RNS Number : 6645S
Inland Homes PLC
21 March 2016
 

21 March 2016

 

Inland Homes Plc

(the 'Company' or the 'Group')

 

Interim results for the six months ended 31 December 2015

 

Record results reflect growing momentum of strategy against a favourable market backdrop

 

 

Inland Homes Plc (AIM: INL), the housebuilder and brownfield regeneration specialist, today announces its results for the six months to 31 December 2015.

 

Highlights

 

Strong financial results delivered across all operating metrics

·      EPRA net asset value of 84.4 pence per share

·      274.4% increase in profit before tax (including £14.0 million revaluation surplus) to £21.5 million (2014*: £5.7 million)

·      Group revenue increased by 4.9% to £55.1 million (2014*: £52.6 million), reflecting a higher average selling price per unit of £325,000 (2014*: £242,000)

·      Current annualised rental income has reached an all-time high at £2.3 million per annum

·      Committed £20 million revolving credit facility, with an 'accordion facility' of £10 million, secured with Barclays Bank plc to finance the majority of the Group's housebuilding activities 

·      33% rise in interim dividend to 0.4 pence (2014: 0.3 pence) per share, reflecting strength of earnings performance and the Board's confidence in the outlook 

 

Growing land bank providing opportunities for strong returns through planning, development and sales

·      Disposal of 244 plots across three sites during the period, for a total consideration of £21.5 million  

·      Gross margin from the sale of private homes increased to 24.1% (2014*: 22.0%)

·      Net increase in the Group's land bank with the addition of 833 plots, bringing the total number of plots in the portfolio to 5,672, of which 1,146 have planning consent

·      Significant value-add activity with projects progressing through the planning system

·      Appointment of high profile Managing Director with responsibility for Group construction activity and project delivery

·      Joint venture with the land owners of an 8.4 acre site, with the capacity for c. 100 plots in Garston, Hertfordshire

·      Agreement signed with Southampton City Council appointing Inland as development partner on an 8.9 acre site, with the potential for 380 residential units and a gross development value of over £90 million

·      Progress across the Group's development projects continues apace with 208 units under construction and work on a further 111 units to commence shortly

 

Housing market remains strong in the areas that the Company operates

·      Demand for new homes and for land with planning consent remains high in our areas of operation

·      Increasing land values implies a shortage of supply and continuing demand from housebuilders for good, sustainable, suburban locations outside central London

·      Government initiatives, including Starter Homes and Help to Buy, are contributing to strengthening confidence among funders and housebuilders to take on higher density projects

 

Stephen Wicks, Chief Executive at Inland Homes commented:

 

"This has been another record period for Inland Homes, which not only reflects the positive market backdrop against which we're operating, but also the ongoing success of our strategy and operational activities. Demand continues to be strong in our areas of operation for strategically located, consented land as well as for the houses that we develop, which are of a high quality and crucially are affordable to the average purchaser. 

 

"Our strategy of regenerating brownfield sites that are well-located in areas of growth in the south east is delivering clear results and, with our key development projects progressing as planned, we are looking forward to the rest of the year ahead with confidence."

 

Enquiries:

 

Inland Homes plc:

Tel: +44 (0) 1494 762450

Stephen Wicks, Chief Executive


Nishith Malde, Finance Director


Paul Brett, Land Director




Stifel Nicolaus Europe Limited (Nominated Adviser):

Tel: +44 (0) 20 7710 7600

David Arch


Roger Clarke




FTI Consulting:

Tel: +44 (0)20 3727 1000

Dido Laurimore


Claire Turvey


 

Notes to Editors:

Incorporated in the UK in 2005, Inland Homes plc is an AIM listed specialist housebuilder and brownfield developer, dedicated to achieving excellence in sustainability and design.

 

Inland Homes acquires brownfield land in the South and South-East of England principally for residentially led development schemes. The business then enhances the land value by obtaining planning permission, before building open market and affordable homes or selling surplus consented land to other developers to generate cash.

 

The Company is committed to extensive public and community consultation in order to ensure that, where possible, local community needs and objectives are met.

 

Inland's aim is to create sustainable communities and homes which set a benchmark for all future developments in the South of England. The Company is always looking for brownfield sites without planning permission for future development.

 

For further information, please visit the Inland Homes website at www.inlandhomes.co.uk.

 

Chairman's statement

 

I am pleased to report another set of record results for Inland Homes, which reflect the momentum built up by the Group over the last few years and the positive operating environment, where demand for our products - both homes and oven-ready land - is high. In the six months to 31 December 2015, Inland has achieved significant increases in both profit before tax (up 274.4%) and net asset value per share (up 65.8%) compared to the same period in 2014, and our strategy implementation continues apace.

 

Financial results

Revenue for the Group increased by 4.9% to £55.1 million (2014*: £52.6 million), including £30.3 million from the sale of 93 private residential homes (2014: £48.1 million from 199 homes), reflecting a higher average selling price per unit of £325,000 (2014*: £242,000) as a result of a change in mix between houses and apartments.  The gross margin from the sale of private homes increased to 24.1% (2014*: 22.0%) and £21.5 million (2014*: nil) was generated through the sale of 244 (2014*: nil) building plots.

 

Operating profit (including £14.0 million revaluation surplus on investment property) increased by 151.4% to £25.0 million (2014*: £9.9 million) and profit before tax increased by 274.4% to a record of £21.5 million (2014*: £5.7 million). The overall operating margin for the Group was 45.3% (2014*: 18.9%). 

 

Earnings per share increased by 314.9% over the previous period to 10.04 pence (2014*: 2.42 pence).  Against this backdrop of a strong earnings performance, the Board has decided to increase the interim dividend by 33.3% to 0.4 pence (2014: 0.3 pence) per share.  The dividend will be paid on 31 May 2016 to shareholders on the register at the close of business on 6 May 2016.  The ex-dividend date is 5 May 2016.

 

Net assets attributable to shareholders of the Company at 31 December 2015 were £107.1 million (2014*: £64.7 million) equating to 53.1 pence (2014*: 32.0 pence) per share. As signalled in our 2015 Annual Report and Accounts, the Board has decided to adopt the performance measures of the European Public Real Estate Association ('EPRA'), in common with most UK listed companies active in the real estate market.  The EPRA net asset value reflects the unrealised value within projects, created by the increasing value of our land bank as we go through the different stages involved with the planning process.

