TIDM31PE
RNS Number : 2627C
Canary Wharf Finance II PLC
15 October 2020
REPLACEMENT
The following amendments have been made to the "PUBLICATION OF
THE HALF YEARLY FINANCIAL REPORT FOR THE 6 MONTHSED 30 JUNE 2020"
announcement released on 15 October 2020 at 14:51 under RNS No
2450C:
The sub titles to the Notes section contained a typographical
error by referencing "30 June 2019" rather than "30 June 2020"
these sub titles have now been removed.
All other details remain unchanged.
The full amended text is shown below.
CANARY WHARF FINANCE II PLC
15 OCTOBER 2020
PUBLICATION OF THE HALF YEARLY FINANCIAL REPORT FOR THE 6
MONTHSED 30 JUNE 2020
Pursuant to sections 4.1 and 6.3.5 of the Disclosure and
Transparency Rules, the board of Canary Wharf Finance II plc is
pleased to announce the publication of its half yearly financial
report for the 6 months ended 30 June 2020, which will shortly be
available from
https://group.canarywharf.com/investors/canary-wharf-finance-ii-plc/
.
The information contained within this announcement, which was
approved by the board of directors on 15 October 2020, does not
comprise statutory accounts within the meaning of the Companies Act
2006 and is provided in accordance with section 6.3.5(2)(b) of the
Disclosure and Transparency Rules.
In compliance with the Listing Rule 9.6.1, a copy of the 30 June
2020 half yearly financial report will be submitted to the FCA for
publication through the document viewing facility and will shortly
be available to the public for inspection at
www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism
.
Dated: 15 October 2020
Contact for queries:
J J Turner
Company Secretary
Canary Wharf Finance II plc
Telephone: 020 7418 2000
INTERIM MANAGEMENT STATEMENT
This interim management statement relates to the 6 months ended
30 June 2020 and contains information that covers the period from 1
January 2020 to 15 October 2020, the date of publication of this
interim management statement.
BUSINESS REVIEW
The company is a subsidiary of Canary Wharf Group plc and its
ultimate parent undertaking is Stork HoldCo LP, an entity
registered in Bermuda.
The company is a finance vehicle that issues securities which
are backed by commercial mortgages over properties within the
Canary Wharf estate. The company is engaged in the provision of
finance to the Canary Wharf group, comprising Canary Wharf Group
plc and its subsidiaries ('the group'). All activities take place
within the United Kingdom.
At 30 June 2020, the company had GBP1,428,849,920 (31 December
2019 - GBP1,443,512,520) of notes listed on the London Stock
Exchange and had lent the proceeds to a fellow subsidiary
undertaking, CW Lending II Limited ('the Borrower') under a loan
agreement ('the Intercompany Loan Agreement'). The notes are
secured on a pool of properties at Canary Wharf, owned by fellow
subsidiary undertakings, and the rental income therefrom.
Results for the period
As shown in the company's Income Statement, the company's loss
after tax for the 6 month period was GBP4,940,024 (period ended 30
June 2019 restated - profit of GBP14,989,032).
This loss included hedge reserve recycling recognised in the
Income Statement of GBP4,969,727 (period ended 30 June 2019 - loss
of GBP14,918,021 including fair value adjustments). Including the
hedge reserve recycling recognised in other comprehensive income
the profit for the period was GBP29,703 (period ended 30 June 2019
- GBP71,012).
The balance sheet shows the company's financial position at the
period end and indicates that net assets were GBP5,427,168 (31
December 2019 - GBP5,397,465).
The weighted average maturity of the company's securitised debt
is 12.0 years (31 December 2019 - 12.3 years). The weighted average
interest rate of the securitised debt is 6.1% (31 December 2019 -
6.1%).
INTERIM MANAGEMENT STATEMENT (Continued)
In the opinion of the Board, these Financial Statements enable
shareholders to make an informed assessment of the results and
activities of the Company for the period ended 30 June 2020.
