HELICAL PLC
Annual Report and Accounts 2021
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Helical plc
We create buildings for today’s occupiers who demand more
inspiring and flexible space, market leading amenities, high quality
management and with sustainability and wellness at their core.
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
Chief Executive’s Statement
Our Market
The Office Experience
Investment Case
Strategy
Business Model
Key Performance Indicators
Property Portfolio
The Property Portfolio in Numbers
Financial Review
Risk Management
Sustainability at Helical
Our Stakeholders – Section 172(1) Statement
82
GOVERNANCE
Chairman’s Review
Board of Directors
Corporate Governance Report
– Nominations Committee
– Audit and Risk Committee
– Directors’ Remuneration
Report of the Directors
Directors’ Responsibilities Statement
130
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
172
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
Shareholder Information
Financial Calendar and Advisors
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6
8
10
26
30
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36
44
47
52
60
72
82
84
88
94
99
103
126
129
130
136
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141
172
174
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We believe that businesses will always need space
to bring their teams together to collaborate and
work effectively. That’s why we’ve built our portfolio
to help give our tenants the freedom to grow
in the years ahead.
Sustainability
BREEAM “Outstanding”
33 Charterhouse Street received the UK’s first
BREEAM “Outstanding” at design stage under
the 2018 guidelines
Designing for Net Zero
Publication of “Designing for Net Zero”, a guide
to help aid our professional teams in meeting
our net zero carbon aspirations
Sustainability at Helical
Pages 60 to 71
London focused
We continue to view the London commercial
property market as the best source of capital
profits and we believe that our experience and
skills are best deployed in this sector.
Property Portfolio
Pages 36 to 43
2021 Highlights
Operational highlights
Financial highlights
100%
93%
Kaleidoscope let
Completed the 88,581 sq ft
letting to TikTok for an annual
net rent of £7.6m, a 5.4%
premium to 31 March 2020 ERV
Rent collected
93.3% of all rent contracted
and payable for the March
to December 2020 quarters
has been collected
£115m
Sale of Manchester properties
The Tootal Buildings, 35 Dale
Street and Fourways were sold
for £114.8m, reflecting a net initial
yield of 5.2%
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
The Group has made good progress during the year,
with the successful letting of the whole of Kaleidoscope,
London EC1 and the ongoing development of
33 Charterhouse Street, London EC1 driving its positive
financial results.
The sales of four investment assets and completion of
the sale of 37 residential units for a combined £163.4m
have improved the Group’s cash resources, reducing its
LTV and providing additional firepower to deploy into
new opportunities.
Net Assets
Profit Before Tax
£608m
(2020: £599m)
£20.5m
(2020: £43.0m)
IFRS Earnings Per Share
Total Property Return1
14.8p
(2020: 32.3p)
£48.6m
(2020: £83.9m)
See-through Loan
To Value1
22.6%
(2020: 31.4%)
EPRA Net Tangible Asset
value per share1
533p
(2020: 524p)
Total Dividend Per Share
Total Accounting Return
10.10p
(2020: 8.70p)
3.3%
(2020: 7.7%)
Portfolio Return
– MSCI
7.0%
(2020: 9.6%)
Total Shareholder
Return1
21.2%
(2020: 8.7%)
Key Performance
Indicators
Pages 32 to 35
Financial Review
Pages 47 to 51
1 See Glossary for definition of terms. The financial
statements have been prepared in accordance with
International Accounting Standards (IAS) in conformity
with the Companies Act 2006. In common with usual
and best practice in our sector, alternative performance
measures have also been provided to supplement IFRS,
some of which are based on the recommendations of
the European Public Real Estate Association (“EPRA”),
with others designed to give additional information
about the Group’s share of assets and liabilities, income
and expenses in subsidiaries and joint ventures.
“ The office sector is on the cusp of
considerable change and we believe
there are four key trends that will shape
the use of offices going forward and provide
a clear differentiation across the sector.
Sustainability
Technology
Wellness
Enhanced Amenities
Helical’s current portfolio already
incorporates the attributes identified
by these trends and, for that reason,
both our rental and capital values have
performed well. With our see-through
LTV at 22.6%, we have considerable
firepower at our disposal and our main
focus is now on identifying and acquiring
new projects. These will be a combination
of repositioning, refurbishment or
redevelopment opportunities, delivering
best-in-class office space commensurate
with a more sustainable post-Covid world.”
GERALD KAYE
Chief Executive
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The role of the office in enhancing
creativity and collaboration has never
been in greater focus.
OVERVIEW
We announce these annual results as the country emerges from
the Covid-19 pandemic with businesses re-opening and employees
returning to their usual places of work. It is hoped all remaining
restrictions are lifted on 21 June in accordance with the Government
roadmap. Removing these restrictions is vital to the recovery of the
economy so that businesses can operate efficiently and effectively
in a post-Covid world.
Helical has performed well over the past year, despite the challenges
presented by the pandemic, collecting over 93% of rents from its
tenants and reducing both finance and administration costs. Our
investment portfolio has contributed rental growth and capital
surpluses, mainly as the result of our letting successes at Kaleidoscope,
London EC1 and Trinity in Manchester. We have strengthened the
Balance Sheet by selling investment assets above book value (before
transaction costs) and have reduced the Group’s gearing level to its
lowest for 30 years.
2
CHIEF EXECUTIVE’S STATEMENT
The
future
of offic es
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021
4
CHIEF EXECUTIVE’S STATEMENT
CONTINUED
SUSTAINABILITY
During the year, we announced our new Sustainability Strategy,
“Built for the Future”, which sets out our long-term vision and
associated targets for our key areas: Our Environment, Our
People and Our Communities. In April we launched “Designing
for Net Zero”, a guide to aid our professional teams as they
collaborate on development projects. This latter guide covers the
entire development process from design to construction through
to operation and occupation and will assist the Company in
transitioning to a low carbon business.
As part of our commitment to sustainability reporting we
measure our performance against industry-wide benchmarks,
and I am pleased to be able to report significant progress against
these measures during the year.
In July 2020, we achieved the UK’s first BREEAM 2018 New
Construction “Outstanding” rating for the design stage of 33
Charterhouse Street, London EC1, a significant milestone for the
Company. We have also improved our GRESB score from a 2* to
a 3* Green rating, increasing our score from 63 to 76, and have
improved our MSCI ESG rating from AA to AAA, the top rating.
Further, we have been awarded a Silver rating under the EPRA
Sustainability BPR, up from Bronze, and finally our CDP score
has improved from C to B.
On a portfolio level, 99% by value of our completed portfolio
has an EPC rating of A or B (the remaining one has a C rating)
and each of our refurbished or redeveloped office buildings
has a BREEAM rating of Excellent.
Overall, the Group has made good progress in responding to the
climate change challenge and meeting its sustainability targets
and, importantly, has a clear path to continue on this journey.
RESULTS FOR THE YEAR
The profit before tax for the year to 31 March 2021 was £20.5m
(2020: £43.0m) with a see-through Total Property Return of
£48.6m (2020: £83.9m). See-through net rental income of
£25.0m (2020: £28.5m) was earned during the year while
developments generated a small see-through loss of £0.3m
(2020: profit of £9.9m). The see-through net gain on sale and
revaluation of the investment portfolio at £23.9m was lower than
the prior year (2020: £45.5m) and was the key reason for the
reduction in profit for the year.
Total see-through finance costs decreased to £14.9m (2020:
£17.0m), offset by interest receivable of £0.1m (2020: £1.4m)
to give net finance costs of £14.8m (2020: £15.6m). An increase
in expected future interest rates led to a £2.9m credit (2020:
charge of £7.7m) from the valuation of the Group’s derivative
financial instruments. Recurring see-through administration
costs were 13% lower at £9.7m (2020: £11.1m), with performance
related awards also reduced by 18% to £4.3m (2020: £5.3m)
and with National Insurance on these awards of £0.8m (2020:
£0.9m). The Group did not utilise the Government’s Coronavirus
Job Retention Scheme (Furlough).
A corporation tax charge of £0.9m has been recognised in the
annual results. With an increase in the Group’s deferred tax
provision of £1.7m, a total tax charge of £2.6m (2020: £4.3m)
has been recognised.
The profit for the year, after recognition of this tax charge,
was £17.9m (2020: £38.7m). There was an IFRS basic earnings
per share of 14.8p (2020: 32.3p) and an EPRA loss per share
of 1.8p (2020: earnings of 7.6p).
On a like-for-like basis, the investment portfolio increased in
value by 3.4% (2.7% including purchases and gains on sales).
The see-through total portfolio value reduced to £857.0m
(31 March 2020: £949.3m), following the sale of four investment
assets during the year.
Office buildings holding an EPC rating of A or B (by value)
99%
The unleveraged return of our property portfolio, as measured
by MSCI, was 7.0% (2020: 9.6%), showing strong outperformance
of its benchmark. We compare our portfolio performance to the
MSCI UK Central London Offices Total Return Index which
produced a return of -1.7% (2020: 4.5%) with an upper quartile
return of 1.6% (2020: 6.2%).
The portfolio was 89.5% let at 31 March 2021, generating
contracted rents of £37.8m (2020: £37.6m), at an average of
£60 psf, growing to £40.9m on the letting of currently vacant
space, towards an ERV of £52.1m (2020: £60.0m). The Group’s
contracted rent has a Weighted Average Unexpired Lease Term
(“WAULT”) of 6.9 years.
The Total Accounting Return (“TAR”), being the growth in the
net asset value of the Group, plus dividends paid in the year, was
3.3% (2020: 7.7%). Based on EPRA net tangible assets, the TAR
was 4.5% (2020: 9.3%). EPRA net tangible assets per share were
up 1.7% to 533p (31 March 2020: 524p), with EPRA net disposal
value per share up 1.0% to 485p (31 March 2020: 480p).
BALANCE SHEET STRENGTH AND LIQUIDITY
The Group has a significant level of liquidity with see-through
cash and unutilised bank facilities of £423m (31 March 2020:
£279m) to fund capital works on its portfolio and future
acquisitions.
At 31 March 2021, the Group had £78.3m of cash deposits
available to deploy without restrictions and a further £83.9m
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. Furthermore, the Group
has £260.5m of loan facilities available to draw on plus £28.1m
of currently uncharged property.
The see-through loan to value ratio (“LTV”) reduced to 22.6%
at the year end (31 March 2020: 31.4%) and our see-through
net gearing, the ratio of net borrowings to the net asset value
of the Group, reduced to 31.9% (31 March 2020: 49.9%) over
the same period.
At the year end, the average debt maturity on secured loans,
on a see-through basis, was 3.2 years (31 March 2020: 4.1 years),
increasing to 4.7 years on exercise of options to extend the
Group’s facilities and on a fully utilised basis. The average cost
of debt at 31 March 2021 was 3.5% (31 March 2020: 3.5%).
DIVIDENDS
Helical is a capital growth stock, seeking to maximise value by
successfully letting repositioned, refurbished and redeveloped
property. Once stabilised, these assets are either retained for
their long-term income and reversionary potential or sold to
recycle equity into new schemes.
This recycling leads to fluctuations in our EPRA earnings per
share, as the calculation of these earnings excludes capital
profits generated from the sale and revaluation of assets.
As such, both EPRA earnings and realised capital profits are
considered when determining the payment of dividends.
Last year, commensurate with action taken elsewhere to reduce
outgoings and preserve the Group’s cash resources, the Board
recommended a reduced final dividend of 6.00p per share,
with a total dividend of 8.70p, a reduction of 13.9% on the
previous year.
The Office Experience
New ways of working
The role of the office in enhancing
creativity and collaboration has never
been in greater focus.
1
THE OFFICE EXPERIENCE
Offices will become springboards
for creativity, innovation and
collaboration. Through design,
amenities and variety, they’ll enable
experiences that help teams thrive.
2
HEALTH AND WELLBEING
We’ve spent the last year navigating
immense uncertainty, coping with the
loneliness of lockdown and worrying
about our health. Wellbeing has to
take centre stage.
3
AGILE WORKING
The future of work will be flexible –
there’s no one-size-fits-all model
for businesses or employees.
Autonomy and variety will drive
business performance.
4
SUSTAINABILITY
Sustainability is, and will continue to
be, a driving force for 2022. Offices
will need to be adaptable and flexible,
while also ensuring they are resilient
to climate change. Our guide
“Designing for Net Zero” will support
us in achieving this.
5
During this year we have successfully let the whole of
Kaleidoscope, London EC1 and almost half of the space at Trinity,
Manchester, at rents above 31 March 2020 ERV, significantly
reducing the Group’s vacancy rates. We have sold £137.6m of
see-through investment assets, generating realised capital
profits of £35.9m.
In the light of this, the Board is proposing a return to the level
of dividends paid in respect of the year to 31 March 2019 and will
be recommending to Shareholders a final dividend of 7.40p per
share, an increase of 23.3% on last year (6.00p). If approved by
Shareholders at the 2021 AGM, the total dividend for the year
will be 10.10p, up 16.1% on 2020.
OUTLOOK
The office sector is on the cusp of considerable change and we
believe there are four key trends that will shape the use of offices
going forward and provide a clear differentiation across the sector.
First, sustainability is at the top of corporate agendas. This is
exemplified by the 2021 annual letter to CEOs from Larry Fink,
the CEO of BlackRock. He wrote of a tectonic shift in the
reallocation of capital to sustainable assets. Tenants will want to
occupy the most sustainable and environmentally favourable
buildings to achieve both their own net zero carbon targets and
those of their stakeholders. For the same reasons, investors will
actively seek to acquire these buildings. We believe there will be a
“green” rental and yield premium for the most sustainable assets.
The second trend is wellness. In a post-Covid environment,
tenants will require the most efficient and up to date air
conditioning systems to minimise the risk from airborne viruses.
Sensors showing air quality in a building will be essential and
office density per worker will decrease so employees will benefit
from a more comfortable environment.
Third, buildings will see greater use of technology to optimise
their environment and the workplace experience. Sensors that
record occupation levels will improve energy efficiency and the
management of buildings.
The fourth and final trend is enhanced amenity. There will be
greater demand for secure bike parking and high-quality “club
style” changing facilities. Buildings should provide an attractive
working environment with food and beverage facilities close at
hand. As part of this enhanced amenity, we will see an increasing
“hotelification” of office buildings, with five-star management
a necessity. Assets are moving from passive, low risk, long lease
investments to intensively managed shorter leased buildings
where maximising tenant retention, rental growth and building
performance will be the priorities.
There will be bifurcation in the office sector as the “real” Grade A
buildings, which incorporate these facilities and amenities,
diverge from the rest in both capital value and rental growth.
I would expect this pattern to accelerate as tenants seek working
environments that match the expectations of their employees.
We believe Helical’s current portfolio already incorporates
the attributes identified by these trends and, for that reason,
both our rental and capital values have performed well. With
our see-through LTV at 22.6%, we have considerable firepower
at our disposal and our main focus is now on identifying and
acquiring new projects. These will be a combination of
repositioning, refurbishment or redevelopment opportunities,
delivering best-in-class office space commensurate with a
more sustainable post-Covid world.
The Office Experience
Pages 8 and 9
GERALD KAYE
Chief Executive
25 May 2021
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 6
OUR MARKET
7
THE LONDON MARKET
The past year has seen a contrasting trend in the letting and
investment markets.
The London commercial office letting market has been
constrained as many occupiers adopted a "wait and see"
approach to their decision making. CBRE has reported that for
the year to 31 March 2021 the rolling 12 month take up is down
66% and this decline in activity has seen the central London
vacancy rate rise from 4.5% to 8.9%. However, it is important
to consider the underlying data when assessing these results
as a clear bifurcation of buildings between the high quality space
satisfying the latest needs of tenants and poorer quality space
is already becoming evident.
The availability of second hand, predominantly tenant controlled,
space is 111% above the average and represents 77% of the
available space in the market, whilst newly supplied, available
space is only 8% above average. Similarly, as demonstrated by
our recent letting of Kaleidoscope, London EC1 to TikTok, prime
rents have increased, with CBRE’s research highlighting the
resilience of the Tech Belt market. We anticipate that best-in-
class space will continue to achieve rental growth as the market
becomes increasingly bifurcated with tenants competing to
occupy a limited number of high quality buildings which offer
their employees the optimal working environment.
As we have previously highlighted prior to the pandemic, the
long-term future supply of space is constrained, and the pipeline
is continuing to decrease as developers defer capital investment
decisions. Knight Frank reports that 44% of the pipeline under
construction is pre-let and that, even if demand for new and
refurbished space were to decline to levels last seen in 2009,
during the global financial crisis, the current stock under
construction and due to complete this year (excluding pre-let
space) would be unable to satisfy requirements. As businesses
will increasingly seek to occupy new, best-in-class buildings, this
supply shortage is likely to be exacerbated in the medium term.
The investment market has been more resilient throughout the
last year, with London finishing 2020 strongly and ranked as
the world’s number one city for cross border commercial office
investment according to Knight Frank. With £50bn of global
capital said to be targeting London commercial property, the
trend in yield compression seen recently is expected to continue
for best-in-class assets. Furthermore, the benefits of investment
MATTHEW BONNING-SNOOK
Property Director
The past year has seen significant
challenges for the commercial
property market as the pandemic
has curtailed economic and social
activity across the globe. However,
as the vaccination programme
progresses at pace, optimism and
confidence are returning in the UK.
The past year has seen an acceleration of several key themes
within the commercial property sector and we believe that our
strategy and high quality, recently refurbished or redeveloped
portfolio are well placed to capitalise upon the significant growth
opportunities that will arise as we move forward.
WHY LONDON?
We continue to view the London commercial property market
as the best source of capital profits and we believe that our
experience and skills are best deployed in this sector. Economic
activity in London has been significantly restricted over the past
year but we are heartened by the fact that London has always
demonstrated great resilience and agility in the face of adversity.
As a global economic centre that attracts a diverse range of
innovation and creativity led businesses, London should be able
to recover quickly and strongly. With a highly skilled workforce
located in close proximity to the city centre, and 47% of the
population under 35 years old, London is particularly well placed
to capture the potential of new growth sectors such as Fintech,
Life Sciences and Artificial Intelligence.
“ As customers increasingly focus
on the wellbeing of their employees,
quality design and amenities are
increasingly important.”
Our portfolio
Highlights
Our portfolio of best-in-class office space continues to
align to market trends and provide both rental income
and capital growth.
into property have been highlighted by the volatility seen in
global equity markets and the historically low fixed income
returns available elsewhere. Investors are increasingly focusing
on the covenant strength of the tenant base, and the multi-let
nature of our buildings is aligned with these requirements.
KEY MARKET TRENDS
Going forward, it will be increasingly important to take
advantage of the strong relationships we have built with our
customers to understand their evolving business models and
occupational requirements as they return to fully utilising their
existing office space and look to grow. Occupiers are still
considering their future occupational requirements, but initial
feedback suggests a wider proliferation of agile working models
by businesses. We will look to build upon our existing flexible,
customer focused approach to ensure our buildings continue
to attract and retain new tenants.
As customers pay particular attention to the wellbeing of
their employees, quality design and amenities are increasingly
important. We have always considered public realm and
enhanced amenity provision to be a key offer of our buildings
and we are benefiting from this trend. Sustainability and
technologies are likely to become key differentiators for decision
makers in the commercial property sector going forward.
Sustainability sits at the heart of all Helical developments, guided
by our “Built for the Future” strategy, and we continue to ensure
all our assets maximise their performance throughout their
whole life cycle, from initial development through to operational
use. Similarly, exceptional digital connectivity is critical to
all occupiers, with an increasing emphasis placed upon the
integration of adaptable technology to ensure buildings are
smart and capable of harnessing the extensive data that they
generate. Our portfolio of tech-enabled, amenity rich, high
quality assets is particularly well placed to capitalise upon these
requirements.
LOOKING FORWARD
The change in occupier priorities when considering their office
requirements is likely to result in an expedited obsolescence of
older buildings. With our strategy of repositioning, refurbishing
and redeveloping we can play a key role in the regeneration of
these “brown” spaces, sustainably restoring them to the highest
occupational and technological standards, and we have a strong
track record of achieving this. We will continue to work with
existing owners, or new investors seeking to deploy capital into
the central London commercial office market and to do this in an
equity efficient structure.
Our experience of the pandemic has reinforced our view that
our investment in multi-let offices in well-located and accessible
Grade A buildings, incorporating the latest in sustainable building
design, offering state of the art technology with occupier health
and wellbeing at their core, provides the most resilient defence
against adversity and the best opportunity for continued growth.
Continued lettings
Rental growth
Long-term income
New portfolio
Following lettings at
Kaleidoscope and Trinity,
portfolio vacancy has reduced
from 17.2% in the year to 10.5%
at 31 March 2021.
We completed 12 lettings
totalling 123,583 sq ft in the year,
adding £8.8m to contracted rent,
at a 5.4% premium to 31 March
2020 ERVs.
61.5% of contracted rent is
secure for the next five years
with only 10.6% subject to lease
expiries or breaks in the next
12 months.
96% of the office units have
either been recently developed
or refurbished.
Rental collection
93% of rents collected during
the year.
Capital growth
3.4% valuation increase, on a like
for like basis, of our see-through
investment portfolio.
Property Portfolio
Pages 36 to 43
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 8
THE OFFICE EXPERIENCE
THE OFFICE EXPERIENCE
The office
experience
The role of the office in enhancing creativity
and collaboration for organisations has never
been in greater focus. Helical’s modern, high
quality, amenity rich portfolio is well positioned
to capitalise upon these evolving dynamics.
9
Connectivity is key
COMMUNITY
Our multi-let, amenity rich buildings
provide our occupiers the perfect
opportunity to cultivate a sense of
community. We have actively sought
to foster this throughout our portfolio
via a series of landlord-run social and
networking events. We have also sought
to utilise technology to enhance the sense
of community, with the roll out of building
specific apps providing a platform to
enable meaningful interaction. Through
significant investment in public realm
we also encourage the wider local
communities to use and benefit from
the enhanced areas we have created.
UNDERGROUND
AGILE WORKING
As they adapt to rapidly evolving working
practices, occupiers are increasingly
seeking agility within the space they
occupy. Flexibility is at the heart of Helical’s
offering to its tenants, demonstrated by
our willingness to offer them bespoke lease
terms to meet their individual needs. Our
“Plug and Play” space has been designed
to allow tenants to move quickly and easily.
By building strong relationships with all
our tenants we can provide them with
space that supports their needs, enables
collaboration and has the flexibility to adapt
to future changes.
CONNECTIVITY
Physical and digital connectivity are
essential requirements for occupiers in
the modern workplace. Our well-located
offices are all within a short distance of
key transport hubs and are located in
dynamic, desirable areas amongst a
growing network of high-performing
businesses. Similarly, all our offices
provide exceptional, modern digital
infrastructure, as demonstrated by
Kaleidoscope’s recent WiredScore
Platinum accreditation.
AMENITIES
Helical buildings seek to
provide best-in-class tenant
amenities, offering generous
cycle storage and spa quality
changing facilities. We seek to
provide thoughtfully-designed
outdoor space and extensive
public realm in all of our
developments so that tenants
are afforded the opportunity
to expand their workplace.
DESIGN
Quality design is essential
to maximise the efficient
use of space and to enable
businesses to collaborate.
The office will continue to act
as a key centre for business,
enabling information and
knowledge to be shared and
culture to be established.
Every Helical building puts
quality design at its heart,
providing exceptional spaces
for businesses to flourish.
SUSTAINABILITY
Sustainability sits at the core
of all Helical developments,
guided by our “Built for the
Future” strategy. We continue
to place utmost importance on
ensuring all our assets maximise
their sustainable credentials
throughout their whole life
cycle, from initial development
through to operational use.
All our existing central London
office developments are
certified as BREEAM “Excellent”
and we continue to push
for greater impact with our
33 Charterhouse Street
development achieving the
UK’s first BREEAM 2018 New
Construction “Outstanding”
rating for the design stage.
HEALTH AND WELLBEING
Employee wellbeing is a key area of focus for occupiers, particularly
as employees return to the office after an extended period of remote
working. Our carefully curated, design-led space provides an enriching
working environment for employees, supporting their physical and
mental wellbeing. Our developments aim to provide the healthiest
possible environment, with air flow rates at our new 33 Charterhouse
Street development significantly exceeding BCO requirements. Similarly,
through the integration of new technology into our buildings we
are able to offer occupiers the ability to harness the significant data
available to provide a perfectly calibrated, personalised working
environment to their employees.
The last year has highlighted
how important social interaction,
community, creativity, reliable
infrastructure and sense of
identity offered by offices are
to growing businesses.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 10
INVESTMENT CASE
11
We create buildings for today’s occupiers who demand more
inspiring and flexible space, market leading amenities, high
quality management and with sustainability and wellness at
their core. Applying this philosophy we seek to maximise
Shareholder returns through delivering income growth from
creative asset management and capital gains from our
development activity.
Maximising Shareholder
returns by delivering
income growth from
creative asset management
and capital gains from
our development activity.
To demonstrate the 6 Reasons to Invest in
action, we include the following three case
studies: the successful development and
letting of Kaleidoscope; the sustainable
design of 33 Charterhouse Street; and the
return of equity from the sale of three
Manchester assets.
Reasons
to invest
Helical plcAnnual Report and Accounts 2021STRATEGIC REPORTHelical plcAnnual Report and Accounts 2021 12
INVESTMENT CASE
Annual Report and Accounts 2021
13
02/ 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.
Acting
on
opportu nity
01/
Strong track
record
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.
Helical plcAnnual Report and Accounts 2021Helical plcSTRATEGIC REPORT 14
INVESTMENT CASE – IN ACTION
Acting on
opportunity/
Focusing our
portfolio on
the Capital
Kaleidoscope, London EC1, represents
Helical’s most recently completed office
development, comprising 88,581 sq ft of
office space spread over ground plus five
floors, located directly above the Farringdon
East Elizabeth Line station. The development
work completed in December 2019, and in
March 2021 we were pleased to announce
the letting of the entire building to TikTok
Information Technologies UK Limited.
ACQUISITION
The site was initially acquired by Crossrail via a Compulsory
Purchase Order to facilitate the development of the Elizabeth
Line, and planning permission was obtained to deliver a new
office building above the station once complete. The former
owners of the land had the right to reacquire the land at its
market value and formed a consortium to take advantage
of this opportunity. However, given the complexity and
expertise required to develop the site, the consortium sought
to dispose of the interest they held, which had the benefit
of the opportunity.
Given Helical’s extensive experience in the locality, including
the adjacent developments at Barts Square and 25
Charterhouse Square, we were approached with the
opportunity to acquire the site in an off-market transaction.
Helical recognised the transformative impact Crossrail would
have in creating unparalleled connectivity in the area, and the
impact that the City of London’s “Culture Mile” initiative
would have in further developing the area into an arts and
cultural hub. As such, in March 2018, Helical acquired the
company formed by the consortium and was granted a
150 year lease over the site, entering into a development
agreement with TfL/Crossrail to develop the property. Due
to the complex nature of the development, TfL/Crossrail
required Helical to demonstrate its significant experience
and expertise before granting the development rights.
In order to maximise the return on equity, Helical obtained
a £50.4m development facility from Wells Fargo in August
2018 to fund the development costs.
DESIGN
The building’s design ensured that the
development respected the abundant local
history, taking cues from Farringdon’s
Victorian warehouses, and worked within the
context of the three adjacent Conservation
Areas. For example, the vertical terracotta
framing elements of the building, from which
it derives its name, feature colours inspired by
the surrounding location on one side of the
vertical fins and provide a different reading
from each approach.
The design of the floors gives the openness
and spacious proportions of a loft conversion
and the clean lines and orderly appearance
of a wholly modern office. The warehouse-
inspired exposed beams allow the ceilings
above the workspace to be recessed for a
greater sense of space.
In the building’s reception, imagination was
required to integrate the Citigen pipes that
penetrate the space into a bespoke, striking
artwork installation by De Makers Van.
Together with the exceptional floor to ceiling
heights and a material palette of natural wood
and dark metals, the reception and communal
areas were designed to give a spacious, rich
and authentic feel.
Helical sought to improve upon the existing
planning permission, making a number of
amendments. The opportunity for significant
outdoor amenity space through a terrace on
the roof was identified at an early stage. The
design sought to ensure that the views over
Smithfield Market and the London skyline were
maximised, offering occupiers the opportunity
to fully benefit from a 5,000 sq ft outdoor
space. The building is also now amenity rich
with 110 cycle spaces, 110 lockers and 14
showers, and has additional flexibility in how
the ground floor units can be occupied.
15
SUSTAINABILITY AND TECHNOLOGY
BREEAM
Excellent
Waste diverted from landfill and recycled
100%
Renewable sources powered the site
for a 12-month period
100%
WiredScore achieved by the top 10%
of buildings certified worldwide
Platinum
Energy provided by connection to
Citigen District Energy Network
benefiting from continued investment
in renewable energy
Low carbon
Timber used was from sustainable sources
100%
Plastic free initiative reduced single use
plastic by
1 tonne
Sustainability at Helical
Pages 60 to 71
“ We set out to deliver an
architecturally striking and
characterful building that would
suit the fast growing creative and
tech companies that are attracted
to this highly accessible location.
Kaleidoscope offers this together with
excellent tenant amenities including
a spectacular roof terrace and
strong environmental credentials,
thereby clearly responding to today’s
requirements for wellness and
sustainability.”
MATTHEW BONNING-SNOOK
Property Director
DEVELOPMENT
The development of Kaleidoscope
commenced on site in August 2018 when
Crossrail handed over the completed station
base. The project was delivered in an
incredibly short 16 month programme with
work successfully completed in December
2019, led by Mace as main contractor. Whilst
Kaleidoscope was the last Development
Agreement to be signed, it became the first
over station development on the Crossrail
network to complete, demonstrating the
efficiency with which Helical and the project
team delivered.
Constructing a significant development
such as Kaleidoscope, alongside the ongoing
works to complete the Elizabeth Line station
below, provided additional complexities
and significant collaboration was required
between the respective project teams to
sequence the development.
OCCUPATION
On 5 March 2021, Helical completed the letting of the whole
of Kaleidoscope to TikTok Information Technologies UK limited
for a 15 year term with a tenant option to break at year ten. The
approach of focusing on providing a high quality office building,
delivering an amenity rich working environment, appropriate for
the future modern workplace, was vindicated by the successful
letting of the entire building at strong rents to a fast growing
tech tenant during the unprecedented challenges presented by
the Covid-19 pandemic.
As we await the expected full opening of the Elizabeth Line
in 2022, we look forward to TikTok taking full occupation of
the development upon completion of their fit-out works.
“ As a platform for billions of creators
worldwide, TikTok is a perfect business
for both the building and the area’s
ambition to be a destination for culture
and creativity.”
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 16
INVESTMENT CASE
17
03/
A customer
focused approach
Hu
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.
man
focused
design
04/
Sustainable
business model
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 life cycle.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 18
INVESTMENT CASE
Human
focused design/
Pioneering
sustainable
developments
In May 2019, Helical 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 Market. Since acquisition, planning consent has been
obtained to enhance the ground floor configuration and to
add an additional floor of 13,380 sq ft within the envelope
of the existing design, such that the property will now provide
205,369 sq ft of office accommodation over ground plus
ten floors.
The sustainability credentials of 33 Charterhouse Street were
endorsed with the development achieving the UK's first BREEAM
2018 New Construction “Outstanding” rating for the design
stage. The building achieved an overall score of 89%.
Sustainability has been at the
heart of this development from
the start of the project and
this has presented us with
a number of challenges and
opportunities. Through the
adoption of market leading
technologies and design and
operational practices, 33
Charterhouse Street embodies
the aspirations Helical
has set itself as part of its
Sustainability Strategy.
A BETTER PLACE TO BE
33 Charterhouse Street will be a
cornerstone building of what will be a
significantly transformed area of London.
Standing alongside the new Museum of
London, the Smithfield Market area is set
to be a new entertainment and cultural
hub. For our future occupiers, we want
their experience inside our building to
match these surroundings and have been
conscious to incorporate health and
wellbeing into the design and amenities
of the property.
A key priority of our Sustainability
Strategy is to:
“ Design and operate our buildings
to support health and wellbeing.”
In meeting this priority, we have
incorporated the following into the design
and operation of 33 Charterhouse Street:
19
I
S
T
R
A
T
E
G
C
R
E
P
O
R
T
BREEAM 2018 New Construction
Outstanding
THE CARBON CHALLENGE
As a developer of new buildings, we recognise that there is
a significant whole-life carbon impact in realising these projects.
In response to this, we set the following targets in June 2020:
• All new developments to be net zero carbon in operation
by 2025;
• Reduce the embodied carbon in all new developments
by 20% against the current RIBA benchmark; and
• Reduce the operational carbon emissions of the existing
portfolio by 25% by 2025.
As our largest development, 33 Charterhouse Street presented
us with the opportunity to challenge carbon from the initial
design through to operation, interrogating where the greatest
carbon savings could be made and how to incorporate these into
our design choices and construction methods.
At an operational level, 33 Charterhouse Square is targeting
a 43.3% emissions reduction compared to Part L of the
Building Regulations (2013). This significant saving has been
made possible through the connection to Citigen, a district
energy network.
Connection not only eliminates the requirement of in-building
plant creating extra space, but also allows the building to benefit
from Citigen’s own continual investment into low carbon energy
technologies.
The building is also on track to meet an embodied carbon figure
of less than 880 kg co2e/m2, exceeding our target of being 20%
lower than the current RIBA benchmark. This has been achieved
by incorporating the following measures:
• Use of aluminium with a high recycled content;
• Use of earth friendly concrete which offers a 50% embodied
carbon saving;
• Employing structural steel with a high recycled content;
• Use of 500m2 of recycled raised access flooring; and
• Sourcing brick and stone locally.
Dynamic water management
and recycling system which
will capture and filter both
grey and rainwater to be used
in the building
20% reduction in
embodied carbon
Earth friendly
concrete
750m2 green roof
2 bee colonies
144 327W PV Panels
43% reduction
in operational
carbon
500m2 of recycled
raised access flooring
750m2
Green roof seeded with
indigenous flower species
as well as wild flowers
Bee colonies further
preserving local ecology
2
4 Air Enhanced air quality with
Zones Floor zoning, allowing
the use of a number of air
quality sensors per floor
tenants to run localised
cooling, heating and
lighting
WELL WELL enabled allowing
tenants to achieve a
Platinum WELL rating
in their fit out
426
Bike storage spaces and
2 bike repair stations
along with 672 lockers
and 30 showers
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021
20
INVESTMENT CASE
SUPPORTING LOCAL
COMMUNITIES
As our largest ongoing
development project, spanning
a three-year programme, it was
important to acknowledge
the potential impact the
development could have on
local communities. In line
with our strategy, we look to:
“ Bring social, economic and
environmental benefits to the
areas in which we operate.”
33 Charterhouse Street
presented an excellent
opportunity to engage and
communicate with communities
to bring both social value and
benefits to those who live and
work in the area.
In partnership with the main
contractor, Mace, the following
community initiatives have
been implemented on site:
• Installation of a “green wall”
which runs the length of the
project, creating better air
quality from air purifying plants;
• Undertook significant works
at Prior Western Primary
School, enhancing their
playground and creating
£10,000 of social value;
• Employment of a St Mungo’s
service user as a Crane
Slinger via Keltbray;
• Participation in the
Considerate Construction
Scheme; and
• A monthly newsletter
providing a site update, issued
to suppliers, contractors and
local residents.
SUSTAINABILITY AWARD
By achieving BREEAM rating
“Outstanding”, the building’s
design has demonstrated it will:
• Use “smart” building
technology to integrate
the building’s performance
and occupier engagement
through a specific app;
• Deliver a site-specific
ecology plan;
• Use market leading water
management systems; and
• Eliminate the use of fossil
fuels, including refrigerants,
on site.
21
BUILDING FOR THE FUTURE
As we look forward to
practical completion in
September 2022, we are
committed to delivering
a building which will be
operationally sustainable,
enhances the biodiversity of
the local area and is designed
to put health and wellbeing at
the forefront. As we continue
through the development
programme, we believe there
are still opportunities to be
realised to create further
efficiencies, adding to the
sustainability credentials of
the building. With a continued
focus on achieving a BREEAM
“Outstanding” rating at
completion, we believe this
building is truly “Built for
the Future”.
33
Charterhouse
Street/EC1
Project
progress
Construction on 33 Charterhouse Street
commenced in early 2020 with completion
on track for September 2022.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 22
INVESTMENT CASE
23
05/
Focused
portfolio
The Group has built a high quality
portfolio, focused in London’s tech belt,
comprised of properties which 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.
Strength
through
experi ence
06/
Robust
financial
position
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.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 24
INVESTMENT CASE – IN ACTION
Strength through
experience/
Our
journey into
Manchester
Helical’s investment into Manchester commenced in 2014 with
the acquisition of Churchgate & Lee (now The Tootal Buildings)
for £34m. The Manchester market was an attractive alternative
to London as it presented the opportunity to acquire good
quality multi-let assets at lower capital values and higher
yields. Helical could then add value through repositioning
the building, creating distinctive, amenity rich space.
Of all the regional cities in the UK, Manchester has been
underpinned by the strongest occupational demand,
attracting investment with its strong economic and
employment growth record. High graduate retention rates
demonstrate its appeal and it has rapidly become known
as the second tech city behind London.
Over the past seven years Helical acquired five office
buildings, including three in the creative and tech-focused
Northern Quarter.
‘15
‘14
THE TOOTAL BUILDINGS PURCHASED
The Tootal Buildings comprised two iconic Grade II listed
interlinked office buildings providing 245,907 sq ft of
office space. Helical acquired the asset in March 2014
for £34m when the buildings were 64% let and had a
contracted rent of £2.4m. During the six years of our
ownership, Helical undertook significant refurbishment
works to the assets, improving all common parts
including both receptions.
Helical also undertook a rolling programme to refurbish
the vacant office space. At the time of sale, the building
was 100% let delivering a total headline rent roll of
c.£4.7m. This represents a 22% increase from £16.50 psf
at acquisition to £20.13 psf on sale.
31 BOOTH STREET
PURCHASED
31 Booth Street is located in
the prime city core of
Manchester. Helical acquired
the 24,902 sq ft vacant office
building in January 2016 for
£4.7m and after undergoing
a major refurbishment, the
building was re-launched to
the market in March 2017.
Following successful letting
the building was sold to the
Mayfair Capital-managed
Property Income Trust for
Charities fund (PITCH) in
December 2018 for £11.9m,
crystallising a capital profit
of £3.2m.
‘16
35 DALE STREET PURCHASED
35 Dale Street is a 56,209 sq ft Grade II listed
building situated in the heart of Manchester’s
Northern Quarter. Helical acquired the asset
in March 2015 for £7.4m. On acquisition the
building was fully let at an average rent of
£12.00 psf. Helical embarked on an active asset
management strategy to reclaim the space back
to enable the full redevelopment of the buildings
to unlock its full potential.
The approach was successful with the full
refurbishment costing £6.5m. Once complete
the building was fully let to nine tenants.
At the time the headline rent had moved to
£24.00 psf and an average rent of c. £19.00 psf,
a 58% increase since acquisition.
25
‘20
POWERHOUSE
PORTFOLIO SALE
(THE TOOTAL
BUILDINGS,
35 DALE STREET
AND FOURWAYS)
‘19
‘18
31 BOOTH STREET SALE
EXIT
Following the success of the disposal of 31 Booth Street in 2018, the
decision was made to sell The Tootal Buildings, 35 Dale Street and
Fourways. The investment and asset management strategy for these
assets was essentially complete, and the stabilised assets would present an
attractive acquisition opportunity, even in a challenging market created by
the impact of the Covid-19 pandemic. At the time, the blended net initial
yield was 5.2% and the sale crystallised a capital profit of £27.4m with an
unleveraged IRR of 11.8% and a total property return per annum of 7.1%.
The sale of these Manchester assets for
£114.8m has contributed to the Group’s
robust year end financial position, giving
Helical the firepower to take advantage
of new opportunities.
MANCHESTER 3%
2021
FOURWAYS PURCHASED
Fourways is a 60,009 sq ft Grade II listed
former packing warehouse located close
to 35 Dale Street in the Northern Quarter.
The asset, acquired in July 2018 for £16.5m,
was subject to a refurbishment programme,
involving upgrading the vacant office space
and repositioning the central atrium and
external elevations. On acquisition, the
contracted rent was £15.99 psf, and the
asset management activity resulted in the
headline rent increasing to £26.50 psf.
The initial business plan was progressing
well and the decision was taken to sell the
asset early, as part of the Powerhouse
Portfolio, to benefit from a portfolio
premium. At the time of sale the building
was 73% let, delivering a total rent of c.£1m.
‘17
TRINITY PURCHASED
Trinity was acquired in May 2017 for
£12.9m and is situated in Manchester’s
Central Business District between the
traditional city core and Spinningfields.
The building has undergone a full
redevelopment, infilling the atrium
and adding a new seventh floor. The
redevelopment works completed in
February 2019 at a cost of £6.4m.
Following the launch of the building in
2019, the initial letting phase was delayed
by Brexit and the impact of Covid-19.
Despite these challenges, good progress
has been made with 46% of the building
let in the year and an additional 9% has
been let since the year end. We are
hopeful that we will let the remaining
space during 2021.
MANCHESTER 14%
2019
LONDON 86%
LONDON
97%
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 26
STRATEGY
Our
strategy
We are confident that the
successful delivery of our strategy
in recent years means we are well
positioned, with our Grade A
buildings offering an appealing
environment for businesses
seeking high quality space.
Our strategic pillars:
1. Growth
2. Property
3. Sustainability
4. People
5. Financing
Growth
27
Maximise Shareholder return
by increasing the net asset value
of the Group through capital
gains and growing our rental
income stream to cover dividends.
