TIDMBC84
RNS Number : 1926R
Trafford Centre Finance Ld
19 September 2017
THE TRAFFORD CENTRE FINANCE LIMITED
LEI: 213800J9WWQVUK5FE223
Regulated Information Classification: information disclosed
under article 5 of the Transparency Directive
19 September 2017
HALF YEARLY FINANCIAL REPORT
In compliance with Disclosure and Transparency Rule 4.2, the
Trafford Centre Finance Limited (the "Company") announces the
publication of its Half-Yearly Financial Report for the period
ended 30 June 2017. Pursuant to Listing Rule 9.6.1, a copy of this
document has been submitted to the National Storage Mechanism and
will shortly be available for inspection at
morningstar.co.uk/uk/NSM
The Half-Yearly Report will also shortly be available for
download at intugroup.co.uk
OPERATING AND FINANCIAL REVIEW
FOR THE SIX MONTHSED 30 JUNE 2017
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 on the average principal loan amount outstanding. 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 2017 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 profit before taxation for the six months to 30
June 2017 was GBP31,000 (year ended 31 December 2016 profit of
GBP20,000, six months ended 30 June 2016 loss of GBP1,000) with net
assets increasing to GBP886,000 (as at 31 December 2016 GBP855,000,
as at 30 June 2016 GBP834,000).
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 of the company who were in office during the
period and up to the date of signing the condensed interim
financial statements were:
Raulin Amy
David Fischel
Matthew Roberts
OPERATING AND FINANCIAL REVIEW
FOR THE SIX MONTHSED 30 JUNE 2017
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 The Trafford Centre Limited'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 Trafford Centre Limited and the company are set out
below:
Risk & Impact Mitigation Change 2017 commentary
--------------- -------------------------------------------------------------- ------- ------------------------------------------------------------
Property
------------------------------------------------------------------------------------------------------------------------------------------------------
Macro-economic Likelihood of macro-economic
Weakness in * Prime asset = weakness continues
the to be a risk with
macro-economic political uncertainty
environment * Covenant headroom monitored and stress-tested in the UK and Brexit
could arrangements not yet
undermine detailed
rental income * Make representation on key policies, for example * Property value remains stable in the period
levels and business rates
property
values, * Substantial covenant headroom
reducing * Leveraging the strength of the intu brand to attract
return and retain aspirational retailers
on investment
and covenant
headroom
--------------- -------------------------------------------------------------- ------- ------------------------------------------------------------
Retail = Likelihood and severity
environment * Active management of tenant mix of potential impact
Failure to are unchanged in 2017
react to with intu's strategy
changes * Regular monitoring of tenant strength and diversity continuing to deliver
in the retail strong footfall numbers
environment and occupancy
could * 'Tell intu' customer feedback programme helps * Continuing digital investment to improve relevance as
undermine identify changes in customer preferences shopping habits change
intu Trafford
Centre's
ability * Work closely with retailers * Footfall continues to be ahead of benchmark
to attract
customers
and tenants * 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
--------------- -------------------------------------------------------------- ------- ------------------------------------------------------------
OPERATING AND FINANCIAL REVIEW
FOR THE SIX MONTHSED 30 JUNE 2017
KEY RISKS AND UNCERTAINTIES (CONTINUED)
Risk & Impact Mitigation Change 2017 commentary
--------------- ------------------------------------------------------------ ------- ----------------------------------------------------------------
Operations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Health and Likelihood of potential
safety * Strong business process and procedures, including = impact has not changed
Accidents compliance with OHSAS 18001, supported by regular significantly during
or system training and exercises the first half of
failure 2017, however severity
leading impacted by new enforcement
to financial * Annual audits of operational standards carried out structure
and/or internally and by external consultants * Maintenance of OHSAS 18001 certification,
reputational demonstrating consistent health and safety management
loss process and procedures across the portfolio
* Culture of visitor, staff and contractor safety
* Work continuing towards achieving additional
* Crisis management and business continuity plans in accreditations with focus on ISO 14001
place and tested
* Award of the golden status from the Royal Society for
* Retailer liaison and briefings the Prevention of Accidents
* 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
--------------- ------------------------------------------------------------ ------- ----------------------------------------------------------------
Cyber-security = Likelihood has increased
Loss of * Data and cyber security strategies with increased reliance
data and on operational and
information third party systems
or failure * Regular testing programme and cyber scenario exercise and data, and with
of key systems and benchmarking the number of recent
resulting high profile hacks.
in financial Severity of potential
and/or * Appropriate levels of insurance impact has reduced
reputational by significant development
loss of tools and controls.
