TIDM75TW
RNS Number : 2109A
Annington Funding PLC
25 September 2020
Annington Funding plc today announces its financial results for
the period ended 31 March 2020.
A copy is available from Annington's website and are available
for viewing. To view the full document, please see below or paste
the following URL into the address bar of your browser:
https://www.annington.co.uk/investor-relations/announcements
For further information please contact:
Andrew Chadd
Chief Financial Officer
T: 020 7960 7500
ANNINGTON FUNDING PLC
Annual Report and Financial Statements
For the year ended 31 March 2020
STRATEGIC REPORT
The principal activity of Annington Funding plc ("the Company")
during the year was the financing of the Annington Limited group
("the Group") via an intercompany loan to Annington Homes Limited
("AHL").
BUSINESS REVIEW
The company was incorporated on 11 May 2017. In July 2017 the
Company issued c.GBP3.0 billion of corporate, unsecured bonds, in
both euros and pound sterling. In addition, a term loan totalling
GBP400 million was drawn down. The Company then entered into an
agreement to lend GBP3.4 billion to AHL, which in turn provides
this funding to the rest of the Group.
On 26 March 2020, an agreement to amend the terms of the GBP400
million unsecured term loan was entered into. The maturity of the
term loan and the revolving credit facility is now extended to
March 2025, from July 2022, whilst the undrawn revolving credit
facility is reduced to GBP100 million. This agreement became
effective on 1 April 2020, with the modifications applicable from
that date.
The Company recovers its costs through interest received on the
intercompany loan, at an interest rate that is mutually agreed. It
also charges an administration fee for its services.
The Company's result for the year after taxation is a profit of
GBP0.01 million (2019: GBP0.01 million) and had net assets of
GBP0.3 million at 31 March 2020 (2019: GBP4.7 million). The
directors consider these measures as key indicators of the
Company's performance.
Principal risks and uncertainties
The areas of potential risks and uncertainty which face the
business are mainly related to its financial risks (credit risk,
liquidity risk, currency risk and interest rate risk). For details
of financial instruments, their related risks and the policies and
actions put in place to manage them, please refer to Note 14 to the
financial statements.
The Company also has a number of covenants that need to be
complied with under the terms of the debt issued. These are
discussed in more detail in Note 11 to the financial statements, as
well as Note 2, under "Going concern".
Statement on s172 of the Companies Act 2006
The directors consider section 172(1) factors, including the
company's business relationships with finance providers, credit
rating agencies and with AHL and the Group. The directors believe
that maintaining strong relationships with lenders, including
bondholders and banks, and with ratings agencies to be essential to
the effective running of the company. The Company seeks to achieve
this though transparent reporting and provision of information to
all stakeholders. Beyond regular financial reporting, the company,
in association with the Group, provide conference calls on at least
an annual basis to update stakeholders. To maintain the
relationship with ratings agencies, the directors meet with these
bodies to enable the provision of ratings services. The directors
are also directors of AHL and Annington Limited, enabling good
relationships to be maintained. The Group considers wider groups of
stakeholders and a broader section 172(1) statement is disclosed in
the financial statements of Annington Limited for the year ended 31
March 2020.
FUTURE DEVELOPMENTS
The economic impact of Britain exiting the European Union is
still subject to a high degree of uncertainty. The Company has on
issue fixed interest bonds and has hedged its exposure to currency
fluctuations on its foreign currency bonds, leading to highly
predictable future cash flows on the listed debt. These factors
serve to mitigate any risks arising from Brexit.
The immediate impact of COVID-19 is not likely to have any
significant effect on the Company given the nature of its
operations, however, the fuller impact on the economy as a whole
remains to be seen. These could impact the Company in terms of
interest rate fluctuations and hence cash flows. Interest rate
sensitivities are provided in Note 14 to the financial statements
to illustrate possible effects.
Future developments and other factors not under the control of
the Company may impact the ongoing operations of the business,
however, the directors expect the business to continue, for the
foreseeable future, in a manner consistent with its historical
operations.
Approved by the Board of Directors and signed on behalf of the
Board
A P Chadd
Director
25 September 2020
REGISTERED OFFICE
1 James Street
London, United Kingdom,
W1U 1DR
DIRECTORS' REPORT
The directors present their annual report and the audited
financial statements for the year ended 31 March 2020.
Directors
The directors who served throughout the year and to the date of
this report were:
J C Hopkins
N P Vaughan
A P Chadd
Audit Committee
The function of the Audit Committee of the Company is carried
out by the Audit Committee of the Annington Limited Group. The
Audit Committee includes at least two independent, non-executive
directors and two non-executive director appointed by Terra Firma
Capital Partners Limited.
Dividends
No dividends have been paid or proposed during the year (2019:
GBPnil).
Going concern
After making enquiries the directors have a reasonable
expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. Accordingly, they
continue to adopt the going concern basis in preparing the
financial statements.
Further details regarding the adoption of the going concern
basis are to be found in Note 2 to the financial statements.
Financial instruments and risk management policies
Financial instruments and risk management policies are addressed
in Note 14.
Internal control and risk management systems over financial
reporting
The Company has put in place systems and controls to ensure that
data integrity is maintained throughout the financial reporting
process. These include data access controls and backups and reviews
of financial data and reports by suitably qualified
individuals.
Strategic report
The areas of potential risks and uncertainty which face the
business, details of its financing and its future outlook are
addressed in the Strategic Report, as well as an indication of
likely future developments and activities in the business.
Directors' indemnities
Qualifying third party indemnity provisions are in place for all
directors of the Company for the current and preceding year.
Greenhouse gas reporting
The Company, as a member of the Annington Limited Group, is
included within the Group's reporting of greenhouse gas data, as
disclosed within Annington Limited's Directors' Report for 31 March
2020.
Auditor
Each of the persons who is a director at the date of approval of
this annual report confirms that:
-- so far as the director is aware, there is no relevant audit
information of which the Company's auditor is unaware; and
-- the director has taken all the steps that he ought to have
taken as a director to make himself aware of any relevant audit
information and to establish that the Company's auditor is aware of
that information.
