TIDMALNA
RNS Number : 0885B
Alina Holdings PLC
08 June 2021
Alina Holdings PLC (formerly The Local Shopping REIT plc)
("Alina" or the "Company" or the "Group")
AUDITED RESULTS FOR THE PERIOD OF 15 MONTHSED 31 DECEMBER
2020
Alina Holdings PLC (LSE: ALNA) today announces its audited
results for the period of fifteen months ended 31 December
2020.
The information set out below is extracted from the Company's
Report and Accounts for the period of fifteen months ended 31
December 2020, which will be published today on the Company's
website www.alina-holdings.com . A copy will also be submitted to
the National Storage Mechanism where it will be available for
inspection . Cross-references in the extracted information below
refer to pages and sections in the Company's Report and Accounts
for the fifteen months' period ended 31 December 2020.
Alina Holdings PLC ("Alina" or the "Company") is a company
registered on the Main Market of the London Stock Exchange.
In December 2020 the Company changed its accounting reference
date to 31 December in each year, following which it published an
interim report for the six months to its previous accounting
reference date of 30 September 2020. The period reported on in this
document is therefore the fifteen months between the date of the
Company's previous annual report (30 September 2019) and 31
December 2020, thereby ensuring continuity in the Company's
financial reporting. However, as these two periods are not of equal
length, they are not directly comparable. Future financial
statements will report on 12 months periods to 31 December.
The Company's current investment strategy is to identify and
acquire interests in potential target businesses capable of
delivering long term value for its shareholders. We intend to seek
to acquire interests in companies in the leisure, hospitality and
entertainment sectors within Europe. Whilst we have no specific
preferred countries, our initial focus is likely to be on less
developed destinations, which we consider likely to offer the best
value as they emerge from the Covid-19 pandemic.
We will continue to actively manage our residual property
portfolio at least until the current uncertainty overhanging the UK
property market has ended and will sell properties only when the
directors consider it to be in the best interests of the Company's
shareholders to do so.
Chairman's Statement
Corporate Activity
During the period the directors reviewed the options open to the
Company for its future strategy, in tandem with the aim of
restoring trading in the Company's shares on the London Stock
Exchange, which had been suspended in October 2019. This culminated
in the publication, and subsequent approval by the Company's
shareholders in September 2020, of proposals for the Company's new
investment strategy summarised above.
On 19 November 2020, the restoration of trading in the Company's
shares on the London Stock Exchange took place.
On 26 November 2020, in accordance with the new investment
strategy adopted by its shareholders, the Company changed its name
to Alina Holdings PLC.
Financial Performance
The Company made a loss for the 15 months to 31 December 2020
(the "reporting period") of GBP0.465 million (12 months to 30
September 2019: loss GBP1.874 million) on an IFRS basis.
The holding value of the Company's property investment
portfolio, incorporating the adjustment for the value of head
leases under IFRS 16, as at 31 December 2020 was GBP3.092 million
(30 September 2019: GBP3.816 million).
As at 31 December 2020, the Company held GBP4.073 million of
cash (30 September 2019: GBP3.566 million).
Throughout the reporting period we continued to operate our
portfolio of local shopping arcade assets. At the beginning of the
period the property market continued to be affected by the
political uncertainty that overhung the economy generally at that
time. Whilst this was to an extent dissipated following the general
election in December 2019, concerns regarding the impact of the
UK's departure from the European Union continued to influence the
property market throughout the period, and a number of these
remain.
However, the impact of these issues was far exceeded by the
COVID-19 pandemic, which profoundly affected life in the UK from
March 2020 onwards. The impact of the consequent social
restrictions, which have been particularly severe in the retail and
leisure segments, are well known and have impacted all owners and
occupiers of commercial property. In tandem with other
macro-economic factors, they are likely to have long-term
consequences for the nature of retail shopping and the occupation
of town centres generally. However, even during the most severe
lockdown restrictions, those smaller local and convenience shops
supplying essential items to their localities were able to continue
to trade and we were pleased at the robust reaction of many of our
tenants in the face of unprecedented challenges.
Many of our tenants are local sole traders and we have done our
best to support them by taking a flexible approach to rent and
service charge payment patterns. We have also done our best to
support our tenants in applying for the various Government grants
and other support available to them. Our approach has proven
beneficial and resulted in more than 90% collection of all rents
due since taking control of the business. Further, during a period
of immense stress, we have succeeded in reducing vacancies, and the
units in our portfolio are now 91% occupied.
Our Property Assets are currently, independently valued,
however, given the fact that the Company currently has no debt, and
its properties have an equivalent yield of 15.7%, the Board is
investigating alternative strategies to enhance the carrying value
of these assets, including but not limited to the development of
certain assets, or the sale thereof. The Company's main assets are
located in Oldham, Bristol and Hastings.
Duncan Soukup, Chairman
7 June 2021
Strategic Report
The Strategic Report includes the Chairman's Statement on pages
2 and 3.
Operating Review
Business Model
During the year, the business concentrated on obtaining maximum
value from its property portfolio. As noted in the Chairman's
Statement, during the year the directors brought forward
recommendations for changing the Company's investment strategy,
which were adopted by the Company's shareholders shortly before the
year end.
Market Context
For much of the reporting period the Company operated under its
previous investment strategy as a UK REIT specialising in local
retail shopping assets and the Company continues to operate its
residual property assets whilst it develops its new strategy.
Concerns over the potential impact of the UK's departure from
the European Union and uncertainty over its future trading
relationship with the bloc continued to influence property values
and transaction volumes throughout the year. However, this effect
on the market came to be dwarfed by the COVID-19 outbreak form the
latter part of March 2020. The effects of the pandemic, and the
measures taken by Government to contain it, were particularly felt
in the retail and leisure segments. The structural consequences for
some elements of the UK property market appear likely to continue
for the foreseeable future. However, even during the most severe
lockdown restrictions, those smaller local and convenience shops
supplying essential items to their localities, typical of our
assets, were largely able to continue trading, albeit at a reduced
level.
Operating Results & Portfolio Performance
The Group made an IFRS loss before tax for the fifteen months to
31 December 2020 of GBP0.465 million (or 2.05 pence per share),
compared with a loss of GBP1.874 million (2.34 pence per share) for
the 12 months to 30 September 2019. The loss for the Group
reflected the loss of income resulting from the disposal of
property assets during the year and during the latter part of the
preceding year under the previously prevailing policy of
disinvestment, the revaluation of the remaining portfolio and the
effect of currency market fluctuations on the Group's cash
holdings.
The portfolio achieved gross rental income for the fifteen
months period of GBP0.598 million (12 months to 30 September 2019:
GBP0.764 million). This reduction principally reflected the sale of
property assets during the year.
At 31 December 2020 the portfolio comprised six properties, with
an annual gross rental income, after deducting head rent payments,
of GBP0.48 million (30 September 2019: eight properties; annual
rental income GBP0.48 million). The portfolio included 61 letting
units (30 September 2019: 65 letting units). The rental income lost
by the sale of assets was made up through additional lettings at
the retained properties.
Asset management activities during the period focused on
maximising property occupancy and opportunities for rental growth,
as well as a number of repair and maintenance projects. Marketing
and letting activities continued, albeit with appropriate
precautions to address lockdown requirements.
Further details of operating performance are given in the
Finance Review.
Property Sales
Following the reconstitution of the Company's board of directors
in October 2019 the new directors decided that the previous
programme of property sales should cease pending the formulation of
the Company's new investment strategy. The sales of two properties,
which had been contracted during the previous year, were completed
during the reporting period, at an aggregate gross sale price of
GBP0.355 million. The holding value of those properties in the
Company's accounts at 30 September 2019 took account of agreed
pricing and sales costs.
Of the six property assets now held by the Company, one asset is
considered to be held for sale, at a gross sale price of GBP0.350
million, with anticipated execution costs resulting in a carrying
value of GBP0.330 million.
Revaluation
The fair value of the property portfolio of six assets held at
31 December 2020 was GBP2.795 million (30 September 2019: eight
assets, GBP3.465 million), based on the valuation provided by
Allsop LLP, a firm of independent chartered surveyors, as at 30
September 2020. The directors considered that it was not
appropriate to undertake a further valuation of the property assets
during the prevailing epidemic, bearing in mind the recent date of
the previous valuation. Two of the larger assets were subject to
full RICS valuations, with the remainder subject to desktop updates
of their previous full valuations provided by Allsop LLP in July
2019.
The holding value of the property assets in the financial
statements takes account of the agreed pricing for disposal of the
one remaining property considered to be held for sale and also
incorporates the estimated transaction costs for the sale. The
aggregate holding value of the property investment portfolio in the
Company's accounts, incorporating the adjustment for the value of
head leases under IFRS 16, was GBP3.092 million (30 September 2019:
GBP3.816 million).
On a like-for-like basis (excluding the value of properties
disposed of during the year), the property valuation at 31 December
2020 showed a reduction on the 30 September 2019 valuation of
10.42%.
Investment Property Portfolio as at 31 December 2020
Fair value per independent valuation GBP2.795m
Carrying value per financial statements GBP2.775m
----------
Net Initial Yield ("IY") 14.35%
----------
Reversionary Yield ("RY") 16.24%
----------
Equivalent Yield ("EY") 15.7%
----------
Rent per annum* GBP0.441
----------
Market Rent per annum* GBP0.487
----------
*Net of head rents payable.
All yields quoted exclude the residential element which is
valued at a discount to vacant possession value.
Following the changing of Alina Holdings' listing category from
a premium listing to standard listing in November 2020 and the
change of the Company's investment strategy which resulted in its
exit from the UK REIT regime, your Board is reviewing the basis of
valuation for the remaining property portfolio. Historically the
property portfolio has been valued on an RICS "Red Book" basis.
However, your Board feels that this basis of valuation is not
appropriate for a trading company and is seeking professional
advice as to more relevant valuation methods for its new business
model. We will let you know what the conclusion is and the
reasoning once the advice has been received and adopted.
Finance Review
The financial statements contained in this report have been
prepared in accordance with International Financial Reporting
Standards ("IFRS").
Result
The Group recorded an IFRS loss for the fifteen months to 31
December 2020 of GBP0.465 million, or 2.05 pps (12 months to 30
September 2019: loss GBP1.874 million, or 2.34 pps).
Key Performance Indicators ("KPI's")
Throughout the reporting period the Group had no borrowings and
held cash reserves at 31 December 2020 of GBP4.073 million (30
September 2019: GBP3.566 million). The KPI's relating to Interest
Cover, Loan to Value and Gearing, shown in previous reports, are
therefore no longer applicable. The Net Asset Value per Share at 31
December 2020 was 29p (30 September 2020: 31p).
It is the directors' intention to introduce key performance
indicators more relevant to the revised investment policy as
investments are made under the new policy.
Property Operating Expenses
Property operating expenses for the reporting period were
GBP0.16 million (12 months to 30 September 2019: GBP0.69
million).
Further details of property operating expenses are contained in
Note 2 to the financial statements.
Administrative Expenses
Administrative expenses were GBP0.489 million during the
reporting period (12 months to 30 September 2019: GBP1.58 million).
Further detail of administration expenses is contained in Note 4 to
the financial statements.
Net Asset Value ("NAV")
The NAV at 31 December 2020 was GBP6.53 million or 28.76p per
share, based on 22.7 million shares in issue, excluding those held
in treasury (30 September 2019: GBP6.99 million, 30.81p per share,
based on 22.7 million shares in issue).
At 31 December 2020 the Group held GBP4.073 million of cash (30
September 2019: GBP3.566 million). At 31 December 2020 the Group
had no banking debt (30 September 2019: GBPnil).
The reduction in Net Asset Value reflected the reduction in the
valuation of the Company's property portfolio, which in turn
reflected general trends in the UK property market, together with
the reduction in rental income as a result of property disposals in
previous periods and the effect of currency market fluctuations on
the Group's cash holdings.
For the Group as a whole, Allsop LLP, a firm of independent
chartered surveyors, valued the Group's property portfolio at 30
September 2019 and 30 September 2020. In view of the restrictions
imposed as a result of the COVID-19 epidemic, the directors have
adopted the valuations at 30 September 2020 for use in the 31
December 2020 financial statements.
For 30 September 2019 Allsop LLP performed a desktop valuation
of the Group's properties, which comprised an update of the full
valuation (including site inspections) of the properties that they
had carried out in July 2019. The 30 September 2020 valuation
comprised a full valuation of two of the Group's larger properties
and a desktop valuation of the remainder.
One property considered to be held for sale at 31 December 2020
is valued in the Company's accounts at that date at its anticipated
sale price less sales costs.
The valuations were undertaken in accordance with the Royal
Institute of Chartered Surveyors Appraisal and Valuation Standards
on the basis of market value. Market value is defined as the
estimated amount for which a property should exchange on the date
of valuation between a willing buyer and a willing seller in an
arm's length transaction, after proper marketing wherein the
parties had each acted knowledgeably, prudently and without
compulsion.
Financing
The Company had no borrowings during the reporting period.
Throughout the year the Company's operations were financed from its
property income and the proceeds of the sale of investment
properties.
During the reporting period the Company held some of its cash in
foreign currencies. These holdings generated a loss at the end of
the period, primarily resulting from an increase in the value of
sterling prior to the end of the reporting period, due to the
completion of the UK-EU trade agreement. The risk associated with
foreign currency holdings is described in Note 15 to the financial
statements.
Taxation
As a result of the share buy-back offer finalised at the
beginning of the reporting period, the Company no longer fulfilled
the conditions of the UK REIT tax regime. It was subsequently
agreed with HM Revenue & Customs, that the Group would continue
to operate within the REIT regime until 30 September 2020 at which
time it would depart from the REIT regime unless it had fulfilled
the relevant conditions by that date. In the event, the Company's
shareholders decided, during September 2020, to adopt a new
investment strategy and re-list on the Standard element of the Main
Market of the London Stock Exchange and, in consequence, leave the
REIT regime. In consequence of this, the Group is considered to
have exited the REIT regime for the entirety of its financial year
beginning 1 October 2018, being the first year during which the
Company did not fulfil all the REIT conditions and is deemed to be
liable to corporation tax from that date. However, in the light of
the losses incurred since 1 October 2018 there was no corporation
tax liability for 2018-19 and it is not anticipated that any
corporation tax liability will have arisen in respect of
2019-20.
Dividend
In line with the Group's current dividend distribution policy no
dividend will be paid in respect of the reporting period. The
directors will continue to review the dividend policy in line with
progress with the Company's new investment strategy.
Risk Management & Operational Controls
The directors recognise that commercial activities invariably
involve an element of risk. A number of the risks to which the
business is exposed, such as the condition of the UK domestic
economy and sentiment in the UK property market, are beyond the
Company's influence. However, such risk areas are monitored and
appropriate mitigating action, such as reviewing the substance and
timing of the Company's operational plans, is taken wherever
practicable in response to significant changes. The directors
consider the risk areas the Company is exposed to in the light of
prevailing economic conditions and the risk areas set out in this
section are subject to review.
In relation to asset management, the Company's approach to risk
reflects the Company's granular business model and position in the
market and involves the expertise of its directors, management and
third-party advisers. Operational progress and key investment and
disposal decisions are considered in regular management team
meetings as well as being subject to informal peer review.
Higher level risks and financial exposures are subject to
constant monitoring. Major investment and disposal decisions are
subject to review by the directors (all of whom are non-executive)
in accordance with a protocol set by the Board.