 

The EPRA net asset value of 84.4 pence per share of the Group has been determined as follows:






Pence per


£000

ordinary share

Net asset value (NAV)

107,066

53.06p

Unrealised value within projects

63,200

31.32p

EPRA net asset value

170,266

84.38p

Deferred tax at 19% on unrealised value within projects

(12,008)

(5.95)p

Adjusted net asset value

158,258

78.43p

 

The gross rental income from commercial and residential assets at the end of the first half was £892,000 (2014*: £331,000), with the increase predominantly driven by the rental of the houses at Wilton Park, Beaconsfield. Annualised rental income is now at its highest ever level of £2.3 million and it is intended that this will go some way to underpinning the operating costs as the business expands in the future. In this regard, we are pleased to announce that since the period end we have pre-let a 4,500 sq ft neighbourhood convenience store at RAF Stanbridge in Leighton Buzzard, which is due to open in September 2016, to Co-operative Food on a 15 year lease with upward only, RPI linked, rent reviews at a rent of £68,000 per annum.

 

We have increased our investment in staff to further support our housebuilding activity in particular, resulting in a 25.4% increase in overheads to £3.6 million (2014*: £2.8 million) for the 6 months ended 31 December 2015. While we expect some further rises in overheads over the short to medium term, this is part of a deliberate strategy aimed at significantly increasing the level of construction expertise within the Group in response to the well-publicised growth in construction costs which is affecting the industry as a whole. To this end, we have recently appointed Gary Skinner, who has a strong track record of delivering residential developments, as Managing Director to our main operating subsidiary where he will be responsible for the Group's construction activities and project delivery.

 

As at 31 December 2015, the Group had cash balances of £16.6 million (2014*: £9.8 million), with net debt increasing to £54.6 million (2014*: £43.3 million). Net debt represents 50.9% of net asset value and 32.0% of EPRA net asset value. This increase in net debt, which we highlighted in our previous results announcement, is due to the continuing increase in inventories, our participation in joint ventures and, in particular, our ongoing investment in land and works on the Group's major redevelopment project at Wilton Park in Beaconsfield, Buckinghamshire.  The Board presently expects the level of net debt to be reduced by the end of this financial year as a result of the planned disposals of consented plots and revenue generated from the sale of private units in the second half of the year.

 

Operational activity

Acquisitions and disposals

During the period the Group sold 244 plots across three sites for a total consideration of £21.5 million.  The disposals included 55 plots in Henley, Oxfordshire and 175 plots on the former RAF Stanbridge site in Leighton Buzzard, Bedfordshire. 

 

Despite these sales, the Group's land bank has seen a net increase following the addition of a further 833 plots, including the securing of options and agreements over 300 acres of land in areas where the local authorities have a shortfall in their housing supply. 

 

The current land bank is as follows:


Plots without planning consent

Plots with planning consent

Total plots

Owned under development

-

208

208

Owned or contracted

1,238

775

2,013

Managed or held within joint ventures

1,580

-

1,580

Land controlled

200

163

363

Strategic land controlled

1,397

-

1,397

Terms agreed

111

-

111

Total

4,526

1,146

5,672

 

Planning applications:

In the first half of this financial year Inland successfully secured planning consents or resolutions to grant planning consent on 583 plots and 7,114 sq ft of commercial space.  The Group currently has planning applications submitted and are awaiting decisions on a further 999 plots, with pre-application discussions underway with 19 different local authorities covering a further 1,930 plots.

 

Joint Ventures:

In December, the Group entered into a joint venture with the land owners of an 8.4 acre site in Garston, Hertfordshire, which has the capacity for approximately 100 plots. In addition, a development agreement was signed with Southampton City Council in November appointing Inland Homes as the Council's development partner on an 8.9 acre former depot site to be named Chapel Riverside.  The Group expects to secure planning permission within the next year and to subsequently develop approximately 380 residential units and marine-based commercial space fronting on to the River Itchen with an expected gross development value of over £90 million.

 

The Group anticipates that the formation of strategic joint ventures with private and public sector land owners, such as those referred to above, will become an increasing part of its activity in the medium and longer term, as it will allow the Group to capitalise on its expertise without the requirement to provide all of the funding.

 

Development projects:

Significant progress has been made at Wilton Park in Beaconsfield, where the recent public consultation, which was attended by over 600 people, was well received. The Group expects to submit a planning application for 304 new homes and 21,000 sq ft of commercial space in April this year. I am also pleased to report that the construction of the new access road into the site from the Pyebush roundabout is well advanced.  As previously indicated, until planning consent is granted, the Group's focus continues to be in the generation of rental and other income from the property. The Group has seen a further revaluation surplus of £14.0 million on the 76 existing houses at Wilton Park resulting in a carrying value for these properties of £40.0 million.

 

Construction is underway on 208 units across seven projects in the South East of England. Construction on a further 111 plots is expected to commence shortly and forward sales of residential homes currently amount to £20.9 million. 

 

Investment in Troy Homes:

As announced on 19 November 2015, the Group has committed to invest £1 million for a 25% equity stake in a newly formed premium housebuilding company, Troy Homes Limited ('Troy') and a further £2 million via interest bearing loan notes. Troy has acquired its first site for 18 units in Hitchin, Hertfordshire and has exchanged conditional contracts to acquire another two sites for 14 plots in Abbess Roding and Finchley. Troy will build these units and sell them on the open market. Troy was founded by Richard Werth, the former chief executive of Banner Homes which was acquired by CALA Homes in March 2014.

 

Financing:

The Group has recently secured a committed £20 million revolving credit facility ('the Facility') with Barclays Bank plc to finance the majority of the Group's housebuilding activities.  The Facility lasts until 31 October 2019 and includes an 'accordion facility' of £10 million which gives the Group the flexibility to increase the committed sum.