This confirmation is given and should be interpreted in
accordance with the provisions of s418 of the Companies Act
2006.
KPMG LLP were appointed as auditor and have expressed their
willingness to continue in office as auditor. Arrangements have
been put in place for them to be reappointed as auditor in the
absence of an Annual General Meeting.
Approved by the Board of Directors and signed on behalf of the
Board
A P Chadd
Director
25 September 2020
REGISTERED OFFICE
1 James Street
London, United Kingdom
W1U 1DR
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the annual report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law, the directors
have elected to prepare the Company financial statements in
accordance with International Financial Reporting Standards
("IFRSs") as adopted by the European Union. Under company law, the
directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Company and of the profit or loss of the Company for
that year.
In preparing these financial statements, International
Accounting Standard 1 requires that directors:
-- properly select and apply accounting policies;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- provide additional disclosures when compliance with the
specific requirements in IFRSs are insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial
performance; and
-- make an assessment of the Company's ability to continue as a going concern.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
company's website. Legislation in the UK governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF ANNINGTON FUNDING
PLC
1 Our opinion is unmodified
We have audited the financial statements of Annington Funding
Plc ("the Company") for the year ended 31 March 2020 which comprise
the Income statement, Statement of Comprehensive Income, Balance
Sheet, Statement of Changes in Equity, Cash Flow Statement and the
related Notes, including the accounting policies in Note 2.
In our opinion the financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 31 March 2020 and of its profit for the year then
ended;
-- have been properly prepared in accordance with International
Financial Reporting Standards as adopted by the European Union
(IFRSs as adopted by the EU);
-- have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our
responsibilities are described below. We believe that the audit
evidence we have obtained is a sufficient and appropriate basis for
our opinion. Our audit opinion is consistent with our report to the
board of directors.
We were first appointed as auditor by the directors on 10 July
2018. The period of total uninterrupted engagement is for the three
financial years ended 31 March 2020. We have fulfilled our ethical
responsibilities under, and we remain independent of the Company in
accordance with, UK ethical requirements including the FRC Ethical
Standard as applied to listed public interest entities. No
non-audit services prohibited by that standard were provided.
2 Key audit matters: our assessment of risks of material
misstatement
Key audit matters are those matters that, in our professional
judgment, were of most significance in the audit of the financial
statements and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by
us, 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. We summarise below
the key audit matter in arriving at our audit opinion above,
together with our key audit procedures to address that matter and,
as required for public interest entities, our results from those
procedures. This matter was addressed, and our results are based on
procedures undertaken, in the context of, and solely for the
purpose of, our audit of the financial statements as a whole, and
in forming our opinion thereon, and consequently are incidental to
that opinion, and we do not provide a separate opinion on this
matter.
The risk Our response
Disclosures for loans Disclosure quality
and borrowings (GBP3,385m) The Company has loans Our procedures included:
Refer to pages 19-20 and borrowings held -Test of detail: We
for accounting policy at amortised cost obtained external
and disclosure. of GBP3,385m in the confirmation of the
balance sheet. Loans notional amount, interest
and borrowings includes rate and expiry date
four bonds totalling of the term loan.
GBP2,475m, a EUR600m We agreed the same
bond, and a GBP400m terms for the bonds
term loan. Each bond to the stock exchange's
and loan has its own records.
interest rate and -Reperformance: We
expiration date. recalculated quantitative
The notes to the financial disclosures relating
statements include to future cash flows
quantitative disclosures on the loans and borrowings,
regarding the loans agreeing inputs to
and borrowings. This the external confirmations.
includes an assessment -Reperformance: To
of their fair value assess the fair value
which is made by reference disclosure we engaged
to an external valuation. our internal specialists
The disclosures for who performed an independent
loans and borrowings valuation of the bonds.
is not at a high risk Our results
of significant misstatement -We considered the
or subject to significant disclosures for loans
judgement. However, and borrowings to
due to their materiality be acceptable.
in the context of
the Company financial
statements, this is
considered to be the
area that had the
greatest effect on
our overall audit.
----------------------------- -------------------------------
2 Key audit matters: our assessment of risks of material
misstatement (continued)
We continue to perform procedures over the accounting and
valuation of derivative. However, as there have not been any
changes to the hedging instruments or hedging relationship since
the prior year, we have not assessed this as one of the most
significant risks in our current year audit and, therefore, it is
not separately identified in our report this year.
3 Our application of materiality and an overview of the scope of
our audit
Materiality for the Company financial statements as a whole was
set at GBP34.0million (2019: GBP33.8million), determined with
reference to a benchmark of total assets, of which it represents 1%
(2019: 1%).
In addition, we applied materiality of GBP3.0million (2019:
GBP3.0million) to Finance income and Finance costs for which we
believe misstatements of a lesser amounts than materiality for the
financial statements as a whole could be reasonably expected to
influence the Company's member's assessment of the financial
performance of the Company.
We agreed with the Directors that we would report to them
misstatements identified during our audit above GBP1.7million
(2019: GBP1.7million) or GBP150,000 (2019: GBP150,000) for
misstatements impacting Finance income or Finance costs, as well as
misstatements below those amounts that, in our view, warranted
reporting for qualitative reasons.
Our audit of the Company was undertaken to the materiality
levels specified above and was performed by a single audit
team.
4 We have nothing to report on going concern
The Directors have prepared the financial statements on the
going concern basis as they do not intend to liquidate the Company
or to cease its operations, and as they have concluded that the
Company's financial position means that this is realistic. They
have also concluded that there are no material uncertainties that
could have cast significant doubt over their ability to continue as
a going concern for at least a year from the date of approval of
the financial statements ("the going concern period").
Our responsibility is to conclude on the appropriateness of the
Directors' conclusions and, had there been a material uncertainty
related to going concern, to make reference to that in this audit
report. However, as we cannot predict all future events or
conditions and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time they
were made, the absence of reference to a material uncertainty in
this auditor's report is not a guarantee that the company will
continue in operation.
