LATEST RESULTS

Annual Results for year ended 30 June 2018

KCR Residential REIT plc (AIM: KCR), the residential real estate investment trust group, is pleased to announce its annual results for the year ended 30 June 2018. A copy of the annual report and accounts will be posted to shareholders shortly, when it will also be available from the Company's website, www.kcrreit.com.

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Financial Highlights:

  • Assets under management increased 228 per cent to £27.4 million (2017 - £8.4 million)
  • Year-end NAV per share of 88.17p, up three per cent since FY 2017 (85.7p)
  • Corporate acquisitions during the period totalled £16 million
  • Consolidated operating profit up to £251,079 (2017 loss - £1.03 million)
  • Revenue lower at £265,936 (2017 - £514,746) but income from recent acquisitions will significantly increase revenue in FY19.

Acquisitions during the period

  • Purchase of the Ladbroke Grove portfolio (KCR (Kite) Limited) completed on 29 June with a fair value of investment property at acquisition of £7.3 million. The building is fully let and rental income is up 6.16 per cent in the four months since acquisition;
  • Purchase of the 27 flat Deanery Court, Chapel Riverside (Southampton) development completed on 29 June with a fair value of investment property at acquisition of £5.8 million. Final handover took place on 15 October and over 60 per cent of the building is already let or reserved;
  • Via a strategic partnership with Inland Homes, two supermarkets that form part of significant newly-built residential developments in Leighton Buzzard and West Drayton were purchased at a fair value of investment property at acquisition of £2.6 million.

Post-period-end, KCR raised £3.1 million through a placing of £901,500 in cash, conversion of £650,000 of convertible loan notes into equity, conversion of a creditor into equity and the payment in shares for a property acquisition from Inland Homes plc (£1.26 million). KCR issued 4,434,570 shares at 70p.

Dominic White, Chief Executive of KCR said: "The Company has made solid progress in scaling the business in 2018, whilst also adding both rental and capital value to its portfolio. The strategic partnership with Inland Homes is also bearing fruit, with two acquisitions completed since joining forces in May and further opportunities through Inland being analysed.

"We continue to examine potential acquisitions that will build value and revenue, with one currently in the latter stages of negotiation. At the same time, we will augment rental income significantly during 2019, having increased the number of rental units and upgraded properties. The Board is encouraged by the recent achievements and looks forward to reporting on further positive developments in the coming months."

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information for the purposes of the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

 

CHAIRMAN'S STATEMENT

Dear shareholder

I am delighted to introduce the fourth Annual Report that KCR Residential REIT plc ("KCR" or the "Company") has presented since its admission to AIM in July 2015.

We have made good strides in building the business, especially with the three transactions completed right at the end of the year. We have further transactions planned that should give us the size necessary to start generating profits from our rental activity. Dominic White has written about our achievements and plans in more detail in his letter.

What we do

As I mentioned last year, and it is worth repeating, KCR and its subsidiaries (together the "Group") operate primarily in the UK private rented residential investment market. We acquire whole blocks of studio, one-and two-bed apartments in major UK cities, close to transport links, that are rented to private tenants.

KCR is both an income and capital growth opportunity for its shareholders. It delivers income return from the collection of rents from tenants and capital return through investment in under-valued property assets that are marked to market value at acquisition.

The team grows income and asset value through building quality improvements, rental increases, physical extensions and repositioning, and where appropriate small-scale refurbishments. In particular, the directors search out residential blocks of apartments held within UK incorporated companies since these provide an opportunity for KCR to capitalise on the tax advantages afforded to UK REITs; in many cases, they generate immediate boosts to net asset value per share on acquisition.

The market in which we operate

The impact on the UK economy of Brexit, and the potential impact for the housing market, is a topic of much debate. Despite uncertainty around Brexit compounding the overall market slowdown, analysis of household income available to buy property indicates that there is further scope for value growth in the most affordable cities. Research from Hometrack reports that, despite the uncertainty, annual UK city house price inflation to the end of August 2018 is running at 3.9 per cent. Combining this with an average UK rental yield of 4.0 per cent reported by PropertyData implies a current average annual total return of 7.9 per cent for rented residential property.

