Financial Statements
11 Funds and joint ventures
British Land's summary share of profits of funds and joint ventures
| 2007 £m |
2006 £m |
|
|---|---|---|
| Gross rental income | 109 | 116 |
| Service charge income | 6 | 7 |
| Gross rental and related income | 115 | 123 |
| Net rental and related income | 100 | 112 |
| Other income and expenditure | (6) | (6) |
| Net financing costs | (57) | (67) |
| Underlying profit before taxation | 37 | 39 |
| Net valuation gains (including profits on disposals) | 257 | 378 |
| Goodwill impairment | (5) | |
| Profit on ordinary activities before taxation | 289 | 417 |
| REIT conversion charge | (48) | |
| Current tax | (19) | (9) |
| Deferred tax | 237 | (97) |
| Profit on ordinary activities after taxation | 459 | 311 |
| Equity £m |
Loans £m |
Total £m |
|
|---|---|---|---|
| At 1 April 2006 | 1,216 | 18 | 1,234 |
| Additions | 170 | 38 | 208 |
| Disposals | (191) | (6) | (197) |
| Share of profit after taxation | 459 | 459 | |
| Distributions and dividends: capital | (80) | (80) | |
| revenue | (32) | (32) | |
| Hedging movements | 18 | 18 | |
| At 31 March 2007 | 1,560 | 50 | 1,610 |
At 31 March 2007, the total investment in funds and joint ventures of £1,610m (2006: £1,234m) comprises £830m (2006: £599m) of investment in funds being Hercules Unit Trust (HUT), Hercules Income Fund (HIF) and Pillar Retail Europark Fund (PREF) after taking the conversion charge into account and £780m (2006: £635m) investment in joint ventures, being the total of £770m (2006: £589m) and City of London Office Unit Trust (CLOUT) of £10m (2006: £46m).
Distributions in the year include the receipt of £43m (£42m capital) from CLOUT; £38m (capital) from Tesco BL Property Partnership; £25m from HUT and £2m each from BL Davidson, HIF and PREF.
At 31 March 2007 the Group's share of funds and joint ventures properties is £2,886m (2006: £2,661m) of which £153m (2006: £69m) is carried at directors' valuation; external net debt is £1,238m (2006: £1,124m) and the mark to market adjustment for external debt is £8m asset (2006: £2m liability).
| Funds' summary financial statements All disclosures have been restated to British Land accounting policies under IFRS excluding performance and management fees due to the Group |
Hercules Unit Trust |
Hercules Income Fund |
Pillar Retail Europark Fund |
City of London Office Unit Trust |
Other | Group share 2007 |
Group share 2007 |
|---|---|---|---|---|---|---|---|
| Percentage interest – 2007 | 36.27% | 26.12% | 22.35%* | 35.94% | |||
| – 2006 | 34.64% | 26.12% | 34.16% | 35.94% | |||
| Date established | 22 September 2000 | 16 September 2004 | 17 March 2004 | 6 November 2000 | |||
| Accounting period | Year ended 31 March 2007 |
Year ended 31 March 2007 |
Year ended 31 December 2007 |
Year ended 31 March 2007 |
|||
| Summarised income statements | £m | £m | £m | £m | £m | £m | £m |
| Gross rental and related income | 116 | 7 | 20 | 3 | 49 | 35 | |
| Net rental and related income | 107 | 7 | 16 | 3 | 45 | 34 | |
| Other income and expenditure | (5) | (1) | (6) | (1) | (4) | (2) | |
| Net external interest payable | (63) | (1) | (7) | 1 | (24) | (20) | |
| Underlying profit before taxation | 39 | 5 | 3 | 3 | 17 | 12 | |
| Surplus on revaluation | 321 | 14 | 29 | (17) | (1) | 126 | 169 |
| Disposal of fixed assets | 10 | 2 | (2) | 18 | 9 | 6 | |