* Crisis management and business continuity plans in We have experienced
place and tested attempted cybersecurity
hacks which have not
resulted in any data
* Data committee and data protection officer in place loss or major operational
impacts. We continue
to prioritise on the
* Monitoring of regulatory environment and best cybersecurity programme
practice of works
* Ongoing intu-wide cybersecurity project with
investment in tools, consultancy and staff to
* Cybersecurity assessment performed by external mitigate impact of threats from evolving
consultancy and full action plan in place (programme cybersecurity landscape
of works)
* Managing of supply chain and service providers who
hold intu data
--------------- ------------------------------------------------------------ ------- ----------------------------------------------------------------
OPERATING AND FINANCIAL REVIEW
FOR THE SIX MONTHSED 30 JUNE 2017
KEY RISKS AND UNCERTAINTIES (CONTINUED)
Terrorism = Overall likelihood
Terrorist * Strong business process and procedures, supported by and severity of potential
incident regular training and exercises, designed to adapt and impact unchanged.
at intu respond to changes in risk levels In May 2017 we enacted
Trafford our operational plan
Centre or for the period of
another * Extraordinary pre-planned operational responses to increased threat level.
major changes in national threat level The threat level was
shopping subsequently reduced
centre to the prior threat
resulting * Annual audits of operational standards and physical level
in loss protection measures carried out internally and by * National threat level remains at Severe
of external agencies
consumer
confidence * Major scenario exercise completed at intu Trafford
with * Culture of visitor, staff and contractor safety Centre with involvement of multiple external agencies
consequent
impact on
lettings * Crisis management and business continuity plans in * Operating procedures in place for the introduction of
and rental place and tested with involvement of multiple further security measures if required
growth external agencies
* Retailer liaison and briefings
* Appropriate levels of insurance
* Strong relationships and frequent liaison with police,
NaCTSO and other agencies
* NaCTSO approved to train staff in counter-terrorism
awareness programme
* Internal head of security appointed
----------- ------------------------------------------------------------- ------------------------------------------------------------
DIRECTORS' RESPONSIBILITY STATEMENT
FOR THE SIX MONTHSED 30 JUNE 2017
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 Guidance and Transparency
Rules sourcebook 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
David Fischel
Director
18 September 2017
INDEPENT 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 2017. 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 Guidance and Transparency Rules sourcebook 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 2017;
-- 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 Guidance and Transparency Rules
sourcebook 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 Guidance and Transparency Rules
sourcebook 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 Guidance and Transparency Rules
sourcebook 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.
INDEPENT REVIEW REPORT TO THE DIRECTORS OF
THE TRAFFORD CENTRE FINANCE LIMITED
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
18 September 2017
INCOME STATEMENT (unaudited)
FOR THE SIX MONTHSED 30 JUNE 2017
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
Notes GBP000 GBP000 GBP000
Administration expenses (10) (24) (29)
----------- ----------- ------------
Operating loss (10) (24) (29)
Finance income 4 24,427 24,656 48,743
Finance costs 4 (24,386) (24,633) (48,694)
Change in fair value 4 - - -
of financial instruments
----------- ----------- ------------
Net finance income 41 23 49
----------- ----------- ------------
Profit/(loss) before
tax 31 (1) 20
Taxation - - -
----------- ----------- ------------
Profit/(loss) for the
period 31 (1) 20
=========== =========== ============
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 2017
As at As at As at
30 June 31 December 30 June
2017 2016 2016
Notes GBP000 GBP000 GBP000
Non-current assets
Trade and other receivables 5 745,559 755,936 762,990
Derivative financial
instruments 8 99,830 108,396 128,871
---------- ------------ ----------
