TIDMALNA
RNS Number : 1911K
Alina Holdings PLC
30 December 2020
FOR IMMEDIATE RELEASE.
30 December 2020
Alina Holdings PLC (the "Company")
Results for the six months ended 30 September 2020
Further to the Company's announcement dated 2 December 2020, the
directors of Alina Holdings PLC are pleased to announce the
Company's unaudited consolidated results for the six months ended
30 September 2020.
Enquiries:
Alina Holdings PLC
William A Heaney
Company Secretary
07712 868315
Management Report
Corporate Activity
During the period the directors reviewed the options open to the
Company for its future strategy, in tandem with the aim of
restoring trading in the Company's shares on the London Stock
Exchange. This culminated in the publication, and subsequent
approval by the Company's shareholders in September 2020, of
proposals for the Company's new investment strategy (summarised
above), in tandem with which the Company's largest shareholder at
that time, Thalassa Holdings Ltd, distributed the majority of its
shares in the Company to its own shareholders. This enabled the
Company to apply to the Financial Conduct Authority for the
restoration of trading in the Company's shares on the London Stock
Exchange, which took place on 19 November 2020.
In accordance with the new investment strategy adopted by its
shareholders, the Company changed its name to Alina Holdings PLC on
26 November 2020.
Economic Background & Market Conditions
Throughout the period reported on the Company operated under its
previous investment strategy as a UK REIT specialising in local
retail shopping assets. An element of the uncertainty that had
overhung the property market for much of 2019 had to some extent
been dissipated prior to the period reported on, following the
general election in December 2019. Nevertheless, concerns over the
potential impact of the UK's departure from the European Union and
uncertainty over its future trading relationship with the bloc
continued to influence property values and transaction volumes
throughout the period. This situation was greatly compounded by the
COVID-19 outbreak, confirmed as a global pandemic by the World
Health Organisation immediately prior to the period, which impacted
all owners and occupiers of commercial property. The effects of the
pandemic, and the measures taken by Government to contain it, have
been particularly severe in the retail and leisure segments.
However, even during the most severe lockdown restrictions, those
smaller local and convenience shops supplying essential items to
their localities could continue to trade.
Financial Results
The Group made an IFRS loss before tax for the six-months period
to 30 September 2020 of GBP0.652 million (or loss per share of
2.87p), compared with a profit of GBP0.026 million (or 0.03 pence
per share) for the equivalent period in 2019 and a loss of GBP0.06
million (or 0.26 pence per share) for the six months period to 31
March 2020 and a loss of GBP1.90 million (or 2.37 pence per share)
for the six-months period to 31 March 2019. The loss for the Group
reflected the loss of income resulting from the disposal of
property assets during the previous periods, the revaluation of the
residual portfolio and the effect of currency market fluctuations
on the Group's cash holdings.
Property Portfolio and Asset Management
At 30 September 2020 the Company's portfolio comprised six
properties, with an annual gross rental income, after deducting
head rent payments, of GBP0.45 million (30 September 2019: eight
properties, gross rental income GBP0.48 million). The portfolio
included 61 letting units (2019: 65 letting units). One of the
property assets was considered to be held for sale.
Asset management activities during the period focused on
maximising property occupancy and opportunities for rental growth,
as well as a number of repair and maintenance projects. Marketing
and letting activities continued, albeit with appropriate
precautions to address lockdown requirements.
Portfolio Valuation
The fair value of the property portfolio of six assets held at
30 September 2020 was GBP2.795 million (30 September 2019: eight
assets, GBP3.465 million; 31 March 2020: six assets, GBP3.120
million). The valuation was provided by Allsop LLP, a firm of
independent chartered surveyors. In line with the Company's
established valuation policy, two of the larger assets were subject
to full RICS valuations, with the remainder subject to desktop
updates of their previous full valuations provided by Allsop LLP in
July 2019. The holding value of the property assets in the
Company's accounts of the one remaining property considered to be
held for sale took account of agreed pricing and potential
transaction costs.
Cash
At 30 September 2020 the Company held GBP3.818 million in cash
(31 March 2020: GBP4.023 million; 30 September 2019: GBP3.566
million).
Net Asset Value
The Net Asset Value at 30 September 2020 was GBP6.281 million or
27.67p per share (31 March 2020: GBP6.933 million, 30.55p per
share; 30 September 2019: GBP6.992 million or 30.81p per share).
The reduction in Net Asset Value reflected the reduction in the
valuation of the Company's property portfolio, which in turn
reflected general trends in the UK property market, together with
the reduction in rental income as a result of property disposals in
previous periods and the effect of currency market fluctuations on
the Group's cash holdings.
Basis of Preparation of Financial Statements
The Company's financial statements at 31 March 2019 were
prepared on a break-up basis in view of the progress with the
property sales programme then in place. Following the decision of
the new directors to suspend the property disposal programme in
October 2019, the directors decided that it was appropriate for the
Company's financial statements for 30 September 2019 onwards should
be prepared on the going concern basis.
Financing
The Company did not utilise any external funding facilities
during the period.
