TIDMTOWN

RNS Number : 8931E

Town Centre Securities PLC

16 March 2022

 
              16 March 2022 
 

TOWN CENTRE SECURITIES PLC

('TCS' or the 'Company')

Half year results for the six months ended 31 December 2021

Town Centre Securities PLC, the Leeds, Manchester, Scotland, and London property investment, development, hotel and car parking company, today announces its results for the six months ended 31 December 2021.

Financial performance

   --    Net assets: 

o Like for like portfolio valuation up 2.4% from June 2021

o Statutory net assets of GBP165.1m or 313p per share up 6.2% (FY21: GBP155.4m, 292p). EPRA net tangible assets ('NTA')($) measure at GBP160.7m or 305p per share (FY21 equivalent: GBP151.0m, 284p)

-- Profit and earnings per share (HY21 comparatives significantly affected by an estimated GBP3.2m COVID-19 impact):

o Statutory profit before tax of GBP10.5m (HY21: loss of GBP3.5m) and statutory earnings per share of 19.8p (HY21: loss of 6.6p)

o EPRA Earnings($) before tax of GBP2.6m (HY21: GBP0.0m)

o EPRA earnings per share($) of 5.0p (HY21: 0.0p)

   --    Shareholder returns: 

o Interim dividend of 2.5p (HY21: 1.75p) reflecting the strong bounce back in earnings

o Earnings and NAV enhancing share buy back commenced in 2021 and continued in 2022 (631,351 shares bought back up to 11 February 2022)

Protecting shareholder value whilst continuing to reset and reinvigorate the business for the future

We have made meaningful progress in resetting and reinvigorating the business in the past six months. Progress delivered under the four key strategic initiatives is as follows:

Actively managing our assets

-- The proportion of retail and leisure assets in the portfolio has reduced to 30% from 40% in June 2020, and down from 60% in 2016, following the sale of over GBP80m of assets since March 2020

-- Pure retail now represents only 22% of the total portfolio of which 53% is in the resilient Merrion Estate

   --    34 new lettings and lease renewals across the Group's portfolio in the period 

-- Only one tenant entered into a CVA during the period reflecting our resilient tenant portfolio

Maximising available capital

   --    Three properties sold during the six months (in Harrogate, Leeds and London) 

o aggregate proceeds of GBP22.5m crystalising a profit on disposal of GBP1.2m

o three further properties sold in the first quarter of 2022 at prices in aggregate above book value (two of which were categorised as assets held for sale on the balance sheet of the Company at 31 December 2021) for a total consideration of GBP15m

-- Loan to value headroom over our bank facilities of GBP7.9m based on 31 December 2021 borrowings and valuations, rising to over GBP21m following the three sales made after the period end and the inclusion of the Hampstead property within the banking security pool

-- Loan to value* reduced to 50.0% (FY21 equivalent 51.3%). Following the above three further sales this reduces to 47.7%

-- Following the period end, we have agreed to buy back for cancellation GBP3.4m of our GBP99.5m 2031 5.375% debenture stock for a total consideration of GBP3.74m including accrued interest, helping to reduce debt and average interest

Acquiring and improving investment assets to diversify our portfolio

-- Completed during the period the GBP7m acquisition of 58-62 Heath Street, Hampstead, London, a prime mixed-use property

-- Opportunity to redevelop, repurpose and modernise our Wade House office (having been vacated by StepChange Debt Charity), the third of our four Merrion Estate offices, a potentially valuable opportunity given the level of new development in the surrounding area

Investing in our development pipeline

-- Our development pipeline, with an estimated GDV of over GBP600m, is a valuable and strategic point of difference which we continue to progress and improve

($) Additional EPRA measures are described in greater detail further on in these half year results with EPRA earnings and earnings per shares detailed, defined and reconciled within note 5 of these half year results

* Loan to value is calculated as the amount of financial liabilities less cash and cash equivalents (including overdrafts) as a percentage of total assets less cash and cash equivalents

Commenting on the results, Chairman and Chief Executive, Edward Ziff, said:

"We have seen a good recovery across all three segments of the business in the past six months with good momentum continuing into the early part of 2022. We also believe today's results evidence the success of our new strategic direction, to reset and reinvigorate the business for the future."

"Our level of rent receipts has been resilient throughout the Covid-19 period, and has now recovered back to pre-pandemic levels, an indicator of the diversified strength of our property portfolio, combined with the relative strength of, and our long-term relationships with, our tenants."

"Our shareholder returns initiatives have been bolstered by continuing property sales, and by our confidence in the potential of, and progress within, our GBP600m development pipeline."

"Over the coming months the effect the Ukraine conflict will have on the wider economy will hopefully become clearer. The impact of inflationary pressures on our business will include changes to consumer spending, increased property and other expenses, increased construction costs and rent affordability for tenants."

"Notwithstanding the macro-economic and geopolitical environment, we remain committed to delivering on our accelerated four pillar strategy of: actively managing our assets, maximising available capital, investing in our development pipeline and acquiring and improving investment assets to diversify our portfolio."

-Ends-

For further information, please contact:

Town Centre Securities PLC www.tcs-plc.co.uk / @TCS PLC

Edward Ziff, Chairman and Chief Executive 0113 222 1234

Stewart MacNeill, Group Finance Director

MHP Communications 020 3128 8572

Reg Hoare / Matthew Taylor / Pauline Guenot tcs@mhpc.com

Chairman and Chief Executive's Statement

Resetting and reinvigorating the business for the future

We have seen a good recovery across all three segments of the business in the past six months and are hopeful this will continue. We believe the first half results evidence the success of our new strategic direction, to reset and reinvigorate the business for the future. Our aim is to create a business that:

   -      Has lower levels of absolute debt and leverage 
   -      Is diversified with a much-reduced level of retail property 
   -      Is diversified with a capital light, profitable car park business 

- Has rebased and has significant growth opportunities as a result of our valuable development pipeline and asset management opportunities

During the six months three further properties have been sold; two of which were secured within the Company's debenture facility and as such the majority of the proceeds have been ring-fenced within the security pool of the debenture. We are currently exploring a number of ways to unlock these funds, primarily through the substitution of other properties into the security pool.

Our level of rent receipts within the property business has been resilient throughout the Covid-19 period and has now recovered back to pre-pandemic levels. This is an indicator of the diversified strength of our property portfolio, the relative strength of the majority of our tenants, and most importantly, the quality of relationships built with tenants over the long-term.

Rent Collections as at 10 March 2022:

 
                           March 20     %    Latest    %   Cumulative   % 
                          - December         Quarter 
                             21 *              ** 
Total billed               GBP42.0m         GBP4.6m         GBP46.6m 
                         ============       ========       ========== 
Total collected            GBP39.1m    93%  GBP4.5m   99%   GBP43.6m   94% 
Agreed to be deferred 
 ***                        GBP0.1m    0%   GBP0.0m   0%    GBP0.1m    0% 
                          ===========  ===  ========  ===  ==========  === 
Agreed total               GBP39.2m    93%  GBP4.5m   99%   GBP43.7m   94% 
                          ===========  ===  ========  ===  ==========  === 
 

*English & Scottish quarters, and monthly billings (collections from 25 March 2020)

**English quarter (collections due on 29 December and 1 January)

*** Agreed to be deferred and still outstanding

As highlighted as part of our FY21 year end results we have continued the execution of our detailed strategic and operational plan which includes:

- Accelerating our asset disposal programme rapidly and reducing the size of our retail portfolio. Since the start of the COVID-19 pandemic, we have now sold over GBP80m of assets, the majority of which has been retail

- Working closely with all our tenants to support wherever we can, agreeing to share the financial cost of closure where appropriate and doing our best to ensure that following the disruption as many of our tenants as possible are able to bounce back strongly

- Supporting our employees, where home working has been necessary, and where employees and their families have been impacted either directly by the virus or by associated consequences of it

Results

The statutory profit for the six months ended 31 December 2021 was GBP10.5m (HY21: loss of GBP3.5m) giving earnings per share of 19.8p (HY21: loss per share of 6.6p). The key drivers for this profit were the valuation gains on investment properties of GBP6.4m and the recovery seen across each of the property, car park and hotel segments of the business. Highlighting the diversified and intensively managed nature of our assets, the like for like portfolio increased in value by 2.4%.

EPRA earnings for the six months ended 31 December 2021 were GBP2.6m (HY21: GBP0.0m) giving EPRA earnings per share of 5.0p (HY21: 0.0p). The improvement reflects the recoveries seen in both our car park and hotel operations, in addition to the resilience of the rental collections.

Statutory Net Assets of GBP165.1m (30 June 2021: GBP155.4m) increased by 6.2% from the year end. Net assets per share increased to 313p (30 June 2021: 292p).

EPRA Net Tangible Assets (EPRA NTA); which in the case of TCS reduces statutory net assets by the GBP4.4m of reported Goodwill, for the half year is GBP160.7m compared to GBP151.0m at FY21, up 6.4%. EPRA NTA per share is 305p (FY21 comparable 284p). The full breakdown of the EPRA net asset measures are detailed later.

Borrowings

Net borrowings, which includes lease liabilities, have increased marginally by 0.3% over the six months from GBP175.6m to GBP176.1m.

Our loan to value level reduced 130 bps from the June year end to 50.0%. Following the three property disposals after the year end, this has reduced further to 47.7%.

On 14 March 2022 the Company agreed to buyback for cancellation GBP3.4m of its GBP99.5m 2031 5.375% debenture stock. This will result in an additional one-off finance cost of GBP0.3m in the remaining six months of FY22.

Dividends

An interim dividend of 2.5p per share (HY21 1.75p) will be paid on the 24 June 2022 to shareholders registered on 20 May 2022; a property income distribution amounting to GBP1.3m in total. The final dividend for 2021 of 1.75p was paid on the 21 January 2022.

