TIDMMKT
RNS Number : 6365Q
Market Tech Holdings Limited
01 December 2016
Market Tech Holdings Limited
("Market Tech" or the "Company" or "the Group")
Interim results
Strong financial and operational growth driven by successful
asset management initiatives
1 December 2016. Market Tech (LSE: MKT), the main market listed
company which owns, manages and is developing a unique 16 acre
estate of office, retail, leisure and living spaces centred around
the iconic Camden Markets, and supported by digital technologies,
announces half year results for the six months ended 30 September
2016.
Financial highlights
-- 8.4% increase in property portfolio valuation to GBP1,070m,
including a revaluation gain of 4.5%, driven by asset management
and continued leasing success across the Market Tech estate
-- 5.9% increase in Net Asset Value to GBP824.6m, representing a
5.5% increase to 175.4p on a per share basis
o EPRA NAV* up 6.4% to GBP771.6m representing a 6.1% increase to
164.2p per share
-- Total revenue increased 14.1% to GBP71.0m (H1 2015: GBP62.2m)
o 29.0% increase in Property revenue to GBP17.8m (H1 2015:
GBP13.8m)
o 9.9% increase in Digital revenue to GBP53.2m (H1 2015:
GBP48.4m)
-- 24.5% increase in adjusted EBITDA** to GBP13.2m (H1 2015:
GBP10.6m) of which GBP8.8m and GBP4.4m were attributable to the
property and digital businesses respectively
-- Profit before tax of GBP43.0m (H1 2015: GBP10.1m; FY 2016:
GBP12.5m) resulting in basic earnings per share of 8.9p (H1 2015:
1.8p)
-- Cash and cash equivalents of GBP179.1m (31 March 2016: GBP149.4m)
-- Loan-to-value of 28.4% (FY 2016: 25.5%)
Operational highlights
-- Strong demand for office and retail space across the estate
with 15 new leases, 10 lease renewals and 32 short-term market
tenancies, representing GBP3.7m of annualised rental income agreed
during the period
-- A further GBP3.6 million added since the period end
comprising 13 short-term market tenancies, 12 renewals and 14 new
leases, including a new Dr Martens concept store
-- 10.5% increase in passing rent to GBP35.8m (31 March 2016:
GBP32.4m) and up 3.2% excluding co-working
-- 4.9% increase in ERV to GBP84.0m, with investment portfolio up 11.8% to GBP38.7m
-- Occupancy across the investment portfolio strong at 93.6%
with a Weighted Average Unexpired Lease Term ("WAULT") of 5.3
years
-- Successful launch of the second phase of co-working with an
additional 650 desks and occupancy now at 88%
-- Hawley Wharf development on track, new school handed over to
Camden, with marketing due to commence in H2
-- Planning approval granted, subject to section 106 for a 2,600
sq ft extension of 251-259 Camden High Street
-- Completed the GBP35m (excluding stamp duty) acquisition of a
mixed-use development with planning consent at 101 Camley Street,
comprising 22,700 sq ft office space as well as 91 private and 30
affordable/shared ownership apartments.
* EPRA NAV is defined as the net assets of the property
operating segment adjusted to exclude derivatives and deferred tax
liabilities on property revaluations
**Adjusted EBITDA is defined as earnings before interest, taxes,
depreciation and amortisation, adjusted for fair value investment
property movements, share based payment charges, exceptional items
and foreign currency exchange gain/(loss).
Commenting on the results, Charles Butler, Market Tech's CEO,
said: "With over 50 new leases agreed across our retail, food and
beverage and office assets, which have helped improved the rental
tone on our estate, as well as strong demand and a long waiting
list for our market stalls, where despite being short term leases
the average stay is now around 3.5 years, we can clearly see that
our asset management initiatives and our strategy to improve the
appeal of the wider estate are working. This coupled with the
growth of our co-working business, has led to a strong set of
results for the first half with a 10% improvement in passing rent,
a 5.5% increase in NAV per share and an 8.4% uplift in the value of
our property portfolio to GBP1.1 billion.
"This strong performance also underlines the resilience and
ongoing appeal of our Camden estate, in spite of a marked increase
in political and economic uncertainty, most notably following the
result of the EU referendum. While, 28 million people already visit
the Camden every year(1) we are committed to expanding its appeal
to attract more Londoners and people who want to live, work and
play in the area, while maintaining the area's important cultural
heritage and integrity. Furthermore, with leasing activity due to
commence at our flagship Hawley Wharf mixed use development early
next year, we look to the future with increased confidence."
For further information, please contact:
FTI Consulting
Richard Sunderland, Claire Turvey
+44 (0) 20 3727 1000, markettech@fticonsulting.com
(1) Source TFL data based on 2013 figures for annual entry and
exit for Camden Town and Chalk Farm Road tube stations
About Market Tech
Market Tech combines the iconic Camden Market real estate assets
with digital technology to deliver a living, working, retail and
leisure environment. The Company owns approximately 16 acres of
real estate assets in Camden, including the Stables Market; Union
Street Market, (also known as Buck Street Market); Camden Lock
Market; and Hawley Wharf, (formerly known as Camden Lock Village).
It also owns separate real estate assets on Camden High Street;
Kentish Town Road; properties on Jamestown Road, (including the
Camden Wharf Building); The Interchange Building on Oval Road,
Utopia Village in Primrose Hill, 1-11 Hawley Crescent and 49 Chalk
Farm Road.
The Company owns three e-commerce businesses, referred to as
Market Tech Digital. These are Stucco Media, an e-commerce
marketing platform, Glispa, a Berlin-based mobile marketing
business and Fiver, a B2C online fashion retailer.
www.market-tech.com
Chief Executive's statement
I am pleased to announce a strong set of interim results for the
six months ended 30 September 2016 which clearly demonstrate the
progress we are making with our asset management activities and
underline that our strategy for the wider estate is working.
Furthermore, despite significant political and economic
uncertainty during the period, most notably following the result of
the EU referendum, we have proved the ongoing resilience and appeal
of our assets by delivering a 10.5% increase in passing rent, a net
revaluation gain of 4.5% and an increase in Group net asset value
to GBP824.6m or 175.4p per share, an increase of 5.9% and 5.5%
respectively.
Our property portfolio valuation has increased by 8.4% during
the period to GBP1,070m with retail and offices performing very
strongly leading on from the asset management initiatives started
in the second half of the prior year. In line with the wider trend
in the London housing market, we have seen a slight fall in
residential valuations across our portfolio, however the impact of
this on the Group is minimal due to our current relatively small
exposure to this asset class.
Passing rent on our investment portfolio at the period end stood
at GBP30.1m with a further GBP8.6m of reversionary potential. When
combined with the potential ERV development uplift this takes our
total ERV to GBP84.0m, an increase of 4.9% since 31 March 16.
We have continued to see strong footfall within the markets and
with the refurbishment of the Stables Market listed buildings
almost complete we are experiencing strong tenant demand with over
150 tenant applications per month. This is a real endorsement of
the strength and attraction of the Camden market brand and was
again evidenced this week with the announcement that Dr Martens has
signed a 10 year lease for its European head office and are
planning a flagship experiential store within Stables Market. This
leasing is a superb example of our ability to drive value from our
assets whilst attracting tenants which have a natural affinity or
connection to Camden's culture and heritage.
We believe the demand for high quality flexible office space,
which encourages collaboration and is further supported by business
and community focussed events, will continue to increase
significantly. This belief is supported by the demand for desks
within our Interchange co-working business which continues to bring
SMEs, high growth businesses and fantastic new entrepreneurs to
Camden and contracted occupancy is now at 88%, taking us further
towards our goals of creating a truly world class work, live and
play destination and allowing us to achieve higher average rents
per square foot than from traditional office space.
Market Tech continues to embrace technology within its real
estate business and we now have over 50% of retailers within
Stables and Camden Lock Market using the integrated EPOS module we
supplied them. We have also developed and launched a new co-working
platform to enable us to drive new customers to our spaces and not
only control more of the complete customer journey but better
understand the demands and needs of prospective customers.
Total revenue from Market Tech digital subsidiary companies has
increased 9.9% to GBP53m with EBITDA increasing 12.8% to GBP4.4m.
We continue to operate and grow these companies while considering
the best options to maximise long term shareholder value.
We look forward to the second half of the year where we will
continue to drive increased rents and value from our investment
portfolio and commence our letting activity on the very exciting
landmark Hawley Wharf development.
Valuation Report
We instructed Jones Lang LaSalle to value our property assets at
30 September 2016, in accordance with the RICS Valuation -
Professional Standards 2014 (the "Red Book"), on the basis of fair
value.
Valuation bridge
GBPm
================================ ========
Valuation at 31 March 2016 987.8
Revaluation surplus 44.7
Capital expenditure 35.1
Acquisitions 2.8
================================ ========
Valuation at 30 September 2016 1,070.4
================================ ========
The table above includes GBP8.6m (31 March 2016: GBP8.6m) of
group-occupied space categorised as Property, Plant and
Equipment
At 30 September 2016, the total value of the property portfolio
was GBP1,070.4m, an increase of 8.4% from GBP987.8m at 31 March
2016. A revaluation surplus of GBP44.7m, an increase of 4.5% in
portfolio valuation, was generated which compares favourably with
the IPD Capital Growth Index (all London - all property), which,
for the same period, showed a reduction of 1.2%.
