HIBERNIA REIT PLC The following table is included to show the amount of retained earnings available for distribution to the owners of the parent company at the end of the financial year. Distributable reserves - Company only
As at 31 March 2021 As at 31 March 2020
EUR'000 EUR'000
Retained earnings at end of financial year (Company only) 409,725 444,029
Deduct: unrealised gains and losses1 (348,927) (408,513)
Distributable reserves 60,798 35,516 1. Unrealised intercompany profits arising on the transfer of investment properties to subsidiaries of the Company have been eliminated for the purpose of the above calculation
In August 2020, a final dividend of 3.0 cent per share (EUR20.5m) and in January 2021 an interim dividend of 2.0 cent per share (EUR13.2m) were paid to the holders of fully paid ordinary shares. A final dividend for the financial year ended 31 March 2021 of 3.4 cent per share (c. EUR22.5m) has been proposed (March 2020: 3.0 cent per share or EUR20.5m) (note 13).
On 9 April 2020, EUR50m in share premium was converted to distributable reserves on foot of a capital reorganisation which took place during the financial year.
The Directors confirm that the Company continues to comply with the dividend payment obligations contained within the Irish REIT legislation. 24. Financial liabilities Accounting policy
A financial instrument is classified as a financial liability where it contains an obligation to repay. These are accounted for at amortised cost. Financial liabilities that are classified as amortised cost are initially measured at fair value minus any transaction costs. Accounting at amortised cost means that any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss or capitalised into investment property over the period of the borrowings using the effective interest method (see Section IV: introduction). 24.a Borrowings
As at 31 March 2021 As at 31 March 2020
EUR'000 EUR'000
Non-current
Unsecured bank borrowings 225,317 185,109
Unsecured private placement notes 74,639 74,582
Total non-current borrowings 299,956 259,691
Current
Unsecured bank borrowings 132 159
Unsecured private placement notes 353 358
Total current borrowings 485 517
Total borrowings 300,441 260,208
The maturity of non-current borrowings is as follows: As at 31 March 2021 As at 31 March 2020
EUR'000 EUR'000
Less than one year 485 517
Between one and two years - -
Between two and five years 262,637 185,109
Over five years 37,319 74,582
Total 300,441 260,208 Movements in borrowings during the financial year:
As at 31 March 2021 As at 31 March 2020
EUR'000 EUR'000
Balance at beginning of financial year 260,208 231,555
Bank finance drawn 42,100 57,945
Bank finance repaid (2,500) (29,968)
Interest payable 633 676
Balance at end of financial year 300,441 260,208 The Group has a stated policy of not incurring debt above 40% of the market value of its property assets and has a through-cycle leverage target of 20-30% loan to value ("LTV"). Under the Irish REIT rules the LTV ratio must remain under 50%.
The Group has an unsecured revolving credit facility ("RCF") of EUR320m provided by Bank of Ireland, Wells Fargo, Barclays Bank Ireland and Allied Irish Banks. This facility, which expires in December 2023, is denominated in euro and is subject to a margin of 2.0% over three-month EURIBOR. The Group has entered into derivative instruments so EUR200m of its EURIBOR exposure is capped at 0.25% and the balance at 0.75% as at the financial year end, in accordance with the Group's hedging policy (note 29.d.ii).
The Group also has EUR75m of private placement notes with an average maturity of 6.3 years as at 31 March 2021 (March 2020: 7.3 years) which are held by two institutional investors. Coupons of 2.525% are fixed so long as the Group's credit rating remains investment grade. An additional EUR125m in 10- and 12-year senior private placement will be issued on 23 July 2021 bringing the average maturity of fixed debt to 9.3 years as at that date. These new notes will also be unsecured, with an average fixed coupon of 1.9%.
Where debt is drawn to finance material refurbishments and developments that take a substantial period of time to take into use, the interest cost of this debt is capitalised. Approximately EUR252k of financing costs were capitalised at an effective interest rate of 2.1% in relation to the Group's developments and major refurbishments during the financial year (March 2020: EUR141k).
All costs related to financing arrangements are amortised using the effective interest rate. The Directors confirm that all covenants have been complied with and are kept under review. There is significant headroom on the financial covenants (note 2.e). 24.b Net debt reconciliation and LTV
Net debt and LTV are key metrics in the Group. Net debt is redemption value of borrowings as adjusted by cash available for use. LTV is the ratio of net debt to investment property value at the measurement date.
As at 31 March 2021 As at 31 March 2020
EUR'000 EUR'000
Cash and cash equivalents 31,634 28,454
Cash reserved1 (8,442) (7,457)
Gross debt - fixed interest rates (75,000) (75,000)
Gross debt - variable interest rates (226,990) (187,390)
Net debt at financial year end (278,798) (241,393)
Investment property at financial year end 1,427,413 1,465,183
Loan to value ratio 19.5% 16.5% 1. Cash is reduced by the amounts held in relation to rent deposits, sinking funds and similar arrangements as these balances are not viewed as available funds for the purposes of the above calculation.
Reconciliation of opening to closing net debt:
Assets Liabilities Total
Private
Unreserved cash and cash Unsecured placement Net debt
equivalents borrowings
notes
EUR'000 EUR'000 EUR'000 EUR'000
As at 1 April 2019 17,322 (159,413) (75,000) (217,091)
Loan drawdowns - (57,945) - (57,945)
Loan repayments - 29,968 - 29,968
Increase in cash and cash 6,082 - - 6,082
equivalents
Decrease in cash reserved 1 (2,407) - - (2,407)
As at 31 March 2020 20,997 (187,390) (75,000) (241,393)
Loan drawdowns - (42,100) - (42,100)
Loan repayments - 2,500 - 2,500
Increase in cash and cash 3,180 - - 3,180
equivalents
(Increase) in cash reserved 1 (985) - - (985)
As at 31 March 2021 23,192 (226,990) (75,000) (278,798) 1. Cash is reduced by the amounts held in relation to rent deposits, sinking funds and similar arrangements as these balances are not viewed as available funds for the purposes of the above calculation. 25. Deferred tax liabilities Accounting policy
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets are only recognised where it is probable that the amounts will be recoverable.
(MORE TO FOLLOW) Dow Jones Newswires
May 26, 2021 02:03 ET (06:03 GMT)
