RNS Number : 8929D
Inland ZDP PLC
29 October 2015
 



 

INLAND ZDP PLC

 

AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2015

 

Chairman's Statement

 

I am pleased to present the company's annual report and financial statements for the year ended 30 June 2015.

 

The company is a wholly owned subsidiary of Inland Homes 2013 Limited and was established solely for the purpose of issuing and redeeming ZDP shares.  8,500,000 and 849,900 ZDP shares were issued on 14 December 2012 at 100p per share and 23 January 2013 at 103p per share respectively.  A further issue of 934,900 ZDP shares took place on 14 March 2014 at 118.5p per share.  They will redeem on 10 April 2019 at a price of 155.9p per ZDP share giving a redemption yield of 7.3% per annum on the first placing, 6.92% per annum on the second and 5.57% per annum on the third.  The proceeds of the ZDP share issues were lent to Inland Homes 2013 Limited for use in future investment opportunities.

 

The results for the period are shown in the financial statements on pages 12 to 20.  As at 30 June 2015 the ZDP share price was 132.75p (2014: 124.00p), representing a premium of 10.36% (2014: 11.4%) over the net asset value per ZDP share of 120.29p (2014: 111.34p).

 

The loan and contribution agreements between the company and Inland contain certain protections for the company which are intended to benefit its ZDP shareholders.  These include first charges over pledged assets (property) and pledged cash in a charged bank account.  The pledged assets must have a book value of at least 120% of the accrued value of the ZDP shares net of the pledged cash.  As at 30 June 2015, the accrued amount due to ZDP shareholders was £12,371,867 (2014: £11,451,154), the pledged cash was £21,000,000 (2014: £10,471,000) and the pledged assets had a book value of £18,769,671 (2014: £20,746,770), thereby satisfying this requirement.

 

The loan agreement also contained two covenants relating to asset cover and gearing, both of which are shown below as at 30 June 2015.  The definitions of Assets and Financial Indebtedness are set out in the prospectus published in connection with the issue of the ZDP shares which is available at www.inlandhomes.co.uk/inland-zdp-plc.

 

Asset cover ratio:

Assets/Financial Indebtedness plus ZDP Final Redemption Liability = 3.8 times cover.

The Cover Ratio should be in excess of 1.8 times, so this test was satisfied as at 30 June 2015.

 

Gearing:

Financial Indebtedness plus ZDP accrued liability / Assets 21.5%.

The gearing ratio should not exceed 40% so this covenant was also satisfied at 30 June 2015.

 

The board believes that the use of book values is generally conservative, because a substantial proportion of the group's assets are properties for which planning consents are sought.  The planning process takes time and any progress towards reaching the stage when building can commence is not reflected in an increase in the book values beyond the costs attributable to the relevant sites, whereas any diminution in value is reflected by way of impairment provisions, such that planning gains are not generally recognised in Inland's financial statements until sales are contracted.  If the covenant ratios were to be calculated by reference to the market values of the assets, the cover would be higher and the gearing low

 

 

The Board was disappointed by Morningstar's decision to cease their regular publication of financial statistics relating to the ZDP Shares.  The Company publishes the accrued value, Asset Cover and gearing ratio statistics for the ZDP Shares as at the end of March, June, September and December in each year.  At 30 June 2015, the Inland Group's Assets (as defined for the Asset Cover ratio) were £147.64m (2014 £97.40m) and its Financial Indebtedness was £38.57 m (2014 £33.29m) resulting in an Asset Cover ratio of 3.8 times (2014 2.9 times).  Details of how the Asset Cover Ratio is determined are set out in the Prospectus for the ZDP Shares dated 14 December 2012, which is available at www.inlandhomes.co.uk.