In our evaluation of the Directors' conclusions, we considered
the inherent risks to the Company's business model and analysed how
those risks might affect the Company's financial resources or
ability to continue operations over the going concern period. The
risks that we considered most likely to adversely affect the
Company's available financial resources over this period were falls
in the valuation of real estate held by, or rental income generated
by, the group headed by Annington Limited which are measures
relevant to financial covenants included in the Company's
borrowings.
As this was a risk that could potentially cast significant doubt
on the Company's ability to continue as a going concern, we
considered sensitivities over these measures indicated by the
Company's financial forecasts taking account of reasonably possible
(but not unrealistic) adverse effects that could arise from this
risk and evaluated the achievability of the actions the Directors
consider they would take to improve the position should the risks
materialise..
Based on this work, we are required to report to you if we have
concluded that the use of the going concern basis of accounting is
inappropriate or there is an undisclosed material uncertainty that
may cast significant doubt over the use of that basis for a period
of at least a year from the date of approval of the financial
statements.
We have nothing to report in these respects, and we did not
identify going concern as a key audit matter.
5 We have nothing to report on the other information in the
Annual Report
The directors are responsible for the other information
presented in the Annual Report together with the financial
statements. Our opinion on the financial statements does not cover
the other information and, accordingly, we do not express an audit
opinion or, except as explicitly stated below, any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether, based on our financial statements audit
work, the information therein is materially misstated or
inconsistent with the financial statements or our audit knowledge.
Based solely on that work we have not identified material
misstatements in the other information.
Strategic report and directors' report
Based solely on our work on the other information:
-- we have not identified material misstatements in the
strategic report and the directors' report;
-- in our opinion the information given in those reports for the
financial year is consistent with the financial statements; and
-- in our opinion those reports have been prepared in accordance with the Companies Act 2006.
6 We have nothing to report on the other matters on which we are
required to report by exception
Under the Companies Act 2006, we are required to report to you
if, in our opinion:
-- adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent Company 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.
We have nothing to report in these respects.
7 Respective responsibilities
Directors' responsibilities
As explained more fully in their statement set out on page 3,
the Directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair
view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error; 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 they either intend to liquidate
the Company or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities
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 other irregularities (see
below), or error, and to issue our opinion in an auditor's report.
Reasonable assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements
can arise from fraud, other irregularities or error and are
considered material if, individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the
FRC's website at www.frc.org.uk/auditorresponsibilities.
Irregularities - ability to detect
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the financial
statements from our general commercial and sector experience and
through discussion with the directors (as required by auditing
standards) and discussed with the directors the policies and
procedures regarding compliance with laws and regulations. We
communicated identified laws and regulations throughout our team
and remained alert to any indications of non-compliance throughout
the audit.
The potential effect of these laws and regulations on the
financial statements varies considerably.
The Company is subject to laws and regulations that directly
affect the financial statements including financial reporting
legislation (including related companies legislation),
distributable profits legislation and taxation legislation and we
assessed the extent of compliance with these laws and regulations
as part of our procedures on the related financial statement
items.
Whilst the Company is subject to many other laws and
regulations, we did not identify any others where the consequences
of non-compliance alone could have a material effect on amounts or
disclosures in the financial statements.
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have
properly planned and performed our audit in accordance with
auditing standards. For example, the further removed non-compliance
with laws and regulations (irregularities) is from the events and
transactions reflected in the financial statements, the less likely
the inherently limited procedures required by auditing standards
would identify it. In addition, as with any audit, there remained a
higher risk of non-detection of irregularities, as these may
involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls. We are
not responsible for preventing non-compliance and cannot be
expected to detect non-compliance with all laws and
regulations.
8 The purpose of our audit work and to whom we owe our
responsibilities
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.
Richard Long (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London,
E14 5GL
25 September 2020
INCOME STATEMENT
For the year ended 31 March 2020
2020 2019
Note GBP'000 GBP'000
Finance income 6 110,919 110,712
Finance costs 6 (110,909) (110,702)
Profit before taxation 10 10
Taxation 7 - -
Profit for the year 10 10
Profit attributable to shareholder 10 10
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2020
2020 2019
Note GBP'000 GBP'000
Profit for the year 10 10
Items that may subsequently be recycled
through the income statement
Cash flow hedge:
Fair value gains/(losses) on cash flow
hedge 13 9,270 (8,206)
Reclassification of fair value (losses)/gains
included in profit and loss 6 (13,628) 8,834
Total other comprehensive (loss)/income (4,358) 628
Total comprehensive (loss)/income for the
year (4,348) 638
Total comprehensive (loss)/income attributable
to shareholder (4,348) 638
The accompanying Notes (1 to 18) should be read in conjunction
with these financial statements.
BALANCE SHEET
At 31 March 2020
2020 2019
Note GBP'000 GBP'000
Non-current assets
Receivables 8 3,374,690 3,380,570
Derivative financial instruments 13 4,623 -
3,379,313 3,380,570
Current assets
Receivables 8 26,335 26,194
Cash and cash equivalents 9 8,546 113
34,881 26,307
Total assets 3,414,194 3,406,877
Current liabilities
Payables 10 (28,760) (26,492)
Net current assets/(liabilities) 6,121 (185)
Total assets less current liabilities 3,385,434 3,380,385
Non-current liabilities
Derivative financial instruments 13 - (4,647)
Loans and borrowings 11 (3,385,121) (3,371,077)
Total liabilities (3,413,881) (3,402,216)
Net assets 313 4,661
Capital and reserves
Share capital 12 50 50
Hedging reserve (3,231) 1,127
Retained earnings 3,494 3,484
Total equity 313 4,661
The accompanying Notes (1 to 18) should be read in conjunction
with these financial statements. The annual financial statements of
Annington Funding plc, registered number 10765119, were authorised
for issue on 25 September 2020.
