Helical plc
Annual Report and Accounts 2022
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We create sustainable
and inspiring workplaces
which are technologically smart,
rich in amenities and promote
employee wellbeing.
Applying this philosophy we seek
to maximise Shareholder returns
through delivering income growth
from creative asset management
and capital gains from our
development activity.
Find out more online
Please see our newly
launched website for more
information on how we
bring our strategy to life.
helical.co.uk
Strategic Report
Governance
Financial Statements
Additional Information
2
86
135
178
2 Highlights 2022
4 Chief Executive’s statement
8 Our market
14 Our investment case
16 Strategy
20 Business model
22 Key performance indicators
26 Our portfolio
37 The property portfolio
in numbers
40 Financial review
46 Risk management
56 Sustainability at Helical
74 Our stakeholders –
Section 172(1) Statement
86 Chairman’s review
88 Board of the Directors
93
Corporate governance
report
99 – Nominations Committee
106 – Audit and Risk Committee
110 – Directors’ remuneration
135 Independent Auditor’s
178 Appendix 1 –
Report to the Members
of Helical plc
Consolidated Income
Statement
Consolidated Statement
of Comprehensive Income
141
141
See-through analysis
181 Appendix 2 –
Total Accounting Return
and Total Property Return
182 Appendix 3 –
Five year review
report
142 Consolidated Balance
183 Appendix 4 –
132 Report of the Directors
134 Directors’ responsibilities
statement
Sheet
143 Company Balance Sheet
144 Consolidated Cash Flow
Statement
145 Consolidated and Company
Statements of Changes
In Equity
146 Notes to the Financial
Statements
Property portfolio
184 Appendix 5 –
EPRA performance
measures
186 Glossary
188 Shareholder information
189 Financial calendar
and advisors
Highlights
These results were driven by growing rental income and strong valuation
surpluses from both our completed development schemes, now held for
long-term income growth and future asset management opportunities,
and our schemes under development.”
Highlights 2022
Financial highlights
IFRS Profit after tax
2021: £17.9m
EPRA net tangible asset value per share1 up 7.3%
31 March 2021: 533p
£88.9m
572p
Earnings and dividends
• See-through Total Property
Return1 of £89.5m
(2021: £48.6m).
Balance sheet
• Net asset value up 13% to
£687.0m (31 March 2021:
£608.2m).
• IFRS basic earnings per share
• Total Accounting Return1
of 72.8p (2021: 14.8p).
• EPRA earnings per share1
of 5.2p (2021: loss of 1.8p).
• Total dividend for the year
of 11.15p (2021: 10.10p),
an increase of 10.4%.
• Final dividend proposed of
8.25p per share (2021: 7.40p),
an increase of 11.5%.
on EPRA net tangible assets
of 10.2% (2021: 4.5%).
• EPRA Total Accounting Return
on CAGR1 for three years
ending 31 March 2022 of
7.8% (2021: 7.2%)
• EPRA net disposal value
per share1 up 13.6% to 551p
(31 March 2021: 485p).
• Helical elected to become
a REIT, effective 1 April 2022,
and will be exempt from UK
corporation tax on the relevant
future property activities.
15.0% Total Accounting Return1
on IFRS net assets of 15.0%
(2021: 3.3%).
10.7% Total Property Return1, as
measured by MSCI, of 10.7%
compared to the MSCI Central
London Offices Total Return
Index of 7.9%.
36.4% See-through loan to value1
increased to 36.4% (31 March
2021: 22.6%).
£938.8m IFRS investment property
portfolio value of £938.8m
(31 March 2021: £740.2m).
Financing
• Average maturity of the
Group’s share1 of secured debt
of 3.0 years (31 March 2021:
3.2 years), increasing to 3.7
years on exercise of options
to extend current facilities
and on a fully utilised basis.
Portfolio update
• 7.0% valuation increase, on
a like-for-like basis1 (5.6%
including sales and purchases),
of our see-through investment
portfolio, valued at £1,097.3m,
compared to £839.4m at
31 March 2021.
• See-through average cost
• Contracted rents of £46.4m
of secured facilities1 of 3.2%
(31 March 2021: 3.5%).
• Group’s share1 of cash and
undrawn bank facilities of
£132m (31 March 2021: £423m).
• Change in fair value of
derivative financial instruments
credit of £18.0m (2021: £2.9m).
• See-through net borrowings1
of £402.9m (31 March 2021:
£193.9m).
(31 March 2021: £37.8m)
compared to an ERV1 of £67.1m
(31 March 2021: £52.1m).
• See-through portfolio WAULT1
of 5.6 years (31 March 2021:
6.9 years).
• Vacancy rate reduced from
10.5% to 6.7%.
Operational highlights
Sustainability highlights
c.185,000
square feet
New acquisition
Major boost to the development
pipeline with the acquisition of
100 New Bridge Street, EC4.
Delivery of a c.185,000 sq ft
office scheme planned for
early 2025.
£34.55m Manchester sale
Trinity, our last remaining asset
in Manchester, sold for £34.55m,
at a net premium of c.£2.0m
to our 31 March 2022 book
value and representing a net
initial yield of 5.0%.
95.8% Rent collection
95.8% of all rent contracted
and payable for the financial
year collected with 2.2% to
be collected following the end
of the Government’s general
moratorium and 2.0% having
been written off or agreed
concessions.
• Practical completion of
• 55 Bartholomew, EC1, sold
33 Charterhouse Street,
EC1, a 205,369 sq ft BREEAM
“Outstanding” office
development, on track
for September 2022.
• 14 residential units at Barts
Square sold in this 236 unit
residential scheme, leaving
14 apartments available at the
year end of which one has
since been sold and two are
under offer.
for £16.5m (our share £7.6m),
at a 3% premium to 31 March
2022 book value, reflecting
a net initial yield of 4.5%.
• 12 new lettings completed
across the portfolio, totalling
54,118 sq ft, delivering
contracted rent of £3.3m
(Helical’s share £3.0m) at 1.8%
above the 31 March 2021 ERV
(excluding managed lettings).
Net Zero Carbon Pathway
Helical’s “Net Zero Carbon
Pathway” published 24 May 2022
setting out our commitment to
becoming a net zero carbon
business by 2030.
Climate Commitment
Better Building Partnership’s
Climate Commitment adopted,
providing an accountable and
transparent framework for
delivering net zero carbon
for a property portfolio.
Sustainability rating
Improvements across
sustainability measures and
ratings with a 4* Green GRESB
rating (85/100), MSCI ESG of
AAA and an EPRA Sustainability
BPR rating of Gold.
4*
96% Developed or refurbished
96% of the space in our
buildings has been recently
developed or refurbished
(excluding 100 New Bridge
Street, EC4) with 99% of our
investment portfolio, by value,
having an A or B EPC rating.
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.
2
Helical plc — Annual Report and Accounts 2022
3
Strategic ReportHelical plc — Annual Report and Accounts 2022 Chief Executive’s statement
99% of our portfolio,
by value, is within a
12 minute walk of a nearby
Elizabeth Line station
Gerald Kaye
Chief Executive
Helical, delivering
a sustainable future
Overview
Today marks the opening to the public of the Elizabeth Line, one of the largest transport
infrastructure projects in the UK, increasing Central London’s rail capacity by 10% and
bringing an additional 1.5 million people within 45 minutes of Central London. Our £1bn
portfolio of sustainable, amenity rich London offices, of which 99% by value are situated
within a 12 minute walk of a nearby Elizabeth Line station, will continue to benefit from their
proximity to this new arterial route through Central London. It is this connection, together
with the improving strength of the prime London office market, that has underpinned a strong
set of results after emerging from the Covid-19 pandemic following two difficult years.
Our Total Accounting Return (“TAR”) for the year, a key performance indicator for Helical, was
15.0% on our net assets measured under IFRS and 10.2% based on our EPRA net tangible
assets. Over the three years to 31 March 2022, the compound annual growth rate of our EPRA
TAR was 7.8% pa, an indication of the strength and consistency of the financial performance
of the Group, despite the challenges of the period. These results were driven by growing rental
income and strong valuation surpluses from both our completed development schemes, now
held for long-term income growth and future asset management opportunities, and our
schemes under development.
Sustainability
On 24 May 2022 we published our Net Zero Carbon Pathway to becoming a net zero carbon
business by 2030, as our contribution, as a responsible business, to the decarbonising of
the UK economy by 2050. In continuing this journey, we have identified meaningful ways of
reducing both our embodied and operational carbon emissions. As part of this process, we
have signed up to the Better Buildings Partnership Climate Commitment, which provides an
accountable and transparent framework for delivering net zero carbon for a property portfolio.
With our commitment to sustainability reporting, we measure our performance against
industry-wide benchmarks, and I am pleased again to be able to report significant progress
against these measures during the year.
4
Helical plc — Annual Report and Accounts 2022
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Strategic ReportHelical plc — Annual Report and Accounts 2022 Chief Executive’s statement
continued
We have improved our GRESB score from a 3* to a 4* Green rating,
increasing our score from 76 to 85, and have maintained our MSCI
ESG rating at AAA, the top rating. Further, we have been awarded
a Gold rating under the EPRA Sustainability BPR, up from Silver.
accounts available to service payments under loan agreements, cash
held at managing agents and cash held in joint ventures. Furthermore,
the Group had £99.0m of loan facilities available to draw on plus
£31.0m of uncharged property.
At a portfolio level, 99% by value of our completed portfolio has
an EPC rating of A or B (the remaining 1% has a C rating) and each
of our refurbished or redeveloped office buildings has a BREEAM
rating of “Excellent”, with BREEAM “Outstanding” targeted for
33 Charterhouse Street, EC1 and 100 New Bridge Street, EC4.
Overall, the Group has continued to respond decisively to the climate
change challenge, achieving its sustainability targets and, importantly,
has a clear path to continue this journey.
Results for the year
The profit after tax for the year to 31 March 2022 was £88.9m (2021:
£17.9m) with a see-through Total Property Return of £89.5m (2021:
£48.6m). Following the letting of Kaleidoscope, EC1 in March 2021
and the recent purchase of 100 New Bridge Street, EC4, see-through
net rental income increased by 24.8% to £31.2m (2021: £25.0m) while
developments generated see-through profits of £6.6m (2021: loss of
£0.3m). The see-through net gain on sale and revaluation of the
investment portfolio was £51.7m (2021: £23.9m).
Total see-through net finance costs increased to £19.7m (2021: £14.8m),
including £5.9m loan cancellation costs. An increase in expected future
interest rates led to an £18.0m credit (2021: £2.9m) from the valuation
of the Group’s derivative financial instruments. Recurring see-through
administration costs were 2% higher at £9.9m (2021: £9.7m), with
performance related awards increasing to £6.0m (2021: £4.3m) and
National Insurance on these awards of £1.2m (2021: £0.8m).
A corporation tax credit of £1.1m has been recognised in the annual
results and following the election to become a REIT, with effect from
1 April 2022, a deferred tax credit of £14.9m has also been recognised.
There was an IFRS basic earnings per share of 72.8p (2021: 14.8p)
and an EPRA earnings per share of 5.2p (2021: loss of 1.8p).
On a like-for-like basis, the investment portfolio increased in value by
7.0% (5.6% including purchases and gains on sales). The see-through
total portfolio value increased to £1,097.3m (31 March 2021: £839.4m),
following the acquisition of 100 New Bridge Street, EC4 during the year.
The unleveraged return of our property portfolio, as measured by
MSCI, was 10.7% (2021: 7.0%), 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
7.9% (2021: -1.7%) with an upper quartile return of 9.9% (2021: 1.6%).
The portfolio was 93.3% let at 31 March 2022, generating contracted
rents of £46.4m (2021: £37.8m), at an average of £60 psf, growing to
£49.3m on the letting of currently vacant space and moving towards
capturing its ERV of £67.1m (2021: £52.1m). The Group’s contracted rent
has a Weighted Average Unexpired Lease Term (“WAULT”) of 5.6 years.
The Total Accounting Return (“TAR”), being the growth in the IFRS net
asset value of the Group, plus dividends paid in the year, was 15.0%
(2021: 3.3%). Based on EPRA net tangible assets, the TAR was 10.2%
(2021: 4.5%). EPRA net tangible assets per share were up 7.3% to
572p (31 March 2021: 533p), with EPRA net disposal value per share
up 13.6% to 551p (31 March 2021: 485p).
Balance sheet strength and liquidity
The Group has a significant level of liquidity with see-through cash
and unutilised bank facilities of £132m (31 March 2021: £423m) to
fund capital works on its portfolio and future acquisitions.
At 31 March 2022, the Group had £14.2m of cash deposits available
to deploy without restrictions and a further £19.1m of rent in bank
The see-through loan to value ratio (“LTV”) increased to 36.4% at the
balance sheet date (31 March 2021: 22.6%) and our see-through net
gearing, the ratio of net borrowings to the net asset value of the Group,
increased to 58.6% (31 March 2021: 31.9%) over the same period.
At the year end, the average debt maturity on secured loans, on
a see-through basis, was 3.0 years (31 March 2021: 3.2 years),
increasing to 3.7 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 2022 was 3.2% (31 March 2021: 3.5%).
Helical as a Real Estate Investment Trust (“REIT”)
Helical’s business has evolved in recent years, from a developer/
trader model, selling its development schemes to third party
investors, to become a developer of, and investor in, new or
refurbished Grade A buildings that are retained for their capital
growth and long-term income potential.
Today, Helical has a portfolio with a superior sustainability rating.
Together, this portfolio and the Company’s long-term investment
model have facilitated the conversion of the Company’s operations
to a REIT, with the notice to become a REIT submitted in March 2022
and effective from 1 April 2022.
It is the intention of the Board that there will be no material changes
to the Group’s investment policy or strategy on becoming a REIT.
Helical intends to employ the same dividend policy as followed prior
to its conversion to a REIT. Within the REIT regime, distributions from
the Company may comprise Property Income Distributions (PIDs),
ordinary dividends or a combination of the two. The Company will be
required to distribute at least 90% of the tax exempt income profits
of its property rental business and will be able to distribute additional
amounts over and above the minimum PID requirement, to enable it
to continue its current dividend policy.
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.
In the year to 31 March 2022, prior to Helical becoming a REIT, the
Company retained all its investment assets, investing its available cash
resources to grow the development pipeline with the acquisition of
100 New Bridge Street, EC4. The additional income from this purchase
and the growing net rental income from the completed investment
assets increased net rental income by 24.8% and EPRA earnings
per share from a loss of 1.8p in 2021 to earnings of 5.2p in 2022.
In the light of the increased earnings and the strong results for the
year, the Board will be recommending to Shareholders a final
dividend of 8.25p per share, an increase of 11.5% on last year (7.40p).
If approved by Shareholders at the 2022 AGM, the total dividend for
the year will be 11.15p, up 10.4% on 2021.
This final dividend, if approved, will be paid out of distributable
reserves generated from the Group’s activities prior to its conversion
into a REIT.
Sustainability and
Net Zero Carbon
We have made good progress against the targets we set out
in our sustainability strategy “Built for the Future” and continue
to drive forward our ESG ambitions. In support of this, Helical
has released its “Net Zero Carbon Pathway”.
In the UK, the built environment is responsible for 40% of the
country’s total greenhouse gas emissions. If the UK is going
to achieve its commitment of becoming net zero by 2050,
there needs to be rapid transformational change within the
sector. As a contributor to these emissions, we recognise the
need to be a part of this transformational change while still
delivering long-term sustainable growth to our Shareholders.
In consideration of this, we are committing to becoming a net
zero carbon business by 2030.
In publishing our Net Zero Carbon Pathway, Helical has also
become a signatory to the Building Better Partnership’s (“BBP”)
Climate Commitment, which provides a clear, accountable and
transparent mechanism for real estate companies in the UK to
drive towards net zero carbon. As we build on our ambitions,
we continue to recognise the importance of transparency and
independently assured reporting. Going forward we will be
reporting on our progress against our net zero carbon targets
to make certain we are on track for 2030.
Our portfolio is well placed in terms of energy efficiency,
with 99% of our assets (by value) already compliant with the
proposed legislative requirement that all rented commercial
buildings achieve a minimum EPC of a B rating by 2030. Market
research suggests only 23% of commercial assets are currently
compliant, with significant capital outlay likely to be required
to take non-compliant buildings up to the minimum standard.
For our development assets, we have undertaken significant
initiatives to minimise embodied carbon and maximise
operational efficiency. At 33 Charterhouse Street, EC1, through
the careful design and selection of materials, we have reduced
the embodied carbon to 40% below the RIBA benchmark.
Going forward we are focusing on delivering “carbon friendly
new build” schemes, such as 100 New Bridge Street, EC4,
where we will re-use or recycle large portions of the existing
building and look to incorporate the existing structural frame
to minimise the carbon impact.
During the year, we have also further developed our reporting
against the recommendations of the Task Force on Climate-
related Financial Disclosures. We have performed an in-depth
review of the risks and opportunities that could arise from
certain climate-related scenarios and evaluated the potential
impact to our business.
→ See page
56
We are a specialist developer and investor
in prime Central London real estate, creating
inspiring and sustainable, best-in-class
office buildings.”
Board matters
At this year’s Annual General Meeting (“AGM”) our Chairman,
Richard Grant, will step down from the Board after ten years’ service.
On behalf of the rest of the Board, I thank him for his contribution to
the success of Helical over that period and wish him well.
Richard will be replaced as Chairman by Richard Cotton, our current
Senior Independent Director (“SID”), with Sue Clayton, who has been
on the Board for six years, replacing Richard Cotton as SID.
Outlook
The geopolitical and economic backdrop has deteriorated since
we reported on our half year results in November 2021. The human
tragedy of what is unfolding in Ukraine is heart rending and shocking
to Western democracies and it is difficult to comprehend the
motivation and methods of the aggressors. With these events
in Eastern Europe ongoing and growing inflationary pressures
accompanying a slowing economy leading to fears of “stagflation”,
it is right to be concerned for the performance of UK businesses
over the next year. Despite these concerns, the fundamentals of
our business remain strong, and we believe our experience and
reputation will enable us to secure new opportunities as they arise.
We are a specialist developer and investor in prime Central London
real estate, creating inspiring and sustainable, best-in-class office
buildings. London is a leading world city, a safe haven, attracting a
mix of established and growing businesses seeking a base for their
operations and well capitalised investors looking to invest their funds.
We will continue to see bifurcation between the best-in-class new
sustainable buildings and the older less sustainable buildings. This will
be reflected in strong rental growth for the former and rental decline
for the latter. Helical is well positioned to capitalise upon a period of
opportunity within the sector over the next 10-20 years, changing the
older “brown” buildings into “green” sustainable buildings.
In the last year, we have deployed capital to acquire 100 New Bridge
Street, EC4, with this exciting redevelopment due to start by the end
of 2023, following the expiry of the current tenancies. Along with
33 Charterhouse Street, EC1, due for completion in September 2022,
and continuing asset management opportunities in the remaining,
completed investment portfolio, we are optimistic that our successful
track record of outperforming the market and delivering strong
financial returns will continue.
Gerald Kaye
Chief Executive
24 May 2022
6
7
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Our market
Matthew Bonning-Snook
Property Director
Sustainability driving
the premium market
Our market
The past two years have seen the Central
London commercial property market face
unprecedented challenges. Throughout
this period, Helical has retained a strong
conviction that our portfolio of high quality,
sustainable and technologically advanced
buildings would be resilient in the face of
the significant challenges facing the sector
and well positioned to take advantage of
the quickly evolving demands of the
marketplace. While headwinds remain,
this conviction has been borne out, and it
is encouraging to see increasing evidence
that employees, occupiers and investors
alike continue to place significant importance
on the value of the office and that our
portfolio of design led, amenity rich and well
located properties continues to outperform
in a highly competitive market.
DRIVING VALUE – OUR PORTFOLIO
250,000
200,000
150,000
100,000
50,000
t
f
q
S
New or newly refurbished
Under development
To be refurbished
Unrefurbished
The Tower
The
Warehouse
The Studio
The Loom
Kaleidescope
25
Charterhouse
Square
33
Charterhouse
Street
EPC
B
B
B
B
B
B
A (Targeted)
BREEAM
Excellent
Excellent
Excellent
Not
Assessed
Excellent
Excellent
Outstanding
(Targeted)
100 New
Bridge Street
A (Targeted)
Outstanding
(Targeted)
London
The Central London commercial property market continues to
demonstrate its inherent resilience. The end of the UK Government’s
Covid-19 restrictions has enabled employees to return to the office
and confidence to grow throughout the sector. Data collected by
The Freespace Index, which provides office use statistics, shows that
daily London office occupancy has steadily increased, demonstrating
the importance of the office in effective working practices, albeit
employees are adopting a range of working practices depending on
the nature of their industry. Any uncertainty over the future of the office
has much reduced as the value of the office to workplace culture,
efficiency and knowledge sharing is rediscovered and reinforced.
These trends are evidenced in the letting market where velocity
has continued to increase in Central London as greater stability has
enabled occupiers to develop longer-term plans. According to CBRE,
since July 2021 the amount of space under offer has exceeded the
ten-year average of 3.3m sq ft. While availability remains high at
26.0m sq ft, 18.1m sq ft of this relates to second hand stock, further
demonstrating that best-in-class space is desired as the flight to
quality intensifies. A combination of these factors, coupled with
limited newly built office space, has led to increases in headline rents
across most Central London sub-markets in 2021 for these best-in-
class buildings.
Trinity
B
Barts Square
Retail
55
Bartholomew
The
Power House
B
C
N/A
N/A
Excellent
Not
Assessed
Not
Assessed
8
9
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Our market
continued
London continues to be a highly desirable
market and the renewed sense of confidence
is manifesting in growing development activity,
with the amount of new development starting on
site at 1.0m sq ft above the long-term average.”
From an investment perspective, a significant amount of capital
continues to be allocated to the Central London office market with
CBRE identifying more than £40bn of capital targeting the sector at
the end of 2021. While London saw consecutive years of declining
investment volumes in 2019 and 2020 due to the destabilising impacts
of Brexit and Covid-19, this trend reversed in 2021, with investment
into London offices of £12.3bn, an increase of £3bn on 2020. 2022
has continued this trend with CBRE reporting a record first quarter
of £5.5bn of inbound investment, with a further £5bn under offer.
London continues to be a highly desirable market and the renewed
sense of confidence is manifesting in growing development activity,
with the amount of new development starting on site at 1.0m sq ft
above the long-term average. While this is positive, significant
headwinds remain, with the impact of increasing cost price inflation,
rising interest rates and disrupted global supply chains adversely
impacting development activity. As general inflation hits its highest
levels in 40 years, Arcadis notes that manufacturing inflation is
outpacing all other sectors, with raw material prices increasing by
13.6% during the year. These disruptive trends will need to be
monitored over the coming year and are likely to partially moderate
some of the renewed sectoral confidence.
Our tenant make-up
Technology
Professional services
Media
33%
24%
13%
Online leisure
12%
Flexible office providers 9%
Financial services
Retail
Other
Government/charity
4%
2%
2%
1%
11
10
Helical plc — Annual Report and Accounts 2022
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Our market
continued
Market trend:
Sustainability
Sustainability is now at the forefront of business decision making,
with an increasing number of companies committing to net zero
targets. Landlords and tenants are increasingly aware of the need
to both minimise embodied carbon in the development of assets
and reduce operational carbon through the building’s day to day
use. Furthermore, legislative changes are mandating the efficient
operational performance of buildings to ensure wider environmental
targets are achieved. The quick response by landlords and tenants,
and the Government’s regulatory changes, have combined to make
London the highest ranked green city globally out of 286 cities
studied by Knight Frank.
The nature of sustainable development is evolving rapidly with
an increased focus on the development and integration of new
technologies. Whilst these technologies increase the initial cost,
we believe that this is justified, with increasing evidence of occupiers
paying a premium for best-in-class “green” buildings. In contrast,
“brown” assets are increasingly hard to let. Knight Frank has identified
24.5m sq ft of pending lease expiries between now and the end of
2025, and this will undoubtedly require landlords to undertake
substantial refurbishment work to meet the required energy
performance standards and enable these spaces to be relet.
The trend to ensure sustainability is at the heart of development is also
manifesting itself in a fundamental change in approach, as developers
seek to reduce embodied carbon by re-using, where possible,
elements of an existing building. Deloitte’s Crane Survey has noted
an emerging trend towards substantial refurbishment rather than
new ground up development, with 64% of space under construction
relating to refurbishment. This trend is further evidenced by our most
recent acquisition of 100 New Bridge Street, EC4, where we will work
with the existing building structure, delivering a best-in-class carbon
friendly new build. Equally, local authorities are seeking increasing
justification for demolition, on sustainability grounds.
Market trend:
Amenity rich and flexible space
As businesses seek to encourage employees to return to the
office and to provide them with an environment that is conducive
to collaborative and effective working, there is a requirement for
amenity rich and flexible space. Knight Frank found 46% of occupiers
surveyed for their 2022 London Report expect to have a greater
amenity offering in their workplace in the next three years.
Businesses are wishing to occupy buildings which provide flexible,
varied space to facilitate agile working practices and stimulate
creativity. Furthermore, they are looking for attractive spaces that
help create a sense of community for employees, which is more
highly valued following the enforced periods of isolated remote
working. Across the Helical portfolio our carefully designed buildings
provide exceptional work environments with our occupiers also able
to benefit from spa-quality changing facilities, generous cycle storage
and thoughtfully designed outdoor spaces.
Alongside the amenity delivered within the building the external
environment is also of significant importance. Our portfolio of assets
is located in some of London’s most vibrant communities enabling
occupiers to benefit from local food and beverage offerings, arts and
cultural institutions and green spaces which supplement their daily
office experience.
12
24.5m
sq ft
Knight Frank have identified
24.5m sq ft of pending lease
expiries between now and
the end of 2025 and this will
undoubtedly require landlords
to undertake substantial
refurbishment work to enable
these spaces to be relet in
line with modern occupiers’
expectations.
46% Knight Frank found 46% of
occupiers surveyed for their
2022 London Report expect to
have a greater amenity offering
in their workplace in the next
three years.
Market trend:
Health and wellness
The Covid-19 pandemic has highlighted the importance of physical
and mental health for employers and employees. An increased
focus has been placed upon enhancing ventilation, lighting and
acoustics within buildings to maximise employee wellbeing and to
provide an environment where they can work efficiently. Similarly,
technology has been rapidly adopted to minimise touch points
and to enable individuals to have a high degree of control over
their micro working environment. Furthermore, opportunities for
well curated outdoor spaces, with external greening, are now
increasingly desired.
Buildings which deliver a healthy working environment supporting
employee wellbeing are increasingly in demand from occupiers
and investors alike. All of Helical’s buildings benefit from extensive
amenity and, as we continue to grow our portfolio, the ability to
deliver this for occupiers will remain a key criterion in asset selection.
Market trend:
Technology and
smart buildings
As hybrid working models proliferate across most sectors, digital
connectivity is vitally important to ensure that office based and
remote employees maintain collaborative and connected working
practices. All our buildings benefit from excellent connectivity,
enabling occupiers to have confidence in the digital backbone
of their operations.
The technology integrated within our increasingly smart buildings can
be utilised to generate extensive data. This data has significant value
when collated and analysed to provide insights into the operation
of the building. Both landlords and tenants have the ability, through
the integration of technologies, to access data and tailor environments
for peak performance and to drive operational efficiencies.
During the year, the Group invested in a proptech venture capital
fund managed by Pi Labs. The investment reflects the importance
Helical places on supporting businesses and technologies that aim
to drive the evolution of the workplace, and it is hoped that their
products can be successfully deployed into the portfolio.
The delivery of buildings has been enhanced with the introduction
of pioneering construction methodologies. 33 Charterhouse Street,
EC1 saw the offsite pre-fabrication of all service risers throughout
the building, reducing the construction programme considerably
and enabling service commissioning to be undertaken in a
controlled factory environment rather than on a live construction
site, thereby increasing reliability. The new building will also benefit
from the incorporation of an intelligent and dynamic water
management and recycling system linked to real time weather data.
This trend will likely accelerate as developers continue to challenge
industry practices to build in a more efficient and sustainable manner
and create more advanced and technologically enabled buildings.
13
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Our investment case
The Helical difference
We create sustainable and inspiring workplaces which
are technologically smart, rich in amenities and promote
employee wellbeing.
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/
Sustainable
business model
02/
Best-in-class
portfolio
03/
A customer
focused approach
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 a property’s lifecycle,
achieving Net Zero by 2030.
The Group has built a high quality and sustainable
portfolio, focused in London’s tech belt, which has
excellent transport links and is culturally rich.
The buildings are occupied by a diverse range
of tenants, but with a clear focus on the fast
growing creative and tech sectors.
Helical creates 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.
04/
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.
05/
Robust financial
position
06/
Strong track
record
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.
Each of the Executive Directors has over 27 years
of experience at Helical. Acting with integrity and
supported by a dynamic and collaborative team, they
have developed award-winning buildings that appeal
to the most demanding of occupiers.
14
15
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Strategy
To create value for Shareholders and society in a sustainable way,
delivering market leading returns by developing customer focused
and design led properties, letting them to a diverse tenant base,
and applying a proactive approach to asset management.
Our strategy
We have five pillars which support our strategy:
1 Growth
Maximise Shareholder returns by increasing the net asset value
of the Group through capital gains and growing our rental income
stream to cover dividends.
2 Property
Manage a “best-in-class”, balanced portfolio with a clear
market focus, combining assets with significant development and
asset management potential with a strong rental income stream.
Why Helical?
We are a property development and investment business with
a sustainability-led and stakeholder-focused value proposition:
Our vision
To develop the most sustainable,
technologically advanced, wellness
promoting and amenity rich offices.
Our Purpose
“We create sustainable and inspiring workplaces which
are technologically smart, rich in amenities and promote
employee wellbeing.
Applying this philosophy we seek to maximise Shareholder
returns through delivering income growth from creative asset
management and capital gains from our development activity.”
Our Purpose forms the foundation of our strategy.
Strategic priorities
2021 /22 Achievements/value creation
Associated information
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.
TOTAL SHAREHOLDER
RETURN (1 YEAR)
TOTAL ACCOUNTING
RETURN
EPRA NTA
EPRA EARNINGS
PER SHARE
1.7%
15.0%
572p
5.2p
Key Performance Indicators
• Total Shareholder Return (1 Year)
• Total Accounting Return
• EPRA Total Accounting Return
• EPRA Net Tangible Assets
Principal associated risks
• Poor management of stakeholder relations
• Geopolitical and economic
• The Group’s strategy is inconsistent
with the market
• Non-compliance with prevailing legislation,
regulation and best practice
• Significant business disruption/external
catastrophic event
Relevant Stakeholders
• Shareholders
• Employees
Strategic priorities
2021 /22 Achievements/value creation
Associated information
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.
TOTAL PROPERTY
RETURN (1 YEAR)
TOTAL PROPERTY
RETURN (3 YEAR)
10.7%
9.1%
Key Performance Indicators
• MSCI Property Index (1 Year)
• MSCI Property Index (3 Year)
Principal associated risks
• Property values decline/reduced
tenant demand for space
• The Group carries out significant
development projects
• Health and safety risk
• Cyber-attack to our buildings/cyber security
Relevant stakeholders
• Occupiers (tenants/customers)
• Suppliers and contractors
• Local communities
16
17
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Strategy
continued
3 Sustainability
Ensure that sustainability is at the heart of our business decisions
creating a portfolio which is futureproofed for all our stakeholders.
4 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
2021 /22 Achievements/value creation
Associated information
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.
100 NEW BRIDGE
STREET, EC4
TARGETING BREEAM
“OUTSTANDING“
c. 185,000
sq ft
COMPLETED
BUILDINGS, BY VALUE,
WITH AN EPC OF A OR B
99%
Key performance indicators
• BREEAM and EPC ratings
Principal associated risks
• Climate change
Relevant stakeholders
• Occupiers (tenants/customers)
• Local communities
• Government and regulatory bodies
Strategic priorities
2021 /22 Achievements/value creation
Associated information
Small and empowered core team supported
by valued advisors to allow scalability.
AVERAGE STAFF
RETENTION
AVERAGE LENGTH OF
EMPLOYEE SERVICE
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.
96.3%
11.8 years
Key performance indicators
• Average length of employee service
• Average staff turnover
Principal associated risks
• Our people
• Relationships with business partners
and reliance on external parties
Relevant stakeholders
• Employees
• Partners
• Suppliers and contractors
5 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
2021 /22 Achievements/value creation
Associated information
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.
SEE-THROUGH
AVERAGE COST OF
SECURED FACILITIES
LOAN TO VALUE
3.2%
36.4%
Principal associated risks
• Availability and cost of bank
borrowing and cash resources
• Breach of loan covenants
Relevant stakeholders
• Shareholders
• Partners
Goals for 2023
• Maintain effective channels of engagement with our stakeholders
• Complete The JJ Mack Building, EC1 development
• Acquire new schemes
• Finalise plan for development of 100 New Bridge Street, EC4 and arrange
appropriate finance
• Continue to be recognised as a leading supplier of sustainable office buildings in London
Our business model –
Delivering against our strategy
Business model
Building value
Our Purpose forms the foundation of our strategy
which, through the application of our business model,
drives long-term, sustainable growth and value for all
our stakeholders.
Our Purpose
External
opportunities
and threats
Resources
The assets, skills and
knowledge to create our
competitive advantage:
We respond to external
opportunities and mitigate
threats coming from:
Property
A high quality portfolio of land, buildings
and identified future opportunities.
Our market
The London office property
market, with focus on the
four key trends.
→ See pages
8 to 13
Risks
Strategic, Operational,
Financial and Reputational
risks considered over short,
medium and long-term
timescales.
→ See pages
46 to 55
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.
Underpinned by
Our Values
and Culture
Aligned with
Our strategy
Our strategic pillars:
— Growth
— Property
— Sustainability
— People
— Financing
→ See pages
16 to 19
Business activities
01/
r u c t u re and funding
S t
02/
Stakeholders
Generation of long-term value
for our stakeholders
M
a
n
a
g
e
Sustainability
Working for the long-term benefit
of our stakeholders, local communities
and the environment underpins
all our activities.
D
e
v
e
o
p
l
04/
Let
03/
01/ Structure
and funding
02/ Develop
03/ Let
04/ Manage
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.
Look to let our properties
on flexible terms to a diverse,
financially robust tenant base.
Through proactive asset
management we drive the
rental value forward whilst
maximising occupancy.
1
2
3
4
5
6
7
Shareholders
Partners
Suppliers and
contractors
Occupiers
(tenants/customers)
Employees
Local communities
Government and other
regulatory bodies
→ See page
→ See page
74
20
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 business model, which informs how the
Company operates and how value is created
for our stakeholders, is designed to deliver
the Group’s strategy.
Given the relationship between Helical’s
strategy and its business model, the
Board keeps the business model under
constant review throughout the year to
ensure it aligns with the Group’s strategy.
An annual evaluation of the business
model is undertaken as part of the Annual
Strategy Review (for more information
please see page 94 of the Corporate
Governance Report.
• Continue our pathway to Net Zero
20
Helical plc — Annual Report and Accounts 2022
Helical plc — Annual Report and Accounts 2022
Helical plc — Annual Report and Accounts 2022
21
18
19
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Business model
Building value
Our Purpose forms the foundation of our strategy
which, through the application of our business model,
drives long-term, sustainable growth and value for all
our stakeholders.
Our Purpose
External
opportunities
and threats
Resources
The assets, skills and
knowledge to create our
competitive advantage:
We respond to external
opportunities and mitigate
threats coming from:
Property
A high quality portfolio of land, buildings
and identified future opportunities.
Our market
The London office property
market, with focus on the
four key trends.
→ See pages
8 to 13
Risks
Strategic, Operational,
Financial and Reputational
risks considered over short,
medium and long-term
timescales.
→ See pages
46 to 55
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.
Underpinned by
Our Values
and Culture
Aligned with
Our strategy
Our strategic pillars:
— Growth
— Property
— Sustainability
— People
— Financing
→ See pages
16 to 19
Business activities
01/
r u c t u re and funding
S t
02/
Stakeholders
Generation of long-term value
for our stakeholders
M
a
n
a
g
e
Sustainability
Working for the long-term benefit
of our stakeholders, local communities
and the environment underpins
all our activities.
D
e
v
e
o
p
l
04/
Let
03/
01/ Structure
and funding
02/ Develop
03/ Let
04/ Manage
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.
Look to let our properties
on flexible terms to a diverse,
financially robust tenant base.
Through proactive asset
management we drive the
rental value forward whilst
maximising occupancy.
1
2
3
4
5
6
7
Shareholders
Partners
Suppliers and
contractors
Occupiers
(tenants/customers)
Employees
Local communities
Government and other
regulatory bodies
20
Helical plc — Annual Report and Accounts 2022
21
→ See page
74
Helical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Value creation
Enhanced value for
reinvestment or realisation
Property
People
and culture
Market
expertise
Relationships
and reputation
Financing
£938.8m
Investment property value
£89.5m
Total property return
7
Office buildings certified
or targeting BREEAM “Excellent”
or above
96.3%
Average staff retention
11.8 years
Average length of employee service
£160m
Acquisition of 100 New Bridge
Street, EC4
95.8%
of all contracted rent collected
3.2%
See-through average
cost of debt
36.4%
Loan to value
Key performance indicators
We measure our performance against our strategic objectives, using
several financial and non-financial Key Performance Indicators (“KPIs”).
Measuring our
performance
The KPIs have been selected as the most appropriate measures to
assess our progress in achieving our strategy, successfully applying
our business model and generating value for our Shareholders.
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
572p
2022
2021
2020
2019
2018
* Calculated using EPRA net assets.
572
533
524
494
468*
Description
The Group’s main objective is
to maximise growth in net asset
value per share, which we seek
to achieve through increases
in investment portfolio values
and from retained earnings from
other property related activity.
EPRA net 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 34 to the
financial statements.
Performance
The Group targets 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
2022 increased by 7.3% to 572p
(31 March 2021: 533p).
Link to remuneration
Performance Share Plan 2014
33.3% (2023: 37.5%) of the
maximum Performance Share
Plan (“PSP”) award is based
on the compound growth in
net asset value (“NAV”) over
three years.
Link to strategic pillar
• Growth
TOTAL ACCOUNTING RETURN
15.0%
15.0%
2022
2021
2020
2019
2018
3.3%
7.7%
8.4%
5.3%
EPRA TOTAL ACCOUNTING RETURN
10.2%
2022
2021
2020
2019
10.2%
4.5%
9.3%
8.0%*
2018
1.0%*
* Calculated using EPRA net assets.
22
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 2022 was 15.0%
(2021: 3.3%).
Link to remuneration
Annual Bonus Scheme 2018
40% of the maximum bonus
is payable based on the Total
Accounting Return (growth
in net asset value plus dividends).
Link to strategic pillar
• Growth
Link to remuneration
Annual Bonus Scheme 2018
For the year to 31 March 2023,
40% of the maximum bonus is
payable based on the EPRA Total
Accounting Return (growth
in net asset value plus dividends).
Link to strategic pillar
• Growth
Description
Total Accounting Return is the
growth in the net asset value of
the Group plus dividends paid in
the reporting period, expressed
as a percentage of the net asset
value at the beginning of the
period. The metric measures the
growth in Shareholders’ Funds
each period and is expressed as
an absolute measure.
Description
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 period,
expressed as a percentage of the
EPRA net tangible asset value at
the beginning of the period.
Performance
The Group targets an EPRA
Total Accounting Return of
5-10%.
The Total Accounting Return
on EPRA net assets in the year
to 31 March 2022 was 10.2%
(2021: 4.5%).
TOTAL SHAREHOLDER RETURN
1.7%
1 Year
%pa
3 Years
%pa
5 Years
%pa
10 Years
%pa
15 Years
%pa
20 Years
%pa
1.7%
13.0%
20.8%
10.2%
5.3%
6.9%
8.4%
4.7%
5.6%
10.7%
7.2%
8.9%
1.9%
5.3%
0.4%
6.9%
6.2%
5.6%
● Growth over all years to 31/03/22.
● Growth in FTSE All-Share Return Index over all years to 31/03/22.
● Growth in FTSE 350 Real Estate Super Sector Return Index over all years
to 31/03/22.
Link to remuneration
Performance Share Plan 2014
33.3% (2023: 37.5%) of the
maximum PSP award is based
on the Group’s TSR performance
compared with its peers.
Link to strategic pillar
• Growth
Description
Total Shareholder Return is
a measure of the return on
investment for Shareholders.
It combines share price
appreciation and dividends paid
to show the total return to the
Shareholder expressed as an
annualised percentage.
Performance
The Group targets being in the
upper quartile when compared
to its peers.
The Total Shareholder Return in
the year to 31 March 2022 was
1.7% (2021: 21.2%).
23
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Key performance indicators
continued
MSCI PROPERTY INDEX
10.7%
1 Year
%pa
3 Years
%pa
5 Years
%pa
10 Years
%pa
20 Years
%pa
3.3%
4.4%
10.7%
7.9%
9.1%
9.6%
13.1%
9.1%
8.1%
11.6%
● Helical
● MSCI Central London Offices Total Return Index
Source: MSCI
AVERAGE LENGTH OF EMPLOYEE SERVICE
AND AVERAGE STAFF TURNOVER
11.8 yrs
Average length of service at 31 March – years
2022
2021
2020
2019
2018
11.8 years
11.0 years
10.0 years
8.7 years
7.9 years
Staff turnover during the year to 31 March – %
3.7%
3.6%
10.3%
6.9%
15.2%
2022
2021
2020
2019
2018
24
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. Helical’s
ungeared performance for the
year to 31 March 2022 was
10.7% (2021: 7.0%). This
compares to the MSCI Central
London Offices Total Return
Index of 7.9% (2021: -1.7%) and
the upper quartile return of 9.9%
(2021: 1.6%).
