To:
RNS
Date:
24 August 2016
From:
F&C Commercial Property Trust Limited
Half Yearly Financial Report for the
Period ended 30 June 2016
Highlights
- Continued improvement in dividend cover increasing to 88.7%
from 80.6% as at 2015 year end.
- 1.4% Net asset value total return
- 5.3% dividend yield on period end share price
Chairman’s Statement
Performance for the period
The Company’s net asset value (‘NAV’) total return for the six
month period ended 30 June 2016 was
1.4 per cent and the ungeared total return from the property
portfolio was 2.0 per cent. This compares with a total return of
2.6 per cent from the Investment Property Databank (‘IPD’) All
Quarterly and Monthly Valued Funds.
The changes to Stamp Duty announced in March 2016 reduced the value of the portfolio by
0.8 per cent and the period saw income becoming the main driver of
total return. Although overseas buyers remained active,
institutions became net sellers as the period progressed. The yield
compression that had previously driven the market became less
pronounced and restricted to a smaller part of the market.
The share price total return for the period was -13.3 per cent.
The share price had been trading at a premium to NAV for more than
two years until the final quarter of 2015 when it fell to a
discount of 0.6 per cent by the end of December. As at 30 June 2016, the share price was 113.8p, a
discount of 17.8 per cent on the June NAV, but it subsequently
recovered, closing the discount to 8.1% by 22 August 2016.
The initial share price fall was primarily due to lower
expectations for capital growth in UK commercial property values.
Subsequent weakness followed the announcement of the referendum in
February and Stamp Duty changes in March, with sharp falls across
the sector in the immediate aftermath of the Brexit vote in the
last week of June. This was followed by recovery in July and August
when a number of open-ended funds re-opened for business after
temporary closure and several property market transactions took
place on lower discounts to pre-Brexit prices than expected.
With the referendum vote occurring so near to the quarter end,
valuers struggled to determine the impact of the outcome on both
the property investment and lettings markets. Our valuer has
explicitly stated that the uncertainty following the UK’s decision
to exit the EU has reduced the probability of valuations coinciding
with prices received were the properties to be sold.
The period saw a moderating level of investment activity in the
property market. While the market continued to deliver a positive
total return, Central London
retail and the industrials sectors out-performed alongside South
East and West End offices. The retail market outside London continued to under-perform.
The Company’s underperformance of the IPD benchmark came
primarily from the office sector of the portfolio where there were
significant voids at Thames Valley Park One, Reading and Watchmoor
Park, Camberley. There was also a mark down in the valuation of the
Aberdeen properties. On the upside, all the other sectors in the
portfolio produced positive total returns and were ahead of the
benchmark.
There were no purchases or sales during the period and the focus
has continued to be on driving income and value-creating asset
management within the existing portfolio. Further detail on the
various property and asset management activities undertaken during
the period and a breakdown of the performance are shown in the
Managers’ Review.
The Directors have also considered it appropriate to prepare the
financial statements on the going concern basis, as explained in
note 1 to the condensed financial statements.
The following table provides an analysis of the movement in the
NAV per share for the period:
|
Pence |
NAV per share as at 31 December
2015 |
135.2 |
Unrealised decrease in valuation of
direct property portfolio |
(0.6) |
Movement in interest rate swap
valuation |
(0.2) |
Other revenue |
2.7 |
Dividends paid |
(3.0) |
|
--------- |
NAV per share as at 30 June
2016 |
134.1 |
|
--------- |
Dividends
Monthly dividends of 0.5p per share were paid during the period,
maintaining the annual dividend rate of 6.0p per share. The
annualised dividend yield at the end of the period was 5.3 per cent
on a closing share price of 113.8p per share.
Barring unforeseen circumstances, it is the Board’s intention
that the dividend will continue to be paid monthly at the same
rate. Dividend cover for the period (excluding capital gains on
properties and the loss on redemption of the interest rate swap)
was 88.7 per cent, an improvement on the cover achieved for the
last financial year which was 80.6 per cent.
Borrowings
As announced in June 2016, the Group
agreed amended financing arrangements with Barclays Bank PLC in
respect of the existing £50 million term loan facility repayable in
June 2017. This included extending
the repayment date to June 2021. The
Board also agreed an additional revolving credit facility of £50
million over the same period for ongoing working capital purposes
and to provide the Group with the flexibility to acquire further
property should the opportunity arise.
Following this refinancing, the Group’s available borrowings
comprise a £260 million term loan with Legal & General Pensions
Limited, maturing on 31 December
2024, and both a £50 million term loan facility and an
undrawn £50 million revolving credit facility with Barclays. The
Group’s drawn down borrowings currently total £310 million. The
Group’s total loan to value, net of cash, was 19.9 per cent at the
end of the period.
The Group terminated, at a cost of £1.3 million, the interest
rate hedging arrangements linked to the previous Barclays facility.
This had been accounted for as a liability, net of accrued
interest, of £1.5 million as at 31 December
2015. The Group has entered into a new £50 million interest
rate swap to cover the extended Barclays term facility. This has a
fixed interest payable at 2.5 per cent. per annum, a substantial
reduction on the previous 4.9 per cent per annum. The weighted
average interest rate on the Group’s total current borrowings is
3.3 per cent which is 0.3 per cent lower than before the
refinancing.
Board Composition
Brian Sweetland, who has been a
Director of the Company from the beginning in 2005, retired from
the Board at the Annual General Meeting on 2
June 2016. I recorded in the annual report, published in
April this year, our appreciation for the time, experience and
effort he has given to the Company over the years.
The Board continues the programme of refreshment of the Board
which was outlined in the 2014 annual report. As a consequence of
this, Peter Niven, who has served
the Company since inception, both as a Director and Chairman, will
retire at the 2017 AGM. The board has engaged a recruitment agent
to begin the process of seeking a replacement.
Outlook
Following the EU referendum vote at the end of June there are
unresolved political and economic issues which will continue to
contribute to a climate of uncertainty in the property market.
While the next few months should begin to see greater clarity on
economic policy and Brexit strategy, a prolonged period of
negotiation is likely before the final outcome is known.
This uncertain state of affairs will have some effect on both
occupier and investor demand over both the short and medium-term,
especially concerning City offices, secondary stock and development
activity all of which the Company has a limited exposure to. Prime
property in core locations may prove more resilient. Investors
seeking an income stream should be attracted to an asset class with
long-term contractual income yielding at least 4 per cent per
annum, particularly if low interest rates limit profitable
investment opportunities in other asset classes.