Signed on behalf of the Board of Directors
A P Chadd
Director
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2020
Hedging Retained
Share capital reserve earnings Total equity
GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2018 50 499 3,474 4,023
Profit for the year - - 10 10
Other comprehensive income
for the year - 628 - 628
Balance at 31 March 2019 50 1,127 3,484 4,661
Profit for the year - - 10 10
Other comprehensive loss for
the year - (4,358) - (4,358)
Balance at 31 March 2020 50 (3,231) 3,494 313
The accompanying Notes (1 to 18) should be read in conjunction
with these financial statements.
CASH FLOW STATEMENT Note 2020 2019
For the year ended 31 March 2020 GBP'000 GBP'000
Cash generated/(utilised) in operations 15 9 (15)
Interest received from group undertakings 116,798 103,518
Interest paid (108,329) (108,000)
Net cash inflow/(outflow) from operating activities 8,478 (4,497)
Investing activities
Loans to group undertakings - (280)
Net cash outflow from investing activities - (280)
Financing activities
Loans repaid to group undertakings - (1,124)
Net cash outflow from financing activities - (1,124)
Net increase/(decrease) in cash and cash equivalents 8,478 (5,901)
Cash and cash equivalents at the beginning of the year 113 6,014
Effect of exchange differences on cash and cash equivalents (45) -
Cash and cash equivalents at the end of the year 9 8,546 113
The accompanying Notes (1 to 18) should be read in conjunction
with these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2020
1. CORPORATE INFORMATION
Annington Funding plc ("the Company") is a company incorporated
in the United Kingdom under the Companies Act 2006.
The Company is a private company limited by shares and is
registered in England and Wales. The address of its registered
office is 1 James Street, London W1U 1DR. Information on the
Company's ultimate parent is presented in Note 18.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The financial statements have been prepared in accordance with
the International Financial Reporting Standards ("IFRS") and
interpretations as adopted by the European Union. They have been
prepared in accordance with the Companies Act 2006.
The financial statements are presented in pound sterling, which
is the functional currency of the Company. All values are rounded
to the nearest thousand (GBP'000), except where otherwise
indicated. They have been prepared on the historical cost basis,
except for derivative financial instruments that are measured at
fair value at the end of each reporting period, as explained in the
accounting policy below. Historical cost is generally based on the
fair value of the consideration given in exchange for goods and
services.
Going concern
The Company's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Strategic Report and the Directors' Report,
which describe the financial position of the Company; its
objectives, policies and process for managing its capital; its
financial risk management objectives and details of its financial
instruments.
In July 2017 the Company issued five tranches totalling c.GBP3.0
billion of corporate, unsecured bonds and drew down a term loan
totalling GBP400 million, also unsecured. A GBP300 million
five-year revolving credit facility was also made available to the
Company, which has never been drawn against.
On 26 March 2020, an agreement to amend the terms of the GBP400
million unsecured term loan was entered into. The maturity of the
term loan and the revolving credit facility is now extended to
March 2025, from July 2022, whilst the undrawn revolving credit
facility is reduced to GBP100 million. This agreement became
effective on 1 April 2020, with the modifications applicable from
that date.
Critical to the Company's future as a going concern is the
ability to service and repay this debt. For the foreseeable future,
at least until the maturity of the Fixed Rate EUR Bonds in 2024,
the Company only needs to pay the interest on the debt. The debt
imposes a number of covenants that must be complied with, on a
Group basis, under both the bonds and loan facility. The covenants
attaching to the debt are:
Covenant Test Limit for Bonds Limit for Loans
Limitation on Total debt / <65% <65%
Debt Total assets
-------------------- ----------------- -----------------
Limitation on Secured debt <40% <40%
Secured Debt / Total assets
-------------------- ----------------- -----------------
Interest Cover EBITDA / Interest 1.0x (dividend 1.15x (dividend
Ratio lockup at 1.3x) lockup at 1.3x)
-------------------- ----------------- -----------------
Unencumbered Unencumbered >125% >125%
Assets assets / Unsecured
Debt
-------------------- ----------------- -----------------
The Company receives income on its loan from Annington Homes
Limited, which is sufficient to meet the Company's debt obligations
and the covenants as set out above. Additionally, this income is
guaranteed by Annington Limited and Annington Property Limited. The
Annington Limited group's forecasts do not indicate any of the
above covenants will be breached in the foreseeable future.
Further, the Group's forecasts do indicate that sufficient cash
flow will be generated to cover payments of interest on its debt
and generate significant additional free cash flows to allow for
reinvestment or potential dividends to shareholders. Further, were
this not possible, the undrawn revolving credit facility provides
additional liquidity to the Group to allow for its continued
operation for the foreseeable future.
After making enquiries, the directors have a reasonable
expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. Accordingly, they
adopt the going concern basis in preparing the Annual Report and
financial statements.
Significant judgements and key estimates
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, liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and other
factors that are considered relevant. Actual results may differ
from these estimates.
Further details regarding key sources of estimation uncertainty
for the Company can be found at Note 8 regarding Loans
receivable.
Foreign currency
Transactions in foreign currencies are translated at the foreign
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
balance sheet date are retranslated to the functional currency at
the foreign exchange rate at that date. Foreign exchange
differences arising on translation are recognised in the income
statement, except for differences arising on the retranslation of
qualifying cash flow hedges, which are recognised in other
comprehensive income.
3. NEW STANDARDS, INTERPRETATIONS AND AMMENTS
New Standards, interpretations and amendments effective from 1
April 2019
No new standards, amendments or interpretations, effective for
the first time for the financial year beginning on or after 1 April
2019, have had a material impact on the company.
Standards issued not yet effective
At the date of authorisation of these financial statements, the
following new and revised IFRSs have been issued and adopted by the
EU but are not yet effective:
Effective date
(annual periods
New/Amended Standards and Interpretations beginning on
or after)
Conceptual Amendments to References to the 1 January 2020
Framework Amendments Conceptual Framework in IFRS
Standards
------------------------------------- ------------------
IFRS 3 Amendments Amendment to Business Combinations 1 January 2020
- Definition of Business
------------------------------------- ------------------
IAS1 and IAS8 Amendment to Definition of Material 1 January 2020
Amendments
------------------------------------- ------------------
IFRS 9, IAS Interest Rate Benchmark Reform 1 January 2020
39 and IFRS
7 Amendments
------------------------------------- ------------------
These standards and interpretations have not been early adopted
by the Company and are not expected to have a material impact on
its financial statements in future periods.
