WYNNSTAY PROPERTIES PLC
Registered number: 00022473
ANNUAL REPORT
and
FINANCIAL STATEMENTS
YEAR ENDED 25 MARCH 2023
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Registrar’s Customer Support Centre and Scam Warning
Directors and Advisers
Summary of Property Portfolio
Introduction to Wynnstay
Chairman’s Statement
Managing Director’s Review
Strategic Report
Chairman’s Corporate Governance Statement
Corporate Governance, Audit and Remuneration Reports
Directors’ Report
Independent Auditor’s Report
Statement of Comprehensive Income
Statement of Financial Position
Statement of Cash Flows
Statement of Changes in Equity
Notes to the Financial Statements
Five Year Financial Review
Notice of Annual General Meeting
Biographies of the Directors
1
WYNNSTAY PROPERTIES PLC
REGISTRAR’S CUSTOMER SUPPORT CENTRE
Shareholders can contact our Registrars, Link Group, through their Customer Support Centre which is available
to answer any queries in relation to individual shareholdings:
By phone: UK – 0371 664 0300
Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom
will be charged at the applicable international rate. Lines are open between 09:00 - 17:30, Monday to Friday
excluding public holidays in England and Wales.
By email: shareholderenquiries@linkgroup.co.uk
By post: Link Group, 10th Floor, Central Square, 29 Wellington Street, Leeds LS1 4DL.
WARNING: UNSOLICITED APPROACHES FOR SHARES
BOILER ROOM SCAMS
According to reports, these scams continue to increase in number, sophistication of approach and apparent
credibility.
“Boiler Room Scams” involve unsolicited phone calls, emails or correspondence, commonly concerning
investments and often mentioning the names of individual companies like Wynnstay. Typically, the scammers
will claim to be “brokers”, “investment banks” or “law firms” representing a party with a holding that wishes to
make a takeover offer and to buy shares at prices much higher than market prices.
If the recipient engages, this usually leads to a request for shareholders to provide personal financial information,
including bank details, or to pay money for documents or worthless securities. These approaches generally come
from organisations based overseas or using false UK addresses or phone numbers routed from abroad. Even if a
caller or communication may sound or appear credible, the purpose is usually fraudulent: to obtain either personal
information or money, or both. Approaches can be persistent and persuasive unless they are immediately declined.
Shareholders should continue to be vigilant about any such approaches. There is nothing that Wynnstay can
do to deter or stop them, or the use by callers of our name or details of shareholdings. On Wynnstay’s website
(www.wynnstayproperties.co.uk), shareholders will also find a warning and a link to other information about
unsolicited
the Financial Conduct Authority’s website
regarding
(https://www.fca.org.uk/scamsmart).
shares on
approaches
2
WYNNSTAY PROPERTIES PLC
(Company incorporated in the United Kingdom)
DIRECTORS
P.G.H. COLLINS C.B.E.
(Non-Executive Chairman)
C.P. WILLIAMS M.R.I.C.S.
(Managing Director)
H. M. FORD
(Non-Executive Director)
R. P. OWEN F.R.I.C.S.
(Non-Executive Director)
P. MATHER F.R.I.C.S.
(Non-Executive Director)
C. M. TOLHURST M.R.I.C.S., C.G.P.
(Non-Executive Director and Senior Independent Director)
REGISTERED OFFICE
Hamilton House, Mabledon Place, London WC1H 9BB
AUDITORS
CLA EVELYN PARTNERS LIMITED
Cumberland House, 15-17 Cumberland Place, Southampton, SO15 2BG
SOLICITORS
FIELDFISHER LLP
Riverbank House, 2 Swan Lane, London EC4R 3TT
NOMINATED ADVISER & BROKER
W H IRELAND LIMITED
24 Martin Lane, London EC4R 0DR
VALUERS
BNP PARIBAS REAL ESTATE ADVISORY &
PROPERTY MANAGEMENT UK LIMITED
5 Aldermanbury Square, London EC2V 7BP
REGISTRARS
LINK GROUP
65 Gresham Street, London EC2V 7NQ
BANKERS
C. HOARE & CO.
37 Fleet Street, London EC4P 4DQ
HANDELSBANKEN PLC
5 Welbeck Street, London W1G 9YQ
3
WYNNSTAY PROPERTIES PLC
SUMMARY OF PROPERTY PORTFOLIO AT
25 MARCH 2023
Aldershot
Eastern Road
1 Industrial Unit
Aylesford
Quarry Wood Industrial Estate
19 Industrial Units
Cosham
High Street
Offices
Hailsham
Crown Close Industrial Estate
7 Industrial Units
Heathfield
Station Road
5 Industrial Units
Hertford
Ipswich
Lewes
Hertingfordbury Road
1 Industrial Unit
Trinity Street
Brooks Road
5 Industrial Units
2 Industrial Units
Lichfield
1-4 Prospect Drive
4 Industrial Units
Liphook
Liphook
Midhurst
Norwich
Beaver Industrial Estate
DRAFT
17 Industrial Units
Beaver Industrial Estate
Development Land
North Street
1 Retail Unit
City Trading Estate
6 Industrial Units
Petersfield
Petersfield Business Park
6 Industrial Units
Petersfield
Petersfield Trade Park
3 Industrial Units
Uckfield
Bell Lane
4 Industrial Units
Weston-super-Mare
Phillips Road
1 Retail Warehouse Unit
Industrial Units includes Trade Counters. All properties are Freehold.
4
WYNNSTAY PROPERTIES PLC
INTRODUCTION TO WYNNSTAY
A distinctive approach to commercial property investment primarily for private investors
Wynnstay is an AIM listed property investment and development business. Its principal shareholders are private
investors wishing to invest in a portfolio of good quality secondary commercial properties for medium to long-term
capital and income growth. The portfolio is currently focused on industrial, including trade counter, units.
Strategy
Wynnstay aims to achieve capital appreciation and generate rising dividend income for shareholders from a diversified
and resilient commercial property portfolio in Central and Southern England, with diversity and resilience being
reflected in the location, number and nature of the properties, and the mix of lease terms, tenants and uses.
For location, the focus is on areas where there is strong occupational demand. While many tenants have been in
occupation for a considerable time, where a tenant leaves, voids can be managed and re-lettings can be achieved.
The majority of properties are multi-let, resulting in a number of individual tenancies in most locations, reducing
exposure to any single tenant and risk of loss of rental income in the case of defaults and voids.
Leases are mainly for terms of five years or more with relatively few short-term agreements (two years or less), and
usually with upward only rent reviews based on market rates. Flexibility in addressing tenant needs and requirements
generally mean that the terms agreed result in a mutually beneficial outcome for both parties.
Tenants comprise a broad spread of occupiers, also reducing risk exposure: national and local government,
international businesses, national trading chains and regional and local businesses. Uses include manufacturing and
services; storage and distribution; and trade counter and out-of-town retail.
Active direct management and close engagement and constructive business relationships with tenants, together with
DRAFT
refurbishment and selective development over time, underpin capital value and increase income.
Managed for shareholders
The portfolio is directly, rather than externally, managed. Finance and administrative operations are largely
outsourced to external providers to meet specific needs. All report to the Board, the majority of whom are non-
executive directors.
Management remuneration comprises salary and, where appropriate, a cash bonus. Wynnstay does not offer incentive
schemes, such as share plans, share options or share bonuses.
As a result, both management and the Board are focused on Wynnstay’s performance for the benefit of shareholders,
operational costs are closely controlled and dilution of shareholders’ investment and potential conflicts of interest are
minimised.
Incremental growth
The portfolio has been built incrementally, with opportunities being taken to dispose of assets as and when the time
is appropriate and to reinvest in assets that offer better long-term returns.
This is achieved gradually over time, without the need for deal-driven activity in pursuit of corporate or portfolio
expansion.
Funding
Wynnstay adopts a prudent, pragmatic approach to funding. Investments are funded in part by retained profits and
recycling capital receipts from disposals and in part from borrowings, the majority at a fixed rate and held at a modest
loan-to-value level, from an experienced and supportive property lender. This provides security at times of uncertainty
in debt markets.
5
WYNNSTAY PROPERTIES PLC
INTRODUCTION TO WYNNSTAY (CONTINUED)
Valuation
Properties are valued on a cautious basis, based upon professional advice from expert external valuers, recognising
that commercial property is a cyclical market that can exhibit significant upward and downward movements over time
and that steadiness and progression are most likely to be in shareholders’ interests.
Wynnstay on AIM
Wynnstay’s shares were quoted on its AIM introduction in 1995 at a mid-market price of 150p. On the day prior to
the approval of this report, the mid-market price was 675p, an increase of 350%. The dividend paid in 1995 was 4p
per share. The dividend paid and proposed for the current year will be 24p per share, an increase of 500%.
Performance
Wynnstay’s distinctive approach has delivered on its strategy over both the medium and long term. Shareholders have
benefitted from substantial increases in net asset value per share and dividends as the portfolio and its management
have delivered strong results.
Corporate Performance over 5 years
Year Ended 25 March
Net Asset Value per share
Five Year Net Asset Value Growth
Dividends per share, paid and proposed
Five Year Dividend Growth
Portfolio Performance
Year ended 25 March
Property Income
37.5%
26.3%
DRAFT
Rental Income
Underlying† 5 Year Rental Income Growth
Portfolio Value
Underlying† 5 Year Portfolio Value Growth
25.5%
31.2%
Loan-to-value ratio
Gearing ratio
Occupancy at year-end
Rent Collection for year
Operating Costs/Income
Operating Costs/Portfolio Value
Weighted average unexpired lease term:
2023
pence
2022
pence
2021
pence
2020
pence
2019
pence
1,110p
1,090p
911p
792p
807p
24.0p
22.5p
21.0p
15.0p
19.0p
2023
£’000
2022
£’000
2,312*
2,308
2,252
2021
£’000
2,438
2,140
2020
£’000
2,271
2,271
2,304
2,179
39,320
37,220
%
25.3%
38,975
34,005
34,260
%
25.5%
%
29.4%
%
36.5%
2019
£’000
2,216
2,216
1,730
35,095
28,365
%
35.6%
22.3%
21.8%
32.4%
52.2%
52.7%
100%
100%♦
31.1%♠
1.8%♠
100%
100%
32.0%
1.9%
99%
99%►
34.8%
2.5%
94%
100%
30.3%
2.0%
100%
100%
28.2%
1.8%
years
years
years
years
years
-
-
to lease break
to lease expiry
3.1
4.4
Includes £8,000 of Other Property Income. See note 2 of the Financial Statements.
3.0
4.4
2.8
4.5
3.6
4.8
2.8
4.2
*
† Underlying Rental Income and Portfolio Value are for properties that have been held in the portfolio throughout the five year period. As a
result, a property purchased in September 2019 with Rental Income of £111,000 and valuation of £1,840,000 and properties sold in the period
with an aggregate Rental Income of £351,000 and an aggregate valuation of £5,920,000 have been excluded.
► Excludes rent concessions of £29,000 granted to tenants as a result of the Covid-19 pandemic.
♦ Aer rounding for £8,000 bad debt (0.3%).
♠ Excludes £81,000 of non-recurring costs incurred in 2023 relating to new Board appointments.
6
WYNNSTAY PROPERTIES PLC
INTRODUCTION TO WYNNSTAY (CONTINUED)
Share Price Performance
Although Wynnstay is quoted on AIM, and therefore is not a constituent of the FTSE 350 Real Estate Investment
Trusts Index, the index contains a good cross-section of quoted property companies of various forms, all much larger
than Wynnstay. Wynnstay’s share price relative to the FTSE 350 Real Estate Investment Trusts Index is shown in the
chart below. Wynnstay’s share price has substantially outperformed the index over the ten-year period.
Wynnstay Properties PLC share price relative to FTSE 350 Real Estate
Investment Trusts Index:
March 2013-March 2023
800
700
600
500
400
300
200
100
0
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
Rebased FTSE 350 Real Estate Investment Trust Index
DRAFT
Wynnstay Properties PLC
7
WYNNSTAY PROPERTIES PLC
CHAIRMAN’S STATEMENT
Against the background of considerable economic and political uncertainty, which has affected the financial and
property markets as well as the personal finances of all of us, I am pleased to report on another successful year for
Wynnstay and its shareholders.
Last year’s report introduced a new section, entitled Introduction to Wynnstay. This described Wynnstay’s distinctive
approach to commercial property investment primarily for private shareholders and provided information both on the
Company’s performance and its share price performance over time. The section has been retained and updated in this
report and continues to highlight Wynnstay’s continued strength over time across a range of measures. I encourage
all shareholders to read it.
The past year has also been significant for Wynnstay as we have planned and been preparing for succession on the
Board, including the appointment of two new Non-executive Directors and the appointment of a new Managing
Director to succeed Paul Williams. I will report further on these appointments later in this statement.
Returning to the past year, Wynnstay’s financial performance is summarised in the following overview table.
Overview of financial performance
• Rental Income
Annual*
Underlying*
Change
2023
2022
2.3%
10.4%
£2,304,000
£2,304,000
£2,252,000
£2,087,000
• Net Property Income **
(4.6)%
£1,497,000
£1,569,000
• Operating Income
(75.7)%
£1,842,000
£7,581,000
DRAFT
• Income before Taxation
(80.1)%
£1,430,000
£7,202,000
• Earnings per share (weighted average)
• Dividends per share, paid and proposed
• Net asset value per share
• Loan to value ratio
• Gearing ratio
(78.9)%
6.7%
2.0%
42.2p
24.0p
1,110p
25.3%
22.3%
199.8p
22.5p
1,090p
25.5%
21.8%
* Annual Rental Income is shown in note 2 of the Financial Statements and Underlying Rental Income is the like-for-like income from properties held
in the portfolio throughout both years and thus excludes rental income in 2022 of £165,000 from the Surbiton property sold in February 2022.
** Excludes £81,000 of non-recurring costs incurred in 2023 relating to new Board appointments.
An innovation in this Annual Report is that our Managing Director, Paul Williams, has prepared a separate review of
the management activity within the portfolio during the year, including some market context for this activity, the
revaluation and the financial results. His review, which follows this statement, also gives a retrospective review of
the evolution of the portfolio over his time at Wynnstay. He also comments on the important focus given over the
past two years to improving the energy efficiency of our properties.
Portfolio and Valuation
There were no changes in the portfolio in the year. We continued actively to identify and pursue suitable additions to
the portfolio. Opportunities at acceptable prices proved difficult for most of the year and we considered that it was
prudent to retain cash until conditions for acquisitions improved. Late in the year negotiations commenced for the
£2.5m acquisition of Riverdale Industrial Estate, Tonbridge and the transaction was eventually completed after the
year-end. Further details are contained in the Managing Director’s Review.
8
WYNNSTAY PROPERTIES PLC
CHAIRMAN’S STATEMENT (CONTINUED)
Whilst annual rental income increased by 2.3% to £2,304,000 compared to the prior year (2022: £2,252,000), the
underlying rental income on a like-for-like basis, excluding the Surbiton property sold late in the prior year, increased
by 10.4% to £2,304,000 (2022: £2,087,000). This significant increase in income reflects the benefits of the active
management of the portfolio described in the Managing Director’s Review.
Our Independent Valuers, BNP Paribas Real Estate, undertook the annual revaluation as at 25 March 2023 valuing the
Company’s portfolio at £39,320,000. This represents a 0.9% increase of £345,000 on the valuation as at 25 March 2022
and again reflects the benefits of the active management of the portfolio.
Although the increase in the valuation this year (0.9%) is modest compared to last year (2022: 23.7%), it should be
recalled that last year’s impressive increase reflected conditions in late 2021 and early 2022 and it was self evident
that the market was likely to turn - as was indeed the case in the third and fourth quarters of 2022. This reversal
resulted in significant valuation reductions in the commercial property sector, including for other quoted property
companies with industrial portfolios. The reductions followed changes in the market after March 2022 as successive
significant rate increases, rising inflation and economic uncertainty impacted yields. So it is worth reflecting on some
reasons why the Wynnstay portfolio has performed well compared to some others.
