TIDMKCR
RNS Number : 7961H
KCR Residential REIT PLC
27 March 2020
27 March 2020
KCR Residential REIT plc
("KCR" or the "Company")
Interim Results
KCR Residential REIT plc, the residential REIT group, is pleased
to announce its interim results for the six months to 31 December
2019.
Operational Highlights
-- Revenue for the six months increased to GBP427,057 (2018:
GBP269,113) and gross margin improved to 76% (2018: 45%).
-- Portfolio level occupancy is high, rental values have
increased and capital values remain firm.
-- KCR recurring administrative expenses for the period fell to
GBP706,177 (2018: GBP800,583) with further reductions to come.
-- Current liabilities at 31 December 2019 were down to
GBP930,062 (2018: GBP7,904,125) and total liabilities were lower at
GBP10,404,715 (2018: GBP14,710,415).
-- Incentive preference shares have been cancelled and negative
share based payment charges will no longer appear in the profit and
loss account.
-- The GBP7.9m refinancing of property in February 2020
delivered GBP2.9m of free cash to the Company, significantly
strengthening KCR's liquidity position.
-- We expect the ongoing uncertainty in the market to lead to more acquisition opportunities.
Contacts:
KCR Residential REIT plc info@kcrreit.com
Dominic White, Chief Executive +44 20 3793 5236
Arden Partners plc
Richard Johnson
Benjamin Cryer +44 20 7614 5900
Notes to Editors:
KCR's objective is to build a substantial residential property
portfolio that generates secure income flow for shareholders. The
Directors intend that the group will acquire, develop and manage
residential property assets in a number of jurisdictions including
the UK.
CHAIRMAN'S STATEMENT
FOR THE SIX MONTHSED 31 DECEMBER 2019
KCR Residential REIT plc ("KCR" or the "Company") and its
subsidiaries (together the "Group") operate in the private rented
residential investment market. The Company acquires whole blocks of
studio, one- and two-bed apartments that are rented to private
tenants. The Company currently focuses on the UK residential
sector.
Since the year end report to 30 June 2019, the UK has had an
election result (12 December 2019) that hands a clear majority to
the Conservative Party, and the first stage of the UK's exit from
the European Union has been implemented (31 January 2020). This has
removed some of the uncertainty that held back consumer and
business confidence in recent years which has translated into, we
believe, a firming up of house prices but not the "bounce" that the
press has reported.
Although the election and the first phase of Brexit are behind
us, there remains significant uncertainty.
- The reality of the next phase of Brexit is that it will be
complicated to agree the detail of a trade deal with Europe by 31
December 2020 without which the UK will fall back onto World Trade
Organisation (WTO) rules.
- The Coronavirus has had a global negative impact on demand,
supply chains, stock markets and consumer and business confidence.
Whilst the full impact is yet to be seen it is expected that travel
restrictions and reduced leisure travel in the near term will have
a negative impact on demand for short let accommodation in the
United Kingdom. This has potential to negatively impact the
occupancy profile and rentals that can be achieved in KCR's
portfolio if stock that is currently used predominantly for short
let leisure travel is repositioned for longer term lease. Further
information can be found in note 11 of these interim financial
statements.
- On 11 March 2020 in the UK's Budget further changes were made
to UK stamp duty (a 2% surcharge on foreign buyers) which is
expected to negatively affect demand in the medium to high value
residential property price range.
The UK residential rented property market, however, remains
fundamentally under-supplied. KCR continues to target a specific
segment of rented residential property that is in high demand and
relatively short supply. The Company acquires blocks of flats for
rent aimed at early-stage professionals and continues to experience
positive rental growth and high occupancy rates across the
portfolio.
CHIEF EXECUTIVE'S REPORT
FOR THE SIX MONTHSED 31 DECEMBER 2019
We are pleased to report on the progress of the Group in the
six-month period since 30 June 2019.
