Financial Statements
Strategic Report
Governance
Additional Information
18. Loans and borrowings
2023 £000
2022 £000
Maturity
Current Aviva facility
1,433
– –
1,372
(304)
Capitalised finance costs
(304)
1,129
1,068
Non-current Canada Life facility
129,045 82,089 11,900 221,635 222,764 (1,399)
24 July 2031 24 July 2032 26 May 2025
129,045 83,518
Aviva facility
NatWest revolving credit facility Capitalised finance costs
4,900 (1,699)
–
215,764
216,832 The following table provides a reconciliation of the movement in loans and borrowings to cash flows arising from financing activities.
2023 £000
2022 £000
216,832
Balance at start of year
163,655
Changes from financing cash flows Proceeds from loans and borrowings Repayment of loans and borrowings
12,000 (6,368)
79,545 (26,917)
(183)
Financing costs paid
(419)
5,449
52,209
Other changes Amortisation of financing costs Change in accrued financing costs
304 179 483
967
1
968
Balance as at 31 March
222,764
216,832
The Group has a £129.0 million loan facility with Canada Life which matures in July 2031. Interest is fixed at 3.25% per annum over the remaining life of the loan. The loan agreement has a loan to value covenant of 65% and an interest cover test of 1.75. The loan is secured over the Group’s properties held by Picton No 2 Limited Partnership and Picton UK Real Estate Trust (Property) No 2 Limited, valued at £353.2 million (2022: £415.2 million). In the prior year a debt prepayment fee of £4.0 million was incurred to reset the interest rate on the Canada Life facility. Additionally, the Group has a £95.3 million term loan facility with Aviva Commercial Finance Limited which matures in July 2032. The loan is for a term of 20 years and was fully drawn on 24 July 2012 with approximately one-third repayable over the life of the loan in accordance with a scheduled amortisation profile. The Group has repaid £1.4 million in the year (2022: £1.3 million). Interest on the loan is fixed at 4.38% per annum over the life of the loan. The facility has a loan to value covenant of 65% and a debt service cover ratio of 1.4. The facility is secured over the Group’s properties held by Picton No 3 Limited Partnership and Picton Property No 3 Limited, valued at £193.6 million (2022: £208.1 million). The Group also has a £50 million revolving credit facility (‘RCF’) with National Westminster Bank Plc which matures in May 2025. As at 31 March there was £11.9 million drawn under the facility, interest is charged at 150 basis points over SONIA on drawn balances and there is an undrawn commitment fee of 60 basis points. The facility is secured on properties held by Picton UK Real Estate Trust (Property) Limited, valued at £143.4 million (2022: £163.2 million). The fair value of the drawn loan facilities at 31 March 2023, estimated as the present value of future cash flows discounted at the market rate of interest at that date, was £201.7 million (2022: £225.6 million). The fair value of the drawn loan facilities is classified as Level 2 under the hierarchy of fair value measurements. There were no transfers between levels of the fair value hierarchy during the current or prior years. The weighted average interest rate on the Group’s borrowings as at 31 March 2023 was 3.8% (2022: 3.7%).
Picton Property Income Limited Annual Report 2023
147
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