U and I Group PLC Annual Report 2019

FY2019 Annual Report · U and I Group PLC
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REGENERATIONRETHOUGHTAnnual Report and Accounts 2019EVERYTHING IS CONNECTEDWe have developed a comprehensive suite of communications to keep our stakeholders up to date.Financial statements157  Independent Auditors’ Report to the Members of U and I Group PLC166  Consolidated Statement of Comprehensive Income167 Consolidated Balance Sheet168  Consolidated Statement of Changes in Equity169 Consolidated Cash Flow Statement 170  Notes to the Consolidated Financial Statements 214 Company Balance Sheet215  Company Statement of Changes in Equity216  Notes to the Company Financial StatementsAdditional information226 Financial calendar and advisorsOverview1 Regeneration rethought3 FY2019 performanceStrategic report4 Chairman’s Q&A10 The ﬁve things that make us distinctive16 Chief Executive Ofﬁcer’s statement24 Portfolio review34 Special report – what great looks like42 Our market50 Our integrated business model52 Our strategy56 Key performance indicators60 Stakeholder engagement74 Sustainability review82 Principal risks and uncertainties86 Viability statement87 Financial reviewGovernance94  Chairman’s introduction to corporate governance98 Board of Directors102 Board statements 104 Leadership 112 Effectiveness116 Nomination Committee Report120 Accountability 121 Audit and Risk Committee Report 127  Relations with Shareholders and Stakeholders131  Annual Statement from the Remuneration Committee Chairman132 Remuneration at a glance 135 Annual Remuneration Report 145 Remuneration Policy149 Directors’ Report156 Statement of Directors’ ResponsibilitiesThe role of this reportWe believe the role of the Annual Report is to explain to shareholders how we create long-term sustainable value and to state our understanding and position on key topics such as: –Our market –Our strategy –Sustainability –Risk and uncertainties –Governance –Our performance and ﬁnancial positionCorporate websiteThe most up to date news, views, ﬁgures and insights on our business can be found at: www.uandiplc.comInvestor presentationsWe report our ﬁnancial results on a half yearly basis. The latest presentations can be found at: www.uandiplc.com/investors1Preston Barracks, BrightonFor the thirteen month period to 31 March 201922 May 2019Front cover imageCreating a sustainable business for the future, encouraging wellbeing and community across our schemes, as seen with over 100 elm trees planted at Circus Street in Brighton.Front cover quotesSelection from various stakeholders.REGENERATIONRETHOUGHTAnnual Report and Accounts 2019REGENERATIONRETHOUGHTAnnual Report and Accounts 2019REGENERATION

Trust and reputation are 
essential to successful 
mixed-use regeneration. 
Our clear purpose drives 
our performance.

We are a property developer and investor 
focused on regenerating overlooked and 
underloved urban places. 

Using our expertise in planning, 
development and asset management, 
our understanding of what places can 
be and our determination to build a 
better future, we create quality mixed-
use places where businesses and 
communities can thrive.

We have a >£11 billion portfolio 
of mixed-use, community-focused 
regeneration projects in the London 
City Region (within one hour’s commute 
from Central London), Manchester 
and Dublin. We have built strong 
relationships in each of these regions, 
giving us a deep understanding of 
local needs.

 OUR
 PURPOSE:

TO UNLOCK LONG-TERM  
VALUE FOR ALL THROUGH 
REGENERATION.

This page:
Thomas Hoyle established a calico fabric printing 
business at Mayﬁeld, Manchester. This pattern is 
based on one of his cylinder printed original designs.

Cover:
Mel Hickford, on the ground support at our 
Worthwhile projects in Brighton, providing local 
knowledge and opening up conversations with 
the community.

Cover quote:
Jason Kitcat, leader of Brighton & Hove City Council.

 DRIVES
 PERFORMANCE

A BUSINESS WITHOUT PURPOSE WILL BECOME 
WORTHLESS OVER TIME.

OUR PURPOSE AND OUR VALUES OF IMAGINATION, 
INTELLIGENCE AND AUDACITY INFUSE OUR 
PROJECTS AND BRING THEM TO LIFE.

UNDERSTANDING AND MEETING THE NEEDS OF 
ALL OUR STAKEHOLDERS IS KEY. AS A RESULT, WE 
KNOW THAT PERFORMANCE CAN NO LONGER BE 
DESCRIBED OR REPORTED IN PURELY MONETARY 
TERMS, BUT IN DELIVERY AND ACTIONS TOO.

SINCE WE WERE FORMED, OUR PURPOSE HAS 
HELPED DRIVE SUSTAINABLE LONG-TERM SOCIO-
ECONOMIC VALUE FOR OUR COMMUNITIES AND 
PARTNERS, WHILST DELIVERING FINANCIAL 
RETURNS FOR OUR SHAREHOLDERS.

We also organised 
open-air cinema nights 
in the car park, helped 
paint and repair the local 
school and restored the 
gardens at St Mark’s 
Church. Over time, we 
gained people’s trust. 

Construction challenges 
and delays meant it 
wasn’t always easy. But 
it has been worth it as 
our ﬁnal scheme reﬂects 
the area’s hopes and 
expectations, with a 
nine-screen cinema, 
an upper and lower plaza 
with a hotel, public art, 
restaurants, much 
needed homes 
(including affordable 
properties) and parking.

ST. MARK’S SQUARE,
BROMLEY
London City Region

We were appointed 
by Bromley Council 
to bring life to Bromley 
South and make it a 
destination of choice, 
addressing the urgent 
need for local amenities 
and creating a 
connection with the 
High Street.

How we engaged 
We wanted to create 
something authentic 
that worked for every 
generation – so we 
spoke to local people 
to see what that meant. 
We held regular 
consultations with 
community stakeholders 
to hear their requirements 
and address their 
concerns. 

 BUILDS TRUST 
 WITH ALL OUR 
 STAKEHOLDERS

Open-air cinema nights
We held open-air cinema nights in the original site’s 
car park to give the local community an early 
glimpse into what the new scheme would offer.

Artist Steven Gregory’s ‘One of Us on a Tricycle’ 
sculpture sits at the heart of our St Mark’s Square 
development at Bromley.

LANDMARK COURT,
SOUTHWARK
London City Region

Widely considered too 
complex, this 1.7-acre 
site lay derelict and 
unloved for over 25 years. 
We were appointed by 
Transport for London as 
their conditional joint 
venture partner to create 
a high-quality, mixed-
use development that 
would stitch this prime 
location in London’s 
Zone 1 back together.

How it worked
Following extensive 
consultation with the 
local community, 
councillors, interest 
groups and key 
stakeholders, as well 
as onsite activities, 
workshops and events, 
in March 2019 we 
submitted our plan that 
respects the area’s rich 
heritage and culture. 

Recreating Landmark 
Court’s historic lanes 
and yards, our 
development will 
provide much needed 
homes, ofﬁces and retail 
space, along with a new 
marketplace, for this 
close-knit community, 
whilst protecting and 
enhancing neighbouring 
Crossbones Graveyard. 

 BRINGS US 
 CLOSER TO 
 PEOPLE

Active engagement
One of our consultations with local stakeholders 
to ensure we understand and reﬂect their multi-
generational needs, as well as the soul and rich 
history of the area, in the ﬁnal scheme.

Donations box at Crossbones Graveyard, which 
we are looking to enhance as part of our Landmark 
Court scheme.

PRESTON BARRACKS,
BRIGHTON
London City Region

Derelict for over 
20 years, and with a 
history dating back to 
1793, we are working 
with Brighton & Hove 
City Council and the 
University of Brighton 
to bring the site’s rich 
and vibrant past into 
our £200 million Gross 
Development Value 
(GDV) scheme.

How history can inform 
the future 
Restoring memories of 
the past, when Allenwest 
Brighton electricals used 
to be the pride of the 
area, our mixed-use 
project focuses on 
bringing jobs and 
economic prosperity 
to one of the UK’s most 
deprived areas – 
establishing Lewes 
Road as a thriving 
academic and economic 
corridor in Brighton.

Alongside vital university 
accommodation, homes, 
amenities and green 
space, in early 2020 we 
will launch Plus X, an 
innovation hub providing 
much-needed ﬂexible 
work space and 
mentoring to accelerate 
the growth of young 
start-ups in the 
Brighton area.

 BRINGS LIFE TO 
 UNDERESTIMATED 
 URBAN PLACES

Restoring the heartbeat of Lewes Road
The original Preston Barracks army base and military 
hospital was built in the 1700s as part of the British 
response to the French Revolution. Breathing new 
life into this site, our mixed-use scheme will inject 
more than £280 million into the local economy over 
the next ten years.

U+I’S PPP CAMPAIGN

While 78% of the 
general public believe 
public assets should 
be put to work for 
community beneﬁt, 
around 45% feel 
negatively about the 
use of Public Private 
Partnerships (PPP) 
to develop publicly 
owned land.

We believe in the power 
of these partnerships to 
deliver lasting value and 
beneﬁts for both people 
and places.

Challenging norms
We wanted to restore 
trust in PPP and drive 
new industry standards 
so we undertook 
extensive research, 
consultation and a 
listening programme 
with the public, private 
and civic sectors. 

With widespread 
support, including from 
Minister for Local 
Government Rishi Sunak 
MP, we have put our 
ﬁndings and commitments 
in a paper: PPP – The 
Reset. We expect this to 
enhance transparency, 
hold our PPP projects to 
account and encourage 
others to follow our lead. 

This led to us being 
shortlisted for the 
Irvine Sellar Award for 
Innovation, for ground-
breaking projects 
that have shaken up 
an industry.

 CHALLENGES 
 EVERYTHING

Helping shape the future
One of our PPP round table discussion events in 
London to ﬁnd ways to bring together the public 
and private sectors to focus on one thing: improving 
people’s lives.

“
WHY WOULDN’T WE WANT 
TO GIVE A MAJOR ROLE IN
SHAPING SCHEMES TO 
COMMUNITIES?

WHY WOULDN’T WE WANT TO 
TAP INTO THEIR KNOWLEDGE, 
THEIR UNDERSTANDING, 
THEIR PRIDE?
”

Matthew Weiner
Chief Executive

The power of art to drive change. A Banksy which 
appeared overnight on a wall in Southampton and 
immediately increased footfall to the area.

The role of the Board
Our values of imagination, 
intelligence and audacity 
are endorsed by the 
Board as they challenge 
our business to keep 
improving. 

Our new independent 
Non-executive Director 
Professor Sadie 
Morgan, who was 
appointed in April 2019, 
will oversee a workforce 
advisory panel to 
encourage closer 
collaboration across 
our business.

THE IMPORTANCE OF 
GREAT PEOPLE

Our best work comes 
when our team have 
a shared purpose and 
enjoy what they do. 
We encourage curiosity 
and creativity, giving 
people opportunities 
to collaborate on 
ambitious and rewarding 
projects that transform 
communities. 

How we develop our 
people
We want to retain and 
develop our talent, 
hiring the best people 
and giving them the 
training and support to 
allow them to ﬂourish. 
Following feedback 
from our team, we have 
identiﬁed the need for 
additional training. We 
therefore began rolling 
out a new talent 
programme in April 2019 
to upskill and motivate 
our people in all that 
they do.

 CREATES AN 
 INSPIRING 
 CULTURE

First Thursday
Every month the full U+I team comes together, to 
provide updates, share successes and learnings 
and encourage collaborative thinking.

Photographer: Leigh Anderson

CIRCUS STREET, 
BRIGHTON
London City Region

Inspired by its heritage 
as a municipal market, 
our £130 million GDV 
scheme seeks to create 
a productive, sustainable 
model of city life – one 
with a real sense of 
community and social 
responsibility. 

How we think for the 
long-term 
Starting with a single 
elm tree, planted when 
we ﬁrst opened up this 
long-term derelict 
2.4-acre site for events, 
we hand-picked a 
further 100 trees. 

These trees form part 
of a public realm within 
the site, made up of 
university student 
accommodation, homes, 
an ofﬁce and a new 
home for South East 
Dance, which will 
welcome c.17,000 local 
people through its doors 
each year. 

Why sustainability 
is important and the 
value it creates
Working with local 
businesses to source 
the bricks and cement 
for this BREEAM-
excellent development, 
our ﬁnal mixed-use 
creative scheme will 
provide over 400 new 
jobs and add more than 
£200 million of gross 
value to the local 
economy over the next 
ten years.

 ENSURES WE 
 DO THE RIGHT 
 THING

An authentic approach
Reﬂecting Brighton’s creative identity and to show 
the community the potential of the space, we 
installed an Anish Kapoor sculpture at Circus Street. 
This thinking followed through to the scheme 
currently being built, where we are creating a new 
home for South East Dance.

Vasnica Srishinkar, a student at South East Dance 
photographed at Circus Street where construction is 
underway to deliver the arts charity’s new home, called 
The Dance Space.

THE OLD VINYL FACTORY, 
HAYES
London City Region

The Old Vinyl Factory, 
the former EMI 
headquarters, is a truly 
special place full of 
architectural, cultural 
and industrial history 
spanning 17 acres. 

100 years of history, 
remastered
We are delivering over 
650 homes, c.500,000 
sq.ft. of ofﬁce space, 
a cinema, health centre, 
University Technical 
College, 60,000 sq.ft. 
of retail and leisure, 
landscaped streets with 
over 250,000 sq.ft. of 
quality public realm and 
a pioneering Central 
Research Laboratory 
providing co-working 
space and support for 
innovative local start-ups. 

There will be new public 
artwork in the year 
ahead too, honouring 
the site’s rich history, 
to complement the 
iconic 5.5 metre tall 
Nipper the dog statue 
so closely associated 
with HMV and 3 metre 
tall gramophone seating.

 SHOWS US 
 WHAT GREAT 
 LOOKS LIKE

Mirroring history
On Captain Scott’s Terra Nova expedition they took 
two HMV gramophones to boost the team’s morale. 
Our scheme at The Old Vinyl Factory embodies the 
rich history of the site, whilst encouraging wellbeing, 
with the creation of outdoor spaces, ﬁlled with 
striking installations – like the gramophone seating.

Real estate is a platform 
for innovation. Done 
well, a building is more 
than just four walls – it is 
a place that can inspire, 
motivate and drive 
people, promoting 
happiness, learning and 
greater productivity. 

We consider our work 
to be a privilege. We 
seek out the potential 
in overlooked spaces, 
collaborating with 
communities to create 
a shared vision and use 
our planning expertise 
and creative ﬂair in 
regeneration to activate 
and breathe new life 
into places. 

From here, talent can be 
nurtured, communities 
can thrive and innovation 
can ﬂourish. 

Each project we 
complete is a chance 
to deliver against our 
promises and to reﬂect, 
so we can learn from 
our experiences and 
keep improving.

Building on the success 
of Central Research 
Laboratory at The Old 
Vinyl Factory in Hayes, 
in 2020 we will launch 
a new innovation hub 
called Plus X at Preston 
Barracks in Brighton, 
helping to nurture 
upcoming talent, 
inspired by the spaces 
they work in. This is just 
the start as we plan to 
develop this concept 
further at other major 
regeneration projects. 

 INFORMS OUR 
 FUTURE

Plus X
Construction is well underway at Plus X in Preston 
Barracks as we remain on track to launch the new 
innovation hub in 2020.

“
WE CONTINUE TO LOOK 
FOR PLACES THAT HAVE 
UNTAPPED POTENTIAL, 
WHERE WE HAVE THE 
VISION, CREATIVITY AND 
EXPERTISE TO UNLOCK 
THEIR VALUE AND DELIVER 
POSITIVE CHANGE FOR 
THE LONG TERM.
”

Matthew Weiner
Chief Executive, U+I

REGENERATION
RETHOUGHT

For the latest on U+I 
and our mixed-use 
regeneration work go to 
www.uandiplc/our-places

RETHOUGHT

Some years ago  
we decided to do 
something radical.

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REGENERATION RETHOUGHT:
WHAT DOES THIS MEAN?

Some years ago we realised there was 
a need and an opportunity to oﬀer 
something distinctive: genuinely great 
places that would improve the quality of 
people’s lives and deliver for our investors.

We knew we had to be radical so, over time, 
we deﬁned our beliefs, our culture and, 
most importantly, what our purpose had to 
be: to unlock long-term value for all through 
regeneration. This has driven us ever since.

Our progress is built on trust and a reputation 
for getting things done. We build strong 
partnerships, focusing on areas we know 
well. We take time to really understand 
the potential of each place. We challenge 
the status quo to ensure our schemes will 
meet the hopes and needs of the local 
communities, whilst respecting and 
celebrating the true heritage and culture 
of the places where we work.

1  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
REGENERATION RETHOUGHT
CONTINUED

We create value through regeneration: 
developing projects with long-term 
capital partners, selling land or retaining 
elements of developed assets in our 
investment portfolio. 

We have a >£11 billion portfolio 
of mixed-use, community-focused 
regeneration projects in the London City 
Region, Manchester and Dublin, where 
we have built strong relationships that 
give us a detailed understanding of 
local needs. 

Driven by our purpose, we continued to 
build a creative and distinctive business 
over the year, focused on delivering on our 
strategy to provide long-term socio-
economic beneﬁts for the communities 
in which we work and sustainable returns 
to our shareholders.

2  |  U and I Group PLC
Annual Report & Accounts 2019

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FY2019 PERFORMANCE

OUR KEY PERFORMANCE INDICATORS
Our ﬁnancial performance is driven by our purpose-led 
approach to doing business.

Development and trading gains* 
£m

Investment portfolio total return 
%

£42.8m

-37%

68.3

-1%

-110%

10.1

51.1

45.7

42.8

35.0

*  Alternative performance measure

2015

2016

2017

2018

2019

2018

2019

-1.0

Total return 
%

0.9%

-93%

Basic NAV per share
pence

12.2

289p

-5%

291

278

276

303

289

10.0

7.2

0.2

0.9

2015

2016

2017

2018

2019

2015

2016

2017

2018

2019

Total dividend per share
pence

10.0p

-44%

17.9

13.9

13.9

There’s more about our 
performance and approach 
on the following pages:

Chief Executive Ofﬁcer’s 
statement 
Page 16

10.0

8.7

Portfolio review 
Page 24

Financial review 
Page 87

2015

2016

2017

2018

2019

3  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
CHAIRMAN’S Q&A

6 BIG 
QUESTIONS
FROM FY2019

4  |  U and I Group PLC
Annual Report & Accounts 2019

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6 BIG 

QUESTIONS
FROM FY2019

5  |  U and I Group PLC
Annual Report & Accounts 2019

PETER WILLIAMS, 
CHAIRMAN 

 
 
 
Q.HOW HAS U+I PERFORMED THIS YEAR?A.U+I have delivered £42.8 million of development and trading gains, against our £45–50 million target. This is, in my view, a robust performance in these markets, where economic sentiment has deteriorated, political uncertainty has increased and decision-making has slowed dramatically. These market challenges have also created opportunities for us as we have built a rich pipeline of both short and long-term opportunities. It hasn’t always been easy and not everything goes to plan, as we saw at Bromley which experienced some further construction delays. That said, through persistence, passion and dedication, the team have overcome a number of onsite challenges and we have now opened and launched this mixed-use scheme, providing much needed homes, leisure, retail and parking for the town.It has been pleasing to see the fruits of our hard work and reputation as we have further consolidated our position in our three core geographies of London City Region, Manchester and Dublin, taking on new trading and PPP opportunities and further transitioning our investment portfolio in line with our regeneration focus. These wins are no accident. They underline our differentiated approach and the wider strength within the team to identify and be awarded new opportunities.Q.WHAT DO YOU SEE AS THE BIGGEST RISKS TO U+I IN THE YEAR AHEAD AND HOW DO YOU PLAN TO MITIGATE AGAINST THEM?A.Brexit has had a pervasive impact on our sector. Planning consents have been delayed, local authorities have been unable to proceed with regeneration schemes, investment decisions have been postponed at a corporate and individual level and there is declining consumer and business sentiment. These are issues that we have faced over the past year and continue to confront today. Leadership uncertainty compounds these risks, as a change of Government may bring changes in policies, legislation and regulations, creating further complications around planning and development. This also makes it harder for companies to give guidance with any certainty.We are however better placed than many to address these challenges. There is a genuine need for the work that we do – particularly as the public sector is under increasing pressure to maximise its existing assets – and PPP is a key way to improve productivity. There is also a real passion within U+I to do that work to the best of our ability, learning from experience so we can build a robust business for the future. Combined, these should help us to deliver our longer-term gains targets.We are hopeful too that, once current uncertainty is lifted, decision-making will pick up and the pace of projects will increase.Q.WHAT WOULD STOP YOU DELIVERING ON YOUR KPIs NEXT YEAR?A.Continued political and economic uncertainty is the biggest threat to our business in the short term as it is impacting market conﬁdence and delaying decision-making. However, we have strong fundamentals to deliver on our targets – supported by a well-balanced portfolio across development, trading and investment, to manage our risk. We are also working on some truly exceptional projects that provide visibility for the next 10+ years and should deliver long-term rewards to shareholders. We have strengthened and realigned our team to ensure that we have the right skillset to drive our schemes forward and deliver results that combine creativity with efﬁciency and productivity. Q.WHAT ARE YOUR VIEWS ON THE RETAIL ENVIRONMENT AND ITS IMPACT ON U+I’s INVESTMENT PORTFOLIO? A.There is no doubt that the retail market is in the throes of fundamental change, which has affected the performance of ours and many other companies’ investment portfolios. Overall sales are static but a growing proportion of consumer spending is taking place online meaning a number of retailers are suffering. That said, people still want convenience and they still want to enjoy the shopping experience. With that in mind, we take a great deal of care when we buy retail assets, choosing sites with a continued relevance for the consumer, ensuring the tenants are suited to the local catchment. They will typically offer some or all of community space, libraries, doctors surgeries, schools or other social infrastructure – making them relevant for the long term.The current environment presents some good buying opportunities, hence our acquisition of three assets over the course of the year – all in relevant locations which we believe will deliver the double-digit returns we CHAIRMAN’S Q&ACONTINUED6 | U and I Group PLCAnnual Report & Accounts 2019look for. We will continue to seek out well-priced, mixed-use regeneration assets that can deliver long-term sustainable income, whilst also increasingly retaining elements of existing development projects in our portfolio where we can nurture them to realise their full value over a three to ﬁve-year period. Q.WHAT DOES U+I MEAN BY PURPOSE AND HOW DO YOU PUT IT INTO PRACTICE?A.Every successful business needs a rallying cry, not least because today’s employees want to feel as if they belong to something and are contributing to a greater good. At U+I, purpose lies at the very heart of our business – we want to turn underloved, overlooked sites into beautiful places to live, work and enjoy life. Importantly, we want to do it properly so we work collaboratively with our partners from the very start of our projects. We listen to what communities want; we focus on worthwhile use, not just meanwhile use and we aim always to deliver places with a long-lasting positive legacy.Q.WHAT ARE YOUR KEY PRIORITIES FOR THE NEXT 12 MONTHS?A.Our focus for the new ﬁnancial year is on the delivery of our pipeline and ensuring that the business is positioned to deliver the results that our stakeholders expect in the most effective and value-driven manner. We will seek out new funding partners to invest in our major PPP schemes and ensure that they move towards their long-term goals. Beyond these goals, we will also seek to deepen our community involvement and create new industry standards. This will include setting up a new Community Engagement Panel to uphold the commitments we set out in our recent PPP – The Reset report to restore trust in PPP and hold us to account on our new projects, led by our new independent Non-executive Director Professor Sadie Morgan. This will help to imbue ourselves and the wider sector with vigour, determination and a tangible sense of purpose.Peter Williams, Chairman, U+IOverviewGovernanceFinancial statementsAdditional information7 | U and I Group PLCAnnual Report & Accounts 2019Strategic reportIN THIS SECTION:
HOW WE MAINTAIN THE 
DISCIPLINE TO DELIVER

8  |  U and I Group PLC
Annual Report & Accounts 2019

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10
FOCUSING ON THE  
FIVE THINGS THAT MAKE 
US DISTINCTIVE

16
CONNECTING IT ALL UP  
TO CREATE VALUE

34
STANDING OUT IN THE 
MARKET, MARRYING WELL 
AND UNDERSTANDING THE 
PURPOSE OF PURPOSE

9  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
THE FIVE THINGS THAT 
MAKE US DISTINCTIVE

We build strong partnerships. We have 
a clear geographic focus. We challenge 
the status quo. We respect and celebrate 
heritage and culture. Most importantly, we 
deliver great places. These ﬁve things help 
us to stand out and drive our performance.

Our values of imagination, intelligence and 
audacity inform everything that we do, 
allowing us to realise the untapped 
potential in places where others can’t.

Our values are equally important, anchored 
by our clear purpose. We are motivated 
every single day by the curiosity to 
innovate, the commitment to retain the soul 
and stories of a place, and the passion for 
creating neighbourhoods where 
communities can thrive.

10  |  U and I Group PLC
Annual Report & Accounts 2019

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STRONG 
PARTNERSHIPS

MARK RICHARDSON, 
DIRECTOR, DELIVERY, LONDON
EXPLAINS THE IMPORTANCE 
OF PARTNERSHIPS

11  |  U and I Group PLC
Annual Report & Accounts 2019

A relationship built 
on trust
We have built a close and 
trusted network of partners 
over a number of years. 
From public bodies and 
local authorities, to 
contractors, investors and 
architects, we bring 
together the best people to 
challenge ideas and keep 
innovating. We are not 
afraid to test ourselves; to 
get to the unvarnished truth. 

Only recently, we spoke to 
75 senior decision-makers 
in the public and private 
sector to ﬁnd out what they 
think of us and what we 
need to improve. The trust 
and relationships we’ve 
built with these partners 
over time create new 
opportunities, support our 
over 90% success rate in 
planning, and create 
barriers to entry for others. 

In 2018, we were named 
on the Mayor’s London 
Development Panel, a 
vehicle expected to bring 
forward up to £20 billion 
worth of developable land 
over the next four years. 
This will allow us to bid on 
new regeneration projects.

How this helped us 
deliver in FY2019
Our close relationships 
enabled us to secure a 
fourth development 
opportunity in Ashford. At 
Newtown Works we will be 
working in partnership with 
Quinn Estates to transform 
a 12-acre brownﬁeld site into 
a vibrant mixed-use scheme 
– delivering ﬁlm and studio 
ﬂoorspace, homes, a hotel 
and quality public realm.

In our CEO review you can 
read more about our PPP 
campaign and the results it 
has had. Alternatively go to:  
www.uandiplc.com/
thoughts

 
 
 
THE FIVE THINGS THAT 
MAKE US DISTINCTIVE
CONTINUED

A CLEAR 
GEOGRAPHIC 
FOCUS

ARLENE VAN BOSCH,
DEVELOPMENT DIRECTOR, 
DUBLIN
EXPLAINS WHAT WE LOOK FOR 
IN OUR REGIONS

12  |  U and I Group PLC
Annual Report & Accounts 2019

The four Ts
We are focused on three 
high-growth geographies 
– London City Region 
(within one hour’s commute 
from London), Manchester 
and Dublin. In each of these 
regions we have an intimate 
understanding of local 
communities, their cultures, 
histories and evolving needs.

These regions share a 
number of positive attributes 
we look for, including 
growing populations and 
strong, sustainable 
employment dynamics. 
Crucially too, they share four 
major factors we believe 
drive and sustain economic 
growth – talent, tourism, 
transport and tolerance – 
giving them huge, and 
exciting, long-term potential.

How this helped us 
deliver in FY2019
Having seen its potential in 
2014, we redesigned and 
extensively refurbished 
Donnybrook House in 
Dublin, transforming it into 
a modern ofﬁce building. 
We launched the building 
in October 2018, providing 
much-needed high-quality 
space, along with leisure 
facilities and retail for 
companies seeking to grow 
in this vibrant part of the city. 
We have now let the gym 
in the basement and 
discussions are underway 
with the creative and 
technology sectors to let 
the ofﬁce space.

Find out more about the 
four ‘Ts’ on page 46 

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CHALLENGING 
THE STATUS QUO

SIMON HESKETH, 
DIRECTOR, REGENERATION 
LONDON
EXPLAINS WHY WE’VE 
CREATED A NEW PPP CHARTER

13  |  U and I Group PLC
Annual Report & Accounts 2019

Thoughts with solutions
We will never shy away 
from difﬁcult conversations 
or complex issues. We 
challenge conventions, 
call for change and promote 
innovation across the 
property sector to help 
ﬁnd solutions. This means 
listening to partners, 
change-makers and risk 
takers, commissioning 
research and facilitating 
conversations to bring about 
real change that can 
transform our industry – its 
practices and perception – 
for the better. Public Private 
Partnerships (PPP) are a 
case in point. We believe 
that, done well, PPPs can 
deliver value and release 
potential for everyone; but 
that is not how they are seen 
currently. We spent months 
listening to key voices, from 
politicians and developers 
to community activists and 
councillors. Our aim was to 
understand the major issues 
and gauge what people 
really want and need. We 
published our conclusions in 
our report PPP – The Reset, 
published on our website.

How this helped us 
deliver in FY2019
Our work to understand the 
issues and challenges facing 
PPP resulted in us making a 
series of commitments to 
pioneer change and deliver 
a best-practice charter for 
our PPP projects. Our aim 
is to lead by example and 
restore trust in PPP, founded 
on a genuine partnership 
between developer, public 
sector and the community. 
In April 2019 we appointed 
Stirling prize-winner 
Professor Sadie Morgan 
as an independent Non-
executive Director to lead 
on the establishment of 
a Community Challenge 
Panel, which will hold us 
to account on the 
commitments we made and 
measure our progress.

For more about our 
research, visit:   
www.uandiplc.com/
thoughts

 
 
 
THE FIVE THINGS THAT 
MAKE US DISTINCTIVE
CONTINUED

RESPECTING AND 
CELEBRATING 
HERITAGE 
AND CULTURE

JAMES HEATHER,  
DEVELOPMENT DIRECTOR, MANCHESTER
EXPLAINS WHY WE THINK IT’S IMPORTANT  
TO GET TO KNOW THE HISTORY OF A PLACE

14  |  U and I Group PLC
Annual Report & Accounts 2019

Mayﬁeld
Every building or piece of 
land has a soul and a story. 
For us, true regeneration 
is about working with that 
heritage and history to inspire 
the places of the future. 
We spend time with local 
communities to understand 
their hopes and aspirations 
so we can deliver places that 
they and future generations 
can be proud of. At Mayﬁeld, 
we are committed to 
restoring the industrial 
character of this 24-acre 
former railway depot, which 
has been empty for over 
30 years – creating a thriving 
neighbourhood in the heart 
of Manchester and creating 
over 10,000 local jobs.

How this helped us 
deliver in FY2019
Opening up Mayﬁeld’s 
arches for events, 
workshops and 
consultations throughout 
the year – and establishing 
Mayﬁeld & Co, our co-
working space for young 
businesses – has restored 
industry and creativity to 
once-abandoned buildings 
across the site. It has also 
helped us to form ongoing 
conversations with local 
communities. What we have 
heard has helped to shape 
a shared vision, creating 
a plan that will respect and 
restore the rich heritage, 
distinctive personality and 
architectural quirks of the 
original site. We are also 
submitting planning in 
summer 2019 for 
Manchester’s ﬁrst purpose-
built public park in more 
than a century, which we 
are targeting completing 
in 2021. We secured 
endorsement for our 
Strategic Regeneration 
Framework in May 2018, 
winning an award for ‘Best 
Planning Policy Document’ 
in the process.

Read all about our 
Mayﬁeld story at: www.
mayﬁeldmanchester.co.uk

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DELIVERING 
PLACES

JOANNA AXON,
DEVELOPMENT DIRECTOR, 
LONDON
EXPLAINS HOW WE MAKE 
MEANINGFUL PLACES

15  |  U and I Group PLC
Annual Report & Accounts 2019

Worthwhile beginnings 
make for worthwhile 
endings
We know that when we 
listen, we make better places 
and communities. The 
moment we secure a site, 
we open our doors to make 
use of spaces and places, 
starting conversations, 
adding value to 
communities and creating 
beneﬁts that last. These 
include opportunities for 
independent businesses to 
grow and develop, cultural 
experiences, and places 
to meet, eat, drink, have 
fun and try new things. 
Other developers call this 
Meanwhile Use. We call it 
Worthwhile Use – not a 
temporary nice-to-have 
but an integral part of our 
regeneration process and 
an essential connection 
with local communities. It’s 
about a social responsibility.

How this helped us 
deliver in FY2019
The Workshop at 8 Albert 
Embankment is a temporary 
community and arts space, 
which has welcomed over 
48,000 people through its 
doors. Alongside the 
London Fire Brigade pop up 
museum, The Workshop is 
home to charities, social and 
start-up enterprises and 
artists, all with creativity at 
their heart and all committed 
to supporting local children 
and their families. The space 
complements our dedicated 
project website, which 
allows us to share our ideas 
and plans and, crucially, to 
consult extensively with the 
local community, before we 
submitted for planning for 
our mixed-use scheme in 
March 2019. This 
collaborative consultation 
process has meant we have 
been shortlisted for the 
‘Community Engagement 
in the Planning Process’ 
category at the 2019 London 
Planning Awards and the 
‘Best Use of Publicly-
Owned Land and/or 
Property in Placemaking’ at 
the 2019 Planning Awards.

 
 
 
CHIEF EXECUTIVE 
OFFICER’S STATEMENT
CONNECTING IT ALL UP 
TO CREATE VALUE

STRONG 
PARTNERSHIPS
Page 11

URBANISATION

“
CONNECTING WHAT MAKES 
US DISTINCTIVE WITH THE 
MAJOR MARKET AND SECTOR 
TRENDS IS KEY TO OUR 
APPROACH AND FUTURE 
SUCCESS.

MANAGING AND MAINTAINING 
THIS ECOSYSTEM HELPED US 
TO GROW OUR DEVELOPMENT, 
TRADING AND INVESTMENT 
PORTFOLIO PIPELINES IN 
FY2019, AS WE CONTINUE TO 
FOCUS ON DELIVERING 
SUSTAINED RETURNS FOR OUR 
SHAREHOLDERS AND LONG-
TERM ECONOMIC BENEFITS 
FOR THE COMMUNITIES IN 
WHICH WE WORK.
”

Matthew Weiner, 
Chief Executive

AFFORDABILITY

CHANGING
FOCUS OF
CAPITAL

FUTURE 
PROOFING

DELIVERING 
PLACES
Page 15

WAR FOR 
TALENT

CHALLENGING 
THE STATUS 
QUO
Page 13

RESPECTING 
AND CELEBRATING 
HERITAGE AND 
CULTURE
Page 14

What makes us distinctive
Page 10

Our major market and sector 
themes
Page 42 

16  |  U and I Group PLC
Annual Report & Accounts 2019

POLITICAL AND
REGULATORY
UNCERTAINTY

A CLEAR 
GEOGRAPHIC 
FOCUS
Page 12

RETAIL
POLARISATION

WELLBEING AND 
SUSTAINABILITY

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TECHNOLOGICAL
INNOVATION

Increasingly property is seen 
as a service; a provision to 
be subscribed to rather than 
owned outright. 

This has widespread 
consequences. In the retail 
environment, it has led to 
a much faster degree of 
obsolescence. In the ofﬁce 
environment, businesses 
need to occupy inspiring 
spaces or else talent is not 
interested in working for 
them. In residential, people 
are searching for spaces 
where they can feel truly at 
home, but with pressure 
on disposable income, 
affordability and convenience 
are prioritised over postcode.

As an industry, we need to 
provide those places and we 
need to do this by creating 
multi-use spaces that suit an 
increasingly ‘co-everything’ 
world. Political, economic 
and social demand for the 
type of mixed-use 
developments that we deliver 
will continue. 

These are the challenges but 
they are also opportunities 
for U+I. 

“
INTEREST RATES 
GLOBALLY REMAIN 
ANCHORED AT LOW 
LEVELS AND, WITH 
LIMITED DEBT 
EXPOSURE, THE 
MARKET CAN 
STAY RELATIVELY 
PROTECTED 
AGAINST A 
SLOWDOWN.
”

U+I has delivered a robust 
performance in the ﬁnancial 
period (to 31 March 2019), 
including £42.8 million of 
development and trading gains, 
against a very challenging 
backdrop. Our proﬁt before 
tax was £6.3 million (2018: 
£48.2 million), and our basic 
net asset value is down 5.3% 
to 289 pence per share (2018: 
303 pence per share), after 
the payment of £22.4 million 
of dividends (17.9 pence per 
share) during the period. 
Including joint venture assets, 
our investment portfolio 
delivered -1% total return (2018: 
10.1%), as we suffered a 4.9% 
capital value decline. Post tax 
total return was 0.9% (2018: 
12.2%), primarily reﬂecting 
the reduction in value of the 
investment portfolio.

These results show our 
resilience against an 
uncompromising market 
backdrop and a year marked 
by growing political, planning 
and economic uncertainty, 
without which we believe 
gains would have been in 
excess of our upper 
£50 million target. Over 
the last four years, we have 
delivered average gains 
of c.£50 million per annum, 
in line with our medium-term 
target.

Our markets 
The medium-term economic 
fundamentals in the UK 
remain sound, if 
unspectacular, with 
consumers’ real incomes 
increasing and companies 
having money to invest, albeit 
showing reluctance to do so. 
The real estate cycle has 
numerous long-term 
supportive forces at play, 
most notably in terms of the 
supply of new accommodation, 
which has been comparatively 
disciplined. Interest rates 
globally remain anchored at 
low levels and, with limited 
debt exposure, the market 
can stay relatively protected 
against a slowdown. At the 
same time, we are seeing the 
redeﬁnition of space, in terms 
of usage and ownership. 

MATTHEW WEINER,
CHIEF EXECUTIVE OFFICER, 
PICTURED AT U+I’S 8 ALBERT 
EMBANKMENT PROJECT.

17  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
 
CHIEF EXECUTIVE OFFICER’S STATEMENTCONTINUEDOur opportunityWe are a specialist developer and investor with a substantial pipeline of complex mixed-use regeneration schemes. We seek to transform overlooked parts of towns and cities, through a mix of commercial and residential real estate uses, revitalising communities. We unlock the potential of land and assets – mainly in the densely populated areas of London City Region, Manchester and Dublin – to create value. Our blend of large Public Private Partnership (PPP) projects, shorter-term entrepreneurial trading activity and recurring revenue from our investment portfolio – all centred on mixed-use regeneration – give our portfolio a clear focus and generate multiple income streams to help to mitigate risk. Our deep relationships with local stakeholders help us to identify suitable sites and better understand potential risks so we can facilitate planning and delivery.The scale of our projects, our vision to see the potential in complex sites where others don’t, our partnership approach with the public and private sector and our ability to secure funding for our PPP schemes create barriers to entry for others, and give us a competitive advantage.PUBLIC PRIVATE PARTNERSHIPSStrengthening our portfolioWe are making further progress on our stated strategic objective to develop a pipeline of fewer, larger projects with public and private partners in our three core geographies. In July 2018 Cambridge City Council and Anglian Water appointed us as master developer to deliver a major residential-led mixed-use scheme – named Cambridge Northern Fringe East (CNFE) – on an existing water recycling site, to help address the signiﬁcant shortfall in homes and amenities in this region. The scheme secured £227 million in funding from Government’s Housing Infrastructure Fund in March 2019 to relocate Anglian Water’s existing water recycling centre and release the core 120-acre brownﬁeld site. Having met this key milestone, the project is now progressing at pace. It will deliver c.£20–30 million of development and trading gains for U+I over its c.15-year lifespan, with our ﬁrst proﬁts expected in FY2023. These gains could increase should we bid for and be selected to deliver any elements of this project ourselves.Public Private  Partnership:  Long-term, large-scale, mixed-use regeneration projects in partnership with public and private bodies. Equity light, these are undertaken with a public-sector landowner, who seeds the partnership with land. This means low upfront capital requirements for U+I. We capture value through development margin, as we deliver the amenities, ofﬁces, homes, jobs and public assets that communities need, and which resource-poor local authorities would otherwise struggle to deliver alone.We remain in exclusive negotiations for a new PPP project in the London City Region and are also still on the shortlist for a major partnership opportunity in Dublin, and expect a decision on both in H1 2020. Combined they have a Gross Development Value of c.£2.0 billion. In August 2018, we were also appointed to the Greater London Authority’s (GLA’s) London Development Panel which will bring forward up to £20 billion worth of development land over the next four years. This opens up new opportunities and supports our position on TfL’s Property Partnership Framework, a position we have held since 2016.“WE ARE MAKING FURTHER PROGRESS IN OUR STATED STRATEGIC OBJECTIVE TO DEVELOP A PIPELINE OF FEWER, LARGER PROJECTS.”PPP is an integral part of our business and support for it was reinforced by Government in the November 2018 Budget. Yet it is often misunderstood as a mechanism for change and faces some reputational challenges. In the ﬁnancial period we undertook an extensive research, consultation and listening programme with the public, private and civic sectors in an effort to understand these challenges, establish a blueprint to address them and drive new industry standards. We published our ﬁndings in our PPP – The Reset report in November 2018, whilst also making a number of speciﬁc commitments which will enhance and improve our approach to PPP. Most notably, we will establish a Community Challenge Panel which will be overseen by our recently appointed independent Non-executive Director, Professor Sadie Morgan, to hold ourselves to account on our commitments. The process to appoint the Panel is underway. More about our PPP commitments online:www.uandiplc.com/thoughts18 | U and I Group PLCAnnual Report & Accounts 2019DEVELOPMENT AND TRADING Steady progress in a difﬁcult market Public Private Partnerships are an essential part of our business and these projects tend to be large, long-term and equity light as the public or private sector seeds the partnership with land. In contrast, and crucially as a counterbalance to these large, long-term projects, our trading portfolio is shorter-term in nature. We buy land and add value through enhanced planning consents and/or asset management, leveraging our experience in mixed-use regeneration and local authority relationships that we have nurtured and developed over the last 25+ years.Having achieved development and trading gains of £12.8 million in the ﬁrst half, we added another £30.0 million in the second half, totalling £42.8 million for the ﬁnancial period and reﬂecting our typical second half weighting. However, some projects were delayed – including Kensington Church Street and Rhoscrowther Wind Farm, both of which we now expect to monetise in FY2020. Some, like Hendy Wind Farm, we took a different approach to beneﬁt shareholders, whilst others exceeded expectations. A full breakdown of the projects that underpinned this ﬁnancial period’s gains is provided in the Portfolio Review. It demonstrates the diversity and ﬂexibility we have within our portfolio.Preston Barracks in Brighton has been a particular highlight for us this ﬁnancial period as we achieved gains of £13.8 million, signiﬁcantly ahead of our £2–3 million target. This was mainly achieved through the sale of the residential component to Optivo, one of the largest housing providers in the UK, and some additional planning overage gains from our partnership with Scape Student Living. Optivo recognised the quality of the proposed scheme and, as experts in affordable housing, they are perfectly qualiﬁed to deliver this part of our wider £200 million GDV mixed-use development, that will provide over £280 million of economic beneﬁt for the City of Brighton over the next ten years. Trading:  Short-term trading opportunities where we apply our expertise in sourcing and buying undervalued land and buildings, creating value through enhanced planning consents, change of use or asset management. Our relationships and understanding of the market allow us to focus on opportunities where terms of trade are in our favour and we can realise value efﬁciently.Preston Barracks, Brighton“DURING THE FINANCIAL PERIOD WE HAVE FOCUSED ON BUILDING OUR SHORTER-TERM PIPELINE TO SUPPORT OUR LARGER, LONGER-TERM PPP PROJECTS.”OverviewGovernanceFinancial statementsAdditional information19 | U and I Group PLCAnnual Report & Accounts 2019Strategic reportCHIEF EXECUTIVE 
OFFICER’S STATEMENT
CONTINUED

Harwell continues to evolve 
into a key project for us. This 
world-class, Government-
backed science, technology 
and innovation campus, 
where we have worked since 
2014, delivered £4.8 million 
of development and trading 
gains in the ﬁnancial period. 
This follows the completion 
of two pre-let developments 
and the sale of a signiﬁcant 
piece of land to an existing 
occupier. In the last ﬁve years 
we have delivered and leased 
350,000 sq.ft. of space on 
the campus. In March 2019, 
our joint venture partnership 
secured £110 million of 
funding from Santander, 
committing further resources 
to the next stage of 
development, which in the 
next two years will deliver 
over 200,000 sq.ft. of 
high-tech industrial, 
laboratory and ofﬁce 
accommodation. 

With Harwell and CNFE, we 
now have two major PPP 
schemes in the Cambridge/
Oxford corridor. In line with 
Government, which is 
investing heavily in these 
locations, we too see this 
growth corridor as a focus for 
innovation and talent and we 
are committed to continuing 
to grow our presence here. 

During the ﬁnancial period 
we secured planning 
permission and commenced 
construction works at Hendy 
Wind Farm. We also entered 
discussions to sell the project 
at a level that would have 
delivered our forecast gain. 
However, as we moved to 
close, we did not feel the 
terms and price reﬂected the 
ultimate quality of the scheme. 
Therefore, as with Bryn Blaen 
last year, we felt it was 
prudent to delay as we believe 
we can get a better return for 
shareholders if we sell in 
FY2020 when the project 
works have been completed. 

20  |  U and I Group PLC
Annual Report & Accounts 2019

In the second half of the 
ﬁnancial period we achieved 
practical completion at 
St Mark’s Square in Bromley. 
There is a good level of buyer 
interest in the completed 
residential units and the 
leisure element is open and 
trading well. However, due 
to construction delays in 
the second half of the year, 
we have incurred increased 
professional fees as well as 
higher interest charges as 
sale receipts were delayed, 
leading to a provision of 
£1.5 million. We are in the 
process of settling the ﬁnal 
account with the contractor 
and expect to resolve the 
situation during FY2020.

During the ﬁnancial period 
we have focused on building 
our shorter-term pipeline to 
support our larger, longer-
term PPP projects. At the 
start of the ﬁnancial period 
we revised the structure and 
focus of our acquisitions 
team towards trading and 
this has delivered three new 
trading opportunities. All in 
our core geographies, the 
Arts Building in Finsbury Park, 
Newtown Works in Ashford 
and White Heather Industrial 
Estate in Dublin are a further 
demonstration of our ability 
to source exciting 
opportunities. We expect 
them to generate strong 
gains for the business over 
the next one to three years, 
giving us improved short-term 
pipeline visibility.

More about the market we 
operate in online:
www.uandiplc.com/
investors/how-we-create-
value/our-market

INVESTMENT PORTFOLIO 

Investment: 
This is a recurring  
revenue achieved by 
acquiring assets with a 
regeneration focus that will 
deliver a sustained yield. We 
seek out sites that we believe 
have been overlooked and 
add value through smart 
asset management. Where 
we develop a site, we are 
increasingly looking to bring 
it into our investment portfolio 
to drive value and nurture it 
over time. Alternatively, we 
ﬁnd sites with longer-term 
regeneration potential, that 
can potentially feed our 
development pipeline.

The regeneration 
opportunity
At the year end, the 
investment portfolio was 
valued at £154.0 million 
(2018: £139.5 million). Over 
the 13-month period 
we made £27.4 million of 
acquisitions and £7.5 million 
of disposals. The core 
portfolio initial yield of 6.6% 
remained robust, conﬁrming 
the work we have done on 
income sustainability. 
However, we suffered a 
capital value decline of 4.9% 
(including our share of joint 
ventures) as market sentiment 
outweighed asset 
fundamentals, especially for 
retail property outside 
London and the South East. 
Including joint venture assets, 
we delivered a total return of 
-1% which takes into account 
capital value movements and 
income return. Our activity 
levels were below the 
£50 million acquisitions and 
£25 million disposals targets 
we set ourselves for this 
ﬁnancial period but we 
believe it is essential, 
particularly in the current 
environment, to remain 
disciplined and buy and 
sell the right assets at the 
right price. 

We remain encouraged by 
the high levels of occupancy 
across our portfolio (>90%), 
largely unchanged rental 
values and low voids (7.3%), 
evidence that smart buying 
and active management can 
deliver income-led results, 
even when the investment 
market is challenging overall. 
With such a strong 
convenience focus (38.1% 
of portfolio), no department 
stores and only 13.6% 
exposure to fashion/
footwear, our portfolio has 
the fundamentals to deliver. 
Retail failures from CVAs and 
administrations continue to 
have only a small impact, 
representing 2.4% of rental 
income. Of this, the net 
impact to income was only 
£75,000 or 0.6% of rent roll. 
We also have limited 
exposure to any one single 
tenant, with our largest – 
Matalan – making up less 
than 5.0% of total income. 

The UK property market is 
uncertain, with liquidity 
weakening, mainly due to the 
nervousness triggered by 
delays in decision-making at 
Government level. We believe 
that retail assets are being 
indiscriminately valued rather 
than being assessed on 
fundamentals. This creates 
clear challenges for us 
as vendors and asset 
managers but also provides 
opportunities as buyers. 

To that end, we have 
remained cautiously active 
in recent months, using this 
market uncertainty to make 
three attractive acquisitions: 
St Peter’s Quarter in 
Bournemouth, Waterglade 
Retail Park in Clacton-on-Sea 
and a Pure Gym unit in 
Finchley. Each of these 
assets is well-suited to the 
local catchment, has the 
potential for us to add further 
value through asset 
management initiatives and 
should deliver the double-
digit returns we look for. 

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Our portfolio is primarily 
in the retail sector, where 
shopper missions are 
polarising along the lines 
of destination/experience 
orientated visits or service/
convenience. Our focus 
remains on convenience-led 
schemes which are aligned 
to their local catchment and 
play a vital role within the 
community. Here demand 
remains robust and there is 
a certain degree of insulation 
against the ongoing shift to 
internet shopping and changes 
in consumer behaviour. 

“
WE REMAIN 
ENCOURAGED BY 
THE HIGH LEVELS 
OF OCCUPANCY 
ACROSS OUR 
PORTFOLIO (>90%), 
LARGELY 
UNCHANGED RENTS 
AND LOW VOIDS.
”

Over time, we believe the 
industry will need to 
reconsider what ‘prime retail’ 
really means. Ultimately, the 
most attractive retail assets 
are those that provide a 
sustainable income by 
offering the right experience 
to the consumer and the 
right price for the occupier. 
These are the assets that we 
pursue, not ‘prime’ in the 
conventional sense but ﬁt 
for purpose, resilient and 
delivering sustainable income 
and capital appreciation. 

Having delivered our target 
return in FY2018, we have 
been disappointed by the 
performance of the 
investment portfolio over 
the 13-month period. We 
acknowledge that our 
approach has not delivered 
consistently over the last 
three years. We have 
previously spoken of the 
potential to retain elements 
of our development portfolio 
and beneﬁt from the 
opportunity to realise further 
value as those schemes 
mature. As our development 
portfolio has grown in size, 
so this potential is now a 
reality and will allow us to 
beneﬁt from the world-class 
schemes which we have 
created and of which we have 
a deep understanding. Most 
importantly, this reinforces 
the business’s focus on 
regeneration, whilst also 
driving higher returns to 
shareholders, such that over 
a three to ﬁve-year period 
we expect to see investment 
portfolio returns closer to 
our overall target return.

Initially we have identiﬁed 
potential assets worth up 
to £250 million from our 
development pipeline which 
would meet our investment 
portfolio criteria. This means 
that by 2024 the investment 
portfolio should primarily be 
comprised of assets created 
from our development 
portfolio or assets held for 
their longer-term development 
potential. We know that we 
can achieve our targets and 
recapture previous levels of 
performance. 

More about our Investment 
portfolio online:
www.uandiplc.com/
our-places

21  |  U and I Group PLC
Annual Report & Accounts 2019

the ﬁnancial period were 
£17.8 million (2018: 
£20.3 million). 

Currently we employ certain 
specialist development-
related expertise internally, 
such as project management 
and marketing, rather than 
using external specialists. 
We do this as it gives us 
more immediate control over 
certain aspects of our 
projects. Historically we have 
viewed this as a central cost/
overhead expense. In order 
to more closely align 
ourselves with and be more 
comparable to our peer 
group, we are now adopting 
the industry-wide practice of 
capitalising that expenditure 
where appropriate rather than 
treating it as a corporate 
overhead. This has led to 
capitalisation of £2.5 million in 
FY2019, which is expected to 
be the level for future years. 

To further increase 
efﬁciencies, over the ﬁnancial 
period, we have undertaken 
an internal review of each 
part of the business, which 
has led to us realigning teams 
and improving some of our 
processes so we now believe 
we have the right team size, 
structure and skillset, relevant 
to the scale, value and stage 
of each project. As we 
conclude our existing smaller 
and legacy projects and 
continue to focus on fewer, 
larger projects, productivity 
will increase and support 
more efﬁcient delivery. 
Furthermore, as we move into 
the delivery phase of our 
pipeline, we will increase the 
opportunity to earn additional 
Development Management 
Fees to offset our overhead. 
Development Management 
Fees generated in FY2019 
were £2.5 million, a ﬁgure 
which we expect to increase 
annually over the next ﬁve 
years, with £3.0 million 
targeted in FY2020.

Capital initiatives to 
enhance delivery
In order to advance some of 
our bigger schemes, we have 
held a number of meetings 
with potential capital partners 
from around the world to 
invest, initially, in up to three 
of our major PPP projects. 
We have been encouraged by 
the level of engagement and 
interest in our projects from 
a range of private and 
institutional capital from 
across the globe, albeit UK 
political uncertainty has 
meant that progress has 
been slower than we would 
like, with capital showing 
some reticence to invest. 
However, empathy with the 
UK remains and potential 
capital partners have been 
attracted by both the quality 
of the projects and their 
locations within our gateway 
cities. We are in the process 
of shortlisting potential 
partners, whom we think are 
the best ﬁt, see the potential 
of these assets and share our 
vision for our major projects. 
We are targeting concluding 
the process in 2020 and will 
give a further update on 
progress at our interim results 
in November 2019. Securing 
funding allows us to advance 
our projects cost-efﬁciently, 
ensures timely delivery of our 
projects in conjunction with 
our public sector partners 
and means we can rotate 
capital into new schemes. 

Efﬁciencies programme 
underway
We remain focused on 
maintaining capital discipline 
and a strong balance sheet. 
As reported in our interim 
results, we have put in place 
an efﬁciencies programme 
to ensure that we continue 
to manage our recurring 
overheads as effectively 
as possible, given our 
prospective pipeline of 
projects. This is being led by 
a Chief Operating Ofﬁcer 
who was appointed in 
January 2018 on an interim 
basis to undertake a review 
of all areas of the business 
and identify and implement 
cost savings. Annualised 
net recurring overheads in 

 
 
 
CHIEF EXECUTIVE 
OFFICER’S STATEMENT
CONTINUED

Dividend – aligning 
shareholders with our 
performance
In line with our dividend policy 
we paid an ordinary dividend 
of 5.9 pence per share – 
comprising an interim 
dividend of 2.4 pence per 
share paid on 30 November 
2018 and a recommended 
ﬁnal dividend payment of 
3.5 pence per share to be 
paid to shareholders on 
6 September 2019.

As part of our dividend policy 
we also pay a supplemental 
dividend related to the net 
free cash ﬂow generated 
during the ﬁnancial period. 
Given the strength of our 
net cash position, we are 
pleased to recommend a 
supplemental dividend of 
4.1 pence per share (2018: 
12.0 pence per share). 

This will be the ﬁfth 
successive supplemental 
dividend paid to shareholders, 
evidence of our ability to 
generate strong and 
sustained surplus cash ﬂows 
from our development and 
trading activities, as well as 
our commitment to aligning 
our shareholders with the 
success of the business. 

We constantly monitor the 
method by which capital is 
returned to our investors and 
the Board will review this 
again over the course of the 
coming year.

22  |  U and I Group PLC
Annual Report & Accounts 2019

technology. As users, we 
believe there is tremendous 
growth potential for the 
technology, not just in 
commercial property, but 
increasingly in residential 
where connectivity and 
quality of infrastructure are of 
growing importance. Since 
the period end, we have also 
invested in Matterport, the 
3D virtual reality modelling 
experts for the real estate 
sector. In our role as strategic 
advisor to these two 
businesses, we can share 
expertise, whilst getting an 
opportunity to see ﬁrst-hand 
some of the new cutting-
edge technologies that could 
inform our future approach 
to our schemes and help us 
to keep innovating. Given 
the speed at which the world 
is moving, we will continue 
to seek out relevant new 
innovations to invest in, 
where we can harness 
technology to get insights 
that will support our 
decisions and allow us to 
stay ahead of new trends, to 
deliver great places that meet 
people’s needs, not just now, 
but for the future. 

“
U+I HAS EVOLVED 
FROM A NEWLY-
FORMED BUSINESS 
INTO A RECOGNISED 
BRAND WITH A 
PORTFOLIO OF 
LANDMARK 
REGENERATION 
ASSETS ACROSS 
LONDON CITY REGION, 
MANCHESTER AND 
DUBLIN.
”

Innovation to unlock 
potential and drive growth
Mixed-use regeneration is 
about breathing new life into 
neglected or underestimated 
places and we believe that 
innovation is an integral part 
of that process. 

Having re-established the 
Central Research Laboratory 
at The Old Vinyl Factory in 
Hayes as the UK’s ﬁrst 
full-service accelerator for 
hardware entrepreneurs, 
we have taken this proof 
of concept and committed 
£3 million to develop an 
innovation hub proposition 
we call Plus X. This brings 
together public and private 
sector capital to promote 
innovation, enhance job 
creation and give ﬂedgling 
businesses and SMEs room 
to grow, while simultaneously 
driving demand for 
commercial space and 
delivering distinctive places. 
The ﬁrst Plus X will open at 
Preston Barracks in Brighton 
in early 2020 and we have 
also submitted planning for 
a revised facility at The Old 
Vinyl Factory. This is just the 
start, as we plan to develop 
further Plus X holdings at 
other major regeneration 
projects. This concept 
delivers substantial wash 
over of value to our wider 
regeneration activity and we 
believe it is the ﬁrst of its kind 
in our industry. In time, we 
expect Plus X to create 
additional value for U+I 
through securing further PPP 
opportunities such as Preston 
Barracks, whilst becoming 
a potentially valuable and 
scalable business in its 
own right.

During the ﬁnancial period, 
we also made a deliberate 
move to explore innovation in 
property technology that has 
a direct beneﬁt to delivering 
better outcomes for our 
projects. Having been early 
adopters of their product, 
in October 2018 we made 
a small investment into 
WiredScore, the market 
leader in certifying building 

Strengthening the team
In recent years, U+I has 
evolved from a newly-formed 
business into a recognised 
brand with a portfolio of 
landmark regeneration assets 
across the London City 
Region, Manchester and 
Dublin.

That transition would not have 
been possible without our 
people, the backbone of our 
business and the inspiration 
for everything we do. Whilst 
our land bank can provide the 
raw material from which we 
can generate returns, it is our 
team that will realise this 
potential. In this vein, we need 
to do more and prove that 
we can execute, as well as 
originate. That involves 
ensuring that we have the 
right talent and structure to 
deliver on our KPIs and 
develop as a business. 

To that end, from 22 May 
2019, Richard Upton 
becomes Chief Development 
Ofﬁcer. The Board has long 
felt that the Deputy CEO title 
did not fully reﬂect Richard’s 
role. His ability to develop 
and realise a compelling 
vision, to build the necessary 
trust and relationships across 
stakeholder groups, and ﬁnd 
solutions that beneﬁt 
everyone are essential to our 
business. His job content will 
not change but this new title 
better indicates his focus, 
where he has accountability 
and responsibility for the 
origination of new 
opportunities, exploiting the 
potential within our increased 
pipeline and execution of our 
major PPP projects, including 
Mayﬁeld in Manchester and 
8 Albert Embankment in 
London.

We are also pleased to 
announce that Professor 
Sadie Morgan, founding 
director of architects practice 
dRMM, has joined the Board 
as an independent Non-
executive Director with effect 
from 3 April 2019. A Stirling 
prize-winner, a commissioner 
on the National Infrastructure 
Commission and chair of the 
Independent Design Panel for 

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High Speed Two, Professor 
Morgan brings with her a 
wealth of knowledge and a 
genuine commitment to PPP 
as a source of long-term 
regeneration. As well as 
chairing our Community 
Challenge Panel to hold us 
to account on our PPP 
commitments set out in PPP 
– The Reset, Professor 
Morgan will oversee the 
establishment of a workforce 
advisory panel, acting as a 
conduit between the Board 
and our people to support 
employee engagement and 
ensure we are sustaining an 
inspiring culture relevant to 
our vision. 

Worthwhile Use: 
From day one of  
securing a site, we use  
our spaces and places to  
add value to communities, 
hear their views and create 
beneﬁts that last. Beneﬁts 
such as risk-free opportunities 
for independent businesses 
to grow and develop, cultural 
experiences, and places to 
meet, eat, drink, have fun and 
try new things. This positive 
change rooted in the local 
community allows us to 
understand their needs 
and frame our projects 
around these.

Find out more about Board 
induction process
Page 119

Our efﬁciencies programme 
enhances our ability to deliver 
value for shareholders for the 
long term. Our funding 
partnerships are part of this 
programme, enabling us to 
drive returns, while delivering 
on our commitments. 

I want to thank the team 
for their hard work and 
contribution over the last 
13 months. Against an 
exceptionally difﬁcult 
backdrop, our people have 
continued to demonstrate 
the curiosity, passion and 
commitment that helps us to 
secure ﬂagship projects and 
deliver on our key purpose 
‘to unlock long-term value 
for all through regeneration’. 

Notwithstanding market 
conditions, we have 
strengthened our short and 
long-term pipeline, giving 
good future visibility. I am 
enthusiastic about our ability 
to deliver our projects and 
create a successful, motivated 
and inspirational company.

Matthew Weiner,
Chief Executive 
Ofﬁcer, U+I
21 May 2019

OUTLOOK 

Delivering sustainable 
long-term returns for 
shareholders
U+I sits at the heart of major 
trends. We are regeneration 
specialists with the 
experience, understanding 
and creative talent to turn 
underestimated and 
overlooked sites into vibrant, 
mixed-use places that 
enhance productivity, drive 
economic growth and 
contribute constructively 
to communities.

The raw material is there 
– neglected public sector 
land in our chosen 
geographies – with the public 
sector increasingly under 
pressure to deliver greater 
productivity from its real 
estate. The need has never 
been greater, people want to 
live in better homes, work in 
better places and lead better 
lives. We have the skillset and 
the relationships to enable 
and support central and local 
government to meet its 
targets, whilst addressing the 
shortfall in quality mixed-use 
spaces that will beneﬁt local 
communities. That is our 
focus and we are conﬁdent 
that we can deliver over the 
long term.

The short-term will be more 
challenging, as markets face 
political and economic 
uncertainty. The Brexit delay 
spells another six months of 
uncertainty and will keep 
investment and hiring 
decisions on hold. This has 
had a direct bearing on our 
FY2019 results and has meant 
that we have revised our 
development and trading 
gains target for FY2020 from 
£45–55 million to 
£35–45 million and our 
FY2021 target from 

£35–45 million to 
£45–55 million. We have 
reviewed our pipeline as a 
whole and, although we have 
moved Kensington Church 
Street, Hendy Wind Farm and 
Rhoscrowther Wind Farm into 
FY2020, this lowering of our 
target and retaining this 
larger guidance range 
reﬂects the market we 
currently operate in, where 
we expect wider factors – in 
particular the fallout from the 
political crisis at both central 
and local government levels 
– to delay decision-making 
and, in turn, the delivery of 
some of our gains. 

Of course, within this 
increasingly complex political 
and planning environment 
there is opportunity for a 
business such as ours that 
treats community 
engagement as central to 
delivering schemes that can 
heal the divides that are 
blighting our cities. There is 
a need for knowledge and 
expertise to ﬁnd opportunities 
amid the uncertainty.

We remain a total return 
business and are committed 
to our longer-term target of 
12% average post tax total 
return and 10% average 
investment portfolio total 
return, and believe we have 
the right strategy and team 
to achieve these over time.

In the year ahead, we will 
focus on securing planning 
consents and delivering our 
development projects, while 
remaining alert to shorter-
term trading or new 
investment opportunities 
where they align with our 
regeneration focus, as well 
as possible new PPP 
opportunities in our three 
core regions. 

23  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
PORTFOLIO REVIEW

The U+I portfolio comprises 
a balance of longer-term PPP 
projects, shorter-term trading 
opportunities and investment 
assets. These three elements 
combine to maximise value 
creation, providing multiple 
routes to market, diversifying 
our earnings stream and 
mitigating risk through the 
economic cycle. 

There is a strong connected 
theme running through our 
schemes. They are focused 
on regeneration; they are 
focused on our core 
geographies of London City 
Region, Manchester and 
Dublin; and they are 
expected to beneﬁt from 
what we believe to be the 
four key drivers of economic 
growth – talent, tourism, 
transport and tolerance. 

Importantly too, each 
element beneﬁts from the 
others, to create a uniﬁed 
business, where the whole 
is greater than the sum of 
the parts. 

Development and trading 
 – Development: large-scale, 
mixed-use regeneration 
projects that are designed 
to deliver signiﬁcant value 
over time. Often structured 
as Public Private 
Partnerships, these 
comprise 31% of gross 
assets and deliver multi-
year proﬁt ﬂows. 

 – Trading: shorter-term 
trading opportunities 
where we buy land and add 
value through enhanced 
planning consents and/or 
asset management. 
These comprise 39% of 
gross assets and deliver 
proﬁt ﬂows over one to 
three years. 

24  |  U and I Group PLC
Annual Report & Accounts 2019

Investment: Assets that 
provide recurring income, the 
proceeds of which support 
our development and trading 
activities. These assets also 
offer optionality for asset 
management or change of 
use to drive incremental 
value. They comprise 30% 
of gross assets. 

We use our values of 
imagination, intelligence and 
audacity to bring vision and 
verve to our business and our 
projects. We have always 
thought of the communities 
who will populate the places 
we create. With this in mind 
we have increasingly 
recognised that the 
generations of today are more 
interested in affordability and 
convenience than postcode. 
This understanding – 
combined with hard work and 
an increasingly talented team 
– have helped us to gain the 
trust of stakeholders in both 
the public and private sector, 
and thereby win landmark 
projects. These will become 
the core assets of the future 
and we intend to deliver them 
with our capital partners. 

DEVELOPMENT AND TRADING 

PPP
Transforming sites into 
vibrant mixed-use 
communities.

Financial characteristics: 
Multi-year proﬁts.

Proﬁt driver: 
Developing site and 
subsequent letting/disposal.

TRADING
Improving land value, 
primarily through planning 
or asset management.

Financial characteristics: 
1–3 year proﬁts.

Proﬁt driver: 
Disposal.

During the ﬁnancial period, 
we delivered £42.8 million 
of development and trading 
gains. A summary of our 
realised gains and losses in 
FY2019 can be found on 
page 26.

Our business model
Page 50 

Find out more about our 
principal risks and 
uncertainties
Page 82

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Delivering places
Creating a thriving cultural, 
social and economic hub 
for an undersupplied 
commercial, retail, creative 
and residential market that 
will complement the fabric 
of the neighbourhood.

FY2019 highlight
Extensive consultations 
with local communities and 
businesses to understand 
their needs, ahead of 
submitting our detailed 
planning application on 
8 March 2019.

What to look for in FY2020
Resolution to grant planning 
expected in Autumn 2019; 
closing funding Q2 2020; 
start on site in 2020; 
targeting delivery of the 
completed scheme in 2023.

LANDMARK COURT
LONDON CITY REGION

Clear geographic focus
1.7 acres near London 
Borough Market and the 
Shard, one of London’s most 
vibrant sub-markets. The site 
had been forgotten and 
derelict for 25+ years.

Strong partnerships
£240 million GDV Public 
Private Partnership working in 
joint venture with Transport 
for London to deliver a major 
commercial-led mixed-use 
development.

Respecting and celebrating 
heritage and culture
Our biggest challenge has 
been creating a scheme that 
both preserves the heritage 
of the retained buildings in 
this historically fascinating 
setting, and enhances and 
retains the neighbouring 
Crossbones memorial garden 
which dates back to 1746. 

25  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
PORTFOLIO REVIEW
CONTINUED

SUMMARY OF OUR REALISED GAINS AND LOSSES IN FY2019

PROJECT NAME

VALUE TRIGGER

Bicester  
(Mixed-Use Scheme A), 
London City Region

Completed disposal of this retail-led, mixed-use 
scheme, conveniently located opposite Bicester Village, 
to Value Retail. 

Bryn Blaen Wind Farm, 
Wales*

Completed disposal in March 2019. Gain is slightly below 
our target due to increased costs in connecting the site to 
the grid.

Completed sale in H1 to Hyde Group. This was the ﬁnal 
disposal of the site we assembled in Charlton Riverside and 
was held in joint venture with Proprium Capital Partners.

Sale of a plot of land to facilitate an existing occupier’s 
expansion on site and completion of two pre-let 
developments totalling 65,000 sq.ft.

The scheme was approved by the Mayor of London in 
September 2018. However, in March 2019, the Secretary of 
State for Housing, Communities and Local Government 
called in the scheme leading to an inquiry in November 2019. 
This delay restricted our ability to deliver gains this ﬁnancial 
period. We, alongside our joint venture partners, continue to 
seek a timely outcome and are targeting realising gains in 
FY2020 – either through development of the site or 
reﬁnancing of the site post planning. However, this is 
dependent on the timing of the decision by Government 
post the inquiry. We have slightly reduced our forecasts for 
FY2020 to reﬂect the delay.

This asset has been acquired by the Government as part 
of the HS2 project. The gain represents our share of the 
estimate of the fair value due to Curzon Park Limited of the 
land that was subject to a CPO during the ﬁnancial period. 
We remain in negotiations with HS2 to agree the ﬁnal level 
of settlement.

Disposal of the residential element of the site to affordable 
housing provider, Optivo and further gains from planning 
overage from our partnership with Scape Student Living. 
This project highlights the potential for successful PPP 
schemes. The gains exceeded expectations, largely 
reﬂecting the quality of the site.

Planning for Hendy was secured on 30 October 2018 but we 
made a strategic decision not to sell the project during the 
year in the strong belief that we could realise more value by 
delivering a built out site. We expect to exchange on a sale 
in H2 2020 which should deliver £4–6 million gains. As 
announced at our interim results, planning consent was 
delayed at Rhoscrowther, meaning we missed the subsidy 
window. We now expect to deliver lower than previously 
expected gains in FY2020 through delivery of a non-subsidised 
scheme. A planning application will be submitted shortly.

Various smaller projects, contributing less than £3.0 million 
apiece. These include completion of the ﬁnal units at Ilford, 
delivering £1.6 million; development proﬁt from the student 
accommodation at Circus Street, Brighton for £1.8 million, 
and the sale of the Assembly Buildings and Veneer Building at 
The Old Vinyl Factory, Hayes. It also includes a provision of 
£1.5 million at St Mark’s Square in Bromley where we incurred 
increased professional fees and interest charges as receipts 
were delayed due to construction delays.

Charlton Riverside, 
London*

Harwell, Oxford*

Kensington Church 
Street, London*

Curzon Park, 
Birmingham* 

Preston Barracks, 
Brighton

Wind Farm Projects 
– Hendy and 
Rhoscrowther

Other (8 projects)

*  Held in joint venture

26  |  U and I Group PLC
Annual Report & Accounts 2019

PREVIOUS 
TARGET

£3–5m

REALISED GAINS/
LOSSES

£4.0m

£6–8m

£4.7m

£2–4m

£3.3m

£4–6m

£4.8m

£5–7m

£0.0m

£4–7m

£9.3m

£2–3m

£13.8m

£10–12m £0.0m

£9–12m

£2.9m

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New trading opportunities 
We have continued to grow 
our trading pipeline with three 
new opportunities that are 
expected to generate strong 
gains for the business. 

Arts Building, London City 
Region 
In January 2019, we acquired 
the Arts Building in Finsbury 
Park, a c.50,000 sq.ft., 
ﬁve-ﬂoor warehouse-style 
building. The transaction 
was completed off-market, 
highlighting the strength of 
our network and our ability 
to move quickly when 
necessary. Located less 
than 10 minutes from Central 
London, we will refurbish the 
ofﬁces and convert the 
ground ﬂoor warehouse 
space into ofﬁces and re-let. 
It is our intention to revalue 
or sell, generating gains 
in FY2020. 

Newtown Works, London 
City Region 
In December 2018, we 
completed a funding deal 
with Quinn Estates to acquire 
Newtown Works, a 12-acre 
brownﬁeld site in Ashford. 
This is our fourth transaction 
in the town, underlining the 
trusted relationship that we 
have developed with local 
stakeholders, including 
Ashford Borough Council. 
Work is already underway 
to transform the site into a 
dynamic mixed-use scheme, 
likely to begin generating 
proﬁts from FY2020. 

White Heather Industrial 
Estate, Dublin
In December 2018, we 
acquired the White Heather 
Industrial Estate in Dublin 
as a medium-term trading 
opportunity. This builds on 
our previous strategy of 
identifying industrial land with 
potential for residential-led 
mixed-use regeneration. 

Outlook for FY2020
We have reviewed our 
portfolio for the coming 
ﬁnancial period, including the 
addition of Kensington Church 
Street, Hendy Wind Farm and 
Rhoscrowther Wind Farm that 
have moved across from 
FY2019. Based on our current 
pipeline, we are targeting 
development and trading 
gains of £35–45 million in 
FY2020 (revised down from 
£45–55 million) and 
£45–55 million in FY2021 
(revised up from 
£35–45 million). The projects 
listed below are expected to 
make up this target but, as 
always, these can change 
and we have the ability to ﬂex 
this mix of projects where 
appropriate. 

We have a strong pipeline of 
short and long-term projects 
and are focused in the year 
ahead on delivery across 
these. This includes securing 
planning consents at 8 Albert 
Embankment and Landmark 
Court – two of our major PPP 
projects in London City 
Region which we submitted 

PROJECTS EXPECTED TO DELIVER FY2020 GAINS 

Mayﬁeld, Manchester future 
scheme.

for planning in March 2019 
– whilst also securing 
planning for the ﬁrst phase 
of our £1.1 billion mixed-use 
regeneration project at 
Mayﬁeld, Manchester, for 
a 6.5 acre park, ofﬁce and 
parking space.

As well as driving value from 
our existing portfolio, in line 
with our strategic aim of 
growing our portfolio with 
high-quality projects, we will 
continue to seek out 
opportunities that meet our 
regeneration focus, where we 
can broaden our shorter-term 
trading pipeline and 
complement our longer-term 
PPP pipeline across London 
City Region, Manchester 
and Dublin.

PROJECT NAME

VALUE TRIGGER

TARGETED GAINS

Arts Building, London

Completion of works, letting and subsequent sale.

Newtown Works, Ashford

Securing planning and initial lettings/disposals.

Kensington Church Street, 
London*

Surplus arising from either development of the site or reﬁnancing of the site 
post planning.

Hendy Wind Farm, Wales

Completion of construction and sale. 

Rhoscrowther Wind Farm, 
Wales

Planning and sale. 

Other 

Various smaller projects individually contributing <£3.0 million.

£8–10m
£5–7m
£4–6m

£4–6m
£1–3m

£13–15m

*  Held in joint venture

27  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
PORTFOLIO REVIEW
CONTINUED

28  |  U and I Group PLC
Annual Report & Accounts 2019

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CIRCUS STREET, BRIGHTON
LONDON CITY REGION

Delivering places
Turning a derelict fruit and 
vegetable market into a 
thriving hub, addressing 
the shortfall in new homes, 
student and ofﬁce 
accommodation, whilst 
delivering The Dance Space 
(a new home for South East 
Dance) to support the social 
infrastructure. The project is 
expected to provide over 
400 new jobs and add 
£200 million of gross value 
to the local economy over 
the next ten years.

Strong partnerships
£130 million Public Private 
Partnership with Brighton & 
Hove City Council, with 
funding from GCP Student
Living Plc and Gravis Capital 
Management Limited.

Challenging the 
status quo
Our challenge for this 
scheme was to create a 
sustainable, productive, 
healthy blueprint for city life, 
with a focus on travel by 
bike and foot. The design 
promotes green energy, 
creativity, communal, 
responsible, neighbourly 
living, working and 
socialising.

Clear geographic focus
Within one hour’s commute 
from London, and in a city 
known for top creative 
talent, tolerance for 
diversity and tourism.

FY2019 highlight
Topping out celebration of 
the tallest building on site in 
April 2018 and topping out 
of The Dance Space in 
January 2019.

What to look for in FY2020
Practical completion of 
student and residential 
units, welcoming the ﬁrst 
tenants. Opening The 
Dance Space.

29  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
PORTFOLIO REVIEW
CONTINUED

INVESTMENT PORTFOLIO 

PROJECT NAME

OVERVIEW

VALUATION 

Smart asset management 
where there is regeneration 
potential.

Financial characteristics: 
Recurring stable income and 
capital growth.

Proﬁt driver: 
Potential sale in excess of 
book value or capital value 
through revaluation.

During FY2019, we 
completed £27.4 million 
acquisitions, £7.5 million 
disposals and £4.6 million 
asset management initiatives, 
as outlined in the chart. 
Our target for FY2020 is to 
deliver c.10% total return, 
albeit delivery of this could 
be challenging in current 
markets. 

Our strategy
Page 52

Find out more about our 
corporate governance 
Page 94

30  |  U and I Group PLC
Annual Report & Accounts 2019

Disposals

Killingworth Centre, 
Newcastle 

Acquisitions

St Peter’s Quarter, 
Bournemouth

Waterglade Retail 
Park, Clacton on Sea

Pure Gym Unit, 
Finchley

In line with our focus on three core geographies, 
we identiﬁed Killingworth as a strategic disposal 
in 2018. In FY2019, to reduce our risk, we sold off 
the Mall element where we felt income was not 
sustainable. We have retained the long-term 
income from Matalan and Home Bargains units, 
yielding >8.5%. 

Bournemouth is largely populated by students and 
older, afﬂuent retirees. St Peter’s Quarter, a 98,000 
sq.ft. mixed-use scheme, ﬁts neatly into this 
demographic. Comprising student accommodation, 
leisure and retail, the asset is generating a strong 
income return and there is signiﬁcant potential for 
further growth/asset management. In recent 
months, we have let additional space in the 
basement and beneﬁted from break clauses not 
being exercised due to strong trade. We believe it 
will achieve a >10% total return, with 56% of the 
rent subject to ﬁxed or RPI uplifts. 

A convenience site occupied by four tenants (B&M, 
Halfords, Iceland and Carpetright), this acquisition 
exempliﬁes our understanding of the retail market 
and the niche opportunities it presents. All four 
tenants are well-suited to the local catchment, the 
investment generates an initial yield of 9.3%, with 
the opportunity to deliver double-digit returns 
through asset management and lease re-structuring. 
Since ﬁnancial period end, we have re-geared the 
B&M lease, extending the term by eight years and 
generating a c.£600K capital uplift.

This leasehold asset was acquired off-market. 
Located on an acre of land, the transaction builds 
on our relationship with the London Borough of 
Barnet and meets our investment criteria as an 
income-generating asset with longer-term 
regeneration potential. It offers a net initial yield of 
5.9%, expected to rise to over 7.0% at rent review in 
2021. The residual value with planning for residential 
uses and vacant possession would be materially 
higher than current investment value. 

Mall element 
sold for 
£7.5 
million
yield of
9.4%

Acquired for
£11.3 
million

Acquired for 
£11.3 
million

Acquired for 
£4.8 
million

Material Store and 
Boiler House, The 
Old Vinyl Factory, 
Hayes

Transferred from our development portfolio into 
our investment portfolio on practical completion, 
demonstrating how we can nurture quality assets 
where we see longer-term potential. Units were pre-let.

Asset management 
initiatives

Harwell, Oxford

The campus environment is improving, as we build 
new accommodation and the campus continues to 
attract top talent. This will drive rental growth by the 
creation of new headline rents. During the ﬁnancial 
period, we also restructured the lease at the 
adjacent Gemini building, increasing the value of 
the asset by £2.0 million. We also completed an 
outstanding rent review on the Element Six building, 
securing an uplift in value of £3.5 million; our share 
being £0.9 million.

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Key statistics

Portfolio value 
Valuation change
Number of assets held 
Value of disposals
Initial yield in the period 
Equivalent yield
Contracted rental value
Estimated rental value 
Voids 

31 Mar 2019
£154.0m
£(11.2)m
19

28 Feb 2018
£139.5m
£(2.4)m
16
£(7.5)m £(53.2)m
6.2%
8.3%
£8.9m
£10.7m
7.9%

6.6%
7.9%
£11.7m
£13.1m
7.3%

Specialist platforms
Our specialist platforms, focused on ofﬁce refurbishments and income-generating strategic land in the London City Region 
and Dublin, combine our skills and experience with the balance sheet strength of our joint venture partners, Colony Capital 
and Proprium Capital Partners. More details of our ﬁve projects across the two platforms can be found below. 

PROJECT NAME

OVERVIEW

Donnybrook House, 
Dublin

The Hive (formerly 
Ballymoss House), 
Dublin 

Carrisbrook House, 
Dublin

We completed the refurbishment of Donnybrook House, 
increasing the net lettable space by 37% and launched this 
landmark six-level ofﬁce development in October 2018. Since the 
end of the ﬁnancial period, we have let the gym in the basement 
and discussions are underway with the creative and technology 
sectors to let the ofﬁce space.

Construction started in August 2018 to refurbish and extend 
The Hive building, providing much needed ofﬁce space to the 
undersupplied Dublin market. It has already attracted 
considerable letting interest. 

Secured planning permission at Carrisbrook House in October 
2018, having acquired the building in August 2017 as a neglected 
property with signiﬁcant upside potential. 

The Record Store, Hayes Progressing ﬁt out.

Proprium Capital 
Partners

FY2020 TARGET

Targeting the building being 
fully let and a subsequent sale. 

Targeting practical completion 
of construction in August 
2019, pre-letting the building 
and a subsequent sale.

