TIDMINL
RNS Number : 5650D
Inland Homes PLC
30 June 2021
30 June 2021
Inland Homes plc
('Inland Homes' or the 'Group')
Interim Results for the six-month period ended 31 March 2021
DELIVERING ON THE GROUP'S STRATEGIC OBJECTIVES
Inland Homes plc (AIM: INL), the housebuilder, partnership
housing developer and regeneration specialist, today announces its
interim results for the six-month period ended 31 March 2021.
Stephen Wicks, Chief Executive at Inland Homes, commented:
"One of our key objectives is to continue the progress we are
making on the reduction of our net debt. Solid progress has been
made in the first half and we expect this process to continue
through to the year end.
"We continue to see increased demand for our quality land assets
and planning expertise in the asset management division from
investors, developers, Build to Rent operators and housing
associations. During the reporting period, we secured planning on
the Hillingdon and Walthamstow schemes within this division, which
combined, will deliver 1,097 new homes. The asset management
division remains an area of focus for the business. The capital
light nature of this work is geared to positive cash generation and
we expect to see further growth.
"I would like to thank all our employees for their continued
hard work and ability to adapt to the continually changing external
environment. There is still a fundamental shortage of new homes,
while demand for consented land with planning permission and
affordable housing in the South and South East of England remains
strong."
Highlights
Inland Homes continues to deliver on its key strategic
objectives, namely: the reduction of net debt, optimising the
returns from our valuable land bank, growing the capital light
asset management business, maximising the value of the land we own
with planning consent and delivering much needed new homes.
-- Gross development value of the Group's portfolio was up by
3.2% at GBP3.2bn (30 September 2020: GBP3.1bn).
-- Land bank at 31 March 2021 totalled 10,573 plots (30
September 2020: 11,045 plots, 31 March 2021: 9,143), a 4.3% decline
from the year end.
-- Excluding joint ventures, the Group sold 101 private homes
(30 September 2020: 96, 31 March 2020: 56) and a hotel, realising
GBP39.0m (30 September 2020: GBP23.8m, 31 March 2020: GBP13.8m)
during the period. The average selling price of these homes was
GBP254,000 (30 September 2020: GBP287,000, 31 March 2020:
GBP241,000).
-- The Group's capital light asset management division continues
to show strong growth and at 31 March 2021 is engaged on six
projects, which have the potential for more than 3,275 new homes
(30 September 2020: 3,181).
-- A resolution to grant planning permission for 583 units was
achieved on the former Homebase site in Walthamstow, with detailed
planning consent granted in April 2021. Contracts have been
exchanged to sell 355 private units for a total consideration of
GBP116m, including a build contract of GBP88.5m awarded to Inland
Partnerships.
-- The Group's joint venture, High Wycombe Developments Limited,
completed the planned block sale to Build to Rent operator
PGIM.
-- Cash and cash equivalents increased by 78% since year end to
GBP28.0m (30 September 2020: GBP15.7m; 31 March 2020: GBP17.8m)
which includes restricted cash of GBP13.8m (30 September 2020:
GBP4.7m, 31 March 2020 GBP1.2m).
-- Net debt at 31 March 2021 was GBP132.9m representing a 10%
reduction since the year end (30 September 2020: GBP148.2m, 31
March 2020: GBP152.3m). In addition, at 31 March 2021 the Group has
further undrawn bank facilities of GBP39.2m (30 September 2020:
GBP45.8m, 31 March 2020: GBP27.7m).
-- Net gearing at 31 March 2021 was 79.1% (31 March 2020:
96.2%), a reduction of has decreased by 6.4% as at 31 March 2021
and was 79.1% (31 March 2020: 96.2%), compared to the previous year
end at 30 September 2020, when net gearing was 85.5%.
-- Revenue up 31% at GBP78.0m for the six months ended 31 March
2021(31 March 2020: GBP59.6m), including GBP13.2m for the sale of a
105-bedroom hotel in Bournemouth, pre let to Premier Inn, at the
Group's Wessex site.
-- The loss before taxation amounted of GBP5.8m (30 September
2020: profit before taxation of GBP3.7m, 31 March 2020: loss before
taxation GBP7.2m).
Financial and operational
The results for the six-month period were adversely affected by
timing of activity and two non-recurring items.
First, a GBP4.5m asset management fee relating to planning
consent at Walthamstow which had been forecast to be received in
the first half of the financial year, was achieved in mid-April
2021. Additionally, the Group was made aware of previously
unforeseen and additional costs of approximately GBP3.2m relating
to one housebuilding site and one partnership housing contract
income contract. This negative impact was partly offset by GBP1.0m
of additional housebuilding revenues at two other housebuilding
sites where achieved prices exceeded budget.
Notwithstanding these items and based on management's current
expectations regarding the timing of planning applications on
certain sites and planned sales completions, the financial outlook
for the Group for this financial year remains unchanged.
There was a decline in the EPRA undiluted NAV per share to
97.80p (30 September 2020: 103.96p, 31 March 2020: 109.30p) due to
market valuation fluctuations in the underlying land portfolio of
GBP8.3m.
The Group exchanged contracts to sell a further 53 plots for
GBP14.0m at its flagship development at Wilton Park, Beaconsfield
which is scheduled to complete in September 2021. The Group
released the first of the existing homes at Wilton Park that were
acquired with the site in 2008. These houses, originally let to the
Ministry of Defence service personnel, have been substantially
renovated and reconfigured. Five of the properties were reserved at
31 March 2021 and subsequently at the date of this report, eight
completions have been achieved, for a total consideration of
GBP5.2m.
During the period, the Group submitted planning applications for
1,893 homes and received outline or detailed approval for 666 new
homes and 5,985 square feet of commercial space. Planning
applications submitted include an application for a residentially
led mixed-use scheme with 1,629 homes on the 36-acre Cavalry
Barracks site in Hounslow, one of the largest brownfield sites in
London with an estimated gross development value of GBP600m.
Following receipt of planning consent for 583 units on the
former Homebase site in Walthamstow in April 2021, contracts have
been exchanged to sell 355 private units for a total consideration
of GBP116m, including a build contract of GBP88.5m awarded to
Inland Partnerships. This is Inland Partnership's largest award to
date and takes the partnership housing contract income forward
order book to GBP139.9m. Inland Partnerships is additionally at an
advanced stage of negotiations with a major G15 housing association
to deliver the remaining homes on this important inner-city
site.
A resolution to grant planning permission for 700 new homes,
including 220 affordable houses and 25,000 square feet of
commercial space was obtained at Gardiners Park Village in Basildon
in conjunction with Homes England in May 2021.
Outline planning consent for 205 new homes on Parcel 1b and a
detailed planning consent for 22 new homes, commercial space and
community facilities on Parcel 14 have been received at the Group's
joint venture development at Cheshunt.
The Group won the WhatHouse? 2020 Gold award in the Best
Regeneration Scheme category for its sought-after Chapel Riverside
scheme in Southampton.
Hugg Homes was the winner of the 'Innovator of the Year: Housing
Delivery' at the UK Housing Awards demonstrating the Group's
commitment to socially affordable housing solutions for all.
Enquiries
Inland Homes plc: Tel: 44 (0)1494 762450
Stephen Wicks, Chief Executive
Nishith Malde, Finance Director
Gary Skinner, Managing Director
Panmure Gordon (UK) Limited Tel: 44 (0)20 7886 2500
Dominic Morley
Erik Anderson
Instinctif Partners Tel: 44 (0)20 7457 2020
Tim McCall
Rosie Driscoll
Galyna Kulachek
The information contained in this Announcement is deemed by the
Company to constitute inside information as stipulated under the
Market Abuse Regulations (Regulation 596/2014), as it forms part of
domestic law by virtue of the European Union (Withdrawal) Act 2018
("MAR").
Notes to Editors:
Incorporated in the UK in 2005, Inland Homes plc is an
AIM-listed specialist housebuilder and brownfield developer,
dedicated to achieving excellence in sustainability and design.
Inland Homes acquires brownfield land in the South and South
East of England principally for residentially led development
schemes. The business then enhances the land value by obtaining
planning permission, before building open market and affordable
homes or selling surplus consented land to other developers to
generate cash.
The Company is committed to extensive public and community
consultation in order to ensure that, where possible, local
community needs and objectives are met.
Inland's aim is to create sustainable communities and homes
which set a benchmark for all future developments in the South and
South East of England. The Company is always looking for brownfield
sites without planning permission for future development.
Environmental, Social and Governance credentials
Inland Homes is committed to ensuring its land, housebuilding
and partnership housing activities leave a positive lasting legacy.
As specialists in brownfield site regeneration the Group already
has a proud history of adding lasting value through its expertise
and experience in site remediation, which allows derelict and near
derelict land to be regenerated and used for the construction of
new homes.
As a responsible business and against the broader backdrop of an
escalating global climate issue, Inland Homes has developed its
Environmental, Social and Governance (ESG) framework. The Group's
ESG framework, which has been aligned to four of the UN Sustainable
Development Goals, sets out our high-level commitments. Using this
framework, we are now focused on developing a full ESG strategy.
The strategy will identify clear goals and metrics to enable us to
measure and report on our performance and success in this
space.
For further information, please visit: the Inland Homes website
at: www.inlandhomesplc.com
Hugg Homes - www.hugghomes.co.uk
Rosewood Housing - www.rosewoodhousing.co.uk
CHAIRMAN'S STATEMENT
Introduction
This is my first statement to shareholders, having become
Chairman in March 2021. Despite the global COVID-19 pandemic and
the headwinds in the housebuilding sector, the Group started this
financial year with cautious optimism. Inland Homes has a flexible
business model and generates income from multiple sources, which
allows it to adapt to reflect changing market circumstances.
In light of the current market conditions, the Group's key
strategic priorities remain: the reduction of net debt, optimising
the returns from our valuable land bank, growing the capital light
asset management business, maximising the value of the land we own
with planning consent and delivering homes which meet the market's
needs in the most cost-effective way.
The health and safety of our staff, colleagues, customers and
suppliers remains our upmost priority. Inland Homes is an agile
business and has risen to the challenges created by the COVID-19
pandemic, buoyed by strong demand for housing in the first six
months. I would like to personally thank all our staff for all
their continued hard work and support.
Delivering on the Group's strategic objectives
Reduction of net debt
One of the key strategic priorities of the Group is the
reduction of net debt. Following the start of the COVID-19
pandemic, the Group quickly took several decisive measures designed
to reduce costs and preserve cash. Most of these measures remain in
place and have proved highly effective. Cash and cash equivalents
have increased by 78% since the year end to GBP28.0m (30 September
2020: GBP15.7m; 31 March 2020: GBP17.8m), which includes restricted
cash of GBP13.8m (30 September 2020: GBP4.7m, 31 March 2020:
GBP1.2m) held on behalf of Homes England.
Additionally, the Group has completed a considerable amount of
work in successfully extending the maturity of its debt facilities.
Net debt at 31 March 2021 was GBP132.9m representing a 10%
reduction since the year end (30 September 2020: GBP148.2m, 31
March 2020: GBP152.3m). Net gearing at 31 March 2021 was 79.1% (31
March 2020: 96.2%) compared to the previous year end at 30
September 2020, when net gearing was 85.6%. In addition, at 31
March 2021 the Group has further undrawn bank facilities of
GBP39.2m (30 September 2020: GBP45.8m, 31 March 2020:
GBP27.7m).
Optimising the returns from the Group's valuable land bank
Inland Homes' valuable land bank is the foundation of the
Group's business. Inland Homes looks to achieve a balanced return
from its land bank. Short and medium-term returns are achieved by
the sale of plots with planning consent or the sale of whole
consented sites and partnership housing contracts with local
authorities and Build to Rent (BtR) investors. Longer-term returns
are delivered from the Group's strategic land bank, where plots are
usually controlled by way of a discount to market value option.
At 31 March 2021, the gross development value of the Group's
portfolio was GBP3.2bn (30 September 2020: GBP3.1bn).
In a strong land market, the Group will look to selectively
optimise the returns from its existing land bank in the coming
months, where attractive returns can be made.
Growing the capital light asset management business
At the heart of Inland Homes' business is finding brownfield
sites, obtaining planning consent, remediating the land where
necessary, installing the infrastructure and then either developing
the site ourselves or selling it on to a third party. In recent
years we have been expanding our asset management division, where
typically much of the capital for the project is found from
external investors. The Group enters into a planning and management
services agreement which typically requires the procurement of a
relevant site, obtains planning consent using our considerable
experience in this field, and proposes a plan for the disposal of
the site once planning permission has been obtained.
Our asset management division benefits the Group in three
principal ways: it optimises the Group's land and planning
expertise, it significantly reduces the capital investment required
and it enables Inland Homes to earn management fees as the various
milestones of the project are achieved. As the projects are capital
light (where our skills and expertise are the service), the schemes
can generate significant and attractive returns.
Typically, these transactions are structured so that any debt
incurred is generally non-recourse to the Group and on the sale of
a site with planning consent, a partnership housing contract may be
secured by Inland Homes for the construction of the homes.
At 31 March 2021, we currently have six active projects that
have the potential for more than 3,275 new homes (30 September
2020: 3,100). In the first half of the year, the Group submitted a
planning application for 1,629 homes at Cavalry Barracks, Hounslow
and received outline planning consent for 583 homes at the former
Homebase store in Walthamstow. Detailed planning consent was
achieved in April 2021 at Walthamstow and in line with the asset
management model outlined above, contracts have now been exchanged
for the private units within this site, for a total consideration
of GBP116m.
Maximising the value of the land we own with planning
consent
The decision to sell, develop or partner with third parties is
based on a site-by-site assessment of which activity will deliver
the best returns, subject to the overriding cash requirements of
the Group.
The total number of land bank plots at 31 March 2021 was 10,573
(30 September 2020: 11,045), which represents a marginal decline
from the year end but nevertheless represents a strong land bank
position.
The Group's land bank consists of plots with planning permission
amounting to 2,886 (30 September 2020: 2,470), plots where planning
has been submitted amounting to 3,535 (30 September 2020: 1,819),
plots where planning has yet to be submitted amounting to 1,385 (30
September 2020: 3,961) and strategic land bank plots amounting to
2,767 (30 September 2020: 2,795).