FUTURE DEVELOPMENTS
Since 31 December 2019 the UK economy has been significantly
impacted by the Covid-19 virus which has caused widespread
disruption and economic uncertainty. Such disruption and
uncertainty has continued beyond 30 June 2020 and is ongoing at the
date this interim statement was approved. Covid-19 has not however
impacted upon the reported results of the company.
This does however create uncertainty around the future valuation
of investment property held as security for the company's loan
notes and the impact on the company's loan minus cash to value
covenant. At the date of approval of the financial statements
however, the directors do not consider that this is likely to give
rise to a breach of covenant within the next 12 months.
The directors have a reasonable expectation that the company
will have adequate resources to continue its operation for the
foreseeable future. Accordingly, they continue to adopt the going
concern basis in preparing the financial statements.
PRINCIPAL RISKS AND UNCERTAINTIES
The risks and uncertainties facing the business are monitored
through continuous assessment, regular formal quarterly reviews and
discussion at Canary Wharf Group plc board level and Canary Wharf
Group Investments Holdings plc audit committee and board level.
Such discussion focuses on the risks identified as part of the
system of internal control which highlights key risks faced by the
company and allocates specific day to day monitoring and control
responsibilities to management. As a member of Canary Wharf Group,
the current key risks of the company include the cyclical nature of
the property market, concentration risk and financing risk.
Cyclical nature of the property market
The valuation of the Company and Group's assets are subject to
many external economic and market factors. Following, uncertainty
in the Eurozone experienced in recent years, the implications of UK
withdrawal from the EU, a General Election and renewed turmoil in
the financial markets following the spread of the coronavirus, the
London real estate market has had to cope with fluctuations in
demand. The full impact of the coronavirus is not yet possible to
predict. A sustained global epidemic will however inevitably effect
short and medium term economic performance and confidence, with
adverse implications for the property market. The real estate
market has to date, however, been assisted by the depreciation of
sterling since the EU referendum and the continuing presence of
overseas investors attracted by the relative transparency of the
real estate market in London which is still viewed as both
relatively stable and secure. Although previous Government
announcements, in particular the changes to stamp duty in the
residential property market, have contributed to a slowing of
residential land prices the residential market has been underpinned
by continuing demand. Sales in the residential buildings at Wood
Wharf and Southbank Place have accordingly remained relatively
strong despite continuing uncertainties which are unhelpful to
confidence across the wider real estate sector.
INTERIM MANAGEMENT STATEMENT (Continued)
Concentration risk
The majority of the Canary Wharf Group's real estate assets are
currently located on or adjacent to the Canary Wharf Estate with a
majority of tenants linked to the financial services industry.
Wherever possible steps are taken to mitigate or avoid material
consequences arising from this concentration and to diversify the
tenant base.
Financing risk
The broader economic cycle is reflected in movements in
inflation, interest rates and bond yields.
The company has issued debenture finance in sterling at both
fixed and floating rates and uses interest rate swaps to modify its
exposure to interest rate fluctuations. All of the company's
borrowings are fixed after taking account of interest rate hedges.
All borrowings are denominated in sterling and the company has no
intention to borrow amounts in currencies other than sterling.
The company enters into derivative financial instruments solely
for the purposes of hedging its financial liabilities. No
derivatives are entered into for speculative purposes.
The company is not subject to externally imposed capital
requirements.
The company's securitisation is subject to a maximum loan minus
cash to value ('LMCTV') ratio covenant.
The maximum LMCTV ratio is 100.0%. Based on the 30 June 2020
valuations of the properties upon which the company's notes are
secured, the LMCTV ratio at the interest payment date in July 2020
was 42.7%. The securitisation is not subject to a minimum interest
coverage ratio. A breach of certain financial covenants can be
remedied by depositing eligible investments (including cash).