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, 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.
Key Performance Indicators
TOTAL SHAREHOLDER
RETURN (1 YEAR)
TOTAL ACCOUNTING
RETURN
EPRA NTA
Other Performance Measures
EPRA LOSS PER SHARE
21.2%
3.3%
533p
1.8p
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
• Risk of pandemic outbreak
Key Performance Indicators
PORTFOLIO RETURN –
MSCI (1 YEAR)
PORTFOLIO RETURN –
MSCI (3 YEAR)
7.0%
8.9%
Other Performance Measures
ERV
CONTRACTED
RENTAL INCOME
VACANCY RATE
WAULT
TOTAL PROPERTY
RETURN
£52.1m
£37.8m
10.5%
6.9yrs
£48.6m
Principal associated risks
• Property values decline/reduced
tenant demand for space
• The Group carries out significant
development projects
• Health and safety risk
• Business disruption and cyber security
Property
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 28
STRATEGY
CONTINUED
29
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.
Key Performance Indicators
BREEAM rating
(Excellent
or above)
6 out of 9
OFFICE BUILDINGS
Other Performance Measures
EPC ratings
(B or higher, by value)
Energy acquired from
renewable sources
99%
100%
Principal associated risk
• Sustainability risk
People
Attract and retain the best
people encouraging their
development and progression
to ensure future succession
is secured.
Maintain our excellent reputation
and network of property sector
contacts, trusted partners
and advisors.
Strategic priorities
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
AVERAGE
EMPLOYEE SERVICE
AVERAGE STAFF
TURNOVER
11.0yrs
3.6%
Other Performance Measures
TRAINING AND
DEVELOPMENT
950hrs
Principal associated risks
• Employment and retention of key
personnel and business relationships
• Reliance on external partners
Financing
Operate a sustainable capital structure in
which the core business costs are covered
by income from the investment portfolio.
Use gearing on a tactical basis throughout
the cycle to accentuate returns.
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.
Other Performance Measures
SEE-THROUGH
LOAN TO VALUE
SEE-THROUGH
NET GEARING
AVERAGE COST
OF DEBT
AVERAGE MATURITY
– SECURED DEBT
CASH AND
UNDRAWN
BANK FACILITIES
22.6%
31.9%
3.5%
3.2yrs
£423m
Principal associated risks
• Availability and cost of bank borrowing
and cash resources
• Breach of loan covenants
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 30
BUSINESS MODEL
31
Building
value
We aim to deliver market leading returns
by developing customer focused and design
led properties, letting them to a diverse
tenant base on flexible terms, then applying
a proactive approach to asset management.
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.
S
C T U R E & FUNDING
u r p o s e , Values and Culture
r P
u
O
2
.
D
E
V
E
L
O
P
C
S A
S
E
SI N
U
B
T I V I T I E S
U
R
T
1. S
4
.
M
A
N
A
G
E
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.
Actively manage our assets throughout
their development, working with trusted
suppliers and focusing on quality,
efficiency and safety.
T
E
3 . L
Look to let our properties on flexible
terms to a diverse, financially robust
tenant base.
S
U
S
W
o
lo
c
rkin
al c
o
m
u
st
ain
a
m
TAINABILITY
g for the long-term benefi t of our stakeh o l d e r s ,
unities and the environment underpin s a l l o u r a c t
bility at Helical Pages 60 to 71
t i e s .
i v i
Through proactive asset management
we drive the rental value forward
whilst maximising occupancy.
VALUE CREATION
Enhanced value for reinvestment or realisation.
Property
£857m
SEE-THROUGH
PORTFOLIO VALUE
£48.6m
TOTAL PROPERTY RETURN
6
OFFICE BUILDINGS CERTIFIED OR
TARGETING BREEAM “EXCELLENT”
OR ABOVE
People
and Culture
96.4%
AVERAGE STAFF RETENTION
Market
Expertise
100%
LETTING OF KALEIDOSCOPE,
LONDON EC1 TO TIKTOK ON
A 15 YEAR LEASE
Relationships
and Reputation
c. 205,000 sq ft
33 CHARTERHOUSE STREET,
LONDON EC1 CERTIFIED AS
BREEAM OUTSTANDING
AT THE DESIGN STAGE
Financing
3.5%
SEE-THROUGH AVERAGE COST
OF SECURED FACILITIES
22.6%
LOAN TO VALUE
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT
32
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.
EPRA NET TANGIBLE ASSET VALUE PER SHARE
533pEPRA NTA
EPRA NET TANGIBLE ASSET VALUE PER SHARE
pence
2021
2020
2019
2018
2017
*Calculated using EPRA net assets
533
524
494
468*
473*
DESCRIPTION
The Group’s main financial 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 tangible
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 33 to the financial statements.
PERFORMANCE
The Group is targeted with increasing its net assets, of which
EPRA net tangible asset growth is a key component.
The EPRA net tangible asset value per share at 31 March 2021
increased by 1.7% to 533p (31 March 2020: 524p).
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.
33
MSCI PROPERTY INDEX
7.0%
HELICAL’S UNLEVERAGED PORTFOLIO RETURNS
TO 31 MARCH 2021
I YEAR
% pa
3 YEARS
% pa
5 YEARS
% pa
10 YEARS
% pa
20 YEARS
% pa
Helical plc
MSCI Central London Offices Total Return Index
Source: MSCI
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 targets outperforming the MSCI
Central London Office Total Return Index by 3.25%. Helical’s
ungeared performance for the year to 31 March 2021 was
7.0% (2020: 9.6%). This compares to the MSCI Central
London Offices Total Return Index of -1.7% (2020: 4.5%)
and the upper quartile return of 1.6% (2020: 6.2%).
Helical’s share of the development portfolio (2% 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 Central London Offices Total Return Index over
three years.
7.0%
-1.7%
8.9%
2.5%
9.4%
3.4%
12.5%
9.5%
11.8%
8.0%
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 34
KEY PERFORMANCE INDICATORS
CONTINUED
TOTAL SHAREHOLDER RETURN
21.2%
HELICAL’S TOTAL RETURNS
TO 31 MARCH 2021
I YEAR
% pa
3 YEARS
% pa
5 YEARS
% pa
10 YEARS
% pa
15 YEARS
% pa
20 YEARS
% pa
21.2%
26.7%
18.4%
11.5%
3.2%
0.3%
3.8%
6.3%
1.6%
6.9%
6.0%
6.5%
2.4%
5.2%
0.5%
7.9%
5.3%
4.8%
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 Shareholders expressed as an annualised percentage.
PERFORMANCE
The Group targets exceeding the upper quartile when
compared to its peers.
The Total Shareholder Return in the year to 31 March 2021
was 21.2% (2020: 8.7%).
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.
● Helical plc1 ● Listed real estate sector index3
● UK equity market2
Source: Datastream (Thomson Reuters).
1 Growth over all years to 31/03/21.
2 Growth in FTSE All-Share Return Index over all years to 31/03/21.
3 Growth in FTSE 350 Real Estate Super Sector Return Index over all
years to 31/03/21. For data prior to 30 September 1999, the FTSE
All Share Real Estate Sector Index has been used.
TOTAL ACCOUNTING RETURN
3.3%
TOTAL ACCOUNTING RETURN
%
2021
2020
2019
2018
2017
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.
3.3%
7.7%
8.4%
5.3%
8.3%
PERFORMANCE
The Group targets a Total Accounting Return of 5–10%.
The Total Accounting Return on IFRS net assets in the year
to 31 March 2021 was 3.3% (2020: 7.7%).
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.
35
AVERAGE LENGTH OF EMPLOYEE SERVICE AND AVERAGE STAFF TURNOVER
11.0yrs
AVERAGE LENGTH OF SERVICE AT 31 MARCH
years
2021
2020
2019
2018
2017
STAFF TURNOVER DURING THE YEAR TO 31 MARCH
%
2021
2020
2019
2018
2017
DESCRIPTION
A high level of staff retention remains a key feature of Helical’s
business. The Group retains a highly skilled and experienced
team with an increasing length of service.
PERFORMANCE
The Group targets staff turnover to be less than 10% per annum.
The average length of service of the Group’s head office
employees at 31 March 2021 was 11.0 years and the average
staff turnover during the year to 31 March 2021 was 3.6%.
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.
SHARE INCENTIVE PLAN 2002
These awards are made to all staff and are required to be held
for a period of three years.
11.0
10.0
8.7
7.9
8.0
3.6%
10.3%
6.9%
15.2%
5.7%
BREEAM AND EPC RATINGS
99% OFFICE BUILDINGS BY VALUE
HAVE AN EPC RATING OF A OR B
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”.
The Group targets a BREEAM rating of “Excellent” or
“Outstanding” on all major refurbishments or new developments.
PERFORMANCE
At 31 March 2021, six of our nine (31 March 2020: eight of our 14)
office buildings had achieved, or were targeting, a BREEAM
certification of “Excellent” or “Outstanding”. Those six buildings
account for c.85% of the portfolio by value.
Building
BREEAM rating2
EPC
rating
33 Charterhouse Street, London EC11
Outstanding (2018) A
The Warehouse and Studio, London EC1 Excellent (2014)
The Tower, London EC1
Excellent (2014)
25 Charterhouse Square, London EC1
Excellent (2014)
Kaleidoscope, London EC1
55 Bartholomew, London EC1
Excellent (2014)
Excellent (2014)
B
B
B
B
B
1 Certified at design stage.
2 Year designates the date of the applicable standard.
We are currently exploring BREEAM In Use certification for
The Loom where it was not possible to obtain a BREEAM
certification at the design and development stages.
Energy Performance Certificates (EPC) provide ratings on a
scale of A–G on a building’s energy efficiency and are required
when a building is constructed, sold or let. All but one of our
buildings (99% by portfolio value) have an EPC rating of A or B.
LINK TO REMUNERATION
ANNUAL BONUS SCHEME 2018
A quarter of the maximum Annual Bonus is payable based
on strategic objectives, which include improvements in
ESG scoring.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 36
PROPERTY PORTFOLIO
Property Overview
Helical’s portfolio is comprised of income-producing
multi-let offices, office refurbishments and
developments and a mixed use commercial/residential
scheme. As at 31 March 2021, London represented
97% and Manchester 3% of the investment property
portfolio. 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 Old Street and Shoreditch to Whitechapel.
Highly focused
London portfolio
111213 14
1
10
9
8
7
6
5
4
3
Tenant diversity
1. Software and Computer Services 31%
12%
2.
Online retailing – Fashion
11%
Flexible offices
3.
10%
4. IT Consultancy
8%
5. Advertising/Marketing
8%
6. Financial Products
7%
7. Media
4%
8. Human Resources
3%
9. Restaurants
2%
10. Consumer goods – other
1%
11. Business Consultancy
1%
12. Government/Charity
1%
13. Law
1%
14. Other
2
37
33 Charterhouse Street, EC1
25 Charterhouse Square, EC1
The Bower, EC1
The Loom, E1
Barts Square, EC1
Kaleidoscope, EC1
Helical plcAnnual Report and Accounts 2021STRATEGIC REPORTHelical plcAnnual Report and Accounts 2021 38
PROPERTY PORTFOLIO
CONTINUED
In March, we completed the letting of the
whole of Kaleidoscope, our 88,581 sq ft
office building located directly above the
Farringdon East Elizabeth Line Station,
to TikTok Information Technologies UK
Limited on a 15-year lease term. The
tenant has a break at year ten, and a
market rent free period has been granted.
The letting achieved an annual rent of
£7.6m, reflecting a 5.4% premium to the
31 March 2020 ERV.
SUSTAINABILITY RATINGS
BREEAM
EPC
Excellent
B
Kaleidoscope/ EC1
39
33 Charterhouse
Street/EC1
The development of our 205,369 sq ft
office building, in 50:50 joint venture with
AshbyCapital, is progressing in line with
the programme and is due to achieve
practical completion in September 2022.
The site is situated just 100m from
Farringdon Station and directly opposite
the location for the new Museum of
London, offering future tenants excellent
connectivity and amenity.
During the year, we exercised the option
under the Development Agreement
with the City of London to secure a
new 150-year lease of the site. Following
the grant of the new lease, Mace was
appointed as principal contractor. We
have also secured a £140m development
facility from Allianz, which has
subsequently been independently verified
as a “Green Loan”, which will fully fund
all future budgeted development costs.
In line with Helical’s sustainability
ambitions, 33 Charterhouse Street has
also been awarded the UK’s first BREEAM
2018 New Construction “Outstanding”
rating for the design stage.
SUSTAINABILITY RATINGS
BREEAM
EPC (targeted)
Outstanding
A
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 40
PROPERTY PORTFOLIO
CONTINUED
The Bower is a landmark estate
comprising 312,575 sq ft of innovative,
high quality office space along with
21,059 sq ft of restaurant and retail space.
The estate is located adjacent to the Old
Street roundabout, which is currently
undergoing significant remodelling and
will provide extensive additional public
realm when completed in Autumn 2022.
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 and we have completed a lease
renewal with Stripe Payments at the
Warehouse, extending the lease by three
years and achieving a contracted rent 5%
above 31 March 2020 ERV. We have also
completed the first rent review, achieving
a 31% uplift on the previous contracted
rent, and continue discussions on the
remaining office tenants’ rent reviews.
The retail operators are Bone Daddies,
Brewdog, Honest Burger and new tenants,
Crudo Cevicheria and Strap and Scraper.
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.
SUSTAINABILITY RATINGS
BREEAM
EPC
Excellent
B
The Bower/EC1
41
Barts Square/ EC1
In a joint venture with The Baupost Group LLC, Helical has redeveloped this
3.2 acre freehold site. The completed development now comprises 236
residential apartments, three office buildings: One Bartholomew (sold in
September 2015), 90 Bartholomew Close and 55 Bartholomew, and eight
retail units, as well as extensive new public realm.
90 BARTHOLOMEW CLOSE
In April 2020, we completed the sale of 90
Bartholomew Close to La Française 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 psf capital value).
55 BARTHOLOMEW
At 55 Bartholomew, we have let the
2,564 sq ft ground floor to Clevertouch
at a headline rent of £75.00 psf, a 15%
premium to 31 March 2020 ERV. Four
floors, including the fitted-out second
floor, remain available in this recently
refurbished 10,976 sq ft office building.
RESIDENTIAL/RETAIL
In Phase One of our residential scheme
at Barts Square, we have completed the
sale of five apartments since 1 April 2020,
three of which exchanged during the year,
leaving just one apartment available
for sale.
In Phase Two, we completed the sale
of 31 apartments during the year, 12 of
which exchanged during the year, and
the freehold sale of the former marketing
suite at 56 West Smithfield. A further sale
completed after the end of the year. In
total, 65 apartments have been sold in
the second phase, leaving 27 apartments
remaining to sell of which four are
currently under offer.
The retail space in Phase One is fully let
to Stem + Glory and Halfcup. One of the
Phase Two retail units has been let in the
year, and the remaining five retail units are
currently being marketed. The landscaping
of the new public square is complete,
offering extensive public amenity.
SUSTAINABILITY RATINGS
(55 BARTHOLOMEW)
BREEAM
EPC
Excellent
B
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 42
PROPERTY PORTFOLIO
CONTINUED
The
Loom/E1
At this 108,606 sq ft listed former Victorian wool
warehouse, we have undertaken further asset
management activities, reconfiguring units as they
become available to offer larger floorplates and offering
“Plug and Play” space to complement the existing
variety of units. As a result of lease events during the
year, 16,041 sq ft is currently available across seven units.
SUSTAINABILITY RATINGS
EPC
B
43
25 Charterhouse
Square/EC1
25 Charterhouse Square comprises 42,921 sq ft of
offices adjacent to the new Farringdon East Elizabeth
Line station, overlooking the historic Charterhouse
Square. The building was extensively refurbished upon
acquisition and is currently 74% let to Anomaly, Peakon
and Hudson Sandler.
The ground floor and first floor space is currently
available following a tenant lease event. The ground
floor units, which were previously used as office furniture
showrooms, have been significantly remodelled and
now benefit from a change of use to allow them to be
occupied as office accommodation going forward.
SUSTAINABILITY RATINGS
BREEAM
EPC
Excellent
B
The Powerhouse/W4
Trinity/MANCHESTER
In the year, we have let the third and
fourth floors to Kennedys Law LLP,
the two fifth floor units to Tosca Debt
Capital LLP and Saffrey Champness
LLP, and both of the ground floor retail
units. These lettings total 26,982 sq ft
and deliver £0.8m of contracted rent at
a 5.8% premium to the 31 March 2020
ERV. With a further floor let after the
year end, the 58,760 sq ft building is
now 55% let.
SUSTAINABILITY RATINGS
EPC
B
Manchester
The Powerhouse is a
listed building, providing
24,288 sq ft of office and
recording studio space, on
Chiswick High Road and is
fully let on a long lease to
Metropolis Music Group.
SUSTAINABILITY RATINGS
EPC
C
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 44
THE PROPERTY PORTFOLIO IN NUMBERS
THE PROPERTY PORTFOLIO IN NUMBERS
45
PORTFOLIO ANALYTICS
SEE-THROUGH TOTAL PORTFOLIO BY FAIR VALUE
During the year, total contracted income increased by £0.2m, primarily as a result of rent from new lettings and rent reviews.
This income more than offset the reduction in contracted income from the sale of 90 Bartholomew Close and three assets in
Manchester and losses from breaks and lease expiries.
London Offices
– Completed, let and available to let
– Being redeveloped
London Residential
Total London
Manchester Offices
– Completed, let and available to let
Total Manchester
Total Core Portfolio
Other
Total Non-Core Portfolio
Total
Investment
£m
742.7
69.3
–
812.0
27.3
27.3
839.3
0.1
0.1
839.4
Land and
development
£m
–
–
16.5
16.5
–
–
16.5
1.1
1.1
17.6
%
88.5
8.2
–
96.7
3.3
3.3
100.0
0.0
0.0
100.0
%
–
–
94.2
94.2
–
–
94.2
5.8
5.8
100.0
Total
£m
742.7
69.3
16.5
828.5
27.3
27.3
855.8
1.2
1.2
857.0
%
86.7
8.1
1.9
96.7
3.2
3.2
99.9
0.1
0.1
100.0
SEE-THROUGH LAND AND DEVELOPMENT PORTFOLIO
London Residential
Land
Total
Book value
£m
Fair value
£m
Surplus
£m
Fair value
%
16.5
0.5
17.0
16.5
1.1
17.6
0.0
0.6
0.6
94.2
5.8
100.0
CAPITAL EXPENDITURE
We have a committed and planned development and refurbishment programme.
Property
Investment – committed
The Tower, The Bower, London EC1
33 Charterhouse Street, London EC1
The Loom, London E1
Other
Development – committed
Barts Square, London EC1 – Phase One
Barts Square, London EC1 – Phase Three
Capex
budget
(Helical share)
£m
Remaining
spend
(Helical share)
£m
Pre-redeveloped
space
sq ft
New space
sq ft
Total completed
space
sq ft
Completion
date
110.0
65.9
0.8
5.3
69.9
44.3
3.0
44.4
0.8
0.8
0.2
0.8
114,000
–
–
–
–
–
68,195
205,369
–
–
182,195
205,369
Completed
September 2022
108,606 Ongoing refurbishment
– Ongoing refurbishment
127,364
89,353
127,364
89,353
Completed
Completed
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.
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
Contracted rent reduced through disposals of London Offices
Contracted rent reduced through disposals of Manchester Offices
Total contracted rental change from sales and purchases
Net increase in contracted rents in the year
INVESTMENT PORTFOLIO
SEE-THROUGH VALUATION MOVEMENTS
See-through
total portfolio
contracted rent
£m
(1.5)
0.2
8.0
0.8
7.5
(0.9)
(6.4)
(7.3)
0.2
London Offices
– Completed, let and available to let
– Being redeveloped
Total London
Manchester Offices
– Completed, let and available to let
Total Manchester
Total
PORTFOLIO YIELDS
London Offices
– Completed, let and available to let
– Being redeveloped
Total London
Manchester Offices
– Completed, let and available to let
Total Manchester
Total
Valuation
change
incl. purchases &
gains on sales
%
Valuation
change
excl. purchases
& gains on sales
%
Investment
portfolio
weighting
31 March 2021
%
Investment
portfolio
weighting
31 March 2020
%
2.5
9.2
3.0
1.1
1.1
2.7
2.6
9.2
3.2
10.0
10.0
3.4
88.5
8.2
96.7
3.3
3.3
100.0
80.1
4.9
85.0
15.0
15.0
100.0
EPRA Topped
Up NIY
31 March 2021
%
EPRA Topped
Up NIY
31 March 2020
%
Reversionary
Yield
31 March 2021
%
Reversionary
Yield
31 March 2020
%
True Equivalent
Yield
31 March 2021
%
True Equivalent
Yield
31 March 2020
%
4.5
n/a
4.5
2.4
2.4
4.5
3.9
n/a
3.9
4.4
4.4
4.0
5.1
5.6
5.3
5.9
5.9
5.3
5.2
5.5
5.3
6.2
6.2
5.4
5.0
4.9
4.9
5.7
5.7
5.0
5.0
4.9
5.0
6.0
6.0
5.1
SEE-THROUGH CAPITAL VALUES, VACANCY RATES AND UNEXPIRED LEASE TERMS
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
ERV
movement
like-for-like
%
%
Fair
value
weighting
%
Passing
rent
£m
Contracted
rent
£m
%
88.5
8.2
96.7
3.3
3.3
0.0
26.5
–
26.5
0.1
0.1
0.0
99.6
–
99.6
0.4
0.4
0.0
37.0
–
37.0
0.8
0.8
0.0
%
97.9
–
97.9
2.1
2.1
0.0
ERV
£m
41.6
8.6
50.2
1.8
1.8
0.1
100.0
26.6
100.0
37.8
100.0
52.1
100.0
79.8
16.5
96.3
3.5
3.5
0.2
1.0
1.2
1.1
5.8
5.8
0.0
1.2
London Offices
– Completed, let and available to let
– Being redeveloped
Total London
Manchester Offices
– Completed, let and available to let
Total Manchester
Total
31 March 2021
Capital value psf
£
31 March 2021
Vacancy rate
%
31 March 2021
WAULT
Years
31 March 2020
WAULT
Years
1,215
674
1,081
465
465
1,040
5.8
n/a
5.8
54.1
54.1
10.5
6.9
n/a
6.9
8.4
8.4
6.9
6.6
n/a
6.6
3.9
3.9
6.1
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT
46
THE PROPERTY PORTFOLIO IN NUMBERS
CONTINUED
FINANCIAL REVIEW
47
SEE-THROUGH LEASE EXPIRIES OR TENANT BREAK OPTIONS
% of rent roll
Number of leases
Year to
2022
10.6
23
Year to
2023
12.0
15
Year to
2024
9.3
12
Year to
2025
5.5
5
Year to
2026
1.1
5
2027
onward
61.5
34
Average rent per lease (£)
173,880
302,442
291,618
413,643
84,982
679,270
Of the total leases, 61.5% of contracted rent is secure for in excess of five years.
TOP 10 TENANTS
We have a strong rental income stream and a diverse tenant base. The top 10 tenants account for 68.9% of the total rent roll and the
tenants come from a variety of industries.
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.
Rank
1
2
3
4
5
6
7
8
9
10
Total
Tenant
TikTok
Farfetch
WeWork
Brilliant Basics
VMware
Anomaly
John Brown Media
CBS
Allegis
Incubeta
LETTING ACTIVITY
Tenant industry
Technology
Online retail
Flexible offices
Technology
Technology
Marketing
Media
Media
Recruitment
Marketing
Investment Properties
London
Completed, let and available to let – offices
– Kaleidoscope, London EC1
– The Loom, London E1
– 55 Bartholomew, London EC1
Completed, let and available to let – retail
– The Warehouse, The Bower, London EC1
– Barts Square, London EC1
Total London
Manchester
Completed, let and available to let – offices
– Trinity
Completed, let and available to let – retail
– Trinity
Total Manchester
Total
Contracted rent
£m
Rent roll
%
7.6
3.9
3.8
3.2
2.0
1.4
1.1
1.0
1.0
0.9
20.2
10.4
10.2
8.4
5.3
3.7
2.8
2.8
2.6
2.5
25.9
68.9
TIM MURPHY
FINANCE DIRECTOR
Area
sq ft
Contracted rent
(Helical’s share)
£
Above/(below)
31 March 2020
ERV
%
Rent psf £
£
Lease term
to expiry
Years
88,581
7,633,000
3,813
2,564
210,000
90,000
691
952
38,000
21,000
96,601
7,992,000
86.17
55.00
75.00
54.99
47.27
84.04
5.4
(0.1)
15.4
(21.4)
23.9
5.4
15.0
5.0
5.0
4.0
4.0
14.5
22,682
676,000
29.80
4.4
8.0
4,300
26,982
100,000
776,000
123,583
8,768,000
23.26
28.76
71.97
16.2
5.8
5.4
10.0
9.4
14.1
2021 Performance
Financial highlights
IFRS PERFORMANCE
PROFIT BEFORE TAX
£20.5m
(2020: £43.0m)
EPS
14.8p
(2020: 32.3p)
DILUTED NAV PER SHARE
492p
(31 March 2020: 489p)
EPRA PERFORMANCE
EPRA LOSS
£2.2m
(2020: Earnings of £9.1m)
EPRA EPS LOSS
1.8p
(2020: Earnings of 7.6p)
EPRA NTA PER SHARE
533p
(31 March 2020: 524p)
TOTAL ACCOUNTING RETURN
TOTAL ACCOUNTING RETURN ON EPRA NTA
3.3%
(2020: 7.7%)
4.5%
(2020: 9.3%)
Helical plcAnnual Report and Accounts 2021STRATEGIC REPORTHelical plcAnnual Report and Accounts 2021 48
FINANCIAL REVIEW
CONTINUED
OVERVIEW
The Group has made good progress during the year, with the
successful letting of the whole of Kaleidoscope, London EC1 and
the ongoing development of 33 Charterhouse Street, London
EC1 driving its positive financial results.
The quality of the portfolio, and the tenants it attracts, has
resulted in a strong rent collection of 93.3% for the year, despite
operating in the Covid-19 global pandemic. For those tenants
that have been hardest hit, primarily food and beverage
operators, Helical has offered rent holidays and concessions.
Unfortunately, a small number of tenants have ceased trading.
The sales of four investment assets and completion of the sale
of 37 residential units for a combined £163.4m have improved
the Group’s cash resources, reducing its LTV and providing
additional firepower to deploy into new opportunities.
RESULTS FOR THE YEAR
The see-through results for the year to 31 March 2021 include
net rental income of £25.0m, a net gain on sale and revaluation
of the investment portfolio of £23.9m and development losses
of £0.3m, leading to a Total Property Return of £48.6m (2020:
£83.9m). Total administration costs of £14.8m (2020: £17.3m)
and net finance costs, also of £14.8m (2020: £15.6m), contributed
to a pre-tax profit of £20.5m (2020: £43.0m). EPRA net tangible
asset value per share increased by 1.7% to 533p (31 March
2020: 524p).
The Company has proposed a final dividend of 7.40p per share
(2020: 6.00p) which, if approved by Shareholders at the 2021
AGM, will be payable on 26 July 2021. The total dividend paid
or payable in respect of the year to 31 March 2021 will be 10.10p
(2020: 8.70p), an increase of 16.1%.
The Group’s real estate portfolio, including its share of assets
held in joint ventures, decreased to £857.0m (31 March 2020:
£949.3m) primarily as a result of the sale of investment assets,
offset by net revaluation gains on the investment portfolio and
capital expenditure at 33 Charterhouse Street, London EC1.
The sale of investment properties facilitated the repayment of
debt during the year and decreased the Group’s see-through
loan to value to 22.6% (31 March 2020: 31.4%). The Group’s
weighted average cost of debt remained at 3.5% (31 March
2020: 3.5%) and the weighted average debt maturity was 3.2
years (31 March 2020: 4.0 years). The average maturity of the
facilities would increase to 4.6 years on exercise of the available
extension options, on a fully utilised basis.
At 31 March 2021, the Group had unutilised bank facilities of
£260.5m and £162.2m of cash on a see-through basis. These are
primarily available to fund the development of 33 Charterhouse
Street, 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
79.9
68.8
81.4
83.9
48.6
2017
2018
2019
2020
2021
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
%
10.8
9.3
10.1
9.6
7.0
2017
2018
2019
2020
2021
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 year.
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 2021 was 3.3% (2020: 7.7%).
Total Accounting Return on IFRS net assets
%
8.3
8.4
7.7
5.3
3.3
2017
2018
2019
2020
2021
Total Accounting Return on EPRA net tangible assets is the
growth in the EPRA net tangible asset value of the Group plus
dividends paid in the year, expressed as a percentage of EPRA
net tangible asset value at the beginning of the year.
Total Accounting Return on EPRA net tangible assets
%
9.3
8.0*
4.5
4.2*
1.0*
2017
2018
2019
2020
2021
* Calculated using EPRA net assets.
49
EARNINGS PER SHARE
The IFRS earnings per share decreased from 32.3p to 14.8p and
is 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 was 1.8p compared to earnings
per share of 7.6p in 2020, reflecting the Group’s share of net rental
income of £25.0m (2020: £28.5m) and development losses of
£0.3m (2020: profits of £9.9m), but excluding gains on sale and
revaluation of investment properties of £23.9m (2020: £45.5m).
NET ASSET VALUE
IFRS diluted net asset value per share increased from 489p to 492p
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 has introduced three new asset value measures which are
applicable to Helical’s results for the year to 31 March 2021. The new
measures 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. EPRA net tangible
asset value per share increased by 1.7% to 533p per share (31 March
2020: 524p). This movement arose principally from a total
comprehensive income (retained profits) of £17.9m (2020: £38.8m),
less £10.5m of dividends (2020: £12.2m).
EPRA net disposal value per share increased to 485p (31 March
2020: 480p).
INCOME STATEMENT
RENTAL INCOME AND PROPERTY OVERHEADS
Gross rental income for the Group in respect of wholly owned
properties decreased to £28.0m (2020: £31.6m), mainly reflecting
the sale of three Manchester offices during the year. In the joint
ventures, gross rents decreased to £0.2m (2020: £0.9m) due to
the sale of 90 Bartholomew Close, London EC1 at the beginning
of the year. Property overheads in respect of wholly owned
assets and in respect of those assets in joint ventures decreased
in line with rents at £3.2m (2020: £4.1m). Overall, see-through net
rents decreased by 12.3% to £25.0m (2020: £28.5m).
SHARE OF RESULTS OF JOINT VENTURES
The revaluation of our investment assets held in joint ventures
generated a surplus of £6.4m (2020: £8.5m). A loss of £0.9m was
recognised in respect of our Barts Square, London EC1 residential
development as a result of marketing and void costs. Transaction
costs on the sale of 90 Bartholomew Close, London EC1 resulted
in a net loss on sale of investment properties of £0.6m.
Finance, administration, taxation and other sundry items added
a further £1.7m of costs. An adjustment to reflect our economic
interest in the Barts Square, London EC1 development to its
recoverable amount generated a loss of £0.8m, leaving a net
profit from our joint ventures of £2.4m (2020: £13.4m).
GAIN ON SALE AND REVALUATION OF INVESTMENT
PROPERTIES
The valuation of our investment portfolio, on a see-through basis,
continued to reflect the benefit of our letting and development
activities where we generated a see-through valuation surplus of
£23.9m (2020: £45.5m), or 2.7% (including purchases and gains on
sales) and 3.4% on a like-for-like basis. Transaction costs on the sale
of the three Manchester assets resulted in a net loss on sale of £1.3m.
ADMINISTRATIVE EXPENSES
Administration costs in the Group, before performance-related
awards, reduced from £10.5m to £9.3m as a result of the impact
of Covid-19 and actions taken in response.
Performance related share awards and bonus payments, including
National Insurance costs, decreased to £5.1m (2020: £6.2m). Of this
amount, £2.0m (2020: £2.8m), 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
Performance related awards, including NIC
Group
In joint ventures
Total
2021
£000
9,276
5,140
14,416
432
2020
£000
10,524
6,191
16,715
596
14,848
17,311
RENT COLLECTION
Rent collected to date
Rent under discussion
Rent concessions
March – December 2020
quarters
%
FINANCE COSTS, FINANCE INCOME AND DERIVATIVE
FINANCIAL INSTRUMENTS
Total finance costs, including in joint ventures, fell during the year to
£14.9m (2020: £17.0m), reflecting the lower level of borrowings.
The Group has collected 93.3% of all rent contracted and payable for
the March, June, September and December 2020 quarters. This is
a strong performance in light of the impact of the global pandemic.
DEVELOPMENT PROFITS
In the year, from our role as development manager at 33
Charterhouse Street, London EC1, we recognised £0.8m of fees.
Further fees of £0.1m were recognised for carrying out accounting
and corporate services at Barts Square, London EC1 and 33
Charterhouse Street, London EC1.
Ongoing costs of closing out our legacy retail development
programme of £0.3m offset these to give a net development profit
in the main Group of £0.6m (2020: £3.3m).
The prior year profit of £3.3m included £0.8m of fees from our role
as development manager of One Creechurch Place, London EC3
and a write back of a provision in relation to the sale of Retirement
Villages in 2018.
93.3
1.8
4.9
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
2021
£000
2020
£000
10,567
1,319
–
–
1,111
2,401
-
(514)
14,884
11,292
543
855
1,692
2,270
1,736
328
(1,745)
16,971
Finance income earned, including in joint ventures, was £0.1m (2020:
£1.4m). The movement upwards in medium and long-term interest
rate projections during the year contributed to a credit of £2.9m
(2020: charge of £7.7m) on the mark-to-market valuation of the
derivative financial instruments.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 50
FINANCIAL REVIEW
CONTINUED
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 increased to £0.9m from £0.5m.
This was offset by a decrease in the deferred tax charge to £1.7m
from £3.8m, resulting in a total tax charge for the year of £2.6m
(2020: £4.3m).
DIVIDENDS
The interim dividend paid on 31 December 2020 of 2.70p was
unchanged from the previous interim dividend of 2.70p. The
Company has proposed a final dividend of 7.40p, an increase
of 23.3% on the previous year (2020: 6.00p), for approval by
Shareholders at the 2021 AGM. If approved, the total dividend
paid or payable in respect of the results for the year to 31 March
2021 will be 10.10p (2020: 8.70p), an increase of 16.1%.
BALANCE SHEET
SHAREHOLDERS’ FUNDS
Shareholders’ Funds at 1 April 2020 were £598.7m. The Group’s
results for the year added £17.9m (2020: £38.8m), net of tax,
representing the total comprehensive income for the year.
Movements in reserves arising from the Group’s share schemes
increased funds by £2.1m. The Company paid dividends to
Shareholders during the year of £10.5m. The net increase in
Shareholders’ Funds from Group activities during the year
was £9.5m to £608.2m.
INVESTMENT PORTFOLIO
Valuation at 31 March 2020
Acquisitions
– wholly owned
– joint ventures
Capital expenditure
– wholly owned
– joint ventures
Letting costs amortised
– wholly owned
– joint ventures
Disposals
– wholly owned
– joint ventures
Revaluation surplus
– wholly owned
– joint ventures
Economic interest adjustment
– joint ventures
Valuation at 31 March 2021
In joint
venture
£000
76,809
See-through
£000
913,684
Wholly
owned
£000
836,875
–
–
13,163
–
(19)
–
(114,144)
–
–
–
18,459
–
–
–
–
(20,305)
21,000
–
–
756,875
–
6,474
1,079
82,516
Head leases
capitalised
£000
2,161
–
4,421
(14)
–
–
–
–
–
–
–
–
Lease
incentives
£000
(20,131)
–
–
–
–
–
–
Book
value
£000
895,714
–
4,421
13,149
18,459
(19)
–
2,261
606
(111,883)
(19,699)
(1,613)
(51)
(6)
19,387
6,423
1,073
827,025
6,568
(18,934)
–
–
13,163
18,459
(19)
–
(114,144)
(20,305)
21,000
6,474
1,079
839,391
The Group spent £31.6m on capital works across the Investment portfolio, mainly at 33 Charterhouse Street, London EC1 (£18.4m),
Kaleidoscope, London EC1 (£7.5m), The Tower, London EC1 (£2.8m), Fourways, Manchester (£1.1m), Trinity, Manchester (£0.8m) and
The Tootal Buildings, Manchester (£0.5m). Three assets in Manchester, The Tootal Buildings, 35 Dale Street and Fourways, were sold
during the year for a combined book value of £114.1m. In the joint ventures, 90 Bartholomew Close, London EC1 was sold in the year
with a book value of £20.3m.
Revaluation gains added £27.5m to increase the see-through value of the portfolio, before lease incentives, to £839.4m (31 March
2020: £913.7m). The accounting for head leases and lease incentives resulted in a book value of the see-through investment portfolio
of £827.0m (31 March 2020: £895.7m).
DEBT AND FINANCIAL RISK
In total, the see-through outstanding debt at 31 March 2021 of £362.2m (31 March 2020: £386.9m) had a weighted average interest
cost of 3.5% (31 March 2020: 3.5%) and a weighted average debt maturity of 3.2 years (31 March 2020: 4.0 years). The average
maturity of the facilities would increase to 4.6 years following exercise of the two one-year extensions of the Group’s £400m
Revolving Credit Facility, and the one-year extension of the joint venture development loan, on a fully utilised basis.
Debt Profile at 31 March 2021 – Including Commitment Fees but Excluding the Amortisation of Arrangement Fees
Investment facilities
Total wholly owned
In joint ventures
Total secured debt
Working capital
Total unsecured debt
Total debt
Total
facility
£000
531,150
531,150
81,513
612,663
10,000
10,000
622,663
Total
utilised
£000
341,150
341,150
21,024
362,174
-
-
362,174
Available
facility
£000
190,000
190,000
60,489
250,489
10,000
10,000
260,489
Weighted
average
interest rate
%
Average
maturity
Years
Extended*
average
maturity
Years
3.3
3.3
6.5
3.5
-
-
3.5
3.3
3.3
1.9
3.2
-
-
3.2
4.8
4.8
3.8
4.7
1.0
1.0
4.6
* Calculated on a fully utilised basis with the two one-year extensions of the Revolving Credit Facility included and one-year extension of the joint venture development loan.
SECURED DEBT
The Group arranges its secured investment and development
facilities to suit its business needs as follows:
• Investment Facilities
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 £131m of term loan secured facilities. The value
of the Group’s properties secured in these facilities at 31 March
2021 was £729m (31 March 2020: £709m) with a corresponding
loan to value of 46.8% (31 March 2020: 43.8%). The average
maturity of the Group’s investment facilities at 31 March 2021
was 3.3 years (31 March 2020: 4.4 years), increasing to 4.8
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 2020: 3.3%). The
marginal cost of fully utilising the undrawn Revolving Credit
Facility was 1.5% (31 March 2020: 2.2%).
• 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
2021 was 1.9 years (31 March 2020: 1.8 years) with a weighted
average interest rate of 6.5% (31 March 2020: 4.2%). The
average interest rate will fall as the 33 Charterhouse Street,
London EC1 development facility is drawn down and would be
4.7% on a fully utilised basis, reducing to 2.25% once the
building is complete and let.
UNSECURED DEBT
The Group’s unsecured debt, following the repayment of the £5m
working capital facility in July 2020, is £nil (31 March 2020: £5.0m).
CASH AND CASH FLOW
At 31 March 2021, the Group had £423m (31 March 2020: £279m)
of cash and agreed, undrawn, committed bank facilities including
its share in joint ventures, as well as £28.1m (31 March 2020:
£70m) of uncharged property on which it could borrow funds.
51
NET BORROWINGS AND GEARING
Total gross borrowings of the Group, including in joint ventures,
have decreased from £386.9m to £362.2m during the year to
31 March 2021. After deducting cash balances of £162.2m
(31 March 2020: £83.0m) and unamortised refinancing costs of
£6.1m (31 March 2020: £6.0m), net borrowings decreased from
£298.5m to £193.9m. The see-through gearing of the Group,
including in joint ventures, decreased from 49.9% to 31.9%.
See-through gross borrowings
See-through cash balances
Unamortised refinancing costs
See-through net borrowings
Shareholders’ Funds
31 March
2021
31 March
2020
£362.2m £386.9m
£162.2m
£83.0m
£6.1m
£6.0m
£193.9m £298.5m
£608.2m
£598.7m
See-through gearing – IFRS net asset value
31.9%
49.9%
HEDGING
At 31 March 2021, the Group had £280.8m (31 March 2020:
£285.8m) of fixed rate debt with an average effective interest
rate of 3.1% (31 March 2020: 3.0%) and £60.4m (31 March 2020:
£68.0m) of floating rate debt with an average effective interest
rate of 4.2% (31 March 2020: 4.9%). In addition, the Group had
£240m of interest rate caps at an average of 1.75% (31 March
2020: £240m at 1.75%). In our joint ventures, the Group’s share of
fixed rate debt was £9.4m (31 March 2020: £nil) with an effective
rate of 10.7% and £11.6m (31 March 2020: £33.1m) of floating rate
debt with an effective rate of 3.1% (31 March 2020: 4.2%), with
interest rate caps set at 1.5% plus margin on £35.3m (31 March
2020: £32.3m at 1.5%).
Fixed rate debt
– secured borrowings
– unsecured borrowings
Total
Floating rate debt
– secured
Total
In joint ventures
– fixed rate
– floating rate
Total borrowings
31 March
2021
£m
Effective
interest
rate
%
31 March
2020
£m
Effective
interest
rate
%
280.8
–
280.8
60.4
341.2
9.4
11.6
362.2
3.1
–
3.1
4.21
3.3
10.72
3.1
3.5
280.8
5.0
285.8
68.0
353.8
-
33.1
386.9
3.0
3.3
3.0
4.91
3.4
-
4.2
3.5
1 This includes commitment fees on undrawn facilities. Excluding these would reduce
the effective rate to 1.9% (31 March 2020: 3.0%).
