Final Results and Audited Annual Report and Accounts for the Year to 31 March 2021 DGAP

Walls & Futures REIT PLC (WAFR)
Final Results and Audited Annual Report and Accounts for the Year to 31 March 2021

09-Sep-2021 / 16:30 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.


THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.

 

9 September 2021

WALLS & FUTURES REIT PLC

 

 ("Walls & Futures" or the "Company")

 

Final Results and Audited Annual Report and Accounts for the Year to 31 March 2021

 

Walls & Futures REIT plc ("WAFR") the Ethical Housing Investor and Developer, is pleased to announce its final results and the publication of its audited annual report and accounts for the year to 31 March 2021. A copy of the annual report and accounts has been published on the Company's website, www.wallsandfutures.com, in accordance with its articles of association, and can also be viewed through a link at the bottom of this announcement.

 

Walls & Futures is an ethical housing investor and developer on a mission to address the unfulfilled demand for specialist social housing in the UK.

 

We design, fund and develop specialist social housing which is let on Full Repairing and Insuring (FRI), inflation linked leases to our partners and customers who include local authorities, registered providers and charities. Their tenants are often individuals with learning & physical disabilities, autism, dementia, mental health and life changing injuries.

 

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

 

  • Net Asset Value (NAV) down 4.9% to 102p per share (2020: 107p per share)
  • Revenue £148,420 up 7.5% (2020: £138,036)
  • Loss -£214,169 (2020: Profit of £625,767)
  • 100% of Specialist Supported Housing rents collected
  • 97% of Private Rental Sector rents collected
  • Investment property value fell by 1%
  • Earnings per share -5.70p (2020: 16.93p)
  • Outperformed MSCI UK residential benchmark by 423% for year ending 31 December 2020
  • Generated over £1.3m cash through sale of two Private Rented Sector (PRS) properties with funds to be invested in new SSH
  • Repaid entire £600,000 revolving credit facility
  • Pipeline of new partners & projects

 

Key elements of the final results can be viewed below.

 

Joe McTaggart, CEO of Walls & Futures REIT plc said:

 

"Against the challenging economic backdrop caused by Covid-19, we are pleased with the performance of our portfolio which saw 100% of our Specialist Supported Housing rents and 97% of our Private Rental Rents collected.

 

Our investment strategy showed further resilience as we outperformed our benchmark, the MSCI UK Residential Annual Property Index for the fourth year running with a total return of 3.53% over 0.57%.

 

 We're looking forward to announcing further partners in the coming months and continuing to build the future of specialist supported housing with the launch of our bespoke modular housing solution for autism."

 

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

 

Against the challenging economic backdrop caused by Covid-19, which has seen many property companies experience non-payment of rents and significant falls in asset values, we are pleased with the robust performance of our portfolio. For the 12 months to 31st March 2021, we collected 100% of the Specialist Supported Housing (SSH) and 97% of Private Rental Sector (PRS) rents due.

 

Part of our strategy, previously outlined, involved selling our London PRS properties, which were let on Assured Shorthold Tenancies (ASTs), to fund further SSH investments. The sale was delayed by emergency legislation introduced by the government to protect tenants on ASTs, with notice periods increased to 6 months. Working with our tenants we completed the sale of two of the three properties.

 

Our Wimbledon property completed in June 2020 at £656,000 and was followed by one of our Southfields properties which completed in January 2021 at £660,000. Generating a total of £1,316,000 in cash before fees, part of which was used to pay down our £600,000 revolving credit facility.

 

Following the valuation of our property assets, we can report a modest fall of 1.9% due to a fall in our last PRS property. Our SSH assets remained the same as last year. As at 31st March 2021, our Net Asset Value (NAV) fell by 4.9% to 102p per share.

 

Our investment strategy built on developing our own projects has enabled us to build a resilient portfolio. We are delighted to announce that for the calendar year ending 2020, our portfolio outperformed the benchmark, MSCI UK Residential property index delivering a total return of 3.53% vs 0.57%. This is the fourth consecutive year we have outperformed the benchmark. Our intention is to scale the business so our investment strategy, which averaged a total return of 268%, is reflected in terms of operating cash flow and share price.

 

To illustrate the financial impact of our strategy, we have to date invested a total of £1.34 million in SSH developments. Based on the long-term nature of the leases, the quality of the covenants and the income generated they are currently valued at £2.57 million. An increase of £1.23 million in value or 92 percent.