| Goodwill impairment | (2) | (2) | |||||
| Profit on ordinary activities before taxation | 368 | 21 | 30 | 21 | 150 | 187 | |
| REIT conversion charge | (25) | (25) | |||||
| Current tax | (9) | (1) | (2) | (1) | 4 | (4) | |
| Deferred tax | 315 | 5 | 3 | 116 | 37 | ||
| Profit on ordinary activities after taxation | 674 | 25 | 31 | 20 | (25) | 237 | 146 |
| Investment properties | 3,408 | 153 | 340 | 1,352 | 1,225 | ||
| Current assets | 28 | 1 | 24 | 120 | 59 | 71 | |
| Cash and deposits | 29 | 3 | 8 | 12 | 17 | 20 | |
| Gross assets | 3,465 | 157 | 372 | 132 | 1,428 | 1,316 | |
| Current liabilities | (52) | (3) | (18) | (36) | (25) | (61) | (54) |
| Bank debt falling due within one year | (6) | (69) | (26) | (7) | |||
| Bank debt falling due after one year | (224) | (198) | (126) | (156) | |||
| Securitised debt | (1,013) | (367) | (332) | ||||
| Deferred tax | (7) | (24) | (8) | (122) | |||
| Gross liabilities | (1,296) | (9) | (240) | (105) | (25) | (588) | (671) |
| Net external assets | 2,169 | 148 | 132 | 27 | (25) | 840 | 645 |
| Represented by: | |||||||
| Investors' capital | 2,169 | 148 | 132 | 27 | (25) | 840 | 645 |
| Total investment | 2,169 | 148 | 132 | 27 | (25) | 840 | 645 |
| Capital commitments | 65 | 5 | 154 | 54 | 14 | ||
* When the fund is fully invested, this will reach approximately 40%.
| Joint ventures' summary financial statements All disclosures have been restated to British Land accounting policies under IFRS |
The Scottish Retail Property Limited Partnership |
BLT Properties Ltd | The Tesco British Land Property Partnership |
Tesco BL Holdings Ltd |
The Tesco Aqua Limited Partnership |
|---|---|---|---|---|---|
| All joint ventures are held equally on a 50:50 basis | |||||
| Partners | Land Securities Group PLC |
Tesco PLC | Tesco PLC | Tesco PLC | Tesco PLC |
| Date established | March 2004 | November 1996 | February 1998 | November 1999 | March 2007 |
| Accounting period | Year ended 31 March 2007 |
Year ended 31 March 2007 |
Year ended 31 March 2007 |
Year ended 31 March 2007 |
1 month ended 31 March 2007 |
| Summarised income statements | £m | £m | £m | £m | £m |
| Gross rental and related income | 49 | 17 | 8 | 27 | 1 |
| Net rental and related income | 29 | 16 | 7 | 26 | 1 |
| Other income and expenditure | (1) | (1) | |||
| Net interest – External | (22) | (10) | (3) | (17) | (1) |
| – Shareholders | 1 | ||||
| Net interest (payable) receivable | (22) | (9) | (3) | (17) | (1) |
| Underlying profit before taxation | 6 | 7 | 4 | 8 | |
| Surplus on revaluation | 13 | 53 | 23 | 69 | |
| Disposal of fixed assets | 5 | 30 | |||
| Profit on property trading | |||||
| Goodwill impairment | (5) | ||||
| Profit (loss) on ordinary activities before taxation | 19 | 65 | 57 | 77 | (5) |
| REIT conversion charge | |||||
| Current tax | 7 | (12) | (15) | (2) | |
| Deferred tax | (11) | (3) | 2 | (15) | |
| Profit on ordinary activities after taxation | 15 | 50 | 44 | 60 | (5) |
| Summarised balance sheets | |||||
| Investment properties | 714 | 363 | 109 | 705 | 652 |
| Development properties | |||||
| Total properties | 714 | 363 | 109 | 705 | 652 |
| Current assets | 6 | 20 | 9 | 20 | 5 |
| Upstream loans to joint venture shareholders | 17 | ||||
| Cash and deposits | 13 | 40 | 3 | 22 | 8 |
| Gross assets | 733 | 440 | 121 | 747 | 665 |
| Current liabilities | (7) | (18) | (22) | (29) | (10) |
