TIDMWSP
RNS Number : 4287C
Wynnstay Properties PLC
18 June 2021
The information communicated within this announcement is deemed
to constitute inside information for the purposes of the Market
Abuse Regulation(EU) No. 596/2014 as it forms part of UK domestic
law by virtue of the European Union (Withdrawal) Act 2018. Upon the
publication of this announcement, this information is considered to
be in the public domain.
WYNNSTAY PROPERTIES PLC
("Wynnstay" or the "Company")
FINAL RESULTS FOR YEARED 25 MARCH 2021, POSTING OF ANNUAL REPORT
AND ACCOUNTS AND NOTICE OF AGM
Wynnstay Properties PLC is pleased to announce its audited final
results for the year ended 25 March 2021 ("2021").
The Company today also announces that its annual report and
accounts for 2021 is available on its website
www.wynnstayproperties.co.uk and will shortly be posted to
shareholders, when a further announcement will be made.
The Company's Annual General Meeting ("AGM") will be held on
Tuesday 20 July 2021. Details of the arrangements for the AGM are
set out in the annual report and accounts.
For further information please contact:
Wynnstay Properties plc 020 7554 8766
Philip Collins (Chairman)
Panmure Gordon (UK) Limited (Nominated Adviser and Broker) 020
7886 2500
Alina Vaskina/Sandy Clark
LEI number is 2138006MASI24JYW5076.
For more information on Wynnstay visit:
www.wynnstayproperties.co.uk
WYNNSTAY PROPERTIES PLC
CHAIRMAN'S STATEMENT
The Covid-19 pandemic and the resulting measures and
restrictions imposed by the government have had a profound impact
on many aspects of business and economic activity, in addition to
their serious effects on families, friends and social activity; and
they have created great challenges for the conduct of business
operations as well as for all of us in our day-to-day personal
lives. At Wynnstay, we have adapted our operations, risen to these
challenges and worked constructively with our tenants, suppliers
and professional advisers. As a result, I am delighted to report
that Wynnstay has come through the year unscathed, in robust health
and with excellent financial performance for shareholders. This is
reflected in the following overview table.
Overview of financial performance
Change 2021 2020
-- Property income -5.8% GBP2,140,000 GBP2,271,000
-------- ------------- -------------
+2.1% GBP1,179,000 GBP1,155,000
* Profit before movement in fair value of investment
properties, property sales and taxation
-------- ------------- -------------
+2,970% GBP3,653,000 GBP123,000
* Profit after movement in fair value of investment
properties, property sales and taxation
-------- ------------- -------------
-- Earnings per share +2,970% 134.7p 4.5p
-------- ------------- -------------
* Dividends per share, paid and proposed +40.0% 21.0p 15.0p
-------- ------------- -------------
* Net asset value per share +15.0% 911p 792p
-------- ------------- -------------
* Loan to value ratio 29.4% 36.5%
-------- ------------- -------------
* Gearing ratio 32.4% 52.2%
-------- ------------- -------------
Impact of Covid-19 pandemic
In common with most other companies, we moved our internal
operations to remote working so that, for instance, all Board
meetings in the year have been held virtually as has all other
contact between Board members. Similarly other meetings with
parties concerning the portfolio have been held virtually wherever
possible.
Nevertheless, our Managing Director Paul Williams has continued,
as far as practicable and consistent with the restrictions in
place, to visit our properties, especially the multi-let estates,
to keep in touch with tenants, discuss the impact of the pandemic
on their businesses and to identify any potential issues affecting
our interests.
The impact of the pandemic on commercial property was the
subject of extensive press coverage in the early part of the year
with particular focus on the effect on certain sectors of the
market, notably retail, hospitality and leisure where Wynnstay does
not have a significant representation in its portfolio, and on
tenants' anticipated cash flow problems and thus on their ability
to pay their rents when due.
Following the lifting of the first lockdown in the early summer
of 2020, most of our tenants were able to resume their operations.
During the second half of 2020 and the first quarter of 2021,
despite further lockdowns and continuing restrictions, a number of
our tenants that are part of quoted public companies reported
increases in sales and profits as a result of higher levels of
consumer spending on their goods and services, mainly related to
home improvement and building trades.
As I reported last year, we have engaged particularly with small
business tenants facing potential cash flow problems to explore how
we might be able to help them. In particular we have accepted, as a
concessionary arrangement for a limited period, monthly instead of
quarterly in advance rent payments and, in a few cases, we have
deferred part of a quarter's rent, spreading its payment over the
remainder of our financial year. We have also granted two small
business tenants concessionary arrangements in the form of rent
holidays or longer term rent deferrals to assist them as their
businesses were particularly seriously affected by the pandemic.
The rental income foregone as a result of these arrangements in the
year was GBP29,000. There have also been cases where we have been
able to vary existing lease terms in a mutually beneficial way by
extending leases or removing tenant break options, thus providing
some short term cash flow relief for tenants while securing longer
term rental income and potential increase in capital value for
Wynnstay.
The pandemic has resulted in additional Board meetings and
consultations between the Directors, with close focus on our
tenants and the impact of government measures and restrictions on
their businesses. There has been intensive management activity
across the portfolio, which is described below. The outcome for the
financial year was very uncertain in the spring and summer of 2020.
In the event it has been a very successful year.
Portfolio
Rental income of GBP2,140,000 was slightly lower than last year
(2020: GBP2,271,000).
Whilst we did not receive income from the two vacant units at
Oakcroft Business Centre, Chessington, on which I have previously
reported, this was offset by additional income from elsewhere in
the portfolio where we have been through an extremely busy year of
lease renewals, rent reviews and new lettings of premises that
became vacant for various reasons. The benefits of this intensive
activity are also reflected in the outcome of the portfolio
revaluation described in the following section. Negotiations and
completion of these transactions have taken place within normal
timescales, despite the constraints of lockdowns and the
requirement for remote working.
A particular focus of the activity was our Quarry Wood
Industrial Estate at Aylesford, where the leases of nine of the
eighteen units, let to five longstanding tenants, came up for
renewal. We were able to retain all of our tenants and achieve very
satisfactory outcomes in the negotiations for new leases at
increased rents reflecting the healthy demand for good quality
industrial units both in the area and in the south-east of England
generally. In addition, we negotiated a surrender payment from one
tenant and the reletting of the unit to a new tenant on current
market terms, thus maintaining unbroken continuity of rental
income.
In negotiations with existing tenants at Petersfield Business
Park, we were also successful in renewing the lease of one unit at
an increased rent and in retaining the tenants of two other units
for the full remaining term of their leases by removing a future
tenant break option in return for a short rent holiday, to which
they would have been entitled if the future break option had not
been exercised. Both transactions again reflected the healthy local
market conditions for good quality premises and enabled us to
retain tenants and full occupancy of our property.
On Beaver Industrial Estate at Liphook, we successfully
completed one lease renewal and one rent review, again at increased
rents reflecting the local market conditions. One tenant, an
independent car parts wholesaler, went into liquidation in the
second half of the year owing several months' rent and the
appointed liquidator, who was unable to sell the business,
subsequently disclaimed the lease and handed the unit back to us
complete with all tenants' fixtures, fittings and stock. The unit
has been cleared of this stock which is being sold and, as a
result, we expect to receive some recoveries to set against the
rent owed. The unit is being refurbished and is on the market to
rent.
At City Trading Park Norwich, following the sale of a long
established business by our previous tenant, we agreed terms with
the new owner and renewed the leases of the three units that they
now occupy. At Heathfield, we negotiated a surrender payment from
one tenant and immediately relet the unit to a new tenant, who has
subsequently carried out significant improvements to the unit. At
Uckfield, we let two vacated units to new tenants at increased
rents, and at Hailsham we let a vacated unit to a tenant already
occupying two other units who required more space and, as part of
the letting, we extended the term of both the existing leases.
We were also successful in negotiations regarding the leases of
two longstanding tenants. The lease to Majestic Wine of our retail
warehouse property at Weston-super-Mare has been renewed for a
further period at an increased rent. After negotiations with our
tenant at Aldershot, including an agreement on various works to be
undertaken to enhance the structure and interior of the property to
which we have made financial contributions, a new lease has been
completed at a significantly increased rent.
At our Petersfield development site, Parkers Trade Park 2,
situated adjacent to our existing property at Bedford Road in the
main commercial area of the town, we have recently signed a
construction contract for the development. This will comprise a
terrace of three trade counter units totalling 12,750 square feet.
Construction started in late April and is expected to be completed
towards the end of the calendar year. We have also signed
agreements for lease on two of the three units to well-known trade
counter businesses, Screwfix and Toolstation. The third unit is
currently being marketed targeting principally, but not
exclusively, other trade counter occupiers.
It will be recalled that we had been seeking to relet the two
vacant units at Oakcroft Business Centre, Chessington since the
previous tenant vacated. While we were optimistic about securing
replacement tenants and there was some encouraging initial
interest, the commercial letting market for these units proved to
be limited, no doubt in part due to the pandemic and we therefore
decided to offer the whole property for sale. As announced on 22
February 2021, we achieved a price of GBP3.225 million compared to
the book value in our 2020 accounts of GBP2.12 million, thus
resulting in a profit of GBP1.105 million, before sale costs and
taxation. In addition, the sale enabled us to release a provision
of GBP122,000 being held in our accounts for repairs prior to
reletting, representing the dilapidations receipt from the former
tenant.
The result of all the intensive activity described above is
that, at the year end, the portfolio was 99% let, with the only
unlet premises being the vacant unit at Liphook which, as noted
above, is being refurbished and is on the market to rent.
Portfolio Valuation
Our Independent Valuers, BNP Paribas Real Estate, undertook the
annual revaluation of the Company's portfolio as at 25 March 2021
valuing it at GBP34,005,000. This represents an increase of
GBP1,865,000 on the valuation as at 25 March 2020, adjusted for the
sale of Oakcroft Business Centre, Chessington.
Revaluation adjustments, positive or negative, are reflected
together with property income and profits or losses from disposals
in the statement of comprehensive income, thus resulting this year
in higher earnings per share of 134.7p compared to the prior year
(2020: 4.5p). This accounting treatment can result in significant
variations in earnings per share over the years, as is the case
comparing this year with last year.
The Board consider the outcome of the revaluation to be
satisfactory, especially as it more than offsets the reduction last
year, which reflected the uncertainty at the start of the Covid
pandemic. It demonstrates the strengths of the changes that we have
made in the portfolio over recent years and the benefits of our
active management policy and of working closely with our tenants to
our mutual benefit.
Profits, Costs and Accounting Treatment of Property Income
Net income before movement in fair value of investment
properties, property sales and taxation for the year was
GBP1,184,000. The result is not dissimilar to the previous year
(2020: GBP1,155,000) although the figure for this year reflects
both other property income from dilapidations receipts and
additional property costs discussed further below.
The net profit of GBP1,066,000 from the sale of Oakcroft
Business Centre, Chessington is also reflected in the accounts for
the year together with a further GBP55,000 profit in respect of the
dilapidations receipt received on our former Basingstoke property
which was sold in a prior year.
The combined result of this net profit and the positive movement
in the fair value of investment properties (compared to the
negative movement in the prior year) and the other property income
from dilapidations receipts, resulted in profit before taxation for
the year of GBP4,048,000 (2020: GBP258,000).
Our policy of exercising tight control over administrative costs
has continued to be effective. Property costs were significantly
higher than in the prior year at GBP255,000 (2020: GBP116,000) for
two main reasons. First void costs, such as council tax, security
and insurance, were incurred in respect of the two unlet units at
Chessington until the property was sold. Secondly, as mentioned
above, we invested in significant improvements at our Aldershot
property as part of arrangements for the new lease with our
longstanding tenant.
Property income this year includes, in addition to rental
income, other property income in the form of dilapidations receipts
from outgoing tenants. Until the last few years, the amounts
involved have been modest. Recently they have become more
significant, as illustrated by the unutilised GBP122,000
dilapidations receipt in relation to the Chessington property.
The treatment of these receipts has been to account for the
obligation to incur the cost of repairs until such time as they are
not required. Following specialist accounting and taxation advice,
all unutilised dilapidations receipts have been taken to revenue.
In order to distinguish these receipts from normal rental income,
they are now recorded in revenue as GBP298,000 of other property
income for the year to 25 March 2021 (2020: GBPnil). Further
details are set out in the Financial Statements, Notes 2, 11 and
15.