845,389 864,332 891,861
Current assets
Trade and other receivables 5 27,926 23,833 23,134
Derivative financial
instruments 8 1,653 1,594 1,510
Cash and cash equivalents 426 386 346
---------- ------------ ----------
30,005 25,813 24,990
Total assets 875,394 890,145 916,851
---------- ------------ ----------
Current liabilities
Borrowings 7 (17,417) (14,007) (13,682)
Trade and other payables 6 (10,049) (9,357) (8,964)
Derivative financial
instruments 8 (1,653) (1,594) (1,510)
---------- ------------ ----------
(29,119) (24,958) (24,156)
Non-current liabilities
Borrowings 7 (745,559) (755,936) (762,990)
Derivative financial
instruments 8 (99,830) (108,396) (128,871)
---------- ------------ ----------
(845,389) (864,332) (891,861)
Total liabilities (874,508) (889,290) (916,017)
---------- ------------ ----------
Net assets 886 855 834
========== ============ ==========
Equity
Share capital 9 - - -
Retained earnings 886 855 834
---------- ------------ ----------
Total equity 886 855 834
========== ============ ==========
STATEMENT OF CHANGES IN EQUITY (unaudited)
FOR THE SIX MONTHSED 30 JUNE 2017
Share Retained Total
capital earnings equity
GBP000 GBP000 GBP000
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
========== ========= =======
At 1 July 2016 - 834 834
---------- --------- -------
Profit for the period - 21 21
---------- --------- -------
Total comprehensive income
for the period - 21 21
---------- --------- -------
At 31 December 2016 - 855 855
========== ========= =======
At 1 January 2017 - 855 855
---------- --------- -------
Profit for the period - 31 31
---------- --------- -------
Total comprehensive income
for the period - 31 31
---------- --------- -------
At 30 June 2017 - 886 886
========== ========= =======
STATEMENT OF CASH FLOWS (unaudited)
FOR THE SIX MONTHSED 30 JUNE 2017
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
Notes GBP000 GBP000 GBP000
Cash generated from operations 11 255 1 1,722
Interest received 23,103 24,375 46,383
Interest paid (23,318) (24,336) (48,025)
----------- ----------- ------------
Cash flows from operating
activities 40 40 80
----------- ----------- ------------
Amounts owed by group
undertaking - received 7,415 6,953 14,129
----------- ----------- ------------
Cash flows from investing
activities 7,415 6,953 14,129
Borrowings repaid (7,415) (6,953) (14,129)
Cash flows from financing
activities (7,415) (6,953) (14,129)
----------- ----------- ------------
Net increase in cash and
cash
equivalents 40 40 80
Cash and cash equivalents
at beginning of
period 386 306 306
----------- ----------- ------------
Cash and cash equivalents
at end of period 426 346 386
=========== =========== ============
NOTES (unaudited)
FOR THE SIX MONTHSED 30 JUNE 2017
1. Basis of preparation
The condensed set of interim financial statements ("interim
financial statements") for the six months ended 30 June 2017 are
unaudited. The interim financial statements have been prepared in
accordance with the Disclosure Guidance and Transparency Rules
sourcebook 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 2016 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 interim financial statements should be read in conjunction
with the company's financial statements for the year ended 31
December 2016 which have been prepared in accordance with
International Financial Reporting Standards ("IFRS") 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
2016. In particular, significant judgement is required in the use
of estimates and assumptions in the valuation and accounting for
derivative financial instruments.
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 net
rental income forecasts of The Trafford Centre Limited. 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.
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2017
2. Accounting policies
The accounting policies applied are consistent with those of the
company's financial statements for the year ended 31 December 2016
as set out on pages 12 to 14 of that Report and Financial
Statements as amended when relevant to reflect the adoption of new
standards, amendments and interpretations which became effective in
the period. These amendments have not had an impact on the
financial statements. 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. Operating segments
Management have not identified separate operating segments and
rely on information presented in the primary statements for
decision making purposes.