It is pleasing to note that we have increased the interim dividend, which reflects the recovery of our car parks and hotel and also the strengthening of the balance sheet following the assets sales completed - and that it represents 50% of EPRA earnings.

We hope to return to paying a higher dividend in the coming years, however with the general economic uncertainty we cannot guarantee this. It is also worth noting that our traditional approach of paying a relatively smaller interim dividend followed by a larger final dividend may also change.

Portfolio Performance

The value of investment properties, developments, joint ventures and car parks at the half-year stood at GBP314.8m (June 2021: GBP322.1m) both taking into account assets held for sale.

On a like for like basis the whole portfolio increased in value by 2.4% since June (FY21: 0.3% increase) accounting for a GBP6.4m like for like increase in value (investment, development, car park and joint venture assets).

The results of the latest valuation continue to highlight three key factors that differentiate our portfolio:

- The resilience of our portfolio; its diversified regional nature, strong loyal tenants, and the reducing exposure to retail and leisure

- The strength of our asset management and capital investment activities adding value and further growth potential

   -      The growing potential in our significant development pipeline 

The proportion of retail and leisure assets within the portfolio has further reduced to 30%, down from 40% in June 2020, and of that, pure retail represents only 21% of the overall portfolio. The retail and leisure element of the Merrion Estate represents 53% of all retail and leisure, and it was pleasing to see its value rebound since June. Our focus on convenience, discount and grocery retailing as well as our heritage of forming long term supportive relationships with our tenants are key attributes to preserving value.

Our development pipeline value increased by GBP1.0m or 2.4% driven by the result of rising market value in the underlying land.

 
                         Passing                     % of       Valuation     Initial   Reversionary 
                           rent    ERV    Value    portfolio    incr/(decr)    yield        yield 
 
 Retail & Leisure          1.5     2.0    24.7        8%           0.3%        5.7%         7.5% 
 Merrion Centre 
  (ex offices)             4.7     5.5    58.6       18%           2.3%        7.6%         8.8% 
 Offices                   4.4     6.4    91.7       28%           0.7%        4.6%         6.6% 
 Hotels                    0.5     1.0     9.0        3%           4.6%        5.2%         9.9% 
 Out of town retail        1.0     1.2    14.5        5%           0.0%        6.7%         7.5% 
 Distribution              0.5     0.5    10.0        3%          54.0%        4.5%         5.1% 
 Residential               1.5     1.5    20.9        6%           1.9%        6.9%         6.9% 
 
                          14.2     18.0   229.4      71%           2.9%        5.8%         7.4% 
 
 Development property                     42.6       13%           2.4% 
 Car parks                                49.9       16%          -1.0% 
 
 Portfolio                                321.9      100%          2.4% 
 

The following table reconciles the above table to that set out in Note 6.

 
                                         HY22 
                                         GBPm 
 Portfolio as per 
  Note 6                                286.1 
 50% Share in Merrion House              36.1 
 50% Share in Burlington 
  House                                  11.5 
 Goodwill - Car Parks - Property 
  Specific only                           4.0 
 Assets Held for 
  Sale                                   11.5 
 Less - IFRS 16 Right-of-Use Car 
  Parks                                (27.3) 
 As per the table 
  above                                 321.9 
                                      ------- 
 

Note - the IFRS 16 Right-of-Use car parks (GBP27.3m) are excluded in the portfolio analysis above as the Directors do not believe it is appropriate to include these assets where there is less than 50 years remaining on their lease and the Group does not have full control over them.

Maximising available capital

In the past six months we have continued our non-core asset disposal programme. Between July and December 2021, we have sold three properties for a total consideration of GBP22.5m.

The properties disposed of included:

   -      Our Premier Inn hotel investment in Leeds 
   -      All of our retail interest in Harrogate 
   -      An office building in Duke Street, London 

The sales were in aggregate GBP1.2m above the 30 June 2021 book values of these properties. The proceeds from the sale of Duke Street were used to repay debt, whilst the proceeds for the sale of the other two properties are currently within the debenture security pool. As at 31 December 2021 the total amount of funds secured against the debenture security pool was GBP18.705m (30 June 2021: GBP1.225m), as these funds are ring fenced and not immediately available to the Group they are included within Trade and other receivables.

Three further assets were sold after the period end, again marginally above the 31 December 2021 valuation, and we continue to market a number of other retail properties and intend to complete further non-core sales over the coming months. The proceeds from these sales have been used in part to repay bank borrowings.

Net borrowings at 31 December 2021 were GBP176.1m (30 June 2021: GBP175.6m). The Loan to value (LTV) ratio is 50.0% (30 June 2021: 51.3%). LTV is calculated as total assets (less cash) as a percentage of net borrowings. Headroom at 31 December 2021 was GBP7.9m (FY21: GBP12.8m).

The total borrowings comprise of GBP99.4m (net of GBP0.1m unamortised lease incentives) of 5.375% First Mortgage Debenture Stock 2031, GBP47.2m of bank debt and GBP29.1m of lease liabilities. There were a further GBP47.8m of undrawn revolving credit facilities at the half-year.

As mentioned previously, after the period end we agreed to buyback for cancellation GBP3.4m of our debenture stock, reducing the nominal value outstanding to GBP96.1m. Assuming we have surplus funds, we would look to buyback further amounts of what is our most expensive borrowings.

Actively managing our assets

We have completed or renewed 34 leases in the period. This letting activity has been across the entire portfolio, with a broad mix ranging from small independent retailers up to the large national multiples, especially within the Merrion Centre and in our two key offices investments in Manchester (Carvers Warehouse and Ducie House). It is particularly encouraging to see more tenants wanting to both extend their lease terms and/or expand their demises: where we can, we will always look accommodate this demand.

The proportion of retail and leisure assets in the portfolio has reduced to 30% from 40% in June 2020, and down from 60% in 2016. Pure retail now represents only 22% of the total portfolio, of which 53% is in the resilient Merrion Estate.

Acquiring investment assets

Heath Street, Hampstead

We have acquired for GBP7.0m a 12,600 sq.ft mixed-use property, located in a prime retail pitch adjacent to Hampstead tube station, which currently comprises four multi-level units let to Wagamama, Knight Frank and Cass Arts - a London based arts and craft retailer. Following the period end we have secured a letting for the final vacant unit with a national operator.

A 34-space basement level car park, prime office space on the first to third floors and eleven residential dwellings also form part of the scheme that was originally designed by influential architect, Ted Levy.

This strategic purchase forms part of our ongoing strategy to continue to diversify their portfolio and generate long term capital growth.

Investing in our development pipeline

TCS owns a significant development pipeline which gives the Company a clear and material opportunity for future growth. The current pipeline has an estimated gross development value (GDV) of over GBP600m, with the majority of the developments already being part of the relevant local government approved strategic planning frameworks or actually in possession of detailed planning permission.

We take a conservative approach to development to ensure we never over-commit ourselves, which has proven crucial following the COVID-19 crisis. Alongside this, the Company has a successful track record in obtaining planning and delivering strategic developments. In the last five years, the Company has delivered Merrion House office, let to Leeds City Council, two new hotels in Leeds, and the Burlington House PRS scheme in Manchester. In addition, over that time frame, we have secured planning permission for a 17-storey office tower above the Merrion Estate and at Eider House, our second BTR scheme in Manchester.

It is expected that Eider House will constitute our next development and having carried out works in January 2021 to implement the planning consent, we are currently redesigning the scheme to deliver an evolution and complimentary development to relate to the successful Burlington House situated opposite.

The key components of the development pipeline include:

-- Piccadilly Basin, Manchester. Mixed residential, commercial, and car-parking with a total estimated GDV of circa GBP300m

-- Whitehall Riverside, Leeds. Office, car-parking, and potentially leisure provision with a total estimated GDV of over GBP200m

-- Merrion Estate, Leeds. Office and residential towers with a total estimated GDV of over GBP100m

Piccadilly Basin

We have sold (subject to detailed planning) a part of our Piccadilly Basin development site to the Select Property Group, it is expected that this sale will be unconditional during Summer of 2022.

Whitehall Riverside

We are working with a partner to bring forward a new masterplan which will provide a unique, riverside mixed-use scheme in one of the city's most strategic locations just three minutes' walk from Leeds train station.

Plans have been submitted to Leeds City Council for a development comprising 215,000 sq. ft. of grade A office space across two buildings, a 478 space CitiPark multi-storey car park and travel hub, and a 108 key aparthotel.

A separate, detailed planning application is proposed by Glenbrook for up to 532 apartments across two buildings of 15 and 18 stories with ground floor commercial units. The proposals include extensive residents' amenities split across the ground floor and mezzanine with terrace garden overlooking the River Aire.

New landscaping and public realm will improve connectivity to, and further complement the existing riverside environment with a series of interlinked pedestrian and cycling routes to support health and well-being whilst also attracting new residents and visitors to the scheme.

The new Whitehall Riverside proposals offer a revitalised masterplan relevant for the demand of today designed with flexibility in mind to adapt to the changing requirements of workspace, residential, electric vehicles and visitor economy.

Merrion Estate

The Arena Quarter, where the Merrion Estate is located, has been transformed in recent years with the development of the first direct Arena and substantial investment by Leeds' two largest universities, a brand-new Head Office for Leeds City Council and further investment in hotels, leisure units and over 8,000 new residential and student residential units. These new developments, on and adjacent to the Merrion Estate, including the tallest building in Leeds (IQ Altus), have transformed the area.

