REGISTERED NUMBER: 02954192 (ENGLAND AND WALES)
PINEAPPLE CORPORATION PLC
ANNUAL REPORT AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
PINEAPPLE CORPORATION PLC
CONTENTS OF THE FINANCIAL STATEMENTS
Page | |
Company Information | 1 |
Chairman's Statement | 2 |
Strategic Report | 3 |
Report of the Directors | 10 |
Statement of Directors' responsibilities | 12 |
Corporate Governance Report | 13 |
Independent Auditors' report - Group | 14 |
Consolidated income statement | 18 |
Consolidated statement of comprehensive income | 19 |
Consolidated statement of financial position | 20 |
Consolidated statement of changes in equity | 21 |
Consolidated statement of cash flow | 22 |
Notes to the consolidated financial statements | 23 |
Independent Auditors' report - Company | 41 |
Company statement of financial position | 45 |
Company statement of changes in equity | 46 |
Notes to the Company financial statements | 47 |
PINEAPPLE CORPORATION PLC
COMPANY INFORMATION
FOR THE YEAR ENDED 31 MARCH 2023
Executive Directors: | T H Berglund (Chairman) |
A J Sperrin | |
D C Farley | |
Secretaries: | A J Sperrin |
M Jeffrey | |
Registered office: | 12 Blacks Road |
London | |
W6 9EU | |
Registered number: | 02954192 (England and Wales) |
Independent auditor: | Harmer Slater Limited |
Statutory Auditor | |
Salatin House | |
19 Cedar Road | |
Sutton | |
Surrey | |
SM2 5DA |
Page 1
PINEAPPLE CORPORATION PLC
CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 MARCH 2023
I am pleased to present my report for the year ended 31 March 2023.
Highlights
Following an extended period where we have been struggling against the effects of Brexit and then covid we are now faced with the challenge of the sharp and massive increases in interest rates imposed by the Bank of England to reduce current high rates of inflation.
In order to meet this challenge we have refocussed our attention on reducing our bank debt to levels that we feel comfortable with. In order to achieve this we have postponed some of our development program while we dispose of non-core investment properties where we have already maximised any potential for increasing value.
In the meantime our company has performed well in extremely difficult circumstances and the results of the group reflect the positive management of the company:
- Gross rental income has risen by 14%
- Net asset value per share has increased by 9p from 504p to 513p (an increase of 1.7%)
- Dividends have remained at 18p per share
- Combining the growth in value per share and the dividend yield of 3.5% means our shareholders have enjoyed a total return of 5.3% in the year.
The future
I am pleased to say that we have avoided the property sectors that have been hardest hit by covid and more recently higher interest rates. We have no exposure to the office sector and very limited exposure to the general high street retail sector.
At the time of writing this report residential property prices in London have held up well in spite of the interest rate increases. However, there are signs that prices are now beginning to fall. How far the market drops depends to a great extent on how far and for how long the Bank of England increases interest rates. I am optimistic that in the medium term the London residential market will bounce back quickly and strongly as soon as interest rates start to move in the other direction again - as it has always done in the past. Demand for residential property in London is stronger than it has ever been and supply is limited.
Clearly there are concerns over the current high rate of inflation, particularly with construction costs and the likelihood of higher interest rates which need to be managed carefully, but due to the nature and makeup of our portfolio and the commitment of our management we are well placed to move forward positively from here.
Board and management
I am pleased to report that the group has retained the services of its existing board of directors and will continue to benefit from their years of experience and diversity of background, hopefully for years to come.
I would also like to thank all our directors, business partners and shareholders for their continued interest and support of the company.
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PINEAPPLE CORPORATION PLC
STRATEGIC REPORT FOR THE YEAR ENDED 31 MARCH 2023
The directors are pleased to present their Strategic Report for the year ended 31 March 2023.
THE GROUP
Pineapple Corporation Plc is the parent company of the group and its shares are admitted to trading on the Euro MTF market of the Luxembourg Stock Exchange. It acts as the holding company of the group and owns a portfolio of properties as an investment company. It's wholly owned subsidiary undertakings at 31 March 2023, all of which are property investment companies, are listed on pages 52 and 53.
STRATEGY AND OBJECTIVES
The group's objective is to enhance shareholder value by increasing asset value, increasing profits and increasing dividends.
The group seeks to achieve this through:
- maintaining a balanced portfolio of residential and commercial properties;
- changing the portfolio mix as market conditions change;
- maximising the value of existing properties by exploiting any development potential;
- improving the lease/tenant profile of the commercial properties; and
- making further investments in properties where opportunities exist to significantly enhance the value of the asset.
THE BUSINESS MODEL
Pineapple Corporation Plc is a Real Estate Investment Trust (REIT). A REIT is a property company which enables its shareholders to invest in commercial and residential properties and receive benefits as if they owned the property directly. Our business model focuses on enhancing shareholder value via a combination of increasing asset value, increasing profits and increasing dividends from our well balanced portfolio of residential and commercial investment properties. This model drives our leasing/renting, planning and development strategy including ensuring that we let space to reliable tenants and minimise tenancy voids and their associated costs. Our business model is based on having very low fixed overheads and utilising the services of trusted and experienced property advisors and agents.
REVIEW OF THE BUSINESS AND FUTURE DEVELOPMENTS
Progress and events during the year
After two years of carefully managing the disruptive effects of the covid pandemic on our business we hoped to refocus our attention on maximising the returns and development potential of the investments in our portfolio. However, as we emerged from the world of covid lockdowns strains on supply chains began to fuel inflation which was then hugely exacerbated by the war in Ukraine. The Bank of England responded with sharp and massive increases in interest rates with base rates increasing from 0.1% at the beginning of 2022 to its current rate of 5.0% (at 20th July 2023).
As a result we have refocussed our attention on reducing our levels of bank debt. Whilst we have just completed our Munster Road development of four flats, we have postponed our other development projects until we have reduced our bank debt to levels that we are comfortable with moving forward,
We have continued to dispose of non-core investment properties where we have already maximised any potential for increasing value.
During the year we disposed of four small flats and one investment property in Portsmouth for a total of £2.5M.
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