2 This includes commitment fees on undrawn facilities. Excluding these would reduce
the effective rate to 4.95% (31 March 2020: nil%).
TIM MURPHY
Finance Director
25 May 2021
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 52
RISK MANAGEMENT
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.
RISK CULTURE
Organisational structure
Tone from the top
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:
Risk culture
Behaviours
Personal ethics
Tone from
the middle
STRATEGIC
FINANCIAL
OPERATIONAL
REPUTATIONAL
53
Risk management approach
OVERSIGHT,
IDENTIFICATION,
ASSESSMENT
AND MITIGATION
OF RISKS AT A
STRATEGIC LEVEL
OVERSIGHT,
IDENTIFICATION,
ASSESSMENT
AND MITIGATION
OF RISKS AT AN
OPERATIONAL
LEVEL
Risk management framework
H
C
A
O
R
P
P
A
N
W
O
D
-
P
O
T
H
C
A
O
R
P
P
A
P
U
-
M
O
T
T
O
B
The Board
The Board
The Audit
and Risk
Committee
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.
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.
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.
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.
Personal predisposition to risk
Business as usual
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,
pages 99 to 102, 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.
LOW
MEDIUM
HIGH
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 75). 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 through
application of Helical’s Risk Management Framework (see page
53). As part of this process, the Risk Register and corresponding
Risk Heat Map (please see pages 54 to 59) 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 by 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.
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
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i
t
r
o
p
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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
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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.
Objective
setting
G
O
V
E
R
N
A
N
C
E
Risk
identification
Risk
culture
Risk
assessment
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT
54
RISK MANAGEMENT
CONTINUED
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,
primarily located in growing areas of
London, 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 has
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 2026, 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;
Mapping our Principal Risks
• 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
• Administration expenditure and
finance costs – administration
expenditure has been subject to
inflationary increases. The hedging
instruments the Group has in place
mitigate the impact of any future
changes to the interest base rate.
are updated and reviewed by the Board
and Executive Committee on a quarterly
basis; and
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 142.
Principal risks
• Risk of pandemic
outbreak
• Property values
decline/reduced
tenant demand
for space
• Political risk
• Breach of loan
covenants
• Health and safety
risk
• Business
disruption and
cyber security
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 2026.
• Management reviews the short-term
(three to twelve 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 6.9 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 July 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
PRINCIPAL RISKS
CHANGE
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
12
4 Political risk
d
o
o
h
i
l
e
k
L
i
4
3
1
7
8
10
6
13
9
2
11
14
5
5 Risk of pandemic outbreak*
6 Sustainability risk
7 Availability and cost of bank borrowing and cash resources
8 Breach of loan covenants
9 Employment and retention of key personnel and business relationships
10 Reliance on external partners
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
Impact
* This risk has been separately identified this year.
=
=
=
=
=
=
=
=
=
55
OUR PRINCIPAL RISKS
Helical’s principal risks fall into the following categories: Strategic Risks, Financial Risks, Operational Risks, and Reputational Risks.
When identifying risks, each risk is linked to the Group’s strategic objectives: Growth, Property, Sustainability, Financing and People.
Risk severity involves assessing both the likelihood of a risk materialising and its potential impact. The Executive Committee
assesses the risk severity and reports its assessment to the Board, which is based on:
• understanding the cause of the risk;
• an understanding of the resources at the Group’s disposal to mitigate the risk;
• estimating the probability of such a risk occurring, both pre and post mitigating actions; and
• an assessment of the quantitative and qualitative impact of such a risk materialising.
The severity levels determined by the Executive Committee are assessed by the Board.
The Board also reviews the mitigating actions to ensure they reduce the risk down to an acceptable level based on the Group’s
risk appetite.
Risk
Description
Mitigating actions
Changes in risk severity
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
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.
The Covid-19 pandemic has
accelerated the move to more agile
working practices. Whilst it is clear
that there is an important role for the
modern office, the full impact of the
shift is yet to be determined.
If the Group’s chosen markets
underperform, the impact on the
Group’s liquidity, investment
property revaluations and rental
income is greater.
Risks arising from the
Group’s significant
development projects
Link to Strategy
Property
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.
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 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.
As part of the
Government’s response
to Covid-19, non-essential
workers (including office
staff) were advised to
work from home. The
Government roadmap
announced has resulted
in a clearer path to the end
of the pandemic but there
remains uncertainty over
the long-term impact.
As such, this risk has
increased.
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 currently has
one ongoing development
at 33 Charterhouse Street,
London EC1 and has made
significant progress in fully
letting Kaleidoscope,
London EC1.
YoY change
=
Property values
decline/reduced
tenant demand
for space
Link to Strategy
Property
YoY change
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.
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.
Covid-19 has resulted in
a high level of macro-
economic uncertainty
which is adversely
impacting many
businesses, particularly
retail and leisure.
A long-term move to
increased home working
could reduce demand
for office space.
The letting of
Kaleidoscope in March
2021 has restored some
confidence in the
desirability of the London
office market and as a
result the risk level has
reduced.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT
56
RISK MANAGEMENT
CONTINUED
57
Risk
Political risk
Link to Strategy
Growth
YoY change
Risk of pandemic
outbreak
Link to Strategy
Growth
YoY change
New risk
Changes in risk severity
Covid-19 has resulted in
the Government taking
significant measures to
respond to this crisis.
The agreement reached
between the United
Kingdom and the
European Union has
reduced some of the
uncertainties surrounding
the UK leaving the
European single market,
and as a result the risk level
has been reduced.
Given the scale of the
impact of Covid-19, the
risk of pandemic outbreak
has been recognised as a
separate strategic risk for
the Group.
Description
Mitigating actions
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.
With an agreement reached
between the United Kingdom and
the European Union in December
2020 there is a clearer picture as
to how the United Kingdom will be
impacted. However, we are yet to
see how financial services will be
impacted and the longer-term effect
of the agreement on the case for
investment in the UK.
Covid-19 has resulted in the
Government taking significant
measures to respond to this crisis,
including providing high levels of
financial support and proposing
future taxation increases.
A pandemic outbreak could have a
considerable impact on the global
economy, as well as that of our
business and our stakeholders.
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.
In the event of a pandemic:
• The Executive Committee will be tasked with the daily
monitoring and managing of the risk, and will focus on
the impact on property locations, the business and
supply chain.
• Regular Board discussions will be held during any
pandemic to review the Group’s response and mitigating
actions.
• Enhanced engagement with our stakeholders will be
conducted (particularly with occupiers, contractors,
shareholders and employees).
• There will be continuous review of Government
guidelines and emerging practice, with risk assessments
undertaken as control measures change.
• Guidance will be issued to our staff, occupiers and
contractors on how to protect themselves and others.
The Group ensures that it has adequate Business
Continuity Plans and IT Business Continuity Plans in place
to enable remote working for all staff.
Testing of business resilience and risk planning is
conducted throughout the year.
Sustainability risk
Link to Strategy
Sustainability
The Group is exposed to
sustainability risks such as climate
and legislation changes related to
ESG issues.
The Group has a Sustainability Committee, chaired by
Matthew Bonning-Snook, which reviews the Group’s
approach and strategy. The Committee sets appropriate
targets and KPIs which are reported on annually.
YoY change
=
The Group benchmarks its ESG reporting against various
industry indicators and instructs an external expert to
perform gap analysis on its performance.
The Sustainability Strategy and a key performance review
document clearly demonstrate the Group’s approach to
sustainability and the associated risks.
We recognise that the
risks associated with
the impact of carbon
emissions and climate
change continue to
increase and that
businesses that are not
responding to these risks
are likely to experience
operational and
reputational damage.
Risk
Description
Mitigating actions
Changes in risk severity
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.
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.
The Group has £154.4m
of cash and £7.8m of cash
held in joint venture with
£55.1m available to
drawdown on bank
facilities at 31 March 2021.
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.
If the Group breaches debt
covenants, lending institutions
may require the early repayment
of borrowings.
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.
Breach of loan
covenants
Link to Strategy
Financing
YoY change
=
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
=
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.
Reliance on external
partners
Link to Strategy
People
The Group is dependent on a
number of external third parties to
ensure the successful delivery of its
development programme and asset
management of existing assets.
These include;
YoY change
• Contractors and suppliers;
=
• Consultants;
• Managing agents; and
• Legal and professional teams.
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.
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 and strong working relationships
are maintained.
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 therefore the
income covenants on our
loan facilities may come
under pressure.
The risk has remained
broadly similar due to high
staff retention levels and
the maintenance of strong
business relationships.
No change has been noted
or is expected.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT
58
RISK MANAGEMENT
CONTINUED
59
Risk
Description
Mitigating actions
Health and safety risk
Link to Strategy
Property
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.
YoY change
=
Business disruption
and cyber security
Link to Strategy
Property
YoY change
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 the Data
Protection Act 2018).
The Group increasingly employs
IT solutions across its property
portfolio to ensure its buildings are
“smart”.
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 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.
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 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 ensures
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.
Changes in risk severity
Whilst the level of the
Group’s development
activity is expected to be
lower, Covid-19 continues
to present additional
challenges in maintaining
safe working
environments.
The outbreak and spread
of Covid-19 has created
global economic
uncertainty and the
significantly increased
impact and likelihood of
this risk continues. Remote
working increases the risk
to cyber security. As
businesses have adapted
to these challenges and
the Covid-19 outlook has
improved, this risk has
reduced.
Risk
Description
Mitigating actions
Changes in risk severity
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 exposes 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 successfully delivering its
strategy and mitigating its principal risks should protect
its reputation.
This risk remains and is
expected to remain at the
same level.
This risk remains and is
expected to remain at
the same level.
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 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT
60
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 indirect
environmental, social and economic impact.
We also recognise that there is a climate crisis
and, as a responsible business, we need to ensure
that we are minimising our impact on the
environment. As we move towards a net zero
carbon world, we are in a position whereby we
can drive 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.”
Our Environment
• Transition to a low carbon
business
• Buy, use and re-use resources
efficiently
Our Communities
• Bring social, economic and
environmental benefits to the
areas where we operate
• Design and operate our buildings
to support health and wellbeing
Our People
• Attract and retain the best people
• Maintain strong relationships
with our business partners
• Released “Designing
for Net Zero”
• Introduction of a
Carbon Champion
• Helical becomes
a “carbon neutral”
business
• Green Groups set
up with tenants
• Helical team
participated
in the LandAid
QuaranTen event
• Staff interviews and
feedback session held
• Mental Health First Aid
(MHFA) training
61
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E
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P
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T
REDUCTION IN OUR
LIKE-FOR-LIKE PORTFOLIO GHG
EMISSIONS (SCOPE 1 AND 2)
17%
(2020: 4%)
REDUCTION IN
EMBODIED CARBON AT
33 CHARTERHOUSE STREET 20%
(2020: n/a)
MONEY RAISED BY HELICAL
TEAM FOR LANDAID
£1,500
(2020: n/a)
ANNUAL CHARITY DONATIONS £45,000
(2020: £45,000)
STAFF FELT POSITIVE ABOUT
RETURNING TO THE OFFICE 92%
(2020: n/a)
NUMBER OF MHFA FIRST AIDERS 4
(2020: n/a)
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62
SUSTAINABILITY AT HELICAL
CONTINUED
Our approach to
a sustainable future
Helical believes that by integrating these
priorities across its business, supply chain
and its stakeholders, it will create long-
term value and, crucially, will ensure
Helical is “Built for the Future”.
The United Nations has set 17 Sustainable
Development Goals (“SDGs”) which
articulate the key challenges facing the
globe. We have worked to align our key
priorities with those SDGs relevant to
our business and our industry. We have,
therefore, mapped our key priorities and
related objectives against the following
United Nations SDGs:
In June 2020, we launched our
Sustainability Strategy “Built for the
Future”. This strategy set out the
Company’s long-term vision
encompassing “Our Environment, Our
Communities and Our People” and will
support the business in becoming truly
sustainable. Underpinning its focus areas,
our strategy identifies six key priorities
which drive our long-term vision for
sustainability:
• Transition to a low carbon business;
• Buy, use and re-use resources
efficiently;
• Bring social, economic and
environmental benefits
to the areas in which it operates;
• Design and operate its buildings
to support health and wellbeing;
• Attract and retain the best people; and
• Maintain strong relationships with our
business partners.
Sustainability
Committee
In September 2019, a Sustainability
Committee was formally appointed by
the Board. The Committee is chaired by
Matthew Bonning-Snook, our Property
Director, and 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 Committee
Laura Beaumont
Head of Sustainability
John Inwood
Head of Asset Management
Pavlos Clifton
Senior Development Executive
Lois Robertson
Operations Manager
SUSTAINABILITY REPORTS
Please refer to our
Sustainability Performance
Report 2021 for more details
on how we have performed
against the targets set in
“Built for the Future”.
63
A year of progress
JUNE 2020
Release of our first Sustainability
Performance Report
AUGUST 2020
Outstanding
rating received for the UK’s first
BREEAM 2018 New Construction
rating for the design stage of our
33 Charterhouse Street development
NOVEMBER 2020
3*
GRESB Score awarded, which is a
significant improvement from 2020
FEBRUARY 2021
We become a signatory to
HRH The Prince of Wales’
“Terra Carta”, a charter that
puts sustainability at the
heart of the private sector
APRIL 2021
Release of “Designing for Net
Zero” – our first low carbon
building design guide
MAY 2021
Sue Farr appointed as the
designated Non-Executive Director
for ESG and Sustainability
20
20
20
20
20
20
21
21
21
21
JUNE 2020
Release of “Built for the Future”
– our sustainability strategy
SEPTEMBER 2020
Silver
Award received for EPRA
Sustainability Best Practice
Recommendations
DECEMBER 2020
B
CDP Score awarded
MARCH 2021
The Allianz funding facility for
33 Charterhouse Street certified
as a “Green Loan”
MAY 2021
Joined the UK Green
Building Council
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SUSTAINABILITY AT HELICAL
CONTINUED
65
Key priorities
— Transition to a low carbon business
— Buy, use and re-use resources efficiently
In recognition of the current climate change crisis
and Helical’s commitment to transition to a low
carbon business, the Company has set the following
short to medium-term targets:
• All new developments to be net zero carbon
in operation by 2025;
• Reduce the embodied carbon in all new
developments by 20% against the current RIBA
benchmark; and
• Reduce the operational carbon emissions of
its existing portfolio by 25% by 2025.
t
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O
The built environment is estimated to contribute
around 40% of the UK’s carbon emissions and it is
therefore imperative that the real estate industry
addresses its carbon footprint.
Our approach to decarbonising our business
starts with maximising the energy efficiency of
our buildings. We already purchase 100% of our
electricity and gas on renewable tariffs for our
office buildings, however, alongside this, we need
to significantly reduce consumption. During the year,
our like-for-like energy consumption decreased by
17%. However, to enable us to deliver sustained year
on year improvements in energy efficiency, and to
meet our energy intensity and carbon intensity
reduction targets, we will need to work closely with
our occupiers and supply chain partners to reduce
the amount of energy we collectively consume.
As a developer, embodied carbon accounts for
a significant proportion of a new development’s
carbon footprint. We have therefore committed to
undertake a full life cycle carbon assessment for all
new developments to accurately track embodied
carbon. Our ambition to reduce embodied carbon is
further endorsed by the release of our step by step
guide to designing low carbon and resilient buildings:
“Designing for Net Zero”. This guide is intended for
design teams to ensure carbon efficiencies are being
interrogated at every stage of a development.
Maintaining year on year reductions in embodied
carbon will only be achieved through the use
of new technology, alternative materials and
innovative building techniques. Only once building
energy efficiency measures, embodied carbon
reductions and renewable energy installations
have been addressed will we consider offsetting
the residual carbon.
TERRA CARTA
Upon its launch in January 2021, Helical signed
up to HRH The Prince of Wales’ Terra Carta,
which forms part of HRH’s Sustainable Markets
Initiative and works to put nature, people and
the planet at the heart of global business.
The Terra Carta lists ten action points for the
decade and aims to provide an integrated
roadmap towards an inspiring, inclusive,
equitable, prosperous and sustainable future.
The Charter’s roadmap is designed to harness
the power of nature, combining it with the
transformative power, innovation, and resources
of the private sector.
We have pledged to support the Terra Carta,
its principles and action articles, as they
complement and echo the existing sustainability
commitments and aspirations of the business.
This includes transitioning into a net zero carbon
business and will be supported by the release
of “Designing for Net Zero”.
STREAMLINED ENERGY AND CARBON REPORTING (SECR) DISCLOSURE
Our SECR disclosure presents our carbon footprint across Scopes 1, 2 and 3, together with an appropriate intensity metric and our
total energy use of electricity and gas.
Gross internal floor area (m2)
Scope 1 emissions and direct energy use
Emissions associated with combustion of fuel including company cars (tCO2e)
Emissions associated with operation of facilities (refrigerant gas) (tCO2e)
Energy use of combustion of fuel (kWh)
Scope 2 emissions and indirect energy use
Location based emissions associated with purchased electricity, heat, steam and cooling usage (tCO2e)
Location based emissions associated with head office electricity usage (tCO2e)
Energy use of purchased electricity, heat, steam and cooling (kWh)
Energy use of electricity at head office including electric vehicles (kWh)
Emissions and energy use totals
Absolute emissions Scope 1 & 2 (tCO2e)
Total energy use relating to Scope 1 & 2 (kWh)
Intensity measures
Emissions per m2 gross internal area (tCO2e/m2/year)
Energy use per m2 gross internal area (kWh/m2/year)
Emissions per £M revenue (tCO2e/£M)
Emissions and energy use totals like-for-like
Absolute emissions on a like-for-like basis (tCO2e)
Energy use on a like-for-like basis (kWh)
Intensity measures like-for-like
Emissions per m2 gross internal area on a like-for-like basis (tCO2e/m2/year)
Energy use per m2 gross internal area on a like-for-like basis (kWh/m2/year)
* Scope 3 emissions are reported separately in our Sustainability Performance Report.
2021
2020
161,759
167,333
860
–
4,274,003
618
24
3,348,280
1,310
23
6,427,922
96,009
1,765
23
6,905,587
91,910
2,193
10,797,934
2,431
10,345,777
0.014
66.75
85.66
0.015
61.83
87.44
1,281
6,052,266
1,487
6,546,421
0.048
229.82
0.058
258.11
ENERGY EFFICIENCY
We have continued to roll out a number of energy efficiency
improvements across our assets in the reporting period.
This includes:
• Increased coverage of LED lighting;
• Developed existing energy management practices;
• Increased the coverage of climate and lighting controls;
• Reviewed options for Low and Zero Carbon (LZC)
technologies, such as photovoltaics; and
• Actively managed ventilation and heating strategies.
At one of our sites we have performed a pilot study into
software integration of the BMS and control systems with an
energy platform. The objective is to improve the efficiency of
the asset in delivering improved comfort levels, and operational
and energy savings. We intend to review the success of this
pilot with a view to rolling this out across the portfolio.
OUR METHODOLOGY
For our SECR disclosure we have used the operational control
consolidation method, as this best reflects our property
management arrangements and our influence over energy
consumption. Included in our operational control data are
emissions and energy usage from our managed properties
(including 100% of emissions from joint venture properties) and
head office usage. Where we have purchased energy, which is
sub-metered to occupiers, this is itemised separately. We have
included usage or emissions from our development sites and
refurbishments sites as these are still considered under our
operational control. We have used DEFRA Environmental
Reporting Guidelines and the Greenhouse Gas Protocol to
calculate our emissions.
Our full Sustainability Performance Report 2021, aligned with
EPRA Sustainability Best Practice Recommendations, can be
found on our website.
THIRD PARTY VERIFICATION
We appointed Avieco Ltd to perform third party verification of
our SECR disclosure for the year 1 April 2020 to 31 March 2021.
Based on the verification procedures detailed in their full
statement, Avieco have found no evidence to suggest that
Helical’s SECR disclosure 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 2021 on our website.
CARBON NEUTRAL BUSINESS
As we continue to investigate the best methods to reduce
carbon emissions at our existing assets and our development
projects, we have elected to address the emissions we produce
at a corporate level. We have worked hard to reduce our head
office and associated emissions over the past three years by
54%, and this has been achieved by championing energy saving
initiatives at our head office and replacing our company vehicles
with pure electric or hybrid models. We have then offset our
residual carbon emissions using Gold Standard verified credits
as recommended by the UK GBC. We have calculated our
emissions for the year to include head office electricity, water,
waste and company car mileage, and over the next year we will
extend our reporting scope to include all staff travel, and head
office procurement.
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SUSTAINABILITY AT HELICAL
CONTINUED
67
GOVERNANCE
Describe the Board’s oversight of climate-related risks
and opportunities.
Sustainability updates are regularly provided at scheduled
Board meetings with formal updates provided on a six-
monthly basis. Sue Farr has also been appointed the
designated Non Executive Director for ESG matters.
Describe management’s role in assessing and
managing climate-related risks and opportunities.
The Sustainability Committee, chaired by our Property
Director, Matthew Bonning-Snook, meets quarterly and is
attended by several members of the executive team. Regular
sustainability updates are also provided to the Executive
Committee and Board.
THE TASK FORCE ON CLIMATE-RELATED
FINANCIAL DISCLOSURES (TCFD)
This is the first year we have elected to incorporate the findings
of the Task Force on Climate related Financial Disclosures into
our Annual Report. The timeline below sets out the steps we
will be taking to ensure we are fully compliant with the
recommendations by 2022.
A summary of our approach to compliance, in line with the
TCFD guidelines, is provided below. For more on our approach
to risk see pages 52 to 59 and pages 88 to 93 for Board
activities. A more detailed disclosure of TCFD is available on
our website with our Sustainability Performance Report 2021.
Year to 31 March 2020
Year to 31 March 2021
Year to 31 March 2022
Governance
and Strategy
Established a
Sustainability
Committee with
Board oversight.
Risk Management
Strategy and
Risk Management
Completed climate
scenario analysis.
Audit asset level
exposure.
Develop robust
mitigation and
resilience strategy.
Implement mitigation
targets and metrics.
“ Climate change is one of the greatest issues businesses
are currently facing. As a listed commercial property
developer, we have a duty to drive transparency,
accountability and responsibility in our reporting.
By supporting the TCFD recommendations, we are
actively demonstrating our commitments to being
a sustainable business.”
STRATEGY
Describe the climate-related risks and opportunities the
organisation has identified over the short, medium
and long term.
RISK MANAGEMENT
Describe how processes for identifying, assessing,
and managing climate-related risks are integrated
into the organisation’s overall risk management.
Horizon
Period
Definition
Short term
0-3 years
Medium term 3-5 years
Long term
5-15 years
Defined risks and opportunities are
generally specific in nature and have a
higher impact to the business today.
The period for which the Group
regularly reviews forecasts and which
will often encompass the lifetime of
major development projects.
More broader risks which have a wider
impact on the Group’s strategy and
will help define how the Group will
look to operate in the long term.
Describe the impact of climate-related risks and opportunities
on the organisation’s businesses, strategy and financial planning.
As a property developer and asset manager, climate-related
issues affect the way we design our new developments and
how we manage our existing assets effectively.
To help us incorporate climate-related resilience into our
development assets, we have published a guide “Designing for
Net Zero”. This guide details our ten-step approach to designing
low carbon and climate resilient developments and considers
post occupation performance and carbon offsetting strategies.
Describe the resilience of the organisation’s strategy,
taking into consideration different climate-related scenarios,
including a 2°C or lower scenario.
Physical climate-related risks, such as increasing temperatures,
could increase the cost of maintaining and managing our
buildings, e.g. utility costs and greenhouse gas (“GHG”)
emissions. As a property developer and operator, we have a
significant focus on reducing energy usage and carbon, ensuring
the efficient operation of our buildings. Our targets support our
ambition to transition to a low carbon business by 2025.
The Executive Committee, Audit and Risk Committee and the
Board formally review the Group’s principal risks. This includes
climate-related risks, including their likelihood, impact and
mitigating controls, which are managed by the Sustainability
Committee.
METRICS AND TARGETS
Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its
strategy and risk management process.
We report on an extensive range of consumption and intensity
metrics relating to energy, carbon, waste and water in our
Sustainability Performance Report 2021.
We disclose Scope 1, Scope 2 and, if appropriate, Scope 3 GHG
emissions, and the related risks.
Metrics in connection with climate-related risks including Scope
1, 2 and 3 emissions are reported within our Streamlined Energy
and Carbon Reporting (SECR) on page 65 and within our
Sustainability Performance Report 2021 on our website which
is aligned with EPRA Sustainability Best Practice
Recommendations.
Describe the targets used by the organisation to manage
climate-related risks and opportunities and performance
against targets.
We have developed a set of targets which are aligned with the
Science Based Targets initiatives (SBTi), and we have also set
out an embodied carbon reduction target. These targets, along
with other relevant KPIs, are set out in our Sustainability Strategy
“Built for the Future” which can be found on our website.
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SUSTAINABILITY AT HELICAL
SUSTAINABILITY AT HELICAL
CONTINUED
CONTINUED
s
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£1,500
Raised by Helical team for
LandAid QuaranTen
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
Investing in local initiatives and supporting
communities maximises social value and creates
places that are sustainable for the long term. We
monitor and manage the social impact of our
development activities, ensuring that we are bringing
a positive social, economic and environmental
impact to the area. This includes creating a calendar
of events and initiatives to ensure we are positively
engaging with local residents, schools, community
groups and businesses, issuing monthly newsletters
to those impacted by our development activities and
supporting local charities.
The Covid-19 pandemic has highlighted the
importance of health and wellbeing, with both
communities and tenants placing a much greater
value on their access to green spaces, bio-diversity
and improved air quality. For our existing portfolio
we are working with our building managers to ensure
that relevant and applicable health and wellbeing
aspects are considered in an integrated and inclusive
way. These include:
• Indoor air quality reviews;
• Access to mental health first aid trainers;
• Facilitation of building specific Green Group
meetings; and
• Calendar of wellness events.
Our approach to health and wellbeing is not limited
to our buildings. We actively promote initiatives to
support the health and wellbeing of our people, local
communities and supply chain partners, working to
support mental health initiatives and ensure ethical
labour practices. On page 18, you will find a case
study on 33 Charterhouse Street which highlights
how we embed these aspirations during a
development project.
69
THIS IS FOR LANDAID
In July 2020 LandAid were unable to hold their annual
10k run fundraising event so instead opted to hold the
LandAid QuaranTEN where participants could run or
cycle 10 miles or 10 kilometres or walk 10,000 steps.
Thirteen members of the Helical team “stepped up” and
along with family members raised a fantastic £1,500 by
running, walking and pedalling their way around their
local areas. In true British Summertime tradition
conditions varied from hot to windy to torrential rain
but heroic performances prevailed throughout and
generous sponsors supported everyone’s efforts.
Altogether more than 760 individuals from within the
property industry participated in the event and a grand
total of over £120,000 was raised to support LandAid’s
work to end youth homelessness.
“ After participating in the LandAid run
for several years I knew how special the
atmosphere was during the race. Doing the
run “virtually” last year was tough without
the real life support of colleagues, friends
and family but somehow it made us all more
determined to come together and raise
money for a great cause. I even managed a
personal best!”
LESLEY DODD
Senior Financial Accountant
Number of individuals
at Helical that participated
in LandAid QuaranTEN
13
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SUSTAINABILITY AT HELICAL
CONTINUED
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Key priorities
— Attract and retain the best people
— Maintain strong relationships with
our business partners
Helical has a small core team but works 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.
At Helical we encourage an open and inclusive
culture as 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, further details of which are set
out in the Governance Review.
Diversity is important in helping Helical achieve 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.
Not only do we offer our staff a competitive
remuneration and benefits package, we also support
part-time, job-sharing and flexible working requests
where possible. During the year under review, 17.8%
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 3.6%, with
an average length of service of 11.0 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 950 hours of training and
development – an average of 4.5 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
each supplier.
Total number of
staff as at 31
March 2021
Average
length of
service (years)
Executive Directors
Executives
All employees
3
15
28
26.8
8.7
11.0
3
6
Executive
Directors
Executives
9
Male
Female
15
All staff
13
71
Percentage of staff that felt
they were well supported
while working from home
88%
Percentage of staff that felt
positive about returning to
the office
92%
Percentage of staff that
still feel that our core
values: Integrity, Excellence,
Collaboration, Creative,
Dynamic, Sustainable
accurately represent our
Culture/business
85%
SUPPORTING OUR STAFF
For the majority of the past year, our staff have navigated the
challenges of working from home, juggling work-life balance and
in many cases acting as live-in teachers. A fundamental part of
our company Culture is the ability to come together as a group
to collaborate, inspire and feel part of one team. This has proven
to be incredibly difficult over the past 12 months and we have had
to adapt the ways we socialise and communicate with our staff.
It was important to us that our staff felt supported and there was a
channel of communication whereby thoughts and concerns could
be raised. In response to this we carried out staff interviews with
every member of staff in both May 2020 and March 2021. Detailed
responses to these interviews can be found on page 81 within the
Governance Review, however the interviews highlighted that staff
were missing the culture of being in the office and being able to
connect with other colleagues. Throughout the year we held a
number of “virtual” social events, including a wine and cheese
tasting night, a virtual treasure hunt and a 10K fundraiser for
LandAid. As we return to the office we are looking forward to
rekindling our team spirit and again being part of a culture that
makes Helical so unique.
MENTAL HEALTH FIRST AID TRAINING
Our employees’ wellbeing remains fundamental
to supporting our high performing Culture. In
recognition of our commitment to health and
wellbeing in the workplace, in March 2021, four
employees participated in mental health training,
achieving a level three qualification in Mental
Health First Aid in the Workplace. This two-day
training course demonstrates how to look out for
warning signs of poor mental health and how to
offer colleagues appropriate support in accessing
professional help where required.
“ I’m so glad I volunteered to do this training,
not only was it incredibly comprehensive, but
it also gave an insight as to how easy it can
be to miss the warning signs that someone
may be experiencing mental ill health. It is a
subject that is spoken about at length in the
media and I was really pleased to see that,
even though Helical is a small company, it
takes wellbeing incredibly seriously. It is clear
that Helical is committed to eliminating the
stigma and encouraging an open culture
when it comes to mental health.”
LAURA BEAUMONT
Mental Health First Aider
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 2021 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. Further details on our Health and Safety
performance can be found within our Sustainability
Performance Report.
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72
OUR STAKEHOLDERS – SECTION 172(1) STATEMENT
Engaging with
our stakeholders
SECTION 172(1) STATEMENT
The Board of Directors confirm, that during the
year under review, it has acted to promote the
long-term success of the Company for the benefit
of the 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.
Promoting the long-term
success of the Group
Engrained within the Culture of Helical is its
consistent approach to ensuring the wider interests
of its stakeholders are considered in all its corporate
decision making. 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 which course of action would most
likely contribute to the success of the Company.
The Board is also focused on its responsibility to
have regard for all stakeholders when setting strategy
and developing policies.
The Stakeholder Model which summarises the
interaction between the s172(1) Duty and Helical’s
stakeholders is included in all Board and Committee
packs. When matters are presented to the Board for
approval, the Board considers the interests of its
stakeholders alongside the matters set out in section
172(1) Companies Act 2006 (see the Stakeholder
Engagement Table on pages 78 to 79 for more
details). 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.
The Stakeholder Model – 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
SUPPLIERS AND CONTRACTORS
OCCUPIERS (TENANTS/CUSTOMERS)
EMPLOYEES
LOCAL COMMUNITIES
73
Section 172(1) and the Board’s Principal
Decisions throughout the year
We define Principal Decisions as both those that are material
to the Company, but also those that are significant to our key
stakeholder groups. For detail on how we established and
defined our key stakeholder groups please see the Stakeholder
Engagement section on page 77 to 79. In making the following
Principal Decisions the Board considered the views and interests
of its key stakeholders, as well as the need to maintain a reputation
for high standards of business conduct and the need to act fairly
between the members of the Company, whilst also considering the
likely consequences of any decision in the long term.
Property development is an inherently long-term business and
the Board therefore takes a long-term approach to its decision
making. We are exceedingly proud of our heritage, having
developed and diversified from being a producer of steel bars
to building and managing some of the most sought-after, prime
office premises in London. Helical has been in business for
102 years, and we believe this success can be attributed to
our commitment to the Helical Purpose (see page 74), whilst
maintaining high standards of business conduct and the strong
culture articulated through our Values (see page 75).
PRINCIPAL DECISIONS
The Board had regard to all matters (a) to (f) of section 172(1)
Companies Act 2006 when reaching Principal Decisions
throughout the reporting period. Two examples of such
decisions in which the Board had regard to s172(1)(a)-(f) are
noted below:
Disposals – Sale of The Powerhouse Portfolio, Manchester
The Board plays a critical role in ensuring that a rigorous
and robust process is followed in respect of asset disposals
to ensure that all elements of the proposals, including
stakeholder considerations, are carefully reviewed and
challenged. Details of this disposal and its connection to the
Company’s long-term strategy are included in the case study
on pages 24 to 25.
Prior to making a decision, the Board was presented with
all the relevant information with respect to the proposed
disposal and asked to consider whether the proposal was
in line with its strategy, in this case, of growth through
recycling equity and realising capital profits. Considerations
included:
• the performance of the building against the business plan
and capital/income metrics;
• the capital expenditure committed to the assets;
• the opportunities in the market to deploy the recycled
capital and utilise our skills;
• how to achieve maximum projected returns for all of
our Shareholders;
• the regulatory, political and competitor landscape;
• the best interests of our stakeholders; and
• a review of the Company’s existing operations and market
presence in the relevant city, impact on local communities,
employee matters, suppliers and potential risks associated
with the disposal of the assets.
Sustainability
Sustainability underpins all of our strategic priorities, and is
considered throughout the implementation of our business
strategy. Operating in a sustainable manner has always been
a priority of the Helical leadership and this is clearly
communicated in the Company’s Purpose (see page 74).
Much of the Board’s decision making is focused on ensuring
that the Company is sustainable in the long term, and this
forms the basis of the Viability Statement (see page 54). The
Board also attends an annual strategy meeting to consider
the long-term strategy of the business, incorporating
presentations and discussions on opportunities and threats
to the business.
Sustainability is at the core of all activities at Helical and
as well as linking back to the Company’s Purpose, being
sustainable is one of the Company’s Values. We recognise
the impact our building developments have on the
environment and are focused on reducing our carbon
footprint throughout a development’s life cycle. In June
2020, the Company published its Sustainability Strategy
“Built for the Future” and accompanying performance review
document which served to clearly demonstrate the Group’s
approach to sustainability and the associated risks of failing
to operate in a sustainable manner. Furthermore, last year
the Board also included Sustainability as a core tenet of our
strategy and a separate risk for the business.
Over the past year, Helical has seen a considerable
improvement in its sustainability achievements as it has
continued to focus on ESG matters. Sustainability is a
standing item on the agenda of each quarterly Board
meeting and updates from the Sustainability Committee
are delivered to the Board in between Board meetings as
necessary. In May 2021, the Board approved the appointment
of Sue Farr as the Non-Executive Director responsible for
ESG & Sustainability matters.
During the year, the Board reviewed and approved the
Company’s vision for a truly sustainable business,
documented in the Sustainability Strategy and enhanced
sustainability reporting documents. In approving these
documents, the Board considered the long-term success
of the business and the interests of the Group’s stakeholders.
Within the Sustainability Strategy, the key priorities are
identified as our Environment, our Communities and our
People, and the strategy focuses on those measures that have
the highest impact on the long-term vision of our business.
In furtherance of its commitment to sustainability, the Board
will be focusing on a number of key projects over the next
two years, including:
• the Company meeting its net zero carbon ambition for
future developments using the principles set out in the
recently released “Designing for Net Zero” guide;
• the launch of 33 Charterhouse Street, the first UK office to
achieve BREEAM 2018 “Outstanding” at the design stage;
and
• alignment of reporting practices with the Task Force on
Climate-related Financial Disclosures (“TCFD”) to ensure
greater transparency in reporting.
In approving all sustainability strategies, policies and
documentation, the Company engages with, and considers,
the views of all its stakeholders.
GOVERNMENT AND OTHER REGULATORY BODIES
A B C D E F
A B C D E F
s172 matters considered in this Principal Decision:
s172 matters considered in this Principal Decision:
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OUR STAKEHOLDERS – SECTION 172(1) STATEMENT
CONTINUED
75
Purpose, Values
and Culture
PURPOSE
The Board recognises the importance of
articulating its strategy and business model
to its stakeholders in a clear and concise
manner and the Company’s Purpose sets out
to our stakeholders:
• why we exist;
• the market segment in which we operate;
• what we are seeking to achieve; and
• how we will achieve it.
The Purpose also clearly demonstrates how
we create value for Shareholders and the
other Helical stakeholders, and ties in with
our sustainable business model (for more
information on Sustainability at Helical see
pages 60 to 71).
BOARD OVERSIGHT OF PURPOSE
This Purpose is overseen by the Board and acts
as the driver behind the decisions and actions
taken at Board level. The Board exercises
oversight of the Purpose through the receipt of
frequent updates from Executive Management
on key business areas.
PURPOSE
WHY
STRATEGY
WHAT
VALUES
& CULTURE
HOW
The Helical Purpose:
We create buildings for today’s occupiers
who demand more inspiring and flexible
space, market leading amenities, high quality
management and with sustainability and
wellness at their core.
Applying this philosophy we seek to
maximise Shareholder returns through
delivering income growth from creative
asset management and capital gains
from our development activity.
Key business area
Frequency
Method of oversight
Sustainability
Quarterly &
adhoc as required
Sustainability Report presented at every
Board meeting
Our properties
Quarterly &
adhoc as required
Financing activities Quarterly
Leasing activities
Quarterly
Tenant satisfaction
Bi-annually
Any material updates between Board
meetings are shared with the Board via
email/messaging
Detailed reports on each property in the
portfolio are prepared by the property
asset managers and are presented at
each Board meeting
Asset managers present to the Board on
the progress of any new developments
The Finance Director’s Report is
presented to the Board at each
Board meeting
Reports on the Company’s letting
activities are presented to the Board
at each Board meeting
Results of tenant satisfaction surveys and
other feedback initiatives are presented
to the Board
COLLABORATION – SETTING &
MONITORING THE HELICAL VALUES
Our Values represent Helical’s shared understanding
of how things are done and the way all employees
within the organisation are encouraged to conduct
themselves.
The collaborative environment fostered by the
Board was demonstrated through the process used
to set the Company Values. To decide which Values
best supported the strategic aims of the business,
the Board asked a selection of people across the
Company to choose those values which they felt
best reflected Helical. The results of this
consultation were reviewed by the Board and
contributed to the setting of the final six Values.
These Values, therefore, represent the Company’s
inclusive and collaborative Culture as articulated
by its workforce.
Since the Values are at the heart of every decision
and action taken at all levels of the business, we feel
that it is important to monitor them to ensure that
they remain appropriate to the business. As the
workforce played a key role in determining the
Values, it seemed appropriate to ask them to review
the Values and comment on their continued
suitability. In March 2021, through the staff
engagement interviews (for more information see
page 81), each member of the workforce was asked
to specifically comment on whether they felt the
Helical Values still accurately represented the ethos
of the business. The results from the interviews
confirmed that 92% of staff agreed that all six of
the Values accurately represented the Company’s
Culture and it was on this basis that the Board
concluded that the current articulation of the
Company’s Values remained appropriate.
Our Purpose is inextricably linked to our Values which
underpin the behaviours which Helical considers vital to
achieving its strategic aims. It is through our Values that
we communicate the key aspects of the Company’s Culture
to our stakeholders, providing insight into our principles
and the ethics that support our Purpose.
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.
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.
Sustainable
Working for the long-term benefit of our stakeholders,
local communities and the environment drives the decisions
we make.
Dynamic
Energy, adaptability and agility are core to our approach.
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OUR STAKEHOLDERS – SECTION 172(1) STATEMENT
CONTINUED
Our Culture
The combination of Helical’s objectives for growth,
development and long-term survival and resultant
strategies to achieve these objectives have a
direct link with the Culture of the Company. The
embedded Culture is supported by our employees
(as evidenced in the setting and monitoring of the
Values – see page 75), and this results in Helical
having a motivated and high performing team which
supports the success of the strategy and delivers
the outcomes necessary for long-term success.
An important aspect of the Group’s Culture is
its approach to risk. 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
aligns with the strategy and objectives of the
business and is embedded within the risk appetite
(see Risk Management section on page 52).
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 approach of encouraging
all members of staff to proactively share ideas,
opportunities and concerns.
By ensuring that Helical is an inclusive and diverse
business, the Group benefits from a variety of
experiences and perspectives. Such variety is
important for the maintenance of a strong succession
pipeline, necessary for future sustainability, and also
helps to stimulate creativity and contributes to the
open and cohesive Culture within the Company.
HOW WE MONITOR & SUSTAIN OUR CULTURE
• At a minimum, conduct annual review of
workforce policies and procedures – see Board
Leadership & Company Purpose section of the
Governance Review at pages 88 to 90
• Employee engagement initiatives – see pages
80 to 81
— Results of staff interviews
— Workforce engagement sessions (including
Q&A) reported to the Executive Management
team and Board, and considered in decision
making
— Board’s interaction with senior management
and wider workforce
• Tenant surveys and feedback analysis
• Staff tenure and retention rates (see KPI section
on page 35)
• Whistleblowing mechanisms in place, with relevant
data reported to the Board – see page 89 for
further details
• Support provided to the workforce through the
provision of a number of health and wellbeing
initiatives (please see Sustainability Report on
pages 70 to 71).