This now presents the Company with an opportunity to redevelop or refurbish Wade House on the back of the new demand. Wade House represents the last of the four main office buildings that form part of the Merrion Estate, and one that is now in need of investment. Having already redeveloped Town Centre House and Merrion House, it is time to improve Wade House. We have received speculative interest in the building and have been working up various plans for some time. We are in detailed discussions with potential partners and are confident in delivering on this new opportunity.

CitiPark recovering well, capital light growth continuing with a further acquisition

Car park occupancy levels have recovered well in the first five months of the period, although this recovery was temporarily stalled with the Omicron variant and government advice to work from home at the end of 2021. Across our portfolio we are however seeing some regional variances in the strength of this recovery; for example Leeds, where our car parks are more reliant on office workers, the recovery is slower than compared to our Manchester and London car parks.

As a business we are continuing to look at ways to innovate further through technology as well as looking at alternative uses for under-utilised space within our existing car parks. Although a small part of the current business, our CitiCharge division is growing and we are pleased to announce that the installation of 34 EV charging bays (including an option to increase to 82) with the Warwickshire NHS Trust has been completed and these have now been fully commissioned and are available to NHS staff.

We have continued the expansion of the enforcement business with a further acquisition in the period. Our previous acquisitions have shown steady revenue growth and are proving to be good investments, although the proposed parking bill, when it is formally brought in, will have an impact on revenue for the non-residential car parks enforced.

ESG and business responsibility

Building on the success of previous initiatives, including the interaction with local communities, the solar farms and the roll-out of EV charging facilities, the Company continues to look at both macro and micro ways to improve the responsibility of the business. Examples in the current period range from the phasing out of traditional business cards and implementing a QR code approach, updating the 'work from home' policy for all employees to the larger continual programme of improving the EPC performance of the Company's property portfolio.

In addition, the Company is implementing a policy of measuring and benchmarking the social benefit of future decisions, primarily in relation to any future development contracts.

Share buy back programmes

We launched a share buy back programme in June 2021, reflecting the Board's belief that share buybacks are an appropriate means of returning value, whilst maximising sustainable long term growth for shareholders, given the enhancement to NAV and earnings per share that results from reducing the number of shares in issue. This is particularly the case given the significant discount that the Company's shares trade at relative to its reported net asset value, and reflects the highly successful share buy-back programme the company undertook in the early 2000's, which significantly enhanced shareholder returns in subsequent years.

During the period, a total of 386,973 shares were purchased as part of this programme, returning GBP533,271 to shareholders.

On 6 January 2022, a new share buy back programme was launched which ran until 11 February 2022, during which time a total of 244,378 shares were purchased, returning GBP385,206 to shareholders.

Outlook

The recovery seen in the six months ended 31 December 2021 is continuing into the opening months of 2022. Rent collections remain robust with 99% of the amounts invoiced at the last quarter date now collected. Our programme of non-core asset disposals has continued and we are now looking at investment acquisitions and bringing forward sections of our development pipeline.

Our car parks are continuing to recover and we are hoping to build on this momentum as we move through 2022. One of the key challenges will be around the ever-evolving way people work. For the CitiPark branches that are more reliant on office workers, we expect the recovery to be slower.

The ibis Styles Leeds City Centre Arena hotel has recovered well, mainly due to the significant increase in demand for UK staycations. We are expecting this demand to be tempered as more people look to travel overseas, however as the midweek corporate market rebounds, we do not envisage a significant drop in average occupancy.

Both the car park and hotel businesses were temporarily impacted by the Omicron variant in both December 2021 and January 2022 (which historically are always quieter months). It is now reassuring to see the recovery recommencing from February 2022.

Overall, we remain committed to delivering on our accelerated four pillar strategy of: actively managing our assets, maximising available capital, investing in our development pipeline and acquiring and improving investment assets to diversify our portfolio.

Russia-Ukraine Conflict

We continue to wake up to the horrifying news and the potential impact of the Russia-Ukraine conflict. The Company does not have any direct exposure in any of its business segments to either of these countries, nor from the conflict itself. This situation will clearly have an impact on the world economy over the coming months and years, an economy that has yet to fully recover from the COVID-19 pandemic.

We are already starting to see inflationary pressures coming through and this will be exacerbated as a result of this conflict and over the coming months the impact on consumer spending, property and other expenses, construction costs and rental levels should become clearer.

EPRA Net Asset reporting

The below table reconciles IFRS net assets to Net Tangible Assets (NTA), and the other EPRA measures.

There are three EPRA Net Asset Valuation metrics, namely EPRA Net Reinstatement Value (NRV), EPRA Net Tangible Assets (NTA) and EPRA Net Disposal Value (NDV). The EPRA NRV scenario, aims to represent the value required to rebuild the entity and assumes that no selling of assets takes place. The EPRA NTA is focused on reflecting a company's tangible assets. EPRA NDV aims to represent the shareholders' value under an orderly sale of business, where, for example, financial instruments are calculated to the full extent of their liability. All three NAV metrics share the same starting point, namely IFRS Equity attributable to shareholders.

 
                                    HY22     FY21     HY22     FY21 
                                                     p per    p per 
                                    GBPm     GBPm    share    share 
 
 IFRS reported NAV                 165.1    155.4      313      292 
 
 Purchasers Costs(1)                20.2     21.1 
 
 EPRA Net Reinstatement 
  Value                            185.3    176.5      351      337 
 
 Remove Purchasers Costs          (20.2)   (21.1) 
 Remove Goodwill(2)                (4.4)    (4.4) 
 
 EPRA Net Tangible Assets          160.7    151.0      305      284 
 
 Fair value of fixed interest 
  rate debt(3)                     (7.9)   (10.2) 
 
 EPRA Net Disposal Value           152.8    140.8      290      265 
 

(1) Estimated purchasers' costs including fees and stamp duty and related taxes

(2) Removal of goodwill as per the IFRS Balance Sheet - relates predominantly to goodwill paid to acquire two long term car park leaseholds in London

(3) Represents the adjustment to fair value (market price) of the 2031 5.375% debenture

Responsibility statement of the directors

The directors confirm that, to the best of their knowledge, these condensed consolidated interim financial statements have been prepared in accordance with IAS 34 as adopted by the European Union. The interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R, namely:

-- an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

-- material related party transactions in the first six months of the financial year and any material changes in the related party transactions described in the last Annual Report and Accounts.

A list of current directors is maintained on the Town Centre Securities PLC Group website: www.tcs-plc.co.uk.

Principal risks and uncertainties

The group set out on page 48 of its annual report and accounts 2021 the principal risks and uncertainties that could impact its performance; these remain largely unchanged since the annual report was published. The group operates a structured risk management process, which identifies and evaluates risks and uncertainties and reviews mitigation activity.

The key underlying risks facing the business continue to relate to tenant strength, particularly in the retail arena, portfolio valuation and the related funding headroom which is driven by portfolio valuation. Systems risk related to the increasing level of cyber security threats and GDPR risk and the need to carefully control the use of personal data continue to demand vigilance from all staff.

TCS continues to operate in a conservative manner with processes and procedures in place to ensure risk management is central to all business planning and decision making. These processes and procedures remain as detailed in the 2021 annual report.

Forward-looking statements

Certain statements in this half year report are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

The group undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

   Edward Ziff OBE DL                                         Stewart MacNeill 
   Chairman and Chief Executive                    Group Finance Director 

15 March 2021

Consolidated condensed income statement

for the six months ended 31 December 2021

 
                                                Six months     Six months     Year 
                                                     ended          ended    ended 
                                               31 December    31 December  30 June 
                                                      2021           2020     2021 
                                                 Unaudited      Unaudited  Audited 
                                                             and restated 
                                        Notes       GBP000         GBP000   GBP000 
---------------------------------------------  -----------  -------------  ------- 
Gross revenue (excl. service charge 
 income)                                            12,939         10,436   18,703 
Service charge income                                1,415          1,301    2,726 
--------------------------------------------   -----------  -------------  ------- 
Gross revenue                                       14,354         11,737   21,429 
Provision for impairment of debtors                    392           (22)      788 
Service charge expenses                            (2,154)        (1,808)  (3,656) 
Property expenses                                  (4,929)        (3,872)  (7,489) 
--------------------------------------------   -----------  -------------  ------- 
Net revenue                                          7,663          6,035   11,072 
Administrative expenses                            (2,953)        (2,780)  (5,585) 
Other income                                         1,302            462    1,989 
Impairment of car parking assets              6      (340)          (496)    (111) 
Reversal of impairment of hotel assets        6        121              -        - 
Valuation movement on investment properties   6      6,433        (3,146)       63 
Profit/(loss) on disposal of investment 
 properties                                          1,194        (1,100)  (2,320) 
Share of post tax profits from joint 
 ventures                                     8        924          1,787    2,461 
Operating profit                                    14,344            762    7,569 
Finance costs                                 3    (3,880)        (4,293)  (8,145) 
Profit/(loss) before taxation                       10,464        (3,531)    (576) 
Taxation                                                 -              -        - 
---------------------------------------------  -----------  -------------  ------- 
Profit/(loss) for the period                        10,464        (3,531)    (576) 
---------------------------------------------  -----------  -------------  ------- 
All losses for the period are attributable to equity shareholders. 
Earnings per share                            5 
Basic and Diluted                                    19.8p         (6.6p)   (1.1p) 
EPRA (non-GAAP measure)                               5.0p           0.0p     0.6p 
---------------------------------------------  -----------  -------------  ------- 
 