Deliver homes which meet the market's needs
Inland Homes designs and builds new homes that are targeted at
the first-time buyer. The Group's credentials as a high-quality
housebuilder are evidenced by the number of award-winning
developments. In line with customer demand, the priority for the
Group remains the construction of houses, rather than apartments,
for private sale.
During the period, the underlying residential housing market has
been strong as a result of a number of factors, including the
plentiful supply of mortgages with low interest rates, the
extension of the stamp duty holiday until June 2021 and the
shortage of supply, which was exacerbated by the COVID-19
pandemic.
Against this economic backdrop, excluding joint ventures, the
Group sold 101 private homes (30 September 2020: 96, 31 March 2020:
56) and a hotel, realising in aggregate GBP39.0m (30 September
2020: GBP23.8m, 31 March 2020: GBP13.8m) during the period. The
average selling price of these homes was GBP254,000 (30 September
2020: GBP287,000, 31 March 2020: GBP241,000), with 51.5% of these
sales making use of the Help to Buy scheme (31 March 2020: 48%).
The Group's net private reservation rate per active sales outlet
was 0.68 (31 March 2020: 0.71) unit.
Land portfolio
In the first half of the Group's financial year, Inland Homes
submitted planning applications for 1,893 homes and received
outline or detailed approval for 666 new homes and 5,985 square
feet of commercial space. A resolution to grant planning
permission, subject to the signing of a Section 106 agreement, for
700 new homes, including 220 affordable houses and 25,000 square
feet of commercial space at Gardiners Park Village in Basildon was
received in May 2021.
The planning application for the 54-acre Gardiners Park Village
site was submitted in conjunction with Homes England, which has a
majority interest in the site and with whom the Group has been
working since April 2020. In addition to the commercial space, the
development will also provide a site for a new school and sporting
facilities. The land for this development will be acquired over a
five-year period and the gross development value for the site is
estimated to be around GBP200m.
Inland Homes' flagship development at Wilton Park, Beaconsfield
is set to provide 304 new homes, and related community facilities.
In September 2020, we completed the sale of 94 plots to Bewley
Homes, a specialist high quality residential developer. This sale
is part of phase I and II of the overall project, which comprises
147 new homes, including 40 affordable homes.
At the start of the period under review, the Group released for
sale the first of the existing homes at Wilton Park that were
acquired with the site. These houses, which were originally let to
Ministry of Defence service personnel, have been substantially
renovated and reconfigured, to include new open plan living areas
and contemporary kitchens and bathrooms. Five of the properties
were reserved at 31 March 2021 and subsequently at the date of this
report, eight completions have been achieved, for a total
consideration of GBP5.2m.
Inland Homes is working with Broxbourne Borough Council and
others to transform the Group's joint venture development at
Cheshunt Lakeside, Cheshunt. Planning permission has been agreed
and the plans will transform the site, with 1,725 new homes, new
business space and other community amenities, including a new
primary school. Phase I of the scheme was sold to a local housing
association in June 2020, with the Group being awarded the
associated contract to construct 195 apartments. Construction
commenced in October 2020 and is progressing well.
A resolution to grant detailed planning consent for Parcel 1b
for 205 new homes and a detailed planning consent for Parcel 14 for
22 new homes, commercial space and community facilities have been
received. Discussions are underway with a number of interested
parties who have expressed an interest in the site for partnership
housing.
The Group also concluded the sale of a 105-bedroom hotel at the
Group's Wessex Hotel site in Bournemouth, pre let to Premier Inn,
to Aviva for GBP13.2m. The construction is the first hotel built by
Inland Homes. At the same site, the Group is also constructing 94
apartments with construction due to be completed shortly. The
development is within a renowned seaside destination and to date
sales have been very promising, with 12 apartments sold at 31 March
2021 and 26 at the date of this report.
Inland Homes was delighted to win the WhatHouse? 2020 Gold award
in the Best Regeneration Scheme category for its sought-after
Chapel Riverside scheme in Southampton. This nine-acre regeneration
project on a former derelict brownfield site will deliver, on a
phased basis, 520 new one, two, and three-bedroom homes and 64,000
square feet of commercial space. The site has required extensive
remediation and civil engineering works including the demolition of
disused buildings, ground decontamination and the sinking of a 25m
diameter water tank below ground level. The level of the site has
been raised and the first 210m section of the sea wall to protect
the city from flooding has been completed. Within the current
phase, of the 108 apartments constructed to date, I am pleased to
report that 68 were sold at 31 March 2021 and 88 at the date of
this report, with a further 18 reserved for sale.
In May 2021, the Group also fully repaid Homes England who had
provided the development finance for the Chapel Riverside
scheme.
Asset management
Since the start of the financial year, the Group's asset
management business has continued to show strong growth.
Having secured planning consent in April 2021 for 583 units on
the former Homebase store in Walthamstow, we are delighted to
announce that contracts have been exchanged with London BTR
Investment Holdings to sell 355 private units for a total
consideration of GBP116m. This includes a GBP88.5m build contract
awarded to Inland Partnerships.
The Group has also submitted a planning application for a
residentially led mixed-use scheme for 1,629 homes on the 36-acre
site Cavalry Barracks site in Hounslow. This site represents one of
the largest brownfield sites in London, with an estimated gross
development value of GBP600m. The Group currently anticipates that
planning permission will be granted on this site during the first
half of our next financial year.
The Hillingdon Gardens scheme at the former Master Brewer site
in Hillingdon has been the cause of much frustration. Inland Homes'
scheme will transform the currently derelict former commercial site
into a residentially led mixed-use neighbourhood with a network of
pedestrianised areas, landscaped public squares and additional
green spaces.
Previously, the Group had submitted a planning application for
514 much needed new homes on this site, including 182 affordable
homes. The Secretary of State resolved that the application could
be determined at local level by the Greater London Authority and
planning consent was granted in April 2021.
Subsequently, the London Borough of Hillingdon has sought a
judicial review of this decision. The legal advice the Group has
received indicates that the claim has no merit, but the timeline
for resolution of this issue is outside of the Group's control. The
Group will provide an update in due course.
The Group also has two further sites in Barking and Dagenham and
planning applications for 364 new homes on these two sites have
recently been submitted.
Partnership housing contract income
The Group continues to see increasing demand from affordable
housing providers and BtR operators for partnership housing. The
advantage for Inland Homes is that the Group can recognise a return
from the land sale and make returns and generate cash flow from the
associated build contract over the medium term.
At 31 March 2021, contracting income is substantially ahead of
the comparative period last year. The number of partnership homes
under construction amounted to 946 (30 September 2020: 1,302
homes).
The Group has a build contract with Clarion Housing Group for
the construction of 325 residential units at its site in
Merrielands, Dagenham. The development of this four-acre site,
originally part of the Ford car plant, will provide more than
16,000 square feet of commercial space and other associated amenity
areas.
Additionally, as referred to above, the Group has just exchanged
a GBP88.5m build contract with a BtR operator for the construction
of 355 private homes at the former Homebase store in Walthamstow.
Construction of the homes is set to commence in September 2021,
with build completion anticipated in 2025. This is Inland
Partnerships largest award to date and takes the partnership
housing contract income forward order book to GBP139.9m. In
addition, Inland Partnerships is at an advanced stage of
negotiations with a major G15 housing association to deliver the
remaining homes on this important inner-city site.
The Group continues to seek partnership housing contract income
contracts, which provide an exit for land disposals with the added
advantage of an ongoing construction contract. The Group is
proactively working to improve its commercial delivery and
operational efficiency to drive up gross margins in this business.
However, unforeseen build costs along with extended construction
periods
in the first six months of the year that are expected to
continue on certain sites, will continue to affect the margins in
this division.
Group results
Income statement
Revenue for the six months, including GBP13.2m for the sales
completion of the hotel in Bournemouth, was up 31% on the same time
last year at GBP78.0m (30 September 2020: GBP124.0m, 31 March 2020:
GBP59.6m). Partnership housing contracting income was down 19% to
GBP28.5m (30 September 2020: GBP51.8m 31 March 2020: GBP35.3m). The
Group has benefitted from the underlying strength of the
residential housebuilding sector and housebuilding income was up
183% at GBP39.0m (30 September 2020: GBP23.8m, 31 March 2020:
GBP13.8m), primarily as a result of sales made at the Group's
developments at Chapel Riverside, Southampton and the Wessex Hotel
site in Bournemouth.
The Group's management fees from asset management are recognised
once the Group has achieved the milestones set out in each
individual contract. It is entirely usual for the Group to earn a
fee on specific performance, including the successful gaining of
planning permission. These results were affected by the timing of
planning permission achieved in our asset management business at
Walthamstow, which had originally been anticipated during the
six-month period covered by these interim results. Timing of such
decisions is clearly not in Inland Homes' hands and the planning
permission on this development was not received until April 2021.
As a result, the GBP4.5m management fee relating to this will not
be recognised until the second half of the financial year.
Additionally, the Group was made aware of previously unforeseen
and additional costs of approximately GBP3.2m relating to one
housebuilding site and a partnership housing contract. This was
partially offset by GBP1.0m of additional forecast revenues,
resulting from strong demand at two of the Group's housebuilding
sites.
During the period, the Group experienced some direct materials
cost inflation, which have put further pressure on the Group's
margins. The Group's gross profit margins on its contract income
and housebuilding are currently unsatisfactory and the Board has
carried out a thorough investigation and tightened commercial
review procedures to rectify this issue. As a result of the steps
taken, the Board would expect to see margin improvement over the
next two financial years.
At 31 March 2021, the project teams hold project contingencies
within their budgets totalling GBP3.3m (30 September 2020:
GBP4.0m).
As a consequence of these factors, total gross profit was 27%
lower at GBP3.5m (31 March 2020: GBP4.9m). Overheads reflect the
cost cutting and other measures taken by the Board in response to
the COVID-19 pandemic and were significantly lower at GBP4.1m (31
March 2020: GBP7.6m) due to the strategic streamlining of overheads
undertaken during 2020. The interest cost amounted to GBP4.8m (31
March 2020: GBP4.5m). The loss before taxation was an improvement
on the comparable period and amounted to GBP5.8m (31 March 2020:
loss before taxation GBP7.2m). No interim dividend is proposed.
The basic loss per share for the six months ended 31 March 2021
was lower at 2.50p (31 March 2020: Loss 3.20p).
Net assets and EPRA
Net assets at 31 March 2021 have increased to GBP168.0m (31
March 2020: GBP156m) when compared with last year due to the
placing of new shares in May 2020, but decreased against the prior
year end (30 September 2020: GBP173.3m) due to the trading loss.
The net assets per share shows a small decline at 73.6p (31 March
2020: 75.8p per share) when compared with the previous period (30
September 2020: 76.5p per share).
There was a decline in the EPRA undiluted net asset per share at
31 March 2021 which was 97.66p (30 September 2020: 103.6p per
share). The principal reason for this, was the loss in value
attributable to one of the Group's properties, which falls under
the governance of a local council, who recently withdrew their
five-year local plan in light of the Government's White Paper for
Planning for the Future and the unprecedented impact of the
COVID-19 pandemic.
Non-current assets
The Group's investment properties principally comprise the
existing residential properties at Wilton Park and the Group's
development site in Poole, Dorset. At 31 March 2021, these showed
an increase to GBP49.5m (30 September 2020: GBP43.5m) due to the
commencement of construction on an investment property and a
transfer from inventories of assets that the Group plans to hold
for the long term. Other receivables of GBP23.7m (30 September
2020: GBP22.3m) include GBP19.9m of deferred consideration due on
the sale of our 50% interest in the company that owns the site at
Cheshunt, which will be repaid as the development progresses out of
dividends distributed by the joint venture.
Inventories, trade and other receivables
Inventories reduced over the period and at 31 March 2021 were
GBP159m (30 September 2020: GBP173.6m), reflecting the slight
reduction in the land bank and the strong demand from buyers for
Inland Homes properties. Trade and other receivables increased to
GBP73.4m (30 September 2020: GBP60.9m), principally as a result of
increased management fees due to the Group from the asset
management business.
Cash and net debt
One of the Group's key strategic aims is the reduction of net
gearing and it is, therefore, gratifying to note that cash and cash
equivalents have increased by 78% since the year end to GBP28.0m
(30 September 2020: GBP15.7m), which includes restricted cash of
GBP13.8m (30 September 2020: GBP4.7m) held on behalf of Homes
England.
At the beginning of this financial period, the Group triggered
the accordion part of its revolving credit facility with HSBC. This
takes the available facility from GBP45m to GBP65m. This facility
provides the Group's housebuilding activity with balance and
flexibility as the proceeds of sales from Inland Homes' sites are
used to repay the facility and the facility is used to fund the
ongoing housebuilding programme.
The Group has completed a considerable amount of work in
successfully extending the maturity of its other debt facilities.
As at 31 March 2021, gross debt was GBP160.9m (30 September 2020:
GBP163.9m) and of this approximately GBP41m (31 March 2020: GBP59m)
was due for repayment within 12 months compared to GBP70m at 30
September 2020. In addition, at 31 March 2021 the Group has further
undrawn bank facilities of GBP39.2m (30 September 2020:
GBP45.8m).
Net debt at 31 March 2021 was GBP132.9m representing a 10%
reduction since the year end (30 September 2020: GBP148.2m). Net
gearing at 31 March 2021 was 79.1% (31 March 2020: 96.2%) compared
to 85.6% as at 30 September 2020.
Assets held for resale
The assets held for resale at 31 March 2021 amounted to GBP11.1m
(30 September 2020: GBP12.5m) and represent some of the existing
residential properties at Wilton Park, which are being refurbished
for sale and another commercial property.
Other financial liabilities
Other financial liabilities at 31 March 2021 of GBP11.1m (30
September 2020: GBPNil) reflects deferred land consideration
amounts, which are expected to be paid within one year.
Dividends
One of the key strategic aims of the Group is the reduction of
net gearing and the Board will look to resume the payment of
dividends as soon as possible after this objective has been
achieved.
Forward order book
The Group currently has forward residential home sales of
GBP39.1m, which includes a large block sale to a third party
scheduled to complete during second quarter of the financial year
ending 30 September 2022. Additionally, the Group has a forward
partnership housing contract income order book of GBP139.9m, with a
further construction contract totalling GBP41.9m at a very advanced
stage, which is expected to be signed shortly. The Group has
previously contracted to sell a parcel of land for GBP14.0m
(including infrastructure works), subject to certain conditions
being fulfilled and is on track to satisfy these conditions as
planned.