4. OPERATING PROFIT
The auditor's remuneration was GBP38,625 (2019: GBP32,500) for
the audit of the Company's annual financial statements. No other
services were provided by the auditor to the Company.
5. INFORMATION REGARDING DIRECTORS AND EMPLOYEES
The Company had no employees of its own during the year (2019:
none). The directors of the Company are also directors of other
Annington Limited group companies and were remunerated on a
group-wide basis. The disclosures for directors' emoluments for the
Group can be found in the Annington Limited financial statements.
The allocation of their emoluments to the Company, in both the
current and preceding years, are considered immaterial.
6. FINANCE INCOME AND COSTS
ACCOUNTING POLICY
Interest income is recognised over time, by reference to the
principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial
asset to that asset's net carrying amount on initial
recognition.
Finance costs, including any transaction costs, are charged to
the income statement using the effective interest rate method.
2020 2019
GBP'000 GBP'000
Finance income
Interest receivable on intercompany balances 110,919 110,712
Total finance income 110,919 110,712
Finance costs
Interest payable on unsecured fixed rate
bonds 97,958 97,811
Amortisation of issue costs 2,483 2,414
Interest payable on term loan 9,179 9,193
Foreign exchange loss/(gain) on financing 13,673 (8,836)
Transfer (to)/from equity for cash flow
hedge (13,628) 8,834
Other finance expenses 1,244 1,286
Total finance costs 110,909 110,702
7. TAXATION
ACCOUNTING POLICY
Current tax is recognised in the income statement and is
measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute
the amount are those that are enacted, or substantively enacted at
the balance sheet date in the countries where the Company operates
and generates taxable income. Taxable profit differs from profit
before tax as reported in the income statement because it excludes
some items of income or expense that are taxable or deductible in
other years and it further excludes items that are never taxable or
deductible.
2020 2019
GBP'000 GBP'000
Current tax
United Kingdom corporation tax at 19% (2019: - -
19%)
Taxation for the year - -
The standard rate of current tax for the year, based on the UK
standard rate of corporation tax is 19% (2019: 19%). The charge for
the year can be reconciled to profit before tax as follows:
2020 2019
GBP'000 GBP'000
Profit before tax 10 10
Tax charge at the standard rate (2) (2)
Factors affecting the current tax for the
year:
Group relief claimed 2 2
Taxation for the year - -
In the March 2020 Budget it was announced that the Corporation
Tax Rate will be held at 19% and this rate will continue to be in
effect for the financial year beginning 1 April 2020. This was
substantively enacted in March 2020.
8. RECEIVABLES
ACCOUNTING POLICY
Receivables are initially recognised at fair value. If the
receivables fall within a "held to collect" business model and its
contractual terms give rise to cash flows that are solely payments
of principal and interest on that principal, they are subsequently
measured at amortised cost using the effective interest method,
less any impairment.
Key source of estimation uncertainty
In assessing the recoverability of loans receivable, assumptions
and estimates are required to be made regarding the future
activities and earnings of the counterparty. If these assumptions
and estimates are not accurate, this could have a significant
effect on the recoverability of the loan receivables presented
below.
2020 2019
GBP'000 GBP'000
Amounts falling due within one year
Amounts owed by group undertakings 23,181 23,180
Interest receivable on swaps 3,148 2,999
Prepayments 6 15
26,335 26,194
Amounts falling due after more than one
year
Amounts owed by group undertakings 3,374,690 3,380,570
3,374,690 3,380,570
Amounts due to the Company by group undertakings include:
Unsecured, interest-bearing and no fixed date
of repayment 3,397,871 3,403,750
The recoverable amount of loans receivable from related parties
are reviewed annually by reference to the borrower's balance sheet
and expected future activities, with a provision recorded to the
extent the loan is not considered recoverable. Interest is charged
on the loan at a rate of 3.3035% (2019: 3.3070%). Unpaid interest
balances are accrued within amounts owed by group undertakings;
balances expected to be received in the next 12 months are shown
separately. There are no balances past due and no impairment has
been deemed necessary.
The carrying value of receivables approximates fair value.
9. CASH AND CASH EQUIVALENTS
ACCOUNTING POLICY
Cash and cash equivalents comprise cash at bank. Cash and cash
equivalents are limited to instruments with a maturity of less than
three months.
2020 2019
GBP'000 GBP'000
Cash at bank 8,546 113
10. PAYABLES
ACCOUNTING POLICY
Payables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method.
2020 2019
GBP'000 GBP'000
Amounts falling due within one year
Accrued interest 26,330 26,178
Other accruals 2,430 314
28,760 26,492
The carrying value of payables approximates fair value.
11. LOANS AND BORROWINGS
ACCOUNTING POLICY
Loans and borrowings are initially recognised at fair value less
the transaction costs directly attributable to their issue. After
initial recognition, interest bearing loans and borrowings are
subsequently measured at amortised cost using the effective
interest rate method, such that discounts and costs are charged to
the income statement over the term of the borrowing at a constant
return on the carrying amount of the liability. The debt is
classified as current and non-current based on the contractual
payments required within 12 months of the balance sheet date.
2020 2019
GBP'000 GBP'000
Amounts falling due between one and five
years
Unsecured bonds 528,656 -
Unsecured term loan 395,710 396,904
924,366 396,904
Amounts falling due after five years
Unsecured bonds 2,460,755 2,974,173
Total loans and borrowings 3,385,121 3,371,077
During the 2018 financial year the Group completed a refinancing
involving an injection of new capital into the Group, the issuance
of new debt instruments and the early redemption of all the
existing debt within the Group.
The Company issued five tranches totalling c.GBP3.0 billion of
corporate, unsecured bonds under a Euro Medium Term Note ("EMTN")
programme and drew down a term loan totalling GBP400 million, also
unsecured, with overall borrowing costs significantly lower than
the legacy financing structures. Arranged as part of the
refinancing, a GBP300 million five-year revolving credit facility
was available to the Company. The revolving credit facility has, to
date, never been drawn upon.
