LONDON &
ASSOCIATED
PROPERTIES
ANNUAL REPORT 2023
Contents
Annual General Meeting
26 June 2024
Announcement of half year results to 30 June 2024
Late August 2024
Announcement of annual results for 2024
Late April 2025
OVERVIEW
1 LAP at a glance
2 Chairman and Chief Executive’s review 2023
STRATEGIC REPORT
4 Financial and performance review
9 Principal activities, strategy & business model
9 Risks and uncertainties
10 Bisichi risks and uncertainties
11 Key performance indicators
12 Corporate responsibility
GOVERNANCE
20 Directors & advisors
21 Directors’ report
24 Corporate Governance
26 Governance statement by the Chairman of the remuneration committee
27 Annual remuneration report
32 Remuneration policy summary
34 Audit committee report
36 Directors’ responsibilities statement
37 Independent auditor’s report
FINANCIAL STATEMENTS
44 Consolidated income statement
44 Consolidated statement of comprehensive income
45 Consolidated balance sheet
46 Consolidated statement of changes in shareholders’ equity
47 Consolidated cash flow statement
48 Group accounting policies
55 Notes to the financial statements
84 Five year financial summary
Financial calendar
London & Associated Properties PLC 2023 1
FINANCIAL HIGHLIGHTS
Fully diluted net
assets per equity share IFRS net assets
Properties portfolio
valuation*
33.38p
£48.3m £46.1m
2022: 38.14p 2022: £53.7m 2022: £60.0m
* Includes investment properties, head leases,
assets held for sale and property inventory.
Excludes properties under management.
OVERVIEW
LAP at a glance
OVERVIEW
KEY PROJECTS HIGHLIGHT
Property • Runcorn Manor Park Industrial Estate
• Adlington Court Industrial Estate
• West Ealing development
• Orchard Square, Sheffield
• Runcorn industrial portfolio strong rental growth
• Warrington industrial portfolio strong rental growth
• Residential development – construction to start
Q3 2024
• Interest in shopping centre relinquished during year
Coal
production
• In South Africa, Black Wattle produced 0.81m
metric tonnes of Run of Mine Coal in 2023
(2022: 0.82m metric tonnes)
• The API4 price averaged $120 in 2023
compared to $273 in 2022
• Rail infrastructure constraints impacted export
sales. Due to the lack of rail capacity 134,000
metric tonnes of coal were exported compared
to 262,000 metric tonnes in 2022
• These factors had a material negative impact on
the results for the year
• Measures by local rail operator in place to
improve rail capacity for 2024 and beyond
• Total domestic and export sales of coal were
1.03 million metric tonnes in the year compared
to 1.29 million metric tonnes in 2022
• Climate related risks being addressed for
coal processing operations
KEY PROJECTS
2 London & Associated Properties PLC 2023
I am pleased to present our accounts for the
12 months to 31 December 2023
CONSOLIDATED RESULTS
Our consolidated property portfolio, excluding Orchard Square,
Sheffield (see below) was valued at £46.08 million at 31 December
2023 compared to £45.27 million on a like-for-like basis a year
earlier. This increase in valuation reflects £0.78 million in capital
expenditure as well as a modest valuation increase (including head
leases) of £0.03 million.
Rental income for the Group (excluding sold properties and bad
debt charges) increased by £0.05 million (1.9%) to £2.61 million
(2022: £2.56 million). This result reflects the resilience of our assets;
even in the current high interest rate environment we have achieved
increased rents on many new lettings.
Rental income resilience can also be seen in our occupancy levels,
which were 97.3% at year end (2022: 96.4%). Rent collection levels
have similarly remained strong, with an improved 92% of Q1 2023
rents received to date compared to 90% at the corresponding time
last year.
We continue to monitor our cost base following the outsourcing of
our property management functions and our relocation to smaller
offices. LAP’s overheads were £0.4 million (15%) lower than in
2022.
LAP PROPERTY ACTIVITIES
Industrial
Industrial constitutes 27% of our investment property portfolio by
value.
At Manor Park, Runcorn, our 100,000 sq ft industrial estate,
demand for units remains strong and we have continued to drive
rental growth. Since the year end, we accepted a surrender of a
15,000 sq ft unit that had recently had a rent review and have relet
the unit at a rent some 32% higher. This sets a useful rental tone for
the rest of our units and we continue to seek opportunities to
maximise rental income there.
Similarly, at Warrington our 25,000 sq ft industrial estate, we have
carried out two rent reviews since the year end that have confirmed
the demand for units in this location. We achieved rental uplifts of
55% and 49% over passing rent. We remain optimistic about
demand at both these locations.
Essential Community Retail
Essential community retail constitutes 73% of our investment
property portfolio by value.
The remainder of our portfolio has performed well and remains
close to fully let. We continue to monitor each property’s
performance closely and will look to dispose of any properties that
we consider to be ex-growth or where we identify a special buyer.
West Ealing
As previously reported, we obtained a resolution to grant planning
consent for 56 flats and four retail units at the end of 2020. During
2023, we have been finalising detailed designs for the project and
working with contractors and designers to improve building
efficiency and maximise potential returns. Currently we are in
detailed negotiations to finance construction of this development
and intend to commence work in Q3 2024, targeting apartments
available for sale in Q1 2026.
Purley
We have also worked with the same joint venture partner to acquire
options on six semi-detached houses with large gardens in Purley,
London. A planning application submitted in 2022 for 44 flats and 4
town houses was rejected in January 2023 despite being
recommended for approval by the planning officer. Our appeal,
although we won on design and construction matters, was
ultimately unsuccessful and we are currently considering whether to
submit a new application.
DEBT MANAGEMENT
In September 2023 the £12.7 million loan with QSix on Orchard
Square (in Sheffield) expired. The borrower on this loan is Orchard
Square Limited, our 100% owned subsidiary, and the loan is secured
solely against the asset itself with no recourse to the LAP Group. In
May 2023, we instructed agents to sell Orchard Square in order to
repay the loan. The decision to sell was taken as the lending market
for shopping centres was too weak to support a debt refinancing.
Several offers were received for the centre and heads of terms
reached with one buyer, who was then unable to complete. Since
the loan expired, we have been working collaboratively with QSix in
an arrangement whereby LAP continues to manage the centre on
their behalf, pending another approach to the investment market as
and when sentiment improves; QSix controls the timing of the sale
and approves asset management initiatives. Consequently, we have
written off our investment in Orchard Square and have recognised
in the accounts the maximum loss we can incur (£1.93 million).
Orchard Square Limited is no longer consolidated within the LAP
Group and the loan is not shown in our year end balance sheet. This
is discussed further in note 6 to the accounts.
Our £13.6 million 5-year term loan with QIB (UK) PLC is fully
compliant and secured against a portfolio of retail and industrial
properties. The interest rate on the loan with QIB is at the Bank of
England base rate + 3.95% and there is no amortisation.
DRAGON RETAIL PROPERTIES
Since 2001, Dragon has owned a property in Clifton, Bristol let
partly to Boots the Chemist and partly to Lizard Lounge, one of
Bristol’s best-known nightclubs. Dragon’s loan of £0.95 million from
Santander originally expired in September 2020, but has been
extended to July 2024 and paid down to £0.8 million subsequent to
the year end. Santander has indicated that it is willing to provide a
new term loan, has recently completed a valuation, and we expect
to complete this in the near future.
STRATEGIC
REPORT
STRATEGIC REPORT
Chairman and Chief Executive’s
review 2023
London & Associated Properties PLC 2023 3
STRATEGIC REPORT Chairman and Chief Executive’s review 2023
BISICHI PLC
For 2023, Bisichi plc, our 41.6% owned subsidiary, made a profit
before interest, tax, depreciation and amortisation (EBITDA) of £3.4
million (2022: £40 million) and an operating profit before
depreciation, fair value adjustments and exchange movements
(Adjusted EBITDA) of £2.6 million (2022: £39.4 million).
During 2022, Bisichi benefited from significantly higher prices of
Free on Board (FOB) coal from Richards Bay Coal Terminal (API4
price). However, during 2023, the weekly API4 price averaged only
US$120 compared to US$273 in 2022. In addition to the weaker
international coal price, constraints on transporting coal for export
on the South African rail network, which were largely beyond
Bisichi’s control, significantly impacted export sales during the
period. Due to the lack of available rail capacity, Bisichi only
exported 134,000 metric tonnes in 2023, roughly half the 262,000
metric tonnes sold in 2022 and an even lower percentage of the
320,000 metric tonnes exported in 2021.
Limited rail capacity in turn had a further impact on earnings during
the period, as coal allocated for export was eventually sold into the
domestic market at prices that were significantly lower than the
export price achievable by rail through Richards Bay. Transnet, the
South African state rail operator, and the wider South African coal
industry are working hard and collectively to implement measures to
increase rail capacity. Bisichi is pleased to report that in 2024, to
date, there has been an improved performance in railed coal export
volumes compared to the same period in 2023.
Bisichi remains optimistic that the measures, once fully
implemented, will have a significantly positive impact on both the
export and domestic prices achievable for its coal.
At Black Wattle, Bisichi’s South African coal mining operation,
difficult mining conditions impacted profitability during the period.
During the year, Bisichi achieved production of 354,000 metric
tonnes (2022: 301,000 metric tonnes) in the first half of the year
and 453,000 metric tonnes (2022: 523,000) in the second half of
the year. For the majority of 2023, geological issues reduced
production from the opencast mining area as well as increasing
related mining and blasting costs. In order to mitigate these issues,
the mine opened a lower cost second mining area in the third
quarter of 2023. Since the commencement of this new mining area,
Bisichi has seen a significant improvement in mining production and
lower operating costs and expects the improved performance at
Black Wattle to continue throughout 2024.
The lower coal production levels at Black Wattle in 2023 had a
knock-on effect on overall levels of coal processed at Sisonke Coal
Processing. Bisichi sold 1.031 million metric tonnes during the year
compared to 1.287 million metric tonnes in 2022. The decrease in
Bisichi’s mining revenue during the period to £49.3 million (2022:
£95.1 million) can mainly be attributed to the lower prices
achievable for coal and the lower overall quantity of coal sold,
particularly into the export market. Looking forward into 2024,
Bisichi is expected to continue to see the benefits, both in terms of
mining cost and production, from the new mining area at Black
Wattle.
Bisichi continues to work closely with Vunani Mining, its Black
Economic Empowerment (BEE) partner in Black Wattle and Sisonke
Coal processing, to be responsible stewards of its legacy coal
operations, taking into account the climate related risks outlined in
our climate report and the impact these risks may have on all our
stakeholders.
We are pleased to include in our annual report our climate change
report on page 12. Bisichi’s operations contribute over 97% of our
CO
2
emissions and are the operations on which we have focused in
this report. Bisichi recognises that climate change represents one of
the most significant challenges facing the world today and supports
the goals of the Paris Agreement and the UN Framework
Convention on Climate Change.
While we remain confident in Bisichi’s ability to achieve significant
value from its South African operations, the Company is committed
to diversifying its future business activities into areas other than
coal. Bisichi is continually looking at alternative independent mining
and renewable energy related opportunities, as well as new
opportunities to add to the existing UK property investment
portfolios.
In the UK, Bisichi saw its rental revenue from its retail property
portfolio improve during 2023. Overall, Bisichi billed revenue from
its directly owned property portfolio of £1.3 million (2022: £1.1
million) during the year. In light of the challenging year, the directors
of Bisichi recommended a final dividend of 4p (2022: 12p, including
special dividend) per share, of which LAP would receive £0.2 million.
This would take the total dividends per share for the year to 7p
(2022: 22p) if approved by its shareholders.
Finally, we would like to thank employees, advisers and stakeholders
for their ongoing efforts and support.
John Heller,
Chairman and Chief Executive
29 April 2024
4 London & Associated Properties PLC 2023
The financial statements for 2023 have been
prepared to reflect the requirements of IFRS 10. This
means that the accounts of Bisichi PLC (a London
Stock Exchange main market quoted company – BISI)
(“Bisichi”), have been consolidated with those of LAP.
Bisichi continues to operate as a fully independent company and
currently LAP owns only 41.6% of the issued ordinary share capital.
However, because related parties also have shareholdings in Bisichi
and there is a wide disposition of other shareholdings, LAP is
deemed under IFRS 10, to have effective control of Bisichi for
accounting purposes. This treatment means that the income and net
assets of Bisichi are disclosed in full and the value attributable to the
“non-controlling interest” (58.4%) is shown separately in the equity
section as a non-controlling interest. There is no impact on the net
assets attributable to LAP shareholders.
Dragon Retail Properties Limited (“Dragon”) and West Ealing
Projects Limited (“West Ealing”), are both 50:50 joint ventures with
Bisichi and are also consolidated. Another joint venture,
Development Physics Limited (“DPL”) is owned 33% each by LAP,
Bisichi and a third party. This too is consolidated.
Shareholders are aware that LAP is a property business with a
significant investment in a listed mining company.
The effect of consolidating the results, assets and liabilities of the
property business and the mining company makes the figures
complex and less transparent. Property company accounts are already
subject to significant volatility as valuations of property assets as well
as derivative liabilities can be subject to major movements based on
market sentiment. Most of these changes, though, have little or no
effect on the cash position and it is, of course, self-evident that cash
flow is the most important factor influencing the success of a
property business. We explain the factors affecting the property
business first, clearly separating these from factors affecting the
mining business which we do not manage. Comments about Bisichi
(the mining business) are based on information provided by the
independent management of that company.
This report comments on the performance of each of the Group’s
segments separately.
LONDON & ASSOCIATED PROPERTIES PLC
We own industrial and community retail property and invest in and
seek to develop housing for local communities. Our key objective is
to ensure that we offer safe and secure environments in which
people can live, work and visit.
LAP’s core objectives in 2023 have continued to be:
• Provide environments in which tenants can thrive.
• Continually improve the business’ operating cashflow.
• Reduce exposure to the fashion led or shopping centre
retail sector.
• Ensure gearing is at an appropriate level.
• Maintain sufficient cash in the business to be able to take
advantage of opportunities as they arise.
Rental Income and Occupancy
As at 19 April 2024 Q1 2024 collections were 92% (2023: 90%).
We continue to engage with occupiers to ensure our properties
contain a diversified mix of tenants to match customers’ evolving
requirements. This is particularly applicable to our essential retail
assets, that serve local communities.
Like for like net rental income was up by £49,000 (1.9%), which
particularly reflects rent increases being achieved at lease events
within our industrial portfolio.
Like for like gross rental income excluding sales was up £50,000 as
shown below. There was £196,000 of net increases in rents from lease
reviews, renewals and new lettings and a net decrease of £146,000
from rent lost due to expiries and subsequent vacant periods.
Gross Rental Income (£'000)
Void levels decreased to 2.7% (2023: 3.6%). Void levels remain low
across the portfolio.
Property Investment Activities
There were no property disposals or acquisitions during 2023, apart
from the relinquishing of our interest in Orchard Square Limited as
described below and in note 19.
LAP continues to look for investment opportunities, particularly
within the industrial sector.
LAP also continues to develop and refurbish all its properties as
appropriate to provide environments in which tenants can thrive.
Our joint venture residential developments are discussed later in
this review.
Funding & Refinancing Activities
No loans were repaid, or new loans or other forms of finance taken
out in 2023.
Our 5-year, £13.6m term loan with QIB taken out in 2022 was
covenant compliant throughout the year.
During the year our term loan with Phoenix CRE S.à.r.l of £12.7 million
became due. This loan is secured on a single property, Orchard Square,
Sheffield, which is fully owned by Orchard Square Limited, a subsidiary
of LAP. The loan is non-recourse to the rest of the LAP Group. The
property was marketed for sale in 2023 with an agreement for sale
being reached with a buyer who was then unable to complete. LAP is
working collaboratively with and under the direction of the lender to
manage the property, completing key asset management activities
prior to remarketing the property for sale when sentiment improves.
2022
5,337
4,542
Sales
(845)
Leasing
196
Expiries
(146)
50
{
2023
STRATEGIC
REPORT
Financial and performance review
London & Associated Properties PLC 2023 5
STRATEGIC REPORTSTRATEGIC REPORT Financial and performance review
EBITDA
2023
£’000
2022
£’000
Operating (loss)/profit (281) (3,042)
Excluding non-cash items:
Depreciation & amortisation 266 265
Impairment of Inventory - 3,098
EBITDA (15) 321
Income from subsidiaries:
Management fees 236 236
Dividend income 666 711
Adjusted EBITDA 887 1,268
INCOME STATEMENT
BUSINESS ANALYSIS
2023
£’000
2022
£’000
Rental income 3,323 4,175
Service charge income 451 788
Management income from third party properties 18 18
LAP Revenue 3,792 4,981
Direct property costs (1,553) (1,994)
Impairment of inventory - (3,098)
Overheads (2,254) (2,665)
Depreciation (266) (265)
Operating (loss)/profit (281) (3,041)
Finance income 110 24
Finance expenses (2,094) (2,120)
Result before valuation movements (2,265) (5,137)
Other segment items
Net decrease on revaluation of investment properties (150) (5)
Loss on disposal of subsidiary (1,930) -
(Loss)/profit on disposal of investment properties - (83)
Profit/(loss) on disposal of fixed assets 4 36
Adjustment to interest rate derivative - 70
Revaluation and other movements (2,076) 18
LAP loss for the year before taxation (4,341) (5,119)
Note: The figures exclude inter-company transactions.
The above figures for LAP and commentary below exclude the cash
items of management fee income from Bisichi and Dragon of
£236,000 (2022: £236,000) and dividend income from Bisichi of
£666,000 (2022: £711,000).
The non-cash item, loss on disposal relates to our decision not to
cure the breach of Orchard Square Limited’s loan covenants and the
subsequent loss of control as prescribed by IFRS10.
We have again managed to reduce our overheads this year, even
after adjusting for one off £0.2 million loan refinance charges in
2022, despite significant cost inflation.
LAP generated an adjusted EBITDA of £0.9 million (2022: £1.3
million).
As LAP has declined the opportunity to repay the loan and cure the
breach arising as a result, LAP has effectively lost control of the
asset. LAP no longer has exposure, or rights, to variable returns from
its involvement with Orchard Square Limited. In accordance with
IFRS10, the investment in Orchard Square Limited has been treated
as having been relinquished during the year and neither the loan nor
the asset is shown in the accounts at 31 December 2023.
Further details can be found in note 19 to the accounts.
The loan relating to our development joint venture is discussed later
in this review.
LAP generates the majority of its income from property rentals,
property management fees and development activities.
Whilst there are increased interest costs on our unhedged loans
during the year directly arising from increases in the Bank of England
base rate, due to the removal of Orchard Square Limited in July 2023,
total interest costs year on year are slightly lower. Excluding Orchard
Square Limited, interest costs are £1.34 million (2022: £1.14 million)
Investment property valuation reductions of £0.15 million (2022:
£nil) arose from a decrease in retail property values of £0.08 million
(2022: £0.1 million) and a decrease in industrial property values of
£0.07 million (2022: increase £0.1 million). Our retail assets entirely
consisting of essential retail, are relatively high yielding, have low
vacancy rates and are not as affected as other asset classes by recent
increases in interest rates. This further strengthens our view that the
market is differentiating between local essential retail investments
and shopping centre or fashion focused retail investments.
Whilst our industrial assets are lower yielding and have seen their yields
more affected by rises in interest rates, this has been offset by several
pleasing rent increases following lease events at these properties.
Producing a profit through ongoing asset management activities to
generate further rental income, investing cash currently on deposit at
the appropriate time into new property investments combined with
generating returns from our existing investments, including Bisichi,
remains the key focus of the business for the future.
6 London & Associated Properties PLC 2023
STRATEGIC REPORT Financial and performance review
BALANCE SHEET
SEGMENT ASSETS
2023
£’000
2022
£’000
Non-current assets – property 23,801 28,386
Non-current assets – property, plant & equipment 268 543
Trading assets 8,889 22,862
Assets held for sale 545 -
Cash & cash equivalents 3,799 4,685
Current assets – others 1,237 1,328
Total assets excluding investment in joint ventures 38,539 53,915
Segment liabilities
Borrowings (17,650) (30,306)
Current liabilities (3,238) (4,253)
Non-current liabilities (1,272) (1,375)
Total liabilities (22,160) (35,934)
Net assets 16,379 17,981
Note: The figures exclude inter-company transactions between LAP, Bisichi and Dragon.
Total assets, consisting mainly of trading and investment properties,
have reduced from £53.9 million to £38.6million, with the disposal
of the Sheffield trading property held at £14.75 million.
Property, plant and equipment reduced by £0.3 million in the year
due to depreciating right of use asset that represents the lease of
our head office. The lease comes to an end in November 2024 at
which point the asset will be fully depreciated. The present value of
future rentals of £0.2 million is included within liabilities.
Total liabilities, consisting mainly of bank loans, have reduced from
£35.9 million to £22.0 million following the removal of the Sheffield
trading property and its associated bank loan of £12.6 million.
LAP’s main borrowings consist of a £13.6 million term loan facility
expiring in August 2027 and a rolling development loan relating to
West Ealing of £4.4 million that expires in April 2024. As in previous
years, all loans are secured on core property and are covenant
compliant at the year end.
GEARING
2023
£’000
2022
£’000
Total borrowings 17,650 30,306
Less cash and cash equivalents (3,799) (4,685)
Net borrowings 13,851 25,621
Total Equity 16,545 17,981
83.7% 142.5%
The business has not set a target gearing level but monitors its debt and asset values constantly to maintain an appropriate level,
considering market sentiment, the availability and cost of debt and cash flow forecasts.
CASH FLOW
CASH FLOW FROM OPERATIONS
2023
£’000
2022
£’000
Cash inflows/(outflows) from operating activities 1,121 (723)
Cash inflows from investing activities 641 3,458
Cash outflows from financing activities (2,648) (3,523)
Net decrease in cash and cash equivalents (886) (788)
Cash and cash equivalents at 1 January 4,685 5,473
Cash and cash equivalents at 31 December 3,799 4,685
Note: The figures within the LAP cashflow include inter-company transactions such as management fee income of £236,000 (2022: £236,000) and dividends
from Bisichi of £977,000 (2022: £711,000).
Cash outflows from operating activities include expenditure on
development properties of £0.8 million (2022: £0.7 million).
Excluding this expenditure, adjusted cash inflows from operating
expenditure were £1.9 million (2022: £Nil).
Investing activities include net cash from property acquisitions and
sales of £nil (2022: income of £2.6 million), along with dividend
income from Bisichi of £0.7 million (2022: £0.7 million).
Financing activities in 2023 include net loan repayments of £0.3
million (2022: 1.2 million) and interest payments on the servicing of
debt of £2.3 million (2022: £2.3 million). Bank of England interest
rate increases during the year resulted in a £0.5 million increase in
interest payable compared to 2022, whilst the exclusion of Orchard
Square and its loan from the consolidated results in July 2023
reduced interest payable by £0.5 million. Interest rate risk is
discussed further in note 22.
WEST EALING PROJECTS LIMITED
West Ealing is a 50:50 joint venture between LAP and Bisichi
created with the purpose of delivering a primarily residential
development in West Ealing, London. The joint venture owns 90%
of the property which is under development and on which £8.9
million has been spent to date (2022: £8.1 million), West Ealing is
disclosed within LAP in the segmental analysis in note 1 to the
financial statements. There is a linked development loan of £4.4
million (2022: £4.4 million), described further in note 19. Planning
permission is held for the creation of 56 new residential apartments
and ground floor shops on the site. Construction start is planned for
Q3 2024.
London & Associated Properties PLC 2023 7
STRATEGIC REPORT Financial and performance review
DEVELOPMENT PHYSICS LIMITED
Development Physics is a joint venture between LAP, Bisichi and
Metroprop Real Estate, owned equally by the three parties, set up,
with the purpose of delivering a residential development of 44 flats
and 4 town houses in Purley, London. Development Physics
acquired a series of options on the site and is progressing through
the planning process for its development. £0.5 million (2022: £0.3
million) has been spent to date on the development.
BISICHI PLC
Although the results of Bisichi PLC have been consolidated in these
financial statements, LAP has no direct influence over the
management of Bisichi. The comments below are based on the
published accounts of Bisichi.
The Bisichi group results are stated in full in its published 2023
financial statements which are available on its website
www.bisichi.co.uk.
Bisichi has two core revenue streams – investment in retail property
in the UK and coal mining in South Africa.
2023 was a difficult year for Bisichi’s South African coal mining and
processing operations. Lower export coal prices and sales volumes of
export coal significantly impacted their profitability. With more stability
in the coal market going into 2024, Bisichi management will be focusing
on improving production levels and keeping operating costs low.
The Bisichi group’s profit before tax was £0.8 million (2022: £38.3
million). In South Africa, Black Wattle produced 0.80m metric tonnes
of Run of Mine Coal in 2023 (2022: 0.82m metric tonnes).
Geological issues in areas mined at Black Wattle, Bisichi’s South
African mining operation, had a significant impact on production,
particularly in the first half of 2023. During the second half of the
year exports continued to be limited by constraints in transporting
coal for export on the South African rail network. During the year
1.03 million metric tonnes of coal were sold compared to 1.29
million metric tonnes in 2022. Of this, 0.13 million metric tonnes
were export sales (2022: 0.26 metric tonnes) and 0.90 million
metric tonnes were domestic sales (2022: 1.03 million metric
tonnes) The API4 price averaged $120 in 2023 compared to $273
in 2022. The stabilisation of global energy markets in 2023,
compared to 2022, had a significant impact on prices achievable for
coal over the year.
UK retail property investments were valued at the year end at
£10.610 million (2022: £10.465 million). The property portfolio is
actively managed by LAP and generated rental income of £1.26
million in the year (2022: £1.11 million).
During the year Bisichi’s total non-current and current listed equity
related investments held at fair value through profit and loss
increased to £15.0 million (2022: £13.5 million). The Group
achieved dividend income from investments during the period of
£0.56 million (2022: £0.59 million) and a gain in value from
investments of £0.8 million (2022: £1.0 million). The Group’s listed
equity related investment portfolios comprise primarily listed
equities and listed equity related funds involved or invested in
extractive and energy related business activities, including entities
involved in the extraction of commodities needed for the clean
energy transition.
Bisichi has a structured trade finance facility with Absa Bank Limited
for R85 million held by Sisonke Coal Processing (Pty) Limited, a
100% subsidiary of Black Wattle Colliery (Pty) Limited. This facility
comprises an R85 million revolving facility to cover the working
capital requirements of Bisichi’s South African operations. The
facility is renewable annually and is secured against inventory,
debtors and cash that are held in Bisichi’s South African operations.
Bisichi holds a 5-year term facility of £3.9 million with Julian Hodge
Bank Limited at an initial LTV of 40%, with the loan being secured
against the company’s UK retail property portfolio. The amount
repayable on the loan at year end was £3.9 million (2022: £3.8
million). The debt package has a five-year term and is repayable at
the end of the term in December 2024. The interest cost of the loan
is 4.00% above Bank of England base rate. The loan is secured by
way of a first charge over the investment properties in the UK which
are included in the financial statements at a value of £10.6 million.
No banking covenants were breached by Bisichi during the year.
Bisichi’s cash and cash equivalents decreased during the year by
£7.8million (2022: increase of £6.9million). The net balance of cash
and cash equivalents (including bank overdrafts) at year end was a
cash negative amount of £0.3 million (2022: positive net cash of
£7.4 million).
Bisichi has considerable financial resources available at short notice
including cash and cash equivalents (excluding bank overdrafts) of
£3.2 million (2022: £10.6 million) and listed investments of £15.0
million (2022: £13.5 million) as at year end. The above financial
resources total £18.2 million (2022: £24.1 million).