KCR targets a specific segment of residential property. We buy low to mid-price blocks of flats aimed at new entrants and early-stage professionals. This continues to be a very resilient segment of the residential rental market. In general, house prices and rental values continue to rise in that segment. Higher price-band homes, particularly in Central London, which attract much of the press comment, have declined in value - these properties do not fall within KCR's investment strategy.

There continue to be positive economic fundamentals in the residential sector - strong demand and shortage of supply, in particular in the targeted low- to mid-price bands. This type of housing will, in our view, deliver attractive rental and capital value performance across the UK over the medium term.

Financial Result

We have had several successes this year, including a series of accretive acquisitions, improvements in portfolio valuations and maintaining high levels of occupancy across the portfolio. To an extent, we have been held back by our planned November 2017 equity raise and move to the Main Market of the London Stock Exchange. Our pitch to investors, to take advantage of the huge residential market opportunity across the major conurbations in the UK, remains the right strategy for the future. Although we attracted interest from several key institutional investors, we, along with other investment vehicles sponsored by managers such as Aviva and Aberdeen Management, did not achieve our goals. This had a material but one-off effect on our finances.

KCR relies on raising capital (both equity and debt) to invest in the residential housing market. While equity markets remain volatile, we have chosen to raise smaller amounts of capital around specific property acquisitions. We have succeeded in this strategy, having raised capital from well-resourced and enthusiastic providers in March 2018 and July 2018. We continue to present an attractive equity opportunity to potential investors. We have a strong pipeline, an experienced and energetic management team, access to transformational deals and a network of enthusiastic supporters.

I look forward to updating you further as we continue to scale up our activities such that KCR generates a profit and can then deliver on its goal of paying regular dividends to shareholders.

M D M Davies

Chairman

 

CHIEF EXECUTIVE'S LETTER

Dear shareholder

I have pleasure in reporting to you on the progress of the Group for the year to 30 June 2018.

KCR's short-term objective is to grow the size of its rented portfolio to deliver an increase in revenue that, together with value increases over time, result in profitability and an ability to pay dividends. At the same time, we focus on growing net asset value per share, another key indicator of a successful property company.

In the period under review, the value of the assets managed has increased by 228 per cent to £27.4 million, the Group reported an operating profit of £251,079, and net asset value per share increased by three per cent to 88.17p.

Property portfolio

Acquisitions during the year
KCR completed three acquisitions (two company purchases and one investment property), with a total value of £16 million, during the period, all on 29 June 2018. Two of the acquisitions, sites at Southampton and Leighton Buzzard/West Drayton, were the first transactions closed after forming a strategic relationship with Inland Homes Plc, which we announced on 31 May 2018. The acquisitions were:

  • The purchase of the Ladbroke Grove portfolio (KCR (Kite) Limited) with a fair value of investment property at acquisition of £7.3 million. The portfolio consists of 16 one- and two-bedroom apartments in three buildings, and one stand-alone flat in Harrow Road. Since its acquisition, units have been refurbished as tenants leave and then rented back to the private market. There have been average increases of 10.1 per cent for both renewals and new tenancies. Four newly refurbished units have achieved an average increase in rent of 16.2 per cent.
  • The purchase of Deanery Court, Chapel Riverside (Southampton) with a fair value of investment property at acquisition of £5.8 million. The block consists of 27 new-build two-bedroom apartments, each with a view over the River Itchen and a parking space, situated a short walk from the centre of the city. The property has been well received by the rental market. Within two weeks of handover of the building from the developer, nearly two-thirds of the building had been let at rents above our internal forecasts. We expect the remainder of the property to be let in the coming months and for the property value to improve in the short term as the surrounding area continues to be developed.
  • Two supermarkets that form part of significant newly built residential buildings in Leighton Buzzard and West Drayton at a fair value of investment property at acquisition of £2.8m (KCR (Cygnet) Limited). The properties are let on 15-year leases, index-linked to inflation, to Sainsbury's and the Co-op respectively, and will deliver a 4.9 per cent net annual income to KCR.