Taxation
As a result of the share buy-back offer concluded in October
2019, the Company no longer fulfilled the conditions of the UK REIT
tax regime. It was subsequently agreed with HM Revenue &
Customs, that the Group would be considered to remain in the REIT
regime until 30 September 2020, at which time it would depart from
the REIT regime unless it had fulfilled the relevant conditions by
that date. However, in September 2020 the Company's shareholders
adopted a new investment strategy, including the re-listing of the
Company's shares on the Standard element of the Main Market of the
London Stock Exchange and, in consequence, to leave the UK REIT tax
regime. Under the UK REIT rules the Company is considered to have
exited the REIT regime for the entirety of its financial year
beginning 1 October 2018, being the beginning of the first tax year
of the Company during which it did not fulfil all the REIT
conditions. The Company is therefore deemed to be subject to
corporation tax in the usual way from that date. However, in the
light of the losses incurred during 2018-19, it is not anticipated
that any corporation tax liability has arisen in respect of that
year.
Dividend
In line with the Group's current dividend distribution policy no
interim dividend will be paid. The directors will continue to
review the dividend policy in line with progress with the Company's
new investment strategy.
Related Party
The Company has been internally managed since 24 November 2019,
when its previous fund management contract with Principal Real
Estate Limited terminated. During the period the Company had an
arrangement with Thalassa Holdings Ltd, its then largest
shareholder, for the provision of accountancy and registered office
services. The services were supplied to the Company at cost, which
was not considered to be material, and the directors did not
consider the arrangement to amount to a related party
transaction.
Principal Risks and Uncertainties for the Remaining Six Months
of the Financial Period
The risks facing the Group for the foreseeable future remain
consistent with those described in detail in the annual report for
the year to 30 September 2019 (available on the Group's website:
www.alina-holdings.com ) .
These centre on:
-- Changes in the macroeconomic environment, particularly those
arising from the COVID-19 epidemic
-- Higher than anticipated property maintenance costs
-- Changes to legal environment, planning law or local planning policy
-- Regulatory requirements in connection with the property portfolio
-- Information technology systems and data security
-- Non-payment of trade receivables by tenants, potentially exacerbated by the COVID-19 epidemic
-- Financial and property market conditions
-- Uncontrolled exit from the UK REIT regime
The potential impact of a number of these risk areas on the
Company is mitigated by the significant proportion of the Company's
assets held in cash.
The Board was satisfied that its approach to macroeconomic risks
supplied an appropriate response to the effects of the COVID-19
pandemic during the period.
The Group's exit from the UK REIT regime was the subject of
consultation with HM Revenue and Customs the Company's tax advisers
and was thus under control.
The Board will continue to review its risk management approach
to ensure that it reflects the risk profile of the revised
investment strategy recently approved by the Company's
shareholders.
The Group does not speculate in derivative financial
instruments.
The Group's exposure to the risk of non-payment of trade
receivables by its tenants was considered to have been heightened
during the period reported on as a direct result of the COVID-19
virus and the consequent lockdown imposed by the UK Government,
which restricted the ability of the Group's tenants to trade in
their properties. The lockdown has also impacted on the ability of
the Company to refurbish, market and let vacant properties. The
directors monitor the level of rent and service charge arrears, as
well as progress with letting void properties, on a continual
basis.
Auditors' Review
This interim financial report has been reviewed but not audited
by auditors pursuant to the Financial Reporting Council guidance on
Review of Interim Financial Information.
Responsibility Statement
We confirm that to the best of our knowledge that:
(a) the condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by
the EU: and
(b) the Interim Management Report includes a fair review of the
information required by:
DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the six
months of the financial period and their impact on the condensed
set of financial statements; and a description of the principal
risks and uncertainties for the remaining three months of the
financial period; and
DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the six months
of the current financial period and that have materially affected
the financial position or performance of the entity during that
period; and any changes in the related party transactions described
in the last annual report that could do so.
Signed on behalf of the Board who approved the interim
management report on 29 December 2020.
