Full year results for the year ending 30 June 2021

One Heritage Group plc (OHG)
20-Oct-2021 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.

20 October 2021

ONE HERITAGE GROUP PLC

(the “Company” or “One Heritage”)

 

Full year results for the year ending 30 June 2021

 

One Heritage Group PLC (LSE: OHG), the UK-based residential developer focused on the North West of England is pleased to announce its audited results for the year ended 30 June 2021.

 

Financial highlights

 

 

Operating highlights

 

 

Outlook

 

 

 

Jason Upton, Chief Executive Officer said:

 

“I am exceptionally proud of our employees and the substantial progress we have made. This is the first annual report released by the Group as a listed business and it gives a comprehensive view of the performance of the business and our strategy going forward. As we move into the new financial year, we have set out five strategic priorities that will drive how we build our business. The environment is challenging but the Group continues to mitigate against this through the agility, flexibility and innovation of its employees and through its relationships with other stakeholders.”

 

Chief Executive’s statement

 

We are pleased to report excellent progress with our strategy over the last 12 months despite the challenges caused by the global pandemic, lockdown restrictions and industry cost pressures. In adapting well to these challenges, the Group demonstrated our resilience and agility and this has provided us with a strong foundation which bodes well for the future. Importantly, we have continued to expand during this period, adding more developments and a number of exceptional colleagues as we seek to generate strong returns for our shareholders.    

The Group’s headline results reflect our infancy as a business with our first development not due to finish until early 2022. The Group’s financial position remains robust with a reported NAV per share of 8.4p, cash and cash equivalents of £0.7 million and £5.75 million of remaining facility with our major shareholder. With good progress being made with these projects, and other foundations we have put in place, we are poised for strong growth over the forthcoming period. We have also taken steps to build and secure our other core sources of income by adding further Development Management projects and by commencing the restructuring of our ancillary property management services as we leverage our team’s expertise and experience.  

Our property management and lettings services are currently outsourced to One Heritage Complete, of which the Group owns 47%. This company has experienced difficulties over the period in connection with two of its subsidiaries (which provide refurbishment, design, fit-out and furnishing services) to the extent that both these subsidiaries have filed for voluntary liquidation. Following a strategic review by the Group, we have decided to bring these same services in-house and to terminate our relationship with One Heritage Complete in an orderly manner and impair our stake in the entity to zero. Otherwise, there is no financial impact to the Group.

At the start of the period under review, I set out below a number of key strategic priorities for the Group which I touched on in our interim results earlier this year. These objectives and the progress against each are set out below. 

I am delighted to report significant progress on our development projects, having announced earlier this year the execution of three building contracts and the raising of £5.5m of new development finance. This means that we have formally commenced the programme of works for our Bank Street Sheffield, Oscar House Manchester and Lincoln House Bolton developments to create 138 apartments. All are expected to complete construction and sale during the new financial year to June 2022.

In the background, our team have continued to refine the design of our developments and have increased the number of apartments across our developments from 169 to 171. Improvements to design and additional units has have increased the aggregate GDV by £2.4 million.

To date, we have successfully achieved planning permission for three of our development projects, namely Bank Street, Oscar House and Lincoln House. We are currently awaiting the outcome of a modified planning application for Bank Street, where we are seeking to add one further apartment and additional design changes for greater efficiency. Planning applications have also been submitted for St Petersgate, Stockport and Churchgate, Leicester. We expect these applications to be determined later this calendar year.    

The most significant challenge we are facing currently, itself an industry-wide challenge and well documented in the media, is the mounting cost pressure in respect of building materials. This has been caused by the production of these materials being severely affected by economic lockdowns around the world in response to the global pandemic. As economies have opened up, production has struggled to keep up with a surge in demand.  From our perspective, this has been offset to some extent, by the continued up-tick in property prices and the fact that our three development projects that have already commenced have fixed price contracts, with the remaining two being tendered on a fixed price basis before any works are commenced.