Property portfolio
KCR achieved its objective of increasing rental revenue across
the portfolio. Revenue for the six months increased to GBP427,057
(2018: GBP269,113) and gross margin improved to 76% (2018:
45%).
At the time of writing, portfolio level occupancy is high,
rental values have increased and capital values remain firm.
- The Company's investment in 27 units at Deanery Court,
Southampton is fully occupied. The wider Chapel Riverside
development upon which Deanery Court is located is proceeding well
which we expect to enhance the value of the property over time as
cafes and retailers move-in alongside the new residents.
- The Ladbroke Grove portfolio of 17 units is fully let apart
from one unit which is being refurbished. This will be complete in
the next two weeks.
- The block of ten apartments at Coleherne Road has three units
undergoing a light refurbishment that will be complete during
March.
- The Heathside property with 37 flats in Golders Green, London
has four new lettings on assured shorthold tenancies (AST) in place
alongside the 31 historic long leases. Two flats remain available
to let on ASTs.
KCR is analysing the opportunity to provide all-inclusive rental
contracts that include utilities and furniture, that can be let for
periods of 1 week to 12 months plus. This walk-in-walk-out (WIWO)
strategy is designed to be frictionless for tenants, making the
move-in move-out process simple and quick. We believe there is
demand for this type of residential offering in London and that a
premium rental can be achieved for delivering this service. We will
trial the WIWO strategy at the 10 units in Coleherne Road in the
coming months following a full refurbishment at the property.
Should the WIWO strategy be successful, the Company will implement
it progressively in its other London assets.
Financial
For the six months to 31 December 2019:
- Revenue increased to GBP427,057 (GBP269,113 at 31 December 2018) an increase of 58.7 per cent.
- Consolidated operating loss before separately disclosed
administrative items was GBP382,183 (GBP24,736 profit at 31
December 2018)
At 31 December 2019:
- KCR's investment properties were valued at GBP23.4 million
(GBP23.9 million at 30 June 2019) a decrease in portfolio value of
GBP0.5 million due to a disposal of a single flat at Heathside,
Golders Green.
- The Group's net asset value per share was 47.84p (60.67p at 30
June 2019) following the issue of new shares as part of the
Torchlight Fund LP transaction (See RNS 12 July 2019).
Corporate activity
The corporate transaction with Torchlight Fund LP was reported
in detail in the Circular (12 July 2019) and outlined in the year
end accounts to 30 June 2019 post balance sheet events.
Since the release of the Annual Report, on 12 February 2020 KCR
successfully completed a GBP7.9m refinancing of its Coleherne Road,
Ladbroke Grove and Lomond Court, London assets. The refinancing,
which has a 25-year term and a five year fixed rate, is interest
only and is secured on the refinanced assets. The interest rate on
loans relating to these properties moved from 3.75% p.a. to 3.5%
p.a. This transaction delivered GBP2.9m of free capital to KCR post
repayment of the existing bank facility.
Post completion of this KCR maintains a strong liquidity profile
and is well placed to complete upgrades to the existing portfolio
and pursue acquisitions to grow the portfolio.
Outlook
Given the ongoing resilience of the UK rented residential
property sector, the potential equity available through its
shareholder Torchlight Fund, and capital delivered through the
refinancing of its London portfolio, the Board remains positive
about investing in new opportunities to grow its portfolio and
resulting revenue stream.
Our near term focus is on improving rental income from existing
assets through the WIWO letting strategy, refurbishment to improve
building quality and the optimisation of property management to
reduce direct costs. We are also implementing a strategy to reduce
corporate overheads.
KCR continues to source and analyse potential acquisitions that
fit its portfolio strategy. The Company is also initiating a full
refurbishment at its Coleherne Road, London property which it
expects to complete in early 2021.
