Source - RNS
RNS Number : 6142I
Trafford Centre Finance Ld
31 August 2016
 

THE TRAFFORD CENTRE FINANCE LIMITED

 

 

INTERIM REPORT

FOR THE SIX MONTHS ENDED 30 JUNE 2016

 

 

Company number 91678 (Cayman Islands)

 

 

OPERATING AND FINANCIAL REVIEW

FOR THE SIX MONTHS ENDED 30 JUNE 2016

 

The Trafford Centre Finance Limited ("the company") is incorporated and registered in the Cayman Islands.  The company's registered office is 89 Nexus Way, Camana Bay, Grand Cayman, Cayman Islands KY1-9007.

 

The principal activity of the company is the provision of financing to The Trafford Centre Limited which owns the intu Trafford Centre shopping centre.  This is funded by the issue of loan notes.  The company receives interest on the provision of financing to The Trafford Centre Limited at rates equal to those paid on its external debt plus additional interest of 0.01% per annum.  Any financing related fees incurred by the company are also charged on to The Trafford Centre Limited.

 

The company's results and financial position for the period ended 30 June 2016 are set out in full in the income statement, balance sheet, statement of changes in equity, statement of cash flows and the notes to the condensed interim financial statements.

 

The company's loss before taxation for the six months to 30 June 2016 was £1,000 (year ended 31 December 2015 profit of £10,000, six months ended 30 June 2015 profit of £20,000) with net assets decreasing to £834,000 (as at 31 December 2015 £835,000, as at 30 June 2015 £845,000).

 

Given the straightforward nature of the business, the company's directors are of the opinion that analysis using KPIs is not necessary for an understanding of the development, performance or position of the business. The directors expect that the present level of activity will continue for the foreseeable future.

 

The directors who held office during the period and until the date of this report are given below:

 

Raulin Amy

David Fischel

Matthew Roberts

 

 

OPERATING AND FINANCIAL REVIEW

FOR THE SIX MONTHS ENDED 30 JUNE 2016

 

KEY RISKS AND UNCERTAINTIES

As the company's principal activity is to provide financing to The Trafford Centre Limited, the company's key risks and uncertainties are those faced by The Trafford Centre Limited to the extent that they impact that entity's ability to meet its obligations to the company including those related to the terms of the company's borrowings which are secured on the assets of The Trafford Centre Limited.  The key risks and uncertainties facing the company are set out below:

 

Risk & Impact

Mitigation

Change

2016 commentary

Property

Macro-economic

Weakness in the macro-economic environment could undermine rental income levels and property values, reducing return on investment and covenant headroom

·     Focus on prime assets and upgrading assets

·     Covenant headroom monitored and stress-tested

·     Make representation on key policies, for example business rates

 

 

Likelihood of macro-economic weakness has increased with the UK's vote to leave the European Union. There is increased uncertainty in relation to many factors that impact the property investment and occupier markets. The independent valuers of intu Trafford Centre have commented that it has not yet been possible to gauge the effect by reference to transactions but that the probability of their opinion of value exactly coinciding with the price achieved, were there to be a sale, has reduced.

·     substantial covenant headroom

·     letting pipeline at similar levels to 2015

Retail environment
Failure to react to changes in the retail environment could undermine intu's ability to attract customers and tenants

 

·     Active management of tenant mix

·     Regular monitoring of tenant strength and diversity

·     Tell intu customer feedback programme helps identify changes in customer preferences

·     Work closely with retailers

·     Digital strategy that embraces technology and digital customer engagement.  This enables intu to engage in and support multichannel retailing, and to take the opportunities offered by ecommerce

 

-

Likelihood and severity of potential impact are unchanged in the first half of 2016 with intu's strategy continuing to deliver strong footfall numbers and occupancy

·     digital investment to improve relevance as shopping habits change

 

Health and safety
Accidents or system failure leading to financial and/or reputational loss

·     Strong business process and procedures, supported by regular training and exercises

·     Annual audits of operational standards carried out internally and by external consultants

·     Culture of visitor and staff safety

·     Crisis management and business continuity plans in place and tested

·     Retailer liaison and briefings

·     Appropriate levels of insurance

·     Staff succession planning and development in place to ensure continued delivery of world class service