 

Market overview

The demand for new homes outside of central London remains as high as we have ever seen it. Since early 2014, there has been a shift in the type of dwelling being built with developments now including more apartments than houses. We believe this reflects the strengthening confidence of both funders and housebuilders to take on higher density projects, which is underpinned by the Government's drive to build more new homes and the related introduction of new initiatives such as 'Starter Homes' and the extension of 'Help to Buy' to 2021 in England.

 

The demand for land with planning consent continues to be strong in our areas of operation and the Group has noticed an increase in land values, which implies a shortage of supply and continuing demand from housebuilders for good, sustainable, suburban locations outside of central London. We plan to take advantage of these market conditions and, whilst the timing of land sales can never be predicted with absolute certainty, we anticipate that sales of plots will be higher in the second half of the financial year than in the first half.

 

 

 

Outlook

Despite the volatility in the financial markets since the start of this year, the demand for housing in the areas in which the Group operates remains strong and this, in turn, continues to drive the demand for consented land. Our land bank is growing, with a number of planning applications to be determined in the near future.  We are investing in our in-house construction expertise to further improve the management of our housebuilding activities. I have every confidence that, against this market background, our strategy will continue to deliver further value for our shareholders over the coming year.

 

 

 

Terry Roydon

Chairman

* Restated as a result of the application of IFRS 10 and the change in accounting policy for investment properties as explained in note 19.

Group income statement

for the six months ended 31 December 2015

 



Six months ended

*Six months ended

Year ended



31 December

31 December

30 June



2015

2014

 2015



(unaudited)

(unaudited)

(audited)


Note

£000

£000

£000

Revenue


55,148

52,568

114,219

Cost of sales


(40,556)

(39,245)

(79,841)

Gross profit

6

14,592

13,323

34,378

Administrative expenses


(3,559)

(2,837)

(6,021)

Loss on investments


-

(541)

(541)

Revaluation of investment properties


13,969

-

14,519

Operating profit


25,002

9,945

42,335

Finance cost - interest expense


(2,332)

(3,140)

(4,836)

Finance cost - cost associated with the arrangement of new facilities and other finance related costs


(565)

(990)

(2,322)

Finance cost - notional interest on deferred consideration


(744)

(178)

(1,215)

Finance income - interest receivable and similar income


96

94

201

Profit before tax and share of profits from joint ventures


21,457

5,731

34,163

Share of profit/(loss) from joint ventures


-

-

(135)

Profit before tax


21,457

5,731

34,028

Income tax

7

(1,486)

(1,626)

(5,078)

Total profit and comprehensive income for the period


19,971

4,105

28,950

Attributable to:





- Shareholders of the Company


20,289

4,910

29,680

- Non-controlling interests


(318)

(805)

(730)

Earnings per share





- basic earnings per share in pence

8

10.04p

2.42p

14.67p

- diluted earnings per share in pence


9.40p

2.28p

13.76p

* Restated as a result of the application of IFRS 10 and the change in accounting policy for investment properties as explained in note 19.

 

 

 

Group statement of financial position

at 31 December 2015



 As at 31 December

*As at 31 December

As at 30 June



2015

2014

 2015



(unaudited)

(unaudited)

(audited)


Note

£000

£000

£000

ASSETS





Non-current assets





Investment property

9

48,093

14,732

34,000

Property, plant and equipment


429

333

332

Investments in joint ventures

10

1,722

1,376

1,488

Loans to joint ventures due in more than one year

12

5,580

2,947

3,246

Investments in associate

10

250

-

-

Loans to associate due in more than one year

12

500

-

-

Receivables due in more than one year

12

55

55

55

Deferred tax

11

42

1,409

548

Total non-current assets


56,671

20,852

39,669

Current assets





Inventories


129,711

131,729

121,031

Trade and other receivables

12

7,364

7,984

7,998

Listed investments carried at fair value through profit and loss


1

1

1

Cash and cash equivalents


16,617

9,778

21,377

Total current assets


153,693

149,492

150,407

Total assets


210,364

170,344

190,076

EQUITY





Capital and reserves attributable to the Company's equity holders





Share capital

13

20,281

20,281

20,281

Share premium account


34,033

34,033

34,033

Employee Benefit Trust


(713)

(382)

(382)

Special reserve


6,059

6,059

6,059

Retained earnings


47,406

4,709

28,806

Total equity attributable to shareholders of the Company

107,066

64,700

88,797

Non-controlling interests

14

(46)

197

272

Total equity


107,020

64,897

89,069

LIABILITIES





Current liabilities





Bank loans and overdrafts


25,900

9,132

25,192

Other loans


31,104

31,945

18,724

Trade and other payables

15

9,394

14,231

14,862

Corporation tax

15

5,607

3,738

6,347

Other financial liabilities

16

4,157

18,909

10,881

Total current liabilities


76,162

77,955

76,006

Non-current liabilities





Zero dividend preference shares

16

14,163

11,958

12,372

Other financial liabilities

16

13,019

15,534

12,629

Total non-current liabilities


27,182

27,492

25,001

Total equity and liabilities


210,364

170,344

190,076

* Restated as a result of the application of IFRS 10 and the change in accounting policy for investment properties as explained in note 19.

 

Group statement of changes in equity

for the six months ended 31 December 2015

 




Employee




Non-



Share

Share

benefit

Special

Retained


controlling

Total


capital

premium

trust reserve

reserve

earnings

Total

interests

Equity


£000

£000

£000

£000

£000

£000

£000

£000

*At 30 June 2014 (audited)

20,280

34,033

-

6,059

(281)

60,091

1,002

61,093

Share based payment

-

-

-

-

80

80

-

80

Purchase of own shares into EBT

-

-

(382)

-

-

(382)

-

(382)

Reinstatement of deferred shares

1

-

-

-

-

1

-

1

Transactions with owners

1

-

(382)

-

80

(301)

-

(301)

Total comprehensive income

-

-

-

-

4,910

4,910

(805)

4,105

Total changes in equity

1

-

(382)

-

4,990

4,609

(805)

3,804

*At 31 December 2014 (unaudited)

20,281

34,033

(382)

6,059

4,709

64,700

197

64,897

Share-based payment

-

-

-

-

544

544

-

544

Dividend payment

-

-

-

-

(1,217)

(1,217)

-

(1,217)

Transactions with owners

-

-

-

-

(673)