Consolidated statement of comprehensive income

for the six months ended 31 December 2021

 
                                               Six months     Six months     Year 
                                                    ended          ended    ended 
                                              31 December    31 December  30 June 
                                                     2021           2020     2021 
                                                Unaudited      Unaudited  Audited 
                                                            and restated 
                                                   GBP000         GBP000   GBP000 
---------------------------------------------------------  -------------  ------- 
Profit/(loss) for the period                       10,464        (3,531)    (576) 
Items that will not be subsequently reclassified 
 to profit or loss 
Revaluation gains on hotel assets                     400              -        - 
Revaluation gains on other investments                213            930    2,795 
-------------------------------------------------  ------  -------------  ------- 
Total other comprehensive income                      613            930    2,795 
Total comprehensive income/(loss) for the 
 period                                            11,077        (2,601)    2,219 
-------------------------------------------------  ------  -------------  ------- 
 

All recognised income for the period is attributable to equity shareholders.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Consolidated condensed balance sheet

as at 31 December 2021

 
                                                                                         31 December    31 December    30 June 
                                                                                                2021           2020       2021 
                                                                                           Unaudited      Unaudited    Audited 
                                                                                                       and restated 
                                                                                  Notes       GBP000         GBP000     GBP000 
---------------------------------------------------------------------------------------  -----------  -------------  --------- 
Non-current assets 
Property rental 
Investment properties                                                                 6      203,870        233,904    218,909 
Investments in joint ventures                                                         8       17,136         15,538     16,212 
-----------------------------------------------------------------------------  --------  -----------  -------------  --------- 
                                                                                             221,006        249,442    235,121 
---------------------------------------------------------------------------------------  -----------  -------------  --------- 
Car park activities 
Freehold and right of use properties                                                  6       73,213         75,086     74,502 
Goodwill and intangible assets                                                        7        4,996          4,144      4,841 
                                                                                              78,209         79,230     79,343 
---------------------------------------------------------------------------------------  -----------  -------------  --------- 
Hotel operations 
Freehold properties                                                                   6        9,030              -      8,630 
                                                                                               9,030              -      8,630 
Fixtures, equipment and motor 
 vehicles                                                                             6          928          1,058        955 
Investments                                                                           9        9,367          7,352      9,217 
-----------------------------------------------------------------------------  --------  -----------  -------------  --------- 
Total non-current assets                                                                     318,540        337,082    333,266 
---------------------------------------------------------------------------------------  -----------  -------------  --------- 
Current assets 
Assets held for sale                                                                          11,515              -      3,850 
Trade and other receivables 10                                                                22,343          5,121      5,311 
Cash and cash equivalents                                                                     18,157         17,842     21,670 
---------------------------------------------------------------------------------------  -----------  -------------  --------- 
Total current assets                                                                          52,015         22,963     30,831 
---------------------------------------------------------------------------------------  -----------  -------------  --------- 
Total assets                                                                                 370,555        360,045    364,097 
---------------------------------------------------------------------------------------  -----------  -------------  --------- 
Current liabilities 
Trade and other payables                                                                    (11,247)       (12,849)   (11,499) 
Financial liabilities 11                                                                    (55,144)       (49,284)   (63,373) 
Total current liabilities                                                                   (66,391)       (62,133)   (74,872) 
---------------------------------------------------------------------------------------  -----------  -------------  --------- 
Non-current liabilities 
Financial liabilities 11                                                                   (139,112)      (146,365)  (133,830) 
---------------------------------------------------------------------------------------  -----------  -------------  --------- 
Total liabilities                                                                          (205,503)      (208,498)  (208,702) 
---------------------------------------------------------------------------------------  -----------  -------------  --------- 
Net assets                                                                                   165,052        151,547    155,395 
---------------------------------------------------------------------------------------  -----------  -------------  --------- 
Equity attributable to owners of the Parent 
Called up share capital                                                              12       13,193         13,290     13,282 
Share premium account                                                                            200            200        200 
Capital redemption reserve                                                                       656            559        567 
Revaluation reserve                                                                              500            500        500 
Retained earnings                                                                            150,503        136,998    140,846 
---------------------------------------------------------------------------------------  -----------  -------------  --------- 
Total equity                                                                                 165,052        151,547    155,395 
---------------------------------------------------------------------------------------  -----------  -------------  --------- 
Net asset value per share                                                            14         313p           285p       292p 
-----------------------------------------------------------------------------  --------  -----------  -------------  --------- 
 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Consolidated condensed statement of changes in equity

for the six months ended 31 December 2021

 
                                                 Share     Capital 
                                        Share  premium  redemption  Revaluation  Retained    Total 
                                      capital  account     reserve      Reserve  earnings   equity 
                                       GBP000   GBP000      GBP000       GBP000    GBP000   GBP000 
---------------------------------------------  -------  ----------  -----------  --------  ------- 
Balance at 1 July 2020                 13,290      200         559          500   140,529  155,078 
Comprehensive income/(loss) for 
 the year 
Loss for the period                         -        -           -            -   (3,531)  (3,531) 
Other comprehensive income                  -        -           -            -       930      930 
Total comprehensive income for the 
 period                                     -        -           -            -   (2,601)  (2,601) 
Contributions by and distributions 
 to owners 
Dividends relating to the year ended 
 30 June 2020                               -        -           -            -     (930)    (930) 
-------------------------------------  ------  -------  ----------  -----------  --------  ------- 
Balance at 31 December 2020            13,290      200         559          500   136,998  151,547 
-------------------------------------  ------  -------  ----------  -----------  --------  ------- 
 
  Balance at 1 July 2021               13,282      200         567          500   140,846  155,395 
Comprehensive income for the year 
Profit for the period                       -        -           -            -    10,464   10,464 
Other comprehensive income                  -        -           -            -       613      613 
Total comprehensive loss for the 
 period                                     -        -           -            -    11,077   11,077 
Contributions by and distributions 
 to owners 
Arising on purchase and cancellation 
 of own shares                           (89)        -          89            -     (496)    (496) 
Dividends relating to the year ended 
 30 June 2021                               -        -           -            -     (924)    (924) 
-------------------------------------  ------  -------  ----------  -----------  --------  ------- 
Balance at 31 December 2021            13,193      200         656          500   150,503  165,052 
-------------------------------------  ------  -------  ----------  -----------  --------  ------- 
 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Consolidated condensed cash flow statement

for the six months ended 31 December 2021

 
                                                   Six months       Six months ended        Year ended 
                                                      ended 
                                                   31 December        31 December          30 June 2021 
                                                       2021               2020 
                                                    Unaudited          Unaudited              Audited 
                                                                   ------------------  --------------------- 
                                         Notes   GBP000    GBP000    GBP000    GBP000    GBP000     GBP000 
--------------------------------------  ------  -------  --------  --------  --------  --------  --------- 
Cash flows from operating activities 
Cash generated from operations              13    6,551               2,329               4,644 
Interest paid                                   (3,274)             (3,523)             (6,920) 
Net cash generated from/(used in) 
 operating activities                                       3,277             (1,194)                (2,276) 
----------------------------------------------  -------  --------  --------  --------  --------  ----------- 
Cash flows from investing activities 
Purchases and construction of investment 
 properties                                     (7,424)                   -                   - 
Refurbishment of investment properties            (590)             (2,033)             (2,637) 
Purchases of fixtures, equipment and 
 motor vehicles                                   (102)               (126)               (198) 
Proceeds from sale of investment properties       5,044              40,789              48,049 
Payments for business acquisitions                (189)                   -               (874) 
Acquisition of non-listed investments                 -               (258)               (258) 
Net cash (used in)/generated from investing 
 activities                                               (3,261)              38,372                 44,082 
-------------------------------------------------------  --------  --------  --------  --------  ----------- 
Cash flows from financing activities 
Proceeds from borrowings                          4,086                   -               4,000 
Repayment of borrowings                         (3,721)            (36,174)            (44,091) 
Principle element of lease payments               (824)               (820)             (1,659) 
Re-purchase of own shares                         (496)                   -                   - 
Dividends paid to shareholders                        -                   -             (1,860) 
Net cash used in financing activities                       (955)            (36,994)               (43,610) 
----------------------------------------------  -------  --------  --------  --------  --------  ----------- 
Net (decrease)/increase in cash and 
 cash equivalents                                           (939)                 184                (1,804) 
Cash and cash equivalents at beginning 
 of period                                                    557               2,361                  2,361 
----------------------------------------------  -------  --------  --------  --------  --------  ----------- 
Cash and cash equivalents at end of 
 period                                                     (382)               2,545                    557 
----------------------------------------------  -------  --------  --------  --------  --------  ----------- 
 
Cash and cash equivalents at the year-end are comprised of the following: 
 
Cash balances                                              18,157              17,841                 21,670 
Overdrawn balances                                       (18,539)            (15,296)               (21,113) 
----------------------------------------------  -------  --------  --------  --------  --------  ----------- 
                                                            (382)               2,545                    557 
----------------------------------------------  -------  --------  --------  --------  --------  ----------- 
 

The Consolidated Cash Flow Statement should be read in conjunction with Note 13.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Notes to the consolidated interim financial information

1. Financial information

General information

Town Centre Securities PLC (the "Company") is a public limited company domiciled in the United Kingdom. Its shares are listed on the main market of the London Stock Exchange. The address of its registered office is Town Centre House, The Merrion Centre, Leeds LS2 8LY. The principal activities of the group during the period remained those of property investment, development and trading and the provision of car parking.

This interim financial information was approved by the board on 14 March 2022.

The comparative financial information for the year ended 30 June 2021 in this half-yearly report does not constitute statutory accounts for that year as defined in section 434 of the Companies Act 2006. The statutory accounts for the year ended 30 June 2021 have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

Basis of preparation

These condensed consolidated financial statements have been prepared in accordance with IAS 34, "Interim Financial Reporting", in accordance with UK adopted international accounting standards. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the accounts for the year ended 30 June 2021. The financial information for the six months ended 31 December 2021 and 31 December 2020 is unaudited.

Significant accounting policies

The accounting policies adopted are consistent with those of the previous financial year.