Duncan Soukup
Chairman
Condensed Consolidated Income Statement for the six months ended
30 September 2020
Unaudited Audited Unaudited Unaudited
Twelve Unaudited Unaudited Twelve Six Six
months Six months Six months months months months
ended ended ended ended ended ended
30 September 30 September 31 March 30 September 30 September 31 March
Note 2020 2020 2020 2019 2019 2019
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
Gross rental income 453 224 229 764 305 459
---------------------
Property operating
expenses 3 (133) (88) (45) (695) (23) (672)
--------------------- ----- -------------- ------------ -------------- -------------- ----------
Net rental income 320 136 184 69 282 (213)
--------------------- ----- -------------- ------------ -------------- -------------- ----------
Profit/Loss on
disposal
of investment
properties
held for sale 4 1 - 1 (148) (1) (147)
--------------------- ----- -------------- ------------ -------------- -------------- ----------
(Loss)/Profit from
change in fair
value
of investment
properties 9 (325) (325) - (258) 37 (295)
--------------------- ----- -------------- ------------ -------------- -------------- ----------
Administrative
expenses
including
non-recurring
items 5 (428) (273) (155) (1,580) (319) (1,261)
--------------------- ----- -------------- ------------ -------------- -------------- ----------
Operating
(loss)/profit
before net
financing
costs (432) (462) 30 (1,917) (1) (1,916)
--------------------- ----- -------------- ------------ -------------- -------------- ----------
Financing income 6 3 - 3 49 29 20
--------------------- ----- -------------- ------------ -------------- -------------- ----------
Financing expenses 6 (282) (190) (92) (6) (2) (4)
--------------------- ----- -------------- ------------ -------------- -------------- ----------
(Loss)/profit before
tax (711) (652) (59) (1,874) 26 (1,900)
--------------------- ----- -------------- ------------ -------------- -------------- ----------
Taxation 7 - - - - -
--------------------- ----- -------------- ------------ -------------- -------------- ----------
(Loss)/profit for
the period from
continuing
operations (711) (652) (59) (1,874) 26 (1,900)
--------------------- ----- -------------- ------------ -------------- -------------- ----------
(Loss)/profit for
the financial
period
attributable to
equity
holders of the
Company (711) (652) (59) (1,874) 26 (1,900)
--------------------- ----- -------------- ------------ -------------- -------------- ----------
Basic and diluted
loss per share on
(loss)/profit for
the period 10 (3.13)p (2.87)p (0.26)p (2.34)p 0.03p (2.37)p
--------------------- ----- -------------- ------------ -------------- -------------- ----------
Basic and diluted
(loss)/profit per
share on operations
for the period 10 (3.13)p (2.87)p (0.26)p (2.34)p 0.03p (2.37)p
--------------------- ----- -------------- ------------ -------------- -------------- ----------
Condensed Consolidated Statement of Comprehensive Income for the
six months ended 30 September 2020
Unaudited Audited Unaudited Unaudited
Twelve Unaudited Unaudited Twelve Six Six
months Six months Six months months months months
ended ended ended ended ended ended
30 September 30 September 31 March 30 September 30 September 31 March
2020 2020 2020 2020 2019 2019
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
------------------------ -------------- -------------- ------------ -------------- -------------- ----------
Loss for the financial
period (711) (652) (59) (1,874) 26 (1,900)
------------------------- -------------- -------------- ------------ -------------- -------------- ----------
Total comprehensive
loss for the period (711) (652) (59) (1,874) 26 (1,900)
------------------------- -------------- -------------- ------------ -------------- -------------- ----------
Attributable to:
------------------------ -------------- -------------- ------------ -------------- -------------- ----------
Equity holders of the
parent Company (711) (652) (59) (1,874) 26 (1,900)
------------------------- -------------- -------------- ------------ -------------- -------------- ----------
Condensed Consolidated Balance Sheet as at 30 September 2020
Unaudited Audited Unaudited
as at Unaudited as at 30 as at
30 September as at 31 September 31 March
Note 2020 March 2020 2019 2019
GBP000s GBP000s GBP000s GBP000s
----- -------------- ------------ ----------- ----------
Non-current assets
----- -------------- ------------ ----------- ----------
Investment properties 9 2,814 3,139 3,139 -
----- -------------- ------------ ----------- ----------
2,814 3,139 3,139 -
----- -------------- ------------ ----------- ----------
Current assets
----- -------------- ------------ ----------- ----------
Trade and other receivables 243 192 378 844
----- -------------- ------------ ----------- ----------
Investment properties held
for sale 9 330 330 677 3,656
----- -------------- ------------ ----------- ----------
Cash 3,818 4,023 3,566 22,755
----- -------------- ------------ ----------- ----------
4,391 4,545 4,621 27,255
----- -------------- ------------ ----------- ----------
Total assets 7,205 7,684 7,760 27,255
----- -------------- ------------ ----------- ----------
Non-current liabilities
----- -------------- ------------ ----------- ----------
Finance lease liabilities 9 (350) (350) (350) -
----- -------------- ------------ ----------- ----------
(350) (350) (350) -
----- -------------- ------------ ----------- ----------
Current liabilities
----- -------------- ------------ ----------- ----------
Trade and other payables (574) (401) (418) (1,402)
----- -------------- ------------ ----------- ----------
(574) (401) (418) (1,402)
----- -------------- ------------ ----------- ----------
Total liabilities (924) (751) (768) (1,402)