(673)

-

(673)

Total comprehensive income

-

-

-

-

24,770

24,770

75

24,845

Total changes in equity

-

-

-

-

24,097

24,097

75

24,172

At 30 June 2015 (audited)

20,281

34,033

(382)

6,059

28,806

88,797

272

89,069

Share based payment

-

-

-

-

331

331

-

331

Dividend payment

-

-

-

-

(2,020)

(2,020)

-

(2,020)

Purchase of own shares into EBT

-

-

(331)

-

-

(331)

-

(331)

Transactions with owners

-

-

(331)

-

(1,689)

(2,020)

-

(2,020)

Total comprehensive income

-

-

-

-

20,289

20,289

(318)

19,971

Total changes in equity

-

-

(331)

-

18,600

18,269

(318)

17,951

At 31 December 2015 (unaudited)

20,281

34,033

(713)

6,059

47,406

107,066

(46)

107,020

* Restated as a result of the application of IFRS 10 and the change in accounting policy for investment properties as explained in note 19.

 

Group statement of cash flows 

for the six months ended 31 December 2015



Six months ended

*Six months ended

Year ended



31 December

31 December

30 June



2015

2014

2015



(unaudited)

(unaudited)

(audited)


Note

£000

£000

£000

Cash flows from operating activities





Profit for the period before tax


21,457

5,730

34,028

Adjustments for:





- depreciation


87

52

120

- share-based compensation


331

80

625

- fair value adjustment for value of the Drayton Garden Village Ltd option


-

541

541

- revaluation of investment properties


(13,969)

-

(14,519)

- interest expense


3,641

4,308

8,373

- interest and similar income


(96)

(94)

(201)

- share of loss of joint ventures


-

-

135

- corporation tax payments


(1,719)

(629)

(678)

Changes in working capital:





- (increase)/decrease in inventories


(8,680)

1,800

13,819

- decrease in trade and other receivables


731

2,462

2,434

- decrease in trade and other payables


(11,450)

(3,824)

(7,870)

Net cash (outflow)/inflow from operating activities


(9,667)

10,426

36,807

Cash flow from investing activities





Interest received


-

79

199

Purchases of property, plant and equipment


(184)

(232)

(299)

Purchases of investment property

9

(124)

-

(11,481)

Acquisition of subsidiaries


-

-

(250)

Loans provided to associate

12

(500)

-

-

Investment in associate

10

(250)

-

-

Loans provided to joint ventures

12

(2,334)

(2,947)

(3,246)

Investment in joint ventures

10

(234)

(1,376)

(1,622)

Net cash outflow from investing activities

(3,626)

(4,476)

(16,699)

Cash flow from financing activities





Interest paid


(3,614)

(3,560)

(7,172)

Repayment of borrowings


(24,861)

(18,486)

(36,568)

New loans


37,948

15,192

35,544

Equity dividends paid to ordinary shareholders


(609)

-

(1,217)

Purchase of own shares by Employee Benefit Trust


(331)

(382)

(382)

Net cash inflow/(outflow) from financing activities

8,533

(7,236)

(9,795)

Net (decrease)/increase in cash and cash equivalents


(4,760)

(1,286)

10,313

Net cash and cash equivalents at beginning of period


21,377

11,064

11,064

Net cash and cash equivalents at the end of period


16,617

9,778

21,377

* Restated as a result of the application of IFRS 10 and the change in accounting policy for investment properties as explained in note 19.

 

Notes to the half-yearly financial report

for the six months ended 31 December 2015

1. Nature of operations and general information

The principal activity of the Company and its subsidiaries (together called the Group) is to acquire residential and mixed use sites and seek planning consent for development. The Group also develops a number of plots for private sale.

Inland Homes plc is the Group's ultimate parent company. It is incorporated and domiciled in Great Britain. The address of Inland Homes plc's registered office, which is also its principal place of business, is Decimal Place, Chiltern Avenue, Amersham, Buckinghamshire HP6 5FG.

Inland Homes plc's shares are quoted on AIM, a market operated by the London Stock Exchange. This consolidated half-yearly financial report has been approved for issue by the Board of Directors on 18 March 2016.

The financial information set out in this half-yearly financial report does not constitute statutory accounts as defined in Sections 434(3) and 435(3) of the Companies Act 2006. The Group's statutory financial statements for the year ended 30 June 2015 have been filed with the Registrar of Companies and are available at www.inlandhomes.co.uk. The auditor's report on those financial statements was unqualified and did not contain any statement under Section 498(2) or Section 498(3) of the Companies Act 2006.

2. Basis of preparation

This consolidated half-yearly financial report has been prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting.

The consolidated half-yearly financial report should be read in conjunction with the annual financial statements for the year ended 30 June 2015, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

From 1 July 2014 the Group has adopted IFRS 10 'Consolidated Financial Statements' and this has resulted in the consolidation of Drayton Garden Village Ltd (DGVL). During the year ended 30 June 2015 the Group changed its policy for investment properties from a deemed cost basis to a fair value basis. These changes have impacted this half-yearly report and the results for the half-year ended 31 December 2014 have been restated. Further information on the financial impact of these changes in accounting policies can be found in note 19.

3. Accounting policies

The accounting policies applied are consistent with those of the annual financial statements for the year ended 30 June 2015.

 

4. Going concern

The Board has reviewed the performance for the current period and forecasts for the future period together with the available financial resources. It has also considered the risks and uncertainties, including credit risk and liquidity. The Directors have considered the present economic climate, the state of the housing market and the current demand for land with planning consent. The Group has continued to see demand for consented land in the areas in which it operates. The Group has significant forward sales of residential units and is in discussions for the sale of some of the land within its projects and expects to make sufficient disposals in the foreseeable future to ensure it has adequate working capital for its requirements. The Directors are satisfied that the Group will generate sufficient cash to meet its liabilities as and when they fall due for a period of 12 months from signing this half-yearly financial report. The Directors therefore consider it appropriate to prepare the financial statements on the going concern basis.

5. Critical accounting estimates and judgments

Estimates and judgements are continually evaluated and are based on historic experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

Critical accounting estimates

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below.