Finance, Borrowings, Gearing and Refinancing of Bank
Facilities
At the year end, we held cash of GBP2.0 million (2020: GBP1.3m),
our borrowings were GBP10.0 million (2020: GBP12.5 million) and net
gearing was 32.4% (2020: 52.2%). Following the sale of the
Chessington property, we used a major part of the proceeds received
to reduce our borrowings by repaying in full the amount drawn down
under our revolving credit facility. Under this facility, we are
able to drawdown again up to GBP3.5 million if and when we wish to
do so. We also continue to have an arrangement that we can, in
principle and without commitment, increase our borrowings to a
maximum of GBP15 million.
Our current five year GBP10m fixed rate and GBP3.5m revolving
credit facilities with Handelsbanken plc expire in December 2021.
In late 2020, we invited the bank to renew the facilities for a
further period of just over five years to December 2026.
Handelsbanken provided indicative terms and subsequently confirmed
credit approval in February 2021.
On 14 June 2021 we signed an agreement for a new five-year
facility of GBP10 million, which offers the Company the choice at
drawdown of fixed or floating rates of interest linked to the Bank
of England Base Rate. Under the agreement, the financial covenants
are the same as in the existing facility and the facility will be
available for drawdown up to and including 17 December 2021. We
intend to drawdown under this new facility to refinance the
existing GBP10m facility on or before its expiry on 17 December
2021.
Due to the complexities of transitioning from LIBOR to Bank of
England Base Rate as the reference rate for revolving credit
facilities, Handelsbanken has advised that, as at 17 June 2021, it
is not yet in a position to offer to refinance the existing GBP3.5
million revolving credit facility. It currently hopes to begin
offering revolving credit facilities around the start of the
calendar quarter beginning 1 July 2021 and has indicated, without
formal commitment, that it intends (subject to contract, market
conditions, satisfactory due diligence and documentation) to
refinance our existing GBP3.5m facility. Indicative terms and a
draft agreement have been provided, with the same financial
covenants and the detailed terms being similar to those under the
new GBP10m facility.
Dividend
Over recent years we have sought to pursue a progressive
dividend policy that aims to provide shareholders with a rising
income commensurate with Wynnstay's growth and finances. Last year,
and in line with many quoted companies, we concluded that we had to
review our dividend policy and to pause its implementation due to
the uncertainties caused by the pandemic. As a result the second
dividend paid last year was reduced.
In the light of the excellent results for the year, the Board
considers that we can restore the policy and recommends a final
dividend of 13.0p per share (2020 second interim: 7.5p). The
comparable dividend for 2019 was 12.0p per share, so the final
dividend this year represents an increase of 8.3% on that, more
normal, year. An interim dividend of 8.0p per share (2020: 7.5p)
was paid in December 2020. The comparable total dividend for 2019
was 19.0p per share, so the total dividend for this year of 21.0p
per share represents an increase of 10.5% on that of two years
ago.
Subject to shareholder approval, the final dividend will be paid
on 27 July 2021 to shareholders on the register at the close of
business on 9 July 2021.
Outlook
The government measures in force over the last quarter of the
financial year have been relaxed in stages over the recent months.
For Wynnstay, as for many other businesses, the outlook will depend
on the shape and speed of recovery from the impact of the pandemic
and the permanent removal of those and any similar measures. This
is likely to depend on consumers' willingness to spend money saved
during lockdown and on government incentives to encourage such
spending for businesses to invest for the future.
We are very encouraged by the fact that our contacts with most
tenants suggest that they are positive about the outlook for their
businesses and also by the results of the intensive management
activity in the portfolio described above.
Our active, but conservative, approach to building the portfolio
has stood Wynnstay and you, as shareholders, in good stead over
many years, including over some very difficult periods in the
economy such as at the time of the banking crisis and now through
the pandemic. Our borrowings are very conservative relative to our
assets. We ended the year with GBP3.5m of headroom within our
facilities.
We continue to carefully monitor the receipts of our adjusted
rental income, taking account of the concessionary arrangements
mentioned above. I am pleased to report that, as at the date of
writing the Company has received 99% of the rental income due for
the first quarter of the current financial year commencing 26 March
2021.
Although we hope that the most serious effects of the pandemic
on tenants are now behind us, the Board considers that it is
important to monitor the position across the portfolio very
carefully and we continue to do so.
So while nothing can be certain especially given what we have
just been through, the Board remains confident about Wynnstay's
portfolio, its business and its future.
Colleagues and Advisers
Wynnstay has only one full-time employee, our Managing Director
Paul Williams. I, and my Non-Executive Director colleagues, are
part-time, as are our finance and company secretarial colleagues. I
would like to thank them all, as well as those who work with them
and our various advisers, for their contributions to meeting the
challenges over the past year, especially those arising from the
need to work remotely and flexibly to meet the constraints imposed
by the circumstances that we have all faced.
In recognition of his significant contribution in delivering his
objectives and an excellent outcome for shareholders in a
challenging and unusual year, the Board determined that Paul
Williams should receive a bonus for the financial year of
GBP30,000.
Shareholder Matters
From time to time we receive enquiries from shareholders with
questions about their shareholdings or about buying or selling
Wynnstay shares or transferring them, typically to relatives.
All enquiries about shareholdings, including changes of address
and bank details and about such transfers of shares, should be
directed to our Registrars, Link Group.
As regards buying or selling shares, this can be carried out by
registering the holding online with our Registrars, Link Group, via
their secure share portal www.signalshares.com , which also enables
shareholdings to be managed quickly and easily. Shares can, of
course, also be bought and sold in the usual way through a
stockbroker or an online platform.
The Board is aware that the liquidity in the market for Wynnstay
shares can be relatively thin, with only small volumes being traded
and involve large spreads between bid and offer prices. Over the
coming months we will be reviewing ways in which this issue might
be addressed and how the marketability of Wynnstay shares can be
improved generally. Any shareholder with views on this subject is
welcome to contact the Company to express them and we also expect
to engage with our shareholder base directly to seek opinions. We
hope to update shareholders on our conclusions following this
consultation at the time of the Interim Report in November.
We introduced last year the opportunity for shareholders to ask
the questions in writing that they might have wished to ask in
person at the Annual General Meeting since that was a closed
meeting due to the pandemic. We are continuing this practice this
year and shareholders may of course raise questions with the
Company at any time during the year, whether to me or to the
Managing Director.
"Boiler Room Scams"
Shareholders in many quoted companies receive unsolicited phone
calls, emails or correspondence, commonly called "boiler room
scams", concerning investments matters and often mentioning the
names of individual companies like us. Typically, they will claim
to be "brokers", "investment banks" or "law firms" representing a
party with a holding that wishes to make a takeover offer and to
buy shares at prices much higher than market prices. If the
recipient engages, this usually leads to a request for shareholders
to provide personal financial information, including bank details,
or to pay money for documents or worthless securities. These
contacts generally come from organisations based overseas or using
false UK addresses or phone numbers routed from abroad. Even if a
caller or communication may sound or appear credible, the purpose
is usually fraudulent: to obtain either personal information or
money, or both. Approaches can be persistent and persuasive unless
they are immediately declined.
As always, I urge all shareholders to continue to be vigilant
about any such approaches. There is nothing that we can do to deter
or stop them, or the use by callers of Wynnstay's name or details
of shareholdings. On Wynnstay's website (
www.wynnstayproperties.co.uk ), shareholders will also find a
warning and a link to other information about unsolicited
approaches regarding shares on the Financial Conduct Authority's
website ( https://www.fca.org.uk/scamsmart ) .
Annual General Meeting
As you know we normally hold the Annual General Meeting (AGM) in
London in mid to late July. The AGM provides an important and
valued opportunity for the Board to engage with shareholders. Last
year, it was not possible to hold the meeting in the normal way due
to the pandemic and therefore we held a "closed" meeting in
mid-September under the provisions enacted by the government to
facilitate the holding of AGMs during the pandemic.
During the preparation of our annual report to shareholders, it
seemed likely that due to the forthcoming relaxation or removal of
government measures and guidance, we would be able to hold the
meeting in the usual form and to welcome the maximum number of
shareholders we could accommodate within any continuing safety
constraints government measures and guidelines and the requirements
of the venue.
However, in the past few days, the government has announced that
the existing regulations will continue for at least another four
weeks and it seems possible that there could be a further extension
or, at least, some continuing restrictions. Most pertinently, the
current regulations place a limit on the number of individuals and
households permitted to gather indoors.
In the light of these developments, the Board has decided, with
great reluctance, to restrict attendance at this year's AGM. It
considered, but dismissed, the possibility of deferring the AGM
until mid-September due to the possibility of further waves of the
pandemic resulting in new restrictions after the summer.
The AGM will therefore be held at 2.30pm on Tuesday 20 July 2021
at the Royal Automobile Club, 89 Pall Mall, London SW1Y 5HS. The
Notice of Meeting is to be found at the end of this Annual Report.
As for all our meetings in recent years, the notice of meeting
includes, in addition to routine business, two further resolutions.
These resolutions would give the Board authority, limited in both
amount (5% of share capital) and time (December 2022 at the latest)
to issue shares, including shares held in Treasury, and to do so
without first offering them to existing shareholders.
The Board will ensure a quorum is present and we recommend that,
in view of the current regulations on indoor gatherings, no other
shareholders attend in person. The meeting will be purely
functional and address just the formal resolutions detailed in the
notice of meeting necessary to enable the Board to conduct the
business and affairs of the Company. Voting on all resolutions will
be conducted by poll vote and I strongly encourage you to complete
and return a form of proxy to ensure that your votes are
included.
You will need to appoint "the Chairman of the meeting" as your
proxy as no other person will be able to attend the AGM on your
behalf this year. To do so, simply follow the instructions on the
Form of Proxy and return your form so as to be received no later
than 48 hours before the commencement of the meeting.
S hareholders who have registered for Link services online can
also benefit from the ability to cast their proxy votes
electronically, rather than by post. Shareholders not already
registered for Link services online will need their investor code,
which can be found on their share certificate or dividend tax
voucher, in order to register.
In the unlikely event that a further change in government
regulation make it both possible and practicable to hold the
meeting at the last minute as an open meeting we will notify
shareholders via an announcement on the Regulatory News Services
and on our website.
To maximise shareholder engagement in these difficult
circumstances, shareholders are encouraged to ask those questions
in writing that they might have wished to ask in person at the AGM.
Questions should be emailed to
company.secretary@wynnstayproperties.co.uk or sent by letter to me
at the Company's office in advance of the AGM. You w ill receive a
written response and, if there are common themes raised by a number
of shareholders, we aim to provide a summary for all shareholders,
grouping themes and topics together where appropriate, on the
Company's website following the AGM.
Finally, on behalf of the Board, I would like to thank
shareholders for their continued support for Wynnstay over a period
of considerable uncertainty and challenges, which I hope is now
largely behind us so that we can all return to more normal ways of
personal and business life.
Philip Collins
Chairman
17 June 2021
WYNNSTAY PROPERTIES PLC
REPORT OF THE DIRECTORS 2021
The Directors present their One Hundred and Thirty-Fifth Annual
Report, together with the audited Financial Statements of the
Company for the year ended 25 March 2021.
Following the adoption by the Company of the Quoted Company
Alliance Corporate Governance Code (the Code) certain matters
required by the Code to be included in the Annual Report are now
addressed in this report, the Strategic Report or the Corporate
Governance Report with cross-references provided where appropriate.
The three reports should be read together with the Chairman's
Statement and the additional information required by the Code
published on the Company's website.
Business and Future Development
As the Code requires a description of the business, strategy and
business model promoting long-term value for shareholders to be
included in the Annual Report and similar information is also
required by company law to be included in the Strategic Report,
these matters are dealt with in the Strategic Report.
Financial Objectives and Risks
As the Code requires a description of effective risk management
systems to be included in the Annual Report and company law
requires a description of financial risk management objectives and
policies, information on exposure to risks and a description of the
principal risks and uncertainties facing a company, these matters
are all dealt with in the Strategic Report as well as in Note 1.3
of the financial statements .
Profit for the Year
The profit for the year after taxation amounted to GBP3,653,000
(2020: GBP123,000). Details of movements in reserves are set out in
the statement of changes in equity .
Dividends
The Directors have decided to recommend a final dividend of
13.0p per share for the year ended 25 March 2021 payable on 27 July
2021 to those shareholders on the register on 9 July 2021. This
dividend, together with the interim dividend of 8.0p paid on 18
December 2020, represents a total for the year of 21.0p (2020:
15.0p).
