HELICAL PLC
Annual Report and Accounts 2024
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.
Strategic Report
2
Highlights
4
Chairman’s statement
6
Chief Executive’s statement
10
Our market
14
Our investment case
16
Strategy
20
Working in partnership
22
Business model
24
Key performance indicators
28
Our portfolio
39
The property portfolio in numbers
42
Financial review
48
Risk management
60
Sustainability at Helical
88
Our stakeholders – Section 172(1) Statement
Governance
100
Chairman’s governance review
102
Board of Directors
106
Corporate Governance Report
112
Nominations Committee Report
118
Audit and Risk Committee Report
122
Directors’ Remuneration Report
142
Report of the Directors
144
Directors’ responsibilities statement
Financial Statements
145
Independent Auditor’s Report
to the Members of Helical plc
149
Consolidated Income Statement
150
Consolidated Balance Sheet
151
Company Balance Sheet
152
Consolidated and Company Cash Flow Statement
153
Consolidated and Company Statements
of Changes in Equity
154
Notes to the Financial Statements
Additional information
184
Appendix 1 – See-through analysis
187
Appendix 2 – Total Accounting Return
and Total Property Return
188
Appendix 3 – Five year review
189
Appendix 4 – Property portfolio
190
Appendix 5 – EPRA performance measures
192
Glossary
194
Shareholder information
195
Financial calendar and advisors
CGI
helical.co.uk
Highlights
1 See Glossary for definition of terms. The “see-through” performance measures are designed
to give additional information about the Group’s share of assets and liabilities, income and
expenses in subsidiaries and joint ventures. The financial statements have been prepared in
accordance with International Accounting Standards (“IAS”) in conformity with the Companies
Act 2006. In common with usual practice in our sector, alternative performance measures
have also been provided to supplement IFRS, including measures which are based on the
recommendations of the European Public Real Estate Association (“EPRA”).
2 See Note 34.
Good letting momentum with progress at our “best-in-class” assets
• During the year we completed 13 new lettings, comprising 136,660
sq ft (our share: 86,237 sq ft), delivering contracted rent of £11.7m
per annum (our share: £7.1m), 1.1% above 31 March 2023 ERVs.
–At The JJ Mack Building, EC1, we let 100,847 sq ft at a 1.8%
premium to 31 March 2023 ERVs. Post year end, we let the ground
floor office space to J Sainsbury and have placed the fourth floor,
10th floor and remaining ground floor retail unit under offer. On
completion of these lettings 90% of the building will be let at an
average office rent of £95, with just one floor remaining.
–At The Bower, EC1, we forfeited the leases for six floors let to
WeWork at The Tower, taking back control of the space. Since then
we have re-let one floor back to them until June 2024 and have
entered into a management agreement for infinitSpace to provide
serviced offices on two floors. The remaining vacant fourth, fifth
and sixth floors are being refurbished to be let on a Cat A+ basis.
Sales
• Shortly before the year end, we exchanged on the £43.5m sale of
25 Charterhouse Square, EC1, with completion of the sale in April 2024.
• As announced a few days ago, we entered into a joint venture
arrangement for the redevelopment of 100 New Bridge Street, EC4,
selling a 50% interest in the site for £55m structured on a preferred
equity basis to a vehicle led by Orion Capital Managers. Simultaneous
to the joint venture being signed, the parties entered into a
development financing arrangement with NatWest and an institutional
lender, and a building contract with Mace to deliver the scheme.
Portfolio valuation
• Primarily driven by the impact of the higher interest rate environment
on market sentiment, there was an outward yield adjustment of 95bps
in the year to 31 March 2024, increasing the true equivalent yield for
the portfolio to 6.34% (31 March 2023: 5.39%) and reducing the
investment portfolio valuation to £660.6m (31 March 2023: £839.5m).
Highlights 2024
Operational highlights
Financial highlights
• The JJ Mack Building, EC1
received its final BREEAM
certificate, achieving an
Outstanding with a score of
96.4%, making it the highest
rated commercial building in
the UK.
• Photovoltaic panels installed at
The Bower, EC1 generating over
37,000 kWhs of energy once
fully commissioned, for the
exclusive use of our building.
• Retention of EPRA
Sustainability BPR Gold rating
and CDP B rating with a
GRESB 4 Green Star status.
Sustainability highlights
Earnings and dividends
• IFRS loss of £189.8m (2023:
£64.5m).
• See-through Total Property
Return1 of -£162.7m (2023:
-£51.4m):
–Group’s share1 of net rental
income decreased 23.8%
to £25.5m (2023: £33.5m).
–Net loss on sale and
revaluation of investment
properties of -£188.6m (2023:
-£88.1m).
–Development profits of £0.4m
(2023: £3.2m).
• Total Property Return, as
measured by MSCI, of -20.3%,
compared to the MSCI Central
London Offices Total Return
Index of -5.7%.
• IFRS basic loss per share
of 154.6p (2023: 52.6p).
• EPRA earnings per share1
of 3.5p (2023: 9.4p).
• Final dividend proposed of
1.78p per share (2023: 8.70p).
• Total dividend for the year
of 4.83p (2023: 11.75p).
Balance Sheet
• Net asset value down 34.1%
to £401.1m (31 March 2023:
£608.7m).
• Total Accounting Return1 on
IFRS net assets of -31.7%
(2023: -9.4%).
• Total Accounting Return1 on
EPRA net tangible assets of
-31.4% (2023: -12.1%).
• EPRA net tangible asset value
per share1 down 32.9% to 331p
(31 March 2023: 493p).
• EPRA net disposal value per
share1 down 33.3% to 327p
(31 March 2023: 490p).
Financing
• See-through loan to value1
increased to 39.5% (31 March
2023: 27.5%) with a pro-forma
LTV2, post year-end sales,
of 28.7%.
• See-through net borrowings1
of £261.6m (31 March 2023:
£231.4m), pro-forma £163.8m.
• Average maturity of the Group’s
share1 of secured debt of 2.1 years
(31 March 2023: 2.9 years).
• Change in fair value of
derivative financial instruments
charge of £5.6m (2023: credit
of £12.8m).
• See-through average cost of
secured facilities1 reduced to
2.9% (31 March 2023: 3.4%).
• Group’s share1 of cash and
undrawn bank facilities of
£115.5m (31 March 2023:
£244.2m).
3.5p
EPRA earnings per share¹
2023: 9.4p
See-through loan to value1 increased
to 39.5% (31 March 2023: 27.5%) with
a pro-forma LTV2, post year-end sales,
of 28.7%.39.5%
£189.8m
IFRS loss of £189.8m
(2023: £64.5m).
331p
EPRA net tangible asset value
per share1 down 32.9% to
331p (31 March 2023: 493p).
4.83p
Total dividend for the year
(2023: 11.75p).
2.9%
See-through average cost of
secured facilities1 reduced to
2.9% (31 March 2023: 3.4%).
• IFRS investment property
portfolio value of £472.5m
(31 March 2023: £681.7m).
• 22.4% valuation decrease,
on a like-for-like basis1 (22.6%
including sales and purchases),
of our see-through investment
portfolio, valued at £660.6m
(31 March 2023: £839.5m).
• See-through portfolio WAULT1
of 6.6 years (31 March 2023:
5.0 years).
• Contracted rents of £33.0m
(31 March 2023: £39.0m),
compared to an ERV1 of
£60.8m (31 March 2023:
£60.4m). Following the sale of
25 Charterhouse Street, EC1,
and 50% of 100 New Bridge
Street, EC4 post year end, the
ERV falls to £48.1m.
• Vacancy rate on completed
assets decreased to 17.6% at
31 March 2024 (2023: 19.8%),
primarily due to the lettings at
The JJ Mack Building, EC1.
Portfolio update
Development pipeline
• With a joint venture partner secured, development finance in place
and a construction contract signed, the 194,000 sq ft redevelopment
of 100 New Bridge Street, EC4, our latest “best-in-class” scheme,
has commenced and is expected to be completed by March 2026.
• Contracts were signed in July 2023, confirming Helical as Places
for London’s commercial office joint venture partner. The long-term
partnership will see the delivery of new high quality and sustainable
space predominantly above or adjacent to key transport hubs.
–10 King William Street, EC4 (formerly Bank OSD) – An eight-
storey office development on an island site, located above the
recently opened Bank station entrance on Cannon Street, delivering
140,000 sq ft of office and retail space. This development is due to
commence in Q4 2024 with completion due by December 2026.
–Southwark Over Station Development, SE1 – Located over
Southwark tube station, the site benefits from planning for a
222,000 sq ft NIA office scheme. We are now having detailed pre-
application discussions with Southwark Borough Council regarding
an alternative purpose-built student accommodation scheme.
We aim to submit a planning application during summer 2024,
commence on site in July 2025 and complete in summer 2027.
–Paddington Over Station Development, W2 – Situated close to
the Elizabeth Line station at Paddington, this 19-storey building will
provide 235,000 sq ft of office space. The site will be acquired by
the joint venture in January 2026 and the intention is to deliver the
scheme in 2029.
• Terms have been agreed, and contracts will shortly be signed, with the
long leasehold owner of the existing building at Brettenham House, WC2
for the wholesale refurbishment of the 120,000 sq ft office building with
Helical acting as development manager and contributing towards
construction costs. This transaction is an example of the “equity-light”
model that we seek to pursue in the future, with ownership remaining with
the long leaseholder and our equity contribution limited. Work has already
commenced and we expect to deliver the completed scheme in Q1 2026.
Strategic Report
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
2
3
Chairman’s statement
We have reached several important conclusions:
• We have an exciting pipeline of committed developments, which,
due to the quality and location of the schemes, are well placed to
attract premium rents and should achieve strong returns;
• Helical has a proven track record in delivering very high quality
schemes, across a variety of asset classes, often in partnership.
Going forwards, the intention is to increasingly adopt an “equity-
light” model to take advantage of market opportunities with a
disciplined approach to capital deployment;
• To optimise the value of our investment properties we need to
complete our asset management plans, principally through leasing
up vacancy, and be ready to realise value as and when liquidity
returns to the investment market;
• We need to adjust our dividend payout given recurring earnings are
insufficient to cover the historic level of dividend and development
profits are inherently lumpy;
• We plan to make a significant reduction in our fixed overheads,
and we have started to implement changes to reduce our running
overheads by 25% by the end of March 2025;
• The Board has signed off on a detailed three-year plan and is very
clear that, given current markets, the potential returns on a three-
year view far exceed the potential returns from an alternative
strategy to return capital to Shareholders in the short term; and
• The Board recognises the talent and potential in the wider Helical
team and, to this end, we are consulting on the introduction of a
new three-year management incentive plan that is designed to
strengthen the alignment of the executive and senior management
team with Shareholder returns.
The trajectory of investment yields is outside our control, but absent
significant further outward movement, we are confident that through
the implementation of the above strategy we can demonstrate value
accretion. In due course, the investment market should return to more
normal conditions. In the meantime, we have lots to be getting on with;
letting vacancy in our existing portfolio and maximising the potential
in our development pipeline, whilst maintaining a robust financial
position, all at a lower operational cost, are the team’s main priorities.
The Board is not complacent about the scale of the challenge facing
us and other small listed property businesses, but we are very clear
about the opportunity for Helical in a dislocated market. We are proud
to work with a number of high quality partners, which is a strong
endorsement of the Helical brand,and we will continue to nurture
these relationships.
The results are reflective of the cyclical and structural headwinds
affecting the real estate sector and, more particularly, London
offices and which have adversely impacted our financial and
share performance. Our portfolio of investment properties and
development sites has been disproportionately impacted by the
significant outward yield movement over the past 12 months,
with vacancy negatively impacting valuations.
On a more positive note, I am, however, pleased to report that our
strategy of focusing on “best-in-class” buildings is bearing fruit,
as evidenced by the encouraging letting progress and record rents
achieved at our latest and most sustainable property, The JJ Mack
Building, EC1. This underpins our confidence in the prospects for
our significant development pipeline and our future profitability.
Richard Cotton
Chairman
A clear pathway
to future growth
Leadership
Gerald Kaye has informed the Board that he will be handing over his
executive duties and stepping down from the Board at the AGM in
July. We are delighted that he has agreed to stay on in a consultancy
role with specific responsibility for our joint ventures at 100 New
Bridge Street, EC4 and our new West End scheme at Brettenham
House, WC2. I am very pleased to announce that Gerald will be
succeeded by Matthew Bonning-Snook as Chief Executive.
On behalf of the Board I would like to pay tribute to Gerald’s
outstanding contribution to Helical during his long tenure as, first,
Development Director and, most recently, as Chief Executive.
Since he succeeded Mike Slade in 2016 he has re-focused the
business as a “best-in-class” developer in central London. Over this
period he has had to contend with strong headwinds, from Brexit,
Covid and latterly the sharp upward adjustment in interest rates.
Throughout he has remained calm and focused, demonstrating
a totally committed work ethic.
I am delighted that he has agreed to continue in an external
consultancy role, maintaining the strong relationships with some
of our key joint venture partners.
With Matthew having secured the joint venture with TfL, the
cornerstone of our exciting development pipeline, and with an
extensive track record of delivering profitable schemes over nearly
three decades at Helical, he is the right choice to maximise the
opportunities at Helical. We are clear about the challenges in front
of us and I look forward to working closely with Matthew and the
wider Helical team to implement our strategy.
Non-Executive Directors
On behalf of my fellow Helical Directors, I want to thank Joe Lister
who, after serving for almost six years on the Board, is stepping
down at the 2024 Annual General Meeting (“AGM”), following his
appointment as Chief Executive at FTSE 100 company, The Unite
Group plc. Joe has made a significant contribution to our Board
deliberations and we shall miss his wise counsel.
I would also like to welcome our two new Non-Executive Directors,
Amanda Aldridge and Robert Fowlds. Amanda has strong
credentials in financial reporting and will succeed Joe as Chair
of the Audit and Risk Committee following the 2024 AGM. Robert
strengthens the overall expertise of the Board with his extensive
financial knowledge and background in real estate.
Richard Cotton
Chairman
22 May 2024
On behalf of the Board I would
like to pay tribute to Gerald’s
outstanding contribution to
Helical during his long tenure.”
Over recent months I have led a detailed and rigorous business
review, where we have examined all of the potential strategies to
generate Shareholder value. We have concluded that the nature
of our business does not lend itself to the strategy currently being
adopted by some of our peers, namely the return of capital to
Shareholders funded through asset disposals. There are some
important factors underlying this conclusion, particularly the
complexities of our financing and capital commitments given
the scale of our central London pipeline assets, compounded by
the current market illiquidity for properties of over £100m, which
is even more pronounced for London offices.
CGI
Strategic Report
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
4
5
Gerald Kaye
Chief Executive
Chief Executive’s statement
Against this backdrop, and since the year end, Helical has recycled
capital from its portfolio, reduced year end leverage and cut its
ongoing core administrative costs, targeting a 25% reduction by the
end of this financial year. As a result, it is well placed to capitalise on
any ongoing market dislocation and the structural trends impacting
the office sector.
Our pipeline
The Group seeks to grow the business by realising surpluses from its
recently developed investment assets, and reinvesting that recycled
equity into new opportunities.
In the year to 31 March 2024, no new development schemes were
started with the last completed scheme being The JJ Mack Building,
EC1, which achieved practical completion in September 2022.
Instead, Helical’s focus has been on increasing its development
pipeline of future schemes.
Being selected by TfL as their joint venture partner for the Platinum
Portfolio was a significant milestone, providing three schemes to
our pipeline with the potential for additional opportunities to be
added to the joint venture in the future. This collaboration with TfL,
rebranded as Places for London, is an endorsement of the Helical
brand and recognises our track record of producing “best-in-class”
developments across central London over many years. Since
contracts were signed with Places for London, in July 2023, we have
been working to maximise the opportunities at each of the three initial
sites at 10 King William Street, EC4, previously referred to as the
Bank Over Station Development (“OSD”), Southwark OSD, SE1 and
Paddington OSD, W2. We are excited at the prospect of starting the
first of these developments at 10 King William Street, EC4 later this
year, with the subsequent schemes due to start in 2025 and 2026,
with delivery in 2026, 2027 and 2029 respectively.
In addition, with a joint venture partner secured, development bank
finance arranged and a main contractor signed, we are also excited
to progress the redevelopment of 100 New Bridge Street, EC4,
our 194,000 sq ft office and retail scheme.
Finally, as referred to in November, when we reported on our Half
Year results, we have also secured a new “equity-light” scheme at
Brettenham House, WC2. This scheme, a comprehensive refurbishment
of a 120,000 sq ft office building adjacent to Waterloo Bridge, is an
example of Helical providing its development expertise to a property
owner looking to retain its investment but create, in joint venture where
we contribute towards construction costs, a “best-in-class” investment
asset. In return for our participation, Helical will receive development
management fees plus a “waterfall” promote based on the outcome
once let. Our business model envisages additional “equity-light”
schemes being added to the development pipeline in the future.
Results for the year
The loss for the year to 31 March 2024 was £189.8m (2023: £64.5m)
with a see-through Total Property Return of -£162.7m (2023:
-£51.4m). See-through net rental income reduced by 23.8% to
£25.5m (2023: £33.5m) while developments generated see-through
profits of £0.4m (2023: £3.2m). The see-through net loss on sale and
revaluation of the investment portfolio was £188.6m (2023: £88.1m).
Total see-through net finance costs reduced to £11.1m (2023: £12.0m),
reflecting a lower level of debt offset by a full year of expensed
interest on the debt in our joint ventures since practical completion
of The JJ Mack Building, EC1 in September 2022. A fall in expected
future interest rates led to a £5.6m charge (2023: credit of £12.8m)
from the valuation of the Group’s derivative financial instruments.
Recurring see-through administrative costs were 8.7% lower at
£9.4m (2023: £10.3m) before an accelerated depreciation charge
of £0.7m (2023: £nil), with performance related awards, reflecting
a purely notional charge for share awards, reduced to £1.2m (2023:
£2.7m). National Insurance on these awards was £0.1m (2023: £0.3m).
Overview
During the year to 31 March 2024, we have seen a significant
readjustment in the investment market as valuation yields have
increased to reflect movements in 10-year gilts and five-year swap
rates, the pricing on which real estate property yields are correlated.
At Helical, the portfolio has seen an outward yield adjustment of
95bps since 31 March 2023, offset by 1.1% ERV growth, with both
valuations and earnings impacted by increased vacancy in the
portfolio, particularly as the result of our forfeiture of the leases to
WeWork at The Bower, EC1. This proactive step allowed us to regain
control of the space, shortly before the tenant went into Chapter 11 in
the US, and refurbishment work is well under way as we seek to re-let
this high quality space.
At the same time, we continue to let space at our most recently
completed new development, The JJ Mack Building, EC1. Despite an
increase in the time taken to negotiate commercial terms and complete
the legal processes, we have made good progress in the year in letting
the space and at record rents for the Farringdon area, significantly in
excess of the initial appraisal rental levels and above March 2023 ERVs.
Today this “best-in-class” building is 71% let, increasing to 90% on
completing the letting of the space currently under offer.
Tenant demand for the best newly developed or refurbished buildings,
at the forefront of sustainability and with top quality amenities,
continues to be strong, with rising rental values evidenced by our
own experience and that of our peer group.
Creating “best-in-class”
buildings at the forefront
of sustainability
Being selected by TfL as
their joint venture partner for
the Platinum Portfolio was a
significant milestone, providing
three schemes to our pipeline...”
CGI
Strategic Report
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
6
7
The JJ Mack
Building
21,734 sq ft
Remaining*
100 New Bridge
Street
191,000 sq ft
offices
10 King William
Street
140,000 sq ft
offices
Southwark
430 studio units –
PBSA
Paddington
235,000 sq ft
offices
Brettenham
House
120,000 sq ft
offices
Portfolio
2024
Pipeline projects
2025
2026
2027
2028
2029
Let remaining
space
Complete
March 2026
Site Drawdown
October 2024
Complete
Dec 2026
Main works
commence
Summer 2024
Complete
Q1 2026
Site Drawdown
July 2025
Site Drawdown
January 2026
Lettings, rental growth and
capital recycling ongoing
* Excluding under offers
Complete
August 2027
Complete
May 2029
Strategic Report
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
8
9
Chief Executive’s statement
continued
Since 1 April 2022, Helical has been a REIT and the receipt of income
which fell outside this regime in the prior year has resulted in a small
tax charge of £0.2m (2023: £nil) for the year.
The IFRS basic loss per share was 154.6p (2023: 52.6p) and EPRA
earnings per share were 3.5p (2023: 9.4p).
On a like-for-like basis, the investment portfolio fell in value by 22.4%
(22.6% including purchases and gains on sales). The see-through
total investment portfolio value reduced to £660.6m (31 March 2023:
£839.5m), reflecting the revaluation loss for the year.
The total return of our property portfolio, as measured by MSCI, was
-20.3% (2023: -5.6%), which underperformed the Central London
Offices Total Return Index of -5.7%.
The completed investment portfolio was 82.4% let at 31 March 2024
and generated contracted rents of £33.0m, equating to an average
of £65.70 psf. This increases to an ERV of £42.9m on the letting of the
currently vacant space and capturing the reversion of the portfolio.
The Group’s contracted rent has a Weighted Average Unexpired
Lease Term (“WAULT”) of 6.6 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 -31.7%
(2023: -9.4%). Based on EPRA net tangible assets, the TAR was
-31.4% (2023: -12.1%). EPRA net tangible assets per share fell by
32.9% to 331p (31 March 2023: 493p), with EPRA net disposal value
per share falling by 33.3% to 327p (31 March 2023: 490p).
Balance Sheet strength and liquidity
The Group has a significant level of liquidity with see-through cash
and unutilised bank facilities of £115.5m (31 March 2023: £244.2m)
to fund capital works on its portfolio and future acquisitions.
At 31 March 2024, the Group had £12.0m of cash deposits available
to deploy without restrictions and a further £11.9m of rent in bank
accounts available to service payments under loan agreements, cash
held at managing agents and cash held in joint ventures. In addition,
the Group held rental deposits from tenants of £7.8m. Furthermore,
the Group had £83.8m of loan facilities available to draw on.
These year end balances have been supplemented by cash receipts
of £97.8m, from the sale of 25 Charterhouse Square, EC1 and the sale
of 50% of the site at 100 New Bridge Street, EC4, both completed
since the year end.
The see-through loan to value ratio (“LTV”) increased to 39.5% at
the Balance Sheet date (31 March 2023: 27.5%) and our see-through
net gearing, the ratio of net borrowings to the net asset value of the
Group, increased to 65.2% (31 March 2023: 38.0%) over the same
period. However, post year end sales have reduced the pro-forma
see-through LTV to 28.7% and the pro-forma see-through net
gearing to 40.3%.
At the year end, the average debt maturity on secured loans, on a
see-through basis, was 2.1 years (31 March 2023: 2.9 years). The
average cost of debt, on a see-through basis, was 2.9% (31 March
2023: 3.4%).
Dividends
Helical is a capital growth stock, seeking to maximise value by
successfully letting comprehensively 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 have been considered when determining
the payment of dividends.
For our development pipeline, we will be targeting an upfront
embodied carbon of less than 600 kgCO2e/m2, focusing on efficient
design, low carbon and recycled materials to meet this target.
We continue to perform well across the industry benchmarks in which
we participate. For our sustainability reporting, we again received a
Gold Award, for our reporting in accordance with EPRA’s European
Sustainability Best Practice Recommendations (sBPR). We were
also pleased to maintain our CDP score of B, further demonstrating
our commitment to best practice disclosure and enhanced climate
change risk assessment. While we retained our Green Star status
under the GRESB rating, the tougher criteria saw the overall rating
fall from 5* to 4* despite our receiving the highest rating of our peer
group for our standing investments of 87% (2023: 88%), with our
developments delivering 92% (2023: 94%).
Looking forward, we have a substantial development pipeline, with
our Places for London joint venture due to deliver three “best-in-class”
schemes and our redevelopment of 100 New Bridge Street, EC4
delivering a further 191,000 sq ft of high quality, redeveloped office
space and 3,500 sq ft of retail space. All these buildings will be targeting
a minimum of BREEAM Outstanding, NABERS 5* and WELL Enabled
Platinum, the recognisable hallmarks of “best-in-class” office buildings.
The opportunity
During the year, we have experienced the loss of rental income
through tenant failure and further significant outward yield movement
reducing the value of our investment portfolio by 22.4%. Market
commentary suggests that this outward yield movement may be
coming to an end with growing expectations of the first cut in the
Bank of England’s base rate coming this summer and five-year
swaps and 10-year gilts rates, both currently c.4%, forecast to decline.
In the year to 31 March 2024, EPRA earnings per share fell by 63%
from 9.4p last year to 3.5p this year. As there were no sales of assets
during the year, no capital profits were realised.
Moving forward, and in line with our new strategy, we are adjusting
our dividend policy to suit our expected trajectory. We will align our
dividends to our EPRA earnings per share, rebasing to a lower level
while we wait for our development pipeline to produce profits.
In light of the results for the year and the fall in EPRA earnings,
the Board will be recommending to Shareholders a commensurate
reduction in the final dividend to 1.78p (2023: 8.70p) per share,
representing the minimum PID payment required under the REIT
regime. This represents, if approved by Shareholders at the 2024
AGM, a total dividend for the year of 4.83p, down 59% on 2023.
This final dividend, if approved, will be paid out of distributable
reserves generated from the Group’s activities. Following its
conversion to a UK REIT, dividends payable by Helical will comprise
a Property Income Distribution (“PID”) from the operations that fall
under the REIT regime, and a dividend from those operations that
fall outside the REIT regime. The PID, for the year to 31 March 2024,
including the amount paid at the half year of 0.50p, will be 2.28p, with
the balance of the total dividend, amounting to 2.55p, representing an
ordinary dividend paid at the half year.
Sustainability
Sustainability remains at the heart of our business, both at a
corporate and asset level.
We have made good progress in the year and continue to perform
strongly against the targets we have set. In our managed portfolio,
energy intensity across our like-for-like assets fell by 8% during the
year to an average of 119 kWh/m2 (2023: 129 kWh/m2), keeping us
on track for our 2030 net zero carbon target of 90 kWh/m2.
If this proves to be correct, and having taken the pain of reductions
in value, Helical is well positioned to drive growth through the letting
of the vacant space in its investment portfolio and the generation
of substantial profits from its development pipeline. However, such
optimism can be derailed by future geopolitical and domestic
events outside of our control and Helical will seek to manage its
Balance Sheet to ensure it has protection against the impact of
these potential events.
Occupational demands continue to evolve in the office sector, with
tenants using their premises to optimise the work experience for
their employees. Amenity, connectivity, service and sustainability
are encouraging businesses towards new buildings. At the same
time, buildings that provide a poorer working environment are driving
occupiers away. This bifurcation of the market is accelerating with
rental growth continuing for the “best-in-class” and values falling for the
rest. This will provide opportunities to acquire potential developments
and major refurbishments at levels that allow for strong capital returns.
Our development pipeline is expected to provide surpluses for the
foreseeable future. Scheduled to start in 2024 and be delivered from
early 2026 onwards, this pipeline will be supplemented with additional
“equity-light” opportunities as building owners seek specialists in
development and refurbishment to partner with them to maximise the
value of their assets. In addition, banks and other financial institutions
with non-performing assets should provide additional opportunities
for Helical to create value.
Our Balance Sheet is in good shape and maintaining financial
discipline remains at the forefront of Helical’s approach. Recycling
equity and seeking third party financing to fund the pipeline of
opportunities, as recently seen with 100 New Bridge Street, EC4,
will allow the Company to grow the business while containing gearing
to appropriate levels.
There remains a shortage of “best-in-class” newly refurbished or
redeveloped office space in central London. With an experienced
management team, a substantial development pipeline with
optionality over timing and funding, and no legacy assets requiring
investment to meet minimum sustainability standards, Helical is well
positioned to capitalise on current cyclical opportunities.
Finally
I have been the Chief Executive of Helical since 2016 and a main
Board Director since 1994, the year I joined the Company, delivering
over 30 years of service to Helical, its employees and its
Shareholders. It is time to “draw stumps” on my executive role having
delivered over 60 projects of mainly offices but also retail, residential,
logistics and student accommodation in that time. This includes over
five million sq ft of offices, the vast majority of which are in London.
I remain proud of each asset as I regularly pass them on my journeys
through this great city of ours and for that reason I am pleased to be
able to continue to work on landmark buildings in my new role on
100 New Bridge Street, EC4 and Brettenham House, WC2.
I have worked alongside Matthew for almost 30 years and believe
he is the right person to succeed me as Chief Executive of Helical.
I know that he is fully focused on realising profits from the Company’s
exceptional development pipeline and I look forward to continuing to
make my contribution to the ongoing success of Helical.
Gerald Kaye
Chief Executive
22 May 2024
Our market
Matthew Bonning-Snook
Chief Executive Officer
Designate
Rental growth
for “best-in-class”
London still remains the
preferred destination for
overseas capital and we do
expect to see a pickup in
investment activity towards
the second half of 2024.”
Investment market
Investment volumes remain subdued in the central London office
market due to the challenging macroeconomic environment,
geopolitical tensions and high borrowing costs, which remain elevated
due to persistent core inflation. With a lack of quality assets being
marketed, many investors are adopting a “wait and see” approach
with regard to any near-term changes to the Bank’s base rate.
Transaction activity reached just £7.1bn in 2023, down 57% on the
long-term 10-year average, with sub £50m lot sizes accounting for
77% of this figure and just 17 transactions occurring in excess of
£100m, compared to the five-year average of 35. This subdued
activity continues to cause increased uncertainty over appropriate
asset valuations as comparable evidence remains scarce. Whilst the
smaller lot size purchases have been dominated by high net worth
family offices, there are an increasing number of private equity and
Asia-Pacific buyers returning to the market, focusing on core assets
where pricing is now felt to be attractive.
London still remains the preferred destination for overseas capital
and we do expect to see a pickup in investment activity towards the
second half of 2024, particularly if we continue to see higher office
occupancy and businesses placing increasing importance on their
office as a tool to attract talent. However, the key trigger and largest
shift in sentiment will most likely occur when there is clearer guidance
regarding the direction of interest rates.
Our market
The year has been defined by a dislocation between the occupational
and investment markets, with the letting market for the new, best
quality space proving resilient as we continue to see high levels of
active requirements, leasing momentum and strong rental growth in
the core sub-markets. In contrast, the investment market remains
muted, with activity far below the long-term average.
Over the last year, there has been a material reduction in the annual
rate of CPI inflation which fell to 2.3% in the later half of May 2024,
compared to 10.1% in March 2023. This offers some relief and a
sense of optimism that interest rates have peaked and will begin to fall
in the coming year. The Bank of England policy rate has been flat at
5.25% since August 2023, however the effects of a higher interest
rate environment, combined with the residual effects of elevated
inflation levels, are still present and continue to weigh on sentiment
in the investment market.
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10
11
£7.1bn
2.3%
Transaction activity
in 2023
Material reduction in annual
CPI inflation
Our market
continued
Occupational market
There is both strong demand and activity in the occupational market
and JLL reported take-up for central London at 9.7m sq ft in 2023,
with Q4 figures representing the highest levels since 2010. The City
sub-market demonstrated the greatest level of resilience, achieving
volumes 7% higher than the 10-year average. Whilst Q1 2024 take-up
volumes were subdued, we continue to see strength of demand in the
market as under offer numbers have continued to rise, to 18% above
the long-term average. There is also significant breadth of occupier
demand as business services continue to transact, while creative
industries have come back to the market, accounting for 20% of Q1
take-up numbers.
Looking forward, Knight Frank reports active requirements at the
end of Q1 2024 at 12.6m sq ft, up 50% compared to March 2023.
These requirements are primarily focused on scarce new space
where vacancy rates remain significantly below the overall vacancy
figure, at 2% compared to 9.9% overall. For refurbishments, the
vacancy rate sits around 4%; this comes as two thirds of leasing
transactions are for new and refurbished space.
Our tenant make-up
Software and Computer Services
17%
Financial Products
16%
Online retailing – Fashion
15%
Consumer goods
10%
Advertising/Marketing
9%
IT Consultancy
9%
Media
9%
Flexible offices
3%
Food & Beverage
3%
Human Resources
3%
Law
3%
Business Consultancy
1%
Consumer services
1%
Other
1%
The high level of active requirements, combined with low vacancy
rates for new space, continues to generate competition which is
driving rents upwards. Knight Frank has reset its approach to prime
rents to reflect this trend, with City Core, Midtown and Farringdon
prime rents all increasing by £10 psf, taking them to £87.50, £80.00
and £90.00 psf respectively. This revision to prime rents represents
a fundamental reset, offering a new “best-in-class” subset of prime,
as a result of an improved outlook for occupier demand and a
development pipeline that remains below average levels for new
and refurbished buildings.
At our joint venture development, The JJ Mack Building, EC1, located
in Farringdon, we have secured rents significantly above £100 psf,
highlighting the strength of demand and a willingness to pay higher
rents to secure the best space as employers are increasingly looking
to incentivise their employees to adopt more office-based
approaches to working.
Development pipeline
Sustained construction cost inflation driven by supply chain
disruption, tight labour markets and volatile energy costs has
moderated recently and Arcadis published its “London Building
Construction TPI” forecast, with the central case showing low
inflation ranging from 1% to 2% over the course of 2024.
In 2023, development completions across central London reached
5m sq ft; up 5% on the long-term average. Completions were still
below Savills’ initial forecast of 7.5m sq ft at the beginning of the year,
evidencing that delays have caused schemes to be pushed back.
Looking ahead, the levels of planned supply are unlikely to be
sufficient to meet the high levels of demand, with Knight Frank
reporting 28m sq ft of lease expiries occurring before the end of 2026.
The development pipeline continues to be impacted by delivery
barriers including elevated associated costs of development and
planning timelines, causing investors to recalibrate appraisals. As a
result, investors are increasingly considering alternative land uses to
maximise site value, which is further suppressing the near-term supply
of office schemes. A current example of this is our Southwark OSD,
SE1 scheme where we are in the process of seeking planning consent
to develop student accommodation, rather than the previously
consented office scheme, as we believe this will generate the best
value for our site. A demand-supply imbalance is likely to occur over
the medium to longer term, with 2027 to 2030 likely to see the most
dramatic levels of undersupply as planned completions remain low.
Constrained market supply and a high level of occupier demand will
lead to increased competition, presenting an opportunity for developers
and investors who are willing and able to deliver new, “best-in-class”
schemes. However, to deliver sustainable returns, they will require
higher economic rents to offset the increased associated costs of
development and as a result, pre-letting activity might slow as investors
hold out for rental growth tomorrow rather than security at day one.
This is evidenced by Savills reporting a recent reduction in the overall
quantity of the pipeline that is let prior to completion.
Conclusion
Our existing portfolio continues to attract new occupiers due to its
“best-in-class” credentials, excellent tenant amenities and active asset
management. Helical’s proven track record, expertise and our recently
signed joint venture with Places for London and “best-in-class” scheme
at 100 New Bridge Street, EC4 will ensure we are well positioned to
meet occupier demands through our extensive development pipeline
across five schemes. Our planned schemes are located in exciting
and vibrant sub-markets that look set to experience both a shortfall in
supply and elevated tenant demand, resulting in strong rental growth
prospects that look set to deliver us an attractive return profile.
CGI
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12
13
28m
12.6m
sq ft
Active requirements at
end of Q1 2024, up 50%
sq ft
Lease expiries before
end of 2026
Sustainable business model
Sustainability is at the core of all
activities at Helical. We recognise
the impact the buildings we
develop have on the environment
and are focused on reducing our
carbon footprint throughout a
property’s lifecycle, achieving
Net Zero by 2030.
Best-in-class portfolio
Helical holds a portfolio of newly
developed or recently refurbished
high quality office assets with
attractive amenities and excellent
sustainability credentials. They
are located in culturally rich
sub-markets which benefit from
excellent transport links, attracting
a diverse range of clients.
02
01
→See page
60
→See page
28
Market knowledge
and relationships
With over 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 capital.
04
05
→See page
10
→See page
42
Robust financial position
The Group uses gearing on a tactical
basis, increasing it to accentuate
returns in a rising market, or reducing
debt to prepare for more challenging
times whilst retaining firepower to
take advantage of opportunities
that arise.
06
Strong track record
Each of the Executive Directors
has over 29 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.
→See page
102
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Helical plc — Annual Report and Accounts 2024
14
15
Our investment case
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.
The Helical
difference
A customer focused approach
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 re-imagined existing assets,
they aim to be best-in-class,
respecting the history and 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 very best service.
03
→See page
16
Our strategy
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.
Strategy
We have five pillars which support our strategy:
01
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.
02
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.
Strategic priorities
Deliver long-term sustainable growth.
Clear focus on Total Shareholder Return, delivering capital growth
and income in a manner consistent with our Vision.
Purpose and Values embedded effectively in the operational
policies and practices and culture of the Group.
Incentivise management to outperform the Group’s competitors
by setting challenging performance targets, against which
rewards are measured.
2023/24 Achievements/value creation
TOTAL SHAREHOLDER
RETURN (3 YEAR)
-17.8%
EPRA NTA
331p
EPRA EARNINGS
PER SHARE
3.5p
Associated information
Key performance indicators
• Total Shareholder Return
• Total Accounting Return
• EPRA Total Accounting Return
• EPRA Net Tangible Assets
Principal associated risks
• Poor management of stakeholder relations and non-compliance
with prevailing legislation, regulation and best practice
• Geopolitical and economic
• The Group’s strategy is inconsistent with the market
• Significant business disruption/external catastrophic event
cyber-attacks to our business and our buildings
• Our people and relationships with business partners and reliance
on external partners.
Relevant stakeholders
• Shareholders
• Employees
• Partners
Strategic priorities
A focus on London, delivering capital gains from development
activity and income growth from asset management.
Locate sites where complexity presents opportunity to add
significant value through innovative development and
asset management.
Maximise value and 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.
2023/24 Achievements/value creation
TOTAL PROPERTY
RETURN (1 YEAR)
-20.3%
TOTAL PROPERTY
RETURN (3 YEAR)
-5.9%
Associated information
Key performance indicators
• MSCI Property Index (1 Year)
• MSCI Property Index (3 Year)
Principal associated risks
• Property values decline/reduced tenant demand for space
• Risks arising from the Group’s significant development projects
• Health and safety
• Significant business disruption/external catastrophic event/
cyber-attacks to our business and buildings
Relevant stakeholders
• Occupiers (tenants/customers)
• Suppliers and contractors
• Local communities
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.
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 buildings.
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16
Helical plc — Annual Report and Accounts 2024
Strategy
continued
05
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.
03
Sustainability
Ensure that sustainability is at the
heart of our business decisions
creating a portfolio which is
futureproofed for all our stakeholders.
04
People
Attract and retain the best people
encouraging their development and
progression to ensure future succession is
secured. Maintain our excellent reputation
and network for property sector contacts,
trusted partners and advisors.
Strategic priorities
Transition to a net zero carbon business.
Buy, use and reuse 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.
2023/24 Achievements/value creation
THE JJ MACK BUILDING, EC1,
BREEAM OUTSTANDING SCORE
96.4%
COMPLETED BUILDINGS,
BY VALUE, WITH AN EPC
OF A OR B
99%
Associated information
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
Small and empowered core team supported by valued advisors
to allow scalability.
Work with joint venture partners to increase project scale
and to manage risk.
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.
2023/24 Achievements/value creation
AVERAGE STAFF
RETENTION
83.2%
AVERAGE LENGTH OF
EMPLOYEE SERVICE
12.4 years
Associated information
Key performance indicators
• Average length of employee service
• Average staff turnover
Principal associated risks
• Our people and relationships with business partners and reliance
on external parties
• Health and safety
• Poor management of stakeholder relations and non-compliance
with prevailing legislation, regulation and best practice
Relevant stakeholders
• Employees
• Partners
• Suppliers and contractors
Strategic priorities
Maintain an appropriate risk-adjusted LTV.
Use of joint venture structures to manage risk and 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.
2023/24 Achievements/value creation
SEE-THROUGH AVERAGE COST
OF SECURED FACILITIES
2.9%
PROFORMA LOAN TO VALUE
28.7%
Associated information
Principal associated risks
• Availability and cost of bank borrowing, cash resources and
potential breach of loan covenants
Relevant stakeholders
• Shareholders
• Employees
• Partners
Goals for 2025
• Maintain effective channels of engagement with
our stakeholders
• Reduce vacancy in the portfolio
• Progress our joint venture with TfL and commence the
development of 10 King William Street, EC4
• Acquire new opportunities with a focus on joint venture
and equity-light structures
• Progress development of 100 New Bridge Street, EC4
• Continue to be recognised as a leading supplier of
best-in-class, sustainable office buildings in London
• Continue our journey to becoming a net zero business
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18
19
1 Bank
The scheme at Bank (10 King William Street, EC4)
has consent for a new office building of c.142,000 sq ft
over ground and seven upper floors over the new
entrance to Bank tube station on Cannon Street. Offering
floor plates of c.22,000 sq ft around a central core with
light on all four sides, high quality amenity, a wellness
lounge together with extensive terracing and very
strong environmental credentials, it will offer the
occupiers a best-in-class office at a time when supply
is expected to be very limited. Completion is expected
at the end of 2026.
2 Southwark
Above Southwark tube station on the Jubilee Line we
are looking at an alternative use to the permitted office
scheme introducing a c.430 studio unit purpose-built
student accommodation development together with an
adjacent affordable housing block. A planning application
is due to be submitted in the summer with a view to
delivering the project for the academic intake in
August 2027.
3 Paddington
On the eastern side of Paddington Station alongside
the canal and opposite the Brunel Building, we have
planning consent for a new build 19 story office
comprising 235,000 sq ft with exceptional views over
West London. The site is to be drawn down by the joint
venture in January 2026 and completion is expected
in 2029. Being one of the few undeveloped sites in this
sub-market we again expect the supply of new office
space to be very limited.
We are actively pursuing discussions with Places for
London on several other potential projects and there is a
real belief that this will be another great example of a long
and productive relationship which we rightly value so
highly within our business.
45
Over the last three decades
we have worked with over 45
different joint venture partners
Working in partnership
We ourselves need to use this information to keep ahead of the curve,
constantly innovating, critically examining our approach and above
all being creative. To help do this we work with trusted partners and
advisors, the very best people in their field. These relationships tend
to be long standing where an understanding has been built up over
many years delivering efficiencies in time and productivity and a level
of support which only comes from a partnership which is truly valued
by both parties.
Over the last three decades we have worked with over 45 different
joint venture partners in delivering our development projects, each
tailor made for the bespoke arrangements that the transaction
required. These partners have often brought different things to the
table, for example some are focused on financing a share of the
equity in the joint venture, others bringing site opportunities needing
our development expertise and some wanting to be the long-term
owner of the end investment product or the occupier of the scheme.
Our focus is to provide the development expertise having delivered
over 10m sq ft of occupier space with a major focus on central
London offices and mixed-use projects in an increasingly complex
world in terms of planning, construction delivery and competing
uses for London real estate with very specific and dynamic occupier
requirements. We enjoy working with many partners on a repeat basis
but equally enjoy the challenge and excitement of new partners and
trying to help solve difficult issues.
Working in partnership
Our contacts and industry connections tend to be the source of most
of our new projects, but we do occasionally work on more widely
marketed partnership opportunities, as was the case on the Platinum
Portfolio launched by TfL’s wholly owned property company Places
for London. As one of London’s largest landowners with a desire
to create well connected, sustainable, innovative best-in-class
workplaces, we shared their aspirations. Having worked with TfL
previously on the over station development above the new Elizabeth
Line Station at Farringdon East, which was let in its entirety to the
tech giant TikTok, we were eager to do more with them. The initial
over station seed sites at Bank, Southwark and Paddington, which
all benefited from planning permissions for new build schemes,
were a very exciting starting point with the expectation that other
sites would follow as these initial sites are developed. Being a genuine
joint venture with shared long-term ambitions and positively aligned
interests, we are delighted to now have a visible development pipeline
which we can business plan for accordingly.
We enjoy working with many
partners on a repeat basis
but equally enjoy the challenge
and excitement of new partners
and trying to help solve
difficult issues.”
Helical plc has always highly valued the importance of
relationships and the benefits of working in partnership.
Our industry connections across the property agency
community at all age levels are invaluable to us, ensuring
that we have the best data and a deep understanding
of market trends and activity.
1
2
3
CGI
CGI
CGI
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20
Building
value
Business model
The assets, skills and
knowledge to create our
competitive advantage:
Property
A high quality portfolio of investment
buildings and development opportunities.
People and culture
A motivated, qualified and experienced team.
Market expertise
Comprehensive knowledge of the markets
in which we operate, built through multiple
property cycles.
Relationships and reputation
An extensive network of joint venture
partners, advisors and industry contacts.
A long-standing reputation for speed
of execution and excellence in delivery.
Financing
A strong financial position with access
to a variety of sources of funds, from
Shareholder capital to external borrowings.
01/ Structure
and funding
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.
02/ Develop
Actively manage our assets throughout their
development, working with trusted suppliers
and focusing on quality, efficiency and safety.
03/ Let
Look to let our properties on flexible terms
to a diverse, financially robust tenant base.
04/ Manage
Through proactive asset management
we drive the rental value forward whilst
maximising occupancy.
Business activities
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.
Resources
External opportunities and threats
Our market
The London office property market.
→ See page 10
Risks
Strategic, Operational, Financial and
Reputational risks considered over short,
medium and long-term timescales.
→ See page 48
Property
£472.5m
Investment property value
6.6 years
WAULT
96.4%
The JJ Mack Building, EC1
BREEAM Outstanding Score
People
and culture
83.2%
Average staff retention
12.4 years
Average length of
employee service
Market
expertise
1
New “equity-light”
deal secured in
Brettenham House, WC2
Relationships
and reputation 99.5%
Of all contracted rent collected
Financing
2.9%
See-through average
cost of debt
28.7%
Pro-forma LTV
Value creation
Enhanced value for
reinvestment or realisation
S
tr
u
ct
ur
e
an
d
fu
n
di
n
g
D
e
ve
lo
p
01/
04/
02/
03/
Sustainability
Working for the long-term benefit
of our stakeholders, local communities
and the environment underpins
all our activities.
M
a
na
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e
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t
Our
Purpose
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F
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ty
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S
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Our strategy
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23
24
Measuring our
performance
We measure our performance
against our strategic objectives,
using several financial and
non-financial Key Performance
Indicators (“KPIs”).
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.
As discussed in the Chief Executive’s statement, the
financial measures for the year reflect a period of economic
volatility with higher interest rates negatively impacting on
investment yields.
Key performance indicators
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.
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 2024 was -31.7%
(2023: -9.4%).
Link to remuneration
Annual Bonus Scheme 2018
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 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 2024 was -31.4%
(2023: -12.1%).
Link to remuneration
Annual Bonus Scheme 2018
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
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 35 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
2024 decreased by 32.9% to
331p (31 March 2023: 493p).
Link to remuneration
Performance Share Plan 2014
40% 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
-31.7%
TOTAL ACCOUNTING RETURN
2024
2023
2022
2021
2020
-31.7%
-9.4%
15.0%
3.3%
7.7%
-31.4%
EPRA TOTAL ACCOUNTING RETURN
2024
2023
2022
2021
2020
-31.4%
-12.1%
10.2%
4.5%
9.3%
331p
EPRA NET TANGIBLE ASSET VALUE PER SHARE
2024
2023
2022
2021
2020
331p
493p
572p
533p
524p
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24
Key performance indicators
continued
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 2024 was 12.4 years
and the average staff turnover
during the year to 31 March 2024
was 16.8%.
Link to remuneration
Annual Bonus Scheme 2018
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
12.4 yrs
AVERAGE LENGTH OF EMPLOYEE SERVICE
AND AVERAGE STAFF TURNOVER
2024
2023
2022
2021
2020
12.4
13.2
11.8
11.0
10.0
2024
2023
2022
2021
2020
16.8
7.7
3.7
3.6
10.3
BREEAM AND EPC RATINGS
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.
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.
Performance
At 31 March 2024, five of our
seven (31 March 2023: five of
our seven) office buildings had
achieved, or were targeting,
a BREEAM certification of
“Excellent” or “Outstanding”.
These five buildings account for
89% of the portfolio by value.
All but one of our completed
buildings (99% by portfolio
value) have an EPC rating
of A or B.
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
Building
BREEAM rating
EPC
rating
Completed properties
The JJ Mack Building, EC1
Outstanding (2018)
A
The Warehouse and Studio, EC1
Excellent (2014)
B
The Tower, EC1
Excellent (2014)
B
25 Charterhouse Square, EC1
Excellent (2014)
B
Development pipeline
100 New Bridge Street, EC4
Outstanding (2018)1
A1
1 Targeted.
At The Loom, E1, it was not possible to obtain a BREEAM certification
at the design or development stage, however, the building has
achieved a BREEAM In Use rating of “Very Good”, a high accolade
given the listed status of the building.
-20.3%
MSCI PROPERTY INDEX
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 2024 was
-20.3% (2023: -5.6%). This
compares to the MSCI Central
London Offices Total Return
Index of -5.7% (2023: -8.6%)
and the upper quartile return
of -3.1% (2023: -5.4%).
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.
Helical’s portfolio has been
impacted by higher interest rates
and construction cost inflation,
as well as vacancy within the
portfolio and the failure of
WeWork in particular.
Link to remuneration
Annual Bonus Scheme 2018
20% 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 4.5%.
Performance Share Plan 2014
20% 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
Helical
MSCI Central London Offices Total Return Index
Source: MSCI
-5.9%
-0.5%
6.7%
8.9%
-5.7%
-20.3%
-2.3%
-1.0%
4.7%
7.1%
20 Years
%pa
10 Years
%pa
5 Years
%pa
3 Years
%pa
1 Year
%pa
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 Shareholders 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 2024
was -27.3% (2023: -24.8%).