On 26 March 2020, an agreement to amend the terms of the GBP400
million unsecured term loan was entered into. The maturity of the
term loan and the revolving credit facility is now extended to
March 2025, from July 2022, whilst the undrawn revolving credit
facility is reduced to GBP100 million. This agreement became
effective on 1 April 2020, with the modifications applicable from
that date. The additional issue costs relating to that transaction,
totalling GBP2.1 million, have been capitalised in advance of the
effective date as these were incurred prior to the year end.
The Company had issued the bonds in the following denominations,
maturities and fixed interest rates:
Currency Sterling (GBP) Euro (EUR)
Principal Amount 625m 600m 625m 625m 600m
---------- ---------- ---------- ---------- -----------
Final Maturity 12-Jul-25 12-Jul-29 12-Jul-34 12-Jul-47 12-Jul-24
---------- ---------- ---------- ---------- -----------
Coupon 2.646% 3.184% 3.685% 3.935% 1.650%
---------- ---------- ---------- ---------- -----------
Cross currency swaps are in place for the EUR600 million bond,
converting the nominal balance to GBP526.26 million. These swaps
also mitigate volatility of foreign currency movements in future
interest and capital repayments. The function of these swaps
increases the effective interest rate of the Euro Tranche debt to
2.764%, fixed for the life of the bond.
The debt imposes a number of covenants that must be complied
with under both the bonds and loan facility and are calculated
based on the results and financial position of the wider Annington
group. The covenants attaching to the debt are:
Covenant Test Limit for Bonds Limit for Loans
Limitation on Total debt / <65% <65%
Debt total assets
-------------------- ----------------- -----------------
Limitation on Secured debt <40% <40%
Secured Debt / total assets
-------------------- ----------------- -----------------
Interest Cover EBITDA / interest 1.0x (dividend 1.15x (dividend
Ratio lockup at 1.3x) lockup at 1.3x)
-------------------- ----------------- -----------------
Unencumbered Unencumbered >125% >125%
Assets assets / unsecured
debt
-------------------- ----------------- -----------------
The Company's forecasts do not indicate any of these covenants
will be breached in the foreseeable future.
Reconciliation of movement
Amortisation
31 March of debt issue Foreign Exchange Costs of loan 31 March
2020 costs Revaluation adjustment modification 2019
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed Rate EUR
Bonds 2024 528,656 455 13,673 - 514,528
Fixed Rate GBP
Bonds 2025 621,984 525 - - 621,459
Fixed Rate GBP
Bonds 2029 596,662 304 - - 596,358
Fixed Rate GBP
Bonds 2034 621,207 198 - - 621,009
Fixed Rate GBP
Bonds 2047 620,902 83 - - 620,819
Term Loan 2022 395,710 918 - (2,112) 396,904
3,385,121 2,483 13,673 (2,112) 3,371,077
12. SHARE CAPITAL
2020 2019
GBP'000 GBP'000
Allotted, called up and fully paid
50,000 ordinary shares of GBP1 each 50 50
Upon incorporation, 50,000 ordinary shares of GBP1 each were
allotted.
13. DERIVATIVE FINANCIAL INSTRUMENTS
ACCOUNTING POLICY
The Company uses derivative financial instruments to reduce
exposure to foreign exchange rate risk. The Company does not hold
or issue derivative financial instruments for speculative
purposes.
Derivatives are initially recognised at fair value at the date a
derivative contract is entered into and are subsequently remeasured
to their fair value at each balance sheet date. Changes in the fair
value are recognised in profit or loss immediately unless the
derivative is designated and effective as a hedging instrument, in
which event the timing of the recognition in profit or loss depends
on the nature of the hedge relationship.
Hedge accounting
Hedges of foreign currency exchange risk on firm commitments are
accounted for as cash flow hedges. The relationship between the
hedging instrument and the hedged item, along with its risk
management objective and its strategy for undertaking hedge
transactions is documented at the inception of the hedge
relationship.
Additionally, on an ongoing basis, the Company documents whether
the hedging instrument is highly effective in offsetting changes in
fair values or cash flows of the hedged item attributed to the
hedged risk, which is when the hedging relationships meet all of
the following hedge effectiveness requirements:
-- there is an economic relationship between the hedged item and the hedging instrument;
-- the effect of credit risk does not dominate the value changes
that result from that economic relationship; and
-- the hedge ratio of the hedging relationship is the same as
that resulting from the quantity of the hedged item that the
Company actually hedges and the quantity of the hedging instrument
that the entity actually uses to hedge that quantity of hedged
item.
Cash flow hedges
The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash flow hedges is
recognised in other comprehensive income ("OCI") and accumulated in
the cash flow hedge reserve. The gain or loss relating to the
ineffective portion is recognised immediately in profit or loss,
and is included in the 'other gains and losses' line item.
Amounts previously recognised in OCI and accumulated in equity
are reclassified to profit or loss in the year when the hedged item
is recognised in profit or loss, in the same line of the income
statement as the recognised hedged item.
The Group discontinues hedge accounting only when the hedging
relationship ceases to meet the qualifying criteria.
2020 2019
GBP'000 GBP'000
Financial asset measured at fair value
through OCI
Cross currency swaps that are in designated
hedge accounting relationships 4,623 -
Financial liability measured at fair value
through OCI
Cross currency swaps that are in designated
hedge accounting relationships - (4,647)
Reconciliation of movements
Revaluation
2020 adjustment 2019
GBP'000 GBP'000 GBP'000
Cross currency swap asset/(liability) 4,623 9,270 (4,647)
Total derivative financial
instruments 4,623 9,270 (4,647)
14. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
ACCOUNTING POLICY
Financial assets and financial liabilities are recognised when
the Company becomes party to the contractual provisions of the
instrument. Financial assets and financial liabilities are
initially measured at fair value and net of directly attributable
transaction costs as appropriate.