 

 

Nishith Malde

Chairman

Date

 


Audited Statement of Comprehensive Income

For the year ended 30 June 2015







Year ended

Year ended



30 June 2015

 30 June 2014

Continuing operations

Note

£000

£000

Revenue




Interest income

2

820

723

Total income


820

723





Expenditure




Expenses

3

-

-

Total expenditure


-

-

Profit before finance costs and taxation


820

723





Finance costs

4

(820)

(723)

Profit before tax


-

-

Income tax

5

-

-

Profit for the year and total comprehensive income


-

-

Earnings per share for profit attributable to the equity holders of the company during the year

6

0.0p

0.0p

 

 

Audited Statement of Financial Position

As at 30 June 2015

 



2015

2014


Note

£000

£000





Non-current assets




Intercompany receivable

9,11

12,422

11,602



12,422

11,602

Creditors: amounts falling due after more than one year




Zero Dividend Preference Shares

7

(12,372)

(11,552)



(12,372)

(11,552)

Net assets


50

50





Equity




Ordinary share capital

8

50

50

Shareholders' funds


50

50

 

 

Audited Statement of Changes in Equity

As at 30 June 2015

 

 


Share



capital

Total


£000

£000

At 1 July 2013

50

50

Issue of equity

-

-

Result and total comprehensive income for the period from 1 July 2013 to 30 June 2014

-

-

At 30 June 2014

50

50

Result and total comprehensive income for the year

-

-

At 30 June 2015

50

50

 

 

Audited Statement of Cashflows

For the year ended 30 June 2015


Year ended

Year ended


30 June 2015

30 June 2014


£000

£000

Cash flow from operating activities



Profit for the period before tax

-

-

Adjustments for:



- interest expense

820

723

- interest and similar income

(820)

(723)

Net cash flow from operating activities

-

-

Cash flow from investing activities



Loan to ultimate parent company

-

(1,108)

Net cash outflow from investing activities

-

(1,108)

Cash flow from financing activities



Proceeds on issue of ZDP Shares

-

1,108

Net cash inflow from financing activities

-

1,108

Net increase in cash and cash equivalents

-

-

Net cash and cash equivalents at beginning of period

-

-

Net cash and cash equivalents at the end of period

-

-

 

 

1      Accounting policies

The principal accounting policies adopted in the preparation of the financial statements are set out below.

 

1.1   Basis of preparation

The financial information has been prepared in accordance with the Companies Act 2006 and International Financial Reporting Standards ('IFRS') as adopted by the European Union.  The financial information comprises the Statement of Financial Position as at 30 June 2015 and, for the year ended 30 June 2015, the related Statement of Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows and related notes hereinafter referred to as 'financial information'.  The principal accounting policies adopted by the company are set out below.

 

The accounting policies that have been applied in the opening Statement of Financial Position have also been applied throughout all periods presented in these financial statements.  These accounting policies comply with each IFRS that is mandatory for accounting periods ending on 30 June 2015.  IFRS13 Fair Value Measurement became mandatory for the first time for the financial year beginning 1 July 2013 but has had no material impact on the results of the company for the year ended 30 June 2015.

 

At the date of approval of these financial statements, certain new standards, amendments and interpretations to existing standards have been published by the IASB but are not yet effective, and have not been adopted early by the company.

 

Management anticipates that all of the relevant pronouncements will be adopted in the company's accounting policies for the first period beginning after the effective date of the pronouncement.  Information on new standards, amendments and interpretations that are expected to be relevant to the company's financial statements is provided below.

 

Certain other new standards and interpretations have been issued but are not expected to have a material impact on the company's financial statements.

 

Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the Company

 

-    IFRS10 Consolidated Financial Statements

-    IFRS11 Joint Arrangements

-    IFRS12 Disclosure of Interests in Other Entities

-    IAS27 (Revised) Separate Financial Statements

-    IAS28 (Revised) Investments in Associates and Joint Ventures

 

Standards in issue but not yet effective

 

-    IFRS9 Financial Instruments (effective 1 January 2018)

-    IFRS15 Revenue from Contracts with Customers (effective 1 January 2017)

-    IAS19 Employee Benefits (Revised June 2011) (effective 1 January 2014)

-    Disclosures - Offsetting Financial Assets and Financial Liabilities - Amendments to IFRS7 (effective 1 January 2014)

-    Offsetting Financial Assets and Financial Liabilities - Amendments to IAS32 (effective 1 January 2014)

 

None of the standards above are expected to have an impact on the company's financial statements

 

Revenue

Interest income is recognised in revenue using the effective interest method on an accruals basis.

 

Expenses

All expenses are borne by the company's parent company, Inland Homes plc.