Link to remuneration
Performance Share Plan 2014
40% of the maximum PSP
award is based on the Group’s
TSR performance compared
with its peers.
Link to strategic pillar
• Growth
-27.3%
TOTAL SHAREHOLDER RETURN
● Growth over all years to 31/03/24
● Growth in FTSE All-Share Return Index over all years to 31/03/24
● Growth in FTSE 350 Real Estate Super Sector Return Index over all years
to 31/03/24
15 Years
%pa
10 Years
%pa
5 Years
%pa
3 Years
%pa
1 Year
%pa
20 Years
%pa
-17.8%
-6.0%
-3.1%
0.3%
5.4%
-1.1%
5.8%
1.5%
9.2%
7.8%
3.1%
7.2%
3.2%
8.1%
-2.3%
-27.3%
9.3%
8.4%
Average length of service at 31 March – years
Staff turnover during the year to 31 March – %
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27
Our focused
portfolio
Helical has a portfolio of income producing, multi-let offices which
are extremely well located and offer sustainable and inspiring
workplaces which are technologically smart, rich in amenities and
promote employee wellbeing. We seek to maximise returns through
delivering income growth from creative asset management and
capital gains from our development activity.
Our portfolio
The Power House,
W4
Paddington OSD,
W2
Brettenham House,
WC2
Paddington
Baker Street
Lancaster Gate
Hammersmith
Earl’s Court
Hyde Park Corner
Green Park
Picadilly Circus
Chiswick
Farringdon
Barbican
St Paul’s
City Thameslink
Blackfriars
Mansion House
Cannon Street
Monument
Tower Hill
Fenchurch Street
Tower Gateway
Aldgate
Moorgate
Old Street
Chancery Lane
t
Waterloo
Waterloo East
Southwark
ras
Angel
Shoreditch High Street
Hoxton
London Bridge
Southwark OSD,
SE1
10 King William
Street, EC4
Barts Square, EC1
The JJ Mack
Building, EC1
100 New Bridge
Street, EC4
The Bower, EC1
The Loom, E1
West End
The City
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Helical plc — Annual Report and Accounts 2024
Our portfolio
continued
The JJ Mack Building comprises 206,085 sq ft and is held in a 50:50
joint venture with AshbyCapital. The JJ Mack Building, named after
the market trader who occupied the site in the 1940s, is one of
London’s most sustainable new office buildings and has recently
been recognised as BREEAM’s highest rated new development
under the 2018 guidance, with an Outstanding rating of 96.4%.
TheJJ Mack
Building, EC1
Prior to the start of the financial year, we let the sixth and seventh floors,
comprising 37,880 sq ft, to Partners Group, a global private markets
firm, for 15 years and they took occupation of their space in April 2024.
In November 2023, we let the ninth floor, comprising 13,408 sq ft,
to Corio Generation, a subsidiary of Macquarie Group, for 10 years
at a 2.3% premium to 31 March 2023 ERVs and they are now in
occupation following completion of their fit-out works.
In December 2023, we let the first, second and third floors comprising
68,002 sq ft to J Sainsbury for 15 years, at a 1.3% premium to 31 March
ERVs. The retailer will be relocating its existing London office to the new
building over the next two years. In addition, J Sainsbury has signed
an agreement for lease for two of the three ground floor retail units
and additional office space on the ground floor, comprising 7,128 sq ft.
In March 2024, we let the eighth floor, comprising 15,484 sq ft,
to Three Crowns LLP, a leading international arbitration law firm,
for 15 years. The agreed rent was 3.1% above 31 March 2023 ERVs.
We are under offer on both the fourth and 10th floors, comprising
23,566 sq ft and 13,409 sq ft respectively, as well as the last
remaining ground floor retail unit of 1,526 sq ft.
As a result of our strong letting progress, the building was 67% let as at 31
March 2024 and following the year end, a further 7,128 sq ft has been let,
equating to the building being 71% let. Following completion of the units
under offer, the building will be 90% let with just the fifth floor available.
SUSTAINABILITY RATINGS
BREEAM
Outstanding
NABERS
51
EPC
A
1 Targeted.
90%
let following
completion of the
under offer units
96.4%
BREEAM’s highest
rated new
development
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Our “best-in-class” office development at 100 New Bridge Street is
adjacent to City Thameslink and a short walk from Farringdon and
Blackfriars stations. In the year, we have obtained planning permission
for minor amendments to the scheme to enhance the ground floor
amenity and improve the floorplate efficiency.
Our portfolio
continued
SUSTAINABILITY RATINGS
BREEAM
Outstanding1
NABERS
51
EPC
A1
1 Targeted.
Acquired in March 2022
Originally developed
in 1992, the building
will be sustainably
refurbished to deliver
a best-in-class
modern office
194,000 sq ft
office building,
with two new floors
This carbon friendly, fully refurbished building will provide 194,000 sq ft
of office and retail space across seven retained floors and three new
floors once completed in Q1 2026. In addition, we will make considerable
public realm improvements to provide extensive outdoor space that
enhances the experience for both tenants and the local community.
Post year end, we signed a joint venture agreement with Orion Capital
Managers, selling a 50% investment in the site for £55m. Simultaneously,
a £155m (our share: £77.5m) development finance facility was secured
and Mace was appointed as the main contractor. We continue to
progress towards our March 2026 targeted completion date.
100
New Bridge
Street, EC4
CGI
CGI
CGI
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Our portfolio
continued
1 10 King William Street, EC4
An eight-storey office development on an island site, located above
the recently opened Bank station entrance on Cannon Street,
delivering 140,000 sq ft of prime space. Since the formation of
the joint venture, we have been progressing the enhancement
of the scheme alongside Fletcher Priest Architects and the
wider professional team. We submitted a non-material planning
amendment application to introduce significant public realm
improvements, making Abchurch Lane a shared space, a much
improved cycle arrival experience and the inclusion of changing
facilities and a wellness lounge at the mezzanine level. Initial enabling
works are due to take place over the coming months in preparation
for a formal start on site in October 2024. We aim to achieve practical
completion of the scheme by December 2026.
2 Southwark OSD, SE1
The site is located above Southwark tube station and prior to the
formation of the joint venture, planning was obtained for a 222,000 sq
ft NIA office scheme. We have been conducting feasibility studies to
determine the most appropriate and valuable use for the site and we
are now having detailed pre-application discussions with Southwark
Borough Council regarding a purpose-built student accommodation
scheme. The proposed scheme comprises c.430 studio units, with
the delivery of a separate on-site affordable housing component
located in a new adjacent building. We aim to submit a planning
application during summer 2024, with the ambition to commence on
site upon acquisition in July 2025 and complete in summer 2027.
3 Paddington OSD, W2
Situated close to the Elizabeth Line station at Paddington, this
19-storey building will provide 235,000 sq ft of office space. In the
year, we submitted a non-material planning amendment application
to introduce terracing to each individual office floor. We continue to
develop the design to enhance the scheme with a particular focus
on the end of trip facilities and arrival experience. The site will be
acquired by the joint venture in January 2026 and the intention is
to deliver the scheme in 2029.
Contracts were signed in July 2023, confirming Helical as
Places for London’s commercial office joint venture partner.
The long-term partnership will see the delivery of new high
quality and sustainable space predominantly above or
adjacent to key transport hubs. The joint venture consists
of three initial development opportunities.
The Platinum
London
Portfolio,
1
2
3
1
2
3
CGI
CGI
CGI
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35
The Loom, E1
This former Victorian wool warehouse offers 108,540 sq ft of office
space and we continue with our active management approach to this
asset and are seeking to reduce the vacancy through flexible lease
offerings. During the year the vacancy rate increased from 28% to
35% although five new lettings, totalling 12,001 sq ft, were completed.
Post year end, we have completed three lettings and have eight units
under offer to four tenants which would reduce the vacancy rate to
26% once completed.
SUSTAINABILITY RATINGS
EPC
B
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 asset is being actively
marketed for sale.
The Power
House, W4
SUSTAINABILITY RATINGS
EPC
C
21,268 sq ft
ground floor unit
let to Metropolis
108,540 sq ft
Former Victorian wool
warehouse
Our portfolio
continued
Brettenham
House, WC2
We continue to provide development advice to the owner of
Brettenham House, a 1930s heritage office building located on
the Thames and adjacent to The Savoy and Somerset House,
with formal arrangements to be concluded imminently. We have
utilised our expertise in retrofit and refurbishments to assist with
the design of a comprehensive refurbishment of the building
and obtaining planning consent for extensive amenity which
will significantly upgrade this asset. Construction is due to
commence in summer 2024 upon finalising terms for our
“equity-light” participation.
The Bower,
EC1
The Bower is a prominent 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 where significant remodelling works have taken
place, providing extensive additional public realm to occupiers.
The Warehouse and The Studio
The Warehouse and The Studio comprise 141,141 sq ft of fully-let
office space. In addition, there is a further 10,298 sq ft of retail space
across the buildings with these units also being fully let following
two lettings in the year to a restaurant operator and a hair and
beauty studio.
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
operators Serata Hall and Wagamama.
In October, we took decisive action to forfeit the WeWork leases for
six floors in The Tower following non-payment of rent.
Subsequently, we entered into a short-term lease with WeWork who
re-occupied the building to 24 December 2023, with Helical having
received a fee equivalent to the whole of the unpaid September
quarter’s rent and service charge due under the terms of the previous
contractual arrangements. WeWork continue to operate on the third
floor to June 2024 when the incumbent tenant vacates. In addition,
we signed a management agreement with infinitSpace to provide
serviced office space on the first and second floors at The Tower.
This space has been well received by WeWork’s historic subtenants
and new tenants alike and provides valuable flexible space for the
campus. As part of our active asset management approach, we are
in the process of refurbishing the fourth, fifth and sixth floors. Once
completed, the floors will be let on a CAT A+ basis.
We have let the 14th floor, comprising 9,568 sq ft, to existing tenant
Incubeta who have relocated from the 16th floor. We let the 11,306 sq ft
16th floor to Verkada as expansion space. The company now has
contiguous floors, having already occupied the 17th floor.
The Tower is 84% let, up from 62%, following the forfeiture of the
original WeWork leases, with good interest being shown in the
remaining space from existing and potential new tenants.
SUSTAINABILITY RATINGS
BREEAM
Excellent
EPC
B
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In the first half of the year, we completed the sale of the last residential
unit thereby ending our involvement in the residential elements of the
scheme. Subsequently, we completed the sale of the retail element
of the scheme in Q4 2023, which was the final component of the
development. Since 2014, the joint venture has built 235 apartments,
three office buildings totalling 249,000 sq ft and 21,000 sq ft of retail
across 10 units. Through outperformance, we increased our share of
profit from our 33% equity participation to 44% and made a total profit
of £41m with a 26% IRR.
Sales completed
of all 236 apartments
21,000 sq ft retail
Sold during the year
Winner
of Housing Design Award
and RIBA London Award
25 Charterhouse Square comprises 42,921 sq ft of office
space, overlooking the historic Charterhouse Square and
adjacent to the Farringdon East Elizabeth Line station.
During the year, we exchanged on the sale of the long
leasehold interest to a real estate fund managed by global
alternative investment manager Ares Management for
£43.5m. We completed on the sale on 25 April 2024.
25 Charterhouse
Square, EC1
Barts Square,
EC1
Our portfolio
continued
SUSTAINABILITY RATINGS
EPC
B
Portfolio analytics
SEE-THROUGH TOTAL PORTFOLIO BY FAIR VALUE
Investment
£m
Investment
%
Development
£m
Development
%
Total
£m
Total
%
London Offices
- Completed properties
561.5
85.0
–
–
561.5
84.8
- Development pipeline
99.0
15.0
1.4
82.4
100.3
15.1
Total London
660.5
100.0
1.4
82.4
661.8
99.9
Other
0.1
0.0
0.3
17.6
0.5
0.1
Total
660.6
100.0
1.7
100.0
662.3
100.0
SEE-THROUGH LAND AND DEVELOPMENT PORTFOLIO
Book value
£m
Fair value
£m
Surplus
£m
Land and Developments
1.4
1.7
0.3
Total
1.4
1.7
0.3
CAPITAL EXPENDITURE
We have a committed and planned development and refurbishment programme.
Property
Capex
budget
(Helical share)
£m
Proposed equity
(Helical share)
£m
Proposed debt*
(Helical share)
£m
Pre-redeveloped
space
sq ft
New space
sq ft
Total
completed
space
sq ft
Completion
date
Investment – committed
– 100 New Bridge Street, EC4
59.4
3.0
56.4
167,026
27,629
194,655
Q2 2024
– 10 King William Street, EC4
32.9
32.9
–
–
140,000
140,000
Q4 2024
– Southwark OSD, SE1
11.0
11.0
–
–
TBD
TBD
Q3 2025
– Paddington OSD, W2
30.2
30.2
–
–
235,000
235,000
Q1 2026
Investment – planned
– 10 King William Street, EC4
62.0
9.8
52.2
–
140,000
140,000
Q4 2024
– Southwark OSD, SE1
61.8
21.8
40.0
–
TBD
TBD
Q3 2025
– Paddington OSD, W2
122.9
38.7
84.2
–
235,000
235,000
Q1 2026
* Assumes 55% LTC debt facility arranged for future schemes.
The property portfolio in numbers
Strategic Report
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39
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
Fair
value
weighting
%
Passing
rent
£m
%
Contracted
rent
£m
%
ERV
£m
%
ERV change
like-for-like
%
London Offices
- Completed properties
85.0
23.6
100.0
33.0
100.0
42.9*
70.5
-0.7
- Development pipeline
15.0
–
0.0
–
–
17.8
29.3
5.6
Total London
100.0
23.6
100.0
33.0
100.0
60.7
99.8
1.1
Other
0.0
0.0
0.0
0.0
0.0
0.1
0.2
0.0
Total
100.0
23.6
100.0
33.0
100.0
60.8
100.0
1.1
* Includes 25 Charterhouse Square, EC1, which has been sold post year end.
See-through
total portfolio
contracted rent
£m
Rent lost at break/expiry
(5.7)
Lease expiry to allow redevelopment
(7.1)
New lettings
7.1
Net decrease in the year from asset management activities
(5.7)
Contracted rent reduced through disposals
(0.3)
Total contracted rental change from sales
(0.3)
Net decrease in contracted rents in the year
(6.0)
Investment portfolio
VALUATION MOVEMENTS
Valuation change
incl. sales and
purchases
%
Valuation change
excl. sales and
purchases
%
Investment
portfolio
weighting
31 March 2024
%
Investment
portfolio
weighting
31 March 2023
%
London Offices
– Completed properties
(19.8)
(19.6)
85.0
83.4
– Development pipeline
(35.3)
(35.3)
15.0
16.6
Total
(22.6)
(22.4)
100.0
100.0
PORTFOLIO YIELDS
EPRA topped
up NIY
31 March
2024
%
EPRA topped
up NIY
31 March
2023
%
Reversionary
yield
31 March
2024
%
Reversionary
yield
31 March
2023
%
True equivalent
yield
31 March
2024
%
True equivalent
yield
31 March
2023
%
London Offices
– Completed properties
5.1
4.1
6.9
5.7
6.5
5.6
– Development pipeline
n/a
3.6
6.1
5.1
5.7
4.9
Total
5.1
4.0
6.6
5.5
6.3
5.4
SEE-THROUGH CAPITAL VALUES, VACANCY RATES AND UNEXPIRED LEASE TERMS
Capital value
31 March
2024
£ psf
Capital value
31 March
2023
£ psf
Vacancy rate
31 March
2024
%
Vacancy rate
31 March
2023
%
WAULT
31 March
2024
Years
WAULT
31 March
2023
Years
London Offices
– Completed properties
982
1,166
17.6
19.8
6.6
5.8
– Development pipeline
508
835
100.0
2.6
0.0
0.7
Total
880
1,104
37.6
16.1
6.6
5.0
SEE-THROUGH LEASE EXPIRIES OR TENANT BREAK OPTIONS
Year to
2025
Year to
2026
Year to
2027
Year to
2028
Year to
2029
2029
onward
% of rent roll
15.8
3.7
12.8
30.5
7.1
30.1
Number of leases
20
9
11
13
5
19
Average rent per lease (£)
260,030
134,922
384,495
772,366
466,332
521,731
Contracted rent (£)
5,200,606
1,214,299
4,229,447
10,040,764
2,331,658
9,912,882
TOP 15 TENANTS
We have a strong rental income stream and a diverse tenant base. The top 15 tenants account for 75.2% of the total rent roll.
Rank
Tenant
Tenant industry
Contracted rent
£m
Rent roll
%
1
Farfetch
Online retail
4.3
13.1
2
J Sainsbury
Retail
3.0
9.1
3
Brilliant Basics
Technology
2.4
7.2
4
VMware
Technology
2.2
6.6
5
Verkada
Technology
1.9
5.9
6
Partners Group
Financial services
1.9
5.7
7
Anomaly
Marketing
1.5
4.5
8
Viacom
Technology
1.2
3.5
9
Allegis
Media
1.1
3.3
10
Dentsu
Marketing
1.1
3.2
11
Stripe
Financial services
1.0
2.9
12
Openpayd
Financial services
0.9
2.7
13
WeWork
Flexible offices
0.9
2.6
14
Three Crowns
Legal services
0.8
2.5
15
Incubeta
Marketing
0.8
2.4
Total
25.0
75.2
LETTING ACTIVITY – NEW LEASES
Area
sq ft
Contracted rent
(Helical’s share)
£
Rent
(excl Plug and Play and
managed lettings)
£ psf
Increase to
31 March 2023 ERV
(excl Plug and Play and
managed lettings)
%
Average
lease term to
expiry
Years
Investment Properties
Completed – offices
– The Tower, EC1
20,874
1,760,000
85.00
0.1
10.0
– The Loom, E1
12,001
657,000
48.56
-11.7
3.2
– The JJ Mack Building, EC1
96,894
4,495,000
92.79
1.8
13.3
Offices Total
129,769
6,912,000
89.59
1.2
11.5
Completed – retail
– The Warehouse, EC1
2,938
130,000
44.25
-4.4
5.0
– The JJ Mack Building, EC1
3,953
100,000
50.59
2.1
15.0
Retail Total
6,891
230,000
47.89
-0.6
9.3
Total
136,660
7,142,000
87.23
1.1
11.5
The property portfolio in numbers
continued
Strategic Report
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
40
41
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.
The see-through results for the year to 31 March 2024 include net
rental income of £25.5m, a net loss on sale and revaluation of the
investment portfolio of £188.6m and development profits of £0.4m,
leading to a Total Property Return of -£162.7m (2023: -£51.4m).
Other income of £0.9m less total see-through administrative costs
of £11.3m (2023: £13.3m) and see-through net finance costs of £11.1m
(2023: £12.0m) plus see-through losses from the mark-to-market
valuation of derivative financial instruments of £5.6m (2023: gains of
£12.8m) contributed to an IFRS loss of £189.8m (2023: £64.5m).
The Company has proposed a final dividend of 1.78p per share
(2023: 8.70p) which, if approved by Shareholders at the 2024 AGM,
will be payable on 2 August 2024. The total dividend paid or payable
in respect of the year to 31 March 2024 will be 4.83p (2023: 11.75p),
a decrease of 59%.
The EPRA net tangible asset value per share decreased by 32.9%
to 331p (31 March 2023: 493p).
The Group’s investment portfolio, including its share of assets held
in joint ventures, decreased to £660.6m (31 March 2023: £839.5m)
primarily due to the net loss on revaluation of the investment portfolio
of £187.1m after lease incentives of £4.1m, offset by capital
expenditure on the investment portfolio of £17.3m.
The Group’s see-through loan to value at 31 March 2024 was 39.5%
(31 March 2023: 27.5%). The Group’s weighted average cost of debt
at 31 March 2024 was 2.9% (31 March 2023: 3.4%) and the weighted
average debt maturity was 2.1 years (31 March 2023: 2.9 years).
At 31 March 2024, the Group had unutilised bank facilities of £83.8m
and cash of £31.7m on a see-through basis. These are primarily
available to fund future property acquisitions and capital expenditure.
The completion of the sale of 25 Charterhouse Square, EC1 plus the
sale of 50% of our development scheme at 100 New Bridge Street,
EC4, following the year end, have reduced our net borrowings
resulting in a pro-forma LTV of 28.7%.
Overview
The financial results for the year are dominated by the outward
yield movement experienced across the office sector reflected in
investment property valuation losses. With yields on our completed
investment portfolio having moved out by an average of 95bps in
the year, the financial results show a net valuation loss of £187.1m
compared to a loss of £92.8m the previous year.
Results for the year
The IFRS loss for the year of £189.8m (2023: £64.5m) includes
revenue from rental income, service charges and development
management fees of £39.9m, offset by direct costs of £14.5m to give
a net property income of £25.4m (2023: £36.3m). Other income of
£0.9m (2023: £nil), from the sub-letting of part of the Company’s
head office, was recognised in the year. There was a net loss on sale
and revaluation of investment properties of £181.2m (2023: £93.3m)
and the loss from joint venture activities was £9.3m (2023: gain of
£3.5m). Administrative expenses of £11.0m (2023: £12.8m) and net
finance costs of £7.9m (2023: £10.9m), were further increased by a
loss in the fair value of derivatives of £5.6m (2023: gain of £12.8m).
The Group holds a significant proportion of its property assets in joint
ventures. As the risks 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.
2024 Performance
Financial highlights
EPRA PERFORMANCE
EPRA PROFIT
£4.3m
(2023: £11.5m)
EPRA EPS
3.5p
(2023: 9.4p)
EPRA NTA PER SHARE
331p
(31 March 2023: 493p)
TOTAL ACCOUNTING RETURN ON EPRA NTA
-31.4%
(2023: -12.1%)
IFRS PERFORMANCE
LOSS AFTER TAX
£189.8m
(2023: £64.5m)
LOSS PER SHARE (EPS)
154.6p
(2023: 52.6p)
DILUTED NAV PER SHARE
326p
(31 March 2023: 489p)
TOTAL ACCOUNTING RETURN
-31.7%
(2023: -9.4%)
Financial review
Strategic Report
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
42
43
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 administrative 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.
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.
Net asset value
IFRS diluted net asset value per share decreased by 33.3% to 326p
per share (31 March 2023: 489p) and is a measure of Shareholders’
Funds divided by the number of shares in issue at the year end,
adjusted to allow for the effect of all dilutive share awards.
EPRA net tangible asset value per share decreased by 32.9% to 331p
per share (31 March 2023: 493p). This movement arose principally
from a total comprehensive expense (retained losses) of £189.8m
(2023: £64.5m), less £14.4m of dividends (2023: £13.8m).
EPRA net disposal value per share decreased by 33.3% to 327p per
share (31 March 2023: 490p).
Earnings/(loss) per share
The IFRS loss per share increased from a loss of 52.6p to a loss of
154.6p and is based on the after tax loss 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 was 3.5p compared to
an earnings per share of 9.4p in 2023, reflecting the Group’s share of
net rental income of £25.5m (2023: £33.5m) and development profits
of £0.4m (2023: £3.2m), but excluding losses on sale and revaluation
of investment properties of £188.6m (2023: £88.1m).
Total Property Return £m
-£162.7m
2024
2023
2022
2021
2020
-162.7
-51.4
89.5
48.6
83.9
Total Accounting Return on IFRS net assets %
-31.7%
2024
2023
2022
2021
2020
-31.7
-9.4
15.0
3.3
7.7
MSCI Property Index %
-20.3%
2024
2023
2022
2021
2020
-20.3
-5.6
10.7
7.0
9.6
Total Accounting Return on EPRA net tangible assets %
-31.4%
2024
2023
2022
2021
2020
-31.4
-12.1
10.2
4.5
9.3
Financial review
continued
Share of results of joint ventures
Net rental income recognised in the year was £0.8m (2023: loss of
£0.8m) as a result of the letting progress at The JJ Mack Building, EC1.
The revaluation of our investment assets held in joint ventures
generated a loss of £5.9m (2023: surplus of £5.1m). A loss of £1.5m was
recognised in respect of the sale of our retail units at Barts Square, EC1,
offset by a profit on sale of our last remaining residential unit of £0.6m.
Finance, administrative and other sundry costs totalling £3.5m (2023:
£1.5m) were incurred. An adjustment to reflect our economic interest
in the Barts Square, EC1 development to its recoverable amount
generated a profit of £0.2m (2023: loss of £0.6m), and after a tax
charge of £nil (2023: £nil), there was a net loss from our joint ventures
of £9.3m (2023: profit of £3.5m).
Loss on sale and revaluation of investment properties
The deficit on valuation and loss on sales of our investment portfolio
on a see-through basis resulted in an overall loss on sale and
revaluation, including in joint ventures, of £188.6m (2023: £88.1m).
Administrative expenses
Recurring administrative costs in the Group, before performance
related awards, decreased 8% from £9.9m to £9.1m with an additional
£0.7m of costs reflecting an accelerated depreciation of leasehold
improvements at our current head office, in anticipation of our move
to new offices later in the year.
The Group has reviewed all categories of expenditure, seeking
efficiencies and cost reductions where available with the aim to
reduce our overheads by 25% by the end of March 2025.
Performance related share awards and bonus payments, before
National Insurance costs, decreased to £1.2m (2023: £2.7m). Of this
amount, £1.0m (2023: £1.1m), 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 £0.1m (2023: £0.3m).
In joint ventures, administrative expenses decreased from £0.5m
to £0.3m.
2024
£000
2023
£000
Recurring administrative expenses (excluding
performance related awards)
(9,051)
(9,845)
Accelerated depreciation of leasehold improvements
(680)
–
Performance related awards
(1,155)
(2,702)
NIC
(125)
(288)
Group
(11,011)
(12,835)
In joint ventures
(338)
(459)
Total
(11,349)
(13,294)
Income Statement
Rental income and property overheads
Gross rental income, before adjusting for lease incentives, for the
Group in respect of wholly owned properties decreased to £33.3m
(2023: £34.9m).
Offset against gross rental income are lease incentives of £5.8m
reflecting the net reversal of previously recognised rental income
accrued in advance of receipt (2023: £1.6m). In this year, £2.9m of
this adjustment related to the unexpired lease incentives provided to
WeWork which have been reversed on the termination of their leases
during the year. Overall this resulted in a gross rental income of wholly
owned properties of £27.5m (2023: £33.3m).
2024
£000
2023
£000
Gross rental income (excluding lease incentives)
33,344
34,947
Lease incentives
(5,830)
(1,632)
Total gross rental income
27,514
33,315
Gross rental income in joint ventures increased to £2.0m (2023: £0.3m).
Property overheads in respect of wholly owned assets and in respect
of those assets in joint ventures increased to £4.0m (2023: £3.4m)
reflecting increased vacancy in the portfolio.
Overall, see-through net rents decreased by 23.8% to £25.5m
(2023: £33.5m).
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 2027 on a see-
through basis, based on the tenant leases as at 31 March 2024. The
actual adjustment will vary depending on lease events such as new
lettings and early terminations and future acquisitions or disposals.
Accrued income
£000
Adjustment to
rental income
£000
Year to 31 March 2024
8,816
(4,105)
Year to 31 March 2025
14,293
5,477
Year to 31 March 2026
16,895
2,602
Year to 31 March 2027
15,169
(1,726)
Rent collection
Year to
31 March 2024
%
Rent collected to date
99.5
Rent concessions
0.5
At 22 May 2024, the Group had collected 99.5% of all rent contracted
and payable for the financial year to 31 March 2024.
Development profits
During the year, there was a profit of £0.9m on legacy retail schemes
at East Ham and Kingswinford plus development management fees of
a further £0.1m were recognised. These were offset by a write back of
the expected development management promote fee at The JJ Mack
Building, EC1 and other development costs of £1.2m, which led to a
net development loss of £0.2m (2023: profit of £2.0m).
Strategic Report
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
44
45
Financial review
continued
Finance costs, finance income and change in fair value of derivative financial instruments
Net finance costs excluding change in fair value of derivative financial instruments, including joint ventures, reduced to £11.1m (2023: £12.0m).
Group
2024
£000
2023
£000
Interest payable on secured bank loans
(5,493)
(8,284)
Other interest payable and similar charges
(3,115)
(2,780)
Total interest payable before cancellation of loans
(8,608)
(11,064)
Cancellation of loans
–
(128)
Total finance costs
(8,608)
(11,192)
Finance income
661
274
Net finance costs
(7,947)
(10,918)
Change in fair value of derivative financial instruments
(5,609)
12,757
Finance costs, finance income and change in fair value of derivative financial instruments
(13,556)
1,839
Joint venture
2024
£000
2023
£000
Interest payable on secured bank loans
(3,012)
(2,703)
Other interest payable and similar charges
(211)
(203)
Interest capitalised
–
1,815
Total finance costs
(3,223)
(1,091)
Finance income
43
23
Net finance costs
(3,180)
(1,068)
Total finance costs, finance income and change in fair value of derivative financial instruments
(16,736)
771
Net finance costs excluding change in fair value of derivative financial instruments
(11,127)
(11,986)
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. There is no
deferred tax charge in the current year.
The current tax charge for the year was £nil (2023: £nil), with an under provision of £0.2m being recognised in relation to a prior year; the total
tax charge for the year was £0.2m (2023: £nil).
Dividends
In light of the results for the year and the fall in EPRA earnings, the Board will be recommending to Shareholders a reduction in the final dividend
to 1.78p (2023: 8.70p) per share, representing the minimum PID payment required under the REIT regime. This represents an 80% fall on last
year. If approved by Shareholders at the 2024 AGM, the total dividend for the year will be 4.83p, down 59% on 2023.
Balance Sheet
Shareholders’ Funds
Shareholders’ Funds at 1 April 2023 were £608.7m. The Group had a loss of £189.8m (2023: £64.5m), representing the total comprehensive expense
for the year. Movements in reserves arising from the Group’s share schemes resulted in a net deduction of £3.4m. The Company paid dividends to
Shareholders during the year of £14.4m. The net decrease in Shareholders’ Funds from Group activities during the year was £207.6m to £401.1m.
Investment portfolio
Wholly
owned
£000
In joint
ventures
£000
See-through
£000
Head leases
capitalised
£000
Lease
incentives
£000
Book
value
£000
Valuation at 31 March 2023
693,550
145,975
839,525
6,481
(14,172)
831,834
Capital expenditure
– wholly owned
16,052
–
16,052
(14)
–
16,038
– joint ventures
–
1,211
1,211
(31)
–
1,180
Letting costs amortised
– wholly owned
(168)
–
(168)
–
–
(168)
– joint ventures
–
(70)
(70)
–
–
(70)
Transfer to assets held for sale
– wholly owned
(42,845)
–
(42,845)
(2,105)
1,133
(43,817)
Disposals
– joint ventures
–
(4,676)
(4,676)
–
158
(4,518)
Revaluation (deficit)/surplus
– wholly owned
(186,989)
–
(186,989)
–
5,776
(181,213)
– joint ventures
–
(4,190)
(4,190)
–
(1,743)
(5,933)
Valuation at 31 March 2024
479,600
138,250
617,850
4,331
(8,848)
613,333
The Group expended £17.3m on capital works across the investment portfolio, at The JJ Mack Building, EC1 (£1.2m), 100 New Bridge Street,
EC4 (£13.6m), The Bower, EC1 (£0.8m), The Loom, E1 (£0.7m) and The Power House, W4 (£1.0m).
Revaluation losses resulted in a £191.2m decrease in the see-through fair value of the portfolio, before lease incentives, to £617.9m (31 March
2023: £839.5m). The accounting for head leases and lease incentives resulted in a book value of the see-through investment portfolio of
£613.3m (31 March 2023: £831.8m).
Debt and financial risk
In total, the see-through outstanding debt at 31 March 2024 of £296.1m (31 March 2023: £290.4m) had a weighted average interest cost of 2.9%
(31 March 2023: 3.4%) and a weighted average debt maturity of 2.1 years (31 March 2023: 2.9 years).
Debt profile at 31 March 2024*
Total
facility
£000s
Total
utilised
£000s
Available
facility
£000s
Weighted
average
interest rate
%
Average maturity
of facilities
Years
£300m Revolving Credit Facility
300,000
230,000
70,000
2.9
2.3
Total wholly owned
300,000
230,000
70,000
2.9
2.3
In joint ventures
69,900
66,141
3,759
2.8
1.3
Total secured debt
369,900
296,141
73,759
2.9
2.1
Working capital
10,000
–
10,000
–
–
Total unsecured debt
10,000
–
10,000
–
–
Total debt
379,900
296,141
83,759
2.9
2.1
*Including commitment fees but excluding the amortisation of arrangement fees.
Secured debt
The Group arranges its secured investment and development
facilities to suit its business needs as follows:
• £300m Revolving Credit Facility
The Group cancelled a surplus £100m of its £400m Revolving Credit
Facility in the year. The value of the Group’s properties secured in
this facility at 31 March 2024 was £522m (31 March 2023: £693m)
with a corresponding loan to value of 44.0% (31 March 2023: 33.2%).
The average maturity of the facility at 31 March 2024 was 2.3 years
(31 March 2023: 3.3 years).
• Joint venture facilities
The Group has a number of investment and development properties
in joint ventures with third parties and includes our share, in
proportion to our economic interest, of the debt associated with each
asset. In the year, the one-year extension on The JJ Mack Building,
EC1 facility was exercised, resulting in an average maturity of the
Group’s share of bank facilities in joint ventures at 31 March 2024 of
1.3 years (31 March 2023: 1.3 years) with a weighted average interest
rate of 2.8% (31 March 2023: 4.2%). The average interest rate has
fallen to 2.75% in the year as a result of letting progress and will
reduce to 2.25% once the building is over 90% let.
Unsecured debt
The Group’s unsecured debt is £nil (31 March 2023: £nil).
Cash and cash flow
At 31 March 2024, the Group had £115.5m (31 March 2023: £244.2m)
of cash and agreed, undrawn, committed bank facilities including its
share in joint ventures.
Net borrowings and gearing
Total gross borrowings of the Group, including in joint ventures, have
increased from £290.4m to £296.1m during the year to 31 March 2024.
After deducting cash balances of £31.7m (31 March 2023: £54.7m) and
unamortised refinancing costs of £2.8m (31 March 2023: £4.3m), net
borrowings increased from £231.4m to £261.6m. The see-through gearing
of the Group, including in joint ventures, increased from 38.0% to 65.2%.
31 March
2024
31 March
2023
See-through gross borrowings
£296.1m
£290.4m
See-through cash balances
£31.7m
£54.7m
Unamortised refinancing costs
£2.8m
£4.3m
See-through net borrowings
£261.6m
£231.4m
Shareholders’ Funds
£401.1m
£608.7m
See-through loan to value
39.5%
27.5%
Pro-forma see-through LTV
28.7%
–
See-through gearing – IFRS net asset value
65.2%
38.0%
Pro-forma see-through gearing – IFRS net asset value
40.3%
–
Following the sale of 25 Charterhouse Square, EC1 and the sale
of a 50% stake in our 100 New Bridge Street, EC4 development,
both completed since 31 March 2024, our pro-forma see-through
LTV has fallen to 28.7% and our see-through gearing on our IFRS
net asset value to 40.3%.
Hedging
At 31 March 2024, the Group had £230.0m (31 March 2023: £230.0m)
of borrowings protected by interest rate swaps, with an average
effective interest rate of 2.6% (31 March 2023: 2.6%) and average
maturity of 2.3 years. In our joint ventures, the Group’s share of fixed
rate debt was £66.1m (31 March 2023: £60.4m) at 0.5% plus margin,
which has reduced as a result of letting progress at The JJ Mack
Building, EC1, resulting in an effective rate at 31 March 2024 of 2.8%.
31 March
2024
£m
Effective
interest rate
%
31 March
2023
£m
Effective
interest rate
%
Fixed rate debt
– Secured borrowings
230.0
2.6
230.0
2.6
Total
230.0
2.6
230.0
2.6
Floating rate debt
– Secured
–
–
–
–
Total
–
2.91
–
3.11
In joint ventures
– Fixed rate
66.1
2.82
60.4
4.22
Total borrowings
296.1
2.9
290.4
3.4
1 This includes commitment fees on undrawn facilities. Excluding these would reduce the
effective rate to 2.6%.
2 This includes commitment fees on undrawn facilities. Excluding these would not impact the
effective rate (31 March 2023: reduce to 4.00%).
Tim Murphy
Chief Financial Officer
22 May 2024
Strategic Report
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
46
47
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
proactive risk identification
and effective management
When making business decisions, the Board assesses
all potential risks faced by the Group and considers the
effect that such risks could have on the achievement of
our strategic priorities and long-term success.
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 is tailored to support the delivery of the
Group’s strategy.
The Board confirms that during this reporting period it has
carried out a robust assessment of the Group’s emerging
and principal risks (please see Audit and Risk Committee
Report, pages 118 to 121, for details of the work undertaken
by the Directors during the reporting period).
The identification of risk occurs primarily at Board level through
application of Helical’s Risk Management Framework (see page 50).
As part of this process, the Risk Register and corresponding Risk Heat
Map (please see pages 51 to 59) are produced. The Board meets at
least twice a year to assess the appropriateness of the Risk Register,
taking into account the macroeconomic environment, current projects,
recent performance and past experience.
Emerging risks
The Group continuously considers both prevailing and emerging risks
as part of 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. Helical’s emerging risks are
incorporated into the Group Risk Register and are therefore
presented alongside those currently deemed to be prevailing risks.
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 potential future risks. External insight is also used to
assist with the horizon scanning process.
On a bi-annual basis, a summary of both prevailing and emerging
risks is presented for assessment to the Audit and Risk Committee
and the Board.
The Group has identified the following as being the most significant
emerging risks for our business:
• Geopolitical
–Political instability and unrest having a significant knock-on effect
on global economies and trade
• Disruptive technology
–Metaverse
–AI
• Climate-related risk
–Physical risks presented by the changing climate.
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.
Our risk appetite is adaptive. Our appetite for risk is low if the risk
presents a hazard to our operations or strategy. If a risk presents the
Group with a strategic opportunity, our risk appetite will be higher.
Where our risk appetite is moderate, we carefully balance the risk and
our mitigation efforts with the potential reward. 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
93). The risk culture aligns with the strategy and objectives of the business.
Our appetite for risk in each principal risk category is set out below:
Strategic
Financial
Operational
Reputational
Low
Medium
High
Risk management
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.
RISK MANAGEMENT APPROACH
Top down approach
Bottom up approach
Organisational structure
Behaviours
Personal ethics
Personal predisposition to risk
Tone from the top
Business as usual
Tone from the middle
Risk culture
Risk culture
Strategic Report
Roles and 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 risk management capabilities.
Strategic Report
Helical plc — Annual Report and Accounts 2024
49
Helical plc — Annual Report and Accounts 2024
48
Likelihood
Impact
Mapping our principal risks
PRINCIPAL RISKS
CHANGE
Strategic
risks
1
The Group's strategy is
inconsistent with the market
2
Risks arising from the Group’s
significant development projects
3
Property values decline/reduced
tenant demand for space
4
Geopolitical and economic
5
Climate change
Financial
risks
6
Availability and cost of bank
borrowing, cash resources and
potential breach of loan covenants
Operational
risks
7
Our people and relationships with
business partners and reliance on
external partners
8
Health and safety
9
Significant business disruption/
external catastrophic event/
cyber-attacks to our business and
our buildings
Reputational
risks
10 Poor management of stakeholder
relations and non-compliance
with prevailing legislation,
regulation and best practice
9
3
6
5
1
10
2
7
8
4
Go
ve
rn
an
ce
Go
ve
rna
nc
e
Objective
setting
Risk
identification
Risk
assessment
Risk
response
Control
activities
Monitoring
Information &
communication
Board
Operational monitoring and
reporting responsibility
Audit and Risk
Committee
Executive
Committee
Management
team
Asset managers
All staff
Strategic implementation and
compliance responsibility
Risk
culture
Risk
culture
Internal
environment
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 six years to March 2030, 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 eighteen months)
cash requirements of the Group on a monthly basis and cash
balances and movements are monitored weekly.
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.
Principal risks and sensitivity analysis
In making its assessment, the Board considers the Group’s principal
risks and assesses their combined potential impact in severe, but
plausible, downside scenarios together with the likely effectiveness
of mitigating actions that the Group has at its disposal.
The assessment included the following key assumptions:
• Rental income – whilst the Group has a WAULT of 6.6 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
£300m Revolving Credit Facility which expires in July 2026;
• 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 future
changes to the interest base rate until July 2026.
The most relevant risks and their potential impact are highlighted below:
Risk areas
Principal risks
Loss of rental income
Tenants unable to pay their rent due to
one or more of the following:
• Recession due to inflationary pressures
• Pandemic or geopolitical event
Loss of rental income could put debt
covenants under pressure requiring
partial/complete loan repayment
Property valuation falls could put debt
covenants under pressure requiring
partial/complete loan repayment
• Significant business disruption/
external catastrophic event/
cyber-attacks to our business and
our buildings
• Property values decline/reduced
tenant demand for space
• Geopolitical and economic
• Availability and cost of bank
borrowing, cash resources and
potential breach of loan covenants
Risk management
continued
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 page 154.
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 six-year period to 31 March 2030.
Our principal risks
We recognise that the Group is exposed to a wide range of risks,
not all of which are listed in our Risk Register (see below at pages 52
to 59). However, when determining our principal risks, we have
selected those risks that we believe are likely to have the greatest
impact on the delivery of our strategic objectives.
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;
• Understanding 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
• 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.
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51
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
Description
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, let
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.
Inconsistency between the market and the
Group’s strategy has the potential to negatively
impact our share price and result in reduced
market sentiment/shareholder satisfaction.
There continues to be uncertainty regarding
the future of the office given the continuation of
hybrid working practices across the UK. The
risk of future pandemic outbreaks also poses
a threat to the future of the office.
Mitigating actions
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 interpreting 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 engage closely with our occupiers to ensure we are offering
space that meets their business needs.
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 Board directly and indirectly engages with the Helical
Shareholders on the Group’s strategy and the Directors’
decision making and execution of strategy is heavily influenced
by the feedback received from our Shareholders.
The Board continually assesses the viability of the Group
strategy with respect to the demand for office space in
central London.
Probable impact (post mitigation)
The market continues to favour the “best-in-class”
space with strong sustainability credentials and
such assets continue to command premium rents.
Helical’s portfolio is well positioned to respond to
this trend. The office is no longer seen as a fixed
asset, but as an overall workplace experience that
is not tied to a physical location and desirability
is influenced by increased investment in on-site
amenities, better workplace technology, flexible
space layout, work models and increased
sustainability credentials. Helical continues to
place great emphasis on innovation and design
in the areas of sustainability, technology, service
provision and health/wellbeing.
Demand for the best quality buildings in the best
locations is expected to remain robust in 2024.
This will lead to rental growth in most UK office
markets at the prime end of the spectrum.
Sentiment towards the future of the office
continues to improve, but hybrid working
practices are still in existence across the majority
of UK businesses.
Further, there remains a risk of future pandemics
which could affect our strategy.
Through ongoing engagement with our
stakeholders, the impact of a divergence
between the market and our strategy is mitigated,
but only to an extent.
Review of the Risk Register – March 2024
In assessing the appropriateness of the Group’s Risk Register for March 2024, the Directors considered the Group’s performance,
the macro-political and economic environment, and all the business projects currently being undertaken. The Group’s Risk Register
is shown below and should be read in conjunction with the Heat Map on page 51:
Risk management
continued
Risks arising from the Group’s significant development projects
Link to strategy
Property
YoY change
Description
The Group conducts 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 monetary impact of cost inflation,
adverse valuation or other market factors
which could affect the Group’s financial
capabilities and targeted financial returns.
Sustainability is becoming ever more important
in the planning process, with local authorities
and the Government placing considerable
emphasis on climate change e.g. requiring
justification for demolition over refurbishment.
Mitigating actions
Management carefully reviews the prospective performance and
risk profiles 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 conducts developments in
partnership with other organisations and pre-lets space to
reduce development risk, where considered appropriate.
The management team is highly experienced and has a track
record of developing best-in-class office spaces in highly
desirable, well-connected locations.
Management places significant focus on timely project delivery
and strong relationships with construction partners with
appropriate risk sharing. We choose 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.
We continually collaborate with our suppliers and contractors to
mitigate risks arising from our developments.
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 is 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.
Management considers acceleration of digitalisation of logistics
and supply chain management, such as real-time warning
systems that forecast shortages at an early stage, as crucial
to responding agilely and avoiding delays in real estate
developments.
The Group is striving to reduce the carbon footprint of its
development activities and is continuously looking to evolve its
strategy in this regard.
Probable impact (post mitigation)
The Group has started the enabling works
at 100 New Bridge Street, EC4 (“100 NBS”),
and we are progressing the three sites to be
developed in joint venture with TfL.
There continues to be the risk of insolvencies in
the construction industry given the uncertainties
around the future macroeconomic environment
and geopolitical market influences. Material costs
remain a near-term challenge for the real estate
industry, despite some signs that the price trend
of key commodities is easing.
Despite technological advancements, supply
chain bottlenecks, recent geopolitical escalations
and economic uncertainty were, and still are,
challenges for the sector and a risk for the
global economy.
Labour related issues also remain very much to
the fore, with skills shortages being problematic
across the industry.
In addition, financial constraints due to economic
uncertainty are viewed as an increasingly
significant obstacle to development activities.
The risk has increased in severity given the
commencement of the 100 NBS enabling works in
late 2023. As the pipeline progresses with the TfL
joint venture, this risk’s severity will not decrease.
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53
Risk management
continued
Strategic risks continued
Property values decline/reduced tenant demand for space
Link to strategy
Property
YoY change
Description
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.
The potential adverse impact of the political
and economic environments on property yields
has heightened the risk of a fall in property
values. Falling valuations could lead to
uncertainty regarding development scheme
returns and the viability of future office
development schemes. The Group’s net asset
value and gearing levels will also be impacted
by a fall in property values.
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.
There remains a risk of continued economic
downturn given the broader geopolitical
climate, inflation and current interest rate levels.
This could result in further pressure on rent
collection figures with a prolonged period
of corporate failures, leading to a decline in
occupancy and increase in office vacancies.
This risk is further heightened by bank failures
and impact on liquidity.
Mitigating actions
The Group’s property portfolio has tenants from diverse
industries, reducing the risk of over-exposure to one sector. We
conduct regular occupier financial covenant checks ahead of
approving leases in order to limit our exposure to tenant failure.
Management accounts which include the Group’s performance
against the financial covenants are reviewed by the Board on
a quarterly basis. Management regularly 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 continue to design and innovate in the
areas of sustainability, technology, wellbeing and service
provision and, working closely with our management agents,
Ashdown Phillips, we engage with our occupiers to understand
their evolving needs and respond quickly and collaboratively to
any changing requirements.
The Board and management team continually monitor the
property market. The bi-weekly management meeting considers
factors such as new leases, lease events and tenant issues with
respect to each property in the portfolio.
Probable impact (post mitigation)
Despite the strong market sentiment towards
new, best-in-class office space, the impact of
interest rate rises will halt the expansion in the
office jobs market during 2024. Following healthy
increases in the last two years, research
suggests that office-based employment is to
remain largely unchanged in 2024.
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. Despite slowing jobs growth, UK
office take-up in 2024 is expected to increase
relative to the levels seen in 2023.
The cost of debt and lack of liquidity issues
impacted yields in 2023, with further property
valuation falls predicted for Q1 2024. However,
yields are expected to remain stable and may
start to tighten over the next 12–24 months.
Geopolitical and economic
Link to strategy
Growth
YoY change
Description
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.
Furthermore, the impacts on London’s
desirability arising from political uncertainty,
government policies and the potential
disruption of energy supplies are of concern
to the business.
Macroeconomic drivers, such as interest rates,
can significantly impact pricing in the real estate
market. For example, in order to curb inflation,
the Bank of England has been raising interest
rates, thus increasing the cost of borrowing,
which in turn provides challenge for investors.
Political instability and unrest can have a
significant knock-on effect on global
economies and trade (as evidenced by the
Russo-Ukrainian and the Israel-Hamas wars
which have led to volatility in energy prices).
Geopolitical risks lead to changed market
dynamics and influence, such as the increasing
role of governments in economies and the
shifts in geopolitical powers.
Mitigating actions
Management monitors macroeconomic research and economic
outlook considerations are incorporated into the Group’s annual
business plan.
Management conducts ongoing assessments of the impacts of
current macroeconomic and geopolitical concerns.
We will continue to monitor the economic and political situations
in the UK and globally, and adapt any business decisions
accordingly.
Management seeks advice from experts to ensure it
understands the political environment and the impact of
emerging regulatory and tax changes on the Group. It maintains
good relationships with planning consultants and local
authorities. Where appropriate, management joins with industry
representatives to contribute to policy and regulatory debate
relevant to the industry.
Probable impact (post mitigation)
Geopolitical uncertainty from conflicts continues
to affect global and local economies e.g.
inflationary pressures arising from supply chain
shortages, high interest rates and energy costs.
These conflicts could escalate or spread to
include other countries.
However, whilst the duration of inflation will
significantly impact the sector, commercial
offices remain an attractive asset class.
With respect to the UK’s near-term
macroeconomic outlook, the inflation rate
significantly fell towards the end of 2023 and is
expected to continue its downward trajectory.
Although it is anticipated that base rates will stay
high for an extended period, there is the real
prospect of rate reductions in the latter half of
2024, which would be advantageous for both
occupiers and investors, and should stimulate
increased activity.
The interest rate environment has dominated the
office investment landscape since rates started
rising in the second half of 2022, severely
constraining volumes. It is expected that this will
ease in the second half of 2024, but investment
volumes in the first half will remain low.
Many of the significant geopolitical risks that the
world faces in 2024 come from existing conflicts
and tensions. Experts have identified the
elections in the United States (amid increasing
polarisation and declining trust in the country’s
political system); a possible escalation of the
Israel-Hamas war into wider conflict in the Middle
East; and a further deepening of the Russo-
Ukrainian war as most significant.