Brexit is important but is only one element in the outlook for
property. There are wider global economic and political factors
which will come into play and the UK remains a large, mature and
relatively transparent market for UK and overseas investors.
Following the fall in both sterling and gilt yields, and given the
prospect of a prolonged period of low interest rates, well located
and let property remains attractively priced against the current
risk free rate of interest.
Chris Russell
Chairman
Performance Summary
|
Half year
ended 30 June
2016 |
|
|
Total Returns for the period
# |
|
|
|
Net asset value per share* |
1.4% |
|
|
Ordinary Share price |
(13.3)% |
|
|
Investment Property Databank (‘IPD’)
Portfolio ungeared return |
2.0% |
|
|
Investment Property Databank (‘IPD’)
All Quarterly and Monthly Valued Funds Benchmark |
2.6% |
|
|
FTSE All-Share Index |
4.3% |
|
|
|
|
|
|
|
Half year
ended 30 June
2016 |
Year ended 31
December
2015 |
% change |
Capital Values |
|
|
|
Total assets less current
liabilities (£’000)* |
1,380,825 |
1,389,389 |
(0.6) |
Net asset value per share* |
134.1p |
135.2p |
(0.8) |
Ordinary Share price |
113.8p |
134.4p |
(15.3) |
FTSE All-Share Index |
3,515.45 |
3,444.26 |
2.1 |
(Discount)/Premium to net asset
value per share |
(17.8)% |
(0.6)% |
|
Net Gearing ** |
19.9% |
19.0% |
|
|
|
|
|
|
Half year
ended 30 June
2016 |
Half year
ended 30 June
2015 |
|
Earnings and Dividends |
|
|
|
Earnings per Ordinary Share |
2.0p |
9.9p |
|
Dividends per Ordinary Share |
3.0p |
3.0p |
|
Dividend yield *** |
5.3% |
4.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
# Includes dividends
re-invested. |
|
|
|
* Based on net assets
calculated under International Financial Reporting Standards. Net
asset value total return is calculated assuming dividends are
re-invested. |
** Net Gearing:
(Borrowing – cash) / total assets (less current liabilities and
cash) |
*** Calculated on
annualised dividends of 6.0p per share. An analysis of dividend
payments is contained in note 2 to the accounts. |
Sources: F&C Investment Business, MSCI Investment Property
Databank (‘IPD’) and Datastream. |
Managers’ Review
Property Market Review
The market total return for the six months to 30 June 2016, as measured by the Investment
Property Databank (‘IPD’) All Quarterly and Monthly Valued Funds
(‘the benchmark’) was 2.6 per cent.
The early part of the review period was characterised by extreme
volatility in the global financial markets reflecting concerns
about growth prospects internationally. In February 2016, it was declared that the
referendum regarding EU membership would be held on 23 June 2016 and this added a further element of
uncertainty for investors. In the March Budget, the Chancellor
announced changes to stamp duty on commercial property, which
adversely affected capital values.
The economy continued to deliver positive growth but there were
indications that the pace was slowing. The Bank of England kept interest rates and monetary
policy unchanged during this period but there was a growing feeling
that rates would stay “lower for longer”. Gilt yields moved lower
during the half-year to touch 1 per cent by 30 June 2016.
The EU referendum vote took place on 23
June 2016. The decision in favour of leaving the EU was
unexpected. There was a sharp fall in sterling and in gilt yields
in the final week of the reporting period. The equity market (FTSE
100) also registered a steep drop in the immediate aftermath of the
vote although this had reversed by 30 June. This volatility also
affected the market for listed real estate securities.
Benchmark capital values rose by 0.3 per cent in the six month
period. However, the timing of the Brexit vote so close to the
quarterly valuation date, the unexpected outcome and the lack of
timely market evidence as guidance for valuers all need to be borne
in mind when assessing this return. Performance was supported by
the income return, which was 2.3 per cent for the half- year, in
line with the market level.
The period saw the level of investment activity moderate.
Investment in January-June 2016
totalled £25.6 billion compared with £38.8 billion in the
equivalent period of 2015. Overseas investors were the main drivers
of the market. UK institutions were net sellers of property
predominantly in the latter part of the review period. Retail
investors were also making net withdrawals from property funds
ahead of the Brexit vote. Most segments recorded reduced levels of
investment activity with regional offices and retail warehousing
the most resilient but non-traditional assets moving out of
favour.
The banks continued to work through their problem loans and
appeared willing to consider new lending on well-secured standing
investments. However, margins were increasing in the latter part of
the period. Although property remained attractively priced against
the risk free rate, this was in part due to the fall in gilt yields
and investors were becoming increasingly concerned about pricing
especially in London. IPD data
shows initial yields holding steady at 4.8 per cent during the
review period following a prolonged period of compression. At the
segment level, yield shift was modest, moving in a 0-10 basis point
range. Yields levels varied from 3.3 per cent for offices in the
West End to 6.0 per cent for regional industrials.
IPD data for standing investments shows rental growth of 1.2 per
cent over the review period. This represents a deceleration from
the pace seen in the like period of 2015. Central London offices remains a major driver
behind rental growth, although at a slower pace than last year.
There are still segments of the market such as standard regional
retail and supermarkets where rental growth has been negative. Net
income grew by 1.0 per cent, representing a slight improvement on
the same period in 2015.
At the segment level, industrials delivered a relatively strong
benchmark performance, with an aggregate total return of 3.6 per
cent. Central London retail
continued to perform strongly. Offices in the West End and the
South East also out-performed. The retail market outside
London remains subdued, especially
in town centres.
The market lost momentum in the January-June 2016 period. The approach of the EU
referendum was a factor but other elements were also affecting
sentiment and performance. Total returns are now being driven by
the income component. However, in an era of low interest rates and
market uncertainty, the ability to obtain a higher income return
secured on assets often let on long leases may act to support
property.
Property Portfolio
The Company invests in a diversified UK commercial real estate
portfolio of 36 properties.
The property portfolio was externally valued at £1,355.75
million as at 30 June 2016.
The total return from the portfolio over the period was 2.0 per
cent (75th percentile) underperforming the 2.6 per cent return
recorded by the benchmark. The portfolio continues to deliver
strong performance over three, five and ten years.
Following the referendum result, the valuer CBRE has explicitly
stated that we are now in a period of uncertainty in relation to
many factors that impact the property investment and letting
markets. Since the referendum date it has not been possible to
gauge the effect of this decision by reference to transactions in
the market place and the probability of the valuations exactly
coinciding with prices received were the properties to be sold has
reduced.
