Walls & Futures REIT PLC (WAFR)
Walls & Futures REIT PLC: Final Results for the Year to 31 March 2023
29-Sep-2023 / 16:00 GMT/BST
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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMMENT) (EU
EXIT) REGULATIONS 2019/310.
29 September 2023
WALLS & FUTURES REIT PLC
("Walls & Futures" or the "Company")
Final Results and Audited Annual Report and Accounts for the Year to 31 March 2023
Walls & Futures REIT plc ("WAFR") the Ethical Housing Investor and Developer, is pleased to announce its final results
and the publication of its audited annual report and accounts for the year to 31 March 2023 (the "Annual Report"). A
copy of the Annual Report has been published on the Company's website, www.wallsandfutures.com, in accordance with its
articles of association, and can also be viewed through a link at the bottom of this announcement.
The principal activity of the group continues to be investing and developing property to meet the unmet demand for
specialist social housing ("SSH") in the UK. We do not have involvement with the care delivered within the properties,
which is managed by care providers approved by local authorities.
Highlights
-- Net Asset Value (NAV) down 9% to 89p per share (2022: 98p per share)
-- Revenue GBP115,398 up 23% (2022: GBP93,455)
-- Loss -GBP472,775 (2022: Loss of -GBP122,296)
-- Investment property value decreased by 9%
-- Earnings per share -12.59p (2022: -3.26p)
-- 100% of Specialist Supported Housing rents collected
-- Welcome Vengrove as a significant shareholder and strategic investor
-- Disposal of Pax Homes for GBP100,000
Key elements of the final results can be viewed below.
Joe McTaggart, CEO of Walls & Futures REIT plc said:
"We are pleased with the performance of our portfolio despite challenges in the UK economy, such as rising inflation
and interest rates, as well as negative sentiment towards the Specialist Supported Housing sector.
Our main priority is to complete the restructuring process and raise funds. We believe that this period of flux and
uncertainty in the real estate market presents a great opportunity to acquire high-quality, income-producing assets
across our broader social infrastructure sectors. We consider these sectors to be fundamental to our growth and their
contribution to regional and local communities."
For further information, contact:
Walls & Futures REIT PLC 0333 700 7171
Joe McTaggart, Chief Executive
Website www.wallsandfutures.com
Allenby Capital Limited (Corporate Adviser)
Nick Harriss/James Reeve 020 3328 5656
Extract from the Strategic Report
Overview
For the year 31 March 2023 I am pleased to report that despite the UK's challenging economic backdrop of rising
inflation and interest rates the company is poised to complete its new platform for growth and dividend.
Our existing Specialist Supported Housing ("SSH") portfolio performed well, and we collected 100% of our rents which
benefited from increases from our inflation adjusted leases. Additionally, we are happy to announce that none of our
tenants' face enforcement action from the Regulator of Social Housing.
There has been a modest fall of 9% in the value of our portfolio and our Net Asset Value ("NAV") fell by 9% to 89p per
share on 31 March 2023, largely reflective of the rise in UK interest rates. The group does not have any borrowing so
has not directly been adversely affected by rising interest rates and the cost of serving debt.
As stated in earlier communications, we had been in discussions with a number of potential strategic investors with
whom we might collaborate to scale the Company in terms of equity investment and investment capacity, with the goal of
delivering long-term safe income through ethically minded property investments.
As a result of these discussions, in December 2022 we announced that Vengrove, a UK focused, vertically integrated,
real estate investment manager with a 10-year track record, had become a significant shareholder in the Company. As of
Q3 2022, Vengrove had GBP650m of assets under management including residential, commercial (office and industrial) and
operational real estate.
Together we worked on a new broader investment strategy and a restructure, which would see Vengrove as the Company's
external investment manager and the disposal of Pax Homes as we will no longer act as developer. This was overwhelming
approved by shareholders at the General Meeting in February 2023 with the sale of Pax Homes.
On the 31 March 2023, the Company sold the ordinary share capital of Pax Homes Limited ("PHL") to Joe McTaggart, Chief
Executive of the Company. PHL was a wholly owned dormant subsidiary of the Company which was incorporated on 16
February 2022 to protect the Pax Homes name, with an ordinary share capital of GBP1, and was sold on 31 March 2023 for GBP1
(the "share sale").
Immediately following the Share Sale, the intellectual property relating to Pax Homes (the "IP"), a specially designed
home that will improve the lives of autistic people, was sold to PHL ("the "IP Sale"). In consideration for the IP, PHL
has issued the Company 100,000 preference shares of GBP1 each (the "Preference Shares"). The Preference Shares have the
following key terms:
. Coupon 5%
. Coupon payment - Annually on 1 April (cumulative for any outstanding coupons)
. Redemption - 1 April 2029 (early redemption at the option of the issuer on 1 April each year)
Pax Homes has not generated any revenues to date so it has been decided that it would be prudent to write down the
value of the investment on our balance sheet as Pax Homes is essentially a start-up and is currently establishing its
order book. This will be evaluated annually.
Outlook for the future
The broader economic outlook and negative sentiment towards the SSH sector has seen the share price of REITs in our
sector fall and trade at discounts to their NAV. Furthermore, property companies that had not fixed their interest
rates or are planning to refinance in the near future may be obliged to sell otherwise high-quality assets.
