Financial Statements
Notes to the consolidated financial statements continued for the year ended 31 March 2022 25. Risk management continued
In addition, the Group’s revenue would be adversely affected if a significant number of occupiers were unable to pay rent or its properties could not be rented on favourable terms. Certain significant expenditure associated with investment in real estate (such as external financing costs and maintenance costs) is generally not reduced when circumstances cause a reduction in revenue from properties. By diversifying in regions, sectors, risk categories and occupiers, senior management expects to mitigate the risk profile of the portfolio effectively. The Board continues to oversee the profile of the portfolio to ensure risks are managed. The valuation of the Group’s property assets is subject to changes in market conditions. Such changes are taken to the Consolidated Statement of Comprehensive Income and thus impact on the Group’s net result. A 5% increase or decrease in property values would increase or decrease the Group’s net result by £42.5 million (2021: £34.1 million). Interest rate risk management Interest rate risk arises on interest payable on the revolving credit facility only. The Group’s senior debt facilities have fixed interest rates over the terms of the loans. The amount drawn under the revolving credit facility makes up a small proportion of the overall debt, therefore the Group has limited exposure to interest rate risk on its borrowings and no sensitivity is presented. Interest rate risk The following table sets out the carrying amount, by maturity, of the Group’s financial assets/(liabilities).
Less than 1 year £000
1 to 5 years £000
More than 5 years £000
Total £000
31 March 2022
Floating Cash and cash equivalents Secured loan facilities Fixed Secured loan facilities Obligations under leases
38,547
–
– –
38,547 (4,900)
–
(4,900)
(1,372) (114) (6,127) (206,436) (213,935) (2,707) 37,061 (11,437) (208,619) (182,995) (410) (2,183)
Less than 1 year £000
1 to 5 years £000
More than 5 years £000
Total £000
31 March 2021
Floating Cash and cash equivalents Fixed Secured loan facilities Obligations under leases
23,358
–
–
23,358
(1,314) (107) (5,867) (159,027) (166,208) (1,814) 21,937 (6,246) (160,355) (144,664) (379) (1,328)
Concentration risk As discussed above, all of the Group’s investments are in the UK and therefore the Group is exposed to macroeconomic changes in the UK economy. Furthermore, the Group derives its rental income from around 400 occupiers with the single largest occupier accounting for only 5.0% of the Group’s annual contracted rental income. Currency risk The Group has no exposure to foreign currency risk. 26. Related party transactions The total fees earned during the year by the Non-Executive Directors of the Company amounted to £275,000 (2021: £250,000). As at 31 March 2022, the Group owed £nil to the Non-Executive Directors (2021: £nil). Picton Property Income Limited has no controlling parties. 27. Events after the Balance Sheet date A dividend of £4,774,000 (0.875 pence per share) was approved by the Board on 26 April 2022 and will be paid on 31 May 2022. The Group has completed on the acquisition of one property for £13.7 million.
Picton Property Income Limited Annual Report 2022
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