Wynnstay’s portfolio stands apart from other quoted property companies with industrial portfolios in that our assets
are located in areas where there is robust occupational demand and limited supply, where modest rents generally
provide opportunity for further rental growth over time as rent reviews arise and new lettings are achieved. The
relatively small lot sizes of our assets also appeal, when marketed for sale, to a wide range of private investors.
The nature of the property valuation process means that there will always be a range within which the valuers work
to reach a final valuation figure. Wynnstay has always valued its portfolio on a cautious basis based on professional
advice from expert external valuers, recognising that commercial property is a cyclical market that can exhibit
significant upward and downward movements over time and that steadiness and progression are most likely to be in
shareholders’ interests.
DRAFT
While this year the yields used by our valuers in determining the investment value of the assets generally moved out
by between 0.25% and 0.5%, and in one case by 1%, the valuation benefitted overall from the management activity
described in the Managing Director’s Review which delivered increases in rental income and these increases, together
with other market data, underpinned the estimated rental values used in the valuation.
The annual valuation is undertaken under accounting standards for use in our financial statements in accordance with
RICS Global Standards and values each property as a separate asset on the basis of a sale of that property in the open
market. Therefore, the valuation does not take account of any additional value that might be realised if the portfolio
were to be offered on the open market or any other special factors that may be relevant in the case of individual
potential purchasers, such as sales to other property investors, existing tenants or adjoining owners.
Income (Profit) and Costs
Income (Profit) for the year is shown in the Statement of Comprehensive Income.
Net Property Income, before the fair value adjustment of investment properties, property sales and taxation, for the
year was £1,497,000 (2022: £1,569,000).
Operating Income after the fair value adjustment and property sales before taxation fell to £1,842,000 (2022:
£7,581,000) principally as a result of the fact that no assets were sold in the year to generate profits on disposal and
the valuation surplus for the year of £345,000 was much lower that the exceptional increase in the prior year (2022:
£5,887,000).
The combined result is Income before Taxation for the year of £1,430,000 (2022: £7,202,000).
We continue our policy of exercising tight control over administrative costs. Non-recurring costs of £81,000 were
incurred on succession matters, described further below. Property costs were lower than in the prior year at £96,000
(2022: £125,000) as no significant void or refurbishment costs were incurred.
9
WYNNSTAY PROPERTIES PLC
CHAIRMAN’S STATEMENT (CONTINUED)
Finance, Borrowings and Gearing
Wynnstay remains in a strong financial position.
At the year-end, we held cash of £3.3 million (2022: £3.5 million), our core borrowing was unchanged at £10.0 million
(2022: £10.0 million) and our interest rate is fixed at 3.61% until December 2026. Net gearing was 22.3% (2022:
21.8%). In addition to our available cash balance and positive cash flow from our property activities, our £5m
revolving credit facility remained undrawn.
As already mentioned above, since the year-end we have invested £2.5m of our year-end cash resources on the
acquisition in Tonbridge described in the Managing Director’s Review.
Dividend
Over recent years we have sought to pursue a progressive dividend policy that aims to provide shareholders with a
rising income commensurate with Wynnstay’s underlying growth and finances.
In the light of the satisfactory results for the year, the Board recommends a final dividend of 15.0p per share (2022:
14.0p). An interim dividend of 9.0p per share (2022: 8.5p) was paid in December 2022. Hence, the total dividend for this
year of 24.0p per share (2022: 22.5p) represents an increase of 6.7% on the prior year.
Over the past five years, dividends have increased by 26.3% from 19.0p to 24.0p.
Subject to shareholder approval, the final dividend will be paid on 26 July 2023 to shareholders on the register at the close
of business on 30 June 2023.
Board Succession
In the course of reviewing the composition of the Board and succession planning, Charles Delevingne expressed his
DRAFT
wish to retire from the Board. Accordingly, we appointed a firm specialising in non-executive appointments to identify
suitable candidates. Our external recruitment process attracted keen interest from a good range of qualified candidates
and, in March 2023, we announced the appointment of two new Non-executive Directors, Hugh Ford and Ross Owen.
Hugh is a solicitor who has practiced in a major city firm and in industry, latterly in a major listed property company.
Ross is a chartered surveyor with extensive commercial property investment management experience both as a partner
in private practice and as a consultant and adviser. Further information on their careers is provided in the biographies
at the end of this report. Their complementary backgrounds, experience and skills in business and commercial
property will bring fresh insight and perspective to our Board deliberations on the evolution of Wynnstay’s portfolio
and the Company’s future direction.
I am sure that I speak on behalf of all shareholders in thanking Charles Delevingne for his contribution to Wynnstay’s
success over the past twenty years during which his wisdom and guidance have been invaluable in implementing the
major changes we have made to the portfolio which have underpinned delivery of our successful results for
shareholders.
Management Succession
Paul Williams was appointed as Managing Director in 2006 and, having reached normal retirement age late last year,
he indicated his wish to stand down when a suitable successor had been identified. Accordingly, we appointed a firm
specialising in senior recruitment in the commercial property sector to carry out a search and announced a few weeks
ago the appointment of Christopher Betts as Paul’s successor. He will join Wynnstay next month as Managing
Director designate and will join the Board, following a short handover period, later this summer.
During Paul’s tenure as Managing Director the Company’s portfolio has been transformed, as he reflects in his review
below. When he was appointed, the portfolio comprised, in the main, small single-tenanted assets with a mix of
industrial, office and retail uses. Under his leadership, Wynnstay has concentrated its investments into larger, multi-
let, assets predominantly in the industrial, including trade-counter, sector. He has focused acquisitions on higher
quality assets let to tenants with better covenants as well as identifying sites suitable for development adjacent to
existing assets and planning small-scale developments that enhance the value of those assets.
10
WYNNSTAY PROPERTIES PLC
CHAIRMAN’S STATEMENT (CONTINUED)
In managing the portfolio to bring about this transformation, Paul has displayed the benefit of his wide experience in
commercial property and his personal skills in dealing with people and the issues and challenges that arise, some in
the ordinary course and others in unusual circumstances. He has built strong relationships with many of our tenants
that has been invaluable in understanding their needs and maintaining them as longstanding occupiers and ensuring
that they respect their lease obligations to us.
These strong relationships combined with Paul’s patience and tenacity have resulted in few bad debts and few voids
in the portfolio over his seventeen years at Wynnstay. Where tenants have faced difficulties, he has been sympathetic
in dealing with them unless, of course, he was dealing with those who might wish to avoid their obligations through
their own business failings.
Wynnstay’s scale and structure in which the Managing Director is the only full-time employee mean that Paul has
had to turn his hand to many different tasks and challenges, including several office moves and technological changes
as the Company adapted to new ways of operating, including the sudden change to virtual working as a result of
Covid-19.
On behalf of shareholders, I thank Paul for his significant contribution to the Company’s evolution over this period
and wish him a long and happy retirement.
Our Managing Director designate, Christopher Betts, has been a Chartered Surveyor for over 30 years. After
graduating from Oxford Brookes University with a BSc in Estate Management, he joined Cluttons as a graduate
trainee where he spent his first ten years in professional practice.
Subsequently, he has worked for various commercial property businesses including British Land, Frogmore and
Romulus. Latterly he has been advising on and implementing a strategy and management programme at Peabody
Trust for their London and South-East corporate office portfolio following significant recent mergers with other social
housing providers.
DRAFT
Shareholder Matters
In my statement last year, I reported on the Board’s review of the liquidity and marketability of Wynnstay shares and
on the actions being taken as a result.
You will recall that Wynnstay has a small, and rather unusual, share register on which there are under 250 accounts,
a significant number of which are connected through family relationships, with private investors rather than funds or
institutions as shareholders. In the main, they are long-term investors with some holdings having passed from
generation to generation since the company was founded in 1886. These long-term investors provide stability and
continuity within the shareholder base. As a result of this base the volume and proportion of Wynnstay shares traded
in the market is less than for many quoted companies with larger share registers and more dispersed holdings. Fewer
Wynnstay shares tend to be available to trade and then only usually in modest quantities and with a sizeable “spread”
between the bid and offer price. Shares are typically traded at a significant discount to the net asset value per share.
However, both these features are also seen in other, much larger, quoted property companies.
Among the actions we decided to take was the provision of further succinct information on Wynnstay, its business
and performance and to demonstrate Wynnstay has performed well for its investors, both against its objectives and
relative to other quoted property companies, in the medium to long-term. The information provided last year has been
updated and is contained in the Introduction to Wynnstay at the beginning of this report on pages 5 to 7. The Company
specific information demonstrates, in the Board’s view, the benefits of Wynnstay’s distinctive approach and the share
price comparison shows that Wynnstay’s share price has continued substantially to outperform the comparative real
estate sector.
Share prices in the sector were buoyant during the first half of the last calendar year, but then declined substantially
as concerns about the economy, inflation and interest rates affected both valuations and market sentiment towards the
sector. While Wynnstay’s share price has not been immune from this decline, the impact on Wynnstay has been
significantly less than on the sector as a whole. The chart on page 7 shows that over the past ten years, while
Wynnstay’s share price has more than doubled, the performance of the comparative real estate sector has remained
flat.
11
WYNNSTAY PROPERTIES PLC
CHAIRMAN’S STATEMENT (CONTINUED)
We also decided to ask shareholders to give Wynnstay authority to purchase its own shares so that the Company can
act as a purchaser in the market where it is appropriate, and in the interests of shareholders generally, to do so. Other
quoted property and investment companies, as well as other quoted companies, use share buybacks on a routine basis
to enhance earnings and net asset value per share. Where shares are bought back dividends cease to be payable, thus
conserving cash in the business and benefitting continuing shareholders and with the present intention being to hold
any shares bought back in treasury so that they are available for reissue where there is market demand for shares or
to facilitate individual property acquisitions.
Shareholders granted this authority at the Annual General Meeting in July 2022. The volume of shares traded since
then has been relatively small and the market has generally been able to absorb most of the shares offered. However,
the authority was used to acquire 15,000 Ordinary Shares at 710p in September 2022. The Board keeps the position
under review and may exercise the authority when shares are available in the market and it is in the interests of
shareholders generally to do so.
We also considered that Wynnstay’s future development would be assisted if authority continued to be granted by
shareholders, as has been the case for many years, to issue a limited number of shares without first offering them to
existing shareholders. This gives Wynnstay flexibility, for instance, to issue shares for small fundraisings which might
support a larger acquisition and allow the issue of shares as part consideration on individual property acquisitions to
vendors, where the vendors wish to retain in interest in a broader portfolio of assets in a quoted company. Bringing
in new investors with an interest in commercial property and in Wynnstay’s distinctive approach to the share register
would broaden the shareholder base and support its future development.
Outlook
At this time last year, I noted that the UK had entered a further period of uncertainty, following Brexit and the Covid
pandemic, as a result of the effects of the Russian invasion of Ukraine and of rising inflation imposing real pressure
on business costs and household incomes with consequent potential impacts on the economy.
DRAFT
This uncertainty continued throughout the year, not least as a result of the several changes of administration in
government. Inflation reached levels not seen for forty years, with a major contributor being huge increases in energy
prices which have affected both businesses and consumers although government measures have provided some relief.
However, recent economic news has been more positive than might have been expected last autumn, when a long
economic recession was forecast and inflation was continuing to rise.
Despite these conditions, Wynnstay remains in a very healthy position. We have a focused, stable and well-let
portfolio which has been enhanced through acquisitions and disposals over the years. It is delivering, and is capable
of continuing to deliver, growth of capital and income for shareholders in the medium and long-term. The main risks
to continued growth are economic and political, such as significant disruption caused by events beyond our control
or the UK economy suffering a significant downturn which affects the ability or willingness of businesses to invest
or of consumers to spend.
The commercial property market is cyclical. Asset values can move up and down over time as a result, as we have
seen over the past several years. Wynnstay has always adopted a cautious and realistic approach in valuing our assets
and to the management and development of the business. As noted above, our annual revaluation is undertaken for
accounting purposes and values our individual assets, not the portfolio as a whole.
Within the Wynnstay portfolio, the first few months of this financial year have been encouraging in terms of rental
growth as the update in the Managing Director’s Review describes. Accordingly, despite the broader uncertainties in
the economy and elsewhere, the Board is optimistic about the current outlook for Wynnstay’s business.
Colleagues and Advisers
Our Managing Director, Paul Williams, and our finance and company secretarial colleagues have continued to work
effectively to deliver for shareholders. I would like to thank them, as well as my colleagues on the Board and our
professional advisers, for their support over the year.
This support has been especially evident over the past year in addressing Board succession, and also in the prior year
when we changed both our auditors and our nominated advisers and corporate brokers.
12
WYNNSTAY PROPERTIES PLC
CHAIRMAN’S STATEMENT (CONTINUED)
Shareholding Enquiries
From time to time we receive enquiries from shareholders with questions about their shareholdings or about buying
or selling Wynnstay shares or transferring them, typically to relatives.
All enquiries about shareholdings, including changes of address and bank details and about such transfers of shares,
should be directed to our Registrars, Link Group, whose details are on page 2.
As regards buying or selling shares, this can be carried out by registering the holding online with our Registrars, Link
Group, via their secure share portal www.signalshares.com, which also enables shareholdings to be managed quickly
and easily. Shares can, of course, also be bought and sold in the usual way through a stockbroker or an online platform.
Annual General Meeting
The AGM provides an important and valued opportunity for the Board to engage with shareholders.
Our AGM this year will be held at 2.30pm on Tuesday 18 July 2023 at the Royal Automobile Club, 89 Pall Mall, London
SW1Y 5HS. The Notice of Meeting is to be found at the end of this Annual Report.
I urge all shareholders to complete and return their proxy forms so that their votes on the resolutions being put to the
meeting can be counted.
Shareholders who have registered for Link services online can also benefit from the ability to cast their proxy votes
electronically, rather than by post. Shareholders not already registered for Link services online will need their investor
code, which can be found on their share certificate or dividend tax voucher, in order to register.
To maximise shareholder engagement, shareholders who are unable to attend the AGM are encouraged to submit in
writing those questions that they might have wished to ask in person at the meeting. Questions should be emailed to
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company.secretary@wynnstayproperties.co.uk at least 48 hours in advance of the AGM. You will receive a written
response and, if there are common themes raised by a number of shareholders, we aim to provide a summary for all
shareholders, grouping themes and topics together where appropriate, on the Company's website following the AGM.
Finally, on behalf of the Board, I would like to thank all shareholders, whether they have held shares for many years
or have recently acquired shares, for their interest in and support for Wynnstay.
Philip Collins
Chairman
13 June 2023
13
WYNNSTAY PROPERTIES PLC
MANAGING DIRECTOR’S REVIEW
In my final full year at Wynnstay I am pleased to have the opportunity to report on the management activity within
the portfolio during the year and to reflect on the evolution of the Wynnstay portfolio over the last seventeen years
while I have been Managing Director.
The Portfolio during 2022-23
I will focus primarily on the portfolio which, as at the year-end, comprised 83 units and a development site in 15
locations.
Due to the number of leases, in most years there is inevitably a reasonable level of lease negotiation activity. However,
the year just ended has been one of the most active that I can remember with ten lease renewals, five rent reviews,
two leases being varied and one new letting. In addition, there were extended negotiations on one acquisition
completed following the year-end to which I refer below.
Of the lease renewals that completed during the year, four were at Aylesford, two at Lichfield, two at Hailsham and
one each at Ipswich and Uckfield. It is always pleasing to retain tenants on renewal and as a consequence of the ten
renewed leases the rents receivable under these leases have increased by over 16% which will be reflected in future
rental income. We completed five rent reviews, three at Petersfield and two at Aylesford and as a result of these five
reviews the rents receivable under these leases have increased by over 17%.