·     Health and safety managers or coordinators in all centres

 

-

Likelihood of potential impact has not changed significantly during the first half of 2016 however severity impacted by new enforcement structure

·     Maintenance of OHSAS 18001 certification, demonstrating consistent health and safety management process and procedures across the portfolio

·     work continuing towards achieving ISO 9001, 14001 and 55001 accreditation

Cyber-security
Loss of data and information or failure of key systems resulting in financial and/or reputational loss

·     Data and cybersecurity strategies

·     Regular testing programme and cyber scenario exercise

·     Appropriate levels of insurance

·     Crisis management and business continuity plans in place and tested

·     Data committee

·     Monitoring of regulatory environment and best practice

-

Likelihood unchanged, but severity of potential impact has reduced by significant development of tools and controls in the first half of  2016

·     ongoing intu-wide cybersecurity project with focus on proactive monitoring of technical infrastructure to mitigate cyber threats

Terrorism
Terrorist incident at intu Trafford Centre or another major shopping centre resulting in loss of consumer confidence with consequent impact on lettings and rental growth

·     Strong business process and procedures, supported by regular training and exercises, designed to adapt and respond to changes in risk levels

·     Annual audits of operational standards carried out internally and by external agencies

·     Culture of visitor and staff safety

·     Crisis management and business continuity plans in place and tested

·     Retailer liaison and briefings

·     Appropriate levels of insurance

·     Strong relationships and frequent liaison with police, NaCTSO and other agencies

 

-

Overall likelihood and severity of potential impact unchanged

·     national threat level remains at Severe

·     major scenario exercise held at intu Trafford Centre with involvement of multiple external agencies

·     operating procedures in place for the introduction of further security measures if required

 

           

 

 

DIRECTORS' RESPONSIBILITY STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2016

 

The directors are responsible for preparing the interim report and condensed set of interim financial statements (interim financial statements), in accordance with applicable law and regulations.  The directors confirm that, to the best of their knowledge:

 

·   the interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting, as adopted by the European Union; and

·   the interim report includes a fair review of both the information required by Sections DTR 4.2.7R, and that which is subject of DTR 4.2.8R of the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

The Operating and Financial Review refers to important events which have taken place in the period.

 

The principal risks and uncertainties facing the business are referred to in the Operating and Financial Review.

 

Related party transactions are set out in note 11 of the interim financial statements.

 

A list of current directors is provided in the Operating and Financial Review.

 

On behalf of the Board

 

 

Matthew Roberts

Director

30 August 2016

 

INDEPENDENT REVIEW REPORT TO THE DIRECTORS OF

THE TRAFFORD CENTRE FINANCE LIMITED

 

Report on the condensed interim financial statements

 

Our conclusion

We have reviewed The Trafford Centre Finance Limited's condensed interim financial statements (the "interim financial statements") in the interim report of the Trafford Centre Finance Limited for the 6 month period ended 30 June 2016. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

This conclusion is to be read in the context of what we say in the remainder of this report.

 

What we have reviewed

The interim financial statements comprise:

·  the balance sheet as at 30 June 2016;

·  the income statement for the period then ended;

·  the statement of cash flows for the period then ended;

·  the statement of changes in equity for the period then ended; and

·  the explanatory notes to the interim financial statements.

 

The interim financial statements included in the interim report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

As disclosed in note 1 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Company is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

 

Responsibilities for the condensed interim financial statements and the review

Our responsibilities and those of the directors

The interim report, including the interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority

 

Our responsibility is to express a conclusion on the interim financial statements based on our review. This report, including the conclusion, has been prepared for and only for the directors of the Company as a body, for management purposes, for the purpose of complying with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority and for no other purpose. Our report may not be made available to any other party without our prior written consent. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

 

What a review of condensed financial statements involves

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.

 

We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

 

 

PricewaterhouseCoopers LLP

Chartered Accountants

London

30 August 2016

 

(a)  The maintenance and integrity of the intu properties plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the interim financial statements since they were initially presented on the website.