• Investing in training and organisational development
for staff
• Health and safety data, including near misses,
reported to the Management meetings every two
weeks, the Executive Committee monthly and the
Board quarterly
• Designated Non-Executive Director for ESG and
Sustainability plays a key role in monitoring the
Culture and ensuring its alignment with Company
strategy and supports the long-term sustainable
success of the business
• Collaboration with Occupiers throughout the
pandemic
• Prompt payment to Suppliers
• Promotion of diverse and inclusive environment
– see Nominations Committee Report on pages
95 and 96
• Consideration of Culture in recruitment and
selection, both with regard to individuals and the
recruiters used – see report of the Nominations
Committee at pages 94 to 98
• Aligning formal rewards with Culture
• Incentive schemes developed to drive behaviours
consistent with Purpose, Values and strategy –
see report of the Remuneration Committee on
page 112
77
STAKEHOLDER ENGAGEMENT
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,
and the effect of this on recent Principal Decisions taken
by 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 Shareholders. However,
the Helical Board also 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.
Our stakeholders, engagement mechanisms, consideration
of stakeholder interests and the impacts on Board
decision making
The Company’s stakeholders are defined in the Stakeholder
Model (see page 72) and in the Stakeholder Engagement
Table overleaf. The Company’s stakeholders are kept under
continuous review by the Board, with the Stakeholder Model
being featured on every approval item and being considered
as part of every Board decision taken.
The Board places utmost importance on the maintenance
of positive relationships with all the Company’s stakeholders.
It is through effective engagement that the Board has sought
to understand their views.
The Stakeholder Engagement Table on pages 78 to 79
describes how the Directors have had regard to the matters
set out in section 172(1) (a) to (f) and forms the Directors’
statement required by section 414CZA of The Companies
Act 2006.
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78
OUR STAKEHOLDERS – SECTION 172(1) STATEMENT
CONTINUED
STAKEHOLDER ENGAGEMENT
Stakeholder
category
Material issues and
considerations for stakeholders
Means of engagement by
Board and/or management
Shareholders
• Financial performance.
• Generation of long-term
sustainable returns.
• Environmental, Social and
Governance practice.
Partners
• Financial performance and
generation of sustainable
returns.
• Collaboration and
communication.
• Risk appetite and
management of the
partnership.
• Corporate responsibility.
Occupiers
(tenants/
customers)
• Quality of service provided.
• Delivery of quality space
to meet needs.
• Ability to meet needs
of changing markets.
• Value for money.
Direct Board level engagement
• Scheduled and unscheduled meetings between
Shareholders and members of the Board.
• Annual and Half Year results announcements
and presentations.
• Investor roadshow presentations.
• Annual General Meeting presentations
and Q&A.
• Property tours.
Company level/indirect Board engagement
• Publication of Helical news via RNS.
• Regular posts on social media platforms
with respect to Helical news.
• Regular updates from the Executive Directors
to the market, including press articles.
• Analyst/Investor reports.
• Feedback from corporate brokers.
• Helical’s website and dedicated Shareholder
email address overseen by the Company
Secretarial team.
Direct Board level engagement
• Executive Directors meet with key business
partners (joint venture partners) and report
back to the Board on a regular basis.
• Key business partners (joint venture partners)
are invited to attend the AGM and the Annual
and Half Year results presentations.
Company level/indirect Board engagement
• Regular communication and feedback
on business and ESG matters.
• Transparent reporting.
• Collaborative approach with clear
responsibilities.
• Helical’s website.
Direct Board level engagement
• CEO leads the tenant support initiative
implemented at the beginning of the UK’s first
national lockdown.
• Independent tenant satisfaction surveys carried
out and results are reported to the Board.
• Feedback received directly from Occupiers is
fed into Board discussions.
Company level/indirect Board engagement
• Tenant engagement apps rolled out to
Occupiers in a number of Helical buildings.
• Programme of meeting with tenants on a
regular basis, with specific engagement during
crisis situations e.g. Covid-19.
How stakeholder engagement
has influenced decision making
and execution of our strategy
Other than our routine engagement on topics
of strategy, governance and performance, we
engaged with Shareholders on the following
specific matters which then influenced the
outcomes and actions taken:
• The Remuneration Committee engaged with
the institutional Shareholders and
shareholder advisory bodies on the proposed
new Directors’ Remuneration Policy which is
to be put forward for approval at the 2021
AGM. Overall, the proposed Policy met with
the approval of those involved in the
consultation process. However, there were
a small number of points raised and the
Committee considered the feedback
obtained from the engagement process
and implemented changes to the Policy.
• The Board considered and responded to emails
from individual Shareholders in connection
with the 2020 Annual Results/AGM.
• The Board engaged with the employee
shareholders throughout the year and
considered their views. See Engagement with
the workforce section on pages 80 to 81 for
more details.
• Our relationships with our strategic Partners
are a critical element of the Group’s strategy.
Feedback from engagement with Partners is
continuously reported to the Board and duly
considered.
• Engagement with one of our key business
partners on their approach to mental health
and wellbeing in the workplace led to
the appointment of Mental Health First
Aiders and members of staff attended a
comprehensive training course (for more
information on this, please see the
Sustainability Report on pages 60 to 71).
Feedback from Occupiers during the Covid-19
pandemic has expedited the roll out of the
tenant engagement apps to support Occupiers
working remotely e.g. virtual events/
workshops, building information etc. (for more
information on this, please see the
Sustainability Report on pages 60 to 71).
As a result of our awareness of the concerns of
our Occupiers during the pandemic, the tenant
support initiative was implemented at the
outset of the UK’s national lockdown in March
2020 and continued throughout the reporting
period. The Board implemented this initiative
to ensure that the Company’s response to its
Occupiers in times of hardship caused by the
pandemic was aligned with the Purpose, Values
and strategy of the business.
Employees
• Opportunities for training
and development.
• Fulfilling and rewarding
work in a safe and
comfortable environment.
Direct Board level engagement
• Designated Non-Executive Director responsible
for ongoing workforce engagement.
• Role of the designated Non-Executive Director
for workforce engagement published for all staff.
Covid-19 specific engagement outcomes:
• Regular updates on the Group’s working
practices and office opening hours from
CEO.
• Antibody tests available to all staff in
• Fair treatment, recognition
• Open and inclusive culture through Purpose
Summer 2020.
and remuneration.
and Values.
• Diverse and positive
• Executive Directors presented Strategy Update
culture.
meeting to staff at the end of 2020.
• Board annually reviews key workforce policies
and procedures.
Company level/indirect Board engagement
• Staff satisfaction survey/interviews.
• Regular staff appraisals.
• Majority of staff attend Management meetings,
on a rotational basis.
• Helical’s website.
• Maintenance of the Staff Handbook.
• Lateral flow testing introduced in the office.
For information on the outcomes of the staff
sessions with the designated Non-Executive
Director for workforce engagement and the
staff interviews please see pages 80 to 81.
Material issues and
considerations for stakeholders
Means of engagement by
Board and/or management
How stakeholder engagement
has influenced decision making
and execution of our strategy
79
Stakeholder
category
Local
Communities
• Ethical and responsible
corporate behaviour.
• Environmental impact of
developments.
• Creating social value in
local areas, including
development of public
realm, facilities open to
members of the public and
engaging with local
communities.
Suppliers and
Contractors
• Agreement of and
compliance with
appropriate payment
terms.
• Payments made as soon as
practicable and in line with
the Prompt Payment Code.
• Collectively prevent and
mitigate risk of modern
slavery, bribery, and
corruption in our supply
chain.
• Ethical and fair dealings.
Direct Board level engagement
• CEO engages on community and environmental
initiatives on behalf of the Group.
We responded on key topics during the
reporting period through a wide range of
initiatives including:
• Publication of our Sustainability Strategy
“Built for the Future”.
• Becoming a signatory to the Terra Carta
initiative backed by HRH The Prince of Wales.
• Maintaining ongoing dialogue with a wide
range of NGOs.
• Collaborating with tenants to provide work
experience for students from schools in
local communities.
• Further engagement on ESG with investors
and broader stakeholders.
• Sustainability Key Performance Indicators
considered as part of Group strategy.
• Becoming a founding partner of LandAid
Covid Appeal and donating to Feed the
Front Line.
• Joining The Loom’s partnership with the
Whitechapel Mission.
For further details on our engagement
with Local Communities, please see the
Sustainability Report on pages 68 to 69.
During the Covid-19 pandemic, we have
implemented contractor welfare initiatives
for those working on Helical construction
sites. Following the results of a survey
completed by the contractors working at
our 33 Charterhouse Street site, we have
implemented on-site lateral flow testing.
This initiative was undertaken to ensure that
the Company’s response to its suppliers and
contractors in times of hardship caused by
the pandemic was aligned with the Purpose,
Values and strategy of the business.
• Additional provision made for local charitable
giving during Covid-19 pandemic.
Company level/indirect Board engagement
• Local resident consultations and regular
newsletters.
• Community and charitable initiatives/events,
with additional focus on those local businesses
and charities negatively impacted by the
Covid-19 pandemic.
• Helical’s website.
• Sustainability news and publications.
• Engagement with non-governmental
organisations (NGOs) and other interest groups
to improve our understanding of current and
emerging environmental and societal topics.
• Participation in sustainability initiatives, global
and regional, through the Sustainability
Committee.
• Submissions to sustainability benchmarks and
indices.
• Engagement with students from the University
of Westminster who are using the development
of 33 Charterhouse Street as a case study.
Direct Board level engagement
• Audit and Risk Committee leads the assessment
of external audit performance and service
provision, inviting our external Auditor to
Committee meetings.
• Property valuers invited to Audit and Risk
Committee meetings.
• The Board receives a detailed report from the
Group’s IT service provider on an annual basis.
Company level/indirect Board engagement
• Open communication about expected
behaviour within our supply chains – our
Supplier Code of Conduct and Modern Slavery
Statement is shared with all Suppliers and
Contractors.
• Regular communication and feedback, with
increased dialogue with certain key Suppliers
during the Covid-19 pandemic, including
Contractor Surveys.
• Paying Suppliers and Contractors fair fees.
• Bi-monthly meeting with IT service provider.
• Helical’s website.
Government and
Other Regulatory
Bodies
• Corporate responsibility
and accountability.
Direct Board level engagement
• CEO regularly engages with governmental,
• Compliance with applicable
laws and regulations.
• Compliance with applicable
taxation regimes.
• Monitoring updates to legal
and regulatory
environment, including the
impacts of Brexit and
Covid-19.
regulatory and industry bodies.
Company level/indirect Board engagement
• Transparent statutory reporting.
• Open approach to communication.
• Board oversight of key relationships and areas
impacted.
• Strong dialogue with regulatory agencies.
• Reports on the results of active participation
through industry groups presented to Board.
• Helical’s website.
The Board continued to focus on how to
promote the success of the Company during
political and regulatory developments in the
external environment. Updates on risks and
opportunities posed by the external political
and regulatory environment are presented
to the Board by external advisors.
Consideration is given to regulatory and
environmental impact in every Board decision.
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OUR STAKEHOLDERS – SECTION 172(1) STATEMENT
CONTINUED
SUE CLAYTON
“ I offered to become the
designated Non-Executive
Director for workforce
engagement as I am keen to
ensure that the Board members
are aware of the views of as many
Helical employees as possible.”
SUE CLAYTON – DESIGNATED NON-EXECUTIVE
DIRECTOR FOR WORKFORCE ENGAGEMENT
Sue Clayton was appointed as the designated
Non- Executive Director for workforce engagement
in 2019, and has been successfully building on the
engagement between the Board and the workforce
during the reporting period. Whilst operating through
the Covid-19 pandemic, it has not been possible for
our full workforce to meet with Sue in person, but she
has hosted a series of staff engagement sessions via
video conferencing. Conscious that having too many
people on a videocall could limit the ability for all staff
to engage in discussions, the workforce was split into
smaller groups to enable good dialogue between all
participants. A number of topics were discussed at
these sessions and any questions or concerns raised
by staff were communicated to the Board for
consideration (see Consideration of Workforce
Interests section on page 81). Attendee feedback
indicated that these sessions were positively received
by all those involved, with the relaxed forum providing
staff with a mechanism to share their thoughts and
concerns. In addition to these sessions, Sue has been
contactable via email throughout the year.
The feedback obtained from Sue enables the Board
to monitor the Culture of the Company and act
appropriately to respond to the thoughts and
concerns of the workforce.
Rationale for choosing a designated Non-Executive
Director for our workforce engagement mechanism
Helical has a relatively small workforce of 28
employees. As such, it is possible for our Directors
to engage directly with members of the workforce,
with ease, on a regular basis. The appointment of
a Director from the workforce (as a representative)
and the establishment of a formal workforce advisory
panel (as mechanisms for engagement) were
both deemed to be a disproportionate approach
for Helical and its engagement requirements.
Why the Board appointed Sue
Sue volunteered for the role of designated Non-
Executive Director for workforce engagement and
the Board unanimously agreed that she was well
suited to the role given her skill set, particularly
her background in people management.
“I offered to become the designated Non-Executive
Director for workforce engagement as I am keen
to ensure that the Board members are aware of
the views of as many Helical employees as
possible. We meet a number of the team at our
regular Board meetings over the year but these
additional Employee Engagement sessions gave
me opportunities to meet more people.
In my executive career I have been involved in a
number of roles including sitting on a Diversity and
Inclusion Steering Committee and I have experience
in recruitment, mentoring and managing teams of
people. I am therefore interested in the people side
of our business and am pleased that Helical is able
to attract and retain such talented staff.”
What does our designated Non-Executive
Director for workforce engagement do?
The Board has structured the role to aid its
understanding of the views of the Helical
employees and consider their interests in Board
discussions and decision making. The role and
its accompanying responsibilities have been
documented in a terms of reference which is
available to view on our website: https://www.
helical.co.uk/investors/corporate-governance/
The Strategic Report, on pages 1 to 81,
was approved by the Board on 25 May 2021.
On behalf of the Board
GERALD KAYE
Chief Executive
Engagement with workforce
The importance of engaging with the workforce can be linked
back to the Group’s key operational and reputational risks (see
Risk Register on page 59), specifically the management of
workforce relationships and retention of talent. 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. The Board defines the workforce of Helical
as its full-time and part-time employees and staff members
temporarily hired for work through an employment agency.
This principle of mutual respect and inclusion is integral to the
Culture of the Company (see pages 76 to 77). 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, our employees are 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 which are reviewed annually.
TOPICS DISCUSSED AT THE WORKFORCE
ENGAGEMENT SESSIONS
• Working from home – how
had it been for everyone?
• Head Office amenities
• Helical strategy
• Corporate communications
• ESG
• Learning & Development
• Team spirit
• Flexible working
• Relationships with
occupiers, suppliers
and contractors
• Future of offices
• Opportunities to meet
all the Non-Executive
Directors
81
STAFF ENGAGEMENT INTERVIEWS
As noted above, our staff are key to our success and in order to
retain our talent, it is essential to ensure that our staff satisfaction
levels are high and the culture of the workplace is in keeping with
our Values (see our Values on page 75). Therefore, in addition
to the workforce engagement initiative run by Sue Clayton,
one-on-one staff engagement interviews were conducted during
the reporting period by our Operations Manager, Lois Robertson.
Given the size of our workforce, it was feasible to conduct
individual staff interviews as a means of meaningful engagement.
This approach was also selected as it was considered more
personal to the employee than a survey, giving each member
of staff time to discuss issues of importance to them, rather than
simply answering “yes” or “no” to a series of questions. The staff
were provided with a number of suggested questions/discussion
points in advance of their individual meetings. The results of each
interview were kept completely confidential.
The feedback garnered from the staff survey was communicated
to the Executive Committee in the first instance, and reported
to the Board where appropriate.
CONSIDERATION OF WORKFORCE INTERESTS
The key results and actions from both the Staff Engagement
sessions with our designated Non-Executive Director for
workforce engagement and our Staff Engagement interviews
are noted below:
What our employees have said What we are doing about it
We want to hear about
the future strategy
of the Company on
a more regular basis.
We would like more
opportunities to meet all
the Non-Executive
Directors on the Board.
Can we utilise our office
space in a way that is more
conducive to our health and
wellbeing e.g. space for
exercise classes at lunch?
Learning and development
opportunities have slowed
during the pandemic.
Team interaction has
decreased during the
pandemic.
CEO has invited all staff to attend a
presentation on strategy in June 2021.
An informal session for all staff and the
NEDs is being scheduled for a date when
national Covid-19 restrictions allow.
Individual staff members will continue
to be invited to lunch with the Board post
each quarterly Board meeting.
Staff have been allocated a “well-being”
space within the office to enable them to
do exercise classes and other activities.
The Executive Committee is
committed to reinvigorating the learning
and development programme and
has undertaken an exercise to
identify development opportunities
for individuals.
A need for training in mental health and
wellbeing was identified, particularly
since the outbreak of the pandemic. The
Executive Committee commissioned the
roll out of mental health first aid training
and four members of staff were appointed
as Mental Health First Aiders at the
beginning of 2021. For more information
on this initiative, please see the
Sustainability Report on pages 70 to 71.
The Executive Committee organised a
variety of virtual all-staff events during
the pandemic. However, in recognition
of the fact that such events are no
substitute for face-to-face interactions,
the following events have been proposed
for 2021, Covid-19 restrictions permitting:
• Summer social event to take place after
the AGM;
• Land Aid 10K run; and
• Property tour in September.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021STRATEGIC REPORT 82
CHAIRMAN’S REVIEW
83
Strong
performance,
governance and
leadership
RICHARD GRANT
CHAIRMAN
DEAR SHAREHOLDER,
On behalf of the Board, I am pleased to present the Corporate
Governance Report for the year ended 31 March 2021. The
Report sets out Helical’s governance processes and explains
how they enable the long-term success of the business. We
have designed this year’s Report to ensure that all stakeholders
are able to gain a deeper understanding of how we approach
governance, structuring it around the sections of the 2018
UK Corporate Governance Code (the “Code”) and, where
appropriate, cross-referring to sections of the Strategic Report
to provide complete and navigable governance reporting.
COVID-19
COVID-19 has impacted every market sector, and the last fifteen
months has been a challenging period for many companies,
including Helical. This Report covers a period of unprecedented
and significant uncertainty as the Company navigated its way
through the impact of the pandemic and adapted its working
practices whilst also ensuring that good governance was
upheld. Despite the challenges, the Group has had a successful
year, maintaining strong rent collection, letting Kaleidoscope at
a premium to last year’s ERV and making good progress on the
development of 33 Charterhouse Street, including securing debt
to fully finance its development. Working through the pandemic
has meant that we had to operate the majority of our Board
meetings entirely online and ran a closed AGM. I believe the
Board responded well to these challenges, focusing its energy
on ensuring that the long-term success of the business was
protected, and I am pleased to be able to outline the activities
of the Board and its Committees over this period.
UK CORPORATE GOVERNANCE CODE 2018
At Helical, good corporate governance underpins all Board
discussion and decision making. We have continued to apply
the Principles of the Code throughout the year and, as at the
date of this Report, the Company has complied with all the
Code’s Provisions. The Financial Reporting Council’s (“FRC”)
2018 Guidance on Board Effectiveness has also informed the
practices of the Board over the course of the year.
I encourage you to read our Corporate Governance Report for
a more detailed account of how Helical has complied with the
Code and its accompanying guidance. We have also considered
the guidance in the FRC’s November 2020 Review of Corporate
Governance Reporting, using this guidance to further enhance
our reporting throughout the Annual Report.
STAKEHOLDER ENGAGEMENT
Our stakeholders are very important to us and we remain
committed to maintaining a regular and open dialogue with
them and taking their interests into consideration in every
decision we make as a collective Board. Throughout the
reporting period, as a result of Covid-19 restrictions, the Group
has been required to consider alternative methods to ensure
effective levels of engagement with all our stakeholders. Please
see our Section 172(1) Statement on pages 72 to 81 of the
Strategic Report for further details.
BOARD DECISIONS
The Board are 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.
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 financial
strategy;
• approval of the Group’s Sustainability Strategy “Built for
the Future”;
• approval of the Group’s updated Risk Management
Framework, and risk appetite with respect to principal and
emerging risks;
• consideration and approval of material property transactions
and opportunities;
• review of the effectiveness of the Board and its Committees,
conducted as part of an internal Board evaluation process;
• approval of the Board Diversity and Inclusion Policy and the
setting of key Board diversity and inclusion objectives; and
• consideration of Board and senior management succession
plans.
“ I believe the Board responded well
to the challenges of the pandemic,
focusing its energy on ensuring
that the long-term success of
the business was protected.”
ANNUAL STRATEGY REVIEW
In September 2020, the Board carried out its annual strategic
review of the business, which included consideration of the
economic, geopolitical, societal and environmental risks. 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 continued focus on the development of, and investment
in, offices in London would maximise the potential future
performance of the Group. It also confirmed that the talent,
knowledge and experience of the current executive team would
enable the Company to continue to prosper, in alignment with
our Shareholders’ interests. Further details of the Board’s annual
strategy review can be found on page 90 of the Corporate
Governance Report.
BOARD EVALUATION
In the year to 31 March 2021, the annual Board evaluation was
undertaken internally and overseen by me. This year’s internal
evaluation confirmed that Helical’s Board, Committees and
individual Directors continue to operate effectively, despite
these challenging times and the impact of remote meetings
on the Board dynamic. The results of the evaluation highlighted
a few items for further discussion, but overall demonstrated
that the Board had embraced the opportunity to improve its
effectiveness by focusing on the suggestions of the previous
year’s review. Further information on this year’s effectiveness
review can be found on page 98.
BOARD COMMITTEES
The work of the Nominations, Audit and Risk and Remuneration
Committees is discussed in detail in their individual reports
on pages 94 to 125. A report on the work of the Group
Sustainability Committee can be found on pages 60 to 71 of
the Strategic Report.
Towards the end of the year, the Remuneration Committee
engaged with the Group’s Shareholders to develop a new
Remuneration Policy to replace the 2018 Policy, which expires at
the 2021 AGM. The new Policy will be presented to Shareholders
for approval at the 2021 AGM.
AGM AND ARTICLES OF ASSOCIATION
Although our 2020 AGM had to operate in a “closed”
environment, we will be inviting our Shareholders to join us in
person for our 2021 AGM. In light of the Covid-19 restrictions
and their impacts on the last AGM season, we will be proposing
the adoption of new Articles of Association that will allow us
to hold hybrid AGMs in the future. If approved, this particular
change to our Articles of Association will further improve our
Shareholder engagement mechanisms. For details of our 2021
AGM, please see the Notice of Annual General Meeting Report
of the Directors on page 128.
INVESTOR RELATIONS
We have an extensive programme of meetings and
presentations with Shareholders throughout the year with
the majority of these taking place in the periods following
our annual and half year results.
In the year to 31 March 2021, our usual face to face meetings
with Shareholders were largely replaced by video-linked
conversations to discuss our results. These meetings were
attended by the Chief Executive, Gerald Kaye and the Finance
Director, Tim Murphy. In March 2021, Sue Farr, the Chair of the
Remuneration Committee, wrote to Shareholders representing
over 67% of issued share capital in a consultation exercise
regarding the Company’s proposed new Remuneration Policy,
as discussed on pages 103 to 125. The feedback received
indicated a strong level of support for the proposals from the
Shareholders.
I, along with the Company’s other Non-Executive Directors, will
be available to meet Shareholders at the 2021 AGM and, indeed,
at any time 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.
MY TENURE ON THE BOARD
The Code recommends that the tenure of a Non-Executive
Director of a listed company should not exceed nine years.
At the 2021 AGM, I will have reached the recommended tenure
limit, but I will be asking for Shareholder approval to continue
in the role for one further year. Following an extensive review,
the Board of Directors concluded that the extension of my
chairmanship would be in the best interests of the Company
and its stakeholders, with the continuation of my appointment
ensuring stability and continuity as the business navigates its
way out of the Covid-19 pandemic. For more information on this
matter, please see page 88 of the Corporate Governance Report.
SUMMARY
Finally, I would like to take this opportunity to thank the Helical
workforce for their continued drive, skill and enthusiasm
throughout this particularly challenging year. The pandemic
confirmed to me just how accurately Helical’s Values represent
the Culture of the Company, and this is so important considering
the Board’s effectiveness is dependent on the hard work and
dedication of the entire Helical team. I should also like to thank
my fellow Directors, particularly Gerald Kaye, for exhibiting
exceptional leadership whilst navigating through unchartered
territory.
Over the course of the year, our stakeholders have continued
to contribute to our success and stakeholder engagement
shall remain high on the Board’s agenda going forward.
As we emerge from the pandemic, 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 J. GRANT
Chairman
25 May 2021
CORPORATE GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021 84
BOARD OF DIRECTORS
Our Board
1. RICHARD GRANT
2. GERALD KAYE
3. TIM MURPHY
4. MATTHEW BONNING-SNOOK
5. SUE CLAYTON
6. RICHARD COTTON
7. JOE LISTER
8. SUE FARR
9. JAMES MOSS – COMPANY SECRETARY
85
A AUDIT AND RISK COMMITTEE MEMBER
N NOMINATIONS COMMITTEE MEMBER
R REMUNERATION COMMITTEE MEMBER
V PROPERTY VALUATIONS
COMMITTEE MEMBER
S S USTAINABILITY COMMITTEE MEMBER
E EXECUTIVE COMMITTEE MEMBER
COMMITTEE CHAIR
S SECRETARY TO THE BOARD
AND BOARD COMMITTEES
1. RICHARD GRANT
BOARD CHAIRMAN AND CHAIR OF
THE NOMINATIONS COMMITTEE
2. GERALD KAYE
CHIEF EXECUTIVE AND CHAIR
OF THE EXECUTIVE COMMITTEE
3. TIM MURPHY
FINANCE DIRECTOR
N R
E V
E
Board meetings present: 6/6
Board meetings present: 6/6
Board meetings present: 6/6
Tenure: 8 years
Independent: Yes (see page 88)
Tenure: 26 years
Independent: No
Tenure: 8 years
Independent: No
Skills, relevant experience and
contribution to long-term success
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. Before joining Helical
Tim worked at the financial and professional
services firm Grant Thornton.
Tim is a highly experienced financial practitioner
with significant sector knowledge, both
technical and commercial.
Tim is experienced in working with boards and
management teams in respect of financial and
commercial management, reporting, and risk
and control frameworks. These experiences
make Tim particularly well-placed to contribute
to the Group’s broader strategic agenda and
further the sustainable success of the business.
Skills, relevant experience and
contribution to long-term success
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 as a Non-Executive
Director in July 2012, became Deputy Chair of
Helical in 2018, and was appointed as Chairman
of the Board in July 2019.
Richard brings significant leadership qualities
to the Board, combined with considerable
financial experience and extensive knowledge
of the property sector. He is an effective
Chairman as demonstrated both through his
contribution to Board discussions and his ability
to proficiently chair Board and Committee
meetings. Richard’s effectiveness as Chairman
is further bolstered by his experience on public
company boards.
Through his wealth of skills and prior
experience, Richard is able to contribute to all
aspects of business discussions and his valuable
knowledge and insight is key to promoting the
sustainable success of the Company.
Other external appointments
• Stenprop Limited – Board Chairman and
Chair of the Nominations Committee.
• Wittington Investments (Properties) Limited
– Board Chairman.
Skills, relevant experience and
contribution to long-term success
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.
Gerald is 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.
Gerald’s experience at Helical ensures that
he has an in-depth knowledge of the Group’s
operations and markets, which helps him to
lead the business, be a key contributor to Board
discussions and aid the effective decision
making of the Board. He considers stakeholder
engagement to be a crucial aspect of his role
given its impact on the long-term success of
Helical, and he therefore spends considerable
time engaging with our major shareholders,
visiting the Group’s properties and
development sites and maintaining extensive
relationships in the property industry.
Other external appointments
• Member of the Investment Committee
at Guy’s & St Thomas’ Foundation.
CORPORATE GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021
86
BOARD OF DIRECTORS
CONTINUED
87
A AUDIT AND RISK COMMITTEE MEMBER
N NOMINATIONS COMMITTEE MEMBER
R REMUNERATION COMMITTEE MEMBER
V PROPERTY VALUATIONS
COMMITTEE MEMBER
S S USTAINABILITY COMMITTEE MEMBER
E EXECUTIVE COMMITTEE MEMBER
COMMITTEE CHAIR
S SECRETARY TO THE BOARD
AND BOARD COMMITTEES
4. MATTHEW BONNING-SNOOK
PROPERTY DIRECTOR AND CHAIR
OF THE SUSTAINABILITY COMMITTEE
5. SUE CLAYTON
NON-EXECUTIVE DIRECTOR, CHAIR OF THE
PROPERTY VALUATIONS COMMITTEE AND
DESIGNATED NON-EXECUTIVE DIRECTOR
FOR WORKFORCE ENGAGEMENT
6. RICHARD COTTON
SENIOR INDEPENDENT DIRECTOR
7. JOE LISTER
NON-EXECUTIVE DIRECTOR AND CHAIR
OF THE AUDIT AND RISK COMMITTEE
8. SUE FARR
NON-EXECUTIVE DIRECTOR, CHAIR OF
THE REMUNERATION COMMITTEE AND
DESIGNATED NON-EXECUTIVE
DIRECTOR FOR ESG & SUSTAINABILITY
9. JAMES MOSS
COMPANY SECRETARY AND
GROUP FINANCIAL CONTROLLER
S E V
V A N R
A N R
A N R
R A N
S E
Board meetings present: 6/6
Board meetings present: 6/6
Board meetings present: 6/6
Board meetings present: 6/6
Board meetings present: 6/6
Board meetings attended: 6/6
Tenure: 6 years
Skills, relevant 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.
Tenure: 13 years
Independent: No
Tenure: 5 years
Independent: Yes
Tenure: 5 years
Independent: Yes
Tenure: 2 years
Independent: Yes
Tenure: 1 year
Independent: Yes
Skills, relevant experience and
contribution to long-term success
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).
Matthew’s long tenure with the Group, detailed
knowledge of the London property market and
his extensive network of contacts within the
industry means that he has valuable knowledge
and insight to promote and contribute to the
Group’s strategy.
In 2019, the Board appointed Matthew as Chair
of the Sustainability Committee and he leads
our commitment to measuring and improving
Helical’s corporate ESG performance against
external industry benchmarks. Matthew’s
valuable contributions to the long-term
sustainable success of the business are
therefore evident, both in his skill and
experience as a property development
executive but also in his leadership of the
Group’s sustainability initiatives.
Skills, relevant experience and
contribution to long-term success
Sue Clayton, FRICS, was appointed to the
Board as a Non-Executive Director in February
2016. She is Chair of the Property Valuations
Committee and a member of the Nominations
Committee, the Audit and Risk Committee and
the Remuneration Committee.
Skills, relevant experience and
contribution to long-term success
Richard Cotton was appointed to the Board as
a Non-Executive Director in March 2016 and as
Senior Independent Director in February 2018.
Richard is a member of the Remuneration
Committee, Audit and Risk Committee and
the Nominations Committee.
In 2019, the Board appointed Sue as the
designated Non-Executive Director for
workforce engagement and she has engaged
directly with members of the workforce on a
regular basis throughout the year. Our
workforce are key to our strategy and long-term
sustainable success and Sue’s role thus
contributes to the strategic aims of the
Company (see also report on Helical’s workforce
engagement initiatives at page 80 to 81).
Richard has a wide range of experience in both
executive and non-executive roles at a number
of quoted and unquoted companies. 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.
His experience in the financial sector, together
with his knowledge and skills in property,
strengthens the overall expertise of the Board.
He is a key contributor to the firm’s strategic
discussions, and his knowledge of the financial
services industry is frequently drawn upon
in Board discussions and assists the Board
in decision making.
His appointment as the Group’s Senior
Independent Director is underpinned by his
extensive board experience and understanding
of stakeholder interests.
Other external appointments
• Non-Executive Director of Big Yellow
Group plc.
• A member of the Commercial Development
Advisory Group at Transport for London.
Sue has over 30 years of experience in UK
investment markets. She is a former Managing
Director of CBRE’s Capital Markets Team and
has sat on the CBRE UK Management and
Executive Boards. She also held the position
of Employee Director on the CBRE Group Inc.
Board. Sue started her career as a graduate
with Richard Ellis (now CBRE) and worked
in Valuation and Fund Management before
moving into Investment Agency.
Sue is a Fellow of the Royal Institution of
Chartered Surveyors and her extensive
commercial experience in the property industry
and knowledge of the UK property market
renders her a highly valuable contributor to
the Group’s strategy. It is also through her skills
and experience in the field of property valuation
that she provides a significant contribution to
the effectiveness of the Group’s governance
structure, especially with respect to the work
of the Property Valuations Committee.
Other external appointments
• Board Member of the Committee of
Management of Hermes Property Unit Trust.
• Non-Executive Director of SEGRO plc.
Skills, relevant experience and
contribution to long-term success
Joe Lister was appointed to the Board in
September 2018 and as Chair of the Audit and
Risk Committee in July 2019. He is the 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.
Joe is a key contributor in all aspects of the
Group’s strategy, and he brings a wealth of
experience and insight into the effect that
strategic changes might have on the property
sector and consequently, the long-term success
of the business. He has a strong financial
background, having qualified as a chartered
accountant, and is highly knowledgeable and
experienced in risk management in the
property sector. His background therefore
enables him to effectively perform the role of
Chair of the Audit and Risk Committee at
Helical. Furthermore, he is an experienced listed
company director and contributes helpful
insights to shareholder relations offering
differing perspectives gained through his
experience as a member of the executive
management team at Unite Group plc.
Other external appointments
• Executive Director, Unite Group plc.
Skills, relevant experience and
contribution to long-term success
Sue contributes considerable knowledge,
skill and experience to the Board and its
Committees, particularly in the areas of
marketing, branding and consumer issues,
which are key areas of focus for the Board
and important for the continued success
of our business.
Sue is the Chair of the Remuneration
Committee and has served on the boards of a
diverse range of companies and has experience
on other remuneration committees, both as a
member and chair. Her effectiveness as Chair
is bolstered by her understanding of employee
and wider business perspectives and her ability
to consider the consequences of remuneration
decisions. She is also a member of the Audit
and Risk and Nominations Committees.
In May 2021, the Board appointed Sue as the
designated Non-Executive Director for ESG &
Sustainability and she plays a key role in
monitoring Helical’s Culture and ensuring its
alignment with Company strategy to support
the long-term sustainable success of the
business.
Sue is a former Chair of both the Marketing
Society and the Marketing Group of Great
Britain. In 2003, Sue joined the Chime Group,
where she was Chair of the Advertising and
Marketing Services Division and Strategic and
Business Development Director until 2015, and
served as a Special Advisor to their Board until
July 2020. Prior to joining the Chime Group,
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.
Other external appointments
• Non-Executive Director,
British American Tobacco plc.
• Non-Executive Director,
Accsys Technologies PLC.
• Non-Executive Director,
Unlimited Marketing Group Ltd.
CORPORATE GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021
88
CORPORATE GOVERNANCE REPORT
I BOARD LEADERSHIP
AND COMPANY PURPOSE
89
STATEMENT OF COMPLIANCE WITH THE
UK CORPORATE GOVERNANCE CODE 2018
For the year to 31 March 2021 the Group has applied the
Principles of the UK Corporate Governance Code 2018 (the
“Code”) and has complied with all relevant Provisions of the
Code throughout the accounting period. 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. However, at the 2021 Annual General Meeting (“AGM”)
our Chairman, Richard Grant, will have served on the Board of
the Company for nine years, so following the 2021 AGM, Helical
will be compliant with all the Provisions of the UK Code, except
for Provision 19.
Provision 19 of the Code suggests that a company chair
should not remain in post beyond nine years from their initial
appointment to the board. Having considered this requirement,
the Board agreed that it remained appropriate to renew
Richard’s appointment for a further term of one year. The
Nominations Committee has commenced the succession
process to replace him, and it is intended that a full handover
will be achieved before the 2022 AGM. Following his re-election
at the 2021 AGM, Richard will remain as Chair of the
Nominations Committee but will not chair the Committee
meetings dealing with the appointment of his successor.
It is also proposed that Richard will step down from his
membership on the Remuneration Committee immediately
after the 2021 AGM, in line with Provision 32 of the UK Corporate
Governance Code.
In Richard Grant, we are fortunate to have an exceptional
Non-Executive Director who has served on the Board for nearly
nine years, the latter two as Chairman. Richard encourages open
and candid discussion in the boardroom, including the
constructive challenge of the Executive Directors. The business
has been through considerable change over the time Richard
has been on the Board, streamlining the portfolio to focus on
offices in London. More recently, Richard has chaired the Board
effectively whilst faced with the challenges presented by the
Covid-19 pandemic. Against this backdrop Richard has
developed and maintained the strong, stakeholder-focused
culture that is core to Helical. Under his leadership, the Company
has delivered strong results and generated significant value
for Shareholders.
During the year under review, Richard worked closely with the
CEO to formulate the Company’s succession plans. Whilst these
plans are being implemented, the Board regard Richard’s
continued management and oversight of the plans he
developed to be in the Company’s best interests. In particular,
Richard will be leading the search for a new Non-Executive
Director and will also be conducting a detailed handover of the
Chairman’s role to his successor over the course of next year.
In coming to the decision to extend Richard Grant’s tenure
beyond nine years, the Board considered the risks of having
a non-independent chair on the Board’s effectiveness and its
dynamics. Richard Cotton, the Senior Independent Director,
led the 2021 internal evaluation of the Chairman’s performance
and more details of this process can be found on page 98.
The Board confirmed that Richard’s leadership has been key
to the effectiveness of the Board and feels, that his experience
brings a very helpful perspective to strategic discussions.
The Board unanimously agrees) that the extension of Richard’s
chairmanship is in the best interests of the Company and its
stakeholders, with the continuation of his appointment ensuring
stability and continuity with all the Group’s stakeholders whilst
the business navigates its way out of the Covid-19 pandemic.
In order to mitigate any risks to the effectiveness and dynamics
of the Board, the Chairman’s effectiveness will be continually
assessed until the handover process is completed. This will be
led by Richard Cotton, SID, who will engage regularly with each
of the Directors to confirm the continued effectiveness of the
Board under Richard Grant’s leadership.
For more information regarding Richard’s succession, please see
the report of the Nominations Committee on page 97.
Corporate Governance Report structure
We have restructured our Corporate Governance Report
to reflect the five pillars of the Code:
I
II
III
IV
V
BOARD LEADERSHIP
AND COMPANY PURPOSE
DIVISION OF
RESPONSIBILITIES
COMPOSITION, SUCCESSION
AND EVALUATION
AUDIT, RISK AND
INTERNAL CONTROL
REMUNERATION
Some of the information required by the Code is included
in the Strategic Report and is cross-referenced with the
Corporate Governance Report to avoid unnecessary
duplication.
Underpinning Helical’s Business Model is a commitment to
strong corporate governance, an essential component of
the Company’s objective of long-term value creation for
stakeholders whilst having a beneficial impact on society and
taking responsibility for its effect on the environment. Corporate
governance plays an important role in the strategic
management of our business and it is through the alignment
of stakeholder interests with management actions that the
direction and performance of Helical are determined. The Board
applies the overarching principles of good corporate governance:
Fairness, Accountability, Responsibility and Transparency
when formulating and delivering its strategy. These principles
underpin the Board’s activities, including but not limited to, the
oversight of financial reporting and auditing, remuneration of
senior executives, stakeholder relations and communications,
risk management and internal control, ethics, ESG and
sustainability. The application of these principles of good
corporate governance supports the Board in ensuring that it
effectively promotes the long-term success of the Company.
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. Helical’s
stakeholders are clearly defined and the Board actively engages
with each of these groups on a regular basis (for more
information on how this is demonstrated in practice, see the
s172(1) Companies Act 2006 and Stakeholder Engagement
section on pages 72 to 81). How the Board members discharged
their statutory s172(1) Duties when making Principal Decisions
is described on page 73.
The Board and its Committees review workforce policies and
procedures on an annual basis and more frequently, if required.
As part of the annual review process, the Board considers each
policy and procedure in the context of desired behaviours and
practices and ensures that they remain aligned to Helical’s
Culture and support long-term sustainability and success (see
also page the Strategic Report, pages 76 to 77). For example,
the Remuneration Committee takes the pay policies and
practices of the wider workforce into consideration when
determining the remuneration packages of the Executive
Directors. For more information on this, please see the
Remuneration Committee Report on pages 103 to 125. The
Purpose and Values of the Company are also taken into account
when setting the Group’s Remuneration Policy and structure.
Details of this can be found in the Report of the Remuneration
Committee at pages 103 to 125.
As part of its leadership responsibilities, the Board continually
monitors the Culture of the business and during the reporting
period, our designated Non-Executive Director for workforce
engagement, Sue Clayton, helped shape the Company’s Culture
through information sharing and engagement between the
Board and the workforce. During the reporting period, the
Board approved the publication of a terms of reference for the
role of the designated Non-Executive Director for workforce
engagement and this document serves to reinforce the
Company Culture of effective engagement with the workforce.
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 pages 76 to 81.
Another effective way in which Helical has monitored its Culture
throughout the period is through individual staff interviews.
Please see page 81 for more details on how the staff interviews
are used to monitor Culture and how the outcomes of the
interviews have been considered by the Board and the
Executive Management team.
Our values:
Integrity
Excellence
Collaboration
Creative
Sustainable
Dynamic
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/investors/
corporate-governance/). All Company policies and procedures
have been implemented with the objective of supporting the
long-term sustainable success of the business. For further
details on Helical’s Purpose, Values and Culture and how they
link to Company strategy, please see pages 74 and 75.
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 used by the Board to engage with
the workforce and other stakeholders are detailed in the
Stakeholder Engagement section at pages 72 to 81.