 

Zero dividend preference shares

Zero dividend preference shares are recognised as liabilities in the Statement of Financial Position in accordance with IAS 32 Financial Instruments: Presentation.  After initial recognition, these liabilities are measured at amortised cost, which represents the initial proceeds of the issuance plus the accrued entitlement to 30 June 2015.

 

Intercompany receivable

Intercompany receivables are recognised as assets in the Statement of Financial Position in accordance with IAS 32 Financial Instruments: Presentation.  After initial recognition they are measured at amortised cost which represents the initial loan plus the accrued interest receivable at the reporting date.

 

Finance costs

 

Taxation

The charge for taxation is based on the taxable profits for the period. Taxable profit differs from profit before tax as reported in the Statement of Comprehensive Income because it excludes items of income or expenses that are never taxable or deductible.  The company's liability for tax is calculated using rates that have been enacted or substantively enacted by the reporting date.

 

Deferred taxation

 

Equity

An equity instrument is a contract which evidences a residual interest in the assets after deducting all liabilities.  Equity comprises the following:

-    'Share capital' represents the nominal value of equity shares.

 

Key estimates and assumptions

Estimates and judgements used in preparing the financial statements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed reasonable.  The resulting estimates will, by definition, seldom equal the related actual results.

 

The company has entered into two agreements with its ultimate parent company, an interest free loan note agreement and an asset contribution agreement covering the final repayment of external ZDP liabilities.  The directors consider that to correctly reflect the substance of the transactions these should be accounted for as one financial instrument.

 

Segment information

In accordance with IFRS8, information is disclosed to enable the users of financial statements to evaluate the nature and financial effects of the business activities in which the company engages.  The board has identified that the sole operating segment is to provide the final capital entitlement of the company's ZDP shares to the holders of the ZDP shares at the repayment date of 10 April 2019.  Consequently, all information presented in these financial statements relate to that segment.

 

2      Income


Year ended

Year ended


30 June 2015

30 June 2014


£000

£000

Interest from group undertakings

820

723

 

3      Expenses

 

4      Finance costs


Year ended

Year ended


30 June 2015

30 June 2014


£000

£000

ZDP share interest costs

820

723

 

5      Taxation


Year ended

Year ended


30 June 2015

30 June 2014


£000

£000

Profit before tax

-

-

Profit on ordinary activities multiplied by the standard rate



of corporation tax in the UK of 20.75% (2014: 22.5%)

ZDP share interest costs disallowed

Group relief

-

170

(170)

-

163

(163)

Tax charge

-

-

 

6      Earnings per ordinary share

 

7      Zero dividend preference shares


2015

2015

2014

2014


No.

£000

No.

£000

ZDP shares





Opening ZDP shares

10,284,800

11,552

9,349,900

9,721

Issued during the period

-

-

934,900

1,108

ZDP share interest cost

-

820

-

723


10,284,800

12,372

10,284,800

11,552

Details of the terms of the issue of the ZDP shares can be found in the Chairman's Statement on page 1.

8      Ordinary share capital


2015

2015

2014

2014


No.

£000

No.

£000

Opening ordinary shares

50,000

50

50,000

50

Issued during the period

-

-

-

-

50,000 issued ordinary shares of £1 each

50,000

50

50,000

50

 

All ordinary shares are owned by the company's parent company, Inland Homes 2013 Limited.

 

Each ordinary share is entitled to one vote at a general meeting.

 

In addition to receiving any income distributed by way of dividend, the ordinary shareholders will be entitled to all surplus assets after payment of all debts, including the ZDP shares.

 

9      Financial instruments

 

The main risks arising from the company's financial instruments are liquidity risk and funding risk and credit risk.

 

Liquidity and funding risk

 

Liquidity risk is considered to be significant as the company is reliant upon repayment from its ultimate parent company. Details of how the liquidity risk of the ultimate parent company is managed are contained within the financial statements of the ultimate parent company.

 

Contractual maturity analysis for financial liabilities


2015

2014


£000

£000


ZDP shares final redemption figure

ZDP shares final redemption figure

More than one year and less than five

16,034

16,034

Over five years

-

-


16,034

16,034

 

Credit risk

 

At the reporting date, the company's financial assets exposed to credit risk amounted to the following:

 

Loans and receivables


2015

2014


£000

£000

Amounts due from ultimate parent company

12,422

11,602

 

The directors consider the carrying amounts to be a reasonable approximation of fair value.