The Board was satisfied that its approach to macroeconomic risks
supplied an appropriate response to the effects of the COVID-19
pandemic during the reporting period.
The Board continues to review its risk management approach to
ensure that it reflects the risk profile of the Company's revised
investment strategy and the challenges highlighted by the COVID-19
pandemic.
The Board's approach in this area is further explained in the
Governance section, under Risk & Internal Control.
Principal Risks and Uncertainties
Potential Risk Impact Mitigation
Property Portfolio
Performance
-------------------------- ----------------------------------
Effect on tenants -- Tenant defaults -- Actual and prospective
of downturn in -- Reduced rental voids and rental arrears
macroeconomic environment income continually monitored.
-- Increased void -- Early identification
costs of / discussions with
-- Reduction in tenants in difficulties
Net Asset Value -- Regular review of all
and realisation properties for lease
value of assets terminations and tenant
risk, with early action
to take control of units
as appropriate
-- Limited requirement
for tenant incentives within
sub-sector
-- Close liaison with local
agents enables swift decisions
on individual properties
-- Tendency of small traders
to take early action in
response to economic conditions
-- Diverse tenant base
-- Sustainable location
and property use
-------------------------- ----------------------------------
Higher than anticipated -- Income insufficient -- All material expenditure
property to cover costs subject to authorisation
maintenance costs -- Decline in property regime
value -- Capital expenditure
subject to regular
review
-------------------------- ----------------------------------
Changes to legal -- Adverse impact -- Monitoring of UK property
environment, on portfolio environment and regulatory
planning law or -- Loss of development proposals
local planning policy opportunity -- Close liaison with agents
-- Reduction in and advisers
realisation value -- Membership of and dialogue
of with relevant industry
assets bodies
-------------------------- ----------------------------------
Failure to comply -- Tenant and third-party -- Guidance on regulatory
with regulatory claims resulting requirements provided by
requirements in in financial loss managing agents and professional
connection with -- Reputational advisers
property portfolio, damage -- Individual properties
including health, monitored by asset managers
safety and environmental and agents
-- Managing agents operate
formal regulatory certification
process for residential
accommodation
-- Ongoing programme of
risk assessments for key
multi-tenanted sites
-- Key risks covered by
insurance policies
-------------------------- ----------------------------------
Corporate Governance
& Management
-------------------------- ----------------------------------
Non-availability -- Impact on operations -- Provision of effective
of information and reporting ability security regime with automatic
technology systems -- Financial claims off-site data and systems
or failure arising from leak back-up
of data security of confidential
information
-------------------------- ----------------------------------
Financial and property -- Insufficient -- The Group is been debt-free
market finance available and debt finance has not
conditions at acceptable rates been required.
to fulfil business -- Finance risks reduced
plans with provision of cash
-- Inability to reserve
execute investment -- Impact of interest rates
property disposal on property yields monitored
strategy owing
to fall in property
market values
-- Financial impact
of debt interest
-- Breach of banking
covenants
-------------------------- ----------------------------------
Operational Controls
During the year, the directors continued to recognise that the
Company's ability to operate successfully is largely dependent on
the maintenance of its straightforward approach to doing business
and its reputation for integrity. All those who act on the
Company's behalf are required to behave and transact business in
accordance with the highest professional standards. As well as
compliance with all relevant regulatory requirements, this extends
to customer care and external complaint guidelines. The Company has
adopted a Code, Policy and Procedures under the Market Abuse
Regulation. The Company's arrangements with Principal Real Estate
Limited ("Principal") that applied for the initial part of the
reporting period included the provision of all applicable
compliance procedures, and the directors were satisfied that the
governance procedures adopted by Principal in relation to its
clients were appropriate and protected the Company's interests. The
Company's corporate governance regime is underpinned by a
whistle-blowing procedure, enabling perceived irregularities to be
notified to members of the Board, principally the senior
independent non-executive director.
The Board has overall responsibility for the Company's internal
control systems and for monitoring its effectiveness. The Board's
approach is designed to manage rather than eliminate the risk of
failure to achieve business objectives and can only provide
reasonable assurance against material misstatements or loss. The
directors have not considered it appropriate to establish a
separate internal audit function, having regard to the Company's
size. The Board's approach to internal controls covers all
companies within the Group and there are no associate or joint
venture entities which it does not cover.
The principal foundations of the Company's internal control
framework during the reporting period were:
-- statements of areas of responsibility reserved to the
directors, with prescribed limits to executive authority to commit
to expenditure and borrowing;
-- effective committee structure with terms of reference and
reporting arrangements to the Board;
-- clear remits for the delegation of executive direction and
internal operational management functions;
-- framework for independent directors to provide advice and
support to executive directors on an individual basis;
-- top-level risk identification, evaluation and management framework;
-- effective systems for authorising capital expenditure and
significant revenue items and monitoring actual cost incurred;
-- ongoing reporting to the Board of operational activity and results;
-- regular review of operational forecasts and consideration by the directors;
-- ongoing reporting to the directors on health, safety and environmental matters.
The Board reviews the effectiveness of the Company's risk
management systems against the principal risks facing the business
and their associated mitigating factors, taking account of the
findings and recommendations of the auditors at the Company's
half-year and year-end. Following its review of the auditors'
findings during the reporting period, the Board considers that the
Company's approach remains effective and appropriate for a business
of the Company's size and complexity.
Key Contracts
There are currently no contracts for which require third party
approval for any change to the nature, constitution, management or
ownership of the business. The appointment agreements of directors
do not contain any provisions specifically relating to a change of
control.
Until 24 November 2019, the Company had in place an agreement
with Principal Real Estate Limited ("Principal") to execute the
Group's investment policy and to take responsibility for the
management and performance of the Company's investment property
portfolio. Since that date, the Company has been internally
managed. Details of the investment advisory agreement with
Principal, including remuneration arrangements, are contained in
Note 20 to the financial statements.
Charitable and Political Donations
During the reporting period the Company made no donations for
charitable or political purposes (2019: nil).
Section 172 Companies Act 2006
The Directors acknowledge their duty under s.172 of the
Companies Act 2006 and consider that they have, both individually
and together, acted in the way that, in good faith, would be most
likely to promote the success of the Company for the benefit of its
members as a whole. In doing so, they have had regard (amongst
other matters) to:
-- the likely consequences of any decision in the long term. The
Group's long-term investment strategy is shown in the Chairman's
Report on page 2, with associated risks highlighted in the
Strategic report on Page 8.
-- the interests of the Company's employees. Our employees are
fundamental to us achieving our long-term strategic objectives.
-- the impact of the Company's operations on the community and
the environment. The Group operates honestly and transparently. We
consider the impact on the environment on our day-to-day operations
and how we can minimise this.
-- the desirability of the Company maintaining a reputation for
high standards of business conduct. Our intention is to behave in a
responsible manner, operating within the high standard of business
conduct and good corporate governance, as highlighted in the
Corporate Governance Statement on page 13.
-- the need to act fairly as between members of the Company. Our
intention is to behave responsibly towards our shareholders and
treat them fairly and equally so that they may benefit from the
successful delivery of our strategic objectives.
This Strategic Report was approved by the directors on 7 June
2021.
Duncan Soukup, Chairman
7 June 2021
Corporate Responsibility Statement
During the year we continued to focus on the three principal
contributors to the success of our business:
-- the talent and commitment of our executives;
-- our relationships with national and local advisers, partners and clients; and
-- the well-being of the businesses that occupy our properties
and the communities in which they operate.
Following the termination of the investment advisory agreement
between the Company and Principal Real Estate Europe Limited
terminated on 24 November 2019 the Company has been internally
managed.
The directors remain conscious that the Company's ability to
operate effectively rests on our reputation for fairness and a
straightforward and honest approach to conducting business. We
therefore strive to transact business in accordance with the
highest professional standards and all those who act on our behalf
are expected to do the same. Besides complying with all relevant
legislation and professional guidelines, this includes customer
care and external complaint procedures.
We have again considered whether it is appropriate to report on
relevant human rights issues. In the context of our business and
the reduced size of our investment portfolio, we do not believe
that the provision of detailed information in this area would
provide any meaningful enhancement to the understanding of the
performance of our business. However, we are confident that our
approach to doing business does not contravene any human rights
principles or applicable legislation.
Our approach to corporate responsibility matters is underpinned
by a whistle-blowing procedure, enabling perceived irregularities
to be notified to directors, principally the senior independent
non-executive director.
Employees
The Company had one employee during the reporting period (2019:
no employees). During the reporting period the Company initially
had three directors, who resigned in October 2019 and were replaced
by two directors (2019: three directors).
Diversity
The Company has a formal diversity and equal opportunities
policy in place and is committed a culture of equal opportunities
for all regardless of age, race or gender. The Board currently
comprises two male directors.
Health, Safety and Welfare
The directors were responsible for ensuring that the Company
discharged its obligations for health, safety and welfare during
the reporting period, including matters delegated to the Company's
managing agents and other contractors. No material health, safety
and welfare incidents were notified during the period. Our property
managers and contractors continued to be required to ensure that
property management, maintenance and construction activities
conform to all relevant regulations, with due consideration being
given to the welfare of occupants and neighbours.
Environmental, Social and Governance
We have always believed that our local asset model is by its
nature supportive of reducing the carbon impact of retail shopping.
Our past development activity has been aimed at returning to
profitable use redundant space that would otherwise remain vacant,
potentially relieving development pressure on greenfield sites
elsewhere. Any development activity undertaken is carried out in
accordance with applicable energy and resource saving standards,
noise impact reduction requirements, and, where relevant, the need
to preserve the character of buildings, including listed
properties. Our contractors are required to dispose of waste in
accordance with best practice. We continue to take action to
upgrade the energy performance of our letting units wherever
required.
It is our policy to seek to deal constructively with all
stakeholders in relation to any community issues that arise in
relation to our properties. Our policy is to prefer to use local
advisers, agents and contractors whenever appropriate to do so.
It is our intention to review our response to environmental,
social and governance factors in line with the development of our
new investment policy to ensure that our policies are appropriate
to the revised strategy and operational profile. This review will
take account of related issues, such as modern slavery.
Anti-Corruption and Anti-Bribery
The Company has in place an Anti-Bribery and Anti-Corruption
Policy which the directors consider fulfils UK Government
guidelines for compliance with UK Bribery Act 2010.
Governance
Regulatory Compliance
The Company is subject to, and seeks to comply with, the
Financial Conduct Authority's ("FCA") Listing Rules ("Listing
Rules"), the Market Abuse Regulation and the Disclosure Guidance
and Transparency Rules of the Financial Conduct Authority. The
Company is also subject to the UK City Code on Takeovers and
Mergers. For part of the reporting period the Company held a
Premium Listing on the Main List of the London Stock Exchange,
during which time it was therefore also subject to the UK Corporate
Governance Code, promulgated by the Financial Reporting Council
(the "Code"). The Code may be viewed on the website of the
Financial Reporting Council: www.frc.org.uk. Subject to matters set
out below, the directors consider that the Company complied with
the provisions of the Code to the extent to which they apply to
companies outside the FTSE 350 for the part-period during which the
Code applied to the Company.
Following the Company's move from the Premium category to the
Standard category of the Main List of the London Stock Exchange the
Code no longer applied to the Company. However, the directors then
adopted the Corporate Governance Code of the Quoted Companies
Alliance (the "QCA Code"). The directors consider that the QCA Code
provides a corporate governance framework proportionate to the
risks inherent to the size and complexity of the Company's
operations. The directors apply the QCA Code in the ways set out
below.
Board Level Responsibility
The Company's directors are ultimately responsible for the
effective stewardship of the business, with the Chairman holding
specific responsibility for corporate governance and effective
leadership of the Board. In discharging this obligation, the
Chairman regularly consults the Company's Senior Independent
Non-Executive Director (who is qualified by background and
experience to assist in this sphere), as well as the Company's
legal advisers and the Company Secretary.
Conflicts of Interest
The Company's Articles of Association provide a framework for
directors to report actual or potential situational conflicts,
enabling the Board to give such situational conflicts appropriate
and early consideration. All directors are aware of the importance
of consulting the Company Secretary regarding possible situational
conflicts.
Board Leadership
The Company is led by its Board, which is responsible for
determining the strategy of the business and its effective
stewardship. All major strategic and investment decisions are taken
by the Board as a whole, which monitors the resources available to
the Company, to ensure that they are sufficient to enable its goals
to be achieved. The Board meets regularly to review the Company's
operations and progress with its strategy. The directors are in
regular liaison outside formal meetings. Risk management and
controls are reviewed in the light of advice from the external
auditors, who have access to all the directors.
The Board comprises an executive Chairman and an independent
non-executive director (who was also the senior independent
non-executive director), as set out below.
Duncan Soukup
Executive Chairman, aged 66
Duncan Soukup is the founder and Executive Chairman of Thalassa
Holdings Ltd ("Thalassa"), a company listed on the London Stock
Exchange, and has over 35 years of investment experience. Prior to
establishing Thalassa, Mr Soukup worked in investment banking for
10 years, including as managing director in charge of the non-US
equity business of Bear Sterns. Thereafter, he established the
AIM-listed investment management business Acquisitor plc.
As the executive chairman with a beneficial interest in the
Company's shares, Mr Soukup is not considered to be
independent.
Gareth Edwards
Independent Non-Executive Director, aged 62
Gareth Edwards is a qualified solicitor and was formerly a
partner at international law firm Pinsent Masons LLP. He has
extensive experience as an adviser to boards and senior management
of a range of public, private and entrepreneurial companies on
their strategy and wider business and commercial issues. He is
Chairman of Honye Financial Services Limited, a company listed on
the Main Market of the London Stock Exchange. He is also a director
of the AIM-listed company Cornerstone FS Plc. Gareth Edwards has an
arm's length relationship with Thalassa as a business advisor.
Nevertheless, when taking account of his professional career, his
character and attributes Mr Edwards may be regarded as
independent.
Division of Responsibilities
The responsibilities of each director are set out clearly in the
director's letter of appointment, which is available for inspection
by members of the Company at its registered office during normal
office hours. All directors ensure that they provide sufficient
time to fulfil their obligations. All directors have access to the
advice and services of the Company Secretary and to independent
legal advice at the Company's expense.
During the reporting period the directors monitored the
Company's operational progress and the activities of the executive
management. The Chairman is responsible for ensuring that due
consideration is given to key items of business both at formal
meetings of the directors and liaison outside these. The
independent non-executive director provides a separate
communication channel for shareholders and other interested parties
and has a remit under the Company's "whistle-blowing"
arrangements.
Biographical details for each of the directors as at the date of
this report, including their membership of the Board's committees,
are set out above. Stephen East, Brett Miller and Nicholas Vetch
each held office throughout the year to 30 September 2019, each
resigning on 4 October 2019.
Nomination, Audit and Remuneration Committees were in place
throughout the reporting period, with responsibility for specific
areas within the Company's overall corporate governance structure.
During the reporting period there was no requirement for either of
the Remuneration Committee or the Nomination Committee to meet.
Each director's attendance record at Board and Committee meetings
during the reporting period is set out in the table below:
Director Board Audit Remuneration Nomination
Stephen East 1 n/a n/a n/a
------ ------ ------------- -----------
Brett Miller 1 n/a n/a n/a
------ ------ ------------- -----------
Nick Vetch 1 n/a n/a n/a
------ ------ ------------- -----------
Duncan Soukup 8 2 n/a n/a
------ ------ ------------- -----------
Gareth Edwards 8 2 n/a n/a
------ ------ ------------- -----------
Under the Company's Articles one-third of the directors are
subject to retirement at each Annual General Meeting. Additionally,
the Articles require that director appointments made by the Board
directors are ratified at the subsequent General Meeting of the
Company.