As well as being linked to the Culture of the Company, 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 60 to 71.
As confirmed in the Company’s most recent internal Board
evaluation (for more information on the 2020/21 internal Board
evaluation, please see the report of the Nominations Committee
on pages 94 to 98), 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 supporting the interests of the Group’s
stakeholders, whilst also contributing to the wider society.
The Directors’ range of backgrounds and expertise ensure that
the Company’s leadership is effective and balanced (see pages
84 to 87 for details).
CORPORATE GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021
90
I BOARD LEADERSHIP & COMPANY PURPOSE
CORPORATE GOVERNANCE REPORT
CONTINUED
II DIVISION OF
RESPONSIBILITIES
91
EFFECTIVENESS
Matters considered by the Board in 2020/21
Corporate responsibility
Governance and risk
• Receipt of reports from the Sustainability Committee to assess the
• Continued consideration of the strategic implications of the Covid-19
Company’s approach to sustainability and establish a future strategy
with objectives;
• Approval of the Group Diversity and Inclusion Policy; and
• Appointment of designated Non-Executive Director for
ESG & Sustainability.
Strategy
• Review of corporate objectives;
• Review of market trends, opportunities and risks;
• Annual off-site Board Strategy meeting focused on strategy;
• Receipt of regular strategy updates; and
• Approval and publication of the Group Sustainability Strategy, “Built
for the Future”, and consideration of future sustainability projects.
Property transactions and operations
• Approval of material property transactions and opportunities
e.g. The Powerhouse Portfolio, Manchester;
• Letting of Kaleidoscope to TikTok; and
• Review of independent valuations of properties.
Financial and operational performance
pandemic;
• Financial crime risks review and mitigation;
• Oversight of the Group’s Health & Safety Policy;
• Quarterly review of the Group’s Health and Safety performance;
• Review of risk strategy and risk appetite and reaffirming the Group’s
Risk Framework;
• Bi-annual review of principal and emerging risks facing the Group;
• Continued consideration of cyber security;
• Continued consideration of Brexit implications and mitigating
strategies;
• Internal control system review;
• Receipt of regular reports and updates on governance matters;
• Continuous review of UK Corporate Governance legislation and
guidance – 2018 UK Corporate Governance Code, FRC’s Guidance on
Board Effectiveness and The Companies (Miscellaneous Reporting)
Regulations 2018;
• Review of its governance processes e.g. meeting frequency;
• Participation in the internally facilitated Board evaluation;
• Annual review and approval of Board policies and procedures,
Schedule of Matters Reserved for the Board and Committee terms
of reference; and
• Approval of the Company’s full year and half year results;
• Review and approval of the annual Modern Slavery Statement.
• Review of the capital and debt structure;
• Assessment of viability and going concern, including sensitivity
People
analysis;
• Review of succession and talent management processes within the
• Receipt of regular reports from the Chief Executive and the Finance
Group;
Director;
• Approval of the Group budget;
• Review of the dividend policy and recommendation of the 2020 final
dividend and approval of the 2021 interim dividend;
• Receipt of presentations from senior management from across the
business and consideration of reports on matters of material
importance to the Company; and
• Approval of major capital and operating expenditure proposals;
• Review of financing proposals.
• Monitoring of performance and continued development of Health
and Safety risk mitigation;
• Receipt of feedback from the designated Non-Executive Director
regarding the employee engagement sessions and consideration
of issues raised;
• Approval of Group Remuneration Policy and structure;
• Review of staff engagement mechanisms including oversight and
review of Company whistleblowing procedures;
• Executive and Non-Executive development and succession planning;
• Evaluation of the Board’s effectiveness; and
• Engagement with the Company’s stakeholders and consideration
of their interests when making Board decisions (see Section 172(1)
Companies Act 2006 and Stakeholder Engagement sections on
pages 72 to 81).
ANNUAL STRATEGY SESSION
The Group’s core activities are performed within the governance and strategic framework set by the Board. However, Helical’s
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.
In September 2020, the Board met for its annual strategy session at which all the Directors were in attendance. The annual
meeting provides a forum, outside the quarterly Board meetings, for the Board members to come together to focus their
discussions on strategy, drawing upon the breadth of experience and 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.
At the outset of the meeting, a presentation on the outlook for the London Office Market was provided by CBRE. The Board’s
discussions focused on the economic climate and outlook, including the impact of Covid-19, the property market, Sustainability
and the interests of 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 Helical Board is suitably balanced, with more than half of
the Board, excluding the Chairman, being independent 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.
The Board is satisfied that all the Directors are able to allocate
sufficient time to the Company to discharge their responsibilities
effectively. Upon appointment, the Non-Executive Directors
are also required to inform the Chairman of their external
appointments prior to their acceptance of a role on the Board.
In addition, the Chairman’s time commitments are subject to
review by the Senior Independent Director, in conjunction with
the other Non-Executive Directors. The Board reviews the
Conflict of Interest register at each Board meeting. For details
of the Directors’ current external commitments, please see
“Our Board” section on pages 84 to 87.
There is a clear division of responsibilities between the running
of the Board and the Executive Directors’ responsibility for
running the business. An honest and open culture exists
between both the Executive and Non-Executive Directors,
enabling the Non-Executives to provide constructive challenge
and give 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.
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. Further details on
succession planning can be read in the Nominations Committee
Report on pages 94 to 98.
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
invite only the Non-Executive Directors to attend a meeting
to discuss Company matters.
Due to the Government restrictions that have been in place
throughout a majority of the reporting period, the Chairman
has not been able to attend Shareholder meetings in person,
but has made himself available for meetings at the request of
our Shareholders. Any feedback from the Chairman’s interactions
with Shareholders are reported directly to the Board. The
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
the Stakeholder Engagement section on pages 72 to 81.
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 2020/21 internal Board
evaluation (for further details, please see page 98).
Designated Non-Executive Director for workforce engagement
Sue Clayton was appointed to the role of designated Non-
Executive Director for workforce engagement in 2019 and her
role is key to facilitating meaningful engagement between the
Board and the wider workforce and ensuring that the interests
of the Helical employees are considered in Board discussions
and decision making. For more information on the this role at
Helical, please see pages 80 and 81 of the Strategic Report.
The detailed roles of the Chairman, CEO, SID and designated
Non-Executive Director for workforce engagement are available
on our website: https://www.helical.co.uk/investors/corporate-
governance/
Company Secretary
Our Company Secretary plays a leading role in the good
governance of the Company. Under the direction of the
Chairman, the Company Secretary’s responsibilities include:
• Maintaining a record of attendance at Board meetings and
Committee meetings;
• Responsible for ensuring good information flows to the Board
and its Committees, and between the Executive Committee
and the Non-Executive Directors;
• Advising the Board on all regulatory and corporate
governance matters; and
• Assisting the Chairman in ensuring that the Directors have
suitably tailored and detailed induction and ongoing training
and professional development programmes.
Information and professional development
The Chairman, with support from the Company Secretary, is
responsible for ensuring that the Directors receive clear and
accurate information in a timely manner. Throughout their
Board tenure, the Directors are encouraged to develop their
knowledge of the Group through property tours, meetings
with stakeholders and meetings with members of senior
management. The Board is also kept appraised of all relevant
updates with respect to relevant legislative and regulatory
requirements and all corporate governance matters. All
Directors have access to the services and advice of the
Company Secretary.
CORPORATE GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021 92
II DIVISION OF RESPONSIBILITIES
CORPORATE GOVERNANCE REPORT
CONTINUED
II DIVISION OF RESPONSIBILITIES
93
Board meetings during the reporting period
Regular Board meetings are scheduled each year and the
Directors allocate sufficient time to the Company to discharge
their responsibilities effectively, with the Non-Executives in
particular providing constructive challenge and strategic
guidance and offering specialist insight and advice based on
their experience (see page 84 to 87 for the diverse skill set of
the Board, which provides for balanced and effective leadership
of the Company). During the year ended 31 March 2021 six
scheduled Board meetings were held, with an additional two
unscheduled meetings held to discuss specific issues and events.
The Board also held its annual offsite strategy event in September
2020, which enabled focused discussions relating to the Group’s
strategy. The strategy event was structured to facilitate formal
discussions during the day followed by more informal discussion
in the evening (see also page 90 for further details).
Board attendance at scheduled meetings
Board meetings – 1 April to 31 March 2021
Attendance
GOVERNANCE STRUCTURE
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;
• establishing the Company’s Purpose, Values and Culture, and
ensuring that these are aligned with the Company’s strategic aims
and objectives;
• approving changes to the Group’s capital, corporate and
governance structures;
• reviewing management and 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;
• review of the adequacy and security of the Company’s
arrangements for its workforce to raise concerns, in confidence,
about possible wrongdoing in financial reporting or other matters;
• approving major capital projects, investments and divestments
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;
• ensuring satisfactory dialogue, and approving all formal
communications, with Shareholders;
• ensuring effective engagement with, and encouraging participation
from, the Company’s stakeholders;
• approval of policies on matters such as Health and Safety, Corporate
Social Responsibility 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
• Secretary to the Board: James Moss
Please also see the Schedule of Matters reserved
for the Board, available to download at
https://www.helical.co.uk/investors/corporate-governance
Richard Grant, Non-Executive Chairman
Gerald Kaye, Chief Executive Officer
Richard Cotton, Senior Independent Director
Sue Clayton, Non-Executive Director
Joe Lister, Non-Executive Director
Sue Farr, Non-Executive Director
Tim Murphy, Finance Director
Matthew Bonning-Snook, Property Director
BOARD
6/6
6/6
6/6
6/6
6/6
6/6
6/6
6/6
Key Investor Relations activities
2020
June
June
July
Annual results announcement and analysts presentation
for 2020 (virtual, Covid-19)
Investor Roadshow presentations (virtual, Covid-19)
AGM Trading Update
Annual General Meeting (closed, Covid-19)
October
Portfolio and trading update
November
Half Year results announcement and analysts
presentation for 2020 (virtual, Covid-19)
November/
December
Investor Roadshow presentations (mostly virtual,
Covid-19; some in-person)
2021
April
Portfolio and trading update
Annual General Meeting
For details of the resolutions passed at the 2020 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 99 to 102. 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 129.
COMMITTEES
SUB-COMMITTEES
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) and
supports the annual Board
evaluation process.
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
controls and risk management;
the external audit process and
auditors; and the processes for
compliance with laws, regulations
and ethical codes of practice.
Committee members:
• Richard Grant (Chair)*
Committee members:
• Joe Lister (Chair)
Independent Non-Executive
Director
Independent Non-Executive
Director
• Sue Clayton
• Sue Clayton
Independent Non-Executive
Director
Independent Non-Executive
Director
• Richard Cotton
• Richard Cotton
Independent Non-Executive
Director
• Sue Farr
Independent Non-Executive
Director
Please also see Report of the
Audit and Risk Committee on
pages 99 to 102.
Independent Non-Executive
Director
• Joe Lister
Independent Non-Executive
Director
• Sue Farr
Independent Non-Executive
Director
Please also see Report of the
Nominations Committee
on pages 94 to 98.
* Richard Grant will not chair the
Committee meetings which deal
with the appointment of his
successor.
The Committees’ terms of reference
are available to download at
https://www.helical.co.uk/investors/corporate-governance
EXECUTIVE COMMITTEE
Assists the Chief Executive Officer
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)
Chief Executive
• Tim Murphy
Finance Director
• Matthew Bonning-Snook
Property Director
• James Moss
Group Financial Controller
and Company Secretary
• Tom Anderson
Senior Investment Executive
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)
Independent Non-Executive
Director
• Gerald Kaye
Chief Executive
SUSTAINABILITY COMMITTEE
Assists the Board in setting
and monitoring the Company’s
sustainability strategy, policies,
targets and performance.
Committee members:
• Matthew Bonning-Snook (Chair)
Property Director
• Laura Beaumont
Head of Sustainability
• John Inwood
Head of Asset Management
• Matthew Bonning-Snook
• Pavlos Clifton
Property Director
• Tom Anderson
Senior Investment Executive
Senior Development Executive
• Lois Robertson
Operations Manager
Please also see Report of the Audit
and Risk Committee on pages 99
to 102.
For further details on the Group’s
sustainability initiatives, please
see pages 60 to 71.
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, having regard
to statutory and regulatory
requirements.
Committee members:
• Sue Farr (Chair)
Independent Non-Executive
Director
• Sue Clayton
Independent Non-Executive
Director
• Richard Cotton
Independent Non-Executive
Director
• Richard Grant*
Independent Non-Executive
Director
• Joe Lister
Independent Non-Executive
Director
Please also see Report of the
Remuneration Committee on
pages 103 to 125.
* Richard Grant will be stepping down
from the Remuneration Committee
immediately after the 2021 AGM.
CORPORATE GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021 94
III COMPOSITION, SUCCESSION
AND EVALUATION
NOMINATIONS COMMITTEE
RICHARD GRANT
CHAIR OF THE NOMINATIONS COMMITTEE
Committee membership and attendance Attended
Absent
Independent
Committee meeting
attendance
Richard Grant (Chair)*
Sue Clayton
Richard Cotton
Sue Farr
Joe Lister
Yes
Yes
Yes
Yes
Yes
* Richard Grant will not chair the Committee meetings which deal with the
appointment of his successor.
The Company Secretary acts as secretary to the Committee.
The Committee’s terms of reference are available to
download at: https://www.helical.co.uk/investors/corporate-
governance/
KEY HIGHLIGHTS FOR
2020/21
• Sue Farr, independent
KEY AREAS OF FOCUS
DURING 2021/22
• Appointment and induction
Non-Executive Director,
appointed as Chair of the
Remuneration Committee
of new Chairman of the
Board and new Non-
Executive Director
• Internal Board evaluation
conducted at the beginning
of 2021
• Succession pipeline for
Senior Management
to remain under review
• Succession planning for the
• Continued focus on
Board and senior
management
diversity throughout all
levels of the organisation
• Board evaluation to be
conducted internally in
early 2022
DEAR SHAREHOLDER,
I am pleased to present the Nominations Committee Report
covering the work of the Committee during the year to
31 March 2021.
The Committee met three times over the year and spent a
significant proportion of its time considering the composition
of the Board and its Committees and developing succession
pipelines for my role and that of senior management. In addition,
the Committee oversaw the 2021 Board Effectiveness Review
which was conducted internally.
In line with the 2018 UK Corporate Governance Code (the
”Code”), we have changed the structure of the Nominations
Committee Report from that presented in previous years,
focusing on the three core areas discussed in Section 3 of the
Code: Composition, Succession and Evaluation.
BOARD COMPOSITION
The Nominations Committee evaluates the balance of skills,
experience, diversity and knowledge on the Board. The
Committee considers the Board and its Committees to be
functioning efficiently and effectively. The Board and its
Committees discharge their respective duties successfully with
the appropriate level of challenge and independence. Based on
its review of the composition of the Board and its Committees
over the period, the Nominations Committee is satisfied that
the members of the Board, in conjunction with the senior
management, are well equipped to achieve the Company’s
strategic objectives.
Director appointments are made 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. On an annual basis, the Nominations Committee
formally 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. The Committee also keeps the composition of the
Board and its Committees under review throughout the year.
Whilst there have been no changes to the composition of the
Board itself during the period, Sue Farr assumed the role of
Chair of the Remuneration Committee at the 2020 AGM,
succeeding Richard Cotton who had fulfilled the role on an
interim basis following the retirement of Michael O’Donnell in
July 2019.
Sue was identified as a suitable candidate for the role of
Remuneration Committee Chair during the rigorous non-
executive recruitment process operated externally by the
independent advisory firm, Korn Ferry, in May 2019 (for an
overview of the non-executive director recruitment process
see diagram below). Following her appointment to the Board,
she became a member of the Company’s Remuneration
Committee. Sue did not assume the Remuneration Committee
Chair role immediately, as it was felt necessary to allow her
a period of time to familiarise herself with the business of
the Group and its governance structure.
III COMPOSITION, SUCCESSION AND EVALUATION
95
Sue was selected for the role of Remuneration Committee
Chair due to her extensive remuneration committee experience.
She is the chair of the Accsys Technologies plc Remuneration
Committee and is a member of the British American Tobacco plc
Remuneration Committee. Sue was also previously the chair
of the Millennium & Copthorne Hotels plc Remuneration
Committee and was a member of the Dairy Crest Group plc
Remuneration Committee.
Sue’s biography can be found on page 87.
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 whilst
also promoting diversity of gender, social and ethnic
backgrounds.
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.
Directors’ elections
In compliance with the Code, all the Directors shall be subject to
annual re-election and will therefore put themselves forward for
re-election at the 2021 Annual General Meeting (“AGM”) of the
Company. Please see the Notice of Meeting of the 2021 AGM for
additional information and the recommendations on re-election.
The Board is satisfied that each of the Directors being put
forward for re-election continue to be independent (other than
the Chairman post July 2021 – see page 88) and that they
continue to be effective and dedicated to the role.
Diversity – Board level
The Helical Board fosters an inclusive and diverse culture which
is fundamental to talent retention, growth and delivery of
performance and enhancement of long-term success. Diversity
and inclusion is embraced throughout the Group, and underpins
each of our Values which support the execution of the Board’s
strategic objectives, and is key to the achievement of the
Company’s Purpose. A diverse Board includes and makes good
use of differences in the skills, experience, background, race,
sexual orientation, gender and other characteristics of directors
as set out in the Equality Act. The skills and backgrounds
collectively represented on the Board should reflect the diverse
nature of the environment in which Helical operates and improve
its effectiveness through diversity of approach and thought.
In accordance with the Committee’s terms of reference and
on behalf of the Board, the Committee regularly reviews the
diversity of the Board and its Committees, taking account of the
Company’s strategic priorities, and making recommendations
to the Board about any changes that are deemed necessary.
Board diversity is a key consideration when recommending
future Board appointments and conducting succession
planning exercises.
Our policy on Board diversity, adopted during the reporting
period, reflects our continued commitment to promote an
inclusive and diverse culture.
BOARD DIVERSITY POLICY OBJECTIVES:
• In reviewing Board composition, the Committee will
consider the benefits of all aspects of diversity including,
but not limited to, those described above, in order to enable
it to discharge its duties and responsibilities effectively and
to guard against “group think”.
• The Committee will oversee the development of a diverse
pipeline for succession to the Board. The Committee is
committed to ensuring that candidate lists for Board
positions are compiled by drawing from a broad and
diverse range of candidates.
• In identifying suitable candidates for appointment to
the Board, the Committee will consider both internal and
external candidates on merit against objective criteria
and with due regard to the benefits of Board diversity.
• The Committee will strive to engage executive search firms
who have signed up to the UK Voluntary Code of Conduct
on Gender Diversity.
• As part of the annual Board evaluation, the Committee
will review the composition of the Board and consider: the
balance of competencies to ensure alignment to Helical’s
Purpose and strategic priorities; the environment in which
it operates; the characteristics, perspectives, independence
and diversity of Board members; how the Board works
together; and other factors relevant to its effectiveness.
• The Committee may set targets for Board diversity on
a regular basis and will oversee plans for diversity and
inclusion and assess progress annually.
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III COMPOSITION, SUCCESSION AND EVALUATION
NOMINATIONS COMMITTEE
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III COMPOSITION, SUCCESSION AND EVALUATION
97
Whilst Helical does not set specific targets for diversity on the
Board, it recognises the recommendations of the Hampton-
Alexander Review and will strive to increase the number of
female Board members over time provided that this is
consistent with other skills and requirements. With respect
to gender diversity, female representation on the Board of
Directors currently stands at 25%.
The Board will continue to focus on the levels of diversity
amongst its Directors, and 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.
In accordance with the Group’s diversity objectives, the Board
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 also 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 the 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.
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,
stimulating creativity and contributing to our open and cohesive
culture. In addition, benefits extend to the development of a
diverse succession pipeline, necessary for future sustainability.
The Board’s key objectives with regards to diversity and
inclusion in the workforce are documented in the Company’s
Diversity and Inclusion Policy which can be found on our
website: https://www.helical.co.uk/investors/corporate-
governance/
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 Our Stakeholders – Section 172(1) Statement section
on pages 72 to 81).
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/investors/corporate-governance/.
Female representation on the
Board of Directors
Group’s female employees
with professional qualifications
25%
40%
During the year under review, 40% of the Group’s female
employees held professional qualifications, 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 18% of the workforce carried out
their roles on a part-time basis. The overall gender balance of
the workforce can be found on page 70.
The Board supports the findings of the Hampton-Alexander
Review with respect to increasing gender diversity in company
leadership below board level. 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. Diversity is a key point of focus for the
Nominations Committee in both Board and senior management
level succession planning – see pages 95 to 97.
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
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.
40
10
1-3 years
3-6 years
Over 6 years
40%
50%
10%
Non-Executive
Directors' tenure
40
From the 2021 AGM, I will have served on the Board for over
nine years and the Board considers such a diversion from the
recommendations of the Code is in the best interests of the
Company and its stakeholders. For more information regarding
the decision to extend my tenure, please see page 88.
SUCCESSION
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 Company’s
Diversity and Inclusion Policy informs succession planning at all
levels of the Company (see https://www.helical.co.uk/investors/
corporate-governance/ for the full policy).
During the year, as part of the 2021 internal Board evaluation
(see also Evaluation section below), the current skills and
expertise of the Board members were assessed, with
consideration being given to whether the skills and expertise
were sufficient and broad enough to ensure the effective
operation of the Board. The review of the Directors’ skill sets
helped to identify gaps which will be used to inform the
Committee when appointing future Board members. The
Committee will continue to monitor the skills and capabilities,
and length of tenure of Board members, recommending further
appointments as necessary. For details of our Directors’ skills
and capabilities and how they contribute to the Company’s
long-term success, please see pages 84 to 87.
The 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. In 2019/20, the Committee instructed the
Executive Committee to conduct a detailed review of the
succession pipeline in the following year, considering the skills
and strengths of all potential internal candidates, highlighting
any gaps and training requirements. The process was designed
to ensure that appropriate opportunities are in place to develop
high performing individuals and enable proactive planning for
succession in the executive team and across all levels of the
business. Following its most recent review, the Executive
Committee concluded that the Helical team displayed a good
range of skills and that there were candidates who possessed
the desired capabilities for progression to roles on the Executive
Committee and the Board over time.
The Chief Executive presented the succession plan to the
Nominations Committee for consideration in March 2021. The
plan identified potential successors for the roles on the Board in
the short and long term. The Committee was satisfied that plans
remain sufficiently robust to enable vacancies to be filled on a
short to medium-term basis. As part of the plan, gender and
ethnic diversity were taken into account.
“ The Executive Committee
concluded that the Helical team
displayed a good range of skills and
that there were candidates who
possessed the desired capabilities
for progression to roles on the
Executive Committee and the
Board over time.”
Chairman’s succession
As a result of my tenure exceeding the nine years recommended
by the Code after July 2021, the Committee recognised the need
to plan for the appointment of my successor. The Committee
will ensure that the incoming Chairman is independent upon
appointment and that the appointment process is discussed
with an external Board recruitment services firm. I will not chair
the Committee meetings dealing with the appointment of my
successor in line with Provision 17 of the Code.
It is envisaged that I will step down from the Board at the 2022
AGM at which the appointment of my successor will also be
proposed. The Committee will ensure that a full, formal and
tailored programme of induction will be conducted with my
successor prior to appointment. For details of the reasoning
behind the extension of my tenure, please see page 88.
In advance of my departure, the Committee plans to appoint
an additional Non-Executive Director to the Board. A formal,
transparent and rigorous recruitment process for this role will
be conducted with the assistance of an external search
consultancy.
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 the external search consultants to
ensure that the best possible range of diverse candidates is
considered.
The objectives of the Board Diversity Policy will be implemented
throughout the search process and we will report on how we have
met these objectives in the report of the Committee next year.
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III COMPOSITION, SUCCESSION AND EVALUATION
NOMINATIONS COMMITTEE
CONTINUED
IV AUDIT RISK AND
INTERNAL CONTROL
AUDIT AND RISK COMMITTEE
99
EVALUATION
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. During the year, we undertook a formal and rigorous
internal evaluation of our Board and Committees, with particular
attention paid to the specific areas identified in the external
review conducted by Sam Allen Associates last year. Other
than providing professional external evaluation services,
Sam Allen Associates has no connection to the Company
or its individual Directors.
This year, I led the internal evaluation with respect to the
effectiveness of the Board and its Committees and my
performance review was conducted by our Senior Independent
Director, Richard Cotton.
The process
As a consequence of the national lockdowns imposed by the
Government throughout the reporting period, this year’s
evaluation was largely conducted using video conferencing
and telephone calls. I conducted interviews with each Director
individually, covering the effectiveness of the Board and its
Committees. Each Director was supplied with a list of key
discussion points in advance of their interview. The key areas
of focus highlighted by the 2019/20 review were considered in
the discussions. The responses from each interview were then
collated, and I presented the key findings to the Board in March
2021. In formulating the conclusions, I compared the key themes
identified in the internal 2021 Board evaluation to the results
from the 2020 external Board evaluation.
Similarly, Richard Cotton conducted my performance evaluation
via individual interviews with each Director.
Recommendations from the
2019/20 Board evaluation
Progress
• 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.
• KPIs to be reviewed and
reflected in remuneration
targets as appropriate.
• In the 2021 internal Board evaluation,
the Board reported on improvements
in the contributions to strategic thinking
from the Non-Executive Directors and
improved discussion on strategic options
for the business. These improvements
were further bolstered through the
attendance and contribution of external
experts at the annual Board Strategy
session.
• Succession plan presented to the
Committee in March and approved (see
Succession section of this Report).
• The new proposed Annual Bonus
Scheme 2021 includes appropriate KPIs.
Results and key recommendations from the 2021 Board
evaluation
The results of the evaluation demonstrated that in spite of the
unusual and challenging circumstances experienced throughout
the period, the Board has been able to achieve its key objectives
during the year and made every effort to minimise unavoidable
disruptions caused by the enforced reliance on remote
meetings.
The findings of the evaluation confirmed that the Helical Board
was well composed, with the Directors possessing relevant skills
and diverse experience, and that it functioned effectively.
The benefit of diverse and varied inputs to the process of
strategic review was highlighted by all participants in the review.
The evaluation 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 Board noted an improvement on the provision
of information to Non-Executive Directors in between Board
meetings by the CEO through instant messaging, and the
quality and regular circulation of minutes from the bi-monthly
Management Committee meeting. The independence of
individual Directors was also assessed and no concerns
were raised.
With respect to the evaluation of my performance as Chairman,
there were no issues or concerns highlighted and the Directors
unanimously supported the extension of my tenure by one year
(please see page 88 for more information on this point).
A small number of improvements that could be implemented to
further increase the effectiveness of the Board were highlighted
by the process, and these are detailed in the table below.
Recommendations from the 2020/21 Board evaluation
• The Board should continue to seek input from external experts/
sources wherever possible, particularly in relation to market
knowledge, the assessment of risk and inputs to the process of
strategy development.
• Increased focus on corporate strategy (in addition to property
strategy), paying particular attention to maximising Shareholder
returns.
• Continued focus on diversity throughout all levels of the organisation
with respect to appointments.
• Increased use of instant messaging by all members of the Executive
Management team to communicate with the Non-Executive Directors
in between Board meetings.
The Board is in the process of formulating an action plan in
response to the recommendations of this year’s internal Board
evaluation, and will report on progress made in next year’s
Annual Report.
RICHARD J. GRANT
Chairman
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/
KEY AREAS OF FOCUS DURING 2021/22
• Review of the effectiveness
• Approval of the Company’s
of the Committee
conducted as part of the
internal Board evaluation
• Review of significant issues
relating to the financial
statements and how these
were addressed
• Approval of all Group
policies and procedures
updated Risk Register
• Assessment of the
independence and
effectiveness of the
external Auditor
• Consideration of the need
for an Internal Auditor
The role of the Audit and Risk Committee (as described in its
terms of reference) is to assist the Board in fulfilling its oversight
responsibilities by reviewing and monitoring the following:
• 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 report to the Board on
significant financial reporting issues and judgements which
those statements contain;
• the Company’s system of internal controls 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.
The effectiveness of the Audit and Risk Committee was
reviewed as part of the internal Board evaluation. Please see
page 98 for details of the review and the key recommendations
arising from it.
JOE LISTER
CHAIR OF THE AUDIT AND RISK COMMITTEE
Committee membership and attendance Attended
Absent
Independent
Committee meeting
attendance
Joe Lister* (Chair)
Sue Clayton
Richard Cotton
Sue Farr
* Has recent and relevant financial expertise.
Yes
Yes
Yes
Yes
DEAR SHAREHOLDER,
I am pleased to present this year’s Audit and Risk Committee
Report which outlines the Committee’s key activities and areas
of focus for the year to 31 March 2021.
ROLE OF THE COMMITTEE
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 protected with
respect 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.
In 2020, the Committee considered its Annual Work Plan
which sets out the key activities undertaken during the year in
fulfilment of the duties assigned to the Committee, in accordance
with its terms of reference. The Work Plan is reviewed annually
to ensure that the Committee remains effective and its key areas
of activity remain relevant. The Committee also reviews its terms
of reference on an annual basis.
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IV AUDIT RISK AND INTERNAL CONTROL
AUDIT AND RISK COMMITTEE
CONTINUED
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 on the
previous page. It is common practice at Helical for Audit and
Risk Committee meetings to be attended by all Board members,
whether or not 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, are 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 work of the Audit and Risk
Committee during the year included the following key matters:
• Review of 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 below for
further details);
• Review of the financial statements of the Group and the
announcement of the annual results and the interim statement
on the half year results;
• Review of 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;
• Review and approval of a report on the Committee’s activities,
including how it discharged its responsibilities, for the Annual
Report;
• Review and approval of the viability statement, going concern
basis of preparation and risk management and internal
controls statements;
• Overseeing and ensuring that a robust assessment of
emerging and principal risks facing the Company is
undertaken;
• Review of the Company’s risk exposure and future risk strategy;
• Review of the terms of engagement with the external Auditor;
• Review of the effectiveness/performance of the external
Auditor and their programme of work, taking into
consideration relevant UK professional and regulatory
requirements;
• Consideration of the external Auditor’s independence and
objectivity;
• Review of 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’s procedures for detecting fraud;
• Review of the Company policies and controls, including those
relating to ethical behaviour, anti-bribery and corruption,
anti-facilitation of tax evasion and the Modern Slavery Act; and
• Consideration of the requirement for an internal audit function.
RISK MANAGEMENT AND INTERNAL CONTROLS
During the year, the Committee and the Board re-affirmed
the Group’s Risk Management Framework and this approval
is representative of the emphasis placed 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 and monitor 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 the control system is delegated
to this 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. For further details on Helical’s Risk Management
Framework, please see pages 52 to 53.
SIGNIFICANT AREAS OF REVIEW
In discharging its responsibilities in connection with the
preparation of the financial statements for the year to 31 March
2021, 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 suitable professional qualifications. 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 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 Tangible Value per share at each reporting
IV AUDIT RISK AND INTERNAL CONTROL
101
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 drivers of value 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 disclosed business risks disclosed link to sensitivities
set out within the financial statements?
This work enabled the Committee to be satisfied that the Annual
Report and Accounts, taken as a whole, is fair, balanced and
understandable and provides the necessary information for
Shareholders to assess the Company’s performance, business
model and strategy. This was reported to the Board at its
meeting in May 2021.
UPDATES INCLUDED IN THE 2021 ANNUAL REPORT:
• Enhanced reporting on Sustainability and on the
implementation of the Group’s Sustainability Strategy
(see pages 60 to 71)
• The Group’s corporate governance reporting has been
enhanced with the inclusion of:
– Principal Board decisions and how these link to the Directors’
s172(1) Duty (see page 73)
– Enhanced reporting on Helical’s stakeholder engagement
initiatives, specifically through inclusion of the detailed
outcomes of such engagement (see Strategic Report on
pages 78 and 79)
• Information on the impact of Covid-19 on the business, market,
going concern and viability
• Our view of “The Office Experience” and three case studies
supporting our Investment Case.
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 Sue Clayton, FRICS, an independent Non-Executive
Director.
• Going Concern and Estimates and Judgements
The impact of Covid-19 has caused significant uncertainty in
the property market and wider economy. In light of this, the
Committee 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 these Accounts
and the Report of the Directors, pages 126 to 128). It also
considered the estimates and judgements discussed in
Note 36 to these Accounts.
FAIR, BALANCED AND UNDERSTANDABLE – REVIEW OF
THE 2021 ANNUAL REPORT
In accordance with the requirements of the Code, the
Committee has reviewed and concluded that the Group’s
Annual Report and Accounts, taken as a whole, is fair, balanced
and understandable. In determining its position, the Committee
also considered the Company’s compliance with relevant
regulatory frameworks, including the FRC’s letter on key
matters relevant to the 2020/21 financial reporting season
published in November 2020, and oversaw the quality and
integrity of the Group’s financial reporting and accounting
policies and practices.
As part of its review of the financial statements, the Committee
considered, and challenged as appropriate, the accounting
practices and significant judgements and estimates which
underpin the Group’s financial statements.
Those members of the team responsible for the drafting of the
Annual Report convened frequently to establish the general
content and themes and to ensure that reporting was balanced
and addressed all key issues and requirements.
Our Annual Report designer (Sampson May) also provided
feedback on the structure, format and content to assist
management in ensuring the Annual Report was
comprehensible and easy to navigate.
In addition, 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?
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IV AUDIT RISK AND INTERNAL CONTROL
AUDIT AND RISK COMMITTEE
CONTINUED
EFFECTIVENESS OF THE EXTERNAL AUDITOR
Deloitte was appointed as the Group’s Auditor for the year
ended 31 March 2019.
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:
• their robustness and the degree to which they were able to
assess key accounting and audit judgements and the content
of their reports;
• the audit plan (presented to the Committee in November
2020) with focus on the quality of planning, whether the
plan was designed to suit Helical and whether the agreed
plan was fulfilled;
• the quality of the Auditor’s reporting during the year, including
the challenges raised and insights shared, against agreed
performance expectations;
• feedback from the workforce evaluating the performance
of the audit team;
• feedback highlighting any issues that arose during the course
of the audit;
• the Auditor’s assessment of its independence; and
• the relationship between the Auditor and the Group, ensuring
objectivity and independence were maintained.
By holding the two meetings between the Auditor and the
Committee in the absence of management, open and objective
discussions were enabled and thus enhanced the assurance of
Auditor effectiveness.
As a result of their review the Committee concluded that
the audit process was effective and efficient, and the re-
appointment of Deloitte as the Company’s Auditor will be
proposed at the 2021 AGM.
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 (£59,100); and
• review of the Performance Share Plan and Directors’ Bonus
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
percentage of non-audit fees, when compared to the total fee
paid during the year, was 12%, 11% of which was for the review
of the Half Year Results.
ANNUAL GENERAL MEETING
At the Annual General Meeting to be held on 15 July 2021, 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
V REMUNERATION
DIRECTORS’ REMUNERATION REPORT
ANNUAL STATEMENT
SUE FARR
REMUNERATION COMMITTEE
Committee membership and attendance Attended
Absent
Independent
Committee meeting
attendance
Sue Farr (Chair)1
Sue Clayton
Richard Cotton2
Richard Grant3
Joe Lister
Yes
Yes
Yes
Yes
Yes
DEAR SHAREHOLDER,
I am pleased to present the Remuneration Committee’s Directors’
Remuneration Report (“Report”) for the year to 31 March 2021.
I was appointed Chair of this Committee at the 2020 AGM, taking
over from Richard Cotton, and would like to take this opportunity
to thank Richard, and the other members of the Committee, 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.
Helical’s approach to remuneration is unchanged from previous
years, being to align executive reward to success in achieving the
Group’s financial and strategic objectives.
This Report is structured in a way that provides clarity and
transparency for Shareholders. The “Remuneration at-a-glance”
section on pages 104 and 105 is designed to provide readers
of the report with a succinct summary of the remuneration
of the Executive Directors in the year to 31 March 2021. The
“Implementation of the New Remuneration Policy” section on
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.
103
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 helps 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, annual
and long-term incentives;
• Compliance with the UK
Corporate Governance
Code; and
• Remuneration practice and
its cost to the Company;
• Recruitment, service
contracts and severance
policies;
• The engagement and
independence of external
remuneration advisors.
1 Sue Farr was appointed Chair of the Committee at the 2020 AGM.
2 Richard Cotton served as Chair of the Committee until the 2020 AGM.
3 Richard Grant will be stepping down as a member of the Committee
immediately after the 2021 AGM.
pages 108 and 109 is designed to provide details of their potential
remuneration for the year to 31 March 2022, under a proposed
New Remuneration Policy to be considered by Shareholders at
the 2021 AGM.
REMUNERATION REPORT INDEX
This Directors’ Remuneration Report has been divided
into the following sections:
Section
Annual Statement
Remuneration at-a-glance
Earnings for the financial year to 31 March 2021.
Implementation of the New
Remuneration Policy
Sets out the Remuneration payable on the
implementation of the proposed new
Remuneration Policy, should it be approved by
Shareholders at the 2021 AGM.
Remuneration Policy Report
Sets out the Remuneration Policy for Executive
and Non-Executive Directors, which will be
presented to Shareholders for approval at the
2021 AGM.
Annual Report on Remuneration
Discloses how the Remuneration Policy was
implemented in the year to 31 March 2021 and
how the Policy will be operated in the year to
31 March 2022.
Pages
103–107
104–105
108–109
110–116
117–125
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104
V REMUNERATION
DIRECTORS’ REMUNERATION REPORT
CONTINUED
Remuneration at-a-glance
Total Property Return – MSCI (1 year)
7.0%
2020: 9.6%
Total Property Return – MSCI (3 year)
8.9%
2020: 10.2%
FINANCIAL KPIs
EPRA Net Tangible Asset (NTA) value
per share
533p
2020: 524p
Total Accounting Return
3.3%
2020: 7.7%
Total Shareholder Return
21.2%
2020: 8.7%
ESG KPIs
MSCI ESG
AAA
2020: AA
GRESB
3*
2020: 2*
Silver
2020: Bronze
CDP
B
2020: C
33 Charterhouse Street, London EC1
£140m Green Loan
33 Charterhouse Street, London EC1
Built for the Future
Sustainability Strategy Document
Designing for Net Zero
Design Guide for our Developments
EARNINGS FOR THE FINANCIAL YEAR TO 31 MARCH 2021
Total remuneration for Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Salary2
£000
Benefits3
£000
Pension4
£000
545
317
424
45
11
44
–
–
–
Total
Fixed
£000
590
328
468
Annual
Bonus
£000
493
287
383
Share
Awards5
£000
1,035
587
807
Share
Incentive
Plan6
£000
7
7
7
Total
Variable
£000
1,535
881
1,197
Total
2021
£000
2,125
1,209
1,665
Total
2020
£000
2,316
1,360
1,830
1 Full details of the Directors’ remuneration for the year can be found in the table on page 118.
2 Basic salaries were not increased on 1 April 2020, in light of the Covid-19 crisis, and remained throughout the year at the same level as the previous year.
3 There were no changes to the provision of benefits-in-kind, which remained the same as for the previous year.
4 The Group’s policy of not making pension provision for Executive Directors remained unchanged, with such Directors required to provide for their retirement through the
Group’s incentive schemes.
5 Share awards include dividend shares awarded to Directors on 29 June 2020 under the terms of the Annual Bonus Scheme 2018.
6 The Executive Directors participated in the HMRC approved all-employee Share Incentive Plan which, during the year, awarded them shares to the value of £7,200, the same
as in the previous year.
V REMUNERATION
105
ANNUAL BONUS PLAN – TARGETS AND OUTCOMES
Performance measure
TPR
TAR
Strategic and ESG
Total
50%
25%
25%
100%
Payout target
20%
-1.65%
5.0%
100%
1.60%
10.0%
Actual
6.99%
3.6%
%
awarded
50.0%
0.0%
10.3%
60.3%
Applying these performance outcomes to the individual
Directors’ salaries and bonus multiples, the Annual
Bonuses payable are:
Bonus
payable
£000
% of
maximum
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
493
287
383
60.3
60.3
60.3
2018 PSP AWARD VESTING IN 2021 – TARGETS AND OUTCOMES
Performance measure
NAV
TPR
TSR
Total
33%
33%
33%
100%
Payout target
10%
5.0%
2.8%
-27.4%
100%
Actual
12.5%
4.8%
4.1%
6.0%
8.9%
25.2%
%
awarded
The estimated number of shares vesting
are as follows:
7.4%
33.3%
33.3%
74.0%
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Estimated value
at vesting1
£’000
985
573
766
Number
254,032
147,832
197,602
1 The share price used to calculate the expected value at vesting was 387.63p, based on the average share price over the three months to 31 March 2021.
The level of PSP vesting in 2021 (74% 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.
% 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
240%
1,498%
Shareholding requirement
500%
Tim Murphy
Finance Director
Beneficially owned shares
770%
Unvested interests over shares1
198%
Shareholding requirement
500%
Matthew Bonning-Snook
Property Director
Beneficially owned shares
Unvested interests over shares1
236%
1,204%
1 The value of unvested interests over shares is calculated on the shares expected to vest, net of tax liabilities, of the 2018 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 2021 of 387.63p.
EPRA Sustainability BPR
BREEAM OUTSTANDING (design stage)
SHAREHOLDING OF THE EXECUTIVE DIRECTORS
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106
V REMUNERATION
DIRECTORS’ REMUNERATION REPORT
CONTINUED
The Annual Report on Remuneration, on pages 117 to 125,
provides a record of the work undertaken by the Committee
during the year, followed by a detailed analysis of how the
remuneration for the year to 31 March 2021 has been calculated
under the Policy for that year and what performance measures
were set for the Annual Bonus Scheme and Performance
Share Plan.
