back Annual Results for the Year to 31 March 2019

A YEAR OF STRONG PROGRESS

Gerald Kaye, Chief Executive, commented:

“The results for the year to 31 March 2019 reflect significant progress for Helical, now an office-led investment and development company focused purely on London and Manchester. We have completed three of our four on-site office development schemes, have let 304,073 sq ft at rents 4.3% above ERVs and have sold £167m of investment assets at a 12.0% premium to book value.

“We now have a collection of newly redeveloped or refurbished assets of premium quality which are attractive to occupiers and situated in desirable locations. We were delighted to announce earlier this week the acquisition, in a 50:50 joint venture, of a major site for the development of c.192,000 sq ft of offices in Farringdon, London EC1. This scheme supplements our existing assets located in the Tech Belt in EC1 and E1.

“We have a tremendous track record in London, built up over the last 25 years, and we believe this experience and our longstanding sector relationships will enable us to continue to add new opportunities to our pipeline. Our increased financial capacity, following the transformation of the portfolio over the last two years, allied to our current operational capacity, enables us to look forward with confidence in our ability to deliver capital profits and increased earnings.”

Operational Performance

  • In our office development/refurbishment programme:
    • Practical completion was achieved at The Tower, London EC1 in August 2018, at One Bartholomew, London EC1 in December 2018 and at Trinity, Manchester in January 2019, delivering a total of 455,127 sq ft of new space.
    • Construction continues at our 88,680 sq ft office development at Farringdon East, renamed Kaleidoscope, London EC1, with completion expected in December 2019.
  • 268,782 sq ft of new London office lettings during the year delivered contracted rent of £18.7m (Helical share £6.7m at 3.2% above 31 March 2018 ERVs).
  • Post year end, 62,854 sq ft has been let at One Bartholomew at premium rents.
  • In Manchester, five office lettings of 15,191 sq ft, with a further 8,208 sq ft let post year end, generated rental income of £538,000 at 15.9% above 31 March 2018 ERVs.
  • We have completed six lettings of 20,100 sq ft to restaurants or retailers, including Albion & East (trading as Serata Hall) at The Tower, London EC1 and Stem + Glory at Barts Square, London EC1 for contracted rents of £871,000 (Helical share £686,000) at 9.0% above 31 March 2018 ERVs.
  • Investment property sale proceeds of £167m since 31 March 2018 achieved at 12.0% above book value.

Financial Highlights

Earnings

  • IFRS basic earnings per share of 35.8p (2018: 22.3p).
  • IFRS Profit before tax of £43.5m (2018: £30.8m).
  • Total Accounting Return1 of 8.4% (2018: 5.3%).
  • See-through Total Property Return1 of £81.4m (2018: £68.8m):
    • Group’s share1 of net rental income of £25.2m (2018: £36.1m).
    • Development losses of £4.4m (2018: £8.0m), after provisions of £13.7m (2018: £4.1m).
    • Net gain on sale and revaluation of investment properties of £60.6m (2018: £40.7m).
  • EPRA loss per share1 of 8.4p (2018: 7.0p).
  • Final dividend proposed of 7.50p per share (2018: 7.00p), up 7.1%.
  • Total dividend for the year of 10.10p (2018: 9.50p), up 6.3%.

Balance Sheet

  • Net asset value up 6.3% to £567.4m (31 March 2018: £533.9m).
  • EPRA net asset value per share1 up 3.0% to 482p (31 March 2018: 468p).
  • EPRA triple net asset value per share1 up 3.8% to 465p (31 March 2018: 448p).

Property Valuations

  • IFRS property portfolio value of £778.8m (31 March 2018: £791.9m).
  • See-through property portfolio1 of £876.4m (31 March 2018: £909.6m).
  • Total property portfolio performance, as measured by MSCI, of 10.1% compared to the MSCI Central London Offices Total Return Index of 4.8%.
  • See-through investment property valuation gain, on a like-for-like basis, of 6.8% (7.4% including purchases and gains on sales).

Financing

  • See-through loan to value1 reduced to 30.6% (31 March 2018: 39.9%).
  • See-through net borrowings1 of £268.6m (2018: £362.9m).
  • Average maturity of the Group’s share1 of secured debt of 3.4 years (31 March 2018: 3.5 years), increasing to 4.2 years, on exercise of options to extend current facilities.
  • See-through average cost of secured facilities1 of 4.1% (31 March 2018: 4.4%).
  • £100m 4.0% Convertible Bond to be repaid in June 2019 from existing cash resources.
  • Group’s share1 of cash and undrawn bank facilities of £382m (31 March 2018: £277m).

Portfolio Update

London Portfolio

  • 6.6% valuation increase, on a like-for-like basis, of our see-through London investment portfolio, valued at £693.8m at 31 March 2019 (85.0% of investment portfolio) compared to £699.9m at 31 March 2018 (84.8% of investment portfolio).
  • Contracted rents on our see-through London investment portfolio of £27.5m (2018: £28.4m) compared to an ERV of £42.4m (2018: £49.6m).
  • WAULT of 8.0 years on the London portfolio (31 March 2018: 5.8 years).

Manchester Portfolio

  • 7.8% valuation increase, on a like-for-like basis, of our Manchester investment portfolio, valued at £122.7m at 31 March 2019 (15.0% of investment portfolio) compared to £98.0m at 31 March 2018 (11.9% of investment portfolio).
  • Contracted rents on the Manchester portfolio at 31 March 2019 increased to £5.7m (2018: £4.7m) compared to an ERV of £9.0m (2018: £8.1m).
  • WAULT of 3.9 years on the Manchester portfolio (31 March 2018: 4.2 years).

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/ Richard Gotla
schelical@fticonsulting.com

Results Presentation

Helical will be holding a presentation for analysts and investors starting at 9am on Thursday 23 May 2019 at the offices of FTI Consulting, 200 Aldersgate, Aldersgate Street, London, EC1A 4HD. If you would like to attend, please contact FTI Consulting 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 9125
Confirmation Code: 8740144

 

Webcast Link:

https://webcasting.brrmedia.co.uk/broadcast/5cadfaadeb566331974d5fc4