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DEVELOP NORTH PLC — Interim / Quarterly Report 2017
May 31, 2017
4965_rns_2017-05-31_bc2fb44d-f974-4aa2-af4f-a1b1e2c9f029.pdf
Interim / Quarterly Report
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TOC PROPERTY BACKED LENDING TRUST PLC
TOC Property Backed Lending Trust plc
Interim Report
For the six months ending 31 May 2017
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TOC PROPERTY BACKED LENDING TRUST PLC
Contents
Financial Highlights 2
Chairman's Statement 3
Investment Adviser's Report 5
Statement of Directors' Responsibilities in Respect of the Interim Report 8
Condensed Statement of Comprehensive Income 9
Condensed Statement of Financial Position 10
Condensed Statement of Changes in Equity 11
Condensed Statement of Cash Flows 12
Notes to the Condensed Accounts 13
Company Information 18
TOC PROPERTY BACKED LENDING TRUST PLC
Financial Highlights
Ordinary shares as at 31 May 2017
Net asset value of £20,838,339
Net asset value per share 97.62 pence
Share price of 103.5p
Shares in issue of 21,345,850
Premium to net asset value of 6.0%
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TOC PROPERTY BACKED LENDING TRUST PLC
Chairman's Statement
I am pleased to present the Company's first interim financial statements since its launch.
To summarise the key events I would draw your attention to:
- £21.3m has been raised by the Company at and since its launch and listing in January 2017.
- With investments made and dividends paid, the Company is fully live and operational and making significant steps towards its goal of a sustainable 7 pence per share per annum of annual dividends.
- As of today's date the Company has made 14 loans, with a value of £20.6m value and at an average interest rate of 8.29%.
Listing and Fund Raising
At launch the Company issued 17,300,950 shares at £1 per share; we have continued to do fund raisings to satisfy demand and a further 4,044,900 shares have been issued since launch to today's date, at the same price.
There is demand for our product and further fund raisings are anticipated in the forthcoming months.
Investments
The Company seeks to achieve its investment objective through making fixed rate loans secured over UK property and land.
In order to maximise returns it is important that funds raised are quickly and effectively invested and at today's date there are 14 loans made at an average rate of 8.29% and with an average value of £1.5m. The average time to loan maturity is 1.20 years.
As described in the prospectus, the Company seeks to take an equity position in the underlying asset/development for which the loan is being advanced. This typically is a 25.1% stake. Of the 14 loans made currently 3 have such profit shares, but that figure is expected to increase significantly as new funds are raised and loans are repaid and the proceeds re-invested.
The Investment Adviser has described the markets in which we operate and the typical borrower, and has provided some working examples so that shareholders and other interested parties better understand our business.
Dividends
A maiden dividend of 1 pence per share was announced in June 2017 in respect of the period to 31st May and on 30 August 2017 a further dividend of 1 pence per share was announced. It is our intention to pay dividends quarterly and to declare 7 pence per share of dividend in respect of the next financial year commencing 1 December 2017. On 1st June 2017 we announced our intention to pay a dividend of not less than 1.5 pence per share for the quarter ended 30th November 2017 and we remain on track for that.
Results
Results cover the period to 31st May 2017 and show earnings per share of 1.41 pence and a net asset value per share of 97.62 pence. This is effectively a 4 month period.
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TOC PROPERTY BACKED LENDING TRUST PLC
Conclusion
It is early days in this Company's life, but the path to the objectives and returns identified in the January prospectus is clear.
Our biggest risk in these uncertain times is ensuring that our choice of loans and counterparties are correct. Our Investment Adviser operates careful selection processes and regularly monitors such positions and importantly stays close to the borrowers.
I hope that I will be able to report further progress in the year end results.
Steve Coe
Chairman
30 August 2017
TOC PROPERTY BACKED LENDING TRUST PLC
INVESTMENT ADVISER'S REPORT
ABOUT THE COMPANY
TOC Property Backed Lending Trust Plc (the "Company") was launched in January 2017 to provide shareholders with a consistent and stable income and the potential for an attractive total return over the medium to long term while managing downside risk through: (i) a diversified portfolio of fixed rate loans predominantly secured over land and/or property in the UK; and (ii) receiving, in many cases, the benefit of an associated profit share arrangement, usually obtained by acquiring (at nil cost) a minority equity stake in the relevant borrower project development vehicle ("Profit Shares").