Helical’s share of the
development portfolio (1% 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.
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.
The Group targets staff turnover
to be less than 10% per annum.
Performance
The average length of service
of the Group’s employees at
31 March 2022 was 11.8 years
and the average staff turnover
during the year to 31 March
2022 was 3.7%.
Link to remuneration
Annual Bonus Scheme 2018
35% (2023: 30%) of the
Annual Bonus Scheme 2018
performance criteria is based
on the Group’s performance
compared to the MSCI Central
London Offices Capital Index,
with target performance being
to match the index and
outperformance exceeding
it by 3.25% (2023: 4.5%).
Performance Share Plan 2014
33.3% (2023: 25%) 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.
Link to strategic pillar
• Property
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 Executive
Directors 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.
Link to strategic pillar
• People
BREEAM AND EPC RATINGS
Building
Completed properties
The Warehouse and Studio, EC1
The Tower, EC1
25 Charterhouse Square, EC1
Kaleidoscope, EC1
55 Bartholomew, EC1
Development pipeline
33 Charterhouse Street, EC1
100 New Bridge Street, EC4
1 Certified at design stage.
2 Targeted
BREEAM rating
EPC
rating
Excellent (2014)
Excellent (2014)
Excellent (2014)
Excellent (2014)
Excellent (2014)
B
B
B
B
B
Outstanding (2018)1
Outstanding (2018)2
A2
A2
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 completed
buildings (99% by portfolio 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 2022, seven of
our ten (31 March 2021: six
of our nine) office buildings
had achieved, or were targeting,
a BREEAM certification of
“Excellent” or “Outstanding”.
These seven buildings account
for c.88% of the portfolio
by value.
Link to remuneration
Annual Bonus Scheme 2018
10% of the maximum Annual
Bonus is payable based
on meeting ESG objectives.
Link to strategic pillar
• Sustainability
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Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Our portfolio
London
Portfolio
6
2
3
4
1
5
7
Helical’s portfolio comprises income producing multi-let offices,
office refurbishments and developments and a mixed use
commercial/residential scheme.
As of 31 March 2022, London represented 97% and Manchester
3% of the investment property portfolio. As evidenced by the
recent acquisition of 100 New Bridge Street, EC4 our strategy is
to continue to increase our Central London holdings, focusing on
areas where we see strong tenant demand and growth potential.
1 33 Charterhouse Street EC1
5 100 New Bridge Street EC4
2 25 Charterhouse Square EC1
6 The Bower EC1
3 Kaleidoscope EC1
7 The Loom E1
4 Barts Square EC1
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Helical plc — Annual Report and Accounts 2022
27
Strategic ReportHelical plc — Annual Report and Accounts 2022 Our portfolio
continued
Kaleidoscope,
EC1
Our 88,581 sq ft office building located directly above the Farringdon East
Elizabeth Line station is let to TikTok Information Technologies UK Limited
on a 15-year lease term at an annual rent of £7.6m. TikTok have recently
completed their fit out works and are beginning occupation of the building.
Development work completed
in December 2019, 16 months
after commencing
Helical was granted a 150-year lease over the
site in March 2018, entering into a development
agreement with TfL/Crossrail. The development
of Kaleidoscope commenced on site in August
2018 and was completed in December 2019,
becoming the first over station development
to complete in the Crossrail network.
The striking architecture of the building with
its vibrant terracotta fins is inspired by the
surrounding location. The office was designed
to provide open, spacious floors which create a
wholly modern office environment. The building
is amenity rich offering the tenant, TikTok, a
spectacular roof terrace overlooking Smithfield
market and extensive end of journey facilities.
The building also delivers strong environmental
credentials, with energy provided by connection
to the Citigen District Energy Network.
Entire building let
to TikTok Information
Technologies UK Limited
for a 15-year term
88,581 sq ft
office located directly
above the newly opened
Farringdon East
Elizabeth Line station
SUSTAINABILITY RATINGS
BREEAM
EPC
Excellent
B
→ Find out more:
helical.co.uk/portfolio
28
29
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Our portfolio
continued
33 Charterhouse
Street, EC1
The development of our 205,369 sq ft office building, in a 50:50 joint
venture with AshbyCapital, is due to reach practical completion in
September 2022. The building’s external envelope is complete and
work is now focused on the delivery of the services and completing
the internal finishes.
The building will
achieve 40% lower
embodied carbon
than the RIBA
benchmark
The building app
will enable a
contactless arrival
for occupiers and
guests
205,369 sq ft
office due to reach
practical completion
in September 2022
The newly named “JJ Mack Building” is situated just 100m from
Farringdon Station and will provide excellent connectivity via the
Elizabeth Line, which opened on 24 May 2022. Once completed it
will provide a best-in-class “Net Zero” office development, meeting
the highest ESG credentials, as evidenced by its BREEAM 2018 New
Construction “Outstanding” design rating and anticipated NABERS 5*
rating. It will also provide a technologically pioneering environment
with smart building systems and a fully integrated building
management app for occupiers.
The site, held on a 150 year long leasehold from the City of London
Corporation, was acquired in May 2019. The joint venture immediately
sought to improve the planning consent that had been previously
granted. A spacious double height reception was introduced and
the floorplates refined to provide flexible, open working environments
for future tenants. The energy strategy was significantly modified
to enhance the sustainability of the building, including the introduction
of a connection to the adjacent Citigen District Energy Network which
will benefit from continued investment into renewable and progressive
heat and energy generating technologies.
→ Find out more:
helical.co.uk/portfolio
SUSTAINABILITY RATINGS
BREEAM
NABERS
EPC
1 Certified of design stage
2 Targeted
Outstanding1
5*2
A2
30
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continued
100 New Bridge Street,
EC4
Sales completed
on 222 of 236
apartments, including
all of Phase One
55 Bartholomew
Sold post year end
at a 3% premium to
31 March 2022 book value
Winner
of Housing Design Award
and RIBA London Award
On 1 March, Helical completed the acquisition
of 100 New Bridge Street, EC4 for £160m.
The 167,026 sq ft office building is currently
let to international law firm Baker McKenzie,
whose lease expires in December 2023.
We propose to carry out a major, sustainability
led refurbishment to create a carbon friendly
new build office that puts occupier amenity
and wellbeing at its centre. We also envisage
undertaking significant public realm
improvements around the site to greatly
improve the environment for both tenants
and the general public.
Acquired in
March 2022
for total gross
cash consideration
of £160m
Originally
developed in 1992,
the building will
be sustainably
refurbished to
deliver a best-in-
class modern office
167,026 sq ft
office building
currently let to
international law
firm Baker McKenzie
32
Barts Square, EC1
55 Bartholomew
At 55 Bartholomew, EC1 we have completed
three lettings to Push Gaming, William Fry
and Zero Gravity. Following the completion
of these lettings, which totalled 4,835 sq ft,
the building is now 77% let with just the third
floor still available.
On 20 May 2022 we exchanged contracts to
dispose of the property to a private European
investor for a consideration of £16.5m (our share
£7.6m), reflecting a net initial yield of 4.5% and
a 3% premium to 31 March 2022 book value.
Residential/Retail
At Barts Square, EC1, we have completed the
sale of the last remaining apartment in Phase
One. In Phase Two, we completed the sale of
13 apartments during the year and one further
apartment sale had exchanged which has
now completed. Of the remaining 14 units
available at the year end, one has since been
sold and two are under offer, leaving 11
available in this 236-unit residential scheme.
The Barts Square residential development
has been recognised for its outstanding
design and sympathetic approach to its
surroundings by winning a Housing Design
Award, the only awards promoted by all five
major professional institutions, and a RIBA
London Award.
The retail space in Phase One is fully let to
Stem + Glory and Halfcup. One of the Phase
Two retail units is let to BEERS London and
since the year end a further unit has been
let to Nest, a modern British restaurant.
The remaining four retail units are currently
being marketed. The landscaping of the
new public square is complete, offering
extensive public amenity.
SUSTAINABILITY RATINGS
BREEAM
EPC
Excellent
B
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Our portfolio
continued
The Bower, EC1
The Bower is a landmark estate comprising 312,573 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 Spring 2023.
The Warehouse and The Studio
The Warehouse comprises 122,858 sq ft of
offices and The Studio 18,283 sq ft of offices,
both fully let, with 10,298 sq ft of retail space
across the two buildings.
In June 2021 we completed a lease renewal
with Stripe at the Warehouse, extending the
lease by three years. We have also completed
all the rent reviews for office tenants in The
Warehouse which has added £782,000 to its
contracted rent, a 13.2% increase.
The retail unit in The Studio has been let to
28 Well Hung, a steak restaurant, which will
open in June.
The Tower
The Tower offers 171,432 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.
We have let the 17th floor, previously let to
Finablr, to Verkada on a five-year lease for
a rent which is in line with the 31 March 2021
ERV. The 12th floor, which following the
culmination of a specific project, was
returned in October 2021 by Brilliant Basics,
is now under offer. They continue to occupy
three floors at The Tower.
SUSTAINABILITY RATINGS
BREEAM
EPC
Excellent
B
312,573 sq ft
of innovative, high
quality office space
along with 21,059 sq
ft of restaurant and
retail space
13.2% increase
in contracted rent
since 31 March 2021
due to conclusion
of rent reviews
97% of offices let
across The Warehouse,
The Studio and
The Tower
The Loom, E1
At this 108,600 sq ft former Victorian wool warehouse,
we have completed three leases, totalling 8,623 sq ft,
at an average rent of £53 psf. Following these lettings,
The Loom is 80% let with 21,803 sq ft across nine
units available to let. We anticipate further units to
be returned in the coming year as lease events take
place, including original unrefurbished units, giving
us the opportunity to undertake asset management
activities to capture reversionary potential.
SUSTAINABILITY RATINGS
EPC
B
96% let
following 9,268 sq ft letting of
newly refurbished first and part
ground floor to Entain
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 newly refurbished first floor and one of the two ground
floor units have been let to Entain, the FTSE listed betting
and gaming company, to establish a global innovation hub.
Following this letting the building is 96% let, with the final unit
now under offer.
SUSTAINABILITY RATINGS
BREEAM
EPC
Excellent
B
Three new lettings
in the year, totalling
8,623 sq ft
34
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Our portfolio
continued
The property portfolio in numbers
The
Power House,
W4
The Power House is a listed building, providing 21,268 sq
ft of office and recording studio space, on Chiswick High
Road and is fully let on a long lease to Metropolis Music
Group. The RPI linked rent review was concluded in
November, increasing contracted rent by 16.4%. The
capital works to improve the roof, undertaken on behalf
of the tenants, are due to complete shortly.
16.4%
increase in
contracted rent
SUSTAINABILITY RATINGS
EPC
C
Portfolio analytics
SEE-THROUGH TOTAL PORTFOLIO BY FAIR VALUE
Investment
£m
Investment
%
Development
£m
Development
%
London Offices
– Completed properties
– Development pipeline
London Residential
Total London
Manchester Offices
– Completed properties
Total Manchester
Total Core
Other
Total Non-Core Portfolio
Total
783.9
282.3
–
1,066.2
31.0
31.0
1,097.2
0.1
0.1
1,097.3
71.5
25.7
0.0
97.2
2.8
2.8
100.0
0.0
0.0
100.0
SEE-THROUGH LAND AND DEVELOPMENT PORTFOLIO
London Residential
Land/retail
Total
CAPITAL EXPENDITURE
We have a committed and planned development and refurbishment programme.
–
–
8.3
8.3
–
–
8.3
2.4
2.4
0.0
0.0
77.7
77.7
0.0
0.0
77.7
22.3
22.3
Total
£m
783.9
282.3
8.3
1,074.5
31.0
31.0
1,105.5
2.5
2.5
Total
%
70.8
25.5
0.7
97.0
2.8
2.8
99.8
0.2
0.2
10.7
100.0
1,108.0
100.0
Book value
£m
Fair value
£m
8.3
2.1
10.4
8.3
2.4
10.7
Surplus
£m
0.0
0.3
0.3
Fair value
%
77.7
22.3
100.0
Trinity,
Manchester
We have completed three office lettings in the year
with the first floor let to British Engineering, the
remaining part of the sixth floor let to Waterman
Group and the seventh floor let to AEW Architects.
These lettings total 17,541 sq ft and achieved a
combined premium of 4.6% to the 31 March 2021
ERV. Following the completion of these lettings
the 58,533 sq ft historic building, which was
comprehensively remodelled in 2019, is 76% let.
Following the year end we completed the sale of the
property to clients of Mayfair Capital, for a headline
purchase price of £34.55m, which reflects a net gain
of c.£2.0m against the 31 March 2022 book value.
SUSTAINABILITY RATINGS
EPC
B
36
Property
Investment – committed
– 33 Charterhouse Street, EC1
Investment – anticipated
– 100 New Bridge Street, EC4
Capex budget
(Helical’s share)
£m
Remaining
spend
(Helical’s share)
£m
Pre-redeveloped
space
sq ft
New space
sq ft
Total
completed
space
sq ft
Completion
date
66.0
13.1
n/a
205,369
205,369 September 2022
101.2
101.2
167,026
c.18,000
c.185,000
Early 2025
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.
Investment portfolio
London Offices
– Completed properties
– Development pipeline
Total London
Manchester Offices
– Completed properties
Total Manchester
Other
Total
76%
let following three lettings,
totalling 17,541 sq ft in the year
58,533 sq ft
office refurbishment
Sold post year end
for £34.55m, c.£2.0m
above 31 March 2022
book value.
Fair
value
weighting
%
Passing
rent
£m
71.5
25.7
97.2
2.8
2.8
0.0
28.5
7.2
35.7
0.7
0.7
0.0
Contracted
rent
£m
37.6
7.3
44.9
1.4
1.4
0.1
%
78.3
19.8
98.1
1.9
1.9
0.0
%
81.1
15.7
96.8
3.0
3.0
0.2
ERV
£m
41.6
23.6
65.2
1.8
1.8
0.1
62.0
35.2
97.2
2.7
2.7
0.1
100.0
36.4
100.0
46.4
100.0
67.1
100.0
ERV change
like-for-like
%
%
0.1
0.0
0.1
-0.4
-0.4
0.0
0.1
37
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
The property portfolio in numbers
continued
Rent lost at break/expiry
Rent reviews and uplifts on lease renewals
New lettings – London
New lettings – Manchester
Total increase in the year from asset management activities
Contracted rent increase from purchases of London Offices
Net increase in contracted rents in the year
Investment portfolio
VALUATION MOVEMENTS
See-through
total portfolio contracted
rent
£m
(2.6)
1.0
2.4
0.6
1.4
7.2
8.6
London Offices
– Completed properties
– Development pipeline
Total London
Manchester Offices
– Completed properties
Total Manchester
Total
PORTFOLIO YIELDS
London Offices
– Completed properties
– Development pipeline
Total London
Manchester Offices
– Completed properties
Total Manchester
Total
Valuation change
incl. sales and
purchases
%
Valuation change
excl. sales and
purchases
%
Investment
portfolio
weighting
31 March 2022
%
Investment
portfolio
weighting
31 March 2021
%
5.4
5.3
5.4
12.5
12.5
5.6
5.4
17.2
6.8
12.5
12.5
7.0
71.5
25.7
97.2
2.8
2.8
100.0
88.5
8.2
96.7
3.3
3.3
100.0
EPRA topped
up NIY
31 March 2022
%
EPRA topped
up NIY
31 March 2021
%
Reversionary
yield
31 March 2022
%
Reversionary
yield
31 March 2021
%
True equivalent
yield
31 March 2022
%
True equivalent
yield
31 March 2021
%
4.2
4.2
4.2
4.1
4.1
4.2
4.5
n/a
4.5
2.4
2.4
4.5
4.8
4.5
4.7
5.4
5.4
4.7
5.1
5.6
5.3
5.9
5.9
5.3
4.9
4.2
4.6
5.3
5.3
4.6
5.0
4.9
4.9
5.7
5.7
5.0
SEE-THROUGH CAPITAL VALUES, VACANCY RATES AND UNEXPIRED LEASE TERMS
London Offices
– Completed properties
– Development pipeline
Total London
Manchester Offices
– Completed properties
Total Manchester
Total
Capital value
31 March
2022
£ psf
Capital value
31 March
2021
£ psf
Vacancy rate
31 March
2022
%
Vacancy rate
31 March
2021
%
WAULT
31 March
2022
Years
WAULT
31 March
2021
Years
1,289
1,086
1,213
530
530
1,175
1,215
674
1,081
465
465
1,040
6.9
0.0
5.4
23.9
23.9
6.7
5.8
n/a
5.8
54.1
54.1
10.5
6.3
1.7
5.6
6.1
6.1
5.6
6.9
n/a
6.9
8.4
8.4
6.9
SEE-THROUGH LEASE EXPIRIES OR TENANT BREAK OPTIONS
% of rent roll
Number of leases
Average rent per lease (£)
Year to
2023
9.5
17
Year to
2024
25.8
28
Year to
2025
4.0
10
Year to
2026
0.8
4
Year to
2027
10.0
18
2027
onward
49.9
31
258,280
427,422
186,003
96,997
256,179
741,267
TOP 15 TENANTS
We have a strong rental income stream and a diverse tenant base. The top 15 tenants account for 79.3% of the total rent roll.
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Total
Tenant
TikTok
Baker McKenzie
Farfetch
WeWork
Brilliant Basics
VMware
Anomaly
Viacom
Allegis
Dentsu
Stripe
Verkada
Incubeta
Openpayd
Snowflake
LETTING ACTIVITY – NEW LEASES
Tenant industry
Technology
Legal services
Online retail
Flexible offices
Technology
Technology
Marketing
Media
Media
Marketing
Financial services
Technology
Marketing
Financial services
Technology
London
– The Tower, EC1
– The Warehouse, EC1
– The Loom, E1
– 25 Charterhouse Square, EC1
– 55 Bartholomew, EC1
Total London
Total Manchester
Total
Area
sq ft
Contracted rent
(Helical’s share)
£
11,327
2,524
8,623
9,268
4,835
36,577
17,541
54,118
963,000
115,000
455,000
715,000
239,000
2,487,000
557,000
3,044,000
Contracted rent
£m
7.6
7.0
4.3
4.0
2.4
2.2
1.4
1.2
1.1
1.1
1.0
1.0
0.9
0.9
0.8
Rent roll
%
16.5
15.2
9.3
8.6
5.1
4.7
3.0
2.5
2.3
2.3
2.1
2.1
2.0
1.9
1.7
36.9
79.3
Change to
31 March 2021
ERV (excl. Plug
and Play
and managed
lettings)
%
Average
lease term to
expiry
Years
-0.2
13.9
2.1
0.5
1.3
1.1
4.6
1.8
5.00
15.00
4.33
10.00
3.67
6.00
10.00
7.00
Rent
£ psf
85.02
45.56
52.82
77.13
76.00
71.10
31.77
57.57
38
39
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Financial review
Tim Murphy
Chief Financial Officer
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.
£89.5mSee-through total
property return
2022 Performance
Financial highlights
Overview
The strong performance for the year was the result of significant
valuation gains from our sustainable, best-in-class investment
portfolio and the Group’s ongoing development activities.
The results were further improved by gains in the fair value of the
Group’s derivatives and the reversal of previously recognised
deferred tax on the Group’s election to become a REIT.
The acquisition of 100 New Bridge Street, EC4 added to the
development pipeline and resulted in an increased LTV of 36.4%.
Results for the year
The profit before tax for the year of £72.9m (2021: £20.5m) includes
revenue from rental income and development management of £51.1m,
offset by direct costs of £14.2m. The net gain on sale and revaluation
of investment properties added £33.3m and joint venture activities a
further £20.7m. Administration expenses of £16.8m and finance costs
of £19.2m were offset by a gain in fair value of derivatives of £18.0m.
The Group holds a significant proportion of its property assets in joint
ventures. As the risk and rewards of ownership of these underlying
properties are the same as those it wholly owns, Helical supplements
its IFRS disclosure with a “see-through” analysis of alternative
performance measures, which looks through the structure to show
the Group’s share of the underlying business.
40
IFRS PERFORMANCE
PROFIT AFTER TAX
£88.9m
(2021: £17.9m)
EARNINGS PER SHARE (EPS)
72.8p
(2021: 14.8p)
DILUTED NAV PER SHARE
551p
(31 March 2021: 492p)
EPRA PERFORMANCE
EPRA PROFIT
£6.4m
(2021: loss of £2.2m)
EPRA EPS
5.2p
(2021: loss of 1.8p)
EPRA NTA PER SHARE
572p
(31 March 2021: 533p)
TOTAL ACCOUNTING RETURN
TOTAL ACCOUNTING RETURN ON EPRA NTA
15.0%
(2021: 3.3%)
10.2%
(2021: 4.5%)
£31.2m
Group share of
net rental income
£6.6m
Development
profits
£51.7m
Net gain on sale
and revaluation
of investment properties
The see-through results for the year to 31 March 2022 include net
rental income of £31.2m, a net gain on sale and revaluation of the
investment portfolio of £51.7m and development profits of £6.6m,
leading to a Total Property Return of £89.5m (2021: £48.6m). Total
see-through administration costs of £17.1m (2021: £14.8m), see-
through net finance costs of £19.7m (2021: £14.8m) and see-through
derivative financial instrument gains of £18.0m (2021: £2.9m)
contributed to an IFRS pre-tax profit of £72.9m (2021: £20.5m).
The election to become a REIT from 1 April 2022 allowed the release
of the previously recognised deferred tax provision which contributed
to a tax credit for the year of £16.0m (2021: charge of £2.6m).
The post tax profit for the year was £88.9m (2021: £17.9m) and the
EPRA net tangible asset value per share increased by 7.3% to 572p
(31 March 2021: 533p).
The Company has proposed a final dividend of 8.25p per share
(2021: 7.40p) which, if approved by Shareholders at the 2022 AGM,
will be payable on 29 July 2022. The total dividend paid or payable
in respect of the year to 31 March 2022 will be 11.15p (2021: 10.10p),
an increase of 10.4%.
The Group’s real estate portfolio, including its share of assets held
in joint ventures, increased to £1,108.1m (31 March 2021: £857.0m)
primarily because of the acquisition of 100 New Bridge Street, EC4,
net revaluation gains on the investment portfolio and capital
expenditure at 33 Charterhouse Street, EC1.
The acquisition of 100 New Bridge Street, EC4 and capital
expenditure on the development of 33 Charterhouse Street, EC1
resulted in an increase in the Group’s see-through loan to value to
36.4% (31 March 2021: 22.6%). The Group’s weighted average cost
of debt was 3.2% (31 March 2021: 3.5%) and the weighted average
debt maturity was 3.0 years (31 March 2021: 3.2 years). The average
maturity of the facilities would increase to 3.7 years on exercise of
the available extension options, on a fully utilised basis.
At 31 March 2022, the Group had unutilised bank facilities of £99.0m
and cash of £33.3m on a see-through basis. These are primarily
available to fund the development of 33 Charterhouse Street, EC1
and future property acquisitions.
41
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Financial review
continued
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.
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.
Total Property Return £m
MSCI Property Index %
£89.5m
10.7%
2022
2021
2020
2019
2018
89.5
48.6
83.9
81.4
68.8
2022
2021
2020
2019
2018
7.0
10.7
9.6
10.1
10.8
See-through Total Accounting Return
Total Accounting Return is the growth in the net asset value of the
Group plus dividends paid in the reporting period, 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.
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 period, expressed as a percentage of the EPRA net
tangible asset value at the beginning of the period.
Total Accounting Return on IFRS net assets %
Total Accounting Return on EPRA net tangible assets %
15.0%
10.2%
3.3
7.7
8.4
5.3
15.0
2022
2021
2020
2019
2018
1.0*
4.5
10.2
9.3
8.0*
* Calculated using EPRA net assets.
2022
2021
2020
2019
2018
42
Earnings per share
The IFRS earnings per share increased from 14.8p to 72.8p and are
based on the after tax earnings attributable to ordinary Shareholders
divided by the weighted average number of shares in issue during
the year.
On an EPRA basis, the earnings per share were 5.2p compared to a
loss per share of 1.8p in 2021, reflecting the Group’s share of net rental
income of £31.2m (2021: £25.0m) and development profits of £6.6m
(2021: losses of £0.3m), but excluding gains on sale and revaluation
of investment properties of £51.7m (2021: £23.9m).
Net asset value
IFRS diluted net asset value per share increased by 12.0% to 551p per
share (31 March 2021: 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 net tangible asset value per share increased by 7.3% to 572p
per share (31 March 2021: 533p). This movement arose principally
from a total comprehensive income (retained profits) of £88.9m
(2021: £17.9m), less £12.6m of dividends (2021: £10.5m).
EPRA net disposal value per share increased by 13.6% to 551p per
share (31 March 2021: 485p).
Income statement
Rental income and property overheads
Gross rental income for the Group in respect of wholly owned
properties increased to £35.3m (2021: £28.0m), mainly reflecting the
letting of Kaleidoscope, EC1 in March 2021, with gross rents in joint
ventures also increasing to £0.3m (2021: £0.2m). Property overheads
in respect of wholly owned assets and in respect of those assets in
joint ventures increased to £4.4m (2021: £3.2m). Overall, see-through
net rents increased by 25.0% to £31.2m (2021: £25.0m).
Included within gross rental income is £5.8m (31 March 2021:
reduction of £0.4m) of accrued income for rent free periods.
The table below demonstrates the movement of the accrued income
balance for rent free periods granted and the respective rental income
adjustment over the four years to 31 March 2025, based on the tenant
leases as at 31 March 2022. The actual adjustment will vary
depending on lease events such as new lettings and early
terminations and future acquisitions or disposals.
Year to 31 March 2022
Year to 31 March 2023
Year to 31 March 2024
Year to 31 March 2025
Rent collection
Rent collected to date
Rent under discussion
Rent concessions
Accrued income
£000
Adjustment to
rental income
£000
23,114
27,557
23,757
20,495
5,818
4,443
(3,800)
(3,262)
March 2021 –
December 2021
quarters %
95.8
2.2
2.0
At 23 May 2022, the Group had collected 95.8% of all rent contracted
and payable for the March, June, September and December 2021
quarters.
Development profits
In the year, from our role as development manager at 33 Charterhouse
Street, EC1, we recognised £1.3m of fees. Additional fees of £0.1m
were recognised for carrying out accounting and corporate services
at Barts Square, EC1 and 33 Charterhouse Street, EC1.
Profits on the sales of a retail site at Kingswinford and land at Aycliffe of
£1.5m were recognised, as well as the write back of provisions made in
previous periods on two retail projects, at East Ham and Cortonwood,
totalling £2.3m. A further £0.8m of development income on closing
out legacy projects, offset by other costs of £0.2m, contributed to
a net development profit in the Group of £5.8m (2021: £0.6m).
Share of results of joint ventures
The revaluation of our investment assets held in joint ventures
generated a surplus of £18.5m (2021: £6.4m). A profit of £0.7m
(2021: loss of £0.9m) was recognised in respect of sales at our Barts
Square, EC1 residential development.
Finance, administration and other sundry costs totalling £0.5m (2021:
£1.1m) were incurred. An adjustment to reflect our economic interest
in the Barts Square, EC1 development to its recoverable amount
generated a gain of £0.8m, and after a tax credit of £1.2m (2021:
charge of £0.6m), there was a net profit from our joint ventures of
£20.7m (2021: £2.4m).
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 gain on sale and
revaluation, including in joint ventures, of £51.7m (2021: £23.9m).
Administrative expenses
Administration costs in the Group, before performance related
awards, increased marginally from £9.3m to £9.6m.
Performance related share awards and bonus payments, before
National Insurance costs, increased to £6.0m (2021: £4.3m), reflecting
the strong performance of the business. Of this amount, £3.2m (2021:
£2.0m), 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. NIC incurred in the year on performance related awards was
£1.2m (2021: £0.8m).
Administrative expenses (excluding performance
related awards)
Performance related awards
NIC
Group
In joint ventures
Total
2022
£000
9,598
6,019
1,151
16,768
295
17,063
2021
£000
9,276
4,341
799
14,416
432
14,848
Finance costs and derivative financial instruments
Total finance costs before cancellation of loans, including in joint
ventures, reduced to £13.8m (2021: £14.9m). The cost of early
redemption of the development facility for Kaleidoscope, EC1 and the
term loan with Aviva, totalling £5.9m (2021: £nil), allowed the Group
to take advantage of the lower cost of debt provided by the £400m
Revolving Credit Facility, which will be reflected in lower finance costs
in future years.
2022
£000
2021
£000
Interest payable on secured
bank loans
– subsidiaries
10,169
10,567
– joint ventures
Amortisation of refinancing costs – subsidiaries
Sundry interest and bank
charges
Interest capitalised
– subsidiaries
– joint ventures
– joint ventures
Total before cancellation of loans
Cancellation of loans
– subsidiaries
Total
2,407
1,010
2,169
181
(2,142)
13,794
5,886
19,680
1,319
1,111
2,401
–
(514)
14,884
–
14,884
The significant movement upwards in medium and long-term interest
rate projections during the year contributed to a credit of £18.0m
(2021: £2.9m) on the mark-to-market valuation of the derivative
financial instruments.
43
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Financial review
continued
Taxation
The Group elected to become a REIT, effective from 1 April 2022, and will be exempt from UK corporation tax on the profit of its property
activities that fall within the REIT regime. Helical will continue to pay corporation tax on its profits that are not within this regime. As a result,
the previously recognised deferred tax liability of £13.5m in the Group (£1.7m in joint ventures) has been released, with a credit of £14.9m
in the Income Statement and a charge of £1.4m recognised directly in the Statement of Changes in Equity.
The current tax credit for the year was £1.1m (2021: charge of £0.9m), resulting in a tax credit on profit on ordinary activities of £16.0m
(2021: charge of £2.6m).
Dividends
The interim dividend paid on 31 December 2021 of 2.90p was an increase of 7.4% on the previous interim dividend of 2.70p. The Company
has proposed a final dividend of 8.25p, an increase of 11.5% on the previous year (2021: 7.40p), for approval by Shareholders at the 2022 AGM.
If approved, the total dividend paid or payable in respect of the results for the year to 31 March 2022 will be 11.15p (2021: 10.10p), an increase
of 10.4%.
The final dividend, if approved by Shareholders, will be paid out of distributable reserves generated from the Group’s activities prior to its
conversion into a REIT.
Balance sheet
Shareholders’ Funds
Shareholders’ Funds at 1 April 2021 were £608.2m. The Group’s results for the year added £88.9m (2021: £17.9m), representing the total
comprehensive income for the year. Movements in reserves arising from the Group’s share schemes increased funds by £2.5m. The Company
paid dividends to Shareholders during the year of £12.6m. The net increase in Shareholders’ Funds from Group activities during the year was
£78.8m to £687.0m.
Investment portfolio
Valuation at 31 March 2021
Acquisitions
Capital expenditure
Letting costs amortised
Revaluation surplus
– wholly owned
– wholly owned
– joint ventures
– wholly owned
– joint ventures
– wholly owned
– joint ventures
Economic interest adjustment
– joint ventures
Wholly
owned
£000
756,875
160,000
5,520
–
(226)
–
39,331
–
–
In joint
ventures
£000
82,516
–
–
35,074
–
(9)
–
18,521
(282)
See-through
£000
839,391
160,000
5,520
35,074
(226)
(9)
39,331
18,521
(282)
Head leases
capitalised
£000
6,568
Lease
incentives
£000
(18,934)
–
(14)
(30)
–
–
–
–
–
–
–
–
–
–
(6,020)
(50)
2
Book
value
£000
827,025
160,000
5,506
35,044
(226)
(9)
33,311
18,471
(280)
Valuation at 31 March 2022
961,500
135,820
1,097,320
6,524
(25,002)
1,078,842
The Group acquired 100 New Bridge Street, EC4 for £160m and spent £40.6m on capital works across the investment portfolio, mainly
at 33 Charterhouse Street, EC1 (£35.0m), 100 New Bridge Street, EC4 (£3.7m), Kaleidoscope, EC1 (£0.6m), The Loom, E1 (£0.5m) and
25 Charterhouse Square, EC1 (£0.4m).
Revaluation gains added £57.9m to increase the see-through fair value of the portfolio, before lease incentives, to £1,097.3m (31 March 2021:
£839.4m). The accounting for head leases and lease incentives resulted in a book value of the see-through investment portfolio of £1,078.8m
(31 March 2021: £827.0m).
Debt and financial risk
In total, the see-through outstanding debt at 31 March 2022 of £440.9m (31 March 2021: £362.2m) had a weighted average interest cost of 3.2%
(31 March 2021: 3.5%) and a weighted average debt maturity of 3.0 years (31 March 2021: 3.2 years). The average maturity of the facilities would
increase to 3.7 years following exercise of the one-year extension 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 2022 – including commitment fees but excluding the amortisation of arrangement fees
£400m Revolving Credit Facility
£60m Revolving Credit Facility
Total wholly owned
In joint ventures
Total secured debt
Working capital
Total unsecured debt
Total debt
Total
facility
£000s
400,000
60,000
460,000
69,900
529,900
10,000
10,000
539,900
Total
utilised
£000s
400,000
–
400,000
40,889
440,889
–
–
440,889
Available
facility
£000s
–
60,000
–
29,011
89,011
10,000
10,000
99,011
Weighted
average
interest
%
Average
maturity of
facilities
Years
Average maturity
including
extensions*
Years
2.9
–
3.0
5.6
3.2
–
–
3.2
3.1
–
3.1
2.3
3.0
–
–
3.0
4.3
0.7
3.8
3.3
3.8
1.0
1.0
3.7
* Calculated on a fully utilised basis and assuming the exercise of the one-year extension of the Revolving Credit Facility and the one-year extension option of the joint venture development loan.
44
Secured debt
The Group arranges its secured investment and development facilities to suit its business needs as follows:
• £400m Revolving Credit Facility
The Group has a £400m Revolving Credit Facility in which all of its investment assets, other than Trinity, Manchester, are secured. The value
of the Group’s properties secured in this facility at 31 March 2022 was £870m (31 March 2021: £729m) with a corresponding loan to value of
46.0% (31 March 2021: 46.8%). The average maturity of the facility at 31 March 2022 was 3.1 years (31 March 2021: 3.3 years), increasing to
4.3 years on a fully utilised basis and following the one-year extension of the Revolving Credit Facility. The weighted average interest rate was
2.9% (31 March 2021: 3.7%).
• £60m Revolving Credit Facility
The Group has a £60m Revolving Credit Facility to provide short-term liquidity to acquire new property opportunities. The maturity of this
undrawn facility was 0.7 years and the weighted average interest rate was 3.2%, on a fully utilised basis.
• Joint venture facilities
The Group has a number of investment and development properties in joint venture with third parties and includes 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 2022 was 2.3 years (31 March 2021: 1.9 years) with a weighted average interest rate of 5.6% (31 March 2021: 6.5%). The average
interest rate will fall as the 33 Charterhouse Street, EC1 development facility is drawn down and would be 4.95% on a fully utilised basis,
reducing to 2.25% once the building is complete and let.
Unsecured debt
The Group’s unsecured debt is £nil (31 March 2021: £nil).
Cash and cash flow
At 31 March 2022, the Group had £132m (31 March 2021: £423m) of cash and agreed, undrawn, committed bank facilities including its share in
joint ventures, as well as £31.0m (31 March 2021: £28.1m) of uncharged property on which it could borrow funds.
Net borrowings and gearing
Total gross borrowings of the Group, including in joint ventures, have increased from £362.2m to £440.9m during the year to 31 March 2022. After
deducting cash balances of £33.3m (31 March 2021: £162.2m) and unamortised refinancing costs of £4.7m (31 March 2021: £6.1m), net borrowings
increased from £193.9m to £402.9m. The see-through gearing of the Group, including in joint ventures, increased from 31.9% to 58.6%.
See-through gross borrowings
See-through cash balances
Unamortised refinancing costs
See-through net borrowings
Shareholders’ Funds
See-through gearing – IFRS net asset value
31 March
2022
£440.9m
£33.3m
£4.7m
£402.9m
£687.0m
58.6%
31 March
2021
£362.2m
£162.2m
£6.1m
£193.9m
£608.2m
31.9%
Hedging
At 31 March 2022, the Group had £300.0m (31 March 2021: £280.8m) of borrowings protected by interest rate swaps, with an average effective
interest rate of 2.8% (31 March 2021: 3.1%) and average maturity of 3.3 years. The Group had a further £100.0m of floating rate debt (31 March
2021: £60.4m) with an effective rate of 3.5% (31 March 2021: 4.2%). In addition, the Group had £145m of interest rate caps at an average rate of
1.75% (31 March 2021: £240m at 1.75%) and with an average maturity of 1.3 years. In our joint ventures, the Group’s share of fixed rate debt was
£40.9m (31 March 2021: £9.4m) with an effective rate of 5.6% and no floating rate debt (31 March 2021: £11.6m with an effective rate of 3.1%),
with no interest rate swaps or caps as at 31 March 2022 (31 March 2021: interest rate caps of £35.3m at 1.5%).
31 March
2022
£m
Effective
interest rate
%
31 March
2021
£m
Effective interest
rate
%
Fixed rate debt
– Secured borrowings
Total
Floating rate debt
– Secured
Total
In joint ventures
– Fixed rate
– Floating rate
Total borrowings
300.0
300.0
100.0
400.0
40.9
–
440.9
2.8
2.8
3.51
3.0
5.62
–
3.2
280.8
280.8
60.4
341.2
9.4
11.6
362.2
1 This includes commitment fees on undrawn facilities. Excluding these would reduce the effective rate to 2.7%.
2 This includes commitment fees on undrawn facilities. Excluding these would reduce the effective rate to 4.95% (31 March 2021: 4.95%).
Tim Murphy
Chief Financial Officer
24 May 2022
3.1
3.1
4.21
3.3
10.72
3.1
3.5
45
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
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.
Helical’s approach
to risk management
Risk culture
Organisational structure
Tone from the top
Risk culture
Behaviours
Tone from the middle
Personal ethics
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 Group.
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, our Risk Management
Framework supports 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 106 to 109, for details of the
work undertaken by the Directors during the reporting
period). These risks and the Group’s appetite for risk
are discussed on the next page.
Risk appetite
The Board has established procedures to determine the nature and
extent of the principal risks the Group is willing to take in order to
achieve its long-term strategic objectives. It is through the enactment
of these procedures that the Group 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.
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 Helical Values (see page 79). The risk culture aligns with the
strategy and objectives of the business and is embedded within
the risk appetite.
Our appetite for risk in each principal risk category is set out below:
Strategic
Financial
Operational
Reputational
Low
Medium
High
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.
S
i
t
r
a
t
e
g
c
R
e
p
o
r
t
The identification of risk occurs primarily at Board level through
application of Helical’s Risk Management Framework (see page 48).
As part of this process, the Risk Register and corresponding Risk
Heat Map (please see pages 49 to 55) 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.
Emerging risks
The Board considers both prevailing and emerging risks in the risk
identification process. Emerging risks are those that may materialise
and challenge Helical in the future. The outcome of such risks is
often more uncertain. They may begin to evolve rapidly or simply
not materialise. As part of our risk management approach, we
continuously monitor our business activities and external and internal
environments for new, emerging and changing risks to ensure these
are managed appropriately.
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. External insight is also used
to assist with the horizon scanning process.
On a bi-annual basis, a summary of emerging risks is presented for
assessment to the Audit and Risk Committee and the Board.
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
The Board
Has ultimate responsibility for risk management within the Group. The Board sets the risk appetite
of the Group, establishes a risk management strategy and is responsible for maintaining a robust
internal control system.
The Board
Continually monitors and reviews the risk management strategy to ensure that it remains
appropriate and consistent with the Group’s overall strategy and external market conditions.
The Audit and Risk
Committee
Supports the Board by evaluating the effectiveness of the risk management procedures and
internal controls throughout the year.
The Executive
Committee
Is responsible for the day-to-day operational application of the risk management strategy and
ensuring that all staff are aware of their responsibilities.
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.
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
46
46
Helical plc — Annual Report and Accounts 2022
Helical plc — Annual Report and Accounts 2022
47
47
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Risk management
continued
Risk Management Framework
Helical’s Risk Management Framework is
made up of eight components which all
function to create an effective system of risk
management and internal control. It is through
the application of the Risk Management
Framework that clear procedures for risk
identification, assessment, measurement,
mitigation, monitoring and reporting are
aligned with the Group’s strategic aims
and the Board’s risk appetite.
Internal
environment
Monitoring
Objective
setting
Risk
culture
e
c
n
a
n
r
e
v
o
G
Information &
communication
d
n
a
g
n
i
r
o
t
i
n
o
m
l
a
n
o
i
t
a
r
e
p
O
y
t
i
l
i
i
b
s
n
o
p
s
e
r
g
n
i
t
r
o
p
e
r
Board
Audit and Risk
Committee
Executive
Committee
Management
team
Asset managers
All staff
d
n
a
n
o
i
t
a
t
n
e
m
e
p
m
l
i
i
c
g
e
t
a
r
t
S
y
t
i
l
i
i
b
s
n
o
p
s
e
r
e
c
n
a
i
l
p
m
o
c
Risk
identification
Risk
culture
G
o
v
e
r
n
a
n
c
e
Control
activities
Risk
assessment
Risk
response
The Group performs sensitivity analysis with a focus on the impact
of a loss of rental income on debt covenants. Further details are
included in the going concern review on pages 146 to 147.
Based on the outcome of this review 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 2027.