Revising planning consent to 
take advantage of new Dublin 
City Council planning 
guidance on heights.

Targeting fully letting building 
and sale.

Mecca Bingo, London

Vacant possession discussions underway.

Securing planning.

31  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
PORTFOLIO REVIEW
CONTINUED

Top ﬁve occupiers as at 31 March 2019

Matalan
Sainsbury’s Supermarket 
Ricardo-Aea 
B&M
Carpetright

Income generating properties – like-for-like rental income received

Year ended 31 March 2019
Investment
Development and trading
Joint ventures

Year ended 28 February 2018
Investment
Development and trading
Joint ventures

Annual
Rent
£’m
0.5
0.5
0.5
0.4
0.3

% of 
contracted
rent
4.7%
4.2%
3.9%
3.2%
2.7%

Property 
owned 
throughout 
the year
£’000
9,831
1,823
3,204
14,858

Property 
owned 
throughout 
the year
£’000
10,288
1,306
2,404
13,998

Acquisitions
£’000
3,931
334
–
4,265

Disposals
£’000
(37)
308
58
329

Acquisitions
£’000
–
–
–
–

Disposals
£’000
1,724
763
358
2,845

Total net 
rental  

income
£’000
13,725
2,465
3,262
19,452

Total net 
rental  

income
£’000
12,012
2,069
2,762
16,843

Core investment portfolio – 31 March 2019

Gross rental income  
– tenant proﬁle

Gross rental income  
– lease-term proﬁle

Capital value  
– local proﬁle

4.

1.

3.

5.

4.

1.

1.

3.

5.

4.

3.

2.

2.

2.

1. PLC/Nationals: 58.9%
2. Local Traders: 29.1%
3. Regional Multiples: 7.4%
4. FTSE 100: 4.2%
5. Government: 0.4% 

1. 0–5 years: 54.4%
2. 5–10 years: 23.7%
3. 10–15 years: 14.3%
4. 15–20 years: 5.9%
5. 20+ years: 1.7% 

1. London: 26.6%
2. South East: 40.6%
3. Manchester: 2.2%
4. Rest of UK: 30.6% 

32  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
 
 
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“
SINCE THE END OF 
THE FINANCIAL PERIOD, 
WE HAVE LET THE GYM 
IN THE BASEMENT OF 
DONNYBROOK HOUSE, 
DUBLIN AND DISCUSSIONS 
ARE UNDERWAY WITH 
THE CREATIVE AND 
TECHNOLOGY SECTORS 
TO LET THE OFFICE SPACE.
”

Matthew Weiner
Chief Executive

33  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
SPECIAL REPORTWHAT GREAT LOOKS LIKERICHARD UPTON,CHIEF DEVELOPMENT OFFICER, PICTURED AT U+I’S 8 ALBERT EMBANKMENT PROJECT.34 | U and I Group PLCAnnual Report & Accounts 2019OverviewGovernanceFinancial statementsAdditional information35 | U and I Group PLCAnnual Report & Accounts 2019Strategic reportSPECIAL REPORTCONTINUEDWe are property developers. That can be difﬁcult to admit, because we don’t have a very good name in the world at large. People tend to think of us as corporate gluttons, sacriﬁcing social wellbeing on the altar of Mammon. U+I doesn’t want to be like that. And, dare I say it, we aren’t like that. We are distinctive. That distinctiveness does not stem from bloody-mindedness – though we need a hefty dose of that from time to time. Instead, our distinctiveness reﬂects an understanding that what we do can affect – or transform – people’s lives, not just for months or years, but for decades. So it matters, enormously. We have a real responsibility to get it rightThe built environment cradles hope and opportunity. Done well, we can create places that are happy, thoughtful and locally distinctive; places that confer a sense of belonging; places that foster hope and wellbeing. Places that, when the hoardings come down, feel like home for the local community. Of course, our responsibilities extend beyond the communities where we work. They extend to all our stakeholders, from public sector partners to individual and institutional shareholders. Some companies may ﬁnd these things hard to reconcile – for us they are intimately connected.So, from the moment U+I was founded back in 2015, we knew our long-term value would come from being purpose-driven in everything we do. Back then, we said we would unlock ﬁnancial, economic, social and cultural value. We said we would kick-start radical transformations in overlooked and misunderstood places. And we said our track record would make us the partner of choice for public and private organisations. Three and a half years on we are still young, we are still growing and we know there is much more to doThere have been challenges and we have hit roadblocks along the way. We’ve learnt some key lessons, the most important of which is the power of partnerships and the need for a shared vision with our partners for the long term. We have to be resilient and resourceful, ﬁnding the right – not necessarily the easiest – solutions to difﬁculties along the way. 36 | U and I Group PLCAnnual Report & Accounts 2019OverviewGovernanceFinancial statementsAdditional information37 | U and I Group PLCAnnual Report & Accounts 2019Strategic reportSPECIAL REPORTCONTINUEDThe early evidence suggests that we are making progress. The value of our pipeline has grown signiﬁcantly from £3.6 billion to over £11 billion; its visibility stretches out for the next ten years, and beyond. We have been mandated to develop some of the most high-proﬁle projects in the UK, including the London Fire Brigade’s headquarters on Albert Embankment and Mayﬁeld in the heart of Manchester. These sites are unique and rarely come to market. We are keenly aware of the responsibility that comes with them. Large-scale, mixed-use regeneration is complex. It takes time. It takes drive. It takes humility. Above all, it requires the values that our business lives by – imagination, intelligence and audacity. The imagination to understand how underloved, overlooked land can be transformed into inspiring, inclusive places. The intelligence to understand how that journey can be achieved. And the audacity to know that we can do it. It is these values that motivate us to work harder and more purposefully. And they hold true, whether we are refurbishing a tired shopping centre to improve the customer’s experience or creating a park from nothing. We want to be best-in-class and we want to do it in the next ﬁve years – creating vibrant places that enhance people’s lives and deliver consistent, market-beating ﬁnancial returnsThat requires a strong sense of purpose, a cohesive, uniﬁed culture and a willingness to learn from experience and mistakes.It also requires exceptional talent. That does not mean making our team bigger, far from it. We have built this business by being nimble and entrepreneurial and we will stay that way. We seek out the best and smartest people to match the complexity of our projects. We will nurture and develop these people and inspire them to deliver our purpose with conﬁdence, creativity and vision. Our people are our future. They will drive growth, increase our resilience and take us to where we want to go. Having started on this path earlier than most gives us several advantages Our projects take years to win and years to build. We have spent time earning the trust of our public and private sector partners. They know we are values-led and they know that we care. They also know that when it gets tough we won’t hide. Things don’t always go as planned and our partners know we are there for the long-haul and because we share a vision and a purpose. Together we’ll work it out.We understand that when our partners entrust us with their land, it is a privilege. They need these projects to work, to breathe new life into old spaces, to deliver homes, ofﬁces, shops and places to play – where people can feel happy and hopeful. They also need them to generate cash, consistently. 38 | U and I Group PLCAnnual Report & Accounts 2019OverviewGovernanceFinancial statementsAdditional information39 | U and I Group PLCAnnual Report & Accounts 2019Strategic reportIN THIS SECTION:
WHAT WE SEE WHEN WE  
LOOK FORWARD

Preston Barracks, Brighton

40  |  U and I Group PLC
Annual Report & Accounts 2019

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42
MARKET TRENDS THAT 
SUPPORT OUR APPROACH

50
TRUST IS AN ESSENTIAL 
PART OF RELATIONSHIPS 
WITH STAKEHOLDERS

52
A CLEAR STRATEGY AND 
KPIs TO MEASURE OUR 
PERFORMANCE

41  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
OUR MARKET
ENSURING OUR DISTINCTIVE 
APPROACH STAYS RELEVANT

MAJOR THEMES

Description

Change in year

OPPORTUNITIES FOR U+I

Our response

1.
URBANISATION

2.
WAR FOR 
TALENT

A growing UK population expected to reach 
c.74 million by 2039 – a 12% increase on 
today (ONS, 2017). Over 80% of this is 
urban, predicted to reach c.85% in 2039 
(UN, 2018). This is putting pressure on our 
towns and cities to offer the required 
infrastructure, public places, services and 
amenities – as well as new homes. Employers 
need to be in cities that give access to the 
workforce they want. 

Several major economies are either 
at or close to full employment, yet in 
2018 more companies than ever 
before found it hard to recruit staff 
(British Chambers of Commerce, 
2019). Attractive workplaces that meet 
changing employee needs, whilst 
delivering something extra, are 
increasingly critical to engaging 
employees, enhancing individual and 
collective productivity and enhancing 
a business’s overall performance.

Brexit discussions, leadership 

challenges, elections and changes in 

regulation create risks and opportunities 

as companies and consumers adapt to a 

constantly changing landscape. This has 

led to some adopting a ‘wait and see’ 

approach to decision-making. This is 

exacerbated as macro-political issues 

Comfortable, quality environments 

promote healthy living and working, 

In a rapidly changing world, where 

shifting trends inﬂuence how we live, 

whilst encouraging happiness, wellbeing, 

work, shop and play, cities will only 

trust and social interaction. In addition, 

a building’s design, automation, energy 

management systems and surrounding 

meet their growth challenges if they 

support innovation and stay relevant. 

To do so requires designing for 

environment should all drive productivity. 

radical ﬂexibility suited to the 

Providing a customisable, agile space 

catchment area, so local people, 

companies and talent – as well as 

meeting areas, amenities and health and 

consumers and visitors – will choose 

wellbeing facilities are key to helping 

to live, work and shop there.

businesses to grow.

detract from and delay progress in major 

with IT connectivity, collaborative 

areas, such as housing.

 83.1%
of the UK population was urban in 2017 
compared to 82.9% in 2016 (The World 
Bank, 2018).

 #1
consideration for most businesses’ 
headquarter moves today is proximity 
to top talent (JLL Real Views, 2018).

 Four quarters

 >Two-thirds

 900,000

in succession business investment has 

of organisations are taking steps to 

creative sector jobs expected to be 

fallen, the largest spell of continuous 

decline since the great ﬁnancial crisis 

(ONS, 2019).

identify and reduce workplace stress, an 

created nationally by 2030 (Centre for 

increase on previous years (CIPD, 2018).

London, 2018). That means businesses 

need ﬂexible, innovative workplaces to 

meet their evolving needs.

c.1 million
homes could be built on existing derelict 
brownﬁeld land in England (CPRE, 2019) but 
it doesn’t yet have planning permission. This 
land could be used to provide mixed-use 
projects around transport hubs and help to 
meet Government’s target of 300,000 new 
homes every year by 2025.

£30,000
is believed to be the true cost of 
replacing an employee (Oxford 
Economics, 2014). To attract and 
retain top talent, companies need 
innovative work spaces, in high-
growth locations where people can 
move seamlessly between work and 
personal time. 

#1

68%

900,000

most powerful ﬁnancial centre in the 

world, London will continue to attract 

international businesses to headquarter 

and invest in the UK capital (Savills, 

of public sector workers believe 

employees’ mental and physical 

wellbeing are on the agenda of senior 

leaders (CIPD, 2018). Government and 

2019). Other major cities – such as Dublin 

businesses are pushing for quality 

hectares of freehold land in England 

and Wales (Telereal Trillium report, 

2016) owned by public sector 

organisations could support delivery 

of inspirational and agile mixed-use 

and Manchester – should also beneﬁt as 

environments that promote healthy living 

places, shaped to meet evolving 

companies base themselves around 

and working.

talent hubs.

We work with the public sector to unlock 
potential and generate returns from their 
existing assets. Typically, these sites are too 
complex for REITs and too mixed in use for 
housebuilders, but they suit us perfectly. 
Our opportunity includes c.10 million sq.ft. 
of land accessible by TfL and further 
developable land owned by the GLA, 
following our appointment to The London 
Development Panel in 2018.

We understand the importance of 
creating amenity-rich work spaces, 
that provide positive and productive 
workplace experiences that support 
mental and physical wellbeing, and 
promote employee satisfaction. Our 
schemes are created with occupiers in 
mind. They provide a ﬂexible business 
solution giving companies – of any 
shape, size or purpose – an edge to 
attract and retain talent, and in turn 
increase their competitiveness.

business and community needs, whilst 

allowing local authorities to generate 

income from existing assets. 

We understand that real estate is more 

than a physical product; it is a ﬂexible, 

customer-centric service. That is why 

we are exploring innovation in property 

Our size and ﬂexibility mean we can 

We understand the importance of 

anticipate and respond quickly to change. 

placemaking to bring communities 

We work collaboratively with Government 

together. We listen to local needs to 

across all parties, towards policies and a 

regulatory framework that will help local 

communities to prosper. Dublin has 

become the most popular location for 

ensure our schemes respect the local 

heritage of the place, whilst encouraging 

technology – including investing in 

healthy, active lifestyles. Typically, our 

WiredScore, Matterport and Plus X – to 

buildings offer green space to encourage 

give ﬂedgling businesses and SMEs an 

ﬁnancial services ﬁrms looking to relocate 

cycling and walking, as well as a range of 

opportunity to grow, and – importantly 

post-Brexit (EY, 2019), showing increasing 

leisure amenities, such as gyms, dance 

opportunities in this core geography, 

whilst our schemes in the Cambridge/

Oxford corridor align with Government’s 

focus on science and innovation. 

halls, yoga studios, bike facilities and 

entertainment. 

– to see ﬁrst-hand new cutting-edge 

technologies that could inform our 

approach, give us an edge and 

transform the future of real estate.

Relevant strategic priorities:

Relevant risks and uncertainties:

1   2   3   4   5

A   B   D   E   F

1   2   3   4

A   B   F

2   4

A   B   E   F

1   2   3   4

A   E   F

1   2   3   4   5

A   B   C   D   E   F

42  |  U and I Group PLC
Annual Report & Accounts 2019

 
MAJOR THEMES

Description

Change in year

Key:
Our strategic priorities
1  People ﬁrst approach
2  Grow pipeline
3  Drive value
4  Deliver excellent returns
5   Maintain capital discipline  

and efﬁciency

Risks and uncertainties
A  Market risk
B  Scarcity of viable opportunities
C  Counterparty risk
D  Banking risk
E  Construction risk
F  Planning risk

3.
POLITICAL AND 
REGULATORY 
UNCERTAINTY

4.
WELLBEING AND 
SUSTAINABILITY

5.
FUTURE 
PROOFING

A growing UK population expected to reach 

Several major economies are either 

c.74 million by 2039 – a 12% increase on 

today (ONS, 2017). Over 80% of this is 

urban, predicted to reach c.85% in 2039 

(UN, 2018). This is putting pressure on our 

towns and cities to offer the required 

at or close to full employment, yet in 

2018 more companies than ever 

before found it hard to recruit staff 

(British Chambers of Commerce, 

2019). Attractive workplaces that meet 

infrastructure, public places, services and 

changing employee needs, whilst 

amenities – as well as new homes. Employers 

delivering something extra, are 

need to be in cities that give access to the 

increasingly critical to engaging 

workforce they want. 

employees, enhancing individual and 

collective productivity and enhancing 

a business’s overall performance.

Brexit discussions, leadership 
challenges, elections and changes in 
regulation create risks and opportunities 
as companies and consumers adapt to a 
constantly changing landscape. This has 
led to some adopting a ‘wait and see’ 
approach to decision-making. This is 
exacerbated as macro-political issues 
detract from and delay progress in major 
areas, such as housing.

Comfortable, quality environments 
promote healthy living and working, 
whilst encouraging happiness, wellbeing, 
trust and social interaction. In addition, 
a building’s design, automation, energy 
management systems and surrounding 
environment should all drive productivity. 
Providing a customisable, agile space 
with IT connectivity, collaborative 
meeting areas, amenities and health and 
wellbeing facilities are key to helping 
businesses to grow.

In a rapidly changing world, where 
shifting trends inﬂuence how we live, 
work, shop and play, cities will only 
meet their growth challenges if they 
support innovation and stay relevant. 
To do so requires designing for 
radical ﬂexibility suited to the 
catchment area, so local people, 
companies and talent – as well as 
consumers and visitors – will choose 
to live, work and shop there.

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 83.1%

 #1

of the UK population was urban in 2017 

compared to 82.9% in 2016 (The World 

Bank, 2018).

consideration for most businesses’ 

headquarter moves today is proximity 

to top talent (JLL Real Views, 2018).

 Four quarters
in succession business investment has 
fallen, the largest spell of continuous 
decline since the great ﬁnancial crisis 
(ONS, 2019).

 >Two-thirds
of organisations are taking steps to 
identify and reduce workplace stress, an 
increase on previous years (CIPD, 2018).

 900,000
creative sector jobs expected to be 
created nationally by 2030 (Centre for 
London, 2018). That means businesses 
need ﬂexible, innovative workplaces to 
meet their evolving needs.

OPPORTUNITIES FOR U+I

c.1 million

£30,000

homes could be built on existing derelict 

is believed to be the true cost of 

brownﬁeld land in England (CPRE, 2019) but 

replacing an employee (Oxford 

it doesn’t yet have planning permission. This 

Economics, 2014). To attract and 

land could be used to provide mixed-use 

retain top talent, companies need 

projects around transport hubs and help to 

innovative work spaces, in high-

meet Government’s target of 300,000 new 

homes every year by 2025.

growth locations where people can 

move seamlessly between work and 

personal time. 

Our response

We work with the public sector to unlock 

potential and generate returns from their 

We understand the importance of 

creating amenity-rich work spaces, 

existing assets. Typically, these sites are too 

that provide positive and productive 

complex for REITs and too mixed in use for 

housebuilders, but they suit us perfectly. 

Our opportunity includes c.10 million sq.ft. 

of land accessible by TfL and further 

developable land owned by the GLA, 

following our appointment to The London 

Development Panel in 2018.

workplace experiences that support 

mental and physical wellbeing, and 

promote employee satisfaction. Our 

schemes are created with occupiers in 

mind. They provide a ﬂexible business 

solution giving companies – of any 

shape, size or purpose – an edge to 

attract and retain talent, and in turn 

increase their competitiveness.

Relevant strategic priorities:

Relevant risks and uncertainties:

1   2   3   4   5

A   B   D   E   F

1   2   3   4

A   B   F

#1
most powerful ﬁnancial centre in the 
world, London will continue to attract 
international businesses to headquarter 
and invest in the UK capital (Savills, 
2019). Other major cities – such as Dublin 
and Manchester – should also beneﬁt as 
companies base themselves around 
talent hubs.

68%
of public sector workers believe 
employees’ mental and physical 
wellbeing are on the agenda of senior 
leaders (CIPD, 2018). Government and 
businesses are pushing for quality 
environments that promote healthy living 
and working.

900,000
hectares of freehold land in England 
and Wales (Telereal Trillium report, 
2016) owned by public sector 
organisations could support delivery 
of inspirational and agile mixed-use 
places, shaped to meet evolving 
business and community needs, whilst 
allowing local authorities to generate 
income from existing assets. 

Our size and ﬂexibility mean we can 
anticipate and respond quickly to change. 
We work collaboratively with Government 
across all parties, towards policies and a 
regulatory framework that will help local 
communities to prosper. Dublin has 
become the most popular location for 
ﬁnancial services ﬁrms looking to relocate 
post-Brexit (EY, 2019), showing increasing 
opportunities in this core geography, 
whilst our schemes in the Cambridge/
Oxford corridor align with Government’s 
focus on science and innovation. 

We understand the importance of 
placemaking to bring communities 
together. We listen to local needs to 
ensure our schemes respect the local 
heritage of the place, whilst encouraging 
healthy, active lifestyles. Typically, our 
buildings offer green space to encourage 
cycling and walking, as well as a range of 
leisure amenities, such as gyms, dance 
halls, yoga studios, bike facilities and 
entertainment. 

We understand that real estate is more 
than a physical product; it is a ﬂexible, 
customer-centric service. That is why 
we are exploring innovation in property 
technology – including investing in 
WiredScore, Matterport and Plus X – to 
give ﬂedgling businesses and SMEs an 
opportunity to grow, and – importantly 
– to see ﬁrst-hand new cutting-edge 
technologies that could inform our 
approach, give us an edge and 
transform the future of real estate.

2   4

A   B   E   F

43  |  U and I Group PLC
Annual Report & Accounts 2019

1   2   3   4

A   E   F

1   2   3   4   5

A   B   C   D   E   F

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OUR MARKET
CONTINUED

Key:
Our strategic priorities
1  People ﬁrst approach
2  Grow pipeline
3  Drive value
4  Deliver excellent returns
5   Maintain capital discipline  

and efﬁciency

SECTOR THEMES

Description

Change in year

OPPORTUNITIES FOR U+I 

Our response

Risks and uncertainties
A  Market risk
B  Scarcity of viable opportunities
C  Counterparty risk
D  Banking risk
E  Construction risk
F  Planning risk

1.
TECHNOLOGICAL 
INNOVATION

2.
AFFORDABILITY

Rapidly advancing technology is changing 
attitudes and increasing demand for ﬂexible 
living, working and social spaces. This 
inﬂuences the design and make-up of real 
estate, reinforcing the importance of 
innovative and ﬂexible spaces close to good 
transport links and anchored by amenities. 

Affordability is a key factor for 
decision-makers across residential 
and commercial property. The 
purchasing power of both individuals 
and companies has been impacted by 
numerous factors, including low 
wages, declining conﬁdence and 
pressure to retain top talent. Hit by a 
slowdown in sales, retailers are also 
demanding more affordable rents.

 £184 billion
value of the digital sector, as UK tech 
expanded nearly 3x faster than the rest of 
the economy in 2018 (Tech Nation, 2018), 
with London a particular focus of activity, 
making the need for innovative spaces for 
this tech talent more acute than ever. 

 9.9%
fall in home ownership in the UK since 
the ﬁnancial crisis (Bloomberg 
Economics, 2018), with the average 
home in England in 2017 costing almost 
8x more than the average annual pay 
packet (Shelter, 2019).

58%
of workers say their workplace enables 
them to work productively (Savills, 2019). 
This drives the need for smart, creative 
building design and access to amenities 
and leisure facilities so people can move 
seamlessly between work, home and 
social activities. 

78%
of people believe public sector 
organisations should ensure their 
unused land is developed to provide 
housing and create new places for 
local communities (YouGov, 2018). 
The need for attractive, mixed-use sites 
where people can afford to live, work 
and socialise is of growing importance, 
particularly as more homes would 
increase sales and reduce prices.

The appointment of a new Creative Director 
in March 2019 brings fresh ideas, creativity 
and experience as we seek to challenge 
norms and test boundaries so that we can 
deliver the most innovative mixed-use 
designs, that support greater ﬂexibility and 
connectivity. Crucially too, these must be 
locally relevant, not just for today but also 
in the future. 

In today’s world, agile, affordable, 
convenient environments are 
frequently more important than 
postcode. We operate in the mid-
market where there is the greatest 
shortfall in both residential and 
commercial space and we focus 
on three core geographies where 
demand remains high. 

Traditional retail is under intense 

pressure, hit by weak GDP growth, 

€72.4 billion of new capital is expected 

to ﬂow into global real estate in 2019, 

the explosion of ecommerce and rising 

as institutions seek yield. Gateway cities 

costs. Physical stores have an important 

are the most likely beneﬁciaries of this 

role to play but, to remain relevant, 

there is a growing need for mixed-use 

investment (Inrev, Andrev and Prea, 

2019). Weak Sterling and a strong 

environments that provide attractive and 

regulatory framework make the UK 

accessible shopping, leisure, culture and 

an attractive destination for overseas 

community experiences. Space needs to 

investors, seeking out robust local 

be either experiential and/or convenient, 

economies, occupational activity and 

whilst also engaging or inspiring.

the prospect of rental growth. 

 >2,400

 2.6%

shops disappeared from Britain’s top 500 

increase in allocations to property – from 

high streets in 2018, the highest level on 

record, with chain stores closing at their 

fastest rate in nine years (PwC, 2019).

8.9% in 2013 to a forecast 10.6% in 2019 

(Hodes Weill & Associates, 2018).

c.18%

>10%

forecast growth of convenience market 

average global allocation to real estate, 

between 2018 and 2023 (IGD, 2018), 

with 90% of UK retail sales touching 

a physical store (CBRE, 2019). Assets 

providing the right retail experience to 

the relevant consumer whilst remaining 

affordable to occupiers will continue 

to perform.

compared to less than 9% previously 

(JLL, 2019). The search for returns is 

pushing investors up the risk curve to 

pursue development opportunities.

We recognise the importance of context 

We understand the appetite for exciting 

and content for all our assets. The 

appointment of a new Head of Content 

in March 2019 will ensure we continue to 

anticipate and meet user needs, fulﬁlling 

our promises to deliver life enhancing, 

community-led places. Sustaining retail 

as part of a reinvigorated mixed-use 

centre is a challenge but consumers are 

regeneration schemes in high-growth 

geographies, de-risked through a trusted 

partner, that can provide access to a 

growing portfolio, local expertise and 

relationships. We are offering capital 

partners the opportunity to fund and 

share in the success of three of our PPP 

schemes, providing them with access to 

still willing to pay for experiences, if they 

rarely available land, whilst conferring 

are the right ones for them.

beneﬁts and efﬁciencies for U+I.

Relevant strategic priorities:

Relevant risks and uncertainties:

1   2   3   4

A   B   E   F

1   2   3   4

A   B   E   F  

1   2   3   4   5

A   B   C   D   E   F  

2   3   4   5

A   B   C   D   E   F

44  |  U and I Group PLC
Annual Report & Accounts 2019

 
SECTOR THEMES

Description

Change in year

Our response

OPPORTUNITIES FOR U+I 

58%

Rapidly advancing technology is changing 

Affordability is a key factor for 

attitudes and increasing demand for ﬂexible 

decision-makers across residential 

living, working and social spaces. This 

inﬂuences the design and make-up of real 

estate, reinforcing the importance of 

and commercial property. The 

purchasing power of both individuals 

and companies has been impacted by 

innovative and ﬂexible spaces close to good 

numerous factors, including low 

transport links and anchored by amenities. 

wages, declining conﬁdence and 

pressure to retain top talent. Hit by a 

slowdown in sales, retailers are also 

demanding more affordable rents.

 £184 billion

 9.9%

value of the digital sector, as UK tech 

expanded nearly 3x faster than the rest of 

the economy in 2018 (Tech Nation, 2018), 

with London a particular focus of activity, 

making the need for innovative spaces for 

this tech talent more acute than ever. 

fall in home ownership in the UK since 

the ﬁnancial crisis (Bloomberg 

Economics, 2018), with the average 

home in England in 2017 costing almost 

8x more than the average annual pay 

packet (Shelter, 2019).

of workers say their workplace enables 

them to work productively (Savills, 2019). 

This drives the need for smart, creative 

building design and access to amenities 

and leisure facilities so people can move 

seamlessly between work, home and 

social activities. 

78%

of people believe public sector 

organisations should ensure their 

unused land is developed to provide 

housing and create new places for 

local communities (YouGov, 2018). 

The need for attractive, mixed-use sites 

where people can afford to live, work 

and socialise is of growing importance, 

particularly as more homes would 

increase sales and reduce prices.

The appointment of a new Creative Director 

In today’s world, agile, affordable, 

in March 2019 brings fresh ideas, creativity 

convenient environments are 

and experience as we seek to challenge 

norms and test boundaries so that we can 

deliver the most innovative mixed-use 

frequently more important than 

postcode. We operate in the mid-

market where there is the greatest 

designs, that support greater ﬂexibility and 

shortfall in both residential and 

connectivity. Crucially too, these must be 

locally relevant, not just for today but also 

commercial space and we focus 

on three core geographies where 

in the future. 

demand remains high. 

Relevant strategic priorities:

Relevant risks and uncertainties:

1   2   3   4

A   B   E   F

1   2   3   4

A   B   E   F  

3.
RETAIL 
POLARISATION

4.
CHANGING 
FOCUS OF 
CAPITAL

Traditional retail is under intense 
pressure, hit by weak GDP growth, 
the explosion of ecommerce and rising 
costs. Physical stores have an important 
role to play but, to remain relevant, 
there is a growing need for mixed-use 
environments that provide attractive and 
accessible shopping, leisure, culture and 
community experiences. Space needs to 
be either experiential and/or convenient, 
whilst also engaging or inspiring.

€72.4 billion of new capital is expected 
to ﬂow into global real estate in 2019, 
as institutions seek yield. Gateway cities 
are the most likely beneﬁciaries of this 
investment (Inrev, Andrev and Prea, 
2019). Weak Sterling and a strong 
regulatory framework make the UK 
an attractive destination for overseas 
investors, seeking out robust local 
economies, occupational activity and 
the prospect of rental growth. 

RESPONDING TO MARKET THEMES:
PRESTON BARRACKS,
LONDON CITY REGION

We are motivated to become the 
best mixed-use regeneration 
developer in the UK and Dublin. 
To do so, we recognise that we need 
to constantly review our business 
model and the market in which we 
operate to ensure we continue to be 
relevant, not just now, but for the 
future. Demand for mixed-use 
regeneration is growing and our 
distinctive approach and trust, built 
up over 25+ years, create barriers for 
others, and opportunities for us.

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 >2,400
shops disappeared from Britain’s top 500 
high streets in 2018, the highest level on 
record, with chain stores closing at their 
fastest rate in nine years (PwC, 2019).

 2.6%
increase in allocations to property – from 
8.9% in 2013 to a forecast 10.6% in 2019 
(Hodes Weill & Associates, 2018).

c.18%
forecast growth of convenience market 
between 2018 and 2023 (IGD, 2018), 
with 90% of UK retail sales touching 
a physical store (CBRE, 2019). Assets 
providing the right retail experience to 
the relevant consumer whilst remaining 
affordable to occupiers will continue 
to perform.

>10%
average global allocation to real estate, 
compared to less than 9% previously 
(JLL, 2019). The search for returns is 
pushing investors up the risk curve to 
pursue development opportunities.

We recognise the importance of context 
and content for all our assets. The 
appointment of a new Head of Content 
in March 2019 will ensure we continue to 
anticipate and meet user needs, fulﬁlling 
our promises to deliver life enhancing, 
community-led places. Sustaining retail 
as part of a reinvigorated mixed-use 
centre is a challenge but consumers are 
still willing to pay for experiences, if they 
are the right ones for them.

We understand the appetite for exciting 
regeneration schemes in high-growth 
geographies, de-risked through a trusted 
partner, that can provide access to a 
growing portfolio, local expertise and 
relationships. We are offering capital 
partners the opportunity to fund and 
share in the success of three of our PPP 
schemes, providing them with access to 
rarely available land, whilst conferring 
beneﬁts and efﬁciencies for U+I.

1   2   3   4   5

A   B   C   D   E   F  

45  |  U and I Group PLC
Annual Report & Accounts 2019

2   3   4   5

A   B   C   D   E   F

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Faced with a deﬁcit of suitable 
accommodation to meet demand 
in this long-term derelict former 
Ministry of Defence site, and an 
urgent battle to attract and retain 
top talent, Brighton & Hove City 
Council and University of Brighton 
asked U+I to help to establish the 
Lewes Road area as a thriving new 
academic and economic corridor 
in Brighton. 

In one of Brighton’s biggest ever 
regeneration projects, our 
£200 million GDV Preston Barracks 
project will provide 369 new homes, 
534 student bedrooms in managed 
halls of residence, a new home for 
the University’s Business School and 
a 50,000 sq.ft. innovation hub, called 
Plus X, to support local start-ups and 
SMEs. Respecting the site’s rich 
heritage, designed to encourage 
innovation and wellbeing, the new 
Preston Barracks scheme will 
support the retention of top talent 
and create over 1,500 jobs, injecting 
more than £280 million into the local 
economy over the next ten years.

 
 
 
 
OUR MARKET
CONTINUED

46  |  U and I Group PLC
Annual Report & Accounts 2019

WE FOCUS ON THREE 
HIGH-GROWTH GEOGRAPHIES.

London City Region (deﬁned as within one hour’s 
commute from London), Manchester and Dublin 
are thriving markets, rich in heritage, culture and 
potential. These well-connected knowledge 
anchors are also experiencing sustained 
population growth and have strong, above-
average employment dynamics which are forecast 
to continue in the near, medium and longer-term. 

Crucially, they share four key attributes, 
all of which we believe are major drivers of 
economic growth:

1.
TALENT

2.
TOURISM

3.
TRANSPORT

4.
TOLERANCE

Our longstanding presence in these regions has 
given us an intimate understanding of the local 
communities, their demographics and their 
evolving needs. We have also had time to develop 
a track record and create a privileged network, 
earning the trust of our stakeholders and driving 
support for our continued expansion plans. 

The following pages report on our four Ts 
by geography.

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LONDON CITY 
REGION

A GLOBAL COMMERCE, TECHNOLOGY 
AND CULTURE HUB

High-growth market 
 – Largest city region in 
Europe; population 
projected to grow by 10% 
by 2026 (ONS)

 – London, South East and 

East of England account for 
approximately half of the 
UK’s economic output 
 – #1 most liquid city in the 
world and most popular 
destination for cross-
border investment into 
real estate

 – European tech capital, with 
highest number of billion 
dollar digital ﬁrms

Top talent
 – Best city in the world for 
university students in QS 
2018 rankings

 – Home to four of the top ten 

universities in the world
 – 22% of students who leave 
their university cities go 
to London

Strong tourism
 – TripAdvisor’s Traveller’s 

Choice 2018 #2 best rated 
destination in the world, 
with c.20 million visitors 
a year

Excellent transport links
 – Leading global city for air 
connectivity with six major 
international airports 
travelling to 400 
destinations

 – 18 major stations and 

routes to mainland Europe 
by High Speed Rail, 
Channel Tunnel and 
Eurostar

 – Joint busiest and largest 
radial commuter railway 
network in Europe

Tolerance for diversity
 – Top ten most multi-cultural 

cities in the world 
 – Circa one-third of 

Londoners are foreign-
born; well over 200 
languages are spoken

47  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
OUR MARKET
CONTINUED

DUBLIN

CAPITAL OF THE FASTEST 
GROWING ECONOMY IN THE EU

Top talent
 – European home to four 
of Forbes’ top ten most 
innovative companies in 
the world

 – Youngest population in 

Europe, with a third under 
25 years old

 – Third behind London and 

Madrid of CBRE’s 
November 2018 EMEA 
large tech clusters

Strong tourism
 – 30 million visitors passed 
through Dublin in the last 
12 months

Excellent transport links
 – Over 600 daily ﬂights to 

185+ destinations

 – Good accessibility by boat, 
train, bus, bike, air, with the 
airport only 10km from the 
city centre and the ferry 
port only 4km

Tolerance for diversity
 – Global Financial Centres’ 
Index Top 30 best places 
in the world to live and 
do business

 – 17% of population in 

Ireland non-Irish nationals 

High-growth market 
 – Sixth most competitive 
economy in the world 
in 2017 and fastest growing 
in the Eurozone

 – Population expected 

to increase by 1 million 
by 2040

 – Financial Times’ #1 ‘large’ 
city destination for foreign 
direct investment in 2018 
(Singapore and London 
best ‘major’ city)

 – Third largest EMEA tech 
cluster in Europe after 
London and Madrid

48  |  U and I Group PLC
Annual Report & Accounts 2019

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MANCHESTER

UK’S NORTHERN POWERHOUSE AND 
MOST ECONOMICALLY IMPORTANT
CITY OUTSIDE LONDON

Top talent
 – One of the largest student 
populations in Europe with 
>100,000 students and 
home to two of the most 
applied for universities
 – 54% of students stay in 

the area after graduating 
(second only to London) 
 – University of Manchester 

has 25 Nobel Prize winners 
and the most Nobel 
Laureates on their staff

Strong tourism
 – 1.38 million visitors a year 
and second most visited 
city in England by tourists, 
after London 

Tolerance for diversity
 – The Economist’s 2018 
#1 ‘most liveable city’ 
in the UK

 – Most culturally diverse 

city in Europe after London 
and Paris, with over 200 
languages spoken

Excellent transport links
 – Second most connected 
city in UK for transport

 – Busiest airport in UK 
outside London, with 
capacity to grow from 
28 million to c.50 million 
passengers a year

High-growth market 
 – UK’s ‘second’ city and third 

most inﬂuential city 
in Europe 

 – c.2.7 million population 

in 2018 and second most 
populous urban area in 
the UK

 – Most successful city for 
attracting foreign direct 
investment outside London

 – Home to eighty of the 

FTSE 100

 – 20 million people live within 

two hour’s commute
 – Biggest digital and tech 

hub in the UK after London

49  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
OUR INTEGRATED BUSINESS MODEL

MARKET CONTEXT
Our business model is 
aligned with a number of 
major global macro and 
sector trends. As such, there 
is an urgent need for the type 
of mixed-use regeneration 
projects we deliver.

More information about our 
markets on page 42

WELLBEING AND 
SUSTAINABILITY
Over two-thirds of 
organisations are taking 
steps to identify and reduce 
workplace stress, an 
increase on previous 
years.4

WAR  
FOR TALENT
Proximity to top 
talent is the #1 
consideration for 
most businesses’ 
headquarter 
moves today.2

TECHNOLOGICAL 
INNOVATION

CHANGING 
FOCUS OF 
CAPITAL

POLITICAL AND 
REGULATORY 
UNCERTAINTY
Business investment has  
fallen for four quarters in 
succession, the largest spell 
of continuous decline since 
the ﬁnancial crisis.3

URBANISATION
83.1% of the UK population was 
urban in 2017 compared to  
82.9% in 2016.1

RETAIL 
POLARISATION

FUTURE 
PROOFING
900,000 new creative 
sector jobs expected to 
be created nationally 
by 2030.5

AFFORDABILITY

WE HAVE A DISTINCTIVE 
APPROACH
We have built a differentiated 
business, gaining the trust of 
our partners, earning a 
reputation for creativity and 
collaboration, and building 
a strong team to drive 
performance.

The combination of our 
approach and market need 
is fundamental to growth, 
helping us to deliver great 
places, create brand value, 
drive our pipeline and achieve 
our purpose. 

More about our future 
ambitions on page 34

Sources: 
1.  The World Bank, 2018
2.  JLL, 2018
3.  ONS, 2019
4.  CIPD, 2018
5.  Centre for London, 2018

50  |  U and I Group PLC
Annual Report & Accounts 2019

PEOPLE
We are motivated by 
a shared curiosity, the 
opportunity to work on 
challenging projects and 
a determination to deliver for 
all our stakeholders.

INVESTORS
We have paid interim, ﬁnal 
and supplemental dividends 
since our formation in 2015, 
as we seek to align our 
shareholders with the success 
of the business.

UNLOCKING LONG-TERM  
VALUE FOR ALL THROUGH 
REGENERATION

COMMUNITIES
We strive to develop great 
places to live, work, study and 
socialise, encouraging 
wellbeing and stimulating 
economic growth.

PARTNERS
Working together on 
ambitious projects which 
stimulate creativity, foster 
innovation and provide access 
to exciting funding 
opportunities, we generate 
real value for both the public 
and private sector.

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Key:
Relevant market themes
1  Urbanisation
2  War for talent
3  Political and regulatory uncertainty
4  Wellbeing and sustainability
5  Future prooﬁng

Relevant risks and uncertainties
A  Market risk
B  Scarcity of viable opportunities
C  Counterparty risk
D  Banking risk
E  Construction risk
F  Planning risk

HOW WE UNLOCK AND 
ADD VALUE

OUR THREE VALUE CREATING 
BUSINESSES

PPP
Transforming underestimated 
sites into vibrant mixed-use 
communities.

Trading
Improving land value, 
primarily through planning or 
asset management.

Investment
Smart asset management 
where there is regeneration 
potential.

31%of gross assets

39%of gross assets

30%of gross assets

Value creating activities:
Large, long-term 
regeneration projects
We have an equity-light 
approach with the public or 
private sector which seeds 
the partnership with land. 

We capture value through 
mixed-used development, 
typically including some 
residential, ofﬁce, retail 
and leisure.

Value creating activities:
Short-term trading 
opportunities
We take advantage of 
mis-priced assets.

We secure land and add 
value through enhanced 
planning consents, change 
of use or asset management.

Value creating activities:
Asset management
We add value through active 
asset management of income 
producing sites. They are our 
anchor for development and 
trading activities.

Financial characteristics: 
Multi-year proﬁts.

Financial characteristics: 
1–3 year proﬁts.

Proﬁt driver: 
Developing site and 
subsequent letting/disposal.

Proﬁt driver: 
Disposal.

Uniquely positioned:
Quality, network and trust 
give us a licence to operate:
 – We have a high success 
rate in securing public 
private partnerships
 – We are a public sector 

partner of choice and TfL 
and GLA panel members, 
giving us privileged access 
to new opportunities

Uniquely positioned:
We are good at getting 
planning permission:
 – Our success rate is >90%, 
mitigating planning risk

 – We have long-term 

relationships with decision 
makers

 – We optimise mix of use and 
density to create value 
through planning

Financial characteristics: 
Recurring stable income and 
capital growth.

Proﬁt driver: 
Potential sale in excess of 
book value or capital value 
through revaluation.

Uniquely positioned:
Our proactive approach and 
local knowledge drives value:
 – Asset management 

initiatives help increase 
occupancy and support 
higher rents

 – Our regeneration focus 
allows us to transition 
PPP/trading projects 
across to our investment 
portfolio where we can 
nurture them to gain further 
long-term value

Relevant market themes
1   2   3   4   5  

Relevant market themes

Relevant market themes

1   2   3   4   5  

1   2   3   4   5  

Relevant risks and 
uncertainties
A   B   C   D   E   F

Relevant risks and 
uncertainties
A   B   C   D   E   F

Relevant risks and 
uncertainties
A   B   C   D   F

Securing land and our six  
key inputs
We secure land for 
community-focused 
regeneration and mixed-use 
development projects. These 
are often underestimated 
and overlooked sites, full of 
heritage and potential, but 
too complex for other 
developers.

1. People
A motivated team of experts 
with the right mix of 
experience and skills to 
deliver the ambitious projects 
our partners and communities 
expect and deserve.

2. Purpose
Driven by our values, we have 
the vision to unlock potential 
where others can’t and the 
intelligence, imagination and 
audacity to take ideas 
forward and beneﬁt all our 
stakeholders.

3. Assets
We ﬁnd underloved, 
overlooked sites which we 
can buy, transform, revive 
and nurture, while respecting 
and restoring their heritage.

4. Partners
Regeneration only works 
through genuine partnership. 
We work collaboratively with 
our partners and bring 
together the best people 
to challenge ideas, innovate 
and ultimately deliver 
positive change.

5. Financial strength
A strong, efﬁcient balance 
sheet, an equity-light 
approach and access to 
ﬁnance mean we can move 
quickly when we ﬁnd the 
right opportunities where 
we can unlock potential.

6. Reputation
Over the last 25+ years we 
have built real trust with 
partners and communities. 
Our reputation means we are 
increasingly selected to bid 
for exciting new business 
opportunities.

51  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
 
OUR STRATEGY
RESPONDING TO MARKET 
THEMES

STRATEGIC PRIORITY #1:
PEOPLE FIRST

Progress against KPIs and 
FY2019 highlights

Description 
Our greatest strength is our 
people and their belief in 
what we do – both our 
dedicated team at U+I and 
the wider circle of partners 
and communities we work 
with every day. Their 
insights, expertise and 
commitment to our purpose 
make us tick, helping us to 
keep improving so we can 
deliver successful projects 
and sustainable returns for 
our shareholders.

Context
The Government’s industrial 
strategy for a productive, 
wealth-creating economy 
outlined ﬁve foundations of 
productivity – ideas, people, 
infrastructure, places and 
business environment.

88%

Employee satisfaction

1

new Non-executive Director 
appointment

Future objectives and 
targets
 – Continue to invest in 

quality people through 
a new talent programme 
that will drive our 
distinctive approach and 
support delivery of >90% 
employee satisfaction 
every year

 – Ensure our values of 

imagination, intelligence 
and audacity underpin 
everything that we do so 
we can deliver thriving 
mixed-use places that 
support local communities 
and drive productivity
 – Regular feedback to the 
Board through creation 
of a workforce advisory 
panel, led by our new 
independent Non-
executive Director 

Relevant market themes:

1   2   4   5

Relevant risks and 
uncertainties:
A   B   C  

First Thursday all company meeting.

52  |  U and I Group PLC
Annual Report & Accounts 2019

Our market and sector 
themes are discussed in 
detail on page 42

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STRATEGIC PRIORITY #2:
GROW PIPELINE

Progress against KPIs and 
FY2019 highlights

Description 
We work with trusted public 
and private sector partners 
to grow our pipeline of 
major PPP and smaller 
trading projects in our three 
core geographies. We focus 
on overlooked sites where 
there is a need for 
regeneration, a supportive 
planning context and an 
evident undersupply of 
homes, jobs and amenities. 

Our equity-light approach 
reduces our ﬁnancial 
exposure to any one 
individual project, providing 
signiﬁcant upside potential. 
Our balance of 
development, trading and 
investment mitigates risk.

Context
20% of all land in London is 
owned by public bodies and 
15% in our cities across 
England and Wales (House 
of Lords Select Committee, 
2017). Much of this is 
under-utilised and under-
developed. Mixed-use 
regeneration schemes can 
help the public sector to 
maximise those assets, 
whilst serving local 
communities and boosting 
economic growth. 

£42.8m

against £45–50 million 
development and trading 
gains target (FY2018: 
£68.3 million)

>£11bn

GDV of portfolio, from 
>£7 billion at FY2018

Future objectives and 
targets
 –  Increase shorter-term 

pipeline of trading assets 
that will deliver gains in 
FY2022/23, match our 
risk proﬁle, geographic 
footprint and sustainable 
regeneration focus, 
through a disciplined 
approach

 – Supported by our existing 
partnerships with TfL and 
GLA, nurture and build 
relationships with the 
public and private sector, 
creating access to new 
opportunities

 – Grow our development 
pipeline in line with our 
strategy of fewer, larger 
projects, where we can 
add and realise the most 
value, targeting rolling off 
>10 smaller projects in 
FY2020

 – £35–45 million 

development and trading 
gains targeted for 
FY2020; £45–55 million 
target for FY2021

Relevant market themes:

1   2   3   4   5

Relevant risks and 
uncertainties:
A   B   C   D   E   F

U+I has been appointed 
as master developer to 
transform the current water 
recycling centre in North 
Cambridge into a major 
residential-led mixed-use 
urban quarter.

53  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
OUR STRATEGY
CONTINUED

STRATEGIC PRIORITY #3:
DRIVE VALUE

Progress against KPIs and 
FY2019 highlights

Description 
Focused on regeneration, 
our integrated development, 
trading and investment 
portfolio drives our growth, 
plays to our strengths and 
mitigates risk. 

We secure opportunities, 
add value through planning 
and realise value through 
the development, sale, or 
nurturing of assets in our 
investment portfolio.

Context
Companies with a higher 
social value have been 
outperforming other stocks 
over the last ﬁve years 
(Drucker Institute Corporate 
Effectiveness Index, 2019). 

In a competitive landscape, 
top performance requires 
experience, understanding, 
close relationships and 
active asset management 
initiatives. 

Institute of Imagination.

-1%

investment portfolio 
total return against 10% per 
annum target (FY2018: 10.1%)

£4.6m

value created from asset 
management initiatives 
(FY2018: £6.5 million)

Future objectives and 
targets
 – Retain quality regeneration 

projects in investment 
portfolio, to nurture for 
the long term, whilst 
beneﬁting from early 
investment and the added 
value generated through 
planning, development 
and asset management 
 – Secure planning consents 
for signiﬁcant projects 
including 8 Albert 
Embankment, Landmark 
Court and Mayﬁeld

 – Improve performance of 
investment portfolio 
through asset 
management, strategic 
acquisitions, disposal of 
non-core assets and 
retention of development 
and trading assets

 – Targeting 10% total return 
in investment portfolio in 
FY2020 and average 10% 
per annum 

Relevant market themes:

1   2   4   5

Relevant risks and 
uncertainties:
A   B   C   D   E   F

54  |  U and I Group PLC
Annual Report & Accounts 2019

The Old Vinyl Factory, Hayes.

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STRATEGIC PRIORITY #4:
DELIVER EXCELLENT 
RETURNS

Description 
Maintaining the balance of 
longer-term PPP projects, 
shorter-term trading activity 
and recurring revenue from 
the investment portfolio 
means we can generate 
consistent returns through 
the property cycle.

Our specialist platforms 
help us to generate 
additional revenue streams 
through off-balance sheet 
activity. Funded by large-
scale capital partners, 
they allow us to deliver 
more projects, using the 
same resources.

Context
Average global allocations 
to real estate are believed 
to have increased to >10%, 
and are set to grow as the 
sector provides higher 
yields than other asset 
classes (JLL, 2019). 
Businesses with a 
diversiﬁed offer, at the heart 
of long-term growth trends, 
are likely to be the greatest 
beneﬁciaries. 

Progress against KPIs and 
FY2019 highlights

0.9%

total return against 12% 
average per annum target 
(FY2018: 12.2%)

£360.1m

basic NAV (FY2018: 
£379.3 million)

£6.3m

proﬁt before tax (FY2018: 
£48.2 million)

Future objectives and 
targets
 – Consistently monitor 
capital allocation to 
maintain balance across 
PPP, trading and 
investment portfolios

 – Continue to de-risk 

development process 
through forward sales 
and forward funding to 
build pipeline of through 
cycle projects, supporting 
long-term capital 
efﬁciency 

 – Secure capital partner(s) 
to fund up to three of our 
major regeneration 
projects

Relevant market themes:

1   2   3   4   5

Relevant risks and 
uncertainties:
A   B   C   D   E   F

STRATEGIC PRIORITY #5:
MAINTAIN CAPITAL 
DISCIPLINE AND EFFICIENCY

Description 
By actively managing an 
efﬁcient balance sheet with 
appropriate gearing and 
a sizeable cash buffer, 
we mitigate against 
development exposure and 
ﬁnancial leverage risks.

Where we have excess 
capital on our balance 
sheet, we use our strong 
cash ﬂows to reinvest, 
pay-down debt or return 
capital to shareholders, to 
align them with our success. 
We have a clear policy for 
ordinary dividends and 
supplemental dividends, 
paid out every year since 
U+I was formed.

Context
1.2% economic growth 
forecast in 2019 (BCC, 
2019), reﬂecting Brexit-
induced economic and 
political uncertainty and 
a less benign global 
environment. Prudent 
companies that maintain 
efﬁcient balance sheets 
and manage their capital, 
will be best placed to 
mitigate against adverse 
external risks.

Progress against KPIs and 
FY2019 highlights

38.6%

gearing against 40–50% 
on balance sheet target 
(FY2018: 31.4%)

10.0p

total dividend (FY2018: 
17.9p), including 4.1p 
supplemental dividend 
(FY2018: 12.0p)

£2.5m

reduction in annualised net 
recurring overheads

Future objectives and 
targets
 – Drive further efﬁciencies 
through co-ordinated 
programme, including 
capitalisation of a total 
of £2.5 million of net 
overhead and securing 
£3.0 million in Development 
Management Fees in 
FY2020

 – Disciplined approach to 
surplus cash, to ensure 
strong balance sheet and 
ability to reward 
shareholders

Relevant market themes:

1   5

Relevant risks and 
uncertainties:
A   C   D   E

55  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
KEY PERFORMANCE 
INDICATORS

DELIVERING AGAINST OUR STRATEGY

Strategic
Key Performance Indicators

Employee satisfaction

Development and trading gains

Investment gains

Total return

Gearing

through the Company’s 
Long-Term Incentive Plan 
(LTIP). The level at which 
our LTIP vests relies on 
a consistent level of 
performance resulting in net 
asset value (NAV) growth 
over a number of years.

The Directors’ annual 
bonuses comprise three 
elements – development and 
trading gains (30%), NAV 
growth (30%) and non-
ﬁnancial strategic and 
personal objectives (40%). 

KPI ﬁgure delivered in 
period: 88% of employees 
agreed that they were 
‘satisﬁed with U+I as a place 
to work’. As this was the ﬁrst 
year we have undertaken this 
all staff survey, there was no 
target but going forward it 
will be >90% employee 
satisfaction.

Status: more work to do

Strategic priority
PEOPLE
FIRST

GROW
PIPELINE

DRIVE
VALUE

DELIVER
EXCELLENT
RETURNS

CAPITAL 
DISCIPLINE AND
EFFICIENCY

More details of Directors’ 
remuneration can be found in 
the Remuneration Report on 
page 131.

Non-ﬁnancial KPIs
As a business we have been 
considering ways to make 
ourselves more accountable. 

Over the coming year, we will 
identify three non-ﬁnancial 
KPIs which link to our 
sustainability agenda and 
tie into our people ﬁrst 
approach, a core pillar 
of our strategy. 

We will then start the process 
to baseline these to ensure 
they provide the right metrics 
and targets for us to 
benchmark our progress 
against year-on-year, 
evolving from targets to 
delivery within 3–5 years. 

In the year ahead we will also 
put in place the requisite 
processes to record the 
information, with a view to 
outlining our non-ﬁnancial 
KPIs in FY2020 and reporting 
our ﬁrst data in FY2021.

How we measure it
Bi-annual employee survey 
asking staff to rate their 
satisfaction with U+I as 
a place to work. 

Why it’s important to U+I
Our people are the heartbeat 
of U+I and we are passionate 
about ensuring we nurture 
what we have so we can 
retain the best talent, whilst 
continuing to attract a 
diverse workforce. By 
creating a culture and 
environment where our staff 
can ﬂourish – working on 
exciting projects, where they 
can learn, challenge and keep 
pushing for excellence – we 
can set our company and our 
projects apart. 

Objectives for FY2020
We are reviewing and 
responding to comments 
from our FY2019 survey to 
help us to achieve our target 
of >90% employee 
satisfaction. 

Link to remuneration
Yes

Link to strategic priority 

1   2   3   4   5

Link to market themes 
 – Urbanisation 
 – War for talent
 – Wellbeing and 
sustainability
 – Future prooﬁng

Link to principal risks and 
uncertainties

A   B   C  

Strategic KPIs
The following Key 
Performance Indicators 
(KPIs) are used by the Board 
to measure the success of 
the Group’s performance 
against its strategic priorities.

In our 2018 Annual Report 
and Accounts we added 
‘people ﬁrst’ to our strategy. 
This reﬂects the importance 
of our partners and 
employees to our business 
and aligns with our clear 
purpose of delivering 
socio-economic beneﬁts 
to local communities and 
sustainable long-term returns 
to our shareholders.

In 2019 we have gone further, 
creating a new KPI around 
employee satisfaction, 
to ensure we have clear 
targets across our ﬁve core 
strategic priorities.

Link to remuneration
The remuneration of our 
Directors is closely aligned 
with our ﬁnancial KPIs 

Employee satisfaction KPI: 
N/A in FY2019

88%
N/A

56  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
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KPI ﬁgure delivered in 
period: £42.8 million 
development and trading 
gains

Status: more work to do

KPI ﬁgure delivered in 
period: -1% investment 
portfolio total return

Status: more work to do

How we measure it
Development and trading 
gains are achieved as we sell 
land and assets, where we 
have added value through 
improved planning or asset 
management. As such they 
are a key measure of the 
Group’s progress. 

Why it’s important to U+I
Development and trading 
represents the largest part of 
our business and delivery of 
our targets is validation of our 
business approach. For this 
reason achieving our targets 
represents 30% of our 
Directors’ annual bonus.

How we measure it
Investment portfolio total 
return includes the capital 
growth and income growth 
realised during the ﬁnancial 
year across our investment 
assets.

Why it’s important to U+I
The investment portfolio 
balances our business, 
mitigating risk, whilst 
supporting our overhead 
costs. It is a key driver 
of NAV growth, which 
supports delivery of our 
total return target.

Delivery of 10% total return 
in our investment portfolio 
in current markets will be 
challenging but we remain 
committed to our target.

Objectives for FY2020
£35–45 million development 
and trading gains

Link to remuneration
Yes

Link to strategic priority

1   2   3   4   5

Link to market themes 
 – Urbanisation 
 – War for talent
 – Political and regulatory 

uncertainty
 – Wellbeing and 
sustainability
 – Future prooﬁng

Link to principal risks and 
uncertainties

A   B   C   D   E   F

Objectives for FY2020
10% total return

Link to remuneration
Yes

Link to strategic priority

1   3   4   5

Link to market themes 
 – Urbanisation 
 – War for talent
 – Wellbeing and 
sustainability
 – Future prooﬁng

Link to principal risks and 
uncertainties

A   B   C   D  

Development and trading 
gains KPI: average 
£50 million per annum

£42.8m
-37%

68.3

51.1

45.7

42.8

35.0

2015

2016

2017

2018

2019

Investment gains KPI: 
average 10% per annum

-1%
-110%

10.1

2018

2019

-1.0

57  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
 
KEY PERFORMANCE INDICATORS
CONTINUED

Total return KPI: average 
12% post tax total return 
per annum

KPI ﬁgure delivered in 
period: 0.9% post tax 
total return

Status: more work to do

0.9%
-93%

10.0

7.2

12.2

0.2

0.9

2015

2016

2017

2018

2019

Gearing KPI: 40–50% 
gearing on balance sheet and 
50–60% including our share 
of joint venture debt

KPI ﬁgure delivered in 
period: 38.6% gearing

Status: achieved

38.6%
+23%

44.7

36.3

38.6

34.8

31.4

2015

2016

2017

2018

2019

58  |  U and I Group PLC
Annual Report & Accounts 2019

How we measure it
Total return, represents the 
growth in our basic net asset 
value (NAV) including 
dividends.

Objectives for FY2020
12% post tax total return

Link to remuneration
Yes

Why it’s important to U+I
Total return is the most direct 
way of measuring returns to 
shareholders during the year 
as it records NAV growth, 
including dividends. Delivery 
of our NAV target represents 
30% of our Directors’ bonus.

Link to strategic priority

1   3   4   5

Link to market themes 
 – Urbanisation 
 – War for talent
 – Political and regulatory 

12% post tax total return is 
a long-term target but, in light 
of current markets, this is 
unlikely to be achieved in 
FY2020.

uncertainty
 – Wellbeing and 
sustainability
 – Future prooﬁng

Link to principal risks and 
uncertainties

A   B   C   D   E   F

How we measure it
The Group seeks to maintain 
a conservative level of 
gearing appropriate to the 
size of the balance sheet. 
At times it may increase as 
a result of an increased level 
of construction debt against 
speciﬁc assets.

Why it’s important to U+I
Maintaining the most efﬁcient 
gearing range for the business 
means we can maintain a 
low-risk ﬁnancial structure 
and protect shareholder value 
throughout the property and 
economic cycles.

Objectives for FY2020
40–50% gearing on balance 
sheet and 50–60% including 
our share of joint venture debt

Link to remuneration
No

Link to strategic priority

2   4   5

Link to market themes 
 – Urbanisation
 – Future prooﬁng

Link to principal risks and 
uncertainties

A   C   D   E  

 
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“
VALUE COMES IN MANY 
FORMS – PROFIT IS 
JUST ONE.

AT MAYFIELD, WE ARE 
WRITING A NEW CHAPTER 
FOR THE CITY AND ITS 
PEOPLE WITH OVER 20 
ACRES OF GREEN AND 
OPEN SPACE.

A PLACE WHERE YOU JUST 
MIGHT FALL IN LOVE.
”

Richard Upton
Chief Development Ofﬁcer, U+I

59  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
STAKEHOLDER 
ENGAGEMENT

 DEAR 
 INVESTOR. 
 THIS IS NOT JUST 
 ABOUT U+I.

60   |  U and I Group PLC
Annual Report & Accounts 2019

 DEAR 

 INVESTOR. 
 THIS IS NOT JUST 
 ABOUT U+I.

61   |  U and I Group PLC
Annual Report & Accounts 2019

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STAKEHOLDER ENGAGEMENT
CONTINUED

 IT’S
 ABOUT 
 EVERYONE:

62   |  U and I Group PLC
Annual Report & Accounts 2019

 IT’S

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Why do we think it is 
important to engage with 
key stakeholders?
Our stakeholders are at the 
heart of everything we do 
and they ensure we deliver on 
our purpose and are socially 
responsible. To be truly 
successful and unlock 
genuine long-term value 
through regeneration, we 
need to ask questions, listen, 
discuss, share knowledge 
and experiences, and ﬁnd 
solutions that work for all our 
stakeholders, both now and 
for the future. 

Regular engagement 
allows us to ensure our 
purpose stays relevant
Like our stakeholders, we 
never stand still. Constantly 
curious, we need to challenge 
ourselves and be challenged 
so we can understand 
changing needs and agendas 
and adapt to anticipate or 
meet them. It is only through 
listening and getting that 
diversity of thinking that we 
can learn and do better, as we 
focus on creating long-term 
socio-economic beneﬁts for 
the communities in which we 
work and sustainable returns 
for our shareholders. 

 ABOUT 
 EVERYONE:

63   |  U and I Group PLC
Annual Report & Accounts 2019

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STAKEHOLDER ENGAGEMENT
CONTINUED

OUR STAKEHOLDERS

HOW WE ENGAGE WITH THEM WHAT IS THEIR

THE QUESTIONS WE ASK THEM

OUR RESPONSE 

POTENTIAL IMPACT
ON OUR BUSINESS

OUR  
PEOPLE

Frequency: ongoing

High

Channel: monthly all staff 
meetings, feedback box, 
intranet, weekly internal 
email, NED lunches with 
employees, bi-annual reviews 
with feedback to managers, 
learning circles with 
Executives, employee surveys 
and group workshops to 
identify problems, learn from 
others and improve 
processes.

Q:  Are you satisﬁed with U+I as a place to work, 
its support network, delivery of its purpose 
and opportunities available?

Q:  What can we do better as a company – what 
feedback do you have for our Executives?

Q:  What are your development needs; how can 

we increase your job satisfaction?

A:  We ran an online employee engagement survey to 

underline areas of improvement for the business; these 

will be bi-annual going forward to track our progress

A:  Staff lunches with the Board to raise questions and 

concerns; appointed a new NED as conduit between our 

Board and employees to encourage open feedback

A:  Identiﬁcation and early implementation of a new talent 

strategy, to strengthen skillsets

Q:  How can we improve processes to support 

A:  We installed a new IT framework to simplify ﬁnance and 

more efﬁcient working? 

delivery systems, improving productivity 

Q:  How can we resource projects smartly to 
match skillsets, empower talent and give 
accountability?

Q:  How can we work together more effectively 

and share learnings/knowledge?

Frequency: ongoing/ad hoc

High

Q:  What are your views on our ﬁnancial results 

OUR  
INVESTORS

COMMUNITIES

OUR  
PARTNERS

Channel: investor meetings, 
regular communication 
around newsﬂow, results 
roadshows, private wealth 
managers roundtable lunch, 
site visits, direct Board 
engagement, new website.

Frequency: ongoing/ad hoc

High

Channel: corporate 
benchmark research, 
consultations and regular 
conversations with 
communities and tenants to 
discuss individual projects, 
Worthwhile Use programmes, 
support for small businesses 
through co-working space 
and advice. 

Frequency: ongoing, project 
speciﬁc

High

Channel: corporate 
benchmark research with 75 
in-depth phone interviews 
with senior executives in the 
public and private sector in 
our three geographies; 
six-month national 
consultation on PPP, 
including round table events 
across the UK.

64   |  U and I Group PLC
Annual Report & Accounts 2019

and signiﬁcant news?

Q:  Do you have any concerns about our 

strategy?

Q: Are you happy with our dividend approach?

A: We review our dividend policy and approach annually

Q:  Do you have any areas of concern ahead of 

the AGM?

Q:  Are you happy with the quality and visibility 

of U+I’s community engagement?

Q:  What are your views on our Worthwhile Use 

approach and activities?

Q:  What are your needs and aspirations from 
our schemes (asked at consultations)?

Q:  Are we accessible and how are we at 

connecting with a broad range of people 
in communities?

Q:  Are you happy with your relationship with 

U+I and how do you feel about the 
company?

Q:  How do you rank U+I’s positioning in the 

market?

Q:  What are your views on future risks and 

opportunities?

Q:  What is your perception of our PPP 

positioning and how might we improve?

A:  We are giving teams greater responsibility and 

accountability on projects to strengthen and broaden the 

depth of talent and refocus the Executives’ time

A:  ‘Don’t be dull’ monthly sessions – bringing internal teams 

and external experts together to share ideas and 

learnings 

A:  We constantly review our strategy, approach, market and 

projects to mitigate risk and ensure we can deliver on our 

promises to our shareholders

A:  We have created a new investor website to give greater 

clarity around U+I, our market, business model and 

approach

A:  Our Chairman, Board and Executives meet and speak 

to shareholders regularly and listen to their opinions

A:  We run extensive public consultations to discuss the 

needs of different local stakeholders (including most 

recently Landmark Court, 8 Albert Embankment, 

Mayﬁeld), and to increase the visibility of our activities

A:  Worthwhile Use at Mayﬁeld and 8 Albert Embankment 

and events at schemes such as Bromley and Landmark 

Court have increased local engagement and support

A:  Investment into Plus X innovation hubs (such as at 

Preston Barracks) to support growth of start-up 

businesses, encourage technological advances and 

create jobs

A:  We regularly meet with a range of local stakeholders 

to understand different perspectives, concerns and 

opportunities that we can address in our schemes

A:  We continue to reinforce the credibility of the brand 

through delivery of projects and, in turn, our numbers

A:  We demonstrate thought leadership and brand value 

through research, events, our Worthwhile Use campaign 

and publications such as Matter

A:  We work intimately with our partners from the outset of 

every project so we can challenge each other to do 

better and ﬁnd solutions that will beneﬁt everyone

A:  We have created a number of pledges to hold ourselves 

to account and ensure we meet expected standards 

across our PPP projects

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OUR  

PEOPLE

OUR  

INVESTORS

Frequency: ongoing

High

Channel: monthly all staff 

meetings, feedback box, 

intranet, weekly internal 

email, NED lunches with 

employees, bi-annual reviews 

with feedback to managers, 

learning circles with 

Executives, employee surveys 

and group workshops to 

identify problems, learn from 

others and improve 

processes.

Channel: investor meetings, 

regular communication 

around newsﬂow, results 

roadshows, private wealth 

managers roundtable lunch, 

site visits, direct Board 

engagement, new website.

Channel: corporate 

benchmark research, 

consultations and regular 

conversations with 

communities and tenants to 

discuss individual projects, 

Worthwhile Use programmes, 

support for small businesses 

through co-working space 

and advice. 

Channel: corporate 

benchmark research with 75 

in-depth phone interviews 

with senior executives in the 

public and private sector in 

our three geographies; 

six-month national 

consultation on PPP, 

including round table events 

across the UK.

COMMUNITIES

Frequency: ongoing/ad hoc

High

OUR  

PARTNERS

Frequency: ongoing, project 

High

speciﬁc

Q:  How can we resource projects smartly to 

match skillsets, empower talent and give 

accountability?

Q:  How can we work together more effectively 

and share learnings/knowledge?

and signiﬁcant news?

Q:  Do you have any concerns about our 

strategy?

Q:  Do you have any areas of concern ahead of 

the AGM?

Q:  Are you happy with the quality and visibility 

of U+I’s community engagement?

Q:  What are your views on our Worthwhile Use 

approach and activities?

Q:  What are your needs and aspirations from 

our schemes (asked at consultations)?

Q:  Are we accessible and how are we at 

connecting with a broad range of people 

in communities?

Q:  Are you happy with your relationship with 

U+I and how do you feel about the 

Q:  How do you rank U+I’s positioning in the 

company?

market?

Q:  What are your views on future risks and 

opportunities?

Q:  What is your perception of our PPP 

positioning and how might we improve?

OUR STAKEHOLDERS

HOW WE ENGAGE WITH THEM WHAT IS THEIR

THE QUESTIONS WE ASK THEM

OUR RESPONSE 

POTENTIAL IMPACT

ON OUR BUSINESS

Q:  Are you satisﬁed with U+I as a place to work, 

its support network, delivery of its purpose 

and opportunities available?

Q:  What can we do better as a company – what 

feedback do you have for our Executives?

Q:  What are your development needs; how can 

we increase your job satisfaction?

A:  We ran an online employee engagement survey to 

underline areas of improvement for the business; these 
will be bi-annual going forward to track our progress

A:  Staff lunches with the Board to raise questions and 

concerns; appointed a new NED as conduit between our 
Board and employees to encourage open feedback

A:  Identiﬁcation and early implementation of a new talent 

strategy, to strengthen skillsets

Q:  How can we improve processes to support 

A:  We installed a new IT framework to simplify ﬁnance and 

more efﬁcient working? 

delivery systems, improving productivity 

Frequency: ongoing/ad hoc

High

Q:  What are your views on our ﬁnancial results 

A:  We are giving teams greater responsibility and 

accountability on projects to strengthen and broaden the 
depth of talent and refocus the Executives’ time

A:  ‘Don’t be dull’ monthly sessions – bringing internal teams 

and external experts together to share ideas and 
learnings 

A:  We constantly review our strategy, approach, market and 
projects to mitigate risk and ensure we can deliver on our 
promises to our shareholders

A:  We have created a new investor website to give greater 
clarity around U+I, our market, business model and 
approach

EMPLOYEE SURVEY
88% of employees felt their 
manager made decisions in 
line with U+I’s core values.

Q: Are you happy with our dividend approach?

A: We review our dividend policy and approach annually

A:  Our Chairman, Board and Executives meet and speak 
to shareholders regularly and listen to their opinions

A:  We run extensive public consultations to discuss the 
needs of different local stakeholders (including most 
recently Landmark Court, 8 Albert Embankment, 
Mayﬁeld), and to increase the visibility of our activities

A:  Worthwhile Use at Mayﬁeld and 8 Albert Embankment 
and events at schemes such as Bromley and Landmark 
Court have increased local engagement and support

A:  Investment into Plus X innovation hubs (such as at 
Preston Barracks) to support growth of start-up 
businesses, encourage technological advances and 
create jobs

A:  We regularly meet with a range of local stakeholders 
to understand different perspectives, concerns and 
opportunities that we can address in our schemes

A:  We continue to reinforce the credibility of the brand 
through delivery of projects and, in turn, our numbers

A:  We demonstrate thought leadership and brand value 

through research, events, our Worthwhile Use campaign 
and publications such as Matter

A:  We work intimately with our partners from the outset of 
every project so we can challenge each other to do 
better and ﬁnd solutions that will beneﬁt everyone

A:  We have created a number of pledges to hold ourselves 
to account and ensure we meet expected standards 
across our PPP projects

65   |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
STAKEHOLDER ENGAGEMENT
CONTINUED

STAKEHOLDER GROUP:

 OUR PEOPLE

66  |  U and I Group PLC
Annual Report & Accounts 2019

HOW WE ENGAGED IN FY2019
We’ve spent time at Shelter’s 
ofﬁces, listened to 
presentations to understand 
what they do and how we 
can help, shared our events 
space and had regular catch 
ups to come up with a fun 
programme of activities that 
would motivate and unite 
both sides. Almost every 
member of our team, across 
all levels, has been involved 
in fundraising.

Case study
We arranged a number of 
activities from a World Cup 
sweepstake, cake sales, 
a quiz attended by >100 
friends and partners of U+I, 
and a shop challenge where 
different members of the U+I 
team competed to raise the 
most funds for Shelter. 
Including match funding, 
these efforts raised over 
£30,000 for Shelter in 
FY2019. 

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 OUR PEOPLE

67  |  U and I Group PLC
Annual Report & Accounts 2019

U+I at Shelter’s head ofﬁce 
in London

 
 
 
STAKEHOLDER ENGAGEMENT
CONTINUED

STAKEHOLDER GROUP:

 INVESTORS

68   |  U and I Group PLC
Annual Report & Accounts 2019

HOW WE ENGAGED IN FY2019
We organised a variety of 1:1 
and group site visits during 
the ﬁnancial period to help 
existing and potential 
investors understand our 
business, meet a wider group 
of the U+I team, beyond the 
Executives, and see for 
themselves the scale of our 
projects and why we are so 
passionate about them.

 INVESTORS

Case study
In November 2018, a small 
group – some new to U+I, 
others who know us well – 
came to Mayﬁeld in 
Manchester to see the site 
for the ﬁrst time and hear ﬁrst 
hand from the team running 
the project. One investor 
commented: 

“
MAYFIELD LOOKS 
LIKE A TERRIFIC 
SITE AND THE 
MANAGEMENT 
CAME ACROSS 
REALLY WELL. 
JAMES HEATHER 
SEEMS LIKE 
A VERY SOLID 
DEVELOPMENT 
DIRECTOR AND 
I HAVE NO DOUBT 
HE WILL PULL OFF 
A FANTASTIC 
SCHEME.
”

69   |  U and I Group PLC
Annual Report & Accounts 2019

CGI of the Mayﬁeld project 
in Manchester

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STAKEHOLDER ENGAGEMENT
CONTINUED

70   |  U and I Group PLC
Annual Report & Accounts 2019

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HOW WE ENGAGED IN FY2019
Creating a new Dance Space 
for arts charity South East 
Dance has been integral to 
our Circus Street scheme in 
Brighton as their new home 
will help nurture talent, 
whilst being a focal point 
to entertain the local 
community, with c.17,000 
people expected through the 
doors each year. With this in 
mind, we have worked closely 
with South East Dance, to 
design a space that will suit 
their needs and support their 
vision to help make lives 
better through dance.

Case study
South East Dance and 
Hofesh Shechter Company 
will be looking to further roll 
out their ﬂagship Mind the 
Gap mentoring programme 
at The Dance Space, when it 
opens its doors in early 2020, 
to support outstanding dance 
graduates from the south 
east of England.

“
THE DANCE SPACE 
WILL SOON BE 
A THRIVING HOME 
TO DANCE AND 
A VISIBLE 
DEMONSTRATION 
OF THE EXCELLENT 
WORK THAT IS 
ALREADY TAKING 
PLACE.
” 

Hofesh Shechter
photographed on the 
opening night of Rambert 
— McGregor/Motin/Shechter 
at Sadlers Wells.

STAKEHOLDER GROUP:

 COMMUNITIES

71   |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
STAKEHOLDER ENGAGEMENT
CONTINUED

STAKEHOLDER GROUP:

 PARTNERS

72   |  U and I Group PLC
Annual Report & Accounts 2019

STAKEHOLDER GROUP:

 PARTNERS

HOW WE ENGAGED IN FY2019
We continue to support the 
growth or our collaborative 
group of like-minded people 
and companies who make up 
Mayﬁeld & Co. Launched in 
2018, these young businesses 
are bringing industry back 
into once abandoned 
buildings at Mayﬁeld, 
Manchester as this co-
working space encourages 
sharing ideas, experiences 
and knowledge, to help 
springboard their success.

Case study
We’re talking to Mayﬁeld & 
Co. and visitors to the site 
to listen to their views on 
the designs for our Mayﬁeld 
project so we can create 
a scheme with the local 
community at its heart. Latest 
tenant, Dirt Factory, has built 
an indoor bike park in one of 
the disused 25,000 sq.ft. 
warehouses, using 2,000 
tonnes of reclaimed soil to 
create a family-friendly bike 
park at Mayﬁeld. The park 
encourages ﬁtness, 
wellbeing and fun, whilst 
creating up to ten full and 
part time jobs for the local 
community. Read more at: 
dirtfactory.org/

“
THE DIRT FACTORY 
POP-UP IS AN 
AMAZING 
OPPORTUNITY TO 
BRING OUR DREAM 
ALIVE AND AS 
A START-UP IT’S 
GREAT TO HAVE 
SUCH AMAZING 
SUPPORT FROM 
THE MAYFIELD 
PARTNERSHIP,
”

Dan Makin (left)
Co-founder and Managing 
Director of Dirt Factory.

73   |  U and I Group PLC
Annual Report & Accounts 2019

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SUSTAINABILITY REVIEW

OUR 
PLACES
Page 75

We foster close, trusted 
partnerships with a range 
of different stakeholders so 
that we can transform 
overlooked, underloved areas 
and brownﬁeld sites into 
vibrant neighbourhoods 
where communities 
can thrive. 

OUR APPROACH TO 
SUSTAINABILITY

We invest in our people to 
create a motivated and 
purpose-driven team, so they 
can see opportunities where 
others see obstacles and 
deliver beneﬁts where 
others cannot.

OUR 
PEOPLE
Page 80

OUR 
BUILDINGS
Page 79

We build resilience and 
improve eco-efﬁciency, 
whether we are developing 
projects from scratch to meet 
the needs of the local 
catchment or managing assets 
in our investment portfolio. 

74  |  U and I Group PLC
Annual Report & Accounts 2019

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Our vision for sustainability
With a focus on complex, 
mixed-use regeneration, 
our vision is to unlock value 
across our development, 
trading and investment 
projects so we can deliver 
lasting social and economic 
beneﬁts for all our 
stakeholders, including the 
people who live, work and 
spend time in our places. 

Our business model is 
designed to deliver genuine, 
long-term social and 
environmental beneﬁts and 
our sustainability strategy 
supports this goal.

OUR PLACES

FY2019 highlights

>100,000 
sq.ft.

new spaces created for 
start-up businesses and 
SMEs 

42

Considerate Contractor 
score for Circus Street in 
Brighton and 40 for 399 
Edgware Road

We principally create 
sustainable value in three 
ways, as shown in the 
diagram on page 74.

BREEAM

Excellent achieved at Future 
Works, Slough 

– Our places
– Our buildings
– Our people

The success of our approach 
is evident in the projects that 
we have delivered, the 
communities that we have 
helped to ﬂourish and the 
opportunities we have 
created for new businesses 
to prosper. All of this is 
delivered by our committed 
and talented employees. 

20%

target procurement spend 
with local suppliers at each 
development

Communities 
We see regeneration as 
a catalyst for sustainable 
growth. We build on the 
unique heritage and identity 
of each site to deliver 
inspiring places that boost 
economic growth, foster 
wellbeing and create thriving 
communities. 

Listening to those around 
us is integral to the success 
of our developments. We 
involve communities from the 
start, developing direct and 
transparent channels of 
communication, opening up 
our sites and inviting people 
in. This ensures we leave 
places better than when 
we found them. 

75  |  U and I Group PLC
Annual Report & Accounts 2019

Our broader plans for 
Landmark Court will 
transform the current 
buildings and car park into a 
dynamic cultural and social 
hub. The new commercial-led 
scheme will offer 35 new 
homes, around 180,000 sq.ft. 
of ofﬁces, retail and self-
contained work spaces that 
will provide shared amenities 
for SMEs. 

By working with local 
communities and partners, 
we can create a unique 
legacy, delivering positive 
beneﬁts that generate value 
for all our stakeholders and 
enhance the lives of 
residents. 

Landmark Court,
London City Region

We have used this 
collaborative approach at 
our 1.7-acre, mixed-use 
development at Landmark 
Court in Central London. 
Widely considered too 
complex, the site has lain 
derelict for over two 
decades. We held regular 
meetings throughout the 
planning process with key 
stakeholders, including 
interest groups, local 
residents and Bankside Open 
Space Trust (BOST), to build 
trust, engage local 
communities and create 
a scheme that beneﬁts 
everyone. Working closely 
with Friends of Crossbones, 
we have also created a 
shared vision for the 
Crossbones memorial 
garden, preserving the burial 
ground and respecting its 
rich history, which dates back 
to the 1800s. 

“
LISTENING TO 
THOSE AROUND US 
IS INTEGRAL TO THE 
SUCCESS OF OUR 
DEVELOPMENTS.
”

 
 
 
SUSTAINABILITY REVIEW
CONTINUED

8 ALBERT EMBANKMENT 
LONDON CITY REGION

290 people attended 
three consultation sessions 

Shortlisted for the 
‘Community Engagement 
in the Planning Process’ 
London Planning Award in 
January 2019

Shortlisted for the ‘Best Use 
of Publicly Owned Land and/
or Property in Placemaking’ 
in the London Planning 
Awards in March 2019

Free rent in The Workshop 
for local start-up businesses 
and artists 

Unlocking value through 
creativity, collaboration 
and vision
As the former headquarters 
of the London Fire Brigade 
and home to Lambeth Fire 
Station, 8 Albert 
Embankment has served the 
local community since the 
early 1930s. Through our 
partnership with the site’s 
owner – the London Fire 
Commissioner (LFC) – we 
are using our creative vision 
to transform this building 
and the surrounding area 
into a thriving mixed-use 
community. 

Our agreement with the LFC 
includes a promise to design 
and deliver a new home for 
the London Fire Brigade 
Museum – a one-of-a kind 
educational centre sitting 
alongside the working ﬁre 
station (that remains the 
centrepiece of this project). 
The new museum is an 
interactive space designed 
to ensure that the history of 
London ﬁre-ﬁghting, from 
the Great Fire to the modern 
period, inspires generations 
to come. 

Throughout the planning 
process we have worked 
closely with the local 
community and Lambeth 
Council to develop a shared 
vision for the project. We 
held three consultations to 
strengthen our relationship 
with the neighbouring 
community and invite 
feedback on our proposed 
designs. Just under 300 
people attended and our 
proposals remain on public 
display, as well as on a 
dedicated website, 
underlining our commitment 
to transparency. 

Our Worthwhile Use events 
space – The Workshop – 
opened in 2016, providing 
free space for the community, 
including locally-based 
start-up enterprises and 
artists. It is currently home to 
12 tenants including the 
London Fire Brigade pop-up 
museum, Migration Museum 
and the Institute of 
Imagination. We have 
welcomed over 48,000 
visitors since opening. 

In short, our expertise in PPP 
regeneration projects has 
allowed us to create a shared 
vision for 8 Albert 
Embankment that places 
collaboration and creativity 
at its heart.

76  |  U and I Group PLC
Annual Report & Accounts 2019

>1,200 new jobs 
will be created

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More information about the 
scheme online:  
www.uandiplc.com/
our-places/8-albert-
embankment

Read more about Brighton 
& Hove Wood Recycling 
Project at  
www.woodrecycling.org.uk

Environment
We transform overlooked 
sites into vibrant mixed-use 
neighbourhoods. Working 
with forward-thinking 
partners, we inject energy 
and creativity into every 
project to deliver 
environmental, economic 
and social beneﬁts. 