INTERIM MANAGEMENT STATEMENT (Continued)
DIRECTOR'S RESPONSIBILITY STATEMENT
The board of directors, comprising Sheikh Khalifa Al-Thani, Sir
George Iacobescu CBE,
S Z Khan and Z B Vaughan, confirms to the best of its knowledge
that:
-- the condensed set of financial statements on pages 7 - 16
which has been prepared in accordance with the applicable
set of accounting standards give a true and fair view of
the assets, liabilities, financial position and profit or
loss of the company as required by Rule 4.2.4 of the Disclosure
and Transparency Rules of the United Kingdom's Financial
Conduct Authority (the 'DTRs'); and
-- the interim management statement includes a fair review of
the information required by Rule 4.2.7 of the DTRs (indication
of important events during the first 6 months and description
of principal risks and uncertainties for the remaining 6
months of the year).
INCOME STATEMENT
for the 6 months ended 30 June 2020
Audited Unaudited Unaudited
year ended 6 months 6 months
31 December ended ended
2019 30 June 2020 30 June 2019
As restated
GBP Note GBP GBP
------------- ------------- -------------
(8,952) Administrative expenses (8,952) (8,952)
(8,952) OPERATING LOSS (8,952) (8,952)
86,789,015 Interest receivable 2 42,579,800 43,440,206
(76,685,988) Interest payable 3 (47,510,872) (28,442,222)
(LOSS)/PROFIT ON ORDINARY
10,094,075 ACTIVITIES BEFORE TAXATION (4,940,024) 14,989,032
Tax on profit/(loss) on
- ordinary activities 4 - -
(LOSS)/PROFIT ON ORDINARY
ACTIVITIES AFTER TAXATION
10,094,075 FOR THE PERIOD/YEAR (4,940,024) 14,989,032
------------- ------------- -------------
OTHER COMPREHENSIVE INCOME
Fair value movement on effective
(14,646,700) hedging instruments - (14,646,701)
4,689,581 Hedge reserve recycling 4,969,727 (271,319)
Tax relating to components
- of other comprehensive income - -
OTHER COMPREHENSIVE INCOME
(9,957,119) FOR THE PERIOD/YEAR 4,969,727 (14,918,020)
TOTAL COMPREHENSIVE INCOME
136,956 FOR THE PERIOD/YEAR 29,703 71,012
------------- ---------- -------------
All amounts relate to continuing activities in the United
Kingdom.
The Notes numbered 1 - 9 form an integral part of this Half
Yearly Financial Report.
The Half Yearly Financial Report for the 6 months ended 30 June
2020 was approved by the Board of Directors on 15 October 2020.
STATEMENT OF FINANCIAL POSITION
as at 30 June 2020
Audited Unaudited Unaudited
31 December 30 June 30 June
2019 2020 2019
As restated
GBP Note GBP GBP
---------------- ---------------- ----------------
CURRENT ASSETS
Debtors 5
Amounts falling due after
1,680,875,352 one year 1,684,673,289 1,696,340,290
Amounts falling due within
48,215,880 one year 47,858,386 48,352,235
3,366,239 Cash at bank 3,548,081 3,218,677
1,732,457,471 1,736,079,756 1,747,911,202
CREDITORS: Amounts falling
(46,184,654) due within one year 6 (45,979,299) (46,239,391)
1,686,272,817 NET CURRENT ASSETS 1,690,100,457 1,701,671,811
---------------- ---------------- ----------------
TOTAL ASSETS LESS CURRENT
1,686,272,817 LIABILITIES 1,690,100,457 1,701,671,811
CREDITORS: Amounts falling
due after more than one
(1,680,875,352) year 7 (1,684,673,289) (1,696,340,290)
5,397,465 NET ASSETS 5,427,168 5,331,521
---------------- ---------------- ----------------
CAPITAL AND RESERVES
50,000 Called up share capital 50,000 50,000
(157,005,324) Hedging reserve (152,035,597) (161,966,225)
162,352,789 Retained earnings 157,412,765 167,247,746
5,397,465 SHAREHOLDER'S SURPLUS 5,427,168 5,331,521
---------------- ---------------- ----------------
The Notes numbered 1 - 9 form an integral part of this Half
Yearly Financial Report.