In addition, the following geopolitical risks have
the potential to affect the global economy:
• Increased cooperation between China, Iran,
North Korea and Russia;
• The reported setbacks to the Chinese growth
model; and
• The possibility of conflict arising from
authoritarian regimes.
Over half of the world’s population will vote in
general or local elections worldwide this year.
Therefore, elections will be a key political theme
in 2024 and could have a significant impact on
the direction of the global economy. This effect
will be seen not only through potential changes
in trade and investment policies but also by
increased uncertainty and political polarisation.
The upcoming UK General Election (currently
anticipated to be 4 July 2024) will add further
uncertainty and may delay business decision
making. The Group needs to be alert to the risks
of changes to political stability, government
structure, and economic policies that may come
with a change in Government. Investor and
tenant decision making and timing could be
impacted, and the Election may cause volatility
in the stock market.
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55
Strategic risks continued
Climate change
Link to strategy
Sustainability
YoY change
Description
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. Having strong sustainability credentials
is a market differentiator and provides a
competitive advantage.
There is also the 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
and the actions taken to safeguard against it.
The Group is also alert to the physical risks of
climate change, e.g. the increasing severity and
frequency of extreme weather events which
pose threats to real estate assets.
Mitigating actions
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 Board has a
designated Non-Executive Director responsible for sustainability.
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. The
Group will conduct detailed scenario analysis of the risks and
opportunities on an annual basis to ensure the appropriate
actions/responses are taken.
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.
Probable impact (post mitigation)
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 by their stakeholders
to proactively respond. Pressure for greater
disclosure by real estate owners and investors
continues to intensify.
Building and operating buildings which are
resilient to climate change protects shareholder
value. 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.
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, cash resources and potential breach of loan covenants
Link to strategy
Financing
YoY change
Description
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 and requires new sources of debt
to finance its development programme.
The Group is at risk of increased interest rates
on unhedged borrowings.
If the Group breaches debt covenants, lending
institutions may require the early repayment
of borrowings.
The lack of global liquidity has the potential
to create significant obstacles for the Group.
Liquidity risk could lead to missed opportunities
or financial losses.
Mitigating actions
The Group maintains good relationships with many established
lending institutions and borrowings are spread across a number
of such lenders.
Funding requirements are reviewed monthly by the management
team, which seeks to ensure that the maturity dates of
borrowings are spread over several years.
Management monitors the cash levels of the Group on a weekly
basis and maintains sufficient levels of cash resources and
undrawn committed bank facilities to fund opportunities as
they arise.
The Group hedges the interest rates on the majority of its
borrowings, effectively fixing or capping the rates over
several years.
Covenants are closely monitored throughout the year.
Management conducts 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.
Probable impact (post mitigation)
Increased stability in the forward interest rate
market has led to more confidence in capital
and debt maturity.
Whilst the turmoil seen in the banking sector,
with the collapse of the Silicon Valley Bank
and the acquisition of Credit Suisse by UBS,
has not worsened, there remains instability in the
global markets and concern for the rest of the
financial sector.
The Group has exercised its option to extend its
development financing of The JJ Mack Building,
EC1 by a year and is in discussions to extend its
£300m RCF. The Group has cash and undrawn
bank facilities available to it and an appropriate
level of borrowings.
Operational risks
Operational risks are internal risks that could prevent the Group from delivering its strategy.
Our people and relationships with business partners and reliance on external partners
Link to strategy
Growth
People
YoY change
Description
The Group’s continued success is reliant on
its management and staff and maintaining
its successful relationships with its joint
venture partners.
Ineffective succession planning, or failure to
attract, develop and retain the right people with
requisite skills, as well as failing to maintain a
positive working environment for employees,
could inhibit the execution of our strategy and
diminish our long-term sustainability.
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 may 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.
Mitigating actions
Our people
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 Helical.
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.
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,
which regularly conducts on-site reviews and monitors cash flows
against budget.
The Group seeks to actively monitor and maintain excellent
relationships with its specialist professional advisors, often
engaging parties with whom it has successfully worked previously.
Probable impact (post mitigation)
Although there is strong competition for talent in
the employment market at present, this risk has
remained broadly similar due to our high staff
retention levels.
Succession plans are in place for key roles within
Helical, and this supports the long-term success
of the business.
External factors such as geopolitical tensions and
high levels of demand for certain raw materials and
components continue to place increased pressure
on supply chains and distribution networks.
Labour shortages continue to pose a challenge
to the industry.
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.
Health and safety
Link to strategy
Property
People
YoY change
Description
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 Board conducts continuous assessment
and is responsible for the management of
the potential impacts of new building and
fire safety regulations, including under the
Building Safety Act 2022.
As a real estate developer, we are exposed
to public liability risks and there is always the
potential for accidents to occur on our sites
involving occupiers or employees.
Mitigating actions
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 Group has an H&S Committee to oversee, and drive improved
performance in, the strategies, policies, working practices of
the Group in relation to health and safety. The Committee also
monitors relevant legal and regulatory developments.
Ongoing training in H&S is conducted by our employees
as appropriate.
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 conduct
regular site visits.
To address public liability risks, through our robust H&S risk
management strategies, we ensure our properties are properly
maintained, safety protocols are in place and we conduct regular
risk assessments to identify and mitigate potential hazards.
We have invested in comprehensive public liability insurance to
provide financial protection in the event of legal claims arising
from injuries or property damage.
Probable impact (post mitigation)
As we have begun the on-site development
activities at 100 NBS, this risk is therefore a key
area of focus for the business and has increased.
Risk management
continued
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Risk management
continued
Operational risks continued
Significant business disruption/external catastrophic event/cyber-attacks to our business and our buildings
Link to strategy
Growth
Property
YoY change
Description
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.
The increasing reliance on and use of digital
technology heighten the risks associated with
IT and cyber security.
• The Group relies on information technology
(“IT”) to perform effectively as a cyber-attack
could result in IT systems being unavailable,
adversely affecting the Group’s operations
and reputation.
• Commercially sensitive and personal
information is electronically stored by the
Group. Theft of this information could
adversely impact the Group’s commercial
advantage and result in penalties where the
information is governed by law (GDPR and
Data Protection Act 2018).
• The Group is at risk of being a victim of social
engineering fraud.
• The Group increasingly employs IT solutions
across its property portfolio to ensure its
buildings are “smart”. However, proptech
solutions, such as sensors and automation,
may risk physical damage to property if they
fail, for example if new systems are retrofitted
to old wiring.
Misinformation and disinformation may
radically disrupt electoral processes in several
economies over the next two years.
The metaverse and artificial intelligence (AI)
are two forms of disruptive technology which
have been identified as having the potential to
reduce the demand for physical office space,
and thus impact our strategy.
Mitigating actions
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.
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 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 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 and
disaster recovery network vulnerability 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.
The Group periodically instructs external reviews of its anti-
financial crime and cyber security frameworks and delivers training
to all staff.
The Group has a disaster recovery plan, on-site security at its
properties and insurance policies in place to deal with any external
events and mitigate their impact.
The Group has cyber insurance cover (broad enough to
encompass the cyber risks faced today/the future) to help mitigate
financial losses and liabilities associated with the compromise of
sensitive data.
The Group has business interruption insurance in place to help
cover financial losses if a temporary operational shutdown occurs.
Helical, through its suppliers, conducts proactive risk management
including routine maintenance, regular system updates, and
thorough testing to minimise these risks. Our insurance policies
have been extended to cover any damages resulting from
technological failures.
Probable impact (post mitigation)
Future pandemics could reduce people’s
appetite to work in and visit London for leisure
and therefore impact the demand for, and value
of, our buildings. The risk of pandemic is
therefore relevant to our business. The Russo-
Ukrainian war and associated sanctions, and the
Israel-Hamas war are continuing to put pressure
on global supply chains and economies.
Furthermore, the UK’s terrorism national threat
level continues to be rated as “substantial”.
Cyber risks persist as cyber criminals continue to
devise new ways to exploit and harm businesses
around the globe. Consequently, the Group’s
cyber security controls continue to be of
invaluable importance.
Misinformation and disinformation and cyber
insecurity are ranked first and fourth respectively
by the World Economic Forum as being the most
severe economic risks over the next two years.
Reputational risks
Reputational risks are those that could affect the Group in all aspects of its strategy.
Poor management of stakeholder relations and non-compliance with prevailing legislation, regulation and best practice
Link to strategy
Growth
People
YoY change
Description
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.
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 if any instances of, for example:
• modern slavery and human trafficking were
identified within its supply chain.
• non-compliance with GDPR and the Data
Protection Act 2018 were identified.
Non-compliance may also result in financial
penalties.
As a REIT, the Group is required to adhere to
the relevant legislation. Failure to comply could
result in adverse tax consequences.
Mitigating actions
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.
A Group Disclosure Policy and Share Dealing Code, Policy &
Procedures have been circulated to all staff in accordance with
UK legislation and regulation on market abuse.
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.
• 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. Periodically, staff receive 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 to combating slavery in our supply chain.
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.
The Group regularly monitors its current and projected
REIT compliance.
Probable impact (post mitigation)
This risk is consistent for the business due
to the ever changing legal and regulatory
landscape in which the business operates.
Impact of regulatory change and scrutiny
on operational resilience and management
practices continues to be a risk for
our business.
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Sustainability at Helical
While this has been a challenging year as an industry, we are
pleased to have made strong progress against our sustainability
commitments and targets, particularly with our joint venture
partnership with Places for London, which has also seen us
incorporate TfL’s comprehensive Sustainable Development
Framework into each of our joint venture schemes.
In the past year, we are thrilled to highlight several notable
accomplishments, among which is the remarkable achievement
of The JJ Mack Building, EC1. With a final BREEAM score of 96.4%,
the building has not only earned an Outstanding certificate but also
proudly holds the title of the highest-rated building in the UK
according to the latest guidance. At The Bower, EC1 we have invested
in on-site renewables with the installation of 80 solar photovoltaic
panels on the roof of The Warehouse. Once fully commissioned these
panels are expected to generate c.37,000 kWhs of energy annually –
the equivalent of planting 333 trees. Furthermore, we have made
significant progress in embedding circular economy principles into
our development practices, particularly at 100 New Bridge Street,
EC4 where a reuse strategy has been implemented to retain, reuse
and recycle significant elements of the existing building.
In the year there has been a particular focus on our engagement with
communities and how we can create social value in the areas where
we work. Not only have we expanded the network of charities that we
partner with but our staff doubled their number of volunteering hours.
With a pipeline of development projects spanning five years, we
believe there will be even greater scope to define, create and sustain
long-term social value in the coming year.
2024 ratings
GRESB (Global Real Estate
Sustainability Benchmark)
Score of 87/100
Standing investments
Score of 92/100
Developments
4 Green Star
rating
A rated public
disclosure
EPRA Sustainability
Reporting Awards
Gold award
AAA rating
B rating
Highlights
8%
Reduction in like-for-like energy consumption
(landlord and tenant)
6%
Reduction in Scope 1 and Scope 2 emissions
93%
Renewable energy sourced for all landlord
and procured tenant areas
£104,500
Social value of furniture donations
185 hours
Volunteering hours by Helical staff
Corporate ESG
Performance
to a sustainable
future
As we continue on our sustainability journey, we are pleased
to present our annual Sustainability Report, highlighting our
unwavering commitment to environmental stewardship and
social responsibility which is underpinned by transparent and
robust governance. Against the backdrop of a rapidly changing
climate and the urgent need for action, we recognise the pivotal
role we play in shaping a more sustainable future.
Our approach
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60
Sustainability at Helical
continued
As a leading London office developer, we
recognise the importance of embracing and
championing sustainable practices in our
operations. In an era marked by increasing
environmental concerns and resource
scarcity, we are committed to embedding
a circular economy model that prioritises
material efficiency, waste reduction and
innovative design solutions.
During the year there have been a number
of opportunities to adopt and implement
circular economy principles from construction
and development through to ongoing
management and tenant engagement.
By adopting a circular approach, we seek to
not only minimise our environmental impact
but also drive long-term social value for
communities while contributing to a more
resilient and sustainable built environment
for future generations.
Creating a circular
economy
100 New Bridge Street
Our major refurbishment at 100 New
Bridge Street, EC4, presented a
unique opportunity to establish a
clear Circular Economy Strategy from
the outset. With input from our design
team, we held a number of workshops
to highlight the opportunities available
to reuse, recycle and repurpose.
1
Reuse as much as possible
Early in the design process, the team
attended a dedicated site visit to
review potential items for reuse
within the existing building. These
items were recorded, scheduled and
factored into the proposed design.
2
Build with as little as possible
Any new construction to be efficient
and lightweight to minimise the
amount of new materials that need
to be used.
3
Use recycled and renewable
materials where possible
Material specification will prioritise
products with recycled components
and Environment Product
Disclosures to minimise the carbon
impact of new materials.
4
Design for future adaptation,
reuse and disassembly
New construction will be designed
to meet long-term need while being
adaptable and resilient. Building
layers will be accessible to allow
for alterations or replacements.
5
Minimise waste sent to landfill
Waste will be treated like a resource,
carefully managed to ensure that the
minimal amount is sent to landfill.
Façade
The East Façade will
be retained in full.
Mosaic tiles
Mosaic art wall to be
refurbished and retained.
Superstructure
81% of the existing steel
work will be reused in the
new building along with 91%
of the concrete core.
Staircase
Main core staircase to be
refurbished and left in situ.
Raised access floor tiles
and ceiling tiles
Original manufacturer to collect
and refurbish for resale.
Our vision for 100 New Bridge Street, EC4,
once fully redeveloped.
Glass canopy
Dissembled and returned
to original artist for reuse.
White granite
Granite from the façade
to be repurposed within
the building.
The building as a material bank
Existing building
CGI
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Sustainability at Helical
continued
Waste to Wonder
Waste to Wonder, a certified
social enterprise, provides a
pioneering Ethical Clearance
Process for redundant office
furniture and equipment. Not only
do they save disposal costs, they
also strengthen and support the
sustainability aspirations of their
customers by donating the
cleared furniture to schools
throughout the world. To date
they have collected over £34m
of redundant office furniture and
equipment and distributed to over
1,400 schools in 40 countries.
At The Bower, Waste to Wonder
were able to collect 12 tonnes
worth of furniture contributing
a donated value of c.£40,000
and resulting in a carbon
saving through reuse of
c.37,000 kgCO2e. The furniture
was donated to United Action for
Children in Cameroon (UAC), a
non-profit organisation founded
in 1996. Their activities include
education, sports, poverty
alleviation and food security.
Value of furniture donated
£81,000
100 New Bridge Street, EC4
At 100 New Bridge Street, EC4, the vacating tenants left a significant
proportion of their fixtures, fittings and furniture within the building.
As part of our wider reuse strategy we worked with our enabling
works and main contractor to establish how best we could rehome
and dispose of these fittings. The strategy involved engaging with
a number of charities, repurposing furniture within the site office
and welfare area and working with businesses who specialise in
second-hand furniture.
Green Skills Hub
For the remaining furniture we
were able to collaborate with the
Fleet Street Quarter Business
Improvement District, donating
the remaining items to their new
Green Skills Hub. The Hub,
which is due to open in May, is a
practical and theory education
hub for green and digital
construction skills. A first of its
kind live learning space, the
Green Skills Hub will provide
accredited and sought-after
green construction skills
courses, with the aim of finding
placements for students and
other service users. The value
of the donated furniture was
estimated at c.£37,000 with a
corresponding carbon saving
of c.19,000 kgCO2e.
We were thrilled to be able to support the
Fleet Street Quarter Business Improvement
District and their highly anticipated Green Skills
Hub. At Helical we recognise the urgent need
for a large, skilled workforce to decarbonise
commercial buildings including workforce gaps
in the design, construction, retrofit and building
maintenance sub-sectors. These hubs play
a pivotal role in upskilling the workforce
and we look forward to the cross-pollination
opportunities with our development sites
in the Fleet Street Quarter District.”
Laura Beaumont – Head of Sustainability at Helical
Linking social value with
the circular economy
There is an intrinsic link between the adoption
of circular economy principles and the creation
of long-term social value.
London National
Park City
Launched by the National Park
City Foundation, the charity is
a unique grassroots movement
aiming to make London greener,
healthier and wilder.
The London National Park City
has recently leased a store
at 109 Fleet Street to act as a
pop-up visitors centre to engage
the local community in how to
connect with urban nature. The
charity needed support with
sourcing materials and furniture
to get it ready for the public and
due to its proximity to 100 New
Bridge Street we were able to
donate furniture, kitchen
supplies and stationery.
The equivalent value of the
items donated to London
National Park City was c.£2,000.
The donation, and the hours
volunteered to support the
investment, has created a net
positive value to society worth
c.£11,500.
St Mungo’s
St Mungo’s is a charity which
supports people experiencing
homelessness across London,
the South East and South West
of England. The charity provides
a range of services, from
outreach teams who meet
people sleeping rough, to
running hostels and providing
emergency accommodation for
recovery, as well as rehabilitation
through skills development,
employment and reconnection.
Two local St Mungo’s services
(Great Guildford Street and
Pound Lane) have recently
undertaken refurbishments of
their services, and so required a
range of furniture to update and
refresh their accommodation for
service users and employees.
St Mungo’s representatives
visited 100 New Bridge Street,
EC4, and selected a range of
furniture, including chairs, desks
and sofas with delivery provided
by our contractor.
The equivalent value of the items
donated to St Mungo’s so far is
c.£2,000. The donation, and the
hours volunteered to support
the investment, has created a
net positive value to society
worth c.£12,000. This figure is
due to increase once further
items have been donated to
the charity.
The Bower, EC1
At The Bower, EC1, the forfeiture of WeWork’s lease resulted in
three fully fitted floors, including all soft furnishing being left to Helical.
Recognising that while the quality of these fixtures meant they were
not suitable to be reused within the building, we remained committed
to disposing of this furniture in a meaningful way.
Total social value created from
furniture donations
£104,500
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Sustainability at Helical
continued
Water efficiency – The building
incorporates intelligent water management
and recycling. Using real-time weather data,
the rainwater storage anticipates heavy rain,
altering its capacity accordingly. Greywater
is also gathered from 93% of showers and
5% of taps. Greywater and rainwater are
organically treated within the building and
recycled to feed toilet flushing systems.
Combined with low-flow and intelligent
fixtures, the system reduces mains water
consumption by up to 70%, while also
reducing carbon emissions. The building
has capacity to process 7m3 of reclaimed
water per day, saving around 2,682 kg of
CO2 per annum.
Smart technology – A building app has
been created to enable users to seamlessly
manage their space, including offering a
completely touch-free journey from door
to desk and control of air conditioning and
lighting. Each floor is split into four zones
to control air/cooling/heating/lighting, with
motion sensors transmitting occupancy data
to the building management system enabling
efficient management of air/cooling/heating/
lighting. Daylight management controls to the
perimeter of the building also form part of the
lighting strategy.
Whole life carbon – Intelligent material
choices to reduce embodied carbon include
using aluminium with high recycled content,
low carbon concrete with cement
substitutes, UK-produced structural steel
with high recycled content and reclaimed
lights and bricks. This along with efficient
design resulted in an embodied carbon of
741 kgCO2e/m2.
Operational emissions are reduced through
connection to Citigen, a large district heating
and power network located nearby. This not
only allows the building to benefit from
Citigen’s continual investment in low carbon
energy technologies but also eliminates the
need for in-building plant, creating extra
space. The roof of the building houses 144
photovoltaic panels (327W), generating
renewable power.
It was a privilege to work alongside Helical and the
design team, from concept through to completion,
to achieve the final BREEAM New Construction
2018 certification for The JJ Mack Building, EC1.
We are thrilled to see the dedication and
commitment of the entire project team culminate
in an Outstanding rating. This accomplishment
underscores the teams’ collective efforts and
the client’s innovative drive towards sustainability
and environmental responsibility.”
Hannah O’Brien – Sustainability Consultant at L&P Group
Integration between the systems within
The JJ Mack Building, EC1 has provided
the Facilities Management Team the
ability to closely monitor the property’s
consumption through data analytics,
reporting and live data being provided
from the systems installed. The systems
provide us with the ability to identify
optimisation/energy saving opportunities
through notifications, reporting and data
analytics to improve the reliability of the
systems thus reducing energy and water
consumption through un-commanded
operations of systems. Through this
process the Facilities Management
Team has been consistently driving
down energy consumption, be it for
the tenants in situ or the landlord
systems via reporting and energy
optimisation analytics.”
Russell Hookey – Facilities Manager at The JJ Mack Building, EC1
In March 2024, The JJ Mack Building, EC1, received its
final BREEAM certification rating of Outstanding with a
score of 96.4% making the building the highest scoring
major office development in the UK. This achievement
demonstrates our continued commitment to drive
sustainability forward on all our developments and
demonstrates what is possible when ESG is embedded
from the outset. The key driver of this achievement was
having an engaged design team, including Lifschutz
Davidson Sandilands and Long & Partners, who brought
their own passion for sustainability to realise the
ambitions of the project.
Innovation
highlights
Case study
The JJ Mack Building, EC1
The UK’s highest
BREEAM-rated major
office development
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67
Progress on our
Net Zero Carbon
Pathway
Sustainability at Helical
continued
We are committed to becoming
a net zero carbon business by
2030 and have set ourselves
a number of targets to track
how we are performing against
our ambition. As part of our
commitment we have set
out how we are progressing
across the defined Better Build
Partnership Net Zero Carbon
Pathway Framework.
Reduce embodied carbon
Embodied carbon arises from the greenhouse gas emissions
generated to build our buildings including emissions caused by
extraction, manufacturing/processing, transportation and assembly.
We have set ourselves a target of delivering new developments with
embodied carbon of less than 600 kgCO2e/m2. To achieve this target,
we will be using the principles set out in our guide “Designing for Net
Zero”, which details a 10-step process to maximise the opportunities
to reduce embodied carbon.
Progress in the year
As part of our pathway, we have committed that all our future
developments will be net zero carbon in both construction and
operation. While there is no universally accepted standard for a net
zero carbon building, we will be aligning with the definitions set by the
UK Green Building Council (“UKGBC”) and, once published, the UK
Net Zero Carbon Building Standard. In collaboration with Mace, we will
be using 100 New Bridge Street, EC4 as a Beta test to apply this new
standard and will be sharing the results of this journey throughout.
No developments completed in the year and therefore we have no
final embodied carbon results to report on, however see below for
the targets we are pursuing on our pipeline of projects.
• 100 New Bridge Street, EC4 – 436 kgCO2e/m2
• 10 King William Street, EC4 – 600 kgCO2e/m2
• Southwark Over Station Development, SE1 – 600 kgCO2e/m2
• Paddington Over Station Development, W2 – 600 kgCO2e/m2
1
Maximise renewable energy
Buildings will always need some form of heating and cooling. Once
the efficiency of these systems has been maximised, they need to
be powered through renewable energy supplies wherever possible.
For our existing portfolio, we have investigated the opportunities for
on-site 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
on-site renewable energy through the installation of PV solar panels
and electric air-source heat pumps.
Progress in the year
During a review of our existing assets, one suitable location at
The Bower, EC1 was found for the installation of PV panels.
In October 2023 we installed 80 PV panels on the roof of The
Warehouse; once fully commissioned these panels are expected to
generate c.37,000 kWh of energy annually resulting in a 7.5 tCO2e
saving, the equivalent to planting 333 trees.
For our development sites, we will be using a combination of on-site
PV panels and all electric air source heat pumps to power the
buildings in operation.
3
Reduce operational energy
Operational energy is the energy used to operate a building. 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.
Progress in the year
Reducing the operational energy of our buildings and driving down
energy intensity across our managed assets is a key element of our Net
Zero Carbon Pathway. Over the past year we have taken a hands-on
approach to monitoring the buildings that account for the majority of our
energy usage. At The Bower, EC1, which accounts for over 50% of our
total energy usage, we have been working with our M&E contractors to
reduce equipment run times and optimise how the building is powered.
This collaborative process resulted in an 8% saving in total energy
usage in the year, and 18% over the past two years.
The expectation is that all commercial lettable space will require an
EPC B or higher rating by 2030. As it currently stands, 99% by value
of our managed portfolio are EPC A or B, and we are therefore well
placed for any incoming legislative changes. This outlook was
further reinforced when The Bower, EC1 recently renewed its EPC
certificates and retained its B rating against the more stringent Part L
2021 requirements.
2
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.
In alignment with the BBP’s 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.
Progress in the year
We have had no new buildings complete in the year, and therefore
we have not recognised any embodied carbon or procured any
carbon offsets. However we have made a commitment that all future
developments will be net zero carbon and therefore recognise that
there will be a requirement to purchase offsets in the coming years.
We are still in the process of formalising Helical’s strategy for carbon
offsetting and how we wish to procure offsets. We still believe that the
Oxford Offsetting Principles offer a clear and robust set of guidelines,
recognising these have been revised recently to provide clarifications
to the original text based on the latest science, calls for a major
course-correction in carbon markets and offsetting practices.
We are also awaiting the formal publication of the UK Net Zero Carbon
Building Standard which we hope will provide some clarity on
offsetting for net zero carbon developments. In the meantime,
Helical is a member of the Better Build Partnership Net Zero Aligned
Offsetting Procurement Guide working group and is actively
participating in developing this framework.
4
Read our Net Zero
Carbon Pathway
Scan the QR code
to read our report or
visit the Sustainability
section of our website.
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69
Net zero
carbon by 2030
90 kWh/m2
Energy intensity target
600 kgCO2e/m2
Upfront embodied carbon target
175
150
125
100
75
50
25
0
Building 1
Building 2
Building 3
Building 4
31-Mar-20
31-Mar-21
31-Mar-22
31-Mar-23
31-Mar-24
18% reduction
31-Mar-20
31-Mar-21
31-Mar-22
31-Mar-23
31-Mar-24
150
125
100
75
50
25
0
Decrease from
previous year
-20%
31-Mar-20
31-Mar-21
31-Mar-22
31-Mar-23
31-Mar-24
Scope 1
Scope 2
Scope 3 (excluding upfront embodied carbon)
10,000
8,000
6,000
4,000
2,000
0
Note 1
Sustainability at Helical
continued
Our environmental performance
Energy
Our total energy consumption has decreased significantly in the year
due to the vacant possession of 100 New Bridge Street, EC4 and The
JJ Mack Building, EC1 coming at the end of its commissioning period.
However, on a like-for-like basis we have seen an 8% reduction in
total energy consumption compared to the previous year, with like-
for-like electricity reducing by 10% and like-for-like gas by 4%. This
reduction is, in part, due to the significant efforts made at The Bower,
EC1, where we have made a number of operational adjustments to
drive down gas consumption.
Going forward our focus will be to electrify our buildings, reducing
our reliance on gas. Our property managing agents continue to work
closely with our tenants to understand their working arrangements in
order 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:
• Improved existing energy management practices;
• Hosting Green Groups at The Bower, EC1 and The Loom, E1;
• Increased coverage of climate and lighting controls;
• Installed photovoltaic panels at The Bower, EC1; 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 4%. Likewise,
our Scope 2 like-for-like emissions have also fallen by 10%.
Associated Scope 3 emissions arising from tenant energy
consumption have decreased significantly in the period by 26% due
to the vacant possession of 100 New Bridge Street, EC4. We have
extended the coverage of our Scope 3 emissions in the period to
include purchased goods and services and employee commuting.
Across these Scope 3 items we saw a 11% reduction as a result of
reduced development activities in the period.
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.
Water
Total water consumption across our head office, managed property
portfolio and development sites has seen a decrease of 14% in
comparison to the last reporting year. However, on a like-for-like basis
we saw an increase of 4% due to a water meter at The Loom, E1
having previously been missed. We were pleased to see a reduction
in water consumption at The Bower, EC1 of 9% as a result of our
continued monitoring.
We are yet to report on The JJ Mack Building, EC1 as it is not fully
occupied, with tenants carrying out their fit outs in the year. The
expectation is that the water systems installed on-site such as
greywater and rainwater harvesting will result in a highly efficient
building in respect of water.
Waste
Our recycling rate was 44% compared to 56% last year. The majority
of recyclable waste comes from occupier waste streams, i.e. food
waste, coffee cups, paper, packaging and glass. We have a target
recycling rate of 50% and we have therefore not achieved our target
for the year. However, of the six sites we collect waste data on, four
had a recycling rate of greater than 50%. We will be looking at ways
we can increase recycling rates at the underperforming buildings and
will include this as a topic when we host our Green Group meetings.
At our development sites we have a target of diverting 95% of waste
from landfill.
Performance against our Net Zero Carbon Pathway
As a signatory of the Better Buildings Partnership’s (“BBP”) Climate Commitment,
we are required to disclose progress annually against our Roadmap to Net Zero.
Our carbon footprint and narrative on progress during the last year is set out below.
The built environment is estimated to contribute around 40%
of the UK’s carbon emissions and it is therefore imperative
that the real estate industry addresses its carbon footprint.
Our Environment
Operational carbon footprint
During the year we have extended our
Scope 3 coverage to include purchased
goods and services and employee
commuting and we have restated the
previous two years to enable a fair
comparison between the years.
Our carbon emissions (Scope 1, 2 and 3)
have decreased by 20% compared to the
prior year. This decrease was in part driven
by the vacant possession of 100 New Bridge
Street, EC4 part way through the year.
A large portion of our carbon emissions
fall outside our direct control and form our
Scope 3 emissions; these are emitted by
our customers occupying our spaces. We
have not included our embodied carbon
emissions within this analysis as there have
been no developments completed in the
year. We will perform whole life carbon
assessments on all future developments
and recognise our Scope 3 emissions at
the point of practical completion.
Whilst there has been significant activity to
reduce carbon emissions during this time, the
nature of our business will cause our carbon
footprint to fluctuate due to new acquisitions,
disposals and the number, and completion
stage, of our developments on site.
Building energy intensity
We have set a 2030 building energy
intensity target for all our existing assets
and new developments of 90 kWh/m2.
It has been challenging to accurately
analyse energy intensity performance
due to fluctuations in occupancy levels.
However, there are four assets which we
have continued to monitor since 31 March
2020 and have had consistent levels of
occupancy in the period and these assets
account for 73% of our portfolio energy
consumption (not including 100 New
Bridge Street, EC4). On average these
assets reduced their energy intensity by
8% with an average energy intensity of
119 kWh/m2, representing a 18% reduction
from our 31 March 2020 baseline. At the
individual building level all four assets’
energy intensity has fallen year on year.
Looking forward we will continue to
monitor and drive energy down across
these assets, along with assets such as
The JJ Mack Building, EC1, which we
expect to be fully operational in the next
financial year.
Building energy intensity (kWh/m2)
Average building energy intensity (kWh/m2)
Operational carbon footprint (tCO2e)
* Note 1 – We have increased the coverage of our Scope 3
emissions in the year. We have readjusted the prior year
Scope 3 to enable a like-for-like comparison, however
the three years preceding this do not include this
additional coverage.
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71
Sustainability at Helical
continued
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
refurbishment 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.
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.
31 March 2024
31 March 2023
Gross internal floor area (m2)
108,487
130,057
Scope 1 emissions and direct energy use
Emissions associated with combustion of fuel (tCO2e)
430
460
Emissions associated with operation of facilities (refrigerant gas) (tCO2e)
–
–
Energy use of combustion of fuel (kWh)
2,343,337
2,500,145
Scope 2 emissions and indirect energy use
Emissions associated with purchased electricity, heat, steam and cooling usage (tCO2e)
906
972
Emissions associated with head office electricity usage (tCO2e)
35
22
Emissions associated with purchased electricity – location based (tCO2e)
787
855
Emissions associated with purchased electricity – market based (tCO2e)
221
314
Energy use of purchased electricity, heat, steam and cooling (kWh)
5,405,208
5,950,622
Energy use of electricity at head office (kWh)
168,883
111,865
Scope 3 emissions and indirect energy use
Purchased goods and services (tCO2e)
3,523
3,465
Capital goods – Upfront embodied carbon (tCO2e)
–
20,481
Fuel and energy related activities (tCO2e)
361
417
Waste generated in operations (tCO2e)
17
25
Employee commuting (tCO2e)
11
11
Downstream leased assets – tenant emissions (tCO2e)
1,168
2,155
Downstream leased assets – tenant energy (kWh)
5,689,551
9,518,187
Emissions and energy use totals
Absolute emissions Scope 1 and 2 – location based (tCO2e)
1,371
1,453
Absolute emissions Scope 1 and 2 – market based (tCO2e)
806
913
Total energy use Scope 1 and 2 (kWh)
7,917,429
8,562,632
Intensity measures*
Emissions per m2 gross internal area (tCO2e/m2/year)
0.013
0.011
Energy use per m2 gross internal area (kWh/m2/year)
72.98
65.84
Emissions per revenue (Scope 1&2 tCO2e/£m)
34.35
36.52
Emissions and energy use totals like-for-like*
Absolute emissions on a like-for-like basis (tCO2e)
973
1,052
Energy use on a like-for-like basis (kWh)
4,973,003
5,578,239
Intensity measures like-for-like*
Emissions per m2 gross internal area on a like-for-like basis (tCO2e/m2/year)
0.042
0.046
Energy use per m2 gross internal area on a like-for-like basis (kWh/m2/year)
210.34
243.14
*Using location-based emissions.
Third party verification
EcoAct was engaged by Helical to provide independent third party
limited verification of its direct (Scope 1) and indirect (Scope 2 and
selected Scope 3) greenhouse gas emissions, as detailed in the
Company’s carbon footprint SECR statement for the period from
1 April 2023 to 31 March 2024. Based on the data and information
provided by Helical and the processes and procedures followed,
nothing has come to EcoAct’s attention to indicate that the GHG
emissions totals for 31 March 2024 are not fairly stated and are free
from material error. This conclusion should be read in conjunction
with EcoAct’s full ISO 14064:3 limited verification statement available
in the Sustainability Performance Report 2024 on our website.
Creating social value within the communities we operate
in has been a fundamental aspect of our business ethos
for a number of years.
We acknowledge the profound influence our development and
management activities can have on our neighbourhoods, tenants
and the local economy. Not only are we able to support communities
through corporate giving and fundraising but also via direct
involvement through staff volunteering. We are pleased that in the year
Helical staff were able to expand on their volunteering hours from the
previous year and have each completed in excess of eight hours per
employee for the year. The following captures some key activities in
the year, however please see our full Sustainability Performance
Report for more details and how we engage with our tenants.
London Air Ambulance
This was the second year of Helical’s four-year commitment to support
London Air Ambulance and their appeal to replace their existing fleet
of air ambulances. London Air Ambulance has just entered its 35th
year of operation and responds to, on average, five seriously injured
patients in London every day, ensuring an expert advanced trauma
team can provide the best and most rapid care possible.
London City Farms
Helical again donated to London City Farms, supporting their
provision of space and education to London families since 1972.
The Lord Mayor’s Appeal
Helical has been a Partner of The Lord Mayor’s Appeal since 2018.
The Appeal supports pillar charities which for the year were MQ
Mental Health, The Duke of Edinburgh’s Award and National
Numeracy, chosen for their work addressing the social issues at the
centre of the Lord Mayor’s strategy: inclusion, mental health, skills
and philanthropy. To date, The Lord Mayor’s Appeal has delivered
pioneering programmes to improve the lives of one million Londoners.
The Reading Real Estate Foundation Bursary Scheme
This was the sixth year that Helical has provided a bursary for a
Real Estate student who would have otherwise faced financial
barriers to studying. Now completing their final year of studying,
the current recipient of the Helical bursary is completing their work
placement and has a promising career ahead of them.
The Story of Christmas
Helical was a silver sponsor of The Story of Christmas for its 46th
annual event. This Christmas charity event raises funds for a broad
and diverse range of projects benefitting the homeless and
disadvantaged children.
Our Communities
Charity partnerships
We continued to support our long-standing charitable partnerships
throughout the year, including:
LandAid
Helical has been a Foundation Partner of LandAid for over 10 years
and in that time has raised almost £1m in support of their work to
end youth homelessness. In the year LandAid awarded £734, 206
to 14 youth homelessness charities across the UK and it is estimated
this funding created 239 bedspaces for young people as well as
supporting other initiatives such as skills workshops, therapy and
access to employment programmes.
In addition to being a Foundation Partner, Helical is always eager to
participate in the fundraising events LandAid are so well known for.
In September two brave members of staff completed the LandAid
10K in the most adverse weather conditions. They joined 862 other
runners amidst torrential downpours to complete the run in very
respectable times whilst raising money and awareness of LandAid
and their work to end youth homelessness. In total the LandAid 10K
event raised more than £52,000.
LandAid 10K run.
London’s Air Ambulance was established in 1989
and responds to five patients every day in London.
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73
Hackney Night Shelter greatly appreciated the support
from the staff at Helical. We could not function as a
charity without voluntary support and this is especially
helpful during the day when our guests are out. The
team deep cleaned all the guest bedrooms, prepared
a scrumptious dinner and made sure we were fully
stocked with supplies in time for the return of our 20
guests in the evening. That night we had a new guest
arriving and they were so grateful for the welcome and
how their room looked, all thanks to the Helical staff.
All of the staff said how they would happily have the
team back again to help out. We had especially great
feedback about the apple cake!”
Molly (Hackney Night Shelter Coordinator)
Sustainability at Helical
continued
London City Farms
In August staff spent the day volunteering at London City Farms,
supporting the excellent in-house team with maintenance,
housekeeping and animal welfare work. Despite the heat the Helical
team worked tirelessly, conducting repairs, painting fences, cleaning,
sweeping, draining the duck pond, clearing nettles and mucking out
the animals. Participants learned about the extensive community
work conducted by London City Farms to support their key
objectives which include providing free-to-access, inclusive space
for the public; advancing education for all in agriculture, horticulture
and country life; protecting and improving the natural environment;
and promoting humanity and morality by advancing education in
the care and consideration of animals. Through their school visits,
shop, classes, café, workshops, work experience programme and
community spaces, London City Farms serve more than half a million
Londoners every year and provide a valuable green space in some
of London’s most built up areas.
Hackney Night Shelter
In January a team from Helical
spent the afternoon and evening
volunteering at Hackney Night
Shelter which has been
providing shelter and support
to homeless guests for over
25 years and is run almost
entirely by a large community of
volunteers. The group met with
one of the Directors of Hackney
Doorways, who explained the
way the shelter is funded and
operates, the demand on
services, the changing
landscape of homelessness
and the charity’s plans for
the future. Helical volunteers
spent the afternoon completing
housekeeping and maintenance
jobs around the centre,
conducting a stock-take,
shopping for, and preparing,
the evening meal for the guests
and staying at the shelter, with
some volunteers staying for the
evening to serve and enjoy
dinner with the guests.
Volunteering
The team of volunteers
at Hackney Night Shelter.
Cooking up a delicious supper
for the service users at the
Hackney Night Shelter.
The Helical team at
Spitalfields City
Farm in August.
185
Hours of staff volunteering
1 day
£3,000
Of volunteering per employee
Of social value created through
volunteering activities
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We aim to attract, inspire and engage a talented workforce,
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
Our stakeholders – Section 172(1) Statement on pages 88 to 99.
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 our
average length of service high at 12.4 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 676 hours of training and
development – an average of 3.5 days per employee.
31 March 2024
Total number
of staff
Average length of
service (years)
Executive Directors
3
29.8
Senior management (Executive
Committee and direct reports)
15
9.6
All employees (full-time and part-time)
27
12.4
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.
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.
As a small team we recognise how important it is foster an open,
understanding and kind culture and throughout the year we host
a number of events for staff, giving them the opportunity to spend
time together outside the workplace and team building.
Our People
Summer event
In July staff enjoyed their annual team away day and travelled to
Suffolk for a day learning wilderness skills including fire building, the
art of smoke signalling and the difficulty of raft building. Fortunately
the water on which the rafts were tested was not too cold as only one
raft survived the required return trip across the lake!
3
6
12
9
15
Executive Directors
Senior management
All employees
Male
Female
Family Christmas party
In December Helical hosted our first Christmas party for the family
members of all our staff. Children, nieces, partners, siblings, friends
and grandparents, sporting their finest party outfits, came to see our
office and meet all the Helical team. We hosted over 20 guests who
enjoyed games and snacks in the office and watched the varied ice-
skating skills on show at the Christmas ice skating rink on Hanover
Square. Father Christmas even managed to fit 5 Hanover Square into
his busy schedule and all our small guests found a present waiting for
them under the tree.
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 2024 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 2024, which includes detail on health and safety
performance in the year.
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 2024.
Sustainability at Helical
continued
Staff workshop
In April staff participated in the first of a series of in-house
workshops designed to bring staff together and participate in an
activity based around an area of expertise of one of their colleagues.
This first event focused on brand identity and the marketing and
launch of a new building. Staff worked in teams to create a brand and
marketing campaign for different buildings and then pitched their
ideas to an expert panel of external judges with a prize awarded
for the best.
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77
Sustainability at Helical
continued
KPI 1
Energy intensity
KPI 2
Scope 1 and 2 emissions
intensity
KPI 3
Volunteering hours
Rationale:
The energy consumption of our portfolio is a major
contributor to our carbon footprint. Lowering our energy
intensity is an essential part of delivering our Net Zero
Carbon Pathway.
Overall target:
Reduce energy intensity by 26% by 2026 compared to
a 31 March 2020 baseline; keeping us on track to meet
90 kWh/m2 by 2030, our net zero carbon target.
March 2024 target:
15.0% reduction in energy intensity compared to
2020 baseline.
Rationale:
Scope 1 and 2 emissions represent emissions which
Helical has direct influence over. Currently three of
our assets are still reliant on gas. We recognise the
need to move away from fossil fuels and enhance
on-site renewables.
Overall target:
Reduce Scope 1 and 2 emissions intensity (CO2e/sq ft)
by 35% by 2026 compared to a 2019 baseline.
March 2024 target:
18.6% reduction in Scope 1 and 2 emissions intensity
compared to 2019 baseline.
Rationale:
Volunteering gives employees the chance to build
connections with their local communities and give
back to society while working on issues they feel
passionate about.
Overall target:
Increase volunteering hours to an average of 16 hours
per employee by 2026.
March 2023 target:
Eight hours of volunteering per employee.
Performance:
Target met.
The energy intensity of our four RCF investment
properties fell by 18.5%. This is a result of
ongoing energy efficiency upgrades and
optimisation of building management systems.
Verified by:
EcoAct
Performance:
Target not met.
While our absolute Scope 1 and 2 emissions
fell by 6% compared to last year, on a intensity
basis our emissions increased as a result of
the smaller portfolio.
Verified by:
EcoAct
Performance:
Target met.
For the year to 31 March 2024, there was a
total of 185 hours of volunteering, an average
of 8.2 hours per employee. More details on
the activities we undertook can be found on
pages 73 to 75.
Verified by:
EcoAct
Revolving Credit Facility
Supported by our Revolving Credit Facility, we continue to monitor and report on the below KPIs.
Sustainability Linked Loan
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 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.
During the year we have reviewed the in-depth study performed in
2022 on climate scenarios and the quantitative analysis on the risks
and opportunities and the associated potential financial impact, and
have updated this as required.
We set out below our climate-related financial disclosures consistent
with all of the TCFD recommendations and recommended
disclosures, being the four TCFD recommendations and the 11
recommended disclosures set out in Figure 4 of Section C of the
report entitled “Recommendations of the Task Force on Climate-
related Financial Disclosures” published in June 2017 by the TCFD.
In making our assessment of consistency with TCFD
recommendations and recommended disclosures, we have
considered TCFD Guidance for All Sectors, Supplemental Guidance
for Non Financial Groups, where appropriate, and other relevant
TCFD guidance.
The TCFD framework
addresses four key areas:
Introduction:
Governance
Risk
management
Strategy
Metrics and
targets
The TCFD
framework
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Helical plc — Annual Report and Accounts 2024
Sustainability at Helical
continued
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 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 pages 48
to 59). As part of this process, the Risk Register and corresponding
Risk Heat Map are produced. The Board meets at least twice a year
to assess the appropriateness of the Risk Register, considering the
macroeconomic 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 for review. The Board also
considers 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 48 to 59.
Governance
The Board’s oversight of climate-related risks
and opportunities
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 Executives. 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, strategy, relevant targets and key
priorities. It is responsible for implementing policies which promote
the long-term sustainability of the Group and facilitate informed
decisions to 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
or more often as required.
Audit and Risk Committee
Ensures climate-related risks and capital
expenditure are appropriately reflected in
our financial statements and portfolio
revaluation. Also ensures climate-related
risks are appropriately identified,
monitored and managed. The Committee
typically meets four times per year.
Remuneration Committee
Ensures climate-related aspects are
appropriately included in executive
remuneration. The Committee typically
meets at least three times per year.
Nominations Committee
Ensures climate and environmental skills,
knowledge and experience are
considerations when assessing the
Board’s composition and the identification
of any skills gaps. The Committee meets
as required and at least twice per year.
The Board
Overall accountability for climate-related risks and opportunities
Executive Committee
Overall responsibility for oversight of climate-related risks and opportunities and typically meets monthly.
Sustainability Committee
Day-to-day oversight of climate-related risks and opportunities and meets quarterly.
Strategy
Climate-related risks and opportunities the organisation has identified over the short, medium and long term
As a property developer and investor, climate-related issues affect the way we design our new buildings and how we manage our existing
properties effectively. We take an active approach in managing climate-related risks and opportunities.
Within our business we consider the short, medium and long-term time horizons to be 0-3, 3-5 and 5-15 years linking to the period we develop,
hold and lease our properties. We also recognise that climate-related issues, in particular physical risks, are often (but not exclusively) linked to
the medium to long term.
Short term
(0-3 years)
1.5°C scenario
(IPCC, 2014:
Synthesis Report:
RCP2.6 SSP1)
In the short term we will continue to take a proactive approach to minimising the risks and maximising the opportunities
associated with our current and future tenants’ needs, the 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:
Transition risk
1. Minimum Energy Efficiency Standards (“MEES”)
Increasingly stringent rating requirements proposed by 2027 and 2030.
2. Emissions offsets
Increasing cost and constrained supply of high quality carbon offsets.
3. Planning
Increasing planning requirements.
4. Raw material costs
Increasing cost of raw materials used in construction.
Transition opportunities
1. Improving buildings and spaces to meet the more stringent EPC requirements and our net zero requirements align
with market and customer demand for more sustainable space leading to rental premiums. There are also operational
cost savings that can be achieved from the reduced energy intensity of more efficient spaces.
2. Increasing complexity of regulatory environment may present opportunities to acquire lower rated buildings at a
reduced price for retrofitting/refurbishment.
3. Knowledge of complex planning requirements, such as retrofit first, presents opportunity for Helical to acquire these
assets and develop them in line with planning requirements.
4. Strong relationships with main contractors and wider supply change may lead to securing materials more
competitively.
Physical risks
1. 100-year storms
Our London portfolio has a moderate exposure to damage and interruption from 1 in 100-year type storm damage
in this scenario.
Physical opportunities
1. Potential increase in valuation of buildings that are climate resilient and adaptable.
Medium term
(3-5 years)
2°C scenario
(IPCC, 2014:
Synthesis Report:
RCP4.5 SSP2)
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.
Transition risk
The risk impact, opportunities and likelihood are unchanged under this time horizon when compared to the 1.5°C
scenario. Helical has committed to decarbonise in a shorter time frame than the Government’s current policy approach.
Physical risks
1. 100-year storms
Within this climate scenario the current science is inconclusive on any material shifts to the intensity or frequency.
Therefore the risk profile has been deemed to be broadly similar to that in the short term.
2. Flooding
All of our current properties are either out of flood risk zones or protected by the Thames Barrier. As a result, the risk
of flooding under this scenario is considered moderate.
Physical opportunities
1. Potential increase in valuation of buildings that are climate resilient and adaptable.
2. Increased demand for buildings with climate resilience measures such as passive cooling, nature-based solutions
and sustainable urban drainage systems incorporated.
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Sustainability at Helical
continued
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
emissions scenarios.
We have conducted physical risk scenario analysis, including future
climate scenarios with global temperature increases of approximately
1.5°C (RCP2.6), 2°C (RCP4.5) 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.
We have aligned our strategy to a 1.5°C warming scenario, however
we have also reviewed 2°C and 4°C warming scenarios.
Impact of climate-related risks and opportunities
on the organisation’s businesses, strategy and
financial planning
We invest, develop and manage property in central London and
therefore climate-related risks have a direct impact on how we
develop and manage our buildings and are a consideration when
acquiring and selling assets and engaging with our tenants. This in
turn affects the kinds of suppliers and consultants we use to ensure
we have the requisite level of expertise. This is driven by an ever-
increasing demand from our stakeholders wanting buildings with
higher sustainability credentials, as well as the regulatory landscape
becoming more stringent and challenging. Our business model,
strategy and approach to financial planning recognise this and are
underpinned by our pathway to net zero, which sets out our transition
plan. Details of our pathway can be found at www.helical.co.uk/
sustainability/net-zero-carbon-pathway/
From the risks and opportunities we have identified above, we
have detailed how those risks and opportunities might impact
our business, strategy and financial planning.
Strategy continued
Physical risks
Description
Likelihood
Potential financial impacts
Impact on strategy
Impact on financial planning
100-year storm
Damage to our assets from
high winds and rainfall.
Moderate
to high
• Loss of rental income from
affected tenants
• Increased capital costs associated
with damage
• Increased operating costs from
potential power outages
• Increased development costs from
weather-related delays
Overall, the impact of such storms on
our portfolio does not impact our
business strategy, but instead requires
us to ensure we have the right building
maintenance and management
measures in place.
We do not believe there is a material
impact to our financial planning and
will continue to design climate
resilient features into our property
such as sophisticated weather
reactive water attenuation systems.
Flooding
Loss and damage to our
assets which are located
in high flood risk zones.
Low
• Loss of rental income from affected
tenants
• Increased capital costs associated
with damage
• Increased operating costs from
potential power outages
• Increased development costs from
weather-related delays
As with storms, the risks from flooding
do not impact our overall business
strategy, albeit we are likely to
undertake a greater level of due
diligence during the acquisition
process given future purchase targets
could potentially be in flood zones.