| Bank debt falling due within one year | |||||
| Bank debt falling due after one year | (185) | (45) | (314) | (487) | |
| Securitised debt | (427) | ||||
| Debentures | |||||
| Obligations under finance leases | (11) | ||||
| Deferred tax | (74) | (52) | (14) | (96) | |
| Gross liabilities | (519) | (255) | (81) | (439) | (497) |
| Net external assets | 214 | 185 | 40 | 308 | 168 |
| Represented by: | |||||
| Shareholder loans | 52 | ||||
| Ordinary shareholders' funds/Partners' capital | 214 | 185 | 40 | 308 | 116 |
| Total investment | 214 | 185 | 40 | 308 | 168 |
| Capital commitments | 17 |
| Joint ventures' summary financial statements All disclosures have been restated to British Land accounting policies under IFRS |
BL Fraser Ltd | BL Davidson Ltd* | Other† | Group Share 2007 |
Group Share 2006 |
|---|---|---|---|---|---|
| All joint ventures are held equally on a 50:50 basis | |||||
| Partners | House of Fraser plc |
Manny Davidson, his family and trusts |
|||
| Date established | July 1999 | September 2001 | |||
| Accounting period | Year ended 31 March 2007 |
5 months ended 31 August 2006 |
|||
| Summarised income statements | £m | £m | £m | £m | £m |
| Gross rental and related income | 14 | 15 | 1 | 66 | 88 |
| Net rental and related income | 13 | 14 | 2 | 55 | 78 |
| Other income and expenditure | (1) | (1) | (2) | (4) | |
| Net interest – External | (9) | (6) | (1) | (35) | (48) |
| – Shareholders | 2 | 2 | 1 | ||
| Net interest (payable) receivable | (9) | (6) | 1 | (33) | (47) |
| Underlying profit before taxation | 4 | 7 | 2 | 20 | 27 |
| Surplus on revaluation | 10 | 23 | 2 | 98 | 194 |
| Disposal of fixed assets | 4 | 21 | |||
| Profit on property trading | 3 | 3 | 9 | ||
| Goodwill impairment | (3) | ||||
| Profit (loss) on ordinary activities before taxation | 14 | 30 | 11 | 139 | 230 |
| REIT conversion charge | (23) | (23) | |||
| Current tax | (1) | (2) | (3) | (15) | (5) |
| Deferred tax | 4 | (5) | 135 | 121 | (60) |
| Profit on ordinary activities after taxation | 17 | 23 | 120 | 222 | 165 |
| Summarised balance sheets | |||||
| Investment properties | 298 | 42 | 1,463 | 1,425 | |
| Development properties | 77 | 77 | 4 | ||
| Total properties | 298 | 119 | 1,540 | 1,429 | |
| Current assets | 1 | 24 | 54 | 65 | |
| Upstream loans to joint venture shareholders | 20 | 28 | 24 | ||
| Cash and deposits | 5 | 17 | 63 | 47 | |
| Gross assets | 304 | 180 | 1,685 | 1,565 | |
| Current liabilities | (7) | (50) | (97) | (98) | |
| Bank debt falling due within one year | (4) | (1) | (3) | (17) | |
| Bank debt falling due after one year | (126) | (17) | (595) | (401) | |
| Securitised debt | (214) | (214) | |||
| Debentures | (57) | ||||
| Obligations under finance leases | (2) | (6) | (8) | ||
| Deferred tax | (26) | 131 | (181) | ||
| Gross liabilities | (165) | 63 | (915) | (976) | |
| Net external assets | 139 | 243 | 770 | 589 | |
| Represented by: | |||||
| Shareholder loans | 1 | 23 | 50 | 18 | |
| Ordinary shareholders' funds/Partners' capital | 138 | 220 | 720 | 571 | |
| Total investment | 139 | 243 | 770 | 589 | |
| Capital commitments | 64 | 73 | 33 |
* Became a subsidiary with effect from 31 August 2006.
† Comprises smaller joint ventures including Eurofund Investments Zaragoza SL, a development joint venture, and Group adjustments. Amounts are shown at the relevant percentage for Group Share.