Board
There were a number of changes to the Board during the period.
Carol Duncumb joined the Board in January 2021 and I became the new
Chairman of Inland Homes in March 2021. There have also been some
consequential changes to the Board Committees, with Carol becoming
Chair of the Remuneration Committee and our fellow Non-executive
Director Brian Johnson becoming a member of the Audit Committee,
which I am now chairing.
The Board remains committed to upholding the good governance
principles as set out in the Quoted Companies Alliance (QCA)
Corporate Governance Code.
Environmental, Social and Governance
Inland Homes is committed to ensuring our land, housebuilding
and partnership housing activities leave a positive and lasting
legacy. As specialists in brownfield site regeneration the Group
already has a proud history of adding lasting value through our
expertise and experience in site remediation, which allows derelict
and near derelict land to be regenerated and used for the
construction of new homes.
As a responsible business and against the broader backdrop of an
escalating global climate issue, Inland Homes has developed its
Environmental, Social and Governance (ESG) framework. The Group's
ESG framework, which has been aligned to four of the UN Sustainable
Development Goals, sets out our high-level commitments. Using this
framework, we are now focused on developing a full ESG strategy.
The strategy will identify clear goals and metrics to enable us to
measure and report on our performance and success in this
space.
Going concern
The Board is also mindful that no one can forecast exactly how
changing macroeconomic circumstances post pandemic will play out
and how this may affect the Group, industry and the wider economy
for the foreseeable future. In particular, future changes to
government policy relating to the housing market and the planned
withdrawal of the furlough scheme could have implications for the
Group as it would for many other businesses. Such a situation would
require the Board to re-examine the Group's financial position at
the time and if necessary, report any significant adverse
changes.
At the time of approving the Interim Report and after making
appropriate enquiries, the Directors consider that the Group has
adequate resources to continue in operational existence for the
foreseeable future. The Directors have performed a detailed
sensitivity analysis to test the Group's liquidity and forecast
banking covenants based on several scenarios. The Directors have
also considered a severe, but plausible downside scenario. Under
this scenario, further details of which are set out in Note 2, the
Group may have to consider using capital markets to raise
additional debt or equity to generate additional liquidity for the
Group to meet its obligations as they contractually fall due. The
Directors therefore consider it appropriate to prepare the
financial statements on the Going Concern basis.
Outlook
The Group's main strategic objective remains the reduction of
net debt and it is actively working on a number of initiatives to
crystalise profit from its valuable land bank. The Group has a
number of ongoing construction projects which will generate further
cashflow. In addition, we would expect to see further growth from
the Group's asset management and partnership housing
businesses.
In the absence of any unforeseen circumstances therefore, based
on management's current expectations regarding the timing of
planning applications on certain sites and planned sales
completions, the financial outlook for the Group for this financial
year remains unchanged.
As the economy emerges from the COVID-19 pandemic, there can be
no certainty as to what the longer-term repercussions will be.
Furthermore, the housebuilding industry and the economy as a whole
are facing some headwinds, including quite significant cost
inflation on certain products, the unwinding of the Government's
furlough scheme and the possible increase in unemployment
numbers.
However, the fundamental shortage of quality new homes in the
South and South East of England remains. The market for consented
land with planning permission and the demand for houses built by
Inland Homes remains strong and I look forward to reporting on the
further progress made during the second half of our financial
year.
Simon Bennett
Chairman
APPIX
Principal risks and uncertainties
The Group's going concern assessment considers its principal
risks which were previously set out in the "Principal risks and
uncertainties" section within its Annual Report for the year ended
30 September 2020. The Directors have reassessed these key risks
and consider that they all remain the same with the exception of
Risk C "Adverse Government policy and planning regulation" which
the Directors now consider as a "High" risk due to the recent
experiences that Group has encountered in the six-month period to
31 March 2021 and up to and including the date of this report.
The following table outlines our principal risks and sets out
how these key risks are managed:
Existing mitigations
and Change since last
Risk Description Consequences of risk internal controls Rating year
A The COVID-19 -- Significantly reduced -- Balanced High New risk
Infectious pandemic has revenue or no revenue for business model
diseases demonstrated a period of time -- with
that the spread Severe impact on cash housebuilding
of an infectious flow -- Difficulties in and contracting
disease or virus meeting the Group's activities
can liabilities -- Danger of complementing
lead to the breaching banking its
Government covenants land trading
imposing business -- The
controls, Group's
including the Operating Board
movement of regularly
people and the ensures that
closing the Group's
of different business
parts of the continuity and
economy and disaster
business recovery plans
are tested and
updated where
required --
Ensuring IT
capabilities to
accommodate
efficient home
working --
Maintaining
sufficient
headroom within
existing
facilities
---------------- ---------------- ------------------------------- --------------------- ------- -----------------
B A decline in -- A fall in the demand -- Economic High No change
Adverse economic macro-economic for housing and a environment
conditions conditions in material decline of both considered
the UK and/or a transaction levels and before
downturn in house prices as a result committing to
conditions of low consumer significant
affecting confidence impacted by: transactions or
the UK -- higher unemployment or events
residential fear of unemployment -- such as land
housing market ongoing economic purchases and
or a decline in uncertainty -- weak real sales launches
the propensity wage growth and reduced -- Control over
of people to buy disposable income -- land
homes rising interest rates -- acquisitions --
growing inflation -- Refined
restriction in the strategic
availability priorities to
of mortgages -- Business maximise market
uncertainty due to policy opportunities
changes -- Downward land -- A focus on
and investment Build to Rent
property portfolio contracts gives
valuation greater
certainty over
cash flow --
Strong
financial
forecasting and
scenario
planning
---------------- ---------------- ------------------------------- --------------------- ------- -----------------
C Potential -- Risk of delay or -- Considerable High Increased
Adverse changes in refused planning in-house
Government Government decisions -- Uncertainty technical and
policy and policy and its around design solutions planning
planning local -- Programmes expertise
regulations implementation, and commencements on site available to
such as changes disrupted -- Increased address the
to the costs due to excessive prevailing
planning system, planning conditions regulations --
the tax regime, (CIL and Section 106), Strong
housing, increasing environmental relationships
environmental or and other taxes -- maintained with
building Increased costs due to local
regulations or more challenging authorities,
amendment sustainability targets planning
of the Help to and fire and safety officers and
Buy scheme regulations. -- Adverse local
effect communities to
on revenues, margins and better
asset values -- Failure understand
to comply with the underlying
requisite laws or policy and
regulations planning
may lead the Group to be prospects --
fined and suffer Regularly
reputational damage -- review
Reduction in sales prospects of
resulting the strategic
from changes to the Help land portfolio,
to Buy Scheme with processes
and appraisals
in place to
minimise
disruption --
Focus on
acquiring
development
sites already
allocated for
development
-- Potential
impact of
changes in
regulations are
communicated
throughout the
relevant
departments
-- Ensuring a
greater
proportion of
future product
is within the
price range of
the revised
Help to Buy
Scheme,
extended until
spring 2023
---------------- ---------------- ------------------------------- --------------------- ------- -----------------
D An inadequate -- Portfolio depletion - -- Highly Low No change
Inability to supply of fewer longer-term sites experienced
source and suitable land or to replenish the Land and
develop suitable the inability to portfolio at good margins Planning teams
land convert the -- Impact to in-house employed with
unconsented land construction strong track
portfolio arm/self-build function record of
into viable -- Operational start securing
consented sites dates delayed sites and
may frustrate on site planning
the Group's consents --
growth Targeted
approach to
land
acquisitions
through
dedicated Land
Team -- Local
insight and
established
relationships
with agents and
vendors give us
a competitive
edge -- All
potential land
acquisitions
are subject to
a robust
appraisal
process to
ensure
viability
---------------- ---------------- ------------------------------- --------------------- ------- -----------------
E Unforeseen -- Increased costs and -- Sites are Medium/ New risk
Failure to operational reduced margins -- monitored as a High
effectively delays caused by Reduced quality of portfolio by
manage major disputes with product -- Health and the Board
projects to third parties, safety before any
industry adverse weather issues -- Reputational major
standard margins conditions damage acquisitions
or lack of are made
project -- Each site
oversight could has a detailed
lead to delay, plan prepared,
increased costs including
or termination costs, labour
of a project utilisation and
timing
and is managed
by the Group's
Operating Board
and by on-site
management --
Checks in place
to ensure
personnel
adhere to
internal
controls --
Regular
management and
project team
monitoring
-- Ensuring
appropriate
insurance is in
place --
Dedicated
COVID-19
resource to
monitor on
site compliance
---------------- ---------------- ------------------------------- --------------------- ------- -----------------
F A deterioration -- Immediate personal -- Strong Medium/ Increased
Health and in the Group's injury or damage to safety culture High
safety health and property -- Reputational driven by
safety measures, damage -- Directors and
including Prosecution/imprisonment/ Senior staff --
failure to significant fines -- Experienced
adhere to Remediation or legal Health and
COVID-19 safe costs -- Programme delays Safety
working and inability to reach Department
practices, put forecast figures/market reinforces
our people at expectation safety culture
risk and carefully
monitors
adherence to
guidance --
Annual
Health and
Safety
Workshops for
all staff
---------------- ---------------- ------------------------------- --------------------- ------- -----------------
G Inability to -- Inability to meet -- Remuneration Low No change
Staff attract and strategic objectives -- packages are
retain high Pressured workloads where regularly
calibre teams are under-resourced benchmarked
employees at all -- Over reliance on against
levels consultants and agency industry
staff -- Inefficiencies standards to
and delays to operations ensure
resulting in increased competitiveness
costs could adversely -- Dedicated HR
affect the Group's team which
financial results and monitors pay
prospects structures and
market trends
-- Providing
quality
training and
professional
development
opportunities,
including
through our
Graduate and
Apprenticeship
Programmes --
Development of
preferred
supplier list
of specialist
recruitment
firms
---------------- ---------------- ------------------------------- --------------------- ------- -----------------
H Difficulty in -- Liquidity crisis and -- Regular High No change
Solvency and procuring inability to meet ongoing review at Board
liquidity borrowing operational costs and level of
facilities at other commitments detailed cash
competitive -- Danger of breaching flow forecasts
rates and banking covenants -- Lack which are
insufficient of development funding subject to
cash headroom limits our ability sensitivity
to be agile in response analysis --
to changes in the Strong
economic environment and relationships
to future development with financial
opportunities institutions
through regular
engagement --
Monitor our
current
facilities to
ensure
sufficient
headroom to
allow us to
take advantage
of land
opportunities
-- Realising
sales where
capital can be
better deployed
elsewhere
---------------- ---------------- ------------------------------- --------------------- ------- -----------------
I Cyber security -- Financial penalties -- Group has a Medium No change
Cyber and risks such as and sanctions -- fully tested
business data breaches, Reputational damage -- disaster
continuity hacking and Loss of personal and/or recovery system
failure of the business which is tested
Group's IT information -- Outage of annually by a
security IT systems leading to third-party
systems operational disruption -- supplier --
Phishing attacks Deep-dive
and ransom demands -- review by a
Fraud leading to third-party
financial loss security
specialist --
Boundary
firewall at
each location
-- Email
encryption and
two-factor
authentication
in place --
Anti-virus
software
on all devices
-- Ensuring
appropriate
insurance in
place
---------------- ---------------- ------------------------------- --------------------- ------- -----------------
Group statement of comprehensive income
for the six-month period ended 31 March 2021
Six-month Six-month
period period
ended ended Year ended
31 March 31 March 30 September
2021 2020 2020
Continuing operations Note GBPm GBPm GBPm
--------------------------------------------------- ---- --------- --------- -------------
Revenue 6 78.0 59.6 124.0
Cost of sales 7 (74.5) (54.7) (99.2)
Expected credit loss 19 - - (2.8)
--------------------------------------------------- ---- --------- --------- -------------
Gross profit 3.5 4.9 22.0
--------------------------------------------------- ---- --------- --------- -------------
Administrative expenses 7 (4.1) (7.6) (12.6)
Share of (loss) / profit of joint ventures 16 (0.6) 1.8 2.0
Share of (loss) / profit of associate 17 (0.1) 0.1 (0.2)
Revaluation of assets held for sale 20 (1.0) - 2.0
Loss on sale of controlling interest in subsidiary 16 - (2.0) (2.0)
Revaluation of investment property 11 - (0.3) 0.6
--------------------------------------------------- ---- --------- --------- -------------
Operating (loss) / profit (2.3) (3.1) 11.8
--------------------------------------------------- ---- --------- --------- -------------
Finance cost - interest expense 8 (4.8) (4.5) (9.2)
Finance income - interest receivable and
similar income 9 1.3 0.4 1.1
--------------------------------------------------- ---- --------- --------- -------------
(Loss) / profit before tax (5.8) (7.2) 3.7
--------------------------------------------------- ---- --------- --------- -------------
Current tax credit/ (charge) 0.2 0.7 (0.9)
Deferred tax charge - - (0.5)
--------------------------------------------------- ---- --------- --------- -------------
Total (loss) / profit for the period (5.6) (6.5) 2.3
Revaluation of quoted investments 15 (0.1) (0.1) (0.6)
--------------------------------------------------- ---- --------- --------- -------------
Total (loss) / profit and comprehensive (loss)
/ income for the period (5.7) (6.6) 1.7
--------------------------------------------------- ---- --------- --------- -------------
(Loss)/earnings per share for the (loss)/profit
attributable to the
equity holders of the Company during the
period
* basic (2.50)p (3.20)p 0.79p
* diluted (2.46)p (3.12)p 0.77p
--------------------------------------------------- ---- --------- --------- -------------
The accompanying notes form an integral part of this half-year
report.
