TIDMARTL
RNS Number : 7689W
Alpha Real Trust Limited
17 November 2017
17 November 2017
ALPHA REAL TRUST LIMITED ("ART" OR THE "COMPANY")
ART ANNOUNCES ITS HALF YEAR RESULTS FOR THE SIX MONTHSED 30
SEPTEMBER 2017
-- NAV per ordinary and A share 167.3p: 30 September 2017 (158.9p: 31 March 2017)
-- Basic earnings for the six months ended 30 September 2017 of
13.3p per ordinary share and of 17.7p per A share (18.6p per
ordinary and A share for the twelve months ended 31 March 2017)
-- Adjusted earnings for the six months ended 30 September 2017
of 3.0p per ordinary and A share (7.4p per ordinary and A share for
the twelve months ended 31 March 2017)*
-- Declaration of a quarterly dividend of 0.6p per share,
expected to be paid on 15 December 2017
-- Balanced portfolio: continued capital allocation to a mix of
investments which balance income returns while creating potential
for capital value growth, including a growing build-to-rent
exposure
-- Data centre planning consent: following a detailed design
process, planning consent for a 40,338 square metre data centre was
secured and a 35 MVA power supply commitment confirmed for the
industrial site over which ART has a binding purchase agreement.
ART is advancing with the completion of the site acquisition.
Expected equity commitment of EUR28 million (GBP24.7 million)
**
-- H2O Madrid: completion of joint venture and divestment of 70%
of the shareholding in the shopping centre
-- Mezzanine loan investment: six further mezzanine loan
investments totalling GBP2.8 million were completed, including
three post period end
-- AURE increased shareholding: increased exposure to the
diversified UK industrial sector through the acquisition of 7.1% of
AURE's issued shares thus increasing ART's equity holding in AURE
to 27.6%
* The basis of the adjusted earnings per share is provided in
note 9
** Planning consent achieved post period end
David Jeffreys, Chairman of Alpha Real Trust, commented:
"ART actively manages its investment portfolio which continues
to be replenished via capital recycling from the sale of non-core
assets, loan repayments or strategic full or partial disinvestment
from assets that allow for profit-taking and portfolio
optimisation. This creates the opportunity for capital allocation
to new investments.
The proceeds from the sale of 70% of the equity interest in the
H2O shopping centre and the earlier divestment from IMPT allow ART
to further invest in its PRS and data centre build-to-rent
investments, with the potential for capital investment in excess of
GBP48 million. In addition, we expect to make significant
additional mezzanine loan investments.
New investment opportunities that are capable of delivering
strong risk adjusted cash flows are being actively pursued. ART's
active investment approach means that short term investment
positions will be considered when accretive to overall returns.
ART has achieved the significant milestone of securing planning
consent for each of its build-to-rent investments. These
investments offer the opportunity to create a higher yield on cost
than is available from purchasing existing built investments of the
same quality. During the development period a greater proportion of
the Company's total return is likely to come from capital growth
rather than earnings until its build-to-rent investments become
income producing.
The Company remains well positioned to continue to deliver
attractive returns through investing, realising and re-investing
its capital in asset backed investment opportunities."
The Investment Manager of Alpha Real Trust is Alpha Real Capital
LLP.
For further information please contact:
Alpha Real Trust Limited
David Jeffreys, Chairman, Alpha Real Trust +44 (0) 1481 231
100
Gordon Smith, Joint Fund Manager, Alpha Real Trust +44 (0) 207
391 4700
Brad Bauman, Joint Fund Manager, Alpha Real Trust +44 (0) 207
391 4700
Panmure Gordon, Broker to the Company
Richard Gray / Andrew Potts +44 (0) 20 7886 2500 Notes to
editors:
About Alpha Real Trust
Alpha Real Trust Limited targets investment, development,
financing and other opportunities in real estate, real estate
operating companies and securities, real estate services,
infrastructure, infrastructure services, other asset-backed
businesses and related operations and services businesses that
offer attractive risk-adjusted total returns.
Further information on the Company can be found on the Company's
website: www.alpharealtrustlimited.com.
About Alpha Real Capital LLP
Alpha Real Capital is a value-adding international property fund
management group. Alpha Real Capital is the Investment Manager to
ART. Brad Bauman and Gordon Smith of Alpha Real Capital are joint
Fund Managers to ART. Both have experience in the real estate and
finance industries throughout the UK, Europe and Asia.
For more information on Alpha Real Capital please visit
www.alpharealcapital.com.
Trust summary and objective
Strategy
Alpha Real Trust Limited ("the Company" or "ART") targets
investment, development, financing and other opportunities in real
estate, real estate operating companies and securities, real estate
services, infrastructure, infrastructure services, other
asset-backed businesses and related operations and services
businesses that offer attractive risk-adjusted total returns.
ART currently focuses on high-yielding property, infrastructure
and asset backed debt and equity investments in Western Europe that
are capable of delivering strong risk adjusted cash flows,
including build-to-rent investments. The current portfolio mix,
excluding sundry assets/liabilities, is as follows:
High yielding equity
in property investments: 20.9%
Ground rent investments: 24.6%
Build-to-rent investments: 13.0%
High yielding debt: 3.1%
Other investments: 18.9%
Cash: 19.5%
Dividends
The current intention of the Directors is to pay a dividend
quarterly to all shareholders. Any realised value from the Romulus
investment is exclusively for the benefit of ART A
shareholders.
Listing
The Company's shares are traded on the Specialist Fund Segment
("SFS") of the London Stock Exchange ("LSE"), ticker ARTL:LSE.
Management
The Company's Investment Manager is Alpha Real Capital LLP
("ARC"), whose team of investment and asset management
professionals focus on the potential to enhance earnings in
addition to adding value to the underlying assets and also on the
risk profile of each investment within the capital structure to
best deliver high risk adjusted returns.
Control of the Company rests with the non-executive Guernsey
based Board of Directors.
Financial highlights
6 months 12 months 6 months
ended ended ended
30 September 31 March 30 September
2017 2017 2016
---------------------------------- -------------- ---------- --------------
Net asset value (GBP'000) 114,626 110,173 105,317
---------------------------------- -------------- ---------- --------------
Net asset value per ordinary
and A share 167.3p 158.9p 151.9p
---------------------------------- -------------- ---------- --------------
Earnings per ordinary share
(basic and diluted) (adjusted)* 3.0p 7.4p 3.9p
---------------------------------- -------------- ---------- --------------
Earnings per A share (basic
and diluted) (adjusted)* 3.0p 7.4p 3.9p
---------------------------------- -------------- ---------- --------------
Earnings per ordinary share
(basic and diluted) 13.3p 18.6p 10.1p
---------------------------------- -------------- ---------- --------------
Earnings per A share (basic
and diluted) 17.7p 18.6p 10.1p
---------------------------------- -------------- ---------- --------------
Dividend per share (paid
during the period) 1.2p 2.4p 1.2p
---------------------------------- -------------- ---------- --------------
Special dividend per A share 4.3p - -
(paid during the period)
* The adjusted earnings per share includes adjustments for the
effect of the fair value revaluation of investment property and
indirect property investments, capital element on Investment
Manager's fees, the fair value movements on financial assets and
deferred tax provisions: full analysis is provided in note 9 to the
accounts.
Chairman's statement
I am pleased to present the Company's half year report for the
six months ended 30 September 2017.
It has been an active period for ART with new investment,
capital recycling and successful active asset management continuing
to help deliver our strategy of maintaining a diversified portfolio
of assets across various sectors that are capable of delivering
attractive risk adjusted returns.
Our target investment criteria currently focuses on
high-yielding property, infrastructure and asset backed debt and
equity investments in Western Europe, including build-to-rent
investments. ART has achieved the significant milestone of securing
planning consent for each of its build-to-rent investments.
H2O partial sale completion
During the period ART completed the sale of a 70% equity
interest in the H2O shopping centre in Madrid for a consideration
of circa GBP37.3 million. ART retains a 30% stake in the joint
venture, in order to participate in the future growth of the
centre. ART originally purchased H2O in March 2010. Under the
Company's ownership, annual footfall at the shopping centre has
increased from 5.7 million to 7.9 million visitors and continues to
grow strongly.
As previously announced, the Company also recently completed the
refinance of the borrowings secured on the shopping centre with a
new EUR65.0 million seven year loan.
Capital recycling and reinvestment
ART continues to actively manage its portfolio to enhance the
value of the underlying assets, recycle capital from investments
where profit taking and portfolio optimisation opportunities are
identified.
As outlined below, this successful capital recycling allows for
capital to be reinvested in new opportunities that meet the
Company's return criteria. We continue to maintain a pipeline of
new investment opportunities under active review which compete for
capital allocation. An increased capital investment is planned for
high yielding mezzanine loans and high yielding equity,
particularly build-to-rent, across a range of markets and asset
types. The Company's build-to-rent projects have now achieved the
significant milestone of having secured planning consent. Capital
investment in excess of GBP48 million has been identified in order
to advance the private rented sector residential and data centre
projects through development stages.
Data centre investment
In November 2016, ART entered into a conditional agreement to
purchase, via an SPV, an industrial site in Frankfurt which it
identified as being suitable for the development of a data centre.
The agreement to purchase the site was subject to securing planning
consent for a data centre with a minimum gross external area of
23,000 square metres and a specified minimum electrical power
supply with a dual feed for the proposed development.
During the intervening period ART undertook a detailed planning
exercise, creating detailed designs for a data centre building and
its mechanical and electrical systems. Post period end, following a
collaborative approach with the local authorities, detailed
planning consent was approved for a five-story data centre
extending to 40,338 square metres. Further, the local utility
provider has contracted to supply a dual feed power supply on a
phased basis over the coming three years, synchronised with local
electricity substation and cable route upgrades.
Following the achievement of the above milestones the conditions
precedent for the site purchase have now been satisfied. The
Company is hence now in the process of completing the site purchase
and executing the power commitment contract. The payment of the
outstanding site purchase price is GBP11.3 million (EUR12.85
million). The electricity supply cost commitments will become
payable in phases during the electricity upgrade period of
approximately three years. Associated costs relating to the
construction of an electricity receptor building on the site and
associated pre-identified ground preparation works will also be
undertaken. These commitments are expected to bring the Company's
total investment into the data centre project to GBP24.7 million
(EUR28 million).
The Company's strategy is to secure a tenant pre-let and fund
the balance of development costs with debt. Active marketing of the
project to potential data centre occupiers is already underway.
New mezzanine investment
ART continues to augment and diversify its portfolio of
mezzanine loan investments. These loans are typically secured on
real estate investment and development assets with high
risk-adjusted income returns. During the period, a further three
loans were completed with GBP3.5 million invested at period end.
Post period end, a further three loans totalling GBP1.3 million
were funded and GBP3.6 million committed, whilst the first loan
made under the Company's mezzanine diversified small loan portfolio
investment strategy was repaid, generating an annualised return of
circa 17.3%.
Each loan will typically have a two year term and a maximum 75%
loan to value ratio and be targeted to generate double digit income
returns. Repayment proceeds will be rotated into new loan
opportunities.
AURE increased equity shareholding and loan repayment
ART increased its shareholding in Active UK Real Estate Fund
("AURE"), a fund that principally invests in the diversified UK
industrial property sector, by acquiring a further 7.1% of total
AURE shares, which were bought at a price representing a 10%
discount to the reported AURE NAV at that time. The investment
increases ART's shareholding in AURE to 27.6%. AURE was ranked in
the top 3% for performance against the year to date IPD benchmark,
providing a year to date return (to 30 June 2017) of 8.9% compared
to the IPD benchmark of 4.6%.
During the period, ART's mezzanine loan to AURE of GBP3.5
million (including outstanding interest and exit fee) was repaid.
This mezzanine investment returned an IRR of 12.2% per annum for
ART.
Private Rented Sector investment
The Company's investments in the residential Private Rented
Sector ("PRS") in central Leeds and central Birmingham are
opportunities that were secured early in the build-to-rent process
that offer potential to create an initial capital uplift in value
through enhanced planning and the opportunity to develop and let in
order to achieve resilient equity income returns at an attractive
yield on cost.
Planning consent for both sites has been secured. The Birmingham
project has implemented non-material amendments to its planning
consent for 162 residential units and ground floor commercial
space. The Leeds project has detailed planning consent for 307
residential units (which the Company intends to develop for PRS)
plus commercial development within the adjacent existing railway
arches and outline planning consent for a further 300 residential
units. Both investments have been revalued by independent valuers
as at 30 September 2017.
The Company estimates that up to GBP23.7 million could be
invested to undertake the development of its PRS sites alongside
debt financing. The positive planning consent achieved at the Leeds
project, where outline planning consent for an additional 300
residential units was received, has notably enhanced the valuation
of the site.
The Company is exploring ways to optimise the returns from its
PRS investments and is exploring joint development opportunities
with potential partners.
Galaxia, India
As announced in January 2015, the International Chamber of
Commerce (ICC) Arbitration declared an award in favour of the
Company with respect to its Galaxia investment, a joint venture
with the Logix Group ("Logix") regarding an 11.2 acre Special
Economic Zone located in NOIDA, the National Capital Region, India.