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Strategic
Report, the Directors' Report, the Corporate Governance Report, and
the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. The Directors prepared the
Company's financial statements in accordance with International
Financial Reporting Standards (IFRS), as adopted by applicable law.
The Directors must only approve the financial statements if they
are satisfied that they give a true and fair view of the state of
affairs of the Company and of the profit or loss of the Company for
the reporting period. In preparing these financial statements, the
Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether the financial statements have been prepared in
accordance with IFRS as adopted by applicable law; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of the financial statements may
differ from legislation in other jurisdictions.
Directors
The Directors holding office during the financial year under
review and their interests (including spouses, related parties and
non-beneficial interests, where applicable) in the ordinary share
capital of the Company at 25 March 2021 and 25 March 2020 are shown
below:
Ordinary Shares of 25p
25.3.21 25.3.20
P.G.H. Collins Non-Executive Chairman 850,836 850,836
C.P. Williams Managing Director 11,612 11,612
C.H. Delevingne Non-Executive Director 5,000 5,000
The interests shown above in respect of Mr. P.G.H. Collins
include non-beneficial interests of 229,596 shares at 25 March 2021
and 2020.
Mr. C.P. Williams has a service agreement with the Company under
which his employment is subject to six months' notice of
termination by either party.
In accordance with the Company's Articles of Association, Mr
Paul Williams and Mr Charles Delevingne retire by rotation and,
being eligible, offer themselves for re-election at the Annual
General Meeting.
Biographies of each of the Directors are available on the
Company's website.
Directors' Emoluments
Directors' emoluments for the year ended 25 March 2021 are set
out below:-
Total Total
Salaries Fees Pension Benefits 2021 2020
P.G.H. Collins - 42,500 - - 42,500 42,500
C.P. Williams 159,000 15,850 12,900 7,996 195,746 159,896
C.H. Delevingne - 15,850 - - 15,850 15,850
P. Mather - 15,850 - - 15,850 15,850
C.M. Tolhurst - 20,850 - - 20,850 20,850
Total 2021 GBP159,000 GBP110,900 GBP12,900 GBP2,446
GBP290,796
Total 2020 GBP129,000 GBP120,146* GBP12,600 GBP2,466
GBP264,192*
*Totals include fees of GBP9,246 paid to a former Director, Mr
T.J.C. Parker, in the financial year ended 25 March 2020.
The above figures for 2021 include a discretionary bonus payment
of GBP30,000 to Mr C.P. Williams being the amount determined by the
Board to reflect his performance during that year. No discretionary
bonus payment was determined by the Board to be payable for the
previous financial year.
Directors' and Officers' Liability Insurance
The Company has maintained Directors' and Officers' insurance as
permitted by the Companies Act 2006.
Interests in the Company's Shares
As at 17 June 2021, the Directors have been notified or are
aware of the following interests (including spouses, other related
parties and non-beneficial interests, where applicable, for both
financial years), which are in excess of three per cent of the
issued ordinary share capital of the Company, excluding shares held
in treasury:
No. of Ordinary Percentage of Percentage of
Shares of 25p Share Share
Capital 2021 Capital 2020
P.G.H. Collins 850,836 31.38% 31.38%
G. J. Gibson 272,192 10.04% 10.04%
D. N. Gibson 121,378 4.47% 4.47%
Dr. G.L.A. Bird 112,000 4.13% 4.13%
J.V. Bird 111,750 4.12% 4.12%
Going Concern
The Directors consider, as at the date of approving the
financial statements, that there is reasonable expectation that the
Company has adequate financial resources to continue to operate,
and to meet its liabilities as they fall due for payment, for at
least twelve months following the approval of the financial
statements.
Following the declaration by the World Health Organisation of
Covid-19 as a global pandemic in March 2020, governments in the UK
and elsewhere have taken lockdown and other measures which include
compulsory business closures, limitations on their operations and
restrictions on movement of people and on their activities. Whilst
these measures have gradually been lifted, this event has had the
potential to impact the Company and its business and is considered
further in the Strategic Report, which is expressly incorporated by
reference into this report.
The Company has performed a series of financial stress tests,
described in Note 1.1 to the Financial Statements which is
expressly incorporated by reference into this report, to ensure
that the Company has sufficient cash resources and bank facilities
and sufficient covenant margin to manage the potential financial
impact of the Covid-19 pandemic on its business under going concern
principles.
Internal Control
The Directors are responsible for the Company's system of
internal financial control, which is designed to provide
reasonable, but not absolute, assurance against material
misstatement or loss. In fulfilling these responsibilities, the
Board has reviewed the effectiveness of the system of internal
financial control. The Directors have established procedures for
planning and budgeting and for monitoring, on a regular basis, the
performance of the Company.
Statement as to Disclosure of Information to Auditors
Each of the persons who are Directors at the time when this
report is approved has confirmed that:
-- so far as each Director is aware, there is no relevant audit
information of which the Company's auditors are unaware; and
-- each Director has taken all the steps that ought to have been
taken as a Director, including making appropriate enquiries of
fellow Directors and the Company's auditors for that purpose, in
order to be aware of any information needed by the Company's
auditors in connection with preparing their report and to establish
that the Company's auditors are aware of that information.
Auditor
BDO LLP has indicated its willingness to continue in office and
a resolution will be proposed at the Annual General Meeting to
reappoint BDO LLP as auditor for the next financial year.
Annual General Meeting
The Notice of the Annual General Meeting, to be held on 20 July
2021, is set out at the end of the Annual Report .
By Order of the Board
Susan Wallace
Secretary
17 June 2021
WYNNSTAY PROPERTIES PLC
STRATEGIC REPORT 2021
The Directors present their Strategic Report for the year ended
25 March 2021.
Following the adoption by the Company of the Quoted Company
Alliance Corporate Governance Code (the Code) certain matters
required by the Code to be included in the Annual Report are now
addressed in this report, the Directors' Report or the Corporate
Governance Report with cross-references provided where appropriate.
The three reports should be read together with the Chairman's
Statement and the additional information required by the Code
published on the Company's website.
Business, Business Model, Strategy and Future Development
Wynnstay is a long-established, successful property investment
company focusing on acquiring, managing and developing commercial
property primarily, but not exclusively, in the south and
south-east of England.
Through careful property selection, active direct property
management and promoting constructive business relationships with
tenants, Wynnstay continues to grow and develop a diversified
property portfolio.
Wynnstay's strategy is to secure growth in net rental income and
net asset value to provide shareholders with long-term value,
including a progressive dividend policy consistent with an
appropriate level of dividend cover.
Key challenges in the execution of this strategy are identifying
and securing changes to the portfolio, whether by acquisition or
disposal, and managing the risks of the commercial property
market.
A review of the Company's business, its development and
performance for the year, its position at the end of the year and
its future prospects is included in the Chairman's Statement on
pages 4 to 10. The financial statements and notes are set out
below.
Financial Objectives and Performance Indicators
The key financial objectives for the Company are to grow the
rental income and the capital value of the property portfolio and
thus the net asset value per share. The pursuit of these objectives
has delivered the following results:
-- Decrease in rental income: 5.8% (2020: increase of 2.5%).
-- Increase in net asset value per share: 15.0% (2020: decrease of 1.9%).
The Directors consider that the rental income achieved to be
satisfactory in the circumstances in light of two units at Oakcroft
Business Centre, Chessington being vacant throughout the year. The
significant increase in net asset value largely results from the
sale of that property during the year and the fair value movement
of investment properties following the revaluation of the
investment portfolio as at 25 March 2021.
The Directors will continue to search for profitable investment
opportunities and make changes to enhance the value of the
portfolio as and when such opportunities arise.
Risks, Uncertainties and Effective Risk Management
The principal risks and uncertainties are those associated with
the commercial property market, which is cyclical by its nature and
include changes in the supply and demand for space as well as the
inherent risk of tenant failure. In the latter case, the Company
seeks to reduce this risk by requiring the payment of rent deposits
when considered appropriate and monitoring the income exposure to
any tenant contributing more than 2% of total rental income on a
quarterly basis.
Other risk factors include changes in legislation in respect of
taxation and the obtaining of planning consents, as well as those
associated with financing and treasury management including
interest rate risk. The Company's financial risk management
policies can be found at Note 19 of the financial statements.
In common with all other business activities, the Company is
exposed to many of the usual risks and uncertainties arising from
commercial, economic and political circumstances and events, as
well as to unpredictable external shocks, such as the Covid-19
pandemic.
Following the declaration by the World Health Organisation of
Covid-19 as a global pandemic, governments in the UK and elsewhere
have taken lockdown and other measures which include compulsory
business closures, limitations on their operations and tight
restrictions on movement of people and on their activities.
The Covid-19 pandemic and the government's lockdown and other
measures have not had a material adverse impact on the Company and
its business during the year. Whether they will do so in the future
will depend on the success of the measures taken by the government
to control Covid-19, its schemes to support business and the
overall impact on the UK economy and the shape and speed of the
recovery.
The main risks the Board have identified together with actions
that it has already taken and continues to take to ensure the
Company manages these risks and emerges from the Covid-19 pandemic
in a position of continued financial strength, are summarised
below:
-- Potential income reduction and bad debts as tenants have
difficulty in maintaining rent payments and potential voids within
the portfolio arising from tenant failures, resulting in additional
costs;
-- Impact on the economy and market sentiment generally
adversely affecting the commercial property market and commercial
property values;
-- Disruption to the businesses of letting agents, property
professionals and the general services on which the business
relies;
-- Disruption to the supply chain for raw materials and
construction products and restrictions on the labour market and
level of activity on site on any developments it may undertake;
-- Staff operating from home or otherwise unable to work or
absent from work, and reliance on remote working both within the
business and with our tenants, agents and suppliers.
The Company carefully vets prospective new tenants from a credit
risk perspective. Bad debts are mitigated by close engagement with
businesses within a diversified mix of tenants across the
portfolio. In addition, where possible, those tenants with viable
businesses are actively assisted and supported, especially small
and medium sized businesses that are encountering cash flow
difficulties arising from the pandemic.
The Board monitors carefully its adjusted rental income
receipts, taking account of any concessionary arrangements agreed
with tenants. The Company has received all of the adjusted rental
income due for the financial year ended 25 March 2021 and the
portfolio was 99% let by rental value as at 25 March 2021.
The Board will continue this careful monitoring and to take any
actions that may be required to support tenants as well as to
protect and recover income due. The Board has also intensified the
regular detailed review of the portfolio, including feedback from
engagement with tenants, in order to assess the risk of tenant
failures.
The Company uses an array of professional services, and all
these have been effectively working remotely for the most part
during the financial year. The Company did not experience any
difficulties in service provision.
Directors' duty to promote the success of the Company under
Section 172 Companies Act 2006
The Strategic Report is required to include a statement that
describes how the directors have had regard to the matters set out
in section 172(1) (a) to (f) of the Companies Act 2006 when
performing their duty under section 172. Some of the matters
identified in Section 172(1) are already covered by similar
provisions in the QCA Corporate Governance Code and have thus been
previously reported by the Company in the Corporate Governance
Statement, the Corporate Governance Report and the QCA Statement of
Compliance on our website. In order to avoid unnecessary
duplication, the relevant parts of those documents are identified
below and are to be treated as expressly incorporated by reference
into this Strategic Report.
Under section 172 (1) of the Companies Act 2006, each individual
Director must act in the way he considers, in good faith, would be
the most likely to promote the success of the company for benefit
of its members as a whole, and in doing so have regard (among other
matters) to six matters detailed in the section.
In discharging their duties, the Directors seek to promote the
success of Wynnstay for the benefit of members as a whole and we
have regard to all the matters set out in Section 172(1), where
applicable and relevant to the business, taking account of its size
and structure and the nature and scale of its activities in the
commercial property market. The following paragraphs address each
of the six matters in Section 172(1) (a) to (f).
(a) The likely consequences of any decision in the long term:
The commercial property market is cyclical by nature. Investing in
commercial property is a long-term business. The decisions that we
take must have regard to long term consequences in terms of success
or failure and managing risks and uncertainties. We cannot expect
that every decision we take will prove, with the benefit of
hindsight, to be the best one: external factors may affect the
market and thus change conditions in the future, after a decision
has been taken. However, we consider that our record of decisions
on acquisitions, disposals and active management of the portfolio
is very strong. This is reflected in the long term performance of
Wynnstay over the years in terms of increases in rental income, net
asset value and dividends paid to shareholders.
(b) The interests of the company's employees: We have only one
full time employee, who is the Managing Director. He sits on the
Board with the Non-Executive Directors. There are no other
employees.