To ensure we understand the flood
risk of potential new acquisitions our
due diligence procedures will need to
be enhanced to account for a greater
level of flood mapping to ensure we
aren’t introducing higher levels of risk
and loss exposure into the portfolio.
Drought
Buildings are not resilient
to extreme temperatures
and suffer from malfunctions
and overheating.
Moderate
• Loss of rental income from
affected tenants
• Increased energy costs to
cool buildings
Our strategy is to acquire poor
performing buildings and carry
out extensive refurbishments to
delivery highly sustainable assets,
therefore our strategy already
addresses the need to invest in the
best technology and equipment
which is resilient to droughts.
We do not believe there is a material
impact to our financial planning
and will continue to design climate
resilient features into our buildings
such as passivhaus principles and
green roofs to minimise overheating.
Transition risks
Description
Likelihood
Potential financial impacts
Impact on strategy
Impact on financial planning
Minimum Energy Efficiency
Standards (“MEES”)
Current environmental
regulation in the UK prevents
leasing space with an
Energy Performance
Certificate (“EPC”) rating
of worse than E. This is
projected to increase to
a rating of B by 2030.
Moderate
to high
• Reduced rental income from poor
performing assets
• Increased capital and operational
cost to meet new regulations
99% of our portfolio by value holds an
EPC rating of B or above, however
there is a risk that the requirements of
EPCs will become more stringent or
other measures such as NABERS will
be implemented. We have embedded
the requirement to enhance energy
efficiency into our asset management
strategy and future capital expenditure.
Likewise, keeping up with market and
customer demand for properties which
have a low energy intensity and are
more efficient to operate.
We have a programme of ongoing
capex works which is monitored and,
where significant, is included within
our business model and cash flows.
Emissions offsets
As more companies commit
to net zero, the demand for
high quality carbon offsets
is increasing, resulting in
higher prices.
There is also an increasing
reputational risk associated
with greenwashing and the
use of emissions offsets
if carbon offsetting is
chosen as the only net
zero measure instead of
focusing on reducing
energy consumption/
emission first.
High
• We have currently modelled our total
Scope 1-3 emissions in 2030 to be
c.15,000 tonnes.
• Using a 2030 estimated carbon price
of between £50-100 per tonne, the
potential financial impact in 2030 is
£750,000-£1,500,000
We are currently reviewing our
offsetting strategy for the embodied
carbon emissions of our developments,
which will be described and quantified
in subsequent disclosures once
agreed.
Within our Net Zero Carbon Pathway
we have already set embodied carbon
targets for 2030 of 600 kgCO2e/m2.
These aim to drive down the amount
of embodied carbon on scheme
completion and subsequently the
need for and cost of offsetting.
Carbon pricing is included within
our development appraisals to
ensure we are mapping the financial
impact and our exposure to future
price increases.
Strategy continued
Long term
(5-15 years)
4°C scenario
(IPCC, 2014:
Synthesis Report:
RCP8.5 SSP5)
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.
Transition risk
Not modelled under this scenario/time horizon.
Physical risks
1. 100-year storms
Within this climate scenario the current science is inconclusive on any material shifts to the intensity or frequency.
Therefore the risk profile has been deemed to be broadly similar to that in the short/medium-term scenarios.
2. Flooding
No change from medium term.
3. Drought
Our portfolio could see a moderate risk of drought, between three to four months per year. This is a notable increase
over today’s climate.
Physical opportunities
Opportunities consistent with medium-term scenario.
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Sustainability at Helical
continued
Transition risks (continued)
Description
Likelihood
Potential financial impacts
Impact on strategy
Impact on financial planning
Planning
To meet net zero targets,
the government is likely
to increase planning
requirements, making them
increasingly stringent.
This will impact our
development activities and
lead to costs increasing to
ensure we are meeting the
requirements set out by
planning offices.
High
• Increased cost of net zero carbon
appropriate building design and
materials. We already include these
costs within our development
appraisals.
Our business strategy is already
aligned with these requirements as we
aim to deliver best-in-class sustainable
assets. Our guide “Designing for
Net Zero” ensures we are setting the
correct approach for our projects and
delivering climate resilient buildings.
The requirement to be net zero
is already factored into our
development appraisal process
and ensures we have a more robust
level of cost certainty and financial
forecasting ability.
Raw materials
There is a risk that raw
materials will become more
expensive when choosing
lower carbon materials.
High
• Increased construction costs
could lead to lower returns on
development projects.
As mentioned previously, our pathway
to net zero and “Designing for Net
Zero” ensure we choose the right
designs for our developments.
Included within these are ambitious
embodied carbon targets which drive
us to explore lower carbon materials
and construction methods. In reducing
the quantity of materials used, we will
limit our exposure to potential raw
material increases. However, we
recognise that the transition time frame
and subsequent availability of these
lower carbon materials is not yet
entirely clear. As a result, it could mean
it takes longer for us to employ such
materials in our developments.
In line with our approach to
embodied carbon we continue to
engage with our principal contractors
and suppliers on the impacts of using
traditional materials and moving
to less carbon intensive materials,
e.g. availability, cost and supply
chain knowledge.
Resilience of the organisation’s strategy considering
different climate-related scenarios
Our strategy is to acquire poor performing and inefficient “brown”
buildings and reposition these through a redevelopment programme
to create buildings which meet the needs of future occupiers.
Our properties are exposed to climate-related risks such as rising
temperatures. We ensure a high degree of resilience in our new
developments and regeneration of older properties by setting high
standards for sustainability, which includes climate-related aspects.
Our strategies “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 the physical and transitional
risks of climate change.
As a result, our strategy centres around the concept of continual
improvement which ensures a high degree of both climate and
financial resilience. Ultimately, we do not envisage having to
make changes to our overall approach when considering climate-
related scenarios.
The table opposite maps out the material risks and opportunities
drawn from our latest assessment and the resilience of our strategy
to the three different climate scenarios used in the assessment. Of
the risks identified, none were deemed likely to have a substantial
impact such that the viability of our business would be undermined.
Strategy continued
Short term
(0-3 years)
1.5°C scenario
(IPCC, 2014:
Synthesis Report:
RCP2.6 SSP1)
Transition risk
1.
Minimum Energy Efficiency Standards (MEES)
Under this scenario we have assumed the minimum EPC B rating will be in place. However, given our current portfolio is 99% EPC B or above
our exposure to this is low.
There is, however, a clear opportunity in that market and occupier demand for more sustainable space is leading to rental premiums.
Likewise, there are also operational cost savings that can be achieved from reduced energy intensity of more efficient spaces.
2.
Emissions offsets
In this scenario, UK net zero emissions will be deemed to have been met by 2050. This could lead to a significant increase in pricing of
voluntary offsets as demand grows as more companies seek to meet net zero targets by offsetting residual emissions. We have quantified
the potential financial impact of this in the previous tables and are in the process of defining our strategy to carbon offsets and ensuring our
overarching business strategy is resilient.
3.
Planning
In this scenario, it is assumed that the UK will need to increase the stringency of building planning and design requirements as part of its
efforts to meet its net zero targets. Our strategy already reflects this expected move – primarily via the introduction of our Net Zero Carbon
Pathway in May 2022.
There is an opportunity in that market and occupier demand for more sustainable space is leading to rental premiums. As a result, we will look
to take advantage of this opportunity and ensure our properties are aligned.
4.
Raw material costs
In this scenario, there is expected to be increased cost of high carbon raw materials such as steel, cement and glass, which would be further
impacted by a carbon tax.
Physical risks
1.
100-year storms
Our London portfolio has a moderate exposure to damage and interruption from 1 in 100-year type storm damage in this scenario.
Medium term
(3-5 years)
2°C scenario
(IPCC, 2014:
Synthesis Report:
RCP4.5 SSP2)
Transition risk
1.
Minimum Energy Efficiency Standards (“MEES”)
In this scenario, it is assumed there would be no increase in EPC requirements. However, with our strategy we would still look to improve our
properties in line with our net zero carbon strategy and overall business model. Likewise, to take advantage of market demand and occupier
preference opportunities.
2.
Emissions offsets
In this scenario, the price of voluntary offsets is anticipated to rise as demand grows as some companies seek to meet net zero targets by
offsetting residual emissions. However, the assumption is that the price does not increase by as much as under the 1.5°C scenario. The
increase in pricing of voluntary offsets is assumed to be in line with the projected carbon price.
3.
Planning
Under this scenario, it assumes there are no changes to existing planning requirements. Therefore, whilst we will have to ensure we meet
planning regulations, there will be no new, more stringent regulations introduced. However, we would still intend to follow our Net Zero Carbon
Pathway and therefore the impact and likelihood of this risk remains the same. In addition, this is supported by market and occupier demand
for more efficient spaces which we would look to take advantage of.
4.
Raw material costs
In this scenario, the increase in cost of key materials is anticipated to be substantially lower than in the 1.5°C scenario.
Physical risks
1.
100-year storms
Within this climate scenario the current science is inconclusive on any material shifts to the intensity or frequency. Therefore the risk profile
has been deemed to be broadly similar to that in the short term.
2.
Flooding
All our properties are either out of flood risk zones or protected by the Thames Barrier. As a result, the risk of flooding under this scenario is
considered moderate.
Long term
(5-15 years)
4°C scenario
(IPCC, 2014:
Synthesis Report:
RCP8.5 SSP5)
Transition risk
Not modelled under this scenario/time horizon.
Physical risks
1.
100-year storms
Within this climate scenario the current science is inconclusive on any material shifts to the intensity or frequency. Therefore the risk profile
has been deemed to be broadly similar to that in the short/medium-term scenarios.
2.
Flooding
No change from medium term.
3.
Drought
Our portfolio could see a moderate risk of drought, between three to four months per year. This is a notable increase over today’s climate.
Strategy continued
CGI
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Sustainability at Helical
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Risk management
The process for 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. We also engaged our
sustainability consultants, RPS, to perform scenario planning for us
and present the risks and opportunities under the modelled scenarios.
Transition risks were identified and discussed between senior
members of the Helical team with input from sustainability colleagues
and external consultants. The risks were then reviewed in terms of
impact and likelihood, in line with our business-wide risk assessment
processes. We have estimated some of the financial impacts,
however due to insufficient data not all risks and opportunities could
be fully modelled for financial impact. We intend to gather more data
over the coming months to enable us to present a fully costed
financial impact in next year’s TCFD statement.
The process of managing climate-related risks
and how processes for identifying, assessing and
managing climate-related risks are integrated into
the organisation’s overall risk management
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.
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.
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:
• 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; and
• For each property, the percentage certified as sustainable.
In our Net Zero Carbon Pathway we detail the following 2030 targets for embodied and operation carbon intensity for our assets:
• 600 kgCO2e/m2 embodied carbon intensity for new developments; and
• 90 kWh/m2 operation carbon intensity for all new developments.
Risk adaptation & mitigation metrics
Unit of measure
31 March 2024
31 March 2023
Applicable risks/
opportunity
% of portfolio with an EPC rating of “A”
% of fair value
30%
20%
Minimum Energy
Efficiency Standards
% of portfolio with an EPC rating of “B”
% of fair value
66%
79%
Asset value of BREEAM certified developments
£000
554,550
686,550
Planning
% of portfolio which is BREEAM certified
% of fair value
99%
99%
Total electricity consumption
kWh
9,079,263
11,167,438
Cost of raw materials,
Emission offsets
Total district heating consumption
kWh
1,738,200
3,409,800
Total fuel consumption (gas)
kWh
2,726,290
3,309,221
% of portfolio (managed and development) procuring REGO backed supplies
% of energy
93%
80%
Total water consumption
m3
26,830
31,202
Drought, Flooding,
Planning requirements
Building water intensity
m3/m2
0.26
0.27
Metrics used to manage climate-related risks and opportunities and performance against targets
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
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 page 72
for our carbon reporting which also includes full details of the
aggregation and calculation methodology.
Scope 1
430
Scope 2
941
Scope 3
5,080
6,451tCO2e
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Helical plc — Annual Report and Accounts 2024
Focus on our
stakeholders
Our stakeholders – Section 172(1) Statement
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.
S172(1) duty
Directors must
promote success for
the benefit of the
members with
regard to…
A.
Likely long-term
consequences
B.
Interests
of employees
C.
Need to foster
business
relationships
with suppliers,
customers and
others
D.
Impact of
operations on
the community
and the
environment
E.
Maintaining
reputation for
high standards
of business
conduct
F.
Need to act
fairly between
members
The Stakeholder Model –
interaction between s172 and stakeholders
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 94 to 99 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 94 to 97. 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 and investment 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 over one
hundred years, and we believe this success can be attributed to our
commitment to the Helical Purpose (see page 92), whilst maintaining
high standards of business conduct and the strong culture articulated
through our Values (see page 93).
Our stakeholders
Shareholders
Partners
Suppliers and contractors
Occupiers
(tenants/customers)
Employees
Local communities
Government and other
regulatory bodies
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Our stakeholders – Section 172(1) Statement
continued
The Board plays a critical role in ensuring that a rigorous and robust
process is followed when entering into joint venture partnerships
(“JVs”) to ensure that all elements of any proposals, including
stakeholder considerations, are carefully reviewed and challenged.
Over the year to 31 March 2024, the Board oversaw the entry into a
joint venture with Orion Capital Managers on 100 New Bridge Street,
EC4, and approved various aspects of the deal structure to enable
the Group to enter into a development partnership. Further details
regarding this JV and its connection to the Group’s long-term
strategy can be found on pages 32 to 33.
What the Board considered
• The long-term strategic opportunities and risks created by the JV;
• Whether the projected returns could be achieved for all of our
Shareholders through the JV;
• The proposed funding of the JV and impact on working capital;
• Future capital expenditure proposed for the JV;
• The impact on sustainability objectives and employee engagement;
• 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 JV.
s172(1) matters relevant
to this Principal Decision:
A – F
Link to strategy:
• Growth
• Property
• Sustainability
• People
• Financing
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:
100 New Bridge Street, EC4
joint venture opportunity
Key:
A Likely long-term consequences
B Interests of employees
C Need to foster business relationships with suppliers, customers and others
D Impact of operations on the community and the environment
E Maintaining reputation for high standards of business conduct
F Need to act fairly between members
On 25 March 2024, Helical exchanged contracts on the sale of the
long leasehold interest in 25 Charterhouse Square, EC1 to a real
estate fund managed by global alternative investment manager Ares
Management. The sale completed on 25 April 2024. The 43,869 sq ft
office building was sold for a headline disposal price of £43.5m.
The proceeds will be used to repay debt and fund Helical’s ongoing
development pipeline.
s172(1) matters relevant
to this Principal Decision:
A B E F
Link to strategy:
• Growth
• Property
• Financing
Sale of 25 Charterhouse
Square, EC1
On 8 February 2024, 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 two new Non-Executive Directors.
For more information on the appointment process, please see the
Nominations Committee Report on page 113
During the year, Gerald Kaye informed the Board that he was
intending to retire from the Board at the 2024 AGM. Consequently,
the Board’s Chief Executive Officer succession plan was reviewed
by the Nominations Committee and promptly invoked. Following this
comprehensive process, the Directors unanimously agreed that
Matthew Bonning-Snook would succeed Gerald to become Chief
Executive Officer of Helical with effect from the conclusion of the
2024 AGM. For further details on the Chief Executive Officer
succession process, please see the Nominations Committee Report
on pages 112 to 113.
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, deliver
value to Shareholders and promote the long-term success of
the Group;
• The candidates’ experience of the UK listed company regime and
understanding of the wider governance and regulatory environment
in which Helical operates, to ensure they had the appropriate skills
and expertise to fulfil the respective roles; and
• The continuity and reassurance the appointments would provide
to employees of the Group and investors. The Board placed great
emphasis on both candidates having demonstrated strong
leadership and expertise in their roles on the board of other
corporate entities.
• With respect to the Chief Executive Officer’s appointment specifically:
–The strategic acumen and leadership qualities the new Chief
Executive Officer would need to possess in order to lead the
Group and drive performance in line with our Culture, Values
and behaviours;
–Skills in planning and execution of Group objectives and
strategies; and
–Understanding of the business and stakeholder considerations.
s172(1) matters relevant
to this Principal Decision:
A B E
Link to strategy:
• Growth
• Sustainability
• People
Changes to the composition
of the Board
What the Board considered
• The best interests of the Group’s stakeholders, particularly its
Shareholders and employees;
• The equity returns achievable from the disposal, particularly in light
of external market conditions. The Board determined that the
disposal would help to reduce LTV and return equity to the business
for the benefit of all of our Shareholders; and
• The long-term strategic opportunities created by the disposal from
the repayment of debt and release of equity.
CGI
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91
Our stakeholders – Section 172(1) Statement
continued
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:
• Why we exist;
• The market segment in which we operate;
• What we are seeking to achieve; and
• How we will achieve it.
The Purpose also clearly demonstrates how we create value for
Shareholders and the other Helical stakeholders, and ties in with our
sustainable business model (for more information on Sustainability at
Helical see pages 60 to 87). The Purpose is fundamental to the strategic
direction of the Group and is therefore under the continuous review of
the Board.
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, Values and Culture
Board oversight of Purpose
The 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
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.
Group strategy
and management
Annual and ad hoc
as required
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.
Minutes of all the Executive Committee meetings and the Group Management Committee meetings are shared with the Board.
Sustainability
Quarterly and
ad hoc as required
Sustainability Report presented at every Board meeting.
The 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.
Members of the Board are active in Group volunteering and charitable events/initiatives which support our communities
(see pages 73 to 75).
Development
activities
Quarterly and
ad hoc as required
The Board’s continuing commitment to high standards of health and safety within its operations is demonstrated by the
inclusion of detailed, externally provided reports on health and safety matters at each Board meeting.
The Group Health and Safety Committee, chaired by the Chief Executive Officer, oversees the strategies, policies
and working practices of the Group in relation to health and safety, and drives improved performance in this business
critical area. The Committee reports formally to the Executive Committee on its proceedings and on how it has
discharged its responsibilities.
Minutes of all the Executive Committee meetings and the Group Management Committee meetings are shared with the Board.
Financing activities
Quarterly
The Chief Financial Officer’s report is presented to the Board at each Board meeting.
Our properties
Quarterly
Bi-annually
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.
The Chair of the Property Valuations Committee presents to the Board following both the interim and year end
valuations processes.
Asset managers present to the Board on the progress of any new developments.
Minutes of all the Executive Committee meetings and the Group Management Committee meetings are shared with the Board.
Leasing activities
Quarterly
Reports on the Group’s letting activities are presented to the Board at each Board meeting.
Minutes of all the Executive Committee meetings and the Group Management Committee meetings are shared with the Board.
Values & Culture
How
Purpose
Why
Strategy
What
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
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.
We pride ourselves on conducting business in alignment with these
Values and, in doing so, we are able to build and maintain strong
relationships with our stakeholders. The Helical Culture is often cited
as the reason our partners, suppliers and contractors choose to do
business with us and it is through the maintenance of this Culture that we
are able to preserve our employee loyalty and high retention rates (please
also see “Our People” section of the Sustainability Report, pages 76 to 77).
Our Values
Integrity
Through our honest and open
approach, we aim to engender
the respect of everyone we
work with.
Excellence
Using our market experience
and intelligence, we strive to
be best-in-class in everything
we do.
Collaboration
Building strong relationships
and teamwork are at the heart
of our success.
Creative
We are passionate about
developing innovative and
inspiring spaces.
Sustainable
Working for the long-term
benefit of our stakeholders,
local communities and the
environment drives the
decisions we make.
Dynamic
Energy, adaptability and agility
are core to our approach.
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.
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, they are tasked with
reviewing the Values and commenting on their continued suitability.
Excellence, creative & sustainable – our buildings
As stated in our Purpose, we create sustainable and inspiring
workplaces which are technologically smart, rich in amenities and
promote employee wellbeing. We are exceedingly proud of the
number of accolades our buildings have received over the years
and we feel this demonstrates our commitment to our Purpose.
During the year to 31 March 2024, The JJ Mack Building, EC1 was named
Project of the Year 2023 at the London Construction Awards and also
named a winner in the City New Build category at the OAS Development
Awards 2023. Furthermore, in March 2024, The JJ Mack Building, EC1
received a BREEAM score of Outstanding and, at the time of printing,
the score is the highest currently awarded to a building in the UK.
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. Through collaboration with the design
team at SampsonMay, Helical’s corporate website has been in receipt
of several accolades since its launch, with the most recent being its
Gold award in the ‘Best Corporate website – Small cap’ category at
the Corporate & Financial Awards.
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 48 to 59).
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. The Board gives prominence to the
assessment of our Culture and to monitoring the progress of its
cultural initiatives (please see page 94 for further details).
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. The Board recognises the key role that culture
plays in the sustainable development of the Group and is dedicated to
embedding sustainability policies and practices in our Culture which
promote desired behaviours across the workforce. For details of the
culturally relevant initiatives which go beyond assessment and monitoring,
and show how our Culture manifests in practice, please see the
Sustainability Report on pages 60 to 87. The importance of culture is a key
consideration in planning for the succession of senior management and
other recruitment. This diversity in our workforce also helps to stimulate
creativity and contributes to the open and cohesive Culture exhibited
throughout the Group. The Helical Culture and Values are reflected in the
Group Diversity and Inclusion Policy (available on our website https://
www.helical.co.uk/investors/governance/governance-policies/ ).
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93
Our stakeholders – Section 172(1) Statement
continued
How we embed, monitor and sustain our Culture
• The Directors conduct an annual review of workforce policies and
procedures and these are further updated on an ad hoc basis as
required – see Board Leadership and Company Purpose section
of the Corporate Governance Report on pages 107 to 108.
• Employee engagement initiatives – see page 96 and pages 98 to 99.
Feedback from the following initiatives is reported to the Executive
Committee and Board, and considered in decision making:
–“Lunch with Leadership” initiative, whereby a small number of staff
are invited to attend the post-Board meeting lunch with the full
Board. This provides both the staff and the Board (in particular the
Non-Executive Directors) with an opportunity to get to know each
other in a more informal setting;
–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.
• The designated Non-Executive Director for workforce engagement
plays an essential role in promoting and driving our Culture (see also
page 99).
• Employee Volunteering Policy and Group volunteering events
(see Sustainability Report at pages 73 to 75).
• Tenant feedback analysis.
• Staff tenure and retention rates (see KPI section on page 27).
• Whistleblowing mechanisms in place, with relevant data reported to
the Board (see page 107 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 76 to 77).
• 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. The Group’s Health and Safety Committee
considers and advises on the health, safety, welfare and wellbeing
aspects of the Group’s H&S Policy, procedures and practice relating
to staff, visitors, contractors and others within related activities.
• 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 as the UK navigates its way through
the macroeconomic factors affecting the real estate market.
• Prompt payment to suppliers.
• Promotion of a diverse and inclusive environment – see Report of
the Nominations Committee on pages 112 to 117.
• Consideration of Culture in recruitment and selection, both with
regard to individuals and the recruiters used – see Report of the
Nominations Committee at pages 112 to 117.
• Aligning formal rewards with Culture.
• Incentive schemes developed to drive behaviours consistent with
Purpose, Values and strategy – see Directors’ Remuneration Report
on pages 122 to 141.
• We reward positive culture within our workforce, e.g. our staff
express the wish to be fit and healthy and we facilitate this through
our employee benefits programme (see Sustainability Report at
pages 76 to 77 for more information).
• Offering our staff the opportunity to be Shareholders in Helical
through our Share Incentive Plan.
Stakeholder engagement
The Directors are pleased to report on how they have had
regard to the need to foster 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 88 to 89) 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 and, through such engagement,
positive outcomes have been derived for the business.
We describe how the Directors have had regard to the
matters set out in section 172(1) (a) to (f) and this forms the
Directors’ statement required by section 414CZA of the
Companies Act 2006 in the table overleaf.
Stakeholder engagement
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
Shareholders
• Financial performance.
• Generation of long-term
sustainable returns.
• Environmental, social and
governance practice
(“ESG”).
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 hold talks with relevant
employee Shareholders covering remuneration,
with a focus on the PSP and the SIP.
Group 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 2023 Annual
Results/AGM;
• The Executive Directors sought the views of the
Shareholders with respect to the TfL joint venture
opportunity;
• The Executive Directors engaged with the Company’s
largest institutional Shareholders following publication of the
financial results for the Half Year to 30 September 2023,
seeking their feedback on the Group’s strategy as well as
the results; and
• The Board engaged with the employee Shareholders
throughout the year and considered their views. See
Engagement with the workforce section on pages 98 to 99
for more details.
Partners
• Financial performance
and generation of
sustainable returns.
• Collaboration and
communication.
• Risk appetite and
management of the
partnership.
• Corporate responsibility.
Direct Board level engagement
• Executive Directors meet with key business
partners (joint venture partners) and report back
to the Board on a regular basis.
• Key business partners (joint venture partners) are
invited to attend the Annual and Half Year results
presentations.
Group level/indirect Board engagement
• Regular communication and feedback on business
and ESG matters.
• Transparent reporting.
• Collaborative approach with clear responsibilities.
• Helical’s website.
• 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. Examples of this include the
discussions held with the relevant joint venture partners
concerning the 100 New Bridge Street, EC4 JV opportunity
and lettings at The JJ Mack Building, EC1.
Occupiers
(tenants/
customers)
• Quality of service
provided.
• Delivery of quality space
to meet needs.
• Ability to meet needs of
changing markets.
• Value for money.
Direct Board level engagement
• Feedback received directly from occupiers, and
indirectly through tenant engagement apps, is fed
into Board discussions.
Group 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.
• Helical staff supporting new occupiers by, for
example, attending restaurant opening events of
F&B tenants.
• Occupier engagement events are held frequently
within our buildings (see Sustainability Report at
pages 60 to 87).
We engage with our occupiers via tenant engagement apps in
The Bower, EC1, The Loom, E1 and The JJ Mack Building, EC1.
In conjunction with our managing agents, Ashdown Phillips,
we continue to utilise data from our occupiers to improve
energy efficiency, enhance tenant experience and develop
meaningful community engagement, e.g.:
• SkySpark at The Bower, EC1;
• Equiem at The Loom, E1 and The Bower, EC1;
• Annual sustainability reports are sent to all occupiers at
The Loom, E1 and The Bower, EC1;
• Seasonal commissioning undertaken at The Bower, EC1;
• Energy analytics programme and fit out impact review
conducted at The JJ Mack Building, EC1; 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 60 to 87.
Strategic Report
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95
Our stakeholders – Section 172(1) Statement
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
Employees
• Opportunities for training
and development.
• Fulfilling and rewarding
work in a safe and
comfortable environment.
• Fair treatment,
recognition and
remuneration.
• Diverse, inclusive and
positive culture.
Direct Board level engagement
• Designated Non-Executive Director responsible for
ongoing workforce engagement:
– Meets a cross section of employees during the year; and
– Contactable via email all year round.
• Role of the designated Non-Executive Director for
workforce engagement published for all staff.
• Open and inclusive culture through Purpose and 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 Helical’s AGM, where they have the
opportunity to engage with the Board and with other
stakeholders.
• “Lunch with Leadership” initiative whereby a small
number of staff are invited to attend lunch with the Board.
Group level/indirect Board engagement
• Staff satisfaction survey/interviews.
• Regular staff appraisals.
• Majority of staff attend Management meetings, on a
rotational basis.
• Helical’s website.
• Staff consulted on Group marketing exercises, e.g.
the Helical re-branding and website refresh exercises.
• Maintenance of the Staff Handbook.
• Staff property tours.
Outcomes of engagement deriving directly from feedback
garnered from the 2023 initiatives:
• Introduction of employee Volunteering Policy.
– Volunteering initiative at London City Farms is to be
repeated in summer 2024 at the request of the
employees.
– Our staff volunteered at the Hackney Night Shelter on
29 January 2024 and, at the request of the employees,
a further event is being organised for summer 2024.
For further information see the Sustainability Report on
pages 73 to 75).
• Opportunities for staff to socialise with the NEDs on an
informal basis.
For information on the outcomes of the workforce
engagement initiatives please see pages 98 to 99.
Local
communities
• Ethical and responsible
corporate behaviour.
• Environmental impact of
developments.
• Creating social value in
local areas, including
development of public
realm, facilities open to
members of the public
and engaging with local
communities.
Direct Board level engagement
• CEO engages on community and environmental
initiatives on behalf of the Group.
Group level/indirect Board engagement
• Local resident consultations and regular newsletters.
• Community and charitable initiatives/events.
• 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.
• Engagement with prospective future property
professionals via the Helical Work Experience
Programme.
• Sustainability news and publications.
• Helical’s website.
Engagement with our local communities has led to the
following initiatives:
• Implementation of our Circular Economy Strategy, taking
opportunities to reuse, recycle and repurpose (see pages
62 to 65 of our Sustainability Report for further details):
– Donation of furniture at The Bower, EC1 to social
enterprise Waste to Wonder and the Fleet Street Quarter
Business Improvement District Green Skills Hub;
– Donated laptops to Computers4Charity; and
– Donation of furniture, kitchen supplies and stationery to
the National Park City Foundation and St Mungo’s.
• Continued sponsorship and local charitable giving, including:
– The Helical Bursary, established in 2017, supports Real
Estate and Planning students studying at Henley
Business School, University of Reading;
– A Strategic Partner of LandAid, with staff taking part in
a range of LandAid charity appeal initiatives over the
course of the year;
– Donated to Hackney Night Shelter as part of our
volunteering initiatives;
– As part of our commitment to support London City
Farms, the Group made a monetary donation and 15
members of staff volunteered for a day at the Spitalfields
City Farm creating c.£2,000 of social value;
– Supported our bankers, Natwest, with a donation to their
25km walk in aid of Cancer Research UK;
– Silver sponsor of The Story of Christmas event which raises
funds to support a broad and diverse range of charitable
projects, benefitting homeless and disadvantaged children;
– Donation to London Air Ambulance as part of a three-
year commitment to support the good work they do; and
– 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 pages 73 to 75.
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.
• Payments made as soon
as practicable and in line
with the Prompt Payment
Code.
• Collectively prevent and
mitigate risk of modern
slavery, bribery, and
corruption in our supply
chain.
• Ethical and fair dealings.
Direct Board level engagement
• Audit and Risk Committee leads the assessment of
external audit performance and service provision,
inviting our external Auditor to Committee meetings.
• Property valuers invited to Audit and Risk
Committee meetings.
• The Board receives a detailed report from the
Group’s IT service provider on an annual basis.
Group level/indirect Board engagement
• Open communication about expected behaviour
within our supply chains – our Supplier Code of
Conduct, Human Rights Policy, Diversity and
Inclusion Policy 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.
Engagement with our suppliers and contractors enables the
Board to align its decisions with the Group’s sustainability
aspirations, a core tenet of Helical’s strategy.
Through engagement with these stakeholders over the
period we have been able to identify potential opportunities
to realise benefits – for example in the areas of off-site
manufacture and prefabrication. Such benefits can be
realised in build programming and logistics, such as
highlighting necessary design adaptions at an early stage
in the development process.
Engagement with suppliers and contractors has given us the
opportunity to salvage and reclaim elements of the existing
building for reuse, recycle or donation at 100 New Bridge
Street, EC4 and The Bower, EC1 (see above and the
Sustainability Report at pages 60 to 87).
Additionally, engagement with this stakeholder group has
provided us with valuable information and data on innovative
construction practices that we have been able to apply to our
development projects. For example, during the year, our
property team has attended building tours with building
contractor Mace, which have provided significant insight into
new approaches to construction, such as the use of low
carbon materials and upholding best practice with respect to
health and safety.
Through engagement with our contractors on the
development of 100 New Bridge Street, EC4, a number of
initiatives are being undertaken to ensure the building meets
the highest sustainability standards:
• WELL precertification underway.
• Review of social value impact as part of the design process.
• Factoring in of BREEAM, WELL and NABERS as part of
design elements.
• Consideration of consolidated delivery options for both
building servicing and construction.
Government and
other regulatory
bodies
• Corporate responsibility
and accountability.
• Compliance with
applicable laws
and regulations.
• Compliance with
applicable taxation
regimes.
• Monitoring updates to
the legal and regulatory
environment.
Direct Board level engagement
• CEO regularly engages with governmental,
regulatory and industry bodies.
Group level/indirect Board engagement
• Transparent statutory reporting.
• Open approach to communication.
• Board oversight of key relationships and areas
impacted.
• Open dialogue with regulatory agencies and
Government bodies, e.g. HMRC with respect to our
obligations as a REIT.
• Health and safety experts and other stakeholders
invited to meetings of the Group’s Health and
Safety Committee.
• Reports on the results of active participation
through industry groups presented to Board.
• Helical’s website.
• Assisting industry forum consultations.
The Board continued to focus on how to promote the success
of the Company taking into account 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.
The Group’s Health and Safety Committee monitors
regulatory changes and Governmental policies and ensures
effective and representative two-way communication/
consultation between the Group and its stakeholders. As part
of the Committee’s engagement activities, contractors,
external advisors and other stakeholders may be invited to
attend for all or part of any meeting, as and when appropriate.
The Board also focuses on environmental laws and
regulations and gives due consideration to the environmental
impacts of its operations when making decisions.
For example, the Board is cognisant of the FCA’s proposals
for the UK Sustainability Disclosure Standards (“SDS”) and
these impending rules have impacted decision making, and
how Helical approaches the risks and opportunities presented
by climate change and wider sustainability matters. While this
standard will only apply to FCA regulated entities, Helical will
consider and review the proposed disclosures to ensure
maximum transparency for our financial and sustainability
reporting. The Board is also aware of the proposed UK
Sustainability Disclosure Standards (“UK SUDS”) which will
set out corporate disclosures on the sustainability-related
risks and opportunities that companies face. These standards
will form the basis of any future requirements in UK legislation
or regulation for companies to report on risks and
opportunities relating to sustainability matters, including risks
and opportunities arising from climate change. Given Helical’s
comprehensive reporting against the recommendations of the
Task Force on Climate-related Financial Disclosures, it is well
placed to respond to any future disclosure requirements but
will keep this under close review while the standards go
through the formal consultation process.
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The time, the care, the effort that your team
gave to us was outstanding and I had an
absolute blast. In just two days, you have
broadened my perspective and understanding
of the London property market and I hope
I can put it to good use.”
Work experience student
Not only did I find the experience hugely
enjoyable, but really quite eye-opening. I feel
that I now have an incredibly valuable insight
into property development and investment.”
Work experience student
Our stakeholders – Section 172(1) Statement
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
management” on pages 48 to 59), specifically the management of
workforce relationships and retention of talent. We know that our staff
are vital to our success and every member of the Helical workforce is
valued, with their opinions regularly 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.
This principle of mutual respect and inclusion is integral to the Helical
Culture (see pages 92 to 94). 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 2023/24
• Volunteering initiatives at London City Farms and the Hackney
Night Shelter are scheduled to be repeated in summer 2024 at
the request of the employees. Details of the previous events can
be found in the Sustainability Report on pages 73 to 75.
The Board values the information derived from the engagement
process so that it is fully informed on staff opinion. The agenda item
dedicated to discussing the outcomes of the staff engagement
initiatives is tabled during the second half of each calendar year.
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 2023, Helical coordinated a Work Experience Day
for property students from a range of learning institutions. The
students were introduced to the programme by our CEO at the
Helical offices and they also attended talks with members of senior
management on a variety of industry pertinent topics. Over the
course of two days, the students were taken on a tour of Helical’s
London portfolio. The tour also incorporated visits to several prime
London real estate developments in the City of London, Canary
Wharf and King’s Cross. 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.
We are in the process of inviting students to attend the 2024
Programme which is set to take place in September this year.
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.
During the year, Sue met with a cross-section of staff in informal
settings and she has been contactable via email throughout
the year. Sue’s effectiveness in this role is underpinned through
her engagement skills and perspectives that she has accumulated
through exposure to a wide range of stakeholders over the course
of her accomplished career in the real estate industry.
Rationale for choosing a designated Non-Executive Director
for our workforce engagement mechanism
Helical has a relatively small workforce of 27 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.
Sue plays a key role in the promotion and maintenance of our open
and collaborative Culture by reinforcing Helical’s supportive, inclusive
and engaging operating environment. Sue encourages our employees
to share their valued opinions and is viewed as a role model to our
employees, not only because of her skills and experience in real
estate, but also her involvement in the founding of Real Estate
Balance, a campaigning organisation working to improve diversity
and inclusion in the real estate industry. This healthy corporate
Culture complements our Purpose, Values and strategy and
ultimately benefits our stakeholders.
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/investors/
governance/governance-policies/
Sue Clayton
Senior Independent Director and
Non-Executive Director for workforce engagement
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99
Throughout this eventful period for the
business, the Board and its Committees
have played a critical role in upholding
the principles of good governance, whilst
fostering the execution of our strategy.”
Chairman’s governance review
Our Chairman’s
introduction to
governance at Helical
Richard Cotton
Chairman
Supporting strategic, sustainable
success for our stakeholders.
Board composition and succession
Executive Directors
In May this year, we announced the departure of our Chief Executive
Officer (“CEO”), Gerald Kaye, after almost 30 years’ service on the
Board. Gerald’s incredible talent and leadership skills, combined with
his loyalty and dedication to Helical, have been instrumental to the
Group’s success over the years. On behalf of my fellow Directors,
I wish to thank Gerald immensely for his commitment and significant
contribution to Helical as its CEO and throughout his career spanning
almost three decades with the Group. We are very fortunate that
Gerald has agreed to continue to support the Board in the capacity
of consultant and although his presence on the Board will be missed,
we will be able to call upon his unsurpassed expertise and wisdom for
the foreseeable future.
The Board, supported by the Group Nominations Committee, routinely
reviews the Group’s succession plans, and by virtue of having robust,
effective plans in place, the Committee was able to swiftly activate
those plans and identify our new CEO, Matthew Bonning-Snook.
Following an assessment of potential candidates with support from
an external advisory firm, the Nominations Committee unanimously
agreed that Matthew was the perfect successor to Gerald. His
knowledge of the Company, garnered throughout his 16-year tenure
on the Board and 29-year total tenure with the Company, enables him
to transition into the role of CEO with confidence and relative ease.
Matthew has an outstanding track record in real estate development,
with a sharp and consistent focus on strong execution, financial
performance and strategic delivery. He is also the Chair of the
Group’s Sustainability Committee and is dedicated to the furtherance
of our sustainability goals, including becoming a net zero business by
2030. Matthew’s biography is available on page 102.
The Board is confident that under Matthew’s leadership, we will
continue to evolve as a best-in-class developer of sustainable
buildings in central London, delivering on our strategy, reaching our
net zero target and ensuring long-term sustainable success for all
our stakeholders.
For more information on Executive Director succession planning,
please see the Nominations Committee Report at pages 112 to 113.
Non-Executive Directors
I would like to take this opportunity to welcome our two new Non-
Executive Directors, Amanda Aldridge and Robert Fowlds. Both
Amanda and Robert are highly skilled, experienced listed company
directors and these appointments undoubtedly serve to enhance the
capabilities of our Board. You can read more about the appointments
of Amanda and Robert at page 113. We will continue to monitor the
Board’s composition to ensure we maintain the range of skills,
experience and perspectives needed to support the Group’s strategy
and complement our plans for succession.
On behalf of my fellow Helical Directors, I wish to extend our deepest
gratitude to Joe Lister who, after serving for nearly six years on the
Board, is stepping down and will not seek re-election at the 2024 AGM
in July. During his tenure, Joe held the key role of Chair of the Audit
and Risk Committee, and was a member of the Nominations and
Remuneration Committees. Joe has been a knowledgeable voice on
the Board, providing sound financial and risk management guidance
during periods of challenge. The Board will greatly miss Joe’s wise
counsel and commitment to the business. It has been a pleasure
to work with Joe and I wish him all the best for his role as the Chief
Executive Officer of The Unite Group plc. I am delighted that Amanda
Aldridge has agreed to succeed Joe as Chair of the Audit and Risk
Committee and we are very fortunate to be able to replace Joe with
another Committee Chair of exceptional experience and calibre.
External Auditor transition
Following their appointment at the 2023 AGM, RSM UK Audit LLP
(“RSM”) have successfully completed their first year audit of Helical
and we are pleased to provide further details on the smooth transition
from Deloitte to RSM within the Audit and Risk Committee Report on
pages 118 to 121.
Governance and strategic oversight
Looking beyond the geopolitical challenges faced by the market, 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 in the period.
Throughout the year, oversight of our strategy and its implementation
continued to be a key responsibility of the Board. The Board oversaw
the entry into a joint venture partnership with Orion Capital Managers
on 100 New Bridge Street, EC4 and the recycling of equity through
the sale of 25 Charterhouse Square, EC1. Enhanced Board oversight
in these matters serves to 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 90 to 91.
More information on the work and activities of the Nominations,
Audit and Risk and Remuneration Committees can be found
on pages 112 to 141.
Board Performance Review
Following this year’s internal Board Performance Review, I am also
delighted to confirm that each member of the Board continues to
demonstrate a high level of skill and commitment to their respective
roles and are, consequently, effectively discharging their duties as
Directors. Please read pages 116 to 117 to find out more about this
year’s Review process.
Stakeholder engagement
Over the course of the year, our stakeholders have continued to
contribute to our success and play a pivotal role in the Group’s
strategy. The Board places great importance on maintaining effective
levels of engagement with all our stakeholders and their interests
are taken into consideration in every decision we make as a Board.
Effective stakeholder engagement will remain high on the Board’s
agenda going forward, and you can read more about our approach
to such engagement and the Directors’ duties in this regard on
pages 94 to 99 of the Strategic Report.
Our AGM on 17 July 2024 will offer a further opportunity to engage
with our investors. Full details of this, including the resolutions to be
proposed for Shareholder approval, can be found within the Notice
of Meeting for the 2024 AGM.
Summary
At Helical, good corporate governance underpins all Board
discussion and decision making. We have continued to apply the
Principles of the UK Corporate Governance Code (the “Code”)
throughout the year and, as at the date of this Report, the Company
has complied with all the Code’s applicable Provisions. I invite you to
read our Corporate Governance Report for a more detailed account
of the Group’s compliance with the Code and its accompanying
guidance. The Financial Reporting Council published its revised
version of the Code in January of this year, and Helical is dedicated
to achieving full compliance with the revised Code in accordance
with the FRC’s stipulated timelines.
Finally, I would like to conclude with a personal note of thanks to the
Helical team, including my fellow Board members, for their continued,
unwavering support and dedication to our business.
Richard Cotton
Chairman
22 May 2024
Dear Shareholder,
On behalf of the Board, I am pleased to introduce our Corporate
Governance Report for the year ended 31 March 2024. Throughout
the Report that follows, we set out how the Board and its Committees
have discharged their duties, at all times having regard to the needs of
our stakeholders and promoting the long-term, sustainable success
of the Group.
From a governance perspective, we have had a very active year, with
significant changes to the composition of our Board, crystallisation
of succession plans, transition of our external Auditor and an internal
Board Performance Review. Throughout this eventful period for the
business, the Board and its Committees have played a critical role
in upholding the principles of good governance, whilst fostering the
execution of our strategy.
Governance
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101
Board of Directors
Richard Cotton
Board Chairman and Chair of
the Nominations Committee
Board meetings present:
6/6
Tenure:
8 years
Independent:
Yes
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.
Our Shareholders elected him as the Group’s
Chairman at the 2022 AGM. Richard is Chair
of the Nominations Committee and a member
of the Remuneration Committee.
Richard has a wide range of experience in both
executive and non-executive roles at a number
of quoted and unquoted companies. He 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 and Big Yellow Group 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.
Since assuming the role of Chairman, he has
proven himself to be 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 and
extensive experience in stakeholder relations.
Through his wealth of skills and prior experience,
Richard is able to contribute to all aspects of
business discussions and his valuable knowledge
and insight is key to promoting the sustainable
success of the Company.
Other external appointments
• Non-Executive Director of Target Healthcare
REIT plc.
Tim Murphy
Chief Financial Officer
Board meetings present:
6/6
Tenure:
11 years
Independent:
No
Skills, relevant experience and contribution
to long-term success
Tim Murphy, BA (Hons) FCA, joined the Group in
1994 and became Finance Director of the Company
in 2012, 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.
Gerald Kaye
Chief Executive Officer and
Chair of the Executive Committee
Board meetings present:
6/6
Tenure:
29 years
Independent:
No
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. Although
Gerald is standing down from the Board at the 2024
AGM, he is continuing to contribute to the long-term
success of the business as a consultant.
Other external appointments
• Member of the Investment Committee
at Guy’s & St Thomas’ Foundation.
Joe Lister
Non-Executive Director and
Chair of the Audit and Risk Committee
Board meetings present:
6/6
Tenure:
5 years
Independent:
Yes
Skills, relevant experience and contribution
to long-term success
Joe Lister was appointed to the Board in September
2018. 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 assumed the role of Chief Executive Officer
of The Unite Group plc (“Unite”) in January 2024.
Prior to this, Joe was the company’s Chief Financial
Officer, a position he had held since January 2008.
Prior to joining Unite in 2002, Joe qualified as a
Chartered Accountant with PricewaterhouseCoopers.
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 The Unite Group plc.
Joe is retiring from the Board at the 2024 AGM and
you can find his last report as Chair of the Audit and
Risk Committee at pages 118 to 121.
Other external appointments
• Chief Executive Officer, Unite Group plc.
Sue Clayton
Senior Independent Director, Chair of
the Property Valuations Committee
and designated Non-Executive Director
for workforce engagement
Board meetings present:
6/6
Tenure:
8 years
Independent:
Yes
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. Sue’s appointment as the Group’s
Senior Independent Director on 14 July 2022 is
underpinned by her extensive board experience
and understanding of stakeholder interests.
In 2019, the Board appointed Sue as the designated
Non-Executive Director for workforce engagement
and she offers a direct engagement channel to
members of the workforce 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 98 to 99).
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 render her a highly
valuable contributor to the Group’s strategy. It is
also through her skills and experience in the field
of property valuation that she provides a significant
contribution to the effectiveness of the Group’s
governance structure, especially with respect to
the work of the Property Valuations Committee.
Other external appointments
• Board Member of the Committee of Management
of Federated Hermes Property Unit Trust.
• Non-Executive Director of SEGRO plc.
Matthew Bonning-Snook
Chief Executive Officer Designate and
Chair of the Sustainability Committee
Board meetings present:
6/6
Tenure:
16 years
Independent:
No
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 and is due to assume the role of
Chief Executive Officer immediately following the
conclusion of the 2024 AGM. 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, expert
knowledge of the London property market and his
extensive network of contacts within the industry
mean 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, as Chief
Executive Officer, he will continue to lead 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.
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
102
103
0-3
1
4-6
2
7-9
2
10+
3
Board tenure as at 31 March 2024
Women
3
Men
6
Gender diversity as at 31 March 2024
Women
3
Men
4
Gender diversity as at 17 July 2024
(post 2024 AGM)
1 Joined 1 April 2024.
2 Joined February 2024.
Sue Farr
Non-Executive Director, Chair
of the Remuneration Committee
and designated Non-Executive
Director for ESG & Sustainability
Board meetings present:
6/6
Tenure:
4 years
Independent:
Yes
Skills, relevant experience and contribution
to long-term success
Sue Farr 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, as well as 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 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 a former Chair of both the Marketing Society
and the Marketing Group of Great Britain. In 2003,
she 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 British American Tobacco plc, Millennium &
Copthorne Hotels plc, New Look plc, Accsys
Technologies plc, Lookers plc, Unlimited Marketing
Group Ltd, DNEG Limited, Dairy Crest plc, Dolphin
Capital Partners and Historic Royal Palaces.
Other external appointments
• Senior Independent Director, THG PLC.
• Non-Executive Director, Ebiquity plc
(from 1 April 2024).
James Moss
Chief Operating Officer and
Company Secretary
Board meetings present:
6/6
Tenure:
9 years
Skills, relevant experience and contribution
to long-term success
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 Group 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.
Board of Directors
continued
Amanda Aldridge
Non-Executive Director and Chair of the
Audit and Risk Committee Designate
Board meetings present:
n/a1
Tenure:
n/a
Independent:
Yes
Skills, relevant experience and contribution
to long-term success
Amanda Aldridge was appointed to the Board in
April 2024.
Having spent 33 years at KPMG, Amanda has
garnered extensive experience in the fields of
audit, governance and capital markets. She was
a KPMG partner for 20 years, holding numerous
positions and was latterly the Head of Intellectual
Property & Contract Governance in the firm’s Risk
Consulting Division.
Over the last six years, Amanda has served as a
Non-Executive Director on several quoted and
unquoted company boards, and is an experienced
audit and risk committee chair. Through her
directorships, she has also gained considerable
experience in the property sector.
Amanda qualified as a Chartered Accountant in
1987 and is a Fellow of the Institute of Chartered
Accountants in England and Wales. She is also
an active member of the Institute’s Corporate
Governance, Sustainability & Climate Change
and Construction & Real Estate Communities.
Amanda’s strong financial background, combined
with her knowledge and experience in risk
management across a variety of sectors, including
property, will be highly valuable to the Board
and contribute to the long-term success of
the business.
Subject to Amanda’s re-election at the 2024 AGM,
it is intended that she will succeed Joe Lister to
become Chair of the Audit and Risk Committee
following the conclusion of the AGM.
Other external appointments
• Non-Executive Director, Impact Healthcare REIT plc.
• Non-Executive Director, The Brunner Investment
Trust plc.
• Non-Executive Director, Staffline Group plc.
• Non-Executive Director, The Low Carbon
Contracts Company Limited.
Robert Fowlds
Non-Executive Director
Board meetings present:
2/22
Tenure:
<1 year
Independent:
Yes
Skills, relevant experience and contribution
to long-term success
Robert Fowlds was appointed to the Board in
February 2024.
Robert has over 40 years’ experience in real estate.
