement as well as a potential fraud risk.
The fair values are calculated by third party valuation experts using factual information, such as lease agreements
and tenancy data, and their professional judgement concerning market conditions and factors impacting individual
properties. The key estimates associated with this balance which can lead to significant valuation movements relate to
property yields, estimated rental values and the level of expenditure required to maintain a property. Covid-19 further
increased judgement in relation to assumptions around:
• occupier demand and solvency;
• asset liquidity;
• the relative impact on flexible office space; and
• the assumptions around development progress on site and timelines to completion and letting.
As detailed in Note 15, the valuer has included a “material valuation uncertainty” in their valuation report. This is
on the basis that market activity is being impacted in many sectors by the Covid-19 pandemic such that as at the
valuation date they consider that they can attach less weight to previous market evidence for comparison purposes
to inform opinions of value, and that a higher degree of caution should be attached to their valuation.
See also key sources of estimation uncertainty in Note 38, the investment properties in Note 15 of the Financial
Statements and the Audit and Risk Committee report on page 94.
How the scope of our
audit responded to the
key audit matter
We obtained an understanding of relevant controls in the investment property valuation process, including
management’s review of the lease information provided to third party valuers and approval of third party valuations
by the Chairman of the Property Valuations Committee. Management’s process for challenging the appropriateness
of property valuations has been assessed.
We held virtual meetings with the third party valuers appointed by management to value the property portfolio.
With the assistance of our internal real estate valuation specialists we challenged the significant judgements and
assumptions applied in their valuation model, including where relevant, the impact of Covid-19 on the sector and
asset and the valuation adjustments reflected as a result. We further verified the movements in the key judgements
and benchmarked the inputs against market data.
We considered the changes made to key valuation input assumptions at a macro-level in light of the potential impact
of the Covid-19 pandemic on the properties held by the Group and benchmarked these against changes being made
in the wider market and against relevant market evidence including specific property sales and other external data.
We assessed the state of local markets from publicly available market commentaries.
We analysed the individual property valuations to understand significant movements against prior year and
comparative market evidence considered by the valuers.
We tested the integrity of data and information pertaining to rental income, purchaser’s costs and occupancy
provided by management to external valuers and utilised in the valuation.
We have assessed the competence and objectivity of the external valuers.
We have assessed management’s assessment and disclosure of the impact of Brexit and Covid-19 on the fair value
of the Group’s investment property portfolio in respect of occupier demand and solvency, asset liquidity and the
performance of assets in different property sectors. We also reviewed the relevant disclosures around key sources
of estimation uncertainty in Note 15.
Key observations
While we Note the increased estimation uncertainty in relation to the property valuation as a result of Covid-19, and
as disclosed in Note 15, we considered the assumptions applied in arriving at the fair value of the Group’s property
portfolio to be appropriate.
121
5.2 GOING CONCERN AND COVENANT COMPLIANCE
Key audit matter
description
As at 31 March 2020, external long-term borrowings had a carrying value of £343.18 million (31 March 2019:
£324.81 million), representing the drawn amounts from a £80.75 million loan with Aviva, a £50.4 million loan
with Wells Fargo Bank and a £400 million revolving credit facility, which mature in December 2024, August 2023
and July 2024 respectively. The Group has £182.34 million of undrawn facility, together with cash of £74.59 million
(31 March 2019: £197.57 million).
We identified a key audit matter relating to the ability of the Group to meet the external loan covenant requirements
during the year and for a period of one year from the date of this auditor’s report. The Group’s banking covenants
are linked to the borrowing to property valuation ratio, the rental income to borrowing ratio and the interest cover
achieved through rental income.
While there is headroom in these ratios throughout the forecast period, a downward movement in property valuations
as a result of the Covid-19 pandemic, where the valuation impacts may be greater and quicker than experienced in
recent years, could impact on the available headroom.
The Group expects there to be a reduction in rental income throughout the forecast period as a result of trading
restrictions due to the Covid-19 pandemic and has reflected its forecasts to reflect as such. The impact of this potential
reduction in rental income could impact the ability of the Group to meet its interest cover calculations and covenants.
As at the date of this report, the global outlook as a result of Covid-19 is significantly uncertain and the range of
potential outcomes is wide-ranging and unknown. In particular, should the impacts of the pandemic on tenants be
more prolonged or severe than currently forecast by the Directors, the Group’s going concern status would be
dependent on its ability to seek covenant waivers.
Management’s consideration of the going concern basis of preparation is set out in the going concern statement
on page 115 and Note 1. Management has adopted the going concern basis of accounting for the Group and Parent
Company; they have concluded that there are no material uncertainties that may cast significant doubt over the
Group’s and Parent Company’s ability to adopt this basis for a period of at least 12 months from the date when the
Financial Statements are authorised for issue.
The Audit and Risk Committee discussion of this key matter is set out on page 94-96.
How the scope of our
audit responded to the
key audit matter
We challenged the judgements and assumptions applied by management in their going concern assessment and
associated forecasts of financial performance and financial position, considering the reasonableness of assumptions
regarding uncertain cash inflows and the timing and quantum of cash outflows. We also tested the mechanical
accuracy of the model utilised.
We assessed the appropriateness of management’s sensitivities in their worst case scenario cash flow forecast,
taking into consideration assumptions associated with rental collection levels impacted by the ongoing Covid-19
pandemic. We challenged management’s tenant risk assessment undertaken for the most significant clients and
the appropriateness of reflecting those forecast cash flows within the covenants, utilising our own research to
assess the appropriateness of these assumptions.
We reviewed the key loan documentation to understand the principal terms, including financial covenants, and
performed a review of the Group’s existing and forecast compliance with debt covenants. We tested the mechanical
accuracy of management’s covenant calculations, including the consistency with the contractual definitions.
We assessed the appropriateness of the headroom available on covenants and compared management’s
projections with market information available associated with future income and property asset values.
We reviewed the disclosures in the Financial Statements around going concern and the clarity of the process
undertaken by management in concluding on the appropriateness of the assessment.
Key observations
We concur with management’s conclusion to prepare the Group and Parent Company Financial Statements
on a going concern basis and we consider the associated disclosures to be appropriate.
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020
122
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF HELICAL PLC
CONTINUED
6. OUR APPLICATION OF MATERIALITY
6.1. 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 person would be changed or influenced. We use materiality both in planning the scope
of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the Financial Statements as a whole as follows:
Materiality
£10,237,000 (2019: £10,650,000)
£5,713,000 (2019: £6,243,000)
GROUP FINANCIAL STATEMENTS
PARENT COMPANY FINANCIAL STATEMENTS
£2,113,000 (2019: £2,484,000) for balances affecting the
Income Statement excluding valuation gains and tax
Basis for determining
materiality
1% of total assets.
1% of total assets.
The lower materiality used for balances impacting the Income
Statement, excluding valuation gains and tax, was determined
using 5% of profit before tax.
Rationale for the
benchmark applied
Total assets is the most appropriate benchmark because it
appropriately reflects the valuation of investment property
which is of key interest to the users of the Financial Statements.
Total assets is the most appropriate benchmark
as this Company is a holding company.
Profit before tax (“PBT”) is deemed an appropriate benchmark
for items impacting the Income Statement as these are more
sensitive to the users of the Financial Statements.
TOTAL SHAREHOLDER RETURN
Total assets
£1,023.7m
Group materiality
£10.2m
Component
materiality range
£5.7m to £0.9m
Audit and Risk Committee
reporting threshold
£0.5m
Total assets
Group materiality
6.2. PERFORMANCE MATERIALITY
We set performance materiality at a level lower than materiality
to reduce the probability that, in aggregate, uncorrected
and undetected misstatements exceed the materiality for
the Financial Statements as a whole. Group performance
materiality was set at 70% of Group materiality for the 2020
audit (2019: 70%). In determining performance materiality, we
assessed the immaterial prior period errors found in the current
and prior year audit, as well as:
a. the quality of the Group’s control environment; and
b. the absence of material changes in the business.
6.3. ERROR REPORTING THRESHOLD
We agreed with the Audit and Risk Committee that we would
report to the Committee all audit differences in excess of
£511,000 (2019: £532,500), as well as differences below that
threshold that, in our view, warranted reporting on qualitative
grounds. We also report to the Audit and Risk Committee on
disclosure matters that we identified when assessing the overall
presentation of the Financial Statements.
7. AN OVERVIEW OF THE SCOPE OF OUR AUDIT
7.1. IDENTIFICATION AND SCOPING OF COMPONENTS
We performed a full scope audit of the Financial Statements
of the Parent Company and Group, which includes the
audits of joint ventures which are treated as components.
A Group materiality is adopted for all subsidiary entities within
the Group, unless a subsidiary is partially owned by a third party.
There are three Group components that are subject to audit.
The materiality range for the joint ventures is £5.7m to £0.9m.
Audit work to respond to the risks of material misstatement
was performed directly by the Group audit engagement team.
Our Group audit was scoped by obtaining an understanding of
the Group and its environment, including Group-wide controls,
and assessing the risks of material misstatement at the Group
level. We have audited the material balances which support
the Group’s Annual Report, which includes auditing the
consolidation and obtaining an understanding of key balances
in the non-significant components.
8. OTHER INFORMATION
The Directors are responsible for the other information.
The other information comprises the information included
in the Annual Report, other than the Financial Statements
and our auditor’s report thereon.
Our opinion on the Financial Statements does not cover the
other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance
conclusion thereon.
In connection with our audit of the Financial Statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the Financial Statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there
is a material misstatement in the Financial Statements or a
material misstatement of the other information. If, based on the
work we have performed, we conclude that there is a material
misstatement of this other information, we are required to
report that fact.
123
In this context, matters that we are specifically required to
report to you as uncorrected material misstatements of the
other information include where we conclude that:
• Fair, balanced and understandable – the statement given
by the Directors that they consider the Annual Report and
Financial Statements taken as a whole is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Group’s position and performance,
business model and strategy, is materially inconsistent with
our knowledge obtained in the audit; or
• Audit and Risk Committee reporting – the section describing
the work of the Audit and Risk Committee does not
appropriately address matters communicated by us to the
Audit and Risk Committee; or
• Directors’ statement of compliance with the UK Corporate
Governance Code – the parts of the Directors’ statement
required under the Listing Rules relating to the Company’s
compliance with the UK Corporate Governance Code
containing provisions specified for review by the auditor
in accordance with Listing Rule 9.8.10R(2) do not properly
disclose a departure from a relevant provision of the UK
Corporate Governance Code.
We have nothing to report in respect of these matters.
9. RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Directors’ responsibilities
statement, the Directors are responsible for the preparation of
the Financial Statements and for being satisfied that they give a
true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of Financial
Statements that are free from material misstatement, whether
due to fraud or error.
In preparing the Financial Statements, the Directors are
responsible for assessing the Group’s and the Parent Company’s
ability to continue as a going concern, disclosing as applicable,
matters related to going concern and using the going concern
basis of accounting unless the Directors either intend to
liquidate the Group or the Parent Company or to cease
operations, or have no realistic alternative but to do so.
10. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT
OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about
whether the Financial Statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions
of users taken on the basis of these Financial Statements.
Details of the extent to which the audit was considered capable
of detecting irregularities, including fraud and non-compliance
with laws and regulations, are set out below.
A further description of our responsibilities for the audit
of the Financial Statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
11. EXTENT TO WHICH THE AUDIT WAS CONSIDERED
CAPABLE OF DETECTING IRREGULARITIES, INCLUDING
FRAUD
We identify and assess the risks of material misstatement of the
Financial Statements, whether due to fraud or error, and then
design and perform audit procedures responsive to those risks,
including obtaining audit evidence that is sufficient and
appropriate to provide a basis for our opinion.
11.1. IDENTIFYING AND ASSESSING POTENTIAL RISKS
RELATED TO IRREGULARITIES
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and non-compliance
with laws and regulations, we considered the following:
• the nature of the industry and sector, control environment and
business performance including the design of the Group’s
remuneration policies, key drivers for Directors’ remuneration,
bonus levels and performance targets;
• results of our enquiries of management and the Audit and
Risk Committee about their own identification and assessment
of the risks of irregularities;
• any matters we identified having obtained and reviewed the
Group’s documentation of their policies and procedures
relating to:
– identifying, evaluating and complying with laws and
regulations and whether they were aware of any instances
of non-compliance;
– detecting and responding to the risks of fraud and
whether they have knowledge of any actual, suspected
or alleged fraud;
– the internal controls established to mitigate risks of fraud
or non-compliance with laws and regulations; and
• the matters discussed among the audit engagement team and
involving relevant internal specialists, including tax, valuations
and industry specialists regarding how and where fraud might
occur in the Financial Statements and any potential indicators
of fraud.
As a result of these procedures, we considered the
opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential for
fraud in investment property valuation. In common with all
audits under ISAs (UK), we are also required to perform specific
procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory
framework that the Group operates in, focusing on provisions
of those laws and regulations that had a direct effect on the
determination of material amounts and disclosures in the
Financial Statements. The key laws and regulations we
considered in this context included the UK Companies Act,
UK Bribery Act, The Criminal Finances Act 2017, Landlord
and Tenant Act 1985, GDPR, Modern Slavery Act, Listing
Rules and tax legislation.
In addition, we considered provisions of other laws and
regulations that do not have a direct effect on the Financial
Statements but compliance with which may be fundamental
to the Group’s ability to operate or to avoid a material penalty.
These included the Group’s Health and Safety Regulations
and Equal Opportunities, Environmental Laws, Disability
Rights, Building regulations, construction safety and
planning restrictions.
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 124
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF HELICAL PLC
CONTINUED
11.2. AUDIT RESPONSE TO RISKS IDENTIFIED
As a result of performing the above, we identified Investment
property valuation as a key audit matter related to the potential
risk of fraud. The key audit matters section of our report
explains the matter in more detail and also describes the specific
procedures we performed in response to that key audit matter.
13. MATTERS ON WHICH WE ARE REQUIRED TO REPORT
BY EXCEPTION
13.1. ADEQUACY OF EXPLANATIONS RECEIVED AND
ACCOUNTING RECORDS
Under the Companies Act 2006 we are required to report
to you if, in our opinion:
In addition to the above, our procedures to respond to risks
identified included the following:
• reviewing the financial statement disclosures and testing to
supporting documentation to assess compliance with relevant
laws and regulations discussed above;
• enquiring of management, the Audit and Risk Committee and
external legal counsel concerning actual and potential litigation
and claims;
• we have not received all the information and explanations
we require for our audit; or
• 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 are not in
agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
• performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;
• reading minutes of meetings of those charged with
governance and enquiring on any correspondence with
HMRC; and
• in addressing the risk of fraud through management override
of controls, testing the appropriateness of journal entries and
other adjustments; assessing whether the judgements made
in making accounting estimates are indicative of a potential
bias; and evaluating the business rationale of any significant
transactions that are unusual or outside the normal course
of business.
We also communicated relevant identified laws and regulations
and potential fraud risks to all engagement team members
including internal specialists, and remained alert to any
indications of fraud or non-compliance with laws and
regulations throughout the audit.
REPORT ON OTHER LEGAL
AND REGULATORY REQUIREMENTS
12. OPINIONS ON OTHER MATTERS PRESCRIBED BY THE
COMPANIES ACT 2006
In our opinion the part of the Directors’ Remuneration Report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course
of the audit:
• the information given in the Strategic Report and the
Report of the Directors for the financial year for which the
Financial Statements are prepared is consistent with
the Financial Statements; and
• the Strategic Report and the Report of the Directors
have been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and understanding of the
Group and the Parent Company and their environment obtained
in the course of the audit, we have not identified any material
misstatements in the Strategic Report or the Report of
the Directors.
13.2. DIRECTORS’ REMUNERATION
Under the Companies Act 2006 we are also required to report
if in our opinion certain disclosures of Directors’ remuneration
have not been made or the part of the Directors’ Remuneration
Report to be audited is not in agreement with the accounting
records and returns.
We have nothing to report in respect of these matters.
14. OTHER MATTERS
14.1. AUDITOR TENURE
Following the recommendation of the Audit and Risk
Committee, we were appointed by Helical plc on 12 June 2018
to audit the Financial Statements for the year ending 31 March
2019 and subsequent financial periods. The period of total
uninterrupted engagement including previous renewals and
reappointments of the firm is two years, covering the years
ending 31 March 2019 to 31 March 2020.
14.2. CONSISTENCY OF THE AUDIT REPORT WITH THE
ADDITIONAL REPORT TO THE AUDIT AND RISK COMMITTEE
Our audit opinion is consistent with the additional report to the
Audit and Risk Committee we are required to provide in
accordance with ISAs (UK).
15. USE OF OUR REPORT
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.
