DJ Walls & Futures REIT PLC: Final Results and Audited Annual Report and Accounts for the Year to 31 March 2022
Walls & Futures REIT PLC (WAFR) Walls & Futures REIT PLC: Final Results and Audited Annual Report and Accounts for the Year to 31 March 2022 26-Sep-2022 / 14:30 GMT/BST Dissemination of a Regulatory Announcement that contains inside information in accordance with the Market Abuse Regulation (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.
26 September 2022
WALLS & FUTURES REIT PLC
("Walls & Futures" or the "Company")
Final Results and Audited Annual Report and Accounts for the Year to 31 March 2022
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 (the "Annual Report "). A copy of the Annual Report 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% to 98p per share (2021: 102p per share)
-- Revenue GBP93,455 down 37% (2021: GBP148,420)
-- Loss -GBP122,296 (2021: Loss of -GBP214,169)
-- Exceptional items of GBP164,794 defending a hostile takeover attempt
-- Investment property value increased by 7.2%
-- Earnings per share -3.26p (2021: -5.70p)
-- 100% of Specialist Supported Housing rents collected
-- Successful launch of Pax Homes
-- Pipeline of sites for new Pax Homes developments
-- Agreed lease terms & signed memorandum of understanding with new partners
Key elements of the final results can be viewed below.
Joe McTaggart, CEO of Walls & Futures REIT plc said:
"We've made fantastic progress since with the launch of Pax Homes and are thrilled with the positive response we've received from specialist charities, care providers, housing associations, NHS trusts, local authorities, and special education needs schools.
We have agreed land options in Dorset and Sunderland for our first Pax Homes developments, and we are actively seeking similar parcels in Cornwall, Devon, Kent, Norfolk, and Greater Manchester.
To fully capitalise on Pax Homes, we will need implement a strategic pivot, to include the removal of REIT status, enabling us to access difference sources of capital and sell Pax Homes to individuals and organisations."
Due to the period of time between the publication of the Annual Report and the Company's annual general meeting (" AGM") being insufficient, those resolutions to be put at the AGM relating to the Annual Report will be adjourned to a later date, details of which will be separately announced. The Company makes the following disclosure in relation to the Annual Report:
"The Financial Reporting Council's Ethical Standard 3.11(a) dictates that no one shall act as engagement partner for more than five years.
Jonathan Sutcliffe of Moore Kingston Smith LLP has now exceeded this period acting in his capacity as engagement partner.
However, Ethical Standard 3.15 allows the engagement partner to continue in this position for an additional period of up to two years, so that no longer than seven years in total is spent in the position of engagement partner, in circumstances where substantial change has recently been made - or will soon be made - to the nature or structure of the entity's business.
As a Special Resolution is being put the AGM to change the REIT status of the Company, it is considered appropriate to retain Jonathan Sutcliffe in his capacity as engagement partner.
This notice satisfies the requirement in Ethical Standard 3.16 to disclose this fact, and reasons for it, to the Company's shareholders."
Extract from the Independent Auditors Report
"Material uncertainty related to going concern
We draw attention to the going concern accounting policy detailed in note 3 to the financial statements, which indicate that at the Annual General Meeting (AGM) a vote will be put to all shareholders whether the company should continue operations as currently constituted. The resolution is to amend the Company's articles and instead become a 'conventional' property and development company. The vote will be a special resolution which the Board unanimously recommends to the shareholders.
If proposals are not approved by shareholders, an alternative proposal to wind up the Company and distribute the net proceeds to shareholders will be put. The Board does not recommend shareholders vote in favour of this resolution.
The resolutions to be voted on at the AGM create material uncertainty regarding the Company's going concern status."
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
Extract from the Strategic Report
Overview
We made great strides in implementing the new strategy outlined in our May 2021 letter, now that the unwelcome distraction of the hostile takeover was behind us. We believe that focusing on development, where we have a track record of generating strong returns, will deliver growth, investment, and significantly reduce the discount between the Company's share price and the net asset value per share ("the NAV").
We completed the sale of our last PRS property in December 2021 for GBP662,500, representing a 1.9% premium over its March 2020 valuation. allowing us to concentrate on expanding our Specialist Supported Housing (SSH) portfolio.
Our SSH portfolio continues to perform well. Despite the ongoing economic difficulties, we collected 100% of our SSH rents. Despite the ongoing economic challenges, we collected 100% of our SSH rents, and the value of our SSH portfolio increased by 7.2%. Our Net Asset Value (NAV) fell by 4% to 98p per share on March 31, 2021.
Finally, we finished the design and successfully launched Pax Homes.
Pax Homes
Pax Homes are an incredible, flexible home designed specifically around the needs of autistic people across the spectrum. They prioritise wellbeing and independence by considering textures, noise, lighting and balance. Optimal layouts, safety features, durability, accessibility and stunning finishes promote the best possible life with autism. Initially available as 1 and 2 bedroom homes, they can be configured to individual homes or incorporated into a small development.
In January 2022, The Commons Health and Social Care Select Committee report highlighted the drastic need for specialist housing and care accommodation for people with autism and learning disabilities. Pax Homes addresses this need, improving lives by solving the expense and shortage of specialist supported housing.