He was head of real estate investment banking at
J.P. Morgan Cazenove until 2015, advising on
numerous capital markets and M&A transactions.
Prior to working in corporate finance, Robert was
Managing Director and Co-Head of the Pan-
European real estate sector equity analyst team at
Merrill Lynch, and previously a member of the team
at Kleinwort Benson. Robert is a chartered surveyor
and spent his early career specialising in investment
and development.
Robert’s financial knowledge and background in
the real estate industry, as well as his experience
as a non-executive director in the listed sector,
strengthens the overall expertise of the Board and
contributes to the long-term success of the business.
Other external appointments
• Member of the Supervisory Board, Klepierre S.A.
• Non-Executive Director, LondonMetric Property plc.
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
104
105
→See pages
118 to 121
→See pages
107 to 108
→See pages
122 to 141
→See pages
109 to 111
→See pages
112 to 117
Statement of compliance with the UK Corporate
Governance Code 2018
For the year to 31 March 2024 the Group has applied the Principles
of the UK Corporate Governance Code 2018 (the “Code”) and has
complied with all relevant Provisions of the Code throughout the
accounting period.
The Code, along with the Financial Reporting Council’s 2018
Guidance on Board Effectiveness, has informed the Group’s
governance practices, particularly with respect to the Board’s
effectiveness and decision making, and has contributed to the
delivery of strategy.
In January 2024, the FRC published its revised version of the Code
(“2024 Code”) and corresponding guidance and Helical is dedicated
to achieving full compliance with the 2024 Code in accordance with
the FRC’s stipulated timelines. We shall be reporting against the 2024
Code in next year’s Annual Report.
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 are determined. The Board applies the
overarching principles of good corporate governance: Fairness,
Accountability, Responsibility and Transparency when formulating
and delivering its strategy. These principles underpin the Board’s
activities including, but not limited to, the oversight of financial
reporting and auditing, remuneration of senior executives,
stakeholder relations and communications, risk management and
internal control, ethics, ESG and sustainability. The application of
these principles of good corporate governance supports the Board
in the effective promotion of the long-term success of the Group.
Corporate Governance
at Helical
Corporate Governance Report structure
We have structured our Corporate Governance Report to reflect the five pillars of the Code:
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.
I
IV
II
V
III
Board Leadership and
Company Purpose
Audit, Risk and
Internal Control
Division of
Responsibilities
Remuneration
Composition, Succession
and Evaluation
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 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 94 to
99). How the Board members discharged their statutory s172(1) Duties
when making Principal Decisions is described on pages 90 to 91.
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 92 to 94 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 122 to 141. 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 128 to 129.
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 98 to 99.
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, whistleblowing, security of data,
human rights 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 92 to 94.
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 94 to 99.
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 60 to 87.
As confirmed in the Group’s most recent internal Board Performance
Review (for more information on the 2023/24 internal Board
Performance Review, please see the Nominations Committee Report
on pages 116 to 117), 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 102 to 104
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 2023, 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, Panmure Gordon gave a presentation on the economic outlook, and this was followed by a presentation from
Deutsche Numis on the UK Equities Market and strategic options for Helical. In response to feedback received from our Shareholders,
Deutsche Numis were invited to represent our Shareholders and ensure that their interests were at the forefront of discussions.
At the meeting, the Directors focused their discussions on the geopolitical and economic climate, the London real estate market,
sustainability and the environment, 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
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
106
107
Effectiveness
Matters considered by the Board in 2023/24
CORPORATE RESPONSIBILITY
• Receipt of reports from the Sustainability Committee to assess the
Group’s approach to sustainability and promote its future strategy
with objectives;
• Review and consideration of the Group’s progress towards
becoming a net zero carbon business by 2030 through our
Net Zero Carbon Pathway; and
• Approval of the Group’s Human Rights and Sustainability Policies.
STRATEGY
• Review of corporate objectives;
• Review of market trends, opportunities and risks;
• Annual off-site Board meeting focused on strategy; and
• Receipt of regular strategy updates.
PROPERTY TRANSACTIONS AND OPERATIONS
• Approval of material property transactions and opportunities; 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;
• Assessment of viability and going concern, including sensitivity
analysis;
• Receipt of regular reports from the Chief Executive and the
Chief Financial Officer;
• Approval of major capital and operating expenditure proposals;
• Review of the dividend policy and recommendation of the 2023
final dividend and approval of the 2024 interim dividend;
• Receipt of presentations from senior management from across
the business and consideration of reports on matters of material
importance to the Group;
• Receipt and consideration of the annual IT report from the
Group’s external IT consultants;
• Approval of the Group budget; and
• Review of financing proposals.
GOVERNANCE AND RISK
• Quarterly review of the Group’s health and safety performance;
• Oversight of the Group’s Health & Safety Policy;
• Monitoring of performance and continued development of
health and safety risk mitigation through the Group Health
and Safety Committee;
• Review of risk strategy and risk appetite and reaffirming the
Group’s Risk Framework;
• Financial crime risks and mitigation;
• Bi-annual review of principal and emerging risks facing the Group;
• Continued consideration of cyber security and mitigation of
cyber risks;
• Continued consideration of the implications of geopolitical
instability, as well as other matters of global macro significance,
and mitigating strategies;
• Internal control system review, including review of external
verification of controls;
• 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 Group policies and procedures,
role descriptions, the Schedule of Matters Reserved for the
Board and Committee terms of reference;
• Review and approval of the Group Human Rights Policy; and
• Review and approval of the annual Modern Slavery Statement.
PEOPLE
• Crystallisation of Chief Executive Officer succession plan,
leading to appointment of new Chief Executive Officer;
• Search and appointment of two new Non-Executive Directors;
• Review of succession and talent management processes within
the Group;
• Receipt of feedback from the designated Non-Executive Director
regarding the employee engagement initiatives and
consideration of issues raised;
• Review and approval of annual bonus calculations and
Performance Share Plan awards;
• Review of staff engagement mechanisms including oversight of
Group whistleblowing procedures;
• Executive and Non-Executive development and succession
planning;
• 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 88 to 99).
I BOARD LEADERSHIP AND COMPANY PURPOSE
The Helical Board is suitably balanced, with the majority of its
members (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 Lazard & Co., Peel Hunt and Deutsche
Numis to help enhance their understanding of the market and 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
Board of Directors section on pages 102 to 104.
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, one Senior Property
Executive and the Chief Operating Officer 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 112 to 117.
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 Group 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 111
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 94 to 99.
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 Sue Clayton, SID, as part of the 2023/24 internal Board
Performance Review (for further details, please see pages 116 to 117).
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 98 and 99 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:
• Advising the Board on all regulatory and corporate governance matters;
• Ensuring good information flows to the Board and its Committees,
and between the Executive Committee and the Non-Executive
Directors;
• Maintaining a record of attendance at Board meetings and
Committee meetings; 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
Corporate Governance Report
continued
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
108
109
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
102 to 104 for the diverse skill set of the Board, which provides for
balanced and effective leadership of the Group). During the year
ended 31 March 2024, six scheduled Board meetings were held.
The Board also held its annual strategy event in September 2023,
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 107 for further details).
Board attendance at scheduled meetings
Board meetings – 1 April 2023 to 31 March 2024
Attendance
Richard Cotton, Non-Executive Chairman
6/6
Gerald Kaye, Chief Executive Officer
6/6
Sue Clayton, Senior Independent Director
6/6
Joe Lister, Non-Executive Director
6/6
Sue Farr, Non-Executive Director
6/6
Tim Murphy, Chief Financial Officer
6/6
Matthew Bonning-Snook, Chief Executive Officer
Designate
6/6
Robert Fowlds, Non-Executive Director
2/2
(Joined February 2024)
Amanda Aldridge, Non-Executive Director
n/a
(Joined April 2024)
Board
The Board’s main responsibilities include, but are not limited to:
• Providing overall leadership of the Group and setting its long-
term strategic aims;
• Establishing and monitoring the Group’s Purpose, Values and
Culture, to ensure 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;
• Ensuring satisfactory dialogue, and approving all formal
communications with Shareholders;
• Ensuring effective engagement with, and encouraging
participation from, the Group’s stakeholders;
• Approval of Group policies and procedures covering a wide
range of matters such as health and safety, corporate social
responsibility and the environment; and
• Oversight of all corporate governance matters.
Board members
• Richard Cotton (Non-Executive Chairman)
• Gerald Kaye (Chief Executive Officer)
• Sue Clayton (Senior Independent Director)
• Joe Lister (Independent Non-Executive Director)
• Sue Farr (Independent Non-Executive Director)
• Robert Fowlds (Independent Non-Executive Director)
• Amanda Aldridge (Independent Non-Executive Director)
• Tim Murphy (Chief Financial Officer)
• Matthew Bonning-Snook (Chief Executive Officer Designate)
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/
II DIVISION OF RESPONSIBILITIES
Committees
Key investor relations activities
2023
April
Trading Update
May
Annual results announcement and analysts’
presentation for the full year to 31 March 2023
May/June
Investor Roadshow presentations
July
Trading Update
Annual General Meeting
October
Trading Update
November
Results announcement and analysts’ presentation
for the half year to 30 September 2023
November/December
Investor Roadshow presentations
2024
April
Trading Update
Annual General Meeting
For details of the resolutions passed at the 2023 Annual
General Meeting 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 pages 120
to 121. 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 144.
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 Cotton (Chair), Independent
Non-Executive Chair
• Sue Clayton, Senior Independent Director
• Joe Lister, Independent Non-Executive Director
• Sue Farr, Independent Non-Executive Director
• Robert Fowlds, Independent Non-Executive Director
• Amanda Aldridge, Independent Non-Executive
Director
Please also see Report of the Nominations
Committee on pages 112 to 117.
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, Senior Independent Director
• Richard Cotton, Independent Non-Executive Chair
• Joe Lister, Independent Non-Executive Director
• Robert Fowlds, Independent Non-Executive Director
• Amanda Aldridge, Independent Non-Executive
Director
Please also see Report of the Remuneration
Committee on pages 122 to 141.
Property Valuations Committee
Reviews the valuations of the Company’s property
portfolio and reports to the Audit and Risk
Committee on its findings.
Committee members:
• Sue Clayton (Chair), Senior Independent Director
• Gerald Kaye, Chief Executive Officer
• Matthew Bonning-Snook, Chief Executive Officer
Designate
• Rob Sims, Senior Property Executive
Please also see Report of the Audit and Risk
Committee on pages 118 to 121.
Sustainability Committee
Assists the Board in setting and monitoring the
Company’s sustainability strategy, policies, targets
and performance.
Committee members:
• Matthew Bonning-Snook (Chair), Chief Executive
Officer Designate
• Laura Beaumont, Head of Sustainability
• John Inwood, Head of Asset Management
• Lois Robertson, Operations Manager
• Elliott Saunders, Senior Development Executive
• Matt Redgrove, Development Executive
For further details on the Group’s sustainability
initiatives, please see pages 60 to 87.
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, Chief Executive Officer
Designate
• James Moss, Chief Operating Officer
• Rob Sims, Senior Property Executive
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
Director
• Sue Clayton, Senior Independent Director
• Sue Farr, Independent Non-Executive Director
• Robert Fowlds, Independent Non-Executive Director
• Amanda Aldridge (Chair Designate), Independent
Non-Executive Director
Please also see Report of the Audit and Risk
Committee on pages 118 to 121.
II DIVISION OF RESPONSIBILITIES
Corporate Governance Report
continued
Health and Safety Committee
Oversees and drives improved performance in
the strategies, policies and working practices of
the Group in relation to health and safety.
Committee members:
• Gerald Kaye (Chair), Chief Executive Officer
• Matthew Bonning-Snook, Chief Executive Officer
Designate
• Elliott Saunders, Senior Development Executive
• Matt Redgrove, Development Executive
• John Inwood, Head of Asset Management
• Lois Robertson, Operations Manager
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
110
111
Nominations Committee
Committee membership and attendance
Attended
Absent
Independent
Committee meeting
attendance
Richard Cotton (Chair)
Yes
Sue Clayton
Yes
Sue Farr
Yes
Joe Lister
Yes
Robert Fowlds
Yes
*
Amanda Aldridge
Yes
n/a**
* Robert did not attend the February 2024 meeting at which his appointment was approved.
** Amanda did not join the Committee until 1 April 2024.
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 areas of focus during 2023⁄24
• Further informal interactions between the Non-Executive
Directors and the wider Helical team.
• Incremental improvements to the Board’s annual strategy meeting.
• Ratification of CEO succession plans.
• Appointment and induction of two new Non-Executive Directors.
• Review of succession plans for the Board and senior
management.
• Internal Board Effectiveness Review conducted at the
beginning of 2024.
• Focus on diversity throughout all levels of the organisation.
Dear Shareholder,
As Chair of the Nominations Committee I am pleased to share details of
the Committee’s activities and achievements over the course of the year.
The Committee met twice over the year and spent a significant
proportion of its time considering the composition of the Board and its
Committees which culminated in the selection of our Chief Executive
Officer Designate and the appointment of two new Non-Executive
Directors. Succession planning for the other members of our Board and
senior management and the Group’s progression against the FCA’s
diversity and inclusion targets (see pages 114 to 115) were also afforded
significant attention over the period. In addition, the Committee oversaw
the 2024 Board Effectiveness Review which was conducted internally.
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. 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 (for the full Policy, please see https://www.helical.
co.uk/investors/governance/governance-policies/).
During the year, as part of the 2023/24 internal Board Performance
Review (see also Board Performance Review 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 (see also Director
independence and effectiveness section on page 116). For details of
our Directors’ skills and capabilities and how they contribute to the
Group’s long-term success, please see pages 102 to 104.
Succession planning for key positions at Executive Management level
(below Board) is primarily overseen by the full Board, with support
provided by the Committee in respect of particular initiatives. 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. The Executive Management team has a key role to play in our
strategic planning process, in the ongoing development of our talent
pipeline and in fostering the culture and values required to continue to
deliver on our strategy.
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 in 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.
CEO succession
Helical’s succession plans are kept under constant review by the
Nominations Committee and this year we were able to swiftly activate
the CEO succession plans we had in place.
During the period, the Committee conducted a scheduled review of
the succession arrangements for the Executive Directors and senior
management. The review considered the skills and strengths of all
potential internal candidates for Board succession, and highlighted
Richard Cotton
Chair of the Nominations Committee
III
COMPOSITION, SUCCESSION
AND EVALUATION
III COMPOSITION, SUCCESSION AND EVALUATION
Corporate Governance Report
continued
any 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 review
reconfirmed the potential successors for Executive Directors in the
short and long term and took gender and ethnic diversity into account.
The Committee was subsequently required to invoke Helical’s CEO
succession arrangements when our CEO, Gerald Kaye, reached his
decision to step down from the Board. At this point, the Nominations
Committee, with reference to the results of the externally supported
review conducted earlier in the year and in consultation with Sam Allen
Associates, approved the activation of the agreed succession plan,
whereby Matthew Bonning-Snook would succeed Gerald Kaye
following the conclusion of the 2024 Annual General Meeting (“AGM”).
Sam Allen Associates has qualified as an Enhanced Code Accredited
Firm with respect to the Voluntary Code of Conduct for Executive
Search Firms and has no other connection to Helical or its Directors
other than in a recruitment services capacity.
By virtue of our considered, robust CEO succession plan, combined
with an effective governance framework, we will be able to swiftly begin
Matthew’s transition to CEO. Over the course of the forthcoming year,
the Board will support Matthew’s development as he transitions into the
important CEO role, upholding its commitment to oversight of Helical’s
Purpose and Culture. For more information on the Board’s oversight of
Purpose, please see page 92. As mentioned on pages 100 to 101, the
Board is immensely grateful to Gerald for his significant commitment and
contribution to Helical over the last 30 years and is fortunate enough to
benefit from his wise counsel for the foreseeable future in his capacity
as a consultant to the Group.
I am proud to say that throughout this period of significant change,
the Committee has maintained a constructive and productive
relationship with the Executive Management team.
Non-Executive Director succession
Over the past year, the Committee has also placed significant focus
on Non-Executive Director succession, conducting extensive search
processes resulting in the appointment of two new independent
Non-Executive Directors, Amanda Aldridge and Robert Fowlds.
Before commencing the Non-Executive Director search process, the
Committee considered the known and anticipated Board retirements
and the impact of these on the overall skills and expertise on the Board.
These were mapped against the key areas of strategic importance to
the business to ensure the Board had the appropriate balance of skills
and experience to deliver Helical’s strategy, whilst also taking diversity
considerations into account. With the departure of Joe Lister in July
2024, it was determined essential for the Committee to identify a new
Board member who possessed recent and relevant financial experience
and could assume the role of Chair of the Audit and Risk Committee.
In searching for a new Chair of the Group Audit and Risk, the
Committee focused on established professionals in the fields of
finance and risk management, with a deep understanding of the
governance standards applicable to quoted UK businesses, and the
existing experience of the continuing Non-Executive Directors, who
had capacity to serve as Chair of the Audit and Risk Committee. The
Committee agreed that, given the nature of the business, individuals
with real estate experience would be preferable but not essential.
Taking into account the agreed specifications, the Committee
engaged external search consultancy MWM Consulting to conduct
a formal, transparent and rigorous recruitment process for the role.
MWM Consulting has qualified as an Enhanced Code Accredited Firm
with respect to the Voluntary Code of Conduct for Executive Search
Firms and has no connection to Helical other than in respect of the
appointment. In line with the objectives of the Board’s Diversity Policy,
the Committee asked MWM Consulting to ensure that the list of
candidates reflected diversity of gender, ethnicity, geography and age
as well as diversity in its broadest sense. You can read more about the
Board Diversity Policy and diversity across Helical on pages 114 to 115.
As Chair of the Committee, I worked closely with MWM Consulting
to develop the candidate list, with the Committee then considering
the candidate profiles in detail, including their current commitments,
skills and previous experience. I met with all shortlisted candidates
and provided my feedback to the Committee. All the existing Non-
Executive Directors met with the preferred candidates. Ultimately,
following prudent consideration, the Committee unanimously agreed
to recommend that the Board approved the appointment of Amanda
based on the knowledge, skill and experience she could contribute to
the Board and its Committees.
Robert was initially identified as a potential Board candidate and
the Committee unanimously agreed that his financial knowledge
and background in the real estate industry, as well as his experience
as a Non-Executive Director in the listed sector would render him
a valuable asset to the Board. The Committee instructed MWM
Consulting to conduct an independent review of Robert’s candidacy
to ensure that his appointment process accorded with Principle J
of the UK Corporate Governance Code (the “Code”) and would
strengthen the overall expertise of the Board and contribute to the
long-term success of the business.
Neither Amanda nor Robert have any direct connection to MWM
Consulting, other than in a recruitment services capacity.
The search process culminated in the appointments of Robert Fowlds
and Amanda Aldridge as Non-Executive Directors with effect from
8 February 2024 and 1 April 2024 respectively. You can read about
their induction process below.
In conducting the rigorous and extensive search for the two new
Non-Executive Directors, the Committee was at all times cognisant
of the FCA’s board diversity targets (see above) and the objectives of
the Group Diversity and Inclusion Policy. I am pleased to report that,
as a result of the appointment of Amanda Aldridge and the
resignations of Joe Lister and Gerald Kaye (from 17 July 2024), Helical
will exceed the 40% target, with 43% of its Board comprising women
(including those self-identifying as women). As a Committee, we
acknowledge the fact that despite this improvement, gender diversity
continues to be a key focus in our Board level succession plans.
The Committee placed great emphasis on ensuring that the search
process promoted diversity, inclusion and equal opportunity and, whilst
these appointments are undoubtedly beneficial to the long-term success
of our business and the composition of our Board in terms of skills sets,
the appointments have not altered the ethnic diversity of the Helical
Board (see pages 114 to 115). The Committee strongly supports the
appointments of Amanda and Robert, and believe that the appointments
are in the best interests of our stakeholders. The Committee
acknowledges that it is imperative to continue to focus on improving the
ethnic diversity of the Board, ensuring that the recommended targets
are at the forefront of our minds when devising longer-term Board
succession plans.
Amanda and Robert’s induction
Following appointment, all Directors receive a comprehensive and
tailored induction programme. This is designed through discussion
with the Chair and the Company Secretarial team and considers
existing expertise and any prospective Board or Board Committee
roles. The agreed plan for Robert and Amanda comprised interactive
sessions with both internal functions and external advisors with
information material to the Non-Executive Director role being
delivered to each of them at an early stage in the induction. The
interactive sessions with the Helical team and our external advisors
were followed up with tours of our property portfolio, providing insight
into all aspects of the business.
Governance
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Helical plc — Annual Report and Accounts 2024
112
113
III COMPOSITION, SUCCESSION AND EVALUATION
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. The Group’s Diversity and
Inclusion Policy can be found on our website: https://www.helical.co.uk/
investors/governance/governance-policies/
In accordance with the new Listing Rules (LR 9.8.6R(10) and LR 14.3.33R(2)), please see the numerical data on the sex or gender identity
and ethnic diversity of the Helical Board and Executive Management as at 31 March 2024:
Reporting table on sex/gender representation
Number of
Board members
Percentage of
the Board
Number of senior positions on the
Board (CEO, CFO, SID and Chair)
Number in Executive
Management
Percentage of
Executive Management
Men
6
75%
3
5
100%
Women
2
25%
1
0
0%
Not specified/prefer not to say
n/a
n/a
n/a
n/a
n/a
Reporting table on ethnicity representation
Number of
Board members
Percentage of
the Board
Number of senior positions on the
Board (CEO, CFO, SID and Chair)
Number in Executive
Management
Percentage of
Executive Management
White British or other White (including minority-white groups)
8
100%
4
5
100%
Mixed/Multiple Ethnic Groups
0
0%
0
0
0%
Asian/Asian British
0
0%
0
0
0%
Black/African/Caribbean/Black British
0
0%
0
0
0%
Other ethnic group, including Arab
0
0%
0
0
0%
Not specified/prefer not to say
n/a
n/a
n/a
n/a
n/a
In accordance with LR 9.8.6R (11), the data was collected directly, in a confidential setting, from each member of the Board and Executive
Committee by the Deputy Company Secretary.
In line 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.
III COMPOSITION, SUCCESSION AND EVALUATION
Corporate Governance Report
continued
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.
Diversity
The Committee has set out its status of compliance with the FCA’s new board diversity targets (Listing Rule (LR 9.8.6R(9)) as at
31 March 2024 as follows:
FCA BOARD DIVERSITY TARGET
TARGET MET
COMPLIANCE AT HELICAL
At least 40% of the board are women
(including those self-identifying as women)
No
(From
conclusion of
2024 AGM on
17 July 2024,
43% of the
Board will be
women)
As at 31 March 2024 25% of the Helical Board is comprised of women.
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 acknowledges 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.
With the appointment of Amanda Aldridge and the resignations of Gerald Kaye
and Joe Lister from the conclusion of the 2024 AGM, 43% of the Board will be
comprised of women.
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)
Yes
Sue Clayton is the Senior Independent Director on the Board.
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)
No
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 31 March 2025, 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.
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:
• Wednesday Breakfast Club: The Group proactively recognises
the importance of the health and wellness of its employees. With
the aim of facilitating interaction between all staff in the office,
healthy breakfast options are ordered every Wednesday morning
and staff are encouraged to take some time to catch up with
colleagues in our “breakout area” over breakfast.
• Mental health awareness and wellbeing – In July 2023, we
invited our employees to take part in a series of activities
designed to promote mental health awareness and wellbeing.
Such initiatives included:
–“Paws in Work” came to our offices and our employees were
given an opportunity to take a short break to relax, focus on
their mental wellbeing and play with adorable puppies.
–In conjunction with our building manager, Savills, we invited our
employees to join a Mental Health Awareness Masterclass.
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 94 to 99).
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, 26% 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 2024 can be found on page 76.
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 112 to 115.
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
114
115
The recommendations arising from this year’s evaluation process are noted in the table as follows:
RECOMMENDATIONS FROM THE 2022/23 BOARD PERFORMANCE REVIEW
PROGRESS
• Start the process of identifying and appointing a new
Non-Executive Director.
• We are pleased to report that this item has been completed, with the
appointment of two new Non-Executive Directors over the period.
• Further informal interactions between the Non-Executive
Directors and the wider Helical team.
• Engagement between the workforce and the Non-Executive Directors
is integral to Helical’s open and collaborative Culture (see pages 98 to
99). Open dialogue between the Board and the wider workforce is
strongly encouraged and this can be facilitated through informal events
(see page 96 for further details).
• Incremental improvements to the Board’s annual
strategy meeting.
• We can confirm that the recommendations of the Review were
implemented at the 2023 Board strategy meeting, with increased input
on the long-term sustainable growth and performance of the business
coming from non-Board members of senior management.
Furthermore, in response to specific Shareholder feedback, Deutsche
Numis were invited to attend the meeting to represent the views of the
Group’s Shareholders.
Results and key recommendations from the 2023/24 Board
Performance Review
I am pleased to confirm that the findings of the 2023/24 Board
Performance Review 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’ skills and expertise were reviewed
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 Review 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 risk identification and mitigation
were well covered and 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,
demonstrating commitment to their s172(1) Duties.
With respect to the evaluation of my performance as Chairman during
the period, there were no issues or concerns raised.
III COMPOSITION, SUCCESSION AND EVALUATION
Recommendations from the 2023/24 Board Performance Review
• Continue the programme of informal interactions between the
Non-Executive Directors and the wider Helical team.
• Conduct an externally administered Board Performance Review for
the year to 31 March 2025.
• Oversight and support for Matthew Bonning-Snook in his transition
from Property Director to Chief Executive Officer.
• Continued consideration of the independence and objectivity of the
Non-Executive Directors and the Board overall.
The Committee is in the process of formulating an action plan in
response to the recommendations of this year’s internal Board
Performance Review, and will report on progress made in next year’s
Annual Report.
Richard Cotton
Chairman
22 May 2024
III COMPOSITION, SUCCESSION AND EVALUATION
Appointment and re-appointment of Directors
In compliance with the Code, all the Directors shall be subject to
annual reappointment. Accordingly, the relevant Directors shall
retire and seek appointment or re-appointment (as appropriate) by
Shareholders at the 2024 AGM of the Company, with the exception
of Joe Lister and Gerald Kaye who are stepping down from the
Board. Please see the Notice of Meeting of the 2024 AGM for
additional information and the recommendations on appointment
and re-appointment. On behalf of the Nominations Committee,
I wish to thank Joe for his contribution and dedication to the work
of the Committee throughout his tenure. He will be greatly missed
around the table.
The Committee is satisfied that each of the Non-Executive Directors
being put forward for re-election continue to be independent,
effective and dedicated to the role. Despite not having partaken in the
most recent internal Board Performance Review (see details below),
given their qualifications and experience, Amanda Aldridge and
Robert Fowlds are considered to be effective and able to
demonstrate commitment to the role of a Non-Executive Director.
This consideration of effectiveness is based on, amongst other
things, the business skills and industry experience of the Directors
and other contributions each Director may make, both as an individual
and also in contributing to the balance of skills, knowledge and
capability of the Board and its Committees and other duties.
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 appoint and re-appoint (as appropriate)
each Non-Executive Director, with the exception of Joe Lister who
is standing down, be proposed at the AGM alongside resolutions to
re-appoint the Executive Directors, with the exception of Gerald Kaye.
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.
Our Non-Executive Directors hold our Executive Management to
account and ensure that no group or individual is dominating the
Board’s decision making processes. Therefore, maintaining the
independence of our Non-Executives is of utmost importance.
In accordance with the Code, the independence of all the Non-
Executive Directors was considered by the Committee as part of the
2023/24 Board Performance Review and the Board’s succession
plans. Both Sue Clayton and I have served on the Board for over
eight years and the Committee is cognisant that by 31 March 2025
our tenure will have exceeded the Code’s recommendations with
respect to independence. Although no concerns were raised with
respect to the objectivity or independence of Sue or I within this
year’s Board Performance Review, the Committee will continue to
place heightened focus on the independence and objectivity of each
Non-Executive Director, and the Board overall, throughout the course
of the forthcoming year. Our Board must evolve through sensible and
well-managed succession planning that does not compromise the
stability of the Board and the Committee will reflect this in the
succession plans for our Non-Executive Directors.
Board Performance Review
To ensure that the optimal performance of the Board is maintained,
an evaluation of the effectiveness of the Board is conducted annually.
The Board monitors and improves performance by reflecting on the
continuing effectiveness of its activities, the quality of its decisions
and by considering the individual and collective contribution made
by each Board member. 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.
It is customary for Helical to adopt the best practice approach of
the Code in relation to reviewing Board evaluation. Despite not being
within the FTSE 350, the Group has historically opted to comply with
Provision 21 of the Code, conducting an external Board evaluation
once every three years. However this year, following extensive
discussion, the Committee unanimously consented to defer the
external evaluation of the Board and its Committees for a period
of one year. It was agreed that in light of the recent and upcoming
changes to the composition of the Board (see above), greater benefit
might be derived from conducting an external performance review
once the newly comprised Board had been established and its
effectiveness could be properly assessed. As such, Helical will
instruct an externally facilitated evaluation of the Board and its
Committees in 2025, the results of which will be reported in the
2025 Nominations Committee Report.
Therefore, this year, I led the internal Board Performance Review,
as Chairman, with respect to the effectiveness of the Board and its
Committees and my performance review was conducted by our SID,
Sue Clayton.
The process
I conducted interviews with each Director and the Company
Secretary individually, covering the effectiveness of the Board
and its Committees. Each participant was supplied with a list of key
discussion points in advance of their interview. The key areas of
focus highlighted by the 2022/2023 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 2024. In
formulating the conclusions, I compared the key themes identified in
the internal 2024 Board Performance Review to the results from the
2023 Board Performance Review.
Similarly, Sue Clayton conducted my performance evaluation via
individual interviews with each Director and the Company Secretary.
Corporate Governance Report
continued
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
116
117
Joe Lister
Chair of the Audit and Risk Committee
Audit and Risk Committee
Committee membership and attendance
Attended
Absent
Independent
Committee meeting
attendance
Joe Lister* (Chair)
Yes
Sue Clayton
Yes
Sue Farr
Yes
Robert Fowlds***
Yes
Amanda Aldridge* (Chair Designate)
Yes
n/a**
* Has recent and relevant financial expertise.
** Amanda did not join the Committee until 1 April 2024.
*** Robert joined in February 2024. He attended the February meeting as an observer and
the March meeting as a member.
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 2023⁄24
• Review of the effectiveness of the Committee conducted as
part of the internal Board Performance Review.
• Review of significant issues relating to the financial statements
and how these were addressed.
• Assessment of the independence and effectiveness of the
external Auditor.
• Maturity of ESG reporting and related climate and financial
disclosures.
• UK regulatory developments and impact on the Company
including Audit Reform.
• Consideration of the need for an internal audit function.
• 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.
• Oversight and review of the transition of the Group’s
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 2024. This shall be my final report as Committee
Chair (please see Nominations Committee Report at page 113), and
I have been proud to serve the Shareholders since my appointment
to the role in July 2019. Prior to my official retirement from the role at
the upcoming AGM, I have been conducting a comprehensive
handover with the incoming Committee Chair, Amanda Aldridge.
Amanda will officially commence the role of Committee Chair
following the conclusion of the 2024 AGM.
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.
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,
including the Risk Management Framework (see pages 48 to 51);
• The need for an internal audit function;
• The external audit process and managing the Group’s relationship
with the external Auditor, including an assessment of the
independence and effectiveness of the external audit process and
the approach taken with respect to the appointment of the external
Auditor for the year to 31 March 2024; and
• The processes for compliance with laws, regulations and ethical
codes of practice.
The effectiveness of the Audit and Risk Committee was reviewed as
part of the Board Performance Review. Please see pages 116 to 117
for details of the Review and the key recommendations arising from it.
The work of the Committee during the year
The Committee met five times during the year and a record of
Director attendance for these meetings is shown on the 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, RSM UK Audit LLP (“RSM”), are also invited to
attend all or part of meetings as appropriate and the Committee met
twice with RSM 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;
• 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;
• 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 and approval of the Group’s policies, procedures and
internal controls;
• Consideration of the requirement for an internal audit function; and
• Oversight and review of the transition to a new external Auditor –
see below.
External Auditor transition
Work on the process of transitioning to a new external Auditor
commenced following the Company’s announcement of its intention
to appoint RSM on 13 July 2023, as approved at the 2023 Annual
General Meeting. This was to ensure there was sufficient time for a
seamless and efficient handover and for RSM to be fully established
in their role prior to commencement of their work on the audit for the
year to 31 March 2024.
During the transition period, the RSM team observed the 2023 audit
process and built familiarity with the Helical business, working
methods and culture and began establishing working relationships
with key members of the Helical team, particularly within the Finance
department. Following the conclusion of the audit for the year end to
31 March 2023, RSM reviewed the working papers and files prepared
by Deloitte to further deepen their understanding of the audit
approaches used and the judgements taken. Discussions were then
held with management to discuss how RSM’s approach, including
technology, applications and tools to support their audit, might differ
to that of the previous auditor. The Committee was kept informed
of the progress of the audit transition through updates provided by
RSM at its meetings in November 2023 and March 2024. Overall, the
Committee was satisfied that the transition process was completed
successfully and efficiently, resulting in an effective, constructively
challenging and high quality first-year audit from RSM.
Committee effectiveness
The Committee’s effectiveness was reviewed as part of the wider
2023/24 internal Board Performance Review process. The Committee
considered and reflected on the assessment of its effectiveness
subsequent to the year end, at its meeting in March 2024. It concluded
that, overall, it continued to be effective in executing its responsibilities
and, with the appointment of Amanda Aldridge as Chair Designate,
the Board had taken the necessary steps to secure its combination of
financial skills and relevant sector experience. Additionally, the Review
had indicated that the work of the Committee was appropriately
focused and that the Committee continued to be guided by a strong,
supportive Chair who encouraged substantive discussions and
debate during meetings. For further information regarding the
2023/24 Board Performance Review, please see pages 116 to 117.
Governance updates
The Committee is kept updated on any developments within the
audit, corporate governance, reporting and regulatory landscapes
that are of relevance to audit committees by the external Auditor.
During the year, the Committee received updates on a range of topics
including developing standards in ESG reporting, the FRC’s revisions
to the UK Corporate Governance Code, the FRC’s Annual Review of
Corporate Reporting and the FRC’s latest thematic reviews.
Risk management and internal controls
The Committee and the Board undertake bi-annual reviews of the
Group’s Risk Management Framework and their reviews this year
re-affirmed the Group’s Risk Management Framework (shown on
pages 48 to 51). This review process 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. In addition to the bi-annual reviews, the Committee
conducts reviews of the Group’s approach to risk management, the
operation of its Risk Management Framework and risk mitigation on
an ongoing basis. The Committee gives continuous consideration
to how the risk management process is embedded throughout the
Group to provide assurance that management’s accountability for
risks is clear and functioning.
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.
It is the responsibility of the Board to ensure that the Group’s internal
control system is effective in identifying risks, preventing losses from
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 Group’s Executive Committee (“ExCo”) continually assesses
and monitors the adequacy of the key internal controls and risk
management features as a standing agenda item at the monthly
meetings of the ExCo. The ExCo presents reports on its own
assessment of control and risk management as necessary, for
example, to provide the Committee with assurance on the Group’s
compliance with relevant policies, procedures, regulation and
legislation as well as the effectiveness of the internal control function.
In addition, the ExCo 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 and
the reporting lines, please see pages 48 to 51.
IV AUDIT, RISK AND INTERNAL CONTROL
Corporate Governance Report
continued
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
118
119
Significant areas of review
In discharging its responsibilities regarding the preparation of the
financial statements for the year to 31 March 2024, 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. The Committee has again considered setting up an internal
audit function. As part of this review, the Committee examined:
The business model under which the Company currently operates in
the context of its activities and the model under which it manages its
business operations.
–The Committee determined that there was a significant degree
of senior oversight, particularly in respect of ongoing business
performance, involving both the CEO and CFO, supported by
strong internal control frameworks.
The existing internal control environment.
–In this respect, the Committee was satisfied that procedures
and routines were well established across the business and that
management had given sufficient assurances that other monitoring
processes (including internal reviews of the Group’s operations
undertaken periodically by senior members of the finance team)
were being applied and would be developed using the existing
expertise of the finance department to help ensure that the
Group’s system of internal control was functioning as intended.
–The Committee was also satisfied that reports from the external
Auditor with regard to internal control and risk management had
been supplemented by extended assurance reviews by external
consultants in key risk areas, e.g. external reviews conducted by
the Group’s external IT provider, TFS, and Cyber Essentials
Plus certification.
Following the conclusion of their annual review of the need for an
internal audit function, the Committee 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 Committee has also conducted an overall review of Helical’s
internal control environment and confirmed that the key controls
had been implemented for the year. As part of this review, the
Committee received information from management about the
controls in place, which included operational, financial and
compliance controls. It also reviewed the recommendations on
internal controls communicated by the external Auditor in the
course of their audit. This review did not highlight any material
weaknesses in the design and effectiveness of the Group’s systems
and controls.
• Property valuation
The valuation of the Group’s investment 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
(>99%) 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. In order to assist the Audit and Risk Committee
in considering the valuations, the fair values of the investment
property portfolio are reviewed and approved by the Property
Valuations Committee which is chaired by Sue Clayton, FRICS,
an independent Non-Executive Director.
Fair, balanced and understandable – review of
the 2024 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.
We can confirm that the following updates have been included in
this year’s Annual Report, to further aid the reader’s understanding
of our business:
• Updated Risk Register and corresponding Heat Map.
• Commentary on the following items:
–Results of the 2023/24 Board Performance Review (see pages 116
to 117).
–The appointment process for two new Non-Executive Directors
and activation of CEO succession plans (see pages 112 to 113).
–Transition of the external Auditor (see page 119).
–“Working in Partnership” case study (see pages 20 to 21).
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?
• 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?
IV AUDIT, RISK AND INTERNAL CONTROL
Corporate Governance Report
continued
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 2024.
Effectiveness of the external Auditor
RSM were appointed as the Group’s Auditor at the 2023 AGM, and
overall, this first-year audit engagement was regarded as effective
and efficient, with both sides satisfied that documentation was shared
in a timely manner and appropriate processes were in place to
streamline the 31 March 2024 year end financial statement and audit
preparation process.
The Audit and Risk Committee reviewed RSM’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 March 2024) 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.
The Committee concluded that RSM’s performance as external
Auditor was effective. This conclusion was supported by:
• The challenges they raised on the key assumptions made in the
valuation of the investment property portfolio, including the level
of conservatism applied where assumptions sat within a range
of outcomes;
• Open discussions with the Committee with, and without,
management present; and
• Their responses to questions posed by the Committee, including the
Audit Partner’s depth of knowledge on the topic under discussion.
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 could impact the independence or objectivity of the
audit firm. Where such services are permitted under the FRC’s Ethical
Standards for Auditors as they apply to Public Interest Entities, 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.
During the year, the following non-audit services were undertaken
by RSM:
• review of the Half Year Results (£50,000).
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 RSM’s independence. The percentage of non-audit fees,
when compared to the total fee for the year, was 15%.
Annual General Meeting
At the Annual General Meeting scheduled to take place on
17 July 2024, the following resolutions relating to the Auditor
are being proposed:
• To re-appoint RSM as independent external Auditor; and
• To authorise the Directors to set the remuneration of the
independent external 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
22 May 2024
IV AUDIT, RISK AND INTERNAL CONTROL
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
120
121
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.
Remuneration Report index
This Directors’ Remuneration Report has been divided into the
following sections:
Section
Pages
Annual Statement
123-124
Remuneration at-a-glance
Sets out a summary of earnings for the year to 31 March 2024.
125
Implementation of the Remuneration Policy
Sets out the proposed implementation of the Remuneration
Policy for the year to 31 March 2025.
126-127
Remuneration Policy Report
Sets out the Remuneration Policy for Executive and Non-
Executive Directors.
128-133
Annual Report on Remuneration
Provides a detailed explanation of how the Remuneration Policy
was implemented in the year to 31 March 2024.
134-141
Directors’ Remuneration Report
Committee membership and attendance
Attended
Absent
Independent
Committee meeting
attendance
Sue Farr (Chair)
Yes
Sue Clayton
Yes
Richard Cotton
Yes
Joe Lister
Yes
Robert Fowlds*
Yes
Amanda Aldridge**
Yes
n/a
* Robert Fowlds was appointed to the Committee on 8 February 2024 and attended the
only Committee meeting held following his appointment.
** Amanda Aldridge was appointed to the Committee on 1 April 2024.
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, with the last
review in 2021, has conducted a comprehensive review of its
current Remuneration Policy. The results of this review are
Sue Farr
Chair of the Remuneration Committee
detailed on page 124, and reflected in the Implementation of the
Remuneration Policy and Remuneration Policy sections on pages
126 to 127 and 128 to 133.
The Committee sets incentive targets for the forthcoming one-year
and three-year performance periods each year, 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 performance measures. The Remuneration
Policy was reviewed during the year and the proposed new
measures, discussed further on page 124, are as follows:
• Absolute Performance Measures:
–Capital Recycling and Equity Sourcing
–Letting Targets
–Sustainability Targets
–Total Shareholder Return
• Relative Performance Measures:
–Total Shareholder Return
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.
V
REMUNERATION
Dear Shareholder,
I am pleased to present the Remuneration Committee’s Directors’
Remuneration Report (“Report”) for the year to 31 March 2024.
This Report has been approved by the Board of Helical plc.
The Report is divided into four main sections, being:
• This Annual Statement – which summarises the remuneration
outcomes in the year ended 31 March 2024 and how the Remuneration
Policy will be operated in the year ending 31 March 2025;
• Implementation of the Remuneration Policy – which sets out the
proposed implementation of the Remuneration Policy for the year
to 31 March 2025
• The Remuneration Policy Report – which sets out a summary of
the proposed Directors’ Remuneration Policy which will be taken
to Shareholders for approval at the 2024 AGM; and
• The Annual Report on Remuneration – which sets out how the
Committee intends to operate the Remuneration Policy for the year
ending 31 March 2025, the link between Company performance and
remuneration and payments and awards made to the Directors in
respect of the year just ended.
Performance in the year to 31 March 2024
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. This 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 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.
Operationally, the Group’s net rental income fell due to the lease end
event for the Group’s largest tenant, Baker Mackenzie, in December
2023, prior to the planned redevelopment of 100 New Bridge Street, EC4
as well as the loss of WeWork on five of the six floors they occupied at
The Tower at The Bower, EC1, in December 2023 with the lease on the
remaining floor due to end in June 2024. In total, these two tenants
accounted for 28.1% of gross rental income at 1 April 2023. Since these
lease events, we have signed a management agreement with infinitSpace
to provide serviced offices at the first and second floor at The Tower and
are refurbishing the vacant space at the building to attract new tenants.
In addition, action has recently been taken to reduce overheads with
an 8% reduction in fixed administration costs for the financial year to
31 March 2024 and further action envisaged with an additional 25%
reduction targeted with effect from 1 April 2025.
The Group has significantly increased its development pipeline,
having been selected as the preferred investment partner of
Transport for London (“TfL”) on three new development schemes,
and has recently signed a joint venture partner on the development
of 100 New Bridge Street, EC4.
However, set against the operational progress made in the year is the
continued outward movement of valuation yields which has contributed to
a see-through loss on sale and revaluation in the year of £188.6m (2023:
£88.1m) and an overall loss after tax of £189.8m (2023: loss of £64.5m).
Turning to relative performance measures, the Total Property Return,
as measured by MSCI, generated a return of -20.3% (2023: -5.6%)
compared to the MSCI benchmark for central London offices of -5.7%
(2023: -8.5%). The TSR for the year, based on the three-month average
share price to each year end, generated a return of -37.3% (2023: -14.5%).
As noted in Gerald Kaye’s statement on page 6, both EPRA earnings
and realised capital profits are considered when determining the
payment of dividends. With EPRA EPS reducing significantly and no
realised profits during the year, the Board has taken the decision to
reduce the final dividend.
Accordingly, the Board is recommending a final dividend of 1.78p,
the minimum required by the REIT rules, (2023: 8.70p), taking the total
dividend for the year to 4.83p (2023: 11.75p), a decrease of 58.9%.
The Group continued to perform well against its sustainability goals
and targets, maintaining its CDP rating at B, its EPRA Sustainability
rating at Gold and its MSCI ESG rating at AAA. However, despite
achieving the highest rating against its peer group for standing
investments, its overall GRESB rating fell to 4* from 5*, due to tougher
criteria introduced this year.
Most notably in the period, we received our final Outstanding BREEAM
certification for The JJ Mack Building, EC1, achieving a score of 96.4%
which is currently the highest score of a commercial development in
the UK under the New Construction 2018 scheme. This impressive
result supports our continued commitment to drive sustainability
forward on all our developments and demonstrates what is possible
when sustainability is embedded as a key driver from the outset.
Annual Bonus Scheme 2018
Subsequent to the year end, and in accordance with the rules of the
Helical Annual Bonus Scheme 2018 (“Bonus Scheme”), annual bonuses
have been calculated based on the results for the year to 31 March 2024
for Gerald Kaye, Matthew Bonning-Snook and Tim Murphy. 40% of the
maximum bonus payable was determined by the Total Accounting
Return of the Group with 20% dependent upon the relative Capital
Return of the Group’s portfolio, as measured by MSCI, compared to the
MSCI Central London Capital Growth Index. The remaining 40% was
payable based on letting targets and ESG objectives.
In assessing the performance of the Group against these targets,
annual bonuses of 23% of the maximum (equivalent to 34.5% of salary)
are estimated to be payable in accordance with the Bonus Scheme
rules. However, as referred to below, in view of the financial results for
the year to 31 March 2024, the three Executive Directors have agreed
that no bonus should be taken for the year to 31 March 2024.
Performance Share Plan 2014
Share awards granted in 2021 under the terms of the 2014
Performance Share Plan were subject to three performance conditions
over the three years to 31 March 2024. 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 none of these conditions were met at the
threshold level. Consequently, none of the 2021 PSP awards will vest in
June 2024. Full details of the targets and Helical’s performance are set
out in the Annual Report on Remuneration.
The Committee believes that the lack of annual bonuses, and
nil vesting of the 2021 PSP award in respect of the three-year
performance period to 31 March 2024, accurately and fairly represent
the performance of the Group over the respective annual and three-
year performance periods.
Annual Statement
V REMUNERATION
Corporate Governance Report
continued
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
122
123
Remuneration at-a-glance
V REMUNERATION
SUMMARY OF HISTORIC KPI PERFORMANCE
Financial
2020
2021
2022
2023
2024
EPRA earnings/(loss) per share
7.6p
(1.8p)
5.2p
9.4p
3.5p
EPRA TAR
9.3%
4.5%
10.2%
-12.1%
-31.4%
EPRA NTA per share
6.1%
1.7%
7.3%
-13.8%
-32.9%
TPR MSCI – 1 year
9.6%
7.0%
10.7%
-5.6%
-20.3%
TPR MSCI – 3 year
10.2%
8.9%
9.1%
3.8%
-5.9%
12 month TSR – (based on 3 month average to 31 March)
34.8%
-9.6%
9.8%
-14.5%
-37.3%
ESG
GRESB
2*
3*
4*
5*
4*
EPRA Sustainability BPR
Bronze
Silver
Gold
Gold
Gold
MSCI ESG
AA
AAA
AAA
AAA
AAA
CDP
C
B
C
B
B
FINANCIAL KPIs
ESG KPIs
EARNINGS FOR THE YEAR TO 31 MARCH 2024
Total remuneration for Executive Director
Salary2
£000
Benefits3
£000
Pension4
£000
Total
Fixed
£000
Annual
bonus
£000
Share
awards5
£000
Share
Incentive
Plan6
£000
Total
Variable
£000
Total
2024
£000
Total
2023
£000
Gerald Kaye
587
54
–
641
–
38
7
45
686
1,786
Tim Murphy
341
17
–
358
–
23
7
30
388
1,025
Matthew Bonning-Snook
456
50
–
506
–
28
7
35
541
1,396
1 Full details of the Directors’ remuneration for the year can be found in the table on page 134.
2 Basic salaries were increased by 3.0% from 1 April 2023.
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 19 June 2023 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 each, the same as in the previous year.
V REMUNERATION
Corporate Governance Report
continued
ANNUAL BONUS PLAN – TARGETS AND OUTCOMES
Performance measure
Pay-out target
Actual
%
awarded
20%
100%
TAR
40%
5.0%
10.0%
-31.4%
0.0%
MSCI Capital Return
20%
-8.5%
-4.0%
-22.8%
0.0%
Letting Target 1
20%
50%
100%
67%
13.5%
Letting Target 2
10%
80%
90%
65%
0.0%
ESG
10%
9.5%
Bonuses not taken
(23.0%)
Total
100%
0.0%
Performance measure
Pay-out target
Actual
%
awarded
10%
100%
NAV
33%
10.6%*
15.2%*
-10.9%
0.0%
TPR
33%
-4.0%
-1.4%
-5.9%
0.0%
TSR
33%
-8.0%
8.2%
-41.3%
0.0%
Total
100%
0.0%
* 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.
2021 PSP AWARD VESTING IN 2024 – TARGETS AND OUTCOMES
EPRA Net Tangible
Asset (NTA) value
per share
2023: 493p
331p
EPRA Earnings
per Share
2023: 9.4p
3.5p
Total Property
Return – MSCI
(1 year)
2023: -5.6%
-20.3%
EPRA Total
Accounting Return
2023: -12.1%
-31.4%
Total Shareholder
Return
2023: -14.5%
-37.3%
Total Property
Return – MSCI
(3 year)
2023: 3.8%
-5.9%
GRESB
2023: 5*
4*
MSCI ESG
2023: AAA
AAA
EPRA Sustainability
BPR
2023: Gold
Gold
CDP
2023: B
B
Implementation in the year to 31 March 2025
Base salaries and fees
The Company’s policy on salary increases for Executive Directors is
usually to align them with increases for other employees. In practice,
salary increases have been awarded at levels significantly below the
average salary increases awarded to other staff (2023: 3.0% versus
8.7%, 2022: 3.0% versus 4.1%). For the year to 31 March 2025, the
Remuneration Committee, cognisant of the results for the year to 31 March
2024 and reflecting the Board’s intention to continue to exercise control
over the Company’s fixed overheads, has decided to keep salaries for
the Executive Directors at the same level as at 1 April 2023. This compares
to the average salary increase awarded to other staff of 5.1%.