Arrangements are made to provide new directors with an induction
programme into the Company's activities. Non-executive directors
also meet with management on an informal basis. Arrangements are
made for directors to inspect investment properties.
Risk & Internal Control
In addressing its responsibilities in this area, the Board pays
particular attention to:
-- monitoring the integrity of the Company's financial
statements and formal announcements relating to its financial
performance and reviewing significant financial reporting
judgements contained in them;
-- reviewing the adequacy and effectiveness of the Company's
internal financial controls, internal control and risk management
systems, fraud detection, regulatory compliance and whistle-blowing
arrangements;
-- making recommendations for the approval of shareholders on
the appointment, re-engagement or removal of the external Auditors
and approving the Auditors' terms of engagement and
remuneration;
-- overseeing the Company's relationship with the external
Auditors, reviewing and monitoring the Auditors' independence and
objectivity and effectiveness;
-- approving the annual audit plan and reviewing the Auditors'
findings and the effectiveness of the audit programme.
The Company's approach to risk management is set out on pages
8-9.
Directors' Remuneration Policy and Remuneration Implementation
Report
There was no requirement for the Remuneration Committee to meet
during the reporting period. The Company had no employee directors
during the year and no share-related incentive schemes were in
operation. Although it is not currently required, the remuneration
policy for employee directors summarised below was approved by
shareholders at the annual general meeting held in March 2020:
-- within a competitive market, enabling the recruitment and
retention of individuals whose talent matches the entrepreneurial
and leadership needs of the business, enabling the Company to
fulfil its investment objectives for its shareholders; and
-- placing emphasis on performance-related rewards and focusing
on incentive targets that are closely aligned with the interests of
shareholders.
Base Salary To be pitched at market median
for the role, with advice taken
from independent consultants.
Termination Service contracts to be capable
of termination at not more than
one year's notice
-------------------------------------
Annual Bonus Scheme Future scheme to be based on
the achievement of profitability
and cash generation targets
based on the Company's annual
budget.
Individual awards to be capped
at 100% of base salary.
-------------------------------------
Share Based Performance Scheme Scheme to be based on the award
of shares or cash equivalent.
Awards to vest on the achievement
of medium-term and long-term
targets derived from the Company's
investment strategy.
-------------------------------------
Pension Company contribution to individuals'
pension plans of up to 10% of
base salary.
-------------------------------------
Health Plan Individuals may participate
in private healthcare arrangements
supplied by the Company.
-------------------------------------
In applying the remuneration policy, the Board will use its
discretion to provide a tailored mix of benefits that encourages
individuals to maximise their efforts in the best interests of
shareholders. In particular, the remuneration policy would be
subject to any special considerations that may arise in relation to
the execution of any revised investment policy approved by the
Company's shareholders.
Non-Executive Pay
The Company's policy has been to provide remuneration to its
non-executive directors commensurate with the need to attract and
retain individuals with levels of skill and experience appropriate
to the Company's needs. The former directors who served at the
beginning of the period were paid at the rate of GBP30,000 per
annum. No non-executive directors have participated in any bonus or
share-based arrangements of the Company.
Directors' Remuneration
The below table highlighted total directors' remuneration in the
period.
Director Salary Short term Long term Pension Benefits Total
incentives incentives contributions in kind
Stephen East* 323 n/a n/a n/a n/a 323
------- ---------------- ------------ -------------------- --------- -------
Brett Miller* 323 n/a n/a n/a n/a 323
------- ---------------- ------------ -------------------- --------- -------
Nicholas Vetch* 323 n/a n/a n/a n/a 323
------- ---------------- ------------ -------------------- --------- -------
Duncan Soukup** - - - - - -
------- ---------------- ------------ -------------------- --------- -------
Gareth Edwards** 10,000 - - - - 10,000
------- ---------------- ------------ -------------------- --------- -------
Total 10,969 - - - - 10,969
------- ---------------- ------------ -------------------- --------- -------
The aggregate directors' remuneration during the reporting
period was GBP10,969 (12 months to 30 September 2020:
GBP90,000).
Directors' Service Contracts
Non-executive Date of initial Date of current Expiry of term
directors appointment appointment letter
Duncan Soukup** 4 October 2019 4 October 2020 3 October 2021
---------------- -------------------- ---------------
Gareth Edwards** 4 October 2019 4 October 2020 3 October 2021
---------------- -------------------- ---------------
*Resigned 4 October 2019
**Appointed 4 October 2019
At the Company's 2020 Annual General Meeting shareholders passed
a resolution approving the Remuneration Implementation Report for
2018-2019, with 100% of votes cast in favour of the Remuneration
Implementation Report, no votes against and no votes withheld.
A similar resolution, on the remuneration of directors as set
out above, will be put to the Company's Annual General Meeting for
2021.
Directors' Interests in the Company's Shares (audited)
The interests during the reporting period of the directors who
held office during the reporting period in the issued share capital
of the Company as at the date of this report are set out below:
Ordinary 1p Shares*
Director 2020 2019
---------- ----------
Stephen East** - -
---------- ----------
Brett Miller** - -
---------- ----------
Nicholas Vetch** - -
---------- ----------
Duncan Soukup*** 5,418,857 5,419,304
---------- ----------
Gareth Edwards*** - -
---------- ----------
*Re-denominated from Ordinary 10p Shares 29 August 2019
**Resigned 4 October 2019
***Appointed 4 October 2019
In addition to the direct interest shown above, Duncan Soukup
has an indirect interest in 4,618,001 and 1,734 Ordinary Shares
arising from his interests in entities of Thalassa Discretionary
Trust, and Thalassa Holdings Ltd.
Directors' Indemnities and Insurance Cover
To the extent permitted by law, the Company indemnifies its
directors and officers against claims arising from their acts and
omissions related to their office. The Company also maintains an
insurance policy in respect of claims against directors.
Audit Committee Report
The Audit Committee, chaired by the independent non-executive
director, met twice during the reporting period and representatives
of the Company's auditors were in attendance on each occasion. The
Committee paid particular attention to the significant areas set
out below, which were discussed in detail with the Auditors:
Valuation of Investment Properties: the methodology adopted and
valuations provided by Allsop LLP ("Allsop"), for both 30 September
2019 and 30 September 2020 and the directors' valuation as at 31
December 2020.
Going Concern Assumption: Following the change of control of the
Company immediately prior to the reporting period and in the
knowledge of the new Board's intention to propose to shareholders a
resolution amending the Company's investment policy, the Committee
recommended that the financial statements for 30 September 2019 and
subsequent accounting periods should revert to being prepared on a
Going Concern basis, which was approved by the Board. The Company's
new investment policy was set out in the circular to shareholders
issued by the directors on 28 September 2020 and was adopted by
shareholders on 21 October 2020.
The Committee also considered the following items:
-- ensuring that the format of the financial statements and the
information supplied meets the standards set by the International
Accounting Standards Board;
-- reviewing the accounting treatment of receivables and
ensuring effective co-ordination between the Company's records and
those of its managing agents;
-- ensuring that the audit scope properly reflected the risk profile of the business;
-- ensuring that the Company has in place appropriate tax advice
arrangements and that its exit from the UK REIT regime was
appropriately managed appropriately and so as to minimise the
Company's tax exposure;
-- ensuring that the Committee's terms of reference continued to
accord with regulatory requirements.
The Committee considered the independence of external auditors,
seeking to ensure that any non-audit services provided, by external
auditors do not impair the auditors' objectivity or independence.
The Company's auditors, Jeffreys Henry LLP, did not supply any
non-audit services to the Company during the period.
Having assessed the performance, objectivity and independence of
the auditors, as well as the audit process and approach taken, the
Committee recommended the re-appointment of Jeffreys Henry LLP at
the Company's annual general meeting in 2020.
Gareth Edwards
Audit Committee Chairman
7 June 2021
Directors' Report
The directors of Alina Holdings Plc (formerly The Local Shopping
REIT plc) ("the Company") present their report and the audited
financial statements of the Company together with its subsidiary
and associated undertakings ("the Group") for the period of fifteen
months ended 31 December 2020.
In consequence of the change in the Company's accounting
reference date to 31 December in each year, these financial
statements report on the 15 months to 31 December 2020, with
comparative figures for the year to 30 September 2019. As these two
periods are not of equal length, they are not directly comparative.
Future statements will report on 12 months periods to 31
December.
The Directors' Report also includes the information set out on
pages 4 to 24, together with the description of the Company's
investment policy and business model described on page 2.
The following directors held office during the reporting
period:
Stephen East (resigned 4 October 2019)
Nicholas Vetch (resigned 4 October 2019)
Brett Miller (resigned 4 October 2019)
Gareth Edwards (appointed 4 October 2019)
Duncan Soukup (appointed 4 October 2019)
Group Result and Dividend
The loss for the Group attributable to shareholders for the year
was GBP-- million (2019: loss GBP1.87 million). In accordance with
the revised investment policy, no dividend has been or will be
distributed in respect of the financial year. The directors
continue to keep the dividend distribution policy under review.
Post Balance Sheet Events
No significant post-balance sheet events have been
identified.
Going Concern Basis
The financial statements attached to this report have been
prepared on the Going Concern basis. In deciding that the Going
Concern basis is appropriate, the directors reviewed projections of
future activity over the 12 months following the date of this
report. The Directors concluded that there were no identifiable
material uncertainties, and present cash reserves were sufficient
to meet all liabilities as they fall due, up to and beyond that
date.
Future Developments
This information has not been included in the Directors' Report
as it is shown in the Strategic Report, as permitted by Section 414
c (11) of the Companies Act 2006.
Share Capital
Details of the Company's issued share capital are set out in
note 12 to the financial statements. All of the Company's issued
shares are listed on the London Stock Exchange. The Company's share
capital comprises one class of Ordinary Shares of 1p each
(re-denominated from Ordinary Shares of 10p each on 29 August
2019). All issued shares are fully paid up and rank equally.
Certain of the Company's Articles impose requirements on
shareholders in relation to distributions and the size of
individual holdings, to ensure that the Company's adherence to the
rules of the UK REIT tax regime. As the Company is no longer
subject to the UK REIT these Articles no longer have effect and
there are no restrictions on the transfer of shares or the size of
holdings. The directors are not aware of any agreements between
shareholders in relation to the Company's shares.
Transactions in the Company's shares
During the prior year, the Company implemented a tender offer
and purchase of its ordinary shares at 31.33p per share, which
concluded during the reporting period. Under the tender offer
59,808,456 ordinary shares, with a nominal value of GBP598,000,
representing 72.49% of the then called up share capital of the
Company (excluding shares held in treasury), were bought back by
the Company, for an aggregate consideration of GBP18.738 million.
The re-purchased shares were then cancelled. Of these, 59,177,398
shares were bought back and cancelled during the 2018-19 year and
631,058 shares were bought back during 2018-19 and cancelled at the
beginning of the 2019-20 reporting period.
Investment Policy and Listing on the London Stock Exchange
During the reporting period the directors reviewed the options
open to the Company for its future strategy, in tandem with the aim
of restoring trading in the Company's shares on the London Stock
Exchange, which had been suspended in October 2019, in consequence
of the share buy-back programme. This culminated in the approval by
the Company's shareholders in September 2020, of the directors'
proposals for the Company's new investment strategy, the change of
the Company's name and the transfer of the Company's listing on the
London Stock Exchange to a standard listing on Main List. In tandem
with this, the Company's then largest shareholder, Thalassa
Holdings Ltd, distributed the majority of its shares in the Company
to its own shareholders. This enabled the Company to apply to the
Financial Conduct Authority for the restoration of trading in the
Company's shares on the London Stock Exchange, which took place on
19 November 2020.
In accordance with the new investment strategy adopted by its
shareholders, the Company changed its name to Alina Holdings PLC on
26 November 2020.
The Company has no rules in place in relation to the amendment
of its Articles in addition to statutory provisions
Substantial Interests
As at 16 May 2021, the last practicable reporting date before
the production of this document, the Company's share register
showed the following major interests (of 3% or more, excluding
shares held in treasury) in its issued share capital:
Shareholder Ordinary Shares %
HSBC Global Custody Nominee
(UK) Limited* 10,036,857 44.22
---------------- ------
Lynchwood Nominees Limited 6,430,365 28.33
---------------- ------
Ferlim Nominees Limited 1,220,000 5.38
---------------- ------
*Included within HSBC Global Custody Nominee (UK) Limited are
shares of 5,418,857 owned by C D Soukup and 4,618,001 held by
Thalassa Discretionary Trust. The Company has also been notified
that 5,675,000 (25.00%) of its issued share capital are
beneficially owned by Peter Gyllenhammar AB.
Independence
As a result of the share buy-back programme concluded in October
2019, for part of the period reported on, the Company had a
controlling shareholder, Thalassa Holdings Ltd ("Thalassa"). For
this part-period, the Company was required under the Listing Rules
to ensure that: (a) transactions and arrangements with the
controlling shareholder (and/or any of its associates) were
conducted at arm's length and on normal commercial terms; and (b)
neither the controlling shareholder nor any of its associates could
take any action that would have the effect of preventing the
Company from complying with its obligations under the Listing
Rules. The Financial Conduct Authority was notified by the Company
that it had a controlling shareholder as soon as the situation
arose the relevant Listing Rule requirements were followed in
practice. This situation was fully resolved when Thalassa
transferred the majority of its shares in the Company to its own
shareholders, following which Company no longer had a controlling
shareholder.
Investor Relations
Subject to regulatory constraints, the directors are keen to
engage with the Company's shareholders, placing considerable
emphasis on effective communications with the Company's investors.
Directors are happy to comply with shareholder requests for
meetings as soon as practicable, subject to regulatory constraints.
The Board is provided with feedback on such meetings, as well as
regular commentary from investors and the Company's bankers and
advisers. The Board provides reports and other announcements via
the regulatory news service in accordance with regulatory
requirements. Regulatory announcements and key publications can
also be accessed via the Company's website. The Company's Annual
General Meeting provides a further forum for investors to discuss
the Company's progress and the Board encourages shareholders to
attend. The Company complies with relevant regulatory requirements
in relation to convening the meeting, its conduct and the
announcement of voting on resolutions. The Annual Report and Notice
of the Annual General Meeting are sent to shareholders at least 20
working days prior to the meeting and are available on the
Company's website. The results of resolutions considered at the
Annual General Meeting are announced to the Stock Exchange and are
also published on the website and lodged with the National Storage
Mechanism. Investors may elect to receive communications from the
Company in electronic form and be advised by email that
communications may be accessed via the Company's website.
Whistleblowing Policy
The Group has in place a whistleblowing policy which sets out
the formal process by which an employee of the Group may in
confidence raise concerns about possible improprieties in the
Group's affairs, including financial reporting.
Emissions and Energy Consumption Reporting
The directors believe that the Company's outsourced business
model, which focusses on the employment of agents, advisers and
contractors who are local to our property assets, is inherently
environmentally friendly. However, the collection of consumption
data from such businesses is not practicable. It is also not
possible for our national agents and advisers to separately
identify such data in relation to the proportion of their work
devoted to the Company's activities, particularly given the
increase in staff working from home during the COVID-19 lockdown.