We adopt a practical 
approach to our schemes, 
guided by the National 
Planning Policy Framework 
and our speciﬁc ambitions 
for each individual project are 
shaped by engagement with 
local partners. We make a 
point of seeking out green 
building certiﬁcations, 
incorporating features that 
enhance the public realm and 
integrating solutions that 
reduce the impact of 
construction works and 
building use, such as waste 
avoidance and energy 
efﬁciency. 

At Circus Street in Brighton, 
for example, the construction 
and development team 
diverted nearly 35 tonnes of 
wood waste for reuse or 
recycling. Brighton & Hove 
Wood Recycling Project, 
a not-for-proﬁt social 
enterprise, used the wood 
in local DIY projects and 
passed on the savings in 
resources and carbon 
emissions. This collaboration 
also provided training and 
work experience for local 
people. 

Looking ahead, we intend 
to formalise sustainable 
design principles in all our 
development projects by 
setting minimum standards 
for green building 
certiﬁcations, with an 
emphasis on the efﬁcient 
use of resources. 

Environmental features bring 
wider beneﬁts too, that align 
with our core focus of 
enhancing people’s lives 
through regeneration. To that 
end, we strive to promote the 
health and wellbeing of the 
communities where we work 
by improving the public 
realm, creating green spaces 
and providing integrated 
transport solutions such as 
bike schemes. Later this year, 
for example, we will submit 
planning for a 6.5 acre park at 
Mayﬁeld, Manchester – the 
ﬁrst purpose-built public park 
in the city for over a century.

“
WE INTEND 
TO FORMALISE 
SUSTAINABLE 
DESIGN PRINCIPLES 
IN ALL OUR 
DEVELOPMENT 
PROJECTS.
”

Our efforts are not just 
conﬁned to the work that we 
do: we also seek to extend 
the economic and social 
beneﬁts of our regeneration 
activities through our supply 
chain. We prioritise local 
suppliers within a 25-mile 
radius of our core regions to 
reduce procurement risk, 
support local businesses and 
boost local employment. At 
Circus Street, for instance, 
we are using locally sourced 
bricks and cement to support 
supplier jobs in the area and 
ensure our ﬁnal scheme has 
a homegrown look and feel.

This holistic approach helps 
us to capture the unique 
characteristics and 
opportunities of each site, 
improving the value we deliver 
and reinforcing our trusted 
reputation with existing and 
potential partners. 

77  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
 
SUSTAINABILITY REVIEW
CONTINUED

2,000+ people 
attracted to 
STEM events

78  |  U and I Group PLC
Annual Report & Accounts 2019

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HARWELL
LONDON CITY REGION

BREEAM Very Good achieved 
at Quad 1 development

On-site gym and wellness 
events for workers

A broader approach to 
value creation
Set across 710 acres of 
Oxfordshire countryside, 
Harwell is an internationally 
recognised science and 
technology campus and a 
hub of research and activity. 
More than 6,000 people work 
at over 225 world-leading 
organisations focusing on 
delivering innovation across 
the worlds of science and 
technology. 

Over the past ﬁve years, 
we have been working in 
partnership with the Science 
and Technology Facilities 
Council and the UK Atomic 
Energy Authority to develop 
state-of-the-art facilities that 
further enhance Harwell’s 
reputation. 

But our ambitions for the site 
stretch far wider. We want to 
create a thriving community, 
with strong environmental 
credentials and an emphasis 
on health, wellbeing and 
education.

In that spirit, our landscape 
and maintenance strategy 
protects existing green 
spaces and supports 
biodiversity. Any trees that 
are removed, for example, 
are refashioned into benches 
and new saplings planted.

We have also worked hard 
to promote wellbeing, 
taking the lead in organising 
events that bring people 
together, encourage 
collaboration and promote 
healthy lifestyles. A recently 
opened gym is available to 
on-site employees, 
supplemented by regular 
wellness sessions. We have 
fostered sustainable travel 
plans that promote cycling, 
through incentives such as 
breakfasts and free bike 
maintenance sessions. 
A summer party in 2018 
brought more than 1,000 
people together to network 
and relax. 

Our on-site management 
team has also worked with 
tenants to promote some 
of the exciting and ground-
breaking work being 
undertaken at Harwell. We 
have sponsored initiatives 
such as the ATOM Science 
Festival in nearby Abingdon 
to promote Science, 
Technology, Engineering 
and Mathematics (STEM) 
amongst the local 
community, especially 
young people. The 2018 
Harwell Fun Day, held to 
engage students, children 
and families in STEM-
related activities, attracted 
over 2,000 visitors. 

Our approach at Harwell 
demonstrates what can be 
achieved through genuine 
creativity and vision. By 
taking a holistic view of the 
project and looking beyond 
the physical infrastructure, 
to the way people work and 
interact, we have been able 
to deliver value that far 
exceeds the original scope.

OUR BUILDINGS

FY2019 highlights

12%

reduction in GHG emissions 
(Scope 1 and 2) across our 
investment portfolio

27%

reduction in like-for-like 
energy consumption across 
our investment portfolio

Our investment portfolio is 
made up of assets that we 
have acquired or developed, 
where we see long-term 
potential. These tend to be 
assets in towns and cities 
where the offering is well-
suited to the local catchment 
and where we can add value 
through asset management 
initiatives or change of use. 
Unlike our development 
portfolio, options to improve 
the environmental 
performance of our investment 
portfolio are limited as the 
buildings generally predate 
our involvement. 

We nonetheless monitor 
energy use and focus on 
improvements to energy 
efﬁciency as part of our 
broader objectives to 
mitigate risk, sustain asset 
values, reduce operating 
costs, and attract and retain 
tenants. Much of this 
investment is directed 
towards our goal of only 
holding assets rated EPC 
‘C’ or above. 

We work with property 
managers and tenants across 
our portfolio to target 
practical improvements, given 
each asset’s needs, age and 
annual investment budgets. 
These range from energy 
efﬁciency initiatives, such as 
the roll-out of LED lighting to 
new technology, such as 
smart meters, to facilitate the 
collection of more accurate 
energy consumption data. 

We aim to achieve continuous 
reductions in energy use and 
greenhouse gas emissions 
across our portfolio, and we 
will take further steps 
towards this goal by using 
baseline performance data 
to set long-term targets. 

“
WE AIM TO ACHIEVE 
CONTINUOUS 
REDUCTIONS IN 
ENERGY USE AND 
GREENHOUSE GAS 
EMISSIONS ACROSS 
OUR PORTFOLIO.
”

We report our portfolio’s 
energy consumption and 
greenhouse gas emissions 
in line with EPRA’s 
Sustainability Best Practice 
Recommendations (sBPR). 
The sBPR provide an industry-
standard framework for 
reporting on the environmental 
impact of property, allowing 
our performance to be 
measured and monitored 
against our peers. Tables 
detailing our performance can 
be found on our website at: 
www.uandiplc.com/who-we-
are/sustainability 

79  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
SUSTAINABILITY REVIEW
CONTINUED

As part of our commitment to 
our people, in the ﬁnancial 
period we designed and 
implemented a psychometric 
questionnaire to inform our 
future development 
strategies and revised 
performance management 
process. We selected six 
behaviours that align with our 
brand values of imagination, 
intelligence and audacity – 
creativity, curiosity, emotional 
intelligence, grit, adaptability 
and communication – that 
would help our team to excel 
in their positions.

In the year ahead, we will 
continue to roll out our talent 
strategy, introducing technical 
assessments, enabling our 
staff to build on the skills 
within our existing teams and 
support overall career 
progression. Our talent 
strategy reaches everyone in 
the organisation, including our 
CEO and other Executives, 
to support our culture of 
inclusion that will help us to 
deliver the best regeneration 
schemes that we can. 

As part of our people ﬁrst 
approach, in April 2019 we 
appointed a new independent 
Non-executive Director, 
Professor Sadie Morgan, to 
oversee the establishment of 
a workforce advisory panel, 
providing a point of 
communication and 
connection between our 
employees and the Board. 
We also undertook a 
Company-wide employee 
engagement survey to 
understand areas of 
improvement for the business 
to sustain an energetic and 
fun working environment as 
the business matures.

Attracting people from a 
diverse range of backgrounds 
is a priority for us and our 
industry. By offering work 
experience placements we 
look to inspire a future 
generation to pursue careers 
in property. Over the past 
year we have welcomed four 
students from a variety of 
backgrounds through our 
doors. Two of the students 
were selected from a local 

OUR PEOPLE

FY2019 highlights

56%

of employees beneﬁt from 
subsidised gym membership

89%

of employees enrolled in 
private medical insurance 

4

work experience placements 
offered to students

>£30,000

raised for Shelter, our charity 
partner and >300 hours 
volunteered

68%

of staff have had 
opportunities to learn and 
grow at work in the ﬁrst three 
months of 2019

1

new Non-executive Director 
to increase employee 
engagement 

Our success relies on our 
people: their ingenuity, 
their creativity and their 
commitment. We cultivate a 
sense of belonging to nurture 
an inclusive culture and retain 
key talent. 

We want our people to 
develop and ﬂourish. We 
listen to them, we develop 
strong channels of 
communication through our 
employee engagement 
survey and we invest in their 
personal learning and 
development to help them 
achieve their best. 

80  |  U and I Group PLC
Annual Report & Accounts 2019

Employee gender diversity

Board 

1.

2.

1. Male: 6
2. Female: 3 

Senior management (excluding 
Board) 

1.

2.

1. Male: 20
2. Female: 4 

Remaining team 

1.

2.

1. Male: 23
2. Female: 46 

school near our community 
developments Deptford 
Market Yard and 
Hammersmith Grove. We also 
hosted an intern as part of 
our partnership with the 
Reading Real Estate 
Foundation that promotes 
opportunities within the 
property sector for students 
from diverse backgrounds. 

Our continued charity 
partnership with Shelter 
raised over £30,000 in the 
ﬁnancial period, including 
a contribution from U+I, 
supported by the Matching 
Charity Giving Policy. We 
offer two days leave a year 
to volunteer, leading to over 
300 hours volunteering in the 
period. As part of this policy, 
four members of staff were 
also supported to work in 
a refugee camp in Lesvos, 
Greece, helping Movement 
on the Ground’s permanent 
on-site teams with 
operational activities, to 
assist with the day to day 
running of the camp. 

“
ATTRACTING 
PEOPLE FROM A 
DIVERSE RANGE OF 
BACKGROUNDS IS 
A PRIORITY FOR US 
AND OUR INDUSTRY.
”

By motivating our people, 
furthering their careers, 
promoting diversity and 
encouraging volunteering, we 
strive to create connections, 
foster engagement and 
reinforce our reputation as a 
rewarding place to work that 
supports and brings out the 
best in our people. 

 
 
 
We want our 
people to develop 
and ﬂourish

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81  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
PRINCIPAL RISKS AND 
UNCERTAINTIES

RISK FRAMEWORK

Risk review
Our business model is shaped 
by the risks the Directors 
consider signiﬁcant to our 
strategy, size and capabilities.

Risk management structure
The Group’s risk proﬁle is 
maintained under continual 
review by its Audit and Risk 
Committee and by the Board. 
In addition, the Group has 
a Risk Management 
Committee, which oversees 
the Group’s risk register and 
risk control processes on 
behalf of the Audit and Risk 
Committee. The Risk 
Management Committee 
is comprised of senior 
employees from across the 
Group, covering all areas of 
the Group’s operations.

Board of Directors

Audit and Risk Committee

Risk Management Committee

Identify

Mitigate

Assess

DELIVERING AGAINST OUR STRATEGIC PRIORITIES

PEOPLE
FIRST

GROW
PIPELINE

DRIVE
VALUE

DELIVER
EXCELLENT
RETURNS

CAPITAL 
DISCIPLINE AND
EFFICIENCY

Principal risks and uncertainties

Market risk

Scarcity of viable investment 
and development opportunities

Counterparty risk

Bank funding risk

Construction risk

Planning risk

82  |  U and I Group PLC
Annual Report & Accounts 2019

 
The Group categorises risks 
according to the likelihood of 
occurrence and the potential 
impact on the Group. 

The Directors consider the 
following to be the principal 
risks and uncertainties facing 
the Group.

These risks have been 
grouped as either:
 – External risks – whose 
occurrence is beyond 
the control of the Group. 

 – Business risks – which 
the Directors choose to 
manage as part of the 
Group’s operations.

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B

D

MAPPING OUR RISKS

  28 February 2018
  31 March 2019

Very likely

Likely

Unlikely

IMPACT

i

m
u
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e
M

Key
A  Market risk
B  Scarcity of viable investment and 

development opportunities

C  Counterparty risk
D  Banking risk
E  Construction risk
F  Planning risk

w
o
L

83  |  U and I Group PLC
Annual Report & Accounts 2019

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h
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H

i

 
 
 
PRINCIPAL RISKS AND UNCERTAINTIES
CONTINUED

OUR OPERATIONAL KEY PERFORMANCE INDICATORS

BUSINESS RISK

IMPACT

MITIGATION

A. Market risk
The real estate market 
is directly linked to the 
health of the local and 
national economies. 
Lack of economic 
growth, recessionary 
conditions or economic 
uncertainty can 
translate into the 
negative sentiment 
towards, and 
performance of, 
real estate.

B. Scarcity of viable 
investment and 
development 
opportunities
The Group’s business 
is predominantly 
transactional and 
requires a ﬂow of PPP, 
trading and investment 
opportunities to 
generate consistent 
returns. The risk is that 
the ﬂow of suitably 
priced opportunities 
either reduces or stops.

C. Counterparty risk
Transaction 
counterparties, be they 
joint venture partners, 
purchasers under sale 
contracts or banks in 
respect of cash 
deposits or derivative 
arrangements, may 
suffer or fail ﬁnancially. 

D. Bank funding risk
The pressure on a large 
number of traditional 
real estate lending 
banks to reduce their 
exposure to real estate 
reduces the capacity 
and liquidity within the 
lending market and can 
impact upon the 
availability of debt to 
deliver business plans.

 – Lack of liquidity in 

 – Risk-averse property 

market may delay the 
ability to realise 
planned disposals 
leading to 
signiﬁcantly reduced 
cash inﬂows. 

 – Higher occupier risk, 

leading to 
signiﬁcantly reduced 
values.

 – Lack of occupier 

demand, resulting in 
inability to realise 
gains.

 – Inability to source 
new deals leads 
to decline in 
development and 
trading proﬁts in 
future years.

 – Higher pricing of 

acquisition 
opportunities leads 
to reduced ability 
to add value.

 – Failure of sales 
transaction 
counterparties may 
lead to an inability 
to produce trading 
proﬁts.

 – Failure of ﬁnancial 

counterparties may 
impact effectiveness 
of hedging or 
recoverability of 
deposits.

 – Inability to secure 
funding for new 
opportunities.

 – Inability to reﬁnance 
existing facilities, 
leading to disposals 
at the wrong time in 
business plans and 
failure to maximise 
proﬁts.

 – Unpredictability of 

cash ﬂows.

development strategy, 
whereby projects are pre-
funded, pre-let, or pre-sold 
where appropriate. 
 – Long maturities of debt 

ﬁnance facilities.

 – Moderate level of gearing.
 – Regular meetings with 

economic forecasters to 
gauge economic trends. 

 – Flexible approach to market 
opportunities, seeking out 
sectors where value can be 
generated and seeking 
funding partners with different 
return requirements.

 – Stringent deal underwriting 
procedures with minimum 
return hurdles.

 – Maintaining broad industry 
contacts for acquisitions 
rather than being dependent 
on a single source of 
opportunity. 

 – Use of PPP model to secure 

regeneration opportunities in 
an innovative way.

 – Proof of funding required prior 
to agreeing sales contracts. 
 – The Board regularly assesses 

the creditworthiness of 
ﬁnancial counterparties prior 
to placing deposits and 
hedging transactions.
 – Substantial deposits are 
required for pre-sold 
residential developments prior 
to commencing construction. 

 – The Group maintains 

relationships with a wide 
range of both bank and 
non-bank lenders, reducing 
over-reliance on any one 
partner.

 – The Group is constantly 

seeking to widen its range of 
funding sources and liaises 
regularly with new entrants 
into the real estate lending 
market.

RISK EXPOSURE CHANGE  
YEAR-ON-YEAR

The UK economic fundamentals 
remain solid. However, continuing 
political uncertainty as to the timing 
and nature of Brexit, together with 
escalating geopolitical risks and 
continuing trade uncertainties, 
continue to overshadow the market. 
The six-month Brexit delay will keep 
investment and housing decisions 
on hold.

Opportunities continue to be sourced 
for development, trading and 
investment, which satisfy Group 
underwriting criteria, albeit that the 
market is running late cycle with yield 
rents and house prices at historically 
high levels.

The Group continues to have 
exposure to the private residential 
market through the development of 
pre-sold residential units both on and 
off-balance sheet. The risk of 
purchasers failing to complete has not 
reduced during the year as Bromley 
reached practical completion.

The lending market continues to see 
new entrants. Through the year there 
has been a gradual reduction in 
lenders’ appetite for development risk, 
particularly on a speculative basis, as 
the Brexit uncertainly continues and 
given expected increases in interest 
rates. Also, a gradual fall in house 
prices has impacted upon appetite 
for residential development.

84  |  U and I Group PLC
Annual Report & Accounts 2019

 
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BUSINESS RISK

IMPACT

MITIGATION

RISK EXPOSURE CHANGE  
YEAR-ON-YEAR

E. Construction risk
There is a risk of being 
unable to secure a 
viable construction 
contract, post receipt 
of planning permission.

Real estate 
construction is subject 
to the risk of cost 
overruns, delay and the 
ﬁnancial failure of an 
appointed contractor.

 – Reduced proﬁtability 
or potential loss on 
individual projects 
and/or guarantees 
being called. 

 – Construction work 
ceasing whilst a 
suitable replacement 
contractor is found, 
leading to delays in 
project completion 
and a reduction 
in proﬁt.

 – The Group retains in-house 

experienced project managers 
throughout the life of 
individual projects, to ensure 
that costs are appropriately 
budgeted and timetables are 
adhered to, hence the impact 
of these risks is minimised.

 – The Group performs 

appropriate pre-contract due 
diligence on the capabilities 
and ﬁnancial security of its 
material contractors and key 
sub-contractors.

 – The Group continually 

monitors the ﬁnancial position 
of key contractors to 
anticipate ﬁnancial difﬁculties.
 – If issues arise with contractors, 
the Group uses its professional 
teams and in-house expertise 
to mitigate the impact.

 – The Group requires detailed 
design and speciﬁcation 
throughout the tender process 
to enable it to maximise the 
risk transfer to contractors.
 – The Group requires that all 

construction contracts include 
provisions for liquidated 
ascertained damages in the 
case of performance failures 
by contractors and that 
contractors provide 
performance bonds, typically 
to a level of 10% of the 
contract sum. 

 – Failure to secure 

 – The Group retains a team 

planning consent can 
either cause delay 
or render a project 
unviable/unproﬁtable 
and lead to the 
write-off of 
considerable costs 
or reduced proﬁt 
potential.

with a strong track record of 
achieving planning consents 
and an extensive local 
knowledge, supplemented by 
advisors and sector specialist 
partners, to maximise the 
chance of success and 
reduce the risks and costs 
of failure.

 – An alternative exit strategy is 
always considered in case of 
planning failure. 

 – The Group’s PPP model seeks 

to build partnerships with 
local statutory and planning 
authorities as a way of 
mitigating risk.

F. Planning risk
Procuring appropriate 
and valuable planning 
consents is often a 
key element of value 
creation through 
property development.

Securing planning 
permission in a 
changing political and 
regulatory environment 
is a complex and 
uncertain process, with 
applications subject to 
objection from a wide 
range of potential 
stakeholders, and 
hence prone to delay, 
modiﬁcation and 
rejection.

85  |  U and I Group PLC
Annual Report & Accounts 2019

There continues to be an increase in 
construction material prices. At the 
same time, uncertainty over the status 
of EU nationals working in the UK post 
any deal between the UK and the EU is 
leading to construction workforce 
shortages and increasing labour 
costs. These are both impacting upon 
pricing and making the placement of 
construction contracts more difﬁcult 
in terms of cost certainty and hence 
margin.

As a result, contractors are increasing 
pricing on new tenders so as to build 
in additional contingencies for the 
losses they have suffered in the last 
two to three years.

This can also lead to a lengthening of 
tender periods and the need for more 
detailed design before a viable 
construction contract can be agreed.

There has also been the failure of 
certain large-scale contractors which 
has both taken capacity out of the 
market and lead to other contractors 
reviewing their business models.

The complexity of our projects 
requires even greater rigour in 
delivery.

The ability to obtain clear planning 
decisions is potentially compromised 
as key political events, such as 
elections, approach. Brexit focus has 
also weakened Central Government 
involvement in the planning process. 

The political landscape and planning 
decisions are increasingly becoming 
the battleground on which 
disagreements over social issues play 
out. The ﬁnancial strain on local 
authorities is also manifesting itself 
in under-resourcing of planning 
departments. Taken against a back-
drop of ever-increasing complexity 
in both projects and planning 
regulations, especially in respect of 
mixed-use schemes with greater 
density, there is an urgent need to 
professionalise planning departments. 

 
 
 
 
 
VIABILITY STATEMENT

 – Persistent valuation falls 

of 2.5%, 5.0% and 10.0% 
per annum for each of the 
next ﬁve years and the 
resultant impact upon NAV, 
gearing covenants and 
cash levels i.e. a fall of 25% 
in property values.

 – Inability to win any new 
business opportunities 
over the next ﬁve years – 
hence the only proﬁts that 
can be generated are from 
existing schemes.
 – Debt facilities were 

stress-tested to see how 
much property valuations 
would need to fall before 
loan covenants would be 
breached and how much 
cash would be required to 
cure any loan covenant 
defaults.

Conclusion
As a result of the work 
performed above, including 
the consideration of the key 
assumptions and the 
subsequent stress testing, 
the Board believes that 
the Group’s strategy of 
maintaining a broad portfolio 
of development and trading 
projects, a core investment 
portfolio and a diverse range 
of ﬁnancial and operational 
counterparties provides the 
Group with a strong platform 
on which to continue its 
business.

The Directors therefore have 
a reasonable expectation that 
the Group will be able to 
continue in operation and 
meet its liabilities as they fall 
due over the ﬁve-year period 
to March 2024.

Introduction
U+I’s business model is to 
deliver returns through 
regeneration, realising proﬁts 
by successfully transforming 
undervalued land and assets 
into new places that deliver 
social and economic value to 
a wide range of stakeholders.

The key drivers in delivering 
the model are as follows:
 – Ability to source a regular 
supply of new business 
opportunities which can 
deliver proﬁts in future 
years.

 – Sourcing debt ﬁnance to 
leverage new business 
opportunities and reﬁnance 
existing facilities where 
appropriate.

 – Access to a wide range 
of capital partners to 
co-invest in larger schemes 
and forward fund larger 
speculative developments.

 – Successfully delivering 

new planning permissions.
 – A high-yielding investment 

portfolio generating a 
sustainable cash yield to 
support business activities 
and sustain corporate 
overheads.

 – Maintaining a diversiﬁed 

portfolio of projects so as 
to reduce property speciﬁc 
risk across the overall 
portfolio.

Assessment period
The Group’s business 
planning process consists of 
a ﬁve-year look forward. The 
rationale for this is that the 
main driver of success is the 
generation of development 
and trading gains from 
projects, with the exception 
of two outliers:
 – Short-term pure trading; 

and 

 – Long-term land strategies.

The majority of projects 
have a duration of between 
two and ﬁve years from 
acquisition to exit. Therefore, 
from any starting point, over 
a ﬁve-year period the vast 
majority of projects will have 
moved through to exit. To 
plan for a period longer than 
ﬁve years would lead to the 
construction of a purely 
theoretical model in years 5+, 
rather than one underpinned 
by speciﬁc existing projects 
in the initial ﬁve-year period.

Therefore, for the purposes 
of this review, the business 
has been considered and 
stress tested over a ﬁve-year 
period.

Consideration of principal 
risks
The nature of the Group’s 
business and the industry in 
which it operates expose it to 
a variety of risks. The principal 
risks and uncertainties facing 
the Group are detailed on 
pages 82 to 85. The Board 
regularly reviews the principal 
risks and assesses the 
appropriate controls and 
mitigating actions required to 
manage the operations of the 
Group within an appropriate 
risk environment. The Board 
has further considered their 
impact within the context of 
the Group’s viability with 
particular emphasis on 
construction and planning risk.

Assumptions
In assessing the long-term 
viability of the Group, the 
Board has made the following 
assumptions:
 – Property investment 

valuations continue to be 
broadly stable with no 
prolonged signiﬁcant 
downwards movements.
 – The Group continues to be 
able to deliver cash-backed 
development and trading 
gains from its existing 
portfolio of projects 
sufﬁcient to meet its 
operational requirements, 
principally driven by 
securing new planning 
permissions.

 – The Group continues to 
be able to source new 
business opportunities 
capable of delivering both 
short-term trading gains 
and longer-term 
development gains to 
replace existing projects 
as they are exited.

 – The Group continues with 

its policy of having a 
mixture of long-term debt 
associated with its 
long-term investment 
portfolio and shorter-term 
stand-alone debt associated 
with its development and 
trading projects.

 – The Group continues, as it 
did throughout the previous 
recession, to be able to 
source both replacement 
and new debt facilities as 
they are required from both 
existing and new lenders.
 – The Group continues with 
its policy of maintaining 
a broad range of 
counterparties, including 
ﬁnancial, contractor and 
purchaser, so as to mitigate 
the impact of potential 
counterparty failure.
 – The Group continues its 

policy of de-risking 
developments by obtaining 
forward-funding for larger 
schemes and only carrying 
out limited on-balance 
sheet development.
 – Construction contracts 
are entered into on a 
guaranteed maximum price 
basis where possible.
 – The Group maintains its 
current conservative 
gearing strategy.

In addition, the Group’s 
ﬁve-year business model 
was stress-tested to simulate 
either a deterioration in 
market conditions, which 
could be the result of a 
number of factors, including 
a disorderly Brexit outcome, 
or a ﬂexing of these 
assumptions, as detailed 
below. In particular, 
consideration was given 
to the following:

86  |  U and I Group PLC
Annual Report & Accounts 2019

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FINANCIAL REVIEW

RESULTS FOR THE YEAR
During the year the Group focused on its aim of delivering 
development and trading gains whilst at the same time 
continuing to rationalise the number of smaller, inefﬁcient 
projects it is involved in and restructuring its investment portfolio.

A summary of the Group’s ﬁnancial results is shown below.

Development and trading gains
Basic net asset value (NAV)
Basic NAV per share
Total declared dividends per share
Proﬁt before tax
Total return
Balance sheet gearing

1  13-month period to 31 March 2019

13-month 
period ended
31 March 
2019
£42.8m
£360.1m
 289p
10.0p
£6.3m1
0.9%
 38.6%

Year ended
28 February 
2018 
£68.3m
£379.3m
303p
17.9p
£48.2m
12.2%
31.4%

The proﬁt before tax for the 13-month period to 31 March 2019 
was £6.3 million (28 February 2018: £48.2 million), after 
generating development and trading gains of £42.8 million, 
marginally lower than the range we were guiding for the year.

The movement in net assets for the year is shown in the 
bridge below.

MOVEMENT IN NET ASSETS

320

310

300

290

32.2 (15.4)

303.1 (12)

2.0

(0.2)

(8.9)

291.1

(4.6)

(0.9)

(0.8)

(5.9)

288.6

280

1

2

3

4

5

6

7

8

9

10

11

12

13

MARCUS SHEPHERD (RIGHT), 
CHIEF FINANCIAL OFFICER,
STRATEGY DAY, DUBLIN

1   NAV February 2018
2   Supplemental Dividend 2018
3   Adjusted NAV
4   Investment portfolio contribution
5   Loss on disposal of investment assets
6   Property revaluations

87  |  U and I Group PLC
Annual Report & Accounts 2019

7   Development & trading contribution
8   Operating costs
9   Net interest costs
10

  Taxation
  Other
  Final 2018 & interim 2019 Dividend
  NAV March 2019

11

12

13

 
 
 
Investment property portfolio
During the period, the Group continued its policy of 
selectively disposing of non-core assets outside of our key 
geographies, in particular Killingworth Centre, Newcastle.

We have been cautious about acquisitions, especially in light 
of uncertainty in the UK property market mainly driven by 
inactivity and lack of governmental decision making. In spite 
of this, we have invested £29.2 million (including costs) in 
three attractive investment opportunities: St Peter’s Quarter, 
Bournemouth, Waterglade Retail Park, Clacton-on-Sea and 
a Pure Gym unit in Finchley, where we will look to drive 
double-digit returns through asset management initiatives.

The Group’s historic portfolio does still have a retail bias and 
as such we have suffered an £11.2 million decline in values. 
Overall, including our share of joint venture assets, we have 
seen a 4.9% decline in values, as market sentiment 
outweighed asset fundamentals, especially for retail property 
outside London and the South East.

Working capital
The nature of the Group’s business involves transactions in 
real estate, both purchase and disposal, where there is usually 
a period of up to four weeks between exchange, when the 
transaction is accounted for, and completion when the 
associated cash ﬂows.

As a result, depending on the purchase and disposal activity 
around the period end, there are large differences between 
the level of receivables and payables from one Balance Sheet 
to the next. For example, as at 31 March 2019, there were 
receivables of £23.2 million relating to asset disposals 
immediately prior to the period end compared to £84.8 million 
as at 28 February 2018. This highlights the signiﬁcant 
movement from one period to the next for receivables.

FINANCIAL REVIEW
CONTINUED

Development and trading gains
During the year, we realised a total of £42.8 million of net 
development and trading gains. The key components of these 
gains are:
 – £13.8 million – Preston Barracks: disposal of residential 

accommodation scheme.

 – £9.3 million – Curzon Park: disposal of site via CPO*.
 – £4.8 million – Harwell: construction of two new buildings and 

disposal of surplus land*.

 – £4.7 million – Bryn Blaen: disposal of windfarm.
 – £4.0 million – Bicester: disposal of site.
 – £3.3 million – Charlton Riverside: disposal of site*.
 – £1.8 million – Circus Street: construction of student 

accommodation.

*    These gains represent U+I’s share of gains on assets held in joint venture 

arrangements with signiﬁcant capital partners

The single largest element of the development and trading 
gains was at Preston Barracks where the consented residential 
site in Brighton was sold to Optivo, one of the largest housing 
providers in the UK and experts in affordable housing. This 
generated a proﬁt of £13.8 million.

The Group holds 50% of the share capital in a joint venture 
which previously owned a 10.5-acre site at Curzon Park in 
Birmingham. During the year, the site was acquired, via 
compulsory purchase order (CPO), by High Speed Rail Link 2 
(HS2). As a result of this disposal, the Group has been able to 
recognise a joint venture asset and hence recover losses 
previously recognised when the Group was unsure as to the 
recoverable amounts associated with the site. The net beneﬁt 
during the period to the Group as a result of this is £9.3 million. 

In addition to the above, approximately £1.1 million of gains 
were realised from a number of smaller projects as we 
continued our policy of rationalising the number of projects. 

At our retail project in Lichﬁeld we have taken a £3.4 million 
write off as we were unable to deliver a viable project prior to 
the longstop date in the PPP agreement; we will not incur any 
other costs. 

Development and trading gains can be analysed as follows.

Included in segmental analysis:
Development and trading segment 
result
Share of results of joint ventures
Sale of investments
Other income
Adjustment re legacy corporate loan

13-month 
period ended
31 March 
2019
Total
£m

Year ended
28 February 
2018
£m 

19.3
17.1
3.9
–
2.5
42.8

48.4
13.0
6.8
0.1
–
68.3

88  |  U and I Group PLC
Annual Report & Accounts 2019

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To further increase efﬁciencies, over the ﬁnancial period, 
we have undertaken an internal review of each project, which 
has led to us realigning teams and improving some of our 
processes so we now believe we have the right team size, 
structure and skillset, relevant to the scale, value and stage 
of each project, whilst being more efﬁcient in our day to day 
delivery. As we conclude our existing smaller and legacy 
projects and continue to shift to fewer, larger projects, 
productivity will increase and support more efﬁcient delivery, 
whilst generating higher returns as we turn these projects from 
vision to reality. Furthermore, as we move into the delivery 
phase of our pipeline, we will increase the opportunity to earn 
additional Development Management Fees to offset our 
overhead. Fees generated in FY2019 were £2.5 million, a ﬁgure 
which we expect to increase annually over the next ﬁve years, 
with £3.0 million targeted in FY2020.

Net ﬁnance costs
Net ﬁnance costs for the 13-month period of £5.8 million 
(2018: £9.7 million) include a foreign exchange gain of 
£0.2 million (2018: £1.4 million deﬁcit) in respect of the 
retranslation of Euro-denominated loans and deposits.

For entities where the reporting currency is in Euros, 
retranslation differences are charged to reserves. The 
movement for 2019 was a gain of £0.2 million (2018: £0.3 million 
gain). The net impact of these movements on NAV during the 
year was a £0.4 million gain (2018: £1.1 million loss).

Overheads
The overheads during the period comprised.

Group overheads
LTIP charge (net)

Income from specialist platforms
Net recurring overheads

13-month 
period ended
31 March 
2019
£m
21.9
–
21.9
(2.5)
19.4

Year ended
28 February 
2018
£m 
24.2
(1.8)
22.4
(2.1)
20.3

Annualised net recurring overheads

17.8

20.3

We remain rigorously focused on maintaining capital discipline 
and a strong balance sheet. We have put in place an efﬁciencies 
programme to ensure that we continue to manage our recurring 
overheads as effectively as possible, whilst identifying further 
opportunities for efﬁciencies, both this ﬁnancial period and in 
the longer-term. This is being led by a Chief Operating Ofﬁcer 
who was appointed in January 2018 on an interim basis to 
undertake a review of all areas of the business and identify 
and implement cost savings. Annualised net recurring 
overheads in the ﬁnancial period were £17.8 million (2018: 
£20.3 million). 

Currently we employ certain specialist development related 
expertise internally, such as project management and 
marketing, rather than using external specialists. We do this 
as it gives us more immediate control over certain aspects of 
our projects. Historically we viewed this as a central cost/
overhead expense. In order to more closely align ourselves 
with and be more comparable to our peer group, we are now 
adopting the industry-wide practice of capitalising that 
expenditure where appropriate, rather than treating it as a 
corporate overhead. This has led to capitalisation of £2.5 million 
of staff costs in FY2019. This is expected to be at a similar 
level in future years. 

We have also invested in launching and building a market 
leading brand, which has helped us to win projects like CNFE. 
Maintaining the U+I brand is essential to our continued 
success but we believe we can now reduce our corporate 
marketing spend, whilst continuing to maintain its awareness 
and understanding. 

89  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
FINANCIAL REVIEW
CONTINUED

GROUP’S BANK FACILITIES

Debt
We use debt ﬁnance to leverage the use of our equity in property transactions. We continue to borrow from a wide range of 
ﬁnancial institutions, including UK clearing banks, insurance company-backed lenders, debt funds and ﬁnancial institutions. 
The availability of debt ﬁnance has not impacted our ability to transact new property deals.

Details of our debt facilities are shown in the table below:

Principal ﬁnancial highlights

3
2

Notes

Total facility

Facility type
Loans ﬁnancing longer-term assets
£10,580
Term loan
€47,000
Loan notes
£19,710
Term loan
£66,667
Term loan
Loans ﬁnancing development and trading assets
£44,100
Term loan
£26,000
Term loan
£4,900
Term loan
€22,045
Term loan
€20,125
Term loan
£9,500
Term loan
£26,000
Term loan
£31,000
Term loan
£5,610
Term loan
€14,000
Term loan
£16,800
Term loan
€8,515
Term loan
£16,674
Term loan
€2,180
Term loan
£24,113
Term loan
£110,000
Term loan

3
3, 4
3
3
3
4
4
3
3
3

3
3

3

Utilised as at 
31 March 
2019
£’000

10,580
~40,448
13,410
65,831

45,276
28,432
4,900
~18,292
~11,928
10,415
26,652
15,881
5,330
~12,048
15,800
~7,328
3,500
~1,876
22,410
65,000

Interest rate

Maturity

Loan to value 
ratio

Interest1 

cover ratio

Variable
Cap

10-Jan-20
24-Apr-21
Variable 25-Mar-22
5-Dec-32

Fixed

Variable

Fixed 31-Mar-19
30-Jun-19
Fixed 16-Nov-19
Fixed 18-Nov-19
06-Jan-20
Fixed
31-Jan-20
Variable
31-Jan-20
Fixed
Variable 24-Oct-21
Cap 31-Mar-21
Variable 08-Aug-21
Fixed
15-Jan-22
Fixed 13-Dec-22
Variable 31-Dec-22
Fixed 28-Mar-23
Variable 31-Dec-22
SWAP 16-Feb-26

73%
–
50%
75%

–
60%
–
–
–
–
–
–
60%
–
–
75%
–
75%
–
65%

160%
–
175%
125%

–
125%
–
–
–
–
–
–
175%
–
–
–
120%
–
–
150%

Minimum1
net worth
£’000

–
–
–
–

–
100,000
–
–
–
–
–
–
–
–
–
200,000
–
200,000
–
–

1  Interest cover ratios are speciﬁc to the loan and the relevant property. Minimum net worth refers to the net asset value of the Group per its latest Balance Sheet 

(31 March or 30 September)

2  These unsecured, variable rate loan notes are denominated in Euros, with a nominal value of €47 million. An interest rate cap is in place to limit the Group’s 

exposure to movements in the EURIBOR rate.

3  Loans relating to joint ventures represent the total loan facility and not the Group’s share
4  This facility has the provision to allow interest to be rolled into the loan
~  Represents the amount of the Group’s liability in Sterling as at the balance sheet date

90  |  U and I Group PLC
Annual Report & Accounts 2019

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DEBT MATURITY PROFILE

37.1

40.5

15.8

13.4

9.2

80

70

60

50

40

30

20

10

0

Mar
2020

Mar
2021

Mar
2022

Mar
2023

Mar
2024

Mar
2025

Mar
2026

Mar
2027

Mar
2028

Mar
2029

Mar
2030

Mar
2031

Mar
2032

Drawn – investment

Drawn – development

Corporate

The graph above shows the maturity proﬁle of the Group’s 
debt and the analysis between investment, development and 
corporate facilities. 

Our debt policy can be summarised as follows:
 – Longer-term ﬁxed rate facilities are used to fund longer-term 

income-producing assets. Target loan to value (LTV): 
60–65%.

During the year, the major changes to our debt portfolio were 
as follows:
 – Reﬁnancing the Barclays loan for a new £19.7 million, 

three-year facility. This also resulted in the repayment of the 
Santander loan.

 – Shorter-term asset-speciﬁc debt aligned to the business 
plan for shorter-term trading assets. Target LTV: 50–55%.
 – Medium-term Euro-denominated corporate debt to support 
our investment into Euro-denominated assets in Dublin. 
No LTV target as this is corporate-level debt.

 – Draw down of £15.8 million loan to ﬁnance the purchase of 

 – The Group has no speciﬁc debt on non-income producing 

The Arts Building.

 – Two new Irish loan facilities secured on two industrial assets 

in Dublin.

 – To enable the build out of the Hendy wind farm, the joint 

venture entered into a £16.7 million loan facility with 
Close Brothers. 

 – The Santander facility ﬁnancing the development of Harwell 
was reﬁnanced during the period. The new £110.0 million 
facility was signed by the joint venture in February 2019.

assets or investments into PPP schemes.

 – Joint venture arrangements are designed to leverage both 
our operational expertise and our Balance Sheet. When 
acting with third party capital we deploy asset-speciﬁc 
debt, which is often at a higher LTV (65–75%), reﬂecting 
the risk appetite and cost of capital of our partners.

91  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
FINANCIAL REVIEW
CONTINUED

A summary of the Group’s gearing is shown below.

Group gearing

Gearing  
(excl. share of JVs)
Gearing  
(incl. share of JVs)

Target

31 March 
2019

22 May
2019

28 February
 2018

40–50% 38.6%

39.1%

31.4%

50–60% 62.8%

64.3%

50.5%

The greatest ﬂuctuation in gearing occurs where we utilise 
debt to fund the build-out of pre-sold residential developments 
on our own Balance Sheet. 

Our overall gearing targets therefore act as a limit on the 
amount of development that we can undertake on our own 
Balance Sheet.

The Group maintains a mix of variable and ﬁxed rate facilities 
to provide a degree of certainty whilst also beneﬁting from 
historically low interest rates. Longer-term facilities tend to be 
structured with ﬁxed rates. 

Group net debt and 
gearing:
Gross debt
Cash and cash 
equivalents
Net debt
Net assets
Gearing
Weighted average debt 
maturity
Weighted average 
interest rate

Including joint 
ventures:
Share of net debt in joint 
ventures
Gearing
Weighted average debt 
maturity
Weighted average 
interest rate

31 March
2019

28 February
2018

(179.8)

(171.2)

40.8
(139.0)
360.1
38.6

6.2

4.6

52.1
(119.1)
379.3
31.4

7.0

4.7

(87.3)
62.8

(72.7)
50.5

4.5

5.1

5.4

5.2

£m

£m
£m
£m
%

years

%

£m
%

years

%

92  |  U and I Group PLC
Annual Report & Accounts 2019

Monies held in restrictive account and deposits
As at 31 March 2019 the Group held £8.8 million of restricted 
cash deposits (28 February 2018: £11.5 million). Restricted 
cash deposits primarily arise as a result of the operation of 
certain of the Group’s debt facilities where, on disposal of an 
asset charged to the facility, the lender temporarily retains 
the sale proceeds as security pending reinvestment. The 
restricted cash deposits are deemed to be directly attributable 
to associated debt facility and as such are reported under 
ﬁnancing activities in the Group’s Consolidated Cash 
Flow Statement.

Joint venture arrangements
The Group has a policy of working in joint venture 
arrangements as a way of:
 – Leveraging our equity so we can participate in projects that 

would otherwise be too large for our Balance Sheet;

 – Accessing deals with specialist partners who have secured 

positions on projects but require further equity and the 
planning and structuring skills, which are a key part of 
our business.

During the year, the Group has continued to create 
considerable value from one of its most important joint 
ventures:
 – At Harwell we are partnered with the UKAEA, STFC and 

Harwell Oxford Partners on the 700-acre Harwell Campus, 
an internationally renowned science campus. During the 
period we have successfully completed the letting and 
development of two buildings and let over 125,000 sq.ft. of 
space to, amongst others, Oxford Nanopore Technologies 
and Agilent Technologies. During the period this has 
generated both £4.8 million of development and trading 
gains and net investment gains of £1.2 million in respect 
of the Group’s holding.

The Group’s joint ventures and associates are analysed in 
more detail in note 13 on pages 193 to 198 to the Consolidated 
ﬁnancial statements.

Taxation 
Our tax strategy is aligned with our overall business strategy 
and is principled, transparent and sustainable for the long-
term. The key components of this strategy are:
 – A commitment to ensure full compliance with all statutory 
obligations, including full disclosure to all relevant tax 
authorities;

 – Any tax planning strategy entered into is only implemented 
after full consideration of the risks and if necessary after 
prior consultation with the relevant tax authority. Those 
ﬁndings are recorded in any relevant structuring document;
 – The maintenance of good relationships with tax authorities 

and a clear interaction between tax planning and the 
Group’s wider corporate reputation and responsibility; and

 – Management of tax affairs in a manner that seeks to 

maximise shareholder value whilst operating within the 
parameters of existing tax legislation.

Five-year summary31 March201928 February201828 February201728 February201628 February201Revenue£m150.3173.7123.9242.3203.7Proﬁt/(loss) before taxation£m6.348.2(1.7)25.834.8Net assets£m360.1379.3347.6363.3346.4Earnings/(loss) per sharePence4.232.2(2.4)17.526.8Net assets per sharePence289303278291276For the ﬁnancial period the underlying tax rate, including deferred taxes, was 16.5%. The Group’s tax rate is sensitive to both geographical location of proﬁts and business activity from which the proﬁts are derived. It is anticipated that future years will see an increase in the effective tax rate following legislative changes announced in the 2017 Budget and the possible impact of interest deductions in line with OECD’s Base Erosion Proﬁt Shifting (BEPS) Action Point 4.The suitability of our tax strategy is kept under constant review to ensure compliance with both the ﬁscal needs of the Group and the constant evolution of tax legislation.DividendsOur dividend policy consists of two elements as follows: –An Ordinary dividend, comprising interim and ﬁnal at 2.4 pence and 3.5 pence per share respectively; and –A supplemental dividend related to the net free level of cash ﬂow generated from the ﬁnancial year.A ﬁnal dividend of 3.5 pence per share was approved by the Board on 21 May 2019, to be paid on 6 September 2019 to shareholders on the register on 9 August 2019 (2018: 3.5 pence per share).On 21 May 2019, the Board approved the payment of a supplemental dividend of 4.1 pence per share, to be paid on 12 July 2019 to shareholders on the register on 7 June 2019.Foreign currency movementsThe Group’s operations are conducted primarily in the UK. However, as one of its three core regions is Dublin, the Group is exposed to movements in foreign exchange rates between Sterling and Euros.The Group’s principal exposure to foreign currency movements is in respect of its €47.0 million Euro-denominated loan notes, Euro-denominated bank loans and property assets.At 31 March 2019, the Group had net Euro-denominated liabilities of €30.9 million (2018: €38.7 million).The details of the Group’s sensitivity to exchange rate movements are set out in note 17(d) of the Consolidated ﬁnancial statements.During the year, the value of Sterling against the Euro has ﬂuctuated reﬂecting economic uncertainty relating to the UK’s decision to leave the EU. The impact on our NAV during the period was a gain of £0.4 million, which is the net result of a gain of £0.2 million recorded in ﬁnance income in the proﬁt and loss account and a gain through reserves of £0.2 million. This demonstrates that the Group’s foreign currency hedging strategy has been effective during times of signiﬁcant foreign currency volatility.Marcus ShepherdChief Financial Ofﬁcer21 May 2019OverviewGovernanceFinancial statementsAdditional information93 | U and I Group PLCAnnual Report & Accounts 2019Strategic reportCHAIRMAN’S INTRODUCTION 
TO CORPORATE GOVERNANCE

THE 
DISCIPLINE 
TO DELIVER.

PETER WILLIAMS,
CHAIRMAN,
STRATEGY DAY, DUBLIN

94  |  U and I Group PLC
Annual Report & Accounts 2019

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Dear Shareholder
On behalf of the Board 
I am pleased to present 
the Corporate Governance 
Report for U+I for the 
13-month ﬁnancial period 
ended 31 March 2019.

Our purpose
At U+I we turn unloved, 
overlooked sites into 
beautiful places to live, 
work and enjoy life. As I’ve 
discussed on page 7, this 
purpose, underpinned by our 
core values of imagination, 
intelligence and audacity, 
lies at the very heart of our 
business and drives 
everything we do as a 
Company. By engaging and 
listening to our different 
stakeholders, using the 
various channels set out 
on pages 127 to 129, we are 
able to understand how we 
can enhance people’s lives, 
and whole communities, 
by creating places with a 
long-lasting positive social 
and economic legacy. As a 
Company we live our values, 
they make us distinctive, 
and we are proud of the 
meaningful contributions 
we are delivering to the 
communities in which 
we operate. 

Our culture
It is only possible to fulﬁl our 
purpose by having the right 
culture, a culture championed 
by the Board and ingrained 
throughout the business. 
This includes ensuring full 
transparency and 
accountability in everything 
we do, as we demonstrate 
throughout this Report. At 
U+I our aim is to be a market 
leader in terms of the places 
we create, but also a thought 
leader by redeﬁning how we 
set about doing this. It is 
essential for us to not only 
talk about our purpose, 
culture and values, but also 
to be able to demonstrate 
how we are putting these into 
action in everything we do. 

95  |  U and I Group PLC
Annual Report & Accounts 2019

Governance highlightsU+I’s governance highlights for the 13-month ﬁnancial period ended 31 March 2019 include:  –The appointment of Professor Sadie Morgan as a new independent Non-executive Director, effective 3 April 2019, increasing representation of independent Non-executive Directors on the Board to 50%, and female representation on the Board to 33%. See pages 116 to 119. –Our ﬁrst externally facilitated Board and Board Committee evaluation, undertaken by Professor Rob Goffee, Emeritus Professor, London Business School. See pages 113 to 115. –In-depth Board engagement in the reﬁnement of our corporate strategy, and the strategic priorities of the business, through three Board strategy offsite days during the 13-month period to 31 March 2019. See page 101 for further details. –Extensive commitment to shareholder and stakeholder engagement as set out on pages 127 to 129. –Oversight over signiﬁcant project wins in the period in addition to key acquisitions and disposals within the Investment Portfolio. See page 108.  –Ongoing focus on Board and Executive succession planning with key senior hires during the period. See pages 116 to 119. –Full compliance with the UK Corporate Governance Code for the 13-month period to 31 March 2019, and Board engagement with the changes introduced by the revised Code effective for the Company from 1 April 2019. Applying the principles of the UK Corporate Governance CodeLEADERSHIPA clear tone of good governance has been established throughout the Company by: –A comprehensive corporate governance framework; –Clearly deﬁned roles and responsibilities of Board members; and –Half the Board being comprised of independent Non-executive Directors, fostering open and honest dialogue at the Board and its Committees, led by the Chairman. More on pages 104 to 111.EFFECTIVENESSEffective leadership of the Company by the Board through: –Continued focus on Group strategy, risk, ﬁnance, governance and people; –Successful execution of succession planning at Board level; and –Annual review of the effectiveness of the Board, its Committees and Directors.More on pages 112 to 119.ACCOUNTABILITYTransparent lines of accountability leading back to the Board with: –Clear and accountable reporting lines of Committees and senior management through to the Board; –Delegation of authority from the Board to its Committees set out in published terms of reference; and –Continuous review and improvement to risk management and internal controls.More on pages 120 to 126.RELATIONS WITH SHAREHOLDERS AND STAKEHOLDERSOngoing engagement with shareholders and stakeholders through:  –Executive Directors, the Chairman and Senior Independent Director meeting with key stakeholders and shareholders throughout the year;  –Site visits to key projects for major shareholders, analysts and stakeholders; and  –Engaging with smaller shareholders through the AGM process.More on pages 127 to 129.REMUNERATIONA transparent remuneration framework aligned with Company performance and the creation of shareholder value by:  –Incentive structure focused on longer-term performance; –Monitoring of market trends and incorporation of changes in legislation by the Remuneration Committee; and –All employee share incentive plan aligning the aims of Executive Management with those of the wider workforce. More on pages 130 to 148. 
 
 
CHAIRMAN’S INTRODUCTION 
TO CORPORATE GOVERNANCE
CONTINUED

One example where we are 
able to demonstrate our 
commitment to transparency 
and accountability is through 
the establishment of our new 
independent PPP Community 
Challenge Panel; this panel 
will be made up of a variety 
of external stakeholders 
and chaired by our new 
independent Non-executive 
Director, Professor Sadie 
Morgan, who will report 
directly to the Board. The 
purpose of this panel is to 
continually review and hold the 
Company to account on the 
promises we have made to 
stakeholders at the beginning 
of our projects. For further 
details see page 18.

Our strategy
It is important that, as a 
Board, we are focused on 
achieving our results, and 
ensuring the Company is 
delivering against targets and 
forecasts in the short term. 
However, I believe that it is 
also essential, especially 
given the uncertainty of 
today’s economic and 
political climate, that as a 
Board we are given the time 
to take a step back and 
understand the bigger 
picture, to enable us to 
identify future trends, 
opportunities and risks, as 
well as talent, to ensure the 
Company has the right focus, 
people and culture to guide 
the strategic direction of the 
business over the longer 
term. We do this through our 
Board and Leadership Team 
strategy days. In the period 
under review we had three 
such days. More information 
on what was discussed on 
these days can be found on 
page 101.

Appointment of new 
Non-executive Director
I am delighted to welcome 
Professor Sadie Morgan 
to the Board as a new 
independent Non-executive 
Director effective from 3 April 
2019. Professor Morgan has 
a distinguished career as 
a Sterling prize winning 
architect and will bring 
a wealth of knowledge and 
experience to Board 

96  |  U and I Group PLC
Annual Report & Accounts 2019

discussions. The recruitment 
process used for this 
appointment is described in 
the Nomination Committee 
report on page 117. In 
addition to the regular 
responsibilities of a Non-
executive Director, and the 
chairing of our new PPP 
Community Challenge Panel, 
discussed previously, 
Professor Morgan will also 
be taking on the additional 
responsibility of chairing our 
Workforce Engagement 
Panel, established in line with 
new corporate governance 
requirements. Following this 
appointment we are pleased 
to have reached one-third 
female representation on the 
Board. Further information on 
the Company’s diversity can 
be found on page 80.

2019 Board evaluation 
This year, as we continue to 
align ourselves with good 
governance practice, our 
Board evaluation was 
externally facilitated by 
Professor Rob Goffee, 
Emeritus Professor of the 
London Business School. 
Professor Goffee has 
signiﬁcant experience in 
conducting board evaluations. 
This was the ﬁrst external 
evaluation undertaken by the 
Board, and I am pleased to 
conﬁrm that the review 
concluded that the Board and 
its Committees were working 
effectively. Full details of 
the ﬁndings of the Board 
evaluation can be found on 
pages 113 to 115.

New Corporate 
Governance Code
As a Board we are committed 
to maintaining the highest 
standards of corporate 
governance. Only by 
ensuring a culture of good 
governance will we be able 
to achieve our purpose of 
creating long-lasting social 
and economic change for 
the communities in which 
we operate, as well as 
generating the sustainable 
value we demand for our 
shareholders. We welcome 
the introduction of the new 
UK Corporate Governance 
Code which came into effect 

on 1 January 2019, and 
applies to U+I for the year 
beginning 1 April 2019. 
The Board has reviewed the 
requirements of the new 
Code and is conﬁdent that 
the necessary processes and 
procedures have been put in 
place to enable the Board to 
report in our 2020 Annual 
Report that U+I is fully 
compliant with the Code. 

Stakeholder engagement
U+I understands the 
importance of continuous 
and meaningful engagement 
with its stakeholders. 
We believe that this is 
fundamental to our business, 
as well as our purpose and 
values, and it differentiates us 
as a company. You can read 
about our stakeholder 
engagement throughout the 
13-month period to 31 March 
2019 on pages 60 to 81 and 
127 to 129. 

Change of year-end 
Finally, as you will be aware, 
U+I changed its ﬁnancial 
year-end during the year from 
28 February 2019 to 31 March 
2019. This was for reporting 
purposes, to bring our 
accounting period in line with 
our peer group and many of 
our stakeholders, and to 
ensure important synergies 
and timeframes were aligned.

Peter Williams, 
Chairman
21 May 2019

“
OUR VALUES OF 
IMAGINATION, 
INTELLIGENCE AND 
AUDACITY ARE AT
THE HEART OF 
EVERYTHING WE
DO AT U+I
”

Board diversity1.2.1. Male: 67% 62. Female: 33% 3  Board skills and experience*1.2.3.4.1. Property: 72. Retail: 13. Finance: 44. Legal: 1 * Areas of signiﬁcant skill/experienceO
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CONNECTING 
GOVERNANCE AND 
PERFORMANCE

22 MAR
2018

STRATEGY  
AWAY DAY  
AT HARWELL
See page 101

29 MAR
2019

– Progress against 
year-end forecast
– Board evaluation results and 
recommendations
– Appointment of new independent 
Non-executive Director
– Update on status of key new project 
– Update on key project funding initiative 
‘Project Ruby’
– New Proptech Investment 
proposition and approval
– Board Committee updates
– Corporate governance 
changes

28 FEB 
2019

STRATEGY  
AWAY DAY 
IN DUBLIN 
See page 101

18 APR
2018 

– Approval of Annual 
Report and Accounts 
– Supplemental and ﬁnal 
dividend approval 
– Discussion of dividend policy
– Review of Viability and Going 
Concern Statements
– Key project updates
– ‘Working Smarter’ operational 
update
– Approval of AGM 
Resolutions

17 JAN 
2019

– Update on current 
performance against 
market guidance
– Organisational design update 
and approval
– Recruitment of key Leadership 
Team members
– Review of overheads and cash 
ﬂow position
– Approval of two new acquisitions 
and one disposal
– Reports from Committee  
Chairmen

– Review of interim results 
shareholder and analyst 
feedback 
– Update on development 
and trading gains progress 
against forecast
– Operational review update 
– Talent strategy presentation
– ‘PPP: The Reset’ update
– Stakeholder brand benchmarking 
results review 
– Approval of new acquisitions 
and disposals

6 DEC  
2018

7 JUNE  
2018 

– Approval of new 
acquisition, St. Peter’s 
Quarter, Bournemouth
– Update on key project bids at 
North Cambridge and St. James’s 
Gate, Dublin
– Investor/analyst roadshow 
feedback
– People and processes 
review update
– Review of 2015 LTIP vesting
– Overboarding discussion 

KEY BOARD 
ACTIVITIES DURING 
THE YEAR 

– Discussion on 
composition of Board 
materials
– Deep Dive project reviews on 
Morden Wharf and 8 Albert 
Embankment
– Presentation from Plus X, and approval 
of new JV arrangement.
– Chief Development Ofﬁcer 4-month 
sabbatical approval
– Cash ﬂow and overhead analysis
– Overview of new ﬁnance 
operating system
– Corporate reputation 
benchmarking update
– Proptech update

5 JULY  
2018

STRATEGY  
AWAY DAY 
IN BRIGHTON 
See page 101

13 SEPT 
2018

– Scenario planning in 
the event of an economic 
downturn
– Interim results and interim 
dividend approval
– Shareholder and investor 
relations analysis
– Operational review of business functions
– Update on key project funding 
initiative ‘Project Ruby’
– Review of marketing function
– Deep dive on Mayﬁeld project
– Update on Key PPP project launch
– Approval of two new 
acquisitions 

17 OCT  
2018 

97  |  U and I Group PLC
Annual Report & Accounts 2019

A Chief Executive’s report, which includes relevant matters to highlight since the previous meeting, along with economic and market analysis, in addition to in-depth project, ﬁnance, health and safety, marketing, governance, and investor relations reports are reviewed at each meeting. 
 
 
BOARD OF DIRECTORS

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98  |  U and I Group PLC
Annual Report & Accounts 2019

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1. Peter Williams 
Chairman

2. Matthew Weiner 
Chief Executive

3. Richard Upton 
Chief Development Ofﬁcer

4. Marcus Shepherd 
Chief Financial Ofﬁcer

How our purpose makes 
us distinctive:
“Ever since I joined U+I I have 
been impressed by the way in 
which we actively seek to 
form positive partnerships, 
whether that’s with the 
people who work directly for 
the business or in the PPP 
arena. U+I is mature enough 
to recognise the best results, 
including long-term values, 
come from working 
together.”

How our purpose makes 
us distinctive:
“We’re distinctive because 
we have an opinion, in a 
world where having a voice 
can be frowned upon. 
We take action orientated 
thought leadership as a 
responsibility and must stand 
up for our industry that is too 
easily criticised. It is our 
purpose to help communities 
understand through 
delivering great places, 
that partnership can be 
productive and not 
destructive as the default.”

How our purpose makes 
us distinctive:
“The fundamental purpose of 
regeneration, and in turn U+I, 
is to improve the health and 
well-being of people by 
creating places of beauty, 
convenience and opportunity, 
which we shape with values 
of intelligence, imagination 
and audacity (the last value 
provides the pace and 
innovation necessary to be 
market-leading). In so doing 
U+I has the ambition to be 
best in class and with all that 
comes an incredible culture, 
brand and sustainable growth 
in shareholder value.”

How our purpose makes 
us distinctive:
“The easiest thing in the 
world is to accept the status 
quo and do exactly what 
everyone else does. But is 
that what communities need? 
Is that what people want? 
We should challenge ourself 
to deliver truly inspirational 
places.”

Appointed: 
4 January 2016

Period of service on 
the Board:
3 years, 5 months

Appointed: 
18 March 2004

Period of service on 
the Board:
15 years, 2 months

Appointed: 
19 May 2014

Period of service on 
the Board:
5 years

Appointed: 
18 February 2013

Period of service on 
the Board:
6 years, 3 months

Experience
Matthew was appointed 
as Chief Executive of the 
Company following the AGM 
in July 2015, previously 
serving on the Board of 
Development Securities Plc 
as a Director. Prior to joining 
the Company, Matthew 
worked as a Fund Manager 
at both Legal & General and 
AXA Investment Management. 
Matthew is a member of the 
Royal Institution of Chartered 
Surveyors, and a board 
member of the charity Jewish 
Care. He joined Development 
Securities Plc in November 
2000 as Director of 
Investments. 

Experience
Richard was the co-founder 
and Chief Executive Ofﬁcer 
of the specialist regeneration 
real estate developer 
Cathedral Group, which was 
acquired by Development 
Securities Plc in May 2014. 
He was previously a founding 
director of Mount Anvil, 
a leading London house 
builder, and is a member 
of the London Advisory 
Committee for English 
Heritage. In January 2018, 
Richard was appointed a 
Commissioner for Historic 
England. Richard was 
appointed as Deputy Chief 
Executive of the Company 
in July 2015.

Experience
Marcus is a member of 
the Institute of Chartered 
Accountants in England and 
Wales. His previous roles 
included Finance Director 
(Global Real Estate) at Aviva 
Investors, Chief Financial 
Ofﬁcer (Europe) for Valad 
Property Group and Group 
Finance Director of 
Teesland Plc.

Experience
Peter became Chairman of 
the Company on 14 July 2016. 
The former CEO of Selfridges, 
he has over 30 years of 
board-level experience, 
having held a number of 
executive and non-executive 
positions at a wide range of 
public and private consumer-
facing businesses. Peter is 
currently Chairman at DP 
Eurasia NV, the master 
franchise owner for Domino’s 
Pizza in Turkey and Russia, 
he was also recently made 
Chairman of Superdry plc, 
the UK branded clothing 
company. In addition, Peter 
has served on the boards of 
many companies, including 
Boohoo.com plc. Rightmove 
plc, ASOS plc, Cineworld 
Group Plc, Jaeger, Silverstone 
Holdings Ltd, EMI Group, 
Blacks Leisure Group Plc, 
JJB Sport, GCap Media and 
Capital Radio Plc. Peter is 
a member of the Institute 
of Chartered Accountants 
in England and Wales.

Committees
Chairman of the Nomination 
Committee, member of the 
Remuneration Committee.

99  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
BOARD OF DIRECTORS
CONTINUED

5. Nick Thomlinson 
Senior Independent 
Non-executive Director

How our purpose makes 
us distinctive:
“U+I challenges the concept 
that as a business you can 
either ‘do good or do well’, 
by engaging and encouraging 
its wider stakeholder base to 
contribute towards a shared 
vision that through truly 
transformational 
regeneration, and the making 
of great places, we can 
unlock untapped potential 
creating positive change 
for all.”

6. Barry Bennett 
Non-executive Director

How our purpose makes 
us distinctive:
“Every development, whether 
good or bad, creates 
locations for people to live, 
work or play. U+I is single 
minded in the pursuit of 
creating great distinctive 
places. It is this focus on 
developing memorable 
places which sets us apart.”

7. Lynn Krige 
Independent Non-executive 
Director 

8. Ros Kerslake OBE 
Independent Non-executive 
Director 

How our purpose makes 
us distinctive:
“To make an impact you have 
to have focus. The need for 
regeneration is nationwide 
and we have chosen to focus 
on three key geographies 
to concentrate our impact 
and succeed in creating 
amazing places.”

How our purpose makes 
us distinctive:
“Many organisations claim 
to deliver regeneration, but 
true regeneration and place 
making requires a real 
commitment to working with 
the local community and 
understanding what deﬁnes 
an area. U+I genuinely makes 
that effort and works hard, 
in partnership with local 
stakeholders, to deliver the 
right scheme.”

Appointed: 
3 January 2012

Period of service on 
the Board:
7 years, 5 months

Appointed: 
19 May 2014

Period of service on 
the Board:
5 years

Appointed: 
10 March 2016

Period of service on 
the Board:
3 years, 3 months

Appointed: 
1 September 2017

Period of service on 
the Board:
1 year, 9 months

Experience
Nick is a member of the Royal 
Institution of Chartered 
Surveyors. He is a former 
senior partner and Chairman 
of the Knight Frank Group.

Committees
Chairman of the 
Remuneration Committee, 
member of the Audit and Risk 
Committee and Nomination 
Committee.

Experience
Barry is a chartered 
accountant with signiﬁcant 
experience in the ﬁnancial 
and property sectors, and 
is a Fellow of the Institute of 
Chartered Accountants in 
Ireland. Barry was previously 
a founding director of Mount 
Anvil, a London housebuilder, 
and in 2002 founded 
specialist regeneration real 
estate developer Cathedral 
Group with Richard Upton.

Experience
Lynn is currently Chief 
Financial Ofﬁcer at WELL 
Group and brings over 
25 years’ experience from 
across the construction, 
infrastructure, investment and 
B2B services sectors. She 
has previously held executive 
roles at British Engineering 
Services Limited, Speedy 
Hire Plc and John Laing Plc, 
originally qualifying with 
Deloitte in South Africa. 

Committees
Chairman of the Audit and 
Risk Committee, member of 
the Remuneration Committee 
and Nomination Committee.

Experience
Ros is currently Chief 
Executive Ofﬁcer of the 
Heritage Lottery Fund and 
has previously held senior 
executive positions at The 
Prince’s Regeneration Trust, 
RegenCo. and Network Rail. 
Trained as a solicitor, she 
brings over 30 years of 
property, regeneration and 
corporate experience and 
has varied experience 
working across publicly 
listed, private and public 
interest companies. Ros is 
also a member of the 
Community, Voluntary and 
Local Services Honours 
Advisory Committee. Ros 
holds honorary degrees from 
Keele and Staffordshire 
Universities for her work in 
heritage and regeneration, 
and, in 2016, she was 
awarded an Order of the 
British Empire for her services 
to British Heritage. 

Committees
Member of the Audit and 
Risk Committee, the 
Remuneration Committee 
and the Nomination 
Committee.

100  |  U and I Group PLC
Annual Report & Accounts 2019

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STRATEGIC THINKING

In today’s constantly 
evolving economic and 
political climate it is 
essential that, as a Board, 
we keep abreast of current 
trends and developments 
within the markets we 
operate, but also that we 
are allowed the time to step 
back and look at the bigger 
picture, and to engage in 
debate and strategic 
planning over the longer 
term. To facilitate this 
Directors are taken away 
from the regular Board 
environment by way of our 
Board offsite strategy days. 

Organised by the Company 
Secretary, U+I holds two 
offsite Board and 
Leadership Team strategy 
days each year. In the 
13-month period to 
31 March 2019 the Board 
held three strategy away 
days. The purpose of these 
days is: i) to bring to life 
U+I’s developments through 
site visits, during the period 
under review we visited 
sites at Harwell, Brighton 
and Dublin; and ii) to ensure 
enough time is given for 
detailed and focused 
discussion and debate 
around the strategic 
direction and priorities of 
the Company outside the 
regular Board meeting 
agenda. 

March 2018
Harwell Science Campus, 
Oxfordshire:
 – Guided tour of Harwell 

Science Campus;

 – strategic review of risk, 

liquidity, market outlook, 
political developments, 
overheads, return on 
capital; 

 – facilitated setting of 
strategic objectives 
2018–2023;

 – review of metrics for 
measuring success;
 – review of construction 

procurement costs, and 
risks on complex projects;

 – ‘Proptech’ Investment 

review;

 – dividend policy review; and
 – approval of change of 

year-end to 31 March 2019.

September 2018
Circus Street and Preston 
Barracks, Brighton:
 – Guided tour of Circus 
Street and Preston 
Barracks developments;

 – strategic review of 

overheads and acquisition 
strategy; 

 – review of Investment 
Portfolio strategy;

 – update on ‘Project Ruby’ 

key funding strategy;
 – external presentation on 
political developments 
and risks;

 – key project approvals; and
 – approval of Employee 
Beneﬁt Trust funding.

February 2019 
Donnybrook House and 
White Heather Industrial 
Estate, Dublin:
 – Guided tour of U+I’s 

developments in Dublin 
including Donnybrook 
House and White Heather 
Industrial Estate;

 – presentation on Ireland’s, 
and in particular Dublin’s, 
political and economic 
outlook over the short 
and longer terms by an 
experienced resident 
expert;

 – talent management 

review;

 – organisational strategy 
review and discussion;
 – update on St James’s 
Gate proposal; and
 – updates on our Plus X, 

JV business and ‘Project 
Ruby’, a key strategic 
project funding initiative.

9. Professor Sadie Morgan*
Independent Non-executive 
Director

How our purpose makes 
us distinctive:
“I chose to join the Board of 
U+I due to the very distinctive 
approach it takes to its 
projects, founded on a deep 
sense of responsibility, 
inclusion, purpose and 
community, which I share.” 

Appointed: 
3 April 2019

Period of service on 
the Board:
2 months

Experience
Sadie has over 20 years’ 
experience in the real estate 
sector as a Stirling prize-
winner and co-founder of 
dRMM architects. In addition, 
Sadie chairs the Independent 
Design Panel for High Speed 
2, reporting directly to the 
Secretary of State. She is 
one of ten commissioners for 
the National Infrastructure 
Commission, and is also 
one of the Mayor’s Design 
Advocates for the Greater 
London Authority.

Sadie completed an MA at the 
Royal College of Arts in 1993. 
She was elected president of 
the Architectural Association 
in 2013, was shortlisted for the 
AJ Woman Architect of the 
Year award in 2014, and in 
2016 she was appointed 
Professor of Professional 
Practice at the University of 
Westminster and awarded an 
honorary doctorate from 
London South Bank University.

Committees
Member of the Remuneration 
Committee and the 
Nomination Committee.

*  Professor Sadie Morgan joined the 
Board on 3 April 2019. She is not 
present in the Board photo on 
page 98.

101  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
BOARD STATEMENTS

In accordance with the UK Corporate Governance Code (the Code), the Board is required to make a number of statements. 
These statements are set out in the table below:

REQUIREMENT

BOARD STATEMENT

Compliance with the Code
As a Company listed on the London Stock Exchange, 
U and I Group PLC is subject to the requirements of the 
Code. The Board is required to comply with the provisions 
of the Code and, where it does not, explain the reasons for 
non-compliance.

Going Concern Statement
The Board is required to conﬁrm that the Group has adequate 
resources to continue in operation for at least 12 months.

Viability Statement 
The Board is required to assess the viability of the Company, 
taking into account the current position and the potential 
impact of the principal risks and uncertainties set out on 
pages 82 to 85.

Principal risks facing the Group 
The Board is required to conﬁrm that a robust assessment of 
the principal risks facing the Company has been carried out 
and should describe those risks and explain how they are 
being managed or mitigated. 

Risk management and internal control
The Board is required to monitor the Company’s risk 
management and internal control systems and, at least 
annually, carry out a review of their effectiveness.

The Board conﬁrms that, in its view, the Company has 
applied the main principles and has complied with all the 
provisions set out in the Code during the ﬁnancial period 
under review.

The Board is aware of the requirements of the new 
Governance Code coming into effect for the Company on 
1 April 2019, and is working to ensure it complies fully with 
the principles and provisions set out under the new Code.

The Directors are satisﬁed that the Group has adequate 
resources to continue to be operational as a going concern 
for the foreseeable future and therefore have adopted the 
going concern basis in preparing the Group’s 2019 ﬁnancial 
statements.

The Directors have a reasonable expectation that the 
Group will be able to continue in operation and meet its 
liabilities as they fall due over the ﬁve-year period to 
March 2024.

A robust assessment of the principal risks facing the 
Company was undertaken during the year, including those 
that would threaten its business model, future performance, 
solvency or liquidity. The signiﬁcant risks facing the 
Company, and how these are mitigated, are set out on 
pages 82 to 85.

The Board conducted a review of the effectiveness of the 
systems of risk management and internal control during the 
period, and considers that there is a sound system of 
internal control which accords with the Financial Reporting 
Council’s Guidance on Risk Management, Internal Control 
and Related Financial and Business Reporting.

Fair, balanced and understandable
The Board should conﬁrm that it considers the Annual Report, 
taken as a whole, to be fair, balanced and understandable and 
provides the information necessary for shareholders to assess 
the Company’s position and performance, business model 
and strategy.

The Directors consider, to the best of each person’s 
knowledge and belief, that the Annual Report, taken as a 
whole, is fair, balanced and understandable and provides 
the information necessary for shareholders to assess the 
Company’s position and performance, business model 
and strategy.

MORE INFORMATION 

Details on how the 

Company complies with 

the Code can be found 

throughout the Governance 

section of the Annual 

Report – see pages 94 

to 155.

More details on the Going 

Concern Statement can be 

found on page 126.

U+I’s Viability Statement 

can be found on page 86.

Information around key 

risks and risk management 

processes can be found on 

pages 82 to 85, and pages 

121 to 126 of the Audit and 

Risk Committee Report.

Details on the systems of 

risk management and 

internal control can be 

found on page 120.

See the Audit and Risk 

Committee Report on page 

125, and the Statement of 

Directors’ Responsibilities 

on page 156.

The images on pages 
102 and 103 are from the 
Strategy Day, Dublin.

102  |  U and I Group PLC
Annual Report & Accounts 2019

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In accordance with the UK Corporate Governance Code (the Code), the Board is required to make a number of statements. 

These statements are set out in the table below:

REQUIREMENT

BOARD STATEMENT

Compliance with the Code

As a Company listed on the London Stock Exchange, 

U and I Group PLC is subject to the requirements of the 

Code. The Board is required to comply with the provisions 

of the Code and, where it does not, explain the reasons for 

non-compliance.

The Board conﬁrms that, in its view, the Company has 

applied the main principles and has complied with all the 

provisions set out in the Code during the ﬁnancial period 

under review.

The Board is aware of the requirements of the new 

Governance Code coming into effect for the Company on 

1 April 2019, and is working to ensure it complies fully with 

the principles and provisions set out under the new Code.

The Directors are satisﬁed that the Group has adequate 

Going Concern Statement

The Board is required to conﬁrm that the Group has adequate 

resources to continue to be operational as a going concern 

resources to continue in operation for at least 12 months.

for the foreseeable future and therefore have adopted the 

going concern basis in preparing the Group’s 2019 ﬁnancial 

statements.

Viability Statement 

The Directors have a reasonable expectation that the 

The Board is required to assess the viability of the Company, 

Group will be able to continue in operation and meet its 

taking into account the current position and the potential 

impact of the principal risks and uncertainties set out on 

March 2024.

liabilities as they fall due over the ﬁve-year period to 

pages 82 to 85.

Principal risks facing the Group 

A robust assessment of the principal risks facing the 

The Board is required to conﬁrm that a robust assessment of 

Company was undertaken during the year, including those 

the principal risks facing the Company has been carried out 

that would threaten its business model, future performance, 

and should describe those risks and explain how they are 

being managed or mitigated. 

solvency or liquidity. The signiﬁcant risks facing the 

Company, and how these are mitigated, are set out on 

Risk management and internal control

The Board is required to monitor the Company’s risk 

management and internal control systems and, at least 

annually, carry out a review of their effectiveness.

pages 82 to 85.

The Board conducted a review of the effectiveness of the 

systems of risk management and internal control during the 

period, and considers that there is a sound system of 

internal control which accords with the Financial Reporting 

Council’s Guidance on Risk Management, Internal Control 

and Related Financial and Business Reporting.

Fair, balanced and understandable

The Directors consider, to the best of each person’s 

The Board should conﬁrm that it considers the Annual Report, 

knowledge and belief, that the Annual Report, taken as a 

taken as a whole, to be fair, balanced and understandable and 

whole, is fair, balanced and understandable and provides 

provides the information necessary for shareholders to assess 

the information necessary for shareholders to assess the 

the Company’s position and performance, business model 

Company’s position and performance, business model 

and strategy.

and strategy.

MORE INFORMATION 

Details on how the 
Company complies with 
the Code can be found 
throughout the Governance 
section of the Annual 
Report – see pages 94 
to 155.

More details on the Going 
Concern Statement can be 
found on page 126.

U+I’s Viability Statement 
can be found on page 86.

Information around key 
risks and risk management 
processes can be found on 
pages 82 to 85, and pages 
121 to 126 of the Audit and 
Risk Committee Report.

Details on the systems of 
risk management and 
internal control can be 
found on page 120.

See the Audit and Risk 
Committee Report on page 
125, and the Statement of 
Directors’ Responsibilities 
on page 156.

103  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
LEADERSHIP

The Board
The Board, led by the 
Chairman, Peter Williams, 
is responsible for ensuring 
the effective leadership of 
the Company through the 
approval and implementation 
of U+I’s business strategy, 
and oversight and review of 
the Group’s activities. It is 
collectively responsible to 
shareholders for the long-
term success of the 
Company, whilst ensuring 
that levels of risk and risk 
mitigation are appropriate. 

In carrying out its 
responsibilities, the Board 
takes into account the size 
and complexity of the Group, 
and the internal control 
measures employed, to 
determine which formal 
matters are to be reserved 
to it, and which are to be 
delegated to its various 
Committees or the Executive 
Directors and Leadership 
Team. The Board has put in 
place a formal schedule of 
reserved matters which 
require its approval that 
includes, but is not limited 
to, those set out opposite.

The Board meets regularly 
during the year, see page 106 
for further information, and 
covers a wide range of topics 
including those set out in an 
annual schedule of Board 
items, one-off project 
speciﬁc items, and any adhoc 
items speciﬁed within its 
terms of reference. How the 
Board spent its time during 
the year can be found on 
pages 108 to 110. During the 
13-month period covered by 
this report the Board held 
three strategy away days 
at Harwell Campus, 
Oxfordshire, Brighton and 
Dublin. Further information 
on the matters the Board 
addressed during these 
strategy days can be found 
on page 101. 

104  |  U and I Group PLC
Annual Report & Accounts 2019

Matters reserved for 
the Board 
At least once a year the 
Board reviews the nature 
and scale of matters 
reserved for its decision. 
These include:
 – Company strategy and 
ﬁnancial performance;
 – Approval of signiﬁcant 
funding arrangements, 
capital expenditure and 
the issue of any new 
securities;

 – Executive performance, 
retention, remuneration 
and succession planning 
for the Board and senior 
management;
 – Authorisation of 

signiﬁcant transactions, 
investment acquisitions 
and disposals and 
corporate acquisitions;

 – Dividend policy;
 – Oversight of corporate 

reputation and 
communication; 

 – Internal control and risk 
management systems, 
and;

 – Review of the Board’s 
own effectiveness.

Board composition

1.

2.

1. Executive: 33%
2. Non-executive: 67%

Board independence

1.

3.

2.

1. Independent: 4
2. Non-independent: 4
3. Chairman:*  1

*  Chairman was conﬁrmed 

independent on appointment.

Further information on the 
appointment of Sadie 
Morgan can be found on 
pages 116 to 119.

Biographical information for 
all Directors in ofﬁce at the 
date of this Report is set out 
on pages 99 to 101.

Board composition and 
appointments
As at 1 March 2018, the 
Board consisted of three 
Executive Directors, a 
Non-executive Chairman and 
four Non-executive Directors, 
three of whom were 
considered independent. 
The Board did not change 
in the 13-month period to 
31 March 2019. On 3 April 
2019 the Company 
announced that Professor 
Sadie Morgan would be 
appointed as a new 
independent Non-executive 
Director with immediate 
effect. On appointment 
Professor Morgan also 
became a member of the 
Remuneration Committee 
and the Nomination 
Committee. Professor 
Morgan’s additional 
responsibilities at U+I are 
set out on page 117. As at 
21 May 2019, the date this 
report was approved, the 
Board consisted of three 
Executive Directors, a 
Non-executive Chairman and 
ﬁve Non-executive Directors, 
four of whom were deemed 
to be independent.

Chief Development
Ofﬁcer
On 22 May 2019, following 
approval from the Board, 
Richard Upton’s job title 
changed from Deputy Chief 
Executive Ofﬁcer to Chief 
Development Ofﬁcer. The 
Board believed that the 
Deputy CEO title did not fully 
reﬂect the full extent and 
focus of Richard’s role. Whilst 
Richard’s job content is not 
changing, this new title better 
indicates where his focus will 
be concentrated, where 
he has accountability, and 
his responsibility for the 
origination of new 
opportunities, exploiting 
the potential within U+I’s 
increased pipeline, and the 
execution of our major 
PPP projects.

 
 
 
 
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Division of responsibilities 
In accordance with the UK Corporate Governance Code, the roles and remit of the Chairman, Chief Executive and Senior 
Independent Director are set out in writing and agreed by the Board. There were no signiﬁcant changes to the Chief Executive’s 
or Chairman’s other commitments during the year.

ROLE

Chairman 
Peter Williams

The Chairman is responsible for the 
leadership of the Board and ensuring 
its effectiveness.

Chief Executive 
Matthew Weiner

RESPONSIBILITIES

Peter Williams, who became Chairman following the 2016 AGM, has the following 
key responsibilities:
 – To organise the business of the Board and ensure the smooth ﬂow of 

information, in conjunction with the Company Secretary, and to promote open 
and honest dialogue to enable effective decision-making. 

 – To work alongside the Chief Executive in establishing the key strategic 

objectives of the Company.

 – To promote the Company and enhance its standing with stakeholders.

Matthew Weiner, who became Chief Executive of the Company following the 2015 
AGM, has the following key responsibilities:
 – To work alongside the Chairman, Executive Directors and Leadership Team in 

The Chief Executive is responsible for 
the running of the Company’s business 
and meeting its strategic objectives.

establishing the key strategic objectives of the Company.

