Bruntwood Bond 2 PLC Update statement on Covid 19 and rent collection
October 23 2020 - 2:00AM
RNS Non-Regulatory
TIDMBRU2
Bruntwood Bond 2 PLC
23 October 2020
23rd October 2020
BRUNTWOOD GROUP LIMITED
BRUNTWOOD INVESTMENTS PLC
BRUNTWOOD BOND 2 PLC
UPDATE STATEMENT ON COVID-19 AND LATEST RENT COLLECTION
Bruntwood Group Limited ("Bruntwood") today updates the market
on the impact of the Covid-19 pandemic on its business, including a
summary of the latest rent collection position.
Chris Oglesby, CEO of Bruntwood, said
"Since the start of the COVID crisis - our primary focus has
always been the safety and wellbeing of our colleagues and
customers. Over the last seven months, we made every effort to stay
connected with them - provided a wide range of both colleague and
customer support and communications. This includes a comprehensive
"return to the workplace" programme and operational plans in place
across all of our buildings to ensure they operate to the highest
standards of COVID safeguarding - as positively assessed by The
British Safety Council. All of this meant that, when they were
ready, both customers and colleagues have felt safe and comfortable
coming back into our COVID secure spaces; and in recent months we
have been gradually welcoming back increasing numbers."
Financial Position
Following the repayment of the 2020 Retail bonds, the Group has
GBP30m of cash reserves, GBP50m of undrawn committed available
facilities and GBP68m of unencumbered assets upon which further
finance could be secured.
The Board has modelled various scenarios including reviewing
estimated customer default rates, lower retention rates, higher
concessions and valuation yield movement. Based on the output of
these models, The Board considers there to be sufficient income and
valuation headroom across Bruntwood's debt facilities and does not
expect Bruntwood to breach any terms relating to them. We have
modelled the forecast covenant performance on each loan facility.
Valuation covenant headroom is in excess of 30% on the majority of
our facilities and in excess of 25% on our NatWest Club facility.
Income would have to fall by over 30% on all of our facilities
before any interest cover covenants are breached. In addition, we
would expect that the existence of GBP68m of unencumbered assets
would provide the resources to remedy any breaches in such
circumstances. The earliest major bank facility maturity is not
until March 2022.
Impact on Operations
Bruntwood has a well diversified customer base and is not
exposed to the failure of any single customer or sector. We have
sought to pass on the benefit of any savings made by Bruntwood in
respect of lightly utilised customer space during the Covid period,
and we continue to work with customers in response to any requests
for support which are considered on a case by case basis.
As of 20th October 2020, 95% of March quarter rents and 90% of
June rents were collected with the balance being on payment plans
or being actively pursued at the date of this announcement. If we
exclude retail customers, the relevant metrics increase to 97% of
March rent and 93% of June.
As at 20th October 2020, 79% of September quarter rents had been
collected (81% excluding retail). This is ahead of the March / June
quarters at a comparable point but behind the 92% collected at the
same date last year. We continue to speak with all our customers on
a regular basis and work with every customer to support them as far
as possible through these challenging times. We will continue to
work closely with all customers and where support is required we
will seek to reach a fair solution for everyone.
Strong cash collection and reduction in non-essential overheads
has meant that the business continues to run cash positive before
capital outlay is taken into account. Despite lettings being well
behind where we would expect them to be in a non-Covid year, record
retention levels mean that vacancy has remained consistent at
8.6%.
The 400,000 square foot first commercial phase of Circle Square
(part of the SciTech JV with Legal and General) is on track to
reach practical completion in November 2020. The majority of space
is prelet. Future phases and further development schemes will only
proceed based on the achievement of pre-let hurdles or equivalent
de-risking mechanisms. All of our current major development schemes
are pre-funded with any equity requirement having already been
injected.
ENDS
For further information, please see Bruntwood's website at
https://bruntwood.co.uk/ or contact:
Kevin Crotty (Chief Financial Officer) +44 (0) 161 212 2222
Sean Davies (Director of Financing
& Investment) +44 (0) 161 212 2222
Forward-Looking Statements: This announcement contains certain
forward-looking statements with respect to Bruntwood's expectations
and plans, strategy, management objectives, future developments and
performances, costs, revenues and other trend information. These
statements are subject to assumptions, risk and uncertainty. Many
of these assumptions, risks and uncertainties relate to factors
that are beyond Bruntwood's ability to control or estimate
precisely and which could cause actual results or developments to
differ materially from those expressed or implied by these
forward-looking statements. Certain statements have been made with
reference to forecast process changes, economic conditions and the
current regulatory environment. Any forward-looking statements made
by or on behalf of Bruntwood are based upon the knowledge and
information available to Directors on the date of this
announcement. Accordingly, no assurance can be given that any
particular expectation will be met and Bruntwood's bondholders are
cautioned not to place undue reliance on the forward-looking
statements. Additionally, forward-looking statements regarding past
trends or activities should not be taken as a representation that
such trends or activities will continue in the future. Other than
in accordance with its legal or regulatory obligations (including
under the UK Listing Rules and the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority), Bruntwood
does not undertake to update forward-looking statements to reflect
any changes in events, conditions or circumstances on which any
such statement is based. Past bond performance cannot be relied on
as a guide to future performance. Nothing in this announcement
should be construed as a profit forecast. The information in this
announcement does not constitute an offer to sell or an invitation
to buy securities in Bruntwood or an invitation or inducement to
engage in any other investment activities.
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END
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