Existing portfolio
In addition, KCR acquired six flats in its freehold Heathside property in North London. KCR now owns seven flats in the block and intends to let these out on assured short-hold tenancies (ASTs) during the year. We benefit from the marriage value in such transactions and the property itself provides high-quality living accommodation for those over the age of 60 who need comfort and convenience but not care. We intend to continue to improve the building and our offer to tenants and leaseholders.

The existing portfolio continues to perform well.

  • The block at Coleherne Road (K&C (Coleherne) Limited) has small-sized units (studio and one -bed flats), which continue to be exactly what the rental market is looking for. Occupancy has been maintained at 100 per cent and where there have been renewals, rents have increased at least in line with inflation.
  • The Osprey portfolio (K&C (Osprey) Limited) consists of 159 flats and 13 houses / long-leasehold units in seven locations. The portfolio generated lower income from leaseholders' sales, management fees and lease-renewal premium income than in the previous year; however, these income streams are largely outside our control. However, the portfolio continues to grow in value and be a significant medium-term value-adding opportunity as the terms of the long-leasehold apartments shorten. More than one-third of the long leases have durations of 67 years or less.

Development opportunities
Following a Government consultation on delivering more homes by increasing densities on brownfield land, the current administration has expressed an intention to take forward a policy of permitted development for extensions, both upward (adding new floors) and outward (development onto under-utilised areas of existing sites). The Housing White Paper proposes a package of measures in support of this policy. If enacted, this policy change would give KCR the potential to add numerous residential units to its existing buildings and create significant value across its portfolio, particularly on the buildings located in Ladbroke Grove and on the Osprey portfolio.

Financial

Since most of the acquisition activity completed on the last business day of the financial year, it had no impact on revenue in this year's results. Since the year-end, the revenue benefit of these acquisitions is already beginning to be seen.

Revenue in this financial period continued to be driven by the Coleherne and Osprey portfolio assets. Revenue decreased to £265,936 (2017 - £514,746) due to lower income from the Osprey portfolio, as explained above. Run-rate revenue is now significantly greater and will increase further once Southampton has been fully let and our next pipeline acquisition completes.

The Group reports an improved consolidated operating profit of £251,079 (2017 - loss £1,029,215) and a significantly smaller loss before taxation of £67,574 (2017 - loss £1,224,571). As the chairman has reported in his letter, the financial impact of the unsuccessful fundraising damaged our ability to grow in the way that we had anticipated and hoped, but we nevertheless made valuable acquisitions during the year and are planning more during the current financial year.

Total assets at 30 June 2018 increased by 228 per cent to £27.4 million (2017 - £8.4 million). Net assets increased by 92 per cent to £8.69 million (2017 - £4.52 million) and net asset value per share increased by three per cent from to 88.17p (2017 - 85.7p (as adjusted for the 10:1 share consolidation announced in October 2017).

Subsequent Events

On 13 July 2018, KCR announced that it had raised £3.1 million through a placing of £901,500 in cash, conversion of £650,000 of convertible loan notes into equity, conversion of a creditor into equity and the payment in shares for a property acquisition from Inland Homes plc (£1.26 million). KCR issued 4,434,570 shares at 70p. Full details of the transaction are reported in the Investors section of the Company's website www.kcrreit.com in the announcement dated 13 July 2018.

On 15 October 2018, the block at Southampton was handed over to KCR. As reported above, we have made rapid strides in letting these most attractive apartments, with 63 per cent either let or reserved as at the date of this report.

Future Prospects

During the year, the Group increased the size of its portfolio significantly and continued to add both rental and capital value to its properties. The acquisition of £16 million of property on the last day of the financial year will lead to considerable growth in revenue during the year to 30 June 2019.

The team continues to source investment opportunities that would add significantly to revenue and net asset value per share. KCR is currently in advanced negotiations on one such investment that could increase the portfolio size by more than 55 per cent.

We hope to be able to report further positive developments to you in the coming months.