 – To oversee the overall performance of the business.
 – To implement the Group’s business plan.

Non-executive Directors 
Nick Thomlinson
Barry Bennett
Lynn Krige
Ros Kerslake
Sadie Morgan

The Non-executive Directors play a key 
role in shaping strategy and holding 
executive management to account.

Senior Independent Director 
Nick Thomlinson

The Non-executive Directors, as set out on pages 100 and 101, have the following 
key responsibilities:
 – To bring external perspectives and insight to the deliberations of the Board and 

its Committees. 

 – To play an important role in the formulation and progression of the Board’s 
agreed strategy, and review and monitor the performance of the executive 
management in the implementation of this strategy.

 – To provide challenge to Executive Directors to produce a considered and 

independent outcome to Board deliberations.

Nick Thomlinson, who became Senior Independent Director following the 2016 
AGM, has the following key responsibilities:
 – To be available to stakeholders should they have concerns which have not been 

The Senior Independent Director is an 
additional avenue of recourse to 
stakeholders where normal channels 
are not available or appropriate.

resolved through the normal channels, or if these channels are not deemed 
appropriate.

 – To act as Chairman should the requirement arise.
 – To be responsible for leading the Non-executive Directors in the annual 

Leadership Team

Consists of U+I’s Executive Directors 
and Senior Divisional Directors.

Company Secretary 
Chris Barton

performance evaluation of the Chairman.

 – To act as a sounding board for the Chairman and serve as an intermediary for 

other Directors where necessary.

The Leadership Team has the following key responsibilities:
 – Responsibility for the development and implementation of the Company’s 

business strategy.

 – Responsibility for the executive management of the Company’s business.
 – To assist the Chief Executive, Chief Development Ofﬁcer, and Chief Financial 
Ofﬁcer in managing the operational and ﬁnancial performance of the Group.

Chris Barton, who became Company Secretary in November 2014, has the 
following key responsibilities:
 – Under direction from the Chairman, to ensure the appropriate information ﬂows 

An ofﬁcer of the Company responsible 
for advising the Board on governance 
matters.

to the Board and its Committees to facilitate discussions and allow fully 
informed decisions to be made by Directors. 

 – To ensure the Non-executive Directors have access to senior management 

where required. 

 – To ensure an appropriate induction process and ongoing training are in place 

for Executive and Non-executive Directors. 

 – To facilitate the Board evaluation process.
 – To advise the Board and its Committees on all governance matters.

105  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
LEADERSHIP
CONTINUED

Board meetings during 
the year
The Board met formally ten 
times during the 13-month 
period to 31 March 2019. 
Three of these meetings, in 
March and September 2018, 
and February 2019 were 
offsite Board and Leadership 
Team strategy days. 

Additional meetings were 
called at short notice for 
speciﬁc project approval, and 
did not necessarily require 
full attendance, although all 
Directors were given the 
opportunity to attend or 
comment on each proposal 
put forward. Where a Director 
is unable to participate in a 
meeting either in person or 
remotely, the Chairman will 
solicit their views on key items 
of business ahead of time, 
in order that these can be 
presented at the meeting and 
can inﬂuence the debate. 

The Chairman and the 
Non-executive Directors met 
on two occasions during the 
period without Executive 
Directors in attendance. The 
Non-executive Directors also 
met during the period without 
the Executive Directors or the 
Chairman present.

Richard Upton 
sabbatical
Our Chief Development 
Ofﬁcer, Richard Upton, 
undertook a four-month 
sabbatical from the 
Company between 
1 September 2018 and 
31 December 2018, where 
he spent time travelling 
overseas with his family. This 
sabbatical was approved by 
the Board and was in line 
with the Company’s 
sabbatical policy. To 
ensure full transparency 
the Company announced 
details of this sabbatical to 
the market on 4 July 2018. 
Richard remained in contact 
with the business on a range 
of projects throughout his 
sabbatical period and 
was instrumental in the 
Company’s bid for a 
signiﬁcant new project 
during this time. 

106  |  U and I Group PLC
Annual Report & Accounts 2019

BOARD MEETING ATTENDANCE

Board and Committee meetings are typically held in the boardroom at the Company’s 
registered ofﬁce, 7A Howick Place, London SW1P 1DZ. Board strategy days are held at an 
offsite location. The following table sets out the attendance of the Directors at the 
scheduled meetings of the Board during the ﬁnancial year:

Director
Peter Williams 
Chairman
Matthew Weiner 
Chief Executive
Richard Upton 
Chief Development Ofﬁcer
Marcus Shepherd 
Chief Financial Ofﬁcer
Nick Thomlinson 
Senior Independent Director
Barry Bennett 
Non-executive Director
Lynn Krige 
Independent Non-executive Director
Ros Kerslake 
Independent Non-executive Director
Sadie Morgan2 
Independent Non-executive Director

Number of 
meetings 
attended/
meetings 
possible

10/10

10/10

Appointed

04.01.2016

18.04.2004

19.05.2014

7/71

18.02.2013

03.01.2012

19.05.2014

10.03.2016

10/10

10/10

10/10

10/10

01.09.2017 

10/10

03.04.2019

–

% 
Attendance 

100

100

100

100

100

100

100

100

–

1  Richard Upton took a brief sabbatical for the period 1 September 2018 to 31 December 2018 during which time he 
was unavailable to attend three Board meetings. This sabbatical was approved in advance by the Board and an 
announcement was made to the London Stock Exchange on 4 July 2018, see opposite for more information.

2  Sadie Morgan was appointed as a Director of the Company following the period under review.

BOARD AND COMMITTEE MEETING PREPARATION PROCESS

The Company Secretary manages a yearly planner of 
key Board and Board Committee agenda items and the 
timings required for annual matters.

The Company Secretary liaises with the Chairman, 
Executive Directors and Committee Chairmen at least 
two weeks ahead of the Board and Committee meetings 
to conﬁrm agenda items.

The Investment Committee meets around ten days prior 
to each Board meeting to agree all project-related matters 
requiring Board discussion/approval and feeds these 
items into the agenda via the Company Secretary.

Board papers are circulated electronically, or hard copy 
where required one week prior to the meeting.

Standardised Board 
reporting templates are 
in place, and training 
has been given to those 
preparing reports to 
ensure clarity, 
consistency and 
conciseness in 
approach.

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GOVERNANCE STRUCTURE

To assist the Board in 
discharging its duties, 
matters are delegated to the 
Committees of the Board and 
Management Committees 
set out in this diagram. 
Further details of the roles 
and responsibilities of these 
Committees are set out 
throughout this report

THE BOARD
Responsible for the performance and 
long-term success of the Company, 
including leadership, strategy, values, 
culture, controls, risk management 
and governance.
 Read more on pages 104 to 111

  Board Committees
  Management Committees

AUDIT AND RISK
COMMITTEE
Read more on pages 
121 to 126

REMUNERATION
COMMITTEE
Read more on pages 
130 to 148

NOMINATION
COMMITTEE
Read more on pages 
116 to 119

INVESTMENT
COMMITTEE
Read more on page 111

OPERATING
COMMITTEE
Read more on page 111

STRATEGY
COMMITTEE
Read more on page 111

RISK 
MANAGEMENT
COMMITTEE
Read more on page 120

DISCLOSURE
COMMITTEE
Read more on page 111

BUSINESS
DIVISIONS
Read more on pages 
1 to 59

107  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
LEADERSHIP
CONTINUED

review within the context of 
the strategic priorities of the 
Company and the key risks 
facing the business, as set 
out on pages 82 to 86. 

The ﬁve areas in the chart 
to the right, and set out on 
pages 108 to 110, represent 
the primary focus of the 
Board in discharging its 
obligations to the Company, 
and how it allocated its 
time during the period to 
31 March 2019:

Key Board activities during 
the year
The key activities the Board 
addressed during the 
13-month period to 31 March 
2019 can be separated into 
the ﬁve general areas 
outlined on pages 108 to 110. 
The amount of time spent on 
each area will vary depending 
on the nature and importance 
of the activity at any given 
time, however, a general 
outline of how the Board 
spent its time is shown in the 
diagram to the right. 

The Board and the 
Leadership Team keep all 
areas of the business under 

TOPIC

WHAT WE DO

1. Strategy and new and 
existing project portfolio

The Board formulates and 
oversees the strategic 
direction and priorities of the 
Company, ensuring the 
correct strategy, given the 
nature of the markets and the 
economic conditions in which 
it is operating.

5.

1.

4.

3.

Board activities – allocation of time

2.

4.

3.

5.

1.

2.

1. Strategy and business 
  development: 52% 
2. Financial planning and 
  performance: 16%
3. Leadership, culture and 
  people: 14%
4. Governance, risk and 
internal controls: 10%

5. Stakeholders and investor 

relations: 8%

1. Strategy and business 
  development: 52% 
2. Financial planning and 
  performance: 16%
3. Leadership, culture and 
  people: 14%
4. Governance, risk and 
internal controls: 10%
WHAT WE HAVE DONE THIS YEAR
5. Stakeholders and investor 
 – In-depth reviews and discussion around the strategic 
relations: 8%
priorities of the Company, including three dedicated 
Board strategy days during the 13-month period to 
31 March 2019. See page 101 for further details.
 – Comprehensive project reports reviewed at each 

meeting, covering progress against plan in accordance 
with pre-approved strategy. 

 – Appointment as master planner and promoter to deliver 
5,200 homes and 1 million sq.ft. of ofﬁce space in North 
Cambridge alongside Anglian Water and Cambridge 
City Council.

 – In-depth discussions around, and roll-out, of ‘Project 

Ruby’, a major strategic project funding initiative 
undertaken during the period, to continue through 
2019/20.

 – Progress made with regards to the repositioning of the 

Investment Portfolio, including acquisitions of St. Peter’s 
Quarter, Bournemouth, the Waterglade Retail Park in 
Clacton-On-Sea, and Finchley Pure Gym*. 

 – Disposal of assets at Charlton Riverside, Bryn Blaen, 

and at The Old Vinyl Factory, Hayes, in line with agreed 
strategy*. 

 – Two investments made as part of a new ‘Proptech’ 

investment strategy.

 – Sale of residential sites at Preston Barracks, allowing for 

the future delivery of one of Brighton’s biggest ever 
mixed-use regeneration schemes*.

 – Approval of new acquisitions in line with agreed strategy, 

including Finsbury Park, Ashford and Dublin*. 

 – Successful funding of Luneside East Regeneration 

Project, Lancaster. 

 – Consideration of reports received from the Investment 

Committee. 

*  Further details of all acquisitions and disposals made during the period 

under review can be found on our website at uandiplc.com. 

108  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
 
 
 
 
 
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TOPIC

WHAT WE DO

WHAT WE HAVE DONE THIS YEAR

2. Financial planning 
and performance

The Board, led by the Chief 
Financial Ofﬁcer, monitors 
and discusses the ﬁnancial 
performance and 
requirements of the Company 
at each meeting, and has sole 
authority to approve 
transactions over a 
prescribed threshold.

3. Leadership, culture 
and people

Our people are our most 
important asset and are 
what sets U+I apart from its 
competitors. The Board has 
ongoing oversight to ensure 
the Company has the right 
people and culture on the 
Board, its Committees, 
its Leadership Team and 
throughout the business, as 
well as addressing key areas 
of succession planning, 
diversity and development 
of talent.

 – A review of ﬁnancial performance against strategy, and 

the monitoring of performance against forecasted trading 
and development gains. 

 – Detailed consideration of ﬁnancial matters at each 

meeting, led by the Chief Financial Ofﬁcer, including cash 
ﬂow, trading forecast, annual and interim results, ﬁnal, 
interim and supplemental dividends, treasury and tax 
matters, and consideration of the Going Concern and 
Viability Statements. 

 – Negotiation of a loan facility to provide increased 

ﬂexibility and greater security to the Company’s funding 
lines. 

 – Oversight of the implementation of a new ﬁnancial 

reporting system. 

 – Change of year-end to align the Company with market 

and peer group reporting. 

 – Focus on operational discipline and capital, including 
ongoing review and reduction in the Company’s net 
recurring overheads.

 – Appointment of Professor Sadie Morgan as a new 

independent Non-executive Director following the end of 
the 13-month ﬁnancial period under review. This new role 
encompasses the additional responsibilities described on 
page 117.

 – Review of the operational structure of the Company to 
ensure the business is ﬁt to meet its ongoing and future 
strategic priorities.

 – Review of ‘people strategy’ and current priorities in terms 
of succession planning, and encouragement of diversity 
across the business.

 – Oversight of ongoing ‘Working Smarter’ initiative 

addressing key processes of the business, including 
review and reﬁnement of the Company’s ‘factory ﬂoor’, 
led by the Chief Operating Ofﬁcer.

 – Changes to the structure of the Leadership Team to 
ensure the skills and experience are aligned with the 
future strategic priorities of the business, including the 
new appointments of Creative Director and Director of 
Content to the Leadership Team.

 – Roll-out of a new talent development initiative to actively 
engage and encourage all employees to reach their full 
potential.

 – All employee feedback through an anonymous 

questionnaire, and subsequent open and honest 
discussion of the results of the survey with all employees 
at a ‘First Thursday’ meeting.

 – Regular Board updates and presentations on all matters 

relating to people and culture. 

 – All employee monthly ‘town-hall’ style meetings and 
‘learning circles’, led by Executive Management to 
encourage open discussion, debate and knowledge 
sharing.

 – All Non-executive Directors’ hosted open lunches with 
a number of employees to offer the beneﬁt of their 
experience, guidance, and key learnings from their 
careers, and to address any questions from the 
attendees.

109  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
LEADERSHIP
CONTINUED

TOPIC

WHAT WE DO

WHAT WE HAVE DONE THIS YEAR

4. Governance, risk and 
internal controls

Good governance, and an 
effective system of risk 
management, is essential in 
allowing the Board to maximise 
the opportunities available to 
the Company, whilst ensuring 
risks are mitigated to the fullest 
extent possible.

5. Stakeholders and 
shareholders

U+I believes in the power of 
partnerships; by working 
effectively with our partners 
we become greater than the 
sum of our parts. The Board 
takes time to consider 
stakeholder and shareholder 
matters, and is committed 
to an ongoing and active 
dialogue with stakeholders 
and shareholders on relevant 
issues.

 – Review of the conclusions of the 2018 internal Board 

evaluation and the implementation of recommendations 
arising from this review. 

 – Approval of the Company’s ﬁrst externally facilitated 

Board evaluation for 2019, for the Board, its Committees, 
and for individual Board Directors. Followed by discussion 
and agreement on improvement opportunities and 
priorities for the coming year. 

 – Ongoing educational programmes for the Board on matters 
including Brexit, corporate governance and information 
security, led by external subject matter experts. 

 – Receipt of regular updates on meetings of the Board’s 
principal committees and discussion around the key 
issues raised.

 – Review of the Company’s risk register and the effectiveness 
of the systems of internal control and risk management. 

 – Ongoing review of Health and Safety reports covering 

all projects.

 – Appointment of a new Corporate Broker – Liberum Capital.
 – Approval of roll-out of eLearning courses for all 

employees on key governance and regulatory matters 
during the year.

 – Discussion on key matters from a regulatory perspective 

including tax. 

 – Review of the Company’s approach to anti-slavery and 

human trafﬁcking, including approval of website statement.

 – Board oversight around the engagement of, and 

relationship-building with, Local Authorities and the 
Government to enable the successful creation of mixed-
use development and regeneration projects, to help effect 
change in local communities. 

 – Investor relations and media reports tabled at each Board 

meeting updating the Board on share performance, 
shareholder movement and media coverage. 

 – Engagement with signiﬁcant shareholders to address 

speciﬁc concerns around Director ‘overboarding’ ahead 
of the 2018 AGM.

 – Regular meetings with investors, and investor site visits 

to discuss any issues or concerns.

 – Institutional investor feedback given by analysts on 
Company performance and investor presentations 
following full and half-year results. 

 – Review of reputation benchmarking exercise to 

understand U+I brand penetration and perception in 
the market. 

 – ‘PPP: The Reset’ campaign relaunch update. 
 – Review of 2018 Notice of Annual General Meeting and 

proxy voting ﬁgures. 

For more information as to how we engaged with our 
stakeholders and shareholders during the year see pages 
127 and 129.

110  |  U and I Group PLC
Annual Report & Accounts 2019

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Board Committees
Supported by its principal 
Committees, the 
Remuneration, Audit and Risk 
and Nomination Committees, 
the Board sets the strategic 
direction of the Group. U+I’s 
Board Committees operate 
within deﬁned terms of 
reference, as determined by 
the Board. Each Committee 
is comprised of independent 
Non-executive Directors 
appointed by the Board. 
Terms of reference are 
available upon request from 
the Company Secretary and 
are also published on the 
Company’s website at 
uandiplc.com. The Company 
Secretary acts as secretary 
to each of the Committees. 
The interaction between the 
Board, its Committees and 
the management of the 
Company is detailed in the 
U+I governance structure on 
page 107. 

Audit and Risk Committee
The Audit and Risk 
Committee monitors the 
effectiveness of the Group’s 
system of internal controls 
and risk management 
framework, the Group’s risk 
appetite, and the integrity of 
the Group’s ﬁnancial 
reporting, whistleblowing and 
regulatory compliance. The 
Audit and Risk Committee 
Report is on pages 121 to 126. 

Nomination Committee
The Nomination Committee 
reviews and considers the 
size, structure and 
composition of the Board 
and its Committees, giving 
due regard to ongoing 
succession planning, and 
makes recommendations to 
the Board. The Nomination 
Committee Report is on 
pages 116 to 119. 

111  |  U and I Group PLC
Annual Report & Accounts 2019

Remuneration Committee
The Remuneration 
Committee reviews all 
aspects of Executive 
Directors’ remuneration, 
reviewing trends across the 
industry and setting executive 
remuneration policies which 
are designed to incentivise 
and retain talent, to support 
the delivery of the Company’s 
long-term strategy. The 
Remuneration Committee 
report is on pages 131 to 148. 

The Board Committees 
enable the Board to operate 
effectively within a strong 
governance framework.

Management Committees 
In addition to the Board 
Committees described on 
this page, internal 
Management Committees 
assist the Executive Directors 
in the day-to-day operations 
of the business. 

U+I implemented a new 
internal governance 
framework in 2017, to align 
our internal governance 
structure to the evolving 
strategic priorities of the 
business. This new structure 
continued to be embedded 
during the year.

The Leadership Team
To assist the Board and 
Executive Directors in the 
day-to-day operational 
management of the business, 
a Leadership Team made up 
of senior departmental 
directors was established. 
The Leadership Team assists 
the Executive Directors 
through the following 
Committees. 

Investment Committee
The Investment Committee 
is made up of the Leadership 
Team, the In-house Legal 
Counsel, and the Head of 
Direct Investment Portfolio, 
it is chaired by the Chief 
Operating Ofﬁcer. The 
Committee meets every two 
weeks, or weekly if required, 
and always the week before 
a U+I Board meeting. 

The Committee has the 
responsibility to track, 
scrutinise, challenge and 
drive progress on current and 
prospective property 
projects and investments, 
including progress against 
strategy and projected 
ﬁnancial targets, and to 
scrutinise U+I’s pipeline in 
light of agreed strategy and 
ﬁnancial targets for 
subsequent years. 

The Committee operates 
within agreed ﬁnancial limits 
set by the Board. There is a 
clear delegation of authority 
from the Board to the 
Investment Committee, 
which is set out in writing 
and approved by the Board. 
Members of the Investment 
Committee are invited to 
present on relevant business 
activities and portfolio 
updates at each formal 
Board Meeting.

Operating Committee
The Operating Committee is 
made up of the majority of 
the Leadership Team and 
chaired by the Chief 
Operating Ofﬁcer. The 
Committee meets every two 
weeks, or weekly if required. 

The Committee addresses 
topics around people, 
processes and operations 
across the whole business, 
and is responsible for 
ensuring the entire business 
is functioning optimally, and 
is set up to deliver against 
agreed strategy. The 
Committee is also 
responsible for driving the 
progress of the ‘Working 
Smarter’ programme and 
other improvement initiatives. 

The Committee operates 
within agreed ﬁnancial limits 
set by the Board, and there 
is a clear delegation of 
authority from the Board to 
the Operating Committee, 
which is set out in writing and 
approved by the Board. The 
Chief Operating Ofﬁcer 
gives updates on matters 
discussed at the Operating 
Committee at each formal 
Board meeting.

Strategy Committee
The Strategy Committee is 
made up of the Leadership 
Team and the In-house Legal 
Counsel. The Committee 
meets twice yearly, or more 
often if required. 

The Committee is 
responsible for reviewing 
U+I’s strategy and 
determining the extent 
to which it enables the 
Company to fulﬁl its purpose 
and values and meet its 
organisational objectives. 
The Committee, chaired by 
the Chief Operating Ofﬁcer, 
reports into the Board.

Risk Management 
Committee
The Risk Management 
Committee is made up of the 
Leadership Team, the Legal 
Counsel and the Company 
Secretary. The Committee 
meets four times a year to 
discuss the risk proﬁle and 
risk tolerance levels within the 
business, and to ensure that 
the necessary risk mitigation 
processes are in place. The 
Committee reports into the 
Audit and Risk Committee. 
Further information can be 
found on page 120.

Disclosure Committee
The Disclosure Committee 
is made up of the Chief 
Executive Ofﬁcer, the Chief 
Financial Ofﬁcer and the 
Company Secretary. The 
Committee meets as and 
when required and has 
responsibility for the 
identiﬁcation and disclosure, 
or where applicable the delay 
in disclosure, of inside 
information, and for 
ensuring that regulatory 
announcements comply with 
applicable legal or regulatory 
requirements. The Committee 
met twice during the period 
under review. 

 
 
 
EFFECTIVENESS

Director independence
Peter Williams was appointed 
as Chairman of the Board 
following the AGM on 14 July 
2016. On appointment, the 
Board considered that Peter 
met the independence 
criteria set out in the Code. 
The Chairman’s biography 
can be found on page 99. 

Sadie Morgan was appointed 
as an independent Non-
executive Director on 3 April 
2019. Further details 
regarding this appointment 
can be found in the 
Nomination Committee 
Report on pages 116 to 119.

The independence of each 
Non-executive Director has 
been assessed during the 
year, in line with the 
independence criteria 
contained within provision 
B.1.1 of the Code. The Board 
considered all the Non-
executive Directors to be 
independent during the year 
with the exception of Barry 
Bennett who, along with 
Richard Upton, was the 
co-founder of Cathedral 
Group. The current ratio of 
Executive and independent 
Non-executive Directors is 
permissible for a smaller 
company under Code 
provision B.1.2.

New Corporate 
Governance Code 
Provision
The new UK Corporate 
Governance Code, 
effective for the Company 
for the year beginning 
1 April 2019, states that 
‘at least half the Board, 
excluding the Chair, 
should be non-executive 
directors whom the board 
considers to be 
independent’. Following 
the appointment of Sadie 
Morgan, effective 3 April 
2019, the Board, excluding 
the Chairman, comprises 
50% independent 
Non-executive Directors 
in accordance with the 
provisions set out in the 
new Corporate 
Governance Code.

112  |  U and I Group PLC
Annual Report & Accounts 2019

Information ﬂow
The Company Secretary 
manages the provision of 
information to the Board, 
within an appropriate 
timeframe, in consultation 
with the Chairman and Chief 
Executive. As discussed on 
page 106, in addition to the 
formal meetings of the Board, 
there may be a requirement 
to hold ad hoc Board 
meetings where the approval 
of certain items cannot wait 
until the following scheduled 
meeting. When this occurs, 
Directors are given as much 
notice as possible, and all 
Directors are encouraged to 
attend these meetings, either 
in person or via telephone. 
The Company Secretary 
ensures that all Directors 
receive timely information 
in relation to the decisions 
that are being taken. The 
Chairman may arrange 
meetings with Non-executive 
Directors without any 
Executive Directors present 
to address any issues facing 
the Company. 

The 2018 Board evaluation 
highlighted a requirement 
for the regular dissemination 
of information to the Board, 
with particular emphasis on 
project updates, outside of 
the normal Board and 
Committee process. To 
address this requirement 
a new process has been 
implemented whereby the 
Chief Executive circulates 
fortnightly updates on all key 
matters to ensure the Board 
is kept informed and engaged 
on major issues outside of 
the formal Board process. 

Induction, training and 
professional development
The Chairman, assisted by 
the Company Secretary, is 
responsible for the formal 
induction of all new Directors. 
On joining the Board, 
a Director receives a 
comprehensive induction 
pack prepared by the 
Company Secretary. This 
pack includes material 
relating to the Director’s 
obligations as a Director of 
the Company, as well as all 
aspects of Board and 

Committee governance. 
Induction meetings are 
arranged with Executive 
Directors, Non-executive 
Directors, and other relevant 
individuals, including all 
members of the Leadership 
Team, for brieﬁngs around 
business strategy, 
performance, ﬁnance and 
Company’s projects. Visits to 
key project sites are arranged. 
At the time of writing this 
report Sadie Morgan was in 
the process of receiving a full 
induction following her 
appointment as a Non-
executive Director on 3 April 
2019. Further information 
regarding this induction can 
be found on page 119. 

All Directors are given the 
opportunity to receive 
ongoing training and 
development whilst in ofﬁce. 
Directors may request this 
as part of their annual 
performance evaluation, 
or through discussion with 
the Chairman or Company 
Secretary. The Chairman 
agrees training and 
development needs with 
each Director, as and when 
required. During the year, 
external experts attended 
Board meetings on the 
invitation of the Chairman 
to give updates on speciﬁc 
matters which had been 
identiﬁed as being of 
particular importance. 

Development activities 
include regular presentations 
on the Company’s projects 
and portfolio, along with 
discussions around market 
and economic trends, share 
price, trading performance 
and governance matters, led 
by Executive Directors and 
members of the Leadership 
Team. 

Professional advice and 
support
All Directors have access to 
the advice and services of 
the Company Secretary, who 
is responsible for advising 
the Board, through the 
Chairman, on corporate 
governance matters. 
Directors are also able 
to seek independent 

professional advice in 
respect of their duties at the 
Company’s expense. 

Time commitment
On appointment, all Directors 
are advised of, and requested 
to make, the necessary time 
commitment required to 
discharge their responsibilities 
effectively. This time 
commitment is also outlined 
in the letters of appointment 
issued to the Chairman and 
Non-executive Directors. 

As part of the annual 
performance evaluation each 
Director is appraised on their 
time commitment dedicated 
to the Company. The Board 
is satisﬁed that all Directors 
have dedicated the required 
amount of time to the 
Company to effectively fulﬁl 
their role. 

At the 2018 AGM the Board 
noted a 20% vote opposing 
the reappointment of the 
Chairman amid concerns 
around ‘overboarding’. This 
matter was addressed with 
signiﬁcant shareholders prior 
to the meeting. In light of this 
vote the Board reviewed the 
Chairman’s commitments, 
and the steps taken to 
address the concerns raised. 
In light of the above concerns 
the Chairman reduced his 
number of listed company 
board appointments during 
the period to 31 March 2019. 

During the 13-month period 
to 31 March 2019 the 
Chairman attended 100% of 
Board and Board Committee 
meetings, held regular 1:1 
meetings with the Chief 
Executive and other Directors 
to discuss relevant matters, 
and attended meetings 
with shareholders as and 
when required. 

The Board acknowledges 
the other commitments the 
Chairman has and, as a 
whole, is content that the 
Chairman’s additional 
appointments do not impact 
on his ability to allocate 
sufﬁcient time to discharge 
his responsibilities to U+I.

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Board evaluation
The Board undertakes an 
annual performance 
evaluation in order to assess 
its own effectiveness. The 
Board strongly believes that 
the process of annually 
evaluating its effectiveness is 
helpful, provides a valuable 
opportunity to address any 
matters arising, and 
facilitates the continuous 
improvement of the Board, its 
Committees, and individual 
Director performance. 

Previous Board, Board 
Committee and individual 
Director performance 
evaluations have been carried 
out through the use of detailed 
questionnaires, prepared 
by the Company Secretary, 
in conjunction with the 
Chairman. Responses have 
been collated and fed back 
to the Board and its 
Committees, following which 
a discussion takes place with 
recommendations made 
and action points taken 
as to improvements to be 
addressed during the following 
year. A review as to how the 
Board and its Committees 
effectively implemented these 
recommendations is tabled 
prior to beginning of the 
subsequent Board evaluation 
process.

During 2019, the Board, 
its Committees and the 
individual Director 
performance evaluations 
were facilitated by an external 
expert. This process is 
described on page 114.

2018 BOARD EVALUATION 

In 2018 the Board 
undertook a formal 
performance evaluation of 
itself and its Committees 
by way of an internal 
questionnaire. As part 
of this process the 
effectiveness of individual 
Directors and their 
commitment to their 
respective roles was 
also reviewed. 

The 2018 Board evaluation 
process identiﬁed no 
major issues with regards 
to the effectiveness of the 
Board’s operations, and 
highlighted that the Board, 
its Committees and 
individual Directors 
continued to operate at 
a high standard, and were 
working effectively, 
following good 
governance practices. 

Matters highlighted as 
a result of this evaluation 
process were discussed 
by the Board, and areas of 
focus for improvement 
were highlighted. Progress 
against these highlighted 
topics is detailed 
opposite.

113  |  U and I Group PLC
Annual Report & Accounts 2019

AREA OF FOCUS

WHAT WE DID

Signiﬁcant organisational 
changes had been made 
to the governance 
structure of the Company 
below Board level during 
the year. These changes 
required effective and 
ongoing embedding and 
monitoring by the Board 
to ensure the business 
continued to operate 
effectively.

Dedicated Board strategy 
days were highlighted as 
the correct forum within 
which to engage in 
in-depth discussions 
around the Company’s 
strategic priorities in light 
of the potential for future 
political and economic 
uncertainty. 

The Company’s 
preparation for managing 
an unexpected event 
should be reviewed along 
with its crisis management 
procedure and processes 
to ensure it was fully 
prepared to manage any 
such event.

During the year the 
composition of the 
Leadership Team was 
refreshed to ensure skills 
and experience were 
appropriately aligned 
to address the future 
requirements of the 
business. The Board was 
fully engaged throughout 
this process.

In addition, discussions 
were held by the Board 
throughout the year, led by 
the Chief Operating Ofﬁcer, 
highlighting internal 
changes being made to the 
business in order to ensure 
the most efﬁcient and 
effective operational 
structure was in place. 
This would continue to be 
monitored by the Board on 
a regular basis. 

During the period to 
31 March 2019 the Board 
held three strategy days. 
These offsite strategic 
forums, attended by the 
Board and the Leadership 
Team, provided the correct 
platform to engage in 
discussions around Board 
strategy and the strategic 
priorities of the Company, 
in light of the political and 
economic environment that 
was developing during the 
period. Further information 
on what was discussed at 
the three strategy days can 
be found on page 101. 

The Risk Management 
Committee reviews all 
identiﬁed risks and risk 
mitigation processes 
reporting into the Audit and 
Risk Committee. During the 
year the Company reviewed 
its IT infrastructure and 
security, its ﬁnancial 
reporting systems, as well 
as the ongoing review of 
management succession 
planning and crisis 
management processes. 

 
 
 
EFFECTIVENESS
CONTINUED

2019 BOARD EVALUATION 

BOARD EVALUATION PROCESS

BOARD EVALUATION RESULTS 

The 2019 Board evaluation was conducted by an external 
independent facilitator, Professor Rob Goffee, Emeritus 
Professor of the London Business School. This was the ﬁrst 
external evaluation undertaken by the Board. The evaluation 
process was divided into the six stages outlined below. 
Professor Goffee has no connection with the Company 
or any of the Board of Directors. 

The Board considered its performance during the year and, 
in conjunction with the output of the Board evaluation, agreed 
it was satisﬁed that individual Directors were demonstrating 
the commitment required to be effective in their roles. The 
Board, along with its Committees, demonstrated the correct 
skills and experience required to enable the discharge of its 
duties effectively on behalf of the Company. 

Stage 1. Preparation
An initial meeting was held between Professor Goffee, 
the Chairman and the CEO to: 
 – Outline the history of the Company and the Board.
 – Establish the key issues facing the Board and its 

Committees. 

 – Agree the Board evaluation process.  

Stage 2. Questionnaires
Questionnaires were circulated to all Directors focusing on: 
 – Board performance.
 – Leadership and culture. 
 – Executive and Non-executive Director performance. 
 – Board Committee performance.
 – Corporate governance.
 – Board information. 

Stage 3. Interviews
During January 2019 Professor Goffee conducted detailed 
interviews with each Board member. The output from the 
earlier questionnaires was used as the basis for these 
interviews to explore in more detail any issues raised, and 
to obtain supplementary comments and observations. 

Stage 4. Reporting
A report containing the output from the Board evaluation 
process and a set of draft conclusions and 
recommendations was compiled by Professor Goffee, which 
was discussed initially with the Chairman and the Company 
Secretary. Professor Goffee then presented his report and 
recommendations to the Board at its meeting in March 2019. 

Stage 5. Outturns
The conclusions and recommendations of the report were 
discussed by the Board, and the areas of focus for the 
forthcoming year, as outlined opposite and on page 115, 
were agreed. 

Stage 6. Feedback
Following a Board discussion on the results of the evaluation, 
the Chairman took each Director through the individual 
feedback on their performance during the year, obtained as 
part of the evaluation process. The Chairman chaired a 
meeting of the Non-executive Directors without Executive 
Directors present where the performance of the Executive 
Directors was reviewed. The Senior Independent Director 
chaired a meeting of the Non-executive Directors without 
the Chairman or Executive Directors present, at which the 
performance of the Chairman was reviewed. Feedback was 
then given to all relevant parties. 

The conclusions drawn from 
the Board evaluation process, 
led by Professor Goffee, 
identiﬁed a number of key 
positive attributes which 
demonstrated that the 
governance structure and 
processes of the Board and 
its Committees were 
working effectively: 
 – The Board was seen as 

effective in its 
performance and adhered 
to a culture of good 
governance practice. 
 – Board discussion was 
open, honest and 
constructive, and the 
Board was supportive 
whilst also providing 
robust challenge to 
management.

 – All Directors contributed 

effectively and 
demonstrated 
commitment to their roles 
in the 13-month period to 
31 March 2019. 
 – The Chairman and 

Non-executive Directors 
had the appropriate mix of 
skills and capabilities and 
brought valuable 
experience and strategic 
insight to Board 
discussions. This would be 
further enhanced with the 
introduction of Professor 
Sadie Morgan as a new 
Non-executive Director 
effective 3 April 2019.
 – The Executive Directors 
worked well as a team, 
and brought contrasting 
but complimentary 
technical, creative and 
entrepreneurial skills to 
the business. 

The Chairman, with the 
assistance of the Chief 
Executive and Company 
Secretary, understands the 
requirement to continually 
evolve as a Board in line with 
changing requirements and 
legislation, and is committed 
to building on the current 
strengths of the Board, 
whilst ensuring any 
perceived or potential areas 
of weakness are addressed 
as and when they may arise. 

The Board discussed the 
ﬁndings and 
recommendations from 
Professor Goffee’s report 
and, whilst conﬁrming that 
the Board was operating 
effectively, there were areas 
identiﬁed which could be 
focused upon to turn a 
‘good’ Board into a ‘great’ 
Board. These areas, along 
with a selection of 
observations from Directors, 
which came directly from the 
Board evaluation process, 
are set out on page 115.

Objectives for the Board
As part of the output from 
the 2019 Board evaluation, 
and in conjunction with 
Professor Goffee, it was 
agreed that Board objectives 
would be discussed, agreed 
and rolled out during the 
year, with the aim of focusing 
attention on certain areas 
highlighted through this 
evaluation process. We will 
address how the Board has 
performed against those 
areas highlighted on page 
115, and the Board 
objectives to be agreed 
during the forthcoming year, 
in the 2020 Annual Report. 

114  |  U and I Group PLC
Annual Report & Accounts 2019

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A selection of Director observations made during the 2019 Board evaluation process, along with areas for Board focus for the 
year ending 31 March 2020 highlighted through this process, are outlined below:

Board administration 
and information

Strategy

Succession planning

EFFECTIVE PROCESSES 
DEMONSTRATED

ONGOING ATTENTION 
REQUIRED

“THE AGENDAS FOR BOARD 
MEETINGS ARE GENERALLY 
WELL MANAGED AND THE 
STRATEGY SESSIONS ARE 
VERY HELPFUL”

“NOW THAT WE HAVE A 
BI-WEEKLY UPDATE FROM 
THE CEO I FEEL MORE 
INCLUDED IN BETWEEN 
MEETINGS”

“THE SIX-MONTHLY 
STRATEGY DAYS ARE VERY 
USEFUL AND HELP TO KEEP 
US FOCUSED ON OUR 
OBJECTIVES”

“THE COMPANY IS 
IMPLEMENTING A 
NEW MANAGEMENT 
INFORMATION SYSTEM 
WHICH WILL IMPROVE 
INFORMATION COMING 
TO THE BOARD AND 
PRESENT IT IN A MORE 
MEANINGFUL WAY”

“SOMETIMES WE STRUGGLE 
BETWEEN STRATEGIC AND 
OPERATIONAL ISSUES”

“THE STRATEGY SESSIONS 
INCLUDE ALL OF THE 
SENIOR LEADERSHIP 
TEAM BELOW BOARD LEVEL. 
IN ADDITION, LEADERSHIP 
TEAM MEMBERS PRESENT 
THEIR OWN PROJECTS TO 
THE BOARD. THIS HAS 
WORKED VERY WELL”

“NEED TO CONSTANTLY 
REVIEW THE BOARD’S 
EXPERIENCE TO MAKE 
SURE IT IS RELEVANT FOR 
THE CHALLENGES THE 
BUSINESS FACES”

Governance and 
Director induction

“I STRONGLY BELIEVE 
THAT OUR CORPORATE 
GOVERNANCE IS GOOD. 
OUR COMPANY SECRETARY 
AND AUDITORS ARE VERY 
PROACTIVE IN ENSURING 
WE STAY ABREAST OF ALL 
THE ISSUES TO DO WITH 
GOVERNANCE”

“OUR BUSINESS MODEL 
AND THE NUMBER OF 
SCHEMES WE HAVE MEANS 
THERE IS AN AWFUL LOT 
TO GET TO GRIPS WITH 
WHEN YOU ARE NEW TO 
THE COMPANY”

AREAS OF BOARD FOCUS 
FOR THE YEAR ENDING 
31 MARCH 2020

Ongoing regular 
dissemination of 
information to the Board 
outside of the formal 
Board and Board 
Committee process, and 
continued review and 
improvement of Board 
information to ensure 
Directors are receiving the 
appropriate level of detail.

Continued evolution of 
separate strategic Board 
sessions to ensure a 
high-level, long-term 
strategic focus, whilst 
maintaining an appropriate 
overview of short-term 
operational priorities.

Continued focus on 
Executive and Non-
executive Director 
succession planning. 
Ensuring the ongoing 
visibility and engagement 
of talent below Board level 
through the regular 
presence of Leadership 
Team members at Board 
meetings, and ongoing 
Non-executive Director 
interaction with the wider 
workforce.

Development of improved 
Non-executive Director 
induction process, and 
ongoing Board education 
and development through 
focused updates and 
presentations on relevant 
matters by subject matter 
experts, and ongoing 
exposure to signiﬁcant 
projects.

115  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOMINATION 
COMMITTEE REPORT

“
THE NEED TO CONTINUALLY REFRESH 
AND ADAPT THE SKILLS AND EXPERIENCE 
WE HAVE BOTH AS A BOARD AND AS 
A COMPANY IS ESSENTIAL AS OUR 
BUSINESS EVOLVES AND GROWS. 
WE CONTINUE OUR FOCUS TOWARDS 
BUILDING A TEAM WITH THE RIGHT 
MIX OF SKILLS AND EXPERIENCE TO 
EFFECTIVELY IMPLEMENT OUR 
STRATEGIC VISION.
”

Peter Williams
Chairman of the Nomination Committee

Highlights of Committee activities during the 13-month 
period to 31 March 2019: 
 – The appointment of Professor Sadie Morgan as a new 

independent Non-executive Director.

 – A review of succession planning on the Board and 

at a senior level throughout the business.

 – A review of the structure, size and composition of 

the Board.

 – Discussions around aspects of diversity at all levels 
within the Company, and the property development 
industry in general.

 – A review of Director performance and the 

recommendation to the Board for the re-election of all 
Directors at the 2019 AGM.

 – A review of the new Corporate Governance Code 

requirements and its implementation within the business.

 – Discussion around the results of Board and 

Committee evaluation process undertaken during 
the year, including a Board skills matrix and the 
implementation of Board objectives.

116  |  U and I Group PLC
Annual Report & Accounts 2019

COMMITTEE ATTENDANCE

Director
Peter Williams
Nick Thomlinson
Lynn Krige
Ros Kerslake
Sadie Morgan*

Number of 
meetings 
attended/
meetings 
possible
3/3
3/3
3/3
3/3
–

% 
attendance 
100
100
100
100
–

Joined the 
Committee
04.01.16
03.01.12
14.07.16
01.09.17
03.04.19

*  Sadie Morgan joined the Company on 3 April 2019 and therefore did not 
attend any meetings of the Committee in the period to 31 March 2019.

For full biographies see pages 99 to 101.

Nomination Committee 
composition
The Nomination Committee is 
comprised of the Chairman 
and the independent Non- 
executive Directors. The Board 
considers that each member of 
the Committee is independent 
within the deﬁnition set out in 
the UK Governance Code. 
The table above sets out the 
attendance of members at 
the scheduled Committee 
meetings during the ﬁnancial 
period under review.

Role of the Nomination 
Committee
The Committee is 
responsible for making 
recommendations to the 
Board, within its agreed 
terms of reference, on 
appointments to the Board. 
Our procedure for the 
appointment of a new 
Director is fulﬁlled through 
an effective search, interview 
and evaluation process led 
by an external consultant 
based upon speciﬁc criteria 
set out by the Committee. 

The Committee’s role, as set 
out in its terms of reference, 
includes:
 – Reviewing the structure, 

size and composition of the 
Board as a whole;

 – Succession planning for 
Executive Directors and 
Non-executive Directors, 
and the roles of the 
Chairman and Chief 
Executive;

 – Consideration of the 
balance of skills, 
knowledge, experience, 
time commitment and 
diversity of the Board;

 – Recommending suitable 
candidates for the role 
of Senior Independent 
Director;

 – Devising descriptions of 
the role and capabilities 
required for a particular 
appointment; and

 – Providing recommendations 
on the composition of both 
the Audit and Risk and 
Remuneration Committees, 
in consultation with the 
Chairmen of those 
Committees.

Activities undertaken by 
the Committee during the 
period under review
The Committee meets as 
and when necessary. The 
Committee met three times 
during the 13-month period 
to 31 March 2019. During 
this period the Committee 
addressed the following 
matters:
 – Recommendation made 

to the Board for the 
appointment of Professor 
Sadie Morgan as a new 
independent Non-
executive Director;

 – Review of the structure, 

size and composition of the 
Board and its Committees;

 – Succession planning for 

Executive and Non-
executive Directors and the 
Senior Leadership Team;

 – Discussions around 

changes under the new 
Governance Code;

 – Diversity on the Board and 
throughout the Company;
 – Recommendation for the 

reappointment of all 
Directors at the 2019 AGM; 

 – Review of outcomes from 
the 2019 Board evaluation.

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Nomination Committee 
– allocation of time

1.

5.

2.

4.

3.

1. Board composition and 
  structure: 20%
2. New Non-executive 
  Director appointment: 40%
3. Board succession 
  planning: 20%
4. Diversity: 10%
5. Other: 10%

117  |  U and I Group PLC
Annual Report & Accounts 2019

NEW NON-EXECUTIVE DIRECTOR APPOINTMENT 

U+I was pleased to 
welcome Professor Sadie 
Morgan to the Board as 
a new independent Non-
executive Director with 
effect from 3 April 2019. 
The process employed by 
the Committee in relation to 
the appointment of Sadie, 
as set out below, differed 
to that used for previous 
Non-executive Director 
appointments due to the 
speciﬁc requirements 
identiﬁed with regards to 
this position. In addition 
to the normal Board and 
Committee responsibilities 
of a Non-executive Director 
this role included three 
further speciﬁc components:

1. PPP Community 
Challenge Panel Chairman:
In 2018, as part of our ‘PPP: 
The Reset’ campaign, U+I 
committed to the 
establishment of a new panel, 
chaired by an independent 
Non-executive Director, 
which would bring together 
representatives from the 
public sector, civic society 
and other developers with the 
speciﬁc remit of ensuring the 
Company was abiding by the 
standards it set itself on all 
relevant PPP projects.

2. Employee Engagement 
Panel Chairman:
To comply with the 
requirements under the new 
Corporate Governance Code 

Non-Executive Director Recruitment Process

Identiﬁcation of requirement
Following on from the 2018 Board evaluation, the Committee 
engaged in discussions around the balance of skills, 
experience, independence and knowledge on the Board. 
This discussion made speciﬁc reference to commitments the 
Company would make during the forthcoming year. It was 
agreed that an additional Non-executive Director would be 
required, with a speciﬁc set of skills and experience, to assist 
in overseeing the implementation of these commitments.

Preparation of role speciﬁcation
The Committee prepared a detailed role speciﬁcation setting 
out the skills, knowledge and experience required for the 
role. A candidate with the speciﬁc skills and experience to 
fulﬁl the additional requirements outlined on this page was 
identiﬁed by the Committee.

Engagement of independent consultant
An independent recruitment consultant was engaged to 
approach, interview and assess the proposed candidate 
against the speciﬁc role requirements and their ﬁt with U+I 
values, and subsequently make a recommendation as to the 
suitability of the identiﬁed candidate to the Committee.

Interviews
The proposed candidate had interviews with the Chairman 
and Chief Executive, followed by each Board Director to 
establish their suitability against the speciﬁc role requirements; 
of equal importance was their ‘values’ and their ‘ﬁt’ as a 
Non-executive Director of U+I. 

Recruitment 
The Committee considered the consultant’s feedback, and 
feedback from interviews, and made a recommendation for 
appointment to the Board, which was approved. A formal offer 
was made and accepted, and Professor Sadie Morgan was 
appointed as a new Non-executive Director on 3 April 2019. 

the Company will be 
enhancing its employee 
engagement strategy with 
the introduction of an 
Workforce Engagement 
Panel. This panel will include 
employees from all levels 
of the business and will 
report directly to the Board. 

3. Design Panel:
A new Design Panel is to be 
introduced during the year 
to ensure that architect 
selection for U+I projects 
reﬂects best in class 
designers. It will be the 
responsibility of this panel to 
navigate the tension between 
great design architects and 
architects who specialise in 
more functional projects. 
The new Non-executive 
Director will assist in the 
formation of this panel.

A candidate matching the 
speciﬁc skillset required 
was identiﬁed, and an 
independent external 
search consultant was used 
to assess this candidate 
against: i) the speciﬁc role 
requirements; and ii) the 
candidate’s values, culture 
and ﬁt as a potential U+I 
Director. Following an 
in-depth interview between 
the independent search 
consultant and the 
candidate, a report was 
drafted setting out 
recommendations to the 
Committee on the suitability 
of the candidate to this role. 

All Committee members 
interviewed the proposed 
candidate to conﬁrm that 
their skills and experience ﬁt 
the requirements of the role, 
and that their values reﬂected 
those of the Board and the 
Company. The Committee 
subsequently recommended 
this appointment to the 
Board. All Directors met 
with the proposed 
candidate to assess their 
suitability to the role and 
ﬁt within the U+I Board. 
The Board subsequently 
discussed and approved 
the proposed appointment. 

 
 
 
 
 
NOMINATION COMMITTEE REPORT
CONTINUED

It was conﬁrmed that the 
additional requirements of this 
role, as set out on page 117, 
would in no way compromise 
the independence of the 
position of Non-executive 
Director. 

Ridgeway Partners, an 
external search consultant, 
was used during the 
recruitment process to 
provide independent, expert 
advice. Ridgeway Partners 
is accredited under the 
enhanced code of conduct 
for executive search ﬁrms, 
it is also accredited under the 
Women on Boards code, and 
one of only three ﬁrms to 
have both the FTSE 350 and 
smaller company kitemarks; 
Ridgeway Partners has no 
other connection with the 
Company. 

New Director induction
The Chairman, assisted by 
the Company Secretary, is 
responsible for the formal 
induction of all new Directors. 
Sadie Morgan, who joined 
the Board on 3 April 2019, 
is in the process of receiving 
a full induction, which will 
include a comprehensive 
induction pack prepared by 
the Company Secretary, 
induction meetings with key 
Directors and Leadership 
Team members, and also 
visits to project sites. Further 
details of Sadie Morgan’s 
induction process can be 
found on page 119. 

Directors standing for 
election or re-election
At the Nomination Committee 
meeting in March 2019 the 
Committee discussed the 
re-election of all Directors at 
the forthcoming 2019 AGM. 
Following a thorough review, 
in conjunction with the 2019 
Board evaluation carried out 
by Professor Rob Goffee, 
an independent expert (as 
outlined on page 114), the 
Committee recommended 
that each Director, being 
eligible, should be put 
forward for annual re-election 
by shareholders. Following 
the annual performance 
reviews of individual 
Directors, the Chairman 

118  |  U and I Group PLC
Annual Report & Accounts 2019

Tenure on the Board as at 
21 May 2019

1.

2.

3.

1. Under 3 years: 22% 2
2. 3–6 years: 45 % 4
3. 6+ years: 33% 3

Board Diversity

1.

2.

1. Male: 67% 6
2. Female: 33% 3

considers that each Director 
continues to operate as an 
effective member of the Board, 
and has the skills, knowledge, 
experience and time to enable 
them to discharge their duties 
effectively. 

Upon election, or re-election, 
Non-executive Directors are 
invited to serve for three-year 
ﬁxed terms, subject to annual 
re-election by shareholders. 
All Non-executive Directors 
have conﬁrmed that they 
have sufﬁcient time to 
dedicate to their role. The 
terms of their appointment 
are available from the 
Company Secretary. 

On the advice of the 
Committee, the Board will 
recommend the re-election of 
each Director to shareholders 
at the 2019 AGM, in line with 
provision B.7.1 of the Code. 
The Company believes that 
sufﬁcient biographical 
details, along with other 
relevant information, for the 
Directors seeking annual 
re-election is provided on 
pages 99 to 101, in order for 
shareholders to make an 
informed decision regarding 
each Director’s re-election.

Composition of the Board
The Committee has reviewed 
the size, structure and 
composition of the Board and 
concluded that, with the 
addition of Professor Sadie 
Morgan as an independent 
Non-executive Director on 
3 April 2019, it has the 
appropriate composition to 
run as an effective Board. 
Further detail regarding the 
composition of the Board 
can be found on page 104.

Diversity
As part of its role the 
Committee will review the 
diversity on the Board. U+I 
embraces diversity in its 
broadest sense and 
recognises the beneﬁts and 
value this brings both to the 
Board and to the Company 
as a whole, in terms of skills, 
knowledge and experience. 
The Company has a diversity 
and equal opportunities 
policy which prohibits any 

form of discrimination. 
During the year all employees 
undertook a mandatory 
online eLearning course on 
diversity and equality. The 
addition of Sadie Morgan to 
the Board has meant that 
there is currently one-third 
female representation on the 
Board. Details of the gender 
diversity on the Board, senior 
management, and across the 
Company are set out in the 
Sustainability Report on page 
80. The Committee recognises 
that diversity is more than 
just gender based and will 
continue to focus on 
addressing the issues around 
diversity in its wider context 
within the property industry. 

Committee effectiveness
I am pleased to report that 
the recent Board evaluation 
process concluded that the 
Nomination Committee 
operated effectively and there 
were no areas of signiﬁcant 
concern during the year. 

Areas of focus for 2019
During 2019 the Committee 
will continue to focus on 
developing its approach to 
succession planning for the 
Board, its Committees and 
the wider management team, 
whilst ensuring that the skills 
and experience on the Board 
and through the wider 
workforce are those required 
to effectively implement the 
strategy of the Company. The 
Committee will also consider 
issues around diversity and 
the new Governance Code 
requirements and will 
consider how effectively 
these are being addressed 
by the business. 

Peter Williams, 
Chairman of the 
Nomination 
Committee
21 May 2019

 
 
 
 
 
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“
U+I IS COMMITTED 
TO ENSURING 
THAT NEW 
NON-EXECUTIVE 
DIRECTORS 
ARE GIVEN A 
COMPREHENSIVE, 
AS WELL AS 
A BESPOKE 
INDUCTION INTO 
THE COMPANY TO 
ENABLE A SMOOTH 
INTEGRATION INTO 
THEIR ROLES ON 
THE BOARD.
”

Peter Williams
Chairman of the Nomination 
Committee

INDUCTION OF PROFESSOR SADIE MORGAN AS AN INDEPENDENT NON-EXECUTIVE DIRECTOR

business, it’s projects, and 
the strategy and culture of 
the Company. Sadie has 
also met with a senior 
member of the ﬁnance team 
to understand the ﬁnancial 
reporting requirements of 
the business. The Company 
Secretary prepared an 
extensive brieﬁng pack with 
key information about the 
Company, the duties 
expected of a Director, 
governance structures and 
relevant procedures and 
processes, and led Sadie 
through this information 
answering any queries raised. 

As part of this process 
Sadie will be introduced 
to several of U+I’s major 
projects with visits to 
8 Albert Embankment, 
Landmark Court, Morden 
Wharf and Mayﬁeld planned 
in the near future to provide 
ﬁrst-hand experience of 
how the Company operates, 
and how it is fulﬁlling its 
obligations to stakeholders.

Sadie will receive ongoing 
education and support in 
her role as a Non-executive 
Director along with the rest 
of the Directors on the Board.

U+I recognises that new 
Directors joining the Board 
will come from a variety of 
backgrounds, and have 
varying skills and experience 
that complement those of the 
Directors already established 
on the Board. Taking this into 
account we believe there 
should be no rigid induction 
process for new Directors. 
Our induction process is 
tailored according to the 
speciﬁc requirements of 
each individual Director. 

The Chairman, through 
the Company Secretary, 
ensures that all new Directors 
undergo a comprehensive 
induction programme, with 
the required support to 
enable them to understand 
the requirements of their 
new role. Notably, this 
process will assist in their 
understanding of the history 
of U+I, the culture and 
strategy of the business, 
key projects, the ﬁnancial 
position of the Company, 
and any key issues being 
addressed by the Board and 
its Committees at that time. 

Sadie Morgan was appointed 
to the Board as an 
independent Non-executive 
Director on 3 April 2019. At 
the time of writing this report 
Sadie’s induction process 
was ongoing. As part of 
this process Sadie has had 
meetings with the key senior 
personnel within the 
Leadership Team to give her 
a full understanding of U+I’s 

119  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
a risk evaluation on each 
signiﬁcant prospective 
development, investment or 
joint venture opportunity is 
evaluated by the Board. The 
Executive Directors regularly 
evaluate the Group’s 
risk-weighted development 
exposure, which is then 
considered by the Board. 
All necessary actions have 
been, or are being, taken 
to remedy any perceived 
weaknesses acknowledged 
from the quarterly reviews. 
No signiﬁcant failings or 
weaknesses were identiﬁed 
over the 13-month period 
under review.

ACCOUNTABILITY

Risk management and 
internal control
The Board has overall 
responsibility for the Group’s 
risk management and internal 
control systems, and 
monitors these on an ongoing 
basis. The risk management 
and internal control systems 
put in place are designed to 
identify, evaluate and mitigate 
risks while at the same time 
enabling business objectives 
to be achieved. Further 
information on the 
Company’s internal control 
framework is set out in the 
Audit and Risk Committee 
Report on pages 121 to 126.

Risk Management 
Committee
The regular process of 
identifying, evaluating and 
managing signiﬁcant 
corporate risks has been 
delegated by the Board to the 
Audit and Risk Committee 
which, in turn, has delegated 
responsibility for overseeing 
the day-to-day risk 
management of the Company 
to the Risk Management 
Committee. The Committee 
is an Executive Committee 
and comprises the Leadership 
Team, the In-house Legal 
Counsel, and the Company 
Secretary.

The Committee’s principal 
role, as set out in its terms of 
reference, includes:
 – Advising the Audit and Risk 

Committee on the 
Company’s risk appetite, 
tolerance and strategy, 
taking into account the 
current and prospective 
macro-economic and 
ﬁnancial environment;

 – Reviewing the Company’s 
risk register, including the 
identiﬁcation of new risks, 
continuous assessment, 
and identiﬁcation of early 
warning factors and 
mitigating actions and 
controls;

 – Reviewing the 

effectiveness of the 
Company’s internal 
ﬁnancial controls, internal 
controls and risk 
management systems; and
 – Reviewing the Company’s 
procedures for detecting 
fraud and prevention 
of bribery.

Annual activities of the Risk 
Management Committee
The Committee meets 
quarterly during the year, 
prior to each meeting of the 
Audit and Risk Committee, to 
ensure that the Group’s risk 
management procedures 
are comprehensive and 
appropriate for the current 
economic climate, regulatory 
requirements and business 
operations.

During the year, the 
Committee performed a full 
review of all the risks facing 
the Company as set out on 
the risk register. The signiﬁcant 
risks facing the Company 
have been identiﬁed and are 
set out on pages 82 to 85.

At each meeting the 
Committee reviews those 
risks with the highest impact 
and highest likelihood of 
occurrence, and the actions 
in place to ensure mitigation 
of the risks to the fullest 
extent possible. Those risks 
with less impact or likelihood 
of occurring are reviewed on 
a six-monthly basis. The 
Committee’s remit includes 
all of the Group’s subsidiaries 
and those joint ventures 
and associates which are 
administered by the 
Company. Risks arising from 
externally managed joint 
ventures are managed at the 
Boards of the joint venture 
companies. The Committee 
reports into the Audit and 
Risk Committee. In addition 
to the activities of the Risk 
Management Committee, 

120  |  U and I Group PLC
Annual Report & Accounts 2019

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AUDIT AND RISK 
COMMITTEE REPORT

“
THE COMMITTEE CONTINUES ITS FOCUS 
ON THE MANAGEMENT AND MITIGATION 
OF RISK, THE INTEGRITY OF FINANCIAL 
REPORTING AND THE INTERNAL CONTROL 
AND ASSURANCE PROCESSES.
”

Lynn Krige
Chairman of the Audit and Risk Committee

Highlights of Committee activities during the 13-month 
period to 31 March 2019: 
 – The change of year-end for U and I Group PLC and all 

subsidiary companies within the Group from 28 February 
to 31 March 2019.

 – The review and approval of the half-year and the 13-month 

ﬁnancial statements for the period to 31 March 2019.
 – An in-depth assessment of the effectiveness of internal 

controls and control processes.

 – Overview of the roll-out of a new ﬁnance reporting 

system across the business.

 – Review of key risks and risk mitigation through the Risk 

Management Committee.

 – Annual review of internal audit requirements.
 – Oversight of GDPR compliance processes 

and procedures.

 – Review of U+I’s approach to the Modern Slavery Act, 

and approval of the modern slavery statement.

 – Review of ﬁnance policies and procedures.
 – Oversight of the roll-out of a suite of eLearning courses 

for all employees during the period.

 – Review of new governance code requirements and 

legislative developments.

121  |  U and I Group PLC
Annual Report & Accounts 2019

Dear Shareholder,
As Chairman of the Audit 
and Risk Committee (the 
Committee), I am pleased to 
present the report of the 
Committee for the ﬁnancial 
period ended 31 March 2019.

Over the following pages of 
this report we aim to share 
insights into the activities 
undertaken or overseen by 
the Committee during the 
13-month period to 31 March 
2019. There were no 
signiﬁcant changes to the 
Committee’s primary 
functions during the period. 
The Committee focused the 
majority of its time overseeing 
the Company’s ﬁnancial 
reporting processes, along 
with the assurance, internal 
control and risk management 
frameworks of the Company. 
Highlights of the Committee’s 
work during the year include:

Change of year-end 
During the period the 
Company changed its 
year-end from 28 February 
to 31 March 2019. The 
change was made in order 
to align the Company with 
stakeholders, its peer group, 
and industry practice. 

IT and cyber security 
The Committee monitored 
the roll-out of a new ﬁnancial 
reporting system during the 
period to streamline and 
enhance reporting processes 
across the business. In 
addition, cyber security 
continued to be an area of 
signiﬁcant focus for the 
Committee during the period, 
for further details see page 123.

GDPR
The Committee established 
a working group to ensure the 
Company’s processes and 
procedures were GDPR 
compliant ahead of the May 
2018 deadline. During the year 
work continued around the 
wider aspects of information 
security and data protection, 
and, with assistance from 
external expertise, this work 
will continue through 2019 to 
ensure the Company has 
robust policies, procedures 
and the necessary culture in 

place with respect to 
information management 
and security.

Financial reporting process
The Committee spent a 
signiﬁcant proportion of its 
time ensuring the integrity of 
its published ﬁnancial 
information and processes, 
and reviewing signiﬁcant 
ﬁnancial reporting 
judgements. This included 
providing advice to the Board 
on the appropriateness of the 
Going Concern and Viability 
Statements. In this report we 
explain what judgements the 
Committee considered to be 
signiﬁcant. See page 124 for 
further information.

Risk management
U+I’s risk proﬁle and appetite 
continued to evolve during the 
period, taking into account 
the ongoing uncertainty of 
the political and economic 
climate. The Risk Management 
Committee reviews U+I’s risk 
register at each meeting, 
reporting into the Committee. 
This forms the basis of the 
Committee’s risk assessment 
and subsequent mitigation. 
Information on the principal 
risks of the Company can be 
found on pages 82 to 85.

Internal controls
The Committee monitors the 
adequacy and effectiveness 
of the Group’s internal control 
processes. During the year 
one meeting is dedicated to 
reviewing the internal control 
processes, see pages 125 
and 126 for further information.

Internal audit
The Committee reviewed the 
Company’s requirements 
with respect to internal audit 
during the year. It concluded 
that, in line with its peer 
group, a dedicated internal 
audit function was not 
required. Further information 
can be found on page 126.

Modern slavery
During the year the Committee 
reviewed the Company’s 
approach to modern slavery 
and made recommendations to 
the Board. For more information 
see page 126.

 
 
 
AUDIT AND RISK COMMITTEE REPORT
CONTINUED

Fair, balanced and 
understandable
The Committee, at the Board’s 
request, reviewed the Annual 
Report and Accounts and 
conﬁrmed that these were fair, 
balanced and understandable. 
More information on this can 
be found on page 125. 

Committee evaluation
As part of the 2019 Board and 
Committee annual evaluation 
process the role and 
effectiveness of the Audit 
and Risk Committee was 
considered. I am pleased 
to report that the feedback 
received relating to the 
Committee was positive. 
The Committee continued to 
operate to a high standard and 
was effective in its support to 
the Board during the period.

New Corporate 
Governance Code 
provision: 
The new UK Corporate 
Governance Code states 
that ‘The board should 
establish an audit 
committee of independent 
directors, with a minimum 
membership of three 
directors, or in the case of 
smaller companies, two. 
The chair of the Board 
should not be a member’. 
In accordance with this new 
requirement Peter Williams, 
the Chairman of the Board, 
voluntarily stepped down 
as a member of the Audit 
and Risk Committee with 
effect from 29 March 2019. 

Further information on these 
and other key areas 
considered by the Committee 
during the 13-month period 
to 31 March 2019 can be 
found within this report.

Lynn Krige, 
Chairman of the Audit 
and Risk Committee
21 May 2019

122  |  U and I Group PLC
Annual Report & Accounts 2019

COMMITTEE ATTENDANCE

Director
Lynn Krige
Nick Thomlinson
Peter Williams*
Ros Kerslake

Number of 
meetings 
attended/
meetings 
possible
4/4
4/4
4/4
4/4

% 
attendance 
 100
100
100
100

Joined the 
Committee
10.03.16
03.01.12
04.01.16
01.09.17

*  In accordance with the requirements of the new Corporate Governance Code 
Peter Williams stepped down from the Committee with effect 29 March 2019.

Full biographies of the Committee members can be found on 
page 100.

Audit and Risk Committee 
composition
The table above sets out the 
composition of the Committee 
and the attendance of 
members at the scheduled 
Committee meetings during 
the 13-month period under 
review. The Committee 
currently consists of three 
independent Non-executive 
Directors following Peter 
Williams stepping down from 
the Committee on 29 March 
2019. 

Role of the Audit and Risk 
Committee
The Committee plays a 
crucial role in assisting the 
Board to discharge its 
responsibilities for the 
management of business risk 
by monitoring, reviewing and 
challenging the effectiveness 
and integrity of the Group’s 
ﬁnancial reporting and audit 
process, and the development 
and maintenance of a robust 
system of risk management 
and internal control. 

The Board has determined that 
Lynn Krige is a qualiﬁed 
accountant with considerable 
experience, and has signiﬁcant 
recent and relevant ﬁnancial 
experience for the purposes of 
the Code. In addition, Nick 
Thomlinson and Ros Kerslake 
have signiﬁcant property sector 
experience. The Company’s 
Chief Executive Ofﬁcer, Chief 
Development Ofﬁcer, Chief 
Financial Ofﬁcer, Financial 
Controller and In-house Legal 
Counsel attend the Committee 
meetings by invitation, as 
do Peter Williams and Barry 
Bennett, who are also 

chartered accountants. 
To help the Committee 
review and challenge the 
integrity of the Company’s 
ﬁnancial reporting, 
representatives from the 
external auditors attend 
appropriate parts of the 
meetings on invitation from 
the Chairman. 

The Committee’s principal 
responsibilities during the 
period under review fall under 
the following categories:

Financial reporting
 – Review of signiﬁcant 
ﬁnancial reporting 
judgements and 
accounting policies, and 
compliance with 
accounting standards.

 – Ensuring the quality, 
appropriateness and 
integrity of the half year 
and full year ﬁnancial 
statements and their 
compliance with statutory 
requirements.

 – Ensuring that the Annual 

Report is fair, balanced and 
understandable, along with 
consideration of the 
underlying assumptions 
presented in support of 
the Going Concern and 
Viability Statements and 
recommending their 
approval to the Board.

Risk management
 – On behalf of the Board, and 
in conjunction with the Risk 
Management Committee, 
establishing the risk 
appetite of the Company, 
along with a review of the 
risk register and risk 
mitigation procedures. 

Internal controls
 – Monitoring the 

effectiveness of the 
Company’s internal controls 
and compliance process.

 – Review of delegated 

authorities and sign-off 
procedures.

 – Review of key internal 

control policies. 

Fraud and whistleblowing
 – Review of procedures in 

place to prevent fraudulent 
behaviour and enable 
whistleblowing.

 – If required, receive reports 
on fraudulent incidents and 
ensure an appropriate 
investigation is undertaken 
where required.

External audit
 – Monitoring and reviewing 
the independence and 
performance of the 
external auditors and 
evaluating their 
effectiveness.

 – Making recommendations 
for the appointment and 
re-appointment of the 
external auditors and 
approval of audit fees.

Internal audit
 – Monitoring the requirement 

for an internal audit 
function and making 
subsequent Board 
recommendations.

 – Agreeing internal audit 
plans where necessary.

External and internal property 
valuation
 – Assessing the quality and 

appropriateness of the half 
year and full year external 
and internal valuations of 
the Group’s property 
portfolio, together with 
an assessment of the 
methodology applied.

Signiﬁcant ﬁnancial matters
 – During the year the 

Committee considered 
the appropriateness of 
signiﬁcant ﬁnancial matters 
made in connection with 
the ﬁnancial statements as 
set out on page 124.

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Committee activities during 
the 13-month period to 
31 March 2019
The Committee met four times 
during the period ended 
31 March 2019. Committee 
meetings are timed to coincide 
with the key responsibilities of 
the Committee during the year. 
As is standard each year, two 
of the meetings take place 
prior to the issue of the 
preliminary full-year and interim 
results, to review audit 
recommendations and to 
consider any signiﬁcant 
issues arising from the audit 
and review process. A further 
meeting is held to agree the 
external audit terms of 
engagement, the auditors’ 
scope and proposed 
approach, and the fees of the 
annual audit. One Committee 
meeting during the year is 
dedicated to reviewing the 
internal controls of the 
Company. The Committee 
also reviews the performance 
of the external auditors. 

The Committee reviewed the 
following items during the 
period and, where required, 
made recommendations to 
the Board:

 – April 2018: Year-end 

ﬁnancial statements and 
Annual Report, Viability and 
Going Concern Statements, 
risk appetite and review of 
key risks, signiﬁcant project 
risks, signiﬁcant areas of 
judgement, external 
auditors’ report, external 
property valuations, GDPR 
update, cyber-security 
update, non-audit fees, 
evaluation of U+I 
management’s and 
external auditors’ 
effectiveness with regard 
to the audit process, and 
recommended the re-
appointment of the external 
auditors to the Board. 

 – October 2018: External 
auditors’ interim report, 
interim results and ﬁnancial 
statements, internal and 
external portfolio valuations, 
signiﬁcant issues and areas 
of judgement, risk 
management, review of 
changes to tax legislation.

123  |  U and I Group PLC
Annual Report & Accounts 2019

 – December 2018: Learning 
and development session 
with presentations on key 
Brexit developments and 
new corporate governance 
requirements by external 
experts, review of interim 
accounts process and 
lessons learnt, update on 
new ﬁnance system 
roll-out, 2019 external audit 
planning, risk management 
appetite and review of key 
risks, and review of 
non-audit fees.

 – January 2019: Full review 
of internal controls and 
control processes, risk 
assessment review 
including deep dive into 
speciﬁc key risks, 
whistleblowing policy 
review, review of 
requirement for internal 
audit, review of delegated 
authorities and a review of 
audit fees.

New ﬁnancial reporting 
system
During the year, the 
Committee approved a 
proposal by the Chief 
Financial Ofﬁcer to undertake 
a review of the ﬁnance 
system, processes and 
business reporting to 
determine and resolve any 
gaps in functionality and 
internal controls. Whilst the 
review was positive around 
the controls environment, it 
highlighted a need to improve 
process automation and 
reporting. 

The current system was 
reviewed alongside other 
market leaders, and the 
Committee approved a 
recommendation to 
implement a new ‘Tier 1’ 
solution. The implementation 
project commenced in 
August 2018, and the roll-out 
is currently underway. The 
project’s objectives are to 
implement tighter ﬁnancial 
controls across areas of the 
business such as 
procurement, reporting, tax 
and cash collection, and is 
taking a two-phase 
approach. Phase I is 
providing as minimum 
like-for-like functionality, 

controls and reporting, whilst 
adding new functionality 
such as a procurement 
system. Phase II will deliver 
improvements in processes 
and reporting to facilitate 
greater controls and 
improvements in management 
information and the use of 
data around the business. 

GDPR 
With GDPR taking effect from 
May 2018, the Committee 
provided oversight over the 
Company’s approach to data 
protection matters in 
anticipation of this deadline. 
A GDPR project team was 
established reporting into the 
Risk Management Committee. 
This team was supported by 
an independent data 
protection expert. As part 
of the preparation for the 
implementation of GDPR all 
employees were required to 
undergo speciﬁc online 
GDPR training, more in-depth 
training was focused on 
speciﬁc areas of the 
business. In addition to this 
training, data protection 
policies and processes were 
reviewed and updated. 

Subsequent to the 
implementation of GDPR, 
a working group continues 
to monitor and review wider 
aspects around GDPR and 
information management 
security to minimise the 
ongoing risks associated 
with this area. 

Cyber security
Cyber security, and the 
potential threat of business 
disruption through cyber 
security issues, continued to 
be an ongoing high priority 
for the Committee. During 
2018 an external expert in 
cyber security gave an 
in-depth brieﬁng on 
developments within the 
cyber security ﬁeld to the 
Committee. In addition to the 
ongoing work around GDPR, 
the Committee is currently 
overseeing a review of the 
Company’s online controls 
and information security to 
ensure information held on 
the Company’s systems is 
protected to the fullest 

extent possible. Cyber risk 
is reviewed at each meeting 
of the Risk Management 
Committee along with 
relevant controls and 
mitigating actions. The 
Company continues to review 
its hardware and software 
systems, in addition to the 
ongoing education of its 
employees, to ensure all 
cyber threats are minimised 
to the fullest extent possible.

eLearning
As part of the Company’s 
ongoing commitment to best 
practice, and to provide our 
employees with the 
necessary skills to perform 
their roles to the best of their 
abilities, whilst minimising 
risk, the Committee oversaw 
the roll-out of a full suite of 
mandatory eLearning courses 
for all employees during the 
13-month period to 31 March 
2019. Individual courses were 
rolled out on a monthly basis 
during 2018 covering the 
following key risk areas: 
 – Anti-money laundering and 
counter-terrorist ﬁnancing;

 – Information security and 
cyber risk awareness;

 – Modern slavery;
 – General Data Protection 

Regulation (GDPR);
 – Anti-bribery and anti-

corruption;

 – Preventing ﬁnancial crime;
 – Health and Safety; and
 – The Equality Act 2010.

All new employees to the 
Company are required to 
complete the above eLearning 
courses prior to the end of 
their probationary period. 

Internal Audit
The Committee considered 
the Company’s internal audit 
requirements during the 
period under review. It was 
concluded that, in line with 
the Company’s peer group, 
and after consultation with 
the external auditor, a 
permanent internal audit 
function, or an outsourced 
function, was not required by 
the Company. Further details 
of this can be found on 
page 126.

 
 
 
AUDIT AND RISK COMMITTEE REPORT
CONTINUED

Risk management
The Committee has the 
responsibility for overseeing 
the risk management process 
for the Company on behalf of 
the Board. This entails 
reviewing the risk proﬁle, risk 
appetite, the principal risks 
and the effectiveness of the 
risk mitigation processes. 
The Committee delegates the 
day-to-day management of 
risk throughout the business 
to the Risk Management 
Committee (see page 120), 
which reports into the 
Committee. The Committee 
reviews the key risks of the 
Company, the risk register, 
and the risk mitigation 
processes in place. 

A full review of the 
effectiveness of the risk 
management and risk 
mitigation processes was 
carried out by the Risk 
Management Committee 
during the 13-month period to 
31 March 2019, at the request 
of the Committee. This 
included ongoing assessment 
of the principal risks facing the 
Company, including those that 
would threaten its business 
model, future performance, 
solvency or liquidity. The 
results of this review, and any 
subsequent changes to the 
risk register, were approved by 
the Committee. The signiﬁcant 
risks facing the Company are 
set out on pages 82 to 85.

The Committee dedicates its 
meeting in January to a full 
review of the internal control 
processes and procedures in 
place within the Group. At the 
meeting in January 2019 the 
Committee analysed the 
internal control structure, 
delegated authorities 
throughout the Group, and 
the major business processes 
covering areas such as 
operations, borrowings, cash 
management, accounting and 
reporting, statutory 
compliance and employment. 

Other areas of review 
overseen by the Committee 
included IT, cyber security, 
corporate structure, gifts and 
entertainment, organisational 
design and whistleblowing.

124  |  U and I Group PLC
Annual Report & Accounts 2019

Signiﬁcant issues 
considered by the 
Committee in relation to 
the Company’s ﬁnancial 
statements
Ensuring the integrity of the 
ﬁnancial statements is 
fundamental to the 
Committee’s remit. In 
preparing the accounts there 
are a number of areas 
requiring the exercise by 
management of particular 
judgement or a high degree 
of estimation. The 
Committee’s role is to assess 
whether the judgements and 
estimates made by 
management are reasonable 
and appropriate. Set out 
below are what we consider 
to be the most signiﬁcant 
accounting areas which 
required the exercise of 
judgement or a high degree 
of estimation during the year, 
together with details of how 
we addressed these. 
 – Construction risk: The 
Committee considered 
developments under 
construction both on 
balance sheet and in joint 
ventures, the recoverability 
of work in progress and the 
associated construction 
risks. The Committee 
challenged management in 
respect of the assumptions 
made relating to the 
completion of all material 
developments, including 
the ability of contractors to 
deliver the completed 
buildings, the likely 
ﬁnancial outcome of each 
development, and the 
recoverability of all work in 
progress on balance sheet. 
In particular, consideration 
was given to the provision 
made against the carrying 
value of St Mark’s Square, 
Bromley, and the 
methodology for arriving at 
that number to ensure that 
the remaining work in 
progress could be 
reasonably assessed to 
be recoverable. As a result 
the Committee concluded 
that the assets were 
appropriately recognised in 
the Group’s ﬁnancial 
statements.

 – Direct property 
investments, the 
development and trading 
portfolios and the valuation 
of the investment 
properties: The Committee 
challenged executive 
management in respect of 
both independent external 
valuations and Directors’ 
valuations across the entire 
property portfolio. In 
addition, the Committee 
challenged the external 
auditors in respect of the 
work they had conducted 
in connection with the 
internal and external 
valuations. The Committee 
was satisﬁed that there 
were no signiﬁcant areas of 
contention and that the 
valuation procedures and 
methodologies used and 
the valuations themselves 
were appropriate. In 
respect of impairment 
charges recognised, the 
Committee was satisﬁed 
that, where applicable, the 
written down values 
reﬂected the net realisable 
value of the assets.

 – Indirect property 

investments, accounting 
for investments in property 
secured loans and 
recoverability of ﬁnancial 
assets: The Committee 
again discussed with 
executive management the 
valuation and recoverability 
of these assets along with 
the external auditors as to 
the work they had 
conducted. As a result, the 
Committee concluded that 
the assets were 
appropriately recognised in 
the Group’s ﬁnancial 
statements.

 – Other reporting matters: 

The Committee considered 
the internal controls 
environment, management 
oversight of indirect 
property investments, and 
accounting and regulatory 
developments.

The Committee met without 
Executive Directors present 
during the year, and Lynn Krige, 
as Chairman of the Committee, 
met separately with the 
external auditors, PwC.

Audit and Risk Committee 
– allocation of time

4.

1.

3.

2.

1. Financial matters: 50%
2. Risk management: 20%
3. Internal controls: 25%
4. Governance: 5%

FRC review of 2018 Annual 
Report
During the period, the Group 
received a letter from the 
Financial Reporting Council 
conﬁrming that the 2018 
Annual Report had been 
subject to a review by its 
conduct committee 
responsible for promoting 
high quality corporate 
reporting, and ensuring 
compliance with relevant 
accounting and reporting 
requirements and rules. Their 
review of the Annual Report 
for the ﬁnancial year ended 
28 February 2018, was not 
intended to provide 
assurance that the Annual 
Report was correct in all 
material respects, as its 
purpose is not to verify the 
information provided, but to 
consider compliance with 
reporting requirements. 
Questions were raised in 
relation to restricted cash, 
working capital and fees 
and distributions from joint 
ventures, and adjustments 
have been made to the 
ﬁnancial statements in 
response. All enquiries are 
now closed, and the review 
process is complete.

 
 
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Fair, balanced and understandable
At the request of the Board, the Committee has considered whether, in its opinion, the 2019 Annual Report and Financial 
Statements are fair, balanced and understandable, and whether they provide the information necessary for shareholders to 
assess the Company’s position and performance, business model and strategy. The Committee reﬂected on the information 
it had received and discussions during the year, and in particular considered the following questions: 

FAIR

BALANCED

 – Is the narrative reporting on 
the business performance 
in the Strategic Report 
consistent with the 
ﬁnancial statements, and 
are key messages being 
reﬂected? 

 – Does the reporting give a balanced view of the 

performance including recognition of signiﬁcant failures, 
or matters that had required considerable attention, as well 
as the successes? 

 – Are any sensitive details 
being omitted, and does 
the Annual Report present 
the whole story?

 – Does the reporting identify and give appropriate weight to 
any signiﬁcant risks or issues the business faces in future, 
and has due weight been given to the most important 
ﬁnancial measures and information?

 – Is a consistent message being presented throughout the 
report, and is the writing too optimistic, or alternatively 
overtly negative?

UNDERSTANDABLE

 – Would a reader of the 
accounts have, on 
balance, a similar view 
of the Company as 
someone who is 
intimately involved with 
the Company?

 – Is the framework of the 

report clear and 
understandable? 

 – Are the important 

messages highlighted 
appropriately 
throughout the 
document?

 – Is there anything of which 
the Board is aware that will 
(or could) emerge in future 
that would surprise the 
reader of the accounts?

The Board requested that the 
Committee provide advice 
with regards to the above 
questions and, with this in 
mind, the Committee 
considered management’s 
analysis and were content to 
recommend to the Board that 
the Annual Report taken as 
a whole was fair, balanced 
and understandable, and 
provided the necessary 
information for shareholders 
to assess the Company’s 
position and performance, 
business model and strategy. 
The Board’s statement to 
this effect is set out in the 
Statement of Directors’ 
Responsibilities on page 156.

Viability Statement
The Committee has assessed 
whether ﬁve years continues 
to be an appropriate 
timeframe over which to make 
the Viability Statement. It was 
concluded that the current 
ﬁve-year assessment period 
remains appropriate and this 
was reviewed and adopted 
by the Board. The Viability 
Statement and our approach 
to assessing long-term 
viability can be found on 
page 86. 

125  |  U and I Group PLC
Annual Report & Accounts 2019

Non-audit services
U+I’s Non-Audit Services 
Policy was adhered to 
throughout the year, 
providing additional control 
measures around the 
instruction of the auditors to 
undertake non-audit work. 
The policy requires that all 
non-audit fee work be 
reported to the Committee, 
and that all non-audit fee 
work falling into certain 
categories and above certain 
thresholds be reported prior 
to the work being undertaken 
as detailed below:
 – Under £25,000: Approval 
is pre-approved by the 
Committee. Approval is 
required by the Chief 
Financial Ofﬁcer, or the 
Chief Executive in his 
absence.

 – In excess of £25,000 and 
up to £100,000: Approval 
required by the Chief 
Financial Ofﬁcer and the 
Chairman of the Committee.

 – In excess of £100,000: 
Approval required from 
the full Committee.

