Walls & Futures REIT plc

Share Issue/Capital Change • Sep 23, 2020

National Storage Mechanism | Additional information

RNS Number : 8856Z

Walls & Futures REIT PLC

23 September 2020

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

23 September 2020

WALLS & FUTURES REIT PLC

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

Final Results for the year to 31 March 2020

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 2020. 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/8856Z_1-2020-9-23.pdf

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 Include:

·   Profit £625,835 (2018: Loss of £18,408)

·   Revenue up 1.5% to £138,036 (2019: £135,878)

·   Investment property value increased by 21.9%

·   Earnings per share 16.93p (2019: -0.51p)

·   Outperformed MSCI UK residential benchmark by 423% for year ending 2019

Key elements of the final results can be viewed below.

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

"We're delighted investments in Specialist supported housing have created fantastic new homes for residents and much needed high-quality and flexible capacity to the sector.

Additionally, by our strategy of deal origination and real estate development has enabled us to create significant value growth, increasing our property portfolio 21.9%.

We will be seeking to dispose of our remaining London residential assets and recycle the capital to make further, more profitable Specialist supported housing investments, translating our benchmark beating performance into a maiden and regular dividend."

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

For the calendar year 2019, our portfolio delivered a total return of 23% against the MSCI UK Residential index, which returned 4.4%. This is the third consecutive year that we have outperformed our benchmark. We believe our ongoing success is due to our strategy of proprietary deal origination and real estate development which creates value growth and contributes towards building a resilient income stream.

On 3 June 2019, we announced that we had secured a £600,000 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 the completion of the acquisition of a freehold detached bungalow in Didcot, Oxfordshire for £465,000. The property was redeveloped and adapted to provide a high-quality home with specialist support, for four adults with physical & learning disabilities. It was successfully handed over in December 2020 let on a 25-year full repairing and insuring lease linked to inflation (CPI) to one of the UK's largest and longest-established providers currently supporting more than 2,500 adults nationwide.

The value growth created is evidenced in this year's results and the full benefit of the income will be reflected in our 2020-21 results.

We were once again nominated for the "Impact Company" and "NEX Exchange Company" of the year at the Small Cap 2019 awards. The annual event shines a light on the best companies and participants in the small and micro-cap community (sub-£100m market capitalisation).

On 28 August 2019, we announced that we had received a subscription 142,857 ordinary shares of 5 pence each at a price of 70 pence per share for a total of £100,000 from a new investor.

Post balance sheet event

On 12 June 2020, we announced the disposal of our freehold property in Wimbledon Park for £656,000. Despite the challenges posed by Covid-19 and the economic backdrop the price achieved reflected just a 2.9% discount on its valuation and highlights the underlying strength of our London residential portfolio.

We will continue to review our assets in the Private Rental Sector with a view of recycling the capital to make further investments in Specialist Supported Housing.

Outlook for the future

To date our investments in Specialist Supported Housing have created a total return that has enabled us to outperform the MSCI UK residential index for three consecutive years.

To translate this performance into a maiden and regular dividend we intend to dispose of our remaining London residential assets and to recycle the capital making further and more profitable investments in Specialist Supported Housing.

We note with disappointment that the share price has been lower than our net asset value of 107p per share.  We believe this is due to an overhang of shares being held by the market maker. We are working to increase awareness of Walls & Futures REIT plc and our investment aims to a wider range of retail and institutional investors.

We continue to develop relationships with key stakeholders and customers and are always reviewing new investments which will be announced as they are finalised.

The directors will continue the same investment policies which have been successful since joining the AQUIS Stock Exchange.

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

Consolidated Income Statement for the year ended 31 March 2020

Notes TURNOVER                                                             4	2020 £ 138,036	2019 £ 135,878
Cost of sales	13,286	13,607
GROSS PROFIT	124,750	122,271
Administrative expenses	275,725	286,093
	(150,975)	(163,822)
Gain/loss on revaluation of tangible assets	797,686	145,000
OPERATING PROFIT/(LOSS)                              6	646,711	(18,822)
Interest receivable and similar income	350	522
	647,061	(18,300)
Interest payable and similar expenses              7	21,226	-
PROFIT/(LOSS) BEFORE TAXATION	625,835	(18,300)
Tax on profit/(loss)                                                  8	67	108
PROFIT/(LOSS) FOR THE FINANCIAL YEAR	625,768	(18,408)
Profit/(loss) attributable to: Owners of the parent	625,768	(18,408)
Earnings per share expressed in pence per share:                                              10 Basic	16.93	-0.51
Diluted	16.93	-0.51

Consolidated Statement of Financial Position as at 31 March 2020

Notes FIXED ASSETS	2020 £                           £	2019 £	£
Tangible assets                                                    11 Investments                                                           12	631 -		1,263 -
Investment property                                             13	4,625,000		3,170,000
	4,625,631		3,171,263
CURRENT ASSETS
Debtors                                                                   14	4,489	4,363
Cash at bank	22,306	148,955
CREDITORS	26,795	153,318
Amounts falling due within one year                15	18,760	16,683
NET CURRENT ASSETS	8,035		136,635
TOTAL ASSETS LESS CURRENT LIABILITIES	4,633,666		3,307,898
CREDITORS Amounts falling due after more than one
year                                                                         16	600,000		-
NET ASSETS	4,033,666		3,307,898
CAPITAL AND RESERVES Called up share capital                                       21	187,754		180,611
Share premium                                                    22	3,505,154		3,412,297
Fair value reserve                                                22	1,111,019		313,333
Retained earnings                                                22	(770,261)		(598,343)
SHAREHOLDERS' FUNDS                               25	4,033,666		3,307,898

Consolidated Statement of Cash Flows for the year ended 31 March 2020

	Cash flows from operating activities	Notes	2020 £	2019 £
	Cash generated from operations	1	(148,459)	(165,603)
	Interest paid		(21,226)	-
	Tax paid		-	(9)
	Net cash from operating activities		(169,685)	(165,612)
	Cash flows from investing activities Purchase of tangible fixed assets		-	(1,894)
	Purchase of investment property		(657,314)	-
	Interest received		350	522
	Net cash from investing activities		(656,964)	(1,372)
	Cash flows from financing activities
	New loans in year		600,000	-
	Share issue		7,143	4,259
	Share premium paid		92,857	267,494
	Net cash from financing activities		700,000	271,753
(Decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning			(126,649)	104,769
of year                                                                      2			148,955	44,186
Cash and cash equivalents at end of year     2			22,306	148,955

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