Group statement of financial position
at 31 March 2021
Six-month
period
ended Year ended
31 March 30 September
2021 2020
Note GBPm GBPm
-------------------------------- ---- --------- -------------
ASSETS
Non-current assets
Investment properties 11 49.5 43.5
Property, plant and equipment 12 5.3 5.6
Right-of-use assets 13 1.1 1.2
Intangible assets 14 0.1 0.2
Investments in quoted companies 15 0.4 0.5
Investment in joint ventures 16 7.7 8.8
Investment in associate 17 1.0 1.1
Other receivables 19 23.7 22.3
-------------------------------- ---- --------- -------------
Total non-current assets 88.8 83.2
-------------------------------- ---- --------- -------------
Current assets
Inventories 18 159.0 173.6
Trade and other receivables 19 73.4 60.9
Assets held for sale 20 11.1 12.5
Amounts due from associate 17 3.2 3.1
Amounts due from joint ventures 16 33.2 42.2
Cash and cash equivalents 21 28.0 15.7
-------------------------------- ---- --------- -------------
Total current assets 307.9 308.0
-------------------------------- ---- --------- -------------
Total assets 396.7 391.2
-------------------------------- ---- --------- -------------
LIABILITIES
Current liabilities
Bank loans and overdrafts 22 (3.9) (41.5)
Other loans 22 (27.0) (25.3)
Trade and other payables 23 (37.3) (32.8)
Deferred income 26 (16.2) (10.0)
Amounts due to joint ventures 16 (6.3) (6.2)
Lease liabilities 24 (0.3) (0.3)
Corporation tax (0.9) (3.1)
Other financial liabilities 25 (11.1) -
-------------------------------- ---- --------- -------------
Total current liabilities (103.0) (119.2)
-------------------------------- ---- --------- -------------
Non-current liabilities
Bank loans 22 (75.2) (43.9)
Other loans 22 (13.3) (13.1)
Deferred income 26 - (2.1)
Lease liabilities 24 (0.8) (0.9)
Other financial liabilities 25 (3.6) (6.8)
Zero Dividend Preference shares 22 (31.2) (30.2)
Deferred tax (1.6) (1.7)
-------------------------------- ---- --------- -------------
Total non-current liabilities (125.7) (98.7)
-------------------------------- ---- --------- -------------
Total liabilities (228.7) (217.9)
-------------------------------- ---- --------- -------------
Net current assets 204.9 188.8
-------------------------------- ---- --------- -------------
Net assets 168.0 173.3
-------------------------------- ---- --------- -------------
EQUITY
Share capital 27 23.0 22.8
Share premium account 27 43.9 43.7
Employee benefit trust 27 (1.1) (1.1)
Special reserve 27 1.1 1.1
Retained earnings 27 101.1 106.8
-------------------------------- ---- --------- -------------
Total equity 168.0 173.3
-------------------------------- ---- --------- -------------
The accompanying notes form an integral part of this half-year
report.
Group statement of changes in equity
for the six-month period ended 31 March 2021
Employee
Share Share Benefit Special Treasury Retained
capital premium Trust reserve reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- --------- --------- --------- --------- --------- ---------- ------
As at 30 September 2019 (audited) 20.7 36.4 (1.1) 1.1 - 105.1 162.2
---------------------------------- --------- --------- --------- --------- --------- ---------- ------
Total loss for the period - - - - - (6.5) (6.5)
Other comprehensive loss - - - - - (0.1) (0.1)
Transactions with owners:
Share-based payments - - - - - 0.4 0.4
---------------------------------- --------- --------- --------- --------- --------- ---------- ------
As at 31 March 2020 (unaudited) 20.7 36.4 (1.1) 1.1 - 98.9 156.0
---------------------------------- --------- --------- --------- --------- --------- ---------- ------
Total profit for the period - - - - - 8.8 8.8
Other comprehensive loss - - - - - (0.5) (0.5)
Transactions with owners:
Share-based payments - - - - - (0.4) (0.4)
Issue of ordinary shares 2.1 7.3 - - - - 9.4
---------------------------------- --------- --------- --------- --------- --------- ---------- ------
As at 30 September 2020 (audited) 22.8 43.7 (1.1) 1.1 - 106.8 173.3
---------------------------------- --------- --------- --------- --------- --------- ---------- ------
Total loss for the period - - - - - (5.6) (5.6)
Other comprehensive loss - - - - - (0.1) (0.1)
Transactions with owners:
Exercise of share options 0.2 0.2 - - - - 0.4
---------------------------------- --------- --------- --------- --------- --------- ---------- ------
As at 31 March 2021 (unaudited) 23.0 43.9 (1.1) 1.1 - 101.1 168.0
---------------------------------- --------- --------- --------- --------- --------- ---------- ------
The accompanying notes form an integral part of this half-year
report.
Group statement of cash flows
for the six-month period ended 31 March 2021
Six-month Six-month
period period
ended ended Year ended
31 March 31 March 30 September
2021 2020 2020
Continuing operations Note GBPm GBPm GBPm
------------------------------------------------------------------ ---- --------- --------- --------------
Cash flow from operating activities
(Loss) / profit for the period / year before
tax (5.8) (7.2) 3.7
Adjustments for:
* depreciation - property, plant and equipment 12 0.4 0.4 1.0
* depreciation - right-of-use assets 13 0.2 - 0.3
* amortisation 14 0.1 - 0.1
* share-based payments - 0.4 -
* revaluation of investment property 11 - 0.3 (0.6)
* revaluation of assets held for sale 20 1.0 - (2.0)
* interest expense 8 4.8 4.5 9.2
* interest receivable and similar income 9 (1.3) (0.4) (1.1)
* loss on sale of controlling interest in subsidiary
undertaking 16 - 2.0 2.0
* share of loss / (profit) of joint ventures 16 0.6 (1.8) (2.0)
* share of loss / (profit) of associate 17 0.1 (0.1) 0.2
Corporation tax payments (1.8) (0.1) -
Changes in working capital:
* decrease / (increase) in inventories 10.6 (9.2) (45.4)
* (increase) / decrease in trade and other receivables (12.6) 0.6 (11.8)
* increase / (decrease) in trade and other payables 3.8 (6.9) 22.1
* increase in deferred income 4.1 - 12.1
* increase / (decrease) in other financial liabilities 7.9 0.8 (4.1)
* decrease in trading balance due to/from joint
ventures - - (0.1)
------------------------------------------------------------------ ---- --------- --------- --------------
Net cash inflow /(outflow) from operating
activities 12.1 (16.7) (16.4)
------------------------------------------------------------------ ---- --------- --------- --------------
Cash flow from investing activities
Interest received - - 0.2
Purchase of property, plant and equipment (0.1) (0.2) (0.3)
Additions to assets held for sale (0.5) - -
Purchase of investment property (2.0) - (1.7)
Proceeds from sale of investment property - - 1.4
Loans provided under management fee contracts - - (3.4)
Loans provided to joint ventures - (11.4) (13.6)
Loans provided to associate (0.1) - -
Amounts repaid by joint ventures 9.6 10.9 9.2
Distribution of profit from joint venture - - 2.4
------------------------------------------------------------------ ---- --------- --------- --------------
Net cash inflow /(outflow) from investing
activities 6.9 (0.7) (5.8)
------------------------------------------------------------------ ---- --------- --------- --------------
Cash flow from financing activities
Interest paid (2.8) (3.5) (5.8)
Proceeds from borrowings and lease liabilities 9.9 39.8 -
Repayment of borrowings (21.0) (14.7) (33.4)
Repayment of lease liabilities (0.2) - (0.3)
New loans 7.0 - 44.7
Proceeds from loan from joint ventures - - 3.1
Proceeds from other financing arrangements - - 6.6
Proceeds from issue of shares - - 9.4
Exercise of share options 0.4 - -
Issue of Zero Dividend Preference shares - 2.7 2.7
------------------------------------------------------------------ ---- --------- --------- --------------
Net cash (outflow) /inflow from financing
activities (6.7) 24.3 27.0
------------------------------------------------------------------ ---- --------- --------- --------------
Net increase in cash and cash equivalents 12.3 6.9 4.8
Net cash and cash equivalents at beginning
of period / year 15.7 10.9 10.9
------------------------------------------------------------------ ---- --------- --------- --------------
Net cash and cash equivalents at end of period
/ year 28.0 17.8 15.7
------------------------------------------------------------------ ---- --------- --------- --------------
The accompanying notes form an integral part of this half-year
report.
Notes to the half-year financial report
for the six-month period ended 31 March 2021
1. Nature of operations and general information
Inland Homes PLC ("Inland Homes", "The Group" or "Company")
registered number 05482990, the ultimate parent company, is a
public limited company incorporated and domiciled in England and
Wales. The Company's shares are quoted on AIM, a market operated by
the London Stock Exchange. The Group's registered office is located
at Burnham Yard, London End, Beaconsfield, HP9 2JH.
The principal activities of Inland Homes are to acquire
brownfield, mixed-use or residential land and to then seek
achievement of planning consent for development. The Group also
develops a number of plots for private sale and constructs
partnership housing for registered providers. These activities are
grouped into the following business segments:
-- Land sales : The Group sells its own land assets to third
parties which have the benefit of planning permission.
-- Asset management fees : The Group engages as an asset manager
to third party landowners to provide land management and planning
services.
-- Contract income : The Group constructs private or affordable
housing projects for a third party landowner.
-- House building : The Group constructs private or affordable
housing units for sale to individuals or private investors.
-- Rental income : The Group leases property assets for rental
income purposes in the short and medium term whilst sites are taken
through the planning process or being developed.
-- Investment properties : The Group holds property assets for
rental income purposes for the long term.
-- Central support : The Group's central support functions supporting all other segments.
At 31 March 2021, the Group, directly or indirectly, held
interests in equity via holdings of ordinary shares of the
following:
Holding and
Company name Principal activity voting rights
------------------------------------------- -------------------------- --------------
Subsidiary undertakings
Appletree Farm Cressing Limited Real estate development 100%
Basildon Developments Limited Real estate development 100%
Basildon United Football, Sports & Leisure
Limited Real estate development 100%
Brooklands Helix Developments Limited Real estate development 100%
Bucks Developments Limited Real estate development 100%
Bulwark Properties Limited Real estate development 100%
Chapel Riverside Developments Limited Real estate development 100%
Dormant Company 06764423 Limited Dormant company 100%
Dormant Company 08631901 Limited Dormant company 100%
Dormant Company 08813334 Limited Dormant company 100%
Dormant Company 08944533 Limited Dormant company 100%
Dormant Company 09437864 Limited Dormant company 100%
Dormant Company 09775087 Limited Dormant company 100%
Dormant Company 10651624 Limited Dormant company 100%
Dormant Company 11694060 Limited Dormant company 100%
Dormant Company 12369803 Limited Dormant company 100%
Dormant Company 12727169 Limited Dormant company 100%
Dormant Company 12812913 Limited Dormant company 100%
Drayton Garden Village Limited Real estate development 100%
High Wycombe Developments No. 2 Limited Real estate development 100%
Letting or operating
Hugg Homes Limited of real estate 100%
Inland (STB) Limited Provision of finance 100%
Inland Commercial Limited Real estate development 100%
Inland Corporate Limited Holding company 100%
Inland Developments Limited Real estate development 100%
Inland Finance Limited Real estate development 100%
Inland Helix Limited Dormant company 100%
Inland Homes (Essex) Limited Real estate development 100%
Inland Homes 2013 Limited Holding company 100%
Inland Homes Developments Limited Real estate development 100%
Inland Lifestyle Limited Real estate development 100%
Inland Limited Real estate development 100%
Inland Partnerships Limited Real estate development 100%
Inland Property Finance Limited Provision of finance 100%
Inland Property Limited Real estate development 100%
Inland Strategic Land Limited Real estate development 100%
Inland ZDP PLC Provision of finance 100%
Dormant limited liability
Merrielands Crescent Dagenham LLP partnership 100%
Poole Investments Limited Real estate development 100%
Rosewood Housing Limited Real estate development 100%
West Drayton Developments Limited Real estate development 100%
Wilton Park Developments Limited Real estate development 100%
Interests in joint ventures
Bucknalls Developments Limited Real estate development 50%
Letting or operating
Centre Square Commercial Limited of real estate 50%
Letting or operating
Centre Square Lifestyle Limited of real estate 50%
Cheshunt Lakeside Developments Limited Real estate development 50%
Delamare Estate (Cheshunt) Limited Real estate development 50%
Europa Park LLP Real estate development 50%
Gardiners Park LLP Real estate development 50%
High Wycombe Developments Limited Real estate development 50%
Interests in associate
Troy Homes Limited Real estate development 25%
------------------------------------------- -------------------------- --------------
Inland Homes 2013 Limited is the only direct subsidiary of the
Company and all other are indirect holdings.
All of the above entities are incorporated and domiciled in
England and Wales, with the registered office of the Company, with
the exception of:
- Europa Park LLP and Gardiners Park LLP which are registered at
Springfield Lodge, Colchester Road, Chelmsford, Essex, CM2 5PW
- Inland Helix Limited which is registered at 2nd Floor, Regis
House, 45 King William Street, London, EC4R 9AN
- Troy Homes Limited which is registered at 5 Technology Park,
Colindeep Land, Colindale, London, NW9 6BX
The joint ventures and associate listed above are accounted for
using the equity method.
There are no restrictions on the ability of the Company or its
subsidiaries to transfer cash or other assets to or from other
entities in the Group.
Additions of subsidiaries
During the six-month period ended 31 March 2021, the Group
acquired the following:
-- Appletree Farm Cressing Limited
-- 50% of the share capital of Dormant Company 09437864 Limited (formerly 10 Ant South Limited)
-- 75% of the share capital of West Drayton Developments Limited
Disposal of subsidiaries
During the six-month period ended 31 March 2021, the Group
incorporated and disposed of Zenith Living (Barking) Limited. No
profit or loss arose on this disposal.
The Group also disposed of Inland Commercial Property Limited.
No profit or loss arose on this disposal.
Investments in joint ventures
The Group holds the following interests in joint ventures:
-- Bucknalls Developments Limited: In December 2015, the Group
entered into a joint venture with two individuals to purchase land,
obtain planning permission and develop the homes in Garston,
Hertfordshire. The development completed in the year ended 30
September 2020 and the entity exists to support the defects period
of the completed development.
-- Centre Square Commercial Limited: In August 2020, High
Wycombe Developments Limited incorporated this subsidiary to hold
commercial property at a site in High Wycombe, Buckinghamshire for
net rental income purposes and long-term capital gain.
-- Centre Square Lifestyle Limited: In November 2019, High
Wycombe Developments Limited incorporated this subsidiary to hold
residential investment property at a site in High Wycombe,
Buckinghamshire for net rental income purposes and long-term
capital gain.