GEORGINA ROBB, FCA (SENIOR STATUTORY AUDITOR)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
4 June 2020
CONSOLIDATED INCOME STATEMENT
For the year ended 31 March 2020
Revenue
Net rental income
Development property profit/(loss)
Share of results of joint ventures
Other operating income
Gross profit before net gain on sale and revaluation of investment properties
(Loss)/gain on sale of investment properties
Revaluation of investment properties
Fair value movement 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 gain
Profit before tax
Tax on profit on ordinary activities
Profit for the year
Earnings per share
Basic
Diluted
All the activities of the Group are from continuing operations.
125
Year ended
31.3.20
£000
Year ended
31.3.19
£000
Notes
3
4
5
19
6
15
21
7
9
9
37
10
14
44,361
27,838
3,274
13,396
88
44,596
(1,272)
38,351
–
81,675
(16,715)
64,960
(16,100)
1,345
(7,651)
468
8
43,030
(4,313)
38,717
44,175
24,599
(1,781)
(3,217)
–
19,601
15,008
44,284
144
79,037
(16,753)
62,284
(17,407)
983
(3,322)
865
53
43,456
(836)
42,620
32.3p
31.7p
35.8p
35.3p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2020
Profit for the year
Exchange difference on retranslation of net investments in foreign operations
Total comprehensive income for the year
Year ended
31.3.20
£000
Year ended
31.3.19
£000
38,717
68
38,785
42,620
(51)
42,569
The exchange differences on retranslation of net investments in foreign operations will be reclassified to the Income Statement
on disposal.
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 126
CONSOLIDATED AND COMPANY BALANCE SHEETS
At 31 March 2020
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS
For the year ended 31 March 2020
127
Non-current assets
Investment properties
Owner occupied property, plant and equipment
Investment in subsidiaries
Investment in joint ventures
Derivative financial instruments
Current assets
Land and developments
Corporation tax receivable
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Lease liability
Corporation tax payable
Borrowings
Non-current liabilities
Borrowings
Derivative financial instruments
Lease liability
Trade and other payables
Deferred tax liability
Total liabilities
Net assets
Equity
Called-up share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Other reserves
Retained earnings
Total equity
Notes
Group
31.3.20
£000
Group
31.3.19
£000
Company
31.3.20
£000
Company
31.3.19
£000
15
17
18
19
37
20
22
23
24
25
26
26
37
25
24
11
28
819,573
6,007
–
80,818
86
906,484
852
1,417
40,382
74,586
117,237
778,752
1,747
–
24,676
915
806,090
2,311
–
58,726
197,570
258,607
1,023,721
1,064,697
–
6,007
208,272
–
–
–
1,747
157,621
–
270
214,279
159,638
–
–
300,315
56,918
357,233
571,512
–
–
299,814
164,885
464,699
624,337
(45,771)
(43,159)
(180,994)
(190,723)
(611)
–
(5,000)
(51,382)
(343,184)
(10,455)
(7,563)
(590)
(11,858)
(373,650)
(425,032)
–
(2,561)
(100,468)
(146,188)
(324,814)
(4,158)
(2,189)
(11,405)
(8,518)
(351,084)
(497,272)
(611)
–
(5,000)
(186,605)
–
–
(98,767)
(289,490)
–
–
(5,374)
–
(219)
(5,593)
–
–
–
–
(159)
(159)
(192,198)
(289,649)
598,689
567,425
379,314
334,688
1,465
103,522
171,464
7,478
291
314,469
598,689
1,459
101,304
131,050
7,478
291
325,843
567,425
1,465
103,522
–
7,478
1,987
264,862
379,314
1,459
101,304
–
7,478
1,987
222,460
334,688
The profit in the year for the Company was £55,169,000 (2019: £159,405,000).
The Financial Statements were approved by the Board and authorised for issue on 4 June 2020.
TIM MURPHY
Finance Director
Company number 156663
Cash flows from operating activities
Profit before tax
Depreciation
Revaluation surplus on investment properties
Loss/(gain) on sales of investment properties
Profit on sale of subsidiaries
Profit on sale of plant and equipment
Net financing costs
Change in fair value of derivative financial instruments
Change in fair value of Convertible Bond
Share based payment charge
Share settled bonus
Share of results of joint ventures
Fair value movement of available-for-sale assets
Impairment of investments
Dividends received from subsidiaries
Foreign exchange movement
Cash inflows/(outflows) from operations before changes in working capital
Change in trade and other receivables
Change in land and developments
Change in trade and other payables
Cash inflows/(outflows) generated from operations
Finance costs
Finance income
Tax paid
Cash flows from operating activities
Cash flows from investing activities
Additions to investment property
Net sale of investment property
Investment in joint ventures and subsidiaries
Return on investment in joint venture
Dividends from joint ventures
Receipts in respect of available-for-sale assets
Sale of plant and equipment
Purchase of owner occupied property, plant and equipment
Net cash (used by)/generated from investing activities
Cash flows from financing activities
Borrowings drawn down
Borrowings repaid
Lease liability payments
Shares issued
Equity dividends paid
Net cash used by financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
Group
31.3.20
£000
43,030
807
(38,351)
1,272
–
(11)
14,755
7,651
(468)
2,814
1,485
(13,396)
–
–
–
67
19,655
12,499
1,459
(3,890)
29,723
(19,630)
6,717
(4,467)
(17,380)
12,343
(44,159)
40,260
(50,749)
1,334
6,670
–
27
(18)
(46,635)
254,038
(329,929)
(588)
6
(12,219)
(88,692)
(122,984)
197,570
74,586
Group
31.3.19
£000
Company
31.3.20
£000
Company
31.3.19
£000
43,456
296
(44,284)
(15,008)
–
(52)
16,424
3,322
(865)
2,274
–
3,217
(144)
–
–
(52)
8,584
40,561
3,731
(3,176)
49,700
(25,358)
461
(2,200)
(27,097)
22,603
(79,742)
164,058
–
–
416
144
155
(320)
84,711
64,089
(54,306)
–
8
(11,406)
(1,615)
105,699
91,871
197,570
55,531
807
–
–
–
(11)
1,317
–
270
–
–
–
–
160,524
296
–
–
(14,435)
(52)
4,695
–
(2,674)
–
–
–
–
3,296
5,459
(62,140)
(157,591)
–
(930)
(3,563)
–
(11,141)
(15,634)
(1,773)
358
(4,382)
(5,797)
–
(3,778)
58,560
–
63,546
118,328
(2,719)
438
(2,200)
(4,481)
(21,431)
113,847
–
–
–
–
(29,560)
(3,249)
–
48,598
–
27
(18)
19,047
5,000
(100,000)
(588)
2,224
(12,219)
(105,583)
(107,967)
164,885
56,918
–
–
–
149
(320)
(3,420)
–
–
–
2,514
(11,406)
(8,892)
101,535
63,350
164,885
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 128
129
CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY
At 31 March 2020
NOTES TO THE FINANCIAL STATEMENTS
Group
At 31 March 2018
Total comprehensive income
Revaluation surplus
Realised on disposals
Issued share capital
Performance Share Plan
Performance Share Plan – deferred tax
Share settled Performance Share Plan
Share settled bonus
Dividends paid
At 31 March 2019
Balances at 1 April 2019, as previously reported
Impact of transition to IFRS 16
Adjusted balances at 1 April 2019
Total comprehensive income
Revaluation surplus
Realised on disposals
Issued share capital
Performance Share Plan
Performance Share Plan – deferred tax
Share settled Performance Share Plan
Share settled bonus
Dividends paid
At 31 March 2020
Share
capital
£000
1,451
Share
premium
£000
Revaluation
reserve
£000
Capital
redemption
reserve
£000
98,798
162,753
7,478
Other
reserves
£000
291
–
–
–
8
–
–
–
–
–
–
–
–
2,506
–
–
–
–
–
–
44,284
(75,987)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,459
1,459
–
101,304
101,304
–
131,050
131,050
–
1,459
101,304
131,050
7,478
7,478
–
7,478
–
–
–
6
–
–
–
–
–
–
–
–
2,218
–
–
–
–
–
–
38,351
2,063
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
291
291
–
291
–
–
–
–
–
–
–
–
–
Retained
earnings
£000
Total
£000
263,123
533,894
42,569
42,569
(44,284)
75,987
–
2,274
94
–
–
2,514
2,274
94
(1,837)
(1,837)
(677)
(677)
(11,406)
(11,406)
325,843
325,843
567,425
567,425
(548)
(548)
325,295
566,877
38,785
38,785
(38,351)
(2,063)
–
2,814
483
–
–
2,224
2,814
483
(1,349)
(1,349)
1,074
1,074
(12,219)
(12,219)
1,465
103,522
171,464
7,478
291
314,469
598,689
For a breakdown of Total comprehensive income see the Consolidated Statement of Comprehensive Income.
The adjustment against retained earnings of £2,814,000 (2019: £2,274,000) adds back the share-based payments charge in
accordance with IFRS 2 Share Based Payments.
There were net transactions with owners of £6,973,000 (2019: £9,038,000) made up of the Performance Share Plan credit
of £2,814,000 (2019: £2,274,000) and related deferred tax credit of £483,000 (2019: £94,000), dividends paid of £12,219,000
(2019: £11,406,000), issued share capital of £6,000 (2019: £8,000) and corresponding share premium of £2,218,000
(2019: £2,506,000), share settled Performance Share Plan awards charge of £1,349,000 (2019: £1,837,000) and the share
settled bonus credit of £1,074,000 (2019: charge £677,000).
Company
At 31 March 2018
Total comprehensive income
Issued share capital
Dividends paid
At 31 March 2019
Balances at 1 April 2019, as previously reported
Impact of transition to IFRS 16
Adjusted balances at 1 April 2019
Total comprehensive income
Issued share capital
Dividends paid
At 31 March 2020
Share
capital
£000
1,451
–
8
–
1,459
1,459
–
Share
premium
£000
98,798
–
2,506
–
101,304
101,304
–
1,459
101,304
–
6
–
–
2,218
–
Capital
redemption
reserve
£000
7,478
–
–
–
7,478
7,478
–
7,478
–
–
–
Other
reserves
£000
1,987
–
–
–
1,987
1,987
–
Retained
earnings
£000
74,461
159,405
–
Total
£000
184,175
159,405
2,514
(11,406)
(11,406)
222,460
222,460
334,688
334,688
(548)
(548)
1,987
221,912
334,140
–
–
–
55,169
–
55,169
2,224
(12,219)
(12,219)
1. BASIS OF PREPARATION
Helical plc (the Company) is a public company limited by shares incorporated in the United Kingdom under the Companies Act and
registered in England. The address of the Company’s registered office is shown on page 172. The principal activities of the Company
and its subsidiaries (the Group) and the nature of the Group’s operations are set out in the Strategic Report on pages 1 to 77.
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 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, 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 2019, as amended to reflect any new standards. Amendments to standards and interpretations
which are mandatory for the year ended 31 March 2020 are detailed below:
• IFRS 16 Leases (effective for periods beginning on or after 1 January 2019);
• Amendments to IFRS 9 Financial Instruments – prepayment features with negative compensation (effective for periods
beginning on or after 1 January 2019);
• Amendments to IAS 28 Investments in Associates and joint ventures – long-term interest in associates and joint ventures
(effective for periods beginning on or after 1 January 2019);
• Annual Improvements to IFRS Standard 2015-2017 Cycle – amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23 (effective for
periods beginning on or after 1 January 2019); and
• IFRIC 23 Uncertainty over Income Tax Treatments (effective for periods beginning on or after 1 January 2019).
The most significant of these, and their impact on the Group’s reporting, are set out below:
ADOPTION OF IFRS 16 LEASES
The Group has adopted IFRS 16 Leases, effective from 1 April 2019. This standard introduces significant changes for lessees by
removing the distinction between operating and finance leases, requiring the recognition of a ‘Right of Use Asset’ and a ‘Lease
Liability’ on the Balance Sheet. This applies to the Group and Company’s lease of its head office premises, which was previously
an operating lease under IAS 17 Leases, and the headlease payments due under the long leasehold investment properties.
The accounting for rental income earned by the Group as a lessor remains unchanged.
REVISED ACCOUNTING POLICY
The Group assesses whether a contract contains a lease on entering into the contract. IFRS 16 expressly excludes short leases
(under 12 months) and leases of low value. Where the Group has these leases, lease payments are recognised as operating expenses
on a straight-line basis over the lease term.
IFRS 16 requires that a Lease Liability and corresponding Right of Use Asset are recognised on the Balance Sheet.
The Lease Liability is initially measured at the present value of future lease payments discounted at the rate implicit in the lease or,
if this is not readily available, the Group’s incremental borrowing rate. The Lease Liability is subsequently increased by the interest
charge and decreased by lease payments made. The Lease Liability is adjusted for changes in the lease term or payments and
contract modifications as they arise.
The Right of Use Asset initially comprises the corresponding Lease Liability, lease payments made at or before the commencement
date and any direct costs. Where the Group has an obligation to restore the premises at the end of the lease term, a provision is
made under IAS 37 Provisions, Contingent Liabilities and Contingent Assets and the costs are added to the Right of Use Asset.
It is subsequently measured at cost less accumulated depreciation and impairment losses.
APPROACH TO TRANSITION
The Group has applied IFRS 16 using the modified retrospective approach and therefore the results for the year to 31 March 2019
have not been restated. The Lease Liability is calculated at transition using the incremental borrowing rate at that date of 3.79%,
being the weighted average cost of general debt at 31 March 2019. The Right of Use Asset is measured applying IFRS 16.C8(b)(i)
where the Standard is assumed to apply from the commencement of the lease but discounted at the incremental borrowing rate at
31 March 2019. The resulting cumulative charge to 31 March 2019 is recognised as an adjustment to retained earnings on transition
of £548,000. No practical expedients have been applied on transition.
ADDITIONAL CHANGES FROM PREVIOUS LESSEE ACCOUNTING
In addition to the new requirement for leases previously considered operating leases to be reflected as a Right of Use Asset and
a Lease Liability on the balance sheet, the following changes apply:
• lease incentives are to be recognised as part of the initial measurement on the balance sheet where they were previously a lease
1,465
103,522
7,478
1,987
264,862
379,314
incentive liability, amortised on a straight-line basis;
Total comprehensive income is made up of the profit after tax of £55,169,000 (2019: £159,405,000).
Included within changes in equity are net transactions with owners of £9,995,000 (2019: £8,892,000) being dividends paid
of £12,219,000 (2019: £11,406,000) and issued share capital of £2,224,000 (2019: £2,514,000).
Notes:
Share capital – represents the nominal value of issued share capital.
Share premium – represents the excess of value of shares issued over their nominal value.
Revaluation reserve – represents the surplus/deficit of fair value of investment properties over their historic cost.
Capital redemption reserve – represents amounts paid to purchase issued shares for cancellation at their nominal value.
Retained earnings – represents the accumulated retained earnings of the Group/Company.
• Right of Use Assets are to be tested for impairment under IAS 36 Impairment of Assets, replacing the onerous lease provisions
under IAS 17;
• the rental expense in Administrative Expenses is replaced by depreciation of the Right of Use Asset and interest on the Lease
Liability; and
• the cash payments are to be recognised within financing activities (principal payment) and interest paid (interest payment) in the
Consolidated and Company Cash Flow Statements, where all lease payments were previously shown as operating cash outflows.
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020
130
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
1. BASIS OF PREPARATION CONTINUED
The following table sets out the adjustments made on transition to IFRS 16:
Non-current assets
Owner occupied property, plant and equipment
Current assets
Trade and other receivables
Total assets
Current liabilities
Trade and other payables
Non-current liabilities
Lease liability
Total liabilities
Retained earnings
Net assets
Under IAS 17
31 March 2019
£000
Impact of
IFRS 16
£000
Under IFRS 16
1 April 2019
£000
–
189
189
5,064
5,064
(189)
4,875
–
5,064
(1,150)
1,150
–
–
(1,150)
325,843
567,425
(6,573)
(5,423)
(548)
(548)
(6,573)
(6,573)
325,295
566,877
The difference between the operating lease commitments of £7,773,000 disclosed at 31 March 2019 and the Lease Liability
of £6,573,000 at 1 April 2019 is due to discounting.
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 17 Insurance Contracts (effective for periods beginning on or after 1 January 2021);
• IFRS 10 and IAS 28 (amendments) Sale or Contribution of Assets between an Investor and its Associate or joint venture
(effective date yet to be set);
• Amendment to IFRS 3 Definition of a business (effective for periods beginning on or after 1 January 2020);
• Amendments to IAS 1 and IAS 8 Definition of material (effective for periods beginning on or after 1 January 2020); and
• Amendments to references to the Conceptual Framework in IFRS standards (effective for periods beginning on or after
1 January 2020).
The Board do not expect that the adoption of the standards listed above will have a material impact on the Financial Statements
of the Group.