We believe this period of flux and uncertainty offers us an excellent opportunity to acquire high-quality, income
producing real estate assets across our border social infrastructure these which we define as foundational assets that
support the quality of life of regional and local communities.
The four core sectors are:
1. Affordable Housing - e.g. Intermediate Rent and Discount to Market Rent PRS (Private Rental Sector)
Affordable Housing is fundamental to a fair and healthy community and those most vulnerable are impacted the most. The
REIT will acquire affordable housing to lease to key workers and others finding it hard to afford market rent prices
across the UK.
2. Education - e.g. Children's Nurseries, Special Education Needs & Schools
Education is an essential pillar in driving economic growth in local communities across all age groups. The REIT will
acquire key educational facilities to further support the education/training of individuals across communities.
3. Roadside & Transport - e.g. Service stations (EV & Petrol), Car Parks, Bus depots
Community urban infrastructure assets are the physical facilities needed to support and sustain a community of people
to live and work. The REIT will acquire roadside & transport assets that act as key infrastructure for a local
community and beyond.
4. Civic, Community & Justice - e.g. Community Centres, Libraries, Law Courts, Recycling Facilities
Civic, community and justice buildings often embody the identity of the communities they serve. In addition to official
functions, they fulfil a variety of other purposes such as a place to meet. The REIT will acquire community assets that
are used for the well-being of the wider community.
To accurately reflect our investment approach the Company will change its name to Social Infrastructure REIT, a change
that was approved at the General Meeting in February 2022. It is anticipated the name change and registration will take
place towards the end of 2023 and coincide with a fund raise.
Consolidated Statement of Comprehensive Income
For The Year Ended 31 March 2023
2023 2022
Notes GBP GBP
TURNOVER 5 115,398 93,455
Cost of sales - 1,549
GROSS PROFIT 115,398 91,906
Administrative expenses 239,033 242,474
(123,635) (150,568)
Other operating income - 12,500
(Loss)/gain on revaluation of tangible assets (250,000) 185,000
OPERATING (LOSS)/PROFIT 7 (373,635) 46,932
Exceptional item 8 - 168,794
(373,635) (121,862)
Interest receivable and similar income 1,749 61
(371,886) (121,801)
Amounts written off investments 9 99,999 -
(471,885) (121,801)
Interest payable and similar expenses 10 558 478
LOSS BEFORE TAXATION (472,443) (122,279)
Tax on loss 11 332 17
LOSS FOR THE FINANCIAL YEAR (472,775) (122,296)
OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
(472,775) (122,296)
Loss attributable to:
Owners of the parent (472,775) (122,296)
Total comprehensive income attributable to:
Owners of the parent (472,775) (122,296)
Earnings per share expressed
in pence per share: 13
Basic -12.59 -3.26
Diluted -12.59 -3.26
Consolidated Statement of Financial Position
31 March 2023
2023 2022
Notes GBP GBP GBP GBP
FIXED ASSETS
Intangible assets 14 - -
Investments 15 1 -
Investment property 16 2,500,000 2,750,000
2,500,001 2,750,000
CURRENT ASSETS
Debtors 17 13,493 42,107
Cash at bank 756,524 949,249
770,017 991,356
CREDITORS
Amounts falling due within one year 18 32,592 25,155
NET CURRENT ASSETS 737,425 966,201
TOTAL ASSETS LESS CURRENT LIABILITIES
3,237,426 3,716,201
CREDITORS
Amounts falling due after more than one year
19 13,000 19,000
NET ASSETS 3,224,426 3,697,201
CAPITAL AND RESERVES
Called up share capital 23 187,754 187,754
Share premium 24 3,505,154 3,505,154
Fair value reserve 24 1,166,019 1,416,019
Retained earnings 24 (1,634,501) (1,411,726)
SHAREHOLDERS' FUNDS 26 3,224,426 3,697,201
Consolidated Statement of Cash Flows
For The Year Ended 31 March 2023
2023 2022
Notes GBP GBP
Cash flows from operating activities
Cash generated from operations 1 (64,682) (359,185)
Interest paid (558) (478)
Tax paid - (6)
Net cash from operating activities (65,240) (359,669)
Cash flows from investing activities
Sale of fixed asset investments - 12,500
Sale of investment property - 650,000
Development costs recognised in c/year 14 (123,234) -
Interest received 1,749 61
Net cash from investing activities (121,485) 662,561
Cash flows from financing activities
Loan repayments in year (6,000) (5,000)
Net cash from financing activities (6,000) (5,000)
(Decrease)/increase in cash and cash equivalents (192,725) 297,892
Cash and cash equivalents at beginning of year
2 949,249 651,357
Cash and cash equivalents at end of year 2 756,524 949,249
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Attachment File: Annual Report and Audited Accounts for the Year
to 31 March 2023
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Dissemination of a Regulatory Announcement that contains inside
information in accordance with the Market Abuse Regulation (MAR),
transmitted by EQS Group. The issuer is solely responsible for the
content of this announcement.
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ISIN: GB00BD04QG09
Category Code: FR
TIDM: WAFR
LEI Code: 213800CJV93R1FPNT553
Sequence No.: 275012
EQS News ID: 1738463
End of Announcement EQS News Service
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