It is not possible to measure the energy consumed by the Company's
tenants (nor is this consumption within the Company's control). The
consumption of water, waste output and greenhouse gases other than
CO(2) within the Company's control is negligible.
For previous reporting periods the Company has supplied
environmental reporting information focussed on energy consumed by
the Company and its wholly owned subsidiaries through the
activities of its office base, shared facilities provided by the
Company within its property portfolio and activities within vacant
properties within the Company's control.
In relation to Scope 1 Carbon Emissions (consumption of gas and
fuel), since the termination of the Company's third-party
investment advisory agreement and the relocation of its registered
office it has not been possible to separately identify the energy
consumed on the Company's activities. An element of the Company's
administration activity is carried out at its registered office.
However, this is a de minimis element of the overall activity and
energy consumption at that site. Other activity is undertaken by
the Company's directors and management working at home. In both
cases, it has not been possible to separately identify the energy
consumed on the Company's activities at those locations. In
previous years, data has been supplied relating to fuel consumed on
journeys on Company activities. As the Company does not operate
company cars, all such journeys are made in employees' private
vehicles or on public transport. The reduction in the Company's
property portfolio has significantly reduced the requirement for
such journeys, which were then further restricted during the
reporting period by the COVID-19 lockdown regime. Accordingly, the
directors do not consider that any meaningful Scope 1 data can be
supplied.
Similar limitations apply to Scope 2 data, which in previous
reports comprised an estimate of consumption for vacant property
units for which the Company is responsible. The number of these and
the related energy consumption has been de minimis throughout the
reporting period.
Similarly, it has not been practicable to measure Scope 3
emissions.
The Company's direct usage and emissions of water is also
minimal. Although a small element of utility supply charges within
vacant premises relate to water and to gas, this largely relates to
standing charges and consumption is negligible.
In relation to The Companies (Directors' Report) and LLP
Partnerships (Energy and Carbon Report) Regulations 2018, the
Company consumes less than 40,000 kWh of energy per annum and
therefore qualifies as a low energy user and therefore does not
come within the scope of those regulations.
Statement of Disclosure to Auditors
The directors who were in office at the date of the approval of
the financial statements have confirmed that, as far as they are
aware, there is no relevant audit information of which the auditors
are unaware. Each of the directors has confirmed that they have
taken all necessary steps that they ought to have taken as
directors in order to make themselves aware of any relevant audit
information and to establish that this has been communicated with
the auditors.
This report was approved by the directors on 7 June 2021
William A Heaney
Company Secretary
7 June 2021
Statement of directors' responsibilities in respect of the
Annual Report and the financial statements
The directors are responsible for preparing the Annual Report
and the Group and parent Company financial statements in accordance
with applicable law and regulations.
Company law requires the directors to prepare Group and parent
Company financial statements for each financial year. Under that
law they are required to prepare the Group financial statements in
accordance with International Financial Reporting Standards as
adopted by the European Union (IFRSs as adopted by the EU) and
applicable law and have elected to prepare the parent Company
financial statements in accordance with UK accounting standards,
including FRS 102 The Financial Reporting Standard applicable in
the UK.
Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and parent Company and of
their profit or loss for that period. In preparing each of the
Group and parent Company financial statements, the directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable, relevant, reliable and prudent;
-- for the Group financial statements, state whether they have
been prepared in accordance with IFRSs as adopted by the EU;
-- for the parent Company financial statements, state whether
applicable UK accounting standards have been followed, subject to
any material departures disclosed and explained in the parent
company financial statements;
-- assess the Group and parent Company's ability to continue as
a going concern, disclosing, as applicable, matters related to
going concern; and
-- use the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to cease
operations or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the parent Company and enable them
to ensure that its financial statements comply with the Companies
Act 2006. They are responsible for such internal control as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking such
steps as are reasonably open to them to safeguard the assets of the
Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the directors are also
responsible for preparing a Strategic Report, Directors' Report,
Directors' Remuneration Report and Corporate Responsibility
Statement that complies with that law and those regulations.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
company's website. Legislation in the UK governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
Responsibility statement of the directors in respect of the
annual financial report
We confirm that to the best of our knowledge:
-- the financial statements, 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 and the undertakings included in the consolidation
taken as a whole; and
-- the strategic report/directors' report includes a fair review
of the development and performance of the business and the position
of the issuer and the undertakings included in the consolidation
taken as a whole, together with a description of the principal
risks and uncertainties that they face.
We consider the annual report and accounts, taken as a whole, is
fair, balanced and understandable and provides the information
necessary for shareholders to assess the group's position and
performance, business model and strategy.
The foregoing reports were approved by the directors on 7 June
2021
William A Heaney
Company Secretary
7 June 2021
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF THE LOCAL SHOPPING
REIT PLC
Opinion
We have audited the financial statements of Alina Holdings Plc
(the 'parent company') and its subsidiaries (the 'group') for the
period ended 31 December 2020 which comprise the consolidated
income statement, the consolidated statement of comprehensive
income, the consolidated and company balance sheet, the
consolidated statement of cash flows, the consolidated statements
of changes in equity and notes to the financial statements,
including a summary of significant accounting policies. The
financial reporting framework that has been applied in the
preparation of the group financial statements is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union. The financial reporting framework that has been
applied in the preparation of the parent company financial
statements is applicable law and United Kingdom Accounting
Standards, including Financial Reporting Standard 102 (United
Kingdom Generally Accepted Accounting Practice).
In our opinion:
-- the financial statements give a true and fair view of the
state of the group's and of the parent company's affairs as at 31
December 2020 and of the group's loss for the period then
ended;
-- the group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
-- the parent company financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006 and, as regards to
the group financial statements, Article 4 of the IAS Regulation
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to public listed entities, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
director's use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the entity's ability to
continue to adopt the going concern basis of accounting included
reviews of expected cash flows for a period of 12 months, to
determine expected cash burn, which was compared to the liquid
assets held in the entity.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group's ability to continue as a going concern for a period of at
least twelve months from when the financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Our approach to the audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made
subjective judgments, for example in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. As in all
of our audits we also addressed the risk of management override of
internal controls, including evaluating whether there was evidence
of bias by the directors that represented a risk of material
misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the
Group and the Company, the accounting processes and controls, and
the industry in which they operate.
The Group financial statements are a consolidation of six
reporting units, comprising the Group's operating businesses and
holding companies.
We performed audits of the complete financial information of
Alina Holdings Plc, NOS 4 Ltd, NOS 5 Ltd and NOS 6 Ltd, which were
individually financially significant and accounted for 100% of the
Group's revenue and 100% of the Group's absolute profit before tax
(i.e. the sum of the numerical values without regard to whether
they were profits or losses for the relevant reporting units).
Specific reviews undertaken for NOS 7 Ltd and Gilfin Property
Holdings Ltd, as they were deemed to be insignificant
components.
The Group engagement team performed all audit procedures.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. This is not a
complete list of all risks identified by our audit.
Key audit matter How our audit addressed the key
audit matter
Valuation and presentation of investment We reviewed the recognition, capitalisation
property and fair valuation of investment
The Group holds GBP2,762,000 (2019: properties in conjunction with IAS
GBP3,139,000) as at the year end 40 Investment Property and IFRS
as well as GBP330,000 (2019: GBP677,000) 13 Fair Value Measurement.
of assets held for sale. We assessed the competence, capabilities,
Investment properties are held qualifications and objectivity of
at fair value which represents the external independent valuers
a significant area of management employed by the Group.
judgment. Assets held for sale We have critically evaluated managements
are held at net realisable value methodologies in reviewing valuations
being expected sales price less and adjusting the fair values of
cost to sell. investment properties.
All properties that the Group were
in the process of selling were allocated
as held for sale.
We found no issues with the valuations
and presentations of investment
properties.
--------------------------------------------
Value of parent investment in subsidiaries
We reviewed the director's impairment
The parent company held GBP3,105,000 review. An impairment had been made
(2019: GBP3,277,000) of investments against individual subsidiaries
as at the year end. to reduce the carrying value of
the investments to that of the net
The directors are required to review assets in the respective companies.
the investments for impairments This appears to be a reasonable
on an annual basis. Impairments estimate of recoverable amount of
are based on estimated recoverable the investment. The calculations
amounts, which is based on estimates have been reviewed as part of the
and judgments. audit.
We found no issues with the valuation
The subsidiaries have historically of investments in subsidiaries.
been loss making which is a sign
of impairment. Furthermore, as
the companies have been disposing
of properties in the year the net
assets of the company have been
falling on a year-on-year basis.
--------------------------------------------
Our application of materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and in aggregate on
the financial statements as a whole.
Based on our professional judgment, we determined materiality
for the financial statements as a whole as follows:
Group financial statements Company financial statements
Overall materiality GBP74,000 GBP69,000
-------------------------------- --------------------------------
How we determined 1% of group gross assets 1% of gross assets limited
it by Group materiality
-------------------------------- --------------------------------
Rationale for benchmark We believe that net assets We believe that net assets
applied are the primary measures are the primary measures
used by shareholders used by shareholders in
in assessing the Group's assessing the Company's
performance. It is considered performance. It is considered
a standard industry benchmark. a standard industry benchmark.
-------------------------------- --------------------------------
For each component in the scope of our Group audit, we allocated
a materiality that is less than our overall Group materiality. The
range of materiality allocated across components was between
GBP13,000 and GBP58,000.
We agreed with the Audit Committee that we would report to them
misstatements identified during our audit above GBP3,700 for the
Group and GBP3,450 for the Company, as well as misstatements below
those amounts that, in our view, warranted reporting for
qualitative reasons.
Other information
The other information comprises the information included in the
annual report other than the financial statements and our auditor's
report thereon. The directors are responsible for the other
information contained within the annual report. Our opinion on the
financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
parent company and its environment obtained in the course of the
audit, we have not identified material misstatements in the
strategic report or the directors' report
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements and the part of the
director's remuneration report to be audited are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit; or
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement set out on page 23, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group's and parent company's ability
to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below.
The extent to which the audit was considered capable of
detecting irregularities including fraud
Our approach to identifying and assessing the risks of material
misstatement in respect of irregularities, including fraud and
non-compliance with laws and regulations, was as follows:
-- the senior statutory auditor ensured the engagement team
collectively had the appropriate competence, capabilities and
skills to identify or recognise non-compliance with applicable laws
and regulations;
-- we focused on specific laws and regulations which we
considered may have a direct material effect on the financial
statements or the operations of the company.
-- we assessed the extent of compliance with the laws and
regulations identified above through making enquiries of management
and inspecting legal correspondence; and
-- identified laws and regulations were communicated within the
audit team regularly and the team remained alert to instances of
non-compliance throughout the audit.
We assessed the susceptibility of the company's financial
statements to material misstatement, including obtaining an
understanding of how fraud might occur, by:
-- making enquiries of management as to where they considered
there was susceptibility to fraud, their knowledge of actual,
suspected and alleged fraud;
-- considering the internal controls in place to mitigate risks
of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and
override of controls, we:
-- performed analytical procedures to identify any unusual or unexpected relationships;
-- tested journal entries to identify unusual transactions;
-- assessed whether judgements and assumptions made in
determining the accounting estimates set out in Note 1 were
indicative of potential bias;
-- investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance
with laws and regulations, we designed procedures which included,
but were not limited to:
-- agreeing financial statement disclosures to underlying supporting documentation;
-- reading the minutes of meetings of those charged with governance;
-- enquiring of management as to actual and potential litigation and claims;
-- Obtaining confirmation of compliance from the company's legal advisors.
There are inherent limitations in our audit procedures described
above. The more removed that laws and regulations are from
financial transactions, the less likely it is that we would become
aware of non-compliance. Auditing standards also limit the audit
procedures required to identify non-compliance with laws and
regulations to enquiry of the directors and other management and
the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to
detect than those that arise from error as they may involve
deliberate concealment or collusion.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Other matters which we are required to address
We were re-appointed by the members of the Company on 27 March
2020 to audit the financial statements for the year ending 31
December 2020 and subsequent financial periods. The period of total
uninterrupted engagement is 2 years, covering the periods ended 30
September 2019 to 31 December 2020.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the group or the parent company and we remain
independent of the group and the parent company in conducting our
audit.
Our audit opinion is consistent with the additional report to
the audit committee.