The total award amounted to GBP9.2 million based on exchange rates
at the time. Additionally, a further 15% p.a. interest on all sums
was awarded to the Company from 20 January 2015 until the actual
date of payment by Logix of the award. The sum has now accrued to
GBP13.8 million at the current exchange rate. ART continues to hold
the investment receivable at GBP5.1 million (INR 450.0 million) in
the accounts due to uncertainty over timing and final value.
Following challenges of the award by Logix, both the Delhi High
Court and latterly a division bench of the Delhi High Court upheld
the award declared in favour of the Company and rejected Logix's
appeal. Logix appealed the dismissal before the Supreme Court of
India. The Supreme Court admitted the appeal on 15 September 2017,
ordered Logix to deposit GBP2.3 million (INR 200 million) with the
court and has listed the appeal for hearing in late 2017.
ART has commenced execution of the award and the Delhi High
Court has issued a warrant of attachment against the primary
residential property owned by Shakti Nath and Meena Nath, promoters
of Logix Group. The Company has had the residential property
independently valued at approximately GBP6.0 million. ART continues
to actively pursue Logix's directors for the recovery of the
award.
Build-to-rent earnings outlook
The Company's aim is to maintain a balanced mix of investments
that have an overall weighting towards income returns while
creating potential for future income and capital value growth. With
the ultimate strategy of creating income producing assets that
generate a higher yield on cost than is available from purchasing
existing built investments of the same quality, an increased
capital commitment to the development of PRS and data centre
build-to-rent investments is likely. This allocation of capital to
build-to-rent investments will mean that a larger proportion of the
Company's returns will be generated from capital growth rather than
earnings during the development phases of the projects, prior to
such investments becoming incoming producing.
Active shareholder value management
The Company adopts an active approach in seeking to enhance
shareholder returns and during the period undertook a tender offer
at an offer price of 123.1p per Ordinary Share. A total of 826,311
Ordinary Shares were validly tendered under the tender offer,
representing approximately 1.2% of the Company's voting shares in
issue as at 25 September 2017 (excluding Ordinary Shares held in
treasury).
Positioning for continued investment
ART benefits from the depth of experience, strength and size of
the Investment Manager's business with a team of over 100
investment, asset management and debt restructuring professionals
based throughout the UK and Europe. ART's active management
approach has helped deliver improvements in underlying asset
values, in both directly and indirectly held investments across our
investment markets.
A detailed summary of the Company's investments is contained
within the investment review section.
Results and dividends
Dividends
Adjusted earnings for the period are GBP2.1 million (3.0 pence
per ordinary share and A share, see note 9 of the financial
statements). This compares with adjusted earnings per ordinary and
A share of 3.9 pence for the same period in 2016.
In line with its aim to pay dividends quarterly, the Board
announces a dividend of 0.6 pence per share which is expected to be
paid on 15 December 2017 (ex dividend date 30 November 2017 and
record date 01 December 2017).
The dividends paid and declared for the six month period to 30
September 2017 total 1.2 pence per share, representing an annual
dividend yield of 2.2% p.a. on the average share price over the
period.
In addition, during the period, Romulus disposed of its property
portfolio, which generated approximately GBP0.3 million for ART A
shareholders: this amount was therefore paid to ART A shareholders
as a special dividend on 7 July 2017.
The net asset value per ordinary and A share at 30 September
2017 is 167.3 pence per share (31 March 2017: 158.9 pence per
share) (see note 10 of the financial statements).
Financing
ART's underlying investments are part funded through loan
facilities with external debt providers, which are secured on
underlying assets and non-recourse to the Group's other asset
investments.
As at 30 September 2017 bank borrowings secured on the H2O
shopping centre were EUR65 million (GBP57.3 million) on a seven
year loan commencing July 2017.
Further details of individual asset financing can be found under
the individual investment review sections later in this report.
Brexit
In June 2016, the "Brexit" Referendum was held, in which the
United Kingdom voted to leave the European Union. No material
adverse impacts have been noted within the Company's portfolio to
date. However, given the unprecedented decision, the Board
continues to monitor the situation for potential risks to the
Company's investments. Equally, the Board remains alert to possible
new investment opportunities that may arise.
Despite a pre and post-Brexit pause, transaction volumes across
the Company's investment markets remain sound. In some markets and
sectors investors are failing to deploy capital citing the limited
availability of good quality opportunities.
Foreign currency
The Board monitors foreign exchange exposures and considers
hedging where appropriate and has noted the increased market
volatility in exchange rates following the Brexit Referendum
result. All foreign currency balances have been translated at the
period-end rates of GBP1:EUR1.134 and GBP1:INR87.473.
Summary
ART actively manages its investment portfolio which continues to
be replenished via capital recycling from the sale of non-core
assets, loan repayments or strategic full or partial disinvestment
from assets that allow for profit-taking and portfolio
optimisation. This creates the opportunity for capital allocation
to new investments.
The proceeds from the sale of 70% of the equity interest in the
H2O shopping centre and the earlier divestment from IMPT allow ART
to further invest in its PRS and data centre build-to-rent
investments, with the potential for capital investment in excess of
GBP48 million. In addition, we expect to make significant
additional mezzanine loan investments.
New investment opportunities that are capable of delivering
strong risk adjusted cash flows are being actively pursued. ART's
active investment approach means that short term investment
positions will be considered when accretive to overall returns.
ART has achieved the significant milestone of securing planning
consent for each of its build-to-rent investments. These
investments offer the opportunity to create a higher yield on cost
than is available from purchasing existing built investments of the
same quality. During the development period a greater proportion of
the Company's total return is likely to come from capital growth
rather than earnings until its build-to-rent investments become
income producing.
The Company remains well positioned to continue to deliver
attractive returns through investing, realising and re-investing
its capital in asset backed investment opportunities.
David Jeffreys
Chairman
16 November 2017
Investment review
Portfolio overview as at 30 September 2017
Investment name
Investment Investment Income Investment Property type Investment % of
type value return location / underlying notes portfolio(1)
p.a. security
------------------ --------------- ------- ---------- ---------------- ----------------- -------------
High yielding debt (3.1%)
--------------------------------------------------------------------------------------------- -------------
Mezzanine Portfolio
Diversified
loan portfolio
focussed on
real estate
Mezzanine GBP3.5m 14.0% investments Secured mezzanine
loans (2) (3) UK and developments facilities 3.1%
------------------ --------------- ------- ---------- ---------------- ----------------- -------------
High yielding equity in property investments
(20.9%)
--------------------------------------------------------------------------------------------- -------------
H2O shopping centre
High-yield,
dominant
Madrid shopping
centre and 30% shareholding;
separate 7 year term
Indirect GBP16.0m 7.1% development bank finance
property (EUR18.1m) (4) Spain site facility 14.3%
Active UK Real Estate Fund plc
High-yield 27.6% of ordinary
commercial shares in
Equity GBP5.8m n/a UK portfolio fund 5.2%
------------------ -------------- -------- ---------- ---------------- ----------------- -------------
Cambourne Business Park
High-yield Medium term
business moderately
Indirect 11.7% park located geared bank
property GBP1.6m (4) UK in Cambridge finance facility 1.4%
------------------ --------------- ------- ---------- ---------------- ----------------- -------------
Ground rent investments (24.6%)
--------------------------------------------------------------------------------------------- -------------
Freehold Income Authorised Fund
Highly defensive
Ground 3.6% income; freehold No gearing;
rent fund GBP27.4m (5) UK ground rents monthly liquidity 24.6%
------------------ --------------- ------- ---------- ---------------- ----------------- -------------
Build-to-rent investments (13.0%)
--------------------------------------------------------------------------------------------- -------------
Unity and Armouries, Birmingham
Planning consent
Central for 90,000
Birmingham square feet
residential / 162 units
PRS development GBP3.8m n/a UK build-to-rent plus commercial 3.4%
------------------ --------------- ------- ---------- ---------------- ----------------- -------------
Monk Bridge, Leeds
Planning consent
for 205,129
square feet
/ 307 units
plus commercial
Outline consent
for further
193,071 square
Central Leeds feet / 300
residential units plus
PRS development GBP8.3m n/a UK build-to-rent commercial 7.4%
------------------ --------------- ------- ---------- ---------------- ----------------- -------------
Data centre,
Frankfurt
Binding
acquisition
agreement being
completed.
Planning consent
for 40,338
Industrial square metre
site with data centre
secured consent and 35 MVA
Direct GBP2.4m for data dual feed power
property (EUR2.7m) n/a Germany centre use supply 2.2%
------------------ --------------- ------- ---------- ---------------- ----------------- -------------
Other investments (18.9%)
--------------------------------------------------------------------------------------------- -------------
Galaxia
Legal process
underway
to recover
Development investment
GBP5.1m site located by enforcing
Investment (INR in NOIDA, arbitration
receivable 450m) n/a India Delhi, NCR award 4.6%
------------------ --------------- ------- ---------- ---------------- ----------------- -------------
Indirect asset backed investment
Indirect
investment
in diversified Short term
real estate investment
debt and in fund with
Elm Trading renewables low external
Limited GBP15.1m 5% UK portfolio gearing 13.5%
------------------ --------------- ------- ---------- ---------------- ----------------- -------------
Europip plc
Awaiting final 47% of ordinary
Indirect GBP0.4m shareholder shares in
equity (EUR0.5m) n/a N/A distribution fund 0.4%
------------------ --------------- ------- ---------- ---------------- ----------------- -------------
Healthcare & Leisure Property Limited
Indirect Leisure property No external
property GBP0.4m n/a UK fund gearing 0.4%
------------------ --------------- ------- ---------- ---------------- ----------------- -------------
Cash and short term investments (19.5%)
--------------------------------------------------------------------------------------------- -------------
Current or
'on call'
Cash GBP21.7m 0.1% UK accounts 19.5%
------------------- -------------- ------- ---------- ---------------- ----------------- -------------
(1) Percentage share shown based on NAV excluding the company's
sundry assets/liabilities
(2) Including accrued coupon at the balance sheet date
(3) Annual coupon
(4) Yield on equity over 12 months to 30 September 2017
(5) 12 months income return; post tax
High yielding equity in property investments
Property market overview
ART continues to remain focused on investments that offer the
potential to deliver attractive risk-adjusted returns by way of
value enhancement through active asset management, improvement of
net rental income, selective deployment of capital expenditure and
the ability to undertake strategic sales when the achievable price
is accretive to returns.
There continues to be significant amounts of capital seeking
investment opportunities globally that have the potential to
deliver yield or high risk adjusted total returns. Cash deposit
interest rates remain at close to zero while an increasingly
stabilised debt market provides liquidity and an ability to borrow
at relatively low interest rates. A combination of these factors
continues to create high investor demand for real estate and asset
backed sectors in general.
Active UK Real Estate Fund plc
Investment Investment Investment Income Property Investment
type value return type / underlying notes
security
============= =========== =========== ======== =================== ===========
Active UK Equity GBP5.8m n/a High-yield 27.6% of
Real Estate commercial ordinary
Fund plc UK portfolio capital
============= =========== =========== ======== =================== ===========
AURE is a fund that invests in a portfolio of high yielding UK
commercial property and aims to deliver a high and stable income
yield, together with the potential for capital appreciation. AURE's
shares are listed on The International Stock Exchange
(www.tisegroup.com).
ART increased its shareholding in AURE by acquiring a further
7.1% of AURE shares at a 10% discount to latest NAV. The investment
increases ART's holding of the share capital and voting rights in
AURE from 20.5% to 27.6%.
The following highlights were included in AURE's quarterly
update for the period ended 30 June 2017 (published August
2017):
-- Fund Performance & Benchmark Ranking: successful delivery
of the asset manager's business plan is reflected in AURE being
placed in the top 3% of performance against the year to date IPD
benchmark. AURE provided a year to date return of 8.9% compared to
the IPD benchmark of 4.6%.
-- Increased NAV: the net asset value per share has increased by
6.4% from the previous quarter (31 March 2017), which equates to an
increase of GBP1.2 million in net assets.
ARC is the investment manager of AURE.
ARC is pursuing value enhancement opportunities in the AURE
portfolio assets to increase net income and improve the profile of
this income through lease extensions, renewals and reducing
unrecoverable void costs.
H2O Shopping Centre, Madrid
Investment Investment Investment Income Property Investment
type value return type / underlying notes
security
=========== =========== ============ ======== =================== ==============
H2O Indirect GBP16.0m 7.1% High-yield, Completion
property (EUR18.1m) p.a. dominant of partial
(4) shopping sale of 70%
centre shareholding
=========== =========== ============ ======== =================== ==============
(4) Yield on equity over 12 months to 30 September 2017
H2O was opened in June 2007 and built to a high standard
providing shopping, restaurants and leisure around a central theme
of landscaped gardens and an artificial lake. H2O has a gross
lettable area of approximately 51,825 square metres comprising 118
retail units. In addition to a multiplex cinema, supermarket (let
to leading Spanish supermarket operator Mercadona) and restaurants,
it has a large fashion retailer base, including some of the
strongest international fashion brands, such as Nike, Zara, Mango,
Cortefiel, H&M, C&A and Massimo Dutti.
During the period ART completed the sale of a 70% equity
interest in the H2O shopping centre in Madrid for a consideration
of approximately GBP37.3 million. ART retains a 30% stake in the
joint venture, in order to participate in the future growth of the
centre. ARC, the investment manager of ART, continues to manage the
shopping centre.
As previously announced, the Company also recently completed the
refinance of the borrowings secured on the shopping centre with a
new EUR65.0 million seven year loan. The borrowings are
non-recourse to ART.