Headline Returns by Sector
(Six months to 30 June 2016)
|
Total
Return |
|
Portfolio
(%) |
Benchmark
(%) |
All Retails |
2.5 |
1.7 |
All Offices |
-0.6 |
3.1 |
All Industrials |
7.1 |
3.6 |
Other Commercial |
6.0 |
3.2 |
All Sectors |
2.0 |
2.6 |
Headline Returns by Segment
(Six months to 30 June 2016)
|
Total
Return |
|
Portfolio
(%) |
Benchmark
(%) |
St Retails - South East* |
2.9 |
3.1 |
St Retails - Rest of UK# |
-3.2 |
1.2 |
Retail Warehouses |
2.8 |
1.7 |
Offices - City |
4.6 |
2.8 |
Offices - West End |
-1.1 |
3.6 |
Offices - South East |
-1.0 |
3.0 |
Offices - Rest of UK |
-0.1 |
2.4 |
Industrials - South East |
14.6 |
3.7 |
Industrials - Rest of UK |
5.0 |
3.5 |
Other Commercial |
6.0 |
3.2 |
All Sectors |
2.0 |
2.6 |
* Includes West End Retail
# Asda Supermarket, Rochdale
Source: MSCI Investment Property Databank
Retail
The overall total return from the Company’s retail properties
during the period was 2.5 per cent compared with the benchmark
return of 1.7 per cent.
St. Christopher’s Place Estate, London W1 continues to perform strongly, with
a 1.6 per cent increase in its capital value over the period. This
was driven mainly by increasing rental values across the
Estate.
The redevelopment of 71-77 Wigmore Street commenced in
January 2015 and construction works
are progressing on programme and budget. The marketing of the
retail and restaurant units is prompting a good level of interest
and it is hoped the retail unit will shortly go under offer.
Elsewhere on the Estate there are a number of asset management
initiatives which are being progressed to enhance the tenant mix
and the attractiveness of the food and beverage offer.
At 16 Conduit Street the surrender of the lease held by
Christian Dior and the re-letting of the unit to luxury retailer
MCM completed in the period. This resulted in a new rent of
£470,000 per annum which is an increase of £161,500 per annum over
the previous rent passing.
Offices
The Company’s office portfolio produced a total return of -0.6 per
cent compared with the benchmark return of
3.1 per cent.
The Company’s office properties located in the West End and South
East underperformed the benchmark, the performance of the latter
being held back by voids at Thames Valley Park One, Reading and
Watchmoor Park, Camberley. With regard to the West End offices, the
valuers have adopted longer leasing voids and rent free periods in
those properties which are subject to shorter leases. The Rest of
the UK Offices were affected by the valuation of the Aberdeen
properties which fell by c. 3.7 per cent due to capitalisation
rates moving out by approximately 30 bps.
Given the post Brexit concerns and sentiment towards Central
London Offices and the City of
London in particular, it is important to note that Company’s
exposure to the City of London is
only one property. 7 Birchin Lane, London EC2 is valued at less than £20 million
and is less than 1.4 per cent of the value of the entire portfolio.
The Company’s West End Office exposure, excluding St. Christopher’s
Place which has an office element, equates to four properties (13.8
per cent) of the portfolio, the largest asset is Cassini House, St James’s Street. This is a
prime asset, albeit let on shorter leases, but with significant
asset management upside.
7 Birchin Lane has recently been subject to a refurbishment of a
number of the floors and an upgrading of the common areas. New
lettings of the seventh and eighth floors have completed at £70 and
£75 per square foot respectively, a significant uplift from the
previous rent passing of £35 per square foot. The first, second and
third floors are available to let; these are small floors of under
3,000 square feet each. Current occupational demand seems to be
resilient for this type of space. In the West End the fourth floor
of 25 Great Pulteney Street has let at a new headline rent in the
building at £96.50 per square foot.
During the period Fujitsu, the tenant of Thames Valley Park One,
Reading, served notice not to renew the lease of the property in
September 2016. An early exit was
negotiated in settlement for all rent due and a dilapidations
payment. This building comprises 74,000 square feet and
refurbishment proposals for the scheme are being worked up. This
lease event is attributable to the overall void level in the Group
increasing over the period.
Elsewhere in the portfolio we have let the second floor of
Building A, Watchmoor Park, Camberley, and the 10th floor at 82
King Street, Manchester, both of
which have been long standing voids.
Industrial and Logistics
The Company’s industrial and logistics portfolio delivered a total
return of 7.1 per cent compared with a benchmark return of 3.6 per
cent.
The Company’s South East properties performed strongly over the
period with the most notable contribution coming from the Cowdray
Centre, Colchester, where last
year an outline planning application was submitted to develop the
site for 154 residential units. During the period the outline
planning application was determined by the local planning
authority, which approved a resolution to grant consent, subject to
completing a Section 106 Agreement. The Section 106 Agreement has
subsequently been agreed and is close to completing. Securing the
consent will enable marketing of the site to volume
housebuilders.
Good progress has been made in securing longer leases on the
logistics portfolio. At Unit 8, Hams Hall, Birmingham, the removal of a tenant’s only
break in 2020 has been negotiated, securing the income until 2025.
At Unit 10a a lease renewal has been agreed from 20 June 2016 for a 15 year term with a break
option at year 10 and at a rent of £1,354,000 per annum. This
reflects an uplift of £223,000 per annum over the previous rent
passing; a four and a half month rent free period was granted. A
number of other material deals are in negotiation with tenants.
The Alternative Property Sector
The student accommodation block, let in its entirety to the
University of Winchester on a long lease, remains the Company’s
only exposure to this sector.
Purchases and Disposals
There were no sales or acquisitions over the period.
Property Management
The management of income remains a key activity. The void rate
increased over the period from 4.5 per cent to 7.0 per cent because
of the availability of three floors at Birchin Lane and Thames
Valley Park office property as described above.
The provision for overdue debt (90 days) is 0.4 per cent of
gross annualised rents, the majority of which is represented by
service charges queried by tenants.
Geographical Analysis
(as at 30 June 2016, % of total
property portfolio)
South East |
26.2 |
London – West End |
35.7 |
Eastern |
1.9 |
Midlands |
11.7 |
Scotland |
12.6 |
North West |
10.5 |
Rest of London |
1.4 |
Sector Analysis
(as at 30 June 2016, % of total
property portfolio)
Offices |
38.9 |
Retail |
26.9 |
Retail Warehouses |
16.8 |
Industrial |
14.8 |
Other |
2.6 |
Outlook
The outlook for property will be strongly influenced by the Brexit
negotiations and we are now in a very uncertain phase as the
implications of the vote are evaluated. We would expect investors
to remain cautious and risk averse and for this to favour prime
property in established locations.