With the good level of tenant retention through lease renewals, there are fortunately fewer vacant properties arising
and hence less expenditure on empty property rates and refurbishment costs and inevitably less new letting activity.
However, at Liphook one tenant did vacate early in the year and the unit was very quickly relet at a rent which is over
33% higher than previously received. This new letting creates excellent evidence to support rental increases elsewhere
on the estate where further reviews are due in the next year or two.
During the year we completed two variations of existing leases. The first was at Cosham where we removed a tenant
break clause thus securing annual rental income from the tenant for a further five years. The second was at Lichfield
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where a tenant break option that would have been due in 2026 was removed such that the rent will now continue until
at least 2031 and will remain subject to an upward only rent review in 2026.
Portfolio in the current year
Compared with the active year I have described above, in the current year there will be a smaller number of lease
negotiation transactions overall. However, there are some significant leases where renewals or reviews are due and
where useful evidence for the level of market rents has been established in transactions completed in the prior year
described above or in the early months of current year. Hence, I am optimistic about the outlook for the current year.
Portfolio Valuation
The lease activity described above has had a significant positive effect on the March valuation. As already noted in
the Chairman’s Statement, our Independent Valuers, BNP Paribas Real Estate, undertook the annual revaluation as at 25
March 2023 valuing the Company’s portfolio at £39,320,000. This represents a 0.9% increase of £345,000 on the
valuation as at 25 March 2022.
The Chairman has pointed out in his statement that while this percentage increase is modest compared to last year
(2022: 23.7%), it should be considered against the background of significant valuation reductions in the commercial
property sector and he has commented on some of the reasons for this. I hope that the lease negotiation activity of the
past year and in the current year to date, together with the further activity over the course of the rest of the year to
which I have referred above will assist in underpinning the valuation in March 2024.
Post year-end acquisition
As announced on 28 April 2023, we exchanged contracts for the purchase of Riverdale Industrial Estate, Tonbridge
and completion took place in May 2023. We had agreed terms for this acquisition in mid-December 2022, but for
various reasons the legal due diligence took several months. The total acquisition cost of approximately £2.5 million
was funded entirely from the Company’s existing cash resources.
14
WYNNSTAY PROPERTIES PLC
MANAGING DIRECTOR’S REVIEW (CONTINUED)
This freehold property comprises of five industrial units arranged as two terraces with a central service yard. The
estate is fully let to four tenants with a range of lease expiry dates. The current rent from the estate is £140,350 per
annum and is subject to three outstanding upward only rent reviews effective from 29 September 2022 and a pending
lease expiry effective from 30 November 2023. The net initial yield is 5.6%, which is anticipated to rise to around
6.9% when the outstanding rent reviews and lease renewal have been concluded.
The acquisition provides a good strategic fit with the existing portfolio in the south-east of England, including Quarry
Wood Industrial Estate at Aylesford.
Energy efficiency in the portfolio
Over the past two years we have focused on improving the energy efficiency of all the properties in the portfolio. To
achieve net-zero carbon by 2050 the UK government is setting and reviewing targets and regulations for the continual
improvement of properties' Energy Performance Certificate (EPC) ratings as key to achieving this goal. Current EPC
ratings for commercial properties run from A to G, with buildings that are rated A considered the most, and those
rated G the least, energy-efficient. The latest government target is that, from 1 April 2023, all new lettings of non-
domestic private rented property must have an EPC rating of E or above.
During the year there has been considerable activity, working with our tenants at various individual properties
generally at modest cost and often undertaken where tenants wish to make other changes to suit their business needs,
to achieve or improve upon existing EPC ratings to ensure we meet the Government’s target.
I am pleased to report that the target of having all properties in the portfolio with EPC ratings of E and above by 1
April 2023 was exceeded, with many of the properties achieving an EPC rating of C and above. The Government’s
latest proposal is that all new lettings of commercial buildings should achieve an EPC rating of C or above by April
2025 and Wynnstay continues to work towards achieving this goal across its portfolio in advance of this deadline.
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Reflections on the evolution of the portfolio
I have been Managing Director of Wynnstay for over seventeen years, having been appointed in February 2006. On
my appointment, the portfolio comprised, in the main, small single-tenanted assets with a mix of industrial, office and
retail uses. Since then, Wynnstay has concentrated its investment principally into larger, multi-let, assets
predominantly in the industrial, including trade-counter, sector. I am pleased to have been able to take the lead in
bringing about this transformation, upgrading the quality of the assets and the tenant covenants. I am particularly
proud of delivering our successful development at Petersfield last year which had to be undertaken against the
challenges of Covid-19 and its effects on the construction industry. It has proved to be an excellent addition to the
portfolio.
At the time of my appointment the portfolio comprised 55 units in 20 locations with a value of just over £20 million
producing a rental income of just over £1.5 million per annum. The current portfolio, following the recent acquisition
at Tonbridge, comprises 88 units and a development site in 16 locations with a value of close to £42 million and a
rental income of about £2.5 million per annum. In total, the portfolio now comprises over 250,000 square feet of
lettable space.
Looking back over the past seventeen years, I have sold 16 of the 23 assets that I inherited in 2006 and have added
11 assets to the portfolio. Of the original 23 assets only 7 remain in the portfolio, with the offices in Surbiton having
been bought and sold during my tenure.
The assets sold comprised mainly small, single-tenanted, properties including retail shops and small offices divided
into suites, often with individuals as tenants and single industrial units. Where there have been redevelopment
opportunities, typically for residential use, the assets have been sold at prices that reflected the higher value use or the
greater value for development to a neighbour.
The funds realised from these disposals have been redeployed into larger, better quality, assets including several
multi-let industrial estates such as those at Aylesford, our largest asset, Ipswich, Lichfield, Liphook and Petersfield.
The tenants now include well-known national brands, often owned by quoted companies, with stronger covenants
than those of our historic small business tenants. Some assets offered opportunities for development, such as at
Aylesford, Liphook and Petersfield.
15
WYNNSTAY PROPERTIES PLC
MANAGING DIRECTOR’S REVIEW (CONTINUED)
During the same period Wynnstay’s net asset value and dividends have increased from 418p and 8.3p per share to
1,110p and 24.0p per share respectively. Wynnstay’s share price has substantially outperformed the FTSE 350 Real
Estate Investment Trusts Index over the last ten years as shown in the chart on page 7 of this report. I am pleased to
have played my part in delivering these results to shareholders.
This performance has been achieved despite various major hurdles ranging from the global financial crisis of 2008-9
to the Covid-19 crisis of 2020-22 and now to the gloomy world economic outlook that has developed since Covid-19
notably as a result of the Russian invasion of Ukraine and several other regional conflicts and geopolitical tensions.
Over the period, the commercial property market in the UK has been through several cycles of upturns and downturns,
the latest arising from the impact of rising inflation and interest rates over the past year.
I have certainly enjoyed my time at Wynnstay dealing with the many and varied tenants and their businesses, meeting
and trying to work with them, on a principal-to-principal basis, to achieve the optimum result for them and their
businesses as well as, of course, for Wynnstay shareholders. Maintaining positive and constructive relations with
tenants is essential in a commercial property business and especially so in difficult times whether due to general
economic conditions or to specific trading difficulties in a tenant’s business and even when I have not been the giver
of good news to a tenant.
As with all commercial property portfolios, tenants sometimes produce unexpected challenges. For instance, in
Wynnstay’s case, I recall the meat pie-making tenant who went into liquidation just before Christmas, leaving freezers
full of ingredients at our unit. The electricity supplier had disconnected the power supply and the staff had vacated
the unit. I was faced on repossession of the unit in January with arranging the disposal of considerable volumes of
rotting meat which was a most unpleasant experience. On a more positive note, another tenant on liquidation left the
premises full of racking and a large volume of motor spare parts which I was able to sell by auction over time, realising
not only sufficient funds to cover the outstanding rent, but also the refurbishment of the premises for reletting at an
increased rent.
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In the coming weeks, I will be familiarising my successor, Chris Betts, with the Wynnstay portfolio and our tenants
in order to ensure a smooth transition as well as discussing with him some of the opportunities that may arise
depending on the direction that he and the Board may wish to take the portfolio. I am confident that Wynnstay can
continue to grow successfully for the benefit of all shareholders, of which I plan to continue to be one, and I will
follow the Company’s future development with great interest.
Finally, I would like to thank the Board, our professional advisers, our service providers and suppliers for their support
over many years and to thank all the Wynnstay shareholders over the past seventeen years for their loyalty and
commitment.
Paul Williams
Managing Director
13 June 2023
16
WYNNSTAY PROPERTIES PLC
STRATEGIC REPORT 2023
The Directors present their Strategic Report for the year ended 25 March 2023.
Following the adoption by the Company of the Quoted Company Alliance Corporate Governance Code (the Code)
certain matters required by the Code to be included in the Annual Report are now addressed in this report, the
Directors’ Report or the Corporate Governance Report with cross-references provided where appropriate. The three
reports should be read together with the Introduction to Wynnstay, the Chairman’s Statement, the Managing
Director’s Review and the additional information required by the Code published on the Company’s website.
Business, Business Model, Strategy and Future Development
Wynnstay is a long-established, successful property investment and development company. Its business, business
model, strategy and future development are described in the Introduction to Wynnstay, the Chairman’s Statement and
the Managing Director’s Review on pages 5 to 16.
Financial Objectives and Performance Indicators
The key financial objectives for the Company are to achieve capital appreciation and generate rising dividend income
for shareholders from a diversified and resilient commercial property portfolio as described in the Introduction to
Wynnstay, the Chairman’s Statement and the Managing Director’s Review which also contain details of performance
against selected indicators.
The Directors consider that the Company’s performance against the indicators to be creditable. As a result of changes
made to the portfolio, including disposals of two significant properties in the past three financial years and completion
of a development project, while annual rental income has been relatively stable for a period, like-for like rental income
has substantially increased enabling rising dividends to be paid to shareholders. Active management, close
engagement with tenants and favourable market conditions have all contributed to this substantial increase as well as
the substantial increases in the valuation of the portfolio and thus in net asset value per share.
Risks, Uncertainties and Effective Risk Management
The principal risks and uncertainties are those associated with the commercial property market, which is cyclical by
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its nature and include changes in the supply and demand for space and investor demand for commercial property
assets as well as the inherent risk of tenant failure. In the latter case, the Company seeks to reduce this risk by requiring
the payment of rent deposits when considered appropriate and monitoring the income exposure to any tenant
contributing more than 2% of total rental income on a quarterly basis.
Other risk factors include changes in legislation in respect of taxation and the obtaining of planning consents, as well
as those associated with financing and treasury management including interest rate risk. The Company’s financial
risk management policies can be found at Note 19 of the financial statements.
In common with all other business activities, the Company is exposed to many of the usual risks and uncertainties
arising from commercial, economic and political circumstances and events, as well as to unpredictable external
shocks, such as the Covid pandemic and the invasion of Ukraine by Russia. Among these risks and uncertainties are:
• Significant potential income reduction and bad debts as tenants have difficulty in maintaining rent payments and
potential voids within the portfolio arising from tenant failures, resulting in additional costs;
• Significant potential impacts on the economy and market sentiment generally capable of adversely affecting the
commercial property market and commercial property values;
• Significant potential disruption to the businesses of letting agents, property professionals and the general services
on which the business relies;
• Significant potential impacts of inflation on costs, of supply chain constraints for raw materials and construction
products and of labour market constraints on any developments or works it may undertake.
• Significant changes in legislation affecting the ownership, construction, development or letting of commercial
properties including, for example, their energy efficiency.
The Company carefully vets prospective new tenants from a credit risk perspective. Bad debts are mitigated by close
engagement with businesses within a diversified mix of tenants across the portfolio.
The Board monitors carefully its rental income receipts. The Company received all the rental income due for the
financial year ended 25 March 2023, save for £8,000 outstanding from one tenant which has been provided in the
accounts and the portfolio was 100 % let by rental value as at 25 March 2023.
17
WYNNSTAY PROPERTIES PLC
STRATEGIC REPORT 2023 (CONTINUED)
The Board regularly reviews the portfolio, including feedback from engagement with tenants, in order to assess the
risk of tenant failures.
Rental Income, Net Property Income, Income before Taxation, Portfolio Valuation and Loan to Value Ratio are
considered key financial performance indicators.
Directors’ duty to promote the success of the Company under Section 172 Companies Act 2006
The Strategic Report is required to include a statement that describes how the directors have had regard to the matters
set out in section 172(1) (a) to (f) of the Companies Act 2006 when performing their duty under section 172. Some
of the matters identified in Section 172(1) are already covered by similar provisions in the QCA Corporate
Governance Code and have thus been reported by the Company in the Corporate Governance Statement, the Corporate
Governance Report and the QCA Statement of Compliance on our website. In order to avoid unnecessary duplication,
the relevant parts of those documents are identified below and are to be treated as expressly incorporated by reference
into this Strategic Report.
Under section 172 (1) of the Companies Act 2006, each individual Director must act in the way he considers, in good
faith, would be the most likely to promote the success of the Company for benefit of its members as a whole, and in
doing so have regard (among other matters) to six matters detailed in the section.
In discharging their duties, the Directors seek to promote the success of Wynnstay for the benefit of members as a
whole and have regard to all the matters set out in Section 172(1), where applicable and relevant to the business,
taking account of its size and structure and the nature and scale of its activities in the commercial property market.
The following paragraphs address each of the six matters in Section 172(1) (a) to (f).
(a) The likely consequences of any decision in the long term: The commercial property market is cyclical by nature.
Investing in commercial property is a long-term business. The decisions that we take must have regard to long term
consequences in terms of success or failure and managing risks and uncertainties. We cannot expect that every
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decision we take will prove, with the benefit of hindsight, to be the best one: external factors may affect the market
and thus change conditions in the future, after a decision has been taken. However, we consider that our record of
decisions on acquisitions, disposals and active management of the portfolio is very strong. This is reflected in the
long-term performance of Wynnstay over the years in terms of net asset value and dividends paid to shareholders.
(b) The interests of the Company’s employees: We have only one full time employee, who is the Managing Director.
He sits on the Board with the Non-Executive Directors. There are no other employees.
(c) The need to foster the Company’s business relationships with suppliers, customers and others: We have
regularly reported in our annual reports on the constructive relationships that Wynnstay seeks to build with its tenants
and the mutual benefits that this brings to both parties; and we have extended this reporting in recent years following
Principle 3 of the QCA Code to include suppliers and others. This is therefore addressed under Principle 3 in the QCA
Compliance Statement.
(d) The impact of the Company’s operations on the community and the environment: This is also addressed under
Principle 3 of the QCA Code in the QCA Compliance Statement. Due to its size and structure and the nature and scale
of its activities, the Board considers that the impact of Wynnstay’s operations as a landlord on the community and the
environment is low. Wynnstay’s assets are used by its tenants for their own operations rather than by Wynnstay itself.
In the past year, Wynnstay has not been made aware of any tenant operations that have had a significant impact on
the community or the environment. In relation to planned developments, Wynnstay seeks to ensure that designs and
construction comply with all relevant environmental standards and with local planning requirements and building
regulations so as not to adversely affect the community or the environment.
(e) The desirability of the Company maintaining a reputation for high standards of business conduct: This is
addressed under Principle 8 of the QCA Code in the Corporate Government Statement and in the QCA Compliance
Statement. The Board considers that maintaining Wynnstay’s reputation for high standards of business conduct is not
just desirable: it is a valuable asset in the competitive commercial property market.
18
(f) The need to act fairly as between members of the Company: Wynnstay has only one class of shares. Thus, all
shareholders have equal rights and, regardless of the size of their holding, every shareholder is, and always has been,
treated equally and fairly. Relations with shareholders are further addressed under Principles 2, 3 and 10 of the QCA
Code in the Corporate Governance Report and the QCA Compliance Statement. We continue to review how we
communicate with shareholders and we encourage shareholders to adopt electronic communications and proxy voting
in place of paper documents where this suits them as well as to raise questions in writing if they are unable to attend
annual general meetings.