These returns are expected to be delivered through the Investment Adviser's focus on high quality and experienced borrowing teams, a robust and tested credit process and the direct origination of deal flow. The Investment Adviser manages downside risk by focusing on secured debt with both collateral and contractual protection, with investments aimed primarily at secured loans.
To further enhance investor returns, the Investment Adviser intends to assist in negotiating Profit Share arrangements for approximately 80% of future loan advances. This provides the Company with the opportunity to not only benefit from the interest rate created by the secured loan, but to also benefit from any profit generated by the underlying projects.
The Company typically seeks to originate debt where the effective loan to value ratio of any investment is between 40% and 100% at the time of origination. The Company aims to have a blended LTV across the portfolio of around 75% (based on initial valuations at the time of loan origination) once fully invested.
The Investment Adviser is following the Company's investment policy of allocating funds raised predominantly across three specific areas, within set allocation exposures:
- regional residential housebuilding across the UK with a focus away from London;
- small to medium commercial property development across the UK primarily focusing on small serviced office space, hotel developments and wedding and conference venues; and
- direct sale and leaseback vehicles.
ABOUT THE ADVISER
Tier One Capital, as Investment Adviser, provides bespoke wealth management and fund management services to high net worth (HNW) private clients, charities and institutions. The business was founded in March 2012 by Stephen Black and Ian McElroy, each of whom had previously spent many years in the financial services sector working for Barclays Wealth, Kleinwort Benson and Coutts & Co.
After starting the business with four employees from a small office in Newcastle upon Tyne, Tier One Capital currently has a team of twelve highly competent like-minded individuals, and this is expected to rise to fifteen before the end of 2017. The team is planning on relocating to a new state of the art redeveloped Grade II listed building located just outside the city centre in 2019.
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TOC PROPERTY BACKED LENDING TRUST PLC
INVESTMENT REPORT
The Company completed its initial public offering on 24 January 2017, raising initial gross proceeds of £17,300,950, with subsequent placings in March, April and May raising gross proceeds of £4,044,900. At 31 May 2017, the Company had 12 live facilities, one of which is a Profit Share arrangement, with the deployment level sitting at £18,840,500.
The deployment was broken down as follows:
| Residential | £8,642,000 | 45.9% |
|---|---|---|
| Commercial | £7,823,500 | 41.5% |
| Sales & Leaseback | £2,375,000 | 12.6% |
Since then the Company raised further gross proceeds of £616,661 in July 2017, taking the total raised to £21,962,511. The Investment Adviser has continued to facilitate an effective deployment program, with two new facilities going live since 31 May 2017, taking the total number to 14. These new facilities both fall under the Profit Share arrangement meaning there are now three of those in total. Finally, the deployment level now sits at £20,822,500, and there is a strong pipeline of future deployment opportunities in place.
Pleasingly, the current average interest rate being achieved on the combined loan book is 8.29%, with an average loan size having increased from £1.35m at 31 May 2017 to £1.5m at 28 August 2017. This reflects the natural progression of the Company's strategy of providing larger facilities as the AuM grows, rather than providing a higher volume of lower value loans.
The Investment Adviser sees huge value in only providing loan facilities to strong, experienced property teams who can evidence that they have the ability to deliver on a project. Often, these teams are led by individuals whom have learnt their trade at one of the larger UK property companies, and have subsequently decided to launch their own regional based property business. All loans are directly originated by the Investment Adviser utilising existing networks and relationships, providing further support to the robust credit process.
Since 31 May 2017, two Profit Share projects have completed – the first being a £2m facility to Gatsby Homes, a property development company based in Newcastle upon Tyne. The funds are being utilised to develop 14 residential properties to the North of the city, and have been loaned at a net rate of 10% by the Company over a 2-year term. The facility has been secured with a first legal charge against the land, which has full planning permission, and the borrower's bank account. This business is led by individuals with a strong property background in the North East, with knowledge and experience of the residential housing market.