GOING CONCERN
The Directors have considered the appropriateness of adopting a going concern basis in preparing the Financial Statements.
Their assessment is based on forecasts for the next 12-month period, with the potential impact of Covid-19 being an area of focus
and including severe but plausible downside scenarios on the principal risks and uncertainties.
The key assumptions used in the review are summarised below:
• The Group’s rental income receipts were modelled for each tenant on an individual basis;
• Existing loan facilities remain available, but no new financing is arranged; and
• Free cash is utilised to repay debt/cure bank facility covenants.
The results of this review demonstrated the following:
• The Group has £279m of cash and undrawn bank facilities, including in joint ventures, at 31 March 2020 and there is no debt
repayable within the forecast period;
2. REVENUE FROM CONTRACTS WITH CUSTOMERS
Development property income
Service charge income
Other income
Total revenue from contracts with customers
131
Year ended
31.3.20
£000
Year ended
31.3.19
£000
3,849
8,790
91
12,730
7,963
8,058
–
16,021
The total revenue from contracts with customers is the revenue recognised in accordance with IFRS 15 Revenue from Contracts
with Customers. This reflects the development property income, the service charge income and other revenue in Note 3
Segmental Information.
No impairment of contract assets was recognised in the year to 31 March 2020 (2019: £nil).
3. SEGMENTAL INFORMATION
IFRS 8 Operating Segments 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
• development properties, which include sites, developments in the course of construction, completed developments available
for sale, and pre-sold developments.
Revenue
Rental income
Development property income
Service charge income
Other revenue
Revenue
Investment
Year ended
31.03.20
Developments
Year ended
31.03.20
Total
Year ended
31.03.20
Investment
Year ended
31.03.19
Developments
Year ended
31.03.19
Total
Year ended
31.03.19
£000
31,631
–
8,790
91
40,512
£000
–
3,849
–
–
3,849
£000
31,631
3,849
8,790
91
44,361
£000
28,154
–
8,058
–
36,212
£000
–
7,963
–
–
7,963
£000
28,154
7,963
8,058
–
44,175
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 other income £91,000 (2019: £nil), revenue from services of £3,849,000
(2019: £7,963,000), service charge income of £8,790,000 (2019: £8,058,000) and rental income of £31,631,000
(2019: £28,154,000).
Investment
Year ended
31.03.20
Developments
Year ended
31.03.20
Total
Year ended
31.03.20
Investment
Year ended
31.03.19
Developments
Year ended
31.03.19
Profit before tax
Net rental income
Development property profit/(loss)
Share of results of joint ventures
Gain on sale and revaluation
of investment properties
Segmental profit/(loss)
£000
27,838
–
11,880
37,079
76,797
£000
–
3,274
1,516
–
4,790
£000
24,599
–
5,203
59,292
89,094
£000
–
(1,781)
(8,420)
–
(10,201)
£000
27,838
3,274
13,396
37,079
81,587
–
88
81,675
(16,715)
(16,100)
1,345
(7,651)
468
8
43,030
Total
Year ended
31.03.19
£000
24,599
(1,781)
(3,217)
59,292
78,893
144
–
79,037
(16,753)
(17,407)
983
(3,322)
865
53
43,456
• The Group could withstand receiving no rental income during the going concern period (excluding the impact on income
Fair value movement of available-for-sale assets
covenants);
• The forecasts show that all bank facility financial covenants will be met throughout the review period, with headroom to withstand
a 30% fall in rental income;
• Whilst the Group has a WAULT of 7.1 years, in a downside scenario whereby all tenants, with lease expiries or break options in the
going concern period, exercise their breaks or do not renew at the end of their lease, and with no vacant space let or re-let, the
rental income covenants would be met throughout the review period;
• Based on the forecasts for the next quarter, June 2020, rental income could fall by 36% before income covenants would come
under pressure;
• Property values could fall by 49% before loan to value covenants come under pressure; and
• Asset sales could be utilised to generate additional cash to repay debt, materially increasing covenant headroom.
Based on this analysis, the Directors have adopted a going concern basis in preparing the accounts for the year ended
31 March 2020.
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 gain
Profit before tax
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020
132
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
3. SEGMENTAL INFORMATION CONTINUED
7. ADMINISTRATIVE EXPENSES
Net assets
Investment properties
Land and developments
Investment in joint ventures
Owner occupied property, plant and equipment
Derivative financial instruments
Trade and other receivables
Corporation tax receivable
Cash and cash equivalents
Total assets
Liabilities
Net assets
Investment
31.03.20
Developments
31.03.20
£000
819,573
–
73,643
893,216
£000
–
852
7,175
8,027
Investment
31.03.19
Developments
31.03.19
£000
778,752
–
17,556
796,308
£000
–
2,311
7,120
9,431
Total
31.03.20
£000
819,573
852
80,818
901,243
6,007
86
40,382
1,417
74,586
1,023,721
(425,032)
598,689
Total
31.03.19
£000
778,752
2,311
24,676
805,739
1,747
915
58,726
–
197,570
1,064,697
(497,272)
567,425
All non-current assets are derived from the Group’s UK operations.
4. NET RENTAL INCOME
Gross rental income
Rents payable
Property overheads
Net rental income
Net rental costs attributable to profit share partner
Net rental income
Year ended
31.3.20
£000
Year ended
31.3.19
£000
31,631
(178)
(3,615)
27,838
–
27,838
28,154
(285)
(3,410)
24,459
140
24,599
Property overheads include lettings costs, vacancy costs and bad debt provisions. The amounts above include gross rental income
from investment properties of £31,631,000 (2019: £28,154,000) and net rental income from investment properties of £27,838,000
(2019: £24,599,000).
5. DEVELOPMENT PROPERTY PROFIT/(LOSS)
Development property income
Cost of sales
Sales expenses
Reversal of provision/(provision)
Development property profit/(loss)
6. (LOSS)/GAIN ON SALE OF INVESTMENT PROPERTIES
Net proceeds from the sale of investment properties
Book value (Note 15)
Tenants’ incentives on sold investment properties
(Loss)/gain on sale of investment properties
Year ended
31.3.20
£000
Year ended
31.3.19
£000
2,754
(649)
(29)
1,198
3,274
7,963
(5,399)
–
(4,345)
(1,781)
Year ended
31.3.20
£000
Year ended
31.3.19
£000
40,260
(41,481)
(51)
(1,272)
164,058
(147,550)
(1,500)
15,008
133
Year ended
31.3.20
£000
Year ended
31.3.19
£000
16,715
16,753
807
2,814
9,075
174
89
56
9
221
296
2,274
9,289
171
99
54
9
1,214
Year ended
31.3.20
£000
Year ended
31.3.19
£000
7,211
1,586
278
9,075
7,654
1,379
256
9,289
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
Staff costs
Auditor’s remuneration:
Audit fees
Payable to the Company’s auditor for the audit of Parent Company and consolidated Financial Statements
Payable to the Company’s auditor for the audit of Company’s subsidiaries
Audit related assurance services
Other non-audit services
Operating lease costs
8. STAFF COSTS
Staff costs during the year:
Wages and salaries
Social security costs
Other pension costs
Details of the remuneration of Directors amounting to £6,513,000 are included in the Directors’ Remuneration Report on
pages 97 to 114. The amount of the share-based payments charge relating to share awards made to Directors is £2,066,000
(2019: £1,687,000). Included within wages and salaries are Directors’ bonuses of £1,460,000 (2019: £1,639,000) as discussed
in the Directors’ Remuneration Report on pages 97 to 114.
Other pension costs relate to payments to individual pension plans.
The average monthly number of employees of the Group during the year was 29 (2019: 29), all of whom are UK head office staff.
There were an average of five (2019: five) management, seven (2019: seven) Property Executives and 17 (2019: 17) administrative staff.
Of the staff costs of £9,075,000 (2019: £9,289,000), £9,075,000 is included within administrative expenses (2019: £9,289,000)
and £nil is included within development costs (2019: £nil).
Within administrative costs is the share-based payment charge for the year of £2,814,000 (2019: £2,274,000) which is not included
in the staff costs above.
9. FINANCE COSTS AND FINANCE INCOME
Interest payable on bank loans, bonds and overdrafts
Other interest payable and similar charges
Interest capitalised
Finance costs
Interest receivable and similar income
Finance income
Year ended
31.3.20
£000
Year ended
31.3.19
£000
(12,147)
(5,698)
1,745
(16,100)
1,345
1,345
(16,414)
(4,208)
3,215
(17,407)
983
983
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 4.06% (2019: 4.35%).
Where general finance has been used to fund the acquisition and construction of properties the rate used was a weighted average
of the financing costs for the applicable borrowings of 2.77% (2019: 3.79%).
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 134
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
10. TAX ON PROFIT ON ORDINARY ACTIVITIES
The tax charge is based on the profit for the year and represents:
United Kingdom corporation tax at 19% (2019: 19%)
Group corporation tax
Adjustment in respect of prior years
Use of tax losses
Current tax charge
Deferred tax
Capital allowances
Tax losses
Unrealised chargeable gains
Other temporary differences
Deferred tax (charge)/credit
Total tax charge for the year
FACTORS AFFECTING THE TAX CHARGE FOR THE YEAR
The tax assessed for the year is lower than (2019: 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 19% (2019: 19%)
Effect of:
Net expenses not deductible for tax purposes
Adjustment to capital allowances – disposals
Tax movements on share awards
Movement on tax losses not previously recognised in deferred tax
Operating profit/(loss) of joint ventures
Current tax charge adjustment in respect of prior periods
Movement on sale and revaluation not recognised through deferred tax1
Chargeable gain less than/(in excess of) profit or loss on investment property
Deferred tax adjustment in respect of prior periods
Gain on settlement of Convertible Bond
Change of rate of corporation tax
Total tax charge for the year
Year ended
31.3.20
£000
Year ended
31.3.19
£000
(470)
(19)
–
(489)
(879)
(201)
(4,691)
1,947
(3,824)
(4,313)
(8,813)
315
(509)
(9,007)
(1,003)
(677)
10,647
(796)
8,171
(836)
Year ended
31.3.20
£000
43,030
(8,176)
Year ended
31.3.19
£000
43,456
(8,257)
(404)
293
279
–
2,545
(19)
4,053
266
(305)
(1,556)
(1,289)
(4,313)
(542)
623
48
205
(737)
315
8,073
(775)
(791)
–
1,002
(836)
1 This includes adjustments relating to the initial recognition of deferred tax on unrealised gains and losses in respect of investment properties held by non-resident landlords
arising from the introduction of the NRCGT legislation.
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.
135
11. DEFERRED TAX
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
Group
31.3.20
£000
(4,142)
1,818
(13,850)
4,316
(11,858)
Group
31.3.19
£000
(3,263)
2,019
(9,159)
1,885
(8,518)
Company
31.3.20
£000
(219)
Company
31.3.19
£000
(159)
–
–
–
–
–
–
(219)
(159)
Note: The previously substantively enacted proposed reduction in the corporation tax rate to 17%, which was due to take effect from 1 April 2020, was cancelled in Budget
2020 with the rate remaining at 19%. As a consequence, deferred tax items previously recognised at 17% are now recognised at 19%.
Under IAS 12 Income Taxes, deferred tax provisions are made for the tax that would potentially be payable on the realisation of
investment properties and other assets at book value. 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. A credit of £483,000 (2019: £94,000) in respect of future tax relief for share awards has been
recognised in reserves in accordance with IAS 12 Income Taxes. Together with the charge through the Consolidated Income
Statement, this movement explains the change in the deferred tax liability for the year.
The Group contains entities with tax losses for which no deferred tax asset is recognised. The total unrecognised losses amount to
approximately £6,457,000 (31 March 2019: £6,430,000). 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 £4,142,000 (31 March 2019: £3,263,000) would be released and further capital allowances of £87,274,000
(31 March 2019: £65,906,000) would be available to reduce future tax liabilities.
12. DIVIDENDS PAID AND PAYABLE
Attributable to equity share capital
Ordinary
Interim paid 2.70p per share (2019: 2.60p)
Prior year final paid 7.50p per share (2018: 7.00p)
Year ended
31.3.20
£000
Year ended
31.3.19
£000
3,239
8,980
12,219
3,103
8,303
11,406
A final dividend of 6.00p, if approved at the AGM on 23 July 2020, will be paid on 27 July 2020 to Shareholders on the register on
26 June 2020. This final dividend, amounting to £7,199,000, has not been included as a liability as at 31 March 2020, in accordance
with IFRS.
13. PARENT COMPANY
The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own Income Statement
in the Financial Statements. The profit for the year of the Company was £55,169,000 (2019: £159,405,000).
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 136
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
137
14. EARNINGS PER SHARE
The calculation of the basic earnings per share is based on the earnings attributable to ordinary Shareholders divided by the
weighted average number of shares in issue during the year. This is a different basis to the net asset per share calculations which are
based on the number of shares at the year end.
The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares and
the post tax effect of dividends on the assumed exercise of all dilutive options.
The EPRA earnings per share is calculated in accordance with IAS 33 Earnings per Share and the best practice recommendations
of the European Public Real Estate Association (“EPRA”).
15. INVESTMENT PROPERTIES
Group
Book value at 1 April
Additions and transfers at cost
Disposals
Revaluation surplus
Revaluation deficit attributable to profit share partners
Freehold
31.3.20
£000
652,250
19,049
(41,481)
27,443
–
Leasehold
31.3.20
£000
126,502
24,902
–
10,908
–
Total
31.3.20
£000
778,752
43,951
(41,481)
38,351
–
Freehold
31.3.19
£000
714,817
40,894
(137,864)
34,403
–
Leasehold
31.3.19
£000
77,131
49,426
Total
31.3.19
£000
791,948
90,320
(9,686)
(147,550)
9,881
(250)
44,284
(250)
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:
Book value at 31 March
657,261
162,312
819,573
652,250
126,502
778,752
Ordinary shares in issue
Weighting adjustment
Weighted average ordinary shares in issue for calculation of basic and EPRA earnings per share
Weighted average ordinary shares issued on share settled bonuses
Weighted average ordinary shares to be issued under Performance Share Plan
Weighted average ordinary shares in issue for calculation of diluted earnings per share
Earnings used for calculation of basic and diluted earnings per share
Basic earnings per share
Diluted earnings per share
Earnings used for calculation of basic and diluted earnings per share
Net gain on sale and revaluation of investment properties
– subsidiaries
– joint ventures
Tax on profit on disposal of investment properties
Tax on gain on settlement of derivative component of Convertible Bond
Gain on movement in share of joint ventures
Fair value movement on derivative financial instruments
– subsidiaries
– joint ventures
Fair value movement on derivative financial instruments
Profit on cancellation of derivative financial instruments
Expense on cancellation of loans
Fair value movement of available-for-sale assets
Deferred tax on adjusting items
Earnings/(loss) used for calculation of EPRA earnings/(loss) per share
Year ended
31.3.20
000
Year ended
31.3.19
000
119,978
119,363
(133)
(307)
119,845
119,056
973
1,385
862
778
122,203
120,696
£000
38,717
32.3p
31.7p
£000
38,717
(37,079)
(8,451)
599
1,555
(275)
7,651
39
(468)
(233)
2,939
–
4,088
9,082
£000
42,620
35.8p
35.3p
£000
42,620
(59,292)
(1,288)
14,130
–
–
3,322
35
(865)
(72)
1,458
(144)
(9,935)
(10,031)
EPRA earnings/(loss) per share
7.6p
(8.4)p
The earnings used for the calculation of EPRA earnings/(loss) per share includes net rental income and development property
profits/losses.
Investment properties are stated at fair value as at 31 March 2020 as follows:
Group
Book value at 31 March
Lease incentives and costs included in trade and other
receivables
Head leases capitalised
Fair value at 31 March
Freehold
31.3.20
£000
657,261
18,064
–
Leasehold
31.3.20
£000
162,312
1,399
(2,161)
Total
31.3.20
£000
819,573
19,463
(2,161)
Freehold
31.3.19
£000
652,250
13,050
–
Leasehold
31.3.19
£000
126,502
1,637
(2,189)
Total
31.3.19
£000
778,752
14,687
(2,189)
675,325
161,550
836,875
665,300
125,950
791,250
Interest capitalised during the year in respect of the refurbishment of investment properties amounted to £1,745,000
(2019: £3,215,000).
Interest capitalised in respect of the refurbishment of investment properties is included in investment properties to the extent of
£13,102,000 (31 March 2019: £11,357,000).
Investment properties with a total fair value of £812,725,000 (31 March 2019: £767,800,000) 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 2020
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.