Bisichi’s net assets at 31st December 2023 were £33.6 million
(2022: £35.6 million).
Bisichi recognises the need, and is committed to, diversifying its
future business activities. Bisichi is continually looking at alternative
mining, commodity and renewable energy related opportunities, as
well as new opportunities to add to their existing UK property
investment portfolios. In the interim, Bisichi continue to work
closely with Vunani Mining, their BEE partner in Black Wattle and
Sisonke Coal processing, in being responsible stewards of their
legacy coal operations taking into account the climate-related risks
outlined in Bisichi’s climate report in their 2023 report and accounts
and the impact these risks may have on all stakeholders.
DRAGON RETAIL PROPERTIES LIMITED
Dragon is a UK property investment company, owned 50:50 by LAP
and Bisichi. The company has a Santander bank loan of £0.95
million secured against its investment property, which is covenant
compliant, see note 19.
The loan originally expired in October 2020 but has been extended
to July 2024 and we are negotiating a new longer term loan with
the existing lender.
Dragon incurred management fees of £72,000 (2022: £72,000)
split equally between the two joint venture partners. Dragon has
net assets of £1.2 million (2022: £1.2 million). Dragon continues to
trade at near break-even, excluding property revaluations.
ACCOUNTING JUDGEMENTS AND GOING
CONCERN
The most significant judgements made in preparing these accounts
relate to the carrying value of the properties and investments. The
Group uses external property valuers to determine the fair value of
most of its properties.
Under IFRS10 the Group has included Bisichi PLC in the consolidated
accounts, as it is deemed to be under the effective control of LAP and
has therefore been treated as a subsidiary. The directors of Bisichi
consider their judgements and estimates surrounding the life of the
mine and its reserves to have significant effect on the amounts
recognised in the financial statements and to be an area where the
financial statements are subject to significant estimation uncertainty.
The life of mine remaining is currently estimated at 7 years.
The Directors exercise their commercial judgement when reviewing
the Group’s cash flow forecasts and the underlying assumptions on
which the forecasts are based. The Group’s business activities,
together with the factors likely to affect its future development, are
set out in the Chairman’s Statement and Chief Executive’s Review
and in this Report. Further disclosure of specific factors affecting
going concern are discussed in more detail in the going concern
section of the group accounting policies section of the financial
statements. In addition, the Directors consider that Note 22 to the
financial statements sets out the Group’s objectives, policies and
processes for managing its capital; its financial risk management
objectives; details of its financial instruments and hedging activities;
8 London & Associated Properties PLC 2023
STRATEGIC REPORT Financial and performance review
and its exposure to credit risk, liquidity risk and other risks.
STATEMENT REGARDING SECTION 172 OF THE
UK COMPANIES ACT
Section 172 of the UK Companies Act requires the Board to report
on how the directors have had regard to the matters outlined below
in performing their duties. During the year, the Directors consider
that they have acted in a way, and have made decisions that would
most likely promote the success of the Group for the benefit of its
members as a whole as outlined in the matters below:
• The likely consequences of any decision in the long term: see
Principal Activity, Strategy & Business Model and Risks and
Uncertainties on pages 9 to 10;
• The interests of the Group’s employees; ethics and compliance;
fostering of the Company’s business relationships with suppliers,
customers and others; and the impact of the Group’s operations
on the community and environment: see Corporate Responsibility
and Sustainability reports on pages 12 to 19;
• The need to act fairly between members of the Company: see the
Corporate Responsibility section on pages 13 to 22;
• The desirability of maintaining a reputation for high standards of
business conduct: see the Corporate Governance section on
pages 27 to 28.
GOING CONCERN
LAP
In reviewing going concern it is necessary to consider separately the
position of LAP Group and Bisichi. Although both are consolidated
into group accounts (as required by IFRS 10), they are managed
independently and in the unlikely event that Bisichi was unable to
continue trading this would not affect the ability of LAP Group to
continue operating as a going concern. The same would be true for
Bisichi in reverse.
The directors have reviewed the cash flow forecasts of the LAP
Group and the underlying assumptions on which they are based for
the 15 months from the date of signing. The LAP Group’s business
activities, together with the factors likely to affect its future
development, are set out in the Chairman and Chief Executive’s
Statement and Financial Review. In addition, Note 22 to the
financial statements sets out the Group’s objectives, policies and
processes for managing its capital; its financial risk management
objectives; details of its financial instruments and hedging activities;
and its exposure to credit risk and liquidity risk.
Directors assess the longer term prospects of the business over a
four year time horizon as covered by the Group’s annual rolling
four-year strategic financial plan. This is considered to be the
optimum balance between our need to plan for the long term,
recognising that property investment is a long-term business, and
the progressively unreliable nature of forecasting in later years.
Geo-political events in Ukraine and the Middle East are no longer
significantly impacting global energy prices. Although the outcome
of these events is uncertain, the Directors at present do not foresee
the events having a significant negative impact on the Group’s UK
and South African operations’ ability to remain in operation for the
foreseeable future.
Bisichi
Detailed budget and cash flow forecasts for Bisichi’s operations
demonstrate that Bisichi has sufficient resources to meet its
liabilities as they fall due for at least the next 12 months and that
Bisichi will be able to manage its business risks and have adequate
cash resources to continue in operational existence for the
foreseeable future. Further details can be found in the Bisichi plc
2023 Financial Statements which are available on their web site:
www.bisichi.co.uk.
Overall position
With a quality property portfolio comprising tenants with a mix of
short and long leases supported by suitable financial arrangements,
the Directors believe that the group property operations (including
Bisichi and Dragon) are well placed to address the current business
risks successfully. The mining operations too, as a key industry in
South Africa, have a positive future. It is also relevant that LAP
would be able to continue as a viable business if Bisichi were to face
unexpected problems as there are no cross guarantees and LAP is
not dependent on the income from Bisichi.
Having made enquiries and having considered the principal risks
facing the Group, including liquidity and solvency risks, and material
uncertainties, the Directors have a reasonable expectation that the
Group and the Company have adequate resources to continue in
operational existence for the foreseeable future. Thus, they
continue to adopt the going concern basis of accounting in
preparing the annual financial statements.
TAXATION
The LAP Group tax strategy is to account for tax on an accurate and
timely basis. We only structure our affairs based on sound
commercial principles and wish to maintain a low tax risk position.
We do not engage in aggressive tax planning.
The LAP Group (excluding Bisichi and Dragon) has unused tax losses
and deductions with a potential value of £12.3 million (2022: £11.6
million). As LAP returns to profit, these tax losses and deductions
should be utilised.
DIVIDENDS AND FUTURE PROSPECTS
Due to the current economic uncertainties, the LAP Board has
agreed that it will not be recommending a dividend for the financial
year ending 31 December 2023 (2022: £nil).
Looking forwards to medium term trading, we intend to pursue our
previously stated strategies. These include investing in both our
essential community retail properties which have inbuilt defensive
qualities and industrial property where we have enjoyed success.
We will recycle properties where we feel asset management
opportunities are limited and are prepared to enter into negotiations
with parties that have approached us to explore disposals or joint
ventures to redevelop certain assets within our portfolio. A number
of these negotiations are ongoing although we are not yet able to
say if any will come to fruition.
Our development in Ealing has received planning consent and
construction work is due to commence shortly, with completed
apartments being available to purchase in Q1 2026.
We will continue to consider further joint venture opportunities to
undertake residential development.
Bisichi
In the first quarter of the 2024, Bisichi have seen improved
production from Black Wattle, their coal mining operation. Coal
prices have stabilised and the availability of rail for export has
improved for the year to date in comparison to 2023. In light of this,
Bisichi management will be focusing on sustaining production levels,
maintaining a diversified sales market and keeping operating costs
low.
Bisichi continues to seek and evaluate opportunities to transition
into alternative mining, commodity and renewable energy related
opportunities through new commercial arrangements.
London & Associated Properties PLC 2023 9
STRATEGIC REPORTSTRATEGIC REPORT
Principal activities, strategy & business model
The LAP Group’s principal business model is the investment in and management and development of industrial and retail property through
direct investment and joint ventures.
The principal activity of Bisichi PLC is coal mining and coal processing in South Africa. Further information is available in its 2023 Financial
Statements which are available on their web site: www.bisichi.co.uk
STRATEGIC PRIORITIES ARE OUR STRATEGY IS
Maximising income By achieving an appropriate tenant mix and providing vibrant environments with excellent facilities
we can increase tenant demand for space and enhance income.
Creating quality property We look to improve the tenant experience at all our properties by achieving an appropriate tenant
mix and a vibrant trading environment through investment activity, enhancement, refurbishment
and development.
Capital strength We operate within a prudent and flexible financial structure. Our gearing policy provides financial
stability whilst giving capacity and flexibility to look for further investments.
Maintain the value of
investment in Bisichi
By encouraging the Bisichi management to maximise sustainable profits and cash distributions.
Risks and uncertainties
DESCRIPTION OF RISK DESCRIPTION OF IMPACT MITIGATION
ASSET MANAGEMENT:
Tenant failure Financial loss. Initial and subsequent assessment of tenant covenant
strength combined with an active credit control function.
Leases not renewed Financial loss. Lease expiries regularly reviewed. Experienced teams
with strong tenant and market knowledge who manage
appropriate tenant mix.
Asset liquidity (size and
geographical location)
Assets may be illiquid and affect flexing
of balance sheet.
Regular reporting of current and projected position to
the Board with efficient treasury management.
PEOPLE:
Retention and recruitment of staff Unable to retain and attract the best
people for the key roles.
Nomination Committee and senior staff review
skills gaps and succession planning. Training and
development offered.
REPUTATION:
Business interruption Loss in revenue.
Impact on footfall.
Adverse publicity.
Potential for criminal/civil proceedings.
Documented Recovery Plan in place.
General and terrorism insurance policies in place and
risks monitored by trained security staff.
Health and Safety policies in place.
CCTV in centres.
FINANCING:
Fluctuation in property values Impact on covenants and other loan
agreement obligations.
Secure income flows.
Regular monitoring of LTV and IC covenants and other
obligations.
Focus on quality assets.
Reduced availability of borrowing
facilities
Insufficient funds to meet existing
debts/interest payments and
operational payments.
Efficient treasury management.
Loan facilities extended where possible.
Regular reporting of current and projected position
to the Board.
Loss of cash and deposits Financial loss. Only use a spread of banks and financial institutions
which have a strong credit rating.
Fluctuation of interest rates Uncertainty of interest rate costs. Manage derivative contracts to achieve a balance
between hedging interest rate exposure and
minimising potential cash calls.
10 London & Associated Properties PLC 2023
STRATEGIC REPORTSTRATEGIC REPORT
Bisichi risks and uncertainties
Bisichi (although it is consolidated into group accounts as required by IFRS 10) is managed independently of LAP. The risks outlined below
are an abbreviated summary of the risks reported by the Directors of Bisichi to the shareholders of that Company. Full details are available
in the published accounts of Bisichi (www.bisichi.co.uk).
These risks, although critical to Bisichi, are of less significance to LAP which only has a minority investment of 41.6% in the company. In the
unlikely event that Bisichi was unable to continue trading, it would not affect the ability of LAP to continue operating as a going concern.
DESCRIPTION OF RISK DESCRIPTION OF IMPACT MITIGATION
Coal prices can be impacted materially
by market and currency variations and
geopolitical factors
Affects sales value and therefore
margins.
Bisichi primarily focuses on managing its
underlying production and processing costs
to mitigate coal price volatility as well as
from time to time entering into forward sales
contracts with the goal of preserving future
revenue streams. Bisichi has not entered into
any such contracts in 2022 and 2023.
Bisichi assesses on an ongoing basis the impact
of volatility in global energy markets, economic
volatility and climate change related risks may
have on the Group’s mining operations and
future investment decisions
Mining operations are inherently risky.
Mineral reserves, regulations, licensing,
power availability, health and safety can
all damage operations
Loss of production causing loss of
revenue.
Use of independent geology experts, careful
attention to regulations, health and safety
training, employee dialogue to minimise
controllable risks.
Currency risk Affects realised sales value and
therefore margins.
Regular monitoring and review of forward
currency situation.
Cashflow variation because of mining risks,
commodity price or currency variations
Variations can deliver significant
shifts in cash flow.
UK property investments used to offset high
risk mining operations.
Socio-economic, political instability &
regulatory environment risk
The Bisichi Group is exposed
to a wide range of political,
economic, regulatory, social and
tax environments, particularly in
South Africa.
Bisichi’s assets and investments are diversified
across various countries which reduces its
exposure to any particular country. Its Board
regularly assesses the political and socio-
economic environment and related risks of the
countries it operates and invests in.
There has been no change in the risks faced by either LAP or Bisichi.
London & Associated Properties PLC 2023 11
STRATEGIC REPORT
Key performance indicators
The Group’s Key Performance Indicators are selected to ensure clear alignment between its strategy and shareholder interests.
The KPIs are calculated using data from management reporting systems.
STRATEGIC PRIORITY KPI PERFORMANCE
MAXIMISING INCOME – LIKE FOR LIKE PROPERTY INCOME
To increase the like-for-
like income from each
property year on year.
Like-for-like rental income
as a percentage of the
prior year rental.
The like-for-like rental income of the
group by property has increased by
£49,000 (1.9%) (2022: increase of
£15,000 and 0.4%).
In the continuing difficult trading
environment, this is considered
positive.
MAXIMISING INCOME – OCCUPANCY
We aim to maximise
the total income in our
properties by achieving
full occupancy.
The estimated rental value
("ERV") of the empty units
as a percentage of our
total income.
Void levels decreased to 2.7% (2022:
3.6%).
There continue to be minimal voids
across the portfolio which is positive.
CAPITAL STRENGTH – GROWTH IN NET ASSET VALUE PER SHARE
The net assets per
share is the principal
measure used by the
group for monitoring its
performance and is an
indicator of the level of
reserves available for
distribution by way of
dividend.
Movement in the net
assets per share.
The net assets per share decreased
by 4.76 pence per share (12.5%) to
33.38p (2022: 38.14p).
While this is a poor result, it reflects
the impact of a weak lending market
on property valuations.
CHANGE IN LIKE-FOR-LIKE
INCOME*
VOIDS
NET ASSETS PER SHARE
6.0
8.0
9.0
75.0
4.0
50.0
2.0
25.0
0.0
0.0
2021
2021
2022
2022
500
250
0.0
-250
-500
2021 2022
2023
2023
2023
12 London & Associated Properties PLC 2023
STRATEGIC REPORT
Corporate responsibility
SUSTAINABLE DEVELOPMENT
Bisichi’s Black Wattle continues to strive to conduct business in a safe,
environmentally and socially responsible manner. Some highlights of
their Health, Safety and Environment performance during 2023:
• Black Wattle Colliery recorded 2 Lost time Injuries during
2023 (2022: 2).
• One case of Occupational Diseases were recorded.
• One claim for the Compensation for Occupational Diseases
were submitted.
In South Africa, the Broad-Based Socio-Economic Empowerment
Charter for the Mining and Minerals Industry (New Mining Charter)
is a regulatory instrument that facilitates sustainable transformation,
growth and development of the mining industry. Bisichi is committed
to fully complying with the New Mining Charter and providing adequate
resources to this area in order to ensure opportunities are expanded
for historically disadvantaged South Africans (HDSAs) to enter the
mining and minerals industry. In addition, Bisichi continues to adhere
to and make progress in terms of their Social and Labour Plan and
various BEE initiatives. A fuller explanation of these can be found in
Bisichi’s 2023 Financial Statements which are available on their
web site: www.bisichi.co.uk
CLIMATE CHANGE REPORTING
The Group recognises that climate change represents one of the most
significant challenges facing the world today and supports the goals
of the Paris Agreement and the UN Framework Convention on
Climate Change.
Our aim is to:
• minimize our contribution to greenhouse gas emissions;
• to consider and plan for the physical and transitional risks of
climate change on our operations; and
• to work with stakeholders, including local government and
communities, to mitigate the impact of climate-related challenges.
In the current year, the Group has aligned climate disclosures in this
Strategic Report to the four Task force on Climate-related Financial
Disclosure (“TCFD”) recommendations as follows:
TCFD AREA TCFD CONSIDERATION LONDON & ASSOCIATED PROPERTIES PLC & BISICHI PLC
Governance Board’s oversight of climate risk
and opportunities
The LAP & Bisichi Boards have ultimate responsibility for the monitoring and
development of the Groups’ approach to climate risk and opportunities.
In light of the size of the Group, ESG matters are considered as part of the
Group’s regular board meetings and at other appropriate points during the year.
The Board has developed and implemented a Climate Change Policy and monitor
the content, effectiveness and implementation of this Policy on a regular basis.
The Group’s Climate Change Policy can be found on the Group’s website at
www.lap.co.uk.
Short, medium and long term strategic decisions, including those on capital
allocation and portfolio management, are considered by Group management
who make recommendations to the Board. Climate related issues and policy are
included as significant factors for consideration in the decision making process,
both in the management recommendation and in the Board’s consideration of
the relevant issue.
On-going climate related issues are integrated into the Group’s business risk
management process and reporting thereof to the Board and Audit Committee.
The Group has regard to best practice in its area of operations, its health and safety
and environmental obligations and seeks to ensure high standards of business
conduct in its operations. It will review compliance with the TCFD Recommendations
on an ongoing basis, and report on its performance on a yearly basis.
Management’s role in assessing
and managing climate-related
risks and opportunities
Responsibility for the application of this Policy rests with, but is not limited to,
all employees and contractors engaged in relevant activities under the Group’s
operational control. The Group’s managers are responsible for promoting and
ensuring compliance with this Policy and any related individual site-level policies
and practices.
At Bisichi’s South African operations, management have commenced engagement
with key stakeholders in order to ensure awareness of our climate change policy
as well as the potential impact of climate change on our environment and
operations. We continue our collaboration with our contractors on GHG Emission
Reporting and we are actively looking for opportunities to partner with our
stakeholders to drive the uptake of carbon neutral solutions.
For material strategic or financial decisions, the Group may consider procuring
expert advice from third party consultants on the impact in the short, medium
and long term of the decision, and ensure that such information is fully
considered as part of the evaluation of the relevant matter.
London & Associated Properties PLC 2023 13
STRATEGIC REPORT Corporate responsibility
TCFD AREA TCFD CONSIDERATION LONDON & ASSOCIATED PROPERTIES PLC & BISICHI PLC
Strategy Climate-related risks and
opportunities the Group has
identified over the short,
medium, and long run
Bisichi considers the current life of mine of its South African operations to fall
within a short to medium term horizon. Within this horizon, climate change
transition risks may impact their South African coal mining and processing
operations. Risks include:
• coal price and demand volatility;
• availability and cost of financing and third party services such as insurance;
• delays or restrictions to regulatory approvals;
• early retirement of our coal processing and mining operations; and
• Carbon pricing and taxes, that may create additional costs through the
value ch ain.
The Group have assessed physical climate risk profiles produced by the World
Bank, particularly in relation to the South African operations. Bisichi considers
the physical risks of variations in climate over the current life of mine of the
South African operations to be mainly limited to an increased risk of seasonal
flooding that may impact the operating efficiency, costs and revenues of the
mining and processing operations.
In a longer term horizon, and in a scenario where the useful life of Bisichi’s
South African operations is extended, the above short to medium term
transitional risks are expected to continue to apply. In addition, in a scenario,
such as the International Energy Association’s (“IEA”) Pathway to Net Zero by
2050 (“NZE 2050”), where climate policies are effectively implemented that support
a transformation to net zero emissions by 2050 and limiting the rise of global
temperatures to 1.5°C by the end of the century, policies will lead to significant
coal demand decline over the longer term. This in turn will impact the carrying
value and long term viability of Bisichi’s South African coal operations as well as
the stakeholders and communities reliant on our operations. Extreme weather
events, over the long term in South Africa, such as floods, and droughts, as well as
changes in rainfall patterns, temperature, and storm frequency will also affect the
operating efficiency, costs and revenues of the mining and processing operations,
supply chains and impact the communities living close to the operations.
Clean coal research and technology initiatives such as carbon capture may result
in opportunities to increase the useful life of Bisichi’s South African coal mining
and processing operations. In addition, the clean energy transition provides
opportunities for Bisichi to diversify its business activities and equity investment
portfolio into renewable and extractive industries that will benefit from and are
critical to the transition to a clean energy system.
The main sources of scope 1 & 2 Green House Gas (GHG) emissions for the
Group have been associated with the South African coal mining and processing
operations, namely due to fuel combustion and electricity usage. Improvements
in the cost competitiveness of lower emission sources of energy provide
opportunities to lower overall operating costs at our operations as well as
reduce overall GHG Emissions.
In the UK we have identified the following material physical and transitional risks
related to our UK property portfolio:
• Long term physical risk through changes in climate, flood risk and extreme
weather; and
• Short-term transition risk from emerging regulation related to energy
performance (“EPC”) and enhanced disclosures
14 London & Associated Properties PLC 2023
STRATEGIC REPORT Corporate responsibility
TCFD AREA TCFD CONSIDERATION LONDON & ASSOCIATED PROPERTIES PLC & BISICHI PLC
Strategy Impact of climate-related risks
and opportunities on businesses,
strategy, and financial planning
Bisichi’s management have incorporated and regularly review the following
strategies and procedures in relation to their South African coal operations:
• Review of the impact of climate change and the global transition to clean
energy, particularly in relation to the current life of mine of Bisichi’s coal
operations;
• Regular research and analysis of the coal market demand outlook;
• Regular research and analysis on the outlook of the South African coal mining
industry and climate change regulation including mining regulation, energy
procurement and licensing, and carbon taxing;
• Regular communication with financial service providers and suppliers on any
future changes to availability and cost of services.
• Regular research and analysis on the progress of clean coal technology and
related regulatory initiatives; and
• Regular dialogue and seeking collaboration with governments and local
communities and other stakeholders on climate change-related challenges.
Bisichi have identified the need to mitigate GHG emission heavy sources of
electricity usage at our coal washing plant. Management are currently in the
process of evaluating opportunities to reduce these emissions taking into
particular consideration the financial viability and long term sustainability of the
projects.
The below areas have been identified where GHG emissions can be further
reduced through:
• Minimising land clearance for new project facilities;
• Adoption of mitigation strategies for preserving integrity of environment;
• Minimising tree felling;
• The use of modern, energy and fuel efficient equipment;
• The inclusion of the impact of GHG emissions as an evaluation criteria in
the selection of mining contractors, suppliers and equipment. Particular
consideration will be given to the choice of vehicles used for the mine fleet,
employee transportation and the haulage fleet. Where possible energy and fuel
efficiency will be a factor in the selection of vehicles as this will not only reduce
GHG emissions but also reduce operating costs. In addition to the efficiency
of the fleet itself, opportunities will be sought for improving the use of the
vehicles.
• Scheduling of excavation and haulage activities to optimise activities and avoid
double handling, where this is operationally practical; and
• The upgrading of energy-intensive machinery over time will be used to improve
efficiency and reduce CO
2
emissions compared to machinery that has been
removed.
Further energy efficiency opportunities will also be investigated.
Potential water scarcity has increased management focus on opportunities to
increase the usage efficiency of our existing water supply and water recycling
systems. The introduction of a closed loop filter press system for coal fines in
2019 and additional other work concluded or planned on our water recycling
systems at our coal processing facility will result in a lowering of our overall cost
of water and the environmental footprint of our operations. Increased risks of
flooding have been incorporated at planning stage in new opencast mining areas
that have been opened.
Transition and physical risks related to climate change are regularly discussed
at Bisichi’s Board level, particularly those related to the long term viability of
Bisichi’s South African coal operations and the future allocation of capital. Bisichi
regularly considers the need for coal as an energy source both globally and in
South Africa over the life of mine of our operations and in its long term planning.
Bisichi is committed to responsible stewardship of their legacy South African coal
assets taking into account the impact climate change related risks may have on all
our local stakeholders. Bisichi recognise the need to collaborate with government,
employees and communities, to ensure a just transition for our stakeholders
through the transition to a low carbon economy.
Bisichi regularly evaluates and continues to seek opportunities to diversify its
business activities and equity investment portfolio, particularly into renewable
and extractive industries that predominantly mine commodities identified by
the IEA as critical in the transition to a clean energy system. Any significant
developments will be reported to shareholders in due course.
The Board continue to monitor and regularly review adherence by the Group to
changes to UK EPC. The Group have incorporated the ongoing impact of EPC
regulatory standards into its decision making process.
London & Associated Properties PLC 2023 15
STRATEGIC REPORT Corporate responsibility
TCFD AREA TCFD CONSIDERATION LONDON & ASSOCIATED PROPERTIES PLC & BISICHI PLC
Strategy Resilience of strategy, taking
into consideration different
climate-related scenarios,
including a 2°C or lower
scenario.
Bisichi’s management have incorporated climate scenarios into their strategic
operational planning and review process. Bisichi have assessed the resilience of
our coal operations compared to the IEA’s NZE2050 Scenario, which sets out
what additional measures would be required over the next ten years to put the
world as a whole on track for net zero emissions by mid-century. The Scenario
indicates a significant coal demand decline over the longer term impacting the
potential commercial longevity of Bisichi’s South African operations. In addition
Bisichi have assessed physical climate risk profiles for their South African
operations obtained via the World Bank Group’s Climate Change Knowledge
Portal. The outcomes of scenario testing and physical climate profiling have
been incorporated into the long term strategic planning and decision making
processes of Bisichi.
Over the short to medium term, considering the potential impact of transitional
climate risks on Bisichi Group’s South African operations, the Group’s climate
strategy and policy is regularly scrutinised by Bisichi’s senior management and
Board in regard to any changes in coal demand outlook and climate regulatory
policy that may impact our operations over the current life of mine. A recent
example being the Just Energy Transition Investment Plan (“JET IP”) announced
by the South African Government for 2023-2027.
The Board encourages senior and local management to assess principal and
emerging climate-related risks on a regular basis. Risks identified are to be
reported to and discussed at Board level and incorporated into the strategy and
planning of the Group.
Risk
management
Processes for identifying and
assessing climate related risks.
The Group’s risk management processes are developed, implemented and
reviewed by the Board, who retain ultimate responsibility for them.
In addition to the Group’s management of its principal risks and uncertainties,
climate change impacts are mainly considered from two environmental
perspectives, the impact of our South African coal mining and processing
operations on the climate and the effect of global climate change on our
operations and stakeholders.
Heavy sources of GHG emissions have been identified from our annual
Greenhouse Gas emissions recording and reporting.
The Bisichi Board and Senior management remain in regular communication
with local regulatory bodies, climate research providers, coal market analysts,
suppliers, and services providers to ensure climate related risks and changes in
regulatory policy are identified and assessed on a regular basis. Bisichi’s senior
and local management in South Africa are encouraged by the Board to identify
local climate related risks and changes in regulatory policy that may impact our
South African coal operations.
Bisichi’s management continually engage with governments and local
communities and other stakeholders on climate change-related challenges
impacting the local area and the South African coal industry at large.
Processes for managing
climate-related risks.
The Board and Senior management co-ordinate the Group’s analysis and
planning of the effects of climate change on our business. The Board discuss
regularly the impact of any risks identified through the organisation, particularly
in relation to material matters that may impact the viability of the Group’s coal
operations. The Bisichi Board regularly review and analyse coal market and
outlook research, particularly in relation to targets set out in local climate policy
such as JET IP and global climate scenarios such as NZE 2050.
The mitigation of GHG emissions and identification of climate related risks has
been integrated into our corporate policy, project and procurement evaluation
criteria at Bisichi’s South African operations to ensure it is consistently applied
and managed.