4. Net finance costs
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
Finance income
On amounts due from group
undertaking 24,427 24,656 48,743
Other interest - - -
---------- ---------- ------------
24,427 24,656 48,743
========== ========== ============
Finance costs
On borrowings (24,385) (24,616) (48,664)
Other interest (1) (17) (30)
---------- ---------- ------------
(24,386) (24,633) (48,694)
========== ========== ============
Change in fair value of
financial instruments
On external derivative financial
instruments 8,567 (40,814) (20,338)
On derivative financial
instruments with
The Trafford Centre Limited (8,567) 40,814 20,338
---------- ---------- ------------
- - -
========== ========== ============
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2017
5. Trade and other receivables
As at As at As at
30 June 31 December 30 June
2017 2016 2016
GBP000 GBP000 GBP000
Current
Amounts owed by group
undertaking 18,342 14,927 14,591
Less: finance costs (925) (920) (909)
------- ----------- -------
Net loan amount 17,417 14,007 13,682
Accrued income and other
amounts due
from group undertaking 10,462 9,381 9,013
Prepayments 44 445 439
Other receivables 3 - -
------- ----------- -------
27,926 23,833 23,134
======= =========== =======
As at As at As at
30 June 31 December 30 June
2017 2016 2016
GBP000 GBP000 GBP000
Non-current
Amounts owed by group
undertaking 756,855 767,684 775,197
Less: finance costs (11,296) (11,748) (12,207)
--------- ----------- ---------
Net loan amount 745,559 755,936 762,990
========= =========== =========
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 on the average principal loan amount outstanding.
Interest is also due to cover any fees and costs incurred by the
company.
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2017
6. Trade and other payables
As at As at As at
30 June 31 December 30 June
2017 2016 2016
GBP000 GBP000 GBP000
Amounts owed to group
undertaking 1,802 797 318
Accruals 8,247 8,560 8,646
------- ----------- -------
10,049 9,357 8,964
======= =========== =======
Amounts owed to group undertakings are unsecured and repayable
on demand. No interest is charged on these amounts.
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2017
7. Borrowings
Interest Final As at Year ended As at
rate maturity 30 June 31 December 30 June
2017 2016 2016
GBP000 GBP000 GBP000
Current
Secured notes:
Class
D2 8.28% 2022 2,780 - -
B 7.03% 2029 4,302 4,016 4,018
A2 6.5% 2033 11,260 10,911 10,573
--------- ------------ ---------
Debt falling
due
within one
year 18,342 14,927 14,591
Less: finance
costs (925) (920) (909)
--------- ------------ ---------
Net loan
amount 17,417 14,007 13,682
========= ============ =========
Non-current
Secured notes:
Class
A2 6.5% 2033 292,438 298,158 303,698
A3 Floating 2035 188,500 188,500 188,500
A4 2.875% 2019 20,000 20,000 20,000
B 7.03% 2029 69,643 71,972 73,945
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 47,220 50,000 50,000
D3 4.750% 2024 70,000 70,000 70,000
Debt falling
due
after one
year 756,855 767,684 775,197
Less: finance
Costs (11,296) (11,748) (12,207)
--------- ------------ ---------
Net loan
amount 745,559 755,936 762,990
========= ============ =========
Total
borrowings 762,976 769,943 776,672
========= ============ =========
The fair value of borrowings as at 30 June 2017 was
GBP898,890,000 (31 December 2016 GBP901,951,000, 30 June 2016
GBP923,353,000).
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2017
7. Borrowings (continued)
The maturity profile of gross debt is as follows:
As at As at As at
30 June 31 December 30 June
2017 2016 2016
GBP000 GBP000 GBP000
Repayable within one year 18,342 14,927 14,591
Repayable in more than
one year
but not more than two
years 45,497 23,179 18,342
Repayable in more than
two years
but not more than five
years 89,362 106,235 45,497
Repayable in more than
five years 621,996 638,270 711,357
-------- ----------- --------
775,197 782,611 789,787
======== =========== ========
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 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 GBP233,716,000
(31 December 2016 GBP230,045,000, 30 June 2016 GBP226,541,000) with
rates of 4.2%, 4.34% and 4.66% and an interest rate cap of
GBP3,838,000 (31 December 2016 GBP7,509,000, 30 June 2016
GBP11,013,000) 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 2017 was a liability of GBP101,500,000 (31 December 2016
GBP109,990,000, 30 June 2016 GBP131,332,000).
8. Derivative financial instruments
All derivative financial instrument liabilities relate to
interest rate swaps with a counterparty which are classified as
held for trading. All derivative financial instrument assets relate
to interest rate swap arrangements with The Trafford Centre Limited
under the same terms as the interest rate swaps with the
counterparty.