The second facility was a £3.265m loan to Bede and Cuthbert Ltd, a company led by two very experienced property development consultants. This facility is to be used to develop 20 residential properties around 7 miles south west of Newcastle upon Tyne, and there is also a Profit Share arrangement. The facility provides a net interest return of 8% over a two-year term, with security again being taken by a senior charge over the land, with full planning permission, and the borrower's bank account.
The Investment Adviser also has dual signatory status on the bank accounts of both projects, and sits on the board of each borrowing company to represent the interests of the Company as a minority shareholder.
The Investment Adviser continues to see a greater balance of risk and return by providing loan facilities to high quality and experienced property development teams in the regions, as opposed to Central London. The current geographical breakdown of the Company's deployment approach shows approximately 75% of the Company's loans being focused in the North East, reflecting the Investment
TOC PROPERTY BACKED LENDING TRUST PLC
Adviser's commitment to providing facilities based on a relationship led approach. The North-East property market also provides protection against a decline in London property markets, as traditionally the region does not see the boom and bust dynamic created by significantly inflated property prices. To illustrate the point, the average property price was £223,257 in the UK vs £481,556 in London and £130,065 in the North East as of the end of June 2017. Since January 2004 to June 2017, residential property prices in London have increased by c.115%, compared to an increase of c.30% for the North East over the same time period.
The Investment Adviser continues to feel that the South East, and London in particular, is at risk of a decline in property prices, and therefore aims to continue focusing on those areas of the UK that haven't seen such a rapid growth in valuations.
While evidence is starting to emerge of a weakening housing market, driven largely by the headwinds of an uncertain economic future from Brexit, a squeeze on household incomes due to rising consumer prices and increased tax levels, the Investment Adviser has seen no slowdown in investment opportunities and potential deal flow, the quality of which has been maintained. This is largely driven by the continued dearth in lending to small regional housebuilders from traditional lenders, a London-centric credit approach from most major lending institutions and a growing reputation in the market for the Company being a solid finance partner for strong, experienced property teams.
The Investment Adviser remains confident of being able to continue to implement the Company's investment policy, and to deliver the level of consistent quarterly income that many UK investors demand.
Ian McElroy
Tier One Capital Limited
30 August 2017
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TOC PROPERTY BACKED LENDING TRUST PLC
Statement of Principal Risks and Uncertainties
The risks, and the way in which they are managed, are described in more detail under the heading 'Principal Risks' within the Strategic Report in the Company's Annual Report and Accounts for the period ended 30 November 2016. The Company's principal risks and uncertainties have not changed materially since the date of that report and are not expected to change materially for the remainder of the Company's financial year.
Statement of Directors' Responsibilities in Respect of the Interim Report
We confirm that to the best of our knowledge:
- the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union and gives a true and fair view of the assets, liabilities, financial position and profit of the Company;
- the Chairman's Statement and Investment Adviser's Review (together constituting the Interim Management Report) include a fair review of the information required by the Disclosure and Transparency Rules ('DTR') 4.2.7R, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements;
- the Statement of Principal Risks and Uncertainties above is a fair review of the information required by DTR 4.2.7R; and
- the Chairman's Statement and Investment Adviser's Review together with the condensed set of financial statements include a fair review of the information required by DTR 4.2.8R, being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position or performance of the Company during the period, and any changes in the related party transactions described in the last Annual Report that could do so.