The Board looks forward to updating shareholders on these
activities in due course
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 31 DECEMBER 2019 (unaudited)
Six months
ended 31
December
2018
Six months
ended 31 Year ended
December 30 June 2019
2019 (as restated*) (audited)
Notes GBP GBP GBP
Revenue 427,057 269,113 777,827
Cost of sales (103,063) (148,794) (212,743)
------------ ---------------- --------------
Gross profit 323,994 120,319 565,084
Administrative expenses (706,177) (800,583) (1,446,565)
Fair value through profit and
loss - Revaluation of investment
properties 6 - 705,000 3,268
------------ ---------------- --------------
Operating (loss)/profit before
separately disclosed items (382,183) 24,736 (878,213)
Share-based payment charge 8 (1,599,678) (1,180,918) (1,387,441)
Costs associated with third-party
fundraising and issue of shares
Loss on disposal of property
SPV 3 (300,835) (167,817) (407,616)
- (325,002) (340,753)
------------ ---------------- --------------
Operating loss (2,282,696) (1,649,001) (3,014,023)
Finance costs (229,527) (263,853) (732,984)
Finance income 1,541 9,590 9,635
------------ ---------------- --------------
Loss before taxation (2,510,682) (1,903,264) (3,737,372)
Taxation - - -
------------ ---------------- --------------
Loss for the period/year (2,510,682) (1,903,264) (3,737,372)
------------ ---------------- --------------
Total comprehensive expense for
the period/year (2,510,682) (1,903,264) (3,737,372)
============ ================ ==============
Basic and diluted loss per
ordinary share (pence) 4 (9.94) (13.93) (24.66)
============ ================ ==============
* The disposal of KCR (Cygnet) Limited in the period to 31
December 2018 was previously accounted for as a business
combination with the loss on disposal shown as a loss from
discontinued operations. This disposal has been restated as an
asset disposal. Details of the prior period adjustment are included
within the audited annual report for the year ended 30 June
2019.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2019 (unaudited)
31
31 December December 30 June 2019
2019 2018 (audited)
Notes GBP GBP GBP
Non-current assets
Property, plant and equipment 57,927 33,165 61,370
Investment properties 6 23,385,000 24,600,000 23,923,000
23,442,927 24,633,165 23,984,370
------------ ----------- -------------
Current assets
Trade and other receivables 127,855 1,221,412 77,078
Cash and cash equivalents 24,218 63,521 29,298
------------ ----------- -------------
152,073 1,284,933 106,376
------------ ----------- -------------
Total assets 23,595,000 25,918,098 24,090,746
============ =========== =============
Equity
Shareholders' equity
Share capital 7 2,756,963 2,029,178 2,029,178
Share premium 13,535,468 10,018,986 10,018,986
Capital redemption reserve 344,424 67,500 67,500
Other reserves 14,930 14,930 14,930
Retained earnings (3,461,500) (922,911) (2,550,496)
------------ ----------- -------------
Total equity 13,190,285 11,207,683 9,580,098
------------ ----------- -------------
Non-current liabilities
Interest bearing loans and
borrowings 9,474,653 6,806,290 9,881,344
------------ ----------- -------------
Current liabilities
Trade and other payables 754,944 6,327,574 2,737,010
Interest bearing loans and
borrowings 175,118 1,576,551 1,892,294
930,062 7,904,125 4,629,304
------------ ----------- -------------
Total liabilities 10,404,715 14,710,415 14,510,648
------------ ----------- -------------
Total equity and liabilities 23,595,000 25,918,098 24,090,746
============ =========== =============
Net asset value per share
(pence) 47.84 70.97 60.67
============ =========== =============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 31 DECEMBER 2019 (unaudited)
Unissued Capital
Share Share share capital redemption Retained Other
capital premium (as restated) reserve earnings reserves Total equity
GBP GBP GBP GBP GBP GBP GBP
Balance at 1
July 2018 1,435,721 7,358,244 1,260,299 67,500 (200,565) 29,862 9,951,061
Changes in
equity
Transactions
with owners:
Issue of share
capital 593,457 2,660,742 (1,260,299) - - - 1,993,900
Share-based
payment
charge - - - - 1,180,918 - 1,180,918
------------ ------------ ----------------------- ----------- -------------- --------- --------------
