Financial Statements
Notes to the consolidated financial statements continued for the year ended 31 March 2022 25. Risk management continued At the reporting date the gearing ratios were as follows:
2022 £000
2021 £000
218,835 166,208 895,807 712,471
Total borrowings Gross assets
Gearing ratio (must not exceed 65%) 23.3% The Board of Directors monitors the return on capital as well as the level of dividends to ordinary shareholders. The Group has managed its capital risk by entering into long-term loan arrangements with different maturities, which will enable the Group to manage its borrowings in an orderly manner over the long-term. The Group also has a revolving credit facility 24.4%
which provides greater flexibility in managing the level of borrowings. The Group’s net debt to equity ratio at the reporting date was as follows:
2022 £000
2021 £000
238,677 184,274 (38,547) (23,358) 200,130 160,916 657,130 528,197
Total liabilities
Less: cash and cash equivalents
Net debt
Total equity
Net debt to equity ratio at end of year
0.30
0.30
Credit risk The following tables detail the balances held at the reporting date that may be affected by credit risk:
Held at fair value through profit or loss £000
Financial assets and liabilities at amortised cost £000
Total £000
31 March 2022
Notes
Financial assets Tenant debtors
– – –
4,618 4,618 38,547 38,547 43,165 43,165
15 16
Cash and cash equivalents
Held at fair value through profit or loss £000
Financial assets and liabilities at amortised cost £000
Total £000
31 March 2021
Notes
Financial assets Tenant debtors
15 16
– – –
4,326 4,326 23,358 23,358
Cash and cash equivalents
27,684 27,684 Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group’s exposure to and credit ratings of, its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Tenant debtors consist of a large number of occupiers, spread across diverse industries and geographical areas. Ongoing credit evaluations are performed on the financial condition of tenant debtors and, where appropriate, credit guarantees or rent deposits are acquired. Rent collection is outsourced to managing agents who report regularly on payment performance and provide the Group with intelligence on the continuing financial viability of occupiers. The Group does not have any significant concentration risk whether in terms of credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The credit risk on liquid funds is limited because the counterparties are banks with strong credit ratings assigned by international credit rating agencies.
Picton Property Income Limited Annual Report 2022
136
Powered by FlippingBook