Valuation by property asset
September March
2016 2016
Valuation Primary use GBPm GBPm Change
========================== ==================== ========== ====== =======
Investment Assets
Mixed Use - Retail
Stables Market Led 287.4 249.6 15.1%
Mixed Use - Retail
Union Street Market Led 32.5 30.2 7.6%
Mixed Use - Office
10 Jamestown Road Led 29.0 27.2 6.6%
31 Kentish Town Road Residential 9.8 10.2 (3.9%)
Mixed Use - Office
Camden Wharf Led 58.1 51.2 13.5%
The Interchange Building Office 60.5 58.1 4.1%
49 Chalk Farm Road Retail 5.0 5.0 0.0%
Herbrand Street Office 59.2 56.9 4.0%
Mixed Use - Office
1-11 Hawley Crescent Led 29.1 29.1 0.0%
Utopia Village Office 45.6 44.0 3.6%
Mixed Use - Retail
Other Led 8.3 5.5 50.9%
========================== ==================== ========== ====== =======
624.5 567.0 10.1%
Development Assets
251-259 Camden High
Street Retail 14.3 14.3 0.0%
Mixed Use - Retail
Camden Lock Market Led 120.8 125.0 (3.4%)
Mixed Use - Retail
Hawley Wharf Led 310.8 281.5 10.4%
========================== ==================== ========== ====== =======
445.9 420.8 6.0%
1,070.4 987.8 8.4%
=============================================== ========== ====== =======
Property Summary - Yielding Assets
The table below shows our yielding assets portfolio, which
comprises the whole estate bar Hawley Wharf which is currently
under development and not generating any rent.
The passing rent on our yielding property portfolio continued to
grow during the period as our focussed asset management strategy
begins to bear fruit. Totalling GBP35.8m at 30 September 2016, this
represented an increase of 10.5% from 31 March 2016 and,
importantly, growth of 10.2% on a like-for-like basis, with
occupancy across the portfolio of 93.6%. %. It is important to note
that, the average market trader's occupancy now stands at 3.4
years, which coupled with the fact that we receive over 150
applications per week for market stalls, underlines the highly
visible and predictable nature of this portion of our rental
income.
Total NLA at Stables Market as at 30 September 2016 was 222,000
sq ft, of which approximately 43,200 sq ft is attributable to the
Group's co-working business.
Passing Rent NLA Average
pa rent Occupancy
GBPm k sq GBP/ sq
ft ft
========================== ============= ================= ======== ============
Investment assets
Stables Market(1) 16.2 222.0 82.0 88.9%
Union Street Market 2.0 6.8 311.7 96.6%
10 Jamestown Road 1.4 28.3 48.1 100.0%
31 Kentish Town Road 0.3 10.1 32.6 100.0%
Camden Wharf 2.2 49.5 43.8 100.0%
The Interchange Building 1.9 65.0 29.0 100.0%
49 Chalk Farm Road 0.2 6.2 37.5 100.0%
Herbrand Street 2.8 66.4 42.2 100.0%
1-11 Hawley Crescent 0.9 25.0 34.5 100.0%
Utopia Village 1.8 45.2 50.4 79.5%
Other 0.4 13.4 28.2 100.0%
Development assets
251-259 Camden High
Street 0.5 4.4 112.9 100.0%
Camden Lock Market 5.2 48.0 118.3 92.9%
35.8 590.3 64.8 93.6%
========================== ============= ================= ======== ============
(1) Includes co-working
Central London Comparable Rent
As detailed in the tables below, rental levels across the
portfolio continue to compare favourably with other central London
locations, demonstrating both the appeal in affordability of our
space and the potential for future rental growth as evidenced by
the GBP8.6m gap between passing rent and ERV (excluding
developments) across the Group's property portfolio. Within the
retail sector, Market Tech's average rent stands at GBP96 per sq ft
while comparable prime rents range from GBP260 to GBP1,475 per sq
ft elsewhere in London. At the same time, prime office rents across
London range from GBP70 to GBP120 per sq ft, compared to an average
prime rent across Market Tech's portfolio of GBP38 per sq ft. At
the same time the average market retail rent remains affordable at
GBP96 per sq ft.
Retail
rent Office rent
GBP/sq
ft GBP/sq ft
======================= ======= ================== ============
Covent Garden - James
Street 1,475 West End 120
Oxford Street 925 Kings Cross 80
Carnaby Street 515 City 70
Marylebone 435 Clerkenwell 70
Camden High Street
- Market Tech 390 Shoreditch 70
Borough 260
======================= ======= ================== ============
Market Tech Prime
Zone A - Market Tech 215 Camden 60
======================= ======= ================== ============
Retail Rent - Comparable rents are based on prime rental rates
achieved. Source: CBRE. Market Tech High St rent based on current
prime passing Zone A rate.
Office Rent - Comparable rents are based on prime rental rates
achieved. Source CBRE.
Property Summary - ERV Gap & Yield
Passing rent ERV ERV gap
pa GBPm GBPm Equivalent
GBPm yield
Investments Assets
Stables Market 16.2 20.6 4.4 5.3%
Union Street Market 2.0 2.2 0.2 5.1%
10 Jamestown Road 1.4 1.5 0.1 4.8%
31 Kentish Town Road 0.3 0.3 0.0 n/a
Camden Wharf 2.2 3.0 0.8 4.6%
The Interchange Building 1.9 3.3 1.4 4.8%
49 Chalk Farm Road 0.2 0.2 0.0 4.1%
Herbrand Street 2.8 3.5 0.7 4.7%
1-11 Hawley Crescent 0.9 1.1 0.2 4.8%
Utopia Village 1.8 2.6 0.8 5.1%
Other 0.4 0.4 0.0 4.9%-6.0%
========================== ============= ====== ======== ===========
30.1 38.7 8.6 5.0%
Development Assets
Hawley Wharf 0.0 30.2 30.2 5.5%
Camden Lock Market 5.2 14.2 9.0 5.2%
251-259 Camden High
Street 0.5 0.9 0.4 4.0%
========================== ============= ====== ======== ===========
5.7 45.3 39.6 5.4%
As at 30 September
2016 35.8 84.0 48.2 5.2%
As at 31 March 2016 32.4 80.1 47.6 5.2%
========================== ============= ====== ======== ===========
Property Summary - Weighted Average Unexpired Lease Term -
(WAULT)
Property WAULT
(years)
============================ ========
Stables Market 5.7
Camden Lock Market 5.1
Union Street Market 2.0
10 Jamestown Road 9.2
31 Kentish Town Road 0.6
251-259 Camden High Street 0.1
Camden Wharf 3.6
The Interchange Building 10.2
49 Chalk Farm Road 4.8
Herbrand Street 3.3
1-11 Hawley Crescent 8.9
Utopia Village 3.0
Other 4.4
============================ ========
Total 5.3
============================ ========
The above table relates to full repairing and insuring (FRI) and
commercial leases and excludes the flexible market occupational
licences. Commercial and FRI leases accounted for 58.7% of passing
rent at 30 September 2016 compared to 56.5% at 31 March 2016.
Hawley Wharf - Reconciliation of Gross Development Value to Red
Book Value
Hawley Wharf
GBPm
========================= =============
Gross Development Value 626.9
Net Realisation 590.1
Construction Costs 150.3
Finance Costs 33.6
Professional Fees 20.2
Developers Profit 65.6
Other Costs 9.6
========================= =============
Red Book Value 310.8
========================= =============
Operating Review
The following section sets out how each asset has progressed in
the period and our plans to create further value. As a result of
acquisitions and our asset management and development activities
the key statistics relating to our portfolio at the period end were
as follows:
September 2016 Change from March
2016
--------------------- --------------- ------------------
Value (GBPm) 1,070.4 8.4%
NLA (k sq ft) 590.3 5.1%
Passing Rent (GBPm) 35.8 10.5%
ERV (GBPm) 84.0 4.9%
Equivalent Yield 5.2% -
Co-working desks 900 260.0%
------------------
Units 1,063
--------------------- ---------------
Stables Market
Key statistics
September 2016 Change from March
2016
--------------------- --------------- ------------------
Value (GBPm) 287.4 15.1%
NLA (k sq ft) 222.0 13.8%
Passing Rent (GBPm) 16.2 8.7%
ERV (GBPm) 20.6 17.0%
Equivalent Yield 5.3% (0.1%)
Co-working desks 900 260.0%
------------------
Units 496
--------------------- ---------------
Stables Market NLA of 222,000 sq ft includes 43,200 sq ft
relating to co-working.
Stables Market is a large mixed-use property with 179,000 sq ft
of current net lettable area, which includes, retail, market,
restaurant and leisure space, as well as being home to our Triangle
and Atrium co-working offices. The Stables Market buildings
previously had 43,200 sq ft of vacant and redundant space above the
main retail and leisure areas, which has now been developed into
office space for the Group's co-working business with the second
phase opened during May 2016.
We are currently delivering the initial phases of a tenant mix
plan that will focus on driving the sales performance of new and
existing occupiers by creating clusters of interest that encourage
visitor conversion and attract domestic and local repeat spend.
This plan also includes the introduction of renovated areas that
will be set aside for new market stalls, helping us to attract the
very best small traders across London and further differentiating
Camden from more generic shopping destinations. To monitor and
ensure the success of this strategy we are using our Minodes
analytics system to track changes in customer behaviour.