 

Unsolicited offer and share price performance

 

On 8th April 2021, we received an unsolicited bid from Virgata Services Ltd. It materially undervalued the company and was overwhelmingly rejected by our shareholders and ultimately lapsed on 6th July 2021.

 

Our share price has underperformed relative to our NAV over the last few years. We believe a significant component this is due to a small number of shareholders who hold their Walls & Futures Shares on one particular investment platform continually selling because the platform was unfamiliar with the regulatory status of the AQSE Growth Market.

 

We believe the majority of the Shareholders are long term holders so in the short term we are actively working to engage with new investors to replace the minority of shareholders who voted to accept the bid. With fewer investors selling and more buying into the company we believe this will serve to close the discount that we currently trade at.

 

Additionally, we have had constructive discussions with Aquis regarding improving liquidity in Walls & Futures Shares.

 

In November 2020, the Aquis Stock Exchange introduced a new market-making scheme with founding market makers Canaccord Genuity, Liberum, Peel Hunt, Shore Capital, Stifel and Winterflood Securities all supporting the initiative to reduce spreads and increase liquidity.

 

Both AJ Bell and Interactive Investor recently announced that they have added AQSE Growth Market securities to their online trading platforms, extending AQSE Growth Market investment opportunities to over 500,000 retail investors. It is reported that Hargreaves Lansdown and IG Group are also working with Aquis to include Aquis Stock Exchange traded securities on their online offering, joining Barclays Smart Invest and Jarvis who already offer most AQSE Growth Market securities online.

 

Outlook for the future

 

Throughout 2020, we actively engaged with stakeholders including special education needs (SEN) schools, care providers, local authority commissioners, charities and housing associations in order to identify an area that was not being adequately served.

 

We concluded that autism was an area where we could apply our experience of delivering high quality, design led, specially adapted homes. This has enabled us to maximise both our positive social impact and generate returns for our ethically minded investors.

 

We have developed direct relationships with new partners across a network of specialist charities, care providers and housing associations who provide support, care and advice to those affected by autism.

 

Together with these partners, who geographically cover most of England, we plan to provide small, innovative housing solutions to accommodate three to ten individuals with autism per development. The aim is to provide our partners with the ability to deliver a pathway of progress and highly specialised services which can support individuals, from childhood (as young as seven), through adolescence and onto adulthood. With the right support, individuals will be able to progress through autism-specific homes and avoid hospitals.

 

We have now agreed lease terms and signed memorandums of understanding with new partners covering the North East, South West and the South East. These memorandums set out the framework for the provision of SSH which will be let to our partners on long term leases and work together on joint venture opportunities to deliver new schemes. There is no guarantee that these memorandums will result in final agreements being entered into with these partners.

 

We are in the process of finalising the design of our bespoke home for autism. Designed in collaboration with a specialist architectural practice and our partners, we believe our autism housing solution enables us to deliver homes at scale, that support the needs and sensory requirements of individuals across the autism spectrum.

 

Designed in pods and constructed off site, using modern building methods (modular), we will be able to offer a wide range of configurations from a single one-bedroom self-contained apartment to a cluster of eight one- or two-bedroom apartments with communal areas and sensory/therapy rooms plus staff office and overnight accommodation, providing 24/7 care if required.

 

The use of modular construction can reduce the build process by up to 50 per cent. enabling us to deliver projects in as little as 12 weeks when compared to traditional construction methods. Additionally, the materials used in modular construction make it more sustainable and have less of an impact on the environment, enabling us to make progress towards net zero.

 

Future funding
 

During the 2020-21 year we disposed of all but one of our PRS assets generating a total of £1,316,000 in cash before fees, part of which was used to pay down our £600,000 revolving credit facility.

 

In the short term, our new investments will be made from our cash deposits and from the capital released from the expected sale of our final London property. Based on our internal estimates, we estimate we would be able to invest approximately £1 million in these projects.

 

We will seek to raise fresh capital to fund the remainder of our pipeline, which will consist of new build developments, from investors seeking to make a real positive social impact; however, we will not raise new equity at the current substantial discount to net asset value, as this would result in a significant dilution to Shareholders. The Company is also able to draw down on its £600,000 secured revolving credit facility until April 2024, on which it currently has no funds drawn.

 

Finally, we would like to thank all our shareholders for their continued support.