Total
transactions
with owners: 593,457 2,660,742 (1,260,299) - 1,180,918 - 3,174,818
------------ ------------ ----------------------- ----------- -------------- --------- --------------
Total
comprehensive
expense - - - - (1,903,264) - (1,903,264)
Equity element
of loan
finance - - - - - (14,932) (14,932)
Balance at 31
December 2018 2,029,178 10,018,986 - 67,500 (922,911) 14,930 11,207,683
------------ ------------ ----------------------- ----------- -------------- --------- --------------
Changes in
equity
Transactions
with owners:
Share-based
payment
charge - - - - 206,523 - 206,523
------------ ------------ ----------------------- ----------- -------------- --------- --------------
Total
transactions
with owners: - - - - 206,523 - 206,523
------------ ------------ ----------------------- ----------- -------------- --------- --------------
Total
comprehensive
expense - - - - (1,834,108) - (1,834,108)
Balance at 30
June 2019 2,029,178 10,018,986 - 67,500 (2,550,496) 14,930 9,580,098
------------ ------------ ----------------------- ----------- -------------- --------- --------------
Changes in
equity
Transactions
with owners:
Issue of share
capital 1,004,709 3,516,482 - - - - 4,521,191
Restricted
Preference
Shares gifted
to company (276,924) - - 276,924 - - -
Share-based
payment
charge - - - - 1,599,678 - 1,599,678
------------ ------------ ----------------------- ----------- -------------- --------- --------------
Total
transactions
with owners: 727,785 3,516,482 - 276,924 1,599,678 - 6,120,869
------------ ------------ ----------------------- ----------- -------------- --------- --------------
Total
comprehensive
expense - - - - (2,510,682) - (2,510,682)
------------ ------------ ----------------------- ----------- -------------- --------- --------------
Balance at 31
December 2019 2,756,963 13,535,468 - 344,424 (3,461,500) 14,930 13,190,285
============ ============ ======================= =========== ============== ========= ==============
*In the prior period unissued share capital was presented within
current liabilities. This has been restated in the current period
to re-classify the balance to equity. Details of the prior period
adjustment are included in the audited annual report for the year
ended 30 June 2019.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 31 DECEMBER 2019 (unaudited)
Six months
Six months ended Year
ended 31 December ended
31 December 2018 30 June
2019 2019
(*as restated) (audited)
GBP GBP GBP
Cash flows from operating activities
Loss for the period/year from continuing
operations (2,510,682) (1,903,264) (3,737,372)
Adjustments for
Depreciation charges 11,621 5,828 18,074
Share-based payment charge 1,599,678 1,180,918 1,387,441
Loss on disposal of property SPV - 360,081 340,753
Revaluation of investment properties - (705,000) (3,268)
Finance costs 229,527 263,853 732,984
Finance income (1,541) (9,590) (9,635)
(Increase)/decrease in trade and
other receivables (50,777) (517,985) 626,349
Decrease in trade and other payables (1,982,066) (1,977,431) (4,315,992)
Cash used in operations (2,704,240) (3,302,590) (4,960,666)
Interest paid (229,527) (263,853) (732,984)
Net cash used in operating activities (2,933,767) (3,566,443) (5,693,650)
-------------- ---------------- ------------
Cash flows from investing activities
Proceeds from sale of investment 538,000 - -
properties
Purchase of property, plant and
equipment (8,178) - (40,451)
Purchase of investment properties - - (24,732)
Disposal of property SPV - 1,140,000 1,140,000
Interest received 1,541 9,590 9,635
-------------- ---------------- ------------
Net cash from/(used in) investing
activities 531,363 1,149,590 1,084,452
-------------- ---------------- ------------
Cash flows from financing activities
Loan repayments in period (2,123,867) (130,250) (796,079)
New loans in year - - 3,434,250
Shares issued 4,521,191 2,604,199 1,993,900
-------------- ---------------- ------------
Net cash from financing activities 2,397,324 2,473,949 4,632,071
-------------- ---------------- ------------
Increase/(decrease) in cash and
cash equivalents (5,080) 57,096 22,873
-------------- ---------------- ------------
Cash and cash equivalents at beginning
of period 29,298 6,425 6,425