Use of this report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Sanjay Parmar
Senior Statutory Auditor
For and on behalf of
Jeffreys Henry LLP (Statutory Auditors)
Finsgate
5-7 Cranwood Street
London
EC1V 9EE
7 June 2021
Consolidated Income Statement for the 15 months ended 31
December 2020
15 months
ended 31 Year ended
December 30 September
Note 2020 2019
GBP000s GBP000s
Gross rental income 598 764
--------------------------------------------
Property operating expenses 2 (159) (695)
-------------------------------------------- ---------- --------------
Net rental income 439 69
-------------------------------------------- ---------- --------------
Profit/Loss on disposal of investment
properties 3 1 (148)
-------------------------------------------- ---------- --------------
Loss from change in fair value of
investment properties 7 (325) (258)
-------------------------------------------- ---------- --------------
Administrative expenses including
non-recurring items 4 (489) (1,580)
-------------------------------------------- ---------- --------------
Operating loss before net financing
costs (374) (1,917)
-------------------------------------------- ---------- --------------
Financing income* 5 3 49
-------------------------------------------- ---------- --------------
Financing expenses* 5 (94) (6)
-------------------------------------------- ---------- --------------
Loss before tax (465) (1,874)
-------------------------------------------- ---------- --------------
Taxation 6 - -
-------------------------------------------- ---------- --------------
Loss for the period from continuing
operations (465) (1,874)
-------------------------------------------- ---------- --------------
Loss for the financial period attributable
to equity holders of the Company (465) (1,874)
-------------------------------------------- ---------- --------------
Basic and diluted loss per share
on profit for the period 14 (2.05)p (2.34)p
-------------------------------------------- ---------- --------------
Basic and diluted loss per share
on operations for the period 14 (2.05)p (2.34)p
-------------------------------------------- ---------- --------------
Consolidated Statement of Comprehensive Income for the 15 months
ended 31 December 2020
15 months
ended 31 Year ended
December 30 September
2020 2019
GBP000s GBP000s
-------------------------------------- ---------- --------------
Loss for the period (465) (1,874)
--------------------------------------- ---------- --------------
Total comprehensive loss for the
period (465) (1,874)
--------------------------------------- ---------- --------------
Attributable to:
-------------------------------------- ---------- --------------
Equity holders of the parent Company (465) (1,874)
--------------------------------------- ---------- --------------
Consolidated Balance Sheet as at 31 December 2020
31 December 30 September
Note 2020 2019
GBP000s GBP000s
----- ------------ -------------
Non-current assets
----- ------------ -------------
Investment properties 7 2,762 3,139
----- ------------ -------------
2,762 3,139
----- ------------ -------------
Current assets
----- ------------ -------------
Trade and other receivables 8 228 378
----- ------------ -------------
Investment properties held for
sale 7 330 677
----- ------------ -------------
Cash 9 4,073 3,566
----- ------------ -------------
4,631 4,621
----- ------------ -------------
Total assets 7,393 7,760
----- ------------ -------------
Non-current liabilities
----- ------------ -------------
Finance lease liabilities 11 (300) (350)
----- ------------ -------------
(300) (350)
----- ------------ -------------
Current liabilities
----- ------------ -------------
Trade and other payables 10 (566) (418)
----- ------------ -------------
(566) (418)
----- ------------ -------------
Total liabilities (866) (768)
----- ------------ -------------
Net assets 6,527 6,992
----- ------------ -------------
Equity
----- ------------ -------------
Issued capital 12 319 319
----- ------------ -------------
Capital redemption reserve 12 598 598
----- ------------ -------------
Retained earnings 5,610 6,075
----- ------------ -------------
Total attributable to equity holders
of the Company 6,527 6,992
----- ------------ -------------
These financial statements were approved by the Board of
directors on 7 June 2021 and signed on its behalf by:
C D Soukup
Consolidated Statement of Cash Flows for the 15 months ended 31
December 2020
15 months
ended 31 Year ended
December 30 September
Note 2020 2019
GBP000s GBP000s
----- ---------- --------------
Operating activities
----- ---------- --------------
Loss for the year (465) (1,874)
----- ---------- --------------
Adjustments for:
----- ---------- --------------
Loss from change in fair value
of investment properties 7 325 258
----- ---------- --------------
Loss from change in fair value
of head leases 7 48 -
----- ---------- --------------
Net financing loss/(income) 5 91 (43)
----- ---------- --------------
(Profit)/Loss on disposal of investment
properties (1) 148
----- ---------- --------------
Equity secured share-based payment
expenses - 40
----- ---------- --------------
(2) (1,471)
----- ---------- --------------
Decrease/ (Increase) in trade
and other receivables 150 3,963
----- ---------- --------------
Decrease in trade and other payables 146 (1,818)
----- ---------- --------------
294 674
----- ---------- --------------
Loss on foreign exchange (57) -
----- ---------- --------------
Lease liability interest (26) -
----- ---------- --------------
Interest paid (7) -
----- ---------- --------------
Loan arrangement fees paid - (6)
----- ---------- --------------
Interest received 3 49
----- ---------- --------------
Net cash (outflow)/inflow from
operating activities 207 717
----- ---------- --------------
Investing activities
----- ---------- --------------
Net proceeds from sale of investment
properties 348 18,468
----- ---------- --------------
Acquisition and improvements to
investment properties 7 - (4)
----- ---------- --------------
Cash flows from investing activities 348 18,464
----- ---------- --------------
Net cash flows from operating
activities and investing activities 555 19,181
----- ---------- --------------
Financing activities
----- ---------- --------------
Reduction in head lease liabilities (48) -
----- ---------- --------------
Reduction in share capital - (18,907)
----- ---------- --------------
Cash flows from financing activities (48) (18,907)
----- ---------- --------------
Net decrease in cash 507 274
----- ---------- --------------
Cash at beginning of year 3,566 3,292
----- ---------- --------------
Cash at end of year 9 4,073 3,566
----- ---------- --------------
Consolidated Statement of Changes in Equity for the 15 months
ended 31 December 2020
Capital
redemption Retained
Share
capital Reserves reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000
--------- --------- ----------- --------- ---------
Balance at 1 October 2018 18,334 3,773 1,764 3,862 27,733
--------- --------- ----------- --------- ---------
Share based payments 40 40
--------- --------- ----------- --------- ---------
Capital reduction (Note a) (17,417) - - 17,417 -
--------- --------- ----------- --------- ---------
Transfer capital reserves
to revenue Note b) - (3,773) (1,764) 5,537 -
--------- --------- ----------- --------- ---------
Cost of own shares acquired
(note c) (598) - - (18,309) (18,907)
--------- --------- ----------- --------- ---------
Creation of Capital Redemption
Reserve (note d) - - 598 (598) -
--------- --------- ----------- --------- ---------
Loss for year ended 30 September
2019 - - - (1,874) (1,874)
--------- --------- ----------- --------- ---------
Balance at 30 September 2019 319 - 598 6,075 6,992
--------- --------- ----------- --------- ---------
Loss for 15 months ended
31 December 2020 - - - (465) (465)
--------- --------- ----------- --------- ---------
Balance at 30 September 2020 319 - 598 5,610 6,527
--------- --------- ----------- --------- ---------
During the year ended 30 September 2019 the Company successfully
applied to the High Court to undertake a capital restructuring to
enable the Company to make a tender offer for the purchase of its
Ordinary Shares. Under this restructuring and buy back:
(a) The nominal value of ordinary shares was reduced from 20p to
1p, resulting in GBP17.417m being released to retained
earnings;
(b) The capital redemption reserves and other reserves were
transferred to retained earnings;
(c) 59,808,456 ordinary 1p shares were purchased at a price of
31.33p each, the total cost comprising
GBP000s
59,808,456 shares purchased 1p nominal value of each
at share 598
plus premium 30.33p on
each share 18,140
Legal costs of restructuring
and buy back 169
18,309
18,907
(d) A new capital redemption reserve of GBP0.598m was created to
replace the nominal value of shares bought.
Notes to the Financial Statements for the 15 months ended 31
December 2020
1. Accounting Policies
Basis of Preparation
Alina Holdings plc (formerly The Local Shopping REIT plc) (the
"Company") is a public company incorporated, domiciled and
registered in England, which is limited by shares. The Company's
registered number is 05304743 and the address of its registered
office is Eastleigh Court, Bishopstrow, Warminster, BA12 9HW
The group financial statements consolidate those of the Company
and its subsidiaries (together referred to as the "Group"). The
parent company financial statements present information about the
Company as a separate entity and not about its group.
The group financial statements have been prepared and approved
by the directors in accordance with International Financial
Reporting Standards as adopted by the EU ("Adopted IFRSs") and in
accordance with the provisions of the Companies Act 2006. The
Company has elected to prepare its parent company financial
statements in accordance with FRS 102; these are presented on pages
58 to 64.
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in these
group financial statements.
Judgements made by the directors, in the application of these
accounting policies that have significant effect on the financial
statements and estimates with a significant risk of material
adjustment in the next year are discussed later in this note under
the heading "Use of Estimates and Judgements".
The financial statements are prepared in pounds sterling,
rounded to the nearest thousand. They have been prepared under the
historical cost convention except for the following assets which
are measured on the basis of fair value: investment properties, and
investment properties held for sale.
Going Concern
Following the share buy-back in October 2019, the Company's
directors decided that the Company should continue to operate as a
property investment business. In September 2020 the Company's
shareholders adopted the new investment strategy summarised in the
report of the directors and, subsequently, trading in the Company's
shares was restored on the London Stock Exchange. Accordingly,
these financial statements have been prepared on a going concern
basis for the 15 months ended 31 December 2020. The Board is
satisfied the Company has sufficient resources to continue trading
for at least another 18 months.
Basis of Consolidation
The consolidated financial statements include the financial
statements of the Company and all its subsidiary undertakings up to
31 December 2020. Subsidiaries are entities controlled by the
Group. The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity. In assessing control, the Group takes into
consideration potential voting rights. The acquisition date is the
date on which control is transferred to the acquirer. The financial
statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the
date that control ceases. The financial statements of subsidiaries
are prepared using consistent accounting policies. Inter-company
transactions and balances are eliminated.
Investment Property
Investment properties are those properties owned by the Group
that are held to earn rental income or for capital appreciation or
both and are not occupied by the Company or any of its
subsidiaries.
Investment properties are revalued to market value at the end of
each reporting period. Market value is defined as the estimated
amount for which a property should exchange on the date of
valuation between a willing buyer and a willing seller in an arm's
length transaction, after proper marketing wherein the parties had
each acted knowledgeably, prudently and without compulsion.
Investment properties are treated as acquired at the point the
Group assumes the significant risks and returns of ownership.
Subsequent expenditure is charged to the asset's carrying value
only when it is probable that future economic benefits associated
with the expenditure will flow to the Group and the cost of each
item can be reliably measured. All other repairs and maintenance
costs are charged to the Income Statement during the period in
which they are incurred.
Rental income from investment properties is accounted for as
described below.
Investment Properties Held for Sale
Investment properties held for sale are included in the Balance
Sheet at their fair value less estimated sales costs. In
determining whether assets no longer meet the investment criteria
of the Group, consideration has been given to the conditions
required under IFRS 5.
An investment property shall classify a non-current asset as
held for sale if its carrying amount will be recovered principally
through a sale transaction rather than through continuing use.
The asset must be available for immediate sale in its present
condition subject only to terms that are usual and customary for
sales of such assets and its sale must be highly probable as at the
year end.
Head Leases
Where a property is held under a head lease and is classified as
an investment property, it is initially recognised as an asset
based on the sum of the premium paid on acquisition and if the
remaining life of the lease at the date of acquisition is
considered to be material, the net present value of the minimum
ground rent payments. The corresponding rent liability to the
leaseholder was included in the Balance Sheet as a finance
obligation in current and non-current liabilities.
This was discontinued for the September 2018 financial
statements, and as the Company had no properties classified as
investment properties at that Balance Sheet date, the head lease
value and its corresponding liability were removed from the Balance
Sheet. Following the change of decision of the directors in October
2019 to continue operations, this policy has been reinstated, and
the appropriate values at the balance sheet date disclosed in the
financial statements for 30 September 2019 and subsequent
periods.
Trade and Other Receivables
Trade and other receivables are initially recognised at fair
value and subsequently held at amortised cost less impairment.
Impairment is made where it is established that there is objective
evidence that the Group will not be able to collect all amounts due
according to the original terms of the receivable. The impairment
is recorded in the Income Statement.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash balances and deposits
held on call. Cash equivalents are short-term, highly liquid
investments with original maturities of three months or less.
Financial instruments
Financial assets and financial liabilities are initially
classified as measured at amortised cost, fair value through other
comprehensive income, or fair value through profit and loss when
the Company becomes a party to the contractual provisions of the
instrument. Financial assets are derecognised when the contractual
rights to the cash flows expire, or the Company no longer retains
the significant risks or rewards of ownership of the financial
asset. Financial liabilities are derecognised when the obligation
is discharged, cancelled or expires.
Financial assets are classified dependent on the Company's
business model for managing the financial and the cash flow
characteristics of the asset. Financial liabilities are classified
and measured at amortised cost except for trading liabilities, or
where designated at original recognition to achieve more relevant
presentation. The Company classifies its financial assets and
liabilities into the following categories:
Financial assets at amortised cost
The Company's financial assets at amortised cost comprise trade
and other receivables. These represent debt instruments with fixed
or determinable payments that represent principal or interest and
where the intention is to hold to collect these contractual cash
flows. They are initially recognised at fair value, included in
current and non-current assets, depending on the nature of the
transaction, and are subsequently measured at amortised cost using
the effective interest method less any provision for
impairment.
Impairment of trade and other receivables
In accordance with IFRS 9 an expected loss provisioning model is
used to calculate an impairment provision. We have implemented the
IFRS 9 simplified approach to measuring expected credit losses
arising from trade and other receivables, being a lifetime expected
credit loss. This is calculated based on an evaluation of our
historic experience plus an adjustment based on our judgement of
whether this historic experience is likely reflective of our view
of the future at the balance sheet date. In the previous year the
incurred loss model is used to calculate the impairment
provision.
Financial liabilities at amortised cost
Financial liabilities at amortised cost comprise loan
liabilities, including convertible loan note liability elements,
and trade and other payables. They are classified as current and
non-current liabilities depending on the nature of the transaction,
are subsequently measured at amortised cost using the effective
interest method. All convertible loan notes are held at amortised
cost and no election has been made to hold them as fair value
through profit and loss.
Financial assets at fair value through profit and loss
Financial assets at fair value are recognized and measured at
fair value using the most recent available market price with gains
and losses recognised immediately in the profit and loss.
The fair value measurement of the Company's financial and non-
financial assets and liabilities utilises market observable inputs
and data as far as possible. Inputs used in determining fair value
measurements are categorised into different levels based on how
observable the inputs used in the valuation technique utilised are
(the 'fair value hierarchy').
Level 1 - Quoted prices in active markets
Level 2 - Observable direct or indirect inputs other than Level
1 inputs
Level 3 - Inputs that are not based on observable market
data
Ordinary Share Capital
External costs directly attributable to the issue of new shares
are shown in equity as a deduction from the proceeds.
Shares which have been repurchased are classified as treasury
shares and shown in retained earnings. They are recognised at the
trade date for the amount of consideration paid, together with
directly attributable costs. This is presented as a deduction from
total equity. Shares held by the Employee Benefit Trust were
treated as being those of the Group until such time as they were
distributed to beneficiaries, when they were expensed in the profit
and loss account.
The nominal value of shares cancelled has been taken to a
capital redemption reserve.
Rental Income
Rental income from investment properties leased out under
operating leases is recognised in the Income Statement on a
straight-line basis over the term of the lease. When the Group
provides lease incentives to its tenants the cost of incentives are
recognised over the lease term, on a straight-line basis, as a
reduction to income.
Taxation
Corporation tax on the profit or loss for the year comprises
current and deferred tax. Corporation tax is recognised in the
Income Statement except to the extent that it relates to items
recognised directly in equity, in which case it is recognised in
equity.
As a Real Estate Investment Trust ("REIT"), the Group was exempt
from corporation tax on the profits and gains from its property
investment business, provided it met certain conditions. The Group
was considered by HM Customs & Revenue to have exited the REIT
tax regime on 30 September 2018. Since that date it has been
subject to normal corporation tax rules. Therefore, current tax is
the expected tax payable on the taxable income for the year, using
tax rates enacted or substantively enacted at the balance sheet
date and any adjustment to tax payable in respect of previous
years. Deferred tax is provided using the balance sheet liability
method. Provision is made for temporary differences between the
carrying amounts of assets and liabilities in the financial
statements for financial reporting purposes and the amounts used
for taxation purposes. Deferred income tax is calculated after
taking account of any indexation allowances and capital losses on
an undiscounted basis. The amount of deferred tax provided is based
on the expected manner of realisation or settlement of the carrying
amount of assets and liabilities using tax rates enacted or
substantially enacted at the balance sheet date. Deferred tax
assets are recognised only to the extent that it is probable that
future profits will be available against which the asset can be
utilised. Deferred tax assets are reduced to the extent that it is
no longer probable that the related tax benefit will be realised.
Deferred tax assets and liabilities are only offset if there is a
legally enforceable right of set-off.
Pensions
The Company has contribution only pension arrangements in
operation for certain employees.
Share-based Payments
Share based payments are recognised as an employee expense, with
a corresponding increase in equity.
Employee Benefit Trust
In 2007 the Group established an Employee Benefit Trust in
connection with its various share-based incentive schemes. The
Group either purchased its own shares directly or it funded the
trust to acquire shares in the Company. Transactions of the
Employee Benefit Trust were treated as being those of the Company
and were therefore reflected in the Group financial statements. The
shares held by the Employee Benefit Trust were fully distributed
during the year ended 30 September 2019 and the Trust was
subsequently wound up.
Use of Estimates and Judgements
To be able to prepare accounts according to generally accepted
accounting principles, management must make estimates and
assumptions that affect the asset and liability items and revenue
and expense amounts recorded in the financial statements. These
estimates are based on historical experience and various other
assumptions that management and the Board of directors believe are
reasonable under the circumstances. The results of these
considerations form the basis for making judgements about the
carrying value of assets and liabilities that are not readily
available from other sources.
The areas requiring the use of estimates and judgements that may
significantly impact the Group's earnings and financial position
include the estimation of the fair value of investment
properties.
The valuation basis of the Group's investment properties is set
out above.