VALUATION METHODOLOGY
The fair value of the Group’s investment property as at 31 March 2020 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.
Due to the impact of Covid-19, the valuation report issued by Cushman and Wakefield LLP includes a clause which highlights
a “material valuation uncertainty” as follows:
“The outbreak of the Novel Coronavirus (Covid-19), declared by the World Health Organization as a “Global Pandemic” on the
11th March 2020, has impacted global financial markets. Travel restrictions have been implemented by many countries.
Market activity is being impacted in many sectors. As at the valuation date, we consider that we can attach less weight to previous
market evidence for comparison purposes to inform opinions of value. Indeed, the current response to Covid-19 means that we are
faced with an unprecedented set of circumstances on which to base a judgement.
Our valuations are therefore reported on the basis of ‘material valuation uncertainty’ as per VPS 3 and VPGA 10 of the RICS Red
Book Global. Consequently, less certainty – and a higher degree of caution – should be attached to our valuations than would
normally be the case. Given the unknown future impact that Covid-19 might have on the real estate market, we recommend that you
keep the valuation of the Property under frequent review.
For the avoidance of doubt, the inclusion of the ‘material valuation uncertainty’ declaration above does not mean that the valuation
cannot be relied upon. It is used in order to be clear and transparent with all parties, in a professional manner that – in the current
extraordinary circumstances – less certainty can be attached to the valuation than would otherwise be the case.”
As stated above, this clause does not qualify the valuation or mean that it cannot be relied upon.
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.
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020
138
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
15. INVESTMENT PROPERTIES CONTINUED
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 outputs, along with inputs and assumptions, are
reviewed to ensure these are in line with what a market participant would use when pricing each asset.
The reversionary yield is the return received from an asset once the estimated rental value has been captured on today’s
assessment of market value.
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 55.
A sensitivity analysis was performed to ascertain the impact of a 25 basis point shift in the equivalent yield and a £2.50 psf shift
in London ERVs and a £1.00 psf shift in Manchester ERVs for the wholly owned investment portfolio:
17. OWNER OCCUPIED PROPERTY, PLANT AND EQUIPMENT
Group
Cost at 1 April
Impact of transition to IFRS 16
Adjusted balances at 1 April 2019
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
Leasehold
property and
improvements
31.3.20
£000
Plant and
equipment
31.3.20
£000
Total
31.3.20
£000
Short leasehold
improvements
31.3.19
£000
2,074
5,064
7,138
–
–
7,138
683
669
–
1,352
5,786
816
–
816
18
(122)
712
458
138
(105)
491
221
2,890
5,064
7,954
18
(122)
7,850
1,141
807
(105)
1,843
6,007
2,065
–
–
9
–
2,074
538
147
–
685
1,389
Plant and
equipment
31.3.19
£000
1,154
–
–
311
(649)
816
856
149
(547)
458
358
139
Total
31.3.19
£000
3,219
–
–
320
(649)
2,890
1,394
296
(547)
1,143
1,747
Plant and equipment include vehicles, fixtures and fittings and other office equipment.
All leasehold property and improvements and plant and equipment relate to the Company.
Included within leasehold property and improvements is a right of use asset with a net book value of £4,543,000 (31 March 2019: £nil).
18. INVESTMENT IN SUBSIDIARIES
Cost at 1 April
Additions
Disposals
Cost at 31 March
Impairment at 1 April
Impaired during the year
Disposals
Impairment at 31 March
Net book amount at 31 March
Group
31.3.20
£000
Group
31.3.19
£000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Company
31.3.20
£000
198,668
52,058
–
250,726
41,047
1,407
–
42,454
208,272
Company
31.3.19
£000
195,425
3,249
(6)
198,668
39,252
1,795
–
41,047
157,621
A list of all the Company’s subsidiary undertakings, all of which have been consolidated, are shown in Note 39 to the
Financial Statements.
Equivalent yield
+ 25 bps
- 25 bps
ERV
+ £2.50 (London) & £1.00 (Manchester)
- £2.50 (London) & £1.00 (Manchester)
The investment properties have been valued at 31 March 2020 as follows:
Cushman & Wakefield LLP
Directors’ valuation
Percentage change in portfolio value
London
%
Manchester
%
(6.3)
6.9
3.6
(3.6)
(4.6)
4.8
3.8
(4.0)
Total
%
(6.0)
6.6
3.6
(3.7)
Group
31.3.20
£000
Group
31.3.19
£000
836,725
791,100
150
150
836,875
791,250
The historical cost of investment property is £645,927,000 (31 March 2019: £645,521,000).
16. OPERATING LEASE ARRANGEMENTS
The Group earns rental income by leasing its investment properties to tenants under non-cancellable operating leases.
At the Balance Sheet date, the Group had contracted with tenants to receive the following future minimum lease payments:
Not later than one year
Later than one year but not more than five years
More than five years
Group
31.3.20
£000
31,335
95,414
94,638
221,387
Group
31.3.19
£000
28,539
91,839
103,489
223,867
The Company has no operating lease arrangements as lessor.
Under IFRS 16 Leases outstanding commitments for future minimum lease payments under non-cancellable operating leases are
included on the Balance Sheet and detailed in Note 25. At 31 March 2019 under the previous accounting standard IAS 17 Leases, 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
31.3.19
£000
818
3,273
3,682
7,773
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 140
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
19. INVESTMENT IN JOINT VENTURES
Summarised consolidated Income Statements
Revenue
Gross rental income
Property overheads
Net rental income/(costs)
Development profit
Provisions
Gain/(loss) on revaluation of investment
properties
Other operating (expenses)/income
Gross profit/(loss)
Administrative expenses
Operating profit/(loss)
Interest payable on bank loans and overdrafts
Other interest payable and similar charges
Finance income
Change in fair value of derivative financial
instruments
Profit/(loss) before tax
Tax
Profit/(loss) after tax
Reversal of One Creechurch Place loss1
Profit on sale of interest in One Creechurch Place
Uplift for Barts Square economic interest2
Share of results of joint ventures
Summarised consolidated balance sheets
Non-current assets
Investment properties
Owner occupied property, plant and equipment
Derivative financial instruments
Deferred tax
Current assets
Land and developments
Trade and other receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Non-current liabilities
Trade and other payables
Borrowings
Deferred tax
Net assets pre-adjustments
Reversal of Creechurch net liability position 1
Acquisition costs
Net assets
Investment
31.3.20
£000
6,438
701
(186)
515
5,737
–
8,247
(14)
14,485
(414)
14,071
(539)
–
16
–
13,548
(1,943)
11,605
–
–
275
11,880
Development
31.3.20
£000
25,724
197
(112)
85
2,387
(1,481)
204
(7)
1,188
(182)
1,006
(4)
(328)
38
(39)
673
(715)
(42)
224
1,334
–
1,516
Total
31.3.20
£000
32,162
898
(298)
600
8,124
(1,481)
8,451
(21)
15,673
(596)
15,077
(543)
(328)
54
(39)
14,221
(2,658)
11,563
224
1,334
275
13,396
Investment
31.3.19
£000
Development
31.3.19
£000
4,284
94
(246)
(152)
–
–
1,636
–
1,484
(183)
1,301
(504)
–
11
–
808
205
1,013
–
–
–
48,118
877
(165)
712
4,570
(7,198)
(348)
9
(2,255)
(223)
(2,478)
(7)
(1,576)
81
(35)
(4,015)
(1,604)
(5,619)
1,389
–
–
Total
31.3.19
£000
52,402
971
(411)
560
4,570
(7,198)
1,288
9
(771)
(406)
(1,177)
(511)
(1,576)
92
(35)
(3,207)
(1,399)
(4,606)
1,389
–
–
1,013
(4,230)
(3,217)
Investment
31.3.20
£000
Development
31.3.20
£000
Total
31.3.20
£000
Investment
31.3.19
£000
Development
31.3.19
£000
Total
31.3.19
£000
74,776
1,365
76,141
24,106
–
–
–
41
–
–
41
–
–
74,776
1,406
76,182
–
2,418
1,055
3,473
(1,671)
(1,671)
–
(13,456)
(1,382)
(14,838)
61,740
–
79
34,164
1,362
6,766
42,292
(5,491)
(5,491)
(316)
(19,298)
406
(19,208)
18,999
–
–
34,164
3,780
7,821
45,765
(7,162)
(7,162)
(316)
(32,754)
(976)
(34,046)
80,739
–
79
–
–
514
24,620
–
4,726
570
5,296
(952)
(952)
–
(12,181)
(12,181)
16,783
–
–
61,819
18,999
80,818
16,783
1,183
106
23
1,260
2,572
56,935
5,828
7,042
69,805
(12,647)
(12,647)
(20,419)
(36,292)
25,289
106
23
1,774
27,192
56,935
10,554
7,612
75,101
(13,599)
(13,599)
(20,419)
(48,473)
(56,711)
(68,892)
3,019
4,874
–
7,893
19,802
4,874
–
24,676
1 This is an adjustment that has been made to add back the Group’s share of the loss incurred in one of its joint ventures, arising from finance and other costs in the year, to
ensure the Group’s interest is shown at its recoverable amount.
2 This is an adjustment to reflect the impact of the consolidation of a joint venture at its economic interest of 43.0% (2019: 43.8%) rather than its actual ownership interest
of 33.3%.
The fair value of the investment properties at 31 March 2020 is as follows:
Book value at 31 March
Lease incentives and costs included in trade and other receivables
Fair value at 31 March
141
Total
31.3.20
£000
76,141
668
76,809
Total
31.3.19
£000
25,289
93
25,382
The Directors’ valuation of land, development and trading properties shows a surplus of £nil (31 March 2019: £nil) above book value.
Dividends of £6,670,000 were received from joint venture companies during the year (2019: £416,000). The joint venture
companies are private companies, therefore no quoted market prices are available for their shares.
The cost of the Company’s investment in joint ventures was £nil (31 March 2019: £nil).
The Group has two material joint ventures (31 March 2019: one). The full results and position of these joint ventures are set out
below, of which we have included our share in the above table.
Summarised Income Statement
Revenue
Gross rental income
Property overheads
Net rental costs
Development gain
Gain on revaluation of investment properties
Provision against book value of development stock
Other operating 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 sheet
Non-current assets
Investment properties
Owner occupied property, plant and equipment
Deferred tax
Derivative financial instruments
Current assets
Land, development and trading properties
Trade and other receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Non-current liabilities
Borrowings
Deferred tax
Net assets
Barts LP Group
31.03.20
Barts LP Group
31.03.19
£000
74,274
1,692
(481)
1,211
18,774
10,411
(3,443)
(50)
(1,057)
(1,260)
112
(91)
24,607
(4,768)
19,839
£000
44,040
247
(806)
(559)
6,946
2,941
(16,434)
(2)
(716)
(1,167)
172
(79)
(8,898)
627
(8,271)
Charterhouse
Street Group
31.03.20
£000
Charterhouse
Street Group
31.03.19
£000
–
–
(92)
(92)
–
7,948
–
(166)
–
(4)
5
–
7,691
(1,381)
6,310
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Barts LP Group
31.03.20
Barts LP Group
31.03.19
£000
£000
Charterhouse
Street Group
31.03.20
£000
Charterhouse
Street Group
31.03.19
£000
72,421
95
–
–
72,516
79,451
5,909
16,385
101,745
57,736
241
4,023
56
62,056
97,943
20,240
13,021
131,204
(14,119)
(14,119)
(26,624)
(26,624)
(76,173)
(110,670)
(664)
(76,837)
83,305
–
(110,670)
55,966
90,000
–
–
–
90,000
–
2,040
412
2,452
(1,761)
(1,761)
–
(1,381)
(1,381)
89,310
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 142
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
19. INVESTMENT IN JOINT VENTURES CONTINUED
At 31 March 2020 the Group and the Company had legal interests in the following joint venture companies:
Country of
incorporation
Class of share
capital held
Proportion held
Group
Proportion held
Company
Nature of
business
Barts, L.P.
Barts One Limited
Barts Two Limited
Barts Close Office Limited
Barts Square First Office Limited
Barts Square Active One Limited
Barts Square First Residential Limited
Barts Square First Limited
Barts Square Land One Limited
OBC Development Management Limited
Old Street Holdings LP
United States
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
United Kingdom
United Kingdom
United Kingdom
Jersey
n/a
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
n/a
Abbeygate Helical (Leisure Plaza) Limited
United Kingdom
Ordinary
Abbeygate Helical (C4.1) LLP
Shirley Advance LLP
King Street Developments (Hammersmith) Limited
Helical Grainger Holdings Limited
Charterhouse Place Limited
Charterhouse Street Limited
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Jersey
n/a
n/a
Ordinary
Ordinary
Ordinary
Ordinary
33%
33%
33%
33%
33%
33%
33%
33%
33%
33%
33%
50%
50%
50%
50%
50%
50%
50%
–
–
–
–
–
–
–
Investment
Investment
Investment
Investment
Investment
Investment
Investment
– Development
– Development
– Development
–
Investment
50% Development
50% Development
– Development
– Development
– Development
–
–
Investment
Investment
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. Key business decisions require
unanimous agreement from the Group and its partner, therefore management judges that both parties control the entity equally
and it is therefore considered appropriate to account for our interest as a joint venture.
Under the Barts Square joint venture agreement the Group is entitled to varying returns dependent upon the performance of the
development. Whilst the Group holds a 33.3% legal share in the Barts Square group, it has accounted for its share at 43.0% to
reflect its expected economic interest in the joint venture.
Under the Creechurch Place joint venture arrangement, whilst the Group held a legal share of 10% of Creechurch Place Limited,
a third party acquired the right to step in to take 20% of the Group’s share of the effective economic interest, i.e. 2%. Therefore,
the Group reflected this in the share of joint venture, accounting for it at 8%. During the year, the Group disposed of its share in
Creechurch Place Limited resulting in a profit of £1,334,000.
20. LAND AND DEVELOPMENTS
Group
At 1 April
Acquisitions and construction costs
Disposals
Reversal of provision/(provision)
At 31 March
Total
31.3.20
£000
2,311
38
(1,686)
189
852
Total
31.3.19
£000
6,042
1,444
(1,567)
(3,608)
2,311
The Directors’ valuation of land and developments shows a surplus of £578,000 (31 March 2019: £578,000) above book value.
Total interest in respect of the development of sites is included in stock to the extent of £nil (31 March 2019: £nil). Interest capitalised
during the year in respect of development sites amounted to £nil (31 March 2019: £nil).
Land and developments with carrying values totalling £nil (31 March 2019: £nil) were held as security against borrowings.
The Company had £nil (31 March 2019: £nil) of land or developments.
21. AVAILABLE-FOR-SALE ASSETS
The gain of £144,000 recognised in the prior year is the result of cash received in relation to a previously fully impaired asset.
22. TRADE AND OTHER RECEIVABLES
Due within 1 year
Trade receivables
Amounts owed by joint venture undertakings
Amounts owed by subsidiary undertakings
Other receivables
Prepayments
Accrued income
143
Group
31.3.20
£000
11,698
142
–
3,123
3,986
21,433
40,382
Group
31.3.19
£000
9,680
22,511
–
345
4,173
22,017
58,726
Company
31.3.20
£000
–
151
299,893
75
196
–
Company
31.3.19
£000
–
22,340
276,147
400
927
–
300,315
299,814
Included within accrued income are lease incentives of £19,463,000 (31 March 2019: £14,687,000).
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
31.3.20
£000
35,063
1,251
82
36,396
3,986
40,382
Group
31.3.19
£000
55,358
1,884
434
57,676
1,050
58,726
Company
31.3.20
£000
300,119
–
–
Company
31.3.19
£000
298,887
–
–
300,119
298,887
196
927
300,315
299,814
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 £8,752,000 of rental deposits at 31 March 2020 (31 March 2019: £7,211,000).
Movements in the loss allowance of trade receivables are as follows:
Gross receivables being financial assets
Provisions for receivables impairment
Net receivables being financial assets
Group
31.3.20
£000
36,510
(114)
36,396
Group
31.3.19
£000
57,751
(75)
57,676
Company
31.3.20
£000
305,484
(5,365)
300,119
Company
31.3.19
£000
305,413
(6,526)
298,887
Receivables written off during the year as uncollectable
94
24
1,941
4,191
The Group has considered the likelihood of default for each tenant and for each contract balance, either on a 12-month basis, if
there has been no significant change in credit risk, or on a lifetime basis, where credit risk has changed. This requires a forward
looking assessment based on past performance and the Group’s knowledge of its debtor profile.