In addition, the policy 
prohibits the auditors from 
being considered for 
providing the following 
services: internal audit; 

bookkeeping services; 
and the design and 
implementation of ﬁnancial 
information systems.

Reappointment of PwC as 
external auditor
PwC was reappointed as the 
Company’s external auditor in 
2018 following a full tender 
process led by the 
Committee. PwC have been 
the Company’s auditors since 
2008. The Committee has 
undertaken a review of PwC’s 
performance every year since 
appointment. The Committee 
reviewed PwC’s performance 
in relation to the audit for the 
13-month period ended 
31 March 2019. It sought the 
views of key members of the 
Finance Team, and concluded 
that PwC had performed well, 
provided an appropriate and 
robust level of challenge, and 
continued to be effective. In 
accordance with professional 
and regulatory standards, the 
lead audit partner is rotated at 
least every ﬁve years in order 
to protect audit independence 
and objectivity. Sandra 
Dowling was the lead audit 
partner for the ﬁnancial period 
under review; this was 
Sandra’s ﬁrst year as lead 
audit partner for the Company. 

Following the Committee’s 
review of the effectiveness 
of the external audit process, 
and its assessment of the 
external auditor’s 
independence and objectivity, 
it has recommended the 
reappointment of PwC as the 
Group’s external auditor to 
the Board for recommendation 
to, and approval by, 
shareholders at the 2019 
Annual General Meeting. 

Internal control
The Directors acknowledge 
their responsibility for 
reviewing the effectiveness 
of the Group’s system of 
internal controls to safeguard 
shareholders’ investments 
and protect the Company’s 
assets. The Directors 
acknowledge that they are 
responsible for determining 
the nature and extent of the 
principal risks the Company 
is willing to take in achieving 
its strategic objectives. The 
operational, ﬁnancial and 
compliance risk controls are 
designed to manage rather 
than eliminate the risk of 
failure to achieve business 
objectives, and can only 
provide reasonable and not 
absolute assurance against 
material misstatement or loss.

 
 
 
AUDIT AND RISK COMMITTEE REPORT
CONTINUED

The Board, through the 
Committee and the Risk 
Management Committee, 
has conducted a thorough 
and robust risk assessment 
of the business, identifying 
principal risks, their potential 
impact, likelihood of 
occurrence, controls and 
mitigating actions, together 
with early warning systems 
and any further actions which 
need to be implemented. 

Detailed below is a 
description of the Group’s 
internal control and risk 
management framework used 
in the process of preparing 
the Consolidated ﬁnancial 
statements. The key features 
of U+I’s system of internal 
control include:
 – A comprehensive system 
of ﬁnancial reporting and 
business planning with 
appropriate sensitivity 
analysis;

 – A detailed authorisation 

process which ensures that 
no material commitments 
are entered into without 
competent and extensive 
approval;

 – A deﬁned schedule of 

matters reserved for the 
Board, and clearly deﬁned 
roles of the Chairman and 
Chief Executive;

 – An organisational structure 
with clearly deﬁned levels 
of authority;

 – Formal documentation of 

procedures;

 – The close involvement of 
the Executive Directors in 
all aspects of the day-to-
day operations, including 
regular meetings with 
senior management to 
review all operational 
aspects of the business 
and risk management 
systems;

 – A review of the Group 

strategy and progress on 
developments at each 
scheduled Board meeting;
 – A comprehensive insurance 

programme; and

 – A formal whistleblowing 

policy.

Internal audit
A full review of the 
Company’s requirements 
for an internal audit function 
was undertaken by the 
Chief Financial Ofﬁcer 
in conjunction with the 
Committee Chairman in 
2016. At this time it was 
agreed that the outsourced 
internal audit function should 
be stood down. In taking this 
decision, the Committee took 
into account the size and 
complexity of the business; 
it also sought the advice of 
the external auditors and 
conducted a review of 
internal audit functions within 
its peer group. The 
Committee agreed that it did 
not consider a permanent 
internal audit function, either 
in-house or outsourced, 
was required. 

At the Audit and Risk 
Committee meeting held in 
January 2019 the Committee 
reviewed the requirement for 
an internal audit function and 
came to the conclusion that 
the function was not required 
at this time for the same 
reasons discussed in 2016. 
It was conﬁrmed that a 
mechanism was in place 
whereby any areas that may 
need additional review and 
focus, as circumstances and 
the nature of risks change, 
would be adequately covered. 
Any such review would be 
carried out using experienced 
staff or external advisors. 
The Committee will continue 
to review the requirement for 
an internal audit function on 
an annual basis. 

The Board has conducted 
a review of the effectiveness 
of the systems of internal 
control for the 13-month 
period ended 31 March 2019, 
and to the date of this report, 
and considers that there is 
a sound system of internal 
control which accords with 
the FRC’s Guidance on Risk 
Management, Internal 
Control and Related Financial 
and Business Reporting. 

The Board is satisﬁed that 
there is an ongoing process 
for identifying, evaluating 
and managing the Group’s 
principal risks, including 
ﬁnancial, operational and 
compliance controls, and that 
it is regularly reviewed.

Modern Slavery Act 2015
U+I recognises the 
importance of the Modern 
Slavery Act 2015, and is fully 
committed to ensuring that 
human trafﬁcking and slavery 
play no part in any activities 
carried out by the Group or 
its supply chain. During the 
year a revised modern slavery 
statement was discussed and 
approved by the Board, you 
can ﬁnd this on our website 
at uandiplc.com/investors/
corporate-governance. All 
employees have completed 
an online modern slavery 
eLearning course and are 
fully aware of the Company’s 
attitude and their personal 
responsibilities towards 
such matters.

As U+I is not a direct 
employer of sub-contracted 
individuals on our 
development projects, there 
is no onus on us to conduct a 
right to work check. However, 
we believe there are good 
reasons for establishing that 
a check has been conducted, 
as failure to do so can cause 
disruption to business 
operations, reputational 
damage, possible 
invalidations of insurances, 
as well as concerns about 
whether those workers have 
the requisite skills and 
knowledge. In 2019, U+I will 
therefore be incorporating 
into all future build contracts 
an obligation, beyond our 
current legal obligation, that 
our main contractors check 
the right to work status of all 
site employees using the 
approach outlined on the 
Governments’ Home Ofﬁce 
website.

Going concern
The Directors have reviewed 
the current and projected 
ﬁnancial position of the 
Group, making reasonable 
assumptions about future 
trading performance. The key 
areas of sensitivity are:
 – Receipt, amount and 

timings of development 
proﬁts;

 – Timing and value of 

property sales;

 – Availability of loan ﬁnance 
and related cash ﬂows;

 – Committed future 

expenditure;

 – Future property valuations 

and their impact on 
covenants and potential 
loan repayments; 
 – Committed future 
expenditure; and
 – Future rental income.

The forecast cash ﬂows have 
been sensitised to reﬂect 
those cash ﬂows which are 
less certain, and to take 
account of a potential 
deterioration of property 
valuations. In addition, the 
forecasts have been subject 
to sensitivity analysis, in which 
the impact of signiﬁcant 
reductions to the property 
portfolio fair value and 
associated rental income on 
the Group’s loan covenants 
was assessed. From their 
review, the Directors believe 
that the Group has adequate 
resources to continue to be 
operational as a going 
concern for at least 12 months 
and therefore have adopted 
the going concern basis in 
preparing the Group’s 2019 
ﬁnancial statements.

Lynn Krige, 
Chairman of the 
Audit and Risk 
Committee
21 May 2019

126  |  U and I Group PLC
Annual Report & Accounts 2019

Our approachAs we have set out throughout this Report, at U+I we recognise the importance of building relationships and strong, mutually beneﬁcial partnerships with our stakeholders based on trust and a reputation for getting things done. At the heart of everything we do is continuous, proactive engagement using the wide variety of channels outlined on these pages. Our relationships are underpinned by our three core values, imagination, intelligence and audacity, and our purpose that through truly transformational regeneration, and the making of great places, we can unlock untapped potential creating positive change for the beneﬁt of all. We consider each project with our heads, to ensure it will deliver sustainable returns for our shareholders, and with our hearts, to evaluate how we can create long-term socio-economic beneﬁts for the communities in which we work. This collaborative approach, which is demonstrated on pages 127 to 129, drives us to continue to challenge ourselves to deliver great places, and has seen us achieve a huge amount in the three years since we became U+I. Why we engageAs a young, dynamic, market and thought-leading property regeneration and development business we are continually striving to improve, and to challenge ourselves as to how we can better fulﬁl our purpose. We can only do this by approaching everything we do with a socially responsible and sustainable focus. Listening to the experiences, ideas, requirements and concerns of our different stakeholders will enable us to deliver projects that improve the local environment and strengthen communities that we serve. Engaging with stakeholders is key to this process, the feedback we receive forms part of our Board and wider strategic discussions, as we focus on running a business that beneﬁts all of our stakeholders for the long term.We strongly believe that our people are our greatest asset, and ensuring a ‘People First’ approach is one of our key strategic priorities. Finding and working with intelligent, talented, entrepreneurial and creative people is essential to our continued success as a business. In return, our employees expect to be part of a great business they can be proud to work for.How we engage with our employeesContinuous open and honest communication along with engaging, interactive events, and the correct reward structure to create a collaborative, inclusive culture and a positive working environment: –Roll-out of an new, annual all-employee engagement survey to encourage engagement and improve business practices. –Focus on talent development throughout the business with the roll-out of new talent strategy.  –Ongoing ‘Working Smarter’ initiative encompassing all areas of the business, including reconﬁguration of ofﬁce layout to encourage collaboration and knowledge sharing. –An all-employee LTIP programme to encourage ownership, inclusiveness and strengthen a common sense of purpose. –Appointment of new Board and Leadership Team members to strengthen expertise and experience. –Monthly all-employee townhall meetings to disseminate information, engage our employees, and encourage greater collaboration, innovation and entrepreneurial spirit.OUR PEOPLE  –Company-wide intranet to keep employees updated on key activities. –A weekly Company-wide newsletter to ensure all employees are aware of work and social developments to encourage inclusiveness.  –All Non-executive Directors hosted open lunches where employees were able to beneﬁt from their experiences and ask questions about lessons learnt throughout their careers.  –Relevant incentive programmes to reward talent, including project related incentives, wellbeing and gym memberships. –A suite of all-employee eLearning courses rolled out on new and evolving governance and legislatory requirements.Working for U+IWorking for U+I is about being part of an inspiring culture where talent is nurtured, and creativity is encouraged, as we build a team who share a passion and commitment for changing people’s lives for the better, creating communities and legacies which we can all be proud of.RELATIONS WITH SHAREHOLDERS AND STAKEHOLDERSOverviewStrategic reportFinancial statementsAdditional information127 | U and I Group PLCAnnual Report & Accounts 2019GovernanceRELATIONS WITH SHAREHOLDERS 
AND STAKEHOLDERS
CONTINUED

SHAREHOLDERS

Our shareholders expect 
accurate, honest disclosure 
and the delivery of 
sustainable long-term 
returns.

How we engage with our 
shareholders
Ongoing and regular 
engagement and 
conversations with investors 
through meetings, calls, 
feedback loops, market 
announcements, site visits, 
the AGM and social media: 
 – Comprehensive investor 
relations programme 
including regular 
engagement through calls 
and meetings with 
institutional investors 
who, in aggregate, held 
over 80% of the issued 
share capital of the 
Company, on strategy, 
remuneration and 
corporate governance 
matters. 

 – Launch of our new 

website with enhanced 
investor relations section 
to engage shareholders 
by offering greater clarity 
around U+I, our strategy, 
values, projects and 
approach. This includes 
shareholder feedback 
mechanisms. 

 – Investor site visits, 
including Mayﬁeld 
(Manchester), Preston 
Barracks and Circus 
Street (Brighton), to 
demonstrate the scale 
and potential of our 
projects, and our 
distinctive approach. 

 – Bi-annual investor and 

analyst feedback through 
third-party advisors.
 – Boundary redeﬁning 

industry thought leadership 
events held in our ofﬁces 
through our ‘U+I Think’ 
programme, and through 
our ‘Matter’ publication 
(see right).

 – Regular news ﬂow 

distribution through press 
releases and RNS 
announcements to 
demonstrate that the 
Company is executing 
against predeﬁned 
business strategy.

 – Clearly deﬁned ﬁnancial 

KPIs for which 
management can be held 
accountable.

 – Presentations made by 
Executive Directors to 
analysts, shareholders and 
the media, following the 
release of the preliminary 
and interim results. 

 – Face-to-face engagement 
with private shareholders 
during the AGM.

 – Detailed investor relations 

report tabled at each Board 
meeting giving an up-to-
date perspective on the 
investment market, 
changes to the shareholder 
register and key sector 
news. 

 – Award-winning Annual 

Report and Accounts to 
give further background on 
strategy, business model, 
outputs and project 
performance.

Matter

Redeﬁning our sector 
through ground breaking 
thought leadership
Matter is our innovative, 
sector redeﬁning, thought 
leadership publication, 
which reﬂects the ideas, 
concepts and values of U+I 
and highlights some of the 
themes and ongoing 
discussions that you might 
well hear were you to walk 
into one of our ofﬁces. 
Matter is designed to be 
challenging and engaging, 
and above all thought 
provoking. This is just one 
example of how U+I is 
looking to change the 
long-held stereotypes and 
perceptions within this 
industry by looking at and 
doing things differently. 

To download your copy 
of Matter go to:  
matter.uandiplc.com

COMMUNITIES

U+I believes in the creation 
of positive change through 
unlocking the untapped 
potential of communities, 
creating great places to live 
and work, whilst preserving 
the unique heritage and 
identity of the sites we 
regenerate. Our purpose 
is to deliver positive 
long-term, socio-economic 
beneﬁts by creating 
sustainable, thriving 
communities for the beneﬁt 
of all.

How we engage with 
communities
We build strong and lasting 
relationships within the 
communities we operate. 
This is key to our continued 
success as a business. 
We do this through:
 – Collaboration with local 

communities and 
stakeholders from the 
outset of our projects to 
ensure engagement and 
the cultivation of a shared 
vision, focusing on the 
turning of derelict, unloved 
spaces into thriving 
mixed-use areas that 
transform cities, boost 
tourism and create jobs.
 – Extensive consultations 
to discuss the needs of 
the different local 
stakeholders to create 
lasting relationships built 
around trust and 
accountability.

128  |  U and I Group PLC
Annual Report & Accounts 2019

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 – Whilst these discussions 
are ongoing we open up 
our sites for ‘Worthwhile 
Use’ projects, providing 
free/low-cost ofﬁce, events 
and arts spaces for local 
communities and ﬂedgling 
businesses seeking to 
grow (see Dirt Factory, 
Manchester below).
 – A brand recognition 

benchmarking review 
within the communities in 
which we operate was 
carried out during the year. 
 – Regular forums and events 
to engage communities 
throughout the planning/
consultation process to 
ensure the delivery of 
necessary amenities to 
support modern ﬂexible 
working and living.

Dirt Factory, Mayﬁeld

 – Alignment with our chosen 
charity, Shelter. See page 
80 for further details. 
 – Investment in ﬂedgling 

start-up businesses in our 
regeneration sites through 
our Plus X business to 
encourage 
entrepreneurship, 
innovation, growth and 
productivity in local 
communities.

 – Working alongside local 
suppliers on our projects 
to create new jobs, grow 
productivity and stimulate 
the economy. 

 – Including the environment 
and sustainability in our 
template so all our projects 
consider the carbon, 
energy, water and waste 
impacts on communities. 

Leading the way in 
community engagement
Whilst more traditional 
developers may choose to 
close off a development site 
whilst awaiting the 
conclusion of the, sometimes 
lengthy, planning process, 
at U+I we take pride in doing 
things differently. We open 
up our sites and engage with 
communities to enable us to 
better understand the 
experiences, hopes and 
concerns of the local people. 

Using our ‘Worthwhile Use’ 
philosophy we embrace the 
community by providing 
free or low-cost ofﬁce, 
events and arts spaces. 
An example of this can be 
seen at our site in Mayﬁeld, 
Manchester, where we have 
opened up our site to a 
variety of businesses, 
including creating the UK’s 
ﬁrst indoor mountain biking 
centre, to provide an 
inclusive space for the 
entire community to enjoy.

129  |  U and I Group PLC
Annual Report & Accounts 2019

OUR PARTNERS

Our partners expect U+I to 
live up to our reputation and 
our promises by providing a 
professional, collaborative 
and innovative approach 
along with the high-quality 
execution of our projects 
and a continued track 
record of strong delivery.

How we engage with our 
partners
A continuous ﬂow of calls, 
meetings and site visits 
amongst all parties involved 
in a project, to foster 
alignment and ensure 
projects are delivered to 
the highest standard: 
 – Regular collaboration and 
partnerships with local 
authorities, governments, 
councils and MPs through 
existing, mixed-use 
regeneration projects, 
to help effect change in 
communities and support 
their agendas to increase 
ofﬁce and housing 
capacity and stimulate 
local economies. 

 – Working with architects, 
funders, local residents 
and ﬂedgling start-ups, 
amongst others, to 
engage untapped 
potential and deliver 
ambitious projects. 

 – Reputation benchmarking 
exercise with 75 in-depth 
phone interviews with 
senior partners in the 
public and private sector 
to understand how the 
U+I brand was perceived.
 – Wide-ranging engagement 
of stakeholders for our 
‘PPP: The Reset’ campaign 
and the subsequent 
establishment of an 
independent PPP 
Community Challenge 
Panel to ensure U+I and 
our schemes are delivering 
on our promises (see right). 

 – Ongoing and regular 

discussions with partners 
throughout our project 
programmes and beyond 
to encourage open and 
honest feedback and 
areas for improvement.

 – U+I ‘Think’ events to 

challenge the status quo 
and promote innovation 
within the real estate 
sector with panels of 
thought leaders and 
change makers. 
 – Nurturing strong 
relationships and 
delivering on other key 
projects to build trusting 
and complementary 
relationships.

 – Partnership with our 

chosen Company charity 
Shelter, allowing 
employees to hold events 
and raise money, which 
was then matched by the 
Company, raising over 
£30,000 in the 13-month 
period to 31 March 2019. 

PPP: The Reset

Following through on the 
delivery of our promises 
to our partners
During 2018, we conﬁrmed 
our commitment to industry 
redeﬁning, good 
governance practice, 
through increased 
transparency and 
accountability with regards 
to delivering on the 
promises we make during 
our stakeholder engagement 
process at the outset of 
our major PPP projects. 
Following our ‘PPP: The 
Reset’ campaign, a PPP 
Community Challenge 
Panel chaired by an 
independent Non-executive 
Director, and reporting 
directly to the Board, 
is being created which 
will hold the Company 
to account on those 
promises made.

 
 
 
CONNECTING 
REMUNERATION AND 
PERFORMANCE

  Elements of Executive pay
   What we have achieved in the 
period ended 31 March 2019

Securing of new PPP 
project and trading 
deals
Major new project win 
representing successful 
realisation of our ‘fewer and 
larger’ project strategy, along 
with three new short-term 
opportunities being 
secured.

Engagement  
with analysts, 
shareholders and 
potential investors
Increased engagement with 
analysts, shareholders and 
potential investors, including 
integration of new broking 
team into the IR process 
leading to improved 
coverage. 

SALARY

Repositioning of the 
Investment Portfolio 
Progress made on 
repositioning of the Investment 
Portfolio with new acquisitions 
in Bournemouth, Clacton-On-
Sea and Finchley, as well as 
a key asset disposal. 

Brand and 
reputation
The roll-out of a brand 
reputation benchmarking 
exercise amongst key public 
and private stakeholders to 
understand the perception of 
the U+I brand, and the 
Company strategy, with 
our partners.

Public affairs 
programme
Increase in our public affairs 
activity including a number 
of high-proﬁle speaking 
engagements, the launch 
of our ‘PPP: The Reset’ 
campaign, and the creation 
of a new PPP Community 
Challenge Panel.

SHAREHOLDING 
GUIDELINES

BONUS

DELIVERED 
DEVELOPMENT 
AND TRADING 
GAINS  
OF £42.8M

BENEFITS

LONG-TERM 
INCENTIVE PLAN

Key project funding 
strategy
Focus on key project 
funding strategy ‘Project 
Ruby’ during the year. 
Signiﬁcant progress made, 
and exposure to potential 
funders obtained, with the 
project to continue 
throughout 2019/20.

Financing
Successful negotiation of a 
£19.7 million loan facility with 
Barclays, providing increased 
ﬂexibility and greater security 
to the Company’s funding 
requirements.

Operating model
Completion of the ﬁrst 
stage of our ‘Working 
Smarter’ initiative, including 
the review and reﬁnement of 
the Company’s ‘factory ﬂoor’, 
and further changes to 
organisational structure 
to deliver a reﬁned 
process. 

RETIREMENT 
BENEFITS

Talent management
A ‘People First’ 
approach, with the 
strengthening of the Board 
and Leadership Team with key 
new hires, and the roll-out of 
a new talent management 
strategy to allow all 
employees to reach their 
full potential.

Cost savings
Delivery of cost savings 
through a decrease in the net 
recurring overhead, and the 
identiﬁcation of further 
overhead savings to be 
targeted over the next 
ﬁnancial year.

130  |  U and I Group PLC
Annual Report & Accounts 2019

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ANNUAL STATEMENT FROM 
THE REMUNERATION 
COMMITTEE CHAIRMAN

“
THE COMMITTEE CONTINUES ITS FOCUS 
ON ALIGNING THE REMUNERATION 
FRAMEWORK WITH THE STRATEGIC 
OBJECTIVES OF THE BUSINESS AND THE 
CREATION OF SHAREHOLDER VALUE OVER 
THE LONG TERM
” 

Nick Thomlinson
Chairman of the Remuneration Committee

Highlights of Committee activities during the 13-month 
period to 31 March 2019: 
 – No salary increases for the ﬁnancial year beginning 

1 April 2019, the fourth consecutive year that salaries 
have not increased.

 – Early adoption of remuneration provisions set out in the 

revised UK Corporate Governance Code.

 – Incentive framework heavily weighted towards long-term 

performance. 

 – Awards under the LTIP subject to an extended holding 

period introduced the previous year. 

 – 91% approval of our 2018 Remuneration Report 

by Shareholders.

131  |  U and I Group PLC
Annual Report & Accounts 2019

Dear Shareholder
As Chairman of the 
Remuneration Committee 
I am pleased to present our 
Directors’ Remuneration 
Report for the 13-month 
ﬁnancial period ended 
31 March 2019.

Implementation of Policy for 
2019/20
We are not making any 
changes to the operation of 
our Policy for 2019/20. 
Executive Directors’ salaries 
are not being increased for 
the fourth consecutive year. 
Awards under our Long-Term 
Incentive Plan (LTIP) will 
continue to be based on 
three-year and four-year NAV 
growth and will be subject to 
the extended holding period 
introduced last year.

Disclosure 
In the interests of succinct 
and clear disclosure we have 
introduced a ‘remuneration 
at a glance’ section which 
immediately follows this letter. 
This section provides details of 
the Company’s performance 
against relevant KPIs, as well 
as a summary of our 
Remuneration Policy and its 
implementation in the ﬁnancial 
periods ending 31 March 2019 
and 31 March 2020.

Remuneration out-turns 
for 2018/19
Our incentive framework for 
Executive Directors continues 
to be heavily weighted 
towards the LTIP rather than 
the annual bonus.

In terms of annual bonus 
out-turn, taking into account 
performance for the year, the 
Executive Directors received 
payments ranging from 20% 
to 23% of salary. This 
reﬂected good progress 
against individual strategic 
objectives, and moderate 
performance against our 
stretching ﬁnancial 
objectives. Further detail 
on bonus payments and 
performance for the year are 
set out on pages 138 to 140.

Our LTIP performance is 
measured 50% over three 
years and 50% over four 
years. LTIP vesting for the 
period ended 31 March 2019 
therefore reﬂects 50% of the 
award made in 2015 (which 
achieved vesting of 22.6%) 
and 50% of the award made 
in 2016 (which did not 
achieve the threshold vesting 
of 5% per annum, and 
therefore lapsed). 

Remuneration governance 
developments
The last year has seen 
a number of important 
developments in corporate 
governance and investor 
expectations, including the 
publication of the updated 
UK Corporate Governance 
Code. The Committee 
welcomes the new Code and 
is pleased to report that the 
Company’s remuneration 
policies and practices already 
comply with a number of its 
provisions. For example we 
introduced holding periods 
on the LTIP two years ago, 
which extend the overall time 
horizon of the LTIP to ﬁve 
years. We will be undertaking 
a full review against the new 
Code as part of our Policy 
review during 2019. 

The Committee was 
pleased that our Directors’ 
Remuneration Report received 
the support of 91% of our 
shareholders at the 2018 
AGM and we look forward to 
your continued support at the 
forthcoming AGM.

Nick Thomlinson, 
Chairman of the 
Remuneration 
Committee
21 May 2019

 
 
 
REMUNERATION 
AT A GLANCE 

Remuneration Policy 
Prior to the 2017 AGM, the 
Company engaged with 
shareholders representing 
over 70% of the issued share 
capital of the Company. The 
Remuneration Policy was 
presented and approved by 
95% of those shareholders 
voting at the 2017 AGM. This 
policy will operate for three 
years until the 2020 AGM. 

The key objectives of the 
Company’s Remuneration 
Policy are as follows:
 – To ensure that Executive 
Directors and senior 
managers are rewarded in 
a way that attracts, retains, 
motivates and rewards 
management of the 
highest quality.

 – To operate incentive plans 
designed to encourage 
Executive Directors and 
senior managers to align 
their long-term career 
aspirations with the 
long-term interests of the 
Company and 
shareholders’ expectations. 
 – To promote the attainment 

of both individual and 
corporate achievements, 
measured against 
performance criteria 
required to deliver the 
long-term growth and 
sustainability of the 
business. 

 – To encourage sustained 
performance over the 
medium and long term 
without taking undue risk.

The total pay framework is 
based on a mixture of ﬁxed 
and variable elements 
considered on a meritocratic 
basis at individual and Group 
level, taking into account the 
remuneration awarded to 
employees in the Group. The 
balance between ﬁxed and 
variable pay is considered 
appropriate, given that the 
various incentive plans/
schemes ensure a signiﬁcant 
proportion of a key 
individual’s remuneration 
package is performance-
related, thereby correlating 
with the strategic aims of the 
business and the performance 
of the Company.

Performance in 2018/19
The graphs below show the 
Company’s performance 
over the last ﬁve ﬁnancial 
periods in respect of (i) total 
shareholder return against 
relevant Real Estate 
Investment indices; (ii) NAVps 
growth; and (iii) development 
and trading gains.

Development and trading 
gains (£million)

68.3

51.1

45.7

42.8

35.0

2015

2016

2017

2018

2019

TSR (5 years)

Growth in NAVps and dividends 

200

150

100

50

200

150

100

50

Feb
14

Feb
15

Feb
16

Feb
17

Feb
18

Mar
19

Feb
14

Feb
15

Feb
16

Feb
17

Feb
18

Mar
19

U and I
FTSE Real Estate Investment Trust Index
FTSE Real Estate Investment Services Index

132  |  U and I Group PLC
Annual Report & Accounts 2019

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Remuneration Policy implementation in 2018/19 and 2019/20
The following table sets out a summary of our Remuneration Policy as well as its implementation in 2018/19 and 2019/20.

COMPONENT

SUMMARY OF POLICY

IMPLEMENTATION IN 2018/19

IMPLEMENTATION IN 2019/20

Salary

Core element of 
remuneration set at a level 
to attract and retain 
individuals of the calibre 
required to shape and 
execute the Company’s 
strategy.

Salaries for the ﬁnancial year starting 
1 March 2018 were:

Salaries for the ﬁnancial year starting 
1 April 2019 are:

M S Weiner
R Upton
M O Shepherd

1 March 2018
£’000
375
350
325

M S Weiner
R Upton
M O Shepherd

1 April 2019
£’000
375
350
325

Retirement 
beneﬁts

Provides Executive 
Directors with retirement 
beneﬁts consistent with 
the role.

Deﬁned contribution pension 
arrangements are provided at 17.5% 
of salary per annum.

No changes to the pension 
contributions for incumbent Executive 
Directors.

Beneﬁts

Provides Executive 
Directors with market-
competitive beneﬁts 
consistent with the role. 

Beneﬁts received during the year 
include cash in lieu of motor vehicle, 
subsidised gym membership and 
medical insurance.

The Committee will review pension 
contributions during 2019/20 taking 
into account the revised UK Corporate 
Governance Code. In the event of 
a new Executive Director hire the 
Committee would be mindful of 
shareholders’ evolving views of 
pension alignment with the workforce.

No changes.

Bonus

Typical beneﬁts include 
cash in lieu of motor 
vehicle, private medical 
insurance, income 
protection insurance and 
life assurance.

Incentivises and rewards 
Executive Directors for 
the successful delivery of 
ﬁnancial and strategic 
objectives on an annual 
basis.

Any bonus above 50% of 
the maximum opportunity 
is paid in shares which the 
Director is expected to 
hold for at least two years.

Malus and clawback 
provisions apply.

133  |  U and I Group PLC
Annual Report & Accounts 2019

For 2018/19, Executive Directors had 
a maximum bonus opportunity of 75% 
of salary.

The table below sets out details of the 
measures used, and performance 
achieved:

Maximum bonus opportunity for 
2019/20 will be 75% of salary. 

The structure for 2019/20 will be 
unchanged from 2018/19.

Measure
NAV growth
Development 
and trading gains
Strategic and 
personal 
objectives and 
priorities
Total
Total (% of salary) 

Weighting
30%

Performance 
0%

30%

0.47%

40% 26%–30%
100% 26%–30%
20%–23%

 
 
 
REMUNERATION AT A GLANCE
CONTINUED

COMPONENT

SUMMARY OF POLICY

IMPLEMENTATION IN 2018/19

IMPLEMENTATION IN 2019/20

Long-Term 
Incentive 
Plan

Incentivises and rewards 
Executive Directors for 
delivery of the Company’s 
strategic plan of building 
shareholder value.
Awards are subject to 
achieving performance 
targets set by the 
Committee.

Awards are subject to a 
combined performance 
period and holding period 
of ﬁve years.

Malus and clawback 
provisions apply.

LTIP awards outurns
 – The second half of the 2015 LTIP 

awards vested at 22.6% of maximum 
following NAVps growth of 5.2% 
over the four-year performance 
period.

 – The ﬁrst half of the 2016 LTIP awards 
vested at 0% of maximum following 
NAVps growth of 3.4% over the 
three-year performance period.

LTIP awards made in 2018
In 2018 Executives were granted the 
following LTIP awards subject to 
three-year and four-year NAVps growth 
performance:

LTIP awards to be made in 2019
In 2019 Executives will be granted the 
following LTIP awards:

M S Weiner
R Upton
M O Shepherd

Face value of award
300% of salary
300% of salary
100% of salary

Awards are subject to NAVps growth 
performance targets which are 
measured equally over a three-year 
and four-year performance period as 
follows:

M S Weiner
R Upton
M O Shepherd

Face value of award
300% of salary
300% of salary
100% of salary

Threshold vesting 
(20% of maximum)
Maximum vesting 
(100% of maximum)

Targets at years 
three and four

5% p.a.

12% p.a.

Awards are subject to a combined 
performance period and holding 
period of ﬁve years.

No changes.

Awards are subject to NAVps growth 
performance targets which are 
measured equally over a three-year 
and four-year performance period as 
follows:

Threshold vesting 
(20% of maximum)
Maximum vesting 
(100% of maximum)

Targets at years 
three and four

5% p.a.

12% p.a.

Awards are subject to a combined 
performance period and holding 
period of ﬁve years.

Executive Directors are expected to 
build a shareholding of 50% of salary 
within two years of appointment and 
100% of salary within four years of 
appointment. Thereafter, they are 
required to retain 50% of net vested 
shares from the LTIP until they build 
shareholdings of 200% of salary for 
the Chief Executive Ofﬁcer and 150% 
of salary for the Chief Development 
Ofﬁcer and the Chief Financial Ofﬁcer.

Shareholding 
guidelines

Aligns Executive Directors 
with the shareholder 
experience.

134  |  U and I Group PLC
Annual Report & Accounts 2019

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ANNUAL REMUNERATION 
REPORT

The Annual Remuneration Report on pages 135 to 144 provides details of remuneration for the 13-month ﬁnancial period ended 
31 March 2019, and how our Policy will be implemented for the ﬁnancial year commencing 1 April 2019.

Implementation of Remuneration Policy in the ﬁnancial year commencing 1 April 2019
The table below provides an overview of the components of the remuneration framework for all Executive Directors:

Fixed pay  +  Annual bonus  +  LTIP

Salary
The salaries which will apply for the ﬁnancial year beginning 1 April 2019 are set out below:

M S Weiner
R Upton
M O Shepherd

1 April 2019
£’000
375
350
325

1 March 2018
£’000
375
350
325

% increase
0
0
0

Retirement beneﬁts
The existing money purchase pension scheme is now closed to future contributions and new joiners and pension is provided 
via a Group Personal Pension Plan. The contribution structure for Executive Directors is 17.5% of salary for the ﬁnancial year 
commencing 1 April 2019.

During the year the Committee will review the pension policy for Executive Directors taking into account the revised UK 
Corporate Governance Code. In the event of a new Executive Director hire the Committee would be mindful of shareholders’ 
evolving views of pension alignment with the workforce.

Executive Directors do not have a prospective entitlement to a deﬁned beneﬁt pension.

Annual bonus
The annual bonus structure sets ﬁnancial and strategic/personal targets at the beginning of each year. The targets set for 
2018/19 are disclosed in the incentive out-turns section on pages 138 and 139. For 2019/20 we will continue with this structure. 
The performance measures and weightings for the 2019/20 annual bonus are set out below:

Financial

Non-ﬁnancial and strategic

Measure
NAV growth
Development and 
trading gains
Strategic and personal 
objectives and priorities

Weighting
30%
30%

40%

The ﬁnancial targets for the 2019/20 ﬁnancial year (including threshold and maximum) and our performance against them will be 
disclosed in next year’s report.

Annual bonus opportunities for the ﬁnancial year beginning 1 April 2019 are shown below. Bonus amounts above target are held 
as shares for a period of two years.

On target 
bonus for  
year as a 
percentage  
of salary
%
37.5
37.5
37.5

Maximum 
bonus for  
year as a 
percentage  
of salary
%
75
75
75

M S Weiner
R Upton
M O Shepherd

135  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
ANNUAL REMUNERATION REPORT
CONTINUED

Long-Term Incentive Plan
Awards of 300% of salary will be made to M S Weiner and R Upton. M O Shepherd will receive an award of 100% of salary.

Awards will be subject to U+I’s NAV growth, 50% measured over a three-year period and 50% measured over a four-year period 
as outlined below:

Threshold vesting (20% of maximum)
Maximum vesting (100% of maximum)

Pro-rated vesting will occur for performance between these points.

Targets at 
year three  
and four
5% p.a.
12% p.a.

Three-year 
cumulative 
targets
15.8%
40.5%

Four-year 
cumulative 
targets
21.6%
57.4%

For awards following 1 March 2017, the holding period has been extended such that the entire award will have a combined 
performance and holding period of ﬁve years. 

Awards are subject to a risk underpin. For awards to vest, the Committee must be satisﬁed that performance has not been 
achieved as a result of inappropriate ﬁnancial risk (e.g. very high levels of gearing), and that the level of ﬁnancial and business 
risk is in line with the Company’s stated strategy. 

Clawback and malus
In line with the UK Corporate Governance Code, incentive awards made following 1 March 2016 are subject to both malus and 
clawback.

Clawback and/or malus provisions may be applied at the discretion of the Committee if an exceptional event occurs, such as 
a material misstatement of results, serious misconduct or an error/material misstatement resulting in overpayment. 

Malus provisions may also be applied in the event of serious reputational damage to the Company or a material failure of risk 
management. 

Clawback provisions will apply to the annual bonus for up to two years following the payment of cash/shares. For LTIP awards, 
malus and clawback provisions may be applied for up to ﬁve years post grant.

During the year the Committee will review our clawback and malus triggers taking into account the updated 2018 UK Corporate 
Governance Code. 

Savings-related option scheme
The renewal of our Save As You Earn Option Plan was approved by shareholders at our 2014 Annual General Meeting.

Non-executive Directors’ fees
Fees for the ﬁnancial year commencing 1 April 2019 are set out in the table below:

Chairman
Basic fee
Chairman of Audit or Remuneration Committee
Membership of Audit or Remuneration Committee
Senior Independent Director

1 April 2019
£’000
120
42
7.5
5
5

1 March 2018
£’000
120
42
7.5
5
5

136  |  U and I Group PLC
Annual Report & Accounts 2019

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Single total ﬁgure of remuneration (audited)
The table below sets out the total remuneration receivable by each of the Directors who held ofﬁce for the 13-month period to 
31 March 2019 with a comparison to the previous ﬁnancial year:

Executive Directors

M S Weiner

R Upton2

M O Shepherd

Non-executive Directors

P W Williams

N H Thomlinson

B Bennett

L G Krige

R Kerslake6

S Morgan7

Fees and 
salary
£’000
406
375
286
350
352
325

130
120
64
60
45
42
59
55
56
26
–
– 

20191
2018
20191
2018
20191
2018

20191
2018
20191
2018
20191
2018
20191
2018
20191
2018
20191
2018

Beneﬁts3
£’000
20
18
16
19
21
19

Pension4
£’000
62
58
60
55
54
50

Annual  
bonus
£’000
81
218
86
206
70
194

DPP5
£’000
–
1,003
–
–
–
–

–
–
–
–
–
–
–
–
–
–
–
–

–
–
–
–
–
–
–
–
–
–
–
–

–
–
–
–
–
–
–
–
–
–
–
–

–
–
–
–
–
–
–
–
–
–
–
–

LTIP 
£’000
83
200
83
200
20
48

–
–
–
–
–
–
–
–
–
–
–
–

Total
£’000
652
1,872
5312
830
517
636

130
120
64
60
45
42
59
55
56
26
–
–

1  As a result of the change in the Company’s year-end, amounts shown for 2019 are in respect of a 13-month period whereas amounts shown for 2018 are in respect 

of a 12-month period.

2  As announced in July 2018, R Upton took a short sabbatical between 1 September 2018 and 31 December 2018. He continued to work for one day per week during 

the course of his sabbatical, and his salary and elements of his annual bonus for 2019 have been pro-rated to reﬂect his sabbatical.

3  Beneﬁts received during the year include cash in lieu of motor vehicle, subsidised gym membership and medical insurance.
4  Pension contributions received during the year include contributions to the Company’s approved scheme or cash supplements.
5  DPP payments for Directors ceased in the ﬁnancial year ending 28 February 2018 in accordance with the approved remuneration policy. The 2018 ﬁgure relates 

to awards on projects realised during the year. Awards on projects were subject to netting off.

6  R Kerslake became a Non-executive Director of the Company on 1 September 2017, and also became a member of the Audit and Risk Committee, Remuneration 

and Nomination Committees on this date. 

7  S Morgan became a Non-executive Director of the Company with effect 3 April 2019 and therefore received no remuneration for the period under review.

  Aggregate remuneration for the Executive Directors for the period ending 31 March 2019 totalled £1,334k, excluding cash in lieu of pension contributions and 

LTIP payments.

137  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
 
ANNUAL REMUNERATION REPORT
CONTINUED

Incentive out-turns (audited)
Annual bonus
The annual bonus structure operates using ﬁnancial and strategic/personal targets set at the beginning of each ﬁnancial period. 

The tables below provide details of ﬁnancial targets and our performance against them:

Financial targets – 60% of total bonus award
The ﬁnancial measures and targets were as follows:

NAV growth (30%)

NAV per share growth (including dividends)* 

Threshold 
performance 
(20% payout)
5% 

Maximum 
performance 
(100% 
payout)
12% 

NAV per  
share growth 
achieved for 
period ended 
31 Mar 2019
0.9%

% of actual 
payout for 
NAV growth 
(maximum 
30%)*
0

*  Payouts are calculated on a straight-line basis between threshold and maximum performance. For ‘target’ performance (50% of maximum), this is growth of 7.6% 

per annum.

Development and trading gains (30%)

Targets

Development and trading gains* 

 0% payout
42.75

50% payout
45.9

75% payout
47.5

100% payout
52.25

*  Payouts are calculated on a straight-line basis between performance points.

Actual performance 
and payout
% of actual 
payout for 
development 
and trading 
gains 
(maximum
30%)*
0.47

Development 
and trading 
gains for the 
period ended 
31 Mar 2019
42.85

138  |  U and I Group PLC
Annual Report & Accounts 2019

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Non-ﬁnancial targets – 40% of total bonus award
Personal objectives were set at the beginning of the ﬁnancial period which focused on both the delivery of strategic priorities for 
2018/19 and the longer term.

M. S. WEINER

R. UPTON

M. O. SHEPHERD

Reﬁning strategy
 – Major new project wins including 

CFNE, Arts Building, Newtown Works, 
White Heather Industrial Estate and 
3 investment assets – representing 
successful realisation of a strategy of 
focusing on ‘fewer, larger’ projects.

 – Roll-out of refreshed strategic 

organisation communications to 
ensure consistent messaging and 
alignment – linking strategy from the 
corporate level to day-to-day roles.
 – Monthly in-house strategy updates to 
U+I team to embed purpose, values 
and strategy into the business.
 – Reputation Benchmark exercise to 

consider external perceptions of U+I 
and its strategy.

Investor relations
 – New broking team fully integrated 

into the IR process. Improved analyst 
coverage as part of this process.

 – Signiﬁcant increased investor 

relations activity – hosting capital 
markets events as well as speaking 
at investor conferences.

Capital structures
 – Good progress against the strategic 

objective of seeking large scale 
capital partner(s) – Colony Capital 
joined the St James’s Gate bid team 
as an equity partner.

 – Building team to implement 

diversiﬁcation of the Company’s JV 
relationships.

Operating model
 – Shaping the senior leadership team 

towards best in class. Recent changes 
to the team expected to lead to 
further gains in accountability and 
efﬁciency in FY2020.

Engaged workforce
 – Good progress on initiatives to 

improve team chemistry including 
establishment of a Company Charity 
Committee.

 – Employee engagement review 

undertaken.

External and public affairs
 – Led the ‘PPP: The Reset’ campaign 
as the Company’s spokesperson.

New business origination
 – Directed new business strategy which 
led to a comprehensive re-structuring 
of the team and three new short-term 
opportunities being secured. 

 – Led the pitch on a signiﬁcant project 

including returning from sabbatical for 
two key presentations.

Asset business plans and project 
realisations
 – Introduction of a milestone project 
monitoring process as part of an 
improved management information 
system. These milestones now form 
the bedrock of individual asset 
business plans and internal project 
monitoring. 

 – Since January has taken an increasing 
role in directing the strategy for the 
Company’s major projects – Mayﬁeld, 
8 Albert Embankment and Morden 
Wharf.

 – Led CPO strategy in relation to 

Curzon Park.

 – Directed Preston Barracks residential 
land sale negotiations generating a 
proﬁt level in advance of forecast.

Public affairs programme
 – Completion of a programme of 

high-proﬁle speaking engagements. 
Principal spokesperson on all public 
affairs matters, including appearing at 
the London Local Plan Inquiry.

Operating model
 – Completion of ﬁrst stage of the 

Working Smarter project including 
the review and reﬁnement of the 
Company’s ‘Factory Floor’ and the 
organisational structure required to 
deliver the process.

 – Led the re-structuring of the marketing 
and communications teams leading to 
improved focus on project marketing 
over corporate brand. 

 – Initiated and authored a revised 

internal strategy review for the Board 
including management of external 
consultants.

Financing
 – Successful negotiation of £19.7m 

loan facility with Barclays to provide 
increased ﬂexibility and greater 
security to the Company’s funding 
lines.

 – Maintained all Company debt 

relationships to assist in substantial 
reﬁnancing discussions.

Financial control/process
 – Undertook ﬁnance function 

diagnostic to consider step change 
improvements to team process and 
infrastructure. 

 – Implemented ‘Project Bean’, an 

innovation initiative to improve the 
ﬁnance function and its integration 
with the regeneration team.

Investor relations
 – Achievement of increased 
engagement with analysts, 
shareholders and potential investors 
to raise the understanding of the 
U+I business model. 

 – Attended investor conferences 

focused on the PCB market with the 
aim to improve stock liquidity.
 – Increased responsibility as ﬁrst 

point of call for Investor Relations. 
Successful transition of Head of IR 
reporting line to Chief Financial 
Ofﬁcer.

Efﬁciency and cost effectiveness
 – Focus on delivering a continual 

decrease in net recurring 
overheads. Initiated a peer review 
of the treatment of certain internal 
costs and agreed a working 
framework with the auditors to 
capitalise elements of overhead 
to better reﬂect the Company’s 
operating model.

 – Identiﬁcation of further overhead 

savings to be targeted over the next 
ﬁnancial year.

Non-ﬁnancial element of
annual bonus as % of salary 

19.5

Non-ﬁnancial element of
annual bonus as % of salary 

22.5

Non-ﬁnancial element of
annual bonus as % of salary 

19.5

139  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
ANNUAL REMUNERATION REPORT
CONTINUED

Bonus opportunities for 2018/19 have been pro-rated to reﬂect the change in the Company’s year-end to 31 March 2019.

In light of both corporate and individual performance, the Committee determined the following bonus awards be made for the 
ﬁnancial period ended 31 March 2019:

Executive Director
M S Weiner
R Upton
M O Shepherd

Total award 
% of maximum
26.5
30.4
26.5

Total award 
% of salary
19.9
22.8
19.9

Total bonus 
award 
(£’000)
81
86
70

As announced in July 2018, R Upton took a short sabbatical between 1 September and 31 December 2018. The Committee 
took his sabbatical into account when determining his annual bonus and applied a pro-rata reduction where appropriate. The 
approach that the Committee took was to consider each objective. The Committee pro-rated the bonus for certain objectives. 
In the case of some ‘milestone’ objectives the Committee considered that it would not be appropriate to apply a pro-rata 
reduction. For example throughout his sabbatical R Upton led an important bid which would be a signiﬁcant development 
project for the Company, including returning from his sabbatical for two key presentations. The ﬁnancial element of the bonus 
was pro-rated in full. 

100% of any annual bonus awarded which is above target (50% of the maximum opportunity) will be paid in shares which the 
recipient must hold for at least two years. All annual bonus’ awarded to Executive Directors in 2019 were below target therefore 
no element of Executive Director bonus was paid in shares. 

Long-Term Incentive Plan (audited)
LTIP awards made in 2015
Awards were made under the LTIP in 2015 with the ﬁrst half of awards subject to the Company’s growth in NAV per share over 
the three-year performance period 1 March 2015 to 28 February 2018. Details of the NAV growth over the three-year 
performance period were provided in last year’s Annual Report on Remuneration. The second half of awards are subject to the 
Company’s growth in NAV per share over the four-year performance period 1 March 2015 to 31 March 2019. Details of the NAV 
growth over the four-year performance period are set out in the table below: 

Threshold
Maximum
Performance

NAVps % 
growth per 
annum
5
12
5.2

Vesting % of 
maximum
20
100
22.6

The Committee was satisﬁed that the risk underpin had been satisﬁed.

Two-thirds of the shares that vest in respect of performance to 31 March 2019 are subject to an additional holding period of 
one year.

LTIP awards made in 2016
Awards were made under the LTIP in 2016 with the ﬁrst half of awards subject to the Company’s growth in NAV per share over 
the three-year performance period 1 March 2016 to 31 March 2019. Details of the NAV growth over the three-year performance 
period are set out in the table below: 

Threshold
Maximum
Performance

NAVps % 
growth per 
annum
5
12
3.2

Vesting % of 
maximum
20
100
0

The second half of awards made in 2016 are subject to the Company’s growth in NAV per share over a four-year performance 
period 1 March 2016 to 31 March 2020. Details of the NAV growth performance will be disclosed next year following the end 
of the performance period.

140  |  U and I Group PLC
Annual Report & Accounts 2019

Payments made/awards granted during the year
Long-Term Incentive Plan (audited)
On 7 June 2018, awards were made under the Long-Term Incentive Plan as follows:

Executive Director
M S Weiner
R Upton
M O Shepherd

Type

Conditional 
share award

Number of 
shares
460,122
429,447
132,924

Face value
(% of salary)1
300
300
100

Performance
conditions2

End of 
performance
periods

% NAVps 
growth

28 Feb 2021/
29 Feb 2022

% vesting
at threshold
20%
20%
20%

1  The face value has been calculated based on the share price of 244.50 pence taken on 7 June 2018 as an average of the closing mid-market price from the 

preceding ﬁve days.

2  Awards are subject to U+I’s NAV per share growth (including dividends), 50% measured over a three-year period and 50% measured over a four-year period; 

see page 134 for further information.

Executive Directors’ shareholdings (audited)
Executive Directors are subject to a shareholding requirement of one half basic salary within two years of appointment, rising 
to an amount equivalent to two times basic salary for the Chief Executive Ofﬁcer and one and a half times basic salary for the 
Chief Development Ofﬁcer and Chief Financial Ofﬁcer. 50% of net vested shares will be retained until these guidelines are 
achieved. M S Weiner and R Upton have met their respective shareholding requirements; M O Shepherd will retain 50% of net 
vested shares until such time as he has reached his 150% shareholding guideline.

The interests of all the Directors (together with interests held by his or her connected persons), all of which were beneﬁcial, 
in the share capital of the Company, are:

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M S Weiner
R Upton
M O Shepherd

Non-executive Directors
P W Williams
N H Thomlinson
B Bennett
L G Krige
R Kerslake
S Morgan

Shares owned 
outright as at
31 March

20191,2
457,531
3,293,740
194,874

Shareholding 
as a % of 
salary3
228
1,762
112

Interest
in shares 
subject to 
performance
1,814,657
1,709,115
514,922

Interest in 
options 
subject
to continued
employment 
only
11,815
0
11,815

100,000
20,000
35,000
0
0
0

–
–
–
–
–
–

0
0
0
0
0
0

0
0
0
0
0
0

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1  Including shares held by connected persons.
2  There have been no changes in share interests held by Directors between 31 March 2019 and 21 May 2019, the date of signing this report.
3  Calculation derived from the market value of 187.20 pence per share and Directors’ salary as at close of market on 29 March 2019.

External directorships
M S Weiner is a trustee for the charity Jewish Care, he does not receive any fees for this role. R Upton is a Commissioner for 
English Heritage for which he receives a nominal fee of c.£7,000. M O Shepherd does not hold any external appointments at 
this time. 

141  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
 
ANNUAL REMUNERATION REPORT
CONTINUED

Historical Total Shareholder Return performance 
The graph below shows the Company’s TSR performance over the last ten ﬁnancial periods in-line with the disclosure 
regulations. TSR has been calculated as share price growth plus reinvested dividends and is shown against both the FTSE Real 
Estate Investment Trust Index and the FTSE Real Estate Investment Services Index. The Company is a constituent of the FTSE 
Real Estate Investment Services Index, but a number of constituents of the FTSE Real Estate Investment Trust Index are also 
considered as within the Company’s peer group.

TSR (10 years)

300

250

200

150

100

50

Dec
08

Dec
09

Dec
10

Feb
12

Feb
13

Feb
14

Feb
15

Feb
16

Feb
17

Feb
18

Mar
19

U and I
FTSE Real Estate Investment Trust Index
FTSE Real Estate Investment Services Index

Chief Executive Ofﬁcer remuneration for previous ten years 
The table below shows the total remuneration ﬁgure for the Chief Executive Ofﬁcer for the same ten-year period as the TSR 
chart above. The annual bonus and LTIP percentages show the payout for each year as a percentage of the maximum 
opportunity.

2009

2010

20121

2013

2014

2015

Single total ﬁgure of remuneration (£’000)
Annual bonus (% of maximum)
LTIP vesting (% of maximum)

767
80
–

865
63
–

714
21
–

487
0
–

882 1,002
86.7
–

67
–

2016
M S
Weiner3

M H
Marx2
257 1,633 1,723 1,872
77.4
38.1

26.8
–

59
18

–
18

 652
26.5
11.3

2017

2018

20194

1  As a result of the change in the Company’s year-end, amounts shown for 2012 are in respect of a 14-month period ending 29 February 2012.
2  M H Marx’s ﬁgure relates to both the time he was Chief Executive Ofﬁcer of the Company from 1 March 2015 to 14 July 2015, and from 15 July 2015 to 29 February 

2016 when he received a basic fee as a Non-executive Director.

3  M S Weiner’s ﬁgure relates to both the time he was a Executive Director of the Company from 1 March 2015 to 14 July 2015, and from 15 July 2015 to 29 February 

2016 when he was Chief Executive Ofﬁcer of the Company.

4  As a result of the change in the Company’s year-end, amounts shown for 2019 are in respect of a 13-month period ending 31 March 2019.

Percentage change in Chief Executive Ofﬁcer remuneration 
The table below sets out in relation to salary, taxable beneﬁts and annual bonus, the percentage change in remuneration 
in relation to the Chief Executive Ofﬁcer compared to the wider workforce. 

Chief 
Executive 
% change
0
1.4
-63

Wider 
workforce
% change
9.3
-15
-39

Salary
Taxable beneﬁts
Annual bonus

142  |  U and I Group PLC
Annual Report & Accounts 2019

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Relative importance of spend on pay 
The following table sets out the overall expenditure on pay and total dividends and share buybacks paid in the year. 

Dividends1
Supplemental dividend1,2
Overall expenditure on pay3

2019
7,401
5,114
11,730

2018
7,382
15,033
14,163

% change
0.25
-66.0
-17.2

1  These ﬁgures have been extracted from Note 7 to the Consolidated ﬁnancial statements on page 187.
2  A supplemental dividend of 12.0 pence per share, amounting to £15,033,000 for 2018, was declared post 2018 year end, and therefore not deducted from net 

assets in 2018. A supplemental dividend of 4.1 pence per share, amounting to £5,114,000 for 2019, was declared post 2019 year end, and therefore not deducted 
from the net assets in 2019.

3  These ﬁgures have been extracted from Note 4 to the Consolidated ﬁnancial statements on page 184.

Role and constitution of the Committee
During the year the Committee reviewed the terms of reference and made a number of changes to account for the updated 
2018 UK Corporate Governance Code. The Committee’s principal roles have been expanded so that in addition to the Executive 
Directors the Committee is responsible for determining the remuneration for members of the senior management. The 
Committee’s full terms of reference are set out on the Company’s website www.uandiplc.com and are available on request from 
the Company Secretary.

Wider workforce remuneration 
The success of the projects we deliver relies in turn on our ability to harness the intelligence, imagination and audacity of our 
people. These values underpin everything we do, and our goal is to nurture them by providing a culture where people are proud 
to work for us. 

During 2019/20 the Committee has widened our scope so that we are responsible for reviewing wider workforce remuneration 
in-line with the updated 2018 UK Corporate Governance Code.

Advisors 
The Committee sought professional advice from external remuneration consultants Deloitte LLP (who are members of the 
Remuneration Consultants Group and, as such, voluntarily operate under their code of conduct in relation to executive 
remuneration consulting). 

Deloitte was appointed as advisor to the Committee following a full tender process. The Committee is satisﬁed that the advice 
it receives is objective and independent. Deloitte’s fees for providing advice to the Remuneration Committee amounted to 
£26,800. Representatives of Deloitte LLP attended three meetings of the Committee by invitation. Fees are determined on the 
basis of time spent and work and materials. Deloitte LLP currently also provided services to the Company in relation to planning 
and development real estate advice.

M S Weiner, Chief Executive Ofﬁcer, provided advice in respect of the remuneration of the other Executive Directors but was 
not in attendance when his own remuneration was discussed. 

The Remuneration Committee as constituted by the Board
The Committee met four times in the year under review.

Committee members
N H Thomlinson (Chairman)
P W Williams
L Krige
R Kerslake
S Morgan2

Joined the 
Committee on
03.01.12
04.01.16
14.07.16
01.10.17
03.04.19

Considered 
independent 
Non-executive 
Director
Yes
–1
Yes
Yes
Yes

Number of 
meetings 
attended/
number of 
meetings 
possible
4
4
4
4
–

% 
attendance
100
100
100
100
–

1  Chairman, independent on appointment.
2  S Morgan became a member of the Committee on 3 April 2019 and, as such, attended no meetings in the period to 31 March 2019. 

143  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
ANNUAL REMUNERATION REPORT
CONTINUED

Service contracts – Executive Directors
The dates of the current contracts in place for the Executive Directors are as follows:

Executive Director
M S Weiner
R Upton
M O Shepherd

Date of contract
23 July 2015
19 May 2014
23 July 2015

The Executive Directors’ service contracts do not specify an expiry date and may be terminated upon 12 months’ notice 
by either Director or the Company.

Remuneration Committee evaluation
Following the 2019 Board evaluation process, the effectiveness of the Committee was reviewed and the Committee was 
considered to be operating effectively. No member has any personal ﬁnancial interest in the matters to be decided.

Statement of voting at the last Annual General Meeting
The Company remains committed to ongoing shareholder dialogue and takes an active interest in voting outcomes. The 
following table sets out the actual voting in respect of the advisory vote to approve the Annual Report on Remuneration at the 
Company’s Annual General Meeting on 5 July 2018 as well as the binding vote to approve the Remuneration Policy at the 
Company’s Annual General Meeting on 11 July 2017:

Approve Remuneration Report (2018 AGM)
Approve Remuneration Policy (2017 AGM)

Votes for
93,463,542
92,018,752

% of vote
91.22
95.34

Votes  

against
8,999,825
401,030

% of vote
8.78
4.66

Votes  

withheld
7,528
1,690,512

Incentive awards outstanding at year-end (audited)
Details of incentive awards outstanding at the year-end are shown in the tables below:

Long-Term Incentive Plan 

M S Weiner

R Upton

M O Shepherd

Market  
price at date 
of grant
Pence per 
share
273.40
191.10
194.20
244.50
273.40
191.10
194.20
244.50
273.40
191.10
194.20
244.50

28 February 
2018

Number of  

shares
373,079
588,697
579,299
–
373,079
549,450
540,679
–
89,155
170,068
167,353
–

Date of grant
05.06.15
09.06.16
30.05.17
07.06.18
05.06.15
09.06.16
30.05.17
07.06.18
05.06.15
09.06.16
30.05.17
07.06.18

Granted
–
–
–
460,122
–
–
–
429,447
–
–
–
132,924

Dividend 
Equivalent 
shares 
granted
11,560

11,560

2,762

Lapsed
115,468
–
–
–
115,468
–
–
–
27,593
–
–
–

Exercised
82,631
–
–
–
82,631
–
–
–
19,746
–
–
–

31 March 
2019
Number of 
shares
186,540
588,697
579,299
460,122
186,540
549,450
540,679
429,447
44,578
170,068
167,353
132,924

Final  

vesting date
05.06.2019
09.06.19/20
30.05.20/21
07.06.21/22
05.06.2019
09.06.19/20
30.05.20/21
07.06.21/22
05.06.2019
09.06.19/20
30.05.20/21
07.06.21/22

The new LTIP introduced for the year beginning 1 March 2015 replaced the previous Performance Share Plan.

Save as You Earn (SAYE) (audited)

28 February 
2018
Number of 
shares

11,815

11,815

M S Weiner
2017
M O Shepherd
2017

Granted

Lapsed

Exercised

31 March 
2019
Number of 
shares

Exercise
price pence
per share

Market price
at exercise
pence per
share

Gain on 
exercise
£’000

Date from 
which 
exercisable

Expiry
date

–

–

–

–

–

–

11,815

152.00

11,815

152.00

–

–

–

–

01.02.21

31.07.21

01.02.21

31.07.21

These options are not subject to performance conditions. The options may be exercised after three years at a price not less than 
80% of the market value of the shares at the time of invitation. No options were exercised during the year.

144  |  U and I Group PLC
Annual Report & Accounts 2019

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REMUNERATION POLICY

An updated Remuneration Policy (the Policy) was presented and approved by shareholders at the 2017 AGM and will operate 
until the 2020 AGM. Since no changes to the Policy are proposed for the year ahead, this part of the report will not be subject 
to a shareholder vote at our 2019 AGM. We have included those changes to the Policy approved at the 2017 AGM and the 
policy tables for Executive Directors and Non-executive Directors below for reference. The full Policy can be found on our 
website at uandiplc.com/investors.

Changes to the application of the Remuneration Policy effective following the 2017 AGM 
The key changes between the Policy and the policy which was approved by shareholders at our 2014 AGM are as follows:
 – Extending the holding period that applies to our LTIP awards such that the combined performance and holding period is ﬁve 

years in total for the entire award for awards from 1 March 2017. 

 – From 2016/17 we changed our approach to the annual bonus, moving to a structure with ﬁnancial and strategic/personal 

targets set at the beginning of each year. To reﬂect this change in operation, we introduced a minimum weighting for ﬁnancial 
measures of 50% for the annual bonus. 

 – We introduced an additional shareholding guideline requiring Executive Directors to retain 50% of net vested shares from the 

LTIP until they build up shareholdings of 200% of salary for the Chief Executive Ofﬁcer and 150% of salary for the Chief 
Development Ofﬁcer and Chief Financial Ofﬁcer.

Main components of the Remuneration Policy
Policy table for Executive Directors

PERFORMANCE 
MEASURES

None.

PURPOSE OF 
COMPONENT AND 
LINK TO STRATEGY

Salary
Core element of 
remuneration set at 
a level to attract 
and retain 
individuals of the 
calibre required to 
shape and execute 
the Company’s 
strategy.

OPERATION

MAXIMUM

Contractual ﬁxed cash amount.

Typically, salary levels are reviewed on an 
annual basis. The Committee takes into 
account a number of factors when setting 
base salary, including:
 – Size and scope of the role;
 – Skills and experience of the individual;
 – Performance of the Company and 

individual;

 – Appropriate market data; and
 – Pay and conditions elsewhere in the 

Company.

Salary increases may be 
applied taking into account 
the factors outlined in 
this table. 

During review, consideration 
will also be given to increases 
applied to the wider employee 
population. In certain 
circumstances, such as an 
increase in the size and scope 
of the role or increased 
experience where an 
individual has been hired on 
a lower salary initially, higher 
increases may be given.

There is no maximum salary 
opportunity.

145  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
REMUNERATION POLICY
CONTINUED

PURPOSE OF 
COMPONENT AND 
LINK TO STRATEGY

Beneﬁts
To provide 
Executive Directors 
with market 
competitive beneﬁts 
consistent with 
the role.

Annual bonus
Incentivises and 
rewards Executive 
Directors for the 
successful delivery 
of ﬁnancial and 
strategic objectives 
on an annual basis.

OPERATION

MAXIMUM

The cost of beneﬁts may vary 
from year to year depending 
on an individual’s 
circumstances and the varying 
cost of beneﬁts premiums. 

There is no maximum beneﬁts 
value.

150% of salary per annum.

Executive Directors, excluding 
the Chief Executive, will have 
a lower maximum opportunity 
than the percentage stated 
above. 

For the ﬁnancial year ending 
31 March 2020, Executive 
Directors, including the CEO, 
will have a maximum of 75% 
of salary.

Executive Directors currently receive the 
following beneﬁts:
 – Cash in lieu of motor vehicle;
 – Private medical insurance;
 – Income protection insurance; and
 – Life assurance.

Other beneﬁts that are consistent with the 
role may be provided if the Committee 
considers it appropriate. Payments may be 
made to Executive Directors in lieu of any 
unutilised holiday allowance. The 
Committee may permit additional holiday 
in lieu of remuneration.

Relocation and expatriate beneﬁts may also 
be provided, if an existing or new Executive 
Director is required to relocate.

The Executive Directors may participate in 
any all employee share plans adopted by the 
Company on the same basis as other 
employees.

Payments are based on performance in the 
relevant ﬁnancial year.

Payments up to 50% of the maximum 
opportunity (‘Target’ performance) are 
made in cash.

Any bonus above 50% of the maximum 
opportunity will be paid in shares which 
the Director is expected to hold for at least 
two years.

Clawback and/or malus provisions may be 
applied at the discretion of the Committee 
if an exceptional event occurs, such as a 
material misstatement of results, serious 
misconduct or an error/material 
misstatement resulting in overpayment.

Malus provisions may also be applied in the 
event of serious reputational damage to the 
Company or a material failure of risk 
management. 

PERFORMANCE 
MEASURES

None.

The annual bonus is 
based on a range of 
ﬁnancial, strategic and 
individual measures set 
by the Committee at 
the beginning of each 
year. The weightings 
will also be determined 
annually to ensure 
alignment with the 
Company’s strategic 
priorities. At least 50% 
of the bonus will be 
based on ﬁnancial 
measures.

The Committee reviews 
the basis of performance 
measurement under 
the annual bonus from 
time to time and may 
review and amend the 
measures as it 
considers appropriate.

50% of the maximum 
bonus opportunity will 
be payable for ‘Target’ 
performance.

146  |  U and I Group PLC
Annual Report & Accounts 2019

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PERFORMANCE 
MEASURES

The primary 
performance measure 
will be net asset value 
per share growth 
(including dividends). 
No less than 50% of an 
award will be based on 
this measure. The 
Committee retains the 
ﬂexibility to introduce 
additional measures.

For threshold levels of 
performance, no more 
than 25% of the award 
vests with 100% of the 
award vesting for 
maximum performance. 

OPERATION

MAXIMUM

Awards of nil-cost options or conditional 
shares.

300% of salary per annum.

PURPOSE OF 
COMPONENT AND 
LINK TO STRATEGY

Long-Term 
Incentive Plan 
(LTIP)
Incentivises and 
rewards Executive 
Directors for 
delivery of the 
Company’s 
strategic plan of 
building shareholder 
value.

Retirement 
beneﬁts
To provide 
Executive Directors 
with retirement 
beneﬁts consistent 
with the role.

Shareholding 
guidelines
To align Executive 
Directors with the 
shareholder 
experience.

The awards vest subject to the achievement 
of performance targets set by the 
Committee. 50% of the award is based on 
performance measured over three years, 
with the remaining 50% based on 
performance measured over four years.

Following vesting, the awards will normally 
be subject to an additional holding period 
of up to two years such that the combined 
performance and holding period will not be 
less than ﬁve years in total.

Dividend equivalents may be paid on vested 
awards. 

Clawback and/or malus provisions may be 
applied at the discretion of the Committee 
if an exceptional event occurs, such as 
material misstatement of results, serious 
misconduct or an error/material 
misstatement resulting in overpayment.

Malus provisions may also be applied in the 
event of serious reputational damage to the 
Company or a material failure of risk 
management.

Deﬁned contribution pension arrangements 
are provided.

Pension beneﬁts are provided through a 
Group Personal Pension Plan, non-
pensionable cash supplement or 
contribution to a Personal Pension 
arrangement.

The Company operates shareholding 
guidelines for Executive Directors.

They are required to build a shareholding 
of 50% of salary within two years of 
appointment and 100% of salary within four 
years of appointment. Thereafter, they will 
be required to retain 50% of net vested 
shares from the LTIP until they build 
shareholdings of 200% of salary for the 
Chief Executive Ofﬁcer and 150% of salary 
for the Chief Development Ofﬁcer and 
Chief Financial Ofﬁcer.

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17.5% of salary per annum.

None.

Not applicable.

Not applicable.

Legacy arrangements and transition
Prior to the Policy being approved in 2014, the Committee undertook a review of incentive arrangements and the LTIP replaced 
a number of plans. While no new awards will be made under these plans, detail has been included on the Development Proﬁt 
Plan as there are awards outstanding. Any subsisting awards for legacy plans will continue in accordance with the relevant 
plan rules. 

147  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
REMUNERATION POLICY
CONTINUED

PURPOSE OF 
COMPONENT AND 
LINK TO STRATEGY

Development 
Proﬁt Plan (DPP)
Incentivises and 
rewards Executive 
Directors for the 
performance of 
their portfolio 
of projects.

OPERATION

MAXIMUM

PERFORMANCE
MEASURES

No awards have been made to 
Executive Directors for projects which 
commence following 1 March 2015.

Awards may pay out once a project 
makes a realised proﬁt. No payments 
will be made in respect of proﬁts 
realised after 1 March 2018.

50% of the payment is made in cash or 
shares at the time proﬁt is realised.

The remaining 50% is deferred until the 
end of the ﬁnancial year and paid in 
cash or shares at this point. 

The maximum aggregate pool 
available for distribution to 
Executive Directors and the 
wider team is 10% of the 
realised proﬁt above a hurdle 
for each development 
project.

Payments are only made 
under this plan once proﬁt 
has been realised on a 
development above a 
threshold return (a notional 
cost of equity).

Losses attributable to other 
projects in which a Director 
has been made an award are 
also taken into account when 
calculating payments to 
ensure that participants are 
incentivised to mitigate 
losses while maximising 
project proﬁts. This 
calculation is at the 
Committee’s discretion and 
will not apply in respect of 
certain legacy awards and 
projects. Where unrealised 
losses are deducted in the 
calculation but a proﬁt is 
subsequently recognised 
a balancing payment may 
be made.

Policy table for Non-executive Directors

COMPONENT

THE COMPANY’S APPROACH

Chairman fees

Comprises an all-inclusive fee for all Board and Committee responsibilities.

Non-executive 
Director fees

Determined by the Remuneration Committee and approved by the Board.

Comprises a basic fee in respect of their Board duties.

Further fees may be paid in respect of additional Board or Committee duties.

Recommended by the Chairman and Chief Executive and approved by the Board.

Approved by the Board and signed on its behalf by:

Nick Thomlinson, 
Chairman of the Remuneration Committee
21 May 2019

148  |  U and I Group PLC
Annual Report & Accounts 2019

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DIRECTORS’ REPORT

The Directors present their 
report and the audited 
Consolidated ﬁnancial 
statements for the ﬁnancial 
period ended 31 March 2019.

This report contains 
forward-looking statements. 
These statements are not 
guarantees of future 
performance; rather, they are 
based on current views and 
assumptions and involve 
known and unknown risks, 
uncertainties and other 
factors that may cause actual 
results to differ from any 
future results or developments 
expressed or implied from the 
forward-looking statements.

Principal activities
The principal activity of the 
Company is that of a holding 
company. The principal 
activities of the Group during 
the period were property 
investment and development, 
investment and trading.

Incorporation
U and I Group PLC is 
incorporated in Great Britain 
and registered in England and 
Wales, registration number 
1528784.

Business review and future 
developments
A review of the Group’s 
operations, the Company’s 
business model, the current 
state of the business and 
future prospects, including 
ﬁnancial and non-ﬁnancial 
key performance indicators 
and principal risks and 
uncertainties, is contained 
within the Strategic Report, 
and should be read in 
conjunction with this report. 
Further details of the ﬁnancial 
and non-ﬁnancial key 
performance indicators, 
the principal risks, and the 
information which comprises 
the business review as 
required by Section 417(1) of 
the Companies Act 2006 may 
be found in the Strategic 
Report on pages 1 to 93.

149  |  U and I Group PLC
Annual Report & Accounts 2019

Results and dividends
The proﬁt for the ﬁnancial 
period amounted to 
£6,320,000 (2018: £40,256,000 
proﬁt). An interim Ordinary 
dividend of £3,010,000 
representing 2.4 pence per 
Ordinary share was paid 
on 30 November 2018 
(24 November 2017: 
£3,003,000 representing 
2.4 pence per Ordinary 
share). The Board 
recommends a ﬁnal Ordinary 
dividend of 3.5 pence per 
Ordinary share amounting 
to £4,366,000 payable on 
6 September 2019 to 
shareholders on the register 
at 9 August 2019 (17 August 
2018: £4,400,000 representing 
3.50 pence per Ordinary 
share). A further supplemental 
dividend of 4.1 pence per 
Ordinary share was 
announced to the market on 
22 May 2019 amounting to 
£5,114,000 payable on 12 July 
2019 to shareholders on the 
register at 7 June 2019. 
Subject to shareholder 
approval, this makes a total 
dividend declared of 
10 pence per Ordinary share 
for the ﬁnancial period (2018: 
17.9 pence per Ordinary 
share). Further information on 
the Company’s dividend 
policy can be found in note 7 
to the ﬁnancial statements.

Group structure
Details of the Group’s 
subsidiary undertakings are 
disclosed in note 41 to the 
Consolidated ﬁnancial 
statements on pages 223 
to 227.

Operations outside the UK
The Group currently operates 
or has subsidiaries, 
associates or joint ventures 
which are located in The 
Netherlands, Luxembourg 
and Ireland.

Share capital
The Company’s issued share 
capital at 31 March 2019 
consisted of 125,431,713 
Ordinary shares of 50 pence 
each. At the date of this 
report, 125,431,713 Ordinary 
shares of 50 pence each have 
been issued, are fully paid up 
and are quoted on the 

London Stock Exchange. 
The Company’s share capital 
represents a single class of 
shares, with all shares ranking 
equally and fully paid. Details 
of the share capital are set 
out in note 19 to the 
Consolidated ﬁnancial 
statements on pages 208 
to 210.

The rights and obligations 
attaching to the shares are 
speciﬁed in the Company’s 
Articles of Association, or 
alternatively may be governed 
by statute. There are no 
restrictions on the transfer of 
shares in the Company other 
than those speciﬁed by law 
or regulation. There are no 
restrictions on voting rights 
other than as speciﬁed by the 
Articles of Association.

Three resolutions relating to 
share capital will be proposed 
as Special Business at the 
forthcoming Annual General 
Meeting. The full text of the 
resolutions can be found in 
the Notice of the Annual 
General Meeting. At a 
General Meeting of the 
Company, every member has 
one vote on a show of hands 
and, on a poll, one vote for 
each share held. The Notice 
of a General Meeting 
speciﬁes deadlines for 
exercising voting rights, 
either by proxy or being 
present in person, in relation 
to the resolutions proposed 
at the General Meeting.

Purchase of the Company’s 
shares
At the Annual General 
Meeting held on 5 July 2018, 
members authorised the 
Company to make market 
purchases of up to 
12,534,976 of its own 
Ordinary shares of 50 pence 
each. That authority expires 
at the forthcoming Annual 
General Meeting of the 
Company on 4 September 
2019 when a resolution will 
be put to shareholders to 
renew it so as to allow 
purchases of up to a 
maximum of no more than 
10% of the Company’s 
issued share capital. No 
shares in the Company have 

been purchased by the 
Company in the period from 
5 July 2018 (the date the 
current authority was granted) 
to the date of this report. 

Change of control
The Group has entered into 
signiﬁcant agreements with 
its commercial partners, 
which contain change of 
control clauses and which 
may give rise to termination 
or renegotiation in that event. 
If enforced, the Company 
may be deprived of potential 
future earning capacity from 
such schemes. The Company 
is party to a number of 
committed bank facilities 
which, upon a change of 
control, are terminable at the 
banks’ discretion. In addition, 
under such circumstances, 
the Company’s share option 
schemes would normally 
vest or become exercisable 
subject to the satisfaction of 
the performance conditions.

Takeover Directive 
Details of the required 
disclosure under the Takeover 
Directive can be found in this 
Directors’ Report and also in 
the Remuneration Report on 
pages 131 to 148 and are 
incorporated herein by 
cross-reference.

Corporate governance
The Company’s statement 
on corporate governance can 
be found in the Corporate 
Governance Report on page 
102 of the Annual Report. 
The Corporate Governance 
Report forms part of this 
report and is incorporated 
into it by cross-reference.

Share option schemes
On 19 December 2017, a grant 
was made under the Save As 
You Earn Option Plan 2005 for 
a total of 339,666 options over 
shares at 152 pence per share 
to 61 members of staff. All 
employees of the Company 
are eligible to participate in the 
Save As You Earn Option Plan. 
Further details of the share 
option schemes are contained 
in note 19 to the Consolidated 
ﬁnancial statements.

 
 
 
DIRECTORS’ REPORT
CONTINUED

Employee Beneﬁt Trust
VG Corporate Trustee 
Limited acts as trustee of the 
U and I Group PLC’s 
Employee Beneﬁt Trust (EBT). 
The EBT purchases U and I 
Group PLC ordinary shares in 
the market from time to time 
for the beneﬁt of satisfying 
outstanding employee 
awards under the Company’s 
LTIP. The EBT purchased a 
total of 946,134 shares in the 
market during the period 
under review. 118,792 shares 
were transferred to the EBT 
by the Company out of 
treasury during the period 
under review for the purpose 
of satisfying LTIP awards. The 
EBT released 374,143 shares 
during the year to satisfy 
vested LTIP awards. At 
31 March 2019 the EBT held 
690,783 U and I Group PLC 
shares in trust. The trustees 
of the EBT may exercise all 
rights attached to the 
Company’s Ordinary shares 
in accordance with their 
ﬁduciary duties other than 
as speciﬁcally restricted in 
the documents which govern 
the employee LTIP. Further 
details regarding the EBT, and 
of shares issued pursuant to 
U and I Group PLC’s LTIP 
during the year are set out in 
note 19 to the ﬁnancial 
statements. 

Waiver of dividends
A dividend waiver is in place 
from VG Corporate Trustee 
Limited acting as trustee of 
the U and I Group PLC’s 

Employee Beneﬁt Trust, in 
respect of all dividends, and 
future dividends, payable by 
U+I on shares which it holds 
in trust. 

Directors
The Directors serving during 
the period and up to the date 
of signing the Group ﬁnancial 
statements are shown in 
Table 1 below.

All Directors will retire at the 
2019 Annual General Meeting 
and, being eligible, will offer 
themselves for election or 
re-election; see page 151. 
The Directors are voluntarily 
offering themselves for 
re-election as a matter of 
best practice in accordance 
with the UK Corporate 
Governance Code. Following 
the performance evaluation 
of the Board, all Directors 
were judged to have made a 
signiﬁcant contribution to the 
Board’s deliberations, 
reﬂecting their commitment 
to the role. The rules that the 
Company has governing the 
appointment and replacement 
of Directors are contained in 
its Articles of Association.

Conﬂicts of interest
Under the Companies Act 
2006, a Director must avoid 
a situation where he or she 
has, or can have, a direct or 
indirect interest that conﬂicts, 
or possibly may conﬂict, with 
the Company’s interests. 
The Directors are required to 
notify the Board as soon as 

Table 1

P Williams
M Weiner
R Upton
M Shepherd
N Thomlinson
B Bennett
L Krige
R Kerslake
S Morgan

Chairman
Chief Executive Ofﬁcer
Chief Development Ofﬁcer
Chief Financial Ofﬁcer
Independent Non-executive Director
Non-executive Director
Independent Non-executive Director 
Independent Non-executive Director 
Independent Non-executive Director 
(appointed 3 April 2019)

Biographical details of the Directors are shown on pages 99 
to 101.

they become aware of any 
actual or potential conﬂicts 
of interest with their duties 
to the Company, or of any 
material changes in any 
existing actual or potential 
conﬂicts that may have been 
authorised by the Board. 
No signiﬁcant conﬂicts of 
interest arose during the 
period under review. 

Directors’ service contracts 
and interests in the 
Company’s shares
The details of Directors’ 
service contracts and the 
interests in the shares of the 
Company of the Directors 
who were in ofﬁce as at 
31 March 2019 are disclosed 
in the Remuneration Policy 
and Remuneration Report on 
pages 131 to 148.

None of the Directors had 
any material interest in any 
contract that was signiﬁcant 
in relation to the Group’s 
business at any time during 
the period, other than a 
service contract, and as 
disclosed in the 
Remuneration Report.

Related party transactions
Related party transactions 
between the Directors and 
the Company are set out in 
note 25 to the Consolidated 
ﬁnancial statements.

Directors’ and Ofﬁcers’ 
liability insurance
Article 153 of the Company’s 
Articles of Association 
provides, among other 
things, that, insofar as 
permitted by law, every 
Director shall be indemniﬁed 
by the Company against all 
costs, charges, expenses, 
losses or liabilities incurred in 
the execution and discharge 
of the Directors’ duties, 
power or ofﬁce. The 
Company maintains, at its 
expense, a Directors’ and 
Ofﬁcers’ liability insurance 
policy at an adequate level 
which is reviewed annually. 
This insurance policy does 
not provide cover where a 
Director or Ofﬁcer is proved 
to have acted fraudulently 
or dishonestly.

This third-party indemnity 
insurance was in force during 
the ﬁnancial period and also 
at the date of approval of the 
ﬁnancial statements.

Articles of Association
The Articles of Association 
may be amended by a 
Special Resolution of the 
shareholders.

Annual General Meeting
The Company’s AGM 
provides an opportunity for 
the Board to respond to 
shareholders’ questions. 
The information necessary 
for informed participation is 
made available with as much 
notice as possible. Directors 
are introduced to shareholders 
at the AGM, including the 
identiﬁcation of Non-
executive Directors and 
Committee Chairmen. More 
information regarding the 
2019 AGM, including the 
resolutions being put to the 
meeting, can be found on 
pages 150 to 153. The 
Company’s website 
(uandiplc.com) is updated 
at the same time as the 
Regulatory Information 
Service, to provide additional 
information dissemination for 
shareholders. Shareholders 
are also invited to subscribe 
to the Company’s email news 
alert service on the 
Company’s website.

The results of the voting at 
the 2018 AGM are shown in 
Table 2 on page 151. 

The Annual General Meeting 
will be held on 4 September 
2019 at 12 noon at 7A Howick 
Place, London SW1P 1DZ.

At the Annual General 
Meeting, the following 
resolutions will be proposed: 

Ordinary Resolution 1 – 
Report and Accounts
The Directors will present the 
ﬁnancial statements and 
Reports of the Directors and 
Auditors for the ﬁnancial 
period ended 31 March 2019.

150  |  U and I Group PLC
Annual Report & Accounts 2019

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Resolution 2 – To approve 
the Directors’ 
Remuneration Report 
In accordance with the 
Directors’ remuneration 
reporting regime as set out in 
Schedule 8 to the Large and 
Medium-sized Companies 
and Groups (Accounts and 
Reports) Regulations 2008 
(as amended), the 
Company’s 2018 Directors’ 
Remuneration Report 
comprises the Remuneration 
Committee Chairman’s 
Annual Statement, the Annual 
Report on Remuneration 
(the Annual Remuneration 
Report), and a summary of 
the Directors’ Remuneration 
Policy (the Policy).