This Strategic Report was approved by the Board and is signed on its behalf by:
Philip Collins
Director
13 June 2023
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19
WYNNSTAY PROPERTIES PLC
CHAIRMAN’S CORPORATE GOVERNANCE STATEMENT
As Chairman, it is my responsibility, working with my fellow Board colleagues, to ensure that good corporate
governance arrangements and standards apply within the Company.
Our corporate governance structure has evolved over many years since we became one of the first companies admitted
to AIM in 1995. We have adopted and adapted practices and procedures to promote good governance that are
considered appropriate for a company of Wynnstay’s size and structure and the nature and scale of its activities. We
have strived, as the business has grown and changed, for continual improvement making changes in recent years, for
instance, in management information flows and risk management reviews.
In September 2018, the Company adopted the Quoted Companies Alliance (QCA) Corporate Governance Code (the
Code). The Code is constructed around ten broad principles, which are set out in the Corporate Governance Report.
At Wynnstay, we apply the principles of the Code to the extent reasonable and practicable for a company of our size
and structure and the nature and scale of our activities, recognising the flexibility that lies within the Code so that it
is neither a bureaucratic, box-ticking exercise nor results in unnecessary, inappropriate or burdensome processes and
procedures.
So, for instance, we do not see the need in a company of this size with one full-time employee, the Managing Director,
for separate remuneration and audit committees, where the functions undertaken typically by those committees can
be fully and properly carried out by the Non-Executive Directors working formally as a group to consider
remuneration and the audit plan, process and outcome. We have used individual and group review and self-assessment
suited to our small size and structure, rather than formal external Board and individual performance reviews. During
the financial year the Board conducted a further evaluation of its performance through a self-assessment process. The
results are described under Principle 7 of the Code in the Corporate Governance Report. The evaluation has provided
further useful insight into the work of the Board over the past year and focus for the next year.
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Our Statement of Compliance has been reviewed and updated concurrently with the preparation of this Annual Report
and will be placed on the website together with the index to signpost the location of disclosures required by the Code.
The Board acknowledges that a corporate culture based on sound ethical values and behaviours is an asset and
provides competitive advantages in the commercial property market where competition is intense and prospective and
existing tenants are seeking good quality premises that are suited to their needs from a considerate, reliable landlord.
Wynnstay aims to conduct its business with a high degree of professionalism, to operate within appropriate
professional standards and legal and regulatory requirements and to act with honesty and integrity in a manner that
gives confidence to those with whom it deals.
I consider that Wynnstay’s governance structures and processes are in line with its corporate culture, and are
appropriate to its size and structure, the nature and scale of its activities and its capacity, appetite and tolerance for
risk and thus I consider them to be “fit-for-purpose”. They have evolved over time in parallel with its objectives,
strategy and business model and are suitable for the Company’s growth plans in the short to medium term and I, with
my colleagues on the Board, continue to keep them under review and to make changes where required.
Philip Collins
Chairman
13 June 2023
20
WYNNSTAY PROPERTIES PLC
CORPORATE GOVERNANCE, AUDIT AND REMUNERATION REPORTS
Introduction
This report is presented by reference to each of the ten principles contained in the Quoted Companies Alliance (QCA)
Corporate Governance Code (the Code) under a concise heading for each principle. Where the QCA recommends that
a principle should be addressed in the Annual Report, we do so in this report, the Directors’ Report or the Strategic
Report with cross-references provided where appropriate. The three reports should be read together with the
Chairman’s Statement and the additional information required by the Code published on the Company’s website,
including the Statement of Compliance. Where the Code recommends that a principle should be addressed on the
Company’s website, this report refers to the principle only and signposts to the website. The index required by the
Code to signpost where the disclosures required by the Code are located forms part of the Statement of Compliance.
For reasons explained below this report covers audit and remuneration matters as well as corporate governance.
Principle 1: Establish a strategy and business model which promote long-term value for shareholders
A description of the application of Principle 1 is recommended by the Code to be included in the annual report and
by company law is required to be included in the Strategic Report. We therefore deal with Principle 1 in that report.
Principle 2: Seek to understand and meet shareholder needs and expectations
A description of the application of Principle 2 is recommended by the Code to be included on a company’s website.
We therefore deal with Principle 2 in the Statement of Compliance on the Company’s website.
Principle 3: Take into account wider stakeholder and social responsibilities and implications for long-term
success
A description of the application of Principle 3 is recommended by the Code to be included on the Company’s website.
We therefore deal with Principle 3 in the Statement of Compliance on the Company’s website.
Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the
organisation
A description of the application of Principle 4 is recommended by the Code to be included in the annual report. Under
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company law, the Directors’ Report must include a description of financial risk management objectives and policies
and information on exposure to price risk, credit risk, liquidity risk and cash flow risk and the Strategic Report must
include a description of the principal risks and uncertainties facing a company. We therefore deal with Principle 4 in
these reports.
Principle 5: Maintain the board as a well-functioning, balanced team, led by the Chair
A description of the application of Principle 5 is recommended by the Code to be included in the annual report. The
information given below should be read together with the additional information required by the Code to be given
under Principles 6, 7, 8 and 9 provided in this report, elsewhere in this Annual Report and in the Statement of
Compliance on the Company’s website, as recommended by the Code.
The Code requires the identification of those directors who are considered to be independent and a description of the
time commitment required from directors including the number of meetings of the Board, and of any committees,
during the year, together with the attendance record of each Director.
The Board comprised one executive, the Managing Director, and four Non-Executive Directors, including the
Chairman during the year. The Board considers that all the Non-Executive Directors are independent. The biographies
of the all the Directors who served in the year, as well as the biographies of the two new Non-Executive Directors
whose appointments are referred to below, are available on the Company’s website and on page 58.
Philip Collins, the Non-Executive Chairman, has been a Director since 1988 and became Chairman in 1998. He has
become a significant shareholder, having decided to invest over this period, to demonstrate his confidence in
Wynnstay’s long-term prospects. He has always placed the interests of all shareholders, and Wynnstay’s long term
success, at the centre of his chairmanship, as evidenced by his actions and reports to shareholders. His knowledge of
the business and of shareholders, and his experience in both the private and public sectors, are all valuable to the
Board’s deliberations. There is no evidence that his tenure or his shareholding has had any adverse impact on his
independent judgement.
Charles Delevingne, who had served as a Non-Executive Director since June 2002, retired in March 2023. The Board
extends its warmest thanks to Mr Delevingne for his valuable service to the Company over many years.
21
WYNNSTAY PROPERTIES PLC
CORPORATE GOVERNANCE, AUDIT AND REMUNERATION REPORTS (CONTINUED)
Paul Mather and Caroline Tolhurst were appointed to the Board in March 2017 and were deemed independent on
appointment and remain so. They are both Chartered Surveyors and have many years of experience in commercial
property and property investment management as well as, in the case of Caroline Tolhurst, in corporate governance
through her qualification and experience as a Company Secretary.
During the year, the Board undertook two separate recruitment processes for Board appointments, one for Non-
Executive Directors and the other to recruit a new Managing Director to replace Paul Williams on his forthcoming
retirement. Both processes involved specialist external recruitment firms. Shortly before the year-end, the Company
announced that Ross Owen and Hugh Ford had been appointed to the Board and would take up their appointments at
the beginning of the new financial year on 26 March 2023. Both are considered by the Board to be independent and
will offer themselves for election by shareholders at the AGM in July. In early June 2023, the Company announced
the appointment of Christopher Betts as the Managing Director designate. He will join the Company shortly and is
expected to be appointed to the Board later in the summer.
The Non-Executive Directors are expected to devote such time as is necessary for the proper performance of their
duties. Overall, the Non-Executive Directors, other than the Chairman, are expected to spend a minimum of 10
working days a year on the Company’s business. In practice, after taking account of around 6 or 7 scheduled Board
meetings a year, preparation time, site visits and other requirements mentioned below, 12-18 days per annum would
be typical. The Chairman typically spends the equivalent of 25-30 working days per annum on the Company’s
business. The following table shows directors’ attendance at Board meetings, including ad hoc meetings, in the
financial year ended 25 March 2023.
Director
Philip Collins
Paul Williams
Charles Delevingne
Paul Mather
Caroline Tolhurst
Board meetings
13/13
13/13
13/13
13/13
13/13
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In addition to these meetings, all the Directors took part in two strategy discussions, three non-executive Directors
met with the Auditor to review its Audit Report and the Annual Report and Accounts and approve various audit-
related matters and documents, and two Directors also took part in Board sub-committee meetings authorised to
approve the final texts of documents or transactions on behalf of the Board.
In view of the Company’s size and nature, the Board does not consider that the establishment of formal Board
committees, such as a Remuneration Committee, a Nomination Committee or an Audit Committee, is appropriate.
Reports of the Non-Executive Directors’ consideration of Remuneration and Audit matters are covered under
Principle 10 below, as recommended by the Code.
In relation to nominations, these are managed by the Non-Executive Directors, or delegated to an ad hoc committee
of them, who report with recommendations to the Board. The approach to succession planning and appointments is
addressed, as recommended by the Code, under Principle 7 in the Statement of Compliance on the Company’s website.
Principle 6: Ensure that between them directors have the necessary up-to-date experience, skills and
capabilities
The application of Principle 6 is recommended by the Code to be included in the annual report and is therefore
included in this report, as well as elsewhere in this Annual Report, which should be read together with the information
provided under Principles 5, 7, 8 and 9 in this report and on the Company’s website.
The Code requires disclosure of the identity of each Director; the relevant experience, skills and personal qualities
that each brings to the Board; how the Board as a whole contains the necessary mix of experience, skills and qualities
and capabilities to deliver the strategy over the medium to long-term; how each director keeps his/her skill-set up-to-
date; where external advisers have been engaged, their role and where external advice on significant matters has been
obtained; and any internal advisory roles.
The names of the Directors and their experience, skills and capabilities are set out on the Company’s website.
22
CORPORATE GOVERNANCE, AUDIT AND REMUNERATION REPORTS (CONTINUED)
Reference is also made to the information on each of the Non-Executive Directors given under Principle 5 above and
on page 58.
The Managing Director, Paul Williams, has many years of practical experience in property investment and
management, as does the Managing Director designate, Christopher Betts. The Board has engaged experienced
professionals to manage accounting, financial and Company secretarial matters.
Alan Palmer, the Director of Finance, although not a Board Director, attends all Board meetings and advises the Board
on accounting and financial matters. He has extensive experience of the commercial property sector, with former
senior roles in finance, treasury and corporate finance in quoted property companies. His services are provided through
The CFO Centre Limited, a specialist provider of part-time Finance Director services to small and medium sized
enterprises (SME’s).
Susan Wallace FCIS, Company Secretary, is a Chartered Secretary and a founding partner of Bruce Wallace
Associates Limited, a specialist provider of company secretarial and compliance services to SME businesses and
quoted companies. In her role, she is supported by other professionals in her company. Shortly after the year-end,
Bruce Wallace Associates merged its business with Shakespeare Martineau LLP.
The Board considers that the experience and knowledge of each of the Directors and the experienced professionals is
appropriate for the Company’s current operations and strategy and gives them the ability to constructively challenge
strategy, scrutinise performance and assess risk and to deliver the Company’s strategy over the medium to long-term.
Directors keep their skill sets up to date with a combination of attendance at industry events, individual reading and
study and experience gained from other board roles. The Company Secretary is responsible for ensuring the Board is
aware of any applicable regulatory changes and updates the Board as and when relevant. Directors are able to take
independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense.
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The Company calls on the services of specialist external advisers in the usual way for its day-to-day business needs.
The Chairman, Senior Independent Director, Company Secretary and Director of Finance, working in their respective
roles and together, advise and support the Board as a whole, drawing on specialist external advisers where necessary.
Principle 7: Evaluating board performance based on clear and relevant objectives, seeking continuous
improvement
The application of Principle 7 is recommended by the Code to be included in part in the annual report and in part on
a company’s website. The Company considers that it is convenient to deal with most of these matters in one place in
this report.
After the end of each financial year, the Chairman usually holds a meeting with the Non-Executive Directors
individually and as a group without the Managing Director. The Non-Executive Directors also meet annually without
the Chairman to appraise the Chairman’s performance. These meetings are intended to provide an opportunity for
open dialogue on individual and collective performance and on any necessary changes required.
The Board carried out a further internal board evaluation based, as in the previous year, on the same set of questions
typically used by smaller companies for this purpose. The Directors were asked to rate the Board’s performance by
providing a score, within a range of 0-5, and comments for each question as well as to suggest ideas to improve the
working of the Board and to make comparisons with the previous year. The scores and comments were amalgamated
into an anonymised results schedule, which was then considered by the Board. The total ratings and average scores
for each question and all the comments submitted were reviewed.
The review noted that in two of the three areas identified to be taken forward in last year’s report (enhanced
communication between Board meetings and focusing increased Board time on priority areas by improving reporting
and agenda management) the evaluation showed improvement over the course of the year. In the third area, exploring
more effective communications with shareholders, the review noted the limited feedback from, and opportunities to
engage with, shareholders especially as there had been no, or limited, attendance at the last three AGMs. The review
also noted further improvement in the areas reported on from 2020-21 in last year’s report (oversight of effective risk
management and the time devoted to long-term, new or emerging strategic issues).
23
CORPORATE GOVERNANCE, AUDIT AND REMUNERATION REPORTS (CONTINUED)
The review considered that the appointment of two new Non-Executive Directors, together with the appointment of
our new Managing Director, would bring fresh insight and provide further opportunities to review and refine the
Board’s functioning and processes in the second-half of the current year. Three areas identified to be taken forward
are the integration and streamlining of management information to the Board; review of the risk management
framework, with Board examination of specific top risks; and increased focus of Board time on strategic issues for
the portfolio and the Company while maintaining appropriate challenge and oversight over operational matters.
The Board will carry out a similar evaluation exercise towards the end of the current financial year, which will include
the effectiveness of the changes implemented. Given the size and nature of the Company’s business, the Board
currently does not consider it would be an appropriate use of cash resources to engage an external firm to undertake
a formal evaluation although it will keep this under review.
The approach to succession planning and appointments is addressed, as recommended by the Code, under Principle
7 in the Statement of Compliance on the Company’s website.
Principle 8: Promote a corporate culture based on ethical values and behaviours
The application of Principle 8 is recommended by the Code to be addressed in the Chairman’s Corporate Governance
Statement. Ensuring the means to determine that values and behaviours are recognised and respected is addressed, as
recommended by the Code, under Principle 8 in the Statement of Compliance on the Company’s website.
Principle 9: Maintain governance structures and processes that are fit-for-purpose, and support good decision
making
A high-level explanation of the application of Principle 9 is recommended by the Code to be provided in the
Chairman’s Corporate Governance Statement.
The Code recommends that supplementary detail required by the Code (role and responsibilities of Directors, role of
committees, matters reserved for the Board and plans for evolution of the governance framework) is addressed on the
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website and it is so addressed under Principle 9 in the Statement of Compliance on the Company’s website.
Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The application of Principle 10 of the Code is recommended by the Code to be included in part in the annual report
and in part on the website. The Company follows these recommendations and addresses the work of committees,
including in relation to audit and remuneration and the identification and reasons for any non-publication of
disclosures under the principles set out in the Code in this report.
The other matters, being the outcome of all general meeting votes and intended actions on and reasons for significant
votes cast against resolutions, are shown on the Company’s website, together with the Statement of Compliance,
historical annual reports, notices of general meetings and other governance-related material.
Communication and dialogue with shareholders and other relevant stakeholders has already been addressed above in
this report. The performance of the business during the last financial year is reviewed in detail in the Chairman’s
Statement, the Managing Director’s Review, the Directors’ Report and the Strategic Report and elsewhere in the
Annual Report.
The Board considers that the existing communication and reporting structures allow open dialogue between
shareholders and the Board and provide shareholders with a good understanding of the business.
