Half-year Report 30-June-2020 07:00

30 June 2020

Inland Homes plc

('Inland Homes', 'Group' or 'Company')

Interim Results for the six-month period to 31 March 2020

Inland Homes, a leading brownfield developer, housebuilder and partnership housing company with a focus on the south and south east of England, today announces its interim results for the six-month period ended 31 March 2020.

Stephen Wicks, Chief Executive at Inland Homes, commented:

'Until the middle of March we were on track to deliver results which were in-line with expectations. With market confidence impacted by COVID-19, following the imposition of lockdown restrictions, we saw almost overnight the loss of five significant property transactions leading to substantially lower than anticipated first-half revenues.

'Despite the current challenges, there remains an underlying shortage of high-quality, affordable housing across the UK and we are seeing demand returning for our land assets and expertise. We were delighted to announce recently a development agreement with Homes England for more than 600 homes in Basildon and also the unconditional sale of 94 plots, at a premium to the EPRA valuation, at our flagship Wilton Park development in Beaconsfield.

'The measures we put in place to reduce the Group's cost base, preserve our assets and conserve cash will put us in a stronger position as market conditions improve. It should also be noted that we have an extremely high quality land bank, of which nearly a third of plots have planning consent, underpinning increases in EPRA NAV per share.

'Whilst it is too early to restore guidance, the underlying resilience and quality of the business gives the Board confidence that the Group will weather the continued uncertainty in a recovering market environment.'

Key financials:

·	Revenue £59.6m (six-month period to 31 December 2018: £51.0m), lower than anticipated due to the aborted land sales referenced above which had a total revenue of £46.2m
·	EPRA NAV increased to 109.30pfrom 103.57p (31 December 2018)
·	Net Asset Value per share ('NAV') of 75.75p(31 December 2018: 71.71p)
·	Net borrowings: £150.1m(30 September 2019: £152.3m; 31 December 2018: £96.6m)
·	Gross profit of £4.9m (six-month period to 31 December 2018: £14.6m)
·	Loss Before Tax of £7.2m (six-month period to 31 December 2018: Profit Before Tax £5.5m)

In May 2020, the Group raised £9.4m (net of expenses) through a successful placing and subscription of 20,750,000 new ordinary shares at an issue price of 47.5p per share. The new ordinary shares represent approximately 9.9 per cent of the existing issued ordinary share capital of the Group. The net proceeds of the capital raising have strengthened the Group's balance sheet and provided additional working capital.

Operational highlights:

·	Land bank increased to a record 9,143 plots, 2,881 of which have planning consent
·	56 private home sales (31 December 2018: 79 private homes), excluding joint ventures realising £13.8m (31 December 2018: £18.6m). During the twelve-week period from 1 April 2020, 52 gross reservations and 6 cancellations resulting in 46 net reservations achieved from five active outlets
·	Current forward sales of homes reserved and exchanged amounts to £21.2m including a block sale of 24 units from one site, and in addition, a hotel under construction in Bournemouth for £13.3m
·	The planning application at Hillingdon Gardens, Hillingdon was 'called-in' by the Mayor of London, with the application expected to be heard in the last quarter of the full-year reporting period
·	Development agreement signed in April 2020 with Homes England for more than 600 homes, commercial and community facilities, as well as a site for a new school in Basildon, with estimated gross development value of £200m
·	Unconditional sale of 94 plots at the Group's flagship development site at Wilton Park in Beaconsfield to Bewley Homes plc, with completion in September 2020

Note: On 6 June 2019, the Group changed its accounting reference date from 30 June to 30 September so that its reporting timetable was more closely aligned to value recognition and the operational cycles of the business. Consequently, the current period presented is for the six-month period to 31 March 2020, and the comparative information for the six-month period to 31 December 2018.

Enquiries:

Inland Homes plc:	Tel: [phone]
Stephen Wicks, Chief Executive
Nishith Malde, Finance Director
Gary Skinner, Managing Director
Panmure Gordon (UK) Limited	Tel: [phone]
Dominic Morley
Erik Anderson
Instinctif Partners	Tel: [phone]
Mark Garraway
Rosie Driscoll

Notes to Editors:

Incorporated in the UK in 2005, Inland Homes plc is an AIM listed specialist housebuilder and brownfield developer, dedicated to achieving excellence in sustainability and design.

Inland Homes acquires brownfield land in the South and South-East of England principally for residentially led development schemes. The business then enhances the land value by obtaining planning permission, before building open market and affordable homes or selling surplus consented land to other developers to generate cash.

The Company is committed to extensive public and community consultation in order to ensure that, where possible, local community needs and objectives are met.

Inland's aim is to create sustainable communities and homes which set a benchmark for all future developments in the South and South East of England. The Company is always looking for brownfield sites without planning permission for future development.

For further information, please visit:

Inland Homes website at www.inlandhomes.co.uk

Hugg Homes - www.hugghomes.co.uk

Rosewood Housing - www.rosewoodhousing.co.uk

Chairman's Statement

As previously announced, the global COVID-19 pandemic and the Government's restrictions on movement and the resulting uncertainty has significantly impacted the interim results for the six-month period ended 31 March 2020.

Revenue for the six-month period to 31 March 2020 was £59.6m, but as previously disclosed, five significant property transactions with a total revenue of £46.2m, three of which were with major UK housebuilders, were aborted at a very late stage in March 2020. I comment later on the outlook for the business and highlight some early indicators of recovery.

The Group's priorities

The Group's priority remains the health, safety and wellbeing of its staff, customers and subcontractors. Measures were rapidly taken to ensure full compliance with the Government's 'COVID-19 Secure'guidelines and the Group is a signatory to the Home Builders Federation's 'Charter for Safe Working Practice', which supports the protocols builders have to have in place to protect the health and safety of the home building workforce, visitors to site and the local community. As a result, stringent new procedures regarding hygiene, social distancing, travel and self-isolation have been put in place and these measures are subject to continual review by the Group's health and safety personnel.

We have maintained good communication with our staff during these uncertain times and the transition from office-based staff to home working was achieved with minimum disruption to the business. This is a real testament to the quality, commitment and professionalism of our staff at all levels.

Measures taken at our sites and with our sales and marketing suites

In line with the prevailing safety advice, the Group has continued construction activity across a number of sites where it has made commercial sense to do so and where the sites could operate in a way that ensure proper social distancing could be maintained. This includes a number of partnership housing developments under construction for Registered Providers, which continue to generate significant monthly cashflow. Three sites now remain closed and a decision about when and on what basis to open these sites will be made in the coming weeks.

In line with updated Government guidance that removed the restriction on non-essential home moves and supported the return of activities related to the sale and purchase of homes, sales and marketing suites opened on 22 May 2020. The reopening of the sales and marketing suites enhances our online and remote sales and marketing activity. To ensure the appropriate social distancing, visits are by appointment only and limited to two people from the same household.

Measures taken to reduce the cost base and improve the Group's liquidity

The Group moved quickly and decisively in response to the COVID-19 pandemic and implemented a number of measures to reduce the Group's cost base, preserve its assets and conserve cash. These measures included significant salary cuts for the Board, Operational Board and all staff earning over £40,000, with effect from 1 April 2020.

We have also negotiated deferrals of certain land payments and successfully renegotiated the term for loan repayments that were due in line with the aborted land sales referred to above. As a result of the need for prudent cash management, the Board cancelled the second interim dividend of 2.25p per share that was due to be paid in June 2020, conserving cash of £4.6m.

In addition, the Group raised £9.4m (net of expenses) in May 2020 from a placing and subscription of new ordinary shares, the proceeds of which have strengthened the balance sheet and provided additional liquidity. We are delighted with the response from investors and welcome several new institutional shareholders to our register, as well as many new retail shareholders via PrimaryBid.

Goingconcern

The Board is mindful that there is no certainty as to how the COVID-19 global pandemic will play out and how, for the foreseeable future, this may affect the Group, the industry in which it operates and the wider economy. In particular, a significant worsening of the situation and a return to a strict lockdown for a prolonged period would have implications for us as it would for many other businesses. As such, there is significant uncertainty as to what foreseen or unforeseen action or actions the Group may be required to take in order to respond to any circumstances that may arise in the future.

Looking through the COVID-19 pandemic

Some evidence of a recovery is becoming apparent. The Group is in discussions with various parties regarding a number of land disposals. We were delighted to announce recently the first of these with the sale of 94 plots at Wilton Park in Beaconsfield which was both at a premium to the EPRA valuation and at a higher value than was being achieved in March. I look forward for the Group to report further transactions, as they are achieved, over the next few months.

Group results for the six months ended 31 March 2020

On 6 June 2019, the Group changed its accounting reference date from 30 June to 30 September so that its reporting timetable was more closely aligned to value recognition and the operational cycles of the business. Consequently, the current period presented is for the six months to 31 March 2020 and the comparative information for the six-month period to 31 December 2018.

Income statement

Revenue for the six-month period to 31 March 2020 was £59.6m (six months to 31 December 2018: £51.0m), which whilst representing a 17% improvement when compared with the previous period, was significantly below management's expectations.

The Group sold 56 private homes (31 December 2018: 79 private homes), excluding joint ventures, realising £13.8m (31 December 2018: £18.6m). The average selling price of these homes was £241,000 (31 December 2018: £235,000) and homes acquired under the Help to Buy scheme represented approximately 48% of these sales. Our net private reservation rate per active sales outlet was 0.71 unit per week. This reflects the political certainty achieved following last year's General Election which proved to be extremely positive for the UK housing market.

The Group generated £35.3m (31 December 2018: £15.0m) of contract income from partnership housing and this business segment continues to provide good cashflow and balances the Group's market risk exposure.

Of growing importance to the Group is our fee earning capacity from our planning and management services, where the Group enters into a planning and management services agreement with external third-party investors. The process would typically include Inland Homes procuring brownfield land for its investors, adding value by managing the planning process and, once obtained, creating a disposal plan for the consented site. Management fees from this activity, which are usually earned above a minimum target return for the investors, decreased from £10.1m to £9.4m.

Gross profit decreased from £14.6m to £4.9m and operating profit was significantly reduced from an operating profit of £8.4m to an operating loss of £3.1m. We made provisions against carrying values of strategic land and additional costs recognised against construction contracts.

The loss before tax was £7.2m (31 December 2018: profit before tax of £5.5m). No interim dividend is proposed.

Group's assets and liabilities

Net assets at 31 March 2020 were £156.0m (31 December 2018: £147.6m) equating to net assets per share of 75.75p (31 December 2018: 71.71p). The undiluted EPRA net asset value per share increased from 103.57p at 31 December 2018 to 109.30p at 31 March 2020 reflecting the unrealised value of our land portfolio and the cumulative retained profits since 31 December 2018.

Non-current assets

At 31 March 2020, investment properties amounted to £46.9m, comprised principally of residential properties at Wilton Park, Beaconsfield and a development site in Poole, Dorset. Other receivables due after more than one year of £21.5m includes £19.9m of deferred consideration due on the sale of our 50% interest in Cheshunt Lakeside Developments Limited that owns the site at Cheshunt, Hertfordshire which has planning consent for 1,253 residential plots and 53,000 sq ft of commercial space.

Inventories, trade and other receivables

Inventories increased over the previous period to £176.2m (31 December 2018: £162.5m), driven by the growth in the land bank from 7,291 plots to 9,143 plots, together with an increase in work in progress on homes under construction. Trade and other receivables have increased to £46.3m from £26.1m as a result of an increased number of contracts within the management fee income stream.

Cash and net debt

Cash balances stood at £17.8m (30 September 2019: £10.9m; 31 December 2018: £30.2m). As a result of the abortive land sales referred to above, the Group's net debt remained higher than planned at £150.1m (30 September 2019: £152.3m; 31 December 2018: £96.6m), representing net gearing of 96.2% (30 September 2019: 93.9%; 31 December 2018: 45.4%). Reducing net debt and net gearing remains a key strategic focus for the Group and discussions are ongoing on a number of land disposals which would, when completed, significantly improve both metrics.

Also in May 2020, the Group increased its development facility from Homes England for our Chapel Riverside development in Southampton from £11.3m to £15.3m.