The Directors’ Remuneration 
Policy was approved by 
shareholders at the 2017 
Annual General Meeting 
and took immediate effect. 
The Policy is subject to a 
shareholder vote at least 
once every three years and, 
subject to any proposed 
changes being required, 
will next be laid before 
shareholders for approval at 
the Annual General Meeting 
in 2020. The Company is not 
able to make remuneration 
or loss of ofﬁce payments to 
a current or past Director, 
unless the payment is 
consistent with the approved 
Policy, or has been otherwise 
approved by shareholders. 

Resolution 2 seeks 
shareholder approval for the 
Annual Remuneration Report. 
This is set out on pages 135 
to 144 of the Annual Report 
and sets out details on how 
our Directors were paid in 
the ﬁnancial period ended 
31 March 2019, and how their 
pay will be structured in the 
ﬁnancial period ending 
31 March 2020. The Annual 
Remuneration Report will be 
prepared on an annual basis 
and is subject to an advisory 
shareholder vote.

Ordinary Resolutions 3 to 
11 – Election and Re-
election of Directors
In line with the provisions of 
the Company’s Articles of 
Association, Professor Sadie 
Morgan, who was appointed 
by the Board since the date 
of the last Annual General 
Meeting, will retire and 
submit herself for election 
by shareholders. Details 
of Professor Morgan’s 
background and experience 
can be found on page 101. 

The Directors seek to maintain 
the highest standards of 
corporate governance and, 
in accordance with the 
recommendations of the UK 
Corporate Governance 
Code, those Directors 
elected or re-elected at the 
2018 Annual General Meeting 
will voluntarily retire and 
those wishing to serve again 
shall submit themselves for 

re-election by the 
shareholders at the 2019 
Annual General Meeting. 
The Chairman is satisﬁed 
that, following individual 
formal performance 
evaluations, the performance 
of the Directors standing for 
re-election continues to be 
effective and demonstrates 
commitment to the role. 
The Nomination Committee 
has considered each of the 
Non-executive Directors 
seeking re-election and 
concluded that their 
collective background, skills, 
experience, independence 
and knowledge of the 
Company enables the Board 
and Committees to discharge 
their respective duties and 
responsibilities effectively. 
The workings of the Board 
and Committees are more 
particularly detailed in the 
Corporate Governance 
section on pages 94 to 148. 
Biographical details of all the 
Directors appear on pages 99 
to 101 of the Annual Report.

Ordinary Resolution 12 – 
Declaration of ﬁnal 
dividend
A ﬁnal dividend can only be 
paid after the shareholders 
at a General Meeting have 
approved it. A ﬁnal dividend 
of 3.5 pence per Ordinary 
share is recommended by 
the Directors for payment 
to shareholders who are on 
the register at the close of 
business on 9 August 2019.

Ordinary Resolutions 13 
and 14 – Re-appointment 
and remuneration of 
auditors
Resolutions 13 and 14 
propose the re-appointment 
of PwC as auditors of the 
Company and authorise the 
Directors to set their 
remuneration.

Special Resolution 15 – 
Authority to purchase own 
shares
The Company is seeking 
authority to purchase up to 
10% of the Company’s 
issued Ordinary share capital 
at, or between, the minimum 
and maximum prices 
speciﬁed in this Resolution. 
This power would only be 
used after careful 
consideration by the 
Directors, having taken into 
account market conditions 
prevailing at that time, the 
investment needs of the 
Company, its opportunity 
for expansion and its overall 
ﬁnancial position. The 
Directors have discussed the 
possibility of making market 
purchases of the Company’s 
shares, and, should they 
believe such action would 
be in the best interests of 
shareholders and would 
enhance net assets or 
earnings per share, would 
consider exercising their 
authority during the period. 
As at 21 May 2019 (being the 
latest practicable date prior 
to publication of the Notice 

Table 2: Results of the 2018 Annual General Meeting

Resolution
1
2
3 to 10
11
12
13
14
15
16
17
18

Receive Annual Report and Accounts
Remuneration Report
Appointment of Directors
Declare ﬁnal dividend
Appointment of Auditor
Auditor’s remuneration
Authority to purchase own shares
Authority to allot shares
Disapplication of pre-emption rights 
Meetings on 14 days’ notice
Political donations

1  Includes those votes for which discretion was given to the Chairman
2  Does not include votes withheld.

151  |  U and I Group PLC
Annual Report & Accounts 2019

For
% of votes

cast1,2
99.94%
91.22%

Against
% of votes
cast2
0.06%
8.78%
79.32–99.95% 0.05%–20.68%
0
0.09
0.05
0.09
0.17
0.13
0.91
0.12

100
99.91
99.95
99.91
99.83
99.87
99.09
99.88

 
 
 
DIRECTORS’ REPORT
CONTINUED

of Annual General Meeting), 
the Company has an 
unexpired authority to 
repurchase 12,534,976 
Ordinary shares of which 
12,534,976 Ordinary shares 
remain outstanding.

As at 21 May 2019 (being the 
latest practicable date prior 
to publication of the Notice 
of the Annual General 
Meeting), the total number 
of options to subscribe for 
shares in the capital of the 
Company was 281,774 
(approximately 0.22% of the 
Company’s issued share 
capital and approximately 
0.20% of the Company’s 
issued share capital if the 
full authority proposed by 
Resolution 15 was used).

Under the Companies Act 
2006, the Company is 
allowed to hold its own 
shares in treasury following 
a buyback, instead of 
cancelling them. Such shares 
may be re-sold for cash or 
used for the purpose of 
employee share schemes, 
but all rights attaching to 
them, including voting rights 
and any right to receive 
dividends, are suspended 
whilst they are held in 
treasury. Accordingly, if the 
Directors exercise the 
authority conferred by 
Resolution 15, the Company 
will have the option of holding 
these shares in treasury, 
rather than cancelling them. 
The authority sought at the 
Annual General Meeting will 
expire at the conclusion of 
the next Annual General 
Meeting of the Company or 
on 1 December 2020 (being 
the latest date by which the 
Company must hold an 
Annual General Meeting in 
2020). At the date of this 
report the Company did not 
hold any shares in treasury.

Ordinary Resolution 16 – 
Allotment of shares
The Directors may only allot 
Ordinary shares or grant 
rights over Ordinary shares 
if authorised to do so by 
shareholders. The authority 
granted to the Directors at 
the Company’s previous 
Annual General Meeting in 
2018 to allot shares or grant 
rights to subscribe for, or 
convert any securities into, 
shares is due to expire at the 
conclusion of this period’s 
Annual General Meeting. 
Accordingly, the Directors 
will be seeking new authority 
under Section 551 of the 
Companies Act 2006 to allot 
shares (including treasury 
shares) or grant rights to 
subscribe for, or to convert 
any security into, shares 
which will expire at the 
conclusion of the next Annual 
General Meeting of the 
Company or on 1 December 
2020 (being the latest date 
by which the Company must 
hold an Annual General 
Meeting in 2020).

If passed, paragraph (a) of 
Resolution 16 would give the 
Directors authority to allot 
Ordinary shares or grant 
rights to subscribe for, or 
convert any security into, 
Ordinary shares up to an 
aggregate nominal amount 
of £20,903,195 representing 
approximately one-third 
(33.33%) of the Company’s 
issued Ordinary share capital 
and calculated as at 21 May 
2019 (being the last 
practicable date prior to 
publication of the Notice of 
the Annual General Meeting). 
In accordance with the latest 
institutional guidelines issued 
by the Association of British 
Insurers (ABI), paragraph (b) 
of Resolution 16, if passed, 
would give the Directors 
authority to allot further 
shares in connection with 
a fully pre-emptive offer by 

way of a rights issue to 
shareholders up to a further 
aggregate nominal amount of 
£20,903,195 representing 
approximately one-third 
(33.33%) of the Company’s 
issued Ordinary share capital 
and calculated as at 21 May 
2019 (being the last 
practicable date prior to 
publication of the Notice of 
the Annual General Meeting). 
As at 21 May 2019 the 
Company held no shares 
in treasury.

The Directors regularly give 
consideration to the possible 
exercise of this authority. 
The Directors consider it 
desirable to have the 
maximum ﬂexibility permitted 
by corporate governance 
guidelines to respond to 
market developments and 
to enable allotments to take 
place to ﬁnance business 
opportunities as they arise. 
Accordingly, the Directors 
intend to renew this 
authority annually.

Special Resolution 17 – 
Disapplication of pre-
emption rights
Under Section 561(1) of the 
Companies Act 2006, if the 
Directors wish to allot any 
shares and other relevant 
securities, grant rights over 
shares, or sell treasury shares 
for cash (other than in 
connection with an employee 
share scheme), they must in 
the ﬁrst instance offer them 
to existing shareholders in 
proportion to their holdings. 
The Directors seek authority 
to renew the disapplication 
of shareholders’ pre-emptive 
rights. The purpose of 
paragraph (i) of Resolution 17 
is to authorise the Directors 
to allot any shares pursuant 
to the authority given by 
paragraph (a) of Resolution 
16 for cash either (a) in 
connection with a pre-
emptive offer or rights issue 

or (b) otherwise up to an 
aggregate nominal value of 
£3,135,793 (being equivalent 
to 5.0% of the total issued 
Ordinary share capital of the 
Company as at 21 May 2019 
(being the latest practicable 
date prior to publication of 
the Notice of the Annual 
General Meeting)) and which 
includes the sale on a 
non-pre-emptive basis of any 
shares held in treasury, in 
each case without the shares 
ﬁrst being offered to existing 
members in proportion to 
their existing holdings.

The purpose of paragraph (ii) 
of Resolution 17 is to 
authorise the Directors to 
allot any shares pursuant 
to the authority given by 
paragraph (b) of Resolution 
16 for cash in connection 
with a rights issue without 
the shares ﬁrst being offered 
to existing members in 
proportion to their existing 
holdings. This is in line with 
corporate governance 
guidelines issued by the 
Pre-emption Group. The 
Board considers the authority 
sought to be appropriate in 
order to allow the Company 
ﬂexibility to ﬁnance business 
opportunities or to conduct 
a pre-emptive offer or rights 
issue without the need to 
comply with the strict 
requirements of the statutory 
pre-emption provisions. The 
Board intends to adhere to 
the provisions in the Pre-
emption Group’s Statement 
of Principles not to allot 
shares on a non-pre-emptive 
basis (other than pursuant to 
a rights issue or pre-emptive 
offer) in excess of an amount 
equal to 7.5% of the total 
issued Ordinary share capital 
of the Company within a 
rolling three-year period 
without prior consultation 
with shareholders.

152  |  U and I Group PLC
Annual Report & Accounts 2019

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Special Resolution 18 – 
Notice period for general 
meetings
The Companies 
(Shareholders’ Rights) 
Regulations 2009 increased 
the notice period for general 
meetings of a company to 21 
clear days unless 
shareholders approve a 
shorter period, which cannot 
be less than 14 clear days.

At the Annual General 
Meeting of the Company 
held on 5 July 2018, 
shareholders authorised the 
calling of general meetings, 
other than an Annual General 
Meeting, on not less than 14 
clear working days’ notice. 
Resolution 18 seeks the 
approval of shareholders to 
renew the authority to be able 
to call general meetings 
(other than an Annual General 
Meeting) on 14 clear days’ 
notice. The shorter notice 
period would not be used as 
a matter of routine for general 
meetings, but only where the 
ﬂexibility is merited by the 
business of the meeting and 
is thought to be to the 
advantage of shareholders 
as a whole. If the proposals 
at a given meeting are not 
time sensitive, the Company 
will not normally use the 
shorter notice period. The 
approval will be effective until 
the Company’s next Annual 
General Meeting, when it is 
expected that a similar 
resolution will be proposed. 
It should also be noted that 
the changes to the Companies 
Act 2006 mean that, in order 
to be able to call a general 
meeting on less than 21 clear 
days’ notice, the Company 
must make a means of 
electronic voting available 
to all shareholders for 
that meeting. 

Ordinary Resolution 19 – 
Political donations
Part 14 of the Companies Act 
2006, amongst other things, 
prohibits the Company and 
its subsidiaries from making 
political donations or from 
incurring political expenditure 
in respect of a political party 
or other political organisation 
or an independent election 
candidate unless authorised 
by the Company’s 
shareholders. Aggregate 
donations made by the 
Group of £5,000 or less in 
any 12-month period will not 
be caught.

Neither the Company nor any 
of its subsidiaries has any 
intention of making any 
political donation or incurring 
any political expenditure. 
However, the Companies 
Act 2006 deﬁnes ‘political 
organisation’, ‘political party’, 
‘political donation’ and 
‘political expenditure’ widely. 
Accordingly, the Company 
wishes to ensure that neither 
it nor its subsidiaries 
inadvertently commit any 
breaches of the Companies 
Act 2006 through the 
undertaking of routine 
activities, which would not 
normally be considered to 
result in the making of political 
donations and political 
expenditure being incurred.

Resolution 19 authorises the 
Company and its subsidiaries 
to:
 – make political donations to 

political parties or 
independent election 
candidates, not exceeding 
£10,000 in total;

 – make political donations to 
political organisations, 
other than political parties, 
not exceeding £10,000 in 
total; and

 – incur political expenditure, 
not exceeding £10,000 in 
total, provided that the 
aggregate amount of any 
such donations and 

Signiﬁcant shareholdings
Information provided to the 
Company pursuant to the 
Financial Conduct Authority’s 
Disclosure and Transparency 
Rules (DTR 5) is published 
on a Regulatory Information 
Service and on the 
Company’s website. As at 
21 May 2019 (being the last 
practicable date prior to 
publication of the Annual 
Report), the following 
information had been received 
in accordance with DTR 5 
from holders of notiﬁable 
interests in the Company’s 
issued share capital.

The information provided in 
Table 3 below was correct 
at the date of notiﬁcation; 
however, the date the 
notiﬁcation was received 
from the shareholder may not 
be within the ﬁnancial period 
under review. It should be 
noted that these holdings, 
and percentage of share 
capital held, are likely to have 
changed since the Company 
was notiﬁed. Notiﬁcation 
of any change is the 
responsibility of those with 
the notiﬁable interest, and is 
not required until the next 
notiﬁable threshold has 
been crossed. 

expenditure shall not 
exceed £10,000 during the 
period beginning with the 
date of the passing of the 
Resolution and ending on 
the date of the Company’s 
next Annual General 
Meeting.

Financial risk management
Disclosures in respect of 
ﬁnancial risk management 
objectives and exposures are 
set out in note 17d to the 
Consolidated ﬁnancial 
statements on pages 204 
to 207.

Financial instruments
Details of the ﬁnancial 
instruments used by the 
Group and the Company are 
set out in note 17c to the 
Consolidated ﬁnancial 
statements on page 203.

Charitable and political 
donations
Charitable donations during 
the period were £23,879 
(2018: £44,819). The Group 
supported a number of 
charities serving the 
community in which the 
Group operates. These 
included national and local 
charitable organisations and 
covered a wide range of 
causes, including education, 
public services, community 
support schemes and events 
organised on behalf of 
major charities.

Table 3

Holder
Aberforth Partners LLP
Fidelity Woldwide Investment 
J O Hambro Capital Management
Standard Life Aberdeen plc
BMO Global Asset Management (UK)
Threadneedle Asset Management
Ennismore Fund Management Ltd
The Wellcome Trust Limited

Shares
15,059,622
13,644,678
13,737,550
6,258,083
5,875,946
5,722,553
5,149,730
5,108,153

%
holding*
12.01
10.87
10.95
4.99
4.71
4.68
4.12
4.08

*  Percentage holding in the Company at the time of most recent notiﬁcation 

does not necessarily reﬂect current holding; see www.uandiplc.com/
investors for more details.

153  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
DIRECTORS’ REPORT
CONTINUED

Human rights
This report does not contain 
information about any 
policies of the Group in 
relation to human rights 
issues since it is not 
considered necessary for 
an understanding of the 
development, performance 
or position of the Group’s 
business activity due to the 
existing regulatory 
requirements in the UK. 
The Company does have 
policies which adhere to 
internationally proclaimed 
human rights principles.

In the 13-month period to 
31 March 2019, the Group is 
not aware of any incident in 
which the Group’s activities 
have resulted in an abuse of 
human rights.

Equal opportunity, diversity 
and disability
The Board acknowledges 
the importance of diversity 
in all forms and is committed 
to the principle of equal 
opportunity in employment. 
Current and potential 
employees are offered the 
same opportunities 
regardless of gender, gender 
reassignment, race, colour, 
religion, nationality, ethnic 
origin, age, sexual 
orientation, marital status or 
disability. It is the Group’s 
policy to apply best practice 
in the employment of 

disabled people, including, 
wherever possible, the 
retraining and retention of 
staff who become disabled 
during their employment.

Details of the gender 
diversity within the Company 
as at 31 March 2019 can be 
found in the Sustainability 
Report on page 80.

Employee engagement
The Group recognises the 
importance of engaging its 
employees and keeps them 
regularly informed on matters 
affecting them through 
various media, including the 
display of notices in 
communal areas, memoranda 
and emails, presentations, 
meetings and the Company’s 
intranet and website. In 
accordance with the new 
Corporate Governance Code 
applicable to the Company 
for the year commencing 
1 April 2019, the Company 
intends to establish a 
Workforce Engagement Panel 
chaired by an independent 
Non-executive Director, 
reporting directly into the 
Board. Further information 
regarding employee 
engagement can be found 
on pages 80 and 127.

they are committed to 
encouraging and facilitating 
the continuing professional 
development of employees to 
ensure they are equipped to 
perform their particular roles. 
Training and development 
are provided and available 
to all employees.

The Company operates 
a number of share option 
schemes which seek to 
incentivise and reward 
employees for the sustainable 
creation of shareholder value 
over the longer term.

Independent auditors
Our auditors, PwC, have 
indicated their willingness to 
continue in ofﬁce. The Board, 
on the advice of the Audit 
and Risk Committee, 
recommends their re-
appointment, and a 
resolution that they be 
re-appointed will be 
proposed at the forthcoming 
Annual General Meeting.

Post balance sheet events
Details of events which have 
occurred since 31 March 
2019, and up to the date of 
this report, are disclosed in 
note 27 to the Consolidated 
ﬁnancial statements.

It is the Directors’ belief that 
employees are instrumental in 
the continued improvement in 
the Group’s performance and 

Greenhouse gas emissions
The Company has reported 
greenhouse gas (GHG) 
emissions in line with the 

requirements set out in 
the Companies Act 2006 
(Strategic Report and 
Directors’ Report) Regulations 
2013. The Company’s GHG 
emissions are reported based 
on an operational control 
boundary for sources of 
emissions falling within the 
Company’s consolidated 
ﬁnancial statements. The 
reporting period for GHG 
emissions is 1 March 2018 to 
31 March 2019, which aligns 
with the ﬁnancial reporting 
year covered by the 
Directors’ Report. The 
reporting period is therefore 
13 months due to the change 
in ﬁnancial year-end, 
compared to the 12-month 
reporting period for the 
previous year (ending 
28 February 2018).

The Company has used the 
GHG Protocol Corporate 
Accounting and Reporting 
Standard (revised edition), 
and Defra GHG Conversion 
Factors for Company 
Reporting 2018 for the ﬁnancial 
year ending 31 March 2019 to 
calculate its GHG emissions 
(see Table 4 below).

An intensity ratio of GHG 
emissions per square foot 
of investment property 
managed and property 
occupied by the Company 
is reported (see Table 5 below).

Table 4

Table 5

Greenhouse Gas (GHG)
Emissions Scope (tCO2e)
Scope 1a,b,d
Scope 2c,d
Total 

Reporting
year ended
31 March 
2019
506
734
1,240

Reporting
year ended
28 February 
2018
341
1,107
1,448

Intensity Ratio (tCO2e/sq.ft)
GHG emissions per square foot of 
property occupied
GHG emissions per square foot of 
investment property managed

Reporting
year ended
31 March 
2019

Reporting
year ended
28 February 
2018

0.005

0.006

0.002

0.001

a  Scope 1 covers emissions from direct combustion of fuel from operation of 

properties and company owned vehicles.

b  Fugitive emissions data from use of air conditioning was not available for this 
report, in the absence of data it was considered that a reasonable estimation 
could not be calculated based on the limited information available.

c  Scope 2 covers emission from electricity purchased for own use. There were 
no purchases of heat, steam and cooling for own use in the reporting period.
d  Where gas/electricity consumption data was not available to cover all months 
of the reporting period, an estimation of the emissions have been calculated 
using an average of gas/electricity consumption from the overall available 
data for properties within the reporting scope.

154  |  U and I Group PLC
Annual Report & Accounts 2019

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DIRECTORS’ REPORT
CONTINUED

Table 6

Information
Agreement with controlling shareholders*
Amendment of the Articles of Association
Appointment and replacement of Directors
Board of Directors
Board statements
Contracts of signiﬁcance*
Change of control
Details of long-term incentive schemes
Directors’ insurance and indemnities
Directors’ inductions and training
Directors’ Responsibilities Statement
Disclosure of information to the Auditor
Diversity
Dividends
Employee engagement
Employees with disabilities
Financial risk management
Future developments of the business
Going Concern Statement
Greenhouse gas emissions
Independent Auditors’ Report
Interest capitalised*
Non-pre-emptive issues of equity for cash*
Non-pre-emptive issues by a major subsidiary undertaking*
Parent participant in a placing by a listed subsidiary*
Political donations
Post balance sheet events
Powers for the Company to issue or buy back its shares
Principal risks and uncertainties 
Provision of services by a controlling shareholder* 
Publication of unaudited ﬁnancial information*
Related undertakings of U and I Group PLC
Rights attaching to shares
Risk management and internal control
Share capital
Shareholder waiver of dividends*
Shareholder waiver of future dividends
Signiﬁcant agreements
Signiﬁcant related party agreements*
Signiﬁcant shareholders
Statement of corporate governance
Strategic Report
Sustainability
Viability Statement
Voting rights
Waiver of emoluments by a Director
Waiver of future emoluments by a Director

Index of Directors’ Report 
disclosures
The information required to 
be disclosed in the Directors’ 
Report can be found in the 
Annual Report on the pages 
listed in Table 6. Pursuant to 
Listing Rule 9.8.4C.

Disclosure of information 
to auditors
Each of the persons who is 
a Director at the date of 
approval of this report 
conﬁrms that:
 – So far as he/she is aware, 
there is no relevant audit 
information of which the 
Group’s auditors are 
unaware; and

 – He/she has taken all the 

steps that he/she ought to 
have taken as a Director in 
order to make themselves 
aware of any relevant audit 
information and to 
establish that the Group’s 
auditors are aware of that 
information. This 
conﬁrmation is given and 
should be interpreted in 
accordance with the 
provisions of Section 418 of 
the Companies Act 2006.

Approved by the Board of 
Directors and signed on its 
behalf by:

Chris Barton, 
Company Secretary
21 May 2019

Page number
n/a
150
150
98–101
102–103
n/a
149
134
150
112, 118–119
156
155
80, 118
149, 187
80, 127, 154
154
153, 204–207
1–93
102–103, 126
154
157–165
185
n/a
n/a
n/a
153
154, 213
149
82–85
n/a
n/a
212–225
149
120–126
148, 208–209
150
150
149
150, 212
153
102–103
1–93
74–81
86
149
n/a
n/a

*  Information required to be disclosed in the Annual Report under Listing Rule 9.8.4R is marked with an asterisk(*).

155  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
On behalf of the Board 

Matthew Weiner, 
Chief Executive 
Ofﬁcer
21 May 2019

Marcus Shepherd, 
Chief Financial 
Ofﬁcer
21 May 2019

STATEMENT OF DIRECTORS’ 
RESPONSIBILITIES IN RESPECT 
OF THE FINANCIAL STATEMENTS

 – prepare the ﬁnancial 

statements on the going 
concern basis unless it is 
inappropriate to presume 
that the Group and 
Company will continue 
in business.

The Directors are responsible 
for keeping adequate 
accounting records that are 
sufﬁcient to show and explain 
the Group and Company’s 
transactions and disclose 
with reasonable accuracy at 
any time the ﬁnancial position 
of the Group and Company 
and enable them to ensure 
that the ﬁnancial statements 
and the Directors’ 
Remuneration Report comply 
with the Companies Act 2006 
and, as regards the Group 
ﬁnancial statements, Article 4 
of the IAS Regulation.

The Directors are also 
responsible for safeguarding 
the assets of the Group and 
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 Company’s 
website. Legislation in the 
United Kingdom governing the 
preparation and dissemination 
of ﬁnancial statements may 
differ from legislation in other 
jurisdictions.

The Directors consider that 
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 and Company’s 
performance, business model 
and strategy.

Each of the Directors, whose 
names and functions are 
listed in the Board of 
Directors section on pages 
99 to 101, conﬁrm that, to 
the best of their knowledge:
 – the Company ﬁnancial 
statements, which have 
been prepared in 
accordance with United 
Kingdom Generally 
Accepted Accounting 
Practice (United Kingdom 
Accounting Standards, 
comprising FRS 102 
‘The Financial Reporting 
Standard applicable in the 
UK and Republic of Ireland’, 
and applicable law), give a 
true and fair view of the 
assets, liabilities, ﬁnancial 
position and loss of the 
Company;

 – the Group ﬁnancial 

statements, which have 
been prepared in 
accordance with IFRSs as 
adopted by the European 
Union, give a true and fair 
view of the assets, 
liabilities, ﬁnancial position 
and proﬁt of the Group; 
and

 – the Directors’ Report 

includes a fair review of 
the development and 
performance of the 
business and the position 
of the Group and 
Company, together with a 
description of the principal 
risks and uncertainties that 
it faces.

In the case of each Director 
in ofﬁce at the date the 
Directors’ Report is 
approved:
 – so far as the Director is 

aware, there is no relevant 
audit information of which 
the Group and Company’s 
auditors are unaware; and

 – they have taken all the 

steps that they ought to 
have taken as a Director in 
order to make themselves 
aware of any relevant 
audit information and to 
establish that the Group 
and Company’s auditors 
are aware of that 
information.

The Directors are responsible 
for preparing the Annual 
Report and the ﬁnancial 
statements in accordance with 
applicable law and regulation.

Company law requires the 
Directors to prepare ﬁnancial 
statements for each ﬁnancial 
year. Under that law the 
Directors have prepared the 
Group ﬁnancial statements in 
accordance with International 
Financial Reporting 
Standards (IFRSs) as 
adopted by the European 
Union and Company ﬁnancial 
statements in accordance 
with United Kingdom 
Generally Accepted 
Accounting Practice (United 
Kingdom Accounting 
Standards, comprising FRS 
102 ‘The Financial Reporting 
Standard applicable in the 
UK and Republic of Ireland’, 
and applicable law). Under 
company law the Directors 
must not approve the 
ﬁnancial statements unless 
they are satisﬁed that they 
give a true and fair view of 
the state of affairs of the 
Group and Company and of 
the proﬁt or loss of the Group 
and Company for that period. 
In preparing the ﬁnancial 
statements, the Directors 
are required to:
 – select suitable accounting 
policies and then apply 
them consistently;

 – state whether applicable 
IFRSs as adopted by the 
European Union have been 
followed for the Group 
ﬁnancial statements and 
United Kingdom 
Accounting Standards, 
comprising FRS 102, have 
been followed for the 
Company ﬁnancial 
statements, subject to any 
material departures 
disclosed and explained in 
the ﬁnancial statements;

 – make judgements and 

accounting estimates that 
are reasonable and 
prudent; and

156  |  U and I Group PLC
Annual Report & Accounts 2019

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INDEPENDENT AUDITORS’ REPORT 
TO THE MEMBERS OF U AND I GROUP PLC

Report on the audit of the ﬁnancial statements
Opinion
In our opinion:
 – U and I Group PLC’s Group ﬁnancial statements and 

Company ﬁnancial statements (the ‘ﬁnancial statements’) 
give a true and fair view of the state of the Group’s and 
of the Company’s affairs as at 31 March 2019 and of the 
Group’s proﬁt and cash ﬂows for the 13 month period 
(the ‘period’) then ended;

 – the Group ﬁnancial statements have been properly prepared 

in accordance with International Financial Reporting 
Standards (IFRSs) as adopted by the European Union;
 – the Company ﬁnancial statements have been properly 

prepared in accordance with United Kingdom Generally 
Accepted Accounting Practice (United Kingdom Accounting 
Standards, comprising FRS 102 ‘The Financial Reporting 
Standard applicable in the UK and Republic of Ireland’, 
and applicable law); and

 – the ﬁnancial statements have been prepared in accordance 

with the requirements of the Companies Act 2006 and, 
as regards the Group ﬁnancial statements, Article 4 of the 
IAS Regulation.

We have audited the ﬁnancial statements, included within the 
Annual Report, which comprise: Consolidated and Company 
Balance Sheets as at 31 March 2019; the Consolidated 
Statement of Comprehensive Income, the Consolidated 
Cash Flow Statement, and the Consolidated and Company 
Statement of Changes in Equity for the 13 month period then 
ended; and the notes to the ﬁnancial statements, which 
include a description of the signiﬁcant accounting policies.

Our opinion is consistent with our reporting to the 
Audit Committee.

Basis for opinion
We conducted our audit in accordance with International 
Standards on Auditing (UK) (‘ISAs (UK)’) and applicable law. 
Our responsibilities under ISAs (UK) are further described 
in the Auditors’ responsibilities for the audit of the ﬁnancial 
statements section of our report. We believe that the audit 
evidence we have obtained is sufﬁcient and appropriate to 
provide a basis for our opinion.

Independence
We remained independent of the Group in accordance with 
the ethical requirements that are relevant to our audit of the 
ﬁnancial statements in the UK, which includes the FRC’s 
Ethical Standard, as applicable to listed public interest 
entities, and we have fulﬁlled our other ethical responsibilities 
in accordance with these requirements.

To the best of our knowledge and belief, we declare that 
non-audit services prohibited by the FRC’s Ethical Standard 
were not provided to the Group or the Company.

Other than those disclosed in note 3 to the ﬁnancial 
statements, we have provided no non-audit services to the 
Group or the Company in the period from 1 March 2018 to 
31 March 2019.

157   |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
INDEPENDENT AUDITORS’ REPORT 
TO THE MEMBERS OF U AND I GROUP PLC
CONTINUED

Our audit approach
Overview

Materiality

Audit  
scope

Key audit 
matters

 – Overall Group materiality: 

£6.2 million (2018: £6.7 million), 
based on 1% of total assets
 – Speciﬁc Group materiality: 

£1.4 million (2018: £2.9 million), 
based on 5% adjusted proﬁt 
before tax

 – Overall Company materiality: 

£5.6 million (2018: £6.0 million), 
based on 1% of total assets

 – All work in support of the 

Group and Company audit 
opinion is performed by the 
Group audit team

 – Valuation of investment 

properties, either held directly 
or within joint ventures (Group)

 – Carrying value of certain 
development and trading 
properties, either held directly 
or within joint ventures (Group)

 – Carrying value and/or 

recoverability of certain ﬁnancial 
assets (Group and Company)

The scope of our audit
As part of designing our audit, we determined materiality 
and assessed the risks of material misstatement in the 
ﬁnancial statements. 

Capability of the audit in detecting irregularities, 
including fraud
Based on our understanding of the Group and Company and 
their industry, we identiﬁed that the principal risks of non-
compliance with laws and regulations related to compliance 
with UK tax legislation and we considered the extent to which 
non-compliance might have a material effect on the Group 
and Company ﬁnancial statements. We also considered those 
laws and regulations that have a direct impact on the 
preparation of the Group and Company ﬁnancial statements 
such as the Listing Rules and Companies Act 2006. We 
evaluated management’s incentives and opportunities for 
fraudulent manipulation of the ﬁnancial statements (including 
the risk of override of controls), and determined that the 
principal risks were related to posting inappropriate journal 
entries to increase revenue or reduce expenditure, and 
management bias in accounting estimates and judgemental 
areas of the ﬁnancial statements such as the valuation of 
investment properties, either held directly or within joint 
ventures, carrying value of certain development and trading 
properties, either held directly or within joint ventures, or the 
carrying value and/or recoverability of certain ﬁnancial assets. 

Audit procedures performed by the Group engagement team 
included:
 – Discussions with management and those charged with 

governance in relation to known or suspected instances 
of non-compliance with laws and regulations and fraud;

 – Challenging assumptions and judgements made by 

management in their signiﬁcant accounting estimates, 
in particular in relation to the valuation of investment 
properties, either held directly or within joint ventures, 
the carrying value of certain development and trading 
properties, either held directly or within joint ventures or 
the carrying value and/or recoverability of certain ﬁnancial 
assets (see related key audit matters below); and

 – Identifying and testing journal entries, in particular any 
journal entries posted to revenue with unusual account 
combinations or posted by senior management.

There are inherent limitations in the audit procedures 
described above and the further removed non-compliance 
with laws and regulations is from the events and transactions 
reﬂected in the ﬁnancial statements, the less likely we would 
become aware of it. Also, the risk of not detecting a material 
misstatement due to fraud is higher than the risk of not 
detecting one resulting from error, as fraud may involve 
deliberate concealment by, for example, forgery or intentional 
misrepresentations, or through collusion.

158   |  U and I Group PLC
Annual Report & Accounts 2019

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Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most signiﬁcance in the 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) identiﬁed by the auditors, including 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, and any comments we 
make on the results of our procedures thereon, 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. This is not a complete 
list of all risks identiﬁed by our audit. 

Key audit matter
Valuation of investment properties, either held directly 
or within joint ventures (Group)
(Refer to note 9 to the ﬁnancial statements, pages 189 to 191, 
and also to note 13 to the ﬁnancial statements, pages 193 to 
198 and page 124, Audit and Risk Committee Report)

The Group directly owns, or owns via joint ventures, a 
portfolio of investment properties located throughout the UK 
and Ireland, predominantly retail units and shopping centres. 
The total value of the directly held portfolio is £154.0 million 
as per the consolidated balance sheet. Included within 
investments in joint ventures of £103.9 million as per the 
consolidated balance sheet are investment properties. The 
Group’s share of the net assets of which these investment 
properties are included is £7.9 million.

The majority of valuations are carried out by third party valuers 
in accordance with the RICS Valuation – Professional 
Standards and IFRSs as adopted by the European Union. 
A small element of the portfolio (£15.2 million) is valued 
internally by the directors.

There are signiﬁcant judgements and estimates inherent in 
the valuation of the investment property portfolio. Where 
available, the valuations take into account evidence of market 
transactions for properties and locations comparable to those 
of the Group’s properties. The wider challenges currently 
facing the UK retail real estate occupier and investor markets 
further contributed to the subjectivity for the period ended 
31 March 2019.

The most signiﬁcant judgements and estimates affecting all 
the valuations include yields and estimated rental value (‘ERV’) 
(as described in note 9 of the ﬁnancial statements).

The existence of signiﬁcant estimation uncertainty, coupled 
with the fact that only a small percentage difference in 
individual property valuations when aggregated could result 
in material misstatement, is why we have given speciﬁc audit 
focus and attention to this area.

How our audit addressed the key audit matter
The valuers used by the Group and joint ventures are CBRE, 
Savills and Lambert Smith Hampton (LSH). They are all 
well-known and established ﬁrms. We assessed the 
competence and capabilities of the ﬁrms and veriﬁed their 
qualiﬁcations. We also assessed their independence by 
discussing the scope of their work and reviewing the terms 
of their engagement for unusual terms or fee arrangements. 
Based on this work, we are satisﬁed that they remain 
independent and competent and that the scope of their work 
was appropriate.

We tested the data inputs underpinning the investment 
property valuations for a sample of properties, including rental 
income, acquisitions and capital expenditure, by agreeing 
them to the underlying property records held by the Group. 
The underlying property records were themselves tested back 
to signed and approved lease contracts or sale/purchase 
contracts and approved third party invoices as applicable.

We obtained details of each property held by the Group and 
set an expected range for yield and capital value movement, 
determined by reference to published benchmarks and using 
our experience and knowledge of the market. We compared 
the investment yields used by the valuers with the range of 
expected yields and the year on year capital movement to our 
expected range. We also considered the reasonableness of 
other assumptions that are not so readily comparable with 
published benchmarks, such as Estimated Rental Value.

We attended meetings with management and the valuers, 
at which the valuations and the key assumptions therein were 
discussed. Our work covered the valuation of each property 
held directly or indirectly by the Group.

Where assumptions were outside the expected range or 
otherwise appeared unusual, and/or valuations showed 
unexpected movements, we undertook further investigations 
and, when necessary, held further discussions with the valuers 
and obtained evidence to support explanations received. 
The valuation commentaries provided by the valuers and 
supporting evidence, enabled us to consider the property 
speciﬁc factors that may have had an impact on value, 
including recent comparable transactions where appropriate.

We found that the assumptions used by the valuers were 
predominantly consistent with our expectations and 
comparable benchmarking information for the asset type, and 
that the assumptions were applied appropriately and reﬂected 
those available comparable market transactions. Where 
assumptions did not fall within our expected range we were 
satisﬁed that variances were due to property speciﬁc factors. 
We concluded that the assumptions used in the valuations 
were supported by the evidence we obtained.

159   |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
 
INDEPENDENT AUDITORS’ REPORT 
TO THE MEMBERS OF U AND I GROUP PLC
CONTINUED

Key audit matter
Carrying value of certain development and 
trading properties, either held directly or within joint 
ventures (Group)
(Refer to note 14 to the ﬁnancial statements on page 198 and 
also to note 13, pages 193 to 198 and to page 124, Audit and 
Risk Committee Report)

The Group directly owns, or owns via joint ventures, a portfolio 
of development and trading properties. These properties are 
held at the lower of cost and net realisable value in accordance 
with IAS 2 – Inventory. As qualifying costs are incurred on 
existing developments, these are added to the asset balance.

The total value of the Group’s directly held development and 
trading properties is £203.8 million as at 31 March 2019. 
Included within investments in joint ventures of £103.9 million 
as per the consolidated balance sheet are development and 
trading properties. The Group’s share of the net assets of 
which these development and trading properties are included 
is £96.0 million.

The portfolio consists of a variety of assets located throughout 
the UK and Ireland. It includes assets subject to signiﬁcant 
judgements as a result of contractor and development risk and 
assets acquired during periods in which market values were 
higher than currently.

We identiﬁed those properties within the portfolio where there 
has been signiﬁcant investment, an adverse planning decision, 
or an impairment in the period and these where subject to 
additional focus. A change in conditions for these speciﬁc 
assets or a relatively small percentage change in either the 
property or construction markets could result in a material 
impact to the ﬁnancial statements.

How our audit addressed the key audit matter
We have reviewed the development appraisals produced by 
management that support the assessment of the net realisable 
value for individual assets. We assessed the competence and 
capabilities of management in producing these appraisals and 
were satisﬁed that the individuals are sufﬁciently qualiﬁed.

We met with management, along with our valuations specialists, 
to understand the status and future plans for each asset. 
We also visited a number of the development sites. 

We challenged management on cost and revenue assumptions 
within the development appraisals, and compared assumptions 
to readily-available market data and recent comparable market 
transactions. Where applicable due to the advanced stage of 
the development, we also agreed third party supporting the 
book value through a review of pre-letting agreements, 
forward sales, quantity surveyor cost to complete estimates, 
board minutes and planning consent forms.

We tested qualifying cost additions during the period, on a 
sample basis, to third party invoices, and budgeted costs to 
complete compared with supporting evidence (for example 
construction contracts). We tested acquisitions and disposals 
by agreeing back to relevant sales agreements and bank 
statements.

Additionally, we performed a look-back test, comparing 
historical book values of assets to disposal proceeds 
following their sale.

Based on this work we were satisﬁed with the evidence that 
development and trading properties were held at the lower 
of cost and net realisable value.

160  |  U and I Group PLC
Annual Report & Accounts 2019

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Key audit matter
Carrying value and/or recoverability of certain ﬁnancial 
assets – Group and Company
(Refer to note 17 to the ﬁnancial statements, pages 200 to 207, 
and also to page 124, Audit and Risk Committee Report)

The Group and Company hold a number of indirect property 
interests on the Consolidated and Company balance sheets 
that are classiﬁed as: 

Financial assets held at amortised cost – split between – 
£3.2 million in non-current assets (Group), £9.0 million – 
current assets (Group and Company). 

Financial assets held at fair value through proﬁt and loss – 
split between – £13.2 million in non-current assets (Group), 
£13.6 million current assets (Group and Company)

The ﬁnancial asset amounts reported are assessed through 
valuation of underlying assets, businesses or ventures that 
the Group and Company has lent money or invested into. 
We focussed on this area as there are signiﬁcant judgements 
and estimates inherent in the amounts reported within the 
ﬁnancial statements.

There continues to be a risk associated with the recoverability 
of the Northpoint Development loan notes (£9 million ﬁnancial 
assets held at amortised cost and £5.2 million of the current 
£13.6 million of ﬁnancial assets held at fair value through proﬁt 
and loss), which rely on a number of property developments 
being completed over the next ﬁve year period.

The current ﬁnancial assets held at fair value through proﬁt 
and loss balance of £13.6 million includes an amount due of 
£8.4 million from Curzon Park Limited. The loan value has been 
determined by management estimating the fair value due to 
Curzon Park Limited of the land that was subject to a 
compulsory purchase order during the period.

How our audit addressed the key audit matter
We have obtained supporting documentation for the 
classiﬁcation and assessment of carrying value of the ﬁnancial 
assets reported within the ﬁnancial statements.

Where the amounts recorded are supported by underlying 
asset or investment valuations, we benchmarked and 
sensitised management’s assumptions. This included 
obtaining support for expectations of future disposals, 
comparison of expected sales prices to publically available 
market data and the benchmarking of future cost assumptions 
to current live developments within the portfolio.

For loan repayments in the period we tested cash received 
through to bank statements.

In relation to the loans to Northpoint Developments Limited, 
we held discussions with management and obtained the 
appraisals supporting the proﬁtability of the underlying 
schemes, corroborating this to publically available market data 
and costs incurred to date. We tested cash receipts received 
in relation to part repayment of the working capital loans 
received during the period through to bank statements and 
obtained supporting evidence for movements in the underlying 
property appraisals that have supported a fair value uplift on 
the remaining balance.

In relation to the Curzon Park ﬁnancial asset, we have 
reviewed legal documentation and challenged management’s 
estimate of the fair value of the land, including reviewing the 
external assessment supporting the land value at the date of 
compulsory purchase. We have agreed the advance payment 
received during the period in cash to the bank statement. 

Based on this work, we are satisﬁed that the ﬁnancial assets 
held at amortised cost or fair value through proﬁt and loss are 
not materiality misstated.

161  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
INDEPENDENT AUDITORS’ REPORT 
TO THE MEMBERS OF U AND I GROUP PLC
CONTINUED

How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the ﬁnancial 
statements as a whole, taking into account the structure of the Group and the Company, the accounting processes and 
controls, and the industry in which they operate.

All work in support of the Group audit opinion is performed by the Group audit team.

Materiality
The scope of our audit was inﬂuenced by our application of materiality. We set certain quantitative thresholds for materiality. 
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent 
of our audit procedures on the individual ﬁnancial statement line items and disclosures and in evaluating the effect of misstatements, 
both individually and in aggregate on the ﬁnancial statements as a whole. 

Based on our professional judgement, we determined materiality for the ﬁnancial statements as a whole as follows:

Overall materiality
How we determined it
Rationale for benchmark 
applied

Speciﬁc materiality
How we determined it
Rationale for benchmark 
applied

Group ﬁnancial statements
£6.2 million (2018: £6.7 million).
1% of total assets.
We determined materiality based on total 
assets given the valuation of investment 
properties, development and trading 
properties, whether held directly or through 
joint ventures and associates, is the key 
determinant of the Group’s value.
£1.4 million (2018: £5.9 million).
5% of adjusted proﬁt
A number of key performance indicators of 
the Group are driven by income statement 
items and we therefore also applied a lower 
speciﬁc materiality for testing determinants of 
proﬁt, excluding the revaluation movements 
of investment properties, loss on disposal of 
investment properties and net ﬁnance costs.

Company ﬁnancial statements
£6.1 million (2018: £6.0 million).
1% of total assets.
The Company’s main activity is the holding of 
investments in subsidiaries. Given this, we set 
an overall Company materiality level based on 
total assets.

Not applicable
Not applicable
Not applicable

162  |  U and I Group PLC
Annual Report & Accounts 2019

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We agreed with the Audit and Risk Committee that we would report to them misstatements identiﬁed during our audit above 
£0.3 million (Group audit) (2018: £0.3 million) and £0.3 million (Company audit) (2018: £0.3 million) as well as misstatements 
below those amounts that, in our view, warranted reporting for qualitative reasons.

Going concern
In accordance with ISAs (UK) we report as follows:

Reporting obligation
We are required to report if we have anything material to add 
or draw attention to in respect of the directors’ statement in 
the ﬁnancial statements about whether the directors 
considered it appropriate to adopt the going concern basis 
of accounting in preparing the ﬁnancial statements and the 
directors’ identiﬁcation of any material uncertainties to the 
Group’s and the Company’s ability to continue as a going 
concern over a period of at least twelve months from the date 
of approval of the ﬁnancial statements.
We are required to report if the directors’ statement relating 
to Going Concern in accordance with Listing Rule 9.8.6R(3) 
is materially inconsistent with our knowledge obtained in 
the audit.

Outcome
We have nothing material to add or to draw attention to.

However, because not all future events or conditions can be 
predicted, this statement is not a guarantee as to the Group’s 
and Company’s ability to continue as a going concern. 
For example, the terms on which the United Kingdom may 
withdraw from the European Union are not clear, and it is 
difﬁcult to evaluate all of the potential implications on the 
Group’s trade, customers, suppliers and the wider economy. 
We have nothing to report.

Reporting on other information
The other information comprises all of the information in the Annual Report other than the ﬁnancial statements and our auditors’ 
report thereon. The directors are responsible for the other information. Our opinion on the ﬁnancial statements does not cover 
the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in 
this report, any form of assurance thereon. 

In connection with our audit of the ﬁnancial statements, our responsibility is to read the other information and, in doing so, 
consider whether the other information is materially inconsistent with the ﬁnancial statements or our knowledge obtained in the 
audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, 
we are required to perform procedures to conclude whether there is a material misstatement of the ﬁnancial statements or 
a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a 
material misstatement of this other information, we are required to report that fact. We have nothing to report based on 
these responsibilities.

With respect to the Strategic Report, Directors’ Report and Corporate Governance Statement, we also considered whether the 
disclosures required by the UK Companies Act 2006 have been included. 

Based on the responsibilities described above and our work undertaken in the course of the audit, the Companies Act 2006 
(CA06), ISAs (UK) and the Listing Rules of the Financial Conduct Authority (FCA) require us also to report certain opinions and 
matters as described below (required by ISAs (UK) unless otherwise stated).

163   |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
INDEPENDENT AUDITORS’ REPORT 
TO THE MEMBERS OF U AND I GROUP PLC
CONTINUED

Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and 
Directors’ Report for the period ended 31 March 2019 is consistent with the ﬁnancial statements and has been prepared in 
accordance with applicable legal requirements. (CA06)

In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the 
audit, we did not identify any material misstatements in the Strategic Report and Directors’ Report. (CA06)
Corporate Governance Statement
In our opinion, based on the work undertaken in the course of the audit, the information given in the Corporate Governance 
Statement (on pages 94 to 156) about internal controls and risk management systems in relation to ﬁnancial reporting processes 
and about share capital structures in compliance with rules 7.2.5 and 7.2.6 of the Disclosure Guidance and Transparency Rules 
sourcebook of the FCA (‘DTR’) is consistent with the ﬁnancial statements and has been prepared in accordance with applicable 
legal requirements. (CA06)

In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the 
audit, we did not identify any material misstatements in this information. (CA06)

In our opinion, based on the work undertaken in the course of the audit, the information given in the Corporate Governance 
Statement (on pages 94 to 156) with respect to the Company’s corporate governance code and practices and about its 
administrative, management and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the 
DTR. (CA06)

We have nothing to report arising from our responsibility to report if a corporate governance statement has not been prepared 
by the Company. (CA06)
The directors’ assessment of the prospects of the Group and of the principal risks that would threaten the solvency or liquidity 
of the Group
We have nothing material to add or draw attention to regarding:
 – The directors’ conﬁrmation on page 102 of the Annual Report that they have carried out a robust assessment of the principal 

risks facing the Group, including those that would threaten its business model, future performance, solvency or liquidity.

 – The disclosures in the Annual Report that describe those risks and explain how they are being managed or mitigated.
 – The directors’ explanation on page 102 of the Annual Report as to how they have assessed the prospects of the Group, over 
what period they have done so and why they consider that period to be appropriate, and their statement as to whether they 
have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over 
the period of their assessment, including any related disclosures drawing attention to any necessary qualiﬁcations 
or assumptions.

We have nothing to report having performed a review of the directors’ statement that they have carried out a robust assessment 
of the principal risks facing the Group and statement in relation to the longer-term viability of the Group. Our review was 
substantially less in scope than an audit and only consisted of making inquiries and considering the directors’ process 
supporting their statements; checking that the statements are in alignment with the relevant provisions of the UK Corporate 
Governance Code (the ‘Code’); and considering whether the statements are consistent with the knowledge and understanding 
of the Group and Company and their environment obtained in the course of the audit. (Listing Rules)
Other Code Provisions
We have nothing to report in respect of our responsibility to report when: 
 – The statement given by the directors, on page 102, that they consider the Annual Report taken as a whole to be fair, balanced 
and understandable, and provides the information necessary for the members to assess the Group’s and Company’s position 
and performance, business model and strategy is materially inconsistent with our knowledge of the Group and Company 
obtained in the course of performing our audit.

 – The section of the Annual Report on pages 121 to 126 describing the work of the Audit and Risk Committee does not 

appropriately address matters communicated by us to the Audit and Risk Committee.

 – The directors’ statement relating to the Company’s compliance with the Code does not properly disclose a departure from 

a relevant provision of the Code speciﬁed, under the Listing Rules, for review by the auditors.

Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the 
Companies Act 2006. (CA06)

164   |  U and I Group PLC
Annual Report & Accounts 2019

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Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to 
you if, in our opinion:
 – we have not received all the information and explanations 

we require for our audit; or

 – adequate accounting records have not been kept by the 

Company, or returns adequate for our audit have not been 
received from branches not visited by us; or

 – certain disclosures of directors’ remuneration speciﬁed by 

law are not made; or

 – the Company ﬁnancial statements and the part of the 

Directors’ Remuneration Report to be audited are not in 
agreement with the accounting records and returns. 

We have no exceptions to report arising from this 
responsibility. 

Appointment
Following the recommendation of the Audit and Risk 
Committee, we were appointed by the members on 28 May 
2008 to audit the ﬁnancial statements for the year ended 
31 December 2008 and subsequent ﬁnancial periods. The 
period of total uninterrupted engagement is 11 years, covering 
the years ended 31 December 2008 to 31 March 2019.

Sandra Dowling (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London

21 May 2019

Responsibilities for the ﬁnancial statements and the audit
Responsibilities of the directors for the ﬁnancial statements
As explained more fully in the Statement of Directors’ 
Responsibilities set out on page 156, the directors are 
responsible for the preparation of the ﬁnancial statements in 
accordance with the applicable framework and for being 
satisﬁed that they give a true and fair view. The directors are 
also responsible for such internal control as they 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 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 Company or to cease 
operations, or have no realistic alternative but to do so.

Auditors’ 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 auditors’ report that includes our opinion. Reasonable 
assurance is a high level of assurance, but is not a guarantee 
that an audit conducted in accordance with ISAs (UK) will 
always detect a material misstatement when it exists. 
Misstatements can arise from fraud or error and are considered 
material if, individually or in the aggregate, they could 
reasonably be expected to inﬂuence the economic decisions 
of users taken on the basis of these ﬁnancial statements. 

A further description of our responsibilities for the audit of the 
ﬁnancial statements is located on the FRC’s website at: www.
frc.org.uk/auditorsresponsibilities. This description forms part 
of our auditors’ report.

Use of this report
This report, including the opinions, has been prepared for and 
only for the Company’s members as a body in accordance 
with Chapter 3 of Part 16 of the Companies Act 2006 and for 
no other purpose. We do not, in giving these opinions, accept 
or assume responsibility for any other purpose or to any other 
person to whom this report is shown or into whose hands it 
may come save where expressly agreed by our prior consent 
in writing.

165  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 13-MONTH PERIOD ENDED 31 MARCH 2019

Revenue
Direct costs
Gross proﬁt
Operating costs
(Loss)/gain on disposal of investment properties
Loss on revaluation of property portfolio
Operating (loss)/proﬁt 
Other income
Share of post-tax proﬁts of joint ventures and associates
Proﬁt from sale of investments
(Loss)/gain on sale of other plant and equipment
Proﬁt before interest and income tax
Finance income
Finance costs
Proﬁt before income tax
Income tax
Proﬁt for the period/year

OTHER COMPREHENSIVE INCOME
Proﬁt for the period/year
Items that may be subsequently reclassiﬁed to proﬁt or loss:
Currency translation differences
Revaluation of operating property
Total comprehensive income for the period/year
Basic earnings per share attributable to the Parent*
Diluted earnings per share attributable to the Parent*

*  Adjusted earnings per share from continuing activities is given in note 8.

13-month 
period ended
31 March 
2019
Total
£’000
150,310
(123,449)
26,861
(21,859)
(223)
(11,165)
(6,386)
2,547
12,128
3,888
(42)
12,135
617
(6,432)
6,320
(1,120)
5,200

Year ended
28 February 
2018
Total
£’000
173,684
(117,477)
56,207
(24,235)
3,324
(2,417)
32,879
2,089
16,175
6,713
5
57,861
94
(9,783)
48,172
(7,916)
40,256

5,200

40,256

163
40
5,403
4.2p
4.2p

292
35
40,583
32.2p
32.2p

Notes
2
2
2
2
2
9
3

2
2

5(a)
5(b)

6

10

8
8

All amounts in the Consolidated Statement of Comprehensive Income relate to continuing operations.

The notes on pages 170 to 213 are an integral part of these Consolidated ﬁnancial statements.

166  |  U and I Group PLC
Annual Report & Accounts 2019

CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH 2019

NON-CURRENT ASSETS
Direct real estate interests
Investment properties
Operating property
Trade and other receivables

Indirect real estate interests
Investments in associates
Investments in joint ventures
Intangible assets – goodwill
Financial assets at amortised cost
Financial assets at fair value through proﬁt or loss
Financial assets − available-for-sale
Financial assets at fair value through other comprehensive income

Other non-current assets
Other plant and equipment
Derivative ﬁnancial instruments
Deferred income tax assets

Total non-current assets
CURRENT ASSETS
Inventory – development and trading properties
Financial assets at amortised cost
Financial assets – available-for-sale
Financial assets at fair value through proﬁt or loss
Trade and other receivables
Monies held in restricted accounts and deposits
Cash and cash equivalents

Total assets
CURRENT LIABILITIES
Trade and other payables
Current income tax liabilities
Borrowings
Provisions 

NON-CURRENT LIABILITIES
Borrowings
Deferred income tax liabilities
Provisions

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Notes

£’000

31 March 2019
£’000

28 February 2018
£’000

£’000

9
10
15(a)

154,041
750
4,617

139,506
775
2,487

159,408

142,768

13(a)
13(b)
11
17(a)
17(a)
17(a)
17(a)

12
17(c)
18

14
17(a)
17(a)
17(a)
15(b)

5,763
103,870
2,328
3,204
13,244
–
1,271

4,594
–
1,294

203,759
8,962
–
13,672
60,426
8,841
31,911

16(a)

17(b)
16(b)

(77,286)
(1,230)
(37,394)
(36)

17(b)
18
16(b)

(142,362)
(3,448)
(646)

–
92,806
2,328
−
–
15,812
–

129,680

110,946

4,241
10
1,225

5,888
294,976

5,476
259,190

216,393
8,888
7,949
–
119,629
11,473
40,626

327,571
622,547

404,958
664,148

(99,716)
(7,748)
(63,209)
(2,513)

(115,946)

(173,186)

(107,975)
(3,290)
(416)

(146,456)
(262,402)
360,145

(111,681)
(284,867)
379,281

62,671
104,475
56,628
155,507

360,145
289p/289p

379,281
303p/303p

Total liabilities
Net assets
EQUITY
Share capital
Share premium
Other reserves
Retained earnings
Total equity 
Basic/diluted net assets per share attributable to the owners of the Parent

62,716
104,590
54,457
138,382

19
20
20
20

8

The notes on pages 170 to 213 are an integral part of these Consolidated ﬁnancial statements.
Approved and authorised for issue by the Board of Directors on 21 May 2019 and signed on its behalf by:

M S Weiner
Director

167  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 13-MONTH PERIOD ENDED 31 MARCH 2019

At 1 March 2017
Proﬁt for the year ended 28 February 2018
Other comprehensive income:
– Revaluation of operating property
– Currency translation differences
Total comprehensive income for the year ended 
28 February 2018
Issue of Ordinary shares
Share-based payments
Final dividend 2017
Supplemental dividend 2017 
Interim dividend 2018
Total contributions by and distributions to owners 
of the Company
Balance at 28 February 2018
Proﬁt for the 13-month period ended  
31 March 2019
Other comprehensive income:
– Revaluation of operating property
– Currency translation differences
Total comprehensive income for the period ended 
31 March 2019
Issue of Ordinary shares
Share-based payments (net movement)
Treasury shares (net movement)
Final dividend 2018
Supplemental dividend 2018
Interim dividend 2019
Total contributions by and distributions to owners 
of the Company
Balance at 31 March 2019

Notes

Share  
capital
£’000
62,613
–

Share 
premium 
£’000
104,325
–

Other 
reserves 
£’000
54,551
–

Retained 
earnings 
£’000
126,136
40,256

Total  

equity
£’000
347,625
40,256

20
20
7
7
7

20
20
20
7
7
7

–
–

–
58
–
–
–
–

–
–

–
150
–
–
–
–

35
292

327
–
1,750
–
–
–

–
–

40,256
–
–
(4,379)
(3,503)
(3,003)

35
292

40,583
208
1,750
(4,379)
(3,503)
(3,003)

58
62,671

150
104,475

1,750
56,628

(10,885)
155,507

(8,927)
379,281

–

–
–

–
45
–
–
–
–
–

–

–
–

–
115
–
–
–
–
–

–

5,200

5,200

40
163

203
–
(1,081)
(1,293)
–
–
–

–
–

40
163

5,200
–
109
–
(4,390)
(15,033)
(3,011)

5,403
160
(972)
(1,293)
(4,390)
(15,033)
(3,011)

45
62,716

115
104,590

(2,374)
54,457

(22,325)
138,382

(24,539)
360,145

The notes on pages 170 to 213 are an integral part of these Consolidated ﬁnancial statements.

168  |  U and I Group PLC
Annual Report & Accounts 2019

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CONSOLIDATED CASH FLOW STATEMENT
FOR THE 13-MONTH PERIOD ENDED 31 MARCH 2019

Notes

21

31 March 
2019
£’000

28 February 
2018
£’000

31,562
(7,189)
(7,550)
16,823

417
10
7,293
10,506
(1,225)
(30,496)
(31,351)
–
–
17,654
8,998
(3,784)
10,518
(11,460)

(22,434)
160
(1,293)
(38,233)
46,013
(923)
31,910
(29,278)
(14,078)
(8,715)

40,626
–
31,911

(211)
(9,140)
(296)
(9,647)

3,803
5
39,253
−
(822)
(2,432)
(31,535)
4,000
6,482
−
972
(5,676)
10,455
24,505

(10,885)
208
−
(120,529)
118,110
(922)
27,434
(11,421)
1,995
16,853

23,785
(12)
40,626

17(b)

31,911
–
31,911

40,626
–
40,626

8,841
31,911

11,473
40,626

17(b)
17(b)

(37,394)
(142,362)
(139,004)

(63,209)
(107,975)
(119,085)

CASH GENERATED FROM/(USED IN) OPERATIONS
Cash ﬂows generated from/(used in) operating activities
Interest paid
Income tax paid
Net cash generated from/(used in) operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Proceeds on disposal of other plant and equipment
Proceeds on disposal of investment properties
Proceeds from sale of investments
Purchase of other plant and equipment
Purchase of investment properties
Investment in joint ventures 
Cash inﬂow from joint ventures and associates – disposals 
Cash inﬂow from joint ventures and associates – proﬁt distribution 
Cash inﬂow from joint ventures and associates – dividends
Cash inﬂow from joint ventures and associates – repayment of loan
Cash outﬂow for ﬁnancial asset loans
Cash inﬂow from ﬁnancial assets – loans repaid by other real estate businesses
Net cash (used in)/generated from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid
Issue of new shares
Purchase of treasury shares
Repayments of borrowings
New bank loans raised
Transaction costs associated with borrowings
Cash released from restricted accounts
Cash retained by restricted accounts
Net cash (used in)/generated from ﬁnancing activities
Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the year
Exchange loss on cash and cash equivalents
Cash and cash equivalents at the end of the period/year

CASH AND CASH EQUIVALENTS COMPRISE:
Cash at bank and in hand
Bank overdrafts
Cash and cash equivalents at the end of the period/year

NET DEBT COMPRISES:
Monies held in restricted accounts and deposits
Cash and cash equivalents
Financial liabilities:
– Current borrowings
– Non-current borrowings
Net debt

An analysis of the movement in net debt is provided in note 21.

The notes on pages 170 to 213 are an integral part of these Consolidated ﬁnancial statements.

169  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE 13-MONTH PERIOD ENDED 31 MARCH 2019

1 Basis of preparation and 
accounting policies
a)
(i) General information
The Consolidated ﬁnancial 
statements of the Group for 
the 13-month period ended 
31 March 2019 comprise the 
results of U and I Group PLC 
and its subsidiaries and were 
authorised by the Board for 
issue on 21 May 2019.

The Company is a public 
limited company which is 
listed on the London Stock 
Exchange and is incorporated 
and domiciled in the UK. 
The address of its registered 
ofﬁce is 7A Howick Place, 
London SW1P 1DZ.

(ii) Going concern
The Group meets its day to 
day working capital 
requirements through its cash 
reserves and bank facilities. 
The current economic 
conditions continue to create 
uncertainty. The Group 
produces regular forecasts 
and cash ﬂow projections to 
conﬁrm that it can continue to 
operate within the level of its 
existing banking facilities. The 
Group considers the risks and 
uncertainties highlighted in 
the Viability Statement when 
reviewing its projections. 
Following this review, 
the Directors consider it 
appropriate to adopt the going 
concern basis of accounting 
in preparing its Consolidated 
ﬁnancial statements.

b) Basis of preparation
The Group’s ﬁnancial 
statements have been 
prepared in accordance with 
International Financial 
Reporting Standards (IFRSs) 
and IFRS Interpretations 
Committee (IFRSIC) 
interpretation as adopted by 
the European Union and with 
the Companies Act 2006 
applicable to companies 
reporting under IFRS. The 
accounting policies which 
follow set out those policies 
which were applied 
consistently in preparing the 
ﬁnancial statements for the 
13-month period ended 
31 March 2019 and the year 
ended 28 February 2018.

170  |  U and I Group PLC
Annual Report & Accounts 2019

The Consolidated ﬁnancial 
statements have been 
prepared on a going concern 
basis and under the historical 
cost convention, as modiﬁed 
by the revaluation of 
investment property, 
operating property, ﬁnancial 
assets classiﬁed as fair value 
through proﬁt or loss (FVPL) 
or fair value through other 
comprehensive income 
(FVOCI), ﬁnancial liabilities 
and derivative instruments 
at fair value through proﬁt 
and loss.

c) Critical accounting 
judgements and estimates
When preparing the Group 
ﬁnancial statements, 
management are required to 
make judgements, 
assumptions and estimates 
concerning the future. These 
judgements and assumptions 
are made at the time the 
ﬁnancial statements are 
prepared and adopted based 
on the best information 
available. Actual outcomes 
may be different from initial 
estimates and are reﬂected in 
the ﬁnancial statements as 
soon as they become 
apparent. Management 
believe that the underlying 
assumptions are appropriate. 
Areas requiring judgements 
or estimates are discussed in 
the following section.

Judgements other than 
estimates
1.1 Classiﬁcation of directly 
owned property assets
The Group earns revenue 
from property development, 
trading and investment, and 
operating serviced ofﬁces.

Property development 
includes the entire 
development process from 
identiﬁcation of an 
opportunity through to 
construction, letting and sale 
of a completed scheme. This 
activity is undertaken both on 
the Group’s own Balance 
Sheet and in partnership with 
institutional investors, usually 
via a pre-sale of the 
completed development.

Property trading refers 
to participation in the 
development process, 
where the Group acquires an 
interest in land and enhances 
the potential development, 
for instance by procuring 
or changing planning 
permission, before selling on 
to a third party to complete 
the development.

Property investment 
represents the acquisition 
of income-generating real 
estate which is held for the 
purposes of income and 
capital gain, through active 
asset management.

In most cases the property 
interest is held directly by the 
Group and is classiﬁed either 
as investment property (refer 
note 9) or as inventory for 
development and trading 
properties (refer note 14).

The varied nature of the 
Group’s properties is such 
that a number exhibit 
characteristics consistent with 
more than one classiﬁcation; 
also, the Directors’ strategy 
for an asset may change 
during its ownership. The 
Directors determine the status 
of each asset according to 
their intention on acquisition. 
A change in classiﬁcation is 
made only in exceptional 
circumstances, where the 
strategy and use have 
demonstrably changed. Two 
assets have been reclassiﬁed 
from inventory to investment 
properties during the period 
(refer note 9).

1.2 Classiﬁcation of projects 
in partnership
In addition to its directly 
owned and managed 
activities, the Group 
participates in similar 
activities in partnership with 
others, typically to access 
expertise in different 
locations or market sectors. 
The Group’s ﬁnancial 
participation may be by way 
of equity investment or loan. 
In each case a judgement is 
required as to the status of 
the Group’s interest, as an 
associate, a joint venture, a 
joint operation or a ﬁnancial 

asset, typically focusing on 
the extent of control 
exercised by the Group.

The Group’s share of control 
is governed and achieved by 
a mixture of rights set out in 
agreements and participation 
in the management of each 
business. The exercise of 
control in practice does not 
always follow the legal 
structure. The Directors have 
considered the position in 
respect of each venture, 
taking account of the 
operation in practice, and 
have determined the status 
of each accordingly.

These investments are 
reported under the relevant 
balance sheet headings, with 
a summary in note 26.

1.3 Acquisition of subsidiaries
The Group sometimes 
acquires properties through 
the purchase of entities which 
own real estate. At the time of 
acquisition, the Group 
considers whether the 
transaction represents the 
acquisition of a business. 
In cases where the entity is 
capable of being operated as 
a business, or an integrated 
set of activities is acquired in 
addition to the property, the 
Group accounts for the 
acquisition as a business 
combination. When the 
acquisition does not represent 
a business, it is accounted 
for as the purchase of a 
group of assets and liabilities. 
In making this distinction, the 
Group considers the number 
of items of land and buildings 
owned by the entity, the 
extent of ancillary services 
provided by the entity, and 
whether the entity has its own 
staff to manage the property 
(over and above the 
maintenance and security of 
the premises).

Estimates
1.4 Valuation of property 
assets
The key source of estimation 
uncertainty rests in the values 
of property assets, which 
affects several categories of 
assets in the Consolidated 
Balance Sheet.

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The investment portfolio (and 
the operating property) are 
stated at fair value, which 
requires a number of 
judgements and estimates in 
assessing the qualities of the 
Group’s assets relative to 
market transactions. Details 
of the judgements and 
assumptions made are set 
out in notes 1(i), 1(j), 9 and 10.

The same uncertainties affect 
the determination of fair value 
of certain ﬁnancial 
instruments, described in 
note 17, with the further 
complexity that the value of 
these assets requires 
estimates of future 
construction costs, tenant 
demand and market yields.

The Group’s development 
and trading properties are 
carried at the lower of cost 
and net realisable value. 
The determination of net 
realisable value relies upon 
similar estimates, with the 
added challenge, in some 
cases, of judgements about 
uncertain planning outcomes. 
These amounts are disclosed 
in note 14.

1.5 Impairment reviews
During the period, the Curzon 
Park site was subject to a 
compulsory purchase order 
(CPO) and the Group 
received an initial payment of 
compensation. The Directors 
are continuing their 
negotiations with the 
Government regarding the 
ﬁnal settlement due for the 
site. The timing and amount 
of future receipts remain 
uncertain, however, following 
consultations with CPO 
advisors as to the minimum 
amount expected to receive, 
the Directors have reversed 
£4,613,000 of the impairment 
previously booked against 
the Group’s joint venture 
holding. The expected credit 
loss in respect of the site is 
discussed further in note 17(a).

171  |  U and I Group PLC
Annual Report & Accounts 2019

1.6 Derivative ﬁnancial 
instruments
The Group is party to a 
number of interest rate swap 
agreements which are 
accounted for as derivatives 
and measured at fair value. 
The estimation of this ﬁgure 
is based upon market 
assumptions about future 
movements in interest and 
exchange rates. The 
estimated fair values and the 
movements in the period/year 
are set out in note 17(c).

1.7 Group Long-Term 
Incentive Plan (LTIP)
During the period, the Group 
made awards to staff under 
the Group’s LTIP. The awards 
vest according to a number 
of performance criteria, the 
primary measure being net 
asset value growth over a 
three-year period. In 
calculating the provision to 
accrue, management are 
required to estimate net asset 
growth over the vesting 
period. The estimate is 
reassessed at each reporting 
date. Following assessment, 
the 2016 LTIP will not vest 
and previous provisions have 
been reversed.

1.8 Revenue
The Group develops and sells 
properties. The development 
or sale contract will specify 
certain conditions which need 
to be satisﬁed and considered 
highly probable in order for 
revenue to be recognised. The 
Directors need to consider 
the terms within each contract 
in order to determine the 
amount and when revenue is 
recognised. The Directors will 
also need to consider the 
certainty surrounding the 
payment of contingent or 
variable consideration. 

d) New and amended 
accounting standards
The following new standards 
and amendments have 
been adopted by the Group 
for the ﬁrst time for the 
ﬁnancial period beginning 
1 March 2018:
 – IFRS 9, Financial 

Instruments

 – IFRS 15, Revenue from 

Contracts with Customers

 – Amendments to IAS 40, 
Investment Property

 – The Group has amended 
its accounting policies 
following the adoption of 
IFRS 9 and IFRS 15.

The Group adopted the 
amendments to IAS 40 using 
the prospective application 
method as permitted by the 
standard. The Group has 
assessed the impact of the 
amendment on the 
classiﬁcation of existing 
property as at 1 March 2018 
and has concluded that no 
reclassiﬁcations are required 
on adoption of the 
amendment.

A number of new standards, 
amendments and 
interpretations are effective 
for accounting periods 
commencing after 1 March 
2019 and have not been 
applied in preparing these 
ﬁnancial statements. The 
Group does not expect any 
of the amendments to have 
a material impact on its 
ﬁnancial statements of the 
Group or Company, except 
as stated below:
 – IFRS 16, ‘Leases’, was 

issued in January 2016 and 
is mandatory for the 
accounting period 
commencing 1 April 2019, 
with early adoption 
permitted. Under the new 
standard, the key change is 
that most operating leases 
will be accounted for on 
balance sheet for lessees, 
with the exception of 
short-term and low-value 
leases. Under the new 
standard, an asset (the 
right to use the leased item) 
and a ﬁnancial liability to 
pay future rentals are 
recognised. The Group is 
currently assessing the 
impact of IFRS 16 on its 
current accounting 
practices. It is estimated 
that its implementation will 
increase both the assets 
and liabilities of the Group 
by approximately 
£13.2 million. 
Implementation will not 
have a material impact on 
the Group’s Income 
Statement or net assets.

 – IFRIC 23, ‘Uncertainty over 
income tax treatments’ was 
issued in June 2017 and 
clariﬁes the application of 
recognition and 
measurement requirement 
in IAS 12, ‘Income Taxes’, 
when there is uncertainty 
over income tax 
treatments. IFRIC 23 is 
effective for the accounting 
period commencing 1 April 
2019, with early adoption 
permitted. The Group is 
currently assessing the 
impact of IFRIC 23.
 – Amendment to IFRS 3, 

‘Business combinations’ 
is effective for periods 
beginning on or after 
1 January 2020 with earlier 
application permitted and 
relates to whether a 
transaction meets the 
deﬁnition of a business 
combination. The 
amendment clariﬁes the 
deﬁnition of a business and 
gives the option for an 
entity to assess whether 
substantially all of the fair 
value of the gross assets 
acquired is concentrated in 
a single asset or group of 
assets. If such a 
concentration exists, the 
transaction is not viewed 
as an acquisition of a 
business and no further 
assessment is required. 
This will be relevant where 
the value of the acquired 
entity is concentrated in 
one property or a group of 
similar properties. There 
will be no impact on 
transition since the 
amendments are effective 
for business combinations 
acquired on or after the 
transition date.

There are no other IFRSs or 
IFRIC interpretations that are 
not yet effective that would 
be expected to have a 
material impact on the Group.

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

1 Basis of preparation and accounting policies continued
d) New and amended accounting standards continued
Changes in accounting policies
This note provides a summary of the impact of the adoption of IFRS 9 ‘Financial Instruments’ and IFRS 15 ‘Revenue from 
Contracts with Customers’ on the Group’s Consolidated ﬁnancial statements.

Impact on the Consolidated ﬁnancial statements
As a result of the changes in the Group’s accounting policies, the prior year Consolidated ﬁnancial statements have been 
restated. Adoption of IFRS 9 has resulted in the reclassiﬁcation of various ﬁnancial assets. The reclassiﬁcation is not reﬂected 
as at 28 February 2018 but are recognised in the opening Consolidated statement of ﬁnancial position on 1 March 2018. 

Adoption of IFRS 15 did not result in any restatement of the 2018 Consolidated ﬁnancial statements. There was no impact from 
the adoption of IFRS 9 and IFRS 15 on retained reserves of the Group.

Any future gains or losses in respect of Financial assets through OCI will be recorded in the Net unrealised gain reserve.

The table below shows the adjustments for each individual line item:

NON-CURRENT ASSETS
Direct real estate interests
Investment properties
Operating property
Trade and other receivables

Indirect real estate interests
Investments in joint ventures
Intangible assets – goodwill
Financial assets at fair value through proﬁt or loss (FVPL)
Financial assets − available-for-sale
Financial assets at fair value through other comprehensive income (FVOCI)

Other non-current assets
Other plant and equipment
Derivative ﬁnancial instruments
Deferred income tax assets

Total non-current assets

CURRENT ASSETS
Inventory – development and trading properties
Financial assets at amortised cost
Financial assets available-for-sale
Financial assets at fair value through proﬁt or loss
Trade and other receivables
Current income tax asset
Monies held in restricted accounts and deposits
Cash and cash equivalents

28 February 
2018
as originally 
presented
£’000

IFRS 9
£’000

1 March 2018
restated
£’000

139,506
775
2,487
142,768

92,806
2,328
–
15,812
–
110,946

4,241
10
1,225
5,476
259,190

216,393
8,888
7,949
–
119,629
–
11,473
40,626
404,958

–
–
–
–

–
–
14,527
(15,812)
1,285
–

–
–
–
–
−

–
–
(7,949)
7,949
–
–
–
–
–

139,506
775
2,487
142,768

92,806
2,328
14,527
–
1,285
110,946

4,241
10
1,225
5,476
259,190

216,393
8,888
–
7,949
119,629
–
11,473
40,626
404,958

Total assets

664,148

–

664,148

172  |  U and I Group PLC
Annual Report & Accounts 2019

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i. IFRS 9 Financial Instruments 

IFRS 9 replaces the 
provisions of IAS 39 that 
relate to the recognition, 
classiﬁcation and 
measurement of ﬁnancial 
assets and ﬁnancial liabilities, 
derecognition of ﬁnancial 
instruments, impairment of 
ﬁnancial assets and hedge 
accounting.

The adoption of IFRS 9 
resulted in changes to 
accounting policies and 
adjustments to the amounts 
recognised in the 
Consolidated ﬁnancial 
statements. The new 
accounting policies are set 
out in note 1 (n). There has 
been no impact on the 
Group’s retained earnings 
following the adoption of 
IFRS 9.

On the date of initial 
application, 1 March 2018, 
the measurement categories 
of ﬁnancial instruments of the 
Group were as shown in the 
table below.

Development loans 
Development loans have 
been reclassiﬁed from 
available-for-sale ﬁnancial 
assets to FVPL as payments 
do not comprise solely of 

principal and interest 
receipts. They are held in 
order to participate in 
potential future proﬁts. 
Any adjustment to fair value 
will be recognised in proﬁt 
or loss.

La Salle Investment
The Group’s investment in the 
La Salle investment fund is 
classiﬁed as FVOCI as the 
return to the Group is 
achieved by selling the assets 
within the fund. This ﬁnancial 
asset has been reclassiﬁed 
from available-for-sale.

Impairment of ﬁnancial assets
The Group has the following 
types of ﬁnancial assets that 
are subject to IFRS 9’s new 
expected credit loss model:
 – Trade receivables for sales 
of inventory and investment 
assets

 – Trade receivables for 
investment property 
tenants

 – Loan notes and loans and 
receivables from other real 
estate businesses

Under IFRS 9, the Group is 
required to revise its 
impairment methodology for 
the class of ﬁnancial assets 
above. From 1 March 2018, 
the Group has to assess on 
a forward-looking basis the 

expected losses associated 
with its debt instruments 
carried at amortised cost and 
FVOCI. The impairment 
methodology depends on 
whether there has been a 
signiﬁcant increase in 
credit risk. 

IFRS 9 Accounting policies 
applied and calculations of 
provisions are detailed in 
note 1(n).

ii. IFRS 15 Revenue from 
Contract with Customers

Impact of adoption
The Group has adopted IFRS 
15 ‘Revenue from Contracts 
with Customers’ from 
1 March 2018 and as a result 
has reviewed its income 
streams to establish whether 
the policy changes have 
resulted in adjustments to the 
amounts recognised in the 
28 February 2018 ﬁnancial 
statements.

IFRS 15 is based on the 
principle that revenue is 
recognised when control of a 
good or service is transferred 
to a customer. It contains 
a single model that applies 
to contracts with customers 
and two approaches to 
recognising revenue: at a 
point in time or over time. 

The model features a 
contract-based ﬁve-step 
analysis of transactions to 
determine whether, how 
much and when revenue is 
recognised. It applies to all 
contracts with customers 
except leases, ﬁnancial 
instruments and insurance 
contracts. It requires 
reporting entities to provide 
users of ﬁnancial statements 
with more informative and 
relevant disclosures.

Revenue is recognised over 
time if:
 – The customer 

simultaneously receives 
and consumes the beneﬁts 
as the entity performs

 – The customer controls the 
asset as the entity creates 
or enhances it or

 – The seller’s performance 
does not create an asset 
for which the seller has an 
alternative use and there is 
a right to payment for 
performance to date.

Where the above criteria is 
not met, revenue is 
recognised at a point in time.

Development loans
La Salle investment
Derivative ﬁnancial instruments
Loan notes
Trade and other receivables
Cash and cash equivalents

Original (IAS 39)
Available-for-sale
Available-for-sale
FVPL
Amortised cost
Available-for-sale
Amortised cost

IAS 39  

carrying value
£’000
14,527
1,285
10
8,888
7,949
40,626

New (IFRS 9)
FVPL
FVOCI
FVPL
Amortised cost
FVPL
Amortised cost

IFRS 9  

carrying value
£’000
14,527
1,285
10
8,888
7,949
40,626

173  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

1 Basis of preparation and accounting policies continued
d) New and amended accounting standards continued
The following table summarises the changes in terminology with respect to the timing of revenue recognition between IAS 11 
and IAS 18 compared to IFRS 15 and the new revenue recognition policies under IFRS 15. From our assessment of when 
performance obligations are satisﬁed, there is no change in the timing of revenue recognition when comparing the previous 
accounting policies to those now under IFRS 15.

Type of revenue
Project management fees 

Trading property sales

Development proceeds

Description
The Group provides project management 
services on pre-funded or sold development 
schemes and earns fees over the course of a 
development contract term. Fees are invoiced 
monthly in line with draw down requests.
Sales of inventory are recognised when 
signiﬁcant conditions of the contract have been 
satisﬁed, this is generally on unconditional 
exchange of contracts.

Development revenue is recognised to match 
the proportion of development work completed 
on a percentage completion basis as 
determined by consultant monitoring surveyors 
or by a suitable method particular to the 
contract. The Group will only recognise revenue 
when the outcome can be determined with 
reasonable certainty.

Revenue recognition policy 
under IAS 11 and IAS 18
Recognised on an 
accruals basis based 
on the contract terms.

Revenue recognition policy 
under IFRS 15
Over time

Recognised once the 
risks and rewards of 
ownership have 
transferred to the 
purchaser.
Recognised once the 
risks and rewards of 
ownership have 
transferred to the 
purchaser.

Point in time

Over time

being the date on which the 
Group obtains control. They 
are deconsolidated on the 
date that control ceases. 

Where property is acquired, 
via corporate acquisition or 
otherwise, management 
consider the substance of the 
assets and activities of the 
acquired entity in determining 
whether the acquisition 
represents the acquisition 
of a business. The basis of 
the judgement is set out in 
note 1(c), 1.3.

Where such acquisitions 
are not judged to be an 
acquisition of a business, 
they are not treated as 
business combinations. 
Rather, the cost to acquire 
the corporate entity is 
allocated between the 
identiﬁable assets and 
liabilities of the entity based 
on their relative fair values at 
the acquisition date. 
Accordingly, no goodwill or 
additional deferred taxation 
arises. Otherwise, 
acquisitions are accounted 
for as business combinations.