Below is a current summary of our existing development projects:       

 

Project

Location

Residential units

Commercial units

GDV (£m)

Expected Completion

Reservations

Lincoln House

Bolton

88

0

9.4

Q1 2022

22 (25%)

Churchgate

Leicester

15

1

3.6

Q3 2022

Not started

Oscar House (Chester Road)

Manchester

27

0

6.3

Q1 2022

27 (100%)

Bank Street

Sheffield

23

0

3.8

Q1 2022

14 (60%)

St Petersgate (Plus House)

Stockport

18

1

3.2

Q3 2022

Not started

 

 

171

2

26.3

 

 

In addition to the Group-owned developments listed above, we have also made good progress with the developments where we are acting as Development Manager. At present we are managing three projects; a 55 storey tower in Manchester (at RIBA stage 4 design); a conversion of a former Court House in Oldham being forward funded by a housing association to create 42 affordable homes, and a development in Queen Street Sheffield to create 58 apartments.

In conjunction with the start on site at three developments, we have also commenced our sales programme. Although none of the developments is scheduled for completion until the first quarter of 2022, we are seeing very strong pre-sale interest and we are pleased to have secured 63 property reservations as at 30 September 2021  which equates to 48.8% of apartments available for sale and totals £11.3 million in terms of GDV .

As reported at the time of our interim results, we only commence marketing developments once we have finalised design, entered into build contracts and commenced work, thereby reducing the risk of changes impacting sold apartments and also providing us some flexibility to revise designs if needed. This approach is a pivotal element of our marketing strategy where reputation and credibility are paramount, particularly for international purchasers. The success of this approach has been demonstrated by the strength of initial pre-sales, and gives us confidence that we will achieve our sales targets as developments near completion.

We have also seen further growth in our overseas sales and marketing network and have partnered with new agents to broaden our scope, militate against any future oversupply and allow us to reach new markets. The wider One Heritage business in Hong Kong (our major shareholder) which operates from nine offices in Hong Kong, mainland China and Singapore continues to oversee the majority of our sales including into new markets such as the Middle East. This, together with building a good track record and adopting strong governance and controls consistent with those expected of a UK PLC, we believe provides us with a significant competitive advantage in capitalising on continued strong overseas demand for UK residential property.     

As mentioned previously, the incumbent provider of our property management and lettings services, One Heritage Complete, in which the Group owns a 47% stake, has encountered difficulties in two of its five subsidiaries, namely One Heritage Maintenance and One Heritage Design. Post year end, we have undertaken a strategic review of the services offered by One Heritage Complete and have decided to bring these services in-house in the interests of quality control and financial oversight.

The refurbishment of Co-Living properties on behalf of investors had been mostly provided by One Heritage Maintenance, with the design and furnishing by One Heritage Design. Both these companies became insolvent in September and are being liquidated. The services provided by these companies will now be offered through our network of contractors, managed in-house.

Similarly, changes to lettings have been made which have moved the operational function to our Manchester head office, incorporating a new CRM system and new processes which allow us to better communicate with our investors and landlords. We will continue to utilise locally based agents, who understand their market best, to provide an effective let-only function. This separation of responsibilities will allow us to provide a first-class service to both landlords and tenants, with our Manchester office focusing on landlords and our local letting agents focusing on tenants.

Following the announcement in our interim results of the key appointments of Mr Luke Piggin as Finance Director and Mr Martin Crews as Development Director, we have been able to further strengthen our platform to grow the business. We have added four colleagues to our development team, two to our finance team and a further seven to back office support functions.

As part of the restructure of our property services with the Group centralising operations, Mrs Alie Horton has been appointed post financial year end as Property Operations Director. The role is to oversee further changes to our property management services provision and to deliver a first class service in respect of the increasing number of properties under management. Mrs Alie Horton joins the Group after 16 years at CBRE and brings our headcount in our Manchester head office to nineteen.

To enable us to maintain the high quality of service through this period of expansion, we will be adding additional resource. This will allow us to increase the range and quality of our services as we seek to provide a market leading service and thus generate more income for the Group.

Over the last six months, we have continued to execute our strategy to grow our development pipeline by acquiring Plus House, Stockport and Bank Street, Sheffield. Both sites were acquired with the benefit of planning permission thereby de-risking the schemes and allowing us to progress to site in a timely manner.

We expect to continue to build our pipeline of new developments over the next six months to allow us to redeploy capital from completed developments next year.