STATEMENT OF CHANGES IN EQUITY
for the 6 months ended 30 June 2020
Called
up
share Hedging Retained
capital reserve earnings Total
GBP GBP GBP GBP
-------- -------------- ------------ -------------
At 1 January 2019 as
restated 50,000 (147,048,205) 152,258,714 5,260,509
Profit for the period - - 14,989,032 14,989,032
Other comprehensive
income - (14,918,020) - (14,918,020)
Total comprehensive
income - (14,918,020) 14,989,032 71,012
At 30 June 2019 50,000 (161,966,225) 167,247,746 5,331,521
-------- -------------- ------------ -------------
Loss for the period - - (4,894,957) (4,894,957)
Other comprehensive
loss - 4,960,901 - 4,960,901
Total comprehensive
loss - 4,960,901 (4,894,957) 65,944
At 31 December 2019 50,000 (157,005,324) 162,352,789 5,397,465
-------- -------------- ------------ -------------
Loss for the period - - (4,940,024) (4,940,024)
Other comprehensive
income - 4,969,727 - 4,969,727
Total comprehensive
income - 4,969,727 (4,940,024) 29,703
At 30 June 2020 50,000 (152,035,597) 157,412,765 5,427,168
-------- -------------- ------------ -------------
The Notes numbered 1 - 9 form an integral part of this Half
Yearly Financial Report.
NOTES TO THE INTERIM REPORT
for the 6 months ended 30 June 2020
1. ACCOUNTING POLICIES
The statutory accounts have been prepared in accordance with
Financial Reporting Standard (FRS) 102 "The Financial Report
Standard applicable in the UK and Republic of Ireland".
Accordingly, this condensed set of financial statements has been
prepared in accordance with FRS 104 "Interim Financial
Reporting".
The accounting policies applied in the preparation of this
Interim Report are consistent with those that will be adopted in
the statutory accounts for the year ending 31 December 2020. The
full accounting policies of the company, set out in the 2019
statutory accounts, have been applied in preparing this Interim
Report.
The financial information relating to the 6 months ended 30 June
2020 and 30 June 2019 is unaudited.
The results for the year ended 31 December 2019 are not the
company's statutory accounts. A copy of the statutory accounts for
the year has been delivered to the Registrar of Companies. The
auditor's report on those accounts was not qualified, did not
contain any reference to any matters which the auditor drew
attention by way of emphasis without qualifying the report and did
not contain statements under Section 498(2) or (3) of the Companies
Act 2006.
In accordance with FRS 102, the company will be exempt from
presentation of cash flow statement in its next annual financial
statements as it will be included in the consolidated financial
statements of Canary Wharf Group Investing Holdings plc, and
accordingly the company has taken an equivalent exemption in
preparing these condensed interim financial statements.