----- -------------- ------------ ----------- ----------
Net assets 6,281 6,933 6,992 25,853
----- -------------- ------------ ----------- ----------
Equity
----- -------------- ------------ ----------- ----------
Issued capital 2 319 319 319 18,334
----- -------------- ------------ ----------- ----------
Capital redemption reserve 2 598 598 598 1,764
----- -------------- ------------ ----------- ----------
Retained earnings 5,364 6,016 6,075 5,755
----- -------------- ------------ ----------- ----------
Total attributable to equity
holders of the Company 6,281 6,933 6,992 25,853
----- -------------- ------------ ----------- ----------
Condensed Consolidated Statement of Cash Flows for the six
months ended 30 September 2020
Unaudited Audited
Twelve Unaudited Unaudited Twelve Unaudited Unaudited
months Six months Six months months Six months Six months
ended ended ended ended ended ended
30 September 30 September 31 March 30 September 30 September 31 March
Note 2020 2020 2020 2019 2019 2019
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
----- -------------- -------------- ------------ -------------- -------------- ------------
Operating
activities
----- -------------- -------------- ------------ -------------- -------------- ------------
(Loss)/Profit for
the period (711) (652) (59) (1,874) 26 (1,900)
----- -------------- -------------- ------------ -------------- -------------- ------------
Adjustments for:
----- -------------- -------------- ------------ -------------- -------------- ------------
Loss/(Profit) from
change in fair
value
of investment
properties 9 325 325 258 (37) 295
----- -------------- -------------- ------------ -------------- -------------- ------------
Net financing
loss/(income) 6 279 190 89 (43) (27) (16)
----- -------------- -------------- ------------ -------------- -------------- ------------
(Profit)/Loss on
disposal
of investment
properties (1) - (1) 148 1 147
----- -------------- -------------- ------------ -------------- -------------- ------------
Equity secured
share-based
payment expenses - 40 20 20
----- -------------- -------------- ------------ -------------- -------------- ------------
(108) (137) 29 (1,471) (17) (1,454)
----- -------------- -------------- ------------ -------------- -------------- ------------
Decrease/
(Increase)
in trade and
other
receivables 135 (51) 186 3,963 466 3,497
----- -------------- -------------- ------------ -------------- -------------- ------------
Decrease in trade
and other
payables 156 173 (17) (1,818) (1,003) (815)
----- -------------- -------------- ------------ -------------- -------------- ------------
183 (15) 198 674 (554) 1,228
----- -------------- -------------- ------------ -------------- -------------- ------------
Loss on foreign
exchange (282) (190) (92) - -
----- -------------- -------------- ------------ -------------- -------------- ------------
Loan arrangement
fees
paid - - - (6) (2) (4)
----- -------------- -------------- ------------ -------------- -------------- ------------
Interest received 3 - 3 49 29 20
----- -------------- -------------- ------------ -------------- -------------- ------------
Net cash
(outflow)/inflow
from operating
activities (96) (205) 109 717 (527) 1,244
----- -------------- -------------- ------------ -------------- -------------- ------------
Investing
activities
----- -------------- -------------- ------------ -------------- -------------- ------------
Net proceeds from
sale of
investment
properties 348 - 348 18,468 246 18,222
----- -------------- -------------- ------------ -------------- -------------- ------------
Acquisition and
improvements
to investment
properties 9 - - (4) (1) (3)
----- -------------- -------------- ------------ -------------- -------------- ------------
Cash flows from
investing
activities 348 - 348 18,464 245 18,219
----- -------------- -------------- ------------ -------------- -------------- ------------
Net cash flows
from
operating
activities
and investing
activities 252 (205) 457 19,181 (282) 19,463
----- -------------- -------------- ------------ -------------- -------------- ------------
Financing
activities
----- -------------- -------------- ------------ -------------- -------------- ------------
Repayment of - - - - - -
borrowings
----- -------------- -------------- ------------ -------------- -------------- ------------
Reduction in share
capital - (18,907) (18,907) -
----- -------------- -------------- ------------ -------------- -------------- ------------
Cash flows from
financing
activities - (18,907) (18,907) -
----- -------------- -------------- ------------ -------------- -------------- ------------
Net decrease in
cash 252 (205) 457 274 (19,189) 19,463
----- -------------- -------------- ------------ -------------- -------------- ------------
Cash at beginning
of period 3,566 4,023 3,566 3,292 22,755 3,292
----- -------------- -------------- ------------ -------------- -------------- ------------
Cash at end of
period 3,818 3,818 4,023 3,566 3,566 22,755
----- -------------- -------------- ------------ -------------- -------------- ------------
Condensed Consolidated Statement of Changes in Equity for the
six months ended 30 September 2020
Capital
--------------------------------
Share redemption Retained
--------------------------------
capital Reserves reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------- --------- --------- ----------- --------- ---------
At 30 September 2018 18,334 3,773 1,764 3,862 27,733
--------- --------- ----------- --------- ---------
Total comprehensive expense
--------- --------- ----------- --------- ---------
for the period
--------- --------- ----------- --------- ---------
Loss for the period - - - (1,900) (1,900)
--------- --------- ----------- --------- ---------