Finally, under Other Remuneration Matters, on pages 122 to 125,
this Report includes a record of Directors’ shareholdings and
a comparison of these shareholdings against the Group’s
shareholding guidelines and details of outstanding share
awards. The section also includes a note of the Company’s share
price performance and Total Shareholder Return (“TSR”) against
sector benchmarks and a comparison of the remuneration of
the Chief Executive and other Directors against the Group’s
employees.
PERFORMANCE
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 reward the
achievement of long-term strategic objectives. Our
remuneration is directly linked to the five pillars of our Strategy
(see pages 26 to 29).
Our objective is to maximise Shareholder return by increasing
the net asset value of the Group from managing a portfolio of
offices, primarily in London, balanced between let investment
assets and new development schemes. We operate a
sustainable capital structure, seeking to attract and retain the
best people with ESG matters at the heart of our business.
In a challenging year, the Group generated a profit before tax of
£20.5m (2020: £43.0m), a Total Accounting Return of 3.3%, with
an increase in EPRA NTA of 1.7%. The Total Property Return, as
measured by MSCI, generated a return of 7.0%. The TSR for the
year, based on the spot prices at each year end, generated a
return of 21.2% (2020: 8.7%). In light of the good results and an
improved outlook, the Board is recommending a final dividend
of 7.40p (2020: 6.0p) taking the total dividend for the year to
10.10p (2020: 8.7p), an increase of 16.1%.
The Group made significant progress in meeting its ESG Key
Performance Indicators, improving its MSCI ESG rating from
AA to AAA, its GRESB rating from 2* to 3* and its EPRA
Sustainability rating from Bronze to Silver. The Group’s rating
by the Carbon Disclosure Project (“CDP”) improved from C to B.
Operationally, the Group was awarded the first UK BREEAM
(2018) Outstanding rating for the design stage at its development
at 33 Charterhouse Street, London EC1. The financing of this
development, with Allianz, is through a £140m Green Loan.
ESG
During the year, the Group published its Sustainability
Strategy document, “Built for the Future”, and a design
guide for its developments, “Designing for Net Zero”.
Built for
the future/SUSTAINABILITY
STRATEGY
Designing
for Net Zero/ DESIGN
GUIDE
Invoiced rents collected
during the year
93%
Gearing reduced
from 31.4% to
22.6%
Investment portfolio
showed a surplus of
£23.9m
Reduction in fixed overheads
12.7%
Impact of the Covid-19 pandemic
At the start of the financial year, the country had recently
entered its first lockdown and it was a period of considerable
uncertainty with the timing and strength of any recovery from
the Covid-19 pandemic yet to be determined.
In last year’s Annual Report, we noted our concern of the impact
of the pandemic on the business and took swift action to reduce
outgoings and preserve the Group’s cash resources. Included
in this action was a 20.0% reduction in the final dividend payable
to Shareholders in July 2020. Responding to these measures
the Committee, with the full support of the Executive Directors,
exercised its discretion to reduce the 2019/20 bonus outturn
by 10.0%, the equivalent of a 25% reduction in basic salaries for
six months, and deliver the reduced annual bonus award wholly
in deferred shares.
We are now reporting at a time of relative optimism with a
successful rollout of a number of vaccines, significant reductions
in the numbers of people infected with the virus and with a
complete end to the restrictions imposed by the Government
in sight.
During the financial year to 31 March 2021, the Group has
successfully executed much of its business plan, letting its main
vacant building, Kaleidoscope, London EC1, selling assets that
had reached their potential, reducing gearing from 31.4% to
22.6%, and collecting over 93% of invoiced rents during the year.
At the year end, the investment portfolio showed a surplus of
£23.9m, a good result in a challenging year.
Despite our successes during the year, we recognise that many
have suffered during the pandemic. Our industry’s main charity,
LandAid, provides temporary accommodation for vulnerable
young people enabling them to make a new start in life. As part
of our community assistance, we were a Founding Partner to
the LandAid Emergency Fund in April 2020, enabling frontline
charities across the country to provide vital support during
the pandemic.
We retained all our staff in employment throughout the year
and have not utilised the Government’s Coronavirus Job
Retention Scheme (Furlough). Despite this, we reduced our
fixed overheads by £1.4m (12.7%) compared to the previous
year as we sought to reduce our costs.
V REMUNERATION
107
In proposing the new Policy, we have reflected market
expectations of appropriate remuneration levels in the sector
and amongst the Group’s peers. As part of the Policy review, the
Committee consulted with the Company’s major Shareholders
(covering over 67% of issued share capital) and the major
shareholder representative bodies. In addition to setting out
the proposals in a detailed letter and responding to a number of
questions and requests for clarifications, Shareholder feedback
was summarised and shared with those consulted. The level
of support for the proposals has been very strong. However,
reflecting Shareholder feedback, and demonstrating the benefit
of the consultation process, two changes were made to the
original proposals. The two changes made were: (i) increasing
the weighting on ESG measures from 5% to 10% of annual bonus
potential; and (ii) extending post cessation shareholding
guidelines for two years from cessation (rather than the phased
approach which was originally proposed). The Committee’s
intended approach to operating the proposed new Policy is
detailed in the section headed “Implementation Of The New
Remuneration Policy” on pages 108 and 109 and further details
of the new Policy are included in the Remuneration Policy
Report on pages 110 to 116.
2021 ANNUAL GENERAL MEETING RESOLUTION
We were unable to permit access to our Shareholders to attend
our 2020 AGM, due to the restrictions in place at the time, but
we are hopeful that we will be able to welcome you to our 2021
AGM to be held on 15 July 2021.
The following resolutions relating to remuneration will be
presented at the 2021 AGM:
• An advisory resolution in respect of the Annual Report on
Remuneration for the year to 31 March 2021; and
• A binding resolution in respect of the new Remuneration
Policy to cover the three-year period from 1 April 2021.
I trust that Shareholders will support the Committee and vote
in favour of these resolutions.
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.
SUE FARR
Chair of the Remuneration Committee
25 May 2021
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 2021 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 objectives. In accordance with
these performance criteria, bonuses were calculated for the
Executive Directors as follows: Gerald Kaye £493,000, Tim
Murphy £287,000 and Matthew Bonning-Snook £383,000. As
all three Executive Directors satisfy the minimum shareholding
guideline of 500% of salary and bonus awards are less than
100% of their base salaries, these bonuses will be paid in cash.
Full details of the targets and the performance against these
targets are set out in the “Remuneration at-a-glance” section
and the Annual Report on Remuneration.
Performance Share Plan 2014
Share awards granted in 2018 under the terms of the 2014
Performance Share Plan were subject to three performance
conditions over the three years to 31 March 2021. 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 Central London Offices
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 and TSR conditions were
met in full. The net asset value condition was partially met.
Consequently, 74% of the awards are expected to vest in
June 2021. 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 to 31 March 2021, 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.
RENEWAL OF REMUNERATION POLICY
During the last year, the Committee has reviewed the Group’s
Remuneration Policy (“Policy”) and the result of these
deliberations is a new Policy, to be put to Shareholders for a
binding vote at the AGM on 15 July 2021. The Committee is not
proposing any significant changes to the previous Policy, which
received 97% in favour at the 2018 AGM. We believe the new
Policy continues to incentivise management to deliver the
Strategy agreed by the Board, maximising Shareholder returns
through delivering income growth from creative asset
management and capital gains from our development activity.
The main changes to the Policy are:
• The introduction of a minimum shareholding requirement
for new Directors;
• The introduction of a formal, post-cessation of employment,
shareholding requirement; and
• Updated and enhanced malus and clawback provisions.
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V REMUNERATION
DIRECTORS’ REMUNERATION REPORT
CONTINUED
V REMUNERATION
109
IMPLEMENTATION OF THE NEW REMUNERATION POLICY
Subject to Shareholder approval at the 2021 AGM on 15 July 2021, the Remuneration Policy will be implemented for the year to
31 March 2022 as follows:
Remuneration Policy
Basic annual salaries
Proposed Policy changes
Implementation for 2021/22
Change from 2020/21 Implementation
The basic salaries of the Executive
Directors from 1 April 2021 are:
Gerald Kaye £552,290
Tim Murphy £321,800
Matthew Bonning-Snook £430,100
Annual inflationary increase
awarded of 1.5% from 1 April 2021.
The average increase for all other
employees was 5.2%.
Each Executive Director is provided
with a car or car allowance, car fuel,
private medical insurance, life
assurance and permanent health
insurance.
No change
No retirement provision
No change
150% of salary subject to the
following performance measures
and weightings:
35%: TPR against the MSCI Central
London Capital Growth Index
Base – Index (20% payable)
Stretch – Index plus 3.25%
40%: TAR
Base – 2.5% (10% payable)
Stretch – 10.0%
25%: Strategic and ESG targets
(these will be reported on
retrospectively in the Directors’
Remuneration Report for the year
to 31 March 2022).
The TPR of the Group’s portfolio
will be measured against the MSCI
Capital Growth Index, not the MSCI
Total Return Index.
TPR weighting reduced from 50% to
35%.
TAR weighting increased from 25%
to 40%.
TAR threshold target reduced from
5% and % payable at threshold
reduced from 20% to 10%
Strategic and ESG targets replace
personal targets.
No change
As per Policy
No change
Set on appointment to the Board
and reviewed annually on 1 April or
on change in role or responsibility.
No change
Benefits-in-kind
To provide insured health
protection, cars and fuel allowances
No change
Pension
The Group does not provide for the
retirement of Executive Directors
No change
No change
Annual Bonus
Annual performance targets are set
by the Committee in advance of
the financial year and are linked to
the Group’s strategy of maximising
Shareholder returns through
delivering income growth from
creative asset management and
capital gains from its development
activity.
The maximum bonus is capped at
150% for each Executive Director.
The pay-out for threshold
performance against any targets will
be no more than 20% of the
maximum bonus (and may be
lower).
To the extent there is low or no
bonus payable on the portfolio/
financial measures, the Committee
will retain discretion to reduce
(including to zero) the pay-out
under the strategic targets.
Deferred Bonus
Executive Directors who have met
their minimum shareholding
requirement will receive the first
100% of their salary in cash with any
excess above 100% of salary to be
provided in deferred shares.
Executive Directors who do not
meet their minimum shareholding
requirement will receive two thirds
of the annual bonus in cash and one
third in shares.
The Committee may award
dividend equivalents on deferred
shares that vest.
Remuneration Policy
Proposed Policy changes
Implementation for 2021/22
Change from 2020/21 Implementation
Long-Term Incentive Awards
Annual Award 2021 –
Vesting in 2024
Annual awards, under the terms of
the Group’s Performance Share
Plan (“PSP”), will be granted in June
2021 over shares equal to 250% of
salary at 31 March 2021.
No change
The three performance conditions
are:
The NAV stretch threshold reduced
from 12.5% pa to 10.0% pa.
33%: Net Asset Value Growth
33%: TPR versus MSCI Index
33%: Relative TSR
The threshold and maximum
targets are noted in the table
on page 114.
Malus and Clawback
Malus and clawback provisions will
continue to operate (albeit updated
and enhanced)
Additional triggers of serious
reputational damage and corporate
failure added.
As per Policy
As per Policy
Shareholding Requirement –
In Employment
To require Executive Directors to
hold shares equating to a minimum
value whilst in employment (500%
of salary for current Executive
Directors and 250% of salary for
new Executive Directors).
Shareholding Requirement –
Post Cessation
To require former Executive
Directors to hold shares equating to
a minimum value for a period post
cessation of employment.
250% of salary for two years post
cessation.
Non-Executive Directors
Set on appointment to the Board
and reviewed annually on 1 April or
on change in role or responsibility.
The fees payable were last
increased on 1 April 2019. The base
fee for NEDs is £48,000 pa with an
additional £10,000 payable to the
Chairs of each committee.
For new Executive Directors, a
minimum of 250% of salary to be
achieved within five years of the
start of employment.
As per Policy
As per Policy
Introduction of a formal post
cessation minimum shareholding
requirement.
As per Policy
As per Policy
No change
No change
Richard Grant (Chairman)
£150,000
Richard Cotton (SID)
£70,000
Sue Clayton (Property Valuations)
£58,000
Sue Farr (Remuneration)
£58,000
Joe Lister (Audit and Risk)
£58,000
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No changes are being proposed in respect of incentive
quantum, with the annual bonus continuing to be capped
at 150% of salary and PSP awards capped at 250% of salary.
However, the proposed Policy includes the following changes:
Shareholding guidelines (in employment) – Two changes are
proposed in respect of our “in-employment” shareholding
guidelines. Firstly, our current Remuneration Policy, which was
approved by Shareholders at the 2018 AGM, set share ownership
guidelines at 500% of salary for Executive Directors. However,
while the 500% of salary is considered an appropriate level for
the current long-serving Directors, the Committee is of the view
that this level will make future recruitment to the Board
challenging. As such, the Committee is proposing that new
Executive Directors are appointed on a shareholding guideline of
250% of salary to be achieved within five years of appointment.
Secondly, the guidelines will be amended to include unvested
non-performance related share awards on a net of tax basis (as
per the IA’s update to its Remuneration Principles).
Post cessation shareholding guidelines – In line with the UK
Corporate Governance Code, the Committee wishes to introduce
post cessation shareholding guidelines into the 2021 Directors’
Remuneration Policy. As such, based on shares delivered from
deferred bonuses/PSP awards which are granted post the 2021
AGM, shares equal to 250% of salary will need to be retained
until the second anniversary following the date of cessation.
Malus and clawback provisions – Provisions have been reviewed
and enhanced to include serious reputational damage and
corporate failure.
Other minor changes – In addition to the above, minor changes
will be made to the Policy wording in respect of the annual
bonus and PSP performance metrics. Consistent with market
practice, the specific references to performance metrics and
weightings set out in the 2021 Remuneration Policy will be
removed to increase the flexibility to refine metrics and
weightings during the Policy Period to align with the Group’s
strategy where appropriate.
110
V REMUNERATION
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 and
oversight of the remuneration of the wider workforce.
POLICY DURATION
The previous Remuneration Policy was approved by
Shareholders at the Annual General Meeting held on 12 July
2018 for a maximum period of three years and is now reaching
its expiry. This Policy Report sets out the 2021 Remuneration
Policy which, subject to the approval of Shareholders at the
2021 AGM, will be effective for the three years from 1 April
2021 to 31 March 2024.
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 and ESG 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.
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:
• The total individual remuneration packages of each
Executive Director including, where appropriate, basic
salaries, annual bonuses, share awards, and other benefits;
• The fees payable to the Chairman of the Company;
• Salaries, bonuses and share awards of senior employees
and workforce remuneration;
• Targets and hurdles for any performance related
remuneration schemes; and
• Service agreements incorporating termination payments
and compensation commitments.
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DIRECTORS’ REMUNERATION POLICY TABLE
The table below summarises the Directors’ Remuneration Policy.
Element
Salary
Annual
bonus
Purpose and link to strategy
Operation
Maximum
Performance targets
• Reflects the value of the
individual and their role
and responsibilities
• Normally reviewed annually,
effective 1 April
• Paid in cash on a monthly basis;
• Reflects delivery against
not pensionable
key 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
• N/A
• No minimum or maximum
salary increase is operated
• 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
• 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)
• 150% of salary pa for all
• Performance normally
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
Executive Directors
measured over one year
• No more than 20% of an award
vests at threshold performance
• The majority of the bonus
potential will be based on
portfolio and financial targets
(e.g. Total Property Return and/
or Total Accounting Return) and
a minority will be based on
strategic and/or ESG objectives
• Malus and clawback provisions
apply
• Discretionary annual grant of
• 250% of salary pa for all
• Performance normally measured
Executive Directors
over three years
Long-term
incentive
awards
• Aligned to main strategic
objective of delivering
long-term value creation
• Aligns Executive Directors’
interests with those of
Shareholders
• Rewards and helps retain key
Executives and is aligned
with the Group’s risk profile
conditional share awards under
the 2014 PSP Scheme
• Executive Directors are required
to retain PSP shares acquired,
net of shares sold to pay tax
liabilities arising on vesting, for
at least two years after vesting
• Dividend equivalent payments
(in cash or in shares) may be
payable
Pensions
• There is no Group pension
N/A
N/A
Other
benefits
Share
ownership
guidelines
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
• Benefits provided through
N/A
third party providers
• Insured benefits include: private
medical cover, life assurance
and permanent health insurance
• Other benefits may be provided
where appropriate
• To provide alignment of
• Executive Directors are required
N/A
interests between Executive
Directors and Shareholders
to build and maintain a
specified shareholding through
the retention of the post-tax
shares received on the vesting
of awards
• 10% of an award vests at
threshold performance
• Performance targets will be
based on portfolio, financial
and/or share price (e.g. net asset
value per share, Total Property
Return and/or Total Shareholder
Return) and, for a minority of
award, strategic and/or ESG
objectives
• Malus and clawback provisions
apply
N/A
N/A
• Current Executive Directors are
required to hold a shareholding
equal to or in excess of 500%
of basic salary
• New Executive Directors are
required to build up a
shareholding equal to or in
excess of 250% of basic salary,
within five years of appointment
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
• Cash fees paid monthly
• Fees are reviewed on a regular
• No minimum or maximum
fee increase is operated
N/A
basis
• Benefits may be provided
where appropriate
• Fixed three-year contracts with
three-month notice periods
• Fee increases may be guided
by the average increase
awarded to Executive
Directors and other
employees and/or general
movements in the market
• Increases may be above this
level if there is an increase in
the scale, scope or
responsibility of the role
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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DIRECTORS’ REMUNERATION REPORT
CONTINUED
COMPLIANCE WITH THE 2018 UK CORPORATE GOVERNANCE
CODE (“CODE”)
The Remuneration Committee has ensured that the provisions
of the Code have been taken into account in its decisions during
the year and in the preparation of this Report.
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.
The Code also suggests that post-employment shareholding
provisions are set to ensure that Directors who leave the Group
are not able to immediately liquidate their shareholdings.
The Group’s proposed new Remuneration Policy (“Policy”),
incorporates provisions restricting the sale of certain share
entitlements, post-employment.
The Committee has considered the six factors set out in
Provision 40 of the 2018 UK Corporate Governance Code and
ensured that its Policy and this Report are consistent with these
factors:
• Clarity and Simplicity – The Policy is designed to simplify
remuneration arrangements and provide clarity between
remuneration and the performance of the Group. In addition,
this Report is designed to assist the reader in understanding
how the Policy is being implemented.
• Risk – The 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 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 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 has
been applied twice in the last four years) 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 Company regularly seeks feedback from the workforce
through a variety of methods as explained on pages 80 and 81.
Through these methods, the Company can engage with its
workforce on remuneration matters where appropriate.
The Committee does not view formal engagement with the
workforce on executive remuneration as being appropriate
in a company of Helical’s size.
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-rate any bonus
payable in respect of the year of appointment.
Long-term
incentives
Annual awards under the terms of the 2014 PSP will
be made in accordance with the terms of that Plan.
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113
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 by 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, under the proposed 2021 Remuneration Policy, the
following post cessation shareholding guidelines will apply
with effect from the 2021 AGM:
• 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; and
• Shares to the value of 250% of salary to be retained for two
years, post cessation. Such shares to be out of those delivered
from deferred bonuses and PSP awards which are granted after
the 2021 AGM.
Share
Incentive Plan
Shareholding
guideline
Buy-out
awards
Non-
Executive
Directors
In line with that of existing Executive Directors.
Newly appointed Executive Directors will be expected
to build up a shareholding in the Company of 250% of
salary out of shares purchased and/or shares vesting
through the Group’s Annual Bonus Scheme and
Performance Share Plan, within five years of their
appointment.
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.
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 pays pension contributions of 12.5% in
respect of all employees’ pension arrangements. 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. 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.
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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
28 September 1994
1 March 1994
13 March 1995
24 July 2012
1 August 2007
25 July 2016
25 July 2016
25 July 2016
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 2021;
• 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) plus shares awarded under the Helical Bar 2002 Approved Share Incentive Plan; 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
3,509
2,818
20%
49%
39%
30%
21%
24%
17%
1,712
41%
24%
35%
599
100%
Minimum
On target
Maximum
Maximum
with Share
price
growth
984
42%
24%
34%
333
100%
1,628
50%
30%
20%
Minimum On target
Maximum
2,739
20%
2,201
49%
39%
29%
22%
24%
17%
1,341
41%
24%
35%
474
100%
Minimum
On target
Maximum
Maximum
with Share
price
growth
2,030
20%
40%
24%
16%
Maximum
with Share
price
growth
GERALD KAYE
TIM MURPHY
MATTHEW BONNING-SNOOK
Basic salary & benefits
Bonus
Share Awards
Maximum with 50% share price growth
Amount of annual bonus
payable if the Total Accounting
Return (“TAR”) of the Group is
10% or greater
Amount of annual bonus
payable if the Total Property
Return (“TPR”) exceeds the
MSCI Index plus 3.25%
35%
40%
Amount of annual bonus
payable if the strategic and
ESG targets are met
25%
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:
• 40% 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
lower threshold target is set at 5.0% and 10% of this part of
the award paid out if the TAR lower threshold is set between
2.5% and 5.0%;
• 35% 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 Capital Growth 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 strategic
and ESG 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
for current Executive Directors and 250% of salary for new
Executive Directors 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
and ESG 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,
in the event of gross misconduct, serious reputational damage
and corporate failure; 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.
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.
PERFORMANCE SHARE PLAN 2014
Performance conditions for awards granted under the terms of the Performance Share Plan 2014 will be equally weighted and
measured over three years as follows:
NET ASSET VALUE GROWTH
TPR VERSUS MSCI INDEX
RELATIVE TSR
Annual compound increase
% of award vesting Ranking after three years
% of award vesting Ranking after three years
% of award vesting
10.0% pa or more
5.0% pa to 10.0% pa
5.0% pa
Below 5.0% pa
33.3 Upper quartile or
above
33.3 Upper quartile or
above
33.3
Pro-rata from 3.3 and
33.3
Median to upper
quartile
Pro-rata from 3.3 and
33.3
Median to upper
quartile
Pro-rata from 3.3 and
33.3
3.3 Median
nil Less than median
3.3 Median
nil Less than median
3.3
nil
1 Net Asset Value Growth – 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). If UK inflation (RPI) is higher than 3% pa over the three-year period, then the required compound
increase will be raised by the excess over 3% pa average.
2 TPR versus MSCI Index – the Total Property Return of the Group’s property portfolio will be compared to the MSCI Central London Offices Total Return Index.
3 Relative TSR – The comparator group for awards granted will be those companies included in the FTSE 350 and Small Cap Indices, excluding agencies.
4 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
period or the Total Property Return falls below the MSCI median, the growth in triple net asset value is below 5.0% pa and the relative TSR is below the median over the
three-year period.
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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
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
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;
Capital & Regional plc;
Derwent London plc;
Great Portland Estates plc;
Hammerson plc;
LondonMetric Property plc;
McKay Securities plc;
NewRiver REIT plc;
Shaftesbury plc;
St. Modwen Properties plc;
U+I Group plc; and
Workspace Group plc.
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 2021 and how the Policy is intended to be implemented in the year to 31 March 2022.
APPLICATION OF THE REMUNERATION POLICY IN THE YEAR TO 31 MARCH 2021
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 2020;
• The review of bonus targets for the year ended 31 March 2021;
• The setting of targets for the PSP awards which were granted in June 2020; and
• The approval of the vesting of PSP awards in June 2020 which were originally awarded in June 2017.
OTHER MATTERS
• The Committee reviewed the Group’s Remuneration Policy (“Policy”) and, having considered feedback received from
Shareholders and shareholder advisory bodies, is recommending a new Policy at the 2021 AGM; and
• The Committee updated its terms of reference.
TOTAL REMUNERATION IN THE YEAR TO 31 MARCH 2021
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 2021, 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
Share awards
Actual
£000
Share of total
%
Maximum
£000
Share of total
%
1,386
1,163
105
2,345
4,999
28
23
2
47
100%
1,386
1,928
105
3,141
6,560
21
29
2
48
100%
Note: Share awards 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 2021 in accordance with the terms of the Performance Share Plan 2014, plus the shares
awarded under the terms of the Share Incentive Plan.
ANNUAL TOTAL REMUNERATION COMPARED TO THE 2020 POTENTIAL (UNAUDITED)
The following bar charts show the actual remuneration earned by the Executive Directors against the minimum 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.
We have shown the actual and maximum scenarios with the impact of the actual share price appreciation over the three years
to 31 March 2021 (3 month average).
CORPORATE GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021 118
V REMUNERATION
DIRECTORS’ REMUNERATION REPORT
CONTINUED
Value of remuneration packages at different levels of performance
£’000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2,125
2%
47%
23%
28%
590
100%
2,796
2%
48%
29%
21%
1,209
2%
47%
24%
27%
328
100%
Minimum
Actual
Maximum
with actual
share price
growth
Minimum
Actual
V REMUNERATION
119
Total remuneration in respect of the Directors in the year to 31 March 2020 was as follows:
Fixed
Basic
salary/fees
£000
Benefits 1
£000
Sub-total
£000
Annual
cash
bonus
£000
Deferred
bonus
shares
£000
1,665
2%
47%
23%
28%
468
100%
2,187
2%
48%
29%
21%
Minimum
Actual
Maximum
with actual
share price
growth
1,599
2%
48%
30%
20%
Maximum
with actual
share price
growth
Year to 31 March 2020
Executive Directors
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Non-Executive Directors
Richard Grant
Sue Clayton
Richard Cotton
Sue Farr 5
Joe Lister
Former Directors
Michael O’Donnell 6
Michael Slade 6
545
317
424
59
22
42
604
339
466
1,286
123
1,409
128
58
70
39
55
350
17
44
61
–
–
–
–
–
–
–
16
16
128
58
70
39
55
350
17
60
77
Variable
Share 3,4
awards
£000
1,083
643
890
622
371
467
1,460
2,616
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Share
Incentive
Plan 2
£000
Sub-total
£000
Total
£000
7
7
7
21
–
–
–
–
–
–
–
–
–
1,712
1,021
1,364
4,097
2,316
1,360
1,830
5,506
–
–
–
–
–
–
–
–
–
128
58
70
39
55
350
17
60
77
1,460
2,616
21
4,097
5,933
–
–
–
–
–
–
–
–
–
–
–
–
–
–
GERALD KAYE
TIM MURPHY
MATTHEW BONNING-SNOOK
Basic salary & benefits
Bonus
PSP
Share price growth
Total
1,697
139
1,836
DIRECTORS’ REMUNERATION
Total remuneration in respect of the Directors in the year to 31 March 2021 was as follows:
Fixed
Basic
salary/fees
£000
Benefits 1
£000
Sub-total
£000
Annual
cash
bonus
£000
Deferred
bonus
shares
£000
Year to 31 March 2021
Executive Directors
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Non-Executive Directors
Richard Grant
Sue Clayton
Richard Cotton
Sue Farr
Joe Lister
545
317
424
45
11
44
590
328
468
493
287
383
1,286
100
1,386
1,163
150
58
70
55
58
391
–
–
–
–
–
–
–
150
58
70
55
58
391
–
–
–
–
–
–
1 Benefits include the provision of a car, fuel allowance, private medical cover, life assurance and permanent health insurance. Significant individual benefits include £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 123.
3 PSP awards are included at their actual vesting values in June 2020 of 358.50p. The table included in the 2020 Financial Statements included share awards at the average
share price over the 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 2016
are included at their actual vesting price of 354.50p
4 The PSP award values include share price appreciation totalling £113,000 for Gerald Kaye, £69,000 for Tim Murphy and £92,000 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.
Variable
Share 3,4
awards
£000
1,035
587
807
2,429
–
–
–
–
–
–
Share
Incentive
Plan 2
£000
Sub-total
£000
Total
£000
7
7
7
21
–
–
–
–
–
–
1,535
881
1,197
3,613
–
–
–
–
–
–
2,125
1,209
1,665
4,999
150
58
70
55
58
391
2,429
21
3,613
5,390
–
–
–
–
–
–
–
–
–
–
–
Total
1,677
100
1,777
1,163
1 Benefits include the provision of a car, fuel allowance, private medical cover, life assurance and permanent health insurance. Significant individual benefits include £25,000
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 123.
3 Value of PSP awards based on average share price over three months to 31 March 2021 of 387.63p. Dividend shares awarded to Directors on 29 June 2020 under the terms
of the Annual Bonus Scheme 2016 are included at their vesting price of 320.00p.
4 The PSP award values include share price appreciation totalling £32,000 for Gerald Kaye, £19,000 for Tim Murphy and £25,000 for Matthew Bonning-Snook.
CORPORATE GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021 120
V REMUNERATION
DIRECTORS’ REMUNERATION REPORT
CONTINUED
V REMUNERATION
121
Weighting
Threshold
target
50.00%
-1.65%
Stretch
target
1.60%
Outcome
% of bonus
payable
6.99%
50.00%
NAV
(fully diluted
triple net)
Metric
Performance condition
DETERMINATION OF ANNUAL BONUS OUTCOME
The 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 and provide each Director with a percentage
payout of their maximum bonus, capped at 150% of basic salary. This is set out in the second table below.
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.
Strategic
and ESG
1. Pipeline of schemes/projects
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.
2. Equity
Obtaining material “equity” from third party investors to fund
Helical’s schemes/projects. Equity to include funds from any source
eg individual project equity participation, strategic partners
or shareholders.
3. Lettings
Base Target – let 50% of both Kaleidoscope (75% of potential award)
and Trinity (25%).
Stretch Target – let 100% of both Kaleidoscope (75% of potential award)
and Trinity (25%), with a minimum 90% occupancy underpin
25.00%
5.00%
10.00%
3.64%
0.00%
6.67%
6.67%
6.66%
Not
Achieved
0.00%
Not
Achieved
0.00%
5.33%
Kaleidoscope
100% let
Trinity
46% let
4. Overheads
3.33%
-5.0%
-7.5%
-11.7%
3.33%
If Targets 1 and 2 met, reduce annualised overheads by 2.5% (base)
or by 5.0% (stretch). If Targets 1 and 2 not met, reduce annualised
overheads by 5.0% (base) or by 7.5% (stretch).
5. ESG
1.67%
Make tangible progress in implementing the Company’s sustainability
strategy and improvements towards best practice, for a company of
Helical’s size, in ESG matters:
- GRESB Target 3* (versus 2* awarded in 2020)
- EPRA Sustainability BPR Target Silver (versus Bronze awarded
in 2020)
GRESB
Target Met
1.67%
EPRA Target
Met
Total
100.00%
60.33
The total annual bonus for the year ended 31 March 2021 is set out below:
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Maximum
bonus
payable
(150% basic
salary)
£000
Bonus
outcome
%
Bonus
payable
£000
817
475
636
60.3%
60.3%
60.3%
493
287
383
Basic
salary
£000
545
317
424
Cash
£000
493
287
383
Deferred
shares
£000
–
–
–
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.
PSP AWARDS VESTING IN 2021
The PSP award granted on 1 June 2018 will vest after 1 June 2021. The expected vesting percentage is as follows:
Net Asset Value Growth
10% of this part of an award vests for pre-dividend
compound NAV growth of 5.0% pa increasing
pro-rata to 100% of this part of an award vesting
for pre-dividend compound NAV growth of 12.5%
pa
Total Property Return v MSCI Central London
Offices 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
Weighting
33.33%
Threshold
target
5.0% pa
Stretch target
12.5% pa
Actual
6.0%
% vesting
7.4%
33.33%
Median
2.8%
33.33%
Median
-27.4%
Upper
quartile
4.8%
Upper
quartile
4.1%
8.9%
33.3%
25.2%
33.3%
100.0%
74.0%
TPR
TSR
Total
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 awarded 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
343,333
199,800
267,066
89,301
51,968
69,464
254,032
147,832
197,602
Estimated value
at vesting1
£’000
985
573
766
1 The share price used to calculate the expected value at vesting was 387.63p, based on the average share price over the three months to 31 March 2021.
The share awards presented in the remuneration table for the year to 31 March 2020 on page 119 are based on the 2014 PSP awards
granted on 6 June 2017. The three-year performance period to 31 March 2020 showed that the net asset value per share, calculated
in accordance with the terms of the 2014 PSP, had increased by 5.9% pa, below the lower threshold of 7.5% 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 7.0%. The TSR of the Company during the period was
57.5% compared to the median of plus 39.6% and upper quartile of 58.0%. Therefore, 65.83% of the shares vested in total. The share
price used to calculate the expected value at vesting for the 2017 PSP awards in the 2020 Annual Report was 439.87p (based on
the average share price over the three months to 31 March 2020). The actual share price at vesting on 10 June 2020 was 358.50p
and the comparative figures reflect these actual vesting share prices.
PAYMENTS FOR LOSS OF OFFICE (AUDITED)
No payments were made to Directors in the year for loss of office or to past Directors.
STATEMENT OF IMPLEMENTATION OF REMUNERATION POLICY FOR THE YEAR TO 31 MARCH 2022
This Annual Report on Remuneration is required, under the provisions of the Act, to include a statement on the implementation of
the Remuneration Policy in the year to 31 March 2022. To assist Shareholders to understand the Group’s overall remuneration, we
have included this information in the Remuneration at-a-glance section on pages 104 to 105 above.
CORPORATE GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021 122
V REMUNERATION
DIRECTORS’ REMUNERATION REPORT
CONTINUED
OTHER REMUNERATION MATTERS
This section is unaudited unless stated otherwise.
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 2021 amounted to £45,152 (2020: £20,951). Fees are
charged on a time plus disbursements basis.
RELATIVE IMPORTANCE OF THE SPEND ON PAY
The table below compares the expenditure and percentage change in that expenditure between 2020 and 2021, to the other key
financial metrics of distributions to Shareholders and the net asset value of the Group.
Staff costs
Distributions to Shareholders1
Net asset value of the Group
1 In respect of the financial year to which they relate.
2021
£000
8,364
12,248
608,161
2020
£000
9,075
10,437
598,689
Change
%
-7.8%
+17.4%
+1.6%
SHAREHOLDER VOTING AT THE LAST AGM
Details of the 2020 advisory Annual Report on Remuneration vote and the 2018 binding Remuneration Policy vote were as follows:
2020 Annual Report on Remuneration
121,265,710
99,247,053
2018 Remuneration Policy
118,610,741
89,918,397
Issued
For
%
99.4
97.0
Against
609.358
2,736,254
%
0.6
3.0
Withheld
Total
1,355,641
101,212,052
12,860
92,667,511
The Committee was pleased to note the level of Shareholder support for the Annual Report on Remuneration last year.
DIRECTORS’ SHAREHOLDINGS (AUDITED)
Legally
owned
31.3.20
Legally
owned
31.3.21
Share
Incentive Plan
unrestricted
31.3.21
Executive Directors
Gerald Kaye
Tim Murphy
1,816,747
2,062,803
662,981
607,816
Matthew Bonning-Snook
1,072,546
1,273,845
Non-Executive Directors
Richard Grant
Richard Cotton
Sue Clayton
Sue Farr1
Joe Lister
15,000
25,000
–
6,000
3,200
15,000
25,000
–
6,000
3,200
1 The shareholding of Sue Farr is held by a connected person.
42,704
22,296
42,281
–
–
–
–
–
Beneficially
held total
31.3.21
2,105,507
630,112
1,316,126
15,000
25,000
–
6,000
3,200
Deferred
shares
31.3.21
343,057
124,776
250,707
–
–
–
–
–
Share
Incentive Plan
restricted
31.3.21
PSP
awards
unvested
31.3.21
20,146
17,281
20,088
1,090,110
634,411
847,947
–
–
–
–
–
–
–
–
–
–
The three Executive Directors of Helical have an average length of service of over 26 years and have built up a shareholding during
that time of circa 4.1m shares with a market value at 31 March 2021 of circa £15.7m at the weighted average share price for the three
months to 31 March 2021 of 387.63p.
DIRECTORS’ SHARE INTERESTS AND SHAREHOLDING GUIDELINES (AUDITED)
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
1 Salaries as at 31 March 2021.
2 Share ownership guideline is 500% of salary.
3 Value as per the weighted average share price for the three months to 31 March 2021 of 387.63p.
Salary1
£
544,750
317,050
423,750
Share
ownership
guideline2
£
2,724,000
1,585,000
2,119,000
Value of
beneficially
held shares3
£
8,162,000
2,443,000
5,102,000
Ratio of
value of
shares held
to salary
%
1,498
770
1,204
V REMUNERATION
123
PSP AWARDS GRANTED IN THE YEAR (AUDITED)
The following conditional awards were granted on 10 June 2020 at 358.50p under the terms of the 2014 PSP:
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Basis of award
(% of salary)
Share awards
number
250%
250%
250%
379,881
221,094
295,502
Face value
of award
£000
1,362
793
1,059
Vesting at
threshold
10%
10%
10%
Vesting at maximum
Performance period
100%
100%
100%
3 years to 31 March 2023
3 years to 31 March 2023
3 years to 31 March 2023
Details of the performance targets attached to the awards are set out on page 114.
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
01.06.18
at 375.0p
Shares awarded
03.06.19
at 362.5p
Shares awarded
10.06.20
at 358.5p
343,333
199,800
267,066
366,896
213,517
285,379
379,881
221,094
295,502
Total shares
awarded
1,090,110
634,411
847,947
It is currently expected that 74.0% of the shares awarded on 1 June 2018, 50.0% of the shares awarded on 3 June 2019 and 50.0%
of the shares awarded on 10 June 2020 will vest.
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%
67%
67%
29%
33%
12%
8%
33%
33%
Nil
Nil
33%
33%
33%
33%
33%
33%
33%
33%
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
MSCI
NAV
TSR
The 2004 PSP operated with two vesting conditions. The TSR condition was added to the 2014 PSP.
HELICAL BAR 2002 APPROVED SHARE INCENTIVE PLAN (AUDITED)
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 during the period and as at 31 March 2021,
were as follows:
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
10 June
2020
at 358.50p
29 June
2020
at 320.00p
28 July
2020
at 307.00p
17 September
2020
at 265.00p
4 December
2020
at 390.00p
31 December
2020
at 373.50p
18 March
2021
at 416.50p
1,004
1,004
1,004
423
423
423
1,166
722
1,156
510
510
510
345
345
345
448
282
445
324
324
324
Shares held by the Trustees of the Plan at 31 March 2021 were 560,496 (2020: 560,496).
CORPORATE GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021 124
V REMUNERATION
DIRECTORS’ REMUNERATION REPORT
CONTINUED
Shares allocated to, or purchased on behalf of, the Directors, which remain in their ownership at 31 March 2021, were as follows:
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Unrestricted
Restricted
As at 31 March
2021
42,704
22,296
42,281
20,146
17,281
20,088
62,850
39,577
62,369
1 Unrestricted shares are those shares allocated to Directors that have met their minimum five year ownership qualifying period.
2. Restricted shares are those shares allocated to Directors that have not met their minimum five year ownership qualifying period.
HELICAL ANNUAL BONUS SCHEME – DEFERRED SHARES (AUDITED)
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 bonus payments up to 100% of salary are 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 2021, are as noted in the table below:
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Deferred shares
1 April 2020
2020 bonus
award
10 June 2020
2017 award
vesting
29 June 2020
Deferred shares
31 March 2021
324,961
63,798
247,672
173,578
103,412
130,236
(155,482)
(42,434)
(127,201)
343,057
124,776
250,707
Expected
2021
award
Dividend shares
awarded on
2017 award
vesting
–
–
–
15,628
4,265
12,785
SHARE PRICE PERFORMANCE AND TOTAL SHAREHOLDER
RETURN (TSR)
The market price of the ordinary shares of Helical plc at 31 March
2021 was 413.50p (2020: 350.00p). This market price varied
between 246.00p and 426.00p and at an average of 345.00p
during the year.
The Total Shareholder Returns for a holding in the Group’s
shares in the three and 10 years to 31 March 2021 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 2021
The graph below showing the relative performance of Helical
during the three years to 31 March 2021 matches the
performance period for the 2018 PSP award granted on 1 June
2018 and which will vest after 1 June 2021.
TOTAL SHAREHOLDER RETURN
150
125
100
75
50
25
0
This graph shows the value, by 31 March 2021, of £100 invested
in Helical on 31 March 2018, compared with the value of £100
invested in the FTSE 350 Supersector Real Estate Index.
TSR – TEN YEARS TO 31 MARCH 2021
The graph below shows the base position, at 31 March 2011,
from which subsequent performance is measured, as required
by the Regulations.
TOTAL SHAREHOLDER RETURN
250
200
150
100
50
0
Mar
’11
Mar
’12
Mar
’13
Mar
’14
Mar
’15
Mar
’16
Mar
’17
Mar
’18
Mar
’19
Mar
’20
Mar
’21
Helical
FTSE 350 Supersector Real Estate Index
Source: Datastream (Thomson Reuters).
This graph shows the value, by 31 March 2021, of £100 invested
in Helical on 31 March 2011, compared with the value of £100
invested in the FTSE 350 Supersector Real Estate Index.
Mar
2018
Mar
2019
Mar
2020
Mar
2021
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 above, to the remuneration of the Chief Executive, the table opposite presents
single figure remuneration for the Chief Executive over the period, since 1 April 2011, together with past annual bonus pay-outs and
the vesting of long-term incentive share awards:
V REMUNERATION
Year ended
31 March 2021
31 March 2020
31 March 2019
31 March 2018
31 March 2017
31 March 2016
31 March 2015
31 March 2014
31 March 2013
31 March 2012
Name
Gerald Kaye
Gerald Kaye
Gerald Kaye
Gerald Kaye
Gerald Kaye
Michael Slade
Michael Slade
Michael Slade
Michael Slade
Michael Slade
125
Total
remuneration
£000
Annual bonus
(% of max
pay-out)
PSP
(% of max
vesting)
2,125
2,316
1,732
2,209
2,6353
3,867
5,534
3,343
1,523
541
60
761
91
752
100
100
100
100
65
–
74
66
33
46
66
100
100
62
–
–
1 85% before the application of negative discretion by the Committee.