Land portfolio

At 31 March 2020, the Group's land bank (including joint ventures) was at a record 9,143 plots (31 December 2018: 7,291), of which 2,881 (31 December 2018: 2,048) have planning consent. Our growing strategic land portfolio, where most of the plots are controlled by discount to market value options, has increased and now comprises 3,658 plots (31 December 2018: 2,476). We continue to achieve a good success rate in getting sites allocated for development in local plans.

A planning application for the reserved matters in respect of 195 homes at Cheshunt Lakeside was approved in March 2020 and discussions are well advanced for the sale of this first phase to a housing association for a turnkey package for these homes via our partnership housing division.

In April 2020, the Group entered into a development agreement with Homes England for the development of more than 600 homes as well as commercial and community facilities and a site for a new school in Basildon. Under the agreement, the Group will acquire land on a phased basis from Homes England once a viable planning consent has been secured. The site has an estimated gross development value of £200m and we look forward to submitting an early planning application for the comprehensive redevelopment of the site.

As expected, the Greater London Authority (GLA) has 'called-in' the Group's planning application for more than 500 homes at Hillingdon Gardens, Hillingdon. We expect the GLA to hear the planning application in the final quarter of the Group's full-year reporting period.

We are experiencing a good level of enquiries for a number of our sites with planning consent, at prices which are in line with our expectations, and we remain confident in resuming the planned land disposals in the near term, which will further reduce the Group's net debt and provide additional working capital.

Partnership housing

In line with our strategy and with the number of plots going through the planning process, our focus is to increase our partnership housing activity.

We are working closely with housing associations and build to rent operators to secure conditional contracts on land sales along with a construction contract to provide the homes. This activity suits sites for large scale apartment developments in the south-east. The Group uses its land and planning expertise and construction teams to add value in this space as appropriate. Our blue-chip client base includes many of the UK's leading housing associations, including Clarion Housing Group and A2 Dominion. There remains considerable demand for much-needed new affordable homes with the Group proving to be an attractive delivery partner to the industry.

Recent and current forward trading

During the twelve-week period from 1 April 2020, the Group achieved 52 gross reservations and 6 cancellations resulting in 46 net reservations from five active outlets, including a block sale of 24 units from one site. Our current forward sales of homes reserved and exchanged amounts to £21.2m. In addition, we have forward sold a hotel under construction at our development in Bournemouth for £13.3m which is expected to complete in early 2021.The Group is also being approached by housing associations and build to rent funds for bulk purchases of apartments under construction.

The Group's focus is to increase its partnership construction activity and the current partnership housing order book amounts to £84.9m. It is also in discussions with certain parties for further partnership housing opportunities.

TheGroup's business model

The Group has a balanced and flexible business model - including land trading, housebuilding and partnership construction activities and the provision of planning and management services to third parties - that allows the Group to generate several different income streams from its developments. With our experienced management team, unbroken track record in securing planning permission on brownfield sites and our growing reputation as a housebuilder of choice for housing associations, we look forward to realising the value from our development portfolio in the future.

Outlook

In the short term, the ramifications of the global COVID-19 pandemic on the Group and its financial performance for the year ending 30 September 2020 are uncertain.

Despite the current challenges, there remains an underlying shortage of high-quality, affordable housing across the UK and we are seeing demand returning for our land assets and expertise.

The measures we put in place to reduce the Group's cost base, preserve our assets and conserve cash will put us in a stronger position as market conditions improve. It should also be noted that we have a record high quality land bank, of which nearly a third of plots have planning consent, underpinning increases in EPRA NAV and NAV per share.

Whilst it is too early to restore guidance, the underlying resilience and quality of the business gives the Board confidence that the Group will weather the continued uncertainty in a recovering market environment.

Terry Roydon

Chairman

Principal risks and uncertainties

TheGroup's principal risks and uncertainties, the potential impact and mitigation are listed below and are monitored by the Audit Committee and the Board.

COVID-19

The global COVID-19 pandemic and the Government's restrictions on movement and the resulting uncertainty has meant that the interim results for the six months ended 31 March 2020 have been severely impacted. Notwithstanding, the Group has moved quickly to manage the immediate consequences of the pandemic. The Group's priority remains the health, safety and wellbeing of its staff, customers and subcontractors.

Particular actions taken by the Group have included:

·	Ensuring full compliance with the Government's 'COVID-19 Secure' guidelines;
·	Stringent new procedures regarding hygiene, social distancing, travel and self-isolation and these measures are subject to continual review by the Group's health and safety personnel;
·	Maintaining good communication with our staff and other stakeholders during these uncertain times and the transition of office-based staff to home working with minimum disruption to the business;
·	Furloughing 73 employees from 1 April 2020 and making a claim under the Government's Job Retention Scheme;
·	Undertaking a restructure,resulting in a 11% reduction in headcount to date;
·	Implementing measures to allow all staff to work effectively from home in line with the Government's policy;
·	Introducing a number of measures to reduce the Group's cost base, preserve its assets and to conserve cash, including significant salary reductions for the Board, Operating Board and staff members earning over £40,000 per annum;
·	Negotiating deferrals of certain land payments and successfully renegotiating the terms for some loan repayments;
·	Improving our financial flexibility, increasing our development facility from Homes England for our Chapel Riverside development in Southampton from £11.3m to £15.3m; and
·	Successfully raising £9.4m (net of expenses) through a placing and subscription of 20,750,000 new ordinary shares.

The Board is mindful that there are no certain forecasts about how the COVID-19 global pandemic will play out and how this may affect the Group, the industry in which it operates and the wider economy for the foreseeable future. In particular, a significant worsening of the situation and a return to a strict lockdown for a prolonged period would have implications for us as it would for many other businesses. As such, there is significant uncertainty as to what foreseen or unforeseen action or actions the Group may be required to take in order to respond to any circumstances that may arise in the future.

InMay 2020, the Bank of England warned that the COVID-19 pandemic is likely to push the UK towards its deepest recession in history. As a result, it is likely that this will have a dramatic effect on employment and thus on incomes in the UK. It is also likely that in a recession, the availability of credit, and in particular mortgages, will be reduced which will adversely affect the ability of home buyers to complete their purchases.

BREXIT - withdrawal from the European Union ('EU')

The UK officially left the EU on 31 January 2020. The UK and EU are currently negotiating suitable trading arrangements to determine each parties position following the end of this transition period. The Government has repeatedly stated that the transition period will end by 31 December 2020. The Group's principal risks and uncertainties take into account the possibility that there is no certainty that any agreement will be reached.

Risk and description	Consequences of risk	Existing mitigations and internal controls
1. Infectious diseases The COVID-19 pandemic has demonstrated that the spread of an infectious disease or virus can lead to the Government imposing controls, including the movement of people and the closing of different parts of the economy and business	· Significantly reduced revenue or no revenue for a period of time · Severe impact on cashflow · Difficulties in meeting the Group's liabilities · Danger of breaching banking covenants	· Balanced business model with housebuilding and contracting activities complementing its land trading business · The Group's Operating Board regularly ensures that the Group's business continuity and disaster recovery plans are tested and updated where required · Ensuring IT capabilities to accommodate efficient home working · Maintain sufficient liquidity with longer term borrowing facilities
2. Adverse economic conditions A decline in macro-economic conditions in the UK and/or a downturn in conditions affecting the UK residential housing market or a decline in the propensity of people to buy homes	· A fall in the demand for housing and a material decline of both transaction levels and house prices as a result of low consumer confidence impacted by: - higher unemployment or fear of unemployment - ongoing economic uncertainty - weak real wage growth and reduced disposable income - rising interest rates - growing inflation - restriction in the availability of mortgages · Business uncertainty due to policy changes · Downward land and investment property portfolio valuation	· Economic environment considered before committing to significant transactions or events such as land purchases and sales launches. · Control over land acquisitions · Refined strategic priorities to maximise market opportunities · A focus on build to rent contracts gives greater certainty over cashflow · Strong financial forecasting and scenario planning
3. Adverse Government policy and planning regulations Potential changes in Government policy such as changes to the planning system, the tax regime, housing, environmental or building regulations, or amendment of the Help to Buy scheme	· Risk of delay or refused planning decisions · Uncertainty around design solutions · Programmes and commencements on site disrupted · Increased costs due to excessive planning conditions (CIL and Section 106), increasing environmental and other taxes · Increased costs due to more challenging sustainability targets and fire and safety regulations. Adverse effect on revenues, margins and asset values · Failure to comply with the requisite laws or regulations may lead the Group to be fined and suffer reputational damage · Reduction in sales resulting from changes to the Help to Buy Scheme	· Considerable in-house technical and planning expertise available to address the prevailing regulations · Strong relationships maintained with local authorities, planning officers and local communities to better understand underlying policy and planning prospects · Regularly review prospects of the strategic land portfolio, with processes and appraisals in place to minimise disruption · Focus on acquiring development sites already allocated for development · Potential impact of changes in regulations are communicated throughout the relevant departments · Ensure a greater proportion of future product is within the price range of the revised Help to Buy Scheme, extended until Spring 2023
4. Inability to source and develop suitable land An inadequate supply of suitable land or the inability to convert the unconsented land portfolio into viable consented sites may frustrate the Group's growth	· Portfolio depletion - fewer longer-term sites to replenish the portfolio at good margins · Impact to in-house construction arm/self-build function · Operational start dates delayed on site	· Highly experienced Land and Planning Teams employed with strong track record of securing sites and planning consents · Targeted approach to land acquisitions through dedicated Land Team · Local insight and established relationships with agents and vendors give us a competitive edge · All potential land acquisitions are subject to a robust appraisal process to ensure viability
5. Constraints on construction resources Planned costs may rise due to the reduced availability of skilled labour and sub-contractors and building materials at budgeted prices. New supply chains may need to be developed in light of a 'no deal' Brexit.	· Build programme and completion delays leading to build cost inflation · Ineffective and stretched labour force could impact business performance · Shortage or increase in cost of materials could delay construction · Build quality may be impacted due to shortage of material or increased cost	· In-house construction arm means we can engage subcontractors directly · Strong relationships with supply chain to ensure consistency of supply and cost efficiency · Close monitoring of build programme to ensure we react quickly to any supply chain issues, including labour requirements · Actively seek to establish and maintain long-term supplier and subcontractor partnerships · Maintain regular contact with subcontractors and provide high-level and site-specific programme information to aid with demand planning
6. Failure to effectively manage major projects Failure to secure a planning permission on a timely basis or on viable terms and unforeseen operational delays caused by disputes with third parties, bad weather or the lack of project oversight could lead to delay, increased costs or termination of a project	· Increased costs and reduced margins · Reduced quality of product · Health and safety issues · Reputational damage	· Sites are monitored as a portfolio by the Board before any major acquisitions are made · Each site has a detailed plan prepared including costs, labour utilisation and timing and is managed by the Group's Operating Board and by on site management · Extensive investment in systems and personnel to ensure tight controls and project oversight on developments · Regular management and project team monitoring · Ensure appropriate insurance is in place
7. Health and safety A deterioration in the Group's health and safety standards including additional measures put in place to comply with Public Health England guidance on social distancing	· Immediate personal injury or damage to property · Reputational damage · Prosecution/imprisonment/significant fines · Remediation or legal costs · Programme delays and inability to reach forecast figures/market expectation	· Strong safety culture driven by Directors and Senior Staff · Experienced Health and Safety Department reinforces safety culture and carefully monitors adherence to guidance · Annual Health and Safety Workshops for all staff
8. Staff Inability to attract and retain high calibre employees at all levels	· Inability to meet strategic objectives · Pressured workloads where teams are under-resourced · Over reliance on consultants and agency staff · Inefficiencies and delays to operations resulting in increased costs could adversely affect the Group's financial results and prospects	· Remuneration packages are regularly benchmarked against industry standards to ensure competitiveness · Dedicated HR team which monitors pay structures and market trends · Providing quality training and professional development opportunities, including through our Graduate and Apprenticeship Programmes · Development of preferred supplier list of specialist recruitment firms
9. Solvency and liquidity Difficulty in procuring borrowing facilities at competitive rates and insufficient cash headroom	· Liquidity crisis and inability to meet on-going operational costs and other commitments · Covenant compliance · Lack of development funding limits our ability to be agile in response to changes in the economic environment and to future development opportunities	· Regular review at board level of detailed cashflow forecasts which are subject to sensitivity analysis · Strong relationships with financial institutions through regular engagement · Sufficient facilities in place to allow us to take advantage of land opportunities · Asset sales
10. Inadequate environmental procedures Inadequate method statements to deal with environmental hazards on development sites	· Potential fines · Contamination of water courses · Risk of fatalities · Damage to the Group's reputation	· Engage experienced professional consultants · Ensure adequate insurance cover in place · Procure environmental sign off from relevant government departments · Environmental risk assessments carried out prior to all land acquisitions
11. Cyber and business continuity Cyber security risks such as data breaches, hacking and failure of the Group's IT security systems	· Financial penalties and sanctions · Reputational damage · Loss of personal and/or business information · Outage of IT systems leading to operational disruption · Phishing attacks and ransom demands · Fraud leading to financial loss	· Group has a fully-tested disaster recovery system which is tested annually by a third party supplier · Boundary firewall at each location · Email encryption and two-factor authentication in place · Anti-virus software on all devices · Ensure appropriate insurance in place