Transactions with owners,
--------- --------- ----------- --------- ---------
recorded directly in
equity
--------- --------- ----------- --------- ---------
Dividends - - - - -
--------- --------- ----------- --------- ---------
Share based payments - - - 20 20
--------- --------- ----------- --------- ---------
Total contributions by - - - - -
and
--------- --------- ----------- --------- ---------
distributions to owners
--------- --------- ----------- --------- ---------
Release of Gilfin acquisition
reserve to distributable
reserve - (3,773) - 3,773 -
--------- --------- ----------- --------- ---------
At 31 March 2019 18,334 - 1,764 5,755 25,853
--------- --------- ----------- --------- ---------
Total comprehensive loss
for the period
--------- --------- ----------- --------- ---------
Profit for the period - - - 26 26
--------- --------- ----------- --------- ---------
Transactions with owners
recorded directly in
equity
--------- --------- ----------- --------- ---------
Dividends - - - - -
--------- --------- ----------- --------- ---------
Share based payments - - - 20 20
--------- --------- ----------- --------- ---------
Total contributions by - - - - -
and distributions to
owners
--------- --------- ----------- --------- ---------
Capital reduction (Note
a)
--------- --------- ----------- --------- ---------
(17,417) - - 17,417 -
--------- --------- ----------- --------- ---------
Transfer capital reserves
to revenue (Note b) - - (1,764) 1,764 -
--------- --------- ----------- --------- ---------
Cost of own shares acquired
(note c) (598) - - (18,309) (18,907)
--------- --------- ----------- --------- ---------
Creation of Capital Redemption
Reserve (note d) - - 598 (598) -
--------- --------- ----------- --------- ---------
At 30 September 2019 319 - 598 6,075 6,992
--------- --------- ----------- --------- ---------
Total comprehensive profit
--------- --------- ----------- --------- ---------
for the period
--------- --------- ----------- --------- ---------
Loss for the period - - - (59) (59)
--------- --------- ----------- --------- ---------
Transactions with owners,
--------- --------- ----------- --------- ---------
recorded directly in
equity
--------- --------- ----------- --------- ---------
Dividends - - - - -
--------- --------- ----------- --------- ---------
Share based payments - - - - -
--------- --------- ----------- --------- ---------
Total contributions by - - - - -
and
--------- --------- ----------- --------- ---------
distributions to owners
--------- --------- ----------- --------- ---------
At 31 March 2020 319 - 598 6,016 6,933
--------- --------- ----------- --------- ---------
During the six months period to 30 September 2019 the Company
successfully applied to the High Court to undertake a capital
restructuring in order to facilitate a share buy-back tender offer.
Under this restructuring and buy-back:
(a) The nominal value of each Ordinary Share was reduced from
20p to 1p, resulting in GBP17.417m being released to retained
earnings.
(b) The capital redemption reserves and other reserves were
transferred to retained earnings as part of the Court approved
capital restructuring.
(c) 59,808,456 ordinary 1p shares were purchased, representing
72.5% of total share capital at the time, at a price of 31.33p each
and then cancelled, the total cost comprising:
GBP000s
59,808,456 shares 1p nominal value
purchased at of each share 598
------------------------------- -------------------
plus premium
30.33p on each
share 18,140
------------------------------- ----------------------------- -------------------
18.738
------------------------------------------------------------- -------------------
legal costs
of restructuring
and buy back 169
------------------------------- ----------------------------- -------------------
18,907
------------------------------------------------------------- -------------------
(d) A new capital redemption reserve of GBP0.598m was created to
replace the nominal value of shares bought.
Notes to the interim report for the six months ended 30
September 2020
1. Accounting policies
Basis of preparation
The condensed unaudited set of financial statements has
been prepared in accordance with IAS 34 "Interim Financial
Reporting" as adopted by the EU.
The annual financial statements of the Group are prepared
in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the EU. As required by the Disclosure
and Transparency Rules of the Financial Services Authority,
the condensed set of financial statements has been prepared
applying the accounting policies and presentation that
were applied in the preparation of the Company's published
consolidated financial statements for the year ended 30
September 2019 (with which they should be read in conjunction).
The independent auditor's report on the 2019 financial
statements was not qualified.
The Group adopted IFRS 15 Revenue from Contracts with
Customers, IFRS 9 Financial Instruments and IFRS 16 Leases
from 1 January 2019. None of these standards has a material
effect on the Group's financial statements.
The financial statements are prepared on a going concern
basis, as were the financial statements for the year ended
30 September 2019. The financial statements for the six
months ended 31 March 2019 were prepared on a break-up
basis.
2. Segmental reporting
IFRS 8 requires operating segments to be identified on
the basis of internal reports that are regularly reported
to the chief operating decision maker to allocate resources
to the segments and to assess their performance.
The Group has identified one operation and one reporting
segment which is reported to the Board on a quarterly
basis. The Board of directors is considered to be the
chief operating decision maker.
