back Annual Results for the Year to 31 March 2018

HELICAL – TRANSFORMATION COMPLETED

Gerald Kaye, Chief Executive, commented:

“Today’s results reflect the completion of the transformation of the Helical Group over the last two years from a multi-sector, geographically spread UK property company, into an office-led investment and development company focused purely on London and Manchester.

“We believe that London will remain the best source of potential capital gains and development profits for the foreseeable future with Manchester being the most dynamic regional city in the UK. Our ongoing focus is on maximising the potential of our current portfolio, both in terms of generating development and valuation surpluses but also on capturing the ERV of the assets we own to ensure a sustainable surplus of rental income over all costs. We also continue to seek exciting opportunities to add to our portfolio of assets, a recent example being the over-ground development of the Farringdon East Elizabeth Line Station. Our much reduced gearing levels have increased the Group’s firepower and balance sheet capacity significantly and will enable us to add to our pipeline of opportunities in the future.

“Our newly refocused and reprioritised portfolio is a select showcase for London and Manchester. We create buildings for today’s occupiers who demand more inspiring space with distinctive architectural detail, carefully curated public realm, market leading amenities, high quality management and our flexible approach to leasing. Applying this philosophy, we seek to maximise Shareholder returns through delivering income growth from creative asset management and capital gains from our development activity as we continue to drive the future vision of Helical.”

Operational Performance

  • Investment property sale proceeds on disposals of £349m in the year at 6.2% above book value following the Group’s exit from the logistics and retail sectors.
  • 41 new office lettings in London of 268,336 sq ft during the year, generating £16.6m (our share £5.7m) of rental income at 8.1% above 31 March 2017 ERVs.
  • Since the year end, we have let three additional floors at The Tower, London EC1 to an existing tenant of Phase One in line with market rents. This takes the office space let at The Tower, prior to completion of the building works, to 52%.
  • A further 10 office lettings in Manchester of 79,657 sq ft occurred in the year generating rental income of £1.3m at 10.8% above 31 March 2017 ERVs.
  • Sale of the retirement village portfolio for £102m, a discount of 13.5% to book value.
  • Capital expenditure of £104m incurred on our office development programme, with £76m remaining to be expended in 2018-2020.
  • 294,000 sq ft of office developments under construction for delivery in 2018-19.
  • New 89,000 sq ft office development started at Farringdon East Elizabeth Line Station for delivery in Q4 2019.

Financial Highlights

Property Valuations

  • Group’s share of property portfolio £910m (31 March 2017: £1,205m) following £484m of disposals.
  • Unleveraged return of property portfolio as measured by IPD delivered strong outperformance of 11.1% (2017: 9.4%) compared to 9.3% (2017: 4.4%) for the benchmark index.
  • Investment property valuations, on a like-for-like basis, up 4.5% (5.0% including sales and purchases).

Earnings

  • IFRS basic earnings per share of 22.3p (2017: 34.0p).
  • IFRS profit before tax of £30.8m (2017: £41.6m).
  • Total Accounting Return of 5.3% (2017: 8.3%).
  • See-through Total Property Return of £68.8m (2017: £79.9m).
    • Group’s share of net rental income of £36.1m (2017: £47.0m).
    • Development losses of £8.0m (2017: £5.7m), after provisions of £4.1m (2017: £12.8m).
    • Net gain on sale and revaluation of investment properties of £40.7m (2017: £38.6m).
  • EPRA loss per share of 7.0p (2017: earnings of 0.5p).
  • Final dividend proposed of 7.00p per share (2017: 6.20p) – up 12.9%.

Balance Sheet

  • Net asset value of £533.9m (31 March 2017: £516.9m) – up 3.3%.
  • EPRA net asset value per share down 1.1% to 468p (31 March 2017: 473p).
  • EPRA triple NAV per share up 1.4% to 448p (31 March 2017: 442p).

Financing

  • See-through loan to value reduced to 39.9% (31 March 2017: 51.4%).
  • 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 31 March 2018 of £277m (31 March 2017: £267m).

Portfolio Update

London Portfolio

  • 4.2% valuation increase, on a like-for-like basis, of our see-through London investment portfolio, valued at £700m at 31 March 2018 (84.8% of investment portfolio) compared with £666m at 31 March 2017 (65.5% of investment portfolio).
  • Contracted rents on our see-through London portfolio at 31 March 2018, including pre-lets at The Bower, increased to £28.4m (2017: £27.9m) compared to an ERV of £49.6m (2017: £45.0m).

Manchester Portfolio

  • 10.8% valuation increase, on a like-for-like basis, of our Manchester investment portfolio, valued at £98m at 31 March 2018 (11.9% of investment portfolio) compared to £71.5m at 31 March 2017 (7.0%).
  • Contracted rents on the Manchester portfolio at 31 March 2018 increased to £4.7m (2017: £4.1m) compared to an ERV of £8.1m (2017: £5.6m).

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
Website: www.helical.co.uk
Twitter: @helicalplc

FTI Consulting 020 3727 1000
Dido Laurimore/Tom Gough/Richard Gotla
schelical@fticonsulting.com

Results Presentation

Helical will be holding a presentation for analysts and investors starting at 11am on Thursday 24 May 2018 at the offices of FTI Consulting, 200 Aldersgate, Aldersgate Street, London, EC1A 4HD. If you would like to attend, please contact Alex King on 020 3727 1000, or email schelical@fticonsulting.com.

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:

Conference Call Details:  
Participants, Local – London, United Kingdom: 44 (0)330 336 9105
Confirmation Code: 1723085

Webcast Link:

http://webcasting.brrmedia.co.uk/broadcast/5ab109118e43d12e0d13b41a