Dominic A White
Chief executive

 

STRATEGIC REPORT

The directors present the strategic report of KCR Residential REIT plc ('KCR' or the 'Company') and its subsidiaries (together, the 'Group') for the year ended 30 June 2018.

PRINCIPAL ACTIVITY

The Group carries on the business of acquiring and managing residential property in the UK for letting to third parties on long and short leases. At the year-end, the Group consisted of the Company, which is a public company limited by shares, and seven subsidiaries.


  1. K&C (Coleherne) Limited owns a freehold residential property in Chelsea, London containing ten studio apartments
  2. K&C (Osprey) Limited owns the freehold of several retirement properties let on long leases to residents and provides management services in respect of these properties and to third party landlords
  3. K&C (Newbury) Limited owns no property and is now effectively dormant. The valuation of the company has been written down to nil via an impairment provision
  4. KCR (Kite) Limited owns three freehold residential properties in Ladbroke Grove, London and a flat on Harrow Road
  5. KCR (Southampton) Limited owns a freehold block of 27 one- and two-bedroom apartments In Ocean Village, Southampton
  6. KCR (Cygnet) Limited owns long leaseholds on two supermarket sites rented out to the Co-op and Sainsbury's
  7. K&C REIT Limited (dormant).

GROUP STRATEGY

The directors intend to build a significant presence in the residential letting market, primarily through the acquisition of UK-registered special purpose vehicles that own residential property for letting to third parties.

RESULTS

The Group reports a consolidated operating profit of £251,079 for the year to 30 June 2018 (2017 - loss £1,029,215).

REVIEW OF BUSINESS AND FINANCIAL PERFORMANCE

The Board has reviewed whether the Annual Report, taken as a whole, presents a fair, balanced and understandable summary of the Group's position and prospects, and believes that it provides the information necessary for shareholders to assess the Group's position, performance, and strategy.

As reported in the Chief Executive's letter, most of the acquisition activity was completed on the last business day of the financial year and had no impact on revenue in this year's results. Since the year-end, run-rate revenue has significantly increased and will grow further once Southampton has been fully let and our next pipeline acquisition completes.

Revenue in this financial period continued to be driven by the Coleherne and Osprey portfolio assets. Revenue decreased to £265,936 (2017 - £514,746) due to lower income from the Osprey portfolio.

The Group reports an improved consolidated operating profit of £251,079 (2017 - loss £1,029,215) and a significantly smaller loss before taxation of £67,574 (2017 - loss £1,224,571). The financial impact of the unsuccessful fundraising damaged our ability to grow but we nevertheless made valuable acquisitions during the year and are planning more during the current financial year.

Total assets at 30 June 2018 increased by 228 per cent to £27.4 million. Net assets increased by 92 per cent to £8.69 million and net asset value per share increased by three per cent from to 88.17p.

KEY PERFORMANCE INDICATORS

The directors and management team monitor key performance indicators relevant to each of the subsidiaries to improve Group performance. Management reports to the board if data show significant variances against expected outcomes and proposes mitigation action as necessary.

Examples of the KPIs used to monitor aspects of performance include:

1. At property level

  • 1.1. Vacancy rate in terms of number of units available and potential rental income
    Target occupancy of at least 90 per cent achieved
  • 1.2. Outstanding rents as a percentage of rental income
    Target debtor balance of less than 10 per cent of rental revenue achieved.

2. At Group level

  • 2.1. Gross assets under management
    Target of £20 million of gross assets by 30 June 2018 achieved.

RISKS AND UNCERTAINTIES

The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and regular reporting that these risks are minimised as far as possible.

The principal risks and uncertainties facing the Group at this stage in its development are:

  • Financing and liquidity risk
    The Company has an ongoing requirement to fund its activities through the equity markets and in future to obtain finance for property acquisition and management. Although there is no certainty that such funds will be available when needed, the directors regularly focus on developing the Group's capital structure.
  • Financial instruments
    Details of risks associated with the Group's financial instruments are given in the notes to the financial statements. The directors seek to mitigate these risks in manners appropriate to the risk.
  • Valuations
    The valuation of the investment property portfolio is inherently subjective as it is made on the basis of assumptions made by the valuer that may not prove to be accurate. The outcome of this judgment is significant to the Group in terms of its investment decisions and results. The directors, who have long experience of property, seek to mitigate this risk by employing independent valuation experts such as Lambert Smith Hampton and Harding Green to review values of the material assets in the portfolio.