The North West of England has been our core focus over the past twelve months and we continue to see value there and no let-up in demand from the investor market.  Nevertheless, we are also looking to expand further south into the Midlands to build on our existing presence in Leicester (Churchgate).

Industry Overview

UK property prices have risen by 13.2% in the year to 30 June 2021, according to Land Registry data. This has been driven by a combination of additional support from the Government, including stamp duty holidays, extensions of existing housing schemes and furlough scheme, along with excess savings that have been generated by households as usual avenues for spending were interrupted. These factors may be expected to prove temporary which may lead to a slowdown in price growth over the next twelve months.

It should also be noted that there have been significant differences in performance across housing types and regions. However, all movements have been positive. Data suggests that there has indeed been higher demand for properties offering greater space compared to flats/maisonettes, with the latter seeing only a 7.1% increase in prices relative to the UK average of 13.1%. Breaking down the regional data suggests that flats/maisonettes have seen the slowest price growth in all regions, with London (1.8%) seeing the weakest performance and the North West (17.0%) witnessing the highest.  

Of particular note is the significant divergence in performance property prices between the North West with an increase of 18.8% and London with just 5.2%. This supports evidence that London has become an exporter of people during the pandemic, with some estimates suggesting that 8% of the population has departed. The under-performance in house prices in London may also suggest that the change is more permanent, as it is unlikely that households would up-sticks to a region on a temporary basis. The next twelve months will provide further pointers as to whether this is a permanent trend or not, as companies begin to bring employees back into offices. The North West has also benefited from the lower price to income ratio compared to the South East and London.

On the cost side, the picture is less positive with a combination of cost increases in building materials and labour shortages creating issues across the industry. We have noted that price inflation for key materials appears to be slowing towards the end of our financial year, with raw material inputs dropping significantly from their highs in 2020. However, we do not expect to see any significant decline in overall material costs, as prices appear resistant to downward pressure. Labour costs will be expected to continue to rise as shortages experienced will not be quickly rectified, given the time it takes time to train new staff. We have noted that labour shortages and wage rises have been greater in regions that had a higher reliance on continental European labour and as such do not expect to see as much pressure in the North West, versus for instance, in the South.

People and Culture

Our progress over the last twelve months has been made possible by our people. One Heritage Group PLC is an employer that invests in our people and we continue to look at ways in which to improve employee engagement. An example of a successful initiative is the new Social and Charity committee which is run by our employees. This has seen us partner with a local charity, LifeShare, who are focussed on homelessness and poverty in Manchester. LifeShare have been tackling homelessness for over 35 years and make an admirable contribution towards alleviating it in the region. We have recently pledged a £1,000 donation towards their Christmas initiatives, our staff have given additional support with significant donations of clothing and food, and we will be participating in an upcoming charity football event. Other fund raising has taken place in support of Bowel Cancer UK, Mind and Motor Neurone Disease Association. To further support these initiatives, we have provided our employees with the option to volunteer for up to two days per year which has been well received and allows us to give something back to the community.

While flexible working during the pandemic had its benefits, I am of the view that it can have a detrimental effect on those employees who are in the early stages of their careers where learning and development is essential. As such, we welcome having our staff back in the office again. We continue to support our workforce with our senior management team running regular training sessions and we are also encouraging the attainment of professional qualifications. We are committed to continuous professional development as we mentor and develop our exceptional talent, as well as creating an environment and culture in which they can succeed.

Covid-19 impact and response 

Our team have remained agile and have adapted well to the challenges the pandemic has presented us with over the last twelve months. We took the decision during national lockdowns to close our office and implement full remote working to protect the safety of our workforce and suppliers. With the roll out of the vaccination programme and restrictions easing, all staff are now back working safely from our Manchester office. With additional resource added to the Group and staff returning to office working we have moved into a larger office space which also allows for future expansion.

We are fortunate that our own operations have been largely unaffected during the pandemic. However, we have experienced challenges with some partners and stakeholders having to make major adjustments in order to adapt to a new working environment. Overall, we have found that the majority of businesses have been proactive and resourceful in the circumstances, and I am looking forward to the market returning to full capacity and pre pandemic levels of engagement and service over the coming months as more staff return back to the office and face-to-face meetings recommence.

ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE EVALUATION (ESG)

Although only nine months into life as a Public Listed Company, we are placing a significant emphasis on conducting our business activities ethically and responsibly. I have been pleased with the progress the Group has made as our full ESG strategy evolves .

 

Environmental

We are undertaking a review of our developments to identify ways to make them greener and more environmentally friendly and reduce our carbon footprint. Certain initiatives have been identified to switch to greener materials which include a brown roof in our Queen Street, Sheffield development

 

Social

We are committed to supporting local communities and giving back to society, especially in regions where our developments are located. In addition to the charitable work outlined earlier, further steps have been taken to engage with local employers and schools to identify ways we can work closely together. We will be inviting local primary schools to help with planting around our buildings and we will be collaborating with colleges and their students studying construction. We have implemented a new staff policy where staff are able to take an additional two days leave to be dedicated to charitable means.

We have also introduced initiatives to enhance the well-being of our employees which includes monthly social events, charitable activities and an extension to our remuneration package which includes a new employee assistance programme, which provides a range of support tools for employees wellbeing.

Governance

We adhere to the QCA code. More details can be found on page 14. 

 

Outlook

While property sales have remained strong and the industry has performed well over the period, I am expecting a more normalised level of market activity to return towards the end of 2021 and early 2022. As mentioned above, we are currently seeing building material price increases in the market. We will continue to work closely with our construction partners in order to manage price risk and minimise the impact on the viability of our developments.

Our sales programme has largely remained unaffected during the pandemic because our target purchasers are not owner occupiers and are not dependant on the mortgage market and government initiates such as Help to Buy. As the majority of our purchasers are based overseas, they are also not reliant on ‘in person’ viewings either. We continue to see strong demand for affordable housing from registered housing providers and in August we signed an agreement to deliver 42 apartments in Oldham for Arcon Housing, a subsidiary of Bolton at Home with the support of Homes England. The Group remains well placed to establish longer term relationships with registered providers such as these to help deliver the higher volume of affordable housing that they are seeking.

The private rental sector (PRS) market continues to experience strong demand from overseas investors for housing across the North of England in particular. We will continue to expand the level of service we provide to third party investors and build on the four development management agreements we have in place, which includes the addition of a 58 apartment development in Sheffield on behalf of overseas investors.  

We remain positive on the outlook for the property market. The Government’s commitment to ‘levelling up’ is welcomed and with the continuing undersupply of quality housing in the North West of England, the region will continue to be an attractive area for investment. The strong demand from overseas investors in particular, despite the pandemic and travel restrictions, gives us optimism about the prospects for our business as the economy recovers.

Our core strategic objectives will remain in place over the forthcoming period as the Group focuses on the successful delivery of our projects, the sale of completed units, enhancing the infrastructure needed to build our pipeline and recruiting exceptional talent.

 

Chairman’s statement

 

I was delighted to be appointed as Non-Executive Chairman to One Heritage Group PLC in December 2020 following our successful listing on the Standard List of the Main Market of the London Stock Exchange. In the short time I have been with the Company, I have been pleased to see the way in which the executive management team, with clear focus and determination, has begun to implement our strategy for sustainable growth. In this period I have seen the Group complete on the acquisition of new development projects, sign additional development management agreements and also manage a rapid restructuring of our property management and lettings provision following difficulties encountered by the current service provider.

 

Dividend and dividend policy

The Group did not generate a profit in the financial year and is therefore not proposing a dividend. This is in line with the dividend policy set out in the prospectus. The Group expects to pay a dividend in the future when it is generating recurring and growing profits.

 

ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE EVALUATION (ESG)

The Board of Directors takes our ESG responsibilities very seriously. I am pleased that since joining the business I have been part of a working group that has been proactive in finding ways to promote social causes, for example through the employee led Social and Charity Committee.

Reducing our environmental impact as a property development business is a particularly challenging area given the outsized contribution to carbon emissions from building materials, but even with this I have noted that the Group is constantly looking at greener design and material options, local procurement and working with local communities, such as schools, to improve the local environment. The Board see this as a priority for the business.