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.
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 with excellent sustainability
credentials, primarily located in Central London, and is delivering
best-in-class space which appeals to occupiers who need to attract
the best talent. Helical has a long-standing strong 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
Group’s future viability.
Time period assessment
The Directors have assessed the viability of the Group for a period
of five years to March 2027, being the period for which the Board
regularly reviews forecasts, and which encompasses the lifetime of
the Group’s major development projects. The Board considers the
future performance of the Group beyond five years, but less certainty
exists over the forecasting assumptions beyond this period.
Review process
The viability of the Group is reviewed throughout the year and
through multiple channels, detailed below:
• The strategic direction of the Group is established by the Board
once a year and is captured in the Business Plan which forms the
basis of the detailed budgets and actions for the year;
• The Board and Audit and Risk Committee review the principal
risks of the Group at least twice a year, reassessing the severity
of each risk and determining the Group’s proposed response
and planned mitigation;
• The five-year forecasts for the Group are updated and reviewed
by the Board and Executive Committee on a quarterly basis; and
• Management reviews the short-term (three to twelve months) cash
requirements of the Group on a monthly basis and cash balances
and movements are monitored weekly.
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 5.6 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 Group’s primary source of financing
is its £400m Revolving Credit Facility which expires in July 2025,
however, this facility has a one-year extension option which has
been assumed to have been exercised;
• Development and asset management – these activities require
capital expenditure, and this has been included for both specific
projects and general ongoing works; and
• Administration expenditure and finance costs – administration
expenditure has been subject to inflationary increases. The hedging
instruments the Group has in place mitigate the impact of any future
changes to the interest base rate.
The most relevant risks and their potential impact are highlighted below:
Risk areas
Loss of rental income
Principal risks
Tenants unable to pay their rent due to
one or more of the following:
• Significant business disruption/
external catastrophic event
• Recession due to inflationary pressures;
• Property values decline/reduced
and/or
tenant demand for space
• Pandemic or geopolitical event.
• Geopolitical and economic
Loss of rental income could put debt
covenants under pressure requiring
partial/complete loan repayment.
• Breach of loan covenants
Mapping our Principal Risks
d
o
o
h
i
l
e
k
L
i
12
4
6
7 3
8
1
10
2
11
9
13
14
Impact
Strategic
Risks
Financial
Risks
Operational
Risks
PRINCIPAL RISKS
CHANGE
1 The Group’s strategy is
inconsistent with the market
2 The Group carries out significant
development projects
3 Property values decline/reduced
tenant demand for space
4 Geopolitical and economic
5 Significant business disruption/
external catastrophic event
6 Climate change
7 Availability and cost of bank
borrowing and cash resources
8 Breach of loan covenants
=
=
=
=
9 Our people*
New Risk
10 Relationships with business
partners and reliance on external
partners
11 Health and safety risk
12 Cyber-attacks to our business
and to our buildings/cyber
security
=
=
=
=
5
Reputational
Risks
13 Poor management of
stakeholder relations
14 Non-compliance with prevailing
legislation
* This risk has been separately identified this year.
48
Helical plc — Annual Report and Accounts 2022
49
Strategic ReportHelical plc — Annual Report and Accounts 2022
Risk management
continued
Review of the Risk Register – March 2022
In assessing the appropriateness of the Group’s Risk Register
for March 2022, the Directors considered the Group’s
performance, the macro-political and economic environment,
and all the business projects currently being undertaken. Following
a comprehensive review of the risk environment, taking into
consideration the Group’s risk appetite, the Directors concluded
that although the risk of the Covid-19 pandemic had diminished,
a number of risks associated with the pandemic and its aftermath
still continued to affect the business and that this should be
reflected in the Risk Register. In addition, the Directors determined
that geopolitical tensions, rising interest rates and the increased
pressure on supply chains and distribution networks, including
build cost inflation, had emerged sufficiently to merit focus
throughout the Risk Register.
The Directors also revised some of the risk categories this year
to reflect the findings of their review of the Group’s current risk
environment. The revisions included:
• Broadened the “Political” risk category to form a “Geopolitical
and economic” risk to fully recognise the effects of geopolitical
instability on the business;
• Replaced the “Sustainability” risk with a “Climate change” risk
to align this risk with the recommendations as set out by the
Task Force on Climate-related Financial Disclosures (“TCFD”);
• Formulated a separate “Our People” risk to highlight the
importance of the Helical team to the delivery of strategy and
created a combined risk of “Relationships with business partners
and reliance on external partners”;
• Broadened the “Pandemic” risk to form a “Significant business
disruption/external catastrophic event” risk to signify the
diminished risk of the Covid-19 pandemic and cover additional
external events and risk factors; and
• Created a specific risk of “Cyber-attacks to our business and
our buildings/cyber security”, which was previously covered
by a “Business disruption and cyber security” risk, to confirm
the significance of this risk and corresponding focus attributed
to it by the Board and management team.
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 leading
to a reduction in demand or deferral
of decisions by occupiers, impacting
property values, could hinder the
Group’s ability to buy, develop,
manage and sell assets as
envisioned in its strategy. The
location, size and mix of properties
in Helical’s portfolio determine the
impact of the risk. If the Group’s
chosen markets underperform,
the impact on the Group’s liquidity,
investment property revaluations
and rental income will be greater.
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.
The small size of the Group’s management team enables quick
implementation of strategic change when required.
We have robust and established governance and approval
processes.
We are active members of industry bodies and professional
organisations and participate in local business and community
groups. This ensures we are actively engaged in decisions
affecting our business, customers, partners and communities.
The pandemic had various
strategic impacts on property
companies and uncertainty
regarding the full economic
and social impacts of the
Covid-19 pandemic
continues. Over the course
of the year, we have seen an
improved sentiment towards
the future of the office, but
the agile working movement
continues, with many
businesses adopting hybrid
working practices.
It has become evident that
the market favours the
best-in-class space with
strong sustainability
credentials and Helical’s
portfolio is well positioned
to respond to this trend. The
UK’s Covid-19 vaccination
programme has also had a
positive impact on this risk.
Consequently, the severity
of this risk has decreased.
Risk
Description
Mitigating actions
Risks arising from the
Group’s significant
development
projects
Link to Strategy
Property
YoY change
Property values
decline/reduced
tenant demand
for space
Link to Strategy
Property
YoY change
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.
Development projects often require
substantial capital expenditure for
land procurement and construction
and they usually take a considerable
amount of time to complete and
generate rental income.
The risk of delays or failure to get
planning approval is an inherent risk
of property development.
The construction industry is faced
with both labour and materials supply
shortages which could lead to cost
escalation and project delay.
Exposure to developments increases
the potential financial impact of cost
inflation, adverse valuation or other
market factors which could affect the
Group’s financial capabilities and
targeted financial returns.
The property portfolio is at risk of
valuation falls through changes in
market conditions, including
underperforming sectors or
locations, lack of tenant demand,
deferral of occupiers’ decisions or
general economic uncertainty.
Property valuations are dependent
on the level of rental income
receivable and expected to be
receivable on that property in the
future. Therefore, declines in rental
income could have an adverse
impact on revenue and the value
of the Group’s properties.
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.
Management are highly experienced and have a track record
of developing best-in-class office spaces in highly desirable,
well connected, locations.
Management place significant focus on timely project delivery
and strong relationships with construction partners with
appropriate risk sharing. We opt to work with highly regarded
suppliers and contractors to minimise cost uncertainty.
We typically enter into contracts with our contractors on a fixed
price basis and incorporate appropriate contingencies.
Development plans and exposure to risk are considered in
the annual business plan.
Detailed planning pre-applications and due diligence are
conducted in advance of any site acquisition.
Board approval required for commitments above a certain
threshold.
Management continuously monitors the cost of materials
and pressures on supply chain and distribution networks.
Ongoing consideration is given to investing in the most energy
efficient machinery and building materials and using renewable
sources of energy where possible.
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.
We work closely with our management agents, Ashdown
Phillips, to engage closely with our occupiers to understand
their needs and respond quickly and collaboratively to any
changing requirements.
The Board and management team conduct ongoing monitoring
of property market, direction and valuations. The bi-weekly
management meeting considers factors such as new leases,
lease events and tenant issues with respect to each property
in the portfolio.
We conduct ongoing monitoring of build cost inflation and factor
this into appraisals of all potential development schemes.
Changes in risk severity
The Group currently has one
ongoing development and
the majority of these costs
are fixed. Management will
look to negotiate similar
contractual terms for its new
development project: 100
New Bridge Street, EC4.
However, this risk is
dependent on negotiations
with contractors and may
change as new development
projects are acquired.
There continues to be the
risk of insolvencies in the
construction industry given
the uncertainties around the
future macroeconomic
environment and geopolitical
market influences.
Although there has been a
notable increase in the return
of employees to their offices,
a number of corporates are
continuing to offer hybrid
working opportunities.
However, there is a strong
market sentiment towards
new, best-in-class office
space and given Helical’s
Grade A portfolio, the severity
of this risk has reduced with
respect to our portfolio.
50
51
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Risk management
continued
Risk
Description
Strategic risks continued
Geopolitical and
economic
Link to Strategy
Growth
YoY change
Significant business
disruption/external
catastrophic
event
Link to Strategy
Growth
Property
YoY change
Significant events or changes in
the global/UK political or economic
landscape may have a significant
impact on the Group’s ability to plan
and deliver its strategic priorities in
accordance with its business model.
Such events or changes may result
in decreased investor activity and
reluctance of occupiers to make
decisions with respect to office
space uptake.
There is a risk that regulatory and tax
changes could adversely affect the
market in which the Group operates.
The ongoing transition of the UK
from the EU remains a risk and has
an impact on global trade.
Political instability and unrest can
have a significant knock-on effect
on global economies and trade
(as evidenced by the Russo-
Ukrainian war).
The Group’s operations, reputation
or financial performance could be
adversely affected and disrupted by
major external events such as
pandemic disease, civil unrest, war
and geopolitical instability, terrorist
attacks, extreme weather,
environmental incidents, and power
supply shortages.
All of these potential events could
have a considerable impact on the
global economy, as well as that of our
business and our stakeholders.
Climate change
Link to Strategy
Sustainability
YoY change
The Group is alive to the risks posed
by climate change. Failing to respond
to these risks appropriately (in line
with societal attitudes or legislation)
or failing to identify potential
opportunities could lead to
reputational damage, loss of income
or decline in property values.
There is also the additional risk that
the costs to operate our business
(energy or water) or undertake
development activities (construction
materials) will rise as a consequence
of climate change.
Mitigating actions
Changes in risk severity
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 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.
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.
The Group has cash and
undrawn bank facilities
available to it and an
appropriate level of
borrowings.
Breach of loan
covenants
Link to Strategy
Financing
YoY change
If the Group breaches debt
covenants, lending institutions may
require the early repayment of
borrowings.
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.
The risk is further mitigated through the obtaining of
tenant guarantors/bank guarantees/deposits.
The pandemic has put some
tenants under cash flow
pressure. Although the
Group’s rental collection
remains strong, this is still
a key risk for the business.
Operational risks
Operational risks are internal risks that could prevent the Group from delivering its strategy.
Our people
Link to Strategy
People
YoY change
New risk
The Group’s continued success is
reliant on its management and staff.
The failure to attract, develop and
retain the right people with requisite
skills, as well as failure to maintain
a positive working environment
for employees, could inhibit the
execution of our strategy and
diminish our long-term sustainability.
The senior management team is very experienced with
a high average length of service. The Nominations Committee
and Board continuously review succession plans, and the
Remuneration Committee oversees the Directors’
Remuneration Policy and its application to senior employees,
and reviews and approves incentive arrangements to ensure
they are commensurate with market practice. Remuneration
is set to attract and retain high calibre staff.
Our annual appraisal process focuses on future career
development and staff are encouraged to undertake personal
development and training courses, supported by the Company.
The Board and senior management engage directly with
employees through a variety of engagement initiatives which
enable the Board to ascertain staff satisfaction levels and
implement changes to working practices and the working
environment as necessary.
We also arrange all staff training activities and events
throughout the year.
Although there is currently
strong competition for talent
in the employment market
at present, this risk has
remained broadly similar
due to our high staff
retention levels.
The Board reaffirmed the
succession plans for key
roles within the Company
during the year which
supports the long-term
success of the business.
Management seek 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.
Whilst reduced, the Covid -19
pandemic continues to affect
global and local economies
e.g. inflationary pressures
arising from supply chain
shortages, interest rate rises
and cost of energy.
Management monitor macroeconomic research and economic
outlook considerations are incorporated into the Group’s annual
business plan.
UK GDP growth estimates
for 2022 have fallen since
the beginning of the year.
Management conduct ongoing assessments of post-Brexit
impacts and the continuing effects of the Covid-19 pandemic.
We will continue to monitor the economic and political situations
in the UK and globally and adapt any business decisions
accordingly.
In the event of a significant event:
• 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.
The Group has a Sustainability Committee, which reviews
the Group’s approach and strategy to climate related risks
and presents regularly to the Board and Executive Committee
on emerging issues and mitigation plans. The Committee sets
appropriate targets and KPIs to effectively monitor the Group’s
performance.
During the year, a detailed scenario analysis was performed
to ascertain the potential risks and opportunities that arise
due to specific climate related scenarios. The outcome of this
analysis has been incorporated into our wider TCFD statement.
Annually, the Group produces a Sustainability Performance
Report with key data and performance points which are
externally assured.
In May 2022, the Group released its Net Zero Carbon Pathway,
which commits to becoming net zero carbon by 2030 and
includes the actions and steps required to meet the associated
targets.
Furthermore, global
economic and political
conditions e.g. the
Russo-Ukrainian war
and associated sanctions,
are exerting pressure on
global supply chains and
economies.
The risk is therefore
considered to have increased
since last year.
Global rollout of Covid-19
vaccinations has reduced
the probability of further
significant and prolonged
disruption due to the disease.
However, the UK’s terrorism
national threat level is
currently rated as
“substantial”.
The current Russo-Ukrainian
war and associated sanctions
are putting pressure on global
supply chains and economies.
Therefore, this risk remains
unchanged.
Climate change risk
continues to increase in
prominence and importance.
In the UK, the Government
continues to introduce more
legislation linked to climate
risk e.g. TCFD and legislation
requiring higher standards
for energy efficiency in
commercial and residential
properties (EPCs).
The risks associated with
the impact of climate change
continue to increase and
businesses are being
encouraged to proactively
respond by all their
stakeholders.
52
53
Strategic ReportHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Risk management
continued
Description
Risk
Operational risks continued
Relationships with
business partners
and reliance on
external partners
Link to Strategy
People
YoY change
Health and safety
Link to Strategy
Property
People
YoY change
Cyber-attacks to our
business and our
buildings/cyber
security
Link to Strategy
Property
YoY change
The Group’s continued success is
reliant on successful relationships
with its joint venture partners.
As several of the Group’s properties
are held in conjunction with third
parties, the Group’s control over
these properties is more limited
and these structures also reduce
the Group’s liquidity.
Operational effectiveness and
financing strategies may also be
adversely impacted if partners
are not strategically aligned.
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:
• Contractors and suppliers;
• Consultants;
• Managing agents; and
• Legal and professional teams.
The Group would be adversely
impacted by increases in the cost
of services provided by third parties.
The nature of the Group’s operations
and markets exposes it to potential
health and safety risks both internally
and externally within the supply
chain.
The Group relies on information
technology (“IT”) to perform
effectively, and a cyber-attack could
result in IT systems being unavailable,
adversely affecting the Group’s
operations.
The increasing reliance on and use of
digital technology heighten the risks
associated with IT and cyber security.
Commercially sensitive and personal
information is electronically stored by
the Group. Theft of this information
could adversely impact the Group’s
commercial advantage and result in
penalties where the information is
governed by law (GDPR and Data
Protection Act 2018).
Risks are continually evolving, and
we must design, implement and
monitor effective controls to protect
the Group from cyber-attack or
major IT failure. 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.
Mitigating actions
Changes in risk severity
Risk
Description
Mitigating actions
Changes in risk severity
This risk remains and is
expected to remain at the
same level.
This risk is consistent for the
business due to the ever
changing legal and regulatory
landscape the business
operates in. Therefore, the
risk remains at a similar level.
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
People
Growth
YoY change
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 is a continuous risk
for the Group.
Non-compliance with
prevailing legislation,
regulation and best
practice
Link to Strategy
Growth
Sustainability
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.
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.
We ensure strong community involvement in the design process
for our developments and create employment and education
opportunities through our construction and operations activities.
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 UK Market Abuse Regulation (UK 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. This year, staff also received anti-financial
crime training to enhance their awareness.
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 regulations.
Business partners
• The Group nurtures well established relationships with joint
venture partners, seeking future projects where it has had
previous successful collaborations.
• Management has a strong track record of working effectively
with a diverse range of partners.
• Our joint venture business plans are prepared to ensure
operational and strategic alignment with our partners.
External partners
• 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.
External factors such as
the Covid-19 pandemic,
geopolitical tensions and high
levels of demand for certain
raw materials and
components place increased
pressure on supply chains
and distribution networks.
Given our reliance on external
third parties to ensure the
successful delivery of our
development programmes
and asset management,
these external factors could
have a significant impact
on our business and,
accordingly, this risk has
increased.
This remains a key area of
focus for the business and
the risk remains the same.
Cyber risks persist as cyber
criminals continue to exploit
changes in working practices
post-pandemic.
The Group’s cyber security
controls have continued to be
strengthened and no major
breaches were reported
during the year.
However, as the number of
UK businesses reporting
security threats has not
decreased over the year,
we have not revised the risk
severity rating for the
forthcoming year.
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. 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 IT experts
to ensure its 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. On an annual basis, our external IT providers provide
IT security training to ensure all staff are adopting best practice
IT security measures to help protect the business against
cyber-attack.
An external review of Helical’s anti-financial crime and cyber
security frameworks was conducted during the year and
training delivered to staff.
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.
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Sustainability at Helical
Our approach
to a sustainable
future
Sustainability at Helical
At Helical, being able to operate our business responsibly includes
considering the impact we have on the environment, communities
and the people in our business. Understanding this balance with the
support of a robust governance structure and key responsible people
allows us to deliver long-term value for all our stakeholders.
2022 Ratings
GRESB (Global Real Estate
Sustainability Benchmark) Score of 85
4 Green Star
rating
“A” rated
public
disclosure
“AAA” rating
EPRA Sustainability
Reporting Awards
Gold award
“C” rating
We have progressed well against the targets we set out in our
sustainability strategy “Built for the Future” and in May 2022 made
a further commitment with the release of our “Net Zero Carbon
Pathway”. Helical has announced its plan to become net zero carbon
by 2030. With the support of our guide “Designing for Net Zero”,
we plan to drive down carbon emissions arising from our new
developments and through a series of new initiatives and intervention
have already reduced the emissions arising from our existing portfolio.
As we build on our ambitions, we continue to recognise the
importance of transparency and independently assured reporting.
Going forward we will be reporting on our progress against our net
zero carbon targets to make certain we are on track for 2030. During
the year, we have also further developed our reporting against the
recommendations of the Task Force on Climate-related Financial
Disclosures which can be found on page 64. We have performed an
in-depth review of the risks and opportunities that could arise from
certain climate-related scenarios and evaluated the potential impact
on our business.
Sustainability is embedded throughout our business which ensures
its effectiveness when making key business decisions. Six key
priorities drive our long-term vision for sustainability and we believe
that by integrating these priorities across our business, supply chain
and business partners, they will create long-term value.
Highlights
16%
Reduction in like-for-like whole building
energy intensity
23%
Reduction in our like-for-like whole building
GHG carbon emissions (Scope 1 and 2)
100%
Renewable energy sourced for all landlord
controlled and procured electricity
40%
Reduction in embodied carbon at 33 Charterhouse Street, EC1
Our key sustainability priorities
Our sustainability strategy “Built for the Future” sets
out the Group’s long-term vision encompassing “Our
Environment, Our Communities and Our People” and
supports the business in becoming truly sustainable.
Underpinning its focus areas, our strategy identifies
six key priorities which drive our long-term vision
for sustainability:
Our Environment
1
2
Transition to a low
carbon business
Buy, use and re-use
resources efficiently
Our Communities
3
4
Bring social, economic
and environmental
benefits to the areas
in which we operate
Design and
operate our buildings
to support health
and wellbeing
Our People
5
Attract and retain
the best people
6
Maintain strong
relationships with our
business partners
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Helical plc — Annual Report and Accounts 2022
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Strategic Report Sustainability at Helical
continued
Our Environment
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.
Challenging carbon within
our managed portfolio
Our approach to decarbonising our business starts with
maximising the energy efficiency of our buildings. We
already procure 100% of our electricity on renewable
tariffs for our office buildings, however, we recognise
the need to significantly reduce consumption across
our portfolio. During the year, our like-for-like energy
consumption decreased by 45%. 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.
Case study:
Integrating a new Building
Management Solution (BMS)
In January 2021, Helical and managing agents
Ashdown Phillips trialled an enhanced,
technologically advanced Building Management
Solution (BMS) at The Warehouse, one of the
buildings at The Bower, EC1. During the pandemic,
it had been noted that during periods of low
occupation, the building was still using large
amounts of energy. In response to this, a non-
intrusive assessment and installation of an integrated
enhanced BMS was actioned. The BMS uses data
and a set of operating “rules” to assess when and
how the equipment should operate and creates an
alert for when it is running outside of these “rules” and
can be automatically shut down. In December 2021,
we reviewed the outputs from this system and found
that a yearly saving of 213,000 kWh of electricity
and 840,500 kWh of gas per annum had been made.
Given the success of this new system, we intend
to roll this out to all suitable assets in our portfolio.
Challenging carbon at our development sites
Embodied carbon accounts for a significant proportion of
a new development’s carbon footprint. We have committed
to undertake a full life-cycle carbon assessment for all new
developments to accurately measure embodied carbon. Our
ambition to reduce embodied carbon is further supported
by 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.
Case study:
Minimising embodied carbon
at 33 Charterhouse Street, EC1
Helical is undertaking a new development at
33 Charterhouse Street, EC1 and we are making
significant efforts to minimise our environmental
impact. We have adopted the use of recycled
materials in the construction process, for example
within the aluminium cladding, steel frames, raised
floor tiles, light fittings, and using reclaimed bricks.
We have used Earth Friendly Concrete that is 50%
less carbon intensive than a standard concrete mix.
Our steel was produced in the UK, which reduced
our embodied carbon significantly by being partly
sourced from recycled/reused steel and from the
lowered transportation related emissions. Through
these means, this new development is being
delivered with an embodied carbon intensity that is
40% below the RIBA benchmark. The operational
emissions are also targeted to be 43.3% lower than
the regulated Targeted Emissions Rate outlined in
Part L of the Building Regulations (2013).
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continued
Net Zero Carbon Pathway
In May 2022, we released our “Net Zero Carbon Pathway”.
Our Pathway, which is aligned to the Better Buildings
Partnership (BBP)’s Net Zero Carbon Pathway Framework,
sets out Helical’s commitment to becoming net zero carbon
by 2030.
Through the analysis of our baseline carbon footprint we
estimate that, if we were to take no active net zero carbon
steps, our footprint would reach 28,000 tonnes. In
response to this, our Pathway sets out the following
approach to reaching net zero carbon by 2030.
We are committing to becoming
a net zero carbon business by 2030.”
Read our Net Zero
Carbon Pathway
Scan the QR code
to read our report or
visit the Sustainability
section of our website.
60
1
Reduce embodied carbon
Embodied carbon comes from
the greenhouse gas emissions
generated to produce buildings
including emissions caused
by extraction, manufacturing/
processing, transportation
and assembly. We have set
ourselves a target of delivering
new developments with an
embodied carbon of less than
600kgCO2/m2. To achieve this
target, we will be using the
principles set out in our guide
“Designing for Net Zero”, which
details a ten-step process
which, when followed,
maximises the opportunities
to reduce embodied carbon.
2
Reduce operational energy
Operational energy is the energy
used to run a building and
focuses largely on electricity and
gas supply. Helical intends to
achieve the UKGBC’s target for
offices of 90 kWh/m2 by 2030.
Our portfolio already operates
with relatively low energy
intensity as our buildings have all
been recently redeveloped or
refurbished. We will therefore
focus on electrifying our
buildings, exploring potential
connections to district heating
networks and continuing energy
saving measures such as
upgrading Building Management
Systems.
100%
Embodied carbon emissions offset
for all future new developments
90 kWh/m2
Target for operational
energy optimisation
600 kgCO2/m2
Target for embodied carbon
for new developments
3
Maximise renewable energy
Buildings will always need some
form of heating and cooling.
Once the efficiency of these
systems has been maximised,
we need to power these assets
through renewable energy
supplies wherever possible. For
our existing portfolio, we have
investigated the opportunities
for onsite renewables and found
there is, in many cases, limited
scope for meaningful
interventions. We will therefore
focus on procuring the highest
quality renewable energy supply
for our offices. For our new
developments, we will avoid the
use of fossil fuels and generate
onsite renewable energy
through the installation of PV
solar panels and electric air-
source heat pumps.
4
Offset unavoidable emissions
Whilst we are striving to remove
carbon emissions from our
supply chain and development
activities, it is likely that we will
require carbon offsets for some
of our residual difficult-to-
decarbonise emissions from
2030 onwards. In alignment with
the Better Building Partnership
requirements and those of the
Oxford Offsetting Principles, we
will only use such offsets when
all other options for reducing our
emissions have been exhausted.
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continued
Our environmental performance
Energy
Despite increasing occupation levels, our total like-for-like electricity
intensity for our managed portfolio decreased by 7% and our
total like-for-like gas (direct fuels) intensity decreased by 75%. For
our landlord-controlled areas we saw an 18% reduction in electricity
intensity and a 34% reduction in our tenant consumption.
Associated Scope 3 emissions have seen a drop by 26% compared
with the previous reporting year. This is primarily due to a reduction in
tenant emissions from electricity consumption through fluctuations in
occupancy, property divestment, and associated decarbonisation of
the grid. Tracking our performance across all scopes of emissions will
allow us to identify key areas for improvement across our supply chain
and ensure a sustainable business strategy.
This impressive reduction is a result of upgrades to our Building
Management Systems (BMS) at The Bower (see case study on page
58). Going forward our focus will be to electrify our buildings, reducing
our reliance on gas at our assets. Our property managing agents
continue to work closely with our tenants to understand their working
arrangements to optimise heating, cooling and plant running.
In addition to the above we have continued to roll out a number of
energy efficiency improvements across our assets in the reporting
period. These include:
• Increased coverage of LED lighting;
• Improved existing energy management practices;
• Increased 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.
Carbon
In the year, as a result of the energy saving initiatives carried out,
we saw our Scope 1 like-for-like emissions reduce by 75%. Likewise,
our Scope 2 like-for-like emissions have also fallen by 8%.
62
Water
Total water consumption across head office, our managed property
portfolio and our development sites has seen a decrease of 8% in
comparison to the last reporting year. A comparison of the like-for-like
assets has seen an increase of 56% in the year, due to an increase in
occupancy throughout the year as restrictions related to the Covid-19
pandemic for office-based working have gradually been lifted.
However, when water intensity for the year is compared with that for
2019-2020 (a year with comparably few restrictions resulting from the
Covid-19 pandemic), almost a 50% reduction in intensity can be seen.
Waste
Our recycling rate was 50% compared to 40% last year. The majority
of recyclable waste comes from occupier waste streams, i.e., food
waste, coffee cups, paper, packaging and glass. Recycling in our
managed portfolio has met the target of a 50% recycling rate, with the
majority of properties achieving recycling rates of over 55%. We have
successfully engaged with restaurant and café tenants to encourage
them to avoid single use plastic and reduce waste wherever possible.
Recycling in the development portfolio has achieved rates of 95%
and above, with any remaining waste recycled on site.
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 (tCO2e)
Emissions associated with operation of facilities (refrigerant gas) (tCO2e)
Energy use of combustion of fuel (kWh)
Scope 2 emissions and indirect energy use
Emissions associated with purchased electricity, heat, steam and cooling usage (tCO2e)
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 (kWh)
Scope 3 emissions and indirect energy use
Emissions associated with purchased electricity sub-metered to occupiers (tCO2e)
Energy use of purchased electricity sub-metered to occupiers (kWh)
District heating and cooling (tCO2e)
District heating and cooling (kWh)
Emissions and energy use totals
Absolute emissions Scope 1 and 2 (tCO2e)
Total energy use Scope 1 and 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 revenue (Scope 1&2 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)
2022
102,417
2021
161,759
141
–
860
–
745,025
4,274,003
872
23
4,104,484
107,027
1,310
23
6,427,922
96,009
597
998
2,813,039
4,280,702
46
573,000
–
–
1,036
2,193
4,956,536
10,797,934
0.010
48.40
33.21
969
0.014
66.75
87.72
1,312
4,228,084
6,192,129
0.029
147.26
0.036
179.90
Our SECR reporting 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.
Third party verification
We appointed RPS Consulting UK&I (RPS) to perform third party
verification of our SECR disclosure for the year 1 April 2021 to
31 March 2022. Based on the verification procedures detailed in
their full statement, RPS 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 RPS’s full ISO 14064:3
limited verification statement available in the Sustainability
Performance Report 2022 on our website.
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Sustainability at Helical
continued
The Task Force
on Climate-related
Financial Disclosures
Climate change continues to be one of the greatest long-term challenges
we face. In an effort to improve transparency, the Task Force on Climate-
related Financial Disclosures (TCFD) framework provides guidance on how
to improve reporting on climate-related financial risks and opportunities.
At Helical, we support the TCFD recommendations and have made good
progress from our initial disclosure in 2020/2021 to a more robust and
comprehensive disclosure in this Annual Report. We believe our TCFD
disclosure will support stakeholders in assessing our exposure to climate-
related risks and opportunities and aid them in making informed decisions.
64
The TCFD framework addresses four key areas:
Governance
Strategy
The TCFD
framework
Risk
Management
Metrics &
Targets
During the year we have performed an in-depth study on
climate scenarios and undertaken quantitative analysis
on the risks and opportunities and the associated
potential financial impact.
Governance
The Board’s oversight of climate-related risks and opportunities
The Board
The Audit and
Risk Committee
The Executive Committee
Sustainability Committee
The Board has ultimate
responsibility for risk
management within the Group.
The Board sets the risk appetite
of the Group, establishes a risk
management strategy and is
responsible for maintaining a
robust internal control system.
Part of this risk management
approach is considering those
risks posed by climate change.
The Board considers the impact
of volatile weather patterns,
shifts in stakeholder behaviour
and availability of climate
resilient technology to assess
the potential implications for the
business and set out a suitable
mitigation plan. At Board level,
Sue Farr has been appointed
the designated Non-Executive
Director responsible for
ESG matters.
The Audit and Risk Committee
is a Board Committee formed
of Non-Executive Directors
and meets quarterly. It 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. It reports
to both the Audit and Risk
Committee and directly to the
Board on the operation of the
Group’s Risk Management
Framework.
The Sustainability Committee meets quarterly and is chaired
by Helical’s Property Director and is made up of a cross functional
team including the Head of Sustainability, Head of Asset
Management and Senior Development Executive. Collectively
they are responsible for new developments, refurbishments
and building operations. The Sustainability Committee has the
required knowledge to actively manage the climate change risks
and opportunities faced by the Group. It engages with relevant
stakeholders to determine the impacts on financial planning,
impact to strategies, relevant targets and key priorities. It is
responsible for implementing policies which promote the long-
term sustainability of the Group and facilitate informed decisions
which minimise Helical’s impact on climate change.
The Head of Sustainability reports directly to our Property
Director and provides regular updates to the Executive Committee
on progress against targets and the wider sustainability strategy.
A formal presentation is given to the Board on an annual basis.
Management’s role in assessing and managing
climate-related risks and opportunities
Our sustainability strategy “Built for the Future” sets out our ambitions
in respect of our development and asset management activities and
sets out our long-term vision for Our Environment, Our People and
Our Communities. It details guiding principles on how to operate our
business in a sustainable way while also ensuring future long-term
growth. Our strategy is led by our Head of Sustainability and is
implemented by the wider Sustainability and Executive Committees.
Assessing related risks and opportunities
The Sustainability Committee is responsible for identifying and
assessing climate change risks in relation to our operations,
environmental ambitions and performance against our targets.
Climate-related risks are captured in our Risk Register and are
overseen and reviewed by our Audit and Risk Committee. 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 Executive Committee 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 48).
As part of this process, the Risk Register and corresponding Risk
Heat Map (please see pages 49 to 55) are produced. The Board
meets at least twice a year to assess the appropriateness of the Risk
Register, considering the macro economic environment, current
projects and performance and past experience.
All risks, including climate-related risks, are assessed in terms of
impact on the business and the severity of the risk. 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. 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.
More details on our approach to risk management can be found on
pages 46 to 47.
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continued
Strategy
As a property developer and investor, climate-related issues affect
the way we design our new developments and how we manage our
existing assets effectively. We take an active approach in managing
climate-related risks and opportunities.
We identify risk and opportunities over the short term (0-3 years),
medium term (3-5 years), and long term (5-15 years).
Short term
(0-3 years)
Medium term
(3-5 years)
Long term
(5-15 years)
In the short term we will continue to take a
proactive approach to minimising risks and
maximising opportunities associated with our
current and future tenants’ needs, regulatory
landscape and the availability of natural
resources. These priorities shape the way we
develop, manage and occupy our buildings
while minimising the impacts of climate change.
Key short-term risks and opportunities which
have been identified are as follows:
• Minimum Energy Efficiency Standards
(MEES)
• Change in tenant preferences
and expectations
Over the medium term, we will identify and
manage the financial impacts arising from
climate change risks. We will use our market
leading knowledge to make sustainable
investment choices. Key medium-term risks
have been identified as follows:
• Net zero carbon requirements
• Increased utility costs
• Increased cost of raw materials
• Carbon pricing
• Change in tenant preferences
and expectations
These risks have a wider impact on the Group’s
strategy and will help define how the Group will
look to operate in the long term. To address the
risks associated with more extreme weather
patterns, we will work with our supply chain,
contractors and design teams to guarantee our
developments are designed to be resilient and
adaptable to these risks. Key long-term risks
have been identified as follows:
• Rising temperatures
• More volatile weather patterns
• More stringent building regulations
• Rental and valuation premiums through
resilience planning
Impact of climate-related risks and opportunities
on the organisation’s businesses, strategy and
financial planning
Our sustainability strategy “Built for the Future” drives our approach
and aspirations and is supported by our sustainability and
environment policies and targets. These documents can be found
on our website. They set out how we manage these risks within our
development and asset management activities and set the necessary
performance standards and targets.
To help us plan climate-related resilience into our development
assets, we have published “Designing for Net Zero”. This guide details
our ten-step approach to designing low carbon and climate resilient
developments. We have set out a design journey supporting, guiding,
and prompting professional teams as they progress Helical’s
development projects from the initial planning stage through
construction and onto their operation.
Climate-related risks have a direct impact on how we develop and
manage our buildings and are a consideration when acquiring and
disposing assets. Our “Net Zero Carbon Pathway” sets out how we
plan to transition to a low carbon business and become net zero
carbon by 2030.
Below are some examples of how we are
incorporating climate-related risks and opportunities
into our wider business strategy.
New acquisitions – We are already seeing the
bifurcation between best-in-class “green” assets
and “brown” assets. 99% of our current portfolio by
value hold an EPC of “B” or above, whereas market
research suggests that 83% of London buildings
do not currently meet the 2030 MEES proposed
EPC target of “B”. As a result of this we expect
opportunities to emerge to acquire these stranded
assets for repositioning and redeveloping.
Ongoing developments – Our guide “Designing
for Net Zero”, sets out best practice guidelines and
principles for developing low carbon, best-in-class
buildings. With the use of a carbon champion, we
will challenge carbon at every stage, from design
through to occupation, to ensure every benefit is
gained. Our development at 33 Charterhouse, EC1
is on track for an embodied carbon reduction of 40%
compared to the current RIBA benchmark. It is also
on track to receive an EPC “A” and BREEAM
“Outstanding” rating.
Asset management – As part of our “Net Zero
Carbon Pathway”, we have reviewed each of our
assets, considering their energy trajectories and
EPCs. Using this data we have created a roadmap for
future upgrades to these buildings and investments
in renewable technologies and connections to district
heating networks to aid us in meeting our net zero
carbon targets. The use of smart building
technologies, such as those being fitted at
33 Charterhouse Street, EC1, will provide real time
information on energy usage and will be a vital tool
when engaging with tenants.
Financial planning – we are currently looking at
ways we can formalise our approach to carbon
pricing and accounting, with the view that through
the development of a clear carbon pricing strategy,
we can include the cost of carbon as part of our
acquisition and the wider development programme.
We have already secured a designated £140m
“Green Loan” with Allianz as part of our development
activities at 33 Charterhouse, EC1. As we look at
future refinancing activities, we will take steps to
secure either Green Loans or Sustainability Linked
facilities so we can benefit from a more competitive
market based on certain KPIs.
Resilience of the organisation’s strategy considering
different climate-related scenarios
Our strategy is to acquire poor performing, inefficient, “brown” buildings and
reposition these through a redevelopment programme to create buildings which
meet the needs of today’s occupiers.
Our strategy “Built for the Future” and “Net Zero Carbon Pathway” set out how
we will mitigate climate change and adapt to the effects of climate change, whilst
delivering our business strategy.
These commitments coupled with our design guide “Designing for Net Zero”
deliver a strategy which will enable the decarbonisation of our business whilst
responding to both physical and transitional risks of climate change.
We have aligned our strategy to a 1.5°C warming scenario, however we have also
reviewed a 2°C and 4°C warming scenario.
Physical risk
Physical risks are typically defined
as risks which arise from the physical
effects of climate change and
environmental degradation.
They can be categorised either as
acute – if they arise from climate and
weather-related events and an acute
destruction of the environment, or
chronic – if they arise from progressive
shifts in climate and weather patterns or
a gradual loss of ecosystem services.
We have undertaken physical climate
risk modelling to quantify the potential
impacts of climate change on London
under a range of future emission
scenarios. We have conducted
physical risk scenario analysis,
including future climate scenarios
with global temperature increases
of approximately 2°C (RCP2.6) and
4°C (RCP8.5).
Transition risk
Transition risk generally refers to the
uncertainty associated with the timing
and speed of adjusting (adapting) to an
environmentally sustainable economy.
When considering the transition risks
and opportunities for different
scenarios, we have taken into
consideration our proactive stance
with regards to climate change, as set
out in the climate-related goals and
objectives in our sustainability strategy
“Built for the Future”, our design guide
“Designing for Net Zero” and our “Net
Zero Carbon Pathway”.
We have used the CCC’s 6th Carbon
Budget (the “Buildings” section) to
inform our scenario basis, with three
distinct scenarios defined as:
Balanced – Implementing new and
upgrading existing energy efficiency
measures in all commercial buildings;
significantly scaling up the market for
heat pumps as a critical technology for
decarbonised space heating; expanding
the rollout of low carbon heat networks
in heat dense areas; and facilitating a
potential role for hydrogen in heating.
Headwinds – While there is some
degree of behaviour change and
innovation/implementation in low
carbon technology, there are not
widespread behavioural shifts or
significant policy/market driven
reductions in the costs of low carbon
design and technology for buildings.
Tailwinds – Through significant
consumer behavioural changes and
the widespread implementation of
energy efficiency measures, an early
and rapid rate of decarbonisation in
buildings is realised over a short to
long-term horizon.
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Risk management
Identifying and assessing climate-related risks
Risk is an integral part of the Group’s business activities and Helical’s
ability to identify, assess, monitor and manage its risks is fundamental
to its financial stability, continuing performance and reputation. When
making business decisions, the Board of Helical assesses all potential
risks faced, including climate-related risks, and considers the effect
that such risks could have on the achievement of the strategic
priorities and the long-term success of the Group.
Managing climate-related risks
We have an established Risk Management Framework which
underpins how we manage risks, including climate-related risks.
Encompassed within the Risk Management Framework is the Board’s
responsibility to maintain and monitor the Group’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.
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 commitment to being a
sustainable business.”
It is the responsibility of the Board to ensure that the Group’s internal
control system is effective in preventing losses from risk events, or
identifying risk events, and taking corrective action when they occur.
Our aim is to manage each of our risks and mitigate them so that they
fall within the risk appetite level we are prepared to tolerate for each
risk area. Risk appetite reflects the overall level of risk acceptable with
regards to our principal business risks. 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.
Identifying and assessing risks
Overall, we identify and assess climate-related risks across two key areas: strategic risks and operational risks. Through the application
of the above scenario analysis (Balance, Headwinds and Tailwinds), and applying our defined risk management approach, we have identified
risks which are material to the business. We summarise these climate-related risks below along with their potential financial impact on our
business, and our current mitigation strategy.