Business combinations are 
accounted for under the 
acquisition method. Any 
excess of the purchase price 
of the business combination 
over the fair value of the 
identiﬁable assets and 
liabilities acquired is 
recognised as goodwill. 
Goodwill is tested annually 
for impairment and carried 
at cost less accumulated 
impairment losses.

If the business combination 
is achieved in stages, the 
acquisition date carrying 
value of the acquirer’s 
previously held interest in the 
acquiree is re-measured to 
fair value at the acquisition 
date. Any gains or losses 
arising from re-measurement 
are recognised in proﬁt 
or loss.

The consideration transferred 
for the acquisition of a 
subsidiary is the fair value of 
the assets transferred, the 
liabilities incurred and the 
equity interests issued by the 
Group. This fair value 
includes any contingent 
consideration at the 
acquisition date. Any 

subsequent change to the 
fair value of the contingent 
consideration that is deemed 
to be an asset or liability is 
recognised with either the 
proﬁt or loss recognised in 
the income statement.

Acquisition-related costs are 
expensed as incurred.

The Group recognises any 
non-controlling interest on 
an acquisition-by-acquisition 
basis either at fair value or at 
the non-controlling interest’s 
proportionate share of the 
identiﬁable net assets 
acquired.

Intra-Group balances and 
any unrealised gains and 
losses arising from intra-
Group transactions are 
eliminated in preparing the 
Consolidated ﬁnancial 
statements. Where 
necessary, adjustments have 
been made to the ﬁnancial 
statements of subsidiaries, 
associates and joint ventures 
to bring the accounting 
policies used and accounting 
periods into line with those of 
the Group.

Summary of signiﬁcant 
accounting policies
e) Basis of consolidation
The Consolidated ﬁnancial 
statements of the Group 
include the ﬁnancial 
statements of U and I Group 
PLC (the Company), its 
subsidiaries and its share of 
results of joint ventures and 
associates.

Subsidiaries are all entities 
(including special purpose 
entities) over which the 
Group has control. The 
Group has control when it 
has rights to variable returns 
from its involvement in the 
entity and has the ability to 
affect those returns through 
its power over the entity. 
The Group is deemed to have 
control where it does not 
have more than 50% of the 
voting power but is able to 
govern the ﬁnancial and 
operating policies by virtue 
of defacto control, taking 
account of how the entity 
operates in practice.

The results of subsidiaries 
acquired during the period 
are included from the 
effective date of acquisition, 

174  |  U and I Group PLC
Annual Report & Accounts 2019

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i.  Rental income is 

recognised on a straight-
line basis over the term of 
the lease. Incentives for 
lessees to enter into lease 
agreements are spread 
evenly over the lease term, 
even if payments are not 
made on such a basis. 
The lease term is the 
non-cancellable period of 
the lease together with 
any further term for which 
the tenant has the option 
to continue the lease, 
where, at inception of the 
lease, the Directors are 
reasonably certain that 
the tenant will exercise 
that option. Lease 
incentives are usually in 
the form of rent-free 
periods and/or capital 
contributions. Assets held 
within both the investment 
and development and 
trading segments earn 
rental income.

ii.  Lease surrender payments 

from tenants are 
recognised in income 
when they are 
contractually agreed.

iii.  Trading property sales are 
recognised when the 
signiﬁcant conditions of 
the contract have been 
satisﬁed, which is 
normally on unconditional 
exchange of contracts. 
For conditional 
exchanges, sales are 
recognised only when 
all of the signiﬁcant 
conditions are satisﬁed.
iv.  Licence fee income from 

serviced ofﬁces is 
recognised on a straight-
line basis over the term of 
the licence. Other income 
from serviced ofﬁces is 
recognised when the 
service is provided. 
v.  Project management fee 
income is recognised 
overtime in conjunction 
with the contract term for 
which project management 
services are provided.

frequently if circumstances 
change, for impairment and 
carried at cost less 
accumulated impairment 
losses. Any impairment is 
recognised immediately as an 
expense and is not 
subsequently reversed. Gains 
and losses on the disposal of 
an entity include the carrying 
amount of goodwill relating 
to the entity sold.

Goodwill is allocated to 
cash-generating units 
(CGUs) for the purpose of 
impairment testing. The 
allocation is made to those 
CGUs that are expected to 
beneﬁt from the business 
combination in which the 
goodwill arose, identiﬁed 
according to operating 
segment.

(ii) Impairment of non-
ﬁnancial assets
Assets that have an indeﬁnite 
useful life, for example 
goodwill, are not subject to 
amortisation and are tested 
annually for impairment. 
Assets that are subject to 
amortisation are reviewed for 
impairment whenever events 
or changes in circumstances 
indicate that the carrying 
amount may not be 
subsequently reversed. An 
impairment loss is recognised 
for the amount by which the 
asset’s carrying amount 
exceeds its recoverable 
amount. The recoverable 
amount is the higher of an 
asset’s fair value less costs 
to sell and value-in-use. For 
the purposes of assessing 
impairment, assets are 
grouped at the lowest levels 
for which there are separately 
identiﬁable cash ﬂows 
(CGUs). Prior impairment of 
non-ﬁnancial assets, other 
than goodwill, are reviewed 
for possible reversal at each 
reporting date.

h) Revenue recognition
The Group recognises 
revenue when it is highly 
probable and when the 
speciﬁc criteria have been 
met for each of the Group’s 
activities as described below.

vi.  Development revenue and 
proﬁts are recognised in 
accordance with IFRS 15, 
‘Revenue from Contracts 
with Customers’ and IFRIC 
15 ‘Agreements for the 
Construction of Real 
Estate’. Where only the 
construction risk remains, 
the revenue and proﬁt on 
the development are 
recognised so as to match 
the proportion of 
development work 
completed on a 
percentage completion 
basis as determined by 
consultant monitoring 
surveyors or using a 
suitable method particular 
to the contract concerned. 
The Group will only 
recognise revenue when 
the outcome can be 
determined with 
reasonable certainty. 
Full provision is made for 
losses as soon as such 
losses are foreseen. 
Proﬁts are recognised 
within the development 
and trading segment.

  Some development 

contracts may include 
multiple elements. In such 
cases, the Group 
assesses whether 
individual elements have 
separate performance 
obligations. Where 
separate performance 
obligations exist, the 
transaction price will be 
allocated between each 
component based on 
stand-alone selling prices. 
Where selling prices are 
not identiﬁable, they are 
estimated based on an 
expected cost plus margin 
method.

vii. Finance income is 

recognised by reference 
to the principal 
outstanding using the 
effective interest method 
and is included in Finance 
income in the income 
statement.

viii. Dividend income from 

investments is recognised 
when the Group’s right to 
receive income has been 
established.

f) Associates and joint 
ventures
An associated company is 
deﬁned as an undertaking 
other than a subsidiary or 
joint venture over which the 
Group has signiﬁcant 
inﬂuence but not control, 
generally accompanying 
a shareholding of between 
20% and 50% of the voting 
rights. Investments in 
associates are accounted 
using the equity method of 
accounting. The Group’s 
investment in associates 
includes goodwill identiﬁed 
on acquisition.

The Group applies IFRS 11 to 
all joint arrangements. Under 
IFRS 11, investments in joint 
arrangements are classiﬁed 
as either joint operations or 
joint ventures depending on 
the contractual rights and 
obligations of each investor. 
The Group has assessed all 
of its joint arrangements and 
determined them to be joint 
ventures, accounted for using 
the equity method.

Under the equity method, the 
interest in associates or joint 
ventures is carried in the 
Consolidated Balance Sheet 
at cost adjusted thereafter 
for the Group’s share of 
post-acquisition proﬁts or 
losses, recognised in the 
Group income statement. 
When the Group’s share of 
losses in an associate or joint 
venture equals or exceeds 
the Group’s interest, 
including any unsecured 
receivables, the Group does 
not recognise further losses 
unless it has incurred 
obligations or made 
payments on behalf of the 
associate or joint venture.

g) Intangible assets
(i) Goodwill
Goodwill represents the 
excess of the cost of an 
acquisition over the fair value 
of the Group’s share of the 
net identiﬁable assets of the 
acquired subsidiary at the 
date of acquisition. Goodwill 
on acquisitions of 
subsidiaries is included in 
Intangible assets. Goodwill is 
tested annually, or more 

175  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

1 Basis of preparation and 
accounting policies 
continued
i) Investment properties
i. 

Investment properties are 
those properties, 
including land holdings, 
that are held for long-term 
rental yields or for capital 
appreciation or both. 
Investment properties 
may be freehold or 
leasehold properties and 
must not be occupied by 
members of the Group. 
For leasehold properties 
that are classiﬁed as 
investment properties, the 
associated leasehold 
obligations are accounted 
for as ﬁnance lease 
obligations if they qualify 
to be treated as such.
ii.  Investment properties are 
measured initially at cost, 
including directly 
attributable transaction 
costs, and thereafter are 
stated at fair value. 
Surpluses and deﬁcits 
arising from changes in 
the fair value of 
investment properties are 
recognised in the income 
statement in the period in 
which they arise.

iii.  Subsequent expenditure 
is capitalised to the 
asset’s carrying value 
when the future economic 
beneﬁt associated with 
the expenditure will ﬂow 
to the Group. All other 
costs are expensed when 
incurred.

iv.  Completed investment 

properties are valued, at 
each reporting date, by 
professional valuers who 
hold recognised and 
relevant professional 
qualiﬁcations and have 
recent experience in the 
location and category of 
the investment property 
being valued. In 
determining the fair value, 
the capitalisation of net 
income method and the 
discounting of future cash 
ﬂows to their present 
value have been used, 
which are based upon 
assumptions including 
future rental income, 
anticipated maintenance 
costs and appropriate 

176  |  U and I Group PLC
Annual Report & Accounts 2019

discount rate, and make 
reference to market 
evidence of transaction 
prices for similar 
properties. A deduction 
is made to reﬂect 
purchaser’s acquisition 
costs.

v.  Investment properties 
under construction are 
valued by the Directors on 
the basis of the expected 
value of the property 
when complete, less 
deductions for the costs 
required to complete the 
project and appropriate 
adjustments for risk and 
ﬁnance costs. In 
preparing these 
valuations, the Directors 
consult with agents and 
other advisors to derive 
appropriate assumptions 
speciﬁc to each asset.

vi.  Gains or losses on 

disposal of investment 
properties are calculated 
by reference to carrying 
value and recognised 
when the risks and 
rewards of ownership are 
considered to have 
passed to the purchaser, 
which is normally on 
unconditional exchange of 
contracts. For conditional 
exchanges, sales are 
recognised only when 
all of the signiﬁcant 
conditions are satisﬁed. 
Gains and losses are 
recognised within gains 
or losses on disposal of 
investment properties in 
the income statement.
vii. Investment properties 

held for sale are held at 
fair value and classiﬁed 
separately within current 
assets in the Balance 
Sheet. 

j) Property, plant and 
equipment
(i) Operating properties – 
serviced ofﬁces
Operating properties are held 
for business purposes rather 
than for investment, 
generating revenue by way of 
licence fees and ancillary 
services. These properties 
are recognised initially at 
cost, which includes the 
original purchase price of the 
asset and the costs 

attributable to bringing the 
asset to its working condition 
for its intended use. 
Thereafter, the asset is 
carried at valuation less 
depreciation and impairment 
charged subsequent to the 
date of revaluation. A 
revaluation surplus is credited 
to Other comprehensive 
income and accumulated in 
equity under the heading of 
Net unrealised gain/(loss) 
reserve, unless it reverses 
a revaluation decrease on the 
same asset previously 
recognised as an expense, 
where it is ﬁrst credited to the 
income statement to that 
extent.

Operating properties are 
valued at each reporting date 
by independent, professional 
valuers on the basis of 
Highest and Best Use Value. 
Surpluses and deﬁcits in the 
period are included in the 
Property revaluation reserve 
within equity, except where 
carrying value is below 
depreciated cost, in which 
case surpluses and deﬁcits 
are included in the income 
statement. Depreciation is 
provided so as to write off 
the value of the properties, 
excluding land, over their 
expected useful lives, usually 
25 years.

(ii) Other plant and 
equipment
Other plant and equipment is 
stated at cost less 
accumulated depreciation 
and any provision for 
impairment. Cost includes 
expenditure that is directly 
attributable to the acquisition 
of the assets. Depreciation is 
provided so as to write off 
the cost less estimated 
residual value of the assets 
over their expected useful 
lives on a straight-line 
method. The principal annual 
rates used for this purpose 
are as follows:

Fixtures, ﬁttings and 
computer equipment 
– 10% to 33%

Motor vehicles  
– 20%

The assets’ residual values 
and useful lives are reviewed 
and adjusted if appropriate at 
the end of each reporting 
period. An asset’s carrying 
amount is written down 
immediately to its 
recoverable amount if the 
asset’s carrying amount is 
greater than its estimated 
recoverable amount.

Gains and losses on 
disposals are determined by 
comparing the net proceeds 
with the carrying amount and 
are recognised in the income 
statement.

k) Leases – Group as lessee
Leases in which a signiﬁcant 
portion of the risks and 
rewards of ownership are 
retained by the lessor are 
classiﬁed as operating 
leases. Payments made under 
operating leases, net of any 
incentives received from the 
lessor, are charged to the 
income statement on a 
straight-line basis over the 
term of the lease.

l) Inventory – development 
and trading properties
Property and development 
interests acquired or being 
constructed for sale in the 
ordinary course of business, 
rather than to be held for 
rental or capital appreciation, 
are held as inventory and are 
measured at the lower of cost 
and estimated net realisable 
value.

Cost includes directly 
attributable expenditure and 
interest. The Group have 
capitalised certain internal 
staff costs directly 
attributable to the 
development of schemes. 
Staff costs capitalised are 
estimated with reference to 
the time spent on the project 
during the period. Where the 
Directors consider that the 
costs are not recoverable 
from the sale or development 
of the asset, the project or 
site is written down to its net 
realisable value, with the 
write down taken to the 
income statement.

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Net realisable value is 
calculated as the estimated 
selling price of the project or 
site, based upon the current 
plans, less costs to complete 
and associated selling costs.

m) Current and deferred 
income tax
The tax expense for the 
period comprises current and 
deferred tax. Tax is 
recognised in the income 
statement, except to the 
extent that it relates to items 
recognised in Other 
comprehensive income or 
directly in equity. In this case, 
the tax is also recognised in 
Other comprehensive income 
or directly in equity.

The current income tax 
charge is calculated on the 
basis of the tax laws enacted 
or substantively enacted at 
the balance sheet date, 
together with any adjustment 
in respect of previous years, 
in the jurisdiction where the 
Company and its subsidiaries 
operate and generate taxable 
income. Appropriate 
provisions are made based 
on the amounts expected to 
be paid to the tax authorities.

Deferred income tax is 
recognised using the liability 
method on all temporary 
differences arising between 
the tax bases of assets and 
liabilities and their carrying 
amounts for ﬁnancial 
reporting purposes at the 
reporting date, with the 
following exceptions:
 – Where the temporary 

differences arise from the 
initial recognition of 
goodwill or of an asset or 
liability in a transaction 
that is not a business 
combination that, at the 
time of the transaction, 
affects neither accounting 
nor taxable proﬁt or loss.

 – In respect of taxable 

temporary differences 
associated with 
investments in subsidiaries, 
joint ventures and 
associates where the 
timing of the reversal of the 
temporary difference can 
be controlled by the Parent, 
venture partner or investor 

177  |  U and I Group PLC
Annual Report & Accounts 2019

respectively, and it is 
probable that the 
temporary difference will 
not reverse in the 
foreseeable future.

The carrying value of the 
Group’s investment property 
portfolio is assumed to be 
realised by sale at the end of 
use. The capital gains tax rate 
applied is that which would 
apply on a direct sale of the 
property recorded in the 
Consolidated statement of 
ﬁnancial position regardless 
of whether the Group would 
structure the sale via the 
disposal of the subsidiary 
holding the asset, to which a 
different tax rate may apply. 
The deferred tax is calculated 
based on the respective 
temporary differences and 
tax consequences arising 
from recovery from sale.

Deferred income tax assets 
and liabilities are measured 
at the tax rates that are 
expected to apply to the 
period when the asset is 
realised or the liability is 
settled, based on tax rates 
and tax laws that have been 
enacted or substantively 
enacted at the balance 
sheet date.

Deferred income tax assets 
are recognised only to the 
extent that it is probable that 
future taxable proﬁt will be 
available against which the 
temporary difference can be 
utilised.

n) Financial assets and 
ﬁnancial liabilities – 
accounting policy applied 
from 1 March 2018
(i) Financial assets
Classiﬁcation
From 1 March 2018, the 
Group classiﬁes its ﬁnancial 
assets in the following 
measurement categories:
 – Those measured 

subsequently at fair value 
(either through OCI or 
through proﬁt or loss); and

 – Those measured at 
amortised cost.

Classiﬁcation depends on 
the Group’s business model 
for managing the ﬁnancial 
assets and the contractual 
terms of the cash ﬂows. For 
assets measured at fair value, 
gains and losses will be 
recorded in either proﬁt or 
loss or OCI. Investments in 
equity instruments, not held 
for trading, gains and losses 
are recognised at fair value 
through other comprehensive 
income (FVOCI).

Recognition and 
derecognition
Financial assets and ﬁnancial 
liabilities are recognised on 
the Group’s Balance Sheet 
when the Group becomes a 
party to the contractual terms 
of the instrument.

Financial assets are 
derecognised when the rights 
to receive cash ﬂows from 
the ﬁnancial assets have 
expired or have been 
transferred.

Measurement
Financial assets are 
measured at fair value plus 
directly attributable 
transaction costs on 
acquisition unless they are 
measured at fair value 
through proﬁt or loss (FVPL). 
Transaction costs of ﬁnancial 
assets carried at FVPL are 
expensed in proﬁt or loss. 

Debt instruments
Subsequent measurement of 
debt instruments depends on 
the Group’s business model 
for managing the asset and 
the cash ﬂow characteristics 
of the asset. There are three 
measurement categories into 
which the Group classiﬁes its 
debt instruments:
 – Amortised cost: Assets 

that are held for collection 
of contractual cash ﬂows 
where those cash ﬂows 
represent solely payments 
of principal and interest are 
measured at amortised 
cost. Interest income from 
these ﬁnancial assets is 
included in ﬁnance income 
using the effective interest 
rate method. Any gain or 
loss arising on 
derecognition is 

recognised directly in proﬁt 
or loss and presented in 
other gains/(losses), 
together with foreign 
exchange gains and losses. 
Impairment losses are 
presented as separate line 
item in the statement of 
proﬁt or loss. 

 – FVOCI: Assets that are 
held for collection of 
contractual cash ﬂows and 
for selling the ﬁnancial 
assets, where the assets’ 
cash ﬂows represent solely 
payments of principal and 
interest, are measured at 
FVOCI. Movements in the 
carrying amount are taken 
through OCI, except for 
the recognition of 
impairment gains or losses, 
interest revenue and 
foreign exchange gains and 
losses which are 
recognised in proﬁt or loss. 
When the ﬁnancial asset is 
derecognised, the 
cumulative gain or loss 
previously recognised in 
OCI is reclassiﬁed from 
equity to proﬁt or loss and 
recognised in other gains/
(losses). Interest income 
from these ﬁnancial assets 
is included in ﬁnance 
income using the effective 
interest rate method. 
Foreign exchange gains 
and losses are presented in 
other gains/(losses) and 
impairment expenses are 
presented as separate line 
item in the statement of 
proﬁt or loss. 

 – FVPL: Assets that do not 

meet the criteria for 
amortised cost or FVOCI 
are measured at FVPL. 
A gain or loss on a debt 
investment that is 
subsequently measured at 
FVPL is recognised in proﬁt 
or loss and presented net 
within other gains/(losses) 
in the period in which 
it arises. 

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

1 Basis of preparation and 
accounting policies 
continued
n) Financial assets and 
ﬁnancial liabilities – 
accounting policy applied 
from 1 March 2018 
continued
Equity instruments
The Group subsequently 
measures all equity 
investments (excluding joint 
ventures and associates) at 
fair value. Where the Group’s 
management has elected to 
present fair value gains and 
losses on equity investments 
in OCI, there is no 
subsequent reclassiﬁcation 
of fair value gains and losses 
to proﬁt or loss following the 
derecognition of the 
investment. Dividends from 
such investments continue to 
be recognised in proﬁt or 
loss as other income when 
the Group’s right to receive 
payments is established. 

Changes in the fair value of 
ﬁnancial assets at FVPL are 
recognised in other gains/
(losses) in the statement of 
proﬁt or loss as applicable. 
Impairment losses (and 
reversal of impairment losses) 
on equity investments 
measured at FVOCI are not 
reported separately from 
other changes in fair value.

Trade receivables
Trade receivables are 
recognised initially at fair 
value and subsequently 
measured at amortised cost 
less any impairment 
provisions. The Group holds 
trade receivables with the 
objective to collect 
contractual cash ﬂows.

Cash and cash equivalents
Cash and cash equivalents 
comprise deposits held at 
call with banks and other 
short-term highly liquid 
investments with no 
signiﬁcant risk of changes in 
value. Bank overdrafts that 
are repayable on demand and 
which form an integral part of 
the Group’s cash 
management are included as 
a ﬁnancial liability. For the 
purposes of the 
Consolidated Cash Flow 

178  |  U and I Group PLC
Annual Report & Accounts 2019

Statement, cash and cash 
equivalents are stated net of 
outstanding bank overdrafts.

date and adjusted on a 
contract by contract basis as 
necessary. 

Impairment
Due to the adoption of IFRS 
9, from 1 March 2018, the 
Group assesses, on a 
forward-looking basis, the 
expected credit losses 
associated with its debt 
instruments carried at 
amortised cost and FVOCI. 
The impairment methodology 
applied depends on whether 
there has been a signiﬁcant 
increase in credit risk. 

Financial assets are assessed 
for impairment at each 
reporting date. Assets are 
impaired where there is 
evidence that as a result of 
events that occurred after 
initial recognition, the 
estimated future cash ﬂows 
from the assets have been 
adversely affected. The 
carrying amount of the asset 
is reduced and the amount of 
the loss is recognised in the 
income statement. If, in 
a subsequent period, the 
amount of the impairment 
decreases, the reversal of 
the previously recognised 
impairment is recognised in 
the income statement.

For trade receivables, the 
Group applies the simpliﬁed 
approach permitted by IFRS 
9, which requires expected 
lifetime losses to be 
recognised from initial 
recognition of the 
receivables. 

The Group has classiﬁed 
trade and receivables into 
two categories as the 
transaction type and values 
vary signiﬁcantly.

Trade receivables for sales 
of inventory and investment 
assets are only recorded 
once signiﬁcant negotiations, 
due diligence and legal 
contracts have been 
completed. The receivable 
is recorded once contracts 
have been exchanged and 
there is a ﬁrm completion 
date set. The recoverability 
of the receivable will be 
reviewed at the reporting 

To measure the expected 
credit loss of trade 
receivables, the Group has 
reviewed aged balances on 
a portfolio basis. The Group 
has based its assessment on 
previous bad debts, current 
trading conditions of the 
tenant portfolio in the 
different sectors they operate 
and future expectations.

The loss allowance for trade 
receivables would have been 
£164,000 as at 28 February 
2018. The Group has adopted 
IFRS 9 on a prospective basis 
resulting in a loss allowance 
of £104,000 being provided 
as at 31 March 2019.

Financial assets are included 
within current assets except 
for assets maturing after one 
year, which will be classiﬁed 
as non-current.

(ii) Financial liabilities
The Group recognises a 
ﬁnancial liability when it ﬁrst 
becomes party to the 
contractual rights and 
obligations in the contract.

Loans and borrowings are 
initially recognised at fair 
value, net of directly 
attributable transaction costs, 
and subsequently measured 
at amortised cost using the 
effective interest method. 
Gains and losses arising on 
the repurchase, settlement 
or otherwise cancellation 
of liabilities are recognised 
respectively in Finance 
income and Finance costs.

Other ﬁnancial liabilities, 
including trade and other 
payables, are initially 
recognised at fair value and 
subsequently at amortised 
cost and are classiﬁed as 
current liabilities if payment 
is due within one year or less. 
If not, they are presented as 
non-current liabilities.

(iii) Derivatives
The Group enters into 
derivative ﬁnancial 
instruments, including 

interest rate swaps, caps and 
collars and cross-currency 
swaps, to manage its 
exposure to interest rate and 
foreign exchange rate risk.

Derivatives are initially 
recognised at fair value on 
the date a derivative contract 
is entered into and are 
subsequently re-measured 
to their fair value at each 
reporting date. The resulting 
gain or loss is recognised in 
proﬁt or loss immediately 
unless the derivative is 
designated as an effective 
hedging instrument, in which 
case the fair value is taken 
through Other 
comprehensive income.

The Group does not have any 
hedging instruments as at 
31 March 2019.

Financial assets and 
ﬁnancial liabilities – 
accounting policy applied 
until 28 February 2018
Financial assets and ﬁnancial 
liabilities are recognised on 
the Group’s Balance Sheet 
when the Group becomes a 
party to the contractual terms 
of the instrument.

(i) Financial assets
The Group determines the 
classiﬁcation of its ﬁnancial 
assets at initial recognition. 
The classiﬁcation depends 
on the purpose for which the 
ﬁnancial assets were 
acquired as follows:

Loans and other receivables 
with ﬁxed or determinable 
payments that are not quoted 
on an active market. The 
Group’s loans and 
receivables are included 
within Trade and other 
receivables, Cash and cash 
equivalents, Monies held in 
restricted accounts and 
deposits and Other ﬁnancial 
assets in the Consolidated 
Balance Sheet.

Financial assets at fair value 
through proﬁt or loss 
represent interest and 
currency swaps which are 
categorised as held for 
trading unless they are 
designated as hedges.

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Available-for-sale ﬁnancial 
assets are non-derivatives 
that are designated as such 
or are not classiﬁed in any 
other category. After initial 
recognition at cost, available-
for-sale assets are measured 
at fair value, with gains or 
losses being recognised as 
a separate component of 
equity until the investment is 
derecognised or until the 
investment is determined to 
be impaired, at which time 
the cumulative gain or loss 
previously recognised in 
equity is included in the 
income statement. Equity 
instrument ﬁnancial assets 
are held at cost in the event 
that the fair value of the 
instruments is not reliably 
measurable.

Trade receivables are 
recognised and carried at the 
lower of their original invoiced 
value and recoverable 
amount. Where the time value 
of money is material, 
receivables are carried at 
amortised cost. Provision is 
made when there is objective 
evidence that the Group will 
not be able to recover 
balances in full. Balances 
are written off when the 
probability of recovery is 
assessed as being remote. 
Subsequent recoveries of 
amounts previously written 
off are credited against the 
appropriate cost line in the 
income statement.

Amounts due from customers 
for contract work are 
included in Trade and other 
receivables and represent 
revenue recognised in excess 
of payments on account 
received.

Monies held in restricted 
accounts and deposits 
represent cash held by the 
Group in accounts with 
conditions that restrict the 
use of these monies by the 
Group and, as such, does not 
meet the deﬁnition of Cash 
and cash equivalents as 
deﬁned in IAS 7, ‘Statement 
of Cash Flows’.

179  |  U and I Group PLC
Annual Report & Accounts 2019

Movements in restricted 
deposit accounts are 
classiﬁed as ﬁnancing 
activities within the 
Consolidated Cash Flow 
Statement as the deposit 
balances are directly 
attributable to the associated 
loan.

Cash and cash equivalents 
comprise deposits held at 
call with banks and other 
short-term highly liquid 
investments with no 
signiﬁcant risk of changes in 
value. Bank overdrafts that 
are repayable on demand and 
which form an integral part of 
the Group’s cash 
management are included as 
a ﬁnancial liability. For the 
purposes of the 
Consolidated Cash Flow 
Statement, cash and cash 
equivalents are stated net of 
outstanding bank overdrafts.

Financial assets are included 
within current assets except 
for assets maturing after one 
year, which will be classiﬁed 
as non-current.

Financial assets are assessed 
for impairment at each 
reporting date. Assets are 
impaired where there is 
evidence that as a result of 
events that occurred after 
initial recognition, the 
estimated future cash ﬂows 
from the assets have been 
adversely affected. The 
carrying amount of the asset 
is reduced and the amount of 
the loss is recognised in the 
income statement. If, in a 
subsequent period, the 
amount of the impairment 
decreases, the reversal of 
the previously recognised 
impairment is recognised in 
the income statement.

recognised respectively in 
Finance income and Finance 
costs.

Other ﬁnancial liabilities, 
including trade and other 
payables, are initially 
recognised at fair value and 
subsequently at amortised 
cost and are classiﬁed as 
current liabilities if payment 
is due within one year or less. 
If not, they are presented as 
non-current liabilities.

(iii) Derivatives
The Group enters into 
derivative ﬁnancial 
instruments, including 
interest rate swaps, caps and 
collars and cross-currency 
swaps, to manage its 
exposure to interest rate and 
foreign exchange rate risk.

Derivatives are initially 
recognised at fair value on 
the date a derivative contract 
is entered into and are 
subsequently re-measured 
to their fair value at each 
reporting date. The resulting 
gain or loss is recognised in 
proﬁt or loss immediately 
unless the derivative is 
designated as an effective 
hedging instrument, in which 
case the fair value is taken 
through Other 
comprehensive income.

(iv) Hedging
The fair value of hedging 
derivatives is classiﬁed as 
a non-current asset or a 
non-current liability if the 
remaining maturity of the 
hedge relationship is more 
than 12 months, and as a 
current asset or a current 
liability if the remaining 
maturity of the hedge 
relationship is less than 
12 months.

(ii) Financial liabilities
Loans and borrowings are 
initially recognised at fair 
value, net of directly 
attributable transaction 
costs, and subsequently 
measured at amortised cost 
using the effective interest 
method. Gains and losses 
arising on the repurchase, 
settlement or otherwise 
cancellation of liabilities are 

At the inception of the hedge 
relationship the Group 
documents the relationship 
between the hedging 
instrument and hedged item, 
along with its risk 
management objectives and 
its strategy for undertaking 
various hedge transactions, 
the nature of the risk being 
hedged and how 
effectiveness will be 

measured throughout its 
duration. Furthermore, at the 
inception of the hedge and 
on an ongoing basis, the 
Group documents whether 
the hedging instruments 
that are used in hedging 
transactions are highly 
effective in offsetting 
changes in fair value or cash 
ﬂows of hedged items. The 
gain or loss of the effective 
portion of changes in the 
fair value of the hedging 
instrument is recognised in 
Other comprehensive 
income. The gain or loss 
relating to an ineffective 
portion is recognised 
immediately in the income 
statement. Amounts taken 
to equity are recycled to the 
income statement in the 
periods when the hedged 
item is recognised in proﬁt 
or loss.

Hedge accounting is 
discontinued when the 
Group revokes the hedging 
relationship or the hedging 
instrument expires or is sold, 
terminated or exercised, or 
no longer qualiﬁes for hedge 
accounting.

The Group did not have any 
hedging instruments as at 
28 February 2018.

o) Borrowing costs
Gross borrowing costs 
relating to direct expenditure 
on investment properties and 
inventories under 
development are capitalised. 
The interest capitalised is 
calculated using the rate of 
interest on the loan to fund 
the expenditure, or the 
Group’s weighted average 
cost of borrowings where 
appropriate, over the period 
from commencement of the 
development work until 
substantially all the activities 
necessary to prepare the 
qualifying asset for its 
intended use or sale are 
complete. The capitalisation 
of ﬁnance costs is 
suspended if there are 
prolonged periods when 
development activity is 
interrupted.

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

q) Employee beneﬁts
(i) Pensions
The Group operates a 
deﬁned contribution scheme 
whereby the Group pays 
ﬁxed contributions into a 
pension fund. The Group 
has no legal or constructive 
obligation to pay further 
contributions if the fund does 
not hold sufﬁcient assets to 
pay all employees relating 
to employee service in the 
current or prior periods. 
The charge to the income 
statement in the period 
represents the actual amount 
payable to the scheme in the 
period. Differences between 
contributions payable in the 
period and contributions paid 
are shown as either accruals 
or prepayments in the 
Balance Sheet.

(ii) Proﬁt-sharing and bonus 
plans
The Group recognises a 
liability and expense for 
bonus and proﬁt-sharing in 
accordance with the bonus 
plans outlined in the 
Remuneration Report on 
pages 131 to 148. The Group 
recognises a liability when 
contractually obliged.

r) Foreign currencies
The Consolidated ﬁnancial 
statements of the Group 
are presented in UK Sterling, 
the Company’s functional 
and presentation currency. 
Transactions denominated 
in foreign currencies are 
translated into Sterling at the 
rates of exchange ruling at 
the dates of the transactions 
or valuation when items are 
re-measured.

Monetary assets and 
liabilities denominated in 
foreign currencies at the 
balance sheet date are 
translated at the rates ruling 
at that date. Exchange gains 
or losses are presented net in 
the Income Statement within 
Finance costs or Finance 
income respectively. All other 
foreign exchange gains and 
losses are presented net in 
the Consolidated Statement 
of Comprehensive Income.

The results and ﬁnancial 
position of Group entities 
that have a functional 
currency different from the 
reporting currency are 
translated as follows:
 – Assets and liabilities are 
translated at the rates 
ruling at the balance sheet 
date

 – Income and expenses are 

translated at average 
exchange rate for the 
period

 – All other exchange 

differences are reported 
in Other comprehensive 
income.

s) Segmental reporting
Operating segments are 
reported in a manner 
consistent with the internal 
reporting provided to the 
Chief Operating Decision-
Maker (CODM). The CODM, 
who is responsible for 
allocating resources and 
assessing performance of the 
operating segments, has 
been identiﬁed as the 
Leadership Team.

t) Share capital
Ordinary shares are classiﬁed 
as equity.

Incremental costs directly 
attributable to the issue of 
new Ordinary shares or 
options are shown in equity 
as a deduction, net of tax, 
from the proceeds.

Where a Group company 
purchases its own share 
capital out of distributable 
reserves, the shares can be 
held as treasury shares. 
The shares are carried at the 
consideration paid, including 
any directly attributable 
costs of acquiring the shares. 
The value of the shares is 
deducted from the equity 
attributable to the 
Company’s equity holders 
until the shares are cancelled 
or re-issued. If the shares are 
subsequently re-issued, their 
value is re-attributed to the 
Company’s equity holders.

u) Share-based payments
The Group operates a 
number of share-based 
compensation plans, both 
equity and cash settled, 
under which the entity 
receives services from 
employees as consideration 
for cash or equity-settled 
instruments of the Group.

The fair value of the employee 
services received in exchange 
for the grant of the option is 
recognised as an expense. 
The total amount to be 
expensed is determined by 
reference to the fair value of 
the options granted.

Long-Term Incentive 
Plan (LTIP)
The LTIP commenced on 
1 March 2015. 

Under the scheme, Ordinary 
shares are conditionally 
awarded based on the 
performance of the Group 
over a four-year period for 
Executive Directors and a 
three-year period for staff. 
The performance of the 
Group is referenced to the 
net asset value per share 
growth over the vesting 
period and is based on 
non-market conditions. 
The Directors assess the 
likelihood of the award 
vesting and the maximum 
amount that will vest based 
on a forward-looking forecast 
of the Group.

No expense is recognised 
for awards that do not 
ultimately vest.

At each balance sheet date 
before vesting, the Group 
revises its estimate of the 
number of options that are 
expected to vest based on 
the non-market and service 
conditions. Any adjustment 
to original estimates is 
recognised in the income 
statement with a 
corresponding adjustment 
to equity.

1 Basis of preparation and 
accounting policies 
continued
o) Borrowing costs 
continued
Capitalised interest is written 
off to direct costs on disposal 
of inventory or to operating 
proﬁt on disposal of 
investment properties.

Other borrowing costs are 
recognised in proﬁt or loss in 
the period in which they are 
incurred.

Fees paid on establishment 
of loan facilities are 
capitalised as a prepayment 
for liquidity services and 
amortised over the period of 
the facility to which it relates. 
All other borrowing costs are 
recognised in the income 
statement in the period in 
which they are incurred.

p) Provisions
A provision is recognised 
when the Group has a 
present legal or constructive 
obligation as a result of past 
events, it is probable that an 
outﬂow of resources will be 
required to settle the 
obligation and the amount 
can be reliably estimated.

Onerous lease provisions are 
created for properties that 
are unoccupied, sub-let at 
below the rent payable on the 
head lease or for operating 
sites where the projected 
future trading revenue is 
insufﬁcient to cover the 
value-in-use.

Provisions are measured 
at the present value of the 
expenditure expected to 
be required to settle the 
obligation. The amortisation 
in the discount is recognised 
as an interest expense.

180  |  U and I Group PLC
Annual Report & Accounts 2019

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The remaining elements of 
the service ofﬁce operation 
are now reported under the 
investment division. 

Operating revenue for the 
year ended 28 February 2018 
was received from serviced 
ofﬁce operations and was 
principally received under 
short-term licence 
agreements. During the 
period, the operating segment 
would have reported a deﬁcit 
of £196,000.

These divisions are the basis 
on which the Group reports 
its primary segmental 
information. All operations 
occur and all assets are 
located in the United 
Kingdom or the Republic of 
Ireland. All revenue arises 
from continuing operations.

Unallocated amounts relate 
to general corporate assets 
and liabilities which cannot 
be allocated to speciﬁc 
segments; an analysis is 
provided in the table on 
page 184.

These divisions are the basis 
on which the Group reports 
its primary segmental 
information. All operations 
occur and all assets are 
located in the United 
Kingdom, except assets of 
£47,575,000 (28 February 
2018: £30,004,000) which 
are located in the Republic 
of Ireland. All revenue arises 
from continuing operations. 

When the options are 
exercised, the Company will 
either issue new Ordinary 
shares or utilise existing 
treasury shares held by the 
Company. 

v) Dividend distribution
Dividend distributions to the 
Company’s shareholders are 
recognised as a liability in the 
Group’s ﬁnancial statements 
in the period in which the 
dividends are approved by 
the Company’s shareholders.

w) Exceptional items
Exceptional items are 
disclosed separately in the 
ﬁnancial statements where 
it is necessary to do so to 
provide further understanding 
of the ﬁnancial performance 
of the Group. They are 
material, non-recurring items 
of income or expense that 
have been shown separately 
due to the signiﬁcance of 
their nature or amount.

x) Deﬁnitions
Operating proﬁt: stated after 
loss on disposal of investment 
properties, the revaluation of 
the investment portfolio and 
exceptional items and before 
the results of associates, 
jointly controlled entities and 
ﬁnance income and costs.

IPD Index and Total Portfolio 
Return: total return from the 
completed investment 
portfolio, comprising net 
rental income or expenditure, 
capital gains or losses from 
disposals and revaluation 
surpluses or deﬁcits, divided 
by the average capital 
employed during the ﬁnancial 
period, as deﬁned and 
measured by Investment 
Property Databank Limited 
(IPD), a company that 
produces independent 
benchmarks of property 
returns.

Total shareholder return: 
movement in share price over 
the period plus dividends 
paid as a percentage of the 
opening share price.

Gearing: expressed as a 
percentage and measured 
as net debt divided by total 
shareholders’ funds.

Loan to value gearing: 
expressed as a percentage 
of net debt as a proportion 
of total property assets, 
including shares of properties 
and net debt in all projects 
held in partnership (refer 
note 26).

Net debt: total debt less cash 
and short-term deposits, 
including cash held in 
restricted accounts. 

2 Segmental analysis
The segmental information 
presented consistently 
follows the information 
provided to the CODM and 
reﬂects the two sectors in 
which the Group operates. 
The CODM, which is 
responsible for allocating 
resources and assessing 
performance of the operating 
segments, has been 
identiﬁed as the Leadership 
Team. Following the decision 
to scale down its serviced 
ofﬁce business the Group 
has reassessed its operating 
divisions. From 1 March 2018, 
for management purposes, 
the Group is now organised 
into two operating divisions, 
whose principal activities are 
as follows:
 – Investment – management 
of the Group’s investment 
portfolio, generating rental 
income and valuation 
surpluses from property 
management; and

 – Development and trading 
– managing the Group’s 
development and trading 
projects. Revenue is 
received from project 
management fees, 
development proﬁts and 
the disposal of inventory.

181  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

2 Segmental analysis continued

13-month period ended 31 March 2019
Segment revenue
Direct costs
Segment result
Operating costs
Unallocated overhead costs
Loss on disposal of investment properties
Loss on revaluation of property portfolio
Operating loss
Other income
Share of post-tax (losses)/proﬁts of joint ventures and associates
(Loss)/proﬁt on sale of investment
Unallocated loss on sale of other plant and equipment
Proﬁt before interest and income tax
Finance income
Finance costs
Proﬁt before income tax
Income tax
Proﬁt for the period

ASSETS AND LIABILITIES
Segment assets
Unallocated assets
Total assets

Segment liabilities
Unallocated liabilities
Total liabilities

A summary of unallocated assets and liabilities is shown on page 184.

13-month period ended 31 March 2019
OTHER SEGMENT INFORMATION
Capital expenditure
Unallocated capital expenditure
Impairment of assets
Depreciation
Unallocated depreciation
Development and trading expenditure

REVENUE
Rental income
Serviced ofﬁce income
Project management fees
Trading property sales
Other property income
Development proceeds
Other

Investment 
£’000
16,299
(8,719)
7,580
(1,322)

Development 
and trading 
£’000
134,011
(114,730)
19,281
(10,976)

(223)
(11,165)

481
(5,002)
(42)

–
–

2,066
17,130
3,930

250
(3,725)

367
(2,707)

174,757

410,417

(74,834)

(181,178)

Investment 
£’000

Development 
and trading 
£’000

30,519

–

–
96

–

(9,137)
–

103,832

13,725
2,408
–
–
–
–
166
16,299

2,465
–
345
7,393
7,371
116,374
63
134,011

Total
£’000
150,310
(123,449)
26,861
(12,298)
(9,561)
(223)
(11,165)
(6,386)
2,547
12,128
3,888
(42)
12,135
617
(6,432)
6,320
(1,120)
5,200

585,174
37,373
622,547

(256,012)
(6,390)
(262,402)

Total
£’000

30,519
1,202
(9,137)
96
789
103,832

16,190
2,408
345
7,393
7,371
116,374
229
150,310

In the 13-month period ended 31 March 2019, three projects with turnover totalling £88,301,000 generated in excess of 10.0% of 
total revenue and fell within the development and trading segment.

182  |  U and I Group PLC
Annual Report & Accounts 2019

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Year ended 28 February 2018
Segment revenue
Direct costs
Segment result
Operating costs
Gain on disposal of investment properties
Loss on revaluation of property portfolio
Operating proﬁt/(loss) 
Other income
Share of post-tax proﬁts of joint ventures and associates
(Loss)/proﬁt on sale of investment
Unallocated gain on sale of other plant and equipment
Proﬁt before interest and income tax
Finance income
Finance costs
Proﬁt before income tax
Income tax
Proﬁt for the year

ASSETS AND LIABILITIES
Segment assets
Unallocated assets
Total assets

Segment liabilities
Unallocated liabilities
Total liabilities

Year ended 28 February 2018
OTHER SEGMENT INFORMATION
Capital expenditure
Unallocated capital expenditure
Impairment of assets
Depreciation
Unallocated depreciation
Development and trading expenditure

REVENUE
Rental income
Serviced ofﬁce income
Project management fees
Trading property sales
Other property income
Development proceeds
Other

Investment 
£’000
12,086
(3,656)
8,430
(3,579)
3,324
(2,417)
5,758
483
3,142
(99)

Development 
and trading 
£’000
157,481
(109,037)
48,444
(20,656)
–
–
27,788
1,606
13,033
6,812

Operating 
£’000
4,117
(4,784)
(667)
–
–
–
(667)
–
–
–

35
(4,942)

59
(4,841)

–
–

175,388

444,763

2,402

(74,243)

(192,548)

(3,965)

Total
£’000
173,684
(117,477)
56,207
(24,235)
3,324
(2,417)
32,879
2,089
16,175
6,713
5
57,861
94
(9,783)
48,172
(7,916)
40,256

622,553
41,595
664,148

(270,756)
(14,111)
(284,867)

Investment 
£’000

Development 
and trading 
£’000

Operating 
£’000

Total
£’000

3,038

–
173

–

(9,415)
–

–

137,342

12,012
–
–
–
–
–
74
12,086

2,069
–
358
20,985
2,695
131,374
–
157,481

22

–
63

–

–
4,117
–
–
–
–
–
4,117

3,060
194
(9,415)
236
724
137,342

14,081
4,117
358
20,985
2,695
131,374
74
173,684

In the year ended 28 February 2018, project with turnover totalling £23,250,000 generated in excess of 10.0% of total revenue 
and fell within the development and trading segment.

183  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

2 Segmental analysis continued

UNALLOCATED ASSETS CAN BE ANALYSED AS FOLLOWS:
Other plant and equipment
Deferred income tax asset
Derivative ﬁnancial instruments
Trade and other receivables
Cash and cash equivalents

UNALLOCATED LIABILITIES CAN BE ANALYSED AS FOLLOWS:
Current borrowings
Trade and other payables
Deferred income tax liability

3 Operating loss

OPERATING (LOSS)/PROFIT IS STATED AFTER (CREDITING)/CHARGING:
Share-based payments (credit)/charge
Write down of development and trading properties to net realisable value
Reversal of previous impairment
Write down of ﬁnancial assets to net realisable value
Depreciation:  

– Operating property
– Other plant and equipment

Impairment of trade receivables recognised in direct costs

AUDITORS’ REMUNERATION
Fees payable to the Company’s auditors and their associates for the audit of  
Company and Group ﬁnancial statements
Fees payable to the Company’s auditors and their associates for other services:
– Audit of the Company’s subsidiaries
– Half year review
– Other services

4 Employees

Employee beneﬁt expense
Wages and salaries
Social security costs
Cost of employee share option schemes
Other pension costs 

Less capitalised costs1

31 March 
2019
£’000

28 February 
2018
£’000

4,448
1,294
–
8,773
22,858
37,373

4,087
1,225
10
5,596
30,677
41,595

(17)
(2,925)
(3,448)
(6,390)

(17)
(10,804)
(3,290)
(14,111)

13-month 
period ended 
31 March 
2019
£’000

Year ended
28 February 
2018
£’000

(10)
9,137
(5,705)
–
65
820
134

246

300
46
–
592

1,750
8,415
−
1,000
60
900
1,155

241

348
45
8
642

13-month 
period ended 
31 March 
2019
£’000
11,704
1,607
(10)
970
14,271
(2,541)
11,730

Year ended
28 February 
2018
£’000
10,130
1,505
1,750
778
14,163
–
14,163

1  From 1 March 2018, the Group has capitalised certain internal staff costs directly attributable to development schemes. Staff costs capitalised are estimated with 

reference to the time spent on each project during the period. 

184  |  U and I Group PLC
Annual Report & Accounts 2019

 
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Average monthly number of employees, including Directors
Property development and investment
Operating property activities

13-month 
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31 March 
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Number
94
26
120

Year ended
28 February 
2018
Number
83
36
119

The Directors are considered to be the only key management personnel. Their remuneration is shown in the Remuneration 
Report on pages 131 to 148.

5 Finance income and costs
a) Finance income

Interest receivable on loans and deposits
Net foreign currency differences arising on retranslation of cash and cash equivalents

b) Finance costs

Interest on bank loans and other borrowings
Amortisation of transaction costs
Provision: unwinding of discount
Fair value loss on ﬁnancial instruments – interest rate swaps, caps and collars
Net foreign currency differences arising on retranslation of cash and cash equivalents

Capitalised interest on development and trading properties
Total ﬁnance costs

Net ﬁnance costs
Net ﬁnance costs before foreign currency differences

13-month 
period ended 
31 March 
2019
£’000
463
154
617

Year ended
28 February 
2018
£’000
94
–
94

13-month 
period ended 
31 March 
2019
£’000
(9,138)
(449)
(19)
(10)
–
(9,616)
3,184
(6,432)

Year ended
28 February 
2018
£’000
(8,488)
(1,405)
(7)
(247)
(1,376)
(11,523)
1,740
(9,783)

(5,815)
(5,969)

(9,689)
(8,313)

Interest was capitalised at an average rate of 6.21%. £2,701,000 of capitalised interest (28 February 2018: £nil) was written off 
in the period. The tax treatment of capitalised interest follows the accounting treatment.

185  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

6 Income tax

Current tax
Adjustment in respect of prior years
Total current tax charge
Deferred tax charge/(credit)
Income tax charge

Tax on items credited to equity:
Deferred tax credit on other revaluations
Total credit in the income statement

13-month 
period ended 
31 March 
2019
£’000
1,835
(804)
1,031
89
1,120

13-month 
period ended 
31 March 
2019
£’000

Year ended
28 February 
2018
£’000
6,549
1,511
8,060
(144)
7,916

Year ended
28 February 
2018
£’000

–
–

–
–

Tax on the Group’s proﬁt before tax differs from the theoretical amount that would arise using the weighted average tax rate 
applicable to proﬁts of the consolidated entities as follows:

Proﬁt before tax
Tax on proﬁt on ordinary activities at 19.0% (28 February 2018: 19.1%)
Tax effects of:
Amounts not deductible for tax purposes
Non-taxable capital gains
Non-taxable income
Provision for unrealised Group proﬁt
Adjustment in respect of prior years
Impact on change in UK tax rate
Income tax at lower rates
Recognition of tax losses
Brought forward losses utilised
Total tax charge

13-month 
period ended 
31 March 
2019
£’000
6,320
1,201

Year ended
28 February 
2018
£’000
48,172
9,191

506
2,670
(3,094)
(311)
(552)
19
(2)
(324)
1,007
1,120

103
(347)
(3,322)
−
1,494
40
142
55
560
7,916

Deferred income tax is calculated on the temporary differences under the liability method using a tax rate of 17.0% (28 February 
2018: 17.0%).

186  |  U and I Group PLC
Annual Report & Accounts 2019

7 Dividends

DECLARED AND PAID DURING THE PERIOD/YEAR
Equity dividends on Ordinary shares:
Final dividend for 28 February 2018: 3.50 pence per share (28 February 2017: 3.50 pence per share)
Interim dividend for 31 March 2019: 2.40 pence per share (28 February 2018: 2.40 pence per share)
Supplemental dividend for 28 February 2018: 12.00 pence per share (28 February 2017: 2.80 pence 
per share)

DIVIDEND DECLARED BUT NOT PAID SINCE 31 MARCH 2019
Supplemental dividend for 31 March 2019: 4.1 pence per share (28 February 2018: 12.00 pence 
per share)

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31 March 
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£’000

Year ended
28 February 
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£’000

4,390
3,011

15,033
22,434

4,379
3,003

3,503
10,885

5,114

15,041

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PROPOSED FOR APPROVAL BY SHAREHOLDERS AT THE ANNUAL GENERAL MEETING
Final dividend for 31 March 2019: 3.50 pence per share (28 February 2018: 3.50 pence per share)

4,366

4,387

On 21 May 2019, the Board approved the payment of a supplemental dividend of 4.1 pence per share, which will be paid on 
12 July 2019 to Ordinary shareholders on the register at the close of business on 7 June 2019 and will be recognised in the year 
ending 31 March 2020.

Subject to approval by shareholders, the ﬁnal dividend of 3.50 pence was approved by the Board on 21 May 2019 and has 
not been included as a liability or deducted from retained earnings as at 31 March 2019. The ﬁnal dividend is payable on 
6 September 2019 to Ordinary shareholders on the register at the close of business on 9 August 2019 and will be recognised 
in the year ending 31 March 2020.

8 Earnings per share and net assets per share
Basic earnings per share amounts are calculated by dividing proﬁt or loss for the period attributable to owners of the Parent by 
the weighted average number of Ordinary shares outstanding during the period, excluding shares purchased by the Parent and 
held as treasury shares.

Diluted earnings per share amounts are calculated by dividing the proﬁt or loss attributable to owners of the Parent by the 
weighted average number of Ordinary shares outstanding during the period plus the weighted average number of Ordinary 
shares that would be issued on the conversion of all the dilutive potential Ordinary shares into Ordinary shares.

Basic net assets per share amounts are calculated by dividing net assets by the number of Ordinary shares in issue at the 
balance sheet date excluding shares purchased by the Parent and held as treasury shares.

Diluted net assets per share amounts are calculated by dividing net assets by the number of Ordinary shares in issue at the 
balance sheet date plus the number of Ordinary shares that would be issued on the conversion of all the dilutive potential 
Ordinary shares into Ordinary shares.

Management have chosen to disclose the European Public Real Estate (EPRA) adjusted net assets per share and earnings per 
share from continuing activities in order to provide an indication of the Group’s underlying business performance and to assist 
comparison between European property companies.

EPRA earnings is the proﬁt or loss after taxation excluding investment property revaluations (including valuations of joint venture 
investment properties), impairment of development and trading properties, exceptional items and mark-to-market movements of 
derivative ﬁnancial instruments (including those of joint ventures) and intangible asset movements and their related taxation.

EPRA net assets (EPRA NAV) are the balance sheet net assets adjusted to reﬂect the fair value of development and trading 
assets, excluding mark-to-market adjustment on effective cash ﬂow hedges and related debt adjustments and deferred taxation 
on revaluations and diluting for the effect of those shares potentially issuable under employee share schemes.

EPRA NAV per share is EPRA NAV divided by the number of Ordinary shares in issue at the balance sheet date.

EPRA triple net assets (EPRA NNNAV) is EPRA NAV adjusted to reﬂect the fair value of debt and derivatives and to include 
deferred taxation on revaluations. 

EPRA NNNAV per share is EPRA NNNAV divided by the number of Ordinary shares in issue at the balance sheet date.

187  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

8 Earnings per share and net assets per share continued
The calculation of basic and diluted earnings per share and EPRA proﬁt per share is based on the following data:

PROFIT
Proﬁt for the purpose of basic and diluted earnings per share
Revaluation deﬁcit/(surplus) (including share of joint venture revaluation surplus)
Loss/(gain) on disposal of investment properties
Impairment of development and trading properties
Impairment of ﬁnancial assets
Reversal of previous impairments
Mark-to-market adjustment on interest rate swaps (including share of joint venture  
mark-to-market adjustment)
EPRA adjusted proﬁt from continuing activities attributable to owners of the Company

NUMBER OF SHARES
Weighted average number of Ordinary shares for the purpose of earnings per share
Effect of dilutive potential Ordinary shares:
Share options
Weighted average number of Ordinary shares for the purpose of diluted earnings per share
Basic earnings per share (pence)
Diluted earnings per share (pence)
EPRA adjusted earnings per share (pence)
EPRA adjusted diluted earnings per share (pence)

13-month 
period ended 
31 March 
2019
£’000

Year ended
28 February 
2018
£’000

5,200
8,711
223
9,137
–
(5,705)

411
17,977

40,256
(13,454)
(3,324)
8,415
1,000
−

140
33,033

13-month 
period ended 
31 March 
2019
£’000

Year ended
28 February 
2018
£’000

124,674

125,218

98
124,772
4.2p
4.2p
14.4p
14.4p

57
125,275
32.2p
32.2p
26.4p
26.4p

The Directors consider the acquisition and disposal of trading assets to be part of the core business of the Group and therefore 
have not adjusted proﬁt for the gain on disposal when calculating EPRA adjusted earnings per share.

Net assets per share and diluted net assets per share have been calculated as follows: 

Basic net assets per share attributable  
to the owners
Cumulative mark-to-market adjustment on interest 
rate swaps
EPRA adjusted net assets per share
Cumulative mark-to-market adjustment on interest 
rate swaps
Fair value of debt
EPRA adjusted triple net assets per share
Effect of dilutive potential Ordinary shares
Diluted net assets per share
EPRA diluted net assets per share
EPRA diluted triple net assets per share

Net assets 
£’000

No. of shares 
’000

31 March 
2019
Net assets
per share
Pence

Net assets 
£’000

No. of shares 
’000

28 February 
2018
Net assets
per share
Pence

360,145

124,741

289

379,281

125,343

303

(430)
359,715

430
(12,648)
347,497
521
360,666
360,236
348,018

124,741

288

124,741
294
125,035
125,035
125,035

280

289
288
280

(19)
379,262

19
(9,514)
369,767
625
379,906
379,887
370,392

125,343

303

125,343
447
125,790
125,790
125,790

295

303
303
295

The Board has concluded that there is no beneﬁt to stakeholders to provide an EPRA adjusted NAV per share calculation as a 
large proportion of the property portfolio does not qualify for valuation, as it falls outside of the criteria for calculation.

188  |  U and I Group PLC
Annual Report & Accounts 2019

9 Investment properties

At valuation 1 March 2017
Additions:
– acquisitions
– capital expenditure
Transfer from development and trading assets
Disposals
Deﬁcit on revaluation
At valuation 28 February 2018
Additions:
– acquisitions
– capital expenditure
Transfer from development and trading assets
Disposals
Deﬁcit on revaluation
At valuation 31 March 2019

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Freehold
£’000
136,873

–
528
13,000
(51,688)
(1,322)
97,391

24,108
171
–
–
(6,873)
114,797

Long
leasehold
£’000
42,326

1,627
277
471
(1,491)
(1,095)
42,115

5,061
1,156
2,720
(7,516)
(4,292)
39,244

Total
£’000
179,199

1,627
805
13,471
(53,179)
(2,417)
139,506

29,169
1,327
2,720
(7,516)
(11,165)
154,041

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Direct costs of £6,115,000 (28 February 2018: £3,656,000) arose as a result of ownership of investment properties.

Two development and trading assets were transferred to investment properties during the period following a change in strategy 
and use of the assets. The Group intends to hold the properties for the foreseeable future for capital appreciation and rental 
income.

a) Reconciliation of market value of investment properties to the net book amount
The following table reconciles the market value of investment properties to their net book amount. The components of the 
reconciliation are included within their relevant balance sheet heading.

Market value as assessed by the independent valuers or Directors
Amount included in prepayments and accrued income in respect of lease incentives
Net book amount of Investment properties – non-current assets

31 March 
2019
£’000
157,328
(3,287)
154,041

28 February 
2018
£’000
142,092
(2,586)
139,506

At 31 March and 30 September (previously 28 February and 31 August) each year, the Group engages professionally qualiﬁed 
valuers who hold a recognised professional qualiﬁcation and who have recent experience in the locations and sectors of the 
investment portfolio. As at 31 March 2019, completed investment properties have been valued by CBRE Ltd at a value of 
£138,748,000 (28 February 2018: £124,329,000). The current value equates to the highest and best use value of the asset.

The valuers have consented to the use of their name in the ﬁnancial statements.

Included within Investment properties are freehold land and buildings representing investment properties under development, 
amounting to £15,293,000 (28 February 2018: £15,177,000), which have been valued by the Directors. These properties 
comprise buildings and landholdings for current or future development as investment properties. This approach has been taken 
because the value of these properties is dependent on a detailed knowledge of the planning status, the competitive position of 
these assets and a range of complex project development appraisals.

Investment properties under development include £8,075,000 (28 February 2018: £8,075,000) of landholdings adjacent to retail 
properties within the Group’s portfolio, acquired for the purpose of extending the existing shopping centres. The fair value of 
these properties rests in the planned extensions, and is difﬁcult to estimate pending conﬁrmation of designs and planning 
permission, and hence has been estimated by the Directors at cost as an approximation to fair value.

£138,593,000 (28 February 2018: £122,059,000) of total investment properties are charged as security against the 
Group’s borrowings.

189  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

9 Investment properties continued
b) Valuation methodology
Our valuers are engaged as external valuers, as deﬁned in the current edition of RICS Valuation Professional Standards. 
The valuation process involves the Investment Team, our asset services provider and valuers. Prior to the valuation date, full 
tenancy information, veriﬁed by both the Investment Team and asset services provider, is provided to the valuers. New lettings, 
completed and pending lease events and asset management proposals are provided by the Investment Team on an asset-by-
asset basis. The valuers’ assimilated income information is checked by the Investment Team before the valuers report numbers.

The valuers beneﬁt from their own internal databases and proprietary/external resources for both rental and capital evidence/
yield evidence. 

The comparator method is used for establishing rental values. Rental evidence is either self-generating for multi-let assets, 
in particular shopping centres, or sourced through market evidence. Where appropriate, net effective rents are applied during 
extant lease terms and market rents applied at reversion.

With the majority of the investment portfolio comprising income-producing property, fair value is established using an 
investment method of valuation. Appropriate capitalisation rates are applied to the asset’s income stream in order to arrive at a 
yield proﬁle, i.e. net initial yield, equivalent yield and reversionary yield that can be reconciled with market evidence. For multi-let 
properties, generally the approach involves applying differential capitalisation rates to the income stream, making adjustments 
for tenant covenant, term to expiry and unit quality, in order to arrive at a blended position. For example, a foodstore anchor 
tenant with a strong covenant could be capitalised at a rate of 5.50% and an independent/sole trader could be capitalised at 
a rate of 8.25% at the same property. Similarly, outward adjustments to capitalisation rates applied to vacant units in multi-let 
properties are made to reﬂect letting and covenant risk associated with future tenants.

There were no changes to valuation techniques during the period.

The following table analyses the non-ﬁnancial assets carried at fair value by valuation method. The different hierarchy levels 
have been deﬁned as follows:
i.  Quoted prices (unadjusted) in active markets for identical assets or liabilities. This may be the agreed sales price of an asset 

where exchange has occurred after the year-end date (Level 1).

ii.  Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, 

as prices) or indirectly (that is, derived from prices) (Level 2).

iii.  Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). These assets are 

valued by external valuers and Directors (Level 3). An analysis of Level 3 assets is provided below.

It is the Group’s policy to recognise transfers into and out of hierarchy levels at the date of the change in circumstance.

There are no Level 1 or Level 2 assets and there have been no transfers between levels during the 13-month period ended 
31 March 2019 or year ended 28 February 2018.

Analysis of Level 3 investment properties

Class of property: Level 3
Shopping centres

Market value
31 March 
2019
£’000
65,700

Market value
28 February 
2018
£’000
84,295

Retail/commercial space

54,260

25,520

Ofﬁce

22,075

17,100

Land held for development

6,783

6,667

Buildings held for development

8,510

8,510

157,328

142,092

Valuation 
technique
Income 
capitalisation
Income 
capitalisation
Income 
capitalisation
Residual 
development
method

Key unobservable 
inputs
Equivalent
yields
Equivalent
yields
Equivalent
yields
Price per 
acre/
development
margin

Residual 
development
method

Estimated 
proﬁt
margin

Equivalent
yield range
31 March 
2019
7.53%– 
10.70%
5.00%– 
10.11%
6.50%

£0.45 
million 
per acre/
15.0%– 
20.0%
15.0%– 
20.0%

50 basis
point yield 
contraction 
£’000
4,025

50 basis
point yield 
expansion 
£’000
(3,645)

4,320

(3,645)

1,900

(1,650)

–

–

–

–

190  |  U and I Group PLC
Annual Report & Accounts 2019

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Further information relating to the Group’s investment portfolio is set out in the Portfolio Review on pages 24 to 32.

The Group engages external, independent and qualiﬁed valuers to determine the fair value of Level 3 assets. The valuers liaise 
with the Investment Team regularly, reviewing tenant information relating to covenant strength, lease period and rental terms. 
Valuers will also review comparable transactions in the market. The fair value of Level 3 assets is also determined by reviewing 
local sales data or, where the assets are held for the purpose of extending an existing retail asset, by reviewing appraisals 
relating to the proposed scheme.

10 Operating property

VALUATION
At 1 March 2017
Surplus on revaluation
At 28 February 2018
Surplus on revaluation
At 31 March 2019 

ACCUMULATED DEPRECIATION
At 1 March 2017
Charge for the year
At 28 February 2018
Charge for the period
At 31 March 2019

Net book amount 31 March 2019
Net book amount 28 February 2018
Net book amount 1 March 2017

Original cost of operating property at 31 March 2019 and 28 February 2018

The operating property is charged as security against the Group’s borrowings.

Long 
leasehold 
£’000

1,712
35
1,747
40
1,787

912
60
972
65
1,037

750
775
800

1,583

Depreciation expense of £65,000 (28 February 2018: £60,000) is included within operating costs.

The surplus on revaluation of long leasehold property for the 13-month period ended 31 March 2019 is £40,000 (28 February 
2018: £35,000). If the operating property was measured using the cost model, the carrying value would be £546,000 
(28 February 2018: £611,000).

The Group’s operating property has been valued at market value as at 31 March 2019 and 28 February 2018 by independent 
professional valuers CBRE Ltd, on the basis of highest and best use value in accordance with RICS Valuation Professional 
Standards and without any special assumptions. The values disclosed above are as stated by the valuer in its valuation report 
to the Directors.

The valuers have consented to the use of their name in the ﬁnancial statements.

191  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

11 Intangible assets

GOODWILL
At 1 March 2017, 28 February 2018 and 31 March 2019

£’000

2,328

In 2014, the Group acquired 100% of the issued shares in Cathedral Group (Holdings) Limited, Cathedral Special Projects 
(Holdings) Limited and Cathedral (ESCO) Limited and 95% of the shares issued in Deadhare Limited, a property development 
group specialising in mixed-use regeneration schemes in the South East. The goodwill of £2,328,000 represents the 
unrecognised asset of the highly skilled workforce and specialist development knowledge acquired with Cathedral. 

Goodwill has been tested for impairment at the reporting date.

Goodwill is allocated to the Group’s cash-generating units (CGUs) identiﬁed according to the operating segment. The 
recoverable amount of all CGUs has been determined based on value-in-use calculations. The calculations use pre-tax cash 
ﬂow projections based on ﬁnancial budgets approved by management covering a period up to the completion of each project 
(or less than ﬁve years). The pre-tax discount rate used was 11.0% (28 February 2018: 11.0%). No provision for impairment was 
considered necessary. No reasonable change in any assumption would give rise to a material impairment. 

12 Other plant and equipment

COST
At 1 March 2017
Additions
Disposals
At 28 February 2018
Additions
Disposals
At 31 March 2019
ACCUMULATED DEPRECIATION
At 1 March 2017
Charge for the year
Disposals
At 28 February 2018
Charge for the period
Disposals
At 31 March 2019
Net book amount 31 March 2019
Net book amount 28 February 2018
Net book amount 1 March 2017

Fixtures, 
ﬁttings 
and computer 
equipment 
£’000

Motor 
vehicles
£’000

8,075
812
(2,359)
6,528
1,189
(805)
6,912

2,328
882
(908)
2,302
809
(765)
2,346
4,566
4,226
5,747

108
10
–
118
36
(84)
70

85
18
–
103
11
(72)
42
28
15
23

Total
£’000

8,183
822
(2,359)
6,646
1,225
(889)
6,982

2,413
900
(908)
2,405
820
(837)
2,388
4,594
4,241
5,770

Depreciation expense of £806,000 (28 February 2018: £723,000) is included within operating costs and £14,000 (28 February 
2018: £177,000) is included within direct costs.

192  |  U and I Group PLC
Annual Report & Accounts 2019

13 Investments

At 1 March 2017
Additions
Share of proﬁt/(loss)
Share of revaluation surplus
Share of mark-to-market adjustment on interest rate swaps
Share of results
Transfer to subsidiaries
Disposal of associate
Distributions under proﬁt share arrangements
Capital distributions – repayment of loans
At 28 February 2018
Additions
Share of (loss)/proﬁt
Share of revaluation surplus
Share of mark-to-market adjustment on interest rate swaps
Share of results
Dividend distributions
Capital distributions – repayment of loans
At 31 March 2019

Investments in 
associates
 £’000
8,372
–
7
–
–
7
(1,500)
(2,500)
(4,379)
–
–
5,777
(14)
–
–
(14)
–
–
5,763

Investments in 
joint ventures 
£’000
46,089
31,535
(609)
16,670
107
16,168
–
–
(14)
(972)
92,806
25,574
10,109
2,454
(421)
12,142
(17,654)
(8,998)
103,870

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Details of other income received from associates and joint ventures is set out in note 25.

A summary of the Group’s projects in partnership and the balance sheet classiﬁcation of its interests are set out in note 26.

a) Investment in associates
The Group has the following interest in associates:

Class of property: Level 3
Cannock Designer Outlet Limited Partnership 

CDSR Burlington House Developments Limited

Northpoint Developments Limited

1  The investment in the associate has been fully provided against.

% of 
holding
12.5 

20

42

Country of 
incorporation
United
Kingdom
Ireland

United
Kingdom

Principal activity
Property
development
Property
development
Property
development

Reporting segment
Development
and trading
Development
and trading
Development
and trading

Acquisition 
date
December
2017
July
2014
November
2007

Note

1

s
t
a
t
e
m
e
n
t
s

A
d
d
i
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i
o
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a

l

i

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f
o
r
m
a
t
i
o
n

193  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

13 Investments continued
a) Investment in associates continued

31 March 2019
SUMMARISED BALANCE SHEETS:
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets/(liabilities)
Share of net assets/(liabilities)
Net (assets)/liabilities not recognised
Group’s share of net assets

SUMMARISED INCOME STATEMENTS:
Revenue
Post-tax losses of associates
Share of (losses)/proﬁts
Share of proﬁts not recognised
Share of losses recognised

28 February 2018
SUMMARISED BALANCE SHEETS:
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets/(liabilities)
Share of net assets/(liabilities)
Net (assets)/liabilities not recognised
Group’s share of net assets

SUMMARISED INCOME STATEMENTS:
Revenue
Post-tax losses of associates
Share of proﬁts/(losses)
Share of losses not recognised
Share of proﬁts recognised

Cannock 
Designer
 Outlet 
Limited
 Partnership
£’000

CDSR 
Burlington 
House 
Developments 
Limited
£’000

Northpoint
Developments 
Limited
£’000

–
53,443
(132)
(7,144)
46,167
5,763
–
5,763

–
(363)
(14)
–
(14)

–
2,968
(12)
–
2,956
591
(591)
–

–
(137)
–
–
–

52
7,518
(1,336)
(20,942)
(14,708)
(6,177)
6,177
–

23,638
2,120
890
(890)
–

Cannock 
Designer
 Outlet 
Limited
 Partnership
£’000

CDSR 
Burlington 
House 
Developments 
Limited
£’000

Northpoint 
Developments 
Limited
£’000

 17,503
–
(17,503)
–
–
–
–
–

–
–
–
–
–

–
6,215
(3,770)
–
2,445
489
(489)
–

–
(2)
7
–
7

579
7,870
(744)
(24,955)
(17,250)
(7,245)
7,245
–

81
(603)
(253)
253
–

Total
£’000

52
63,929
(1,480)
(28,086)
34,415
177
5,586
5,763

23,638
1,620
876
(890)
(14)

Total
£’000
–
18,082
14,085
(22,017)
(24,955)
(14,805)
(6,756)
6,756
–

81
(605)
(246)
253
7

Any contingent liabilities in relation to our associate investment partners are disclosed in note 23.

194  |  U and I Group PLC
Annual Report & Accounts 2019

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b) Investment in joint ventures
As at 31 March 2019, the Group has the following interests in joint ventures:

Plus X Holdings Limited

Bryn Blaen Wind Farm Limited

Circus Street Developments  
Limited
Curzon Park Limited

Development Equity Partners  
Limited
DSP Piano Investments BV

DSP Tirol Limited

DS Renewables LLP

Harwell Oxford Developments 
Limited
Kensington & Edinburgh Estates 
(South Woodham Ferrers) Limited
Luxembourg Investment Company 
112 Sarl
Manchester Arena Complex LP

Mayﬁeld Development (General 
Partner) Limited
Notting Hill (Guernsey Holdco) 
Limited
Opportunities for Sittingbourne 
Limited
OSB (Holdco 1) Limited

% of 
holding
50

50

49

50

50

34

50

50

50

50

50

30

50

24

50

50

Country of 
incorporation
United Kingdom Holding 

Principal activity

Company
United Kingdom Property 

development

United Kingdom Property 

development

United Kingdom Property 

Jersey

Netherlands

development
Property 
development
Investment 
property

Reporting segment Acquisition date
Investment

November 2018 31 March

Accounting 
reference date

Development 
and trading
Development 
and trading
Development 
and trading
Development 
and trading
Investment

May 2011

31 March

August 2017

31 March

November 2006 31 March

December 2011 31 March

July 2015

31 December

United Kingdom Investment 

Investment

January 2015

31 August

property
United Kingdom Property 

development

United Kingdom Property 

development

United Kingdom Property 

Luxembourg

development
Property 
development

United Kingdom Investment 

property
United Kingdom Property 

Guernsey

development
Investment 
property
United Kingdom Property 

development

United Kingdom Property 

development

Development 
and trading
Development 
and trading
Development 
and trading
Development 
and trading
Investment

Development 
and trading
Development 
and trading
Development 
and trading
Development 
and trading
Development 
and trading
Development 
and trading
Investment

Development 
and trading

May 2012

31 March

December 2013 31 March

July 2013

31 March

November 2016 31 December

June 2010

31 March

December 2016 31 March

June 2011

31 December

January 2015

31 March

February 2014

31 March

May 2016

31 May

June 2016

31 March

August 2016

28 February

April 2016

31 March

Triangle London Developments LLP 50

United Kingdom Property 

UAI (G) Limited

UAIP (Drum) BV

UAIH Yorkshire Limited

50

20

50

development

United Kingdom Property 

Netherlands

development
Investment 
property
United Kingdom Property 

development

In November 2018, the Group acquired 50.0% of the share capital in Plus X Holdings Limited with its partners Paul Rostas and 
Matthew Hunter each holding 25.0% of the share capital. The company is registered and incorporated in the United Kingdom.

Winnebago Holdings Sarl was liquidated in December 2018 and in January 2019 the Becket House Unit Trust was terminated.

Investments under joint arrangements are not always represented by an equal percentage holding by each partner. In a number 
of joint ventures, the Group holds a minority shareholding but has joint control and therefore the arrangement is accounted for 
as a joint venture.

195  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

13 Investments continued
b) Investment in joint ventures continued
The Group’s share of the assets, liabilities, income and expenses of its joint ventures, which includes amounts receivable from  
those joint ventures, is as follows:

31 March 2019
SUMMARISED BALANCE SHEETS:
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets/(liabilities)
Net liabilities not recognised
Share of net assets recognised

SUMMARISED INCOME STATEMENTS:
Revenue
Direct costs
Interest costs
Gain on revaluation/sale
Proﬁt/(loss) before tax
Income tax
Proﬁt/(loss) after tax
Share of proﬁt/(loss) before and after tax

Harwell Oxford 
Developments 
Limited
£’000

DSP Piano 
Investments 
BV
£’000

Luxembourg 
Investment 
Company 112 
Sarl
£’000

Notting Hill 
(Guernsey 
Holdco 
Limited
£’000

Mayﬁeld 

Development 

(General 

Circus Street 

Developments 

Limited

£’000

Limited

£’000

BV

£’000

Limited

£’000

Partner) 

UAIP (Drum) 

DSP Tirol 

UAIH Yorkshire 

Curzon Park 

(Holdco 1) 

135,396
40,004
(10,298)
(63,991)
101,111
–
30,322

13,012
(3,961)
(3,555)
19,798
25,294
–
25,294
5,955

–
457
(114)
–
343
–
–

171
(314)
(538)
7,197
6,516
–
6,516
3,337

–
111,728
(4,612)
(42,166)
64,950
–
15,481

118
(908)
(7,200)
–
(7,990)
–
(7,990)
(2,990)

–
64,937
(793)
(28,402)
35,742
–
8,729

1,885
(1,242)
(1,978)
–
(1,335)
–
(1,335)
(326)

£38,789,000 of cash balances are included within current net asset balances of joint ventures. These include £6,390,000  
in the accounts of Luxembourg Investment Company 112 Sarl and £23,029,000 in the accounts of Harwell Oxford  
Developments Limited.

28 February 2018
SUMMARISED BALANCE SHEETS:
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets/(liabilities)
Net (assets)/liabilities not recognised
Share of net assets recognised

SUMMARISED INCOME STATEMENTS:
Revenue
Direct costs
Interest costs
Gain on revaluation/sale
Proﬁt/(loss) before and after tax
Share of proﬁt/(loss) before and after tax

Harwell Oxford 
Developments 
Limited
£’000

DSP Piano 
Investments BV
£’000

Luxembourg 
Investment 
Company 112 
Sarl
£’000

Notting Hill 
(Guernsey 
Holdco 
Limited
£’000

–
129,197
–
(31,771)
97,426
–
24,357

2,071
(1,145)
(859)
39,065
39,132
10,376

51,339
1,953
(313)
(10,991)
41,988
–
14,276

1,052
(505)
(819)
21,603
21,331
7,461

–
92,024
(3,914)
(58,157)
29,953
–
15,330

137
(232)
(1,999)
–
(2,094)
(344)

–
62,261
(2,995)
(25,137)
34,129
–
8,321

1,362
(1,041)
(1,851)
–
(1,530)
(373)

Any contingent liabilities in relation to our joint ventures are disclosed in note 23.

Tax liabilities in respect of joint ventures are shown above. Where no tax arises, this is due to the joint venture being in a loss  
making position, having tax losses carried forward or due to the utilisation of tax losses from other Group companies.

196  |  U and I Group PLC
Annual Report & Accounts 2019

33,473

(5,084)

(15,881)

12,508

32,453

(762)

31,691

3,642

13,193

Circus Street 

Developments 

Limited

£’000

Mayﬁeld 

Development 

(General 

Partner) 

Limited

£’000

15,624

(2,526)

(2,886)

10,212

25,481

(345)

(14,866)

10,270

5,106

6,269

(26)

(26)

(26)

(26)

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

18,000

667

(306)

(5,231)

13,130

–

2,682

597

(248)

(404)

7,034

6,979

–

6,979

1,378

–

21,175

(7,959)

(10,580)

2,636

–

3,472

9,766

(9,110)

(961)

–

–

(305)

(305)

(627)

BV

£’000

Limited

£’000

11,012

679

(58)

(5,307)

6,326

–

1,263

549

(167)

(419)

92

55

44

16,727

4,786

(2,430)

(13,819)

5,264

–

4,212

8,493

(7,682)

(893)

–

(82)

(296)

–

–

–

–

–

–

(2)

(2)

(2)

(1)

–

–

–

–

–

–

–

–

(4,502)

(212)

17,085

5,336

Bryn Blaen 

Wind Farm 

Limited

£’000

59,704

(625)

(24,910)

34,169

–

–

12

–

(10)

4,935

4,937

–

4,937

2,469

Bryn Blaen 

Wind Farm 

Limited

£’000

45,984

(22,909)

23,075

11,537

–

–

–

–

–

–

–

–

–

Limited

£’000

–

6,422

(577)

(4,900)

945

–

697

240

(29)

(655)

1,135

691

–

691

346

Limited

£’000

–

5,225

(95)

(4,882)

248

–

124

222

(42)

(584)

–

(404)

(202)

Limited

£’000

39,694

(4,938)

34,756

–

–

–

148

(163)

–

11,394

11,379

(1,451)

9,928

4,613

Limited

£’000

35,812

–

–

(10,505)

25,307

(24,787)

260

306

(206)

–

–

100

50

OSB 

Limited

£’000

37,530

(1,548)

(45,276)

(9,294)

9,294

1,339

(523)

(5,318)

(4,502)

(1,845)

–

–

–

–

OSB 

Limited

£’000

35,136

(1,350)

(40,823)

(7,037)

7,037

–

–

1,165

(588)

(4,275)

–

(3,698)

(519)

Other

£’000

Total 

£’000

 – 

6,445

(1,068)

5,377

 – 

–

3,231

153,396

454,689

(38,684)

(241,337)

328,064

9,294

103,870

(218)

4

2

 – 

–

(212)

(141)

27,292

(16,744)

(20,617)

51,493

41,424

(1,451)

39,973

12,142

Other

£’000

2,823

(207)

(118)

2,498

–

–

Total 

£’000

79,078

456,985

(37,142)

(219,262)

279,659

(17,750)

1,751

92,806

19

(74)

–

–

(55)

(29)

15,376

(11,682)

(11,699)

60,760

52,755

16,168

UAIP (Drum) 

DSP Tirol 

UAIH Yorkshire 

Curzon Park 

(Holdco 1) 

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i

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s
t
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s

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a
t
i
o
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13 Investments continued

b) Investment in joint ventures continued

those joint ventures, is as follows:

31 March 2019

SUMMARISED BALANCE SHEETS:

Non-current assets

Current assets

Current liabilities

Non-current liabilities

Net assets/(liabilities)

Net liabilities not recognised

Share of net assets recognised

SUMMARISED INCOME STATEMENTS:

Revenue

Direct costs

Interest costs

Gain on revaluation/sale

Proﬁt/(loss) before tax

Income tax

Proﬁt/(loss) after tax

Share of proﬁt/(loss) before and after tax

28 February 2018

SUMMARISED BALANCE SHEETS:

Non-current assets

Current assets

Current liabilities

Non-current liabilities

Net assets/(liabilities)

Net (assets)/liabilities not recognised

Share of net assets recognised

SUMMARISED INCOME STATEMENTS:

Revenue

Direct costs

Interest costs

Gain on revaluation/sale

Proﬁt/(loss) before and after tax

Share of proﬁt/(loss) before and after tax

BV

£’000

457

(114)

343

–

–

–

–

171

(314)

(538)

7,197

6,516

–

6,516

3,337

–

–

–

–

–

–

–

–

111,728

(4,612)

(42,166)

64,950

64,937

(793)

(28,402)

35,742

15,481

8,729

118

(908)

(7,200)

1,885

(1,242)

(1,978)

(7,990)

(1,335)

(7,990)

(2,990)

(1,335)

(326)

135,396

40,004

(10,298)

(63,991)

101,111

–

30,322

13,012

(3,961)

(3,555)

19,798

25,294

–

25,294

5,955

129,197

(31,771)

97,426

–

–

–

2,071

(1,145)

(859)

39,065

39,132

10,376

The Group’s share of the assets, liabilities, income and expenses of its joint ventures, which includes amounts receivable from  

Harwell Oxford 

Developments 

Limited

£’000

DSP Piano 

Luxembourg 

Investment 

Notting Hill 

(Guernsey 

Investments 

Company 112 

Sarl

£’000

Holdco 

Limited

£’000

Circus Street 
Developments 
Limited
£’000

Mayﬁeld 
Development 
(General 
Partner) 
Limited
£’000

UAIP (Drum) 
BV
£’000

DSP Tirol 
Limited
£’000

UAIH Yorkshire 
Limited
£’000

Bryn Blaen 
Wind Farm 
Limited
£’000

Curzon Park 
Limited
£’000

OSB 
(Holdco 1) 
Limited
£’000

–
33,473
(5,084)
(15,881)
12,508
–
3,642

–
(2)
–
–
(2)
–
(2)
(1)

–
32,453
(762)
–
31,691
–
13,193

–
(26)
–
–
(26)
–
(26)
(26)

18,000
667
(306)
(5,231)
13,130
–
2,682

597
(248)
(404)
7,034
6,979
–
6,979
1,378

–
21,175
(7,959)
(10,580)
2,636
–
3,472

9,766
(9,110)
(961)
–
(305)
–
(305)
(627)

–
6,422
(577)
(4,900)
945
–
697

240
(29)
(655)
1,135
691
–
691
346

–
59,704
(625)
(24,910)
34,169
–
17,085

12
–
(10)
4,935
4,937
–
4,937
2,469

–
39,694
(4,938)
–
34,756
–
5,336

148
(163)
–
11,394
11,379
(1,451)
9,928
4,613

–
37,530
(1,548)
(45,276)
(9,294)
9,294
–

1,339
(523)
(5,318)
–
(4,502)
–
(4,502)
(1,845)

£38,789,000 of cash balances are included within current net asset balances of joint ventures. These include £6,390,000  

in the accounts of Luxembourg Investment Company 112 Sarl and £23,029,000 in the accounts of Harwell Oxford  

Developments Limited.