The effects of this strategy are beginning to manifest as demand
and rents increase. The impact of the mixed strategy is further
evidenced by our Minodes analytics showing a 23% increase in
returning visitors from April to September 2016. Since year end the
passing rent on Stables Market has increased by GBP1.3m from
GBP14.9m to GBP16.2m. Stables Market ERV has also increased by
GBP3.0m as the build-up of new rental evidence and strong occupier
demand take effect.
To enhance the trading performance of our tenants, we continue
to focus on ways of increasing the volume of domestic visitors
utilising Stables Market as well as the entire estate throughout
the day. The expansion of our co-working platform in Stables Market
plays an important role in this process.
We are particularly focused on improving our all-day food and
beverage offer, to serve our office and domestic shopper community
and support our event and evening economy. Since the year end we
have signed 16 food and beverage operators within Stables Market as
we continue to improve the food offer.
The delivery of our retail strategy has also commenced and we
have completed our first flagship letting to Dr Martens with a
further 5 units under offer.
The extensive refurbishment of our listed buildings is now
complete, save for the high-level terrace onto Chalk Farm Road
Building which will be complete by the end of December 2016. These
works will help us to improve the shopper experience, increase
dwell time and attract high-quality occupiers through the provision
of attractive, functional and well-configured units.
To benefit from these upgrades, we are, where appropriate,
agreeing base rent and revenue share structures with operators, to
ensure we are aligned with their success.
Other asset management planning and market initiatives we have
underway are designed to improve permeability and encourage
footfall and visitor flow between and through Stables Market and
the adjacent Camden Lock Market, thereby improving the trading
potential for our tenants.
Camden Lock Market
Key statistics
September 2016 Change from March
2016
--------------------- --------------- ------------------
Value (GBPm) 120.8 (3.4%)
NLA (k sq ft) 48.0 -
Passing Rent (GBPm) 5.2 8.3%
ERV (GBPm) 14.2 -
Equivalent Yield 5.2% -
------------------
Units 296
--------------------- ---------------
Camden Lock Market is an existing yielding market asset, with
both short term asset management and medium-term development uplift
potential.
We recently re-opened our West Yard Food Market under the
management of street-food specialists KERB, delivering significant
improvements to the customer journey and net revenue. Income since
the August launch to 31 October 2016 is up 28% on a like for like
basis.
We have also delivered wider tenant mix and layout improvements
to Middle Yard and Market Hall, renewing 15 shop leases and
introducing 60 new market-stall traders. This has delivered an
increase in overall net income of GBP0.2m and helped improve the
trading performance of our traders.
Following the success of KERB at Camden Lock Market we are also
finalising designs to reconfigure the stall layout on Camden Lock
Place and Middle Yard and expect to drive significant uplift in
trading and revenues.
We were granted planning permission in early 2016 for a
mixed-use market, retail, office, leisure and flexible spaces,
representing an increase from 48,000 sq ft to circa 98,000 sq
ft.
Our current plan is to start phase 1 works in 2017, comprising
some simple asset management initiatives which primarily involve
utilising currently unused space. Phase 2, which comprises the main
development project is currently scheduled to commence following
delivery of Hawley Wharf so as to ensure that two major sections of
our estate, and Camden as a major tourist destination, are not
taken off line at the same time. Although we have added some risk
cost to the existing model, the professional team are working on
improving the scheme and value engineering the project to maximise
income and reduce cost. This exercise should be finished during Q2
2017.
Union Street Market
September 2016 Change from March
2016
--------------------- --------------- ------------------
Value (GBPm) 32.5 7.6%
NLA (k sq ft) 6.8 -
Passing Rent (GBPm) 2.0 -
ERV (GBPm) 2.2 4.8%
Equivalent Yield 5.1% -
------------------
Units 199
--------------------- ---------------
We see a significant future uplift in the value of this asset
and are analysing ways to maximise this through development. We are
continuing to work with London Underground to coordinate proposals
with the works planned for the tube extension.
In parallel, we are working on a temporary improvement scheme,
until such time as London Underground certainty is achieved, which
is expected to be delivered during 2017.
The Interchange Building
Key statistics
September 2016 Change from March
2016
--------------------- --------------- ------------------
Value (GBPm) 60.5 4.1%
NLA (k sq ft) 65.0 -
Passing Rent (GBPm) 1.9 -
ERV (GBPm) 3.3 6.5%
Equivalent Yield 4.8% -
------------------
Units 1
--------------------- ---------------
The Interchange Building is an iconic warehouse-style office
building overlooking the Canal. The building provides 65,000 sq ft
of accommodation and is currently let in its entirety to Associated
Press, with 10 years remaining on the lease.
We expect to see significant growth on the current passing rent
of GBP29 per sq ft in the approaching December 2016 rent review. To
ensure this is achieved, we have been focusing on setting
comparable evidence within our portfolio.
Camden Wharf
Key statistics
September 2016 Change from March
2016
--------------------- --------------- ------------------
Value(GBPm) 58.1 13.5%
NLA (k sq ft) 49.5 -
Passing Rent (GBPm) 2.2 37.5%
ERV (GBPm) 3.0 11.1%
Equivalent Yield 4.6% (0.1%)
------------------
Units 6
--------------------- ---------------
This investment asset is connected to our building on Jamestown
Road. It has retail, restaurant and leisure space on the ground
floor, with tenants including All Saints and Wetherspoon and
offices on the first to third floors.
During the period, we let the vacant third floor office and
following the period end we also agreed the surrender of the first
and second floors and simultaneously signed a new 10 year lease to
Dr Martens. Both leases were signed at a significant premium to the
previous passing rent and ahead of March 16 ERV.
The All Saints November 2015 rent review was agreed following
the period a 20% increase on the March 2016 ERV. The evidence set
on our pre-lets for 251-259 High Street played a critical role in
achieving this settlement.
1-11 Hawley Crescent
Key statistics
September 2016 Change from March
2016
--------------------- --------------- ------------------
Value (GBPm) 29.1 -
NLA (k sq ft) 25.0 -
Passing Rent (GBPm) 0.9 -
ERV (GBPm) 1.1 -
Equivalent Yield 4.8% -
------------------
Units 7
--------------------- ---------------
This is a mixed office and residential building in the heart of
Camden Town, opposite MTV and behind the planned Camden Town
Underground extension. It comprises 19,700 sq ft of office space on
the basement, first and second floors, which are let to the Open
University, and six residential units on the third and fourth
floors.
The current rent passing on the office space equates to GBP35
per sq ft and we expect to achieve an increase on this level at the
approaching April 2017 rent review.
10 Jamestown Road
Key statistics
September 2016 Change from March
2016
--------------------- --------------- ------------------
Value (GBPm) 29.0 6.6%
NLA (k sq ft) 28.3 -
Passing Rent (GBPm) 1.4 -
ERV (GBPm) 1.5 15.4%
Equivalent Yield 4.8% -
------------------
Units 6
--------------------- ---------------
This mixed-use asset comprises 28,300 sq ft of retail, office
and residential accommodation.
Our asset management strategy is again focused on delivering
evidence within our portfolio to increase leisure and office rents
at review during 2017. The offices are currently let at GBP32 per
sq ft with significant potential for uplift.
31 Kentish Town Road
Key statistics
September 2016 Change from March
2016
--------------------- --------------- ------------------
Value (GBPm) 9.8 (3.9%)
NLA (k sq ft) 10.1 -
Passing Rent (GBPm) 0.3 -
ERV (GBPm) 0.3 -
Equivalent Yield N/A N/A
------------------
Units 14
--------------------- ---------------
This asset comprises 14 apartments under one corporate lease
expiring in 2017. We are currently in discussions with the tenant
to renew this lease and expect to achieve an increase in rent,
whilst at the same time exploring other options that may allow us
to unlock further value from this well located residential
asset.
Utopia Village, Chalcot Road
Key statistics
September 2016 Change from March
2016
--------------------- --------------- ------------------
Value (GBPm) 45.6 3.6%
NLA (k sq ft) 45.2 -
Passing Rent (GBPm) 1.8 125.0%
ERV (GBPm) 2.6 4.0%
Equivalent Yield 5.1% -
------------------
Units 28
--------------------- ---------------
Utopia Village is a 45,200 sq ft mews-style office complex. It
comprises 28 units that are predominantly occupied by technology,
music, event and fashion SMEs.
Our strategy is to combine an exciting occupier mix with a great
social and events platform to create a desirable community for SMEs
that will support short-term rental growth.
During the period, we have made significant advances in our
leasing and renewal progress, having increased contracted rent from
GBP0.8m to GBP1.8m and extended the average lease length to 3
years. Much of this success results from a concerted marketing
effort combined, encouragingly, with increasing interest from
tenants in our co-working facilities that have up scaled their
requirements in line with the growth of their businesses. This
further endorses our strategy of nurturing talent and being a key
facilitator of business growth in the Camden area.
We have introduced a new coffee shop which is being operated by
local coffee operator L'Absinthe. Going forward, we plan to
undertake a light refurbishment of our final vacant office units
and achieve fully let status by year end.
