TIDMSIPP
RNS Number : 3616Q
Specialist Investment PropertiesPLC
11 September 2017
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
Specialist Investment Properties Plc
("SIPP", the "Group", or the "Company")
Interim results for the six months ended 30 June 2017
11 September 2017
Financial Results
The Company made an unaudited profit before and after taxation
of GBP12,000 for the six months ended 30 June 2017 (2016: loss of
GBP57,000).
The return of the Company to profitability has resulted from the
establishment of a stable property portfolio, comprising thirteen
assets, during the period. The Company made one small property
acquisition in January 2017, but otherwise the portfolio has
remained unchanged throughout the period. Rent reviews for five
properties took place during the period, recording uplifts in line
with CPI. As a result of the acquisition and rent reviews, total
annualised rent for the property portfolio had reached GBP636,500
by 30 June 2017, representing a gross yield of 10.5%.
The Company's unaudited balance sheet at 30 June 2017 shows net
assets of GBP2.2m, of which GBP0.2m was held in cash at the balance
sheet date. Investment properties were carried at an aggregate
value of GBP6.6m, with GBP4.5m of associated borrowings in
place.
Property Portfolio
The Company held investment properties valued at GBP6.6m at 30
June 2017, consisting of seven children's homes, one supported
living home and five properties rented out as short term
accommodation to local authorities. The children's homes and
supported living asset are leased to care operators on long term
full repairing and insuring leases with annual index-linked
uplifts. The short term accommodation is let for shorter periods to
local authorities, with vacancy rates in the sector historically
less than 1%. For the largest short term accommodation property,
the Company has entered into a one year lease with the local
authority.
The following table gives details of the purchase prices and
gross yields on purchase price:
Purchase Annual Gross rental
price Rent yield
No. GBP'000 GBP'000 %
Children's homes 7 2,378 238 10.0
Supported living
homes 1 1,250 115 9.2
Short term accommodation 5 2,425 283 11.7
---- --------- --------- -------------
Total portfolio 13 6,053 637 10.5
---- --------- --------- -------------
The gross rental yield for the thirteen properties on purchase
costs after taking account of stamp duty, legal costs and fees is
9.7% p.a.
Future Plans
The Company is today announcing that it intends to seek
Shareholder approval for the cancellation of admission of its
Ordinary Shares to trading on AIM. The background and rationale to
this proposal will be set out in a further announcement published
later today.
John Le Poidevin
Director
For further information:
Specialist Investment Properties plc
John Le Poidevin / Lynn Bruce / Simon Clements
+44 (0) 1481 724222
Puma Investments (Investment Adviser to the Company)
David Kaye
+44 (0) 20 7408 4050
Allenby Capital Limited (Nomad and Broker to the Company)
David Worlidge / James Thomas / Liz Kirchner
+44 (0) 20 3328 5656
Notes to Editors
The Company's shares are admitted to trading on AIM and it is
registered in the Isle of Man with company number 111066C.
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2017
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
Notes
GBP'000 GBP'000 GBP'000
Revenue 312 25 174
Administrative
expenditure (146) (72) (229)
Operating profit/(loss) 166 (47) (55)
------------------------- ------------------------- ----------------------
Interest income - 1 1
Finance costs (154) (11) (82)
Profit/(loss) before
taxation 12 (57) (136)
------------------------- ------------------------- ----------------------
Taxation - - -
Profit/(loss) after
taxation and total
comprehensive loss
for the period 12 (57) (136)
========================= ========================= ======================
Attributable to:
Equity holders
of the parent 12 (57) (136)
Non-controlling - - -
interests
------------------------- ------------------------- ----------------------
12 (57) (136)
========================= ========================= ======================
Earnings/(loss)
per share
Basic and diluted 3 0.09p (0.57)p (1.16)p
========================= ========================= ======================
Consolidated Statement of Financial Position
As at 30 June 2017 (unaudited)
Notes As at As at
As at 30 30 June 31 December
June 2017 2016 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Non-current assets
Investment properties 4 6,563 1,673 6,223
Intangible assets 2 1 2
6,565 1,674 6,225
---------------- ---------------- -------------------
Current assets
Trade and other
receivables 179 16 159
Cash and cash equivalents 171 1,695 365
----------------
350 1,711 524
---------------- ---------------- -------------------
Total assets 6,915 3,385 6,749
---------------- ---------------- -------------------
Current liabilities
Trade and other
payables (140) (64) (192)
Loans due in less
than one year 5 (1,033) - -
----------------