Financial assets
Impairment of financial assets
The Company recognises a loss allowance for expected credit
losses on financial assets that are measured at amortised cost. The
loss allowance is measured at an amount equal to the lifetime
expected credit losses.
Financial liabilities
The Company's financial liabilities include trade and other
payables, loans and borrowings and derivative financial
instruments.
The Company has the following financial instruments:
2020 2019
Note GBP'000 GBP'000
Financial assets
Cash and receivables:
Receivables 8 3,401,019 3,406,749
Cash and cash equivalents 9 8,546 113
Assets measured at fair value through
OCI:
Cross currency swaps 13 4,623 -
Total financial assets 3,414,188 3,406,862
Financial liabilities
Liabilities measured at amortised
cost:
Payables 10 28,760 26,492
Loans and borrowings 11 3,385,121 3,371,077
Liabilities measured at fair value
through OCI:
Cross currency swaps 13 - 4,647
Total financial liabilities 3,413,881 3,402,216
Exposure to credit, liquidity, and interest rate risks arise in
the normal course of the Company's business activities. Derivative
financial instruments are in place to manage exposure to
fluctuations in exchange rates but are not employed for speculative
purposes.
Credit Risk
The Company's principal financial assets are cash and cash
equivalents and trade and other receivables.
The Company's exposure to credit risk is assessed as low as this
is primarily attributed to its trade and other receivables, which
consists principally of an intercompany loan to AHL. AHL indirectly
holds a portfolio of c.40,000 homes, the majority of which form
part of the Retained Estate. These are homes that were originally
acquired from the Ministry of Defence of the United Kingdom ("MoD")
via 999-year leases and subsequently leased back to them on a 200
year under lease. The rent is paid in advance and the MoD does not
have a history of payment default.
The Company also holds cross currency swaps with Barclays Bank
plc, JP Morgan Securities plc, Goldman Sachs Bank USA and Banco
Santander SA (London Branch). The Company's exposure to counter
party credit risk with respect to these derivatives is assessed as
low, as each of the counterparties holds at least an upper medium
grade rating.
The carrying amount of financial assets recorded in the
financial statements represents the Company's maximum exposure to
credit risk.
Debt Management
The Company's borrowings are through the issue of various
classes of unsecured corporate bonds as well as an unsecured term
loan.
There is a GBP300 million five year revolving borrowing facility
in place to ensure that there is no default in the repayment of the
borrowing and interest to the bondholders. This facility to date
has never been called upon. By agreement, effective 1 April 2020,
this facility was reduced to GBP100 million.
Capital Risk Management
The capital is managed at a Group level to ensure that entities
in the Group are able to continue as going concerns while
maximising the return to stakeholders through the optimisation of
the debt and equity balance.
The capital structure of the Company consists of debt and
equity. Net debt includes loans and borrowings (Note 11) and cash,
cash equivalents, and equity comprises equity attributable to
equity holders of the Company, being issued share capital, reserves
and retained earnings (Note 12).
The debt has a number of covenants to comply with under both the
bonds and loan facility. Refer to Note 11 for the covenants
attaching to the debt.
Currency risk
In July 2017, the Company issued a 7 year unsecured euro bond of
EUR600 million expiring July 2024. To hedge against fluctuations in
the Euro to Pound Sterling exchange rate, the Company entered into
a cross currency swap of EUR600 million, converting the nominal
balance to GBP526.26 million. These swaps mitigate the volatility
of foreign currency movements in future interest and capital
payments. The function of this swap increases the effective
interest rate of Euro Tranche debt to 2.764%. The hedge is in line
with the Group Treasury Policy whereby the Company should look to
put in place hedges covering 50-100% of the FX risk arising from
foreign currency debt, to the extent that foreign currency debt
exceeds GBP50 million in aggregate.
Currency risk sensitivity analysis
The impact of a hypothetical strengthening/weakening of pound
sterling against the Euro for both derivatives and non-derivatives,
with all other variables constant, would have increased/(decreased)
equity and pro t by the amounts shown below:
Strengthening 10% Weakening 10%
-------------------------------------- -------------------------------------
Gains/(losses) Gains/(losses) Gains/(losses) Gains/(losses)
in consolidated included in consolidated included
income statement in equity income statement in equity
(GBP'000) (GBP'000) (GBP'000) (GBP'000)
-------------------- ---------------- ------------------- ----------------
2020 - (7,074) - 6,141
2019 - (5,525) - 5,644
Interest rate risk management
Annington Funding plc has a relatively low interest rate risk as
the majority of the Company's borrowings are at fixed interest
rates. The term loan is the only instrument that has a floating
interest rate of LIBOR + 1.5%. The term loan is for a value of
GBP400 million, originally maturing in 2022. This has since been
extended to 2025, effective 1 April 2020.
Interest Rate sensitivity analysis
The sensitivity analysis below has been determined based on the
exposure to interest rates for both derivatives and non-derivative
instruments at the balance sheet date. The impact of a hypothetical
increase/decrease in interest rates with all other variables
constant, would have increased/(decreased) equity and pro t by the
amounts shown below:
50 bps increase 50 bps decrease
------------------------------------- -------------------------------------
Gains/(losses) Gains/(losses) Gains/(losses) Gains/(losses)
in consolidated included in consolidated included
income statement in equity income statement in equity
(GBP'000) (GBP'000) (GBP'000) (GBP'000)
------------------- ---------------- ------------------- ----------------
2020 (696) (346) 706 345
2019 (872) - 947 -
Cash Management and Liquidity
Cash levels are monitored at a group level to ensure sufficient
resources are available to meet the individual entities and Group's
current and projected operational commitments. Annington Funding
plc provides funding to Annington Homes Limited which in turn
provides intercompany loans at fixed interest rates to other
entities in the Group.
The company holds a GBP300 million liquidity facility that was
undrawn as at 31 March 2020. On 26 March 2020, it was agreed that
this facility be reduced to GBP100 million, effective 1 April
2020.