Low interest rates may further support the prime end of the
market while a lower sterling rate could potentially attract
overseas buyers. The economic outlook is for lower but positive
growth over the medium-term and for some increase in inflation.
Monetary policy was eased in August
2016 and the Autumn Statement may provide greater clarity of
the fiscal side.
Whilst not affecting the Company’s portfolio directly, which is
positioned quite strongly, there are concerns about the prospects
for secondary stock and for development in a lower growth
environment. The City and Docklands markets may see some fall from
favour until finance firms’ location plans are determined. We
expect to see a more subdued performance from property and some
uncertainty in the occupational markets but also opportunity as the
initial shock dissipates and the path forward for the UK economy
becomes clearer.
Richard Kirby
Fund Manager
BMO REP Asset Management plc
F&C Commercial
Property Trust Limited
Condensed
Consolidated Statement of Comprehensive Income (unaudited)
for the six months to 30 June
2016
Notes |
Six months |
Six months |
Year to |
|
|
to 30 June |
to 30 June |
31
December |
|
|
2016 |
2015 |
2015* |
|
|
£‘000 |
£‘000 |
£‘000 |
Revenue |
|
|
|
|
Rental income |
|
32,242 |
30,770 |
62,613 |
(Losses) / gains on investments
properties |
|
|
|
|
Unrealised (losses)/gains on
revaluation of investment properties |
5 |
(4,324) |
57,446 |
110,314 |
Gains on sale of investment
properties realised |
5 |
- |
2,577 |
2,530 |
Total
income |
|
27,918 |
90,793 |
175,457 |
|
|
|
|
|
Expenditure |
|
|
|
|
Investment management fee |
|
(2,594) |
(3,967) |
(8,100) |
Other expenses |
3 |
(2,499) |
(2,352) |
(4,204) |
Total expenditure |
|
(5,093) |
(6,319) |
(12,304) |
|
|
|
|
|
Operating profit before finance
costs and taxation |
|
22,825 |
84,474 |
163,153 |
|
|
|
|
|
Net finance costs |
|
|
|
|
Interest receivable |
|
63 |
108 |
194 |
Finance costs |
|
(5,801) |
(5,755) |
(11,708) |
Loss on redemption of interest rate
swap |
6 |
(1,283) |
- |
- |
|
|
(7,021) |
(5,647) |
(11,514) |
|
|
|
|
|
Profit before
taxation |
|
15,804 |
78,827 |
151,639 |
Taxation |
|
(129) |
(83) |
(142) |
Profit for the period |
|
15,675 |
78,744 |
151,497 |
|
|
|
|
|
Other comprehensive
income |
|
|
|
|
Items that are or may be
reclassified subsequently to profit or loss |
|
|
|
|
Net change in fair value of swaps
reclassified to profit and loss |
|
1,546 |
- |
- |
Movement in fair value of effective
interest rate swaps |
|
(1,374) |
543 |
909 |
Total comprehensive
income for the period |
|
15,847 |
79,287 |
152,406 |
|
|
|
|
|
Basic and diluted earnings per
share |
4 |
2.0p |
9.9p |
19.0p |
All of the profit and total comprehensive income for the period
is attributable to the owners of the Group.
All items in the above statement derive from continuing
operations.
* These figures are audited.
F&C Commercial
Property Trust Limited
Condensed
Consolidated Balance Sheet (unaudited)
as at 30 June 2016
|
Notes |
30 June
2016
£’000 |
30 June
2015
£’000 |
31 Dec
2015*
£’000 |
Non-current assets |
|
|
|
|
Investment properties |
5 |
1,339,691 |
1,241,844 |
1,340,061 |
|
|
1,339,691 |
1,241,844 |
1,340,061 |
|
|
|
|
|
Current assets |
|
|
|
|
Trade and other receivables |
|
20,506 |
19,637 |
19,575 |
Cash and cash equivalents |
|
43,506 |
99,208 |
55,755 |
|
|
64,012 |
118,845 |
75,330 |
|
|
|
|
|
Total assets |
|
1,403,703 |
1,360,689 |
1,415,391 |
|
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
|
(22,878) |
(20,209) |
(26,002) |
|
|
|
|
|
Non-current liabilities |
|
|
|
|
Interest-bearing loans |
6 |
(307,161) |
(307,282) |
(307,419) |
Interest rate swaps |
6 |
(1,374) |
(1,912) |
(1,546) |
|
|
(308,535) |
(309,194) |
(308,965) |
|
|
|
|
|
Total liabilities |
|
(331,413) |
(329,403) |
(334,967) |
|
|
|
|
|
Net assets |
|
1,072,290 |
1,031,286 |
1,080,424 |
|
|
|
|
|
|
|
|
|
|
Represented by: |
|
|
|
|
Share capital |
7 |
7,994 |
7,994 |
7,994 |
Share premium |
|
127,612 |
127,612 |
127,612 |
Other reserves |
|
469,323 |
500,847 |
475,360 |
Capital reserves |
|
348,608 |
300,111 |
352,932 |
Hedging reserve |
|
(1,374) |
(1,912) |
(1,546) |
Revenue reserve |
|
120,127 |
96,634 |
118,072 |
|
|
|
|
|
Equity shareholders’
funds |
|
1,072,290 |
1,031,286 |
1,080,424 |
|
|
|
|
|
|
|
|
|
|
Net asset value per
share |
|
134.1p |
129.0p |
135.2p |
* These figures are audited.