Camden Assembly - 49 Chalk Farm Road
Key statistics
September 2016 Change from March
2016
--------------------- --------------- ------------------
Value (GBPm) 5.0 -
NLA (k sq ft) 6.2 -
Passing Rent (GBPm) 0.2 -
ERV (GBPm) 0.2 -
Equivalent Yield 4.1% -
------------------
Units 1
--------------------- ---------------
We bought this famous music venue, which is positioned opposite
Stables Market, for GBP5 million in October 2015. In August 2016,
we surrendered the existing lease and signed the music and bar
operator, Columbo Group.
Columbo's new concept; the Camden Assembly, has transformed this
ailing venue and will play an important part in reinvigorating
Camden's music scene and evening economy.
7-11 Herbrand Street
Key statistics
September 2016 Change from March
2016
--------------------- --------------- ------------------
Value (GBPm) 59.2 4.0%
NLA (k sq ft) 66.4 -
Passing Rent (GBPm) 2.8 -
ERV (GBPm) 3.5 6.1%
Equivalent Yield 4.7% -
------------------
Units 1
--------------------- ---------------
We acquired this iconic office building for GBP56.0m (excluding
stamp duty of GBP2.2m) in March 2016. The building provides 66,406
sq ft of office accommodation over well configured floor plates and
is leased to McCann, the global advertising agency as its European
headquarters, on a lease expiring in 2020. It has strong
reversionary potential working off a low passing rent of GBP42 per
sq ft.
251-259 Camden High Street
Key statistics
September 2016 Change from March
2016
--------------------- --------------- ------------------
Value (GBPm) 14.3 -
NLA (k sq ft) 4.4 -
Passing Rent (GBPm) 0.5 -
ERV (GBPm) 0.9 -
Equivalent Yield 4.0% -
------------------
Units 5
--------------------- ---------------
This is an existing yielding asset, with five shops. We have
submitted a planning application to extend the retail accommodation
at ground and basement levels, to which we have received approval
subject to finalising the section 106 agreement. Work is expected
to commence in Q1 2017.
The development area of circa 7,000 sq ft represents an uplift
of circa 2,600 sq ft. We have signed one pre-let at record rents
for Camden High Street with a further three units under offer,
setting a record zone A rent of GBP420 per sq ft. The final unit is
being held back for later stage marketing to maximise revenues.
101 Camley Street
On 15 November 2016 we completed the GBP35.0m (excluding stamp
duty) acquisition of 101 Camley Street which has planning consent
for a mixed-use development, including 22,700 sq ft gross internal
area of flexible commercial space and 91 private and 30
affordable/shared ownership apartments.
The consented scheme has now been fully reviewed and we believe
the scheme can be improved in order to release the maximum value
from site. These changes will:
-- create 12,000 sq ft extra lettable commercial space
-- increase the sellable residential area
-- reconfigure the positioning of the residential and affordable
apartments to seek to maximise value
In the meantime, the key programme dates are being achieved,
with the project on track for starting demolition in May 2017 for
completion by the end of 2019.
Hawley Wharf Development
Key statistics
Gross development value: GBP626.9m
Red book value: GBP310.8m (March 16: GBP281.5m)
ERV: GBP30.2m
Net lettable area: 383,000 sq ft
Hawley Wharf is Market Tech's flagship development and will
transform this prime canal side site into a mixed-use scheme
comprising a new market, retail units, restaurants, offices, an
art-house cinema, a food market, residential units and a school. In
total, it will provide approximately 550,000 sq ft of gross
development area, excluding three public piazzas.
In August 2016 we finalised the main construction contract with
Mace worth GBP181.0m. The total budget for the scheme including
demolition and professional fees is as follows:
Area Budget
------------------ ----------
Mace Contract Sum GBP181.0m
Demolition GBP3.0m
School GBP7.5m
Client Fees GBP19.0m
------------------ ----------
TOTAL GBP210.5m
Risk Allowance GBP10.0m
As at 30 September, expected costs to complete the project are
GBP150.3m.
Works are currently progressing on programme with the contract
programme dates for completion of each section as follows:
-- Building W/X opposite the school (Social, intermediate and market residential) April 2018
-- Building A1/A2 the Canal Side building (new market, office and restaurant) May 2018
-- Building C on Castlehaven Road (new market square, retail,
office and market residential) August 2018
-- Building D/E canal side on Kentish Town Road (Premium
residential with employment on lower levels) October 2018
Current construction progress at the end of November is as
follows:
-- Basement excavation is currently at 11 meters below ground at
building C (deepest basement), out of a total dig depth of
17.5M
-- Currently 290 construction workers onsite - peaking at 650 in Q4 2017
-- Number of trucks per day (soil-away) - average 60 trucks per
day peaking at 90 in August 2016.
-- 40,000 cubic meter of earth has been excavated (approx 65,000 tonnes).
-- 5 out of 6 tower cranes on site - 6th crane arrives early January 2017
-- First section of cladding commences December 2016
-- Residential building opposite the school is constructed up to
the 7th floor slab out of a total of 9 stories - 21m high out of
total 28m
-- Building C double height ground floor slab constructed - 9m out of 27m maximum height
-- Canalside market - basement fully excavated
-- There has been approximately 15,000 cubic metres of concrete
poured (circa 38,000 tonnes of concrete) out of approximately
50,000 cubic metres in total across the whole site (125,000 tonnes
total)
As part of the Hawley Wharf development the new Hawley Primary
School was successfully completed within the agreed budget and the
School opened for operation on 3 November 2016.
Full marketing of residential, retail and food and beverage due
to commence in the second half of the year.
Co-working
During the period, we successfully launched our second building,
the Atrium, as part of our co-working Interchange initiative.
Co-working, with currently 900 desks has grown to be an essential
part of our Camden place-making strategy, attracting growth
businesses to our estate and building a professional community in a
modern and creative working environment. Co-working has proved to
offer the opportunity to generate greater income by maximising
utilisation and efficiency of our office space.
Interchange currently offers 43,200 sq ft of flexible co-working
space for SMEs, entrepreneurs, creative and tech businesses in the
Triangle and Atrium in Stables Market. In addition, Utopia Village
with 45,200 sq ft provides 28 larger office spaces for
more-established companies that are attracted to the area or those
that might have grown out of the more flexible co-working space but
wish to retain access to the community. We are exploring potential
options to open further spaces, providing a further 250 desks.
The Atrium offers 650 desks and went live on 1 May 2016. The
Triangle and Atrium are now 88% let showing the strong demand for
co-working in Camden. Tenants include a broad variety of
fast-growing businesses such as Eve Mattresses, Parcelly and Osper,
as well as major and more established names such as KPMG and
Cisco.
Both the Triangle and Atrium offer flexible working spaces,
hot-desking and private offices to rent on a monthly rolling
contract. We have a strong 93% retention rate with our Interchange
members. With stable occupancy we are targeting a return in excess
of GBP80 per sq ft.
Rents are on a per desk basis and include rates, utilities,
service and use of common areas as well as free coffee and
beverages. Members benefit from a broad variety of community events
and service offerings.
Our most recent development is Nomad, a co-working sales and
community platform connecting over 150 co-working spaces across
London and providing additional sales for our interchange
co-working business while it allows to expand our expertise outside
of our estate.
Market Tech Digital
During the period, Market Tech Digital continued its previous
growth trends with revenue up 9.9% to GBP53.2m (H1 2016: GBP48.4m)
and EBITDA up 12.8% to GBP4.4m (H1 2016: GBP3.9m).
Market Tech Digital is under review to determine the best
strategy to maximise value and fit within the Group's core real
estate strategy.
Key highlights of Market Tech Digital during the period
include:
- Glispa's successful implementation of its native advertising
supply side platform as a main driver to strengthen its advertising
monetisation business and to enhance its future growth and
profitability
- A strategy to re-position Stucco Media and everything5pounds
into an integrated e-commerce business has been undertaken by the
Group's management. This will require additional capital investment
to accelerate growth and we are looking at a number of options that
will allow us to unlock this potential
Chief financial officer's review
Financial results
To provide more relevant measures of the recurring underlying
performance of the business, we present underlying income measures
on an adjusted basis to exclude the impact of exceptional items,
share based payments and foreign-exchange movements.
GBPm September September Change
2016 2015
(6 months) (6 months)
========================================== ============ ============ =======
Revenue 71.0 62.2 14%
Adjusted EBITDA 13.2 10.6 25%
Net gain from fair value adjustment
of investment property 44.7 16.4 173%
Basic adjusted EBITDA per share
from continuing operations attributable
to the owner of the parent 2.8p 2.5p 12%
========================================== ============ ============ =======
Total revenue generated was GBP71.0m, comprising GBP17.8m from
property operations and GBP53.2m from Digital operations. Adjusted
EBITDA grew 24.5% to GBP13.2m.
Property
GBPm September September Change
2016 2015
(6 months) (6 months)
===================================== ============ ============ =======
Revenue 17.8 13.8 29%
Adjusted EBITDA 8.8 6.7 31%
Net gain from fair value adjustment
of investment property 44.7 16.4 173%
===================================== ============ ============ =======
Property revenue benefited from 13% like-for-like growth in
passing rent before taking into account a number of assets which
were taken off-line in Stables Market. These assets are undergoing
refurbishment which removed GBP0.7m of passing rent, and will allow
us to capture increased ERV. The following table breaks out the
growth in passing rent, and shows the significant reversionary
potential within the estate and the opportunities that the
development programme will bring.