The asset management highlights are as follows:
-- Valuation: 2.5% valuation increase over the six months ending
30 September 2017; the valuation includes a small vacant site
located in the same planning zone as H2O that was acquired in
February 2017. The site has over 11,000 square metres of allocated
building rights, and subject to planning consent, part of these
rights could be transferred to the H2O plot, creating potential for
the future expansion the shopping centre.
-- Centre occupancy: 91.1% by area as at 30 September 2017
(94.5% by rental value with short term temporary rent discounts
also remaining in place to create further potential upside).
-- Footfall: the year to date visitor numbers at H2O continue to
increase strongly, growing 6.1% in the period to 30 September 2017,
assisted by the upgraded physical space, presence of new brands and
improving commercial mix.
-- Lease length: weighted average lease length of 2.6 years to
next break and 9.6 years to expiry (as at 30 September 2017).
Cambourne Business Park, Phase 1000, Cambridge
Investment Investment Investment Income Property Investment
type value return type / notes
underlying
security
=========== =========== =========== ======== ============ ==============
Cambourne Indirect GBP1.6m 11.7% High-yield Bank facility
Business property p.a. business at 60.0%
Park (4) park LTV for 2
years then
55.0% till
maturity
(current
interest
cover of
2.0 times
covenant
level)
=========== =========== =========== ======== ============ ==============
(4) Yield on equity over 12 months to 30 September 2017
The Company has an investment of GBP1.6 million in a joint
venture that owns Phase 1000 of Cambourne Business Park. The
property consists of three Grade A specification modern office
buildings constructed in 1999 and located in the town of Cambourne,
approximately 8 miles west of Cambridge city centre. The property
comprises 9,767 square metres of lettable area, is self-contained
and has 475 car parking spaces. Phase 1000 is situated at the front
of the business park with good access and visibility.
Phase 1000 is a high quality asset, fully let to Netcracker
Technology EMEA Ltd, Citrix Systems and Cambridge Cambourne Centre
Ltd (previously called 'Regus (Cambridge Cambourne) Ltd'). The
property has open B1 Business user planning permission and has
potential value-add opportunities.
Phase 1000 was purchased in a joint venture partnership with a
major overseas investor for GBP23.0 million including acquisition
costs. ART's equity contribution of GBP1.1 million, which
represented 10.0% of the total equity commitment at acquisition, is
invested into a joint venture entity, a subsidiary of which holds
the property. The property is currently delivering an equity income
return of 11.7% per annum as at 30 September 2017.
The Cambourne asset is funded by way of a GBP11.9 million (as at
30 September 2017) non-recourse bank debt facility which matures in
2020.
ARC is the investment manager to the joint venture owning the
Cambourne property and continues to pursue opportunities to add
value to the investment.
High yielding debt
Market overview
Underlying asset values have benefited from an improvement in
the wider investment market, resulting in enhanced credit quality
as loan to value ratios have either improved or are more firmly
supported as a result of greater liquidity and debt
availability.
ART continues to remain focussed on creating a diversified
portfolio of high yielding smaller mezzanine loans secured on real
estate assets. ART seeks opportunities that it can fully underwrite
with the support of the Investment Manager's asset-backed lending
experience and knowledge of the underlying assets and sectors, or
in partnership with specialist mezzanine providers. Repayment
proceeds from current loans, such as the repayment of the AURE loan
during the period, are expected be recycled into new loan
business.
Mezzanine Finance
Investment Investment Investment Income Property Investment
type value return type / underlying notes
security
=========== =========== =========== ======== =================== =====================
Mezzanine Mezzanine GBP3.5m 14.0% Portfolio Secured subordinated
finance loan (2) p.a. of mezzanine debt
(3) loan investments
=========== =========== =========== ======== =================== =====================
(2) Including accrued coupon at the balance sheet date
(3) Annual coupon
In line with the objective of creating a diversified portfolio
of smaller mezzanine loans, ART has furthered its mezzanine lending
investment, extending three further loans during the period and a
further three loans post period end.
As at 30 September 2017, ART had invested GBP3.5 million in
smaller real estate mezzanine loans. Post period end, a further
three loans totalling GBP1.3 million were funded and GBP3.6 million
committed
Further loan investments are continually being evaluated. Each
loan will typically have a two year term and a maximum 75.0% loan
to value ratio and is targeted to generate a double digit income
return. Repayment proceeds will be rotated into new loan
business.
Build-to-rent investments
Private Rented Sector
ART's investment in the PRS sector targets the increasing growth
opportunities identified in the private rented residential market
as a result of rising occupier demand and an undersupply of
accommodation and affords participation in a maturing market which
is attracting greater institutional participation. The opportunity
exists to create a portfolio delivering an attractive yield on
equity. The securing of a portfolio of critical mass will afford
participation in a maturing market which is attracting greater
institutional investment.
The Group's PRS investments offer scope to create resilient
equity income returns at an attractive yield on cost, with
potential for operating leverage to further enhance returns. The
investments also offer scope for capital growth as the sites mature
or planning is enhanced.
The investments provide the Group with flexibility to add value
by either constructing the development, funded with either
partnership equity capital, debt or contractor finance, and
subsequently holding the completed assets as investments; or,
alternatively, forward selling all or some of the developed units.
ART may also potentially benefit from government support for
borrowings secured against PRS assets.
Unity and Armouries, Birmingham
Investment Investment Investment Income Property Investment
type value return type / underlying notes
security
============ =========== =========== ======== =================== ===============
Unity and Direct GBP3.8m n/a Central Planning
Armouries, property Birmingham consent for
Birmingham residential 90,000 square
build-to-rent feet / 162
units plus
commercial
============ =========== =========== ======== =================== ===============
ART owns Unity and Armouries, a development site located in
central Birmingham with planning consent for 90,000 square feet of
net saleable space comprising 162 residential apartments with
ground floor commercial areas.
Detailed planning consent for ART's proposed project has been
granted. There are no outstanding Section 106/Community
Infrastructure Levy requirements and the site has an affordable
unit designation for nine flats. The approved project includes 162
residential units with ground floor commercial (3,700 sq. ft.) and
car parking spaces.
As at 30 September 2017, an independent valuation has been
undertaken by GVA valuing the site at GBP3.8 million and also
underwriting all of the current cost and value parameters currently
assumed. The project has a potential gross development value in
excess of GBP34 million.
Preferred construction partners have been selected. The project
design team continues to review the existing detailed planning
consent for possible enhancements to meet best in class PRS
requirements and a value engineering process is underway to
identify the most efficient and effective construction processes
and potential cost savings. Discussions are underway with potential
partners to investigate joint funding opportunities.
Monk Bridge, Leeds
Investment Investment Investment Income Property Investment
type value return type / underlying notes
security
============= =========== =========== ======== =================== =================
Monk Bridge, Direct GBP8.3m n/a Central Planning
Leeds property Leeds residential consent for
build-to-rent 205,129 square
feet / 307
units plus
commercial
Outline consent
for further
193,071 square
feet / 300
units plus
commercial
============= =========== =========== ======== =================== =================
ART owns Monk Bridge, a central Leeds development site with
detailed planning for 307 residential flats in three buildings over
180,049 square feet of net saleable space. The planning consent
includes the restoration of the adjacent Grade II listed former
railway arches as a raised park and ancillary retail, leisure and
restaurant uses of 25,080 square feet in 16 units. Outline consent
exists for a further 300 residential units in two buildings of up
to 21 storeys over 193,071 square feet of net saleable space. The
approval includes a provision for 5% of the 607 units as
affordable.
The Company acquired the development site in December 2015 for a
price of GBP3.75 million at which time the site had implemented
planning consent for 269 residential units with an estimated GDV of
GBP55.0 million.
As at 30 September 2017, an independent valuation was undertaken
by Savills valuing the site at GBP8.3 million. The project has a
potential estimated gross development value in excess of GBP150
million.
Preferred construction partners have been selected. The project
design team continues to review the existing detailed planning
consent for possible enhancements to meet best in class PRS
requirements and a value engineering process is underway to
identify the most efficient and effective construction processes
and potential cost savings. Discussions are underway with potential
partners to investigate joint funding opportunities.
Data centre, Frankfurt
Investment Investment Investment Income Property Investment
type value return type / underlying notes
security
============= =========== =========== ======== =================== ==============
Data centre, Direct GBP2.4m n/a Industrial Agreement
Frankfurt property (EUR2.7m) site with to purchase,
potential subject to
for data planning
centre use permission
============= =========== =========== ======== =================== ==============
In November 2016, ART entered into a conditional agreement to
purchase, via an SPV, an industrial site in Frankfurt which it
identified as being suitable for the development of a data centre,
where the high barriers of entry to this sector were potentially
capable of being met. The agreement to purchase the site was
subject to securing planning consent for a data centre with a
minimum gross external area of 23,000 square metres and a specified
minimum electrical power supply with a dual feed for the proposed
development.
During the intervening period ART undertook a detailed planning
exercise, creating detailed designs for a data centre building and
its mechanical and electrical systems. Following a collaborative
approach with the local authorities, detailed planning consent was
approved for a five-story data centre extending to 40,338 square
metres. Further, the local utility provider has offered to supply a
dual feed power supply on a phased basis over the coming three
years, synchronised with local electricity substation and cable
route upgrades.
Following the achievement of the above milestones the conditions
precedent for the site purchase were satisfied. The Company has now
completed the site purchase and entered into the power commitment
contract. The payment of the outstanding site purchase price was
EUR12.85 million (GBP11.3 million). The electricity supply cost
commitments will become payable in phases during the electricity
upgrade period of approximately three years. Associated costs
relating to the construction of an electricity receptor building on
the site and associated pre-identified ground preparation works
will also be undertaken. These commitments will bring the Company's
total investment into the data centre project to EUR28 million
(GBP24.7 million).
The Company's strategy is to secure a tenant pre-let and fund
the balance of development costs with debt. Active marketing of the
project to potential data centre occupiers is already underway.
The securing of planning consent and a power commitment
represents a significant step in the advancement of the Company's
build-to-rent portfolio.
Freehold ground rent investments
ART invests in a fund which holds a diversified portfolio of UK
residential property freehold ground rents with a view to achieving
steady and predictable returns, a consistent income stream and
prospects for growth.
A ground rent is the payment made by the lessee of a property to
the freeholder of that property. The investment represents the
underlying freehold interest in a property which is subject to a
lease for a period of time usually between 99 and 999 years.
Freehold Income Authorised Fund ("FIAF")
Investment Investment Investment Income Property Investment
type value return type / underlying notes
security
=================== =========== =========== ======== =================== ===================
Freehold Equity GBP27.4m 3.6% Highly defensive No gearing;
Income Authorised in ground p.a. income; monthly liquidity
Fund rent fund (5) freehold
ground rents
=================== =========== =========== ======== =================== ===================
(5) 12 months income return; post tax
The Company has invested GBP27.4 million as at 30 September 2017
in FIAF, an open-ended fund that invests in UK freehold ground
rents with a net asset value of GBP305.7 million as at 30 September
2017.
The following highlights were reported in the FIAF fact sheet as
at 30 September 2017 (published in October 2017):
-- FIAF continues its unbroken 24 year track record of positive inflation beating returns.
-- 85% of its freeholds have a form of inflation protection
through periodic uplifts linked to Retail Price Index (RPI),
property values or fixed uplifts.
-- From 12 January 2017, a 5% dilution levy will be applied to
subscriptions into FIAF. This levy remains constantly under
review.
ART's total return on its investment in FIAF was 9.0%
(annualised post tax) for the year ended 30 September 2017.
Cash balances
Investment Investment Investment Income Property Investment
type value return type / underlying notes
security
============= =========== =========== ======== =================== ====================
Cash balance Cash GBP21.7m 0.1 % Cash deposits Held between
p.a. / current banks with
accounts a range of
deposit maturities
============= =========== =========== ======== =================== ====================
As at 30 September 2017, the Group had cash balances of GBP21.7
million.
Other investments
Indirect Asset Backed Investment - Elm Trading Limited
Investment Investment Investment Income Property Investment
type value return type / underlying notes
security
============ ================ =========== ======== ==================== =============
Elm Trading Equity GBP15.1m 5% p.a. Portfolio Low external
Limited in diversified of real gearing
fund estate loans
and renewable
energy investments
============ ================ =========== ======== ==================== =============
During the period, ART invested GBP15.1 million in Elm Trading
Limited ("Elm"), a fund with a diversified portfolio of GBP223.9
million, which is principally comprises real estate debt and
renewable energy infrastructure investments.
The investment is anticipated to be short term and is expected
to provide a better return than currently earned on the Company's
cash balances.
The Board of Directors of ELM Trading is drawn from the partners
and employees of Alpha Real Property Investment Advisers LLP
("ARPIA"), a subsidiary of ARC.
European Property Investment Portfolio plc ("Europip")
Investment Investment Investment Income Property Investment
type value return type / underlying notes
security
=========== =========== =========== ======== =================== ====================
Europip Indirect GBP0.4m n/a Liquidated Awaiting
equity (EUR0.4m) assets final distribution
=========== =========== =========== ======== =================== ====================
ART has a 47.0% stake in Europip (shares are non-voting), an
Isle of Man domiciled open ended investment company. Europip
invested in a directly owned commercial property portfolio in
Norway.
