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DJ Walls & Futures REIT PLC Final Results and Notice of AGM

TIDMWAFR

RNS Number : 8437Y

Walls & Futures REIT PLC

24 August 2018

24 August 2018

WALLS & FUTURES REIT PLC

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

Final Results for the Year to 31 March 2018 & 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 2018. 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/8437Y_2-2018-8-24.pdf

Walls & Futures REIT plc is an Ethical Housing REIT providing homes for some of the most vulnerable people in society. Our strategy is to build a portfolio of high yielding residential properties let on long term leases, with rents increasing in line with inflation, to low risk tenants including Charities and Housing Associations.

Rather than acquire existing portfolios, we originate investments, dealing directly with Local Authorities, Housing Associations and Charities. This approach enables us to directly add capacity and ensure the quality of the homes delivered while creating immediate equity growth and higher yields.

Walls & Futures REIT plc do not have any involvement with care delivered within the properties, this is managed by care providers approved by Local Authorities.

Highlights:

   --     Revenue up by 126.6% to GBP102,901 (2017: GBP45,400) 
   --     Profit before tax increased to GBP45,386 (2017: Loss of GBP314,716) 
   --     Investment property value increased 9.22% 
   --     Earnings per share 1.38p (2017: -17.07p) 
   --     Net Asset Value per share 92p (2017: 90p) 
   --     Delivered our first Supported Housing development, providing six new places 
   --     Joined MSCI IPD UK Residential Index 

-- Portfolio performance for the calendar year 2017 delivered a total return of 11.5% against benchmark 7%

   --     Joined Social Stock Exchange/Impact Investment Network 
   --     Named "Impact Company of the Year" at the 2018 NEX Exchange Small Cap Awards 

-- Raised GBP222,603 in new equity in the year, (with GBP80,080 raised after the year end in May 2018)

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 27 September 2018 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/8437Y_1-2018-8-24.pdf

A resolution will be proposed at the AGM to approve a new Management Incentive Plan (the "MIP"). The MIP will be a discretionary cash and share incentive plan operated by Walls & Futures for the benefit of its senior management for their contribution to the achievement of Walls & Futures annual company goals and objectives. It is designed so as to:

   --    align with the business strategy and the achievement of planned business goals; 
   --    support the creation of sustainable long-term shareholder value; and 

-- provide an appropriate balance between remuneration elements that attract, retain and motivate the highest calibre of executive talent.

Further information on the MIP can be viewed in Appendix 1 of 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

Overview & Strategy

During the year the Group completed its first supported housing property, a freehold, detached grade two listed building, in the Cotswold market town of Stroud. The renovation and redevelopment successfully completed at the end of August to provide a high-quality home with specialist support for six adults with physical & learning disabilities.

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 leading care providers who has more than 50 years of experience and expertise in the sector and currently supports more than 2,500 adults nationwide.

In February 2018 we announced that we had joined MSCI IPD UK Residential Property Index. The index measures unleveraged total returns of directly held standing property investments. As of December 2016, it tracked the performance of 11,201 residential property investments, with a total capital value of GBP12.1 billion. Being part of the MSCI IPD UK Residential Property Index provides our shareholders with a transparent and meaningful method of comparing our absolute and relative performance with that of the index and our larger peers.

For the calendar year 2017, our portfolio delivered a total return of 11.5% against the MSCI IPD UK Residential index, which returned 7%. We believe this illustrates the performance benefit of our development strategy.

In March 2018, applications were received by the Company in respect of the new share offer. A total of 236,812 ordinary shares were issued, the gross proceeds received from this subscription were GBP222,603.28.

Post balance sheet events

On 22 May 2018 the Company issued a total of 85,192 Ordinary Shares of 5p at 94p each. The gross proceeds received by the Company from this subscription are GBP 80,080.

On 1 June 2018, the Company appointed Allenby Capital Limited as its NEX Exchange Growth market Corporate Advisor.

On 14 June 2018, the Company was named "Impact Company of the Year" at the 2018 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).

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 does not currently have any borrowings and is therefore not currently exposed to interest rate risk. It does however have an ongoing requirement to fund its activities through the debt and/or equity markets and in the future to obtain finance for property acquisitions. There is no certainty that such funds will be available when needed and thus 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 potential investments with a number of transactions currently under consideration and 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 2018.