Physical risks
Category
Acute
Climate-related risk
Changes in extreme climate and
weather events such as rainfall,
droughts and heatwaves affect
how we develop and manage our
buildings
Chronic
Rising temperatures
Transitional risks
Category
Markets
Description
Shift in customer behaviour
Increased cost of raw materials
Potential financial impacts
Loss of rental income from potentially
affected tenants
Increased capital costs associated
with damage
Increased operating costs from
potential power outages
Increased development costs from
weather-related delays
Increased energy costs to cool
buildings
Increased capital cost for additional
cooling plant
Impacts
Reduced rental income from poor
performing assets
Increased capital and operational cost
to meet new preferences
Increased development costs
Increased utility costs
Increased operating costs
Technology
Substitution of existing products
and services with lower emissions
options
Increased capital costs to adopt new
technologies
Mitigation actions
• Continual improvement of our existing
building structures including roof
replacements
• Flood risk assessments performed as
part of the planning and design stages
of new developments
• Use of “lessons learnt” on previous
projects to inform continuous evolution
of the risk management process
• Working with trusted contractors who
appropriately factor climate-related risks
into the wider development programme
• Continue the installation of renewable
energy technologies at new
developments
• Include cooling measures such as green
roofs, blinds and passive ventilation at
new development
Mitigation actions
• Continue to roll out enhanced BMS
replacements to ensure continual
improvements in energy efficiency
• Retain as much of the existing structure
as possible to reduce costs
• Investigate more efficient material use
• Continue to acquire high quality REGO
certified green contracts
• Investigate connections to district heating
networks to benefit from more efficient
energy supply
• Continue to roll out enhanced BMS
replacements to ensure continual
improvements in energy efficiency
• Investigate new and emerging
technologies for our existing assets
and development projects
Policy and legal
Reputation
Increased pricing of GHG
emissions
Greater stakeholder scrutiny and
risk of “greenwashing”
Greater increase in carbon pricing
• Meet those targets set out in our
Reduction in capital availability
“Net Zero Carbon Pathway”
• Ensure our publications are transparent
and align with EPRA sBPR and continue
to participate in GRESB and CDP
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Sustainability at Helical
continued
continued
Metrics and targets
Metrics used to assess climate-related risks and
opportunities in line with our strategy and risk
management processes
We track our performance against multiple climate-related
metrics and targets for both our developments and assets under
management. These metrics and targets are set out in our
overarching sustainability strategy document, “Built for the Future”.
Our KPIs allow us to monitor progress towards these targets and
ensure that we report in line with investor disclosure requirements,
notably CDP, GRESB and FTSE4Good. Our performance against
these metrics (including Scope 1, 2 and 3 emissions) can be found
in more detail in our SECR Statement and this report.
Below we have summarised the various metrics we use when
reporting across Carbon, Energy, Waste, Water and Building
Certifications (see pages 62 to 63):
• Total energy consumed, broken down by source (e.g. purchased
electricity and renewable sources)
• Total fuel consumed percentage from coal, natural gas, oil,
and renewable sources
• Building energy intensity (by m2)
• Building water intensity (by m2)
• GHG emissions intensity from buildings (m2) and
from new construction and redevelopment
• For each property, the percentage certified as sustainable
Scope 1, Scope 2 and Scope 3 greenhouse gas emissions (GHG)
and the related risks
We publish a detailed data report which sets out our environmental
data performance. As part of this we publish extensive carbon
reporting across Scopes 1, 2 and 3 using the Greenhouse Gas (GHG)
Protocol Corporate Accounting and Reporting Standard. Likewise,
we provide trend analysis across several years to show progress and
historical performance.
Please refer to the data report section of this report on pages 62
to 63 for our carbon reporting which also includes full details of the
aggregation and calculation methodology.
Moreover, we publish a summary of our corporate carbon footprint
on page 63.
Targets used to manage climate-related risks and
opportunities and performance against targets
• Value of assets above and below an EPC “B”
• Asset value of BREEAM certified developments
• Value of assets within flood zone 1 and 2
• Value of assets within flood zone 3
• % of assets (managed and development) procuring REGO
backed supplies
• Area of our portfolio with green roofs
We released our “Net Zero Carbon Pathway” in May 2022 which
details the following 2030 target for embodied and operation carbon
intensity for our assets:
• 600 kgCO2/m2 embodied carbon intensity for new developments
• 90 kWh/m2 operation carbon intensity for all new developments
and existing assets by 2030
Climate-related opportunities
We summarise our main climate-related opportunities and their potential financial impact below:
Category
Resource
efficiency
Description
Increased recycling
Impacts
Reduced development costs
Commentary
• We aim to use demolition waste where
possible and repurpose existing structure
and materials
Move to more efficient
buildings
Increased valuation
• Renewable technologies being installed
Decreased operating costs
at our development sites
Energy
source
Expansion of low carbon
heat networks
Reduce exposure to fossil fuel pricing
and related carbon pricing
Products
and services
Move towards low emissions
goods and services
Increased revenue through demand
for low emissions buildings
Markets
Shift in consumer preference
to net zero carbon buildings
Better competitive positioning
resulting in increased revenue
and valuation gains
• BMS updates to existing assets
• Two of our existing sites are already
connected to the Citigen district heating
network and we will benefit from their own
investment in ground source heat pumps
which are currently being installed and other
future renewable initiatives
• All central London offices hold an EPC
rating of “A” or “B” and a BREEAM rating of
“Excellent” or above
• Our guide “Designing for Net Zero Carbon”
sets out best practice principles in
delivering net zero carbon buildings
• We have committed to becoming net zero
carbon by 2030 as detailed in our “Net Zero
Carbon Pathway”
Resilience
Supply chain engagement
Increased reliability of supply chain
and increased market valuation
through resilience planning
• We carry out Lifecycle Carbon
Assessments at the design stage of
redevelopment projects
• We engage with our supply chain to ensure
that construction practices limit the use
of new materials where possible and make
use of materials with highly recycled or
recyclable content
• We aim for a minimum of BREEAM
“Excellent” for all our new developments
and major refurbishment projects
Identifying the risks and opportunities
that are material to us as a business
under a number of different climate
scenarios allows us to appropriately
align our mitigation plan and long-term
strategy. Building and operating
buildings which are resilient to climate-
change protects Shareholder value.”
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Our Communities
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.
Science Club
In partnership with Mace, our main contractor at 33 Charterhouse
Street, EC1, a small team from Helical participated in Science Club,
a local volunteering opportunity at Prior Western School. A team
of five Helical staff co-ran the after school club between April and
June and delivered fun science sessions to a group of 15 children.
Sessions included building bug hotels, making potato clocks and
engineering spaghetti marshmallow bridges. The school is in close
proximity to 33 Charterhouse Street and provides a special and
unique learning environment for children from nursery age to 11
years old.
The team at Helical get the need to support social action not just
for a year, but over the long term. They have backed LandAid,
and our mission to help tackle and end youth homelessness,
tirelessly over the years, raising colossal sums of money, and
with some of the most enthusiastic, idiosyncratic and effective
fundraising techniques we’ve seen. They’ve brought fun,
commitment and passion to their support, and we’re both
delighted and honoured to have Helical as one of our longest-
standing partners and supporters.”
– Paul Moorish, Chief Executive, LandAid
In 2021 Helical became the
headline sponsor of the LandAid
10K event, a landmark event in
the property calendar. Twenty-
one of Helical’s staff members
participated and raised almost
£7,000 in the process. More
than 500 people from the
industry took part and in total
over £75,000 was raised by
the event.
I was lucky enough to co-run the ‘fruit batteries’
Science Club, which involved making a huge
amount of mess, a lot of giggles and silliness with
15 nine year olds. The children were so engaged
and enthusiastic that they even forgave my poor
attempts at battery making. This great opportunity
served as a reminder that there are thriving local
communities in the areas we develop and being
able to support them ensures a long-lasting
sustainable relationship between us all.”
– Laura Beaumont, Head of Sustainability, Helical
LandAid
Helical has a relationship with
LandAid, the property industry’s
charity, dating back to 1986 and
has been a Foundation Partner
since 2012.
In the last ten years Helical has
raised/donated over £450,000
for LandAid and in 2020 became
a Founding Partner of LandAid’s
Emergency Covid Appeal, giving
vital support to the vulnerable
and homeless young people
LandAid has supported
throughout the pandemic.
72
Our People
We aim to attract, inspire and
engage a talented workforce,
one that flourishes and is proud
to work for Helical.
How we support our people
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.
We believe that a competitive approach to remuneration, alongside
an attractive working environment, has continued to keep staff
turnover low at 3.7%, with an average length of service of 11.8 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 832 hours of training and development – an average of
4.1 days per employee.
31 March 2022
Executive Directors
Senior Management (Executive
Committee and direct reports)
All employees (full-time and part-time)
Total number of
staff as at
Average length of
service (years)
3
15
28
27.8
9.7
11.8
3
Executive
Directors
6
Senior
management
9
Male
Female
All
employees
13
15
Health and wellbeing
We provide our employees with a range of benefits, services and
support whilst encouraging them to take a proactive role in their own
wellbeing. We are mindful of individuals’ physical and psychological
safety and embed “agile” ways of working to ensure our employees
have a good work-life balance.
During the year we implemented a monthly “Wednesday Wellness”
newsletter, which focuses on a particular topic each month centred
around health, wellbeing and mental health. Topics have included
How to Digitally Detox, Dealing with Stress and The Importance
of Nature.
We also 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.
These initiatives were all implemented by our group of Mental First
Aiders, being 15% of our workforce who have completed the two day
Mental Health First Aid training. They meet on a quarterly basis to
discuss how best to engage staff, exchange ideas on how to
champion wellbeing practices and implement these initiatives in
a way that is inclusive to all staff.
Working with trusted partners
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.
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 2022 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 along with the Sustainability Performance Report 2022
which includes detail on health and safety performance in the year.
• Helical has delivered over 700,000 hours of construction during the
year with no fatalities or major accidents and no 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 2022.
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Focus on our
stakeholders
Section 172(1) Statement
The Board of Directors confirms that
during the year under review, it has acted
to promote the long-term success of
Helical plc (the “Group”) 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.
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
Our stakeholders
Shareholders
Partners
Suppliers and contractors
Occupiers
(tenants/customers)
Employees
Local communities
Government and other
regulatory bodies
Promoting the long-term success of the Group
The wider interests of our stakeholders are considered in all aspects
of corporate decision making at Helical. 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 Group. 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 section on pages 80 to 85 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.
Our stakeholders are key to our long-term success and therefore
the Board cultivates a stakeholder culture throughout the Group,
ensuring the successful management of stakeholder relationships
through effective engagement.
Section 172(1) and the Board’s Principal Decisions
throughout the year
We define our principal decisions as those that may have a potentially
material impact on the Group’s strategy, its stakeholders or the long-
term value creation of the Group (“Principal Decisions”). For detail on
how we established and defined our key stakeholder groups please
see the Stakeholder engagement section on pages 80 to 83. 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 with regards to the Helical Shareholders, 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, sustainable office space in
London. Helical has been in business for 103 years, and we believe this
success can be attributed to our commitment to the Helical Purpose
(see page 78), whilst maintaining high standards of business conduct
and the strong culture articulated through our Values (see page 79).
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Strategic Report Our stakeholders – Section 172(1) Statement
continued
PRINCIPAL DECISIONS
The Board always has regard to section 172(1) Companies Act 2006 when
reaching Principal Decisions, and we detail the most materially significant
Principal Decisions made during the year below:
Acquisition of 100 New Bridge
Street, EC4
Converting the Group into a
Real Estate Investment Trust
(“REIT”)
s172(1) matters relevant
to this Principal Decision:
A – F
Link to strategy:
• Growth
• Property
• Sustainability
• People
• Financing
s172(1) matters relevant
to this Principal Decision:
A E
Link to strategy:
• Growth
• Financing
The Board plays a critical role in ensuring that a rigorous and robust
process is followed in respect of property acquisitions to ensure that
all elements of any proposals, including stakeholder considerations,
are carefully reviewed and challenged. Over the year to 31 March 2022,
the Board oversaw the acquisition of 100 New Bridge Street, EC4 (the
“Acquisition”), and approved a number of items in connection with the
completion of the transaction, for example, the Class 1 Shareholders’
Circular ahead of the general meeting to approve the Acquisition, various
financial and accounting reports and representation letters. Further
details of the Acquisition and its connection to the Group’s
long-term strategy can be found on page 32.
What the Board considered
• the long-term strategic opportunities and risks created by the
Acquisition;
• whether the projected returns could be achieved for all of our
Shareholders through the Acquisition;
On 12 January 2022, Helical announced its intention to convert to a REIT
thereby allowing greater comparability with other listed peers as well as
being exempt from UK corporation tax on the profits of its property
activities that fall within the REIT regime. In order to be eligible, the
Company had to seek Shareholder approval to buy-back and cancel
its Deferred Shares and make necessary amendments to its Articles
of Association (“Articles”).
Shareholder approval of the proposals required in connection with the
REIT conversion was obtained at a General Meeting of the Company held
on 21 March 2022. Following completion of all requisite due diligence, the
decision to convert to a REIT became effective on 1 April 2022.
What the Board considered
• the best interests of the Group’s stakeholders and, as part of this,
it consulted with a wide variety of stakeholder groups, including the
Group’s largest Shareholders, lenders and other relevant authorities;
• whether REIT conversion would help to achieve maximum projected
• the proposed funding of the Acquisition and impact on working
returns for all of our Shareholders;
capital;
• future capital expenditure proposed for the Acquisition;
• impact on sustainability objectives;
• the documentation produced ahead of Shareholders’ votes on the
Acquisition, ensuring it was of a sufficiently high standard, and could
be relied upon by Shareholders, regulators and other stakeholders;
• the regulatory, political and competitor landscape;
• the best interests of our stakeholders; and
• the Group’s existing operations and market presence in London,
impact on local communities, employee matters, suppliers and
potential risks associated with the Acquisition.
• the documentation produced ahead of Shareholders’ votes on the
share buy-back and amendment to the Articles, ensuring it was of a
sufficiently high standard, and could be relied upon by Shareholders,
regulators and other stakeholders;
• results of significant due diligence exercises and assessments
conducted by both internal and external advisors to ensure
compliance with the REIT regime was achievable; and
• the regulatory, political and competitor landscape.
Key:
A Likely long-term consequences
B Interests of employees
D Impact of operations on the community and the environment
E Maintaining reputation for high standards of business conduct
C Need to foster business relationships with suppliers, customers and others
F Need to act fairly between members
Appointment of new
Chairman of the Board
Net Zero Carbon Pathway
s172(1) matters relevant
to this Principal Decision:
A B E
Link to strategy:
• Growth
• Sustainability
• People
s172(1) matters relevant
to this Principal Decision:
A B D E
Link to strategy:
• Growth
• Property
• Sustainability
• People
In February 2022, the Board announced that, following a recruitment
process led by a specially convened Nominations Committee and
advised by an external search consultancy, it had reached the decision
to appoint Richard Cotton as independent Non-Executive Chairman
Designate ahead of Richard Grant’s retirement from the Board in July
2022. The Board also made the decision to appoint Sue Clayton as the
Senior Independent Director (“SID”), succeeding Richard Cotton. For
more information on the Chairman’s succession process, please see
the Nominations Committee report on pages 99 to 105.
What the Board considered
• the Board’s skills matrix, as well as the needs of the business, to
ensure the appointments would bolster the capabilities of the Board,
thus enabling the Group to deliver its strategic priorities, in order to
deliver value to Shareholders, and promote the long-term success
of the Group;
• Richard Cotton’s experience of the UK listed company regime and
understanding of the wider governance and regulatory environment
in which Helical operates to ensure he had the appropriate skills and
expertise to fulfil the role;
• the importance of ensuring that the SID had the ability to look after
the interests of investors and champion the highest standards of
business conduct; and
• the continuity and reassurance the appointments provided to
employees of the Group and investors. Both candidates were known
and trusted by employees and investors, having demonstrated
strong leadership and expertise in their roles on the Board of Helical
and other corporate entities.
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 Group’s Purpose (see page 78).
Much of the Board’s decision making is focused on ensuring that the
Group’s business is sustainable in the long-term, and this forms the basis
of the Viability Statement (see pages 48 to 49). 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 with respect to sustainability.
Sustainability is at the core of all activities at Helical and as well as linking
back to the Group’s Purpose, being sustainable is one of the Group’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 lifecycle.
Over the course of the year, the Board has placed a significant amount
of focus on the setting of our pathway to become a net zero carbon
business by 2030. This is a major commitment but reflects the Group’s
view that property developers have a role to play in the earth’s changing
climate and that we need to act with conviction, and quickly, to reduce our
carbon footprint. The Group’s Net Zero Carbon Pathway was published
alongside these Annual Report and Accounts.
In approving all sustainability strategies, policies and documentation,
the Group engages with, and considers, the views of all its stakeholders.
What the Board considered
• the measurement of the Group’s carbon footprint and the cost
of GHG emissions;
• enhanced emissions reporting obligations;
• options for the offsetting of the Group’s carbon emissions;
• incoming changes to UK building regulations, including planning
approval changes and energy performance certificate (“EPC”)
rating requirements;
• the changing preferences and demographics of customers; and
• the increased cost of raw materials.
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continued
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 Group’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 56 to 73). The Purpose is fundamental
to the strategic direction of the Group and
is therefore under the continuous review of
the Board. This year, our Purpose has been
updated to reflect that sustainability is at the
forefront of the Helical Purpose.
The Helical Purpose:
We create sustainable and inspiring
workplaces which are technologically
smart, rich in amenities and promote
employee wellbeing.
Applying this philosophy we seek to
maximise Shareholder returns through
delivering income growth from creative
asset management and capital gains
from our development activity.
Purpose
Why
Values & Culture
How
Strategy
What
Board oversight of Purpose
This Purpose is overseen by the Board and supports all decisions and actions taken at Board level. The Board exercises oversight of the
Purpose through the receipt of frequent updates from Executive Management on fundamental aspects of business operations and the
execution of Group strategy.
Area of oversight
Frequency
Method of oversight
Corporate governance
Annual and ad hoc as required
Group strategy and management
Annual and ad hoc as required
The Group has clearly defined policies, processes and procedures governing all
areas of the business, which are subject to annual review as well as ad hoc review
in line with changing market circumstances.
The Board attends a meeting dedicated to discussing the Group strategy once
a year.
Progress in achieving the Group’s strategy is reviewed at Board meetings
throughout the year.
Strategic plans for the Group and the annual budget are subject to formal review
and approval by the Board.
Sustainability
Quarterly and ad hoc as required
Sustainability Report presented at every Board meeting.
Development activities
Quarterly and ad hoc as required
Board Sustainability Committee reports material updates to the Board in between
Board meetings via email/text messaging as appropriate.
Sue Farr acts as the designated Non-Executive Director for ESG and Sustainability
and, on behalf of the Board, plays a key role in oversight of sustainability.
The Board’s continuing commitment to conducting its operations to high standards
of health and safety within its operations is demonstrated by receipt of detailed
reports on health and safety matters at each Board meeting.
Financing activities
Our properties
Quarterly
The Chief Financial Officer’s report is presented to the Board at each Board meeting.
Quarterly and ad hoc as required
Detailed reports on each property in the portfolio are prepared by the property asset
managers and are presented at each Board meeting.
Leasing activities
Quarterly
Tenant satisfaction
Quarterly and ad hoc as required
Asset managers present to the Board on the progress of any new developments.
Reports on the Group’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.
78
Our Purpose is inextricably linked to our Values which underpin the behaviours we consider vital to achieving our strategic aims. It is through
our Values that we communicate the key aspects of Helical’s Culture to our stakeholders, providing insight into the principles and the ethics
that support our Purpose.
The Board has articulated the Group’s Culture through the setting of six Values which, combined with the Purpose, align to the policies,
practices and desired behaviours in the business.
Our Values
Integrity
Creative
Through our honest and open approach, we aim
to engender the respect of everyone we work with.
We are passionate about developing innovative
and inspiring spaces.
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.
Collaboration – setting & monitoring the
Helical Values
The Helical Values represent our 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 Group Values
in 2020. To decide which Values best supported the strategic aims
of the business, the Board asked a selection of people across the
Group 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 Group’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, the Board felt
it appropriate to ask them to review the Values again in 2022 and
comment on their continued suitability.
For the second year running, as part of the staff engagement
interviews (for more information see pages 84 to 85), each member
of the workforce was asked to specifically comment on whether
the Helical Values accurately represent the ethos of the business.
Once again, the exercise showed that the Values continued to
accurately represent the Group’s Culture. As a result, the Board was
able to conclude that the current articulation of the Group’s Values
remained appropriate.
Dynamic, collaboration & creative –
engagement through our website and branding
Helical prides itself on being dynamic and at the forefront with respect
to technology and innovation, and the importance of a strong online
presence is incorporated into the Group strategy set by the Board.
In addition to engagement through social media platforms, the Board
recognises that the Helical website is a key medium for engagement
with the Group’s stakeholders. Therefore, ensuring that our website
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.
is fresh and unique, with informative and interesting content, is a
priority of the business. At the end of 2021, management embarked
on designing a new website to ensure that Helical was communicating
with its stakeholders in the most effective manner. The new website
was a collaborative effort, with input being sought from staff below
management level throughout the process. The new website went
live on 23 May 2022. The design of the website reflects the increased
focus on sustainability at Helical and coincides with the release of our
Net Zero Carbon Pathway.
Our Culture
Helical’s objectives for growth, development and long-term survival,
combined with resultant strategies to achieve these objectives, have
a direct link with the Culture of the Group. Culture is ultimately the
responsibility of the Board, but it is recognised that individuals at all
levels must be engaged in order to maintain the Helical Culture. The
embedded Culture is supported by our employees (as evidenced in
the setting and monitoring of the Values), and this results in us having
a high-performing and motivated team which supports the success of
the Group’s 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 pages 46 to 47).
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 Group’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. This diversity in our
workforce also helps to stimulate creativity and contributes to the
open and cohesive Culture exhibited throughout the Group.
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continued
How we monitor and sustain our Culture
• As a minimum, conduct annual review of workforce policies and
procedures – see Board Leadership & Company Purpose section
of the Governance section at pages 94 to 95.
• Employee engagement initiatives – see page 82 and pages 84 to 85.
Feedback from the following initiatives is reported to the Executive
Management team and Board, and considered in decision making:
–Staff engagement interviews;
–One on one sessions with our designated Non-Executive Director
for workforce engagement;
–“Lunch with Leadership” initiative;
–Staff are encouraged to speak up, share concerns and have
candid conversations with management;
–Our small, close knit team environment enables managers to
conduct regular catch-ups with their direct reports; and
–Staff from all teams are invited to the bi-monthly Management
meeting where time is allotted for general concerns or points
of interest outside the ordinary agenda of the meeting.
• Tenant feedback analysis.
• Staff tenure and retention rates (see KPI section on page 24).
• Whistleblowing mechanisms in place, with relevant data reported
to the Board – see page 94 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 56 to 73).
• Investing in training and organisational development for staff.
• Health and safety data, including near misses, reported to the
Management meetings bi-monthly, 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 the Group’s strategy and supports the long-term sustainable
success of the business.
• Collaboration with occupiers throughout the pandemic and through
the UK’s emergence from pandemic-related restrictions.
• Prompt payment to suppliers.
• Promotion of diverse and inclusive environment – see Nominations
Committee Report on pages 99 and 105.
• Consideration of Culture in recruitment and selection, both with
regard to individuals and the recruiters used – see report of the
Nominations Committee at pages 99 to 105.
• Aligning formal rewards with Culture.
• Incentive schemes developed to drive behaviours consistent with
Purpose, Values and strategy – see Directors’ Remuneration Report
Committee on pages 110 to 131.
• We reward positive culture within our workforce e.g. our staff
express the wish to be fit and healthy and over the year we
introduced a “Zen Room” in the office where fitness classes and
massages can take place.
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 Group.
In line with section 172 of the Companies Act 2006, the
Directors of Helical act to promote the success of the Group
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 Group’s actions, and hence play a key role in the
successful execution of the Group’s long-term strategy.
In recognition of the importance of the Group’s relationship
with 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 Group;
(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 Group’s stakeholders are defined in the Stakeholder
Model (see pages 74 to 75) and in the table overleaf. The
Group’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 Group’s stakeholders.
It is through effective engagement that the Board has sought
to understand their views.
We describe 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 in the table overleaf.
Stakeholder engagement
Stakeholder
category
Shareholders
Material issues and
considerations for stakeholders
• Financial performance.
• Generation of long-term
sustainable returns.
• Environmental, social and
governance practice
(“ESG”).
Partners
• Financial performance
and generation of
sustainable returns.
• Collaboration and
communication.
• Risk appetite and
management of the
partnership.
• Corporate responsibility.
Means of engagement
by Board and/or management
How stakeholder engagement has influenced
decision making and execution of our strategy
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.
• AGM presentations and Q&A.
• General Meetings.
• Property tours.
• The Executive Directors held talks with relevant
employee Shareholders covering remuneration,
with a focus on the PSP and the SIP.
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.
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 Board considered and responded to emails from
individual Shareholders in connection with the 2021
Annual Results/AGM;
• The Executive Directors sought the views of the
Shareholders with respect to the acquisition of
100 New Bridge Street, EC4 (see Principal Decisions
section on page 76);
• The Executive Directors engaged with the Company’s
largest institutional Shareholders in advance of the
decision to convert to a REIT and sought their views
on the election;
• The Board considered and responded to emails from
individual Shareholders in connection with the General
Meetings held in February and March 2022; and
• The Board engaged with the employee Shareholders
throughout the year and considered their views. See
Engagement with the workforce section on pages 84
to 85 for more details.
Direct Board level engagement
• Executive Directors meet with key business
partners (joint venture partners) and report back
to the Board on a regular basis.
• 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.
• Key business partners (joint venture partners) are
invited to attend 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.
Occupiers
(tenants/
customers)
• Quality of service
provided.
Direct Board level engagement
• CEO led the tenant support initiative implemented
• Delivery of quality space
to meet needs.
• Ability to meet needs of
changing markets.
• Value for money.
at the beginning of the UK’s first national lockdown.
This initiative was continued throughout the
pandemic.
• Feedback received directly from occupiers, and
indirectly through tenant engagement apps, is fed
into Board discussions.
Company level/indirect Board engagement
• Occupier engagement programme is run
throughout the portfolio, led by managing agents,
Ashdown Phillips.
• Tenant engagement apps rolled out to occupiers
in several Helical buildings.
• Programme of meetings with occupiers on a
regular basis, with specific engagement during
crisis situations e.g. Covid-19.
The positive feedback from occupiers on the tenant
engagement apps has led to the app being rolled out to
The Bower during the period.
In conjunction with our managing agents, Ashdown Phillips,
we have utilised data from our occupiers to improve energy
efficiency e.g.:
• SkySpark operational at The Bower;
• New air conditioning controls at 25 Charterhouse Square;
• Equiem roll out at The Loom;
• BREEAM in Use submission for The Loom;
• Bio Enzyme Cleaning at The Bower; and
• Quarterly Green Group meetings held with occupiers to
discuss sustainability initiatives being implemented in the
buildings and being considered for the future. Quantitative
data is also produced to support any changes. The
meetings also enable our occupiers to communicate their
goals in relation to sustainability and assistance is provided
to help them achieve their desired accreditation.
– see also Sustainability Report on pages 56 to 73
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. 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.
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continued
Stakeholder
category
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
Stakeholder
category
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
Suppliers and
contractors
• Agreement of and
compliance with
appropriate payment
terms.
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.
• 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.
• 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 are shared
with all suppliers and contractors.
• Regular communication and feedback, with
increased dialogue with certain key suppliers
affected by political and economic uncertainties.
• Paying suppliers and contractors fair fees.
• Bi-monthly meeting with the Group’s IT service
provider.
• Helical’s website.
During the Covid-19 pandemic, we supported the
implementation of contractor welfare initiatives for those
working on Helical construction sites. Over the year we
monitored sites to ensure their compliance with guidance
published by Public Health England and the Construction
Leadership Council and supported the implementation of
recommendations as appropriate.
Following the results of a questionnaire completed by the
contractors working at our 33 Charterhouse Street, EC1
site, we supported the implementation of on-site lateral flow
testing which has continued throughout the period.
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.
regulatory and industry bodies.
Company level/indirect Board engagement
• Transparent statutory reporting.
• Open approach to communication.
• Board oversight of key relationships and areas
impacted.
• Monitoring updates to legal
and regulatory
environment, including the
impacts of Brexit and
Covid-19.
• Strong dialogue with regulatory agencies and
Government bodies e.g. HMRC
• Reports on the results of active participation
through industry groups presented to Board.
• Helical’s website.
• Assisting industry forum consultations e.g. the
British Council for Offices research on cycle
facilities in office buildings.
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.
As part of the UK REIT conversion process, management
engaged directly with its advisors and HMRC at various key
stages of the conversion. The efficiency of the conversion
process was assisted via direct engagement with HMRC
and the Group was able to implement all the necessary
changes within a tight, 15-week, timetable, following
the announcement of its intention to convert to a REIT
on 12 January 2022.
Consideration is given to regulatory and environmental
impact in every Board decision.
Employees
• Opportunities for training
and development.
• Fulfilling and rewarding
work in a safe and
comfortable environment.
for ongoing workforce engagement:
– Invited staff to meet with her on a one-to-one basis;
and
Direct Board level engagement
• Designated Non-Executive Director responsible
Outcomes of engagement deriving directly from the
feedback garnered from the 2021 initiatives:
• Fair treatment, recognition
– Contactable via email all year round.
and remuneration.
• Role of the designated Non-Executive Director for
• Diverse and positive
culture.
workforce engagement published for all staff.
• Open and inclusive culture through Purpose and
• Strategy sessions extended beyond the Board and ExCo
and led by the Executive Directors:
– All staff strategy briefing;
– Property Executives’ strategy meeting; and
– Finance Team strategy meeting.
• Appointment of external HR consultant
Values.
• Executive Directors present Strategy Update to staff.
• Board annually reviews key workforce policies and
procedures.
• All staff are invited to become members of the SIP
on appointment to the Company, and consequently
are invited to attend the Company’s AGM, where
they have the opportunity to engage with the Board
and with other stakeholders.
Company level/indirect Board engagement
• Staff satisfaction survey/interviews.
• Regular staff appraisals.
• Majority of staff attend Management meetings,
• “Lunch with Leadership” – Inviting individual members
of staff to attend lunch with the Directors after each
quarterly Board meeting.
• Subsidised bike servicing scheme offered to staff.
• CFO conducted a presentation on remuneration matters
to staff.
• “Zen Room” introduced into the office.
• Increased engagement on business activities:
– Our property executives have conducted portfolio
tours with members of our finance team and support
staff, as well as the NEDs.
For information on the outcomes of the workforce
engagement initiatives please see pages 84 to 85.
on a rotational basis.
• Helical’s website.
• Staff consulted in the Helical re-branding and
website refresh exercises.
• Maintenance of the Staff Handbook.
• Staff property tours.
Local
communities
• Ethical and responsible
corporate behaviour.
Direct Board level engagement
• CEO engages on community and environmental
We responded on key topics raised during the reporting
period through a wide range of initiatives including:
• 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.
initiatives on behalf of the Group.
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 continuing to suffer financial hardship
as a result of the 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, both global
and regional, through the Sustainability Committee.
• Submissions to sustainability benchmarks and
indices.
• Publication of our “Net Zero Carbon Pathway”.
• Continued sponsorship and local charitable giving, e.g.:
– The Helical Bursary, established in 2017, supports
Real Estate and Planning students studying at Henley
Business School, University of Reading;
– Helical was the headline sponsor for LandAid’s
second virtual 10k run in June 2021 and reached
a milestone of £1m raised for the charity since
its creation;
– Celebrated and supported LandAid Day in November
2021;
– Donation to the London City Farms and Community
Garden Association and volunteer days planned for
2022;
– Supported the after-school Science Club being run
by Mace at Prior Weston Primary School (near
33 Charterhouse Street, EC1); and
• Engagement with prospective future property
professionals via the Helical Work Experience
Programme.
– Various initiatives with local charities run in conjunction
with our managing agents, Ashdown Phillips.
• 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 continue to be
considered as part of Group strategy.
For further details on our engagement with local
communities, please see the Sustainability Report on
page 72.
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continued
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 pages 53 to 55), 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
Helical Culture (see pages 79 to 80). 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.
Initiatives deriving directly from staff engagement
in 2021
• Employees attending Board lunches to engage with Directors in
an informal setting: “Lunch with Leadership” initiative.
• The extension of strategy sessions beyond the Board and ExCo,
and led by the Executive Directors:
– All staff strategy briefing;
– Property Executives’ strategy meeting; and
– Finance Team strategy meeting.
• Increased engagement on key business activities/what we do:
– Our property executives have conducted portfolio tours with
members of our finance team and support staff; and
– Helical re-branding and website refresh – engagement has taken
place with staff from all levels of the organisation and their input
valued.
• Appointment of external HR consultant, to answer the staff’s
HR related queries.
The Board values the information derived from the staff engagement
process and to ensure that it is fully informed on staff opinion, ensures
that an agenda item dedicated to discussing the outcomes of the
staff engagement initiatives is tabled during the second half
of each calendar year.
I found it thoroughly enjoyable, I have done
various short-term property experiences
throughout my time at university and this was
by far the most enjoyable. Everyone we met
from Helical was a great advert for the company
and the industry as a whole.” Work experience student
Engaging with stakeholders of the future –
Helical’s Work Experience Programme
Helical also considers its potential future stakeholders when
conducting its stakeholder analysis. We regard school and university
students as the future of the property industry, and we therefore
deem it important to engage with this stakeholder group and we invite
students to join our programme annually.
In September 2021, Helical coordinated a Work Experience
Programme for property students from a range of learning institutions.
Over the course of two days, the students were taken on a tour of
our London portfolio, including the 33 Charterhouse Street, EC1
construction site. They also attended talks with our CEO and DNED
and various members of senior management on a variety of industry
pertinent topics. In addition, the tour incorporated visits to several
prime London real estate developments, such as Kings Cross and
the Battersea Power Station. Feedback from the students was
exceedingly positive, and we intend to continue to operate the event
annually for the benefit of the industry’s future stakeholders.
You and your team have shown me what is
required to create and manage buildings of
the highest quality that will stand the test
of time. It has been enlightening to see the
new developments in your portfolio such as
Kaleidoscope and 33 Charterhouse Street.
Personally, I think when they are both complete,
they will become iconic buildings in London due
to their ingenuity through using technologies right
at the forefront of the market.” Work experience student
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 coincides with our
Values (see our Values on page 79).
The benefits to the business and the wellbeing of our staff can
be clearly demonstrated through the outcomes of the 2021 staff
engagement interview process. Our staff greatly appreciated the
opportunity to have their views heard and ideas actioned, and as
a result of the initiative’s success, the Board instructed a repeat
of the interview exercise for the period to 31 March 2022.
This year’s one-on-one staff engagement interviews were again
conducted 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 chosen 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.
Once all the interviews had been conducted, Lois relayed the
feedback from her survey to Sue Clayton, who will be reporting the
findings to the Board later in the year. The Board will report on the key
results and actions from the staff engagement interviews in next year’s
Strategic Report.
Sue Clayton
Non-Executive Director
for workforce engagement
Sue Clayton – designated Non-Executive
Director for workforce engagement
Since being appointed as the designated Non-Executive
Director for workforce engagement in 2019, Sue has been
successfully building on the engagement between the Board
and the workforce.
This year, Sue offered to meet with staff on a one-to-one basis,
to enable in depth and confidential engagement with the
workforce. In addition to the one-to-one 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.
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 reviewed
by the Board annually and
available to view on our
website: https://www.helical.
co.uk/governance/
governance-policies/
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Richard Grant
Chairman
Over the course of the year, our stakeholders
have continued to contribute to our success
and stakeholder engagement will remain high
on the Board’s agenda going forward.”
Governance at Helical
Supporting our continued strategy execution,
business resilience and commitment to long-term
success for our stakeholders.
Dear Shareholder,
On behalf of the Board, I present to you my final Corporate
Governance Report as Chairman. The Report, covering the year
ended 31 March 2022, sets out Helical’s governance processes and
explains how they help to create the appropriate environment to
enable the long-term success of the business. I am pleased to report
that, as we emerged from the pandemic over the course of the year,
the Board has been able to meet physically for the majority of the
meetings in our governance calendar and was able to invite our
Shareholders to attend our 2021 AGM and subsequent EGMs (for
more details on the business of the EGMs, please see page 76).
Furthermore, despite the macroeconomic and geopolitical
uncertainties facing the market, Helical has achieved a strong set
of results for the financial year and I refer you to the Strategic Report
on pages 2 to 45 to read about our achievements in more detail.
Governance and strategic oversight
Looking beyond the unprecedented external challenges created
by the pandemic, the Group has had a particularly busy year and
our robust governance framework has proven to be critical to
the effective leadership of the Company over the period.
Over the year, oversight of our strategy and its implementation
continued to be a key responsibility of the Board. The Board oversaw
the successful completion of the acquisition of 100 New Bridge Street,
EC4 (“Acquisition”) requiring Shareholder approval as a Class 1
transaction (for more details see page 76) and the conversion of the
business into a Real Estate Investment Trust (“REIT”) (further details
can be found on page 76). As part of this oversight, the Board attended
a number of additional Board meetings to consider the implications of
each decision and conduct a thorough assessment of the associated
risks. Through these enhanced oversight exercises the Board was able
to conclude that both the Acquisition and the REIT conversion would
contribute to the long-term success of the business. Further details
of the points considered on each of these Principal Decisions can be
found on pages 76 to 77.
Stakeholder engagement
Our stakeholders continue to play a pivotal role in Company strategy
and their interests are taken into consideration in every decision we
make as a Board. The Board places great importance on maintaining
effective levels of engagement with all our stakeholders and you
can read more about our approach to stakeholder engagement
and the Directors’ duties in this regard on pages 74 to 85 of the
Strategic Report.
Changes to the Board
I am pleased to confirm that, following a comprehensive search
process led by a specially convened Nominations Committee and
advised by external search consultancy Sam Allen Associates,
Richard Cotton was chosen as my successor and it is proposed that
he will assume the role of Board Chairman with effect from the close of
business of the Company’s 2022 AGM. It is also intended that, subject
to her re-election being approved, Sue Clayton will take on the role of
Senior Independent Director.
It has been a privilege to have sat on the Board of Helical for almost
ten years and to have served as Chairman for the last three. Richard
Cotton is an ideal successor to continue the positive momentum we
have created and I wish him, the Board and the business continued
success. I should also like to express my thanks to everyone I have
had the pleasure of working with during my time on the Board.
I have commenced a thorough induction process with Richard and
I am confident that he will be well prepared to step into the role of
Chairman following my retirement from the Board on 14 July 2022.
For further information on the Chairman’s succession process
see pages 77 and 103.
Richard Cotton
Chairman Designate
I feel honoured and delighted to be succeeding
Richard as Chairman and I am very much looking
forward to continuing to work with the dedicated
team at Helical and supporting them in ensuring
the long-term success of the Group.
Richard Grant has dedicated almost ten years to
Helical and I hope to emulate his strong leadership
skills, ensuring continuity of governance and
providing effective stewardship over the Company
whilst also imparting my own knowledge and skills
to my fellow Directors.
I look forward to sharing highlights of my first year
as Chairman in next year’s Annual Report.”
Summary
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
with the exception of Provision 19 relating to my tenure on the Board
(please see page 103 for further details). 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.
Over the course of the year, our stakeholders have continued to
contribute to our success and stakeholder engagement will remain
high on the Board’s agenda going forward.
In light of our performance this year, I am pleased to confirm that the
Board has declared a final dividend of 8.25 pence per ordinary share
(2021: 7.40 pence), bringing the full year dividend in respect of the
financial year to 11.15 pence per ordinary share (2021: 8.70 pence).
As I say goodbye to Helical, I am confident that Helical is well positioned
to pursue its strategy and take advantage of opportunities in the
forthcoming years and I look forward to witnessing the achievements
of the business and the ongoing success of the Group.
The following pages describe our governance structure and the work
of the Board and its Committees in greater detail.
Richard Grant
Chairman
24 May 2022
86
87
GovernanceHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Board of Directors
Our Board
Governance and leadership
The Board of Helical is collectively responsible
for providing effective leadership of the Group
within a framework of controls and reporting
structures designed to assist the pursuit of
strategic aims and business objectives.
Joe Lister
Non-Executive Director and Chair
of the Audit and Risk Committee
Richard Grant (seated)
Board Chairman and Chair of
the Nominations Committee
Tim Murphy
Chief Financial Officer
Sue Farr
Non-Executive Director, Chair of
the Remuneration Committee and
designated Non-Executive Director
for ESG & Sustainability
Gerald Kaye
Chief Executive and Chair
of the Executive Committee
James Moss (seated)
Chief Operating Officer and
Company Secretary
Sue Clayton (seated)
Non-Executive Director, Chair of the
Property Valuations Committee and
designated Non-Executive Director
for workforce engagement
Richard Cotton
Chairman Designate and
Senior Independent
Director
Matthew Bonning-Snook
Property Director and Chair of
the Sustainability Committee
BOARD TENURE
0-3 years
4-6 years
7-9 years
10+ years
2
2
2
2
88
89
Governance Board of Directors
continued
Richard Grant
Board Chairman and Chair of
the Nominations Committee
Gerald Kaye
Chief Executive and Chair
of the Executive Committee
Tim Murphy
Chief Financial Officer
Matthew Bonning-Snook
Property Director and Chair of
the Sustainability Committee
Sue Clayton
Non-Executive Director, Chair of the
Property Valuations Committee and
designated Non-Executive Director
for workforce engagement
Richard Cotton
Chairman Designate and
Senior Independent Director
Board meetings present:
6/6
Board meetings present:
6/6
Board meetings present:
Tenure:
Independent:
9 years
Tenure:
27 years
Tenure:
No
Independent:
No
Independent:
6/6
9 years
No
Board meetings present:
6/6
Board meetings present:
6/6
Board meetings present:
Tenure:
Independent:
14 years
Tenure:
6 years
Tenure:
No
Independent:
Yes
Independent:
6/6
6 years
Yes
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.