The Group continuously monitors and reports key performance indications
relating to environmental matters, including the location of CO2 emissions, their
levels and intensity.
On an ongoing basis, the Group assesses the impact of carbon pricing, climate
regulation and taxation on going concern assumptions, the Group’s current and
future strategy and operations.
16 London & Associated Properties PLC 2023
STRATEGIC REPORT Corporate responsibility
TCFD AREA TCFD CONSIDERATION LONDON & ASSOCIATED PROPERTIES PLC & BISICHI PLC
Risk
management
Processes for identifying,
assessing, and managing
climate-related risks are
integrated into the overall
risk management.
New or evolving climate change risks identified by both senior and local
management are to be reported to and discussed at Board level and
incorporated into the strategy, planning and climate policy of the Group.
Where possible, plans to mitigate the effect of climate change on Bisichi’s
operations and local communities will be integrated into the mines regulatory
environmental management and social and labour plans.
Metrics and
targets
Metrics used by the Group
to assess climate related risks
and opportunities in line with its
strategy and risk management
process
A financial segmentation of the Group’s South African coal mining and
processing assets that are impacted by the climate related risks and
opportunities outlined above can be found in Bisichi’s 2023 Financial Statements
which are available on their website: www.bisichi.co.uk.
Bisichi recognises that its ability to reduce overall carbon emissions is
constrained at present by the main segment of it business activities, being
coal mining and processing in South Africa. Bisichi has, however, sought to
appropriately target its emission reduction strategy to the elements of its
operations where a meaningful reduction in greenhouse gas emissions can be
effected, and this will be reflected in the targets set by the Group in due course.
The Group measures and report our CO2 emissions across the Group including
a breakdown of UK and South African operations. See below for disclosure of
emissions during the year.
Scope 1, Scope 2 and,
if appropriate, Scope 3
greenhouse gas (GHG)
emissions, and the related risks.
The Group is committed to measuring and reporting our scope 1 and 2
greenhouse gas emissions, see below for disclosure of emissions during the year.
Scope 3 emissions are not currently measured given the size and life of mine of
the Group’s South African coal operations and the uncertainty and impracticality
in accurately measuring such emissions throughout the value chain. The Group
will continue to assess the above approach as part of its continued review of
compliance with the TCFD Recommendations and taking into account any
material changes in future business activities.
Targets used by the Group
to manage climate-related
risks and opportunities and
performance against targets.
Over 99% of the Group’s GHG Emissions relate to Bisichi’s South African coal
operations which has a current life of mine of 7 years.
In the short term, the Group’s continues to evaluate areas where GHG emissions
can be further reduced, particularly scope 2 emissions related to the heavy sources of
electricity usage at Bisichi’s coal washing plant. Once the Group has identified the
scope of further potential reductions, their time, capital cost and practicability of
implementation, short term targets for the Group will be reassessed.
Over the long term, as part of the Group’s business strategy, the Board
continues to evaluate opportunities to diversify its business activities. In turn,
targets related to GHG emissions will be re-evaluated in line with any future
changes in the Group’s planned operating activities.
London & Associated Properties PLC 2023 17
STRATEGIC REPORT Corporate responsibility
GREENHOUSE GAS REPORTING
As a quoted organisation incorporated in the UK, we have reported
on all emission sources required under the Companies (Directors’
Report) and Limited Liability Partnerships (Energy and Carbon
Report) Regulations 2018. for the period 1st January 2023 to 31st
December 2023.
The emissions are detailed in Tables 1, 2 and 3 below.
We have employed the Financial Control definition to outline our
carbon footprint boundary, reporting Scope 1 & 2 emissions only for
both landlord & tenant-controlled areas of LAP owned shopping
centres and facilities.
During the year LAP had landlord-controlled areas in Orchard
Square, Brewery Street, Shipley and Bridgend, Bedworth, and Little
Portland Street. Properties that LAP manage on behalf of others or
are not wholly owned by LAP are excluded from our footprint
boundary. An estimate of the emissions associated with the LAP
offices on Little Portland Street has been included in this year’s
calculations, as in the previous year.
Emissions for landlord-controlled areas have been calculated based
on actual consumption data collected from each site. Emissions
from tenant-controlled areas have been calculated based on floor
area and energy consumption benchmarks for general retail services
in the UK.
We have used the main requirements of the ISO14064-1 standard
and HM Government Environmental Reporting Guidelines (2019)
including streamlined energy and carbon reporting guidance.
Emission factors were from the UK Government’s GHG Conversion
Factors for Company Reporting 2023.
As well as reporting Scope 1 and Scope 2 emissions, the regulations
require that at least one intensity ratio is reported for the given
reporting period. The intensity figure below shows emissions in
tCO
2
e per thousand pounds revenue.
Table 1. Landlord & tenant controlled areas
EMISSIONS SOURCE tCO
2
e 2023 2022 CHANGE
Scope 1 emissions Natural gas 29 35 -15%
Refrigerants 0 0 n/a
Scope 2 emissions Electricity 1,152 1,265 -9%
Total tCO
2
e 1,182 1,300 -9%
Intensity ratio (tCO
2
e/£k) 0.25 0.24 6%
Table 2. LAP controlled areas
EMISSIONS SOURCE TCO
2
E 2023 2022 CHANGE
Scope 1 emissions Natural gas 29 35 -15%
Refrigerants 0 0 n/a
Scope 2 emissions Electricity 97 39 149%
Total tCO
2
e 126 74 72%
Table 3. Tenant controlled areas
EMISSIONS SOURCE TCO
2
E 2023 2022 CHANGE
Scope 1 emissions Natural gas 0 0 n/a
Refrigerants 0 0 n/a
Scope 2 emissions Electricity 1,055 1,226 -14%
Total tCO
2
e 1,055 1,226 -14%
Table 4. Coal mining carbon footprint
2023
CO
2
E
TONNES
2022
CO
2
E
TONNES
Emissions source:
Emissions from the combustion of fuel or the operation of any facility including fugitive emissions from
refrigerants use
39,709 39,564
Emissions resulting from the purchase of electricity, heat, steam or cooling by the company for its own
use (location based)
7,601 12,267
Total gross emissions/tCO
2
e 47,310 51,831
Intensity:
Intensity 1 Tonnes of CO
2
per pound sterling of revenue 0.0010 0.0005
Intensity 2 Tonnes of CO
2
per pound of coal produced 0.0587 0.0629
kWh kWh
Energy consumption used to calculate above emissions 90,218,230 87,292,816
Of which UK 7,601 12,341
18 London & Associated Properties PLC 2023
STRATEGIC REPORT Corporate responsibility
ENVIRONMENT
United Kingdom
The Group’s principal UK activity is property investment, which
involves renting premises to commercial businesses. We seek to
provide those tenants with good quality premises from which they
can operate in an efficient and environmentally friendly manner.
Where possible, improvements, repairs and replacements are made
in an environmentally efficient manner and waste re-cycling
arrangements are in place at all the Group’s locations.
South Africa
Under the terms of the mine’s Environmental Management
Programme approved by the Department of Mineral Resource and
Energy (“DMRE”), Black Wattle undertakes a host of environmental
protection activities to ensure that the approved Environmental
Management Plan is fully implemented. In addition to these routine
activities, Black Wattle regularly carries out environmental
monitoring activities on and around the mine, including evaluation
of ground water quality, air quality, noise and lighting levels, ground
vibrations, air blast monitoring, and assessment of visual impacts. In
addition to this Black Wattle also performs quarterly monitoring of
all boreholes around the mine to ensure that no contaminated water
filters through to the surrounding communities. Black Wattle is fully
compliant with the regulatory requirements of the Department of
Water Affairs and Forestry and has an approved water use licence.
Black Wattle Colliery has substantially improved its water
management by erecting and upgrading all its pollution control dams
in consultation with the Department of Water Affairs and Forestry.
A performance assessment audit was conducted to verify compliance
to our Environmental Management Programme and no significant
deviations were found.
EMPLOYEE, SOCIAL, COMMUNITY AND
HUMAN RIGHTS
The Group’s policy is to attract staff and motivate employees by
offering competitive terms of employment. The Group provides
equal opportunities to all employees and prospective employees
including those who are disabled and operates in compliance with
all relevant national legislation.
The Group believes that it is in the interest of shareholders to
consider social and human rights issues when conducting business.
Various policies and initiatives implemented by the Group that fall
within these areas are discussed within this report.
ANTI-SLAVERY AND HUMAN TRAFFICKING
The Group is committed to the prevention of the use of forced labour
and has a zero tolerance policy for human trafficking and slavery.
The Group’s policies and initiatives in this area can be found within
the Group’s Anti-slavery and human trafficking statement found on
the Group’s website at www.lap.co.uk.
EMPLOYMENT AND DIVERSITY
The Board of London & Associated Properties PLC at 31 December 2023 comprised:
NUMBER OF
BOARD MEMBERS
PERCENTAGE OF
THE BOARD
NUMBER
OF SENIOR
POSITIONS ON
THE BOARD
NUMBER IN
EXECUTIVE
MANAGEMENT
PERCENTAGE
OF EXECUTIVE
MANAGEMENT
Men 6 100% 3 3 100%
Women 0 0% 0 0 0%
Not specified/prefer not to say 0 0% 0 0 0%
NUMBER OF
BOARD MEMBERS
PERCENTAGE OF
THE BOARD
NUMBER
OF SENIOR
POSITIONS ON
THE BOARD
NUMBER IN
EXECUTIVE
MANAGEMENT
PERCENTAGE
OF EXECUTIVE
MANAGEMENT
White British or other White (including
minority white groups)
6 100% 3 3 100%
Mixed/Multiple Ethnic Groups 0 0% 0 0 0%
Asian/Asian British 0 0% 0 0 0%
Black/African/Caribbean/Black British 0 0% 0 0 0%
Other ethnic group, including Arab 0 0% 0 0 0%
The above data has been collected through self-reporting by the
Board members. Questions asked include gender identity or sex and
ethnic background.
The Company notes the diversity targets included in the Listing
Rules, being:
• at least 40% of the individuals on the Board are women;
• at least one of the specified senior positions is held by a woman; and
• at least one individual on the Board is from a minority ethnic
background.
At 31 December 2023 the Company did not meet the target that at
least 40% of the individuals on its board of directors are women and
at least one of the senior positions on the Board is held by a
women. Should the Board look to appoint further directors in the
future, the Company will give due consideration to how it may
achieve the diversity targets while ensuring the appropriate
structure of the Board and mix of skills and expertise relevant to the
Company’s operations. As part of its recruitment processes, the
Company gives careful consideration to all potential applicants. The
Company will keep this under ongoing review. The Group is
committed to improving upon its gender and diversity targets at all
employment levels within the Group through a required build-up of
sufficient talent pools, training up of employees and targeted
recruitment policies. The Company will keep the requirement for a
formal diversity policy under review and will give serious
consideration to the adoption of a policy, tailored to the nature of
the Company’s business, its operations and resources at the
appropriate point.
London & Associated Properties PLC 2023 19
STRATEGIC REPORT Corporate responsibility
BISICHI PLC
In terms of directors, employees and gender representation, at the
year end the Group had 9 directors (8 male and 2 from a minority
ethnic or HDSA Background, 1 female from a minority ethnic or HDSA
Background), 5 senior managers (5 male and 2 from a minority ethnic
or HDSA Background) and 212 other employees (143 male and 118
from a minority ethnic or HDSA Background, 69 female and 66 from
a minority ethnic or HDSA Background).
The Group’s South African operations are committed to achieving
the goals of the South African Employment Equity Act and is
pleased to report the following:
• Black Wattle Colliery has exceeded the 10 percent women in
management and core mining target.
• Black Wattle Colliery has achieved over 15 percent women in
core mining.
• 95 percent of the women at Black Wattle Colliery are HDSA
females.
Black Wattle Colliery has successfully submitted their annual
Employment Equity Report to the Department of Labour. In terms
of staff training some highlights for 2023 were:
• One employee was trained in ABET (Adult Basic Educational
Training) on various levels.
• An additional eight disabled HDSA women continued their
training on ABET levels one to four.
• Four HDSA persons were enrolled for apprenticeships in 2023;
• Two HDSA females were allocated new Bursaries for 2023.
Further to the above, we confirm that one HDSA Male completed
his bursary studies in 2023, while two HDSA females continued
their bursary studies in 2023.
Highlights for 2023 for Sisonke Coal Processing:
• One employee was trained in ABET (Adult Basic Educational
Training) on various levels
Employment terms and conditions for the employees based at
Bisichi’s UK office and at their South African mining operations are
regulated by and are operated in compliance with all relevant
prevailing national and local legislation. Employment terms and
conditions provided to mining staff meet or exceed the national
average. Bisichi’s mining operations and coal washing plant facility
are labour intensive and unionised. During the year no labour
disputes, strikes or wage negotiations disrupted production or had a
significant impact on earnings. Bisichi’s relations to date with labour
representatives and labour related unions continue to remain strong.
Detailed information relating to the Bisichi Strategic Report is
available in its 2023 financial statements.
Approved on behalf of the board of directors.
Jonathan Mintz
Finance Director
29 April 2024
20 London & Associated Properties PLC 2023
GOVERNANCE
Directors & advisors
EXECUTIVE DIRECTORS
John A Heller LLB MBA
(Chairman and Chief Executive)
Jonathan Mintz FCA
(Finance Director)
NON-EXECUTIVE DIRECTORS
Howard D Goldring BSC (ECON) ACA †
Howard Goldring was, until 2020, Executive Chairman of Alberon
Holdings Limited which specialises in the discretionary management
of investment portfolios for pension funds, charities, family trusts
and private clients. He also acted as an advisor providing high level
asset allocation advice to family offices and pension schemes. He
has been a member of the LAP Board since July 1992, and has over
40 years’ experience of the real estate market. He was a director of
Baronsmead VCT 2 PLC from 2010-2016 and has specialised in
providing many companies with investor relations support.
Clive A Parritt FCA CF FIIA #†
Clive Parritt joined the board on 1 January 2006. He is a chartered
accountant with over 40 years’ experience of providing strategic,
financial and commercial advice to businesses of all sizes. He is a
director of Brown Advisory US Smaller Companies plc and a member
of the Performance, Audit and Risk Committee of Arts Council England.
Previously he was Group Finance Director of Audiotonix Limited (an
international manufacturer of audio mixing consoles), he has chaired
and been a director of a number of other public and private companies.
Clive Parritt was President of the Institute of Chartered Accountants
in England and Wales in 2011-12. He is Chairman of the Audit
Committee and as Senior Independent Director he chairs the
Nomination and Remuneration Committees.
Robin Priest MA †
Robin Priest joined the board on 31 July 2013. He is a senior advisor
to Alvarez & Marsal LLP (“A&M”) and to a major listed German real
estate investment fund manager. He has more than 38 years’
experience in real estate and structured finance. He was formerly
Managing Director of A&M’s real estate practice, advising private
sector and public sector clients on both operational and financial
real estate matters. Prior to joining A&M, Robin was lead partner for
Real Estate Corporate Finance in London with Deloitte LLP and
before this he founded and ran a property company backed by
private equity. He is also a trustee of London’s Brixton House
Theatre.
Andrew R Heller MA, ACA
Andrew Heller joined the board on 29 March 2023. He is a qualified
Chartered Accountant, serves as Chairman & Managing Director of
Bisichi PLC and has nearly 30 years’ experience in the mining industry.
† Member of the audit, remuneration and nomination committees
# Senior independent director
SECRETARY & REGISTERED OFFICE
Jonathan Mintz FCA
2nd Floor, 12 Little Portland Street,
London W1W 8BJ
AUDITOR
Kreston Reeves LLP
PRINCIPAL BANKERS
Santander UK plc
Metro Bank plc
QIB (UK) plc
SOLICITORS
Pinsent Masons LLP
Wake Smith Solicitors Limited
STOCKBROKER
Shore Capital Markets Limited
REGISTRARS & TRANSFER OFFICE
Link Group
Central Square
29 Wellington Street
Leeds
LS1 4DL
UK telephone: 0371 664 0300
International telephone: +44 371 664 0300
(Calls are charged at the standard geographic rate and will vary by provider. Calls
outside the United Kingdom will be charged at the applicable international rate).
Lines are open between 8.00am to 5.30pm, Monday to Friday,
excluding public holidays in England and Wales.
Website: www.linkgroup.eu
Email: shareholderenquiries@linkgroup.co.uk
Company registration number
341829 (England and Wales)
WEBSITE
www.lap.co.uk
E-MAIL
admin@lap.co.uk
GOVERNANCE
London & Associated Properties PLC 2023 21
GOVERNANCE
Directors’ report
The Directors submit their report and the audited
financial statements for the year ended 31
December 2023.
STRATEGIC REPORT
A comprehensive review and assessment of the Group’s activities during
the year as well as its position at the year end and prospects for the
forthcoming year are included in the Chairman and Chief Executive’s
Review and the Strategic Report. These reports can be found on
pages 2 to 19 and should be read in conjunction with this report.
PRINCIPAL ACTIVITIES
The principal activities of the Group during the year were property
investment and development, as well as investment in joint ventures
and an associated company. The associated company is Bisichi PLC
(Bisichi) in which the Company holds a 41.6% interest. Bisichi is
listed on the main market of the London Stock Exchange and
operates in England and South Africa with subsidiaries which are
involved in overseas mining and mining investment. The results,
together with the assets and liabilities, of Bisichi are consolidated
with those of LAP in accordance with the terms of IFRS 10 even
though the Group only has a minority interest – under IFRS 10 the
58.4% majority interest is disclosed as a “non-controlling interest”.
BUSINESS REVIEW AND POST BALANCE SHEET
EVENTS
A review of the Group’s development and performance can be
found below and should be read in conjunction with the Strategic
Report on pages 4 to 19.
Details of any post balance sheet events are disclosed in Note 30 to
the financial statements.
FUTURE DEVELOPMENTS
The Group continues to look for new opportunities to acquire real
estate assets where it feels it can increase value by applying its intensive
management skills. At the same time, it seeks to reduce its interest
payments on its loans as they expire or where opportunities arise to
refinance on better terms. We also seek to improve our existing estate
through the continued pursuit of asset management initiatives.
PROPERTY ACTIVITIES
The Group is a long-term investor in property. It acquires properties,
actively manages those assets to improve rental income, and thus
seeks to enhance the value of its properties over time.
In reviewing performance, the principal areas regularly monitored by
the Group include:
• Rental income – the aim of the Group is to maximise the
maintainable income from each property by careful tenant
management supported by sympathetic and revenue enhancing
development. Income may be affected adversely by the inability
of tenants to pay their rent, but careful monitoring of rent
collection and tenant quality helps to mitigate this risk. Risk is also
minimised by a diversified tenant base, which should limit the
impact of the failure of any individual tenant.
• Developments – the Group develops customer-focused spaces
to generate returns and portfolio income growth above that
available from standing investments alone.
• Cash flow – allowing for voids, acquisitions, development
expenditure, disposals and the impact of operating costs and
interest charges, the Group aims to maintain a positive cash flow
over time.
• Financing costs – the exposure of the Group to interest rate
movements is managed partly by the use of swap and cap
arrangements, where appropriate (see Note 22 for full details of
the contracts in place) and also by using loans with fixed terms
and interest rates. These arrangements are designed to ensure
that our interest costs are known in advance and are always
covered by anticipated rental income.
• Property valuations – market sentiment and economic conditions
have a direct effect on property valuations, which can vary
significantly (upwards or downwards) over time. Bearing in mind
the long term nature of the Group’s business, valuation changes
have little direct effect on the ongoing activities or the income
and expenditure of the Group. Tenants generally have long term
leases, so rents are unaffected by short term valuation changes.
Borrowings are secured against property values and if those
values fall very significantly, this could limit the ability of the
Group to develop the business using external borrowings. The
risk is minimised by trying to ensure that there is adequate cover
to allow for fluctuations in value on a short term basis.
It continues to be the policy of the Group to realise property assets
when the valuation of those assets reaches a level at which the
directors consider that the long-term rental yield has been reached.
The Group also seeks to acquire additional property investments on
an opportunistic basis when the potential rental yields offer scope
for future growth.
INVESTMENT ACTIVITIES
The investments in joint ventures and Bisichi are for the long term.
LAP manages the UK property assets of Bisichi. However, the
principal activity of Bisichi is overseas mining investment (in South
Africa). While IFRS 10 requires the consolidation of Bisichi, the
investment is held to generate income and capital growth over the
longer term. It is managed independently of LAP and should be
viewed by shareholders as an investment and not a subsidiary. The
other listed investments are held as current assets to provide the
liquidity needed to support the property activities while generating
income and capital growth.
Investments in property are made through joint ventures when the
financing alternatives and spreading of risk make such an approach
desirable.
DIVIDEND
In the light of the current uncertain economic environment, the
directors are not recommending payment of a final dividend for
2023 (2022: Nil per share).
GOVERNANCE
22 London & Associated Properties PLC 2023
GOVERNANCE Directors’ report
THE COMPANY’S ORDINARY SHARES HELD IN
TREASURY
At 31 December 2023, 216,715 (2022: 216,715) ordinary shares
were held in Treasury with a market value of £27,089 (2022: £43,343).
Treasury shares held at 1 January 2023
and 31 December 2023
216,715
No shares (2022: nil) were issued to employees in the year in place
of cash for dividends associated with shares held within the share
incentive plan.
Treasury shares are not included in issued share capital for the
purposes of calculating earnings per share or net assets per share
and they do not qualify for dividends payable.
PROPERTIES
The freehold and long leasehold investment properties of the Company,
its subsidiaries, Dragon and Bisichi were revalued as at 31 December
2023 by independent professional firms of chartered surveyors
– Allsop LLP, London (70.2 per cent of the portfolio), Carter Towler,
Leeds (29.8 per cent). The valuations, which are reflected in the
financial statements, amount to £35.1 million (2022: £35.6 million).
Property of £8.9 million (2022: £22.9 million) is included under
inventory, current assets, at the lower of cost or net realisable value,
Orchard Square Sheffield which was held at £14.75 million in 2022
was disposed in 2023.
Taking account of prevailing market conditions, there was no
material change to the valuation of the properties at 31 December
2023 (2022: decrease of £0.1 million). The proportion of this
revaluation attributable to the Group (net of taxation) is reflected in
the consolidated income statement and the consolidated balance
sheet.
FINANCIAL INSTRUMENTS
Note 22 to the financial statements sets out the risks in respect of
financial instruments. The board reviews and agrees overall treasury
policies, delegating appropriate authority for applying these policies
to the Chief Executive and Finance Director. Financial instruments
are used to manage the financial risks facing the Group and
speculative transactions are prohibited. Treasury operations are
reported at each board meeting and are subject to weekly internal
reporting. Hedging arrangements are in place for the Company, its
subsidiaries and joint ventures in order to limit the effect of higher
interest rates upon the Group. Where appropriate, hedging
arrangements are covered in the Chairman and Chief Executive’s
Statement and the Financial Review.
DIRECTORS
J A Heller, J Mintz, H D Goldring, C A Parritt and R Priest were
Directors of the company for the whole of 2023.
Sir Michael Heller was a Director of the company until his death
on 30 January 2023.
A R Heller was appointed as a non-executive by the Board on 29
March 2023. Andrew Heller is the Chairman and Managing Director
of Bisichi PLC in which LAP holds a 41.6% stake and has valuable
mining expertise which strengthens the skill base of the Board. His
knowledge and experience bring a vital perspective to an important
investment for the Group.
C A Parritt and J A Heller are retiring by rotation at the Annual
General Meeting in 2024 and offer themselves for re-election.
Clive Parritt has been a director since January 2006 and has a
contract of service determinable upon three months’ notice and is
the senior independent director and chairman of the audit,
nomination and remuneration committees. He is a chartered
accountant with over 40 years’ experience in providing strategic,
financial and commercial advice to business. His financial knowledge
and broad commercial experience are of significant benefit to the
business. The board has considered the re-appointment of Clive
Parritt and recommends his re-election as a director.
John Heller has been a director since 1998 and was appointed chief
executive in September 2001. He has a contract of employment
determinable upon twelve months’ notice. The board has considered
the re-appointment of John Heller and recommends his re-election
as a director.
DIRECTORS’ INTERESTS
The interests of the Directors in the ordinary shares of the Company,
including family and trustee holdings, where appropriate, can be
found on page 29 in the Annual Remuneration Report.
Substantial shareholdings
31 DEC 2023 31 DEC 2022
NO. % NO. %
Heller family 48,080,880 56.35 48,080,880 56.35
Stonehage Fleming
Investment
Management Ltd
7,513,214 8.81 7,513,214 8.81
James Hyslop 5,136,258 6.02 5,136,258 6.02
Maland Pension Fund 3,000,000 3.52 2,885,000 3.38
The Company does not consider that the Heller family has a controlling
share interest irrespective of the number of shares held as no
individual party holds a majority and there is no legal obligation for
shareholders to act in concert. The Directors do not consider that
any single party has control.
The Company is not aware of any other holdings exceeding 3 per cent
of the issued share capital.
SHARE CAPITAL AND TAKEOVER DIRECTIVE
The Company has one class of share capital, namely ordinary shares.
Each ordinary share carries one vote. All the ordinary shares rank
pari passu. There are no securities issued by the Company which
carry special rights with regard to control of the Company.
The identity of all significant direct or indirect holders of securities
in the Company and the size and nature of their holdings is shown
in “Substantial Shareholdings” above.
The rights of the ordinary shares to which the HMRC approved
Share Incentive Plan relates are exercisable by the trustees on
behalf of the employees.
There are no restrictions on voting rights or on the transfer of ordinary
shares in the Company, save in respect of treasury shares. The rules
governing the appointment and replacement of Directors, alteration
of the articles of association of the Company and the powers of the
Company’s Directors accord with usual English company law provisions.
Each Director is subject to re-election at least every three years.
The Company is not party to any significant agreements that take
effect, alter or terminate upon a change of control of the Company
following a takeover bid. The Company is not aware of any agreements
between holders of its ordinary shares that may result in restrictions
on the transfer of its ordinary shares or on voting rights.
There are no agreements between the Company and its Directors or
employees providing for compensation for loss of office or employment
that occurs because of a takeover bid.
GOVERNANCE
Directors’ report
London & Associated Properties PLC 2023 23
GOVERNANCE Directors’ report
STATEMENT AS TO DISCLOSURE OF
INFORMATION TO THE AUDITOR
The Directors in office at the date of approval of the financial
statements have confirmed that, so far as they are aware, there is
no relevant audit information of which the auditor is unaware. Each
of the Directors has confirmed that they have taken all the steps
that they ought to have taken as a Director in order to make them
aware of any relevant audit information and to establish that it has
been communicated to the auditor.
INDEMNITIES AND INSURANCE
The Articles of Association of the company provide for it to
indemnify, to the extent permitted by law, directors and officers
(excluding the Auditor) of the company, including officers of
subsidiaries and associated companies, against liabilities arising from
the conduct of the Group’s business. The indemnities are qualifying
third party indemnity provisions of the Companies Act 2006 and
each of these qualifying third party indemnities was in force during
the course of the financial year ended 31 December 2023 and as at
the date of this Directors’ report. No amount has been paid under
any of these indemnities during the year.
The Group maintains Directors and Officers insurance, which is
reviewed annually and is considered to be adequate by the
Company and its insurance advisers.
DONATIONS
No political donations were made during the year (2022: £Nil).
No donations for charitable purposes were made during the year
(2022: £Nil).
CORPORATE RESPONSIBILITY
Environment
The environmental considerations of the group’s South African coal
mining operations are covered in the Bisichi PLC Strategic Report.
The group’s UK activities are principally property investment
whereby premises are provided for rent to commercial businesses.
