Prospectus • Nov 21, 2014
Prospectus
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you should consult your independent financial adviser authorised under the Financial Services and Markets Act 2000 without delay.
This document comprises a supplementary prospectus relating to Picton Property Income Limited (the Company) prepared in accordance with the Prospectus Rules made under section 84 of the Financial Services and Markets Act 2000 (FSMA). This supplementary prospectus has been approved by the Financial Conduct Authority (the FCA) as a supplementary prospectus under section 87A of FSMA and has been filed with the FCA and made available to the public in accordance with section 3.2 of the Prospectus Rules. This document is supplemental to, and should be read in conjunction with the prospectus published by the Company on 1 May 2014 (the Prospectus) in connection with the issue of New Ordinary Shares pursuant to the Initial Placing, the Offer for Subscription and the Placing Programme (the Capital Raise) and the supplementary prospectuses published by the Company on, respectively, 14 July 2014, 4 August 2014 and 22 October 2014 (the Supplementary Prospectuses). Save as disclosed in this document there has been no significant change affecting any matter contained in the Prospectus and/ or the Supplementary Prospectuses and no significant new matter has arisen since publication of the last supplementary prospectus on 22 October 2014.
Words or expressions defined in the Prospectus have the same meaning when used in this document unless the context requires otherwise.
(an authorised closed-ended investment scheme incorporated as a non-cellular company limited by shares under the laws of Guernsey with registered number 43673)
J.P. Morgan Cazenove, which is authorised by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and the Financial Conduct Authority, is acting exclusively for the Company and no one else in relation to the Capital Raise and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Capital Raise and will not be responsible to anyone other than the Company for providing the protections afforded to customers of J.P. Morgan Cazenove or for affording advice in relation to the Capital Raise or the contents of the Prospectus, this Supplementary Prospectus or any matters referred to therein or herein. J.P. Morgan Cazenove is not making any representation or warranty, express or implied, as to the contents of this document.
Oriel Securities Limited, which is authorised and regulated by the Financial Conduct Authority, is acting exclusively for the Company and no one else in relation to the Capital Raise and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Capital Raise and will not be responsible to anyone other than the Company for providing the protections afforded to customers of Oriel Securities Limited or for affording advice in relation to the Capital Raise or the contents of the Prospectus, this Supplementary Prospectus or any matters referred to therein or herein. Oriel Securities Limited is not making any representation or warranty, express or implied, as to the contents of this document.
This Supplementary Prospectus includes particulars given in compliance with the Listing Rules and Prospectus Rules of the Financial Conduct Authority for the purpose of giving information with regard to the Company. The information contained in this Supplementary Prospectus should be read in the context of, and together with, the information contained in the Prospectus.
This Supplementary Prospectus does not contain or constitute an offer to sell or to issue any New Ordinary Shares or the solicitation of an offer to buy or subscribe for New Ordinary Shares.
The distribution of this Supplementary Prospectus in certain jurisdictions may be restricted by law. No action has been taken by the Company, J.P. Morgan Cazenove or Oriel Securities Limited that would permit an offer of the Shares or possession or distribution of this Supplementary Prospectus or any other offering or publicity material in any jurisdiction where action for that purpose is required, other than in the United Kingdom. Persons into whose possession this Supplementary Prospectus comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
The attention of potential investors is drawn to the Risk Factors set out on pages 17 to 23 of the Prospectus.
21 November 2014
This document constitutes a Supplementary Prospectus required under Prospectus Rule 3.4.1 and is being published to note the publication of the Company's interim report for the six months to 30 September 2014 (the Interim Report) on 18 November 2014, which constitutes a significant new factor relating to financial information contained in the Prospectus.