GBPm GBPm Change
================================ ====== =======
Passing rent at 31 March 2016 32.4
Like-for-like growth 4.0
Assets taken off-line (0.7)
Acquisitions 0.1
================================ ====== =======
Passing rent at 30 September
2016 35.8 10.5%
Under-rented 8.6
Development, on-site 30.2
Yielding, proposed development 9.4
================================ ====== =======
ERV at 30 September 2016 84.0 4.9%
================================ ====== =======
ERV increased 4.9% and includes the benefit of the developments
at Hawley Wharf, Camden Lock Market and Camden High Street, and
shows a gap of GBP48.2m to passing rent.
Costs remain well-controlled and showed a small decline to
GBP9.0m compared to H2 2016 despite an increase in direct operating
costs following the opening of our second co-working operation.
Digital
GBPm September September Change
2016 2015
(6 months) (6 months)
================== ============ ============ =======
Revenue 53.2 48.4 10%
Adjusted EBITDA* 4.4 3.9 13%
================== ============ ============ =======
The Digital business has performed well, with revenue up 10% and
EBITDA growing strongly, up 13%.
Glipsa purchased Avocarrot during the period for a total
consideration of GBP5.1m, and in addition we have invested GBP2.8m
in our digital businesses, which includes the development of Nomad,
our co-working sales and community platform.
Reconciliation of Adjusted EBITDA to Reported Earnings
GBPm September 2016 (6 months) September 2015 (6 months)
Adjusted Exceptional Total Adjusted Exceptional Total
============================= ========= ============ ====== ================ ============ ==========
EBITDA 13.2 - 13.2 10.6 0.0 10.6
Property revaluation - 44.7 44.7 - 16.4 16.4
Exceptionals - (1.5) (1.5) - (6.7) (6.7)
Share-based payments - (1.5) (1.5) - (0.1) (0.1)
Foreign exchange - 0.5 0.5 - (0.4) (0.4)
Depreciation & amortisation (1.1) (2.8) (3.9) (0.6) (2.0) (2.6)
============================= ========= ============ ====== ================ ============ ==========
Operating profit 12.1 39.4 51.5 10.0 7.2 17.2
Net finance costs (8.2) (0.2) (8.4) (6.2) (0.9) (7.1)
Share of loss from
associates (0.1) - (0.1) - - -
============================= ========= ============ ====== ================ ============ ==========
Profit before tax 3.8 39.2 43.0 3.8 6.3 10.1
Tax (0.9) 0.2 (0.7) (2.1) - (2.1)
Non-controlling interest (0.5) - (0.5) (0.4) - (0.4)
============================= ========= ============ ====== ================ ============ ==========
Earnings 2.4 39.4 41.8 1.3 6.3 7.6
============================= ========= ============ ====== ================ ============ ==========
The income statement gain on revaluation of the Group's property
portfolio was GBP44.7m.
Exceptional items have reduced significantly in comparison with
2015, and totalled GBP1.5m. GBP0.9m of costs related to the
reorganisation and restructuring undertaken during the year. Other
legal and professional expenses of GBP0.5m relate to certain costs
related to acquisitions.
Finance costs for the period totalled GBP8.4m, which includes
GBP5.4m debt interest and amortised fees expense (net of GBP2.4m
capitalised to the Hawley Wharf development) on the existing AIG
facility and GBP2.7m interest expense on the convertible loan
notes. Finance costs includes GBP3.8m of non-cash items.
Tax on the business' adjusted profits was GBP0.7m which related
to the Digital segment.
Profit after tax for the period ended 30 September 2016, after
deducting the minority interest attributable to the non-controlling
shareholder's interest in Glispa, was GBP41.8m. On an adjusted
basis, underlying earnings were GBP2.4m (September 2015:
GBP1.3m).
Balance Sheet
GBPm September March September
2016 2016 2015
============================== ========== ======== ==========
Property portfolio 1,070.4 987.8 866.7
Net debt (303.5) (252.1) (122.9)
Other assets and liabilities 57.7 43.2 33.2
Net assets 824.6 778.9 770.1
NAV per share 175.4p 166.3p 164.4p
============================== ========== ======== ==========
EPRA NAV* 771.6 724.9 727.8
EPRA NAV* per share 164.2p 154.7p 155.3p
============================== ========== ======== ==========
* EPRA NAV is defined as the net assets of the property
operating segment adjusted to exclude derivatives and deferred tax
liabilities on property revaluations (September 2016: GBP5.3m,
March 2016: GBP5.2m, September 2015: GBP3.6m).
EPRA NAV closed at GBP771.6m or 164.2p per share, up 6.4% and
6.1% on March 2016 respectively.
Net Asset Value grew to GBP824.6m, with the underlying driver
being a 4.5% revaluation gain, GBP35.1m of capital expenditure and
GBP2.8m property acquisition.
Net Asset Value GBPm p/share
================================= ====== ========
At 31 March 2016 778.9 166.3p
Adjusted EBITDA 13.2 2.8p
Interest (8.2) (1.7)p
Tax (0.9) (0.2)p
Revaluation gain 44.7 9.5p
================================== ====== ========
At 30 September 2016 before
exceptional and non-cash items 827.6 176.7p
Exceptional items (1.5) (0.3)p
Other (including amortisation
and shares) (1.5) (1.0)p
================================== ====== ========
At 30 September 2016 824.6 175.4p
================================== ====== ========
Net Asset Value grew to GBP824.6m or 175.4p per share, up 5.9%
and 5.5% on March 2016 respectively. The underlying driver being
the 4.5% revaluation gain.
Cash flows and net debt
The following table summarises the movements in net debt. The
key features are:
-- Total capital expenditure of GBP46.9m includes GBP35.1m of
property investment, mostly related to the continuing development
of Hawley Wharf, GBP2.8m for a minor property acquisition and
GBP7.9m of capex in our digital businesses
-- Increase in net debt of GBP51.4m to GBP303.5m, primarily due to the capital expenditure
-- Cash reserves were supplemented by drawing GBP100m on the AIG
facility, and now stand at GBP179.1m
GBPm September September
2016 2015
===================== ========== ==========
Adjusted EBITDA 13.2 10.6
Working capital (3.0) (1.1)
Net finance cost (7.5) (5.8)
Tax paid (3.0) (0.9)
Capital expenditure (46.9) (102.0)
Share issues - 196.9
Exceptional items (1.5) (6.7)
Other (2.7) (3.4)
===================== ========== ==========
Change in net debt (51.4) 87.6
===================== ========== ==========
Debt and gearing
GBPm September March September
2016 2016 2016
================================ =========== =========== ===========
Loan to value (net debt) 28.4% 25.5% 14.3%
Weighted average debt maturity 8.12 years 8.43 years 2.47 years
Effective interest rate* 4.4% 5.2% 5.6%
Cash interest rate* 2.7% 2.7% 3.6%
Proportion of gross debt
with interest rate protection 100.0% 100.0% 96.4%
================================ =========== =========== ===========
* Effective interest rate is the total interest charge
(including amounts capitalised) on total borrowings. Cash interest
rate is calculated on year end balances
The Group has aimed to match the long-term and predictable
property rental flows with long-term and predictable financing
costs. As such the Group has extended the maturity of its financing
to a weighted average of over eight years, and has substantially
eliminated the medium and long-term risk arising from interest rate
volatility. At the period end, 100% of the Group's gross debt
position was subject to fixed rate interest (March 2016: 100%,
September 2015: 96.5%).
The gearing measure most widely used in the property industry is
loan-to-value ('LTV'). LTV is calculated as net debt divided by the
value of the Group's property portfolio, reflecting a conservative
LTV of 28.4%.
The Group is conservatively financed with a core 10-year secured
facility provided by AIG, and a shorter term convertible bond. The
AIG facility is GBP400m drawn and not repayable until December
2025.
GBP90m of the Group's convertible bond remains outstanding
(September 2015: GBP109m) and is due for repayment in March 2020.
In the six months to 30 September 2016, the Group continued its
bond repurchase programme, buying back GBP23m of the original
principal amount.
The Group has GBP179m of cash. In addition, the AIG facility has
two future drawdown pools of GBP50m and GBP450m respectively,
subject to lender consent, and the Group has unsecured assets that
could support further borrowing.
We have sufficient resources available to complete our pipeline
of committed developments, which includes GBP150.3m for Hawley
Wharf, and remain flexible in our approach to funding the Group's
strategy for growth.
Consolidated income statement
Notes 6 months 6 months
ended ended
30 September 30 September
2016 2015
GBPm GBPm
------------------------------------ ----- ------------- -------------
Revenue 2 71.0 62.2
Cost of sales (35.6) (34.4)
------------------------------------ ----- ------------- -------------
Gross profit 35.4 27.8
Administrative expenses (28.6) (27.0)
Net gain from fair value adjustment
of investment property 7 44.7 16.4
------------------------------------ ----- ------------- -------------
Adjusted EBITDA* 13.2 10.6
Net gain from fair value adjustment
of investment property 7 44.7 16.4
Exceptional items 3 (1.5) (6.7)
Depreciation & amortisation (3.9) (2.6)
Foreign exchange gain/ (loss) 0.5 (0.4)
Share based payment expense (1.5) (0.1)
------------------------------------ ----- ------------- -------------
Operating profit 51.5 17.2
Finance income 0.2 -
Finance costs 4 (8.6) (7.1)
Share of loss from associate (0.1) -
------------------------------------ ----- ------------- -------------
Profit before taxation 43.0 10.1
Tax (0.7) (2.1)
------------------------------------ ----- ------------- -------------
Profit for the period 42.3 8.0
------------------------------------ ----- ------------- -------------
Attributable to:
Non-controlling interest (0.5) (0.4)
Owners of the parent 41.8 7.6
------------------------------------ ----- ------------- -------------
Earnings per share
Basic 6 8.90p 1.81p
Diluted 6 8.79p 1.80p
Basic adjusted EBITDA* 2.81p 2.53p
Diluted adjusted EBITDA* 2.60p 2.51p
------------------------------------ ----- ------------- -------------
* Adjusted EBITDA is defined as Earnings Before Interest, Taxes,
Depreciation, Amortisation and adjusted for fair value investment
property movements, share based payment charges, exceptional items
and foreign currency exchange gains and losses.