3. Property Operating Expenses
Unaudited Unaudited Audited Unaudited
Twelve Six Unaudited Twelve Six
months months Six months months Unaudited
ended ended months ended ended Six months
30 30 ended 30 30 ended
September September 31 March September September 31 March
2020 2020 2020 2019 2019 2019
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------- ---------- ---------- ---------- -----------
Bad debt
charge 13 4 9 108 134 (26)
---------- ---------- ---------- ---------- ---------- -----------
Head rent
payments (21) (13) (8) (11) (8) (3)
--------------- ---------- ---------- ---------- ---------- -----------
Repairs (25) (13) (12) (211) (2) (209)
--------------- ---------- ---------- ---------- ---------- -----------
Business rates
and
council tax (24) (10) (14) (25) (23) (2)
--------------- ---------- ---------- ---------- ---------- -----------
Irrecoverable
service
charge 3 (5) 8 (39) 2 (41)
--------------- ---------- ---------- ---------- ---------- -----------
Utilities 9 3 6 (109) (15) (94)
--------------- ---------- ---------- ---------- ---------- -----------
Insurance (12) (5) (7) (36) (25) (11)
--------------- ---------- ---------- ---------- ---------- -----------
Managing agent
fees (32) (14) (18) (123) (24) (99)
--------------- ---------- ---------- ---------- ---------- -----------
Letting and
review
fees - - - (36) (4) (32)
--------------- ---------- ---------- ---------- ---------- -----------
Legal &
professional (28) (22) (6) (113) (39) (74)
--------------- ---------- ---------- ---------- ---------- -----------
EPC
amortisation,
Abortives,
and Misc (16) (13) (3) (100) (19) (81)
--------------- ---------- ---------- ---------- ---------- -----------
Total property
operating
expenses (133) (88) (45) (695) (23) (672)
--------------- ---------- ---------- ---------- ---------- -----------
In common with many property organisations, the Company's
portfolio is a mix of residential, opted and non-opted properties
for VAT. In the above table the applicable VAT which is not
recovered has been included directly in the cost.
During the period the rate of rent collection improved, enabling
a reduction in the bad debt provision.
4. Property disposals
Unaudited Audited
Twelve Unaudited Twelve Unaudited
months Six months Unaudited months Six months Unaudited
ended ended Six months ended ended Six months
30 30 ended 30 30 ended
September September 31 March September September 31 March
2020 2020 2020 2019 2019 2019
Number Number Number Number Number Number
Number of sales 2 - 2 66 1 65
---------------- ----------- ----------- ----------- ----------- ------------------
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------- ----------- ----------- ----------- ----------- ------------------
Average value 177 177 287 260 288
---------------- =========== =========== =========== =========== =========== ==================
Sales
---------------- ----------- ----------- ----------- ----------- ------------------
Total sales 355 - 355 18,955 260 18,695
---------------- ----------- ----------- ----------- ----------- ------------------
Carrying value (347) - (347) (18,616) (247) (18,369)
---------------- ----------- ----------- ----------- ----------- ------------------
Profit/(Loss)
on disposals
before
transaction
costs 8 - 8 339 13 326
================ =========== =========== =========== =========== =========== ==================
Transaction
costs
---------------- ----------- ----------- ----------- ----------- ------------------
Legal fees (4) - (4) (210) (9) (201)
---------------- ----------- ----------- ----------- ----------- ------------------
Agent fees,
marketing
and brochure
costs (3) - (3) (240) (2) (238)
---------------- ----------- ----------- ----------- ----------- ------------------
Disbursements - - - (8) (2) (6)
---------------- ----------- ----------- ----------- ----------- ------------------
Non recoverable
VAT (on
non-opted and
residential
elements) - - - (29) (1) (28)
---------------- ----------- ----------- ----------- ----------- ------------------
Total
transaction
costs (7) - (7) (487) (14) (473)
================ =========== =========== =========== =========== =========== ==================
Profit/(Loss)
on disposals
after
transaction
costs 1 - 1 (148) (1) (147)
---------------- ----------- ----------- ----------- ----------- ------------------
Transaction
costs as
percentage of
sales value 2.0% 0.0% 2.0% 2.6% 5.4% 2.5%
---------------- ----------- ----------- ----------- ----------- ------------------
5. Administrative expenses
Unaudited Unaudited Audited Unaudited
Twelve Six Unaudited Twelve Six Unaudited
months months Six months months Six
ended ended months ended ended months
30 30 ended 30 30 ended
September September 31 March September September 31 March
2020 2020 2020 2019 2019 2019
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------- ---------- ---------- ---------- ---------- ----------
Investment
manager
fees (9) (1) (8) (320) (88) (232)
---------------- ---------- ---------- ---------- ---------- ----------
Legal and
professional (167) (147) (20) (1,177) (292) (885)
---------------- ---------- ---------- ---------- ---------- ----------
Tax and audit (66) (29) (37) (96) (47) (49)
---------------- ---------- ---------- ---------- ---------- ----------
Remuneration
Costs* (138) (77) (61) (134) (65) (69)
---------------- ---------- ---------- ---------- ---------- ----------
Other (20) (13) (7) 14 (15) 29
---------------- ---------- ---------- ---------- ---------- ----------
Irrecoverable
VAT on
Administration
expenses ** (28) (6) (22) (92) (37) (55)
---------------- ---------- ---------- ---------- ---------- ----------
Provision for
liquidators'
fees - - - 225 225 -
---------------- ---------- ---------- ---------- ---------- ----------
Total
administrative
expenses (428) (273) (155) (1,580) (319) (1,261)
---------------- ---------- ---------- ---------- ---------- ----------
* Remuneration costs for the each of the two six months periods to
30 September 2020 include GBPnil (six months to 30 September 2019:
GBP20,000; six months to 31 March 2019 GBP20,000) in respect of the
expensing of employee share options which were capable of vesting
in 2018 onwards. This amount has a corresponding entry in equity and
has no impact on the Company's net assets now or in the future.