The portfolio has undergone an orderly realisation process and
has completed the sale of its final asset and is in the process of
being wound-up. Proceeds from asset sales have been used to redeem
85.0% of ART's shares. The remaining value of ART's investment in
Europip is valued at GBP0.4 million and a further capital
redemption distribution is expected in early 2018.
A subsidiary of ARC, Alpha Real Property Investment Advisers LLP
("ARPIA") is the investment manager for Europip.
Healthcare & Leisure Property Limited ("HLP")
Investment Investment Investment Income Property Investment
type value return type / underlying notes
security
=========== =========== =========== ======== =================== ============
Healthcare Indirect GBP0.4m n/a Leisure No external
& Leisure property property gearing
Property fund
Limited
=========== =========== =========== ======== =================== ============
HLP has invested in companies operating in the hotel, care home,
house building and leisure sectors throughout the UK. HLP's
investments are predominantly un-geared.
HLP is managed by Albion Ventures LLP, a specialist UK venture
capital manager. No new investments are being made by HLP.
During September 2017 HLP received proceeds from the sale of a
hotel investment. This enabled ART to redeem shares to the value of
circa GBP1.0 million. As at 30 September 2017, ART had GBP0.4
million invested in HLP. ART continues to receive income from its
investment while HLP's underlying assets are sold.
Galaxia, National Capital Region, NOIDA
Investment Investment Investment Income Property Investment
type value return type / underlying notes
security
=========== ============ =========== ======== =================== ===========
Galaxia Investment GBP5.1m n/a Development Asset held
receivable (INR site in for sale
450m) NOIDA, Delhi,
NCR
=========== ============ =========== ======== =================== ===========
ART invested INR 450.0 million (GBP5.1 million) in the Galaxia
project, a development site extending to 11.2 acres with the
potential to develop 1.2 million square feet. Galaxia is located in
NOIDA, an established, well planned suburb of Delhi that continues
to benefit from new infrastructure projects and is one of the
principal office micro-markets in India. The Company has a 50.0%
shareholding in the SPV which controls the Galaxia site. There are
no bank borrowings on the asset.
On 2 February 2011, ART recommenced arbitration proceedings
against its development partner Logix Group ("Logix") in order to
protect its Galaxia investment.
In January 2015, the Arbitral Tribunal, by a majority, decreed
that Logix and its principals had breached the terms of the
shareholders' agreement and has awarded the Company:
-- Return of its entire capital invested of INR 450.0 million
(equivalent to GBP5.1 million using the period end exchange rate)
along with interest at 18.0% per annum from 31 January 2011 to 20
January 2015.
-- All costs incurred towards the arbitration.
-- A further 15.0% interest per annum on all sums was awarded to
the Company from 20 January 2015 until the actual date of payment
by Logix of the award.
Logix challenged the validity of the arbitration award in the
Delhi High Court and latterly to the Division Bench of the Delhi
High Court. Both courts dismissed the respective appeals and upheld
the award declared in favour of the Company.
Logix have since appealed the dismissal to the Supreme Court of
India. The Supreme Court admitted the appeal but have ordered Logix
to deposit INR 200 million (GBP2.3 million) with the court. A
hearing is scheduled for November 2017.
ART has commenced execution of the award and the Delhi High
Court has issued a warrant of attachment against the primary
residential property owned by Shakti Nath and Meena Nath, promoters
of Logix Group. The Company has had the residential property
independently valued at approximately GBP6.0 million. ART continues
to actively pursue Logix directors for the recovery of the
award.
Summary
ART's portfolio provides a balance of stable high yielding
assets and investments that offer scope to deliver strong
cashflows, capital value growth and attractive risk adjusted total
returns.
ART continues to actively pursue new investment targets that
have the potential to generate attractive risk adjusted total
returns while undertaking selective divestment from the current
portfolio where profit taking opportunities are identified to
enable capital recycling.
Brad Bauman and Gordon Smith
For and on behalf of the Investment Manager
16 November 2017
Principal risks and uncertainties
The principal risks and uncertainties facing the ART Group (the
"Group") can be outlined as follows:
-- Rental income, fair value of investment properties (directly
or indirectly held) and fair value of the Group's equity
investments are affected, together with other factors, by general
economic conditions and/or by the political and economic climate of
the jurisdictions in which the Group's investments and investment
properties are located.
-- The Group's loan investments are exposed to credit risk which
arise by the potential failure of the Group's counter parties to
discharge their obligations when falling due; this could reduce the
amount of future cash inflows from financial assets on hand at the
balance sheet date; the Group receives regular updates from the
relevant investment manager as to the performance of the underlying
investments and assesses their credit risk as a result.
-- In June 2016, the "Brexit" Referendum was held, in which the
United Kingdom voted to leave the European Union. No material
adverse impacts have affected the Group's portfolio to date
although an increased market volatility in exchange rates has been
noted. The Board will continue to monitor the situation for
potential risks to the Group's investments.
The Board believes that the above principal risks and
uncertainties, which are discussed more extensively in the annual
report for the year ended 31 March 2017, would be equally
applicable to the remaining six month period of the current
financial year.
Statement of Directors' Responsibilities
The Directors confirm that to the best of their knowledge:
-- the condensed consolidated financial statements have been
prepared in accordance with IAS 34 'Interim Financial Reporting',
as adopted by the European Union; and
-- the half year report includes a fair review of the
information required by DTR 4.2.7R, being an indication of the
important events that have occurred during the first six months of
the financial year, and their impact on the half year report, and a
description of the principal risks and uncertainties for the
remaining six months of the financial year; and
-- the half year report includes a fair review of the
information required by DTR 4.2.8R, being the related parties
transactions that have taken place in the first six months of the
current financial year and that have materially affected the
financial position or the performance of the Group during that
period; and any changes in the related parties transactions
described in the last annual report that could have a material
effect on the financial position or performance of the enterprise
in the first six months of the current financial year.
The Directors of Alpha Real Trust Limited are listed below and
have been Directors throughout the period.
By order of the Board
David Jeffreys
Chairman
16 November 2017
Independent review report
To Alpha Real Trust Limited
Introduction
We have been engaged by the Company to review the condensed
consolidated set of financial statements in the half year report
for the six months ended 30 September 2017 which comprises the
condensed consolidated statement of comprehensive income, condensed
consolidated balance sheet, condensed consolidated cash flow
statement, condensed consolidated statement of changes in equity
and related notes. We have read the other information contained in
the half year financial report and considered whether it contains
any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
Directors' responsibilities
The half year report is the responsibility of and has been
approved by the Directors. The Directors are responsible for
preparing the half year report in accordance with the Disclosure
and Transparency Rules of the United Kingdom's Financial Conduct
Authority.
As disclosed in note 2, the annual financial statements of the
Group are prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union. The
condensed consolidated set of financial statements included in this
half year report have been prepared in accordance with
International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed consolidated set of financial statements in the half
year report based on our review.
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting its responsibilities in
respect of half year reporting in accordance with the Disclosure
and Transparency Rules of the United Kingdom's Financial Conduct
Authority and for no other purpose. No person is entitled to rely
on this report unless such a person is a person entitled to rely
upon this report by virtue of and for the purpose of our terms of
engagement or has been expressly authorised to do so by our prior
written consent. Save as above, we do not accept responsibility for
this report to any other person or for any other purpose and we
hereby expressly disclaim any and all such liability.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Information Performed by the Independent Auditor of the
Entity' issued by the Auditing Practices Board for use in the
United Kingdom. A review of interim financial information consists
of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed consolidated set of
financial statements in the half year report for the six months to
30 September 2017 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
BDO Limited
Chartered Accountants
Place du Pré
Rue du Pré
St Peter Port
Guernsey
16 November 2017
Condensed consolidated statement of comprehensive income
For the six months ended For the six months ended
30 September 2017 (unaudited) 30 September 2016 (unaudited)
-------------------------------------------- ----------------------------------- -----------------------------------
Revenue Capital Total Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Income
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Revenue 3 3,624 - 3,624 4,775 - 4,775
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Change in the revaluation of
investment property 11 - 1,652 1,652 - 4,662 4,662
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Gains/(losses) on financial assets
and liabilities held at fair
value through profit or loss 6 1,267 56 1,323 916 (446) 470
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Total income 4,891 1,708 6,599 5,691 4,216 9,907
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Profit on investment property
disposal - - - - 138 138
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Profit on subsidiary disposal - 4,191 4,191 - - -
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Expenses
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Property operating expenses (1,409) - (1,409) (2,000) - (2,000)
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Investment Manager's fee (981) - (981) (920) - (920)
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Other administration costs (580) - (580) (433) - (433)
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Total operating expenses (2,970) - (2,970) (3,353) - (3,353)
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Operating profit 1,921 5,899 7,820 2,338 4,354 6,692
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Share of profit/(loss) of joint
ventures 14 258 225 483 61 (13) 48
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Finance income 4 530 1,306 1,836 1,183 - 1,183
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Finance costs 5 (646) - (646) (878) (23) (901)
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Profit before taxation 2,063 7,430 9,493 2,704 4,318 7,022
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Taxation 7 (7) - (7) (15) - (15)
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Profit after taxation 2,056 7,430 9,486 2,689 4,318 7,007
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Other comprehensive income for the
period
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Items that may be reclassified to
profit or loss in subsequent
periods:
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Exchange differences arising on
translation of foreign operations - 1,103 1,103 - 3,521 3,521
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Reclassification of foreign
exchange gains on translation of
foreign operations following
disposals - (3,987) (3,987) - - -
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Other comprehensive
income/(expense) for the period - (2,884) (2,884) - 3,521 3,521
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Total comprehensive income for the
period 2,056 4,546 6,602 2,689 7,839 10,528
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Earnings per ordinary share (basic
& diluted) 9 13.3p 10.1p
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Earnings per A share (basic &
diluted) 17.7p 10.1p
----------------------------------- ------- ----------- ---------- ---------- ----------- ---------- ----------
Adjusted earnings per ordinary
share and A share (basic &
diluted) 9 3.0p 3.9p
The total column of this statement represents the Group's
statement of comprehensive income, prepared in accordance with
IFRS. The revenue and capital columns are supplied as supplementary
information permitted under IFRS. All items in the above statement
derive from continuing operations. The accompanying notes form an
integral part of these financial statements.
Condensed consolidated balance sheet
Notes 30 September 31 March 2017
2017
(unaudited) (audited)
GBP'000 GBP'000
--------------------------- ------ ------------- --------------
Non-current assets
--------------------------- ------ ------------- --------------
Investment property 11 14,508 112,442
--------------------------- ------ ------------- --------------
Investment receivable 12 5,144 5,535
--------------------------- ------ ------------- --------------
Investments held
at fair value 13 6,669 7,814
--------------------------- ------ ------------- --------------
Investment in joint
ventures 14 17,637 1,538
--------------------------- ------ ------------- --------------
Trade and other
receivables 15 280 5,280
--------------------------- ------ ------------- --------------
44,238 132,609
--------------------------- ------ ------------- --------------
Current assets
--------------------------- ------ ------------- --------------
Investments held
at fair value 13 42,544 26,113
--------------------------- ------ ------------- --------------
Trade and other
receivables 15 6,972 13,461
--------------------------- ------ ------------- --------------
Cash and cash equivalents 21,686 5,397
--------------------------- ------ ------------- --------------
71,202 44,971
--------------------------- ------ ------------- --------------
Total assets 115,440 177,580
--------------------------- ------ ------------- --------------
Current liabilities
--------------------------- ------ ------------- --------------
Trade and other
payables 16 (814) (6,789)
--------------------------- ------ ------------- --------------
Bank borrowings 17 - (60,618)
--------------------------- ------ ------------- --------------
(814) (67,407)
--------------------------- ------ ------------- --------------
Total assets less
current liabilities 114,626 110,173
--------------------------- ------ ------------- --------------
Non-current liabilities
--------------------------- ------ ------------- --------------
Bank borrowings 17 - -
--------------------------- ------ ------------- --------------
Total liabilities (814) (67,407)
--------------------------- ------ ------------- --------------
Net assets 114,626 110,173
--------------------------- ------ ------------- --------------
Equity
--------------------------- ------ ------------- --------------
Share capital 18 - -
--------------------------- ------ ------------- --------------
Special reserve 78,261 79,306
--------------------------- ------ ------------- --------------
Translation reserve (873) 2,011
--------------------------- ------ ------------- --------------
Capital reserve 17,669 10,511
--------------------------- ------ ------------- --------------
Revenue reserve 19,569 18,345
--------------------------- ------ ------------- --------------
Total equity 114,626 110,173
--------------------------- ------ ------------- --------------
Net asset value
per ordinary and
A share 10 167.3p 158.9p
The financial statements were approved by the Board of Directors
and authorised for issue on 16 November 2017. They were signed on
its behalf by David Jeffreys.
David Jeffreys
Director
The accompanying notes form an integral part of these financial
statements.