(c) The need to foster the company's business relationships with
suppliers, customers and others: We have regularly reported in our
annual reports on the constructive relationships that Wynnstay
seeks to build with its tenants and the mutual benefits that this
brings to both parties; and we have extended this reporting over
the past two years following Principle 3 of the QCA Code to include
suppliers and others. This is therefore addressed under Principle 3
in the QCA Compliance Statement. In the past year, it has been
vital to foster our business relationships with tenants given
external factors affecting business and the economy such as such as
political uncertainty and the Covid-19 pandemic.
(d) The impact of the company's operations on the community and
the environment: This is also addressed under Principle 3 of the
QCA Code in the QCA Compliance Statement. Due to its size and
structure and the nature and scale of its activities, the Board
considers that the impact of Wynnstay's operations as a landlord on
the community and the environment is low. Wynnstay's assets are
used by its tenants for their own operations rather than by
Wynnstay itself. In the past year, Wynnstay has not been made aware
of any tenant operations that have had a significant impact on the
community or the environment. In relation to planned developments,
Wynnstay seeks to ensure that designs and construction comply with
all relevant environmental standards and with local planning
requirements and building regulations so as not to adversely affect
the community or the environment.
(e) The desirability of the company maintaining a reputation for
high standards of business conduct: This is addressed under
Principle 8 of the QCA Code in the Corporate Government Statement
and in the QCA Compliance Statement. The Board considers that
maintaining Wynnstay's reputation for high standards of business
conduct is not just desirable: it is a valuable asset in the
competitive commercial property market.
(f) The need to act fairly as between members of the company:
Wynnstay has only one class of shares. Thus all shareholders have
equal rights and, regardless of the size of their holding, every
shareholder is, and always has been, treated equally and fairly.
Relations with shareholders are further addressed under Principles
2, 3 and 10 of the QCA Code in the Corporate Governance Report and
the QCA Compliance Statement. We have been reviewing how we
communicate with shareholders and we encourage shareholders to
adopt electronic communications and proxy voting in place of paper
documents where this suits them as well as to raise questions in
writing if they are unable to attend annual general meetings.
This Strategic Report was approved by the Board and is signed on
its behalf by:
Philip Collins
Director
17 June 2021
WYNNSTAY PROPERTIES PLC
CHAIRMAN'S CORPORATE GOVERNANCE STATEMENT
As Chairman, it is my responsibility, working with my fellow
Board colleagues, to ensure that good corporate governance
arrangements and standards apply within the Company. Our corporate
governance structure has evolved over many years since we became
one of the first companies admitted to AIM in 1995 and for some
time now our Annual Report has described our structure. We have
adopted and adapted practices and procedures to promote good
governance that are considered appropriate for a company of
Wynnstay's size and structure and the nature and scale of its
activities. We have strived, as the business has grown and changed,
for continual improvement making changes in recent years, for
instance, in management information flows and risk management
reviews.
In September 2018, the Company adopted the Quoted Companies
Alliance (QCA) Corporate Governance Code (the Code). The Code is
constructed around ten broad principles, which are set out in the
Corporate Governance Report.
Our Statement of Compliance has been reviewed and updated
concurrently with the preparation of this Annual Report and will be
placed on the website together with the index to signpost the
location of disclosures required by the Code.
At Wynnstay, we apply the principles of the QCA Code to the
extent reasonable and practicable for a company of our size and
structure and the nature and scale of our activities, recognising
the flexibility that lies within the Code so that it is neither a
bureaucratic, box-ticking exercise nor results in unnecessary,
inappropriate or burdensome processes and procedures. So, for
instance, we do not see the need, in a company of this size with
one full-time employee, the Managing Director, for separate
remuneration and audit committees, where the functions undertaken
typically by those committees can be fully and properly carried out
by the Non-Executive Directors working formally as a group to
consider remuneration and the audit plan, process and outcome. We
have used individual and group review and self-assessment suited to
our small size and structure, rather than formal external Board and
individual performance reviews. During the financial year the Board
conducted an evaluation of its performance through a
self-assessment process. The results are described under Principle
7 of the Code in the Corporate Governance Report. The evaluation is
considered to have been worthwhile and delivered useful insights to
the work of the Board.
The Board acknowledges that a corporate culture based on sound
ethical values and behaviours is an asset and provides competitive
advantages in the commercial property market where competition is
intense and prospective and existing tenants are seeking good
quality premises that are suited to their needs from a considerate,
reliable landlord. Wynnstay aims to conduct its business with a
high degree of professionalism, to operate within appropriate
professional standards and legal and regulatory requirements and to
act with honesty and integrity in a manner that gives confidence to
those with whom it deals.
I consider that Wynnstay's governance structures and processes
are in line with its corporate culture, and are appropriate to its
size and structure, the nature and scale of its activities and its
capacity, appetite and tolerance for risk and thus I consider them
to be "fit-for-purpose". They have evolved over time in parallel
with its objectives, strategy and business model and are suitable
for the Company's growth plans in the short to medium term and I,
with my colleagues on the Board, continue to keep them under review
and to make changes where required.
Philip Collins
Chairman
17 June 2021
WYNNSTAY PROPERTIES PLC
CORPORATE GOVERNANCE, REMUNERATION AND AUDIT REPORTS
Introduction
This report is presented by reference to each of the ten
principles contained in the Quoted Companies Alliance (QCA)
Corporate Governance Code (the Code) under a concise heading for
each principle. Where the QCA recommends that a principle should be
addressed in the Annual Report, we do so in this report, the
Directors' Report or the Strategic Report with cross-references
provided where appropriate. The three reports should be read
together with the Chairman's Statement and the additional
information required by the Code published on the Company's
website, including the Statement of Compliance. Where the Code
recommends that a principle should be addressed on the Company's
website, this report refers to the principle only and signposts to
the website, including to the Statement of Compliance. The index
required by the Code to signpost where the disclosures required by
the Code are located forms part of the Statement of Compliance. For
reasons explained below this report covers audit and remuneration
matters as well as corporate governance.
Principle 1: Establish a strategy and business model which
promote long-term value for shareholders
A description of the application of Principle 1 is recommended
by the Code to be included in the annual report and by company law
is required to be included in the Strategic Report. We therefore
deal with Principle 1 in that report.
Principle 2: Seek to understand and meet shareholder needs and
expectations
A description of the application of Principle 2 is recommended
by the Code to be included on a company's website. We therefore
deal with Principle 2 in the Statement of Compliance on the
Company's website.
Principle 3: Take into account wider stakeholder and social
responsibilities and implications for long-term success
A description of the application of Principle 3 is recommended
by the Code to be included on the Company's website. We therefore
deal with Principle 3 in the Statement of Compliance on the
Company's website.
Principle 4: Embed effective risk management, considering both
opportunities and threats, throughout the organisation
A description of the application of Principle 4 is recommended
by the Code to be included in the annual report. Under company law,
the Directors' Report must include a description of financial risk
management objectives and policies and information on exposure to
price risk, credit risk, liquidity risk and cash flow risk and the
Strategic Report must include a description of the principal risks
and uncertainties facing a company. We therefore deal with
Principle 4 in these reports.
Principle 5: Maintain the board as a well-functioning, balanced
team, led by the Chair
A description of the application of Principle 5 is recommended
by the Code to be included in the annual report. The information
given below should be read together with the additional information
required by the Code to be given under Principles 6, 7, 8 and 9
provided in this report, elsewhere in this Annual Report and in the
Statement of Compliance on the Company's website, as recommended by
the Code.
The Code requires the identification of those directors who are
considered to be independent and a description of the time
commitment required from directors including the number of meetings
of the Board, and of any committees, during the year, together with
the attendance record of each Director.
The Board comprises one executive, the Managing Director, and
four Non-Executive Directors, including the Chairman. The Board
considers that all the Non-Executive Directors are independent. The
biographies of the all the Directors are available on the Company's
website .
Philip Collins, the Non-Executive Chairman, has been a Director
since 1988 and became Chairman in 1998. He has become a significant
shareholder, having decided to invest over this period, to
demonstrate his confidence in Wynnstay's long-term prospects. He
has always placed the interests of all shareholders, and Wynnstay's
long term success, at the centre of his chairmanship, as evidenced
by his actions and reports to shareholders. His knowledge of the
business and of shareholders, and his experience in both the
private and public sectors, are all valuable to the Board's
deliberations. There is no evidence that his tenure or his
shareholding has had any adverse impact on his independent
judgement.
Charles Delevingne has served as a Non-Executive Director since
June 2002. Notwithstanding the length of his service, Mr Delevingne
continues to demonstrate his commitment to fulfilling his role as a
Non-Executive Director, providing direction on business strategy
and advice on business operations using his skills and experience
in commercial property. He is not involved in the daily management
of the Company, nor in any relationships or circumstances that
might give rise to a conflict of interest or interfere with his
exercise of independent judgment. In addition, he continues to
demonstrate the attributes of an independent non-executive director
and there is no evidence that his tenure has had any adverse impact
on his independent judgment.
Paul Mather and Caroline Tolhurst were appointed to the Board in
March 2017 and were deemed independent on appointment and remain
so. They are both Chartered Surveyors and have many years of
experience in commercial property and property investment
management as well as, in the case of Caroline Tolhurst, in
corporate governance through her qualification and experience as a
Company Secretary.
The Non-Executive Directors are expected to devote such time as
is necessary for the proper performance of their duties. Overall
the Non-Executive Directors, other than the Chairman, are expected
to spend a minimum of 10 working days a year on the Company's
business. In practice, after taking account of 7-8 scheduled Board
meetings a year, preparation time, site visits and other
requirements mentioned below, 12-15 days per annum would be
typical. The Chairman typically spends the equivalent of 25-30
working days per annum on the Company's business. The following
table shows directors' attendance at the 12 Board meetings in the
past financial year ended 25 March 2021.
Director Board meetings
Philip Collins 12/12
---------------
Paul Williams 12/12
---------------
Charles Delevingne 12/12
---------------
Paul Mather 12/12
---------------
Caroline Tolhurst 11/12
---------------
In addition to these meetings, all the Directors took part in
two strategy discussions and two Directors also took part in Board
sub-committee meetings authorised to approve the final texts of
documents or transactions on behalf of the Board.
In view of the Company's size and nature, the Board does not
consider that the establishment of Board committees, such as a
Remuneration Committee, a Nomination Committee or an Audit
Committee, is appropriate. Reports of the Non-Executive Directors
consideration of Remuneration and Audit matters are covered under
Principle 10 below, as recommended by the Code.
In relation to nominations, these are managed by the
Non-Executive Directors, or delegated to an ad hoc committee of
them, who report with recommendations to the Board. The approach to
succession planning and appointments is addressed, as recommended
by the Code, under Principle 7 in the Statement of Compliance on
the Company's website.
Principle 6: Ensure that between them directors have the
necessary up-to-date experience, skills and capabilities
The application of Principle 6 is recommended by the Code to be
included in the annual report and is therefore included in this
report, as well as elsewhere in this Annual Report, which should be
read together with the information provided under Principles 5, 7,
8 and 9 in this report and on the Company's website.
The Code requires disclosure of the identity of each Director;
the relevant experience, skills, personal qualities that each
brings to the Board; how the Board as a whole contains the
necessary mix of experience, skills and qualities (including gender
balance) and capabilities to deliver the strategy over the medium
to long-term; how each director keeps his/her skill-set up-to-date;
where external advisers have been engaged, their role and where
external advice on significant matters has been obtained; and any
internal advisory roles.
The names of the Directors and their experience, skills and
capabilities are set out on the Company's website. Reference is
also made to the information on each of the Non-Executive Directors
given under Principle 5 above.
The Managing Director, Paul Williams, has many years of
practical experience in property investment and management. The
Board has engaged experienced professionals to manage accounting,
financial and company secretarial matters.
Alan Palmer, the Director of Finance, although not a Board
Director, attends all Board meetings and advises the Board on
accounting and financial matters. He has extensive experience of
the commercial property sector, with former senior roles in
finance, treasury and corporate finance in quoted property
companies. His services are provided through The FD Centre Limited,
a specialist provider of part-time Finance Director services to
small and medium sized enterprises (SMEs).
Susan Wallace FCIS, Company Secretary, is a Chartered Secretary
and a founding partner of Bruce Wallace Associates Limited, a
specialist provider of company secretarial and compliance services
to SME businesses and quoted companies. In her role, she is
supported by other professionals in her company.