-- Cheshunt Lakeside Developments Limited and Delamare Estate
(Cheshunt) Limited: In April 2018, the Group entered into a joint
venture whose purpose was to obtain planning permission and develop
land at Cheshunt, Hertfordshire. Under the terms of the joint
venture agreement, the Group has an obligation to fund 50% of the
costs of the site and is entitled to receive 50% of the net returns
and a promote return by way of a performance payment.
-- Europa Park LLP: In November 2016, the Group entered into a
joint venture which acquired a site in Ipswich, Suffolk. The
development completed in the six-month period ended 31 March 2021
and the entity exists to support the defects period of the
completed development.
-- Gardiners Park LLP: In November 2016, the Group entered a
joint venture with Constable Homes Limited to develop a site in
Basildon, Essex. The development completed in the six-month period
ended 31 March 2021 and the entity exists to support the defects
period of the completed development.
-- High Wycombe Developments Limited: In December 2019, the
Group entered into a joint venture to develop a site of private
units in High Wycombe, Buckinghamshire. The development is
scheduled to complete during the year ending 30 September 2021.
Investments in associate
The Group holds an interest in Troy Homes Limited. In October
2015, the Group acquired 25% of Troy Homes Limited, a premium
housebuilder, and is entitled to 25% of the net returns.
2. Basis of preparation
Neither the financial information for the six-month period to 31
March 2021 nor the six-month period to 31 March 2020 was subject to
an audit.
The financial information set out in this half-yearly financial
report does not constitute statutory accounts as defined in
Sections 434(3) and 435(3) of the Companies Act 2006. The Group's
statutory financial statements for the year ended 30 September 2020
have been filed with the Registrar of Companies and are available
at www.inlandhomesplc.com . The Auditor's report on those financial
statements was unqualified, did not draw attention to any matters
by way of an emphasis of matter and did not contain any statement
under Section 498 of the Companies Act 2006.
The financial information in these condensed consolidated
financial statements is that of the holding company and all of its
subsidiaries together with the Group's share of its joint ventures
and associate. It has been prepared in accordance with
International Accounting Standard (IAS) 34 Interim Financial
Reporting and should be read in conjunction with the report and
accounts for the year ended 30 September 2020, which have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union and as issued by
the International Accounting Standards Board.
The accounting policies adopted in this financial report are
consistent with those adopted by the Group in the year ended 30
September 2020 and have been consistently applied in the six-month
period to 31 March 2021. Full details of the Group's accounting
policies can be found on pages 84 to 89 of the Group's statutory
financial statements for the year ended 30 September 2020.
Going concern
The Directors are required to assess the Group's ability to
continue as a going concern for a period of at least the next
twelve months.
The Group's going concern assessment considers its principal
risks which were previously set out in the "Principal risks and
uncertainties" section on pages 38 to 41 of its Annual Report for
the year ended 30 September 2020, which was signed on 5 February
2021. The Directors have reassessed these key risks and consider
that they all remain the same with the exception of Risk C "Adverse
Government policy and planning regulation" which the Directors now
consider as a "High" risk due to the recent experiences that Group
has encountered in the six-month period to 31 March 2021 and up to
and including the date of this report.
The Board has reviewed the performance of the Group for the
current reporting period and prepared forecasts for a period
covering twelve months from the date of approval of this half-year
report.
In preparing forecasts the Directors have considered the
prevailing market conditions and current and known future
disruptions brought about by COVID-19, alongside the other risks
and uncertainties, including credit risk and liquidity risk, the
present inflationary economic climate, the current and future
forecast demand for land with planning consent and the current and
expected future housing market conditions in the South and South
East of England where the Group operates.
The Base Case forecast includes all known and anticipated cash
inflows and confirms that the Group has sufficient working capital
for the foreseeable future. The Group currently has forward
residential home sales of GBP39.1m, which includes a large block
sale to a third party scheduled to complete during the second
quarter of the financial year ending 30 September 2022.
Additionally, the Group has a forward partnership housing contract
income order book of GBP139.9m with further construction contracts
totalling GBP41.9m at a very advance stage and expected to be
signed in July 2021. The Group has previously contracted to sell a
parcel of land for GBP14.0m (including infrastructure works)
subject to certain conditions being fulfilled and is on track to
satisfy these conditions as planned. The Group, excluding joint
ventures, currently has annualised residential and commercial
rental income of cGBP1.7m.
The Directors have also assumed the continuation of stringent
cash management procedures and debt reprofiling strategy, which
have been in place since March 2020.
These procedures have seen cash and cash equivalents, including
restricted cash, increase to GBP28.0m at 31 March 2021 (GBP17.8m at
31 March 2020) from GBP15.7m at 30 September 2020.
The Group has done a considerable amount of work in successfully
extending the time profile of its debt facilities and as at 31
March 2021 gross debt due within twelve months as a proportion of
total gross debt was 25.6% (36.0% at 31 March 2020) and compared to
42.6% at 30 September 2020. The undrawn debt facilities at 31 March
2021 were GBP39.2m. The main strategic objective of the Group in
the current financial year remains the reduction of both net debt
and gearing.
At the date of this report, the Group has borrowing facilities
totalling GBP64.6m falling due for repayment within twelve months.
Two loan facilities amounting to GBP10.3m fall due for planned
repayment by 31 December 2021 and three loan facilities amounting
to GBP37.9m are due for planned repayment by 30 April 2022.
GBP13.0m of these three loan facilities is expected to be repaid
from the previously contracted sale of land noted above which will
reduce this to GBP24.9m. The balance of remaining borrowing
facilities falling due for repayment within one year represents
amounts secured on residential unit sales which will be repaid in
full as those residential sales complete.
A revolving credit facility of GBP12.3m expires on 17 December
2021 and the Directors have agreed terms to renew the facility for
a further period of five years from the date of renewal which is
expected to be completed in the short term.
As demonstrated by the positive reprofiling changes made to the
Group's debt, explained above, the Directors hold positive
relationships with funders and have held constructive discussions
with all existing and several other potential lenders. At the date
of this report there is no binding commitment to extend or
refinance these facilities beyond the dates referred to above but
in view of the recent track record, the strength of the
relationships, the availability of security for lenders and the
number of options available, the Directors expect to be able to do
so shortly.
The Directors have performed detailed sensitivity analyses to
test the Group's future liquidity and forecast banking covenant
compliance based on several scenarios.
The Group has forecast planned land sales in the next twelve
months as part of its normal course of business and as part of the
Group's Going Concern review, the Directors have considered the
impact of a delay of three months on each of these sales in
isolation. They have also considered, again in isolation, a price
reduction of 10% on all residential unit sales that are not in the
hands of solicitors. Finally, the Group considered a delay in
residential unit sales by three months. None of these individual
scenarios leads to an issue with either the Group's liquidity or
its debt covenants.
The Directors have also considered the following severe, but
plausible downside scenario:
-- Only residential unit sales that have exchanged or are
currently with solicitors to exchange will complete as forecast and
all residential units that are available for sale are delayed by
three months; and
-- All planned land sales where contracts have not been
exchanged at the date of this report are delayed by six months.
Under this severe, but plausible scenario the Group may have to
consider using capital markets to raise additional debt or equity
to generate additional liquidity for the Group to meet its
obligations as they contractually fall due. The Group has in place
an approved mandate to use capital markets without pre-emption to
issue up to approximately 46 million shares and successfully raised
GBP9.9m, before expenses, in May 2020. Additionally, under this
severe, but plausible scenario, the postponement or deferral of
completions would delay revenue and profit recognition under IFRS
15 'Revenue from Contracts with Customers' and mean that the Group
would require a relaxation of an interest cover covenant from one
of its lenders. Based on those assumptions, the Group would remain
able to meet its debts as they fell due.
The Strategy outlined above details our approach but, the Board
is mindful that no one can forecast exactly how changing
macroeconomic circumstances post pandemic will play out and how
this may affect the Group, industry and the wider economy for the
foreseeable future. In particular, future changes to government
policy relating to the housing market and the planned withdrawal of
the furlough scheme could have implications for the Group as it
would for many other businesses. Such a situation would require the
Board to re-examine the Group's financial position at the time and
if necessary, report any significant adverse changes.
At the time of approving the half-year report and after making
appropriate enquiries, the Directors consider that the Group has
adequate resources to continue in operational existence for the
foreseeable future. The Directors therefore consider it appropriate
to prepare the financial statements on the going concern basis.
3. Changes in accounting policies
The accounting policies adopted in this financial report are
consistent with those adopted by the Group in the year ended 30
September 2020 and have been consistently applied in the six-month
period to 31 March 2021. Full details of the Group's accounting
policies can be found on pages 84 to 89 of the Group's statutory
financial statements for the year ended 30 September 2020.
Standards in issue but not yet effective
The following new standards, amendments and interpretations to
existing standards were in issue at the date of approval of these
financial statements but are not yet effective for the current
accounting year and have not been adopted early. Based on the
Group's current circumstances the Directors do not anticipate that
their adoption in future periods will have a material impact on the
financial statements of the Group, however, the impact of standards
in issue but not yet effective is currently being assessed by the
Group.
-- Amendments to References to the Conceptual Framework in IFRS Standards;
-- IFRS 3 Definition of a Business (Amendments to IFRS 3)
-- IAS 1 and IAS 8 Definition of Material (Amendments to IAS 1 and IAS 8);
-- IFRS 9, IAS 38 and IFRS 7 Interest Rate Benchmark Reform
(Amendments to IFRS 9, IAS 38 and IFRS 7); and
-- IFRS 16 Leases Covid-19 Related Rent Concessions (Amendments to IFRS 16);
-- IAS 1 Classification of Liabilities as Current or Non-current (Amendments to IAS 1);
-- Amendments to IFRS 3 Business Combinations*;
-- Amendments to IAS 16 Property, Plant and Equipment*;
-- Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets*;
-- Annual Improvements (2018-2020 Cycle) IFRS 1, IFRS 9, IAS 41
and Illustrative Examples accompanying IFRS 16*; and
-- IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate
Benchmark Return Reform - Phase 2 (Amendments to IFRS 9, IAS 39,
IFRS 7, IFRS 4 and IFRS 16)*
*Standards and amendments not yet endorsed by the EU.
4. Adoption of new accounting standards
In the six-month period ended 31 March 2021, the Group has not
adopted any new accounting standards. Details of the Group's
accounting policies are found in note 2.
5. Capital management policies and procedures
The Group's objectives when managing capital are:
-- to safeguard its ability to continue as a going concern;
-- to ensure sufficient liquid resources are available to meet
the funding requirement of its projects and to fund new projects
where identified; and
-- to provide returns for shareholders and benefits for other stakeholders.
This is achieved through ensuring sufficient bank and other
facilities are in place; further details are given in notes 21 and
22 to the half-year report. The Group monitors capital on the basis
of the carrying amount of the equity less cash and cash equivalents
as presented on the face of the Group Statement of Financial
Position.
The movement in the capital to overall financing ratio is shown
below. The target capital to overall financing ratio has been set
by the Board at 40% and an outturn metric scoring higher than this
amount is considered to be a good performance against the
target.
Six-month
period
ended Year ended
31 March 30 September
2021 2020
GBPm GBPm
------------------------------------------- --------- -------------
Equity 168.0 173.3
Less: cash and cash equivalents (28.0) (15.7)
------------------------------------------- --------- -------------
Capital 140.0 157.6
------------------------------------------- --------- -------------
Equity 168.0 173.3
Bank loans 79.1 85.4
Other loans 40.3 38.4
Zero Dividend Preference shares 31.2 30.2
Loans from joint ventures 3.1 3.1
Other financial liabilities 7.2 6.8
------------------------------------------- --------- -------------
Borrowings 160.9 163.9
------------------------------------------- --------- -------------
Overall financing (Equity plus Borrowings) 328.9 337.2
------------------------------------------- --------- -------------
Capital to overall financing 42.6% 46.7%
------------------------------------------- --------- -------------
The Group manages the capital structure and makes adjustments in
light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or
adjust the capital structure, the Group may adjust the level of
dividends paid to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debt.
Every quarter the Group must report to the ZDP shareholders that
the covenants attached to the ZDP shares have not been breached.
The most significant covenant is the asset cover which is
calculated as adjusted gross assets: financial indebtedness. This
covenant is monitored on a bi-monthly basis by the Board and has
not been breached at any time. Further details can be found in the
Inland ZDP Prospectus on the Company's website at
www.inlandhomesplc.com .
Other financial liabilities consist of borrowings of GBP7.2m (30
September 2020: GBP6.8m) and GBP7.5m (30 September 2020: GBPnil) of
deferred land creditors. Deferred land creditors are not considered
as part of the Group's capital management policy.
6. Revenue from contracts with customers
The Group has disaggregated revenue into various categories in
the following tables which is intended to:
-- Depict how the nature, amount, timing and uncertainty of
revenue and cash flows are affected by economic date; and
-- Enable users to understand the relationship with revenue
segment information provided in note 7.
Land Management Contract House
sales fees income building Total
Six-month period ended 31 March 2021 GBPm GBPm GBPm GBPm GBPm
------------------------------------- ------ ---------- -------- --------- -----
Point in time 0.6 8.3 - 39.0 47.9
Over time - 0.6 28.5 - 29.1
------------------------------------- ------ ---------- -------- --------- -----
Total 0.6 8.9 28.5 39.0 77.0
------------------------------------- ------ ---------- -------- --------- -----
Land Management Contract House
sales fees income building Total
Six-month period ended 31 March 2020 GBPm GBPm GBPm GBPm GBPm
------------------------------------- ------ ---------- -------- --------- -----
Point in time - 9.4 - 13.8 23.2
Over time - - 35.3 - 35.3
------------------------------------- ------ ---------- -------- --------- -----
Total - 9.4 35.3 13.8 58.5
------------------------------------- ------ ---------- -------- --------- -----
Land Management Contract House
sales fees income building Total
Year ended 30 September 2020 GBPm GBPm GBPm GBPm GBPm
----------------------------- ------ ---------- -------- --------- -----
Point in time 21.7 21.4 - 23.8 66.9
Over time - 3.0 51.8 - 54.8
----------------------------- ------ ---------- -------- --------- -----
Total 21.7 24.4 51.8 23.8 121.7
----------------------------- ------ ---------- -------- --------- -----
All revenue is earned in the United Kingdom.