============== ================ ============
Cash and cash equivalents at end
of period 24,218 63,521 29,298
============== ================ ============
*The disposal of KCR (Cygnet) Limited in the period to 31
December 2018 was previously accounted for as a business
combination with the loss on disposal shown as a loss from
discontinued operations. This disposal has been restated as an
asset disposal. Details of the prior period adjustment are included
in the audited annual report for the year ended 30 June 2019.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 31 DECEMBER 2019 (unaudited)
1. Basis of preparation
The Company is registered in England and Wales. The consolidated
interim financial statements for the six months ended 31 December
2019 comprise those of the Company and subsidiaries. The Group is
primarily involved in UK property ownership and letting.
Statement of compliance
This consolidated interim financial report has been prepared in
accordance with the measurement principles of IFRS adopted in the
EU. AIM-listed companies are not required to comply with IAS 34
Interim Financial Reporting and the Group has taken advantage of
this exemption. Selected explanatory notes are included to explain
events and transactions that are significant to an understanding of
the changes in financial performance and position of the Group
since the last annual consolidated financial statements for the
year ended 30 June 2019. This consolidated interim financial report
does not include all the information required for full annual
financial statements prepared in accordance with International
Financial Reporting Standards. The financial statements are
unaudited and do not constitute statutory accounts as defined in
section 434(3) of the Companies Act 2006.
A copy of the audited annual report for the year ended 30 June
2019 has been delivered to the Registrar of Companies. The
auditor's report on these accounts was unqualified and did not
contain statements under s498(2) or s498(3) of the Companies Act
2006.
This consolidated interim financial report was approved by the
Board of Directors on 26 March 2020.
New standards and interpretations adopted
These interim financial statements are the first under which the
Group is adopting IFRS 16 'Leases', which is effective for periods
commencing after 1 January 2019.
The directors considered the adoption of IFRS 16 for the period
beginning 1 July 2019. The Group currently has a small number of
operating leases concerning office premises and plant and equipment
as set out in Note 5. IFRS 16 provides an exemption for short term
operating leases and leases of low value. As its leases are short
term and not material, the Group will take advantage of the
exemption rather than establish a right to use asset and related
liability as required for relevant leases under IFRS 16.
The accounting policy is disclosed below.
Significant accounting policies
The accounting policies applied by the Group in this
consolidated interim financial report are the same as those applied
by the Group in its consolidated financial statements for the year
ended 30 June 2019, with the following exceptions:
Basis of consolidation
The interim financial statements include the financial
statements of the Company and its subsidiary undertakings. The
subsidiaries included within the consolidated financial statements,
from their effective date of acquisition, are K&C (Newbury)
Limited, K&C (Coleherne) Limited, K&C (Osprey) Limited, KCR
(Kite) Limited and KCR (Southampton) Limited.
Leases
The costs of operating leases of low value items and those with
a short term at inception are recognised as incurred.
2. Operating segments
The Group is involved in UK property ownership and letting and
is considered to operate in a single geographical and business
segment.
3. Operating loss
The loss before taxation is stated after charging:
Six months Six months
ended ended Year ended
31 December 31 December 30 June
2019 2018 2019 (audited)
GBP GBP GBP
Costs associated with
third party fundraising 300,835 167,817 407,616
Directors' remuneration 137,050 304,000 486,300
During the six months ended 31 December 2019, the Group incurred
costs of GBP300,835 relating to the Torchlight Fund transaction.