Group income statement

for the six-month period ended 31 March 2020

Continuing operations	Note	Six-month period ended 31 March 2020 (unaudited) £m	Six-month period ended 31 December 2018 (unaudited) £m	Fifteen-month period ended 30 September 2019 (audited) £m
Revenue	5	59.6	51.0	147.9
Cost of sales	5	(54.7)	(36.4)	(115.4)
Gross profit		4.9	14.6	32.5
Administrative expenses		(7.6)	(6.2)	(15.7)
Gain on sale of joint venture interest		-	-	12.6
Loss on sale of controlling interest in subsidiary		(2.0)	-	-
Share of profit of joint ventures		1.8	0.3	2.0
Share of profit/(loss) of associate		0.1	(0.1)	0.2
Revaluation of investment property	7	(0.3)	0.1	1.1
Revaluation of investments		-	(0.3)	-
Operating (loss)/profit	5	(3.1)	8.4	32.7
Finance cost - interest expense		(4.5)	(3.7)	(9.4)
Finance income - interest receivable and other income		0.4	0.8	1.7
(Loss)/profit before tax	5	(7.2)	5.5	25.0
Tax credit/(charge)		0.7	(0.8)	(1.1)
Deferred tax (charge)/credit		-	(0.1)	0.7
Total (loss)/profit for the period	5	(6.5)	4.6	24.6
Revaluation of quoted investments		(0.1)	-	(0.4)
Total (loss)/profit and comprehensive (expense)/income for the period		(6.6)	4.6	24.2
(Loss)/earnings per share for the (loss)/profit attributable to the equity holders of the Company during the period
- basic		(3.20)p	2.25p	11.79p
- diluted		(3.08)p	2.18p	11.47p

The accompanying notes form an integral part of this half-year report.

Group statement of financial position

at 31 March 2020

	Note	As at 31 March 2020 (unaudited) £m	As at 30 September 2019 (audited) £m
ASSETS
Non-current assets
Investment properties	7	46.9	49.3
Property plant and equipment	8	6.1	6.3
Right-of-use asset	9	1.4	-
Intangible assets	10	0.3	0.3
Investments in quoted companies	11	1.0	1.1
Investment in joint ventures	12	8.6	8.0
Amount due from joint ventures	12	-	1.0
Investment in associate	12	1.3	1.3
Other receivables	14	21.5	21.8
Total non-current assets		87.1	89.1
Current assets
Inventories	13	176.2	192.4
Trade and other receivables	14	46.3	45.4
Assets held for sale	15	5.6	4.7
Amounts due from associate	12	3.4	3.3
Amounts due from joint ventures	12	37.5	34.8
Cash and cash equivalents		17.8	10.9
Total current assets		286.8	291.5
Total assets		373.9	380.6
LIABILITIES
Current liabilities
Bank loans and overdrafts	16	(32.3)	(48.0)
Other loans	16	(28.2)	-
Trade and other payables	17	(40.8)	(47.7)
Lease liabilities	19	(0.5)	-
Corporation Tax		(1.4)	(2.2)
Other financial liabilities	18	(4.9)	(4.1)
Total current liabilities		(108.1)	(102.0)
Non-current liabilities
Bank loans	16	(67.0)	(82.1)
Other loans	16	(11.0)	(7.2)
Lease liabilities	19	(1.2)	-
Zero Dividend Preference shares	16	(29.4)	(25.9)
Deferred tax	20	(1.2)	(1.2)
Total non-current liabilities		(109.8)	(116.4)
Total liabilities		(217.9)	(218.4)
Net assets		156.0	162.2
EQUITY
Share capital	21	20.7	20.7
Share premium account	22	36.4	36.4
Employee benefit trust	22	(1.1)	(1.1)
Special reserve	22	1.1	1.1
Retained earnings	22	98.9	105.1
Total equity		156.0	162.2

Group statement of changes in equity

for the six-month period ended 31 March 2020

	Share capital £m	Share premium £m	Employee Benefit Trust £m	Special reserve £m	Treasury reserve £m	Retained earnings £m	Total £m
As at 30 June 2018 (audited)	20.5	34.8	(1.1)	6.1	(0.5)	82.8	142.6
Total comprehensive income for the period	-	-	-	-	-	4.6	4.6
Transactions with owners:
Share-based payments	-	-	-	-	-	0.4	0.4
Issue of ordinary shares	0.3	1.6	-	-	-	(1.9)	-
Purchase of own ordinary shares	-	-	-	-	(0.1)	-	(0.1)
Exercise of share options	-	-	-	-	0.5	(0.4)	0.1
As at 31 December 2018 (unaudited)	20.8	36.4	(1.1)	6.1	(0.1)	85.5	147.6
Total profit for the period	-	-	-	-	-	20.0	20.0
Other comprehensive expense	-	-	-	-	-	(0.4)	(0.4)
Transactions with owners:
Share-based payments	-	-	-	-	-	(0.1)	(0.1)
Issue of ordinary shares	(0.1)	-	-	-	-	0.1	-
Exercise of share options	-	-	-	-	0.1	-	0.1
Dividend payment	-	-	-	(5.0)	-	-	(5.0)
As at 30 September 2019 (audited)	20.7	36.4	(1.1)	1.1	-	105.1	162.2
Total loss for the period	-	-	-	-	-	(6.5)	(6.5)
Other comprehensive expense	-	-	-	-	-	(0.1)	(0.1)
Transactions with owners:
Share-based payments	-	-	-	-	-	0.4	0.4
As at 31 March 2020 (unaudited)	20.7	36.4	(1.1)	1.1	-	98.9	156.0

Group statement of cash flows

for the six-month period ended 31 March 2020

	Note	Six-month period ended 31 March 2020 (unaudited) £m	Six-month period ended 31 December 2018 (unaudited) £m	Fifteen-month period ended 30 September 2019 (audited) £m
Cash flow from operating activities
(Loss)/profit for the period before tax		(7.2)	5.5	25.0
Adjustments for:
- depreciation	8	0.4	0.1	0.7
- share-based payments		0.4	0.2	0.3
- revaluation of investment property		0.3	(0.1)	(1.1)
- loss on sale of controlling interest in subsidiary		2.0	-	-
- revaluation of investments		-	(0.3)	-
- interest expense		4.5	3.7	9.4
- interest receivable and similar income		(0.4)	(0.8)	(1.7)
- gain on sale of joint venture interest		-	-	(12.6)
- IFRS15 opening adjustment		-	-	0.2
- share of profit of joint ventures		(1.8)	(0.3)	(2.0)
-share of (loss)/profit of associate		(0.1)	0.1	(0.2)
Corporation tax payments		(0.1)	(2.6)	(5.6)
Changes in working capital:
- increase in inventories		(9.2)	(27.9)	(50.8)
- increase/(decrease) in trade and other receivables		0.6	6.3	(7.9)
- (decrease)/increase in trade and other payables		(6.9)	4.7	7.9
- increase in other financial liabilities		0.8	-	0.4
- increase in trading balance due to joint ventures		-	-	4.1
Net cash outflow from operating activities		(16.7)	(10.8)	(33.9)
Cash flow from investing activities
Interest received		-	0.2	1.0
Purchase of property, plant and equipment		(0.2)	(0.1)	(5.4)
Purchase of intangible assets		-	-	(0.3)
Purchase of investment property		-	(0.2)	(1.5)
Investment in joint venture		-	(1.0)	-
Loans provided to joint ventures	12	(11.4)	(4.7)	(19.9)
Amounts repaid by joint ventures	12	10.9	3.4	-
Distribution of profits from joint venture		-	-	1.0
Amounts repaid by associate		-	-	2.6
Net cash outflow from investing activities		(0.7)	(2.4)	(22.5)
Cash flow from financing activities
Interest paid		(3.5)	(2.2)	(7.0)
Proceeds from borrowings and leasing liabilities		39.8	13.4	52.6
Repayment of borrowings and leasing liabilities		(14.7)	(8.1)	(20.0)
Issue of zero dividend preference shares		2.7	-	6.2
Equity dividends paid to ordinary shareholders		-	-	(5.0)
Exercise of share options		-	-	0.1
Purchase of own shares		-	(0.1)	-
Net cash inflow from financing activities		24.3	3.0	26.9
Net increase/(decrease) in cash and cash equivalents		6.9	(10.2)	(29.5)
Net cash and cash equivalents at beginning of period		10.9	40.4	40.4
Net cash and cash equivalents at end of period		17.8	30.2	10.9

Notes to the half-year financial report

for the six-month period ended 31 March 2020

1. Nature of operations and general information

The principal activity of the Company and its subsidiaries (the 'Group') is to acquire residential and mixed-use sites and seek planning consent for development. The Group also develops a number of plots for private sale.

Inland Homes plc is the Group's ultimate parent company. It is incorporated and domiciled in Great Britain. The address of Inland Homes plc's registered office, which is also its principal place of business, is Burnham Yard, London End, Beaconsfield, Buckinghamshire, HP9 2JH.

Inland Homes plc's shares are quoted on AIM, a market operated by the London Stock Exchange. This consolidated half-yearly financial report has been approved for issue by the Board of Directors on 29 June 2020.

2. Basis of preparation

Neither the financial information for the half year to 31 March 2020 nor the half year to 31 December 2018 was subject to an audit.

The financial information set out in this half-yearly financial report does not constitute statutory accounts as defined in Sections 434(3) and 435(3) of the Companies Act 2006. The Group's statutory financial statements for the year ended 30 September 2019 have been filed with the Registrar of Companies and are available at www.inlandhomesplc.com. The Auditor's report on those financial statements was unqualified, did not draw attention to any matters by way of an emphasis of matter and did not contain any statement under Section 498 of the Companies Act 2006.

The financial information in these condensed consolidated financial statements is that of the holding company and all of its subsidiaries together with the Group's share of its joint ventures and associate. It has been prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting and should be read in conjunction with the report and accounts for the fifteen-month period ended 30 September 2019, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and as issued by the International Accounting Standards Board.

Going concern

The Board has reviewed the performance of the Group for the current period and forecasts for a period covering 12 months from the date of approval of this report.

Inpreparing the forecasts the Directors have considered the market disruptions brought about by COVID-19 alongside the other risks and uncertainties, including credit risk and liquidity risk, the present economic climate, the current demand for land with planning consent and the state of the housing market in the geographic areas where the Group operates.

On16 June 2020 the Group announced the unconditional sale of 94 plots at Wilton Park, Beaconsfield with completion due in September 2020. We are also now at an advanced stage on a number of land sales which are anticipated to exchange or complete in July 2020. In addition, we have forward residential sales of £21.2m including a block sale of 24 units on one site. We also have a contracted forward sale of a hotel under construction which will realise proceeds of £13.3m in early 2021. The current partnership housing order book stands at £84.9m with a further construction contract for £34m at an advanced stage and expected to be signed in July 2020. The Group currently has annualised residential and commercial rental income of c£2.4m. These actual and anticipated cash inflows are expected to ensure that the Group has sufficient working capital for its requirements.

The key risks faced by the Group (and indeed in our sector) are set out under 'Principal risks and uncertainties' above. COVID-19 may result in further uncertainties that are not apparent at present.