 

Consolidated Income Statement for the year ended 31 March 2021

 

 

2021

 

2020

 

£

 

£

TURNOVER

148,420

 

138,036

 

 

 

 

Cost of sales

40,106

 

13,286

 

 

 

 

GROSS PROFIT

108,314

 

124,750

 

 

 

 

Administrative expenses

259,285

 

275,725

 

 

 

 

 

-150,971

 

-150,975

 

 

 

 

Other operating income

-21,861

-

 

Gain/loss on revaluation of tangible assets

-35,000

 

797,686

 

 

 

 

 

 

 

 

OPERATING (LOSS)/PROFIT

-207,832

 

646,711

 

 

 

 

Interest receivable and similar income

27

 

350

 

 

 

 

 

 

 

 

 

-207,805

 

647,061

 

 

 

 

Interest payable and similar expenses

6,364

 

21,226

 

 

 

 

(LOSS)/PROFIT BEFORE TAXATION

-214,169

 

625,835

 

 

 

 

 

 

 

 

Tax on (loss)/profit

-

 

67

 

 

 

 

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

-214,169

 

625,768

 

 

 

 

 

 

 

 

(Loss)/profit attributable to:

 

 

 

Owners of the parent

-214,169

 

625,768

 

 

 

 

 

 

 

 

Earnings per share expressed

 

 

 

in pence per share:

 

 

 

Basic

-5.7

 

16.93

Diluted

-5.7

 

16.93

 

 

Consolidated Statement of Financial Position as at 31 March 2021

 

 

 

2021

 

2020

 

£

£

£

£

FIXED ASSETS

 

 

 

 

Tangible assets

 

-

 

631

Investments

 

-

 

-

Investment property

 

3,215,000

 

4,625,000

 

 

 

 

 

 

 

3,215,000

 

4,625,631

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

Debtors

3,421

 

4,489

 

Cash at bank

651,357

 

22,306

 

 

 

 

 

 

 

654,778

 

26,795

 

CREDITORS

 

 

 

 

Amounts falling due within one year

25,281

 

18,760

 

 

 

 

 

 

 

 

 

 

 

NET CURRENT ASSETS

 

629,497

 

8,035

 

 

 

 

 

TOTAL ASSETS LESS CURRENT LIABILITIES

 

 

 

 

 

 

3,844,497

 

4,633,666

 

 

 

 

 

 

 

 

 

 

CREDITORS

 

 

 

 

Amounts falling due after more than one year

 

25,000

 

600,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET ASSETS

 

3,819,497

 

4,033,666

 

 

 

 

 

 

 

 

 

 

CAPITAL AND RESERVES

 

 

 

 

Called up share capital

 

187,754

 

187,754

Share premium

 

3,505,154

 

3,505,154

Fair value reserve

 

1,188,519

 

1,111,019

Retained earnings

 

-1,061,930

 

-770,261

 

 

 

 

 

SHAREHOLDERS' FUNDS

 

3,819,497

 

4,033,666

 

Consolidated Statement of Cash Flows for the year ended 31 March 2021

 

 

2021

2020

 

£

£

Cash flows from operating activities

 

 

Cash generated from operations

-110,612

-148,459

Interest paid

-6,364

-21,226

 

 

 

Net cash from operating activities

-116,976

-169,685

 

 

 

 

 

 

Cash flows from investing activities

 

 

Purchase of investment property

-

-657,314

Sale of investment property

1,316,000

-

Interest received

27

350

 

 

 

Net cash from investing activities

1,316,027

-656,964

 

 

 

 

 

 

Cash flows from financing activities

 

 

New loans in year

30,000

600,000

Loan repayments in year

-600,000

-

Share issue

-

7,143

Share premium paid

-

92,857

 

 

 

Net cash from financing activities

-570,000

700,000

 

 

 

 

 

 

 

 

 

Increase/(decrease) in cash and cash equivalents

629,051

-126,649

Cash and cash equivalents at beginning of year

 

 

 

22,306

148,955

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of year

651,357

22,306

 


Attachment

File: Annual Report and Accounts for the Year to 31 March 2021


ISIN: GB00BD04QG09
Category Code: FR
TIDM: WAFR
LEI Code: 213800CJV93R1FPNT553
OAM Categories: 1.1. Annual financial and audit reports
Sequence No.: 121882
EQS News ID: 1232475

 
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