The transaction with Torchlight Fund LP was reported in detail in
the Circular (12 July 2019) and outlined in the year end accounts
to 30 June 2019 post balance sheet events.
During the period, the Company paid DGS Capital Partners LLP, a
business partly owned by Michael Davies, fees of GBP21,600 (2018:
GBP21,600) and Naylor Partners, a business owned by Russell Naylor,
fees of GBP20,000 (2018: GBPnil).
The directors are considered to be key management personnel.
4. Basic and diluted loss per share
Basic
The calculation of loss per share for the six months to 31
December 2019 is based on the loss for the period attributable to
ordinary shareholders of GBP2,510,682 divided by a weighted average
number of ordinary shares in issue.
The weighted average number of shares used for the six months
ended 31 December 2019 was 25,265,268 (June 2019 - 15,156,059)
(December 2018 - 13,658,423).
5. Lease arrangements
Six months Six months
ended ended Year ended
31 December 31 December 30 June
2019 2018 2019 (audited)
GBP GBP GBP
Expense relating to
short-term lease 16,813 13,616 31,282
============= ============= ======================
The total cash outflow relating to leases in the period amounted
to GBP16,813 (2018: GBP13,616).
At 31 December 2019 the Group is committed to GBP46,202 (2018:
GBP54,561) relating to leases classified as short term where the
right-of-use asset and corresponding lease liabilities are not
recognised in the statement of financial position.
6. Investment properties
Six months Six months
ended 31 ended 31 Year ended
December December 30 June
2019 2018 2019 (audited)
GBP GBP GBP
At start of period 23,923,000 26,695,000 26,695,000
Additions - - 24,732
Revaluations - 705,000 3,268
Disposals (538,000) (2,800,000) (2,800,000)
----------- ------------ ----------------
At end of period 23,385,000 24,600,000 23,923,000
=========== ============ ================
The investment properties were procured upon acquisition of
subsidiaries.
Investment properties were valued by professionally qualified
independent external valuers at the date of acquisition and were
recorded at the values that were attributed to the properties at
acquisition date. The investment properties were independently
valued at, or within three months of the financial year ended 30
June 2019. Fair value is based on current prices in an active
market for similar properties in the same location and condition.
The current price is the estimated amount for which a property
could be exchanged between a willing buyer and willing seller in an
arm's length transaction after proper marketing wherein the parties
had each acted knowledgeably, prudently and without compulsion.
Valuations are based on a market approach which provides an
indicative value by comparing the property with other similar
properties for which price information is available. Comparisons
have been adjusted to reflect differences in age, size, condition,
location and any other relevant factors.
The fair value for investment properties has been categorised as
a Level 3 inputs under IFRS 13.
The valuation technique used in measuring the fair value, as
well as the significant inputs and significant unobservable inputs
are summarised in the following table -
Fair Value Valuation Technique Significant Significant Unobservable
Hierarchy Inputs Used Inputs
Level Income capitalisation Adopted gross 3.29% - 5.39%
3 and or capital value yield
on a per square foot
basis
Adopted rate
per square foot GBP332 - GBP825
7. Share capital
31 December 31 December 30 June
Allotted, issued and fully paid: 2019 2018 2019 (audited)
Nominal
Number: Class: value: GBP GBP GBP
27,569,631 Ordinary GBP0.10 2,756,963 1,579,178 1,579,178
- Restricted preference GBP0.10 - 450,000 450,000
------------ ------------ ----------------
2,756,963 2,029,178 2,029,178
============ ============ ================
At 1 July 2019, the Company had 15,791,777 Ordinary shares of
GBP0.10 each and 4,500,000 Restricted Preference shares of GBP0.10
each in issue.
On 6 August 2019, the Company converted 1,730,765 Restricted
Preference shares to Ordinary shares. The remaining 2,769,235
Restricted Preference shares were cancelled.