In response to the current situation the Group has adopted stringent cash management procedures to conserve resources (announced on 30 March 2020), a range of other measures undertaken to reduce the cost base to further conserve cash (announced on 30 April 2020) and raised new equity of approximately £9.4m, net of expenses, to strengthen the balance sheet and provide additional liquidity in this uncertain period.

The Group has facilities totalling £55.0m falling due for repayment within 12 months following the release of this Interim Report. Of this amount, £13.5m will be repaid in September 2020 from the contracted sale that was announced by the Group on 16 June 2020. The balance of the facilities of £41.5m will either be repaid from planned land sales over the next five months in the order of £37m (some of which are already agreed and are with solicitors) or refinanced or extended. In this regard, the Board is confident of a successful outcome on the basis that on one significant loan, the loan is well below the loan to value (LTV) of 35% required under the facility and discussions with the lender during June 2020 were favourable, and on the other loans the parties have all indicated that they would be supportive of our proposals. In this respect we note that £28.2m of the remaining debt of £41.5m is with parties, including high net worth investors, that have had a successful track record of working with the Directors for over 20 years.In addition, the Group has further undrawn debt facilities of £27.7m as disclosed in Note 16.

The Board has also performed detailed sensitivity analyses to test the Group's liquidity and banking covenant compliance based on scenarios including:

(i) a delay in all land disposals by six months and a delay in the sale of residential homes by two months in respect of land parcels and unit sales that have not exchanged contracts; and

(ii) consideration of the likelihood of delay or cancellation of significant projects.

On these scenarios, the Group remained able to meet its debts and remain in compliance with all its covenants other than the need for a relaxation of the interest cover from one of its lenders, who have verbally indicated that they would consider this favourably. On the second scenario, the Group also relied on the renewal of a facility where the lender's agent has confirmed recently that the underlying investors in the facility are supportive and have indicated that they would wish to renew this facility for a further period of more than 12 months. In the event that the Group is unable to proceed with its plans or the alternative actions described above, it has the option to sell certain valuable sites with planning consent which would more than adequately cover any shortfall in cash.

The Strategy outlined above details our approach to the current situation but, the Board is mindful that no one can forecast exactly how the COVID-19 global pandemic will play out and how this may affect the Group, industry and the wider economy for the foreseeable future. In particular, a significant worsening of the situation and a return to a strict lockdown for a prolonged period would have implications for the Group as it would for many other businesses. Such a situation would require the Board to re-examine the Group's financial position at the time and if necessary, report any significant adverse changes.

At the time of approving the Interim Report and after making appropriate enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. The Directors therefore consider it appropriate to prepare the financial statements on the Going Concern basis.

3. Accounting policies

Basis of consolidation

The Group's financial statements consolidate the financial statements of the Company and all of its subsidiary undertakings drawn up to 31 March 2020. Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the subsidiary; exposure, or rights to, the variable returns from its involvement with the subsidiary; and the ability to affect those returns through its power over the subsidiary. The Group obtains and exercises control through voting rights and development agreements.

Unrealised gains on transactions between the Group and its subsidiaries are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

Business combinations

At the time of acquisition, the Group considers whether each acquisition represents the acquisition of a business or the acquisition of an asset. The Group accounts for an acquisition as a business combination where an integrated set of activities is acquired in addition to the property. Where such acquisitions are not judged to be the acquisition of a business, they are not treated as business combinations. Rather, the cost to acquire the corporate entity is allocated between the identifiable assets and liabilities of the entity based upon their relative fair values at the acquisition date. Accordingly, no goodwill or additional deferred tax arises.

Acquisitions of subsidiaries are dealt with by the acquisition method. The method involves the recognition at fair value of all identifiable assets and liabilities, including contingent liabilities and non-controlling interests of the subsidiary, at the acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition, the assets and liabilities of the subsidiary are included in the Group Statement of Financial Position at their fair values, which are also used as the basis for subsequent measurement in accordance with the Group's accounting policies. Goodwill is stated after separating out identifiable intangible assets. Goodwill represents the excess of the fair value of the consideration transferred over the fair value of the Group's share of the identifiable net assets and non-controlling interests of the acquired subsidiary at the date of acquisition.

New accounting policies

In the current period, the Group has adopted IFRS 16 'Leases' which has resulted in the Group recognising a right-of-use asset and liability on the balance sheet initially at the present value of all future lease payments for any leases for which it is the lessee. The treatment of leases where the Group is acting as a lessor is substantially unchanged from that currently applied under IAS 17. The Group has elected to adopt IFRS 16 using the Modified Retrospective Approach meaning that a retrospective adjustment of comparative periods is not required. The right-of-use asset has been included by taking the option to recognise it at an amount equal to the lease liability. There is no impact on initial application to the opening balance of equity.

The Group has also taken advantage of relevant practical expedients that allow exclusion of short term leases (less than 12 months) and leases of low value assets.

The impact on the Group's balance sheet at 1 October 2019 was to recognise a right-of-use asset and other payables by £1.4m. The right-of-use relates to the Group's occupation of Burnham Yard, Beaconsfield as a Head Office facility.

Other than as described above, the same accounting policies, presentation and method of computation are followed in these interim financial statements as were applied in the Group's latest audited financial statements and the accounting policies used in preparing these condensed interim financial statements are those which are expected to be applied for the financial year ending 30 September 2020.

New standards, interpretations and amendments not yet effective

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the Group has decided not to adopt early. The following amendments are effective for the period beginning 1 January 2020:

• IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (Amendment - Definition of Material)

• IFRS 3 Business Combinations (Amendment - Definition of Business)

• Revised Conceptual Framework for Financial Reporting

In January 2020, the IASB issued amendments to IAS 1, which clarify the criteria used to determine whether liabilities are classified as current or non-current. These amendments clarify that current or non-current classification is based on whether an entity has a right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. The amendments also clarify that 'settlement' includes the transfer of cash, goods, services, or equity instruments unless the obligation to transfer equity instruments arises from a conversion feature classified as an equity instrument separately from the liability component of a compound financial instrument. The amendments are effective for annual reporting periods beginning on or after 1 January 2022.

The Group is currently assessing the impact of these new accounting standards and amendments. The Group does not expect any other standards issued by the IASB, but not yet effective, to have a material impact on the Group.

Joint ventures and associate

Joint ventures are entities in which the Group has shared control with another entity, established by contractual agreement. Where the Group has significant influence but not control or joint control over the financial and operating policy decisions of another entity, it is classified as an associate. Joint ventures and associates are initially recorded in the Group Statement of Financial Position at cost and are accounted for using the equity method. All subsequent changes to the share of interest in the equity of joint ventures and associates are recognised in the Group's carrying amount of the investment. Changes resulting from the profit or loss generated are recognised in the Group's carrying amount of the investment and in 'share of profit/(loss) of joint ventures' for joint ventures and 'share of profit/(loss) of associates' for associates in the Group Income Statement and therefore affect the net results of the Group. These changes include subsequent depreciation, amortisation or impairment of the fair value adjustments of assets and liabilities. If the share of losses equals its investment, the Group does not recognise further losses, except to the extent that there are amounts receivable that may not be recovered or there are further commitments to provide funding. Both realised and unrealised gains on transactions between the Group and its joint ventures and associates are eliminated to the extent of the Group's investment in joint ventures and associates.

Realised and unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The accounting policies of the joint ventures and associates are consistent with those of the Group.

Revenue

In the prior fifteen-month period to 30 September 2019, the Group adopted IFRS 15 'Revenue from Contracts with Customers'. This established a principles-based approach for revenue recognition and is based on the concept of recognising revenue for obligations only when they are satisfied and the control of goods or services is transferred.

The standard is applicable to sales of land and sales of reversionary freehold, sales of residential units, property construction services and management fees from management of sites owned by third parties but excludes rental income which is accounted for within the scope of IAS 17 'Leases'. The adoption of IFRS 15 did not have a significant impact on the revenue recognition policies of the Group or treatment of revenue undertaken in the prior year period to 30 June 2018.

Revenue is measured by reference to the fair value of consideration received or receivable by the Group for goods supplied, excluding VAT and trade discounts.

Overages

Any variable consideration on overages is estimated at the point of sale taking into consideration the time to recover overage amounts as well as other factors which may give rise to variability. It is only recognised to the extent that it is highly probable that there will not be a significant reversal in the future and is reassessed throughout the duration of the sales contracts.

Sale of land and sales of freehold

Revenue from the sale of land and reversionary freeholds are recognised at a point in time on legal completion when all the following conditions have been satisfied:

• the Group has transferred to the buyer the control of ownership of the goods which is when contracts have been completed, which is when title passes;

• the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the land sold which is when the contract has been completed;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the Group; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

In respect of land sales, a contract is established through a formal purchase process that involves the formal exchange of contracts facilitated by legal advisors.

By nature of property transactions, all offers to purchase are subject to the customer successfully securing the required funds.

At the point when contracts are exchanged payment terms are agreed and funding to pay the purchase consideration must be secured and verified. This ensures that collectability is probable i.e. more likely than not, prior to commencement of the contract.

Sale of residential units

In respect of sales of residential units, a contract is established through a formal purchase process that involves the formal exchange of contracts facilitated by legal advisors. Revenue from the sale of residential units is recognised at a point in time on legal completion at the point where the Group has transferred to the buyer the control of the units.

By nature of property transactions, all offers to purchase are subject to the customer successfully securing the required funds.

At the point when contracts are exchanged payment terms are agreed and funding to pay the purchase consideration must be secured and verified. This ensures that collectability is probable i.e. more likely than not, prior to commencement of the contract.

Contract income

The Group acts as a main contractor on certain building projects, primarily on behalf of housing associations where the Group must provide social housing units as part of its S106 obligations under the planning consent or has sold the land to the housing association and entered into a construction contract to provide the completed units.

Revenue on construction contracts is recognised over time as the performance obligations are satisfied. The output method is used to measure the progress of the Group's performance over the duration of the contract. This is done monthly through valuation surveys conducted by the Group and by the customer respectively who then agree the value of work completed. The agreed valuation is used to determine the revenue to be recognised for the period.

Where the outcome of a contract on which revenue is recognised over time cannot be estimated reliably, revenue is recognised to the extent of contract costs incurred.

Management fee income

For each management contract there are a number of milestones, which varies from contract to contract, but in all cases includes a planning and a disposal obligation. The Directors must exercise judgement over whether each milestone constitutes a distinct performance obligation. In doing do they consider whether each milestone has a single commercial objective, whether any of the milestones are interdependent on any other milestone, and whether the service or goods being provided represents a single performance obligation. In determining the number of performance obligations, the Directors also consider the level of integration between the milestones.

Once the number of performance obligations has been determined, the Directors will exercise further judgement to allocate the consideration to each obligation, which is based on the stand- alone selling price of each performance obligation. Once the Group considers that the outcome of the contract can be reliably estimated then revenue and profit is recognised based on the proportion of the contract that is completed. There is also judgement in considering whether the obligations have been satisfied, and whether the revenue is recognised at a point in time or over time. This is assessed on a performance obligation by performance obligation basis. In general, the Directors have assessed that any construction or management of construction obligations are satisfied over time, given that the Group's work enhances an asset controlled by the customer. The planning and disposal obligations have been assessed to be recognised at a point in time.

Golden brick income

Sales of land where title transfers prior to construction beginning (or at 'golden brick') are considered to be a distinct performance obligation.

Revenue from land sales is recognised at a point in time, being the completion of contracts usually achieved at 'golden brick'. The separate construction element of the contract is recognised over time in accordance with the Group's policy for construction contracts.

Rental income

Rental income derived from operating leases is recognised on a straight line basis over the lease term.

Property, plant and equipment

Property, plant and equipment is stated at cost, net of depreciation and any provision for impairment.

Disposal of assets

The gain or loss arising on the disposal of an asset is determined as the difference between the disposal proceeds and the carrying amount of the asset and is recognised in the Group Income Statement.

Depreciation

Depreciation is calculated to write down the cost less estimated residual value of all property, plant and equipment by the straight line method where it reflects the basis of consumption of the asset.

The rates generally applicable are:

• Fixtures and fittings - 25%

• Office equipment - 25%

• Motor vehicles - 25%

• Right of use assets - Over useful economic life associated with the right of use

• Modular housing - Over useful economic life estimated at 40 years

• Material residual value estimates are reviewed as required, but at least annually.