At the 2021 AGM, the Shareholders were asked
to approve the extension of Richard’s tenure
beyond that recommended by the UK Corporate
Governance Code (“UK Code”). The Directors
sought to extend Richard’s tenure as they deemed
his skills and experience as vital to ensuring
stability and continuity as the business navigated
its way out of the Covid-19 pandemic. Richard will
not be standing for re-election at the 2022 AGM
and it is intended that he will be succeeded by
Richard Cotton (please see pages 77 and 103
for more information).
Other external appointments
• Industrials REIT – Board Chairman and Chair
of the Nominations Committee.
• Wittington Investments (Properties) Limited –
Board Chairman.
90
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.
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, and subsequently Chief Financial Officer in
2022. 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
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.
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 Group (see also our
report on Helical’s workforce engagement initiatives
at pages 84 to 85).
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.
The Board determined that Sue’s skill set and
professional experience made her a highly
appropriate successor to Richard Cotton in the role
of Senior Independent Director, and it is intended that
she will assume this role on conclusion of the 2022
AGM (please see page 103 for more information).
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
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.
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.
Richard has been appointed by his fellow Directors
as Chairman of the Board designate, and it is
intended that he will succeed Richard Grant at the
conclusion of the 2022 AGM. For more details on
Richard’s appointment process, please see page
103 of the Nominations Committee Report.
Other external appointments
• Senior Independent Director of Big Yellow
Group plc.
• A member of the Commercial Development
Advisory Group at Transport for London.
91
GovernanceHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Board of Directors
continued
Joe Lister
Non-Executive Director and Chair
of the Audit and Risk Committee
Sue Farr
Non-Executive Director, Chair of
the Remuneration Committee and
designated Non-Executive Director
for ESG & Sustainability
James Moss
Chief Operating Officer and
Company Secretary
Board meetings present:
6/6
Board meetings present:
6/6
Board meetings present:
Tenure:
Independent:
3 years
Tenure:
2 years
Tenure:
Yes
Independent:
Yes
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 on 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.
6/6
7 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 subsequently appointed Chief
Operating Officer in May 2022.
James has a broad range of responsibilities,
contributing to setting and delivering Helical’s
strategy and ensuring its operational and financial
effectiveness. As Company Secretary, he is
responsible for corporate governance and Board
administration matters.
James was previously at Grant Thornton, where
he was responsible for leading audit and other
assurance assignments in their real estate division.
Corporate governance
report
Corporate governance report structure
We have structured our Corporate Governance Report to reflect the five pillars of the code:
I
II
III
Board Leadership and
Company Purpose
Division of
Responsibilities
Composition, Succession
and Evaluation
→ See page
94
→ See page
96
→ See page
99
IV
Audit, Risk and
Internal Control
→ See page
106
V
Remuneration
→ See page
110
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.
Statement of compliance with the UK Corporate
Governance Code 2018
For the year to 31 March 2022 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, with the exception of Provision 19 relating to the
Chairman’s tenure on the Board. In last year’s Annual Report, we
explained the reasoning behind the extension of Richard Grant’s
role (please see page 88 of our 2021 Annual Report and Accounts)
and, given the success achieved by the Group this year, the Board
recognises that Richard’s stalwart leadership throughout his
extended tenure has helped the Board to function effectively and has
supported the continued long-term success of the business. Having
successfully navigated the Group through the height of the pandemic,
Richard is due to step down from his role as Chairman at the 2022
AGM and it is intended that he will be succeeded by Richard Cotton.
For more information regarding the Chairman’s succession process,
please see the Report of the Nominations Committee on page 103.
The Code, along with the Financial Reporting Council’s 2018
Guidance on Board Effectiveness, has informed the Group’s
governance practices, particularly with respect to the Board’s
effectiveness and decision making, and has contributed to the
delivery of strategy.
Underpinning Helical’s Business Model is a commitment to robust
corporate governance; a component that is essential for achieving
the Group’s objective of long-term value creation for stakeholders.
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 Helical’s
direction and performance is 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 the effective promotion of the long-term success of the Group.
92
Helical plc — Annual Report and Accounts 2022
93
GovernanceHelical plc — Annual Report and Accounts 2022 Corporate governance report
I BOARD LEADERSHIP AND
COMPANY PURPOSE
The Board appreciates the Group’s broader role in society and the
need to engage with all those affected by its endeavours. The Directors
prioritise their duty to promote the success of Helical 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 pages 80 to
85). How the Board members discharged their statutory s172(1) Duties
when making Principal Decisions is described on pages 76 to 77.
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 pages 79 to 80 of the
Strategic Report). 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 Directors’
Remuneration Report on pages 110 to 131. The Helical Purpose
and Values are also taken into account when setting the Group’s
Remuneration Policy and structure. Details of this can be found
in the Directors’ Remuneration Report on pages 110 to 131.
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 to further embed the Group’s Culture through
information sharing and engagement between the Board and the
workforce. During the reporting period, the Board renewed its
approval of the terms of reference for the role of the designated Non-
Executive Director for workforce engagement and this document
serves to reinforce the Board’s emphasis on the importance of
effective workforce engagement with the workforce. For more
information on Sue’s role in enabling the Board to monitor the
Group’s Culture and in ensuring that the Culture is reflected in
decision making, please see pages 79 to 80.
Another effective way in which Helical has monitored its Culture
throughout the period is through individual staff interviews. Please
see pages 84 to 85 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.
Helical’s Culture and Values are reinforced through the Group’s Supplier
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 Group publishes certain key policies on its website (https://www.
helical.co.uk/investors/governance/governance-policies/). All Group
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 Group strategy, please see pages 78 and 79.
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 at pages 80 to 85.
As well as being linked to the Culture, the Purpose and Values flow
through to other policies, practices and behaviours in the business.
For example, the Value of working sustainably underpins the Group’s
strategy and more detail on this can be found in the Sustainability
section on pages 56 to 73.
As confirmed in the Group’s most recent internal Board evaluation
(for more information on the 2021 / 22 internal Board evaluation, please
see the Report of the Nominations Committee on pages 104 to 105),
the Board of Directors collectively have the skills and experience
required to deliver effective leadership of the Group. 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
Group’s leadership is effective and balanced (see pages 90 to 92
for details).
Annual Board 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 Group’s objectives with the interests of its
stakeholders.
In September 2021, 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, followed by a
presentation from Peel Hunt on the UK Equities Market and Helical’s position and future potential.
At the meeting, the Directors focused their discussions on the geopolitical and economic climate, sustainability and the environment,
the property market and the interests of Shareholders and other stakeholders. Having considered these factors, the Directors carefully
deliberated and agreed upon the key strategic options that would be incorporated into the Group’s strategy for the forthcoming year.
I BOARD LEADERSHIP AND COMPANY PURPOSE
Effectiveness
Matters considered by the Board in 2021/ 22
CORPORATE RESPONSIBILITY
GOVERNANCE AND RISK
• Receipt of reports from the Sustainability Committee to assess
the Group’s approach to sustainability and establish a future
strategy with objectives;
• Approval and launch of the “Designing for Net Zero” guide; and
• Consideration of the Group’s Net Zero Carbon Pathway.
STRATEGY
• Review of corporate objectives;
• Appointment of Peel Hunt as the Company’s joint corporate
broker;
• Review of market trends, opportunities and risks;
• Annual off-site Board meeting focused on strategy;
• Receipt of regular strategy updates; and
• Approval and publication of the Group’s guide “Designing for
Net Zero”.
PROPERTY TRANSACTIONS AND OPERATIONS
• Approval of material property transactions and opportunities
e.g. 100 New Bridge Street, EC4;
• Approval of the Group’s conversion into a Real Estate Investment
Trust; and
• Review of independent valuations of properties.
FINANCIAL AND OPERATIONAL PERFORMANCE
• Approval of the Group’s full year and half year results;
• Review of the capital and debt structure;
• Quarterly review of the Group’s Health and safety performance;
• Oversight of the Group’s Health & Safety policy;
• Review of risk strategy and risk appetite and reaffirming the
Group’s Risk Framework;
• Financial crime risks and mitigation, including external review;
• Bi-annual review of principal and emerging risks facing the
Group;
• Continued consideration of cyber security and mitigation of
cyber risks;
• Monitoring of performance and continued development of health
and safety risk mitigation;
• Continued consideration of the implications of the Covid-19
pandemic and geopolitical instability, as well as other matters
of global macro significance, 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
and timeliness of Board papers;
• 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
• Review and approval of the annual Modern Slavery Statement.
• Assessment of viability and going concern, including sensitivity
analysis;
PEOPLE
• Receipt of regular reports from the Chief Executive and the
Chief Financial Officer;
• Approval of the Group budget;
• Review of succession and talent management processes within
the Group;
• Receipt of feedback from the designated Non-Executive Director
• Review of the dividend policy and recommendation of the 2021
final dividend and approval of the 2022 interim dividend;
regarding the employee engagement initiatives and
consideration of issues raised;
• Receipt of presentations from senior management from across
the business and consideration of reports on matters of material
importance to the Group;
• Review and approval of the Annual Bonus calculations for the
31 March 2021;
• Review of staff engagement mechanisms including oversight
• Approval of major capital and operating expenditure proposals;
and review of Group whistleblowing procedures;
and
• Review of financing proposals.
• Executive and Non-Executive development and succession
planning, notably the appointment of the new Board Chairman
and the SID;
• Evaluation of the Board’s effectiveness; and
• Engagement with the Group’s stakeholders and consideration of
their interests when making Board decisions (please see pages
80 to 85).
94
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GovernanceHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Corporate governance report
continued
II DIVISION OF
RESPONSIBILITIES
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 Peel Hunt and Numis 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 90 to 92.
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 99 to 105.
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.
Throughout the year, the Chairman has continued to directly engage
with our Shareholders, making himself available for meetings at their
request. This direct form of engagement supplements the planned
investor relations programme undertaken each year (see page 98
for details). Any feedback from the Chairman’s interactions with
Shareholders is 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 pages 80 to 85.
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 Richard Cotton, SID, as part of the 2021 / 22 internal Board
evaluation (for further details, please see pages 104 to 105).
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 this role at Helical, please see pages 84 and 85 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/governance/
governance-policies/.
Company Secretary
Our Company Secretary plays a leading role in the Group’s
governance structure. Under the direction of the Chairman, the
Company Secretary’s responsibilities include:
• Maintaining a record of attendance at Board meetings and
Committee meetings;
• 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.
II DIVISION OF RESPONSIBILITIES
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 consultations
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.
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 pages
90 to 92 for the diverse skill set of the Board, which provides for
balanced and effective leadership of the Group). During the year
ended 31 March 2022 six scheduled Board meetings were held,
with an additional six unscheduled meetings held to discuss specific
issues and events.
The Board also held its annual strategy event in September 2021,
at which the Directors participated in focused discussions on 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 94 for further details).
Board attendance at scheduled meetings
Board meetings – 1 April 2021 to 31 March 2022
Richard Grant, Non-Executive Chairman
Gerald Kaye, Chief Executive Officer
Richard Cotton, Chairman Designate and Senior Independent Director
Sue Clayton, Non-Executive Director
Joe Lister, Non-Executive Director
Sue Farr, Non-Executive Director
Tim Murphy, Chief Financial Officer
Matthew Bonning-Snook, Property Director
Board
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 Group’s Purpose, Values and Culture, and
ensuring that these are aligned with the Group’s strategic
aims and objectives;
• approving changes to the Group’s capital, corporate and
governance structures;
• reviewing management and operational performance,
including health and safety;
• oversight and approval of the Group’s financial reporting;
• approving the risk appetite of the Group and ensuring the
maintenance of a robust system of controls and risk
management;
• review of the adequacy and security of the Group’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;
Attendance
• ensuring satisfactory dialogue, and approving all formal
6/6
6/6
6/6
6/6
6/6
6/6
6/6
6/6
communications with Shareholders;
• ensuring effective engagement with, and encouraging
participation from, the Group’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 (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 (Chief Financial Officer)
• 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/governance/governance-policies/
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GovernanceHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Corporate governance report
continued
II DIVISION OF RESPONSIBILITIES
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.
Committee members:
• Richard Grant (Chair)*, Non-Executive Director
• Sue Clayton, Independent Non-Executive
Director
• Richard Cotton, 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 99 to 105.
* Richard Grant did not chair the Committee meetings
which dealt with the appointment of his successor.
Remuneration Committee
Assists the Board in fulfilling its responsibility to
Shareholders to ensure that the Remuneration
Policy and practices of the Group 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
• Joe Lister, Independent Non-Executive Director
Please also see Report of the Remuneration
Committee on pages 110 to 131.
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 Officer
• Tim Murphy, Chief Financial Officer
• Matthew Bonning-Snook, Property Director
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 Group’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:
• Joe Lister (Chair), Independent Non-Executive
• James Moss, Chief Operating Officer
Director
• Tom Anderson, Senior Investment Executive
• Sue Clayton, Independent Non-Executive
Director
• Richard Cotton, Independent Non-Executive
Director
• Sue Farr, Independent Non-Executive Director
Please also see Report of the Audit and Risk
Committee on pages 106 to 109.
Property Valuations Committee
Reviews the valuations of the Company’s property
portfolio and reports to the Audit and Risk
Committee on its findings.
Sustainability Committee
Assists the Board in setting and monitoring the
Company’s sustainability strategy, policies, targets
and performance.
Committee members:
• Sue Clayton (Chair), Independent Non-Executive
Committee members:
• Matthew Bonning-Snook (Chair), Property
Director
Director
• Gerald Kaye, Chief Executive Officer
• Laura Beaumont, Head of Sustainability
• Matthew Bonning-Snook, Property Director
• John Inwood, Head of Asset Management
• Tom Anderson, Senior Investment Executive
• Pavlos Clifton, Senior Development Executive
Please also see Report of the Audit and Risk
Committee on pages 106 to 109.
• Lois Robertson, Operations Manager
For further details on the Group’s sustainability
initiatives, please see pages 56 to 73.
Key investor relations activities
2021
April
May
May/June
July
Trading Update
Annual results announcement and analysts’
presentation for the full year to 31 March 2021
Investor Roadshow presentations
Trading Update
Annual General Meeting
September/October
Investor Roadshow Presentations
October
November
Trading Update
Results announcement and analysts’ presentation for
the half year to 30 September 2021
November/December Investor Roadshow presentations
Annual General Meeting
For details of the resolutions passed at the 2021 AGM and the voting
results, please visit our website: https://www.helical.co.uk/investors/
agm-gms/
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 page 108.
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 134.
Extraordinary General Meeting – Approval of acquisition
of 100 New Bridge Street, EC4
Extraordinary General Meeting – Approval of matters in
connection with REIT conversion
Trading Update
2022
February
March
April
98
III
COMPOSITION, SUCCESSION
AND EVALUATION
Nominations Committee
Committee membership and attendance Attended Absent
Committee meeting
attendance
Richard Grant (Chair)*
Sue Clayton
Richard Cotton
Sue Farr
Joe Lister
Independent
No
Yes
Yes
Yes
Yes
* Richard Grant was not chairing meetings when his succession was discussed.
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/governance/governance-policies/
Key highlights of 2021⁄22
• Appointment and induction
of Richard Cotton as
Chairman Designate,
successor to Richard Grant.
• Appointment of Sue Clayton
as Senior Independent
Director (“SID”) Designate,
successor to Richard Cotton.
• Internal Board evaluation
conducted at the beginning
of 2022.
• Review of succession plans
for the Board and senior
management.
Key areas of focus for
2022⁄23
• Completion of the induction
of new Board Chairman.
• Consideration of
appointment of a new
Non-Executive Director.
• Succession pipeline for
senior management to
remain under review.
• Continued focus on diversity
throughout all levels of the
organisation.
• Externally facilitated Board
evaluation to be conducted
in early 2023.
Richard Grant
Chair of the Nominations
Committee
Dear Shareholder,
I am pleased to present the Nominations Committee Report covering
the work of the Committee during the year to 31 March 2022. This
shall be my final report as Committee Chair (please see below), and
I have been proud to serve the Shareholders since my appointment
to the role in July 2019.
The Committee met three times over the year and spent a significant
proportion of its time considering the appointment of a new Board
Chairman and Senior Independent Director. The composition of the
Board and its Committees and succession planning for the Board and
that of senior management were also afforded significant attention
over the period. In addition, the Committee oversaw the 2022 Board
Effectiveness Review which was conducted internally.
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
Group’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.
The 2022 AGM shall be my last, as I am retiring from the Board. It is
proposed that Richard Cotton will be my successor as Chairman and
Sue Clayton will assume the role of SID, currently held by Richard
Cotton, with both changes being subject to their re-election at the
2022 AGM (for more details, please see page 103).
Directors’ elections
In compliance with the Code, all the Directors shall be subject to
annual re-election. With the exception of my position on the Board,
all the Directors will be putting themselves forward for re-election at
the 2022 Annual General Meeting (“AGM”) of the Company. Please
see the Notice of Meeting of the 2022 AGM for additional information
and the recommendations on re-election. The Board is satisfied that
each of the Non-Executive Directors being put forward for re-election
continue to be independent and that they continue to be effective
and dedicated to the role.
99
GovernanceHelical plc — Annual Report and Accounts 2022
Corporate governance report
continued
III COMPOSITION, SUCCESSION AND EVALUATION
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, underpins each of our Values
which support the execution of the Board’s strategic objectives,
and is therefore key to the achievement of the Group’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 Group’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 reflects our continued commitment to promote an inclusive and diverse culture.
We are pleased to report on the progress made with respect to our Board Diversity and Inclusion Policy objectives:
BOARD DIVERSITY AND INCLUSION POLICY OBJECTIVE
PROGRESS UPDATE
In reviewing Board composition, the Nominations 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 Nominations Committee will oversee the development of a
diverse pipeline for succession for 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
Nominations Committee will consider, both internal and external,
candidates on merit against objective criteria and with due regard
to the benefits of Board diversity.
Diversity is carefully considered as part of the Board’s annual review
of both Board and Committee composition.
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 conducting the search for the new Board Chairman, the specially
convened Nominations Committee applied this objective. See page
103 for more details.
The Nominations Committee will strive to engage executive search
firms who have signed up to The Standard Voluntary Code of
Conduct for Executive Search Firms.
This objective was met during the year, with external search
consultancy, Sam Allen Associates, being engaged to assist with
our search for a new Board Chairman.
As part of the annual Board evaluation, the Nominations 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 Nominations Committee will maintain oversight of market
practice and the legal/regulatory environment relating to diversity
and inclusion in UK publicly listed companies.
The Nominations Committee may set targets for Board diversity on
a regular basis and will oversee plans for diversity and inclusion and
assess progress annually.
During the year, the Nominations Committee undertook a formal and
rigorous internal evaluation of the Board and its Committees. This
year’s internal review formally considered the composition of the
Board and its Committees, and focused its review upon the balance of
skills, experience, length of service, knowledge of the Group and wider
diversity considerations. This review was aided using a skills matrix.
Particular attention was also paid to the specific focus areas identified
in the 2021 internal review, one of which being the continued focus
on diversity throughout all levels of the organisation with respect to
appointments (please see pages 104 to 105 for further details).
The Board monitored the developments with respect to the FCA’s
consultation on “Diversity and inclusion on company boards and
executive committees” and supports the final proposals which
seek to improve transparency in reporting. In line with best market
practice, the Board has elected to disclose its data on diversity and
inclusion in accordance with the FCA’s final policy decision published
in April 2022 (see page 101).
Gender diversity at Board level improvements: At the conclusion of
the 2022 AGM, 29% of our Board members will be female, up from
25%, and notably the role of Senior Independent Director will be held
by a woman.
Further statistics regarding gender diversity are set out in the
Sustainability section on page 73.
Whilst Helical has historically not set specific targets for diversity on the Board, the Committee is supportive of the FCA’s proposals set out
in its “Diversity and inclusion on company boards and executive committees” consultation and is keen to demonstrate its support by reporting
in accordance with the changes to the Listing Rules ahead of the mandatory reporting date.
III COMPOSITION, SUCCESSION AND EVALUATION
The Committee has set out its status of compliance with the FCA’s new board diversity targets as at 31 March 2022 as follows:
FCA BOARD DIVERSITY TARGET
COMPLIANCE AT HELICAL
At least 40% of the board are women (including those self-identifying
as women)
Currently 25% of the Helical Board is comprised of women.
The Committee is pleased to report that at the conclusion of the 2022
AGM, female representation on the Board of Directors will stand at 29%.
However, we recognise that the current level of female Board
representation is below the FCA’s target and will continue to strive
to increase this through nurturing the female talent present within the
Helical team and ensuring that diversity and inclusion is included in the
development of succession plans.
In addition, with respect to the recruitment of future Board members,
the Nominations Committee will continue to regard Board diversity
of gender as a key consideration when recommending future Board
appointments and conducting succession planning exercises.
The Committee 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.
More widely, the Committee is committed to developing a long-term
pipeline of executive talent that reflects the diversity of our stakeholders.
At least one of the senior board positions (Chair, Chief Executive Officer,
Senior Independent Director or Chief Financial Officer) is a woman
(including those self-identifying as a woman)
We are pleased to confirm that Sue Clayton is due to assume the
role of Senior Independent Director on the Board with effect from
the 2022 AGM.
At least one member of the board is from a non-White ethnic minority
background (as referenced in categories recommended by the Office
for National Statistics)
Whilst none of the Helical Board members are considered to be from
an ethnic minority, the Committee recognises that boards generally
perform better when they include the best people from a range of
backgrounds and experiences.
When assessing the composition of the Board, the Nominations
Committee recommends appointments, and the Board makes
appointments based on skills, experience and merit. However, equality,
diversity and inclusion will continue to be key considerations in all
appointment processes.
The Nominations Committee will continue to seek diversity of mindset
as well as of gender, race, and background when considering new
appointments in the period to 2023, and it will continue to review this
policy on an annual basis to ensure it remains appropriate. More widely,
we are committed to developing a long-term pipeline of executive talent
that reflects the diversity of our stakeholders.
The Board is cognisant of the recommendations of the Parker Review
and subsequent updated report, and will continue to focus on and
improve the levels of diversity amongst its Directors in order to promote
the success of the Group, thereby generating value for Shareholders
and contributing to wider society.
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continued
III COMPOSITION, SUCCESSION AND EVALUATION
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 Group’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 Group’s Diversity and Inclusion
Policy which can be found on our website: https://www.helical.co.uk/
investors/governance/governance-policies/
Helical celebrated a number of equality, diversity and inclusion
related initiatives and campaigns throughout the year, including:
• International Women’s Day: The Group celebrated International
Women’s Day for the second consecutive year. Employees took
part in activities to recognise females across the Company and
the barriers and challenges preventing women progressing were
highlighted to staff through all-staff communications;
• International Day of Happiness: We chose to celebrate this on 20
March 2022 which represents a shift in global attitudes towards
wellbeing and the recognition of happiness as a human right;
• Wednesday Wellness Programme: The Group proactively
recognises the importance of the health and wellness of its
employees, with the aim of facilitating an inclusive environment
for all. The Group promoted this through a Wednesday Wellness
Programme run on the first Wednesday of each month. Topics
considered by the programme include stress management,
mental health and nutrition and “digital detoxing”;
• World Health Day: We drew our employees’ attention to a number
of campaigns promoting the importance of early detection of
health problems in either sex and the benefits of early
intervention such as Prostate Cancer UK, Testicular Cancer
Society, Know Your Lemons Foundation and Lady Garden
Foundation; and
• Mental Health Awareness Week: With the theme of “nature”
in 2021, we organised a picnic outside our offices in Hanover
Square, encouraging the team to eat their lunch outside. Staff
were also gifted vouchers for a local health food deli to purchase
their lunch. Green ribbons, the international symbol for mental
health awareness, were also distributed to all staff to raise
awareness for the cause.
The Board will be monitoring and reviewing the Group’s progress
with regards to its diversity and inclusion initiatives by assessing the
successful delivery of Group strategy over time against the objectives
set. Success will also be measured using the information gathered
through the Group’s employee engagement initiatives (please see Our
stakeholders – Section 172(1) Statement section on pages 84 to 85).
Helical’s Employment Policy supports its diversity and inclusion
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 Group’s
Employment Policy can also be found on our website: https://www.
helical.co.uk/investors/governance/governance-policies/
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 21% of the workforce
carried out their roles on a part-time basis. The Group also operates
various family-friendly policies, including policies for maternity,
adoption and shared parental leave, which provide financial assistance
to employees. The gender representation across the Group’s
workforce as at 31 March 2022 can be found on page 73.
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 100 to 103.
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.
At the 2021 AGM, the Shareholders were asked to approve the
extension of my tenure beyond that recommended by the UK
Corporate Governance Code (“UK Code”). The Directors sought to
extend my tenure as they deemed my skills and experience as vital
to ensuring stability and continuity as the business navigated its way
out of the Covid-19 pandemic. However, I will not be standing for
re-election at the 2022 AGM and it is intended that I will be succeeded
by Richard Cotton (please see below for more information).
III COMPOSITION, SUCCESSION AND EVALUATION
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 Group’s Diversity and Inclusion Policy informs succession
planning at all levels of the business (see https://www.helical.co.uk/
investors/governance/governance-policies/ for the full policy).
During the year, as part of the 2022 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 Group’s long-term
success, please see pages 90 to 92.
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 2021, the Committee asked the Executive
Committee to conduct a detailed review of the succession pipeline
considering the skills and strengths of all potential internal candidates,
and 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. The plan identified potential successors for the roles on the
Board in the short and long term and took gender and ethnic diversity
into account.
In March 2022, the Committee reconsidered the 2021 succession
plan and 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 Committee was satisfied that plans remain
sufficiently robust to enable vacancies to be filled on a short to
medium-term basis and, consequently, re-endorsed the plan devised
in 2021. Our employees’ passion, commitment and expertise are key
to delivering our strategy and fulfilling our Purpose. The Committee
supports the development of Helical’s internal talent and recognises
the importance of continuing to invest and develop our people in
order to help accelerate our growth and future success.
Given the size of the Group, whilst it is always the Committee’s aim
to nurture and promote existing talent when recruiting for senior
leadership and Board roles, the Group may also utilise the expertise
of external search consultants to ensure that the best possible range
of diverse candidates is considered.
Work of the specially convened Nominations
Committee led by Sue Farr
Chairman’s succession
As reported last year, from the conclusion of the 2021 AGM, my
tenure on the Board exceeded the nine years recommended by
the Code. However, the Committee determined that it was in the
Company’s best interests for me to continue as Chairman for an
additional term of one year in order to maintain continuity and stability
as the business navigated its way out of the Covid-19 pandemic. This
decision was supported by our Shareholders through my re-election
at the 2021 AGM.
A specially convened Nominations Committee (“sub-Committee”),
led by Sue Farr, instructed Sam Allen Associates (“Sam Allen”) to
support the recruitment of this role. Sam Allen, who do not have
any other connection with the Company or individual Directors, is
a signatory to the BEIS’s Voluntary Code of Conduct for Executive
Search Firms. The sub-Committee developed and agreed a job
specification for the role of Chairman which included key leadership
characteristics, experience in the real estate sector and in UK publicly
listed companies, as well as the extensive knowledge required to lead
the Board. A longlist of potential, diverse, external candidates was
prepared with the support of Sam Allen and was considered by
the sub-Committee in the first instance. The sub-Committee then
formulated a shortlist and considered each candidate in detail. In
compiling potential candidate lists, the sub-Committee had regard
to all the key objectives of the Board Diversity and Inclusion Policy
(available to view on our website https://www.helical.co.uk/investors/
governance/governance-policies/).
In accordance with the Board Diversity and Inclusion Policy, the
sub-Committee also felt it important to review and consider internal
candidates for the role. In assessing the internal talent pool, the
Committee found that Richard Cotton was a highly suitable candidate,
and when his skills and experience were compared with the candidates
on the shortlist, the results determined him as the most appropriate
candidate for the role overall. The search culminated in the Board
recommending to Shareholders that Richard Cotton be appointed as
my successor with effect from the close of business of the 2022 AGM.
Although Richard Cotton has served on the Board for six years
and is fully informed with respect to the functioning of the Board and
the Group’s operations, as outgoing Chairman, I am undertaking a
programme of induction with Richard Cotton in preparation for the
commencement of his appointment.
Senior Independent Director’s succession
It was also recognised that in becoming Chairman of the Board,
Richard Cotton would need to hand over his duties as SID and the
Committee was therefore required to consider a successor for the
role of SID. The Committee identified Sue Clayton, with her extensive
experience of the property sector, strong people management skills
and a passion for promoting positive culture and diversity, as an
appropriate successor for the role of SID. Taking these findings into
account, the Committee proposed that, subject to her re-election
at the 2022 AGM, Sue Clayton will succeed Richard Cotton as the
Group’s SID with effect from the conclusion of the AGM.
Consideration of a new non-executive director
As part of the Chairman’s succession exercise, the Committee also
considered the appointment of an additional non-executive director
to the Board. Based on the review of the Directors’ current skills and
expertise, it was concluded that there were no material skill gaps on
the Board or its Committees at present and that the Board,
comprised of its current seven members, could function effectively.
The Nominations Committee will continue to monitor the composition
of the Board and reconsider the appointment of a new non-executive
director as necessary.
In the event that the Committee identifies the need for an additional
director in the future, a formal, transparent and rigorous recruitment
process for this role will be conducted with the assistance of an
external search consultancy.
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continued
III COMPOSITION, SUCCESSION AND EVALUATION
III COMPOSITION, SUCCESSION AND EVALUATION
Results and key recommendations from the 2021 / 22
Board evaluation
Over the course of 2020 and 2021, the Board’s ability to operate
effectively was significantly challenged by the impact of the pandemic
and resulting lockdowns. Although Covid-19 continued to impact
many areas of life during the year, I am pleased to report that the
majority of our Board and Committee meetings were able to be
conducted in person and this has undoubtedly aided the Board’s
overall efficiency and effectiveness. The results of the evaluation
demonstrated that the Board has been able to achieve its key
objectives during the year and made every effort to minimise
unavoidable disruptions caused by any restrictions and Government
guidelines in place throughout the period.
The findings of the evaluation confirmed that the Helical Board was
well balanced, with the Directors possessing relevant skills and diverse
experience to enable effective leadership of the Group. In conjunction
with the evaluation, the Directors reviewed and updated the Board
Skills Matrix and this exercise confirmed the collective, comprehensive
skill set of the Board. 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, collegiate, team
dynamic on the Board, and recognised the high level of contribution
and appropriate level of challenge provided at meetings from all
members. The Non-Executives commented that they received
comprehensive papers from the Group’s management in a timely
manner, allowing their full consideration before meetings. The
evaluation also confirmed that each Board member had a defined
role and that they integrated effectively with the functions and
responsibilities of the Board.
With respect to my extended tenure as Chairman, in order to mitigate
any risks to the efficacy and dynamics of the Board, my effectiveness
was continually assessed during the year. This continuous assessment
was led by our current SID, who engaged regularly with each Board
member to confirm the continued effectiveness of the Board under
my leadership. With respect to the evaluation of my performance as
Chairman during the period, there were no issues or concerns raised.
The recommendations arising from this year’s evaluation process
are noted in the table below.
Recommendations from the 2021 /22 Board evaluation
• Committee to continue to place focus on succession planning for
both independent Non-Executive Directors and Executive Directors.
• Further and greater focus on the key shareholder return metrics
of the business when appraising all major business decisions.
• Review recruitment processes to ensure that there are no barriers
to increasing diversity at all levels of the business.
The Committee 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 Grant
Chairman
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 previous year’s review.
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 SID, Richard Cotton.
The process
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 2020/21 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 2022. In formulating the conclusions, I compared
the key themes identified in the internal 2022 Board evaluation to the
results from the 2021 Board evaluation.
Similarly, Richard Cotton conducted my performance evaluation
via individual interviews with each Director.
Recommendations from the 2020/21 Board evaluation
Progress
• 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.
• Over the year, the extent to which the Board has sought external
views and expertise to assist in the development of business
strategy has increased. The overall business strategy is subject
to detailed annual review, initially undertaken by the Executive
Management team. Their preliminary strategic plan is then
presented to the Board for detailed consideration and discussion.
At the annual strategy meeting (see page 94 for more details),
presentations were received from external experts covering both
the property market and the London Stock Exchange in which
Helical’s performance is measured and evaluated. Furthermore,
at every Board meeting an update on the property market is
discussed using a number of external sources to inform and
supplement the Group’s own view of the current environment
and likely future developments.
• The Board has increased its focus on Shareholder returns with
respect to both strategic discussions and the KPIs on which the
business is focusing, with the Director remuneration targets having
been adjusted to reflect this greater focus on maximising
Shareholder returns. The decision to convert to a REIT, a decision
which has only been taken after careful examination and
confidence that it aligns with the future strategy and growing
emphasis on retaining investment assets for longer periods (see
page 76 for further details), should enhance Shareholder returns
in the long term.
• Diversity and inclusion continue to remain high on the agenda
of the Board. For details of progress made over the course of
the year, please see pages 100 to 102 for more details.
• Executive Management have increased communications with
the Non-Executive Directors throughout the course of the year
via email and instant messaging. The frequent, less formal, updates
are highly valued by the Non-Executive Directors and enable more
effective, informed discussion at the formal Board meetings.
Members of the workforce, including those in senior management,
are also invited to attend lunch with the Board each quarter as a
result of a newly implemented workforce engagement initiative.
Through these additional interactions, the Non-Executive
Directors are given further opportunities to learn more about the
business operations. The Non-Executive Directors also receive
copies of the minutes taken at the bi-monthly Management
meeting to keep them informed regarding operational
developments. The increased level of communications with
the Non-Executives will continue going forward.
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continued
IV AUDIT, RISK AND
INTERNAL CONTROL
Audit and Risk Committee
Committee membership and attendance Attended Absent
Joe Lister* (Chair)
Sue Clayton
Richard Cotton
Sue Farr
Independent
Yes
Yes
Yes
Yes
Committee meeting
attendance
* Has recent and relevant financial expertise.
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:
https://www.helical.co.uk/investors/governance/governance-
policies/
Key areas of focus during 2021⁄22
• Review of the effectiveness 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.
• Approval of the Group’s Risk Register.
• Review of the Group’s internal controls and risk management
systems and instruction of an in-depth review into the Group’s
anti-financial crime and cyber security risk frameworks and
control mechanisms.
• Assessment of the independence and effectiveness of the
external Auditor.
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 2022.
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 2021, 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.
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 Group, 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 Group’s system of internal controls and risk management;
• ESG reporting and related climate and financial disclosures.
• the need for an internal audit function;
• UK regulatory developments and impact on the Committee
• the external audit process and managing the Group’s relationship
including Audit Reform.
with the external Auditor; and
• Consideration of the need for an internal auditor.
• the processes for compliance with laws, regulations and ethical
Joe Lister
Chair of the Audit and Risk
Committee
codes of practice.
The effectiveness of the Audit and Risk Committee was reviewed as
part of the internal Board evaluation. Please see pages 104 to 105 for
details of the review and the key recommendations arising from it.
The work of the Committee during the year
The Committee met four times during the year and a record of
Director attendance for these meetings is shown on the left. 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 Group’s
external Auditor, Deloitte, are also invited to attend all or part of
meetings as appropriate and the Committee met twice with Deloitte
without members of management being present.
IV AUDIT, RISK AND INTERNAL CONTROL
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;
Encompassed within the Risk Management Framework is the Board’s
responsibility to maintain and monitor the Group’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:
• 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 Group’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 Group is undertaken;
• Review of the Group’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 Group’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
• 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 Group’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 46 to 48.
Significant areas of review
In discharging its responsibilities in connection with the preparation of
the financial statements for the year to 31 March 2022, the Committee
was responsible for reviewing the appropriateness of the Group’s
accounting policies, assumptions, judgements and estimates as
applied by the Executive Management team 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.
• Consideration of the requirement for an internal audit function.
• Financial crime & cyber security risks and controls
Risk management and internal controls
The Committee and the Board re-affirmed the Group’s Risk
Management Framework and this approval is representative of the
great emphasis placed on the management and mitigation of risks in
order to enable the development and delivery of the Group’s business
objectives. The Committee continued to conduct regular reviews of
the Group’s approach to risk management, the operation of its Risk
Management Framework and risk mitigation. This included
consideration of how the risk management process was embedded
throughout the Group and the Committee assuring itself that
management’s accountability for risks was clear and functioning.
in-depth review
As part of its ongoing monitoring of the Group’s internal control
environment, this year the Committee commissioned Grant
Thornton LLP to undertake an in-depth review of the Group’s anti-
financial crime and cyber security risk frameworks and controls.
The comprehensive review comprised the delivery of a financial
crime training session to staff, as well as a focused workshop on
business specific financial crime risks. Grant Thornton also
considered the Group’s Risk Register and risk graph as part of the
review and produced a report summarising their observations and
recommendations. Whilst the review confirmed that the Group has
a robust anti-financial crime and cyber security control environment,
it suggested a small number of enhancements that could be made
to further strengthen the Group’s framework in this area. The
Committee has considered all the recommendations of the review
and reported them to the Board accordingly. The Committee is
dedicated to ensuring that Helical has the appropriate internal
controls in place to mitigate financial crime and cyber security risks
as far as possible. Therefore, the Committee has instructed the
implementation of all the recommended enhancements to its control
environment arising from the review, and will monitor the progress of
their implementation over the course of the year to 31 March 2023.
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IV AUDIT, RISK AND INTERNAL CONTROL
IV AUDIT, RISK AND INTERNAL CONTROL
• 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 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.
Financial Reporting Council’s review
During the year, the Group received a letter from the Financial
Reporting Council (“FRC”) concerning its review of the Group’s
Annual Report and Accounts for the year ended 31 March 2021.
The FRC highlighted the requirement to present amounts owed from
subsidiary undertakings as current only where they are expected
to be received within 12 months or within the Company’s normal
operating cycle. In response we undertook a review of the relevant
items in the Company Balance Sheet and have concluded that the
amounts owed from subsidiary undertakings should be presented
as non-current assets and the prior year Company Balance Sheet
restated accordingly. The restatement has not impacted the net
assets of the Company or its profit for the year. The change in
presentation has no impact on the results of the Group.
Fair, balanced and understandable –
review of the 2022 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
and provides the necessary information for Shareholders to assess
the Group’s position and performance, business model and strategy.
In determining its position, the Committee also considered the
Group’s compliance with relevant regulatory frameworks 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 (SampsonMay) 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 Group’s strategy and how they are linked
to Directors’ remuneration?
• Are comments on movements in key performance indicators over
time, both favourable and adverse, balanced and well-explained?
The review conducted by the FRC was based solely on the Group’s
published 2021 Annual Report and Accounts and does not provide
any assurance that the Annual Report and Accounts are correct
in all material respects.
• Are key performance risks explained?
Strategy
• Is the Group’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 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 Group’s performance, business model and
strategy. This was reported to the Board at its meeting in May 2022.
Updates included in the 2022 Annual Report:
• Reporting on the implementation of Helical’s Net Zero Carbon
During the year, the following non-audit services were undertaken
by Deloitte:
• review of the Half Year Results (£63,000); and
• review of the agreed upon procedures in respect of the
Performance Share Plan and Directors’ Bonus Scheme (£9,800).
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 for the year, was 17%,
14% of which was for the review of the Half Year Results.
Annual General Meeting
At the Annual General Meeting to be held on 14 July 2022, 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
Pathway (see pages 60 to 61).
• Our reporting on climate-related financial disclosures is now fully
aligned with the recommendations of the Task Force on Climate-
related Financial Disclosures (“TCFD”) (see pages 64 to 71).
• An updated articulation of our business model, which depicts the
relationship between our Purpose, Culture, Values and strategy and
explains how these elements inform our operations, and ultimately
create value for our stakeholders (see pages 20 to 21).
Effectiveness of the external Auditor
Deloitte have been the Group’s Auditor for four years, having been
appointed to conduct their first audit of Helical 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 2021) 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 Group’s Auditor will be proposed at the 2022 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 Group’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.
108
109
GovernanceHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Corporate governance report
continued
V REMUNERATION
Directors’ remuneration report
Committee membership and attendance Attended Absent
Sue Farr (Chair)
Sue Clayton
Richard Cotton
Joe Lister
Committee meeting
attendance
Independent
Yes
Yes
Yes
Yes
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/governance/governance-policies/.
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 and having
regard to statutory and regulatory requirements. The
Remuneration Policy seeks to align incentives and rewards to the
Group’s strategy of maximising Shareholder returns by delivering
income growth from creative asset management and capital
gains from its development activity.
In discharging its duties, the Committee focuses on:
• Remuneration policies, including basic pay, annual and
long-term incentives.
• Remuneration practice and its cost to the Company.
• Recruitment, service contracts and severance policies.
• Compliance with the UK Corporate Governance Code.
• The engagement and independence of external remuneration
advisors.
The Committee seeks approval from Shareholders on its
Remuneration Policy at least every three years and annually sets
incentive targets for the forthcoming one-year and three-year
performance periods, reporting to Shareholders at the end of these
periods in the relevant Directors’ Remuneration Report. The targets are
aligned to the Group’s key performance indicators and are measured
against a combination of absolute and relative financial performance
measures. These measures are widely used in the real estate sector
and are as follows:
Absolute Performance Measures
• Total Accounting Return
Relative Performance Measures
• Total Shareholder Return,
measured against FTSE Mid-
Cap and Small-Cap companies
in the real estate sector.
• Increase in Net Asset Value
• Total Property Return as
measured by MSCI
In addition, the Committee sets Strategic and ESG targets to align
remuneration with the Group’s broader non-financial key
performance indicators.
The Committee is also responsible for determining the remuneration
of the Chairman and has oversight of the remuneration of all other
employees.
In discharging its duties, the Committee is advised by FIT
Remuneration Consultants LLP.