2 100% before the application of negative discretion by the Committee.
3 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.
COMPARISON OF CHANGES IN THE REMUNERATION OF THE BOARD TO THE GROUP’S OTHER EMPLOYEES
The percentage change in the remuneration of each member of the Board and for the average of all other employees in the Group,
between 2020 and 2021, was as follows:
Executive Directors
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Non-Executive Directors
Richard Grant2
Richard Cotton
Sue Clayton
Sue Farr3
Joe Lister4
Base
salary/fees
0.0%
0.0%
0.0%
17.2%
0.0%
0.0%
41.0%
5.5%
Benefits
-23.2%
-46.7%
4.0%
n/a
n/a
n/a
n/a
n/a
Annual
Bonus
-20.8%
-22.6%
-17.9%
n/a
n/a
n/a
n/a
n/a
Average of all other employees
0.8%
7.6%
-5.0%
1 The remuneration of Directors used to calculate the percentage change in base salary/fees, benefits and share incentive plan and annual bonus, is taken from the tables
of Directors’ remuneration on pages 118 and 119.
2 The percentage increase in the fees payable to Richard Grant reflects his appointment as Chairman at the 2019 AGM.
3 The percentage increase in the fees payable to Sue Farr reflects her first full year as a member of the Board since her appointment on 5 June 2019 and her appointment
as Chair of the Remuneration Committee at the 2020 AGM.
4 The percentage increase in the fees payable to Joe Lister reflects his appointment as Chair of the Audit and Risk Committee at the 2019 AGM.
CHIEF EXECUTIVE PAY RATIO
As Helical has fewer than 250 employees, there is no requirement to disclose the Chief Executive pay ratio. However, given
the Committee’s commitment to transparency and good governance, this information is provided on a voluntary basis.
The table below compares the 2021 single total figure of remuneration for the Chief Executive, as shown in the table on page 104,
with the Group’s other employees paid at the 25th, 50th and 75th percentiles:
Remuneration
Ratio of CEO single figure remuneration to the Group’s other employees at each percentile
Other employees’ total pay and benefits
Other employees’ salary
25th percentile
50th percentile
75th percentile
27:1
£80,124
£58,375
23:1
£93,618
£70,000
7:1
£290,860
£137,813
This is the first year we have published our pay ratios, which have been calculated under Option A. All non-salary remuneration
has been included. Joiners, leavers and employees on statutory leave (eg maternity) have been excluded from this comparison.
Total pay and benefits have been calculated on the same basis as for the Chief Executive single figure shown on page 104 and
include annual salary, taxable benefits, free and matching shares allocated under the terms of the Group’s Share Incentive Plan,
annual bonus awarded in respect of the year to 31 March 2021, taxable share awards vesting under the terms of the Group’s
Performance Share Plan, and employer pension contributions to employees’ pension arrangements.
Approved by the Board on 25 May 2021 and signed on its behalf.
SUE FARR
Chair of the Remuneration Committee
CORPORATE GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021 126
REPORT OF THE DIRECTORS
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 to 81 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 and Consolidated Statement of Comprehensive
Income on page 136. An interim dividend of 2.70p (2019: 2.70p)
was paid on 31 December 2020 to Shareholders on the
Shareholder register on 4 December 2020. A final dividend
of 7.40p (2020: 6.00p) per share is recommended for approval
at the Annual General Meeting (“AGM”) to be held on 15 July
2021 and, if approved, will be paid on 26 July 2021 to
Shareholders on the register on 25 June 2021. The total ordinary
dividend declared and paid in the year of 8.70p (2020: 10.20p)
per share amounted to £10,528,000 (2020: £12,219,000).
CORPORATE GOVERNANCE
During the year ended 31 March 2021 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 all the Provisions of the Code in full. The
application of the Code’s Principles can be evidenced in the
context of the particular circumstances of the Group and how the
Board has set the Group’s purpose and strategy, met objectives
and achieved outcomes through the decisions it has taken. Please
see page 88 of the Corporate Governance Report 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 84 to 87. All the Directors will be offering themselves for
re-election at the AGM on 15 July 2021 and their continuing
contribution to the Company’s long-term sustainable success
is explained within each individual Director’s biography. 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 103 to 125. Details of
the Directors’ interests in the ordinary shares of the Company
are shown on page 122.
GOING CONCERN
In accordance with Provision 30 of the Code, the Board is
required to report on whether it considers it appropriate to
adopt the going concern basis of accounting. In considering
this requirement, the Directors took into account the matters
set out in the Group’s Viability Statement on page 54. Having
due regard to the matters referenced in Note 1 to the financial
statements, the Directors were able to conclude that they have
a reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for at
least the next 12 months, and have continued to adopt the going
concern basis of accounting when preparing the financial
statements for the year ended 31 March 2021.
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 interests.
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 2021.
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 35. Interest capitalised on the
Group property portfolio is shown in Notes 14 and 19. Long-term
incentive schemes are explained in the Directors’ Remuneration
Report on pages 103 to 125.
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.
SUBSTANTIAL SHAREHOLDINGS
As at 14 May 2021, 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
Schroder Investment Management
Jupiter Asset Management
M&G Investments
Dimensional Fund Advisors
Vanguard Group
Aviva Investors
* Holding as at 23 April 2021.
Shares at
14/05/2021
10,994,464
10,329,751
9,746,144
7,641,938
6,732,707
6,294,828
5,838,168
5,201,274
4,157,672
3,961,092
% Holding
9.07%
8.52%
8.04%
6.30%*
5.55%
5.19%
4.81%
4.29%
3.43%
3.27%
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, including
the outcomes of such engagement, please see pages 78 and 79.
127
CULTURE, EMPLOYMENT AND ENVIRONMENTAL MATTERS
The corporate Culture of the Company, articulated through the
Company Purpose and Values, is discussed on pages 74 and 75
of the Strategic Report. As part of its leadership responsibilities,
the Board continually monitors the Culture of the business. The
role of the designated workforce engagement Non-Executive
Director is key with respect to the monitoring of the Helical
Culture and more information about this role can be found in the
Workforce Engagement section on pages 80 and 81. For details
of all the methods used by the Board to monitor and sustain the
corporate Culture of Helical during the reporting period, please
see pages 76 and 77 of the Strategic Report.
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 95 and 96.
All employee candidates are considered fairly and without
prejudice or discrimination and the Company affords equal
opportunities to all its employees, irrespective of sex, race, colour,
disability, sexual orientation, religious beliefs or marital status
(please see details of our Employment Policy on page 96).
Information in respect of the Group’s employment and
environmental matters as well as greenhouse gas reporting is
contained in the Sustainability Report on pages 60 to 71.
POST BALANCE SHEET EVENTS
Details of post balance sheet events are set out in Note 32 to the
financial statements.
GROUP STRUCTURE
Details of the Group’s subsidiary undertakings are disclosed
in Note 37 to the financial statements.
SHARE CAPITAL
Details of the Company’s issued share capital are shown in Note
26 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 2021 Annual
General Meeting (“AGM”) specifies deadlines for exercising
voting rights and appointing a proxy or proxies to vote in
relation to resolutions to be passed at the meeting. There are
no restrictions on voting rights other than as specified by the
Company’s Articles of Association.
CORPORATE GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021 128
REPORT OF THE DIRECTORS
CONTINUED
DIRECTORS’ RESPONSIBILITIES STATEMENT
129
PURCHASE OF OWN SHARES
The Company was granted authority at the 2020 AGM 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 2021 AGM, at which a resolution will be proposed to
renew this authority.
AMENDMENT OF ARTICLES OF ASSOCIATION
The Company’s Articles of Association (“Articles”) 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.
During the reporting period, the Board approved updates to the
Company’s Articles and the proposed updates to the Articles
will be put to the Shareholders for approval at the 2021 AGM.
The updated Articles are being proposed for approval to ensure
that the Company’s Articles are in line with UK law, regulation
and best practice.
ANNUAL GENERAL MEETING
It is intended that the Annual General Meeting of the Company
will be held on 15 July 2021 at 11:30 am at Butchers’ Hall, 87
Bartholomew Close, London EC1A 7EB. The special business at
the 2021 AGM will include resolutions dealing with the authority
to issue shares, the disapplication of pre-emption rights, the
authority for the Company to purchase its own shares, the
authority to call General Meetings on not less than 14 clear days’
notice and the approval of the updated Articles of Association
of the Company. 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
The Board is continuing to monitor developments in connection
with Coronavirus (Covid-19). On the basis of public health
guidance and legislation from the UK Government issued at the
date of this Notice of Annual General Meeting, the intention is
for the Annual General Meeting to be held in person in line with
appropriate restrictions based on the guidance in place at the
time. However, should circumstances change prior to the date
of the Annual General Meeting meaning that it cannot be held as
planned, the Board may need to revise its position and make any
necessary amendments to arrangements for the Annual General
Meeting from those contained in this Notice of Annual General
Meeting. Any such amendments will be notified to shareholders
by an RIS announcement and will be posted on the Company’s
website at www.helical.co.uk as early as possible prior to the date
of the Annual General Meeting.
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 2021 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.
By Order of the Board
JAMES MOSS FCA
Company Secretary
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
are required to prepare the Group financial statements in
accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006
and have also chosen to prepare the Parent Company financial
statements under International Accounting Standards in
conformity with the requirements of the Companies Act 2006.
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 of the Company and of the profit or loss of the
Company for that period. In preparing these financial statements,
International Accounting Standard 1 requires that Directors:
• properly select and apply accounting policies;
• present information, including accounting policies, in a manner
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with
International Accounting Standards in conformity with the
requirements of the Companies Act 2006, 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; and
• the Annual Report and 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.
that provides relevant, reliable, comparable and
understandable information;
This responsibility statement was approved by the Board
of Directors on 25 May 2021 and is signed on its behalf by:
TIM MURPHY
Finance Director
25 May 2021
• provide additional disclosures when compliance with the
specific requirements in International Accounting Standards
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.
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.
CORPORATE GOVERNANCE REPORTHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021 130
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF HELICAL PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
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 2021 and of the Group’s
profit for the year then ended;
• have been properly prepared in accordance with International Accounting Standards in conformity with the requirements
of the Companies Act 2006; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
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 37.
The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and
International Accounting Standards in conformity with the requirements 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.
The non-audit services provided to the Group for the year are disclosed in Note 6 to the financial statements. 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.
3. SUMMARY OF OUR AUDIT APPROACH
Key audit matters
The key audit matter that we identified in the current year was:
• Investment property valuation
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’s financial statements was £10.0m which was determined on the basis
of 1% of the total assets.
We performed an audit of the financial statements of the Parent Company and the Group, including the audit
work on the Barts Square and 33 Charterhouse Street joint ventures.
Significant changes
in our approach
There have been changes to our prior year key audit matters with “Going concern and covenant compliance”
no longer being considered a key audit matter, due to reduced judgement around the estimation of the impact
of the Covid-19 pandemic at 31 March 2021 compared to the previous year.
131
4. CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group’s and Parent Company’s ability to continue to adopt the going concern
basis of accounting included:
• Challenging the judgements and assumptions applied by management in their going concern assessment and associated
forecasts of financial performance and financial position, assessing the reasonableness of assumptions regarding uncertain
cash inflows and the timing and quantum of cash outflows;
• Testing of the mechanical accuracy of the model utilised;
• Assessing 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;
• Evaluating the key loan documentation to understand the principal terms, including financial covenants, and assessment review of
the Group’s existing and forecast compliance with these (including testing of the mechanical accuracy of management’s covenant
calculations and consistency with the contractual definitions);
• Assessing the appropriateness of the headroom available on covenants and comparison of management’s projections with market
information available associated with future income and property asset values; and
• Evaluating the appropriateness of 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.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and Parent Company’s ability to continue as a going concern
for a period of at least 12 months from when the financial statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report.
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.
5.1. INVESTMENT PROPERTY VALUATION
Key audit matter
description
At 31 March 2021, the Group held wholly owned investment property valued at £740.2m (31 March 2020: £819.6m).
Investment properties are held at fair value on the Group Balance Sheet. During the year, a net valuation gain of
£19.4m (31 March 2020: £38.4m) was recorded. Investment property valuation represents the most significant area
of estimation and judgement within the Group’s financial statements, which is why we consider this to be a key audit
matter 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.
See also key sources of estimation uncertainty in Note 36, the investment properties in Note 14 of the financial
statements and the Audit and Risk Committee Report on page 100.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS
132
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF HELICAL PLC
CONTINUED
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 Chair of the Property Valuations Committee. Management’s process for challenging the appropriateness
of property valuations has been assessed.
TOTAL SHAREHOLDER RETURN
Total assets
£1,021.0m
We held 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 assessed the movements in the key judgements and
benchmarked the inputs against market data.
We assessed 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 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 assessed the valuation methodology being used and considered any departures from the Red Book guidance.
We have also tested the integrity of the model which is used by the external valuer.
We compared the property specific assumptions made to assess whether there is consistency within the portfolio
as well as consistency with related assumptions used in other estimates.
We have assessed the competence, objectivity and capabilities of the external valuers.
As part of our disclosures testing, we have assessed the appropriateness of the disclosures made in the financial
statements and considered if the specific disclosures in relation to the estimation, included those around key sources
of estimation uncertainty in Note 14, are considered reasonable.
Key observations
Based on our audit work, we are satisfied that the judgements and assumptions used in arriving at the fair value
of the Group’s property portfolio are appropriate and supported by the evidence obtained during the audit.
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
£10.0m (2020: £10.2m).
£5.7m (2020: £5.7m).
GROUP FINANCIAL STATEMENTS
PARENT COMPANY FINANCIAL STATEMENTS
Basis for determining
materiality
£1.7m (2020: £2.5m) for balances affecting the income
statement excluding valuation gains and tax.
1% of total assets (2020: 1% of total assets) The lower materiality
used for balances impacting the income statement, excluding
valuation gains and tax, was determined with reference to 5% of
the previous three years’ average profit before tax, as well as
consideration of the consistency of the % applied compared to
other financial statement measures, including revenue and net
assets (2020: 5% of profit before tax).
We changed our approach in the current year to take account
of the impact of the Covid-19 pandemic and the lower
profitability of the Group in the year.
1% of total assets (2020: 1% of total assets).
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 due
to the Parent Company being a holding company.
Average 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.
Group materiality
£10.0m
Component
materiality range
£1.6m to £5.7m
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
FINANCIAL
STATEMENTS
PARENT COMPANY
FINANCIAL
STATEMENTS
Performance
materiality
70% (2020: 70%) of
Group materiality.
70% (2020: 70%) of
Parent Company
materiality.
Basis and rationale
for determining
performance
materiality
In determining performance materiality, we
considered the low number of corrected and
uncorrected misstatements identified in prior
periods, as well as the quality of the Group’s
control environment, including the impact of
Covid-19 on the control environment; and 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 £0.5m
(2020: £0.5m), 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
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 financial statements.
We performed an audit of the financial statements of the Parent
Company and Group, which includes the audits of joint ventures.
Our audit approach covers 100% of the Group’s revenue, profit
before tax, and net assets.
The materiality range for the Barts Square and 33 Charterhouse
Street joint ventures is £1.6m to £3.0m. All work has been
performed by the Group engagement team.
133
8. OTHER INFORMATION
The other information comprises the information included in
the Annual Report, other than the financial statements and
our auditor’s report thereon. The Directors are responsible
for the other information contained within the Annual Report.
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.
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 course of 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 this
gives rise to a material misstatement in the financial statements
themselves. 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.
We have nothing to report in this regard.
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.
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.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS 134
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF HELICAL PLC
CONTINUED
11. EXTENT TO WHICH THE AUDIT WAS CONSIDERED
CAPABLE OF DETECTING IRREGULARITIES,
INCLUDING FRAUD
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud, is detailed below.
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; and
– the internal controls established to mitigate risks of fraud
or non-compliance with laws and regulations.
• the matters discussed among the audit engagement team
and relevant internal specialists, including real estate
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 the accuracy and potential manipulation of the
assumptions applied in determining the valuation of the
property portfolio. 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.
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.
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
provisions of relevant laws and regulations described as having
a direct effect on the financial statements;
• enquiring of management, the Audit and Risk Committee and
external legal counsel concerning actual and potential litigation
and claims;
• 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.
135
15. OTHER MATTERS WHICH WE ARE REQUIRED TO
ADDRESS
15.1. AUDITOR TENURE
Following the recommendation of the Audit and Risk
Committee, we were appointed by the Directors 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 three years, covering the years
ending 31 March 2019 to 31 March 2021.
15.2. 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).
16. 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
25 May 2021
13. CORPORATE GOVERNANCE STATEMENT
The Listing Rules require us to review the Directors’ statement
in relation to going concern, longer-term viability and that part
of the Corporate Governance Statement relating to the Group’s
compliance with the provisions of the UK Corporate Governance
Code specified for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with
the financial statements and our knowledge obtained during
the audit:
• the Directors’ statement with regards to the appropriateness
of adopting the going concern basis of accounting and any
material uncertainties identified;
• the Directors’ explanation as to its assessment of the Group’s
prospects, the period this assessment covers and why the
period is appropriate;
• the Directors’ statement on fair, balanced and
understandable;
• the Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks;
• the section of the Annual Report that describes the review
of effectiveness of risk management and internal control
systems; and
• the section describing the work of the Audit and Risk
Committee.
14. MATTERS ON WHICH WE ARE REQUIRED TO REPORT
BY EXCEPTION
14.1. ADEQUACY OF EXPLANATIONS RECEIVED AND
ACCOUNTING RECORDS
Under the Companies Act 2006 we are required to report
to you if, in our opinion:
• 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 this regard.
14.2. 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 this regard.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS 136
CONSOLIDATED INCOME STATEMENT
For the year ended 31 March 2021
CONSOLIDATED AND COMPANY BALANCE SHEETS
At 31 March 2021
137
Revenue
Cost of sales
Net property income
Share of results of joint ventures
Gross profit before net gain on sale and revaluation of investment properties
Loss on sale of investment properties
Revaluation of investment properties
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.
Year ended
31.3.21
£000
Year ended
31.3.20
£000
Notes
3
3
4
18
5
14
6
8
8
35
9
13
38,596
(12,987)
25,609
2,352
27,961
(1,341)
19,387
46,007
(14,416)
31,591
(14,079)
58
2,938
–
–
20,508
(2,631)
17,877
44,361
(13,161)
31,200
13,396
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
14.8p
14.5p
32.3p
31.7p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2021
Profit for the year
Exchange difference on retranslation of net investments in foreign operations
Total comprehensive income for the year
Year ended
31.3.21
£000
Year ended
31.3.20
£000
17,877
–
17,877
38,717
68
38,785
The exchange differences on retranslation of net investments in foreign operations will be reclassified to the Income Statement
on disposal.
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
14
16
17
18
35
19
20
21
22
23
24
24
35
23
22
10
26
Group
31.3.21
£000
740,207
5,362
–
79,953
171
825,693
448
–
40,427
154,448
195,323
Group
31.3.20
£000
819,573
6,007
–
80,818
86
Company
31.3.21
£000
–
5,362
208,583
–
–
Company
31.3.20
£000
–
6,007
208,272
–
–
906,484
213,945
214,279
852
1,417
40,382
74,586
117,237
–
–
293,935
68,026
361,961
575,906
–
–
300,315
56,918
357,233
571,512
1,021,016
1,023,721
(46,764)
(45,771)
(145,893)
(180,994)
(634)
(655)
–
(48,053)
(611)
–
(5,000)
(51,382)
(634)
–
–
(611)
–
(5,000)
(146,527)
(186,605)
(336,703)
(343,184)
(7,601)
(6,929)
–
(13,569)
(364,802)
(412,855)
(10,455)
(7,563)
(590)
(11,858)
(373,650)
(425,032)
–
–
–
–
(4,740)
(5,374)
–
(244)
(4,984)
–
(219)
(5,593)
(151,511)
(192,198)
608,161
598,689
424,395
379,314
1,478
107,990
164,316
7,478
291
326,608
608,161
1,465
103,522
171,464
7,478
291
314,469
598,689
1,478
107,990
–
7,478
1,987
305,462
424,395
1,465
103,522
–
7,478
1,987
264,862
379,314
The profit in the year for the Company was £51,128,000 (2020: £55,169,000).
The financial statements were approved by the Board and authorised for issue on 25 May 2021.
TIM MURPHY
Finance Director
Company number 156663
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS
138
139
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS
For the year ended 31 March 2021
CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY
At 31 March 2021
Cash flows from operating activities
Profit before tax
Depreciation
Revaluation surplus on investment properties
Loss on sales of investment properties
Letting cost amortised
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 payments charge
Share settled bonus
Share of results of joint ventures
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 received/(paid)
Cash flows from operating activities
Cash flows from investing activities
Additions to investment property
Net proceeds from sale of investment property
Investment in joint ventures and subsidiaries
Return on investment in joint ventures
Dividends from joint ventures
Dividends from subsidiaries
Sale of plant and equipment
Purchase of owner occupied property, plant and equipment
Net cash generated from/(used by) investing activities
Cash flows from financing activities
Borrowings drawn down
Borrowings repaid
Lease liability payments
Sale of own shares
Shares issued
Equity dividends paid
Net cash used by financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
Group
31.3.21
£000
20,508
791
(19,387)
1,341
19
(14)
14,021
(2,938)
–
2,031
–
Group
31.3.20
£000
43,030
807
(38,351)
1,272
–
(11)
14,755
7,651
(468)
2,814
1,485
(2,352)
(13,396)
–
–
–
14,020
(2,554)
404
3,758
15,628
(12,902)
58
1,219
(11,625)
4,003
(16,306)
113,207
(7,414)
–
10,266
–
23
(156)
99,620
12,339
(25,000)
(610)
25
13
(10,528)
(23,761)
79,862
74,586
154,448
–
–
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
Company
31.3.21
£000
51,907
791
–
–
–
(14)
577
–
–
–
–
–
6,294
(60,415)
–
(860)
944
–
16,893
16,977
(590)
13
1,227
650
17,627
–
–
Company
31.3.20
£000
55,531
807
–
–
–
(11)
1,317
–
270
–
–
–
3,296
(62,140)
–
(930)
(3,563)
–
(11,141)
(15,634)
(1,773)
358
(4,382)
(5,797)
(21,431)
–
–
(3,150)
(29,560)
–
6,066
2,355
23
(155)
5,139
–
(5,000)
(611)
–
4,481
(10,528)
(11,658)
11,108
56,918
68,026
–
–
48,598
27
(18)
19,047
5,000
(100,000)
(588)
–
2,224
(12,219)
(105,583)
(107,967)
164,885
56,918
Group
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
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
Profit on sale of shares
Dividends paid
At 31 March 2021
Share
capital
£000
1,459
1,459
–
Share
premium
£000
101,304
101,304
–
Revaluation
reserve
£000
131,050
131,050
–
1,459
101,304
131,050
–
–
–
6
–
–
–
–
–
–
–
–
2,218
–
–
–
–
–
–
38,351
2,063
–
–
–
–
–
–
Capital
redemption
reserve
£000
Other
reserves
£000
7,478
7,478
–
7,478
–
–
–
–
–
–
–
–
–
291
291
–
291
–
–
–
–
–
–
–
–
–
Retained
earnings
£000
325,843
325,843
Total
£000
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
–
–
–
13
–
–
–
–
–
–
–
–
–
4,468
–
–
–
–
–
–
–
19,387
(26,535)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
17,877
17,877
(19,387)
26,535
–
2,031
66
(3,335)
(1,145)
25
–
–
4,481
2,031
66
(3,335)
(1,145)
25
(10,528)
(10,528)
1,478
107,990
164,316
7,478
291
326,608
608,161
For a breakdown of Total Comprehensive Income see the Consolidated Statement of Comprehensive Income.
The adjustment against retained earnings of £2,031,000 (31 March 2020: £2,814,000) adds back the share-based payments charge
in accordance with IFRS 2 Share Based Payments.
There were net transactions with owners of £8,405,000 (31 March 2020: £6,973,000) made up of the Performance Share Plan
credit of £2,031,000 (31 March 2020: £2,814,000) and related deferred tax credit of £66,000 (31 March 2020: £483,000), dividends
paid of £10,528,000 (31 March 2020: £12,219,000), issued share capital of £13,000 (31 March 2020: £6,000) and corresponding
share premium of £4,468,000 (31 March 2020: £2,218,000), share settled Performance Share Plan awards charge of £3,335,000
(31 March 2020: £1,349,000), the share settled bonus awards charge of £1,145,000 (31 March 2020: credit of £1,074,000) and profit
on sale of shares credit of £25,000 (31 March 2020: £nil).
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS 140
141
CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY
CONTINUED
At 31 March 2021
NOTES TO THE FINANCIAL STATEMENTS
Company
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
Total comprehensive income
Issued share capital
Dividends paid
At 31 March 2021
Share
capital
£000
1,459
1,459
–
Share
premium
£000
101,304
101,304
–
1,459
101,304
–
6
–
–
2,218
–
Capital
redemption
reserve
£000
7,478
7,478
–
7,478
–
–
–
Other
reserves
£000
1,987
1,987
–
Retained
earnings
£000
222,460
222,460
Total
£000
334,688
334,688
(548)
(548)
1,987
221,912
334,140
–
–
–
55,169
–
55,169
2,224
(12,219)
(12,219)
1,465
103,522
7,478
1,987
264,862
379,314
–
13
–
–
4,468
–
–
–
–
–
–
–
51,128
–
51,128
4,481
(10,528)
(10,528)
1,478
107,990
7,478
1,987
305,462
424,395
Total Comprehensive Income is made up of the profit after tax of £51,128,000 (2020: £55,169,000).
Included within changes in equity are net transactions with owners of £6,047,000 (2020: £9,995,000) being dividends paid
of £10,528,000 (2020: £12,219,000) and issued share capital of £4,481,000 (2020: £2,224,000).
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.
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 181. 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 81.
These financial statements have been prepared using the recognition and measurement principles of International Accounting
Standards in conforming with the Companies Act 2006.
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 and derivative financial instruments. The measurement bases and principal
accounting policies of the Group are set out in Note 36. These accounting policies are consistent with those applied in the year
to 31 March 2020, as amended to reflect any new standards.
The presentation of the Consolidated Income Statement has been amended to include Cost of Sales as a separate line item. This
replaces the Net Rental Income, Development Property Profit and Other Operating Income that was previously disclosed on the
Consolidated Income Statement. This revised disclosure does not change the previously reported Revenue, Gross Profit, Operating
Profit or Profit for the year.
Amendments to standards and interpretations which are mandatory for the year ended 31 March 2021 are detailed below however
none of these have had a material impact on the financial statements:
• Amendments to References to the Conceptual Framework in IFRS Standards (effective for periods beginning on or after
1 January 2020);
• Amendments to IFRS 3 Definition of 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 IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark Reform (effective for periods beginning on or after
1 January 2020).
The following standards, interpretations and amendments have been issued but are not yet effective and will be adopted at the
point they are effective:
• Amendment to IFRS 16 Covid-19-Related Rent Concessions (effective for periods beginning on or after 1 June 2020);
• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Report – Phase 2 (effective for periods
beginning on or after 1 January 2021);
• Amendments to IAS 16 Property, Plant and Equipment – Proceeds before Intended Use (effective for periods beginning on
or after 1 January 2022);
• Annual Improvements to IFRS Standards 2018-2020 (effective for periods beginning on or after 1 January 2022);
• Amendments to IFRS 3 Reference to the Conceptual Framework (effective for periods beginning on or after 1 January 2022);
• Amendments to IAS 37 Onerous Contracts – Cost of Fulfilling a Contract (effective for periods beginning on or after
1 January 2022);
• IFRS 17 Insurance Contracts (effective for periods beginning on or after 1 January 2023);
• Amendments to IFRS 17 Insurance Contracts (effective for periods beginning on or after 1 January 2023);
• Amendments to IAS 1 Classification of Liabilities as Current or Non-current (effective for periods beginning on or after
1 January 2023);
• Amendments to IAS 1 Classification of Liabilities as Current or Non-current – Deferral of Effective Date (effective for periods
beginning on or after 1 January 2023);
• Amendments to IFRS 4 Extension of the Temporary Exemption from Applying IFRS 9 (effective for periods beginning
on or after 1 January 2023);
• Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of Accounting Policies (effective for periods beginning
on or after 1 January 2023); and
• Amendments to IAS 8 Definition of Accounting Estimates (effective for periods beginning on or after 1 January 2023).
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS 142
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
143
1. BASIS OF PREPARATION CONTINUED
GOING CONCERN
The Directors have considered the appropriateness of adopting the going concern basis in preparing the financial statements.
Their assessment is based on forecasts for the period to 30 September 2022, with the potential impact of Covid-19 being an
area of focus and including severe downside scenarios on the principal risks and uncertainties.
The key assumptions used in the review are summarised below:
• The Group 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 £154.4m of cash and £7.8m of cash held in joint ventures with £55.1m available to drawdown on bank facilities
at 31 March 2021;
• The forecast shows that all bank facility financial covenants will be met throughout the review period;
• Based on the forecast for the next quarter, June 2021, rental income could fall by 18% before income covenants would come
under pressure;
• Property values could fall by 33% in the going concern period before loan to value covenants come under pressure; and
• The Group has also performed a severe stress test which shows that it could withstand receiving no rental income during the
going concern period (excluding the impact on income covenants which could be mitigated by cash deposit/repayment cures).
Based on this analysis, the Directors have adopted the going concern basis in preparing the accounts for the year ended 31 March 2021.
2. REVENUE FROM CONTRACTS WITH CUSTOMERS
Development property income
Service charge income
Other income
Total revenue from contracts with customers
Year ended
31.3.21
£000
Year ended
31.3.20
£000
1,700
8,841
48
10,589
3,849
8,790
91
12,730
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
Gross rental income
Development property income
Service charge income
Other revenue
Revenue
Cost of sales
Rents payable
Property overheads
Service charge expense
Development cost of sales
Development sales expenses
Expected credit loss (provision)/reversal
Other expense
Cost of sales
Investment
Year ended
31.03.21
£000
Development
Year ended
31.03.21
£000
Total
Year ended
31.03.21
£000
28,007
–
8,841
48
36,896
–
1,700
–
–
1,700
28,007
1,700
8,841
48
38,596
Investment
Year ended
31.03.20
£000
31,631
–
8,790
91
40,512
Development
Year ended
31.03.20
£000
Total
Year ended
31.03.20
£000
–
3,849
–
–
3,849
31,631
3,849
8,790
91
44,361
Investment
Year ended
31.03.21
£000
Development
Year ended
31.03.21
£000
Total
Year ended
31.03.21
£000
Investment
Year ended
31.03.20
£000
Development
Year ended
31.03.20
£000
Total
Year ended
31.03.20
£000
(232)
(2,810)
(8,841)
–
–
–
–
–
–
–
(1,018)
(4)
(82)
–
(232)
(2,810)
(8,841)
(1,018)
(4)
(82)
–
(178)
(3,615)
(8,790)
–
–
–
(3)
(11,883)
(1,104)
(12,987)
(12,586)
–
–
–
(1,744)
(29)
1,198
–
(575)
(178)
(3,615)
(8,790)
(1,744)
(29)
1,198
(3)
(13,161)
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.
Impairments of contract assets recognised in the year to 31 March 2021 amounted to £140,000 (2020: £nil).
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 £48,000 (2020: £91,000), revenue from services of £1,700,000 (2020:
£3,849,000), service charge income of £8,841,000 (2020: £8,790,000) and rental income of £28,007,000 (2020: £31,631,000).
Profit before tax
Net rental income
Development property profit
Share of results of joint ventures
Gain on sale and revaluation of investment properties
Segmental profit/(loss)
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
Investment
Year ended
31.03.21
£000
Development
Year ended
31.03.21
£000
Total
Year ended
31.03.21
£000
Investment
Year ended
31.03.20
£000
Development
Year ended
31.03.20
£000
Total
Year ended
31.03.20
£000
27,838
–
11,880
37,079
76,797
–
3,274
1,516
–
4,790
24,965
–
4,389
18,046
47,400
–
596
(2,037)
–
(1,441)
24,965
596
2,352
18,046
45,959
48
46,007
(14,416)
(14,079)
58
2,938
–
–
20,508
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
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS 144
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
3. SEGMENTAL INFORMATION CONTINUED
6. 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
31.03.21
£000
740,207
–
74,165
814,372
Development
31.03.21
£000
–
448
5,788
6,236
Investment
31.03.20
£000
819,573
–
73,643
893,216
Development
31.03.20
£000
–
852
7,175
8,027
Total
31.03.21
£000
740,207
448
79,953
820,608
5,362
171
40,427
–
154,448
1,021,016
(412,855)
608,161
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
All non-current assets are derived from the Group’s UK operations.
4. NET PROPERTY INCOME
Gross rental income
Head rents payable
Property overheads
Net rental income
Development property income
Development cost of sales
Sales expenses
Change in expected credit loss – (provision)/reversal of provision
Development property profit
Other revenue
Other expense
Net property income
Year ended
31.3.21
£000
Year ended
31.3.20
£000
28,007
(232)
(2,810)
24,965
1,700
(1,018)
(4)
(82)
596
48
–
31,631
(178)
(3,615)
27,838
3,849
(1,744)
(29)
1,198
3,274
91
(3)
25,609
31,200
Property overheads include lettings costs, vacancy costs and bad debt provisions. The amounts above include gross rental income
from investment properties of £28,007,000 (2020: £31,631,000) and net rental income from investment properties of £24,965,000
(2020: £27,838,000).
145
Year ended
31.3.21
£000
Year ended
31.3.20
£000
14,416
16,715
791
2,031
8,364
194
82
59
9
268
807
2,814
9,075
174
89
56
9
221
Year ended
31.3.21
£000
Year ended
31.3.20
£000
6,722
1,355
287
8,364
7,211
1,586
278
9,075
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
7. STAFF COSTS
Staff costs during the year:
Wages and salaries
Social security costs
Other pension costs
Details of the remuneration of Directors amounting to £5,390,000 (2020: £6,513,000) are included in the Directors’ Remuneration
Report on pages 103 to 125. The amount of the share-based payments charge relating to share awards made to Directors is
£1,410,000 (2020: £2,066,000). Included within wages and salaries are Directors’ bonuses of £1,163,000 (2020: £1,460,000) as
discussed in the Directors’ Remuneration Report on pages 103 to 125.
Other pension costs relate to payments to individual pension plans.
The average monthly number of employees of the Group during the year was 29 (2020: 29), all of whom are UK head office staff.
There were averages of five (2020: five) management, seven (2020: seven) Property Executives and 17 (2020: 17) administrative staff.
Of the staff costs of £8,364,000 (2020: £9,075,000), £8,364,000 is included within administrative expenses (2020: £9,075,000)
and £nil is included within development costs (2020: £nil).
Within administrative costs is the share-based payments charge for the year of £2,031,000 (2020: £2,814,000) which is not
included in the staff costs above.
5. LOSS ON SALE OF INVESTMENT PROPERTIES
Proceeds from the sale of investment properties
Sale expenses
Book value (Note 14)
Tenants’ incentives on sold investment properties
Loss on sale of investment properties
Year ended
31.3.21
£000
114,800
(1,593)
(111,883)
(2,665)
(1,341)
Year ended
31.3.20
£000
41,580
(1,320)
(41,481)
(51)
(1,272)
8. 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
31.3.21
£000
Year ended
31.3.20
£000
(10,697)
(3,382)
–
(14,079)
58
58
(12,147)
(5,698)
1,745
(16,100)
1,345
1,345
No interest has been capitalised in the year to 31 March 2021. In the prior year, interest has been capitalised in accordance with
IAS 23 Borrowing Costs.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS 146
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
9. 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% (2020: 19%)
Group corporation tax
Adjustment in respect of prior years
Current tax charge
Deferred tax
Capital allowances
Tax losses
Unrealised chargeable gains
Other temporary differences
Deferred tax charge
Total tax charge for the year
Year ended
31.3.21
£000
Year ended
31.3.20
£000
(1,218)
365
(853)
(398)
(794)
338
(924)
(1,778)
(2,631)
(470)
(19)
(489)
(879)
(201)
(4,691)
1,947
(3,824)
(4,313)
FACTORS AFFECTING THE TAX CHARGE FOR THE YEAR
The tax assessed for the year is lower than (2020: 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% (2020: 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 of joint ventures
Current tax charge adjustment in respect of prior periods
Movement on sale and revaluation not recognised through deferred tax1
Chargeable gain (in excess of)/less than 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
31.3.21
£000
20,508
(3,896)
Year ended
31.3.20
£000
43,030
(8,176)
(238)
591
171
–
447
365
93
(165)
–
–
–
(2,632)
(404)
293
279
–
2,545
(19)
4,053
266
(305)
(1,556)
(1,289)
(4,313)
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.
147
10. 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
31.3.21
Group
£000
(4,540)
1,024
(13,512)
3,459
(13,569)
31.3.20
Group
£000
(4,142)
1,818
(13,850)
4,316
(11,858)
31.3.21
Company
£000
(244)
31.3.20
Company
£000
(219)
–
–
–
–
–
–
(244)
(219)
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%. The Finance Bill 2021 proposed an increase
in the standard rate of tax from 19% to 25% on 1 April 2023. As this has not yet been substantively enacted this has not been reflected in these financial statements.
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 £66,000 (2020: £483,000) 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 £6,454,000 (31 March 2020: £6,457,000). 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 £4,540,000 (31 March 2020: £4,142,000) would be released and further capital allowances of £76,028,000
(31 March 2020: £87,274,000) would be available to reduce future tax liabilities.
11. DIVIDENDS PAID AND PAYABLE
Attributable to equity share capital
Ordinary
Interim paid 2.70p per share (2020: 2.70p)
Prior year final paid 6.00p per share (2019: 7.50p)
Year ended
31.3.21
£000
Year ended
31.3.20
£000
3,274
7,254
10,528
3,239
8,980
12,219
A final dividend of 7.40p, if approved at the AGM on 15 July 2021, will be paid on 26 July 2021 to Shareholders on the register on
25 June 2021. This final dividend, amounting to £8,974,000, has not been included as a liability as at 31 March 2021, in accordance
with IFRS.
12. 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 £51,128,000 (2020: £55,169,000).
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS 148
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
149
13. 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”).
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:
14. INVESTMENT PROPERTIES
Group
Book value at 1 April
Additions
Disposals
Letting cost amortisation
Revaluation surplus
Book value at 31 March
Freehold
31.3.21
£000
657,261
5,393
(111,883)
(8)
(6,638)
544,125
Leasehold
31.3.21
£000
162,312
7,756
–
(11)
26,025
196,082
Total
31.3.21
£000
819,573
13,149
Freehold
31.3.20
£000
652,250
19,049
(111,883)
(41,481)
(19)
19,387
740,207
–
27,443
657,261
Leasehold
31.3.20
£000
126,502
24,902
–
–
10,908
162,312
Total
31.3.20
£000
778,752
43,951
(41,481)
–
38,351
819,573
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
Movement in share of joint ventures
Fair value movement on derivative financial instruments
– subsidiaries
– joint ventures
Fair value movement on Convertible Bond
Profit on cancellation of derivative financial instruments
Expense on cancellation of loans
Deferred tax on adjusting items
(Loss)/earnings used for calculations of EPRA earnings per share
Year ended
31.3.21
000
Year ended
31.3.20
000
121,266
119,978
(282)
(133)
120,984
119,845
719
1,434
973
1,385
123,137
122,203
£000
17,877
14.8p
14.5p
£000
17,877
(18,046)
(5,870)
4,936
–
767
(2,938)
–
–
–
–
1,075
(2,199)
£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
EPRA (loss)/earnings per share
(1.8)p
7.6p
The loss/earnings used for the calculation of EPRA earnings per share includes net rental income and development property
profits/losses.
Investment properties are stated at fair value as at 31 March 2021 as follows:
Group
Book value at 31 March
Lease incentives and letting costs included in trade
and other receivables
Head leases capitalised
Fair value at 31 March
Freehold
31.3.21
£000
544,125
16,450
–
Leasehold
31.3.21
£000
196,082
Total
31.3.21
£000
740,207
2,365
(2,147)
18,815
(2,147)
Freehold
31.3.20
£000
657,261
18,064
–
Leasehold
31.3.20
£000
162,312
Total
31.3.20
£000
819,573
1,399
(2,161)
19,463
(2,161)
560,575
196,300
756,875
675,325
161,550
836,875
Interest capitalised during the year in respect of the refurbishment of investment properties amounted to £nil (2020: £1,745,000).
Cumulative interest capitalised in respect of the refurbishment of investment properties at 31 March 2021 amounted to £13,102,000
(31 March 2020: £13,102,000).
Investment properties with a total fair value of £729,425,000 (31 March 2020: £812,725,000) 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 2021
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 2021 was determined by independent external valuers at that date,
except for investment properties valued by the Directors. The valuations are in accordance with the RICS Valuation – Professional
Standards (“The Red Book”) and the International Valuation Standards and were arrived at by reference to market transactions for
similar properties.
Fair values for investment properties are calculated using the present value income approach. The main assumptions underlying
the valuations are in relation to rent profile and yields as discussed below. A key driver of the property valuations is the terms of
the leases in place at the valuation date. These determine the cash flow profile of the property for a number of years. The valuation
assumes adjustments from these rental values to current market rent at the time of the next rent review (where a typical lease
allows only for upward adjustment) and as leases expire and are replaced by new leases. The current market level of rent is assessed
based on evidence provided by the most recent relevant leasing transactions and negotiations. The nominal equivalent yield is
applied as a discount rate to the rental cash flows which, after taking into account other input assumptions such as vacancies and
costs, generates the market value of the property.