 

(a) Valuation of inventories

In applying the Group's accounting policy for the valuation of inventories the Directors are required to assess the expected selling price and costs to sell each of the plots or units that constitute the Group's land bank and work in progress. Cost includes the cost of acquisition of sites, the cost of infrastructure and construction works, and legal and professional fees incurred during development prior to sale. Estimation of the selling price is subject to significant inherent uncertainties, in particular the prediction of future trends in the market value of land.

 

Whilst the Directors exercise due care and attention to make reasonable estimates, taking into account all available information in estimating the future selling price, the estimates will, in all likelihood, differ from the actual selling prices achieved in future periods and these differences may, in certain circumstances, be very significant. The critical judgement in respect of receipt of planning consent (see below) further increases the level of estimation uncertainty in this area.

 

(b) Income taxes

The Group recognises tax/deferred tax assets and liabilities for anticipated tax based on estimates of when the tax/deferred tax will be paid or recovered. When the final outcome of these matters is different from the amounts initially recorded, such differences impact the period in which the determination is made. Critical accounting estimates relate to the profit forecasts used to determine the extent to which deferred tax assets are recognised from available losses and the period over which they are estimated.

 

 

 

Critical accounting estimates

(c) Fair value of derivatives and other financial instruments

The fair value of instruments that are not traded in an active market is determined by using valuation techniques. The Group uses its judgement to select a variety of methods and makes assumptions that are mainly based on market conditions existing.

 

(d) Fair value of investment properties

The fair value of completed investment property is determined by reference to independent valuation experts or sales agents using open market value, subject to current leases and restrictions, as this has been assessed currently as the best use of these assets. Investment properties awaiting construction are valued by the Directors using an appraisal system; critical accounting estimates relate to the forecasts prepared in order to assess the carrying value. This system has been used to establish the fair value of the investment property in Poole when restating the results for the half-year ended 31 December 2014.

 

(e) Fair value of assets and liabilities acquired with business combinations

The fair value of assets and liabilities is determined by the Directors at the date of acquisition using residual valuation model for property assets, the recoverable amount for debtors and the discounted cash flow method for deferred consideration of inventories in accordance with IAS 39. Critical accounting estimates relate to the experience of the Directors in reaching their valuations and the cost of debt capital used as an appropriate discount rate.

 

(f) Discounting on deferred consideration of inventories

The Group discounts deferred consideration of inventories using the discounted cash flow method; the Group considers that the cost of debt capital is the most appropriate discount rate and this is a significant estimate.

 

Critical judgements in applying the entity's accounting policies

Inventories

The Group values inventories at the lower of cost and net realisable value. The net realisable value is based on the judgement of the probability that planning consent will be granted for each site. The Group believes that, based on the Directors' experience, planning consent will be given. If planning consent was not achieved then a provision may be required against inventories.

 

Zero Dividend Preference Shares

The Group has in issue Zero Dividend Preference (ZDP) shares which are accounted for as debt. In the event of a takeover, the ZDP shares are repayable, together with any accrued interest. The Directors consider that the potential early repayment meets the definition of a derivative instrument under IAS39. However, they consider that this instrument is closely related to the host contract and therefore have not accounted for the embedded derivative separately.

 

Consolidation of Drayton Garden Village Limited

In December 2008 the Group entered into an Option and Development Services Agreement (the Agreement) with DGVL.

 

The Board has reviewed the requirements of IFRS 10, to assess whether the Group controls DGVL and has concluded that, although it does not own any of its share capital it does control DGVL because of the nature of the contractual arrangements between the Group and DGVL. In particular:

 

• The Group has power over DGVL because it has the practical ability to direct the relevant activities that significantly affect DGVL's returns.  Such relevant activities would include obtaining planning permission to develop the site and subsequently managing the property to realise its value.  The Group also has an option to acquire the share capital of DGVL which provides it with a mechanism by which it can direct the relevant activities.

• The services that the Group provides to DGVL and the arrangement by which the Group receives its fees are such that it has rights to variable returns as a result of its involvement in delivering the various property services to DGVL.  The Group is entitled to 90% of the profits from the project at Drayton Garden Village and thus provides it with a very significant part of the returns generated from its involvement with DGVL.

• The Group also has the ability to use its power to affect its returns by virtue of its involvement with DGVL.

 

In view of the above the Group believes that it had control over DGVL from the date it entered into the agreement with DGVL and has therefore consolidated the results and financial position of DGVL within the Group accounts.  Accordingly, the comparatives at 31 December 2014 have been restated. See note 19 for further details.

 

Consolidation of Bucks Developments Ltd (BDL) and Wilton Park Developments Ltd (WPDL)

In December 2014, the Group entered into an Option with WPDL. The Option entitles the Group to acquire land from WPDL within 10 days of the date that the land is released from the vendor's charge, as payment of deferred consideration is made by WPDL to the vendor and this could be before any decisions about the relevant activities take place. The terms of the option allow the Group to purchase the land from WPDL at a price of cost plus 20% plus indexation. The Directors have considered the requirements of IFRS 10 'Consolidated Financial Statements' and have consolidated WPDL as part of these results from the date the Option was granted. The Directors are of the opinion that the Group controls WPDL, and therefore also its parent undertaking BDL, as it has an option to acquire the only significant asset of that group and because these entities were incorporated solely for the purpose of purchasing the land under Option. The Group does not own any of the share capital of either WPDL or BDL and has none of the voting rights.

 

Investment in joint ventures

The Group's joint venture investments in Aston Clinton S.A.R.L and Project Helix Holdco Limited (Project Helix) are not in equal share (the Group owns 10% of the share capital of Aston Clinton S.A.R.L. and 20% of the share capital of Project Helix) however the Group has joint control over the activities of the companies with the other parties due to its entitlement to veto any decisions. In addition the Group and the other parties to the agreements only have rights to the net assets of these companies through the terms of the contractual arrangements. With Aston Clinton S.A.R.L the Group is entitled to 50% of the net assets and with Project Helix there is a ratchet mechanism which depends on the amount of profit each development contributes to the joint venture. Therefore these entities are classified as joint ventures and are accounted for using the equity method.