On 6 August 2019, 10,047,089 Ordinary shares of GBP0.10 each
were allotted, at a premium of GBP0.35 per share. 9,000,000 of the
shares were issued to Torchlight Fund LP. Of the remaining
1,047,089 shares issued, 1,024,867 were issued to settle
liabilities of the Company.
The Ordinary shares carry no rights to fixed income.
8. Share-based payments
The expense recognised during the period is shown in the
following table:
Six months Six months
ended 31 ended 31 Year ended
December December 30 June
2019 2018 2019 (audited)
GBP GBP GBP
Expense arising from
restricted preference
shares 1,599,678 1,180,918 1,387,441
=========== =========== ================
Restricted Preference shares:
Restricted Preference shares were granted to certain directors
and other senior managers on 2 February 2017, 24 April 2017 and 5
September 2018. Upon the achievement by the Group of certain
milestones, the Restricted Preference shares were convertible into
Ordinary shares at GBP0.10 each. On 6 August 2019, in order to
simplify the share structure of the Company, the Company entered
into an agreement with the holders of the Restricted Preference
Shares whereby 5 out of every 13 Restricted Preference Shares held
would be converted into Ordinary Shares. The remaining Restricted
Preference Shares were acquired by the Company for nil
consideration and subsequently cancelled.
The executive directors' interests in Restricted Preference
shares were as follows:
Granted Balance Balance
Balance at at
at 31 December 30 June Gifted 31 December
2018 Converted 2019 Converted to Company 2019
Dominic
White 1,500,000 265,357 (500,000) 1,265,357 (486,675) (778,682) -
Timothy
James 960,000 265,357 (320,000) 905,357 (348,214) (557,143) -
James
Cane 30,000 10,000 (10,000) 30,000 (11,538) (18,462) -
Oliver Vaughan 810,000 265,357 (270,000) 805,357 (309,752) (495,605) -
Timothy
Oakley 300,000 265,357 (100,000) 465,357 (178,983) (286,374) -
Christopher
James 600,000 214,286 (200,000) 614,286 (236,263) (378,023) -
Employees 300,000 214,286 (100,000) 414,286 (159,340) (254,946) -
--------------- --------- ----------- ----------- ----------- ----------- ------------
Total 4,500,000 1,500,000 (1,500,000) 4,500,000 (1,730,765) (2,769,235) -
=============== ========= =========== =========== =========== =========== ============
The principal inputs and assumptions used in the calculation of
the share-based payment charge are unchanged from those detailed in
the consolidated financial statements for the year ended 30 June
2019. Due to the conversion and cancellation of the Restricted
Preference Shares, the vesting period was accelerated and therefore
the share-based payment charge has been recognised fully in these
interim financial statement.
9. Convertible Loan Notes
As at 1 July 2019, the Company had GBP200,000 convertible loan
notes in issue. On 22 August 2019, GBP100,000 of the loan notes
were converted into 222,223 Ordinary shares at an issue price of
GBP0.45 per share. At 31 December 2019, the Company had GBP100,000
convertible loan notes still in issue.
10. Related Party Transactions
On 24 June 2018, the Company entered into a loan agreement
arranged by DGS Capital Partners LLP, a limited liability
partnership in which Michael Davies is a member, with certain
investors. The loan was for GBP1,475,000 and was subject to an
interest rate of 12 per cent per annum. The capital and interest
outstanding at 30 June 2019 was GBP1,520,826. Interest and charges
charged in the period to 31 December 2019 totalled GBP33,485. The
loan and outstanding interest were repaid on 22 August 2019. The
repayment consisted of GBP1,425,000 cash and GBP129,311 of Ordinary
shares.
During the 2019 financial year, Oliver Vaughan, a director of
the Company, loaned the Company GBP150,000. The loan was unsecured
and was due for repayment on 15 May 2019. The loan was extended in
June 2019 for which a fee of GBP10,000 was charged to the Company.