There are no changes to the level of fees payable to the
Non-Executive Directors.
Annual bonus for the year ending 31 March 2025
To reflect key priorities over the next year, the Committee is
proposing that the Total Accounting Return target (currently weighted
at 40% of the annual bonus) be replaced by two balance sheet
metrics of Capital Recycling (based on property sales) and Equity
Sourcing (based on new equity/joint venture capital, at asset level),
each weighted at 25% of the annual bonus potential. Underpinning
the balance sheet metrics will be an expectation from the Committee
that the relatively short-term nature of the Group’s bank borrowings
will be extended to 3-5 years during the year ending 31 March 2025.
In addition, the 20% currently based on strategic targets (which include
vacancy related targets) will be simplified to solely focus on Vacancy
Rates in respect of our investment portfolio (including completed
developments), with the weighting increased to 30%. The targets
will be underpinned by a requirement to let space at market values.
The remaining 20% will continue to be based on ESG (energy
intensity and carbon emissions targets).
2024 PSP awards
Reflecting Helical’s renewed focus on delivering shareholder returns,
the performance targets for the 2024 PSP awards are to be as follows:
• For 50% of awards: The Committee wishes to continue to operate
relative Total Shareholder Return targets measured against our
FTSE 250 and SmallCap sector peers (this comparator group was
introduced at the previous Policy review) albeit the metric has been
upweighted from the 40% of awards previously operated; and
• For 50% of awards: The Committee wishes to introduce absolute
Total Shareholder Return to replace both Net Asset Value growth
(previously weighted at 40%) and relative Total Property Return
(previously weighted at 20%). While the Committee notes that the
operation of absolute TSR targets is not common practice in the
sector, the Committee believes that this approach is appropriate for
the 2024 PSP awards to further improve the alignment between
Executive Director remuneration and shareholder returns.
Underpins: In addition to the above, the Committee will review both
vesting levels and values to ensure that:
(i) they are reflective of underlying performance of the Company; and
(ii) appropriate progress has been made in respect of Helical’s Net
Zero Carbon Pathway and our commitment to becoming net zero
by 2030.
These underpins will replace the NAV growth underpin historically
operated (although not formally part of the Remuneration Policy).
Renewal of Remuneration Policy
During the last year, the Committee has reviewed the Group’s
Remuneration Policy (“Policy”) and the result of these deliberations is
a new Policy to be put to Shareholders for a binding vote at the AGM
on 17 July 2024. The Committee is not proposing any significant
changes to the Policy, which received 96% of votes cast in favour at
the 2021 AGM and which continues to incentivise management to
deliver the Strategy agreed by the Board, maximising Shareholder
returns through delivering income growth from creative asset
management and capital gains from our development activity.
We are, however, proposing two minor changes to the Remuneration
Policy in respect of pensions and benefits:
• Helical does not offer pension provision to Executive Directors
and this approach will continue to apply for the current Executive
Directors. However, reflecting Helical’s practice of offering pension
provision below Board level, and to aid future recruitment/promotion,
the Policy will be updated to permit a workforce aligned pension
provision for any new Executive Directors. To the extent that pension
provision is offered to new Executive Directors, their salaries will be
positioned appropriately to reflect this; and
• Helical has historically provided company cars or car allowances to
Executive Directors and senior management. Going forward, this
benefit-in-kind will be removed.
In proposing the new Policy, we have reflected market expectations
of appropriate remuneration levels in the sector and amongst the
Group’s peers. As part of the Policy review, the Committee consulted
with the Company’s major Shareholders (covering over 68% of
issued share capital) and the major shareholder representative
bodies. Shareholder feedback from this consultation is reflected in
the proposed new Remuneration Policy.
The Committee’s intended approach to operating the new Policy is
detailed in the section headed Implementation of the Remuneration
Policy on pages 126 and 127 and further details of the new Policy are
included in the Remuneration Policy Report on pages 128 to 133.
2024 Annual General Meeting resolutions
The following resolutions relating to remuneration will be presented
at the 2024 AGM:
• An advisory resolution in respect of the Annual Report on
Remuneration for the year to 31 March 2024.
• A binding resolution in respect of the new Remuneration Policy.
• A binding resolution in respect of the renewal of the Company’s
long-term incentive plan, the 2024 Performance Share Plan.
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
22 May 2024
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
124
125
Implementation of the Remuneration Policy
Subject to the approval of the proposed Remuneration Policy at the 2024 AGM, the Remuneration Policy will be implemented for the year
to 31 March 2025 as follows:
Remuneration Policy
Implementation for 2024/25
Change from 2023/24 implementation
Basic annual salaries
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 2024 will remain at:
Gerald Kaye £586,585
Tim Murphy £341,395
Matthew Bonning-Snook £456,290
The salaries of Executive Directors were
not increased at 1 April 2024. The
average increase for all other employees
was 5.1%.
Benefits-in-kind
To provide insured health protection.
Each Executive Director will be
provided with private medical
insurance, life assurance and
permanent health insurance.
The Company no longer provides cars,
car allowances or car fuel.
Pension
The Group does not provide for the retirement of current Executive Directors.
Pensions are to be provided for future, newly appointed Executive Directors.
No retirement provision for current
Executive Directors.
No change for current Executive
Directors. Workforce aligned pensions
will be available, at rates similar to all
other employees, for future, newly
appointed Executive Directors.
Annual bonus
Annual performance targets are set by the Committee in advance of the financial
year and are linked to the Group’s strategy of maximising Shareholder returns
through delivering income growth from creative asset management and capital
gains from its development activity.
The maximum bonus is capped at 150% of salary 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 Capital Recycling, Equity
Sourcing and vacancy measures, the Committee will retain discretion to reduce
(including to zero) the pay-out under the ESG targets.
The performance conditions are:
50%: Capital Recycling and Equity
Sourcing (at asset level) targets
30%: Vacancy Rate
Base – 10.0% by 31 March 2025
(20% payable)
Stretch – 5.0% by 31 March 2025
(100% payable)
20%: ESG targets (these will be
reported on retrospectively in the
Directors’ Remuneration Report for
the year to 31 March 2025).
New Capital Recycling and Equity
Sourcing targets. Increased focus on,
and weighting to, improving Vacancy
Rate. Increased weighting to ESG targets.
Performance conditions previously used:
TPR weighting reduced from 20%
to nil%
TAR weighting reduced from 40%
to nil%.
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.
As per Policy
No change
V REMUNERATION
Remuneration Policy
Implementation for 2024/25
Change from 2023/24 implementation
Long-term incentive awards
Annual award 2024 – Vesting in 2027
Annual awards, under the terms of the Group’s Performance Share Plan (“PSP”),
will be granted in June 2024 over shares equal to 250% of salary at 31 March 2024.
The performance conditions are:
50%: Relative TSR against the FTSE 250
and Small Cap sector companies,
excluding agencies.
50%: Absolute TSR targets
Relative TSR weighting increased from
40% to 50%
Absolute TSR target introduced at
50% weighting
• Threshold 10.0% pa
• Stretch 20.0% pa
Performance conditions previously used:
Net asset value growth weighting reduced
to nil%.
TPR weighting reduced from 20% to nil%.
Malus and clawback
Malus and clawback provisions will continue to operate.
As per Policy
No change
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).
As per Policy
No change
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 last increased on 1 April 2022. An additional
£10,000 pa (unchanged) is payable to the SID and Chairs of each Committee.
Richard Cotton (Chairman) £162,500
Sue Clayton (SID and Valuations)
£72,000
Sue Farr (Remuneration) £62,000
Joe Lister (Audit and Risk) £62,000
(pro-rata to AGM date of 17 July 2024)
Robert Fowlds £52,000
Amanda Aldridge £52,000 (to be
increased to £62,000 from date of AGM)
No change
V REMUNERATION
Corporate Governance Report
continued
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
126
127
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 proposed 2024 Remuneration Policy
which will be effective for the three years from 1 April 2024 to
31 March 2027.
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 and absolute performance of the
Group and its Total Shareholder Return against appropriate
benchmarks. The remaining awards are judged on operational
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.
Directors’ Remuneration Policy table
The table below summarises the Directors’ Remuneration Policy.
Element
Purpose and link to strategy
Operation
Maximum
Performance targets
Salary
• Reflects the value of the
individual and their role
and responsibilities
• Reflects delivery against key
personal objectives and
development
• Provides an appropriate level
of basic fixed income, avoiding
excessive risk arising from over
reliance on variable income
• Normally reviewed annually,
effective 1 April
• Paid in cash on a monthly basis
• Not pensionable for current
Executive Directors
• Takes periodic account against
companies with similar
characteristics and sector
comparators
• Reviewed in context of the salary
increases across the Group
• No minimum or maximum salary
increase is operated
• 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
• n/a
Annual bonus
• Provides focus on delivering
returns from the Group’s
property portfolio
• Rewards and helps retain key
Executive Directors and is
aligned with the Group’s risk
profile
• Maximum bonus only payable for
achieving demanding targets
• Payable in cash (two thirds) and
deferred shares (one third) unless
the shareholding guideline has been
met, in which case the annual bonus
will be payable in cash up to 100%
of salary and in deferred shares
from 100% to 150% of salary
• Non-pensionable
• Dividend equivalent payments
(in cash or in shares) may be
payable on deferred shares
• 150% of salary pa for all
Executive Directors
• Performance normally measured
over one year
• 20% of an award vests at threshold
performance
• Performance targets will be based
on Capital Recycling and Equity
Sourcing, Vacancy Rates and
ESG targets.
• Malus and clawback provisions apply
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 package 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.
Proposed changes from the current Directors’
Remuneration Policy
Two minor changes to the Remuneration Policy are being proposed
in respect of pension and benefits:
• Helical does not offer pension provision to Executive Directors
and this approach will continue to apply for the current Executive
Directors. However, reflecting Helical’s practice of offering pension
provision below Board level, and to aid future recruitment/
promotion, the proposed Policy has been updated to permit a
workforce aligned pension provision for any new Executive
Directors. To the extent that pension provision is offered to new
Executive Directors, their salaries will be positioned appropriately
to reflect this; and
• Helical has historically provided company cars or car allowances
to Executive Directors and senior management. Going forward,
this benefit-in-kind will be removed.
V REMUNERATION
Element
Purpose and link to strategy
Operation
Maximum
Performance targets
Long-term
incentive
awards
• Aligned to main strategic
objective of delivering long-term
value creation
• Aligns Executive Directors’
interests with those of
Shareholders
• Rewards and helps retain key
Executives and is aligned with
the Group’s risk profile
• Discretionary annual grant of
conditional share awards under
the proposed 2024 PSP Scheme
• Executive Directors are required
to retain PSP shares acquired, net
of shares sold to pay tax liabilities
arising on vesting, for at least two
years after vesting
• Dividend equivalent payments (in
cash or in shares) may be payable
• 250% of salary pa for all
Executive Directors
• Performance normally measured
over three years
• 10% of an award vests at threshold
performance
• Performance targets for 2024 awards
will be based on Total Shareholder
Return
• Malus and clawback provisions apply
Pensions
• To help recruit and retain new
Executive Directors
• Current Executive Directors are
not eligible for pensions or pension
contributions
• New Executive Directors will be
eligible to receive pension
contributions (either as a cash
supplement and/or a contribution
into their own pension
arrangements at a rate
commensurate with all other
employees)
• Workforce aligned (new
Executive Directors only)
• n/a
Other benefits • Provide insured benefits to
support the individual and their
family during periods of ill health,
accidents or death
• Benefits provided through third
party providers
• Insured benefits include: private
medical cover, life assurance and
permanent health insurance
• Other benefits may be provided
where appropriate
• n/a
• n/a
Share
ownership
guidelines
• To provide alignment of interests
between Executive Directors
and Shareholders
• 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
• Fees are reviewed on a regular
basis
• Benefits may be provided where
appropriate
• Fixed three-year contracts with
three-month notice periods
• No minimum or maximum fee
increase is operated
• Fee increases may be guided by
the average increase awarded
to Executive Directors and other
employees and/or general
movements in the market
• Increases may be above this
level if there is an increase in the
scale, scope or responsibility of
the role
• n/a
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.
V REMUNERATION
Corporate Governance Report
continued
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
128
129
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 three times in the last seven
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 98 and 99. Through these
methods, the Company engages with its workforce on remuneration
matters where appropriate.
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 current Directors do not
receive pensions from the Group, this provision is not currently
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 (both current and proposed)
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.
V REMUNERATION
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 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. 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.
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
Policy
Salary
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
Benefits would be as currently provided and periodically
reviewed, being private medical cover, permanent health
insurance and life assurance.
Pension
There is no Group pension scheme for current Directors and
no contributions are payable to current Directors’ own pension
schemes. New Executive Directors will be eligible to receive
the benefit of pension contributions paid into their own
pension scheme.
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 2024 PSP will be made
in accordance with the terms of that Plan.
Share
Incentive Plan
In line with that of existing Executive Directors.
Shareholding
guideline
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.
Buy-out
awards
Should it be deemed necessary to compensate a new Director
for loss of bonus or incentives from a previous employer, the
Committee may structure the remuneration of such Director
to buy-out any such bonus or incentives on a like-for-like
basis in respect of currency (i.e. cash versus shares), timing
and performance targets. Where possible such buy-out will
be structured within the Company’s existing incentive
arrangements but the Committee has the discretion to
implement the exemption under rule 9.4.2 of the Listing Rules.
Non-Executive
Directors
Newly appointed Non-Executive Directors will be paid fees
at a level consistent with existing Non-Executive Directors.
Fees would be paid pro-rata in the year of appointment.
How employee pay is taken into account and 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. There is no Group pension
scheme for current Executive 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.
V REMUNERATION
Corporate Governance Report
continued
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
130
131
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 and the
Group and against strategic, operational and ESG targets 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 2024 review of the Remuneration Policy and to be
implemented for the year to 31 March 2025, are as follows:
• 25% of the annual bonus will be payable if targets for capital
recycling, based on property sales, are met;
• 25% of the annual bonus will be payable if targets for equity
sourcing, based on new equity/joint venture capital, at asset level,
are met;
• 30% of the annual bonus will be payable if targets for letting vacant
space in the portfolio are met; and
• 20% of the annual bonus will be payable if ESG targets are met.
The Committee will review the threshold and stretch 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,
operational 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 10-year dilution limit will apply.
V REMUNERATION
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
Notice period
Date of first employment
Board appointment
Date of current contract
Gerald Kaye
6 months
6 March 1994
28 September 1994
25 July 2016
Tim Murphy
6 months
1 March 1994
24 July 2012
25 July 2016
Matthew Bonning-Snook
6 months
13 March 1995
1 August 2007
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 2024;
• 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 PSP in line with the normal maximum award (with target assumed to be 50% of the maximum) plus shares
awarded under the Helical 2022 Approved Share Incentive Plan; and
• In the final column of each chart, share appreciation of 50% across the three-year performance period of the awards made under the PSP.
611
1,792
Minimum
On target
Maximum
GERALD KAYE
TIM MURPHY
MATTHEW BONNING-SNOOK
2,966
3,700
100%
34%
20%
16%
100%
34%
20%
16%
100%
34%
20%
16%
25%
30%
24%
41%
50%
40%
20%
25%
30%
24%
41%
50%
40%
20%
25%
30%
24%
41%
50%
40%
20%
357
1,046
Minimum
On target
Maximum
1,728
2,154
480
1,399
Minimum
On target
Maximum
Maximum
with 50%
share price
growth
Maximum
with 50%
share price
growth
Maximum
with 50%
share price
growth
2,311
2,881
Basic salary & benefits
Bonus
Share awards
Maximum with 50% share price growth
VALUE OF REMUNERATION PACKAGES AT DIFFERENT LEVELS OF PERFORMANCE
£’000
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 14 July 2022, or later if subsequently appointed to the Board. 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
Board appointment
Commencement date
of current term
End date
of current term
Richard Cotton – Board Chairman and Chair of the Nominations Committee
1 March 2016
14 July 2022
13 July 2025
Sue Clayton – Senior Independent Director and Chair of the Property Valuations Committee
1 February 2016
14 July 2022
13 July 2025
Sue Farr – Chair of the Remuneration Committee
5 June 2019
14 July 2022
13 July 2025
Joe Lister1 – Chair of the Audit and Risk Committee
1 September 2018
14 July 2022
13 July 2025
Robert Fowlds
8 February 2024
8 February 2024
7 February 2027
Amanda Aldridge1
1 April 2024
1 April 2024
31 March 2027
1 Joe Lister is to step down at the 2024 AGM and Amanda Aldridge will be appointed Chair of the Audit and Risk Committee on re-election at the AGM.
V REMUNERATION
Corporate Governance Report
continued
Performance Share Plan 2014
Performance conditions for awards granted in 2023 under the terms of the Performance Share Plan 2014 were 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
40.0
Upper quartile or above
40.0
Upper quartile or above
20.0
5% pa to 10% pa
Pro-rata from 4.0 to 40.0
Median to upper quartile
Pro-rata from 4.0 to 40.0
Median to upper quartile
Pro-rata from 2.0 to 20.0
5% pa
4.0
Median
4.0
Median
2.0
Below 5% pa
nil
Less than median
nil
Less than median
nil
1 Net asset value growth – the fully diluted EPRA 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 EPRA triple net asset value is below 5.0% pa and the relative TSR is below the median over the three-year period.
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
132
133
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 2024
and how the Policy is intended to be implemented in the year to 31 March 2025.
Application of the Remuneration Policy in the year to 31 March 2024
Work of the Committee during the year
The Committee’s work during the year under review included the following:
Fixed pay
• The annual salary review for the Executive Directors and wider workforce.
Performance related pay
• The approval of annual bonuses for the year ended 31 March 2023;
• The review of bonus targets for the year ended 31 March 2024;
• The setting of targets for the PSP awards which were granted in July 2023; and
• The approval of the vesting of PSP awards in July 2023 which were originally granted in June 2020.
Other matters
• The Committee updated its terms of reference for the latest developments in good practice.
• The Committee reviewed the Remuneration Policy and considered what changes were required to the Policy to seek Shareholder approval
at the 2024 AGM.
Total remuneration in the year to 31 March 2024
This section has been subject to audit unless otherwise stated.
Directors’ remuneration
Total remuneration in respect of the Directors in the year to 31 March 2024 was as follows:
Year to 31 March 2024
Fixed
Variable
Total
£000
Basic salary/
fees
£000
Benefits 1
£000
Sub-total
£000
Annual
cash
bonus
£000
Deferred
bonus shares
£000
Share 2
awards
£000
Share
Incentive
Plan 3
£000
Sub-total
£000
Executive Directors
Gerald Kaye
587
54
641
–
–
38
7
45
686
Tim Murphy
341
17
358
–
–
23
7
30
388
Matthew Bonning-Snook
456
50
506
–
–
28
7
35
541
1,384
121
1,505
–
–
89
21
110
1,615
Non-Executive Directors
Richard Cotton
162
–
162
–
–
–
–
–
162
Sue Clayton
72
–
72
–
–
–
–
–
72
Sue Farr
62
–
62
–
–
–
–
–
62
Joe Lister
62
–
62
–
–
–
–
–
62
Robert Fowlds4
8
–
8
–
–
–
–
–
8
366
–
366
–
–
–
–
–
366
Total
1,750
121
1,871
–
–
89
21
110
1,981
1 Benefits include the provision of a car, fuel allowance, private medical cover, life assurance and permanent health insurance. Significant individual benefits include £24,000 and £23,000 car benefit
for Gerald Kaye and Matthew Bonning-Snook respectively.
2 The 2021 PSP awards are not expected to vest. Dividend shares awarded to Directors on 19 June 2023 under the terms of the Annual Bonus Scheme 2018 are included at their actual vesting price
of 278.00p.
3 The Share Incentive Plan figure relates to the free and matching shares awarded under the Helical Bar 2022 Share Incentive Plan, details of which are on page 139.
4 Robert Fowlds joined the Board on 8 February 2024.
V REMUNERATION
Total remuneration in respect of the Directors in the year to 31 March 2023 was as follows:
Year to 31 March 2023
Fixed
Variable
Total
£000
Basic salary/
fees
£000
Benefits 1
£000
Sub-total
£000
Annual
cash
bonus
£000
Deferred
bonus shares
£000
Share 2,3
awards
£000
Share
Incentive
Plan 4
£000
Sub-total
£000
Executive Directors
Gerald Kaye
570
48
618
427
–
734
7
1,168
1,786
Tim Murphy
331
14
345
249
–
424
7
680
1,025
Matthew Bonning-Snook
443
47
490
332
–
567
7
906
1,396
1,344
109
1,453
1,008
–
1,725
21
2,754
4,207
Non-Executive Directors
Richard Cotton
137
–
137
–
–
–
–
–
137
Richard Grant
47
–
47
–
–
–
–
–
47
Sue Clayton
69
–
69
–
–
–
–
–
69
Sue Farr
62
–
62
–
–
–
–
–
62
Joe Lister
62
–
62
–
–
–
–
–
62
377
–
377
–
–
–
–
–
377
Total
1,721
109
1,830
1,008
–
1,725
21
2,754
4,584
1 Benefits include the provision of a car, fuel allowance, private medical cover, life assurance and permanent health insurance. Significant individual benefits include £24,000 and £22,000 car benefit
for Gerald Kaye and Matthew Bonning-Snook respectively.
2 PSP awards are included at their actual vesting values in July 2023 of 278.00p. The table included in the 2023 Financial Statements included share awards at the average share price over the three
months to 31 March 2023 of 344.52p. Dividend shares awarded to Directors on 27 July 2022 under the terms of the Annual Bonus Scheme 2018 are included at their actual vesting price of 386.00p.
3 The PSP award values include no share price appreciation.
4 The Share Incentive Plan figure relates to the free and matching shares awarded under the Helical Bar 2022 Share Incentive Plan, details of which are on page 139.
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 pay-out of their maximum
bonus, capped at 150% of basic salary. This is set out in the second table below.
Metric
Performance condition
Weighting
Threshold
target
Stretch
target
Outcome
% of bonus
payable
TAR
Total Accounting Return
20% of the maximum bonus available pays out if the Group’s EPRA TAR, adjusted
for performance related awards and calculated annually, exceeds 5.00% increasing
pro-rata to 100% for a TAR of 10.0% or greater.
40.00%
5.00%
10.00%
-31.37%
00.00%
TPR
Portfolio Capital Return v MSCI Central London Offices Capital Growth Index
20% of the maximum bonus available pays out if the Group’s Portfolio Capital Return
matches the performance of the Index increasing pro-rata to 100% for matching or
exceeding the Index plus 4.50%.
20.00%
-8.50%
-4.00%
-22.80%
00.00%
Letting
Targets
1. The JJ Mack Building Letting Target
20.00%
50.0%
100.0%
67.43%
(see below)
13.49%
2. The Loom Letting Target
10.00%
80.0%
90.0%
Not achieved
(see below)
00.00%
ESG
3. Energy Intensity on Retained and Let Investment Assets
5.00% 124 kWh/m2 122 kWh/m2
119 kWh/m2
5.00%
4. Carbon Emissions on Retained and Let Investment Assets
5.00%
2.68 kg of
CO2 per sq ft
2.60 kg of
CO2 per sq ft
2.62 kg of CO2
per sq ft
4.50%
5. Underpin
Maintaining its sustainability scores at previous year’s levels of:
GRESB 5*
CDP B
EPRA Sustainability BPR Gold
Partially
achieved
(see below)
Total
100.00%
22.99%
In view of the financial results for the year to 31 March 2024, the Executive Directors have waived their entitlement to an annual bonus of 22.99%
of their basic salary.
V REMUNERATION
Corporate Governance Report
continued
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
134
135
Total Accounting Return
The Total Accounting Return of the Group for the year to 31 March 2024, adjusted for performance related awards, was -31.4%, below the
threshold and stretch targets of 5.0% and 10.0% respectively. Accordingly, no bonus is payable under this performance condition.
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 capital growth 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 2024,
the portfolio produced a capital return of -22.8%, as measured by MSCI. The return fell below both the threshold and stretch targets of -8.5%
and -4.0% and, accordingly, no bonus is payable under this performance condition.
Letting Targets
As noted on page 135, the letting of vacant space at The JJ Mack Building, EC1 and The Loom, E1 were identified as key operational targets at
the start of the financial year to 31 March 2024. At The JJ Mack Building, EC1, the year started with 18% of space let in this 206,000 sq ft new
office building. By 31 March 2024, 67% of the total space had been let. Accordingly, 67% of this target was met. At The Loom, E1, the year started
with 72% of space let in this 109,000 sq ft office building. By 31 March 2024, 65% of the total space had been let and, accordingly, this target was
not met.
ESG
The Group has set Energy Intensity and Carbon Emissions targets on its journey towards becoming net zero by 2030. The Energy Intensity
target was met in full and the Carbon Emissions target was 90.0%.
The Group maintained its sustainability scores measured by CDP at B and EPRA Sustainability BPR of Gold. As measured by GRESB,
the Group maintained its Green Star status but the overall mark went down from 5* to 4*.
The total annual bonus for the year ended 31 March 2024 is set out below:
Executive Director
Basic
salary
£000
Maximum
bonus
payable
(150% basic
salary)
£000
Bonus
outcome
%
Bonus
waived
%
Bonus
payable
£000
Cash
£000
Deferred
shares
£000
Gerald Kaye
587
880
23%
(23)%
–
–
–
Tim Murphy
341
512
23%
(23)%
–
–
–
Matthew Bonning-Snook
456
684
23%
(23)%
–
–
–
As noted on page 135 above, in view of the results for the year, the Executive Directors have waived their entitlement to a bonus of 23% of their
basic salaries.
PSP awards vesting in 2024
The PSP awards granted on 2 June 2021 are eligible to vest after 2 June 2024. The expected vesting percentage is as follows:
Metric
Performance condition
Weighting
Threshold
target
Stretch
target
Actual
% vesting
NAV (fully
diluted
triple net)
Net asset value growth
10% of this part of an award vests for pre-dividend compound NAV growth of 10.6%*
pa increasing pro-rata to 100% of this part of an award vesting for pre-dividend
compound NAV growth of 15.2%*pa
33.33%
10.65%
15.19%
-10.9%
0.00%
TPR
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
33.33%
Median
-4.0%
Upper
quartile
-1.4%
-5.9%
0.00%
TSR
Total Shareholder Return v FTSE 250 and Small Cap Sectors (excluding agencies)
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%
Median
-8.0%
Upper
quartile
8.2%
-41.3%
0.00%
Total
100.0%
0.00%
* The minimum and maximum thresholds have been increased from their normal levels of 5.0% and 10.0% due to the impact of inflation above 3.0% during the performance period.
Based on the above, 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
Estimated value
at vesting
£’000
Gerald Kaye
316,641
316,641
–
–
Tim Murphy
184,288
184,288
–
–
Matthew Bonning-Snook
246,309
246,309
–
–
V REMUNERATION
PSP awards vested in 2023
The share awards presented in the remuneration table for the year to 31 March 2023 on page 135 are based on the 2014 PSP awards granted
on 10 June 2020. The share price used to calculate the expected value at vesting for the 2020 PSP awards in the 2023 Annual Report was
344.52p (based on the average share price over the three months to 31 March 2023). The actual share price at vesting on 19 June 2023 was
278.00p 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 2025
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 2025. 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 126 to 127 above.
Other remuneration matters
This section is unaudited unless stated otherwise.
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 2024 amounted to £40,258 (2023: £28,530), reflecting work done during the year on advising the Company on its
proposed new Remuneration Policy. 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 2023 and 2024 to the other key financial
metrics of distributions to Shareholders and the net asset value of the Group.
2024
£000
2023
£000
Change
%
Staff costs
5,382
7,755
-30.6%
Distributions to Shareholders1
5,929
14,482
-59.1%
Net asset value of the Group
401,075
608,675
-34.1%
1 In respect of the financial year to which they relate.
Shareholder voting at the last AGM
Details of the 2023 advisory Annual Report on Remuneration vote and the 2021 binding Remuneration Policy vote were as follows:
Issued
For
%
Against
%
Withheld
Total
2023 Annual Report on Remuneration
123,355,197
93,873,721
97.5
3,818,064
2.5
2,266
97,694,051
2021 Remuneration Policy
122,099,814
95,598,663
96.1
3,833,246
3.9
1,650,086
101,081,995
The Committee was pleased to note the level of Shareholder support for the Annual Report on Remuneration in 2023 and the Remuneration
Policy in 2021.
V REMUNERATION
Corporate Governance Report
continued
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
136
137
Directors’ shareholdings (audited)
Legally
owned
31.3.23
Legally
owned
31.3.24
Share
Incentive Plan
unrestricted
31.3.24
Beneficially
held total
31.3.24
Deferred
shares
31.3.24
Share
Incentive Plan
restricted
31.3.24
PSP
awards
unvested
31.3.24
Executive Directors
Gerald Kaye
2,447,914
2,681,341
54,616
2,735,957
65,131
23,210
1,213,841
Tim Murphy
781,429
868,649
32,537
901,186
37,906
19,745
706,460
Matthew Bonning-Snook
1,559,305
1,738,147
54,159
1,792,306
50,664
23,139
944,217
Non-Executive Directors
Richard Cotton
52,000
52,661
–
52,661
–
–
–
Sue Clayton
14,000
14,000
–
14,000
–
–
–
Sue Farr1
9,111
9,111
–
9,111
–
–
–
Joe Lister
9,350
9,350
–
9,350
–
–
–
Robert Fowlds
n/a
–
–
–
–
–
–
Amanda Aldridge
n/a
–
–
–
–
–
–
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 29 years and have built up a shareholding during that time
of circa 5.4 million shares with a market value at 31 March 2024 of circa £11.2m at the weighted average share price for the three months to
31 March 2024 of 206.02p.
Directors’ share interests and shareholding guidelines (audited)
Executive Director
Salary1
£
Share ownership
guideline2
£
Beneficially
held shares
Value of
beneficially
held shares3
£
Ratio of
shares held
to salary
%
Gerald Kaye
586,585
2,933,000
2,735,957
5,637,000
961
Tim Murphy
341,395
1,707,000
901,186
1,857,000
544
Matthew Bonning-Snook
456,290
2,281,000
1,792,306
3,693,000
809
1 Salaries as at 31 March 2024.
2 Share ownership guideline is 500% of salary.
3 Value based on the average share price for the three months to 31 March 2024 of 206.02p.
PSP awards granted in the year (audited)
The following conditional awards were granted on 1 June 2023 at 263.20p, being the average closing price of the shares for the five business
days preceding the award date.
Basis of award
(% of salary)
Share awards
number
Face value of
award
£000
Vesting at
threshold
Vesting at
maximum
Performance period
Gerald Kaye
250%
540,938
1,424
10%
100%
3 years to 31 March 2026
Tim Murphy
250%
314,827
829
10%
100%
3 years to 31 March 2026
Matthew Bonning-Snook
250%
420,782
1,108
10%
100%
3 years to 31 March 2026
The PSP awards above were made at share prices calculated at the average closing price of the shares for the five business days preceding each award date.
Details of the performance targets attached to the awards are set out on page 132.
The total number of awards made to Directors under the terms of the 2014 PSP scheme which have not yet vested are as follows:
Executive Director
Shares awarded
02.06.21
at 430.1p
Shares awarded
27.07.22
at 388.1p
Shares awarded
01.06.23
at 263.2p
Total shares
awarded
Gerald Kaye
316,641
356,262
540,938
1,213,841
Tim Murphy
184,288
207,345
314,827
706,460
Matthew Bonning-Snook
246,309
277,126
420,782
944,217
It is currently expected that nil% of the shares awarded on 2 June 2021, nil% of the shares awarded on 27 July 2022 and nil% of the shares
awarded on 1 June 2023 will vest.
V REMUNERATION
Helical 2022 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 2024, were as follows:
Executive Director
1 June
2023
at 243.50p
12 June
2023
at 268.00p
31 July
2023
at 271.50p
12 September
2023
at 220.00p
29 November
2023
at 213.00p
15 January
2024
at 229.50p
14 March
2024
at 201.00p
Gerald Kaye
1,478
504
2,030
615
633
979
672
Tim Murphy
1,478
504
1,346
615
633
655
672
Matthew Bonning-Snook
1,478
504
2,015
615
633
973
672
Shares were allocated to the Directors under the Plan at the closing share price on the previous business day to the date of allocation.
Shares allocated to, or purchased on behalf of, the Directors, which remain in their ownership at 31 March 2024, were as follows:
Executive Director
Unrestricted1
Restricted2
As at 31 March
2024
Gerald Kaye
54,616
23,210
77,826
Tim Murphy
32,537
19,745
52,282
Matthew Bonning-Snook
54,159
23,139
77,298
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 2024 were 636,834 (2023: 620,496).
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 2024 and which are expected to be awarded in June 2024, are as noted in the table below:
Executive Director
Deferred shares
1 April 2023
2023
bonus award
12 June 2023
2020 award
vesting
12 June 2023
Deferred shares
31 March 2024
Expected
2024
award
Dividend shares
awarded on 2020
award vesting
Gerald Kaye
238,709
–
(173,578)
65,131
–
13,598
Tim Murphy
141,318
–
(103,412)
37,906
–
8,101
Matthew Bonning-Snook
180,900
–
(130,236)
50,664
–
10,203
Share price performance and Total Shareholder Return (TSR)
The market price of the ordinary shares of Helical plc at 31 March 2024 was 208.00p (2023: 300.00p). This market price varied between
185.00p and 321.50p and averaged 236.14p during the year.
The Total Shareholder Returns for a holding in the Group’s shares in the 10 years to 31 March 2024 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 – 10 years to 31 March 2024
The graph below shows the base position, at 31 March 2014, from which subsequent performance is measured, as required by the Regulations.
Helical
FTSE 350 Supersector Real Estate Index
Source: Datastream (a LSEG product)
60
100
80
140
120
160
40
20
0
Mar
’22
Mar
’23
Mar
’24
Mar
’14
Mar
’15
Mar
’17
Mar
’18
Mar
’19
Mar
’20
Mar
’21
Mar
’16
This graph shows the value, by 31 March 2024, of £100 invested in Helical on 31 March 2014, compared with the value of £100 invested in the
FTSE 350 Supersector Real Estate Index.
V REMUNERATION
Corporate Governance Report
continued
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
138
139
Remuneration of the Chief Executive
Comparing the 10-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 2014, together with past annual bonus pay-outs and the vesting of long-term
incentive share awards:
Year ended
Name
Total remuneration
£000
Annual bonus
(% of max
pay-out)
PSP
(% of max
vesting)
31 March 2024
Gerald Kaye
686
–1
–
31 March 2023
Gerald Kaye
1,954
50
67
31 March 2022
Gerald Kaye
2,532
97
75
31 March 2021
Gerald Kaye
2,234
60
74
31 March 2020
Gerald Kaye
2,316
762
66
31 March 2019
Gerald Kaye
1,732
91
33
31 March 2018
Gerald Kaye
2,209
753
46
31 March 2017
Gerald Kaye
2,6354
100
66
31 March 2016
Michael Slade
3,867
100
100
31 March 2015
Michael Slade
5,534
100
100
1 23% before management waived the annual bonus awards.
2 85% before the application of negative discretion by the Committee.
3 100% before the application of negative discretion by the Committee.
4 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
2023 and 2024, 2022 and 2023 and 2021 and 2022, was as follows:
2023-2024
2022-2023
2021-2022
Base
salary/fees
Benefits
Annual
bonus
Base
salary/fees
Benefits
Annual
bonus
Annual
salary/fees
Benefits
Annual
bonus
Executive Directors
Gerald Kaye
3.0%
12.2%
-100.0%
3.0%
4.9%
-47.0%
1.5%
0.9%
63.4%
Tim Murphy
3.0%
22.6%
-100.0%
3.0%
-6.4%
-47.0%
1.5%
29.9%
63.4%
Matthew Bonning-Snook
3.0%
7.0%
-100.0%
3.0%
1.5%
-47.0%
1.5%
5.7%
63.4%
Non-Executive Directors
Richard Cotton1
18.4%
n/a
n/a
96.1%
n/a
n/a
0.0%
n/a
n/a
Sue Clayton2
4.1%
n/a
n/a
19.2%
n/a
n/a
0.0%
n/a
n/a
Sue Farr3
0.0%
n/a
n/a
6.9%
n/a
n/a
5.6%
n/a
n/a
Joe Lister
0.0%
n/a
n/a
6.9%
n/a
n/a
0.0%
n/a
n/a
Robert Fowlds4
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Amanda Aldridge5
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Average of all other employees
9.5%
-2.9%
-100.0%
5.2%
1.6%
-45.8%
5.0%
8.1%
-5.9%
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 134.
1 The percentage increase in the fees payable to Richard Cotton in 2022-2023 and 2023-2024 reflects his appointment as Chairman at the 2022 AGM.
2 The percentage increase in the fees payable to Sue Clayton in 2022-23 and 2023-2024 reflects her appointment as the Senior Independent Director at the 2022 AGM, as well as the increase in base
fees from the triennial review of Non-Executive Directors’ fees.
3 The percentage increase in the fees payable to Sue Farr in 2021-2022 reflects her appointment as Chair of the Remuneration Committee at the 2020 AGM.
4 Robert Fowlds was appointed to the Board on 8 February 2024.
5 Amanda Aldridge was appointed to the Board on 1 April 2024.
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 promoting and
recruiting more females into senior roles and 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.
V REMUNERATION
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 single total figure of remuneration for the Chief Executive for the three years to 31 March 2024 with the Group’s
other employees paid at the 25th, 50th and 75th percentiles:
Remuneration
CEO pay
Other employees
Total remuneration
£
Other employees
Salary
£
Year ended 31 March 2024
25th percentile
9:1
73,851
57,500
50th percentile
7:1
102,487
82,100
75th percentile
4:1
170,127
140,000
Year ended 31 March 2023
25th percentile
24:1
82,830
64,600
50th percentile
16:1
124,728
92,000
75th percentile
7:1
280,152
145,500
Year ended 31 March 2022
25th percentile
28:1
93,042
64,035
50th percentile
20:1
128,120
70,000
75th percentile
7:1
378,253
148,625
This is the fourth 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 remuneration has been calculated on the same basis as for the Chief Executive single figure shown on page 134 and includes 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.
Approved by the Board on 22 May 2024 and signed on its behalf.
Sue Farr
Chair of the Remuneration Committee
22 May 2024
V REMUNERATION
Corporate Governance Report
continued
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
140
141
V REMUNERATION
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 2
to 99 which should be read in conjunction with this report.
Results and dividends
The results for the year are set out in the Consolidated Income
Statement on page 149. An interim dividend of 3.05p (2023: 3.05p) was
paid on 12 January 2024 to Shareholders on the Shareholder register
on 1 December 2023. A final dividend of 1.78p (2023: 8.70p) per share
is recommended for approval at the Annual General Meeting (“AGM”)
to be held on 17 July 2024 and, if approved, will be paid on 2 August
2024 to Shareholders on the register on 28 June 2024. The total
ordinary dividend declared and paid in the year of 11.55p (2023: 11.30p)
per share amounted to £14,423,000 (2023: £13,842,000).
Corporate governance
During the year ended 31 March 2024 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 applicable Provisions of the Code in full. The
application of the Code’s Principles can be evidenced in the context
of the particular circumstances of the Group and how the Board has
set the Group’s Purpose and strategy, met objectives and achieved
outcomes through the decisions it has taken. The Code can be
viewed in full at www.frc.org.uk. Please see page 106 of the Corporate
Governance Report for more detail. The Group is cognisant of the
updated Principles and Provisions in the 2024 version of the Code
and is committed to achieving compliance with the revised Code over
the course of the forthcoming year.
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 102
to 104. All the Directors will be offering themselves for appointment
or re-appointment, as appropriate, at the AGM on 17 July 2024, with
the exception of Gerald Kaye and Joe Lister, 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 122 to 141. Details of the Directors’ interests in the
ordinary shares of the Company are shown on page 138.
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 50 to 51. 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 2024.
Directors’ conflicts of interest
Under the Companies Act 2006 (the “Act”), Directors are subject to
a statutory duty to avoid a situation where they have, or can have, a
direct or indirect interest that conflicts, or may possibly conflict, with
the interests of the Company. As is permissible under the Act, the
Company’s Articles of Association allow the Board to consider, and if
it sees fit, to authorise situations where a Director has an interest that
conflicts, or may possibly conflict, with the interests of the Company.
Directors are required to notify the Company of any conflict or potential
conflict of interest under an established procedure and any conflicts or
potential conflicts are noted at each Board meeting. In accordance with
the Code Provision 7, the Board has a well-established process for the
management of conflicts of interest.
Directors’ liability insurance and indemnity
The 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 2024.
Financial instruments, capitalised interest and
long-term incentive schemes
The information required in respect of financial instruments, as
required by Schedule 7 of the Large and Medium Sized Companies
and Groups (Accounts and Reports) (Amendment) Regulations 2013, is
shown in Note 37. Interest capitalised on the Group property portfolio is
shown in Notes 14 and 20. Long-term incentive schemes are explained
in the Directors’ Remuneration Report on pages 122 to 141.
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 14 May 2024, 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
Shares at
14/05/2024
% at
14/05/2024
Janus Henderson Investors
10,878,979
8.82%
Mr Michael Eric Slade
8,857,248
7.18%
BlackRock*
8,495,082
6.89%
Aberforth Partners
7,650,380
6.20%
Schroder Investment Management
5,919,050
4.80%
Baillie Gifford
6,221,108
5.04%
Jupiter Asset Management
5,817,887
4.72%
Premier Miton Investors
5,081,361
4.12%
Vangard Group
4,540,258
3.68%
Dimensional Fund Advisors
4,256,271
3.45%
*Percentage as at 29/04/24
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 94 to 99.
Culture, employment and environmental matters
The corporate Culture of the Group, articulated through the Helical
Purpose and Values, is discussed on pages 92 to 94 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 98
and 99. 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 94 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 114 to 115.
The Group has a number of policies and procedures in place covering
important issues including equality, human rights, diversity and
inclusion, equal opportunities and wellbeing. 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. We are committed to safeguarding an environment
where all our people can be proud to work (please see details of our
Employment Policy on page 115).
Information in respect of the Group’s employment and environmental
matters as well as greenhouse gas reporting is contained in the
Sustainability Report on pages 60 to 87.
Post balance sheet events
Details of post balance sheet events are set out in Note 34 to the
financial statements.
Group structure
Details of the Group’s subsidiary undertakings are disclosed in
Note 40 to the financial statements.
Share capital
Details of the Company’s issued share capital are shown in Note 28
to the financial statements.
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 2024 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 2023 Annual General
Meeting to make market purchases of its own ordinary shares.
The authority will expire at the conclusion of the 2024 AGM, at
which a resolution will be proposed to renew this authority. The
Company purchased 1,000,000 of its own shares during the year
to 31 March 2024.
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.
Annual General Meeting
It is intended that the AGM of the Company will be held on 17 July
2024 at 09:00 am at the Company’s registered offices located at
5 Hanover Square, London W1S 1HQ. The special business at the
2024 AGM will include resolutions dealing with the authority to issue
shares, the disapplication of pre-emption rights, the authority for the
Company to purchase its own shares and the authority to call General
Meetings on not less than 14 clear days’ notice. The Notice of
Meeting, containing explanations of all the resolutions to be proposed
at that meeting, is enclosed with this Annual Report and can be found
on the Group’s website at www.helical.co.uk
Auditor
The Company’s Auditor, RSM UK Audit LLP, have expressed their
willingness to continue in office and resolutions to reappoint them
and to authorise the Directors to determine their remuneration will
be proposed at the 2024 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
22 May 2024
Governance
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
142
143
Directors’ responsibilities statement
The Directors are responsible for preparing the Strategic Report and
the Directors’ Report, the Directors’ Remuneration Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare group and company
financial statements for each financial year. The Directors have
elected under company law and are required under the Listing Rules
of the Financial Conduct Authority to prepare Group financial
statements in accordance with UK-adopted International Accounting
Standards. The Directors have elected under company law to
prepare the Company financial statements in accordance with
UK-adopted International Accounting Standards.
The Group and Company financial statements are required by law
and UK-adopted International Accounting Standards to present fairly
the financial position of the Group and the Company and the financial
performance of the Group; the Companies Act 2006 provides in
relation to such financial statements that references in the relevant
part of that Act to financial statements giving a true and fair view are
references to their achieving a fair presentation.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair view
of the state of affairs of the Group and the Company and of the profit
or loss of the Group for that period.
In preparing each of the Group and Company financial statements,
the Directors are required to:
a. select suitable accounting policies and then apply them consistently;
b. make judgements and accounting estimates that are reasonable
and prudent;
c. state whether they have been prepared in accordance with
UK-adopted International Accounting Standards; and
d. prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Group and the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s and the
Company’s transactions and disclose with reasonable accuracy at
any time the financial position of the Group and the Company and
enable them to ensure that the financial statements and the Directors’
Remuneration Report comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Group and 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 Helical plc website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.
Directors’ statement pursuant to the
Disclosure and Transparency Rules
Each of the Directors, whose names and functions are listed in the
Board of Directors section on pages 102 to 104, confirm that, to the
best of their knowledge:
a. the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss of the
Company and the undertakings included in the consolidation taken
as a whole;
b. the Strategic Report contained in the Annual 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
c. the Directors consider the Annual Report and Accounts, taken as
a whole, is fair, balanced and understandable and provides the
information necessary for Shareholders to assess the Group’s and
the Company’s position, performance, business model and strategy.
This responsibility statement was approved by the Board of Directors
on 22 May 2024 and is signed on its behalf by:
Chief Executive Officer
Chief Financial Officer
Gerald Kaye
Tim Murphy
22 May 2024
22 May 2024
Independent Auditor’s Report to the Members of Helical plc
Report on the audit of the financial statements
Opinion
We have audited the financial statements of Helical plc (the “Parent
Company”) and its subsidiaries (the “Group”) for the year ended
31 March 2024 which comprise the Consolidated Income Statement,
the Consolidated and Company Balance Sheets, the Consolidated
and Company Statements of Changes in Equity, the Consolidated
and Company Cash Flow Statements and notes to the financial
statements, including significant accounting policies. The financial
reporting framework that has been applied in the preparation of
the Group financial statements is applicable law and UK-adopted
International Accounting Standards. The financial reporting
framework that has been applied in the preparation of the Parent
Company financial statements is applicable law and UK-adopted
International Accounting Standards and, as regards the Parent
Company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
In our opinion:
• the financial statements give a true and fair view of the state of the
Group’s and of the Parent Company’s affairs as at 31 March 2024
and of the Group’s loss for the year then ended;
• the Group financial statements have been properly prepared in
accordance with UK-adopted International Accounting Standards;
• the Parent Company financial statements have been properly
prepared in accordance with UK-adopted International Accounting
Standards and as applied in accordance with the Companies Act
2006; and
• the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
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 Parent Company in
accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Summary of our audit approach
Key audit
matters
Group
• Valuation of investment properties
Parent Company
• None
Materiality
Group
• Overall materiality: £6,570,000
• Performance materiality: £4,930,000
Parent Company
• Overall materiality: £3,930,000
• Performance materiality: £2,950,000
Scoping
Our audit procedures covered 100% of revenue,
100% of total assets and 100% of loss before tax.
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.
Valuation of investment properties
Key audit matter
description
Investment property valuation represents the most
significant area of estimation within the Group financial
statements with a carrying value as at 31 March 2024 of
£472.5m (31 March 2023: £681.7m).
The Directors’ assessment of the value of the investment
properties at year end date is considered a key audit matter
due to the magnitude of the amount, the potential impact
of the movement in value on the reported results, and the
subjectivity and complexity of the valuation process.
The valuation is carried out by external valuers, Cushman
and Wakefield, in line with the methodology set out in
note 14 on pages 160 to 161.
Further information is disclosed in the Audit and Risk
Committee report on pages 118 to 121; the significant
accounting judgements and estimates on page 181;
significant accounting policies on pages 177 to 181; and
notes to the financial statements on pages 154 to 183.
How the matter
was addressed
in the audit
Our audit work included:
• Obtaining the valuations prepared by Cushman &
Wakefield as at 31 March 2024 and checking that they
have been prepared on a basis consistent with prior
periods and the RICS standards;
• Corroborating a sample of the inputs provided to the
valuer for the 31 March 2024 valuation to check that the
information used in the valuation is consistent with the
audited underlying information;
• Challenge of the independent valuation and discussion
of the valuations with management’s experts,
challenging where valuation movements appear to be
inconsistent with our expectations based on our
knowledge of the market;
• Engaging an independent auditor’s valuation expert to
assist with our audit and challenge of the valuation of the
Group’s property portfolio, including property-specific
judgements made on the yields and estimated rental
values used by the valuers in their valuation;
• Consideration of the adequacy of the disclosures made
in the financial statements, particularly around
judgements and estimates and the impact of current
macro-environmental conditions;
• Audit of management’s categorisation of properties
designated as held for sale with reference to the
recognition criteria in IFRS 5 and challenging
management on the appropriate presentation and
disclosure of properties which are expected to be sold.
Key observations Based on our audit work, we are satisfied that the
judgements and assumptions used in arriving at the fair
value of the Group’s property portfolio are appropriate and
supported by the evidence obtained during the audit.
We have determined that there are no key audit matters to
communicate in our report in relation to the Parent Company.