The Code recommends the annual report to describe the work of committees and recommends inclusion in the annual
report. As already mentioned above, the Board does not have formally constituted committees, with the Non-
Executive Directors acting as a group in relation to audit and remuneration.
The following paragraphs report on the work of the Non-Executive Directors in relation to audit and remuneration
matters in the year.
24
CORPORATE GOVERNANCE, AUDIT AND REMUNERATION REPORTS (CONTINUED)
Audit Report
The Senior Independent Director and the Director of Finance met and discussed the audit with the auditor before the
year-end and a draft Audit Planning Report prepared by the auditor was reviewed subsequently by the Board.
At the completion of the audit, the auditor presented its Audit Completion Report to the Non-Executive Directors
before the Financial Statements were presented for Board approval. The discussions enabled the auditor to explain
the work undertaken and its outcome and the Non-Executive Directors to raise any issues. It is considered that the
process worked well. The audit did not raise any material issues and the auditor was able to issue the audit report as
scheduled and in the usual form.
Remuneration Report
The Directors currently determine remuneration, with the Non-Executive Directors determining the remuneration of
the Executive Director and the Non-Executive Directors (other than the Chairman) determining the Chairman’s
remuneration. Directors’ Fees are determined by the whole Board. Details of the Directors’ remuneration are set out
in the Directors’ Report.
It is the Company’s policy that the remuneration of Directors should be commensurate with the services provided by
them to the Company and should take account of published data on reasonable market comparables, where available
and relevant to our situation.
The Non-Executive Directors met after the end of the financial year to review the performance of the Managing
Director and determine the level of his remuneration and any bonus. Remuneration has been determined historically
by reference to a mixture of publicly available remuneration studies relating to the relevant specialism and role, other
AIM companies and a few private property companies. However, such information has become less readily available
in recent years and may not in any event be applicable to our particular circumstances. Levels of bonus are determined
by reference to the assessment of performance against objectives for the business. This process is necessarily
subjective but is considered to deliver a reasonable result for the individual, the Company and its shareholders. For
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the year ended 25 March 2023 it was agreed that a bonus be awarded for the year. Details of remuneration are disclosed
in the Directors’ Report.
Directors’ Fees are determined primarily by reference to the fees payable in other AIM quoted companies, with the
level being set towards the lower end of the range. The Chairman’s remuneration is set having regard to the
commitment required to carry out the function and its responsibilities and having regard to the level of Directors’
Fees and, to some extent, comparables among other AIM companies.
This Report was approved by the Board and is signed on its behalf by:
Philip Collins
Director
13 June 2023
25
WYNNSTAY PROPERTIES PLC
DIRECTORS’ REPORT 2023
The Directors present their One Hundred and Thirty-Seventh Annual Report, together with the audited Financial
Statements of the Company for the year ended 25 March 2023.
Following the adoption by the Company of the Quoted Company Alliance Corporate Governance Code (the Code)
certain matters required by the Code to be included in the Annual Report are now addressed in this report, the Strategic
Report or the Corporate Governance Report with cross-references provided where appropriate. The three reports
should be read together with the Chairman’s Statement, the Managing Director’s Review and the additional
information required by the Code published on the Company’s website.
Business and Future Development
As the Code requires a description of the business, strategy and business model promoting long-term value for
shareholders to be included in the Annual Report, and similar information is also required by company law to be
included in the Strategic Report, these matters are dealt with in the Strategic Report on pages 17 to 19.
Financial Objectives and Risks
As the Code requires a description of effective risk management systems to be included in the Annual Report and
company law requires a description of financial risk management objectives and policies, information on exposure to
risks and a description of the principal risks and uncertainties facing a company, these matters are all dealt with in the
Strategic Report as well as in Note 1.3 of the Financial Statements.
Income (Profit) for the Year
Income after Taxation and Total Comprehensive Income for the year after taxation amounted to £1,142,000 (2022:
£5,418,000). Details of movements in reserves are set out in the statement of changes in equity.
Dividends
The Directors have decided to recommend a final dividend of 15p per share for the year ended 25 March 2023 payable
on 26 July 2023 to those shareholders on the register at the close of business on 30 June 2023. This dividend, together
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with the interim dividend of 9p paid on 16 December 2022, represents a total for the year of 24p (2022: 22.5p).
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Strategic Report, the Directors’ Report, the Corporate Governance
Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. The Directors prepared
the Company’s financial statements in accordance with UK adopted International Accounting Standards (IAS ). The
Directors must only approve the financial statements if they are satisfied that they give a true and fair view of the state
of affairs of the Company and of the profit or loss of the Company for the reporting period. In preparing these financial
statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
•
• make judgements and accounting estimates that are reasonable and prudent;
•
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company
state whether the financial statements have been prepared in accordance with IAS; and
will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible
for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are also responsible for ensuring that they meet their responsibilities under the AIM Rules.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included
on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of the
financial statements may differ from legislation in other jurisdictions.
26
WYNNSTAY PROPERTIES PLC
DIRECTORS’ REPORT 2023 (CONTINUED)
Directors
The Directors holding office during the financial year under review and their interests (including spouses, other related
parties and non-beneficial interests, where applicable) in the ordinary share capital of the Company at 25 March 2023
and 25 March 2022 are shown below:
Ordinary Shares of 25p
2022
2023
P.G.H. Collins
C.P. Williams
C.H. Delevingne
Non-Executive Chairman
Managing Director
Non-Executive Director
850,836
11,612
5,000
850,836
11,612
5,000
The interests shown above in respect of Mr. P.G.H. Collins include non-beneficial interests of 229,596 shares at 25
March 2023 and 2022.
Mr. C.P. Williams has a service agreement with the Company under which his employment is subject to three months’
notice of termination by either party.
In accordance with the Company’s Articles of Association, Miss Caroline Tolhurst retires by rotation and, being
eligible, offers herself for re-election at the Annual General Meeting.
Biographies of each of the Directors are available on the Company’s website and on page 58.
Directors’ Emoluments
Directors’ emoluments for the year ended 25 March 2023 are set out below:
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P.G.H. Collins
C.P. Williams
C.H. Delevingne
P. Mather
C.M. Tolhurst
Total 2023
Total 2022
Salaries
–
136,500
–
–
–
Fees
45,000
16,800
16,800
16,800
30,100
Pension
–
48,650
–
–
–
Benefits
–
8,384
–
–
–
Total
2023
45,000
210,334
16,800
16,800
30,100
Total
2022
43,500
204,880
16,250
16,250
21,650
£136,500
£125,500
£48,650
£8,384
£319,034
£168,000
£113,900
£13,300
£7,330
£302,530
The above figures for 2023 include a discretionary bonus of £35,000 awarded to Mr Williams for the financial year
ended 25 March 2023 (2022: £35,000) which, at his request, was paid into his pension scheme. A one-off payment of
£8,000 was made to C.M. Tolhurst, Senior Independent Director, for the additional work undertaken on Board
appointments during the year.
The Directors’ Emoluments set out above form part of the Financial Statements.
Directors’ and Officers’ Liability Insurance
The Company has maintained Directors’ and Officers’ insurance as permitted by the Companies Act 2006.
27
WYNNSTAY PROPERTIES PLC
DIRECTORS’ REPORT 2023 (CONTINUED)
Interests in the Company’s Shares
As at 13 June 2023, the Directors have been notified or are aware of the following interests (including spouses, other
related parties and non-beneficial interests, where applicable, for both financial years), which are in excess of three
per cent of the issued ordinary share capital of the Company, excluding shares held in treasury:
No. of Ordinary
Shares of 25p
P.G.H. Collins
G. J. Gibson
D. N. Gibson
Dr. G.L.A. Bird
J.V. Bird
850,836
274,475
131,078
112,000
111,750
Percentage of
Share
Capital 2023
31.55%
10.18%
4.86%
4.15%
4.14%
Percentage of
Share
Capital 2022
31.38%
10.04%
4.47%
4.13%
4.12%
Share Buy-back
On 19 July 2022, shareholders approved a special resolution authorising the Company to purchase in the market up
to 406,742 Ordinary Shares of 25p each in the capital of the Company.
On 5 September 2022 pursuant to this authority, the Company purchased in the market 15,000 Ordinary Shares of
25p each, representing less than 0.005 % of the issued share capital, at a price of £7.10 per share with the aggregate
consideration paid for the shares being £106,500. The Directors considered that the purchase represented good use of
the Company’s available cash resources and, by increasing earnings and net asset value per share, would assist in
maximising shareholder value. The total cost of establishing the share buyback authority which lasts for five years,
together with this first purchase in the market was £164,000.
The shares so purchased are held by the Company in treasury together with the 443,650 Ordinary Shares of 25p each
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purchased by the Company in March 2010. Thus, the Company now holds 458,650 Ordinary Shares of 25p each in
treasury, representing 14.5% of the Company’s issued share capital.
Going Concern
The Directors consider, as at the date of approving the financial statements, that there is reasonable expectation that
the Company has adequate financial resources to continue to operate, and to meet its liabilities as they fall due for
payment, for at least twelve months following the approval of the financial statements.
Internal Control
The Directors are responsible for the Company’s system of internal financial control, which is designed to provide
reasonable, but not absolute, assurance against material misstatement or loss. In fulfilling these responsibilities, the
Board has reviewed the effectiveness of the system of internal financial control. The Directors have established
procedures for planning and budgeting and for monitoring, on a regular basis, the performance of the Company.
Statement as to Disclosure of Information to Auditors
Each of the persons who are Directors at the time when this report is approved has confirmed that:
•
so far as each Director is aware, there is no relevant audit information of which the Company’s auditors are
unaware; and
• each Director has taken all the steps that ought to have been taken as a Director, including making appropriate
enquiries of fellow Directors and the Company’s auditors for that purpose, in order to be aware of any information
needed by the Company’s auditors in connection with preparing their report and to establish that the Company’s
auditors are aware of that information.
Annual General Meeting
The Notice of the Annual General Meeting, to be held on 18 July 2023, is set out at the end of the Annual Report.
By Order of the Board
Susan Wallace
Secretary
13 June 2023
28
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF WYNNSTAY PROPERTIES PLC
Opinion
We have audited the financial statements of Wynnstay Properties (the ‘company’) for the year ended 25 March
2023 which comprise Statement of Comprehensive Income, the Statement of Financial Position, the Statement
of Cash Flows, the Statement of Changes in Equity, and the notes to the financial statements, including
significant accounting policies. The financial reporting framework that has been applied in their preparation is
applicable law and UK-adopted international accounting standards.
In our opinion, the financial statements:
• give a true and fair view of the state of the company’s affairs as at 25 March 2023 and of its income for
the year then ended;
• have been properly prepared in accordance with UK-adopted international accounting standards; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
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applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities
for the audit of the financial statements section of our report. We are independent of the company in accordance
with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the
FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period, and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, 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 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.
Key audit
matter
Valuation of
Investment
properties
Description of risk
How the matter was addressed in the audit
The Company holds a portfolio of
investment properties which are owned
by the Company and held for rental
income. The directors measure each
property in the portfolio at fair value at
the year end date on the basis of a
valuation by an external independent
valuer whose details can be found in
note 10 of the accounts. The Company’s
accounting policy for investment
properties is included within note 1.2.
As part of our procedures, we:
• Reviewed the valuation reports for all
the properties and confirmed that the
valuation approach for each was in
accordance with RICS standards and
suitable for use in determining the
carrying value for the purpose of the
financial statements.
• Compared the yields used within the
valuation to market averages based on
sector and location. Variances were
evaluated through gaining an
understanding of the rationale
29
The valuation of investment properties
requires significant judgement in
determining the appropriate inputs to be
used in the model and there is therefore
a risk that the properties are incorrectly
valued.
underlying the discrepancy, and
assessing whether this supports the
valuation overall. We further performed
a sensitivity analysis on the value of the
portfolio against market averages.
• Tested the accuracy of inputs to the
valuation, including rental income and
lease terms.
• Assessed the Valuer’s qualifications,
expertise and independence, and read
their terms of engagement with the
Company to determine whether there
were any matters that might have
affected their objectivity or may have
imposed scope limitations upon their
work.
Revenue
recognition
the Company consists
Revenue for
primarily of rental
income. Rental
income is based on tenancy agreements
where there is a standard process in place
for recording revenue as set out in the
agreements. There are however certain
transactions within revenue that warrant
additional audit focus because of an
increased inherent risk of error due either
through fraud or their non-standard
nature, such as lease incentives.
As part of our procedures, we:
• Selected a sample of properties from the
investment property register, formed an
expectation of the rent to be recognised
from the lease agreement and compared
this to the actual rent recognised. We
investigated variances exceeding an
acceptable threshold.
• For a sample, reviewed the accounting
for lease incentives, and ensured this was
in line with accounting standards.
Our application of materiality
The materiality for the company financial statements as a whole (“FS materiality”) was set at £430,000. This
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has been determined with reference to the benchmark of the company’s total assets, which we consider to be
one of the principal considerations for members of the company in assessing the company’s performance. FS
materiality represents 1% of the company’s total assets as presented on the face of the Statement of Financial
Position.
Rental Income and Income before Taxation are key performance indicators of the company which are driven by
Income Statement items and we therefore applied a lower specific materiality of £45,800, based on 2% of
company revenue. This lower specific materiality was applied to the components of the company’s Statement
of Comprehensive Income, excluding investment property valuation movements.
Performance materiality for the company financial statements was set at £344,000, being 80% of FS materiality,
for purposes of assessing the risks of material misstatement and determining the nature, timing and extent of
further audit procedures. We have set it at this amount to reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected misstatements exceeds FS materiality. We judged this level to
be appropriate based on our understanding of the company and its financial statements, as updated by our risk
assessment procedures and our expectation regarding current period misstatements. It was set at 80% based on
our overall expectation of the level of audit differences, and the number and significance of areas of judgement
in the financial statements.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the company’s ability to continue to adopt the going concern basis
of accounting included:
• Discussion with management over the basis and appropriateness of key assumptions including
corroboration where relevant;
30
• Reviewing bank statements to monitor the cash position of the company post year end, and obtaining
an understanding of significant expected cash outflows (such as capital expenditure) in the forthcoming
12-month period;
• Reviewing disclosures around going concern in the financial statements to ensure they are consistent
with the work performed.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the company’s ability to continue as
a going concern for a period of at least twelve months from when the financial statements are authorised for
issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Other information
The other information comprises the information included in the Annual Report and Financial Statements, other
than the financial statements and our auditor’s report thereon. The directors are responsible for the other
information contained within the Annual Report and Financial Statements. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report,
we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial statements
or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required to determine whether
this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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•
•
the information given in the strategic report and the directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of
the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have not been received
from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
•
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 26, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the 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 company or to cease operations,
or have no realistic alternative but to do so.
31
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is
detailed below:
We obtained a general understanding of the company’s legal and regulatory framework through enquiry of
management concerning their understanding of relevant laws and regulations, the entity’s policies, and
procedures regarding compliance, and how they identify, evaluate and account for litigation claims. We also
drew on our existing understanding of the company’s industry and regulation.
We understand that the company complies with the framework through:
• Subscribing to relevant updates from external experts and making changes to internal procedures and
controls as necessary.
• Outsourcing accounts preparation and tax compliance to external experts;
• The Executive Director’s close involvement in the day to day running of the business, meaning that
any litigation or claims would come to their attention directly.
In the context of the audit, we considered those laws and regulations which determine the form and content of
the financial statements, which are central to the company’s ability to conduct its business, and/or where there
is a risk that failure to comply could result in material penalties. We identified the following laws and regulations
as being of significance in the context of the company:
• The Companies Act 2006 and IFRS in respect of the preparation and presentation of the financial
DRAFT
statements.
The senior statutory auditor led a discussion with senior members of the engagement team regarding the
susceptibility of the entity’s financial statements to material misstatement, including how fraud might occur.