(1,173) (64) (192)
---------------- ---------------- -------------------
Non-current liabilities
Loans due after
more than one year 5 (3,459) (1,030) (4,295)
Other payables (37) - (31)
---------------- ---------------- -------------------
Total liabilities (4,669) (1,094) (4,518)
---------------- ---------------- -------------------
Net Assets 2,246 2,291 2,231
================ ================ ===================
Equity
Capital and Reserves
Called up share
capital 6 2,599 2,598 2,599
Share premium account 12,940 12,938 12,940
Retained earnings (13,312) (13,245) (13,324)
---------------- ---------------- -------------------
Equity attributable
to equity holders
of the parent 2,227 2,291 2,215
---------------- ---------------- -------------------
Non-controlling
interest 19 - 16
Total equity 2,246 2,291 2,231
================ ================ ===================
Net Asset Value
per share 16.71p 17.35p 16.62p
======= ================= =============
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2017 (unaudited)
Share
Share premium Retained Non-controlling
capital account earnings interest Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2016 2,491 11,015 (13,188) - 318
Loss for the period - - (57) - (57)
Issue of share
capital 107 1,923 - - 2,030
At 30 June 2016 2,598 12,938 (13,245) - 2,291
========= ========= ========== ================ ========
Share
Share premium Retained Non-controlling
capital account earnings interest Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2016 2,598 12,938 (13,245) - 2,291
Loss for the period - - (79) - (79)
Issue of preference
shares - - - 16 16
Issue of share
capital 1 2 - - 3
At 31 December
2016 2,599 12,940 (13,324) 16 2,231
========= ========= ========== ================ ========
Share
Share premium Retained Non-controlling
capital account earnings interest Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2017 2,599 12,940 (13,324) 16 2,231
Profit for the
period - - 12 - 12
Issue of preference
shares - - - 3 3
At 30 June 2017 2,599 12,940 (13,312) 19 2,246
========= ========= ========== ================ ========
Consolidated Cash Flow Statement
For the six months ended 30 June 2017
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Profit/ (loss) from operations 166 (47) (55)
Increase in receivables (20) (8) (151)
(Decrease)/increase in
payables (55) 30 130
Cash flows from operating
activities 91 (25) (76)
--------------------- ------------------- ------------------
Investing activities
Purchase of investment
properties (340) (1,673) (6,223)
Purchase of intangible
assets - (1) (2)
--------------------- ------------------- ------------------
Net cash used in investing
activities (340) (1,674) (6,225)
--------------------- ------------------- ------------------
Financing activities
Proceeds from issue of
share capital - 2,030 2,033
Issue of preference shares 3 - 47
Interest income - 1 1
Interest paid (145) - (43)
New loans received 197 1,030 4,295
--------------------- ------------------- ------------------
Net cash generated from
financing activities 55 3,061 6,333
--------------------- ------------------- ------------------
Net (decrease)/increase
in cash and cash equivalents
during the period (194) 1,362 32
Cash and cash equivalents
at beginning of period 365 333 333
--------------------- ------------------- ------------------
Cash and cash equivalents
at end of period 171 1,695 365
===================== =================== ==================
Notes to the Interim Financial Report
For the six months ended 30 June 2017 (unaudited)
1. Financial information
Basis of preparation and publication
The annual financial statements of Specialist Investment
Properties Plc are prepared in accordance with International
Financial Reporting Standards as adopted by the European Union.
The information for the year ended 31 December 2016 does not
constitute statutory accounts. The Annual Report and Accounts of
the Group were issued on 26 May 2017. The auditor's report on those
accounts was not qualified and did not include a reference to any
matters to which the auditors drew attention by way of emphasis
without qualifying the report.
Copies of this announcement are available on the Company's
website www.specialistinvestmentproperties.com
Going concern
The directors have considered the adequacy of the disclosures
made in the financial statements concerning the company's ability
to continue as a going concern and the basis on which the financial
statements have been prepared. As it is the directors' intention to
sell the company's assets and liabilities in the normal course of
business and then to wind up the company in an orderly manner, the
financial statements have not been prepared on a going concern
basis. It should be noted that the company continues to be solvent
and will meet its liabilities as they fall due. The decision to
wind up the company does not impact the measurement of its assets
and liabilities.
Accounting policies
The accounting policies adopted are consistent with those of the
previous financial year.