The group seeks to provide those tenants with good quality
premises from which they can operate in an efficient and
environmentally efficient manner and waste re-cycling arrangements
are in place at all the company’s locations.
Greenhouse gas emissions
Details of the group’s greenhouse gas emissions for the year ended
31 December 2023 can be found on page 17 of the Strategic Report.
Employment
The group’s policy is to attract staff and motivate employees by offering
competitive terms of employment. The group provides equal
opportunities to all employees and prospective employees including
those who are disabled. The Bisichi PLC Strategic Report gives details of
the Bisichi group’s activities and policies concerning the employment,
training, health and safety and community support and social
development concerning the Bisichi group’s employees in South Africa.
Section 172 statement
This is contained within the Strategic Report on page 8.
GOING CONCERN
The directors have reviewed the cash flow forecasts of the Group
and the underlying assumptions on which they are based. The
Group’s business activities, together with the factors likely to affect
its future development, are set out in the Chairman’s Statement
and Chief Executive’s Review and in the Financial and Performance
Review. In addition, note 22 to the financial statements sets out
the Group’s objectives, policies and processes for managing its
capital; its financial risk management objectives; details of its
financial instruments and hedging activities; and its exposure to
credit risk and liquidity risk.
With secured banking facilities, sound financial resources, low void
rates and long term leases in place the Directors believe it remains
appropriate to adopt the going concern basis of accounting in
preparing the annual financial statements.
The Bisichi directors continue to adopt the going concern basis of
accounting in preparing the Bisichi annual financial statements.
CORPORATE GOVERNANCE
The Corporate governance report can be found on pages 24 and 25
of the annual report and accounts.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held at Meeting Room 2, 12
Charles II Street, St James, London SW1Y 4QU on Wednesday 26
June 2024 at 10.30 a.m. Items 1 to 7 will be proposed as ordinary
resolutions. More than 50 per cent. of shareholders’ votes cast at the
meeting must be in favour for those ordinary resolutions to be passed.
The Directors consider that all of the resolutions to be put to the
meeting are in the best interests of the Company and its shareholders
as a whole and accordingly the board unanimously recommends that
shareholders vote in favour of all of the resolutions as the Directors
intend to do in respect of their own beneficial holdings of ordinary
shares. Please note that the following paragraphs are only summaries
of certain of the resolutions to be proposed at the Annual General
Meeting and do not represent the full text of the resolutions. You
should therefore read this section in conjunction with the full text of
the resolutions contained in the notice of Annual General Meeting
which accompanies this Directors’ Report.
ORDINARY RESOLUTIONS
Resolution 7 – Authority to allot securities
Paragraph 7.1.1 of Resolution 7 would give the Directors the authority
to allot shares in the Company and grant rights to subscribe for or
convert any security into shares in the Company up to an aggregate
nominal value of £2,844,200. This represents approximately 1/3 (one
third) of the ordinary share capital of the Company in issue (excluding
treasury shares) as at 24 April 2024 (being the last practicable date
prior to the publication of this Directors’ Report).
In line with guidance issued by the Institutional Voting Information
Service (IVIS), paragraph 7.1.2 of Resolution 7 would give the directors
the authority to allot shares in the Company and grant rights to
subscribe for or convert any security into shares in the Company up to
a further aggregate nominal value of £2,844,200, in connection with
an offer by way of a rights issue. This amount represents approximately
another 1/3 (one third) of the ordinary share capital of the Company in
issue (excluding treasury shares) as at 24 April 2024 (being the last
practicable date prior to the publication of this Directors’ Report).
The Directors’ authority will expire on the earlier of 31 August 2025
or the next AGM. The Directors do not currently intend to make use
of this authority. However, if they do exercise the authority, the
Directors intend to follow best practice as recommended by the
IVIS regarding its use (including as regards the Directors standing for
re-election in certain cases).
OTHER MATTERS
Kreston Reeves LLP has acted as auditor throughout the year and
has expressed its willingness to continue in office. A proposal will be
made at the Annual General Meeting for its reappointment.
By order of the board
Jonathan Mintz
Secretary
For and on behalf of London & Associated Properties PLC
2nd Floor, 12 Little Portland Street
London, W1W 8BJ
24 London & Associated Properties PLC 2023
GOVERNANCEGOVERNANCE
Corporate Governance
The Company has adopted the Corporate Governance
Code for Small and Mid-Size Quoted Companies
(the QCA Code) published by the Quoted Companies
Alliance. The QCA Code provides governance
guidance to small and mid-size quoted companies.
The paragraphs below set out how the Company
has applied this guidance during the year. The
Company has complied with the QCA Code
throughout the year.
PRINCIPLES OF CORPORATE GOVERNANCE
The board promotes good corporate governance in the areas of risk
management and accountability as a positive contribution to business
prosperity. The board endeavours to apply corporate governance
principles in a sensible and pragmatic fashion having regard to the
circumstances of the business. The key objective is to enhance and
protect shareholder value.
BOARD STRUCTURE
During the year the board comprised the Chairman, the Chief Executive,
one other executive Director and three non-executive Directors.
Their details appear on page 22. The board is responsible to
shareholders for the proper management of the Group.
The Directors’ responsibilities statement in respect of the accounts is set
out on page 36. The non-executive Directors have a particular responsibility
to ensure that the strategies proposed by the executive Directors are
fully considered. To enable the board to discharge its duties, all Directors
have full and timely access to all relevant information and there is a
procedure for all Directors, in furtherance of their duties, to take
independent professional advice, if necessary, at the expense of the
Group. The board has a formal schedule of matters reserved to it and
normally has eleven regular meetings scheduled each year. Additional
meetings are held for special business when required.
The board is responsible for overall Group strategy, approval of
major capital expenditure and consideration of significant financial
and operational matters.
The board committees, which have written terms of reference, deal
with specific aspects of the Group’s affairs:
• The nomination committee is chaired by C A Parritt and
comprises one other non-executive Director and the executive
Chairman. The committee is responsible for proposing candidates
for appointment to the board, having regard to the balance and
structure of the board. In appropriate cases recruitment
consultants may be used to assist the process. All Directors are
subject to re-election at a maximum of every three years.
• The remuneration committee is responsible for making
recommendations to the board on the Company’s framework of
executive remuneration and its cost. The committee determines
the contract terms, remuneration and other benefits for each of
the executive directors, including performance related bonus
schemes, pension rights, option grants and compensation
payments. The board itself determines the remuneration of the
non-executive Directors. The committee comprises two non-
executive Directors and it is chaired by C A Parritt. The executive
Chairman of the board is normally invited to attend. The Annual
Remuneration Report is set out on pages 27 to 31.
• The audit committee comprises two non-executive Directors and
is chaired by C A Parritt. The audit committee report, with its
terms of reference, is set out on pages 34 to 35. The Chief
Executive and Finance Director are normally invited to attend.
BOARD AND BOARD COMMITTEE MEETINGS
HELD IN 2023
The number of regular meetings during the year and attendance
was as follows:
MEETINGS
HELD
MEETINGS
ATTENDED
Sir Michael Heller
(resigned 30
January 2023)
Board
Nomination committee
Remuneration committee
1
0
0
0
0
0
J A Heller* Board
Audit committee
10
2
10
2
J Mintz* Board
Audit committee
10
2
10
2
C A Parritt Board
Audit committee
Nomination committee
Remuneration committee
10
2
1
2
10
2
1
2
H D Goldring Board
Audit committee
Nomination committee
Remuneration committee
10
2
1
2
9
2
1
2
R Priest Board 10 10
A Heller
(appointed 29
March 2023)
Board 8 8
*Attended audit committee by invitation.
PERFORMANCE EVALUATION – BOARD,
BOARD COMMITTEES AND DIRECTORS
The performance of the board as a whole, its committees and the
non-executive Directors is assessed by the Chairman and the Chief
Executive and is discussed with the senior independent non-
executive Director. Their recommendations are discussed at the
nomination committee prior to proposals for re-election being
recommended to the board. The performance of executive
Directors is discussed and assessed by the remuneration committee.
The senior independent Director meets regularly with the Chairman,
executive and non-executive Directors individually outside of formal
meetings. The Directors will take outside advice in reviewing
performance but have not found this to be necessary to date.
London & Associated Properties PLC 2023 25
GOVERNANCE Corporate Governance
NON-EXECUTIVE DIRECTORS
The senior independent non-executive Director is C A Parritt. The
other non-executive Directors are H D Goldring, R Priest and A R
Heller. R Priest provides services to the Company on a fee paying
basis. C A Parritt also provides some advisory services as part of his
accounting practice.
The board encourages all four non-executive Directors to act
independently and does not consider that length of service of any
individual non-executive Director, has resulted in the inability or
failure to act independently. In the opinion of the board C A Parritt,
H D Goldring and R Priest continue to fulfil their roles as
independent non-executive Directors. The background and skills of
all non-executive directors are set out on page 20.
The Directors are responsible for the Group’s system of internal
control and for reviewing its effectiveness at least annually, and for
the preparation and review of its financial statements. The board
has designed the Group’s system of internal control in order to
provide the Directors with reasonable assurance that assets are
safeguarded, that transactions are authorised and properly recorded
and that material errors and irregularities are either prevented or
would be detected within a timely period. However, no system of
internal control can eliminate the risk of failure to achieve business
objectives or provide absolute assurance against material
misstatement or loss. The key elements of the control system in
operation are:
• The board meets regularly on full notice with a formal schedule of
matters reserved for its decision and has put in place an
organisational structure with clearly defined lines of responsibility
and with appropriate delegation of authority;
• There are established procedures for planning, approval and
monitoring of capital expenditure and information systems for
monitoring the Group’s financial performance against approved
budgets and forecasts;
• The responsible executives are required regularly to undertake a
full assessment process to identify and quantify the risks that face
the functional activities for which they are responsible and assess
the adequacy of the prevention, monitoring and modification
practices in place for those risks. In addition, regular reports about
significant risks and associated control and monitoring procedures
are made to the executive Directors. The process adopted by the
Group accords with the guidance contained in the document
“Internal Control Guidance for Directors on the Combined Code”
issued by the Institute of Chartered Accountants in England and
Wales. The audit committee receives reports from external
auditors and from executive Directors of the Group. During the
period the audit committee has reviewed the effectiveness of the
system of internal control as described above. The board receives
periodic reports from all committees.
• There are established procedures for the presentation and review
of the financial statements and the Group has in place an
organisational structure with clearly defined lines of responsibility
and with appropriate delegation of authority.
There are no internal control issues to report in the annual report
and financial statements for the year ended 31 December 2023. Up
to the date of approval of this report and the financial statements,
the board has not been required to deal with any related material
internal control issues. The Directors confirm that the board has
reviewed the effectiveness of the system of internal control as
described during the period.
COMMUNICATION WITH SHAREHOLDERS
Prompt communication with shareholders is given high priority.
Extensive information about the Group and its activities is provided
in the Annual Report. In addition, a half-year report is produced for
each financial year and published on the Company’s website. The
Company’s website www.lap.co.uk is updated promptly with
announcements and Annual Reports upon publication. Copies from
previous years are also available on the website.
The share price history and market information can be found at
https://www.londonstockexchange.com/stock/LAS/london-
associated-properties-plc/company-page. The company code is LAS.
There is a regular dialogue with the Company’s stockbrokers and
institutional investors. Enquiries from individuals on matters relating
to their shareholdings and the business of the Group are dealt with
promptly and informatively.
The Company’s website is under continuous development to enable
better communication with both existing and potential new
shareholders.
THE BRIBERY ACT 2010
The Company is committed to acting ethically, fairly and with
integrity in all its endeavours and compliance with the Company’s
anti–bribery code is monitored closely.
26 London & Associated Properties PLC 2023
GOVERNANCEGOVERNANCE
Governance statement by the
Chairman of the remuneration committee
The remuneration committee is pleased to present
its report for the year ended 31 December 2023.
The report is presented in two parts in accordance
with the remuneration regulations.
The first part is the Annual Remuneration Report which details
remuneration awarded to Directors and non-executive Directors
during the year. The shareholders will be asked to approve the
Annual Remuneration Report as an ordinary resolution (as in
previous years) at the AGM in June 2024
The second part is the Remuneration Policy which details the
remuneration policy for Directors, and it can be found at www.lap.
co.uk.
The current remuneration policy was subject to a binding vote
which was approved by shareholders at the AGM in June 2023. The
approval will continue to apply for a 3-year period commencing
from then. The committee reviewed the existing policy and deemed
that no changes were necessary to the current arrangements.
Both reports have been prepared in accordance with The Large and
Medium-sized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013.
The Company’s auditor, Kreston Reeves LLP is required by law to
audit certain disclosures and where disclosures have been audited
that is indicated in the independent auditor’s report.
C A Parritt
Chairman, Remuneration Committee
29 April 2024
London & Associated Properties PLC 2023 27
GOVERNANCE
Annual remuneration report
THE FOLLOWING INFORMATION HAS BEEN AUDITED
Single total figure of remuneration for the year ended 31 December 2023
SALARY
AND FEES
£’000
BONUSES
£’000
BENEFITS
£’000
LONG TERM
INCENTIVE
AWARDS
£’000
PENSIONS
£’000
TOTAL
2023
£’000
TOTAL FIXED
REMUNERA-
TION
£’000
TOTAL
VARIABLE
REMUNERA-
TION
£’000
Executive Directors
Sir Michael Heller*
(resigned 30 January 2023)
1 - 7 - - 8 8 -
Sir Michael Heller - Bisichi 17 - - - - 17 17 -
J A Heller* 558 - 45 - 36 639 639 -
J A Heller - Bisichi - - 9 - - 9 9 -
J Mintz 179 70 13 - 17 279 209 70
755 70 74 - 53 952 882 70
Non-executive Directors
H D Goldring*+ 18 - - - - 18 18 -
C A Parritt*+ 38 - - - - 38 38 -
R Priest* 35 - - - - 35 35 -
A R Heller* - - - - - - - -
A R Heller - Bisichi 850 - 50 - 85 985 985 -
941 - 50 - 85 1,076 1,076 -
Total 1,694 70 124 - 138 2,028 1,958 17
J A Heller has an entitlement to an employer pension contribution of £33,075 for 2023 (2022: £33,075). He has elected for this not to be
paid at this time.
Single total figure of remuneration for the year ended 31 December 2022
SALARY
AND FEES
£’000
BONUSES
£’000
BENEFITS
£’000
LONG TERM
INCENTIVES
AWARDS
£’000
PENSIONS
£’000
TOTAL
2022
£’000
TOTAL FIXED
REMUNERA-
TION
£’000
TOTAL VARI-
ABLE REMU-
NERATION
£’000
Executive Directors
Sir Michael Heller* 7 - 74 - - 81 81 -
Sir Michael Heller - Bisichi 200 580 - - - 780 200 580
J A Heller 558 - 38 - 33 629 629 -
J Mintz 168 70 10 - 16 264 194 70
933 650 122 - 49 1,754 1,104 650
Non-executive Directors
H D Goldring+ 17 - - - - 17 17 -
C A Parritt*+ 37 - - - - 37 37 -
R Priest* 35 - - - - 35 35 -
89 - - - - 89 89 -
Total 1,022 650 122 - 49 1,843 1,193 650
* Note 26 “Related party transactions”
+ Members of the remuneration committee for years ended 31 December 2022 and 31 December 2023. C A Parritt was the chair of the remuneration committee
throughout both years.
28 London & Associated Properties PLC 2023
GOVERNANCE Governance statement by the Chairman of the remuneration committee
Summary of directors’ terms
DATE OF
CONTRACT UNEXPIRED TERM NOTICE PERIOD
Executive Directors
John Heller 1 May 2003 Continuous 12 months
Jonathan Mintz 11 February 2019 Continuous 3 months
Non-executive Directors
H D Goldring 1 July 1992 Continuous 3 months
C A Parritt 1 January 2006 Continuous 3 months
R Priest 31 July 2013 Continuous 3 months
A R Heller 29 March 2023 Continuous 3 months
TOTAL PENSION ENTITLEMENTS
Two directors had benefits under money purchase schemes. Under
his contract of employment, one Director was entitled to a regular
employer contribution (currently £16,853 a year). Under his contract
of employment, the other Director was entitled to a regular
employer contribution (currently £33,075 a year) but has elected to
defer the payment into his pension scheme. There are no final salary
schemes in operation. No pension costs are incurred on behalf of
non-executive Directors. There are no additional benefits payable to
any Director in the event of early retirement.
SHARE INCENTIVE PLAN (SIP)
In 2006 the Directors set up an HMRC approved share incentive plan
(SIP). The purpose of the plan, which is open to all eligible LAP executive
Directors and head office based staff, is to enable them to acquire
shares in the Company and give them a continuing stake in the Group.
The SIP comprises four types of share – (1) free shares under which
the Company may award shares of up to the value of £3,000 each
year, (2) partnership shares, under which members may save up to
£1,500 per annum to acquire shares, (3) matching shares, through
which the Company may award up to two shares for each share
acquired as a partnership share, and (4) dividend shares, acquired
from dividends paid on shares within the SIP.
1. Free shares: No free shares were issued in 2022 or 2023.
2. Partnership shares: No partnership shares were issued in 2022
or 2023.
3. Matching shares: The partnership share agreements for the year
to 31 October 2023 provide for two matching shares to be
awarded free of charge for each partnership share acquired.
No partnership shares were acquired in 2023 (2022: nil).
Matching shares will usually be forfeited if a member leaves
employment in the Group within five years of their grant.
4. Dividend shares: Dividends on shares acquired under the SIP will
be utilised to acquire additional shares. Accumulated dividends
received on shares in the SIP to 31 December 2023 amounted to
£nil (2022: £nil). J A Heller received no shares (2022: nil shares)
and no other Directors received dividend shares.
The SIP is set up as an employee benefit trust. The trustee is
London & Associated Securities Limited, a wholly owned subsidiary
of LAP, and all shares and dividends acquired under the SIP will be
held by the trustee until transferred to members in accordance with
the rules of the SIP.
SHARE OPTION SCHEMES
The Company has an HMRC approved scheme (Approved Scheme). It
was set up in 1986 in accordance with HMRC rules to gain HMRC
approved status which gave the members certain tax advantages. There
are no performance criteria for the exercise of options under the
Approved Scheme, as this was set up before such requirements were
considered to be necessary. No Director has any options outstanding
under the Approved Scheme nor were any options granted under the
Approved Scheme for the year ended 31 December 2023.
A share option scheme known as the “Non-approved Executive Share
Option Scheme” (Unapproved Scheme) which does not have HMRC
approval was set up during 2000. At 31 December 2023 there were
no options to subscribe for ordinary shares outstanding. The exercise
of options under the Unapproved Scheme is subject to the satisfaction
of objective performance conditions specified by the remuneration
committee which conforms to institutional shareholder guidelines and
best practice provisions. Further details of this scheme are set out in
Note 24 “Share Capital” to the financial statements.
PAYMENTS TO PAST DIRECTORS
No payments were made to past Directors in the year ended 31
December 2023 (2022: none).
PAYMENTS FOR LOSS OF OFFICE
No payments for loss of office were made in the year ended 31
December 2023 (2022: none).
Benefits include the provision of car, health and other insurance and
subscriptions.
JA Heller and AR Heller are interested in a number of private property
companies that receive services from the Company’s property agents
– see Note 25 to the financial statements “Related party transactions”.
Sir Michael Heller received reduced remuneration in respect of his
services to LAP. However the Company supplied services to a
number of companies in which Sir Michael Heller had an interest.
The Board estimates that the value of these services, if supplied to a
third party would have been £25,000 (2022 - £300,000).
J A Heller is a director of Dragon Retail Properties Limited, (a
subsidiary for IFRS 10 purposes) and received benefits from that
company of £10,404 (2022: £3,404) for services. This is included in
the remuneration figures disclosed above.
In March 2023, J A Heller became a non-executive director of
Bisichi PLC, (a subsidiary for IFRS 10 purposes) and received a
benefit from that company of £9,333 (2022: £Nil). He didn’t receive
any other remuneration or a bonus from Bisichi PLC.
The remuneration figures for C A Parritt include fees paid to his
accountancy practice for consultancy services provided to the
Group. This is detailed in Note 26 to the financial statements.
R Priest provides consultancy services to the Group. This is detailed
in Note 26 to the financial statements.
A R Heller, who is the Chairman & Managing Director of Bisichi PLC,
(a subsidiary for IFRS 10 purposes) became a non-executive director
of LAP on 29 March 2023 but he did not receive any remuneration
from LAP during 2023.
London & Associated Properties PLC 2023 29
GOVERNANCE Governance statement by the Chairman of the remuneration committee
STATEMENT OF DIRECTORS’ SHAREHOLDINGS AND SHARE INTERESTS
Directors’ interests
The interests of the Directors in the ordinary shares of the Company, including family and trustee holdings, where appropriate, were as follows:
BENEFICIAL
INTERESTS
NON-BENEFICIAL
INTERESTS
31 DEC 23 1 JAN 23 31 DEC 22 1 JAN 22
Sir Michael Heller* - 5,749,341 - 19,277,931
J A Heller 1,872,410 1,872,410 19,277,931 †14,073,485
J Mintz 100,000 100,000 - -
H D Goldring 19,819 19,819 - -
C A Parritt 36,168 36,168 - -
R Priest - - - -
A R Heller 816,874 816,874 #19,277,931 #14,073,485
* Resigned 30 January 2023
† These non-beneficial holdings are duplicated with those of Sir Michael Heller.
# These non-beneficial holdings are duplicated with those of J A Heller.
The beneficial holdings of Directors shown above include their interests in the Share Incentive Plan.
No share awards were made to the Directors in the year, and accordingly no discretion was exercised in determining any award or bonus
payment as a result of any share price appreciation.
There are no requirements or guidelines for any Director to own shares in the Company.
THE FOLLOWING INFORMATION IS UNAUDITED:
The graph illustrates the Company’s performance as compared with a broad equity market index over a five year period. Performance is
measured by total shareholder return. The directors have chosen the FTSE All Share – Total Return Index as a suitable index for this
comparison as it gives an indication of performance against a large spread of quoted companies.
The middle market price of London & Associated Properties PLC ordinary shares at 31 December 2023 was 12.5p (2022: 20.0p). During
the year the share middle market price ranged between 20.5p and 8.5p.
Total Shareholder Return
London & Associated Properties FTSE All Share Index
10
20
30
40
50
60
70
80
90
100
110
120
130
Jan 19
Mar 19
May 19
Jul 19
Sep 19
Nov 19
Jan 20
Mar 20
May 20
Jul 20
Sep 20
Nov 20
Jan 21
Mar 21
May 21
Jul 21
Sep 21
Nov 21
Jan 22
Mar 22
May 22
Jul 22
Sep 22
Nov 22
Jan 23
Mar 23
May 23
Jul 23
Sep 23
Nov 23
Jan 24
30 London & Associated Properties PLC 2023
GOVERNANCE Governance statement by the Chairman of the remuneration committee
REMUNERATION OF THE CHIEF EXECUTIVE OVER THE LAST TEN YEARS
YEAR CEO
CHIEF EXECUTIVE SINGLE
TOTAL FIGURE OF
REMUNERATION
£’000
ANNUAL BONUS PAYMENT
AGAINST MAXIMUM
OPPORTUNITY*
%
LONG-TERM INCENTIVE
VESTING RATES
AGAINST MAXIMUM
OPPORTUNITY*
%
2023 J A Heller 648 0% n/a
2022 J A Heller 628 0% n/a
2021 J A Heller 590 0% n/a
2020 J A Heller 418 0% n/a
2019 J A Heller 648 0% n/a
2018 J A Heller 870 20% n/a
2017 J A Heller 487 11% n/a
2016 J A Heller 569 18% n/a
2015 J A Heller 762 41% n/a
2014 J A Heller 835 49% n/a
*There were no formal criteria or conditions to apply in determining the amount of bonus payable or the number of shares to be issued prior to 2014.
Considering the prevailing economic situation at the time the Chief Executive did not draw £185,000 (35%) of his salary in 2020.
PERCENTAGE CHANGE IN EXECUTIVE AND NON-EXECUTIVE DIRECTOR REMUNERATION
(AUDITED)
The table below shows the percentage change in remuneration of the Directors undertaking the role of Chief Executive Officer, Finance
Director and Non-Executive Directors and the average of Company’s colleagues in London & Associated Properties PLC on a full-time
equivalent basis.
BASE SALARY %
CHANGE
BENEFITS %
CHANGE
BONUSES %
CHANGE
DIRECTOR 2023 2022 2023 2022 2023 2022
Executive:
Sir Michael Heller N/A 0% N/A 9% N/A 0%
J A Heller 0% 5% 42% 52% 0% 0%
J Mintz 7% 5% 30% 25% 0% 40%
Non-Executive:
H D Goldring 0% 0% 0% 0% 0% 0%
C A Parritt 0% 0% 0% 0% 0% 0%
R Priest 0% 0% 0% 0% 0% 0%
A R Heller N/A N/A N/A N/A N/A N/A
Colleague pay 7% 5% 0% 7% 8% 15%
RELATIVE IMPORTANCE OF SPEND ON PAY
The total expenditure of the Group on remuneration to all employees (Note 27 refers) is shown below:
2023
£’000
2022
£’000
Employee Remuneration 8,590 13,676
Distributions to shareholders 0 0
London & Associated Properties PLC 2023 31
GOVERNANCE Governance statement by the Chairman of the remuneration committee
In addition, on 9 June 2023, there was a binding vote on the resolution to approve the Remuneration Policy. The results are detailed below:
% OF VOTES
FOR
% OF VOTES
AGAINST
NUMBER OF
VOTES
WITHHELD
Resolution to approve the Remuneration Report (9 June 2023) 99.04 0.96 2,912,265
Resolution to approve the Remuneration Policy (9 June 2023) 94.20 5.80 2,452,265
STATEMENT OF IMPLEMENTATION OF
REMUNERATION POLICY
The policy was approved at the AGM in June 2023 and was
effective from 1 August 2020. The vote on the remuneration policy
is binding in nature. The Company may not then make a
remuneration payment or payment for loss of office to a person
who is, is to be, or has been a director of the Company unless that
payment is consistent with the approved remuneration policy, or
has otherwise been approved by a resolution of members. It is to
be presented for approval at the forthcoming AGM. During the year
there were no deviations from the procedure for the
implementation of the remuneration policy as set out in the policy.
CONSIDERATION BY THE DIRECTORS OF
MATTERS RELATING TO DIRECTORS’
REMUNERATION
The Remuneration Committee considered the executive Directors’
remuneration and the Board considered the non-executive
Directors’ remuneration in the year ended 31 December 2023. No
increases were awarded and no external advice was taken in
reaching this decision. The Company did not engage any consultants
to provide advice or services to materially assist the remuneration
committee’s considerations.
SHAREHOLDER VOTING
At the Annual General Meeting on 9 June 2023, there was an
advisory vote on the resolution to approve the Remuneration
Report, other than the part containing the remuneration policy.
32 London & Associated Properties PLC 2023
GOVERNANCE
Remuneration policy summary
The remuneration policy summary below is an extract
of the group’s current remuneration policy on directors’
remuneration (excluding Bisichi PLC), which was
approved by a binding vote at the 2023 AGM. The
approved policy took effect from 9 June 2023.
A copy of the full policy can be found at www.lap.co.uk.