The Group's owns 50% of the share capital of Bucknalls Developments Limited and is entitled to 50% of the net assets. The Group has significant influence but not control and therefore this investment is also classified as a joint venture and is accounted for using the equity method.

 

6. Income and segmental analysis

The Group generates income by way of land sales. It also generates income from housebuilding, rental property, contracting and other related services. These operating segments are monitored and strategic decisions are made on the basis of segment operating results. The segmental analysis of operations is as follows:

 

Segmental analysis by activity








Finance


Profit



Cost of

Gross

Admin


Operating

(cost)/


before


Revenue

sales

profit

costs

Other

profit

income

Other

tax


£000

£000

£000

£000

£000

£000

 £000

£000

£000

*Six months ended 31 December










2014 (unaudited)










Segment










Land sales

-

-

-

-

-

-

(1,429)

-

(1,429)

Housebuilding

48,148

(37,579)

10,569

-

-

10,569

(1,889)

-

8,680

Contract income

3,928

(1,279)

2,649

-

-

2,649

-

-

2,649

Rental income

331

(18)

313

-

-

313

-

-

313

Other

161

(369)

(208)

-

-

(208)

-

-

(208)

- Loss on investments

-

-

-

-

(541)

(541)

-

-

(541)

- Share of loss of joint venture

-

-

-

-

-

-

(990)

-

(990)

- Unallocated

-

-

-

(2,837)

-

(2,837)

94

-

(2,743)

Total for six months

52,568

(39,245)

13,323

(2,837)

(541)

9,945

(4,214)

-

5,731

Six months ended 30 June 2015










(unaudited)










Segment










Land sales

39,560

(22,553)

17,007

-

-

17,007

(3,387)

-

13,620

Housebuilding

17,971

(14,738)

3,233

-

-

3,233

(678)

-

2,555

Contract income

3,664

(3,664)

-

-

-

-

-

-

-

Rental income

456

(10)

446

-

-

446

-

-

446

Other

-

369

369

-

-

369

-

-

369

- Gain on revaluation of investment    properties

-

-

-

-

14,519

14,519

-

-

14,519

- Share of loss of joint venture

-

-

-

-

-

-

-

(135)

(135)

- Unallocated

-

-

-

(3,184)

-

(3,184)

107

-

(3,077)

Total for six months

61,651

(40,596)

21,055

(3,184)

14,519

32,390

(3,958)

(135)

28,297

Total for year ended 30 June 2015 (audited)

114,219

(79,841)

34,378

(6,021)

13,978

42,335

(8,172)

(135)

34,028

Six months ended 31 December










2015 (unaudited)










Segment










Land sales

21,611

(15,312)

6,299

-

-

6,299

(2,774)

-

3,525

Housebuilding

30,254

(22,966)

7,288

-

-

7,288

(311)

-

6,977

Contract income

2,220

(2,115)

105

-

-

105

-

-

105

Rental income

892

(163)

729

-

-

729

(533)

-

196

Other

171

-

171

-

-

171

-

-

171

- Gain on revaluation of investment    properties

-

-

-

-

13,969

13,969

-

-

13,969

- Unallocated

-

-

-

(3,559)

-

(3,559)

73

-

(3,486)

Total for six months

55,148

(40,556)

14,592

(3,559)

13,969

25,002

(3,545)

-

21,457

 

 

 



 As at 31 December

*As at 31 December

As at 30 June



2015

2014

 2015



(unaudited)

(unaudited)

(audited)



£000

£000

£000

Segment assets




Land:




Non-current assets - deferred tax

-

1,113

142

Current assets - inventories

107,218

104,508

90,530

Current assets - other

1,447

3,738

2,252


108,665

109,359

92,924

Housebuilding:




Non-current assets - deposit match debtor

55

55

55

Current assets - inventories

22,493

27,221

29,709

Current assets - other

254

1,005

426


22,802

28,281

30,190

Contracting:




Current assets -inventories

-

-

792

Current assets - other

276

274

26


276

274

818

Investment property:




Non-current assets - investment property

48,093

14,732

34,000

Current assets - other

125

-

158


48,218

14,732

34,158





Other:




Non-current assets - investment in joint ventures

1,722

1,376

1,488

Non-current assets - loans to joint ventures

5,580

2,947

3,246

Non-current assets - investment in associate

250

-

-

Non-current assets - loans to associate

500

-

-

Non-current assets - other

429

333

332

Non-current assets - deferred tax

42

296

406

Current assets - other

5,263

2,968

5,137

Cash

16,617

9,778

21,377


30,403

17,698

31,986

Total segmental and entity assets

210,364

170,344

190,076

* Restated as a result of the application of IFRS 10 and the change in accounting policy for investment properties as explained in note 19.

 

 

 

 

 



 As at 31 December

*As at 31 December

As at 30 June

 



2015

2014

 2015

 



(unaudited)

(unaudited)

(audited)

 



£000

£000

£000

Segment liabilities




Land:




Current liabilities - trade creditors

1,213

1,776

1,966

Current liabilities - other loans

24,552

20,222

10,178

Current liabilities - other

936

3,416

4,860

Current liabilities - purchase consideration

4,157

18,909

10,881

Non-current liabilities - purchase consideration

13,019

15,534

12,629


43,877

59,857

40,514

Housebuilding:




Current liabilities - trade creditors

1,033

2,232

2,322

Current liabilities - other loans

6,552

11,723

8,546

Current liabilities - bank loans

9,921

9,132

9,692

Current liabilities - other creditors

1,494

2,165

2,392


19,000

25,252

22,952

Contracting:




Current liabilities - trade creditors

-

530

25

Current liabilities - other creditors

1,116

211

1,272


1,116

741

1,297

Rental investment:




Current liabilities - other creditors

28

-

-

Current liabilities - bank loans

15,979

-

15,500


16,007

-

15,500





Other:




Current liabilities - trade creditors

246

113

70

Current liabilities - other creditors

8,935

7,526

8,302

Non-current liabilities - zero dividend preference shares

14,163

11,958

12,372


23,344

19,597

20,744

Total segmental and entity liabilities

103,344

105,447

101,007

* Restated as a result of the application of IFRS 10 and the change in accounting policy for investment properties as explained in note 19.