Included within 'Land sales' are land sales to housing
associations which include construction works to 'Golden Brick'.
Subsequent construction works to completion are included within
'Contract income'.
Included within 'House building' are the sales of reversionary
freehold reversions and customers' extras that arise as a
by-product of house building activity.
Rental income and investment properties income is not disclosed
in the table above as these revenue sources do not fall under the
IFRS 15 accounting standard.
7. Segmental information
In accordance with IFRS 8 'Operating Segments', information is
disclosed to enable users of financial statements to evaluate the
nature and financial effects of the business activities in which
the Group engages and provide the appropriate analysis of the
disaggregation of revenues by IFRS 15 'Revenue from Contracts with
Customers'.
In identifying its operating segments, management differentiates
between land sales, asset management fees, contract income, house
building, rental income, investment properties and central support.
These segments are based on the information reported to the Chief
Executive Officer and represent the activities which generate
significant revenues, profits and use of resources within the
Group. These operating segments are monitored and strategic
decisions are made on the basis of segment operating results.
Segmental analysis by activity
Asset
Land management Contract House Rental Investment Central
Six-month period ended 31 sales fees income building income properties support Total
March 2021 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Revenue from contracts with
customers 0.6 8.9 28.5 39.0 - - - 77.0
Other revenue - - - - 0.4 0.6 - 1.0
Cost of sales (1.1) (7.0) (28.5) (37.5) (0.3) (0.1) - (74.5)
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Gross profit / (loss) (0.5) 1.9 - 1.5 0.1 0.5 - 3.5
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Administrative expenses (0.5) (0.1) (0.3) (0.8) (0.1) - (2.3) (4.1)
Share of loss of joint ventures - - - (0.6) - - - (0.6)
Share of loss of associate - - - (0.1) - - - (0.1)
Revaluation of assets held
for sale - - - (1.0) - - - (1.0)
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Operating (loss) / profit (1.0) 1.8 (0.3) (1.0) - 0.5 (2.3) (2.3)
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Finance cost - interest expense (2.1) - - (1.1) - (0.3) (1.3) (4.8)
Finance income - interest
receivable and similar income 1.0 - - 0.1 - - 0.2 1.3
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
(Loss) / profit before tax (2.1) 1.8 (0.3) (2.0) - 0.2 (3.4) (5.8)
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Net tax charge - 0.2 - - - - - 0.2
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Total (loss) / profit for
the period (2.1) 2.0 (0.3) (2.0) - 0.2 (3.4) (5.6)
Revaluation of quoted investments - - - - - - (0.1) (0.1)
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Total (loss) / profit and
comprehensive (loss) / income
for the period (2.1) 2.0 (0.3) (2.0) - 0.2 (3.5) (5.7)
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Asset
Land management Contract House Rental Investment Central
Six-month period ended 31 sales fees income building income properties support Total
March 2020 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Revenue from contracts with
customers - 9.4 35.3 13.8 - - - 58.5
Other revenue - - - - 0.5 0.6 - 1.1
Cost of sales (2.0) (2.6) (37.0) (12.9) - (0.2) - (54.7)
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Gross profit / (loss) (2.0) 6.8 (1.7) 0.9 0.5 0.4 - 4.9
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Administrative expenses - - - - - - (7.6) (7.6)
Share of profit of joint ventures - - - 1.8 - - - 1.8
Share of profit of associate - - - 0.1 - - - 0.1
Loss on sale of controlling
interest
in subsidiary - - - (2.0) - - - (2.0)
Revaluation of investment
property - - - - - (0.3) - (0.3)
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Operating (loss) / profit (2.0) 6.8 (1.7) 0.8 0.5 0.1 (7.6) (3.1)
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Finance cost - interest expense (0.8) - - (2.0) - (1.3) (0.4) (4.5)
Finance income - interest
receivable and similar income 0.4 - - - - - - 0.4
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
(Loss) / profit before tax (2.4) 6.8 (1.7) (1.2) 0.5 (1.2) (8.0) (7.2)
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Net tax charge 0.2 (0.5) 0.1 0.1 - 0.1 0.7 0.7
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Total (loss) / profit for
the period (2.2) 6.3 (1.6) (1.1) 0.5 (1.1) (7.3) (6.5)
Revaluation of quoted investments - - - - - - (0.1) (0.1)
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Total (loss) / profit and
comprehensive (loss) / income
for the period (2.2) 6.3 (1.6) (1.1) 0.5 (1.1) (7.4) (6.6)
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Asset
Land management Contract House Rental Investment Central
sales fees income building income properties support Total
Year ended 30 September 2020 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Revenue from contracts with
customers 21.7 24.4 51.8 23.8 - - - 121.7
Other revenue - - - - 1.4 0.9 - 2.3
Cost of sales (19.7) (3.0) (52.9) (22.7) (0.4) (0.5) - (99.2)
Expected credit loss (2.8) - - - - - - (2.8)
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Gross profit / (loss) (0.8) 21.4 (1.1) 1.1 1.0 0.4 - 22.0
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Administrative expenses - - - - - - (12.6) (12.6)
Share of profit of joint ventures - - - 2.0 - - - 2.0
Share of loss of associate - - - (0.2) - - - (0.2)
Revaluation of assets held
for sale - - - - - 2.0 - 2.0
Loss on sale of controlling
interest
in subsidiary - - - (2.0) - - - (2.0)
Revaluation of investment
property - - - - - 0.6 - 0.6
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Operating profit / (loss) (0.8) 21.4 (1.1) 0.9 1.0 3.0 (12.6) 11.8
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Finance cost - interest expense (4.5) (0.3) (0.1) (2.0) - (0.5) (1.8) (9.2)
Finance income - interest
receivable and similar income 0.8 0.1 - 0.2 - - - 1.1
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Profit / (loss) before tax (4.5) 21.2 (1.2) (0.9) 1.0 2.5 (14.4) 3.7
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Net tax charge 0.1 (0.8) - (0.6) (0.1) (0.1) 0.1 (1.4)
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Total profit / (loss) for
the period (4.4) 20.4 (1.2) (1.5) 0.9 2.4 (14.3) 2.3
Other comprehensive income - - - - - - (0.6) (0.6)
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Total profit / (loss) and
comprehensive income / (loss)
for the period (4.4) 20.4 (1.2) (1.5) 0.9 2.4 (14.9) 1.7
---------------------------------- ------ ----------- -------- --------- ------- ----------- -------- ------
Asset
Land management Contract House Rental Investment Central
sales fees income building income properties support Total
As at 31 March 2021 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
ASSETS
Non-current assets
Investment properties - - - - - 49.5 - 49.5
Property, plant and equipment - - - - 4.5 - 0.8 5.3
Right-of-use assets - - - - - - 1.1 1.1
Intangible assets - - - - 0.1 - - 0.1
Investments in quoted companies - - - - - - 0.4 0.4
Investment in joint ventures - - - 7.7 - - - 7.7
Investment in associate - - - 1.0 - - - 1.0
Other receivables - - 2.2 21.5 - - - 23.7
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Total non-current assets - - 2.2 30.2 4.6 49.5 2.3 88.8
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Current assets
Inventories 29.2 - 3.7 126.0 0.1 - - 159.0
Trade and other receivables 7.3 53.5 11.6 0.2 - - 0.8 73.4
Assets held for sale - - - - - 11.1 - 11.1
Amounts due from associate - - - 3.2 - - - 3.2
Amounts due from joint ventures - - - 33.2 - - - 33.2
Cash and cash equivalents - - - - - - 28.0 28.0
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Total current assets 36.5 53.5 15.3 162.6 0.1 11.1 28.8 307.9
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Total assets 36.5 53.5 17.5 192.8 4.7 60.6 31.1 396.7
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
LIABILITIES
Current liabilities
Bank loans and overdrafts (3.6) - - - (0.3) - (3.9)
Other loans (22.7) - - (4.3) - - - (27.0)
Trade and other payables (3.3) - (18.2) (13.2) (0.1) (1.1) (1.4) (37.3)
Deferred income - - (16.2) - - - - (16.2)
Amounts owed to joint ventures - - - (6.3) - - - (6.3)
Lease liabilities - - - - - - (0.3) (0.3)
Corporation tax (0.1) (0.6) - - (0.1) (0.1) - (0.9)
Other financial liabilities (11.1) - - - - - - (11.1)
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Total current liabilities (40.8) (0.6) (34.4) (23.8) (0.5) (1.2) (1.7) (103.0)
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Non-current liabilities
Bank loans (14.3) - - (31.4) (2.8) (26.7) - (75.2)
Other loans - - - (13.3) - - - (13.3)
Lease liabilities - - - - - - (0.8) (0.8)
Other financial liabilities (3.6) - - - - - - (3.6)
Zero Dividend Preference shares - - - (31.2) - - - (31.2)
Deferred tax - - - - - (2.3) 0.7 (1.6)
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Total non-current liabilities (17.9) - - (75.9) (2.8) (29.0) (0.1) (125.7)
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Total liabilities (58.7) (0.6) (34.4) (99.7) (3.3) (30.2) (1.8) (228.7)
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Net assets (22.2) 52.9 (16.9) 93.1 1.4 30.4 29.3 168.0
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Asset
Land management Contract House Rental Investment Central
sales fees income building income properties support Total
As at 30 September 2020 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
ASSETS
Non-current assets
Investment properties - - - - - 43.5 - 43.5
Property, plant and equipment - - - - 4.7 - 0.9 5.6
Right-of-use assets - - - - - - 1.2 1.2
Intangible assets - - - - 0.2 - - 0.2
Investments in quoted companies - - - - - - 0.5 0.5
Investment in joint ventures - - - 8.8 - - - 8.8
Amounts due from joint ventures - - - - - - - -
Investment in associate - - - 1.1 - - - 1.1
Other receivables - - 1.6 20.7 - - - 22.3
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Total non-current assets - - 1.6 30.6 4.9 43.5 2.6 83.2
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Current assets
Inventories 72.1 4.0 - 97.5 - - - 173.6
Trade and other receivables 15.8 36.8 8.0 - - - 0.3 60.9
Assets held for sale - - - - - 12.5 - 12.5
Amounts due from associate - - - 3.1 - - - 3.1
Amounts due from joint ventures - - - 42.2 - - - 42.2
Cash and cash equivalents - - - - - - 15.7 15.7
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Total current assets 87.9 40.8 8.0 142.8 - 12.5 16.0 308.0
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Total assets 87.9 40.8 9.6 173.4 4.9 56.0 18.6 391.2
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
LIABILITIES
Current liabilities
Bank loans and overdrafts (14.2) - - - (0.3) (27.0) - (41.5)
Other loans (25.3) - - - - - - (25.3)
Trade and other payables (15.8) - (11.4) (4.2) (0.1) (1.3) - (32.8)
Deferred income - - (10.0) - - - - (10.0)
Amounts owed to joint ventures - - - (6.2) - - - (6.2)
Lease liabilities - - - - - - (0.3) (0.3)
Corporation tax - - - - - - (3.1) (3.1)
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Total current liabilities (55.3) - (21.4) (10.4) (0.4) (28.3) (3.4) (119.2)
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Non-current liabilities
Bank loans - - - (42.4) (0.3) (1.2) - (43.9)
Other loans - - - (13.1) - - - (13.1)
Deferred income - - - (2.1) - - - (2.1)
Lease liabilities - - - - - - (0.9) (0.9)
Other financial liabilities (6.8) - - - - - - (6.8)
Zero Dividend Preference shares - - - (30.2) - - - (30.2)
Deferred tax - - - - - (2.4) 0.7 (1.7)
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Total non-current liabilities (6.8) - - (87.8) (0.3) (3.6) (0.2) (98.7)
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Total liabilities (62.1) - (21.4) (98.2) (0.7) (31.9) (3.6) (217.9)
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
Net assets 25.8 40.8 (11.8) 75.2 4.2 24.1 15.0 173.3
-------------------------------- ------ ----------- -------- --------- -------- ----------- -------- -------
8. Finance costs
Six-month Six-month
period period
ended ended Year ended
31 March 31 March 30 September
2021 2020 2020
GBPm GBPm GBPm
------------------------------------------------- --------- --------- -------------
Interest expense:
bank loan borrowings 2.0 2.0 4.1
other loan borrowings 1.2 1.0 2.1
amortisation of loan arrangement and other fees 0.7 1.1 2.3
Zero Dividend Preference shares 0.9 0.8 1.5
------------------------------------------------- --------- --------- -------------
Gross finance costs 4.8 4.9 10.0
Finance costs capitalised - (0.4) (0.8)
------------------------------------------------- --------- --------- -------------
Finance costs 4.8 4.5 9.2
------------------------------------------------- --------- --------- -------------
No finance costs (six-month period ended 31 March 2020: GBP0.4m;
year ended 30 September 2020: GBP0.8m) have been capitalised on
inventories in the six-month period in accordance with IAS 23
Borrowing Costs (see note 18), using the Group's cost of borrowing
for that loan specific to the development in question.
In the six-month period ended 31 March 2021, the average
capitalisation interest rate for interest expense in the cost of
inventories was 0% (six-month period ended 31 March 2020: 5.25%;
year ended 30 September 2020: 5.25%).
9. Finance income
Six-month Six-month
period period
ended ended Year ended
31 March 31 March 30 September
2021 2020 2020
GBPm GBPm GBPm
---------------------------------------------------- --------- --------- -------------
Interest from loans to joint ventures and associate 0.1 0.1 0.2
Other interest receivable 0.2 - 0.1
Notional interest income 1.0 0.3 0.8
---------------------------------------------------- --------- --------- -------------
Finance income 1.3 0.4 1.1
---------------------------------------------------- --------- --------- -------------
10. Earnings per share
Number of shares
Both the basic and diluted earnings per share have been
calculated using the profit attributable to shareholders of the
parent company, i.e. no adjustments to profit were necessary in
2021 nor 2020.
