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WALLS & FUTURES REIT PLC Walls & Futures REIT PLC: Final Results and Audited Annual Report and Accounts for the Year to 31 March 2022

Directive transparence : information réglementée

26/09/2022 15:30

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.


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 £93,455 down 37% (2021: £148,420)
  • Loss -£122,296 (2021: Loss of -£214,169)
  • Exceptional items of £164,794 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 £662,500, 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) £6 million. We are actively seeking additional land options in Cornwall, Devon, Kent, Norfolk, and Greater Manchester with an estimated GDV of £15 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

£

£

 

 

 

 

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

 

Exceptional item

26

-168,794

-

 

 

 

 

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

£

£

£

£

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

£

£

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

       

 

 


Attachment

File: Annual Report and Audited Accounts for the Year to 31 March 2022


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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