The equivalent yield applied is assessed by reference to market transactions for similar properties and takes into account, amongst
other things, any risks associated with the rent uplift assumptions.
The net initial yield is calculated as the current net income over the gross market value of the asset and is used as a sense check
and to compare against market transactions for similar properties. The valuation 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 45.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS
150
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
14. INVESTMENT PROPERTIES CONTINUED
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:
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 2021 as follows:
London
%
Manchester
%
(5.2)
5.8
2.9
(3.0)
(4.8)
5.3
2.8
(2.6)
Total
%
(5.2)
5.8
2.9
(3.0)
Total
£000
(39,275)
43,725
22,175
(22,575)
Cushman & Wakefield LLP
Directors’ valuation
The historical cost of investment property is £573,709,000 (31 March 2020: £645,927,000).
Group
31.3.21
£000
Group
31.3.20
£000
756,725
836,725
150
150
756,875
836,875
16. OWNER OCCUPIED PROPERTY, PLANT AND EQUIPMENT
Group
Cost at 1 April
Impact of transition to IFRS 16
Adjusted balances at 1 April
Additions at cost
Disposals
Cost at 31 March
Depreciation at 1 April
Provision for the year
Eliminated on disposals
Depreciation at 31 March
Net book amount at 31 March
Leasehold
property and
improvements
31.3.21
£000
Plant and
equipment
31.3.21
£000
7,138
–
7,138
–
–
7,138
1,352
668
–
2,020
5,118
712
–
712
155
(296)
571
491
123
(287)
327
244
Leasehold
property and
improvements
31.3.20
£000
Plant and
equipment
31.3.20
£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
Total
31.3.21
£000
7,850
–
7,850
155
(296)
7,709
1,843
791
(287)
2,347
5,362
151
Total
31.3.20
£000
2,890
5,064
7,954
18
(122)
7,850
1,141
807
(105)
1,843
6,007
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 £4,022,000 (31 March 2020:
£4,543,000).
15. 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:
17. INVESTMENT IN SUBSIDIARIES
Not later than one year
Later than one year but not more than five years
More than five years
The Company has no operating lease arrangements as lessor.
Group
31.3.21
£000
26,182
96,038
115,145
237,365
Group
31.3.20
£000
31,335
95,414
94,638
221,387
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
31.3.21
£000
Group
31.3.20
£000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Company
31.3.21
£000
250,726
3,641
(12,910)
241,457
42,454
3,329
(12,909)
32,874
208,583
Company
31.3.20
£000
198,668
52,058
–
250,726
41,047
1,407
–
42,454
208,272
A list of all the Company’s subsidiary undertakings, all of which have been consolidated, are shown in Note 37 to the financial
statements.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS 152
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
18. INVESTMENT IN JOINT VENTURES
Summarised consolidated Income Statements
Investment
31.3.21
£000
Revenue
Gross rental income
Property overheads
Net rental income
Gain/(loss) on revaluation of investment properties
Loss on sale of investment properties
Development (loss)/profit
Provision against stock
Other operating expenses
Gross profit/(loss)
Administrative expenses
Operating profit/(loss)
Interest payable on bank loans and overdrafts
Other interest payable and similar charges
Interest capitalised
Finance income
Change in fair value of derivative financial instruments
Profit before tax
Tax
Profit after tax
Reversal of One Creechurch Place loss1
Profit on sale of interest in One Creechurch Place
Adjustment 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
Current assets
Land and developments
Trade and other receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Borrowings
Non-current liabilities
Trade and other payables
Borrowings
Leasehold Interest
Deferred tax
Net assets before acquisition costs
Acquisition costs
Net assets
Development
31.3.21
£000
25,925
57
(19)
38
(22)
–
(948)
–
–
(932)
(132)
(1,064)
(603)
–
–
3
–
(1,664)
(373)
(2,037)
–
–
–
(2,037)
99
99
(112)
(13)
6,445
(553)
–
–
–
5,879
(300)
5,579
(560)
(156)
514
2
–
5,379
(223)
5,156
–
–
(767)
4,389
Investment
31.3.21
£000
Development
31.3.21
£000
85,325
85,325
–
8,144
3,022
11,166
(4,605)
(3,287)
(7,892)
(401)
(8,014)
(4,584)
(1,528)
(14,527)
74,072
89
74,161
1,492
41
1,533
16,545
(6,483)
4,759
14,821
(2,493)
(8,168)
(10,661)
(7)
–
–
106
99
5,792
5,792
The fair value of the investment properties at 31 March 2021 is as follows:
Book value at 31 March
Lease incentives and letting costs included in trade and other receivables
Fair value at 31 March
153
Total
31.3.21
£000
86,817
(4,301)
82,516
Total
31.3.20
£000
76,141
668
76,809
The Directors’ valuation of land and developments shows a surplus of £nil (31 March 2020: £nil) above book value.
Dividends of £10,266,000 were received from joint venture companies during the year (2020: £6,670,000). 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 2020: £nil).
The Group has two material joint ventures (31 March 2020: two). 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 income/(costs)
Development (loss)/gain
Gain on revaluation of investment properties
Loss on sale of investment properties
Provision against book value of development stock
Other operating expense
Administrative expenses
Finance costs
Interest capitalised
Finance income
Change in fair value movement of derivative financial instruments
(Loss)/profit before tax
Tax
(Loss)/profit after tax
Barts LP Group
31.03.21
£000
Barts LP Group
31.03.20
£000
Charterhouse
Street Group
31.03.21
£000
Charterhouse
Street Group
31.03.20
£000
55,226
305
(278)
27
(2,133)
1,233
(1,178)
–
(1)
(610)
(1,707)
–
8
–
(4,361)
951
(3,410)
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
–
–
–
–
–
–
–
(92)
(92)
–
11,687
7,948
–
–
–
(272)
(1,030)
1,029
2
–
11,416
(2,074)
9,342
–
–
(166)
–
(4)
–
5
–
7,691
(1,381)
6,310
Total
31.3.21
£000
26,024
156
(131)
25
6,423
(553)
(948)
–
–
4,947
(432)
4,515
(1,163)
(156)
514
5
–
3,715
(596)
3,119
–
–
(767)
2,352
Total
31.3.21
£000
86,817
41
86,858
16,545
1,661
7,781
25,987
(7,098)
(11,455)
(18,553)
(408)
(8,014)
(4,584)
(1,422)
(14,428)
79,864
89
79,953
Investment
31.3.20
£000
Development
31.3.20
£000
6,438
701
(186)
515
8,247
–
5,737
–
(14)
14,485
(414)
14,071
(539)
–
–
16
–
13,548
(1,943)
11,605
–
–
275
11,880
25,724
197
(112)
85
204
–
2,387
(1,481)
(7)
1,188
(182)
1,006
(4)
(328)
–
38
(39)
673
(715)
(42)
224
1,334
–
1,516
Investment
31.3.20
£000
Development
31.3.20
£000
74,776
–
74,776
–
2,418
1,055
3,473
1,365
41
1,406
34,164
1,362
6,766
42,292
Total
31.3.20
£000
32,162
898
(298)
600
8,451
–
8,124
(1,481)
(21)
15,673
(596)
15,077
(543)
(328)
–
54
(39)
14,221
(2,658)
11,563
224
1,334
275
13,396
Total
31.3.20
£000
76,141
41
76,182
34,164
3,780
7,821
45,765
(1,671)
(5,491)
(7,162)
–
–
–
(1,671)
(5,491)
(7,162)
–
(316)
(13,456)
(19,298)
–
(1,382)
(14,838)
61,740
79
61,819
–
406
(19,208)
18,999
–
18,999
(316)
(32,754)
–
(976)
(34,046)
80,739
79
80,818
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 47.0% (2020: 43.0%) rather than its actual ownership interest of 33.3%.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS 154
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
18. INVESTMENT IN JOINT VENTURES CONTINUED
Summarised balance sheet
Non-current assets
Investment properties
Owner occupied property, plant and equipment
Deferred tax
Current assets
Land, development and trading properties
Trade and other receivables
Cash and cash equivalents
Current liabilities
Borrowings
Trade and other payables
Non-current liabilities
Borrowings
Long leasehold liability
Trade and other payables
Deferred tax
Net assets before acquisition costs
Acquisition costs
Net assets
Barts LP Group
31.03.21
£000
Barts LP Group
31.03.20
£000
Charterhouse
Street Group
31.03.21
£000
Charterhouse
Street Group
31.03.20
£000
27,971
72,421
147,341
90,000
88
653
95
–
–
–
–
–
28,712
72,516
147,341
90,000
35,201
1,566
14,974
51,741
(24,373)
(6,685)
(31,058)
–
–
–
–
–
49,395
–
49,395
79,451
5,909
16,385
101,745
–
(14,119)
(14,119)
–
1,770
872
2,642
–
(7,878)
(7,878)
(76,173)
(16,028)
–
–
(664)
(76,837)
83,305
–
(9,168)
(800)
(3,458)
(29,454)
112,651
186
83,305
112,837
–
2,040
412
2,452
–
(1,761)
(1,761)
–
–
–
(1,381)
(1,381)
89,310
–
89,310
19. LAND AND DEVELOPMENTS
Group
At 1 April
Acquisitions and construction costs
Disposals
Reversal of provision
At 31 March
155
Total
31.3.21
£000
852
220
(804)
180
448
Total
31.3.20
£000
2,311
38
(1,686)
189
852
The Directors’ valuation of land and developments shows a surplus of £578,000 (31 March 2020: £578,000) above book value.
This surplus has been included in the EPRA net asset value (Note 33).
No interest has been capitalised or included in land and developments.
Land and developments with carrying values totalling £nil (31 March 2020: £nil) were held as security against borrowings.
The Company had £nil (31 March 2020: £nil) of land and developments.
20. 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
Group
31.3.21
£000
17,426
427
–
117
4,597
17,860
40,427
Group
31.3.20
£000
11,698
142
–
3,123
3,986
21,433
40,382
Company
31.3.21
£000
–
9
Company
31.3.20
£000
–
151
293,223
299,893
75
628
–
75
196
–
293,935
300,315
At 31 March 2021 the Group and the Company had legal interests in the following joint venture companies:
Included within accrued income are lease incentives of £17,179,000 (31 March 2020: £19,463,000).
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
Haslucks Green Limited
Helical Grainger Holdings Limited
Charterhouse Place Limited
Charterhouse Street Limited
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Jersey
n/a
n/a
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
33%
33%
33%
33%
33%
33%
33%
33%
33%
33%
33%
50%
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
– Development
–
–
Investment
Investment
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 47.0%
(2020: 43.0%) to reflect its expected economic interest in the joint venture.
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
31.3.21
£000
34,022
1,003
805
35,830
4,597
40,427
Group
31.3.20
£000
35,063
1,251
82
36,396
3,986
40,382
Company
31.3.21
£000
293,307
–
–
Company
31.3.20
£000
300,119
–
–
293,307
300,119
628
196
293,935
300,315
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 £12,779,000 of rental deposits at 31 March 2021 (31 March 2020: £8,752,000).
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
31.3.21
£000
36,780
(950)
35,830
Group
31.3.20
£000
36,510
(114)
36,396
Company
31.3.21
£000
301,637
(8,330)
293,307
Company
31.3.20
£000
305,484
(5,365)
300,119
Receivables written-off during the year as uncollectable
612
94
–
1,941
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS
156
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
20. TRADE AND OTHER RECEIVABLES CONTINUED
The following table shows the movement in lifetime Estimated Credit Loss (“ECL”) that has been recognised for trade receivables
in accordance with the simplified approach set out in IFRS 9.
Balance as at 1 April 2019
Net remeasurement of loss allowance
Amounts written off
Amounts recovered
Balance as at 31 March 2020
Net remeasurement of loss allowance
Amounts written off
Amounts recovered
Balance as at 31 March 2021
Group
£000
Company
£000
75
114
(75)
–
114
836
–
–
950
–
–
–
–
–
–
–
–
–
The Group has considered the likelihood of default for each tenant and for each contract balance (on an individual basis), 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
31.3.21
£000
681
256
(669)
–
268
Group
31.3.21
£000
181
2,414
(90)
–
2,505
Group
31.3.20
£000
6,233
655
(6,207)
–
681
Company
31.3.21
£000
Company
31.3.20
£000
–
–
–
–
–
–
–
–
–
–
Group
31.3.20
£000
Company
31.3.21
£000
Company
31.3.20
£000
–
181
–
–
181
–
–
–
–
–
–
–
–
–
–
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.
21. CASH AND CASH EQUIVALENTS
Cash held at managing agents
Restricted cash
Cash deposits
Group
31.3.21
£000
3,289
72,878
78,281
154,448
Group
31.3.20
£000
3,563
7,245
63,778
74,586
Company
31.3.21
£000
7
81
67,938
68,026
Company
31.3.20
£000
7
68
56,843
56,918
Restricted cash is made up of cash held by solicitors and cash in restricted bank accounts.
22. 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
157
Group
31.3.21
£000
24,194
1,786
–
–
93
14,023
6,668
46,764
–
–
Group
31.3.20
£000
28,378
1,591
–
–
469
9,277
6,056
Company
31.3.21
£000
Company
31.3.20
£000
526
–
–
78
–
390
143,701
178,885
397
1,269
–
14
1,627
–
45,771
145,893
180,994
590
590
–
–
–
–
Total trade and other payables
46,764
46,361
145,893
180,994
23. LEASE LIABILITY
Current lease liability
Non-current lease liability
Group
31.3.21
£000
634
6,929
Group
31.3.20
£000
611
7,563
Company
31.3.21
£000
634
4,740
Company
31.3.20
£000
611
5,374
Included within lease liability are £634,000 (31 March 2020: £611,000) of current and £4,740,000 (31 March 2020: £5,374,000) of
non-current lease liabilities which relate to the long leasehold of the Group’s head office.
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
31.3.21
£000
922
3,689
17,342
21,953
Present value
of minimum
lease payments
31.3.21
£000
Minimum
lease payments
31.3.20
£000
891
3,283
3,389
7,563
922
3,689
18,264
22,875
Interest
31.3.21
£000
(31)
(406)
(13,953)
(14,390)
Present value
of minimum
lease payments
31.3.20
£000
882
3,247
3,851
7,980
Interest
31.3.20
£000
(40)
(442)
(14,413)
(14,895)
The lease 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 assets of £4,022,000 (31 March 2020:
£4,543,000) and £2,147,000 (31 March 2020: £2,161,000) are shown in Note 16 and Note 14, respectively.
24. BORROWINGS
Current borrowings
Borrowings repayable within:
one to two years
two to three years
three to four years
four to five years
Non-current borrowings
Total borrowings
Group
31.3.21
£000
–
49,705
286,998
–
336,703
336,703
Group
31.3.20
£000
5,000
–
–
37,190
305,994
343,184
348,184
Company
31.3.21
£000
–
–
–
–
–
–
–
Company
31.3.20
£000
5,000
–
–
–
–
–
5,000
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 £729,425,000 (31 March 2020: £812,725,000). 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 £19,469,000 (31 March 2020: £32,754,000).
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS 158
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
159
25. FINANCING AND DERIVATIVE FINANCIAL INSTRUMENTS
The policies for dealing with liquidity and interest rate risk are noted in our Principal Risks on pages 55 to 59.
Net borrowings excludes the Group’s share of borrowings in joint ventures of £19,469,000 (31 March 2020: £32,754,000) and cash
of £7,781,000 (31 March 2020: £7,821,000). All borrowings in joint ventures are secured.
Borrowings maturity
Due after more than one year
Due within one year
Group
31.3.21
£000
336,703
–
336,703
Group
31.3.20
£000
343,184
5,000
348,184
The Group has various undrawn committed borrowing facilities. The facilities available at 31 March 2021 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
31.3.21
£000
10,000
–
–
190,000
–
–
Group
31.3.20
£000
5,000
–
–
12,339
170,000
–
200,000
187,339
Interest rates – Group
Fixed rate borrowings:
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
Total borrowings
%
Expiry
3.030
2.480
2.450
3.480
3.210
3.370
3.149
4.242
Apr 2024
Aug 2024
Aug 2024
Dec 2024
Dec 2024
Jun 2026
Jan 2025
Sep 2023
3.343
Jul 2024
Group
31.3.21
£000
50,000
50,000
50,000
71,000
9,750
50,000
280,750
60,400
(4,447)
336,703
%
Expiry
3.030
2.480
2.450
3.480
3.210
3.370
3.033
4.875
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)
3.393
Jul 2024
348,184
Floating rate borrowings bear interest at rates based on LIBOR.
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
35,000
35,000
35,000
50,000
50,000
22,500
22,500
40,000
%
Start
Expiry
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 2021 the Company had no interest rate swaps, caps or floors (31 March 2020: nil).
Net gearing
Total borrowings
Cash
Net borrowings
Group
31.3.21
£000
336,703
(154,448)
182,255
Group
31.3.20
£000
348,184
(74,586)
273,598
Net assets
Gearing
26. SHARE CAPITAL
Authorised
Group
31.3.21
£000
Group
31.3.20
£000
608,161
598,689
30%
46%
31.3.21
£000
39,577
31.3.20
£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:
121,265,710 (31 March 2020: 119,977,581) 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
31.3.21
£000
1,213
265
1,478
31.3.20
£000
1,200
265
1,465
Shares in issue
31.3.21
Number
Share capital
31.3.21
£000
Shares in issue
31.3.20
Number
Share capital
31.3.20
£000
119,977,581
1,288,129
121,265,710
1,200
119,363,349
13
614,232
1,213
119,977,581
1,194
6
1,200
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 (2021: £600,683,000, 2020: £591,211,000). The Group continually
monitors its gearing level to ensure that it is appropriate. Gearing decreased from 46% to 30% in the year as the Group disposed
of property during the year.
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.
27. SHARE OPTIONS
At 31 March 2021 and 31 March 2020 there were no unexercised options over new ordinary 1p shares in the Company.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS 160
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
161
28. 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 109.
29. 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.
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
2021
Weighted
average award
value
332p
271p
271p
342p
359p
Awards
3,779,873
(930,334)
(482,913)
1,273,176
3,639,802
2020
Weighted
average award
value
319p
322p
322p
363p
332p
Awards
3,663,102
(372,108)
(744,217)
1,233,096
3,779,873
Borrowings
At 31 March 2019
Financing cash flows
Fair value movement of Convertible Bond
Other changes
At 31 March 2020
Financing cash flows
Other changes
At 31 March 2021
Group
£000
425,282
(75,891)
(468)
(739)
348,184
(12,661)
1,180
336,703
Company
£000
98,767
(95,000)
–
1,233
5,000
(5,000)
–
–
All awards have an exercise price of £nil (2020: £nil).
The weighted average share price at the date of exercise for the share options exercised during the year was 358.5p (2020: 362.5p).
The PSP awards outstanding at 31 March 2021 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 2021 was £3,776,000 (2020: £3,961,000). These were granted on
10 June 2020.
The inputs into the Black-Scholes and stochastic models of valuation of the PSP awards made in the year to 31 March 2021 were
as follows:
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk free rate
Expected dividends
2021
342.0p
–
35%
3 years
–0.04%
0.00%
2020
362.5p
–
30%
3 years
0.52%
0.00%
2019
375.0p
–
30%
3 years
0.65%
0.00%
The Group recognised a charge of £2,031,000 (2020: £2,814,000) 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.
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.
30. 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 2021 for the Group or the Company (31 March 2020: £nil).
31. CAPITAL COMMITMENTS
The Group has a commitment of £4,400,000 (31 March 2020: £19,600,000) in relation to development contracts which are due
to be completed in the year to March 2022. A further £45,600,000 (31 March 2020: £1,500,000) relates to the Group’s share of
commitments in joint ventures.
32. POST BALANCE SHEET EVENTS
There were no material post balance sheet events.
33. NET ASSETS PER SHARE
IFRS net assets
Adjustments:
deferred shares
Basic net asset value
share settled bonus
dilutive effect of the Performance Share Plan
Diluted net asset value
Adjustments:
fair value of financial instruments
deferred tax
fair value of land and developments
real estate transfer tax
EPRA net reinstatement value
real estate transfer tax
deferred tax
EPRA net tangible asset value
real estate transfer tax
deferred tax
EPRA net asset value
At
31 March
2021
£000
608,161
(265)
Number
of shares
000
121,266
pence
At
31 March
2020
£000
598,689
(265)
Number
of shares
000
119,978
pence
607,896
121,266
501
598,424
119,978
499
718
1,519
973
1,306
607,896
123,503
492
598,424
122,257
489
7,431
18,348
578
56,877
691,130
(24,862)
(7,605)
658,663
(32,015)
7,605
634,253
123,503
560
123,503
533
10,368
15,668
578
61,607
686,645
(46,221)
–
640,424
(15,386)
–
122,257
562
122,257
524
123,503
514
625,038
122,257
511
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS
162
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
33. NET ASSETS PER SHARE CONTINUED
Diluted net assets
Adjustments:
surplus on fair value of stock
fair value of fixed rate loan
At
31 March
2021
£000
607,896
578
(9,622)
Number
of shares
000
123,503
pence
492
At
31 March
Number of
2020
£000
shares
000
598,424
122,257
pence
489
578
(12,481)
586,521
122,257
480
EPRA net disposal value/EPRA triple net asset value
598,852
123,503
485
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 net tangible asset value includes a real estate transfer tax adjustment which adds back the benefit of the
saving of the purchaser’s costs that Helical expects to receive on the sale of the corporate vehicle that owns the building, rather
than a direct asset sale.
The calculation of EPRA net disposal value/triple net asset value per share reflects the fair value of all the assets and liabilities
of the Group at 31 March 2021. One of the loans held by the Group is at a fixed rate and therefore not at fair value. The adjustment
of £9,622,000 (2020: £12,481,000) is the increase from book to fair value.
34. RELATED PARTY TRANSACTIONS
At 31 March 2021 and 31 March 2020 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 Limited
31.3.21
£000
31.3.20
£000
–
8
16
3
400
71
7
61
3
200
163
35. 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.
Financial assets
Measured at amortised cost
Fair value through the Profit or Loss
Total financial assets
Group
31.3.21
£000
Group
31.3.20
£000
190,278
110,982
171
86
Company
31.3.21
£000
361,333
–
Company
31.3.20
£000
357,037
–
190,449
111,068
361,333
357,037
These financial assets are included in the Balance Sheet within the following headings:
Balance Sheet
Trade and other receivables
Cash and cash equivalents
Derivative financial asset
Total financial assets
Group
31.3.21
£000
35,830
154,448
171
Group
31.3.20
£000
36,396
74,586
86
Company
31.3.21
£000
293,307
68,026
–
Company
31.3.20
£000
300,119
56,918
–
190,449
111,068
361,333
357,037
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.
In the year, interest on bonds of £nil (2020: £745,000) and a promote fee for development management services of £nil (2020:
£305,000) were charged by the Group to Creechurch Place Limited. A development management, accounting and corporate
services fee of £50,000 (2020: £1,119,000) was charged by the Group to the Barts Square companies. In addition, a development
management, accounting and corporate services fee of £850,000 (2020: £243,000) was charged by the Group to the
Charterhouse Place Limited group.
Financial liabilities
Fair value through the Profit or Loss
Measured at amortised cost
Total financial liabilities
Group
31.3.21
£000
7,635
383,198
390,833
All balances are repayable on demand. No provisions have been recognised in respect of amounts owed from joint ventures.
The financial liabilities are included in the Balance Sheet within the following headings:
At 31 March 2021 and 31 March 2020 there were the following balances between the Company and its subsidiaries:
Amounts due from subsidiaries
Amounts due to subsidiaries
31.3.21
£000
293,223
143,701
31.3.20
£000
299,893
178,885
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 20. Amounts owed to subsidiaries by the Company are identified in Note 22.
The Group considers that key management personnel are the Directors. The compensation paid or payable to key management is:
Salaries and other short-term employee benefits
Share-based payments
The total dividends paid to Directors of the Group in the year were £374,639 (2020: £381,355).
31.3.21
£000
3,347
2,785
6,132
31.3.20
£000
2,113
5,233
7,346
Trade and other payables
Borrowings – current
Borrowings – non-current
Long leasehold liability
Derivative financial instruments
Total financial liabilities
Group
31.3.21
£000
38,966
–
336,703
7,563
7,601
390,833
Group
31.3.20
£000
10,879
394,649
405,528
Group
31.3.20
£000
38,715
5,000
343,184
8,174
10,455
405,528
Company
31.3.21
£000
–
151,267
151,267
Company
31.3.21
£000
145,893
–
–
5,374
–
Company
31.3.20
£000
–
191,979
191,979
Company
31.3.20
£000
180,994
5,000
–
5,985
–
151,267
191,979
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS
164
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
165
35. 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 £9,622,000 (31 March 2020: £12,481,000) 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 None
Level 2 Derivative financial instruments (Note 35)
Level 3
Investment property (Note 14)
There were no transfers between categories in the current or prior year.
Derivative financial instruments
Interest rate caps
Interest rate floors
Interest rate swaps
Group
31.3.21
£000
115
(910)
(6,635)
(7,430)
Group
31.3.20
£000
86
(1,036)
(9,419)
(10,369)
Company
31.3.21
£000
Company
31.3.20
£000
–
–
–
–
–
–
–
–
The Group’s movement in the fair value of the derivative financial instruments in the year was a gain of £2,938,000 (2020:
£7,651,000) 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.
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 24 and 25.
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
31.3.21
£000
39,546
11,655
70,883
294,870
416,954
Group
31.3.20
£000
70,664
14,446
23,629
363,830
472,569
Company
31.3.21
£000
144,558
614
1,637
6,955
Company
31.3.20
£000
185,808
614
1,637
6,955
153,764
195,014
At 31 March 2021 the Group had £200,000,000 (31 March 2020: £187,339,000) of undrawn borrowing facilities, £28,080,000
(31 March 2020: £69,780,000) of uncharged property assets and cash balances of £154,448,000 (31 March 2020: £74,586,000).
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 25.
In the year to 31 March 2021, 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.
Group impact
on results
31.3.21
£000
Group impact
on equity
31.3.21
£000
Company impact
on results
31.3.21
£000
Company impact
on equity
31.3.21
£000
6,832
(4,908)
6,832
(4,908)
227
(227)
227
(227)
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.
0.5% increase – increase in net results and equity
0.5% decrease – decrease in net results and equity
As at 31 March 2021 the Group had total credit risk exposure, excluding cash, of £35,830,000, all of which is financial assets held
at amortised cost. The quantitative disclosures of trade and other receivables credit risk is shown in Note 20.
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.
FOREIGN CURRENCY EXCHANGE RISK
The Group and Company have no material exposure to movements in foreign currency rates.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS 166
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
36. 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 2021. 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 103 to 125. 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.
167
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 14.
Investment properties are derecognised on completion of sale.
Included in investment property are right of use assets relating
to leasehold investment property.
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.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS 168
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
36. 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 35.
LEASES
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.
169
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 18).
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 18). 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 47.0% 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 20% lower, the Group’s economic
interest would fall by 0.1% (with a net asset decrease of
£50,000), whilst an increase of 10% would result in a rise
of its economic interest of 1.8% (with a net asset increase
of £900,000); and
• Valuation of investment properties. Discussion of the
sensitivity of these valuations to changes in the equivalent
yields and rental values is included in Note 14.
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.
Areas requiring the use of critical judgement and estimates that
may significantly impact the Group’s earnings and financial
position are:
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS 170
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
37. 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 (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 (POWER ROAD) LIMITED
HELICAL (SHEPHERDS) LIMITED
HELICAL (TELFORD) LIMITED
HELICAL (WHITECHAPEL) LIMITED
HELICAL BAR (DRURY LANE) LIMITED
HELICAL BAR (JERSEY) LIMITED 1
HELICAL BAR (ST VINCENT STREET) LIMITED
HELICAL BAR (WALES) LIMITED
HELICAL BAR DEVELOPMENTS LIMITED
HELICAL FARRINGDON EAST (JERSEY) LIMITED 1
HELICAL FINANCE (AV) 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
Direct/Indirect
Ultimate %
Indirect
Indirect
Direct
Indirect
Indirect
Direct
Indirect
Direct
Direct
Direct
Indirect
Direct
Indirect
Direct
Direct
Direct
Indirect
Direct
Indirect
Direct
Indirect
Direct
Direct
Direct
Indirect
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%
171
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
Direct
Direct
Direct
Direct
Direct
Indirect
Direct
Direct
Direct
Direct
Direct
Direct
Direct
Indirect
Indirect
Indirect
Indirect
Indirect
Direct
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Direct
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%
33%
33%
33%
100%**
75%
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 LIMITED2
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 (BOOTH ST) LIMITED
HELICAL (CARDIFF) LIMITED
HELICAL (HAILSHAM) LIMITED
HELICAL (HUB) LIMITED
HELICAL (PORCHESTER) LIMITED
HELICAL (QUARTZ) LIMITED
HELICAL (SEVENOAKS) LIMITED
HELICAL (WEST LONDON) LIMITED
HELICAL BAR (CITY INVESTMENTS) LIMITED
HELICAL BAR (MITRE SQUARE) DEVELOPMENTS LIMITED
HELICAL BAR DEVELOPMENTS (SOUTH EAST) 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
ROPEMAKER PARK MANAGEMENT COMPANY LIMITED
SCBP MANAGEMENT COMPANY LIMITED
SPRING (HOLDINGS) LIMITED
SPRING (NO.1) LIMITED
SPRING (NO.2) LIMITED
SPRING (NO.3) LIMITED
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
34
35
Registered offices:
1 12 Castle Street, St Helier, Jersey JE4 5UT.
2 IFC 5, St Helier, Jersey, JE1 1ST.
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.
Helical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021FINANCIAL STATEMENTS 172
APPENDIX 1 – SEE-THROUGH ANALYSIS
173
All appendices are unaudited.
Helical holds a significant proportion of its property assets in joint ventures with partners that provide a significant equity
contribution, 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 Income Statement and
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
See-through net rental income
– subsidiaries
– joint ventures
– subsidiaries
– subsidiaries
– joint ventures
Year ended
31.3.21
£000
Year ended
31.3.20
£000
28,007
156
28,163
(232)
(2,810)
(131)
24,990
31,631
898
32,529
(178)
(3,615)
(298)
28,438
SEE-THROUGH NET DEVELOPMENT PROPERTY (LOSS)/PROFIT
Helical’s share of development property (loss)/profit 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 property (loss)/profit
(Provision)/reversal of provision
See-through development property (loss)/profit
– subsidiaries
– joint ventures
Year ended
31.3.21
£000
Year ended
31.3.20
£000
678
(948)
(270)
(82)
–
(352)
2,076
8,124
10,200
1,198
(1,481)
9,917
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 loss on sale of investment properties
– subsidiaries
– joint ventures
– subsidiaries
– joint ventures
Total net loss on sale of investment properties
See-through net gain on sale and revaluation of investment properties
Year ended
31.3.21
£000
Year ended
31.3.20
£000
19,387
6,423
25,810
(1,341)
(553)
(1,894)
23,916
38,351
8,451
46,802
(1,272)
–
(1,272)
45,530
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:
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
– joint ventures
– subsidiaries
– joint ventures
Year ended
31.3.21
£000
Year ended
31.3.20
£000
10,697
1,319
12,016
3,382
–
–
(514)
14,884
(58)
(5)
14,821
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 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 property
Total land and development property
Land and development property surplus
Total land and development property surpluses
Total land and development property at fair value
See-through property portfolio
– subsidiaries
– joint ventures
– subsidiaries
– joint ventures
– subsidiaries
– joint ventures
31.3.21
£000
756,875
82,516
839,391
448
16,545
16,993
578
–
578
17,571
856,962
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
– subsidiaries
– subsidiaries
– joint ventures
– joint ventures
– subsidiaries
– joint ventures
SEE-THROUGH ANALYSIS RATIOS
Balance sheet
Property portfolio
Net borrowings
Net assets
Loan to value
Gearing
31.3.20
£000
836,875
76,809
913,684
852
34,164
35,016
578
–
578
35,594
949,278
31.3.20
£000
5,000
343,184
348,184
–
32,754
32,754
(74,586)
(7,821)
298,531
31.3.21
£000
–
336,703
336,703
11,455
8,014
19,469
(154,448)
(7,781)
193,943
31.3.21
£000
31.3.20
£000
856,962
193,943
608,161
22.6%
31.9%
949,278
298,531
598,689
31.4%
49.9%
ADDITIONAL INFORMATIONHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021
174
175
APPENDIX 2 – TOTAL ACCOUNTING RETURN AND TOTAL PROPERTY RETURN
APPENDIX 3 – FIVE YEAR REVIEW
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 ACCOUNTING RETURN ON EPRA NET TANGIBLE ASSETS
Brought forward EPRA net tangible assets
Carried forward EPRA net tangible assets
Increase in EPRA net tangible assets
Dividends paid
Total Accounting Return on EPRA net tangible assets
Total Accounting Return percentage on EPRA net tangible assets
TOTAL PROPERTY RETURN
See-through net rental income
See-through development property (losses)/profits
See-through revaluation surplus
See-through net loss on sale of investment properties
Total Property Return
Year ended
31.3.21
£000
Year ended
31.3.20
£000
598,689
608,161
9,472
10,528
20,000
3.3%
567,425
598,689
31,264
12,219
43,483
7.7%
Year ended
31.3.21
£000
Year ended
31.3.20
£000
640,424
658,663
18,239
10,528
28,767
4.5%
597,321
640,424
43,103
12,219
55,322
9.3%
Year ended
31.3.21
£000
Year ended
31.3.20
£000
24,990
(352)
25,810
(1,894)
48,554
28,438
9,917
46,802
(1,272)
83,885
INCOME STATEMENTS
Revenue
Net rental income
Development property profit/(loss)
(Provisions)/ reversal of provisions against stock
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 (including NIC)
Finance costs
Finance income
Change 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
Investment portfolio at fair value
Land, trading properties and developments
Group’s share of investment properties held by joint ventures
Group’s share of land, trading and development properties held by
joint ventures
Group’s share of land and development property surpluses
Group’s share of total properties at fair value
Net debt
Group’s share of net debt of joint ventures
Group’s share of net debt
Net assets
EPRA net tangible assets value
Dividend per ordinary share paid/payable
Dividend per ordinary share declared
EPRA (loss)/earnings per ordinary share
EPRA net tangible assets per share
* EPRA net asset value.
Year ended
31.3.21
£000
Year ended
31.3.20
£000
Year ended
31.3.19
£000
Year ended
31.3.18
£000
Year ended
31.3.17
£000
38,596
24,965
678
(82)
2,352
48
27,961
(1,341)
19,387
–
(9,276)
(5,140)
(14,079)
58
2,938
–
–
20,508
(2,631)
17,877
31.3.21
£000
756,875
448
82,516
16,545
578
856,962
182,255
11,688
193,943
608,161
658,663
8.70p
10.10p
(1.8)p
533p
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
31.3.20
£000
836,875
852
76,809
34,164
578
949,278
273,598
24,933
298,531
598,689
640,424
10.20p
8.70p
7.6p
524p
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
31.3.19
£000
791,250
2,311
25,382
56,935
578
876,456
227,712
40,861
268,573
567,425
597,321
9.60p
10.10p
(8.4)p
494p
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
31.3.18
£000
31.3.17
£000
802,134
1,003,000
6,042
22,623
76,474
2,328
86,680
13,907
89,115
12,514
909,601
1,205,216
325,121
37,733
362,854
574,439
45,537
619,976
533,894
561,644*
516,897
565,973*
8.70p
9.50p
(7.0)p
468p*
3.12p
8.60p
0.5p
473p*
ADDITIONAL INFORMATIONHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021 176
APPENDIX 4 – PROPERTY PORTFOLIO
APPENDIX 5 – EPRA PERFORMANCE MEASURES
177
LONDON PORTFOLIO – INVESTMENT PROPERTIES
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
25 Charterhouse Square, EC1
55 Bartholomew, EC1
The Powerhouse, W4
Being redeveloped
Multi-let office building
Multi-let office building
Single-let over-station office building
Multi-let office building
Multi-let office building
Single-let recording studios/office building
33 Charterhouse Street, EC1
Office redevelopment
1 Estimated space once developed.
LONDON PORTFOLIO – DEVELOPMENT PROPERTIES
Address
Barts Square, EC1
Description
236 residential apartments and 14,730 sq ft retail/leisure
MANCHESTER OFFICES
Address
Trinity
Description
Multi-let office building
Area sq ft
(NIA)
Vacancy rate at
31 March 2021
Vacancy rate at
31 March 2020
151,439
182,195
108,606
88,581
42,921
10,976
24,288
609,006
205,3691
814,375
0.0%
0.0%
14.8%
0.0%
26.0%
67.2%
0.0%
5.8%
n/a
n/a
0.2%
0.0%
4.2%
100.0%
0.0%
90.5%
0.0%
16.5%
n/a
n/a
Area sq ft
(NIA)
216,717
Unsold
apartments at
31 March 2021
Unsold
apartments at
31 March 2020
28
44
Area sq ft
(NIA)
Vacancy rate at
31 March 2021
Vacancy rate at
31 March 2020
58,760
54.1%
100%
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
13
31.3.21
(1.8)p
31.3.20
7.6p
EPRA NTA
EPRA NAV
EPRA NNNAV/EPRA NDV
EPRA NIY
EPRA Topped Up NIY
EPRA Vacancy Rate
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.
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.
33
33
33
533p
524p
514p
485p
511p
480p
3.21%
2.95%
4.59%
4.05%
7.89%
19.72%
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
31.3.21
£000
756,875
82,516
31.3.20
£000
836,875
76,809
–
–
(69,250)
(45,000)
(100)
–
770,041
52,363
822,404
26,413
3.21%
11,322
37,735
4.59%
31.3.21
£000
3,371
42,720
(100)
–
868,584
59,064
927,648
27,105
2.92%
10,482
37,587
4.05%
31.3.20
£000
10,161
51,533
7.89%
19.72%
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
31.3.21
£000
Year ended
31.3.20
£000
–
36,030
–
36,030
41,026
44,044
1,745
86,815
Note
14
There were no (2020: one) new investment properties purchased during the year. The majority of the expenditure on the existing
portfolio was made on the London portfolio (94%) and the Manchester offices (6%). In prior year 100% of the capitalised interest
was in London. Capitalised interest is calculated in accordance with IAS 23 Borrowing Costs.
ADDITIONAL INFORMATIONHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021 178
GLOSSARY
179
TOTAL ACCOUNTING RETURN ON EPRA NET
TANGIBLE ASSETS
The growth in the EPRA net tangible asset value of the
Company plus dividends paid in the year, expressed as a
percentage of the EPRA net tangible asset value at the start
of the year (see Appendix 2).
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.
WEIGHTED AVERAGE UNEXPIRED LEASE TERM (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
net lettable area of the property in square feet.
ESTIMATED RENTAL VALUE (ERV)
The market rental value of lettable space as estimated
by the Group’s valuers at each balance sheet date.
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 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 13).
EPRA NET ASSETS PER SHARE
Diluted net asset value per share adjusted to exclude fair value
surplus/deficit of financial instruments, 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 33).
EPRA NET DISPOSAL VALUE PER SHARE
(EFFECTIVE FROM 1 JANUARY 2020)
Represents 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 (see Note 33).
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 (see Note 33).
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 (see Note 33).
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 33).
GEARING
Total borrowings less short-term deposits and cash as a
percentage of net assets.
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.
NET ASSET VALUE PER SHARE (NAV)
Net assets divided by the number of ordinary shares at the
balance sheet date (see Note 33).
NET INITIAL YIELD (NIY)
Annualised net passing rents on investment properties
as a percentage of their open market value, including costs
of purchase.
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).
ADDITIONAL INFORMATIONHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021 180
Helical plc
SHAREHOLDER INFORMATION
Helical plc
181
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
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.
REGISTRAR
All general enquiries concerning holdings of ordinary shares
in Helical plc should be addressed to the Company’s Registrar:
LINK GROUP
Link Group, 10th Floor, Central Square, 29 Wellington Street,
Leeds, LS1 4DL
Telephone: 0371 664 0300*
From outside the UK +44 371 664 0300
Website: www.linkgroup.eu/
Email: shareholderenquiries@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.
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 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 8.00am – 4.30pm 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 2021
were as follows:
Dividend
Record date
2020
Payment date
2020
2019-20 Final
26 June
27 July
Amount
6.00p
2020-21 Interim
4 December
31 December
2.70p
Dividend payment dates in 2021 will be as follows:
Dividend
Record date
2021
Payment date
2021
2020-21 Final
25 June
26 July
2021-22 Interim
December
December
Amount
7.40p
TBC 1
1 The amount of the 2021–22 interim dividend will be announced in November 2021.
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 INFORMATIONHelical plcAnnual Report and Accounts 2021Helical plcAnnual Report and Accounts 2021 182
Helical plc
FINANCIAL CALENDAR AND ADVISORS
CALENDAR 2021 – 2022
2021
24 June 2021
Ex-dividend date for final ordinary dividend
25 June 2021
Record date for final ordinary dividend
5 July 2021
Last day for DRIP elections
15 July 2021
Annual General Meeting
26 July 2021
Final ordinary dividend payable
November 2021 1 Half Year Results and interim ordinary dividend
announced
December 2021 2 Ex-dividend date for interim ordinary dividend
December 2021 2 Registration qualifying date for interim ordinary
dividend
2022
May 2022
Announcement of Full Year Results to 31 March 2022
Notes
1 The announcement date of the Half Year Results will be confirmed in October 2021.
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 Bank N.A., London Branch
Allianz Debt Fund SCSp SICAV-SIF
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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Helical plcAnnual Report and Accounts 2021 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
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