Helical sees letting success and increased focus on core sectors
Gerald Kaye, Chief Executive, commented:
“The financial year to date has seen Helical make encouraging progress in executing its strategy and meeting targets. Following the sale announced yesterday of our retirement village portfolio for £102m, a 13% discount to book value, we have now sold the majority of our non-core holdings, with those remaining accounting for just 4% of the total portfolio. One Creechurch Place, London EC3 is 48% let with a further 22% under offer and good interest in the remaining space. In addition, we have achieved record rents at a number of our London investment assets. With the second phase of The Bower, London EC1 and One Bartholomew Close, London EC1 due for completion in Q3 2018, we are confident of their letting prospects. Looking forward, we will continue to seek new refurbishment and development opportunities in undersupplied markets.
“We have sold over £315m of investment assets since 1 April 2016, including the sale this week of our London office investment at C-Space, London EC1, at prices in aggregate of 2.5% above book value. Net proceeds have funded our capital expenditure programme and, importantly, have reduced net borrowings by £236m substantially reducing our loan to value from 55%, at 31 March 2016, to today’s pro-forma ratio of 43%.
“With our portfolio of high quality London and Manchester offices and higher yielding logistics properties, we now look forward to increasing our income stream from the current contracted rents of £45m towards the portfolio’s ERV of £65m as completed office space is made available to potential tenants in the next 12 months.”
Financial Highlights – strong base from which to deliver future returns
- EPRA net asset value per share down 1.7% to 465p (31 March 2017: 473p), reflecting the impact on NAV from the sale of the retirement village portfolio.
- EPRA loss per share of 5.9p (2016: earnings 4.4p).
- IFRS basic earnings per share of 0.3p (2016: 27.8p)
- IFRS Profit before tax of £1.2m (2016: £31.1m).
- Total Property Return of £15.4m (2016: £47.8m).
- Group’s share of net rental income of £17.9m reflecting the sale of non-core properties (2016: £24.6m).
- Development losses of £8.2m (2016: £2.6m), after provisions of £11.5m (2016: £6.6m).
- Net gain on sale and revaluation of investment properties of £5.7m (2016: £25.8m).
- Interim dividend declared of 2.50p per share (2016: 2.40p) – up 4.2%.
- Group’s share of property portfolio £1,211m (31 March 2017: £1,205m).
- Investment property valuations, on a like-for-like basis, up 0.8% (0.7% including sales and purchases).
- See-through loan to value of 51% (31 March 2017: 51%). Post 30 September 2017 sales reduce pro-forma loan to value to 43%.
- Average maturity of the Group’s share of debt of 3.0 years (31 March 2017: 3.6 years) at an average cost of 4.3% (31 March 2017: 4.3%).
- Group’s share of cash and undrawn bank facilities at 30 September 2017 of £266m (31 March 2017: £267m).
Operational Highlights – portfolio positioned to capture ERV
- 5% valuation increase of London investment portfolio valued at £712m (71% of investment portfolio) at 30 September 2017 – 31 March 2017: £666m (65%).
- C-Space EC1, a 61,973 sq ft office building on City Road, was sold post half-year end for £74.0m, a small premium to its 30 September 2017 and 31 March 2017 book values.
- Contracted rents on our London portfolio, following the C-Space sale and including pre-lets at The Bower, of £25.3m compare to an ERV of £43.3m (like-for-like increase of 4.6%) – 31 March 2017: £27.9m contracted rents with ERV of £44.9m.
- At One Creechurch Place EC3, we have signed leases with two tenants for space totalling 131,879 sq ft, representing 48% of the building and have agreed terms with another two tenants for 60,017 sq ft which, if concluded, will result in the building being 70% let.
- At 25 Charterhouse Square EC1, 70% of the building now let at average rents of £75.50 psf on the offices and £59.35 psf on the ground floor retail.
- At The Loom EC1, we have let an additional 12,850 sq ft of newly refurbished space at between £52.50 psf and a record £55.00 psf.
- At The Bower EC1, we are on target to complete the refurbishment of The Tower by July 2018. Marketing of the remaining space, with 34% already pre-let to WeWork, has commenced and initial interest is encouraging.
- At Barts Square EC1, 128 of the 144 residential units (89%) in Phase One have exchanged (31 March 2017: 116 units) with a further three units reserved.
- 13 sales at Barts Square have completed by 14 November 2017 with the remaining 115 sales due to complete by March 2018 and expected to deliver net proceeds of £56m.
- Comprises four office buildings generating £5.4m of contracted rents against an ERV of £7.2m and valued at £87.6m.
- Trinity Court, a 47,443 sq ft office building, acquired in May 2017 for £12.9m. An extensive refurbishment of the building is proposed.
- Comprises 23 predominantly single let assets located around the main UK transport networks generating £11.3m of contracted rents against an ERV of £11.9m and valued at £150.8m.
- One asset sold in the period to an owner-occupier at its book value of £9.3m.
- A new ten year lease completed to the existing tenant at our 65,000 sq ft unit at Telford at passing rent, with good interest in our only remaining vacant property in Doncaster.
- The strategic sale of the retirement village portfolio for £102m, post the half year, reflects a 13% discount to book value with this sales value reflected in the carrying values at 30 September 2017.
- The sale reduces Group borrowings by £46m and boosts cash reserves by £51m of which the payment of £26m is deferred for 12 months.
- During the half year to 30 September 2017, we sold three retail assets for £73.3m at a profit of £1.5m.
- Since 1 April 2016, we have sold £132m of non-core investment assets at 1.3% premium to book value.
- Following the post period end sales, the non-core portfolio includes three regional offices and one retail asset, valued in total at £34.7m, and land valued at £5.9m. Non-core assets now comprise just 4.0% of the total current portfolio (31 March 2017: 17.6%).
For further information, please contact:
Helical plc 020 7629 0113
Gerald Kaye (Chief Executive)
Tim Murphy (Finance Director)
Address: 5 Hanover Square, London W1S 1HQ
FTI Consulting 020 3727 1000
Dido Laurimore/Tom Gough/Richard Gotla
Half Year Results Presentation
Helical will be holding a presentation for analysts and investors at 11am, Wednesday 15 November 2017 at FTI Consulting, 200 Aldersgate, Aldersgate Street, London, EC1A 4HD. If you would like to attend, please contact Jenni Nkomo on 020 3727 1000, or firstname.lastname@example.org.
The presentation will be on the Company’s website www.helical.co.uk and a conference call facility will be available. The dial-in details are as follows:
Participants, Local – London, United Kingdom: +44 (0)330 336 9411
Confirmation Code: 8623415