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DJ Walls & Futures REIT PLC Final Results

TIDMWAFR

RNS Number : 5499J

Walls & Futures REIT PLC

20 August 2019

20 August 2019

WALLS & FUTURES REIT PLC

("Wall & Futures" or the "Company")

Final Results for the Year to 31 March 2019 & Notice of AGM

Walls & Futures, the Ethical Housing REIT, is pleased to announce its final results and the publication of its audited annual report and accounts for the year to 31 March 2019. A copy of the annual report and accounts has been posted on the Company's website, www.wallsandfutures.com, and can also be viewed here:

http://www.rns-pdf.londonstockexchange.com/rns/5499J_1-2019-8-19.pdf

Walls & Futures is an Ethical Housing REIT aiming to generate long-term secure income by addressing the UK's social housing needs.

Our strategy is not to buy readymade existing portfolios from aggregators. Instead, we originate and develop our projects in partnership with our customers who are typically Local Authorities, established Housing Associations and Charities. Our tailored solutions enable us to cut out the middleman and make a margin on the development in addition to the rental income.

Walls & Futures REIT plc does not have any involvement with the care delivered within the properties, this is managed by care providers approved by local authorities.

Highlights include:

-- Revenue up 32% to GBP135,878 (2018: GBP102,901)

-- Loss -GBP18,308 (2017: Profit of GBP45,386)

-- Investment property value increased by 4.79%

-- Earnings per share -0.51p (2018: 1.38p)

-- Portfolio performance for the calendar year 2018 delivered a total return of 8.75% against the MSCI UK Residential Index of 5.2%.

Further details of the Company's financial results can be viewed below.

The Company also announces it has today posted the notice to shareholders of its Annual General Meeting "AGM"), which is to be held at 1.00 pm on Thursday 12 September 2019 at 3(rd) Floor, 111 Buckingham Palace Road, London, SW1W 0SR. A copy of the notice of AGM can be viewed on the Company's website, www.wallsandfutures.com, and can also be viewed here:

http://www.rns-pdf.londonstockexchange.com/rns/5499J_2-2019-8-19.pdf

A resolution will be proposed at the AGM to approve to cancel the entire amount standing to the credit of the Company's share premium account. The increased distributable reserves may be returned to the Company's shareholders by way of dividends and/or share buy-backs at a future date if the Directors consider it appropriate to do so.

The Share Premium Cancellation will have no impact on the Company's cash position or on its net assets, until such time as dividends or other distributions are made. It will also have no impact on the nominal value of the Company's ordinary shares.

Shareholders should note that unless the Share Premium Cancellation is approved at the AGM and subsequently by the Court, the Share Premium Cancellation will not be implemented, and the Company's ability to pay dividends may be constrained.

Further information on the Share Premium Cancellation can be viewed in the notice of AGM.

For further information, contact:

Walls & Futures REIT PLC 0333 700 7171

Joe McTaggart, Chief Executive

Website www.wallsandfutures.com

Allenby Capital Limited (Corporate Adviser)

Nick Harriss/James Reeve 020 3328 5656

Group Strategic Report

Overview

For the calendar year 2018, our portfolio delivered a total return of 8.75% against the MSCI IPDUK Residential index, which returned 5.2%. This is the second consecutive year we have outperformed the index and believe it demonstrates the potential of our development strategy.

In June 2018 we appointed Allenby Capital Limited as the Company's NEX Exchange Growth Market Corporate Adviser and Waterstone Company Secretaries Limited as Company Secretary.

In June 2018 we were named the "Impact Company of the Year" at the NEX Exchange Small Cap Awards. The annual event shines a light on the best companies and participants in the small and micro-cap community (sub GBP100m market capitalisation).