Condensed consolidated cash flow statement
For the six For the six
months ended months ended
30 September 30 September
2017 2016
(unaudited) (unaudited)
GBP'000 GBP'000
-------------------------------- -------------- --------------
Operating activities
-------------------------------- -------------- --------------
Profit for the period
after taxation 9,486 7,007
-------------------------------- -------------- --------------
Adjustments for:
-------------------------------- -------------- --------------
Change in revaluation
of investment property (1,652) (4,662)
-------------------------------- -------------- --------------
Net gains on financial
assets and liabilities
held at fair value through
profit or loss (1,323) (470)
-------------------------------- -------------- --------------
Profit on investment
property disposal (4,191) (138)
-------------------------------- -------------- --------------
Taxation 7 15
-------------------------------- -------------- --------------
Share of profit of joint
venture (483) (48)
-------------------------------- -------------- --------------
Finance income (1,836) (1,183)
-------------------------------- -------------- --------------
Finance cost 646 901
-------------------------------- -------------- --------------
Operating cash flows
before movements in working
capital 654 1,422
-------------------------------- -------------- --------------
Movements in working
capital:
-------------------------------- -------------- --------------
Increase in trade and
other receivables (1,441) (561)
-------------------------------- -------------- --------------
Decrease in trade and
other payables (2,324) (1,313)
-------------------------------- -------------- --------------
Cash flows used in operations (3,111) (452)
-------------------------------- -------------- --------------
Interest received 3 7
-------------------------------- -------------- --------------
Interest paid (314) (772)
-------------------------------- -------------- --------------
Tax paid (1) (8)
-------------------------------- -------------- --------------
Cash flows used in operating
activities (3,423) (1,225)
-------------------------------- -------------- --------------
Investing activities
-------------------------------- -------------- --------------
Acquisition of investments (21,237) (1,000)
-------------------------------- -------------- --------------
Disposal of 70% equity 36,936 -
interest in H2O
-------------------------------- -------------- --------------
Cash adjustment for (4,811) -
part disposal during
the period
-------------------------------- -------------- --------------
Proceeds on disposal
of investment property - 1,890
-------------------------------- -------------- --------------
Redemption on investments 5,269 2,530
-------------------------------- -------------- --------------
Redemption on preference
shares' investments 3,021 253
-------------------------------- -------------- --------------
Capital expenditure on
investment property (1,780) (1,057)
-------------------------------- -------------- --------------
Loan repayment from related
party 13,678 2,500
-------------------------------- -------------- --------------
Loans granted to third (1,526) -
parties
-------------------------------- -------------- --------------
Loan interest received 792 1,205
-------------------------------- -------------- --------------
Dividend income from
joint venture - 40
-------------------------------- -------------- --------------
Dividend income from
other investments 4 15
-------------------------------- -------------- --------------
Capital distribution 274 -
from other investments
-------------------------------- -------------- --------------
Cash flows from/(used
in) investing activities 30,620 6,376
-------------------------------- -------------- --------------
Financing activities
-------------------------------- -------------- --------------
Bank loan repayment (60,810) -
-------------------------------- -------------- --------------
Bank loan advanced 55,622 -
-------------------------------- -------------- --------------
Bank loan costs (1,432) -
-------------------------------- -------------- --------------
Share buyback (1,018) -
-------------------------------- -------------- --------------
Share buyback costs (27) -
-------------------------------- -------------- --------------
Cash paid on maturity
of foreign exchange forward (1,406) (1,348)
-------------------------------- -------------- --------------
Foreign exchange forward
collateral (paid)/received (850) 605
-------------------------------- -------------- --------------
Interest rate swaption (290) -
paid
-------------------------------- -------------- --------------
Ordinary dividends paid (832) (832)
-------------------------------- -------------- --------------
Special dividend paid (272) -
to A shareholders
-------------------------------- -------------- --------------
Cash flows used in financing
activities (11,315) (1,575)
-------------------------------- -------------- --------------
Net increase in cash
and cash equivalents 15,882 3,576
-------------------------------- -------------- --------------
Cash and cash equivalents
at beginning of period 5,397 3,863
-------------------------------- -------------- --------------
Exchange translation
movement 407 178
-------------------------------- -------------- --------------
Cash and cash equivalents
at end of period 21,686 7,617
The accompanying notes form an integral part of these financial
statements.
Condensed consolidated statement of changes in equity
For the six months Notes Special Translation Capital Revenue Total
ended 30 September reserve reserve reserve reserve equity
2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(unaudited)
------------------------ ------ --------- ------------ --------- --------- ---------
At 1 April 2017 79,306 2,011 10,511 18,345 110,173
------------------------ ------ --------- ------------ --------- --------- ---------
Total comprehensive
income for the period
------------------------ ------ --------- ------------ --------- --------- ---------
Profit for the period - - 7,430 2,056 9,486
------------------------ ------ --------- ------------ --------- --------- ---------
Other comprehensive
income for the period - (2,884) - - (2,884)
------------------------ ------ --------- ------------ --------- --------- ---------
Total comprehensive
income for the period - (2,884) 7,430 2,056 6,602
------------------------ ------ --------- ------------ --------- --------- ---------
Transactions with
owners
------------------------ ------ --------- ------------ --------- --------- ---------
Dividends 8 - - (272) (832) (1,104)
------------------------ ------ --------- ------------ --------- --------- ---------
Share buyback 18 (1,018) - - - (1,018)
------------------------ ------ --------- ------------ --------- --------- ---------
Share buyback costs (27) - - - (27)
------------------------ ------ --------- ------------ --------- --------- ---------
Total transactions
with owners (1,045) - (272) (832) (2,149)
------------------------ ------ --------- ------------ --------- --------- ---------
At 30 September 2017 78,261 (873) 17,669 19,569 114,626
------------------------ ------ --------- ------------ --------- --------- ---------
For the six months Notes Special Translation Capital Revenue Total
ended 30 September reserve reserve reserve reserve equity
2016 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(unaudited)
------------------------ ------- --------- ------------ --------- --------- ---------
At 1 April 2016 79,306 (1,319) 2,776 14,858 95,621
--------------------------------- --------- ------------ --------- --------- ---------
Total comprehensive
income for the period
------------------------ ------- --------- ------------ --------- --------- ---------
Profit for the period - - 4,318 2,689 7,007
--------------------------------- --------- ------------ --------- --------- ---------
Other comprehensive
income for the period - 3,521 - - 3,521
--------------------------------- --------- ------------ --------- --------- ---------
Total comprehensive
income for the period - 3,521 4,318 2,689 10,528
--------------------------------- --------- ------------ --------- --------- ---------
Transactions with
owners
------------------------ ------- --------- ------------ --------- --------- ---------
Dividends - - - (832) (832)
--------------------------------- --------- ------------ --------- --------- ---------
Share buyback - - - - -
------------------------ ------- --------- ------------ --------- --------- ---------
Share buyback costs - - - - -
------------------------ ------- --------- ------------ --------- --------- ---------
Total transactions
with owners - - - (832) (832)
--------------------------------- --------- ------------ --------- --------- ---------
At 30 September 2016 79,306 2,202 7,094 16,715 105,317
--------------------------------- --------- ------------ --------- --------- ---------
The accompanying notes form an integral part of these financial
statements.
Notes to the condensed consolidated financial statements for the
period ended 30 September 2017
1. General information
The Company is a limited liability, closed-ended investment
company incorporated in Guernsey. The Group comprises the Company
and its subsidiaries. The condensed consolidated financial
statements are presented in pounds Sterling as this is the currency
in which the funds are raised and in which investors are seeking a
return. The Company's functional currency is Sterling and the
subsidiaries' currencies are Euro, Indian Rupees and Sterling. The
presentation currency of the Group is Sterling. The period end
exchange rate used is GBP1:INR87.473 (31 March 2017:
GBP1:INR81.305) and the average rate for the period used is
GBP1:INR83.359 (30 September 2016: GBP1:INR91.916). For Euro based
transactions the period end exchange rate used is GBP1:EUR1.134 (31
March 2017: GBP1:EUR1.172) and the average rate for the period used
is GBP1:EUR1.138 (30 September 2016: GBP1:EUR1.223).
The address of the registered office is given below. The nature
of the Group's operations and its principal activities are set out
in the Chairman's Statement. The half year report was approved and
authorised for issue on 16 November 2017 and signed by David
Jeffreys on behalf of the Board.
2. Significant accounting policies
Basis of preparation
The unaudited condensed consolidated financial statements in the
half year report for the six months ended 30 September 2017 have
been prepared in accordance with International Accounting Standard
(IAS) 34, 'Interim Financial Reporting' as adopted by the European
Union. This half year report and condensed consolidated financial
statements should be read in conjunction with the Group's annual
report and consolidated financial statements for the year ended 31
March 2017, which have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union and are available at the Company's website
(www.alpharealtrustlimited.com).
The accounting policies adopted and methods of computation
followed in the condensed consolidated financial statements are
consistent with those applied in the preparation of the Group's
annual consolidated financial statements for the year ended 31
March 2017 and are expected to be applied to the Group's annual
consolidated financial statements for the year ending 31 March
2018.
The preparation of the half year report requires Directors to
make estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities, and the disclosure of
contingent liabilities at the date of the half year report. If in
the future such estimates and assumptions, which are based on the
Directors' best judgement at the date of the half year report,
deviate from actual circumstances, the original estimates and
assumptions will be modified as appropriate in the period in which
the circumstances change.
On 4 August 2017, the Group disposed of 70% of its equity
interest in the H2O shopping centre in Madrid, Spain ('H2O'), to
CBRE European Co-Investment Fund ('CBRE'), managed by CBRE Global
Investors, for EUR41.3 million (GBP36.4 million). The disposal
resulted in a profit of GBP0.2 million for the Group and, after
releasing prior year cumulative foreign exchange translation
adjustments related to the H2O structure, a gain of GBP4.2 million.
The Group has retained the investment via a 30% equity interest in
a newly formed Dutch entity, CBRE H2O Rivas Holding NV, which owns
100% of the three Spanish subsidiaries that hold H2O. As of 4
August 2017, the Group therefore no longer consolidates its
interest in the structure holding H2O: in compliance with IFRS 11
(Joint Arrangements), the Group has adopted the equity method of
accounting for its joint venture commencing with the half year
report for the six months ended 30 September 2017. As a result, the
balances related to the H2O investment: investment property (note
11), borrowings (note 17), cash (above) and other debtors and
creditors are no longer included in the consolidation. The value of
the Group investment in the CBRE H2O Rivas Holding NV joint venture
is disclosed in note 14. Income and expenses related to the H2O
investment have been recognised in the statement of comprehensive
income up to 4 August 2017; thereafter the Group has recognised its
share of the joint venture profit up to the period end (note
14).
3. Revenue
For the six For the six
months ended months ended
30 September 30 September
2017 2016
GBP'000 GBP'000
----------------- -------------- --------------
Rental income 2,520 3,454
----------------- -------------- --------------
Service charges 1,095 1,320
----------------- -------------- --------------
Other income 9 1
----------------- -------------- --------------
Total 3,624 4,775
The total revenue for the period relates to the H2O investment
up to 4 August 2017; thereafter the Group has recognised its share
of the joint venture profit up to the period end (note 2).
4. Finance income
For the six For the six
months ended months ended
30 September 30 September
2017 2016
GBP'000 GBP'000
--------------------------- -------------- --------------
Bank interest received 3 7
--------------------------- -------------- --------------
Interest receivable on
loans to related parties 359 1,176
--------------------------- -------------- --------------
Interest receivable on 168 -
loans to third parties
--------------------------- -------------- --------------
Foreign exchange gain 1,306 -
--------------------------- -------------- --------------
Total 1,836 1,183
5. Finance costs
For the six For the six
months ended months ended
30 September 30 September
2017 2016
GBP'000 GBP'000
----------------------------- -------------- --------------
Interest on bank borrowings 646 878
----------------------------- -------------- --------------
Foreign exchange loss - 23
----------------------------- -------------- --------------
Total 646 901
Interest on bank borrowings for the period relates to the H2O
investment up to 4 August 2017; thereafter the Group has recognised
its share of the joint venture profit up to the period end (note
2).
6. Net gains and losses on financial assets and liabilities held
at fair value through profit or loss
For the six For the six
months ended months ended
30 September 30 September
2017 2016
GBP'000 GBP'000
------------------------------ -------------- --------------
Unrealised gains and losses
on financial assets and
liabilities held at fair
value through profit or
loss
------------------------------ -------------- --------------
Movement in fair value
of investments 767 444
------------------------------ -------------- --------------
Undistributed investment
income 1,263 901
------------------------------ -------------- --------------
Realised gains and losses
on financial assets and
liabilities held at fair
value through profit or
loss
------------------------------ -------------- --------------
Gain realised on investments 407 -
------------------------------ -------------- --------------
Dividends received from
investments 4 15
------------------------------ -------------- --------------
Capital distribution from 274 -
other investments
------------------------------ -------------- --------------
Gain on interest rate 14 -
swaption
------------------------------ -------------- --------------
Loss on foreign exchange
forward (1,406) (890)
------------------------------ -------------- --------------
Net gains on financial
assets and liabilities
held at fair value through
profit or loss 1,323 470
7. Taxation
For the six For the six
months ended months ended
30 September 30 September
2017 2016
GBP'000 GBP'000
-------------- -------------- --------------
Current tax 7 15
-------------- -------------- --------------
Deferred tax - -
-------------- -------------- --------------
Tax expense 7 15
The Company is exempt from Guernsey taxation on income derived
outside of Guernsey and bank interest earned in Guernsey. A fixed
annual fee of GBP1,200 is payable to the States of Guernsey in
respect of this exemption. No charge to Guernsey taxation arises on
capital gains. The Group is liable to foreign tax arising on
activities in the overseas subsidiaries. The Company has
investments, subsidiaries and joint venture operations in
Luxembourg, United Kingdom, the Netherlands, Spain, Cyprus, Jersey
and India.