Included in total receivables being financial assets above are contract balances and receivables from contracts with customers,
as defined by IFRS 15 Revenue from Contracts with Customers, as follows:
Contract assets from contracts with customers
At 1 April
Additions
Received during the year
Change in loss allowance
At 31 March
Receivables from contracts with customers
At 1 April
Additions
Received during the year
Change in loss allowance
At 31 March
Group
31.3.20
£000
6,233
655
Group
31.3.19
£000
16,275
–
(6,207)
(10,042)
–
681
Group
31.3.20
£000
–
181
–
–
181
–
6,233
Group
31.3.19
£000
27,809
–
(27,809)
–
–
Company
31.3.20
£000
Company
31.3.19
£000
–
–
–
–
–
–
–
–
–
–
Company
31.3.20
£000
–
–
–
–
–
Company
31.3.19
£000
25,837
–
(25,837)
–
–
Contract assets are typically recognised when the Group recognises revenue on partial completion of performance obligations,
ordinarily the construction and letting of buildings in its role as development manager. Receivables are recognised when the Group
has an unconditional right to consideration. Cash is typically received once a building is practically complete and a large proportion
of the lettable area is subject to leases, this may occur in tranches.
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 144
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
23. CASH AND CASH EQUIVALENTS
Cash held at managing agents
Restricted cash
Cash deposits
Group
31.3.20
£000
3,563
7,177
63,846
74,586
Group
31.3.19
£000
2,599
2,678
192,293
197,570
Company
31.3.20
£000
7
68
56,843
56,918
Company
31.3.19
£000
–
–
164,885
164,885
Restricted cash is made up of cash held by solicitors and cash in restricted bank accounts.
24. TRADE AND OTHER PAYABLES
Trade payables
Social security costs and other taxation
Amounts owed to joint ventures
Amounts owed to subsidiary undertakings
Other payables
Accruals
Deferred income
Current trade and other payables
Accruals
Non-current trade and other payables
Total trade and other payables
25. LEASE LIABILITY
Current lease liability
Non-current lease liability
Group
31.3.20
£000
28,378
1,591
–
–
469
9,277
6,056
45,771
590
590
Group
31.3.19
£000
13,009
1,333
–
–
536
23,368
4,913
43,159
11,405
11,405
Company
31.3.20
£000
Company
31.3.19
£000
78
–
390
734
–
–
178,885
183,689
14
1,627
–
589
5,711
–
180,994
190,723
–
–
–
–
46,361
54,564
180,994
190,723
Group
31.3.20
£000
611
7,563
Group
31.3.19
£000
–
2,189
Company
31.3.20
£000
611
–
Company
31.3.19
£000
–
–
Included within lease liability are £611,000 (31 March 2019: £nil) of current and £5,374,000 (31 March 2019: £nil) of non-current lease
liabilities which relate to the adoption of IFRS 16 Leases.
Finance lease obligations in respect of the Group’s leasehold properties are payable as follows:
Not later than one year
Later than one year but not more than five years
More than five years
Minimum
lease payments
31.3.20
£000
922
3,689
18,264
22,875
Present value
of minimum
lease payments
31.3.20
£000
Minimum
lease payments
31.3.19
£000
882
3,247
3,851
7,980
104
416
15,600
16,120
Interest
31.3.20
£000
(40)
(442)
(14,413)
(14,895)
Present value
of minimum
lease payments
31.3.19
£000
99
354
1,736
2,189
Interest
31.3.19
£000
(5)
(62)
(13,864)
(13,931)
The long leasehold liabilities relate to the lease of the Group’s head office and to ground rents payable in respect of the head lease
at 25 Charterhouse Square, London EC1, (the lease term is 155 years). The associated asset as of £4,543,000 (31 March 2019: £nil)
and £2,161,000 (31 March 2019: £2,189,000) are shown in Note 17 and Note 15, respectively.
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
Non-current borrowings
Total borrowings
145
Group
31.3.20
£000
5,000
–
–
37,190
305,994
–
343,184
348,184
Group
31.3.19
£000
100,468
–
195,410
–
37,399
92,005
324,814
425,282
Company
31.3.20
£000
5,000
Company
31.3.19
£000
98,767
–
–
–
–
–
–
–
–
–
–
–
–
5,000
98,767
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 fair value of £812,725,000 (31 March 2019: £767,800,000). 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 £32,754,000 (31 March 2019: £48,473,000).
CONVERTIBLE BOND
The £100,000,000 Convertible Bond was repaid in June 2019.
27. FINANCING AND DERIVATIVE FINANCIAL INSTRUMENTS
The policies for dealing with liquidity and interest rate risk are noted in our Principal Risks on pages 62 to 67.
Borrowings maturity
Due after more than one year
Due within one year
Group
31.3.20
£000
343,184
5,000
348,184
Group
31.3.19
£000
324,814
100,468
425,282
The Group has various undrawn committed borrowing facilities. The facilities available at 31 March 2020 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
Expiring in more than five years
Group
31.3.20
£000
5,000
–
–
12,339
170,000
–
Group
31.3.19
£000
10,000
–
3,321
–
160,377
–
187,339
173,698
Interest rates – Group
Fixed rate borrowings:
fixed rate Convertible Bond
swap rate plus bank margin
swap rate plus bank margin
swap rate in excess of loan balance
swap rate plus bank margin
swap rate plus bank margin
swap rate plus bank margin
fixed rate plus margin
fixed rate plus margin
swap rate plus bank margin
Weighted average
Floating rate borrowings
Unamortised finance costs
Fair value adjustment of Convertible Bond
Total borrowings
%
–
–
–
–
3.030
2.480
2.450
3.480
3.210
3.370
3.033
4.875
–
3.393
Expiry
–
–
–
–
Apr 2024
Aug 2024
Aug 2024
Dec 2024
Dec 2024
Jun 2026
Jan 2025
Jan 2024
–
Group
31.3.20
£000
–
–
–
–
50,000
50,000
50,000
71,000
9,750
50,000
280,750
73,061
(5,627)
–
%
Expiry
4.000
3.650
4.150
2.382
2.880
–
–
3.480
3.210
–
3.745
5.650
Jun 2019
Nov 2019
Nov 2019
Apr 2024
Apr 2024
–
–
Dec 2024
Dec 2024
–
Apr 2021
Feb 2022
–
–
Group
31.3.19
£000
100,000
105,000
44,500
(30,000)
50,000
–
–
71,000
22,000
–
362,500
67,202
(4,888)
468
Jul 2024
348,184
4.056
Dec 2021
425,282
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 146
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
147
27. FINANCING AND DERIVATIVE FINANCIAL INSTRUMENTS CONTINUED
Floating rate borrowings bear interest at rates based on LIBOR.
During the year, four interest rate swaps were terminated. In August 2019, two £50,000,000 interest rate swaps were entered into
at 0.676% and 0.649% respectively expiring in August 2024. In addition to the above, the Group entered into two £50,000,000
interest rate swaps at 0.595% and 0.647% respectively starting in July 2021 and expiring in July 2026. Interest is fixed on one facility
as shown above, with the remaining borrowings being at floating rates.
In addition to the fixed rates, borrowings are also hedged by the following financial instruments:
Instrument – Group
Current:
cap
cap
cap
cap
floor
cap
cap
cap
Value £000
Rate %
Start
Expiry
35,000
35,000
35,000
50,000
50,000
22,500
22,500
40,000
1.750
1.750
1.750
1.750
0.830
1.750
1.750
1.750
Jul 2018
Aug 2018
Aug 2018
Feb 2019
Feb 2019
Nov 2019
Nov 2019
Jan 2020
Jul 2023
Jul 2023
Jul 2023
Apr 2024
Apr 2024
Jul 2021
Jul 2021
Jul 2023
At 31 March 2020 the Company had no interest rate swaps, caps or floors (31 March 2019: nil).
Net gearing
Total borrowings
Cash
Net borrowings
Group
31.3.20
£000
348,184
(74,586)
273,598
Group
31.3.19
£000
425,282
(197,570)
227,712
Net borrowings excludes the Group’s share of borrowings in joint ventures of £32,754,000 (31 March 2019: £48,473,000) and cash
of £7,821,000 (31 March 2019: £7,612,000). All borrowings in joint ventures are secured.
Net assets
Gearing
28. SHARE CAPITAL
Authorised
Group
31.3.20
£000
598,689
46%
Group
31.3.19
£000
567,425
40%
31.3.20
£000
39,577
31.3.19
£000
39,577
The authorised share capital of the Company is £39,576,626.60 divided into ordinary shares of 1p each and deferred shares
of 1/8p each.
Allotted, called up and fully paid:
119,977,581 (31 March 2019: 119,363,349) ordinary shares of 1p each
212,145,300 deferred shares of 1/8p each
Ordinary shares
At 1 April
Issued share capital
At 31 March
Deferred shares
At 1 April and 31 March
31.3.20
£000
1,200
265
1,465
31.3.19
£000
1,194
265
1,459
Shares in issue
31.3.20
Number
Share capital
31.3.20
£000
Shares in issue
31.3.19
Number
Share capital
31.3.19
£000
119,363,349
1,194
118,610,741
614,232
6
752,608
119,977,581
1,200
119,363,349
1,186
8
1,194
212,145,300
265
212,145,300
265
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 (2020: £591,211,000, 2019: £559,947,000). The Group continually monitors
its gearing level to ensure that it is appropriate. Gearing increased from 40% to 46% in the year as the Group acquired a new
property and incurred capital expenditure on its development programme.
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.
29. SHARE OPTIONS
At 31 March 2020 and 31 March 2019 there were no 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 2019: none).
30. SHARE-BASED PAYMENTS
The Group provides share-based payments to employees in the form of Performance Share Plan (PSP) awards and a Share
Incentive Plan. The Group uses a combination of the Black-Scholes and stochastic valuation models and the resulting value is
amortised through the Consolidated Income Statement over the vesting period of the share-based payments. Details of the
performance criteria are set out on page 112.
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
2020
Weighted
average award
value
319p
322p
322p
363p
332p
Awards
3,663,102
(372,108)
(744,217)
1,233,096
3,779,873
2019
Weighted
average award
value
313p
353p
353p
375p
319p
Awards
3,734,498
(750,029)
(454,897)
1,133,530
3,663,102
All awards have an exercise price of £nil (2019: £nil).
The weighted average share price at the date of exercise for the share options exercised during the year was 362.5p (2019: 334p).
The PSP awards outstanding at 31 March 2020 had a weighted average remaining contractual life of one year and two months.
The fair value of the awards made in the year to 31 March 2020 was £3,961,000 (2019: £3,676,000). These were granted on
3 June 2019.
The inputs into the Black-Scholes and stochastic models of valuation of the PSP awards made in the year to 31 March 2020
were as follows:
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk free rate
Expected dividends
2020
362.5p
–
30%
3 years
0.52%
0.00%
2019
375.0p
–
30%
3 years
0.65%
0.00%
2018
320.0p
–
28%
3 years
0.08%
0.00%
The Group recognised a charge of £2,814,000 (2019: £2,274,000) during the year in relation to share-based payments.
Volatility is measured by calculating the standard deviation of the natural logarithm of share price movements for the period prior
to the date of grant which is commensurate with the remaining length of the performance period.
At the Balance Sheet date there were no exercisable awards. There is a two-year holding period for vested awards.
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 148
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
149
31. CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
The table below details changes in the Group’s liabilities from financing activities, including both cash and non-cash changes.
Liabilities arising from financing activities are those whose cash flows were, or future cash flows will be, classified in the
Consolidated and Company Cash Flow Statements as cash flows from financing activities.
Borrowings
At 31 March 2018
Financing cash flows
Fair value moment of Convertible Bond
Other changes
At 31 March 2019
Financing cash flows
Fair value movement of Convertible Bond
Other changes
At 31 March 2020
Group
£000
416,992
9,783
(865)
(628)
425,282
(75,891)
(468)
(739)
348,184
Company
£000
98,694
–
–
73
98,767
(95,000)
–
1,233
5,000
Financing cash flows comprise borrowings drawn down and repaid in the Consolidated and Company Cash Flow Statements.
Other changes include the rolling up of interest and the change in unamortised refinancing costs.
32. CONTINGENT LIABILITIES
The Company has entered into cross guarantees in respect of the banking facilities of its subsidiaries. These are not considered to
have a material value.
There were no other contingent liabilities at 31 March 2020 for the Group or the Company (31 March 2019: £nil).
33. CAPITAL COMMITMENTS
The Group has a commitment of £19,600,000 (31 March 2019: £64,900,000) in relation to development contracts which are due
to be completed in the year to March 2021. Included within this is the £10,815,000 deferred payment for the acquisition of the
Kaleidoscope, London EC1 site which was subsequently settled in April 2020. A further £1,500,000 (31 March 2019: £19,200,000)
relates to the Group’s share of commitments in joint ventures.
34. POST BALANCE SHEET EVENTS
In April 2020 the Group completed the sale of 90 Bartholomew Close, London EC1, held in joint venture, for £48,500,000 (Helical’s
share: £20,855,000).
35. NET ASSETS PER SHARE
Net asset value
Less: deferred shares
Basic net asset value
Add: share settled bonus
Add: dilutive effect of the Performance Share Plan
Diluted net asset value
Adjustment for:
fair value of financial instruments
deferred tax
Adjusted diluted net asset value
Adjustment for:
fair value of land and developments
EPRA net asset value
Adjustment for:
fair value of fixed rate loans
fair value of financial instruments
deferred tax
EPRA triple net asset value
31.3.20
£000
598,689
(265)
Number
of shares
000
119,978
31.3.20
pence
per share
598,424
119,978
499
973
1,306
598,424
122,257
489
10,368
15,668
624,460
578
122,257
511
625,038
122,257
511
(12,481)
(10,368)
(15,668)
586,521
122,257
480
The adjustment for the fair value of land and developments represents the surplus of fair value over carrying value as at
31 March 2020.
Net asset value
Less: deferred shares
Basic net asset value
Add: share settled bonus
Add: dilutive effect of the Performance Share Plan
Diluted net asset value
Adjustment for:
fair value of financial instruments
fair value movement on Convertible Bond
deferred tax
Adjusted diluted net asset value
Adjustment for:
fair value of land and developments
EPRA net asset value
Adjustment for:
fair value of fixed rate loans
fair value of financial instruments
deferred tax
EPRA triple net asset value
31.3.19
£000
567,425
(265)
567,160
Number
of shares
000
119,363
31.3.19
pence
per share
119,363
475
862
734
567,160
120,959
469
3,218
468
11,687
582,533
578
120,959
482
583,111
120,959
482
(5,449)
(3,218)
(11,687)
562,757
120,959
465
The net asset values per share have been calculated in accordance with guidance issued by the European Public Real Estate
Association (“EPRA”).
The adjustments to the net asset value comprise the amounts relating to the Group and its share of joint ventures.
The calculation of EPRA triple net asset value per share reflects the fair value of all the assets and liabilities of the Group at
31 March 2020. One of the loans held by the Group is at a fixed rate and therefore not at fair value. The adjustment of £12,481,000
(31 March 2019: £5,449,000) is the increase from book to fair value.
EPRA published its latest Best Practices Recommendations in October 2019 which included three new net asset valuation metrics,
namely EPRA net reinstatement value, EPRA net tangible assets and EPRA net disposal value. These metrics are effective for
accounting periods commencing on or after 1 January 2020 but have been presented below:
EPRA net asset value
Adjustment for:
– purchasers’ costs1
EPRA net reinstatement value
Number of shares
Per share measure
1 Includes Stamp Duty Land Tax, Agents’ fees and legal fees.
EPRA net asset value
Adjustment for:
– purchasers’ costs1
EPRA net tangible assets
Number of shares
Per share measure
1 Includes Stamp Duty Land Tax.
The Group’s EPRA net disposal value is the same as the EPRA triple net asset value.
31.3.20
£000
31.3.19
£000
625,038
583,111
61,607
686,645
122,257
562p
56,736
639,847
120,959
529p
31.3.20
£000
31.3.19
£000
625,038
583,111
15,386
640,424
122,257
524p
14,210
597,321
120,959
494p
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020
150
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
151
36. RELATED PARTY TRANSACTIONS
At 31 March 2020 and 31 March 2019 the following amounts were due from the Group’s joint ventures:
King Street Developments (Hammersmith) Limited
Shirley Advance LLP
Barts Square companies
Old Street Holdings LP
Charterhouse Street Ltd
Creechurch Place Limited
31.3.20
£000
31.3.19
£000
71
7
61
3
200
–
71
330
34
3
–
22,073
37. FINANCIAL INSTRUMENTS
CATEGORIES OF FINANCIAL INSTRUMENTS
Financial assets in the Group include derivative financial assets and available-for-sale 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 financial assets measured at amortised cost.
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 categories.