Whilst the business  is only at the beginning of its journey, there is a clear focus on creating a strong governance structure. We recognise that shareholder and other stakeholder outcomes are improved by ensuring that good governance is in place. More details on the steps in this regard taken by the Group can be found in the sections of this annual report which relate to the QCA Corporate Governance Code (page 14) and The Role of the Board (page 19).

The Board believe that diversity is important to the success of the Group in the future and was pleased to see Mrs Alie Horton join as the Property Operations Director in the new financial year. We are focused on ensuring that there are equal opportunities and committed to increasing diversity.

 

People

Finally, I would like to thank our shareholders and other stakeholders for their support during the first part of the Group’s journey. Most of all, I want to thank our directors and employees throughout the business, who continue to grow with every opportunity and challenge that they face. I am particularly impressed by the corporate culture which is fast emerging, the creativity and the resilience that everyone demonstrates, even in just a short time.

 

David Izett

Chairman

The full version of the OHG annual report will be available on its website shortly at https://www.oneheritageplc.com/.

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (MAR). Upon the publication of this announcement, this inside information is now considered to be in the public domain. For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055.

Contacts

One Heritage Group plc

 

Jason Upton

Chief Executive Officer

Email: [email protected]

 

Luke Piggin

Finance Director

Email: [email protected]

 

Hybridan LLP (Financial Adviser and Broker)

Claire Louise Noyce

Email: [email protected]

Tel: +44 (0)203 764 2341

 

About One Heritage Group

One Heritage Group PLC is a property development and management company. It focuses on the residential sector primarily in the north-west of England, seeking out value and maximising opportunities for its investors. It has a team of dedicated residential property development experts. In 2020 One Heritage Group PLC became one of the first publicly listed residential developers with a focus on co-living.

 

The Company is listed on the Standard List of the Main Market of the London Stock Exchange, trading under the ticker OHG. 

 

For further information, please visit the Company’s website at https://www.oneheritageplc.com/

 

References to page numbers throughout this announcement relates to the page numbers within the Annual Report of the Company for the year ended 30 June 2021.

 

Group’s Financial Review

 

The maidan annual report for the financial period ended 30 June 2021 saw the NAV per share of 8.4p compared to a listing price of 10p on 23 December 2020. This was a consequence of the Group continuing spend on scaling the business and the developments not expecting to complete until the next financial year. During the reporting period the Group recognised a loss of £0.8 million, which reflects the salaries, professional fees and other corporate expenses incurred in the period and the impairment of £0.2 million that was recognised in relation to our investment in associate. These were offset to some extent by the performance of the Co-living side of the business, which generated a gross profit of £314,000.

 

Restructuring and capital raises

In advance of the Group listing on the London Stock Exchange, a restructuring was undertaken. This involved transferring out two subsidiaries, One Heritage Tower Limited and Harley Street Developments Limited for a gain of £26,423, a debt for equity swap which saw One Heritage Property Development Limited in Hong Kong convert £2.75 million of debt into 20.7 million shares and then the acquisition of One Heritage Property Development (UK) Limited, known as the Trading Group, by One Heritage Group plc.

The Company was pleased to list on 23 December 2020 where investors acquired 9,300,000 shares at 10p per share. This was followed up with a placing and subscription on 11 February 2021 where the Company sold an additional 1,828,333 shares at 30p each, which demonstrated investors believe in the strategy of the Group.

 

Acquisitions of new properties AND SIGNING OF A DEVELOPMENT MANAGEMENT AGREEMENT

Following the listing of the Group we have been pleased to complete on two acquisitions, with Bank Street Sheffield acquired for £800,000 and Plus House in Stockport acquired for £725,000. On top of these acquisitions the Group has spent a further £1.7 million, including capitalised finance costs, on the developments since the end of the calendar year with the aim to complete the majority of our existing developments by the end of the next financial year.

The Company was also pleased to sign a development management agreement with One Heritage North Church Limited, to redevelop an existing office into 58 self-contained apartments. This contributed £15,000 of revenue in the financial period, as the agreement was signed just before the period end.