Post balance sheet event

On 3 June 2019, we announced that we had secured a GBP600,000 Revolving Credit Facility from a private lender, Monastery Hire and Sales Limited. Set to run for an initial 5-year term, at an interest margin of 3.5% over LIBOR. A fee of 0.1% per annum is payable on any undrawn balances. It will be used to provide flexibility to finance the acquisition and refurbishment of specialist supported housing.

On 4 June 2019, we announced that we can completed on the acquisition of a freehold detached bungalow in Didcot, Oxfordshire for GBP465,000. The property will be redeveloped and adapted to provide a high-quality home with specialist support, for four adults with physical & learning disabilities and/or mental health needs. We expect the redevelopment costs and eventual rental yield to be materially in line with that of our property in Stroud, Gloucestershire.

The property is being let on a 25-year full repairing and insuring lease, with rents adjusted annually in line with inflation (CPI), to one of the UK's largest and longest established providers who has more than 50 years of experience and expertise in the sector and currently supports more than 2,500 adults nationwide.

Principle risks & uncertainties

The Group portfolio is exclusively invested in the UK and therefore exposed to the risks and uncertainties of the UK economy.

The value of the properties are subject to fluctuating market conditions and may be affected by consumer confidence, the performance of the UK economy and liquidity in the market.

The Group currently has a revolving credit facility and is therefore exposed to interest rate risk. It does have an ongoing requirement to fund its activities through the debt and/or equity markets for future property acquisitions. There is no certainty that such funds will be available when needed and thus would inhibit growth.

Risk management

The success of the Group is predicated on increasing the size of the portfolio, which would be at risk without further capital. In order to mitigate this, the directors will be engaged in regular fund raising.

Outlook

We have developed a pipeline of new investments with a number of transactions currently under consideration and these will be announced as they are finalised.

The directors will continue the same investment policies which have been successful since joining the NEX Exchange Growth Market.

Report of the Directors

The directors present their report with the financial statements of the company and the group for the year ended 31 March 2019.

Dividends

No dividends will be distributed for the year ended 31 March 2019.

Events since the end of the year

Information relating to events since the end of the year is given in the notes to the financial statements.

Directors

The directors shown below have held office during the whole of the period from 1 April 2017 to the date of this report.

J K McTaggart

D P White

P A Wylie

Statement of directors' responsibilities

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

   --      select suitable accounting policies and then apply them consistently; 
   --      make judgements and accounting estimates that are reasonable and prudent; 

-- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement as to disclosure of information to auditors

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

Auditors

(MORE TO FOLLOW) Dow Jones Newswires

August 20, 2019 02:01 ET (06:01 GMT)

DJ Walls & Futures REIT PLC Final Results -2-

The auditors, Kingston Smith LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

 
 Consolidated Income Statement 
  For year ended 31 March 2019 
                                       Year ended   Year ended 
                                          31/3/19      31/3/18 
                                      -----------  ----------- 
                                              GBP          GBP 
                                      -----------  ----------- 
 TURNOVER                                 135,878      102,901 
                                      -----------  ----------- 
 Cost of sales                             13,607       26,717 
                                      -----------  ----------- 
 
 GROSS PROFIT                             122,271       76,184 
                                      -----------  ----------- 
 Administrative expenses                  286,093      229,223 
                                      -----------  ----------- 
                                        (163,822)    (153,039) 
                                      -----------  ----------- 
 Gain/loss on revaluation of 
  tangible assets                         145,000      198,333 
                                      -----------  ----------- 
 
 OPERATING PROFIT/(LOSS)                 (18,822)       45,294 
                                      -----------  ----------- 
 Cost of fundamental reorganisation             -            - 
                                      -----------  ----------- 
 
 Interest receivable and similar 
  income                                      522           92 
                                      -----------  ----------- 
 
 Interest payable and similar                   -            - 
  expenses 
                                      -----------  ----------- 
 
 PROFIT/(LOSS) BEFORE TAXATION           (18,300)       45,386 
                                      -----------  ----------- 
 Tax on profit/(loss)                         108            - 
                                      -----------  ----------- 
 