The group's financial performance is not seasonal.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

In the current environment, the directors consider the revenue to be of particular importance and therefore we set out below our revenue policy in respect of rental income:

Rental income

Revenue includes rental income net of VAT.

Most of the Group's rental income is billed either monthly or quarterly in advance. A receivable and deferred income is recognised at the date payment is due providing the Directors consider the amount to be collectible. The Covid-19 pandemic has increased the level of uncertainty as to whether amounts will be collectible for some leases and as such no receivable (or a reduced receivable) has been recognised in the current and prior year where amounts have been billed and are due for payment if payment is not considered probable. If the Directors consider an unrecognised amount is collectible subsequent to its due date, then the receivable is recognised at that date.

Rent receivables recognised are subject to impairment (refer to the Trade and Other Related Party receivables policy above).

Any lease incentives are spread on a straight-line basis across the period of the lease.

Rental income is recognised as revenue (to the extent it is considered collectible) as follows:

   i)          Fixed rental income is recognised on a straight-line basis over the term of the lease; 

ii) turnover rents are based on underlying turnover and are recognised in the period to which the turnover relates;

iii) rent reviews are recognised in the period to which they relate providing they have been agreed or otherwise on agreement; and

iv) Where rent concessions have been granted that reduce the payments due under a lease in future periods the total revised consideration (plus any prepaid or accrued lease payments) is spread over the remaining lease term from the date the concession is granted.

Use of estimates and judgements

There have been no changes in the method of applying appropriate accounting estimates in the period. Any difference between the receivables previously recognised and the cash subsequently collected has been disclosed in the income statement. There have been no other estimates of amounts reported in prior periods which have a material impact on the current half year period.

Going concern

The financial information for the six months ended 31 December 2021 have been prepared on a going concern basis. In light of the recent COVID-19 pandemic and recovery the Directors have considered various downside scenarios to the Group's financial forecasts in assessing its ability to continue as a going concern. Despite the negative economic impacts and the uncertainty in respect of the timeline for recovery, the scenarios reviewed confirm the appropriateness of preparing these financial statements on a going concern basis. The Group is currently in compliance with all of its covenants. The most material risk concerns the impact of the COVID-19 pandemic on the valuation of the property portfolio and our ability to meet gearing covenants, although the Group does have potential mitigants at its disposal to address these uncertainties which include, but are not limited to, further disposals of assets, pledging as additional security ungeared properties currently valued at GBP11.7m million at 31 December 2021 and seeking lender consent to an extension of financial covenant waivers to cover extended periods of disruption.

2. Segmental information

The chief operating decision-maker has been identified as the board. The board reviews the group's internal reporting in order to assess performance and allocate resources. The board has determined the operating segments based on these reports.

Segmental assets

 
                  31 December  31 December  30 June 
                         2021         2020     2021 
                       GBP000       GBP000   GBP000 
-----------------------------  -----------  ------- 
Property rental       287,980      272,629  275,661 
Car park activities    73,545       78,788   79,658 
Hotel operations        9,030        8,630    8,778 
--------------------  -------  -----------  ------- 
Total assets          370,555      360,047  364,097 
--------------------  -------  -----------  ------- 
 

Segmental results

 
                                      Six months ended                            Six months ended 
                                       31 December 2021                            31 December 2020 
                          ----------------------------------------- 
                          Property         Car       Hotel           Property         Car       Hotel 
                                          park                                       park 
                            rental  activities  operations    Total    rental  activities  operations    Total 
                            GBP000      GBP000      GBP000   GBP000    GBP000      GBP000      GBP000   GBP000 
------------------------  --------  ----------  ----------  -------  --------  ----------  ----------  ------- 
Gross revenue (excl. 
 service charge income)      5,763       5,733       1,443   12,939     6,573       3,504         359   10,436 
Service charge income        1,415           -           -    1,415     1,301           -           -    1,301 
------------------------  --------  ----------  ----------  -------  --------  ----------  ----------  ------- 
Gross revenue                7,178       5,733       1,443   14,354     7,874       3,504         359   11,737 
Provision for impairment 
 of debtors                    392           -           -      392      (22)           -           -     (22) 
Service charge expenses    (2,154)           -           -  (2,154)   (1,808)           -           -  (1,808) 
Property expenses            (454)     (3,318)     (1,157)  (4,929)     (607)     (2,802)       (463)  (3,872) 
------------------------  --------  ----------  ----------  -------  --------  ----------  ----------  ------- 
Net revenue                  4,962       2,415         286    7,663     5,437         702       (104)    6,035 
Administrative expenses    (2,422)       (531)           -  (2,953)   (2,229)       (551)           -  (2,780) 
Other income                 1,302           -           -    1,302       462           -           -      462 
Share of post tax 
 profits 
 from joint ventures           494           -           -      494       477           -           -      477 
------------------------  --------  ----------  ----------  -------  --------  ----------  ----------  ------- 
Operating profit before 
 valuation movements         4,336       1,884         286    6,506     4,147         151       (104)    4,194 
Valuation movement 
 on investment 
 properties                  6,433           -           -    6,433   (3,146)           -           -  (3,146) 
Impairment of car 
 parking 
 assets                          -       (340)           -    (340)         -       (496)           -    (496) 
Reversal of impairment 
 of hotel assets                 -           -         121      121         -           -           -        - 
Profit/(loss) on 
 disposal 
 of investment 
 properties                  1,194           -           -    1,194   (1,100)           -           -  (1,100) 
Valuation movement 
 on joint venture 
 properties                    430           -           -      430     1,310           -           -    1,310 
Operating profit/(loss)     12,393       1,544         407   14,344     1,211       (345)       (104)      762 
Finance costs                                               (3,880)                                    (4,293) 
Profit/(loss) before 
 taxation                                                    10,464                                    (3,531) 
Taxation                                                          -                                          - 
------------------------  --------  ----------  ----------  -------  --------  ----------  ----------  ------- 
Profit/(loss) for the 
 period                                                      10,464                                    (3,531) 
------------------------  --------  ----------  ----------  -------  --------  ----------  ----------  ------- 
 
 

All results are derived from activities conducted in the United Kingdom.

The car park results include car park income from sites that are held for future development. The value of these sites has been determined based on their development value and therefore the total value of these assets has been included within the assets of the property rental business.

The net revenue at the development sites for the six months ended 31 December 2021, arising from car park operations, was GBP957,000. After allowing for an allocation of administrative expenses, the operating profit at these sites was GBP747,000.

Revenue received within the car park and hotel segments, along with service charge income from the property rental segment, is the only revenue recognised on a contract basis under IFRS 15. All other revenue within the property segment comes from rental lease agreements.

3. Finance costs

 
                                   Six months   Six months     Year 
                                        ended        ended    ended 
                                  31 December  31 December  30 June 
                                         2021         2020     2021 
                                       GBP000       GBP000   GBP000 
---------------------------------------------  -----------  ------- 
Interest on debenture loan stock        2,674        2,787    5,575 
Interest payable on bank borrowings       600          735    1,345 
Amortisation of arrangement fees          120          160      212 
Loss on repurchase of debenture 
 stock                                      -          114        - 
Interest expense on lease liabilities     486          497    1,013 
                                        3,880        4,293    8,145 
--------------------------------------  -----  -----------  ------- 
 

4. Dividends

 
                            Six months   Six months     Year 
                                 ended        ended    ended 
                           31 December  31 December  30 June 
                                  2021         2020     2021 
                                GBP000       GBP000   GBP000 
--------------------------------------  -----------  ------- 
2020 final dividend: 1.75p per 
 25p share                           -          930      930 
2021 interim dividend: 1.75p per 
 25p share                           -            -      930 
2021 final dividend: 1.75p per 
 25p share                         930            -        - 
---------------------------------  ---  -----------  ------- 
                                   930          930    1,860 
---------------------------------  ---  -----------  ------- 
 

A final dividend in respect of the year ended 30 June 2021 of 1.75p per share was approved at the company's annual general meeting (AGM) on 29 December 2021 and was paid to shareholders on 21 January 2022. The entire dividend was paid as an ordinary dividend.

An interim dividend in respect of the year ending 30 June 2022 of 2.5p per share is proposed. This dividend, based on the shares in issue at 14 March 2022, amounts to GBP1.3m which has not been reflected in these interim accounts and will be paid on 24 June 2022 to shareholders on the register on 20 May 2022. This dividend will be paid entirely as a PID.

5. Earnings per share

The calculation of basic earnings per share has been based on the profit for the period, divided by the number of shares in issue. The weighted average number of shares in issue during the period was 52,945,786 (2020: 53,161,950).

 
                                               Six months            Six months 
                                                  ended                 ended 
                                               31 December           31 December           Year ended 
                                                  2021                  2020              30 June 2021 
----------------------------------------  --------------------  --------------------  -------------------- 
                                                      Earnings              Earnings              Earnings 
                                          Earnings   per share  Earnings   per share  Earnings   per share 
                                            GBP000       Pence    GBP000       Pence    GBP000       Pence 
----------------------------------------  --------  ----------  --------  ----------  --------  ---------- 
Basic earnings and earnings per 
 share                                      10,464        19.8   (3,531)       (6.6)     (576)       (1.1) 
Valuation movement on investment 
 properties                                (6,433)      (12.1)     3,146         5.9      (63)       (0.1) 
Impairment of car parking assets               340         0.6       496         0.9       111         0.2 
Reversal of impairment of hotel 
 assets                                      (121)       (0.2)         -           -         -           - 
(Profit)/loss on disposal of investment 
 properties                                (1,194)       (2.3)     1,100         2.1     2,320         4.4 
Valuation movement on properties 
 held in joint ventures                      (430)       (0.8)   (1,310)       (2.5)   (1,488)       (2.8) 
Loss on repurchase of debenture 
 stock                                           -           -       114         0.2         -           - 
----------------------------------------  --------  ----------  --------  ----------  --------  ---------- 
EPRA earnings and earnings per 
 share                                       2,626         5.0        15         0.0       304         0.6 
----------------------------------------  --------  ----------  --------  ----------  --------  ---------- 
 

There is no difference between basic and diluted earnings per share.