 

Financing

The Group is fortunate to have a supportive majority shareholder, One Heritage Property Development Limited, which increased the shareholder facility by £2.5 million to £7.5 million, on the same terms as the existing facility with an early repayment date on 31 December 2022 for the extended amount. As at 30 June 2021, the Group had drawdown £1.3 million of the facility. This facility has been provided to ensure that we are able to continue with developments if other financing is not available.

Two construction finance agreements were signed in May and June 2021. These agreements cover the construction finance costs of the developments in One Heritage Bank Street Limited and One Heritage Oscar House Limited, and allow the Group to drawdown a gross amount of £5.5 million for a period of 18 months.

The Group’s policy is to capitalise finance costs from external loan facilities against the underlying developments and during the financial period to 30 June 2021, £0.3 million was capitalised. The remaining finance costs recognised on the income statement relate to amounts that were not capitalised and the finance lease on the office.

 

Scaling the business

The loss per share of 3.1p was primarily driven by administration costs in the business. Salary costs contributing 68.2% of the total as the Group increased the number of staff to 20 at the end of the financial period. The Group also moved into a larger office space in the same building at the end of the period and the Group recognised a right of use asset of £288,463, which will be depreciated over the five year lease term. Other key costs recognised relate to professional and corporate expenses, some of which relate to being a public listed company versus previously operating as a private company.

 

ONE HERITAGE COMPLETE

The Group has a 47% share in One Heritage Complete Limited, which has five subsidiaries with various stakes between 51% and 93%. These entities have their own management team and finance function. After the end of the financial year, information came to light that One Heritage Maintenance Limited had become insolvent due to a combination of structurally high costs, onerous contracts it had signed and liabilities in excess of its assets and as such has been placed in liquidation. At the same time, the management of One Heritage Maintenance had received loans from other subsidiaries. As a result of this action, another entity One Heritage Design Limited also became insolvent and was put into liquidation. Given this situation, the Group took the decision to impair the stake in One Heritage Complete Limited to zero, as there was significant uncertainty on the ability of the Group to realise value from this entity in the future.

 

Statement of Directors’ Responsibilities

 

The directors are responsible for preparing the Annual Report and the Group and parent Company financial statements in accordance with applicable law and regulations. 

Company law requires the directors to prepare Group and parent Company financial statements for each financial year.  Under that law they are required to prepare the Group financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and applicable law and and have elected to prepare the parent Company financial statements in accordance with UK accounting standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 101 Reduced Disclosure Framework.  In addition the Group financial statements are required under the UK Disclosure Guidance and Transparency Rules to be prepared in accordance with International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent Company and of the Group’s profit or loss for that period.  In preparing each of the Group and parent Company financial statements, the directors are required to: 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company’s transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006.  They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. 

Under applicable law and regulations, the directors are also responsible for preparing a Strategic Report, Directors’ Report, Directors’ Remuneration Report and Corporate Governance Statement that complies with that law and those regulations. 

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website.  Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

WEBSITE PUBLICATION

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website.  Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

DIRECTORS’ RESPONSIBILITIES PURSUANT TO DTR4

The Directors confirm to the best of their knowledge:

 

By order of the Board

Jason Upton

Chief Executive Officer

19 October 2021

 

Financial Statements

 

Consolidated statement of comprehensive income

For the year/period ended 30 June

 

£ unless stated

Notes

Year to

 30 June 2021*

 

Period to

 30 June 2020*

Unaudited

 

 

 

 

Revenue – Development management

8

124,199

 

 

 

 

Revenue – Co-living

8

340,168

220,000

Cost of sales – Co-living

 

(26,400)

(197,558)

Gross profit – Co-living

 

313,768

 

22,442

 

 

 

 

Write-down in investment in associate

16

(239,316)

Other income

 

21,223

32,696

Administration expenses

9

(962,512)

(316,705)

Other expenses

 

(40,380)

(48,643)

Operating (loss) for the year/period

 

(783,018)

 

(310,210)

 

 

 

 

Profit on disposal of subsidiary

7

26,423

Finance expense

11

(52,382)

(64,428)

(Loss) before taxation for the year/period

 

(808,977)

(374,638)

 

 

 

 

Taxation

12

 

(Loss) after taxation for the year/period

 

(808,977)

 

(374,638)

 

 

 

 

Other comprehensive income

 

(22)