In the year, interest on bonds of £745,000 (2019: £451,000) and a promote fee for development management services of £305,000
(2019: £7,142,000) were charged by the Group to Creechurch Place Ltd. A development management, accounting and corporate
services fee of £1,119,000 (2019: £821,000) was charged by the Group to the Barts Square companies. In addition, a development
management, accounting and corporate services fee of £243,000 (2019: £nil) was charged by the Group to the Charterhouse
Place Ltd group. An amount of £nil (2019: £237,000) was written off the balance owed from King Street Developments
(Hammersmith) Limited.
Financial assets
Measured at amortised cost
Fair value through the Profit or Loss
Total financial assets
Group
31.3.20
£000
Group
31.3.19
£000
114,600
255,246
86
915
Company
31.3.20
£000
357,037
–
Company
31.3.19
£000
463,772
270
114,686
256,161
357,037
464,042
All balances are repayable on demand. No provisions have been recognised in respect of amounts owed from joint ventures.
These financial assets are included in the balance sheet within the following headings:
At 31 March 2020 and 31 March 2019 there were the following balances between the Company and its subsidiaries:
Amounts due from subsidiaries
Amounts due to subsidiaries
31.3.20
£000
299,893
178,885
31.3.19
£000
276,147
183,689
During the years to 31 March 2020 and 31 March 2019 there were the following transactions between the Company and its subsidiaries:
Trade and other receivables
Cash and cash equivalents
Derivative financial asset
Total financial assets
Group
31.3.20
£000
36,396
74,586
86
111,068
Group
31.3.19
£000
57,676
197,570
915
256,161
Company
31.3.20
£000
300,119
56,918
–
Company
31.3.19
£000
298,887
164,885
270
357,037
464,042
Management charges receivable
Interest receivable
Interest payable
31.3.20
£000
1,663
63
859
31.3.19
£000
3,307
1,611
3,998
Financial assets are stated in accordance with IAS 32 Financial Instruments: Presentation.
The carrying value of the trade and other receivables and cash and cash equivalents is not deemed to be materially different from
the fair value.
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 Balance Sheet date amounts
arising from these transactions, were conducted on an arm’s length basis and on normal commercial terms. Amounts owed by
subsidiaries to the Company are identified in Note 22. Amounts owed to subsidiaries by the Company are identified in Note 24.
The Group considers that key management personnel are the Directors. The compensation paid or payable to key management is:
Financial liabilities
Fair value through the Profit or Loss
Designated at Fair value through the Profit or Loss
Measured at amortised cost
Total financial liabilities
Group
31.3.20
£000
10,879
–
394,649
405,528
Group
31.3.19
£000
4,158
100,468
375,320
479,946
Company
31.3.20
£000
Company
31.3.19
£000
–
–
191,979
191,979
–
–
289,490
289,490
Salaries and other short-term employee benefits
Share-based payments
The total dividends paid to Directors of the Group in the year were £381,355 (2019: £1,480,124).
31.3.20
£000
2,113
5,233
7,346
31.3.19
£000
3,612
1,481
5,093
The Convertible Bond was designated at Fair value through the Profit or Loss. The change in fair value of the Convertible Bond is
wholly attributable to changes in market conditions. The Convertible Bonds were settled at par in June 2019 for £100,000,000.
The difference between the carrying amount of £100,468,000 at 31 March 2019 and the settlement amount was an additional
liability of £468,000.
The financial liabilities are included in the Balance Sheet within the following headings:
Trade and other payables
Borrowings – current
Borrowings – non-current
Long leasehold liability
Derivative financial instruments
Total financial liabilities
Group
31.3.20
£000
38,715
5,000
343,184
8,174
10,455
405,528
Group
31.3.19
£000
48,317
100,468
324,814
2,189
4,158
Company
31.3.20
£000
180,994
5,000
–
5,985
–
Company
31.3.19
£000
190,723
98,767
–
–
–
479,946
191,979
289,490
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 152
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
153
37. FINANCIAL INSTRUMENTS CONTINUED
FINANCIAL ASSETS AND LIABILITIES BY CATEGORY CONTINUED
The carrying value of trade and other payables and borrowings is not deemed to be materially different from the fair value, other
than for one fixed rate loan, whose fair value is £12,481,000 (31 March 2019: 5,449,000) greater than its carrying value. Financial
liabilities are stated in accordance with IAS 32 Financial Instruments: Presentation.
The Group and Company financial instruments that are measured subsequent to initial recognition at fair value are interest rate
swaps, caps and floors, and those designated on initial recognition.
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 three 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; and
Level 3: values cannot be derived from observable market data.
Assets and liabilities measured at fair value are classified as below:
Level 1 Convertible Bond (Note 26)
Level 2 Derivative financial instruments (Note 37)
Investment property (Note 15)
Level 3
There were no transfers between categories in the current or prior year.
Derivative financial instruments
Interest rate caps
Interest rate floors
Interest rate swaps
Convertible Bond derivative element
Group
31.3.20
£000
86
(1,036)
(9,419)
–
Group
31.3.19
£000
915
(579)
(3,579)
–
(10,369)
(3,243)
Company
31.3.20
£000
Company
31.3.19
£000
–
–
–
–
–
–
–
–
270
270
The Group’s movement in the fair value of the derivative financial instruments in the year was a loss of £7,651,000 (2019:
£3,322,000) due to interest rate caps, floors and swaps.
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. It is Group policy to assess the financial viability of potential tenants where their rent roll is individually significant
before entering into lease agreements. This review involves the latest available set of Financial Statements, other publicly available
financial information and management accounts where appropriate. The covenant strength of each tenant is determined based
on this information and a deposit or guarantee is sought if necessary. The Group’s tenants are spread across a wide variety of
industries, reducing the Group’s risk to any individual industry. The Group works closely with its agents, who advise where a loss
allowance is required for individual tenants, based on their credit control procedures.
Credit risk also exists due to cash and cash equivalents and deposits with banks and other financial institutions. The cash is
held with reputable banking institutions and in client accounts with solicitors and managing agents and therefore credit risk is
considered low.
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
31.3.20
£000
70,664
14,446
23,629
363,830
472,569
Group
31.3.19
£000
137,825
10,864
219,240
144,015
511,944
Company
31.3.20
£000
185,808
614
1,637
6,955
Company
31.3.19
£000
290,549
614
1,637
6,955
195,014
299,755
At 31 March 2020 the Group had £187,339,000 (31 March 2019: £173,698,000) of undrawn borrowing facilities, £69,780,000
(31 March 2019: £25,230,000) of uncharged property assets and cash balances of £74,586,000 (31 March 2019: £197,570,000).
The above contracted liabilities assume that no loans are extended beyond their current facility expiry date. Management believes
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 and floors. 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 2020, 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
31.3.20
£000
Group impact
on equity
31.3.20
£000
Company impact
on results
31.3.20
£000
Company impact
on equity
31.3.20
£000
8,906
(4,354)
8,906
(4,354)
230
(230)
230
(230)
As at 31 March 2020 the Group had total credit risk exposure, excluding cash, of £36,396,000, all of which is financial assets held at
amortised cost. The quantitative disclosures of trade and other receivables credit risk is shown in Note 22.
FOREIGN CURRENCY EXCHANGE RISK
The Group and Company have no material exposure to movements in foreign currency rates.
The Group has a small number of other debtors that are financial assets. Each is considered on an individual basis and involves the
Group’s detailed knowledge of the counterparties involved in order to assess the likelihood of non-recoverability. All these debtors
are deemed to be recoverable.
The amounts owed to the Company are considered on an individual basis by assessing the subsidiaries’ and joint ventures’ ability
to repay the debt at the point at which it is repayable. The Group considers the net assets of the debtor, taking into account any
potential uplifts to fair value of investments, land and developments in making its assessment.
The Group is not reliant on any major customer for its ability to continue as a going concern.
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 154
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
38. PRINCIPAL ACCOUNTING POLICIES
BASIS OF CONSOLIDATION
The Group Financial Statements consolidate those of Helical plc
(the “Company”) and all of its subsidiary undertakings
(together the “Group”) drawn up to 31 March 2020. Subsidiary
undertakings are entities for which the Group has power over
the investee, is exposed to or has the rights 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
contractually 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. This exists where unanimous agreement of the
investee’s relevant activities is required. 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 (“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.
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.
The Consolidated Financial Statements are presented in sterling
which is also the functional currency of the Parent Company.
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 at the point at
which the customer has control of the goods. This occurs on
completion of the contract for sale. Measurements of revenue
arising from the sale of such assets are derived from the
transaction price as determined by IFRS 15 Revenue from
Contracts with Customers.
Construction contracts and development management services
The Group has contracts to develop and let properties for third
parties. Where two or more contracts are entered into at or near
the same time with the same customer, the contracts are
combined and accounted for as a single contract. An
arrangement may involve the construction and letting of a third
party property or the sale and subsequent construction and
letting of a property. The construction and letting of a property
are considered to be separate performance obligations. Where
an arrangement also involves the sale of an asset, this is an
additional distinct performance obligation. The initial sale
of a site to a customer is recognised as a sale of goods in
accordance with IFRS 15, where the sale of land is not
conditional on the construction of the buildings and is not
reversible in the event that the building is not constructed.
Ordinarily, the Group return includes both fixed and variable
consideration. These constitute the transaction price. Variable
consideration is estimated as the amount of consideration to
which the Group would be entitled in exchange for transferring
goods or services. This is done on an expected value basis. This
estimate is constrained to the extent that it is highly probable
that a significant reversal of the amount of revenue recognised
will not occur when the uncertainty is removed.
The fixed and variable consideration are allocated to the
relevant performance obligations in proportion to their
estimated stand-alone selling prices. Revenue is recognised
either over time or at a point in time, depending on the terms of
the contract. The proportion of the transaction price allocated
to construction is recognised at any given reporting date in
proportion to the costs certified to date as a percentage of the
total expected construction costs. The proportion of the
transaction price allocated to the letting of the property is
recognised at any given reporting date in proportion to the area
subject to leases as a percentage of the total lettable space.
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 97 to 114. The fair values 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 a
combination of the Black-Scholes and stochastic valuation
models and the resulting value is amortised through the Income
Statement over the vesting period of the share-based payments.
For the Performance Share Plan and Share Incentive Plan
awards, where market conditions apply, the expense is allocated
to the Income Statement evenly over the vesting period.
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.
155
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 – Over the term of the lease
Plant and equipment
– 25%
TAXATION
The taxation charge represents the sum of tax currently payable
and deferred tax. The charge for current taxation is based on
the results for the year as adjusted for items which are non-
assessable or disallowed. It is calculated using rates that have
been enacted or substantively enacted by the balance sheet
date. Tax payable upon realisation of revaluation gains
recognised in prior periods is recorded as a current tax charge
with a release of the associated deferred taxation.
Deferred tax is the tax expected to be payable or recoverable
on differences between the carrying amounts of assets and
liabilities in the 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
timing differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available
against which deductible timing 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 timing 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
timing 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
timing difference; and
b) it is probable that the timing difference will not reverse in the
foreseeable future.
DIVIDENDS
Dividend distributions to the Company’s Shareholders are
recognised as a liability in the Financial Statements in the period
in which dividends are approved.
INVESTMENT PROPERTIES
Investment properties are properties owned or leased by
the Group which are held for long-term rental income and
for capital appreciation. Investment properties are initially
recognised at cost, including associated transaction costs, and
subsequently at fair value adjusted for the carrying value of
lease incentive and letting cost receivables. 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 Property, 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.
Investment properties are derecognised on completion of sale.
LAND AND DEVELOPMENTS
Land and developments 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.
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 156
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
38. PRINCIPAL ACCOUNTING POLICIES CONTINUED
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.
FINANCIAL ASSETS
Financial assets do not carry any interest and are stated initially
at fair value and subsequently at amortised cost as reduced by
appropriate loss allowances. The loss allowance is based on the
lifetime expected credit losses, if the credit risk of a receivable
has increased significantly since initial recognition. This is
reduced to 12 months where the credit risk has not increased
significantly. The Group derecognises a financial asset when the
contractual rights to the cash flows from the asset expire or on
transfer of the asset and of the associated risks and rewards to
another party.
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. The Group derecognises trade and other payable liabilities
when they are extinguished, which occurs when the obligation
associated with the liability is discharged, cancelled or expires.
BORROWING AND BORROWING COSTS
Interest bearing bank loans and overdrafts are initially recorded
at fair value, net of finance and other costs yet to be amortised,
in accordance with IFRS 9, and subsequently at amortised cost.
Embedded derivatives contained within the borrowing
agreements are treated in accordance with IFRS 9, which
includes consideration of whether embedded derivatives
require bifurcation.
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.
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 swaps, caps and floors 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.
Financial assets are derecognised when the contractual rights to
the cash flows from the financial asset expire, or when the
financial asset and substantially all the risks and rewards are
transferred. A financial liability is derecognised when it is
extinguished, discharged, cancelled or expires.
Further information on the categorisation of financial
instruments can be found in Note 37.
LEASES
The Group’s accounting policies for leases on initial adoption of
IFRS 16 from 1 April 2019 are set out below. The Group has
leases for which it must account from the position of both a
lessee and a lessor.
Group as lessee
The Group assesses whether a contract is, or, contains a lease, at
inception of a contract based on whether the contract conveys
the right to control the use of an identified asset for a period of
time in exchange for consideration.
The Group has also elected to apply the following practical
expedients:
• to account for each lease component and any non-lease
components as a single arrangement;
• the exemption not to recognise right-of-use assets and lease
liabilities for short-term leases that have a lease term of
12 months or less; and
• leases of low value assets.
The lease payments associated with these leases are recognised
as an expense on a straight-line basis over the lease term.
The Group recognises a right-of-use asset and a lease liability
at the lease commencement date. The lease liability is initially
measured at the present value of the lease payments that are
not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be
readily determined, the Group’s incremental borrowing rate.
Generally, the Group uses its incremental borrowing rate as the
discount rate.
The lease liability is subsequently measured at amortised cost
using the effective interest method. It is remeasured when there
is a change in future lease payments arising from a change in an
index or rate, if there is a change in the Group’s estimate of the
amount expected to be payable under a residual value
guarantee, or if the Group changes its assessment of whether it
will exercise a purchase, extension or termination option.
157
Areas requiring the use of critical judgement and estimates that
may significantly impact the Group’s earnings and financial
position are:
SIGNIFICANT JUDGEMENTS
The key areas are discussed below:
• Consideration of the nature of joint arrangements. In the
context of IFRS 10 Consolidated Financial Statements, 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).
KEY SOURCES OF ESTIMATION UNCERTAINTY
The key areas are discussed below:
• Determination of the most appropriate percentage interest
level at which to recognise our share of joint ventures, where
our economic interest can differ to our ownership interest
(see Note 19). Under the Barts Square joint venture agreement,
the Group is entitled to varying returns dependent upon the
performance of the development. Whilst the Group holds a
33.3% legal share in the Barts Square group, it has accounted
for its share at 43.0% to reflect its expected economic interest
in the joint venture. There are several estimates that contribute
to this expected economic interest, the most sensitive of which
is the estimated sales price of the residential units. If the
estimated sales prices were 10% lower, the Group’s economic
interest would fall by 1.6% (with a net asset decrease of £1.0m),
whilst an increase 10% would result in a rise in economic
interest of 0.8% (with a net asset increase of £0.7m); and
• Valuation of investment properties. Discussion of the “material
valuation uncertainty” raised by the external valuer and the
sensitivity of these valuations to changes in the equivalent
yields and rental values is included in Note 15.
When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount
of the right-of-use asset, or is recorded in profit or loss if the
carrying amount of the right-of-use asset has been reduced
to zero.
The lease liability is presented as a separate line in the
Consolidated and Company balance sheets. The right-of-use
asset is initially measured at the initial amount of the lease
liability adjusted for any lease payments made at or before
the commencement date.
The assets are depreciated to the earlier of the end of the useful
life of the right-of-use asset or the lease term using the straight-
line method. The lease term includes periods covered by an
option to extend if the Group is reasonably certain to exercise
that option.
In addition, the right-of-use asset is periodically reduced
by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability. This will be assessed
annually in line with IAS 36: Impairment of Assets.
Group as lessor
Leases to tenants where substantially all the risks and rewards of
ownership are retained by the Group as the lessor are classified
as operating leases. Payments made under operating leases,
including prepayments, and net of any incentives provided by
the Group, are charged to the Income Statement on a straight-
line basis over the period of the lease.
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 Earnings per Share and the best practice
recommendations of EPRA.
USE OF JUDGEMENTS AND ESTIMATES
To be able to prepare accounts according to the accounting
principles, management must make estimates and assumptions
that affect the assets and liabilities and revenue and expense
amounts recorded in the Financial Statements. These estimates
are based on historical experience and other assumptions that
management and the Board of Directors believe are reasonable
under the particular 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.