F&C Commercial
Property Trust Limited
Condensed
Consolidated Statement of Changes in Equity (unaudited)
for the six months to 30 June
2016
|
|
Share
Capital
£’000 |
Share Premium
£’000 |
Other
Reserves
£’000 |
Capital
Reserves
£’000 |
Hedging Reserve
£’000 |
Revenue
Reserve
£’000 |
Total
£’000 |
|
Notes |
|
|
|
|
|
|
|
At 1 January 2016 |
|
7,994 |
127,612 |
475,360 |
352,932 |
(1,546) |
118,072 |
1,080,424 |
Total comprehensive income for the period |
|
|
|
|
|
|
|
|
Profit for the
period |
|
- |
- |
- |
- |
- |
15,675 |
15,675 |
Movement in fair value
of interest rate swap |
|
- |
- |
- |
- |
172 |
- |
172 |
Transfer in respect
of unrealised losses on investment properties |
5 |
- |
- |
- |
(4,324) |
- |
4,324 |
- |
Transfer from other
reserve |
|
- |
- |
(6,037) |
- |
- |
6,037 |
- |
Total comprehensive
income for the period |
|
- |
- |
(6,037) |
(4,324) |
172 |
26,036 |
15,847 |
Transactions with
owners of the Company recognised directly in equity |
|
|
|
|
|
|
|
|
Dividends paid |
2 |
- |
- |
- |
- |
- |
(23,981) |
(23,981) |
|
|
|
|
|
|
|
|
|
At 30 June 2016 |
|
7,994 |
127,612 |
469,323 |
348,608 |
(1,374) |
120,127 |
1,072,290 |
F&C Commercial Property Trust Limited
Condensed
Consolidated Statement of Changes in Equity (unaudited)
for the six months to 30 June
2015
|
|
Share
Capital
£’000 |
Share Premium
£’000 |
Other
Reserves
£’000 |
Capital
Reserves
£’000 |
Hedging Reserve
£’000 |
Revenue
Reserve
£’000 |
Total
£’000 |
|
Notes |
|
|
|
|
|
|
|
At 1 January 2015 |
|
7,994 |
127,612 |
512,764 |
240,088 |
(2,455) |
89,977 |
975,980 |
Total comprehensive income for the period |
|
|
|
|
|
|
|
|
Profit for the
period |
|
- |
- |
- |
- |
- |
78,744 |
78,744 |
Movement in fair value
of interest rate swaps |
|
- |
- |
- |
- |
543 |
- |
543 |
Transfer in respect
of unrealised gains on investment properties |
5 |
- |
- |
- |
57,446 |
- |
(57,446) |
- |
Gains on sale of investment
properties realised |
5 |
- |
- |
- |
2,577 |
- |
(2,577) |
- |
Transfer from other
reserve |
|
- |
- |
(11,917) |
- |
- |
11,917 |
- |
Total comprehensive
income for the period |
|
- |
- |
(11,917) |
60,023 |
543 |
30,638 |
79,287 |
Transactions with
owners of the Company recognised directly in equity |
|
|
|
|
|
|
|
|
Dividends paid |
2 |
- |
- |
- |
- |
- |
(23,981) |
(23,981) |
|
|
|
|
|
|
|
|
|
At 30 June 2015 |
|
7,994 |
127,612 |
500,847 |
300,111 |
(1,912) |
96,634 |
1,031,286 |
F&C Commercial Property Trust Limited
Condensed
Consolidated Statement of Changes in Equity
for the year to 31 December 2015*
|
|
Share
Capital
£’000 |
Share Premium
£’000 |
Other
Reserves
£’000 |
Capital
Reserves
£’000 |
Hedging Reserve
£’000 |
Revenue
Reserve
£’000 |
Total
£’000 |
|
Notes |
|
|
|
|
|
|
|
At 1 January 2015 |
|
7,994 |
127,612 |
512,764 |
240,088 |
(2,455) |
89,977 |
975,980 |
Total comprehensive income for the year |
|
|
|
|
|
|
|
|
Profit for the
year |
|
- |
- |
- |
- |
- |
151,497 |
151,497 |
Movement in fair value
of interest rate swaps |
|
- |
- |
- |
- |
909 |
- |
909 |
Transfer in respect
of unrealised gain on investment properties |
5 |
- |
- |
- |
110,314 |
- |
(110,314) |
- |
Gains on sale of investment
properties realised |
5 |
- |
- |
- |
2,530 |
- |
(2,530) |
- |
Transfer from other reserve |
|
- |
- |
(37,404) |
- |
- |
37,404 |
- |
Total comprehensive
income for the year |
|
- |
- |
(37,404) |
112,844 |
909 |
76,057 |
152,406 |
Transactions with
owners of the Company recognised directly in equity |
|
|
|
|
|
|
|
|
Dividends paid |
2 |
- |
- |
- |
- |
- |
(47,962) |
(47,962) |
|
|
|
|
|
|
|
|
|
At 31 December 2015 |
|
7,994 |
127,612 |
475,360 |
352,932 |
(1,546) |
118,072 |
1,080,424 |
* These figures are audited.
F&C Commercial
Property Trust Limited
Condensed
Consolidated Statement of Cash Flows (unaudited)
for the six months to 30 June
2016
Notes |
Six months
to 30 June 2016 |
Six months to 30
June 2015 |
Year to
31 December
2015* |
|
|
£’000 |
£’000 |
£’000 |
Cash flows from
operating activities |
|
|
|
|
Profit for the period
before taxation |
|
15,804 |
78,827 |
151,639 |
Adjustments for: |
|
|
|
|
Finance costs |
|
5,801 |
5,755 |
11,708 |
Interest receivable |
|
(63) |
(108) |
(194) |
Unrealised losses/(gains) on
revaluation of investment properties |
5 |
4,324 |
(57,446) |
(110,314) |
Gain on sale of investment
properties realised |
|
- |
(2,577) |
(2,530) |
Loss on redemption of interest
rate swap |
6 |
1,283 |
- |
- |
(Increase)/decrease in
operating trade and other receivables |
|
(445) |
1,944 |
2,006 |
(Decrease)/increase in
operating trade and other payables |
|
(3,146) |
(1,377) |
3,877 |
|
|
23,558 |
25,018 |
56,192 |
|
|
|
|
|
Interest received |
|
63 |
108 |
194 |
Interest paid |
|
(5,549) |
(5,798) |
(11,395) |
Tax paid |
|
(130) |
(46) |
(147) |
|
|
(5,616) |
(5,736) |
(11,348) |
|
|
|
|
|
Net cash inflow from
operating activities |
|
17,942 |
19,282 |
44,844 |
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
Purchase/development of investment
properties |
5 |
(1,527) |
(3,001) |
(44,914) |
Capital expenditure |
5 |
(2,427) |
(963) |
(4,717) |
Sale of investment properties |
5 |
- |
17,736 |
18,007 |
Net cash (outflow)/inflow from
investing activities |
|
(3,954) |
13,772 |
(31,624) |
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
Dividends paid |
2 |
(23,981) |
(23,981) |
(47,962) |
Drawdown of Bank Loan,
net of costs |
6 |
49,513 |
- |
- |
Revolving credit
facility arrangement costs |
6 |
(486) |
- |
- |
Repayment of Bank
Loan |
6 |
(50,000) |
- |
- |
Drawdown of L&G
loan, net of costs |
6 |
- |
(362) |
- |
Swap breakage
costs |
6 |
(1,283) |
- |
- |
Net cash outflow
from financing activities |
|
(26,237) |
(24,343) |
(47,962) |
|
|
|
|
|
Net (decrease)/increase in cash
and cash equivalents |
|
(12,249) |
8,711 |
(34,742) |
Opening cash and cash
equivalents |
|
55,755 |
90,497 |
90,497 |
Closing cash and cash
equivalents |
|
43,506 |
99,208 |
55,755 |
* These figures are audited
F&C Commercial
Property Trust Limited
Notes to the
Consolidated Financial Statements
for the six months to 30 June
2016
1. General
information and basis of preparation
The condensed consolidated financial statements have been
prepared in accordance with the Disclosure and Transparency Rules
of the United Kingdom Financial Conduct Authority and IAS 34
‘Interim Financial Reporting’. The condensed consolidated financial
statements do not include all of the information required for a
complete set of IFRS financial statements and should be read in
conjunction with the consolidated financial statements of the Group
for the year ended 31 December 2015,
which were prepared under full IFRS requirements. The accounting
policies used in the preparation of the condensed consolidated
financial statements are consistent with those of the consolidated
financial statements of the Group for the year ended 31 December 2015. These condensed interim
financial statements have been reviewed, not audited.