** The Company's portfolio contains residential elements and commercial
properties not opted for VAT. Accordingly, VAT on overheads is not
fully recoverable.
6. Net financing (loss)/income
Unaudited Unaudited Audited Unaudited
Twelve Six Unaudited Twelve Six Unaudited
months months Six months months Six
ended ended months ended ended months
30 30 ended 30 30 ended
September September 31 March September September 31 March
2020 2020 2020 2019 2019 2019
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------- ---------- ---------- ---------- ----------- ----------
Interest
receivable 3 - 3 49 29 20
---------- ---------- ---------- ---------- ----------- ----------
Financing
income 3 - 3 49 29 20
---------- ---------- ---------- ---------- ----------- ----------
Bank facility
fees - - (6) (2) (4)
---------- ---------- ---------- ---------- ----------- ----------
Loss on
foreign
exchange (282) (190) (92)
---------- ---------- ---------- ---------- ----------- ----------
Financing
expenses (282) (190) (92) (6) (2) (4)
---------- ---------- ---------- ---------- ----------- ----------
Net financing
(loss)/income (279) (190) (89) 43 27 16
---------- ---------- ---------- ---------- ----------- ----------
Funds held in non-sterling accounts are revalued at the prevailing
exchange rate at each period end. These revaluation gains and losses
and those which have crystalised in the period are reflected in the
Income Statement.
At 30 September 2020 the Company held $US4.248m (GBP3.300m). At 31
March 2020 the Company held EUR3.948m (GBP3.509m).
7. Taxation
From 11 May 2007, the Group elected to join the UK REIT tax regime.
As a result, the Group was exempt from corporation tax on the profits
and gains from its investment business from this date, provided it
met certain conditions. Non-qualifying profits and gains of the Group
(the residual business) continued to be subject to corporation tax.
The directors consider that all the rental income post 11 May 2007
originates from the Group's tax-exempt business whilst it participated
in the UK REIT tax regime.
From the first closing date of the Company's share buy-back offer
on 16 September 2019, the Group no longer fulfilled certain of the
REIT tax regime conditions, principally owing to the proportion of
the Company's issued share capital that had thereby come to be held
by Thalassa Holdings Ltd. As a consequence of this and the Company's
adoption of its new investment policy in September 2020, it is considered
that the Group had exited the REIT regime with effect from 1 October
2018 and is from that date fully subject to corporation tax. However,
the Board believes that the Group's activities since then and the
availability of tax losses means that the Company's activities are
unlikely to have generated any material corporation tax liability
for periods since 1 October 2018 and no provision for corporation
tax has been made in these financial statements.
8. Dividends
No dividends have been paid since December 2012.
9. Investment properties
Allsop LLP, a firm of independent chartered surveyors valued the
Group's property portfolio at 30 September 2018 and 31 March 2019.
On each of these dates Allsop LLP performed a full valuation of 25%
of the Group's properties (including site inspections) and a
desktop valuation of the remainder, such that all properties owned
by the Group are inspected and valued over the two-year period. The
valuations, using assumptions regarding yield rates, void levels
and comparable market transactions, were undertaken in accordance
with the Royal Institute of Chartered Surveyors Appraisal and
Valuation Standards on the basis of market value. Market value is
defined as the estimated amount for which a property should
exchange on the date of valuation between a willing buyer and a
willing seller in an arm's length transaction, after proper
marketing wherein the parties had each acted knowledgeably,
prudently and without compulsion.
In July 2019 Allsop LLP provided a full valuation (including
site visits) on all the properties then held by the Group. In the
light of that valuation, for the 30 September 2019 financial
statements the Company had desktop valuations prepared by Allsop
LLP for all the properties in the portfolio at that date, except
for three properties which were considered to be held for sale and
were therefore valued at their expected sale price less sales
costs.
During the six months' period to 31 March 2020 sales were
completed on two properties considered at 30 September 2019 to be
held for sale.
In view of the market uncertainty and the operational
restrictions arising from the COVID-19 outbreak, the directors did
not consider it appropriate to carry out a fresh valuation of the
property portfolio at 31 March 2020. The six properties contained
in the portfolio therefore continued to be recognised at 31 March
2020 in the financial statements at their holding value in the
Company's accounts at 30 September 2019.
The six property assets held at 30 September 2020 were valued at
that date by Allsop LLP. In line with the Company's established
valuation policy, two of the larger assets were subject to full
RICS valuations, including site inspections, with the remainder
subject to desktop updates of their previous carrying values.
One property is considered to be held for sale and its holding
value in the Company's accounts therefore takes account of agreed
pricing and sales costs.
Material valuation uncertainty
The outbreak of the Coronavirus (COVID-19), declared by the
World Health Organization as a "Global Pandemic" on 11 March 2020,
significantly impacted the global economy, including the UK
property market. Given the unknown future impact that COVID-19
might have on the real estate market, less certainty should be
attached to the valuation than would normally be the case.