There is no difference between basic and diluted EPRA earnings per share.

6. Tangible fixed assets

(a) Investment properties - property rental business

 
 
 
                                           Right of 
                               Freehold   use asset    Development     Total 
                                 GBP000      GBP000         GBP000    GBP000 
---------------------------------------  ----------  -------------  -------- 
Valuation at 1 July 2020        210,125       6,138         37,751   254,014 
Capital expenditure               2,146           -             22     2,168 
Disposals                      (26,319)           -              -  (26,319) 
Transfer to hotel operations    (8,630)           -              -   (8,630) 
Transfer to assets held 
 for sale                             -     (3,850)              -   (3,850) 
Valuation movement              (4,095)         480          3,678        63 
Movement in tenant lease 
 incentives                       1,463           -              -     1,463 
Valuation at 1 July 2021        174,690       2,768         41,451   218,909 
-----------------------------  --------  ----------  -------------  -------- 
Additions at cost                 7,424           -              -     7,424 
Capital expenditure                 424           -            166       590 
Disposals                      (17,480)       (518)              -  (17,998) 
Transfer to assets held 
 for sale                      (11,515)           -              -  (11,515) 
Valuation movement                5,424           -          1,009     6,433 
Movement in tenant lease 
 incentives                          27           -              -        27 
Valuation at 31 December 
 2021                           158,994       2,250         42,626   203,870 
-----------------------------  --------  ----------  -------------  -------- 
 
 

(b) Freehold and right of use properties - car park activities

 
 
                                              Right of 
                                    Freehold       use    Total 
                                                 asset 
                                      GBP000    GBP000   GBP000 
--------------------------------------------  --------  ------- 
Valuation at 1 July 2020              30,650    45,863   76,513 
IFRS16 adjustment                          -      (95)     (95) 
Depreciation                           (329)   (1,476)  (1,805) 
(Impairment)/reversal of impairment    (421)       310    (111) 
------------------------------------  ------  --------  ------- 
Valuation at 1 July 2021              29,900    44,602   74,502 
------------------------------------  ------  --------  ------- 
IFRS16 adjustment                          -      (48)     (48) 
Depreciation                           (160)     (741)    (901) 
Impairment                             (340)         -    (340) 
Valuation at 31 December 2021         29,400    43,813   73,213 
------------------------------------  ------  --------  ------- 
 
 

(c) Freehold properties - hotel operations

 
 
                                   Freehold 
                                     GBP000 
------------------------------------------- 
Valuation at 30 June 2020                 - 
Transfer from investment properties   8,630 
------------------------------------  ----- 
Valuation at 1 July 2021              8,630 
------------------------------------  ----- 
Depreciation                          (121) 
Valuation movement                      521 
------------------------------------  ----- 
Valuation at 31 December 2021         9,030 
------------------------------------  ----- 
 

The fair value of the Group's investment and development properties, freehold car parks, hotel operations and assets held for sale have been determined principally by independent, appropriately qualified external valuers CBRE and Jones Lang LaSalle. The remainder of the portfolio has been valued by the Property Director.

Valuations are performed bi-annually and are performed consistently across the Group's whole portfolio of properties. At each reporting date appropriately qualified employees verify all significant inputs and review computational outputs. The external valuers submit and present summary reports to the Property Director and the Board on the outcome of each valuation round.

Valuations take into account tenure, lease terms and structural condition. The inputs underlying the valuations include market rents or business profitability, incentives offered to tenants, forecast growth rates, market yields and discount rates and selling costs including stamp duty.

The development properties principally comprise land in Leeds and Manchester. These have also been valued by appropriately qualified external valuers Jones Lang LaSalle, taking into account an assessment of their realisable value in their existing state and condition based on market evidence of comparable transactions and residual value calculations.

Leasehold (right-of-use) car park properties are accounted for using the cost model including an assessment of the future value of the minimum lease payments and are amortised on a straight line basis over the remaining term of the lease or useful economic live if deemed to be shorter.

Property income, values and yields have been set out by category in the table below.

 
 
                                                           Initial    Reversionary 
                              Passing      ERV    Value      yield           yield 
                                 rent 
                              GBP'000  GBP'000   GBP000          %               % 
--------------------------  ---------  -------  -------  ---------  -------------- 
Retail and leisure              1,355    1,845   23,104       5.5%            7.6% 
Merrion Centre (excluding 
 offices)                       4,728    5,474   58,604       7.6%            8.8% 
Offices                         2,771    4,704   55,661       4.7%            8.0% 
Hotels                            500      950    9,030       5.2%            9.9% 
Out of town retail              1,021    1,155   14,500       6.7%            7.5% 
Residential                       506      516    9,375       5.1%            5.2% 
--------------------------  ---------  -------  -------  ---------  -------------- 
                               10,881   14,644  170,274       6.0%            8.1% 
--------------------------  ---------  -------  -------  ---------  -------------- 
Development property                             42,626 
Car parks                                        73,213 
                                                286,113 
--------------------------  ---------  -------  ------- 
 

Investment properties (freehold and right of use) and hotel operations

The effect on valuation (excluding development property and car parks) of applying a different yield and a different ERV would be as follows:

Valuation at an initial yield of 7.0% - GBP146.1m, Valuation at 5.0% - GBP204.0m

Valuation at a reversionary yield of 9.1% - GBP151.6m, Valuation at 7.1% - GBP194.1m

Investment properties (development properties)

The key unobservable inputs in the valuation of one of the Group's development properties of GBP27.6m is the assumed per acre or per unit land value. The effect on the development property valuation of applying a different assumed per acre or per unit land value would be as follows:

Valuation in the Consolidated Financial Statements if a 5% increase in the per acre or per unit value - GBP29.0m, 5% decrease in the per acre or per unit value - GBP26.2m.

The other key development property in the Group is valued on a per acre development land value basis, the effect on the development property valuation of applying reasonable sensitivities would not create a material impact.

Freehold car park activities

The effect on the total valuation of the Group's freehold car park properties of GBP29.4m in applying a different yield/discount rate would be as follows:

Valuation in the Consolidated Financial Statements based on a 1% decrease in the yield/discount rate - GBP34.7m, 1% increase in the yield/discount rate - GBP25.5m

Property valuations can be reconciled to the carrying value of the properties in the balance sheet as follows:

 
                                           Investment        Freehold 
                                           Properties   and Leasehold 
                                                           Properties    Total 
                                               GBP000          GBP000   GBP000 
----------------------------------------  -----------  --------------  ------- 
Externally valued by CB Richard Ellis         108,174          33,030  141,204 
Externally valued by Jones Lang LaSalle        95,645           5,400  101,045 
Investment and development properties 
 valued by the Directors                           51               -       51 
Right-of-Use Assets                                 -          43,813   43,813 
At 31 December 2021                           203,870          82,243  286,113 
----------------------------------------  -----------  --------------  ------- 
 

All investment properties, freehold properties held in property plant and equipment, hotel operations and assets held for sale are measured at fair value in the consolidated balance sheet and are categorised as level 3 in the fair value hierarchy as defined in IFRS13 as one or more inputs to the valuation are partly based on unobservable market data. In arriving at their valuation for each property (as in prior years) both the independent external valuers and the Directors have used the actual rent passing and have also formed an opinion as to the two significant unobservable inputs being the market rental for that property and the yield (i.e. the discount rate) which a potential purchaser would apply in arriving at the market value. Both these inputs are arrived at using market comparables for the type, location and condition of the property.

(d) Fixtures, equipment and motor vehicles

 
                                          Accumulated  Net book 
                                   Cost  depreciation     value 
                                 GBP000        GBP000    GBP000 
-------------------------------  ------  ------------  -------- 
At 1 July 2020                    4,483         3,370     1,113 
Additions                           198             -       198 
On acquisition of subsidiaries       30             -        30 
Depreciation                          -           386     (386) 
-------------------------------  ------  ------------  -------- 
At 1 July 2021                    4,711         3,756       955 
-------------------------------  ------  ------------  -------- 
Additions                           102             -       102 
Depreciation                          -           129     (129) 
-------------------------------  ------  ------------  -------- 
At 31 December 2021               4,813         3,885       928 
-------------------------------  ------  ------------  -------- 
 

7. Goodwill and intangible assets

 
                                        Six months   Six months     Year 
                                             ended        ended    ended 
                                       31 December  31 December  30 June 
                                              2021         2020     2021 
                                            GBP000       GBP000   GBP000 
-------------------------------------  -----------  -----------  ------- 
Goodwill 
At start of the period                       4,436        4,024    4,024 
On acquisition of subsidiaries                   -          120      412 
                                             4,436        4,144    4,436 
-------------------------------------  -----------  -----------  ------- 
Intangible assets 
At start of period                             405            -        - 
On acquisition of subsidiaries                 250            -      442 
Amortisation                                  (95)            -     (37) 
-------------------------------------  -----------  -----------  ------- 
                                               560            -      405 
-------------------------------------  -----------  -----------  ------- 
Total goodwill and intangible assets         4,996        4,144    4,841 
-------------------------------------  -----------  -----------  ------- 
 

Goodwill represents the difference between the fair value of the consideration paid on the acquisitions of car park businesses and the fair value of the assets and liabilities acquired as part of these business combinations.

Intangible assets represent short term customer contracts relating to car park enforcement businesses acquired in the periods.