INTERNAL CONTROLS AND RISK MANAGEMENT

The directors are responsible for the Group's system of internal control. Although no system of internal control can provide absolute assurance against material misstatement or loss, the Group's system is designed to provide reasonable assurance that problems are identified on a timely basis and dealt with appropriately.

In carrying out their responsibilities, the directors have put in place a framework of controls to ensure as far as possible that (i) ongoing financial performance is monitored in a timely manner, (ii) where required, corrective action is taken and (iii) risk is identified as early as practically possible. The directors have reviewed the effectiveness of internal controls.

The Board, subject to delegated authority, reviews, among other things, capital investment, property sales and purchases, additional borrowing facilities, guarantees and insurance arrangements.

BRIBERY RISK

The Group has adopted an anti-corruption policy and whistle-blowing policy under the Bribery Act 2010. Notwithstanding this, the Group may be held liable for offences under that Act committed by its employees or subcontractors, whether or not the Group or the directors had knowledge of the commission of such offences.

OTHER MATTERS

  • i. Environmental
    The Group understands the importance of operating its business in a manner that minimises any risks to the environment. Its policies seek to ensure that it achieves this goal.
  • ii. Group employees
    The Group considers its employees to be its most valuable assets and ensures that it deals with them fairly and constructively at all times.
  • iii. Social matters
    The Group is aware that it has a responsibility to the communities where it operates and seeks to respect them at all times.
  • iv. Respect for human rights
    The Group always respects the human rights of its stakeholders.
  • v. Contributions to pension schemes
    During the year, the Group made contributions totalling £100,000 to the personal pension scheme of Dominic White. No pension scheme benefits are being accrued by the directors.

FORWARD-LOOKING STATEMENTS

This Annual Report contains certain forward-looking statements that have been made by the directors in good faith based on the information available at the time of the approval of the annual report and financial statements. By their nature, such forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements.

OUTLOOK

The Group has continued to purchase high-quality assets that will be able to support an increasing income yield. As last year, the Group is currently investigating several potential acquisitions. To achieve these, the Group will be required to raise more capital and it is working closely with funding sources, both equity and debt providers, to achieve this objective.

ON BEHALF OF THE BOARD:

James Cane

Director

 

DIRECTOR'S REPORT

The directors present their report with the financial statements of the Company and the Group for the year ended 30 June 2018.

A review of the business, risks and uncertainties and future developments is included in the Chairman's Letter, the Chief Executive's Letter, the Group Strategic Report and in the notes to the financial statements.

DIVIDENDS

The directors do not recommend payment of a dividend for the year (2017 - £nil).

Political donations

The Group made no political donations during the year (2017 - £nil).

Corporate governance statement

The Board is committed to maintaining high standards of corporate governance.

To the extent applicable, and to the extent able (given the current size and structure of KCR and the board of directors), the Company has adopted the Quoted Companies Alliance Corporate Governance Code. Details of how KCR complies with the Code, the reasons for any non-compliance, and the principles contained in the Code, are set out in the table included on the Company's website, www.kcrreit.com/content/investors/governance.asp.

Audit committee

The audit committee currently comprises Michael Davies, the chairman and James Cane. The committee is responsible for ensuring the financial performance, position and prospects of the Group are properly monitored and reported on, and for meeting the auditor and reviewing their reports relating to accounts and internal controls.

DIRECTORS

Name
Michael Davies
Dominic White
James Cane
Timothy James
Oliver Vaughan

 

The beneficial interests of the directors holding office at 30 June 2018 in the issued share capital of the Company were as follows:

Ordinary
Shares
Restricted
Preference
Shares
Name No. No.
Michael Davies 195,428 -
Dominic White - 1,500,000
James Cane 1,318 30,000
Timothy James 475,921 960,000
Oliver Vaughan 73,065 810,000

 

Included in the total of Oliver Vaughan's Ordinary shares above are 66,500 shares held in the name of Grosmont Investments Limited, a company that he controls.