The current tax charge is due in Cyprus, Luxembourg and the
Netherlands.
Unused tax losses in Luxembourg, Spain and the United Kingdom
can be carried forward indefinitely. Unused tax losses in the
Netherlands can be carried forward for nine years. Unused tax
losses in Cyprus can be carried forward for five years.
Due to the unpredictability of future taxable profits, the
Directors believe it is not prudent to recognise a deferred tax
asset for the Group's unused tax losses.
8. Dividends
Dividend reference Shares Dividend Paid Date of
period payment
'000 per share GBP
Quarter ended 31 21 July
March 2017 69,323 0.6p 415,939 2017
-------------------- ------- ---------- -------- -------------
Quarter ended 30 22 September
June 2017 69,323 0.6p 415,939 2017
-------------------- ------- ---------- -------- -------------
Total 831,878
-------------------- ------- ---------- -------- -------------
In addition, during the period, Romulus disposed of its property
portfolio, which generated approximately GBP0.3 million for ART A
shareholders: this amount was therefore paid to ART A shareholders
as a special dividend on 7 July 2017.
The Company will pay a dividend of 0.6p per share for the
quarter ended 30 September 2017 on 15 December 2017.
This dividend has not been included as a liability in the half
year report.
9. Earnings per share
The calculation of the basic and diluted earnings per ordinary
share is based on the following data:
For For Year For
the the ended the
six six 31 March six
months months 2017 months
ended ended ended
30 September 30 September 30 September
2017 2017 2016
------------------------------- -------------- -------------- ---------- --------------
Ordinary A share Ordinary Ordinary
share and and
A share A share
------------------------------- -------------- -------------- ---------- --------------
Earnings per statement
of comprehensive income
(GBP'000) 8,383 1,103 12,886 7,007
------------------------------- -------------- -------------- ---------- --------------
Basic and diluted earnings
pence per share 13.3 17.7 18.6p 10.1p
------------------------------- -------------- -------------- ---------- --------------
Earnings per statement
of comprehensive income
(GBP'000) 8,383 1,103 12,886 7,007
------------------------------- -------------- -------------- ---------- --------------
Net change in the revaluation
of investment properties (1,503) (149) (8,790) (4,662)
------------------------------- -------------- -------------- ---------- --------------
Profit on subsidiary
disposal (3,813) (378) - -
------------------------------- -------------- -------------- ---------- --------------
Profit on investment
property disposal - - (122) (138)
------------------------------- -------------- -------------- ---------- --------------
Movement in fair value
of investments (1,069) (105) (2,568) (444)
------------------------------- -------------- -------------- ---------- --------------
Gain on interest rate
swaption (13) (1) - -
------------------------------- -------------- -------------- ---------- --------------
Loss on foreign exchange
forward 1,279 127 904 890
------------------------------- -------------- -------------- ---------- --------------
Movement in fair value 5 - - -
of the joint ventures'
interest rate swaption
(mark to market)
------------------------------- -------------- -------------- ---------- --------------
Net change in the revaluation
of the joint ventures'
investment property (209) (21) 19 13
------------------------------- -------------- -------------- ---------- --------------
Investment Manager's - - 2,743 -
fees (performance fee)
------------------------------- -------------- -------------- ---------- --------------
Romulus capital return - (274) - -
------------------------------- -------------- -------------- ---------- --------------
Foreign exchange (gain)/loss (1,189) (117) 79 23
------------------------------- -------------- -------------- ---------- --------------
Adjusted earnings 1,871 185 5,151 2,689
------------------------------- -------------- -------------- ---------- --------------
Adjusted earnings per
ordinary share 3.0p 3.0p 7.4p 3.9p
------------------------------- -------------- -------------- ---------- --------------
Weighted average number
of ordinary shares ('000s) 63,066 6,244 69,323 69,323
The adjusted earnings are presented to provide what the Board
believes is a more appropriate assessment of the operational income
accruing to the Group's activities. Hence, the Group adjusts basic
earnings for income and costs which are not of a recurrent nature
or which may be more of a capital nature.
10. Net asset value per share
At 30 September At 31 March At 30 September
2017 2017 2016
GBP'000 GBP'000 GBP'000
--------------------------- ---------------- ------------ ----------------
Net asset value (GBP'000) 114,626 110,173 105,317
--------------------------- ---------------- ------------ ----------------
Net asset value per
ordinary and A share 167.3p 158.9p 151.9p
--------------------------- ---------------- ------------ ----------------
Number of ordinary
and A shares ('000s) 68,497 69,323 69,323
11. Investment property
30 September 31 March
2017 2017
GBP'000 GBP'000
------------------------------------- ------------- ---------
Fair value of investment
property at 1 April 112,442 91,971
------------------------------------- ------------- ---------
Additions - 3,185
------------------------------------- ------------- ---------
Subsequent capital expenditure
after acquisition 1,994 3,119
------------------------------------- ------------- ---------
Disposal - (1,752)
------------------------------------- ------------- ---------
Movement in rent incentives/initial
costs (53) 299
------------------------------------- ------------- ---------
Fair value adjustment in
the period/year 1,652 8,790
------------------------------------- ------------- ---------
Transfer of 70% equity interest
in H2O (note 2) (107,449) -
------------------------------------- ------------- ---------
Foreign exchange movements 5,922 6,830
------------------------------------- ------------- ---------
Fair value of investment
property at 30 September
/ 31 March 14,508 112,442
Investment property comprises the Group's investments in Unity
and Armouries (Birmingham) and Monk Bridge (Leeds), two investment
properties in the course of development located in the United
Kingdom and a data centre development at Borsigallee 1-7,
Frankfurt, Germany.
On 4 August 2017, the Group disposed of 70% of its equity
interest in the H2O shopping centre in Madrid, Spain, to CBRE
European Co-Investment Fund, managed by CBRE Global Investors. In
compliance with IFRS 11 (Joint Arrangements), the Group has adopted
the equity method of accounting for its joint venture commencing
with the half year report for the six months ended 30 September
2017 (see note 2).
The fair value of the Unity and Armouries property in Birmingham
(UK) of GBP3.8 million (31 March 2017: GBP3.5 million) has been
arrived at on the basis of an independent valuation carried out at
the balance sheet date by GVA.
The fair value of the Monk Bridge property in Leeds (UK) of
GBP8.3 million (31 March 2017: GBP5.5 million) has been arrived at
on the basis of an independent valuation carried out at the balance
sheet date by Savills.
GVA and Savills are independent valuers and are not connected to
the Group.
The valuation basis used is fair value as defined by the Royal
Institution of Chartered Surveyors Appraisal and Valuations
Standards ("RICS"). The approved RICS definition of fair value is
"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".
In October 2016, the Group entered into a binding agreement to
purchase, subject to securing planning consent, a data centre
development at Borsigallee 1-7, Frankfurt, Germany with a minimum
gross external area of 24,500 square metres and a specified minimum
electrical power supply with a dual feed for the proposed
development. Post period end, power supply and planning consent
have been secured hence the Group will proceed to purchase the
site. The payment of the outstanding site purchase price is GBP11.3
million (EUR12.85 million). The electricity supply cost commitments
will become payable in phases during the electricity upgrade period
of approximately three years. Associated costs relating to the
construction of an electricity receptor building on the site and
associated pre-identified ground preparation works will also be
undertaken. These commitments will bring the Company's total
investment into the data centre project to GBP24.7 million (EUR28
million). As at 30 September 2017, the Group has invested EUR2.7
million (GBP2.4 million) for the data centre and this has been
considered by the Directors to represent fair value at the balance
sheet date; the relevant market activity since the investment was
made is not considered to be significant in terms of value.
12. Investment receivable
30 September 31 March
2017 2017
GBP'000 GBP'000
---------------------------- ------------- ---------
As at 1 April 5,535 4,738
---------------------------- ------------- ---------
Effect of foreign exchange (391) 797
---------------------------- ------------- ---------
As at 30 September / 31
March 5,144 5,535
As at 30 September 2017, the Galaxia investment represents a
receivable of INR 450 million (GBP5.1 million).
In January 2015, the International Chamber of Commerce ('ICC')
Arbitration concluded its arbitration proceedings and declared in
favour of the Group's claims against Logix Group, which was found
to have breached the Terms of the Shareholders Agreement with the
Group. The ICC awarded the Group the return of its entire capital
invested of INR 450.0 Million, with interest at 18% p.a. from 31
January 2011 to 20 January 2015, and the refund of all costs
incurred towards the Arbitration. The total award amounted to
GBP9.2 million (the "Award") based on exchange rates at the time.
Additionally, a further 15% p.a. interest on all sums was awarded
to the Group from 20 January 2015 until the actual date of payment
by Logix of the Award. The sum has now accrued to GBP13.8 million
at the period end exchange rate. In April 2015, the Group was
notified that Logix has filed a petition, under Section 34 of the
Indian Arbitration and Conciliation Act 1996, before the Delhi High
Court challenging the Award. The challenge to the Award was heard
on several dates during the years 2015 and 2016: following these
hearings, the Delhi High Court has ordered that the site be placed
in a court monitored auction process, with proceeds to be used to
repay outstanding ground lease rents with the balance to be held
until the outcome of the appeal to the Arbitration claim. In
February 2017, the Delhi High Court upheld the award and dismissed
the Logix petition with costs. Following the last hearings held in
Delhi in April and May 2017, the division bench dismissed Logix's
appeal. Logix have since appealed the dismissal to the Supreme
Court of India. The Supreme Court admitted the appeal but have
ordered Logix to deposit INR 200 million (GBP2.3 million) with the
court. A hearing is scheduled for November 2017. ART has commenced
execution of the award and the Delhi High Court has issued a
warrant of attachment against the primary residential property
owned by Shakti Nath and Meena Nath, promoters of Logix Group. The
Company has had the residential property independently valued at
approximately GBP6.0 million. ART continues to actively pursue
Logix directors for the recovery of the Award.
The Directors, taking into consideration legal advice received
following Logix's challenge of the Award, consider it appropriate
to carry this investment in its accounts as a receivable of INR
450.0 million, which is the amount invested but excludes penalty
interest payment and other payments awarded in ART's favour due to
uncertainty over timing and final value of the Award.
13. Investments held at fair value
30 September 31 March
2017 2017
GBP'000 GBP'000
----------------------------- ------------- ---------
Non-current
----------------------------- ------------- ---------
As at 1 April 7,814 10,439
----------------------------- ------------- ---------
Additions during the period
/ year 1,237 -
----------------------------- ------------- ---------
Redemptions (3,021) (404)
----------------------------- ------------- ---------
Movement in fair value of
investments 639 131
----------------------------- ------------- ---------
Transfer to current (IMPT
investment) - (2,352)
----------------------------- ------------- ---------
As at 30 September / 31
March 6,669 7,814
The investments, which are disclosed as non-current investments
held at fair value, are as follows:
-- Europip (participating redeemable preference shares): during
the period, ART received GBP2.0 million as return of capital from
Europip; Europip provides quarterly valuations of the net asset
value of its shares; the net asset value of the investment as at 30
September 2017 was GBP0.4 million (31 March 2017: GBP2.5
million).
-- HLP (participating redeemable preference shares): HLP
provides half yearly valuations of the net asset value of its
shares; on 28 September 2017, HLP redeemed GBP1.0 million of
shares; the net asset value of the investment has been calculated
by using the redemption value as of that date, this being the
closest point to the Group's balance sheet date; the resulting
value of the investment was GBP0.4 million (31 March 2017: GBP1.4
million).
-- AURE (ordinary shares): during the period, ART invested a
further GBP1.2 million in AURE ordinary shares; the investment is
fair-valued by reference to the dealing price of the shares
provided monthly by AURE, which is published on The International
Stock Exchange: the resulting fair value of the investment at
period end was GBP5.9 million (31 March 2016: GBP3.9 million).
The Board considers that the above investments will be held for
the long term and have therefore disclosed them as non-current
assets.
Investments held at fair 30 September 31 March
value 2017 2017
GBP'000 GBP'000
------------------------------ ------------- ---------
Current
------------------------------ ------------- ---------
As at 1 April 26,113 20,931
------------------------------ ------------- ---------
Transfer to current (IMPT
investment) - 2,352
------------------------------ ------------- ---------
Additions during the period
/ year 20,000 1,072
------------------------------ ------------- ---------
Redemptions (5,269) (2,400)
------------------------------ ------------- ---------
Undistributed investment
income in period / year 1,166 1,721
------------------------------ ------------- ---------
Gain realised on investments 407 -
------------------------------ ------------- ---------
Movement in fair value of
investments 127 2,437
------------------------------ ------------- ---------
As at 30 September / 31
March 42,544 26,113
The investments, which are disclosed as current investments held
at fair value, are as follows:
-- FIAF (income units): FIAF allows monthly redemptions and
hence the investment is reported as a current asset; during the
period, ART has made a further investment of GBP5.0 million in FIAF
units. FIAF provides monthly pricing of its units. The market value
of the investment as at 30 September 2017, based on the published
price of the relevant units, was GBP27.4 million (31 March 2017:
GBP21.2 million).