Investment properties
The Group's investment properties are held for long term
investment. Investment properties are initially measured at cost,
including transaction costs. Subsequent to initial recognition,
investment properties are stated at fair value based on market data
and a valuation made as of each reporting date. The fair value of
investment property does not reflect future capital expenditure
that will improve or enhance the property and does not reflect
future benefits from this future expenditure.
Gains or losses arising from changes in the fair value of
investment properties are included in the Group Statement of
Comprehensive Income in the year in which they arise.
Investment properties are recognised for accounting purposes
upon completion of contract, when the risks and rewards of
ownership are transferred to the Group. Investment properties cease
to be recognised when they have been disposed of. Any gains and
losses arising are recognised in the Group Statement of
Comprehensive Income in the year of disposal.
Net rental income
Rental income arising from operating leases on investment
properties is accounted for on a straight line basis over the lease
term. An adjustment to rental income is recognised from the rent
review date of each lease in relation to unsettled rent reviews.
For leases which contain fixed or minimum deemed uplifts, the
rental income is recognised on a straight line basis over the lease
term. Incentives for lessees to enter into lease agreements are
spread evenly over the lease terms, even if the payments are not
made on such a basis. Rental income is measured at the fair value
of the consideration receivable, excluding discounts, rebates, VAT
and other sales taxes or duty.
Bank loans and borrowings
All loans and borrowings are initially measured at fair value
less directly attributable transaction costs. After initial
recognition, all interest-bearing loans and borrowings are
subsequently measured at amortised cost, using the effective
interest method.
Borrowing costs
Borrowing costs that are separately identifiable and directly
attributable to the acquisition or construction of an asset that
necessarily takes a substantial period of time to get ready for its
intended use or sale are capitalised as part of the cost of the
respective assets. All other borrowing costs are expensed in the
period in which they occur. Borrowing costs consist of interest and
other costs the Group incurs in connection with the borrowing of
funds.
2. Dividends
The Directors do not recommend the payment of an interim
dividend in respect of the six months ended 30 June 2017 (30 June
2016: GBPnil, 31 December 2016: GBPnil).
3. Earnings/(loss) per share
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2016
2017 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Earnings/(loss) for
the period 12 (57) (136)
================ ============= ===================
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2016
2017 2016
(unaudited) (unaudited) (audited)
No. No. No.
Weighted average number
of ordinary shares for
the purpose of basic
and diluted loss per
share 13,330,306 9,966,607 11,678,518
================ ============= ===================
Earnings/(loss) per
share (pence)
Basic and diluted 0.09 (0.57) (1.16)
================ ============= ===================
4. Investment properties
GBP'000
At 1 January 2017 6,223
Additions in the period 340
--------
At 30 June 2017 6,563
========
5. Loans
As at 30 June 2017, the Group had drawn loans totaling
GBP4,493,340 from loan facilities advanced by Heritage Square
Limited, a related entity to whom the Group's Investment Adviser,
Puma Investment Management Limited, acts as Trading Adviser. Costs
of GBP3,686 were set off against this loan balance and are being
released over the loan term, resulting in a net loan balance at 30
June 2017 of GBP4,492,037. As at 30 June 2017, loans totaling
GBP1,033,000 were payable in less than one year and loans totaling
GBP3,460,340 were due in more than one year.
Under a GBP7.4m principal loan facility, interest is payable on
drawn funds at a fixed rate of 6.0% - 6.5% per annum and loans are
repayable two years after the date of drawdown. Loans are used to
fund the purchase of investment properties and are secured on those
properties by way of a first charge. As at the period end
GBP4,213,340 had been drawn down under this principal loan
facility.
In addition, the Group has a further GBP2.5m bridging facility
with Heritage Square Limited, whereby interest is payable on drawn
funds at a rate of 1% per month for the first six months, stepping
up to 1.25% per month between seven months from drawdown and twelve
months from drawdown, 1.5% per month between thirteen months from
drawdown and eighteen months from drawdown and 1.75% per month
between nineteen months from drawdown and twenty-four months from
drawdown. Loans are repayable two years after the date of drawdown.
The Group was only able to draw down on the facility until the
earlier of reaching the GBP2.5m limit or 30 June 2017. As at the
period end GBP280,000 had been drawn from this loan facility.
6. Share Capital
The total number of Ordinary shares in issue at the start and
end of the period was 13,330,306.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KFLBFDKFLBBV
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