On behalf of the Board
Steve Coe
Chairman
30 August 2017
TOC PROPERTY BACKED LENDING TRUST PLC
TOC Property Backed Lending Trust plc
Condensed Unaudited Statement of Comprehensive Income
For the six months ending 31 May 2017
| | Notes | Six months ending
31 May 2017 | | | Period from incorporation on 27 September 2016 to 30 November 2016 | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 |
| Revenue | | | | | | | |
| Loan interest received | | | | | | | |
| Total revenue | | 495 | - | 495 | - | - | - |
| Unrealised gain on investments | | - | - | - | - | - | - |
| Total income | | 495 | - | 495 | - | - | - |
| Expenditure | | | | | | | |
| Investment management fee | 2 | - | - | - | - | - | - |
| Other expenses | | (206) | - | (206) | - | - | - |
| Total expenditure | | (206) | | (206) | - | - | - |
| Profit before finance costs and taxation | | 287 | - | 287 | - | - | - |
| Net finance costs | | | | | | | |
| Interest receivable | | - | - | - | - | - | - |
| Interest payable | | - | - | - | - | - | - |
| Profit before taxation | | 287 | - | 287 | - | - | - |
| Taxation | | - | - | - | - | - | - |
| Profit for the period | | 287 | - | 287 | - | - | - |
| Total comprehensive profit for the period | | 287 | - | 287 | - | - | - |
| Basic earnings per share | 3 | 1.41p | - | 1.41p | - | - | - |
The total column of this statement represents the Company's Statement of Comprehensive Income, prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing operations.
The Company did not trade during the period from incorporation on 27 September 2016 to 30 November 2016. The Company received no income and incurred no expenditure in this period and therefore did not make a profit or loss.
There is no other comprehensive income as all income is recorded in the statement above.
TOC PROPERTY BACKED LENDING TRUST PLC
TOC Property Backed Lending Trust plc
Condensed Unaudited Statement of Financial Position
| | Notes | As at
31 May 2017
£'000 | As at
30 November
2016
£'000 |
| --- | --- | --- | --- |
| Non-current assets | | | |
| Investments held at fair value | 5 | 18,840 | - |
| Current assets | | | |
| Other receivables and prepayments | | 278 | 50 |
| Cash and cash equivalents | | 1,973 | - |
| Total assets | | 21,091 | 50 |
| Current liabilities | | | |
| Other payables and accrued expenses | | (253) | - |
| Total liabilities | | (253) | - |
| Net assets | | 20,838 | 50 |
| Stated capital and reserves | | | |
| Share capital | 7 | 213 | 50 |
| Share premium | 8 | 3,883 | - |
| Special distributable reserve | 8 | 16,455 | - |
| Revenue reserve | 8 | 287 | - |
| Capital reserve | 8 | - | - |
| Equity shareholders' funds | | 20,838 | 50 |
| Net asset value per ordinary share (pence) | 6 | 97.62 | 100.00 |
Approved by the Board of Directors on 30 August 2017:
Steve Coe
Chairman
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TOC PROPERTY BACKED LENDING TRUST PLC
TOC Property Backed Lending Trusted plc
Condensed Unaudited Statement of Changes in Equity
For the six months ending 31 May 2017
| Share capital | Share premium | Special distributable reserve | Capital reserve | Revenue reserve | Total | |
|---|---|---|---|---|---|---|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| At beginning of the period | 50 | - | - | - | - | 50 |
| Total comprehensive income for the period: | ||||||
| Profit for the period | - | - | - | - | 287 | 287 |
| Transactions with owners recognised directly in equity: | ||||||
| Redemption of launch management shares | (50) | - | - | - | - | (50) |
| Transfer of launch share premium | (16,455) | 16,455 | - | - | - | |
| Ordinary shares issued | 213 | 21,133 | - | - | - | 21,346 |
| Share issue costs | (795) | - | - | - | (795) | |
| At 31 May 2017 | 213 | 3,883 | 16,455 | - | 287 | 20,838 |
For the period from incorporation on 27 September 2016 to 30 November 2016
| Share capital | Share premium | Special distributable reserve | Capital reserve | Revenue reserve | Total | |
|---|---|---|---|---|---|---|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| At beginning of the period | - | - | - | - | - | - |
| Total comprehensive income for the period: | ||||||
| Profit for the period | - | - | - | - | - | - |
| Transactions with owners recognised directly in equity: | ||||||
| Ordinary shares issued | - | - | - | - | - | - |
| Management shares issued | 50 | - | - | - | - | 50 |
| At 30 November 2016 | 50 | - | - | - | - | 50 |
TOC PROPERTY BACKED LENDING TRUST PLC
TOC Property Backed Lending Trust plc