Included in the total of Dominic White's holdings above are 1,000,000 Restricted Preference shares held in the name of his pension fund, White Amba Pension Scheme.

The beneficial interests of the directors holding office at 9 November 2018 in the issued share capital of the Company were as follows:

Ordinary
Shares
Restricted
Preference
Shares
Name No. No.
Michael Davies 195,428 -
Dominic White 57,143 1,765,357
James Cane 1,318 40,000
Timothy James 504,492 1,225,357
Oliver Vaughan 73,065 1,075,357

 

SUBSTANTIAL SHAREHOLDINGS

As at 9 November 2018, the directors had been notified that the following shareholders own a disclosable interest of three per cent or more in the Ordinary shares of the Company:

Name Interest
Energiser Investments plc 17.04%
Consumer Refund Service Limited 14.01%
Poole Investments Limited 12.59%
Venaglass Limited 11.08%
Timothy James 3.53%

 

DIRECTOR'S RENUMERATION

The directors received the following remuneration during the year:

2018 2017
Name Remuneration
£
Benefits-in-kind
£
Remuneration
£
Benefits-in-kind
£
Michael Davies - - - -
Dominic White 151,000 - 12,500 -
James Cane 60,000 - 44,500 -
Timothy James 80,000 - 15,000 -
Oliver Vaughan 30,000 - 15,000 -
Timothy Oakley (1) - - 32,500 -
Christopher James (1) - - 9,375 -
Patricia Farley (1) - - 3,500 -
321,000 - 132,375 -

 

(1) Timothy Oakley, Christopher James and Patricia Farley resigned from the board of directors on 31 March 2017.

During the previous year, fees of £50,000 plus irrecoverable VAT were paid to White Amba Limited, a company controlled by Dominic White.

During the year, the Group paid DGS Capital Partners LLP, a limited liability partnership of which Michael Davies is a member, fees of £36,000 (net of irrecoverable VAT) (2017 - £36,000).

DIRECTORS' INDEMNITIES AND INSURANCE

The Company has made qualifying third-party indemnity provisions for the benefit of its directors during the year and they remain in force at the date of approval of this Annual Report.

GOING CONCERN

The directors have adopted the going-concern basis in preparing the financial statements.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS"). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period. In preparing these financial statements, the directors are required to:

  • select suitable accounting policies and then apply them consistently;
  • make judgments and accounting estimates that are reasonable and prudent;
  • state that the financial statements comply with IFRS;
  • prepare the financial statements on the going-concern basis unless it is inappropriate to presume that the Group will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable the directors to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO THE AUDITOR

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the Group's auditor is unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the Group's auditor is aware of that information.

AUDITOR

The auditor, Moore Stephens LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD

Dominic White

Director

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

  30 June
2018
  30 June
2017
  £   £
CONTINUING OPERATIONS      
Revenue 265,936   514,746
Cost of sales (191,420)   (110,544)
GROSS PROFIT 74,516   404,202
       
Administrative expenses (1,317,971)   (1,157,098)
Revaluation on investment properties 1,235,377   116,000
OPERATING LOSS BEFORE SEPARATELY DISCLOSED ITEMS (8,078)   (636,896)
       
Separately disclosed administrative items      
Gain on bargain purchase 2,201,639   -
Share-based payments change (950,188)   (392,319)
Costs of acquisition of subsidiaries (318,295)   -
Costs associated with third-party fundraising (673,999)   -
OPERATING PROFIT/(LOSS) 251,079   (1,029,215)
       
Finance costs (325,688)   (195,361)
Finance income 7,035   5
       
LOSS BEFORE TAXATION (67,574)   (1,224,571)
Taxation -   -
       
LOSS FOR THE YEAR (67,574)   (1,224,571)
TOTAL COMPREHENSIVE EXPENSE FOR THE YEAR (67,574)   (1,224,571)
Loss attributable to owners of the parent (67,574)   (1,224,571)
       