Dividends

No dividends will be distributed for the year ended 31 March 2018.

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

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DJ Walls & Futures REIT PLC Final Results and Notice -2-

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

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 2018 
                                          Year ended   Period 18/3/16 
                                             31/3/18       to 31/3/17 
                                         -----------  --------------- 
                                                 GBP              GBP 
                                         -----------  --------------- 
 TURNOVER                                    102,901           45,400 
                                         -----------  --------------- 
 Cost of sales                                26,717           15,461 
                                         -----------  --------------- 
 
 GROSS PROFIT                                 76,184           29,939 
                                         -----------  --------------- 
 Administrative expenses                     229,223          112,342 
                                         -----------  --------------- 
                                           (153,039)         (82,403) 
                                         -----------  --------------- 
 Gain/loss on revaluation of tangible 
  assets                                     198,333         (30,000) 
                                         -----------  --------------- 
 
 OPERATING PROFIT/(LOSS)                      45,294        (112,403) 
                                         -----------  --------------- 
 Cost of fundamental reorganisation                -          202,333 
                                         -----------  --------------- 
                                              45,294        (314,736) 
                                         -----------  --------------- 
 Interest receivable and similar 
  income                                          92               22 
                                         -----------  --------------- 
                                              45,386        (314,714) 
                                         -----------  --------------- 
 Interest payable and similar expenses             -                2 
                                         -----------  --------------- 
 
 PROFIT/(LOSS) BEFORE TAXATION                45,386        (314,716) 
                                         -----------  --------------- 
 Tax on profit/(loss)                              -            (219) 
                                         -----------  --------------- 
 
 PROFIT/(LOSS) FOR THE FINANCIAL 
  YEAR                                        45,386        (314,497) 
                                         -----------  --------------- 
 
 Profit/(loss) attributable to: 
  Owners of the parent                        45,386        (314,497) 
                                         -----------  --------------- 
 
 
 Consolidated Other Comprehensive Income 
  For year ended 31 March 2018 
                                               Year ended   Period 18/3/16 
                                                  31/3/18       to 31/3/17 
                                              -----------  --------------- 
                                                      GBP              GBP 
                                              -----------  --------------- 
 PROFIT/(LOSS) FOR THE YEAR                        45,386        (314,497) 
                                              -----------  --------------- 
 
 OTHER COMPREHENSIVE INCOME 
                                              -----------  --------------- 
 Gain on bargain purchase                               -            2,509 
                                              -----------  --------------- 
 Income tax relating to other comprehensive             -                - 
  income 
                                              -----------  --------------- 
 
 OTHER COMPREHENSIVE INCOME FOR 
  THE YEAR, NET OF INCOME TAX                           -            2,509 
                                              -----------  --------------- 
 
 TOTAL COMPREHENSIVE INCOME FOR 
  THE YEAR                                         45,386        (311,988) 
                                              -----------  --------------- 
 
 Total comprehensive income attributable 
  to: 
  Owners of the parent                             45,386        (311,988) 
                                              -----------  --------------- 
 
 Earnings per share expressed in 
  pence per share: 
                                              -----------  --------------- 
 Basic                                              1.38p         (17.14)p 
                                              -----------  --------------- 
 Diluted                                            1.38p         (17.14)p 
                                              -----------  --------------- 
 
 
 Consolidated Statement of Financial Position 
  31 March 2018 
                                      2018                  2017 
                              --------------------  -------------------- 
                                 GBP        GBP        GBP        GBP 
                              --------  ----------  --------  ---------- 
 FIXED ASSETS 
                              --------  ----------  --------  ---------- 
 Investments                                     - 
                              --------  ----------  --------  ---------- 
 Investment Property                     3,025,000             2,150,000 
                              --------  ----------  --------  ---------- 
 
                                         3,025,000             2,150,000 
                              --------  ----------  --------  ---------- 
 CURRENT ASSETS 
                              --------  ----------  --------  ---------- 
 Debtors                       195,995                 4,749 
                              --------  ----------  --------  ---------- 
 Cash at bank                  44,186                842,911 
                              --------  ----------  --------  ---------- 
 