 PROFIT/(LOSS) FOR THE FINANCIAL 
  YEAR                                   (18,408)       45,386 
                                      -----------  ----------- 
 
 Profit/(loss) attributable to: 
  Owners of the parent                   (18,408)       45,386 
                                      -----------  ----------- 
 
 
 Consolidated Other Comprehensive Income 
  For year ended 31 March 2019 
                                            Year ended   Year ended 
                                               31/3/19      31/3/18 
                                           -----------  ----------- 
                                                   GBP          GBP 
                                           -----------  ----------- 
 PROFIT/(LOSS) FOR THE YEAR                   (18,408)       45,386 
                                           -----------  ----------- 
 
 OTHER COMPREHENSIVE INCOME 
                                           -----------  ----------- 
 Gain on bargain purchase                            -            - 
                                           -----------  ----------- 
 Income tax relating to other                        -            - 
  comprehensive income 
                                           -----------  ----------- 
 
 OTHER COMPREHENSIVE INCOME FOR                      -            - 
  THE YEAR, NET OF INCOME TAX 
                                           -----------  ----------- 
 
 TOTAL COMPREHENSIVE INCOME FOR 
  THE YEAR                                    (18,408)       45,386 
                                           -----------  ----------- 
 
 Total comprehensive income attributable 
  to: 
  Owners of the parent                        (18,408)       45,386 
                                           -----------  ----------- 
 
 Earnings per share expressed 
  in pence per share: 
                                           -----------  ----------- 
 Basic                                          -0.51p        1.38p 
                                           -----------  ----------- 
 Diluted                                        -0.51p        1.38p 
                                           -----------  ----------- 
 
 
 Consolidated Statement of Financial Position 
  31 March 2019 
                                     2019                  2018 
                             --------------------  -------------------- 
                                GBP        GBP        GBP        GBP 
                             --------  ----------  --------  ---------- 
 FIXED ASSETS 
                             --------  ----------  --------  ---------- 
 Investments                                1,263 
                             --------  ----------  --------  ---------- 
 Investment Property                    3,170,000             3,125,000 
                             --------  ----------  --------  ---------- 
 
                                        3,171,263             3,025,000 
                             --------  ----------  --------  ---------- 
 CURRENT ASSETS 
                             --------  ----------  --------  ---------- 
 Debtors                        4,363               195,995 
                             --------  ----------  --------  ---------- 
 Cash at bank                 148,955                44,186 
                             --------  ----------  --------  ---------- 
 
                              153,318               240,181 
                             --------  ----------  --------  ---------- 
 
 CREDITORS 
                             --------  ----------  --------  ---------- 
 Amounts falling due 
  within one year                          16,683                18,955 
                             --------  ----------  --------  ---------- 
 NET CURRENT ASSETS                       136,635               221,226 
                             --------  ----------  --------  ---------- 
 
 TOTAL ASSETS LESS CURRENT 
  LIABILITIES                           3,307,898             3,246,226 
                             --------  ----------  --------  ---------- 
 
 CAPITAL AND RESERVES 
                             --------  ----------  --------  ---------- 
 Called up share capital                  180,611               176,352 
                             --------  ----------  --------  ---------- 
 Share premium                          3,412,297             3,336,476 
                             --------  ----------  --------  ---------- 
 Revaluation reserve                      313,333               168,333 
                             --------  ----------  --------  ---------- 
 Retained earnings                      (598,343)             (434,935) 
                             --------  ----------  --------  ---------- 
 
 SHAREHOLDERS' FUNDS                    3,307,898             3,246,226 
                             --------  ----------  --------  ---------- 
 
