PCTZ Picton Zdp

18 November 2015

PICTON ZDP LIMITED

(The “Company”)

HALF YEAR RESULTS

Picton ZDP Limited (LSE: PCTZ), announces its half year results for the six month period to 30 September 2015.

The Company’s principal objective is to provide Zero Dividend Preference Shares with a predetermined final capital entitlement. It is recommended that these accounts are read in conjunction with those of its parent, Picton Property Income Limited, also issued today.

For further information:

Tavistock
Jeremy Carey/James Verstringhe, 020 7920 3150, jverstringhe@tavistock.co.uk

Picton Capital Limited
Michael Morris, 020 7011 9980, michael.morris@picton.co.uk

The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3QL

David Sauvarin, 01481 745 529, team_picton@ntrs.com
 

Note to Editors

The Company’s principal investment objective is to provide the holders of the zero dividend preference shares with a predetermined final capital entitlement in October 2016.

Picton ZDP Limited is a wholly owned subsidiary of Picton Property Income Limited (‘Picton’). Picton is an income focused, internally managed Investment Company listed on the London Stock Exchange. Picton can invest both directly and indirectly in commercial property across the United Kingdom. With Net Assets of £393.1 million at 30 September 2015, Picton's objective is to provide shareholders with an attractive level of income, together with the potential for capital growth by investing in the principal commercial property sectors. 

www.picton.co.uk

Interim Management Report

Picton ZDP Limited (“the Company”) is a Guernsey registered company established on 2 September 2012 and is a wholly owned subsidiary of Picton Property Income Limited (“the Parent”), which is a closed ended investment company incorporated in Guernsey.

The Company’s principal investment objective is to provide the holders of the zero dividend preference shares (“ZDP shares”) with a predetermined final capital entitlement. 

On repayment, ZDP shareholders are entitled to receive an amount equal to 100 pence per share increased daily at an equivalent annual rate of 7.25% per annum. The ZDP shares’ maturity date is 15 October 2016 and the final capital entitlement will be 132.2 pence per ZDP share. 

The Parent has entered into a Contribution Agreement with the Company to provide an undertaking to pay any costs and expenses incurred by the Company and to enable the Company to meet its payment obligations in respect of the ZDP shares. Although the Parent has entered into an undertaking to meet all liabilities as they fall due it is important to note that all risks are borne by the ZDP shareholders, who are not guaranteed to receive their full capital entitlement.

The Company’s ZDP shares mature on 15 October 2016. The Company has entered into a Contribution Agreement with the Parent whereby the Parent has provided an undertaking to enable the Company to meet it’s payment obligations in respect of the ZDP shares. The financial statements have been prepared on a going concern basis on the grounds that the Parent will continue to provide support to the Company under the Contribution Agreement.

Statement of Directors’ Responsibilities

The Directors confirm to the best of their knowledge that:

(a)        the condensed set of financial statements have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’;

(b)        the Interim Management Report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7R, being an indication of important events during the first six months of the financial year, a description of principal risks and uncertainties for the remaining six months of the year, and their impact on the condensed set of financial statements; and

(c)        the Interim Management Report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.8R, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Company.

Robert Sinclair
Director
17 November 2015

INDEPENDENT REVIEW REPORT TO PICTON ZDP LIMITED (“the Company”)

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the Half Year Report for the six months ended 30 September 2015, which comprises the Condensed Statement of Comprehensive Income, the Condensed Statement of Changes in Equity, the Condensed Balance Sheet and the related explanatory notes. We have read the other information contained in the Interim Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The Half Year Report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Half Year Report in accordance with the DTR of the UK FCA.

As disclosed in note 2, the annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards. The condensed set of financial statements included in this Half Year Report has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Half Year Report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Half Year Report for the six months ended 30 September 2015 is not prepared, in all material respects, in accordance with IAS 34 and the DTR of the UK FCA.

Neale D Jehan
For and on behalf of KPMG Channel Islands Limited
Chartered Accountants
Guernsey

17 November 2015

Financial statements

There is no comprehensive income other than the loss for the period.

Notes 1 to 9 form part of these financial statements.

Notes 1 to 9 form part of these financial statements.

These financial statements were approved by the Board of Directors on 17 November 2015 and signed on its behalf by:

Robert Sinclair
Director

Notes 1 to 9 form part of these financial statements.

Notes to the Condensed Financial Statements
For the half year ended 30 September 2015

1.      General information

Picton ZDP Limited (the “Company”) was incorporated on 2 September 2012 and is registered in Guernsey. The Company is a wholly owned subsidiary of Picton Property Income Limited (the “Parent”), which is an investment company registered in Guernsey. The financial statements are prepared for the period from 1 April 2015 to 30 September 2015, with unaudited comparatives for the period from 1 April 2014 to 30 September 2014. Comparatives are also provided from the audited financial statements for the year ended 31 March 2015.