                               240,181               847,660 
                              --------  ----------  --------  ---------- 
 
 CREDITORS 
                              --------  ----------  --------  ---------- 
 Amounts falling due within 
  one year                                  18,955                19,423 
                              --------  ----------  --------  ---------- 
 NET CURRENT ASSETS                        221,226             2,978,237 
                              --------  ----------  --------  ---------- 
 
 TOTAL ASSETS LESS CURRENT 
  LIABILITIES                            3,246,226             2,978,237 
                              --------  ----------  --------  ---------- 
 
 CAPITAL AND RESERVES 
                              --------  ----------  --------  ---------- 
 Called up share capital                   176,352               164,511 
                              --------  ----------  --------  ---------- 
 Share premium                           3,336,476             3,125,714 
                              --------  ----------  --------  ---------- 
 Revaluation reserve                       168,333                     - 
                              --------  ----------  --------  ---------- 
 Retained earnings                       (434,935)             (311,988) 
                              --------  ----------  --------  ---------- 
 
 SHAREHOLDERS' FUNDS                     3,246,226             2,978,237 
                              --------  ----------  --------  ---------- 
 
 
 Consolidated Statement of Changes in Equity 
  For The Year Ended 31 March 2018 
 
                             Called    Retained       Share       Fair       Total 
                                 up    Earnings     Premium      value      Equity 
                              Share                            reserve 
                            Capital 
                          ---------  ----------  ----------  ---------  ---------- 
                                GBP         GBP         GBP        GBP         GBP 
                          ---------  ----------  ----------  ---------  ---------- 
 Changes in equity 
                          ---------  ----------  ----------  ---------  ---------- 
 Issue of share capital     164,511           -   3,125,714          -   3,290,225 
                          ---------  ----------  ----------  ---------  ---------- 
 Total comprehensive 
  income                          -   (311,988)           -          -   (311,988) 
                          ---------  ----------  ----------  ---------  ---------- 
 Balance at 31 March 
  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 
                          ---------  ----------  ----------  ---------  ---------- 
 
 
 Consolidated Statement of Cash Flows 

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DJ Walls & Futures REIT PLC Final Results and Notice -3-

  For year ended 31 March 2018 
                                           Year ended   Period 18/3/16 
                                              31/3/18       to 31/3/17 
                                          -----------  --------------- 
                                                  GBP              GBP 
                                          -----------  --------------- 
 Cash flows from operating activities 
                                          -----------  --------------- 
 Cash generated from operations             (152,517)        (268,115) 
                                          -----------  --------------- 
 Interest paid                                      -              (2) 
                                          -----------  --------------- 
 Tax paid                                       (562)              781 
                                          -----------  --------------- 
 
 Net cash from operating activities         (153,079)        (267,336) 
                                          -----------  --------------- 
 
 
 Cash flows from investing activities 
                                          -----------  --------------- 
 Purchase of investment property            (676,667)                - 
                                          -----------  --------------- 
 Interest received                                 92               22 
                                          -----------  --------------- 
 
 Net cash from investing activities         (676,575)               22 
                                          -----------  --------------- 
 
 Cash flows from financing activities 
                                          -----------  --------------- 
 Proceeds from issues of shares                30,929        1,110,225 
                                          -----------  --------------- 
 Net cash from financing activities            30,929        1,110,225 
                                          -----------  --------------- 
 
 (Decrease)/increase in cash and 
  cash equivalents                          (798,725)          842,911 
                                          -----------  --------------- 
 Cash and cash equivalents at beginning       842,911                - 
  of year 
                                          -----------  --------------- 
 Cash and cash equivalents at end 
  of year                                      44,186          842,911 
                                          -----------  --------------- 
 

About Walls & Futures REIT plc

Walls & Futures is an Ethical Housing REIT providing new homes for some of the most vulnerable people in society, including learning and physical disabilities, mental health needs, homelessness and extra care (housing with care for the elderly).

We collaborate with our customers, including charities and housing associations, to design, fund, build and deliver quality homes that are sustainable in terms of their environmental impact, energy efficiency and financially viability.

Our aim is to generate a measurable and beneficial social impact alongside a financial return, which is to deliver a long-term annual net return of 7-9% of which 3-4% will be paid in the form of a dividend.

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.

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