The areas identified in this discussion were:
• Manipulation of financial statements via fraudulent journal entries or error affecting cut off around the
year end, particularly as the size of the company means that there is limited opportunity for segregation
of duties.
• The manipulation of the financial statements via the valuation of investment properties as this requires
estimates and judgements to be made by management.
• The manipulation of Property Income recognised for the year through the recognition of revenue
components such as lease incentives.
These areas were communicated to the other members of the engagement team not present at the discussion.
The procedures we carried out to gain evidence in the above areas included:
• Challenging management regarding the judgements and assumptions used in the estimates as set out in
the key audit matters above.
• Substantive work on material areas affecting Income for the year.
• Testing journal entries, focusing particularly on postings to unexpected or unusual accounts and those
around the year end
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
32
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the
company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Julie Mutton
Senior Statutory Auditor, for and on behalf of
CLA Evelyn Partners Limited
Statutory Auditor
Chartered Accountants
4th Floor Cumberland House
15-17 Cumberland Place
Southampton
Hampshire
SO15 2BG
Date: 13 June 2023
DRAFT
33
WYNNSTAY PROPERTIES PLC
STATEMENT OF COMPREHENSIVE INCOME FOR YEAR ENDED 25 MARCH 2023
Notes
2
3
4
10
6
6
7
DRAFT
Property Income
Property Costs
Administrative Costs
Net Property Income
Movement in Fair Value of
Investment Properties
Profit on Sale of Investment Property
Operating Income
Investment Income
Finance Costs
Income before Taxation
Taxation
Income after Taxation and Total
Comprehensive Income
2023
£’000
2,312
(96)
(719)
1,497
345
–
1,842
27
(439)
1,430
(288)
1,142
2022
£’000
2,308
(125)
(614)
1,569
5,887
125
7,581
-–
(379)
7,202
(1,784)
5,418
Basic and diluted earnings per share
9
42.2p
199.8p
The Company has no items of other comprehensive income.
34
WYNNSTAY PROPERTIES PLC
STATEMENT OF FINANCIAL POSITION 25 MARCH 2023
2023
£’000
39,320
3
39,323
482
3,268
3,750
(844)
(308)
(1,152)
2,598
41,921
(9,951)
(2,034)
(11,985)
29,936
789
205
1,135
(1,734)
29,541
29,936
1,110p
2022
£’000
38,975
3
38,978
301
3,491
3,792
(1,048)
(284)
(1,332)
2,460
41,438
(9,938)
(1,953)
(11,891)
29,547
789
205
1,135
(1,570)
28,988
29,547
1,090p
Notes
10
12
14
15
DRAFT
16
17
18
Non-Current Assets
Investment Properties
Investments
Current Assets
Trade and other receivables
Cash and Cash Equivalents
Current Liabilities
Trade and other payables
Income Taxes Payable
Net Current Assets
Total Assets Less Current Liabilities
Non-Current Liabilities
Bank Loans Payable
Deferred Tax Payable
Net Assets
Capital and Reserves
Share Capital
Capital Redemption Reserve
Share Premium Account
Treasury Shares
Retained Earnings
Net Asset Value pence per share
Approved by the Board and authorised for issue on 13 June 2023
P.G.H. Collins
Director
Registered number: 00022473
C.P. Williams
Director
35
WYNNSTAY PROPERTIES PLC
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 25 MARCH 2023
Cash flows from operating activities
Income before taxation
Adjusted for:
Increase in fair value of investment properties
Interest receivable
Interest and finance costs payable
Profit on sale of investment property
Amortised loan fees
Revaluation movement
Changes in:
(Increase)/decrease in trade and other receivables
(Decrease)/increase in trade and other payables
Cash generated from operations
Income taxes paid
Net cash generated from operating activities
DRAFT
Cash flows from investing activities
Interest and other income received
Purchase of investment properties
Sale of investment properties
Net cash generated from investing activities
Cash flows from financing activities
Interest paid
Dividends paid
Drawdown of bank loans net of fees
Repurchase of shares into treasury
Repayment of bank loans
Net cash used in financing activities
(Decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
36
2023
£’000
1,430
(345)
(27)
439
–
13
33
(181)
(181)
1,181
(206)
975
27
–
–
27
(439)
(622)
–
(164)
–
(1,225)
(223)
3,491
3,268
2022
£’000
7,202
(5,887)
–
379
(125)
–
–
41
153
1,763
(284)
1,479
–
(1,583)
2,618
1,035
(379)
(583)
9,938
–
(10,000)
(1,024)
1,490
2,001
3,491
WYNNSTAY PROPERTIES PLC
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 25 MARCH 2023
YEAR ENDED 25 MARCH 2023
Share
Capital
£’000
Capital
Redemption
Reserve
Share
Premium
Account
Treasury
Shares
Retained
Earnings
£’000
£’000
£’000
£’000
Total
£’000
Balance at 26 March 2022
Total comprehensive
income for the year
Treasury Share repurchases
Revaluation movement
Dividends – note 8
789
205
1,135
(1,570)
28,988
29,547
–
–
–
–
–
–
–
–
–
–
–
–
–
1,142
1,142
(164)
–
–
–
33
(164)
33
(622)
(622)
Balance at 25 March 2023
789
205
1,135
(1,734)
29,541
29,936
YEAR ENDED 25 MARCH 2022
Share
Capital
£’000
Capital
Redemption
Reserve
DRAFT
£’000
Share
Premium
Account
Treasury
Shares
Retained
Earnings
Total
£’000
£’000
£’000
£’000
Balance at 26 March 2021
789
205
1,135
(1,570)
24,153
24,712
Total comprehensive
income for the year
Dividends – note 8
–
–
–
–
–
–
–
–
5,418
5,418
(583)
(583)
Balance at 25 March 2022
789
205
1,135
(1,570)
28,988
29,547
FUNDS AVAILABLE FOR DISTRIBUTION
Retained Earnings
Less: Cumulative Unrealised Fair Value
Adjustment of Property Investments net of tax
Treasury Shares
Distributable Reserves
37
2023
£’000
29,541
2022
£’000
28,988
(13,376)
(12,996)
(1,734)
(1,570)
14,431
14,422
WYNNSTAY PROPERTIES PLC
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 25 MARCH 2023
Explanation of Capital and Reserves:
• Share Capital: This represents the subscription, at par value, of the Ordinary Shares of the Company.
• Capital Redemption Reserve: This represents money that the Company must retain when it has bought back
shares, and which it cannot pay to shareholders as dividends: It is a non-distributable reserve and represents
paid up share capital.
• Share Premium Account: This represents the subscription monies paid for Ordinary Shares of the Company
in excess of their par value.
• Treasury Shares: This represents the total consideration and costs paid by the Company when purchasing the
458,650 shares as referred to in Note 18.
• Retained Earnings: This represents the profits after tax that can be used to pay dividends. However, dividends
can only be paid from distributable deserves as detailed in the preceding table.
DRAFT
38
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 25 MARCH 2023
1.
BASIS OF PREPARATION, ACCOUNTING POLICIES AND ESTIMATES
Wynnstay Properties PLC is a public limited company incorporated and domiciled in England and Wales.
The principal activity of the Company is property investment, development and management. The
Company’s ordinary shares are traded on the AIM, part of The London Stock Exchange. The Company’s
registered number is 00022473.
1.1 Basis of Preparation
The financial statements have been prepared in accordance with UK adopted International Accounting
Standards (“IAS”). The financial statements have been presented in Pounds Sterling being the functional
currency of the Company and rounded to the nearest thousand. The financial statements have been prepared
under the historical cost basis modified for the revaluation of investment properties and financial assets
measured at fair value through Operating Income.
(a) New Interpretations and Revised Standards Effective for the year ended 25 March 2023
The Directors have adopted all new and revised standards and interpretations issued by the International
Accounting Standards Board (“IASB”) and the International Financial Reporting Interpretations Committee
(“IFRIC”) of the IASB and adopted by applicable law that are relevant to the operations and effective for
accounting periods beginning on or after 26 March 2022:
• Amendment to IFRS 16: Leases Covid 19-Related Rent Concessions.
•
IAS 37: Provisions, Contingent Liabilities and Contingent Assets.
The adoption of these interpretations and revised standards had no material impact on the disclosures and
presentation of the financial statements.
DRAFT
(b) Standards and Interpretations in Issue but not yet Effective
The International Accounting Standards Board (“IASB”) and International Financial Reporting
Interpretations Committee (“IFRIC”) have issued the below revisions to existing standards or new
interpretations or new standards with an effective date of implementation after the period of these financial
statements.
The following new amendment applicable in future periods has not been early adopted as it is not expected
to have a significant impact on the financial statements of the Company:
• Amendments to IAS 1: Classification of Liabilities as Current or Non-current (effective for accounting
periods beginning on or after 1 January 2023).
• Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of Accounting Policies.
• Amendments to IAS 8 Definition of Accounting Estimates.
• Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction.
(c) Going concern
The financial statements have been prepared on a going concern basis. This requires the Directors to
consider, as at the date of approving the financial statements, that there is reasonable expectation that the
Company has adequate financial resources to continue to operate, and to meet its liabilities as they fall due
for payment, for at least twelve months following the approval of the financial statements.
The Directors have reviewed cash balances and borrowing facilities to cover at least twelve months of
operations, including financing costs and continuation of employment and advisory costs as currently
contracted without any reduction for cost saving initiatives. The results of the review show that the Company
has cash and borrowing facilities to cover at least twelve months of operations, and that the Company will
satisfy the financial covenant ratios in the borrowing facilities as described in Note 16. In addition, the
Statement of Financial Position as at 25 March 2023 shows that the Company held a cash balance of £3.3m
and net assets of £29.9m and had a low gearing ratio of 22.3%. In the light of the foregoing considerations,
the Directors consider that the adoption of the going concern basis is reasonable and appropriate.
39
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 25 MARCH 2023
1.2 Accounting Policies
Investment Properties
All the Company’s investment properties are independently revalued annually and stated at fair value as at
25 March. The aggregate of any resulting increases or decreases are taken to operating income within the
Statement of Comprehensive Income. The basis of independent valuation is described in Note 10.
Investment properties are recognised as acquisitions or disposals based on the date of contract completion.
Depreciation
In accordance with IAS 40, freehold investment properties are included in the Statement of Financial
Position at fair value and are not depreciated.
The Company has no other property, plant and equipment.
Disposal of Investments
The gains and losses on the disposal of investment properties and other investments are included in
Operating Income in the year of disposal. Gains and losses are calculated on the net difference between the
carrying value of the properties and the net proceeds from their disposal.
Property Income
Property income is recognised on a straight-line basis over the period of the lease and is measured at the
fair value of the consideration receivable. Lease deposits are held in separate designated deposit accounts
and are thus not treated as assets of the Company in the financial statements. All income is derived in the
United Kingdom. When there are changes to a tenancy agreement it is considered whether any lease
incentives were given. Lease incentives are amortised over the period of the earliest of the lease termination
date or the tenant lease break option date.
DRAFT
Deferred Income
Deferred Income arises from rents received in advance of the period to which they relate and are treated as
Trade and Other Payables in the Statement of Financial Position. See note 15.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax. Current tax is the expected
tax payable on the taxable income for the year based on the tax rate enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of prior years. Taxable profit differs from
income before taxation because it excludes items of income or expense that are deductible in other years,
and it further excludes items that are never taxable or deductible.
Deferred taxation is the tax expected to be payable or recoverable on differences between the carrying
amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the
computation of taxable profits and is accounted for using the statement of financial position liability method.
Deferred tax liabilities are recognised for all taxable temporary differences (including unrealised gains on
revaluation of investment properties) and deferred tax assets are recognised to the extent that it is probable
that taxable profits will be available against which deductible temporary differences can be utilised.
The Company provides for deferred tax on investment properties by reference to the tax that would be due
on the sale of the investment properties. Deferred tax is calculated at the rates that are expected to apply in
the period when the liability is settled, or the asset is realised. Deferred tax is charged or credited to Income
after Taxation and Total Comprehensive Income, including deferred tax on the revaluation of investment
property.
Trade and Other Accounts Receivable
Trade and other receivables are initially measured at the operating lease measurement value and
subsequently measured at amortised cost as reduced by appropriate allowances for expected credit losses.
All receivables do not carry any interest and are short term in nature.
40
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 25 MARCH 2023
Cash and Cash Equivalents
Cash comprises cash at bank and on demand deposits. Cash equivalents are short term (less than three
months from inception), repayable on demand and are subject to an insignificant risk of change in value.
Trade and Other Accounts Payable
Trade and other payables are initially measured at fair value and subsequently measured at amortised cost.
All trade and other accounts payable are non-interest bearing.
Pensions
Pension contributions towards the employee’s pension plan are charged to the statement of comprehensive
income as incurred. The pension scheme is a defined contribution scheme.
Borrowings
Interest rate borrowings are initially recognised at fair value, being proceeds received less any directly
attributable transaction costs. Borrowings are subsequently stated at amortised cost. Any difference between
the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the
period of the borrowings using the effective interest method. Borrowings are classified as current liabilities
unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after
the reporting date.
Dilapidations
Dilapidations receipts are recognised in the Statement of Comprehensive Income when the right to receive
them arises. They are recorded in revenue as other property income unless a property has been agreed to be
sold whereby the receipt is treated as part of the proceeds of sale of the property. See Note 2.
1.3
Key Sources of Estimation Uncertainty and Judgements
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that may affect the application of accounting policies and the reported amounts of assets and
liabilities, income and expenses.
DRAFT
Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision
affects only that period. The key sources of estimation uncertainty that have a significant risk of causing
material adjustment to the carrying amounts of assets and liabilities within the next financial year are those
relating to the fair value of investment properties which are revalued annually by the Directors having taken
advice from the Company’s independent external valuers, on the basis described in Note 10. A key
judgement taken by the Directors is as to whether a property is being held for sale.
There are no other judgemental areas identified by management that could have a material effect on the
financial statements at the reporting date.
2. PROPERTY INCOME
Rental income
Other property income
2023
£’000
2,304
8
2,312
2022
£’000
2,252
56
2,308
Rental income comprises rents earned and apportioned over the lease period taking into account rent free
periods and rents received during the period. Other property income comprises unexpended dilapidations
and miscellaneous income arising from the letting of properties.
41
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 25 MARCH 2023
3. PROPERTY COSTS
Empty rates
Property management
Legal fees
Agent fees
4. ADMINISTRATIVE COSTS
Rents payable – short term lease
General administration, including staff costs
Auditors’ remuneration – audit fees CLA Evelyn Partners Limited
Tax services – Saffrey Champness
Non-Recurring costs – costs relating to new Board appointments
DRAFT
5. STAFF COSTS
Staff costs, including Directors’ fees, during the year were as follows:
Wages and salaries
Social security costs
Other pension costs
2023
£’000
2
33
35
40
21
96
2023
£’000
6
582
41
9
81
719
2023
£’000
270
36
49
355
2022
£’000
3
65
68
34
23
125
2022
£’000
32
548
31
3
-
614
2022
£’000
289
34
13
336
Further details of Directors’ emoluments, totalling £319,000 (2022: £302,000), are shown under Directors’
Emoluments in the Directors’ Report and form part of these Financial Statements. There are no other key
management personnel.
The average number of employees, including Non-Executive Directors,
engaged wholly in management and administration was:
The number of Directors for whom the Company paid pension benefits
during the year was:
2023
No.
5
1
2022
No.
