CEO Statement
21 November 2018

Gerald Kaye Chief Executive

I am pleased to present the Company’s 2018 Half Year Results.

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.

Results for the Half Year

The profit before tax for the half year to 30 September 2018 was £29.1m (2017: £1.2m) with a Total Property Return of £43.2m (2017: £15.4m). The reduction in net rents to £11.7m (2017: £17.9m) reflects the sale of £276m of investment assets over the preceding 12 months. Developments contributed profits of £4.1m (2017: £3.3m) before provisions of £6.2m (2017: £11.5m). The gain on sale and revaluation of the investment portfolio contributed £33.6m (2017: £5.7m).

Total see-through finance costs were £8.4m (2017: £14.1m), offset by interest receivable of £1.0m (2017: £1.2m) to give net finance costs of £7.4m (2017: £12.9m). An increase in expected future interest rates led to a credit from the valuation of the Group’s derivative financial instruments of £0.3m (2017: £2.9m). The valuation of the Group’s Convertible Bond gave rise to a credit of £1.0m (2017: charge of £0.1m). Recurring administration costs were £5.6m (2017: £5.6m) and the provision for performance related remuneration, including associated NIC, was £2.3m (2017: £0.5m).

The sale of The Shepherds Building for £125.2m, which exchanged on 13 September and completed on 5 October, has crystallised the payment of a tax liability which had previously been provided for through deferred tax. As a consequence, a corporation tax charge of £11.2m (2017: £nil) has been recognised in the Half Year Results, offset by a reduction in the Group’s deferred tax provision of £8.0m. A net tax charge of £3.2m (2017: £0.8m) has been provided for.

The profit for the period, after recognition of this tax charge, was £25.9m (2017: £0.4m) and this strong performance allows the Board to declare an Interim Dividend of 2.60p (2017: 2.50p), an increase of 4.0%.


Since the start of the financial year, the Group has sold £155m of investment properties (including the sale of The Shepherds Building) and £35m of development stock. These sales, net of investment in the portfolio of £89m, were used to reduce pro-forma net borrowings to £248m, and our see-through loan to value ratio from 39.9% at 31 March 2018, to a pro-forma 29.6%. Our see-through net gearing, the ratio of net borrowings to the net asset value of the Group, has fallen from 68% to a pro-forma 45%.

During the period under review, the average debt maturity reduced to 2.6 years (31 March 2018: 3.0 years) as two of our largest bank facilities, financing The Bower and Barts Square, approach their repayment dates in Q4 2019. Since the period end, the banks have agreed to extend these facilities by 20 months and 24 months respectively. Our £100m Convertible Bond is due for repayment in June 2019 and the Group has allocated funds to facilitate this repayment. The Group has a significant level of liquidity and, in addition to the £100m for the Convertible Bond, has £309m of cash and unutilised bank facilities (on a pro-forma basis), following the sale of The Shepherds Building and the receipt of the deferred consideration from the sale of the retirement village portfolio last year. The cash and bank facilities are available to fund capital works on the portfolio and future acquisitions.

Board Appointment

During the period we appointed Joe Lister as an independent Non-Executive Director of the Board and a member of the Audit and Risk, Nominations and Remuneration Committees. Joe is the Chief Financial Officer and an Executive Director of Unite Group plc and I welcome him to the Board.


In reporting on our half year results to 30 September 2018, we are doing so at a time of heightened uncertainty surrounding the terms of the UK’s exit from the European Union and in the face of numerous potential headwinds in Europe and further afield. We believe that this uncertainty may provide opportunities for those with operational and financial capacity, as well as proven experience. Furthermore, and notwithstanding these potential headwinds, 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.

2018 Half Year Performance Highlights


Our Group’s main objective is to maximise growth in net asset value which we seek to achieve through increases in investment portfolio values and from retained earnings from other property related activity. EPRA net asset value per share is the property industry’s preferred measure of the share of net assets attributable to each share as it includes the fair value of net assets on an ongoing long term basis.

EPRA net asset value per share up 0.6% to 471p (31 March 2018: 468p).

2018 Half Year Operational Highlights


  • 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).



  • 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 Valuation

  • 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).


  • 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).


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).

2018 Half Year Highlights

Profit before tax
EPRA Net asset value
Total property return

2018 Half Year Results

View our Half Year results, reports and presentations.