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RNS Number : 1229Y
Avanta Serviced Office Group PLC
27 November 2014
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT
JURISDICTION
27 November 2014
Avanta Serviced Office Group plc (AIM: ASOG)
Trading Update
Avanta Serviced Office Group plc ("ASOG", the "Company" or the
"Group") is an AIM-listed provider of flexible office space,
currently operating 28 business centres, predominantly in the
London area.
Further to the announcement by Tosca Vehicle Limited on 21
November 2014 of a cash offer (the "Offer") for the entire issued
and to be issued share capital of Avanta Serviced Office Group plc,
the board of directors of the Company (the "Board") has brought
forward its year end trading update. The Board will make a
statement regarding the Offer in due course.
The Company is pleased to report that occupancy levels across
the estate have been slightly ahead of previous expectations and
this has had a positive revenue impact at some of the Group's
larger centres. Pricing at a number of centres has also been higher
than previously expected. This has resulted in an improvement in
the overall profitability of the Group's mature estate. The Company
is also pleased to report that initial trading at its new centre on
Warwick Street has been significantly ahead of plan and the long
run targeted occupancy is now expected to be contracted by December
2014, rather than March 2015 as originally planned. Moreover, due
to the strong demand, the Company has been able to achieve initial
pricing levels significantly higher than originally anticipated.
Trading at the Company's other most recent site, 3 Tenterden
Street, is also ahead of plan and opening losses are anticipated to
be slightly lower than anticipated.
Furthermore, the Company's financial results for the full year
are expected to include one off provision releases of c.GBP0.45m in
connection with the completion of its refurbishment contracts at
its King William Street centre and lower than expected closure
costs associated with those sites held for sale.
As a consequence of the above the Company now expects revenues
and earnings for the current year to be materially ahead of current
market expectations and to post only a slight loss before tax.
Management expects the better than expected recurring trading
performance at the end of 2014 to carry on into early 2015.
The Company also confirms that it completed the sale of its
Beckenham property on 7 November 2014 and that it expects to close
the business centre operation there in December 2014. Following the
sale of the property at Beckenham, the Company paid RBS its final
fee related to the property proceeds following the refinancing in
November 2012. In total, the Company has paid RBS a total of
GBP3.3m reflecting receipts from property sales significantly
higher than anticipated at the refinancing in November 2012.
Finally, the Company is pleased to report that on 24 November
2014 it completed a ten year extension on it lease at its Austin
Friars location in the City of London.
This announcement contains the following wording which
constitutes a profit forecast (the "Profit Forecast") under Rule 28
of the City Code on Takeovers and Mergers (the "Code "):
As a consequence of the above the Company now expects revenues
and earnings for the current year to be materially ahead of current
market expectations and to post only a slight loss before tax.
Management expects the better than expected recurring trading
performance at the end of 2014 to carry on into early 2015.
Pursuant to Note 2(b) on Rule 28.1 of the Code, the Panel on
Takeovers and Mergers has given a dispensation from the requirement
for the Profit Forecast to be reported on in accordance with Rule
28.1(a) of the Code. Tosca Vehicle Limited, which announced its
Offer for the Company on 21 November 2014, has also given its
consent for the Profit Forecast not to be reported on.
Pursuant to Rule 28.1(c) of the Code, the directors of the
Company (the "Directors") confirm that the Profit Forecast
continues to be valid as at the date of this announcement. The
Directors further confirm that the Profit Forecast has been
properly compiled on the basis of the assumptions stated within the
paragraph below and that the basis of accounting used is consistent
with the accounting policies of the Company.
Assumptions for Profit Forecast
The Directors have prepared the Profit Forecast on the basis of
the following assumptions:
Factors outside the influence or control of the Company and its
Directors
-- certain expected refurbishment projects within the existing
estate are concluded prior to the 2014 financial year end.
-- rent review negotiations on one of the Group's larger centres
are concluded as management expects.
-- there are no material changes to the Group's current dilapidations provisions.
Factors within the influence or control of the Company and its
Directors
-- occupancy for the current year remains as contracted and
revenue per occupied workstation remains in line with client
contracts and historic trading.
-- operating costs are broadly in line with the first ten months
of the current financial year, adjusted for inflation (as
appropriate).
In accordance with Rule 30.4 of the Code, a copy of this
announcement will be made available on our website at
http://www.avanta.co.uk/.
Enquiries:
Avanta Serviced Office Group plc Tel: 020 73008 6000
Daniel Taylor, Chairman
Alan Pepper, Chief Executive Officer
Shore Capital & Corporate Tel: 020 7408 4090
Stephane Auton / Patrick Castle
Weber Shandwick Tel: 020 7367 5100
Nick Oborne
Shore Capital and Corporate Limited, which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority,
is acting exclusively for ASOG and for no one else in connection
with the Offer and will not be responsible to anyone other than
ASOG for providing the protections afforded to clients of Shore
Capital and Corporate Limited nor for providing advice in relation
to the Offer or any other matter or arrangement referred to in this
announcement.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in
1% or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any paper
offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i)
the offeree company and (ii) any securities exchange offeror(s). An
Opening Position Disclosure by a person to whom Rule 8.3(a) applies
must be made by no later than 3.30 pm (London time) on the 10th
business day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any securities
exchange offeror is first identified. Relevant persons who deal in
the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror, save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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