2. INTEREST RECEIVABLE AND SIMILAR INCOME
Audited Unaudited Unaudited
year ended 6 months 6 months
31 December ended ended
2019 30 June 2020 30 June 2019
GBP GBP GBP
------------ ------------- -------------
15,944 Bank interest receivable 5,377 7,340
Interest receivable from group
86,773,071 undertakings 42,574,423 43,432,866
86,789,015 42,579,800 43,440,206
------------ ------------- -------------
3. INTEREST PAYABLE AND SIMILAR CHARGES
Audited Unaudited Unaudited
year ended 6 months 6 months
31 December ended ended
2019 30 June 2020 30 June 2019
As restated
GBP GBP GBP
------------- ------------- -------------
Interest payable on securitised
86,643,107 debt (Note 8) 42,541,145 43,360,243
(14,646,700) Fair value adjustments - (14,646,702)
4,689,581 Hedge reserve recycling 4,969,727 (271,319)
76,685,988 47,510,872 28,442,222
------------- ------------- -------------
Fair value adjustments
Audited Unaudited Unaudited
year ended 6 months 6 months
31 December ended ended
2019 30 June 2020 30 June 2019
GBP GBP GBP
------------- ------------- -------------
17,109,613 Derivative financial instruments 59,067,077 17,509,177
4,268,326 Securitised debt (39,097,934) 3,128,454
(36,024,639) Loan to fellow subsidiary undertaking (19,969,143) (35,284,333)
(14,646,700) - (14,646,702)
------------- ------------- -------------
4. TAXATION
Audited Unaudited Unaudited
year ended 6 months 6 months
31 December ended ended
2019 30 June 2020 30 June 2019
As restated
GBP GBP GBP
------------ ------------- -------------
Tax charge
- Current tax chargeable to income - -
- Deferred tax - -
- - -
------------ ------------- -------------
Tax reconciliation
(Loss)/profit on ordinary activities
10,094,075 before taxation (4,940,024) 14,989,032
Tax on (loss)/profit at UK
1,917,874 corporation tax rate 938,605 (3,644,358)
Effects of:
- Changes in tax rates - 382,188
(1,891,852) Fair value movements (944,248) 3,248,605
(26,022) Group relief 5,643 13,565
- - -
------------ ------------- -------------
5. DEBTORS
Audited Unaudited Unaudited
31 December 30 June 30 June
2019 2020 2019
As restated
GBP GBP GBP
-------------- -------------- --------------
Due within one year:
Loan to fellow subsidiary
46,117,430 undertaking 45,903,410 46,177,842
Amounts owed by fellow subsidiary
2,098,450 undertakings 1,954,976 2,174,393
48,215,880 47,858,386 48,352,235
-------------- -------------- --------------
Due after more than one
year:
Loan to fellow subsidiary
1,680,875,352 undertaking 1,684,673,289 1,696,340,290
1,680,875,352 1,684,673,289 1,549,800,559
-------------- -------------- --------------
The loan to a fellow subsidiary undertaking comprises:
Audited Unaudited Unaudited
31 December 30 June 30 June
2019 2020 2019
GBP GBP GBP
-------------- -------------- --------------
1,706,598,286 Brought forward 1,710,200,552 1,706,598,286
(29,325,200) Repaid in period (14,662,600) (14,662,600)
(1,864,598) Amortisation of issue premium (895,370) (942,991)
(1,232,575) Accrued financing expenses (613,236) (611,538)
36,024,639 Fair value adjustment 19,969,143 35,284,333
1,710,200,552 Carried forward 1,713,998,489 1,725,665,490
-------------- -------------- --------------
Payable within one year
29,325,200 or on demand 29,325,200 29,325,200
Payable after more than
1,680,875,352 one year 1,684,673,289 1,696,340,290
1,710,200,552 1,713,998,489 1,725,665,490
-------------- -------------- --------------
The loans to a fellow subsidiary undertaking bear fixed rates of
interest between 5.41% and 7.07% and are repayable in instalments
between 2005 and 2037.
Other amounts owed by group companies are non-interest bearing
and repayable on demand.
The amount of the loan due within one year comprises
GBP16,578,210 (31 December 2019 - GBP16,792,230) of interest and
GBP29,325,200 (31 December 2019 - GBP29,325,200) of capital.
The A7, B3 and C2 tranches of the intercompany loan are carried
at fair value. The A1, A3, B and D2 tranches are carried at
amortised cost. The total fair value of the loans to fellow
subsidiary undertakings at 30 June 2020 was GBP1,986,701,158 (31
December 2019 - GBP1,988,296,841), calculated by reference to the
fair values of the company's financial liabilities. In the event
that the company were to realise the fair value of the securitised
debt and the derivative financial instruments, it would have the
right to recoup its losses as a repayment premium on its loans to
CW Lending II Limited. As such, the fair value of the loans to
group undertakings is calculated to be the sum of the fair value of
the securitised debt and the fair value of the derivative financial
instruments. The carrying value of financial assets represents the
company's maximum exposure to credit risk.