The Board considers that the experience and knowledge of each of
the Directors and the experienced professionals is appropriate for
the Company's current operations and strategy and gives them the
ability to constructively challenge strategy, scrutinise
performance and assess risk and to deliver the Company's strategy
over the medium to long term.
Directors keep their skill sets up-to-date with a combination of
attendance at industry events, individual reading and study and
experience gained from other board roles. The Company Secretary is
responsible for ensuring the Board is aware of any applicable
regulatory changes and updates the Board as and when relevant.
Directors are able to take independent professional advice in the
furtherance of their duties, if necessary, at the Company's
expense.
The Company calls on the services of specialist external
advisers in the usual way for its day-to-day business needs.
The Chairman, Senior Independent Director, Company Secretary and
Director of Finance, working in their respective roles and
together, advise and support the Board as a whole, drawing on
specialist external advisers where necessary.
Principle 7: Evaluating board performance based on clear and
relevant objectives, seeking continuous improvement
The application of Principle 7 is recommended by the Code to be
included in part in the annual report and in part on a company's
website. The Company considers that it is convenient to deal with
most of these matters in one place in this report.
After the end of each financial year, the Chairman usually holds
a meeting with the Non-Executive Directors individually and as a
group without the Managing Director. The Non-Executive Directors
also meet annually without the Chairman to appraise the Chairman's
performance. These meetings are intended to provide an opportunity
for open dialogue on individual and collective performance and on
any necessary changes required.
During the year the Board carried out an internal board
evaluation based on a set of questions typically used by smaller
companies for this purpose. The Directors were asked to rate the
Board's performance by providing a score, within a range of 0-5,
and comments for each question as well as to suggest ideas to
improve the working of the Board. The scores and comments were
amalgamated into an anonymised results schedule, which was then
considered by the Board. The total ratings and average scores for
each question and all the comments submitted were reviewed.
The discussion of the results identified a number of actions to
improve performance. These included a more comprehensive and
systematic approach to risk management, improvements to the
content, presentation and timeliness of Board reports and increased
Board engagement on longer-term and strategic issues. These actions
are being taken forward in 2021 and include changes to the
scheduling and content of Board meetings and discussions over the
year.
The Board will carry out a similar evaluation exercise during
the current financial year, which will include the effectiveness of
the changes implemented. Given the size and nature of the Company's
business, the Board currently does not consider it would be an
appropriate use of cash resources to engage an external firm to
undertake a formal evaluation although it will keep this under
review.
The approach to succession planning and appointments is
addressed, as recommended by the Code, under Principle 7 in the
Statement of Compliance on the Company's website.
Principle 8: Promote a corporate culture based on ethical values
and behaviours
The application of Principle 8 is recommended by the Code to be
addressed in the Chairman's Corporate Governance Statement.
Ensuring the means to determine that values and behaviours are
recognised and respected is addressed, as recommended by the Code,
under Principle 8 in the Statement of Compliance on the Company's
website.
Principle 9: Maintain governance structures and processes that
are fit-for-purpose, and support good decision making
A high-level explanation of the application of Principle 9 is
recommended by the Code to be provided in the Chairman's Corporate
Governance Statement.
The Code recommends that supplementary detail required by the
Code (role and responsibilities of Directors, role of committees,
matters reserved for the Board and plans for evolution of the
governance framework) is addressed on the website and it is so
addressed under Principle 9 in the Statement of Compliance on the
Company's website.
Principle 10: Communicate how the company is governed and is
performing by maintaining a dialogue with shareholders and other
relevant stakeholders
The application of Principle 10 of the Code is recommended by
the Code to be included in part in the annual report and in part on
the website. The Company follows these recommendations and
addresses the work of committees, including in relation to audit
and remuneration and the identification and reasons for any
non-publication of disclosures under the principles set out in the
Code in this report.
The other matters, being the outcome of all general meeting
votes and intended actions on and reasons for significant votes
cast against resolutions, are shown on the Company's website,
including under Principle 10 of the Statement of Compliance; and
historical annual reports, notices and general meetings and other
governance-related material are included on the Company's
website.
Communication and dialogue with shareholders and other relevant
stakeholders has already been addressed above in this report. The
performance of the business during the last financial year is
reviewed in detail in the Chairman's Statement, the Directors'
Report and the Strategic Report and elsewhere in the Annual
Report.
The Board considers that the existing communication and
reporting structures allow open dialogue between shareholders and
the Board and provide shareholders with a good understanding of the
business.
The Code recommends the annual report to describe the work of
committees and recommends inclusion in the annual report. As
already mentioned above, the Board does not have formally
constituted committees, with the Non-Executive Directors acting as
a group in relation to audit and remuneration.
The following paragraphs report on the work of the Non-Executive
Directors in relation to audit and remuneration matters in the
year.
Audit Report
The Senior Independent Director and the Director Finance met and
discussed the audit with the external auditor before the year-end
and a draft Audit Planning Report prepared by the auditors was
reviewed subsequently by the Board. At the completion of the audit,
the auditor presented its Audit Completion Report to the
Non-Executive Directors before the Financial Statements were
presented for Board approval.
The discussions enabled the auditor to explain the proposed work
and its outcome and the Non-Executive Directors to raise any
issues. It is considered that the process worked well and the audit
did not raise any material issues therefore the auditors were able
to issue their audit report in the usual form.
Remuneration Report
The Directors currently determine remuneration, with the
Non-Executive Directors determining the remuneration of the
Executive Director and the Non-Executive Directors (other than the
Chairman) determining the Chairman's remuneration. Directors' fees
are determined by the whole Board. Details of the Directors'
remuneration are set out in the Directors' Report.
It is the Company's policy that the remuneration of Directors
should be commensurate with the services provided by them to the
Company and should take account of published data on reasonable
market comparables, where available and relevant to our
situation.
The Non-Executive Directors meet after the end of the financial
year to review the performance of the Managing Director and
determine the level of his remuneration and any bonus. Remuneration
has been determined historically by reference to a mixture of
publicly available remuneration studies relating to the relevant
specialism and role, other AIM companies and a few private property
companies. However, such information has become less readily
available in recent years and may not in any event be applicable to
our particular circumstances. Levels of bonus are determined by
reference to the assessment of performance against objectives for
the business. This process is necessarily subjective but is
considered to deliver a reasonable result for the individual, the
Company and its shareholders. For the year ended 25 March 2021, it
was agreed at the beginning of the year that, particularly in the
light of the circumstances arising from the Covid-19 pandemic,
there would be no increase in the Managing Director's salary for
the year. Following the end of the year, it was agreed that a bonus
was payable for the year. Details of remuneration are disclosed in
the Directors' Report.
Directors' fees are determined primarily by reference to the
fees payable in other AIM quoted companies, with the level being
set towards the lower end of the range. The Chairman's remuneration
is set having regard to the commitment required to carry out the
function and its responsibilities and having regard to the level of
Directors' fees and, to some extent, comparables among other AIM
companies. In the light of the circumstances arising from the
Covid-19 pandemic, it was agreed at the beginning of the year that
there should be no increase in Directors' fees or Chairman's
remuneration for the year ended 25 March 2021.
This Report was approved by the Board and is signed on its
behalf by:
Philip Collins
Director
17 June 2021
INDEPENT AUDITOR'S REPORT
TO THE MEMBERS OF WYNNSTAY PROPERTIES PLC
Opinion on the financial statements
In our opinion financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 25 March 2021 and of its profit for the year then
ended;
-- have been properly prepared in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006; and
-- have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Wynnstay Properties
PLC for the year ended 25 March 2021 which comprise the Statement
of Comprehensive Income, the Statement of Financial Position, the
Statement of Changes in Equity, the Statement of Cash Flows, and
notes to the financial statements, including a summary of
significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and
international accounting standards in conformity with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Independence
We remain independent of the Company in accordance with the
ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC's Ethical
Standard as applied to listed entities, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
Directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the Directors' assessment of the Company's ability to
continue to adopt the going concern basis of accounting
included:
-- Assessment of the Directors' cash flow forecasts including
scenarios designed to test possible falls in rental income,
including liquidity for the risks of vacant space when leases
expire and properties are not re-let during the forecast period and
on various assumptions regarding the costs, timing.
-- Review of the Directors' modelling of financial covenant
ratios, including tests of a major possible diminution in property
portfolio valuation and of interest cover ratios; and consideration
of whether cash balances and borrowing facilities cover at least
twelve months of operations, including financing costs and
continuation of employment and advisory costs as currently
contracted without any reduction for cost saving initiatives;
-- Substantiating the cost and timing of the impact of the
expected development spend by reference to the project appraisal on
cash flow over that period; and
-- Obtaining evidence in relation to the re-financing of the
Company's borrowings which are described in Note 16.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Company's ability to continue as a going concern for a period of at
least twelve months from when the financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
Overview
2021 2020
KAM 1 Valuation Valuation
Key audit matters of investment of investment
properties properties
Group financial statements as a whole
GBP356,000 (2021: GBP358,000) based
Materiality on 1% (2020: 1%) of gross assets.
-------------------------------------------
An overview of the scope of our audit
Our Company audit was scoped by obtaining an understanding of
the Company and its environment, including the Company's system of
internal control, and assessing the risks of material misstatement
in the financial statements. We also addressed the risk of
management override of internal controls, including assessing
whether there was evidence of bias by the Directors that may have
represented a risk of material misstatement.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified, 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.
This matter was addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on this
matter.
Key audit matter How the scope of our audit addressed
the key audit matter
Valuation The Company holds In response to this matter, our audit
of investment investment properties procedures included:
properties which comprise properties * We compared the key valuation assumptions made by
owned by the Company management, which we consider relate to the market
The accounting held for rental yields appropriate to the sector and location of the
policies income. Investment properties, against our independently formed market
relating properties are valued expectations. We utilised our in-house property
to investment by independent external specialists to assist us with this process. Variances
properties valuers whose details were evaluated through challenge of the valuers and
are disclosed are disclosed in relevant corroborative evidence and accumulated to
in Note Note 10 using data determine whether they supported the overall
1.2. provided by the valuation.
Directors.
The valuation of * We tested the accuracy of key observable valuation
investment properties inputs, primarily passing rental income and lease
requires significant terms, to the information provided to the valuers for
judgement in determining use in their valuation.
the appropriate
inputs to be used
in the model and * We met with management's external valuer to discuss
there is therefore and challenge the valuation methodology and key
a risk that the assumptions used within their model, and to determine
properties are incorrectly whether there were any indicators of undue management
valued. influence on the valuations.
* We assessed the competency, qualifications,
independence and objectivity of the external valuers
engaged by the Company and reviewed the instructions
provided to the valuer for completeness, unusual
arrangements and to check if there was any evidence
of management bias.
Key observations:
We did not identify any indicators to
suggest that the valuation of the Company's
investment properties was materially
misstated.
---------------------------- -------------------------------------------------------------
Our application of materiality
We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which
misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability
that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent
of testing needed. Importantly, misstatements below these levels
will not necessarily be evaluated as immaterial as we also take
account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality
for the financial statements as a whole and performance materiality
as follows:
2021 2020
GBP GBP
Materiality 356,000 358,000
------------------------- -------------------------
Basis for determining 1% of gross assets 1% of gross assets
materiality
------------------------- -------------------------
Rationale for Users are focused Users are focused
the benchmark on the carrying on the carrying value
applied value of the portfolio of the portfolio
------------------------- -------------------------
Performance 75% of materiality 75% of materiality
materiality -267,000 -268,500
------------------------- -------------------------
Basis for determining The level of performance The level of performance
performance materiality was materiality was set
materiality set after considering after considering
a number of factors a number of factors
including significant including significant
transactions in transactions in the
the year, the expected year, the expected
value of known and value of known and
likely misstatements, likely misstatements,
and management's and management's
attitude towards attitude towards
proposed misstatements proposed misstatements
------------------------- -------------------------
Reporting threshold
We agreed with the Non-Executive Directors that we would report
to them all individual audit differences in excess of GBP17,800
(2020 - GBP17,900) . We also agreed to report differences below
these thresholds that, in our view, warranted reporting on
qualitative grounds.
Other information
The Directors are responsible for the other information. The
other information comprises the information included in the annual
report and financial statements other than the financial statements
and our auditor's report thereon. Our opinion on the financial
statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express
any form of assurance conclusion thereon. Our responsibility is to
read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work
performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and
matters as described below.
Strategic In our opinion, based on the work undertaken in the course
Report and of the audit:
Directors' * the information given in the Strategic report and the
report Directors' report for the financial period for which
the financial statements are prepared is consistent
with the financial statements; and
* the Strategic report and the Directors' report have
been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of the
Company and its environment obtained in the course of
the audit, we have not identified material misstatements
in the Strategic report or the Directors' report.