Investment property

Investment properties are those properties which are not occupied by the Group and which are held for long-term rental yields, capital appreciation or both.

Investment property also includes investment property under construction that will be developed for future use as investment property.

Investment properties are initially measured at cost, including related transaction costs. At each subsequent reporting date they are remeasured to their fair value. Movements in fair value are included in the Group Income Statement. Investment properties are valued by the Directors based on up to date market information.

Subsequent expenditure is capitalised to the asset's carrying value only where it is probable that the future economic benefits associated with the expenditure will flow to the Group.

Any gain or loss resulting from the sale of an investment property is immediately recognised in the Group Income Statement. An investment property shall be derecognised on disposal. When the Directors consider that the status of the property has changed to being a development property it is transferred to inventories. A property is transferred to inventories when it has been decided that the units being constructed will be sold and no future rental income is expected.

When a partial disposal or transfer is made, the proportion relating to the disposal or transfer is derecognised.

Right-of-use assets

Right of use assets, comprising the lease of property, are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for lease payments made at or before commencement of the lease, initial direct costs incurred; and the amount of any provision recognised where the group is contractually required to dismantle, remove or restore the leased asset (typically leasehold dilapidations).

Intangible assets

Intangible assets, comprising costs incurred in the development phase of new business models and associated set-up costs, are stated at cost less provisions for both amortisation and impairments.

Development phase costs relate to new business models either separately acquired or acquired as part of a business combination are amortised over their estimated useful lives, generally not exceeding 20 years, using the straight-line basis, from the time they are available for use. The estimated useful lives for determining the amortisation charge considers the expected business model life. Asset lives are reviewed, and where appropriate adjusted, annually.

Research costs are recognised in the Income Statement as incurred.

The rates generally applicable are:

• Enterprise Resource Planning system - 10%

• Development costs - 25%

• Website costs - 25%

• Other computer software - 25%

Inventories

Inventories consist of land and work in progress and are valued at the lower of cost and net realisable value. Cost includes the purchase of sites, the cost of infrastructure and construction works, and legal and professional fees incurred during development prior to sale. Net realisable value is estimated based upon the future expected selling price, less estimated costs of completion and estimated costs to sell.

Assets held for sale

Non-current assets are classified as held for sale when:

• they are available for immediate sale;

• management is committed to a plan to sell;

• it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn;

• an active programme to locate a buyer has been initiated;

• the asset or disposal group is being marketed at a reasonable price in relation to its fair value; and

• a sale is expected to complete within twelve months from the date of classification.

Non-current assets classified as held for sale are measured at the lower of:

• their carrying amount immediately prior to being classified as held for sale in accordance with the Group's accounting policy; and

• fair value less costs of disposal.

Following their classification as held for sale, non-current assets are not depreciated.

The results of operations disposed during the year are included in the consolidated statement of comprehensive income up to the date of disposal.

Taxation

Current tax is the tax currently payable based on taxable profit for the period calculated using tax rates and laws substantively enacted at the reporting date.

Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Temporary differences include those associated with shares in subsidiaries and joint ventures unless reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future. In addition, tax losses available to be carried forward as well as other income tax credits to the Group are assessed for recognition as deferred tax assets.

Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates and laws that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the year-end date.

Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the Group Income Statement except where they relate to items that are recognised in other comprehensive income or directly in equity in which case the related deferred tax is also recognised in other comprehensive income or equity respectively.

Employee benefits

Defined contribution retirement benefit scheme

The Group operates a defined contribution retirement benefit scheme pension and costs charged against operating profits are the contributions payable to the scheme in respect of the accounting period.

Equity-settled share-based payment

All shared-based payment arrangements are recognised in the Group financial statements. All goods and services received in exchange for the grant of any share-based payment are measured at their fair values using the Black-Scholes options pricing model for share options and the Monte Carlo simulation technique for LTIPs.

Where employees are rewarded using share-based payments, the fair values of employees' services are determined indirectly by reference to the fair value of the instrument granted to the employee.

This fair value is appraised at the grant date and excludes the impact of any non-market vesting conditions. The Black-Scholes model is used to value the share options because it relies on fixed inputs and the options do not have non-standard features. The Monte Carlo simulation is more suitable to value LTIPs as they depend on the share price changing over time and therefore have more complex vesting conditions than the share options.

All equity-settled share-based payments are ultimately recognised as an expense in the Group Income Statement with a corresponding credit to retained earnings.

If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options or LTIPs expected to vest.

Estimates are subsequently revised if there is any indication that the number of share options or LTIPs expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior periods if share options or LTIPs ultimately exercised are different to that estimated on vesting.

Upon exercise of the share options or LTIPs the proceeds received net of attributed transaction costs are credited to share capital and where appropriate, share premium.

Employee Benefit Trust

The Directors consider that the Employee Benefit Trust (EBT) is under the de facto control of the Group as the trustees look to the Directors to determine how to dispense the assets. Therefore the assets and liabilities of the EBT have been consolidated into the Group accounts. The EBT's investment in the Group's shares is eliminated on consolidation and shown as a deduction against equity. Any assets in the EBT will cease to be recognised in the Group Statement of Financial Position when those assets vest unconditionally in identified beneficiaries.

Financial assets

The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. The Group's accounting policy for each category is as follows:

Fair value through profit or loss

This category comprises amounts due from joint ventures where the terms of the loan are inconsistent with a basic lending agreement and are therefore not solely payments of principal and interest. This balance is carried in the statement of financial position at fair value with changes in fair value recognised in the consolidated statement of comprehensive income in the finance income or expense line. Other than amounts due from joint ventures, the Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.

Amortised cost

These assets arise principally from the provision of goods and services to customers (e.g. trade receivables), but also incorporate other types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Impairment provisions for current and non- current trade receivables are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Impairment provisions for all other receivables are recognised based on a forward looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses. For those for which credit risk has increased significantly, lifetime expected credit losses are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.

The Group's financial assets measured at amortised cost comprise trade and other receivables, cash and cash equivalents and amounts due from joint ventures (other than those held at fair value through profit and loss) and associates in the consolidated statement of financial position.

Cash and cash equivalents comprise cash in hand and demand deposits, together with other short term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

Fair value through other comprehensive income

The Group has investments which are not accounted for as subsidiaries, associates or joint ventures. For those investments, the Group has made an irrevocable election to classify the investments at fair value through other comprehensive income rather than through profit or loss as the Group considers this measurement to be the most representative of the business model for these assets. They are carried at fair value with changes in fair value recognised in other comprehensive income and accumulated in the fair value through other comprehensive income reserve.

Upon disposal any balance within fair value through other comprehensive income reserve is reclassified directly to retained earnings and is not reclassified to profit or loss.

Dividends are recognised in profit or loss, unless the dividend clearly represents a recovery of part of the cost of the investment, in which case the full or partial amount of the dividend is recorded against the associated investments' carrying amount.

Leases

All leases are accounted for by recognising a right-of-use asset and a lease liability except for:

• Leases of low value assets; and

• Leases with a duration of 12 months or less.

IFRS 16 was adopted 1 October 2019 without restatement of comparative figures. For an explanation of the transitional requirements that were applied as at 1 January 2019, see Note 19. The following policies apply subsequent to the date of initial application, 1 October 2019.

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the Group's incremental borrowing rate on commencement of the lease is used. Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate.

In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the period to which they relate.

On initial recognition, the carrying value of the lease liability also includes:

• amounts expected to be payable under any residual value guarantee;

• the exercise price of any purchase option granted in favour of the Group if it is reasonable certain to assess that option;

• any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option being exercised.

Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:

• lease payments made at or before commencement of the lease;

• initial direct costs incurred; and

• the amount of any provision recognised where the Group is contractually required to dismantle, remove or restore the leased asset.

Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term.

When the Group revises its estimate of the term of any lease (because, for example, it re-assesses the probability of a lessee extension or termination option being exercised), it adjusts the carrying amount of the lease liability to reflect the payments to make over the revised term, which are discounted using a revised discount rate. The carrying value of lease liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index is revised, except the discount rate remains unchanged. In both cases an equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being amortised over the remaining (revised) lease term. If the carrying amount of the right-of-use asset is adjusted to zero, any further reduction is recognised in profit or loss.

Borrowing costs

The Group capitalises borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset where developments are considered to fall under the requirements of IAS 23 Borrowing Costs (Revised). Qualifying assets are those which are being constructed over a significant period of time, which Inland interpret to be over 12 months, and are complex in their nature. The majority of the Group's sites involve the development of large volumes of properties in a repetitive manner. The Group therefore expenses borrowing costs relating to such developments in the period to which they relate through the income statement using the effective interest method which calculates the amortised cost of a financial asset and allocates the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carryingamount of the financial asset. Currently, the Group capitalises borrowing costs only in relation to the site at Wilton Park and its joint venture site at Cheshunt as these are the only sites that are considered sufficiently complex in nature and will take over 12 months to develop.

Financial liabilities

Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the contractual provisions of the instrument.

All financial liabilities are initially recognised at fair value net of any transaction costs.

Subsequently they are recorded at amortised cost using the effective interest method, with interest-related charges recognised as an expense in finance cost in the Group Income Statement. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are charged to the Group Income Statement on an accruals basis using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

A financial liability is derecognised only when the obligation is extinguished, that is, when the obligation is discharged, cancelled or expires.

Share capital and other equity reserves

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Share premium represents amounts subscribed for share capital in excess of nominal value less directly attributable issue costs.

Employee benefit trust represents the purchase of the Company's own shares and are deducted from total equity until they are issued to employees under the Long Term Incentive Plan.

Special Reserve represents the capitalisation of the Parent Company's reserves to allow for the possibility of distributions in the future. A copy of this resolution is available from Companies House.

Treasury Reserve represents the purchase of the Company's own shares and are deducted from total equity until they are issued to employees under the share option plan.

Retained earnings represents cumulative net gains and losses recognised in the Group income statement together with other items such as dividends and share- based payments.

Guarantees

All guarantees are deemed to be insurance contracts. A financial guarantee is recognised where a contract requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due.

Dividends

Dividend distributions payable to equity shareholders are included in other short-term financial liabilities when the dividends are approved in a general meeting prior to the year-end date. Interim dividends are recognised when paid.

The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates and judgements. It also requires management to exercise judgement in the process of applying the Group's accounting policies. The Group's significant accounting policies are stated in note 3. Not all of these accounting policies require management to make difficult, subjective or complex judgements or estimates. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results may differ from those estimates. The following is intended to provide an understanding of the policies that management consider critical because of the level of complexity, judgement or estimation involved in their application and their impact on the financial statements.

Key sources of estimation uncertainty

Cost of and net realisable value of inventories

In applying the Group's accounting policy for the valuation of inventories the Directors are required to assess the expected selling price and costs to sell each of the plots or units that constitute the Group's land bank and work in progress. The uncertainty relates to both land and work in progress. Cost which requires estimation includes the cost of acquisition of sites, the cost of infrastructure and construction works, allocation of site wide costs and legal and professional fees incurred during development prior to sale. Estimation of the selling price is subject to significant inherent uncertainties, in particular the prediction of future trends in the market value of land. The critical judgement in respect of receipt of planning consent (see below) further increases the level of estimation uncertainty in this area.

Fair value of investment properties

The fair value of materially completed investment property is determined by independent valuation experts using the open market value of existing use method, subject to current leases and restrictions, as this has been assessed currently as the best use of these assets. Investment properties awaiting construction are valued by the Directors using an appraisal system; critical accounting estimates relate to the forecasts prepared in order to assess the carrying value.

The Group's investment properties, as presented within the results, and the majority of the Group's trading properties for the purpose of EPRA valuations, are valued on a recurring periodic basis by one of a panel of independent valuers an independent firm of chartered surveyors, and to a lesser extent by the Directors, on the basis of fair value.

Where property assets are divided between investment and trading properties, the Directors have allocated the valuation with reference to the nature of the properties in each classification. The valuation at each period end is carried out in accordance with guidance issued by the Royal Institution of Chartered Surveyors. Fair value represents the estimated amount that should be received for selling a property in an orderly transaction between market participants at the valuation date.

