To:
Company Announcements
Date:
29 August 2017
Company: AXA
Property Trust Limited
Subject:
Net Asset Value 30 June 2017
(Unaudited)
CAPITAL REDEMPTION
- During the Financial year ending 30 June
2017 the Company returned £24.0 million capital to
Shareholders by means of two capital redemptions: £18.4 million on
17 February 2017 and £5.6 million on
23 June 2017, bringing the total
capital returned to Shareholders to £48.1 million.
CORPORATE SUMMARY
- The Company’s unaudited Consolidated Net Asset Value as at
30 June 2017 was £15.83 million and
the NAV per share was 67.65 pence.
This reflects a slight increase of 0.98
pence per share compared to 31 March
2017 when the NAV per share was 66.67
pence (consolidated Net Asset Value was £21.21 million) and
a decrease of 1.28 pence per share
compared to 31 December 2016
(consolidated Net Asset Value was £39.69 million).
- The Company and its subsidiaries made a net loss after tax of
£1.36 million for the twelve month period ended 30 June 2017 and a loss of £0.75 million in the
three month period ended 30 June
2017.
MANAGED WIND-DOWN STATUS
- During the year disposals of all but one of AXA Property Trust
Limited’s properties were completed for aggregated sales proceeds
of €52.67 million
- The sales completed over the past 12 months leave one asset to
be disposed of. Despite ongoing marketing, this last sale has been
difficult to realise and although interest is being followed up, it
is considered a sale may not now materialise until the first half
of 2018.
PORTFOLIO UPDATE
The sole remaining asset comprises the cinema investment in
Curno, Italy.
Investment name |
Country |
Sector |
Percentage of portfolio |
Curno,
Bergamo |
Italy |
Leisure |
100% |
Despite the challenging liquidity constraints, the tenant
remains committed to the location and cash flow generation is
strong, with rents. There are currently no unforeseen expenditure
requirements.
MARKET UPDATE
Eurozone GDP growth accelerated by a seasonally adjusted 0.6%
quarter-on-quarter (q-o-q) in Q1 2017, the fastest rate of growth
in two years. Household consumption and fixed investment were the
main drivers, whereas imports offset exports, with the net result
that the external sector provided a neutral contribution to growth.
Among the major Eurozone economies, Spain remained the strongest performer, with
GDP growth reaching 0.8%, followed by Germany (0.6%), France (0.5%) and Italy (0.4%). In contrast, GDP growth in the
UK slowed to 0.2% in Q1 2017, its weakest quarter since Q1 2016,
partly in response to a rise in inflation and a weakening of growth
in the large services sector. Having increased to 2% in
February 2017, harmonised CPI in the
Eurozone had moderated to 1.3% in June, largely because energy
prices rises decelerated. Harmonised CPI in the UK declined from
2.9% in May to 2.6% in June. Growth appears to have picked up
further momentum in the Eurozone in Q2, according to recent data
and surveys that point to rising output and greater confidence.
Despite stronger momentum in the first half of the year,
Eurozone GDP is forecast to grow at around the same rate in 2017 as
in 2016 (1.8%). Higher inflation and political uncertainty -
notably as a result of Article 50 being triggered by the UK
government in March 2017 and
elections during the year in the
Netherlands, France, the
UK, Germany and, potentially,
Italy - are expected to affect
spending by both businesses and households. Consumer spending is
expected to remain a key driver of economic growth but, in the
absence of strong wage growth, higher inflation (forecast to be
1.6% in 2017, after 0.2% in 2016) is projected to have an overall
negative impact on growth. However, exports are expected to
increase, reflecting a strengthening and broadening of the global
recovery. Although there is still considerable disparity in
conditions, some convergence between GDP growth rates in Eurozone
countries is expected. While still low by historical standards,
long-term government bond yields are forecast to rise modestly in
2017, in a continuation of the pattern seen in the final quarter of
2016. However, increased volatility is expected throughout 2017,
given the wider geo-political risks and the uncertain outlook for
asset-purchase tapering and interest rate normalisation.
Italy's GDP growth accelerated
from 0.3% quarter-on-quarter (q-o-q) in Q4 2016 to 0.4% in Q1 2017.
Growth was driven by an acceleration in inventory building and
household spending, with the latter boosted by a rise in
employment; the unemployment rate stood at 11.3% in May 2017, after peaking at 13% in November 2014. However, fixed investment and net
exports contributed negatively to growth.
Italy's economy faces some
severe headwinds and underlying growth momentum is weak; AXA IM’s
forecast is for GDP growth of 1.2% in 2017 as a whole, after 1% in
2016, one of the weakest growth rates in the Eurozone. A key risk
is Italy’s fragile banking sector. In June, the European Commission
approved the use of Italian public funds for a precautionary
recapitalisation of Monte dei Paschi di Siena and the liquidation
of two failing regional banks. While these plans will remove bad
loans, improve confidence and increase consolidation in Italy’s
banking sector, they will also increase public debt, and there is a
risk that other regional banks may yet need aid. There is also a
risk that continued political uncertainty and the government’s
narrow agenda will constrain economic growth. General elections are
required by early 2018. Matteo Renzi
won back control of the ruling Democratic Party (PD) in an
April 2017 primary and the PD and
populist Five Star Movement (M5S) are currently leading national
polls. However, while Forza Italia (FI) and the Northern League
(LN) are currently trailing far behind, their popularity has
increased according to recent polls and candidates from FI and LN
won several key municipal elections in June.