Matters on We have nothing to report in respect of the following
which we matters in relation to which the Companies Act 2006 requires
are required us to report to you if, in our opinion:
to report * adequate accounting records have not been kept, or
by exception returns adequate for our audit have not been received
from branches not visited by us; or
* the financial statements are not in agreement with
the accounting records and returns; or
* certain disclosures of Directors' remuneration
specified by law are not made; or
* we have not received all the information and
explanations we require for our audit.
-------------------------------------------------------------------
Responsibilities of Directors
As explained more fully in the Statement of Directors'
Responsibilities, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the
Directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- Through assessing our cumulative acquired knowledge and
review of relevant sector information, we gained an understanding
of the legal and regulatory framework applicable to the Company and
the industry in which it operates, and considered the risk of acts
by the Company that were contrary to applicable laws and
regulations, including fraud;
-- We focused on laws and regulations that could give rise to a
material misstatement in the financial statements, including, but
not limited to, the Companies Act 2006, the AIM Rules and tax
legislation;
-- We evaluated management's incentives and opportunities for
fraudulent manipulation of the financial statements (including the
risk of override of controls), and determined that the principal
risks were related to posting inappropriate journal entries to
manipulate financial results and management bias in accounting
estimates;
-- We discussed among the engagement team how and where fraud
might occur in the financial statements and any potential
indicators of fraud. As part of this discussion, we identified
potential for management bias in the valuation of investment
properties. The key audit matters section of our report explains
this matter in more detail and also describes the specific
procedures we performed in response to that key audit matter.
Furthermore, we communicated relevant identified laws and
regulations and potential fraud risks to all engagement team
members and remained alert to any indications of fraud or
non-compliance with laws and regulations throughout the audit;
-- Our tests included:
o obtaining an understanding of the control environment in
monitoring compliance with laws and regulations and we considered
the adequacy of controls around procurement fraud;
o obtaining and reviewing supporting documentation, concerning
the Company's policies and procedures relating to:
-- identifying, evaluating and complying with laws and
regulations;
-- detecting and responding to the risks of fraud; and
-- the internal controls established to mitigate risks related
to fraud or non-compliance with laws and regulations.
o enquiring of management as to:
-- the risks of non-compliance and any instances thereof and
existence of any actual and potential litigation and claims;
and
-- whether they were aware of any instances of non-compliance
and whether they have knowledge of any actual, suspected or alleged
fraud.
o performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;
o reviewing of Board meeting minutes; and
o reviewing the financial statement disclosures and agreeing to
supporting documentation where relevant to assess compliance with
relevant laws and regulations discussed above.
-- We also addressed the risk of management override of internal controls by:
o testing the appropriateness of journal entries, in particular
any journal entries posted with unusual account combinations,
journals posted by senior management, journals posted and reviewed
by the same individual and consolidation journals;
o assessing whether the judgements made in making accounting
estimates are indicative of a potential bias by the Directors that
represented a risk of material misstatement due to fraud; and
Our audit procedures were designed to respond to risks of
material misstatement in the financial statements, recognising that
the risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further
removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less
likely we are to become aware of it.
A further description of our responsibilities is available on
the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities . This description forms
part of our auditor's report.
Use of our report
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Paul Fenner (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London
17 June 2021
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
WYNNSTAY PROPERTIES PLC
STATEMENT OF COMPREHENSIVE INCOME FOR YEARED 25 MARCH 2021
Notes 2021 2020
GBP'000 GBP'000
Property Income 2 2,438 2,271
Property Costs 3 (255) (116)
Administrative Costs 4 (593) (572)
1,590 1,583
Movement in Fair Value of
Investment Properties 10 1,748 (1,318)
Profit on Sale of Investment
Property 1,121 421
Operating Income 4,459 686
Investment Income 6 1 2
Finance Costs 6 (412) (430)
Income before Taxation 4,048 258
Taxation 7 (395) (135)
Income after Taxation 3,653 123
Basic and diluted earnings
per share 9 134.7p 4.5p
The company has no items of other comprehensive income.
WYNNSTAY PROPERTIES PLC
STATEMENT OF FINANCIAL POSITION 25 MARCH 2021
2021 2020
Notes GBP'000 GBP'000
Non-Current Assets
Investment Properties 10 34,005 34,260
Investments 12 3 3
34,008 34,263
Current Assets
Accounts Receivable 14 342 244
Cash and Cash Equivalents 2,001 1,289
2,343 1,533
Non-current assets held for - -
Sale
2,343 1,533
Current Liabilities
Accounts Payable 15 (929) (1,263)
Income Taxes Payable (249) (241)
Bank Loans Payable 16 (10,000) -
(11,178) (1,504)
Net Current (Liabilities)/Assets (8,835) 29
Total Assets Less Current
Liabilities 25,173 34,292
Non-Current Liabilities
Bank Loans Payable 16 - (12,500)
Deferred Tax Payable 17 (461) (314)
(461) (12,814)
Net Assets 24,712 21,478
Capital and Reserves
Share Capital 18 789 789
Capital Redemption Reserve 205 205
Share Premium Account 1,135 1,135
Treasury Shares (1,570) (1,570)
Retained Earnings 24,153 20,919
24,712 21,478
Net Asset Value per share GBP9.11 GBP7.92
Approved by the Board and authorised for issue on 17 June
2021
P.G.H. Collins C.P. Williams
Director Director
Registered number: 00022473
WYNNSTAY PROPERTIES PLC
STATEMENT OF CASH FLOWS FOR THE YEARED 25 MARCH 2021
2021 2020
GBP'000 GBP'000
Cash flows from operating activities
Income before taxation 4,048 258
Adjusted for:
(Increase) / Decrease in fair value
of investment properties (1,748) 1,318
Interest income (1) (2)
Interest expense 412 430
Profit on disposal of investment
properties (1,121) (421)
Movement in dilapidations for property
sold 55 -
Changes in:
Trade and other receivables (98) (88)
Trade and other payables (326) 71
Cash generated from operations 1,221 1,566
Income taxes paid (249) (241)
Interest paid (412) (430)
Net cash from operating activities 560 895
Cash flows from investing activities
Interest and other income received 1 2
Purchase of investment properties (117) (2,014)
Sale of investment properties 3,187 1,975
Net cash from investing activities 3,071 (37)
Cash flows from financing activities
Dividends paid (419) (528)
Repayment of bank loans (2,500) -
Net cash from financing activities (2,919) (528)
Increase in cash and cash equivalents 712 330
Cash and cash equivalents at beginning
of period 1,289 959
Cash and cash equivalents at end
of period 2,001 1,289
WYNNSTAY PROPERTIES PLC
STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 25 MARCH 2021
YEARED 25 MARCH 2021
Capital Share
Share Redemption Premium Treasury Retained
Capital Reserve Account Shares Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 26 March
2020 789 205 1,135 (1,570) 20,919 21,478
Total comprehensive
income for the
year - - - - 3,653 3,653
Dividends - note
8 - - - - (419) (419)
--------- ----------- -------- ---------- ---------- -------
Balance at 25 March
2021 789 205 1,135 (1,570) 24,153 24,712
--------- ----------- -------- ---------- ---------- -------
YEARED 25 MARCH 2020
Capital Share
Share Redemption Premium Treasury Retained
Capital Reserve Account Shares Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 26 March
2019 789 205 1,135 (1,570) 21,324 21,883
Total comprehensive
income for the
year - - - - 123 123
Dividends - note
8 - - - - (528) (528)
--------- ----------- -------- ---------- ---------- -------
Balance at 25 March
2020 789 205 1,135 (1,570) 20,919 21,478
--------- ----------- -------- ---------- ---------- -------
FUNDS AVAILABLE FOR DISTRIBUTION
2021 2020
GBP'000 GBP'000
Retained Earnings 24,153 20,919
Less: Cumulative Unrealised Fair Value
Adjustment of Property Investments (7,967) (7,797)
Treasury Shares (1,570) (1,570)
Distributable Reserves 14,616 11,552
WYNNSTAY PROPERTIES PLC
STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 25 MARCH 2021
Explanation of Capital and Reserves:
-- Share Capital: This represents the subscription, at par
value, of the Ordinary Shares of the Company.
-- Capital Redemption Reserve: This represents money that the
Company must retain when it has bought back shares, and which it
cannot pay to shareholders as dividends: It is a non-distributable
reserve and represents paid up share capital.
-- Share Premium Account: This represents the subscription
monies paid for Ordinary Shares of the Company in excess of their
par value.
-- Treasury Shares: This represents the total consideration and
costs paid by the company when purchasing the 443,650 shares as
referred to in Note 18.
-- Retained Earnings: This represents the profits after tax that
can be used to pay dividends. However, dividends can only be paid
from Distributable Reserves as detailed in the preceding table.
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEARED 25 MARCH 2021
1. BASIS OF PREPARATION, ACCOUNTING POLICIES AND ESTIMATES
Wynnstay Properties Plc is a public limited company incorporated
and domiciled in England and Wales. The principal activity of the
Company is property investment, development and management. The
Company's ordinary shares are traded on the Alternative Investment
Market. The Company's registered number is 00022473.
1.1 Basis of Preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
applicable law. The financial statements have been presented in
Pounds Sterling being the functional currency of the Company and
rounded to the nearest thousand. The financial statements have been
prepared under the historical cost basis modified for the
revaluation of investment properties and financial assets measured
at fair value through Operating Income.
(a) New Interpretations and Revised Standards Effective for the
year ended 25 March 2021
The Directors have adopted all new and revised standards and
interpretations issued by the International Accounting Standards
Board ("IASB") and the International Financial Reporting
Interpretations Committee ("IFRIC") of the IASB and adopted by
applicable law that are relevant to the operations and effective
for accounting periods beginning on or after 26th March 2020.
-- Amendment to IFRS 16: Leases Covid 19-Related Rent Concessions
-- IAS 37: Provisions, Contingent Liabilities and Contingent Assets
The adoption of these interpretations and revised standards had
no material impact on the disclosures and presentation of the
financial statements.
(b) Standards and Interpretations in Issue but not yet
Effective
The International Accounting Standards Board ("IASB") and
International Financial Reporting Interpretations Committee
("IFRIC") have issued the below revisions to existing standards or
new interpretations or new standards with an effective date of
implementation after the period of these financial statements.
The following new amendment applicable in future periods has not
been early adopted as it is not expected to have a significant
impact on the financial statements of the Company:
-- Amendments to IAS 1: Classification of Liabilities as Current
or Non-current (effective 1 January 2022).
(c) Going concern
The financial statements have been prepared on a going concern
basis. This requires the Directors to consider, as at the date of
approving the financial statements, that there is reasonable
expectation that the Company has adequate financial resources to
continue to operate, and to meet its liabilities as they fall due
for payment, for at least twelve months following the approval of
the financial statements.
The Company has performed a series of reasonable and appropriate
financial tests to ensure that the Company has sufficient cash
resources and borrowing facilities and with sufficient covenant
margin, in particular to manage the potential financial impact of
the Covid-19 pandemic on its business under going concern
principles.
These tests included the following:
-- Reviewing cash balances and borrowing facilities to cover at
least twelve months of operations, including financing costs and
continuation of employment and advisory costs as currently
contracted without any reduction for cost saving initiatives;
-- Modelling of financial covenant ratios, including tests of a
major hypothetical diminution in property portfolio valuation and
of interest cover ratios; and
-- Reviewing a cash flow forecast scenario to test potential
hypothetical falls in rental income, including liquidity for the
risks of vacant space when leases expire and properties are not
re-let during the forecast period and on various assumptions
regarding the costs, timing, funding and operational risks of any
developments undertaken.
The results of the financial stress tests described above show
that the Company has cash and borrowing facilities to cover at
least twelve months of operations, assuming that the borrowing
facilities are refinanced as planned and described in Note 16, and
that the Company will satisfy the financial covenant ratios in the
borrowing facilities as described in Note 16. In addition, the
Statement of Financial Position as at 25 March 2021 shows that the
Company held a cash balance of GBP2m and net assets of GBP24.7m and
had a low gearing ratio of 32.4%. As a result, if the refinancing
of the borrowing facilities cannot be completed as planned, the
Company's investment properties provide security for alternative
secured lending or for realising cash through sale. In the light of
the foregoing considerations, the Directors consider that the
adoption of the going concern basis is reasonable and
appropriate.