Due to the outbreak of COVID-19, the following wording was included in valuation reports at 31 March 2020 in relation to the assets subjected to their valuation:

'The outbreak of the Novel Coronavirus (COVID-19), declared by the World Health Organisation as a 'Global Pandemic' on 11 March 2020, has impacted global financial markets. Travel restrictions have been implemented by many countries.

Market activity is being impacted in many sectors. As at the Valuation Date, we consider that we can attach less weight to previous market evidence for comparison purposes, to inform opinions of value. Indeed, the current response to COVID-19 means that we are faced with an unprecedented set of circumstances on which to base a judgement.

Our valuations are therefore reported as being subject to 'material valuation uncertainty' as set out in VPS 3 and VPGA 10 of the RICS Valuation - Global Standards. Consequently, less certainty - and a higher degree of caution - should be attached to our Valuation than would normally be the case. Given the unknown future impact that COVID-19 might have on the real estate market, we recommend that you keep the Valuation of these Properties under frequent review.

For the avoidance of doubt, the inclusion of the 'material valuation uncertainty' declaration above does not mean that the Valuation cannot be relied upon. Rather, the declaration has been included to ensure transparency of the fact that - in the current extraordinary circumstances - less certainty can be attached to the Valuation than would otherwise be the case. The material uncertainty clause is to serve as a precaution and does not invalidate the Valuation'.

Director valuations are deemed to have the same level of uncertainty at 31 March 2020. See note 7 for information about valuation methodology and assumptions made.

Deferred consideration on transfer of beneficial interest in Cheshunt Lakeside Developments Limited

The Group discounts deferred consideration payable or receivable using the discounted cash flow method; the Group considers the expected timing of payments and receipts and uses the third party cost of debt capital as the most appropriate discount rate and these are considered to be significant estimates.

Management do not envisage a timing opportunity where the receipt of the receivable could be brought forward.

Significant judgements

Timing of likely repayment - amounts due from joint ventures and associate

Certain amounts due from joint ventures are contractually repayable on demand and the amounts due from the associate are repayable over the term of the underlying development. At each balance sheet date the Directors review the forecasts of the underlying developments and make a judgement as to the likely timing of the recoverability of each loan and whether they will be recovered within the normal operating cycle of the business. Amounts are then disclosed as either due in less than one year or greater than one year accordingly.

Likelihood of achieving planning - inventories

The Group values inventories at the lower of cost and net realisable value. The net realisable value is based on the judgement of the probability that planning consent will be granted for each site. The Directors believe that, based on the Group's experience, planning consent will be given.

If planning consent was not achieved then a provision may be required against inventories. The cost value is based on actual costs incurred at the date of signing the financial statements taking account of an estimation of costs to complete. The judgement of costs to complete is based on the Directors' experience and if actual plus projected costs are higher than net realisable value then a provision would be required against inventories.

Capitalisation of borrowing costs

The Group capitalises borrowing costs where there is a qualifying asset. The Directors must assess each site held within inventories each year in order to judge whether or not the site is a qualifying asset in line with the requirements of IAS 23 Borrowing Costs. In the opinion of the Directors, sites are judged to be qualifying assets if due to the long term, complex nature of these developments which will take several years before parts of it are sold or developed. This has resulted in borrowing costs related to such sites to be capitalised in the current and prior periods. During the period, the Group capitalised £0.5m (fifteen-month period ended 30 September 2019: £1.3m) of borrowing costs. For non-qualifying sites the Group expenses borrowing costs due to the quantity and repetitive nature of the process adopted. In many cases, such developments may take longer than 12 months. The Directors are therefore required to exercise judgement as to whether or not a site represents a qualifying asset.

Management fee income

The Group recognises revenue in respect of management services equal to the amounts entitled, invoiced or accrued. Each management fee formula in the contract reflects progress at any given time to the satisfaction of the contracts performance obligations which involves judgement.

There were a number of material management fee contracts that were either ongoing or commenced in the period. For each management contract there are a number of milestones and obligations.

The Directors had to make significant judgements for each contract based on:

• whether each milestone constituted a distinct performance obligation;

• whether the obligations have been satisfied; and

• whether the revenue is recognised at a point in time or over time.

The significant judgements made were in relation to the following contracts:

• Bucknalls

For the contract at Farrier's Wood, the Directors concluded the milestones in the scheme were not distinct from one another in the context of the contract. It was therefore concluded that there was a single performance obligation, to manage the scheme on behalf of their joint venture. Management considered that there was a significant level of integration between the various stages and the overall objective of the contract was to sell the development for maximum value. They further concluded that the income in relation to this contract should be recognised over time, given that the management of the project is over an agreed period, and the customer is receiving and consuming the benefits to their asset over the length of the contract.

• Hillingdon Gardens

For the contract at Hillingdon Gardens, it was determined that there were a number of distinct performance obligations which were satisfied in the fifteen-month period to 30 September 2019. In the six-month period to 31 March 2020 a further performance obligation has been satisfied. It was concluded that these were distinct on the basis the customer benefitted from each of the milestones and that these milestones were considered separable in the context of the contract. The performance obligations recognised were considered satisfied in the period as control of the related service was transferred to the customer before the period end. For the remaining performance obligations still to be satisfied, it was determined by the Directors that they will be recognised in future periods at a point in time, given that they fail to meet the criteria to be recognised over time.

• Walthamstow

For the contract at Walthamstow, it was determined that there were a number of distinct performance obligations of which one was satisfied in the period to 31 March 2020. It was concluded that these were distinct on the basis the customers benefited from each of the milestones and that these milestones were considered separable in the context of the contract. The performance obligation recognised was considered satisfied in the period as control of the related service was transferred to the customer before the period end. For the remaining performance obligations still to be satisfied, it was determined by the Directors that they will be recognised in future periods at a point in time, given that they fail to meet the criteria to be recognised over time.

Assets held for sale

At 30 September 2019, the Directors' intention was to sell some investment properties over 12 months to 30 September 2020. These assets were reclassified to assets held for sale at the expected disposal value after allowing for costs of disposal.

In the six-month period to 31 March 2020, a further commercial property has been reclassified to assets held for sale at the expected disposal value after allowing for costs of disposal.

The Directors have made a judgement that the properties will sell within 12 months.

Overages

Estimates are involved when determining how much revenue to recognise in relation to variable consideration where Inland Homes is entitled to an overage in relation to future sales at a site sold by Inland Homes to a customer. When determining how much of the variable revenue to recognise at the point of sale, the Directors estimate the amount that they would expect to receive based on market evidence for current house prices. They then consider the risk of a significant reversal of this revenue in future periods and constrain it accordingly.

Land and house building sales margins

There are significant estimates involved in determining the appropriate profit margin to recognise on land and residential sales. Assumptions are required to be made as to future costs to complete and future sales prices to be achieved on the remaining units. The Directors use detailed project appraisals for each development to determine the appropriate profit margin to recognise which forecasts the costs to complete on such developments and the anticipated sales prices, which has been determined based on the type, specification and location of the property. The financial outturn in both the current period and prior period relating to land and house building sales margins is disclosed in note 5.

Contract income revenue and profit recognition

The revenue and profit recognition on contract income involve significant judgement and estimates with regards to assessing the stage of completion of the development and the anticipated margin. Assumptions are required to be made as to the future costs to complete to determine the appropriate margin and this is determined through detailed project appraisals. The stage of the development is determined through monthly valuation surveys conducted by Inland Homes and the customer who then agree the value of the work completed. The financial outturn in both the current period and prior period relating to contract income and revenue and profit recognition is disclosed in note 5.

5. Segmental information

In accordance with IFRS 8 'Operating Segments', information is disclosed to enable users of financial statements to evaluate the nature and financial effects of the business activities in which the Group engages and provide the appropriate analysis of the disaggregation of revenues by IFRS 15 'Revenue from Contracts with Customers'.

In identifying its operating segments, management differentiates between land sales, housebuilding, contract income, rental income, investment properties, management fees and other income. These segments are based on the information reported to the Chief Executive Officer and represent the activities which generate significant revenues, profits and use of resources within the Group. These operating segments are monitored and strategic decisions are made on the basis of segment operating results.

Segmental analysis by activity

Six-month period ended 31 March 2020 (unaudited)	Land sales £m	Management fees £m	Contract income £m	House building £m	Rental income £m	Investment properties £m	Central support £m	Total £m
Revenue from contracts with customers	-	9.4	35.3	13.8	-	-	-	58.5
Other revenue	-	-	-	-	0.5	0.6	-	1.1
Cost of sales	(2.0)	(2.6)	(37.0)	(12.9)	-	(0.2)	-	(54.7)
Gross profit/(loss)	(2.0)	6.8	(1.7)	0.9	0.5	0.4	-	4.9
Administrative expenses	-	-	-	-	-	-	(7.6)	(7.6)
Share of profit of joint ventures	-	-	-	1.8	-	-	-	1.8
Share of profit of associate	-	-	-	0.1	-	-	-	0.1
Loss on sale of controlling interest in subsidiary	-	-	-	(2.0)	-	-	-	(2.0)
Revaluation of investment property	-	-	-	-	-	(0.3)		(0.3)
Operating (loss)/profit	(2.0)	6.8	(1.7)	0.8	0.5	0.1	(7.6)	(3.1)
Net finance cost	(0.4)	-	-	(2.0)	-	(1.3)	(0.4)	(4.1)
(Loss)/profit before tax	(2.4)	6.8	(1.7)	(1.2)	0.5	(1.2)	(8.0)	(7.2)
Tax (charge)/credit	0.2	(0.5)	0.1	0.1	-	0.1	0.7	0.7
Total (loss)/profit for the period	(2.2)	6.3	(1.6)	(1.1)	0.5	(1.1)	(7.3)	(6.5)

Six-month period ended 31 December 2018 (unaudited)	Land sales £m	Management fees £m	Contract income £m	House building £m	Rental income £m	Investment properties £m	Central support £m	Total £m
Revenue from contracts with customers	4.8	10.1	15.0	20.2	-	-	-	50.1
Other revenue	-	-	-	-	0.2	0.7	-	0.9
Cost of sales	(4.3)	(0.9)	(13.3)	(17.7)	(0.1)	(0.1)	-	(36.4)
Gross profit	0.5	9.2	1.7	2.5	0.1	0.6	-	14.6
Administrative expenses	-	-	-	-	-	-	(6.2)	(6.2)
Share of profit of joint ventures	-	-	-	0.3	-	-	-	0.3
Share of loss of associate	-	-	-	(0.1)	-	-	-	(0.1)
Revaluation of investment property	-	-	-	-	-	0.1	-	0.1
Revaluation of investments	-	-	-	-	-	-	(0.3)	(0.3)
Operating profit/(loss)	0.5	9.2	1.7	2.7	0.1	0.7	(6.5)	8.4
Net finance cost	(1.2)	-	-	(1.0)	(0.1)	(0.6)	-	(2.9)
Profit/(loss) before tax	(0.7)	9.2	1.7	1.7	-	0.1	(6.5)	5.5
Tax charge/(credit)	(0.2)	(0.5)	(0.3)	(0.1)	-	(0.1)	0.3	(0.9)
Total profit/(loss) for the period	(0.9)	8.7	1.4	1.6	-	-	(6.2)	4.6

Fifteen months period ended 30 September 2019 (audited)	Land sales £m	Management fees £m	Contract income £m	House building £m	Rental income £m	Investment properties £m	Central support £m	Total £m
Revenue from contracts with customers	29.2	18.6	62.6	34.5	-	-	-	144.9
Other revenue	-	-	-	-	1.5	1.5	-	3.0
Cost of sales	(24.3)	(2.5)	(57.1)	(30.6)	(0.9)	-	-	(115.4)
Gross profit	4.9	16.1	5.5	3.9	0.6	1.5	-	32.5
Administrative expenses	-	-	-	-	-	-	(15.7)	(15.7)
Gain on sale of joint venture interest	-	-	-	12.6	-	-	-	12.6
Share of profit of joint ventures	-	-	-	2.0	-	-	-	2.0
Share of profit of associate	-	-	-	0.2	-	-	-	0.2
Revaluation investment property	-	-	-	-	-	1.1	-	1.1
Operating profit/(loss)	4.9	16.1	5.5	18.7	0.6	2.6	(15.7)	32.7
Net finance cost	(1.5)	0.7	-	(4.8)	-	(1.8)	(0.3)	(7.7)
Profit/(loss) before tax	3.4	16.8	5.5	13.9	0.6	0.8	(16.0)	25.0
Tax charge/(credit)	(0.1)	(0.3)	(0.1)	(0.2)	-	-	0.3	(0.4)
Total profit/(loss) for the period	3.3	16.5	5.4	13.7	0.6	0.8	(15.7)	24.6
Other comprehensive expense	-	-	-	-	-	-	(0.4)	(0.4)
Total profit/(loss) and comprehensive income/(expense) for the period	3.3	16.5	5.4	13.7	0.6	0.8	(16.1)	24.2

6. Earnings and net asset value per share

Basic and diluted EPS

	Six-month period ended		Fifteen months ended
	31 March 2020 (unaudited) '000	31 December 2018 (unaudited) '000	30 September 2019 (unaudited) '000
Shares in issue	207,571	207,366	207,366
Less shares held in:
- Employee Benefit Trust1	(1,627)	(1,627)	(1,627)
- Treasury	-	(176)	-
Number of shares for use in basic measures	205,944	205,563	205,739
Adjusting for dilutive effect of:
- share options	4,225	1,355	2,018
- deferred bonus shares	1,694	1,823	1,527
- growth shares2	2,285	2,285	2,285
Number of shares for use in diluted measures	214,148	211,026	211,569

1 The Group's Employee Benefit Trust (EBT) purchased 650,000 shares on 29 October 2014, 377,500 shares on 20 December 2015 and a further 600,000 shares on 16 December 2016 in Inland Homes plc under the terms of the Long Term Incentive Plan. These total 1,627,500 shares and have been deducted from the weighted average number of ordinary shares in issue and also from the shares in issue at the period end.