POLICY TABLE
ELEMENT PURPOSE POLICY OPERATION OPPORTUNITY AND PERFORMANCE CONDITIONS
Executive directors
Base salary To recognise:
Skills
Responsibility
Accountability
Experience
Value
Considered by remuneration committee on appointment
Set at a level considered appropriate to attract, retain, motivate
and reward the right individuals
Reviewed annually whenever there is a change
of role or operational responsibility
Paid monthly in cash
There is no prescribed maximum salary or maximum rate of increase, although any
increase in excess of inflation is unlikely, unless there are changes in responsibility
No individual director will be awarded a base salary in excess of £675,000 a year
No specific performance conditions are attached to base salaries
Pension To provide competitive retirement benefits Company contribution offered at up to 10% of base salary as part
of overall remuneration package
The contribution payable by the Company is
included in the director’s contract of employment
Paid into money purchase schemes
Company contribution offered at up to 10% of base salary as part of overall
remuneration package
No specific performance conditions are attached to pension contributions
Benefits To provide a competitive benefits package Contractual benefits include:
Car or car allowance
Group health cover
Death in service cover
Permanent health insurance
The committee retains the discretion to approve
changes in contractual benefits in exceptional
circumstances or where factors outside the
control of the Group lead to increased costs
(e.g. medical inflation)
The costs associated with benefits offered are closely controlled and reviewed on an
annual basis
No director will receive benefits of a value in excess of 30% of their base salary
No specific performance conditions are attached to contractual benefits
Annual
bonus
To reward and incentivise In assessing the performance of the executive team, and in particular
to determine whether bonuses are merited the remuneration
committee takes into account the overall performance of the business,
as well as individual contribution to the business in the period
The remuneration committee is using its
discretion to determine the level of bonus on an
annual basis
In assessing performance consideration is given
to the level of net rental income, cash flow, voids,
realised development gains and income from
managing joint ventures, as well as NAV changes.
Achieved results are then compared with
expectation taking account of market conditions
Bonuses are generally offered in cash or shares
The current maximum bonus will not exceed 80% of base salary in any one year
but the remuneration committee reserves the power to award up to 150% in an
exceptional year
Performance conditions will be assessed on an annual basis
The performance measures applied may be financial, non-financial, corporate,
divisional or individual and in such proportion as the remuneration committee
considers appropriate
Share
options
To provide executive directors with
a long-term interest in the company
Where it is necessary to attract, retain, motivate and reward the right
individuals, the directors may establish new schemes to replace any
expired schemes
Offered at appropriate times by the
remuneration committee
The aggregate number of shares over which options may be granted under all of the
company’s option schemes (including any options and awards granted under the
company’s employee share plans) in any period of ten years, will not exceed, at the
time of grant, 10% of the ordinary share capital of the company from time to time
Share options will be offered by the remuneration committee at their discretion and
will be subject to appropriate performance criteria at the time.
Share incentive
plan (SIP)
To offer a shorter term incentive in the
company and to give directors a stake in
the group
Offered to executive directors and head office staff
Maximum participation levels are set by HMRC Of any bonus awarded, Directors may opt to have maximum of £3,000 per year paid
in ‘Free Shares’ under the SIP scheme rules
Non-executive directors
Base salary To recognise:
Skills
Responsibility
Experience
Risk
Value
Considered by the board on appointment
Set at a level considered appropriate to attract, retain and motivate
the individual
Experience and time required for the role are considered on
appointment
Reviewed annually No individual non-executive director will be awarded a base salary in excess of
£50,000 a year
No performance conditions are attached to base salaries
Pension No pension offered
Benefits No benefits offered except in exchange for sacrificing fees.
Share options Non-executive directors do not participate in the share option schemes
Notes to the Remuneration Policy
The remuneration committee considers the performance
measures outlined in the table above to be appropriate
measures of performance and that the KPIs chosen align the
interests of the directors and shareholders
London & Associated Properties PLC 2023 33
GOVERNANCE Remuneration policy summary
In setting the policy, the Remuneration Committee has taken the
following into account:
• The need to attract, retain and motivate individuals of a calibre who
will ensure successful leadership and management of the company
• The LAP Group’s general aim of seeking to reward all employees
fairly according to the nature of their role and their performance
• Remuneration packages offered to similar companies within the
same sector
• The need to align the interests of shareholders as a whole with
the long-term growth of the Group; and
• The need to be flexible and adjust with operational changes
throughout the term of this policy
In addition to the entitlements set out above, Bisichi PLC, which is
treated as a subsidiary of the Group under the Companies Act
2006, shall be entitled to pay, and any executive director of Bisichi
PLC who is also a director of the Company, shall be entitled to
retain, any remuneration permissible in accordance with Bisichi
PLC’s remuneration policy. Any such remuneration will be (i) to the
extent required, permitted by this remuneration policy and (ii)
excluded from the calculation of any limits on remuneration under
this remuneration policy.
The remuneration of non-executive directors is determined by the
board, and takes into account additional remuneration for services
outside the scope of the ordinary duties of non-executive directors.
For details of remuneration of other company employees please see
page 30.
POLICY TABLE
ELEMENT PURPOSE POLICY OPERATION OPPORTUNITY AND PERFORMANCE CONDITIONS
Executive directors
Base salary To recognise:
Skills
Responsibility
Accountability
Experience
Value
Considered by remuneration committee on appointment
Set at a level considered appropriate to attract, retain, motivate
and reward the right individuals
Reviewed annually whenever there is a change
of role or operational responsibility
Paid monthly in cash
There is no prescribed maximum salary or maximum rate of increase, although any
increase in excess of inflation is unlikely, unless there are changes in responsibility
No individual director will be awarded a base salary in excess of £675,000 a year
No specific performance conditions are attached to base salaries
Pension To provide competitive retirement benefits Company contribution offered at up to 10% of base salary as part
of overall remuneration package
The contribution payable by the Company is
included in the director’s contract of employment
Paid into money purchase schemes
Company contribution offered at up to 10% of base salary as part of overall
remuneration package
No specific performance conditions are attached to pension contributions
Benefits To provide a competitive benefits package Contractual benefits include:
Car or car allowance
Group health cover
Death in service cover
Permanent health insurance
The committee retains the discretion to approve
changes in contractual benefits in exceptional
circumstances or where factors outside the
control of the Group lead to increased costs
(e.g. medical inflation)
The costs associated with benefits offered are closely controlled and reviewed on an
annual basis
No director will receive benefits of a value in excess of 30% of their base salary
No specific performance conditions are attached to contractual benefits
Annual
bonus
To reward and incentivise In assessing the performance of the executive team, and in particular
to determine whether bonuses are merited the remuneration
committee takes into account the overall performance of the business,
as well as individual contribution to the business in the period
The remuneration committee is using its
discretion to determine the level of bonus on an
annual basis
In assessing performance consideration is given
to the level of net rental income, cash flow, voids,
realised development gains and income from
managing joint ventures, as well as NAV changes.
Achieved results are then compared with
expectation taking account of market conditions
Bonuses are generally offered in cash or shares
The current maximum bonus will not exceed 80% of base salary in any one year
but the remuneration committee reserves the power to award up to 150% in an
exceptional year
Performance conditions will be assessed on an annual basis
The performance measures applied may be financial, non-financial, corporate,
divisional or individual and in such proportion as the remuneration committee
considers appropriate
Share
options
To provide executive directors with
a long-term interest in the company
Where it is necessary to attract, retain, motivate and reward the right
individuals, the directors may establish new schemes to replace any
expired schemes
Offered at appropriate times by the
remuneration committee
The aggregate number of shares over which options may be granted under all of the
company’s option schemes (including any options and awards granted under the
company’s employee share plans) in any period of ten years, will not exceed, at the
time of grant, 10% of the ordinary share capital of the company from time to time
Share options will be offered by the remuneration committee at their discretion and
will be subject to appropriate performance criteria at the time.
Share incentive
plan (SIP)
To offer a shorter term incentive in the
company and to give directors a stake in
the group
Offered to executive directors and head office staff
Maximum participation levels are set by HMRC Of any bonus awarded, Directors may opt to have maximum of £3,000 per year paid
in ‘Free Shares’ under the SIP scheme rules
Non-executive directors
Base salary To recognise:
Skills
Responsibility
Experience
Risk
Value
Considered by the board on appointment
Set at a level considered appropriate to attract, retain and motivate
the individual
Experience and time required for the role are considered on
appointment
Reviewed annually No individual non-executive director will be awarded a base salary in excess of
£50,000 a year
No performance conditions are attached to base salaries
Pension No pension offered
Benefits No benefits offered except in exchange for sacrificing fees.
Share options Non-executive directors do not participate in the share option schemes
34 London & Associated Properties PLC 2023
GOVERNANCEGOVERNANCE
Audit committee report
The committee’s terms of reference have been
approved by the board and follow published
guidelines, which are available on request from the
company secretary.
The audit committee’s primary tasks are to:
• review the scope of external audit, to receive regular reports from
Kreston Reeves LLP and to review the half-yearly and annual
accounts before they are presented to the board, focusing in
particular on accounting policies and areas of management
judgement and estimation;
• monitor the controls which are in force to ensure the integrity of
the information reported to the shareholders;
• act as a forum for discussion of internal control issues and
contribute to the board’s review of the effectiveness of the Group’s
internal control and risk management systems and processes;
• to review the risk assessments made by management, consider key
risks with action taken to mitigate these and to act as a forum for
discussion of risk issues and contribute to the board’s review of the
effectiveness of the Group’s risk management control and processes;
• consider once a year the need for an internal audit function;
• advise the board on the appointment of the external auditors, the
rotation of the audit partner every five years and on their
remuneration for audit work; discuss the nature and scope of
their audit work and undertake a formal assessment of their
independence each year, which includes:
i) a review of non-audit services provided to the Group and
related fees;
ii) discussion with the auditors of their written report detailing
all relationships with the Company and any other parties that
could affect independence or the perception of
independence;
iii) a review of the auditors’ own procedures for ensuring the
independence of the audit firm and partners and staff
involved in the audit, including the regular rotation of the
audit partner; and
iv) obtaining a written confirmation from the auditors that, in
their professional judgement, they are independent.
MEETINGS
The committee meets at least twice a year prior to the publication
of the annual results and discusses and considers the half year
results prior to their approval by the board. The audit committee
meetings are attended by the external audit partner, chief executive,
finance director and company secretary. During the year the
members of the committee also meet on an informal basis to
discuss any relevant matters which may have arisen. Additional
formal meetings may be held as necessary.
During the past year the committee:
• met with the external auditors, and discussed their reports to the
audit committee;
• approved the publication of annual and half year financial results;
• considered and approved the annual review of internal controls;
• discussed the findings of the FRC’s Audit Quality Review (AQR)
Inspection Report of the external auditor’s audit for 31 December
2021, and noted the external auditor’s proposed actions;
• decided that there was no current need for an internal audit
function due to the scale of the business and processes in place;
• agreed the independence of the auditors and approved their fees
for audit services as set out in Note 2 to the financial statements;
• the chairman of the audit committee has also had separate
meetings and discussions with the external audit partner; and
FINANCIAL REPORTING
As part of its role, the Audit Committee assessed the audit findings
that were considered most significant to the financial statements,
including those areas requiring significant judgement and/or
estimation. When assessing the identified financial reporting
matters, the committee assessed quantitative materiality primarily
by reference to the carrying value of the group’s total assets, given
that the group operates a principally asset based business. When
determining quantitative materiality, the Board also gave
consideration to the value of revenues generated by the group and
net asset value, given that they are key trading and business KPIs.
The qualitative aspects of any financial reporting matters identified
during the audit process were also considered when assessing their
materiality. Based on the considerations set out above we have
considered quantitative errors individually or in aggregate in excess
of approximately £1.479 million in relation to the Group and £0.545
million in relation to the parent company and £1.0 million for the
Bisichi group to be material.
London & Associated Properties PLC 2023 35
GOVERNANCE Audit committee report
EFFECTIVENESS OF THE EXTERNAL AUDIT
PROCESS
Receiving high-quality and effective audit services is of paramount
importance to the Committee. We continue to monitor carefully the
effectiveness of the external auditor as well as their independence.
We have full regard to the FRC’s Ethical Standard and ensure that
our procedures and safeguards meet these standards.
The FRC’s AQR team completed an inspection of the audit of the
financial statements of London & Associated Properties PLC for the
year ended 31 December 2021.
The Committee has carefully considered the findings that were
raised in the AQR’s report and has concluded that these do not
present any significant concerns on overall external audit
effectiveness when taken with the external auditor’s response and
proposed actions. None of the FRC comments suggest that the
accounts for 2021 were in any way incorrect.
The external auditor produced a detailed audit planning report in
preparation for the year-end financial statements, which included
appropriate consideration of improvements to address the AQR
findings.
The effectiveness review of the external auditor is considered as
part of the Committee’s annual performance evaluation, which also
examines the relationship and communications between the
Committee and the external auditor. No issues were raised during
that review. The Committee concluded that the Auditor was
effective during the year and that the relationship and
communications were open and constructive.
EXTERNAL AUDITOR
Kreston Reeves LLP has held office throughout the period under
review. In the United Kingdom London & Associated Properties PLC
provides extensive administration and accounting services to Bisichi
PLC, which has its own audit committee and employs Kreston
Reeves LLP as its auditor.
C A Parritt
Chairman – Audit Committee
29 April 2024
36 London & Associated Properties PLC 2023
GOVERNANCE
Directors’ responsibilities statement
Directors are responsible for preparing the
Strategic Report and the Directors’ Report, the
Directors’ Remuneration Report and the financial
statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare group and company
financial statements for each financial year. The directors have
elected under company law to prepare group financial statements in
accordance with UK-adopted international accounting standards.
The directors have elected under company law to prepare the
company financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom
Accounting Standards and applicable law) including FRS 101
“Reduced Disclosure Framework”.
The group financial statements are required by law and international
accounting standards in conformity with the requirements of the
Companies Act 2006 and UK-adopted international financial
reporting standards to present fairly the financial position and
performance of the group; the Companies Act 2006 provides in
relation to such financial statements that references in the relevant
part of that Act to financial statements giving a true and fair view
are references to their achieving a fair presentation.
Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the group and the company and of the
profit or loss of the group for that period.
In preparing each of the group and company financial statements,
the directors are required to:
a. select suitable accounting policies and then apply them
consistently;
b. make judgements and accounting estimates that are reasonable
and prudent;
c. for the group financial statements, state whether applicable
UK-adopted international accounting standards have been
followed, subject to any material departures disclosed and
explained in the Financial Statements;
d. for the company financial statements, state whether applicable
UK accounting standards, comprising FRS101, have been
followed, subject to any material departures disclosed and
explained in the company financial statements;
e. prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group and the
company will continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the group’s and the
company’s transactions and disclose with reasonable accuracy at
any time the financial position of the group and the company and
enable them to ensure that the financial statements and the
Directors’ Remuneration Report comply with the Companies Act
2006. They are also responsible for safeguarding the assets of the
group and the company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
DIRECTORS’ STATEMENT PURSUANT TO THE
DISCLOSURE GUIDANCE AND TRANSPARENCY
RULES
The Directors consider that the Annual Report and Accounts, taken
as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s and
Company’s position and performance, business model and strategy
Each of the directors, whose names and functions are listed on page
22 confirm that, to the best of each person’s knowledge:
a. the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view of
the assets, liabilities, financial position and loss of the company
and the undertakings included in the consolidation taken as a
whole; and
b. the Strategic Report contained in the Annual Report includes a
fair review of the development and performance of the business
and the position of the company and the undertakings included in
the consolidation taken as a whole, together with a description of
the principal risks and uncertainties that they face.
The directors are responsible for the maintenance and integrity of
the corporate and financial information included on the London &
Associated Properties PLC website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.
London & Associated Properties PLC 2023 37
GOVERNANCE
Independent auditor’s report
TO THE SHAREHOLDERS OF LONDON & ASSOCIATED PROPERTIES PLC
FOR THE YEAR ENDED 31 DECEMBER 2023
OPINION
We have audited the financial statements of
London & Associated Properties PLC (the ‘parent
company’) and its subsidiaries (the ‘Group’) for the
year ended 31 December 2023 which comprise the
consolidated income statement, consolidated
statement of other comprehensive income,
consolidated and company balance sheets,
consolidated and company statements of changes
in equity, consolidated cash flow statement and
notes to the financial statements, including a
summary of significant Group accounting policies.
The financial reporting framework that has been
applied in their preparation of the group financial
statements is applicable law and UK adopted
international accounting standards. The financial
reporting framework that has been applied in the
preparation of the parent company financial
statements is applicable law and United Kingdom
Accounting Standards, including FRS 101 Reduced
Disclosure Framework (United Kingdom Generally
Accepted Accounting Practice).
In our opinion, the financial statements:
• the financial statements give a true and fair view of the state of
the Group’s and of the parent company's affairs as at 31 December
2023 and of the Group’s profit for the year then ended;
• the group financial statements have been properly prepared in
accordance with UK adopted international accounting standards;
• the parent company financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
• the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards
on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of
our report. We are independent of the Group in accordance with
the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical Standard
as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the
Directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Group and Parent
companies ability to continue to adopt the going concern basis of
accounting including the following:
• We gained an understanding of the systems and controls around
managements’ going concern assessment, including for the
preparation and review process for forecasts and budgets.
• We obtained evidence that management have undertaken a
formal going concern assessment, including sensitivity analysis of
cash flow forecasts, clear consideration of significant external
factors including the impact of the war in Ukraine and the
potential liquidity impact of such factors on cash balances
including available facilities.
• We have analysed the financial strength of the business at the
year-end date.
• We tested the mechanical integrity of the forecast model by
checking the accuracy and completeness of the model, including
challenging the appropriateness of estimates and assumptions
with reference to empirical data and external evidence.
• Based on our above assessment we performed our own
sensitivity analysis in respect of the key assumptions
underpinning the forecasts.
• We considered the post year-end performance of the business,
comparing this to budget as well as considering the development
of key liquidity ratios in the business.
• The group's banking facility documentation was reviewed to
ensure that any covenants in place have not been breached.
• We reviewed the adequacy and completeness of the disclosure
included within the financial statements in respect of going
concern.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the entity's
ability to continue as a going concern for a period of at least twelve
months from when the financial statements are authorised for issue.
In relation to the Group and Parent Company’s reporting on how
they have applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the
directors’ statement in the financial statements about whether the
directors considered it appropriate to adopt the going concern basis
of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report. However, because not all future events or conditions
can be predicted, this statement is not a guarantee as to the Group’s
and Parent Company’s ability to continue as a going concern.
38 London & Associated Properties PLC 2023
CORPORATE GOVERNANCE STATEMENT
The Listing Rules require us to review the directors’ statement in
relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the Group’s and
Parent Company’s compliance with the provisions of the UK
Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit:
• Directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting and any material
uncertainties identified set out on page 23;
• Directors’ explanation as to its assessment of the company’s
prospects, the period this assessment covers and why the period
is appropriate set out on page 8;
• Directors’ statement on whether it has a reasonable expectation
that the group will be able to continue in operation and meets its
liabilities set out on page 8;
• Directors’ statement that the annual report and accounts are fair,
balanced and understandable set out on page 36;
• Board’s confirmation that it has carried out a robust assessment
of the emerging and principal risks set out on pages 9 to 10;
• The section of the Annual Report that describes the review of
effectiveness of risk management and internal control systems
set out on page 25 and
• The section describing the work of the Audit Committee set out
on page 35.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made
subjective judgements, for example in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. As in all of
our audits we also addressed the risk of management override of
internal controls, including evaluating whether there was evidence
of bias by the directors that represented a risk of material
misstatement due to fraud.
OUR APPLICATION OF MATERIALITY
GROUP FINANCIAL STATEMENTS PARENT COMPANY FINANCIAL STATEMENTS
Materiality £1,479,000 (2022: £1,611,000) £545,000 (2022: £548,000)
Basis for determining materiality ~3% of net assets ~3% of net assets
Rationale for benchmark applied The group's principal activity is that
of investment, management and
development of industrial and retail
property and, exploration and mining
operation. To this end, the business
is highly asset focused. Therefore, a
benchmark for materiality of the net
assets of the group is considered to be
appropriate.
The parent company’s principal activity
is that of investment, management and
development of industrial and retail
property. To this end, the business is highly
asset focused. Therefore, a benchmark for
materiality of the net assets of the group is
considered to be appropriate.
Performance materiality £1,035,000 (2022: £1,128,000) £381,000 (2022: £383,000)
Basis for determining performance
materiality
70% of materiality 70% of materiality
Rationale for performance materiality
applied
On the basis of our risk assessments,
together with our assessment of the
Group’s overall control environment,
our judgement was that performance
materiality was 70% of our planning
materiality. In assessing the appropriate
level, we consider the nature of the group
and our previous experience of auditing
the Group.
On the basis of our risk assessments,
together with our assessment of the
Company’s overall control environment,
our judgement was that performance
materiality was 70% of our planning
materiality. In assessing the appropriate
level, we consider the nature of the group
and our previous experience of auditing
the Company.
Triviality threshold £73,000 (2022: £81,000) £27,000 (2022: £27,000)
Basis for determining triviality threshold 5% of materiality 5% of materiality
Independent auditor’s report
GOVERNANCE Independent auditor’s report
London & Associated Properties PLC 2023 39
GOVERNANCE Independent auditor’s report
We reported all audit differences found in excess of our triviality
threshold to the directors and the Audit Committee.
For each Group company within the scope of our Group audit, we
allocated a materiality that is less than our overall Group materiality.
The range of materiality allocated across each Group company was
between £46,000 and £828,761. The scope of our audit was
influenced by our application of materiality as we set certain
quantitative thresholds for performance materiality and use these
thresholds as a consideration tool to help to determine the scope of
our audit and the nature, timing and extent of our audit procedures
on the individual financial statement line items and disclosures and
in evaluating the effect of misstatements, both individually and in
aggregate on the financial statements as a whole.
We determined component materiality for the parent company to
be capped at below group materiality. This was also the case for
group subsidiaries registered outside of the UK. For the subsidiaries,
3% of that subsidiary’s gross assets or net assets was used. The
gross assets or net assets have been used to calculate materiality for
the subsidiaries as this is considered to be more appropriate in the
circumstances. Performance materiality was calculated at 70% of
component materiality. For the subsidiaries, their materiality and
performance materiality were capped by group materiality and
group performance materiality where appropriate.
COVERAGE OVERVIEW
GROUP
REVENUE
GROUP
PROFIT/
(LOSS)
BEFORE TAX
GROUP NET
ASSETS
Full statutory audit
(Kreston Reeves and
BDO)
100% 99.7% 99.8%
Limited procedures 0.0% 0.3% 0.2%
Totals at 31
December 2023:
100% 100% 100%
We tailored the scope of our audit to ensure that we performed
sufficient work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the
Group and the parent company, the accounting processes and
controls, and the industry in which they operate.
Our scoping considerations for the Group audit were based both on
financial information and risk. As noted above limited assurance
audit work – which is to say the audit of balances and transactions
material at a group level – was only applied in respect of a small
element of the group. The below table summarises for the parent
company, and its subsidiaries, the level of assurance gained:
GROUP COMPONENT LEVEL OF ASSURANCE
London & Associated Properties PLC Full statutory audit
(Kreston Reeves LLP)
Analytical Properties Limited Full statutory audit
(Kreston Reeves LLP)
Orchard Square Limited Full statutory audit
(Kreston Reeves LLP)
Dragon Retail Limited Full statutory audit
(Kreston Reeves LLP)
West Ealing Projects Limited Full statutory audit
(Kreston Reeves LLP)
Broadway Regen Limited Full statutory audit
(Kreston Reeves LLP)
DP Pampisford Limited Full statutory audit
(Kreston Reeves LLP)
Development Physics Limited Full statutory audit
(Kreston Reeves LLP)
Bisichi PLC Full statutory audit
(Kreston Reeves LLP)
Mineral Products Limited Full statutory audit
(Kreston Reeves LLP)
Bisichi (Properties) Limited Full statutory audit
(Kreston Reeves LLP)
Bisichi Northampton Limited Full statutory audit
(Kreston Reeves LLP)
Bisichi Mining (Exploration) Limited Full statutory audit
(Kreston Reeves LLP)
Black Wattle Colliery (Pty) Limited Full statutory audit (BDO
South Africa Incorporated)
Sisonke Coal Processing (Pty) Limited Full statutory audit (BDO
South Africa Incorporated)
All other group undertakings Limited assurance
40 London & Associated Properties PLC 2023
GOVERNANCE Independent auditor’s report
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified by our
audit.
REVENUE RECOGNITION:
Significance and nature of key risk How our audit addressed the key risk
Revenue is a key performance indicator for users in assessing
the group’s financial statements. Revenue generated has
a significant impact on cash inflows and profit before tax
for the group. As such revenue is a key determinant in
profitability and the group’s ability to generate cash.
Revenue comprises two key revenue streams: the property
rental income and sale of coal.
Rental income is recognised in the Group income statement
on a straight-line basis over the term of the lease.
Coal revenue is recognised when the customer has a legally
binding obligation to settle under the terms of the contract.
Rental income revenue was recalculated based on the terms included
in signed lease agreements. The recognition stages detailed in the
relevant standards were carefully considered to ensure revenue
recognised was in line with these and a substantive approach was
taken.
Sales of coal and coal processing services in the period were tested
from the trigger point of the sale to the point of recognition in the
financial statements, corroborating this to contract sales or service
terms and the recognition stages detailed in IFRS 15.
Cut-off of revenue was reviewed for sales of coal by analysing sales
recorded during the period, before and after the financial year end
and determining if the recognition applied was appropriate, whilst
rental income cut-off has also been reviewed by analysing revenue
recorded during the period, before and after the financial year end
and determining if the recognition of the deferred income applied was
appropriate. This also includes generating a proof in total of the income
from the tenancy agreements and comparing to the income per the
nominal ledger.
Walkthrough testing was performed to ensure that key systems and
controls in place around the revenue cycle operated as designed.
The accuracy of revenue disclosures in the accounts were confirmed
to be consistent with the revenue cycle observed and audited. The
completeness of these disclosures was confirmed by reference to the
full disclosure requirements as detailed in IFRS 15.
KEY OBSERVATIONS COMMUNICATED TO THE AUDIT COMMITTEE
We have no concerns over the material accuracy of revenue recognised in the financial statements.
VALUATION/IMPAIRMENT OF INVESTMENT PROPERTIES AND INVENTORY:
Significance and nature of key risk How our audit addressed the key risk
Investment properties comprise freehold and long leasehold
land and buildings, whilst properties classified as inventory are
properties which are currently being developed.
Investment properties are carried at fair value in accordance
with IAS 40 and are revalued annually by professional external
surveyors and included in the balance sheet at their fair value.
Gains or losses arising from changes in the fair values of
assets are recognised in the consolidated income statement
in the period to which they relate. In accordance with IAS 40,
investment properties are not depreciated.
The fair value of the head leases is the net present value of the
current head rent payable on leasehold properties until the
expiry of the lease.
Appropriate classification of each property was considered, IAS 40
for investment properties, IAS 2 for inventory and IFRS 5 for non-
current assets held for sale, to ensure each property has been classified
correctly and therefore accounted for and disclosed within these
financial statements in accordance with the relevant standard.
External valuation reports were obtained and vouched to stated fair
values. The competence and independence of the valuation experts
was carefully considered to ensure that the reports they produce can
be relied upon.
A meeting was held with the valuers to challenge the assumptions
in their report and discuss the movements in the values of specific
properties.
Supporting calculations for the long leasehold land and buildings were
reviewed to ensure they are materiality accurate, and any assumptions
are considered to be reasonable.
KEY OBSERVATIONS COMMUNICATED TO THE AUDIT COMMITTEE
We have no concerns over the material accuracy of investment properties and inventory values recognised in the financial statements.