Segmental reporting
IFRS 8 requires operating segments to be identified on the basis
of internal reports that are regularly reported to the chief
operating decision maker to allocate resources to the segments and
to assess their performance.
Since the strategy review in July 2013 the Group has identified
one operation and one reporting segment which is reported to the
Board of directors on a quarterly basis. The Board of directors is
considered to be the chief operating decision maker.
Adoption of new and revised standards
There are no IFRSs or IFRIC interpretations that are effective
for the first time for the financial period beginning 1 October
2019 that would be expected to have a material impact on the
Company. The new IFRSs adopted during the period are as
follows:
IFRS 16 - Leases
The following new standards, amendments to standards and
interpretations have been issued, but are not effective for the
financial period beginning 1 October 2019 and have not been early
adopted. The Directors anticipate that the adoption of these
standard and the interpretations in future periods will have no
material impact on the financial statements of the Company.
The new standards include:
IFRS 3 Business Combinations (amendments)(1)
IFRS 9 Financial instruments (amendments)(1)
IFRS 17 Insurance Contracts(2)
IAS 1 Presentation of Financial Statements (amendments)(1&3)
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors(1)
IAS 39 Financial instruments(1)
Amendments to conceptual framework (1)
1 Effective for annual periods beginning on or after 1 January
2020
2 Effective for annual periods beginning on or after 1 January
2021
3 Effective for annual periods beginning on or after 1 January
2022
The directors anticipate that the adoption of these standards
and interpretations in future periods will have no material effect
on the financial statements of the group. The adoption of IFRS 16
has no impact on the Group's financials. The only assets where the
Group acts as a lessee relates to headleases of properties, which
had been held as finance leases under IAS 17.
2. Property Operating Expenses
15 months Year ended
ended 31 30 September
December 2019
2020
----------------------------------- --------------
GBP000 GBP000
----------------------------------- --------------
Bad debt charge (1) (108)
----------------------------------- --------------
Head rent payments 37 11
----------------------------------- --------------
Head rent treated as interest (26) -
(Note 5)
----------------------------------- --------------
Repairs 27 211
----------------------------------- --------------
Business rates and council tax 32 25
----------------------------------- --------------
Irrecoverable service charge (3) 39
----------------------------------- --------------
Utilities (9) 109
----------------------------------- --------------
Insurance 12 36
----------------------------------- --------------
Managing agent fees 38 123
----------------------------------- --------------
Letting and review fees - 36
----------------------------------- --------------
Legal & professional 36 113
----------------------------------- --------------
EPC amortisation, Abortives, and
Misc 16 100
----------------------------------- --------------
Total property operating expenses 159 695
----------------------------------- --------------
3. Property Disposals
15 months
ended 31 Year ended
December 30 September
2020 2019
Number Number
Number of sales 2 66
------------------------------------ --------------
GBP000 GBP000
------------------------------------ --------------
Average value 177 287
------------------------------------ ========== ==============
Sales
------------------------------------ --------------
Total sales 355 18,955
------------------------------------ --------------
Carrying value (347) (18,616)
------------------------------------ --------------
Profit/(Loss) on disposals before
transaction costs 8 339
==================================== ========== ==============
Transaction costs
------------------------------------ --------------
Legal fees (4) (210)
------------------------------------ --------------
Agent fees, marketing and brochure
costs (3) (240)
------------------------------------ --------------
Disbursements - (8)
------------------------------------ --------------
Non recoverable VAT (on non-opted
and residential elements) - (29)
------------------------------------ --------------
Total transaction costs (7) (487)
==================================== ========== ==============
Profit/(Loss) on disposals after
transaction costs 1 (148)
------------------------------------ ---------- --------------
Transaction costs as percentage
of sales value 2.0% 2.6%
------------------------------------ ---------- --------------
Note: Both properties sold were classified as held for sale at
30 September 2019
4. Administrative Expenses
15 months
ended 31 Year ended
December 30 September
2020 2019
GBP000 GBP000
------------------------------------- --------------
Investment manager fees 18 320
------------------------------------- --------------
Legal and professional 163 952
------------------------------------- --------------
Tax and audit 42 96
------------------------------------- --------------
Remuneration Costs* 179 134
------------------------------------- --------------
Other 55 (14)
------------------------------------- --------------
Irrecoverable VAT on Administration
expenses ** 32 92
------------------------------------- --------------
Total administrative expenses 489 1,580
------------------------------------- --------------
*Remuneration costs include GBPNil (30 September 2019:
GBP 40,000) in respect of the expensing of employee share
options which vested in 2018 onwards or if liquidation
targets are met. This amount has a corresponding entry
in equity and has no impact on the Company's net assets
now or in the future.
Other than the Directors, the Company had one employee
during the period. Total number of employees during the
period was 3 (2019: 3).
Financials
The following fees have been paid to the Group's Auditors:
2020 2019
GBP000 GBP000
--------------------------------------------- --------- -------
Auditors' remuneration for audit services:
Audit of parent Company 17 22
Audit related assurance services - -
Statutory audit of subsidiaries 18 18
Auditors' remuneration for non-audit services:
Tax services - -
Other services supplied - -
5. Net Financing (Loss)/Income
15 months
ended 31 Year ended
December 30 September
2020 2019
GBP000 GBP000
---------- --------------
Interest receivable 3 49
---------- --------------
Financing income 3 49
---------- --------------
Bank facility fees - (6)
---------- --------------
Interest paid (7) -
---------- --------------
Loss on foreign exchange (57) -
---------- --------------
Finance lease depreciation (4) -
---------- --------------
Head rents treated as finance (26) -
leases (note 2)
---------- --------------
Financing expenses (94) (6)
---------- --------------
Net financing (loss)/income (91) 43
---------- --------------
6. Taxation
15 months
ended 31 Year ended
December 30 September
2020 2019
GBP000 GBP000
---------- --------------
Loss before tax (465) (1,874)
---------- --------------
Corporation tax in the UK of 20%
(2019: 20%) (93) (356)
---------- --------------
Effects of:
---------- --------------
Revaluation deficit and other
non-deductible items 65 220
---------- --------------
Deferred tax asset not recognised 28 136
---------- --------------
Total tax - -
---------- --------------
Factors that may affect future current and total tax charges
From 11 May 2007, the Group participated in the UK REIT tax
regime. As a result, the Group was exempt from corporation tax on
the profits and gains from its investment business from that date,
provided it met certain conditions. Non-qualifying profits and
gains of the Group (the residual business) continued to be subject
to corporation tax. The directors consider that all the rental
income post 11 May 2007 originates from the Group's tax-exempt
business whilst it participated in the UK REIT tax regime.
From the first closing date of the Company's share buy-back
tender offer on 16 September 2019, the Group no longer fulfilled
certain of the REIT tax regime conditions, principally owing to the
proportion of the Company's issued share capital that had thereby
come to be held by Thalassa Holdings Ltd. In consequence of this
and the Company's adoption of its new investment policy in
September 2020, it is considered that the Group is considered by HM
Customs & Revenue to have exited the REIT tax regime with
effect from 1 October 2018 and, from that date, is fully subject to
corporation tax. However, the Board believes that the Group's
activities since then and the availability of tax losses means that
the Company's activities are unlikely to have generated any
material corporation tax liability for periods since 1 October
2018. Accordingly, no provision for corporation tax has been made
in these accounts. The deferred tax asset not recognised relating
to these losses can be carried forward indefinitely. It is not
anticipated that sufficient profits from the residual business will
be generated in the foreseeable future to utilise the losses
carried forward and therefore no deferred tax asset has been
recognised in these accounts. The unprovided deferred tax asset at
31 December 2020 was GBP9.00m (2019: GBP9.09m).
7. Investment Properties
Freehold Leasehold
Investment Investment
----------- ----------- ---------
Properties Properties Total
----------- ----------- ---------
GBP000 GBP000 GBP000
----------- ----------- ---------
At 30 September 2018 - - -
----------- ----------- ---------
Additions 4 - 4
----------- ----------- ---------
Disposals - property (17,170) (1,446) (18,616)
----------- ----------- ---------
Reinstated - head leases - 369 369
----------- ----------- ---------
Fair value adjustments (68) (190) (258)
----------- ----------- ---------
Movement on Investment properties
held for sale 17,274 4,366 21,640
----------- ----------- ---------
At 30 September 2019 40 3,099 3,139
----------- ----------- ---------
Additions -
----------- ----------- ---------
Disposals - property - -
----------- ----------- ---------
Fair value adjustment - head leases (48) (48)
----------- ----------- ---------
Depreciation - head leases (4) (4)
----------- ----------- ---------
Fair value adjustments - property (325) (325)
----------- ----------- ---------
Movement on Investment properties -
held for sale
----------- ----------- ---------
At 31 December 2020 40 2,722 2,762
----------- ----------- ---------
Allsop LLP, a firm of independent chartered surveyors valued the
Group's property portfolio at 30 September 2018 and 31 March 2019.
On each of these dates Allsop LLP performed a full valuation of 25%
of the Group's properties (including site inspections) and a
desktop valuation of the remainder, such that all properties owned
by the Group are inspected and valued over the two-year period. The
valuations, using assumptions regarding yield rates, void levels
and comparable market transactions, were undertaken in accordance
with the Royal Institute of Chartered Surveyors Appraisal and
Valuation Standards on the basis of market value.
In July 2019 Allsop LLP provided a full valuation (including
site visits) on all the properties then held by the Group. In the
light of that valuation, for the 30 September 2019 financial
statements the Company had desktop valuations prepared by Allsop
LLP for all the properties in the portfolio at that date, except
for three properties which were considered to be held for sale and
were therefore valued at their expected sale price less sales
costs.
During the twelve months' period to 31 September 2020 sales were
completed on two properties considered at 30 September 2019 to be
held for sale.
The six property assets held at 30 September 2020 were valued at
that date by Allsop LLP. In line with the Company's established
valuation policy, two of the larger assets were subject to full
RICS valuations, including site inspections, with the remainder
subject to desktop updates of their previous carrying values.
In view of the proximity in time to the September valuations,
and the operational restrictions arising from the COVID-19
outbreak, the Directors did not consider it appropriate to carry
out a fresh valuation of the property portfolio at 31 December
2020. The properties contained in the portfolio therefore continue
to be recognised at 31 December 2020 at their holding value in the
Group's financial statements at 30 September 2020. The directors
consider that there has not been any significant change in values
between 30 September 2020 and 31 December 2020. Of the six
properties in the portfolio, one property is considered to be held
for sale and its holding value in the Company's accounts therefore
takes account of agreed pricing and sales costs. The directors
consider that there has not been any significant change in values
between 30 September 2020 and 31 December 2020.
Since the Balance Sheet date, no properties have exchanged
contracts for sale, been sold at auction or have completed sale
following an exchange of contracts during the period.
All rental income recognised in the Income Statement is
generated by the investment properties held and all direct
operating expenses incurred resulted from investment properties
that generated rental income.
No properties have been used as security for loans during the
periods or at the balance sheet date.
A reconciliation of the portfolio valuation to the total value
given in the Balance Sheet for investment properties is as
follows:
31 December 30 September
2020 2019
GBP000 GBP000
------------ -------------
Portfolio valuation 2,775 3,447
------------ -------------
Investment properties held for
sale (330) (677)
------------ -------------
Head leases treated as investment
properties held under finance
leases per IFRS 16 317 369
------------ -------------
Total per Balance Sheet 2,762 3,139
------------ -------------
8. Trade and Other Receivables
31 December 30 September
2020 2019
GBP000 GBP000
------------ -------------
Trade receivables 147 83
------------ -------------
Other receivables 8 189
------------ -------------
Prepayments 73 106
------------ -------------
228 378
------------ -------------
9. Cash
31 December 30 September
2020 2019
GBP000 GBP000
------------ -------------
Cash in the Statement of Cash
Flows 4,073 3,566
------------ -------------
10. Trade and Other Payables
31 December 30 September
2020 2019
GBP000 GBP000
------------ -------------
Trade payables 60 32
------------ -------------
Other taxation and social security 7 -
------------ -------------
Other payables (note 1) 157 203
------------ -------------
Accruals and deferred income 221 164
------------ -------------
Head lease liabilities 21 19
------------ -------------
Due to associated company (note 100 -
2)
------------ -------------
566 418
------------ -------------
1. Other payables include rent deposits held in respect of
commercial tenants of GBP0.063m (2019: GBP0.041m).
2. During the period Thalassa Holdings Limited paid certain
overhead costs on behalf of the Company. This balance is unsecured,
interest free, and has no fixed term of repayment.
11. Leasing
Lease Liabilities
Finance lease liabilities on head rents are payable as
follows:
Minimum
Lease Payment Interest Principal
GBP000 GBP000 GBP000
--------------- --------- ----------
At 30 September 2018 - - -
--------------- --------- ----------
Reinstated 3,074 (2,705) 369
--------------- --------- ----------
At 30 September 2019 3,074 (2,705) 369
--------------- --------- ----------
Movement in value (340) 292 (48)
--------------- --------- ----------
At 30 September 2020 2,734 (2,413) 321
--------------- --------- ----------
Short term liabilities 21 - 21
Long term liabilities 2,713 (2,413) 300
--------------- --------- ----------
Total 2,734 (2,413) 321
--------------- --------- ----------
In the above table, interest represents the difference between
the carrying amount and the contractual liability/cash flow.
All leases expire in more than five years.
12. Capital and Reserves
Share Capital
Number Amount
000s GBP000s
------------------------------------- ---------
Balance 1 October 2018 Ordinary
20p Shares 91,670 18,334
Converted to shares of 1p - (17,417)
Balance following court application 91,670 917
Shares bought back and cancelled (59,809) (598)
Balance 30 September 2019 Ordinary
1p shares 31,861 319
Balance 30 September 2020 Ordinary
1p shares 31,861 319
Of the shares bought back during the 2019 year, 59,177,398
shares were placed in treasury and cancelled during the year ended
30 September 2019. The balance of 631,058 shares were acquired
immediately prior to the year end and placed in treasury and
subsequently cancelled on 1 October 2019.
Investment in Own Shares
At the year-end, 9,164,017 shares were held in treasury (2019:
9,795,075), and at the date of this report 9,164,017 were held in
treasury.
Employee Benefit Trust ("EBT")
The shares held by the Company's Employee Benefit Trust were
fully distributed in 2018 and the Trust was subsequently wound
up.
Reserves
The value of shares issued to purchase Gilfin Property Holdings
Limited ("Gilfin") in excess of their nominal value was previously
shown as a separate reserve in accordance with the Companies Act
2006. Following the commencement of liquidation of Gilfin in March
2019 and a distribution from the liquidator of GBP 2.1m this
reserve was released by transfer to distributable reserves.
Capital Redemption Reserve
The brought forward capital redemption reserve arose in prior
years on the cancellation of 8,822,920 Ordinary 20p Shares.
As part of the share buy-back arrangement described above, this
reserve was released by Court permission to distributable reserves.
Following the purchase by the Company of 59,808,456 of its 1p
shares, a capital redemption reserve in the sum of GBP598,084 was
established.
Calculation of Net Asset Value Per Share (NAV)
2020 2019
GBP000s GBP000s
----------------------------------- --------
Net Assets 6,527 6,992
2020 2019
Number Number
000s 000s
----------------------------------- --------
Alloted, called up and fully paid
shares 31,861 31,861
----------------------------------- --------
Treasury shares (9,164) (9,795)
----------------------------------- --------
Number of shares 22,697 22,697
----------------------------------- --------
NAV per share 29p 31p
----------------------------------- --------
13.Dividends
No dividends were paid during the current and previous year.