Financial Statements
Helical plc — Annual Report and Accounts 2024
145
Helical plc — Annual Report and Accounts 2024
144
Independent Auditor’s Report to the Members of Helical plc
continued
Our application of materiality
When establishing our overall audit strategy, we set certain
thresholds which help us to determine the nature, timing and extent
of our audit procedures. When evaluating whether the effects of
misstatements, both individually and on the financial statements as
a whole, could reasonably influence the economic decisions of the
users we take into account the qualitative nature and the size of the
misstatements. Based on our professional judgement, we determined
materiality as follows:
Group
Parent Company
Overall materiality
£6,570,000
£3,930,000
Basis for determining
overall materiality
1% of total assets
1% of total assets
Rationale for
benchmark applied
Total assets largely
reflects the valuation of
investment property,
which is of key interest
to the users of the
financial statements.
Total assets used as
we assessed that the
shareholders will be
primarily interested in
the value of investment
property, represented by
the investments and
loans held by the Parent
Company in its property
holding subsidiaries,
which form the majority
of total assets.
Performance
materiality
£4,930,000
£2,950,000
Basis for determining
performance
materiality
75% of overall
materiality
75% of overall materiality
Reporting of
misstatements to
the Audit and Risk
Committee
Misstatements in
excess of £328,000
and misstatements
below that threshold
that, in our view,
warranted reporting on
qualitative grounds.
Misstatements in excess
of £196,000 and
misstatements below that
threshold that, in our view,
warranted reporting on
qualitative grounds.
A lower specific performance materiality of £600,000 was applied
in testing balances in the Consolidated Income Statement (other
than the fair value movement in investment property) and selected
balances in the Consolidated and Company Balance Sheets where
Group performance materiality was determined not to provide
sufficient testing coverage. The lower specific performance
materiality was calculated with reference to the result before tax
(adjusted to exclude the fair value movement in investment property).
An overview of the scope of our audit
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 assessed that the Group consists of a single component
and our audit procedures covered 100% of revenue, 100% of total
assets and 100% of loss before tax.
All work has been performed by the Group engagement team.
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:
• checking the integrity and accuracy of the cash flow forecasts and
covenant calculations prepared by management;
• challenging management on the reasonableness of the
assumptions made in the forecasts, including projected rental
income, expenses, disposals of properties, capital expenditure
and dividend payments;
• assessing the appropriateness of the sensitivities applied by
management in their downside scenarios;
• reviewing loan documentation to understand the principal terms,
including financial covenants, and checking the Group’s current and
forecast compliance with these (including testing of the mechanical
accuracy of management’s covenant calculations and consistency
with the contractual definitions); and
• auditing the accuracy of disclosures made in the financial
statements in respect of risks, going concern and viability.
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 or the Parent
Company’s ability to continue as a going concern for a period of at
least 12 months from when the financial statements are authorised
for issue.
In relation to the entity reporting on how they have 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.
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.
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.
Matters on which we are required to report by
exception
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 material misstatements in the Strategic
Report or the Report of the Directors.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to you
if, in our opinion:
• adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
• the Parent Company financial statements and the part of the
Directors’ Remuneration Report to be audited are not in agreement
with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are
not made; or
• we have not received all the information and explanations we require
for our audit.
Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate
Governance Statement relating to the parent company’s compliance
with the provisions of the UK Corporate Governance Code specified
for our review by the Listing Rules.
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:
• Directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting and any material
uncertainties identified set out on page 142;
• Directors’ explanation as to their assessment of the Group’s
prospects, the period this assessment covers and why the period
is appropriate set out on page 50;
• Directors’ statement on whether they have a reasonable
expectation that the Group will be able to continue in operation and
meets its liabilities set out on pages 50 to 51;
• Directors’ statement on fair, balanced and understandable set out
on pages 120 to 121;
• Board’s confirmation that it has carried out a robust assessment of
the emerging and principal risks set out on pages 48 to 59;
• Section of the annual report that describes the review of
effectiveness of risk management and internal control systems set
out on pages 48 to 59; and
• Section describing the work of the Audit and Risk Committee set
out on pages 118 to 121.
Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities Statement
set out on page 144, 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.
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.
The extent to which the audit was considered
capable of detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and
regulations. The objectives of our audit are to obtain sufficient
appropriate audit evidence regarding compliance with laws and
regulations that have a direct effect on the determination of material
amounts and disclosures in the financial statements, to perform audit
procedures to help identify instances of non-compliance with other
laws and regulations that may have a material effect on the financial
statements, and to respond appropriately to identified or suspected
non-compliance with laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and
assess the risk of material misstatement of the financial statements
due to fraud, to obtain sufficient appropriate audit evidence regarding
the assessed risks of material misstatement due to fraud through
designing and implementing appropriate responses and to respond
appropriately to fraud or suspected fraud identified during the audit.
However, it is the primary responsibility of management, with the
oversight of those charged with governance, to ensure that the
entity’s operations are conducted in accordance with the provisions
of laws and regulations and for the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect
of irregularities, including fraud, the Group audit engagement team:
• obtained an understanding of the nature of the industry and sector,
including the legal and regulatory framework that the Group and
Parent Company operate in and how the Group and Parent
Company are complying with the legal and regulatory framework;
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
146
147
• inquired of management, and those charged with governance,
about their own identification and assessment of the risks of
irregularities, including any known actual, suspected or alleged
instances of fraud;
• discussed matters about non-compliance with laws and
regulations and how fraud might occur including assessment
of how and where the financial statements may be susceptible
to fraud having obtained an understanding of the effectiveness
of the control environment.
The most significant laws and regulations were determined as follows:
Legislation/
Regulation
Additional audit procedures performed by the Group audit
engagement team included:
UK adopted IAS
and Companies
Act 2006
• Review of the financial statement disclosures and testing
to supporting documentation;
• Completion of disclosure checklists to identify areas of
non-compliance.
Tax
compliance
regulations
• Review of the REIT status assessment prepared by
management;
• Inspection of advice received from external tax advisors;
• Input from a REIT specialist was obtained regarding
compliance with REIT requirements.
The areas that we identified as being susceptible to material
misstatement due to fraud were:
Risk
Audit procedures performed by the Group audit engagement team:
Valuation of
investment
properties
• Audit procedures performed on valuation of investment
properties are outlined in the Key Audit Matters section of
this audit report.
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.
A further description of our responsibilities for the audit of the
financial statements is located on the Financial Reporting Council’s
website at: http://www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Other matters which we are required to address
Following the recommendation of the Audit and Risk Committee, we
were appointed by the Audit and Risk Committee on 13 July 2023 to
audit the financial statements for the year ending 31 March 2024 and
subsequent financial periods.
The period of total uninterrupted consecutive appointments is one
year, being the year ended 31 March 2024.
The non-audit services prohibited by the FRC’s Ethical Standard
were not provided to the Group or the Parent Company and we
remain independent of the Group and the Parent Company in
conducting our audit.
Our audit opinion is consistent with the additional report to the Audit
and Risk Committee in accordance with ISAs (UK).
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.
In due course, as required by the Financial Conduct Authority (FCA)
Disclosure Guidance and Transparency Rules, these financial
statements will form part of the Annual Financial Report prepared in
Extensible Hypertext Markup Language (XHTML) format and filed on
the National Storage Mechanism of the UK FCA. This auditor’s report
provides no assurance over whether the annual financial report has
been prepared in XHTML format.
Graham Ricketts (Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
25 Farringdon Street
London
EC4A 4AB
22 May 2024
Independent Auditor’s Report to the Members of Helical plc
continued
Notes
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Revenue
3
39,905
49,848
Cost of sales
3
(14,450)
(13,567)
Net property income
4
25,455
36,281
Share of results of joint ventures
18
(9,310)
3,494
16,145
39,775
Gain on sale of investment properties
5
–
4,564
Revaluation of investment properties
14
(181,213)
(97,854)
(165,068)
(53,515)
Administrative expenses
6
(11,011)
(12,835)
Operating loss
(176,079)
(66,350)
Net finance costs and change in fair value of derivative financial instruments
8
(13,556)
1,839
Loss before tax
(189,635)
(64,511)
Tax on loss on ordinary activities
9
(179)
–
Loss for the year
(189,814)
(64,511)
Loss per share
13
Basic
(154.6)p
(52.6)p
Diluted
(154.6)p
(52.6)p
All the activities of the Group are from continuing operations.
There were no items of comprehensive income in the current or prior year other than the loss for the year and, accordingly, no Statement of
Comprehensive Income is presented.
Consolidated Income Statement
For the year to 31 March 2024
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
148
149
Notes
Group
31.3.24
£000
Group
31.3.23
£000
Non-current assets
Investment properties
14
472,522
681,682
Owner occupied property, plant and equipment
16
3,569
4,351
Investment in joint ventures
18
73,923
87,330
Other investments
19
565
353
Derivative financial instruments
37
17,635
23,245
Trade and other receivables
22
1,252
–
569,466
796,961
Current assets
Land and developments
20
28
28
Assets held for sale
21
42,761
–
Corporation tax receivable
–
7
Trade and other receivables
22
16,981
24,935
Cash and cash equivalents
23
28,633
50,925
88,403
75,895
Total assets
657,869
872,856
Current liabilities
Trade and other payables
24
(24,886)
(31,232)
Lease liability
25
(829)
(683)
(25,715)
(31,915)
Non-current liabilities
Borrowings
26
(227,634)
(226,677)
Lease liability
25
(3,445)
(5,589)
(231,079)
(232,266)
Total liabilities
(256,794)
(264,181)
Net assets
401,075
608,675
Equity
Called-up share capital
28
1,233
1,233
Share premium account
116,619
116,619
Revaluation reserve
(134,797)
46,416
Capital redemption reserve
7,743
7,743
Own shares held
(1,675)
(848)
Other reserves
291
291
Retained earnings
411,661
437,221
Total equity
401,075
608,675
The financial statements were approved by the Board and authorised for issue on 22 May 2024.
Tim Murphy
Chief Financial Officer
Company number 00156663
Consolidated Balance Sheet
At 31 March 2024
Notes
Company
31.3.24
£000
Company
31.3.23
Restated1
£000
Company
31.3.22
£000
Non-current assets
Owner occupied property, plant and equipment
16
3,569
4,351
4,631
Investment in subsidiaries
17
141,440
293,153
210,341
Amounts owed by Group undertakings
22
273,500
299,673
405,616
Trade and other receivables
22
1,252
–
–
419,761
597,177
620,588
Current assets
Trade and other receivables
22
5,088
1,010
655
Cash and cash equivalents
23
9,113
23,931
1,797
14,201
24,941
2,452
Total assets
433,962
622,118
623,040
Current liabilities
Trade and other payables
24
(126,811)
(155,649)
(188,759)
Lease liability
25
(829)
(683)
(658)
(127,640)
(156,332)
(189,417)
Non-current liabilities
Lease liability
25
(3,445)
(3,399)
(4,082)
(3,445)
(3,399)
(4,082)
Total liabilities
(131,085)
(159,731)
(193,499)
Net assets
302,877
462,387
429,541
Equity
Called-up share capital
28
1,233
1,233
1,223
Share premium account
116,619
116,619
112,654
Capital redemption reserve
7,743
7,743
7,743
Other reserves
1,987
1,987
1,987
Retained earnings
175,295
334,805
305,934
Total equity
302,877
462,387
429,541
1 See Note 38.
The loss in the year for the Company was £145,087,000 (2023: profit restated £42,713,000).
The financial statements were approved by the Board and authorised for issue on 22 May 2024.
Tim Murphy
Chief Financial Officer
Company number 00156663
Company Balance Sheet
At 31 March 2024
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
150
151
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
Restated1
£000
Cash flows from operating activities
(Loss)/profit before tax
(189,635)
(64,511)
(145,087)
42,713
Depreciation
1,506
798
1,506
798
Revaluation deficit on investment properties
181,213
97,854
–
–
Gain on sale of investment properties
–
(4,564)
–
–
Letting cost amortised
168
200
–
–
Profit on sale of plant and equipment
(29)
(18)
(29)
(18)
Net financing costs/(income)
7,947
10,918
(4,463)
(3,651)
Change in fair value of derivative financial instruments
5,609
(12,757)
–
–
Share-based payments charge
1,039
1,073
–
–
Share of results of joint ventures
9,310
(3,494)
–
–
Gain on sublet of Hanover Square
(902)
(902)
–
Impairment of investments
–
–
169,524
13,471
Dividends received from subsidiaries
–
–
(27,320)
(60,595)
Cash inflows/(outflows) from operations before changes in working capital
16,226
25,499
(6,771)
(7,282)
Change in trade and other receivables
9,555
(3,560)
19,142
48,028
Change in land and developments
–
2,061
–
–
Change in trade and other payables
(6,581)
(11,477)
(28,831)
(33,101)
Cash inflows/(outflows) generated from operations
19,200
12,523
(16,460)
7,645
Finance costs
(7,587)
(12,361)
(503)
(964)
Finance income
661
274
479
243
Tax received
–
331
–
–
(6,926)
(11,756)
(24)
(721)
Net cash generated from/(used by) operating activities
12,274
767
(16,484)
6,924
Cash flows from investing activities
Additions to investment property
(16,038)
(10,509)
–
–
Purchase of other investments
(212)
(47)
–
–
Net proceeds from sale of investment property
–
186,541
–
–
(Investments in)/returns from joint ventures and subsidiaries
(3,861)
3,323
(218)
–
Dividends from joint ventures
5,666
13,446
–
–
Dividends from subsidiaries
–
–
17,603
26,235
Sale of plant and equipment
30
48
30
48
Purchase of owner occupied property, plant and equipment
(618)
(548)
(618)
(548)
Net cash (used by)/generated from investing activities
(15,033)
192,254
16,797
25,735
Cash flows from financing activities
Borrowings repaid
–
(170,000)
–
–
Lease liability payments
(708)
(659)
(708)
(658)
Shares issued
–
10
–
3,975
Purchase of own shares
(4,402)
(1,089)
–
–
Equity dividends paid
(14,423)
(13,842)
(14,423)
(13,842)
Net cash (used by)/generated from financing activities
(19,533)
(185,580)
(15,131)
(10,525)
Net (decrease)/increase in cash and cash equivalents
(22,292)
7,441
(14,818)
22,134
Cash and cash equivalents at start of year
50,925
43,484
23,931
1,797
Cash and cash equivalents at end of year
28,633
50,925
9,113
23,931
1 See Note 38.
Consolidated and Company Cash Flow Statement
For the year to 31 March 2024
Group
Share
capital
£000
Share
premium
£000
Revaluation
reserve
£000
Capital
redemption
reserve
£000
Own
shares
held
£000
Other
reserves
£000
Retained
earnings
£000
Total
£000
At 31 March 2022
1,223
112,654
197,627
7,743
–
291
367,505
687,043
Total comprehensive expense
–
–
–
–
–
–
(64,511)
(64,511)
Revaluation deficit
–
–
(97,854)
–
–
–
97,854
–
Realised on disposals
–
–
(53,357)
–
–
–
53,357
–
Transactions with owners
– Issued share capital
10
3,965
–
–
–
–
–
3,975
– Performance Share Plan
–
–
–
–
–
–
1,073
1,073
– Purchase of own shares
–
–
–
–
(848)
–
–
(848)
– Share settled Performance Share Plan
–
–
–
–
–
–
(3,536)
(3,536)
– Share settled bonus
–
–
–
–
–
–
(439)
(439)
– Revaluation deficit on valuation of shares
–
–
–
–
–
–
(240)
(240)
– Dividends paid
–
–
–
–
–
–
(13,842)
(13,842)
Total transactions with owners
10
3,965
–
–
(848)
–
(16,984)
(13,857)
At 31 March 2023
1,233
116,619
46,416
7,743
(848)
291
437,221
608,675
Total comprehensive expense
–
–
–
–
–
–
(189,814)
(189,814)
Revaluation deficit
–
–
(181,213)
–
–
–
181,213
–
Transactions with owners
– Performance Share Plan
–
–
–
–
–
–
1,039
1,039
– Purchase of own shares
–
–
–
–
(4,402)
–
–
(4,402)
– PSP vesting
–
–
–
–
2,352
–
(2,352)
–
– Share settled bonus
–
–
–
–
1,223
–
(1,223)
–
– Dividends paid
–
–
–
–
–
–
(14,423)
(14,423)
Total transactions with owners
–
–
–
–
(827)
–
(16,959)
(17,786)
At 31 March 2024
1,233
116,619
(134,797)
7,743
(1,675)
291
411,661
401,075
Company
Share
capital
£000
Share
premium
£000
Capital
redemption
reserve
£000
Other
reserves
£000
Retained
earnings
Restated1
£000
Total
Restated1
£000
At 31 March 2022
1,223
112,654
7,743
1,987
305,934
429,541
Total comprehensive income
–
–
–
–
42,713
42,713
Transactions with owners
– Issued share capital
10
3,965
–
–
–
3,975
– Dividends paid
–
–
–
–
(13,842)
(13,842)
Total transactions with owners
10
3,965
–
–
(13,842)
(9,867)
At 31 March 2023
1,233
116,619
7,743
1,987
334,805
462,387
Total comprehensive income
–
–
–
–
(145,087)
(145,087)
Transactions with owners
– Dividends paid
–
–
–
–
(14,423)
(14,423)
Total transactions with owners
–
–
–
–
(14,423)
(14,423)
At 31 March 2024
1,233
116,619
7,743
1,987
175,295
302,877
1 See Note 38.
Notes:
Share capital – represents the nominal value of issued share capital.
Share premium – represents the excess of consideration received for 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.
Consolidated and Company Statements of Changes In Equity
At 31 March 2024
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
152
153
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 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 99.
These financial statements have been prepared using the recognition
and measurement principles of UK adopted 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 certain financial instruments.
Amendments to standards and interpretations which are mandatory
for the year ended 31 March 2024 are detailed below, however none
of these have had a material impact on the financial statements:
• Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure
of Accounting Policies (effective for periods beginning on or after
1 January 2023);
• Amendments to IAS 8 Definition of Accounting Estimates (effective
for periods beginning on or after 1 January 2023); and
• Amendments to IFRS 17 Insurance Contracts (effective for periods
beginning on or after 1 January 2023).
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 IFRS 16 Lease Liability in a Sale and Leaseback
(effective for periods beginning on or after 1 January 2024);
• Amendments to IAS 1 Classification of Liabilities as Current or
Non-current (effective for periods beginning on or after 1 January
2024); and
• Amendments to IFRS 10 and IAS 28 Sale or contribution of assets
between an investor and its associate or joint venture (effective for
periods beginning on or after 31 December 2023).
Going Concern
The Directors have considered the appropriateness of adopting
a going concern basis in preparing the financial statements. Their
assessment is based on forecasts to September 2025, 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.
Notes to the Financial Statements
Compliance with the financial covenants of the Group’s main debt
facility, its £300m 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 Rent 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.
The April 2024 compliance position for these covenants is
summarised below:
Covenant
Requirement
Actual
LTV
<65%
44%
LRV
<12.0x/15.0x*
10.17x
ICR
>150%
726%
*15 times applies up to but not including the January 2025 interest
payment date.
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
16% fall in contracted rental income;
• Property values could fall by 14% before loan to value covenants
come under pressure; 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 a going concern
basis in preparing the accounts for the year ended 31 March 2024.
2. Revenue from Contracts with Customers
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Development property income
711
4,921
Service charge income
10,689
8,372
Other income
991
–
Total revenue from contracts with customers
12,391
13,293
The total revenue from contracts with customers is the revenue recognised in accordance with IFRS 15 Revenue from Contracts with Customers.
Impairment of contract assets of £23,000 was recognised in the year to 31 March 2024 (2023: £5,000).
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
Investment
Year ended
31.03.24
£000
Development
Year ended
31.03.24
£000
Total
Year ended
31.03.24
£000
Investment
Year ended
31.03.23
£000
Development
Year ended
31.03.23
£000
Total
Year ended
31.03.23
£000
Gross rental income
27,514
–
27,514
36,555
–
36,555
Development property income
–
711
711
–
4,921
4,921
Service charge income
10,689
–
10,689
8,372
–
8,372
Other revenue
991
–
991
–
–
–
Revenue
39,194
711
39,905
44,927
4,921
49,848
Major Customers
For the year ending 31 March 2024, the Group had two tenants (2023: three) that contributed 10% or more to the gross rental income. The
balances detailed below represent the approximate contribution by each major tenant.
Tenant 1: £5,254,000 (2023: £7,010,000)
Tenant 2: £3,614,000 (2023: £3,820,000)
Cost of sales
Investment
Year ended
31.03.24
£000
Development
Year ended
31.03.24
£000
Total
Year ended
31.03.24
£000
Investment
Year ended
31.03.23
£000
Development
Year ended
31.03.23
£000
Total
Year ended
31.03.23
£000
Head rents payable
(224)
–
(224)
(157)
–
(157)
Property overheads
(2,580)
–
(2,580)
(2,092)
–
(2,092)
Service charge expense
(10,689)
–
(10,689)
(8,372)
–
(8,372)
Development cost of sales
–
(922)
(922)
–
(2,915)
(2,915)
Development sales expenses
–
(35)
(35)
–
(1)
(1)
Provision
–
–
–
–
(30)
(30)
Cost of sales
(13,493)
(957)
(14,450)
(10,621)
(2,946)
(13,567)
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 £991,000 (2023: £nil), revenue from services of £711,000 (2023: £4,921,000),
service charge income of £10,689,000 (2023: £8,372,000) and rental income of £27,514,000 (2023: £36,555,000).
Financial Statements
Helical plc — Annual Report and Accounts 2024
155
Helical plc — Annual Report and Accounts 2024
154
Notes to the Financial Statements
continued
3. Segmental Information continued
Loss before tax
Investment
Year ended
31.03.24
£000
Development
Year ended
31.03.24
£000
Total
Year ended
31.03.24
£000
Investment
Year ended
31.03.23
£000
Development
Year ended
31.03.23
£000
Total
Year ended
31.03.23
£000
Net property income
25,701
(246)
25,455
34,306
1,975
36,281
Share of results of joint ventures
(9,969)
659
(9,310)
4,867
(1,373)
3,494
Loss on sale and revaluation of investment properties
(181,213)
–
(181,213)
(93,290)
–
(93,290)
Segmental (loss)/profit
(165,481)
413
(165,068)
(54,117)
602
(53,515)
Administrative expenses
(11,011)
(12,835)
Finance costs
(8,608)
(11,192)
Finance income
661
274
Change in fair value of derivative financial instruments
(5,609)
12,757
Loss before tax
(189,635)
(64,511)
Net assets
Investment
31.03.24
£000
Development
31.03.24
£000
Total
31.03.24
£000
Investment
31.03.23
£000
Development
31.03.23
£000
Total
31.03.23
£000
Investment properties
472,522
–
472,522
681,682
–
681,682
Land and developments
–
28
28
–
28
28
Asset held for sale
42,761
–
42,761
–
–
–
Investment in joint ventures
71,528
2,395
73,923
84,255
3,075
87,330
586,811
2,423
589,234
765,937
3,103
769,040
Owner occupied property, plant and equipment
3,569
4,351
Other investments
565
353
Derivative financial instruments
17,635
23,245
Trade and other receivables
18,233
24,935
Corporation tax receivable
–
7
Cash and cash equivalents
28,633
50,925
Total assets
657,869
872,856
Total liabilities
(256,794)
(264,181)
Net assets
401,075
608,675
All non-current assets are derived from the Group’s UK operations.
4. Net Property Income
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Gross rental income
27,514
36,555
Head rents payable
(224)
(157)
Property overheads
(2,580)
(2,092)
Net rental income
24,710
34,306
Development property income
711
4,921
Development cost of sales
(922)
(2,915)
Sales expenses
(35)
(1)
Provision
–
(30)
Development property (loss)/profit
(246)
1,975
Other revenue
991
–
Net property income
25,455
36,281
Property overheads include lettings costs, vacancy costs and bad debt provisions. The amounts above include gross rental income from
investment properties of £27,514,000 (2023: £36,555,000) and net rental income from investment properties of £24,710,000 (2023: £34,306,000).
Included within gross rental income above is an adjustment of £5,830,000 being a net release of previously accrued income (2023: recognition
of accrued income of £1,609,000). Included within gross rental income are dilapidation receipts of £1,490,000 (2023: £45,000).
5. Profit on Sale of Investment Properties
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Net proceeds from the sale of investment properties
–
186,541
Book value (Note 14)
–
(169,570)
Tenants’ incentives on sold investment properties
–
(12,407)
Profit on sale of investment properties
–
4,564
6. Administrative Expenses
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Administrative expenses
11,011
12,835
Operating profit is stated after the following items that are contained within administrative expenses:
Depreciation – Owner occupied property, plant and equipment
1,506
798
Share-based payments charge
1,039
1,073
Staff costs
5,382
7,755
Auditor’s remuneration:
Audit fees
Payable to the Company’s auditor for the audit of Parent Company and consolidated financial statements
195
230
Payable to the Company’s auditor for the audit of Company’s subsidiaries
90
96
Audit related assurance services
50
67
Other non-audit services
–
10
Operating lease costs
186
178
Note: Auditor’s remuneration for the year ended 31 March 2024 is fully payable to RSM UK Audit LLP. Auditor’s remuneration for the year ended
31 March 2023 was fully payable to Deloitte LLP.
7. Staff Costs
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Staff costs during the year:
Wages and salaries
4,438
6,508
Social security costs
690
959
Other pension costs
254
288
5,382
7,755
Details of the remuneration of Directors amounting to £1,981,000 (2023: £4,981,000) are included in the Directors’ Remuneration Report on
pages 122 to 141. Included within wages and salaries are Directors’ bonuses of £nil (2023: £1,008,000) as discussed in the Directors’
Remuneration Report on pages 122 to 141. Other pension costs relate to payments to individual pension plans.
The average monthly number of employees of the Group during the year was 24 (2023: 26) all of whom are UK head office staff. There were
averages of five (2023: five) management, five (2023: five) property executives and 14 (2023: 16) administrative staff.
Within administrative costs is the share-based payment charge for the year of £1,039,000 (2023: £1,073,000) 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 £747,000 (2023: £725,000).
8. Net Finance Costs and Change in Fair Value of Derivative Financial Instruments
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Interest payable on bank loans and overdrafts
(5,493)
(8,284)
Other interest payable and similar charges
(3,115)
(2,780)
Total before cancellation of loans
(8,608)
(11,064)
Cancellation of loans
–
(128)
Finance costs
(8,608)
(11,192)
Finance income
661
274
Net finance costs
(7,947)
(10,918)
Change in fair value of derivative financial instruments
(5,609)
12,757
Net finance costs and change in fair value of derivative financial instruments
(13,556)
1,839
No interest has been capitalised in the year to 31 March 2024 (2023: £nil).
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
156
157
Notes to the Financial Statements
continued
9. Tax on Loss on Ordinary Activities
Year ended
31.3.24
£000
Year ended
31.3.23
£000
The tax charge is based on the loss for the year and represents:
United Kingdom corporation tax at 25% (2023: 19%)
Adjustment in respect of prior years
(179)
–
Current tax charge
(179)
–
Deferred tax
–
–
Total tax charge for the year
(179)
–
Factors Affecting the Tax Charge for the Year
The tax assessed for the year is higher than (2023: higher than) the standard rate of corporation tax in the UK.
The differences are explained below:
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Loss on ordinary activities before tax
(189,635)
(64,511)
Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023: 19%)
47,409
12,257
Effect of:
Tax-exempt property rental business profit of the REIT
1,449
2,776
Net expenses not deductible for tax purposes
(498)
(294)
Capital allowances claims and adjustments not recognised through deferred tax
1,066
995
Tax movements on share awards
615
428
Operating (loss)/profit of joint ventures
(2,327)
664
Current tax charge adjustment in respect of prior periods
(179)
–
Tax losses not recognised through deferred tax
(1,008)
(351)
Movement on sale and revaluation not recognised through deferred tax
(45,304)
(18,592)
Chargeable gain less than profit or loss on investment property
–
867
Movement on derivatives not recognised through deferred tax
(1,402)
1,167
Other timing differences not recognised through deferred tax
–
83
Total tax charge for the year
(179)
–
The Group became a UK REIT on 1 April 2022. As a REIT, the Group is not subject to corporation tax on the profits of its property rental business
and chargeable gains arising on the disposal of investment assets used in the property rental business, but remains subject to tax on profits and
chargeable gains arising from non-REIT business activities.
Since entering the REIT regime, no deferred tax assets and liabilities have been recognised on the basis that they are either associated with the
tax-exempt property business or are deferred tax assets of the non-property business that are no longer recognised 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.
On the basis that the Group continues to meet the REIT regime conditions, there has been no change to the position regarding recognition of
deferred tax assets and liabilities in the year ended 31 March 2024. At 31 March 2024, no deferred tax was recognised (31 March 2023: £nil).
The Group contains entities with tax losses for which no deferred tax asset is recognised. The total unrecognised losses amount to
approximately £19,580,000 (31 March 2023: £12,694,000). 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.
10. Deferred Tax
There was no deferred tax at 31 March 2024 (31 March 2023: £nil).
11. Dividends Paid and Payable
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Attributable to equity share capital
Ordinary
– Interim paid 3.05p per share (2023: 3.05p)
3,744
3,750
– Prior year final paid 8.70p per share (2022: 8.25p)
10,679
10,092
14,423
13,842
A final dividend of 1.78p, if approved at the AGM on 17 July 2024, will be paid on 2 August 2024 to the Shareholders on the register on 28 June
2024. This final dividend, amounting to £2,185,000, has not been included as a liability as at 31 March 2024, 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 loss for the year of the Company was £145,087,000 (2023: profit restated £42,713,000).
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 share awards.
The 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:
Year ended
31.3.24
000
Year ended
31.3.23
000
Ordinary shares in issue
123,355
123,355
Weighting adjustment
(602)
(613)
Weighted average ordinary shares in issue for calculation of basic and EPRA earnings per share
122,753
122,742
Weighted average ordinary shares issued on share settled bonuses
154
561
Weighted average ordinary shares to be issued under Performance Share Plan
–
846
Adjustment for anti-dilutive shares
(154)
(1,407)
Weighted average ordinary shares in issue for calculation of diluted (loss)/earnings per share
122,753
122,742
£000
£000
Loss used for calculation of basic and diluted earnings per share
(189,814)
(64,511)
Basic loss per share
(154.6)p
(52.6)p
Diluted loss per share
(154.6)p
(52.6)p
£000
£000
Loss used for calculation of basic and diluted earnings per share
(189,814)
(64,511)
Net loss/(gain) on sale and revaluation of investment properties
– subsidiaries
181,213
93,290
– joint ventures
7,401
(5,161)
Tax on profit on disposal of investment properties
–
463
(Gain)/loss on movement in share of joint ventures
(155)
564
Fair value movement on derivative financial instruments
5,609
(12,757)
Expense on cancellation of loans
–
128
Deferred tax on adjusting items
–
(503)
Earnings used for calculation of EPRA earnings per share
4,254
11,513
EPRA earnings per share
3.5p
9.4p
The earnings used for the calculation of EPRA earnings per share include net rental income and development property profits but exclude
investment and trading property gains.
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
158
159
Notes to the Financial Statements
continued
14. Investment Properties
Freehold
31.3.24
£000
Leasehold
31.3.24
£000
Total
31.3.24
£000
Freehold
31.3.23
£000
Leasehold
31.3.23
£000
Total
31.3.23
£000
Book value at 1 April
625,642
56,040
681,682
736,907
201,890
938,797
Additions at cost
16,049
(11)
16,038
10,418
91
10,509
Transfer to asset held for sale
–
(43,817)
(43,817)
–
–
–
Disposals
–
–
–
(29,770)
(139,800)
(169,570)
Letting cost amortisation
(147)
(21)
(168)
(101)
(99)
(200)
Revaluation deficit
(169,072)
(12,141)
(181,213)
(91,812)
(6,042)
(97,854)
Book value at 31 March
472,472
50
472,522
625,642
56,040
681,682
Investment properties are stated at fair value as at 31 March 2024 as follows:
Group
Freehold
31.3.24
£000
Leasehold
31.3.24
£000
Total
31.3.24
£000
Freehold
31.3.23
£000
Leasehold
31.3.23
£000
Total
31.3.23
£000
Book value at 31 March
472,472
50
472,522
625,642
56,040
681,682
Lease incentives and letting costs included in trade
and other receivables
7,078
–
7,078
12,608
1,379
13,987
Head leases capitalised
–
–
–
–
(2,119)
(2,119)
Fair value at 31 March
479,550
50
479,600
638,250
55,300
693,550
Interest capitalised in respect of the refurbishment of investment properties at 31 March 2024 amounted to £8,271,000 (31 March 2023:
£9,620,000). Interest capitalised during the year in respect of the refurbishment of investment properties amounted to £nil (31 March 2023: £nil).
An amount of £nil (31 March 2023: £3,482,000) was released on the sale of the properties in the year and an amount of £1,349,000 (31 March
2023: £nil) was released as a result of an asset being transferred to assets held for sale.
Investment properties with a total fair value of £479,450,000 (31 March 2023: £693,400,000) were held as security against borrowings.
The historical cost of investment property is £608,010,000 (31 March 2023: £633,237,000). The anticipated capital expenditure included in
valuations reflects our commitment to achieving the highest standards of sustainability. Any capital expenditure contractually committed is
included in Note 33.
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 2024 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 2024 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 impact on the valuation. The impact on the valuation will be mitigated by the interrelationship of two inputs in
opposite directions.
A sensitivity analysis was performed to ascertain the impact of a 25 and 50 basis point movement (“bps”) in the equivalent yield and a 5% and
2.5% movement in ERVs for the wholly owned investment portfolio:
Group
31.3.24
£000
Total change in
portfolio value
%
Total change in
portfolio value
£m
True equivalent yield
7.05%
+ 50 bps
(10.4)
(54.3)
+ 25 bps
(5.4)
(28.2)
- 25 bps
5.9
30.8
- 50 bps
12.3
64.4
ERV
£72.71 psf
+ 5.00%
5.6
29.5
+ 2.50%
2.8
14.7
- 2.50%
(2.7)
(14.3)
- 5.00%
(5.4)
(28.3)
Group
31.3.23
£000
Total change in
portfolio value
%
Total change in
portfolio value
£m
True equivalent yield
5.35%
+ 50 bps
(5.7)
(39.7)
+ 25 bps
(2.4)
(16.5)
- 25 bps
5.3
36.8
- 50 bps
9.7
67.5
ERV
£78.09 psf
+ 5.00%
3.3
22.6
+ 2.50%
1.6
11.2
- 2.50%
(1.6)
(10.9)
- 5.00%
(3.1)
(21.7)
The investment properties have been valued at 31 March 2024 as follows:
Group
31.3.24
£000
Group
31.3.23
£000
Cushman & Wakefield LLP
479,450
693,400
Directors’ valuation
150
150
479,600
693,550
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:
Group
31.3.24
£000
Group
31.3.23
£000
Not later than one year
18,921
30,276
Later than one year but not more than two years
16,225
22,296
Later than two years but not more than three years
14,685
19,613
Later than three years but not more than four years
8,270
17,876
Later than four years but not more than five years
4,323
9,514
More than five years
12,112
53,659
74,536
153,234
The Company has no operating lease arrangements as lessor.
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
160
161
Notes to the Financial Statements
continued
16. Owner Occupied Property, Plant and Equipment
Group
Leasehold
property and
improvements
31.3.24
£000
Plant and
equipment
31.3.24
£000
Total
31.3.24
£000
Leasehold
property and
improvements
31.3.23
£000
Plant and
equipment
31.3.23
£000
Total
31.3.23
£000
Cost at 1 April
7,428
685
8,113
7,138
555
7,693
Additions at cost
1,425
93
1,518
290
259
549
Disposals
–
(122)
(122)
–
(129)
(129)
Transfer of sublet to debtors
(1,379)
–
(1,379)
–
–
–
Cost at 31 March
7,474
656
8,130
7,428
685
8,113
Depreciation at 1 April
3,360
402
3,762
2,689
373
3,062
Provision for the year
1,387
119
1,506
671
128
799
Eliminated on disposals
–
(121)
(121)
–
(99)
(99)
Transfer of sublet to debtors
(586)
–
(586)
–
–
–
Depreciation at 31 March
4,161
400
4,561
3,360
402
3,762
Net book amount at 31 March
3,313
256
3,569
4,068
283
4,351
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 £2,632,000 (31 March 2023: £2,980,000).
17. Investment in Subsidiaries
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
Restated1
£000
Cost at 1 April
–
–
321,833
239,021
Additions
–
–
218
82,812
Disposals
–
–
(7,571)
–
Cost at 31 March
–
–
314,480
321,833
Impairment at 1 April
–
–
28,680
28,680
Impaired during the year
–
–
151,931
–
Disposals
–
–
(7,571)
–
Impairment at 31 March
–
–
173,040
28,680
Net book amount at 31 March
–
–
141,440
293,153
1 See Note 38.
A list of all the Company’s subsidiary undertakings, all of which have been consolidated, is shown in Note 40 to the financial statements.
18. Investment in Joint Ventures
Summarised consolidated Income Statements
Investment
31.3.24
£000
Development
31.3.24
£000
Total
31.3.24
£000
Investment
31.3.23
£000
Development
31.3.23
£000
Total
31.3.23
£000
Revenue
1,991
568
2,559
216
9,925
10,141
Gross rental income
1,991
13
2,004
216
71
287
Property overheads
(1,202)
(7)
(1,209)
(1,057)
(46)
(1,103)
Net rental income/(expense)
789
6
795
(841)
25
(816)
(Loss)/gain on revaluation of investment properties
(5,933)
–
(5,933)
5,095
–
5,095
(Loss)/gain on sale of investment properties
(1,467)
(1)
(1,468)
49
17
66
Development property gain
–
659
659
–
1,262
1,262
(6,611)
664
(5,947)
4,303
1,304
5,607
Administrative expenses
(317)
(21)
(338)
(282)
(177)
(459)
(6,928)
643
(6,285)
4,021
1,127
5,148
Interest payable on bank loans
(2,990)
(22)
(3,012)
(2,702)
(1)
(2,703)
Other interest payable and similar charges
(211)
–
(211)
(203)
–
(203)
Interest capitalised
–
–
–
1,815
–
1,815
Finance income
11
32
43
11
12
23
(Loss)/profit before tax
(10,118)
653
(9,465)
2,942
1,138
4,080
Tax (charge)/credit
(8)
9
1
(335)
313
(22)
(Loss)/profit after tax
(10,126)
662
(9,464)
2,607
1,451
4,058
Adjustment for Barts Square economic interest1
154
–
154
(564)
–
(564)
Share of results of joint ventures
(9,972)
662
(9,310)
2,043
1,451
3,494
1 This is an adjustment to reflect the impact of the consolidation of a joint venture at its economic interest of 50.0% (2023: 50.0%) rather than its actual ownership interest of 33.3%.
Summarised consolidated Balance Sheets
Investment
31.3.24
£000
Development
31.3.24
£000
Total
31.3.24
£000
Investment
31.3.23
£000
Development
31.3.23
£000
Total
31.3.23
£000
Non-current assets
Investment properties
140,811
–
140,811
150,151
–
150,151
Owner occupied property, plant and equipment
–
63
63
–
109
109
140,811
63
140,874
150,151
109
150,260
Current assets
Land and developments
–
1,321
1,321
–
539
539
Trade and other receivables
2,550
484
3,034
652
75
727
Deferred tax
–
–
–
(509)
509
–
Cash and cash equivalents
1,889
1,175
3,064
1,163
2,586
3,749
4,439
2,980
7,419
1,306
3,709
5,015
Current liabilities
Trade and other payables
(2,111)
(2,143)
(4,254)
(2,596)
(736)
(3,332)
(2,111)
(2,143)
(4,254)
(2,596)
(736)
(3,332)
Non-current liabilities
Trade and other payables
(1,151)
(4)
(1,155)
(400)
(6)
(406)
Borrowings
(65,644)
–
(65,644)
(59,416)
–
(59,416)
Lease liability
(5,020)
–
(5,020)
(4,927)
–
(4,927)
(71,815)
(4)
(71,819)
(64,743)
(6)
(64,749)
Net assets before acquisition costs
71,324
896
72,220
84,118
3,076
87,194
Acquisition costs
136
1,567
1,703
136
–
136
Net assets
71,460
2,463
73,923
84,254
3,076
87,330
The fair value of the investment properties at 31 March 2024 is as follows:
Total
31.3.24
£000
Total
31.3.23
£000
Book value at 31 March
140,811
150,151
Lease incentives and letting costs included in trade and other receivables
1,770
185
Head leases capitalised
(4,331)
(4,361)
Fair value at 31 March
138,250
145,975
The Directors’ valuation of land and developments shows a surplus of £nil (31 March 2023: £nil) above book value.
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
162
163
Notes to the Financial Statements
continued
18. Investment in Joint Ventures continued
Dividends of £5,666,000 (2023: £16,812,000) were received from joint venture companies during the year. 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 2023: £nil).
The Group has two material joint ventures (31 March 2023: 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
Barts LP
Group
31.03.24
£000
Charterhouse
Street Group
31.03.24
£000
Other
31.03.24
£000
Total
£000
31.03.24
Our share
31.03.24
£000
Our share
31.03.23
£000
Revenue
1,271
3,838
9
5,118
2,559
10,141
Gross rental income
171
3,838
–
4,009
2,004
287
Property overheads
(219)
(2,200)
–
(2,419)
(1,209)
(1,103)
Net rental (costs)/income
(48)
1,638
–
1,590
795
(816)
Development gain
1,311
–
7
1,318
659
1,262
(Loss)/gain on revaluation of investment properties
–
(11,868)
–
(11,868)
(5,933)
5,095
(Loss)/gain on sale of investment properties
(2,936)
–
–
(2,936)
(1,468)
66
Administrative expenses
(400)
(275)
–
(675)
(338)
(459)
Finance costs
(48)
(5,977)
–
(6,025)
(3,012)
(2,703)
Interest capitalised
–
–
–
–
–
1,815
Lease liability interest
–
(421)
–
(421)
(211)
(203)
Finance income
79
–
7
86
43
23
(Loss)/profit before tax
(2,042)
(16,903)
14
(18,931)
(9,465)
4,080
Tax credit/(charge)
3
–
–
3
1
(22)
Adjustment for Barts Square economic interest1
–
–
–
–
154
(564)
(Loss)/profit after tax
(2,039)
(16,903)
14
(18,928)
(9,310)
3,494
1 This adjustment reflects the impact of the consolidation of a joint venture at its economic interest of 50.0% (2023: 50.0%) rather than its actual ownership interest of 33.3%.
Summarised Balance Sheets
Barts LP
Group
31.03.24
£000
Charterhouse
Street Group
31.03.24
£000
Other
31.03.24
£000
Total
31.03.24
£000
Our share
31.03.24
£000
Our share
31.03.23
£000
Non-current assets
Investment properties
–
281,623
–
281,623
140,811
150,151
Owner occupied property, plant and equipment
125
–
–
125
63
109
125
281,623
–
281,748
140,874
150,260
Current assets
Land, development and trading properties
–
–
2,589
2,589
1,321
539
Trade and other receivables
439
4,789
825
6,053
3,034
727
Deferred tax
–
–
–
–
–
–
Cash and cash equivalents
1,672
3,143
1,297
6,112
3,064
3,749
2,111
7,932
4,711
14,754
7,419
5,015
Current liabilities
Trade and other payables
(693)
(3,570)
(4,162)
(8,425)
(4,254)
(3,332)
(693)
(3,570)
(4,162)
(8,425)
(4,254)
(3,332)
Non-current liabilities
Borrowings
–
(131,289)
–
(131,289)
(65,644)
(59,416)
Lease liability
–
(10,041)
–
(10,041)
(5,020)
(4,927)
Shareholder loans
–
(2,300)
–
(2,300)
(1,150)
–
Trade and other payables
–
–
(10)
(10)
(5)
(406)
Deferred tax
–
–
–
–
–
–
–
(143,630)
(10)
(143,640)
(71,819)
(64,749)
Net assets before acquisition costs
1,543
142,355
539
144,437
72,220
87,194
Acquisition costs
–
273
–
273
1,703
136
Net assets
1,543
142,628
539
144,710
73,923
87,330
At 31 March 2024 the Group and the Company had legal interests in the following joint venture companies:
Country of
incorporation
Class of share
capital held
Proportion held
Group
Proportion held
Company
Nature of
business
Barts, L.P.
United States
n/a
33%
–
Investment
Barts One Limited
Jersey
Ordinary
33%
–
Investment
Barts Two Limited
Jersey
Ordinary
33%
–
Investment
Barts Close Office Limited
Jersey
Ordinary
33%
–
Investment
Barts Square First Office Limited
Jersey
Ordinary
33%
–
Investment
Barts Square Active One Limited
Jersey
Ordinary
33%
–
Investment
Barts Square First Residential Limited
Jersey
Ordinary
33%
–
Investment
Barts Square First Limited
United Kingdom
Ordinary
33%
–
Development
Barts Square Land One Limited
United Kingdom
Ordinary
33%
–
Development
OBC Development Management Limited
United Kingdom
Ordinary
33%
–
Development
Barts Square Second Limited
United Kingdom
Ordinary
33%
–
Development
Abbeygate Helical (Leisure Plaza) Limited
United Kingdom
Ordinary
50%
50%
Development
Abbeygate Helical (C4.1) LLP
United Kingdom
n/a
50%
50%
Development
Shirley Advance LLP
United Kingdom
n/a
50%
–
Development
Haslucks Green Limited
United Kingdom
Ordinary
50%
–
Development
Charterhouse Place Limited
United Kingdom
Ordinary
50%
–
Investment
Charterhouse Street Limited
Jersey
Ordinary
50%
–
Investment
Platinum Holdco Limited
United Kingdom
Ordinary
51%
–
Investment
Platinum KWS Limited
United Kingdom
Ordinary
51%
–
Investment
Platinum Southwark Limited
United Kingdom
Ordinary
51%
–
Investment
Platinum Paddington Limited
United Kingdom
Ordinary
51%
–
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 LP Group, it has accounted for its share at 50.0% (2023: 50.0%) to reflect its expected
economic interest in the joint venture.
19. Other Investments
Group
Total
31.3.24
£000
Total
31.3.23
£000
Book value at 1 April
353
306
Acquisitions
212
47
At 31 March
565
353
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 £212,000 (2023: £47,000) 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 3 fair value measurement as defined in
IFRS 13 Fair Value Measurement.
20. Land and Developments
Group
Total
31.3.24
£000
Total
31.3.23
£000
At 1 April
28
2,089
Disposals
–
(2,031)
Provision
–
(30)
At 31 March
28
28
The Directors’ valuation of land and developments shows a surplus of £302,000 (31 March 2023: £302,000) above book value. This surplus has
been included in the EPRA net asset value (Note 35). No interest has been capitalised or included in land and developments.
Land and developments with carrying values totalling £nil (31 March 2023: £nil) were held as security against borrowings.
The Company had £nil (31 March 2023: £nil) of land and developments.
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
164
165
Notes to the Financial Statements
continued
21. Assets Held for Sale
Group
Total
31.3.24
£000
Total
31.3.23
£000
At 1 April
–
–
Book value on transfer to asset held for sale
43,817
–
Lease incentives
1,133
–
Long leasehold liability
(2,189)
–
At 31 March
42,761
–
22. Trade and Other Receivables
Due within one year
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
£000
Trade receivables
2,111
2,517
–
–
Amounts owed by joint venture undertakings
2,941
664
1,752
207
Other receivables
660
88
647
194
Prepayments
4,103
1,990
2,689
609
Accrued income
7,166
19,676
–
–
Total trade and other receivables
16,981
24,935
5,088
1,010
Included within accrued income are lease incentives of £7,078,000 (31 March 2023: £13,987,000).
Due after one year
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
Restated1
£000
Other receivables
1,252
–
1,252
–
Amounts owed by Group undertakings – interest free
–
–
190,607
218,092
Amounts owed by Group undertakings – interest bearing
–
–
82,893
81,581
1,252
–
274,752
299,673
1 See Note 38.
Receivables
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
Restated1
£000
Not past due
4,510
3,586
277,151
300,074
Past due < three months
581
221
–
–
Past due > three months
229
541
–
–
Total receivables being financial assets
5,320
4,348
277,151
300,074
Total receivables being non-financial assets
12,913
20,587
2,689
609
Total receivables
18,233
24,935
279,840
300,683
1 See Note 38.
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 £7,828,000 of rental deposits (31 March 2023: £9,069,000) which are included within cash (see Note 23).
Movements in the loss allowance of trade receivables are as follows:
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
Restated1
£000
Gross receivables being financial assets
6,099
5,766
308,429
313,545
Provisions for receivables impairment
(779)
(1,418)
(31,278)
(13,471)
Net receivables being financial assets
5,320
4,348
277,151
300,074
Receivables written-off during the year as uncollectable
384
86
–
–
1 See Note 38.
Amounts owed by subsidiary undertakings have been considered for impairment using the 12 months expected credit loss model because
there have been no changes in credit risk since initial recognition. The expected credit losses on amounts owed by Group companies is
insignificant (2023: insignificant).
Amounts are written off when it is determined that the Group company will not have sufficient assets or future income to repay the balance.
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.
Group
£000
Company
£000
Balance as at 31 March 2022
1,386
–
Net remeasurement of loss allowance
170
–
Amounts recovered
(138)
–
Balance as at 31 March 2023
1,418
–
Net remeasurement of loss allowance
(695)
–
Amounts recovered
(16)
–
Balance as at 31 March 2024
707
–
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
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
£000
At 1 April
3,602
530
–
–
Additions
1,040
3,072
–
–
Received during the year
(3,433)
–
–
–
Reassessment of revenue receivable
(1,139)
–
At 31 March
70
3,602
–
–
Receivables from contracts with customers
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
£000
At 1 April
1,007
1,007
–
–
Additions
–
–
–
–
Received during the year
(1,007)
–
–
At 31 March
–
1,007
–
–
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.