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020
158
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
39. SUBSIDIARY AND RELATED UNDERTAKINGS
The Company’s subsidiary and related undertakings are listed below. Except where otherwise indicated all undertakings are
incorporated, registered and operate in the United Kingdom at 5 Hanover Square, London, W1S 1HQ.
The share capital of each of the companies, where applicable, is comprised of ordinary shares unless otherwise stated.
Company
ACTIVE SUBSIDIARIES
207 OLD STREET UNIT TRUST 1
211 OLD STREET UNIT TRUST 1
AYCLIFFE & PETERLEE INVESTMENT COMPANY LIMITED
BAYLIGHT DEVELOPMENTS LIMITED
CPP INVESTMENTS LIMITED
EMBANKMENT PLACE (LP) LIMITED 4
FARRINGDON EAST (JERSEY) LIMITED 1
G2 ESTATES LIMITED
HB SAWSTON NO 3 LIMITED
HELICAL (BOOTH ST) LIMITED
HELICAL (BOSS) LIMITED
HELICAL (CARDIFF) LIMITED
HELICAL (CHART) LIMITED
HELICAL (CHURCHGATE) LIMITED
HELICAL (CS HOLDINGS) JERSEY LIMITED 1
HELICAL (CS) JERSEY LIMITED 1
HELICAL (DALE HOUSE) LIMITED
HELICAL (LB) LIMITED
HELICAL (NQ) LIMITED
HELICAL (OS HOLDCO) JERSEY LIMITED 1
HELICAL (PORCHESTER) LIMITED
HELICAL (POWER ROAD) LIMITED
HELICAL (QUARTZ) LIMITED
HELICAL (SHEPHERDS) LIMITED
HELICAL (TELFORD) LIMITED
HELICAL (WHITECHAPEL) LIMITED
HELICAL BAR (DRURY LANE) LIMITED
HELICAL BAR (GREAT DOVER STREET) LIMITED
HELICAL BAR (JERSEY) LIMITED 1
HELICAL BAR (MAPLE) LIMITED
HELICAL BAR (MITRE SQUARE) DEVELOPMENTS LIMITED
HELICAL BAR (ST VINCENT STREET) LIMITED
HELICAL BAR (WALES) LIMITED
HELICAL BAR DEVELOPMENTS (SOUTH EAST) LIMITED
HELICAL BAR DEVELOPMENTS LIMITED
HELICAL FARRINGDON EAST (JERSEY) LIMITED 1
HELICAL FINANCE (AV) LIMITED
HELICAL FINANCE (BAR) LIMITED
HELICAL FINANCE (RBS) LIMITED
HELICAL JERSEY HOLDINGS LIMITED 1
HELICAL JERSEY INVESTMENT HOLDINGS LIMITED 1
HELICAL OLD STREET JERSEY HOLDINGS LIMITED 1
HELICAL OLD STREET JERSEY LIMITED 1
HELICAL PROPERTIES LIMITED
HELICAL PROPERTIES INVESTMENT LIMITED
HELICAL RETAIL LIMITED
HELICAL SERVICES LIMITED
METROPOLIS PROPERTY LIMITED
OLD STREET UNITHOLDER NO 1 LIMITED 1
OLD STREET UNITHOLDER NO 2 LIMITED 1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
Direct/Indirect
Ultimate %
Indirect
Indirect
Direct
Indirect
Indirect
Direct
Indirect
Direct
Direct
Direct
Direct
Direct
Direct
Indirect
Direct
Indirect
Direct
Direct
Direct
Indirect
Direct
Direct
Direct
Indirect
Direct
Indirect
Direct
Indirect
Direct
Direct
Direct
Direct
Indirect
Direct
Direct
Direct
Direct
Direct
Direct
Direct
Direct
Direct
Indirect
Direct
Direct
Direct
Direct
Indirect
Indirect
Indirect
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%
Company
JOINT VENTURES AND JOINT OPERATIONS
ABBEYGATE HELICAL (C4.1) LLP
ABBEYGATE HELICAL (LEISURE PLAZA) LIMITED
BARTS CLOSE OFFICE LIMITED 1
BARTS ONE LIMITED 1
BARTS SQUARE ACTIVE ONE LIMITED 1
BARTS SQUARE FIRST LIMITED
BARTS SQUARE FIRST OFFICE LIMITED 1
BARTS SQUARE FIRST RESIDENTIAL LIMITED 1
BARTS SQUARE LAND ONE LIMITED
BARTS TWO LIMITED1
BARTS, L.P. 3
HASLUCKS GREEN LIMITED
HELICAL GRAINGER (HOLDINGS) LIMITED
KING STREET DEVELOPMENTS (HAMMERSMITH) LIMITED
OBC DEVELOPMENT MANAGEMENT LIMITED
SHIRLEY ADVANCE LLP
CHARTERHOUSE PLACE LIMITED
CHARTERHOUSE STREET LIMITED
DORMANT SUBSIDIARIES AND JOINT VENTURES
AYCLIFFE & PETERLEE DEVELOPMENT COMPANY LIMITED
HB SAWSTON NO. 1 LIMITED
HB SAWSTON NO. 2 LIMITED
HB SAWSTON NO. 4 LIMITED
HELICAL (CG) LIMITED
HELICAL (CHESTER) LIMITED
HELICAL (FP) HOLDINGS LIMITED
HELICAL (HAILSHAM) LIMITED
HELICAL (HALESOWEN) LIMITED
HELICAL (HUB) LIMITED
HELICAL (JARROW) LIMITED
HELICAL (NORTHAMPTON) LIMITED
HELICAL (PORTBURY) LIMITED
HELICAL (SEVENOAKS) LIMITED
HELICAL (SIX) LIMITED
HELICAL (STONE) LIMITED
HELICAL (WEST LONDON) LIMITED
HELICAL (YATE) LIMITED
HELICAL BAR (CITY INVESTMENTS) LIMITED
HELICAL BAR LIMITED
HELICAL BAR TRUSTEES LIMITED
HELICAL GROUP LIMITED
HELICAL PROPERTIES (RS) LIMITED
HELICAL REGISTRARS LIMITED
HGCI (HOLDCO) LIMITED
HGCI (TRANSCO) LIMITED
HGCI (UK) LIMITED
HGCI HOLDINGS LIMITED
HGCI INTERMEDIATE LIMITED
HGCI LIMITED
OLD STREET HOLDINGS GP LIMITED 2
OLD STREET HOLDINGS L.P.2
OLD STREET UNITHOLDER LIMITED2
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
159
Direct/Indirect
Ultimate %
Direct
Direct
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Direct
Direct
Direct
Direct
Direct
Direct
Indirect
Indirect
Direct
Direct
Direct
Direct
Direct
Direct
Direct
Direct
Direct
Direct
Indirect
Direct
Direct
Direct
Direct
Direct
Indirect
Indirect
Indirect
Indirect
Indirect
Direct
Indirect
Indirect
Indirect
50%
50%
33%
33%
33%
33%
33%
33%
33%
33%
33%
50%
50%
50%
33%
50%
50%
50%
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%
33%
33%
33%
FINANCIAL STATEMENTSHelical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020 160
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
APPENDIX 1 – SEE-THROUGH ANALYSIS
161
Company
ROPEMAKER PARK MANAGEMENT COMPANY LIMITED
SCBP MANAGEMENT COMPANY LIMITED
SPRING (HOLDINGS) LIMITED
SPRING (NO.1) LIMITED
SPRING (NO.2) LIMITED
SPRING (NO.3) LIMITED
34
35
36
37
38
39
Registered offices:
1 12 Castle Street, St Helier, Jersey JE4 5UT.
2 13 Castle Street, St Helier, Jersey JE2 3RT.
3 c/o Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington DE 19808, United States.
4 c/o Dentons, 1 George Square, Glasgow G2 1AL.
Notes:
* No shares in issue in the Unit Trusts. The registered office address is that of the appropriate trustee.
** Limited by Guarantee.
Direct/Indirect
Ultimate %
All appendices are unaudited.
Indirect
Indirect
Indirect
Direct
Indirect
Indirect
100%**
75%
100%
100%
100%
100%
Helical holds a significant proportion of its property assets in joint ventures with partners that provide a significant equity
contribution to purchase the assets, whilst relying on the Group to provide asset management or development expertise.
Accounting convention requires Helical to account for our share of the net results and net assets of joint ventures in limited detail in
the Consolidated Income Statement and Consolidated Balance Sheet. Net asset value per share, a key performance measure used
in the real estate industry, as reported in the Financial Statements under IFRS, does not provide Shareholders with the most relevant
information on the fair value of assets and liabilities within an ongoing real estate company with a long-term investment strategy.
This analysis incorporates the separate components of the results of the consolidated subsidiaries and Helical’s share of its joint
ventures’ results into a ‘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
Helical’s share of the gross rental income, head rents payable and property overheads from property assets held in subsidiaries
and in joint ventures is shown in the table below:
Gross rental income
Total gross rental income
Rents payable
Property overheads
Net rental costs attributable to profit share partner
See-through net rental income
– subsidiaries
– joint ventures
– subsidiaries
– subsidiaries
– joint ventures
Year ended
31.3.20
£000
Year ended
31.3.19
£000
31,631
898
32,529
(178)
(3,615)
(298)
–
28,438
28,154
971
29,125
(285)
(3,410)
(411)
140
25,159
SEE-THROUGH NET DEVELOPMENT PROFITS/(LOSSES)
Helical’s share of development profits from property assets held in subsidiaries and in joint ventures is shown in the table below:
In parent and subsidiaries
In joint ventures
Total gross development profit
Reversal of provision/(provision)
See-through development profits/(losses)
– subsidiaries
– joint ventures
Year ended
31.3.20
£000
Year ended
31.3.19
£000
2,076
8,124
10,200
1,198
(1,481)
9,917
4,740
4,570
9,310
(6,521)
(7,198)
(4,409)
SEE-THROUGH NET GAIN ON SALE AND REVALUATION OF INVESTMENT PROPERTIES
Helical’s share of the net gain on sale and revaluation of investment properties held in subsidiaries and in joint ventures is shown in
the table below:
Revaluation surplus on investment properties
Total revaluation surplus
Net gain on sale of investment properties
– subsidiaries
– joint ventures
– subsidiaries
– joint ventures
Total net gain on sale of investment properties
See-through net gain on sale and revaluation of investment properties
Year ended
31.3.20
£000
Year ended
31.3.19
£000
38,351
8,451
46,802
(1,272)
–
(1,272)
45,530
44,284
1,288
45,572
15,008
–
15,008
60,580
Helical plcAnnual Report and Accounts 2020ADDITIONAL INFORMATIONHelical plcAnnual Report and Accounts 2020
162
APPENDIX 1 – SEE-THROUGH ANALYSIS
CONTINUED
APPENDIX 2 – TOTAL ACCOUNTING RETURN AND TOTAL PROPERTY RETURN
163
TOTAL ACCOUNTING RETURN
Brought forward net assets
Carried forward net assets
Increase in net assets
Dividends paid
Total Accounting Return
Total Accounting Return percentage
TOTAL PROPERTY RETURN
See-through net rental income
See-through development profits/(losses)
See-through revaluation surplus
See-through net (loss)/gain on sale of investment properties
Total Property Return
Year ended
31.3.20
£000
Year ended
31.3.19
£000
567,425
598,689
31,264
12,219
43,483
533,894
567,425
33,531
11,406
44,937
7.7%
8.4%
Year ended
31.3.20
£000
Year ended
31.3.19
£000
28,438
9,917
46,802
(1,272)
83,885
25,159
(4,409)
45,572
15,008
81,330
SEE-THROUGH NET FINANCE COSTS
Helical’s share of the interest payable, finance charges, capitalised interest and interest receivable on bank borrowings, bonds and
cash deposits in subsidiaries and in joint ventures is shown in the table below:
Year ended
31.3.20
£000
Year ended
31.3.19
£000
Interest payable on bank loans, bonds and overdrafts
– subsidiaries
Total interest payable on bank loans, bonds and overdrafts
Other interest payable and similar charges
Interest capitalised
Total finance costs
Interest receivable and similar income
See-through net finance costs
– joint ventures
– subsidiaries
– joint ventures
– subsidiaries
– subsidiaries
– joint ventures
12,147
543
12,690
5,698
328
(1,745)
16,971
(1,345)
(54)
15,572
SEE-THROUGH PROPERTY PORTFOLIO
Helical’s share of the investment, trading and development property portfolio in subsidiaries and joint ventures is shown
in the table below:
Investment property fair value
Total investment property fair value
Land and development stock
Total land and development stock
Land and development stock surplus
Total land and development stock surpluses
Total land and development stock at fair value
See-through property portfolio
– subsidiaries
– joint ventures
– subsidiaries
– joint ventures
– subsidiaries
– joint ventures
31.3.20
£000
836,875
76,809
913,684
852
34,164
35,016
578
–
578
35,594
949,278
SEE-THROUGH NET BORROWINGS
Helical’s share of borrowings and cash deposits in parent and subsidiaries and joint ventures is shown in the table below:
Gross borrowings less than one year
Gross borrowings more than one year
Total gross borrowings in parent and subsidiaries
Gross borrowings less than one year
Gross borrowings more than one year
Total gross borrowings in joint ventures
Cash and cash equivalents
See-through net borrowings
SEE-THROUGH ANALYSIS RATIOS
– subsidiaries
– subsidiaries
– joint ventures
– joint ventures
– subsidiaries
– joint ventures
Property portfolio
Net borrowings
Net assets
Loan to value
Gearing
31.3.20
£000
5,000
343,184
348,184
–
32,754
32,754
(74,586)
(7,821)
298,531
31.3.20
£000
949,278
298,531
598,689
31.4%
49.9%
16,414
511
16,925
4,208
1,576
(3,215)
19,494
(983)
(92)
18,419
31.3.19
£000
791,250
25,382
816,632
2,311
56,935
59,246
578
–
578
59,824
876,456
31.3.19
£000
100,468
324,814
425,282
–
48,473
48,473
(197,570)
(7,612)
268,573
31.3.19
£000
876,456
268,573
567,425
30.6%
47.3%
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020ADDITIONAL INFORMATION
164
APPENDIX 3 – FIVE YEAR REVIEW
APPENDIX 4 – PROPERTY PORTFOLIO
165
INCOME STATEMENTS
LONDON PORTFOLIO – INVESTMENT PROPERTIES
Revenue
Net rental income
Development property profit/(loss)
Reversal of provision /(provision)
Share of results of joint ventures
Other operating income
Gross profit before gain on investment properties
(Loss)/gain on sale of investment properties
Revaluation surplus on investment properties
Fair value movement of available-for-sale assets
Administrative expenses excluding performance related awards
Performance related awards
Finance costs
Finance income
Movement in fair value of derivative financial instruments
Change in fair value of Convertible Bond
Foreign exchange gains/(losses)
Profit before tax
Tax on profit on ordinary activities
Profit after tax
BALANCE SHEETS
Year ended
31.3.20
£000
Year ended
31.3.19
£000
Year ended
31.3.18
£000
Year ended
31.3.17
£000
44,361
27,838
2,076
1,198
13,396
88
44,596
(1,272)
38,351
–
(10,524)
(6,191)
(16,100)
1,345
(7,651)
468
8
43,030
(4,313)
38,717
44,175
24,599
2,564
(4,345)
(3,217)
–
19,601
15,008
44,284
144
(10,858)
(5,895)
(17,407)
983
(3,322)
865
53
43,456
(836)
42,620
175,596
36,329
(1,961)
(2,213)
3,196
111
35,462
13,567
23,848
1,385
(11,023)
(1,742)
(37,438)
4,303
4,029
(1,559)
(10)
30,822
(4,537)
26,285
99,934
46,162
7,143
(6,300)
(6,528)
982
41,459
1,391
39,152
(3,352)
(10,800)
(7,572)
(25,598)
3,156
789
2,973
(3)
41,595
(2,471)
39,124
Year ended
31.3.16
£000
116,500
42,164
30,700
(6,448)
50,469
20
116,905
2,385
47,441
(1,370)
(10,716)
(15,387)
(24,113)
5,128
(6,860)
516
100
114,029
(9,146)