 

(b)  Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

INCOME STATEMENT (unaudited)

FOR THE SIX MONTHS ENDED 30 JUNE 2016

 

 

 

 

Six months

 

Six months

 

 

 

 

ended

 

ended

 

Year ended

 

 

30 June

 

30 June

 

31 December

 

 

2016

 

2015

 

2015

 

Notes

£000

 

£000

 

£000

 

 

 

 

 

 

 

Administration expenses

 

(24)

 

(7)

 

(11)

 

 

 

 

 

 

 

Operating loss

 

(24)

 

(7)

 

(11)

 

 

 

 

 

 

 

Finance income

4

24,656

 

24,343

 

49,252

Finance costs

4

(24,633)

 

(24,316)

 

(49,231)

Change in fair value of financial instruments

4

-

 

-

 

-

 

 

 

 

 

 

 

Net finance income

 

23

 

27

 

21

 

 

 

 

 

 

 

(Loss)/profit before tax

 

(1)

 

20

 

10

 

 

 

 

 

 

 

Taxation

 

-

 

-

 

-

 

 

 

 

 

 

 

(Loss)/profit for the period

 

(1)

 

20

 

10

 

Other than the items in the income statement above, there are no other items of comprehensive income and accordingly a separate statement of comprehensive income has not been prepared.

 

 

BALANCE SHEET (unaudited)

AS AT 30 JUNE 2016

 

 

 

 

As at

 

As at

 

As at

 

 

30 June

 

31 December

 

30 June

 

 

2016

 

2015

 

2015

 

Notes

£000

 

£000

 

£000

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Trade and other receivables

5

762,990

 

769,958

 

776,656

Derivative financial instruments

 

128,871

 

88,057

 

79,987

 

 

891,861

 

858,015

 

856,643

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Trade and other receivables

5

23,134

 

22,584

 

23,028

Derivative financial instruments

 

1,510

 

1,496

 

1,465

Cash and cash equivalents

 

346

 

306

 

265

 

 

24,990

 

24,386

 

24,758

 

 

 

 

 

 

 

Total assets

 

916,851

 

882,401

 

881,401

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Borrowings

7

(13,682)

 

(13,213)

 

(13,875)

Trade and other payables

6

(8,964)

 

(8,842)

 

(8,573)

Derivative financial instruments

 

(1,510)

 

(1,496)

 

(1,465)

 

 

(24,156)

 

(23,551)

 

(23,913)

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Borrowings

7

(762,990)

 

(769,958)

 

(776,656)

Derivative financial instruments

 

(128,871)

 

(88,057)

 

(79,987)

 

 

(891,861)

 

(858,015)

 

(856,643)

 

 

 

 

 

 

 

Total liabilities

 

(916,017)

 

(881,566)

 

(880,556)

 

 

 

 

 

 

 

Net assets

 

834

 

835

 

845

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Share capital

8

-

 

-

 

-

Retained earnings

 

834

 

835

 

845

 

 

 

 

 

 

 

Total equity

 

834

 

835

 

845

 

STATEMENT OF CHANGES IN EQUITY (unaudited)

FOR THE SIX MONTHS ENDED 30 JUNE 2016

 

 

 

Share

 

Retained

 

Total

 

capital

 

earnings

 

equity

 

£000

 

£000

 

£000

 

 

 

 

 

 

At 1 January 2015

-

 

825

 

825

 

 

 

 

 

 

Profit for the period

-

 

20

 

20

 

 

 

 

 

 

Total comprehensive income for the period

-

 

20

 

20

 

 

 

 

 

 

At 30 June 2015

-

 

845

 

845

 

 

 

 

 

 

At 1 July 2015

-

 

845

 

845

 

 

 

 

 

 

Loss for the period

-

 

(10)

 

(10)

 

 

 

 

 

 

Total comprehensive income for the period

-

 

(10)

 

(10)

 

 

 

 

 

 

At 31 December 2015

-

 

835

 

835

 

 

 

 

 

 

At 1 January 2016

-

 

835

 

835

 

 

 

 

 

 

Loss for the period

-

 

(1)

 

(1)

 

 

 

 