2 Amounts included for the growth shares are those where the performance conditions have been satisfied. On 6 April 2018, Paul Brett transferred 79 vested LTIP shares to the Company in exchange for the issue of 896,689 shares in the Company and on 19 July 2018, Stephen Wicks transferred 248 vested LTIP shares to the Company in exchange for the issue of 2,814,924 shares in the Company.

	Six-month period ended		Fifteen months ended
	31 March 2020 (unaudited)	31 December 2018 (unaudited)	30 September 2019 (audited)
(Loss)/profit attributable to equity shareholders (stated in £m)	(6.6)	4.6	24.2
Basic (loss)/earnings per share (stated in pence)	(3.20)	2.25	11.79
Diluted earnings per share (stated in pence)	(3.08)	2.18	11.47
Net Asset Value and net asset value per share
Number of shares for use in basic measures ('000's)	205,944	205,563	205,739
Number of shares for use in diluted measures ('000's)	214,148	211,026	211,569
	31 March 2020 (unaudited) £m	31 December 2018 (unaudited) £m	30 September 2019 (unaudited) £m
Net assets attributable to equity shareholders	156.0	147.4	162.2
Adjustment for:
Revaluation of projects	67.1	62.2	69.7
Deferred tax on investment property revaluation	2.0	3.3	2.0
EPRA net asset value	225.1	212.9	233.9
Adjustment for:
Deferred tax on investment property revaluation	(2.2)	(3.3)	(2.0)
Deferred tax on project revaluation	(11.4)	(10.6)	(11.8)
EPRA triple net asset value	211.5	199.0	220.1
Value per share - Undiluted	31 March 2020 (unaudited) pence	31 December 2018 (unaudited) pence	30 September 2019 (unaudited) pence
Net assets per share attributable to equity shareholders	75.75	71.71	78.84
EPRA net asset value per share	109.30	103.57	113.69
EPRA triple net asset value per share	102.70	101.96	106.98
Value per share - diluted
Net assets per share attributable to equity shareholders	72.85	69.85	76.67
EPRA net asset value per share	105.11	100.89	110.55
EPRA triple net asset value per share	98.76	94.30	104.03

7. Investment properties

	Commercial properties £m	Residential properties £m	Development land £m	Assets under construction £m	Total £m
As at 30 September 2019 (audited)	2.6	37.0	8.5	1.2	49.3
Additions	-	-	-	0.2	0.2
Disposals	(1.4)	-	-	-	(1.4)
Fair value adjustment	(0.3)	-	-	-	(0.3)
Transfer of completed assets	-	1.4	-	(1.4)	-
Transfer to assets held for sale	(0.9)	-	-	-	(0.9)
At 31 March 2020 (unaudited)	-	38.4	8.5	-	46.9

The investment property was valued by the Directors using the following valuation techniques:

Residential properties

The Group's residential investment properties were valued by the Directors on the basis of 'open market value'. In arriving at their view of open market value the Directors had regard to the following; the accommodation offered, the square footage and the condition of each property. They then considered the above in light of the local market and prices achieved in recent transactions in consultation with a local property agent.

Development land

The Group's development property is carried at fair value which has been established by the Directors using an internal appraisal model based on the 'residual method'. The inputs for this model are the market value of units to be constructed in accordance with the planning permission, the costs of any housebuilding, infrastructure, local authority fees and professional fees. The market value of the units has been assumed to be at a similar level to the prices obtained by the Group on earlier phases of the same development for similar property types. Housebuilding and infrastructure costs have been forecast using costs incurred by the Group on this or other similar developments with an allowance for cost increases. Local authority fees were agreed at the time of the signing of the planning permission and are therefore known costs. Professional fees are input using costs incurred on similar projects and finance holding costs are the Group's cost of debt capital. Using a profit margin of 20% this generated a land value for the remaining site of £8.5m (30 September 2019: £8.5m). The Directors are of the opinion that developing the site reflects the highest and best use of this asset.

Commercial properties

The Group's commercial properties were valued by the Directors on the basis of 'open market value'. In arriving at their view of open market value the Directors had regard to the following; the accommodation offered, the square footage and the condition of each property. They then considered the above in light of the local market and yields achieved in recent transaction in consultation with a local property agent.

During the period to 31 March 2020, one property was disposed of and another transferred to assets held for sale.

Impact of COVID-19 on valuations

The outbreak of the Novel Coronavirus (COVID-19), declared by the World Health Organisation as a 'Global Pandemic' on 11 March 2020, has impacted global financial markets. Travel restrictions have been implemented by many countries and market activity is being impacted in many sectors.

As at 31 March 2020 and at the date of this interim report, the Directors consider that they can attach less weight to previous market evidence for comparison purposes, to inform opinions of value. Indeed, the current response to COVID-19 means that the Group is faced with an unprecedented set of circumstances on which to base a judgement.

The Directors' view on valuation is therefore reported on the basis of 'material valuation uncertainty' as per VPS 3 and VPGA 10 of the RICS Red Book Global.

Consequently, less certainty - and a higher degree of caution - should be attached to the valuation than would normally be the case. Given the unknown future impact that COVID-19 might have on the real estate market, the Directors recommend and are keeping the valuation of investment property under frequent review.

8. Property plant and equipment

Group	Modular housing £m	Office equipment £m	Fixtures and fittings £m	Motor vehicles £m	Total £m
Cost
At 30 September 2019 (audited)	5.5	1.3	0.9	0.3	8.0
Additions	-	0.2	-	-	0.2
Disposals	-	(0.3)	(0.3)	(0.2)	(0.8)
At 31 March 2020 (unaudited)	5.5	1.2	0.6	0.1	7.4
Depreciation
At 30 September 2019 (audited)	0.3	0.6	0.5	0.3	1.7
Depreciation charge	0.2	0.1	0.1	-	0.4
Disposals	-	(0.3)	(0.3)	(0.2)	(0.8)
At 31 March 2020 (unaudited)	0.5	0.4	0.3	0.1	1.3
Net book value
At 31 March 2020 (unaudited)	5.0	0.8	0.3	-	6.1
At 30 September 2019 (audited)	5.2	0.7	0.4	-	6.3

9. Right-of-use asset

On adoption of IFRS16 on 1 October 2020, the Group has recognised a right-of use asset with a net book value as follows:

Cost and net book value	Leasehold property £m
As at 30 September 2019 (audited)	-
On adoption of IFRS16	1.4
At 31 March 2020 (unaudited)	1.4

As a lessee, the Group previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of ownership.

Under IFRS 16, the Group recognises right-of-use assets and lease liabilities for applicable leases. However, the Group has elected not to recognise right-of-use assets and lease liabilities for some leases of low value assets based on the value of the underlying asset when new or for short-term leases with a lease term of twelve months or less.

The right-of-use asset relates to the Group's occupation at Burnham Yard, Beaconsfield as a Head Office facility.

10. Intangible assets

Group	Development costs £m
Cost
At 30 September 2019 (audited) at 31 March 2020 (unaudited)	0.3

Intangible assets relate to development costs of the Hugg Homes brand capitalised under IAS 38 'Intangible Assets'.

11. Investment in quoted companies

Group	Quoted investments £m
Cost
At 30 September 2019 (audited)	1.1
Revaluation	(0.1)
At 31 March 2020 (unaudited)	1.0

At the balance sheet date, the carrying value of investments was £1.0m (30 September 2019 (audited): £1.1m).

12. Investments in Group undertakings

As 31 March 2020, the Group directly or indirectly held equity of the following:

Company name	Principal activity	Holding and voting rights1
Subsidiary undertakings
Basildon United Football, Sports & Leisure Limited	Real estate development	100%
Basildon Developments Limited	Real estate development	100%
Brooklands Helix Developments Limited	Real estate development	100%
Bucks Developments Limited	Real estate development	100%
Chapel Riverside Developments Limited	Real estate development	100%
Drayton Developments Limited	Real estate development	100%
Drayton Garden Village Limited	Real estate development	100%
Exeter Road (Bournemouth) Limited	Real estate development	100%
High Wycombe Developments No.2 Limited	Real estate development	100%
Hugg Homes Limited	Letting or operating of real estate	100%
Hugg Housing Limited	Letting or operating of real estate	100%
Inland Bermondsey Limited	Real estate development	100%
Inland Commercial Limited	Letting or operating of real estate	100%
Inland Commercial Property Limited	Real estate development	100%
Inland Corporate Limited	Real estate development	100%
Inland Developments Limited	Real estate development	100%
Inland Finance Limited	Real estate development	100%
Inland Helix Limited	Real estate development	100%
Inland Homes (Essex) Limited	Real estate development	100%
Inland Homes 2013 Limited	Holding company	100%
Inland Homes Developments Limited	Real estate development	100%
Inland Homes Land Developments Limited	Real estate development	100%
Inland Housing Limited	Real estate development	100%
Inland Limited	Real estate development	100%
Inland Partnerships Limited	Construction of domestic buildings	100%
Inland Property Finance Limited	Provision of finance	100%
Inland Property Limited	Real estate development	100%
Inland (STB) Limited	Provision of finance	100%
Inland Strategic Land Limited	Real estate development	100%
Inland ZDP plc	Provision of finance	100%
Leighton Developments Limited	Real estate development	100%
Merrielands Crescent Dagenham LLP	Real estate development	100%
Poole Investments Limited	Real estate development	100%
Rosewood Housing Limited	Real estate development	100%
Wessex Hotel Developments Limited	Real estate development	100%
Wilton Park Developments Limited	Real estate development	100%
Interests in joint ventures
10 Ant South Limited	Real estate development	50%
Bucknalls Developments Limited	Real estate development	50%
Centre Square Lifestyle Limited	Letting or operating of real estate	50%
Cheshunt Lakeside Developments Limited	Real estate development	50%
Delamare Estate (Cheshunt) Limited	Real estate development	50%
Europa Park LLP	Real estate development	50%
Gardiners Park LLP	Real estate development	50%
High Wycombe Developments Limited	Real estate development	50%
Interest in associate
Troy Homes Limited	Real estate development	25%

¹All holdings are of ordinary shares.