5
1
42
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 25 MARCH 2023
6. FINANCE COSTS (NET)
Interest payable and finance costs on bank loans
Less: Bank interest receivable
7. TAXATION
(a) Analysis of the tax charge for the year:
UK Corporation tax at 19% (2022: 19%)
Total current tax charge
Deferred tax – temporary differences
Tax charge for the year
(b) Factors affecting the tax charge for the year:
Net Income before taxation
Current Year:
Corporation tax thereon at 19% (2022: 19%)
DRAFT
Corporation tax adjustment for unrealised property value gains
Capital gains net tax movement on disposals
Deferred tax adjustment for change to 25% tax rate (2022: 25%)
Deferred tax net adjustments arising from revaluation of properties
properties
Total tax charge for the year
2023
£’000
439
27
412
2023
£’000
206
82
288
2022
£’000
379
–
379
2022
£’000
293
1,491
1,784
1,430
7,202
272
(65)
–
–
81
288
1,368
–
106
467
(157)
1,784
In the Spring Budget 2021 the UK Government announced that from 1 April 2023 the corporation tax rate
would rise from 19% to 25% on all profits in excess of £250,000. This new law was substantively enacted
on 24 May 2021.
8. DIVIDENDS
Final dividend paid in year of 14.0p per share
(2022: Final dividend 13.0p per share)
Interim dividend paid in year of 9.0p per share
(2022: Interim dividend 8.5p per share)
2023
£’000
378
244
622
2022
£’000
352
231
583
On 13 June 2023 the Board resolved to pay a final dividend of 15p per share which will be recorded in the
Financial Statements for the year ending 25 March 2024.
43
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 25 MARCH 2023
9. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing Income after Taxation and Total Comprehensive Income
attributable to Ordinary Shareholders of £1,142,000 (2022: £5,418,000) by the weighted average number of
2,703,357 (2022: 2,711,617) ordinary shares in issue during the period excluding shares held as treasury.
There are no instruments in issue that would have the effect of diluting earnings per share.
10. INVESTMENT PROPERTIES
Properties
Balance at beginning of financial year
Additions
Disposals
Revaluation Surplus
Balance at end of financial year
2023
£’000
38,975
–
–
345
39,320
2022
£’000
34,005
1,583
(2,500)
5,887
38,975
The Company’s freehold properties were valued as at 25 March 2023 by BNP Paribas Real Estate, Chartered
Surveyors, acting in the capacity of external valuers, and adopted by the Directors. The valuations were
undertaken in accordance with the requirements of IFRS 13 and the RICS Valuation – Global Standards 2020.
The valuation of each property was on the basis of Fair Value. The valuers reported that the total aggregate Fair
DRAFT
Value of the properties held by the Company was £39,320,000.
The valuer’s opinions were primarily derived from comparable recent market transactions on arms-length terms.
In the financial year ending 25 March 2023, the total fees earned by the valuer from Wynnstay Properties PLC
and connected parties were less than 5% of the valuer’s Company turnover.
The valuation complies with International Financial Reporting Standards. The definition adopted by the
International Accounting Standards Board (IASB) in IFRS 13 is Fair Value, defined as: ‘The price that would be
received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at
the measurement date.’
These recurring fair value measurements for non-financial assets use inputs that are not based on observable
market data, and therefore fall within level 3 of the fair value hierarchy.
The most pertinent market data observed reflected net initial yields which ranged from broadly 4.15% to 6.50%,
with equivalent yields estimated to range between broadly 5.50% and 6.75%. The portfolio exhibits a net initial
yield of 5.73% (2022: 5.19%) and a nominal equivalent yield of 6.02% (2022: 5.71%).
There have been no transfers between levels of the fair value hierarchy. Movements in the fair value are
recognised in profit or loss.
A 0.5% decrease in the weighted equivalent yield would result in a corresponding increase of £3.67 million in
the fair value movement through profit or loss. A 0.5% increase in the same yield would result in a corresponding
decrease of £3.09 million in the fair value movement through profit or loss.
44
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 25 MARCH 2023
11. OPERATING LEASES RECEIVABLE
The following are the future minimum lease payments
receivable under non-cancellable operating leases which expire:
Not later than one year
Between 1 and 5 years
Over 5 years
2023
£’000
324
4,368
2,752
7,444
2022
£’000
354
4,753
622
5,729
Rental income under operating leases recognised through profit or loss amounted to £2,304,000 (2022:
£2,252,000).
Typically, the properties were let for a term of between 5 and 10 years at a market rent with rent reviews every
5 years. The above maturity analysis reflects future minimum lease payments receivable to the next break clause
in the operating lease. The properties are generally leased on terms where the tenant has the responsibility for
repairs and running costs for each individual unit with a service charge payable to cover common services
provided by the landlord on certain properties. The Company manages the services provided for a management
fee and the service charges are not recognised as income in the accounts of the Company as any receipts are
netted off against the associated expenditures with any residual balance being shown as a liability.
If the tenant does not carry out its responsibility for repairs and the Company receives a dilapidations payment,
the resulting cash is recorded in revenue as other property income unless a property has been agreed to be sold
where the receipt is treated as part of the proceeds of sale of the property. See Note 2.
DRAFT
12. INVESTMENTS
Quoted investments
13. SUBSIDIARY COMPANY
2023
£’000
3
2022
£’000
3
The Company has the following dormant subsidiary which the Directors consider immaterial to, and thus has
not been consolidated into, the financial statements. The subsidiary holds the legal title to an access road to an
investment property, the use of which is shared between the Company, its tenants at the property and
neighbouring premises.
Scanreach Limited 80% owned Dormant Net Assets: £4,447 (2022: £4,447)
Scanreach Limited 80% owned Dormant Net Assets: £4,437 (2018: £4,437)
45
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 25 MARCH 2023
14. ACCOUNTS RECEIVABLE
Trade receivables
Other receivables
2023
£’000
296
186
482
2022
£’000
215
86
301
Trade receivables include an adjustment for credit losses of £8,000 (2022: £nil). Trade receivables of £nil (2022:
nil) are considered past due, but not impaired. A provision for impairment of trade receivables is established
using an expected loss model.
Trade receivables, which are the only financial assets at amortised cost, are non-interest bearing and generally
have a 15 day term. Due to their short maturities, the carrying amount of trade and other receivables is a
reasonable approximation of their fair value.
Of the trade receivables balance at the end of the year, £180,560 (2022: £188,816) is due from the Company’s
largest customer. There are two other customers who represent more than 5% of the total balance of trade
receivables.
15. ACCOUNTS PAYABLE
Trade payables
Other creditors
Deferred income
Accruals
DRAFT
2023
£’000
39
80
585
140
844
2022
£’000
7
84
535
422
1,048
The average credit period taken for trade purchases is 17 days (2022: 4 days). No interest is charged on the
outstanding balances. The Directors consider that the carrying amounts of trade and other payables is a
reasonable approximation of their fair value.
46
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 25 MARCH 2023
16. BANK LOANS PAYABLE
Non–current loan
2023
£’000
9,951
2022
£’000
9,938
In December 2021, a five-year Fixed Rate Facility of £10 million and a Revolving Credit Facility of £5.0 million
were entered into providing a total committed credit facility of £15.0 million. Interest on loan amounts drawn
down under the Fixed Rate Facility of £10 million (2022: £10 million) is charged at 3.61% per annum (2022:
3.61%) for the year ended 25 March 2023. Loan arrangement fees amortised over the loan period amounted to
£13,000 (2022; £3,250). No loan amounts have been drawn down under the Revolving Credit Facility during
the year and the balance drawn as at 25 March 2023 is £nil (2022: £nil).
Both facilities are repayable in one instalment on 17 December 2026. The facilities include the following
financial covenants which were complied with during the year:
• Rental income shall not be less than 2.25 times the interest costs
• The drawn balance shall at no time exceed 50% of the market value of the properties secured.
The facilities are secured by fixed charges over freehold land and buildings owned by the Company, which at
the year-end had a combined value of £35,885,000 (2022: £35,330,000). The undrawn element of the facilities
available at 25 March 2023 was £5,000,000 (2022: £5,000,000).
Interest charged under the Revolving Credit Facility is linked to Bank of England Base Rate as the reference
rate.
17. DEFERRED TAX
DRAFT
Deferred Tax brought forward
Charge for the year
Deferred Tax carried forward
2023
£’000
1,953
81
2,034
2022
£’000
461
1,492
1,953
A deferred tax liability of £2,024,000 (2022: £1,953,000) is recognised in respect of the investment properties and has
been calculated at a tax rate of 25% (2021: 25%).
18. SHARE CAPITAL
Authorised
8,000,000 Ordinary Shares of 25p each:
Allotted, Called Up and Fully Paid
3,155,267 Ordinary shares of 25p each:
2023
£’000
2022
£’000
2,000
2,000
789
789
All shares rank equally in respect of shareholder rights.
In March 2010, the Company acquired 443,650 Ordinary Shares of Wynnstay Properties PLC from Channel
Hotels and Properties Ltd at a price of £3.50 per share. In September 2022, the Company acquired 15,000
Ordinary Shares of Wynnstay Properties PLC in the market at a price of £7.10 per share, representing less than
0.005 % of the issued share capital, with the aggregate consideration paid for the shares being £106,500. The
total cost of establishing the share buyback authority which lasts for five years, together with this purchase in
the market was £164,000. The total of 458,650 shares acquired, representing 14.5% of the total shares in issue,
are held in treasury. As a result, the total number of shares with voting rights is 2,696,617.
47
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 25 MARCH 2023
19. FINANCIAL INSTRUMENTS
The objective of the Company’s policies is to manage the Company’s financial risk, secure cost-effective
funding for the Company’s operations and minimise the adverse effects of fluctuations in the financial markets
on the value of the Company’s financial assets and liabilities, on reported profitability and on the cash flows of
the Company.
At 25 March 2023 the Company’s financial instruments comprised borrowings, cash and cash equivalents, short
term receivables and short-term payables. The main purpose of these financial instruments was to raise finance
for the Company’s operations. Throughout the period under review, the Company has not traded in any other
financial instruments. The Board reviews and agrees policies for managing each of the associated risks and they
are summarised below:
Credit Risk
The risk of financial loss due to a counterparty’s failure to honour its obligations arises principally in connection
with property leases and the investment of surplus cash.
Tenant rent payments are monitored regularly, and appropriate action is taken to recover monies owed or, if
necessary, to terminate the lease. The Company carefully vets prospective new tenants from a credit risk
perspective. Bad debts are mitigated by close engagement with tenant businesses within a well-diversified mix
of some 83 units across the portfolio and close monitoring of rental income receipts. The Company has regularly
reviewed the portfolio, including feedback from engagement with tenants, in order to assess the risk of tenant
failures.
The Company has no significant concentration of credit risk associated with trading counterparties (considered
to be over 5% of net assets) with exposure spread over a large number of tenancies. In terms of concentration
of individual tenant’s rents versus total gross annual passing rents the Company has 3 tenants whose rent, on an
individual basis, is between 5.1% and 7.6% of total gross annual passing rents.
DRAFT
Funds are invested and loan transactions contracted only with banks and financial institutions with a high credit
rating. Concentration of credit risk exists to the extent that as at 25 March 2023 and 2022 current account and
short–term deposits were held with two financial institutions, Handelsbanken PLC and C Hoare & Co. The
combined exposure to credit risk on cash and cash equivalents at 25 March 2023 was £3,268,000 (2022:
£3,491,000).
Currency Risk
As all of the Company’s assets and liabilities are denominated in Pounds Sterling, there is no exposure to
currency risk.
Interest Rate Risk
The Company is exposed to interest rate risk that could affect cash flow as it currently borrows at both floating
and fixed interest rates. The Company monitors and manages its interest rate exposure on a periodic basis but
does not take out financial instruments to mitigate the risk. The Company finances its operations through a
combination of retained profits and bank borrowings.
Liquidity Risk
The Company seeks to manage liquidity risk to ensure sufficient funds are available to meet the requirements
of the business and to invest cash assets safely and profitably. The Board regularly reviews available cash
balances and cash forecasts to ensure there are sufficient resources for working capital requirements and to
maintain an adequate cash margin.
48
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 25 MARCH 2023
19. FINANCIAL INSTRUMENTS (cont.)
Interest Rate Sensitivity
Financial instruments affected by interest rate risk include loan borrowings and cash deposits. The analysis
below shows the sensitivity of the statement of comprehensive income and equity to a 0.5% change in interest
rates:
Impact on interest payable – gain/(loss)
Impact on interest receivable – (loss)/gain
Total impact on pre-tax profit and equity
0.5% decrease
in interest rates
2022
2023
0.5% increase
in interest rates
2022
2023
£'000
£'000
£'000
£'000
–
(16)
(16)
–
(17)
(17)
–
16
16
–
17
17
The calculation of the net exposure to interest rate fluctuations was based on the following as at 25 March:
Floating rate borrowings (bank loans)
Less: cash and cash equivalents
DRAFT
2023
£'000
–
3,268
3,268
2022
£'000
–
3,491
3,491
Fair Value of Financial Instruments
Except as detailed in the following table, management consider the carrying amounts of financial assets and
financial liabilities recognised at amortised cost approximate to their fair value.
Interest bearing borrowings (note 16)
Total
2023
Book Value
£’000
(9,951)
2023
Fair Value
£’000
(9,951)
2022
Book Value
£’000
(9,938)
2022
Fair Value
£’000
(9,938)
(9,951)
(9,951)
(9,938)
(9,938)
Categories of Financial Instruments
Financial assets:
Quoted investments measured at fair value
Loans and receivables measured at amortised cost
Cash and cash equivalents measured at amortised cost
Total financial assets
Financial liabilities at amortised cost
Total liabilities
49
2023
£’000
3
307
3,268
3,578
2022
£’000
3
215
3,491
3,709
9,951
10,451
10,795
10,986
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 25 MARCH 2023
19. FINANCIAL INSTRUMENTS (cont.)
The only financial instruments measured subsequent to initial recognition at fair value as at 25 March are quoted
investments. These are included in level 1 in the IFRS 13 fair value hierarchy as they are based on quoted prices
in active markets.
Capital Management
The primary objectives of the Company’s capital management are:
•
•
to safeguard the Company’s ability to continue as a going concern, so that it can continue to provide returns
for shareholders: and
to enable the Company to respond quickly to changes in market conditions and to take advantage of
opportunities.
Capital comprises shareholders’ equity plus net borrowings. The Company monitors capital using loan to value
and gearing ratios. The former is calculated by reference to total debt as a percentage of the year end valuation
of the investment property portfolio. Gearing ratio is the percentage of net borrowings divided by shareholders’
equity. Net borrowings comprise total borrowings less cash and cash equivalents. The Company’s policy is that
the net loan to value ratio should not exceed 50% and the gearing ratio should not exceed 100%.
DRAFT
Loans and overdraft
Cash and cash equivalents
Net borrowings
Shareholders’ equity
Investment properties
Loan to value ratio
Net borrowings to value ratio
Gearing ratio
2023
£'000
9,951
(3,268)
6,683
29,936
39,320
25.3%
17.0%
22.3%
2022
£'000
9,938
(3,491)
6,447
29,547
38,975
25.5%
16.5%
21.8%
20. RELATED PARTY TRANSACTIONS
Related Party Transactions with the Directors have been disclosed under Directors’ Emoluments in the Directors’
Report on page 27. There were no other Related Party Transactions during the year (2022: £nil).
50
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 25 MARCH 2023
21. SEGMENTAL REPORTING
The Chief Operating Decision Maker ('CODM'), who is responsible for the allocation of resources and assessing
performance of the operating segments, has been identified as the Board. IFRS 8 requires operating segments to
be identified on the basis of internal reports that are regularly reviewed by the Board. The Board have reviewed
segmental information and concluded that there are three operating segments.