104,883
Investment portfolio at fair value
Land, trading and developments
Group’s share of investment properties held by joint ventures
Group’s share of land and development properties held by joint ventures
Group’s share of land and development stock surpluses
31.3.20
£000
31.3.19
£000
31.3.18
£000
31.3.17
£000
31.3.16
£000
836,875
791,250
802,134
1,003,000
1,041,100
852
76,809
34,164
578
2,311
25,382
56,935
578
6,042
22,623
76,474
2,328
86,680
13,907
89,115
12,514
92,035
11,552
75,904
19,412
Group’s share of total properties at fair value
949,278
876,456
909,601
1,205,216
1,240,003
Net debt
Group’s share of net debt of joint ventures
Group’s share of net debt
Net assets
EPRA net assets value
Dividend per ordinary share paid/payable
Dividend per ordinary share declared
EPRA earnings/(loss) per ordinary share
EPRA net assets per share
273,598
24,933
298,531
598,689
625,038
10.20p
8.70p
7.6p
511p
227,712
40,861
268,573
567,425
583,111
9.60p
10.10p
(8.4)p
482p
325,121
37,733
362,854
533,894
561,644
8.70p
9.50p
(7.0)p
468p
574,439
45,537
619,976
516,897
565,973
3.12p
8.60p
0.5p
473p
659,393
22,449
681,842
480,721
540,731
12.60p
8.17p
17.1p
456p
Address
Description
Completed, let and available to let
The Warehouse & Studio, The Bower, EC1 Multi-let office building
The Tower, The Bower, EC1
The Loom, E1
Kaleidoscope, EC1
Multi-let office building
Multi-let office building
Over-station office development
25 Charterhouse Square, EC1
Multi-let office building
55 Bartholomew, EC1
90 Bartholomew Close, EC1
Office redevelopment
Multi-let office building
The Powerhouse, W4
Single-let recording studios/office building
Being redeveloped
33 Charterhouse Street, EC1
Office redevelopment
1 Estimated space once developed.
LONDON PORTFOLIO – DEVELOPMENT PROPERTIES
Address
Being redeveloped
Barts Square, EC1
MANCHESTER OFFICES
Address
The Tootal Buildings
35 Dale Street
Fourways
Trinity
Description
236 residential apartments and 14,730 sq ft retail/leisure
Description
Multi-let office building
Multi-let office building
Multi-let office building
Newly completed office building
Area sq ft
(NIA)
Vacancy rate at
31 March 2020
Vacancy rate at
31 March 2019
151,439
182,195
108,594
88,581
43,493
10,976
30,427
24,288
639,993
203,0451
843,038
0.2%
0.0%
4.2%
100.0%
0.0%
90.5%
0.0%
0.0%
17.6%
n/a
n/a
0.0%
28.5%
2.9%
n/a
0.0%
n/a
63.7%
0.0%
16.2%
n/a
n/a
Area sq ft
(NIA)
Vacancy rate at
31 March 2020
Vacancy rate at
31 March 2019
216,678
216,678
n/a
n/a
n/a
n/a
Area sq ft
(NIA)
Vacancy rate at
31 March 2020
Vacancy rate at
31 March 2019
245,822
56,124
59,260
58,951
420,157
0.0%
3.9%
25.0%
100.0%
18.1%
3.4%
0.0%
25.7%
100.0%
19.8%
Helical plcAnnual Report and Accounts 2020Helical plcAnnual Report and Accounts 2020ADDITIONAL INFORMATION
166
APPENDIX 5 – EPRA PERFORMANCE MEASURES
167
Below is a table setting out in greater detail the types of capital expenditure made by the Group during the year:
Acquisitions
Existing portfolio
Capitalised interest
Total capital expenditure
Year ended
31.3.20
£000
Year ended
31.3.19
£000
41,026
44,044
1,745
86,815
30,573
56,532
3,215
90,320
Note
15
There was one (2019: one) new investment property purchased during the year, 33 Charterhouse Street, London EC1 in joint venture
for £37,100,000 (our share). The majority of the expenditure on the existing portfolio was made on the London portfolio (77%) and
the Manchester offices (23%). 100% of the capitalised interest is in London. Capitalised interest is calculated in accordance with
IAS 23 Borrowing Costs.
The European Public Real Estate Association (“EPRA”) Best Practice Recommendations set out a number of EPRA Performance
Measures (“EPMs”) to aid comparability in reporting across property companies. The principal EPMs applicable to the Group are set
out below:
EPRA performance measure
Definition
EPRA Earnings/(losses) per share
Earnings/(losses) per share from operational activities.
Note
14
31.3.20
7.6p
31.3.19
(8.4)p
EPRA NAV
EPRA NNNAV
EPRA NIY
EPRA Topped Up NIY
EPRA Vacancy Rate
Net asset value adjusted to include properties and other
investment interests at fair value and to exclude certain items
not expected to crystallise in a long-term investment property
business model.
EPRA NAV adjusted to include the fair values of financial
instruments, debt and deferred taxes.
Annualised rental income based on the cash rents passing at the
balance sheet date, less non-recoverable property operating
expenses, divided by the market value of the property, increased
with (estimated) purchasers’ costs.
This measure incorporates an adjustment to the EPRA NIY in
respect of the expiration of rent-free periods (or other unexpired
lease incentives such as discounted rent periods and step rents).
Estimated Market Rental Value (ERV) of vacant space divided by
ERV of the whole portfolio.
35
35
511p
480p
482p
465p
2.95%
2.74%
4.05%
4.18%
19.72%
16.16%
The note references provide the calculation of the associated measure. Other measures are calculated as follows:
– subsidiaries
– joint ventures
– subsidiaries
– joint ventures
EPRA Net Initial Yield and EPRA Topped Up Net Initial Yield
Investment property at fair value
Less: Property under construction
Undeveloped land
Properties not held for rental income
Completed property portfolio
Allowance for estimated purchases’ costs of 6.8%
Gross up completed property portfolio
Passing rent net of head rents
EPRA NIY
Add: Contracted rent
Topped up annualised net rents
EPRA Topped Up NIY
EPRA Vacancy Rate
ERV of vacant space
ERV of total portfolio
EPRA Vacancy Rate
31.3.20
£000
836,875
76,809
–
(45,000)
(100)
–
31.3.19
£000
791,250
25,382
(70,250)
(8,408)
(100)
–
868,584
737,874
59,064
927,648
50,175
788,049
27,105
2.92%
10,482
37,587
4.05%
31.3.20
£000
10,161
51,533
21,620
2.74%
11,305
32,925
4.18%
31.3.19
£000
8,324
51,497
19.72%
16.16%
Helical plcAnnual Report and Accounts 2020ADDITIONAL INFORMATIONHelical plcAnnual Report and Accounts 2020
168
GLOSSARY OF TERMS
169
TOTAL PROPERTY RETURN
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 (see Appendix 2).
TOTAL SHAREHOLDER RETURN (TSR)
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.
TRUE EQUIVALENT YIELD
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.
UNLEVERAGED RETURNS
Total property gains and losses (both realised and unrealised)
plus net rental income expressed as a percentage of the total
value of the properties.
WAULT
The total contracted rent up to the first break, or lease expiry
date, divided by the contracted annual rent.
CAPITAL VALUE (PSF)
The open market value of the property divided by the area
of the property in square feet.
COMPANY OR HELICAL OR GROUP
Helical plc and its subsidiary undertakings.
DILUTED FIGURES
Reported amounts adjusted to include the effects of
potential shares issuable under the Director and employee
remuneration schemes.
EARNINGS PER SHARE (EPS)
Profit after tax divided by the weighted average number
of ordinary shares in issue.
EPRA
European Public Real Estate Association.
EPRA NET DISPOSAL VALUE PER SHARE
(EFFECTIVE FROM 1 JANUARY 2020)
Represent the Shareholders’ value under a disposal scenario,
where deferred tax, financial instruments and certain other
adjustments are calculated to the full extent of their liability,
net of any resulting tax.
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 borrowings expressed as a percentage of net assets.
INITIAL YIELD
Annualised net passing rents on investment properties
as a percentage of their open market value.
EPRA EARNINGS PER SHARE
Earnings per share adjusted to exclude gains/losses on sale and
revaluation of investment properties and their deferred tax
adjustments, the tax on profit/loss on disposal of investment
properties, trading property profits/losses, movement in fair
value of available-for-sale assets and fair value movements on
derivative financial instruments, on an undiluted basis. Details
of the method of calculation of the EPRA earnings per share
are available from EPRA (see Note 14).
LIKE-FOR-LIKE VALUATION CHANGE
The valuation gain/loss, net of capital expenditure, on those
properties held at both the previous and current reporting
period end, as a proportion of the fair value of those properties
at the beginning of the reporting period plus net capital
expenditure.
MCSI INC. (MSCI IPD)
MSCI Inc. is a company that produces independent
benchmarks of property returns.
EPRA NET ASSETS PER SHARE
Diluted net asset value per share adjusted to exclude fair value
surplus/deficit of financial instruments and the Convertible
Bond, 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 (see Note 35).
NET ASSET VALUE PER SHARE (NAV)
Net assets divided by the number of ordinary shares
at the balance sheet date (see Note 35).
NET GEARING
Total borrowings less short-term deposits and cash
as a percentage of net assets.
EPRA TOPPED-UP NIY
The current annualised rent, net of costs, topped-up for
contracted uplifts, expressed as a percentage of the fair value
of the relevant property.
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 (see Note 35).
EPRA NET REINSTATEMENT VALUE PER SHARE
(EFFECTIVE FROM 1 JANUARY 2020)
Net asset value adjusted to reflect the value required to rebuild
the entity and assuming that entities never sell assets. Assets
and liabilities, such as fair value movements on financial
derivatives, that are not expected to crystallise in normal
circumstances and deferred taxes on property valuation
surpluses are excluded.
EPRA NET TANGIBLE ASSETS PER SHARE
(EFFECTIVE FROM 1 JANUARY 2020)
Assumes that entities buy and sell assets, thereby crystallising
certain levels of unavoidable deferred tax, but excludes assets
and liabilities, such as fair value movements on financial
derivatives, that are not expected to crystallise in normal
circumstances and deferred taxes on property valuation
surpluses are excluded.
PASSING RENT
The annual gross rental income being paid by the tenant.
REVERSIONARY YIELD
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.
SEE-THROUGH/GROUP SHARE
The consolidated Group and the Group’s share in its joint
ventures (see Appendix 1).
SEE-THROUGH NET GEARING
The see-through net borrowings expressed as a percentage
of net assets (see Appendix 1).
TOTAL ACCOUNTING RETURN
The growth in the net asset value of the Company plus
dividends paid in the year, expressed as a percentage of net
asset value at the start of the year (see Appendix 2).
TOTAL ACCOUNTING RETURN ON EPRA NET ASSETS
The growth in the EPRA net asset value of the Company
plus dividends paid in the year, expressed as a percentage
of the EPRA net asset value at the start of the year.
Helical plcAnnual Report and Accounts 2020ADDITIONAL INFORMATIONHelical plcAnnual Report and Accounts 2020 170
Helical plc
SHAREHOLDER INFORMATION
Helical plc
171
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 plc should be addressed to the Company’s Registrar:
LINK ASSET SERVICES
The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU.
Telephone: 0371 664 0300*
From outside the UK +44 371 664 0300
Website: www.linkassetservices.com
Email: enquiries@linkgroup.co.uk
* Calls are charged at the standard geographic rate and will vary by provider.
Calls outside the United Kingdom will be charged at the applicable international
rate. We are open between 09:00 – 17:30, Monday to Friday excluding public
holidays in England and Wales.
E-COMMUNICATION
Shareholders and all interested parties may choose to be alerted
about press releases, regulatory news updates and financial
calendar updates by subscribing to the alert service in the
“Regulatory News” area of our website.
Shareholders may inform us how they wish to receive statutory
communications from the Company, including annual reports
and notices of general meetings, via the Shareholder portal.
Further to a letter of deemed consent sent to Shareholders
on 5 April 2017, Shareholders are notified by post by default
when notices, documents and information from the Company
are available on the website at www.helical.co.uk. If you wish
to be notified by email each time the Company places a
statutory document on its website or if you would like to receive
printed copies of statutory documents in the post, please go to
www.signalshares.com. Once you have registered, click on the
“Manage your Account” link and follow the on-screen instructions.
PAYMENT OF DIVIDENDS
UK 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.
Shareholders who would like their future dividends to be paid in
this way should complete a mandate instruction available from
the Registrar or register their mandate at: www.signalshares.com.
Under this arrangement dividend confirmations 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, please 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 plc shares.
For further details, contact the Company’s Registrar
(on 0371 664 0381* or email shares@linkgroup.co.uk) or
complete an application form online at: www.signalshares.com
* Calls are charged at the standard geographic rate and will vary by provider. Calls
outside the United Kingdom will be charged at the applicable international rate.
Lines are open between 09:00 – 17:30, Monday to Friday excluding public holidays
in England and Wales.
For participants in the DRIP, key dates of forthcoming dividends
can be found in the Financial Calendar page in the “Investors”
section of the website at www.helical.co.uk
SHARE DEALING SERVICE
An online and telephone share dealing service is available to our
Shareholders through Link Share Deal.
For further information on this service or to buy and sell shares
online, please visit www.linksharedeal.com or call 0371 664 0445*.
* Calls cost 12p per minute plus your phone company’s access charge. Calls outside
the United Kingdom will be charged at the applicable international rate. Lines are
open between 08.00 – 16:30 Monday to Friday excluding public holidays in England
and Wales.
SHAREGIFT
Shareholders with a small number of shares, which are
uneconomical to sell, may wish to consider donating them to
a charity, free of charge through ShareGift (registered charity
1052686). For further information please visit www.sharegift.org,
call 020 7930 3737 or write to ShareGift, PO Box 72253,
London, SW1P 9LQ / help@sharegift.org
DIVIDENDS
Dividends declared and/or paid during the year to 31 March 2020
were as follows:
Dividend
Record date
2019
Payment date
2019
2018-19 Final
14 June
19 July
Amount
7.50p
2019-20 Interim
29 November
31 December
2.70p
Dividend payment dates in 2020 will be as follows:
Dividend
Record date
2020
Payment date
2020
2019-20 Final
26 June
27 July
2020-21 Interim
December
December
Amount
6.00p
TBC 1
1 The amount of the 2020–21 Interim Dividend will be announced in November 2020.
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 investment advice, offers to
buy shares at a discount or offers of free reports into Helical.
If you receive unsolicited investment advice:
• Exercise caution and never disclose personal details;
• Obtain the correct name of the person and organisation
and make a record of any other information they give you,
such as a telephone number, address or website address;
• Check that they are properly authorised by the FCA
(Financial Conduct Authority) before getting involved. This
can be checked at fca.org.uk/consumers. If you deal with an
unauthorised firm you will not be eligible to receive payment
under the Financial Services Compensation Scheme;
• Get impartial advice before handing over any money;
• If the caller persists, hang up;
• Inform us on 020 7629 0113 (email: reception@helical.co.uk)
or our Registrars, Link Asset Services, on 0871 664 0300
(email: enquiries@linkgroup.co.uk). Whilst we are not able to
investigate such incidents ourselves we will record the details
and will liaise with the FCA; and
• Report the suspected fraud to the FCA either by calling:
0800 111 6768 or by completing an online form at:
www.fca.org.uk/consumers/report-scam-unauthorised-firm
SHARE PRICE INFORMATION
The latest information on the Helical 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 INFORMATIONAnnual Report and Accounts 2020Annual Report and Accounts 2020 172
Helical plc
FINANCIAL CALENDAR AND ADVISORS
CALENDAR 2020 – 2021
2020
25 June 2020
Ex-dividend date for final ordinary dividend
26 June 2020
Record date for final ordinary dividend
9 July 2020
Last day for DRIP elections
23 July 2020
Annual General Meeting
27 July 2020
Final ordinary dividend payable
November 2020 1 Half Year Results and interim ordinary dividend
announced
December 2020 2 Ex-dividend date for interim ordinary dividend
December 2020 2 Registration qualifying date for interim ordinary
dividend
2021
May 2021
Announcement of Full Year Results to 31 March 2021
Notes
1 The announcement date of the Half Year Results will be confirmed in October 2020.
2 Dates for the potential interim dividend will be confirmed in the Half Year Results
Announcement.
ADVISORS
Registrars
Link Asset Services
Bankers
Aviva Commercial Finance Limited
Barclays Bank PLC
HSBC Bank PLC
The Royal Bank of Scotland PLC
National Westminster Bank PLC
Wells Fargo
Joint stockbrokers
J.P. Morgan Cazenove
Numis Securities Limited
Auditors
Deloitte LLP
Corporate solicitors
Clifford Chance LLP
Mishcon de Reya LLP
CONTACT DETAILS
Helical plc
Registered in England
and Wales No.156663
Registered Office
5 Hanover Square
London W1S 1HQ
T: 020 7629 0113
F: 020 7408 1666
E: reception@helical.co.uk
www.helical.co.uk
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Annual Report and Accounts 2020 Registered in England and Wales No.156663
Registered Office
5 Hanover Square
London
W1S 1HQ
T: 020 7629 0113
F: 020 7408 1666
E: reception@helical.co.uk
helical.co.uk
Helical plc
@helicalplc