Condensed Unaudited Statement of Cash Flows
For the six months ending 31 May 2017
| Six months ending 31 May 2017 £'000 | Period from incorporation on 27 September 2016 to 30 November 2016 £'000 | |
|---|---|---|
| Operating activities | ||
| Profit before finance costs and taxation | 287 | - |
| Increase in other receivables | (228) | - |
| Increase in other payables | 253 | - |
| Redemption of management shares | (50) | - |
| Net cash outflow from operating activities before interest and taxation | 262 | - |
| Interest paid | - | - |
| Net cash outflow from operating activities | 262 | - |
| Investing activities | ||
| Loans given | (7,240) | - |
| Net cash outflow from investing activities | (7,240) | - |
| Financing | ||
| Issue of ordinary shares | 8,951 | - |
| Net cash inflow from financing | 8,951 | - |
| Increase in cash and cash equivalents | 1,973 | - |
| Cash and cash equivalents at the start of the period | - | - |
| Cashflow | 1,973 | - |
| Cash and cash equivalents at the end of the period | 1,973 | - |
The Company did not trade during the period from incorporation on 27 September 2016 to 30 November 2016, consequently there were no cash flows.
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TOC PROPERTY BACKED LENDING TRUST PLC
TOC Property Backed Lending Trust plc
Notes to the Condensed Accounts (Unaudited)
For the six months ending 31 May 2017
1. Interim Results
The condensed financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') and IAS 34 'Interim Financial Reporting' as adopted by the European Union and the accounting policies set out in the statutory accounts of the Company for the period ended 30 November 2016. The condensed financial statements do not include all of the information required for a complete set of IFRS financial statements and should be read in conjunction with the financial statements of the Company for the period ended 30 November 2016, which were prepared under IFRS as adopted by the European Union. There have been no significant changes to management judgements and estimates.
The condensed financial statements have been prepared on the going concern basis. In assessing the going concern basis of accounting the Directors have had regard to the guidance issued by the Financial Reporting Council. After making enquiries, and bearing in mind the nature of the Company's business and assets, the Directors consider that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing these financial statements.
2. Investment Adviser Fees
| Six months to 31 May 2017 £'000 | Period to 30 November 2016 £'000 | |
|---|---|---|
| Investment adviser fees | - | - |
| Total | - | - |
Investment Adviser
The AIFM has appointed Tier One Capital Limited to act as the Company's investment adviser pursuant to which the AIFM has delegated discretionary portfolio management services to the Investment Adviser, subject to the overall control and supervision of the Directors.
The Investment Adviser is entitled to receive from the Company an investment adviser fee which is calculated and paid quarterly in arrears at an annual rate of 0.5 per cent. per annum of the prevailing Net Asset Value. The Investment Adviser has agreed (unless otherwise agreed by the Board) to waive its fee until the Net Asset Value is at least £50 million.
In addition, the Investment Adviser may also charge in its capacity as arranger, facility agent and securities agent, and hold for its benefit, an arrangement fee of up to 2.5 per cent of the cost of each investment made by the Company and up to 20 per cent of the coupon charged to the relevant borrower. Such fees, would be paid by the borrower and would not be charged to the Company.
There are no performance fees payable.
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TOC PROPERTY BACKED LENDING TRUST PLC
3. Earnings per ordinary share
The revenue earnings per ordinary share is based on the net profit after taxation of £287,118 (30 November 2016: £nil) and on 20,420,933 ordinary shares (30 November 2016: nil shares), being the weighted average number of ordinary shares in issue during the period.
The capital earnings per ordinary share is based on a net capital gain of £nil (30 November 2016 : £nil) and on 20,420,933 ordinary shares (30 November 2016: nil shares) being the weighted average number of ordinary shares in issue during the period.
4. Dividends
There was no dividend paid to equity shareholders during the period or prior period to 30 November 2016.