B.7 of the Summary on page 4 of the Prospectus is updated as follows:
| B7 | Financial | Income Statement | ||
|---|---|---|---|---|
| information | 6 months to 30 Sep 2014 (unaudited) (£,000) |
|||
| Revenue from properties Property expenses |
18,662 (4,135) |
|||
| Net property income Management expenses Other operating expenses Internalisation costs Costs of subsidiary acquisition |
14,527 (1,246) (622) - - |
|||
| Operating profit before movement on investments Gain/(loss) on disposal of investment properties Revaluation movements |
12,659 (11) 24,854 |
|||
| Operating profit/(loss) Net interest payable Change in fair value of interest rate swaps Realised gains on disposal of derivative financial instruments/loan notes |
37,502 (5,492) - - |
|||
| Profit/(loss) before tax Tax |
32,010 (176) |
|||
| Profit/(loss) after tax | 31,834 | |||
| Income profit after tax: | 6 months to 30 Sep 2014 (unaudited) (£,000) |
|||
| Profit/(loss) after tax Revaluation movements (Gain)/ loss on disposal of investment properties Change in fair value of interest rate swaps Realised gains on disposal of derivative financial instruments Costs of subsidiary acquisition |
31,834 (24,854) 11 - - - |
|||
| Income profit after tax | 6,991 |
| Balance Sheet | 30 Sep 2014 | ||
|---|---|---|---|
| Investment properties Tangible assets Cash and cash equivalents Loans and borrowings Derivative financial instruments Other assets and liabilities |
(unaudited) (£,000) 487,057 122 20,954 (234,216) - (244) |
||
| Net assets | 273,673 | ||
| Net asset value per share (pence) EPRA net asset value per share (pence) |
62 62 |
||
| The Group's operating profit, before investments, for the six months ended 30 September 2014 was £12.659 million. |
movements on |
||
| The Group's profit after tax was £31.834 million for the six months ended 30 September 2014, an increase compared to previous periods because of revaluation gains arising on the Group's portfolio of investment properties. |
|||
| The Group's income profit after tax was £6.991 million for the six months ended 30 September 2014, higher than the previous period because of additional rental income acquisitions and lower property costs as a result of a lower vacancy rate. |
from recent |
||
| The Group's net assets have risen to £273.673 million at 30 September 2014, principally due to the investment gains as stated above together with the issue of new ordinary shares for net proceeds of £33.886 million during the six month period ended 30 September 2014. |
|||
| Save for the issue of 59.3 million ordinary shares on 23 May 2014 and the increase in property values from £423.02 million as at 31 March 2014 to £493.30 as at 30 September 2014, there has been no significant change in the financial condition or the operating results of the Group during the six month period ended 30 September 2014. |
|||
| There has been no significant change in the financial condition or the operating results of the Group since 30 September 2014, being the end of the last financial period for which unaudited financial information has been published. |
The Interim Report, which has been incorporated in this document by reference, included the following information:
| Section | Page no(s) |
|---|---|
| Consolidated statement of comprehensive income | 11 |
| Consolidated statement of changes in equity | 12 |
| Consolidated balance sheet | 13 |
| Consolidated statement of cash flows | 14 |
| Accounting policies | 15 |
| Notes to the financial statements | 15-20 |
| Independent review report | 21 |
The key unaudited figures that summarise the Company's financial condition in respect of the six month period ended 30 September 2014, which have been extracted directly from the historical financial information referred to above (unless otherwise indicated in the notes below the following table), are set out in the following table:
| As at or for the six month period |
|
|---|---|
| ended 30 September 2014 (unaudited) |
|
| Total assets (£,000) | 524,367 |
| Total liabilities (£,000) | (250,694) |
| Net assets (£,000) | 273,673 |
| Net asset value per Ordinary Share (p) | 62 |
| Earnings per Ordinary Share (p) | 7.5 |
| Dividends per Ordinary Share (p) | 1.5 |
| Revenue reserves – Group (£,000)(1) | 182,595 |
| Total fixed assets (investments) (£,000) | 487,057 |
(1) Calculated as distributable reserves plus retained earnings or losses.
The Interim Report included, in the sections specified in the table below, descriptions of the Company's financial condition (in both capital and revenue terms), details of the Company's investment activity and portfolio exposure and changes in its financial condition for that year.
| Section | Page no(s) |
|---|---|
| Chairman's statement | 5 |
| Investment Manager's report | 6-9 |
There has been no significant change in the financial condition or the operating results of the Group since 30 September 2014, being the end of the last financial period for which unaudited financial information has been published.
The Company and the Directors, being Nicholas Thompson, Trevor Ash, Vic Holmes, Roger Lewis and Robert Sinclair, accept responsibility for the information contained in this Supplementary Prospectus. To the best of the knowledge and belief of the Company and the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.
Copies of the Prospectus dated 1 May 2014, this Supplementary Prospectus, the supplementary prospectuses published by the Company on, respectively, 14 July 2014, 4 August 2014 and 22 October 2014 and the Interim Report may be inspected free of charge at the offices of Norton Rose Fulbright LLP at 3 More London Riverside, London SE1 2AQ and at the registered office of the Company at Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3QL during normal business hours on any weekday (Saturdays and public holidays excepted) from the date of this document and while the Prospectus remains valid. These documents can also be found on the Company's website at the following address: www.pictonproperty.co.uk.
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