Consolidated statement of comprehensive income
Notes 6 months 6 months
ended ended
30 September 30 September
2016 2015
GBPm GBPm
---------------------------------------- ------ -------------- --------------
Profit for the period 42.3 8.0
Other comprehensive income
Items that will not be reclassified
to profit or loss
* Gains on property revaluation 7 0.1 0.9
Items that may be reclassified to
profit or loss
* Currency translation difference 1.8 0.3
---------------------------------------- ------ -------------- --------------
Other comprehensive income for the
period 1.9 1.2
---------------------------------------- ------ -------------- --------------
Total comprehensive income for the
period 44.2 9.2
---------------------------------------- ------ -------------- --------------
Attributable to:
Owners of the parent 43.3 8.8
Non-controlling interests 0.9 0.4
---------------------------------------- ------ -------------- --------------
Consolidated statement of financial position
Notes As at 30 As at 30 As at 31
September 2016 September 2015 March 2016
GBPm GBPm GBPm
--------------------------------- ----- --------------- --------------- -----------
Non-current assets
Goodwill 25.4 20.8 22.7
Intangible assets 12 44.6 35.1 37.3
Property, plant and equipment 17.0 11.6 14.9
Investment property 7 1,061.8 859.8 979.2
Investment in equity accounted
associate 2.6 - 2.8
Investments 2.7 1.8 2.7
Other receivables - 0.1 -
Deferred tax asset - 0.1 -
--------------------------------- ----- --------------- --------------- -----------
1,154.1 929.3 1,059.6
Current assets
Inventories 3.7 3.2 3.3
Trade and other receivables 33.1 25.2 31.8
Derivative financial instruments - 1.2 -
Cash and cash equivalents 179.1 175.3 149.4
--------------------------------- ----- --------------- --------------- -----------
215.9 204.9 184.5
--------------------------------- ----- --------------- --------------- -----------
Total assets 1,370.0 1,134.2 1,244.1
--------------------------------- ----- --------------- --------------- -----------
Current liabilities
Trade and other payables (30.7) (35.9) (31.3)
Taxes payable (5.5) (1.8) (7.8)
Obligations under finance leases (0.1) (0.1) (0.1)
Borrowings 8 - (6.3) -
Provisions (0.2) (0.2) (0.2)
--------------------------------- ----- --------------- --------------- -----------
(36.5) (44.3) (39.4)
--------------------------------- ----- --------------- --------------- -----------
Net current assets 179.4 160.6 145.0
--------------------------------- ----- --------------- --------------- -----------
Non-current liabilities
Other payables (12.6) (10.2) (11.1)
Obligations under finance leases (3.3) (3.4) (3.4)
Borrowings 8 (392.6) (182.5) (290.5)
Convertible loan notes 9 (90.0) (109.3) (111.1)
Deferred tax liabilities (10.0) (13.9) (9.4)
Provisions (0.4) (0.6) (0.4)
--------------------------------- ----- --------------- --------------- -----------
(508.9) (319.8) (425.8)
--------------------------------- ----- --------------- --------------- -----------
Total liabilities (545.4) (364.1) (465.2)
--------------------------------- ----- --------------- --------------- -----------
Net assets 824.6 770.1 778.9
--------------------------------- ----- --------------- --------------- -----------
Equity
Called up share capital 47.0 46.8 46.9
Share premium 445.3 445.3 445.3
Revaluation reserve 15.1 13.2 15.0
Retained earnings 310.8 260.7 266.3
--------------------------------- ----- --------------- --------------- -----------
Total equity attributable to
owners of the parent 818.2 766.0 773.5
--------------------------------- ----- --------------- --------------- -----------
Non-controlling interests 6.4 4.1 5.4
--------------------------------- ----- --------------- --------------- -----------
Total equity 824.6 770.1 778.9
--------------------------------- ----- --------------- --------------- -----------
Consolidated statement of changes in equity
Attributable to the equity holders of
the parent
---------------- ------------------------------------------------------------------ -------
Share Share Revaluation Retained Total Non-controlling Total
capital premium reserve earnings interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ----------- -------------- ----------- ---------------- ------ --------------- -------
1 April 2016 46.8 445.3 15.0 266.3 773.4 5.5 778.9
Comprehensive - - - - - - -
income
Profit for the
period - - - 41.8 41.8 0.5 42.3
Other comprehensive income
Currency
translation
differences - - - 1.4 1.4 0.4 1.8
Property
revaluation - - 0.1 - 0.1 - 0.1
Total
comprehensive
income - - 0.1 43.2 43.3 0.9 44.2
Ordinary Shares
issued 0.2 - - (0.2) - - -
Share based
payment - - - 1.5 1.5 - 1.5
Transactions
with
owners 0.2 - - 1.3 1.5 - 1.5
---------------- ----------- -------------- ----------- ---------------- ------ --------------- -------
30 September
2016 47.0 445.3 15.1 310.8 818.2 6.4 824.6
---------------- ----------- -------------- ----------- ---------------- ------ --------------- -------
1 April 2015 37.5 249.2 12.4 252.7 551.8 3.7 555.5
Comprehensive
income
Profit for the
period - - - 7.6 7.6 0.4 8.0
Other comprehensive income
Currency
translation
differences - - - 0.3 0.3 0.1 0.4
Property
revaluation - - 0.9 - 0.9 - 0.9
Total
comprehensive
income - - 0.9 7.9 8.8 0.5 9.2
Ordinary shares
issued 9.3 199.9 - - 209.2 - 209.2
Costs of share
issues - (3.9) - - (3.9) - (3.9)
Share based
payment - - - 0.1 0.1 - 0.1
Adjustment to
non-controlling
interests - - - - - (0.1) (0.1)
---------------- ----------- -------------- ----------- ---------------- ------ --------------- -------
30 September
2015 46.8 445.2 13.3 260.7 766.0 4.1 770.1
---------------- ----------- -------------- ----------- ---------------- ------ --------------- -------
Consolidated cash flow statement
6 months ended 6 months ended
30 September 30 September 2015
2016 GBPm
Notes GBPm
------------------------------------------- ----- -------------- ------------------
Cash generated from operations 11 8.5 2.5
Finance costs paid (7.6) (5.8)
Finance income received 0.2 -
Tax paid (3.0) (0.9)
------------------------------------------- ----- -------------- ------------------
Net cash outflow from operating
activities (1.9) (4.2)
Investing activities
Purchase of intangible assets (3.9) (0.9)
Purchase of property, plant and
equipment (2.8) (3.3)
Purchase of subsidiaries (net of
cash acquired) (4.8) (6.9)
Purchase of investment property (35.0) (88.8)
------------------------------------------- ----- -------------- ------------------
Net cash used in investing activities (46.5) (99.9)
Financing activities
Proceeds from issue of shares - 200.7
Costs of share issues - (3.8)
Repayment of convertible bond (22.7) -
Repayment of borrowings - (0.5)
Purchase of derivative - (2.0)
Drawdown of borrowings 100.0 -
Payment of obligations under finance
leases (0.1) (0.1)
Payment of pre-acquisition dividend
by a subsidiary - (0.8)
------------------------------------------- ----- -------------- ------------------
Net cash generated from financing
activities 77.2 193.5
Net increase in cash and cash equivalents 28.8 89.4
Cash and cash equivalents at beginning
of period 149.4 85.9
Exchange gain on cash and cash equivalents 0.8 -
Cash and cash equivalents at end
of period 179.1 175.3
------------------------------------------- ----- -------------- ------------------
Notes to the consolidated historical financial information
1. Basis of preparation
The condensed consolidated financial statements for the six
months ended 30 September 2016 and six months ended 30 September
2015 set out in this interim financial information are unaudited
and have been prepared in accordance with International Accounting
Standard 34 'Interim Financial Reporting'. They do not contain all
the information and disclosures presented in the Financial
Statements and should be read in conjunction with the Financial
Statements for the year ended 31 March 2016. The Auditor's report
on those accounts was unmodified, did not draw attention to any
matters by way of an emphasis of matter and did not contain any
statement under Section 263 of the Companies (Guernsey) Law
2008.
The accounting policies used and presentation of these
consolidated interim financial statements are consistent with those
applied in the Group's financial statements for the year ended 31
March 2016 with the exception of other reserves which have been
combined with retained earnings in the current period.
The consolidated financial information has been prepared on a
going concern basis. The directors of the Group have a reasonable
expectation that the Group has sufficient resources to meet its
commitments and obligations for the next 12 months from the date of
this report.
The consolidated financial information covers Market Tech
Holdings Limited and its subsidiaries (collectively the "Group").