London & Associated Properties PLC 2023 41
GOVERNANCE Independent auditor’s report
ORCHARD SQUARE LIMITED EXCLUSION FROM THE GROUP CONSOLIDATION AS AT YEAR END:
Significance and nature of key risk How our audit addressed the key risk
Orchard Square Limited was one of the group’s subsidiaries
whose operating results have historically been consolidated as
part of the LAP Group accounts.
During the year, it was established that Orchard Square Limited
breached the Income cover ratio covenant on its £12.7 million
loan with Phoenix CRE. This loan is non-recourse to the rest of
the LAP Group. While the group had the option to address the
breach, there was little prospect of recouping any equity, so it
decided not to do so.
Management decided that the LAP group no longer has exposure,
or rights, to variable returns from its involvement with Orchard
Square Limited and cannot be obliged to provide any further
funds to Orchard Square Limited. On this basis, the investment in
Orchard Square Limited has been treated as being relinquished in
accordance with IFRS 10.
This event has a significant impact on the group’s net assets as at
year end.
We obtained management’s assessment demonstrating how the
group lost effective control of Orchard Square Limited during the
year and the rationale justifying the exclusion of the subsidiary
from the consolidated accounts as at year end.
A meeting was held with management to understand and challenge
their assessment on the exclusion of Orchard Square Limited from
consolidation on the basis that LAP Group no longer has exposure,
or rights, to variable returns from its involvement with the
subsidiary and cannot be obliged to provide any further funds to
Orchard Square Limited. On that basis, in accordance with IFRS10,
the investment in Orchard Square Limited has been treated as
having been relinquished during the year and neither the loan nor
the asset is shown in the accounts as at 31 December 2023.
We reviewed the position of LAP Group in accordance with the
requirements of IFRS 10. Supporting facility documentation
between the company and the lender were obtained and reviewed
to ensure that the client’s treatment is deemed appropriate and
reasonable.
We have corroborated the data used by management in
consolidating the results of Orchard Square Limited as part of the
LAP Group accounts up till the point that control was deemed lost
during the year.
We have also ensured that this event has been fully disclosed in
the LAP Consolidated accounts.
KEY OBSERVATIONS COMMUNICATED TO THE AUDIT COMMITTEE
We have no concerns over the exclusion of Orchard Square Limited from the group consolidation as at year end.
VALUATION/IMPAIRMENT OF MINING RESERVES:
Significance and nature of key risk How our audit addressed the key risk
The valuation of the mine is material to the financial statements
and is considered to be a key accounting estimate.
The purpose of mine development is to establish secure working
conditions and infrastructure to allow the safe and efficient
extraction of recoverable reserves.
Depreciation on mine development costs is not charged
until production commences or the assets are put to use. On
commencement of full commercial production, depreciation is
charged over the life of the associated mine reserves extractable
using the asset on a unit of production basis.
The unit of production calculation is based on tonnes mined as
a ratio to proven and probable reserves and also includes future
forecast capital expenditure. The cost recognised includes the
recognition of any decommissioning assets related to mine
development.
The accounting requirements of IFRS 6 and IAS 16 were
considered to ensure capitalisation of costs to mine development
under IAS 16 was appropriate.
In considering impairment indicators, as governed by IAS 36, the
life of mine assessment was obtained. All significant input variables
were considered and stress-tested to assess headroom between
modelling and the value of mine development.
Consideration was given to the competence and independence
of the technical expert involved with the production of historic
technical reports on which the life of mine assessment is partially
built.
Depreciation of mine development was recalculated based on the
unit of production basis to ensure it was accurately recorded. This
basis was also considered for reasonableness by reference to the
accounting policies of industry peers.
The accuracy and appropriateness of mine development disclosures
in the accounts were confirmed to be consistent with the mine
development accounting cycle observed and audited.
KEY OBSERVATIONS COMMUNICATED TO THE AUDIT COMMITTEE
We have no concerns over the material accuracy of mining reserves and development values recognised in the financial statements.
42 London & Associated Properties PLC 2023
GOVERNANCE Independent auditor’s report
OTHER INFORMATION
The other information comprises the information included in the
annual report other than the financial statements and our auditor’s
report thereon. The directors are responsible for the other
information contained within the annual report. Our opinion on the
financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise
to a material misstatement in the financial statements themselves. If,
based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
OUR OPINION ON THE REMUNERATION
REPORT
Kreston Reeves has audited the Annual remuneration report set out
on pages 27 to 31 of the Annual Report for the year ended 31
December 2023. The directors of the Company are responsible for
the preparation and presentation of the Remuneration Report in
accordance with the Companies Act 2006. Kreston Reeves’
responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with International
Accounting Standards. In Kreston Reeves’ opinion, the
Remuneration Report of the Group for the year, complies with the
requirements of the Companies Act 2006.
OUR CONSIDERATION OF CLIMATE CHANGE
RELATED RISKS
The financial impacts on the Group of climate change and the
transition to a low carbon economy (“climate change”) were
considered in our audit where they have the potential to directly or
indirectly impact key judgements and estimates within the financial
statements.
The Group continues to develop its assessment of the potential
impacts of climate change. Climate risks have the potential to
materially impact the key judgements and estimates within the
financial report. Our audit considered those risks that could be
material to the key judgement and estimates in the assessment of
the carrying value of non-current assets and closure and
rehabilitation provisions.
OPINIONS ON OTHER MATTERS PRESCRIBED
BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course of the
audit:
• the information given in the strategic report and the directors’
report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared
in accordance with applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED TO
REPORT BY EXCEPTION
In the light of our knowledge and understanding of the Group and
parent company and its environment obtained in the course of the
audit, we have not identified material misstatements in the strategic
report or the directors’ report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
• adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the parent company financial statements are not in agreement
with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are
not made; or
• we have not received all the information and explanations we
require for our audit
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities statement
(set out on page 36), the directors are responsible for the
preparation of the financial statements and for being satisfied that
they give a true and fair view, and for such internal control as the
directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are responsible
for assessing the Group’s and parent company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or parent company or
to cease operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT
OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the
basis of these financial statements.
Capability of the audit in detecting irregularities,
including fraud
Based on our understanding of the group and industry, and through
discussion with the directors and other management (as required by
auditing standards), we identified that the principal risks of non-
compliance with laws and regulations related to health and safety,
anti-bribery and employment law. We considered the extent to
which non-compliance might have a material effect on the financial
statements. We also considered those laws and regulations that
have a direct impact on the preparation of the financial statements
such as the Companies Act 2006. We communicated identified laws
and regulations throughout our team and remained alert to any
indications of non-compliance throughout the audit. We evaluated
management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of
override of controls) and determined that the principal risks were
related to: posting inappropriate journal entries to increase revenue
or reduce expenditure, management bias in accounting estimates
and judgemental areas of the financial statements such as the
valuation of investment properties. Audit procedures performed by
the group engagement team and component auditors included:
• Obtaining an understanding of the legal and regulatory
frameworks that are applicable to the Group and determined that
the most significant are those that relate to the reporting
framework and the relevant tax compliance regulations in the
London & Associated Properties PLC 2023 43
GOVERNANCE Independent auditor’s report
jurisdictions in which London & Associated Properties PLC
operates. In addition, we concluded that there are certain
significant laws and regulations that may have an effect on the
determination of the amounts and disclosures in the financial
statements, mainly relating to health and safety, employee
matters, bribery and corruption practices, environmental and
certain aspects of company legislation recognising the regulated
nature of the Group’s mining activities and its legal form.
• Detailed discussions were held with management to identify any
known or suspected instances of non- compliance with laws and
regulations.
• Identifying and assessing the design effectiveness of controls that
management has in place to prevent and detect fraud.
• Challenging assumptions and judgements made by management
in its significant accounting estimates, including assessing the
capabilities of the property valuers and discussing with the
valuers how their valuations were calculated and the data and
assumptions they have used to calculate these. For the
impairment review of the mines, we have undertaken a sensitivity
analysis on the life of the mine model and challenged the
assumptions made by management.
• Performing analytical procedures to identify any unusual or
unexpected relationships, including related party transactions,
that may indicate risks of material misstatement due to fraud.
• Confirmation of related parties with management, and review of
transactions throughout the period to identify any previously
undisclosed transactions with related parties outside the normal
course of business.
• Reading minutes of meetings of those charged with governance,
and reviewing correspondence with relevant tax and regulatory
authorities.
• Performing integrity testing to verify the legitimacy of banking
records obtained from management.
• Review of significant and unusual transactions and evaluation of
the underlying financial rationale supporting the transactions.
• Identifying and testing journal entries, in particular any manual
entries made at the year-end for financial statement preparation.
• We ensured our global audit team (including Kreston Reeves and
our component auditors) has industry experience through
working for many years on relevant audits, including experience
of mining and investment property management. Our audit
planning included considering external market factors, for
example geopolitical risk, the potential impact of climate change,
commodity price risk and major trends in the relevant industries.
Because of the inherent limitations of an audit, there is a risk that
we will not detect all irregularities, including those leading to a
material misstatement in the financial statements or non-compliance
with regulation. This risk increases the more that compliance with a
law or regulation is removed from the events and transactions
reflected in the financial statements, as we will be less likely to
become aware of instances of non-compliance.
As part of an audit in accordance with ISAs (UK), we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by the directors.
• Conclude on the appropriateness of the directors’ use of the
going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the
Group’s or the parent company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related
disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group or the
parent company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the
financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within
the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and
performance of the Group audit. We remain solely responsible for
our audit opinion.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
OTHER MATTERS WHICH WE ARE REQUIRED
TO ADDRESS
We were reappointed by the audit committee in the year to audit
the financial statements. Our total uninterrupted period of
engagement is 3 years, covering the years ended 31 December
2021 and 31 December 2023.
The non-audit services prohibited by the FRC’s Ethical Standard
were not provided to the group or the parent company and we
remain independent of the group and the parent company in
conducting our audit.
During the period under review, agreed upon procedures were completed
in respect of a number of the group’s service charge accounts.
Our audit opinion is consistent with the additional report to the
audit committee.
USE OF OUR REPORT
This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them in
an auditor 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 and the company’s members as a body, for
our audit work, for this report, or for the opinions we have formed.
Stephen Tanner BSc(Econ) FCA (Senior Statutory Auditor)
For and on behalf of
Kreston Reeves LLP
Chartered Accountants
Statutory Auditor
London
Date: 29 April 2024
44 London & Associated Properties PLC 2023
| 2023 | 2022 | ||
| NOTES | £'000 | £'000 | |
Group revenue | 1 | ||
Operating costs | 1 | ( | ( |
Operating profit | |||
Finance income | 4 | ||
Finance expenses | 4 | ( | ( |
Result before revaluation and other movements | ( | ||
| Non–cash changes in valuation of assets and liabilities and other movements | |||
Exchange losses | ( | ( | |
Decrease in value of investment properties | 9 | ( | ( |
Loss on disposal of investment properties | ( | ||
Profit on disposal of fixed assets | |||
Gain on investments held at fair value (Bisichi) | |||
Loss on disposal of subsidiary | 6 | ( | |
Decrease in value of other investments | ( | ||
Adjustment to interest rate derivative | 20 | ||
(Loss)/profit for the year before taxation | 2 | ( | |
Income tax charge | 5 | ( | ( |
(Loss)/profit for the year | ( | ||
| Attributable to: | |||
Equity holders of the Company | ( | ||
Non-controlling interest | 25 | ||
(Loss)/profit for the year | ( | ||
| Earnings per share | |||
(Loss)/profit per equity share - basic and diluted | 8 | ( |
Consolidated statement of comprehensive income
for the year ended 31 December 2023
| 2023 | 2022 | |
| £'000 | £'000 | |
(Loss)/profit for the year | ( | |
| Other comprehensive expense: | ||
| Items that may be subsequently recycled to the income statement: | ||
Exchange differences on translation of Bisichi PLC foreign operations | ( | ( |
Other comprehensive expense for the year net of tax | ( | ( |
Total comprehensive (expense)/income for the year net of tax | ( | |
| Attributable to: | ||
Equity shareholders | ( | |
Non–controlling interest | ( | |
Total comprehensive (expense)/income for the year net of tax | ( |
FINANCIAL
STATEMENTS
Consolidated income statement
for the year ended 31 December 2023
financial state-
ments
London & Associated Properties PLC 2023 45
FINANCIAL STATEMENTS
Consolidated balance sheet
at 31 December 2023
| 2023 | 2022 | ||
| NOTES | £'000 | £'000 | |
| Non–current assets | |||
Market value of properties attributable to Group | 9 | ||
Present value of head leases | 9 | ||
Property | |||
Mining reserves, property, plant and equipment | 10 | ||
Other investments at fair value through profit and loss (“FVPL”) | 15 | ||
Deferred tax | 23 | ||
| Current assets | |||
Inventories - Property | 13 | ||
Inventories - Mining | 14 | ||
Assets held for sale | 11 | ||
Trade and other receivables | 16 | ||
Investments in listed securities held at FVPL | 17 | ||
Cash and cash equivalents | |||
Total assets | |||
| Current liabilities | |||
Trade and other payables | 18 | ( | ( |
Borrowings | 19 | ( | ( |
Lease liabilities | 20 | ( | ( |
Current tax liabilities | ( | ( | |
( | ( | ||
| Non–current liabilities | |||
Borrowings | 19 | ( | ( |
Lease liabilities | 20 | ( | ( |
Provisions | 21 | ( | ( |
Deferred tax liabilities | 23 | ( | |
( | ( | ||
Total liabilities | ( | ( | |
Net assets | |||
| Equity attributable to the owners of the parent | |||
Share capital | 24 | ||
Share premium account | |||
Translation reserve (Bisichi PLC) | ( | ( | |
Capital redemption reserve | |||
Retained earnings (excluding treasury shares) | |||
Treasury shares | 24 | ( | ( |
Retained earnings | |||
Total equity attributable to equity shareholders | |||
Non–controlling interest | 25 | ||
Total equity | |||
Net assets per share attributable to equity shareholders | 8 | ||
Diluted net assets per share | 8 |
Director Director
46 London & Associated Properties PLC 2023
FINANCIAL STATEMENTSFINANCIAL STATEMENTS
Consolidated statement of changes in shareholders’ equity
for the year ended 31 December 2023
| RETAINED | TOTAL | ||||||||
| CAPITAL | EARNINGS | EXCLUDING | NON– | ||||||
| TRANSLA- | REDEMP- | EXCLUDING | NON– | CON- | |||||
| SHARE | SHARE | TION | TION | TREASURY | TREASURY | CONTROLLING | TROLLING | TOTAL | |
| CAPITAL | PREMIUM | RESERVES | RESERVE | SHARES | SHARES | INTERESTS | INTERESTS | EQUITY | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
Balance at 1 January 2022 | ( | ( | |||||||
Profit for year | |||||||||
| Other comprehensive expense: | |||||||||
Currency translation | ( | ( | ( | ( | |||||
Total other comprehensive expense | ( | ( | ( | ( | |||||
Total comprehensive income | ( | ||||||||
| Transactions with owners: | |||||||||
Share options charge | |||||||||
Dividends – equity holders | ( | ( | |||||||
Dividends – non–controlling interests | ( | ( | |||||||
Transactions with owners | ( | ( | |||||||
Balance at 31 December 2022 | ( | ( | |||||||
(Loss)/profit for year | ( | ( | ( | ||||||
| Other comprehensive expense: | |||||||||
Currency translation | ( | ( | ( | ( | |||||
Total other comprehensive expense | ( | ( | ( | ( | |||||
Total comprehensive expense | ( | ( | ( | ( | ( | ||||
| Transactions with owners: | |||||||||
Dividends – non–controlling interests | ( | ( | |||||||
Transactions with owners | ( | ( | |||||||
Balance at 31 December 2023 | ( | ( |
London & Associated Properties PLC 2023 47
FINANCIAL STATEMENTSFINANCIAL STATEMENTS
Consolidated cash flow statement
for the year ended 31 December 2023
| 2023 | 2022 | ||
| NOTES | £’000 | £’000 | |
| Operating activities | |||
(Loss)/profit for the year before taxation | ( | ||
Finance income | 4 | ( | ( |
Finance expense | 4 | ||
Decrease in value of investment properties | 9 | ||
Gain on investments held at FVPL (Bisichi) | 6 | ( | ( |
Loss on disposal of subsidiary | |||
Decrease in value of other investments | |||
Adjustment to interest rate derivative | 22 | ( | |
Loss on sale of investment properties | |||
Depreciation | 10 | ||
Profit on disposal of non-current assets | ( | ( | |
Share based payment expense | |||
Development expenditure on inventories | 13 | ( | ( |
Exchange adjustments | |||
Change in inventories | ( | ||
Change in receivables | ( | ||
Change in payables | |||
Cash generated from operations | |||
Income tax refunded / (paid) | ( | ||
Cash inflows from operating activities | |||
| Investing activities | |||
Disposal of subsidiary | ( | ||
Acquisition of investment properties, mining reserves, plant and equipment | ( | ( | |
Sale of plant and equipment | |||
Sale of investment properties | |||
Disposal of other investments | |||
Acquisition of other investments | ( | ( | |
Interest received | |||
Cash outflows from investing activities | ( | ( | |
| Financing activities | |||
Interest paid | ( | ( | |
Interest obligation under finance leases | ( | ( | |
Repayment of lease liability | ( | ( | |
Lease assignment costs paid | ( | ||
Receipt of bank loan - Bisichi PLC | |||
Repayment of bank loan - Bisichi PLC | ( | ( | |
Repayment of bank loan - Dragon Retail Properties Ltd | ( | ( | |
Receipt of bank loan - London & Associated Properties PLC | |||
Repayment of bank loan - London & Associated Properties PLC | ( | ( | |
Equity dividends paid | ( | ( | |
Equity dividends paid - non-controlling interests | ( | ||
Cash outflows from financing activities | ( | ( | |
Net (decrease)/increase in cash and cash equivalents | ( | ||
Cash and cash equivalents at beginning of year | |||
Exchange adjustment | ( | ||
Cash and cash equivalents at end of year |
The cash flows above relate to continuing operations.
CASH AND CASH EQUIVALENTS
For the purpose of the cash flow statement, cash and cash equivalents comprise the following balance sheet amounts:
| 2023 | 2022 | ||
| £’000 | £’000 | ||
Cash and cash equivalents (before bank overdrafts) | |||
Bank overdrafts | 19 | ( | ( |
Cash and cash equivalents at end of year |
£195,000 of cash deposits at 31 December 2023 were charged as security to bank loans (2022: £349,000 ).
Group accounting policies
48 London & Associated Properties PLC 2023
FINANCIAL STATEMENTSFINANCIAL STATEMENTS
Group accounting policies
The following are the principal Group accounting policies:
£1 STERLING: RAND | £1 STERLING: DOLLAR | |||||
2023 | 2022 | 2023 | 2022 | |||
Year-end rate | 23.3014 | 20.5785 | 1.2732 | 1.2102 | ||
Annual average | 22.9364 | 20.1929 | 1.2389 | 1.2967 |
London & Associated Properties PLC 2023 49
FINANCIAL STATEMENTS Group accounting policies
50 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Group accounting policies
London & Associated Properties PLC 2023 51
FINANCIAL STATEMENTS Group accounting policies
52 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Group accounting policies
London & Associated Properties PLC 2023 53
FINANCIAL STATEMENTS Group accounting policies
54 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Group accounting policies
London & Associated Properties PLC 2023 55
FINANCIAL STATEMENTSFINANCIAL STATEMENTS
Notes to the financial statements
for the year ended 31 December 2023
| 2023 | ||||
| LAP | BISICHI | DRAGON | TOTAL | |
| BUSINESS ANALYSIS | £’000 | £’000 | £’000 | £’000 |
Rental income | 3,323 | 1,051 | 168 | 4,542 |
Service charge income | 451 | 181 | 6 | 638 |
Management income from third party properties | 18 | – | – | 18 |
Mining | – | 47,985 | – | 47,985 |
Group Revenue | 3,792 | 49,217 | 174 | 53,183 |
Direct property costs | (1,553) | (209) | (10) | (1,772) |
Direct mining costs | – | (38,548) | – | (38,548) |
Overheads | (2,254) | (7,649) | (33) | (9,936) |
Depreciation | (266) | (1,493) | (2) | (1,761) |
Operating (loss)/profit | (281) | 1,318 | 129 | 1,166 |
Finance income | 110 | 222 | – | 332 |
Finance expenses | (2,094) | (1,473) | (79) | (3,646) |
Result before valuation movements | (2,265) | 67 | 50 | (2,148) |
| Other segment items | ||||
Net (decrease)/increase on revaluation of investment properties | (150) | 145 | – | (5) |
Exchange losses | – | (158) | – | (158) |
Decrease in value of other investments | – | – | (6) | (6) |
Net increase on revaluation of investments held for trading | – | 759 | – | 759 |
Profit on disposal of fixed assets | 4 | – | – | 4 |
Loss on disposal of subsidiary | (1,930) | – | – | (1,930) |
Revaluation and other movements | (2,076) | 746 | (6) | (1,336) |
(Loss)/profit for the year before taxation | (4,341) | 813 | 44 | (3,484) |
| Segment assets | ||||
- Non-current assets - property | 23,801 | 10,818 | 2,030 | 36,649 |
- Non-current assets - plant & equipment | 268 | 18,896 | – | 19,164 |
- Non-current assets - other | – | 14,258 | – | 14,258 |
- Non-current assets - deferred tax asset | 114 | 318 | – | 432 |
- Inventory - property | 8,889 | – | – | 8,889 |
- Current assets - others | 1,123 | 9,490 | 113 | 10,726 |
- Assets held for sale | 545 | – | – | 545 |
- Cash & cash equivalents | 3,799 | 3,123 | 56 | 6,978 |
Total assets | 38,539 | 56,903 | 2,199 | 97,641 |
| Segment liabilities | ||||
Borrowings | (17,650) | (7,483) | (950) | (26,083) |
Current liabilities | (3,238) | (16,748) | (62) | (20,048) |
Non-current liabilities | (1,272) | (1,925) | – | (3,197) |
Total liabilities | (22,160) | (26,156) | (1,012) | (49,328) |
Net assets | 16,379 | 30,747 | 1,187 | 48,313 |
| UNITED | SOUTH | 2023 | |
| KINGDOM | AFRICA | TOTAL | |
| GEOGRAPHIC ANALYSIS | £’000 | £’000 | £’000 |
Revenue | 5,760 | 47,423 | 53,183 |
Operating (loss)/profit | (481) | 1,647 | 1,166 |
Non-current assets excluding investments | 37,086 | 19,159 | 56,245 |
Total net assets | 40,747 | 7,566 | 48,313 |
Capital expenditure | 81 | 5,909 | 5,990 |
56 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
1. RESULTS FOR THE YEAR AND SEGMENTAL ANALYSIS CONTINUED
| 2022 | ||||
| LAP | BISICHI | DRAGON | TOTAL | |
| BUSINESS ANALYSIS | £’000 | £’000 | £’000 | £’000 |
Rental income | 4,175 | 955 | 207 | 5,337 |
Service charge income | 788 | 98 | – | 886 |
Management income from third party properties | 18 | – | – | 18 |
Mining | – | 94,002 | – | 94,002 |
Group Revenue | 4,981 | 95,055 | 207 | 100,243 |
Direct property costs | (1,994) | (69) | (18) | (2,081) |
Impairment of inventory - property | (3,098) | – | – | (3,098) |
Direct mining costs | – | (43,209) | – | (43,209) |
Overheads | (2,665) | (12,251) | (65) | (14,981) |
Depreciation | (265) | (1,093) | (3) | (1,361) |
Operating profit | (3,041) | 38,433 | 121 | 35,513 |
Finance income | 24 | 175 | – | 199 |
Finance expenses | (2,120) | (1,047) | (51) | (3,218) |
Result before valuation movements | (5,137) | 37,561 | 70 | 32,494 |
| Other segment items | ||||
Net decrease on revaluation of investment properties | (5) | (60) | (50) | (115) |
Loss on disposal of investment properties | (83) | – | – | (83) |
Exchange losses | – | (270) | – | (270) |
Net increase on revaluation of investments held for trading | – | 1,036 | – | 1,036 |
Profit on disposal of fixed assets | 36 | – | – | 36 |
Adjustment to interest rate derivative | 70 | – | – | 70 |
Revaluation and other movements | 18 | 706 | (50) | 674 |
(Loss)/profit for the year before taxation | (5,119) | 38,267 | 20 | 33,168 |
| Segment assets | ||||
- Non-current assets - property | 24,497 | 10,635 | 2,030 | 37,162 |
- Non-current assets - plant & equipment | 543 | 16,377 | 8 | 16,928 |
Other investments at fair value through profit and loss account | – | 12,590 | – | 12,590 |
Inventory - property | 22,862 | – | – | 22,862 |
Current assets - others | 1,328 | 12,280 | 270 | 13,878 |
Cash & cash equivalents | 4,685 | 10,712 | 107 | 15,504 |
Total assets | 53,915 | 62,594 | 2,415 | 118,924 |
| Segment liabilities | ||||
Borrowings | (30,306) | (7,725) | (1,143) | (39,174) |
Current liabilities | (4,253) | (17,418) | (57) | (21,728) |
Non-current liabilities | (1,375) | (2,932) | – | (4,307) |
Total liabilities | (35,934) | (28,075) | (1,200) | (65,209) |
Net assets | 17,981 | 34,519 | 1,215 | 53,715 |
| UNITED | SOUTH | 2022 | |
| KINGDOM | AFRICA | TOTAL | |
| GEOGRAPHIC ANALYSIS | £’000 | £’000 | £’000 |
Revenue | 6,849 | 93,394 | 100,243 |
Operating (loss)/profit | (7,429) | 42,942 | 35,513 |
Non-current assets excluding investments | 37,767 | 16,323 | 54,090 |
Total net assets | 46,439 | 7,276 | 53,715 |
Capital expenditure | 2,629 | 8,434 | 11,063 |
London & Associated Properties PLC 2023 57
FINANCIAL STATEMENTS Notes to the financial statements
| 2023 | 2022 | |
| £’000 | £’000 | |
| Profit before taxation is stated after charging/(crediting): | ||
Staff costs (see note 25) | 8,860 | 13,676 |
Depreciation on tangible fixed assets - owned assets | 1,495 | 1,099 |
Depreciation on tangible fixed assets - right of use | 266 | 263 |
Exchange loss | (158) | (270) |
Impairment of inventory | – | 3,098 |
Inventories recognised as an expense | 777 | 747 |
| Amounts payable to the auditor in respect of both audit and non-audit services | ||
| Audit services | ||
Statutory - Company and consolidation | 30 | 35 |
Subsidiaries - audited by KR | 129 | 102 |
Subsidiaries - audited by other auditors | 40 | 43 |
199 | 180 |
| 2023 | 2022 | |
| £’000 | £’000 | |
Emoluments | 1,890 | 1,794 |
Defined contribution pension scheme contributions | 138 | 49 |
2,028 | 1,843 |
| 2023 | 2022 | |
| £’000 | £’000 | |
Finance income | 332 | 199 |
| Finance expenses | ||
Interest on bank loans and overdrafts | (2,658) | (1,862) |
Unwinding of discount (Bisichi) | (112) | (319) |
Other loans | (705) | (837) |
Interest on lease obligations | (171) | (200) |
Total finance expenses | (3,646) | (3,218) |
5. INCOME TAX
| 2023 | 2022 | |
| £’000 | £’000 | |
| Current tax | ||
Corporation tax on profit of the period | 1,318 | 11,522 |
Corporation tax on profit of previous periods | – | 15 |
Total current tax | 1,318 | 11,537 |
| Deferred tax | ||
Loss relief | (313) | (1,563) |
Origination of timing differences | (131) | 21 |
Revaluation of investment properties | 124 | 794 |
Accelerated capital allowances | 725 | 1,592 |
Unredeemed capital reductions | (1,416) | (379) |
Total deferred tax (note 23) | (1,011) | 465 |
Tax on profit on ordinary activities | 307 | 12,002 |
58 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
5. INCOME TAX CONTINUED
| 2023 | 2022 | |
| £’000 | £’000 | |
(Loss)/profit for the year before taxation | (3,484) | 33,168 |
Taxation at 23.5 per cent (2022: 19 per cent) | (819) | 6,302 |
| Effects of: | ||
Capital losses on disposal | – | (308) |
Other differences | 94 | 543 |
Disallowable expenses (Bisichi) | 241 | – |
Impairment of Investment | 367 | – |
Losses not recognised | 968 | 155 |
Non-taxable income | (224) | (255) |
Changes in fair values of properties not subject to tax | (391) | 1,060 |
Adjustment in respect of prior years | – | 15 |
Deferred tax rate adjustment | 71 | 4,490 |
Income tax charge for the year | 307 | 12,002 |
| 2023 | 2022 | |
| £'000 | £’000 | |
Corporation tax | - | 2 |
Adjustment in respect of prior years | - | 15 |
Current tax | - | 17 |
Deferred tax | (86) | (860) |
(86) | (843) |
| 2023 | 2022 | |
| £'000 | £’000 | |
Corporation tax | 1,318 | 11,520 |
Current tax | 1,318 | 11,520 |
Deferred tax | (925) | 1,325 |
393 | 12,845 |
London & Associated Properties PLC 2023 59
FINANCIAL STATEMENTS Notes to the financial statements
| 7 MONTHS TO | ||
| JULY 2023 | 2022 | |
| £’000 | £’000 | |
Gross property income | 1,258 | 2,104 |
Direct property costs | (646) | (1,064) |
Impairment of Inventory | – | (2,750) |
Net property income | 612 | (1,710) |
Overheads | (34) | (234) |
Net revenue from property | 578 | (1,944) |
Net finance expenses | (750) | (978) |
Interest rate derivatives | – | 70 |
Income tax | (19) | 19 |
Profit before tax attributable to shareholders | (191) | (2,833) |
| JULY 2023 | 2022 | |
| £’000 | £’000 | |
Cash flows from operating activities | 474 | 1,044 |
Cash flows from investing activities | (12) | (10) |
Cash flows from financing activities | (882) | (1,023) |
Net cash (outflow) / inflow | (420) | 11 |
| JULY 2023 | 2022 | |
| £’000 | £’000 | |
Inventory - property | 14,750 | 14,750 |
Trade and other receivables | 262 | 375 |
Cash and cash equivalents | 148 | 569 |
Total assets | 15,160 | 15,694 |
Current borrowings | (12,654) | (12,715) |
Trade and other payables | (565) | (947) |
Balances owed to other group companies | (1,317) | (1,217) |
Total liabilities | (14,536) | (14,879) |
Net assets | 624 | 815 |
| 2023 | 2022 | |
| £’000 | £’000 | |
Loss on disposal of subsidiary | (1,930) | – |
60 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
7. DIVIDEND
No dividends were paid in the year relating to the current or prior period (2022: Nil)
The Directors are not recommending a final dividend for 2023 (2022: Nil).