 

 

Total comprehensive income for the period

-

 

(1)

 

(1)

 

 

 

 

 

 

At 30 June 2016

-

 

834

 

834

 

STATEMENT OF CASH FLOWS (unaudited)

FOR THE SIX MONTHS ENDED 30 JUNE 2016

 

 

 

 

Six months

 

Six months

 

 

 

 

ended

 

ended

 

Year ended

 

 

30 June

 

30 June

 

31 December

 

 

2016

 

2015

 

2015

 

Notes

£000

 

£000

 

£000

 

 

 

 

 

 

 

Cash generated from operations

10

1

 

3

 

(11)

Interest received

 

24,375

 

24,071

 

48,374

Interest paid

 

 

(24,031)

 

(48,279)

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

43

 

84

 

 

 

 

 

 

 

Amounts owed by group undertaking -received

 

 

8,666

 

16,496

 

 

 

 

 

 

 

Cash flows from investing activities

 

6,953

 

8,666

 

16,496

 

 

 

 

 

 

 

Borrowings repaid

 

(6,953)

 

(8,666)

 

(16,496)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

(8,666)

 

(16,496)

 

 

 

 

 

 

 

Net increase in cash and cash

 

 

 

 

 

 

equivalents

 

40

 

43

 

84

Cash and cash equivalents at beginning of

 

 

 

 

 

 

period

 

306

 

222

 

222

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

346

 

265

 

306

 

 

NOTES (unaudited)

FOR THE SIX MONTHS ENDED 30 JUNE 2016

 

 

1.         Basis of preparation

 

The condensed set of interim financial statements (interim financial statements) for the six months ended 30 June 2016 are unaudited.  The interim financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34 as adopted by the European Union.

 

The comparative information presented for the year ended 31 December 2015 is not the company's financial statements for that year.  Those financial statements have been reported on by the company's auditors.  The auditors' opinion on those financial statements was unqualified and did not contain an emphasis of matter paragraph. The comparative information presented for the six months ended 30 June 2015 has not been subject to independent review or audit.

 

The interim financial statements should be read in conjunction with the company's financial statements for the year ended 31 December 2015 which have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.

 

Use of estimates and assumptions

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets and liabilities, income and expense.  Actual results may differ from these estimates.  In preparing the interim financial statements, the areas of significant judgement made by management in applying the company accounting policies and the key sources of estimation uncertainty were the same as those applied to the financial statements as at and for the year ended 31 December 2015.

 

Going concern

In assessing whether the going concern basis of preparation is appropriate to adopt, the directors considered a number of factors including financial projections of the company and the level of financial support that may be available to the company by its ultimate parent, intu properties plc.  In addition investment property held by The Trafford Centre Limited, a fellow subsidiary of intu properties plc, acts as security for the financial instruments which are held in The Trafford Centre Finance Limited.  The ability of the company to meet the obligations of these financial instruments is dependent upon the performance of The Trafford Centre Limited and its ability to meet its obligations to the company.  In concluding that the going concern basis of preparation is appropriate the directors have considered the cash flow forecasts of The Trafford Centre Limited in combination with the cash flow forecasts of the company.  Based on this review the directors have concluded that it is appropriate to continue to adopt the going concern basis of accounting in preparing the entity's interim financial statements.

 

 

2.         Accounting policies

 

The accounting policies applied are consistent with those of the company's statutory financial statements for the year ended 31 December 2015 as set out on pages 12 to 13 of that Report and Financial Statements except for amendments arising from the Annual Improvements Cycle to IFRSs 2010-2012 and 2012-2014 which are effective for the first time for the company's 31 December 2016 year end.  These have been applied in preparing these interim financial statements to the extent they are relevant to the preparation of interim financial information but have not resulted in any material changes to the information presented.

 

Taxes on income in interim periods are accrued using tax rates expected to be applicable to total annual earnings.

 

 

3.         Seasonality and cyclicality

 

There is no material seasonality or cyclicality impacting interim financial reporting.