Market Tech Holdings Limited (the "Company") is a limited company
incorporated and domiciled in Guernsey and whose shares are
publicly traded. The registered office is located at Third Floor,
La Plaiderie Chambers, La Plaiderie, St Peter Port, Guernsey, GY1
1WG. The Group is principally engaged in property investment,
including management and market operation services and Digital
services.
The Directors approved the interim financial information for the
six months ended 30 September 2016 on
1 December 2016. The interim financial information has been
reviewed, not audited.
2. Operating segments
Unaudited six months ended 30 September 2016
Property Digital Total
GBPm GBPm GBPm
-------------------------------------------------- -------- ------- -------
Total segment revenue from external customers 17.8 53.2 71.0
Adjusted EBITDA* 8.8 4.4 13.2
-------------------------------------------------- -------- ------- -------
Other items included in operating profit:
Net gain from fair value adjustment of investment
property 44.7 - 44.7
Exceptional items (0.6) (0.9) (1.5)
Depreciation & amortisation (0.6) (3.3) (3.9)
Foreign exchange gain - 0.5 0.5
Share-based payment expense (0.4) (1.1) (1.5)
Not included in operating profit:
Finance income 0.2 - 0.2
Interest payable and similar charges (8.2) (0.4) (8.6)
Share of loss from associate (0.1) - (0.1)
-------------------------------------------------- -------- ------- -------
Profit/(loss) before tax 43.8 (0.8) 43.0
-------------------------------------------------- -------- ------- -------
Profit/(loss) for the period 43.8 (1.5) 42.3
-------------------------------------------------- -------- ------- -------
Total assets 1,273.3 96.7 1,370.0
Total liabilities (507.0) (38.4) (545.4)
-------------------------------------------------- -------- ------- -------
Net assets 766.3 58.3 824.6
Included within total assets are:
Non-current asset additions 37.4 4.2 41.6
-------------------------------------------------- -------- ------- -------
2. Operating segments
Unaudited six months ended 30 September 2015
Property Digital Total
GBPm GBPm GBPm
--------------------------------------------------- -------- ------- --------
Total segment revenue from external customers 13.8 48.4 62.2
Adjusted EBITDA* 6.7 3.9 10.6
--------------------------------------------------- -------- ------- --------
Other items included in operating profit:
Net gain from fair value adjustment of investment
property 16.4 - 16.4
Exceptional items (2.1) (4.6) (6.7)
Depreciation & amortisation (0.1) (2.4) (2.5)
Foreign exchange loss - (0.5) (0.5)
Share-based payment expense (0.1) - (0.1)
Not included in operating profit:
Interest income - - -
Interest payable and similar charges (5.8) (0.4) (6.2)
Fair value adjustment of interest rate derivatives (0.9) - (0.9)
--------------------------------------------------- -------- ------- --------
Profit/(loss) before tax 14.1 (4.0) 10.1
--------------------------------------------------- -------- ------- --------
Profit/(loss) for the period 14.5 (6.5) 8.0
--------------------------------------------------- -------- ------- --------
Total assets 1,045.8 88.4 1,134.2
Total liabilities (321.6) (42.5) (364.1)
--------------------------------------------------- -------- ------- --------
Net assets 724.2 45.9 770.1
Included within total assets are:
Non-current asset additions 22.5 1.5 24.0
--------------------------------------------------- -------- ------- --------
* Adjusted EBITDA is defined as Earnings Before Interest, Taxes,
Depreciation, Amortisation and adjusted for fair value investment
property movements, share based payment charges, exceptional items
and foreign currency exchange gains and losses.
3. Exceptional items
6 months 6 months
ended 30 ended 30
September September
2016 2015
GBPm GBPm
----------------------------------------- ---------- ----------
Included within administrative expenses:
Reorganisation and restructuring costs 0.9 -
Legal, professional and other 0.5 1.6
Contingent remuneration payable 0.1 3.7
Onerous contract provision - 0.6
Listing fees - 0.8
------------------------------------------ ---------- ----------
1.5 6.7
----------------------------------------- ---------- ----------
Reorganisation and restructuring costs primarily relate to
one-off staff costs arising from the rationalisation of business
operations.
Legal and professional costs largely relate to professional
costs in connection with M&A activity and legal fees.
Contingent remuneration payable is in respect of certain
acquisitions made by the Group. Consequently, a charge is being
recognised over the period the employees are required to remain
employed.
4. Finance costs
6 months 6 months
ended 30 ended 30
September September
2016 2015
GBPm GBPm
--------------------------------------------------- ---------- --------------
Underlying finance costs
Bank facility interest 5.8 4.5
Amortisation of fees 2.0 1.1
Early repayment charge - -
Convertible loan note interest 2.7 2.7
Bank loans, overdrafts and fees 0.3 -
---------------------------------------------------- ---------- --------------
10.8 8.3
Exceptional finance costs
Unwinding of discount on present value of put
option - 0.1
Put option 0.2 -
Unwinding of discount to present value on deferred
consideration - 0.2
Fair value movement of financial derivatives - 0.9
---------------------------------------------------- ---------- --------------
0.2 1.2
Gross finance costs 11.0 9.5
---------------------------------------------------- ---------- --------------
Less: capitalised senior debt (2.4) (2.4)
---------------------------------------------------- ---------- --------------
Finance costs recognised in profit or loss 8.6 7.1
5. Income tax charge
The rate of corporate tax on our UK operations will reduce from
20 per cent to 19 per cent from 1 April 2017 and then to 17 per
cent from 1 April 2020. Deferred tax in relation to our UK
operations is calculated based on the 20 per cent substantively
enacted at the balance sheet date. The effect of these further rate
reductions will be included in the accounts for the year ending 31
March 2017.
6. Earnings per share
6 months 6 months
ended 30 ended 30
September September
Number of shares 2016 2015
Number Number
------------------------------------------- ----------- -----------
Weighted average number of ordinary shares
for basic earnings
per share 469,443,165 419,078,451
Effects of dilution from:
Share options 66,535 98,921
Convertible loan 35,598,960 -
Deferred consideration 1,337,161 1,905,252
-------------------------------------------- ----------- -----------
Weighted average number of ordinary shares
adjusted for the effect of dilution 506,445,821 421,082,624
6 months 6 months
ended 30 ended 30
September September
Earnings 2016 2015
GBPm GBPm
------------------------------------------------------- ---------- ----------
Earnings for basic earnings per share being net profit
from continuing operations attributable to owners
of the parent 41.8 7.6
Interest on convertible loan 2.7 -
-------------------------------------------------------- ---------- ----------
Earnings for diluted earnings per share 44.5 7.6
Earnings per share attributable to the owners of
the parent
------------------------------------------------------- ---------- ----------
Basic earnings per share (pence) 8.90 1.81
-------------------------------------------------------- ---------- ----------
Diluted earnings per share (pence) 8.79 1.80
-------------------------------------------------------- ---------- ----------
Adjusted EBITDA per share
Adjusted EBITDA used to calculate adjusted EBITDA per share is
defined as Earnings Before Interest, Taxes, Depreciation,
Amortisation and adjusted for fair value investment property
movements, share based payment charges, exceptional items and
foreign currency exchange gains and losses.
6 months 6 months
ended 30 ended 30
September September
2016 2015
GBPm GBPm
----------------------------------------------- ---------- ----------
Adjusted EBITDA for the period from continuing
operations attributable to the owner of
the parent 13.2 10.6
Adjusted EBITDA per share from continuing
operations attributable to the owner of
the parent - basic (pence) 2.81 2.44
Adjusted EBITDA per share from continuing
operations attributable to the owner of
the parent - diluted (pence) 2.60 2.42
7. Investment properties
GBPm
----------------------------------------------------------- -------
At 1 April 2015 753.7
Additions 19.8
Acquisition - business combinations and asset acquisitions 75.9
Transfer to property, plant and equipment (6.1)
Revaluation movements 16.4
----------------------------------------------------------- -------
At 30 September 2015 859.7
Additions 27.4
Acquisition -asset acquisitions 74.2
Revaluation movements 17.9
----------------------------------------------------------- -------
At 31 March 2016 979.2
Additions 35.1
Acquisition - asset acquisitions 2.8
Revaluation movements 44.7
----------------------------------------------------------- -------
At 30 September 2016 1,061.8
Investment properties are stated at fair value as at the
financial period end based on external valuations performed by
professionally qualified valuers. The Group's property portfolio is
valued at 30 September 2016 by Jones Lang LaSalle Limited on the
basis of fair value in accordance with The RICS Valuation -
Professional Standards.
Interest on debt has been capitalised since construction
commenced, resulting in GBP2.4m interest being capitalised in the
period (period ended 30 September 2015: GBP2.4m, year ended 31
March 2016: GBP4.6m).
8. Borrowings
As at 30 As at 30 As at 31
September September March
2016 2015 2016
GBPm GBPm GBPm
--------------------------------------- ---------- ---------- --------
Unsecured borrowings at amortised cost
Convertible loan note 90.0 109.3 111.1
Secured borrowings at amortised cost
Bank loans
Current - 6.4 -
Non-current 392.6 182.5 290.4
--------------------------------------- ---------- ---------- --------
392.6 188.9 290.4
GBP100m of the AIG Facility was drawn down in May 2016. Further
details of the Group's borrowings facility can be found in note 31
of the 2016 Annual Report and Accounts.