After making enquiries, and bearing in mind the nature of the
Company’s business and assets, the Directors consider that the
Company has adequate resources to continue in operational existence
for the foreseeable future. In assessing the going concern basis of
accounting the Directors have had regard to the guidance issued by
the Financial Reporting Council. They have considered the current
cash position of the Group, forecast rental income and other
forecast cash flows. The Group has agreements relating to its
borrowing facilities with which it has complied during the period.
As such the Directors believe that the Group has the ability to
meet its financial obligations as they fall due for a period of at
least twelve months from the date of approval of the financial
statements. For this reason they continue to adopt the going
concern basis in preparing the financial statements.
These condensed interim financial statements were approved for
issue on 23 August 2016.
2.
Dividends
|
|
Six months to 30
June 2016 |
Six months to 30
June 2015 |
Year to 31 December
2015 |
|
|
£’000 |
£’000 |
£’000 |
|
In respect of the previous
period: |
|
|
|
|
Ninth interim (0.5p per share) |
3,997 |
3,997 |
3,997 |
|
Tenth interim (0.5p per share) |
3,997 |
3,997 |
3,997 |
|
Eleventh interim (0.5p per
share) |
3,996 |
3,996 |
3,996 |
|
Twelfth interim (0.5p per
share) |
3,997 |
3,997 |
3,997 |
|
|
|
|
|
|
In respect of the
period
under review: |
|
|
|
|
First interim (0.5p per
share) |
3,997 |
3,997 |
3,997 |
|
Second interim (0.5p per share) |
3,997 |
3,997 |
3,997 |
|
Third interim (0.5p per
share) |
- |
- |
3,996 |
|
Fourth interim (0.5p per
share) |
- |
- |
3,997 |
|
Fifth interim (0.5p per
share) |
- |
- |
3,997 |
|
Sixth interim (0.5p per
share) |
- |
- |
3,997 |
|
Seventh interim (0.5p per
share) |
- |
- |
3,997 |
|
Eighth interim (0.5p per
share) |
- |
- |
3,997 |
|
|
23,981 |
23,981 |
47,962 |
A third interim dividend for the year to 31 December 2016, of 0.5
pence per share totalling £3,997,000 was paid on
29 July 2016. A fourth interim
dividend of 0.5 pence per share will
be paid on 31 August 2016 to
shareholders on the register on 11 August
2016. Although these payments relate to the period ended
30 June 2016, under IFRS they will be
accounted for in the period during which they are paid.
It is the Directors’ intention that the Company will continue to
pay dividends monthly.
3. Other
expenses
|
|
Six months to 30
June 2016 |
Six months to 30
June 2015 |
Year to 31 December
2015 |
|
|
£’000 |
£’000 |
£’000 |
|
Direct operating expenses of UK
rental property |
1,798 |
1,554 |
2,826 |
|
Valuation and other professional
fees |
193 |
339 |
351 |
|
Directors’ fees |
147 |
135 |
286 |
|
Administration fee |
75 |
72 |
145 |
|
Depositary fee |
80 |
67 |
143 |
|
Other |
206 |
185 |
453 |
|
|
2,499 |
2,352 |
4,204 |
The basis of payment for the Directors’ and investment
management fees are detailed within the consolidated financial
statements of the Group for the year ended 31 December 2015.
4. Earnings per
share
The Group’s basic and diluted earnings per Ordinary Share are
based on the profit for the period of £15,675,000 (period to
30 June 2015: £78,744,000;
31 December 2015: £151,497,000) and
on 799,366,108 (period to 30 June
2015: 799,366,108; 31 December
2015: 799,366,108) Ordinary Shares, being the weighted
average number of shares in issue during the period. Earnings for
the six months to 30 June 2016 should
not be taken as guide to the results for the year to 31 December 2016.
5. Investment
properties
|
Six months to 30
June 2016 |
Six months to 30
June 2015 |
Year to 31 December
2015 |
|
£’000 |
£’000 |
£’000 |
Freehold and leasehold
properties |
|
|
|
Opening book cost |
965,721 |
936,649 |
936,649 |
Opening unrealised appreciation |
374,340 |
258,944 |
258,944 |
Opening fair value |
1,340,061 |
1,195,593 |
1,195,593 |
Purchases/developments |
1,527 |
3,001 |
3,344 |
Acquisition through subsidiary other
than through business combination |
- |
- |
41,570 |
Sales – proceeds |
- |
(17,736) |
(18,007) |
– gain on
sales |
- |
(2,505) |
(2,552) |
Capital expenditure |
2,427 |
963 |
4,717 |
Unrealised losses realised during
the period |
- |
5,082 |
5,082 |
Unrealised gains on investment
properties |
17,573 |
61,468 |
114,689 |
Unrealised losses on investment
properties |
(21,897) |
(4,022) |
(4,375) |
|
1,339,691 |
1,241,844 |
1,340,061 |
|
|
|
|
Closing book cost |
969,675 |
920,372 |
965,721 |
Closing unrealised appreciation |
370,016 |
321,472 |
374,340 |
Closing fair value |
1,339,691 |
1,241,844 |
1,340,061 |
There were no properties held for sale at 30 June 2016 (2015: none).
All the Group’s investment properties were valued as at
30 June 2016 by RICS Registered
Valuers working for the company of CBRE Limited (‘CBRE’),
commercial real estate advisors, acting in the capacity of a
valuation adviser to the AIFM. All such valuers are Chartered
Surveyors, being members of the Royal Institution of Chartered
Surveyors (‘RICS’).