 

 

4.         Net finance costs

 

 

Six months

 

Six months

 

 

 

ended

 

ended

 

Year ended

 

30 June

 

30 June

 

 31 December

 

2016

 

2015

 

2015

 

£000

 

£000

 

£000

 

 

 

 

 

 

Finance income

 

 

 

 

 

On amounts due from group undertaking

24,656

 

24,343

 

49,252

Other interest

-

 

-

 

-

 

 

 

 

 

 

 

24,656

 

24,343

 

49,252

 

 

 

 

 

 

Finance costs

 

 

 

 

 

On borrowings           

(24,616)

 

(24,303)

 

(49,198)

Other interest

(17)

 

(13)

 

(33)

 

 

 

 

 

 

 

(24,633)

 

(24,316)

 

(49,231)

 

 

 

 

 

 

Change in fair value of financial instruments

 

 

 

 

 

On external derivative financial instruments

(40,814)

 

11,067

 

2,997

On derivative financial instruments with

 

 

 

 

 

The Trafford Centre Limited

40,814

 

(11,067)

 

(2,997)

 

 

 

 

 

 

 

-

 

-

 

-

 

 

5.         Trade and other receivables

 

 

As at

 

As at

 

As at

 

30 June

 

31 December

 

30 June

 

2016

 

2015

 

2015

 

£000

 

£000

 

£000

Current

 

 

 

 

 

Amounts owed by group undertaking

14,591

 

14,129

 

14,783

Less: finance costs

(909)

 

(916)

 

(908)

Net loan amount

13,682

 

13,213

 

13,875

 

 

 

 

 

 

Accrued income and other amounts due

 

 

 

 

 

from group undertaking

9,013

 

8,962

 

8,761

Prepayments

439

 

409

 

392

Other debtors

-

 

-

 

-

 

 

 

 

 

 

 

23,134

 

22,584

 

23,028

 

 

As at

 

As at

 

As at

 

30 June

 

31 December

 

30 June

 

2016

 

2015

 

2015

 

£000

 

£000

 

£000

 

 

 

 

 

 

Non-current

 

 

 

 

 

Amounts owed by group undertaking

775,197

 

782,612

 

789,787

Less: finance costs

(12,207)

 

(12,654)

 

(13,131)

 

 

 

 

 

 

Net loan amount

762,990

 

769,958

 

776,656

 

The amounts owed by group undertaking relate to an intercompany loan with The Trafford Centre Limited where the company's borrowings with external parties are passed to The Trafford Centre Limited.  The amounts owed are unsecured and the repayment profile matches the maturity profile of the company's borrowings as The Trafford Centre Limited is required to provide funds to the company in order for it to meet its external funds obligations.  The recoverability of these balances has been reviewed and as a result no allowance for doubtful debts is considered to be required.  There have been no impairments on receivables or amounts written off in the year.

 

Interest is due on the intercompany loans at rates equal to those paid on the external debt plus additional interest of 0.01% per annum.  Interest is also due to cover any fees and costs incurred by the company.

 

 

6.         Trade and other payables

 

 

As at

 

As at

 

As at

 

30 June

 

31 December

 

30 June

 

2016

 

2015

 

2015

 

£000

 

£000

 

£000

 

 

 

 

 

 

Amounts owed to group undertaking

318

 

75

 

55

Accruals

8,646

 

8,767

 

8,518

 

 

 

 

 

 

 

8,964

 

8,842

 

8,573

 

 

7.         Borrowings

 

 

Interest

 

Final

 

As at

 

Year ended

 

As at

 

 

rate

 

maturity

 

30 June

 

31 December

 

30 June

 

 

 

 

 

 

2016

 

2015

 

2015

 

 

 

 

 

 

£000

 

£000

 

£000

 

Current

 

 

 

 

 

 

 

 

 

 

Secured notes:

 

 

 

 

 

 

 

 

 

Class

 

 

 

 

 

 

 

 

 

 

A1(N)

Floating

 

2015

 

-

 

-

 

1,100

 

B

7.03%

 

2029

 

4,018

 

3,884

 

3,756

 

A2

6.5%

 

2033

 

10,573

 

10,245

 

9,927

 

Debt falling due

 

 

 

 

 

 

 

 

 

 

within one year

 

 

 