-- ART also had an investment in Romulus. Any realised value
from this investment had to be passed exclusively to ART A
shareholders. As at 31 March 2017, the net asset value of ART's
investment in Romulus was nil, During the period, Romulus completed
the disposal of all of its real estate assets. The completion of
the sale resulted in Romulus having positive net assets and,
consequently, ART received a capital return of GBP0.3 million from
Romulus. ART has therefore paid a special dividend to holders of
ART A Shares of GBP0.3 million, less administrative costs.
-- ELM Trading (redeemable shares): during the period, ART
invested GBP15.0 in ELM Trading redeemable shares; ELM Trading
provides monthly valuations of the net asset value of its shares;
the net asset value of the investment as at 30 September 2017 was
GBP15.1 million. The intention of ART is to hold this investment
for a short term hence this has been disclosed within current
assets.
On 28 April 2017, IMPT made a full equity return to ART at a
share price of 330.0p per share: the total cash received by ART was
GBP5.3 million.
14. Investment in joint ventures
The movement in the Group's share of net assets of the joint
ventures can be summarised as follows:
30 September 31 March
2017 2017
GBP'000 GBP'000
--------------------------------- ------------- ---------
As at 1 April 1,538 1,596
--------------------------------- ------------- ---------
Transfer of 70% equity interest 15,979 -
in H2O (note 2)
--------------------------------- ------------- ---------
Group's share of joint venture
profits before fair value
movements and dividends 258 131
--------------------------------- ------------- ---------
Fair value adjustment for (5) -
interest rate swaption
--------------------------------- ------------- ---------
Fair value adjustment for
investment property 230 (19)
--------------------------------- ------------- ---------
Equity return - (130)
--------------------------------- ------------- ---------
Dividends paid by joint venture
to the Group - (40)
--------------------------------- ------------- ---------
Foreign exchange movements (363) -
--------------------------------- ------------- ---------
As at 30 September / 31 March 17,637 1,538
The Group's investments in joint ventures can be summarised as
follows:
-- H2O shopping centre in Madrid, Spain: on 4 August 2017, the
Group disposed of 70% of its equity interest in H2O to CBRE
European Co-Investment Fund, managed by CBRE Global Investors. The
30% investment retained by ART is made via its Dutch subsidiary,
KMS Holding NV, into CBRE H2O Rivas Holding NV, a company also
based in the Netherlands, which in turn owns 100% of the Spanish
entities that are owners of the H2O shopping centre.
-- Phase 1000 of Cambourne Business Park, Cambridge, UK: the
Group holds a 10% equity investment in the Scholar Property
Holdings Limited group, owner of the property. As at 30 September
2017, the value of ART's investment in Scholar Property Holdings
Limited was GBP1.6 million (31 March 2017: GBP1.5 million).
The fair value of the H2O property in Madrid (Spain) of EUR121.9
million (GBP107.5 million) (31 March 2017: EUR117.5 million,
GBP100.2 million) has been arrived at on the basis of an
independent valuation carried out at the balance sheet date by
Aguirre Newman Valoraciones y Tasaciones S.A. ("Aguirre"), an
independent valuer not connected to the Group. The 30 September
2017 valuation carried out by Aguirre includes a new plot of land,
adjacent to the H2O property, which was purchased in February 2017
for EUR1.4 million (GBP1.2 million): this investment was not
included in the H2O valuation as at 31 March 2017.
The valuation basis used is fair value as defined by the Royal
Institution of Chartered Surveyors Appraisal and Valuations
Standards ("RICS"). The approved RICS definition of fair value is
"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".
The fair value of Phase 1000 of Cambourne Business Park,
Cambridge (UK) is GBP26.3 million (31 March 2017: GBP26.3 million),
which has been considered by the Directors to represent fair value
at the balance sheet date; the relevant market activity since the
investment was made is not considered to be significant in terms of
value.
15. Trade and other receivables
30 September 31 March
2017 2017
GBP'000 GBP'000
--------------------------------- ------------- ---------
Non-current
--------------------------------- ------------- ---------
Loan granted to related parties - 3,300
--------------------------------- ------------- ---------
Loan granted to third parties 280 1,980
--------------------------------- ------------- ---------
Total 280 5,280
--------------------------------- ------------- ---------
Current
--------------------------------- ------------- ---------
Trade debtors 52 1,215
--------------------------------- ------------- ---------
VAT 601 796
--------------------------------- ------------- ---------
Loan granted to related party - 10,378
--------------------------------- ------------- ---------
Loan granted to third parties 3,226 -
--------------------------------- ------------- ---------
Other debtors 2,976 692
--------------------------------- ------------- ---------
Interest receivable from
loans granted to related
parties - 348
--------------------------------- ------------- ---------
Interest receivable from
loans granted to third parties 117 32
--------------------------------- ------------- ---------
Total 6,972 13,461
During the period, loans granted to related parties have been
fully repaid as follows:
-- Unsecured loan to IMPT (31 March 2017 balance: GBP10.4
million), due to expire in December 2018 and carrying a coupon of
15% per annum. On 7 April 2017, the loan was repaid in full,
including accrued and rolled up interest and applicable fees: the
total cash received by ART was GBP10.9 million.
-- Loan to AURE (31 March 2017 balance: GBP3.3 million), due to
expire in November 2018 and carrying a coupon of 9% per annum.
During the period, the loan has been repaid in full, including
accrued interest and applicable fees: the total cash received by
ART was GBP3.5 million.
As at 30 September 2017, the Group had granted a total of GBP3.5
million of mezzanine loans to third parties. These comprised four
loans to UK entities, which assisted with the purchase of property
developments in the UK. These facilities range from a 6 to 36 month
term and entitle the Group to an overall 14% return on the
investment.
Post period end, on 24 October 2017, one third party mezzanine
loan has been repaid in full, including accrued interest and
applicable fees: the total cash received by ART was GBP1.8
million.
All loans mentioned above are relatively short term in nature
and have been issued solely with the intention of collecting
principal and interest. They do not form part of the portfolio of
assets which management assesses on a fair value basis and, in
consequence, they have not been designated at fair value through
profit or loss or presented as part of the group's investment
portfolio in the consolidated balance sheet.
The Directors consider that the carrying amount of trade and
other receivables approximates to their fair value.
16. Trade and other payables
30 September 31 March
2017 2017
GBP'000 GBP'000
-------------------------- ------------- ---------
Trade creditors 475 2,929
-------------------------- ------------- ---------
Investment Manager's fee
payable - 3,228
-------------------------- ------------- ---------
Accruals 176 439
-------------------------- ------------- ---------
Other creditors 144 180
-------------------------- ------------- ---------
Corporation tax 19 13
-------------------------- ------------- ---------
Total 814 6,789
Trade and other payables primarily comprise amounts outstanding
for trade purchases and ongoing costs. The Group has financial risk
management policies in place to ensure that all payables are paid
within the credit time frame.
The Directors consider that the carrying amount of trade and
other payables approximates their fair value.
17. Bank borrowings
30 September 31 March
2017 2017
GBP'000 GBP'000
------------------------------- -------------- ---------
Current liabilities: interest
payable - 109
------------------------------- -------------- ---------
Current liabilities: bank
borrowings - 60,509
------------------------------- -------------- ---------
Total current liabilities - 60,618
------------------------------- -------------- ---------
Non-current liabilities: -
bank borrowings
------------------------------- -------------- ---------
Total liabilities - 60,618
------------------------------- -------------- ---------
The borrowings are repayable
as follows:
------------------------------- -------------- ---------
Interest payable - 109
------------------------------- -------------- ---------
On demand or within one year - 60,509
------------------------------- -------------- ---------
In the second to fifth years - -
inclusive
------------------------------- -------------- ---------
After five years - -
------------------------------- -------------- ---------
Total - 60,618
Movements in the Group's non-current bank borrowings are
analysed as follows:
30 September 31 March
2017 2017
GBP'000 GBP'000
------------------------------------- ------------- ---------
As at 1 April 60,509 55,512
------------------------------------- ------------- ---------
Borrowings, additions 55,622 -
------------------------------------- ------------- ---------
Deferred finance costs, additions (1,432) -
------------------------------------- ------------- ---------
Repayment of borrowings (60,810) (114)
------------------------------------- ------------- ---------
Reclassification to current
liabilities - 429
------------------------------------- ------------- ---------
Amortisation of deferred
finance costs 169 240
------------------------------------- ------------- ---------
Disposal of 70% equity interest (57,191) -
in H2O
------------------------------------- ------------- ---------
Exchange differences on translation
of foreign currencies 3,133 4,442
------------------------------------- ------------- ---------
As at 30 September / 31 March - 60,509
As at 31 March 2017, bank borrowings represented the syndicated
loan finance provided to ATS1, owner of the H2O shopping centre in
Madrid, Spain.
On 18 May 2017, ATS1 completed the refinance of its borrowings,
secured on the H2O property, with a new EUR65.0 million seven year
loan with Aareal Bank. This loan was used to partly repay the
previous bank loan (EUR71.1 million), which was due to be repaid in
October 2017. The Group funded the refinancing gap and fees. The
borrowings are non-recourse to the Group's other investments.
On 4 August 2017, the Group disposed of 70% of its equity
interest in the H2O property to CBRE European Co-Investment Fund,
managed by CBRE Global Investors. In compliance with IFRS 11 (Joint
Arrangements), the Group has adopted the equity method of
accounting for its joint venture commencing with the half year
report for the six months ended 30 September 2017 (see note 2).
18. Share capital
Number
of shares
-------------------- ---------- ----------- ----------- ---------- -----------
Authorised
-------------------- ---------- ----------- ----------- ---------- -----------
Ordinary shares Unlimited
of no par value
-------------------- ---------- ----------- ----------- ---------- -----------
Ordinary Ordinary Ordinary A shares Total
-------------------- ---------- ----------- ----------- ---------- -----------
Issued and fully treasury external total external shares
paid
-------------------- ---------- ----------- ----------- ---------- -----------
At 1 April 2016 6,794,398 62,986,175 69,780,573 6,337,042 76,117,615
-------------------- ---------- ----------- ----------- ---------- -----------
Share conversion - 878,019 878,019 (878,019) -
-------------------- ---------- ----------- ----------- ---------- -----------
Shares bought
back 826,311 (826,311) - - -
-------------------- ---------- ----------- ----------- ---------- -----------
Shares cancelled
following buyback (918,123) - (918,123) - (918,123)
-------------------- ---------- ----------- ----------- ---------- -----------
At 30 September
2017 6,702,586 63,037,883 69,740,469 5,459,023 75,199,492
The Company has one class of ordinary shares which carries no
right to fixed income and class A shares, which carry the same
rights as ordinary shares save that class A shares carry the
additional right of participation in the Company's investment in
Romulus and the right to convert into ordinary shares at a rate of
1 to 1.
The Company has the right to reissue or cancel the remaining
treasury shares at a later date.
Under its general authority, approved by shareholders on 1 April
2016, the Company announced a tender offer on 1 September 2017 for
up to 10,000,000 ordinary shares. In total, 826,311 ordinary shares
were validly tendered under the tender offer, representing
approximately 1.2 per cent of the Company's voting shares in issue
at the time.
On 28 September 2017, the Company bought back the 826,311
ordinary shares tendered under the tender offer at a price (before
expenses) of 123.1 pence per share. All of the 826,311 repurchased
ordinary shares were cancelled, together with 91,812 shares held in
treasury. As at 30 September 2017, the ordinary share capital of
the Company, following the purchase and cancellation of those
ordinary shares, was 69,740,469 (including 6,702,586 shares held in
treasury). The Company also had 5,459,023 A shares in issue. The
total voting rights in ART following the purchase and cancellation
of ordinary shares was 68,496,906.
Post period end, the Company has made no share buybacks and
65,306 A shares were converted into ordinary shares. At the date of
signing these financial statements the ordinary share capital of
the Company was 69,805,775 (including 6,702,586 shares held in
treasury). The Company also has 5,393,717 A shares in issue. The
total voting rights in ART are unchanged at 68,496,906.
19. Events after the balance sheet date
After the balance sheet date, a total of 65,306 A Shares were
converted into Ordinary Shares (Note 18).
On 24 October 2017, a mezzanine loan has been repaid in full,
including accrued interest and applicable fees: the total cash
received by ART was GBP1.8 million.
In October 2017, the Group granted three new mezzanine loans to
UK entities totalling GBP1.3 million and committed to a further
GBP3.6 million mezzanine loan.
20. Related party transactions
Parties are considered to be related if one party has the
ability to control the other party or exercise significant
influence over the other party in making financial or operational
decisions. ARC is the Investment Manager to the Company under the
terms of the Management Agreement and is thus considered a related
party of the Company.
The Investment Manager is entitled to receive a fee from the
Company at an annual rate of 2% of the net assets of the Group,
payable quarterly in arrears. The Investment Manager is also
entitled to receive an annual performance fee calculated with
reference to total shareholder return ("TSR"), whereby the fee is
20% of any excess over an annualised TSR of 15% subject to a
rolling three year high water mark.