Net debt
As at 30 As at 30 As at 31
September September March
2016 2015 2016
GBPm GBPm GBPm
--------------------------------- ---------- ---------- --------
Total borrowings 482.6 298.2 401.5
Less: cash and cash equivalents (179.1) (175.3) (149.4)
--------------------------------- ---------- ---------- --------
Net debt 303.5 122.9 252.1
--------------------------------- ---------- ---------- --------
Total equity 824.6 770.1 778.9
Total capital 1,128.1 893.0 1,030.0
Gearing ratio 28% 14% 24%
9. Convertible loans
On 31 March 2015 the Company issued 2% senior unsecured
convertible bonds denominated in pounds sterling with a nominal
value of GBP112.5m. The bonds are due for repayment after three
years, but no more than five years from the issue date at their
nominal value of GBP112.5m or conversion into shares of the company
at the holder's option at the rate of one Ordinary Share per
GBP2.94 nominal value of the bonds. During the period the Group has
repurchased GBP22.8m (equating to 20.27%) of the original principal
amount of the bonds with GBP89.7m of the bonds remaining
outstanding.
The carrying amount of the liability component of the
convertible loan notes at the balance sheet date is derived as
follows:
6 months 6 months
ended 30 ended 30 Year ended
September September 31 March
2016 2015 2016
GBPm GBPm GBPm
-------------------------------- ---------- ---------- ----------
Liability component at 1 April 111.1 108.0 108.0
Repurchased during period (22.8) - -
Transaction costs - (0.3) (0.3)
Interest expense 2.7 2.7 5.6
Interest paid (1.0) (1.1) (2.3)
-------------------------------- ---------- ---------- ----------
Liability component at 31 March 90.0 109.3 111.0
The effective rate of interest is 5.23%.
The equity component of the convertible loan notes has been
credited to retained earnings.
10. EPRA Net Asset Value per share
EPRA net assets are defined as the net assets of the property
operating segment adjusted to exclude derivatives and deferred tax
liabilities on property revaluations. EPRA NAV per share has been
calculated with reference to the above, divided by the number of
shares in issue as at the financial period end.
As at 30 September As at 30 September
2016 2015
----------------------------------- ------------------ ------------------
EPRA NAV per share 164.16p 155.35p
------------------------------------ ------------------ ------------------
EPRA NAV GBP771.6m GBP727.8m
----------------------------------- ------------------ ------------------
Number of ordinary shares in issue 470,009,617 468,468,196
11. Cash generated from operations
6 months 6 months
ended 30 ended 30
September September
2016 2015
GBPm GBPm
-------------------------------------------------- ---------- ----------
Profit for the year 42.3 8.0
Adjustments for:
Income tax expense 0.7 2.1
Finance expense 8.6 6.1
Investment income (0.2) -
Share based payment expense 1.4 0.1
Fair value adjustments to derivatives - 1.1
Loss on disposal intangible - 0.1
Movement on provisions - (0.2)
Depreciation and impairment of property, plant
and equipment 0.8 0.4
Amortisation intangibles 3.1 2.3
Net gain from fair value adjustment of investment
property (44.7) (16.4)
Movements in working capital:
(Increase)/ decrease in inventories (0.4) 0.1
Increase in trade and other receivables (2.3) (6.9)
Increase in trade and other payables (0.8) 5.7
--------------------------------------------------- ---------- ----------
Cash generated from operations 8.5 2.5
--------------------------------------------------- ---------- ----------
12. Intangible Assets
Cost Goodwill Other Intangibles Total
GBPm GBPm GBPm
------------------------------------ -------- ----------------- ------
At 1 April 2015 20.1 18.6 38.7
Additions - 1.5 1.5
Acquisition - business combinations 3.7 20.2 23.9
Disposals - (0.1) (0.1)
Adjustment to consideration (2.6) - (2.6)
Foreign exchange 1.5 2.3 3.8
------------------------------------ -------- ----------------- ------
At 1 April 2016 22.7 42.5 65.2
Additions - 2.8 2.8
Disposals - - -
Acquisition - business combinations 2.7 4.0 6.7
Foreign exchange - 4.0 4.0
At 30 September 2016 25.4 53.3 78.7
Amortisation
At 1 April 2015 - 0.2 0.2
Amortisation - 4.7 4.7
Foreign exchange - 0.3 0.3
------------------------------------ -------- ----------------- ------
At 1 April 2016 - 5.2 5.2
Amortisation - 3.0 3.0
Foreign exchange - 0.5 0.5
------------------------------------ -------- ----------------- ------
At 30 September 2016 - 8.7 8.7
Net book value
At 1 April 2015 20.1 18.4 38.5
At 1 April 2016 22.7 37.3 60.0
------------------------------------ -------- ----------------- ------
At 30 September 2016 25.4 44.6 70.0
13. Capital commitments
The Group's material capital commitments related to construction
of the Hawley Wharf scheme. This amounted to GBP43.3m as at 30
September 2016 (30 September 2015: GBP22.2m).
14. Events after the reporting period
On 15 November 2016 the Group completed its purchase of 101
Camley Street for a total consideration of GBP35m, of which a
GBP3.5m deposit had been paid in the period.
The Company has issued 192,678 Ordinary Shares of 10p each as
deferred consideration pursuant to the acquisition of Stucco Media
Limited announced on 7 May 2015. Over the next 6 months, a maximum
of a further 674,370 Ordinary Shares are expected to be issued as
deferred consideration pursuant to the Stucco Media Limited
acquisition. The Ordinary Shares will be issued fully paid and
will, upon issue, rank pari passu in all respects with the
Company's existing issued shares.
Accordingly, the total number of Ordinary Shares in Market Tech
with voting rights will be 470,105,956. This figure may be used by
Market Tech shareholders as the denominator for calculations to
determine if they have a notifiable interest in Market Tech under
the Disclosure and Transparency Rules, or if such interest has
changed.
Directors' Responsibility Statement
The Directors confirm that to the best of their knowledge this
condensed set of financial statements has been prepared in
accordance with IAS 34 as adopted by the European Union and that
the operating and financial review herein includes a fair review of
the information required by DTR 4.2.7 and DTR 4.2.8 of the
Disclosure and Transparency rules of the United Kingdom's Financial
Conduct Authority, namely:
- an indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed financial statements and a description of the principal
risks and uncertainties for the remaining six months of the
financial year; and
- material related party transactions in the first six months of
the financial year and any material changes in the related party
transactions disclosed in the 2016 Annual Report.
Shareholder information is as disclosed on the Market Tech
Holdings Limited website.
Principal risks and uncertainties
The principal risks and uncertainties the Group faces are
described in detail on pages 46 and 47 of the 2016 Annual Report,
and are summarised below.
The Audit Committee, which assists the Board with its
responsibilities for managing risk, considers that the principal
risks and uncertainties as presented in our 2016 Annual Report were
unchanged during the period.
Economic
Reduced spending in the markets and/or e-commerce operations
arising from any or a combination of:
- Changes in consumer preferences and/or the market offering not meeting consumer appetite
- Macro-economic factors including changes in interest or
exchange rates which affect consumer confidence and depress
spending
- Transport/security/economic issues in London or wider UK affecting tourist confidence
- Specific issues affecting Camden as a destination, where the Group's real estate is located
- Impact arising from the vote to leave the European Union in
June 2016 is difficult to predict with exit negotiations
ongoing
- Loss of key customer contracts in mobile and e-marketing businesses
- Retaining key senior staff and attracting and retaining
talented staff to fulfil Group's growth potential
- Failure to integrate business acquisitions/failure to leverage
business opportunity from existing market operations/increased cost
of integration/undisclosed liabilities
Development
Development and construction risk including:
- Construction issues including defects, site constraints, third
party issues, shortage of materials, price rises, failure of
contractors/sub-contractors
- Delays in obtaining consents, permits, planning permissions, vacant possession
- Reduced rentals/sales
Financing
- Adverse interest rate movements
- Shortage of refinancing at acceptable cost
- Financial counter-party credit risk
- Falling property values
- Reduced cash flow arising from other risk categories
Legal and regulatory
Risk of accidents or visitor incidents including:
- Visitor accident or crowd issue
- Failure to comply with health, safety or environmental requirements
Tax risk:
- Changes in tax laws
- Changes in stamp duty
- Non-compliance with requirements in a particular jurisdiction or due to overall complexity
Listed buildings ownership:
- Failure to comply with planning regulations
IT - Technology and data
The consequences of:
- Delays in integration of acquired technology businesses and/or
fully developing and gaining acceptance for e-commerce platform
- Failure of ad tracking technology and e-commerce platforms
- Widespread mains failure
- Cyber fraud and denial of service
- Corruption or theft of data or IP
Independent review report To Market Tech Holdings Limited
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30th September 2016 which comprises consolidated
income statement, statement of comprehensive income, the
consolidated statement of financial position, the consolidated
statement of changes in equity, the consolidated cash flow
statement and the 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
group are prepared in accordance with International Financial
Reporting Standards (IFRSs) 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.
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-yearly financial 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 Financial Information Performed by the Independent Auditor
of the Entity", issued by the Financial Reporting Council 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 set of financial statements
in the half-yearly financial report for the six months ended 30(th)
September 2016 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 LLP
Chartered Accountants
London
United Kingdom
1 December 2016
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FFLBBQLFBFBD
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