2023 | 2022 | |
(Loss) / profit attributable to equity shareholders for the year (£’000) | (3,861) | 2,704 |
Weighted average number of ordinary shares in issue (’000) | 85,326 | 85,326 |
(Loss) / profit per equity share | (4.52)p | 3.17p |
Weighted average number of ordinary shares in issue for the purpose of diluted (loss)/profit per share (’000) | 85,326 | 85,326 |
Fully diluted (loss) / profit per share | (4.52)p | 3.17p |
2023 | 2022 | |
Net assets attributable to equity shareholders (£’000) | 28,490 | 32,546 |
Shares in issue (’000) | 85,326 | 85,326 |
Net assets per equity share | 33.38p | 38.14p |
Net assets diluted (£’000) | 28,490 | 32,546 |
Shares in issue (’000) | 85,326 | 85,326 |
Diluted net assets per share | 33.38p | 38.14p |
LEASEHOLD | LEASEHOLD | |||
| UNDER 50 | ||||
| TOTAL | FREEHOLD | OVER 50 YEARS | YEARS | |
| £’000 | £’000 | £’000 | £’000 | |
Cost or valuation at 1 January 2023 | 37,162 | 29,679 | 7,298 | 185 |
Transfer to assets held for sale (note 11) | (545) | (545) | – | – |
Additions | 38 | – | 38 | – |
Decrease in present value of head leases | (1) | – | (1) | – |
(Decrease)/increase on revaluation | (5) | 116 | (111) | (10) |
At 31 December 2023 | 36,649 | 29,250 | 7,224 | 175 |
| Representing assets stated at: | ||||
Valuation | 35,060 | 29,250 | 5,640 | 170 |
Present value of head leases | 1,589 | – | 1,584 | 5 |
36,649 | 29,250 | 7,224 | 175 | |
At 31 December 2023 | 36,649 | 29,250 | 7,224 | 175 |
At 31 December 2022 | 37,162 | 29,679 | 7,298 | 185 |
London & Associated Properties PLC 2023 61
FINANCIAL STATEMENTS Notes to the financial statements
9. INVESTMENT PROPERTIES CONTINUED
| LEASEHOLD | LEASEHOLD | |||
| OVER | UNDER | |||
| TOTAL | FREEHOLD | 50 YEARS | 50 YEARS | |
| £’000 | £’000 | £’000 | £’000 | |
Cost or valuation at 1 January 2022 | 41,166 | 27,023 | 13,936 | 207 |
Additions | 2,531 | 2,531 | – | – |
Disposals | (5,695) | – | (5,695) | – |
Decrease in present value of head leases | (725) | – | (724) | (1) |
(Decrease)/increase on revaluation | (115) | 125 | (219) | (21) |
At 31 December 2022 | 37,162 | 29,679 | 7,298 | 185 |
| Representing assets stated at: | ||||
Valuation | 35,610 | 29,679 | 5,751 | 180 |
Present value of head leases | 1,552 | – | 1,547 | 5 |
37,162 | 29,679 | 7,298 | 185 |
| 2023 | 2022 | |
| £’000 | £’000 | |
Allsop LLP | 24,450 | 25,145 |
Carter Towler | 10,610 | 10,465 |
35,060 | 35,610 | |
| Add: present value of headleases | 1,589 | 1,552 |
36,649 | 37,162 |
2023 | 2022 | |||||
| LEASEHOLD | LEASEHOLD | LEASEHOLD | LEASEHOLD | |||
| OVER 50 | UNDER 50 | OVER 50 | UNDER 50 | |||
| FREEHOLD | YEARS | YEARS | FREEHOLD | YEARS | YEARS | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
Cost at 1 January | 33,283 | 9,551 | 785 | 30,753 | 18,883 | 785 |
| Transfer to assets held for sale | ||||||
(note 11) | (581) | – | – | – | – | – |
Additions | – | – | – | 2,530 | – | – |
Disposals | – | – | – | – | (9,332) | – |
Cost at 31 December | 32,702 | 9,551 | 785 | 33,283 | 9,551 | 785 |
62 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
9. INVESTMENT PROPERTIES CONTINUED
| CARRYING / | RANGE | |||||
| FAIR VALUE | CARRYING/ FAIR | (WEIGHTED | RANGE | |||
| CLASS OF PROPERTY | 2023 | VALUE 2022 | VALUATION | KEY UNOBSERVABLE | AVERAGE) | (WEIGHTED |
| LEVEL 3 | £'000 | £’000 | TECHNIQUE | INPUTS | 2023 | AVERAGE) 2022 |
| Freehold – external | 29,795 | 29,679 | Income capitalisation | Estimated Rental Value | £4 – £34 | £4 – £33 |
| valuation | Per sq ft p.a | (£16) | (£17) | |||
| Equivalent Yield | 5.3% – 14.3% | 5.3% – 15.7% | ||||
| (9.2%) | (8.9%) | |||||
| Leasehold over | 5,640 | 5,751 | Income capitalisation | Estimated Rental Value | £5 – £10 | £5 – £10 |
| 50 years – | Per sq ft p.a | (£7) | (£6) | |||
| external valuation | Equivalent Yield | 5.8% – 23.7% | 5.8% – 22.5% | |||
| (18.6%) | (17.8%) | |||||
| Leasehold under | 170 | 180 | Income capitalisation | Estimated Rental Value | £5 – £5 | £5 - £5 |
| 50 years – external | Per sq ft p.a | (£5) | (£5) | |||
| valuation | Equivalent Yield | 32.6% – 32.6% | 31.1% – 31.1% | |||
| (32.6%) | (31.1%) | |||||
At 31 December | 35,605 | 35,610 |
| ESTIMATED RENTAL VALUE | EQUIVALENT YIELD | ||||||
| 10% INCREASE OR (DECREASE) | 25 BASIS POINT CONTRACTION | ||||||
| OR (EXPANSION) | |||||||
| 2023 | 2022 | 2023 | 2022 | ||||
| £'000 | £'000 | £'000 | £'000 | ||||
Freehold – external valuation | 2,977 | (2,977) | 2,965(2,965) | 925 | (868) | 950(890) | |
Leasehold over 50 years – external valuation | 564 | (564) | 575(575) | 99 | (96) | 106(102) | |
Leasehold under 50 years – external valuation | 17 | (17) | 18(18) | 1 | (1) | 1/(1) |
London & Associated Properties PLC 2023 63
FINANCIAL STATEMENTS Notes to the financial statements
10. MINING RESERVES, PLANT AND EQUIPMENT
| RIGHT OF | OFFICE | ||||
| USE ASSET | EQUIPMENT | ||||
| MINING | MINING | - OFFICE | AND MOTOR | ||
| TOTAL | RESERVES | EQUIPMENT | BUILDING | VEHICLES | |
| £’000 | £’000 | £’000 | £’000 | £’000 | |
Cost at 1 January 2023 | 40,072 | 2,332 | 36,291 | 796 | 653 |
Exchange adjustment | (4,653) | (273) | (4,333) | – | (47) |
Valuation decrease | (6) | – | – | – | (6) |
Additions | 5,952 | – | 5,903 | – | 49 |
Disposals in year | (19) | – | – | – | (19) |
At 31 December 2023 | 41,346 | 2,059 | 37,861 | 796 | 630 |
Accumulated depreciation at 1 January 2023 | 23,144 | 1,099 | 21,347 | 307 | 391 |
Exchange adjustment | (2,721) | (174) | (2,517) | – | (30) |
Charge for the year | 1,761 | – | 1,443 | 266 | 52 |
Disposals in year | (2) | – | – | – | (2) |
Accumulated depreciation at 31 December 2023 | 22,182 | 925 | 20,273 | 573 | 411 |
Net book value at 31 December 2023 | 19,164 | 1,134 | 17,588 | 223 | 219 |
Cost at 1 January 2022 | 31,669 | 1,097 | 29,063 | 788 | 721 |
Exchange adjustment | 125 | (13) | 134 | – | 4 |
Valuation increase | (38) | – | – | (38) | – |
Additions | 8,532 | 1,248 | 7,117 | 46 | 121 |
Disposals | (216) | – | (23) | – | (193) |
Cost at 31 December 2022 | 40,072 | 2,332 | 36,291 | 796 | 653 |
Accumulated depreciation at 1 January 2022 | 21,752 | 1,089 | 20,166 | 44 | 453 |
Exchange adjustment | 180 | 10 | 166 | – | 4 |
Charge for the year | 1,362 | – | 1,038 | 263 | 61 |
Disposals in year | (150) | – | (23) | – | (127) |
Accumulated depreciation at 31 December 2022 | 23,144 | 1,099 | 21,347 | 307 | 391 |
Net book value at 31 December 2022 | 16,928 | 1,233 | 14,944 | 489 | 262 |
Included in the above line items are right-of-use assets over the following:
| OFFICE | ||||
| EQUIPMENT | ||||
| MINING | OFFICE | AND MOTOR | ||
| TOTAL | EQUIPMENT | BUILDING | VEHICLES | |
| £’000 | £’000 | £’000 | £’000 | |
Net book value at 1 January 2023 | 664 | 186 | 457 | 21 |
Additions | 27 | - | - | 27 |
Disposals | (26) | (26) | - | - |
Depreciation | (295) | (29) | (249) | (17) |
Net book value at 31 December 2023 | 370 | 131 | 208 | 31 |
Net book value at 1 January 2022 | 1,011 | 219 | 744 | 48 |
Exchange adjustment | 5 | 5 | – | – |
Revaluation | (38) | – | (38) | – |
Depreciation | (314) | (38) | (249) | (27) |
Net book value at 31 December 2022 | 664 | 186 | 457 | 21 |
11. ASSETS HELD FOR SALE
| 2023 | 2022 | |
| £’000 | £’000 | |
At 1 January | – | 504 |
Transfer from investment property (note 9) | 545 | – |
Disposal | – | (504) |
At 31 December | 545 | – |
A decision to sell our retail and residential property in Rugeley was made in 2023 which will now go to auction in Q2 2024. The property
was therefore reclassified as an asset held for sale at 31 December 2023.
64 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
| PERCENTAGE | ||||
| OF SHARE | COUNTRY OF | |||
ENTITY | ACTIVITY | CAPITAL | REGISTERED ADDRESS | INCORPORATION |
Analytical Properties Holdings Limited * | Property | 100% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
Analytical Properties Limited | Property | 100% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
LAP Ocean Holdings Limited * | Property | 100% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
London & Associated (Rugeley) Limited | Dormant | 100% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
London & Associated Securities Limited | Dormant | 100% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
London & Associated Management Services Limited* | Property | 100% | 12 Little Portland Street, | England and Wales |
| Management | London W1W 8BJ | |||
| Services | ||||
Orchard Chambers Residential Limited | Dormant | 100% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
Orchard Square Limited | Property | 100% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
Bisichi PLC (note C) | Coal mining | 41.602% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
Mineral Products Limited (notes A, C) | Share dealing | 100% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
Bisichi (Properties) Limited (notes A, C) | Property | 100% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
Bisichi Mining (Exploration) Limited (notes A, C) | Holding | 100% | 12 Little Portland Street, | England and Wales |
| company | London W1W 8BJ | |||
Sisonke Coal Processing (pty) Limited (notes A, C) | Coal | 62.5% | Samora Machel Street, | South Africa |
| processing | Bethal Road, Middelburg, | |||
| Mpumalanga, 1050 | ||||
Black Wattle Colliery (Pty) Limited (notes A, C) | Coal mining | 62.5% | Samora Machel Street, | South Africa |
| Bethal Road, Middelburg, | ||||
| Mpumalanga, 1050 | ||||
Bisichi Coal Mining (Pty) Limited (notes A, C) | Coal mining | 100% | Samora Machel Street, | South Africa |
| Bethal Road, Middelburg, | ||||
| Mpumalanga, 1050 | ||||
Urban First (Northampton) Limited (notes A, C) | Dormant | 100% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
Bisichi Trustee Limited (notes A, C) | Property | 100% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
| Bisichi Mining Management Services Limited | Dormant | 100% | 12 Little Portland Street, | England and Wales |
| (notes A, C) | London W1W 8BJ | |||
Ninghi Marketing Limited (notes A, C) | Dormant | 90.1% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
Bisichi Northampton Limited (notes A, C) | Property | 100% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
| Amandla Ehtu Mineral Resource Development (Pty) | Dormant | 70% | Samora Machel Street, | South Africa |
| Limited (notes A, C) | Bethal Road, Middelburg, | |||
| Mpumalanga, 1050 | ||||
Black Wattle Klipfontein (Pty) Limited (notes A, C) | Coal mining | 62.5% | Samora Machel Street, | South Africa |
| Bethal Road, Middelburg, | ||||
| Mpumalanga, 1050 | ||||
Dragon Retail Properties Limited (notes B, C) | Property | 50% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
West Ealing Projects Limited (notes B, C) | Property | 50% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
Broadway Regen Limited (notes C, D) | Property | 90% | 73 Cornhill, London, EC3V | England and Wales |
| 3QQ | ||||
Development Physics Limited (notes C, E) | Property | 33.3% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ | ||||
DP (Pampisford) Limited (notes D, F) | Property | 100% | 12 Little Portland Street, | England and Wales |
| London W1W 8BJ |
London & Associated Properties PLC 2023 65
FINANCIAL STATEMENTS Notes to the financial statements
13. INVENTORIES - PROPERTY
Development land and infrastructure:
| 2023 | 2022 | |
| £’000 | £’000 | |
At 1 January | 22,862 | 25,213 |
Capitalised expenditure | 360 | 443 |
Capitalised interest | 417 | 304 |
Disposal | (14,750) | - |
Impairments | - | (3,098) |
At 31 December | 8,889 | 22,862 |
The net realisable value of developments is assessed by the directors and is subject to key estimates made in respect of future sales prices
and build costs. Variations in these assumptions can have significant effects on the net realisable value of developments.
In 2018 the Group acquired a development property through West Ealing Projects Limited a 50:50 joint venture with Bisichi. This property
is held at cost of £8.889 million (2022: £8.112 million) and is currently being developed for sale.
In 2021 the Group acquired an option over a residential development opportunity in Purley, London through a joint venture held 33:33:33
with Bisichi and an external partner. This property is held at cost of £nil (2022: £nil), with a full provision being made for development
expenditure, until such time as a decision is made to submit a new application following an initial unsuccessful planning application.
The Group has relinquished its interest in the Orchard Square, Sheffield development property. Note 6 explains this in more detail, including
its financial effect.
14. INVENTORIES - MINING
| 2023 | 2022 | |
| £’000 | £’000 | |
| Coal | ||
Washed | 1,949 | 4,758 |
Mining production | 542 | 162 |
Work in progress | 85 | 221 |
Other | 3 | 58 |
2,579 | 5,199 |
| 2023 | 2022 | |
| TOTAL | TOTAL | |
| £’000 | £’000 | |
At 1 January | 12,590 | 3,631 |
Additions | 1,189 | 9,758 |
Gain | 856 | 718 |
Disposals | (377) | (1,517) |
At 31 December | 14,258 | 12,590 |
| 2023 | 2022 | |
| £'000 | £’000 | |
Market value of readily realisable investments listed on stock exchanges in the United Kingdom | 6,843 | 6,782 |
Market value of readily realisable investments listed on overseas stock exchanges | 7,415 | 5,808 |
14,258 | 12,590 |
| 2023 | 2022 | |
| £’000 | £’000 | |
Trade receivables | 4,695 | 4,978 |
Other receivables | 2,285 | 2,290 |
Prepayments and accrued income | 433 | 647 |
7,413 | 7,915 |
66 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
| 2023 | 2022 | |
| £'000 | £’000 | |
| Market value of listed Investments: | ||
Listed in United Kingdom | 618 | 686 |
Listed outside United Kingdom | 116 | 200 |
734 | 886 | |
Original cost of listed investments | 760 | 846 |
Unrealised (deficit) / surplus of market value versus cost | (26) | 40 |
| 2023 | 2022 | |
| £’000 | £’000 | |
Trade payables | 8,752 | 8,621 |
Other taxation and social security costs | 118 | 39 |
Other payables | 3,563 | 3,828 |
Accruals and deferred income | 2,030 | 4,570 |
14,463 | 17,058 |
| 2023 | 2023 | 2022 | 2022 | |
| £’000 | £’000 | £’000 | £’000 | |
| CURRENT | NON-CURRENT | CURRENT | NON-CURRENT | |
Other loans (Bisichi) | 7 | 22 | 570 | 50 |
£1.25 million term bank loan (secured) repayable by 2024 (Dragon)* | 950 | – | 1,143 | – |
Bank overdrafts (secured) (Bisichi) | 3,534 | – | 3,225 | – |
| £12.7 million term bank loan (secured) repayable by 2023 at 6.95 per | ||||
cent* (note 6) | – | – | 12,715 | – |
£0.04 million term loan (unsecured) repayable by 2026 at 2.5 per cent | 8 | 12 | 9 | 20 |
£3.96 million term bank loan (secured) repayable by 2024 (Bisichi)* | 3,920 | – | – | 3,880 |
£4.4 million term loan (secured) - repayable by 2024 (Broadway Regen) | 4,373 | – | 4,399 | – |
£13.60 million term bank loan (secured) repayable by 2027 at 7.45%* | – | 13,257 | – | 13,163 |
12,792 | 13,291 | 22,061 | 17,113 |
| 2023 | 2022 | |
| £'000 | £’000 | |
United Kingdom | 22,520 | 35,329 |
South Africa | 3,563 | 3,845 |
26,083 | 39,174 |
London & Associated Properties PLC 2023 67
FINANCIAL STATEMENTS Notes to the financial statements
19. BORROWINGS CONTINUED
| 2023 | 2023 | 2022 | 2022 | |
| £’000 | £’000 | £’000 | £’000 | |
| BANK | LEASE | BANK | LEASE | |
| BORROWINGS | OBLIGATIONS | BORROWINGS | OBLIGATIONS | |
Balance at 1 January | 39,174 | 2,253 | 38,664 | 4,247 |
Exchange adjustments | (453) | (24) | 3 | 5 |
Cash movements excluding exchange adjustments | (138) | (290) | 272 | (1,235) |
Disposal of subsidiary | (12,654) | – | – | – |
Valuation movements | 154 | 37 | 235 | (764) |
Balance at 31 December | 26,083 | 1,976 | 39,174 | 2,253 |
| 2023 | |||||
| HEAD | |||||
| LEASES ON | |||||
| 2023 | INVESTMENT | 2023 | 2023 | 2022 | |
| TOTAL | PROPERTY | OFFICE | OTHER | TOTAL | |
| £’000 | £’000 | £’000 | £’000 | £’000 | |
| Minimum lease payments fall due: | |||||
Within one year | 410 | 121 | 239 | 50 | 467 |
Second to fifth year | 622 | 486 | - | 136 | 882 |
After five years | 10,038 | 10,029 | - | 9 | 9,914 |
11,070 | 10,636 | 239 | 195 | 11,263 | |
Future finance charges on lease liabilities | (9,094) | (9,048) | (16) | (30) | (9,010) |
Present value of lease liabilities | 1,976 | 1,588 | 223 | 165 | 2,253 |
| Present value of lease liabilities: | |||||
Within one year | 394 | 121 | 223 | 50 | 414 |
Second to fifth year | 547 | 437 | - | 110 | 787 |
After five years | 1,035 | 1,030 | - | 5 | 1,052 |
1,976 | 1,588 | 223 | 165 | 2,253 |
| 2023 | 2022 | |
| £’000 | £’000 | |
At 1 January | 1,716 | 1,391 |
Exchange adjustment | (213) | 6 |
Unwinding of discount | 112 | 319 |
At 31 December | 1,615 | 1,716 |
68 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
22. FINANCIAL INSTRUMENTS
2023 | 2022 | |||
| FAIR | CARRYING | FAIR | CARRYING | |
| VALUE | VALUE | VALUE | VALUE | |
| £’000 | £’000 | £’000 | £’000 | |
Cash and cash equivalents | 6,978 | 6,978 | 15,382 | 15,382 |
Investments - non-current assets | 14,258 | 14,258 | 12,590 | 12,590 |
Investments - current assets | 734 | 734 | 886 | 886 |
Trade and other receivables | 8,889 | 8,889 | 8,887 | 8,887 |
Other assets | 6,875 | 6,875 | 7,268 | 7,268 |
Bank overdrafts | (3,534) | (3,534) | (3,225) | (3,225) |
Bank loans | (22,571) | (22,549) | (35,945) | (35,949) |
Lease liabilities | (1,976) | (1,976) | (2,253) | (2,253) |
Other liabilities | (12,315) | (12,315) | (12,449) | (12,449) |
Total financial liabilities before debentures | (2,662) | (2,640) | (8,859) | (8,863) |
London & Associated Properties PLC 2023 69
FINANCIAL STATEMENTS Notes to the financial statements
22. FINANCIAL INSTRUMENTS CONTINUED
| 2023 | LESS THAN | 2-5 YEARS | OVER | |
| TOTAL | 1 YEAR | 5 YEARS | ||
| £’000 | £’000 | £’000 | £’000 | |
Bank overdrafts (floating) | 3,534 | 3,534 | – | – |
Bank loans (fixed) | 4,393 | 4,381 | 12 | – |
Bank loans (floating) | 14,617 | 957 | 13,660 | – |
Lease liabilities | 11,070 | 410 | 622 | 10,038 |
Trade and other payables (non-interest) | 12,315 | 12,315 | – | – |
45,929 | 21,597 | 14,294 | 10,038 |
| 2022 | LESS THAN | OVER | ||
| TOTAL | 1 YEAR | 2-5 YEARS | 5 YEARS | |
| £’000 | £’000 | £’000 | £’000 | |
Bank overdrafts (floating) | 3,225 | 3,225 | – | – |
Bank loans (fixed) | 4,428 | 4,408 | 20 | – |
Bank loans (floating) | 32,036 | 14,428 | 17,608 | – |
Lease liabilities | 11,263 | 467 | 882 | 9,914 |
Trade and other payables (non-interest) | 12,449 | 12,449 | – | – |
63,401 | 34,977 | 18,510 | 9,914 |
2023 | 2022 | |||||
| GROSS | LOSS | NET CARRYING | GROSS | LOSS | NET CARRYING | |
| AMOUNT | ALLOWANCE | AMOUNT | AMOUNT | ALLOWANCE | AMOUNT | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
0-30 days | 3,433 | (308) | 3,125 | 4,438 | - | 4,438 |
30-60 days | - | - | - | 18 | (4) | 14 |
60-90 days | 9 | (3) | 6 | 15 | (5) | 10 |
90+ days | 489 | (205) | 284 | 932 | (417) | 515 |
Total | 3,931 | (516) | 3,415 | 5,403 | (426) | 4,977 |
| Being: | ||||||
Mining | 2,951 | (301) | 2,650 | 3,878 | - | 3,878 |
Property | 980 | (215) | 765 | 1,525 | (426) | 1,099 |
3,931 | (516) | 3,415 | 5,403 | (426) | 4,977 |
70 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
22. FINANCIAL INSTRUMENTS CONTINUED
| 2023 | 2022 | |
| £’000 | £’000 | |
Opening loss allowance at 1 January | 426 | 636 |
Increase/(decrease) in loan loss allowance recognised in profit and loss during the year | 341 | (42) |
Receivables written off during the year as uncollectable | (251) | (128) |
Unused amount reversed | - | (40) |
Closing loss allowance at 31 December | 516 | 426 |
| 2023 | 2022 | |
| £'000 | £’000 | |
Sterling | 1,570 | 7,779 |
South African Rand | 1,109 | 2,238 |
US Dollar | 563 | 573 |
3,242 | 10,590 |
| UK | SOUTH AFRICA | |
| 2023: | £'000 | £'000 |
Sterling | 12,082 | - |
South African Rand | 40 | (12,583) |
US Dollar | 2,095 | - |
14,217 | (12,583) |
| UK | SOUTH AFRICA | |
| 2022: | £’000 | £’000 |
Sterling | 14,715 | - |
South African Rand | 45 | (11,743) |
US Dollar | 1,971 | - |
16,731 | (11,743) |
London & Associated Properties PLC 2023 71
FINANCIAL STATEMENTS Notes to the financial statements
22. FINANCIAL INSTRUMENTS CONTINUED
| 2023 | 2022 | |
| £’000 | £’000 | |
Fixed rate borrowings | 4,393 | 4,428 |
| Floating rate borrowings | ||
– Other borrowings | 17,770 | 34,746 |
22,163 | 39,174 | |
Average fixed interest rate | 10.96% | 6.97% |
Weighted average cost of debt on overdrafts, bank loans and debentures | 10.34% | 8.63% |
Average period for which borrowing rate is fixed | 0.3 years | 0.4 years |
| 2023 | |||||
| GAIN/(LOSS) | |||||
| TO INCOME | |||||
| LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL | STATEMENT | |
| £'000 | £'000 | £'000 | £'000 | £’000 | |
| Financial assets | |||||
Quoted equities – non-current assets | 14,258 | - | - | 14,258 | 856 |
Quoted equities – current assets | 734 | - | - | 734 | (26) |
| Financial liabilities | |||||
Interest rate swaps | - | - | - | - | - |
| 2022 | |||||
| GAIN | |||||
| TO INCOME | |||||
| LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL | STATEMENT | |
| £’000 | £’000 | £’000 | £’000 | £’000 | |
| Financial assets | |||||
Quoted equities – non-current assets | 12,590 | - | - | 12,590 | 718 |
Quoted equities – current assets | 886 | - | - | 886 | 40 |
| Financial liabilities | |||||
Interest rate swaps | - | - | - | - | 69 |
| 2023 | 2022 | |
| £'000 | £’000 | |
Total debt | 28,060 | 41,427 |
Less cash and cash equivalents | (6,978) | (15,382) |
Net debt | 21,082 | 26,045 |
Total equity | 48,313 | 53,715 |
43.6% | 48.5% |
72 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
22. FINANCIAL INSTRUMENTS CONTINUED
| 2023 | 2022 | |
| £'000 | £’000 | |
Cash at bank and in hand | 6,978 | 15,382 |
| 2023 | 2022 | |
| £'000 | £’000 | |
| Bank loans and overdrafts: | ||
Repayable on demand or within one year | 8,873 | 22,061 |
Repayable between two and five years | 17,211 | 17,113 |
26,084 | 39,174 |
| 2023 | 2022 | |
| £’000 | £’000 | |
Balance at 1 January | (752) | (309) |
Transferred to consolidated income statement | 1,011 | (465) |
Exchange adjustment | 173 | 22 |
Balance at 31 December | 432 | (752) |
| The deferred tax balance comprises the following: | ||
Revaluation of properties | (1,265) | (1,140) |
Accelerated capital allowances | (4,558) | (4,302) |
Short-term timing differences | 560 | 544 |
Unredeemed capital deductions | 2,665 | 1,439 |
Losses and other deductions | 3,030 | 2,707 |
Deferred tax asset / (liability) at end of year: | 432 | (752) |
| NUMBER OF | NUMBER OF | |||
| ORDINARY 10P | ORDINARY 10P | |||
| SHARES | SHARES | 2023 | 2022 | |
| 2023 | 2022 | £’000 | £’000 | |
Authorised: ordinary shares of 10p each | 110,000,000 | 110,000,000 | 11,000 | 11,000 |
Allotted, issued and fully paid share capital | 85,542,711 | 85,542,711 | 8,554 | 8,554 |
Less: held in Treasury (see below) | (216,715) | (216,715) | (22) | (22) |
“Issued share capital” for reporting purposes | 85,325,996 | 85,325,996 | 8,532 | 8,532 |