The first interim dividend, paid as an interest distribution, for the year ending 30 November 2017 of 1.00 pence per share, was paid on 30 June 2017 to shareholders on the register on 9 June 2017. A second interim dividend for the year ending 30 November 2017 will be paid on 29 September 2017 to shareholders on the register on record date 8 September 2017.
5. Investments
| Six months to 31 May 2017 £'000 | As at 30 November 2016 £'000 | |
|---|---|---|
| Loans at amortised cost | 18,840 | - |
| Profit share equity investments held at fair value through profit or loss | - | - |
| Total | 18,840 | - |
The loans are carried at amortised cost using the effective interest rate method less provisions for impairment. As at 31 May 2017, the loans were valued at par with no provision for impairment deemed necessary.
Investments in the profit share equity contracts are initially recognised at nil cost. At completion of the underlying projects, the fair value of the contracts is determined and reviewed quarterly using recognised valuation techniques.
Financial instruments measured and reported at fair value are classified and disclosed in one of the following hierarchy levels based on the significance on the inputs used in measuring its fair value:
Level 1 – Unadjusted, fully accessible and current quoted prices in active markets for identical assets or liabilities
Level 2 – Quoted prices for similar assets or liabilities, or other directly or indirectly observable inputs which exist for the duration of the period of investment.
Level 3 – External inputs are unobservable. Value is the Directors’ best estimate, based on advice from relevant knowledgeable experts, use of recognised valuation techniques and on assumptions as to what inputs other market participants would apply in pricing the same or similar instrument.
All investments are considered Level 3 and there were no movements of any assets between levels during the period and no transfers into and out of Level 3.
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TOC PROPERTY BACKED LENDING TRUST PLC
6. Net asset value per ordinary share
The net asset value per ordinary share is based on net assets of £20,838,339 (30 November 2016: £50,000) and on 21,345,850 ordinary shares (30 November 2016: 1 ordinary share; 50,000 management shares), being the number of ordinary shares in issue at the period end.
7. Share Capital
| Nominal value £'000 | Number of ordinary shares | |
|---|---|---|
| At 30 November 2016 | - | - |
| Issue 24 January 2017 | 173 | 17,300,950 |
| Issue 9 March 2017 | 16 | 1,600,000 |
| Issue 6 April 2017 | 11 | 1,072,000 |
| Issue 11 May 2017 | 13 | 1,372,900 |
| At 31 May 2017 | 213 | 21,345,850 |
On 19 July 2017 a further 616,661 shares were issued at 100p under the share issuance programme.
8. Reserves
| Share premium | Special distributable reserve | Capital reserve | Revenue reserve | Total | |
|---|---|---|---|---|---|
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| At 30 November 2016 | - | - | - | - | - |
| Profit for the period | - | - | - | 287 | 287 |
| Share issues | 21,133 | - | - | - | 21,133 |
| Share issue costs | (795) | - | - | - | (795) |
| Cancellation of share premium | (16,455) | 16,455 | - | - | - |
| At 31 May 2017 | 3,883 | 16,455 | - | 287 | 20,625 |
Following the approval of the Court and the subsequent registration of the Court order with the Registrar of Companies on 30 March 2017, the share premium cancellation was effective. The share premium of £16,454,963 was transferred to a special distributable reserve. Issue costs of £672,977 relating to the initial placing were offset against the special distributable reserve.
9. Related Party Transactions
Each of the independent Directors is entitled to receive a £30,000 fee from the Company. The Director's fees for the period ended 31 May 2017 totalled £32,077 (30 November 2016: £nil), of which £7,500 (30 November 2016: £nil) was payable at the period end.
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TOC PROPERTY BACKED LENDING TRUST PLC
Stephen Black is a non-independent director, also being a director of the Investment Adviser Tier One Capital Limited. Stephen Black received no fees during the period.
The Investment Adviser, Tier One Capital Limited, has agreed (unless otherwise agreed by the Board) to waive its fee until the Net Asset Value is at least £50 million.
In addition, the Investment Adviser may also charge in its capacity as arranger, facility agent and securities agent, and hold for its benefit, an arrangement fee of up to 2.5 per cent of the cost of each investment made by the Company and up to 20 per cent of the coupon charged to the relevant borrower. Such fees, would be paid by the borrower and would not be charged to the Company.
