The following page provides key definitions and a glossary of the more commonly used terms in SEGRO's corporate literature and reporting.
Adjusted earnings per share
EPS based on adjusted profit before tax and excluding deferred tax on investment properties.
Adjusted net asset value per share
NAV per share adjusted to add back deferred tax associated with investment properties, as recommended by EPRA.
Adjusted profit before tax
Reported profit before tax, after reflecting EPRA adjustments and excluding items which are exceptional by virtue of their size or incidence.
Book value
The amount at which assets and liabilities are reported in the accounts.
Combined portfolio
The investment, development and trading properties of the Group, including the relevant share of joint ventures’ properties.
Continuing operations
The remaining ongoing operations of the Group after excluding the operations of the Group's US business and Slough Heat & Power Ltd.
Development pipeline
The Group’s current programme of developments authorised or in the course of construction at the balance sheet date, together with potential schemes not yet commenced on land owned or controlled by the Group or its joint ventures.
Diluted figures
Reported amounts adjusted to reflect the dilutive effects of convertible preference shares and of shares held by the employee share ownership plan trusts.
Discontinued operations
The operations of the Group's US business which was sold on 1 August 2007. Slough Heat & Power Ltd was sold on 31 December 2007. Under IFRS 5, these operations are required to be accounted for as discontinued and disclosed separately in the income statement and balance sheet.
Dividend cover
Adjusted earnings per share divided by the ordinary dividend per share.
Earnings per share (EPS)
Profit after taxation attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue during the year.
EPRA adjustments
Adjustments to income statement and balance sheet amounts reported under IFRS arising from adopting the recommendations of the Best Practices Committee of the European Real Estate Association (“EPRA”). The adjustments to income statement amounts principally relate to the exclusion of valuation gains and losses, whilst the balance sheet adjustments relate to the exclusion of deferred tax on investment properties.
Equivalent yield
The internal rate of return from an investment property, based on the value of the property assuming the current passing rent reverts to ERV and assuming the property becomes fully occupied over time. Assumes rent is received quarterly in advance. See also Nominal and True equivalent yield definitions.
Estimated rental value (ERV)
The estimated annual market rental value of lettable space as determined biannually by the Company’s valuers. This will normally be different from the rent being paid.
Finance lease
A lease that transfers substantially all the risks and rewards of ownership from the lessor to the lessee.
Gearing (net)
Total borrowings, including bank overdrafts, less short-term deposits, corporate bonds and cash, at book value, plus non-equity shareholders’ funds as a percentage of equity shareholders’ funds.
Gross rental income
Contracted rental income recognised in the period, including surrender premiums, interest receivable on finance leases and service charge income. Lease incentives, initial costs and any contracted future rental increases are amortised on a straight line basis over the lease term.
Hectares (ha)
The area of land measurement used in this report. The conversion factor used, where appropriate, is 1 hectare = 2.471 acres.
Initial yield
Annualised current passing rent expressed as a percentage of the property valuation.
IPD
Investment Property Databank.
IRR
The internal rate of return is the discount rate at which the net present value of the expected cash flows of a project is zero (ie the breakeven rate of return).
Joint venture
An entity in which the Group holds an interest and which is jointly controlled by the Group and one or more partners under a contractual arrangement whereby decisions on financial and operating policies essential to the operation, performance and financial position of the venture require each partner’s consent.
Net asset value (NAV) per share
Equity shareholders’ funds divided by the number of ordinary shares in issue at the period end.
Net rental income
Gross rental income less ground rents paid, service charge expenses and property operating expenses.
Nominal equivalent yield
The equivalent yield derived from valuing a property as though rent is received annually in arrears.
Over-rented
Space that is let at a rent above its current ERV.
Passing rent
The annual rental income currently receivable on a property as at the balance sheet date (which may be more or less than the ERV – see over-rented and reversionary).
Pre-let
A lease signed with an occupier prior to completion of a development.
REIT
A qualifying entity which has elected to be treated as a Real Estate Investment Trust for tax purposes. In the UK, such entities must be listed on a recognised stock exchange, must be predominantly engaged in property investment activities and must meet certain ongoing qualifications. SEGRO plc and its UK subsidiaries elected for REIT status with effect from 1 January 2007.
Reversionary or under-rented
Space where the passing rent is below the ERV.
Reversionary yield
The ERV of a property, expressed as a percentage of the property’s valuation. In the case of portfolio data, the reversionary yield assumes all properties are fully occupied.
SIIC
(Sociétés d'Investissements Immobiliers Cotées). A qualifying entity which has elected to be a French Real Estate Investment Trust. In France, such entities must be listed on a recognised stock exchange, must be predominantly engaged in property investment activities and must meet certain ongoing qualifications. SIICs are exempt from corporation tax. SEGRO plc, whose shares are listed on Euronext Paris, and its eligible French subsidiaries elected for SIIC status with effect from 1 January 2007.
Square metres (sq m)
The area of buildings measurements used in this report. The conversion factor used, where appropriate, is 1 square metre = 10.639 square feet.
Topped up initial yield
Annualised current passing rent plus the value of annualised rent free periods expressed as a percentage of the property valuation.
Topped up initial yield excluding vacant properties
Topped up initial yield calculated for occupied properties only.
Total development cost
All capital expenditure on a project including the opening book value of the property on commencement of development, together with all finance costs capitalised during the development.
Total return
Dividends per share plus annual growth in diluted adjusted net asset value per share, expressed as a percentage of the opening diluted adjusted net asset value per share.
Trading properties
Properties held for trading purposes and shown as current assets in the balance sheet.
True equivalent yield
The equivalent yield assuming rent is received quarterly in arrears.
Voids
The area in a property or portfolio, excluding developments, which is currently available for letting.