Prior to the 70% disposal of the H2O property, ARC had a
management agreement directly with the H2O property company, Alpha
Tiger Spain 1, SLU ('ATS1') under which it earned a fee of 0.9% per
annum based upon the gross assets of ATS1. In order to avoid double
counting of fees, ARC provided a rebate to the Company of a
proportion of its fee equivalent to the value of the Group's net
asset value attributable to the H2O investment. Subsequent to the
sale of ATS1 to CBRE H2O Rivas Holding NV ('CBRE H2O'), ARC has
been appointed as Asset Manager to ATS1 and Investment Manager to
CBRE H2O. ARC has agreed to rebate to ART all of the fees charged
by ARC directly to CBRE H2O and ATS1 that relate to the Company's
30% share in CBRE H2O.
The Company had invested in IMPT (until 28 April 2017) where ARC
was the Investment Manager. Mark Rattigan, a partner of ARC, was a
Director (resigned on 3 May 2017) on the Board of IMPT. ARC rebated
fees earned in relation to the Company's investment in IMPT.
The Company has invested in FIAF where ARPIA, a subsidiary of
ARC, is the Investment Manager. ARC is the Authorised Corporate
Director of FIAF. ARC rebates fees earned in relation to the
Company's investment in FIAF.
The Company has invested in ELM Trading where the Board of
Directors is drawn from the partners and employees of ARPIA, a
subsidiary of ARC. ARC rebates fees earned in relation to the
Company's investment in ELM Trading.
The Company has invested in AURE, where ARC is the Investment
Manager. Brad Bauman, a partner of ARC, is a Director on the Board
of AURE. ARC rebates fees earned in relation to the Company's
investment in AURE.
The Company has invested in Europip, where ARPIA, a subsidiary
of ARC, is the Investment Adviser. ARC rebates fees earned in
relation to the Company's investment in Europip.
The Company has invested in Romulus, where ARPIA, a subsidiary
of ARC, is Trust Manager and Property Manager. ARC rebates fees
earned in relation to the Company's investment in Romulus.
The Company has invested in Phase 1000, Cambourne Business Park,
Cambridge, and ARC was appointed as Asset and Property Manager of
the joint venture entity. ARC rebates to ART the relevant
proportion of fees earned by ARC, which apply to the Company's
investment.
Details of the Investment Manager's fees for the current period
are disclosed on the face of the condensed consolidated statement
of comprehensive income and the balance payable at 30 September
2017 is provided in note 16.
The Directors of the Company received total fees as follows:
For the six For the six
months ended months ended
30 September 30 September
2017 2016
----------------- -------------- --------------
David Jeffreys 17,250 17,625
----------------- -------------- --------------
Phillip Rose 11,500 11,500
----------------- -------------- --------------
Serena Tremlett 17,250 17,750
----------------- -------------- --------------
Jeff Chowdhry 11,500 11,500
----------------- -------------- --------------
Roddy Sage 11,500 11,500
----------------- -------------- --------------
Total 69,000 69,875
The Directors' interests in the shares of the Company are
detailed below:
30 September 31 March
2017 2017
Number of Number of
ordinary ordinary
shares held shares held
----------------- ------------- -------------
David Jeffreys 10,000 10,000
----------------- ------------- -------------
Phillip Rose 139,695 139,695
----------------- ------------- -------------
Serena Tremlett 15,000 15,000
----------------- ------------- -------------
Jeff Chowdhry* 40,000 40,000
----------------- ------------- -------------
Roddy Sage - -
* Post period end, Jeff Chowdhry disposed of 10,000 shares in
the Company.
Alpha Global Property Securities Fund Pte. Ltd, a wholly owned
subsidiary of ARC registered in Singapore, held 22,550,000 shares
in the Company at 30 September 2017 (31 March 2017:
22,550,000).
ARC did not hold any shares in the Company at 30 September 2017
(31 March 2017: nil). The following, being partners of the
Investment Manager, hold direct interests in the following shares
of the Company:
30 September 31 March
2017 2017
Number of Number of
ordinary ordinary
shares held shares held
-------------- ------------- -------------
IPGL Limited 3,010,100 3,010,100
-------------- ------------- -------------
Brian Frith 1,125,000 1,125,000
-------------- ------------- -------------
Phillip Rose 139,695 139,695
-------------- ------------- -------------
Brad Bauman 55,006 55,006
Karl Devon-Lowe, a partner of ARC, received fees of GBP2,000 (31
March 2017: GBP7,000) in relation to directorial responsibilities
on a number of the Company's subsidiary companies.
Serena Tremlett is also the Managing Director of Estera
Administration (Guernsey) Limited ('Estera'), the Company's
administrator and secretary. During the period the Company paid
Estera fees of GBP47,100 (31 March 2017: GBP95,300) and no amount
was outstanding at period end.
21. Financial assets and liabilities held at fair value through
profit or loss
30 September 31 March
2017 2017
GBP'000 GBP'000
-------------------------- ------------- ---------
Non-current assets
-------------------------- ------------- ---------
Investments held at fair
value 6,669 7,814
-------------------------- ------------- ---------
Total non-current assets 6,669 7,814
-------------------------- ------------- ---------
Current assets
-------------------------- ------------- ---------
Investments held at fair
value 42,544 26,113
-------------------------- ------------- ---------
Interest rate cap - -
-------------------------- ------------- ---------
Total current assets 42,544 26,113
-------------------------- ------------- ---------
Total 49,213 33,927
The interest rate cap has been disposed of as part of the 70%
disposal of ART's equity interest in H2O (note 2); at the time of
disposal the value of the interest rate cap was nil.
Fair value measurement
The Group discloses fair value measurements by level of the
following fair value measurement hierarchy:
-- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
-- Inputs other than quoted prices included within level 1 that
are observable for the asset or liability, either directly (that
is, as prices) or indirectly (that is, derived from prices) (level
2)
-- Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (level
3).
The level in the fair value hierarchy within which the financial
asset or financial liability is categorised is determined on the
basis of the lowest input that is significant to the fair value
measurement. Financial instruments are classified in their entirety
into one of the three levels.
The following methods and assumptions are used to estimate fair
values:
Level 1
-- The fair value of the investment in IMPT's ordinary shares,
which were traded on the LSE until 8 June 2017, was based upon the
mid price of the ordinary shares at the balance sheet date. On 28
April 2017, IMPT made a full equity return to ART at a share price
of 330.0p per share; the Group does not currently hold any
investment which can be categorised as Level 1.
Level 2
-- The fair value of the derivative interest rate cap and
interest rate swaption contracts is determined by reference to an
applicable valuation model employed by the contractual counter
parties; valuations are provided quarterly.
-- The fair value of the foreign exchange forward contract is
determined by reference to the quarter end applicable forward
market rate provided by the contractual counter party.
-- The fair value of the investment in AURE is based upon the
dealing price of the shares provided by AURE at the balance sheet
date, which is published on The International Stock Exchange.
-- The fair value of the FIAF investment is based upon the price
provided by the issuer for the relevant share class owned: this is
calculated by reference to the net asset value of the investment
and based on observable inputs; this investment is therefore deemed
to be a level 2 financial asset.
Level 3
-- The fair value of the HLP investment is based upon the price
provided by the issuer for the relevant share class owned: this is
calculated by reference to the net asset value of the investment
and principally driven by the fair value of HLP's underlying
property investments. This net asset value is therefore mainly
based on unobservable inputs and is deemed to be level 3 financial
assets. HLP's accounts are audited annually. HLP's underlying
investment properties are fair valued as per RICS definition and
the ART Board considers that any reasonable possible movement in
the valuation of HLP's individual properties would not be material
to the value of ART's investment.
-- The fair value of the Europip investment is based upon the
price provided by the issuer for the relevant share class owned:
this is calculated by reference to the net asset value of the
investment and principally driven by the fair value of Europip's
underlying property investments. This net asset value is therefore
mainly based on unobservable inputs and is deemed to be level 3
financial assets. Europip's accounts are audited annually. As at 30
September 2017, Europip have sold its remaining property and have
partly distributed the related proceeds to shareholders; Europip is
currently preparing to distribute the final proceeds to
shareholders.
-- The fair value of the ELM Trading ('ELM') investment is based
upon the price provided by the issuer for the relevant share class
owned: this is calculated by reference to the net asset value of
the investment and principally driven by the fair value of ELM's
underlying investments. This net asset value is therefore mainly
based on unobservable inputs and is deemed to be level 3 financial
assets. ELM's accounts are audited annually. ELM's underlying
investments are fair valued and the ART Board considers that any
reasonable possible movement in the valuation of ELM's individual
investments would not be material to the value of ART's
investment.
Financial assets and liabilities held at fair value are valued
on a recurring basis as indicated above. There have been no changes
to the valuation methods applied from the Group's annual report and
accounts for the year ended 31 March 2017.
The Board determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorisation (based on
the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.
The following table shows an analysis of the fair values of
financial instruments recognised in the balance sheet by level of
the fair value hierarchy described above:
As at 30 September Level Level Level Total
2017 1 2 3
---------------------
GBP'000 GBP'000 GBP'000 GBP'000
--------------------- --------- -------- -------- --------
Investments held at
fair value - 33,261 15,952 49,213
--------------------- --------- -------- -------- --------
Total - 33,261 15,952 49,213
--------------------- --------- -------- -------- --------
As at 31 March 2017 Level Level Level Total
1 2 3
---------------------
GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- -------- -------- --------
Investments held at
fair value 4,861 25,193 3,873 33,927
--------------------- -------- -------- -------- --------
Total 4,861 25,193 3,873 33,927
--------------------- -------- -------- -------- --------
There were no transfers between level 1 and level 2 fair value
measurements and no transfers into or out of level 3 fair value
measurements during the six month period ended 30 September
2017.
Directors and Company information
Directors Independent valuers Legal advisors
David Jeffreys in the UK in Guernsey
(Chairman) GVA Carey Olsen
Jeff Chowdhry 3 Brindley place PO Box 98, Carey
Roddy Sage Birmingham B1 2JB House
Phillip Rose Savills Les Banques
Serena Tremlett Ground Floor, City St Peter Port
Registered office Point Guernsey GY1 4BZ
Old Bank Chambers 12 King Street
La Grande Rue Leeds LS1 2HL Legal advisors
St Martin's in the UK
Guernsey GY4 6RT Independent valuers Norton Rose
Investment Manager in India 3 More London Riverside
Alpha Real Capital Colliers International London SE1 2AQ
LLP (Hong Kong) Limited
Level 6, 338 Euston Suite 5701 Central Legal advisors
Road Plaza in India
London NW1 3BG 18 Harbour Road AZB & Partners
Administrator and Wanchai, Hong Kong Plot A-8 Sector
secretary 4
Estera Administration Independent valuers NOIDA 201 301
(Guernsey) Limited in Spain India
(formerly Morgan Aguirre Newman Legal advisors
Sharpe Administration Valoraciones y in Spain
Limited) Tasaciones S.A. Ashurst LLP
Old Bank Chambers Calle de General Alcalá, 44
La Grande Rue Lacy, 23 Madrid, 28014
St Martin's Madrid, 28045 Spain
Guernsey GY4 6RT Spain
Independent Auditor Registrar
BDO Limited Computershare Investor
Broker Place du Pré, Services (Jersey)
Panmure Gordon Rue du Pré Limited
(UK) Limited St Peter Port Queensway House
One New Change Guernsey GY1 3LL Hilgrove Street
London EC4M 9AF Tax advisors in St Helier
Europe Jersey JE1 1ES
KPMG LLP
15 Canada Square
London E14 5GL
Shareholder information
Further information on the Company can be found at the Company's
website:
www.alpharealtrustlimited.com
Dividends
Ordinary dividends are declared and paid quarterly. Shareholders
who wish to have dividends paid directly into a bank account rather
than by cheque to their registered address can complete a mandate
form for this purpose. Mandates may be obtained from the Company's
Registrar. Where dividends are paid directly to shareholders' bank
accounts, dividend vouchers are sent directly to shareholders'
registered addresses.
Share price
The Company's Ordinary Shares are listed on the SFS of the
LSE.
Change of address
Communications with shareholders are mailed to the addresses
held on the share register. In the event of a change of address or
other amendment, please notify the Company's Registrar under the
signature of the registered holder.
Investment Manager
The Company is advised by Alpha Real Capital LLP, which is
authorised and regulated by the Financial Conduct Authority in the
United Kingdom
Financial calendar
Financial Reporting/Meeting Dividend period Ex-dividend date Record date Payment date
reporting dates
------------------- -------------------- ------------------- ----------------- ---------------- -----------------
Half year report 17 November 2017 Quarter ended 30 November 2017 1 December 2017 15 December 2017
and dividend 30 September 2017
announcement
------------------- -------------------- ------------------- ----------------- ---------------- -----------------
Trading update 9 March 2018 Quarter ending 22 March 2018 23 March 2018 6 April 2018
(Qtr 3) 31 December 2017
------------------- -------------------- ------------------- ----------------- ---------------- -----------------
Annual report and 15 June 2018 Quarter ending 28 June 2018 29 June 2018 20 July 2018
dividend 31 March 2018
announcement
------------------- -------------------- ------------------- ----------------- ---------------- -----------------
Annual report 29 June 2018
published
------------------- -------------------- ------------------- ----------------- ---------------- -----------------
Annual General 10 Aug 2018
Meeting
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFVTLDLRLID
(END) Dow Jones Newswires
November 17, 2017 02:00 ET (07:00 GMT)
Alpha Real (LSE:ARTL)
Historical Stock Chart
From Apr 2024 to May 2024
Alpha Real (LSE:ARTL)
Historical Stock Chart
From May 2023 to May 2024