Harwell Oxford 

Developments 

DSP Piano 

Company 112 

Limited

Investments BV

£’000

£’000

Sarl

£’000

Holdco 

Limited

£’000

Luxembourg 

Investment 

Notting Hill 

(Guernsey 

24,357

14,276

15,330

8,321

51,339

1,953

(313)

(10,991)

41,988

–

1,052

(505)

(819)

21,603

21,331

7,461

92,024

(3,914)

(58,157)

29,953

–

–

62,261

(2,995)

(25,137)

34,129

–

–

137

(232)

(1,999)

–

(2,094)

(344)

1,362

(1,041)

(1,851)

–

(1,530)

(373)

Circus Street 
Developments 
Limited
£’000

Mayﬁeld 
Development 
(General 
Partner) 
Limited
£’000

–
15,624
(2,526)
(2,886)
10,212
–
5,106

–
25,481
(345)
(14,866)
10,270
–
6,269

–
–
–
–
–
–

–
–
–
–
–
–

UAIP (Drum) 
BV
£’000

DSP Tirol 
Limited
£’000

UAIH Yorkshire 
Limited
£’000

Bryn Blaen 
Wind Farm 
Limited
£’000

Curzon Park 
Limited
£’000

OSB 
(Holdco 1) 
Limited
£’000

11,012
679
(58)
(5,307)
6,326
–
1,263

549
(167)
(419)
92
55
44

16,727
4,786
(2,430)
(13,819)
5,264
–
4,212

8,493
(7,682)
(893)
–
(82)
(296)

–
5,225
(95)
(4,882)
248
–
124

222
(42)
(584)
–
(404)
(202)

–
45,984
(22,909)
–
23,075
–
11,537

–
35,812
–
(10,505)
25,307
(24,787)
260

–
–
–
–
–
–

306
(206)
–
–
100
50

–
35,136
(1,350)
(40,823)
(7,037)
7,037
–

1,165
(588)
(4,275)
–
(3,698)
(519)

Any contingent liabilities in relation to our joint ventures are disclosed in note 23.

Tax liabilities in respect of joint ventures are shown above. Where no tax arises, this is due to the joint venture being in a loss  

making position, having tax losses carried forward or due to the utilisation of tax losses from other Group companies.

197  |  U and I Group PLC
Annual Report & Accounts 2019

Other
£’000

Total 
£’000

 – 
6,445
(1,068)
 – 
5,377
–
3,231

153,396
454,689
(38,684)
(241,337)
328,064
9,294
103,870

4
(218)
2
 – 
(212)
–
(212)
(141)

27,292
(16,744)
(20,617)
51,493
41,424
(1,451)
39,973
12,142

Other
£’000

–
2,823
(207)
(118)
2,498
–
1,751

Total 
£’000

79,078
456,985
(37,142)
(219,262)
279,659
(17,750)
92,806

19
(74)
–
–
(55)
(29)

15,376
(11,682)
(11,699)
60,760
52,755
16,168

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

13 Investments continued
c) Principal subsidiaries
The Group’s principal subsidiaries at 31 March 2019 are set out below. They have share capital consisting solely of Ordinary 
share capital that is held directly by the Group and the proportion of ownership interest equals the voting rights held by the 
Group. Principal subsidiaries are those undertakings with net assets in excess of 5.0% of Group net assets. 

Development Securities Estates PLC
Development Securities (Investments) PLC
U and I (Projects) Limited

% of holding Country of incorporation
100
100
100

United Kingdom
United Kingdom
United Kingdom

Cathedral (Preston Barracks) Limited

100

United Kingdom

Principal activity
Management and investment company
Property investment
Development and investment holding 
company
Development company

A full list of subsidiaries is disclosed in note 41.

14 Inventory

DEVELOPMENT AND TRADING PROPERTIES
At 1 March 2017
Additions:
– acquisitions
– development expenditure
Transfer to investment assets (refer note 9)
Disposals
Foreign currency differences
Net write down of development properties to net realisable value
At 28 February 2018
Additions:
– acquisitions
– development expenditure
– capitalised staff costs
Transfer to investment assets (refer note 9)
Disposals
Foreign currency differences
Net write down of development properties to net realisable value
At 31 March 2019

Development 
properties
 £’000

Trading 
properties 
£’000

Total
£’000

165,588

42,754

208,342

3,131
132,101
(471)
(90,428)
–
(7,356)
202,565

–
66,190
1,369
(2,720)
(97,985)
–
(7,402)
162,017

–
2,110
(13,000)
(18,616)
580
–
13,828

35,912
361
–
–
(6,507)
(117)
(1,735)
41,742

3,131
134,211
(13,471)
(109,044)
580
(7,356)
216,393

35,912
66,551
1,369
(2,720)
(104,492)
(117)
(9,137)
203,759

Included in the above amounts are projects stated at net realisable value of £88,266,000 (28 February 2018: £79,565,000).

Net realisable value has been estimated by the Directors, taking account of the plans for each project, the planning status and 
competitive position of each asset, and the anticipated market for the scheme. For material developments, the Directors have 
consulted with third-party chartered surveyors in setting their market assumptions.

Interest of £3,184,000 (28 February 2018: £1,740,000) was capitalised on development and trading properties during the period. 
Capitalised interest included within the carrying value of such properties on the Balance Sheet is £5,837,000 (28 February 2018: 
£5,354,000). 

198  |  U and I Group PLC
Annual Report & Accounts 2019

15 Trade and other receivables
a) Non-current

Other receivables
Prepayments 

b) Current

Trade receivables
Other receivables
Other tax and social security
Prepayments 
Accrued income

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£’000
1,400
3,217
4,617

28 February 
2018
£’000
–
2,487
2,487

31 March 
2019
£’000
3,393
22,167
2,327
237
32,302
60,426

28 February 
2018
£’000
45,216
23,556
1,556
3,339
45,962
119,629

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The Group has provided £1,197,000 (28 February 2018: £1,092,000) for outstanding balances where recovery is considered 
doubtful. Apart from the receivables that have been provided for at the year end, there is no further material expected credit 
loss. The maximum exposure to credit risk at the reporting date is the carrying value of the receivable.

Transactions and balances with related parties are disclosed in note 25.

16 Trade and other payables
a) Current

Trade payables
Other payables
Other tax and social security
Accruals
Deferred income

b) Provisions

At 1 March 2018
Utilised during the period
Provisions released
Unwind of discount
At 31 March 2019

Analysis of total provisions
Non-current
Current

31 March 
2019
£’000
2,500
14,031
5,140
37,126
18,489
77,286

28 February 
2018
£’000
27,286
14,521
12,198
36,326
9,385
99,716

Onerous
 leases 
£’000
416
(55)
(209)
19
171

Other 
provisions
 £’000
2,513
(1,481)
(521)
–
511

Total
£’000
2,929
(1,536)
(730)
19
682

31 March 
2019
£’000
646
36
682

28 February 
2018
£’000
416
2,513
2,929

Two provisions of £171,000 (28 February 2018: £416,000) relate to onerous lease obligations entered into in 2009 and 1974.

199  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

17 Financial assets and ﬁnancial liabilities
The following table is a summary of the ﬁnancial assets and ﬁnancial liabilities included in the Consolidated Balance Sheet:

NON-CURRENT ASSETS
Loans and receivables – available for sale
Loan and receivables at amortised cost less impairment
Loans at fair value through proﬁt or loss
Trade and other receivables at amortised cost less impairment
Financial asset at fair value through OCI
Derivative ﬁnancial instruments not used for hedging at fair value through proﬁt or loss

CURRENT ASSETS
Loan notes at amortised cost less impairment
Loans and receivables – available for sale
Loans and receivables at fair value through proﬁt or loss
Trade and other receivables at amortised cost less impairment
Monies held in restricted accounts and deposits
Cash and cash equivalents

Total ﬁnancial assets

CURRENT LIABILITIES
Trade and other payables at amortised cost
Borrowings at amortised cost

NON-CURRENT LIABILITIES
Borrowings at amortised cost

Total ﬁnancial liabilities

a) Other ﬁnancial assets 

NON-CURRENT
Development loans – available-for-sale ﬁnancial assets 
Development loans at amortised cost less impairment
Development loans – FVPL*
PropTech investment – FVPL
LaSalle investment – available-for-sale ﬁnancial assets
LaSalle investment – FVOCI*

*  Financial assets reclassiﬁed following the adoption of IFRS 9. 

31 March 
2019
£’000

28 February 
2018
£’000

–
3,204
13,244
1,400
1,271
–
19,119

8,962
–
13,672
57,862
8,841
31,911
121,248
140,367

15,812
−
–
−
–
10
15,822

8,888
7,949
–
114,734
11,473
40,626
183,670
199,492

(53,657)
(37,394)
(91,051)

(78,133)
(63,209)
(141,342)

(142,362)
(142,362)
(233,413)

(107,975)
(107,975)
(249,317)

31 March 
2019
£’000

28 February 
2018
£’000

–
3,204
12,666
578
–
1,271
17,719

14,527
−
–
−
1,285
–
15,812

The Group has three funding agreements totalling £6,793,000 (28 February 2018: £3,678,000), in respect of projects in 
partnership. Funding of £344,000 (28 February 2018: £344,000) has been provided to Henry Davidson Developments Limited 
in respect of one project. Interest of 12.5% is charged in respect of this funding.

Development loans FVPL also includes £5,529,000 in respect of property assets or cash consideration that the Group will 
receive on completion of certain development projects in the future.

The Group holds a 5.0% holding in LaSalle Land Limited Partnership which has been classiﬁed as a ﬁnancial asset held at fair 
value through OCI.

200  |  U and I Group PLC
Annual Report & Accounts 2019

 
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During the year the Group was invited to participate in a funding application of a PropTech company and the Group invested 
£578,000. The Group holds approximately 1% of the share capital in the company. The entity is not a listed company and 
therefore the Directors consider that cost is the best estimate of the fair value. The investment is held as a non-current ﬁnancial 
asset and any future uplift or decline in value will be reﬂected through proﬁt or loss.

CURRENT
Loan notes at amortised cost less impairment
Loans and receivables available-for-sale – Northpoint Developments Limited
Loans and receivables at FVPL* 

31 March 
2019
£’000

28 February 
2018
£’000

8,962
–
13,672
22,634

8,888
7,949
–
16,837

*  Financial assets reclassiﬁed following the adoption of IFRS 9.

The Group holds loan notes with a carrying value of £8,962,000 (28 February 2018: £8,888,000), issued by Northpoint 
Developments Limited, with a ﬁxed coupon rate of 4.25%. These loan notes are repayable on a rolling one-year basis. As at 
31 March 2019, the Group has made a provision of £1,689,000 (28 February 2018: £1,363,000) against interest receivable in 
respect of these loan notes. 

Development loans include a number of working capital and project-speciﬁc loans of £5,249,000 (28 February 2018: £7,949,000) 
to Northpoint Developments Limited. The loans attract ﬁxed coupon rates of between 5.0% and 13.0%. Included in the above 
amount are two interest-free loans of £408,000 (28 February 2018: £408,000). As at 31 March 2019, the Group has made a 
provision of £2,206,000 (28 February 2018: £1,609,000) against interest receivable in respect of these loans.

Previously, the Group provided a loan of £10,505,000 to the Curzon Park Limited joint venture in order to repay a share of its 
bank debt. The joint venture partner provided the equivalent amount. The bank loan, originally secured against the 10.5-acre site 
in Birmingham, has since been fully repaid. During the period, the Group received a payment on account of £6,787,000 in 
respect of the CPO of the Curzon Street land. The Group has reviewed the assets and liabilities in respect of Curzon Park in 
accordance with the expected credit loss model. As a result, the Group has reassessed its position in respect of the CPO and 
has reversed a previous provision of £4,705,000 made for the Group’s share of losses in the joint venture as they are now 
deemed recoverable. Both amounts are recognised as a ﬁnancial asset held at fair value through proﬁt or loss.

b) Borrowings

CURRENT
Bank overdrafts
Current instalments due on bank loans
Current loans maturing
Unamortised transaction costs

NON-CURRENT
Bank loans and loan notes
Unamortised transaction costs

31 March 
2019
£’000

28 February 
2018
£’000

–
804
37,084
(494)
37,394

–
1,034
62,550
(375)
63,209

31 March 
2019
£’000

28 February 
2018
£’000

143,889
(1,527)
142,362

109,143
(1,168)
107,975

Bank loans are secured by way of mortgages and legal charges on certain properties and cash deposits held by the Group.

201  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

17 Financial assets and ﬁnancial liabilities continued
b) Borrowings continued

BORROWINGS
£30,750,000 ﬁxed rate loan 2018
£12,000,000 variable rate loan 2019
£10,415,000 variable rate loan 2020
£26,652,000 ﬁxed rate loan 2020
£2,795,000 variable rate loan 2020
€47,000,000 variable rate loan notes 2021
£16,800,000 ﬁxed rate loan 2022
£19,710,000 variable rate loan 2022
€8,515,000 ﬁxed rate loan 2022
€2,180,000 ﬁxed rate loan 2023
£66,666,000 ﬁxed rate loan 2032
£16,500 variable rate loan notes 1999

Less: current instalments due on bank loans
Current loans maturing

£30,750,000 ﬁxed rate loan
This loan was repaid in October 2018.

£12,000,000 variable rate loan
This loan was repaid in March 2019.

31 March 
2019
£’000

28 February 
2018
£’000

–
–
10,415
26,652
–
40,448
15,800
13,410
7,328
1,876
65,831
17
181,777
(804)
(37,084)
143,889

20,398
6,276
10,167
25,692
2,105
41,483
–
–
–
–
66,589
17
172,727
(1,034)
(62,550)
109,143

£10,415,000 variable rate loan
This is a £9,500,000 secured development facility on which interest can be rolled up. The loan has been extended and is now 
repayable in one instalment on 31 January 2020. The current balance outstanding on the facility is £10,415,000, including 
£915,000 of rolled up interest.

£26,652,000 variable rate loan
This loan is repayable in one instalment on 31 January 2020. The current balance outstanding on the facility is £26,652,000.

£2,795,000 variable rate loan
This loan was repaid in March 2019.

€47,000,000 variable EURIBOR loan notes
These unsecured, Euro-denominated loan notes are repayable on 24 April 2021.

£16,800,000 variable rate loan
This loan is repayable in one instalment on 15 January 2022. The current balance outstanding on the facility is £15,800,000.

£19,710,000 variable rate loan
This loan is repayable in one instalment on 25 March 2022. The current balance outstanding on the facility is £13,410,000.

€8,515,000 ﬁxed rate loan
This loan is repayable in one instalment on 13 December 2022. The current balance outstanding on the facility is €8,515,000.

€2,180,000 ﬁxed rate loan
This loan is repayable in one instalment on 28 March 2023. The current balance outstanding on the facility is €2,180,000.

202  |  U and I Group PLC
Annual Report & Accounts 2019

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£66,666,000 ﬁxed rate loan facility
£16,431,000 loan capital amortises over the term of the loan. The remaining £50,235,000 is repayable in one instalment on 
5 December 2032. The current balance outstanding on the facility is £65,831,000.

£16,500 loan notes
These unsecured loan notes were repayable in 1999. The balance of £16,500 represents the residual amount of unredeemed 
loan notes.

A full explanation of the Group’s borrowings and any changes since the balance sheet date can be found in the Financial Review 
on pages 87 to 93. 

c) Derivative ﬁnancial instruments

Assets
Derivative ﬁnancial instruments at fair value through proﬁt or loss:
Interest rate swaps, caps and collars
Foreign exchange contracts
Derivative ﬁnancial assets

31 March 
2019
£’000

28 February 
2018
£’000

–
–
–

10
–
10

As at 31 March 2019, the Group held interest rate swaps, caps and collars designated as economic hedges and not qualifying 
as effective hedges under IFRS 9. The derivatives are used to mitigate the Group’s interest rate exposure to variable rate loans 
of £40,448,000 (28 February 2018: £47,759,000). The fair value of the derivatives as at 31 March 2019 is £nil (28 February 2018: 
£10,000 asset).

Fair value estimation
The table below analyses ﬁnancial instruments carried at fair value, by valuation method. The different levels are deﬁned as 
follows: 
i.  Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
ii.  Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, 

as prices) or indirectly (that is, derived from prices) (Level 2).

iii.  Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3). 

Discounted cash ﬂows are used to determine fair values of these instruments.

The following table presents the Group’s assets and liabilities that are measured at fair value:

ASSETS
Financial assets – available-for-sale 
Financial assets – FVPL
Financial assets – FVOCI
Current ﬁnancial assets – available-for-sale 
Current ﬁnancial assets – FVPL
Derivative ﬁnancial instruments:
Derivative ﬁnancial instruments at fair value 
through proﬁt or loss
Total assets

Level 1 
£’000

Level 2 
£’000

Level 3 
£’000

31 March 
2019 
Total 
£’000

Level 1 
£’000

Level 2
£’000

Level 3 
£’000

28 February 
2018 
Total 
£’000

–
–
–
–
–

–
–

–
–
–
–
–

–
–

–
13,244
1,271
–
13,672

–
13,244
1,271
–
13,672

–
28,187

–
28,187

–
–
–
–
–

–
–

–
–
–
–
–

15,812
–
–
7,949
–

15,812
–
–
7,949
–

10
10

–
23,761

10
23,771

203  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

17 Financial assets and ﬁnancial liabilities continued
d) Financial risk management
The Group’s activities expose it to a variety of ﬁnancial risks: market risk (including fair value interest rate risk, cash ﬂow interest 
rate risk and foreign currency risk), credit risk and liquidity risk. The objective of ﬁnancial risk management function is to establish 
the Group’s risk limits and to ensure that exposure to risk stays within established limits. The Group’s overall risk management 
focuses on the unpredictability of ﬁnancial markets and seeks to minimise potential adverse effects on the Group’s ﬁnancial 
performance. The Group uses derivative ﬁnancial instruments to hedge certain risk exposures.

The nature and extent of the Group’s ﬁnancial risks, and the Directors’ approach to managing those risks, are described in the 
Financial Review on pages 87 to 93 and below. This note provides further detailed information on these risks.

The Group deﬁnes capital as total equity and monitors this on the basis of gearing.

(i) Interest rate maturity proﬁle of ﬁnancial liabilities
The following table sets out the carrying amount by maturity of the Group’s ﬁnancial instruments that are exposed to interest 
rate risk:

31 March 2019
Fixed rate borrowings
Variable rate borrowings
Variable rate borrowings with interest 
rate caps or swaps

28 February 2018
Fixed rate borrowings
Variable rate borrowings
Variable rate borrowings with interest 
rate caps or swaps

Within 
one year 
£’000
26,652
10,432

–
37,084

Within 
one year 
£’000
46,090
10,184

6,276
62,550

One to 
two years 
£’000
–
–

Two to 
three years 
£’000
15,800
13,410

Three to
 four years 
£’000
–
9,204

Four to 
ﬁve years 
£’000
–
–

More than 
ﬁve years 
£’000
65,831
–

Total 
£’000
108,283
33,046

–
–

40,448
69,658

–
9,204

–
–

–
65,831

40,448
181,777

One to 
two years 
£’000
–
–

Two to 
three years 
£’000
–
2,105

Three to
 four years 
£’000
–
–

–
–

–
2,105

–
–

Four to 
ﬁve years 
£’000
–
–

41,483
41,483

More than 
ﬁve years 
£’000
66,589
–

Total 
£’000
112,679
12,289

–
66,589

47,759
172,727

Interest on ﬁnancial instruments classiﬁed as variable rate is re-priced at intervals of less than one year. Interest on ﬁnancial 
instruments classiﬁed as ﬁxed rate is ﬁxed until the maturity of the instrument. The other ﬁnancial assets and ﬁnancial liabilities 
of the Group that are not included above are non-interest bearing and are therefore not subject to interest rate risk.

(ii) Foreign currency risk
During the period the Group has continued to invest in the Republic of Ireland. Foreign currency exposure is monitored by the 
Board. Foreign currency risk arises from future commercial transactions, recognised assets and liabilities and net investments 
in foreign operations.

The Board has set up a policy to manage foreign currency risk against the Group’s functional currency. When the Group 
acquires property assets denominated in Euros, any associated borrowings will also be denominated in Euros to limit exposure. 
Where appropriate, the Board will also require the foreign exchange risk to be hedged. The Group also holds cash in Euro 
denominated deposit accounts to act as a natural hedge against its Euro denominated borrowings.

As at 31 March 2019, the Group was exposed to foreign currency risk from €47,000,000 (28 February 2018: €47,000,000) loan 
notes denominated in Euros. In addition to the loan notes, the Group drew down two new Euro-denominated loan facilities 
during the period of €8,515,000 and €2,180,000.

During the period to 31 March 2019, the movement of Sterling against the Euro was less volatile than in the previous 12-month 
period. Management consider 10.0% to be a prudent measure of sensitivity while negotiations continue regarding exit from the EU. 

204  |  U and I Group PLC
Annual Report & Accounts 2019

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The following table demonstrates the possible effect of changes in Sterling and Euro exchange rates on loan balances with all 
other variables held constant:

31 March 2019
Sterling against Euro

28 February 2018
Sterling against Euro

Increase/
decrease 
in rate

Effect on loan 
balances 
£’000

+10%
-10%

+10%
-10%

4,514
(5,517)

3,771
(4,609)

(iii) Interest rate risk
The Group’s interest bearing assets do not generate signiﬁcant amounts of interest and therefore are not sensitive to 
ﬂuctuations interest rates.

The Group’s interest rate risk principally arises from long-term borrowings. Borrowings issued at variable rates are partially 
offset by cash held at variable rates. The Board closely monitors interest rate risk and considers whether to ﬁx or cap interest 
rates on a loan-by-loan basis. Longer-term facilities tend to be structured with ﬁxed rates, whereas for shorter-term loans a cap 
may be preferred. Similar principles are also employed in respect of joint ventures. 
The following table demonstrates the sensitivity in respect of variable rate debt obligations to a change in interest rates, with 
other variables held constant, of the Group’s proﬁt before income tax.

The sensitivity analysis excludes all non-derivative ﬁxed rate ﬁnancial instruments carried at amortised cost as well as variable 
rate ﬁnancial instruments.

Fair value interest rate hedging instruments that are part of a hedging relationship have been excluded. Variable rate non-
derivative ﬁnancial instruments where the associated interest has been capitalised have also been excluded.

As at 31 March 2019, a movement of 50 basis points higher or lower, with all other variables held constant, would have the 
following effect on proﬁt before tax. Management consider a movement of 50 basis points to be a reasonable guide to 
sensitivity in the current interest rate environment. 

31 March 2019
Sterling borrowings

28 February 2018
Sterling borrowings

(iv) Price risk
The Group is not exposed to commodity or security price risk.

Increase/
decrease in 
basis points

Effect on 
proﬁt 
before tax 
£’000

+50
–50

+50
–50

(291)
291

(229)
229

205  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

17 Financial assets and ﬁnancial liabilities continued
d) Financial risk management continued
(v) Liquidity risk
The Group maintains a sufﬁcient level of cash and access to credit facilities in order to maintain its liquidity position. The 
Group’s liquidity position is monitored daily by management and a full 15-month cash ﬂow forecast is presented to the Board 
at each meeting.

The table below summarises the maturity proﬁle of the Group’s ﬁnancial liabilities at 31 March 2019 and 28 February 2018 on 
a contractual undiscounted payments basis:

31 March 2019
MATURITY PROFILE OF FINANCIAL LIABILITIES
Interest-bearing loans and borrowings
Trade and other payables

28 February 2018
MATURITY PROFILE OF FINANCIAL LIABILITIES
Interest-bearing loans and borrowings
Trade and other payables

On demand
 £’000

17
–
17

On demand
 £’000

Less than 
three 
months 
£’000

2,118
38,536
40,654

Less than 
three 
months 
£’000

Three to 
12 months 
£’000

One to 
ﬁve years 
£’000

More than 
ﬁve years 
£’000

Total 
£’000

43,210
14,031
57,241

97,949
–
97,949

101,544
–
101,544

244,838
52,567
297,405

Three to 
12 months 
£’000

One to 
ﬁve years 
£’000

More than 
ﬁve years 
£’000

Total 
£’000

17
–
17

2,049
44,255
46,304

68,249
33,878
102,127

60,207
–
60,207

106,842
–
106,842

237,364
78,133
315,497

(vi) Market risk
Market risk is the risk that the fair value or future cash ﬂows of a ﬁnancial instrument will ﬂuctuate due to changes in market 
prices. The Group’s market risk is sensitive to foreign currency movements and interest rate ﬂuctuations. 

A summary of market risk and its effect on the Group is set out in the Risk Review on pages 82 to 85 and further discussed in the 
Market Review on pages 42 to 49 and in the Portfolio Review on pages 24 to 32.

Fair values of ﬁnancial assets and ﬁnancial liabilities
Except as detailed below, in respect of ﬁxed rate loan facilities, the Directors consider the carrying amount to be either fair value 
or a reasonable approximation of fair value. 

Fixed rate debt
A valuation was carried out as at 31 March 2019 by J C Rathbone Associates Limited, to calculate the market value of the 
Group’s ﬁxed rate debt on a replacement basis, taking into account the difference between ﬁxed interest rates for the Group’s 
borrowings and the market value and prevailing interest rate of appropriate debt instruments. Whilst the replacement basis 
provides a consistent method for valuation of ﬁxed rate debt, such ﬁnancing facilities are in place to provide continuing funding 
for the Group’s activities. The valuation is therefore only an indication of a notional effect on the net asset value of the Group as 
at 31 March 2019, and may be subject to daily ﬂuctuations in line with money market movements.

J C Rathbone Associates Limited have consented to the use of their name in the ﬁnancial statements.

The fair value compared with the carrying amounts of the Group’s ﬁxed rate ﬁnancial liabilities as at 31 March 2019 and 
28 February 2018 is analysed below: 

Fixed rate term loan due 2032

Book value 
31 March 
2019 
£’000
65,831

Fair value 
31 March 
2019 
£’000
78,479

Book value 
28 February 
2018 
£’000
66,589

Fair value 
28 February 
2018 
£’000
76,103

The fair value difference of £12,648,000 at 31 March 2019 (28 February 2018: £9,514,000) represents approximately 19.2% of 
gross, ﬁxed rate borrowings (28 February 2018: 14.3%). The effect on net assets per share after tax of this adjustment would be 
a decrease of 8.2 pence after tax (28 February 2018: 6.1 pence decrease).

206  |  U and I Group PLC
Annual Report & Accounts 2019

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(vii) Credit risk
Credit risk is the risk that one party to a ﬁnancial instrument will fail to discharge an obligation. The Group has no signiﬁcant 
concentrations of credit risk. 

Credit risk is managed on a Group basis. The Group has policies in place to protect against credit risk:
 – Rental contracts are entered into with lessees with suitable credit history and are monitored throughout their tenancy.
 – Cash balances and derivative contracts are held with suitably rated ﬁnancial institutions and limits are placed on the value of 

deposits with each institution.

The Group has three types of ﬁnancial assets which are subject to the expected credit loss model:
 – Trade receivables.
 – Debt investments held at FVOCI.
 –  Debt investments held at amortised cost.

Cash and cash equivalents and tenant deposits are subject to impairments tests under IFRS 9, however the identiﬁed loss is 
considered immaterial. Tenant deposits are only refunded to lessees once all obligations have been settled. The fair value of 
cash and cash equivalents as at 31 March 2019 and 28 February 2018 approximate to their carrying values.

Trade receivables for investment property tenants are demanded and collected by third-party managing agents acting for the 
Group. Balances are closely monitored and legal action is taken if payments are overdue where no alternative payment plan has 
been put in place. The Group operates a diversiﬁed portfolio with a mix of ofﬁce, retail and residential assets with over 400 
tenants. The Group’s maximum exposure to a single entity is limited to approximately 5% of the annual rent roll. Due diligence 
is carried out on new tenants and nearly 65% of the rental income comes from PLCs, national retailers, FTSE 100 or the 
Government. It is assumed that if a tenant defaults the recovery will be zero.

To measure the expected credit loss of trade receivables, the Group has reviewed aged balances on a portfolio basis. The 
Group has based its assessment on previous bad debts, current trading conditions of the tenant portfolio in the different 
sectors they operate and future expectations.

On that basis the impairment provision for 31 March 2019 is calculated as follows:

Days past due
Quarterly rent roll
0–30 days
31–60 days
61–90 days
91–120 days
120+ days

Estimated 
default rate 
%

Gross 
carrying 
amount 
£’000

Lifetime 
expected 
loss 
£’000

0.5
0.5
1.0
15.0
50.0

1,338
27
226
26
194
1,811

–
–
2
4
98
104

The Group holds a 5.0% investment in the LaSalle Land Limited Partnership. The fund looks to purchase or take out options or 
promotion agreements on land. The fund actively promotes the sites, aiming to enhance their value by obtaining planning 
permissions, ultimately selling the plots for a gain. 

The fund currently has interest in ﬁve land plots around the UK. At each reporting date, the Group fair values its holding based 
on the projected future cash ﬂows of the fund. Any uplift or decline in value of the fund will be reﬂected in OCI.

As at 31 March 2019, the fair value of the Group’s holding is £1,271,000 (28 February 2018: £1,285,000).

18 Deferred income tax
The following are the deferred income tax liabilities and assets and movements thereon recognised by the Group during the 
current and previous ﬁnancial period/year. The UK corporation tax rate is 19% (28 February 2018: 19%). Deferred income tax 
is calculated on the temporary differences under the liability method using a tax rate of 17% (28 February 2018: 17%).

Charge/(credit) for the period/year in the income statement (refer note 6)
Credited directly to equity

31 March 
2019
£’000
89
–
89

28 February 
2018
£’000
(144)
–
(144)

207  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

18 Deferred income tax continued

Decelerated
capital 
allowances 
£’000

Provisions 
£’000

Proﬁt on 
disposal 
£’000

Provision for 
unrealised 
inter Group 
proﬁts
£’000

Property
revaluations
£’000

Tax losses 
£’000

Net fair value 
adjustments 
£’000

Total 
£’000

DEFERRED INCOME TAX 
(ASSETS)/LIABILITIES 
RECOGNISED:
At 1 March 2017
(Credited)/charged to the 
income statement
At 28 February 2018
Charged/(credited) to the 
income statement
At 31 March 2019

(60)

(163)
(223)

218
(5)

(475)

86
(389)

–
(389)

545

(545)
–

–
–

−

−
−

(321)
(321)

–

1,660
1,660

707
2,367

(824)

211
(613)

34
(579)

Deferred income tax assets
Deferred income tax liabilities
NET DEFERRED INCOME TAX LIABILITIES

3,023

2,209

(1,393)
1,630

(549)
1,081

(144)
2,065

89
2,154

31 March 
2019
£’000
1,294
(3,448)
(2,154)

28 February 
2018
£’000
1,225
(3,290)
(2,065)

Deferred income tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention 
to settle the balances net. Deferred income tax assets arising from the Group’s trading and capital losses are recognised on the 
basis that there will be sufﬁcient proﬁts in the foreseeable future to utilise such losses as assessed by management forecasts. 
The Group has not recognised deferred income tax assets of £6,714,000 (28 February 2018: £6,818,000) in respect of losses 
amounting to £39,494,000 (28 February 2018: £40,105,000) that can be carried forward against future taxable income.

Movements in deferred income tax assets and liabilities (prior to the offsetting of balances) are shown above.

19 Share capital

Issued, called up and fully paid
125,431,713 Ordinary shares of 50 pence (28 February 2018: 125,342,726 Ordinary shares of 50 pence)

Shares in issue at the date of this report

The Company has one class of Ordinary shares which carry no right to ﬁxed income.

31 March 
2019
£’000

28 February 
2018
£’000

62,716

62,671

Number of shares
125,431,713

During the period, the Company utilised 74,143 treasury shares to satisfy its obligations under the Company’s 2015 LTIP award. 
In addition, the Company acquired 646,134 of its own shares through purchases on the London Stock Exchange for an average 
price of £2.07 per share. The total amount paid to acquire the shares was £1,350,000 and has been deducted from shareholder 
equity. The shares are held as ‘treasury shares’. The Company has purchased the shares in order to satisfy its obligations under 
the Group’s Long-term Incentive Plan. As at 31 March 2019, the Group holds a total of 690,783 treasury shares (28 February 
2018: 118,792). 

The Company has the right to re-issue these shares at a later date. All shares are fully paid.

a) Share option schemes
As at 31 March 2019, and at the date of this report, the options outstanding under the Company’s share option schemes were 
exercisable as set out below (price stated in pence per share). The share options are more fully described in the Remuneration 
Report on pages 131 to 148. 

SAYE option plan 2005:

Date of grant
19 December 2017

208  |  U and I Group PLC
Annual Report & Accounts 2019

31.03.19 
Number
293,589

22.05.19 
Number
293,589

Exercise dates
1 February 2021 to 31 July 2021

Price
152.0

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b) Share-based payments
The following table illustrates the number and weighted average exercise prices of, and movements in, share options during 
the period:

Assets
At 1 March 2018 and 1 March 2017
Options granted
Options exercised
Options lapsed
Options cancelled
At 31 March 2019 and 28 February 2018

31 March 
2019 
Weighted
 average 
exercise 
price 
Pence
158.5
–
179.2
179.2
152.0
152.0

28 February 
2018 
Weighted 
average 
exercise 
price 
Pence
179.2
152.0
179.2
−
179.2
158.5

Number
228,172
339,666
(115,986)
−
(5,022)
446,830

Number
446,830
–
(88,987)
(7,029)
(57,225)
293,589

The options outstanding at 31 March 2019 are exercisable at 152.0 pence per share and have a weighted average remaining 
contractual life of 2.3 years (28 February 2018: 2.6 years).

The fair value of grants is measured at the grant date using a Black-Scholes pricing model, taking into account the terms and 
conditions upon which the instruments were granted. The services received and a liability to pay for those services are 
recognised over the expected vesting period. The main assumptions of the Black-Scholes pricing model are as follows:

Grant date 
Exercise price (pence)
Term (years)
Expected volatility
Expected dividend yield p.a.
Risk-free rate
Expected forfeiture p.a.

19.12.17
152.0
3
21%
3.0%
1.5%
£nil

Expected volatility was determined by calculating the historical volatility of the U and I Group PLC share price over multiple time 
periods. The expected volatility reﬂects the assumption that the historical volatility is indicative of future trends, which may not 
necessarily be the actual outcome.

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur.

c) Conditional awards under the Long-Term Incentive Plan (LTIP) 

The LTIP commenced on 1 March 2015 and the ﬁrst award vested in June 2018. The terms of these plans are set out in the 
Remuneration Report on pages 131 to 148.

The ﬁrst award made under the LTIP was on 5 June 2015. Under the scheme, Ordinary shares are conditionally awarded based 
on the performance of the Group over a four-year period for Executive Directors and a three-year period for staff. The performance 
of the Group is referenced to the net asset value per share growth over the vesting period and is based on non-market conditions. 
The Directors assess the likelihood of the award vesting with the maximum amount that will vest based on a forward-looking 
forecast of the Group.

The principal assumptions for calculating the fair value of the Ordinary shares conditionally awarded are:

Ordinary shares conditionally awarded (no. of shares)
Date of award
Share price (pence)
Vesting period (months)

LTIP 
2019
2,042,204

LTIP 
2018
2,446,632
7 June 2018 30 May 2017
194.2
33

244.5
33

 LTIP 
2017
2,319,839
9 June 2016
191.1
33

The credit recognised for equity-settled share-based payments in respect of employee services received during the period is a 
£10,000 (28 February 2018: £1,750,000 charge). The credit has arisen due to the 2016 LTIP award not vesting and reassessment 
of the projections for the 2017 and 2018 awards.

The charge recognised for cash-settled share-based payments during the period is £nil (28 February 2018: £nil).

209  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

20 Reserves and movements in equity

At 1 March 2017
Employee share option 
scheme
Share-based payments
Revaluation of operating 
property realised on sale
Currency translation 
differences – Group
At 28 February 2018
Employee share option 
scheme
Share-based payments – 
SAYE exercised
Share-based payments – 
LTIP exercised
Share-based payments
Treasury shares utilised
Treasury shares purchased
Revaluation of operating 
property realised on sale
Currency translation 
differences – Group
At 31 March 2019

Share 
capital 
£’000
62,613

Share 
premium 
£’000
104,325

Net unrealised 
gain/(loss) 
reserve 
£’000
2,133

Share-based 
payments 
reserve 
£’000
2,039

Capital 
redemption 
reserve 
£’000
1,631

Capital 
reserve 
£’000
44,188

Merger 
reserve 
£’000
4,725

Treasury 
shares 
£’000
(165)

58
–

–

150
–

–

–
–

35

–
62,671

–
104,475

292
2,460

45

115

–

–
–
–
–

–

–

–
–
–
–

–

–
62,716

–
104,590

–

–

–
–
–
–

40

163
2,663

–
1,750

–

–
3,789

–

(109)

(962)
(10)
–
–

–

–
–

–

–
–

–

–
–

–

–
1,631

–
44,188

–
4,725

–

–

–
–
–
–

–

–

–

–
–
–
–

–

–

–

–
–
–
–

–

–
2,708

–
1,631

–
44,188

–
4,725

–
–

–

–
(165)

–

–

–
–
57
(1,350)

–

–
(1,458)

The capital redemption reserve arose from business combinations in prior ﬁnancial years. This reserve is not distributable.

The merger reserve comprises the premium on shares following the share issue to acquire Cathedral Group. No share 
premium is recorded in the Company’s ﬁnancial statements through the operation of the Merger Relief provisions of the 
Companies Act 2006.

Retained earnings

At 1 March 2017
Proﬁt for the year
Final dividend 2017
Supplemental dividend 2017
Interim dividend 2018
At 28 February 2018
Proﬁt for the period
Share-based payments – SAYE exercised
Final dividend 2018
Supplemental dividend 2018
Interim dividend 2019
At 31 March 2019

210  |  U and I Group PLC
Annual Report & Accounts 2019

£’000
126,136
40,256
(4,379)
(3,503)
(3,003)
155,507
5,200
109
(4,390)
(15,033)
(3,011)
138,382

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21 Note to the cash ﬂow statement
Reconciliation of proﬁt before income tax to net cash inﬂow/(outﬂow) from operating activities:

Proﬁt before income tax
Adjustments for:
Loss/(gain) on disposal of investment properties
Loss on revaluation of property portfolio
Other income
Share of post-tax proﬁts of joint ventures and associates
Proﬁt from sale of investment
Loss/(proﬁt) on sale of other plant and equipment
Finance income
Finance cost
Depreciation of property, plant and equipment
Operating cash ﬂows before movements in working capital
Decrease/(increase) in development and trading properties
Decrease/(increase) in receivables
(Decrease)/increase in payables
(Decrease)/increase in provisions
Cash ﬂows generated from/(used in) operating activities

Analysis of movement in net debt

31 March 
2019
£’000
6,320

28 February 
2018
£’000
48,172

223
11,165
–
(12,128)
(3,888)
42
(617)
6,432
885
8,434
3,680
45,635
(23,940)
(2,247)
31,562

(3,324)
2,417
(2,089)
(16,175)
(6,713)
(5)
(94)
9,783
960
32,932
(10,037)
(57,042)
33,696
240
(211)

At 1 March
Cash ﬂow
Foreign currency exchange movements
Non-cash movements
At 31 March/28 February 

31 March 2019

28 February 2018

Cash and 
deposits
£’000
52,099
(11,347)
–
–
40,752

Borrowings 
£’000
(171,184)
(7,780)
1,035
(1,827)
(179,756)

Net debt
 £’000
(119,085)
(19,127)
1,035
(1,827)
(139,004)

Cash and 
deposits
£’000
51,271
840
(12)
–
52,099

Borrowings 
£’000
(172,125)
2,419
(1,497)
19
(171,184)

Net debt
 £’000
(120,854)
3,259
(1,509)
19
(119,085)

22 Financial commitments and operating lease arrangements
Capital commitments
At 31 March 2019, the Group had contracted capital expenditure of £148,000 (28 February 2018: £nil). The Group has no 
commitments for loans to its associates (28 February 2018: £nil).

Operating lease arrangements
Operating lease arrangements in respect of land and buildings where the Group is lessee:

Minimum lease payments under operating leases recognised for the period/year

31 March 
2019
£’000
3,606

28 February 
2018
£’000
4,363

At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable 
operating leases, which fall due as follows:

Within one year
In the second to ﬁfth years inclusive
After ﬁve years

31 March 
2019
£’000
3,073
10,991
2,119
16,183

28 February 
2018
£’000
4,397
11,778
4,694
20,869

Operating lease payments represent rentals payable by the Group for some of its leasehold properties. Leases were negotiated 
for an average term of 13.4 years (28 February 2018: 13.4 years).

211  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED

22 Financial commitments and operating lease arrangements continued
Operating lease arrangements continued
In respect of operating lease arrangements where the Group is lessor, at the balance sheet date, the Group had contracted with 
tenants for the following future minimum payments:

Within one year
In the second to ﬁfth years inclusive
After ﬁve years

31 March 
2019
£’000
12,595
37,015
34,290
83,900

28 February 
2018
£’000
7,856
23,639
24,739
56,234

Property investment income earned during the period was £16,299,000 (28 February 2018: £12,086,000).

23 Contingent liabilities
In the normal course of its development activity, the Group is required to guarantee performance bonds provided by banks in 
respect of certain obligations of Group companies. As at 31 March 2019, such guarantees amounted to £5,607,000 (28 February 
2018: £5,543,000).

The Group has provided guarantees for rent liabilities in respect of properties previously occupied by Group companies. In the 
event that the current tenants ceased to pay rent, the Group would be liable to cover any shortfall until the building could be 
re-let. The Group has made provision against crystallised liabilities in this regard. In respect of potential liabilities where no 
provision has been made, the annual rent-roll of the buildings beneﬁting from such guarantees is £7,000 (28 February 2018: 
£7,000) with an average unexpired lease period of 67 years (28 February 2018: 68 years).

The Group has guaranteed its share of interest up to a maximum of £575,000 in respect of the £26,000,000 loan in Notting Hill 
(Guernsey Holdco) Limited. 

24 Pension scheme
The Company operates a deﬁned contribution scheme for Directors and employees. Monthly premiums are invested in an 
independent insured fund.

The amounts charged to the Income Statement during the period are set out in note 4.

25 Related parties
During the period, the Group entered into transactions, in the ordinary course of business, with related parties.

Transactions entered into and balances outstanding at 31 March 2019 and 28 February 2018 with related parties are set out 
below. Only Directors are considered to be key management personnel.

There were no further transactions with Directors other than remuneration set out in the Remuneration Report on pages 
131 to 148.

Finance 
income from 
related 
parties 
£’000

2,547
2,089

–
–

Amounts 
owed by 
related 
parties 
(before 
provision) 
£’000

74,718
61,989

17,252
19,878

JOINT VENTURES
31 March 2019
28 February 2018
ASSOCIATES
31 March 2019
28 February 2018

The Group’s share of results from associates and joint ventures is set out in note 13.

212  |  U and I Group PLC
Annual Report & Accounts 2019

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26 Projects in partnership
The following is a summary of the Group’s projects in partnership and the balance sheet classiﬁcation of its ﬁnancial interests:

Accounting classiﬁcation
Project activity
Investment in associates
Property development
Financial assets
Property development
Financial assets
Property development
Investment in joint ventures
Property development
Financial assets
Property development
Property development
Financial assets
Strategic land investment Financial assets
Financial assets
Strategic investment
Financial assets
Property development
Financial assets
Property development
Investment in joint ventures
Property development
Investment in joint ventures
Property development
Investment in joint ventures
Investment property
Investment in joint ventures
Investment property
Investment in joint ventures
Property development
Investment in joint ventures
Property development

Project/partner
Cannock Designer Outlet LP
Cathedral (Movement, Greenwich) LLP
Northpoint Developments Limited
Curzon Park Limited
Curzon Park Limited
Henry Davidson Developments Limited
LaSalle Land LP
PropTech investments
Quinn Estates Brokehill Limited
Quinn Estates Newtown Works Limited
Circus Street Developments Limited
Development Equity Partners Limited
DSP Piano Investments BV
DSP Tirol Limited
DS Renewables LLP
Harwell Oxford Developments Limited
Kensington & Edinburgh Estates (South 
Woodham Ferrers) Limited
Property development
Luxembourg Investment Company 112 Sarl Property development
Manchester Arena Complex LP
Mayﬁeld Development (General Partner)
Limited
Notting Hill (Guernsey Holdco) Limited
Opportunities for Sittingbourne Limited
OSB (Holdco 1) Limited
Plus X Holdings Limited
Triangle London Developments LLP
UAI (G) Limited
UAIH Yorkshire Limited
UAIP (Drum) BV
Winnebago Holdings Sarl

Property development
Property development
Property development
Property development
Strategic investment
Property development
Property development
Property development
Property development
Investment property

Investment property

Investment in joint ventures
Investment in joint ventures
Investment in joint ventures

Investment in joint ventures
Investment in joint ventures
Investment in joint ventures
Investment in joint ventures
Investment in joint ventures
Investment in joint ventures
Investment in joint ventures
Investment in joint ventures
Investment in joint ventures
Investment in joint ventures

The aggregate amounts included within each relevant balance sheet account are as follows:

Investment in associates
Investment in joint ventures
Financial assets – current
Financial assets – non-current

31 March 
2019
£’000
5,763
100
14,211
5,336
8,423
344
1,271
578
3,770
2,923
3,642
268
–
3,472
17,085
30,322

211
15,481
–

13,193
8,729
124
–
1,771
191
666
697
2,682
–
141,253

28 February 
2018
£’000
–
100
16,837
260
10,505
344
1,285
–
3,578
–
5,106
269
14,276
4,212
11,537
24,356

311
15,330
156

6,269
8,321
128
–
–
306
504
124
1,263
78
125,455

31 March 
2019
£’000
5,763
103,870
22,634
8,986
141,253

28 February 
2018
£’000
–
92,806
16,837
15,812
125,455

27 Post balance sheet events
As at 31 March 2019, the Group had exchanged contracts on the sale of a number of assets held directly and in joint venture. 
These sales have since successfully completed.

213  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
COMPANY BALANCE SHEET
AS AT 31 MARCH 2019

FIXED ASSETS
Tangible assets
Debtors – loans and receivables
Derivative ﬁnancial instruments
Deferred income tax asset
Investments

CURRENT ASSETS
Debtors – loans and receivables
Debtors
Cash at bank and in hand

CREDITORS
Amounts falling due within one year
Net current assets

Total assets less current liabilities

CREDITORS
Amounts falling due after more than one year:
Bank loans
Deferred income tax liabilities
Provisions for liabilities

Net assets

CAPITAL AND RESERVES
Called up share capital
Share premium account
Other reserves
Proﬁt and loss account
Total shareholders’ funds

Notes

31
34
35(d)
36
32

31 March 2019
£’000

£’000

28 February 2018
£’000

£’000

4,448
922
–
707
135,601

4,087
344
10
678
104,257

141,678

109,376

34
33

14,211
431,950
30,314

16,837
525,334
37,935

476,475

580,106

35(a)

(238,682)

(310,331)

237,793

379,471

269,775

379,151

35(b)
36
35(c)

(104,543)
(107)
(136)

(106,158)
(83)
(172)

(104,786)
274,685

(106,413)
272,738

37
38
38
38

62,716
104,590
7,606
99,773

62,671
104,475
9,980
95,612

274,685

272,738

The proﬁt after tax for the period was £26,486,000 (28 February 2018: £8,981,000 loss).

The notes on pages 216 to 225 are an integral part of these ﬁnancial statements.

Approved by the Board of Directors on 21 May 2019 and signed on its behalf by:

M S Weiner
Director

214  |  U and I Group PLC
Annual Report & Accounts 2019

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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE 13-MONTH PERIOD ENDED 31 MARCH 2019

Called up 
share 
capital 
£’000
62,613

Share 
premium 
account
£’000
104,325

Other 
reserves 
£’000
8,230

Proﬁt and
loss account
£’000
115,478

–
58
–
–
–
–

–
150
–
–
–
–

58
62,671

150
104,475

–
45
–
–
–
–
–

–
115
–
–
–
–
–

45
62,716

115
104,590

–
–
1,750
–
–
–

1,750
9,980

–
–
(1,081)
(1,293)
–
–
–

(2,374)
7,606

Total 
£’000
290,646

(8,981)
208
1,750
(4,379)
(3,503)
(3,003)

(8,981)
–
–
(4,379)
(3,503)
(3,003)

(10,885)
95,612

(8,927)
272,738

26,486
–
109
–
(4,390)
(15,033)
(3,011)

26,486
160
(972)
(1,293)
(4,390)
(15,033)
(3,011)

(22,325)
99,773

(24,539)
274,685

At 1 March 2017
Loss and total comprehensive expense for the 
year ended 28 February 2018
Issue of Ordinary shares
Share-based payments
Final dividend 2017
Supplemental dividend 2017
Interim dividend 2018
Total contributions by and distributions to owners 
of the Company
Balance at 28 February 2018
Proﬁt and total comprehensive income for the 
13-month period ended 31 March 2019
Issue of Ordinary shares
Share-based payments (net movement)
Treasury shares (net movement)
Final dividend 2018
Supplemental dividend 2018
Interim dividend 2019
Total contributions by and distributions to owners 
of the Company
Balance at 31 March 2019

Notes

38
38

38
38
38

215  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE COMPANY FINANCIAL STATEMENTS

28 Accounting policies
a) General information
The Company is a public 
limited company which is 
listed on the London Stock 
Exchange and is incorporated 
and domiciled in the UK. 
U and I Group PLC is the 
holding company for the 
U and I Group of companies.

(i) Basis of preparation
The Company’s ﬁnancial 
statements have been 
prepared in compliance with 
United Kingdom Accounting 
Standards, including 
Financial Reporting Standard 
102, ‘The Financial Reporting 
Standard applicable in the 
United Kingdom and the 
Republic of Ireland’ (FRS 102) 
and the Companies Act 
2006. Accounting policies 
adopted are consistent with 
the previous year, unless 
otherwise stated, and are set 
out below. 

The Company has not 
presented its own proﬁt and 
loss account, as permitted by 
Section 408 of the 
Companies Act 2006. 

The Company has also taken 
advantage of the following 
exemptions:
i. 

from presenting a 
reconciliation of the 
number of shares 
outstanding at the 
beginning and end of 
the year

ii.  from preparing a 

statement of cash ﬂows 
on the basis that it is a 
qualifying entity and the 
Consolidated Cash Flow 
Statement, included in 
these ﬁnancial statements, 
includes the Company’s 
cash ﬂows

iii.  from the ﬁnancial 

instrument disclosures 
required under FRS 102 
as the information is 
provided in the 
Consolidated ﬁnancial 
statements

iv.  from disclosing the 

share-based payment 
arrangements required 
under FRS 102 concerning 
its own equity instruments. 
The Company ﬁnancial 
statements are presented 
within the Consolidated 
ﬁnancial statements and 
the relevant disclosures 
are included therein and

v.  from disclosing key 

management personnel 
compensation as required 
by FRS 102.

The ﬁnancial statements were 
approved by the Directors for 
issue on 21 May 2019.

(ii) Critical accounting 
judgements and estimates
When preparing the Company 
ﬁnancial statements, 
management are required 
to make judgements, 
assumptions and estimates 
concerning the future. 
These judgements and 
assumptions are made at the 
time the ﬁnancial statements 
are prepared and adopted 
based on the best 
information available. Actual 
outcomes may be different 
from initial estimates and are 
reﬂected in the ﬁnancial 
statements as soon as they 
become apparent. 
Management believe that the 
underlying assumptions are 
appropriate. Areas requiring 
judgements or estimates are 
discussed below.

Judgements other than 
estimates
1.1 Derivative ﬁnancial 
instruments
The Company is party to a 
number of interest rate swap 
and foreign currency 
agreements which are 
accounted for as derivatives 
and measured at fair value. 
The estimation of this ﬁgure 
is based upon market 
assumptions about future 
movements in interest and 
exchange rates. The 
estimated fair values and the 
movements in the period are 
set out in note 17(c) to the 
Consolidated ﬁnancial 
statements.

1.2 Group Long-Term 
Incentive Plan (LTIP)
During the period, the 
Company made awards to 
staff under the Group’s LTIP. 
The awards vest according 
to a number of performance 
criteria, the primary measure 
being net asset value growth 
over a three-year period. 
In calculating the provision 
to accrue, management 
are required to estimate 
net asset growth over the 
vesting period. The estimate 
is reassessed at each 
reporting date.

b) Investments
The Company’s investments 
in subsidiaries, associates 
and joint ventures are 
accounted for in the ﬁnancial 
statements at cost less any 
provision for impairment.

Loans and receivables are 
initially recognised at fair 
value and subsequently at 
amortised cost using the 
effective interest method.

c) Operating leases
Rental payments under 
operating leases are charged 
on a straight-line basis to the 
proﬁt and loss account over 
the lease term even if the 
payments are not made on 
such a basis.

d) Tangible assets
Tangible assets are held 
at cost less accumulated 
depreciation and any 
provision for impairment. 
Cost includes the original 
purchase price of the asset 
and the costs attributable 
to bringing the asset to its 
working condition for its 
intended use. Depreciation 
is provided so as to write off 
the cost less estimated 
residual value of such assets 
over their expected useful 
lives on a straight-line basis. 
The principal annual rates 
used for this purpose are 
as follows:

Fixtures, ﬁttings and 
computer equipment 
– 10% to 33%

Motor vehicles  
– 20%

e) Provisions for liabilities
A provision is recognised 
when the Company has a 
present legal or constructive 
obligation as a result of past 
events, it is probable that an 
outﬂow of resources will be 
required to settle the 
obligation and the amount 
can be reliably estimated.

Provisions are measured at 
the present value of the 
expenditure expected to 
be required to settle the 
obligation. The accretion 
in the discount is recognised 
as an interest expense.

216  |  U and I Group PLC
Annual Report & Accounts 2019

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f) Taxation
Current tax is the expected 
tax payable on the taxable 
income for the period, using 
tax rates applicable at the 
balance sheet date, together 
with any adjustment in 
respect of previous periods.

Deferred tax is the tax 
expected to be payable or 
recoverable on differences 
between the carrying amount 
of assets and liabilities in the 
ﬁnancial statements and the 
corresponding tax basis used 
in the computation of taxable 
proﬁt, and is accounted for 
using the balance sheet 
liability method. Deferred tax 
liabilities are generally 
recognised for all taxable 
temporary differences and 
deferred tax assets are 
recognised to the extent that 
it is probable that taxable 
proﬁts will be available 
against which deductible 
temporary differences or 
unutilised tax losses can 
be utilised.

Deferred tax assets and 
liabilities are measured at the 
tax rates that are expected to 
apply to the year when the 
asset is realised or the liability 
is settled, based on tax rates 
and tax laws that have been 
enacted or substantively 
enacted at the balance sheet 
date. Income tax relating to 
items recognised directly in 
equity is recognised in equity 
and not in the proﬁt and loss 
account. Deferred tax is 
measured on a non-
discounted basis.

g) Pension schemes
The Company operates a 
deﬁned contribution scheme 
on behalf of the U and I 
Group. The charge to the 
proﬁt and loss in the period 
represents the actual amount 
payable to the scheme in the 
period. Differences between 
contributions payable in the 
period and contributions paid 
are shown as either accruals 
or prepayments in the 
Balance Sheet.

h) Foreign currencies
Transactions denominated 
in foreign currencies are 
translated into UK Sterling at 
the rates ruling at the dates of 
the transactions. Monetary 
assets and liabilities 
denominated in foreign 
currencies at the balance 
sheet date are translated at 
the rates ruling at that date. 
Exchange movements are 
dealt with in the proﬁt and 
loss account.

i) Financial instruments
Derivatives, including interest 
rate swaps and foreign 
exchange contracts, are not 
basic ﬁnancial instruments.

Derivatives are initially 
recognised at fair value on 
the date a derivative contract 
is entered into and are 
subsequently re-measured 
at their fair value. Changes 
in the fair value of derivatives 
are recognised in proﬁt or 
loss in ﬁnancial costs or 
income as appropriate.

The Company does not 
currently apply hedge 
accounting for interest rate 
and foreign exchange 
derivatives.

No expense is recognised for 
awards that do not ultimately 
vest, except for awards 
where vesting is conditional 
upon a market condition, 
which are treated as vesting 
irrespective of whether or not 
the market condition is 
satisﬁed, provided that all 
other performance conditions 
are satisﬁed. 

At each balance sheet date 
before vesting, the cumulative 
expense is calculated, 
representing the extent to 
which the vesting period has 
expired and management’s 
best estimate of the 
achievement or otherwise of 
non-market conditions and of 
the number of cash-settled 
share-based instruments that 
will ultimately vest or, in the 
case of an instrument subject 
to a market condition, 
be treated as vesting as 
described above. The 
movement in cumulative 
expense since the previous 
balance sheet date is 
recognised in the income 
statement, with a 
corresponding entry 
in accruals.

29 Operating proﬁt
Details relating to staff costs 
and staff numbers can be 
found in note 4 to the 
Consolidated ﬁnancial 
statements. Further 
information relating to 
Directors’ remuneration is 
shown in the Remuneration 
Report on pages 131 to 148.

Auditors’ remuneration in 
respect of the audit for the 
Company was £15,000 
(28 February 2018: £15,000).

j) Share-based payments
The Company operates 
a number of share-based 
compensation plans, both 
equity and cash settled, 
under which the entity 
receives services from 
employees as consideration 
for cash or equity-settled 
instruments of the Company.

The fair value of the employee 
services received in exchange 
for the grant of the option is 
recognised as an expense. 
The total amount to be 
expensed is determined by 
reference to the fair value of 
the options granted.

Long-Term Incentive Plan 
(LTIP)
The LTIP commenced on 
1 March 2015.

Under the scheme, Ordinary 
shares are conditionally 
awarded based on the 
performance of the Group 
over a four-year period for 
Executive Directors and a 
three-year period for staff. 
The performance of the 
Group is referenced to the 
net asset value per share 
growth over the vesting 
period and is based on 
non-market conditions. 
The Directors assess the 
likelihood of the award 
vesting and the maximum 
amount that will vest based 
on forward-looking forecast 
of the Group.

The Company has used a 
Black-Scholes option pricing 
model to determine the fair 
value of share options 
granted. The cost of cash-
settled transactions with 
employees and Directors is 
measured by reference to the 
fair value at the date at which 
they are granted and is 
recognised as an expense 
over the vesting period, 
which ends on the date on 
which the relevant employees 
become fully entitled to 
the award.

217  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE COMPANY FINANCIAL STATEMENTS
CONTINUED

30 Operating lease arrangements

The Company as lessee:
Minimum lease payments under operating leases recognised for the period/year

Annual commitments under non-cancellable operating leases are as follows:

Operating leases which expire:
Within one year
In the second to ﬁfth years inclusive
After ﬁve years

31 March 
2019
£’000

28 February 
2018
£’000

2,450

2,571

31 March 
2019
£’000

28 February 
2018
£’000

2,250
10,091
1,684
14,025

2,250
9,961
4,250
16,461

Operating lease payments represent rentals payable by the Company for its ofﬁce property. The lease payments were 
negotiated for an average term of 11.4 years (28 February 2018: 11.4 years).

31 Tangible assets

COST
At 1 March 2018
Additions
Disposals
At 31 March 2019
ACCUMULATED DEPRECIATION
At 1 March 2018
Charge for the period
Disposals
At 31 March 2019
Net book amount 31 March 2019
Net book amount 28 February 2018

32 Investments

COST
At 1 March 2018
Additions
Capital reduction
Liquidation of subsidiary 
At 31 March 2019
AMOUNTS PROVIDED
At 1 March 2018
Reversal of previous provisions
Liquidation of subsidiary
At 31 March 2019

Net book amount 31 March 2019
Net book amount 28 February 2018

The full list of subsidiaries of the Company is set out in note 41.

218  |  U and I Group PLC
Annual Report & Accounts 2019

Fixtures, 
ﬁttings 
and computer 
equipment 
£’000

Motor 
vehicles
£’000

6,350
1,166
(804)
6,712

2,278
780
(765)
2,293
4,419
4,072

119
35
(84)
70

104
9
(72)
41
29
15

Shares in 
subsidiary 
undertakings
 £’000

Interest in 
associated
undertakings
 £’000

Interest in
joint ventures 
£’000

162,866
8,702
(1,596)
(2,136)
167,836

(59,063)
23,144
1,430
(34,489)

133,347
103,803

997
–
–
–
997

(997)
–
–
(997)

–

454
1,800
–
–
2,254

–
–
–
–

Total
£’000

6,469
1,201
(888)
6,782

2,382
789
(837)
2,334
4,448
4,087

Total 
£’000

164,317
10,502
(1,596)
(2,136)
171,087

(60,060)
23,144
1,430
(35,486)

2,254
454

135,601
104,257

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33 Debtors 
Amounts falling due within one year

Trade debtors
Amounts owed by subsidiary undertakings
Other debtors
Current income tax asset
Other taxation recoverable
Prepayments and accrued income

Amounts owed by subsidiary undertakings are unsecured, interest free and repayable on demand.

34 Debtors – loans and receivables
Amounts falling due after more than one year

FIXED ASSETS
Development loans
PropTech investment

Amounts falling due within one year

CURRENT ASSETS
Loans and receivables
Loans notes receivable

31 March 
2019
£’000
111
409,356
16,647
885
1,640
3,311
431,950

28 February 
2018
£’000
83
516,904
4,983
598
1,201
1,565
525,334

31 March 
2019
£’000

28 February 
2018
£’000

344
578
922

344
−
344

31 March 
2019
£’000

28 February 
2018
£’000

5,249
8,962
14,211

7,949
8,888
16,837

Funding of £344,000 (28 February 2018: £344,000) has been provided to Henry Davidson Developments Limited in respect of 
one development project. Interest of 12.5% is charged in respect of this funding.

Loans and receivables include a number of working capital and project-speciﬁc loans of £5,249,000 (28 February 2018: 
£7,949,000) to Northpoint Developments Limited. The loans attract ﬁxed coupon rates of between 5.0% and 13.0%. Included in 
the above amount are two interest-free loans of £408,000 (28 February 2018: £408,000). As at 31 March 2019, the Company has 
made a provision of £2,206,000 (28 February 2018: £1,609,000) against interest receivable in respect of these loans. 

35 Creditors
a) Amounts falling due within one year

Bank loans and overdrafts 
Bank loans 
Trade creditors
Amounts owed to subsidiary undertakings
Amounts owed to associated undertakings
Other creditors
Accruals and deferred income

Bank loans are secured against investment assets held in other Group companies.

Amounts owed to subsidiary undertakings are unsecured, interest free and repayable on demand.

219  |  U and I Group PLC
Annual Report & Accounts 2019

31 March 
2019
£’000
17
595
25
229,846
1,932
225
6,042
238,682

28 February 
2018
£’000
17
545
354
299,465
1,932
2,064
5,954
310,331

 
 
 
NOTES TO THE COMPANY FINANCIAL STATEMENTS
CONTINUED

35 Creditors continued
b) Amounts falling due after more than one year

Bank loans

Information regarding loan balances is shown below:

€47,000,000 variable EURIBOR loan notes
These unsecured, Euro-denominated loan notes are repayable on 24 April 2021.

31 March 
2019
£’000
104,543

28 February 
2018
£’000
106,158

£66,666,000 ﬁxed rate loan facility
£16,431,000 loan capital amortises over the term of the loan. The remaining £50,235,000 is repayable in one instalment on 
5 December 2032. The current balance outstanding on the facility is £65,831,000.

£16,500 loan notes
These unsecured loan notes were repayable in 1999. The balance of £16,500 represents the residual amount of unredeemed 
loan notes.

Loans are shown net of transaction costs in the Balance Sheet.

c) Amounts falling due after more than one year

Provisions for liabilities

31 March 
2019
£’000
136

28 February 
2018
£’000
172

The provision of £136,000 (28 February 2018: £172,000) relates to an onerous lease obligation entered into in 2009. 

d) Derivative ﬁnancial instruments

ASSETS
Derivative ﬁnancial instruments at fair value through proﬁt and loss:
Interest rate swaps
Foreign exchange contracts
Derivative ﬁnancial assets

31 March 
2019
£’000

28 February 
2018
£’000

–
–
–

10
–
10

220  |  U and I Group PLC
Annual Report & Accounts 2019

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36 Deferred income tax
The following are the deferred income tax assets and liabilities recognised by the Company during the current ﬁnancial period. 
Deferred income tax is calculated on the temporary differences under the liability method using an income tax rate of 17.0%.

Deferred income tax (liabilities)/assets recognised:
At 1 March 2018
Credited to the income statement
At 31 March 2019

Deferred income tax assets
Deferred income tax liabilities
Net deferred income tax assets

Accelerated 
capital 
allowances 
£’000

Provisions
 £’000

Tax losses
 £’000

Net fair value 
adjustments 
£’000

(81)
3
(78)

389
−
389

289
−
289

(2)
2
−

Total
£’000

595
5
600

31 March 
2019
£’000
707
(107)
600

28 February 
2018
£’000
678
(83)
595

Deferred income tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an 
intention to settle the balances net. Movements in deferred income tax assets and liabilities are shown above.

37 Called up share capital

Issued, called up and fully paid
125,431,713 Ordinary shares of 50 pence (28 February 2018: 125,342,726 Ordinary shares of 50 pence)

Shares in issue at the date of this report

The Company has one class of Ordinary shares which carry no right to ﬁxed income.

31 March 
2019
£’000

28 February 
2018
£’000

62,716

62,671

Number of shares
125,431,713

During the period, the Company utilised 74,143 treasury shares to satisfy obligations under the Company’s 2015 LTIP award. 
In addition, the Company acquired 646,134 of its own shares through purchases on the London Stock Exchange for an average 
price of £2.07 per share. The total amount paid to acquire the shares was £1,350,000 and has been deducted from shareholder 
equity. The shares are held as ‘treasury shares’. The Company has purchased the shares in order to satisfy its obligations under 
the Group’s Long-term Incentive Plan. As at 31 March 2019, the Group holds 690,783 treasury shares (28 February 2018: 118,792).

The Company has the right to re-issue these shares at a later date. All shares are fully paid.

a) Share option schemes
As at 31 March 2019, and at the date of this report, the options outstanding under the Company’s share option schemes were 
exercisable as set out below (price stated in pence per share). The share options are more fully described in the Remuneration 
Report on pages 131 to 148. 

SAYE option plan 2005:

Date of grant
19 December 2017

31.03.19 
Number
293,589

22.05.19 
Number
293,589

Exercise dates
1 February 2021 to 31 July 2021

Price
152.0

221  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
NOTES TO THE COMPANY FINANCIAL STATEMENTS
CONTINUED

38 Reconciliation of movements in shareholders’ funds

At 1 March 2018
Employee share option scheme
Share-based payments – SAYE exercised
Share-based payments – LTIP exercised
Share-based payments
Treasury shares utilised
Treasury shares purchased
At 31 March 2019

PROFIT AND LOSS ACCOUNT
At 1 March 2017
Loss for the ﬁnancial year
Final dividend 2017
Supplemental dividend 2017
Interim dividend 2018
At 28 February 2018
Proﬁt for the ﬁnancial period
Share-based payments – SAYE exercised
Final dividend 2018
Supplemental dividend 2018
Interim dividend 2019
At 31 March 2019

Called up
share
capital
£’000
62,671
45
–
–
–
–
–
62,716

Share
premium
 account
£’000
104,475
115
–
–
–
–
–
104,590

Share-based 
payments 
reserve
£’000
3,789
–
(109)
(962)
(10)
–
−
2,708

Capital 
redemption
 reserve
£’000
1,631
–
–
–
–
–
–
1,631

Merger
reserve
£,000
4,725
–
–
–
–
–
–
4,725

Treasury
shares
£’000
(165)
–
–
–
–
57
(1,350)
(1,458)

£’000

115,478
(8,981)
(4,379)
(3,503)
(3,003)
95,612
26,486
109
(4,390)
(15,033)
(3,011)
99,773

The proﬁt after tax of the Company was £26,486,000 (28 February 2018: £8,981,000 loss).

39 Contingent liabilities
The contingent liabilities of the Group are set out in note 23. The Company has provided guarantees in respect of loans and 
overdrafts of its subsidiary entities totalling £75,481,000 (28 February 2018: £64,638,000). In addition, the Company has 
guaranteed the performance of subsidiary entities under a range of operating obligations, none of which is expected to give 
rise to a liability in the Company.

40 Related parties
Related party transactions are the same for the Company as for the Group. Details can be found in note 25 to the Consolidated 
ﬁnancial statements.

41 Details of related undertakings of U and I Group PLC
In accordance with Section 409 of the Companies Act 2006, a full list of subsidiaries, partnerships, associates, joint ventures 
and joint arrangements, the country of incorporation, the registered address and the effective percentage of equity owned, 
as at 31 March 2019 is disclosed below. Unless otherwise stated, the Group’s shareholding represents ordinary shares held 
indirectly by U and I Group PLC and the registered ofﬁce is 7A Howick Place, London SW1P 1DZ. 

All interests are in Ordinary share capital and have been consolidated.

222  |  U and I Group PLC
Annual Report & Accounts 2019

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Entities where the Group holds 100% of the equity:

Wholly-owned subsidiaries
399 Edgware Road Management Company Limited
48 Goldhawk Road Limited
Airport House Business Centre Limited
Barrack Close Limited
Barwood Land and Estates Limited
Barwood Land Investments Limited
Becket House Asset Management Limited
Beyond Green Developments (Broadland) Limited
Birmingham International Park (2000) Limited
Birmingham International Park Limited
Bruform Limited
Bryn Blaen Wind Farm Limited
Burghﬁeld Bolt Limited
Cambourne Business Park Limited
Cambourne Business Park Management Limited
Cathedral (Brighton) Limited
Cathedral (Bromley 2) Limited
Cathedral (Bromley Esco) Limited
Cathedral (Bromley) Limited
Cathedral (Goswell) Limited
Cathedral (Greenwich Beach) Limited
Cathedral (Moss) Limited
Cathedral (Preston Barracks) Limited
Cathedral (Sittingbourne) Limited
Cathedral Special Projects (H) Limited
Central Research Laboratory (Hayes) Ltd
D S Property Developments Limited
Development Securities (Abbey Wood) Limited
Development Securities (Armagh) Limited
Development Securities (Blackpool Developments) Limited
Development Securities (Cannock) Limited
Development Securities (Curzon Park) Limited
Development Securities (Furlong) Limited
Development Securities (Greenwich Beach) Limited
Development Securities (Greenwich) Limited
Development Securities (Hale Barns) Limited
Development Securities (Hammersmith) Limited
Development Securities (HDD) Limited
Development Securities (Ilford) Limited
Development Securities (Investment Ventures) Limited
Development Securities (Investments) PLC
Development Securities (Launceston) Limited
Development Securities (Lichﬁeld) Limited
Development Securities (Maidstone) Limited
Development Securities (Moreton Woods) Limited
Development Securities (Nailsea) Limited
Development Securities (No.1) Limited
Development Securities (No.9) Limited
Development Securities (No.19) Limited
Development Securities (No. 22) Limited
Development Securities (No.26) Limited
Development Securities (No.28) Limited
Development Securities (No.43) Limited
Development Securities (No.69) Limited
Development Securities (Romford) Limited
Development Securities (Sevenoaks) Limited

223  |  U and I Group PLC
Annual Report & Accounts 2019

Development Securities (Slough) Limited
Development Securities (Woking) Limited
Development Securities Estates PLC
Development Securities Limited
DS Investment Properties 2 LLP
DS Investment Properties LLP
DS Renewables LLP
ECC Investments PLC
Elystan Developments Limited
EPD Buckshaw Village Limited
Executive Communication Centres (Birmingham) Limited
Executive Communication Centres (Cardiff) Limited
Executive Communication Centres (Milton Keynes) Limited
Executive Communication Centres Limited
Extreme Cool Limited
Furlong Shopping Centre Limited
Future High Streets (North Finchley) Limited
Future High Streets Limited
Greenwitch Limited
Griffe Grange Wind Farm Limited
Group U+I Limited
HDD Ashford Limited
HDD Burghﬁeld Common Limited
HDD Didcot Limited
HDD Lawley Village Limited
HDD Lichﬁeld Limited
HDD Llanelli Limited
HDD Newcastle Under Lyme Limited
HDD Newton Leys Limited
HDD Oxley Units Limited
HDD RAF Watton Limited
HDD Stanground Limited
Hendy Wind Farm Limited
I AM PRS Limited
Kingsland Shopping Centre Limited
Landpack Limited
Luneside East Limited
Njord Wind Developments Limited
Plus X (Hayes) Limited
Public Private Partnership (H) Limited
R.D.B.P. Management Limited
RHD (Dartmouth) Limited
Rhoscrowther Wind Farm Limited
Rivella Properties Bicester Limited
Romford Management Company Limited
The Deptford Project 2 Limited
The Deptford Project Limited
The Telegraph Works Limited
Triangle Developments Limited
Triangle London Limited
U and I (8AE) Limited
U and I (Ashford) Limited
U and I (Bromley Commercial) Limited
U and I (Pincents Lane) Limited
U and I (Projects) Limited
U and I Finance PLC

 
 
 
NOTES TO THE COMPANY FINANCIAL STATEMENTS
CONTINUED

41 Details of related undertakings of U and I Group PLC continued 

Wholly-owned subsidiaries
U and I Investments (UK) Limited
U and I PPP Limited
U and I Property Limited
U and I Property Limited

United + Industrious Limited
Wallis Court Buckshaw Limited
Wassand Wind Farm Limited
Waterfront Wakeﬁeld (Hebble Wharf) Limited

Entities where the Group holds 100% of the equity but the registered ofﬁce is held elsewhere are detailed below:

Registered ofﬁce
6th Floor, 2 Grand Canal Square, Dublin 2, Ireland

2 Maritime House, The Hart, Farnham, Surrey, GU9 7HW, 
United Kingdom 
Fifth Floor, 37 Esplanade, St Helier, JE1 2TR, Jersey

Fisher Partners, Acre House, 11-15 William Road, London, 
NW1 3ER, United Kingdom
Prins Bernhardplein 200, 1097JB, Amsterdam, Netherlands

Company
Development Securities Properties (Dublin) Limited 
Percy Place DS (Ireland) Limited
Heart of Slough Management Company Limited
Brook House (Fleet) Management Limited

DS Jersey (Manchester 1) Limited
DS Jersey Corporate Services Limited
DS Jersey (Notting Hill) Limited
Drake Bideford Limited
DS Jersey (Capital Partners) Ltd
DS Jersey (Renewables) Limited
Nailsea Unit Trust
DS Cardiff Unit Trust
DS Jersey (No 1) Limited
DS Jersey (No 2) Limited
DS Jersey (No 3) Limited
DS Jersey (No 4) Limited
DS Jersey (No 5) Limited
DS Jersey (No 7) Limited
DS Jersey (No 10) Limited
DS Jersey Retail Limited
DS Noble (Jersey) Limited
STRD Holding Company
Development Securities (No.18) Limited

Development Securities Netherlands B.V.

Other subsidiaries, joint arrangements and other signiﬁcant holdings, incorporated in the United Kingdom, where the registered 
ofﬁce is 7A Howick Place, London, SW1P 1DZ:

Registered ofﬁce
Cathedral (Movement, Greenwich) LLP
Circus Street Developments Limited
CTP (Wakeﬁeld) Limited
Curzon Park Limited
Deadhare Limited
DSP Tirol Limited
Harwell Oxford Developments (GP) Limited
Harwell Oxford Developments Limited
Harwell Oxford Management Limited
HSIC GP1 Limited
HSIC GP2 Limited
Inhoco 1079 Limited
Inhoco 3300 Limited
Kensington & Edinburgh Estates (South Woodham Ferrers) Limited
Kensington (NC) Management Company Limited
Manchester Arena Complex LP
Mayﬁeld Development (General Partner) Limited
Mayﬁeld Development Partnership LP
MEN Arena GP Limited
Minevote Public Limited Company

224  |  U and I Group PLC
Annual Report & Accounts 2019

% owned
50
50
42
50
94.34
50
50
50
50
50
50
42
42
50
42
30
50
50
51
50

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Registered ofﬁce
Northpoint (No.4) Limited
Northpoint Ch Limited
Northpoint Developments (No 1) Ltd
Northpoint Developments (No 2) Ltd
Northpoint Developments (No 50) Ltd
Northpoint Developments (No 51) Ltd
Northpoint Developments (No 52) Ltd
Northpoint Developments (No 53) Ltd
Northpoint Developments Ltd
Northpoint Investments Ltd
Northpoint Kc Limited
Northpoint SK Limited
Opportunities for Sittingbourne Limited
Orion Shepherds Bush (Market) Limited
Orion Shepherds Bush (No.2) Limited
Orion Shepherds Bush (No.3) Limited
Orion Shepherds Bush (Number 42 Goldhawk Road) Limited
Orion Shepherds Bush Limited
OSB (Holdco 1) Limited
OSB (Holdco 2) Limited
Plus X Holdings Limited
Purplexed LLP
Spectre (Hayes) Limited
Spirit of Sittingbourne LLP
St Paul’s Place Management Company Limited
Tarmac Clayform Limited
The Harwell Quad One Limited
The Harwell Science and Innovation Campus General Partner Limited
The Harwell Science and Innovation Campus Limited Partnership
The Harwell Science and Innovation Campus Nominee Limited
The Harwell Science and Innovation Campus Nominee No.2 Limited
TLD (Landmark Court) Limited
Tower Wharf Estate Management Limited
Triangle London Developments LLP
UAIH Yorkshire
Waterfront Wakeﬁeld (Navigation Place) Limited
Waterfront Wakeﬁeld Management Limited

% owned
42
42
42
42
42
42
42
42
42
42
42
42
50
50
50
50
50
50
50
50
50
94.34
50
65
42
50
50
25
25
25
25
99
42
50
50
42
42

Other subsidiaries, joint arrangements and other signiﬁcant holdings, incorporated in the United Kingdom, where the registered 
ofﬁce is elsewhere:

Registered ofﬁce
Nelson House, Central Boulevard, Blythe Valley Park, Solihull, 
West Midlands, B90 8BG, England
Postbus 990, 1000AZ, Amsterdam, Netherlands
Bruce Kenrick House, 2 Killick Street, London, N1 9FL

Company
The Harwell Science and Innovation Campus 
Limited Partnership
DSP Investments Piano B.V.
TLD Kidbrooke LLP

% owned

25
34
1

225  |  U and I Group PLC
Annual Report & Accounts 2019

 
 
 
FINANCIAL CALENDAR AND ADVISORS

Annual General Meeting
4 September 2019
Payment of Ordinary 
dividend
6 September 2019
Announcement of 
Interim Results to 
30 September 2019
November 2019

Company Secretary
C Barton ACIS

Registered ofﬁce
7A Howick Place
London SW1P 1DZ
Telephone: 
+44 (0)20 7828 4777

Website address
www.uandiplc.com

Registered number
1528784

Incorporation
U and I Group PLC is 
incorporated in Great Britain 
and registered in England 
and Wales

Auditors
PricewaterhouseCoopers LLP
Chartered Accountants and 
Statutory Auditors

Principal bankers
Aviva Commercial 
Finance Limited
Barclays Bank PLC
Santander Group
The Royal Bank of 
Scotland plc

Corporate solicitors
Linklaters LLP

Financial advisors
Rothschild

Corporate stockbrokers
Peel Hunt LLP
Liberum Capital Limited

Registrars and transfer 
ofﬁce
Link Asset Services
34 Beckenham Road
Beckenham
Kent
BR3 4TU

By phone 
UK – 0871 664 0300,  
from overseas call  
+44 (0) 371 664 0300  
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 09:00–17:30, 
Monday to Friday excluding 
public holidays in England 
and Wales

By email 
enquiries@linkgroup.co.uk

226  |  U and I Group PLC
Annual Report & Accounts 2019

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