1.2 Accounting Policies
Investment Properties
All the Company's investment properties are independently
revalued annually and stated at fair value as at 25 March. The
aggregate of any resulting increases or decreases are taken to
operating income within the Statement of Comprehensive Income. The
basis of independent valuation is described in Note 10.
Investment properties are recognised as acquisitions or
disposals based on the date of contract completion.
Assets held for Sale
Non-current assets are classified as held for sale if their
carrying amount will be recovered through a sale transaction rather
than through continuing use. This condition is regarded as met only
when the sale is highly probable, and the asset is available for
immediate sale in its present condition. Management must be
committed to the sale, which should be expected to qualify for
recognition as a completed sale within one year from the date of
classification. Non-current assets classified as held for sale are
measured at the lower of the assets' previous carrying amount or
fair value less cost to sell.
Depreciation
In accordance with IAS 40, freehold investment properties are
included in the Statement of Financial Position at fair value and
are not depreciated.
The Company has no other plant and equipment.
Disposal of Investments
The gains and losses on the disposal of investment properties
and other investments are included in Operating Income in the year
of disposal. Gains and losses are calculated on the net difference
between the revalued holding costs of the properties and the net
proceeds from their disposal.
Property Income
Property income is recognised on a straight-line basis over the
period of the lease and is measured at the fair value of the
consideration receivable. Lease deposits are held in separate
designated deposit accounts and are thus not treated as assets of
the Company in the financial statements. All income is derived in
the United Kingdom.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax. Current tax is the expected tax payable on the
taxable income for the year based on the tax rate enacted or
substantively enacted at the reporting date, and any adjustment to
tax payable in respect of prior years. Taxable profit differs from
income before tax because it excludes items of income or expense
that are deductible in other years, and it further excludes items
that are never taxable or deductible.
Deferred taxation is the tax expected to be payable or
recoverable on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding
tax bases used in the computation of taxable profits and is
accounted for using the statement of financial position liability
method. Deferred tax liabilities are recognised for all taxable
temporary differences (including unrealised gains on revaluation of
investment properties) and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be
utilised.
The Company provides for deferred tax on investment properties
by reference to the tax that would be due on the sale of the
investment properties. Deferred tax is calculated at the rates that
are expected to apply in the period when the liability is settled,
or the asset is realised. Deferred tax is charged or credited to
Income after Taxation, including deferred tax on the revaluation of
investment property.
Trade and Other Accounts Receivable
Trade and other receivables are initially measured at fair value
and subsequently measured at amortised cost as reduced by
appropriate allowances for expected credit losses. All receivables
do not carry any interest and are short term in nature.
Cash and Cash Equivalents
Cash comprises cash at bank and on demand deposits. Cash
equivalents are short term (less than three months from inception),
repayable on demand and are subject to an insignificant risk of
change in value.
Trade and Other Accounts Payable
Trade and other payables are initially measured at fair value
and subsequently measured at amortised cost. All trade and other
accounts payable are non-interest bearing.
Pensions
Pension contributions towards employee's pension plan are
charged to the statement of comprehensive income as incurred. The
pension scheme is a defined contribution scheme.
Borrowings
Interest rate borrowings are recognised at fair value, being
proceeds received less any directly attributable transaction costs.
Borrowings are subsequently stated at amortised cost. Any
difference between the proceeds (net of transaction costs) and the
redemption value is recognised in profit or loss over the period of
the borrowings using the effective interest method. Borrowings are
classified as current liabilities unless the Company has an
unconditional right to defer settlement of the liability for at
least 12 months after the reporting date.
Dilapidations
Dilapidations receipts are recognised in the Statement of
Comprehensive Income when the right to receive them arises. They
are recorded in revenue as other property income unless a property
has been agreed to be sold where the receipt is treated as part of
the proceeds of sale of the property. See Notes 2, 11 and 15.
1.3 Key Sources of Estimation Uncertainty and Judgements
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that may affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expenses.
Revisions to accounting estimates are recognised in the period
in which the estimate is revised if the revision affects only that
period. The key sources of estimation uncertainty that have a
significant risk of causing material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are those relating to the fair value of investment properties which
are revalued annually by the Directors having taken advice from the
Company's independent external valuers, on the basis described in
Note 10, as well as the judgement taken by the Directors as to
whether a property is being held for sale.
The Covid-19 pandemic and the UK Government's lockdown and other
measures are considered in the Strategic Report on page 14 and have
also been considered in relation to the adoption of the going
concern basis for these Financial Statements (see Note 1.1 above).
Each of these passages is expressly incorporated by reference into
this note.
There are no other judgemental areas identified by management
that could have a material effect on the financial statements at
the reporting date.
Rental income comprises rents earned and received during the
period. Other property income comprises historical unexpended
dilapidations received from the reletting of properties (see Note
15).
2. PROPERTY INCOME 2021 2020
GBP'000 GBP'000
Rental income 2,140 2,271
Other property income 298 -
2,438 2,271
Rental income comprises rents earned and received during the
period. Other property income comprises historical unexpended
dilapidations received from the reletting of properties (see
Note 15).
3. PROPERTY COSTS 2021 2020
GBP'000 GBP'000
Empty rates 47 37
Property management 176 20
223 57
Legal fees 21 33
Agents fees 11 26
255 116
4. ADMINISTRATIVE COSTS 2021 2020
GBP'000 GBP'000
Rents payable - operating lease rentals 28 28
General administration, including staff costs 522 504
Auditors' remuneration: Audit fees 38 36
Tax services 5 4
593 572
5. STAFF COSTS 2021 2020
GBP'000 GBP'000
Staff costs, including Directors' fees, during
the year were as follows:
Wages and salaries 278 251
Social security costs 32 33
Other pension costs 13 13
323 297
Further details of Directors' emoluments, totalling GBP290,796
(2020: GBP264,192), are shown in the Directors' Report. There
are no other key management personnel.
2021 2020
No. No.
The average number of employees, including
Non-Executive Directors, engaged wholly in
management and administration was: 5 5
The number of Directors for whom the Company
paid pension benefits
during the year was: 1 1
6. FINANCE COSTS (NET) 2021 2020
GBP'000 GBP'000
Interest payable and finance costs on bank
loans 412 430
Less: Bank interest receivable (1) (2)
411 428
7. TAXATION 2021 2020
GBP'000 GBP'000
(a) Analysis of the tax charge for the year:
UK Corporation tax at 19% (2020: 19%) 249 231
Under provision in previous year - 10
Total current tax charge 249 241
Deferred tax - temporary differences 146 (106)
Tax charge for the year 395 135
(b) Factors affecting the tax charge for
the year:
Net Income before taxation 4,048 258
Current Year:
Corporation tax thereon at 19% (2020 - 19%) 769 49
Expenses not deductible for tax purposes - 13
Capital gains tax on disposals 26 -
Under provision in prior years - 10
Deferred tax charge arising from tax rate
change to 19% (2020: 19%) - 49
Profit on disposal of properties disallowed (213) -
Deferred tax adjustments (187) 14
Total tax charge for the year 395 135
8. DIVIDS 2021 2020
GBP'000 GBP'000
Second interim dividend paid in year of
7.5p per share
(2020: Final dividend 12.0p per share) 203 325
Interim dividend paid in year of 8.0p per
share
(2020: Interim dividend 7.5p per share) 216 203
419 528
9. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing Income
after Taxation attributable to Ordinary Shareholders of GBP3,653,000
(2020: GBP123,000) by the weighted average number of 2,711,617
(2020: 2,711,617) ordinary shares in issue during the period
excluding shares held as treasury. There are no instruments
in issue that would have the effect of diluting earnings per
share.
10. INVESTMENT PROPERTIES 2021 2020
GBP'000 GBP'000
Properties
Balance at beginning of financial year 34,260 33,695
Additions 117 2,014
Disposals (2,120) (131)
Revaluation Surplus/(diminution) 1,748 (1,318)
34,005 34,260
Assets held for Sale - -
Balance at end of financial year 34,005 34,260
The Company's freehold properties were valued as at 25 March
2021 by BNP Paribas Real Estate, Chartered Surveyors, acting in the
capacity of external valuers. The valuations were undertaken in
accordance with the requirements of IFRS 13 and the RICS Valuation
- Global Standards 2020.
The valuation of each property was on the basis of Fair Value.
The valuers reported that the total aggregate Fair Value of the
properties held by the Company was GBP34,005,000.
The valuer's opinions were primarily derived from comparable
recent market transactions on arms-length terms.
In the financial year ending 25 March 2021, the total fees
earned by the valuer from Wynnstay Properties PLC and connected
parties were less than 5% of the valuer's company turnover.
The valuation complies with International Financial Reporting
Standards. The definition adopted by the International Accounting
Standards Board (IASB) in IFRS 13 is Fair Value, defined as: 'The
price that would be received to sell an asset, or paid to transfer
a liability, in an orderly transaction between market participants
at the measurement date.'
These recurring fair value measurements for non-financial assets
use inputs that are not based on observable market data, and
therefore fall within level 3 of the fair value hierarchy.
The significant unobservable market data used is property
equivalent yields which range from 5.00% to 8.43%, with an average
equivalent yield of 6.72% (2020: 6.97%) and an average weighted
equivalent yield of 6.38% (2020: 6.67%) for the portfolio.
There have been no transfers between levels of the fair value
hierarchy. Movements in the fair value are recognised in profit or
loss.
A 0.5% decrease in the weighted equivalent yield would result in
a corresponding increase of GBP3.06 million in the fair value
movement through profit or loss. A 0.5% increase in the same yield
would result in a corresponding decrease of GBP2.59 million in the
fair value movement through profit or loss.
The above calculations exclude the development land at
Petersfield, which has been assessed on the residual method
consistent with prior years.
11. OPERATING LEASES RECEIVABLE 2021 2020
The following are the future minimum GBP'000 GBP'000
lease payments receivable under non-cancellable
operating leases which expire:
Not later than one year 391 2,081
Between 1 and 5 years 3,519 2,703
Over 5 years 1,710 409
5,620 5,193
Rental income under operating leases recognised through profit
or loss amounted to GBP2,140,000 (2020: GBP2,271,000).
Typically, the properties were let for a term of between 5 and
10 years at a market rent with rent reviews every 5 years. The
above maturity analysis reflects future minimum lease payments
receivable to the next break clause in the operating lease. The
properties are generally leased on terms where the tenant has
the responsibility for repairs and running costs for each individual
unit with a service charge payable to cover common services provided
by the landlord on certain properties. The Company manages the
services provided for a management fee and the service charges
are not recognised as income in the accounts of the Company as
any receipts are netted off against the associated expenditures
with any residual balance being shown as a liability.
If the tenant does not carry out its responsibility for repairs
and the Company receives a dilapidations payment, the resulting
cash is recorded in revenue as other property income unless a
property has been agreed to be sold where the receipt is treated
as part of the proceeds of sale of the property. See Notes 2,
11 and 15.
12. INVESTMENTS 2021 2020
GBP'000 GBP'000
Quoted investments 3 3
13. SUBSIDIARY COMPANY
The Company has the following dormant subsidiary which the Directors
consider immaterial to, and thus has not been consolidated into,
the financial statements. The subsidiary holds the legal title
to an access road to an investment property, the use of which
is shared between the Company, its tenants at the property and
neighbouring premises.
Scanreach Limited 80% owned Dormant Net Assets: GBP4,437 (2020:
GBP4,437)
(2020: GBP4,437)
Scanreach Limited 80% owned Dormant Net Assets: GBP4,437 (2018:
GBP4,437)
14. ACCOUNTS RECEIVABLE 2021 2020
GBP'000 GBP'000
Trade receivables 322 224
Other receivables 20 20
342 244
Trade receivables include an adjustment for credit losses of
GBP6,282 (2020: nil). Trade receivables of GBPnil (2020: nil)
are considered past due, but not impaired.
