41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 218
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THE UNITE GROUP PLC | Annual Report and Financial Statements 2022
NOTES TO THE FINANCIAL STATEMENTS continued
Section 4: Funding continued
4.3 Net financing (gains)/costs
Accounting policies
Net financing costs comprise interest payable on borrowings and interest on lease liabilities, less interest receivable on
funds invested (both calculated using the effective interest rate method) and gains and losses on hedging instruments
that are recognised in the income statement.
2022
£m
Recognised in the income statement:
Interest income
2021
£m
(0.2)
–
Finance income
(0.2)
Gross interest expense on loans
39.5
43.7
–
Interest capitalised
(4.3)
(5.2)
Amortisation of fair value of debt recognised on acquisition
(5.9)
(4.3)
Loan interest and similar charges
29.3
34.2
8.1
8.5
Interest on lease liabilities
Mark to market gains on interest rate swaps
(70.7)
Swap cancellation fair value settlements and loan break costs
(10.9)
–
4.2
Finance (gains)/costs
(33.3)
36.0
Net financing (gains)/costs
(33.5)
36.0
The average cost of the Group’s wholly owned investment debt at 31 December 2022 is 3.3% (2021: 3.0%). The overall
average cost of investment debt on an EPRA basis is 3.4% (2021: 3.0%).
4.4 Gearing
LTV is a key indicator that the Group uses to manage its indebtedness. The Group also monitors gearing, which is
calculated using EPRA net tangible assets (NTA) and adjusted net debt. Adjusted net debt excludes IFRS 16 lease liabilities,
the unamortised fair value of debt recognised on acquisition and mark to market of interest rate swaps as shown below.
The Group’s gearing ratios are calculated as follows:
Cash and cash equivalents
Non-current borrowings
Lease liabilities
Interest rate swaps
Note
2022
£m
2021
£m
5.1
38.0
109.4
4.1
(1,265.9)
(1,162.0)
4.6a
(92.3)
(96.8)
4.3
Net debt per balance sheet
73.2
(1,247.0)
2.5
(1,146.9)
Lease liabilities
4.6a
92.3
96.8
Unamortised fair value of debt recognised on acquisition
2.3c
19.5
23.8
Adjusted net debt
(1,135.2)
(1,026.3)
Reported net asset value
2.3c
3,792.1
3,527.8
EPRA NTA
2.3c
3,715.2
3,532.2
33%
33%
Gearing
Basic (net debt/reported net asset value)
Adjusted gearing (adjusted net debt/EPRA NTA)
Loan to value
2.3a
31%
29%
31%
29%