CBRE completed the valuation of the Group’s investment
properties at 30 June 2016 on a fair
value basis and in accordance with The RICS Valuation –
Professional Standards (December
2014). The fair value of these investment properties per the
Valuation Report amounted to £1,355,750,000 (30 June 2015: £1,257,505,000; 31 December 2015: £1,355,915,000). The difference
between the Valuation Report and the closing fair value of
investment properties disclosed above of £1,339,691,000
(30 June 2015: £1,241,844,000;
31 December 2015: £1,340,061,000)
consists of capital incentives paid to tenants totalling £4,172,000
and accrued income relating to the pre-payment for rent free
periods recognised over the life of the lease totalling
£11,887,000, which are both separately recorded in the accounts as
current assets within ‘trade and other receivables’.
There were no significant changes to the valuation process,
assumptions and techniques used during the period, further details
on which were included in note 9 of the consolidated financial
statements of the Group for the year ended 31 December 2015.
Following the Referendum held on 23 June
2016 concerning the UK’s membership of the EU, a decision
was taken to exit. CBRE has explicitly stated that we are now in a
period of uncertainty in relation to many factors that impact the
property investment and letting markets. Since the Referendum date
it has not been possible to gauge the effect of this decision by
reference to transactions in the market place and the probability
of the valuations exactly coinciding with prices received were the
properties to be sold has reduced.
As at 30 June 2016, all of the
Group’s properties are Level 3 in the fair value hierarchy as it
involves the use of significant inputs and there were no transfers
between levels during the period. Level 3 inputs used in valuing
the properties are those which are unobservable, as opposed to
Level 1 (inputs from quoted prices) and Level 2 (observable inputs
either directly i.e. as priced, or indirectly, i.e. derived from
prices).
The Group’s borrowings (note 6) are secured by a fixed charge
over the majority of investment properties held.
6. Interest-bearing
loans and interest rate swap liabilities
|
Six months to 30
June 2016 |
Six months to 30
June 2015 |
Year to 31 December
2015 |
|
£’000 |
£’000 |
£’000 |
L&G Loan |
|
|
|
Principal amount outstanding |
260,000 |
260,000 |
260,000 |
Set-up costs |
(2,683) |
(2,683) |
(2,683) |
Amortisation of set-up costs |
348 |
134 |
229 |
|
257,665 |
257,451 |
257,546 |
Barclays Loan |
|
|
|
Principal amount outstanding |
50,000 |
50,000 |
50,000 |
Set-up costs |
(508) |
(727) |
(727) |
Amortisation of set-up costs |
4 |
558 |
600 |
|
49,496 |
49,831 |
49,873 |
|
|
|
|
|
307,161 |
307,282 |
307,419 |
£260 million L&G Loan 2024
On 31 December 2014, the Group
entered into a £260 million ten year term loan facility agreement
with Legal & General Pensions Limited (“L&G”). The
transaction was conducted by L&G’s lending arm, LGIM Commercial
Lending Limited. The loan has a maturity date of 31 December 2024.
Interest is payable on this loan, quarterly in arrears, at a
fixed rate of 3.32 per cent per annum for the duration of the loan.
The loan is secured by means of a fixed and floating charge over
the whole of the assets of the Secured Group (which, at
30 June 2016, comprised FCPT Holdings
Limited, F&C Commercial Property Holdings Limited and
Winchester Burma Limited).
The Secured Group has complied with all the applicable L&G
loan covenants during the period.
£100 million Barclays Loan 2021
On 21 June 2016, the Group amended
the financing arrangements with Barclays Bank PLC (‘Barclays’) to
the existing £50 million term loan facility which was repayable
28 June 2017. The amended
arrangements extend the repayment date of the £50 million term loan
facility to 21 June 2021 and changed
the maximum loan to value percentage to 50 per cent which was
previously 60 per cent. The Group has agreed an additional
revolving credit facility of £50 million with Barclays over the
same period, which has not been drawn down as at 30 June 2016. The loan arrangement costs for both
the term and revolving loan facility was £1,017,000.
Interest accrues on the new bank loan at a variable rate, based
on 3 month LIBOR plus margin and is payable quarterly. The margin
is 1.50 per cent per annum for the duration of the loan. The
revolving credit facility pays an undrawn commitment fee of 0.60
per cent per annum.
The bank loan is secured by the way of a fixed and floating
charge over the whole of the assets of SCP Estate Holdings Limited
and SCP Estate Limited (‘the SCP Group’), whose assets
consist mainly of the properties held at St. Christopher’s Place
Estate, London W1. The SCP Group
has complied with all the applicable Barclays loan covenants during
the period.
On 21 June 2016, the Group
terminated its existing interest rate hedging arrangements with
Barclays at a cost of £1,283,000. On the same day, the Group
entered into a new £50 million interest rate swap in connection
with the extended Barclays term facility. The hedge has been
achieved by matching the notional amount of the swap with the loan
principal and matching the swap term to the loan term.
Interest on the swap is receivable at a variable rate calculated
on the same LIBOR basis as for the bank loan (as detailed above but
excluding the margin) and payable quarterly at a fixed rate of
1.022 per cent per annum. The interest rate swap is due to expire
on 21 June 2021.
The fair value of the liability in respect of the new interest
rate swap contract at 30 June 2016
was £1,374,000, which is based on the marked to market value. The
interest rate swap is classified as Level 2 under the hierarchy of
fair value measurements.
7. Share
capital
|
|
|
£’000 |
Allocated, called-up and fully
paid |
|
|
|
799,366,108 Ordinary Shares of 1p
each in issue at 30 June 2016 |
|
|
7,994 |
Under the Company’s Articles of Incorporation, the Company may
issue an unlimited number of Ordinary Shares. The Company issued
nil Ordinary Shares during the period (2015: nil) raising net
proceeds of £nil (2015: £nil).
The Company did not repurchase any Ordinary Shares during the
period.
8. Net asset value
per share
The Group’s net asset value per Ordinary Share of 134.1p
(30 June 2015: 129.0p; 31 December 2015: 135.2p) is based on equity
shareholders’ funds of £1,072,290,000 (30
June 2015: £1,031,286,000; 31 Decermber 2015:
£1,080,924,000) and on 799,366,108 (30 June
2015: 799,366,108; 31 December
2015: 799,366,108) Ordinary Shares, being the number of
shares in issue at the period
end.
9. Capital
commitments
The Group had capital commitments totalling £6,857,000 as at
30 June 2016 (30 June 2015: £11,596,000; 31 December 2015: £8,852,000). These commitments
related mainly to contracted development works at the Group’s
properties at St. Christopher’s Place Estate, London W1.