A reconciliation of the portfolio valuation at 30 September 2020
to the total value for investment properties given in the
Consolidated Balance Sheet is as follows:
30 September 31 March 30 September 31 March
2020 2020 2019 2019
GBP000s GBP000s GBP000s GBP000s
------------- --------- ------------- ---------
Portfolio valuation * 2,775 3,100 3,447 3,656
Investment properties
held for sale (330) (330) (677) (3,656)
Head leases treated as
investment properties
held under finance leases
in accordance with IFRS
16 369 369 369 -
Total per consolidated
Balance Sheet 2,814 3,139 3,139 -
* Revalued assets and held for sale at net realisable value
10. Earnings per share and basic earnings per share
The calculation of basic earnings per share was based on the
profit attributable to ordinary shareholders and a weighted average
number of ordinary shares outstanding, calculated as follows:
Unaudited Audited
Twelve Unaudited Unaudited Twelve Unaudited Unaudited
months Six months Six months months Six months Six months
ended ended ended ended ended ended
30 September 30 September 31 March 30 September 30 September 31 March
2020 2020 2020 2019 2019 2019
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
(Loss)/profit for
the period (GBP'000) (711) (652) (59) (1,874) 26 (1,900)
------------------------- -------------- ------------ -------------- -------------- ------------
Weighted average
number of shares
(000s) 31,861 31,861 31,861 31,861 31,861 91,670
------------------------- -------------- ------------ -------------- -------------- ------------
Treasury shares (000s) (9,164) (9,164) (9,164) (9,164) (9,164) (9,164)
------------------------- -------------- ------------ -------------- -------------- ------------
Effective weighted
average number of
shares (000s) 22,697 22,697 22,697 80,231 80,231 82,506
------------------------- -------------- ------------ -------------- -------------- ------------
Earnings/(loss) per
share (pence) (3.13) (2.87) (0.26) (2.34) 0.03 (2.30)
------------------------- -------------- ------------ -------------- -------------- ------------
Diluted earnings/(loss)
per share (pence) (3.13) (2.87) (0.26) (2.34) 0.03 (2.30)
------------------------- -------------- ------------ -------------- -------------- ------------
Note: The aggregate of the two six months periods to 30
September 2019 do not equal the total for the year owing to
different weighted average number of shares in each period. The
weighted aggregate number of shares in the six months period to
September 2020 is the same as the equivalent figure for the six
months period to 31 March 2020.
11. Net asset value (NAV)
30 September 31 March 30 September 31 March
2020 2020 2019 2019
GBP000s GBP000s GBP000s GBP000s
Number of shares in issue 31,861 31,861 31,861 91,670
Less: shares held in Treasury (9,164) (9,164) (9,164) (9,164)
------------------------------- --------- ------------- ---------
Weighted average number of 22,697 22,697 22,697 82,506
------------------------------- --------- ------------- ---------
30 September 31 March 30 September 31 March
2020 2020 2019 2019
GBP000s GBP000s GBP000s GBP000s
Net assets per Consolidated
Balance Sheet 6,281 6,933 6,992 25,853
Net asset value per share GBP0.28 GBP0.31 GBP0.31 GBP0.31
------------------------------- --------- ------------- ---------
12. Related parties
There have been no transactions with related parties which have
materially affected the financial position or performance of the
Group during the current or previous period nor have there been any
changes in related party transactions which could have a material
effect on the financial position or performance of the Company
during the six months of the current financial period. Following
the termination of the investment advisory agreement between the
Company and Principal Real Estate Europe Limited on 24 November
2019, including the period reported on, Thalassa Holdings Ltd, a
significant shareholder of the Company, has provided management
accounting and registered office facilities to the Company. Those
services have been supplied at cost, the value of which is not
regarded as material, and it is not considered that the arrangement
comprised a related party transaction.
13. Significant contracts
The management agreement between the Company and Principal Real
Estate Europe Limited ("Principal") was terminated on 24 November
2019. Under this agreement the Company had paid to Principal:
1. an annual management fee of 0.70% of the gross asset value of
the Company, subject to a minimum fee of GBP1m in each of the first
two years, GBP0.95m for the third year and GBP0.9m for the fourth
year. This minimum fell away in July 2018;
2. an annual performance fee of 20% of the recurring operating
profits above a pre-agreed target recurring profit;
3. fees for property sales, as follows:
up to GBP50m: nil
GBP50m - GBP150m: 0.5% of sales
over GBP150m: 1% of sales.
The Company paid no fees to Principal in respect of the six months
period to 30 September 2020. For the six months period to 31 March
2020 fees paid to Principal totalled GBP8,000 (6 months to 31 March
2019: GBP232,000; 12 months to 30 September 2020: GBP320,000).
ENDS
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014. Following the
publication of this announcement, this inside information is now
considered to be in the public domain.
LEI: 213800SOAIB9JVCV4D57
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END
IR FLFEEFILIVII
(END) Dow Jones Newswires
December 30, 2020 10:54 ET (15:54 GMT)
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