 

7. Income tax


Six months ended

*Six months ended

Year ended


31 December

31 December

30 June


2015

2014

2015


(unaudited)

(unaudited)

(audited)


£000

£000

£000

Current tax charge

980

1,559

Deferred tax charge

506

67

928


1,486

1,626

5,078

* Restated as a result of the application of IFRS 10 and the change in accounting policy for investment properties as explained in note 19.

8. Earnings and net asset value per share

Basic and diluted EPS

Basic and diluted earnings per share has been calculated by dividing the earnings attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.


Six months ended

*Six months ended

Year ended


31 December

31 December

30 June


2015

2014

 2015


(unaudited)

(unaudited)

(audited)


£000

£000

£000

Profit attributable to equity holders of the Company (£000)

20,289

4,910

29,680

Net assets attributable to equity holders of the company (£000)

107,066

64,700

88,797

Weighted average number of ordinary shares in issue (000s)

202,136

202,578

202,368

Dilutive effect of options (000s)

2,343

1,563

1,985

Dilutive effect of growth shares (000s)

11,328

11,319

11,351


215,807

215,460

215,704

Basic earnings per share in pence

10.04p

2.42p

14.67p

Diluted earnings per share in pence             

9.40p

2.28p

13.76p

Shares in issue (000s)

201,779

202,156

202,156

Net asset value per share in pence

53.06p

32.01p

43.92p

* Restated as a result of the application of IFRS 10 and the change in accounting policy for investment properties as explained in note 19.

On 21 December 2015 the Group's Employee Benefit Trust purchased 377,500 shares in Inland Homes plc under the terms of the Long Term Incentive Plan. This has resulted in a reduction in the weighted average number of ordinary shares in issue since 30 June 2015.

 

9. Investment property


Residential properties

Commercial Property

Development land



Level 3

Level 3

Level 3

Total


£000

£000

£000

£000

Cost or fair value





*At 31 December 2014

5,724

-

9,008

14,732

Additions

5,757

-

-

5,757

Transfer to inventories

-

-

(1,008)

(1,008)

Fair value adjustment

14,519

-

-

14,519

At 30 June 2015

26,000

-

8,000

34,000

Additions

31

93

-

124

Fair value adjustment

13,969

-

-

13,969

At 31 December 2015

40,000

93

8,000

48,093

At 30 June 2015

26,000

-

8,000

34,000

* Restated as a result of the application of IFRS 10 and the change in accounting policy for investment properties as explained in note 19.

During the period the Group undertook a review of the fair value of the residential investment properties at Wilton Park, Beaconsfield in Buckinghamshire. These properties have gradually been handed over to the Group by the Ministry of Defence as their leases come to an end and many are now let to the general public on short term leases at market rent. Therefore the 'existing use' value has been increased to reflect the open market value of these properties as advised by sales agents.

 

 

 

10. Investments


Joint




ventures

Associate

Total


£000

£000

£000

Cost or fair value at 31 December 2014

1,376

Additions

247

-

247

Share off loss after tax

(135)

-

(135)

At 30 June 2015

1,488

-

1,488

Additions

234

At 31 December 2015

1,722

250

1,972

In November 2014 the Group acquired a 10% interest in Aston Clinton S.a.r.l (Lux) whose purpose is to acquire a site near Aylesbury, Buckinghamshire and obtain planning permission. The Group has an obligation to fund 50% of the costs of the site and is entitled to receive 50% of the net returns. The Group has made a capital investment of £1.6m and has provided loans of £2.2m as at the balance sheet date. Further details can be found in note 12.

In December 2014 the Group entered into a joint venture with CPC Group Ltd (CPC) to purchase land, obtain planning permission and ultimately sell the land. The Group owns 20% of the share capital and is obliged to fund 20% of the costs of the sites acquired by the joint venture. A 'waterfall' calculation determines the amount of profit to be received by the Group using performance hurdles. At 31 December 2015 the Group had provided loans of £3.1m to the joint venture in addition to the capital investment of £0.1m. Further details can be found in note 12.

In December 2015 the Group entered into a joint venture with two individuals to purchase land, obtain planning permission and development approximately 100 homes in Garston, Hertfordshire. The Group owns 50% of the share capital, is obliged to fund 50% of the costs of the site and is entitled to receive a management fee and 50% of the net returns. The Group has made a capital investment of £2 and has provided loans of £0.3m as at the balance sheet date. Further details can be found in note 12.

In October 2015 the Group acquired 25% of Troy, a new premium housebuilder and is entitle to 25% of the net returns. At the 31 December the Group has made a capital investment of £250,000 and has provided loans of £0.5m. The Group has subscribed to a further £1.5m of loan notes which are payable when called by the board of Troy. Further details can be found in note 12.

 

11. Deferred tax

The net movement on the deferred tax account is as follows:


£000

*At 31 December 2014

1,409

Income statement charge

(861)

At 30 June 2015

548

Income statement charge

(506)

At 31 December 2015

42

 

The movement in deferred tax assets is as follows:


Capital losses





Notional



recognised on




Share

interest on



revaluation

Revaluation



based

deferred



gain

gain

Other

Losses

compensation

consideration

Total


£000

£000

£000

£000

£000

£000

£000

*At 31 December 2014

477

(477)

829

118

296

166

1,409

Charged to income statement

2,320

(2,320)

(977)

(118)

110

124

(861)

At 30 June 2015

2,797

(2,797)

(148)

-

406

290

548

Charged to income statement

2,794

(2,794)

(641)

-

66

69

(506)

At 31 December 2015

5,591

(5,591)

(789)

-

472

359

42

* Restated as a result of the application of IFRS 10 and the change in accounting policy for investment properties as explained in note 19.

Deferred income tax assets are recognised for tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable. The Group has capital losses amounting to £10,814,000 (2014 restated: £36,202,000) that have not been recognised as the Directors consider the realisation of the losses is not expected to crystallise in the foreseeable future.