COMPREHENSIVE INCOME attributable to shareholders

 

(808,977)

(374,660)

 

 

 

 

Weighted average shares in issued over the period

24

26,204,555

20,700,000

(Loss) per share (GBp)

 

(3.1)

(1.3)

Diluted (loss) per share (GBp)

 

(3.1)

(1.3)

*see note 2

The accompanying notes on pages 46 to 76 form an integral part of the financial statements

 

Consolidated statement of financial position

As at

£ unless stated

Notes

As at

30 June 2021*

 

 

As at

30 June 2020*

Unaudited

ASSETS

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

13

442,706

 165,301

Investment in associate

16

 

 258,512

 

 

442,706

423,813

Current assets

 

 

 

Cash and cash equivalents

 

 204,147 

 711,798

Inventory – developments

14

 6,790,676 

14,729,627

Inventory – trading property

15

 435,820 

1,179,657

Financial assets at fair value through profit or loss

17

 397,796 

897,002

Trade and other receivables

18

 667,759 

132,622

 

 

8,496,198

17,650,706

 

 

 

 

TOTAL ASSETS

 

 8,938,904

 18,074,519

LIABILITIES

 

 

 

Non-current liabilities

 

 

 

Borrowings

20

2,276,079

4,117,403

 

 

2,276,079

4,117,403

Current liabilities

 

 

 

Trade and other payables

21

649,351

666,014

Borrowings

20

3,304,103

13,665,762

 

 

3,953,454

14,331,776

TOTAL LIABILITIES

 

 6,229,533

 18,449,179

EQUITY

 

 

 

Share capital

24

 324,283

Share premium

24

3,568,725

Retained earnings

 

 (1,183,637)

 (374,660)

TOTAL EQUITY

 

 2,709,371

 (374,660)

TOTAL LIABILITIES AND EQUITY

 

 8,938,904

 18,074,519

Shares in issue

 

32,428,333

Net asset value per share (GBp)

 

8.4

*see note 2

These financial statements were approved by the board of directors on 19 October 2021 and were signed on its behalf by:

Jason David Upton

Company registration number: 12757649

The accompanying notes on pages 46 to 76 form an integral part of the financial statements

 

Consolidated statement of cash flows

For the year/period ended 30 June

£ unless stated

Notes

12 months to

 30 June 2021*

 

 

Incorporation to

 30 June 2020*

Unaudited

 

 

 

 

Cash flows from operating activities

 

 

 

Loss for the year/period before tax

 

(808,977)

(374,638) 

Adjustments for:

 

 

 

Foreign exchange

 

(22)

Write-down in investment in associate

16

239,316

Finance expense

 

52,382

64,428

Profit on disposal of subsidiary

 

(26,423)

Depreciation of property, plant and equipment

13

42,106

35,440

Movement in working capital:

 

 

 

Increase in trade and other receivables

 

(166,439)

(132,622)

Increase in inventories

 

(5,564,921)

(15,623,467)

(Decrease)/increase in trade and other payables

 

71,719

666,014

Cash from operations

 

(6,161,237)

(15,364,867)

Income taxation paid

 

Dividend received from associate

16

43,564

Net cash used in operating activities

 

(6,117,673)

(15,364,867)

 

 

 

 

Cash flows from investing activities

 

 

 

Disposal of subsidiaries, net of cash and cash equivalents

 

(66,030)

Purchase of interest in associate

16

(258,512)

Purchases of property, plant and equipment

13

(31,048)

(46,592) 

Net cash used in investing activities

 

(97,078)

(305,104)

 

 

 

 

Financing cash flows

 

 

 

Issue of share capital

 

1,538,400

Cost of share issue

 

(395,492)

Interest paid

11

(460,253)

(344,889)

Proceeds from borrowings

 

10,667

4,770,000

Proceeds of related party borrowing

 

5,046,710

11,975,192

Payments made in relation to lease liabilities

20

(32,932)

(18,534)

Net cash generated from financing activities

 

5,707,100

16,381,769

 

 

 

 

Net change in cash and cash equivalents 

 

(507,651)

711,798

Opening cash and cash equivalents

 

711,798

Closing cash and cash equivalents

 

204,147

711,798

*see note 2

The Trading Group undertook a debt for equity transaction in the year to 30 June 2021, for £2,750,000. This is not reflected in the above cash flow statement. See Note 2.