The reconciliation of the weighted average number of shares for
the purposes of diluted earnings per share to the weighted average
number of ordinary shares used in the calculation of basic earnings
per share is as follows:
Earnings per share Weighted
average
Six-month Six-month
period period
ended ended Year ended
31 March 31 March 30 September
2021 '000 2020 '000 2020 '000
---------------------------- ---------- ---------- -------------
For use in basic measures 227,925 205,944 214,361
Dilutive effect of:
share options 274 1,490 1,323
deferred bonus shares 1,694 1,694 1,694
growth shares 2,285 2,285 2,285
---------------------------- ---------- ---------- -------------
For use in diluted measures 232,178 211,413 219,663
---------------------------- ---------- ---------- -------------
Basic and diluted EPS
Six-month Six-month
period period
ended ended Year ended
31 March 31 March 30 September
2021 2020 2020
'000 '000 '000
---------------------------------------------------- --------- --------- -------------
(Loss) / profit attributable to equity shareholders
(GBPm) (5.7) (6.6) 1.7
---------------------------------------------------- --------- --------- -------------
(Loss) / earnings per share (2.50p) (3.20p) 0.79p
---------------------------------------------------- --------- --------- -------------
Diluted (loss) / earnings per share (2.46p) (3.12p) 0.77p
---------------------------------------------------- --------- --------- -------------
11. Investment properties
Residential Development Assets
properties land under construction Total
GBPm GBPm GBPm GBPm
-------------------------- ----------- ----------- ------------------- -----
Fair value
At 1 October 2020 35.0 8.5 - 43.5
Additions 0.1 - 1.9 2.0
Transfer from inventories 4.0 - - 4.0
-------------------------- ----------- ----------- ------------------- -----
At 31 March 2021 39.1 8.5 1.9 49.5
-------------------------- ----------- ----------- ------------------- -----
The investment properties were valued by the Directors using the
following valuation techniques:
Residential properties
The Group's residential investment properties were valued by the
Directors on the basis of 'open market value'. In arriving at their
view of open market value the Directors had regard to the
following; the accommodation offered, the square footage and the
condition of each property. They then considered the above in light
of the local market and prices achieved in recent transactions in
consultation with a local property agent.
Development land
The Group's development land is carried at fair value which has
been established by the Directors using an internal appraisal model
based on the 'residual method'. The inputs for this model are the
market value of units to be constructed in accordance with the
planning permission, the costs of any housebuilding,
infrastructure, local authority fees and professional fees. The
market value of the units has been assessed at each balance sheet
date based on the values achieved by the Group on earlier phases of
the same development for similar property types, adjusted for the
changes in current market conditions and progress of the current
phase of the development. Housebuilding and infrastructure costs
have been forecast using costs incurred by the Group on this or
other similar developments with an allowance for cost increases.
Local authority fees were agreed at the time of the signing of the
planning permission and are therefore known costs. Professional
fees are input using costs incurred on similar projects and finance
holding costs are the Group's cost of debt capital. The Directors
are of the opinion that developing the site reflects the highest
and best use of this asset.
12. Property, plant and equipment
Modular Office Fixtures Motor
housing equipment and fittings vehicles Total
GBPm GBPm GBPm GBPm GBPm
--------------------- -------- ---------- ------------- --------- -----
Cost
At 1 October 2020 5.5 1.1 0.5 0.1 7.2
Additions - - 0.1 - 0.1
Disposals - (0.1) - - (0.1)
--------------------- -------- ---------- ------------- --------- -----
At 31 March 2021 5.5 1.0 0.6 0.1 7.2
--------------------- -------- ---------- ------------- --------- -----
Depreciation
At 1 October 2020 0.8 0.4 0.3 0.1 1.6
Depreciation charge 0.2 0.1 0.1 - 0.4
Disposals - (0.1) - - (0.1)
--------------------- -------- ---------- ------------- --------- -----
At 31 March 2021 1.0 0.4 0.4 0.1 1.9
--------------------- -------- ---------- ------------- --------- -----
Net book value
--------------------- -------- ---------- ------------- --------- -----
At 31 March 2021 4.5 0.6 0.2 - 5.3
--------------------- -------- ---------- ------------- --------- -----
At 30 September 2020 4.7 0.7 0.2 - 5.6
--------------------- -------- ---------- ------------- --------- -----
13. Right-of-use assets
On adoption of IFRS 16 on 1 October 2019, the Group recognised a
right-of use asset. This has been presented in the Group Statement
of Financial Position as follows:
Leasehold
property
GBPm
--------------------- ---------
Cost
At 1 October 2020 1.6
Additions 0.1
--------------------- ---------
At 31 March 2021 1.7
--------------------- ---------
Depreciation
At 1 October 2020 0.4
Depreciation charge 0.2
--------------------- ---------
At 31 March 2021 0.6
--------------------- ---------
Net book value
--------------------- ---------
At 31 March 2021 1.1
--------------------- ---------
At 30 September 2020 1.2
--------------------- ---------
The right-of-use assets relate to the Group's occupation of
Burnham Yard, Beaconsfield as a Head Office facility, and a
car.
14. Intangible assets
Development
costs
GBPm
------------------------------------ -----------
Cost
At 1 October 2020 and 31 March 2021 0.3
------------------------------------ -----------
Amortisation
At 1 October 2020 0.1
Charge for the period 0.1
------------------------------------ -----------
At 31 March 2021 0.2
------------------------------------ -----------
Net book value
------------------------------------ -----------
At 31 March 2021 0.1
------------------------------------ -----------
At 30 September 2020 0.2
------------------------------------ -----------
15. Investments in quoted companies
Quoted
investments
GBPm
------------------------ ------------
Cost and carrying value
At 1 October 2020 0.5
Revaluation (0.1)
------------------------ ------------
At 31 March 2021 0.4
------------------------ ------------
Investments of quoted securities is measured at fair value
through other comprehensive income. The fair value is based on
published market prices.
16. Investment in joint ventures
Cheshunt
Bucknalls Lakeside Europa Gardiners High Wycombe
Developments Developments Park Park Developments Total
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------- ------------- ------------- ------ ----------- ------------- ------
Cost
At October 2020 2.3 6.3 0.2 - - 8.8
Share of (loss)/profit after
tax 0.1 (1.0) - - - (0.9)
Receipts from joint ventures - - (0.2) - - (0.2)
----------------------------- ------------- ------------- ------ ----------- ------------- ------
Movement during the period 0.1 (1.0) (0.2) - - (1.1)
----------------------------- ------------- ------------- ------ ----------- ------------- ------
At 31 March 2021 2.4 5.3 - - - 7.7
----------------------------- ------------- ------------- ------ ----------- ------------- ------
Amounts due from/(to) joint ventures
As at 30
As at 31 September
March 2021 2020
GBPm GBPm
------------------------------- ---------------------------------- ----------- ----------
Amounts owed by joint ventures, due within one year
Cheshunt Lakeside Developments
Limited held at carrying value 30.3 28.6
High Wycombe Developments
Limited held at carrying value 2.8 13.6
Europa Park LLP held at carrying value 0.1 -
------------------------------- ---------------------------------- ----------- ----------
Amounts due from joint ventures 33.2 42.2
Amounts owed to joint ventures, due in within one year
Bucknalls Developments
Limited held at carrying value (6.3) (6.2)
held at fair value through profit
and loss - -
------------------------------- ---------------------------------- ----------- ----------
Amounts owed to joint ventures (6.3) (6.2)
------------------------------------------------------------------- ----------- ----------
Amounts due from/(to) joint
ventures 26.9 36.0
------------------------------------------------------------------- ----------- ----------
17. Investment in associate
In October 2015, the Group acquired 25% of Troy Homes Limited
(Troy Homes), a premium housebuilder, and is entitled to 25% of the
net returns.
At 31 March 2021, the Company continued to hold equity in its
associate. A summary of the investment in the associate is as
follows:
Total
GBPm
------------------------ -----
Cost
At 1 October 2020 1.1
Share of loss after tax (0.1)
------------------------ -----
At 31 March 2021 1.0
------------------------ -----
Amounts due from associate
As at 31 As at
March 30 September
2021 2020
GBPm GBPm
--------------------------------- -------- -------------
Current
Loans 3.2 3.1
--------------------------------- -------- -------------
Total amounts due from associate 3.2 3.1
--------------------------------- -------- -------------
The above loans are repayable on demand. Interest is charged on
the loan amounts.
18. Inventories
Six-month
period
ended Year ended
31 March 30 September
2021 2020
GBPm GBPm
------------------------------------------------------------------- --------- -------------
At 1 October 2020/1 October 2019 173.6 192.4
Additions 67.4 111.7
Disposal on sale of controlling interest in subsidiary undertaking - (36.2)
Capitalisation of finance costs - 0.8
Capitalisation of employee costs 3.0 5.7
Charged to income statement (80.5) (99.6)
Transferred (to)/from investment property (4.0) 0.9
Impairment (0.5) (2.1)
------------------------------------------------------------------- --------- -------------
At 31 March 2021/30 September 2020 159.0 173.6
------------------------------------------------------------------- --------- -------------
19. Trade and other receivables
As at As at
31 March 30 September
2021 2020
GBPm GBPm
------------------------------------------------------- --------- -------------
Trade receivables from contract revenue with customers 31.8 18.9
Prepayments and accrued income 27.2 30.8
Other receivables 14.3 11.2
------------------------------------------------------- --------- -------------
Trade and other receivables due in less than one year 73.3 60.9
Other receivables due in more than one year 23.7 22.3
------------------------------------------------------- --------- -------------
Total trade and other receivables 97.0 83.2
------------------------------------------------------- --------- -------------
Materially, all of the trade receivables are receivables from
contract revenue with customers.
The carrying value of trade and other receivables classified at
amortised cost is considered a reasonable approximation of fair
value.
Within prepayments and accrued income is GBP2.8m (30 September
2020: GBP2.1m) relating to income accrued on a construction
contract.
Included within other receivables due in greater than one year
is GBP21.5m (30 September 2020: GBP20.7m) in relation to the sale
of the Group's beneficial interest of 50% in Cheshunt Lakeside
Developments Limited.
Included in prepayments and accrued income due in less than one
year is GBP10.6m treated as short term as it represents the normal
operating cycle of business but is not expected to be retained
until greater than one year.
The Group does not hold any collateral as security.
The Group applies the simplified approach to providing for
expected credit losses prescribed by IFRS 9 for trade receivables.
The Group applies the general approach to providing for expected
credit losses prescribed by IFRS 9 for other receivables. The
expected credit loss provision in the current year and prior period
are immaterial. The incurred loss provision in the current period
was GBPnil (30 September 2020: GBP2.8m).
Other receivables
As at As at
31 March 30 September
2021 2020
GBPm GBPm
--------------------------------------------------- --------- -------------
Due in less than one year
Loan facilities 11.4 7.9
Other 2.9 3.3
--------------------------------------------------- --------- -------------
Total other receivables, due in less than one year 14.3 11.2
--------------------------------------------------- --------- -------------
Due in more than one year
Sale of interest in joint venture 21.5 20.7
Other 2.2 1.6
--------------------------------------------------- --------- -------------
Total other receivables, due in more than one year 23.7 22.3
--------------------------------------------------- --------- -------------
Within other receivables due in more than one year is GBP2.2m
(30 September 2020: GBP1.6m) relating to retentions receivable from
construction contracting clients.
Loan facilities include amounts as follows.
As at As at
31 March 30 September
2021 2020
GBPm GBPm Repayment status Interest status
-------------------------------- --------- ------------- ---------------- ---------------
Repayable on Non-interest
Hillingdon Properties Limited 4.2 4.1 demand bearing
Repayable on Interest rate
Inland (Southern) Limited 6.4 2.8 demand of 4%
Repayable on Non-interest
Gallions Developments Limited 0.5 0.7 demand bearing
Repayable on Interest rate
Brook Street Properties Limited 0.3 0.3 demand of 4%
-------------------------------- --------- ------------- ---------------- ---------------
Total loan facilities 11.4 7.9
-------------------------------- --------- ------------- ---------------- ---------------
20. Assets held for sale
The assets held for sale relate to surplus existing investment
properties at Wilton Park which will not be developed and one
commercial property. The assets were transferred based on a
Directors' valuation as shown in the table below. Management expect
disposal of these assets to occur within 12 months of the balance
sheet date.
Six-month
period
ended Year ended
31 March 30 September
2021 2020
GBPm GBPm
------------------------------------------- --------- -------------
At 1 October 2020/1 October 2019 12.5 4.7
Transfer from investment properties - 5.8
Additions 0.5 -
Disposal on sale of subsidiary undertaking (0.9) -
Fair value adjustment (1.0) 2.0
------------------------------------------- --------- -------------
At 31 March 2021/30 September 2020 11.1 12.5
------------------------------------------- --------- -------------
21. Cash and cash equivalents
As at As at
31 March 30 September
2021 2020
GBPm GBPm
------------- --------- -------------
Cash at bank 28.0 15.7
------------- --------- -------------
Included in cash at bank is a restricted amount of GBP13.8m (30
September 2020: GBP4.7m) held in a bank account over which the
Homes and Communities Agency has a charge as part of their security
for a development loan advanced to the Group. On 29 April 2021, the
loan facility was repaid. See note 29.