CONSOLIDATED PERFORMANCE SUMMARY
|
Audited |
Unaudited |
|
|
|
Year
ended
30 June 2016 |
30 June
2017 |
Quarterly Movement |
|
Pence
per share |
Pence
per share |
Pence per share /(%) |
Net Asset Value per
share |
67.20 |
67.65 |
0.45 |
0.67% |
Share price
(mid-market) |
55.13 |
61.25 |
6.12 |
11.10% |
Share price discount
to Net Asset
Value |
18.0% |
9.5% |
-8.5 percentage points |
Total annual
return |
Audited |
Unaudited |
|
Year
ended
30 June 2016 |
Year
ended
30 June 2017 |
Net Asset Value Total
Return |
11.2% |
2.9% |
Share Price Total
Return |
|
|
- AXA Property
Trust |
29.6% |
23.0% |
- FTSE All Share
Index |
2.2% |
18.1% |
- FTSE Real Estate
Investment Trust Index |
-8.3% |
9.2% |
Source:
AXA Investment Managers UK Limited and Stifel Nicolaus Europe
Limited. |
Total net loss was £1.35 million (-2.82
pence per share) for the twelve months to 30 June 2017, analysed as follows:
|
Unaudited |
Unaudited |
Unaudited |
|
6
months ended |
6
months ended |
12
months ended |
|
31
December 2016 |
30
June 2017 |
30
June 2017 |
|
£million |
£million |
£million |
Net rental and
related income |
1.39 |
0.65 |
2.04 |
Valuation loss on
investment properties |
(0.68) |
(0.40) |
(1.07) |
Loss on disposal of a
subsidiary and investment properties |
(0.65) |
(0.58) |
(1.23) |
General and
administrative expenses |
(0.41) |
(0.44) |
(0.85) |
Operating
loss |
(0.34) |
(0.77) |
(1.11) |
Net foreign exchange
gain |
0.29 |
(0.31) |
(0.03) |
Net gain on financial
instrument |
0.06 |
(0.04) |
0.02 |
Share in profit of a
joint venture |
0.05 |
(0.01) |
0.04 |
Net finance cost |
(0.19) |
0.02 |
(0.17) |
Loss before
tax |
(0.13) |
(1.12) |
(1.25) |
Income tax
expenses |
(0.20) |
0.10 |
(0.10) |
Loss for the
period |
(0.34) |
(1.02) |
(1.35) |
The Company will be releasing further details in its audited
Annual Report and Financial Statements for the year ended
30 June 2017.
NET ASSET VALUE
The Company’s unaudited Consolidated Net Asset Value as at
30 June 2017 was £15.83 million and
the NAV per share was 67.65 pence per
share. This reflects an slight increase of 0.98 pence per share compared to 31 March 2017 when the NAV per share was
66.67 pence per share (consolidated
Net Asset Value was £21.21 million) and a decrease of 1.28 pence per share compared to 31 December 2016 (consolidated Net Asset Value
was 39.69 million).
The Net Asset Value attributable to the Ordinary Shares is
calculated under International Financial Reporting Standards. It
includes all current year income after the deduction of dividends
and capital return paid prior to 30 June
2017.
The variation of Net Asset Value over the 6-month period ended
30 June 2017 can be analysed as
follows:
|
Unaudited |
Unaudited |
Unaudited |
|
6
months ended |
6
months ended |
12
months ended |
|
31
December 2016 |
30 June
2017 |
30 June
2017 |
|
£million |
£million |
£million |
Opening Net Asset
Value
|
38.69 |
39.69 |
38.69 |
Net
(loss) / profit after tax |
(0.34) |
(1.02) |
(1.35) |
Unrealised movement on
derivatives |
- |
- |
- |
Share
Redemption |
- |
(24.00) |
(24.00) |
Foreign
exchange translation gains |
1.33 |
1.17 |
2.50 |
Closing Net Asset
Value |
39.69 |
15.83 |
15.83 |
On a like-for-like basis the Euro valuation of the property
portfolio decreased by 1.4% to €14.0 million for the quarter
compared to previous quarter (€14.2 million) and by 3% compared to
31 December 2017 (€14.5 million).
£/€ foreign exchange rate applied to the Company’s Euro
investments in its subsidiary companies at 30 June 2017 was 1.1389 (1.1689 at 31 March 2017 and 1.1680 at 31 December 2016).
FUND GEARING
The bank loan from CA-CIB Crédit Agricole and Crédit foncier was
fully repaid in December 2016 prior
to the loan maturity, using sales proceeds from Agnadello
transaction. As at 30 June 2017 the
Company has no outstanding bank loan.
MATERIAL EVENTS
Except for those noted above, the Board of the Company is not
aware of any significant event or transaction which occurred
between 30 June 2017 and the date of
the publication of this Statement which would have a material
impact on the financial position of the Company.
Company website:
http://www.axapropertytrust.com
All Enquiries:
Real Estate Adviser
AXA Real Estate Investment Managers UK Limited
Broker Services
7 Newgate Street
London EC1A 7NX
Tel: +44 (0)20 7003 2345
Email: broker.services@axa-im.com
Broker
Stifel Nicolaus Europe Limited
150 Cheapside
London EC2V 6ET
Tel: +44 (0)20 7710 7600
Company Secretary
Northern Trust International Fund Administration Services
(Guernsey) Limited
PO Box 255
Trafalgar Court
Les Banques
St Peter Port
GY1 3QL
Tel: +44 (0)1481 745324