 
 Consolidated Statement of Changes in Equity 
  For The Year Ended 31 March 2019 
 
                             Called    Retained       Share       Fair       Total 
                                 up    Earnings     Premium      value      Equity 
                              Share                            reserve 
                            Capital 
                          ---------  ----------  ----------  ---------  ---------- 
                                GBP         GBP         GBP        GBP         GBP 
                          ---------  ----------  ----------  ---------  ---------- 
 Balance at 1 April 
  2017                      164,511   (311,988)   3,125,714          -   2,978,237 
                          ---------  ----------  ----------  ---------  ---------- 
 
 Changes in equity 
                          ---------  ----------  ----------  ---------  ---------- 
 Issue of share capital      11,841           -     210,762                222,603 
                          ---------  ----------  ----------  ---------  ---------- 
 Total comprehensive 
  income                          -   (122,947)           -   168,333-      45,386 
                          ---------  ----------  ----------  ---------  ---------- 
 Balance at 31 March 
  2018                      176,352   (434,935)   3,336,476    168,333   3,246,226 
                          ---------  ----------  ----------  ---------  ---------- 
 
 Changes in equity 
                          ---------  ----------  ----------  ---------  ---------- 
 Issue of share capital       4,259           -      75,821                 80,080 
                          ---------  ----------  ----------  ---------  ---------- 
 Total comprehensive 
  income                          -   (163,408)           -    145,000    (18,408) 
                          ---------  ----------  ----------  ---------  ---------- 
 Balance at 31 March 
  2019                      180,611   (598,343)   3,412,297    313,333   3,307,898 
                          ---------  ----------  ----------  ---------  ---------- 
 
 
 Consolidated Statement of Cash Flows 
  For year ended 31 March 2019 
                                         Year ended   Year ended 
                                            31/3/19      31/3/18 
                                        -----------  ----------- 
                                                GBP          GBP 
                                        -----------  ----------- 
 Cash flows from operating activities 
                                        -----------  ----------- 
 Cash generated from operations           (165,603)    (152,517) 
                                        -----------  ----------- 
 Interest paid                                    -            - 
                                        -----------  ----------- 
 Tax paid                                       (9)        (562) 
                                        -----------  ----------- 
 
 Net cash from operating activities       (165,612)    (153,079) 

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August 20, 2019 02:01 ET (06:01 GMT)

DJ Walls & Futures REIT PLC Final Results -3-

                                        -----------  ----------- 
 
 
 Cash flows from investing activities       (1,894)            - 
                                        -----------  ----------- 
 Purchase of investment property                  -    (676,667) 
                                        -----------  ----------- 
 Interest received                              522           92 
                                        -----------  ----------- 
 
 Net cash from investing activities         (1,372)    (676,575) 
                                        -----------  ----------- 
 
 Cash flows from financing activities 
                                        -----------  ----------- 
 Share issue                                  4,259       11,840 
                                        -----------  ----------- 
 Share premium paid                         267,494       19,089 
                                        -----------  ----------- 
 Net cash from financing activities         271,753       30,929 
                                        -----------  ----------- 
 
 (Decrease)/increase in cash 
  and cash equivalents                      104,769    (798,725) 
                                        -----------  ----------- 
 Cash and cash equivalents at 
  beginning of year                          44,186      842,911 
                                        -----------  ----------- 
 Cash and cash equivalents at 
  end of year                               148,955       44,186 
                                        -----------  ----------- 
 

About Walls & Futures REIT plc

Walls & Futures is an Ethical Housing REIT generating long-term secure income by addressing the UK's social housing needs. We originate secure, index-linked, long-term, government funded revenues from specialist social housing & packages them into an investment REIT. Our target is a total return of 7% - 9% per annum.

Walls & Futures REIT plc was named "Impact Company of the Year" at the 2018 NEX Exchange Small Cap Awards.

Walls & Futures is quoted on the NEX Exchange Growth Market (Ticker: WAFR) and is a member of the Social Stock Exchange and Impact Investment Network.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

NEXLLFERTRIALIA

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August 20, 2019 02:01 ET (06:01 GMT)