22. Borrowings
1 to 2 to 3 to 4 to
< 1 year 2 years 3 years 4 years 5 years > 5 years Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- -------- -------- -------- -------- -------- --------- ------
At 31 March 2021
Secured bank loans 3.9 71.8 - - - 3.4 79.1
Secured other loans 27.0 - 13.3 - - - 40.3
-------------------------------- -------- -------- -------- -------- -------- --------- ------
Borrowings 30.9 71.8 13.3 - - 3.4 119.4
Zero Dividend Preference shares - - - 31.2 - - 31.2
Loans from joint ventures 3.1 - - - - - 3.1
Other financing arrangements 7.2 - - - - - 7.2
-------------------------------- -------- -------- -------- -------- -------- --------- ------
Gross debt 41.2 71.8 13.3 31.2 - 3.4 160.9
-------------------------------- -------- -------- -------- -------- -------- --------- ------
Cash and cash equivalents (28.0) - - - - - (28.0)
-------------------------------- -------- -------- -------- -------- -------- --------- ------
Net debt 13.2 71.8 13.3 31.2 - 3.4 132.9
-------------------------------- -------- -------- -------- -------- -------- --------- ------
At 30 September 2020
Secured bank loans 41.5 0.8 42.4 - - 0.7 85.4
Secured other loans 25.3 - - 13.1 - - 38.4
-------------------------------- -------- -------- -------- -------- -------- --------- ------
Borrowings 66.8 0.8 42.4 13.1 - 0.7 123.8
Zero Dividend Preference shares - - - 30.2 - - 30.2
Loans from joint ventures 3.1 - - - - - 3.1
Other financing arrangements - 6.8 - - - - 6.8
-------------------------------- -------- -------- -------- -------- -------- --------- ------
Gross debt 69.9 7.6 42.4 43.3 - 0.7 163.9
-------------------------------- -------- -------- -------- -------- -------- --------- ------
Cash and cash equivalents (15.7) - - - - - (15.7)
-------------------------------- -------- -------- -------- -------- -------- --------- ------
Net debt 54.2 7.6 42.4 43.3 - 0.7 148.2
-------------------------------- -------- -------- -------- -------- -------- --------- ------
At 31 March 2021
Bank loans - 33.1 - - - - 33.1
Other loans 3.0 - 3.1 - - - 6.1
-------------------------------- -------- -------- -------- -------- -------- --------- ------
Undrawn facilities 3.0 33.1 3.1 - - - 39.2
-------------------------------- -------- -------- -------- -------- -------- --------- ------
Zero Dividend Preference shares - - - - - - -
-------------------------------- -------- -------- -------- -------- -------- --------- ------
Undrawn debt - - - - - - 39.2
-------------------------------- -------- -------- -------- -------- -------- --------- ------
At 30 September 2020
Bank loans - - 22.6 - - - 22.6
Other loans 20.0 - - 3.2 - - 23.2
-------------------------------- -------- -------- -------- -------- -------- --------- ------
Undrawn facilities 20.0 - 22.6 3.2 - - 45.8
-------------------------------- -------- -------- -------- -------- -------- --------- ------
Zero Dividend Preference shares - - - - - - -
-------------------------------- -------- -------- -------- -------- -------- --------- ------
Undrawn debt 20.0 - 22.6 3.2 - - 45.8
-------------------------------- -------- -------- -------- -------- -------- --------- ------
At 31 March 2021, the bank loans were secured over GBP49.8m (30
September 2020: GBP34.9m) of investment property and assets held
for sale and GBP77.6m (30 September 2020: GBP105.5m) of
inventories. The other loans were secured over GBP8.5m (30
September 2020: GBP8.5m) of investment property, GBPnil (30
September 2020: GBP4.7m) property, plant and equipment and GBP36.3m
(30 September 2020 GBP35.9m) of inventories. The Zero Dividend
Preference shares were secured against loans to joint ventures and
associate of GBP33.3m (30 September 2020: GBP32.9m) and GBP13.0m
(30 September 2020: GBP7.7m) of unrestricted cash.
Zero Dividend Preference shares
The Zero Dividend Preference shares carry no entitlement to any
dividends or other distributions or to participate in the revenue
or any other profits of the Company. The Zero Dividend Preference
shareholders have no right to receive notice of, or to attend or
vote at, any general meeting of the Company except in those
circumstances set out in the Inland Zero Dividend Preference plc's
Articles of Association, which would be likely to affect their
rights or general interests. At 31 March 2021, there were
18,101,857 Zero Dividend Preference shares in issue (30 September
2020: 18,101,857). In August 2018, the Zero Dividend Preference
shareholders agreed to rollover and extend the facility and will
now be repaid on or before 10 April 2024. This was accounted for as
a substantial modification due to the significant extension to the
term of the debt, the change to the covenants and the substantial
change in interest rate. This resulted in no gain or loss being
recognised in the Income Statement.
IFRS 7 'Financial liabilities: Disclosure', requires disclosure
of the maturity of the Group's remaining contractual financial
liabilities. The table below shows the contractual undiscounted
cash outflows arising from the Group's gross debt which is split
between fixed rate and variable rate borrowings.
1 to 2 to 3 to 4 to
< 1 year 2 years 3 years 4 years 5 years > 5 years Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- -------- -------- -------- -------- -------- --------- ------
At 31 March 2021
Variable rate borrowings 15.1 71.6 13.3 31.2 - - 131.2
Fixed rate borrowings 26.1 0.2 - - - 3.4 29.7
------------------------- -------- -------- -------- -------- -------- --------- ------
Gross debt 41.2 71.8 13.3 31.2 - 3.4 160.9
Interest on gross debt 7.3 - 3.0 1.0 0.1 0.2 14.8
------------------------- -------- -------- -------- -------- -------- --------- ------
Gross loan commitments 48.5 75.0 16.3 32.2 0.1 3.6 175.7
------------------------- -------- -------- -------- -------- -------- --------- ------
At 30 September 2020
Variable rate borrowings 41.2 7.3 - 43.3 - - 91.8
Fixed rate borrowings 28.7 0.3 42.4 - - 0.7 72.1
------------------------- -------- -------- -------- -------- -------- --------- ------
Gross debt 69.9 7.6 42.4 43.3 - 0.7 163.9
Interest on gross debt 3.3 2.6 1.5 1.4 0.6 0.1 9.5
------------------------- -------- -------- -------- -------- -------- --------- ------
Gross loan commitments 73.2 10.2 43.9 44.7 0.6 0.8 173.4
------------------------- -------- -------- -------- -------- -------- --------- ------
23. Trade and other payables
As at As at
31 March 30 September
2021 2020
GBPm GBPm
-------------------------------- --------- -------------
Trade payables 21.1 17.0
Other payables 0.3 3.9
Sales and social security taxes 3.3 0.5
Provisions 0.2 0.2
Accruals 12.4 11.2
-------------------------------- --------- -------------
Total trade and other payables 37.3 32.8
-------------------------------- --------- -------------
Included within trade payables is GBP10.4m (30 September 2020:
GBP9.1m) relating to amounts payable in relation to construction
contracts in the contract income segment and GBP4.0m (30 September
2020: GBP4.3m) in relation to construction contracts in the
housebuilding segment.
24. Lease liabilities
IFRS 16 'Leases' was adopted on 1 October 2019 without
restatement of comparative figures. On adoption, lease liabilities
were measured at the present value of the contractual payments due
to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease which in
the Group's case was the Group's incremental borrowing rate on
commencement of the lease.
The Group has a lease for the Head Office facility at Burnham
Yard, Beaconsfield, and for a car. These have been presented on the
Group Statement of Financial Position as right-of-use assets and
lease liabilities. Short-term leases and leases of low-value
underlying assets have been excluded, as is permitted by IFRS
16.
The lease imposes a restriction that the right-of-use asset can
only be used by the Group and is non-cancellable for six years from
the commencement of the lease. Further, the Group is prohibited
from selling or pledging the underlying leased asset as security
and the Group must keep the property in a good state of repair and
return the property in its original condition at the end of the
lease. The lease is secured by the related underlying asset.
The Group has elected not to recognise a lease liability for
short term leases (leases with an expected term of 12 months or
less) or for leases of low value assets. Payments made under such
leases are expensed on a straight-line basis.
Six-month
period
ended
31 March
2021
GBPm
--------------------- ---------
At 30 September 2020 1.2
Additions 0.1
Lease payments (0.2)
--------------------- ---------
At 31 March 2021 1.1
--------------------- ---------
Leases are presented in the Group Statement of Financial
Position as follows:
As at As at
31 March 30 September
2021 2020
GBPm GBPm
------------ --------- -------------
Current 0.3 0.3
Non-current 0.8 0.9
------------ --------- -------------
Total 1.1 1.2
------------ --------- -------------
Future minimum lease payments at 30 September 2020 were as
follows:
<1 year 1-2 years 2-3 years 3-4 years Total
GBPm GBPm GBPm GBPm GBPm
---------------------------------- ------- --------- --------- --------- -----
Lease liabilities secured against
right-of-use asset 0.3 0.3 0.3 0.2 1.1
---------------------------------- ------- --------- --------- --------- -----
Total 0.3 0.3 0.3 0.2 1.1
---------------------------------- ------- --------- --------- --------- -----
The expense relating to payments not included in the measurement
of the lease liability is immaterial.
25. Other financial liabilities
Other financial liabilities falling due within one year of
GBP3.9m (30 September 2020: GBPnil) and falling greater than one
year of GBP3.6m (30 September 2020: GBPnil) relate to purchase
consideration on inventories. Other financial liabilities falling
due within one year of GBP7.2m (30 September 2020: GBPnil) and
falling greater than one year of GBPnil (30 September 2020:
GBP6.8m) relate to the recognition of an other financial
liability.
26. Deferred income
As at As at
31 March 30 September
2021 2020
GBPm GBPm
---------------------------------------------- --------- -------------
Deferred income, due in less than one year 16.2 10.0
Deferred income, due in greater than one year - 2.1
---------------------------------------------- --------- -------------
The deferred income greater than one year, has arisen on receipt
of a deposit relating to the sale of completed units. These are
currently under construction.
The deferred income due within one year arises due to the
differences between customer certification of contract income
recognised under the input method of IFRS 15 and amounts billed to
customers.
27. Share capital and reserves
Group and Company
The Group and Company have two classes of share capital and five
types of reserves organised as follows:
Ordinary shares
Except for the shares held in the Employee Benefit Trust and the
Treasury reserve, each share has the right to one vote and is
entitled to participate in any distribution made by the Company,
including the right to receive a dividend. Ordinary shares issued
after the balance sheet date but prior to the date of this report
are disclosed in note 29.
The movement in the number of shares in issue is shown in the
table below.
Authorised, issued and fully paid
-----------------------------------------------
10p ordinary shares 10p deferred shares
------------------------ ---------------------
Number GBPm Number GBPm
------------------------------------ ---------------- ------ ------------- ------
At 1 October 2020 228,341,045 22.8 9,980 -
Issued on exercise of share options 1,500,000 0.2 - -
------------------------------------ ---------------- ------ ------------- ------
As at 31 March 2021 229,841,045 23.0 9,980 -
------------------------------------ ---------------- ------ ------------- ------
10p ordinary
shares
Number
------------------------ ------------
Total voting shares (1)
At 30 September 2020 226,713,545
------------------------ ------------
At 31 March 2021 228,213,545
------------------------ ------------
1 Ordinary shares in issue less shares held in the Employee
Benefit Trust and the Treasury reserve.
27. Share capital and reserves continued
Deferred shares
Deferred shares shall not confer the right to be paid a dividend
or to receive notice of or attend or vote at a general meeting. On
a winding-up, after the distribution of the first GBP10,000,000 of
the assets of the Company, the holders of the deferred shares (if
any) shall be entitled to receive an amount equal to the nominal
value of such deferred shares pro rata to their respective
holdings.
Reserves
The following describes the nature and purpose of each reserve
within shareholders' equity:
Reserve Description and purpose
----------------- ------------------------------------------------------------------
Share premium Amount subscribed for share capital in excess of nominal
value less directly attributable issue costs.
----------------- ------------------------------------------------------------------
Employee benefit This represents the purchase of the Company's own shares
trust and are deducted from total equity until they are issued
to employees under the Deferred Bonus Plan. At 31 March
2021 this reserve holds 1,627,500 shares (30 September
2020: 1,627,500 shares).
----------------- ------------------------------------------------------------------
Special reserve A resolution was passed at the AGM in November 2011 for
the capitalisation of the Parent Company's reserves to
allow for the possibility of distributions in the future
and this was put in the Special Reserve, which is a distributable
reserve. A copy of this resolution is available from
Companies House.
----------------- ------------------------------------------------------------------
Retained earnings Cumulative net gains and losses recognised in the Group
income statement together with other items such as dividends
and share-based payments.
----------------- ------------------------------------------------------------------
10p ordinary shares
Employee Benefit Trust Number GBPm
----------------------- ------------- ------
At 30 September 2020 1,627,500 (1.1)
----------------------- ------------- ------
At 31 March 2021 1,627,500 (1.1)
----------------------- ------------- ------
28. Net debt reconciliation
Amortisation
At of loan Movement At
1 October Cash arrangement in accrued 31 March
2020 flows Proceeds Repayments fees liability 2021
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ---------- ------ -------- ---------- ------------ ----------- ---------
Secured bank loans 85.4 - 12.5 (18.4) (0.4) - 79.1
Other secured loans 38.4 - 4.4 (2.6) 0.1 - 40.3
-------------------------------- ---------- ------ -------- ---------- ------------ ----------- ---------
Borrowings 123.8 - 16.9 (21.0) (0.3) - 119.4
Zero Preference Dividend shares 30.2 - - - - 1.0 31.2
Other financing arrangements 6.8 - - - - 0.4 7.2
Loans from joint ventures 3.1 - - - - - 3.1
-------------------------------- ---------- ------ -------- ---------- ------------ ----------- ---------
Gross debt 163.9 - 16.9 (21.0) (0.3) 1.4 160.9
-------------------------------- ---------- ------ -------- ---------- ------------ ----------- ---------
Cash and cash equivalents (15.7) (12.3) - - - - (28.0)
-------------------------------- ---------- ------ -------- ---------- ------------ ----------- ---------
Net debt 148.2 (12.3) 16.9 (21.0) (0.3) 1.4 132.9
-------------------------------- ---------- ------ -------- ---------- ------------ ----------- ---------
Net assets
IFRS 173.3 168.0
-------------------------------- ---------- ------ -------- ---------- ------------ ----------- ---------
Net gearing
IFRS 85.5% 79.1%
-------------------------------- ---------- ------ -------- ---------- ------------ ----------- ---------
29. Post balance sheet events
On 30 March 2021, planning permission was granted and issued for
514 homes including 182 affordable homes at the former Master
Brewer site, Hillingdon, Middlesex. On 10 May 2021, Hillingdon
Council asked the High Court for a Judicial Review of the Mayor of
London's decision to approve these plans.
On 20 April 2021, a resolution to grant planning permission was
received for 583 homes at the former Homebase site, Walthamstow,
East London.
On 29 April 2021, the Group received a resolution to grant
planning permission, subject to the signing of a Section 106
agreement, for 700 new homes and 25,000 square metres of commercial
space at Gardiners Park Village, Basildon. The planning application
was submitted in conjunction with the Homes and Communities
Agency.
On 29 April 2021, the Group repaid the GBP13.3m facility owed to
the Homes and Communities Agency in full.
On 30 June 2021, the Group entered into three partnership
housing contract income contracts totalling GBP88.5m which will run
to 2025.
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END
IR DKKBPKBKKKAN
(END) Dow Jones Newswires
June 30, 2021 02:00 ET (06:00 GMT)
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