23. Cash and Cash Equivalents
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
£000
Cash held at managing agents
4,914
4,156
3
3
Rental deposits
7,828
9,069
–
–
Restricted cash
3,880
9,495
74
96
Cash deposits
12,011
28,205
9,036
23,832
28,633
50,925
9,113
23,931
Restricted cash is made up of cash held by solicitors, rental deposits and cash in restricted bank accounts.
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
166
167
Notes to the Financial Statements
continued
24. Trade and Other Payables
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
£000
Trade payables
13,497
15,212
769
793
Social security costs and other taxation
952
1,944
–
–
Amounts owed to subsidiary undertakings
–
–
123,436
153,827
Other payables
300
192
74
96
Accruals
5,101
5,404
2,532
933
Deferred income
5,036
8,480
–
–
24,886
31,232
126,811
155,649
25. Lease Liability
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
£000
Current lease liability
829
683
829
683
Non-current lease liability
3,445
5,589
3,445
3,399
Included within the lease liability are £829,000 (31 March 2023: £683,000) of current and £3,445,000 (31 March 2023: £3,399,000) 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:
Minimum
lease
payments
31.3.24
£000
Interest
31.3.24
£000
Present value
of minimum
lease payments
31.3.24
£000
Minimum
lease
payments
31.3.23
£000
Interest
31.3.23
£000
Present value
of minimum
lease payments
31.3.23
£000
Not later than one year
1,109
(61)
1,048
922
(29)
893
Later than one year but not more than five years
3,881
(655)
3,226
3,689
(393)
3,296
More than five years
–
–
–
15,497
(13,414)
2,083
4,990
(716)
4,274
20,108
(13,836)
6,272
The long leasehold liabilities in the above table in the current year relate to the lease of the Group’s head office. The associated asset of
£2,632,000 (31 March 2023: £2,980,000) is shown in Note 16. The prior year numbers also included the 155 year head lease at 25 Charterhouse
Square, EC1.
The current year numbers in the above table do not include the minimum lease payments of £15,496,000 with a present value of £2,189,000
relating to the long lease at 25 Charterhouse Square, EC1. This property was classified as held for sale at the reporting date (see Note 21) and
was subsequently disposed of after the reporting date (see Note 34).
26. Borrowings
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
£000
Current borrowings
–
–
–
–
Borrowings repayable within:
two to three years
227,634
–
–
–
three to four years
–
226,677
–
–
Non-current borrowings
227,634
226,677
–
–
Total borrowings
227,634
226,677
–
–
Term loans in borrowings 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 £522,211,000 (31 March 2023: £693,400,000). 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 £65,644,000
(31 March 2023: £59,416,000).
27. Financing and Derivative Financial Instruments
The policies for dealing with liquidity and interest rate risk are noted in our principal risks on pages 51 to 59.
Group
31.3.24
£000
Group
31.3.23
£000
Borrowings due after more than one year
227,634
226,677
227,634
226,677
The Group has various undrawn committed borrowing facilities. The facilities available at 31 March 2024 in respect of which all conditions
precedent had been met were as follows:
Group
31.3.24
£000
Group
31.3.23
£000
Expiring in one year or less
10,000
10,000
Expiring in more than two years but not more than three years
70,000
–
Expiring in more than three years but not more than four years
–
170,000
80,000
180,000
Interest rates – Group
%
Expiry
Group
31.3.24
£000
%
Expiry
Group
31.3.23
£000
Derivatives:
swap rate plus bank margin
3.512
June 2026
50,000
3.362
June 2026
50,000
swap rate plus bank margin
3.786
July 2026
50,000
3.636
July 2026
50,000
swap rate plus bank margin
2.433
July 2026
50,000
2.283
July 2026
50,000
swap rate plus bank margin
2.595
July 2026
50,000
2.445
July 2026
50,000
swap rate plus bank margin
2.537
July 2026
50,000
2.387
July 2026
50,000
Weighted average
2.973
July 2026
250,000
2.823
July 2026
250,000
Unmatched derivatives
7.248
July 2026
(20,000)
6.085
July 2026
(20,000)
Unamortised finance costs
(2,366)
(3,323)
Total borrowings
2.889
July 2026
227,634
3.366
July 2026
226,677
The above table shows the extent that interest rate swaps fix the interest rates on our borrowings.
Floating rate borrowings bear interest at rates based on SONIA.
The Group had no caps or floors at 31 March 2024.
At 31 March 2024 the Company had no interest rate swaps, caps or floors (31 March 2023: nil).
Gearing
Group
31.3.24
£000
Group
31.3.23
£000
Total borrowings
227,634
226,677
Cash
(28,633)
(50,925)
Net borrowings
199,001
175,752
Net borrowings exclude the Group’s share of borrowings in joint ventures of £65,644,000 (31 March 2023: £59,416,000) and cash of
£3,064,000 (31 March 2023: £3,749,000). All borrowings in joint ventures are secured.
Group
31.3.24
£000
Group
31.3.23
£000
Net assets
401,075
608,675
Gearing
49.6%
28.9%
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
168
169
Notes to the Financial Statements
continued
28. Share Capital
31.3.24
£000
31.3.23
£000
Authorised
39,577
39,577
The authorised share capital of the Company is £39,577,000 divided into ordinary shares of 1p each.
Allotted, called up and fully paid:
31.3.24
£000
31.3.23
£000
123,355,197 (31 March 2023: 123,355,197) ordinary shares of 1p each
1,233
1,233
1,233
1,233
Shares in issue
31.3.24
Number
Share capital
31.3.24
£000
Shares in issue
31.3.23
Number
Share capital
31.3.23
£000
Ordinary shares
At 1 April
123,355,197
1,233
122,325,413
1,223
Issued share capital
–
–
1,029,784
10
At 31 March
123,355,197
1,233
123,355,197
1,233
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
(2024: £393,332,000, 2023: £600,932,000). The Group continually monitors its gearing level to ensure that it is appropriate. Gearing increased
to 50% from 29% in the year as a result of the revaluation of investment property during the year.
29. Share Options
At 31 March 2024 and 31 March 2023 there were no unexercised options over new ordinary 1p shares in the Company.
30. Share-Based Payments
The Group provides share-based payments to employees in the form of Performance Share Plan (“PSP”) awards and a Share Incentive Plan.
The Group uses a combination of the Black-Scholes, Chaffe 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 136.
Performance Share Plan awards
Awards
2024
Weighted average
award value
Awards
2023
Weighted average
award value
Outstanding at beginning of the year
3,571,812
347p
3,600,736
355p
Awards vested during the year
(844,287)
297p
(916,140)
321p
Awards lapsed during the year
(428,889)
297p
(316,956)
321p
Awards made during the year
1,753,501
188p
1,204,172
296p
Outstanding at end of the year
4,052,137
294p
3,571,812
347p
All awards have an exercise price of £nil (2023: £nil).
The weighted average share price at the date of exercise for the share options exercised during the year was 278.00p (2023: 386.00p).
The PSP awards outstanding at 31 March 2024 had a weighted average remaining contractual life of one year and three months.
The fair value of the awards made in the year to 31 March 2024 was £3,305,000 (2023: £3,562,000). These were granted on 1 June 2023.
The inputs into the Black-Scholes, Chaffe and stochastic models of valuation of the PSP awards made in the year to 31 March 2024 were as follows:
2024
2023
2022
Weighted average share price
188.5p
296.0p
362.0p
Weighted average exercise price
–
–
–
Expected volatility
36%
34%
31%
Expected life
3 years
3 years
3 years
Risk free rate
4.24%
1.75%
0.14%
Expected dividends
0.00%
0.00%
0.00%
The Group recognised a charge of £1,039,000 (2023: £1,073,000) 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.
31. Changes in Liabilities Arising from Financing Activities
The table below details changes in the Group’s liabilities from financing activities, including both cash and non-cash changes. Liabilities arising
from financing activities are those whose cash flows were, or future cash flows will be, classified in the Consolidated and Company Cash Flow
Statements as cash flows from financing activities.
Group
£000
Company
£000
At 31 March 2022
402,904
–
Financing cash flows:
Borrowings repaid
(170,000)
–
Finance lease repayments
(659)
–
Other changes
21
–
At 31 March 2023
232,266
–
Financing cash flows:
Finance lease repayments
(708)
–
Other changes
(479)
–
At 31 March 2024
231,079
–
Financing cash flows comprise borrowings drawn down and repaid in the Consolidated and Company Cash Flow Statements. Other changes
include the rolling up of interest and the change in unamortised refinancing costs.
32. Contingent Liabilities
The Company has entered into cross guarantees in respect of the banking facilities of its subsidiaries. These are not considered to have a
material value. There were no other contingent liabilities at 31 March 2024 for the Group or the Company (31 March 2023: £nil).
33. Capital Commitments
The Group has a commitment of £133,500,000 (31 March 2023: £1,700,000), of which £59,400,000 relates to the development of 100 New
Bridge Street, EC4 and the remaining £74,100,000 relates to the purchases of the TfL sites at 10 King William Street, EC4, Southwark, SE1 and
Paddington, W2.
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
170
171
Notes to the Financial Statements
continued
34. Post Balance Sheet Events
Following the year end, the sale of 25 Charterhouse Square, EC1 for £43.5m was completed (see Note 21) with £42m of the proceeds used to
part pay down the Group’s RCF.
On 17 May 2024, a joint venture agreement was signed with Orion Capital Managers who acquired a 50% investment in the 100 New Bridge
Street, EC4 site for £55m, with a £155m development facility agreement signed at the same time to fund the development and finance costs.
The impact of the two transactions above is reflected in the pro-forma tables below:
At
31 March
2024
£000
Impact of
transactions
£000
Pro-forma
£000
Investment property fair value
– subsidiaries
479,600
(99,000)
380,600
– joint ventures
138,250
49,500
187,750
Investment property held for sale
– subsidiaries
42,761
(42,761)
–
Development portfolio
1,651
–
1,651
Total see-through property portfolio
662,262
(92,261)
570,001
See-through net borrowings
261,581
(97,761)
163,820
See-through loan to value
39.5%
(10.8)%
28.7%
Net assets
401,075
5,500
406,575
See-through gearing
65.2%
(24.9)%
40.3%
35. Net Assets Per Share
Group
31.3.24
£000
Number
of shares
000
pence
Group
31.3.23
£000
Number
of shares
000
pence
IFRS net assets
401,075
123,355
608,675
123,355
Adjustments:
own shares held
(602)
(283)
Basic net asset value
401,075
122,753
327
608,675
123,072
495
share settled bonus
154
561
dilutive effect of Performance Share Plan
–
751
Diluted net asset value
401,075
122,907
326
608,675
124,384
489
Adjustments:
fair value of financial instruments
(17,635)
(23,245)
fair value of land and developments
302
302
real estate transfer tax
44,605
56,591
EPRA net reinstatement value
428,347
122,907
349
642,323
124,384
516
real estate transfer tax
(21,879)
(28,868)
EPRA net tangible asset value
406,468
122,907
331
613,455
124,384
493
Group
31.3.24
£000
Number
of shares
000
pence
Group
31.3.23
£000
Number
of shares
000
pence
Diluted net assets
401,075
122,907
326
608,675
124,384
489
Adjustments:
surplus on fair value of stock
302
302
EPRA net disposal value
401,377
122,907
327
608,977
124,384
490
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 per share reflects the fair value of all the assets and liabilities of the Group at 31 March 2024.
36. Related Party Transactions
At 31 March 2024 and 31 March 2023 the following amounts were due from/(to) the Group’s joint ventures:
31.3.24
£000
31.3.23
£000
Charterhouse Place Limited Group
1,340
577
Barts LP Group
71
79
Shirley Advance LLP
(43)
8
Platinum Group
1,530
–
An accounting and corporate services fee of £50,000 (March 2023: £50,000) was charged by the Group to the Barts Square companies. A
development management, accounting and corporate services fee of £1,089,181 due from the Charterhouse Place Limited group was reversed
(31 March 2023: £150,000 receivable).
All balances are repayable on demand. No provisions have been recognised in respect of amounts owed from joint ventures.
At 31 March 2024 and 31 March 2023 there were the following balances between the Company and its subsidiaries:
31.3.24
£000
31.3.23
Restated1
£000
Amounts due from subsidiaries
273,500
299,673
Amounts due to subsidiaries
123,436
153,827
1 See Note 38.
31.3.24
£000
31.3.23
£000
Management charges receivable
352
426
Management charges payable
4,093
4,686
Distributions from subsidiaries and joint ventures
27,320
60,595
Management charges receivable relate to the performance of management services for the Company’s subsidiaries.
During the year Helical plc issued nil shares at a value of £nil (2023: 1,029,784 shares at a value of £3,975,000) to satisfy the obligation of its
subsidiary, Helical Services Limited, in relation to Performance Share Plan 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 22. Amounts owed to subsidiaries by the
Company are identified in Note 24.
The Group considers that key management personnel are the Directors. The compensation paid or payable to key management (including
associated Employer’s NIC) is:
31.3.24
£000
31.3.23
£000
Salaries and other short-term employee benefits
2,118
3,230
Share-based payment charge
1,039
1,073
3,157
4,303
The total dividends paid to Directors of the Group in the year were £654,313 (2023: £540,135).
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
172
173
Notes to the Financial Statements
continued
37. Financial Instruments
Categories of Financial Instruments
Financial assets in the Group include derivative financial assets and other investments which are designated as “fair value through 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 in the Group classed as “fair value through profit or loss” include derivatives and a specific joint venture valuation share.
Financial liabilities also include secured bank loans, trade and other payables, long leasehold liability and provisions, all of which are classified as
financial liabilities at amortised cost. In the Company, the financial liabilities include trade and other payables, amounts owed to subsidiaries and
a long leasehold liability, all of which are classified at amortised cost.
Financial Assets and Liabilities by Category
The financial instruments of the Group and Company as classified in the financial statements can be analysed under the following categories.
Financial assets
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
Restated1
£000
Measured at amortised cost
33,953
55,273
286,264
324,005
Fair value through profit or loss
18,200
23,598
–
–
Total financial assets
52,153
78,871
286,264
324,005
These financial assets are included in the Balance Sheet within the following headings:
Balance Sheet
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
Restated1
£000
Other investments
565
353
–
–
Trade and other receivables, including amounts due from Group undertakings
5,320
4,348
277,151
300,074
Cash and cash equivalents
28,633
50,925
9,113
23,931
Derivative financial assets
17,635
23,245
–
–
Total financial assets
52,153
78,871
286,264
324,005
1 See Note 38.
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
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
£000
Fair value through profit or loss
33
33
–
–
Measured at amortised cost
250,774
253,724
131,085
159,731
Total financial liabilities
250,807
253,757
131,085
159,731
The financial liabilities are included in the Balance Sheet within the following headings:
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
£000
Trade and other payables
18,899
20,808
126,811
155,649
Borrowings – non-current
227,634
226,677
–
–
Lease liability
4,274
6,272
4,274
4,082
Total financial liabilities
250,807
253,757
131,085
159,731
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 2024.
Financial liabilities are stated in accordance with IAS 32 Financial Instruments: Presentation.
The Group financial instruments that are measured subsequent to initial recognition at fair value are interest rate swaps.
Interest rate swaps 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 37); and
Level 3:
Investment property (Note 14), and Other investments (Note 19).
There were no transfers between categories in the current or prior year.
Derivative financial instruments
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
£000
Interest rate caps
–
–
–
–
Interest rate swaps
17,635
23,245
–
–
17,635
23,245
–
–
The Group’s movement in the fair value of the derivative financial instruments in the year was a loss of £5,609,000 (2023: gain of £12,757,000)
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
investment grade banking institutions and in client accounts with solicitors and managing agents and therefore credit risk is considered low.
As at 31 March 2024 the Group had total credit risk exposure, excluding cash, of £5,320,000, relating to financial assets held at both amortised
cost and at fair value through profit and loss. The quantitative disclosures of trade and other receivables credit risk are shown in Note 22.
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.
Liquidity Risk
Liquidity risk is defined as the risk that the Group would not be able to settle or meet its obligations on time or at a reasonable price.
Liquidity and funding risks, related processes and policies are overseen by management.
The Group manages its liquidity risk on a consolidated basis based on business needs, tax, capital or regulatory considerations, if applicable,
and through numerous sources of finance in order to maintain flexibility. Management monitors the Group’s net liquidity position through rolling
forecasts on the basis of expected cash flows. The Group’s cash and cash equivalents are held with major regulated financial institutions and
the Directors regularly monitor the financial institutions that the Group uses to ensure its exposure to liquidity risk is minimised.
For further information on debt facilities, see Notes 26 and 27.
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
174
175
Notes to the Financial Statements
continued
37. Financial Instruments continued
The maturity profile of the Group’s contracted financial liabilities, including trade and other payables, lease liabilities and borrowings, is as follows:
Group
31.3.24
£000
Group
31.3.23
£000
Company
31.3.24
£000
Company
31.3.23
£000
Payable within three months
22,000
23,320
127,088
155,758
Payable between three months and one year
6,726
10,379
831
614
Payable between one and three years
238,238
237,330
2,217
1,637
Payable after three years
1,940
11,510
1,940
2,250
Total contracted liabilities
268,904
282,539
132,076
160,259
At 31 March 2024 the Group had £80,000,000 (31 March 2023: £180,000,000) of undrawn borrowing facilities, £150,000 (31 March 2023:
£150,000) of uncharged property assets and cash balances of £28,633,000 (31 March 2023 : £50,925,000). The above contracted liabilities
assume that no loans are extended beyond their current facility expiry date. Management believes that these facilities, together with anticipated
sales and the renewal of some of these loan facilities, mean that the Group can meet its contracted liabilities as they fall due.
Market Risk
The Group is exposed to market risk, primarily related to interest rates, foreign currency exchange movements, the market value of the
investments and accrued development profits. The Group actively monitors these exposures.
Interest Rate Risk
It is the Group’s policy and practice to minimise interest rate cash flow exposures on long-term financing. The Group does this by using a number
of derivative financial instruments including interest rate swaps and interest rate caps and floors. The purpose of these derivatives is to manage
the interest rate risks arising from the Group’s sources of finance. The Group does not use financial instruments for speculative purposes.
Details of financing and financial instruments can be found in Note 27.
In the year to 31 March 2024, if interest rates had moved by 0.5%, this would have resulted in the following movement to net profits and equity
due to movements in interest charges and mark-to-market valuations of derivatives.
Group impact
on results
31.3.24
£000
Group impact
on results
31.3.23
£000
Company impact
on results
31.3.24
£000
Company impact
on results
31.3.23
£000
0.5% increase – increase in net results and equity
3,301
4,233
74
120
0.5% decrease – decrease in net results and equity
(3,301)
(4,233)
(74)
(120)
Foreign Currency Exchange Risk
The Group and Company have no material exposure to movements in foreign currency rates.
38. Restatement
The prior year Parent Company numbers have been restated to reclassify an intercompany loan of £82,812,000 between Helical plc and one of
its subsidiaries to an investment in subsidiaries. This was due to an issue of shares by the subsidiary to capitalise the loan in the prior year which
was not recorded. This adjustment has no impact on net assets.
In addition, a further restatement has been made to correctly reflect interest on an interest bearing intercompany loan. The impact of this
adjustment results in an increase in Parent Company profit before tax in the year to 31 March 2023 of £4,700,000. These adjustments do not
have any tax impact and have been reflected in the Company cash flow statement.
The effect of the above adjustments on the relevant financial statement line items for the year ended 31 March 2023 is as follows:
Company
Balance Sheet
31 March
2023
£000
Restatement
£000
31 March 2023
Restated
£000
Investment in subsidiaries
210,341
82,812
293,153
Amounts owed by Group undertakings
377,785
(78,112)
299,673
Total non-current assets
592,477
4,700
597,177
Retained earnings
330,105
4,700
334,805
Equity
457,687
4,700
462,387
39. 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 2024. 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.
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.
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.
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
176
177
Notes to the Financial Statements
continued
39. Principal Accounting Policies continued
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 122 to 141. 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, Chaffe and stochastic valuation models and the resulting value is amortised through the Income Statement
over the vesting period of the share-based payments.
For the Performance Share Plan and Share Incentive Plan awards, where market conditions apply, the expense is allocated to the Income
Statement evenly over the vesting period.
For the Performance Share Plan and Share Incentive Plan awards, where non-market conditions apply, the expense is allocated, over the
vesting period, to the Income Statement based on the best available estimate of the number of awards that are expected to vest. Estimates are
subsequently revised if there is any indication that the number of awards expected to vest differs from previous estimates.
The amount charged to the Income Statement is credited to the retained earnings reserve.
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 or expected life of the assets if shorter
Plant and equipment
– 25%
Taxation
The taxation charge represents the sum of tax currently payable and deferred tax. The charge for current taxation is based on the results for the
year as adjusted for items which are non-assessable or disallowed. It is calculated using rates that have been enacted or substantively enacted
by the Balance Sheet date. Tax payable upon realisation of revaluation gains recognised in prior periods is recorded as a current tax charge with
a release of the associated deferred taxation.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the Balance Sheet
liability method.
Deferred tax liabilities are generally recognised for all taxable timing differences and deferred tax assets are recognised to the extent that it
is probable that taxable profits will be available against which deductible timing differences can be utilised. The measurement of deferred tax
assets and liabilities reflects the tax consequences of the manner in which the Group expects, at the Balance Sheet date, to recover or settle
the carrying amount of those assets and liabilities. Such assets and liabilities are not recognised if the timing differences arise from the initial
recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the assets to be recovered.
The deferred tax asset relating to share-based payment awards reflects the estimated value of tax relief available on the vesting of the awards
at the Balance Sheet date.
Deferred tax is determined using tax rates that have been enacted or substantively enacted by the Balance Sheet date and are expected to
apply when the related deferred tax asset is realised or the deferred tax liability is settled. It is recognised in the Income Statement except when
it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.
The Group recognises a deferred tax liability for all taxable timing differences associated with investments in subsidiaries, associates and
interests in joint ventures, except to the extent that both of the following conditions are satisfied:
a) the Group is able to control the timing of the reversal of the timing difference; and
b) it is probable that the timing difference will not reverse in the foreseeable future.
Dividends
Dividend distributions to the Company’s Shareholders are recognised as a liability in the financial statements in the period in which dividends
are approved.
Investment Properties
Investment properties are properties owned or leased by the Group which are held for long-term rental income and for capital appreciation.
Investment properties are initially recognised at cost, including associated transaction costs, and subsequently at fair value adjusted for the
carrying value of lease incentive and letting cost receivables. These fair values are based on market values as determined by professionally
qualified external valuers or are determined by the Directors of the Group based on their knowledge of the property. In accordance with IAS 40
Investment Property, investment properties held under leases are stated gross of the recognised lease liability.
Gains or losses arising from changes in the fair value of investment properties are recognised as gains or losses on revaluation in the Income
Statement of the period in which they arise.
In accordance with IAS 40, as the Group uses the fair value model, no depreciation is provided in respect of investment properties including
integral plant.
Property that is being constructed or developed for future use as an investment property is treated as investment property in accordance
with IAS 40.
When the Group redevelops an existing investment property for continued future use as investment property, the property remains an
investment property measured at fair value and is not reclassified. Interest is capitalised before tax relief until the date of practical completion.
Details of the valuation of investment properties can be found in Note 14.
Investment properties are derecognised on completion of sale.
Included in investment property are right-of-use assets relating to leasehold investment property.
Land and Developments
Land and developments held for sale are inventory and are included in the Balance Sheet at the lower of cost and net realisable value. Net
realisable value is the estimated selling price in the ordinary course of business less estimated costs to completion and estimated costs
necessary to make the sale.
Gross borrowing costs associated with expenditure on properties under development or undergoing major refurbishment are capitalised. The
interest capitalised is either based on the interest paid (where a project has a specific loan) or calculated using the Group’s weighted average
cost of borrowings (where there are no specific borrowings for the project). Interest is capitalised from the date of commencement of the
development work until date of practical completion.
Assets Held for Sale
Non-current assets whose disposals are considered highly probable are classified as assets held for sale. Where the non-current asset is an
investment property, it is measured in accordance with IAS 40.
Financial Assets
Financial assets do not carry any interest and are stated initially at transaction price 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.
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 and Balance
Sheet, cash and cash equivalents comprise cash in hand, deposits with banks, including rent deposits, 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.
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
178
179
Notes to the Financial Statements
continued
39. Principal Accounting Policies continued
Borrowing and Borrowing Costs
Interest bearing bank loans 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.
Borrowing costs directly attributable to the acquisition and construction of new developments and investment properties are added to the costs
of such properties until the date of completion of the development or investment. After initial recognition borrowings are carried at amortised cost.
Gains or losses on extinguishing debt are recognised in the Income Statement in the period in which they occur.
Derivative Financial Instruments
Derivative financial assets and financial liabilities are recognised on the Balance Sheet when the Group becomes a party to the contractual
provisions of the instrument.
The Group enters into derivative transactions such as interest rate swaps, caps and floors in order to manage the risks arising from its activities.
Derivatives are initially recorded at fair value and are subsequently remeasured to fair value based on market prices, estimated future cash
flows and forward rates as appropriate. Any change in the fair value of such derivatives is recognised immediately in the Income Statement.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and
substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Further information on the categorisation of financial instruments can be found in Note 37.
Leases
The Group 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.
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.
Subleases are accounted for as finance leases and included within trade and other receivables. Interest receivable on a sublease is included in
finance income. Gain/losses on entering into a sub-lease are recognised in other revenue.
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 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:
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).
Classification of 25 Charterhouse Square, EC1 as an asset held for sale as its sale was considered “highly probable” at 31 March 2024 (see Note 21).
Key Sources of Estimation Uncertainty
The key area is discussed below:
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. As the values of investments in subsidiaries by the Company are, in part, supported by the underlying subsidiary’s property
value, this is subject to the same estimation uncertainty.
Consideration has been given to climate risk but it has been concluded that it does not give rise to material new sources of estimation uncertainty.
Financial Statements
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
180
181
Notes to the Financial Statements
continued
40. Subsidiary and Related Undertakings
The Company’s subsidiary and related undertakings are listed below. Except where otherwise indicated all undertakings are incorporated,
registered and operate in the United Kingdom at 5 Hanover Square, London, W1S 1HQ.
The share capital of each of the companies, where applicable, is comprised of ordinary shares unless otherwise stated.
Company
Direct/Indirect
Ultimate %
Active subsidiaries
1
207 OLD STREET UNIT TRUST 1
Indirect
100%*
2
211 OLD STREET UNIT TRUST 1
Indirect
100%*
3
AYCLIFFE & PETERLEE DEVELOPMENT COMPANY LIMITED
#
Direct
100%
4
AYCLIFFE & PETERLEE INVESTMENT COMPANY LIMITED
#
Direct
100%
5
EMBANKMENT PLACE (LP) LIMITED 4
#
Direct
100%
6
FPM 100 NEW BRIDGE STREET LIMITED5
Indirect
100%
7
HB SAWSTON NO 3 LIMITED
#
Direct
100%
8
HELICAL BICYCLE 1 LIMITED
Direct
100%
9
HELICAL BICYCLE 2 LIMITED
Indirect
100%
10
HELICAL BICYCLE 3 LIMITED
Indirect
100%
11
HELICAL BICYCLE DEVELOPMENT LIMITED
Indirect
100%
12
HELICAL (CHART) LIMITED
#
Direct
100%
13
HELICAL (CS HOLDINGS) JERSEY LIMITED 1
Direct
100%
14
HELICAL (CS) JERSEY LIMITED 1
Indirect
100%
15
HELICAL (DALE HOUSE) LIMITED
#
Direct
100%
16
HELICAL (NQ) LIMITED
#
Direct
100%
17
HELICAL (OS HOLDCO) JERSEY LIMITED 1
Indirect
100%
18
HELICAL (POWER ROAD) LIMITED
#
Direct
100%
19
HELICAL (WHITECHAPEL) LIMITED
Indirect
100%
20
HELICAL BAR (ST VINCENT STREET) LIMITED
#
Direct
100%
21
HELICAL BAR (WALES) LIMITED
#
Indirect
100%
22
HELICAL FARRINGDON EAST (JERSEY) LIMITED 1
Direct
100%
23
HELICAL FINANCE (AV) LIMITED
#
Direct
100%
24
HELICAL FINANCE (RBS) LIMITED
Direct
100%
25
HELICAL JERSEY HOLDINGS LIMITED 1
Direct
100%
26
HELICAL JERSEY INVESTMENT HOLDINGS LIMITED 1
Direct
100%
27
HELICAL OLD STREET JERSEY HOLDINGS LIMITED 1
Direct
100%
28
HELICAL OLD STREET JERSEY LIMITED 1
Indirect
100%
29
HELICAL PLATINUM LIMITED
#
Direct
100%
30
HELICAL PROPERTIES LIMITED
Direct
100%
31
HELICAL PROPERTIES INVESTMENT LIMITED
#
Direct
100%
32
HELICAL RETAIL LIMITED
Direct
100%
33
HELICAL SERVICES LIMITED
Direct
100%
34
METROPOLIS PROPERTY LIMITED
Indirect
100%
35
OLD STREET UNITHOLDER NO 1 LIMITED 1
Indirect
100%
36
OLD STREET UNITHOLDER NO 2 LIMITED1
Indirect
100%
37
PLATINUM DEVELOPMENT LIMITED
#
Indirect
100%
38
PLATINUM MANAGEMENT LIMITED
#
Indirect
100%
# Denotes the subsidiaries that have taken exemption from audit under s479a of the Companies Act 2006.
Company
Direct/Indirect
Ultimate %
Active joint ventures
1
ABBEYGATE HELICAL (LEISURE PLAZA) LIMITED
Direct
50%
2
BARTS CLOSE OFFICE LIMITED 1
Indirect
33%
3
BARTS ONE LIMITED 1
Indirect
33%
4
BARTS SQUARE ACTIVE ONE LIMITED 1
Indirect
33%
5
BARTS SQUARE FIRST LIMITED
Indirect
33%
6
BARTS SQUARE FIRST OFFICE LIMITED 1
Indirect
33%
7
BARTS SQUARE FIRST RESIDENTIAL LIMITED 1
Indirect
33%
8
BARTS SQUARE SECOND LIMITED
Indirect
33%
9
BARTS SQUARE LAND ONE LIMITED
Indirect
33%
10
BARTS TWO LIMITED1
Indirect
33%
11
BARTS, L.P. 3
Indirect
33%
12
HASLUCKS GREEN LIMITED
Indirect
50%
13
OBC DEVELOPMENT MANAGEMENT LIMITED
Indirect
33%
14
PLATINUM HOLDCO LIMITED
Indirect
51%
15
PLATINUM KWS LIMITED
Indirect
51%
16
PLATINUM SOUTHWARK LIMITED
Indirect
51%
17
PLATINUM PADDINGTON LIMITED
Indirect
51%
18
SHIRLEY ADVANCE LLP
Indirect
50%
19
CHARTERHOUSE PLACE LIMITED
Indirect
50%
20
CHARTERHOUSE STREET LIMITED2
Indirect
50%
Dormant subsidiaries and joint ventures
1
ABBEYGATE HELICAL (C4.1) LLP
Direct
50%
2
G2 ESTATES LIMITED
Direct
100%
3
HB SAWSTON NO. 1 LIMITED
Direct
100%
4
HB SAWSTON NO. 2 LIMITED
Direct
100%
5
HB SAWSTON NO. 4 LIMITED
Direct
100%
6
HELICAL (CHURCHGATE) LIMITED
Indirect
100%
7
HELICAL (HAILSHAM) LIMITED
Indirect
100%
8
HELICAL (LB) LIMITED
Direct
100%
9
HELICAL (WEST LONDON) LIMITED
Direct
100%
10
HELICAL BAR (DRURY LANE) LIMITED
Direct
100%
11
HELICAL BAR DEVELOPMENTS (SOUTH EAST) LIMITED
Direct
100%
12
HELICAL BAR DEVELOPMENTS LIMITED
Direct
100%
13
HELICAL BAR LIMITED
Direct
100%
14
HELICAL BAR TRUSTEES LIMITED
Direct
100%
15
HELICAL GROUP LIMITED
Direct
100%
16
HELICAL REGISTRARS LIMITED
Direct
100%
17
ROPEMAKER PARK MANAGEMENT COMPANY LIMITED
Indirect
100%**
18
SCBP MANAGEMENT COMPANY LIMITED
Indirect
75%
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.
5 PO Box 146, Level 2 Park Place, St Peters Port, Guernsey, GY1 3HZ.
Notes:
* No shares in issue in the Unit Trusts. The registered office address is that of the appropriate trustee.
** Limited by guarantee.
Additional Information
Helical plc — Annual Report and Accounts 2024
183
Helical plc — Annual Report and Accounts 2024
182
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:
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Gross rental income
– subsidiaries
27,514
36,555
– joint ventures
2,004
287
Total gross rental income
29,518
36,842
Rents payable
– subsidiaries
(224)
(157)
Property overheads
– subsidiaries
(2,580)
(2,092)
– joint ventures
(1,209)
(1,103)
See-through net rental income
25,505
33,490
See-Through Net Development Property Profits
Helical’s share of development property profits from property assets held in subsidiaries and in joint ventures is shown in the table below:
Year ended
31.3.24
£000
Year ended
31.3.23
£000
In parent and subsidiaries
(246)
2,005
In joint ventures
659
1,262
Total gross development property profit
413
3,267
Provision
– subsidiaries
–
(30)
See-through development property profits
413
3,237
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:
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Revaluation (deficit)/surplus on investment properties
– subsidiaries
(181,213)
(97,854)
– joint ventures
(5,933)
5,095
Total revaluation deficit
(187,146)
(92,759)
Net (loss)/gain on sale of investment properties
– subsidiaries
–
4,564
– joint ventures
(1,468)
66
Total net (loss)/gain on sale of investment properties
(1,468)
4,630
See-through net (loss)/gain on sale and revaluation of investment properties
(188,614)
(88,129)
Appendix 1 – See-through analysis
See-Through Administration Expenses
Helical’s share of the administration expenses incurred in subsidiaries and joint ventures is shown in the table below:
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Administration expenses
– subsidiaries
9,731
9,845
– joint ventures
338
459
Total administration expenses
10,069
10,304
Performance related awards, including NIC
– subsidiaries
1,280
2,990
Total performance related awards, including NIC
1,280
2,990
See-through administration expenses
11,349
13,294
See-Through Net Finance Costs
Helical’s share of the interest payable, finance charges, capitalised interest and interest receivable on bank borrowings, bonds and cash
deposits in subsidiaries and in joint ventures is shown in the table below:
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Interest payable on bank loans and overdrafts
– subsidiaries
5,493
8,284
– joint ventures
3,012
2,703
Total interest payable on bank loans and overdrafts
8,505
10,987
Other interest payable and similar charges
– subsidiaries
3,115
2,908
– joint ventures
211
203
Interest capitalised
– joint ventures
–
(1,815)
Total finance costs
11,831
12,283
Interest receivable and similar income
– subsidiaries
(661)
(274)
– joint ventures
(43)
(23)
See-through net finance costs
11,127
11,986
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:
31.3.24
£000
31.3.23
£000
Investment property fair value
– subsidiaries
479,600
693,550
– joint ventures
138,250
145,975
Assets held for sale
– subsidiaries
42,761
–
Total investment property fair value
660,611
839,525
Land and development property
– subsidiaries
28
28
– joint ventures
1,321
539
Total land and development property
1,349
567
Land and development property surplus
– subsidiaries
302
302
Total land and development property at fair value
1,651
869
See-through property portfolio
662,262
840,394
Additional Information
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
184
185
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:
31.3.24
£000
31.3.23
£000
Gross borrowings more than one year
– subsidiaries
227,634
226,677
Total gross borrowings in parent and subsidiaries
227,634
226,677
Gross borrowings more than one year
– joint ventures
65,644
59,416
Total gross borrowings in joint ventures
65,644
59,416
Cash and cash equivalents
– subsidiaries
(28,633)
(50,925)
– joint ventures
(3,064)
(3,749)
Total cash and cash equivalents
(31,697)
(54,674)
See-through net borrowings
261,581
231,419
See-Through Gearing and Loan to Value
31.3.24
£000
31.3.23
£000
See-through property portfolio
662,262
840,394
See-through net borrowings
261,581
231,419
Net assets
401,075
608,675
See-through gearing
65.2%
38.0%
See-through loan to value
39.5%
27.5%
Pro-forma see-through loan to value (Note 34)
28.7%
–
Appendix 1 – See-through analysis
continued
Total Accounting Return
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Brought forward IFRS net assets
608,675
687,043
Carried forward IFRS net assets
401,075
608,675
Decrease in IFRS net assets
(207,600)
(78,368)
Dividends paid
14,423
13,842
Total Accounting Return
(193,177)
(64,526)
Total Accounting Return percentage
(31.7)%
(9.4)%
Total Accounting Return on EPRA Net Tangible Assets
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Brought forward EPRA net tangible assets
613,455
713,279
Carried forward EPRA net tangible assets
406,468
613,455
Decrease in EPRA net tangible assets
(206,987)
(99,824)
Dividends paid
14,423
13,842
Total Accounting Return on EPRA net tangible assets
(192,564)
(85,982)
Total Accounting Return percentage on EPRA net tangible assets
(31.4)%
(12.1)%
Total Property Return
Year ended
31.3.24
£000
Year ended
31.3.23
£000
See-through net rental income
25,505
33,490
See-through development property profits
413
3,237
See-through revaluation deficit
(187,146)
(92,759)
See-through net (loss)/gain on sale of investment properties
(1,468)
4,630
Total Property Return
(162,696)
(51,402)
Appendix 2 – Total Accounting Return and Total Property Return
Additional Information
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
186
187
Income Statements
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Year ended
31.3.22
£000
Year ended
31.3.21
£000
Year ended
31.3.20
£000
Revenue
39,905
49,848
51,146
38,596
44,361
Net rental income
24,710
34,306
31,086
24,965
27,838
Development property (loss)/profit
(246)
2,005
3,519
678
2,076
(Provisions)/reversal of provisions
–
(30)
2,285
(82)
1,198
Share of results of joint ventures
(9,310)
3,494
20,708
2,352
13,396
Other operating income
991
–
28
48
88
16,145
39,775
57,626
27,961
44,596
Gain/(loss) on sale of investment properties
–
4,564
(45)
(1,341)
(1,272)
Revaluation (deficit)/surplus on investment properties
(181,213)
(97,854)
33,311
19,387
38,351
Administrative expenses excluding performance related awards
(9,731)
(9,845)
(9,598)
(9,276)
(10,524)
Performance related awards (including NIC)
(1,280)
(2,990)
(7,170)
(5,140)
(6,191)
Finance costs
(8,608)
(11,192)
(19,234)
(14,079)
(16,100)
Finance income
661
274
6
58
1,345
Change in fair value of derivative financial instruments
(5,609)
12,757
17,996
2,938
(7,651)
Change in fair value of Convertible Bond
–
–
–
–
468
Foreign exchange gains
–
–
–
–
8
(Loss)/profit before tax
(189,635)
(64,511)
72,892
20,508
43,030
Tax on (loss)/profit on ordinary activities
(179)
–
16,002
(2,631)
(4,313)
(Loss)/profit after tax
(189,814)
(64,511)
88,894
17,877
38,717
Balance Sheets
31.3.24
£000
31.3.23
£000
31.3.22
£000
31.3.21
£000
31.3.20
£000
Investment portfolio at fair value
479,600
693,550
961,500
756,875
836,875
Land, trading properties and developments
28
28
2,089
448
852
Assets held for sale
42,761
–
–
–
–
Group’s share of investment properties held by joint ventures
138,250
145,975
135,820
82,516
76,809
Group’s share of land, trading and development properties held
by joint ventures
1,321
539
8,349
16,545
34,164
Group’s share of land and development property surpluses
302
302
302
578
578
Group’s share of total properties at fair value
662,262
840,394
1,108,060
856,962
949,278
Net debt
199,001
175,752
353,149
169,476
273,598
Group’s share of net debt of joint ventures
62,580
55,667
35,111
11,688
24,933
Group’s share of net debt
261,581
231,419
388,260
181,164
298,531
Net assets
401,075
608,675
687,043
608,161
598,689
EPRA net tangible assets value
406,468
613,455
713,279
658,663
640,424
Dividend per ordinary share paid
11.55p
11.30p
10.30p
8.70p
10.20p
Dividend per ordinary share declared
4.83p
11.75p
11.15p
10.10p
8.70p
EPRA earnings/(loss) per ordinary share
3.5p
9.4p
5.2p
(1.8)p
7.6p
EPRA net tangible assets per share
331p
493p
572p
533p
524p
Appendix 3 – Five year review
London Portfolio – Investment Properties
Property
Description
Area sq ft
(NIA)
Vacancy rate at
31.3.24
%
Vacancy rate at
31.3.23
%
Completed properties
The Warehouse & Studio, The Bower, EC1
Multi-let office building
151,439
0.0
0.0
The Tower, The Bower, EC1
Multi-let office building
182,193
16.0
0.0
The Loom, E1
Multi-let office building
108,540
34.9
28.4
The JJ Mack Building, EC1
Multi-let office building
206,085
32.7
81.6
25 Charterhouse Square, EC1
Multi-let office building
42,921
15.2
15.2
The Power House, W4
Single-let recording studios/office building
21,268
0.0
0.0
712,446
17.6
19.8
Development pipeline
100 New Bridge Street, EC4
Single-let office building
167,0261
100.0
2.6
879,472
37.6
16.1
1 192,000 sq ft office redevelopment consented.
Appendix 4 – Property portfolio
Additional Information
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
188
189
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
Note
31.3.24
31.3.23
EPRA Earnings per share
Earnings per share from operational activities.
13
3.5p
9.4p
EPRA NRV
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.
35
349p
516p
EPRA NTA
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.
35
331p
493p
EPRA NDV
EPRA NAV adjusted to include the fair values of financial instruments, debt and
deferred taxes.
35
327p
490p
EPRA NIY
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.
3.5%
3.9%
EPRA Topped Up NIY
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).
5.1%
4.0%
EPRA Vacancy Rate
Estimated Market Rental Value (ERV) of vacant space divided by ERV of the whole
portfolio.
12.6%
16.3%
EPRA Cost Ratios
(including direct vacancy costs)
Administrative and operating costs (including vacancy costs) divided by the gross
rental income.
56.8%
39.5%
EPRA Cost Ratios
(excluding direct vacancy costs)
Administrative and operating costs (excluding vacancy costs) divided by the gross
rental income.
50.1%
35.7%
EPRA LTV
Debt divided by market value of the property.
41.1%
29.0%
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
31.3.24
£000
31.3.23
£000
Investment property at fair value
– subsidiaries
479,550
693,400
– joint ventures
138,250
141,250
Less: Undeveloped land
(100)
(100)
Completed property portfolio
617,700
834,550
Allowance for estimated purchaser’s costs of 6.8%
42,004
56,749
Gross up completed property portfolio
659,704
891,299
Passing rent net of head rents
23,281
34,808
EPRA NIY
3.5%
3.9%
Topped up annualised net rents
32,998
36,060
EPRA Topped Up NIY
5.1%
4.0%
Excludes non-core properties and Barts Square Retail
EPRA Vacancy Rate
31.3.24
£000
31.3.23
£000
ERV of vacant space
7,674
9,857
ERV of total portfolio
60,767
60,408
EPRA Vacancy Rate
12.6%
16.3%
Appendix 5 – EPRA performance measures
EPRA Cost Ratios
31.3.24
£000
31.3.23
£000
Administrative expenses
11,011
12,835
Property overheads (including ground rents payable)
2,580
2,249
Head rents payable
(224)
(156)
Development management fees
860
(858)
Share of joint ventures’ expenses
1,547
400
EPRA costs including direct vacancy costs
15,774
14,470
Direct vacancy costs
(1,840)
(1,363)
EPRA costs excluding direct vacancy costs
13,934
13,107
Gross rental income
27,514
36,555
Head rents payable
–
(156)
Share of joint ventures’ rental income less head rents
279
287
Adjusted gross rental income
27,793
36,686
EPRA cost ratio including direct costs
56.8%
39.5%
EPRA cost ratio excluding direct costs
50.1%
35.7%
EPRA LTV
31.3.24
£000
31.3.23
£000
Borrowings
– subsidiaries
227,634
226,677
– joint ventures
65,644
59,416
Net payables
– subsidiaries
6,653
6,298
– joint ventures
1,220
2,606
Owner occupied property
– subsidiaries
3,569
4,082
Cash
– subsidiaries
(28,633)
(50,925)
– joint ventures
(3,064)
(3,749)
Net debt
273,023
244,405
Owner occupied property
– subsidiaries
2,632
2,980
Investment properties
– subsidiaries
479,600
693,550
– joint ventures
138,250
145,975
Asset held for sale
– subsidiaries
42,761
–
Stock
– subsidiaries
330
330
– joint ventures
1,321
538
Total property value
664,894
843,373
LTV
41.1%
29.0%
Below is a table setting out in greater detail the types of capital expenditure made by the Group during the year:
Year ended
31.3.24
£000
Year ended
31.3.23
£000
Existing portfolio
16,038
10,509
Total capital expenditure
16,038
10,509
There were no (2023: nil) new investment properties purchased during the year. All of the expenditure on the existing portfolio was made on the
London portfolio.
Additional Information
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
190
191
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 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 35).
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 35).
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 35).
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.
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 35).
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.
Additional Information
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
192
193
Shareholder information
Website
The report and financial statements, a list of properties held by the
Group, Company presentations, press releases, the financial calendar
and other information on the Group are available on our website at
www.helical.co.uk
Registrar
All general enquiries concerning holdings of ordinary shares in
Helical plc should be addressed to the Company’s Registrar:
Equiniti
Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA
United Kingdom
Telephone: 0371 384 2030*
From outside the UK: +44 371 384 2030
Website: www.shareview.co.uk
Email: help.shareview.co.uk
* Calls are charged at the standard geographic rate and will vary by provider. Lines are open
between 8:30am – 5:30pm Monday to Friday excluding public holidays in England and
Wales, if calling from outside the UK; calls will be charged at the applicable international rate.
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 Group, including Annual Reports and
notices of general meetings, via the Shareholder portal. Further to
a letter of deemed consent sent to Shareholders on 20 March 2023,
Shareholders are notified by post by default when notices,
documents and information from the Group are available on the
website at www.helical.co.uk. If you wish to be notified by email each
time the Group 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.shareview.co.uk. Once you have registered,
click on the “My details” 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.shareview.co.uk. Under this
arrangement dividend confirmations are sent to the Shareholder’s
registered address.
Dividends for Shareholders resident outside the UK
Instead of waiting for a sterling cheque to arrive by mail, you can ask
us to send your dividends direct to your bank account. For
information, please contact the Company’s Registrar.
Dividend Reinvestment Plan (“DRIP”)
The Group offers Shareholders the option to participate in a DRIP.
This enables Shareholders to reinvest their cash dividends in
Helical plc shares.
For further details, contact the Group’s Registrar (on +44 (0)371 384
2268* or email help.shareview.co.uk) or complete an application form
online at: www.shareview.co.uk
* Calls are charged at the standard geographic rate and will vary by provider. Lines are
open between 8:30am – 5:30pm Monday to Friday excluding public holidays in England
and Wales, if calling from outside the UK; calls will be charged at the applicable
international rate.
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 our registrar Equiniti.
For further information on this service or to buy and sell shares online,
please visit www.shareview.co.uk or call 03456 037 037 *.
* 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 2024
were as follows:
Dividend
Record date
2023
Payment date
2023
Amount
2022-23 Final
23 June
28 July 2023
8.70p
2023-24 Interim
1 December
12 January 2024
3.05p
Dividend payment dates in 2024/25 will be as follows:
Dividend
Record date
2024
Payment date
Amount
2023-24 Final
28 June
2 August 2024
1.78p
2024-25 Interim
December
January 2025
TBC1
1 The amount of the 2024–25 interim dividend will be announced in November 2024.
Financial calendar and advisors
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
Registrar, Equiniti, on 0371 384 2030 (email: help.shareview.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. 00156663
Calendar 2024–2025
2024
27 June 2024
Ex-dividend date for final ordinary dividend
28 June 2024
Record date for final ordinary dividend
12 July 2024
Last day for DRIP elections
17 July 2024
Annual General Meeting
2 August 2024
Final ordinary dividend payable
November 20241
Half Year Results and interim ordinary dividend announced
December 20242
Ex-dividend date for interim ordinary dividend
December 20242
Registration qualifying date for interim ordinary dividend
2025
January 20252
Interim ordinary dividend payable
May 2025
Announcement of Full Year Results to 31 March 2025
Notes
1 The announcement date of the Half Year Results will be confirmed in October 2024.
2 Dates for the potential interim dividend will be confirmed in the Half Year Results
Announcement.
Advisors
Registrar
Equiniti
Bankers
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
Deutsche Numis
Auditor
RSM UK Audit LLP
Corporate solicitors
Clifford Chance LLP
Mishcon de Reya LLP
Contact details
Helical plc
Registered in England
and Wales No.00156663
Registered Office
5 Hanover Square
London W1S 1HQ
T: 020 7629 0113
F: 020 7408 1666
E: reception@helical.co.uk
www.helical.co.uk
Additional Information
Helical plc — Annual Report and Accounts 2024
Helical plc — Annual Report and Accounts 2024
194
195
Notes
This report is printed on paper certified in accordance with the FSC®
(Forest Stewardship Council®) and is recyclable and acid-free. Pureprint Ltd
is FSC certified and ISO 14001 certified showing that it is committed to all round
excellence and improving environmental performance is an important part of this
strategy. Pureprint Ltd aims to reduce at source the effect its operations have on
the environment and is committed to continual improvement, prevention of
pollution and compliance with any legislation or industry standards.
Pureprint Ltd is a Carbon / Neutral® Printing Company.
Designed and produced by SampsonMay
Telephone: 020 7403 4099
www.sampsonmay.com
Helical plc — Annual Report and Accounts 2024
196
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
helical.co.uk
Helical plc
@helicalplc