The total liability at 30 June 2019 totalled GBP160,000. The loan
was interest free. GBP110,000 of the loan was repaid via the issue
of Ordinary shares in the Company on 6 August 2019. The remaining
GBP50,000 was repaid on 8 August 2019.
During the 2019 financial year, the Company issued GBP50,000 of
convertible loan notes to Kimono Investments Limited, an entity in
which Oliver Vaughan's children have a financial interest. At 30
June 2019 the total loan notes and interest outstanding totalled
GBP52,616. Interest charged in the period to 31 December 2019 was
GBP340. The principal loan was repaid on 22 August 2019. The
repayment consisted of GBP50,000 of Ordinary shares.
During the 2019 financial year, the Company issued convertible
loan notes to White Amba Pension Scheme of GBP25,000. At 30 June
2019 the total loan notes and interest outstanding totalled
GBP26,050. Interest charged in the period to 31 December 2019 was
GBP170. The principal loan was repaid on 22 August 2019. The
repayment consisted of GBP25,000 of Ordinary shares.
During the 2019 financial year, the Company issued convertible
loan notes to Katie James, relative of Timothy James of GBP25,000.
At 30 June 2019 the total loan notes and interest outstanding
totalled GBP26,050. Interest charged in the period to 31 December
2019 was GBP170. The principal loan was repaid on 22 August 2019.
The repayment consisted of GBP25,000 of Ordinary shares.
During the 2019 financial year, Timothy Oakley, a director of a
number of subsidiary companies, received remuneration of GBP30,200
(2018 - GBP30,000). GBP15,000 of this remuneration was included in
accruals at 30 June 2019. During the 2019 financial year Timothy
Oakley also loaned the Company GBP50,000 as part of the loan
arranged by DGS Capital Partners LLP, as detailed above. The loan
and outstanding remuneration were repaid on 22 August 2019. The
repayment consisted of GBP62,375 of Ordinary shares.
During the 2019 financial year, Christopher James, a director of
a number of subsidiary companies, received remuneration of
GBP51,200 (2018 - GBP14,000). GBP44,000 of this remuneration was
included in accruals at 30 June 2019. This was settled during the
period to 31 December 2019. Part of the settlement consisted of the
issue of GBP6,050 of Ordinary shares.
11. Post Balance Sheet Events
The following material events have occurred subsequent to 31
December 2019 to the date when these interim condensed consolidated
financial statements were authorised for issue -
-- On 12 February 2020, the Group completed a GBP7.9m
refinancing of its Coleherne Road, Ladbroke Grove and Lomond court
assets. The refinancing has a term of 25 years, a five-year fixed
interest rate and is secured on the assets concerned. The interest
rates relating to these properties reduces from 3.75% per annum to
3.5% per annum.
This transaction delivered GBP2.9m of free capital to KCR post
repayment of the existing bank facility providing KCR with a strong
liquidity position.
-- In January 2020, an outbreak of a novel coronavirus, now
classified as COVID-19, was detected in China's Hubei province.
During the following months, COVID-19 has spread steadily
throughout the World and on 11 March 2020, The World Health
Organisation ("WHO") declared the outbreak a global pandemic. At
the date of signing of this report, confirmed cases were in excess
of 460,000 and deaths caused by COVID-19 were in excess of 20,000.
In order to stem the spread of the virus, Governments around the
World are taking drastic steps which include compulsory closure of
various businesses, shops and schools and are also heavily
restricting of movement of people.
-- Due to the rapid development of COVID-19, the degree of
uncertainty involved and the unprecedented nature of the challenges
posed by the coronavirus situation, the Directors are of the
opinion that it is too soon to quantify what financial impact that
the COVID-19 pandemic will cause but are monitoring the situation
closely.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LQLLLBXLBBBL
(END) Dow Jones Newswires
March 27, 2020 03:00 ET (07:00 GMT)
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