Industrial
Retail
Office
Total
2023
2022
2023
2022
2023
2022
2023
2022
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
2,095
1,884
8
56
73
–
200
5,872
(105)
68
–
40
136
300
2,304
2,252
–
250
–
(25)
8
345
56
5,887
Rental Income
Other Property Income
Profit /(Loss) on
investment property at fair
value
Total income and gain
2,303
7,812
(32)
108
386
275
2,657
8,195
Property expenses
(95)
(125)
–
–
–
–
(95)
(125)
Segment profit/(loss)
2,208
7,687
(32)
108
386
275
2,562
8,070
DRAFT
Unallocated corporate
expenses
Profit on sale of
investment property
Operating income
Interest expense (all
relating to property loans)
Interest income and
other income
Income before taxation
(720)
(614)
–
125
1,842
7,581
(439)
(379)
27
–
1,430
7,202
Other information
Industrial
Retail
Office
Total
2023
2022
2023
2022
2023
2022
2023
2022
£’000
£’000
£’000 £’000
£’000
£’000
£’000
£’000
Segment assets
36,855 36,655
905 1,010
1,560
1,310
39,320
38,975
Segment assets held
as security
33,420 33,010
905 1,010 1,560 1,310 35,885 35,330
51
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 25 MARCH 2023
22. CAPITAL COMMITMENTS
Significant capital expenditure contracted for at the end of the financial year, but not recognised as liabilities in
the financial statements is: £nil (2022: £nil).
23. SUBSEQUENT EVENTS
On 9 May 2023 the Company acquired Riverdale Industrial Estate, Tonbridge for £2.35m before costs. The
Property is freehold and comprises five industrial units arranged as two terraces with a central service yard. The
estate is fully let to four tenants with a range of lease expiry dates. The current passing rent totals £140,350 per
annum and is subject to three outstanding upward only rent reviews effective from 29 September 2022 and a
pending lease expiry on 30 November 2023. The total acquisition cost of approximately £2.5 million, which
includes stamp duty and other acquisition costs, was funded entirely from the Company’s existing cash
resources.
DRAFT
52
WYNNSTAY PROPERTIES PLC
FIVE YEAR FINANCIAL REVIEW
Year Ended 25 March:
2023
£’000
2022
£’000
2021
£’000
2020
£’000
2019
£’000
STATEMENT OF COMPREHENSIVE INCOME
Property Income
Net Property Income
Operating Income
Income before Taxation
Income after Taxation and Total
Comprehensive Income
2,312
1,497
1,842
1,430
1,142
2,308
1,569
7,591
7,202
5,418
2,438
1,590
4,459
4,048
3,653
2,271
1,583
686
258
123
2,216
1,591
2,642
2,247
1,928
STATEMENT OF FINANCIAL POSITION
Investment Properties
Equity Shareholders’ Funds
39,320
29,936
38,975
29,547
34,005
24,712
34,260
21,478
35,095
21,883
PER SHARE
Basic earnings
Dividends Paid and Proposed
Net Asset Value
42.2p
24.0p
1,110p
199.8p
134.7p
DRAFT
22.5p
1,090p
21.0p
911p
4.5p
15.0p
792p
71.1p
19.0p
807p
53
WYNNSTAY PROPERTIES PLC
NOTICE OF MEETING
We again welcome our shareholders to the AGM this year. All shareholders are encouraged to exercise their voting
rights in relation to the resolutions set out in the Notice of Meeting below by appointing either the Chairman of the
meeting or another person as their proxy. A form of proxy is enclosed on which there are notes for completion.
Shareholders intending to attend the meeting in person should tick the box on the proxy form.
Shareholders attending the meeting will be required to comply with the requirements of The Royal Automobile
Club for entry, including with its dress code which can be found at https://www.royalautomobileclub.co.uk/pall-
mall/visiting-pall-mall/pall-mall-dress-code/
Shareholders who have registered for Link services online can also benefit from the ability to cast their proxy votes
electronically, rather than by post. Shareholders not already registered for Link services online will need their
investor code, which can be found on their share certificate or dividend tax voucher, in order to register.
If you need help with voting online, please contact our Registrars, Link Group on Tel: 0371 664 0391. Calls are
charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be
charged at the applicable international rate. Lines are open between 09:00 – 17:30, Monday to Friday (excluding
at
public
shareholderenquiries@linkgroup.co.uk
and Wales). You
in England
holidays
contact
email
them
also
can
by
NOTICE IS HEREBY GIVEN that the One-Hundred and Thirty-Seventh ANNUAL GENERAL MEETING of
the Members of Wynnstay Properties PLC will be held at 2.30pm on Tuesday 18 July 2023 at the Royal Automobile
Club, 89 Pall Mall, London SW1Y 5HS. The business of the meeting will be to consider and, if thought fit, to pass
the following ordinary and special resolutions.
ORDINARY RESOLUTIONS
DRAFT
1 To receive the Report of the Directors and the Financial Statements for the year ended 25 March 2023.
2 To declare a final dividend for the year ended 25 March 2023 of 15 pence per ordinary share.
3 To fix the remuneration of the Directors.
4 To appoint CLA Evelyn Partners Limited as auditors of the Company, to hold office from the conclusion of
the annual general meeting until the conclusion of the next annual general meeting of the Company and to
authorise the Directors to determine their remuneration.
5 To re-elect Miss C.M. Tolhurst as a Director of the Company, who retires and offers herself for re-election.
6 To elect Mr. H.M. Ford as a Director of the Company.
7 To elect Mr. R.P. Owen as a Director of the Company.
8 That the Directors of the Company are generally and unconditionally authorised for the purposes of section
551 of the Companies Act 2006 (the “Act”), in substitution for all previous authorisations, to exercise all the
powers of the Company to allot shares in the Company and to grant rights to subscribe for or convert any
security into shares in the Company (“Rights”) up to an aggregate nominal amount of £39,440.75, and this
authorisation shall, unless previously revoked by resolution of the Company, expire on 31 December 2024 or,
if earlier, at the conclusion of the annual general meeting of the Company to be held in 2024. The Company
may, at any time before such expiry, make offers or enter into agreements which would or might require shares
to be allotted or Rights to be granted after such expiry and the Directors may allot shares or grant Rights in
pursuance of any such offer or agreement as if this authorisation had not expired.
SPECIAL RESOLUTION
9 That the Directors of the Company are empowered (i) pursuant to section 570 of the Act to allot equity
securities (within the meaning of section 560 of the Act) for cash pursuant to the authorisation conferred by
Resolution 7 above and (ii) pursuant to section 573 of the Act to allot equity securities (within the meaning of
section 560(3) of the Act), in each case as if section 561 of the Act did not apply to the allotment, provided
that this power shall be limited to:
(a) the allotment of equity securities in connection with an offer of, or invitation to apply for, equity securities
made (i) to holders of ordinary shares in the Company in proportion (as nearly as many as practicable) to
54
the respective number of ordinary shares held by them on the record date for such offer and (ii) to holders
of other equity securities as may be required by the rights attached to those securities or, if the Directors
consider it desirable, as may be permitted by such rights, but subject in each case to such exclusions or
other arrangements as the Directors may deem necessary or expedient in relation to treasury shares,
fractional entitlements, record dates or legal or practical problems in or under the laws of any territory or
the requirements of any regulatory body or stock exchange; and
(b) the allotment (otherwise than pursuant to paragraph (a) above) of further equity securities up to any
aggregate nominal amount of £39,440.75,
and this power shall, unless previously revoked by resolution of the Company, expire on 31 December 2024
or, if earlier, at the conclusion of the annual general meeting of the Company to be held in 2024. The Company
may, at any time before the expiry of this power, make offers or enter into agreements which would or might
require equity securities to be allotted after such expiry and the Directors may allot equity securities in
pursuance of any such offer or agreement as if this power had not expired.
Registered Office:
Hamilton House
Mabledon Place
London WC1H 9BB
By Order of the Board,
Susan Wallace
Secretary
13 June 2023
DRAFT
55
Notes to the Notice of Annual General Meeting
1.
2.
3.
4.
5.
6.
7.
8.
9.
Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only
those shareholders registered in the relevant register of securities by close of business on 14 July 2023 or, in
the event that the Annual General Meeting is adjourned, in the relevant register of securities 48 hours
(disregarding any non-working days) before the time of any adjourned meeting shall be entitled to attend and
vote in respect of the number of Ordinary Shares registered in their name at the relevant time. Changes to
entries in the relevant register of securities after close of business on 14 July 2023 or, in the event that the
Annual General Meeting is adjourned, less than 48 hours (disregarding any days which are non-working
days) before the time of any adjourned meeting, shall be disregarded in determining the rights of any person
to attend or vote at the Annual General Meeting.
If you are a member of the Company at the time set out in note 1 above, you are entitled to appoint a proxy
to exercise all or any of your rights to attend, speak and vote at the Annual General Meeting and you should
have received a proxy form with this notice of meeting. You can only appoint a proxy using the procedures
set out in these notes and the notes to the proxy form.
To appoint a proxy using the proxy form, the form must be completed and signed and returned to the
Company’s registrars, Link Group, at PXS 1, Central Square, 29 Wellington Street, Leeds, LS1 4DL so as to
be received not later than 48 hours before the time appointed for holding the Annual General Meeting.
Alternatively, a shareholder may appoint a proxy online by following the instructions for the electronic
appointment of a proxy at: www.signalshares.com. To be a valid proxy appointment, the shareholder’s
electronic message confirming the details of the appointment completed in accordance with those instructions
must be transmitted so as to be received by no later than 48 hours before the time fixed for holding the
adjourned meeting.
CREST members who wish to appoint one or more proxies through the CREST system may do so by using
the procedures described in “the CREST voting service” section of the CREST Manual. CREST personal
members or other CREST sponsored members, and those CREST members who have appointed one or more
voting service providers, should refer to their CREST sponsor or voting service provider(s), who will be able
to take the appropriate action on their behalf.
DRAFT
In order for a proxy appointment or a proxy instruction made using the CREST voting service to be valid,
the appropriate CREST message (CREST proxy appointment instruction) must be properly authenticated in
accordance with the specifications of CREST’s operator, Euroclear UK & International Limited (Euroclear),
and must contain all the relevant information required by the CREST Manual. To be valid, the message
(regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given
to a previously appointed proxy) must be transmitted so as to be received by Link Group (ID RA10), as the
Company’s “issuer’s agent”, by 2.30 p.m. on 14 July 2023. After this time any change of instruction to a
proxy appointed through the CREST system should be communicated to the appointee through other means.
The time of receipt of the message will be taken to be when (as determined by the timestamp applied by the
CREST Applications Host) the issuer’s agent is first able to retrieve it by enquiry through the CREST system
in the prescribed manner. Euroclear does not make available special procedures in the CREST system for
transmitting any particular message. Normal system timings and limitations apply in relation to the input of
CREST proxy appointment instructions.
It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST
personal member or a CREST sponsored member or has appointed any voting service provider(s), to procure
that his CREST sponsor or voting service provider(s) take(s)) such action as is necessary to ensure that a
message is transmitted by means of the CREST system by any particular time. CREST members and, where
applicable, their CREST sponsors or voting service providers should take into account the provisions of the
CREST Manual concerning timings as well as its section on “Practical limitations of the system”. In certain
circumstances the Company may, in accordance with the Uncertificated Securities Regulations 2001 or the
CREST Manual, treat a CREST proxy appointment instruction as invalid.
A proxy does not need to be a member of the Company but must attend the Annual General Meeting to
represent you. Details of how to appoint the chairman of the meeting or another person as your proxy using
the proxy form are set out in the notes to the proxy form.
You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to
different shares. You may not appoint more than one proxy to exercise rights attached to any one share.
56
10.
11.
12.
13.
14.
15.
The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold
their vote.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the
appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in
which the names of the joint holders appear in the Company’s register of members in respect of the joint
holding (the first-named being the most senior).
Appointment of a proxy does not preclude you from attending the Annual General Meeting and voting in
person. If you have appointed a proxy and attend the Annual General Meeting in person, your proxy
appointment will automatically be terminated.
To change your proxy instructions simply submit a new proxy appointment using the methods set out above.
Note that the cut off time for receipt of proxy appointments (see above) also applies in relation to amended
instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded.
If you submit more than one valid proxy appointment, the appointment received last before the latest time
for the receipt of proxies will take precedence.
In order to facilitate voting by corporate representatives at the Annual General Meeting, arrangements will
be put in place at the Annual General Meeting so that:
15.1. Where a corporate shareholder has appointed one or more corporate representatives (other than the
chairman of the Annual General Meeting) then:
15.1.1 on a vote on a resolution on a show of hands, each such corporate representative has the same
voting rights as the corporation would be entitled to; but
15.1.2 in respect of any purported exercise of power other than on a vote on a resolution on a show
of hands, where more than one corporate representative purports to exercise such power in
respect of the same shares, if they purport to exercise the power in the same way as each other,
the power is treated as exercised in that way but if they do not purport to exercise the power in
the same way as each other, the power is treated as not exercised.
DRAFT
16. As at 12 June 2023 (being the last practicable date prior to the publication of this notice), the Company’s
issued share capital consisted of 3,155,267 Ordinary Shares, carrying one vote per share, of which 458,650
shares are held by the Company in treasury. Therefore, the total voting rights in the Company as at 12 June
2023 were 2,696,617.
57
WYNNSTAY PROPERTIES PLC
BIOGRAPHIES OF THE DIRECTORS
Philip G.H. Collins (Non-Executive Chairman) aged 75, is a Solicitor and was Chairman of the Office of Fair
Trading from 2005 to 2014. He was formerly a partner in an international firm based in the City where he specialised
in E.U. law, with particular emphasis on competition issues. Previously, after practising for some years in the
corporate and commercial field, he was seconded for a period to work as Chief Legal Adviser in an industrial group.
Appointed a Director of Wynnstay Properties in 1988 and elected Chairman in October 1998.
Paul Williams (Managing Director) aged 65 is a Chartered Surveyor and holds a Degree in Land Management as
well as an MBA. He has spent his entire career in commercial property including a fourteen-year period with MEPC
where he held a number of senior positions. Paul has also worked for Lloyds TSB, Legal & General, GE Pensions
and Credit Suisse Asset Management and joined Wynnstay Properties as Managing Director in February 2006.
Charles H. Delevingne (Non-Executive Director) aged 72. After spending his early career as a partner with
prominent estate agencies, in 1981 he founded Harvey White Properties Limited, a substantial private commercial
property investment company. Appointed a Director of Wynnstay Properties in June 2002, and resigned on 25 March
2023.
Hugh Ford (Non-Executive Director) aged 56 is a Solicitor with over 25 years’ experience working for listed and
major private companies, including in the commercial real estate sector. He was the general counsel of intu
properties plc from 2003 to 2021, and from 2015 also its group treasurer. Prior to that, he worked for Virgin Atlantic
Airways and British Airways, having qualified as a solicitor and practiced for a number of years with the City law
firm, Freshfields. He is also a non-executive director of Hertfordshire Catering Ltd and a trustee and director of
Beechwood Park School. Appointed a director of Wynnstay Properties in March 2023
Paul Mather (Non-Executive Director) aged 68 is a Chartered Surveyor who has spent his career focused on active
asset management of commercial portfolios and developments in central London. He was a senior director at BNP
Paribas Real Estate for 13 years and group portfolio manager for Greycoat PLC for 17 years. Appointed a director
DRAFT
of Wynnstay Properties in March 2017.
Ross Owen (Non-Executive Director) aged 58 is a Chartered Surveyor and has worked in investment management
for over 25 years. He was previously an equity partner at Cluttons LLP where he was head of investment and fund
management and later became Chairman of Lambert Smith Hampton Investment Management, to which he remains
a consultant. Ross is principal property investment adviser to University College, Oxford and is a member of the
College’s investment committee. He is a co-opted member of the investment committee of the Royal Borough of
Kensington and Chelsea pension fund and a member of the estate and property committee of John Lyon’s Charity.
He is also a trustee and director of the Cowes Town Waterfront Trust. Appointed a director of Wynnstay Properties
in March 2023.
Caroline Tolhurst (Non-Executive and Senior Independent Director) aged 61, is a Chartered Surveyor and a
Chartered Governance Professional with more than 30 years’ experience in property and investment sectors. She
was Company Secretary at Grosvenor Limited and NewRiver Retail Limited and compliance officer for Knight
Frank LLP’s regulated businesses. She is also a Board member and Committee Chair at LocatED Property Limited
and until 30 April 2023 was in similar roles at A2Dominion Housing Group Limited. Appointed a director of
Wynnstay Properties in March 2017.
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