6. CREDITORS: Amounts falling due within one year
Audited Unaudited Unaudited
31 December 30 June 30 June
2019 2020 2019
GBP GBP GBP
------------ ----------- -----------
46,184,654 Securitised debt (Note 8) 45,970,347 46,230,439
- Accruals and deferred income 8,952 8,952
46,184,654 45,979,299 46,239,391
------------ ----------- -----------
The amount of the securitised debt due within one year comprises
GBP16,645,147 (31 December 2019 - GBP16,859,454) of interest and
GBP29,325,200 (31 December 2019 - GBP29,325,200) of capital.
7. CREDITORS: Amounts falling after more than one year
Audited Unaudited Unaudited
31 December 30 June 30 June
2019 2020 2019
As restated
GBP GBP GBP
-------------- -------------- --------------
1,331,780,063 Securitised debt 1,276,510,923 1,346,845,437
349,095,289 Derivative financial instruments 408,162,366 349,494,853
1,680,875,352 1,684,673,289 1,696,340,290
-------------- -------------- --------------
The amounts at which borrowings are stated comprise:
Audited Unaudited Unaudited
31 December 30 June 30 June
2019 2020 2019
GBP GBP GBP
-------------- -------------- --------------
1,389,259,312 Brought forward 1,361,105,263 1,389,259,312
(29,325,200) Repaid in period (14,662,600) (14,662,600)
(1,864,598) Amortisation of issue premium (895,370) (942,991)
(1,232,577) Accrued financing expenses (613,236) (611,538)
4,268,326 Fair value adjustment (39,097,934) 3,128,454
1,361,105,263 Carried forward 1,305,836,123 1,376,170,637
-------------- -------------- --------------
Payable within one year or
29,325,200 on demand 29,325,200 29,325,200
Payable after more than one
1,331,780,063 year 1,276,510,923 1,346,845,437
1,361,105,263 1,305,836,123 1,376,170,637
-------------- -------------- --------------
The company's securitised debt was issued in tranches, with
notes of classes A1, A3, A7, B, B3, C2 and D2 remaining
outstanding. The class A1, A3 and B notes were issued at a premium
which is being amortised to the income statement on a straight line
basis over the life of the relevant notes. At 30 June 2020
GBP14,771,993 (31 December 2019 - GBP15,667,363) remained
unamortised.
At 30 June 2020, there were accrued financing costs of
GBP17,965,025 (31 December 2019 - GBP18,578,262) relating to
increases in margins as described below.
The notes are secured on 6 properties at Canary Wharf, owned by
fellow subsidiary undertakings, and the rental income stream
therefrom.
The securitised debt has a face value on 30 June 2020 of
GBP1,428,849,920 (31 December 2019 - GBP1,443,512,520), of which
GBP764,288,920 (31 December 2019 - GBP778,951,520) carries fixed
rates of interest between 5.95% and 6.8%. The other GBP664,561,000
(31 December 2019 - GBP664,561,000) of the securitised debt carries
floating rates of interest at LIBOR plus a margin. The company uses
interest rate swaps to hedge exposure to the variability in cash
flows on floating rate debt caused by movements in market rates of
interest. The hedged rates of the floating notes, including the
margins, are between 5.30% and 6.74%.
The floating rate notes are carried at fair value through profit
or loss. The fixed rate notes are carried at amortised cost. The
total fair value of the securitised debt at 30 June 2020 was
GBP1,578,538,792 (31 December 2019 - GBP1,639,201,552). The fair
values of the sterling denominated notes have been determined by
reference to prices available on the market on which they are
traded.