Pax Homes has received positive feedback from our current partners, as well as inquiries from specialist charities, care providers, housing associations, NHS trusts, local authorities, and special education needs schools. We are especially pleased with the response from the broader autism community, with a test direct marketing campaign generating approximately 250 enquiries per week seeking information on renting and purchasing Pax Homes.
We have agreed terms on land options in Dorset and Sunderland for our first Pax Homes developments, which will have an estimated Gross Development Value (GDV) GBP6 million. We are actively seeking additional land options in Cornwall, Devon, Kent, Norfolk, and Greater Manchester with an estimated GDV of GBP15 million.
Outlook for the future
Our current structure and business model require us to provide Pax Homes on a lease-only basis to our customers. However, we have received inquiries from individuals and organisations interested in purchasing individual homes and developments. Furthermore, it has become clear that the primary route to value creation within the sector is through property development rather than long-term investment retention.
To capitalise on Pax Homes, we propose a strategic pivot in which we sell Pax Homes to buyers rather than holding properties as long-term investors. The Company's REIT status creates barriers to fully utilising development opportunities, most notably limitations on the source of its returns and the use of external borrowing. Shareholders are being asked to approve this change.
If shareholders approve the change, the Board plans to keep its current supported living investments in Stroud, Gloucestershire, and Didcot, Oxfordshire. These assets serve as a solid asset backstop for the Company's balance sheet, as well as a healthy and secure rental stream. The Board intends to use these assets as collateral for loans to finance future Pax Homes developments, with the loans to be repaid from the sale of the Pax Homes, which is a severely limited option under its current REIT status.
These future Pax Homes developments will also be funded by the Company's existing cash resources (resulting from its sale of its legacy private rented sector properties) and possibly further share issues. With this in mind, the Board is seeking new share capital authorities to enable the Company to raise additional equity funding. As part of the Proposals, the Company is seeking to change its name to Walls & Futures Group plc to reflect the removal of REIT status.
Consolidated Statement of Comprehensive Income
For The Year Ended 31 March 2022
2022 2021
Notes GBP GBP
TURNOVER 5 93,455 148,420
Cost of sales 1,549 40,106
GROSS PROFIT 91,906 108,314
Administrative expenses 242,474 259,285
-150,568 -150,971
Other operating income 12,500 -21,861
Gain/loss on revaluation of tangible assets 185,000 -35,000
OPERATING LOSS 7 -246,932 -207,832
26 -168,794 -
Exceptional item
Interest receivable and similar income 61 27
-121,801 -207,805
Interest payable and similar expenses 8 478 6,364
LOSS BEFORE TAXATION -122,279 -214,169
Tax on loss 9 17 -
LOSS FOR THE FINANCIAL YEAR -122,296 -214,169
OTHER COMPREHENSIVE INCOME
Disposal of investment property
Income tax relating to other comprehensive income
- -
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX
- -
TOTAL COMPREHENSIVE INCOME FOR THE YEAR -122,296 -214,169
Loss attributable to:
Owners of the parent -122,296 -214,169
Total comprehensive income attributable to:
Owners of the parent -122,296 -214,169
Earnings per share expressed
in pence per share: 11
Basic -3.26 -5.7
Diluted -3.26 -5.7
Consolidated Statement of Financial Position 31 March 2022
2022 2021
Notes GBP GBP GBP GBP
FIXED ASSETS
Tangible assets 12 - -
Investments 13 - -
Investment property 14 2,750,000 3,215,000
2,750,000 3,215,000
CURRENT ASSETS
Debtors 15 42,107 3,421
Cash at bank 949,249 651,357
991,356 654,778
CREDITORS
Amounts falling due within one year 16 25,155 25,281
NET CURRENT ASSETS 966,201 629,497
TOTAL ASSETS LESS CURRENT LIABILITIES
3,716,201 3,844,497
CREDITORS
Amounts falling due after more than one year
17 19,000 25,000
NET ASSETS 3,697,201 3,819,497
CAPITAL AND RESERVES
Called up share capital 22 187,754 187,754
Share premium 23 3,505,154 3,505,154
Fair value reserve 23 1,416,019 1,188,519
Retained earnings 23 -1,411,726 -1,061,930
SHAREHOLDERS' FUNDS 25 3,697,201 3,819,497
Consolidated Statement of Cash Flows For The Year Ended 31 March 2022
2022 2021
Notes GBP GBP
Cash flows from operating activities
Cash generated from operations 1 -359,185 -110,612
Interest paid -478 -6,364
Tax paid -6 -
Net cash from operating activities -359,669 -116,976
Cash flows from investing activities
Sale of fixed asset investments 12,500 -
Sale of investment property 650,000 1,316,000
Interest received 61 27
Net cash from investing activities 662,561 1,316,027
Cash flows from financing activities
New loans in year - 30,000
Loan repayments in year -5,000 -600,000
Net cash from financing activities -5,000 -570,000
Increase in cash and cash equivalents 297,892 629,051
Cash and cash equivalents at beginning of year
2 651,357 22,306
Cash and cash equivalents at end of year 2 949,249 651,357
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Attachment File: Annual Report and Audited Accounts for the Year to 31 March 2022
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ISIN: GB00BD04QG09 Category Code: FR TIDM: WAFR LEI Code: 213800CJV93R1FPNT553 Sequence No.: 190417 EQS News ID: 1450233 End of Announcement EQS News Service =------------------------------------------------------------------------------------
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September 26, 2022 09:30 ET (13:30 GMT)