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 guidance from the
main shareholder representative bodies, 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.
Sue Farr
Chair of the Remuneration
Committee
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 2022.
Implementation of the Remuneration Policy
Sets out the proposed implementation of the
Remuneration Policy for the year to 31 March 2023.
Pages
111
112–113
114–115
Remuneration Policy Report
Sets out the Remuneration Policy for Executive and
Non-Executive Directors.
116–122
Annual Report on Remuneration
Discloses how the Remuneration Policy was
implemented in the year to 31 March 2022 and how
the Policy will be operated in the year to 31 March 2023.
122–131
110
V REMUNERATION
Annual Statement
Dear Shareholder,
I am pleased to present the Remuneration Committee’s Directors’
Remuneration Report (“Report”) for the year to 31 March 2022.
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 112 and 113 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 2022. The Implementation of the
Remuneration Policy section on pages 114 and 115 is designed
to provide details of their potential remuneration for the year to
31 March 2023.
The Annual Report on Remuneration, on pages 122 to 131, 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 2022 has been calculated under the Policy and the
performance measures set for the Annual Bonus Scheme and
Performance Share Plan.
Finally, under Other remuneration matters, on pages 127 to 131,
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 16 to 19).
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 the year to 31 March 2022, the Group generated a profit after tax
of £88.9m (2021: £17.9m), a Total Accounting Return of 15.0% (2021:
3.3%), with an increase in EPRA NTA of 7.3% (2021: 1.7%). The Total
Property Return, as measured by MSCI, generated a return of 10.7%
(2021: 7.0%). The TSR for the year, based on the three-month average
share price to each year end, generated a return of 9.8% (2021:
-9.6%). In light of the good results, the Board is recommending a final
dividend of 8.25p (2021: 7.4p) taking the total dividend for the year
to 11.15p (2021: 10.10p), an increase of 10.4%.
We have progressed well against the targets we set in our
sustainability strategy “Built for the Future” and in May 2022
committed to become net zero carbon by 2030. With the support
of our guide “Designing for Net Zero”, we plan to drive down carbon
across our portfolio and new developments, aiming to reduce it
by 46% by 2030.
The Group made significant progress in meeting its ESG Key
Performance Indicators, increasing its GRESB rating from 3* to
4* and its EPRA Sustainability rating from Silver to Gold, whilst
maintaining its MSCI ESG rating at AAA. In addition, we have
improved our reporting to fully meet the recommendations of the
Task Force on Climate-related Financial Disclosures (“TCFD”).
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 2022 for Gerald Kaye, Tim Murphy and Matthew Bonning-
Snook. 40% of the maximum bonus payable was determined by the
Total Accounting Return of the Group with 35% dependent upon the
relative Total Property Return of the Group, as calculated by MSCI,
compared to the MSCI Central London Capital Growth Index. The
remaining 25% was payable based on strategic and ESG objectives.
In accordance with these performance criteria, annual bonuses of
97% of the maximum (equivalent to 146% of salary) have been
awarded as follows:
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
£806,000
£469,000
£627,000
As all three Executive Directors satisfy the minimum shareholding
guideline of 500% of salary, bonuses equivalent to 100% of their
base salaries will be paid in cash, with the balance of 46% of salary
to be awarded in deferred shares. 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 2019 under the terms of the 2014
Performance Share Plan were subject to three performance
conditions over the three years to 31 March 2022. 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, 75% of the
maximum of the 2019 awards are expected to vest in June 2022.
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 2022, 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.
2022 Annual General Meeting resolutions
The following resolutions relating to remuneration will be presented
at the 2022 AGM:
• An advisory resolution in respect of the Annual Report on
Remuneration for the year to 31 March 2022; and
• The renewal of the Helical Bar 2002 Share Incentive Plan for
a further ten years to 24 July 2032.
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 (Chief
Operating Officer and Group Company Secretary) at jm@helical.co.uk.
Sue Farr
Chair of the Remuneration Committee
24 May 2022
111
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Corporate governance report
continued
V REMUNERATION
Remuneration at-a-glance
FINANCIAL KPIs
EPRA Net Tangible Asset
(NTA) value per share
Total Shareholder
Return
572p
2021: 533p
9.8%2021: -9.6%
IFRS Total
Accounting Return
EPRA Total
Accounting Return
ESG KPIs
GRESB
4*2021: 3*
MSCI ESG
15.0%2021: 3.3%
10.2%2021: 4.5%
AAA2021: AAA
EPRA Sustainability BPR
Gold
2021: Silver
CDP
C2021: B
Total Property Return
– MSCI (1 year)
Total Property Return
– MSCI (3 year)
10.7%2021: 7.0%
9.1%2021: 8.9%
SUMMARY OF HISTORIC KPI PERFORMANCE
Financial
IFRS profit after tax
IFRS TAR
EPRA TAR
EPRA NTA per share
MSCI – 1 year
MSCI – 3 year
TSR – 3 month average to 31 March
TSR – Spot price at 31 March
ESG
GRESB
EPRA Sustainability BPR
MSCI ESG
CDP
2018
2019
2020
2021
2022
£26.3m
£42.6m
£38.7m
£17.9m
£88.9m
5.3%
1.0%
-1.1%
10.8%
13.8%
13.7%
6.1%
8.4%
8.0%
5.6%
10.1%
10.1%
2.7%
5.2%
7.7%
9.3%
6.1%
9.6%
10.2%
34.8%
8.7%
n/a
n/a
2*
Bronze
Bronze
Bronze
AA
C
AA
C
AA
C
3.3%
4.5%
1.7%
7.0%
8.9%
-9.6%
21.2%
3*
Silver
AAA
B
15.0%
10.2%
7.3%
10.7%
9.1%
9.8%
1.7%
4*
Gold
AAA
C
EARNINGS FOR THE FINANCIAL YEAR TO 31 MARCH 2022
Total remuneration for Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Salary2
£000
Benefits3
£000
Pension4
£000
553
322
430
46
15
46
–
–
–
Total
Fixed
£000
599
337
476
Annual
bonus
£000
806
469
627
Share
awards5
£000
1,202
670
935
Share
Incentive
Plan6
£000
7
7
7
Total
Variable
£000
2,015
1,146
1,569
Total
2022
£000
2,614
1,483
2,045
Total
2021
£000
2,234
1,272
1,750
1 Full details of the Directors’ remuneration for the year can be found in the table on page 124.
2 Basic salaries were increased by 1.5% from 1 April 2021.
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 equivalent shares awarded to Directors on 9 August 2021 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
ANNUAL BONUS PLAN – TARGETS AND OUTCOMES
Performance measure
TAR
TPR
Strategic and ESG
Total
40%
35%
25%
100%
Payout target
20%
2.5%
4.7%
100%
10.0%
7.9%
Actual
12.7%
10.7%
%
awarded
40%
35%
22%
97%
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
806
469
627
97
97
97
2019 PSP AWARD VESTING IN 2022 – TARGETS AND OUTCOMES
Performance measure
NAV
TPR
TSR
Total
Payout target
10%
6.3%*
3.2%
-18.5%
100%
Actual
13.6%*
5.3%
10.2%
7.6%
9.1%
33.8%
%
awarded
8.80%
33.33%
33.33%
75.46%
33%
33%
33%
100%
* The minimum and maximum vesting thresholds have been increased from their normal levels
of 5.0% and 12.5% due to the impact of inflation above 3.0% during the performance period.
The estimated number of shares vesting
are as follows:
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Estimated value
at vesting1
£’000
1,151
670
895
Number
276,859
161,119
215,346
1 The share price used to calculate the expected value at vesting was 415.77p, based on the
average share price over the three months to 31 March 2022.
The level of PSP vesting in 2022 (75.46% 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.
SHAREHOLDING OF THE EXECUTIVE DIRECTORS
Shareholding requirement
0%
250%
500%
750%
1,000%
1,250%
1,500%
1,750%
Gerald Kaye
Chief Executive
Shares
Beneficially owned
Unvested1
219%
Tim Murphy
Chief Financial Officer
Shares
Beneficially owned
Unvested1
221%
Matthew Bonning-Snook
Property Director
Shares
Beneficially owned
Unvested1
215%
500%
500%
500%
1,745%
920%
1,428%
1. The value of unvested shares is calculated on the shares expected to vest, net of tax liabilities, of the 2019 PSP award, unvested Deferred Shares and the Restricted Share Incentive Plan Shares at
the average share price for the three months to 31 March 2022 of 415.77p.
112
Helical plc — Annual Report and Accounts 2022
113
GovernanceHelical plc — Annual Report and Accounts 2022
Corporate governance report
continued
V REMUNERATION
V REMUNERATION
Implementation of the Remuneration Policy
The Remuneration Policy will be implemented for the year to 31 March 2023 as follows:
Remuneration Policy
Basic annual salaries
Implementation for 2022/23
Change from 2021/22 Implementation
Long-term incentive awards
Annual award 2022 – Vesting in 2025
Annual awards, under the terms of the Group’s Performance Share Plan (“PSP”),
will be granted in June 2022 over shares equal to 250% of salary at 31 March 2022.
Set on appointment to the Board and reviewed annually on 1 April or on change
in role or responsibility.
The basic salaries of the Executive
Directors from 1 April 2022 are:
Gerald Kaye £569,500
Tim Murphy £331,450
Matthew Bonning-Snook £443,000
Annual inflationary increase awarded
of 3.0% from 1 April 2022. The average
increase for all other employees was
4.1%.
Benefits-in-kind
To provide insured health protection, cars and fuel allowances
Each Executive Director is provided with
a car or car allowance, car fuel, private
medical insurance, life assurance and
permanent health insurance.
No change
Pension
The Group does not provide for the retirement of Executive Directors
No retirement provision
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.
150% of salary subject to the following
performance measures and weightings:
30%: TPR against the MSCI Central
London Capital Growth Index
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.
Base – Index (20% payable)
Stretch – Index plus 4.50%
40%: TAR
Base – 5.0% (20% payable)
Stretch – 10.0%
The weighting of the total potential
bonus award allocated to the TPR
performance measure has reduced
from 35% to 30%, with a corresponding
5% increase in the weighting allocated
to the Strategic and ESG performance
measure. In addition, the stretch target
for the TPR performance measure has
increased from Index plus 3.25% to
Index plus 4.50%.
30%: Strategic and ESG targets (these
will be reported on retrospectively in the
Directors’ Remuneration Report for the
year to 31 March 2023).
As per Policy
No change
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.
The performance conditions are:
37.5%: Net asset value growth
The weightings to the three performance
conditions have changed from 33%
for each.
37.5%: Relative TSR against the FTSE
Mid Cap and Small Cap companies,
excluding agencies.
25.0%: Relative TPR against the MSCI
Central London Total Return Index
The threshold and maximum targets
are noted in the table on page 120.
As per Policy
No change
As per Policy
No change
Malus and clawback
Malus and clawback provisions will continue to operate
(albeit updated and enhanced)
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.
No change
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 to the Chairman and the base fee
payable to the other NEDs, were increased by 8.33% from 1 April 2022. The
fees were last increased on 1 April 2019. An additional £10,000 pa (unchanged)
is payable to the Chairs of each Committee.
Triennial inflationary increase awarded
of 8.33% from 1 April 2022.
Richard Cotton (Chairman) £162,500*
Sue Clayton (SID and Property
Valuations) £72,000*
Sue Farr (Remuneration) £62,000
Joe Lister (Audit and Risk) £62,000
* With effect from 2022 AGM.
114
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continued
V REMUNERATION
V REMUNERATION
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
This Policy report sets out the 2021 Remuneration Policy which 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.
Directors’ Remuneration Policy table
The table below summarises the Directors’ Remuneration Policy.
Element
Salary
Purpose and link to strategy
Operation
Maximum
Performance targets
• Reflects the value of the individual
and their role and responsibilities
• Normally reviewed annually,
• No minimum or maximum salary
• N/A
effective 1 April
increase is operated
• Reflects delivery against key
• Paid in cash on a monthly basis
personal objectives and
development
• Provides an appropriate level
of basic fixed income, avoiding
excessive risk arising from over
reliance on variable income
• Not pensionable
• Takes periodic account against
companies with similar
characteristics and sector
comparators
• Reviewed in context of the salary
increases across the Group
• 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
Annual bonus
• Provides focus on delivering
• Payable in cash (two thirds) and
• 150% of salary pa for all
• Performance normally measured
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
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
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
Element
Purpose and link to strategy
Operation
Maximum
Performance targets
• Aligned to main strategic
• Discretionary annual grant of
• 250% of salary pa for all
• Performance normally measured
Executive Directors
over three years
Long-term
incentive
awards
objective of delivering long-term
value creation
conditional share awards under
the 2014 PSP Scheme
• Aligns Executive Directors’
• Executive Directors are required
interests with those of
Shareholders
• Rewards and helps retain key
Executives and is aligned with
the Group’s risk profile
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
• 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)
• Malus and clawback provisions
apply
• N/A
Pensions
• There is no Group pension
• N/A
• N/A
scheme for Directors and no
contributions are payable to
Directors’ own pension schemes
Other
benefits
• Provide insured benefits to
• Benefits provided through third
• N/A
• N/A
support the individual and their
family during periods of ill health,
accidents or death
• Cars or car allowances and fuel
allowances to facilitate effective
travel
Share
ownership
guidelines
• To provide alignment of interests
between Executive Directors and
Shareholders
party providers
• Insured benefits include: private
medical cover, life assurance and
permanent health insurance
• Other benefits may be provided
where appropriate
• Executive Directors are required
to build and maintain a specified
shareholding through the retention
of the post-tax shares received on
the vesting of awards
• 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
• No minimum or maximum fee
• N/A
• Fees are reviewed on a regular
increase is operated
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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Finally, the Committee has considered a number of matters as set out
in Paragraph 41 of the 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 five 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 84 and 85. Through
these methods, the Company engages with its workforce on
remuneration matters where appropriate.
Corporate governance report
continued
V REMUNERATION
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 operate to ensure that Directors who leave the Group are
not able to immediately liquidate their shareholdings. The Group’s
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 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.
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.
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, the following post cessation shareholding guidelines will apply
to leavers:
• 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.
V REMUNERATION
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 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.
Share
Incentive Plan
Shareholding
guideline
Buy-out
awards
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.
Non-
Executive
Directors
Newly appointed Non-Executive Directors will be paid fees
at a level consistent with existing Non-Executive Directors.
Fees would be paid pro-rata in the year of appointment.
How employee pay is taken into account and 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.
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Corporate governance report
continued
V REMUNERATION
V REMUNERATION
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, as amended
during the 2021 review of the Remuneration Policy and to be
implemented for the year to 31 March 2023, are as follows:
• 40% of the maximum annual bonus will be payable if the Total
Accounting Return (“TAR”) of the Group (growth in EPRA NTA plus
dividends), calculated annually, is or exceeds 10%, with 20% of this
part of the award paid out if the TAR lower threshold target is set at
5% and 10% of this part of the award paid out if the TAR lower
threshold is set between 2.5% and 5%;
• 30% 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 4.50%, with 20% of this part
of the award paid out if the performance matches the performance
of the Index;
• 30% 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.
Performance Share Plan 2014
Performance conditions for awards granted under the terms of the Performance Share Plan 2014 will be weighted and measured over three
years as follows:
NET ASSET VALUE GROWTH
RELATIVE TSR
TPR VERSUS MSCI INDEX
Annual compound increase
% of award vesting Ranking after three years
% of award vesting
Ranking after three years
% of award vesting
10% pa or more
5% pa to 10% pa
5% pa
Below 5% pa
37.50 Upper quartile or above
37.50 Upper quartile or above
Pro-rata from 3.75
and 37.50
Median to upper quartile
Pro-rata from 3.75
and 37.50
Median to upper quartile
3.75 Median
nil Less than median
3.75 Median
nil Less than median
25.0
Pro-rata from 2.5
and 25.0
2.5
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).
2 Relative TSR – the comparator group for awards granted will be those companies included in the FTSE 350 and Small Cap Indices, excluding agencies.
3 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.
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.
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 first employment
Board appointment
Date of current contract
6 months
6 months
6 months
6 March 1994
1 March 1994
13 March 1995
28 September 1994
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 2022;
• 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 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 the
Performance Share Plan 2014.
VALUE OF REMUNERATION PACKAGES AT DIFFERENT LEVELS OF PERFORMANCE
£’000
1,760
41%
24%
35%
615
100%
30%
21%
Minimum
On target
Maximum
3,609
20%
2,898
49%
39%
24%
17%
Maximum
with share
price
growth
1,015
42%
24%
34%
346
100%
1,679
50%
30%
20%
Minimum
On target
Maximum
2,093
20%
40%
24%
16%
Maximum
with share
price
growth
1,382
41%
24%
35%
489
100%
29%
22%
Minimum
On target
Maximum
2,823
20%
2,269
49%
39%
24%
17%
Maximum
with share
price
growth
GERALD KAYE
TIM MURPHY
MATTHEW BONNING-SNOOK
Basic salary & benefits
Bonus
Share awards
Maximum with 50% share price growth
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 Cotton – Board Chairman and Chair of the Nominations Committee*
Sue Clayton – Senior Independent Director and Chair of the Property Valuations Committee*
Sue Farr – Chair of the Remuneration Committee
Joe Lister – Chair of the Audit and Risk Committee
* With effect from 2022 AGM.
Board appointment
Commencement date of
current term
1 March 2016
1 March 2016
1 February 2016
1 February 2016
5 June 2019
5 June 2019
1 September 2018
1 September 2018
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continued
V REMUNERATION
V REMUNERATION
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 was as follows:
Capital & Counties Properties plc;
Capital & Regional plc;
Derwent London plc;
Great Portland Estates plc;
Hammerson plc;
1 McKay Securities were acquired by Workspace Group plc on 6 May 2022.
LondonMetric Property plc;
McKay Securities plc;
NewRiver REIT plc;
Shaftesbury 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 2022
and how the Policy is intended to be implemented in the year to 31 March 2023.
Application of the Remuneration Policy in the year to 31 March 2022
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.
• The review of the fees paid to the Non-Executive Chairman.
Performance related pay
• The approval of annual bonuses for the year ended 31 March 2021;
• The review of bonus targets for the year ended 31 March 2022;
• The setting of targets for the PSP awards which were granted in June 2021; and
• The approval of the vesting of PSP awards in June 2021 which were originally granted in June 2018.
Other matters
• The Committee concluded its review of the Group’s Remuneration Policy (“Policy”) and sought approval of the new Policy at the 2021 AGM; and
• The Committee updated its terms of reference for the latest developments in good practice.
Total remuneration in the year to 31 March 2022
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 2022, 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 equivalent shares
Share awards
Actual
£000
1,412
1,902
91
2,737
6,142
Share of total
%
Maximum
£000
Share of total
%
23
31
1
45
100
1,412
1,957
91
3,621
7,081
20
28
1
51
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 2022 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 2022 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) share awards.
We have shown the actual and maximum scenarios with the impact of the actual share price appreciation over the three years to 31 March 2022
(three-month average).
VALUE OF REMUNERATION PACKAGES AT DIFFERENT LEVELS OF PERFORMANCE
£’000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2,960
7%
45%
2,614
5%
41%
599
100%
31%
28%
23%
20%
337
100%
1,483
6%
40%
32%
22%
Minimum
Actual
Maximum
with actual
share price
growth
Minimum
Actual
2,315
6%
45%
2,045
5%
41%
476
100%
31%
28%
23%
21%
Minimum
Actual
Maximum
with actual
share price
growth
1,715
7%
45%
28%
20%
Maximum
with actual
share price
growth
GERALD KAYE
TIM MURPHY
MATTHEW BONNING-SNOOK
Basic salary & benefits
Bonus
Share awards
Share price growth
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GovernanceHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Corporate governance report
continued
V REMUNERATION
V REMUNERATION
Directors’ remuneration
Total remuneration in respect of the Directors in the year to 31 March 2022 was as follows:
Fixed
Variable
Year to 31 March 2022
Executive Directors
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Non-Executive Directors
Richard Grant
Sue Clayton
Richard Cotton
Sue Farr
Joe Lister
Total
Basic
salary/fees
£000
Benefits 1
£000
Sub-total
£000
553
322
430
1,305
150
58
70
58
58
394
1,699
46
15
46
107
–
–
–
–
–
–
107
599
337
476
150
58
70
58
58
394
1,806
Annual
cash
bonus
£000
553
322
430
–
–
–
–
–
–
Deferred
bonus
shares
£000
253
147
197
597
–
–
–
–
–
–
Share 3,4
awards
£000
1,202
670
935
2,807
–
–
–
–
–
–
Share
Incentive
Plan 2
£000
7
7
7
21
–
–
–
–
–
–
Sub-total
£000
2,015
1,146
1,569
4,730
–
–
–
–
–
–
1,305
597
2,807
21
4,730
Total
£000
2,614
1,483
2,045
6,142
150
58
70
58
58
394
6,536
1,412
1,305
1 Benefits include the provision of a car, fuel allowance, private medical cover, life assurance and permanent health insurance. Significant individual benefits include £23,000 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 Share Incentive Plan, details of which are on pages 128 to 129.
3 Value of PSP awards based on average share price over three months to 31 March 2022 of 415.77p. Dividend equivalent shares awarded to Directors on 9 August 2021 under the terms of the Annual
Bonus Scheme 2018 are included at their vesting price of 456.50p.
4 The PSP award values include share price appreciation totalling £152,000 for Gerald Kaye, £88,000 for Tim Murphy and £118,000 for Matthew Bonning-Snook.
Total remuneration in respect of the Directors in the year to 31 March 2021 was as follows:
Fixed
Variable
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
Total
Basic salary/
fees
£000
Benefits 1
£000
Sub-total
£000
Annual
cash
bonus
£000
493
287
383
590
328
468
1,386
1,163
150
58
70
55
58
391
1,777
–
–
–
–
–
–
1,163
Deferred
bonus shares
£000
Share 3,4
awards
£000
Share
Incentive
Plan 2
£000
Sub-total
£000
Total
£000
–
–
–
–
–
–
–
–
–
–
-
1,144
650
892
2,686
–
–
–
–
–
–
7
7
7
21
–
–
–
–
–
–
1,644
944
1,282
3,870
–
–
–
–
–
–
2,686
21
3,870
2,234
1,272
1,750
5,256
150
58
70
55
58
391
5,647
545
317
424
1,286
150
58
70
55
58
391
1,677
45
11
44
100
–
–
–
–
–
–
100
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
TPR
TAR
Performance condition
Total Property Return v MSCI Central London Offices Capital Growth 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 2.50% 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. ESG
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 4* (versus 3* awarded in 2021) – EPRA Sustainability BPR Target
Gold (versus Silver awarded in 2021) – Full alignment with TCFD
3. Overheads
Base target, fixed costs no greater than budgeted amount of £9,726,555.
Stretch target, fixed costs no greater than last year’s actual of £9,275,585.
Total
Weighting
35.00%
Threshold
target
Stretch
target
Outcome
% of bonus
payable
4.7%
7.9%
10.7%
35.00%
40.00%
2.50%
10.00%
12.7%
40.00%
10.00%
Achieved
10.00%
10.00%
Achieved
10.00%
5.00%
100.00%
Partially
achieved
2.14%
97.14%
Total Property Return
The annual performance of the Group’s property portfolio is measured by MSCI, an independent company that produces industry benchmarks
of portfolio returns. For the annual bonus, MSCI measures the performance of Helical’s property portfolio and we compare the results to an
MSCI benchmark, the Central London Offices Capital Growth Index, for the financial year. In the year to 31 March 2022, the portfolio produced
a return of 10.7%, as measured by MSCI. The return exceeded both the threshold and stretch targets of 4.7% and 7.9% and, accordingly, the
maximum amount of bonus payable under this performance condition is awarded.
Total Accounting Return
The Total Accounting Return of the Group for the year to 31 March 2022, adjusted for performance related awards, and neutralised for
Helical’s conversion to a REIT from 1 April 2022, was 12.7%, exceeding both the threshold and stretch targets of 2.5% and 10.0% respectively.
Accordingly, the maximum amount of bonus payable under this performance condition is awarded.
Strategic and ESG
In the year to 31 March 2022, the Group acquired 100 New Bridge Street, EC4, satisfying the first strategic performance condition. The Group
improved its ESG scores measured by GRESB and EPRA and achieved full alignment with the Task Force on Climate-related Financial
Disclosures, satisfying the ESG performance condition. The third performance condition sought to contain fixed overheads to a level between
that incurred in the last financial year and the budgeted amount for the year to 31 March 2022. The Group was partially successful containing
fixed overheads to £9,598,418.
The total annual bonus for the year ended 31 March 2022 is set out below:
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 Share Incentive Plan, details of which are on pages 128 to 129.
3 PSP awards are included at their actual vesting values in June 2021 of 430.50p. The table included in the 2021 Financial Statements included share awards at the average share price over the 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 2018 are included at their actual vesting price of 320.00p.
4 The PSP award values include share price appreciation totalling £141,000 for Gerald Kaye, £82,000 for Tim Murphy and £110,000 for Matthew Bonning-Snook.
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Maximum
bonus
payable
(150% basic
salary)
£000
829
483
645
Basic
salary
£000
553
322
430
Bonus
outcome
%
97%
97%
97%
Bonus
payable
£000
806
469
627
Cash
£000
553
322
430
Deferred
shares
£000
253
147
197
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.
124
125
GovernanceHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Corporate governance report
continued
V REMUNERATION
V REMUNERATION
PSP awards vesting in 2022
The PSP award granted on 3 June 2019 will vest after 3 June 2022. The expected vesting percentage is as follows:
Other remuneration matters
This section is unaudited unless stated otherwise.
Metric
Performance condition
NAV (fully
diluted
triple net)
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
Weighting
33.33%
Threshold
target
Stretch
target
6.25%*
13.59%*
Actual
7.59%
% vesting
8.80%
TPR
TSR
Total
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
33.33%
33.33%
100.0%
Median
3.22%
Median
-18.5%
Upper
quartile
5.32%
Upper
quartile
10.2%
9.09%
33.33%
33.8%
33.33%
75.46%
* The threshold and stretch targets have been increased from 5.00% and 12.50% to reflect the increase in RPI over 3.0% during the period.
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
Number of shares at grant
Number of shares
expected to lapse
Number of shares
expected to vest
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
366,896
213,517
285,379
90,037
52,398
70,033
276,859
161,119
215,346
Estimated value
at vesting1
£’000
1,151
670
895
1 The share price used to calculate the expected value at vesting was 415.77p, based on the average share price over the three months to 31 March 2022. The actual result was neutralised for
Helical’s conversion to a REIT from 1 April 2022.
PSP awards vested in 2021
The share awards presented in the remuneration table for the year to 31 March 2021 on page 124 are based on the 2014 PSP awards granted
on 31 May 2018. The three-year performance period to 31 March 2021 showed that the net asset value per share, calculated in accordance with
the terms of the 2014 PSP, had increased by 6.0% pa, above the minimum threshold of 5.00% but below the maximum threshold of 12.50%.
During this three-year period the total return of Helical’s property portfolio, as determined by MSCI IPD, was 8.9% compared to the upper
quartile of the MSCI Annual March Universe Total Return Index which showed a return of 4.8%. The TSR of the Company during the period was
25.2% compared to the median of minus 27.4% and upper quartile of 4.1%. Therefore, 73.99% of the shares vested in total. The share price
used to calculate the expected value at vesting for the 2018 PSP awards in the 2021 Annual Report was 387.63p (based on the average share
price over the three months to 31 March 2021). The actual share price at vesting on 2 June 2021 was 430.50p 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 the Remuneration Policy for the year to 31 March 2023
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 2023. To assist Shareholders to understand the Group’s overall remuneration, we have included
this information in the Implementation of the Remuneration Policy section on pages 114 to 115 above.
Advisors to the Committee
The Committee consults the Chief Executive and Chief Financial Officer about its proposals and has access to professional advice from FIT
Remuneration Consultants LLP (“FIT”), a member 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 2022 amounted to £21,128 (2021: £45,152). 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 2021 and 2022 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.
2022
£000
9,233
13,639
687,043
2021
£000
8,364
12,309
608,161
Change
%
10.4%
10.8%
13.0%
Shareholder voting at the last AGM
Details of the 2021 advisory Annual Report on Remuneration vote and the 2021 binding Remuneration Policy vote were as follows:
2021 Annual Report on Remuneration
122,099,814
98,671,359
2021 Remuneration Policy
122,099,814
95,598,663
Issued
For
%
99.2
96.1
Against
760,550
3,833,246
%
0.8
3.9
Withheld
Total
1,650,086
101,081,995
1,650,086
101,081,995
The Committee was pleased to note the level of Shareholder support for the Annual Report on Remuneration and the Remuneration Policy
last year.
Directors’ shareholdings (audited)
Executive Directors
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Non-Executive Directors
Richard Grant
Richard Cotton
Sue Clayton
Sue Farr1
Joe Lister
Legally
owned
31.3.21
2,062,803
607,816
1,273,845
15,000
25,000
–
6,000
3,200
Legally
owned
31.3.22
Share
Incentive Plan
unrestricted
31.3.22
2,274,691
686,166
1,430,888
30,000
37,000
14,000
9,111
9,350
46,515
25,597
46,082
–
–
–
–
–
Beneficially
held total
31.3.22
2,321,206
711,763
1,476,970
30,000
37,000
14,000
9,111
9,350
Deferred
shares
31.3.22
227,414
124,776
160,752
–
–
–
–
–
Share
Incentive Plan
restricted
31.3.22
19,875
16,990
19,816
–
–
–
–
–
PSP
awards
unvested
31.3.22
1,063,418
618,899
827,190
–
–
–
–
–
1 The shareholding of Sue Farr is held by a connected person.
The three Executive Directors of Helical have an average length of service of over 27 years and have built up a shareholding during that time of
circa 4.5m shares with a market value at 31 March 2022 of circa £18.75m at the weighted average share price for the three months to 31 March
2022 of 415.77p.
Directors’ share interests and shareholding guidelines (audited)
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
1 Salaries as at 31 March 2022.
2 Share ownership guideline is 500% of salary.
3 Value based on the average share price for the three months to 31 March 2022 of 415.77p.
Salary1
£
552,920
321,800
430,100
Share ownership
guideline2
£
2,765,000
1,609,000
2,151,000
Value of
beneficially
held shares3
£
9,651,000
2,959,000
6,141,000
Ratio of
shares held
to salary
%
1,745
920
1,428
126
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GovernanceHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Corporate governance report
continued
V REMUNERATION
V REMUNERATION
PSP awards granted in the year (audited)
The following conditional awards were granted on 2 June 2021 at 430.10p 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%
316,641
184,288
246,309
Face value of
award
£000
1,362
793
1,059
Vesting at
threshold
Vesting at
maximum
10%
10%
10%
100%
100%
100%
Performance period
3 years to 31 March 2024
3 years to 31 March 2024
3 years to 31 March 2024
Details of the performance targets attached to the awards are set out on page 120.
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
03.06.19
at 362.5p
Shares awarded
10.06.20
at 358.5p
Shares awarded
02.06.21
at 430.1p
366,896
213,517
285,379
379,881
221,094
295,502
316,641
184,288
246,309
Total shares
awarded
1,063,418
618,899
827,190
It is currently expected that 75% of the shares awarded on 3 June 2019, 66% of the shares awarded on 10 June 2020 and 41% of the shares
awarded on 2 June 2021 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%
Nil
2013
67%
67%
29%
33%
12%
8%
9%
33%
33%
33%
33%
33%
33%
33%
33%
33%
33%
33%
33%
2014
2015
2016
2017
2018
2019
2020
2021
2022
MSCI
NAV
TSR
The 2004 PSP operated with two vesting conditions. The TSR condition was added to the 2014 PSP.
Helical 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 2022, were as
follows:
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
2 June
2021
at 430.50p
10 June
2021
at 445.00p
9 August
2021
at 456.50p
20 September
2021
at 447.50p
20 December
2021
at 445.00p
5 January
2022
at 450.00p
16 March
2022
at 400.00p
836
836
836
303
303
303
1,038
660
1,030
303
303
303
303
303
303
421
269
418
336
336
336
Shares allocated to, or purchased on behalf of, the Directors, which remain in their ownership at 31 March 2022, were as follows:
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Unrestricted
Restricted
46,515
25,597
46,082
19,875
16,990
19,816
As at 31 March
2022
66,390
42,587
65,898
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.
Shares held by the Trustees of the Plan at 31 March 2022 were 620,496 (2021: 560,496).
Helical annual bonus scheme – deferred shares (audited)
Under the terms of the Annual Bonus Scheme 2018, one third of annual bonuses awarded to scheme participants each year are deferred for
three years into Helical plc shares, 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 this scheme, which
vested during the year to 31 March 2022 and which are expected to be awarded in June 2022, are as noted in the table below:
Executive Director
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Deferred shares
1 April 2021
2021 bonus
award
28 June 2021
2018 award
vesting
9 August 2021
Deferred shares
31 March 2022
Expected
2022
award
Dividend shares
awarded on 2018
award vesting
343,057
124,776
250,707
–
–
–
(115,643)
–
(89,955)
227,414
124,776
160,752
60,781
35,375
47,280
11,250
–
8,751
Share price performance and Total Shareholder Return (TSR)
The market price of the ordinary shares of Helical plc at 31 March
2022 was 411.00p (2021: 413.50p). This market price varied between
374.00p and 497.00p and averaged 439.09p during the year.
The Total Shareholder Returns for a holding in the Group’s shares
in the three and ten years to 31 March 2022 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 2022
The graph below showing the relative performance of Helical during
the three years to 31 March 2022 matches the performance period
for the 2019 PSP award granted on 3 June 2019 and which will vest
on 3 June 2022.
TOTAL SHAREHOLDER RETURN
150
125
100
75
50
25
0
Mar
2019
Mar
2020
Mar
2021
Mar
2022
Helical
FTSE 350 Supersector Real Estate Index
Source: Datastream (a Refinitiv product)
This graph shows the value, by 31 March 2022, of £100 invested in
Helical on 31 March 2019, compared with the value of £100 invested
in the FTSE 350 Supersector Real Estate Index.
TSR – ten years to 31 March 2022
The graph below shows the base position, at 31 March 2012, from
which subsequent performance is measured, as required by the
Regulations.
TOTAL SHAREHOLDER RETURN
300
250
200
150
100
50
0
Mar
’12
Mar
’13
Mar
’14
Mar
’15
Mar
’16
Mar
’17
Mar
’18
Mar
’19
Mar
’20
Mar
’21
Mar
’22
Helical
FTSE 350 Supersector Real Estate Index
Source: Datastream (a Refinitiv Product)
This graph shows the value, by 31 March 2022, of £100 invested
in Helical on 31 March 2012, compared with the value of £100 invested
in the FTSE 350 Supersector Real Estate Index.
128
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GovernanceHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Corporate governance report
continued
V REMUNERATION
V REMUNERATION
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 below presents single figure
remuneration for the Chief Executive over the period, since 1 April 2012, together with past annual bonus pay-outs and the vesting of long-term
incentive share awards:
Year ended
31 March 2022
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
Name
Gerald Kaye
Gerald Kaye
Gerald Kaye
Gerald Kaye
Gerald Kaye
Gerald Kaye
Michael Slade
Michael Slade
Michael Slade
Michael Slade
Total
remuneration
£000
Annual bonus
(% of max
pay-out)
PSP
(% of max
vesting)
2,614
2,234
2,316
1,732
2,209
2,6353
3,867
5,534
3,343
1,523
97
60
761
91
752
100
100
100
100
65
75
74
66
33
46
66
100
100
62
–
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 and 2022 single total figure of remuneration for the Chief Executive, as shown in the table on page 124,
with the Group’s other employees paid at the 25th, 50th and 75th percentiles:
Remuneration
Year ended 31 March 2022
25th percentile
50th percentile
75th percentile
Year ended 31 March 2021
25th percentile
50th percentile
75th percentile
Other employees
Total
remuneration
£
Other employees
Salary
£
CEO pay
28:1
20:1
7:1
27:1
23:1
7:1
93,042
128,120
378,253
80,124
93,618
290,860
64,035
70,000
148,625
58,375
70,000
137,813
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
2021 and 2022 and between 2020 and 2021, was as follows:
This is the second 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 (e.g. 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 124 and include annual
salary, taxable benefits, free and matching shares allocated under the terms of the Group’s Share Incentive Plan, annual bonuses awarded,
taxable share awards vesting under the terms of the Group’s Performance Share Plan, and employer pension contributions to employees’
pension arrangements.
2021-2022
2020-2021
Approved by the Board on 24 May 2022 and signed on its behalf.
Executive Directors
Gerald Kaye
Tim Murphy
Matthew Bonning-Snook
Non-Executive Directors
Richard Grant2
Richard Cotton
Sue Clayton
Sue Farr3
Joe Lister4
Average of all other employees
Base
salary/fees
1.5%
1.5%
1.5%
0.0%
0.0%
0.0%
5.6%
0.0%
5.0%
Benefits
0.9%
29.9%
5.7%
n/a
n/a
n/a
n/a
n/a
Annual
bonus
63.4%
63.4%
63.4%
n/a
n/a
n/a
n/a
n/a
8.1%
-5.9%
Annual
salary/fees
0.0%
0.0%
0.0%
17.2%
0.0%
0.0%
41.0%
5.5%
0.8%
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
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 page 124.
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.
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.
Sue Farr
Chair of the Remuneration Committee
130
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GovernanceHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Report of the Directors
Strategic Report
A review of the Group’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 48
to 55 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 141. An interim dividend of 2.90p (2020: 2.70p) was paid on
31 December 2021 to Shareholders on the Shareholder register on 3
December 2021. A final dividend of 8.25p (2021: 7.40p) per share is
recommended for approval at the Annual General Meeting (“AGM”) to
be held on 14 July 2022 and, if approved, will be paid on 29 July 2022
to Shareholders on the register on 24 June 2022. The total ordinary
dividend declared and paid in the year of 10.30p (2021: 8.70p) per
share amounted to £12,583,000 (2021: £10,528,000).
Corporate governance
During the year ended 31 March 2022 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, with the exception
of Provision 19 relating to the Chairman’s tenure on the Board (please
see page 103 for explanation). 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. The Code can be viewed in full at
www.frc.org.uk. Please see page 93 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
90 to 92. All the Directors, with the exception of Richard Grant, will
be offering themselves for re-election at the AGM on 14 July 2022
and their continuing contribution to the Group’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 Group’s strategy and the
promotion of long-term sustainable success are set out in the
Directors’ Remuneration Report on pages 110 to 131. Details of the
Directors’ interests in the ordinary shares of the Company are shown
on page 127.
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 pages 48 to 49. 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 2022.
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 Group maintains Directors’ and Officers’ Liability Insurance which
is subject to annual renewal. To the extent permitted by UK law, the
Group 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 2022.
Financial instruments, capitalised interest and
long-term incentive schemes
The information required in respect of financial instruments, as required
by Schedule 7 of the Large and Medium Sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2013, is shown in
Note 36. Interest capitalised on the Group property portfolio is shown
in Notes 14 and 20. Long-term incentive schemes are explained in the
Directors’ Remuneration Report on pages 112 to 131.
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 will not be disclosing
specific details in this report. 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 13 May 2022, 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 Helical plc.
Fund Manager/Owner
Janus Henderson Investors
Mr Michael E. Slade & Mrs Heather I. Slade
Baillie Gifford
BlackRock
Schroder Investment Management
Jupiter Asset Management
Dimensional Fund Advisors
Goldman Sachs International
Vanguard Group
M&G Investments
* Shareholding as at 2 May 2022
Shares
% at
13/05/2022
10,944,643
10,261,239
10,010,161
8.95%
8.39%
8.18%
7,867,695*
6.43%*
6,783,326
6,330,352
5.55%
5.18%
5,189,094*
4.24%*
4,631,897
4,419,253
3,868,107
3.79%
3.61%
3.16%
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
Shareholders. However, the Board also 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 80 and 85.
Culture, employment and environmental matters
The corporate Culture of the Group, articulated through the
Helical Purpose and Values, is discussed on pages 78 and 80
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 84 and 85. For details of all the methods used by the
Board to monitor and sustain the Culture of Helical during the
reporting period, please see page 80 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
Group’s Diversity and Inclusion Policy can be found on pages 100
and 102.
All employee candidates are considered fairly and without prejudice
or discrimination and the Group 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 102).
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 56 to 73.
Post balance sheet events
Details of post balance sheet events are set out in Note 33 to the
financial statements.
Group structure
Details of the Group’s subsidiary undertakings are disclosed in
Note 39 to the financial statements.
Share capital
Details of the Company’s issued share capital are shown in Note 27
to the financial statements. Up until 21 March 2022, the Company’s
share capital consisted of both ordinary shares and deferred shares.
However, to be eligible for REIT status, the Company can have only
one class of shares. Therefore, in order to meet this condition, the
Company sought Shareholder approval to buy-back and cancel the
deferred shares at the EGM on 21 March 2022. Approval was duly
granted by Shareholders and the deferred share class was cancelled
with effect from the date of the meeting. For more information on the
EGM and the voting results, please visit our website: https://www.
helical.co.uk/investors/agm-gms/
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 2022 Annual General Meeting (“AGM”) specifies
deadlines for exercising voting rights and appointing a proxy or
proxies to vote in relation to resolutions to be passed at the meeting.
There are no restrictions on voting rights other than as specified by
the Company’s Articles of Association.
Purchase of own shares
The Company was granted authority at the 2021 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
2022 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.
In connection with the REIT conversion (see also page 76), the
Company sought Shareholder approval to amend its Articles to insert
provisions to afford the Company additional powers with respect
to dividends (or making any other distribution) to a Substantial
Shareholder. The updated Articles were put to the Shareholders for
approval at the EGM on 21 March 2022 and were approved by a
99.9% majority.