At 30 June 2020, the fair value of the interest rate derivatives
resulted in the recognition of a liability of GBP408,162,366 (31
December 2019 - GBP349,095,289). The fair values of the derivative
financial instruments have been determined by reference to the
market values provided by a third party valuer.
The securitisation continues to have the benefit of an
arrangement with AIG which covers the rent in the event of a
default by the tenant of 33 Canada Square over the entire term of
the lease. At 30 June 2020, AIG had posted GBP128,993,887 as cash
collateral in respect of this obligation.
The company also has the benefit of a GBP300 million liquidity
facility provided by Lloyds Bank plc, under which drawings may be
made in the event of a cash flow shortage under the
securitisation.
8. CONTINGENT LIABILITIES AND FINANCIAL COMMITMENTS
As at 30 June 2020 and 31 December 2019, the company had given
security over all its assets, including security expressed as a
first fixed charge over its bank accounts, to secure the notes
referred to in Note 7.
9. PRIOR PERIOD ADJUSTMENT
In previous years the company has noted within its Strategic
Report a mismatch in the accounting treatment applied to its
financial instruments, whereby derivatives were measured at fair
value with securitised debt and intercompany loans measured at
amortised cost.
FRS 102 allows financial instruments to be measured in
accordance with IFRS 9 - Financial Instruments. Following the
adoption of IFRS 9 in the EU, the company has, on 1 July 2019,
changed its accounting policy for financial instruments to that of
the measurement criteria of IFRS 9.
The interest swaps, associated floating rate securitised debt
and associated tranches of the loan to a fellow subsidiary
undertaking have been designated as Fair Value through Profit or
Loss ('FVTPL'), eliminating the accounting mismatch and providing
more reliable and relevant information.
The fixed rate securitised debt and the associated tranches of
the loan to a fellow subsidiary undertaking continue to be carried
at amortised cost as this does not cause an accounting mismatch.
IFRS 9 does not permit a designation as FVTPL under these
circumstances.
Prior to 1 July 2019, financial instruments were carried under
the measurement criteria of IAS 39. The A7 and D2 derivative
financial instruments were carried at FVTPL. The B3 and C2
derivatives financial instruments were designated as effective
hedges of the corresponding notes and carried at Fair Value through
Other Comprehensive Income. All other financial instruments were
carried at amortised cost. The hedging relationships were
terminated on 1 July 2019 with the adoption of fair value
accounting for the floating rate securitised debt. The balance in
the hedging reserve will be amortised to the income statement over
the remaining life of the corresponding notes.
Under the previous accounting policy, the fair value adjustment
resulted in the recognition of a deferred tax asset. Under the new
accounting policy, the deferred tax on the fair value movements
nets to nil.
This change in accounting policy has been applied
retrospectively and the following line items of the accounts have
been restated accordingly:
Previously
reported Adjustment As restated
interim 2019 interim 2019 interim 2019
GBP GBP GBP
---------------- ------------- ----------------
Interest payable and
similar charges (60,598,101) 32,155,879 (28,442,222)
Other profits and losses 43,431,254 - 43,431,254
Profit/(loss) before
tax (17,166,847) 32,155,879 14,989,032
Tax on profit 2,930,436 (2,930,436) -
Profit/(loss) for the
financial year (14,236,411) 29,225,443 14,989,032
---------------- ------------- ----------------
Debtors: amounts falling
due after more than one
year 1,524,052,313 172,287,977 1,696,340,290
Creditors: amounts falling
due after more than one
year (1,814,133,043) 117,792,753 (1,696,340,290)
Other assets and liabilities 5,331,521 - 5,331,521
NET ASSETS/(LIABILITIES) (284,749,209) 290,080,730 5,331,521
---------------- ------------- ----------------
CAPITAL AND RESERVES
Retained earnings (150,367,242) 317,614,988 167,247,746
Other reserves (134,381,967) (27,534,258) (161,916,225)
(284,749,209) 290,080,730 5,331,521
---------------- ------------- ----------------
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