Liquidity risk and financial maturity analysis
In respect of the net non-derivative financial liabilities, the
following table has been drawn up based on the undiscounted cash
flows of financial liabilities based on the earliest date on which
the Group can be required to pay or receive monies. The table
includes both interest and principal cash flows.
2020
Total Less than One to More than
GBP'000 one year five years five years
GBP'000 GBP'000 GBP'000
Non-derivative financial liabilities
Trade and other payables 2,431 2,431 - -
Loans and borrowings 4,573,991 100,807 1,311,791 3,341,393
Total non-derivative financial
liabilities 4,756,422 103,238 1,311,791 3,341,393
Net payments for derivative financial
instruments
Cross currency swaps 17,175 5,788 11,387 -
Total derivative financial instruments 17,175 5,788 11,387 -
2019
Total Less than One to More than
GBP'000 one year five years five years
GBP'000 GBP'000 GBP'000
Non-derivative financial liabilities
Trade and other payables 26,491 26,491 - -
Loans and borrowings 4,842,892 101,444 791,239 3,950,209
Total non-derivative financial
liabilities 4,869,383 127,935 791,239 3,950,209
Net payments for derivative financial
instruments
Cross currency swaps 37,989 6,013 24,053 7,923
Total derivative financial instruments 37,989 6,013 24,053 7,923
Fair values
The fair values of the Company's borrowings, interest rate swaps
and offsetting swaps are determined by a Level 2 valuation
technique.
This fair value measurement hierarchy level is specified in
accordance with IFRS 13 'Fair Value Measurement'. The levels are
defined below:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
2020
Par value Balance
of debt sheet value Fair value
GBP'000 GBP'000 GBP'000
Level 2
Non-derivative financial liabilities
Unsecured bonds 3,001,260 2,989,411 2,979,678
Unsecured term loan 400,000 395,710 400,000
3,401,260 3,385,121 3,379,678
Derivative financial asset
Cross currency swap - (4,623) (4,623)
3,401,260 3,380,498 3,375,055
2019
Par value Balance
of debt sheet value Fair value
GBP'000 GBP'000 GBP'000
Level 2
Non-derivative financial liabilities
Unsecured bonds 3,001,260 2,974,173 3,029,517
Unsecured term loan 400,000 396,904 400,000
3,401,260 3,371,077 3,429.517
Derivative financial liabilities
Cross currency swaps - 4,647 4,647
3,401,260 3,375,724 3,434,164
Unsecured bonds
The volume of market trades of the Company's bonds is not
considered sufficient to be an active market. Therefore, listed
bonds have been fair valued by a third party valuer using a spread
to a reference gilt curve. The reference gilt curve is based upon
observable market data. The spread is determined with reference to
comparable sector bond pricing. This represents a Level 2 fair
value measurement. Further details, including covenant information
is included in Note 11.
Cross currency swaps
The fair value of derivative financial instruments is based on
valuations by an independent valuer using the present value of
estimated future cash flows, which are discounted using the
applicable yield curves derived from quoted interest rates as at 31
March 2020.
Unsecured term loan
This loan relates to a GBP400 million unsecured bank loan,
originally maturing in July 2022. On 26 March 2020, an agreement to
amend the terms of the GBP400 million unsecured term loan was
entered into. The maturity of the term loan is now extended to
March 2025. This agreement became effective on 1 April 2020, with
the modifications applicable from that date. Further details,
including covenant information is included in Note 11.
15. NOTES TO CASH FLOW STATEMENT
2020 2019
GBP'000 GBP'000
Profit after taxation 10 10
Adjustment for:
Finance costs 110,909 110,702
Finance income (110,919) (110,712)
Movements in working capital:
Decrease/(increase) in receivables 9 (15)
Cash generated/(utilised) in operations 9 (15)
16. ANALYSIS OF CHANGES IN NET DEBT
2020 Cash flow Other 2019
GBP'000 GBP'000 non-cash GBP'000
changes
GBP'000
Cash and cash equivalents 8,546 8,478 (45) 113
Unsecured notes (2,989,411) - (15,238) (2,974,173)
Unsecured term loan (395,710) - 1,194 (396,904)
Net debt (3,376,575) 8,478 (14,089) (3,370,964)
Non-cash changes include amortisation of issue costs relating to
debt issuance and foreign exchange gains and losses on translation
of Euro denominated debt (see Note 11).
17. RELATED PARTY DISCLOSURES
During the year, the Company had amounts due to and owed by
group undertakings and recognised finance income related to these
balances under the terms detailed in Note 8 and 10.
The following transactions with related parties where entered
into during the year:
2020 2019
GBP'000 GBP'000
Immediate Parent - Finance income
Annington Homes Limited 110,919 110,712
The following amounts were outstanding at the balance sheet
date:
Amounts owed
by related parties
2020 2019
GBP'000 GBP'000
Immediate Parent
Annington Homes Limited 3,397,871 3,403,750
3,397,871 3,403,750
The balance outstanding from Annington Homes Limited relates to
an intercompany loan provided by Annington Funding plc with no set
redemption date and at an interest rate of 3.3035% (2019: 3.070%)
per annum. An annual fee of GBP10,000 (2019: GBP10,000) is payable
to Annington Funding plc by Annington Homes Limited for
administration services.
18. ENTITY INFORMATION AND CONTROLLING PARTY
The Company is incorporated in the United Kingdom and the
address of its registered office is 1 James Street, London W1U
1DR.
Annington Homes Limited, a company incorporated in the United
Kingdom, is the immediate parent company.
The directors regard Terra Firma Holdings Limited, a company
registered in Guernsey, as the ultimate parent entity. The ultimate
controlling party is Guy Hands.
Annington Limited is the parent company of the largest and
smallest group of which the Company is a member and for which Group
financial statements are drawn up. The Annual Report and Financial
Statements for Annington Limited are available on request from the
registered office at 1 James Street, London W1U 1DR.
registered office
1 James Street
London, United Kingdom
W1U 1DR
Telephone: 020 7960 7500
www.annington.co.uk
Registered in England and Wales No 10765119
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FR FZGZLRKGGGZM
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September 28, 2020 02:00 ET (06:00 GMT)
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