Annual General Meeting
It is intended that the Annual General Meeting of the Company will be
held on 14 July 2022 at 9:00 am at the Company’s registered offices
located at 5 Hanover Square, London W1S 1HQ. The special business
at the 2022 AGM will include resolutions dealing with the authority
to restate and extend the life of the Company’s employee share
incentive plan for a further ten years to 24 July 2023, the authority to
issue shares, the disapplication of pre-emption rights, the authority
for the Company to purchase its own shares and the authority to call
General Meetings on not less than 14 clear days’ notice. The Notice of
Meeting, containing explanations of all the resolutions to be proposed
at that meeting, is enclosed with this Annual Report and can be found
on the Group’s website at www.helical.co.uk
Auditor
The Company’s Auditor, Deloitte LLP, have expressed its willingness
to continue in office and resolutions to reappoint them and to
authorise the Directors to determine their remuneration will
be proposed at the 2022 AGM. The Directors confirm that:
• so far as each Director is aware, there is no relevant audit
information of which the Group’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
132
133
GovernanceHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Directors’ responsibilities statement
Independent Auditor’s Report to the Members of Helical plc
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
Responsibility statement
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the relevant
financial reporting framework, 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 Strategic 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.
This responsibility statement was approved by the Board of Directors
on 24 May 2022 and is signed on its behalf by:
Gerald Kaye
Chief Executive Officer
Tim Murphy
Chief Financial Officer
24 May 2022
24 May 2022
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 United
Kingdom adopted international accounting standards in conformity
with the requirements of the Companies Act 2006. The financial
statements also comply with International Financial Reporting
Standards (“IFRSs”) as issued by the IASB. The Directors have also
chosen to prepare the parent Company financial statements under
United Kingdom adopted international accounting standards in
conformity with the Companies Act 2006. Under company law the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the
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
that provides relevant, reliable, comparable and understandable
information;
• provide additional disclosures when compliance with the specific
requirements of the financial reporting framework 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.
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 2022 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with United Kingdom adopted International Accounting
Standards;
• the Parent company financial statements have been properly prepared in accordance with United Kingdom adopted international
accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
• the Consolidated Income Statement;
• the Consolidated Statement of Comprehensive Income;
• the Consolidated and Company Balance Sheets;
• the Consolidated and Company Statements of Changes in Equity;
• the Consolidated and Company Cash Flow Statements; and
• the related notes 1 to 39.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom adopted International
Accounting Standards and, as regards the Parent company financial statements, as applied in accordance with the provisions of the
Companies Act 2006.
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report.
We are independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services provided to the
Group for the year are disclosed in note 6 to the financial statements. We confirm that we have not provided any non-audit services prohibited
by the FRC’s Ethical Standard 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
Materiality
Scoping
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
The materiality that we used for the Group financial statements was £11.3m
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 Group’s Joint Ventures.
Significant changes in our approach
There have been no significant changes to our approach in the current year.
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Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Independent Auditor’s Report to the Members of Helical plc
continued
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 of 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 severe downside scenario cash flow forecast;
• 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 assets 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
twelve 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 2022, the Group held wholly owned investment property valued at £938.8m (31 March 2021: £740.2m).
Investment properties are held at fair value on the Group Balance Sheet. During the year, a net valuation gain of £33.3m
(31 March 2021: £19.4m) was recorded as well as additions of £165.5m (31 March 2021: £13.1m). Investment property
valuation represents the most significant area of estimation and judgement within the Group financial statements, which
is why we consider this to be a key audit matter as well as a potential fraud risk.
The valuation of the portfolio is a significant judgement area that is underpinned by a number of assumptions including
property yields and estimated future rental income. Our key audit matter in relation to the valuation of the investment
property portfolio is focussed on the assumptions applied in the determination of the valuation, including property yields
and estimated future rental income, where these fall outside of a range which we would expect to be applied in line with
Red Book guidance.
In addition, given the size of the portfolio and the judgements involved, we consider there to be a risk that the inputs used
in the data (including rental income, purchaser’s costs and occupancy) supplied to the Group’s external valuers for the
valuation process (specifically the accuracy and completeness of this data) may potentially be manipulated by
management in order to fraudulently misstate the valuation.
See also key sources of estimation uncertainty in note 38, the investment properties in note 14 of the financial statements
and the Audit and Risk Committee Report on page 106.
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 and tested relevant key
controls. Management’s process for challenging the appropriateness of property valuations has been assessed.
We held meetings with the external valuers appointed by management to value the property portfolio. With the involvement
of our internal real estate valuation specialists we challenged the significant judgements and assumptions applied in their
valuation model. 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 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 Group’s external 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.
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.
Key observations
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
Group financial statements
£11.3m (2021: £10.0m)
Parent Company financial statements
£6.23m (2021: £5.70m)
£2.27m (2021: £1.70m) for balances affecting the income
statement excluding valuation gains and tax
Basis for determining materiality
1% of total assets (2021: 1% of total assets)
1% of total assets (2021: 1% of total assets)
Rationale for the benchmark applied
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 (2021: 5% of previous three years’ average profit
before tax).
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.
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.
Total assets is the most appropriate benchmark due
to the Parent Company being a holding company.
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continued
TOTAL SHAREHOLDER RETURN
Total assets
£1,135.1m
7.2 Our consideration of the control environment
From our understanding of the Group and after assessing relevant
controls, we tested controls in respect of the investment property
cycle. Whilst we did not take controls reliance, we assessed and
tested the relevant controls relating to the valuation of investment
property given the significance to the Group.
In addition, we have obtained an understanding of the relevant
controls such as those relating to the financial reporting cycle.
With the involvement of our IT specialists, we obtained an
understanding of the IT environment. We did not test the general
IT controls and we did not place reliance on IT controls.
Group materiality
£11.3m
Component
materiality range
£1.2m to £6.23m
Total assets
Group materiality
Audit and Risk Committee
reporting threshold
£0.57m
7.3. Our consideration of climate-related risks
In planning our audit, we have considered the potential impact of
climate change on the Group’s business and its financial statements.
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.
Performance
materiality
Basis and rationale
for determining
performance
materiality
Group
financial statements
70% (2021: 70%) of
Group materiality
Parent Company
financial statements
70% (2021: 70%) of Parent
Company 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; 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 £0.57m (2021:
£0.50m), 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 and profit
before tax, and net assets.
The materiality range for the Barts LP Group and Charterhouse
Street Group joint ventures is £1.2m to £5.1m (2021: £1.6m to £3.0m).
All work has been performed by the Group engagement team.
The Group continues to develop its assessment of climate-related
risks and resilience of the Group and its properties under different
climate scenarios, as explained in the Strategic Report on pages
2 to 85.
As a part of our audit, we have held discussions with management to
understand the process of identifying and assessing climate-related
risks, the process for managing the identified risks and the
determination of mitigating actions as well as the impact on the
Group’s financial statements. Management has assessed that there
is currently no material impact arising from climate change on the
judgements and estimates that have been made in the preparation
of the financial statements (see note 38).
We performed our own assessment of the potential impact of climate
change on the Group’s financial statements and did not identify any
reasonably possible risks of material misstatement. Our procedures
also included evaluating the appropriateness of disclosures included
in the financial statements and reading disclosures included in the
Strategic Report to consider whether they are materially consistent
with the financial statements and our knowledge obtained in the audit.
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.
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 and IT 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, 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, Employment Law and
the Landlord and Tenant Act.
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; and
• reading minutes of meetings of those charged with governance,
and enquiring on any correspondence with HMRC.
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.
138
139
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Independent Auditor’s Report to the Members of Helical plc
continued
Consolidated Income Statement
For the year to 31 March 2022
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
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.
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2022
Profit for the year
Total comprehensive income for the year
Year ended
31.3.22
£000
Year ended
31.3.21
£000
Notes
3
3
4
18
5
14
6
8
8
36
9
13
51,146
(14,228)
36,918
20,708
57,626
(45)
33,311
90,892
(16,768)
74,124
(19,234)
6
17,996
72,892
16,002
88,894
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
72.8p
71.4p
14.8p
14.5p
Year ended
31.3.22
£000
88,894
88,894
Year ended
31.3.21
£000
17,877
17,877
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 respect of these matters.
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 4 years,
covering the years ending 31 March 2019 to 31 March 2022.
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.
As required by the Financial Conduct Authority (FCA) Disclosure
Guidance and Transparency Rule (DTR) 4.1.14R, these financial
statements form part of the European Single Electronic Format
(ESEF) prepared Annual Financial Report filed on the National
Storage Mechanism of the UK FCA in accordance with the ESEF
Regulatory Technical Standard (‘ESEF RTS’). This auditor’s report
provides no assurance over whether the Annual Financial Report
has been prepared using the single electronic format specified in
the ESEF RTS.
Georgina Robb, FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
24 May 2022
Report on other legal and regulatory requirements
12. Opinions on other matters prescribed by the
Companies Act 2006
In our opinion the part of the Directors’ Remuneration Report
to be audited has been properly prepared in accordance with
the Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
• the information given in the Strategic Report and the Report
of the Directors for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
• the Strategic Report and the Report of the Directors have been
prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and
the Parent Company and their environment obtained in the course
of the audit, we have not identified any material misstatements in
the Strategic Report or the Report of the Directors.
13. 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 respect of these matters.
140
141
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Consolidated Balance Sheet
At 31 March 2022
Company Balance Sheet
At 31 March 2022
Non-current assets
Investment properties
Owner occupied property, plant and equipment
Investment in joint ventures
Other investments
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
Non-current liabilities
Borrowings
Derivative financial instruments
Lease liability
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
18
19
36
20
21
22
23
24
25
36
24
10
27
Group
31.3.22
£000
938,797
4,631
100,604
306
11,104
Group
31.3.21
£000
740,207
5,362
79,953
–
171
1,055,442
825,693
2,089
338
48,453
28,807
79,687
448
–
40,427
154,448
195,323
1,135,129
1,021,016
(43,986)
(46,764)
(658)
–
(634)
(655)
(44,644)
(48,053)
(396,633)
(336,703)
(538)
(6,271)
–
(403,442)
(448,086)
(7,601)
(6,929)
(13,569)
(364,802)
(412,855)
687,043
608,161
1,223
112,654
197,627
7,743
291
367,505
687,043
1,478
107,990
164,316
7,478
291
326,608
608,161
Non-current assets
Owner occupied property, plant and equipment
Investment in subsidiaries
Amounts owed by group undertakings
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Lease liability
Borrowings
Non-current liabilities
Lease liability
Deferred tax liability
Total liabilities
Net assets
Equity
Called-up share capital
Share premium account
Capital redemption reserve
Other reserves
Retained earnings
Total equity
Notes
16
17
21
21
22
23
24
25
24
10
27
Company
31.3.22
£000
4,631
210,341
405,616
620,588
655
1,797
2,452
623,040
Company
31.3.21
Restated
£000
5,362
208,583
293,223
507,168
712
68,026
68,738
575,906
Company
31.3.20
Restated
£000
6,007
208,272
299,893
514,172
422
56,918
57,340
571,512
(188,759)
(145,893)
(180,994)
(658)
–
(634)
–
(611)
(5,000)
(189,417)
(146,527)
(186,605)
(4,082)
–
(4,082)
(193,499)
(4,740)
(244)
(4,984)
(5,374)
(219)
(5,593)
(151,511)
(192,198)
429,541
424,395
379,314
1,223
112,654
7,743
1,987
305,934
429,541
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 £13,054,000 (2021: £51,128,000).
The financial statements were approved by the Board and authorised for issue on 24 May 2022.
The financial statements were approved by the Board and authorised for issue on 24 May 2022.
Tim Murphy
Chief Financial Officer
Company number 156663
Tim Murphy
Chief Financial Officer
Company number 156663
142
143
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Consolidated Cash Flow Statement
For the year to 31 March 2022
Consolidated and Company Statements of Changes In Equity
At 31 March 2022
Cash flows from operating activities
Profit before tax
Depreciation
Revaluation surplus on investment properties
Loss on sale of investment properties
Letting cost amortised
Profit on sale of plant and equipment
Net financing costs
Change in fair value of derivative financial instruments
Share-based payments charge
Share of results of joint ventures
Impairment of investments
Dividends received from subsidiaries
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
Net cash generated from/(used by) operating activities
Cash flows from investing activities
Additions to investment property
Purchase of other investments
Net (costs)/proceeds from sale of investment property
Investment in joint ventures and subsidiaries
Dividends from joint ventures
Dividends from subsidiaries
Sale of plant and equipment
Purchase of owner occupied property, plant and equipment
Net cash (used by)/generated from investing activities
Cash flows from financing activities
Borrowings drawn down
Borrowings repaid
Lease liability payments
Sale of own shares
Shares issued
Equity dividends paid
Net cash generated from/(used by) financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
Group
31.3.22
£000
72,892
766
(33,311)
45
226
(11)
19,228
(17,996)
3,843
(20,708)
–
–
24,974
(7,926)
(1,641)
5,941
21,348
(18,335)
6
13
(18,316)
3,032
Group
31.3.21
£000
20,508
791
(19,387)
1,341
19
(14)
14,021
(2,938)
2,031
(2,352)
–
–
14,020
(2,554)
404
3,758
15,628
(12,902)
58
1,219
(11,625)
4,003
(174,057)
(16,306)
(306)
(45)
(3,323)
3,381
–
44
(68)
(174,374)
190,000
(131,150)
(631)
54
10
(12,582)
45,701
(125,641)
154,448
28,807
–
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
Company
31.3.22
£000
11,440
766
–
–
–
(11)
755
–
–
–
5,806
(20,893)
(2,137)
(110,679)
–
53,870
(58,946)
(1,060)
5
13
(1,042)
(59,988)
–
–
–
(7,569)
–
9,894
44
(68)
2,301
–
–
(634)
–
4,674
(12,582)
(8,542)
(66,229)
68,026
1,797
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
–
–
–
(3,150)
6,066
2,355
23
(155)
5,139
–
(5,000)
(611)
–
4,481
(10,528)
(11,658)
11,108
56,918
68,026
Group
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
Total comprehensive income
Revaluation surplus
Issued share capital
Performance Share Plan
Performance Share Plan – deferred tax
Share settled Performance Share Plan
Deferred bonus shares
Share settled bonus
Profit on sale of shares
Cancelled deferred shares
Dividends paid
At 31 March 2022
Company
At 31 March 2020
Total comprehensive income
Issued share capital
Dividends paid
At 31 March 2021
Total comprehensive income
Issued share capital
Dividends paid
Cancelled deferred shares
At 31 March 2022
Share
capital
£000
1,465
Share
premium
£000
Revaluation
reserve
£000
Capital
redemption
reserve
£000
103,522
171,464
7,478
Other
reserves
£000
291
–
–
–
13
–
–
–
–
–
–
–
–
–
4,468
–
–
–
–
–
–
–
19,387
(26,535)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,478
107,990
164,316
7,478
291
–
–
10
–
–
–
–
–
–
(265)
–
–
–
4,610
–
–
–
–
–
54
–
–
–
33,311
–
–
–
–
–
–
–
–
–
1,223
112,654
197,627
–
–
–
–
–
–
–
–
–
265
–
7,743
Retained
earnings
£000
314,469
17,877
(19,387)
26,535
–
2,031
66
(3,335)
(1,145)
25
Total
£000
598,689
17,877
–
–
4,481
2,031
66
(3,335)
(1,145)
25
(10,528)
(10,528)
326,608
88,894
(33,311)
–
3,223
(1,325)
(3,591)
620
608,161
88,894
–
4,620
3,223
(1,325)
(3,591)
620
(1,031)
(1,031)
–
–
54
–
(12,582)
(12,582)
291
367,505
687,043
Share
capital
£000
1,465
–
13
–
Share
premium
£000
103,522
–
4,468
–
Capital
redemption
reserve
£000
7,478
–
–
–
Other
reserves
£000
1,987
–
–
–
1,478
107,990
7,478
1,987
–
10
–
(265)
1,223
–
4,664
–
–
112,654
–
–
–
265
7,743
Retained
earnings
£000
264,862
51,128
–
Total
£000
379,314
51,128
4,481
(10,528)
(10,528)
305,462
13,054
–
424,395
13,054
4,674
(12,582)
(12,582)
–
–
1,987
305,934
429,541
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
For a breakdown of Total Comprehensive Income see the Consolidated Statement of Comprehensive Income.
The adjustment against retained earnings of £3,223,000 (31 March 2021: £2,031,000) adds back the share-based payments charge in
accordance with IFRS 2 Share Based Payments.
There were net transactions with owners of £10,012,000 (31 March 2021: £8,405,000) made up of the Performance Share Plan credit of
£3,223,000 (31 March 2021: £2,031,000) and related deferred tax charge of £1,325,000 (31 March 2021: credit of £66,000), dividends paid
of £12,582,000 (31 March 2021: £10,528,000), issued share capital of £10,000 (31 March 2021: £13,000) and corresponding share premium of
£4,610,000 (31 March 2021: £4,468,000), share settled Performance Share Plan awards charge of £3,591,000 (31 March 2021: £3,335,000),
the share settled bonus awards charge of £1,031,000 (31 March 2021: £1,145,000), deferred bonus shares of £620,000 (31 March 2021: £nil)
and profit on sale of shares of £54,000 (31 March 2021: £25,000).
144
145
Total Comprehensive Income is made up of the profit after tax of £13,054,000 (2021: £51,128,0000).
Included within changes in equity are net transactions with owners of £7,908,000 (2021: £6,047,000) being dividends paid of £12,582,000 (2021:
£10,528,000) and issued share capital and corresponding share premium of £4,674,000 (2021: £4,481,000).
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.
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Notes to the Financial Statements
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 189. 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 2 to 85.
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 38. These accounting policies are consistent with those applied in the year to 31 March 2021, as amended to reflect
any new standards.
Amendments to standards and interpretations which are mandatory for the year ended 31 March 2022 are detailed below however none of
these have had a material impact on the financial statements:
• Amendment to IFRS 16 Covid-19-Related Rent Concessions beyond 30 June 2021 (effective for periods beginning on or after 1 April 2021);
and Amendments to IFRS 9 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:
• 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);
The April 2022 compliance position for these covenants is summarised below:
Covenant
Requirement
Actual
LTV
LRV
ICR
<65%
<12.0x
>150%
46%
10.0x
313%
The results of this review demonstrated the following:
• The forecasts show that all bank facility financial covenants will be met throughout the review period, with headroom to withstand a 61% fall in
contracted rental income;
• The Group could withstand receiving no rental income during the going concern period (excluding the impact on income covenants);
• Property values could fall by 47% before loan to value covenants come under pressure;
• Whilst the Group has a WAULT of 5.6 years, in a downside scenario whereby all tenants with lease expiries or break options in the going
concern period exercise their breaks or do not renew at the end of their lease, and with no vacant space let or re-let, the rental income
covenants would be met throughout the review period; and
• Additional asset sales could be utilised to generate cash to repay debt, materially increasing covenant headroom.
Based on this analysis, the Directors have adopted the going concern basis in preparing the accounts for the year ended 31 March 2022.
• Amendments to IFRS 3 Reference to the Conceptual Framework (effective for periods beginning on or after 1 January 2022);
2. Revenue from Contracts with Customers
• 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 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).
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 next 12 month period, with sensitivity testing undertaken to replicate severe but plausible downside
scenarios related to the principal risks and uncertainties associated with the business.
The key assumptions used in the review are summarised below:
• The Group’s rental income receipts were modelled for each tenant on an individual basis;
• Existing loan facilities remain available;
• Certain property disposals are assumed in line with the individual asset business plans; and
• Free cash is utilised where necessary to repay debt/cure bank facility covenants.
Compliance with the financial covenants of the Group’s main debt facility, its £400m Revolving Credit Facility, was the Directors’ key area
of review, with particular focus on the following three covenants:
• Loan to Value (“LTV”) – the ratio of the drawn loan amount to the value of the secured property as a percentage;
• Loan to Rental Value (“LRV”) – the ratio of the loan to the projected contractual net rental income for the next 12 months; and
• Projected Net Rental Interest Cover Ratio (“ICR”) – the ratio of projected net rental income to projected finance costs.
Development property income
Service charge income
Other income
Total revenue from contracts with customers
Year ended
31.3.22
£000
7,490
8,304
28
15,822
Year ended
31.3.21
£000
1,700
8,841
48
10,589
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 2022 amounted to £5,000 (2021: £140,000).
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
Investment
Year ended
31.03.22
£000
35,324
–
8,304
28
43,656
Development
Year ended
31.03.22
£000
–
7,490
–
–
7,490
Total
Year ended
31.03.22
£000
35,324
7,490
8,304
28
51,146
Investment
Year ended
31.03.21
£000
28,007
–
8,841
48
36,896
Development
Year ended
31.03.21
£000
–
1,700
–
–
1,700
Total
Year ended
31.03.21
£000
28,007
1,700
8,841
48
38,596
146
147
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Notes to the Financial Statements
continued
Major customers
For the year ending 31 March 2022, the Group had three tenants (2021: two) that contributed 10% or more to the gross rental income.
The balances detailed below represent the approximate contribution by each major tenant.
Tenant 1: £6,560,000 (2021: £nil)
Tenant 2: £3,960,000 (2021: £3,300,000)
Tenant 3: £3,730,000 (2021: £3,900,000)
Cost of sales
Rents payable
Property overheads
Service charge expense
Development cost of sales
Development sales expenses
Reversal of provision/(provision)
Cost of sales
Investment
Year ended
31.03.22
£000
Development
Year ended
31.03.22
£000
Total
Year ended
31.03.22
£000
(169)
(4,069)
(8,304)
–
–
–
(12,542)
–
–
–
(3,864)
(107)
2,285
(1,686)
(169)
(4,069)
(8,304)
(3,864)
(107)
2,285
Investment
Year ended
31.03.21
£000
(232)
(2,810)
(8,841)
–
–
–
Development
Year ended
31.03.21
£000
Total
Year ended
31.03.21
£000
–
–
–
(1,018)
(4)
(82)
(232)
(2,810)
(8,841)
(1,018)
(4)
(82)
(14,228)
(11,883)
(1,104)
(12,987)
4. Net Property Income
Gross rental income
Head rents payable
Property overheads
Net rental income
Development property income
Development cost of sales
Sales expenses
Reversal of provision/(provision)
Development property profit
Other revenue
Net property income
Year ended
31.3.22
£000
Year ended
31.3.21
£000
35,324
(169)
(4,069)
31,086
7,490
(3,864)
(107)
2,285
5,804
28
36,918
28,007
(232)
(2,810)
24,965
1,700
(1,018)
(4)
(82)
596
48
25,609
Property overheads include lettings costs, vacancy costs and bad debt provisions. The amounts above include gross rental income from
investment properties of £35,324,000 (2021: £28,007,000) and net rental income from investment properties of £31,086,000 (2021:
£24,965,000). Included within Gross rental income above is £5,638,000 (2021: reduction of £389,000) of accrued income for rent free periods.
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 £28,000 (2021: £48,000), revenue from services of £7,490,000 (2021: £1,700,000),
service charge income of £8,304,000 (2021: £8,841,000) and rental income of £35,324,000 (2021: £28,007,000).
5. Loss on Sale of Investment Properties
Development
Year ended
31.03.22
£000
Total
Year ended
31.03.22
£000
Development
Year ended
31.03.21
£000
Total
Year ended
31.03.21
£000
5,804
105
–
5,909
Investment
Year ended
£000
25,013
4,389
18,046
47,448
596
(2,037)
–
(1,441)
Investment
Year ended
31.03.22
£000
31,114
20,603
33,266
84,983
Profit before tax
Net property income
Share of results of joint ventures
Gain on sale and revaluation of investment properties
Segmental profit/(loss)
Administrative expenses
Finance costs
Finance income
Change in fair value of derivative financial instruments
Profit before tax
Investment
31.03.22
£000
938,797
–
96,157
1,034,954
Development
31.03.22
£000
–
2,089
4,447
6,536
Net assets
Investment properties
Land and developments
Investment in joint ventures
Owner occupied property, plant and equipment
Other investments
Derivative financial instruments
Trade and other receivables
Corporation tax receivable
Cash and cash equivalents
Total assets
Total liabilities
Net assets
All non-current assets are derived from the Group’s UK operations.
36,918
20,708
33,266
90,892
(16,768)
(19,234)
6
17,996
72,892
Total
31.03.22
£000
938,797
2,089
100,604
1,041,490
4,631
306
11,104
48,453
338
28,807
1,135,129
(448,086)
687,043
Investment
31.03.21
£000
740,207
–
74,165
814,372
Development
31.03.21
£000
–
448
5,788
6,236
25,609
2,352
18,046
46,007
(14,416)
(14,079)
58
2,938
20,508
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
Net (costs)/proceeds from the sale of investment properties
Book value (Note 14)
Tenants’ incentives on sold investment properties
Loss on sale of investment properties
6. Administrative Expenses
Administrative expenses
Operating profit is stated after the following items that are contained within administrative expenses:
Depreciation – Owner occupied property, plant and equipment
Share-based payments charge
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
Year ended
31.3.22
£000
(45)
–
–
(45)
Year ended
31.3.21
£000
113,207
(111,883)
(2,665)
(1,341)
Year ended
31.3.22
£000
16,768
Year ended
31.3.21
£000
14,416
766
3,223
9,233
210
92
63
10
206
791
2,031
8,364
194
82
59
9
268
148
149
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Notes to the Financial Statements
continued
7. Staff Costs
Staff costs during the year:
Wages and salaries
Social security costs
Other pension costs
Year ended
31.3.22
£000
Year ended
31.3.21
£000
7,194
1,747
292
9,233
6,722
1,355
287
8,364
Details of the remuneration of Directors amounting to £6,536,000 (2021: £5,647,000) are included in the Directors’ Remuneration Report on
pages 110 to 131. Included within wages and salaries are Directors’ bonuses of £1,902,000 (2021: £1,163,000) as discussed in the Directors’
Remuneration Report on pages 110 to 131.
Other pension costs relate to payments to individual pension plans.
The average monthly number of employees of the Group during the year was 28 (2021: 29), all of whom are UK head office staff employed
by Helical Services Limited, a subsidiary of the Group. There were averages of five (2021: five) management, seven (2021: seven) Property
Executives and 16 (2021: 17) administrative staff.
Within administrative costs is the share-based payments charge for the year of £3,223,000 (2021: £2,031,000) which is not included in the staff
costs above. The amount of the share-based payments charge relating to share awards made to Directors is £2,148,000 (2021: £1,410,000).
Factors Affecting the Tax Charge for the Year
The tax assessed for the year is lower than (2021: 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% (2021: 19%)
Effect of:
Net income/(expenses) not taxable/(deductible) for tax purposes
Capital allowances claims and adjustments not recognised through deferred tax
Tax movements on share awards
Operating profit of joint ventures
Current tax charge adjustment in respect of prior periods
Tax losses not recognised through deferred tax
Movement on sale and revaluation not recognised through deferred tax
Chargeable gain in excess of profit or loss on investment property
Movement on derivatives not recognised through deferred tax
Release of deferred tax liability on conversion to a UK REIT
Payment for use of tax losses
Total tax credit/(charge) for the year
Year ended
31.3.22
£000
72,892
(13,849)
Year ended
31.3.21
£000
20,508
(3,896)
52
1,273
1,281
3,935
1,146
(1,068)
6,329
–
3,373
13,569
(39)
16,002
(237)
591
171
447
365
–
93
(165)
–
–
–
(2,631)
8. Finance Costs and Finance Income
Interest payable on bank loans and overdrafts
Other interest payable and similar charges
Cancellation of loans
Finance costs
Interest receivable and similar income
Finance income
No interest has been capitalised in the year to 31 March 2022 (2021: £nil).
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% (2021: 19%)
Group corporation tax
Adjustment in respect of prior years
Use of tax losses
Current tax credit/(charge)
Deferred tax
Capital allowances
Tax losses
Unrealised chargeable gains
Other temporary differences
Deferred tax credit/(charge)
Total tax credit/(charge) for the year
Year ended
31.3.22
£000
(10,169)
(3,179)
(5,886)
(19,234)
Year ended
31.3.21
£000
(10,697)
(3,382)
–
(14,079)
6
6
58
58
The Group became a UK REIT on 1 April 2022. As a result, the deferred tax assets and liabilities associated with the Group’s property business
were released. The majority of the liability released related to unrealised revaluation gains on the Group’s investment properties. In addition,
deferred tax assets totalling £4,402,000 recognised at 31 March 2021 were released on the basis that it is no longer probable that sufficient
taxable profits will be generated in the non-property business in the future against which these assets could be offset.
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. On release
of the deferred tax asset, a charge of £1,325,000 (2021: credit of £66,000) in respect of future tax relief for share awards has been recognised
in reserves in accordance with IAS 12 Income Taxes. Together with the credit 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 £13,901,000 (31 March 2021: £6,454,000). Following the Group’s conversion to a REIT, 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 on their use whereby their utilisation is considered to be unlikely.
Year ended
31.3.22
£000
Year ended
31.3.21
£000
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
31.3.22
Group
£000
–
–
–
–
–
31.3.21
Group
£000
(4,540)
1,024
(13,512)
3,459
(13,569)
31.3.22
Company
£000
–
–
–
–
–
31.3.21
Company
£000
(244)
–
–
–
(244)
–
1,146
(38)
1,108
4,540
(1,024)
13,512
(2,134)
14,894
16,002
(1,218)
365
–
(853)
(398)
(794)
338
(924)
(1,778)
(2,631)
150
151
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Notes to the Financial Statements
continued
11. Dividends Paid and Payable
14. Investment Properties
Attributable to equity share capital
Ordinary
Interim paid 2.90p per share (2021: 2.70p)
Prior year final paid 7.40p per share (2020: 6.00p)
Year ended
31.3.22
£000
Year ended
31.3.21
£000
3,547
9,035
12,582
3,274
7,254
10,528
A final dividend of 8.25p, if approved at the AGM on 14 July 2022, will be paid on 29 July 2022 to Shareholders on the register on 24 June 2022.
This final dividend, amounting to £10,092,000, has not been included as a liability as at 31 March 2022, 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 £13,054,000 (2021: £51,128,000).
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:
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
(Gain)/loss on movement in share of joint ventures
Fair value movement on derivative financial instruments
Expense on cancellation of loans
Deferred tax on adjusting items
Earnings/(loss) used for calculations of EPRA earnings/(loss) per share
Year ended
31.3.22
000
122,325
(241)
122,084
662
1,700
Year ended
31.3.21
000
121,266
(282)
120,984
719
1,434
124,446
123,137
£000
88,894
72.8p
71.4p
£000
88,894
(33,266)
(18,473)
–
(820)
(17,996)
5,886
(17,844)
6,381
£000
17,877
14.8p
14.5p
£000
17,877
(18,046)
(5,870)
4,936
767
(2,938)
–
1,075
(2,199)
EPRA earnings/(loss) per share
5.2p
(1.8)p
The earnings/loss used for the calculation of EPRA earnings/(loss) per share includes net rental income and development property profits/losses
but exclude investment and trading property gains.
Group
Book value at 1 April
Additions at cost
Disposals
Letting cost amortisation
Revaluation surplus
Book value at 31 March
Freehold
31.3.22
£000
544,125
164,574
–
(54)
28,262
736,907
Leasehold
31.3.22
£000
196,082
931
–
(172)
5,049
201,890
Investment properties are stated at fair value as at 31 March 2022 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
31.3.22
£000
736,907
15,843
–
Leasehold
31.3.22
£000
201,890
8,993
(2,133)
752,750
208,750
Total
31.3.22
£000
740,207
165,505
–
(226)
33,311
938,797
Total
31.3.22
£000
938,797
24,836
(2,133)
961,500
Freehold
31.3.21
£000
657,261
5,393
(111,883)
(8)
(6,638)
544,125
Freehold
31.3.21
£000
544,125
16,450
–
560,575
Leasehold
31.3.21
£000
162,312
7,756
–
(11)
26,025
196,082
Leasehold
31.3.21
£000
196,082
2,365
(2,147)
196,300
Total
31.3.21
£000
819,573
13,149
(111,883)
(19)
19,387
740,207
Total
31.3.21
£000
740,207
18,815
(2,147)
756,875
Cumulative interest capitalised in respect of the refurbishment of investment properties at 31 March 2022 amounted to £13,102,000 (31 March
2021: £13,102,000). Interest capitalised during the year in respect of the refurbishment of Investment properties amounted to £nil (31 March
2021: £nil).
Investment properties with a total fair value of £930,350,000 (31 March 2021: £729,425,000) 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 2022 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 2022 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 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.
152
153
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Notes to the Financial Statements
continued
A sensitivity analysis was performed to ascertain the impact of a 25 and 50 basis point shift in the equivalent yield and a 5% and 2.5% shift
in ERVs for the wholly owned investment portfolio:
16. Owner Occupied Property, Plant and Equipment
Equivalent yield
+ 50 bps
+ 25 bps
- 25 bps
- 50 bps
ERV
+ 5.00%
+ 2.50%
- 2.50%
- 5.00%
The investment properties have been valued at 31 March 2022 as follows:
Cushman & Wakefield LLP
Directors’ valuation
Group
31.3.22
£000
4.63%
Total change in
portfolio value
%
Total change in
portfolio value
£000
£70.02psf
(13.0)
(6.8)
7.6
16.2
5.6
2.8
(2.8)
(5.5)
Group
31.3.22
£000
961,350
150
961,500
(124,684)
(65,598)
73,419
155,947
53,550
26,703
(26,705)
(53,249)
Group
31.3.21
£000
756,725
150
756,875
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:
Not later than one year
Later than one year but not more than two years
Later than two years but not more than three years
Later than three years but not more than four years
Later than four years but not more than five years
More than five years
The Company has no operating lease arrangements as lessor.
Group
31.3.22
£000
33,357
37,163
28,902
27,380
25,605
94,616
247,023
Group
31.3.21
£000
26,182
23,204
26,220
23,481
23,133
115,145
237,365
Group
Cost at 1 April
Additions at cost
Disposals
Cost at 31 March
Depreciation at 1 April
Provision for the year
Eliminated on disposals
Depreciation at 31 March
Net book amount at 31 March
Leasehold
property and
improvements
31.3.22
£000
Plant and
equipment
31.3.22
£000
7,138
–
–
7,138
2,020
669
–
2,689
4,449
571
68
(84)
555
327
97
(51)
373
182
Leasehold
property and
improvements
31.3.21
£000
Plant and
equipment
31.3.21
£000
7,138
–
–
7,138
1,352
668
–
2,020
5,118
712
155
(296)
571
491
123
(287)
327
244
Total
31.3.22
£000
7,709
68
(84)
7,693
2,347
766
(51)
3,062
4,631
Total
31.3.21
£000
7,850
155
(296)
7,709
1,843
791
(287)
2,347
5,362
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 £3,501,000 (31 March 2021: £4,022,000).
17. Investment in Subsidiaries
Cost at 1 April
Additions
Disposals
Cost at 31 March
Impairment at 1 April
Impaired during the year
Disposals
Impairment at 31 March
Net book amount at 31 March
Group
31.3.22
£000
Group
31.3.21
£000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Company
31.3.22
£000
241,457
7,569
(10,005)
239,021
32,874
5,806
(10,000)
28,680
210,341
Company
31.3.21
£000
250,726
3,641
(12,910)
241,457
42,454
3,329
(12,909)
32,874
208,583
A list of all the Company’s subsidiary undertakings, all of which have been consolidated, are shown in Note 39 to the financial statements.
Helical (OS Holdco) Jersey Limited, a 100% subsidiary of Helical plc, settled £4,900,000 of its intercompany loan with Helical plc by issuing
shares. As at 31 March 2022, this amount is disclosed as “Investment in subsidiaries”, with disclosure being in “Amounts owed from group
undertakings” in the prior year.
154
155
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Notes to the Financial Statements
continued
18. Investment in Joint Ventures
Summarised consolidated Income Statements
Revenue
Gross rental income
Property overheads
Net rental income
Investment
31.3.22
£000
226
226
(130)
96
Gain/(loss) on revaluation of investment properties
18,323
Loss on sale of investment properties
Development property gain/(loss)
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
Profit/(loss) before tax
Tax credit/(charge)
Profit/(loss) after tax
Adjustment for Barts Square economic interest1
Share of results of joint ventures
–
–
18,419
(227)
18,192
(2,124)
(181)
2,142
–
18,029
1,666
19,695
909
20,604
Development
31.3.22
£000
9,269
91
(45)
46
150
–
764
960
(68)
892
(283)
–
–
–
609
(417)
192
(88)
104
Total
31.3.22
£000
9,495
317
(175)
142
18,473
–
764
19,379
(295)
19,084
(2,407)
(181)
2,142
–
18,638
1,249
19,887
821
20,708
Investment
31.3.21
£000
99
99
(112)
(13)
6,445
(553)
–
5,879
(300)
5,579
(560)
(156)
514
2
5,379
(223)
5,156
(767)
4,389
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)
1 This is an adjustment to reflect the impact of the consolidation of a joint venture at its economic interest of 46.0% (2021: 47.0%) rather than its actual ownership interest of 33.3%.
Summarised consolidated balance sheets
Non-current assets
Investment properties
Owner occupied property, plant and equipment
Current assets
Land and developments
Trade and other receivables
Deferred tax
Cash and cash equivalents
Current liabilities
Trade and other payables
Borrowings
Non-current liabilities
Trade and other payables
Borrowings
Lease liability
Deferred tax
Net assets before acquisition costs
Acquisition costs
Net assets
Investment
31.3.22
£000
Development
31.3.22
£000
Total
31.3.22
£000
140,045
40
140,085
8,349
2,527
172
4,474
15,522
1,610
40
1,650
8,349
252
–
3,938
12,539
(1,764)
(10,062)
–
–
(1,764)
(10,062)
(6)
–
–
(297)
(303)
12,122
–
12,122
(408)
(39,585)
(4,744)
(297)
(45,034)
100,511
93
100,604
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
138,435
–
138,435
–
2,275
172
536
2,983
(8,298)
–
(8,298)
(402)
(39,585)
(4,744)
–
(44,731)
88,389
93
88,482
The fair value of the investment properties at 31 March 2022 is as follows:
Book value at 31 March
Lease incentives and letting costs included in trade and other receivables
Head leases capitalised
Fair value at 31 March
Total
31.3.22
£000
140,045
166
(4,391)
135,820
Total
31.3.21
£000
86,817
120
(4,421)
82,516
The Directors’ valuation of land and developments shows a surplus of £nil (31 March 2021: £nil) above book value.
Dividends of £3,381,000 were received from joint venture companies during the year (2021: £10,266,000). 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 2021: £nil).
The Group has two material joint ventures (31 March 2021: 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 gain/(loss)
Gain on revaluation of investment properties
Loss on sale of investment properties
Administrative expenses
Finance costs
Interest capitalised
Lease liability interest
Finance income
Profit before tax
Tax (charge)/credit
Adjustment for Barts Square economic interest1
Profit after tax
Barts LP
Group
31.03.22
£000
20,461
690
(376)
314
1,479
1,112
–
(420)
(739)
–
–
–
1,746
(995)
821
1,572
Charterhouse
Street Group
31.03.22
£000
Other
31.03.22
£000
–
–
–
–
–
35,922
–
(192)
(4,134)
4,285
(362)
–
35,519
(3,135)
–
32,384
–
–
(4)
(4)
167
–
–
(14)
–
–
–
–
149
(32)
–
117
Total
£000
31.03.22
20,461
690
(380)
310
1,646
37,034
–
(626)
(4,873)
4,285
(362)
–
37,414
(4,162)
821
34,073
Our share
31.03.22
£000
9,495
Our share
31.03.21
£000
26,024
317
(175)
142
764
18,473
–
(295)
(2,407)
2,142
(181)
–
18,638
1,249
821
20,708
156
(131)
25
(948)
6,423
(553)
(432)
(1,163)
514
(156)
5
3,715
(596)
(767)
2,352
1 This adjustment reflects the impact of the consolidation of a joint venture at its economic interest of 46.0% (2021: 47.0%) rather than its actual ownership interest of 33.3%.
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
156
157
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Notes to the Financial Statements
continued
Summarised balance sheet
Non-current assets
Investment properties
Owner occupied property, plant and equipment
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
Lease liability
Trade and other payables
Deferred tax
Net assets before acquisition costs
Acquisition costs
Net assets
Barts LP
Group
31.03.22
£000
Charterhouse
Street Group
31.03.22
£000
Other
31.03.22
£000
Total
31.03.22
£000
Our share
31.03.22
£000
Our share
31.03.21
£000
29,140
88
29,228
18,150
1,888
9,121
29,159
–
(5,005)
(5,005)
–
–
–
(272)
(272)
53,110
–
53,110
253,282
–
253,282
–
3,280
1
3,281
–
(15,475)
(15,475)
(79,171)
(9,488)
(800)
(6,594)
(96,053)
145,035
186
145,221
–
–
–
–
34
561
595
–
(46)
(46)
–
–
(16)
–
(16)
533
–
533
282,422
140,045
88
40
282,510
140,085
18,150
5,202
9,683
33,035
–
(20,526)
(20,526)
(79,171)
(9,488)
(816)
(6,866)
(96,341)
198,678
186
198,864
8,349
2,527
4,474
15,350
–
(10,062)
(10,062)
(39,585)
(4,744)
(408)
(125)
(44,862)
100,511
93
100,604
86,817
41
86,858
16,545
1,661
7,781
25,987
(11,455)
(7,098)
(18,553)
(8,014)
(4,584)
(408)
(1,422)
(14,428)
79,864
89
79,953
19. Other Investments
Group
Book value at 1 April
Acquisitions
At 31 March
Total
31.3.22
£000
–
306
306
Total
31.3.21
£000
–
–
–
On 6 August 2021, the Group entered into a commitment of £1,000,000 to invest in the Pi Labs European PropTech venture capital fund (“Fund”)
of which £306,000 was invested during the year. The Fund is focused on investing in the next generation of proptech businesses.