Loss per share expressed in pence per share      
Basic (1.02)   (24.76)
Diluted (1.02)   (24.76)

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

  30 June
2018
  30 June
2017
  £   £
ASSETS      
NON-CURRENT ASSETS      
Property, plant and equipment 38,993   1,843
Investment properties 26,695,000   7,242,000
  26,733,993   7,243,843
CURRENT ASSETS      
Trade and other receivables 703,427   90,777
Cash and cash equivalents 6,425   1,023,752
  709,852   1,114,529
TOTAL ASSETS 27,443,845   8,358,372
EQUITY      
SHAREHOLDERS' EQUITY      
Share capital 1,435,721   877,518
Share premium 7,358,244   4,660,322
Capital redemption reserve 67,500   67,500
Capital redemption reserve 29,862   -
Retained earnings (200,565)   (1,083,179)
TOTAL EQUITY 8,690,762   4,522,161
       
LIABILITIES      
NON-CURRENT LIABILITIES      
Financial liabilities - borrowings      
Interest bearing loans and borrowings 8,749,702   1,560,756
CURRENT LIABILITIES      
Trade and other payables 8,332,548   194,147
Financial liabilities - borrowings      
Interest-bearing loans and borrowings 1,670,833   31,308
Other loans -   2,050,000
  10,003,381   2,275,455
TOTAL LIABILITIES 18,753,083   3,836,211
TOTAL EQUITY AND LIABILITIES 27,443,845   8,358,372
       
Net asset value per share (pence) 88.17   85.73

 

The financial statements were approved and authorised for issue by the Board of Directors on 9 November 2018 and were signed on its behalf by:

James Cane

Director

 

CONSOLIDATED STATEMENT OF CASH FLOWS

    2018 2017
    £ £
Cash flows from operating activities      
Cash used in operations   (2,094,859) (902,338)
Interest paid   (325,688) (195,361)
Net cash used in operating activities   (2,420,547) (1,097,699)
       
Cash flows from investing activities      
Acquisition of subsidiaries   (5,278,164) -
Purchase of tangible fixed assets   (43,515) -
Purchase of investment properties   (2,046,594) -
Interest received   7,035 5
Net cash generated from/(used in) investing activities   (7,361,238) 5
       
Cash flows from financing activities      
Loan repayments in year   (1,131,525) (28,204)
New loans in year   7,739,858 950,000
Shares issued   2,156,125 949,000
Net cash generated from financing activities   8,764,458 1,870,796
       
(Decrease)/Increase in cash and cash equivalents   (1,017,327) 773,102
       
Cash and cash equivalents at beginning of year   1,023,752 250,650
Cash and cash equivalents at end of year   6,425 1,023,752

 

RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM / (USED IN) OPERATIONS

Group 2018   2017
  £   £
Loss before taxation (67,574)   (1,224,571)
Depreciation charges 6,365   887
Revulation of investment properties (1,235,377)   (116,000)
Gain on bargain purchase (2,201,639)   -
Share-based payment charge 950,188   392,319
Finance costs 325,688   195,361
Finance income (7,035)   (5)
  (2,229,384)   (752,009)
Increase in trade and other receivables (590,502)   (66,516)
Increase/(decrease) in trade and other payables 725,027   (83,813)
Cash used in operations (2,094,859)   (902,338)
       
Company 2018   2017
  £   £
Loss before taxation (3,407,836)   (1,591,032)
Depreciation charges 1,211   754
Impairment of investments 75,000   -
Share-based payment charge 950,188   392,319
Finance costs 316,544   194,149
Finance income (7,019)   -
  (2,071,912)   (1,003,810)
Increase in trade and other receivables (891,568)   (24,741)
Increase in trade and other payables 740,862   107,993
Cash used in operations (2,222,618)   (920,558)

 

NOTES TO THE FINANCIAL STATEMENTS

The notes to the financial statement are available in the PDF download.

 

 

Page last updated: 9 November 2018

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