15. ACCOUNTS PAYABLE 2021 2020
GBP'000 GBP'000
Trade payables 28 21
Other creditors 65 103
Provision for property repairs - 344
Deferred income 535 572
Accruals 301 223
929 1,263
Movements in Provision for property repairs 2021 2020
comprise:
GBP'000 GBP'000
Opening balance as at 26 March: 344 249
Dilapidations received during period - 122
Dilapidations utilised during period - (27)
Dilapidations taken to revenue as other
property income 298 -
Dilapidations on sold properties 56 -
Closing balance as at 25 March: - 344
16. BANK LOANS PAYABLE 2021 2020
GBP'000 GBP'000
Current loan 10,000 -
Non-current loan - 12,500
10,000 12,500
In December 2016, a five-year facility comprising a Fixed Rate
Facility of GBP10 million and a Revolving Credit Facility of
GBP3.5 million was entered into providing a total committed credit
facility of GBP13.5 million. Interest on loan amounts drawn down
under the Fixed Rate Facility of GBP10 million was charged at
3.35% per annum for the year ended 25 March 2021 (2020: GBP10
million). Interest on loan amounts drawn down during the year
ended 25 March 2021 under the Revolving Credit Facility was charged
at 2.49% over three-month LIBOR, with no loan amounts being drawn
down as at 25 March 2021 (2020: GBP2.5 million). Upon the refinancing
of the GBP10 million facility described below the loan will revert
from a Current loan to a Non-current loan.
The loan is repayable in one instalment on 17 December 2021.
The loan includes the following financial covenants which were
complied with during the year:
* Rental income shall not be less than 2.25 times the
interest costs
* The loan shall at no time exceed 50% of the market
value of the properties secured.
The facility is secured by fixed charges over freehold land and
buildings owned by the Company, which at the year-end had a combined
value of GBP33,185,000 (2020: GBP33,520,000). The undrawn element
of the facility available at 25 March 2021 was GBP3,500,000 (2020:
GBP1,000,000).
Interest charged under the existing facility is linked to LIBOR
as the reference rate. The Financial Conduct Authority has required
that LIBOR is phased out by the end of 2021 and be replaced by
alternatives. Handelsbanken plc has advised the Company that
it has decided to use Bank of England Base Rate as its reference
rate for all new facilities to the Company.
On 14 June 2021 the Company signed an agreement for a new five-year
facility of GBP10 million, which offers the Company the choice
at drawdown of fixed or floating rates of interest linked to
the Bank of England Base Rate. Under the agreement, the financial
covenants are the same as in the existing facility described
above and the facility will be available for drawdown up to and
including 17 December 2021. The Company intends to draw down
under this new facility to refinance the existing GBP10m facility
on or before its expiry on 17 December 2021.
Due to the complexities of transitioning from LIBOR to Bank of
England Base Rate as the reference rate for revolving credit
facilities, Handelsbanken plc has advised the Company that, as
at 17 June 2021, it is not yet in a position to offer to refinance
the existing GBP3.5 million Revolving Credit Facility. It currently
hopes to begin offering revolving credit facilities around the
start of the calendar quarter beginning 1 July 2021 and has indicated,
without formal commitment, that it intends (subject to contract,
market conditions and satisfactory due diligence and documentation)
to refinance the Company's existing GBP3.5m facility. Indicative
terms and a draft agreement have been provided to the Company,
with the same financial covenants and the detailed terms being
similar to those under the new GBP10m facility.
17. DEFERRED TAX 2021 2020
GBP'000 GBP'000
Deferred Tax brought forward 314 420
Charge /(credit) for the year 147 (106)
Deferred Tax carried forward 461 314
A deferred tax liability of GBP461,000 (2020: GBP314,000) is
recognised in respect of the investment properties and has been
calculated at a tax rate of 19%. Future corporation tax rates
of 25% have been promulgated since 25 March 2021 which could
give rise to an additional GBP146,000 in deferred tax charge
in future periods.
18. SHARE CAPITAL 2021 2020
GBP'000 GBP'000
Authorised
8,000,000 Ordinary Shares of 25p each: 2,000 2,000
Allotted, Called Up and Fully Paid
3,155,267 Ordinary shares of 25p each: 789 789
All shares rank equally in respect of shareholder
rights.
A deferred tax liability of GBP461,000 (2020: GBP314,000) is
recognised in respect of the investment properties and has been
calculated at a tax rate of 19%. Future corporation tax rates
of 25% have been promulgated since 25 March 2021 which could
give rise to an additional GBP146,000 in deferred tax charge
in future periods.
In March 2010, the company acquired 443,650 Ordinary shares of
Wynnstay Properties Plc from Channel Hotels and Properties Ltd
at a price of GBP3.50 per share. These shares, representing in
excess of 14% of the total shares in issue, are held in Treasury.
As a result, the total number of shares with voting rights is
2,711,617.
19. FINANCIAL INSTRUMENTS
The objective of the Company's policies is to manage the Company's
financial risk, secure cost effective funding for the Company's
operations and minimise the adverse effects of fluctuations in
the financial markets on the value of the Company's financial
assets and liabilities, on reported profitability and on the
cash flows of the Company.
At 25 March 2021 the Company's financial instruments comprised
borrowings, cash and cash equivalents, short term receivables
and short-term payables. The main purpose of these financial
instruments was to raise finance for the Company's operations.
Throughout the period under review, the Company has not traded
in any other financial instruments. The Board reviews and agrees
policies for managing each of the associated risks and they are
summarised below:
Credit Risk
The risk of financial loss due to a counterparty's failure to
honour its obligations arises principally in connection with
property leases and the investment of surplus cash.
Tenant rent payments are monitored regularly, and appropriate
action is taken to recover monies owed or, if necessary, to terminate
the lease. The Company carefully vets prospective new tenants
from a credit risk perspective. Bad debts are mitigated by close
engagement with tenant businesses within a well-diversified mix
of some 56 tenants across the portfolio and close monitoring
of rental income receipts. In the light of the Covid-19 pandemic
the Company has regularly reviewed the portfolio, including feedback
from engagement with tenants, in order to assess the risk of
tenant failures.
The Company has no significant concentration of credit risk associated
with trading counterparties (considered to be over 5% of net
assets) with exposure spread over a large number of tenancies.
In terms of concentration of individual tenant's rents versus
total gross annual passing rents the Company has 5 tenants whose
rent, on an individual basis, is between 5.0% and 8.5% of total
gross annual passing rents.
Funds are invested and loan transactions contracted only with
banks and financial institutions with a high credit rating. Concentration
of credit risk exists to the extent that as at 25 March 2021
and 2020 current account and short-term deposits were held with
two financial institutions, Handelsbanken PLC and C Hoare & Co.
The combined exposure to credit risk on cash and cash equivalents
at 25 March 2021 was GBP2,001,000 (2020: GBP1,289,000).
Currency Risk
As all of the Company's assets and liabilities are denominated
in Pounds Sterling, there is no exposure to currency risk.
Interest Rate Risk
The Company is exposed to interest rate risk that could affect
cash flow as it currently borrows at both floating and fixed
interest rates. The Company monitors and manages its interest
rate exposure on a periodic basis, but does not take out financial
instruments to mitigate the risk. The Company finances its operations
through a combination of retained profits and bank borrowings.
Liquidity Risk
The Company seeks to manage liquidity risk to ensure sufficient
funds are available to meet the requirements of the business
and to invest cash assets safely and profitably. The Board regularly
reviews available cash to ensure there are sufficient resources
for working capital requirements.
Interest Rate Sensitivity
Financial instruments affected by interest rate risk include
loan borrowings and cash deposits. The analysis below shows the
sensitivity of the statement of comprehensive income and equity
to a 0.5% change in interest rates:
0.5% decrease 0.5% increase
in interest rates in interest rates
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Impact on interest payable
- gain/(loss) - 13 - (13)
Impact on interest receivable
- (loss)/gain (10) (6) 10 6
Total impact on pre-tax profit
and equity (10) 7 10 (7)
The calculation of the net exposure to interest rate fluctuations
was based on the following as at 25 March:
2021 2020
GBP'000 GBP'000
Floating rate borrowings (bank loans) - (2,500)
Less: cash and cash equivalents 2,001 1,292
2,001 (1,208)
Fair Value of Financial Instruments
Except as detailed in the following table, management consider
the carrying amounts of financial assets and financial liabilities
recognised at amortised cost approximate to their fair value.
2021 2021 2020 2020
Book Value Fair Value Book Value Fair Value
GBP'000 GBP'000 GBP'000 GBP'000
Interest bearing borrowings
(note 15) (10,000) (10,000) (12,500) (12,500)
Total (10,000) (10,000) (12,500) (12,500)
2021 2020
Categories of Financial Instruments GBP'000 GBP'000
Financial assets:
Quoted investments measured at fair value 3 3
Loans and receivables measured at amortised
cost 342 244
Cash and cash equivalents measured at
amortised cost 2,001 1,289
Total financial assets 2,346 1,536
Non-financial assets 34,005 34,260
Total assets 36,351 35,796
Financial liabilities at amortised cost 11,639 14,318
Total liabilities 11,639 14,318
Shareholders' equity 24,712 21,478
Total shareholders' equity and liabilities 36,351 35,796
The only financial instruments measured subsequent to initial
recognition at fair value as at 25 March are quoted investments.
These are included in level 1 in the IFRS 13 fair value hierarchy
as they are based on quoted prices in active markets.
Capital Management
The primary objectives of the Company's capital management are:
* to safeguard the Company's ability to continue as a
going concern, so that it can continue to provide
returns for shareholders: and
* to enable the Company to respond quickly to changes
in market conditions and to take advantage of
opportunities.
Capital comprises shareholders' equity plus net borrowings. The
Company monitors capital using loan to value and gearing ratios.
The former is calculated by reference to total debt as a percentage
of the year end valuation of the investment property portfolio.
Gearing ratio is the percentage of net borrowings divided by
shareholders' equity. Net borrowings comprise total borrowings
less cash and cash equivalents. The Company's policy is that
the net loan to value ratio should not exceed 50% and the gearing
ratio should not exceed 100%.
2021 2020
GBP'000 GBP'000
Net borrowings and overdraft 10,000 12,500
Cash and cash equivalents (2,001) (1,289)
Net borrowings 7,999 11,211
Shareholders' equity 24,712 21,478
Investment properties 34,005 34,260
Loan to value ratio 29.4% 36.5%
Net borrowings to value ratio 23.5% 32.7%
Gearing ratio 32.4% 52.2%
20. RELATED PARTY TRANSACTIONS
Related Party Transactions with the Directors have been disclosed
under Directors Emoluments in the Directors Report. There were
no other Related Party Transactions during the year (2020: GBP27,416).
21. SEGMENTAL REPORTING
Industrial Retail Office Total
2021 2020 2021 2020 2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Rental Income 1,676 1,703 140 168 324 400 2,140 2,271
Other Property Income 298 - - - - - 298 -
Profit /(Loss) on
investment property
at fair value 2,093 (863) 50 (200) (395) (255) 1,748 (1,318)
Total income and
gain 4,067 840 190 (32) (71) 145 4,186 953
Property expenses (215) (116) (5) - 5) - (255) (116)
Segment profit/(loss) 3,852 724 185 (32) (106) 145 3,931 837
------- ------- ------- ------- ------- ------- ------- -------
Unallocated corporate
expenses (593) (572)
Profit on sale of
investment property 1,121 421
Operating income 4,459 686
Interest expense
(all relating to
property loans) (412) (430)
Interest income
and
other income 1 2
------- -------
Income before taxation 4,048 258
------- -------
Other information Industrial Retail Office Total
2021 2020 2021 2020 2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment assets 27,665 26,480 2,505 2,490 3,835 5,290 34,005 34,260
Segment assets
held
as security 26,845 26,170 2,505 2,060 3,835 5,290 33,185 33,520
22. CAPITAL COMMITMENTS
Significant capital expenditure contracted for at the end of
the financial year, but not recognised as liabilities in the
financial statements is: GBP1,518,000 (2020: GBPnil).
WYNNSTAY PROPERTIES PLC
FIVE YEAR FINANCIAL REVIEW
Years Ended 25 March: 2021 2020 2019 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
STATEMENT OF COMPREHENSIVE INCOME
Property Income 2,438 2,271 2,216 2,182 2,028
Profit before movement
in fair value of investment
properties and taxation 1,179 1,155 1,196 1,150 999
Income before Taxation 4,048 258 2,247 2,991 3,198
Income after Taxation 3,653 123 1,928 2,632 2,797
STATEMENT OF FINANCIAL POSITION
Investment Properties 34,005 34,260 35,095 30,070 29,515
Equity Shareholders'
Funds 24,712 21,478 21,883 20,443 18,265
PER SHARE
Basic earnings 134.7p 4.5p 71.1p 97.1p 103.1p
Dividends Paid and Proposed 21.0p 15.0p 19.0p 17.5p 15.8p
Net Asset Value 911p 792p 807p 754p 674p
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FR GPUMGQUPGGPR
(END) Dow Jones Newswires
June 18, 2021 08:22 ET (12:22 GMT)
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