 

14,591

 

14,129

 

14,783

 

 

 

 

 

 

 

 

 

 

 

 

Less: finance

 

 

 

 

 

 

 

 

 

 

costs

 

 

 

 

(909)

 

(916)

 

(908)

 

 

 

 

 

 

 

 

 

 

 

 

Net loan

 

 

 

 

 

 

 

 

 

 

amount

 

 

 

 

13,682

 

13,213

 

13,875

 

 

 

 

 

 

 

 

 

 

 

 

Non-current

 

 

 

 

 

 

 

 

 

 

Secured notes:

 

 

 

 

 

 

 

 

 

Class

 

 

 

 

 

 

 

 

 

 

A2

6.5%

 

2033

 

303,698

 

309,069

 

314,271

 

A3

Floating

 

2035

 

188,500

 

188,500

 

188,500

 

A4

2.875%

 

2019

 

20,000

 

20,000

 

20,000

 

B

7.03%

 

2029

 

73,945

 

75,989

 

77,962

 

B2

Floating

 

2035

 

20,000

 

20,000

 

20,000

 

B3

4.250%

 

2024

 

20,000

 

20,000

 

20,000

 

D1(N)

Floating

 

2035

 

29,054

 

29,054

 

29,054

 

D2

8.28%

 

2022

 

50,000

 

50,000

 

50,000

 

D3

4.750%

 

2024

 

70,000

 

70,000

 

70,000

 

Debt falling due

 

 

 

 

 

 

 

 

 

 

after one year

 

 

 

 

775,197

 

782,612

 

789,787

 

 

 

 

 

 

 

 

 

 

 

 

Less: finance

 

 

 

 

 

 

 

 

 

 

Costs

 

 

 

 

(12,207)

 

(12,654)

 

(13,131)

 

 

 

 

 

 

 

 

 

 

 

 

Net loan

 

 

 

 

 

 

 

 

 

 

amount

 

 

 

 

762,990

 

769,958

 

776,656

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

borrowings

 

 

 

 

776,672

 

783,171

 

790,531

 

                         

 

The fair value of borrowings as at 30 June 2016 was £923.4 million.

 

The maturity profile of gross debt is as follows:

 

 

As at

 

As at

 

As at

 

30 June

 

31 December

 

30 June

 

2016

 

2015

 

2015

 

£000

 

£000

 

£000

 

 

 

 

 

 

Wholly repayable within one year

14,591

 

14,129

 

14,783

Wholly repayable in more than one year

 

 

 

 

 

but not more than two years

18,342

 

15,069

 

14,591

Wholly repayable in more than two years

 

 

 

 

 

but not more than five years

45,497

 

98,398

 

91,430

Wholly repayable in more than five years

711,357

 

669,145

 

683,767

 

 

 

 

 

 

 

789,787

 

796,741

 

804,570

 

The secured notes have the benefit of a floating charge over all of the assets and undertakings of the company and in addition are secured against The Trafford Centre Securitisation Agreements together with the benefit of a fixed legal charge over the land and buildings comprising The Trafford Centre granted by The Trafford Centre Limited, a fellow subsidiary undertaking of Intu Trafford Centre Group (UK) Limited and owner of intu Trafford Centre.

 

Interest on the Class A1(N), Class  A3, Class  B2 and Class D1(N) secured notes whose rates are based on LIBOR plus an applicable margin has been hedged under interest rate swap contracts totalling £226,541,026 (31 December 2015 £223,227,026, 30 June 2015 £221,203,463) with rates of 4.2%, 4.34% and 4.66% and an interest rate cap of £11,013,000 (31 December 2015 £14,327,000, 30 June 2015 £17,451,000) with a capped rate of 6.66% plus an applicable margin on each bond.  The fair value of these interest rate swaps at 30 June 2016 was a liability of £131,332,000 (31 December 2015 £89,553,000, 30 June 2015 £81,451,000).

 

 

8.         Share capital

 

 

2016

 

£

Issued, called up and fully paid

 

At 1 January 2016 and 30 June 2016 - 2 ordinary shares of £1 each

2

 

 

9.         Financial instruments

 

The table below presents the company's financial assets and liabilities recognised at fair value.