These financial statements are presented in pounds sterling, being the currency of the primary economic environment in which the Company operates.

2.      Significant accounting policies

Basis of accounting

The financial statements have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the financial statements of the Company as at and for the year ended 31 March 2015.

The accounting policies applied by the Company in these financial statements are the same as those applied by the Company in its financial statements as at and for the year ended 31 March 2015.

The annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the IASB. There have been no significant changes to management judgement and estimates.

The Company’s ZDP shares mature on 15 October 2016. The Company has entered into a Contribution Agreement with the Parent whereby the Parent has provided an undertaking to enable the Company to meet it’s payment obligations in respect of the ZDP shares. The financial statements have been prepared on a going concern basis on the grounds that the Parent will continue to provide support to the Company under the Contribution Agreement.

Segmental reporting

The Directors are of the opinion that the Company is engaged in a single economic and geographic segment of business, primarily being the raising of funds in order to provide financing to the Parent.

Statement of cash flows

No Cash Flow Statement is presented as all funding activities are provided by the Parent.

Financial risk management

The Company’s financial risk management policies are consistent with those disclosed in the financial statements as at and for the year ended 31 March 2015.

3.      Administration expenses

The Company receives administration services from Picton Capital Limited, a fellow subsidiary of Picton Property Income Limited. The fees payable are fixed at £10,000 per annum.

4.      Tax

The Company is exempt from Guernsey income tax under the Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 and is charged an annual exemption fee of £1,200.

5.       Amounts due from parent company

Funds raised through the ZDP share issue, after the deduction of issue costs of £729,000, totalled £21,271,000. These funds have been transferred to the Parent as a non-interest bearing loan repayable on demand according to the Loan Agreement dated 12 September 2012.

On 12 September 2012, the Company entered into a Contribution Agreement with the Parent. The agreement provides an undertaking by the Parent to pay any costs and expenses incurred by the Company in respect of its operation and the continuation of its business and to enable the Company to meet its payment obligations in respect of the ZDP shares. The Parent has agreed to support the Company’s obligations and has agreed to certain protections to ensure the Parent does not make distributions or returns of capital without retaining sufficient capital to meet its obligations to the Company. During the period, the Parent provided an undertaking of costs totalling £1,042,000, of which £15,000 was settled by the Parent during the period.

The Directors believe the carrying amount due from the Parent approximates its fair value.

6.       Zero dividend preference shares

The Company issued 22,000,000 zero dividend preference shares (“ZDP shares”) at 100 pence per share. The ZDP shares have an entitlement to receive a fixed cash amount on 15 October 2016, being the maturity date, but do not receive any dividends or income distributions. Additional capital accrues to the ZDP shares on a daily basis at a rate equivalent to 7.25% per annum, resulting in a final capital entitlement of 132.2 pence per share. The ZDP shares are listed on the London Stock Exchange.

For the period the Company has accrued for £934,000 of additional capital (30 September 2014: £870,000, 31 March 2015: £1,766,000). The total amount repayable at maturity is £29,114,000.

The ZDP shares do not carry the right to vote at general meetings of the Company, although they carry the right to vote as a class on certain proposals which would be likely to materially affect their position. In the event of a winding-up of the Company, the capital entitlement of the ZDP shares (except for any undistributed revenue profits) will rank ahead of ordinary shares but behind other creditors of the Company.

The fair value of the ZDP shares at 30 September 2015, based on the quoted market price at that date, was £28,022,000 (30 September 2014: £27,665,000, 31 March 2015: £27,720,000). The fair value of the ZDP shares is classified as level 1 under the hierarchy of fair value measurements.

7.       Share capital

The Company has one class of share which carries no right to fixed income. The authorised share capital of the Company is one ordinary share issued at £1. On 2 September 2012, the Company issued one ordinary share at par value.

8.       Controlling and related parties

The Company is wholly owned by Picton Property Income Limited (the “Parent”), a Guernsey registered company. The Parent is therefore the immediate and ultimate controlling party.

On 12 September 2012, the Parent entered a Contribution Agreement with the Company to provide an undertaking to pay any costs and expenses incurred in respect of the operation and continuation of the Company’s business. As at 30 September 2015, the Parent owed £5,620,000 to the Company under the Contribution Agreement (30 September 2014: £3,605,000, 31 March 2015: £4,598,000).

The Company also entered into a non-interest bearing Loan Agreement with the Parent dated 12 September 2012. As at 30 September 2015, the Parent owed £21,271,000 to the Company under the Loan Agreement (30 September 2014 and 31 March 2015: £21,271,000).

Picton Capital Limited, a fellow subsidiary of the Parent, was paid administration expenses in the period of £5,000 by the Company. As at 30 September 2015, the Company owed £2,500 to Picton Capital Limited.

The Directors are all directors of the Parent and received no remuneration for their services to the Company during the period.

9.       Events after the reporting date

There are no subsequent events requiring disclosure in these financial statements.