8. Investments in joint ventures

 
                              Six months   Six months     Year 
                                   ended        ended    Ended 
                             31 December  31 December  30 June 
                                    2021         2020     2021 
                                  GBP000       GBP000   GBP000 
---------------------------  -----------  -----------  ------- 
Interest in joint ventures 
At start of period                16,212       13,751   13,751 
Share of profits after tax           432        1,787      863 
Loan interest                         62            -      110 
Valuation movement                   430            -    1,488 
At end of period                  17,136       15,538   16,212 
---------------------------  -----------  -----------  ------- 
 
 
 Investments in joint ventures are 
           broken down as follows: 
                                    31 December  31 December  30 June 
                                           2021         2020     2021 
                                         GBP000       GBP000   GBP000 
----------------------------------  -----------  -----------  ------- 
Equity                                   11,238        9,961   10,376 
Loans                                     5,898        5,577    5,836 
                                         17,136       15,538   16,212 
----------------------------------  -----------  -----------  ------- 
 

Investments in joint ventures primarily relates to the Group's interest in the partnership capital of Merrion House LLP and loan to Belgravia Living Group Limited. The investment property held within these joint ventures has been externally valued at each reporting date.

9. Investments

 
                   31 December  31 December  30 June 
                          2021         2020     2021 
                        GBP000       GBP000   GBP000 
------------------------------  -----------  ------- 
Listed investments       5,952        3,937    5,802 
Non-listed investments   3,415        3,415    3,415 
                         9,367        7,352    9,217 
-----------------------  -----  -----------  ------- 
 

Listed investments

 
                             31 December  31 December  30 June 
                                    2021         2020     2021 
                                  GBP000       GBP000   GBP000 
----------------------------------------  -----------  ------- 
At start of the period             5,802        3,508    3,508 
Disposals                           (63)            -        - 
Increase in value of investments     213          429    2,294 
At the end of the period           5,952        3,937    5,802 
---------------------------------  -----  -----------  ------- 
 

Listed investments relate to an equity shareholding in a company listed on the London Stock Exchange. This is stated at market value in the table above and has a historic cost of GBP882,300 (2020: GBP889,130).

Listed investments are measured at fair value in the consolidated balance sheet and are categorised as level 1 in the fair value hierarchy as defined in IFRS13 as the inputs to the valuation are based on quoted market prices.

The maximum risk exposure at the reporting date is the fair value of the other investments.

Non-listed investments

 
                             31 December  31 December  30 June 
                                    2021         2020     2021 
                                  GBP000       GBP000   GBP000 
----------------------------------------  -----------  ------- 
At the start of the year           3,415        2,656    2,656 
Additions                              -          258      258 
Increase in value of investments       -          501      501 
                                   3,415        3,415    3,415 
---------------------------------  -----  -----------  ------- 
 

Non-listed investments primarily relate to an equity shareholding and loans advanced to YourParkingSpace Limited, a privately owned company incorporated in the United Kingdom.

The fair value of YourParkingSpace Limited has been determined principally by the directors based on an independent, appropriately qualified external valuation produced by GlobalView Advisors. There are no other material non-listed investments that require external valuation.

The loans are held at amortised cost and are assess for impairment under the IFRS 9 expected credit loss model.

The assets are categorised as level 3 in the fair value hierarchy as defined in IFRS 13 as the inputs to the valuation are based on unobservable inputs.

10. Trade and other receivables

Included with Trade and other receivables at 31 December 2021 are funds of GBP18.705m which are secured against the Group's debenture stock (30 June 2021: GBP1.225m). As these funds are ring fenced and not immediately available to the Group, they are included within Trade and other receivables..

11. Financial liabilities

 
                                    31 December  31 December  30 June 
                                           2021         2020     2021 
                                         GBP000       GBP000   GBP000 
-----------------------------------------------  -----------  ------- 
Current 
Bank overdraft                           18,539       15,296   21,113 
Bank borrowings                          34,956       32,330   40,601 
Lease liabilities                         1,649        1,658    1,659 
--------------------------------------  -------  -----------  ------- 
                                         55,144       49,284   63,373 
--------------------------------------  -------  -----------  ------- 
Non-Current 
Bank borrowings                          12,293       18,387    6,170 
Lease liabilities                        27,426       28,596   28,273 
5.375% First mortgage debenture stock    99,393       99,382   99,387 
                                        139,112      146,365  133,830 
--------------------------------------  -------  -----------  ------- 
                                        194,256      195,649  197,203 
--------------------------------------  -------  -----------  ------- 
 

Bank overdrafts have previously been recognised within Trade and Other Payables. Due to the nature of these liabilities the presentation of overdrawn bank balances has been reviewed and it is considered presentation within Financial Liabilities is more appropriate. The presentation has been amended for each period as set out in the table above.

Fair value of current borrowings

The fair value of bank borrowings and overdrafts approximates to their carrying value.

Fair value of non-current borrowings

 
                                 31 December 2021        31 December 2020          30 June 2021 
----------------------------  ----------------------  ----------------------  ---------------------- 
                              Book value  Fair value  Book value  Fair value  Book value  Fair value 
                                  GBP000      GBP000      GBP000      GBP000      GBP000      GBP000 
----------------------------  ----------  ----------  ----------  ----------  ----------  ---------- 
Debenture stock                   99,393     107,311      99,382     115,159      99,387     109,574 
Non-current bank borrowings       12,293      12,293      18,387      18,387       6,170       6,170 
----------------------------  ----------  ----------  ----------  ----------  ----------  ---------- 
 

12. Called up equity share capital

Authorised

164,879,000 (30 June 2021: 164,879,000) ordinary shares of 25p each.

 
Issued and fully paid up            Number of  Nominal 
                                       shares    value 
                                          000   GBP000 
----------------------------------  ---------  ------- 
At 1 July 2021                         53,131   13,282 
Purchase and cancellation of own 
 shares                                 (356)     (89) 
----------------------------------  ---------  ------- 
At 31 December 2021                    52,775   13,193 
----------------------------------  ---------  ------- 
 

13. Cash flows from operating activities

 
                                                    Six months   Six months     Year 
                                                         ended        ended    ended 
                                                   31 December  31 December  30 June 
                                                          2021         2020     2021 
                                                        GBP000       GBP000   GBP000 
-------------------------------------------------  -----------  -----------  ------- 
Loss for the period                                     10,464      (3,531)    (576) 
Adjustments for: 
Depreciation                                             1,151        1,064    2,191 
Amortisation                                                95            -       37 
(Profit)/loss on disposal of investment 
 properties                                            (1,194)        1,100    2,320 
Finance costs                                            3,880        4,293    8,145 
Share of joint venture profits after tax                 (924)      (1,787)  (2,461) 
Movement in revaluation of investment properties       (6,433)        3,146     (63) 
Movement in lease incentives                              (27)           98  (1,463) 
Impairment/(reversal of impairment) of car 
 parking assets                                            340          496      111 
Reversal of impairment of hotel assets                   (121)            -        - 
Decrease/(increase) in receivables                         524      (1,576)  (2,675) 
Decrease in payables                                   (1,204)        (974)    (922) 
-------------------------------------------------  -----------  -----------  ------- 
Cash generated from operations                           6,551        2,329    4,644 
-------------------------------------------------  -----------  -----------  ------- 
 

14. Net asset value per share

Net asset value per share is calculated as the net assets of the Group attributable to shareholders at each balance sheet date, divided by the number of shares in issue at that date.

 
                                        Six months    Six months         Year 
                                             ended         ended        ended 
                                       31 December   31 December      30 June 
                                              2021          2020         2021 
 Net asset value (GBP'000)                 165,052       151,960      155,395 
------------------------------------  ------------  ------------  ----------- 
 Number of ordinary shares in issue     52,774,977    53,161,950   53,131,035 
------------------------------------  ------------  ------------  ----------- 
 Net asset value per share (pence)            313p          286p         292p 
------------------------------------  ------------  ------------  ----------- 
 

15. Related party information

There have been no material changes in the related party transactions described in the 2021 Accounts.

16. Restatement of prior year figures

During the prior year the Directors identified that a number of the Group's accounting policies were either not in compliance with the relevant accounting standard or where not applied correctly. For this reason prior year figures have been restated and the details are summarised below:

   1)   Classification of owner-occupied assets 

The Group operates a number of car parks on freehold land owned by the Group. Under the relevant accounting standards these owner-occupied car parks are required to be classified as Property, Plant and Equipment. During the period two car parks were identified that were misclassified as Investment Property. The prior year comparatives have been restated to:

-- Reclassify investment property as Freehold and Leasehold Properties (car park activities) within the Consolidated balance sheet, the amount being GBP25,950,000 at 31 December 2020.

-- Recognise a depreciation charge of GBP144,000 within the Consolidated income statement for the period ended 31 December 2020.

-- Recognise an impairment of GBP806,000 on Freehold and Leasehold Properties within the Consolidated income statement for the period ended 31 December 2020.

-- Increase the valuation movement on investment properties in the income statement by GBP950,000 for the period ended 31 December 2020.

The adjustment has no overall effect on the total net assets of the Group at 31 December 2020 or on the Group's loss for the period ended 31 December 2020.

   2)   Measurement of leasehold properties (car park activities) 

The group operates a number of car parks from leasehold properties (right-of-use assets). The Directors consider that the leased sites upon which these car parks are operated fall into one class of asset because they are of similar nature and use in the Group's operations. Accounting standards require right-of-use assets within the same class of assets to be measured consistently using either the cost model or the revaluation model.

In the prior year, leasehold properties were inconsistently split between two classes of assets, being long leasehold and right-of-use assets. Within these classes a mixed measurement approach was applied with two sites held at valuation and the remaining held under the cost model.