The accompanying notes on pages 46 to 76 form an integral part of the financial statements

 

Consolidated statement of changes in equity

For the year/period ended 30 June 2021

£ unless stated

 

Share

capital

Share

premium

Retained

earnings

Total

Equity

Balance at 01 July 2020 (unaudited)

 

(374,660)

(374,660)

 

 

 

 

 

 

Loss for the period

 

(808,977)

(808,977)

Other comprehensive income for the year

 

 

 

 

 

 

 

Total comprehensive income for the year

 

(1,183,637)

(1,183,637)

 

 

 

 

 

 

Issue of share capital

 

324,283

3,964,217

4,288,500

Cost of share issue

 

(395,492)

(395,492)

 

 

 

 

 

 

Balance at 30 June 2021

 

324,283

3,568,725

(1,183,637)

2,709,371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the period from incorporation to 30 June 2020

£ unless stated

 

Share

capital

Share

premium

Retained

earnings

Total

Equity

Balance at incorporation

 

 

 

 

 

 

 

Loss for the period

 

(374,638)

(374,638)

Other comprehensive income for the period

 

(22)

(22)

 

 

 

 

 

 

Total comprehensive income for the period

 

(374,660)

(374,660)

 

 

 

 

 

 

Issue of share capital

 

 

 

 

 

 

 

Balance at 30 June 2020 (unaudited)

 

(374,660)

(374,660)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes on pages 46 to 76 form an integral part of the financial statements.

 

Notes to the consolidated financial statements

For the year ended 30 June 2021

One Heritage Group PLC (the “Company”)(Company number: 12757649) is a public limited company, limited by shares, incorporated in England and Wales under the Companies Act 2006.  The address of its registered office and its principal place of trading is 80 Mosley Street, Manchester, M2 3FX. The principal activity of the company is that of property development.

These consolidated financial statements (“Financial Statements”) as at the end of the financial year to 30 June 2021 comprise of the Company and its subsidiaries. A full list of companies consolidated in these Financial Statements can be found in Note 28. 

A group restructuring exercise was carried out during the year as follows:

The acquisition by the Company of the Trading Group is a common control transaction under IFRS 3. The consolidation of this Group has been prepared using the merger method. In the statement of financial position, the acquiree’s identifiable assets, liabilities are recognised at their book values at the acquisition date. The results of merged operations following the Group’s restructure in the period are included in the consolidated statement of comprehensive income as if the Group has always existed. Comparative figures are provided on the basis that the merged group always existed. One Heritage Property Development (UK) Limited was incorporated on 19 May 2019 and the comparative period is from incorporation of this entity to 30 June 2020.

The financial statements are prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value: financial assets at fair value through profit or loss.

This is the first reporting period, as the Company was incorporated on 21 July 2020. The Group’s financial statements are prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. The Company has elected to prepare its parent company financial statements in accordance with FRS 101. These are presented on pages 77 to 83. In addition, the Group financial statements are required under the UK Disclosure Guidance and Transparency Rules to be prepared in accordance with International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. The significant accounting policies are set out in note 6. The accounting policies have been applied consistently to all periods presented in these group Financial Statements.

They were authorised for issue by the Company’s Board of Director on 39.

The Group’s management review the business as a whole, while it remains in its early stage of development. The Group considers there is one operating segment, property, therefore does not provide segmentation.

Going concern

Notwithstanding net current liabilities of £2,683,752 (excluding inventory balances totalling £7,226,495) as at 31 August 2021, a loss for the year then ended of £808,977 and operating cash outflows for the year of £6,117,673, the financial statements have been prepared on a going concern basis which the directors consider to be appropriate for the following reasons.

The directors have prepared cash flow forecasts for the period to 31 December 2022 which indicate that, taking account of reasonably possible downsides, the company will have sufficient funds, through the proceeds from sale of developments and trading properties, repayment of loan to Robin Hood Property Development Limited, extension of loans from One Heritage SPC  and a planned fund raise from the issue of a corporate bond, suppleme…

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