14. Earnings Per Share
Basic Earnings Per Share
The calculation of basic earnings per share was based on the
profit attributable to Ordinary Shareholders and a weighted average
number of Ordinary Shares outstanding, calculated as follows:
15 months
ended 31 Year ended
December 30 September
2020 2019
GBP000 GBP000
---------- --------------
Loss for the period (GBP'000) (465) (1,874)
---------- --------------
Weighted average number of shares
(000s) 31,861 89,395
---------- --------------
Treasury shares (000s) (9,164) (9,795)
---------- --------------
Effective weighted average number
of shares (000s) 22,697 80,231
---------- --------------
Loss) per share (pence) (2.05) (2.34)
---------- --------------
Diluted loss per share (pence) (2.05) (2.34)
---------- --------------
As the Company is loss making, all potentially dilutive items
are considered anti-dilutive, and so are disregarded in the diluted
loss per share calculation.
15. Financial Instruments and Risk Management
The Board of directors has overall responsibility for the
establishment and oversight of the Group's risk management
framework.
As described in the Corporate Governance report, this
responsibility has been assigned to the executive directors with
support and feedback from the Audit Committee. The Audit Committee
oversees how management monitors compliance with the Group's risk
management policies and procedures and reviews the adequacy of the
risk management framework in relation to the risks faced by the
Group.
The Group has identified exposure to the following financial
risks from its use of financial instruments: capital management
risk, market risk, credit risk and liquidity risk.
Capital Management Risk
The Group's capital consists of cash and equity attributable to
the shareholders. Following repayment of the bank borrowing, the
Board do not consider there is any material capital management risk
exposure.
Market Risk
Market risk is the risk that changes in market conditions, such
as interest rates, foreign exchange rates and equity prices, will
affect the Group's profit or loss and cash flows. The Group's
exposure to market risks was restricted to interest rate risk only.
Following repayment of the bank borrowing, the Board do not
consider there is any material market risk exposure.
The Group does not speculate in financial instruments, which in
the past have only been used to limit exposure to interest rate
fluctuations.
Sensitivity Analysis
IFRS 7 requires an illustration of the impact on the Group's
financial performance of changes in interest rates. The following
sensitivity analysis has been prepared in accordance with the
Group's existing accounting policies and considers the impact on
the Income Statement and on equity of an increase of 100 basis
points (1%) in interest rates. As interest rates were below 1% in
the current and previous year, it has not been possible to consider
the impact of a decrease of 100 basis points on interest income and
expense as it would result in a negative rate of interest.
Therefore, the impact of a fall in interest rates has been
restricted to a floor of 0%. All other variables remain the same
and any consequential tax impact is excluded.
Actual results in the future may differ materially from these
assumptions and, as such, these tables should not be considered as
a projection of likely future gains and losses.
15 months ended 31 December Year ended 30 September
2020 2019
------------------------------------------
Impact on Income Impact on Equity Impact on Income Impact on Equity
-------------------- -------------------- -------------------- --------------------
Increase Decrease Increase Decrease Increase Decrease Increase Decrease
by 1% to 0% by 1% to 0% by 1% to 0% by 1% to 0%
Impact on
Interest
Income and
expenses
in GBP000s +8 nil +8 nil +138 nil +138 nil
Fair value measurements recognised in the statement of financial
position
Investment properties and Investment properties held for sale
are measured subsequent to initial recognition at fair value and
have been group as Level 3 (2019: level 3) based on the degree to
which fair value is observable.
- Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets and
liabilities;
- Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices); and
- Level 3 fair value measurements are those derived from
valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable
inputs).
Investment properties have been valued using the investment
method which involves applying a yield to rental income
streams.
Inputs include equivalent yield, tenancy information, and
leasing assumptions. Valuation reports are based on both
information provided by the Company e.g. tenancy information
including current rents, which are derived from the Company's
financial and property management systems and are subject to the
Company's overall control environment, and assumptions applied by
the valuers e.g. ERVs, and yields. These assumptions are based on
market observation and the valuers' professional judgement.
An increase/decrease in equivalent yields will decrease/increase
valuations, and an increase or decrease in rental values will
increase or decrease valuations. Other inputs include ERVs, and
likely void and rent-free periods. There are interrelationships
between these inputs as they are determined by market conditions.
The valuation movement in a period depends on the balance of those
inputs.
Below is a sensitivity analysis of the impact of a 1% increase
or decrease in equivalent yields on income and equity. Actual
results may differ materially from these assumptions and, as such,
these tables should not be considered as a projection of likely
future gains and losses.
15 months ended 31 December Year ended 30 September 2019
2020
------------------------------------------
Impact on Income Impact on Equity Impact on Income Impact on Equity
-------------------- -------------------- -------------------- --------------------
Increase Decrease Increase Decrease Increase Decrease Increase Decrease
by 1% by 1% by 1% by 1% by 1% by 1% by 1% by 1%
Impact
in GBP000s (176) 204 (176) 204 (237) 278 (237) 278
--------- --------- --------- --------- --------- --------- --------- ---------
Below is a sensitivity analysis of the impact of a 1% increase
or decrease in foreign exchange rates on income and equity. Actual
results may differ materially from these assumptions and, as such,
these tables should not be considered as a projection of likely
future gains and losses.
15 months ended 31 December
2020 Year ended 30 September 2019
------------------------------------------
Impact on Income Impact on Equity Impact on Income Impact on Equity
-------------------- -------------------- -------------------- --------------------
Increase Decrease Increase Decrease Increase Decrease Increase Decrease
by 1% by 1% by 1% by 1% by 1% by 1% by 1% by 1%
Impact
on Interest
Income
and expenses
in GBP000s 35 (35) 35 (35) N/A N/A N/A N/A
Credit Risk
Credit risk is the risk of financial loss to the Group if a
tenant, bank or counterparty to a financial instrument fails to
meet its contractual obligations and arises principally from the
Group's receivables from tenants, cash and cash equivalents held by
the Group's bankers and derivative financial instruments entered
into with the Group's bankers.
Trade and Other Receivables
The Group's exposure to credit risk is influenced mainly by the
individual characteristics of each tenant. At 31 December 2020 the
Group had over 60 letting units in six properties. There is no
significant concentration of credit risk due to the large number of
small balances owed by a wide range of tenants who operate across
all retail sectors. There is no concentration of credit risk in any
one geographic area of the UK. The level of arrears is monitored
monthly by the Group on a tenant by tenant basis.
Cash, Cash Equivalents and Derivative Financial Instruments
One major UK bank provides the majority of the banking services
used by the Group.
The Group's financial assets which are exposed to credit risk
are classified as follows and are shown with their fair value:
31 December 2020
Total
Available At Amortised Carrying At
Fair
For Sale Cost Amount Value
GBP000 GBP000 GBP000 GBP000
---------- ------------- ---------- --------
Cash and cash equivalents 4,073 - 4,073 4,073
---------- ------------- ---------- --------
Trade receivables - 147 147 147
---------- ------------- ---------- --------
Other receivables - 8 8 8
---------- ------------- ---------- --------
4,073 155 4,228 4,228
---------- ------------- ---------- --------
30 September 2019
Total
Available At Amortised Carrying At
Fair
For Sale Cost Amount Value
GBP000 GBP000 GBP000 GBP000
---------- ------------- ---------- --------
Cash and cash equivalents 3,566 -- 3,566 3,566
---------- ------------- ---------- --------
Trade receivables - 83 83 83
---------- ------------- ---------- --------
Other receivables - 189 189 189
---------- ------------- ---------- --------
3,566 272 3,838 3,838
---------- ------------- ---------- --------
For all classes of financial assets, the carrying amount is a
reasonable approximation of fair value.
At 31 December 2020 At 30 September 2019
----------------------------------
After After
Total Impairment Impairment Total Impairment Impairment
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------- ----------- ------------ ------- ----------- ------------
Not yet due 58 58 22 22
------- ----------- ------------ ------- ----------- ------------
Past due by one
to 30 days 51 51 32 32
------- ----------- ------------ ------- ----------- ------------
Past due by 30-60
days 2 2 5 5
------- ----------- ------------ ------- ----------- ------------
Past due by 60-90
days 4 4 3 3
------- ----------- ------------ ------- ----------- ------------
Past due by 90
days 141 (109) 32 196 (175) 21
------- ----------- ------------ ------- ----------- ------------
256 (109) 147 258 (175) 83
Impairment as
percentage of
total debt 42.58% 67.83%
------------ -------
Trade receivables that are not impaired are expected to be
recovered.
The movement in the trade receivables' impairment allowance
during the year was as follows:
15 months
ended 31 Year ended
December 30 September
2020 2019
GBP000 GBP000
---------- --------------
Balance at beginning of period 175 647
---------- --------------
Impairment loss (credited)/recognised (66) (272)
---------- --------------
Trade receivables written off - (200)
---------- --------------
Balance at end of year 109 175
---------- --------------
The impairment loss recognised relates to the movement in the
Group's assessment of the recoverability of outstanding trade
receivables.
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Group's
approach to managing liquidity risk is to ensure, as far as
possible, that it will always have adequate resources to meet its
liabilities when they fall due for both the operational needs of
the business and to meet planned future investments. This position
is formally reviewed on a quarterly basis or more frequently should
events require it.
The Group's financial liabilities are classified and are shown
with their fair value as follows:
31 December 2020
At Amortised Total Carrying At
Cost Amount Fair Value
------------- --------------- -----------
GBP000 GBP000 GBP000
------------- --------------- -----------
Finance lease liabilities 321 321 321
------------- --------------- -----------
Trade payables 60 60 60
------------- --------------- -----------
Other payables 164 164 164
------------- --------------- -----------
Due to associated company 100 100 100
------------- --------------- -----------
Accruals 221 221 221
------------- --------------- -----------
866 866 866
------------- --------------- -----------
30 September 2019
At Total At
Amortised Carrying Fair Value
Cost Amount -
GBP000 GBP000 GBP000
---------- --------- -----------
Finance lease liabilities 368 368 368
---------- --------- -----------
Trade payables 32 32 32
---------- --------- -----------
Other payables 203 203 203
---------- --------- -----------
Accruals 164 164 164
---------- --------- -----------
767 767 767
---------- --------- -----------
For all classes of financial liabilities, the carrying amount is
a reasonable approximation of fair value.
The maturity profiles of the Group's financial liabilities are
as follows:
31 December 2020
Contractual Within One Two Three Four Over
to
Carrying Cash One Two to Three to Four to Five Five
Value Flows Year Years Years Years Years Years
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------- ------------ ------- ------- --------- -------- -------- -------
Finance lease
liabilities 321 3,055 19 19 19 19 19 2,960
--------- ------------ ------- ------- --------- -------- -------- -------
Trade payables 60 60 60
--------- ------------ ------- ------- --------- -------- -------- -------
Other payables 164 164 164
--------- ------------ ------- ------- --------- -------- -------- -------
Due to associated
company 100 100 100
--------- ------------ ------- ------- --------- -------- -------- -------
Accruals 221 221 221
--------- ------------ ------- ------- --------- -------- -------- -------
866 3,600 564 19 19 19 19 2,960
--------- ------------ ------- ------- --------- -------- -------- -------
30 September 2019
Contractual Within One Two Three Four Over
Carrying Cash One to Two to Three to Four to Five Five
Value Flows Year Years Years Years Years Years
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------- ------------ ------- ------- --------- -------- -------- -------
Finance lease
liabilities 368 3,074 19 19 19 19 19 2,979
--------- ------------ ------- ------- --------- -------- -------- -------
Trade payables 32 32 32
--------- ------------ ------- ------- --------- -------- -------- -------
Other payables 203 203 203
--------- ------------ ------- ------- --------- -------- -------- -------
Accruals 164 164 164
--------- ------------ ------- ------- --------- -------- -------- -------
767 3,473 418 19 19 19 19 2,979
--------- ------------ ------- ------- --------- -------- -------- -------
Contractual cash flows include the undiscounted committed
interest cash flows and, where the amount payable is not fixed, the
amount disclosed is determined by reference to the conditions
existing at the year end.
16. Operating Lease as Lessor
The investment properties are let under operating leases. Future
minimum lease payments receivable by the Group under
non-cancellable operating leases are receivable as follows:
31 December 30 September
2020 2019
GBP000 GBP000
------------ -------------
Less than one year 320 352
------------ -------------
Between one and five years 870 875
------------ -------------
More than five years 478 561
------------ -------------
1,668 1,788
------------ -------------
17. Capital Commitments
Provision has been made for further anticipated expenditure on
the properties as 31 December 2020 and 30 September 2019. No
capital expenditure was planned at the balance sheet date.
18. Related Parties
Transactions with Key Management Personnel
The only transactions with key management personnel relate to
remuneration which is set out in the Remuneration Report.
The key management personnel of the Group for the purposes of
related party disclosures under IAS 24 comprise all executive and
non-executive directors.
As at the year end the Group owed GBP99,700 (2019: GBPNil) to
Thalassa Holdings Limited ("Thalassa"), a company under common
directorship. The bulk of this sum related to legal fees settled by
Thalassa but payable by the Group. The remained related to
accounting and registered office services supplied to the Group by
Thalassa at cost. The total amount is treated as an unsecured,
interest free loan made repayable on demand.
See also Note 20: Significant Contracts.
19. Group Entities
All the below companies are incorporated in the United Kingdom
and 100% owned at 31 December 2020 and 30 September 2019
NOS 4 Limited
NOS 5 Limited
NOS 6 Limited
NOS 7 Limited
NOS Holdings Limited (incorporated
12 February 2020)
Gilfin Property Holding Limited (in
liquidation)
LSR Trustee Limited (struck off on 12 January 2020)
20. Significant contracts
With effect from 22 July 2013 the Company entered into a
management agreement with Internos Global Investors Limited
("Internos"), which subsequently changed its name to Principal Real
Estate (Europe) Limited ("Principal"). Under this agreement the
Company paid to Internos/Principal:
-- An annual management fee of 0.70% of the gross asset value of
the portfolio, subject to a minimum fee of GBP1m in each of the
first two years, GBP0.95m for the third year and GBP0.9m for the
fourth year.
-- An annual performance fee of 20% of the recurring operating
profits above a pre-agreed target recurring profit.
-- Fees for cumulative property sales as follows:
Up to GBP50m nil
GBP50m-GBP150m 0.5% of sales
Over GBP150m 1.0% of sales
The management agreement also provided for payment of a terminal
fee equivalent to 5.7% of cash returned to the Company's
shareholders in excess of a Terminal Fee Hurdle, subject to annual
escalation of the Terminal Fee Hurdle. As at the 2019 year end the
hurdle stood at 57.3p per share. During the year ended 30 September
2019, Principal gave notice to terminate the management agreement.
Accordingly, no terminal fee was payable.
Under the terms of the agreement Principal received fees during
the period of GBP0.018m (2019: GBP0.320m).
21. Contingent liabilities
A potential repair obligation at one of the Company's properties
is currently under investigation, including the extent to which the
relevant group company may be required to underwrite such costs as
may arise and the extent to which the tenants of the property are
liable to contribute to such costs under the terms of their tenancy
agreements.
22. Controlling party
At 30 September 2019 the ultimate group in which the results
were consolidated was Thalassa Holdings Limited, which was also the
controlling party of the Company.