The Group investment in joint ventures and associate changed in this period as follows:

	Investment in joint ventures						Investment in associate
	Bucknalls Developments £m	Cheshunt Lakeside Developments £m	High Wycombe Developments £m	Europa Park £m	Gardiners Park £m	Subtotal £m	Troy Homes £m	Total £m
At 30 September 2019 (audited)	0.7	7.3	-	-	-	8.0	1.3	9.3
Share of profit/(loss) after tax	0.9	(0.1)	-	-	-	0.8	-	0.8
Loans to/(receipts from) joint ventures	-	(0.2)	-	-	-	(0.2)	-	(0.2)
At 31 March 2020 (unaudited)	1.6	7.0	-	-	-	8.6	1.3	9.9

Amounts due from/(to) joint ventures and associates

	Amounts due from/(to) joint ventures						Amounts due from associate
	Bucknalls Developments £m	Cheshunt Lakeside Developments £m	High Wycombe Developments £m	Europa Park £m	Gardiners Park £m	Subtotal £m	Troy Homes £m	Total £m
At 30 September 2019 (audited)	2.0	32.8	-	-	1.0	35.8	3.3	39.1
Share of profit/(loss) after tax	-	-	(0.1)	0.7	0.4	1.0	0.1	1.1
Loans to/(receipts) from joint ventures	(6.1)	(3.2)	11.4	(0.7)	(0.7)	0.7	-	0.7
At 31 March 2020 (unaudited)	(4.1)	29.6	11.3	-	0.7	37.5	3.4	40.9

Interests in joint ventures

Bucknalls Developments Ltd

In December 2015, the Group entered into a joint venture with two individuals to purchase land, obtain planning permission and develop the homes in Garston, Hertfordshire. During the year ended 30 June 2017 outline planning consent was obtained for 100 residential units. Under the terms of the joint venture, the Group is obliged to fund 50% of the costs of the site and is entitled to receive a management fee and 50% of the returns.

Cheshunt Lakeside Developments Ltd

The Group entered into a joint venture whose purpose was to obtain planning permission and ultimately sell the land. The site has the potential for 1,500 residential plots. Under the terms of the joint venture agreement, the Group has an obligation to fund 50% of the costs of the site and is entitled to receive 50% of the net returns and a promote return by way of a performance payment.

Europa Park LLP

In December 2017, the Group entered into a joint venture which acquired a site in Ipswich, Suffolk from the Group which has planning permission for 94 residential plots. Under the terms of the joint venture agreement, the Group has an obligation to fund 50% of the costs of the site and is entitled to receive 50% of the net returns.

Gardiners Park LLP

In November 2016, the Group entered a joint venture with Constable Homes Limited to develop a site in Basildon, Essex with 30 private and 13 Housing Association units. Under the terms of the joint venture agreement, the Group has an obligation to fund 50% of the costs of the site and is entitled to receive a priority financial returns.

High Wycombe Developments Limited

In December 2019, the Group entered into a joint venture with Qbay Limited to develop a site of private units in High Wycombe, Buckinghamshire. Under the terms of the joint venture, the Group is obliged to fund a share of costs of the site and is entitled to receive 50% of the returns and a promote return by way of a performance payment.

12. Investments in Group undertakings (continued)

Troy Homes Limited

In October 2015 the Group acquired 25% of Troy Homes Limited, a premium housebuilder, and is entitled to 25% of the
net returns.

Disposal of subsidiary

During the six-month period to 31 March 2020, the Group disposed of one subsidiary company; Inland (Southern) Limited. There was no gain or loss on the sale of this Company.

Acquisition of subsidiaries

During the six-month period to 31 March 2020, the Group did not acquire any other subsidiary.

Disposal of controlling interest in subsidiary

On 27 December 2019, the Group disposed of a 50% interest in High Wycombe Developments Limited to Qbay Limited.

13. Inventories

	As at 31 March 2020 (unaudited) £m	As at 30 September 2019 (audited) £m
At 1 October 2019 / 1 July 2018	192.4	136.2
Additions	67.7	154.6
Disposal on sale of controlling interest in subsidiary undertaking	(39.0)	-
Capitalisation of finance costs	0.5	1.3
Capitalisation of employee costs	3.4	8.1
Charged to income statement	(46.8)	(111.9)
Transferred from investment property	-	4.3
Impairment	(2.0)	(0.2)
At 31 March 2020 (unaudited) / At 30 September 2019 (audited)	176.2	192.4

14. Trade and other receivables

	As at 31 March 2020 (unaudited) £m	As at 30 September 2019 (audited) £m
Trade receivables from contract revenue with customers	13.1	14.7
Prepayments and accrued income	20.0	18.9
Other receivables	13.2	11.8
Trade and other receivables due in less than one year	46.3	45.4
Other receivables due in more than one year	21.5	21.8
Trade and other receivables	67.8	67.2

Materially, all of the trade receivables are receivables from contract revenue with customers.

The carrying value of trade and other receivables is considered a reasonable approximation of fair value.

Included within other receivables due in greater than one year is £19.9m (30 September 2019 (audited): £19.9m) in relation to the disposal of the Group's beneficial interest of 50% in Cheshunt Lakeside Developments Limited.

The Group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9 for trade receivables. The Group applies the general approach to providing for expected credit losses prescribed by IFRS 9 for other receivables. Both the expected credit loss provision and the incurred loss provision in the current and prior period are immaterial. Refer to note 4 for further details.

Other receivables	31 March 2020 (unaudited) £m	30 September 2019 (audited) £m
Due in less than one year
Sale of subsidiary	-	2.9
Sale of interest in joint venture	-	2.1
Loan facility	7.1	4.2
Other	6.1	2.6
	13.2	11.8
Due in more than one year
Sale of subsidiary	19.9	19.9
Other	1.6	1.9
	21.5	21.8

Within other receivables due in less than one year is £3.2m (30 September 2019 (audited): £nil) relating to retentions receivable from construction contracting clients and within trade receivables is £5.1m (30 September 2019 (audited): £5.0m) relating to income accrued on a construction contract.

Within other receivables due in more than one year is £Nil (30 September 2019 (audited): £1.7m) relating to retentions receivable from construction contracting clients.

15. Assets held for sale

The assets held for sale relate to surplus existing investment properties at Wilton Park which will not be developed and one commercial retail unit which is being progressed for sale. The assets are held based on a Directors' valuation of £5.6m which comprises the Wilton Park properties of £4.7m and the commercial retail unit at £0.9m.

A loss of £0.3m was recognised on the transfer of the commercial retail unit as a result of market conditions and selling costs.

Management expect disposals to occur within twelve months of the balance sheet date.

16. Borrowings

	< 1 year £m	1 to 2 years £m	2 to 3 years £m	3 to 4 years £m	4 to 5 years £m	> 5 years £m	Total £m
At 31 March 2020 (unaudited)
Secured bank loans	32.3	28.0	39.0	-	-	-	99.3
Other secured loans	28.2	-	-	11.0	-	-	39.2
Borrowings	60.5	28.0	39.0	11.0	-	-	138.5
ZDP shares	-	-	-	-	29.4	-	29.4
Gross debt	60.5	28.0	39.0	11.0	29.4	-	167.9
Cash and cash equivalents							(17.8)
Net debt							150.1
	< 1 year £m	1 to 2 years £m	2 to 3 years £m	3 to 4 years £m	4 to 5 years £m	> 5 years £m	Total £m
At 30 September 2019 (audited)
Secured bank loans	26.8	51.3	1.2	29.6	-	-	108.9
Other secured loans	21.2	-	-	-	7.2	-	28.4
Borrowings	48.0	51.3	1.2	29.6	7.2	-	137.3
ZDP shares	-	-	-	-	25.9	-	25.9
Gross debt	48.0	51.3	1.2	29.6	33.1	-	163.2
Cash and cash equivalents							(10.9)
Net debt							152.3
Undrawn committed bank facilities
At 31 March 2020 (unaudited)	-	20.0	6.5	1.2	-	-	27.7
At 30 September 2019 (audited)	-	0.4	0.1	14.8	5.3	-	20.6

Zero Dividend Preference (ZDP) shares

The ZDP shares carry no entitlement to any dividends or other distributions or to participate in the revenue or any other profits of the Company. The ZDP shareholders have no right to receive notice of, or to attend or vote at, any general meeting of the Company except in those circumstances set out in the Inland ZDP plc's Articles of Association, which would be likely to affect their rights or general interests. At 31 March 2020, there were 18,101,857 ZDP shares in issue (30 September 2019: 16,430,790). During the period, the Group issued a further 1,671,067 ZDP shares raising a gross sum of £2.7m.

17. Trade and other payables

	As at 31 March 2020 (unaudited) £m	As at 30 September 2019 (audited) £m
Trade payables	26.6	19.5
Other creditors	0.7	14.8
Sales and social security taxes	0.5	0.5
Provision	0.2	0.2
Accruals	12.8	12.7
	40.8	47.7

The carrying value of trade and other payables is considered to be a reasonable approximation of fair value.

18. Other financial liabilities

Other financial liabilities of £4.9m (30 September 2019 (audited) : £4.1m) relate to purchase consideration on inventories falling due within one year.

19. Leases

	31 March 2020 £m
At 1 October 2019	-
On adoption of IFRS16	1.4
Additions	0.3
Lease payments	-
At 31 March 2020 (unaudited)	1.7

At 31 March 2020 (unaudited) £m	£m	1-2 years £m	2-3 years £m	3-4 years £m	4-5 years £m	>5 years £m	Total £m
Lease liabilities secured against property plant and equipment	0.2	0.1	-	-	-	-	0.3
Lease liabilities secured against right-of-use asset	0.3	0.3	0.3	0.3	0.2	-	1.4
Total	0.5	0.4	0.3	0.3	0.2	-	1.7

20. Deferred tax

	Revaluation gain £m	Capital losses recognised on revaluation gain £m	Share based payment £m	Total
At 30 September 2019 (audited) and 31 March 2020 (unaudited)	6.3	(4.3)	(0.8)	1.2

Deferred income tax assets are recognised for tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable.

21. Share capital

The movement in the number of shares in issue is shown in the table below.

Share capital	10p ordinary shares		10p deferred shares
	Number	£m	Number	£m
At 30 September 2019 (audited)	207,366,045	20.7	9,980	-
Issued on exercise of share options	205,000	-	-	-
At 31 March 2020 (unaudited)	207,571,045	20.7	9,980	-
Employee Benefit Trust
As at 30 September 2019 (audited) and 31 March 2020 (unaudited)	1,627,500	(1.1)
Total voting shares1
At 31 March 2020 (unaudited)	205,944,055
At 30 September 2019 (audited)	205,738,545

1. Ordinary shares in issue less shares held in the Employee Benefit Trust and the Treasury reserve.

Ordinary shares

Except for the shares held in the Employee Benefit Trust and the Treasury reserve, each share has the right to one vote and is entitled to participate in any distribution made by the Company, including the right to receive a dividend. Ordinary shares issued after the balance sheet date but prior to the date of this report are disclosed in note 23.

Deferred shares

Deferred shares shall not confer the right to be paid a dividend or to receive notice of or attend or vote at a general meeting. On a winding- up, after the distribution of the first £10,000,000 of the assets of the Company, the holders of the deferred shares (if any) shall be entitled to receive an amount equal to the nominal value of such deferred shares pro rata to their respective holdings.

22. Reserves

Share premium

Amount subscribed for share capital in excess of nominal value less directly attributable issue costs.

Employee benefit trust

This represents the purchase of the Company's own shares and are deducted from total equity until they are issued to employees under the Long Term Incentive Plan. At 31 March 2020, this reserve holds 1,627,500 shares (30 September 2019 (audited): 1,627,500 shares).

Special reserve

A resolution was passed at the AGM in November 2011 for the capitalisation of the Parent Company's reserves to allow for the possibility of distributions in the future and this was put in the Special Reserve, which is a distributable reserve. A copy of this resolution is available from Companies House.

Retained earnings

Cumulative net gains and losses recognised in the Group income statement together with other items such as dividends and share-based payments.

23.Post balance sheet events

On 14 April 2020, the Group announced that it has entered into a development agreement with Homes England, a Government body charged with accelerating housing delivery in the UK, for the development of over 600 homes, employment and community facilities currently owned by Homes England as well as a site for a new school in Basildon.

On 30 April 2020, the Group announced the successful Placing and Subscription for New Ordinary Shares to raise a total of approximately £9.9 million (before expenses) by the issue of 20,750,000 ordinary shares at an Issue Price of 47.5 pence per share.

On 16 June 2020, the Group announced the unconditional sale of 94 plots at its flagship development site at Wilton Park in Beaconsfield to Bewley Homes plc. The consideration payable presents a premium to the EPRA valuation and completion is expected in September 2020.