The fair value of the Group’s investment is based on the net asset value of the Fund, representing Level 2 fair value measurement as defined
in IFRS 13 Fair Value Measurement.
20. Land and Developments
Group
At 1 April
Acquisitions and construction costs
Disposals
Reversal of provision
At 31 March
Total
31.3.22
£000
448
2,913
(3,557)
2,285
2,089
Total
31.3.21
£000
852
220
(804)
180
448
The Directors’ valuation of land and developments shows a surplus of £302,000 (31 March 2021: £578,000) above book value. This surplus has
been included in the EPRA net asset value (Note 34).
At 31 March 2022 the Group and the Company had legal interests in the following joint venture companies:
No interest has been capitalised or included in land and developments.
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
Abbeygate Helical (Leisure Plaza) Limited
Abbeygate Helical (C4.1) LLP
Shirley Advance LLP
Haslucks Green Limited
Charterhouse Place Limited
Charterhouse Street Limited
Country of
incorporation
United States
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
United Kingdom
United Kingdom
United Kingdom
Jersey
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Jersey
Class of share
capital held
Proportion held
Group
Proportion held
Company
n/a
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
n/a
Ordinary
n/a
n/a
Ordinary
Ordinary
Ordinary
33%
33%
33%
33%
33%
33%
33%
33%
33%
33%
33%
50%
50%
50%
50%
50%
50%
–
–
–
–
–
–
–
–
–
–
–
50%
50%
–
–
–
–
Nature of
business
Investment
Investment
Investment
Investment
Investment
Investment
Investment
Development
Development
Development
Investment
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 46.0% (2021: 47.0%) to reflect its
expected economic interest in the joint venture.
Land and developments with carrying values totalling £nil (31 March 2021: £nil) were held as security against borrowings.
The Company had £nil (31 March 2021: £nil) of land and developments.
21. Trade and Other Receivables
Due within 1 year
Trade receivables
Amounts owed by joint venture undertakings
Other receivables
Prepayments
Accrued income
Group
31.3.22
£000
18,807
495
267
4,310
24,574
48,453
Group
31.3.21
£000
17,426
427
117
4,597
17,860
40,427
Company
31.3.22
Restated
£000
Company
31.3.21
Restated
£000
Company
31.3.20
Restated
£000
–
28
50
577
–
655
–
9
75
628
–
712
–
151
75
196
–
422
Included within accrued income are lease incentives of £22,965,000 (31 March 2021: £17,179,000).
158
159
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Notes to the Financial Statements
continued
Due after 1 year
Amounts owed by group undertakings
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
31.3.22
£000
–
–
Group
31.3.21
£000
–
–
Group
31.3.22
£000
41,150
1,277
1,716
44,143
4,310
48,453
Company
31.3.22
Restated
£000
405,616
405,616
Group
31.3.21
£000
34,022
1,003
805
35,830
4,597
40,427
Company
31.3.21
Restated
£000
293,223
293,223
Company
31.3.22
£000
405,694
–
–
405,694
577
406,271
Company
31.3.20
Restated
£000
299,893
299,893
Company
31.3.21
£000
293,307
–
–
293,307
628
293,935
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 £14,677,000 of rental deposits at 31 March 2022 (31 March 2021: £12,779,000).
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
31.3.22
£000
45,529
(1,386)
44,143
Group
31.3.21
£000
36,780
(950)
35,830
Company
31.3.22
£000
414,169
(8,475)
405,694
Company
31.3.21
£000
301,637
(8,330)
293,307
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
At 31 March
Receivables from contracts with customers
At 1 April
Additions
Received during the year
At 31 March
Group
31.3.22
£000
268
530
(268)
530
Group
31.3.22
£000
2,505
–
(1,498)
1,007
Group
31.3.21
£000
681
256
(669)
268
Group
31.3.21
£000
181
2,414
(90)
2,505
Company
31.3.22
£000
Company
31.3.21
£000
–
–
–
–
–
–
–
–
Company
31.3.22
£000
Company
31.3.21
£000
–
–
–
–
–
–
–
–
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.
22. Cash and Cash Equivalents
Receivables written-off during the year as uncollectable
705
612
–
–
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.
Cash held at managing agents
Restricted cash
Cash deposits
Group
31.3.22
£000
10,589
3,978
14,240
28,807
Group
31.3.21
£000
3,289
72,878
78,281
154,448
Company
31.3.22
£000
3
81
1,713
1,797
Company
31.3.21
£000
7
81
67,938
68,026
Balance as at 31 March 2020
Net remeasurement of loss allowance
Amounts written off
Amounts recovered
Balance as at 31 March 2021
Net remeasurement of loss allowance
Amounts written off
Amounts recovered
Balance as at 31 March 2022
Group
£000
114
836
–
–
950
(391)
827
–
1,386
Company
£000
–
–
–
–
–
–
–
–
–
Restricted cash is made up of cash held by solicitors and cash in restricted bank accounts.
23. Trade and Other Payables
Trade payables
Social security costs and other taxation
Amounts owed to subsidiary undertakings
Other payables
Accruals
Deferred income
Group
31.3.22
£000
23,122
3,867
–
90
7,418
9,489
43,986
Group
31.3.21
£000
24,194
1,786
–
93
14,023
6,668
46,764
Company
31.3.22
£000
1,117
–
Company
31.3.21
£000
526
–
186,052
143,701
768
822
–
397
1,269
–
188,759
145,893
160
161
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Notes to the Financial Statements
continued
24. Lease Liability
Current lease liability
Non-current lease liability
Group
31.3.22
£000
658
6,271
Group
31.3.21
£000
634
6,929
Company
31.3.22
£000
658
4,082
Company
31.3.21
£000
634
4,740
Included within lease liability are £658,000 (31 March 2021: £634,000) of current and £4,082,000 (31 March 2021: £4,740,000) 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
31.3.22
£000
922
3,689
16,420
21,031
Present value
of minimum
lease payments
31.3.22
£000
892
3,288
2,749
6,929
Interest
31.3.22
£000
(30)
(401)
(13,671)
(14,102)
Minimum
lease
payments
31.3.21
£000
922
3,689
17,342
21,953
Present value
of minimum
lease payments
31.3.21
£000
891
3,283
3,389
7,563
Interest
31.3.21
£000
(31)
(406)
(13,953)
(14,390)
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, EC1 (the lease term is 155 years). The associated assets of £3,501,000 (31 March 2021: £4,022,000) and £2,133,000 (31 March 2021:
£2,147,000) are shown in Note 16 and Note 14, respectively.
25. 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
31.3.22
£000
–
–
100,000
296,633
–
396,633
396,633
Group
31.3.21
£000
–
–
49,705
286,998
–
336,703
336,703
Company
31.3.22
£000
Company
31.3.21
£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 £930,350,000 (31 March 2021: £729,425,000). 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 £39,585,000
(31 March 2021: £19,469,000).
26. Financing and Derivative Financial Instruments
The policies for dealing with liquidity and interest rate risk are noted in our Principal Risks on pages 46 to 55.
Group
31.3.22
£000
396,633
–
Group
31.3.21
£000
336,703
–
396,633
336,703
Due after more than one year
Due within one year
162
The Group has various undrawn committed borrowing facilities. The facilities available at 31 March 2022 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
31.3.22
£000
70,000
–
–
–
–
–
Group
31.3.21
£000
10,000
–
–
190,000
–
–
70,000
200,000
Interest rates – Group
Fixed rate borrowings:
swap rate plus bank margin
swap rate plus bank margin
swap rate plus bank margin
swap rate plus bank margin
swap rate plus bank margin
swap rate plus bank margin
fixed rate plus margin
fixed rate plus margin
Weighted average
Floating rate borrowings
Unamortised finance costs
Total borrowings
%
Expiry
3.180
2.620
2.600
3.510
2.600
2.540
–
–
2.841
3.522
Apr 2024
Aug 2024
Aug 2024
Jun 2026
Jul 2026
Jul 2026
–
–
Jul 2025
May 2025
3.011
May 2025
Group
31.3.22
£000
50,000
50,000
50,000
50,000
50,000
50,000
–
–
300,000
100,000
(3,367)
396,633
%
Expiry
3.030
2.480
2.450
3.370
–
–
3.480
3.210
3.149
4.242
Apr 2024
Aug 2024
Aug 2024
Jun 2026
–
–
Dec 2024
Dec 2024
Jan 2025
Sep 2023
3.343
Jul 2024
Group
31.3.21
£000
50,000
50,000
50,000
50,000
–
–
71,000
9,750
280,750
60,400
(4,447)
336,703
Floating rate borrowings bear interest at rates based on SONIA.
In addition to the fixed rates, borrowings are also hedged by the following financial instruments:
Instrument – Group
Current:
cap
cap
cap
cap
Value
£000
35,000
35,000
35,000
40,000
%
Start
Expiry
1.640
1.650
1.650
1.659
Sep 2021
Oct 2021
Oct 2021
Jan 2020
Jul 2023
Jul 2023
Jul 2023
Jul 2023
At 31 March 2022 the Company had no interest rate swaps, caps or floors (31 March 2021: nil).
Gearing
Total borrowings
Cash
Net borrowings
Group
31.3.22
£000
396,633
(28,807)
367,826
Group
31.3.21
£000
336,703
(154,448)
182,255
Net borrowings excludes the Group’s share of borrowings in joint ventures of £39,585,000 (31 March 2021: 19,469,000) and cash of £4,474,000
(31 March 2021: £7,821,000). All borrowings in joint ventures are secured.
Net assets
Gearing
Group
31.3.22
£000
687,043
54%
Group
31.3.21
£000
608,161
30%
163
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Notes to the Financial Statements
continued
27. Share Capital
Authorised
The authorised share capital of the Company is £39,577,000 divided into ordinary shares of 1p each.
Allotted, called up and fully paid:
122,325,413 (31 March 2021: 121,265,170) ordinary shares of 1p each
212,145,300 deferred shares of 1/8p each
31.3.22
£000
39,577
31.3.21
£000
39,577
31.3.22
£000
1,223
–
1,223
31.3.21
£000
1,213
265
1,478
Shares in issue
31.3.22
Number
Share capital
31.3.22
£000
Shares in issue
31.3.21
Number
Share capital
31.3.21
£000
121,265,710
1,059,703
122,325,413
1,213
119,977,581
10
1,288,129
1,223
121,265,710
1,200
13
1,213
–
–
212,145,300
265
Ordinary shares
At 1 April
Issued share capital
At 31 March
Deferred shares
At 1 April and 31 March
The deferred shares of 1/8p each were cancelled during the year.
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
(2022: £679,300,000, 2021: £600,683,000). The Group continually monitors its gearing level to ensure that it is appropriate. Gearing increased
from 30% to 54% in the year resulting from the acquisition of property and the corresponding drawdown of loan facilities.
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 gave 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. In advance of the Group becoming a REIT from 1 April 2022, this option was taken
on 21 March 2022. As such, there were no deferred shares at 31 March 2022.
28. Share Options
At 31 March 2022 and 31 March 2021 there were no unexercised options over new ordinary 1p shares in the Company.
29. 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 126.
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
2022
Weighted average
award value
359p
324p
324p
362p
355p
Awards
3,639,802
(834,104)
(299,426)
1,094,464
3,600,736
2021
Weighted average
award value
332p
271p
271p
342p
359p
Awards
3,779,873
(930,334)
(482,913)
1,273,176
3,639,802
All awards have an exercise price of £nil (2021: £nil).
The weighted average share price at the date of exercise for the share options exercised during the year was 430.50p (2021: 358.5p).
The PSP awards outstanding at 31 March 2022 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 2022 was £3,960,000 (2021: £3,776,000). These were granted on 2 June 2021.
The inputs into the Black-Scholes and stochastic models of valuation of the PSP awards made in the year to 31 March 2022 were as follows:
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk free rate
Expected dividends
2022
362.0p
–
31%
3 years
0.14%
0.00%
2021
342.0p
–
35%
3 years
(0.04)%
0.00%
2020
362.5p
–
30%
3 years
0.52%
0.00%
The Group recognised a charge of £3,223,000 (2021: £2,031,000) 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 for Directors.
30. 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.
At 1 April 2020
Financing cash flows
Other changes
At 31 March 2021
Financing cash flows
Other changes
At 31 March 2022
Group
£000
348,184
(12,661)
1,180
336,703
58,850
1,080
396,633
Company
£000
5,000
(5,000)
–
–
–
–
–
Financing cash flows comprise borrowings drawn down and repaid in the Consolidated and Company Cash Flow Statements. Other changes
include the rolling up of interest and the change in unamortised refinancing costs.
164
165
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Notes to the Financial Statements
continued
31. Contingent Liabilities
The Company has entered into cross guarantees in respect of the banking facilities of its subsidiaries. These are not considered to have
a material value.
There were no other contingent liabilities at 31 March 2022 for the Group or the Company (31 March 2021: £nil).
32. Capital Commitments
The Group has a commitment of £nil (31 March 2021: £4,400,000) in relation to development contracts which are due to be completed in
the year to March 2023. A further £13,100,000 (31 March 2021: £45,600,000) relates to the Group’s share of commitments in joint ventures.
33. Post Balance Sheet Events
In May 2022, The Group exchanged contracts for the sale of Trinity, Manchester for £34,550,000.
34. 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
Diluted net assets
Adjustments:
surplus on fair value of stock
fair value of fixed rate loan
EPRA net disposal value
Number
of shares
000
122,325
pence
Group
31.3.22
£000
687,043
–
687,043
122,325
562
662
1,657
Group
31.3.21
£000
608,161
(265)
607,896
Number
of shares
000
121,266
121,266
718
1,519
687,043
124,644
551
607,896
123,503
(10,565)
503
302
73,155
750,438
(36,656)
(503)
713,279
Group
31.3.22
£000
687,043
302
–
124,644
602
124,644
572
Number
of shares
000
124,644
pence
551
7,431
18,348
578
56,877
691,130
(24,862)
(7,605)
658,663
Group
31.3.21
£000
607,896
578
(9,622)
123,503
123,503
Number
of shares
000
123,503
pence
501
492
560
533
pence
492
687,345
124,644
551
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 sales of asset owning corporate vehicles, rather than direct asset sales.
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 2022. One of the loans held by the Group in the prior year was at a fixed rate and therefore not at fair value. The adjustment of
£9,622,000 as at 31 March 2021 was the increase from book to fair value.
35. Related Party Transactions
At 31 March 2022 and 31 March 2021 the following amounts were due from the Group’s joint ventures:
Charterhouse Street Limited
Barts Square companies
Shirley Advance LLP
Old Street Holdings LP
31.3.22
£000
405
79
8
3
31.3.21
£000
400
16
8
3
An accounting and corporate services fee of £50,000 (2021: £50,000) was charged by the Group to the Barts Square companies. In addition,
a development management, accounting and corporate services fee of £1,380,000 (2021: £850,000 ) was charged by the Group to the
Charterhouse Place Limited group.
All balances are repayable on demand. No provisions have been recognised in respect of amounts owed from joint ventures.
At 31 March 2022 and 31 March 2021 there were the following balances between the Company and its subsidiaries:
Amounts due from subsidiaries
Amounts due to subsidiaries
Management charges receivable
Distributions from subsidiaries and joint ventures
31.3.22
£000
405,616
186,052
31.3.22
£000
972
20,893
31.3.21
£000
293,223
143,701
31.3.21
£000
1,992
60,415
Management charges receivable relate to the performance of management services for its subsidiaries.
During the year Helical plc issued 1,059,703 shares at a value of £4,620,000 (2021: 1,288,129 shares at a value of £4,481,000) to satisfy the
obligation of its subsidiary, Helical Services Limited, in relation to Performance Share awards and Deferred Bonus awards.
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 21. Amounts owed to subsidiaries by the
Company are identified in Note 23.
The Group considers that key management personnel are the Directors. The compensation paid or payable to key management (including
associated Employer’s NIC) is:
Salaries and other short-term employee benefits
Value of share awards
The total dividends paid to Directors of the Group in the year were £432,258 (2021: 374,639).
31.3.22
£000
3,557
3,936
7,493
31.3.21
£000
3,347
2,785
6,132
166
167
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Notes to the Financial Statements
continued
36. 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
These financial assets are included in the Balance Sheet within the following headings:
Balance Sheet
Corporation tax receivable
Trade and other receivables, including amounts due to group undertakings
Cash and cash equivalents
Derivative financial asset
Total financial assets
Group
31.3.22
£000
73,288
11,104
84,392
Group
31.3.22
£000
338
44,143
28,807
11,104
84,392
Group
31.3.21
£000
190,278
171
190,449
Group
31.3.21
£000
–
35,830
154,448
171
190,449
Company
31.3.22
£000
407,491
–
Company
31.3.21
£000
361,333
–
407,491
361,333
Company
31.3.22
£000
–
405,694
1,797
–
Company
31.3.21
£000
–
293,307
68,026
–
407,491
361,333
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 their fair value.
Financial liabilities
Fair value through the Profit or Loss
Measured at amortised cost
Total financial liabilities
The financial liabilities are included in the Balance Sheet within the following headings:
Trade and other payables
Borrowings – non-current
Lease liability
Derivative financial instruments
Total financial liabilities
Group
31.3.22
£000
572
434,158
434,730
Group
31.3.22
£000
30,630
396,633
6,929
538
Group
31.3.21
£000
7,635
383,198
390,833
Group
31.3.21
£000
38,966
336,703
7,563
7,601
Company
31.3.22
£000
–
193,499
193,499
Company
31.3.22
£000
188,759
–
4,740
–
Company
31.3.21
£000
–
151,267
151,267
Company
31.3.21
£000
145,893
–
5,374
–
434,730
390,833
193,499
151,267
The carrying value of trade and other payables and borrowings is not deemed to be materially different from the fair value as at 31 March 2022.
During the year the Group repaid a fixed rate loan whose fair value was £9,622,000 greater than its carrying value as at 31 March 2021. 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 36); and
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
31.3.22
£000
925
–
9,641
10,566
Group
31.3.21
£000
115
(910)
(6,635)
(7,430)
Company
31.3.22
£000
Company
31.3.21
£000
–
–
–
–
–
–
–
–
The Group’s movement in the fair value of the derivative financial instruments in the year was a gain of £17,996,000 (2021: £2,938,000) due
to interest rate caps, floors and swaps.
Credit Risk
Credit risks arise from the possibility that customers may not be able to settle their obligations as agreed. To manage this risk the Group
periodically assesses the financial reliability of customers, taking into account their financial position, past experience and other factors.
It is Group policy to assess the financial viability of potential tenants where their rent roll is individually significant before entering into lease
agreements. This review involves the latest available set of financial statements, other publicly available financial information and management
accounts where appropriate. The covenant strength of each tenant is determined based on this information and a deposit or guarantee is
sought if necessary. The Group’s tenants are spread across a wide variety of industries, reducing the Group’s risk to any individual industry.
The Group works closely with its agents, who advise where a loss allowance is required for individual tenants, based on their credit control
procedures.
Credit risk also exists due to cash and cash equivalents and deposits with banks and other financial institutions. The cash is held with reputable
banking institutions and in client accounts with solicitors and managing agents and therefore credit risk is considered low.
As at 31 March 2022 the Group had total credit risk exposure, excluding cash, of £44,481,000, all of which is financial assets held at amortised
cost. The quantitative disclosures of trade and other receivables credit risk is shown in Note 21.
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.
168
169
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Notes to the Financial Statements
continued
Liquidity Risk
Liquidity risk is defined as the risk that the Group would not be able to settle or meet its obligations on time or at a reasonable price.
Liquidity and funding risks, related processes and policies are overseen by management.
The Group manages its liquidity risk on a consolidated basis based on business needs, tax, capital or regulatory considerations, if applicable,
and through numerous sources of finance in order to maintain flexibility. Management monitors the Group’s net liquidity position through rolling
forecasts on the basis of expected cash flows. The Group’s cash and cash equivalents are held with major regulated financial institutions and
the Directors regularly monitor the financial institutions that the Group uses to ensure its exposure to liquidity risk is minimised.
For further information on debt facilities, see Notes 25 and 26.
The maturity profile of the Group’s contracted financial liabilities is as follows:
Payable within 3 months
Payable between 3 months and 1 year
Payable between 1 and 3 years
Payable after 3 years
Total contracted liabilities
Group
31.3.22
£000
35,313
13,261
26,828
400,404
475,806
Group
31.3.21
£000
39,546
11,655
70,883
294,870
416,954
Company
31.3.22
£000
188,963
614
1,637
3,068
Company
31.3.21
£000
144,558
614
1,637
6,955
194,281
153,764
At 31 March 2022 the Group had £70,000,000 (31 March 2021: £200,000,000) of undrawn borrowing facilities, £31,000,000 (31 March 2021:
£28,080,000) of uncharged property assets and cash balances of £28,807,000 (31 March 2021: £154,448,000). 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 26.
In the year to 31 March 2022, if interest rates had moved by 0.5%, this would have resulted in the following movement to net profits and equity
due to movements in interest charges and mark-to-market valuations of derivatives.
0.5% increase – increase in net results and equity
0.5% decrease – decrease in net results and equity
Group impact
on results
31.3.22
£000
5,728
(5,704)
Group impact
on equity
31.3.22
£000
Company impact
on results
31.3.22
£000
Company impact
on equity
31.3.22
£000
5,728
(5,704)
169
(169)
169
(169)
Foreign Currency Exchange Risk
The Group and Company have no material exposure to movements in foreign currency rates.
37. Restatement
During the year, the Group received a letter from the Financial Reporting Council (“FRC”) concerning its review of the Group’s Annual Report
and Accounts for the year end 31 March 2021. The FRC highlighted the requirement to present amounts owed from subsidiary undertakings
as current only where they are expected to be received within twelve months or within the Company’s normal operating cycle. In response,
a review of the relevant items in the Company Balance Sheet was undertaken and it was concluded that the amounts owed from subsidiary
undertakings should be presented as non-current assets and the prior year Company Balance Sheet restated accordingly. The restatement
has not impacted the Net Assets of the Company or its profit for the year. The change in presentation has no impact on the results of the Group.
The review conducted by the FRC was based solely on the Group’s published 2021 Annual Report and Accounts and does not provide any
assurance that the Report and Accounts are correct in all material respects.
Company
Non-current assets
Amounts owed by group undertakings
Current assets
Trade and other receivables
Company
Non-current assets
Amounts owed by group undertakings
Current assets
Trade and other receivables
As previously
reported
31.3.21
£000
Adjustment
£000
Restated
balance
31.3.21
£000
–
293,223
293,223
293,935
(293,223)
712
As previously
reported
31.3.20
£000
Adjustment
£000
Restated
balance
31.3.20
£000
–
299,893
299,893
300,315
(299,893)
422
38. Principal Accounting Policies
Basis of Consolidation
The Group Financial Statements consolidate those of Helical plc (the “Company”) and all of its subsidiary undertakings (together the “Group”)
drawn up to 31 March 2022. 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 is 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.
Service charge income
Service charge income relates to expenditure that is directly recoverable from tenants and is recognised as revenue in the period to which it
relates.
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.
170
171
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Notes to the Financial Statements
continued
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 110 to 131. 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.
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.
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.
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.
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.
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.
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.
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 associated with the financial asset. 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.
172
173
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Notes to the Financial Statements
continued
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.
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.
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:
Significant Judgements
The key area is discussed below:
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.
• 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).
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.
Key Sources Of Estimation Uncertainty
The key area is discussed below:
Further information on the categorisation of financial instruments can be found in Note 36.
• 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.
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.
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.
174
175
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Notes to the Financial Statements
continued
39. Subsidiary and Related Undertakings
The Company’s subsidiary and related undertakings are listed below. Except where otherwise indicated all undertakings are incorporated,
registered and operate in the United Kingdom at 5 Hanover Square, London, W1S 1HQ.
The share capital of each of the companies, where applicable, is comprised of ordinary shares unless otherwise stated.
Direct/Indirect
Ultimate %
Indirect
Indirect
Direct
Direct
Indirect
Direct
Indirect
Indirect
Direct
Direct
Direct
Indirect
Direct
Indirect
Direct
Indirect
Direct
Direct
Direct
Indirect
Direct
Indirect
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%
Company
ACTIVE SUBSIDIARIES
207 OLD STREET UNIT TRUST 1
211 OLD STREET UNIT TRUST 1
AYCLIFFE & PETERLEE DEVELOPMENT COMPANY LIMITED
AYCLIFFE & PETERLEE INVESTMENT COMPANY LIMITED
CPP INVESTMENTS LIMITED
EMBANKMENT PLACE (LP) LIMITED 4
FARRINGDON EAST (JERSEY) LIMITED 1
FPM 100 NEW BRIDGE STREET LIMITED
G2 ESTATES LIMITED
HB SAWSTON NO 3 LIMITED
HELICAL BICYCLE 1 LIMITED
HELICAL BICYCLE 2 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 (WHITECHAPEL) LIMITED
HELICAL BAR (DRURY LANE) LIMITED
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
176
Company
ACTIVE 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
OBC DEVELOPMENT MANAGEMENT LIMITED
SHIRLEY ADVANCE LLP
CHARTERHOUSE PLACE LIMITED
CHARTERHOUSE STREET LIMITED2
DORMANT SUBSIDIARIES AND JOINT VENTURES
HB SAWSTON NO. 1 LIMITED
HB SAWSTON NO. 2 LIMITED
HB SAWSTON NO. 4 LIMITED
HELICAL (HAILSHAM) LIMITED
HELICAL (SEVENOAKS) LIMITED
HELICAL (WEST LONDON) LIMITED
HELICAL BAR (CITY INVESTMENTS) LIMITED
HELICAL BAR DEVELOPMENTS (SOUTH EAST) LIMITED
HELICAL BAR LIMITED
HELICAL BAR TRUSTEES LIMITED
HELICAL GROUP LIMITED
HELICAL REGISTRARS LIMITED
HGCI (HOLDCO) LIMITED
HGCI INTERMEDIATE 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
BAYLIGHT DEVELOPMENTS LIMITED
HELICAL (SHEPHERDS) LIMITED
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Registered offices:
1 1 Waverley Place, Union Street, St Helier, Jersey JE4 8SG.
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.
Direct/Indirect
Ultimate %
Direct
Direct
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Direct
Direct
Direct
Indirect
Direct
Direct
Indirect
Direct
Direct
Direct
Direct
Direct
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
50%
50%
33%
33%
33%
33%
33%
33%
33%
33%
33%
50%
33%
50%
50%
50%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%**
33%
33%
33%
100%**
75%
100%
100%
177
Financial StatementsHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Appendix 1 – See-through analysis
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
31.3.22
£000
Year ended
31.3.21
£000
35,324
317
35,641
(169)
(4,069)
(175)
31,228
28,007
156
28,163
(232)
(2,810)
(131)
24,990
See-Through Net Development Property Profits/(Losses)
Helical’s share of development property profits/(losses) 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 profit/(loss)
Reversal of provision/(provision)
– subsidiaries
See-through development property profits/(losses)
Year ended
31.3.22
£000
Year ended
31.3.21
£000
3,519
764
4,283
2,285
6,568
678
(948)
(270)
(82)
(352)
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
31.3.22
£000
33,311
18,473
51,784
(45)
–
(45)
51,739
Year ended
31.3.21
£000
19,387
6,423
25,810
(1,341)
(553)
(1,894)
23,916
See-Through Administration Expenses
Helical’s share of the administration expenses incurred in subsidiaries and joint ventures is shown in the table below:
Administration expenses
Total administration expenses
– subsidiaries
– joint ventures
Performance related awards, including NIC
– subsidiaries
Total performance related awards, including NIC
See-through administration expenses
Year ended
31.3.22
£000
Year ended
31.3.21
£000
9,598
295
9,893
7,170
7,170
9,276
432
9,708
5,140
5,140
17,063
14,848
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 and overdrafts
Total interest payable on bank loans and overdrafts
Other interest payable and similar charges
Interest capitalised
Total finance costs
Interest receivable and similar income
See-through net finance costs
– subsidiaries
– joint ventures
– subsidiaries
– joint ventures
– joint ventures
– subsidiaries
– joint ventures
Year ended
31.3.22
£000
Year ended
31.3.21
£000
10,169
2,407
12,576
9,065
181
(2,142)
19,680
(6)
–
10,697
1,319
12,016
3,382
–
(514)
14,884
(58)
(5)
19,674
14,821
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
– subsidiaries
– joint ventures
– subsidiaries
– joint ventures
Total land and development property
Land and development property surplus
– subsidiaries
Total land and development property at fair value
See-through property portfolio
31.3.22
£000
961,500
135,820
1,097,320
2,089
8,349
10,438
302
10,740
1,108,060
31.3.21
£000
756,875
82,516
839,391
448
16,545
16,993
578
17,571
856,962
178
179
Additional InformationHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Appendix 1 – See-through analysis
continued
Appendix 2 – Total Accounting Return and Total Property Return
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:
Total Accounting Return
Gross borrowings more than one year
– subsidiaries
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
Total Cash and cash equivalents
See-through net borrowings
See-Through Gearing and Loan to Value
– joint ventures
– joint ventures
– subsidiaries
– joint ventures
See-through property portfolio
See-through net borrowings
Net assets
See-through gearing
See-through loan to value
31.3.22
£000
396,633
396,633
–
39,585
39,585
(28,807)
(4,474)
(33,281)
402,937
31.3.22
£000
1,108,060
402,937
687,043
58.6%
36.4%
31.3.21
£000
336,703
336,703
11,455
8,014
19,469
(154,448)
(7,781)
(162,229)
193,943
31.3.21
£000
856,962
193,943
608,161
31.9%
22.6%
Brought forward IFRS net assets
Carried forward IFRS net assets
Increase in IFRS 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 profits/(losses)
See-through revaluation surplus
See-through net loss on sale of investment properties
Total Property Return
Year ended
31.3.22
£000
608,161
687,043
78,882
12,582
91,464
15.0%
Year ended
31.3.22
£000
658,663
713,279
54,616
12,582
67,198
10.2%
Year ended
31.3.21
£000
598,689
608,161
9,472
10,528
20,000
3.3%
Year ended
31.3.21
£000
640,424
658,663
18,239
10,528
28,767
4.5%
Year ended
31.3.22
£000
Year ended
31.3.21
£000
31,228
6,568
51,784
(45)
89,535
24,990
(352)
25,810
(1,894)
48,554
180
181
Additional InformationHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Appendix 3 – Five year review
Appendix 4 – Property portfolio
London Portfolio – Investment Properties
Property
Completed properties
The Warehouse & Studio, The Bower, EC1
The Tower, The Bower, EC1
The Loom, E1
Kaleidoscope, EC1
25 Charterhouse Square, EC1
55 Bartholomew, EC1
The Power House, W4
Development pipeline
33 Charterhouse Street, EC1
100 New Bridge Street, EC4
Description
Multi-let office building
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
Office development
Single-let office building
Area sq ft
(NIA)
151,439
182,193
108,600
88,581
42,921
10,976
21,268
605,978
205,369
167,026
978,373
Vacancy rate at
31.3.22
%
Vacancy rate at
31.3.21
%
0.0
5.3
20.1
0.0
4.4
23.1
0.0
6.9
n/a
0.0
6.7
0.0
0.0
14.8
0.0
26.0
67.2
0.0
5.8
n/a
n/a
10.5
London Portfolio – Development Properties
Address
Barts Square, EC1
Manchester Offices
Description
Area
sq ft
(NIA)
Unsold
apartments at
31.3.22
Unsold
apartments at
31.3.21
236 Residential apartments and 8 retail/leisure units
216,717
14
28
Address
Trinity
Description
Multi-let office building
Area
sq ft
(NIA)
Vacancy rate at
31.3.22
%
Vacancy rate at
31.3.21
%
58,533
23.9
54.1
Income Statements
Revenue
Net rental income
Development property profit/(loss)
Reversal of provisions/(provisions)
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
Dividend per ordinary share declared
EPRA earnings/(loss) per ordinary share
EPRA net tangible assets per share
* EPRA net asset value.
Year ended
31.3.22
£000
51,146
31,086
3,519
2,885
20,708
28
57,626
(45)
33,311
-
(9,598)
(7,170)
(19,234)
6
17,996
–
–
72,892
16,002
88,894
31.3.22
£000
961,500
2,089
135,820
8,349
302
1,108,060
367,826
35,111
402,937
687,043
713,279
10.30p
11.15p
5.2p
572p
Year ended
31.3.21
£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
Year ended
31.3.20
£000
Year ended
31.3.19
£000
44,361
27,838
2,076
1,198
13,396
88
44,596
(1,272)
38,351
–
(10,524)
(6,191)
(16,100)
1,345
(7,651)
468
8
43,030
(4,313)
38,717
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
Year ended
31.3.18
£000
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
31.3.18
£000
802,134
6,042
22,623
76,474
2,328
909,601
325,121
37,733
362,854
533,894
561,644*
8.70p
9.50p
(7.0)p
468p*
182
183
Additional InformationHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022
Appendix 5 – EPRA performance measures
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
31.3.22
5.2p
31.3.21
(1.8)p
EPRA Vacancy Rate
ERV of vacant space
ERV of total portfolio
EPRA Vacancy Rate
EPRA Cost Ratios
Administrative expenses
EPRA NTA
EPRA NAV
EPRA NDV/EPRA NNNAV
EPRA NIY
EPRA Topped Up NIY
EPRA Vacancy Rate
EPRA Cost Ratios
(including direct vacancy costs)
EPRA Cost Ratios
(excluding direct vacancy costs)
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.
Administrative and operating costs (including vacancy costs)
divided by the gross rental income.
Administrative and operating costs (excluding vacancy costs)
divided by the gross rental income.
34
34
34
EPRA LTV
Debt divided by market value of the property
The note references provide the calculation of the associated measure. Other measures are calculated as follows:
EPRA Net Initial Yield and EPRA Topped Up Net
Initial Yield
Investment property at fair value
– subsidiaries
– joint ventures
Less:
Property under construction
– joint ventures
Undeveloped land
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 uplift
Topped up annualised net rents
EPRA Topped Up NIY
572p
533p
Property overheads (including ground rents payable)
543p
551p
514p
485p
3.50%
3.21%
4.45%
4.89%
4.59%
7.89%
53.26%
60.03%
49.24%
36.90%
57.20%
24.02%
31.3.22
£000
961,500
135,820
(122,250)
(100)
974,970
66,298
1,041,268
36,423
3.50%
9,906
46,329
4.45%
31.3.21
£000
756,875
82,516
(69,250)
(100)
770,041
52,363
822,404
26,413
3.21%
11,322
37,735
4.59%
Head rents payable
Development management fees
Share of joint ventures’ expenses
EPRA costs including direct vacancy costs
Direct vacancy costs
EPRA costs excluding direct vacancy costs
Gross rental income
Head rents payable
Share of joint ventures’ rental income less head rents
Adjusted gross rental income
EPRA cost ratio including direct costs
EPRA cost ratio excluding direct costs
EPRA LTV
Borrowings
Net (receivables)/payables
Cash
Net debt
Investment properties
Net receivables
Total property value
LTV
– subsidiaries
– joint ventures
– subsidiaries
– joint ventures
– subsidiaries
– joint ventures
– subsidiaries
– joint ventures
– stock
– subsidiaries
– joint ventures
Below is a table setting out in greater detail the types of capital expenditure made by the Group during the year:
Acquisitions
Existing portfolio
Total capital expenditure
31.3.22
£000
2,854
58,419
4.89%
31.3.22
£000
16,768
4,238
(169)
(2,239)
295
18,893
(1,425)
17,468
35,324
(169)
317
35,472
53.3%
49.2%
31.3.22
£000
396,633
39,585
–
7,535
(28,807)
(4,474)
410,472
961,500
135,820
10,740
4,467
–
1,112,527
36.90%
31.3.21
£000
3,371
42,720
7.89%
31.3.21
£000
14,416
3,042
(232)
(892)
432
16,766
(790)
15,975
28,007
(232)
156
27,931
60.0%
57.2%
31.3.21
£000
336,703
19,469
6,337
5,437
(154,448)
(7,781)
205,717
756,875
82,516
17,174
–
–
856,565
24.02%
Year ended
31.3.22
£000
160,000
5,520
165,520
Year ended
31.3.21
£000
–
36,030
36,030
There was one (2021: none) new investment property purchased during the year, 100 New Bridge Street, EC4. All of the expenditure on the
existing portfolio was made on the London portfolio.
184
185
Additional InformationHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Glossary
C
Capital value (psf)
The open market value of the property divided by the area of the
property in square feet.
Company or Helical or Group
Helical plc and its subsidiary undertakings.
Compound Annual Growth Rate (CAGR)
The annualised average growth rate.
D
Diluted figures
Reported amounts adjusted to include the effects of potential shares
issuable under the Director and employee remuneration schemes.
E
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 of financial instruments, and deferred tax on capital
allowances and on investment properties revaluation but including
the fair value of trading and development properties in accordance
with the best practice recommendations of EPRA.
EPRA net disposal value per share
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 34).
EPRA net reinstatement value per share
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 34).
EPRA net tangible assets per share
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 34).
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.
Estimated rental value (ERV)
The market rental value of lettable space as estimated by the Group’s
valuers at each Balance Sheet date.
EPRA total accounting return
The growth in EPRA net tangible asset value of the Company plus
dividends paid in the year, expressed as a percentage of EPRA
net tangible asset value at the start of the year (see Appendix 2).
G
Gearing
Total borrowings less short-term deposits and cash as a percentage
of net assets.
I
Initial yield
Annualised net passing rents on investment properties as
a percentage of their open market value.
L
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.
M
MSCI INC. (MSCI IPD)
MSCI INC. is a company that produces independent benchmarks
of property returns using its Investment Property Databank (IPD).
N
Net asset value per share (NAV)
Net assets divided by the number of ordinary shares at the Balance
Sheet date (see Note 34).
P
Passing rent
The annual gross rental income being paid by the tenant.
R
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.
S
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).
T
Total Accounting Return
The growth in the net asset value of the Company plus dividends paid
in the year, expressed as a percentage of net asset value at the start
of the year (see Appendix 2).
Total 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 year expressed
as a percentage of the share price at the beginning of the year.
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.
U
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.
W
WAULT
The total contracted rent up to the first break, or lease expiry date,
divided by the contracted annual rent.
186
187
Additional InformationHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Shareholder information
Financial calendar and advisors
Website
The report and financial statements, a list of properties held by the
Group, Company presentations, press releases, the financial calendar
and other information on the Group are available on our website at
www.helical.co.uk
Registrar
All general enquiries concerning holdings of ordinary shares in
Helical plc should be addressed to the Company’s Registrar:
Dividends for Shareholders resident outside the UK
Instead of waiting for a sterling cheque to arrive by mail, you can ask
us to send your dividends direct to your bank account. For
information, please contact the Company’s Registrar.
Dividend Reinvestment Plan (DRIP)
The Company offers Shareholders the option to participate in a DRIP.
This enables Shareholders to reinvest their cash dividends in Helical
plc shares.
Link Group
Link Group, 10th Floor, Central Square, 29 Wellington Street, Leeds,
LS1 4DL
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.
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. Link 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.
* 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 on the Financial Calendar page in the “Investors” section
of the website 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 2022
were as follows:
Dividend
2020-21 Final
2021-22 Interim 3 December
Record date
2021
25 June
Payment date
2021
26 July
31 December
Amount
7.40p
2.90p
Dividend payment dates in 2022 will be as follows:
Dividend
2021-22 Final
2022-23 Interim December
Record date
2022
24 June
Payment date
2022
29 July
December
Amount
8.25p
TBC 1
1 The amount of the 2022–23 interim dividend will be announced in November 2022.
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 0371 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
Calendar 2022–2023
2022
23 June 2022
Ex-dividend date for final ordinary dividend
24 June 2022
Record date for final ordinary dividend
8 July 2022
14 July 2022
29 July 2022
Last day for DRIP elections
Annual General Meeting
Final ordinary dividend payable
November 2022 1 Half Year Results and interim ordinary dividend announced
December 2022 2 Ex-dividend date for interim ordinary dividend
December 2022 2 Registration qualifying date for interim ordinary dividend
2023
May 2023
Announcement of Full Year Results to 31 March 2023
Notes
1 The announcement date of the Half Year Results will be confirmed in October 2022.
2 Dates for the potential interim dividend will be confirmed in the Half Year Results
Announcement.
Advisors
Registrars
Bankers
Link Group
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
Financial advisors
Lazard & Co., Ltd
Joint stockbrokers
Peel Hunt LLP
Numis Securities Limited
Auditors
Deloitte LLP
Corporate solicitors
Clifford Chance LLP
Mishcon de Reya LLP
Contact details
Registered Office
Helical plc
Registered in England
and Wales No.156663
5 Hanover Square
London W1S 1HQ
T: 020 7629 0113
F: 020 7408 1666
E: reception@helical.co.uk
www.helical.co.uk
188
189
Additional InformationHelical plc — Annual Report and Accounts 2022Helical plc — Annual Report and Accounts 2022 Notes
190
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Helical plc — Annual Report and Accounts 2022
Helical plc
Registered in England and Wales No.156663
Registered Office
5 Hanover Square
London W1S 1HQ
T: 020 7629 0113
E: reception@helical.co.uk
www.helical.co.uk
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Helical plc
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