back HALF YEAR RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2018

Helical well positioned for further growth.

Gerald Kaye, Chief Executive, commented:

“The financial year to date has seen Helical make significant progress on three main fronts: development completions, letting activity and balance sheet strength. First, we have achieved practical completion on two of our largest London developments at The Tower, EC1 and the first phase of the residential at Barts Square, EC1. We expect to complete construction works at the office scheme at One Bartholomew, EC1 by early December. This will leave just two major projects under construction, being the second, and final, phase of the residential at Barts Square, EC1 and the office development at Farringdon East, EC1, both due to complete by Q4 2019. Secondly, we have made good progress in letting space at our major projects with 226,090 sq ft of office space let in London since 1 April 2018 and 27,819 sq ft let in Manchester over the same period. Finally, sale proceeds of £155m from the disposal of investment properties have reduced the Group’s net borrowings, significantly enhancing our firepower.

“We believe that London will remain the best source of potential capital gains and development profits in the medium and long term, whilst we continue to view Manchester as the most dynamic regional city in the UK, with significant potential. Our transformed and more focused portfolio combined with low gearing provide the Company with capacity for new projects. As a consequence, Helical is well positioned for further growth through driving returns from our current portfolio and by sourcing new projects.”

Operational Performance

In our office development programme:

  • Practical completion was achieved at The Tower, EC1 in August 2018 and is due to be achieved at One Bartholomew, EC1 by December 2018.
  • Construction commenced at our 88,680 sq ft office development at Farringdon East, EC1 with delivery expected in Q4 2019.

179,364 sq ft of new London office lettings during the period delivered contracted rent of £12.1m (Helical share £4.4m at 5.2% above 31 March 2018 ERVs), including:

  • Three floors let at The Tower, EC1 to Farfetch, an existing tenant of The Warehouse, EC1, representing 29,671 sq ft.
  • 54,482 sq ft of the 214,033 sq ft office building at One Bartholomew, EC1 pre-let to Trade Desk Inc.
  • A further 18 office lettings of 95,211 sq ft, representing £5.5m of contracted rents (Helical share £2.3m).

Post period end, a further 46,726 sq ft of London lettings delivered contracted rent of £3.1m (Helical share £2.1m at 2.3% above 31 March 2018 ERVs), including:

  • Two floors at The Tower, EC1 (19,576 sq ft), taking the building to 63% let.
  • An additional floor (15,993 sq ft) at One Creechurch Place, EC3 (now 94% let) with only one floor remaining, triggering the first part of the promote payment.
  • 11,157 sq ft at The Loom, E1, taking the building to 100% occupancy.

In Manchester, four office lettings on 12,565 sq ft, with a further 15,254 sq ft let post period end, generated rental income of £0.7m at 7.0% above 31 March 2018 ERVs.

Investment property sale proceeds of £155m since 31 March 2018 achieved at 10.6% above book value (including the sale of The Shepherds Building).

Financial Highlights

Earnings

  • IFRS basic earnings per share of 21.8p (2017: 0.3p).
  • IFRS Profit before tax of £29.1m (2017: £1.2m).
  • Total Accounting Return of 5.1% (2017: 0.1%).
  • See-through Total Property Return of £43.2m (2017: £15.4m):
    • Group’s share of net rental income of £11.7m reflecting the impact of the sale of non-core properties (2017: £17.9m).
    • Development losses of £2.1m (2017: £8.2m), after provisions of £6.2m (2017: £11.5m).
    • Net gain on sale and revaluation of investment properties of £33.6m (2017: £5.7m).
  • EPRA loss per share of 4.6p (2017: 5.9p).
  • Interim dividend declared of 2.6p per share (2017: 2.5p), up 4.0%.

Balance Sheet

  • Net asset value up 3.5% to £552.6m (31 March 2018: £533.9m).
  • EPRA net asset value per share up 0.6% to 471p (31 March 2018: 468p).
  • EPRA triple net asset value per share up 2.7% to 460p (31 March 2018: 448p). 

Property Valuations

  • See-through property portfolio of £962.8m (31 March 2018: £909.6m), reduced to £837.6m, following the sale of The Shepherds Building in October 2018.
  • Investment property valuation gain, on a like-for-like basis, of 3.3% (4.1% including sales and purchases).

Financing 

  • See-through loan to value of 41.4% (31 March 2018: 39.9%). Pro-forma loan to value of 29.6%.
  • Average maturity of the Group’s share of debt of 2.6 years (31 March 2018: 3.0 years), at an average cost of 4.3% (31 March 2018: 4.3%).
  • Group’s share of cash and undrawn bank facilities at 30 September 2018 of £289m (31 March 2018: £277m).

Portfolio Update

London Portfolio (excluding The Shepherds Building) 

  • 3.5% valuation increase, on a like-for-like basis, of our see-through London investment portfolio, valued at £657m (84.3% of investment portfolio) compared with £700m at 31 March 2018 (84.8% of investment portfolio).
  • Contracted rents on our see-through London investment portfolio of £25.4m (31 March 2018: £28.4m), compared to an ERV of £43.7m (31 March 2018: £49.6m).
  • WAULT of 8.4 years on the London portfolio (31 March 2018: 5.8 years).

Manchester Portfolio

  • 1.7% valuation increase, on a like-for-like basis, of our Manchester investment portfolio, valued at £122m at 30 September 2018 (15.7% of investment portfolio) compared to £98m at 31 March 2018 (11.9% of investment portfolio).
  • Contracted rents on the Manchester investment portfolio at 30 September 2018 increased to £5.9m (31 March 2018: £4.7m), compared to an ERV of £9.6m (31 March 2018: £8.1m).
  • WAULT of 4.0 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/Tom Gough/Richard Gotla

schelical@fticonsulting.com


Half Year Results Presentation

Helical will be holding a presentation for analysts and investors at 11am, Wednesday 21 November 2018 at 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:

Participants, Local – London, United Kingdom: +44 (0)330 336 9105

Confirmation Code: 3000538

 

Webcast Link:

http://webcasting.brrmedia.co.uk/broadcast/5bed533355433b0e0cf69b5f