 

 

As at 30 June 2016

 

Level 1

 

Level 2

 

Level 3

 

Total

 

£000

 

£000

 

£000

 

£000

Assets

 

 

 

 

 

 

 

Derivative financial instruments:

 

 

 

 

 

 

 

-  Fair value through profit or loss

-

 

130,381

 

-

 

130,381

 

 

 

 

 

 

 

 

Total assets

-

 

130,381

 

-

 

130,381

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Derivative financial instruments:

 

 

 

 

 

 

 

-  Fair value through profit or loss

-

 

(130,381)

 

-

 

(130,381)

 

 

 

 

 

 

 

 

Total liabilities

-

 

(130,381)

 

-

 

(130,381)

 

Fair value hierarchy

Level 1:    Valuation based on quoted market prices traded in active markets.

Level 2:    Valuation techniques are used, maximising the use of observable market data, either directly from market prices or derived from market prices.

Level 3:    Where one or more inputs to valuation are not based on observable market data.  Valuations at this level are more subjective and therefore more closely managed, including sensitivity analysis of inputs to valuation models.  Such testing has not indicated that any material difference would arise due to a change in input variables.

 

There were no transfers between Levels 1, 2 and 3 during the period.

 

Derivative financial instruments are initially recognised on the trade date at fair value and subsequently re-measured at fair value.  In assessing fair value the company uses its judgement to select suitable valuation techniques and make assumptions which are mainly based on market conditions existing at the balance sheet date.  The fair value of interest rate swaps is calculated by discounting estimated future cash flows based on the terms and maturity of each contract and using market interest rates for similar instruments at the measurement date.  These values are tested for reasonableness based upon broker or counterparty quotes.

 

 

Classification of financial assets and liabilities

The table below sets out the company's accounting classification of each class of financial assets and liabilities, and their fair values at 30 June 2016.  The fair values of quoted borrowings are based on the asking price.   The determination of the fair values of derivative financial instruments is discussed above.

 

 

 

 

 

Gain/(loss)

 

Carrying

 

Fair

 

to income

 

value

 

value

 

statement

As at 30 June 2016

£000

 

£000

 

£000

 

 

 

 

 

 

Derivative financial instrument assets

130,381

 

130,381

 

40,814

 

 

 

 

 

 

Total held for trading assets

130,381

 

130,381

 

40,814

 

 

 

 

 

 

Trade and other receivables

785,685

 

785,685

 

-

Cash and cash equivalents

346

 

346

 

-

 

 

 

 

 

 

Total cash and receivables

786,031

 

786,031

 

-

 

 

 

 

 

 

Derivative financial instrument liabilities

(130,381)

 

(130,381)

 

(40,814)

 

 

 

 

 

 

Total held for trading liabilities

(130,381)

 

(130,381)

 

(40,814)

 

 

 

 

 

 

Trade and other payables

(318)

 

(318)

 

-

Borrowings

(776,672)

 

(923,353)

 

-

 

 

 

 

 

 

Total loans and payables

(776,990)

 

(923,671)

 

-

 

 

 

10.       Cash generated from operations

 

 

Six months

 

Six months

 

 

 

ended

 

ended

 

Year ended

 

30 June

 

30 June

 

31 December

 

2016

 

2015

 

2015

 

£000

 

£000

 

£000

 

 

 

 

 

 

(Loss)/Profit before tax

(1)

 

20

 

10

 

 

 

 

 

 

Remove:

 

 

 

 

 

Finance income

(24,656)

 

(24,343)

 

(49,252)

Finance costs

24,633

 

24,316

 

49,231

 

 

 

 

 

 

Changes in working capital:

 

 

 

 

 

Change in trade and other receivables

(253)

 

24

 

(21)

Change in trade and other payables

278

 

(14)

 

21

 

 

 

 

 

 

 

1

 

3

 

(11)

 

 

11.       Related party transactions

 

There have been no related party transactions during the period that require disclosure under Section DTR 4.2.8 R of the Disclosure and Transparency Rules or under IAS 34 Interim Financial Reporting.

 


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