 

 

 

12. Trade and other receivables


Six months ended

*Six months ended

Year ended


31 December

31 December

30 June


2015

2014

 2015


(unaudited)

(unaudited)

(audited)


£000

£000

£000

Trade receivables

204

110

167

Prepayments and accrued income

988

371

656

Other receivables falling due within one year

6,172

7,503

7,175

Loans to joint ventures due in more than one year

5,580

2,947

3,246

Loans to associate due in more than one year

500

-

-

Other receivables falling due after more than one year

55

55

55


13,499

10,986

11,299

* Restated as a result of the application of IFRS 10 and the change in accounting policy for investment properties as explained in note 19.

The Group has provided loans of £2.2m to Aston Clinton S.a.r.l (Lux), a company in which it holds a 10% equity interest, as shown in note 10.

At 31 December 2015 the Group had provided loans of £3.1m to its joint venture with CPC, as shown in note 10.

At 31 December 2015 the Group had provided loans of £0.3m to its joint venture in Garston, Hertfordshire, as shown in note 10.

The Group has provided loans of £0.5m to Troy, a company in which it holds a 25% equity interest, as shown in note 10.

All of the Group's trade and other receivables have been reviewed for indicators of impairment.

13. Share capital


Six months ended

Six months ended

Year ended


31 December

31 December

30 June


2015

2014

 2015


(unaudited)

(unaudited)

(audited)


Number

Number

Number

Shares in issue




Shares in issue at start of period

202,156,216

202,799,432

202,799,432

Shares purchased by EBT

(377,500)

(643,216)

(643,216)

Shares in issue at end of period

201,778,716

202,156,216

202,156,216

 

14. Non-controlling interests (minority interests)


WPDL

DGVL

Total


£000

£000

£000

At 31 December 2014

239

Non-controlling interests in the net result of subsidiaries

685

(760)

(75)

At 30 June 2015

924

(1,196)

(272)

Non-controlling interests in the net result of subsidiaries

58

At 31 December 2015

982

(936)

46

 

Within WPDL there is also a land creditor of £19m which is non-recourse to the Group. Post tax profits to date of £2.2m, which have been eliminated on consolidation, will be available for distribution to the shareholder of WPDL as a dividend at a future date in addition to the losses shown in the table above. Further details of the option agreement can be found in note 5.

 

 

15. Trade and other payables


Six months ended

*Six months ended

Year ended


31 December

31 December

30 June


2015

2014

 2015


(unaudited)

(unaudited)

(audited)


£000

£000

£000

Trade payables

2,520

4,653

4,425

Other creditors

3,396

4,728

3,675

Social security, other taxes and VAT

-

1,461

3,802

Corporation tax

5,607

3,738

6,347

Accruals and deferred income

3,478

3,389

2,960


15,001

17,969

21,209

* Restated as a result of the application of IFRS 10 and the change in accounting policy for investment properties as explained in note 19.

The carrying value of trade and other payables is considered a reasonable approximation of fair value.

16. Other financial liabilities


Six months ended

*Six months ended

Year ended


31 December

31 December

30 June


2015

2014

 2015


(unaudited)

(unaudited)

(audited)


£000

£000

£000

Purchase consideration on inventories falling due within one year

4,157

18,909

10,881

Purchase consideration on inventories falling due after more than one year

13,019

15,534

12,629

Zero dividend preference shares falling due after more than one year

14,163

11,958

12,372


31,339

46,401

35,882

* Restated as a result of the application of IFRS 10 and the change in accounting policy for investment properties as explained in note 19.

18. Contingencies

 

The Group has no contingent liabilities as at 31 December 2015 and 31 December 2014.

 

19. Change in accounting policies

During the year ended 30 June 2015 the Group changed its investment property accounting policy from a 'deemed cost' basis to a 'fair value' basis. The Directors are of the opinion that the revaluation model gives a more accurate reflection of the investment properties held by the Group. The Group also adopted IFRS 10 and this resulted in the consolidation of DGVL. Further information on the reasons for this change can be found in note 5. The impact of these changes in policy on each line item of the Group Income Statement and Group Statement of Financial Position on the six month period to 31 December 2014 is shown in the table below:


Prior to change in accounting policies

Adjustments

Restated



DGVL

Revaluation



£000

£000

£000

£000

Group income statement





Turnover

54,509

(1,941)

-

52,568

Cost of sales

(41,856)

2,611

-

(39,245)

Gross profit

12,653

670

-

13,323

Administrative expenses

(2,781)

(56)

-

(2,837)

Operating profit

9,331

614

-

9,945

Net interest

(3,225)

(989)

-

(4,214)

Profit before tax

6,106

(375)

-

5,731

 


Prior to change in accounting policies

Adjustments

Restated



DGVL

Revaluation



£000

£000

£000

£000

Group statement of financial position





Investment properties

11,916

-

2,816

14,732

Deferred tax

2,158

829

(1,578)

1,409

Total non-current assets

18,785

829

1,238

20,852

Inventories

113,879

17,850

-

131,729

Trade and other receivables

15,785

(7,801)

-

7,984

Cash and cash equivalents

9,777

1

-

9,778

Total current assets

139,442

10,050

-

149,492

Retained earnings

7,666

(4,195)

1,238

4,709

Total equity attributable to shareholders

67,657

(4,195)

1,238

64,700

Bank loans and overdrafts

9,124

8

-

9,132

Other loans

17,499

14,446

-

31,945

Trade and other payables

13,793

438

-

14,231

Corporation tax creditor

3,753

(15)

-

3,738

Total current liabilities

63,078

14,877

-

77,955

 

 

20. Copies of our half-yearly financial report can be viewed and downloaded from our website at www.inlandhomes.co.uk. Copies are also available on request by writing to the Company Secretary at the Registered Office of Inland Homes plc.

 

Independent review report to Inland Homes Plc

 

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report of Inland Homes Plc for the six months ended 31 December 2015 which comprises the Group Income Statement, Group Statement of Financial Position, Group Statement of Changes in Equity, Group Statement of Cash Flows and Notes 1 to 20. We have read the other information contained in the half-yearly financial report which comprises only the Chairman's Statement and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company, in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. Our review work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review 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 for our review work, for this report, or for the conclusion we have formed.

 

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

 

Our responsibility

Our responsibility is to express a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of review

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

 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

 

Grant Thornton UK LLP
Chartered Accountants

Reading
18 March 2016

 


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