9. Share capital
As at
30
June 2017
GBP
Issued, called up and fully paid
At 31 December 2016 and 30 June 2017 - 2
ordinary shares of GBP1 each 2
=========
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2017
10. Financial instruments
The table below presents the company's financial assets and
liabilities recognised at fair value at 30 June 2017, 31 December
2016 and 30 June 2016.
As at 30 June 2017
Level Level Level Total
1 2 3
GBP000 GBP000 GBP000 GBP000
Assets
Derivative financial
instruments:
- Fair value through
profit or loss - 101,483 - 101,483
-------- ---------- ------ ----------
Total assets - 101,483 - 101,483
-------- ---------- ------ ----------
Liabilities
Derivative financial
instruments:
- Fair value through
profit or loss - (101,483) - (101,483)
-------- ---------- ------ ----------
Total liabilities - (101,483) - (101,483)
======== ========== ====== ==========
As at 31 December 2016
Level Level Level Total
1 2 3
GBP000 GBP000 GBP000 GBP000
Assets
Derivative financial
instruments:
- Fair value through
profit or loss - 109,990 - 109,990
-------- ---------- ------ ----------
Total assets - 109,990 - 109,990
-------- ---------- ------ ----------
Liabilities
Derivative financial
instruments:
- Fair value through
profit or loss - (109,990) - (109,990)
-------- ---------- ------ ----------
Total liabilities - (109,990) - (109,990)
======== ========== ====== ==========
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2017
10. Financial instruments (continued)
As at 30 June 2016
Level Level Level Total
1 2 3
GBP000 GBP000 GBP000 GBP000
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.
NOTES (unaudited) (continued)
FOR THE SIX MONTHSED 30 JUNE 2017
10. Financial instruments (continued)
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 2017, 31 December 2016 and 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 2017 GBP000 GBP000 GBP000
Derivative financial instrument
assets 101,483 101,483 (8,567)
---------- ---------- ------------
Total held for trading assets 101,483 101,483 (8,567)
---------- ---------- ------------
Trade and other receivables 773,438 773,438 -
Cash and cash equivalents 426 426 -
---------- ---------- ------------
Total cash and receivables 773,864 773,864 -
---------- ---------- ------------
Derivative financial instrument
liabilities (101,483) (101,483) 8,567
---------- ---------- ------------
Total held for trading liabilities (101,483) (101,483) 8,567
---------- ---------- ------------
Trade and other payables (1,802) (1,802) -
Borrowings (762,976) (898,890) -
---------- ---------- ------------
Total loans and payables (764,778) (900,692) -
========== ========== ============
Gain/(loss)
Carrying Fair to income
value value statement
As at 31 December 2016 GBP000 GBP000 GBP000
Derivative financial instrument
assets 109,990 109,990 20,338
---------- ---------- ------------
Total held for trading assets 109,990 109,990 20,338
---------- ---------- ------------
Trade and other receivables 779,324 911,332 -
Cash and cash equivalents 386 386 -
---------- ---------- ------------
Total cash and receivables 779,710 911,718 -
---------- ---------- ------------
Derivative financial instrument
liabilities (109,990) (109,990) (20,338)
---------- ---------- ------------
Total held for trading liabilities (109,990) (109,990) (20,338)
---------- ---------- ------------
Trade and other payables (797) (797) -
Borrowings (769,943) (901,951) -
---------- ---------- ------------
Total loans and payables (770,740) (902,748) -
========== ========== ============
NOTES (unaudited) (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2017
10. Financial instruments (continued)
Gain/(loss)
Carrying Fair to income
value value statement
As at 30 June 2016 GBP000 GBP000 GBP000
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) -
========== ========== ============
11. Cash generated from operations
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
Profit/(loss) before tax 31 (1) 20
Remove:
Finance income (24,427) (24,656) (48,743)
Finance costs 24,386 24,633 48,694
Changes in working capital:
Change in trade and other
receivables 194 (253) 1,004
Change in trade and other
payables 71 278 747
---------- ---------- -----------
255 1 1,722
========== ========== ===========
12. 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
Guidance and Transparency Rules sourcebook or under IAS 34 Interim
Financial Reporting except those disclosed elsewhere in this
condensed set of interim financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BXGDCCXBBGRC
(END) Dow Jones Newswires
September 19, 2017 10:00 ET (14:00 GMT)
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