In October 2020 The Local Shopping REIT plc resolved to change
its name to Alina Holdings PLC and shortly thereafter Thalassa
Holdings Limited disposed of its controlling interest in Alina
Holdings PLC.
Accordingly, at 31 December 2020 the Company had no ultimate
controlling party..
The consolidated financial statements of both Alina Holdings PLC
(formerly The Local Shopping REIT plc) and Thalassa Holdings
Limited are available to the public and may be obtained from:
Eastleigh Court
Bishopstrow
Warminster
BA12 9HW
Company Balance Sheet as at 31 December 2020 with comparatives
as at 30 September 2019
2020 2019
------- -------
Note GBP000 GBP000 GBP000 GBP000
------ ------- ------- ------- -------
Fixed assets
------ ------- ------- ------- -------
Investments C2 3,105 3,277
------ ------- ------- ------- -------
3,105 3,277
----------------------------------- ------- ------- ------- -------
Current assets
------ ------- ------- ------- -------
Debtors C3 262 764
------ ------- ------- ------- -------
Cash 3,575 3,127
------- ------- ------- -------
3,837 3,891
----------------------------------- ------- ------- ------- -------
Creditors: Amounts falling
due within one year C4 (462) (178)
------ ------- ------- ------- -------
Net current assets 3,375 3,713
------- ------- ------- -------
Total assets less current
liabilities 6,480 6,990
------- ------- ------- -------
Creditors: Amounts falling - -
due after one year
------ ------- ------- ------- -------
Net assets 6,480 6,990
------- ------- ------- -------
Capital and reserves
Share capital C5 319 319
------ ------- ------- ------- -------
Reserves C5 - -
------ ------- ------- ------- -------
Capital redemption reserve C5 598 598
------ ------- ------- ------- -------
Profit and loss account C5 5,563 6,073
------ ------- ------- ------- -------
Shareholders' funds 6,480 6,990
------- ------- ------- -------
The Company has taken advantage of Section 408 of the Companies
Act 2006 and has not included its own profit and loss account in
these financial statements. The Company's loss for the period was
GBP0.510m (12 months to 30 September 2019: GBP1.236m).
These financial statements were approved by the Board of
directors on 7 June 2021 and were signed on its behalf by:
C D Soukup
Director
The registered number of the Company is 05304743.
Notes to the Financial Statements
C1. Accounting Policies
These financial statements were prepared in accordance with
Financial Reporting Standard 102 The Financial Reporting Standard
applicable in the UK ("FRS 102") as issued in March 2018. The
presentation currency of these financial statements is sterling.
All amounts in the financial statements have been rounded to the
nearest GBP1,000.
The consolidated financial statements of Alina Holdings PLC
(formerly The Local Shopping REIT plc) are prepared in accordance
with International Financial Reporting Standards as adopted by the
EU and are available to the public. In these financial statements,
the company is considered to be a qualifying entity (for the
purposes of this FRS) and has applied the exemptions available
under FRS 102 in respect of the following disclosures:
-- Reconciliation of the number of shares outstanding from the beginning to end of the period;
-- Cash Flow Statement and related notes; and
-- Key Management Personnel compensation.
As the consolidated financial statements include the equivalent
disclosures, the Company has also taken the exemptions under FRS
102 available in respect of the following disclosures:
-- Certain disclosures required by FRS 102.26 Share Based Payments; and,
-- The disclosures required by FRS 102.11 Basic Financial
Instruments and FRS 102.12 Other Financial Instrument Issues in
respect of financial instruments not falling within the fair value
accounting rules of Paragraph 36(4) of Schedule 1.
The Company proposes to continue to adopt the reduced disclosure
framework of FRS 102 in its next financial statements.
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in these
financial statements.
There were no judgements made by the directors, in the
application of these accounting policies that have significant
effect on the financial statements, with a significant risk of
material adjustment in the next year.
Measurement convention
The financial statements are prepared on the historical cost
basis.
Classification of financial instruments issued by the
Company
In accordance with FRS 102.22, financial instruments issued by
the Company are treated as equity only to the extent that they meet
the following two conditions:
(a) they include no contractual obligations upon the company to
deliver cash or other financial assets or to exchange financial
assets or financial liabilities with another party under conditions
that are potentially unfavourable to the company; and
(b) where the instrument will or may be settled in the company's
own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the company's own
equity instruments or is a derivative that will be settled by the
company's exchanging a fixed amount of cash or other financial
assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of
issue are classified as a financial liability. Where the instrument
so classified takes the legal form of the company's own shares, the
amounts presented in these financial statements for called up share
capital and share premium account exclude amounts in relation to
those shares.
Basic financial instruments
Trade and other creditors are recognised initially at
transaction price plus attributable transaction costs. Subsequent
to initial recognition, they are measured at amortised cost, less
any impairment losses in the case of trade debtors. If the
arrangement constitutes a financing transaction, for example if
payment is deferred beyond normal business terms, then it is
measured at the present value of future payments discounted at a
market rate of instrument for a similar debt instrument.
Investments in subsidiaries
These are separate financial statements of the company.
Investments in subsidiaries are carried at cost less
impairment.
Judgements and Estimates
In testing for impairment, management assesses the recoverable
amount of investments and inter-company debtors by reference to the
subsidiaries' net assets and their ability to recover these
assets.
Provisions
A provision is recognised in the balance sheet when the Company
has a present legal or constructive obligation as a result of a
past event, that can be reliably measured and it is probable that
an outflow of economic benefits will be required to settle the
obligation. Provisions are recognised at the best estimate of the
amount required to settle the obligation at the reporting date.
Where the Company enters into financial guarantee contracts to
guarantee the indebtedness of other companies within its group, the
company treats the guarantee contract as a contingent liability
until such time as it becomes probable that the company will be
required to make a payment under the guarantee.
Interest receivable and Interest payable
Interest payable and similar charges include interest payable,
finance charges on shares classified as liabilities and finance
leases recognised in profit or loss using the effective interest
method, unwinding of the discount on provisions, and net foreign
exchange losses that are recognised in the profit and loss
account.
Taxation
Tax on the profit or loss for the year comprises current and
deferred tax. Tax is recognised in the profit and loss account
except to the extent that it relates to items recognised directly
in equity or other comprehensive income, in which case it is
recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the
taxable income or loss for the year, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment
to tax payable in respect of previous years.
Deferred tax is provided on timing differences which arise from
the inclusion of income and expenses in tax assessments in periods
different from those in which they are recognised in the financial
statements. The following timing differences are not provided for:
differences between accumulated depreciation and tax allowances for
the cost of a fixed asset if and when all conditions for retaining
the tax allowances have been met; and differences relating to
investments in subsidiaries to the extent that it is not probable
that they will reverse in the foreseeable future and the reporting
entity is able to control the reversal of the timing difference.
Deferred tax is not recognised on permanent differences arising
because certain types of income or expense are non-taxable or are
disallowable for tax or because certain tax charges or allowances
are greater or smaller than the corresponding income or
expense.
Deferred tax is measured at the tax rate that is expected to
apply to the reversal of the related difference, using tax rates
enacted or substantively enacted at the balance sheet date.
Deferred tax balances are not discounted.
Unrelieved tax losses and other deferred tax assets are
recognised only to the extent that is it probable that they will be
recovered against the reversal of deferred tax liabilities or other
future taxable profits.
C2. Fixed Asset Investments
Shares in
Group
Undertakings Total
GBP000 GBP000
------------- ----------
Cost
------------- ----------
At 30 September 2019 108,605 108,605
------------- ----------
Disposals - -
------------- ----------
At 31 December 2020 108,605 108,605
------------- ----------
Provisions
------------- ----------
At 30 September 2019 (105,328) (105,328)
------------- ----------
Impairment charge for15 month
period (172) (172)
------------- ----------
Disposals - -
------------- ----------
At 31 December 2020 (105,500) (105,500)
------------- ----------
Net book value
------------- ----------
At 31 December 2020 3,105 3,105
------------- ----------
At 30 September 2019 3,277 3,277
------------- ----------
An impairment review of the carrying value of the Company's
investments in its subsidiary undertakings has been performed. In
carrying out this review, the directors had due regard to the
nature of the property investments held, which is commensurate with
the funding arrangements in place. On the basis of this review
which included a review of the underlying assets of the individual
subsidiaries the directors have written down the value of
investments in subsidiary undertakings to their estimated
realisable value.
The companies in which the Company's interests at the period end
were more than 20% are as follows:
Nature Ownership
of business interest*
---------------------------- --------------- -----------
Property
NOS 4 Limited** investment 100%
Property
NOS 5 Limited** investment 100%
Property
NOS 6 Limited** investment 100%
Property
NOS 7 Limited ** investment 100%
NOS Holdings Limited Non Trading 100%
Gilfin Property Holding Property
Limited*** investment 100%
* All interests are
in Ordinary Shares.
** Registered office:
65 Grosvenor Street
London WiK 3JH
***In liquidation - Registered office:
No 2 Lochrin Square, 96 Fountainbridge,
Edinburgh,EH3 9QA
C3. Debtors
2020 2019
GBP000 GBP000
------- -------
Amounts owed by Group undertakings* 260 708
------- -------
Other debtors - 47
------- -------
Prepayments 2 9
------- -------
262 764
------- -------
Amounts owed by group undertakings are interest free and
repayable on demand
C4. Creditors
2020 2019
GBP000 GBP000
------- -------
Trade creditors 36 2
------- -------
Amounts owed to Group undertakings 225 72
------- -------
Amounts owed to related party 100 -
------- -------
Other creditors 1 -
------- -------
Accruals 100 104
------- -------
462 178
------- -------
Amounts owed to group undertakings are interest free and
repayable on demand
C5. Reconciliation of Shareholders' Funds
Share Capital
2020 2019
Ordinary 1p Shares Ordinary 20p Shares
Number Amount Number Amount
000 GBP000 000 GBP000
Allotted, called
up and fully paid 31,861 319 31,861 319
-------------------- ------- ----- ------- -------- ----- -------
As explained in note 12 to the Consolidated Financial
Statements, the 20p shares were converted to 1p nominal value, and
59.809m shares bought and cancelled by the Company .
Investment in Own Shares
At the year-end, 9,164,017 shares were held in treasury (2019:
9,795,075), and at the date of this report 9,164,017 were held in
treasury.
Statement of Changes in Equity for the 15 months ended 31
December 2020
Profit
Capital and
Loss
Share Redemption Account
Capital Reserves Reserve - Total
GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------- --------- --------- ----------- --------- ---------
At 30 September 2018 18,334 3,742 1,764 3,253 27,093
-------------------------------- --------- --------- ----------- --------- ---------
Capital reduction (17,417) 17,417 -
--------- --------- ----------- --------- ---------
Transfer of capital reserves
to revenue (3,742) (1,764) 5,506 -
--------- --------- ----------- --------- ---------
Cost of own shares acquired (598) (18,309) (18,907)
--------- --------- ----------- --------- ---------
Creation of capital redemption
reserve 598 (598)
--------- --------- ----------- --------- ---------
Share-based payments - - 40 40
--------- --------- ----------- --------- ---------
Loss for the financial
year - - (1,236) (1,236)
-------------------------------- --------- --------- ----------- --------- ---------
At 30 September 2019 319 - 598 6,073 6,990
-------------------------------- --------- --------- ----------- --------- ---------
Loss for the financial
period - - (510) (510)
-------------------------------- --------- --------- ----------- --------- ---------
At 31 December 2020 319 - 598 5,563 6,480
-------------------------------- --------- --------- ----------- --------- ---------
As explained in the notes to the Statement of changes in Equity
on page 36 of the consolidated financial statements during the year
to 30 September 2019 year, the Company underwent a Court approved
restructure of capital and buy back of shares. Under this action
the issued 20p shares were converted to 1p; capital reserves were
transferred to distributable reserves; 59,808,456 shares were
repurchased, and a new Capital Redemption Reserve of GBP0.598m was
established.
C6. Controlling party
Please refer to note 22 in the Group financial statements
Glossary
Earnings Per Share ("EPS")
EPS is calculated as profit attributable to shareholders divided
by the weighted average number of shares in issue in the year.
Equivalent Yield
Equivalent yield is a weighted average of the initial yield and
reversionary yield and represents the return a property will
produce based upon the timing of the income received. In accordance
with usual practice, the equivalent yields (as determined by the
Group's external valuers) assume rent received annually in arrears
and on gross values including prospective purchasers' costs
(including stamp duty, and agents' and legal fees).
Head Lease
A head lease is a lease under which the Group holds an
investment property.
Initial Yield
Initial yield is the annualised net rent generated by a property
expressed as a percentage of the property valuation. In accordance
with usual practice the property value is grossed up to include
prospective purchasers' costs.
Like-for-like Market Rent
This is the Market Rent for the Group's investment properties at
the end of the financial year compared with the Market Rent for the
same properties at the end of the prior year, i.e. excluding the
Market Rent of those properties disposed of during the interim
period.
Like-for-like rental income
This is the rental income for the Group's investment properties
at the end of the financial year compared with the rental income
for the same properties at the end of the prior year, i.e.
excluding rental income of those properties disposed of during the
interim period.
Market Value
Market value is the estimated amount for which a property should
exchange on the date of valuation between a willing buyer and
willing seller in an arm's length transaction after proper
marketing wherein the parties had each acted knowledgeably,
prudently and
without compulsion.
Market Rent
Market rent is the estimated amount for which a property should
lease on the date of valuation between a willing lessor and a
willing lessee on appropriate lease terms, in an arm's length
transaction, after proper marketing wherein the parties had each
acted knowledgeably, prudently and without compulsion.
Net Asset Value ("NAV") per share
NAV per share is calculated as shareholders' funds divided by
the number of shares in issue at the year-end excluding treasury
shares.
Real Estate Investment Trust ("REIT")
A REIT is a listed property company which qualifies for and has
elected to join the UK REIT tax regime, which exempts qualifying UK
property rental income and gains on investment property disposals
from corporation tax. The Group converted to REIT status on 11 May
2007 and left the REIT tax regime on 1 October 2018.
Reversionary Yield
Reversionary yield is the annualised net rent that would be
generated by a property if it were fully let at market rent
expressed as a percentage of the property valuation. In accordance
with usual practice the property value is grossed up to include
prospective purchasers' costs.
Shareholder Information
Alina Holdings PLC
Registration Number: 05304743
Website: www.alina-holdings.com
London Stock Exchange Stock Code: ALNA
LEI: 213800SOAIB9JVCV4D57
Registered Office
Eastleigh Court,
Bishopstrow
Warminster
BA12 9HW
Directors
Gareth Maitland Edwards
Charles Duncan Soukup
Company Secretary
William Heaney
Solicitors
Locke Lord LLP
201 Bishopsgate
Spitalfields
London
EC2M 3AB
Eversheds Sutherland LLP
1 Callaghan Square
Cardiff
CF10 5BT
DWF LLP
No. 2 Lochrin Square
96 Fountainbridge
Edinburgh
EH3 9QA
Auditors
Jeffreys Henry LLP
Finsgate
5-7 Cranwood Street
London
EX1V 9EE
Valuer
Allsop LLP
33 Wigmore Street
London
W1U 1BZ
Tax Adviser
Tax Innovations Ltd
180 Piccadilly
London
W1J 9HF
Registrar
Equiniti Limited
Aspect House
Spencer Street
Lancing
BN99 6QQ
Principal Bankers
HSBC Bank plc
Level 6
71 Queen Victoria Street
London
EC4V 4AY
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