The following table presents the fair value of financial liabilities that are carried at amortised cost in the Statement of Financial Position in accordance with the fair value hierarchy. This hierarchy groups financial liabilities into three levels based on the significance of inputs used in measuring the fair value of the financial liabilities. The fair value hierarchy has the following levels:

-    Level 1: quoted prices (unadjusted) in active markets for identical liabilities;

-    Level 2: inputs other than quoted prices included within Level 1 that are observable for the liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

-    Level 3: inputs for the liability that are not based on observable market data (unobservable inputs).

 

The level within which the financial liability is classified is determined based on the lowest level of significant input to the fair value measurement.

 

If the financial liabilities were measured at fair value in the Group Statement of Financial Position they would be grouped into the fair value hierarchy as follows:

 


Level 1

£000

Level 2

£000

Level 3

£000

Total

£000

Net fair value at 1 July 2014

12,753

-

-

12,753

Additions

-

-

-

-

Fair value movements during the year

     900

-

-

     900

Net fair value at 30 June 2015

13,653

-

-

13,653

 

The ZDP shares are carried at their accrued value of 120.29p per share (2014: 111.34p) however their closing price on the main market of the London Stock Exchange on 30 June 2015 was 132.75p (2014: 124.00p).  During the year nil (2014: 934,900) shares were issued at a price of 0p (2014: 118.5p) per share.

 

10    Capital management policies and procedures

The company's objectives when managing capital are:

-      to safeguard its ability to continue as a going concern; and

-      to ensure sufficient liquid resources are available to meet the funding requirement of its ZDP shareholders.

 

11    Related party transactions

The loan to Inland Homes plc is interest free and is repayable on the ZDP repayment date (see the Strategic Report on page 1) or immediately upon an event of default.  At 30 June 2015, the loan to the ultimate parent company was £12,422,000 (2014: £11,602,000).

12    Post Balance Sheet Events

 On 13 August 2015 Inland ZDP plc issued 1,028,400 new zero dividend preference shares of 10

 pence each at a price of 131 pence each. They were admitted to trading on the London Stock

 Exchange plc's main market on 20 August 2015. Net proceeds of this issue were approximately

 £1.3m.

 

13    Holding Company

        The company is a wholly owned subsidiary of Inland Homes 2013 Limited which is a wholly

        owned subsidiary of Inland Homes plc, a listed company whose shares are traded on the AIM

        market of the London Stock Exchange.  Copies of its accounts for the year ended 30 June 2015

        will shortly be available to view on Inland's website (www.inlandhomes.co.uk).

 

 

14        Responsibility and audit

The Directors are the persons responsible for the full annual report and financial statements.

Each of the Directors confirms that to the best of his knowledge:

·     the financial statements, prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

·     the Strategic Report and the Report of the Directors includes a fair review of the development and performance of the business and the position of the Company together with a description of the principal risks and uncertainties it faces.

The statutory financial statements have been audited by Grant Thornton UK LLP and their report was unqualified.

 

15        Publication of non-statutory accounts

The financial information set out in this preliminary announcement does not constitute

Statutory accounts as defined in section 435 of the Companies Act 2006. The Statement

of Comprehensive Income, the Statement of Financial Position at 30 June 2015, the

Statement of Changes in Equity and the Statement of Cashflows and associated notes for

the year then ended have been extracted from the Company's financial statements. The

statutory accounts for the period ended 30 June 2015 (on which the audit report has been

signed) will be delivered to the Registrar of Companies.

 

This statement is not being posted to shareholders. The Annual Report and Financial

Statements will be posted to shareholders shortly. A copy will also be available on the

Company's website, at www.inlandhomes.co.uk/inland-zdp-plc in due course. Further

copies are available on request to the Directors at Inland ZDP plc.

 

Copies of the Annual Report and Financial Statements have been submitted to the UK

Listing Authority and will shortly be available for inspection on the National Storage

Mechanism at: http://www.morningstar.co.uk/uk/NSM.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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