The prior year comparative figures have been restated to present all leased car park sites as right-of-use assets within note 6(B) and to consistently apply the cost model to the entire class of assets. The effect of this restatement is:

   --      A decrease in Freehold and leasehold properties of GBP559,000 at 31 December 2020 

-- Recognise an additional depreciation charge of GBP73,000 within the Consolidated income statement for the year ended 31 December 2020

-- Recognise an additional reversal of impairment of GBP60,000 on Freehold and Leasehold Properties within the Consolidated income statement for the year ended 31 December 2020

The adjustment results in a reduction in net assets of GBP559,000 at 31 December 2020. The adjustment also results in a GBP13,000 increase to the Group loss for the period ended 31 December 2020.

   3)   Provisions / trade and other payables 

In the prior year a provision of GBP146,000 was recognised in relation to future anticipated repairs and maintenance costs on an Investment Property owned by the Group. The provision was presented within trade and other payables. The provision should not have been recognised as the amount relates to a future operating cost of the Group. The prior year comparatives have been restated to:

-- Reduce trade and other payables within the Consolidated Balance Sheet by GBP146,000 at 31 December 2020.

The adjustment results in an increase in net assets of GBP146,000 at 31 December 2020. The adjustment has no effect on the income statement for the period ended 31 December 2020.

   4)   Classification of Investments 

The Group owns shares in a company listed on the AIM market of the London Stock Exchange. The total value of the investment at 31 December 2020 was GBP3,937,000 and this was presented in the Consolidated balance sheet within current asset investments. The investment should not have been classified as current because on 31 December 2020 management did not expect to realise the asset within twelve months of the reporting date.

The Group additionally holds shares in an unlisted company which were valued at GBP3,415,000 at 30 December 2020. Previously this investment was presented within car park activities as a non-current investment. This investment has been re-classified outside of car park activities and presented with the Group's listed investment in non-current assets.

The prior year comparatives have been restated to:

-- Decrease current investments in the Consolidated balance sheet by GBP3,937,000 at 31 December 2020

-- Decrease non-current investments (car park activities) in the Consolidated balance sheet by GBP3,415,000 at 31 December 2020

-- Increase non-current investments in the Consolidated balance sheet by GBP7,352,000 at 31 December 2020.

The adjustment has no overall effect on the total net assets of the Group at 31 December 2020 or on the Group's loss for the year ended 31 December 2020.

The above restatements do not have any tax implications as the Group's activities are tax exempt due to its REIT status.

The impact on the Balance Sheet as at 31 December 2020 is as follows:

 
                                       2020            (1)           (2)          (3)            (4)        2020 
                                 Previously    Car parking     Leasehold      Sinking         Listed    Restated 
                                   reported         assets    properties         fund    investments 
                                                                            provision 
                                     GBP000         GBP000        GBP000       GBP000         GBP000      GBP000 
-----------------------------  ------------  -------------  ------------  -----------  -------------  ---------- 
 Non-current assets 
 Property rental 
 Investment properties              259,854       (25,950)             -            -              -     233,904 
 Investments in joint 
  ventures                           15,538              -             -            -              -      15,538 
                                    275,392       (25,950)             -            -              -     249,442 
-----------------------------  ------------  -------------  ------------  -----------  -------------  ---------- 
 Car park activities 
 Freehold and leasehold 
  properties                         49,695         25,950         (559)            -              -      75,086 
 Goodwill and intangible 
  assets                              4,144              -             -            -              -       4,144 
 Investments                          3,415              -             -            -        (3,415)           - 
                                     57,254         25,950         (559)            -        (3,415)      79,230 
-----------------------------  ------------  -------------  ------------  -----------  -------------  ---------- 
 Fixtures, equipment 
  and motor vehicles                  1,058              -             -            -              -       1,058 
 Investments                              -              -             -            -          7,352       7,352 
-----------------------------  ------------  -------------  ------------  -----------  -------------  ---------- 
 Total non-current assets           333,704              -         (559)            -          3,937     337,082 
-----------------------------  ------------  -------------  ------------  -----------  -------------  ---------- 
 Current assets 
 Investments                          3,937              -             -            -        (3,937)           - 
 Assets held for sale                     -              -             -            -              -           - 
 Trade and other receivables          5,121              -             -            -              -       5,121 
 Cash and cash equivalents           17,842              -             -            -              -      17,842 
-----------------------------  ------------  -------------  ------------  -----------  -------------  ---------- 
 Total current assets                26,900              -             -            -        (3,937)      22,963 
-----------------------------  ------------  -------------  ------------  -----------  -------------  ---------- 
 Total assets                       360,604              -         (559)            -              -     360,045 
-----------------------------  ------------  -------------  ------------  -----------  -------------  ---------- 
 Current liabilities 
 Trade and other payables          (12,995)              -             -          146              -    (12,849) 
 Financial liabilities             (49,284)              -             -            -              -    (49,284) 
 Total current liabilities         (62,279)              -             -          146              -    (62,133) 
-----------------------------  ------------  -------------  ------------  -----------  -------------  ---------- 
 Non-current liabilities 
 Financial liabilities            (146,365)              -             -            -              -   (146,365) 
-----------------------------  ------------  -------------  ------------  -----------  -------------  ---------- 
 Total liabilities                (208,644)              -             -          146              -   (208,498) 
-----------------------------  ------------  -------------  ------------  -----------  -------------  ---------- 
 Net assets                         151,960              -         (559)          146              -     151,547 
-----------------------------  ------------  -------------  ------------  -----------  -------------  ---------- 
 Equity attributable 
  to the owners of the 
  Parent 
 Called up share capital             13,290              -             -            -              -      13,290 
 Share premium account                  200              -             -            -              -         200 
 Capital redemption 
  reserve                               559              -             -            -              -         559 
 Revaluation reserve                    750              -         (250)            -              -         500 
 Retained earnings                  137,161              -         (309)          146              -     136,998 
-----------------------------  ------------  -------------  ------------  -----------  -------------  ---------- 
 Total equity                       151,960              -         (559)          146              -     151,547 
-----------------------------  ------------  -------------  ------------  -----------  -------------  ---------- 
 

The impact on the income statement is as follows:

 
                                            2020            (1)           (2)        2020 
                                      Previously    Car parking     Leasehold    Restated 
                                        reported         assets    properties 
                                          GBP000         GBP000        GBP000      GBP000 
----------------------------------  ------------  -------------  ------------  ---------- 
 Gross revenue                            10,436              -             -      10,436 
 Service charge income                     1,301              -             -       1,301 
 Provision for impairment of 
  debtors                                   (22)              -             -        (22) 
 Service charge expenses                 (1,808)              -             -     (1,808) 
 Property expenses                       (3,655)          (144)          (73)     (3,872) 
----------------------------------  ------------  -------------  ------------  ---------- 
 Net revenue                               6,252          (144)          (73)       6,035 
 Administrative expenses                 (2,780)              -             -     (2,780) 
 Other income                                462              -             -         462 
 Other expenses                                -              -             -           - 
 Valuation movement on investment 
  properties                             (4,096)            950             -     (3,146) 
 Impairment of car parking 
  assets                                     250          (806)            60       (496) 
 Profit on disposal of investment 
  properties                             (1,100)              -             -     (1,100) 
 Share of post-tax profits 
  from joint ventures                      1,787              -             -       1,787 
----------------------------------  ------------  -------------  ------------  ---------- 
 Operating loss                              775              -          (13)         762 
 Finance costs                           (4,293)              -             -     (4,293) 
----------------------------------  ------------  -------------  ------------  ---------- 
 Loss before taxation                    (3,518)              -          (13)     (3,531) 
 Taxation                                      -              -             -           - 
----------------------------------  ------------  -------------  ------------  ---------- 
 Loss for the year attributable 
  to owners of the Parent                (3,518)              -          (13)     (3,531) 
----------------------------------  ------------  -------------  ------------  ---------- 
 

The impact on the cash flow statement is as follows:

 
                                               2020            (1)           (2) 
                                         Previously    Car parking     Leasehold         2020 
                                           reported         assets    properties     Restated 
                                             GBP000         GBP000        GBP000       GBP000 
-------------------------------------  ------------  -------------  ------------  ----------- 
 Loss for the financial year                (3,518)              -          (13)      (3,531) 
 Adjustments for: 
 Depreciation                                   847            144            73        1,064 
 Profit on disposal of investment 
  properties                                  1,100              -             -        1,100 
 Finance costs                                4,293              -             -        4,293 
 Share of post tax profits from 
  joint ventures                            (1,787)              -             -      (1,787) 
 Movement in valuation of investment 
  and development properties                  4,096          (950)             -        3,146 
 Movement in lease incentives                    98              -             -           98 
 (Reversal of impairment)/impairment 
  of car parking assets                       (250)            806          (60)          496 
 Increase in receivables                    (1,576)              -             -      (1,576) 
 Decrease in payables                         (974)              -             -        (974) 
-------------------------------------  ------------  -------------  ------------  ----------- 
 Cash generated from operations               2,329              -             -        2,329 
-------------------------------------  ------------  -------------  ------------  ----------- 
 

INDEPENDENT REVIEW REPORT TO Town Centre Securities Plc

Conclusion

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2021 which comprises the consolidated condensed income statement, the consolidated condensed balance sheet, the consolidated condensed statement of changes in equity, the consolidated condensed cash flow statement and the notes to the financial information

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2021 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410"). A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with UK adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, "Interim Financial Reporting.

Conclusions relating to going concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410, however future events or conditions may cause the group to cease to continue as a going concern.

Responsibilities of directors

The directors are responsible for preparing the half-yearly financial report in accordance with the

Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

In preparing the half-yearly financial report, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the review of the financial information

In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statement in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our report

Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

BDO LLP

Chartered Accountants

London, UK

   Date   15 March 2022 

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

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