10. Operating Segments
The Board has considered the requirements of IFRS 8 'Operating Segments'. The Board is of the view that the Company is engaged in a single unified business, being the investment of the Company's capital in financial assets comprising loans and joint venture equity contracts and in one geographical area, the United Kingdom, and that therefore the Company has no segments. The Board of Directors, as a whole, has been identified as constituting the chief operating decision maker of the Company. The key measure of performance used by the Board to assess the Company's performance is the total return on the Company's net asset value. As the total return on the Company's net asset value is calculated based on the IFRS net asset value per share as shown at the foot of the Consolidated Statement of Financial Position, the key performance measure is that prepared under IFRS. Therefore no reconciliation is required between the measure of profit or loss used by the Board and that contained in the financial statements.
11. Fair Value Measurements
The fair value measurements for assets and liabilities are categorised into different levels in the fair value hierarchy based on the inputs to valuation techniques used. These different levels have been defined as follows:
- Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date.
- Level 2 – inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly.
- Level 3 – unobservable inputs for the asset or liability. Value is the Directors' best estimate, based on advice from relevant knowledgeable experts, use of recognised valuation techniques and on assumptions as to what inputs other market participants would apply in pricing the same or similar instrument. All investment properties are included in Level 3.
All investments are considered Level 3 and there were no movements of any assets between levels during the six months ending 31 May 2017 and no transfers into and out of Level 3.
12. Post Balance Sheet Events
On 30 June 2017, the Company paid its first dividend at a rate of 1.00p per ordinary share.
On 19 July 2017 a further 616,661 shares were issued at 100p under the share issuance programme.
On 30 August 2017 the Company announced its second dividend at a rate of 1.00p per ordinary share; xd date 7 September 2017, record date 8 September 2017 and pay date 29 September 2017.
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TOC PROPERTY BACKED LENDING TRUST PLC
13. Interim Report Statement
The Company's auditor, Moore Stephens LLP, has not audited or reviewed the Interim Report to 31 May 2017 pursuant to the Auditing Practices Board guidance on 'Review of Interim Financial Information'. These are not full statutory accounts in terms of Section 434 of the Companies Act 2006 and are unaudited. Statutory accounts for the year ended 30 November 2016, which received an unqualified audit report and which did not contain a statement under Section 498 of the Companies Act 2006, have been lodged with the Registrar of Companies. No full statutory accounts in respect of any period after 30 November 2016 have been reported on by the Company's auditor or delivered to the Registrar of Companies.
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TOC PROPERTY BACKED LENDING TRUST PLC
Company Information
| Directors | Steve Coe (Chairman) |
|---|---|
| Matt Harris (Audit Chairman) | |
| Douglas Noble | |
| Stephen Black | |
| Registered office | Keel House |
| Garth Heads | |
| Newcastle-upon-Tyne | |
| NE1 2JE | |
| Investment Adviser | Tier One Capital Limited |
| Keel House | |
| Garth Heads | |
| Newcastle-upon-Tyne | |
| NE1 2JE | |
| Sponsor and Financial Adviser | finnCap Ltd |
| 60 New Broad Street | |
| London | |
| EC2M 1JJ | |
| Solicitor | Gowling WLG (UK) LLP |
| 4 More London Riverside | |
| London | |
| SE1 2AU | |
| AIFM | R&H Fund Services (Jersey) Limited |
| Ordnance House | |
| 31 Pier Road | |
| St Helier | |
| Jersey | |
| JE4 8PW | |
| Administrator and Secretary | Maitland Administration Services (Scotland) Limited |
| 20 Forth Street | |
| Edinburgh | |
| EH1 3LH | |
| Auditors | Moore Stephens LLP |
| 150 Aldersgate Street | |
| London EC1A 4AB | |
| Registrar | Computershare Investor Services PLC |
| The Pavillions | |
| Bridgwater Road | |
| Bristol | |
| BS99 6ZZ |
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