FINANCIAL STATEMENTS Notes to the financial statements
London & Associated Properties PLC 2023 73
FINANCIAL STATEMENTS Notes to the financial statements
24. SHARE CAPITAL CONTINUED
| NUMBER OF ORDINARY | ||||
10P SHARES | COST / ISSUE VALUE | |||
| 2023 | 2022 | |||
| 2023 | 2022 | £’000 | £’000 | |
Shares held in Treasury at 1 January | 216,715 | 218,197 | 144 | 144 |
Issued for share incentive plan - dividends investment (Dec 2020 - 10.5p) | – | (1,482) | – | – |
Shares held in Treasury at 31 December | 216,715 | 216,715 | 144 | 144 |
| CHANGES DURING THE YEAR | |||||
| AT 1 | AT 31 | ||||
| JANUARY | OPTIONS | OPTIONS | OPTIONS | DECEMBER | |
| 2023 | EXERCISED | GRANTED | LAPSED | 2023 | |
Shares issued to date | 2,367,604 | – | – | – | 2,367,604 |
Shares allocated over which options have not been granted | 1,549,955 | – | – | – | 1,549,955 |
Total shares allocated for issue to employees under the scheme | 3,917,559 | – | – | – | 3,917,559 |
| CHANGES DURING THE YEAR | |||||
| AT 1 | AT 31 | ||||
| JANUARY | OPTIONS | OPTIONS | OPTIONS | DECEMBER | |
| 2023 | EXERCISED | GRANTED | LAPSED | 2023 | |
Shares issued to date | 450,000 | – | – | – | 450,000 |
Shares allocated over which options have not yet been granted | 550,000 | – | – | – | 550,000 |
Total shares allocated for issue to employees under the scheme | 1,000,000 | – | – | – | 1,000,000 |
| NUMBER OF | |||||
| NUMBER OF SHARES | SHARE OPTIONS | NUMBER OF SHARES | |||
| PERIOD WITHIN | FOR WHICH OPTIONS | ISSUED/EXERCISED/ | FOR WHICH OPTIONS | ||
| SUBSCRIPTION | WHICH OPTIONS | OUTSTANDING AT | (CANCELLED) | OUTSTANDING AT | |
| YEAR OF GRANT | PRICE PER SHARE | EXERCISABLE | 31 DECEMBER 2022 | DURING YEAR | 31 DECEMBER 2023 |
2022 | 352.0p | Feb 2022 - Feb 2032 | 760,000 | – | 760,000 |
| 2023 | 2022 | |||
| WEIGHTED | WEIGHTED | |||
| 2023 | AVERAGE | 2022 | AVERAGE | |
| NUMBER | EXERCISE PRICE | NUMBER | EXERCISE PRICE | |
Outstanding at 1 January | 760,000 | 352.0p | 680,000 | 79.5p |
Cancelled during the year | – | - | (680,000) | 79.5p |
Issued during the year | – | - | 760,000 | 352.0p |
Outstanding at 31 December | 760,000 | 352.0p | 760,000 | 352.0p |
Exercisable at 31 December | 760,000 | 352.0p | 760,000 | 352.0p |
74 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
| 2023 | 2022 | |
| £’000 | £’000 | |
As at 1 January | 21,169 | 10,536 |
Share of profit for the year | 70 | 18,462 |
Dividends paid | (936) | (8,031) |
Shares issued | – | 237 |
Exchange movement | (480) | (35) |
As at 31 December | 19,823 | 21,169 |
| 2023 | 2022 | |
| BISICHI PLC | £’000 | £’000 |
Revenue | 49,253 | 95,111 |
Profit for the year attributable to owners of the parent | 259 | 17,612 |
Profit for the year attributable to NCI | 51 | 8,494 |
Profit for the year | 310 | 26,106 |
Other comprehensive expense attributable to owners of the parent | (469) | (19) |
Other comprehensive expense attributable to NCI | (206) | (24) |
Other comprehensive expense for the year | (675) | (43) |
| Balance sheet | ||
Non–current assets | 45,292 | 40,643 |
Current assets | 14,489 | 23,112 |
Total assets | 59,781 | 63,755 |
Current liabilities | (24,241) | (21,333) |
Non–current liabilities | (1,946) | (6,861) |
Total liabilities | (26,187) | (28,194) |
Net current assets at 31 December | 33,594 | 35,561 |
| Cash flows | ||
From operating activities | 2,798 | 31,252 |
From investing activities | (6,479) | (16,410) |
From financing activities | (4,235) | (7,934) |
Net cash flows | (7,916) | 6,908 |
| 2023 | 2022 | |
| BLACK WATTLE COLLIERY (PTY) LIMITED (“BLACK WATTLE”) | £’000 | £’000 |
Revenue | 47,423 | 93,356 |
Expenses | (47,275) | (63,289) |
Profit for the year | 148 | 30,067 |
Other comprehensive income | – | – |
Total comprehensive income for the year | 148 | 30,067 |
| Balance sheet | ||
Non–current assets | 18,843 | 16,325 |
Current assets | 9,033 | 11,752 |
Current liabilities | (20,460) | (18,873) |
Non–current liabilities | (2,252) | (3,522) |
Net assets at 31 December | 5,164 | 5,682 |
25. NON–CONTROLLING INTEREST (“NCI”) CONTINUED
The non-controlling interest originates from the disposal of a 37.5% shareholding in Black Wattle Colliery (Pty) Ltd in 2010 when the total
issued share capital in Black Wattle Colliery (Pty) Ltd was increased from 136 shares to 1,000 shares at par of R1 (South African Rand)
through the following shares issue:
• a subscription for 489 ordinary shares at par by Bisichi Mining (Exploration) Limited increasing the number of shares held from 136
ordinary shares to a total of 625 ordinary shares;
• a subscription for 110 ordinary shares at par by Vunani Mining (Pty) Ltd;
• a subscription for 265 “A” shares at par by Vunani Mining (Pty) Ltd
On 12 April 2022 the total issued share capital in Black Wattle Colliery (Pty) Ltd was increased further from 1000 shares to 1002 shares at
par of R1 through the following share issue:
• a subscription of 1 “B” Share at par by Bisichi Mining (Exploration Limited);
• a subscription of 1 “B” Share at par by Vunani Mining (Pty) Ltd
Bisichi Mining (Exploration) Limited is a wholly owned subsidiary of Bisichi PLC incorporated in England and Wales.
Vunani Mining (Pty) Ltd is a South African Black Economic Empowerment company and minority shareholder in Black Wattle Colliery (Pty) Ltd.
The “A” shares rank pari passu with the ordinary shares save that they will have no dividend rights until such time as the dividends paid by
Black Wattle Colliery (Pty) Ltd on the ordinary shares subsequent to 30 October 2008 will equate to R832,075,000.
A non-controlling interest of 15% in Black Wattle Colliery (Pty) Ltd is recognised for all profits distributable to the 110 ordinary shares held
by Vunani Mining (Pty) Ltd from the date of issue of the shares (18 October 2010). An additional non-controlling interest will be recognised
for all profits distributable to the 265 “A” shares held by Vunani Mining (Pty) Ltd after such time as the profits available for distribution, in
Black Wattle Colliery (Pty) Ltd, before any payment of dividends after 30 October 2008, exceeds R832,075,000.
The “B” shares rank pari passu with the ordinary shares save that they have sole rights to the distributable profits attributable to certain
mining reserves held by Black Wattle Colliery (Pty) Ltd. A non-controlling interest is recognised for all profits distributable to the “B” shares
held by Vunani Mining (Pty) Ltd from the date of issue of the shares (12 April 2022).
| COST | AMOUNTS | |||
| RECHARGED | OWED | |||
| (BY) / TO | (TO) / BY | ADVANCED | ||
| RELATED | RELATED | BY RELATED | ||
| PARTY | PARTY | PARTY | ||
| £’000 | £’000 | £’000 | ||
| Related party: | ||||
| Simon Heller Charitable Trust | ||||
Current account | (63) | – | – | |
Loan account | – | (700) | – | |
| Directors and key management | ||||
M A Heller, J A Heller and A R Heller | 18 | (i) | – | – |
J Mintz | – | 10 | – | |
C A Parritt | (18) | (ii) | – | – |
R Priest | (35) | (ii) | (9) | – |
Totals at 31 December 2023 | (98) | (699) | – | |
Totals at 31 December 2022 | (98) | (699) | – |
FINANCIAL STATEMENTS Notes to the financial statements
London & Associated Properties PLC 2023 75
76 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
27. EMPLOYEES
The average number of employees, including directors, of the Group during the year was as follows:
2023 | 2022 | |
Production | 209 | 213 |
Administration | 39 | 33 |
248 | 246 | |
| Staff costs during the year were as follows: | 2023 | 2022 |
| £’000 | £’000 | |
Salaries and other costs | 7,825 | 10,323 |
Social security costs | 497 | 751 |
Pension costs | 538 | 382 |
Share based payments | – | 2,220 |
8,860 | 13,676 |
29. LEASE RENTALS RECEIVABLE
The Group leases out its investment properties to tenants under operating leases. The future aggregate minimum rentals receivable under
non–cancellable operating leases are as follows:
| 2023 | 2022 | |
| £’000 | £’000 | |
2023 | 2,920 | 4,245 |
2024 | 2,569 | 3,555 |
2025 | 2,206 | 3,022 |
2026 | 1,756 | 2,601 |
2027 + | 12,679 | 15,253 |
22,130 | 28,676 |
| 2023 | 2022 | |
| £’000 | £’000 | |
Rail siding & transportation | 43 | 49 |
Rehabilitation of mining land | 1,614 | 1,715 |
Water & electricity | 41 | 47 |
1,698 | 1,811 |
London & Associated Properties PLC 2023 77
FINANCIAL STATEMENTS Notes to the financial statements
31. COMPANY FINANCIAL STATEMENTS
Company balance sheet at 31 December 2023
NOTES
2023
£’000
2022
£’000
Fixed assets
Tangible assets 31.3 443 728
Other investments:
Associated company 31.4 489 489
Subsidiaries and others 31.4 672 672
1,161 1,161
1,604 1,889
Current assets
Debtors 31.5 13,444 15,346
Bank balances 3,398 3,867
16,842 19,213
Creditors
Amounts falling due within one year 31.6 (1,897) (1,976)
Net current liabilities 14,945 17,237
Total assets less current liabilities 16,549 19,126
Creditors
Amounts falling due after more than one year 31.7 (5) (227)
Net assets 16,544 18,899
Capital and reserves
Share capital 31.9 8,554 8,554
Share premium account 4,866 4,866
Capital redemption reserve 47 47
Treasury shares 31.9 (144) (144)
Retained earnings 3,221 5,576
Shareholders’ funds 16,544 18,899
The loss for the financial year was £2,355,000 (2022: loss £2,651,000)
These financial statements were approved by the board of directors and authorised for issue on 29 April 2024 and signed on its behalf by:
John Heller Jonathan Mintz Company Registration No. 341829
Director Director
78 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
31. COMPANY FINANCIAL STATEMENTS CONTINUED
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2023
SHARE
CAPITAL
£’000
SHARE
PREMIUM
£’000
CAPITAL
REDEMPTION
RESERVE
£’000
TREASURY
SHARES
£’000
RETAINED
EARNINGS
EXCLUDING
TREASURY
SHARES
£’000
TOTAL
EQUITY
£’000
Balance at 1 January 2022 8,554 4,866 47 (144) 8,227 21,550
Loss for the year – – – – (2,651) (2,651)
Total comprehensive expense – – – – (2,651) (2,651)
Balance at 31 December 2022 8,554 4,866 47 (144) 5,576 18,899
Loss for the year – – – – (2,355) (2,355)
Total comprehensive expense – – – – (2,355) (2,355)
Balance at 31 December 2023 8,554 4,866 47 (144) 3,221 16,544
£3.2 million (2022: £5.6 million) of retained earnings (excluding treasury shares) is distributable.
31.1. COMPANY
Accounting policies
The following are the main accounting policies of the Company:
Basis of preparation
The financial statements have been prepared on a going concern basis and in accordance with Financial Reporting Standard 101 ’Reduced
Disclosure Framework’ (FRS 101) and Companies Act 2006. The financial statements are prepared under the historical cost convention as
modified to include the revaluation of freehold and leasehold properties and fair value adjustments in respect of current asset investments
and interest rate hedges.
The results of the Company are included in the consolidated financial statements. No profit or loss is presented by the Company as
permitted by Section 408 of the Companies Act 2006.
In these financial statements, the company has applied the exemptions available under FRS 101 in respect of the following disclosures:
• Cash Flow Statement and related notes;
• Comparative period reconciliations for share capital, tangible fixed assets and intangible assets;
• Disclosures in respect of transactions with wholly owned subsidiaries;
• Disclosures in respect of capital management;
• The effects of new but not yet effective IFRSs;
• Disclosures in respect of the compensation of Key Management Personnel.
As the consolidated financial statements include the equivalent disclosures, the Company has also taken the exemptions under FRS 101
available in respect of the following disclosures:
• IFRS 2 Share Based Payments in respect of Group settled share based payments;
• The disclosures required by IFRS 7 and IFRS 13 regarding financial instrument disclosures have not been provided apart from those
which are relevant for the financial instruments which are held at fair value and are not either held as part of the trading portfolio or
derivatives.
Key judgements and estimates
The preparation of the financial statements requires management to make assumptions and estimates that may affect the reported amounts
of assets and liabilities and the reported income and expenses, further details of which are set out below. Although management believes
that the assumptions and estimates used are reasonable, the actual results may differ from those estimates. Further details of the estimates
are contained in the Directors’ Report and in the Group accounting policies.
INVESTMENTS IN SUBSIDIARIES, ASSOCIATED UNDERTAKINGS AND JOINT VENTURES
Investments in subsidiaries, associated undertakings and joint ventures are held at cost less accumulated impairment losses.
Fair value measurements of investment properties and investments
An assessment of the fair value of certain assets and liabilities, in particular investment properties, is required. In such instances, fair value
measurements are estimated based on the amounts for which the assets and liabilities could be exchanged between market participants. To
the extent possible, the assumptions and inputs used take into account externally verifiable inputs. However, such information is by nature
subject to uncertainty. The fair value measurement of the investment properties may be considered to be less judgemental where external
valuers have been used as is the case with the Company.
London & Associated Properties PLC 2023 79
FINANCIAL STATEMENTS Notes to the financial statements
31.1. COMPANY CONTINUED
The following accounting policies are consistent with those of the Group and are disclosed on page 48 to 54 of the Group financial
statements.
• Revenue
• Property operating expenses
• Employee benefits
• Financial instruments
• Investment properties
• Other assets and depreciation
• Assets held for sale
• Income taxes
• Leases
31.2. RESULT FOR THE FINANCIAL YEAR
The Company’s result for the year was a loss of £2,355,000 (2022: loss of £2,651,000). In accordance with the exemption conferred by
Section 408 of the Companies Act 2006, the Company has not presented its own profit and loss account.
31.3. TANGIBLE ASSETS
INVESTMENT PROPERTIES OFFICE
TOTAL
£’000
FREEHOLD
£’000
LEASEHOLD
OVER 50 YEARS
£’000
LEASEHOLD
UNDER 50
YEARS
£’000
EQUIPMENT
AND MOTOR
VEHICLES
£’000
OFFICE
BUILDING
£’000
Cost or valuation at 1 January 2023 1,058 – – 185 77 796
Additions in the year 8 – – – 8 –
Disposals (19) – – – (19) –
Decrease on revaluation (10) – – (10) – –
Cost or valuation at 31 December 2023 1,037 – – 175 66 796
Representing assets stated at:
Valuation 175 – – 175 – –
Cost 862 – – – 66 796
1,037 – – 175 66 796
Depreciation at 1 January 2023 330 – – – 23 307
Charge for the year 266 – – – – 266
Disposals (2) – – – (2) –
Depreciation at 31 December 2023 594 – – – 21 573
Net book value at 1 January 2023 728 – – 185 54 489
Net book value at 31 December 2023 443 – – 175 45 223
The freehold and leasehold properties, excluding the present value of head leases and directors’ valuations, were valued as at 31 December
2023 by professional firms of chartered surveyors. The valuations were made at fair value. The directors’ property valuations were made at
fair value.
2023
£’000
2022
£’000
Allsop LLP 170 180
170 180
Add: Present value of headleases 5 5
175 185
80 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
31.3. TANGIBLE ASSETS CONTINUED
The historical cost of investment properties was as follows:
FREEHOLD
£’000
LEASEHOLD
OVER 50 YEARS
£’000
LEASEHOLD
UNDER 50
YEARS
£’000
Cost at 1 January 2023 – – 785
Cost at 31 December 2023 – – 785
Head leases on investment property represent the value attributed to the right of the Company to occupy and use investment property that
has a head lease interest. In the current year total cash outflow for head leases is £nil (2022: £nil). A number of these leases provide for
payment of contingent rent, usually a proportion of net rental income, in addition to fixed rents.
Office building represents the value attributed under IFRS 16 to the right of the Company to occupy its sole office building. In the current
year total cash outflow for the office lease liability is £0.3 million (2022: £0.3 million).
31.4. OTHER INVESTMENTS
COST OR VALUATION
TOTAL
£’000
SHARES IN
SUBSIDIARY
COMPANIES
£’000
SHARES IN
JOINT
VENTURES
£’000
SHARES IN
ASSOCIATE
£’000
At 1 January 2023 1,161 508 164 489
At 31 December 2023 1,161 508 164 489
Subsidiary companies
Details of the Company’s subsidiaries, joint ventures and associates are set out in note 12. Dragon is a joint venture and Bisichi and
Development Physics are associates of the Company.
In 2022 the Company’s investment Orchard Square Limited investment was impaired to a carrying value of £nil and, as explained in note 6,
following the loss of effective control of this subsidiary, no value is attributed to it at 31 December 2023.
31.5. DEBTORS
2023
£’000
2022
£’000
Trade debtors 27 66
Amounts due from associate and joint ventures 1,978 1,380
Amounts due from subsidiary companies 11,138 12,931
Other debtors 157 818
Prepayments and accrued income 144 151
13,444 15,346
31.6. CURRENT LIABILITIES
Creditors: amounts falling due within one year
2023
£’000
2022
£’000
Trade payables 45 57
Amounts owed to subsidiary companies
382 384
Amounts owed to joint ventures
33 120
Other taxation and social security costs
118 39
Lease liabilities
223 252
Other creditors
738 786
Accruals and deferred income
358 338
1,897 1,976
Borrowings
The company has no bank borrowings.
London & Associated Properties PLC 2023 81
FINANCIAL STATEMENTS Notes to the financial statements
31.7. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2023
£’000
2022
£’000
Lease liabilities 5 227
5 227
LEASE LIABILITIES
2023
TOTAL
£’000
2023
HEAD
LEASES ON
INVESTMENT
PROPERTY
1
£’000
2023
OFFICE
£’000
2022
TOTAL
£’000
Minimum lease payments fall due:
Within one year 239 - 239 287
Second to fifth year 2 2 - 241
After five years 12 12 - 12
253 14 239 540
Future finance charges on lease liabilities (25) (9) (16) (62)
Present value of lease liabilities 228 5 223 478
Present value of lease liabilities:
Within one year 223 - 223 251
Second to fifth year 2 2 - 224
After five years 3 3 - 3
228 5 223 478
1 Many head leases on investment properties provide for contingent rent in addition to the rents above, usually a proportion of rental income.
Lease liabilities greater than one year are £5,000 (2022: £226,000).
Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.
31.8. DEFERRED TAX LIABILITY
2023
£’000
2022
£’000
Deferred Taxation
Balance at 1 January – (451)
Transfer to profit and loss account – 451
Balance at 31 December – –
The deferred tax balance comprises the following:
Accelerated capital allowances (132) (39)
Short–term timing differences 290 290
Revaluation of investment properties (4) 447
Loss relief (154) (698)
Deferred tax asset at year end – –
82 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
31.9. SHARE CAPITAL
Details of share capital, treasury shares and share options are set out in note 24.
31.10. RELATED PARTY TRANSACTIONS
COST
RECHARGED
TO (BY)
RELATED
PARTY
£’000
AMOUNTS
OWED
BY (TO)
RELATED
PARTY
£’000
ADVANCED TO
(BY) RELATED
PARTY
£’000
Related party:
Development Physics Limited
Current account – 226 84
Dragon Retail Properties Limited
Current account 36 (i) (33) –
West Ealing Projects Limited
Current account – 1,619 381
Bisichi Mining PLC
Current account 200 (ii) – –
Simon Heller Charitable Trust
Current account (63) – –
Loan account – (700) –
Directors and key management
M A Heller, J A Heller and A R Heller 18 (i) – –
J Mintz – 10 –
C A Parritt (18) (iii) – –
R Priest (35) (iii) (9) –
London & Associated Securities – – –
Totals at 31 December 2023 138 1,113 465
Totals at 31 December 2022 138 561 306
Nature of costs recharged – (i) Management fees (ii) Property management fees (iii) Consultancy fees
During the period, the Company entered into transactions, in the ordinary course of business, with other related parties. The company has
taken advantage of the exemption under paragraph 8(k) of FRS101 not to disclose transactions with wholly owned subsidiaries.
Dragon Retail Properties Limited – ‘Dragon’ is owned equally by the Company and Bisichi PLC.
Bisichi PLC – The company has 41.602 per cent ownership of ‘Bisichi’.
Other details of related party transactions are given in note 26.
31.11. EMPLOYEES
2023 2022
The average weekly number of employees of the company during the year were as follows:
Directors & Administration 24 18
Staff costs during the year were as follows:
2023
£’000
2022
£’000
Salaries 1,330 1,432
Social Security costs 171 171
Pension costs 89 82
1,590 1,685
31.12. CAPITAL COMMITMENTS
There was a capital commitment of £nil at 31 December 2023, being approved and contracted for (2022: £nil).
London & Associated Properties PLC 2023 83
FINANCIAL STATEMENTS Notes to the financial statements
31.13. FUTURE AGGREGATE MINIMUM RENTALS RECEIVABLE
The Company leases out its investment properties to tenants under operating leases. The future aggregate minimum rentals receivable
under non–cancellable operating leases are as follows:
2023
£’000
2022
£’000
2023 7 7
2024 5 7
2025 - 5
12 19
31.14. CONTINGENT LIABILITIES AND POST BALANCE SHEET EVENTS
There were no contingent liabilities at 31 December 2023 (2022: £Nil).
There have been no events or transaction that require adjustment or disclosure.
84 London & Associated Properties PLC 2023
FINANCIAL STATEMENTSFINANCIAL STATEMENTS
Five year financial summary
2023
£M
2022
£M
2021
£M
2020
£M
2019
£M
Portfolio size
Investment properties–LAP^ 22 23 25 31 31
Investment properties–Dragon Retail Properties 2 2 2 2 2
Investment properties–Bisichi^ 11 10 11 10 12
Assets held for sale-LAP 1 – 1 – –
Inventories-LAP 9 23 25 25 27
45 58 64 68 72
PORTFOLIO ACTIVITY £M £M £M £M £M
Acquisitions - 2.53 0.09 0.33 0.14
Disposals (note 6, 13) (14.75) (5.70) (4.17) – (12.59)
Additions to inventory at cost 0.78 0.75 1.02 0.39 0.41
(13.97) (2.42) (3.06) 0.72 (12.04)
CONSOLIDATED INCOME STATEMENT £M £M £M £M £M
Group income 53.18 100.24 56.48 35.02 63.97
(Loss)/profit before tax (3.48) 33.17 1.52 (10.15) (4.54)
Taxation (0.31) (12.00) (0.70) (1.09) (0.95)
(Loss)/profit attributable to shareholders (3.86) 2.70 (0.15) (6.70) (6.48)
(Loss)/profit per equity share – basic and diluted (4.52)p 3.17p (0.18)p (7.86)p (7.59)p
Dividend per share 0.00p 0.00p 0.00p 0.00p 0.00p
CONSOLIDATED BALANCE SHEET £M £M £M £M £M
Shareholders’ funds attributable to equity shareholders 28.49 32.55 29.70 29.86 36.73
Net borrowings, excluding lease obligations 19.11 23.47 30.15 33.93 27.65
Net assets per share 43.92p 38.14p 34.78p 34.99p 43.04p
Consolidated cash flow statement £M £M £M £M £M
Cash generated from operations 3.69 39.39 5.82 1.64 14.98
^ Excluding the present value of head leases
LONDON & ASSOCIATED PROPERTIES PLC
EMAIL: ADMIN@LAP.CO.UK
www.lap.co.uk
FSC
®
C001785