10. List of
Subsidiaries
The Group results consolidate the results of the following
companies:
-
FCPT Holdings Limited (the parent company of F&C Commercial
Property Holdings Limited and Winchester Burma Limited)
-
F&C Commercial Property Holdings Limited (a company which
invests in properties)
-
SCP Estate Holdings Limited (the parent company of SCP Estate
Limited and Prime Four Limited)
-
SCP Estate Limited (a company which invests in properties)
-
Prime Four Limited (a company which invests in properties)
-
Winchester Burma Limited (a company which invests in
properties)
-
Leonardo Crawley Limited (a company which invests in
properties)
-
Crawley Holdings Limited (a dormant company)
All of the above named companies are registered in Guernsey except Crawley Holdings Limited which
is registered in England and
Wales.
The Group’s ultimate parent company is F&C Commercial
Property Trust Limited.
11. Operating
segments
The Board has considered the requirements of IFRS 8 ‘Operating
Segments’. The Board is of the view that the Group is engaged in a
single segment of business, being property investment, and in one
geographical area, the United
Kingdom, and that therefore the Group has only a single
operating segment. The Board of Directors, as a whole, has been
identified as constituting the chief operating decision maker of
the Group. The key measure of performance used by the Board to
assess the Group’s performance is the total return on the Group’s
net asset value. As the total return on the Group’s net asset value
is calculated based on the net asset value per share calculated
under IFRS as shown at the foot of the Balance Sheet, assuming
dividends are re-invested, the key performance measure is that
prepared under IFRS. Therefore no reconciliation is required
between the measure of profit or loss used by the Board and that
contained in the financial statements.
12. Subsequent events
There are no material subsequent events that need to be
disclosed.
13. Forward looking
statements
Certain statements in this report are forward looking
statements. By their nature, forward looking statements involve a
number of risks, uncertainties or assumptions that could cause
actual results or events to differ materially from those expressed
or implied by those statements. Forward looking statements
regarding past trends or activities should not be taken as
representation that such trends or activities will continue in the
future. Accordingly, undue reliance should not be placed on forward
looking statements.
Statement of Principal Risks and
Uncertainties
The Company’s assets comprise mainly direct investments in UK
commercial property. Its principal risks are therefore related to
the commercial property market in general. Other risks faced by the
Company include investment and strategic, regulatory, management
and control, operational, and financial risks. The Company is also
exposed to risks in relation to its financial instruments. These
risks, and the way in which they are managed, are described in more
detail under the heading ‘Principal Risks and Risk Management’
within the Business Model and Strategy in the Company’s Annual
Report for the year ended 31 December
2015. The result of the Referendum on 23 June was that the
UK should leave the EU. While the full impact of this result is
uncertain, the Directors are considering the implications for the
Company. The Company’s principal risks and uncertainties have not
changed materially since the date of that report and are not
expected to change materially for the remainder of the Company’s
financial year.
Statement of Directors’
Responsibilities in Respect of the Interim Report
We confirm that to the best of our knowledge:
•
the condensed set of consolidated financial statements has been
prepared in accordance with IAS 34 ‘Interim Financial Reporting’ as
adopted by the European Union;
•
the Chairman’s Statement and Managers’ Review (together
constituting the Interim Management Report) together with the
Statement of Principal Risks and Uncertainties above include a fair
review of the information required by the Disclosure and
Transparency Rules (‘DTR’) 4.2.7R, being an indication of important
events that have occurred during the first six months of the
financial year and their impact on the condensed set of
consolidated financial statements and a description of the
principal risks and uncertainties for the remaining six months of
the financial year; and
•
the Chairman’s Statement together with the condensed set of
consolidated financial statements include a fair review of the
information required by DTR 4.2.8R, being related party
transactions that have taken place in the first six months of the
current financial year and that have materially affected the
financial position or performance of the Company during that
period, and any changes in the related party transactions described
in the last Annual Report that could do so.
On behalf of the Board
Chris Russell
Director
F&C Commercial
Property Trust Limited
Independent Review Report
to the Directors of F&C Commercial Property Trust
Limited
Introduction
We have been engaged by F&C Commercial Property Trust Limited
(“the Company”) to review the condensed unaudited set of financial
statements in the half-yearly financial report for the six months
ended 30 June 2016, which comprises
the unaudited condensed consolidated statement of comprehensive
income, the unaudited condensed consolidated balance sheet, the
unaudited condensed consolidated statement of changes in equity,
the unaudited condensed consolidated statement of cash flows, and
related notes. We have read the other information contained in the
half-yearly 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-yearly financial report is the responsibility of, and has
been approved by, the directors. The directors are responsible for
preparing the half-yearly financial report in accordance with the
Disclosure and Transparency Rules of the United Kingdom’s Financial
Conduct Authority.
As disclosed in note 1, the annual financial statements of the
Company are prepared in accordance with International Financial
Reporting Standards as adopted by the European Union. The condensed
set of financial statements included in this half-yearly financial
report has 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 set of financial statements in the half-yearly financial
report based on our review. This report, including the conclusion,
has been prepared for and only for the Company for the purpose of
the Disclosure and Transparency Rules of the Financial Conduct
Authority and for no other purpose. We do not, in producing this
report, accept or assume responsibility for any other purpose or to
any other person to whom this report is shown or into whose hands
it may come save where expressly agreed by our prior consent in
writing.
Scope of review
We conducted our review in accordance with International Standard
on Review Engagements 2410, ‘Review of Interim Financial
Information Performed by the Independent Auditor of the Entity’
issued by the International Auditing and Assurance Standards Board.
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
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 set of financial statements in the
half-yearly financial report for the six months ended 30 June 2016 are 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.
PricewaterhouseCoopers CI LLP
Chartered Accountants
Guernsey, Channel Islands
All enquiries to:
The Company
Secretary
Northern Trust International Fund Administration Services
(Guernsey)
Limited
Trafalgar
Court
Les
Banques
St. Peter
Port
Guernsey GY1
3QL
Tel: 01481 745324
Fax: 01481 745051
Richard Kirby
BMO REP Asset Management plc
Tel: 0207 499 2244
Graeme Caton
Winterflood Securities Limited
Tel: 0203 100 0268
The full interim report for the period to 30
June 2016 will be sent to shareholders and will be available
for inspection at Trafalgar Court, Les Banques, St Peter Port,
Guernsey GY1 3QL, the registered
office of the Company, and from the Company’s website:
www.fccpt.co.uk